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Directors Report of Financial Technologies (India) Ltd. Company
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Directors Report of Financial Technologies (India) Ltd.

Mar 31, 2015

The Directors present the Twenty Seventh Annual Report of your Company together with the Audited Statement of Accounts for the year ended March 31, 2015.

FINANCIAL PERFORMANCE

Your Directors would like to inform you that because of the events occurred at National Spot Exchange Limited (NSEL) during the previous year, audit of NSEL Consolidated Financial Statements for the year ended March 31, 2013 (as amended) and for the year ended March 31, 2014 were delayed due to which the audited consolidated financial statements of the Company for the year ended March 31, 2013 (as amended) and for the year ended March 31, 2014 could not finalized on time. Since now Consolidated Financial Statement of NSEL are available, the Consolidated Financial Statements of your Company have been finalized and audited for the year ended March 31, 2013 (as amended), for the year ended March 31, 2014 and for the year ended March 31, 2015.

Financial Results standalone and Consolidated

(Rs. in lacs, except per share data) Particulars standalone Consolidated Current Year Previous Year Current Year Previous Year Previous Year 2014-15 2013-14 2014-15 2013-14 (as amended) 2012-13

Total Income 60,368.01 54,126.66 38,246.07 70,949.59 95,138.66

Total operating expenditure 27,471.95 24,881.27 47,466.15 67,903.17 62,697.22

EBITDA 32,896.06 29,245.39 (9,220.08) 3,046.42 32,441.44

Finance costs 2,266.12 3,053.82 2,634.17 8,176.96 9,799.95

Depreciation/ amortization 3,905.73 3,074.86 4,496.14 4,295.84 3,268.15

Profit / (Loss) before exceptional item and tax 26,724.21 23,116.71 (16,350.39)(9,426.38) 19,373.34

exceptional Item 24,282.09 (41,152.11) 65,631.14 94,436.33 -

Profit / (Loss) before tax 51,006.30 (18,035.40) 49,280.75 85,009.95 19,373.34

Provision for taxation 6,492.42 4,819.45 6,648.20 4,846.76 12,469.37

Profit after Tax/Net Profit for the year 44,513.88 (22,854.85) 42,632.55 80,163.19 6,903.97

Add: Net share of profit in associates (0.12) 6,347.53 10,097.89

Add: Net minority interest in profit of subsidiaries 39.25 440.03 339.61

Profit after Tax/Net Profit for the year 44,513.88 (22,854.85) 42,671.68 86,950.75 17,341.47

add: Balance brought forward from previous year 177,089.54 204,257.15 181,799.93 100,592.88 90,900.50

Balance available for appropria tion 221,603.42 181,402.30 224,471.61 187,543.63 108,241.97

Appropria tions

Final dividend (proposed) 2,303.93 921.57 2,303.93 921.57 921.57

Interim dividend 5,529.42 2,764.71 5,529.42 2,764.71 2,764.71

Tax on dividend 469.03 626.48 469.03 626.48 616.92

Transfer to General reserve - - 3,253.00

change in Jv holding - 1,419.82 -

Transfer to Statutory Reserve - 11.11 8.24

Transfer to Security Guarantee Fund - - 84.66

Transfer from General reserve (14,421.70) - -

Balance carried forward to Balance Sheet 213,301.04 177,089.54 230,590.94 181,799.93 100,592.88

earnings per share

Basic 96.60 (49.60) 92.61 188.70 37.63

Diluted 96.301 (49.60) 92.311 188.09 36.79

RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS

Standalone Financials:

- Revenue from operations for the year ended March 31, 2015 was at Rs. 16,103.11 lacs as compared to Rs. 33,471.49 for the year ended March 31, 2014.

- During the year, profit under exceptional items was Rs. 24,282.09 lacs compared to loss of Rs. 41,152.11 lacs in previous year. This includes (a) gain of Rs. 98,789.50 lacs on sale of investments in shares (net of expenses) including shares in MCX, NBHC and MCX-SX (b) provision for other than temporary diminution in the value of investments and loss on account of capital reduction in the investments of subsidiaries Rs. 73,226.82 lacs and (c) provision of Rs. 1,280.59 lacs towards doubtful loans and advances to and trade receivable from subsidiaries

- Your Company has reported profit before finance cost, depreciation, exceptional items and tax of Rs. 32,896.06 lacs for year ended March 31, 2015, compared to Rs. 29,245.39 lacs in the previous year

- Your Company has reported net profit after tax of Rs. 44,513.88 lacs for the year ended March 31, 2015 as compared to loss of Rs. 22,854.85 lacs in the previous year

Consolidated Financials

The consolidated Net Profit for the year ended March 31 2015 was at f 42,671.68 lacs against f 86,950.75 lacs in the previous year ended March 31, 2014 and f 17,341.47 lacs in the year ended March 31, 2013. Shareholders' funds as at the year ended March 31, 2015 was at Rs. 292,827.18 lacs as against f 256,087.69 lacs as at March 31, 2014 and f 176,289.99 lacs as at March 31, 2013.

BUSINESS OVERVIEW: FISCAL YEAR 2014-15

The year gone by has been challenging for your Company with the several legal cases due to the crisis at NSEL's trading platform. Your Company has the highest regard and faith in the Indian judiciary and continues to provide all assistance to every statutory authority in the country. Your Company is confident that truth will prevail and it will come out of the crisis soon. The crisis at NSEL's trading platform has had an adverse impact due to the various regulators declaring your Company "not ft & proper" to hold shares in an exchange which has been challenged before Hon'ble Bombay High Court and at various forums. Without prejudice to its legal rights and remedies, your Company has taken a decision to exit its investments in Exchange ventures both in India and globally. The exit of its investments in exchanges and low volume on the respective exchange has adversely impacted the revenue from Exchange technology on the one hand, but on the other hand, there is increase in income from disinvestments and thereby increase in cash reserves.

technology Business:

During the year, your Company re-negotiated the technology contract with MCX and Metropolitan Stock Exchange (formerly MCX-SX) and due to low volume on the respective exchange, the revenue of your Company was impacted. However, it is observed that during the past six months, the volume has picked up on the exchanges and recent announcement of making FT 3.0 the de facto 'powered by' technology augurs well for the future.

Divestments:

Without prejudice to its legal rights and remedies, your Company has successfully completed the divestments of its holdings in National Bulk Handling Corporation Limited (NBHC), Multi Commodity Exchange of India Limited (MCX) and Metropolitan Stock Exchange of India Limited (MSEI). In addition, your Company has entered into a definitive agreement to sell its entire stake in Bourse Africa Limited (BAL) and is in the process of selling its entire investment in Indian Energy Exchange Limited (IEX) along with an irrevocable, companywide, fully paid up, perpetual, non- encumbered, non-transferable, non-assignable, license of the Power ARMS Software installed in India, for internal use to IEX.

Business Outlook:

Your Company is going through challenging times as it tries to reinvent itself into a pure play technology Company. Post the crisis at NSEL trading platform, your Company has decided to grow on its core strength – innovation through technology. Your Company continues to be a market leader in the Member Technology business in India through its flagship product ODIN. On the Exchange Technology Business, your Company continues to provide technology to market leaders in its space such as MCX, MCX-SX and IEX etc.

Member Technology Business has witnessed a challenging year in 2014-15 in wake of the crisis at NSEL. However, the business is stabilizing and the Company expects business environment to improve in the coming years. With the upturn in the economy and favorable policy environment, Indian Capital markets are positioned for strong growth in the coming years. Your Company is well positioned to take advantage of the growth in the capital markets through its Member Technology Business.

Without prejudice to its legal rights and remedies, your Company took a strategic decision to exit the exchange/ regulated businesses both in India and around the world in light of the crisis at NSEL's trading platform. Since, the Exchange Technology Business was primarily catering to the exchanges seeded and nurtured by your Company, it became imperative for your company to restructure the business as a pure play technology service provider as it divested its stake in various exchanges. Your Company continues to provide technology to MCX, MCX-SX and IEX etc. in spite of divesting its stake in the respective companies.

Your Company believes that it can become a signifcant player in this space, given its proven pedigree in this space and relatively few players in the space.

New Vision and change of name:

The Board of Directors of the Company at its meeting held on August 08, 2015 have in-principle approved the change in name of the Company from "Financial Technologies (India) Limited" (FTIL) to "63 moons technologies limited" (63 moons). The said approval by the Board is subject to the approval by the Registrar of Companies, Chennai and the shareholders of the Company.

In the near past, your Company has exited its investments in financial exchanges and now in the revised context, your Company would be more focused on non-financial verticals like e-commerce, digital education, life science, sports and many others.

In November 2014, the Company had announced its founder's vision of "Digital India @ 2025", the engine driving the transformation of FTIL into making FT 3.0 the de facto 'powered by' technology partner of choice to create and develop digital ecology leveraging SMAC (Social Media Analytic and Cloud) technology stack. Hence it is imperative to give the Company a new name and identity that reflects the genesis of its business and the next phase of growth.

Jupiter, revered as the most powerful in ancient civilization is known to have 63 moons. 63 moons will endeavor to partner several emerging new-tech companies/innovations and start-ups in the sectors like e-commerce, digital education, sports, life sciences, and others. It is our endeavor to play a larger role and assume leadership in the digital ecology that will govern the growth of the future. 63 moons reflect the new FTIL.

The Company, as the Applicant/Owner, has already made applications in various classes for registration of Trade Mark "63 moons The new digital ecology".

Further details on the above are covered elsewhere in this report.

legal matters

In the wake of the crisis at NSEL, your Company has been made a party to several litigations over the last two years. Further, the Ministry of Corporate Affairs issued a draft order dated October 21, 2014 for amalgamation of your Company with NSEL under section 396 of Companies Act, 1956 and also fled a petition with Company Law Board under section 397 of Companies Act, 1956 seeking removal and supersession of the Board of your Company. Your Company has opposed the draft order for merger and has challenged the petition for removal and supersession of the Board in the Company Law Board. Your Company continues to defend itself in various other litigations fled against it. An interim order has been passed by the Company Law Board directing your Company not to sell/alienate or create third party rights in respect of its assets and investments. Your Company has challenged this interim order in the Hon'ble Madras High Court which has suspended the interim order save and except in respect of immovable properties of your Company.

The Economic Offences Wing ("EOW") had issued a letter to your Company inter alia restraining / restricting your Company from dealing with its assets. The Hon'ble Bombay High Court has granted a stay in respect of the direction of EOW in respect of the restraint / restriction on the dealing of assets.

No material changes and commitments have occurred after the close of the financial year till the date of this Report, which significantly affects the financial position of the Company.

Explanation to the Qualifications in auditor Report

Standalone Financial Statements: Audit Report on standalone financial statements:- The Management explanation for qualification made by the Statutory Auditors in their Independent Auditors Report dated May 22, 2015 on the Standalone Financial Statements for the year ended March 31, 2015 is as under:

With respect to qualification regarding Writ Petitions, Public Interest Litigations, Civil Suits which have been fled against the Company in relation to the NSEL event, wherein the Company has been made a party in the Writ Petitions and Civil Suits, these matters are pending before the Hon'ble Bombay High Court for adjudication. The Company has denied all the claims and contentions in its reply. There is no privity of contract between FTIL and the Petitioners. Based on legal advice, the management is of the view that the parties who have fled the W P, PIL and Civil Suits would not be able to sustain any claim against the Company. With respect to mention of First Information Reports in the same qualification, which are registered against various parties including the Company with the Economic Offences Wing of the Mumbai Police, Central Bureau of Investigation and MIDC, Police Station, Mumbai District, EOW has fled charge-sheets on January 06, 2014, June 04, 2014 and August 04, 2014 after investigation. It is pertinent to note that so far the Company has not been named in the said charge-sheets. EOW investigation is in progress.

Consolidated Financial Statements:

Audit Report on consolidated financial statements:- The Management explanation for qualifications made by the Statutory Auditors in their Independent Auditors Report dated May 22, 2015 on the Consolidated Financial Statements for the year ended March 31, 2015 are as under:

1. With respect to item no. 1 which pertains to the Company regarding Writ Petitions, Public Interest Litigations, Civil Suits which have been fled against the Company in relation to the NSEL event, wherein the Company has been made a party in the Writ Petitions and Civil Suits, these matters are pending before the Hon'ble Bombay High Court for adjudication. The Company has denied all the claims and contentions in its reply. There is no privity of contract between FTIL and the Petitioners. Based on legal advice, the management is of the view that the parties who have fled the W P, PIL and Civil Suits would not be able to sustain any claim against the Company. With respect to mention of First Information Reports in the same qualification, which are registered against various parties including the Company with the Economic Offences Wing of the Mumbai Police, Central Bureau of Investigation and MIDC, Police Station, Mumbai District, EOW has fled charge-sheets on January 06, 2014, June 04, 2014 and August 04, 2014 after investigation. It is pertinent to note that so far the Company has not been named in the said charge-sheets. EOW investigation is in progress.

2. With respect to item no. 2 which are pertaining to the qualifications made by the Statutory Auditors of a subsidiary viz National Spot Exchange Limited (NSEL) in their Independent Auditors Report on its Consolidated Financial Statements for the year ended March 31, 2015 which has been reproduced by the Statutory Auditors of the Company in their Independent Auditors Report (Auditors Report) dated May 22, 2015 on the Consolidated Financial Statements for the year ended March 31, 2015, the explanation given by the directors' of NSEL and its subsidiary "Indian Bullion Market Association Limited" (IBMA) are as under:

Qualification 2(a) in auditors Report:

"As stated in note no. 53 of the Consolidated Financial Statements pertaining to the issue of warehousing receipts and as per the explanations given by the Management, investigating agencies are investigating genuineness of the warehouse receipt issued by the Company. Its impact on financial statements, if any, can be ascertained only after investigations are concluded and order obtained from the court. Enforcement Directorate (ED) has applied provision of Prevention of Money Laundering Act, 2002 (PMLA) on defaulting members and the Company. Investigations are in progress as on the date of the Audit Report. In case of any adverse findings against the Company, the same may have an effect on the financial position of one or more financial years." [Refer note 68 of the consolidated financial statements of the FTIL Group]

Management response:

Investigating agencies are investigating genuineness of the warehouse receipts issued by the Exchange as well as the frauds perpetrated by the erstwhile senior officials of the Exchange. Impact on financials, if any, can be ascertained only after investigations are concluded and orders are obtained from Court.

Qualification 2(b) in auditors Report:

"As stated in note no. 56 read with note no. 1 to the Consolidated Financial Statements which refers to the matter pertaining to regulatory framework for Spot Exchange and related compliance issues with respect to the Exemption Notification No. S.O. 906(E) dated June 5, 2007 (issued by the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, Government of India, under section 27 of the Forward Contracts (Regulation) Act, 1952). The doubts have been raised as to alleged non-compliance of two of the conditions specified in the said Exemption Notification. While the Company has responded to Show Cause Notice (SCN) dated April 27, 2012 vide letter dated May 23, 2012 and further correspondences made in August, 2012 and July, 2013, the adjudication thereof is pending from respective authorities and hence the possible consequences arising out of same on the Company are not presently ascertainable. It is further stated that the Ministry of Finance, the Government of India, has withdrawn the aforesaid exemption notification w.e.f. September 19, 2014." [Refer note 73 of the consolidated financial statements of the FTIL Group]

Management response:

The Government by Gazette Notification SO 2529(E) dated 19 September, 2014 has withdrawn the Gazette Notification SO 906(E) dated 5 June, 2007 (by which NSEL was granted exemption u/s. 27 of the FCR Act, 1952 for trading of forward contracts of one day duration) with immediate effect and consequently the notification SO 228(E) dated 6 February, 2012 and notification SO 2406(E) dated 6 August, 2013 ceased to be in force w.e.f. 19 Sep, 2014, as informed to the NSEL by the FMC vide letter dated 5 November, 2014. As the reply to the said SCN has been given and actions, if any, required due to SCN has been taken, including withdrawal of the exemption itself, NSEL do not foresee any further consequences on the SCN. Further, neither FMC nor DCA has held NSEL guilty of having violated any of the conditions of the exemption notification dated 5 June, 2007, which was the subject matter of the SCN.

Qualification 2(c) in auditors Report:

"As stated in note no. 60 & 61 to the Consolidated Financial Statements, the Company has been served with notices/ letters/summons from various statutory authorities/ regulators/government departments and some purported aggrieved parties. There are some Writ Petitions, Public Interest Litigations, Civil Suits including in representative capacity fled by and against the Company. Such matters against the Company are either in progress or sub judice before different forums. The Company may have civil/ criminal liability arising out of one or more of the proceedings initiated against the Company." [Refer note 75 and 76 of the consolidated financial statements of the FTIL Group]

Management response:

Since all matters are sub-judice, impact on financial statement, if any, cannot be ascertained at this stage. NSEL is taking all steps to defend its position and currently unable to quantify the impact, if any.

Qualification 2(d) in auditors Report:

"As stated in note no. 58 & 59 to the Consolidated Financial Statements the issue of legality of contracts traded on the Spot Exchange, the management has clarified that all the contracts carried out on the Exchange were proper and in consonance with the local applicable laws and that there was no violation thereto. As far as availability of commodities are concerned, it is stated that there were systems and processes in place for deposit of commodities and generation of warehouse receipts and allocation of the same. NSEL believed existence of commodities in warehouse on account of the Depositing member's declarations, invoices submitted by the depositing members, the officials concerned in the NSEL at the relevant time being satisfied that there were commodities deposited, generation of warehouse receipt by the concerned officials. Further, due to various events, arising during FY 2013-14, the Company had appointed an Internal Inquiry Committee (IIC) and also two forensic auditors after July 31, 2013 for verification of certain aspects of accounting, internal controls, propriety of accounting policies etc. Pursuant to findings from investigations related to the Company by aforesaid committee/forensic auditors, material weaknesses were reported in certain areas of internal control system pertaining to Spot Exchange related services. There were instances where the commodities were found missing and there were instances of commodities being available partly or fully. This is part of the investigations by EOW, other investigation agencies." [Refer note 67 and 72 of the consolidated financial statements of the FTIL Group]

Management response:

All contracts traded on the Exchange platform were proper and in consonance with applicable laws, exemption notifications and there were no violations in this regard. NSEL had obtained a legal opinion on the legality of the contracts traded by the members on the Exchange platform. Since the matters mentioned are under investigation/sub- judice, impact on financial statement, if any, cannot be ascertained at this stage.

Qualification 2(e) in auditors Report

"As stated in note no. 63 to the Consolidated Financial Statements in respect of effectiveness of internal controls, instances of circumventing of internal controls in some areas of operations on the Spot Exchange and in one of the group company viz. Indian Bullion Market Association Limited ('IBMA'), weakness in effectiveness of internal controls systems and control over financial reporting have been observed. Such instances were unearthed by various investigations carried out by IIC in the month of August 2013 and by a forensic auditor M/s. Grant Thornton India LLP in the month of September 2013 and by another forensic auditor M/s. Chokshi and Chokshi, Chartered Accountants in the month of February 2014.

There were irregularities which have been observed arising out of misuse of powers by ex-MD & CEO along with some senior officials of the Company. As per explanations given by the current management of the Company, some of the controls which were circumvented by the erstwhile management were lack of compliance with Rules, Bye laws and Business Rules of the Exchange by the defaulting members, laxity in terms of exemption from margin requirement to members, oversight over commodities which were stored in the warehouses belonging to certain members etc., the ex-MD & CEO at the relevant time had failed to disclose non-compliance issues to the Board of Directors of the Company. As the fnal outcomes of such investigations are pending, we are unable to comment on the consequential impact, if any, in respect of the same in the Financial Statements.

As per group company viz. IBMA the holding Company NSEL had appointed Internal Inquiry Committee (IIC) which had examined certain transactions pertaining to SNP and had recommended further inquiry into the matter. As stated in Note no 63 of the Consolidated Financial Statements, in respect of effectiveness of internal controls systems and controls over the financial reporting, following weaknesses were observed in the findings carried out by forensic auditors Grant Thornton India LLP and Chokshi & Chokshi, Chartered Accountants in relation to transactions carried out with one related party SNP were not disclosed and segregation and earmarking of client margin was not done as was required under NSEL's bye laws, which was required of IBMA as an Institutional Trade and Clearing Member (ITCM) of NSEL. The weakness had been identified after the Balance Sheet date by subsequent investigations carried out by forensic auditors in this regards. Since the matter is for separate investigation and pending such investigation, we are unable to comment on the classification of such transaction in the books of accounts of IBMA.

The matters stated above could also have a consequential impact on the measurement and disclosure of information provided under, but not limited to statement of profit and loss, provision for tax, cash fow statement, segment information, and earnings per share for the year ended March 31, 2015 in these Financial Statements." [Refer note 78 of the consolidated financial statements of the FTIL Group]

Management response:

Since the matters mentioned are under investigation/sub judice, impact on financial statement, if any, cannot be ascertained at this stage.

Qualification 2(f) in auditors Report

"The trade receivables and other receivables are subject to confirmation and reconciliation. During the course of preparation of Financial Statements of respective Company, letter of confirmations have been sent to various parties by the respective company with a request to confirm the balances as on March 31, 2015. However, few confirmations have been received. The management, however, does not expect any material changes on account of such reconciliation/ non receipt of the confirmation from parties. However the balances between The Company and IBMA in respect of Exchange Operations are subject to reconciliation. In many cases legal notices have been sent to parties; however we are unable to form any opinion on recoverability of the outstanding balances of such parties".

Management response:

In case of NSEL, majority in value of the trade & other receivables, loans and advances etc. are confirmed and such confirmation are available on record. Some confirmations were received from debtors, which were not in agreement with the balances shown in the books of accounts. Reconciliation process has been undertaken for such accounts. However, the management does not envisage any significant impact of the same on the financials. In case of IBMA, it is following up with the parties who have outstanding receivables and have sent legal notices in all suitable cases. Further legal steps are being explored by the IBMA looking at the materiality aspect of the outstanding amounts. The process of reconciliation is currently underway and the management as per the information currently available does not expect any material impact on the profit and loss statement.

Qualification 2(g) in auditors Report

"As stated in note no. 41 of notes to accounts, in earlier financial years the IBMA had rendered services to one M/s SNP Designs Pvt. Ltd. (SNP) relating to trade in future commodity contracts. At the end of the year a sum of Rs. 7,747.18 lacs was due and receivable on account of such services from SNP. The Managing Director and majority shareholder of SNP is Mrs. Shalini Sinha, the wife of Mr. Anjani Sinha (then Director and KMP of NSEL as well as BMA).Such relationship was not informed by Mr. Anjani Sinha. No money has been received from SNP despite of substantial amounts due and outstanding. SNP denied having any liability to pay to the IBMA and the matter is under dispute. It has been informed by management that such transactions were carried out on the instruction issued by erstwhile director of Company Mr. Anjani Sinha who was managing the affairs of company." [Refer note 66(c) of the consolidated financial statements of the FTIL Group]

Management response:

Post the crisis that ensued at NSEL, NSEL appointed an Internal Enquiry Committee (IIC) to investigate and report on matters in relation to the crisis. IIC also covered trades undertaken by IBMA on future commodity exchanges on behalf of SNP Designs Pvt Ltd (SNP) in terms of an agreement signed between IBMA and SNP IIC observed that such trades were executed on the directions of erstwhile director and Key Managerial Personnel, Mr. Anjani Sinha and as per the available records, Mr. Anjani Sinha was exclusively dealing with SNP and no efforts were made by him to recover the outstanding from SNP No funds were received by IBMA during the course of the trades. Board of BMA did not approve of such trades executed on behalf of SNP The trades for SNP were executed by Mr. Anjani Sinha without informing the board.

Pursuant to the forensic audit report of Grant Thornton India LLP, the IBMA came to know that Mrs. Shalini Sinha, wife of erstwhile director and KMP Mr. Anjani Sinha, was the Managing Director and major shareholder of SNP Designs Pvt. Ltd. The details of such relationship were not disclosed by Mr. Anjani Sinha to the board of directors. SNP had confirmed the balance outstanding to IBMA as on 31st March 2013 and continued transacting with IBMA until July 2013. Later when the demand was raised by the Company SNP denied owing any liability to IBMA. IBMA had sent a legal notice rebutting their contention in response to their reply. In the wake of such irregularities and on directions received from the holding Company NSEL, Mr. Anjani Sinha was removed from the Board of Directors of IBMA on 23rd October 2013. IBMA is in the process of fling a suit in the Hon'ble Bombay High court under Civil jurisdiction praying inter-alia to pass an order directing SNP to pay the outstanding sum with interest.

Qualification 2(h) in auditors Report

"As stated in 5 (b) of basis of qualification in Auditors report of IBMA, IBMA has made provision for bad and doubtful debts for f 2,049.66 lacs in case of receivables for sale and services entered by the IBMA. As per opinion formed by IBMA's Auditor, the Company should have provided 100% of all its bad and doubtful debts and other receivables. Accordingly, had this provided for entire amount as provision for bad and doubtful debts (including other receivables) the amount of provisions should have been higher by Rs. 4,097.93 lacs"

Management response:

As detailed in above responses IBMA has taken steps towards recovery of the overdue receivables. IBMA on prudent basis has provided for doubtful debts of Rs. 2,049.66 lacs in total for FY 2014-15 being 25% of the outstanding receivables of debtors for FY 2014-15 and believes that such provision is currently reasonable.

Qualification 2(i) in auditors Report

"The Company may be exposed to liabilities in case of any adverse outcome of these investigations/enquiries or legal cases or any other investigations as referred to in 2(a) to 2(e) above enquires or suits which may arise at a later date. In the light of the above, the outcome of which is not presently known and is uncertain at this stage, we are not able to comment on the impact in respect of the same on these Consolidated Financial Statements. Also, the matters stated above could also have a consequential impact on the measurement and disclosure of information provided but not limited to, profit/(loss) before tax, provision for tax, cash fow statement, segment information and earnings per share for the year ended March 31, 2015 in these Consolidated Financial Statements"

Management Response:

The consequential impacts of the aforesaid qualifications are dependent on the outcomes of the various investigations/ hearings pending in various Fora, and hence presently not known and is uncertain at this stage.

Comments on the observation made in Secretarial Audit Report:

Observation made in Secretarial audit Report:

Mr. Miten Mehta (DIN: 06749055), Non-Executive Director of the Company was paid consultancy fee for professional services rendered by him for which the Company is seeking approval of the shareholders pursuant to Section 188 (1)(f) of the Act and a Notice dated 24th July, 2015 for voting by postal ballot on the same has been issued by the Company

Management Response:

The Company has sought approval of the members through Postal Ballot in terms of Section 188(1)(f) of the Act for the rendering of services of professional nature to the Company by Mr. Miten Mehta pursuant to Section 197(4) of the Act. The Postal Ballot notice as approved by the Board of Directors at its meeting held on July 24, 2015 has been dispatched and the results of the same will be announced on September 1, 2015.

DIVIDEND

The Company follows a stable dividend payout policy. Your Company has paid consecutive dividends for the past 37 quarters which is in accordance with sustainable dividend payout policy of the Company and linked to its long term growth objectives. During the year under review, your Company paid three interim dividends totaling Rs. 5,529.42. Lacs (Rs. 12 per share on par value of Rs. 2/- per share). The Directors have recommended a final dividend of Rs. 5/- per share, subject to the approval of the members at the ensuing Annual General Meeting. The total dividend - including interim and final - aggregates to Rs. 17/- per share, for the financial year ended 31st March, 2015 (previous year Rs. 8/- per share on par value of Rs. 2/- each). The total appropriation on account of interim and final dividend and tax thereon amounts to Rs. 8,302.38 Lacs. The final dividend, if approved, will be paid to those members whose names appear in the Register of Members as on the date of the Annual General Meeting. The break-up of the dividend payouts are as under:

(Rs. in Lacs except dividend per share data)

Final Interim Dividends Dividend

1st 2nd 3rd Interim Interim Interim Proposed Total

Dividend per share 2.00 5.00 5.00 5.00 17.00

Dividend 921.57 2,303.93 2,303.93 2,303.93 7,833.35

Tax -* -* -* 469.03 469.03

TOTAL 921.57 2,303.93 2,303.93 2,772.96 8,302.38

*As per statutory provisions, tax payable on distribution of dividend is adjusted against tax payable on dividend received from a foreign subsidiary company.

TRANSFER TO RESERVES

Your Company did not transfer any sum to General Reserve for the year under review.

SHARE CAPITAL

There was no change in the Share Capital of the Company during the year under review. As on 31st March, 2015, the paid-up equity Share Capital of your Company stood at Rs. 921.57 Lacs comprising of 46,078,537 equity shares of Rs. 2/- each.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of this Annual Report.

DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES AND THEIR FINANCIAL POSITION

During the year under review the following companies have ceased to be Company's subsidiary, step-down subsidiaries and associate companies:

Name of the Subsidiary Date of cessation

National Bulk handling corporation

april 25, 2014 Limited

Boursa India Limited august 19, 2014

Trans-Global credit and Finance Limited august 19, 2014

Takshashila academia of economic September 15, 2014 research Limited

Financial Technologies Projects March 26, 2015* Private Limited (Mauritius)

Step Down [Subsidiary of Bourse Date of cessation Africa (Botswana) Limited]

Bourse Africa (Kenya) Limited May 7, 2014

IcX africa Limited May 19, 2014

Bourse Tanzania Limited May 28, 2014

Bourse uganda Limited June 10, 2014

Bourse exchange Nigeria Limited January 19, 2015

Bourse Zambia Ltd January 24, 2015

Associate Companies Date of cessation

Indian Energy Exchange Limited May 13, 2014

*Dissolved on June 18, 2015

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("Act"), a statement containing salient features of the financial statements of Company's subsidiaries, associate companies and joint ventures is given in Form AOC-1 as annexure - I and the same forms part of this report. The statement also provides the details of performance, financial positions of each of the subsidiaries and joint venture company.

The Policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at the link: www.ftindia.com/investors/corporategovernance/ Material-subsidiary-policy.pdf

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 by Clause 49 of the Listing Agreement, is annexed hereto, and forms part of this Annual Report. A Certificate from the Auditors of the Company confirming compliance with Corporate Governance norms is annexed to the report on Corporate Governance.

BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Reporting as required under Clause 55 of the Listing Agreement with the Stock Exchanges is not applicable to your Company for the financial year ended March 31, 2015.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act, 2013 and Equity Listing Agreement, your Company has formulated a Policy on Related Party Transactions which is available on Company's website at www.ftindia.com/ investors/corporate governance/FTIL-Related-Party- Transactions-Policy.pdf. The Policy is to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

All arrangements / transactions entered by your Company with its related parties during the year were in ordinary course of business and on an arm's length basis. During the year, your Company did not enter into any arrangement / transaction with related parties which could be considered material, in accordance with Clause 49(VII) of Listing Agreement on Related Party Transactions i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements and accordingly, the disclosure of Related Party Transactions in Form AOC 2 as required under Section 134(3) (h) of the Companies Act, 2013 is not applicable. However as required under Accounting Standard 18, names of Related Parties and details of transactions with them have been included in Note no. 37 to the standalone financial statements provided in the Annual Report and pursuant to Section 188(1)(f) of the Act, approval is sought through Postal Ballot for rendering of services of professional nature to the Company by Mr. Miten Mehta, the same being in the ordinary course of the business and at arm's length and covered under Section 197 (4) of the Act.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The Company has identified the areas for CSR activities which are in accordance with Schedule VII of the Act, some of which are highlighted as under:

- Health and social welfare

- Education

- Environmental Sustainability

- Rural Transformation

The Report on CSR activities as required under Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as annexure - II and the same forms part of this report. The policy is available on the website of the company at the link: www.ftindia.com/investors/corporategovernance/FTIL- CSR-policy.pdf.

RISK MANAGEMENT

The Board of the Company has formed a risk management committee to monitor the risk management policy for the Company.

The risk management system monitors and identifies risks which are related to the business and overall internal control systems of the Company. The Audit Committee has oversight responsibility in the areas of financial risks and controls. The risk management committee is responsible for reviewing the risk management policy and ensuring its effectiveness.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has internal financial control systems, which are commensurate with its size and the nature of its operations. The Internal control system is improved and modified on an on-going basis to meet the changes in business conditions, accounting and statutory requirements. Internal Audit plays a key role to ensure that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported properly. The Internal Auditors independently evaluate the adequacy of internal controls. The findings and recommendations of the Internal Auditors are reviewed by the Audit Committee and followed up till implementation wherever feasible.

DIRECTORS

During the year under review, Mr. Anil Singhvi and Mr. Berjis Desai were appointed as Additional (Non-Executive – Non- Independent) Directors w.e.f. November 7, 2014. Further, Mr. Sunil Shah and Mr. Miten Mehta were appointed as Additional (Non-Executive – Non-Independent) Directors w.e.f. November 20, 2014.

Ms. Nisha Dutt was appointed as Additional (Non-Executive –Independent) Director w.e.f. November 20, 2014 and it is proposed to appoint Ms. Nisha Dutt as Indpendent Director, not liable to retire by rotation for a period of fve years from the date of ensuing Annual General Meeting.

The Company has received notices under Section 160 of the Act along with the requisite deposit proposing appointments of Directors as detailed in the AGM Notice.

Mr. Prashant Desai was appointed as Additional Director w.e.f. November 7, 2014 and designated as Whole-time Director with effect from same date. Further, he was re- designated as Managing Director and Chief Executive Officer (CEO) of the Company w.e.f. November 21, 2014. Mr. Jigish Sonagara and Mr. Rajendra Mehta were appointed as Additional Directors w.e.f. November 21, 2014. The Board has also appointed them as Whole-time Directors with effect from the same date for a period of three years.

The Company has an on-going Postal Ballot as approved by the Board of Directors at their meeting held on July 24, 2015 under which approval of shareholders is sought inter- alia for the appointment of Mr. Prashant Desai, Mr. Jigish Sonagara and Mr. Rajendra Mehta as Directors. The results of the same will be announced on September 1, 2015.

During the year under review, Mr. Venkat Chary, Justice Rajan J. Kochar (Retd.), Mr. Achudanarayanan Nagarajan and Mr. Rajendran Soundaram were appointed as Independent Directors, not liable to retire by rotation for a period of five years at the annual general meeting of the Company held on September 23, 2014.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.

Further, during the year Mr. Jignesh Shah, Mr. Dewang Neralla and Mr. Manjay Shah resigned from the Board w.e.f. November 20, 2014, as the Managing Director and Whole- time Directors of the Company, respectively.

The Board has placed on record its appreciation for the invaluable contribution made by Mr. Jignesh Shah during his tenure as the Managing Director of the Company, making the Company a leading technology provider in the financial sector and being globally the second largest company with licensing volumes, Mr. Dewang Neralla, as Whole-time Director, putting his enormous efforts to shape the technology edge of the Company and Mr. Manjay Shah, as Whole-time Director, who has contributed greatly in the overall growth and development of the Company ensuring 80% market share for the Company.

CHAIRMAN EMERITUS

With effect from November 21, 2014, the Board suo-motto appointed Mr. Jignesh Shah as the Chairman Emeritus and Mentor of the Company, a non-board position, for advising and mentoring the Company specially in relation to fulfillment of the Company's vision of FT 3.0 and other strategic matters.

As the Company has grown into a formidable technology player and is in the process of implementing its Founder's vision for 'Digital India @ 2025' as part of FT 3.0, which is transformation of the Company into becoming the de facto 'powered by' technology partner of choice for new digital giants in sectors like retail, education, healthcare, agriculture, environment, infrastructure and space over the next 10 years, on the invitation of the Board, Mr. Jignesh Shah has agreed to act as the Chairman Emeritus and Mentor to the Company to nurture and inspire the Company's future vision of FT 3.0 wearing his creative hat and to guide the implementation thereof. In his new role, Mr. Jignesh Shah will not be involved in the management of the Company.

ONE-TIME INCENTIVE TO EMPLOYEES

Your Company has created national assets like MCX, IEX, SMX, NBHC etc over the last several years. Without prejudice to its legal rights and remedies your Company had to force-exit from these assets and created significant cash reserves. The team played a critical role in the creation of IP and getting the fair value for them through exits. The total divestments till date exceed Rs. 2000 cr. The one time reward was necessary to keep the team motivated for the next phase of growth of the Company. Your Company under the guidance of the Board has rewarded the people responsible for the creation and exit of these assets through a one-time incentive which was capped at 1% of the total divestment. This is a one-time incentive and will not be a recurring expenditure. The salary of the team continues to remain same.

Amount Details Name of employee (Rs. Lacs)

Mr Paras ajmera 720.0

Mr Prashant Desai* 480.0

Mr Jigish Sonagara* 100.0

one-time Incentive Mr Dewang Neralla 38.5

paid to employees Mr Manjay Shah 38.5 during FY 2014-15 for divestment of assets Mr Devendra agrawal 25.0 in 2014-15 Mr ashish Kakade 20.0

Mr Jatin Doshi 10.0

Mr hariraj chouhan 7.5

Mr Sheetal Dhawan 5.0

amount of commission Mr Jignesh Shah 450.0 provision for FY 2014-15 to executive Directors, to be Mr Prashant Desai* 325.0 paid in FY 2015-16 after Mr Jigish Sonagara* 125.0 approval of annual accounts by the shareholders. Mr rajendra Mehta* 100.0

Mr Prashant Desai* 180.0

Mr Jigish Sonagara* 180.0

Mr rajendra Mehta* 120.0

Amount of salary as Mr Dewang Neralla** 180.0 cost to Company (CTC*) (MD&ceo of atom) payable for 2015-16 Mr Manjay Shah** 240.0

(MD of Tickerplant)

*CTC includes company Mr Paras ajmera 240.0 contribution to provident Mr Devendra agrawal 80.0 fund, gratuity, insurance etc Mr hariraj chouhan 41.0

Mr Jatin Doshi 35.0

Mr ashish Kakade 32.0

Mr Sheetal Dhawan 27.5

*All Executive Directors of the Company have given their written consent to the Remuneration Committee that they will only draw salaries with nominal increment, if given, for the next two years

** They have also given their consent that they will only draw salaries with nominal increment, if given, for the next two years.

KEY MANAGERIAL PERSONNEL

As per the accounting standards and as reported in previous annual reports, Mr. Jignesh Shah, Managing Director, Mr. Dewang Neralla, Whole-time Director and Mr. Manjay Shah, Whole-time Director designated as Key Managerial Personnel ceased to hold office as such w.e.f. November 20, 2014.

During the year under review, the Company has appointed following persons as Key Managerial Personnel:

sr.

Name of the person Designation No. Managing Director &

1 Mr. Prashant Desai Chief Executive Offcer w.e.f. 21/11/2014

whole-time Director

2 Mr. Jigish Sonagara w.e.f. 21/11/2014

whole-time Director

3 Mr. rajendra Mehta w.e.f. 21/11/2014

Chief Financial Offcer

4 Mr. Devendra agrawal w.e.f. 05/11/2014

Company Secretary

5 Mr. hariraj chouhan w.e.f. 05/11/2014

BOARD EVALUATION

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. One of the key functions of the Board is to monitor and review the board evaluation framework.

In a separate meeting held of Independent Directors, it was agreed that since majority of the Board members are newly inducted, it would be pre-mature to have a review of their performance as only a very short period has elapsed since their induction on the Board.

It was also agreed to have a set of parameters prepared and circulated to all the non-executive Directors for their review and comments and the current methods of evaluation and parameters adopted by the Company for Managing Director/Whole-time Directors would be considered by the Board for their evaluation.

MEETINGS OF THE BOARD

The Board of Directors of the Company met twenty nine times during the financial year. The details of Board Meetings are provided in the Corporate Governance Report, which forms part of this Annual Report.

AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT BY COMPANY

Details of loans, guarantees and investments have been disclosed in the Financial Statements.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in annexure - III and the same forms part of this Report.

EXTRACT OF ANNUAL RETURN

Extract of Annual return of the Company in form MGT-9 is annexed herewith as annexure - IV and the same forms part of this Report.

PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURES

In terms of the provisions of Section 197 (12) of the Act, read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures pertaining to remuneration and other details and a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules are given in annexure - V and the same forms part of this report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has a whistle blower policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company at the link: www.ftindia.com/investors/corporategovernance/Whistle- Blower-Policy.pdf.

NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy for selection and appointment of Directors including determining qualifications, independence of a Director, Key Managerial Personnel, Senior Management Personnel and their remuneration as part of its charter and other matters provided under section 178 (3) of the Act. The details of the policy are provided in the Corporate Governance Report, which forms part of this Annual Report.

DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

During the financial year 2014-15, the Company has not received any complaints on sexual harassment and hence no complaints remain pending as of March 31, 2015.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. The details of litigation including tax matters are disclosed in the notes to the Financial Statements which forms part of this Annual Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. the Directors have 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 have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual accounts on a going concern basis.

e. the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

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

EMPLOYEES STOCK OPTION PLAN (ESOP)

The Nomination & Remuneration Committee of the Board of Directors of the Company, inter-alia, administers and monitors the Employees Stock Option Plan of the Company in accordance with the applicable SEBI Guidelines.

The applicable disclosures as required under SEBI Guidelines as on March 31, 2015, with regards to the Employees Stock Option Plan and as per the Act are given in annexure – VI and the same forms part of this report.

The Company has received a certificate from the Auditors of the Company that the ESOP Schemes have been implemented in accordance with the SEBI Guidelines and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members.

AUDITORS

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai (Regn. No. 109983W) were appointed as the Statutory Auditors of the Company at the Annual General Meeting (AGM) held on September 23, 2014 for a period of five years, subject to ratification of their appointment at every AGM.

The Company has received a confirmation from M/s. Sharp & Tannan Associates to the effect that their appointment, if ratified at the ensuing AGM would be in terms of Sections 139 and 141 of the Act and rules made there under. The Board proposes to the members to ratify the said appointment of M/s. Sharp & Tannan Associates.

DETAILS OF FRAUD, IF ANY REPORTED BY THE AUDITORS

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Act, the Board has appointed M/s BNP & Associates, Practising Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as annexure - VII and the same forms part of this report. The observations made in the Secretarial Audit Report are mentioned elsewhere in this report.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

- Details relating to deposits covered under Chapter V of the Act.

- Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

- Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

HUMAN RESOURCES

At Financial Technologies, we strongly believe in open communication at all times, across levels. Varied communication channels, such as Departmental meets, HOD meets, HR Zone (e-HR), FTIL HR Communication and HR4U e-mail facility, have ensured that the HR team is always around the corner and is available to listen to and help human resources. All of our processes are fully automated and online thus ensuring that information is available at fingertips for employees as well as speed in operations. As of 31st March 2015, FTIL had employee strength of 872.

Our Company went through a major crisis last year. The human resources oriented culture in the Company has helped us to tide over this crisis by keeping the confidence of the employees in the strength of the business verticals intact. This ensured that our attrition did not escalate substantially, and our focus on customers and development remained constant.

One of the cornerstones of our crisis management strategy has been to communicate constantly with our employees over the last one year. Many HR Connect sessions were also held to address the employee concerns and strengthen the bonding across levels. FTIL's confidence in its ability to innovate and technological strength and grow in challenging times was reiterated in open houses/connect sessions.

It is to be noted that 62% of our current employees have worked with the Company for more than 3 years. Our attrition rate even in the year of crisis i.e. 14/15 was 28%, which even though slightly higher than the past few years, is still lower than comparable technology companies across India.

To acknowledge the efforts and commitment of staff in challenging times, a loyalty bonus was announced. The Loyalty Bonus was paid to FTIL staff who has completed minimum 3 years of association/service with Organization as on 31st March 2015. This has helped us to boost the employee confidence in the Organization and also led to enhanced retention of skilled staff Even during the times of crisis, FTIL's HR department has ensured that their well-established processes continue to be honored and followed i.e. induction, training, performance management etc.

Many employee connect and engagement initiatives like Stepthlon, PUMA Urban Stampede, Stills Photography contest, CSR focused activities like Blood Donation drive, Clothes Donation Drive, Contribution for J&K Flood relief were conducted. This has led to greater employee bonding.

Financial Technologies continues to believe strongly in the ability and quality of its Human Resources, and has already started working on the next phase of FTIL's growth. FTIL treats its employees as integral partners in the organization's existence and growth.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government, State Government, clients, vendors, financial institutions, bankers and business associates for the assistance and co-operation extended to your Company.

Your Directors also wish to place on record their appreciation for the continued support of investors, business associates and the contribution made by the employees at all levels.

For and on behalf of the Board of Directors

Venkat Chary Prashant Desai

Place: Pawana Nagar, Pune Chairman Managing Director & CEO

Date: August 8, 2015 DIN: 00273036 DIN: 01578418


Mar 31, 2014

Dear Members,

The Directors present the Twenty Sixth Annual Report of your Company together with the Audited Standalone Statement of Accounts for the year ended March 31, 2014.

This is to bring to your notice that Ministry of Corporate Affairs has issued a General Circular 08/2014 dated April 04, 2014 clarifying inter-alia that the Boards'' Report shall be as per the provisions of Companies Act 1956 for the companies whose Financial Year ends on or before April 01, 2014. In view of the said circular, this report is prepared in conformity to the said circular. However, wherever necessary provisions of Companies Act 2013 have also been complied with.

Your Directors would like to inform you that the Consolidated Financial Statements of your Company have not yet been finalized because there are payment defaults by defaulting members at one of the subsidiaries of the Company, National Spot Exchange Limited (NSEL) and in view of the said defaults various agencies are investigating the matters. Therefore, the financial statements for the financial year 2012-13 and 2013-14 of NSEL are yet to be audited. Consequently, the Consolidated Financial Statements of the Company could not be finalized. The Statutory Auditors of the Company, M/s Deloitte Haskins & Sells LLP, Chartered Accountants have submitted Auditor''s Report dated May 30, 2014 on Standalone Financial Statements of the Company for the year ended March 31, 2014 .

In view of the above and in the interest of approx. 60,000 shareholders and stakeholders of the Company, it was discussed and decided to circulate to the members Standalone Financial Statements of the Company and statement under section 212 excluding NSEL and its Subsidiaries details. Therefore, in the larger interest of all its stakeholders, the Board has taken the decision to announce Standalone Financial Statements, so that you are not deprived of the financial information of the Company.

FINANCIAL DATA

(Rs. in lacs, except per share data)

Particulars standalone

Current Year Previous Year 2013-14 2012-13

Total Income 61,115.80 65,742.09

Employee benefits expense 12,275.19 12,410.70

other operating expenses 12,598.02 6,546.38

Provision for other than temporary diminution in value of long term investments in subsidiaries 11,444.44 -

Provision for doubtful loans and advances, and deposits 36,704.87 -

Finance costs 3,053.82 4,283.74

Depreciation/amortization 3,074.86 2,253.99

Total expenses 79,151.20 25,494.81

Profit/(Loss) before tax (18,035.40) 40,247.28

Provision for taxation 4,819.45 7,959.22

Profit/(Loss) after Tax/Net Profit for the year (22,854.85) 32,288.06

Add: Balance brought forward from previous year 2,04,257.15 1,79,513.50

Balance available for appropriation 1,81,402.30 2,11,801.56 Appropriations

Final dividend (proposed) 921.57 921.57

Interim dividend 2,764.71 2,764.71

Tax on dividend 626.48 605.13

Transfer to General Reserve - 3,253.00

Balance carried forward to Balance Sheet 1,77,089.54 2,04,257.15 Earnings per share

Basic (49.60) 70.07

Diluted (49.60) 69.48

Result of Operations:

Standalone Financials:

* The total income for the year ended March 31, 2014 was at Rs. 61,115.80 lacs as compared to Rs. 65,742.09 lacs in the previous year. The total revenue from operations for the year ended March 31, 2014 was at Rs. 33,471.49 lacs as compared to Rs. 45,090.10 lacs in the previous year.

* Your Company has reported a loss during the year of Rs. 22,854.85 lacs as compared to profit of Rs. 32,288.06 lacs in the previous year.

* Excluding profit on Sale of Shares (net), diminution in long term investment, and provision for doubtful loans and advances to subsidiaries, during the year, profit before tax was Rs. 23,116.72 lacs, compared to Rs. 40,247.28 lacs in the previous year

* Excluding profit on Sale of Shares (net), diminution in long term investment, and provision for doubtful loans and advances to subsidiaries, during the year, profit after tax was Rs. 18,297.27 lacs, compared to Rs. 32,288.06 lacs in the previous year.

* Net loss of Rs. 22,854.85 lacs for the year ended March 31, 2014 is after making provision for other than temporary diminution in value of long term investments in subsidiaries of Rs. 11,444.44 lacs and Provision for doubtful loans and advances, and deposits of Rs. 36,704.87 lacs.

Qualifications in Audit Report on Standalone Financial Statements:

The qualifications made by the then Statutory Auditors in their Independent Auditors'' Report dated May 30, 2014 on the Standalone Financial Statements for the year ended March 31, 2014 and the Management responses thereto are as under:

A. Pursuant to the developments relating to National Spot Exchange Limited (NSEL), the management of NSEL, by their letter dated September 20, 2013, had communicated to its auditors and the Company that it was not possible for NSEL to immediately ascertain the financial implications (with respect to, inter alia, the various irregularities in the operations of NSEL coming to light, agencies looking at the legality of contracts and warehouse receipts and income booked by NSEL therefrom, ongoing investigations and forensic audit) and whether its books and records presented as of March 31, 2013 were true and fair and what adjustments were needed to be carried out with a view to present a correct financial position. Consequently, the auditors of NSEL and its subsidiary, Indian Bullion Market Association Limited (IBMA), in which NSEL has 60.88% equity ownership, citing various developments, investigations and audits relating to NSEL, had communicated to NSEL and IBMA, by their letters dated September 21, 2013, that the standalone and consolidated financial statements of NSEL and the standalone financial statements of IBMA for the year ended March 31, 2013 and their audit reports dated May 17, 2013 and May 16, 2013 on the said financial statements of NSEL and IBMA, respectively, are no longer to be relied upon.

B. Basis for Qualified Opinion and Management Response:

1. The following matters were qualified in our audit report dated 29th November, 2013, on the financial statements (as amended) for the year ended 31st March, 2013 and continue to be subject matters of qualification:

a. As stated in Note 52 to the financial statements, the Company had recognised income of Rs. 3,452.00 lacs during the year ended 31st March, 2013 from rendering of various services to NSEL, which included a variable component of Rs. 2,927.60 lacs. As on 31st March, 2013, the total amount receivable from NSEL on this account was Rs. 2,489.27 lacs, which has been realised subsequently during the current financial year.

The above variable component comprised:

(i) revenue of Rs. 2,841.46 lacs towards software maintenance and support services derived on the basis of the underlying revenue recognised by NSEL on account of "transaction fees, delivery charges, warehouse receipt transfer charges for trading, settlement and delivery activities" for the year ended 31st March, 2013, pursuant to agreements/contracts; and

(ii) revenue of Rs. 86.14 lacs towards business support services derived on the basis of the underlying gross profits earned on the merchandising activities by NSEL for the year ended 31st March, 2013.

However, as stated in paragraph A above, the management of NSEL had communicated that they were not in a position to determine whether its books and records presented as of 31st March, 2013 were true and fair and what adjustments were needed to be carried out with a view to present a correct financial position due to, inter alia, the various irregularities in the operations of NSEL coming to light, agencies looking at the legality of contracts and warehouse receipts and income booked by NSEL therefrom, ongoing investigations and forensic audit. Consequently, the auditors of NSEL, citing various developments, investigations and audits relating to NSEL, had also communicated that the financial statements of NSEL for the year ended 31st March, 2013 and their audit reports thereon were no longer to be relied upon. Further, as represented to us by the Management of the Company, the audited financial statements of NSEL for the year ended 31st March, 2013 are not yet available.

In view of our aforesaid comments and in the absence of sufficient appropriate audit evidence, particularly, in the absence of the audited financial statements of NSEL for the year ended 31st March, 2013, which we could have placed reliance on to validate the underlying elements of revenue and gross profits of NSEL based on which the above mentioned variable component of revenue were derived and accounted for by the Company, significant uncertainty exists regarding the amount of the consideration that could be derived from rendering the service and, hence, we are unable to determine the extent to which the above mentioned revenue aggregating Rs. 2,927.60 lacs should be de-recognised in the Statement of Profit and Loss for the year ended 31st March, 2014 and postponed by the Company, in compliance with the recognition and measurement principles stated in Accounting Standard (AS) 9, ''Revenue Recognition''.

Management Response:

During the previous year ended 31st March, 2013, the Company had earned Income of Rs. 3,452.00 lacs from NSEL, which constituted 5.25% of the standalone total income of the Company. This included aggregate amount of Rs. 2,927.60 lacs being variable component.

The above variable component comprises:

* revenue of Rs. 2,841.46 lacs towards software maintenance and support services derived on the basis of the underlying revenue recognized by NSEL on account of "transaction fees, delivery charges, warehouse receipt transfer charges for trading, settlement and delivery activities" for the year ended 31st March, 2013, pursuant to agreements/contracts; and

* revenue of Rs. 86.14 lacs towards business support services derived on the basis of the underlying gross profits earned on the merchandising activities by NSEL for the year ended 31st March, 2013.

As on 31st March, 2013, total amount receivable from NSEL was Rs. 2,489.27 lacs, which has been realised subsequently during the current financial year and as on date, there is no amount outstanding against the same.

The above income was recognized as per the contractual terms on accrual basis and there was no uncertainty with respect to realisability of the aforesaid amount as on 31st March, 2013 or on the date on which the Financial Statements were approved by the Board and, hence, the same was accounted as income.

As of date, there have been no claims by NSEL nor has any dispute been raised in connection with the amounts paid to the Company for the Services provided by the Company during the financial year 2012-13. In view of the above, no provision was considered necessary by the Company as on 31st March, 2013 and as on 31st March, 2014 for the above said Income from NSEL.

b. As stated by the Management of the Company in Note 55 to the financial statements, Writ Petitions, Public Interest Litigations, Civil Suits have been filed against the Company in relation to the NSEL event, wherein the Company has been made a party in the Writ Petitions and Civil Suits, and these matters are pending adjudication. In addition, there is a First Information Report registered, inter alia, against the Company with the Economic Offences Wing. Further, as stated in the said Note 55 to the financial statements, based on legal advice, the Management of the Company does not foresee that the parties who have filed the Writ Petitions, Public Interest Litigations, Civil Suits would be able to sustain any claim against the Company. In this regard, the Management and those charged with Governance have represented to us that other than as stated in the said Note 55 to the financial statements, there are no claims, litigations, potential settlements involving the Company directly or indirectly which require adjustments to/disclosures in the financial statements.

In the light of the above representations regarding the ongoing investigations and matters, the outcome of which is not known and is uncertain as on date, we are unable to comment on the consequential impact in respect of the same on these financial statements.

Management Response:

i. During the year, Writ Petitions (WP), Public Interest Litigation (PIL), Civil Suits have been filed against the Company in relation to NSEL event, wherein the Company has been made a party in the Civil Suits and the WP In the said proceedings certain reliefs have been claimed against the Company, inter alia, on the ground that the Company is the holding company of NSEL. These matters are pending before the Hon''ble Bombay High Court for adjudication. The Company has denied all the claims and contentions in its reply. There is no privity of contract between the Company and the Petitioners. Based on legal advice, the management is of the view that the parties who have filed the WP, PIL and Civil Suits would not be able to sustain any claim against the Company. The matter is pending for hearing before the Hon''ble Bombay High Court.

ii. First Information Report (FIR) has been registered against various parties, including the Company, with the Economic Offences Wing of the Mumbai Police (EOW) in connection with the NSEL event. After investigation, EOW has filed charge-sheets on 06th January, 2014, 4th June 2014 and 4th August 2014 and it is pertinent to note that so far the Company has not been named in the said charge-sheets.

c. No provision was considered necessary by the Management of the Company for diminution in the value of the Company''s long-term investment in NSEL of Rs. 4,499.99 lacs as at 31st March, 2013.

In view of the aforesaid developments relating to NSEL, which represented a subsequent discovery of facts existing on the date of the Balance Sheet as at 31st March, 2013, in our opinion, there were indications of ''other than temporary'' diminution in the carrying amount of the Company''s investment in NSEL as at 31st March, 2013. However, in the absence of the audited financial statements of NSEL for the year ended 31st March, 2013 (refer paragraph A above), non-availability of estimation of future cash flows and earning capacity of NSEL and suspension of NSEL''s operations, we were not able to obtain sufficient appropriate audit evidence to determine the amount of provision that would have been needed to be made for diminution in the carrying amount of the Company''s investment in NSEL of Rs. 4,499.99 lacs as at 31st March, 2013, in accordance with Accounting Standard (AS) 13, ''Accounting for Investments''.

However, as stated in Note 51 to the financial statements, during the year ended 31st March, 2014, on a conservative basis, the Company has made a provision, towards diminution, other than temporary, in the value of the entire amount of its long term investment of Rs. 4,499.99 lacs in NSEL and has charged the same to the Statement of Profit and Loss for the year ended 31st March, 2014.

Management Response:

In view of the developments in respect of its subsidiary NSEL, during the year ended March 31, 2014, on conservative basis, the Company has made a provision towards diminution other than temporary in value of long term investments of Rs. 4,499.99 lacs for its investment in NSEL.

2. We are informed that, on the directions of the Forward Markets Commission, a special audit was carried out by an external agency in respect of Multi Commodity Exchange of India Limited (MCX) covering, inter alia, the agreements and transactions between MCX and the Company. MCX has, on 26th May, 2014, submitted the scanned copy of the special audit report dated 21st April, 2014 for dissemination on the website of BSE Limited (Refer Note 59 to the financial statements).

We are unable to comment on the consequential impact, if any, in respect of the above matter on these financial statements.

Management Response:

MCX on 29th April, 2014 uploaded on BSE website Executive Summary with the modification on selective basis (''Executive Summary'') of Special Audit Report carried out by PricewaterhouseCoopers Private Limited (PwC) with a disclaimer. The Company replied to Executive Summary in detail on 5th May, 2014 and the same was uploaded on BSE website. Subsequently, on 26th May, 2014, MCX disseminated on BSE website Special Audit Report without annexures, exhibits of the said report with a disclaimer that document is yet to be independently verified by MCX, MCX neither agrees nor disagrees with the contents thereof and does not have any opinion on the same, it further recommends that no person should consider and/or rely on the contents of the document at this stage for undertaking any trade (buy or sell) in the securities of MCX, it further states that it does not in any manner warrant, certify or endorse the correctness, accuracy, adequacy or completeness of the contents of the document (report) and it should not for any reason be deemed or construed to mean that the observations (of the report) have been verified / confirmed by MCX. The Company reiterated that views of the Company were not taken into account before finalising the report despite several written requests to MCX.

It may also be noted that the Special Audit Report contains several disclaimers including a statement that the procedures performed under the Special Audit did not constitute an audit or examination or a review in accordance with generally accepted auditing standards or attestation standards.

3. As stated in Note 50 to the financial statements, the Company has investments in certain subsidiaries and a jointly controlled entity, aggregating Rs. 12,590.95 lacs and has granted loans and advances to / receivables from these entities, aggregating Rs. 90,758.89 lacs [which exclude NSEL and its subsidiaries - refer paragraph B1 (c)above]. The net worth of most of these entities has been eroded / substantially eroded. A provision/adjustment of Rs. 8,681.71 lacs (including Rs. 6,944.45 lacs during the year) has been made, inter alia, for diminution, other than temporary, in the value of investments and a provision of Rs. 15,150.00 lacs has been made during the year for doubtful loans and advances, which the Management of the Company considers to be adequate.

In the absence of sufficient appropriate audit evidence, particularly, in the absence of a fair valuation of the aforesaid investments at the balance sheet date being provided to us, we are unable to determine the adequacy of the provisions made.

Management Response:

As at 31st March, 2014, the Company''s investment in certain subsidiaries and a jointly controlled entity aggregating Rs. 12,590.95 lacs (Previous Year Rs. 12,215.95 lacs) and loans and advances / recoverables from these entities aggregating Rs. 90,758.89 lacs (Previous Year Rs. 38,732.65 lacs) (excluding NSEL and its subsidiaries, and FTSPL and its subsidiaries) which presently have accumulated losses, [share of aggregate losses till 31st March, 2014 Rs. 112,881.99 lacs (Previous year Rs. 59,610.67 lacs)].

In view of the NSEL event, FMC declared the Company not a fit and proper person to hold shares in MCX, consequently, various other regulatory authorities also given direction to dispose of the Company''s stake in the respective exchanges. Further the license of the exchange venture situated in Botswana, which had not yet commenced its operation, got cancelled. Considering these events and current scenario (though Company ideally would like to retain the investment to fetch its right price and not to sell in distress), the Company on a conservative basis has made an additional provision of Rs. 6,944.45 lacs (Previous Year Nil) towards provision for other than temporary diminution in the value of investments including provision (write down) in value of investments of Rs. 15.00 lacs (Previous Year Nil) in respect of investments reclassified during the year from long-term (non- current) to current investments, and Rs. 15,150.00 lacs (Previous Year Nil) towards doubtful loans and advances. Accordingly, total provision of Rs. 8,681.71 lacs (Previous Year Rs. 1,737.26 lacs) for other than temporary diminution in the value of investments and provision of Rs. 15,150.00 lacs (Previous Year Nil) for doubtful loans and advances as at the year ended on 31st March, 2014 is considered to be adequate for these investments and loans and advances / receivables.

4. As stated in Note 45 to the financial statements, the directives of the Securities and Exchange Board of India (SEBI) by its Order dated 19th March, 2014 requires the Company to divest its investments referred therein within ninety days from the date of the Order. These include 27,165,000 Equity Shares of Re. 1 each and 562,460,000 Warrants of Re. 1 each (each Warrant will entitle the holder to one Equity Share) both in MCX Stock Exchange Limited and 5,750,000 Equity Shares of Rs. 10 each in MCX- SX Clearing Corporation Limited which are being carried at an aggregate amount of Rs. 6,471.25 lacs. The Management of the Company is of the view that the aggregate carrying amount of the aforesaid investments at Rs. 6,471.25 lacs represents the lower of cost and fair value of these investments as on the balance sheet date.

In the absence of sufficient appropriate audit evidence, particularly, in the absence of a fair valuation of the aforesaid investments at the balance sheet date being provided to us, and having regard to the time limit for divestment prescribed in the aforesaid Order, we have not been able to validate whether the carrying amount of these investments is the lower of cost and fair value, as required by Accounting Standard (AS) 13, ''Accounting for Investments''

Management Response:

The Company holds 27,165,000 Equity Shares of Rs. 1/- each and 562,460,000 Warrants of Rs. 1/- each in MCX Stock Exchange Limited (MCX-SX).

During the year, the Company has received show cause notice from the SEBI dated 20th December, 2013 solely based on FMC Order under Securities Contracts (Regulation) Act, 1956, SEBI Act, 1992 and Securities Contracts (Regulation) (Stock Exchange and Clearing Corporations) Regulations, 2012, advising the Company to show cause as to why directions should not be issued for divestment of shares and transferable warrants held by the Company and any company/entity controlled by the Company, either directly or indirectly, in MCX- SX, MCX-SX Clearing Corporation Limited (MCX-SX CCL), Delhi Stock Exchange Ltd (DSE), the Vadodara Stock Exchange Limited (VSE) and National Stock Exchange of India Limited (NSEIL). The Company vide its letter dated 21st December, 2013 replied to SEBI stating that FMC Order is subject matter of challenge before the Hon''ble Bombay High Court; therefore, the Company requested SEBI not to take any precipitate action until the writ petition filed by the Company is dealt with by the Hon''ble High Court. SEBI has passed an Order on 19th March, 2014 declaring the Company not a ''Fit and Proper'' person and directed the Company to divest the equity shares or any instrument that provides for rights over the equity shares held by the Company in MCX-SX, MCX-SX CCL, DSE, VSE and NSEIL within 90 days from the date of order. The Company had filed an appeal in the Security Appellate Tribunal (SAT) against the said order. SAT vide its order dated 9th July 2014 directed the Company to divest its stake from the abovesaid entities within four weeks from the date of Order. The Company is in the process of divesting the stake in the aforesaid entities. Investment in the aforesaid entities are reclassified as current investment at the lower of cost and fair value from long term investments. MCX-SX CCL is not considered as an associate company from the date of order i.e. 19th March, 2014. According to the Management''s view, on the basis of the information available including latest financial statements/ results and/or latest transactions carried out, the fair value of above investments exceeds the cost of the investments. In case of investment in one company where the book value is less than the investment amount, the Company has made appropriate provision for the same.

5. The Company has recognised MAT Credit of Rs. 9,188.82 lacs as at the year end, including Rs. 960.51 lacs during the year. In accordance with the recommendations contained in the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax (MAT) under the Income - tax Act, 1961 issued by the Institute of Chartered Accountants of India, MAT Credit can be created by way of credit to the statement of profit and loss account and shown as MAT Credit Entitlement in the Balance Sheet, to the extent there is convincing evidence to the effect that the Company will pay normal income tax during the specified period. As per the aforesaid Guidance Note, where MAT credit is recognised as an asset, the same should be reviewed at each balance sheet date and a company should write down the carrying amount of MAT credit asset to the extent there is no longer a convincing evidence to the effect that the company will pay normal income tax during the specified period.

In the absence of sufficient appropriate audit evidence, we are unable to independently assess whether any right down is required in respect of the aforesaid carrying amount of MAT Credit asset.

Management Response:

On the basis of the projections, Management is of the view that the MAT credit can be utilized over available period.

6. As disclosed in Note 4 "Reserves and Surplus" an amount of Rs. 2,764.71 lacs has been paid as interim dividends for the year 2013-14 and the tax paid on these dividends is Rs. 469.86 lacs. However, the Company has made a loss for the year ended 31st March, 2014. Further, the consequential transfer of the stipulated minimum amounts of profits to General Reserves in accordance with the Companies (Transfer of Profits to Reserves Rules), 1975, has not been effected due to loss for the year.

Management Response:

During the financial year 2013-14, the Company has paid three interim dividends in accordance to Section 205 of the Companies Act, 1956 and also recommended a final dividend of 100%, subject to approval of shareholders in the forthcoming annual general meeting. According to Section 205 of Companies Act, 1956 (Act), a company can also declare or pay dividend for any financial year out of profits of the company for any previous financial year or years arrived at after providing for depreciation and remaining undistributed. Since the Company has made a loss for the year ended March 31, 2014, the question of transferring of stipulated minimum amounts of profits to general reserves in accordance with the Companies (Transfer of Profits to Reserve Rules), 1975, does not arise. Under Section 2(14A) of the Act, dividend includes interim dividend. The Company has obtained necessary legal opinion for the same and copy of the opinion was provided to the then Auditors.

7. The matters stated above could also have a consequential impact on the measurement and disclosures of information provided under, but not limited to, managerial remuneration, provision for tax, earnings per share, segment information and related parties for the year ended 31st March, 2014, in the financial statements.

Management Response:

As explained in the above said Management reply, the quantum of consequential impact for matters referred in 1(a) & 1(c) in the qualifications does not arise as the Management is of the view that there was no impairment / revenue revision of the Company as of the Balance Sheet date March 31, 2013. With respect to paragraph 1(b) and 2 to 6 above, the Management responses have been given in the respective paragraph.

Qualification in annexure to Independent Auditors'' Report on the matters specified in paragraphs 4 and 5 of the Companies (Auditors'' Report) Order, 2003.

8. We are unable to comment on the matters arising from the special audit carried out by an external agency in respect of Multi Commodity Exchange of India Limited on the directions of the Forward Markets Commission as described in Note 59 to the financial statements (Also see paragraph 2 above) and the enquiries from certain investigating authorities as described in Notes 57 and 58 to the financial statement, for the purpose of reporting on clause (xxi) of Paragraph 4 of the Order.

Further to the above, and except for the matters arising from NSEL as described in Note 55 to the financial statements (Also see Basis for Qualified Opinion of our Audit Report as given in paragraph 1 (b) above) on which also we are unable to comment, to the best of our knowledge and according to the information and explanations gives to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

Management Response:

The notes 55, 57, 58 and 59 to the financial statements are self-explanatory.

BUSINESS OVERVIEW AND OUTLOOK: FISCAL YEAR 2013-14

BUSINESS OVERVIEW

The bygone year has been one of the most challenging ones in the history of your Company. The NSEL crisis that unfolded in July 2013 has proven to be a watershed for all the good work and goodwill earned by your Company over these years. As a result of the events that have unfolded over the past year, your Company had strategically decided to exit the exchanges/regulated businesses, both in India and around the world, and focus on its core competency - IP centric technological innovations.

Technology has always been the cornerstone of growth for your Company, having gained precedence in setting new trends, extending high-end, robust and efficient solutions for next-generation financial markets. It has made significant investment in devising a scalable exchange and trading technology that boasts incomparable domain expertise and an invaluable IP Its technology has gained international acclaim for providing pivotal advantages in propelling unrivaled mass disruptive innovation. Your Company has made new inroads in this spectrum, with a distinctive standing as the architect of organized, electronic and regulated financial markets that are either inadequately served or deprived of the advantage due to monetary unviability of traditional markets.

Your Company continues to be the leading technology services provider in the financial markets ecosystem and its technology solutions continue to be used by all major exchanges as well as market intermediaries. Keeping pace with the growing needs of the market, your Company''s Exchange Technology Division has equipped its solutions to cater to fixed income markets as well as newer asset classes, viz. equity derivatives and currency options.

Your Company also leads in India''s Member Technology Solutions space with ODINTM continuing to be the first choice of every brokerage house in India holding a major market share in the country''s electronic trading solutions space. Your Company has emerged as a global leader in engineering technology-centric financial markets. Etching new levels of achievements in making the segment transparent and amply user-friendly, your Company has been unprecedented in defining the progression of the online trading technology space.

Overall, in the previous year, despite the challenges and economic downturn, your Company could sustain the business momentum in most of its business segments.

BUSINESS OUTLOOK

Going forward times could be challenging as your Company looks to reinvent itself while at the same time ensuring that it is able to circumvent the legal and reputational challenges because of the NSEL crisis. However, since the IP centric technological innovations being at the core for your Company, the future prospects are extremely encouraging. Despite the challenges thrown up by the NSEL crisis, your Company envisions a larger scope for growth and newer avenues to expand its business. Economic upturn will be dovetailed by a stronger growth for technology companies. Having been built on a strong technology foundation has helped and will help your Company deliver consistent performance year on year. As a result of its actions to divest from the regulated businesses, your Company will be able to focus on its technology strengths because of a strong talent pool, a strong infrastructure in FT Tower, a strong cash reserves and a very conducive business environment. Your Company will focus on its technology vertical that includes Exchange Technology Solutions and Member Technology Solutions (Brokerage Solutions, Connectivity Solutions and Consulting Solutions) apart from harnessing newer technologies, markets and segments. Given its experience in delivering mission critical technologies for financial markets, we are confident of leveraging the same towards opening newer markets and industry segments that have traditionally lagged behind in adopting technology but can jump the curve on Cloud, Social Media, Mobile and Analytics.

Your Company will strive to consolidate its existing technology portfolio and aggressively explore other emerging opportunities across geographies.

DIVIDEND

The Company follows a stable dividend payout policy. Your Company has paid consecutive dividend for last 33 quarters which is in accordance with sustainable dividend payout policy of the Company and linked to its long term growth objectives. During the year under review, your Company paid three interim dividends totaling Rs. 2,764.71 Lacs (Rs. 6 per share on par value of Rs. 2/- per share). The Directors recommended a final dividend of Rs. 2/- per share, subject to the approval of the shareholders at the ensuing Annual General Meeting. The total dividend - including interim and final - aggregated Rs. 8/- per share, for the financial year ended 31st March, 2014 (previous year Rs. 8/- per share on par value of Rs. 2/- each). The total appropriation on account of interim and final dividend and tax thereon amounts to Rs. 4,312.76 Lacs.

The final dividend, if approved, will be paid to those members whose names appear in the Register of Members as on the date of the Annual General Meeting.

The break-up of the dividend payouts are as under:

(Rs. in lacs except dividend per share data)

Final

Interim Dividends Dividend

1st 2nd 3rd Interim Interim Interim Proposed TOTAL

Dividend 2 2 2 2 8 per share

Dividend 921.57 921.57 921.57 921.57 3686.28

Tax 156.62 156.62 156.62 156.62 626.48

TOTAL 1078.19 1078.19 1078.19 1078.19 4312.76

TRANSFER TO REsERVES

Your Company did not transfer any sum to General Reserve during the year under review in view of the net loss reported during the year. According to Section 205 of Companies Act, 1956 (Act), a company can declare or pay dividend for any financial year out of profits of the company for any previous financial year or years arrived at after providing for depreciation and remaining undistributed. Since the Company has made a loss for the year ended March 31, 2014, the question of transferring of stipulated minimum amounts of profits to general reserves in accordance with the Companies (Transfer of Profits to Reserve Rules), 1975, does not arise.

SHARE CAPITAL

There was no change in the Share Capital of the Company during the year under review. As on 31st March, 2014, the paid-up equity Share Capital of your Company stood at Rs. 921.57 lacs comprising 46,078,537 equity shares of Rs. 2/- each.

investment

At the end of FY 2013-14, your Company''s Investments (current non-current) (net of provision) stood at Rs. 127,715.90 lacs as compared to Rs. 221,507.56 lacs in the previous year. The total investment mainly comprised of investment in mutual funds, subsidiaries, joint venture and associate companies. For more details, please refer to the audited standalone financial statements of the Company, covered elsewhere in this Annual Report and investment section in Management Discussion & Analysis.

HUMAN RESOURCE DEVELOPMENT

Your Company is a pioneer in providing end-to-end Straight Through Processing (STP) solutions to Financial markets. Our solutions cover all stages of a trade life cycle from Pre-trade, Trade to Post-trade and delivers high value single-point transaction fulfilment.

Technology and Innovation is our DNA that guides all that we do. We have a very diverse employee base with myriad backgrounds and skill sets. Our financial and domain knowledge experts complement the efforts of technology experts in building world-class global trading platforms. We derive our support from the repertoire of unmatched experience and expertise of our leadership, and members of our Board of Directors.

We believe that an organization''s most valuable resource is its people. It is the attitude, skills, and knowledge of the human resource, which gives an organization its competitive edge, and can add value for years. Our ''intellectually-stimulating'' work culture and great learning opportunities have helped us retain people.

We believe that being driven by commitment, aided by technology and our quality practices, have made FTIL a great place to work. It is a matter of pride that over 50% of our employees are with this company for over five years and our attrition rate is amongst the lowest in the industry.

At Financial Technologies, we strongly believe in open communication at all times, across levels. Varied communication channels, such as Departmental meets, HOD meets, HR Zone (e-HR), Group HR Communication, and HR4U e-mail facility, have ensured that the HR team is always around the corner and is available to listen to and help human resources. All of our processes are fully automated and online thus ensuring that information is available at fingertips for employees as well as speed in operations.

As of 31st March, 2014, FTIL had employee strength of 1005.

We have a healthy mix of competent professionals across levels, we are structured as:

subsidiaries

Further to the Directors Report 2012-13, your Company would like to provide further update on National Spot Exchange Limited ("NSEL"):

a) During the year, Writ Petitions (WP), Public Interest Litigation (PIL), Civil Suits have been filed against the Company in relation to NSEL event, wherein the Company has been made a party in the Civil Suits and the WP In the said proceedings certain reliefs have been claimed against the Company, inter alia, on the ground that the Company is the holding company of NSEL. These matters are pending before the Hon''ble Bombay High Court for adjudication. The Company has denied all the claims and contentions in its reply. There is no privity of contract between the Company and the Petitioners. Based on legal advice, the management is of the view that the parties who have filed the WP PIL and Civil Suits would not be able to sustain any claim against the Company. The matter is pending for hearing before the Hon''ble Bombay High Court.

b) First Information Report (FIR) has been registered against various parties, including the Company, with the Economic Offences Wing of the Mumbai Police (EOW) in connection with the NSEL event. After investigation, EOW has filed charge-sheet on 06th January, 2014, 4th June 2014 and 4th August 2014 and it is pertinent to note that so far the Company has not been named in the said charge-sheets.

During the year under review, your Company has reduced/divested its stake in the its subsidiaries/ associate companies to comply with certain regulatory

requirements and for enhanced concentration on the core expertise business of your Company:

During the year under review, your Company has reduced its stake in IEX to comply Central Electricity Regulatory Commission (Power Market) Regulations, 2010 ("Regulations"). According to said Regulations your Company was required to bring down its shareholding in IEX to the extent of 25% within the time prescribed (with extensions, if any). Your Company was holding 30.14% of total issued and paid-up share capital on fully diluted basis in IEX till September 2013 and in order to comply with the Regulation, your Company has diluted 5% of the issued and paid up equity share capital of IEX during the year.

National Bulk Handling Corporation Limited (NBHC): During the year under review, Your Company alongwith other shareholders entered into a share purchase agreement for sale of 100% equity shares in the NBHC in order to preserve the business developed and value generated over the years in this subsidiary of the Company. The sale transaction was completed in April 2014.

Singapore Mercantile Exchange Limited (SMX) and SMX Clearing Corporation Limited (SMXCCL): Financial Technologies Singapore Pte. Limited is a wholly owned subsidiary of your Company which was incorporated as per regulatory requirement of Monetary Authority of Singapore (MAS) only to hold shares of SMX, an approved exchange by MAS, Singapore and SMXCCL, the Clearing Corporation. Your Company divested all its stake in the SMX and its clearing house SMXCCL, through Financial Technologies Singapore Pte. Limited.

Your Company is a promoter and anchor investor of MCX, the country''s leading commodity exchange. Your Company was holding 26% of the issued and paid-up share capital of MCX out of which 20% of total issued and paid up share capital of MCX was subject to lock- in upto March 7, 2015 in accordance with the SEBI (ICDR) Regulations, 2009. Without prejudice to rights and contentions raised in Writ Petition filed by your Company challenging the validity & propriety of the order dated December 17, 2013 passed by the Forward Markets Commission, your Company initiated process of divestment of its shareholding in MCX. Accordingly, your Company has sold 6% shares in the open market in July 2014 and entered into a Share Purchase Agreement dated July 20,2014 with Kotak Mahindra Bank Limited for sale of 15% shares in MCX subject fulfillment of conditions precedents and receipt of regulatory approvals.

Your Company has also initiated the process of selling its investments in some of the non-operative subsidiaries of the Company namely, Riskraft Consulting Limited, Boursa India Limited, Takshashila Academia of Economic Research Limited and Trans-global credit and Finance Limited.

Subsidiaries of Bourse Africa (Botswana) Limited (step- down subsidiaries) of the Company namely Bourse Uganda Limited, Bourse Africa (Kenya) Limited, Bourse Exchange Nigeria Ltd. and Bourse Zambia Limited, which are based in Africa are under process of voluntary winding up as they have not yet initiated any business and operations and your Company does not envisage any business operations in these entities in near future. One of such subsidiaries, Bourse Tanzania Limited was wound-up as on 28th May 2014 and was notified in the local gazette as on 27th June 2014.

Due to the ongoing investigations of the matter of National Spot Exchange Limited (NSEL) and Indian Bullion Market Association Limited (subsidiary of NSEL) by various agencies/regulatory authorities, the accounts for the Financial Years 2012-13 and 2013- 14 of NSEL & IBMA are not yet finalized. Hence, your Company is unable to attach the Consolidated Financial Statements. However, statement pursuant to Section 212 of the Companies Act, 1956 containing the details of subsidiaries of the Company (excluding NSEL & its subsidiaries) and Balance Sheets, Profit and Loss Account, Directors Reports and Auditors'' Report of the subsidiaries of the Company (excluding NSEL and its subsidiaries) are enclosed in this Annual Report 2013- 14.

As soon as NSEL and its subsidiaries accounts are finalized, audited and approved, your Company will announce the Consolidated Financial Statements of the Company and will intimate the same to the stock exchanges. Company will also upload such Consolidated Financial Statements on the Company''s website. In compliance with the MCA circular, your Company will make available Consolidated Financial Statements along with Section 212 statement (including NSEL and its subsidiaries) upon written request by any shareholder of the Company interested in obtaining the same at any point of time.

The statement pursuant to Section 212 of the Companies Act, 1956, containing details of subsidiaries of the Company, forms a part of this Annual Report.

RELATED PARTY TRANSACTIONS

Your Company, as a part of its core business strategy, promotes and invests in new ventures that utilize your Company''s technological capabilities and domain expertise by way of subsidiary companies setting up various Ventures. Your Company carries out transactions with related parties on an arms-length basis.

Statement of these transactions given in the Notes to Accounts in compliance of Accounting Standard AS-18, which forms a part of this Annual Report.

EMPLOYEES STOCK OPTION PLAN (ESOP)

During the year under review, no stock options were granted or exercised under ESOP Scheme 2009 and ESOP Scheme 2010. As on 31st March 2014, 6,14,495 and 6,03,406 stock options under ESOP Scheme 2009 and ESOP Scheme 2010 respectively, are in force.

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of Guidelines of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, as amended, has been provided in Annexure "B" in this Report.

The erstwhile Remuneration and Compensation Committee at its meeting held on 06th August 2014 approved the re-pricing of outstanding Options granted under the ESOP 2009 and 2010 schemes. The Options shall be re-priced at a discount of 25% on the closing price of the day prior to the meeting of the Nomination and Remuneration Committee to be held, post approval of shareholders in the ensuing AGM. The erstwhile Remuneration and Compensation Committee also approved the extension of exercise period of outstanding Options granted under the 2009 and 2010 schemes for a period of 3 years from the vesting date.

QUALITY

Your Company continues to maintain a Customer and Quality centric approach. In line with this approach, your Company has successfully cleared the rigorous surveillance audit for certification to ISO 9001:2008 Quality Management Systems standard. Further, your Company continues to have a proactive Risk Management approach, and conducts risk assessment activities on a yearly basis.

In addition to the above the Company maintains its commitment towards information security and has successfully cleared the ISO 27001:2013 surveillance audit too during FY 2013-14. This certification provides reassurance to all stakeholders that your Company rates information security very high, and necessary measures are taken to ensure that non compliances and vulnerabilities are addressed.

Your Company also has an effective Environment policy and is governed by it. In this regard, it has also cleared the ISO 14001:2004 re-certification audit, and continues to monitor its environment management plan, which is developed on the basis of the "Environment Review".

Your Company has also aligned its in-house IT services to the ISO 20000-1:2011 Standard which ensures that the IT service Management of the company follow best practices and continues to monitor the services against the SLAs provided. Your Company was recertified in 2014.

CORPORATE SOCIAL OPPORTUNITY (CSO)

Your Company believes that by involving employees it is merely integrating its business vision with what it values the most - its people.

Our CSR activities provide a platform to the employees to help them transition from being well-wishers to responsible citizen by participating in societal activities like blood donation, clothes donation, stationery donation, etc. Our "Reach Out" initiative empowers an employee to make a monthly monetary contribution through payroll deduction to NGOs, whose activities benefit children, women, disabled and the terminally ill. All donations are completely voluntary and employees have full control over the amount they wish to donate.

We also provide an enabling platform to NGOs to showcase and sell their products at our premises and our employees wholeheartedly participate in this social cause.

Our CSO initiatives have been a great success and draw a huge response from the employees. The innovative CSO initiatives are closely linked to our practices, events and policies to ensure successful involvement of all stake holders.

During the year your Company has formed Corporate Social Responsibility Committee comprising two Independent Non-executive Directors and one Whole Time Director of the Company. Please refer Corporate Governance Report for detailed composition and terms of reference of the said Committee.

RISK MANAGEMENT

Your Company has a risk identification and management system. In the process of risk management, the risk management system continuously identifies risks which are related to business, strategy, operations, market, finance, statutory or legal, technology system and overall internal control systems of the Company.

INSURANCE

Your Company''s land and building, equipments, automobiles, stores and spares etc. are adequately insured against major risks. Your Company also has appropriate insurance cover primarily for life, mediclaim and accident insurance for all the employees.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has a robust Management Information System which forms an integral part of control mechanism. The Internal control system is improved and modified on an on-going basis to meet the changes in business conditions, accounting and statutory requirements. Internal Audit plays a key role to ensure that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Internal Auditors independently evaluate the adequacy of internal controls and audit majority of the transactions in value terms.

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, stipulated by Clause 49 of the Listing Agreement, is annexed hereto, and forms part of this Annual Report.

A Certificate from the Auditors of the Company confirming compliance with Corporate Governance norms, as stipulated in Clause 49 of the Listing Agreement, is annexed to the report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS statement

Management Discussion and Analysis Statement forms part of this Annual Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mr. Dewang Neralla (DIN 00107134), Director of your Company, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer himself for re-appointment.

During the year under review, Mr. C. Kamdar (DIN 00348385), Mr. R. Devarajan (DIN 02604441), Mr. P R. Barpande (DIN 00016214), Mr. C. M. Maniar (DIN 00034121), Mr. N. Balasubramanian (DIN 00288918), Mr. T. C. Nair (DIN 02689698) Independent Directors and Mr. Ravi Sheth (DIN 00022121), non-executive Director have ceases to be Directors on the Board of the Company and its Committees. Your Directors place on record their appreciation for the valuable advice and guidance provided by Mr. C. Kamdar, Mr. R. Devarajan, Mr. P. R. Barpande, Mr. C. M. Maniar, Mr. N. Balasubramanian, Mr. T. C. Nair and Mr. Ravi Sheth, during their association with the Company. It is to inform you that Mr. C. M. Maniar passed away on June 29, 2014 after brief illness. Your Directors express their condolences on demise of Mr. C. M. Maniar.

Considering the cessation of the Directors, Mr. Venkat Chary IAS (Retd.) (DIN 00273036), Mr. Achudanarayanan Nagarajan IAS (Retd.) (DIN 02107169), Justice Rajan J. Kochar (Retd. Judge of Bombay High Court) (DIN 06710558) and Mr. Rajendran Soundaram (DIN 02686150), having wide experience in banking domain, were appointed on the Board of the Company as Non- executive Independent Directors.

Mr. Venkat Chary, Non-executive Independent Director was appointed as non-executive Chairman of the Company by the Board of Directors of the Company.

Pursuant to the provisions of Clause 49 of the Listing Agreement, where the Chairman of the Board is a non- executive director, at least one-third of the Board should comprise independent Director and as per Section 149 of the Companies Act 2013 read with relevant Rules thereto, every listed company shall have at least one-third of the total number of directors as independent directors. Your Company has 4 (Four) Non-executive Independent Directors who are Independent Directors pursuant to the aforesaid provisions. Based on the present composition of the Board of Directors and the number of Independent Directors, the Company complies with this requirement.

Your Company is proposing to bring the appointment of Independent Directors in line with the provisions of the Companies Act 2013 by confirming them in the ensuing Annual General Meeting. Pursuant to the provisions of the Companies Act, 2013, the period of appointment of Independent Directors shall be five consecutive years from the date of their appointment at Annual General Meeting and they are not liable to retire by rotation.

As per the information available with the Company, none of the Directors of the Company is disqualified for being appointed as a Director as specified in Section 274 of the Companies Act, 1956, as amended and Section 164 of the Companies Act 2013 including any amendments or re-enactment thereto.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that in preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

b. that they have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the Company affairs, and profit or loss of the Company, at the end of the financial year;

c. that they have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

BUSINESS RESPONSIBILITY REPORT

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, amended the Listing Agreement to include the Business Responsibility Reporting in Annual Reports of top 100 listed entities. As per the said Circular SEBI mandated that top 100 listed entities, based on market capitalization at BSE and NSE, include Business Responsibility Report as part of their Annual Report describing the initiative taken by the companies from Environmental, Social and Governance Perspective.

The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement is not applicable to your Company for the financial year ended March 31, 2014.

AUDITORS

Your Directors would like to inform you that the Company has received a letter dated 9th June 2014 from the Statutory Auditors M/S Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (Regn. No. 117366W / W-100018), conveying their unwillingness to continue as the Statutory Auditors of the Company w.e.f. 09th June 2014.

Pursuant to provisions of Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014, any casual vacancy caused in the office of the Statutory Auditors of the Company shall be filled by the Board of Directors within thirty days of such resignation, but if such casual vacancy is due to resignation of the Statutory Auditors, such appointment shall also be approved by the Company at a general meeting convened within three months of the recommendation of the Board and the Auditor shall hold the office till the conclusion of the next annual general meeting.

Considering the casual vacancy in the office of Statutory Auditors, the Company has vide its letter dated 20th June 2014 approached M/s Sharp & Tannan Associates, Chartered Accountants, Mumbai (Regn. No. 109983W); to act as the Statutory Auditors of the Company. M/s Sharp & Tannan Associates, have conveyed their willingness to act as Statutory Auditors of the Company vide their letter dated 21st June 2014 and have given their willingness to be appointed as the Statutory Auditors of the Company subject to the approval of shareholders in the ensuing Annual General Meeting, the Board of Directors has appointed M/s Sharp & Tannan Associates as Statutory Auditors of the Company for a period of 5 years.

In view of the above, the Statutory Auditors of your Company, M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai, shall hold office from the date of their appointment by the Board of Directors till the conclusion of this Annual General Meeting and shall, subject to your approval, hold the office of statutory auditors from the conclusion of this Annual General Meeting until the conclusion of the Sixth Annual General Meeting of the Company to be held after this meeting.

It also states that their appointment, if made, is as per eligibility required to be confirmed under Section 139 of the Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.

Your Directors recommend the appointment of M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai, as the statutory auditors of your Company at the ensuing Annual General Meeting.

STATUTORY INFORMATION

i. Fixed Deposits

During the year, your Company has not accepted or invited any deposits from public.

ii. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1) (e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988, are given in Annexure "A" of this Report.

iii. Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. Details of the amounts transferred to Investor Education and Protection Fund are covered elsewhere in this Annual Report.

iv. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the name and other particulars of the employees as required to be set out in the Annexure to the Directors'' Report are set out as Annexure "C" to this Directors'' Report.

v. "Group"

The list of Group companies/Associates/joint Ventures where control exists and forms part of this Annual Report.

vi. Special Business

As regards the items mentioned in the Notice of the Annual General Meeting related to Special Business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Members'' attention is drawn to these items and Explanatory Statement annexed to the Notice.

ACKNOWLEDGEMENT:

Your Directors place on record their gratitude to the Central Government, State Government, clients, vendors, financial institutions, bankers and business associates for their assistance, co-operation and encouragement extended to your Company.

For the continued support of Investors, business associates and unstinting efforts of colleagues, your directors also wish to place on record their sincere thanks and appreciation.

For and on behalf of the Board

Place: Mumbai Venkat Chary Dewang Neralla Date: 9th August 2014 Chairman Whole-time Director


Mar 31, 2013

To, The Members,

The Directors present the Twenty Fifth Annual Report of your Company together with the Audited Statement of Accounts for the year ended 31st March, 2013.

FINANCIAL PERFORMANCE pin million, except per sharedata)

Standalone Consolidated

BBtH Current Year Previous Year Current Year Previous Year Particulars 2012-13 2011-12 2012-13 2011-12 Total Income 6,574.21 7,944.07 9,559.93 8,343.00

Total Operating Expenditure 1,895.71 2,172.10 5,560.04 5,103.90

EBITDA 4,678.50 5,771.97 3,999.89 3,239.10

Interest 428.37 304.42 979.98 671.78

Depreciation/ amortization 225.40 173.01 326.82 316.40

Profit before tax 4,024.73 5,294.53 2,693.09 2,250.92

Provision for taxation 795.92 514.24 1,425.46 620.89

Profit after Tax/Net Profit for the year 3,228.81 4,780.29 1,267.63 1,630.03

Add: Net share of profit in associates 1,020.36 1,028.31

Add: Net minority interest in profit of subsidiaries (13.60) (17.82)

Profit after Tax/Net Profit for the year 3,228.81 4,780.29 2,274.39 2,640.52

Add: Balance brought forward from previous year 17,951.35 125.49 9,090.04 7,404.65

Balance available for appropriation 21,180.16 905.78 11,364.43 10,045.17

Appropriations

Final dividend (proposed) 92.16 92.16 92.16 92.16

Interim dividend 276.47 966.47 276.47 276.47

Tax on dividend 60.51 59.80 61.69 59.80

Transfer to General Reserve 325.30 526.00 325.30 526.00

Transfer to Statutory Reserve 0.82 0.70

Transfer to Security Guarantee Fund 8.47 0

Balance carried forward to Balance Sheet 20,425.72 17,951.35 10,599.52 9,090.04

Earnings per share Basic 70.07 103.74 49.36 57.30

Diluted 69.48 103.74 48.42 57.30

RESULT OF OPERATIONS: Consolidated Financials

- During the year under review, the income from operations grew by 50% to Rs. 752 crores from

Rs. 501 crores for the year ended 31st March 2012.

- Net profit (excluding capital gain on sale/redemption of shares and diminution in long term investments) for the year ended 31st March 2013, increased by 239% to Rs. 227 crores from

Rs. 67 crores for the year ended 31st March 2012.

Standalone Financials

- The total revenue from operations for the year ended 31st March 2013 was at Rs. 4,509 million as compared to Rs. 4,255 million for the year ended 31st March 2012, an increase of 6%.

- The standalone profit after tax (excluding capital gain on sale/redemption of shares and diminution in long term investments) increased by 21% to Rs. 323 crores from Rs. 267 crores for the year ended 31st March 2012.

Qualification in Audit Report

During the year, there are no qualifications in the Auditor''s Report. However the Auditor''s report comprising of emphasis of matter with related to standalone and Consolidated Audit Report which has been covered elsewhere in this Annual Report including Management Response.

BUSINESS OVERVIEW

Fiscal Year 2012-13

Your Company''s approach has been multipronged, founded on the three pillars viz., Technology, Exchanges and Ecosystem Ventures that define its innovative growth model. The Technology

Vertical of your Company embraces Exchange Technology Solutions, Brokerage Solutions, Connectivity Solutions and Consulting Solutions.

Exchange Technology Solutions are enabling the world''s leading exchanges to seamlessly operate in cross-border markets. Keeping pace with the growing needs of the market, Company''s Exchange Technology Division has equipped its solutions to cater to fixed income markets as well as newer asset classes, viz. equity derivatives and currency options. This division implemented Energy Market Management System (EMMS) at Gulf Co-operation Council Interconnection Authority (GCCIA) to help seamless exchange of electricity between GCC and the Middle-East countries. GCCIA is a joint stock company subscribed by the six gulf countries (Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates and Oman) formed with the objective to provide reliable, competitive and sustainable transmission service.

Your Company also leads in India''s brokerage technology solutions space with ODINTM continuing to be the first choice of every brokerage house in India holding a major market share in the country''s electronic trading solutions space. This year, ODINTM''s capabilities were enhanced to integrate with new exchange segments – MCX-SX equity and derivative segments, Universal Commodity Exchange (UCX) commodity futures segment and in primary market for OFS (offer for sale) segment. Also, ISIN-based news integration was enabled with multiple vendors such as Heckyl and TickerPlant, among others.

Risk management system/processes (RMS) are being continually boosted and adapted to the changing global risks scenario and the regulatory structure, by your Company. During the year, RMS modules have been revamped and made more dynamic with addition of many advanced RMS parameters and features that cater to the growing needs of members to provide robust risk management service to their clients.

During the year under review, your Company launched a new tablet website solution designed to optimize user experience in the iPAD and other tablet markets. The Company also launched advanced version of browser-based trading interface and mobile-trading application to provide superior trading experience to customers over the internet. This has enabled customers to access the services anywhere and anytime with contextual interactions.

This year ODINTM Institutional went live on various execution-based algorithms, institutional order slicing mechanism (block release), IOI (indication of interest) functionality, smart order routing (SOR) and algo orders. Your Company has introduced FIX 24x7 functionality that enables the sell-side brokers to accept orders all day from buy-side clients who route orders from different time-zones across the world.

Another milestone was the addition of the Qualified Depositories Participants (QDP) product suite. These products are specifically developed for QDP as per the recent regulations laid down by SEBI to enable Qualified Foreign Investors (QFI) to participate in the Indian equity markets.

As an endeavor to establish our presence in the OTC Market, your Company launched a new forex trading product ‘FX-ELITE''. This solution is specifically developed for providing an automated electronic trading platform for intra-bank dealing of foreign exchange (spot and forward contracts) thus enabling a smoother workflow between the Central Treasury of a Bank and its branches.

Your Company''s Consulting Solution - ESG added to its services - Datacenter Hosting, which is a low latency proximity

hosting solution that helps clients to host their servers and connect with various exchanges efficiently using algorithm trading applications. ESG also added Information Security Awareness Programs that enable secured IT Infrastructure for clients.

Along with technological competences and domain expertise, your Company is today the world''s largest creator of green- field exchanges and complementing them with ecosystem ventures that strengthen the scope of financial markets. Its wide institutional framework of exchanges and ecosystem ventures formulate a comprehensive market structure not only in India but also globally.

In the commodity exchange space in India, MCX maintained its leadership position with a market share of 87.3% in the year. It has recorded the highest-ever daily turnover of Rs. 1,199.41 billion. MCX launched two new contracts – ‘Kapasia Khalli'' and ‘Silver 1000'' during the year.

NSEL, in its bid to enrich its e-Series bouquet of investment product, added the ‘e-Platinum''. It, also, undertook MSP pulses and oilseed procurement for SFAC in Gujarat, Maharashtra and Rajasthan and procured the agro-commodities worth over Rs. 2.39 cr. In a drive to bring coffee-growers under the umbrella of its services, NSEL signed a pact with Coffee Board of India to create a Warehouse Receipt-based electronic Spot Market for coffee beans.

Your Company''s another exchange venture in energy segment; IEX successfully completed 5 years and continues to be India''s first and premier power exchange with 95% market share. IEX recorded highest- ever cleared volume 91,675 MWh for delivery day 24th March, 2013 and unconstrained volume of 115,036 MWh for delivery day 31st March 2013 in Day-Ahead Market (DAM) segment. IEX recorded highest-ever REC traded in a single trading session - 309,892 (March 2013 session).

Among your Company''s international exchanges spread across Asia, Middle-East and Africa, SMX has successfully launched the negotiated trade facility across all its products and became a correspondent exchange of World Federation of Exchanges (WEF). SMX bagged 3 Awards at ‘FOW Awards for Asia 2012'', including the most innovative new contract launch by an Exchange for ‘SMEURUSD'' and ‘SMPEPPER''.

BFX became a member of the Bahrain Association of Banks (BAB). Additionally, BFX futures trading since its launch on 23rd November 2011 up to 31st March 2013, increased to USD 68.16 billion. This year BFX conducted several educational workshops titled ‘Understanding the Financial Derivatives Markets from Theory to Practice'' for university students in the Kingdom of Bahrain under its corporate social responsibility (CSR) initiatives.

GBOT collaborated with University of Technology, Mauritius, to promote education on financial markets through workshops, certification courses and simulation on GBOT markets. GBOT conducted over 50 EDGE (Empowerment & Development through ‘Global Financial Markets'' Education) workshops with in-house and external experts from the financial fraternity.

With respect to the ecosystem ventures, NBHC successfully associated with new banks and other financial institutions this year namely, Central Bank of India, Hadoti Kshetriya Gramin Bank, J&K Bank, Dombivli Nagari Sahakari Bank, Ratnakar Bank and L&T Finance Holdings. atom Technologies is a payment service provider providing payment processing through Internet, IVR,

Mobile and POS. atom Technologies provides financial inclusion technology solutions combining mobile and biometric technologies, and micro-finance products. Amongst other developments, atom Technologies launched IMPS based payment options, and mobile banking. Additionally, it has enhanced its payments portfolio to include multi bank EMI.

Among other notable developments, TickerPlant incorporated new functionalities in its product offerings with commissioned enhancements in decision support tools, pivot point analytics and technical indicators like Ichimoku and smoothened RSI. It has seamlessly integrated MCX-SX Cash and F&O segments, and ACE exchange.

Detailed information on each of these business lines and their respective ventures has been covered elsewhere in this Annual Report.

DIVIDEND

The Company follows a stable dividend payout policy. Your Company has paid consecutive dividend for last 29 quarters which is in accordance with sustainable dividend payout policy of the Company and linked to its long term growth objectives. During the year under review, your Company paid three interim dividends totaling Rs. 276.47 million (Rs. 6 per share on par value of Rs. 2/- per share). The Directors recommended a final dividend of Rs. 2/- per share, subject to the approval of the shareholders at the ensuing Annual General Meeting. The total dividend – including interim and final – aggregated Rs. 8/- per share, for the financial year ended 31st March 2013 (previous year Rs. 8/- per share on par value of Rs. 2/- each). The total appropriation on account of interim and final dividend and tax thereon amounts to Rs. 429.15 million.

The final dividend, if approved, will be paid to those members whose names appear in the Register of Members as on the date of the Annual General Meeting.

The break-up of the dividend payouts are as under:

(Rs. in million, except dividend per share data)

Final Interim Dividends

Dividend

Particulars 1st Interim 2nd Interim 3rd Interim Proposed TOTAL

Dividend per share 2 2 2 2 8

Dividend 92.16 92.16 92.16 92.16 368.64

Tax 14.95 14.95 14.95 15.66 60.51

TOTAL 107.11 107.11 107.11 107.82 429.15

TRANSFER TO RESERVES

The Company proposes to transfer Rs. 325.30 million to General Reserve out of the amount available for appropriations and an amount of Rs. 20,425.72 million is proposed to be retained in Profit and Loss Account.

SHARE CAPITAL

There was no change in the Share Capital of the Company during the year under review. As on 31st March 2013, the paid-up equity Share Capital of your Company stood at Rs. 92.16 million comprising 46,078,537 equity shares of Rs. 2/- each.

INVESTMENT

At the end of FY 2012-13, your Company''s Investments (current non- current) stood at Rs. 22,150.76 million, as compared to Rs. 17,380.39 million in the previous year, a healthy increase of 27% over the previous year. The total investment mainly comprised of investment in mutual funds, subsidiaries, joint venture and associate companies. For more details, please refer to the audited financial statements, covered elsewhere in this Annual Report.

HUMAN RESOURCE DEVELOPMENT

Your Company is an entrepreneur driven organization which is managed by industry professionals and stalwarts.

High learning and growth opportunities have seen many employees grow to leadership ranks within a short span of time. Sense of Organization pride and belonging is high, which has resulted in a lower attrition rate and high retention of talent.

Your Company believes in improving its human capital by way of imparting development programs and trainings. During the year under review your Company launched a number of programs across the board ranging from self-development, soft skill enhancements and leadership programs to name a few. During the year a certification program to evaluate and benchmark technical skills for employees and to have a skill inventory in the organization was organized. Your Company also launched leadership and soft skills building programs for middle and junior management respectively. All processes with respect to human resources are fully automated and online thus ensuring that information is available at fingertips for employees as well as speed in operations.

Your Company believes that being driven by commitment, aided by technology and quality practices, Financial Technologies is a great place to work.

As of 31st March 2013, the total employee strength (excluding Group Companies) stood at 1,186.

AWARDS/RECOGNITION

Awards and recognition received by your Company and its associate and subsidiary companies during the year is covered elsewhere in this Annual Report.

SUBSIDIARIES

As per Section 212 of the Companies Act, 1956, Company is required to attach the Directors'' Report, Balance Sheet and Profit and Loss of its subsidiaries.

In view of the general exemption granted by the Ministry of Corporate Affairs, the Balance Sheet, Profit and Loss Account,

Report of the Board of Directors and Auditors of the Subsidiaries are not attached and do not form a part of this Annual Report.

These documents will be made available upon written request by any shareholder of the Company interested in obtaining the same. However, the financial data of the subsidiaries has been furnished under ''Statement Regarding Subsidiary Companies'', which forms a part of this Annual Report. Further, pursuant to the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company includes financial information of its subsidiaries.

The statement pursuant to Section 212 of the Companies Act, 1956, containing details of subsidiaries of the Company, forms a part of this Annual Report.

RELATED PARTY TRANSACTIONS

Your Company, as a part of its core business strategy, promotes and invests in new ventures that utilize your Company''s technological capabilities and domain expertise by way of subsidiary companies setting up Exchanges or Ecosystem Ventures. Your Company carries out transactions with related parties on an arms-length basis.

Statement of these transactions given in the Notes to Accounts in compliance of Accounting Standard AS-18, which forms a part of this Annual Report.

EMPLOYEES STOCK OPTION PLAN (ESOP)

During the year under review, the Committee issued 74,350 and 112,280 stock options under ESOP Scheme 2009 and ESOP Scheme 2010, respectively, in lieu of lapsed/cancelled stock options at an exercise price of Rs. 807.70 per share.

As on 31st March 2013, 892,500 and 880,955 stock options under ESOP Scheme 2009 and ESOP Scheme 2010, respectively, are in force.

Requisite disclosure in respect of the Employee Stock Option Scheme in terms of Guidelines of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Share Purchase Scheme) Guidelines 1999, as amended, has been provided in Annexure "B" in this Report.

QUALITY

Streamlined processes, customer orientation, and Information Security have always been of paramount importance in your Company''s business agenda. In continuation with its quest for quality driven services, your Company has successfully cleared its surveillance audit for ISO 9001:2008, after rigorous audits across its business operations.

Besides effective processes, your Company continues to maintain an effective Information Security driven culture. Its commitment to maintain confidentiality, integrity, and availability of critical information can be witnessed through the retaining of the ISO 27001:2005 certificate for Information Security. Your Company continues to maintain international standards in the area of information and data security.

Further, your Company continues to maintain best-in-class IT services, and has upgraded its certification for Information Technology Service Management. FTIL has successfully cleared the re-certification audit for ISO 20000:2011 for its Service Management which is based on the ITIL© framework. IT services within FTIL are aligned with best practices as mandated by this international ISO standard.

This year, your Company has gone a step ahead, and decided to showcase its dedication towards sustaining the Environment. Your Company has achieved the ISO 14001:2004 certification for effective Environment Management Standards, and for being an Environment-Friendly organization.

The above certifications are in line with our vision of becoming a globally recognized Company that provides high quality software and business solutions.

CORPORATE SOCIAL OPPORTUNITY (CSO)

During the FY 2012-13, Financial Technologies undertook a review to assess its business implications on society and the environment. Thus, CSO is conceptually integrated into the core businesses with the value proposition of being steady contributors to inclusive and sustainable growth through co- creation of business and social value. The Group CSO function is focused on reviewing material social and environmental impacts and creating internal mechanisms for strengthening and reporting on these.

The key sustainability and inclusion aspects of the Financial Technologies are:

Inclusive growth across multiple value chains:

Given the nature of the group''s core businesses, innovation for inclusion is the overarching theme. Its commodity, financial assets and electricity trading exchanges are creating efficient and transparent markets, the most powerful change agents to democratize access to economic opportunities. Together with the ecosystem companies the commodity and financial exchanges impact stakeholders across various value chains, in trading activity, risk management, price discovery, payment and collateral management solutions and information empowerment. The energy exchange has provided a transparent and efficient platform for trading in electricity and Renewable Energy Certificates thus bringing down the demand-supply gap between buyers and sellers of power, with a positive impact on SME operations as well.

Inclusive product design:

MCX has created micro contracts that make price risk management accessible to small participants exposed to global commodity price volatility. NBHC has been instrumental in making agricultural commodity funding through warehouse receipts a real bankable proposition for banks with its integrated collateral management strategy and it issues receipts for values as small as Rs. 5,000. atom Technologies provides financial inclusion technology solutions combining mobile and biometric technologies, and micro-finance products. TickerPlant offers cost- effective, modular market data services compared with expensive bundled services from existing large players. These services provide information empowerment to farmers and small enterprises across smaller towns and rural India.

Financial market education:

Your Company strongly believes the importance of financial market education in enabling financial inclusion. Through its group ventures, it has been offering various financial market courses to increase awareness on:

1. Advantages of being a part of the formal banking system as against being unbanked.

2. Investing through transparent and efficient financial markets to augment personal growth.

3. Enhance return on personal savings by employing it in formal financial market instruments, contributing to economic development in the process.

Sustainable technology:

Your Company''s technological prowess supports green data centres, robust risk-management systems and environmentally efficient operations catering to various businesses as they expand their footprint.

Your Company continues to encourage and support employees who wish to contribute towards social causes and institutions, by offering suitable platforms and an annual calendar of events.

- Annual blood donation drive was held on 28th May 2012 in association with BSES Hospital (Rotary Blood Bank).

- As part of our commitment to our planet, World Environment Day (WED) 2012 - June 5th was celebrated at the office. There was an awareness campaign with employees in alignment with the UNEP – (United Nations Environment Programme)''s theme for WED 2012: ‘Green Economy: Does it include youRs.'' as well as a photography talent recognition on the theme of ‘Human impact on our environment''.

- A donation drive was organized on 13th and 14th August 2012. Children''s clothes and shoes donated by employees were sent to Mumbai Mobile Creches (MMC). MMC is an NGO working for all over development of the children at construction sites. Their creches provide food, health facilities and education to children of construction site workers. Adults'' clothes and shoes along with books and stationery were sent to Goonj, the NGO, which channelized the donations for beneficiaries from underprivileged and vulnerable communities.

- Employees participated in the Standard Chartered Mumbai Marathon 2013 and funding so raised was pledged to Mumbai Mobile Creches (MMC).

- An exhibition of products made by children of NGO – Aseema was held on 14th August 2012. Aseema strives to protect and promote the rights of underprivileged children and women. Products ranging from dupattas, bags, lamp shades, coasters and cards were bought by employees. On Junior''s Day and Christmas, an exhibition of books by Pratham - an NGO which works towards providing quality education to underprivileged children in India - was held for the sale of low cost books. On 9th November 2012, on the occasion of Diwali, exhibition of products by members of IDOBRO

(a platform for small scale women artisan groups and entrepreneurs) was organized.

- On International Women''s Day

2013, FTIL facilitated another IDOBRO sale of handmade artifacts, food products, etc. for employees. We continue to partner with IDOBRO for ‘impact shopping'', at our office at key events through the year.

- Employees support five NGOs working for different causes through Reach Out - the monthly Payroll Giving programme. These NGOs are Akshay Patra Foundation, National Association for the Blind, Ashadeep Association, Cancer Patients'' Aid Association and Save the Children India.

- During the FY 2012-13 the Company has given donations to Charitable institutions for their various charitable activities like for education, health & medical etc.

- To support relief work for victims of the natural disaster that recent struck Uttarakhand, group employees collectively donated a sum of Rs. 3.14 Lakh. Relief material such as clothes, woolens and dry ration was collected. The monetary and relief material were sent to Goonj, the NGO, which is appropriately channelizing the donations for relief work in the region.

RISK MANAGEMENT

The Risk Management Committee (RMC) was constituted to assist the Board in overseeing responsibilities with regard to identification, assessment, control/mitigation and escalation/monitoring of risks. The RMC is mandated to review, upgrade and penetrate the process to address and minimize the operational and other risks associated with the Company and business units on a continuous basis.

INSURANCE

Your Company''s land and building, equipment, automobiles, stores and spares etc. are adequately insured against major risks. Your Company also has appropriate insurance cover primarily for error & omission, commercial general liability and directors & officers'' liability, apart from life, mediclaim and accident insurance for all the employees.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has a robust Management Information System which forms an integral part of control mechanism. The Internal control system is improved and modified on an on-going basis to meet the changes in business conditions, accounting and statutory requirements. Internal Audit plays a key role to ensure that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Internal

Auditors independently evaluate the adequacy of internal controls and audit majority of the transactions in value terms.

CORPORATE GOVERNANCE

The Company is committed to maintain the highest standard of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The report on Corporate Governance, stipulated by Clause 49 of the Listing Agreement, is annexed hereto, and forms part of this Annual Report.

A Certificate from the Auditors of the Company confirming compliance with Corporate Governance norms, as stipulated in Clause 49 of the Listing Agreement, is annexed to the report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

Management Discussion and Analysis Statement forms part of this Annual Report.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, and the Company''s Articles of Association, Mr. Ravi Sheth and Mr. C. M. Maniar, Directors of your Company, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

Mr. P. G. Kakodkar, Independent Director, has resigned from the Board and its Committees and he ceases to be the Director of the Company. Your Directors place on record their appreciation for the valuable advice and guidance provided by Mr. Kakodkar during his long association with the Company.

As per the information available with the Company, none of the Directors of the Company are disqualified for being appointed as a Director as specified in Section 274 of the Companies Act, 1956, as amended.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm:

a. that applicable accounting standards have been followed along with the explanation relating to material departures during the preparation of the annual accounts;

b. that they have selected such accounting policies and applied them consistently and they have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the Company affairs, and profit or loss of the Company, at the end of the financial year;

c. that they have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that they have prepared the annual accounts on a going concern basis.

BUSINESS RESPONSIBILITY REPORT

SEBI, vide its Circular CIR/CFD/DIL/8/2012 dated 13th August 2012, amended the Listing Agreement to include the Business Responsibility Reporting in Annual Reports of top 100 listed entities. As per the said Circular SEBI mandated that top 100 listed entities, based on market capitalization at BSE and NSE, include Business Responsibility Report as part of their Annual Report describing the initiative taken by the companies from Environmental, Social and Governance Perspective.

The Business Responsibility Reporting as required by Clause 55 of the Listing Agreement is not applicable to your Company for the financial year ended 31st March 2013.

AUDITORS

M/s. Deloitte Haskins & Sells - Chartered Accountants, the Statutory Auditors, will hold office until the conclusion of the ensuing Annual General Meeting. The Company has received necessary certificate from the Auditors, pursuant to Section 224 (1B) of the Companies Act, 1956 regarding their eligibility for re-appointment. The members are requested to consider appointment of

M/s. Deloitte Haskins & Sells as the Statutory Auditors at the ensuing Annual General Meeting.

STATUTORY INFORMATION i. Fixed Deposits

During the year, your Company has not accepted or invited any deposits from public.

ii. Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of

Employees) Rules, 1975, as amended, the name and other particulars of the employees are required to be set out in the Annexure to the Directors'' Report. However, as per the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report, excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Members who are interested in obtaining such particulars may write to the Company at its Registered Office.

iii. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars as prescribed under sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with Companies (Disclosure of particulars in report of the Board of Directors) Rules, 1988, are given in Annexure "A" of this Report.

iv. Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund. Details of the amounts transferred to Investor Education and Protection Fund are covered elsewhere in this Annual Report.

v. "Group"

The list of Group

Companies/Associates/Joint Ventures where control exists forms part of this Annual Report.

vi. Special Business

As regards the items mentioned in the Notice of the Annual General Meeting related to Special Business, the resolutions incorporated in the Notice and the Explanatory Statement relating thereto, fully indicate the reasons for seeking the approval of members to those proposals. Members'' attention is drawn to these items and Explanatory Statement annexed to the Notice.

ACKNOWLEDGEMENT

Your Directors place on record their gratitude to the Central Government, State Government, clients, vendors, financial institutions, bankers and business associates for their assistance, co- operation and encouragement extended to your Company.

For the continued support of Investors, business associates and unstinting efforts of colleagues, your directors also wish to place on record their sincere thanks and appreciation.

For and on behalf of the Board

Place: Mumbai Dewang Neralla P. R. Barpande

Date: 30th July 2013 Whole-time Director Director

 
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