Cyient Ltd Directors Report.

Dear Members,

Your directors have pleasure in presenting the 29th Directors Report on the business and operations of your company, for the financial year ended 31 March 2020.

1. FINANCIAL HIGHLIGHTS

(Rs. in Million)

Consoidated

Standalone

2019-20 2018-19 2019-20 2018-19
Revenue 44,274 46,175 15,231 16,149
Other Income 1,583 1,340 1,267 1,621
Total Income 45,857 47,515 16,498 17,770
Expenses
Operating Expenditure 38,381 39,847 11,706 11,838
Depreciation and amortization expense 1,878 1,114 990 509
Impairment of non-current assets 404 - 311 -
Total Expenses 40,663 40,961 13,007 12,347
Profit before finance cost, tax and share of profit from Joint Venture 5,194 6,554 3,491 5,423
Finance cost 486 326 148 11
Profit before tax and share of profit from Joint Venture 4,708 6,228 3,343 5,412
Share of (loss) / profit from joint venture (26 ) 5 - -
Exceptional item - 35 - -
Profit before tax (PBT) 4,682 6,198 3,343 5,412
Current tax 1,181 1,512 743 1,179
Deferred tax 89 (85) 120 (174)
Profit after Tax (PAT) 3,412 4,771 2,480 4,407
Non- controlling Interest (13) (14) - -
Profit attributable to Shareholders of the Company 3,425 4,785 2,480 4,407
Other Comprehensive Income attributable to owners of the Company 133 329 (328) 257
Non-Controlling Interest - (1) - -
Basic EPS 31.14 42.43 22.56 39.07
Diluted EPS 31.14 42.36 22.56 39.01
Paid up share capital 550 552 550 552
Retained Earnings 25,027 25,070 20,433 21,813

2. STATE OF AFFAIRS / COMPANYS PERFORMANCE

Your Company provides engineering, manufacturing, geospatial, network and operations management services to global industry leaders. It delivers innovative solutions that add value to businesses through the deployment of robust processes and state-of-the-art technology. The Companys high quality products and services help clients leverage market opportunities and gain competitive advantage.

On a consolidated basis, the revenue from operations for FY 2020 stood at 44,274 million against 46,175 million over the last year. The profit for the year attributable to shareholders and non-controlling interests was Rs.3,412 million, recording a decrease of Rs.1,359 million over FY 2019.

On a standalone basis, the revenue from operations for FY 2020 stood at Rs.15,231 million which was lower by 5.68% over the last year Rs.16,149 million in FY 2019. The profit for the year was Rs.2,480 million, registering a decline of 43.73% over the PAT of Rs.4,407 million in FY 2019.

3. DIVIDEND

In terms of regulation 43A of SEBI (Listing Obligations & Disclosure requirements) Regulations, 2015, the Company has formulated and uploaded dividend policy on the corporate website (www.cyient. com/investors/ corporate-governance). Details of dividend declared and paid by the company during FY 2020 are as follows:

Fiscal 2020

Fiscal 2019

Dividend per share (in Rs.) Dividend % Dividend per share (in Rs.) Dividend %
Interim dividend - I 6 120 6 120
Interim dividend- II 9 180 NA NA
Final dividend NA NA 9 180
Total dividend 15 300 15 300

4. EARNINGS PER SHARE (EPS)

The Basic EPS of our company stood at 22.56 at standalone level and the EPS at consolidated level stood at 31.14.

5. TRANSFER TO RESERVES

The company has not transferred any amount to reserves during the year under review.

6. LIQUIDITY

The company continues to be debt-free and maintains sufficient cash reserves to meet its operations and strategic objectives. As at 31 March 2020, your company had liquid assets of Rs.5,837 million as against Rs.7,405 million at the previous year end. These funds have been invested in short-term fixed deposits and mutual funds with scheduled banks, financial institutions and debt based mutual funds.

7. COVID-19

The Company has considered internal and external sources of information up to date of approval of these financial statements in evaluating possible effects that may result from the pandemic relating to Covid-19 on the carrying amounts of trade and unbilled receivables, goodwill and intangible assets. The Company is confident about the recoverability of these assets.

8. PUBLIC DEPOSITS

The company has not accepted any deposits falling within the meaning of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year.

9. SHARE CAPITAL

The company has allotted 50,493 equity shares of Rs.5.00 each on to the associates of the company and its subsidiaries upon exercise of an equal number of stock options vested in them pursuant to the extant and Stock Option Schemes of the company.

Post April 1,2019 further, 11,93,861 shares which were bought back by the company from the open market through the stock exchange mechanism were duly extinguished in accordance and consonance with the Companies Act, 2013 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018. Pursuant to the allotments and extinguishment of shares as above, as on 31 March 2020, the paid up capital of the Company was Rs.549,856,105/- consisting of 109,971,221 equity shares of Rs.5.00 each.

10. BUYBACK OF SHARES

The Board of Directors of the company had, at its meeting held on 1 February 2019, approved the Buyback of its fully paid-up Equity Shares of the face value of Rs.5/- each, from its members/beneficial owners, other than those who are promoters or the persons in control of the company and the promoter group, from the open market through the stock exchange mechanism, in accordance with the Companies Act, 2013 (Act) and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 2018. The maximum size of the buyback was Rs.200 crores, and at a maximum price not exceeding Rs.700/- per Equity Share, payable in cash. The Company commenced the buy-back of Equity Shares from 12 February 2019 and closed on 11 April 2019. The Company has bought back and extinguished 1,193,861 Equity Shares at an average price of 640.21 per Equity Share. Accordingly, company has deployed Rs.1,999,994,028.90 (Rupees One Hundred Ninety Nine Crores Ninety Nine Lacs Ninety Four Thousand Twenty Eight and Ninety paise only) which represents 99. 9997% of the Maximum Buyback Size.

11. SUBSIDIARIES Cyient Inc. (CI)

Headquartered in East Hartford, Connecticut, Cyient Inc. provides engineering, manufacturing, geospatial, network, and operations management and digital services to customers in North America. Cyient Inc. has 28 offices across the US and Canada, and 1,794 associates sourced primarily from within the geography. CI has over 135 active clients ranging from Fortune 500 companies to mid-size organizations and local, state, and federal government agencies.

CI operates in 45 states and 6 Canadian provinces. The subsidiary generates $289M in annual revenues by leveraging both the local and global delivery capability of Cyient when executing projects across North America. CI is also principal unit for executing the acquisition strategy in North America.

Cyient Europe Limited (CEL)

Incorporated in London as Dataview Solutions Limited in 1992, it became a part of the Infotech Group in 1999. Alongside its core competency of Geospatial Services, covering data acquisition, processing and analytics, the companys services are designed to cater to leading Tier-1 and Tier-2 Telcos, gas, electric and water utility companies, public sector agencies, and commercial businesses. In addition, it provides world-class engineering services as well as digital, big data and analytics capabilities to rail, aerospace and manufacturing companies. The company enjoys longterm relationships with several of its partners and customers and has built a strong foundation of trust and reliability.

CEL has 4 wholly owned subsidiaries. The oldest, Cyient Benelux BV, based in Breda, Netherlands, provides support to its customers and business in the Benelux region while Cyient Schweiz GmbH, based in Bern, provides support and local presence for our long standing engagement with Swisscom. Cyient SRO, based on Prague in the Czech Republic was established in September 2015. Its primary focus is to provide engineering services to our rail, energy and aerospace customers across Europe and has a team size of around 100 associates. The most recent subsidiary is Ansem NV, a Belgium company that CEL acquired in April 2018. Ansem is a specialist solutions company, focused on the design and prototyping of analogue semi-conductor chips for a wide range of industrial clients. Ansem has offices in Leuven, Belgium as well as in Enschede in the Netherlands.

The company is an ISO 9001 and ISO 27001 certified organization. Leveraging the global execution capability of its parent organization, it maintains client relationships and ensures efficient project management across Europe.

Cyient GmbH (CG)

Cyient GmbH offers world-class engineering services as well as digital, big data and analytics capabilities to rail, aerospace and manufacturing companies in Germany and neighbouring countries such as Austria, France and Sweden. It was established as Advanced Graphics Software (AGS) in Leonberg, Germany, in 1992 - a 3D CAD/CAM, e-solution software and application provider.

After becoming a part of the Cyient Group in 2000, it extended its foray into other service areas like Geospatial and IT solutions. Owing to the large pool of engineering, GIS and IT resources, CG provides high-quality services and solutions to a wide range of clients with offshore cost advantage and onsite project management. Growth in the recent past has come from some of our key accounts, as well through expanding its Utility and Telecom activities, as well as semiconductor design and verification services. Cyient GmbH has branch office in France.

Cyient Australia Pty Limited (CAPL)

Established in 2014, Cyient Australia provides engineering design and network operations services to diverse industries to its Asia Pacific customers. CAPL supports its customers especially Telecommunication, Utilities and Rail transportation from global delivery centres in Sydney and Melbourne with operations Australia wide and across the APAC region. Now with logistic capabilities, Cyient Australia has branched its service offering into a full End-to-End Delivery model introducing local civil engineering into its already enhanced process. CAPL has over 300 associates operating from our global delivery centres and customers across Australia. Melbourne is the APAC headquarter

Cyient KK (CKK)

Established in 2008 in Central Tokyo, CKK is a leading engineering service provider in Japan. CKK provides end- to-end engineering services and solutions to different industry verticals such as Aerospace & Defense, Energy, Rail, Industrial, and Semiconductor. CKK leverages the global delivery capability of the parent organization, while maintaining client relationships and managing projects locally.

During the previous year, started engagement with new customer, Mitsubishi Electric Corporation (MELCO) on Design Optimization for cost reduction, Proto build and carryout functional and integration testing for Cubicle Type Gas Insulated Switchgears (C-GIS) and expanded business to Maintenance, Repair & Overhaul (MRO) operations of existing customer, IHI Corporation.

Cyient Singapore Pte Limited (CSPL)

Established in 2015, Cyient Singapore is the South East Asia headquartered subsidiary of the company. CSPL provides services and solutions to diverse industries such as aerospace, medical, telecommunications, utilities and rail transportation. CSPL has close to 50 engineers supporting its customers from the engineering centre in Singapore. CSPL specializes in development of aero engine repair engineering solutions to global airlines, engine centers and repair business units. The focus is on Total Maintenance cost reductions through distress mapping, shop floor troubleshooting, scrap reviews etc around Fleet Management Programs. CSPL has a strong customer base in the region and this entity becomes very important for the future growth in the region.

Cyient Engineering (Beijing) Limited (CEBL)

The company established a subsidiary in Beijing in 2017. During the year, the process of winding up this entity was commenced.

Cyient Israel India Limited (CIIL)

Over the past two years, Cyient has continued to grow its design-led manufacturing business with a number of leading defense OEMs in Israel. CIIL provides the company with local business development and consulting capabilities that have helped Cyient win new customers as well as expand into new business segments and services.

Cyient DLM Private Limited (CDLMPL)

CDLMPL is a leading player in the design, development and manufacturing of electronic assemblies at Mysore and Hyderabad and mechanical assemblies at Bangalore, India. Our unwavering focus on quality, cost and value engineering are critical success factors to accelerate growth. We started our new electronic manufacturing facility at GMR Aerospace and Industrial SEZ in Hyderabad.

The Secretarial Audit Report of CDLMPL as required under Regulation 24A of SEBI (LODR) Regulations, 2015 is provided as a separate annexure forming part of this report. Further, the annual report is being sent to the members excluding the aforesaid annexure. The same is available for inspection and any member interested in obtaining a copy of the same may write to the company secretary.

Cyient Insights Private Limited (CIPL)

In October 2014, Cyient acquired a majority stake in Invati Insights Private Limited, Hyderabad, India. The Company was subsequently renamed Cyient Insights Private Limited.

Cyient Insights enables its customers to derive end to end business excellence and derive quantifiable business results through gamut of machine learning and deep learning capabilities and associated actionable insights. Cyient Insights stands apart from its peers with its capability to acquire, manage and analyse vast amount of data generated by sensors embedded in machines and devices, and the unmatched commitment to add value to customers with the proven global delivery model. Cyient Insights brings in domain specialists through Cyients decades of work with verticals such as Aerospace & Defence, Heavy Engineering, Transportation, Medical, Telecommunications, Utilities, and Energy & Natural Resources and marries it to its data science capability to execute projects.

Cyient Solutions and Systems Private Limited (CSSPL)

CSS is a partnership between the company and BlueBird Aero Systems Israel has focused on opportunities in the Indian Defence Sector over the past two years. CSS offers a range of world-class Unmanned Aerial Systems and has developed new technology to address the unique needs of the countrys defence and paramilitary forces. The company has delivered systems for high- altitude aerial surveillance operations and has continued to invest in indigenous manufacturing capabilities and after market support services.

Cyient Urban Micro Skill Centre Foundation (CUMSCF)

CUMSCF is a flagship project of the companys CSR activity. CUMSCF is a company registered under section 8 of the Companies Act, 2013.

CUMSCF is an innovative and direct response to poverty alleviation. It focuses on building livelihood opportunities that are aligned with community needs and built upon community strengths. CUMSC facilitates skill development opportunities and provides support to empower participants to be self-employable, build entrepreneurship capacity or access to sustainable skilled employment

Infotech HAL Limited (IHL)

Infotech HAL Ltd (IHL) is a joint venture (50:50) between the company and Hindustan Aeronautics Limited (HAL).

It is based in Bangalore.

12. QUALITY

The company is committed to creating and delivering engineering services and solutions that exceed customer expectations and enhance the level of business profitability. Your companys quality implementation efforts are all pervasive, beginning with a stated goal. True to the image of a global player, the company has developed a reputation for providing its clients with world-class quality; the clients trust the strength of quality processes that have always assured them of timely defect-free deliverables.

True to our image as a global player, we have developed a reputation for providing our clients with world- class quality. Our clients trust the strength of quality processes that have always assured them of timely defect-free deliverables. The quality management system (QMS) is a testimony derived and optimized with experiences and best practices that are aligned with the internationally renowned quality standards and models like ISO 9001:2015, ISO 27001:2013, AS 9100 D, ISO 13485:2016, ISO 22163: 2017 (IRIS), TL 9000 R 6.0/R 5.5V, ISO 14001:2015, ISO 45001-2015 and CMMI-DEV Version 2.0 Level 5. Cyient is the 8th company in India and 12th company in the world to have been appraised at Level 5 on CMMI DEV 2.0 Version.

13. BUSINESS RESPONSIBILITY REPORT

In pursuance of Regulation 34 of the SEBI (LODR) Regulations, 2015, the company is publishing a Business Responsibility Statement. The same is enclosed as Annexure ‘A.

14. CORPORATE SOCIAL RESPONSIBILITY

Your company believes in giving back to society in some measure that is proportionate to its success in business. Corporate Social Responsibility (CSR) aims at balancing the needs of all stakeholders. The companys CSR initiative goes beyond charity and believes that as a responsible company it should take into account its impact on society as much as creating business impact. The CSR initiatives are conducted through Cyient Foundation. An elaborate report on CSR is published elsewhere in this annual report. The CSR Annual Report is enclosed as Annexure ‘B.

15. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

None of the directors of the company is disqualified under the provisions of the Companies Act, 2013 (Act) or under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All Independent Directors have provided confirmations as contemplated under section 149(7) of the Act.

Appointments/Re-appointments

In accordance with the provisions of the Act and Articles of Association of the company, Mr. Krishna Bodanapu retires by rotation and being eligible, offers himself for re-appointment.

Inductions

On the recommendations of the Leadership, Nomination and Remuneration Committee, the Board appointed Ms. Matangi Gowrishankar and Mr. Vivek Gour, as Independent Directors of the Company with effect from 25 April 2019.

Re-appointments

Mr. B.V.R.Mohan Reddy and Mr. Krishna Bodanapu were reappointed as Executive Chairman and Managing Director & CEO of the Company respectively w.e.f 25 April 2019 on the terms and conditions as recommended by the Leadership, Nomination and Remuneration Committee and by the Board of Directors of the Company. The appointments were approved by the shareholders in the 28th Annual General Meeting. Upon expiry of the term of Mr. B.V.R. Mohan Reddy was re-appointed as Executive Chairman with effect from 1 April 2020 without any remuneration. more details of the same are published in the Notice of the 29th AGM.

Pursuant to the provisions of regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2 on General Meetings issued by ICSI, brief particulars of the directors proposed to be appointed / re-appointed are provided as an annexure to the notice convening the AGM.

Mr. K. Ramachandran, Mr. John Paterson and Ms. Andrea Bierce completed their respective terms as independent directors and vacated office at the conclusion of the 28th AGM. The board thanks the directors for their contribution during their tenure.

Key Managerial Personnel

Mr. B.V.R. Mohan Reddy, Executive Chairman; Mr. Krishna Bodanapu, Managing Director & CEO; Mr. Ajay Aggarwal, CFO and Dr. Sudheendhra Putty, Company Secretary are Key Managerial Personnel of the Company in accordance with the provisions of Section(s) 2(51), and 203 ofthe Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There has been no change in the Key Managerial Personnel during the financial year.

16. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Companys policy on directors appointment and remuneration and other matters provided in section 178(3) of the Act have been disclosed in the corporate governance report, which forms part of the directors report.

17. NUMBER OF BOARD MEETINGS DURING THE YEAR

During the year, six meetings of the board were held, the details of which form part of the report on corporate governance.

18. BOARD EVALUATION AND ASSESSMENT

The company believes that formal evaluation of the board and of the individual directors, on an annual basis, is a potentially effective way to respond to the demand for greater board accountability and effectiveness. For the company, evaluations provide an ongoing means for directors to assess their individual and collective performance and effectiveness. In addition to greater board accountability, evaluation of board members helps in:

• More effective board processes

• Better collaboration and communication

• Greater clarity with regard to members roles and responsibilities and

• Improved Chairman - Managing Director - Board relations

By focusing on the board as a team and on its overall performance, the company ensures that communication and overall level of participation and engagement improves.

In order to facilitate the same, the board undertook a formal board assessment and evaluation process during 2019-20. The board evaluation was performed after seeking inputs from all the directors and included criteria such as the board composition and structure, effectiveness of board processes, information and functioning as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5 January 2017 and the amendments brought in SEBI (LODR) Regulations in 2018. The Leadership, Nomination & Remuneration Committee has overall stewardship for the process. The evaluation process covers the following aspects:

• Peer and self-evaluation of performance of directors

• Evaluation of the performance and effectiveness of the board

• Evaluation of the performance and effectiveness of Board Committees

• Evaluation of the performance of the Executive Chairman and the Managing Director & CEO

• Feedback on management support to the Board

The evaluation process elicits responses from the directors in a judicious manner - ranging from composition and induction of the board to effectiveness and governance. It also sought feedback on board and committee charters, strategy, risk management and quality of discussion and deliberations at the board. The evaluation process also ensures the fulfilment of independence criteria as specified in the applicable regulations and that the latter are independent of the management. The independent directors concerned do not participate in the evaluation process.

19. AUDIT COMMITTEE

The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The details relating to the same are given in the Report on Corporate Governance forming part of this Board Report.

20. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are part of risk management process addressing financial and financial reporting risks. They ensure the orderly and efficient conduct of business, including adherence to Company policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records. They aid in the timely preparation of financial statements. The Internal Financial Controls have been documented, digitised and embedded in the business process.

21. AUDITORS

A) Statutory Auditors

At the 28th AGM held on 6 June 2019, the members approved the appointment of S.R. Batliboi & Associates LLP, Chartered Accountants (Firm Registration No. 101049W/E-300004) as Statutory Auditors of the company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the 33rd AGM, subject to ratification of their appointment by Members at every AGM, if so required under the Act. The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM and a note in respect of same has been included in the Notice for this AGM.

B) Secretarial Auditors

The Board has appointed Mr. S. Chidambaram as Secretarial Auditors for the financial year ended 31 March 2020. The Secretarial Audit Report for the financial year ended 31 March 2020 is annexed as Annexure C to this report.

22. AUDITORS REPORT AND SECRETARIAL AUDITORS REPORT

The statutory auditors report and secretarial auditors report do not contain any qualifications, reservations or adverse remarks.

During the year, the statutory auditors and secretarial auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act.

23. VIGIL MECHANISM

The Company has put in place a Whistle Blower Policy and has established the necessary vigil mechanism as defined under Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements), 2015 for employees and others to report concerns about unethical behaviour.

It also provides for adequate safeguards against the victimisation of employees who avail of mechanism. No person has been denied access to the Chairman of the audit committee. The Whistle blower Policy is available on the website of the company i.e. (http://www.cyient. com/investors/corporate-governance). The company implemented a web based/online mechanism under the whistle blower policy. This mechanism encompasses the entire trail from the login of a complaint to its eventual redressal. The system also affords a dial-in facility to associates in various languages across the countries where the company has itsoperations.

24. EMPLOYEE STOCK OPTION PLANS

During the year, the company had granted options under two ESOP schemes to the associates of the company and its subsidiaries, in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. Disclosure pursuant to the said regulations is enclosed as Annexure D.

25. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure E to the report.

26. MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34 read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a report on Management Discussion & Analysis is enclosed as Annexure F.

27. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Companies Act, 2013, the board of directors, to the best of their knowledge and ability, 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 and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit 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 the 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 such internal financial controls are adequate and operating effectively;

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.

28. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan, guarantee, or security is proposed to be utilised by the recipient are provided in the Standalone Financial Statement. (Refer Note No. 5,6 and 21 to the Standalone Financial Statement).

29. RELATED PARTY TRANSACTIONS

The company has complied with the provisions of section 188(1) of the Act dealing with related party transactions. Information on transactions with related parties pursuant to section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and is enclosed as Annexure G.

30. EXTRACT OF ANNUAL RETURN (MGT 9)

The extract of the annual return in Form MGT 9 as required under the provisions of section 92 of the Act is enclosed as Annexure H.

The extract of the annual return of the company is also uploaded on the companys website at (www.cyient. com/investors).

31. PARTICULARS OF EMPLOYEES

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Executive Directors Ratio to median remuneration
B.V.R. Mohan Reddy 88.62
Krishna Bodanapu 122.59
Independent Directors
M.M. Murugappan
(Non-Executive and
Non - Independent) 2.22
Som Mittal 2.22
Vivek Gour 2.22
Matangi Gowrishankar 2.22
Vinai Thummalapally 5.20
Vikas Sehgal 5.20

b) The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
B.V.R. Mohan Reddy -26.0%
Krishna Bodanapu -20.0%
Ajay Aggarwal -1.0%
Sudheendhra Putty 12.0%

c) The percentage increase in the median remuneration of employees in the financial year: 6.9%.

d) The number of permanent employees on the rolls of Company: 10,439.

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was around 7.7% and the average annual increase managerial personnel 6.0%

f) Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company affirms remuneration is as per the remuneration policy of the Company.

g) The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any member interested in obtaining a copy of the same may write to the Company Secretary.

32. PARTICULARS RELATING TO THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH)

Your company is committed to ensuring a safe and harassment free workplace for every individual working in its premises. This commitment is evidenced through various policies and practices to ensure individual and company accountability. The company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment. Your company has been actively involved in ensuring that the associates are aware of the provisions of the POSH Act and rights thereunder.

The company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All associates of the company are covered under this policy.

During the year, the company conducted awareness campaigns at all locations in India.

a) Held awareness sessions on a quarterly basis at all locations in India through specific connect sessions by in-house women leaders and floor connect.

b) Enhanced the Internal web portal - also ensured more online and digital learning through dcafe for associates.

c) Have made POSH MODULE as Mandatory in the digital induction.

d) Nominated the POSH panel (across India locations) to attend related sessions on POSH being conducted by various organizations such as IWN, NHRD and CII for better understanding of the Act and its requirements

e) Nominated associates to attend women safety sessions.

f) Devised plan of action for financial year 2020.

During the year, two cases were registered and both the cases have been closed within the stipulated time limits and in accordance with the law. There are no pending complaints either at the beginning or at end of the financial year.

33. RISK MANAGEMENT

The company pursues a comprehensive risk management programme as an essential element of sound corporate governance and is committed to continuously embedding risk management in its daily culture. This process is followed in five steps:

a) Identify risks and opportunities

b) assess risk and performance for key processes

c) evaluate the risk impact across business operations

d) develop mitigation plan for the risks identified and

e) monitor the risks at regular intervals and report to the Risk Management Committee

The company has classified the risks into five categories: 1) Strategic 2) Reputational 3) Operational 4) Financial 5) Compliance/Litigation. Each identified risk is assessed according to its probability and impact on the company.

The Board of Directors has formed an internal risk management committee to identify, evaluate, mitigate and monitor the risk management in the company. The committee comprises cross-functional membership from the senior management of the company. The primary objectives of the Committee are to assist the Board in the following:

• To provide an oversight for all categories of risk and promulgate risk culture in the organization

• To adopt leading risk management practices in the industry and manage risk proactively at organizational level

• Help to develop a culture of the enterprise that all levels of people understand risks.

• Provide input to management of risk appetite and tolerance and monitor the organizations risk on an ongoing basis.

• Approve and review risk management plan which includes companys risk management structure, framework, methodologies adopted, guidelines and details of assurance and review of the risk management process.

• Monitor risks and risk management capabilities and mitigation plans.

More details on the risk management committee of the board can be found in the Report on Corporate Governance. Members may also refer to the Management Discussion & Analysis Report.

34. CORPORATE GOVERNANCE

Your company will continue to uphold the true spirit of Corporate Governance and implement the best governance practices. A report on Corporate Governance pursuant to the provisions of Corporate Governance Code stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report. Full details of the various board committees are also provided therein along with Auditors Certificate regarding compliance of conditions of corporate governance is enclosed as Annexure I.

35. DISCLOSURE REQUIREMENTS

Familiarization programme of the independent directors http://www.cyient.com/investors/corporate- governance

Policy for determining material subsidiaries of the Company http://www.cyient.com/investors/corporate- governance

Policy on dealing with related party transactions http:// www.cyient.com/investors/corporate- governance

Prevention of sexual harassment policy http://www . cyient.com/investors/corporate- governance

Environment, health and safety policy http://www.cyient . com/investors/corporate- governance

Dividend Payment policy http://www.cyient.com/ investors/corporate- governance

Criteria of Payment of Remuneration to Non-Executive Directors of the Company http://www.cyient.com/ investors/corporate- governance

There are no orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

36. CEOs DECLARATION

Pursuant to the provisions of Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a declaration by the Managing Director & CEO of the company declaring that all the members of the board and the senior management personnel of the company have affirmed compliance with the Code of Conduct of the company is enclosed as Annexure K.

The CEO/CFO certification to the board pursuant to Regulation 15 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed Annexure J.

37. GREEN INITIATIVES

As a part of conservation of natural resources and green initiatives, Electronic copies of the Annual Report 201920 and the Notice of 29th AGM are sent to all eligible members whose mail addresses are registered with the Company / depository participant(s). Physical copies of the Annual Reports will sent to the members who have not registered their email addresses. We encourage our members to register their email address and take part in green initiative.

38. ACKNOWLEDGMENTS

The board of directors expresses their thanks to the companys customers, shareholders, vendors and bankers for their support to the company during the year. We also express our sincere appreciation to the contribution made by employees at all levels. Our consistent growth was made possible by their hardwork, cooperation and support.

Your directors would like to make a special mention of the support extended by the various Departments of the Central and State Governments, particularly the Software Technology Parks of India, Development Commissioners-SEZ, Department of Communication and Information Technology, the Direct and Indirect tax authorities, the Ministry of Commerce, the Reserve Bank of India, Ministry of Corporate Affairs/Registrar of Companies, Securities and Exchange Board of India, the Stock Exchanges and others and look forward to their support in all future endeavours.

For and on behalf of the Board
B.V.R. Mohan Reddy
Place: Hyderabad Executive Chairman
Date: 7 May 2020 (DIN-00058215)