Annual Report

Annual Report 2016-17

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The Annual Report 2016-17 CONTENT Board of Directors 2 Report of the Board of Directors & Annexures 3 Financial Statements: 3D PLM Software Solutions Limited Consolidated 43 3D PLM Software Solutions Limited Standalone 102 Annual Report & Financial Statements of Subsidiary: 3D PLM Global Services Private Limited Report of the Board of Directors & Annexures 156 3D PLM Global Services Private Limited Financial Statements 166 Safe Harbour Provision Certain statements in this report concerning our future growth prospects are forward looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in IT Services including those factors which may affect our cost advantage, wage increases in India, our ability to manage our international marketing and sales operations, reduced demand for technology in our key focus areas, disruptions in telecommunications networks, liability for damages on our service contracts and product warranty, the success of the companies in which the Company has made strategic investments, withdrawal of governmental fiscal incentives, political instability, legal restrictions on acquiring companies outside India, and unauthorized use of our intellectual property and general economic conditions affecting our industry. The Company may, from time to time, make additional written and oral forward looking statements and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company. 1

The Board of Directors: MANU PARPIA ANITA RAMACHANDRAN DOMINIQUE E. FLORACK DAVID DE MUER DIDIER GAILLOT VARGHESE THOMAS SAMSON KHAOU Chairman, Non-Executive, Non-Independent Non-Executive, Independent Non-Executive, Non-Independent Non-Executive, Non-Independent Non-Executive, Non-Independent Non-Executive, Independent Non-Executive, Non-Independent Alternate Director Executive officers SUDARSHAN MOGASALE VISHWANATH SHET SUNIPA GHOSH Manager & CEO Chief Financial Officer Company Secretary and Compliance Officer Board Committees Audit Committee: ANITA RAMACHANDRAN DIDIER GAILLOT VARGHESE THOMAS Chairperson Member Member Corporate Social Responsibility Committee: MANU PARPIA DIDIER GAILLOT VARGHESE THOMAS Chairman Member Member Nomination and Remuneration Committee: ANITA RAMACHANDRAN DIDIER GAILLOT MANU PARPIA VARGHESE THOMAS Chairperson Member Member Member Stakeholder Relationship Committee: DIDIER GAILLOT MANU PARPIA ANITA RAMACHANDRAN VARGHESE THOMAS Chairman Member Member Member Auditors: S.R. Batliboi & Associates LLP, Chartered Accountants Registrar and Share Transfer Agent: Link Intime India Private Limited C-101, 247 Park, LBS Marg, Vikhroli West, Mumbai 400083 Tel No. 91 22 4918 6000; Fax No. 91 22 4918 6060; 2

The Annual Report 2016-17 Report of the Board of Directors To The Members, 3D PLM Software Solutions Limited The Directors have pleasure in presenting their Report on the business and operations of the Company for the year ended March 31, 2017 I. FINANCIAL STATEMENT AND RESULTS: 1. Financial Results: Your Company s financial performance for the year under review has been encouraging and is summarised below: (Figures in Rs. Lakhs) PARTICULARS Consolidated Standalone FY17 FY16 FY17 FY16 Net Sales 40801.16 33,599.80 34949.68 30,050.97 Total Expenses other than Depreciation & Finance Cost 30179.37 25,961.40 25800.66 23,061.82 Profit from Operations before Other Income, Finance Cost & Exceptional Items 10621.78 7,638.40 9149.01 6989.16 Depreciation 2564.98 2,307.94 2288.07 2,084.51 Profit from Operations before Other Income, Finance Cost & Exceptional Items 8056.80 5,330.46 6860.94 4,904.65 Foreign Exchange Gain/ (Loss) 1316.73 3,108.84 1378.70 3,132.51 Other Income 520.58 348.00 539.54 380.73 Profit before Finance Cost & Exceptional Items 9894.11 8,787.71 8779.18 8,417.89 Finance Cost 0-0 - Profit Before Tax 9894.11 8,787.71 8779.18 8,417.89 Tax Expense 2980.09 2,901.82 2983.81 2,894.88 Net Profit for the period 6914.02 5,885.89 5795.35 5523.01 Appropriation Surplus as at end of previous year 11300.42 13,287.43 10988.31 13,329.89 Add: Net Profit for the year 6914.02 5,885.89 5795.35 5523.01 Available for appropriation 18214.44 19,173.32 16783.49 18,852.90 Less: Dividend 0 6,162.23 0 6,162.23 Less: Tax on distributed profits 0 1,254.49 0 1,254.49 Less : Adjustment pursuant to revision in useful life of assets (Net of tax impact) 0-0 - Less: Transfer to General Reserve 0 570.00 0 570.00 Total Appropriation 0 7,986.72 0 7,986.72 Surplus Carried Forward 18214.44 11,186.60 16783.49 10,866.18 2. Operations [Nature of Business]: 3D PLM is the R&D center of Dassault Systèmes (3DS). We have been continuing to work to strengthen our activities and building synergies in what we do. 3D PLM works on 8 major software Brands of 3DS, viz, ENOVIA, CATIA, 3DVIA, SIMULIA, SOLIDWORKS, DELMIA, GEOVIA and 3DEXCITE. In the last financial year, we have added new team: BIOVIA There was no change in nature of business of the company during the year. Company still contributing in below areas: Product Development: Support Dassault Systèmes in development of products in the areas mentioned above. Testing & Quality Assurance: Our Product Testing & Quality Assurance teams are an integral part of our development process. They ensure that our software products are thoroughly tested at every stage. Customer Support: The Customer Support team resolves customer queries, suggests workarounds, and advises best practices to global customers of Dassault Systèmes products. 3

Product Documentation: With each new release, our technical publications team develops and delivers user assistance, videos, and knowledge articles that enable our customers to stay updated. Courseware Development: Our Learning Solutions team creates best-in-class learning content & learning software. The learning content is developed by a highly skilled team of technical domain specialists, subject matter experts, instructional designers & writers. Additionally, our trainers team provides training support to a global network of partners. 3. State of the Company s Affairs: This year has been excellent year for 3DPLM. All the R&D deliveries were met as per plan without any significant issues. We have started a new R&D team to develop the products for BIOVIA. We have also grown in our Business Application Processing Team (BAPS), IT applications team and rest of the R&D as well. Subsidiary of 3DPLM, 3DPLM Global Services (3DGS), is also doing well and growing as per plan Operationally, we have done fairly well with a growth of 9.8% in revenues (in INR) and 5 % growth in Profit Before Taxes (PBT). During the year company has added 195 employees (net additions). It had voluntary employee turnover of 7.8% which is much lower than Industry in general. 4. Report on Performance of Subsidiary: A statement containing salient features, performance and financial position of each of the subsidiaries for the year ended March 31, 2017 is attached and marked as Annexure I (AOC-1) which forms part of this Report. The entire set of subsidiary financials will be kept ready for inspection at the registered office and the same will be displayed on the Company s website, in accordance to the requirements of the Act. The Board has approved formation of a wholly owned subsidiary Company with charitable objectives as per provisions of section 8 of the Companies Act, 2013. 5. Composite Scheme of Arrangement and Amalgamation during the year under review: During the year under review, the Company has undergone an amalgamation procedure pursuant to the High Court approved Composite Scheme of Arrangement and Amalgamation amongst Geometric Limited, HCL Technologies Limited and the Company, and their respective shareholders and creditors, pursuant to the provisions of Sections 391 to 394 read with Section 100 of the Companies Act, 1956 or under Section 230 to 234 of the Companies Act, 2013 and other applicable provision, if any, of the Companies Act, 1956 and/or Companies Act, 2013 & the relevant provisions made thereunder [the Scheme ]. The Scheme has become effective on March 2, 2017. Pursuant to the effectiveness of the Scheme, the equity shareholding of the Company is now owned by Dassault Systemes S. E. and its affiliate, Dassault Systemes Americas Corp. In consideration of the amalgamation of Geometric Limited s remaining undertaking with the Company, as per the terms of the Scheme, the Company has during the year in review, issued and allotted (i) 55,844,179 Redeemable Preference Shares of face value of Rs. 68/- each ( RPS ) to the resident shareholders of the erstwhile Geometric Limited, on a 1:1 ratio; and (ii) 148,291 equity shares of face value of Rs. 10/- each to the non-resident shareholders of the erstwhile Geometric Limited, on a 1793:24 ratio ( Scheme Equity Shares ). The Scheme Equity Shares were subsequently purchased by Dassault Systemes S. E. at a price of Rs. 5080.30 per share, as envisaged by the Scheme. The RPS issued by the Company pursuant to the Scheme are listed on the BSE Limited. The approval for listing from BSE Limited was received on May 5, 2017. In accordance with the terms of the Scheme, the RPS are redeemable on the expiry of 15 (fifteen) months from the date of allotment, and each RPS shall be redeemable at par. As per the terms of the Scheme, any holder of the RPS ( RPS Holders ) shall have the right but not an obligation to request the Company for redemption of the RPS held by such person ( Redemption Option ) up to a period of 15 (fifteen) days prior to the end of every successive period of 3 (three) months from the date of allotment of the RPS (each such period, a Quarterly Redemption Period ) 4

The Annual Report 2016-17 In connection with the foregoing, the first Quarterly Redemption Period was completed on June 19, 2017 and the redemption payout in respect of the RPS tendered during the first Quarterly Redemption Period was completed by July 4, 2017. The subsequent redemption schedules in respect of the RPS, as set out in the advertisement dated April 28, 2017, issued by the Company, published in Business Standard [English and Hindi editions] and Mahasagar [Marathi] on Friday, April 28, 2017, are as hereunder: Quarterly Redemption Period Last Date for Receipt of Redemption Request from Holder(s) of Redeemable Preference Share(s) Last Date for Payment First March 20, 2017 - June 19, 2017 June 4, 2017 July 4, 2017 Second June 20, 2017 September 19, 2017 September 4,2017 October 4, 2017 Third September 20, 2017 December 19, 2017 December 4, 2017 January 3, 2018 Fourth December 20, 2017 March 19, 2018 March 4, 2018 April 3, 2018 March 20, 2018 to June 19, 2018 Not Applicable shall be compulsorily redeemed within 30 days July 19, 2018 The integration of 3DPLM Software Solutions Limited into Dassault Systèmes as a result of the Amalgamation has marked the strategic next phase in the contribution of 3DPLM Software Solutions Limited in Dassault Systemes strategic research and development operations. 6. Dividend: With a view to conserve resources, your Directors have thought it prudent not to recommend any dividend for the financial year under review. 7. Transfer to Reserves: The Board of Directors has not recommended transfer of any amount of profit to reserves during the year under review. Hence, the entire amount of profit for the year under review has been carried forward to the Statement of Profit and Loss. An amount of Rs. 5795.35 lakhs is proposed to be carried forward to the Statement of Profit and Loss. 8. Revision of Financial Statement: There was no revision of the financial statements for the year under review. 9. Deposits: The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ( the Act ) read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Act is not applicable. 10. Disclosures under Section 134(3)(l) of the Companies Act, 2013: No material changes and commitments which could affect the Company s financial position, have occurred between the end of the financial year of the Company and date of this report, except the following changes in securities issued by the Company: The Company has redeemed 23,426,585 redeemable preference shares (RPS) by July 4, 2017, thereby reducing the RPS capital to Rs. 2,204,396,392 constituting of 32,417,594 RPS of Rs. 68/- each. Further, the Company issued and allotted 246,000 Compulsorily Convertible Preference Shares of Rs. 5400/- each to the equity shareholders of the Company, i.e. Dassault Systemes S. E. and Dassault Systemes Americas Corp. on June 29, 2017. 11. Disclosure of Internal Financial Controls: The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. 12. Disclosure of Orders passed by Regulators or Courts or Tribunal: No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company s operations in future. 5

13. Particular of Contracts or Arrangement with Related Parties: The details of transactions/contracts/arrangements entered by the Company with related party(ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review, are furnished in Annexure II (AOC-2) forms part of this Report. 14. Particulars of Loans, Guarantees and Investment: Particulars of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, are given in the notes to the financial statements provided in this Annual Report. 15. Disclosure under Section 43(a)(ii) of the Companies Act, 2013: The Company has not issued during the financial year under review any shares with differential rights and hence no information as per provisions of Section 43(a) (ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. 16. Disclosure under Section 54(1)(D) of the Companies Act, 2013: The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1) (d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. 17. Disclosure under Section 62(1)(B) of the Companies Act, 2013: The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. 18. Disclosure under Section 67(3) of the Companies Act, 2013: During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished. II. 6 MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL 1. Directors & Key Managerial Personnel: Mr. Ajay Mehra resigned from the Board of the Company w.e.f. December 8, 2016. Mr. Varghese Thomas was appointed as Independent Additional Director of the Company on January 10, 2017 We have received a letter from the shareholder of the Company, Mr. Sudarshan Mogasale along with requisite deposit amount recommending Mr. Varghese Thomas for confirmation as Director of the Company at the ensuing Annual General Meeting. Mr. Manu Parpia, Mr. David De Muer and Mr. Didier Gaillot, Directors of the Company who were appointed at the AGM in 2014 by way of cumulative voting by proportional representation, are proposed to be appointed at the ensuing Annual General Meeting. We have received letters from the shareholders of the Company, Mr. Milind Shastri, Mr. Rajiv Naithani and Mr. Manoj Bhat, along with requisite deposit amounts recommending Mr. Manu Parpia, Mr. David De Muer and Mr. Didier Gaillot respectively for re-appointment as Directors of the Company at the ensuing Annual General Meeting. The aforesaid appointments of Mr. Varghese Thomas, Mr. Manu Parpia, Mr. David De Muer and Mr. Didier Gaillot, shall be placed before the shareholders for confirmation as Director of the Company at the ensuing Annual General Meeting, as stated in the Notice for the Annual General Meeting, appended herewith. Mr. Samson Khaou was appointed as an Alternate Director to Mr. Didier Gaillot at the Board meeting held on July 31, 2017. Ms. Pallavi Pathak resigned as Alternate Director to Mr. Manu Parpia, Director of the Company at board meeting held on January 13, 2017, as per the provisions of Section 161(2) of the Companies Act, 2013. Mr. Vishwanath Shet, Chief Financial Officer has been confirmed as Key Managerial Personnel with effect from March 17, 2017.

The Annual Report 2016-17 Ms. Sunipa Ghosh has been appointed as Company Secretary with effect from March 17, 2017. The Members accorded approval at the Extra-ordinary General Meeting held on March 20, 2017, for a commission not exceeding 1% of the net profits of the Company per annum computed in the manner prescribed in Section 197(8) of the Companies Act, 2013, in respect of the profits for each of the two financial years commencing from April 1, 2016, to be paid to Mrs. Anita Ramachandran, Mr. Varghese Thomas and Mr. Manu Parpia, Non-Executive Directors of the Company, who are not in whole time employment of the Company, such amounts or in such proportions and in such manner as may be recommended by the Nomination and Remuneration Committee and determined by the Board of Directors (or any committee thereof for the time being) and that the Commission paid to each of the Non-Executive Directors of the Company pursuant to this resolution shall be in addition to the fees for attending Meetings of the Board or any committee thereof which each such Non-Executive Director may be entitled to receive. The details of commission payable and sitting fees paid to the Non-Executive Directors for the financial year 2015-16 are summarized below:- Name of the Director Commission (Rs.) Ms. Anita Ramachandran 1,87,500 Mr. Manu Parpia 1,87,500 Mr. Varghese Thomas 1,87,500 Total 5,62,500 2. Statement on declaration given by Independent Directors: The Company has received declarations from all the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-à-vis the Company. 3. Disclosures related to Board, Committees and Policies: (i) Board Meetings: The dates on which the Board of Directors met during the financial year under review are April 1, 2016, April 18, 2016, July 21, 2016, October 18, 2016, January 13, 2017, March 9, 2017 and March 17, 2017. (ii) Directors Responsibility Statement: The Board of Directors of the Company confirms that: a) in the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ending on March 31, 2017 and of the profit of the Company for the year ended on that period; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; e) the directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. (iii) Nomination and Remuneration Committee: The Nomination and Remuneration Committee of Directors was constituted by the Board of Directors of the Company in accordance with the requirements of Section 178 of the Act. 7

The composition of the committee is as under: 1. Mr. Didier Gaillot, Chairman, 2. Ms. Anita Ramachandran, Member 3. Mr. Varghese Thomas, Member 4. Mr. Manu Parpia, Member The Board has, in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The Nomination & Remuneration Committee has met once during the year on July 31, 2016. Nomination & Remuneration Policy of the Company is available on the Company s website and can be accessed on the website i.e. www.3dplmsoftware.com. (iv) Audit Committee: The Board has constituted the Audit Committee of Directors in pursuance to the provisions of Section 177 of the Companies Act, 2013. The composition of the committee is as under: 1. Mrs. Anita Ramachandran, Chairperson 2. Mr. Didier Gaillot, Member 3. Mr. Varghese Thomas, Member During the year under review, the Board of Directors of the Company had accepted all the recommendations made by the Audit Committee. The Audit Committee has met on the following dates during the year under review are April 1, 2016, April 18, 2016, July 21, 2016, October 18, 2016 and January 13, 2017. (v) Corporate Social Responsibility Committee: As per the provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee as under: 1. Mr. Manu Parpia, Chairman 2. Mr. Didier Gaillot, Member 3. Mr. Varghese Thomas, Member During the year under review, the Corporate Social Responsibility Committee has met on July 21, 2016 and January 25, 2017. The Board of Directors of the Company has approved CSR Policy based on the recommendation of the CSR Committee. The Company has initiated activities in accordance with the said Policy, the details of which have been prescribed in Annexure III. The CSR Policy of the Company is available on the Company s web-site and can be accessed on the website i.e. www.3dplmsoftware.com. The Company collaborated with third party implementation agencies and spent part of the prescribed amount towards CSR during FY 2016-17. A detailed report on the CSR activities of the Company is enclosed as Annexure IV. 8

The Annual Report 2016-17 (vi) Stakeholders Relationship Committee: The Board has constituted the Stakeholders Relationship Committee of Directors on April 25, 2017 in pursuance to the provisions of Section 178 of the Companies Act, 2013. The composition of the committee is as under: 1. Mr. Didier Gaillot, Chairman 2. Mr. Manu Parpia, Member 3. Mr. Varghese Thomas, Member 4. Ms. Anita Ramachandran, Member (vii) Development and Implementation of a Risk Management Policy: The Board of Directors of the Company has developed and implemented Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company s businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. (viii) Internal Control Systems: Adequate internal control systems commensurate with the nature of the Company s business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations, and that all assets and resources are acquired economically, used efficiently and adequately protected. (ix) Disclosure under Section 197(12) of the Companies Act, 2013 and Other Disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules, 2014: III. AUDITORS AND REPORTS: The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review has been marked as Annexure V. The matters related to Auditors and their Reports are as under: 1. Observations of Statutory Auditors on Accounts for the year ended March 31, 2017: The Auditors report for the financial year ended March 31, 2017 does not contain any qualification, reservation or adverse remark. The Auditors Report is enclosed with financial statements in this Annual Report. 2. Fraud reporting: During the year under review, there were no instances of material or serious fraud falling under Rule 13(1) of the Companies (Audit and Auditors) Rules, 2014, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit. 3. Secretarial Audit Report for the year ended March 31, 2017: Provisions of Section 204 read with Section 134(3) of the Companies Act, 2013, mandates to obtain Secretarial Audit Report issued by, Mr. Atul Gandhi, Practicing Company Secretary, in Form MR-3 for the financial year 2016-17 forms part to this report and has been attached as Annexure VI. The said report does not contain any observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. 4. Ratification of Appointment of Auditors: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. S. R. Batliboi & Associates LLP, Chartered Accountants, (Firm Registration No. 101049W) the Statutory Auditors of the Company have been appointed for a term of 5 years i.e. from the conclusion of the 13th Annual General Meeting until the conclusion of the 18th Annual General Meeting at the Annual General Meeting held on 9

July 16, 2014, subject to ratification at every Annual General Meeting. Accordingly, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a certificate from the said Auditors confirming that their appointment, if ratified, would be within the prescribed limit under Section 139 of the Companies Act, 2013 and that they are not disqualified to act as the Auditors and are eligible to continue to hold office as Statutory Auditors of the Company. Your Directors recommend the ratification of appointment of M/s. S. R. Batliboi & Associates LLP, Chartered Accountants as the Statutory Auditors of the Company. IV. OTHER DISCLOSURES Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: 1. Extract of Annual Return: Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2017 made under the provisions of Section 92(3) of the Act is attached as Annexure VII Form MGT-9 which forms part of this Report. 2. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo: The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in Annexure VIII which forms part of this Report. 3. Sexual harassment: The Company has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace and has also established Investigation and Redressal Committee, as stipulated by The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules thereunder. During the year under review, no complaints in relation to such harassment at workplace have been reported. V. ACKNOWLEDGEMENTS: Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers, business partners/associates, financial institutions and Central and State Governments for their consistent support and encouragement to the Company. On behalf of the Board of Directors, Manu Parpia (DIN 00118333) Chairman Sudarshan Mogasale (PAN-AAXPM5923B) Manager and CEO July 31, 2017 Mumbai 10

The Annual Report 2016-17 Annexure I - Board s Report Form AOC - I (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiary/ associates companies/joint Ventures Part A - Subsidiaries (Amount in Rs. except % of shareholding) 1. Name of the subsidiary 3D PLM Global Services Private Limited March 31, 2017 2. Reporting period for the subsidiary concerned, if different from the holding company s reporting period 3. Reporting currency and Exchange rate as on the last date of the relevant Financial INR year in the case of foreign subsidiaries 4. Share capital 99,100,000.00 5. Reserves & surplus 149,416,066.00 6. Total assets 310,600,791.00 7. Total Liabilities 310,600,791.00 8. Investments 52,732,224.00 9. Turnover 586,833,836.00 10. Profit before taxation 111,493,432.00 11. Provision for taxation (373,352.00) 12. Profit after taxation 111,866,784.00 13. Proposed Dividend - 14. % of shareholding 100.00 On behalf of the Board of Directors Manu Parpia Sudarshan Mogasale (DIN: 00118333) (PAN: AAXPM5923B) Director Manager and CEO Place: Mumbai Date: April 25, 2017 Annexure II - Board s Report Form AOC - 2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014) This form pertains to the disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm s length basis: All the transactions with related parties are in the ordinary course of business and on arm s length basis. 2. Details of material contracts or arrangement or transactions at arm s length basis: (a) Name(s) of the related party : Dassault Systemes SE and its subsidiaries (b) Nature of relationship : Associate-Substantial Interest Party (c) Nature of contracts/arrangements/transactions: : Sale of Services (d) Duration of the contracts / arrangements/ transactions : April 1, 2016 - March 31, 2017 (e) Salient terms of the contracts / arrangements/ transactions : Based on transfer pricing guidelines (d) Amount (Rs.) : 3,694,967,510 (e) Date(s) of approval by the Board : July 31, 2017 On behalf of the Board of Directors Manu Parpia (DIN 00118333) Director Sudarshan Mogasale (PAN: AAXPM5923B) Manager and CEO Place: Mumbai Date: July 31, 2017 11

1. PREAMBLE: At 3DPLM Software Solutions, we are committed to the UDAAN vision of giving back to the society and help inclusive growth of deprived community. Our strategic Corporate Social Responsibility (CSR) projects are aimed at achieving UDAAN goals and have helped us build a reputation of being one of the most socially and environmentally responsible companies in India. 2. PURPOSE: The key purpose of this policy is to: Achieve positive, sustainable change in the community. Utilize company assets (available skill sets and infrastructure) for the benefit of the underprivileged community. Encourage voluntary efforts by employees and their families. 3. POLICY STATEMENT: The policy focuses on addressing basic social, economic, environmental and economic needs of the marginalized/ underprivileged sections of the society. We adopt an approach that integrates the solutions to these problems into the strategy of the company, to benefit the communities at large and deliver social and environmental impact. 4. GOVERNANCE STRUCTURE: We have constituted a robust and transparent governance structure to oversee the implementation of our CSR Policy, in compliance with the requirements of Section 135 of the Companies Act, 2013. 12 Annexure - III Corporate Social Responsibility Policy 4.1 CSR Committee The CSR governance structure of 3DPLM will be headed by the CSR committee. 4.1.1CSR Committee Members This committee will report to the Board of the Company, and will comprise of: Mr. Manu Parpia- Director Mr. Didier Gaillot - Director Mr. Varghese Thomas- Director 4.1.2 Responsibilities Formulate and recommend to the Board a CSR Policy and activities to be undertaken Recommend the amount of expenditure to be incurred on the activities Monitor the CSR Policy from time to time 4.2 Management Committee The Management Committee is responsible for ensuring the smooth execution of all the CSR projects within the company. The committee will report to the CSR Committee and will comprise of: Name Location Mr. Sudarshan Mogasale Pune Mr. Vishwanath Shet Pune Mr. Hemant Gadgil Pune Mr. Rajiv Naithani Pune Mr. Yogesh Rawat Pune Mr. Huzefa Salim Pune Ms. Dharmi Ghodpade Pune 4.2.1 Responsibilities Responsible for the execution of the decisions taken by the CSR Committee; Ensure on-ground implementation of projects; Maintain schedule of expenses as per approved project-wise budgets Send periodic reports to the CSR Committee; and Meet every quarter to review the progress.

The Annual Report 2016-17 5. SCOPE OF CSR ACTIVITIES: CSR activities shall exclude activities undertaken in pursuance of normal course of business. This policy applies to all our CSR projects. On a periodic basis this policy will be reviewed and updated in line with relevant codes of corporate governance, international standards and best practices. The CSR activities may be undertaken by a registered trust or a registered society or a company established under Section 8 of the Companies Act, 2013 with such entities having a track record of at least 3 years in undertaking similar projects. Furthermore, the policy also fulfills the requirements of the CSR as per the Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Schedule VII of the said Act, namely :- i. eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water; ii. promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; iii. promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; iv. ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga; v. protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts: vi. measures for the benefit of armed forces veterans, war widows and their dependents; vii. training to promote rural sports, nationally recognised sports, Para-olympic sports and Olympic sports; viii. contribution to the Prime Minister s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; ix. contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government; x. rural development projects. xi. slum area development. Explanation. For the purposes of this item, the term slum area shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force. 5.1 Normal Course of Business 3DPLM is a specialist in the domain of Product Lifecycle Management (PLM) solutions for Dassault Systemes. 6. PRIMARY ACTIVITIES UNDER CSR: UDAAN i. Achieve positive, sustainable change in the community; ii. Utilize company assets (available skill set and infrastructure) for the betterment of the community; iii. Involve voluntary efforts by employees and their families; and iv. Education & Welfare and beneficiary group as Underprivileged Children and Youth with activities as under: Support classes for school children Financial support for Education and Child Welfare Books, Clothes and Toys collection for children Arranging Eco trips for children Career guidance for underprivileged youth Fund raising during natural calamities & otherwise Festival celebrations at orphanages Several One-Time Activities like Blood Donation Camps, Art Exhibitions, etc. 13

14 Skill Development: PRODUCT INNOVATION LABS As part of the Corporate Social Responsibility Initiative, 3DPLM is promoting Learn by Doing approach aimed at improving the skills & competency development for students in engineering colleges / universities. 3D PLM is involved in setting up of Product Innovation Labs in the premises of selected colleges, that are called as 3D PLM Product Innovation Labs. The purpose is to promote Learn by Doing approach, provide a platform for students to acquire integrated engineering, and multi-disciplinary skills, experiment with industry s best software / hardware to bring product innovation, provide handson practical experiences and industry exposure to the students and promote Make in India, Start-up culture amongst the engineering student. This will help the students Community to understand the power of Integrated engineering, advanced technologies like Systems Engineering, 3D printing, Robotics, Intelligent products, Engineering Automation, thereby make them Industry Ready. It will provide them industry exposure and motivate them to explore, design and prototype ideas to contribute for Smart Cities / Smart Villages, build Make in India, Start-up culture. 7. CSR EXPEDITURE: The Companies Act, 2013 has prescribed and recommended the expenditure amount on CSR to be 2% of the average net profits of the Company, during the three immediately preceding financial years. In accordance with the regulations, if the Company is unable to make this expenditure, appropriate reasons shall be provided in the CSR Report, which would form a part of the Annual Report of the Company. Such CSR expenditure shall include all expenditure including contribution to corpus, or on projects or programs relating to CSR activities approved by the Board on the recommendation of its CSR Committee, but does not include any expenditure on an item not in conformity or not in line with activities which fall within the purview of Schedule VII of the Act including all subsequent modifications notified. The amount of expenditure made on activities undertaken through CSR capacities built with our own personnel in collaboration with registered entities shall not exceed 5% of the total expenditure of the Company in one financial year. 8. CSR BUDGET: The total budget for the CSR projects will be decided in conformity to the aforementioned regulatory requirements and will form a part of the Annual Operating Plans, in accordance with the 3DPLM goals and priorities identified for each of the key focus areas by the CSR Committee. 9. PROJECT LIFE-CYCLE: At 3DPLM, CSR projects are strategically planned and managed. Following are the key stages of a project: 9.1 Project Approval The projects suggested by the Management Committee in consultation with the UDAAN team and company-level programme managers will be presented for the approval of the CSR Committee. 9.2 Implementation The final projects approved by the CSR Committee will be sent to the individual Programme Managers, who in turn will break down the projects into time-bound targets and action plans. These projects will either be self-implemented, in partnership with an Implementing Agency or in collaboration with other corporates. 9.3 Monitoring The individual Programme Managers will be responsible for monitoring approved projects, by methods which may include site visits, review meetings, progress reports etc. Periodic assessments have to be done to track data and monitor projects thereby ensuring transparency and efficiency in the implementation process. Projects will be evaluated against the predefined goals and milestones, together with the Implementing Agency (if any). The reports will be submitted to the Management Committee for the quarterly/half yearly review meetings. 9.4 Reporting The CSR committee, based on reports presented by the Management Committee, will annually publish report on the CSR projects as a part of the Director s report. The report will disclose information in the format as prescribed by the Section 135 of the Companies Act, 2013.

The Annual Report 2016-17 10. PARTNER QUALIFICATIONS: If a third party is employed to carry out the implementation of our CSR projects, the Board of 3DPLM will ensure that they have a clearly explained mission/vision and an established track record of three years in undertaking similar projects or programmes. The implementation agencies should be able to produce their latest audited annual reports and in case of an NGO, they should also be able to produce their registration forms according to under Section 12A of the Income Tax Act. (Section 80G of the Income Tax Act is preferable). 10. TREATMENT OF SURPLUSES: Any surplus generated from CSR projects undertaken by us will be tracked and channelized into our CSR corpus. These funds will be further used in development of the CSR projects and will not be added to the normal business profits. 15

- Overarching Philosophy 16 Annexure IV Board Report 3D PLM: CSR Report 2016-2017 3DPLM is a staunch supporter of the philosophy of inclusive growth. It has been our endeavour to give back to the society and to facilitate the integration of the marginalized communities into mainstream society and the economy. We particularly endorse the concept of equal access to education as we truly believe that this lays the foundation of a more inclusive society and this ideology has reflected in the work that we have undertaken. - CSR Policy For a long time now, 3D PLM has been undertaking a host of socially and environmentally responsible activities via the UDAAN initiative, which was largely an employee driven movement. We aspire to build a reputation of being one of the most socially and environmentally responsible companies in India. With the inclusion of mandatory CSR activities under the Companies Act in 2013, we have streamlined our body of work into a CSR Policy and have formalized our priorities, keeping in mind our overarching philosophy. We have identified key focus areas, keeping in mind the basic social, environmental and economic needs of our society. Our approach has then been to address these needs by incorporating necessary measures in the business strategy of the company, in a way that will benefit the communities at large and also achieve the desired social and environmental impact. While Corporate Social Responsibility is now mandated by law, we continue to execute it with passion. Our CSR Policy aims to: Achieve positive and sustainable change in the community via a three pronged approach of targeting social, economic and environmental needs. Undertake and implement projects in a manner that will yield long term, self-sustaining results. Go beyond monetary contributions and utilize company assets (available skill sets and infrastructure) for the benefit of the underprivileged community. Encourage voluntary engagement by employees. - The CSR Committee The aim of the CSR Committee is to develop and monitor the CSR Framework for the Company, identify suitable projects, lay down the guidelines for, and oversee the implementation of the projects. The Committee will also be responsible for measuring the success of the activities undertaken and for periodic CSR reporting. The CSR Committee at 3DPLM is constituted of 1) Mr. Manu Parpia, Director 2) Mr. Didier Gaillot, Director 3) Mr. Varghese Thomas, Independent Director - Average net profit of the Company for last three financial years The Company s average net profit for the prescribed year was Rs. 73.36 Crores, as computed under Sections 135 and 198 of the Companies Act, 2013. - Prescribed CSR Expenditure The Company s prescribed expenditure was Rs. 1.47 Crores towards CSR, for the year under review, as computed under Section 135 and 198 of the Companies Act, 2013. Additionally, the Company had brought forward the unspent amount of Rs. 1.02 Crores from last financial year 2015-16. - Sector Focus and Location of Spending In compliance with Schedule VII of the Companies Act 2013, 3DPLM has identified the following focus areas for its CSR spending for the financial year 2016-17: Promote education Generate awareness, and promote the use of new and innovative technology, via skill development, to empower the youth with appropriate skills that can enhance employability and include them in the workforce

The Annual Report 2016-17 Geographically, 3DPLM has undertaken CSR Projects in cities where it has a presence, including Pune and Bangalore - Details of CSR spent during the financial year Total CSR Expenditure for the financial year was Rs. 1.36 Crore. - Implementation Strategy and Partners 3D PLM has worked with third party implementation agencies to carry out the CSR Projects, as identified. Most of the agencies are pioneers in their field of work and 3D PLM has established long term relationships with them. The details of the initiatives funded are herewith mentioned along with names of the third party implementation agency: Sector Implementation Agency CSR Project Activities being supported Education (via UDAAN Initiatives) Hope for Children Foundation The Disha Darshan Project Improve the quality of life of under privileged children and help them integrate within the system, via a holistic approach including imparting life skills, teacher training etc. Thus far, 28 sessions have been concluded around various Interpersonal, Emotional, Self-Management & Thinking Skills Thus far, 704 children from 3 different schools benefitted FY 16 and 1000 children are undergoing this session Door Step School Every Child Counts - Parents Participation in Children s Education (ECC- PPCE) Supports the Education of Migrant laborer s children to enroll into mainstream Education Build Parents Capacity through awareness about RTE and involvement, to encourage them to send their children to school. Identify and remove all other barriers to enrollment and continuity of children s education. Supported construction of washrooms and drinking water tanks in 2 schools, Gopal Krishna Primary School and Zilla Parishad Primary School in Pune Thus far, 317 children have been enrolled from construction sites in identified areas Niwant Andha Mukta Vikasalaya (NAMV) Supporting the mission of NAMV at large Support the education and welfare of visually challenged children Evolved higher education possibility to 10 visually challenged people by supporting them with laptops Manonandana Trust Supporting the mission of Manonandana at large Assess & Evaluate special children s abilities and disabilities Conduct educative and interactive seminars/workshops for medical and paramedical professionals Create media to generate awareness & sensitization in the society-at-large about these children Contribute towards improving the quality of 62 life of specially-abled residential children through various welfare initiatives. Mahesh Foundation Support & Enhance Quality of Life of HIV/AIDS affected children Support the Education of HIV affected children Support in construction of a classroom for these children Sponsor 1000 School Kits Conduct Program for Orphans 17

Sector Skill Development Implementation Agency Lila Poonawalla Foundation 3DPLM Product Innovation Labs Social Innovation Start Up Incubator COEP (BHAU Institute) Details of the projects are as hereunder: a) Disha Darshan Project CSR Project Leading Indian Ladies Ahead Academia-Corporate Skill Development Initiative Entrepreneurship Skill Development Initiative Activities being supported Promoting Education of girls Empowerment of girls by providing support for overall personality Development Makes girls economically independent To sponsor the Girls education in the field of engineering of minimum 5 girls with help of 3DPLM Scholarship through the LPF. These girls will be called Lila Girls. Regularly conduct training programs for Lila Girls to make them empowered and confident Enhancing employability of engineering students by fostering a Learn by Doing approach. Four labs have been set up thus far and the standardization of the labs has been done. 2 more labs have been approved. Workshop for Professors of the colleges were conducted to orient/train them on Product Innovation Lab Four labs have been constructed and are functional and in a good state. 5 new student projects to be developed by each of the labs 5 live industry problems solved by each of the labs 5 working prototypes of new product ideas to solve India s problems 3 teams have been successfully incubated Technical and Business Mentoring provided Hope for the Children Foundation (HFCF) works to improve the quality of life of underprivileged children, their mothers and in turn, their communities in India. They target children who are either school dropouts or on the verge of dropping out of the formal system of education and gently help them integrate with the system. These children are usually from single mother from a very vulnerable background. Their holistic approach involves nutritional support in the form of daily meals, monthly food grains, medical aid, educational support and mentorship programs for the children; awareness and literacy programs, vocational training and other forms of humanitarian aid for the mothers. Their core programs are Atmanirbharata, Shiksha Ki Asha, Disha Darshan which are complimented by family counseling, monthly medical check-ups, recreational activity, various training & soft skill sessions, micro finance and micro insurance to help woman regain their independence. 3DPLM as a part of Corporate Social Responsibility Initiative decided to contribute to the Disha Darshan which has the following objectives: Improving the quality of life of under privileged children and helping them integrate with the system, via a holistic approach Instilling a set of interpersonal, thinking, emotional and self-management skills amongst children across identified schools in Pune Training staff to guide children towards this end 18