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CMS Info Systems Ltd.

BSE: 543441 Sector: IT
NSE: CMSINFO ISIN Code: INE925R01014
BSE 11:41 | 07 Dec 328.90 -5.45
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NSE 11:29 | 07 Dec 329.55 -5.20
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OPEN 333.70
PREVIOUS CLOSE 334.35
VOLUME 4904
52-Week high 355.55
52-Week low 212.55
P/E 19.99
Mkt Cap.(Rs cr) 5,067
Buy Price 328.60
Buy Qty 1.00
Sell Price 329.05
Sell Qty 14.00
OPEN 333.70
CLOSE 334.35
VOLUME 4904
52-Week high 355.55
52-Week low 212.55
P/E 19.99
Mkt Cap.(Rs cr) 5,067
Buy Price 328.60
Buy Qty 1.00
Sell Price 329.05
Sell Qty 14.00

CMS Info Systems Ltd. (CMSINFO) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting the Fifteenth Annual Reporttogether with the Audited Standalone and Consolidated Financial Statements for thefinancial year ended March 31 2022.

FINANCIAL HIGHLIGHTS

Summary of the operations of the Company on standalone and consolidatedbasis for the financial year ended March 31 2022 is as follows:

(Rs in Million)

Particulars

Standalone

Consolidated

2022 2021 2022 2021
Revenue from Operations 14076.69 11309.01 15896.71 13060.90
Total Expenditure 11362.40 9345.98 12961.36 10841.71
Net Profit Before tax 2849.20 2106.01 3014.45 2377.50
Profit for the year 2134.68 1516.77 2240.38 1685.23
Equity Share Capital 1531.53 1480.00 1531.53 1480.00
Other Equity 10587.57 8031.95 11029.77 8364.76
Net Block 6372.33 4401.78 7503.56 5330.96
Net Current Assets 4044.27 3459.09 5227.44 4666.30
Cash and Cash Equivalents (including bank balances) 956.04 1426.00 1417.77 1945.49
Earnings per Share
(Basic) (in Rs) 14.35 10.25 15.07 11.39
(Diluted) (in Rs) 13.66 9.98 14.33 11.09

During the year under review your Company has reported a Profit beforeTax of Rs 2849.20 Million on standalone basis as compared to Rs 2106.01 Millionin the previous year. Net profit grew to Rs 2134.68 Million in 2021-22 from Rs1516.77 Million in 2020-21. The revenue from operations is Rs 14076.69 Million ascompared to Rs 11309.01 Million in the previous year.

Further your CompanyRss consolidated revenue from operations is Rs15896.71 Million representing an increase of 22 % over the previous year. During theyear under review your Company has reported a consolidated Profit before Tax of Rs3014.45 Million as compared to Rs 2377.50 Million in the previous year. Netprofit for the year of Rs 2240.38 Million is 33 % increase over the previous year.

HIGHLIGHTS OF HISTORICAL PERFORMANCE PRIOR TO LISTING

During the previous financial year (FY21) while the Indian economyshrank 8% your CompanyRss revenues dropped marginally by around 6% and the Company wasstill able to expand its EBITDA margins by over 400 bps. In comparison even though thecurrent financial year was also impacted by the severe second wave of COVID-19 and thethreat of third Wave your CompanyRss revenue from operations was Rs 15896.71Million which is an increase of 22% over the previous year.

FINANCIAL PERFORMANCE FOR THE YEAR ENDED MARCH 31 2022 Summary ofConsolidated Financial Performance

(Rs in Million)

FY22 FY21 Inc/(Dec) Inc/(Dec)
Revenue from Operations 15896.71 13060.90 22% 2835.81
Other operating income 19.56 87.57 -78% -68.01
Purchase cost 1537.96 1796.49 -14% -258.53
Employee benefits expenses 2315.45 2015.84 15% 299.61
Service and security charges 3207.18 2651.89 21% 555.29
Vehicle maintenance hire & fuel cost 1508.78 1116.84 35% 391.93
Other expenses 3329.66 2543.78 31% 785.88
EBITDA 4017.24 3023.63 33% 993.61
Other income (MF gain) 24.70 11.56 114% 13.14
Finance income 34.85 59.19 -41% -24.34
Finance cost 143.90 82.32 75% 61.58
Depreciation 918.43 634.55 45% 283.88
PBT 3014.45 2377.50 27% 636.95
Tax 774.07 692.27 12% 81.80
PAT 2240.38 1685.23 33% 555.15
Other comprehensive income 3.77 -1.39 -372% 5.16
PAT after OCI 2244.15 1683.84 33% 560.31

The revenue from operations grew at 22% year-on-year basis. YourCompany reported an EBITDA of Rs 4017.24 Million an increase of 33% as comparedto the previous financial year. During the year your Company also reported profit aftertax after (OCI) of Rs 2244.15 Million as compared to Rs 1683.84 Million inthe previous year representing an increase of 33%.

The good performance was on account of strong revenue growth andsignificant improvement in margin across both the Cash Management and Managed Servicesegments.

(Rs in Million)

FY22 % of Revenue FY21 % of Revenue
Revenue
Cash Management 10587.72 66.6% 8961.25 68.60%
Managed Service 4896.29 30.8% 3641.01 27.88%
Cards 412.70 2.6% 458.64 3.52%
Total Revenue 15896.71 100.0% 13060.90 100.0%

The Cash Management business revenue grew at 18% over the previousfinancial year registering Rs 10588 Million which is driven by growth in points onaccount of strong market consolidation trends supported by the banks increased preferenceto high quality cash management companies. Your Company registered a very strong volumeand market share growth across all sub business segments and continued to drive automationamong various operational processes using technology which has helped to maintain and growthe margins despite very strong inflationary pressures in terms of rising fuel andcommodity prices due to unexpected Russia-Ukraine conflict and its broader geo politicalimplications.

The Managed Services business has continued on its strong growthtrajectory as its revenues of Rs 4896 Million grew by 34% in this year as comparedto the previous financial year. The growth in this segment for this year is on account ofexecution of order book which your Company had won over the last 12-18 months.

BUSINESS OVERVIEW / COMPANYRsS PERFORMANCE:

Your Company is one of IndiaRss leading business services companies andIndiaRss largest cash management company based on number of ATM points and number ofretail pick-up points as of March 31 2022 and offers its customers a wide range oftailored cash management and managed services solutions including ATM network managementretail management and managed services. The Company manages the entire flow and managementof money for the 150000 business points that it serves every day - from when the RBIinitially deposits cash in the bankRss currency chests to when cash is deposited back inbanks after going through the various stages of the cash cycle.

CASH MANAGEMENT BUSINESS

Your Company continues to maintain its market leadership acrosssegments of the cash management industry. In ATM cash management segment your CompanyRssmarket share based on number of ATMs outsourced for cash management increased from 42% asof March 2021 to 47% by March 2022. We also maintained our market leadership in the RetailCash Management and the Dedicated Cash-in-transit vans segments with a market share of36% and 28% respectively.

Our total business points for cash management have grown from 103000in March 2021 to 113000 by March 2022 an annual growth of 10%.

With the continuous push for compliance implementation the Company hasbeen able to achieve ~35% RBI & MHA compliance for its business points. Complianceimplementation coupled with easing of lockdowns and opening up of the economy has alsodriven improvement in realisations.

We have continued to focus on enhancing route productivity and achievedgains in productivity and fuel efficiency that demonstrate the sustained improvement inprofitability in the segment.

MANAGED SERVICES BUSINESS

Managed Services business has seen a strong growth across segmentsdriven by the partial execution of the Rs 20 Billion order book won over the last 18months and new wins across Brown Label ATMs Remote Monitoring Banking automationproducts and kiosks.

Despite COVID-19 linked supply chain restrictions your Company hassuccessfully completed the execution of State Bank of India and another public sector bankBrown label ATM deployment. We are pleased to share that ATMs managed by your Company aredelivering robust uptime and healthy transactions trend.

As of March 2022 your Company managed over 12000 ATMs under BrownLabel and Managed Services models up from around 10000 a year ago and around 6000 inMarch 2020.

CMS entered the Remote Monitoring space in FY 2021-

22 through an acquisition which was followed up with two large wins forSBI and a public sector bank for a consolidated order book of over 20000 sites for remotemonitoring. We are pleased to share that we have a state-of-the-art CERT-IN certifiedRemote monitoring platform that uses AI-driven intelligent technology to monitor more than10000 sites across ATMs bank branches and gold loan NBFC branches. During the last 6months remote monitoring set up prevented 108 Thefts 63 Frauds and alerted four Fires.

CMS REMOTE MONITORING CAPABILITIES

Your CompanyRss Software Solutions suite also continues to deliver winswith leading banks in the country. A few years ago we had developed ALGO - worldRss firstAI-based ATM security software. We are pleased to inform that we are deploying thesolution for a large public sector bankRss 7000 ATMs. In addition our Multi-VendorSolution (MVS) also powers ~50000 ATMs of IndiaRss largest bank State Bank of India.

In addition we continue to secure wins in the banking automationsolutions business and won orders for kiosks for leading public sector banks.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of your Company for the financialyear 2021-22 are prepared in accordance with the provisions of the Companies Act 2013(“Act”) and Ind AS 110-Consolidated Financial Statements and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (“ListingRegulations”).

Your Directors have pleasure in attaching the audited consolidatedfinancial statements pursuant to Section 129(3) of the Act and Regulation 34 of ListingRegulations. The Audited Consolidated Financial Statements forms part of the AnnualReport.

INITIAL PUBLIC OFFERING

During the year under review your Company successfully completed itsInitial Public Offer (IPO) of 50925925 equity shares of face value of Rs 10 eachfor cash at a price of Rs 216 per equity share aggregating to Rs 1100Crores through an offer for sale of 50925925 equity shares by Sion Investment HoldingsPte. Limited which constituted 34.41% of post-offer paid-up equity share capital. Thebid/offer opening date was December 21 2021 and the bid/offer closing date was December23 2021. The equity shares of the Company were listed on December 31 2021 and trading onequity shares commenced on BSE Limited (“BSE”) and National Stock Exchange ofIndia Limited (“NSE”) on December 31 2021. Your Directors placed on recordtheir appreciation of contributions made by the entire IPO team especially

in the tough times of the COVID-19 pandemic with all the dedicationsdiligence and commitment which led to successful listing of the CompanyRss equity shareson the BSE and NSE. Further the success of the Initial Public offering reflects the trustand faith reposed in the Company by the Investors customers and business partners andyour Directors thank them for their confidence in the Company.

DEMATERIALIZATION OF SHARES

All the Shares of your Company are in Dematerialization mode except 5Equity Shares which are held in physical mode as on March 31 2022. The ISIN of the EquityShares of your Company is INE925R01014.

DIVIDEND

The Board of Directors of your Company had recommended on May 4 2021an Interim Dividend @ Rs 0.62 only per equity share on the entire issuedsubscribed and paid up 148000000 equity shares of nominal value Rs 10/- each.The Interim Dividend was accordingly paid to those shareholders whose names appeared inthe Register of Members as on the record date i.e. May 4 2021.

Further the Board of Directors of your Company have recommended onOctober 19 2021 an Interim Dividend @ Rs 0.91 only per equity share on the entireissued subscribed and paid up 148000000 equity shares of nominal value of Rs10/- each. The Interim Dividend was accordingly paid to those shareholders whose namesappeared in the Register of Members as on the record date i.e. October 19 2021.

Your Directors are pleased to recommend a final dividend of Rs 1/- perequity share on face value of Rs 10/- each i.e. 10% for the financial year ended March31 2022. The final dividend if approved by the shareholders at the ensuing AnnualGeneral Meeting of the Company shall be payable to those Shareholders whose names appearin the register of Members as on the Record Date. Thus the aggregate dividend for theFinancial Year 2021-22 would be Rs 2.53/- per share (i.e. 25.30%).

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of Listing Regulations the top 1000 listedentities based on market capitalization are required to formulate a Dividend DistributionPolicy. Accordingly your Company had formulated and adopted its Dividend DistributionPolicy which is available on the CompanyRss Website at www.cms.com.

CORPORATE OFFICE OF THE COMPANY

Your Directors for the purpose of smooth functioning of CompanyRssbusiness operation and better coordination

with stakeholders have set up a Corporate Office of the Company at thefollowing address:-

CMS Info Systems Limited Grand Hyatt Mumbai

Lobby Level Off Western Express Highway

Santacruz East Mumbai - 400 055

Tel.: 022-48897400

E-mail: investors@cms.com

TRANSFER TO RESERVES

Your Directors do not propose to transfer any amount to generalreserves.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY

There have been no material changes and commitments affecting thefinancial position of the Company between the end of the financial year and the date ofthis Report.

CHANGE IN NATURE OF BUSINESS

During the year under review there was no change in the nature of thebusiness or any activity of business of the Company.

SUBSIDIARIES

As on March 31 2022 the Company has 5 subsidiaries the names of thesubsidiaries are given below:-

1. Securitrans India Private Limited

2. CMS Securitas Limited

3. CMS Marshall Limited

4. Quality Logistics Services Private Limited

5. Hemabh Technology Private Limited

The Company does not have any joint venture/associate Company(ies) ason March 31 2022. During the year under review none of the companies ceased to be asubsidiary of the Company.

Pursuant to the first proviso to Section 129(3) of the Act and Rule 5and Rule 8(1) of the Companies (Accounts) Rules 2014 the salient features of financialstatements performance and financial position of each subsidiary is given in Form AOC-1as Annexure 1 to this Report.

The Audited Financial Statements of the Subsidiaries are available onthe CompanyRss website at www.cms.com pursuant to Section 136 of the Companies Act2013.

MATERIAL SUBSIDIARY

The Company has formulated a Policy for determining MaterialSubsidiaries and the Policy is available on the website of the Company at www.cms.com.Accordingly Securitrans India Private Limited is the material subsidiary of the Company.

SHARE CAPITAL

The paid-up share capital of the Company as on March 31 2022 is Rs1531527470/- divided into 153152747 equity shares of Rs 10/- each.

During the year under review the paid-up equity share capital of theCompany has increased from Rs 1480000000 to Rs 1531527470 due to theissue of shares under Employee Stock Option Plans (ESOP) implemented by the Company. Thedetails of allotment made during the year as of March 31 2022 is as under:

Sr. No. Particulars of allotment of equity shares Number of Shares Date of Allotment Cumulative number of Shares
1 Existing equity share capital 148000000 Existing 148000000
2 Pursuant to exercise of options 4574376 February 4 2022 152574376
3 Pursuant to exercise of options 578371 March 12 2022 153152747

During the year under review the Company has not issued any shareswith Differential voting rights. The Company has neither issued Sweat Equity shares norbought back any shares. The Company does not have scheme to fund its employees to purchasethe equity shares of the Company.

EMPLOYEE STOCK OPTIONS

In order to align employee rewards with the CompanyRss long-term growthand shareholder value creation and also to attract retain and motivate the best availabletalent the Board of Directors at their meeting held on October 19 2016 and the membersof the Company at the General Meeting held on October 20 2016 had approved followingemployee stock option plans:

(i) CMS CEO Stock Option Plan 2016 (“CEO ESOP 2016”);

(ii) CMS Management Stock Option Plan 2016 (“Management ESOP2016”); and

(iii) CMS Employees Stock Option Plan 2016 (“Employees ESOP2016”).

The Nomination and Remuneration Committee of the Board of Directors ofthe Company inter alia administers and monitors Stock Option Plans of the Companyin accordance with the Securities and Exchange Board of India (Share Based EmployeeBenefits and Sweat Equity) Regulations 2021. (“SEBI SBEBSE Regulations”).

During the year the Board of Directors at their meeting held on August10 2021 have amended CMS Management Stock Option Plan 2016 and the number of options wereincreased from 1973333 to 2519366 and the exercise price stood increased from Rs123/- to Rs 165/-.

Further since the Company was intending to list its securities by wayof an Initial Public Offer the Employees ESOP Plan 2016 was amended and approved by theBoard and Shareholders on August 13 2021 empowering the Nomination and RemunerationCommittee to determine the performance criteria for each financial year and relax suchcriteria wherever required for the purpose of vesting the stock options to the eligibleemployees.

Pursuant to the approval of the Board and the ShareholdersRs at theirmeetings held on September 10 2021 ESOP plans of the Company were amended and replacedin entirety in order to align them with SEBI SBEBSE Regulations.

Further based on the recommendation of Nomination and RemunerationCommittee at their meeting held on October 28 2021 the Board further amended the ESOPexercise period of vested options in ESOP plans/ Policies of the Company.

In terms of the Regulations 12(1) of the SEBI SBEBSE Regulations formaking any fresh grants under the Employees ESOP 2016 the CompanyRss Employees ESOP 2016was required to be ratified by the shareholders of the Company. Accordingly the same wasratified by the Board at its meeting held on February 4 2022 and approved by theShareholders through a Postal Ballot on March 15 2022.

The Company has obtained certificates from the Secretarial Auditors ofthe Company stating that the Schemes have been implemented in accordance with the SEBISBEBSE Regulations and the resolutions passed by the members. The certificates areavailable for inspection by members in electronic mode. Disclosures as required underSBEBSE 2021 with respect to the CompanyRss ESOP Schemes as on March 31 2022 areavailable on our website at www.cms.com.

ALTERATION OF ARTICLES OF ASSOCIATION

The Board at its meeting held on August 10 2021 have altered andadopted an amended set of new Articles of Association of the Company in order to confirmwith the requirements prescribed by the Stock Exchanges. The amended and new set ofArticles of Association was approved by the Shareholders at their meeting held on August13 2021.

Further the Articles of Association of the Company was divided intoPart “A” and Part “B”. While Part “A” contains regulationsfor the overall internal management of the Company and Part “B” pertains toregulations containing the Sion Investment Holdings Pte LimitedRss rights. Upon listingand commencement of trading of equity shares of the Company on the Stock Exchanges BSEand NSE from December 31 2021 Part B of the Articles of Association automatically standsterminated and cease to be in force. Accordingly the existing Articles of Association ofthe Company was altered to give effect to the same and was approved by the Board at itsmeeting held on February 4 2022 and also passed by requisite majority of the Shareholdersthrough Postal Ballot on March 15 2022.

DEPOSITS

During the year your Company has not invited accepted or renewed anydeposits from the Public within the meaning of Section 73 and 76 of the Companies Act2013 (the Act) read with Companies (Acceptance of Deposits) Rules 2014. Accordingly ason March 31 2022 there were no principal or interest outstanding in respect thereof.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT 2013

The particulars of loans given guarantees given investments made andsecurities provided by the Company during the year under review are in compliance withthe provisions of Section 186 of the Act and the Rules made thereunder and details of thesame are given in the Notes to the Standalone Financial Statements forming part of theAnnual Report. All the loans given by the Company to the bodies corporate are towardsbusiness purpose.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDTO IN SECTION 188(1) OF THE COMPANIES ACT 2013

All the transactions with related parties were in the ordinary courseof the business and on the armRss length basis and are reported in the Notes to theStandalone Financial Statements. Prior Omnibus approval of the Audit Committee is obtainedfor Contracts which are repetitive in nature. There are no materially significant relatedparty transactions entered into by the Company with its Promoters Directors KeyManagerial Personnel or other related parties which may have a potential conflict with theinterest of the Company at large. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3) of the Act in Form AOC-2 is not applicable.

Your Company has amended the Related Party Transaction Policy in linewith the notification issued by SEBI and the amended Related Party Transaction Policy wasapproved by the Audit Committee and the Board at their meetings held on February 4 2022.The Policy on Materiality of Related Party Transactions and on dealing with Related PartyTransactions as approved by the Board is available on the CompanyRss website and can beaccessed at www.cms.com.

BOARD OF DIRECTORS Board composition

As on March 31 2022 the Board of Directors of your Company comprisesof Eight (8) Directors consisting of Executive Vice-chairman Whole-time Director &CEO four (4) Non-executive-Non Independent Directors (out of which 1 is a WomanDirector) three (3) Independent Directors (out of which 2 are Woman Directors). Theconstitution of the Board of the Company is in accordance with Section 149 of the Act andRegulation 17 of Listing Regulations.

On the basis of the written representations received from theDirectors none of the above Directors is disqualified under Section 164 (2) of the Act.

EXTENSION OF APPOINTMENT OF CEO AND WHOLE-TIME DIRECTOR

During the year under review the Board at their meeting held onSeptember 10 2021 had approved the extension of employment contract of Mr. Rajiv Kaul(DIN: 02581313) as Chief Executive Officer and Whole-time Director of the Company for theperiod from April 1 2022 to March 31 2023 on non-rotational basis. The same was alsoapproved by the shareholders at their meeting held on September 10 2021.

APPOINTMENT OF DIRECTORS

During the year under review pursuant to the approval of shareholdersat their meeting held on April 9 2021 Mr. Tapan Ray (DIN: 00728682) was appointed as aNon-executive Independent Director of the Company for a period of one year effective fromApril 9 2021 to April 8 2022.

Mr. Krzysztof Wieslaw Jamroz (DIN: 07462321) was appointed asNon-executive Non-independent Director on August 10 2021 by the Board of Directorsfollowed by the approval of the Shareholders at their meeting held on August 13 2021.

Further the Board at their meeting held on December 31 2021 haveappointed Mrs. Manju Agarwal and Ms. Sayali Karanjkar as Non-executive IndependentDirectors on the Board with effect from January 1 2022 for a period of two yearseffective from January 1 2022 to December 31 2023. Further the appointment of Mrs.Manju Agarwal and Ms. Sayali Karanjkar as Non-executive Independent Directors of theCompany was also approved by requisite majority of the Shareholders through Postal Balloton March 15 2022.

In the opinion of the Board there has been no change in thecircumstances which may affect their status as Independent Director of the Company and theBoard is satisfied of the integrity expertise and experience including proficiency interms of Section 150(1) of the Act and applicable rules thereunder of IndependentDirectors on the Board.

APPOINTMENT OF MRS. SHYAMALA GOPINATH (DIN: 02362921) AS DIRECTOR ANDCHAIRPERSON OF THE BOARD & THE COMPANY

Mrs. Shyamala Gopinath has successfully completed her tenure as anIndependent Director and Chairperson of the Company on December 31 2021. The Board placedon record its appreciation for the valuable contribution and guidance extended by Mrs.Gopinath during her tenure as an Independent Director and Chairperson of the Company.

Your Directors acknowledge the fact that the Company was required tohave a full-fledged Chairperson & looking at the experience Mrs. Gopinath the Boarddecided to continue her services as a Non-executive Director. Accordingly Mrs. ShyamalaGopinath was appointed as an Additional Director (Non-executive) with effect from January1 2022 and also appointed as the Chairperson of the Board as well as the Company. Mrs.GopinathRss appointment as Additional Director (Non-executive) was also approved byrequisite majority of the Shareholders through Postal Ballot on March 15 2022.

DIRECTORS RETIREMENT BY ROTATION

Pursuant to the provisions of Section 152 (6) of the Act Mr. JimmyLachmandas Mahtani (DIN: 00996110) Non-executive Director of the Company is liable toretire by rotation at the ensuing Annual General Meeting (AGM) and being eligible offershimself for re-appointment. The Board of Directors recommend his re-appointment and thematter is being placed for seeking approval of the members at the ensuing Annual GeneralMeeting of the Company. Pursuant to Regulation 36 of the Listing Regulations read withSecretarial Standards-2 on General Meetings issued by the Institute of Company Secretariesof India brief details and expertise of the Director seeking reappointment are given inthe Notice convening the AGM and the

Corporate Governance Report

DECLARATION OF INDEPENDENCE

Pursuant to the provisions of Section 149 & 152 of the Act readwith Schedule IV and other applicable provisions if any and the Companies (Appointmentand Qualification of Directors) Rules 2014 the Independent Directors are appointed for amaximum term of five years and are not liable to retire by rotation.

The Company has received declarations from the Independent Directorsconfirming that they meet the criteria of Independence as prescribed under Section 149(6)of the Act and confirms that they meet with the criteria of independence as prescribedunder the amended provisions of Regulation 16(1)(b) of Listing Regulations effectiveJanuary 1 2022. The Independent Directors have also confirmed that they have registeredtheir names in the data bank maintained with the Indian Institute of Corporate Affairs.

During the year under review the Independent Directors of the Companyhad no pecuniary relationship or transaction with the Company other than receiving thesitting fees commission if any and reimbursement of expenses incurred by them for thepurpose of attending meetings of the Board/Committees of the Company.

FAMILIARIZATION PROGRAM

In compliance with the requirements of Listing Regulations the Companyhas put in place a framework for DirectorsRs Familiarization Program to familiarize themwith their roles rights and responsibilities as Directors the working of the Companynature of the industry in which the Company operates business model etc. The details ofthe Familiarization program conducted during the financial year under review are explainedin the Corporate Governance Report. The same is also available on the CompanyRss websiteat www.cms.com

FORMAL ANNUAL EVALUATION

Pursuant to the applicable provisions of the Act and ListingRegulations the Board of Directors of your Company have carried out Annual performanceevaluation of:

a) Their own performance as a whole;

b) Individual Directors Performance;

c) Chairperson of the Company and

d) Performance of all Committees of the Board.

The performance of the Board as a whole and its committees forfinancial year 2021-22 was evaluated

by the Board through structured questionnaire which covered variousaspects such as the composition and quality meetings and procedures contribution toBoard processes effectiveness of the functions allocated relationship with managementprofessional development adequacy appropriateness and timeliness of information etc. Theperformance of the Board and its committees was evaluated based on the response receivedfrom the individual Directors to the questionnaire.

In terms of requirements of Schedule IV of the Act a separate meetingof Independent Directors of the Company was held on December 24 2021 inter alia toreview;

(i) the performance of Non-independent Directors (including theChairperson)

(ii) the functioning of the Board with specific reference of timelyreceipt of Agenda notes quality of the agenda notes quality of presentation follow upof minutes and action required points etc.

(iii) the functioning of the Chairperson of the Board with reference tomeeting conducted guidance provided adequate opportunity given to all the members toexpress their views including reservations (if any) etc. and

(iv) to assess the quality quantity and timeliness of the flow ofinformation between the Management and the Board.

The Board reviewed and analyzed the responses to the evaluation formsand accordingly completed the Board evaluation process for FY 2021-22 and expressed theirsatisfaction with the evaluation process.

KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Act the KeyManagerial Personnel of the Company as on March 31 2022 are as under:

• Mr. Rajiv Kaul Executive Vice-chairman Whole-time Director& CEO

• Mr. Pankaj Khandelwal President and Chief Financial Officer

• Mr. Praveen Soni Company Secretary & Compliance Officer.

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

Ten (10) meetings of the Board of Directors of the Company were heldduring the year under review. Detailed information of the meetings of the Board isincluded in the Report on Corporate Governance

which forms part of this Report. The intervening gap between twoconsecutive meetings was within the period prescribed under the Act Secretarial Standardson Board Meetings Listing Regulations and pursuant to the relaxations issued by SEBICircular dated April 29 2021 as amended from time to time.

COMMITTEES OF THE BOARD

The Board of Directors of your Company have formed various mandatorycommittees as per the provisions of the Act and Listing Regulations and as a part ofbetter corporate governance practices the terms of reference and the constitution ofthose committees are in compliance with the applicable laws.

In order to ensure focused attention on business and for bettergovernance and accountability the Board has constituted the following mandatoryCommittees:

a) Audit Committee;

b) Nomination and Remuneration Committee;

c) StakeholdersRs Relationship Committee;

d) Corporate Social Responsibility Committee;

e) Risk Management Committee.

The details with respect to the Composition powers roles terms ofreference etc. of the aforesaid committees are given in detail in the “CorporateGovernance Report” of the Company which is presented in a separate section and formspart of the Annual Report of the Company. Brief details of committees are mentioned hereinbelow:

a) Audit Committee

As required under Section 177 (8) of the Act and the rules framedthereunder read with Regulation 18 of Listing Regulations the Composition of the AuditCommittee is in line with the provisions of the Companies Act 2013 and Listingregulations.

The Audit Committee comprises of Mr. Tapan Ray Mrs. Manju Agarwal andMr. Ashish Agrawal as its Members. The Committee comprises of majority of IndependentDirectors with Mr. Tapan Ray being the Chairman. Mr. Rajiv Kaul is permanent invitee tothe said committee. Five (5) Audit Committee Meetings were held during the year underreview.

Further details relating to the Audit Committee are provided in theCorporate Governance Report which forms an integral part of this Annual Report. The AuditCommittee of the Company reviews the reports to be submitted to the Board of Directorswith respect to auditing and accounting matters. During the year under review allrecommendations

made by the Audit Committee were accepted and approved by the Board.

b) Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of Mr. Tapan RayMr. Jimmy Lachmandas Mahtani and Mrs. Manju Agarwal as its members. Mr. Rajiv Kaul is thepermanent invitee to the said Committee. Four (4) meetings of the Nomination andRemuneration Committee were held during the period under review. Further details relatingto the Nomination and Remuneration Committee are provided in the Corporate GovernanceReport which forms an integral part of this Annual Report.

c) StakeholdersRs Relationship Committee

The StakeholdersRs Relationship Committee comprises of Mr. Tapan RayMr. Rajiv Kaul Mrs. Shyamala Gopinath and Mr. Krzysztof Wieslaw Jamroz as its members.One Meeting of the StakeholdersRs Relationship Committee was held for the year underreview on May 6 2022. Further details pertaining to StakeholdersRs RelationshipCommittee are provided in the Corporate Governance Report which forms an integral part ofthis Annual Report.

d) Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee comprises of Mr. RajivKaul Mrs. Shyamala Gopinath Mr. Krzysztof Wieslaw Jamroz Ms. Sayali Karanjkar as itsmembers. For the period under review the Company held one meeting of Corporate SocialResponsibility Committee on February 4 2022. Further details relating to the CorporateSocial Responsibility Committee are provided in the Corporate Governance Report whichforms an integral part of this Annual Report.

e) Risk Management Committee

The Risk Management Committee comprises of Mrs. Shyamala Gopinath Mr.Ashish Agrawal Mr. Krzysztof Wieslaw Jamroz Mr. Tapan Ray and Mr. Pankaj Khandelwal asits members Mr. Rajiv Kaul is the permanent invitee to the said Committee. For the yearunder review the Risk Management Committee Meeting was held on May 6 2022. Furtherdetails relating to the Risk Management Committee are provided in the Corporate GovernanceReport which forms an integral part of this Annual Report.

POLICY ON DIRECTORSRs APPOINTMENT AND REMUNERATION

Policy on DirectorsRs appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under Section 178(3) of the Act forms part of the Nomination andRemuneration Policy of the Company. This Policy is available on the website of the Companyand can be accessible at www.cms.com

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS

The Directors state that applicable Secretarial Standards i.e. SS-1relating to “Meetings of the Board of Directors” and SS-2 relating to“General Meetings” have been duly complied with by the Company.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report as per Regulation 34 of SEBI ListingRegulations is applicable to the Company. The Business Responsibility Report for thefinancial year ended 2021-22 is given in a separate section and forms part of the AnnualReport of the Company. The said Report is also available on the CompanyRss website and canbe accessed at www.cms.com

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of Regulation 34 of Listing Regulations a separate section onManagement Discussion and Analysis Report highlighting the business of your Companydetails about the economy business performance review of the CompanyRss businesses andother material developments during the financial year 2021-22 is appended to this AnnualReport.

CORPORATE GOVERNANCE

Your Company is fully committed to follow good Corporate Governancepractices and maintain the highest business standards in conducting business. The Companycontinues to focus on building trust with shareholders employees customers suppliersand other stakeholders based on the principles of good corporate governance viz.integrity equity transparency fairness sound disclosure practices accountability andcommitment to values. Your Company has adopted high standards of Corporate Governance withvery competent Board having diverse experience.

A separate section on Corporate Governance stipulated under Regulation34 of Listing Regulations forms part of this Annual Report and is appended herewith tothis Report.

A Certificate from M/s. M. Siroya and Company Secretarial Auditors ofthe Company confirming compliance to the conditions of Corporate Governance as stipulatedunder Listing Regulations is appended as an Annexure to the Corporate Governance Report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYRsS OPERATIONS IN FUTURE

No significant or material orders were passed by the regulators orcourts or tribunals which impact the going concern status and CompanyRss operations infuture.

MAINTENANCE OF COST RECORDS

During the period under review provisions of Rule 8(5) (ix) of TheCompanies (Accounts) Rules 2014 read with Section 148(1) of the Act and rule 3 and 4 ofThe Companies (Cost Records and Audit) Rules 2014 are not applicable to the Company.

DISCLOSURE OF REMUNERATION OR COMMISSION RECEIVED BY A EXECUTIVEVICE-CHAIRMAN & CEO FROM THE COMPANYRsS HOLDING OR SUBSIDIARY COMPANY

Mr. Rajiv Kaul Executive Vice-chairman and Chief Executive Officer ofthe Company has not received any remuneration/commission during the year ended March 312022 from holding or subsidiary company of the Company. For detailed arrangement betweenMr. Kaul and the Vault Co-Investment Vehicle L.P. a Limited Liability Partnershipincorporated by the ultimate promoter of the Company i.e. Baring Private Equity Asia GPVI Limited kindly refer note no. 40 of the financial statement for issuance of certainunits in Vault L.P. to Mr. Kaul.

AUDITORS & REPORTS

Statutory Auditors and AuditorRss Report:

Pursuant to the provisions of Section 139 of the Act and the Rules madethereunder M/s. B S R & Co. LLP Chartered Accountants were appointed as the StatutoryAuditors of the Company from the conclusion of 11th Annual General Meeting(“AGM”) of the Company held on September 29 2018 till the conclusion of the 16thAGM of the Company to be held for the financial year 2022-23. They have confirmed tothe Company that they are not disqualified to act as the Statutory Auditors of theCompany.

The AuditorsRs Report does not contain any qualificationsreservations adverse remarks or disclaimers. Notes to Accounts are self-explanatory anddo not call for any further comments.

Secretarial Auditor and their report:

In terms of the provisions of the Section 204 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed M/s M Siroya and Company Practicing Company Secretaries (CP No. 4157) asthe Secretarial Auditor for conducting the Secretarial Audit of your Company for thefinancial year ended March 31 2022 and to furnish the report to the Board.

The report of the Secretarial Auditor for the financial year 2021-22in prescribed Form No. MR-3 carrying no qualification/adverse remarks is annexed herewithas Annexure 2.

Securitrans India Private Limited is the material unlisted subsidiaryof the Company for the financial year ended March 31 2022. In terms of Regulation 24A ofListing Regulations read with Section 204 of the Companies Act 2013 Secretarial Audit ofthe material unlisted subsidiary has been conducted by Practicing Company Secretary andthe said report has also been annexed as Annexure 3. None of the said Audit Reportscontain any qualification reservation or adverse remark or disclaimer.

Reporting of Frauds by Auditors:

During the year under review no fraud has been committed by theofficers and employees against your Company. However looking at the nature of business ofthe Company certain cash embezzlements have been committed by few employees who wereinvolved in business operations of the Company as detailed below:

There were Eleven instances (FY21: Seven) aggregating to Rs 159.59Million (FY21: Rs 74.84 Million) of cash embezzlements have been done by employees of theCompany and were reported by the Statutory Auditors. Out of the above the Company hasrecovered Rs 50.13 Million (FY21: Rs 23.66 Million) Rs 31.30 Million written off (FY21:Rs 10.35 Million) and recovery of balance Rs 78.16 Million (FY21: Rs 40.83 Million) is inprogress.

Except above no other embezzlements have been reported by StatutoryAuditors or Secretarial Auditors to the Audit Committee of the Company.

ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 acopy of the annual return in Form MGT-7 is placed on the website of the Company and can beaccessed at www.cms.com.

INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act and the Companies(Accounts) Rules 2014 on the recommendation of the Audit Committee at their meeting heldon May 25 2021 M/s. Grant Thornton Bharat LLP were appointed by the Board of Directorsto conduct internal audit of the Company for the financial year 2021-22.

CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct to regulate monitor andreport trading by designated persons and their immediate relatives and a Code of FairDisclosure to formulate a framework and policy for disclosure of events and occurrences asper the requirements under the Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015. The Code of Fair Disclosure has been made available onthe CompanyRss website at www.cms.com

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company is committed to adhere to the highest standards of ethicalmoral and legal conduct of business operations. The Company has a Whistle Blower Policyand has established the necessary vigil mechanism for Directors and employees inconfirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations toreport their concerns about unethical behavior.

The policy is to provide a mechanism which ensures adequate safeguardsto employees and Directors from any victimization on raising of concerns of any violationsof legal or regulatory requirements incorrect or misrepresentation of any financialstatement and reports and so on. The employees of the Company have the right/ option toreport their concern/ grievance to the Chairperson of the Audit Committee.

The Company has a Vigil Mechanism in place under which the employeesare free to report violations of applicable laws and regulations. The Audit CommitteeChairmanRss office address and process to communicate with him is provided under thePolicy for ease of access to persons intending to use the Whistle Blower framework.

Under the Whistle Blower Policy confidentiality of those reportingviolation(s) is protected and they shall not be subject to any discriminatory practices.This policy is available on the CompanyRss website at www.cms.com.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the Companies (Corporate Social Responsibility Policy)Amendment Rules 2021 which came into effect from January 22 2021 the revised CSRPolicy formulated by the Corporate Social Responsibility Committee and approved by theBoard of Directors on February 4 2022 is available on the CompanyRss website atwww.cms.com.

During the year under review the Company was required to spent Rs37155794/- (2% of the average net profit of last three financial years) on CSRactivities. However the Company has voluntarily spent an amount of Rs37356000/- towards CSR expenses.

For other details regarding the CSR Committee please refer to theCorporate Governance Report which is forming part of this report.

The brief outline of the CSR policy of the Company and the initiativesundertaken by the Company on CSR activities during the year as detailed in CSR Report areset out in Annexure 4. in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company gives prime importance to the dignity and respect of itsemployees irrespective of their gender/hierarchy and expect responsible conduct andbehavior on the part of employees at all levels.

Your Company has always believed in providing a safe and harassmentfree workplace for every individual working in any office through various interventionsand practices. The Company endeavors to create and provide an environment that is freefrom discrimination and harassment including sexual harassment.

As per the requirements of the Sexual Harassment of Women at workplace(Prevention Prohibition and Redressal) Act 2013 and the rules made thereunder yourCompany has adopted a policy for the prevention of Sexual Harassment at workplace and hasconstituted an Internal Complaints Committee (ICC).

All employees as well as contractual staff temporary trainees arecovered by this policy.

No complaints were received during the financial year.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNING & OUTGO

Information pursuant to clause (m) of sub-section (3) of Section 134 ofthe Act read with rule 8 (3) of The Companies (Accounts) Rules 2014 is not given asconservation of energy and technology absorption are not applicable to the Company.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Company had earnings and Expenditures in foreign currency and detailsare given hereunder:

Foreign Exchange Earnings (in Rs Million ) - Nil

Foreign Exchange Outgo (in Rs Million) - Imports - 1127.92Million

PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as requiredunder Section 197 (12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of the Annual Report as Annexure5.

The statement containing names of Directors Key Managerial Personneland top ten employees others in terms of remuneration drawn and the particulars ofemployees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is providedin a separate annexure forming part of this report. As per the provisions of the Section136 of the Act read with sub-rules 2 and 3 of Rule

5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Annual Report is being sent to the Members excluding theaforesaid annexure to all Shareholders of the Company. Any Shareholder interested inobtaining the copy of said statement may write to the Company Secretary

6 Compliance Officer at CMS Info Systems Limited T-151 5thFloor Tower No. 10 Sector-11 railway station complex CBD Belapur Navi Mumbai - 400614 e-mail ID: investors@cms.com.

INVESTOR EDUCATION AND PROTECTION FUND

The Company was not required to transfer any amount to InvestorEducation and Protection Fund under Section 125 of the Act.

RISK MANAGEMENT

The Company has devised and adopted a Risk Management Policy andimplemented a mechanism for risk assessment and management. The policy provides foridentification of possible risks associated with the business of the Company assessmentof the same at regular intervals and taking appropriate measures and controls to managemitigate and handle them. The key categories of risk covered in the policy are strategicrisks financial risks operational risks and such other risk that may potentially affectthe working of the Company. A copy of the risk management policy is placed on the websiteof the Company.

As the equity shares of the Company got listed on NSE and BSE onDecember 31 2021 and is forming part of the top 1000 listed entities determined on thebasis of market capitalisation as at the end of the immediate previous financial yeari.e. March 31 2022 Regulation 21 of the Listing Regulations with respect to RiskManagement Committee has become applicable to the Company. The Board of Directors haveaccordingly constituted Risk Management Committee for monitoring and reviewing of therisk assessment mitigation and risk management plan from time to time.

In BoardRss view there are no material risks which might threaten theexistence of the Company.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has in place adequate internal financial control systemcommensurate with the size of its operations. Internal control systems comprising ofpolicies and procedures which are designed to ensure sound management of your CompanyRssoperations safe keeping of its assets prevention and detection of frauds and errorsoptimal utilization of resources reliability of its financial information and compliance.Systems and procedures are periodically reviewed by the Audit Committee to maintain thehighest standards of Internal Control. During the year under review no material orserious observation has been received from the Auditors of your Company citinginefficiency or inadequacy of such controls. An extensive internal audit is carried out byinternal audit firm and management internal audit team.

DIRECTORSRs RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134 of the Act the Directorshereby confirm and state that:

a) in the preparation of the annual financial statements for thefinancial year ended March 31 2022 the applicable accounting standards had been followedand no material departures have been made for the same;

b) they have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended on March 31 2022 and of the profit and loss and cash flow of theCompany for the period ended March 31 2022;

c) they have taken proper and sufficient care for the maintenance ofadequate accounting records

in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts for the year ended March 312022 on a going concern basis;

e) they have laid down internal financial controls and the same havebeen followed by the Company and that such internal financial controls are adequate andwere operating effectively; and

f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws sand that such systems were adequate and operatingeffectively.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING IS PENDING UNDER THEINSOLVENCY AND BANKRUPTCY CODE 2016 (“IBC”) DURING THE YEAR ALONG WITH ITSSTATUS AS AT THE END OF FINANCIAL YEAR There was no application made or any proceedingpending under IBC during the year under review.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THETIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS ORFINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

There was no one time settlement during the period under review.

CAUTIONARY STATEMENT

Statements in this Report particularly those which relate toManagement Discussion and Analysis as explained in a separate Section in this Reportdescribing the CompanyRss objectives projections estimates and expectations mayconstitute Rsforward-looking statementsRs within the meaning of applicable laws andregulations. Actual results might differ materially from those either expressed or impliedin the statement depending on the circumstances.

ACKNOWLEDGMENT

The Board of Directors take this opportunity to thank and expresssincere gratitude to all the valuable stakeholders of the Company viz. shareholderscustomers vendors bankers business associates regulatory authorities Central andState Government Departments local authorities for their excellent support andco-operation extended by them during the financial year.

The Board of Directors also place on record their sincere appreciationof the valuable contribution made by the employees at all levels to the growth of theCompany.

On Behalf of the Board of Directors of CMS Info Systems Limited

Ashish Agrawal Rajiv Kaul
Director Executive Vice-Chairman & CEO
DIN:00163344 DIN: 02581313
Place: Mumbai
Date: May 9 2022

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