xchanging solutions ltd share price Directors report

Dear Shareholders,

The Board of Directors ("Board") is pleased to present the Twenty Second Annual Report and the Audited Financial Statements of the Xchanging Solutions Limited ("the Company") for the financial year ended March 31, 2023.

A. FINANCIAL RESULTS

The highlights of standalone and consolidated financial results of the Company for the financial year ended March 31, 2023 and March 31, 2022 are as under:

PARTICULARS	STANDALONE		CONSOLIDATED
	For the Financial year ended March 31, 2023	For the Financial year ended March 31, 2022	For the Financial year ended March 31, 2023	For the Financial year ended March 31, 2022
Total Income	4,750	5,218	18,512	18,284
Total Expenditure	2,871	2,937	12,552	12,197
Profit before Finance Costs,	1,949	2,386	6,031	6,194
Depreciation and Tax
Depreciation & Amortization	60	89	61	91
Finance Costs	10	16	10	16
Profit / (Loss) before Tax	1,879	2,281	5,960	6,087
Income Tax	410	62	1,470	830
(including deferred tax)
Net Profit / (Loss) after Tax	1,469	2,219	4,490	5,257
Other Comprehensive	-20	-20	1,787	519
Income/(Expenditure)
Total Comprehensive	1,449	2,199	6,277	5,776
Income/(Expenditure)
Earnings / (Loss) per share	1.32	1.99	4.03	4.72

B. REVIEW OF OPERATIONS

During the financial year ended March 31, 2023, the consolidated income of the Company was Rs 18, 512 Lakhs as against Rs 18,284 Lakhs during the previous year ended March 31, 2022. At a standalone level, the total income of the Company for the financial year ended March 31, 2023 amounted to Rs 4,750 Lakhs compared to Rs 5,218 Lakhs during the previous year ended March 31, 2022.

C. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the financial year ended March 31, 2023 as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is presented in a separate section and forms an integral part of this Report.

D. DIVIDEND

The Board does not recommend a dividend for FY 2022-23. Refer the Companys policy on Dividend Distribution available on the website of the Company at https://dxc.com/in/en/ about-us/xchanging-solutions-limited-investor-relations

E. TRANSFER TO RESERVES

During the financial year under review, the Company has not transferred any amount to the General Reserve.

F. SUBSIDIARIES AND ASSOCIATES

Your Company has 2 (two) direct subsidiaries and 1 (one) step down subsidiary as on March 31, 2023. There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("the Act"). There has been no material change in the nature of the business of the subsidiaries.

Liquidation status of Subsidiary Companies

Nexplicit Infotech India Private Limited, a subsidiary (Wholly owned subsidiary of Xchanging Solutions (USA) Inc.) is under liquidation.

Except as mentioned above, during the financial year ended March 31, 2023 under review, there have been no material changes in the business of the subsidiaries. In terms of Section 129(3) of the Act, the Company has prepared a statement containing the salient features of the Financial Statement of subsidiaries in the prescribed Form AOC-1 which is attached to the Financial Statements of the Company.

The Financial Statements of Subsidiary Companies are being uploaded on website of the Company https://www.dxc.com/ in/en/about-us/xchanging-solutions-limited-investor-relations for inspection by the shareholders. Any member desirous of obtaining a copy of the said financial statements may write to the Company. The financial statements including the consolidated financial statements and all other documents required to be attached with this report have been uploaded on to the website of your Company viz. https://dxc.com/in/ en/about-us/xchanging-solutions-limited-investor-relations In terms of the Companys Policy on determining "material subsidiary", during the financial year ended March 31, 2023, Xchanging Solutions (USA) Inc and Xchanging Solutions Singapore Pte. Limited were determined as a material subsidiary(ies) whose income exceeds 10% of the consolidated income of the Company in the immediately preceding financial year.

G. RELATED PARTY TRANSACTIONS

All Related Party Transactions are placed before the Audit Committee for approval as per the Related Party Transactions Policy of the Company and approved by the Board. The policy is also uploaded on the website of the Company and can be accessed through the link https:// dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations. All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. The disclosure of transactions with the related parties are provided in the notes to the Standalone Financial Statements, forming part of the Annual Report.

As required under the Act, particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, is provided as Annexure - I to this Boards Report.

H. AUDITORS

(i) Statutory Auditors and Auditors Report

The Shareholders of the Company in the 20th Annual General Meeting ("AGM") of the Company had reappointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, (Firm Registration No. 117366W/W-100018), ("Deloitte") as the Statutory Auditors of the Company to hold office from the conclusion of the 20th AGM till the conclusion of the 25th AGM of the Company. The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31, 2023 pursuant to the provisions of the Act. The reports of Statutory Auditors forms part of the Annual Report. The reports are self-explanatory and does not contain any qualifications, reservations or adverse remarks.

(ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Ankush Agarwal, Partner, MAKS & Co., Company Secretaries [FRN P2018UP067700], to undertake the Secretarial Audit of the Company. Accordingly, in terms of provisions of Section 204(1) of the Act, a Secretarial Audit Report for the financial year ended March 31, 2023 given by the Secretarial Auditor of the Company in prescribed Form MR-3 is provided as Annexure -II.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

(iii) Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors and the 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 Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

I. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Details of loans, Guarantees and Investments covered under Section 186 of the Act and Schedule V of the Listing Regulations are provided in the notes to financial statements.

J. PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from public within the meaning of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules 2014 during the period under review.

K. EMPLOYEES

(i) Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: a) Mr. Nachiket Vibhakar Sukhtankar, Managing Director and Chief Executive Officer b) Mr. Shrenik Kumar Champalal, Whole Time Director and Chief Financial Officer c) Mr. Mayank Jain, Company Secretary cum Compliance Officer

(ii) Employees Stock Option Scheme

During the period under review, no Employees Stock Option scheme exists in the Company.

(iii) Particulars of Employees and Related Disclosures

In accordance with the provisions of Section 197(12) of the Act read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above Rules, are appended to this Report as Annexure III.

None of the directors except Mr. Henry DSouza, received any remuneration or commission from Subsidiary Companies of your Company.

The details of remuneration paid to the Directors including the Managing Director & Chief Executive Officer of the Company are given in Corporate Governance Report.

The information required under Section 197(12) of the Companies Act, 2013 ("the Act") read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. However, pursuant to first proviso to Section 136(1) of the Act, this Report is being sent to the Shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information, may write to the Company Secretary at the Registered Office of the Company and the said information is open for inspection at the Registered Office of the Company The Board of Directors affirm that the remuneration paid to key managerial personnel of the Company is as per the Nomination & Remuneration Policy of the Company.

L. BOARD AND COMMITTEES

(i) Directors

As on March 31, 2023, the Board of Directors comprises of six directors out of which 2 are Executive Directors, 3 are Independent Directors and 1 is Non-Executive - Non-Independent Director.

Based on the recommendation of the Nomination and Remuneration Committee and approved by the Shareholders on the Annual General Meeting held on August 3, 2022, Mr. Pankaj Vaish was appointed as the Non-Executive Independent Director Further, based on the recommendation of the Nomination and Remuneration Committee, Mrs. Rama NS was proposed to be re-appointed as Non-Executive Independent Director subject to the approval of the Shareholders. The Board of Directors recommend the re-appointment of Mrs. Rama NS as the Non-Executive Independent Director for a period of five years w.e.f. April 1, 2024 to March 31, 2029, to the shareholders for their approval in the ensuing Annual General Meeting. Further, based on the recommendation of the Nomination and Remuneration Committee, Mr. Shrenik Kumar Champalal was proposed to be re-appointed as Whole Time Director subject to the approval of the Shareholders. The Board of Directors recommend the re-appointment of Mr. Shrenik Kumar Champalal as the Whole Time Director for a period of three years w.e.f. March 31, 2024 to March 30, 2027, to the shareholders for their approval in the ensuing Annual General Meeting. The Company has received requisite notice in writing from member of the Company proposing their candidature as Directors of the Company.

Pursuant to the provision of Section 152(6) of the Act and the Articles of Association of the Company, Mr. Nachiket Vibhakar Sukhtankar, Managing Director, being longest in the office, retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for the re-appointment. The Board of Directors recommend his re -appointment.

Mr. Venkatesh Shastry, Independent Director, has resigned from post of directorship w.e.f. May 5, 2022 due to his personal reasons and other professional commitment. He also confirmed that there is no material reason of his resignation other than stated above. Brief resume and other details relating to the directors, who are to be appointed/ re-appointed as stipulated under Regulation 36(3) of the Listing Regulations and Secretarial Standards issued by ICSI, are furnished in the Notice of Annual General Meeting forming part of the Annual Report.

Further, pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and Companys Code of Conduct.

Further, in terms of Regulations 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

All Directors have affirmed that they are not debarred from holding the office of a Director by virtue of any SEBI order or any other such Authority and are not disqualified u/s 164(2) of the Companies Act, 2013. Further, Independent Directors have successfully registered themselves in the Independent Directors data bank maintained by Indian Institute of Corporate Affairs.

The Company has taken the certificate from Mr. Ankush Agarwal, Partner, MAKS & Co., Company Secretaries [FRN P2018UP067700], that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority. The Certificate is annexed to this Report as Annexure - IV. Further, in the opinion of the Board, the Independent Directors fulfill the conditions specified in Listing Regulations and they are independent of the management.

(ii) Board Evaluation

Pursuant to the provisions of Section 134(3)(p) of the Act and Regulation 4 of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, and the evaluation of the working of its Committees and directors. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(iii) Remuneration Policy

The remuneration paid to the Directors is in line with the Nomination and Remuneration Policy formulated in accordance with Section 178 of the Act and Regulation 19 of the Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The relevant Policy(ies) have been uploaded on the website of the Company and can be accessed through the link https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.

(iv) Board/Committee Composition and Meetings

A calendar of meetings is prepared and circulated in advance to the Directors. The details of composition of Board and Committee and their meetings held during the year are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

(v) Familiarization Programme and Separate Meeting of Independent Directors

During the financial year ended March 31, 2023, a separate meeting of the Independent Directors of the Company was held on May 23, 2022 without the attendance of Non-Independent Directors and the Management team.

During their meeting held on May 23, 2022, the Independent Directors discussed the matters specified in Schedule IV of the Act and Regulation 25 of the Listing Regulations.

The Nomination and Remuneration Committee of the Company at its meeting held on February 27, 2015 had approved a familiarization programme for Independent Directors of the Company. The Familiarization programme for Independent Directors is available at https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.

(vi) Audit Committee

This Committee comprises the following Directors viz. Mrs. Rama NS (Chairperson of the Committee), Mr. Henry DSouza, Mr. Pankaj Vaish, and Mr. Shrenik Kumar Champalal. The Company Secretary acts as the Secretary to the Committee. Details of the Audit Committee have been provided in Corporate Governance Report.

All the recommendations of the Audit Committee were accepted by the Board.

(vii)Directors Responsibility Statement

In terms of Section 134(5) of the Act, the Directors would like to state and confirm: (a) That in preparation of the annual financial statements for the year ended March 31, 2023, applicable accounting standards had been followed along with proper explanation relating to material departures if any; (b) That such accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as of March 31, 2023, and of the profit of the Company for the year ended on that date; (c) That proper and sufficient care has been taken in 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) That the annual accounts have been prepared on a going concern basis; (e) Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by Group Management Team including audit of internal financial control over financial reporting, the Board is of the opinion that proper internal financial controls are in place and such internal financial controls are adequate and are operating effectively; and (f) That proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively

M. GOVERNANCE

(i) Corporate Governance

The Company is committed to uphold the highest standards of Corporate Governance and to adhere to the requirements set out by the Securities and Exchange Board of India. A detailed report on Corporate

Governance along with the Certificate of Mr. Ankush Agarwal, Partner, MAKS & Co., Company Secretaries [FRN P2018UP067700], confirming compliance with conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms an integral part of this Report.

(ii) Vigil Mechanism / Whistle Blower Policy

The Company has established a whistle blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same are explained in the Corporate Governance Report. The Board of Directors based on the recommendation of the Audit Committee has amended the Whistle Blower Policy to inter alia, enable employees to report incidents of leak or suspected leak of unpublished price sensitive information in line with the changes made in the SEBI (Prohibition of Insider Trading) Regulations, 2015. As per the Whistle Blower Policy implemented by the Company, the employees, directors, customers, dealers, vendors, suppliers, or any Stakeholders associated with the Company are free to report illegal or unethical behaviour, actual or suspected fraud or violation of the Companys Codes of Conduct or Corporate Governance Policies or any improper activity to the Chairman of the Audit Committee of the Company. During the year under review, no complaint pertaining to the Company was received under the Whistle Blower Policy. The Vigil Mechanism/Whistle Blower Policy is available at https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.

(iii) Risk Management

The Company has a Risk Management process which provides an integrated approach for managing the risks in various aspects of the business. The detailed framework is provided in the Management Discussion and Analysis Report.

(iv) Internal Financial Controls and their adequacy

Your Company has in place adequate internal financial controls with reference to the financial statements. The internal financial control system of the Company is supplemented with internal audits, regular reviews by the management and checks by external auditors. The Audit Committee ensures adequacy of the system. The Statutory Auditors of the Company also provide their opinion on the internal financial control framework of the Company.

During the year under review, no material or serious observation has been highlighted for inefficiency or inadequacy of such controls.

(v) Disclosure under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013. The Company has complied with provisions relating to the constitution of Internal Committee ("IC"), (formerly known as Internal Complaints Committee) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The IC has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed-off during the financial year ended March 31, 2023: a) No. of complaints filed during the financial year: Nil b) No. of complaints disposed off during the financial year: Nil c) Number of complaints pending as on end of the financial year: Nil

N. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been amended substantially with effect from January 22, 2021.

In line with the said amendments, the CSR Policy is available on the Companys website at https://dxc.com/in/en/about-us/xchanging-solutions-limited-investor-relations.

In terms of the provisions of the Act read with the amended Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities in the format prescribed under Annexure II of the said Rules is annexed to this Report and marked as Annexure -V.

O. CONSERVATION OF ENERGY, RESEARCH AND

DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information as per Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo is annexed herewith as Annexure -VI.

P. BUSINESS RESPONSIBILITY AND SUSTANABILITY

REPORTING

Pursuant to Regulation 34(2) of the Listing Regulations read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/CIR/2021/ 562 dated May 10, 2021, the Business Responsibility and Sustainability Reporting (BRSR) describing the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report. The BRSR forms part of the Annual Report and can also be accessed on the Companys website at https://dxc.com/in/ en/about-us/xchanging-solutions-limited-investor-relations.

Q. OTHER DISCLOSURES

(i) Share Capital

There was no change in the paid-up share capital of the Company. As on March 31, 2023, the paid -up capital of the Company was Rs. 1,114,037,160/-. This comprises 111,403,716 equity shares of Rs. 10/- each fully paid-up.

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year.

(ii) Statutory Disclosures

None of the Directors of your Company are disqualified as per provision of Section 164(2) of the Act. The Directors of the Company have made necessary disclosures as required under various provisions of the Act and the Listing Regulations.

(iii) Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return as on March 31, 2023 is available on the Companys website at https://dxc.com/ in/en/about-us/xchanging-solutions-limited-investor-relations.

(v) Compliance of Secretarial Standards

During the financial year under review, the Company has complied with applicable Secretarial Standards on Board and General Meetings specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Act.

(vi) Appointment of Independent Director in unlisted material Subsidiary

Pursuant to Regulation 24 of the Listing Regulations, Mr. Henry DSouza, Independent Director of the Company has been appointed as Independent Director on the Board of Companys unlisted material subsidiaries i.e. Xchanging Solutions (USA) Inc and Xchanging Solutions Singapore Pte Limited w.e.f. April 1, 2019.

(vii)Responsibility For Standalone:

The Companys Board of Directors is responsible for the information included in the Boards Report including Annexures to Boards Report, Management Discussion and Analysis and Corporate Governance Report including annexures thereon

For Consolidated:

The Parent Companys (Xchanging Solutions Limited) Board of Directors is responsible for the information included in the Boards Report including Annexures to the Boards Report, Management Discussion and Analysis and Corporate Governance Report including annexures thereon viii) Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

(ix) Significant and material orders

During the Financial Year 2022-23, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Companys operations in future. Further, no penalties have been levied by the SEBI or any other regulator during the year under review.

(x) Listing

Equity Shares of your Company are listed on National Stock Exchange of India Ltd. and BSE Ltd. The Company has paid required listing fees to Stock Exchanges for FY 2023-24.

(xi) Maintenance of Cost Records

The maintenance of cost records, for the services rendered by the Company, is not required pursuant to Section 148 (1) of the Act read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014.

(xii)Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certificate

In terms of the Listing Regulations, the certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from Mr. Nachiket Vibhakar Sukhtankar, Managing Director & Chief Executive Officer and Mr. Shrenik Kumar Champalal, Whole Time Director & Chief Financial Officer, for the Financial Year 2022 - 2023 with regard to the Financial Statements and other matters. The said Certificate is attached herewith as Annexure - B and forms part of Corporate Governance Report. xiii) Any proceedings under the Insolvency and Bankruptcy Code, 2016

There are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 which materially impact the business of the Company. xiv) There were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

ACKNOWLEDGEMENTS AND APPRECIATION:

The Directors would like to express their sincere appreciation for the co-operation and assistance received from the Companys Bankers, Regulatory Bodies and Stakeholders including other business associates who have extended their valuable sustained support and encouragement during the year under review. The Directors also wish to place on record their deep sense of gratitude and appreciation for the commitment displayed by executives, officers and staff at all levels of the Company, resulting in the successful performance of the Company during the year under review. We look forward to your continued support in the future.

For and on behalf of the Board of Directors,
Nachiket Vibhakar Sukhtankar	Shrenik Kumar Champalal
Managing Director &	Whole Time Director &
Chief Executive Officer	Chief Financial Officer
Place: Mumbai	Place: Bangalore
Date: May 25, 2023	Date: May 25, 2023