The grading system are needed for the report generation for the examination conducted.Here GPA(Grade Point Average), CWA(Course Weighted Average),  CCE (only for institutes following CBSE,India format) and ICSE (for institutes follow ICSE, India) are the grading formats.
Bottom of the general setting's page there is an option to change the grading system-

Once the grading levels are defined, courses needs to be created. While creating a course, admin user needs to define which grading level is used to evaluate students of that course. Choose any one of the grading system and create the course. The grading system can be edited at a later point of time also if needed. But this should be done before examination reports are created.