Intrasoft Technologies Ltd Directors Report.

To

The Shareholders

Intrasoft Technologies Limited

We Are Pleased To Present The Twenty Third Annual Report Of Intrasoft Technologies Limited ("The Company") Together With The Audited Financial Statements For The Financial Year Ended 31 March 2018.

Financial Statements & Results A. Financial Results:

The Consolidated And Standalone Performance During The Year Ended 31 March 2018 As Compared To The Previous Financial Year Is Summarized Below:

Consolidated Financials

Amount (Rs In Lacs)

Particulars

2017-18

2016-17

Total Income

117,497.66

94,575.60

Profit Before Interest And Depreciation

2,414.36

2,421.88

Less : Finance Cost

264.33

355.53

Less : Depreciation

195.57

187.44

Profit Before Tax

1,954.46

1,878.91

Less : Provision For Income Tax

581.31

550.63

Profit After Tax

1,373.15

1,328.28

On Standalone Basis, Total Income Of The Company Recorded At 1,533.53 Lacs In FY 2017-18 Against 1,927.29 Lacs In FY 2016-17. EBITDA Is Recorded At 270.53 Lacs In FY 2017-18 Against 631.51 Lacs In FY 2016-17. PBT For The Financial Year Under Review Is Recorded At 119.90 Lacs Against

424.21 Lacs In FY 2016-17 . The Net Profit For The Financial Year Under Review Is 125.02 Lacs As Compared To 394.36 Lacs Of The Previous Financial Year.

B. Business:

The Performance Of The Company And Its Subsidiaries During The Financial Year 2017-18 Was Remarkable. Our Total Consolidated Income (Including Other Income) For The Financial Year Under Review Is 117,497.66 Lacs, As Compared To 94,575.60 Lacs In The Previous Financial Year, Registering A Growth Of 24.24 % Year-On-Year In INR Terms. The Consolidated Net Profit For The Financial Year Under Review Increased By 3% To 1,373.15 Lacs From 1,328.28 Lacs During The Previous Financial Year. Hence We Are Growing Overall Market Share In The Sellers Market. Revenue From Operations Increased By 30% In Constant Currency Terms And 25% In INR Terms To

116,986.78 Lacs.

123Stores, The E-Commerce Business, Continued It Growth Momentum And Remained The Major Revenue Generator For The Group. Year 2017 Was Another Year Of Strong Growth For The U.S. E-Commerce Market, As Consumers Continued To Shift Their Retail Spending From The Traditional Brick-And-Mortar To Online. As Per U.S Department Of Commerce, Online Retail Sales Grew By 16.4% In 2017, The Highest Since 2011, Comprising 13% Of Total Retail Sales, While Offline Retail Sales Grew By Just 1.9% For The Year. 123Stores Grew By 31% During 2017 Clearly Outpacing The 16.4% Growth For Online Retail Growth And 18% For The Top 1000 Retailers, Hence Increasing Its Market Share. During The Year, 123Stores Added More Products From Existing Vendors, Increasing Their Share Of Vendors Wallet.

This Has Been The Year Where The Company Also Improved Its Working Capital Efficiency And Reduced Its Working Capital Cycle From 18 Days To 15 Days, Led Primarily By Optimizing Inventory Performance And Optimizing Ordering System Management. The Company Also Worked On Increasing Automation Levels Enabled By Scalable Technology Platform, Coupled With A Demand Forecasting Engine And Auto Replenishment Software. The Companys Focus On Increasing Operational Efficiencies By Leveraging Technology And Optimizing Processes Increased Efficiencies And Resulted In A New High In The Revenue Per Employee Trends. Going Forward, The Company Aims At Increasing Vendors Credit, The Process For Which Has Started During The End Of The Financial Year 2017-18. This Should Lead To Improved Working Capital Cycle And Cash Flow Generation In The Coming Years.

There Was No Change In The Nature Of The Business Of The Company, During The Year Under Review.

C. Performance Of Subsidiaries, Associates And Joint Venture Companies

The Company Has Three Wholly Owned Subsidiaries And Two Step Down Subsidiaries As On 31 March 2018 Viz. 123Greetings. Com, Inc (USA), Intrasoft Ventures Pte. Ltd (Singapore) & One Two Three Greetings (India) Private Limited (India) Wholly Owned Subsidiaries And 123Stores, Inc (USA), Wholly Owned Subsidiary Of Intrasoft Ventures Pte. Ltd (Singapore) And 123Stores E Commerce Private Limited (India), Wholly Owned Subsidiary Of 123Stores, Inc. The Entire Group Focuses On The E-Commerce Business By Consolidating All Operations Related To E-Commerce And Online Greeting Activities To Achieve Financial And Operational Efficiencies.

In Accordance With Section 129 Of The Companies Act, 2013, Consolidated Financial Statements Of The Company Along With Its Subsidiaries Have Been Prepared Which Forms Part Of This Annual Report. Further, The Performance And Financial Position Of Each Of The Subsidiaries For The Year Ended 31 March 2018 Is Attached And Marked As Annexure I (Formaoc-1) And Forms Part Of This Report.

Appropriations A. Dividend

The Board Of Directors Of The Company Has Recommended A Final Dividend Of 2/- (20%) (Previous Year 2/- Per Equity Share) Per Equity Share Of Face Value Of 10/- For The Financial Year 2017-18, Which If Approved Would Absorb 355.20 Lacs Including Dividend Distribution Tax Of 60.56 Lacs (Previous Year 354.61 Lacs Including Dividend Distribution Tax Of

59.98 Lacs).

B. Transfer To Reserves

The Board Of Directors Has Not Recommended Transfer Of Any Amount Of Profit To Reserves During The Year Under Review. Hence, The Entire Amount Of Profit For The Year Under Review Has Been Carried Forward To The Profit And Loss Account.

Financial Statements AS Per Ind-AS.

Financial Statements For The Year Ended 31 March 2018 Are In Accordance With The Indian Accounting Standards (IND-AS) Notified By The Ministry Of Corporate Affairs, Government Of India, Which Have Become Applicable To The Company For The Accounting Period Beginning On 01 April 2017. Consequently, Financials For The Period Ended 31 March 2017 Have Been Restated As Per Requirements Of The Said Notification To Comply With IND-AS.

Deposits

The Company Has Not Accepted Or Renewed Any Amount Falling Within The Purview Of Provisions Of Section 73 Of The Companies Act 2013 ("The Act") Read With The Companies (Acceptance Of

Deposits) Rules, 2014. Hence, The Requirement For Furnishing Of Details Of Deposits Which Are Not In Compliance With The Chapter V Of The Act Is Not Applicable.

Disclosures Under Section 134(3)(L) Of The Companies Act, 2013

Except As Disclosed Elsewhere In This Report, No Material Changes And Commitments Which Could Affect The Companys Financial Position Have Occurred Between The End Of The Financial Year Of The Company And The Date Of This Report.

Disclosure Of Internal Financial Controls

The Internal Financial Controls With Reference To Financial Statements As Designed And Implemented By The Company Are Found Adequate. During The Year Under Review, No Material Or Serious Observation Has Been Received From The Internal Auditors Of The Company For Inefficiency Or Inadequacy Of Such Controls.

Disclosure Of Orders Passed By Regulators Or Courts Or Tribunal

Your Directors Would Like To Inform That No Orders Have Been Passed By Any Regulator Or Court Or Tribunal Which Can Have Impact On The Going Concern Status And On The Companys Operations In Future.

Particular Of Contracts Or Arrangement With Related Parties

All Contracts / Arrangements / Transactions Entered Into By The Company During The Financial Year With Its Wholly Owned Subsidiaries Were In The Ordinary Course Of Business And At An Arms Length Basis. During The Year, The Company Had Not Entered Into Any Contract / Arrangement / Transaction With Related Parties Which Could Be Considered As Material Related Party Transaction In Accordance With The Policy Of The Company On Related Party Transactions Read With SEBI (Listing Obligations And Disclosure Requirement) Regulations, 2015. The Policy On Related Party Transactions As Approved By The Board May Be Accessed On The Companys Website Www.Itlindia.Com.

Your Directors Draw Attention Of The Members To Note No. 28 Of Standalone Financial Statements Which Sets Out Disclosures On Related Parties And Transactions Entered Into With The Said Parties.

Particulars Of Loans, Guarantees, Investments And Securities

Full Particulars Of Loans Given, Investments Made, Guarantees Given And Securities Provided Along With The Purposes For Which The Loans Or Guarantees Or Securities Are Proposed To Be Utilized By The Recipient(S) Thereof Are Provided In Note Nos. 6, 7, 8 And 26 Of Standalone Financial Statements.

Share Capital

During The Year Under Review, The Company Has Not Issued Any Shares With Differential Voting Rights And Sweat Equity Shares And Hence, Disclosures Under Section 43(A)(Ii) And Section 54(1)(D) Of The Companies Act, 2013 Read With Relevant Rules Are Not Required To Be Furnished. The Company Does Not Have A Scheme Of ESOP And Hence Disclosures Pursuant To Section 67(3) Of The Companies Act, 2013 Are Also Not Required To Be Furnished.

Matters Related To Directors And Key Managerial Personnel: A. Board Of Directors & Key Managerial Personnel

The Tenure Of Mr. Arvind Kajaria As Managing Director And Mr. Sharad Kajaria As Whole-Time Director Of The Company Expired On 31 March 2017. The Board Of Directors Of The Company At Its Meeting Held On 18 March 2017, Subject To The Approval Of The Shareholders, Re-Appointed Mr. Arvind Kajaria As Managing Director And Mr. Sharad Kajaria As Whole-Time Director Of The Company For A Further Term Of 3 (Three) Years With Effect From 01 April 2017. The Said Appointments Of Mr. Arvind Kajaria As Managing Director And Of Mr. Sharad Kajaria As Whole-Time Director Was Approved By Shareholders Of The Company In The Annual General Meeting Held On 22 August 2017.

The Board Of Directors At Its Meeting Held On 18 March 2017 Had Also Appointed Mr. Ashok Bhandari As Director In The Category Of An Independent Director Of The Company W.E.F. 18 March 2017. The Said Appointment Of Mr. Ashok Bhandari As Independent Director Was Also Approved By The Shareholders In The Annual General Meeting Held On 22 August 2017. In Accordance With The Provisions Of The Act, None Of The Independent Directors Is Liable To Retire By Rotation. Pursuant To The Provisions Of Section 152 Of The Companies Act, 2013, Mr. Arvind Kajaria Shall Retire By Rotation At The Ensuing Annual General Meeting And Being Eligible, Offer Himself For Re-Appointment. The Board Recommends His Appointment. B. Declaration By Independent Directors

The Independent Directors Of The Company Have Given A Declaration Confirming That They Continue To Meet With The Criteria Of The Independence As Provided In Sub-Section (6) Of Section 149 Of The Companies Act, 2013 As Further Amended By The Companies Amendment Act, 2017 And Regulation 16(1)(B) Of The SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015.

There Has Been No Change In The Circumstances Which May Affect Their Status As Independent Director During The Year.

C. Companys Policy On Directors Appointment And Remuneration

The Board Has As Per The Recommendation Of The Nomination And Remuneration Committee, Framed A Policy On Selection And Appointment Of Directors And Senior Managerial Personnel And Their Remuneration. The Details Of Said Policy Are Given In The Corporate Governance Report Which Forms Part Of This Annual Report.

Disclosures Related To Board, Committees And Policies: A. Board Meetings

The Board Of Directors Met 5 (Five) Times During The Financial Year 2017-18 In Accordance With The Provisions Of The Companies Act, 2013 And Rules Made Thereunder. Detailed Information On The Board Meetings Is Provided In The Corporate Governance Report Which Forms Part Of This Annual Report. B. Directors Responsibility Statement

In Terms Of Section 134(5) Of The Companies Act, 2013, In Relation To The Audited Financial Statements Of The Company For The Year Ended 31 March 2018, The Board Of Directors Hereby Confirms That: I. In The Preparation Of The Annual Accounts, The Applicable Accounting Standards Had Been Followed Along With Proper Explanation Relating To Material Departures, If Any; Ii. Such Accounting Policies Have Been Selected And Applied Consistently And The Directors 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 31 March 2018 And Of The Profit Of The Company For That Year; Iii. Proper And Sufficient Care Was Taken 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; Iv. The Annual Accounts Of The Company Have Been Prepared On A Going Concern Basis; V. Internal Financial Controls Have Been Laid Down To Be Followed By The Company And That Such Internal Financial Controls Are Adequate And Were Operating Effectively; Vi. Proper Systems Have Been Devised To Ensure Compliance With The Provisions Of All Applicable Laws And That Such Systems Were Adequate And Operating Effectively. C. Committees Of The Board

There Are Five Committees Of The Board Of Directors Of The Company Viz. Audit Committee, Nomination And Remuneration Committee, Stakeholders Relationship Committee And Corporate Social Responsibility Committee. The Other Committee Named As Business Advisory Committee Was Constituted During The Year. Detailed Information On All The Committees Is Provided In The Corporate Governance Report Alongwith The Details Of Extract From Nomination And Remuneration Policy Of The Company With Respect To Remuneration Of Executive Directors, Key Managerial Personnel And Other Senior Employees Of The Company.

Policies Framed By The Committees / Board Pursuant To The Applicable Provisions Of The Companies Act, 2013 And The SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015 Are Available On The Companys Website Www.Itlindia.Com.

Policies A. Vigil Mechanism Policy For The Directors And Employees

The Board Of Directors Of The Company Have Pursuant To The Provisions Of Section 178(9) Of The Companies Act, 2013 Read With Rule 7 Of The Companies (Meetings Of Board And Its Powers) Rules, 2014, Framed A "Vigil Mechanism Policy" For Directors And Employees Of The Company To Provide A Mechanism Which Ensures Adequate Safeguards To Employees And Directors From Any Victimization On Raising Of Concerns Of Any Violations Of Legal Or Regulatory Requirements, Incorrect Or Misrepresentation Of Any Financial Statements And Reports, Etc.

The Employees Of The Company Have The Right To Report Their Concern/Grievance To The Chairman Of The Audit Committee. The Company Is Committed To Adhere To The Highest Standards Of Ethical, Moral And Legal Conduct Of Business Operations

. B. Risk Management Policy

The Board Of Directors Of The Company Has Designed Risk Management Policy And Guidelines To Avoid Events, Situations Or Circumstances Which May Lead To Negative Consequences On The Companys Businesses, And Define A Structured Approach To Manage Uncertainty And To Make Use Of These In Their Decision Making Pertaining To All Business Divisions And Corporate Functions. Key Business Risks And Their Mitigation Are Considered In The Annual/Strategic Business Plans And In Periodic Management Reviews.

Annual Evaluation Of Directors, Committee And Board

The Board Of Directors Has Carried Out Annual Evaluation Of Its Own Performance, Committees Of The Board And Individual Directors Pursuant To The Provisions Of The Companies Act, 2013 And The Corporate Governance Requirements As Prescribed Under Securities And Exchange Board Of India (Listing Obligation And Disclosure Requirement), Regulation 2015 ("SEBI Listing Regulation").

A Statement Indicating The Manner For Evaluation Of Performance Of The Board, Its Committees And Individual Directors Is Stated In The Corporate Governance Report Forming Part Of This Annual Report.

Internal Control Systems

Adequate Internal Control Systems Commensurate With The Nature Of The Companys Business, Size And Complexity Of Its Operations Are In Place And Have Been Operating Satisfactorily. Internal Control Systems Comprising Of Policies And Procedures Are Designed To Ensure Reliability Of Financial Reporting, Timely Feedback On Achievement Of Operational And Strategic Goals, Compliance With Policies, Procedure, Applicable Laws And Regulations And That All Assets And Resources Are Acquired Economically, Used Efficiently And Adequately Protected.

Payment Of Remuneration / Commission To Directors From Holding Or Subsidiary Companies

None Of The Managerial Personnel I.E. Managing Director And Whole-Time Director Of The Company Are In Receipt Of Remuneration/ Commission From The Subsidiary Companies Of The Company.

Auditors And Reports:

The Matters Related To Auditors And Their Reports For The Year Ended 31 March 2018 Are As Under:-A. Observations Of Statutory Auditors On Accounts For The Year Ended 31 March 2018:

There Are No Observations Of The Statutory Auditors In Their Report For The Financial Year Ended 31 March 2018. B. Secretarial Audit Report:

Provisions Of Section 204 Read With Section 134(3) Of The Companies Act, 2013, Mandates The Company To Obtain A Secretarial Audit Report In The Form MR-3 From A Practicing Company Secretary. M/S. Rathi And Associates, Company Secretaries Had Been Appointed As Secretarial Auditors To Issue Secretarial Audit Report For The Financial Year 2017-18. Secretarial Audit Report Issued By M/S. Rathi And Associates, Company Secretaries In Form MR-3 For The Financial Year 2017-18 Forms Part Of This Report. C. Auditors:

The Auditors, Walker Chandiok & Co. LLP, Chartered Accountants Were Appointed As Statutory Auditors Of The Company At The 21st Annual General Meeting Held On 08 September 2016, For Consecutive Term Of 5 (Five) Years I.E. To Hold Office Up To The Conclusion Of The 26th Annual General Meeting Of The Company. As Per Companies Amendment Act, 2017, Henceforth, Ratification Of The Appointment Of Auditor Is Not Required In The Every Annual General Meeting During Their Tenure

. D. Fraud Reporting:

During The Year Under Review, There Were No Serious Frauds..

Extract Of Annual Return

Pursuant To The Provisions Of Section 134(3)(A) Of The Companies Act, 2013, Extract Of Annual Return In The Prescribed Format For The Financial Year Ended 31 March 2018 Is Attached As Annexure II Which Forms Part Of This Report.

Conservation Of Energy, Technology Absorption And Foreign Exchange Earnings And Outgo

The Particulars As Required Under The Provisions Of Section 134(3)(M) Of The Companies Act, 2013 Read With Rule 8 Of The

Companies (Accounts) Rules, 2014 In Respect Of Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo Etc. Are Furnished In Annexure III Which Forms Part Of This Report.

Annual Report On Corporate Social Responsibility

Pursuant To Section 135 Of The Companies Act, 2013 And Companies (Corporate Social Responsibility Policy) Rules, 2014, The Company Was Not Required To Spend Any Amount Towards Corporate Social Responsibility Activities.

The Annual Report On CSR As Required To Be Disclosed Under The Above Mentioned Rules For The Financial Year 2017-18 Is Attached To This Report As Annexure IV.

Particulars Of Employees AS Per Section 197 Read With Rule 5 Of The Companies (Appointment & Remuneration Of Managerial Personnel) Rules, 2014

The Information Required Pursuant To Section 197 Read With Rule 5 (1) And 5 (2) Of The Companies (Appointment & Remuneration Of Managerial Personnel) Rules, 2014 Is Attached To This Report As Annexure V.

Disclosures Under The Sexual Harassment Of Women AT Workplace (Prevention, Prohibition And Redressal) Act, 2013

The Company Has Taken Sufficient Measures And Adopted A Policy In Terms Of The Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 And Rules Thereunder. During The Year Under Review, No Complaints In Relation To Sexual Harassment At Workplace Have Been Reported.

Managements Discussion And Analysis

A Detailed Review Of The Operations, Performance And Future Outlook Of The Company And Its Business Is Given In The Managements Discussion And Analysis Which Is Attached And Forms Part Of This Report.

Corporate Governance Report

The Company Is Committed To Uphold The Values Of Transparency, Integrity, Accountability And Ethical Corporate Citizenship Across All Its Business Activities. This Commitment Lays Down The Foundation Of Its Governance Practices Which Focus On Creating Sustainable Value For The Stakeholders.

The Company Has Laid Down Code Of Conduct To Which The Board And Senior Management Have Affirmed Compliance. The Code Is Displayed On The Official Website Of The Company At Www.Itlindia.Com.

The Company Has Complied With The Provisions Of Corporate Governance Requirements, As Stipulated Under Regulation 27 Of The Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) Regulations, 2015. A Separate Section On Corporate Governance Forming Part Of The Directors Report And The Certificate From A Practicing Company Secretary Pursuant To The Said Regulation Is Attached With The Corporate Governance Report.

Acknowledgements And Appreciation

Your Directors Take This Opportunity To Place On Its Gratitude To Customers, Shareholders, Suppliers, Bankers, Business Partners/ Associates And Financial Institutions For Their Consistent Support And Encouragement To The Company.

For And On Behalf Of The Board

Arvind KAJARIA

Sharad KAJARIA

Managing Director

Whole-Time Director

(DIN No. 00106901)

(DIN No. 00108036)

Place : Kolkata Date : 28 May 2018 Registered Office: Cin: L24133mh1996plc197857

A-502, Prathamesh, Raghuvanshi Mills Ltd. Compound, Senapati Bapat Marg, Lower Parel (W), Mumbai – 400 013

Tel: 022 4004 0008

Fax: 022 2490 3123

Email: Intrasoft@Itlindia.Com

Website: Www.Itlindia.Com