Nucleus Software Exports Ltd Directors Report.

Dear Members,

We are pleased to present your Companys Thirty Second Annual Report, together with the Audited Statement of Accounts, for the year ended March 31, 2021.

1. RESULTS OF OPERATIONS AND STATE OF AFFAIRS

- Financial Results

The Company has adopted the Indian Accounting Standards (Ind-AS) with effect from April 1, 2017 (transition date being April 1,2016) pursuant to the notification issued by the Ministry of Corporate Affairs dated February 16, 2015 regarding the Companies (Indian Accounting Standards) Rules, 2015.

The consolidated financial statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015, notified under section 133 of the Act and other relevant provisions of the Act. The accounting policies have been consistently applied except where a newly issued accounting standard, if initially adopted or a revision to an existing accounting standard, requires a change in the accounting policy hitherto in use. The Management takes into cognisance all new as well as revised accounting standards on an ongoing basis.

The Company has seven subsidiary companies, all of which are wholly-owned subsidiaries. The Company discloses standalone audited financial results on a quarterly and annual basis, consolidated un-audited financial results on a quarterly basis and consolidated audited financial results on an annual basis.

During the year the Company received the order from National Company Law Tribunal (NCLT) of New Delhi, for approval of the Scheme of Amalgamation (referred to as "the Scheme") of its wholly owned subsidiaries namely Virstra -I Technology Services Limited and Avon Mobility Solutions Private Limited with Nucleus Software Exports Limited (the Company).

Upon coming into effect of the Scheme, the business undertakings of Virtsra and Avon have been transferred to and vested in the Company w.e.f. 1st April 2019 which is the appointed date and the financial results have been prepared accordingly giving effect to the Scheme. Accordingly, the comparative results have been restated for all periods presented as per guidance under Appendix C of Ind AS 103 "Business Combinations".

a) Consolidated Operations

Revenue from consolidated operations for the year was Rs.513.53 crore, as compared to Rs.520.83 crore in the previous year, a nominal decrease of 1%, despite the COVID pandemic. The Company continued its focus on strategic initiatives for new products, focused sales and the market development to help drive transformation. The overall Operational Expense for the year was Rs.385.41 crore, against Rs.427.73 crore in the previous year. The Operating Profit (EBITDA) was significantly higher at Rs.128.12 crore, 25% of revenue, against Rs.93.10 crore, 18% of revenue in the previous year. Profit after Tax for the year was also higher at Rs.117.95 crore, 23% of revenue, against Rs.88.99 crore, and 17% of revenue in the previous year.

Consolidated financial results are as below:

(Rs. In crore)
For the Year Ended March 31, 2021 % of revenue 2020 % of revenue Growth (%)
Revenue from Operations 513.53 100 520.83 100 (1.40)
Expenses
a) Employee benefit expense 330.55 64.37 322.29 61.88 2.57
b) Operating and other expenses 53.64 10.45 104.32 20.03 (48.58)
c) Finance costs (Bank charges) 1.22 0.24 1.12 0.21 8.75
Total Expenses 385.41 75.05 427.73 82.12 (9.89)
Operating Profit (EBITDA) 128.12 24.95 93.10 17.88 37.26
Depreciation 13.87 2.70 13.55 2.60 2.32
Operating Profit after Interest and Depreciation 114.25 22.25 79.55 15.27 43.62
Other Income 39.56 7.70 37.23 7.15 6.24
Profit Before Tax 153.81 29.95 116.78 22.42 31.70
Taxation 35.86 6.98 27.79 5.34 29.04
Profit After Tax 117.95 22.97 88.99 17.09 32.54
Other Comprehensive Income 1.90 0.37 (7.47) (1.43) (125.43)
Total Comprehensive Income for the period 119.85 23.34 81.52 15.65 47.00

b) Standalone Operations

Revenue from the standalone operations for the year was Rs.454.36 crore against Rs.444.20 crore in the previous year, an increase of 2%. Total Operational Expense for the year was Rs.333.04 crore against Rs.367.67 crore in the previous year, a decrease of 9%. Operating Profit (EBITDA) for the year was at Rs.121.32 crore, 26% of revenue, against Rs.76.53 crore, 17% of revenue, in the previous year. Profit after Tax for the year was at Rs.112.04 crore, 25% of revenue, against Rs.102.22 crore, 23% of revenue in the previous year.

Standalone financial results are as below:

(Rs. In crore)
For the Year Ended March 31, 2021 % of Revenue 2020 % of Revenue Growth %
Revenue from Operations 454.36 100 444.20 100 2.29
Expenses
a) Employee benefit expense 277.47 61.07 266.74 60.05 4.02
b) Operating and other expenses 54.80 12.06 100.18 22.55 (45.29)
c) Finance costs (Bank charges) 0.77 0.17 0.75 0.17 1.95
Total Expenses 333.04 73.30 367.67 82.77 (9.42)
Operating Profit (EBITDA) 121.32 26.70 76.53 17.23 58.51
Depreciation 11.43 2.52 11.23 2.53 1.73
Operating Profit after Interest and Depreciation 109.89 24.19 65.30 14.70 68.28
Other Income 36.63 8.06 63.75 14.35 (42.54)
Profit Before Tax 146.52 32.25 129.05 29.05 13.54
Taxation 34.48 7.59 26.83 6.04 28.50
Profit After Tax 112.04 24.66 102.22 23.01 9.61
Other Comprehensive Income 1.75 0.39 (8.49) (1.91) (120.65)
Total Comprehensive Income for the period 113.79 25.04 93.73 21.10 21.40

A detailed analysis on the Companys performance, both consolidated and standalone, is included in "Managements Discussion and Analysis" Report, which forms part of the Annual Report.

2. COVID-19 and Your Company

The COVID-19 pandemic has taken a significant toll on humanity worldwide for over a year now. The unexpected second wave hit India in April 2021. Significant number of Nucleites were also affected in the second wave, including demise of some of our young colleagues despite significant efforts to save them.

Early last year, your Company had quickly risen to the challenge and had set up a COVID-19 Task Force in February 2020. The goal of the Task Force was to "Ensure Safety of Nucleites and Ensure 100% Business Continuity". Many initiatives have been taken up by the team, showcasing an excellent display of empowerment by the management. The team continued to work tirelessly through 2020-21 as well to meet its goals.

This Task Force has spread awareness about the early detection, early action and extensive tracking for the safety of Nucleites and their families. The other initiatives taken are :

- A COVID Resource Center was set up that was a ready reckoner knowledge center. The COVID Resource Center has list of doctors, Dos and Donts, Training videos, Early detection and monitoring guidelines, Work from home guidelines, Presentations and monitoring tracker.

- The Task Force worked with several doctors extensively to get the necessary guidance for creation of training material on the prevention and management of the disease. Some

of the leading doctors also came forward for an exclusive session for Nucleites. A few doctors also helped in treating the affected Nucleites on an honorary basis. We would like to extend our thanks and gratitude to the medical fraternity and health care workers.

- At the peak of the wave, as the Task Force needed more help, several small teams from different business verticals came forward to provide help.

- The Task Force teams worked for Nucleites and their family members to provide help, arrange medicines, emergency facilities that were in dire shortage and other issues which needed immediate attention.

- An additional COVID insurance scheme was also put in place to ascertain the coverage of our employees, who opted for it.

To keep up the true Nucleus spirit, Nucleus Day (Nuc-Day), New Year and other celebrations were conducted virtually, with Nucleites from all locations participating enthusiastically. Contests were organized for Nucleites and their families to ensure their engagement. "Work from Home Allowance" was also given to facilitate employees to set up home offices.

The social and economic challenges posed by COVID-19 have strengthened our resolve to safeguard our employees and their families. The COVID challenge is not over yet; there are uncertainties about the onset of the third wave and the age group it is going to hit the most. Vaccination is the best tool available to help us overcome the challenge. The Task Force is also now working on finding ways to get the employees vaccinated at all locations.

3. TRANSFER TO RESERVES

In order to augment resources, your Directors do not propose to transfer any amount to reserves. Appropriation to retained earnings for the financial year ended March 31, 2021 as per financial statements are as under:

(Rs. In crore)
Retained Earnings Closing Balance as on March 31, 2021
Opening balance 498.92
Profit for the period 112.04
Dividend Paid (8.71)
Remeasurement of the defined benefit plans, net (1.47)
Closing balance 600.78

4. SHARE CAPITAL

Issued and Paid-up Share Capital

The Paid-Up Share Capital of the Company, as on March 31, 2021, is 29,040,724 equity shares of Rs.10 each, similar to the paid-up share capital as on March 31, 2020.

Shares under Compulsory Dematerialization

The shares of the Company are under compulsory dematerialization ("Demat") category and are available for trading on both the depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Of the entire paid up shares, 28,981,021 shares (99.80%) are in dematerialized form as at March 31, 2021. The International Securities Identification Number (ISIN) allotted to the Companys shares is INE096B01018.

5. LISTING

Your Company is listed at National Stock Exchange of India Ltd. and BSE Ltd.

Stock Exchange where Nucleus shares are listed Scrip Symbol /Code
National Stock Exchange of India Ltd. (NSE) w.e.f. December 19, 2002 NUCLEUS
BSE Ltd. (BSE) w.e.f. November 6, 1995 531209

6. LIQUIDITY AND CASH EQUIVALENTS

Your Company continues to retain its debt-free status and maintains sufficient cash and cash equivalents to meet future strategic initiatives. The Company has been conservative in its investment policy over the years, maintaining a reasonably high level of cash and cash equivalents which enable the Company to completely eliminate short and medium-term liquidity risks, and at the same time also help scale up operations at a short notice. The goal of cash management at Nucleus is to:

a. Use cash to provide sufficient working capital to manage business operations of the Company to be able to add value to all our stakeholders and continuously enhance the same.

b. Maintain sufficient cash as reserves that will aid the Company in capturing meaningful business opportunities, including acquisitions.

c. Invest surplus funds in low-risk bank deposits, debt schemes of mutual funds, preference shares and tax-free secured bonds of Public Sector Enterprises.

Cash and cash equivalents along with other bank balances including current investments at a consolidated level of Rs.502.82 crore, constitute 75% of the shareholders funds at the year end, against Rs.332.19 crore, 59% of the shareholders funds at the close of the previous year.

7. DIVIDEND

During FY 2020-21, based on the performance of the Company, the Board of Directors on July 30, 2020 declared an interim dividend of Rs.3/- per share (on equity share of par value of Rs.10 each).

The Board of Directors at their meeting held on June 3,2021 has recommended a Final Dividend for its shareholders. The Proposed Dividend is 60% ( 6 per equity share of Rs.10 each), taking the total dividend to Rs.9 per equity share for FY 202021. The Proposed Final Dividend is subject to the approval of shareholders at the forthcoming Annual General Meeting. If approved, the total dividend pay-out for FY 2020-21 will be Rs.26.13 crore.

The Register of Members and Share Transfer Register shall remain closed during the period July 17, 2021 to July 23, 2021 (both days inclusive) for the purpose of Annual General Meeting and payment of Dividend. The Dividend, if approved at the Annual General Meeting, will be payable to such members whose names appear on the Register of Members of the Company and as beneficial owners in the records of National Securities Depositories Ltd. and Central Depository Services (India) Ltd., at close of business hours as on July 16,2021.

8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to applicable provisions of the Companies Act 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules 2016 (the Rules) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after completion of seven years. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the Demat account created by IEPF Authority. Accordingly, the Company has transferred all unclaimed or unpaid dividends and shares to IEPF as per applicable regulations.

9. DEPOSITS FROM PUBLIC

Your Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company policy for determining Material Subsidiaries and on Related Party Transactions, as approved by the Board can be accessed on the Company website link: http://www.nucleussoftware.com/investors.

Particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, are provided as Annexure A to this Directors Report.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are provided in the notes to the Financial Statements.

12. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF FINANCIAL YEAR 2021 AND DATE OF THIS REPORT

No material changes and commitments have occurred after the close of the year till the date of this Directors Report, which affect the financial position of the Company.

13. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company.

14. MANAGEMENT DISCUSSION & ANALYSIS

As per requirements of Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosures) Regulations 2015, the Managements Discussion and Analysis of the financial condition and results of both standalone and consolidated operations have been provided separately in the Annual Report.

15. REVIEW OF BUSINESS & OUTLOOK

While almost everything changed in 2020, one that stayed the same was the importance of technology to business success. In fact, that importance grew as organizations had to quickly restructure their operations in order to support a remote workforce and improve flexibility and resiliency. The current economic climate and volatility, resulting from the COVID-19 pandemic, in Customer operations has accelerated their adoption of digital technologies - to enhance organizational resilience, get competitive advantage and optimize cost structures. Heading into 2021, there is no well-defined blueprint for the ongoing rebuilding effort, but it is certain that technology will continue to play a pivotal role.

Your Company continues its journey as a preferred partner for banking and financial organizations worldwide, helping them succeed by providing pioneering products, innovative services and above all, solutions for their business needs. During the year, your Company had growth across all geographies, driven by the market leading value proposition which is resonating with financial institutions around the globe. Your Company added 12 new customers, won 33 product orders across APAC, India, Africa and The Middle East and also implemented 67 product modules successfully. The transaction banking solution - FinnAxia - continued to gain solid traction in the International markets. With more of our customers embarking on a digital journey, the quality of discussions plus our deal pipeline, your Company remains confident in our ability to deliver long term value to all our customers Continuing the relentless focus on customer success, your Company launched a range of innovative solutions during the year.

The next decade will continue to witness growth in technology spend - primarily driven by the rise of technology natives and digital reinventors, new tech-enabled business models like ecosystems, direct-to stakeholder channels and a rise in demand for Digital 2.0 accelerated by the industrialization of Cloud, AI and cybersecurity.

16. NEW PRODUCT LAUNCHES

During the year, your Company continued to enhance the solutions to take advantage of market trends, most significant being the increasing digitization of financial services. We have leveraged digital capabilities like Virtual Assistants, messaging applications, augmented channel-based acquisition capability and Geo tracking to offer end to end digitization of the Loan lifecycle.

As part of our 6-monthly plan, we released FinnOne Neo 5.0 in May 2020 and FinnOne Neo 5.5 in November 2020. These releases now also support Finance Against Securities(FAS), Finance Lease, Operating Lease and Buy-Now Pay-Later.

We also launched Sales Assist specialized loan sourcing channel for sales staff and collateral management system for complete collateral life cycle management. This application empowers the sales staff for better management and tracking of loan application. Collateral Management system provides 3600 view of collateral pledged with financial institutions.

As a part of the ongoing development program this year, we also launched the latest versions of our Transaction Banking solution FinnAxia 7.5 and FinnAxia 8.0 which enabled corporates to make informed decisions on supplier payments through real-time visibility and access to cash and liquidity. Supporting the increasing need for real-time operations, FinnAxia 7.5 enabled banks to create "On Behalf of" structures such as POBO (Payment On Behalf of) and ROBO (Receivable On Behalf of), for their customers conceivably bringing down complex banking structures that encompass thousands of accounts across hundreds of banks, involving a wide range of currencies, into just a single physical account in a single bank. The centralized control over the outgoing payments ensures faster reconciliation and provides an enhanced view of cash positions hence eliminating trapped liquidity.

FinnAxia 7.5 & FinnAxia 8.0 leveraged AI engine of the solution to enable quicker on-boarding of corporates by reducing KYC compliance cycle times. The new release also focussed on compliance to regulatory guidelines as mandated by the Reserve Bank of India when it came to 24*7 processing of interbank payment transactions.

During the year, PaySe™ digital transformation solution was enhanced to support offline to online mode with its QR code based implementation for rural India. PaySe™ is the first product in India that has successfully completed the RBI Sandbox testing on retail payments. The objective of this Sandbox is to foster responsible innovation in financial services to benefit customers at the bottom of pyramid - which PaySe team is indeed proud to have fulfilled.

PaySe™ is getting a good amount of traction from various States in India as they have recognized the power of this action- oriented system and benefits it can provide, right from bringing in transparency and traceability of funds to digitization of all manual records, generation of financial reports like balance sheet, P&L statements on real time basis and instant tracking of NPAs along with generation of maximum livelihood for the rural members of their respective state.

17. NOTABLE ACCOLADES RECEIVED DURING THE YEAR

• Nucleus Software was awarded the "Best Technological

Innovation in Payments (B2B)" award at the Seamless Middle East 2020 conference in Dubai.

• Nucleus Software received first position at the "Corporate Governance and Sustainability Vision Awards 2021", held by Indian Chamber of Commerce.

• Nucleus Software received an award for the Annual Report (for FY 19-20) from League of American Communication Professionals (LACP). We also won the Platinum Award for excellence within the Industry for FY 2019-20 - Technology- Software and the Technical Achievement Award for overall excellence in the art and method of Annual Report communications for the past fiscal year (This is the first time we got this Award. Last year, we had won the Silver Award for Best In-House Report).

18. SUBSIDIARY COMPANIES

Your Company has seven subsidiaries across the globe. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

The following table provides a list of all these subsidiaries as on March 31, 2021:

Name of Subsidiary Location Date of Incorporation/ Acquisition Percentage of Shareholding
Nucleus Software Solutions Pte. Ltd. Singapore February 25, 1994 100%
Nucleus Software Inc. USA August 5, 1997 100%
Nucleus Software Japan Kabushiki Kaisha Japan November 2, 2001 100%
Nucleus Software Netherlands B.V. Netherlands February 3, 2006 100%
Nucleus Software Ltd. India April 21, 2008 100%
Nucleus Software Australia Pty. Ltd. Australia February 3, 2014 100%
Nucleus Software South Africa Pty. Ltd. South Africa February 10, 2015 100%

There has been no material change in the nature of the business of the subsidiaries.

The Board of Directors reviews the affairs of these subsidiaries periodically. These subsidiaries help the Company in providing front end support to customers and explore new opportunities.

A statement containing the salient features of the financial statement of our subsidiaries in the prescribed form AOC 1 is provided as Annexure B to this Directors Report. The statement also provides the details of performance, financial position of each of the subsidiaries.

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

a) Nucleus Software Solutions Pte. Ltd.

Nucleus Software Solutions Pte. Ltd. (NSS) is based in Singapore. It was incorporated in 1994 to expand the Companys business in South East Asia. Currently, it is the central entity for Asia-Pacific excluding Japan and Australia with responsibility for business development, sales and software development services for customers in the region.

b) Nucleus Software Inc.

Nucleus Software Inc. (NSI) is based in New Jersey, USA. It was incorporated in 1997 for providing business presence in the Americas. NSI operates as a business development and sales hub for the region.

c) Nucleus Software Japan Kabushiki Kaisha

Nucleus Software Japan Kabushiki Kaisha (NSJKK) is based in Tokyo, Japan. It was incorporated in 2001 to expand business in the country. NSJKK operates as a business development and sales hub for Japan. Additionally, the subsidiary provides software development services, to the local customers in Japan.

d) Nucleus Software Netherlands BV

Nucleus Software Netherlands BV (NSBV) is based in Amsterdam, The Netherlands. It was incorporated in 2006 for enlarging business presence in the European market. NSBV is a business development and sales hub for Nucleus in Europe.

e) Nucleus Software Ltd.

Nucleus Software Ltd. (NSL) has operations in Jaipur with registered office in New Delhi. It was incorporated in 2008 for facilitating delivery to larger clients through operations in a Special Economic Zone. NSL acquired 17.41 acre of land in the Mahindra World Special Economic Zone, Jaipur and has co-developed a 250-seater facility.

f) Nucleus Software Australia Pty. Ltd.

Nucleus Software Australia Pty. Ltd. (NSA) is based in Sydney, Australia. It was incorporated in 2014 for tapping the growing business opportunities in ANZ region. NSA operates as a business development and sales hub for the region. Additionally, the subsidiary provides software development services, to the local customers in Australia.

g) Nucleus Software South Africa Pty. Ltd.

Nucleus Software South Africa Pty. Ltd. (NSSA) is based in Johannesburg, South Africa. It was incorporated in 2015 for tapping the growing business opportunities in South African region. NSSA operates as a business development and sales hub for the region.

19. MERGER OF WHOLLY OWNED SUBSIDIARIES

In FY 2018-19, the Board of Directors of your Company had approved a scheme of amalgamation pursuant to Sections 230 to 232 read with Section 234 and other relevant provisions of the Companies Act, 2013, providing for the merger of its wholly owned subsidiaries, Virstra I Technology Services Ltd. and Avon Mobility Solutions Pvt. Ltd., with Nucleus Software Exports Ltd. (the Company).

The National Company Law Tribunal (NCLT) of New Delhi vide its Order dated 18th March 2020 approved the Scheme of Amalgamation (referred to as "the Scheme"), the certified copy of which was received by the Company in the quarter ended 30 June 2020. Consequent to the above Order and subsequent filing of the said certified copy with the Registrar of Companies NCT of Delhi, the Scheme has become effective from 1st July, 2020.

Upon coming into effect of the Scheme, the business undertakings of Virtsra I Technology Services Ltd. and Avon Mobility Solutions Pvt. Ltd., have been transferred to and vested in the Company w.e.f 1 April 2019 which was the appointed date in the Scheme.

20. INFRASTRUCTURE

Your Company, along with its subsidiaries, has offices at several locations across the globe. The office space and seating capacity of these offices as on March 31, 2021 is detailed below:

Office Office Location Area in Seating Capacity
Location sq. ft. No. of Persons
India Noida 208,122 1,677
Jaipur 22,312 250
Pune 9,573 114
Chennai 12,286 134
New Delhi 4,200 40
Mumbai 3,250 31
Overseas Singapore 4,807 61
Dubai, UAE 1,290 17
Tokyo, Japan 735 15
Manila, Philippines 102 3
Jakarta, Indonesia 97 3
London, UK 39 1
Sydney, Australia 130 2
New Jersey, USA 146 4
total 267,089 2,352

Noida, New Delhi and Jaipur premises are owned by the Company and its subsidiaries.

21. QUALITY PROCESSES

Your Company is committed to ensure the highest level of quality for its products and services. Nucleus Quality Management System (NQMS) continues to enable outstanding value and experience to its external and internal customers. One of the key focus for this year was to enhance the quality management processes to adapt to Work From Home during COVID-19 pandemic and coach / enable Business Groups for the enhanced Quality Management Processes. The Company has also driven Process improvement initiatives around Kaizen and Continuous Process Optimization.

Quality Processes and Frameworks were further aligned with various knowledge areas as per the PMBoK and being institutionalized across. To improve the measurement of the Quality further Integrated Defect Management System was enriched and various analytical dashboards were introduced. Special focus was brought in, on improving delivery quality and enhance customer satisfaction further, through enhanced quality.

A dedicated Quality Assurance team handles the process change management, implementation and its adherence across the organization. This team monitors quality and productivity improvements through regular facilitations, trainings, audits and reviews.

22 BRAND VISIBILITY

Your Company continued to build its presence in the traditional media as well as on the social media channels. Interactions continued with the media worldwide including television, print, wires and online portals and source exclusive media opportunities in various geographies such as Australia, Africa, the Middle East and India. Social media has been a focus area, covering a wide range of brand activities and our successes. Your Company used social media primarily for activities involving thought leadership blogs, articles, press releases, customer video testimonials and other business content marketing purposes.

Industry Interactions

Communicating the business benefits that our solutions offer and the benefits of our decades of focus is vitally important. We do this in a number of ways. For example, during the year,

our teams demonstrate our expertise and product offerings at industry events, roundtables and briefings. We showcased our capabilities virtually in many parts of the world including Australia, India, Indonesia, Nigeria, Singapore, the Philippines, the USA and the United Kingdom. These include:

• Organized a webinar on Taking Lending Closer to Customers with Digital Loan Origination, demonstrated insights on how FinnOne Neo can help lenders digitally transform their loan origination processes across channels, dramatically reduce processing times and cut down the cost of acquisition while minimizing errors and eliminating risks with real time data validation.

• Hosted a web session on Reimagining Loan Collections for the post COVID World where our experts shared strategies to ramp up collections efforts, innovative use cases of analytics-based technology in collections and focusing on automating processes to drive efficiencies with FinnOne Neo .

• Presented a webinar on Harnessing the Power of APIs in the Lending Ecosystem, shared insights on how lenders can unlock the power of APIs, offer Hyper-connected digital experiences and plug seamlessly into the fast-evolving lending ecosystem with FinnOne Neo Capitalizing on the Buy Now Pay Later digital loans opportunity.

• Participated in the Australian Mortgage Innovation Summit 2021. In this virtual summit our experts shared thoughts on how mortgage lending is evolving in an increasingly virtual world and how FinnOne Neo can help lenders build personalized relationships, make informed credit decisions and minimize credit risk.

• Organized a webinar on Benefiting from the Gold Loans Opportunity where our experts shared insights on how gold loan lenders can profit from digitization in gold loans with FinnOne Neo.

• Organized a Virtual Roundtable on Increasing Supply Chain Resilience in a COVID- 19 World with Digital Transaction Banking, the interactive virtual roundtable focused on how banks can leverage technology to reduce disruptions in their corporate customers supply chain.

• Demonstrated expertise on how lending is evolving in an increasingly virtual world and how technology can help banks and other financial services companies build personalized relationships, make informed credit decisions and use AI in collections at the Australian Banking Innovation Summit 2020 (ABIS).

• Hosted webinars for financial services industry leaders in India, the Middle East, Australia and SEA to share insights on the future of lending an increasingly virtualized world and how lenders can React, Adapt and Lead in the evolving situation.

• Hosted a webinar on how corporate banks can leverage technology to not just REACT to the immediate customers concerns around remote banking and liquidity but also ADAPT to a changing world where global supply chains

become more local and LEAD in a post-COVID era by enabling hyper-fast and hyper-personalized banking.

• Organized a virtual roundtable in association with Dun & Bradstreet for leaders from banks and NBFCs in India on Re-tooling Corporate and SME Lending for the Post COVID World.

• Hosted an exclusive webinar where we explore how digitization can help corporate banks in enabling customers to bank in real-time, maintain stable supply chains and become future-ready.

• Organized an exclusive webinar series on the theme "Tech in a virtual world" where our experts discussed the evolution of open source databases and the emerging cyber security threats in todays hyper agile world.

• Presented views at the Forbes India CXO Speak on Disrupting Work in the New Normal virtual conversation.

Though physical events are an important way for us to showcase how we help banks and other financial institutions, these are not the only way we can communicate our capabilities. We share our expertise via blogs, whitepapers and articles in leading publications worldwide. In addition, we also regularly interact with industry analysts and consultants.

23. HUMAN RESOURCE MANAGEMENT

Your Company is determined to accelerate its growth story by corresponding to the changing needs of diverse workgroup by fostering an engaging work environment, to constantly build the unique capabilities and skills of the people. The global employee strength of the Company, at the end of FY 2021, was 1,932.

During the year, we have sustained and monitored the effectiveness of organization-wide initiatives to ensure high- performing and engaged workforce, like:

1. Delivering Business Excellence - Frequent connect sessions with associates largely targeting the high potentials

a. Gathering insights about the workplace, culture & opportunities offered & sharing them with the business for preventive action

b. Acting as strategic business partner by regularly sharing HR metrics in the form of dashboard and meeting for actions on a monthly and quarterly basis

c. Closure of actions of last year Trust Survey

d. Sustenance of BUHR ( Business Unit - HR SPOC) group connect

e. COVID task force - collaborative initiative major contribution form Business in initiating this

2. Employee Assist - Conceptualize & execute suitable interventions to keep associates motivated with a key objective of "Enhancing Employee Experience"

a. Launch of Skillsofts e-learning modules organization wide, as a platform to improve technology skills and soft skills

b. Redesigned Managers meet to help them to overcome

the bottlenecks of people related issues/concerns

c. Focus on leadership development via:

i. Leadership Engagement Action & Development (LEAD) and Young Leaders Program (YLP) programs-

LEAD and YLP PROGRAMS have been one of the most significant learning initiatives across the organization. They contributed immensely towards building the organizational culture, individual effectiveness and leadership competencies. LEAD is a 3- day leadership development program for employees in the role of a second level leader. The program is specifically for managers.

YLP is a leadership development journey for employees in the role of a first-time leader. The transition from an Individual contributor to a team leader is one of the most significant transitions in ones professional journey. To be effective managers one must shift from "doing work" to "getting work done through and with others".

ii. E- Learning initiatives: iLearn and Percipio are the e-learning platforms launched in Nucleus

iLearn courses are in the areas of technology and soft skills. Access has been given to all the employees in the organization. The objective of iLearn is to give learning in the hands of employees, to do any course at their own pace and time. The main objective is to enhance learning culture in the organization. Learning courses were increased from 100 to 10000+ assets.

Percipio Courses are specialized leadership development programs powered by MIT Sloan Management Review. This platform provides various topics ranging from Leading Organizational Vision and Leading a culture of execution to thinking strategically, this module provides content from top minds of the business and leadership community in a variety of formats to support leaders at all levels, including senior leaders.

iii. IIM/MDI residential/on-line programs

iv. External Certification and Programme

v. Kaizan -Nano sessions- Nano sessions are short duration 3 hours sessions around professional development areas

vi. Launch of Aarohan

• This is a new initiative aimed at grooming leaders from within and catching them early. The journey includes self-initiated multidimensional learning, coaching/ mentoring by experts, opportunities to be part of prestigious projects, mentor-guided reading and e-learning, to name a few.

vii. MIT online design thinking and system architecture programs.

viii. CYMORG, a business simulation tool for top leaders to hone their decision-making skills

• nanobytes launched organization wide: gamified short learning capsules focusing on specific competencies for individuals and teams

• initiatives towards values understanding

Your Companys focus lies in creating a performance-based culture, driven by focused growth and clear career development plan for each employee. Going forward, the HR roadmap will also focus on Collaboration & Acceleration to stimulate our strategic growth through employee empowerment to make it a great place to work for.

24. CORPORATE GOVERNANCE

We, at Nucleus, believe that good and effective Corporate Governance is critical to achieve corporate vision and mission of the organization; it is more of an organizational culture than a mere adherence to rules and regulations.

Your Company has established and maintained a strong ethical environment, overseen by a committed and competent Board of Directors. The Companys practices and policies reflect the true spirit of Corporate Governance initiatives.

The required disclosures of Schedule V part II are mentioned in "Corporate Governance Report" forms part of the Annual Report.

Your Company is complying with all mandatory requirements of Corporate Governance as stipulated as per Securities and Exchange Board of India (Listing Obligations and Disclosure) Regulations 2015. The compliance status is provided in the Corporate Governance section of the Annual Report. A certificate issued by the Statutory Auditors of the Company under Regulation 34 of Securities and Exchange Board of India (Listing Obligations and Disclosure) Regulations 2015, confirming compliance of the conditions of Corporate Governance, is provided as Annexure C to this Directors Report. The auditors certificate for fiscal 2021 does not contain any qualifications, reservations or adverse remark.

25. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Mr. S. M. Acharya, Mr. Prithvi Haldea, Prof. Trilochan Sastry, Mrs. Elaine Mathias and Ms. Yasmin Javeri Krishan are Independent Directors as per the Companies Act, 2013, not liable to retire by rotation, to hold office for five consecutive years. They have submitted a declaration that each of them meets the criteria of independence as provided in Section 149(6) of the Act and there has been no change in the circumstances which may affect their status as Independent Director during the year.

Mr. Prithvi Haldea and Prof. Trilochan Sastry were reappointed as Independent Directors w.e.f. July 26, 2019 for a term of 5 years which will expire July 25, 2024.

Mrs. Elaine Mathias was reappointed as an Independent Director w.e.f. September 20, 2019 for a term of 5 years which will expire September 19, 2024.

Mr. S. M. Acharya was appointed as Independent Director of the Company to hold office for five consecutive years for a term up to March 19, 2021, not liable to retire by rotation. The Board of Directors vide resolution passed by circulation on March 17, 2021 at the recommendation of Nomination and Remuneration/ Compensation Committee, approved reappointment of Mr. S. M. Acharya as an Independent Director for another term of five years, subject to approval of shareholders in the forthcoming Annual General meeting.

Mr. Ravi Pratap Singh was reappointed as Whole Time Director w.e.f. July 26, 2019 for a period of 5 years. His present term expires on July 25, 2024.

Mr. Parag Bhise was appointed as Whole time Director w.e.f. July 31, 2020 for a period of 5 years. His present term expires on July 30, 2025.

During the year the Board of Directors, at the recommendation of Nomination and Remuneration/Compensation Committee, approved appointment of following new Board members :

• Ms. Yasmin Javeri Krishan as an Additional Independent Director for a term of five years, subject to approval of shareholders in the forthcoming Annual General meeting (in the Board meeting held on July 30, 2020).

• Dr. Ritika Dusad as an Additional Executive Director of the Company, subject to the approval of the Shareholders in the forthcoming Annual General Meeting (in the Board meeting held on August 7, 2020). Dr. Ritika Dusad has been a Non-Executive Director of the Company since 2016.

• Mr. Anurag Mantri, as an Additional Executive Director for a term of five years, subject to approval of shareholders in the forthcoming Annual General meeting (in the Board meeting held on December 4, 2020)

Mr. Vishnu R Dusad was reappointed as Managing Director w.e.f. January 1, 2017 for a period of 5 years. His present term expires on December 31, 2021. The Board of Directors at their meeting held on June 3, 2021 at the recommendation of Nomination and Remuneration/Compensation Committee, re-appointed Mr. Vishnu R Dusad, as Managing Director for a term of five years, subject to approval of shareholders in the forthcoming Annual General meeting.

During the year, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

Mr. R P Singh stepped down as Chief Executive Officer (CEO) of the Company w.e.f. March 31, 2021 on reaching the age of superannuation. The Board of Directors on recommendation of Nomination and Remuneration/ Compensation Committee,

at their meeting held on December 18, 2020 approved appointment of Mr. Parag Bhise, Whole Time Director as also the Chief Executive Officer (KMP) of the Company w.e.f. April 1, 2021.

The Board members on further considering the request of Mr. R P Singh to be of service to the Company and on recommendation of Nomination and Remuneration/ Compensation Committee, re-designated Mr. R P Singh as Executive Director, on a revised compensation, assigning him new duties, responsibilities and functions w.e.f. April 1, 2021, for his remaining term as a Whole Time Director till July 25, 2024.

During the year, Mr. Ashish Nanda resigned as Chief Financial Officer of the Company w.e.f. June 23, 2020. The Board of Directors at their meeting held on December 11, 2020 have appointed Mr. Anurag Mantri (Additional Executive Director) as the Chief Financial Officer (Key Managerial Personnel) of the Company.

Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Vishnu R. Dusad, Managing Director, Mr. Parag Bhise, CEO, Mr. Anurag Mantri, Chief Financial Officer and Ms. Poonam Bhasin, Company Secretary are the Key Managerial Personnel of the Company as on date of the report.

In accordance with the provisions of Companies Act 2013 and the Article of Association of the Company, Mr. R P Singh, Executive Director and Mr. Parag Bhise Executive Director, whose office is liable to retire, shall retire at the ensuing AGM and being eligible, these Directors seek reappointment. Based on performance evaluation and the recommendation of the Nomination and Remuneration/ Compensation committee, the Board has recommended their reappointment.

26. BOARD EVALUATION

The Board of Directors carried out an annual evaluation of its own performance and performance of the Chairman, Board committees and individual Directors pursuant to the provisions of the Companies Act 2013 and the Corporate Governance requirements under Regulation 25 (4) of Securities and Exchange Board of India (Listing Obligations and Disclosure) Regulations 2015.

The Board, along with the Nomination and Remuneration/ Compensation Committee, developed and adopted the criteria and framework for the evaluation of each of the Directors and of the Board and its Committees.

The evaluation was then conducted as per the approved process (explained in detail in the Report on Corporate Governance of the Annual report.)

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. The Chairman of the Committee also had interactions with each of the Directors and sought their feed-back and suggestions on the overall Board Effectiveness and Directors performance.

In addition, pursuant to the provisions of Schedule IV to the Companies Act, 2013 the Independent Directors reviewed the performance of the Non-Independent Directors and of the Board as a whole, performance of the Chairman of the Board taking into account the views of all the Directors, and the quality, quantity and timeliness of flow of information between the Company management and the Board and its sufficiency for the Board to effectively perform its duties.

The Chairman placed the Evaluation Summary before the committee members. The same was discussed in detail, and the members recorded their satisfaction.

27. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The primary responsibility of the Nomination and Remuneration/ Compensation Committee (NRC) is to identify and nominate suitable candidates for Board membership. The Committee also formulate policies relating to the remuneration of Directors, Key Managerial Personnel and other senior employees of the Company.

The Committee, while evaluating potential candidates for Board membership, considers a variety of personal attributes, including experience, intellect, foresight, judgment and transparency and match these with the requirements set out by the Board. The basic responsibilities of NRC with regard to Directors appointment are as follows:

• Recommending desirable changes in Board size, composition, Committee structure and processes and other aspects of the Boards functioning;

• Formulating criteria for determining qualifications, positive attributes and Independence of a Director.

• Conducting search and recommending new Board members in light of resignation of current members or a planned expansion of the Board.

• Identifying persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal.

The policy of the Company for "Policy for Constitution of Board" is provided as Annexure D and "Policy of Remuneration for Directors, Key Managerial Personnel and other Employees" is provided as Annexure E to this Directors Report. These Policies are also available on the Company website link: http://www.nucleussoftware.com/investors.

28. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 25 of Securities and Exchange Board of India (Listing Obligations and Disclosure) Regulations 2015.

29. familiarisation programme for independent directors

The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters can be accessed on the Company website link: http://www.nucleussoftware.com/investors.

30. MEETINGS OF THE BOARD OF DIRECTORS

The Board met 11 times during the year. The details are provided in the Report on Corporate Governance, a part of the Annual Report.

31. COMMITTEES OF THE BOARD

There are five Committees of the Board as on March 31, 2021, as follows:

• Audit Committee

• Nomination and Remuneration/Compensation Committee

• Stakeholder Relationship Committee

• Corporate Social Responsibility Committee

• Culture Committee

Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, a part of the Annual Report.

The Composition of Board Committees as on March 31, 2021 is as follows:

Audit Committee Nomination & Remuneration / Compensation Committee Stakeholder Relationship Committee Corporate Social Responsibility Committee Culture Committe
Mr. S. M. Acharya YES YES YES YES
Mr. Vishnu R Dusad YES YES
Mr. Prithvi Haldea YES YES
Mrs. Elaine Mathias YES YES
Prof. Trilochan Sastry YES YES YES
Mrs. Yasmin Javeri Krishan YES YES
Mr. R P Singh YES YES
Dr. Ritika Dusad YES
Mr. Parag Bhise YES YES

32. VIGIL MECHANISM

The Company has a well-established whistle blower policy as part of vigil mechanism for observing the conduct of Directors and employees and report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of conduct or ethics policy. This mechanism also provides for adequate safeguards against victimization of Director(s)/ employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases.

33. SiGNiFiCANT AND MATERIAL ORDERS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

34. REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditors nor the Secretarial Auditors has reported to the Audit Committee, under Sec 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

35. RISK MANAGEMENT POLICY

The Company has developed and implemented a Risk Management Policy that includes identification of elements of risk, which in the opinion of the Board may threaten the existence of the Company. Risk Management Report forms a part of the Annual Report.

36. ADDITIONAL INFORMATION TO SHAREHOLDERS

Detailed information to the shareholders is provided in the Shareholders Referencer, a part of the Annual Report.

37. AUDITORS

Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act 2013 and the rules framed thereafter, M/s BSR & Associates LLP, Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the Annual General Meeting (AGM) of the Company held on July 8, 2016 until the conclusion of Annual General Meeting of the Company to be held in Calendar year 2021.

The Board of Directors at their meeting held on June 3, 2021 at the recommendation of Audit Committee members approved re-appointment of M/s BSR & Associates, LLP, Chartered Accountants as statutory auditors of the Company for a term of one year i.e. from the conclusion of forthcoming Annual General meeting until the conclusion of Annual General Meeting of the Company to be held in Calendar year 2022.

Secretarial Auditor

As per the Companies Act 2013, Secretarial Audit by a practicing Company Secretary has become mandatory for prescribed companies, and they are required to annex the Secretarial Audit report with their Board Report in the Annual Report.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board appointed, M/S Sanjay Grover and Associates, Practising Company Secretaries to undertake the Secretarial Audit of the Company. Secretarial Audit Report in the prescribed Form MR 3 is provided as Annexure F to this Directors Report. The Secretarial Auditors Report does not contain any qualification, reservation or adverse remark.

The Company voluntarily adheres to the various Secretarial Standards issued by the Institute of Company Secretaries of India.

38. INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls with reference to the financial statements.

M/s BSR & Associates, LLP, the statutory auditors of the Company, has audited the financial statements included in the annual report and has issued an attestation report on our internal control over financial reporting (as defined in Section 143 of Companies Act 2013).

39. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Inclusive growth and sustainable development are strong pillars of your Companys responsible corporate citizenship and are a part of the core values and driving force for many of its initiatives. Your Company believes that responsible investments in this regard will generate long term value for all the stakeholders.

In accordance with requirements of The Companies Act 2013, the Company has a Corporate Social Responsibility Committee comprising of a majority of Independent Directors and chaired by an Independent Director, Mrs. Yasmin Javeri Krishan. Prof. Trilochan Sastry, Mr. S. M. Acharya, Mr. Parag Bhise and Dr. Ritika Dusad are the other members.

The CSR Policy may be accessed on the Company website link: http:// www.nucleussoftware.com/investors.

Your Company has set up Nucleus Software Foundation (NSF), a Trust for the purposes of undertaking CSR activities of the Company. This Foundation, established in 2014 as a Section 25 Company, works towards its stated mission: "Empowering underprivileged with essence of education and thereby better livelihood and better life".

This year your Companys CSR arm took a multi-pronged approach to help society deal with the repercussions of pandemic hitting the world. In the first half of the year, as India entered into a strict and lengthy lockdown, millions of livelihoods were affected. The NSF team, in collaboration with our NGO partners facilitated ration distribution in Dehradun and provided very critical medical equipment to a local COVID hospital in Noida. They also made contributions to various charities associated with COVID-19 related assistance.

With the lockdown, education of school-going students was severely affected. The NSF team came up with various innovative ways to continue facilitating the education programs that had been ongoing in the previous years. Teachers associated with our partner NGOs were upskilled in digital modes of education. These teachers enabled activity-based learning by sharing videos on the subject of mathematics and 439 students benefitted from this program every week in the first half of the fiscal year. To check progress of the students in English programs, teachers used online quizzes and 571 students benefitted from these programs every week. Smartphones were also provided to the Dehradun and Noida scholars, who got admission to colleges, in order to encourage them and help them to attend college virtually.

With livelihoods being hit, NSF also believed it imperative to continue facilitating vocational training in tailoring to women in Kayalarmedu, Arambakkam villages in Tamil Nadu with more vigor than earlier. A total of 60 women learned the required skills in tailoring and gain the self-confidence to provide additional income, or in some cases become the sole breadwinners of their households.

As the pandemic proceeded to disrupt daily lives of many including students, school leaders associated with NSF and partner organization exhibited great dedication to their students. These leaders started teaching students in outdoor locations near the homes of the students, with social distancing. To keep up the morale of the students and keep them engaged during the tough times, NSF organized painting competitions and dance competitions. Smart phones were provided to NSF School leaders to facilitate online education in Noida. NSF continued to support students in need, from different parts of the country and a total of 46 students benefitted from these scholarships.

The brief outline of the corporate social responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure G of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014.

40. EMPLOYEE STOCK OPTION PLAN (ESOP)

Currently, there is only one ESOP scheme prevalent in the Company; ESOP scheme - 2015 (instituted in 2015). As per ESOP scheme 2015, equity shares would be transferred to eligible employees on exercise of options through Nucleus Software Employee Welfare Trust, which is established to carry out activities for the benefit and welfare of its Employees by launching various Schemes in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Details of ESOP as per the provisions of Companies Act, 2013 and Rules made there under are as follows:

Particulars 2015 Plan
a) Total number of options under the Plan 500,000
(b) Pricing formula 100% of the Fair Market Price as on date of grant
(c) Options granted during the year -
(d) Options vested as of March 31, 2021 -
(e) (i) Options exercised during the year -
(ii) Total number of shares arising as a result of exercise of above options during the year
(f) Options forfeited during the year -
(g) Option lapsed during the year -
(h) Variation of terms of options during the year -
(i) Amount realized by exercise of options during the year -
(j) Total number of options in force as on March 31, 2021 -

During the year, no stock options were granted to any employee under the above-mentioned ESOP plan and therefore no calculations are required to be made or reported regarding difference between intrinsic value and fair market value of ESOPs granted.

41. PARTICULARS OF EMPLOYEES

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 in Annexure H 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

42. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to as per Section 134 (5) of the Companies Act, 2013, the Directors confirm that:

(a) in the preparation of the annual accounts for the financial year ended March 31, 2021, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had 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 and loss of the Company for that period;

(c) the Directors had 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) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors, and the reviews performed by the management, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2020-21.

43. EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company is available on http://www.nucleussoftware.com/investors.

44. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is provided as Annexure I to this Directors Report.

45. COST RECORDS AND COST AUDIT

Maintenance of cost records and requirements of cost audit as prescribed under the provisions of section 148 (1) of the Companies Act 2013 are not applicable for the business activities carried out by the Company.

46. DISCLOSURE REQUIREMENTS

As per SEBI Listing Regulations, the Corporate Governance Report with the Auditors Certificate thereon and the integrated Management Discussion and Analysis are attached, which forms part of this report.

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

47. INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Nucleus values the dignity of individuals and strives to provide a safe and respectable work environment to all its employees. The Company has put in place a Policy against Sexual Harassment, compliant with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("Sexual Harassment Act"). The Internal Committee at all the locations of the Company across India has been constituted, to consider and resolve all sexual harassment complaints as reported under the policy. The Committee also includes external member from NGOs with relevant experience. We affirm that adequate access was provided to any complainant who wished to register a complaint under the policy. There were no complaints received, disposed and/or pending during the financial year.

48. BUSINESS RESPONSIBILITY REPORT

The Listing Regulations mandate the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for the top 1,000 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosures into our Annual Report.

49. ACKNOWLEDGEMENTS

Your Directors would like to place on record their gratitude for the co-operation received from the Government of India, State Governments of Delhi, Uttar Pradesh and Rajasthan, Customs and Excise Departments, Department of Scientific and Industrial Research (Ministry of Science and Technology), Software Technology Park-Noida, Software Technology Park- Chennai, Software Technology Park-Pune, Special Economic Zone authorities and other government agencies.

Your Directors would also like to thank the Companys customers, bankers, vendors, partners and shareholders for their continued support to the Company. In specific, the Board would like to put on record its sincere appreciation of the commitment and contribution made by all employees of the Company.

For and on behalf of the Board of Directors
Sd/
Date: June 3, 2021 S.M. Acharya
Place: Bangalore Chairman