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Dev Information Technology Ltd.

BSE: 538417 Sector: IT
NSE: DEVIT ISIN Code: INE060X01018
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Dev Information Technology Ltd. (DEVIT) - Director Report

Company director report

To

The Members

DEV INFORMATION TECHNOLOGY LIMITED

Your directors are pleased to present the Twenty Second Annual Report of your companytogether with the Audited Financial Statement of your company for the financial yearended 31st March 2019.

The summarized financial results for the year ended on 31st March 2019 isas under:

1. HIGHLIGHTS:

The key highlights for the Financial Year 2018-19 are:

Stock price touched it's all time high i.e. Rs. 100/-

• The company have recommended final dividend @5% (i.e. Rs. 0.50 per equityshares) of Rs. 10/- each on the equity shares out of the profit of the company for thefinancial year 2018-19.

Nearshore centre: The company shifted its nearshore centre to a biggerand better location in Charlottetown PEI Canada. The company has hired more supportexecutives and thus increased its strength

New hires: To fulfil the growth in terms of projects awarded to thecompany this year the company has hired 291 new employees across multiple technologiesand platforms.

Devlabs - Fostering Innovation by Creative Thinking : At DEVlabswe believe in fostering innovation by creative thinking. We nurture passion and aredetermined to immerse in the process of developing new and different ideas by thinkingabout new things and thinking in new ways. As a result of persistent efforts the team hasbeen successful in developing a unique AI powered and ML driven Business Intelligence andAnalytics solution that delivers meaningful and accurate business insights. The team isalso working on solutions on next-gen technologies like Artificial Intelligence ChatbotsAugmented Reality Virtual Reality Blockchain etc.

Dev Accelerator: Dev Information Technology Ltd. through its subsidiarycompany i.e. Dev Accelerator LLP (DevX) has setup a massive Accelerator Centre forstart-ups making it a one-stop solution for entrepreneurs to conceive develop test andcommercially roll-out their ideas. The first phase has been highly successful. The companyis planning to roll-out similar accelerator in Ahmedabad as well as other cities of India.The company is also planning one internally.

• Achievements: Dev Information Technology Ltd. has been awarded with Premier100 award by Channel World Top 100 SME's of INDIA by India SME Forum Super 100 Award bySME Channels SKOCH Achiever Order-of-Merit Award by SKOCH group Award for BusinessExcellence by ISODA in 2018-19.

• Xcellence Awards: The company organized its biannual award ceremony andawarded several employees across various categories.

2. FINANCIAL RESULTS:

Summary of the financial results of the Company for the year under review is as under:

Particulars

Standalone

Consolidated

2018-19 2017-18 2018-19 2017-18
Net Total Income 733147041 673285173 781825857 699436704
Less: Operation and Admin Expenses 639716368 589979708 680924026 610047599
Profit before depreciation and Taxes 93430673 83305465 100901831 89389105
Less: Depreciation 15968909 17499339 17867612 17499417
Add: Extraordinary/ Exceptional Items 0 0 0 0
Profit before interest and tax (PBIT) 77461764 65806126 83034219 71889688
Less: Interest 12438998 16312229 15385916 16869689
Profit before Tax (PBT) 65022766 49493897 67648303 55019996
Less: Taxes (including deferred tax) 21429526 15002120 23843081 15389894
Profit after Tax (PAT) 43593240 34491778 43805222 39630102
Balance brought forward from previous period 0 0 0 0
Less: Adjustment of opening liability in respect of employees benefits in accordance with AS-15 0 0 0 0
Net profit carried to Balance Sheet 43593240 34491778 43805222 39630102

3. PERFORMANCE OF YOUR COMPANY:

Consolidated Financial Highlights :

The audited consolidated financial statement of your company as on 31st March 2019prepared in accordance with the Generally Accepted Accounting Principles in Indiarelevant applicable regulation of SEBI (LODR) Regulation 2015 and provision of CompaniesAct 2013 Forms part of this Annual report.

The Key Aspect of your company's consolidated financial performance during thefinancial year 2018-19 are as follows:

Operational Highlights: The consolidated revenue of the company from Sales is Rs.776259287/-as compared to Rs. 699436704 /- in the previous year.

Financial highlights: The consolidated profit of the company is Rs. 43805222/-as compared to Rs. 39630102/- in the previous year.

Standalone Financial Highlights:

Operational Highlights: The standalone revenue of the company from Sales is Rs.727904103 /- as compared to Rs. 673285173/- in the previous year.

Financial highlights: The standalone profit of the company is Rs. 43593240/- ascompared to Rs. 34491777/- in the previous year.

4. DIVIDEND:

Your company have recommended final dividend @5% (i.e. Rs. 0.50 per equity shares) ofRs. 10/- each on the equity shares out of the profit of the company for the financial year2018-19. The said dividend if approved by the shareholders would involve a cash outflowof Rs. 3327619.39/- including Tax there on.

5. DEPOSIT:

During the year under review your company has not accepted any deposits pursuant to theprovisions of Section 73 to 76 of the Companies Act 2013.

6. CHANGES IN NATURE OF BUSINESS:

There is no significant change made in the nature of the company during the financialyear.

7. NAME OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES:

During the year under review none of the Company or body corporate have became orceased to be the subsidiaries joint ventures or associate companies.

8. PARTICULARS OF HOLDING SUBSIDIARY AND ASSOCIATE COMPANIES:

The Board reviews the affairs of the Company's subsidiaries and associates at regularintervals. In accordance with section 129(3) of the Companies Act 2013 the Company hasprepared Consolidated Financial Statements of the Company which form part of this AnnualReport. Further a statement containing salient features of the Financial Statements ofthe Company's subsidiaries and associates is given in prescribed form AOC-1 which formspart of this Annual report. The said Form also highlights the

financial performance of each of the subsidiaries and associate companies included inthe Consolidated Financial Statements.

In accordance with section 136(1) of the Companies Act 2013 the Financial Statementsof the subsidiary and associate companies are available for inspection by the members atthe Registered Office of the Company during business hours on all days except SaturdaySunday and Public Holiday. Any person desirous of obtaining said financial statement maywrite at cs@devitpl.com . The Annual Report of the Companyand Audited Financial Statements of each of the subsidiary companies have been placed onthe website of the Company www.devitpl.com

9. RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM:

As a global enterprise the company is exposed to a range of external as well asinternal risks that have a significant impact on its performance. In order to efficientlymanage such risk the Company has established a well-defined process of risk managementwherein the identification analysis and assessment of the various risks measuring of theprobable impact of such risks formulation of risk mitigation strategy and implementationof the same takes place in a structured manner. Though the various risks associated withthe business cannot be eliminated completely all efforts are made to minimize the impactof such risks on the operations of the Company. Our robust internal control system forminimizing the risk propels our culture of informed and responsible risk handling forattaining the organizational objectives with optimum utilization of resources.

10. RELATED PARTY TRANSACTIONS:

All contracts/transactions entered into by the Company during the financial year withrelated parties were in the ordinary course of business and on an arm's length basis.

No material Related Party Transactions i.e. transactions exceeding ten percent of theannual consolidated turnover as per the last audited financial statements were enteredduring the year by your Company. Accordingly the disclosure of Related Party Transactionsas required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable.

All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for Related Party Transactions fortransactions which are of repetitive nature and entered in the ordinary course of businessand are at arm's length. All Related Party Transactions are subjected to independentreview by a reputed accounting firm to establish compliance with the requirements ofRelated Party Transactions under the Act and SEBI LODR Regulations.

11. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant and material orders passed by the Regulators/Courts whichwould impact the going concern status of the Company and its future operations.

12. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Disclosure on details of loans guarantees and investments pursuant to the provisionsof Section 186 of the Companies Act 2013 and LODR Regulations are provided in thefinancial statements.

13. DIRECTORS & KEY MANAGERIAL PERSONNEL:

I. Retire by Rotation- Mr. Vishal N. Vasu:

In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Vishal N. Vasu Executive Director (DIN: 02460597) of thecompany is liable to retire by rotation in the fourth coming Annual General Meeting andbeing eligible seeks reappointment.

II. Board Evaluation:

The board of directors has carried out an evaluation of its own performance BoardCommittees and individual directors pursuant to the provisions of Companies Act andListing Regulations. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.

III. Nomination and Remuneration Policy:

The policy on nomination and remuneration of Directors Key Managerial Personnel andother employees has been formulated in terms of the provision of The Companies act 2013and SEBI (LODR) Regulation 2015 in order to pay equitable remuneration to the DirectorsKey Managerial Personnel and employees of the Company and to harmonise the aspiration ofhuman resources consistent with the goals of the Company.

The Remuneration Policy has been updated on the website of the Company at:https://www.devitpl.com/investor-relations/.

The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in a separate annexure forming part of this report.However the Annual Report is being sent to the members excluding the said annexure. Interms of Section 136 of the Act the said annexure is open for inspection at theRegistered Office of your Company. Any member interested in obtaining a copy of the samemay write to the Company Secretary.

IV. Details of Director's Remuneration:

The information relating to remuneration paid to directors as required under Section197(12) of Companies Act is given under Corporate Governance Report under Annexure-E.

V. Certificate of Practicing Company Secretary:

The Company has obtained a certificate from M/s. Murtuza Mandorwala & AssociatesPracticing Company Secretary Ahmedabad stating that none of the Directors on the Board ofthe Company have been debarred/ disqualified from being appointed / continuing asDirectors of any company by the SEBI and Ministry of Corporate Affairs or any suchStatutory authority under Annexure- H.

14. DECLARATION BY INDEPENDENT DIRECTORS:

The company has received necessary declaration from the Independent Directors asrequired under Section 149(7) of the Companies Act and LODR Regulations confirming thatthey meet the criteria of independence as laid down in Section 149(6) of the Act and thatof LODR Regulations.

Independent Directors are in compliance with the Code of Conduct prescribed underSchedule IV of the Companies Act 2013

15. MEETING OF BOARD OF DIRECTORS AND COMPLIANCE TO SECRETARIAL STANDARD:

I. Number of Board Meetings in the year:

The Board of Directors of the Company met Five (05) times during the year. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.

The Company has complied with the provisions of Secretarial Standard 1 (relating tomeetings of the Board of Directors) and Secretarial Standard 2 (relating to Generalmeetings) during the year.

16. BOARD COMMITTEES:

The company has 3 (Three) Board Committees as on March 31 2019.

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders Relationship Committee

The details of all the committees along with their main terms composition and meetingsheld during the year under review are provided in the Report on Corporate Governance apart of this Annual Report.

17. EXTRACT OF ANNUAL RETURN:

As per the requirements of Section 92(3) of the Act and Rules framed thereunder theextract of the annual return for FY 2018-19 is given in Annexure A in theprescribed Form No. MGT-9 which is a part of this report and the same is also availableon our website : www.devitpl.com .

18. DIRECTORS' RESPONSIBILITY STATEMENT:

Your Company's Directors make following statement in terms of sub-section (5) ofSection 134 of the Act which is to the best of their knowledge and belief and accordingto the information and explanations obtained by them:

i. That in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

ii. That such accounting policies as mentioned in the Financial Statements as'Significant Accounting Policies' have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at March 31 2019 and of theprofit of the Company for the year ended on that date;

iii. That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

iv. That the annual financial statements have been prepared on a going concern basis;

v. That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;

vi. That proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.

19. AUDITORS:

I. Statutory Auditors: The members at the 19th Annual General Meetingheld on 30th September 2016 appointed M/s Chandulal M. Shah & Co.Chartered Accountants Ahmedabad having FRN: 101698W as Statutory Auditors of the Companyuntil the Conclusion of the Annual General Meeting of the Company for the year ended31.03.2021 subject to their appointment being ratified by the members in every AGM. Themembers of the Company approved deletion of the requirement of seeking ratification ofappointment of Statutory Auditors at every AGM at 21st Annual General Meetingpursuant to amendment brought by the Companies Amendment Act 2017.

II. Auditors Report: The report of the Statutory Auditors along with Notes toAccounts is enclosed to this report. The observations made in the Auditors Report areself-explanatory and therefore do not call for any further comments.

III. Secretarial Auditor: Pursuant to the provisions of Section 204 of the Act andthe Companies (Appointment and Remuneration of Managerial Personnel) Rule 2014 thecompany has appointed M/s. Murtuza Mandorwala & Associates Practising CompanySecretary Ahmedabad

to carry out the Secretarial Audit of the company. The Report of the Secretarial Auditfor F.Y. 2018-19 is attached herewith as Annexure-B. There are no qualificationsobservations or adverse remark or disclaimer in the said report.

IV. Internal Auditor: In terms of Section 138 of the Companies Act 2013 and Rulesmade there under M/s. Nisarg J. Shah & Co. Chartered Accountants Ahmedabad havebeen appointed as an Internal Auditors of the Company for Financial Year 2018-19. Duringthe year the Company continued to implement their suggestions and recommendations toimprove the control environment. Their scope of works includes Review of the accuracy andreliability of the Corporation accounting records and financial reports review ofoperational efficiency effectiveness of systems and processes and assessing the internalcontrol strengths opportunities for cost saving and recommending company for improvingcost efficiencies.

20. CORPORATE GOVERNANCE:

Your company provides utmost importance at best Governance Practices and are designatedto act in the best interest of its stakeholders. Better governance practice enables thecompany to introduce more effective internal controls suitable to the changing nature ofbusiness operations improve performance and also provide an opportunity to increasestakeholders understanding of the key activities and policies of the organization.

Your Company has incorporated the appropriate standards for corporate governance.Pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Company is not required to mandatorily comply with the provisionsof certain regulations of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. Hence company is not filing Corporate Governance Report to stockexchange quarterly. However as per Regulation 34(3) read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 company is giving report oncorporate governance report in annual report of the company. Details regarding CorporateGovernance Report of the Company regarding Compliance of the Conditions of CorporateGovernance pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 are annexed herewith as "Annexure-E".

A certificate from M/s Murtuza Mandorwala & Associates Practicing CompanySecretary Ahmedabad confirming compliance to the conditions of Corporate Governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is annexed to Corporate Governance Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review is presented ina separate section forming part of the Annual Report and is annexed herewith as "AnnexureD".

22. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has constituted an audit committee therefore it is also mandatory for suchCommittee to operate the vigil mechanism and if any of the members of the committee havea conflict of interest in a given case they should rescue themselves and the others onthe committee would deal with the matter on hand to whom other directors and employeesmay report their concerns. It provides adequate safeguard against victimization ofemployees and directors who avail of the vigil mechanism and also provide for directaccess to the chairperson of the Audit committee or the director nominated to play therole of audit committee as the case may be in exceptional cases. The existence of themechanism may be appropriately communicated within the organization. The detailed WhistleBlower Policy/Vigil Mechanism available on below link:https://www.devitpl.com/wp-content/uploads/Vigil-Mechanism-for-Directors-and-Employees.pdf

23. SEXUAL HARASSMENT:

There was no case filled during the year under the sexual harassment of women atworkplace (Prevention Prohibition & Redressal) Act 2013. Further Company ensuresthat there is a healthy and safe atmosphere for every women employee at the workplace andmade the necessary policies for staff and secure environment for women employee.

24. EQUAL EMPLOYMENT OPPRTUNITIES:

Being an equal opportunity employer the company will do its utmost to ensure that allof its employees are treated fairly during the period of their employment irrespective oftheir race religion sex (including pregnancy) color creed age national originphysical or mental disability citizenship status ancestry marital status veteranstatus political affiliation or any other factor protected by law. All decisionsregarding employment will be taken based on merit and business needs only.

25. POLICY ON CODE OF CONDUCT AND ETHICS:

Being a SME listed Company exemption has been provided to the Company from formulatingof Code of Conduct for Board of Directors and Senior Management Personnel. However Boardof Directors has formulated and adopted Code of Business Conduct Ethics for Director &Senior Management Executive policy. As an organization your Company places a greatimportance in the way business is conducted and the way each employee performs his/herduties. Your Company encourages transparency in all its operations responsibility fordelivery of results accountability for the outcomes of our actions participation inethical business practices and being responsive to the needs of our people and society.Towards this end your Company has laid down a Code of conduct applicable to all theemployees of your Company and conducted various awareness sessions across the Company. TheCode provides for the matters related to governance compliance ethics and other matters.In this regard certificate from Managing Directors as required under Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 has been received bythe Board and the same is attached herewith as per Annexure - F.

The detailed Code of Business Conduct Ethics for Director & Senior ManagementExecutive policy available on below link:https://www.devitpl.com/wp-content/uploads/Code-of-Business-Conduct-Ethics-for-Directors-Senior-Management-Executive.pdf

26. MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF YOUR COMPANY:

There are no material changes and commitments affecting the financial position of yourCompany which has occurred between end of financial year of the Company i.e. March 312019 and the date of Directors' Report i.e. 29th August 2019.

27. FOREIGN EXCHANGE EARNINGS AND OUTFLOW:

During the year the total foreign exchange used was Rs. 2578770/- and the totalforeign exchange earned was Rs. 225206617/-.

28. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION:

The details of conservation of energy and technology absorption are not applicable tothe company hence not furnished.

29. MAINTENANCE OF COST RECORDS:

Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Companies Act 2013 is not applicable to the company havingregards to the nature of the Company's business/ activities.

30. CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Section 135(1) and 135(5) of the Companies Act 2013 regardingconstitution of Corporate Social Responsibility (CSR) Committee and spending of atleast 2%of average net profit are not applicable to the Company.

31. CEO/ CFO CERTIFICATION:

In terms of Regulation 17(8) of the Listing Regulations the CFO has certified to theBoard of Directors of the Company with regard to the financial statements and othermatters specified in the said regulation for the financial year 2018-19. The certificatereceived from CFO is attached herewith as per Annexure - G.

32. LISTING FEES:

The Company affirms that the annual listing fees for the year 2018-19 to The NationalStock Exchange of India Limited (NSE) has been duly paid.

33. APPRECIATION AND ACKNOWLEDGEMENT:

The Board wishes to place on record their sincere appreciation to all the DEVITiansand acknowledge with gratitude for the efforts made by them in for adopting the VisionMission and values of the Company. The board immensely thank all the Departments ofCentral and State Governments Tax Authorities Reserve Bank of India Ministry ofCorporate Affairs Securities and Exchange Board of India The National Stock Exchange ofIndia Limited (NSE) and other governmental bodies and look forward to their continuedsupport in near future. The board also places on record deep sense of appreciation andco-operation extended by bankers shareholders investors and all other stakeholdersother bodies or agencies for their continued and consistent support to the company duringthe year.

Place: - Ahmedabad FOR AND ON BEHALF OF BOARD OF DIRECTORS
Date: - 29th August 2019 PRANAV N. PANDYA
(Chairman)
(DIN:00021744)