Dear Shareholders,

The Directors present the Eleventh Annual Report of 5paisa Capital Limited (‘your Company’) together with the Audited Financial Statements for the financial year ended March 31, 2018.

1. FINANCIAL RESULTS

A summary of the consolidated and Standalone financial performance of your Company, for the financial year ended March 31, 2018, is as under:

(Rs. in Millions)

* Previous periods figures have been regrouped / rearranged wherever necessary

2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF YOUR COMPANY’S AFFAIRS

Financial Year 2017-18 has been a good year for your Company. On a Macro level digital penetration in the country is expanding rapidly. Low cost smart phones, cheaper data and massive roll out of 4G services have led to millions of new internet users who are exploring various services digitally including Financial Services. Your Company’s positioning of a Low Cost Digital Provider fits perfectly in the evolving Digital Ecosystem. Our approach of keeping Lowest Cost of Service (Rs.10/0rder), Complete Paperless Trading Experience, Multi Product offering under One Umbrella, Usage of Advanced Analytics for personalised financial planning and world class Research & Advisory led to more than 5X growth in our Customer Acquisition. Our Customer acceptability was so good that in no time your company became one of the fastest growing Broking Company in the country.

Mobile has become the preferred platform of transaction for millions of Indians. Your Company is no different. We therefore take utmost interest in making our Mobile platform one of the best in the industry. We are happy to share that 5paisa mobile app is the fastest growing Mobile App in terms of Downloads and have also reached a Milestone of 1 Million Downloads with a Rating of 4 which only 3 other brokers have achieved till date.

During the year, the total income of your Company was up from of Rs.74.67 million to Rs.196.52 million The increase in income is on the back of aggressive expansion of retail Operations. The Company acquired more than 50,000 Customers on the back of value added and unparalleled product offering which helped in growth on Q-0-Q. Your company also invested heavily in Online Marketing, Branding and IT as a result expenses increased from Rs.238.47 million to Rs.528.62 million

During the year, your company got listed on BSE and NSE on November 16, 2017, post successful completion of Demerger process from erstwhile Parent Company i.e. IIFL Holdings Ltd. The demerger process was initiated post capital infusion of Rs.100 Cr. by parent Company in September 2016. In consideration of demerger of 5paisa Digital Undertaking, the existing shareholders of IIFL Holdings Limited on the record date i.e. October 18, 2017 received shares of the Company in the ratio of 1 equity share of the Company for every 25 equity shares of IIFL Holdings Limited held by them.

3. MACRO-ECONOMIC OVERVIEW

Global economy is looking up after a gap of seven years as economic activity remains buoyant across developed and emerging market economies. In its latest world economic outlook edition of April 2018, IMF has revised up GDP growth forecasts of most large economies for CY18 and CY19. It now expects World GDP growth to improve to 3.9% YoY in CY18 and CY19 from 3.8% YoY last year. Unemployment in US has fallen to historic lows and as a result wage growth has accelerated over the last few months. Outlook for Euro area also remains positive on the back of falling unemployment and improving consumer confidence. Also global trade volume has registered strong growth in the past few months.

The outlook for Indian economy also remains optimistic as the economy seems to be finally recovering from the twin shocks of demonetisation and implementation of GST. Most high frequency indicators are suggesting acceleration in growth, even as headline inflation remains benign. Strong growth in domestic air traffic, personal vehicle sales and rise in personal credit growth suggest that urban consumption is on a strong footing. Also drivers for capex cycle recovery are falling in place and we should see gradual increase in private sector capex over the coming quarters. PAT growth, one of the key factors for private sector capex decisions has seen a sharp improvement over last couple of quarters and this growth is likely to sustain. Recent improvement in capacity utilisation is also a positive for capex cycle. Also the overhang of unproductive assets is receding as share of capital work in progress in total assets has come off over last couple of years.

That said, the economy faces multiple risks especially on macro-economic stability that we have achieved in last few years. Rising commodity prices, especially of crude, could widen current account deficit and for the first time in four years, foreign direct investments would not be able to cover the deficit. Dependency on the more volatile foreign portfolio flows to cover the current account deficit would exert pressure on INR. While the decision to hike MSPs to 1.5 times the cost could provide support to rural consumption, it could also lead to acceleration in inflation and derail urban consumption. Also we have elections due in many large states during the course of the year followed by general elections in early next year. The uncertainty around election outcomes could make investors jittery. Investors prefer status quo and any change of government post elections could hurt investor sentiment, at least in the short run.

4. INDUSTRY OVERVIEW

Capital markets have been buoyant and both primary and secondary markets have seen healthy growth in activity over last one year. Corporates raised a record Rs.2 trillion from primary markets via IPOs, QIP, rights issue etc. in CY17. The domestic investors are now a dominant player in equity markets even as foreign portfolio flows have decelerated. Investments in mutual funds via ‘Systematic Investment Plan’ or SIPs have gained significant traction and collections via SIPs have more than doubled in last two years. Driven by rise in domestic investments and optimistic outlook for earnings growth, Indian equity indices hit all-time highs in early 2018.

Buoyant markets have accelerated trading volumes. Average daily cash trading volumes went up ~38% YoY to Rs.338 billion/day in FY18 from Rs.244 billion/day in FY17. Also the share of institutions (FII DII) edged up to 31.9% in FY18 from 29.7% in the previous year. However rise in transaction volumes has been offset by steadily falling yields. Yields have been declining over the past few years due to multiple factors including i) Rise of passive investment, ii) Rising participation of domestic funds that have lower yields and iii) the European and UK regulators have introduced Markets in Financial Instruments Directive or Mifid II norms from January 2018 and under these norms investors need to separately account for execution and research instead of the bundled cost model followed so far.

5. SCHEME OF ARRANGEMENT (DEMERGER OF 5PAISA DIGITAL UNDERTAKING)

During the year under review, the Hon’ble National Company Law Tribunal, Mumbai bench had vide order dated September 06, 2017 sanctioned the Scheme of Arrangement between IIFL Holdings Limited (‘Demerged Company’) and 5paisa Capital Limited, the (‘Resulting Company’) and their respective Shareholders (“the Scheme”). The Scheme inter alia provided for Demerger of 5paisa digital undertaking business from IIFL Holdings Limited to 5paisa Capital Limited. The effective date of the demerger was October 01, 2016.

Upon the Scheme coming into effect and in consideration of the transfer and vesting of the 5paisa digital Undertaking into the Company, 17,716,500 Equity Shares of Rs.10 each held by IIFL Holdings Limited in the Company were extinguished and cancelled and in lieu of the same, the equity shareholders of IIFL Holdings Limited whose name appeared in the Register of Members on October 18, 2017 were allotted one (1) equity share in 5paisa Capital Limited of Rs.10/- each credited as fully paid-up for every Twenty Five (25) equity share of Rs.2/- each fully paid-up held by such equity shareholders in IIFL Holdings Limited. Accordingly, 12,739,022 equity shares of Rs.10/- each of the Company were issued and allotted to the Eligible Shareholders of IIFL Holdings Limited on October 20, 2017. The equity shares of the Company so issued pursuant to the Scheme were listed and admitted for trading on BSE Limited (“BSE”) and National Stock Exchange of India Limited (“NSE”) with effect from November 16, 2017.

As per the Scheme, the Company transferred the assets and liabilities pertaining to demerged undertaking (5paisa digital Undertaking) at the respective carrying values as appearing in the books of accounts of IIFL Holdings Limited on October 01, 2016. The difference between the value of the assets and liabilities pertaining to demerged undertaking amounting to Rs.47,709,974 (after adjusting for the amount to the share capital) has been recognised as Capital Reserve in the books of accounts of the Company as on Appointed Date.

6. AWARDS AND RECOGNITIONS

- The Company won “Best Digital Start-up of the Year Award” by World Digital Marketing Congress.

- Your Company stood among Top 10 Brokers in terms of New Active Client and in 2nd position in Discount Broking.

7. DIVIDEND

In view of accumulated losses, your Directors have not recommended any dividend on Equity Shares for the year under review.

8. SHARE CAPITAL

During the year under review and in terms of aforesaid Scheme of Arrangement, 17,716,500 Equity Shares of Rs.10 each held by IIFL Holdings Limited in the Company were extinguished and cancelled and in lieu of the same, the Company allotted fresh 12,739,022 equity shares of Rs.10 each to the eligible shareholders whose name appeared in the Register of Members on October 18, 2017. The paid up equity share capital of the Company as on March 31, 2018 was Rs.127,390,220/- (12,739,022 equity shares of Rs.10/each).

9. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

During the year under review, the shareholders of the Company have approved two (2) Esop scheme(s) having a pool size of 600,000 options each under i.e. 5paisa Capital Limited Employee Stock Option Scheme 2017 and 5paisa Capital Limited Employee Stock Option Trust Scheme 2017. The Nomination and Remuneration Committee granted 220,000 options on January 29, 2018 to the eligible employees of the Company under 5paisa Capital Limited Employee Stock Options Scheme 2017.

There is no material change in Employees’ Stock Option Scheme during the year under review and the Scheme is in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 (“SBEB Regulations”). The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SBEB Regulations and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SEBI (Share Based Employee Benefits) Regulations, 2014 are provided on the website of the Company www.5paisa.com and the same is available for inspection by the members at the Registered Office of the Company during the business hours on working days except on Saturdays, Sundays and Public Holidays, up to the date of the Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Loans, Guarantees and Investments covered under the provisions of the Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report.

11. SUBSIDIARY COMPANY

During the year under review, the Company incorporated, a wholly owned subsidiary namely 5paisa P2P Limited on December 07, 2017. The 5paisa P2P Limited has filed the application with the Reserve Bank of India for obtaining the registration for Peer to Peer Lending and the approval is awaited.

As per the provisions of section 134 and 136 of the Companies Act, 2013 read with applicable Rules, Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable Accounting Standards, the Board of Directors had at their meeting held on April 17, 2018 approved the consolidated financials of the Company along with the Standalone financial statements. Copies of the Balance Sheet, Statement of Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of the subsidiary Company are not attached to the accounts of the Company for the financial year 2017-18. The Company will make these documents/details available upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and at the registered offices of the concerned subsidiary during the business hours on working days i.e. except on Saturdays, Sundays and Public Holidays. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent. The Annual Report of subsidiary will be uploaded on the website of the Company. As required by the Companies Act, 2013 and Accounting Standard - 21 (AS 21) issued by the Institute of Chartered Accountants of India, the Company’s consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiary. A report on the performance and financial position of the subsidiaries is provided in the prescribed form AOC-1 as “Annexure I”, which forms part of this Report.

The policy on determining the material subsidiary is available on the website of the Company at www.5paisa.com.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Directors:

The Board comprises of Mr. Prakarsh Gagdani and Mr. Santosh Jayaram as the Executive Directors, Dr. Archana Niranjan Hingorani and Ms. Nirali Sanghi as the Independent Directors of the Company.

Appointment

Mr. Santosh Jayaram was appointed as Additional Director and was further designated as Whole Time Director for the period of 3 years, subject to approval of the Shareholders w.e.f. January 11, 2018. Ms. Nirali Sanghi was appointed as an additional Director and was designated as an Independent Director subject to approval of the Shareholders w.e.f. January 11, 2018. She holds office as per her tenure of appointment mentioned in the Notice of the ensuing Annual General Meeting of the Company.

Confirmation

I. Mr. Krishna Iyer was confirmed as the Independent Director by the Shareholders of the Company in the 10th Annual General Meeting held on July 19, 2017 for a period of five years w.e.f. March 31, 2017.

II. Dr. Archana Niranjan Hingorani was confirmed as the Independent Director by the Shareholders of the Company in the 10th Annual General Meeting held on July 19, 2017 for a period of five years w.e.f. June 07, 2017.

Resignation

Mr. Mohan Radhakrishnan and Mr. Narendra Jain, the Non-Executive Directors and Mr. Krishna Iyer, the Independent Director resigned w.e.f. January 11, 2018 due to their pre occupation.

Declaration by Independent Directors

The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 as well as under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (“SEBI Listing Regulations”) and there has been no change in the circumstances which may affect their status as independent director during the year.

Retirement by Rotation

In accordance with Section 152 of the Companies Act, 2013 (“Act”) read with Article 157 of the Articles of Association of the Company, Mr. Prakarsh Gagdani is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment. The Board recommends the same for shareholders’ approval.

Re-appointment of Whole Time Director

The tenure of Mr. Prakarsh Gagdani as the Whole Time Director ends on December 21, 2018 and the Board recommends his re-appointment to Shareholders in the ensuing Annual General Meeting. The terms and conditions of the re-appointment are mentioned in the Notice of the ensuing Annual General Meeting of the Company.

b. Key Managerial Personnel:

As on March 31, 2018, Mr. Prakarsh Gagdani - Whole Time Director & Chief Executive Officer, Mr. Santosh Jayaram - Whole Time Director, Mr. Roshan Dave - Company Secretary & Compliance Officer and Ms. Ankita Lakhotia - Chief Financial Officer are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder.

During the year under review,

Mr. Prakarsh Gagdani, Whole Time Director was also designated as Chief Executive officer of the Company w.e.f. January 11, 2018 and Mr. Santosh Jayaram was appointed as Additional Director and further designated as Whole Time Director subject to approval of the Shareholders w.e.f. January 11, 2018.

Mr. Harshit Choudhary was appointed as a Company Secretary and Compliance Officer in place of Mr. Jayesh Sharma w.e.f. October 13, 2017. Mr. Harshit Choudhary, Company Secretary & Compliance Officer, resigned w.e.f. January 31, 2018 and in his place Mr. Roshan Dave was appointed as the Company Secretary & Compliance Officer of the Company w.e.f. February 01, 2018. These changes in the Key Managerial Personnel were due to internal re-structuring.

The Remuneration and other details of the Key Managerial Personnel for the year ended March 31, 2018 are mentioned in the Extract to the Annual Return in Form MGT-9 which is attached as “Annexure II” and forms a part of this report of the Directors.

14. MEETING OF DIRECTORS & COMMITTEE/BOARD EFFECTIVENESS

- Meetings of the Board of Directors

The Board met Five (5) times during the year to discuss and approve various matters including financials, appointment of auditor, review of audit reports and other board businesses. For further details please refer to the report on Corporate Governance.

- Committees of the Board

In accordance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board constituted the following Committees:

- Audit Committee

- Nomination and Remuneration Committee

- Stakeholders Relationship Committee

- Audit Committee:

During the year, the Audit Committee met Five (5) times. In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013, during the year, the Company has re-constituted the Audit Committee and details thereof have been provided in Corporate Governance Report. At present the Committee comprises of Dr. Archana Niranjan Hingorani as the Chairman, Ms. Nirali Sanghi and Mr. Prakash Gagdani as the Members of the Audit Committee.

The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committee met during the year under review and discussed on various matters including financials, audit reports and appointment of auditors. During the period under review, the Board of Directors of the Company accepted all the recommendations of the Audit Committee.

The terms of reference of Audit Committee and details of Committee meeting are provided in the Corporate Governance Report.

- Nomination and Remuneration Committee

During the year, the Nomination and Remuneration Committee met Four (4) times. The Company re-constituted the Nomination and Remuneration Committee and details thereof have been provided in Corporate Governance Report. At present, the Committee comprises of Ms. Nirali Sanghi as the Chairman and Dr. Archana Niranjan Hingorani and Mr. Prakarsh Gagdani as members of the Committee. Pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013, the Company is in process of appointing one more Non-Executive Director/ Independent Director who will also be nominated to Nomination Remuneration Committee.

The role, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same has been provided in the Corporate Governance Report.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Nomination and Remuneration policy in compliance with the aforesaid provisions for selection and appointment of Directors, KMP, senior management personnel of the Company. The said policy is stated in the Corporate Governance Report of the Company. The details of Committee meeting are provided in the Corporate Governance Report.

- Stakeholders Relationship Committee

During the year, the Stakeholders Relationship Committee met One (1) time. In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013, the Company has re-constituted a Stakeholders Relationship Committee and details thereof have been provided in Corporate Governance Report. The Committee comprises of Ms. Nirali Sanghi as the Chairman, Dr. Archana Niranjan Hingorani and Mr. Prakarsh Gagdani as the members of the Committee.

The role, terms of reference of the Stakeholders Relationship Committee are in conformity with the requirements of the Companies Act, 2013 and Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same has been provided in the Corporate Governance Report.

No complaints has been received from SEBI scores portal during the Financial Year 2017-18. The details of the Meeting are given in the Corporate Governance Report.

- Board Effectiveness

- Familiarisation Program for the Independent Directors

In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a Familiarisation Programme for Independent Directors to familiarise them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates business model etc. Details of the Familiarisation Programme are explained in the Corporate Governance Report and are also available on the Company’s website at http://www.5paisa.com.

- Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular no SEBI/CFD/CMD/CIR/P/2017/004 dated January 05, 2017, the Board of Directors has carried out an annual performance evaluation of its own performance, the Directors individually including Independent Directors based out of the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by Nomination and Remuneration Committee (“NRC”). The evaluation process, manner and performance criteria for independent directors in which the evaluation has been carried out by is explained in the Corporate Governance Report.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting held on March 29, 2018 reviewed the following:

- Performance of Non-Independent Directors and the Board as a whole

- Performance of the Chairperson of the Company.

- Assessed the quality, quantity and timeliness of flow of information between the Company’s management and the Board, which is necessary for the Board to effectively and reasonably perform their duties.

The Independent Directors expressed their satisfaction with overall functioning and implementations of their suggestions.

The evaluation process endorsed the Board Members’ confidence in the ethical standards of the Company, the cohesiveness that exists amongst the Board Members, the two-way candid communication between the Board and the Management and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities.

15. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with 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 at the end of the financial year and of the profit of the Company for 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 are operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

16. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal controls with reference to financial statements and operations and the same are operating effectively. The Internal Auditors tested the design and effectiveness of the key controls and no material weaknesses were observed in their examination. Further, Statutory Auditors verified the systems and processes and confirmed that the Internal Financial Controls system over financial reporting are adequate and such controls are operating effectively.

17. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company has put in place a policy for Related Party Transactions (RPT Policy), which has been approved by the Board of Directors. The policy provides for identification of RPTs, necessary approvals by the Audit Committee/Board/ Shareholders, reporting and disclosure requirements in compliance with Companies Act, 2013 and provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All contracts executed by the Company during the financial year with related parties were on arm’s length basis and in the ordinary course of business. All such Related Party Transactions were placed before the Audit Committee/ Board for approval, wherever applicable.

During the year, the Company has entered into any contract / arrangement / transaction with related parties, which considered as material in accordance with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same was also approved by the shareholders via postal ballot on January 25, 2018. The policy for determining ‘material’ subsidiaries and the policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on the Company’s website www.5paisa. com. You may refer to Note no. 26 to the financial statement, which contains related party disclosures.

The Company had not entered into any material contracts or arrangements or transactions under sub-section (1) of section 188 of the Act. Hence, Form AOC-2 disclosure is not required to be provided.

18. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return of the Company in form MGT - 9 is annexed herewith as “Annexure - II”.

19. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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

20. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for the year 2017-18. The Auditor had conducted the audit and their report thereon was placed before the Board. The Auditor in their report stated that the Nomination and Remuneration Committee consist of 3 members i.e. 2 Independent Director and 1 Executive Director w.e.f. January 11, 2018. As informed by the management, the Company is in process of appointing one more Non-Executive Director/Independent Director who will also be nominated to Nomination and Remuneration Committee. The said noting is self-explanatory. The report of the Secretarial Auditor is annexed herewith as “Annexure -III”.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The additional information on energy conservation, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is appended as “Annexure -IV” to and forms part of this Report.

22. RISK MANAGEMENT

Your directors, on a regular basis, (a) oversee and approve the Company’s enterprise wide risk management framework; and (b) oversee that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks. Your Company has in place various policies and procedures covering the business, operations, employees, finance & accounting, customer services which are approved by the Board.

Your Company has in place specialised internal audits on Broking and Depository Participant business as per the SEBI / Exchanges/ Depositories norms. The findings on Audit Reports are reviewed by the Audit Committee / Board at their periodical meetings and the reports are submitted to the Exchanges /Depositories.

Your Company’s management monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

The Company’s management systems, organisational structures, processes, standards and code of conduct together form the risk management governance system of the Company and management of associated risks.

23. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In compliance of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The Company has disclosed the policy at the website at https://www.5paisa.com.

24. PREVENTION OF SEXUAL HARASSMENT

Your Company recognises its responsibility and continues to provide a safe working environment for women, free from sexual harassment and discrimination. In Compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on prevention of Sexual Harassment of Women at workplace.

Your Directors further state that the during the fiscal year 2017-18, there were no complaints pending pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The following is reported pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

a) Number of complaints received in the year : 1

b) Number of complaints disposed off during the year : 1

c) Number of cases pending more than ninety days: Nil

d) Number of workshops or awareness programme against sexual harassment carried out:

The Company has conducted an online training for creating awareness against the sexual harassment against the women at work place.

e) Nature of action taken by the employer or district officer: The Company has taken the appropriate action on the said matter.

25. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in “Annexure - V”.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rules 5(2) and 5(3) of the aforesaid Rules, forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by any member of the Company at its registered office and at the registered offices of the subsidiary during the business hours on working days except on Saturdays, Sundays and Public Holidays. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

26. STATUTORY AUDITORS

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 (“Act”) and the rules made thereunder, the members at their 10th Annual General Meeting (“AGM”) held on July 19, 2017, had appointed M/s. V Sankar Aiyar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 109208W) as Statutory Auditor for a period of five years i.e. from the conclusion of 10th AGM till the conclusion of 15th AGM of the Company to be held in the year 2022 subject to ratification of their appointment at every AGM. Accordingly, the appointment of M/s. V Sankar Aiyar & Co., Chartered Accountants as Statutory Auditors of the Company is placed for ratification by the Members in the forthcoming AGM.

In this regard, the Company has received a certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, would be in accordance with the provisions of Section 141 of the Act. They have also confirmed that they hold a valid Peer Review Certificate issued to them by the Institute of Chartered Accountants of India (“ICAI”).

27. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

28. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

29. GENERAL

Your Directors state that during the financial year 2017-18:

1. The Company did not accept/renew any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under and as such, no amount of principal or interest was outstanding as on the balance-sheet date.

2. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

3. The Company has not issued any sweat equity shares during the year.

4. There are no significant and material orders passed against the Company by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.

30. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Government, Regulators, Stock Exchanges, Depositories, other statutory bodies and Company’s Bankers for the assistance, cooperation and encouragement extended to the Company.

Your Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. Our employees are instrumental in the Company to scale new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as shareholders is also greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Prakarsh Gagdani Santosh Jayaram

Whole Time Director & CEO Whole Time Director

(DIN: 07376258) (DIN: 07955607)

Date: April 17, 2018

Place: Mumbai