Directors Report of Equitas Holdings Ltd.

Mar 31, 2022

2. Dividend

The Directors do not recommend any dividend for the year.

3. Capital Adequacy

The Capital Adequacy Ratio of the Company stands at 99.78% as of March 31, 2022 as against the minimum capital adequacy requirements of 30% stipulated by RBI.

4. Material Changes and Commitments

There have been no material changes and commitments between the end of FY 2021-22 and the date of this report, affecting the financial position of the Company.

5. Share Capital

During the year, there was no capital infusion and as on March 31, 2022, total paid up share capital stood at '' 341,79,01,150 comprising of 34,17,90,115 equity shares of ''10 each.

6. Investment in Subsidiaries

During the year under review, the Company had infused a capital of '' 100 lakh in its Subsidiary,

9. Fixed Deposits

The Company has not accepted any deposits from the public since inception.

10. Subsidiary Companies

The Company conducts its business through the following two subsidiaries:

Sl. No.	Name of the Subsidiary	Activities
1	Equitas Small Finance Bank Limited (ESFBL)	ESFBL is engaged in Banking business. Its various activities are outlined in the Management Discussion and Analysis Report, which forms part of this Report.
2	Equitas Technologies Private Limited (ETPL)	ETPL is engaged in freight facilitation business under the brand name of ''Wowtruck''. The Company provides a common platform for transporters and customers to connect online and carry out transactions on real time basis.

As required under Regulations 16(1) (c) & 46 of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Listing Regulations], the Board of Directors had approved the Policy for determining Material Subsidiaries ("Policy"). The details of the Policy are available on the website of the Company https://www.equitas.in/pdf/EHL_ Policy_Materiality.pdf.

11. Corporate Social Responsibility

The Company has laid down a Corporate Social Responsibility Policy, which is disclosed on our website https://www.equitas.in/pdf/EHL-CSR-Policy. pdf. In accordance with the Policy, the Company and its Subsidiary, ESFBL contribute higher of 5% of its previous year net profits as against the prescribed 2% of average net profits made during the preceding three financial years to Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF), registered public charitable trust(s) for carrying out CSR activities on its behalf. A report on CSR activities is enclosed as Annexure - I.

12. Scheme of amalgamation between Equitas Holdings Limited and Equitas Small Finance Bank Limited

The Board of Directors of Equitas Small Finance Bank Limited (ESFBL) and Equitas Holdings Limited (EHL) at their respective Meetings held on July 26, 2021 approved a Scheme of Amalgamation between EHL, ESFBL and their respective shareholders, contemplating amalgamation of EHL with ESFBL under applicable provisions of the Companies Act 2013. The Scheme was designed to achieve the RBI licensing requirement of dilution of promoter shareholding in the Bank and minimum public

Your Directors have pleasure in presenting the Fifteenth Annual Report together with the audited accounts of the Company both on a Consolidated and Standalone basis for the Financial Year ended March 31, 2022 (FY 2021-22).

1. Financial Results ('' in lakhs) Particulars	Consolidated		Standalone
	2021-22	2020-21	2021-22	2020-21
Total Revenue	4,04,490	3,82,069	1,922	17,773
Less: Total Expenditure	3,69,455	3,16,460	1,905	829
Profit before taxation and exceptional item	35,035	65,609	17	16,944
Exceptional item	6,119	-	6,119	-
Profit before taxation	28,916	65,609	(6,102)	16,944
Tax expenses	8,585	14,230	(176)	2,249
Profit after taxation[A]	20,331	51,379	(5,926)*	14,695
Other Comprehensive Income [B]	(231)	400	(2)	1
Total comprehensive Income for the year, net of tax [A B]	20,100	51,779	(5,928)	14,696
Transfer to Statutory Reserve	7,018	12,545	Nil	2,939
Transfer to Special Reserve	968	742	Nil	Nil
Transfer to Investment Fluctuation Reserve	125	198	Nil	Nil
Transfer to capital Reserve	106	1,761	Nil	Nil
*Refer note 14 of the notes to accounts of standalone financial statements

Equitas Technologies Private Limited by subscribing to its equity shares on a rights basis.

7. Core Investment Company

The Company continues to be categorised as a NonBanking Financial Institution - Non-Deposit taking-Systemically Important Core Investment Company (CIC-ND-SI) under the RBI Regulations.

8. Statutory Disclaimer

The Company is having a valid Certificate of Registration dated September 1, 2016 issued by the RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for discharge of any liability by the Company.

Neither there is any provision in law to keep, nor does the Company keep any part of the deposits with RBI and by issuing a Certificate of Registration to the Company, RBI neither accepts any responsibility nor guarantees the payment of deposits to any depositor or any person who has lent any sum to the Company.

shareholding (MPS) requirements prescribed by SEBI Regulations, in a manner that is in the best interests of and without being prejudicial to EHL, ESFBL, their respective shareholders or any other stakeholders.

Subsequently, ESFBL achieved the MPS through a Qualified Institutions Placement (QIP) of its shares, in February 2022, after obtaining the necessary approvals. QIP comprised of issue of 10,26,31,087 equity shares of ''10/- each at premium of ''43.59 per share, aggregating to a fund raise of '' 550 crores. As a result of this QIP, the public shareholding in the Bank increased from 18.70% to 25.37%, thereby complying with the Minimum Public Shareholding (MPS) requirements prescribed by SEBI Regulations.

Consequently, the aforesaid Scheme was revised to include the change in capital structure arising from QIP as well as the necessary change in objects of the Scheme. The Scheme, so revised was approved by the Boards of EHL and ESFBL in their respective Meetings held on March 21, 2022. The Scheme was filed with the Stock Exchanges and RBI for necessary approvals/ sanctions. The RBI vide its letter dated May 6, 2022 has granted its NOC to the Scheme while other approvals are awaited.

Upon coming into effect of this Scheme and in consideration of the amalgamation of EHL with ESFBL, ESFBL, without any further application, act or deed, shall issue and allot to each of the equity shareholders of EHL as on the Record Date defined in the Scheme, 231 equity Shares of '' 10/- each credited as fully paid up of ESFBL, in respect of every 100 Equity Shares of '' 10/- each fully paid up held by them in EHL.

In this connection, one of the conditions advised by RBI vide their letter dated May 6, 2022, while conveying "no objection" to the proposal for amalgamation of the Company with ESFBL, was the divestment of shareholding of 100% paid up share capital of ETPL prior to the scheme of amalgamation taking effect.

Subsequently, the Board in its Meeting held on May 16, 2022 had accorded its acceptance to the Letter of Intent received by the Company from a prospective buyer, Goldstone Technologies Limited ("GTL") for purchase of 100% equity shares of the Company''s Subsidiary, Equitas Technologies Private Limited ("ETPL") for an aggregate consideration of '' 8,00,00,000/- which would translate into '' 7,96,93,975/- for 2,50,00,000 equity shares held by the Company in ETPL.

13. Performance and Financial Position of Subsidiaries

As required under Section 129 of the Act read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing salient features of financial statements of each of the Subsidiaries has been appended to the financial statements.

14. Consolidated Financial Statements

The Consolidated Financial Statements which have been prepared in accordance with the Companies Act, 2013 ("the Act") and the relevant Accounting Standards form part of this Annual Report.

15. Management Discussion and Analysis Report

In accordance with the SEBI Listing Regulations, the Management Discussion and Analysis Report highlighting the business-wise details forms part of this Report.

16. Corporate Governance Report

A report on Corporate Governance containing the details as required under the SEBI Listing Regulations forms part of this Report.

The Executive Director & CEO and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) of SEBI Listing Regulations.

17. Business Responsibility Report

Business Responsibility Report is attached and forms part of this Report.

18. Board Meetings

During FY 2021-22, the Board of Directors of the Company met eight times. The details of the Meetings are given in the Report on Corporate Governance. The maximum interval between any two Meetings did not exceed 120 days, as prescribed in the Act.

19. Composition of Audit Committee

The Company has constituted an Audit Committee in terms of the requirements of the Act and Regulation 18 of SEBI Listing Regulations. The composition of the same is disclosed in the Corporate Governance Report.

20. Directors & Key Managerial Personnel

As on the date of this Report, the Company has Eight Directors out of which five are Independent Directors including a Women Independent Director. There were no changes in the Board of Directors of the Company during the year.

20.1 The Company has familiarised the Independent Directors of the Company on their roles and responsibilities, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarisation programme imparted to Independent Directors are available on the website of the Company https://www.equitas.in/ pdf/Familiarisation-Programme-for-Independent-Directors.pdf.

The terms and conditions of appointment of Independent Directors are also available on the website of the Company https://www.equitas.in/ pdf/EHL-ID-Appt-TermsnConditions.pdf.

20.2 Section 152 of the Act provides that two-thirds of the total number of Directors are liable to retire by rotation out of which one-third shall retire from office at every AGM. In terms of Section 149(13), the provisions of retirement of Directors by rotation shall not be applicable to Independent Directors and an Independent Director shall not be included in the total number of Directors liable to retire by rotation.

The Company has three Directors, viz., Mr Rangachary N, Mr Bhaskar S and Mr John Alex, liable to retire by rotation. As per the criteria stipulated under Section 152 of the Act for retirement by rotation, Mr Rangachary shall retire in the ensuing AGM of the Company and being eligible for re-appointment, offer himself for re-appointment. The Board recommends his re-appointment and the same is being placed for approval of the shareholders at the ensuing Annual General Meeting.

20.3 There were no changes in KMPs during the year.

As at March 31, 2022, the Company had the following KMPs:

Sl. No.	Name of the KMP	Designation
1	Mr John Alex	Executive Director & Chief Executive Officer (ED & CEO)
2	Ms Srimathy R	Chief Financial Officer (CFO)
3	Ms Deepti R	Company Secretary (CS)

20.4 Mr John Alex was appointed as Whole-time Director designated as Executive Director & Chief Executive Officer (ED & CEO) for a period of 3 years with effect from November 08, 2019. Pursuant to recommendation of Nomination, Remuneration & Governance Committee and subject to approval of shareholders, the Board in its Meeting held on May 28, 2022 has approved the re-appointment of Mr John Alex as Whole-time Director of the Company to be designated as ED & CEO, with effect from November 08, 2022 for a period of three years.

21. Declaration from Independent Directors

The Board has received declarations from the Independent Directors as required under Section 149(7) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned therein.

22. Evaluation of Board Performance

The performance of the Chairman, the Board, Audit Committee (ACB), Nomination, Remuneration & Governance Committee (NRGC), Corporate Social

Responsibility Committee (CSR), Stakeholders'' Relationship Committee (SRC) and that of individual Directors for the Year 2021-22 were evaluated on the basis of criteria approved by the Board. Some of the performance indicators, based on which the independent directors are evaluated include contribution to setting strategy and policy directions, concern for stakeholders, approach to issues placed before the Board, exercising of own judgement and voicing opinion freely.

All Directors were provided the criteria for evaluation which were duly filled in and sent to the Secretary to NRGC. The feedback was then collated and shared in confidence with the Chairman of NRGC.

The Chairman of NRGC discussed the same with the other Members of the Committee. Later at the Board Meeting, the Chairman of NRGC shared the feedback with the Chairman of the Board and the other Directors.

23. Policy on Directors'' appointment & remuneration

Pursuant to the provisions of Section 178 of the Act, the Company has formulated and adopted Policy on selection of Directors and Remuneration Policy which are disclosed on our website, under Policies Section. https://www.equitas.in/pdf/ EHLFit&ProperPolicy.pdf. https://www.equitas.in/ pdf/EHLRemunerationPolicy.pdf

24. Directors'' Responsibility Statement

The Board of Directors of the Company, to the best of their knowledge and belief, confirm that:

1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2) they 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 as at March 31, 2022 and of the loss of the Company for that period;

3) they have taken proper and sufficient care for the maintenance of 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;

4) they have prepared the annual accounts on a going concern basis;

5) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

6) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

25. Overall remuneration

Details of all elements of remuneration paid to all

the Directors are given in the Corporate Governance

Report. The Independent Directors of the Company

are not entitled to stock options.

None of the employees drew remuneration beyond the limits specified under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

26. Whistle Blower Policy/Vigil Mechanism

The Company has devised a Vigil mechanism for Directors and employees through the adoption of Whistle Blower Policy, details whereof is available on the Company''s website https://www.equitas.in/ pdf/EHL-Whistle-Blower-Policy.pdf.

27. Auditors

M/s T R Chadha & Co LLP, Chartered Accountants (TRC), having Registration Number (Firm Registration No: 006711N/ N500028) was appointed as Statutory Auditor of the Company for five years till the conclusion of the 18^th Annual General Meeting (AGM) to be held in the year 2025.

TRC is also one of the Joint Statutory Central Auditors of the Company''s Subsidiary, Equitas Small Finance Bank Limited (ESFBL). Pursuant to the Guidelines for Appointment of Statutory Central Auditors (SCAs)/ Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated April 27, 2021 recently issued by Reserve Bank of India (the "RBI Guidelines"), the same audit firm cannot be the auditor of both the RBI Regulated entities in the group. In view of the same, TRC had expressed their inability to continue as Statutory Auditor of the Company, post submission of limited review report for the quarter and half year ended September 30, 2021.

Consequent to the above, the Company, had appointed M/s V. Sankar Aiyar & Co, Chartered Accountants ("VSA"), having Registration Number (Firm Registration No: 109208W) as Statutory Auditor of the Company to hold office till the conclusion of Fifteenth Annual General Meeting of the Company to be held in the year 2022, through postal ballot on December 31, 2021. As per RBI guidelines on appointment of statutory auditors dated April 27, 2021, Auditors shall hold office for a continuous period of three years, subject to the firms satisfying the eligibility norms each year. Since VSA has already been appointed until the conclusion of 15^th AGM, they are eligible to continue for another two years. The Directors recommend

continuation of appointment of M/s V. Sankar Aiyar & Co, Chartered Accountants, as Statutory Auditors of the Company for a period of two years to hold office until the conclusion of 17^th Annual General Meeting of the Company to be held in the year 2024.

The Company has received the written consent(s) and certificate(s) of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Act and Rules issued thereunder, from M/s V. Sankar Aiyar & Co for their appointment in forthcoming AGM. Further, they have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI).

Auditor''s Report

There are no qualifications, reservations or adverse remarks made by the Statutory Auditor of the Company, M/s V. Sankar Aiyar & Co, Chartered Accountants, having Registration Number (Firm Registration No: 109208W) in their report on the financial statements for the FY 2021-22.

28. Details in respect of frauds, if any, reported by Auditors:

Pursuant to Section 143(12) of the Companies Act, 2013, the Statutory Auditor of the Company have not reported any instances of frauds committed in the Company by its officers or employees.

29. Secretarial Auditor

The Secretarial Audit Report of M/s B Ravi & Associates, Practising Company Secretaries for FY 2021-22 is enclosed as Annexure-III.

Your Company has complied with the applicable Secretarial Standards relating to ''Meetings of the Board of Directors'' and ''General Meetings'' during the year.

30. Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by Statutory Auditors or Secretarial Auditors

There are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditors or Secretarial Auditors.

31. Information as per Section 134 (3) (q) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014

During the Financial Year, the Company had no activity relating to conservation of energy or technology absorption. Also, there were no foreign currency earnings or outgo.

32. Details of Employees Stock Option Scheme

Nomination, Remuneration & Governance Committee constituted by the Board of Directors of the Company, administers the Employee Stock Option Schemes, formulated by the Company, from time to time.

Information as required under Section 62 of the Act and Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI Regulations):

Sl. No.	Information required	Particulars
1	Number of Options granted during the year	-
2	Number of Options vested during the year	4,599
3	Number of Options exercised during the year	-
4	Number of shares arising as a result of exercise of Options	-
5	Number of Options forfeited/ lapsed during the year	58,444
6	Exercise Price (?)	-
7	Money realized by exercise of Options (?)	-
8	Total number of Options outstanding	51,976
9	Option Granted but not vested	-
10	Options Vested but not exercised	51,976
11	Total number of Options available for grant	3,68,89,190
12	Variation of terms of options	Nil

Note: Refer Note 48 to the Standalone Financial Statements and Note 59 to the Consolidated Financial Statements.

Employee-wise details of options granted to

1. Key Managerial Personnel - Nil

2. Any other employee who receives a grant of

options in any one year of options amounting to five percent or more of options granted during that year: - Nil

3. Identified employees who were granted options

during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - Nil

Other details relating to Stock Options as required under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are displayed on the Company''s website https://www.equitas.in.

33. Particulars of contracts or arrangements with related parties

All the Related Party Transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business.

Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Act, in form AOC-2.

All Related Party Transactions as required under Indian Accounting Standard (Ind AS-24) are reported in Note 39 forming part of Financial Statements.

The Company''s Policy on dealing with Related Party Transactions is available on the Company''s website

https://www.equitas.in/pdfEHLPolicyonRelated

PartyTransactions.pdf

34. Risk Management

The Company is a Core Investment Company (CIC) and its operations are limited to being a CIC. The risks therefore primarily relate to investments made in its subsidiaries. The operations of each of the subsidiaries, the risks faced by them and the risk mitigation tools followed by them to manage these risks are reviewed periodically by the Risk Management Committees/Audit Committees and the Boards of the respective subsidiaries. The same are considered by the Risk Management Committee and Board of the Company, as well. Details of the same are covered in the Management Discussion and Analysis Report.

35. Internal Financial controls

The Company has clear delegation of authority and standard operating procedures. These are reviewed periodically by the Audit Committee of the Company. These measures help in ensuring adequacy of internal financial controls commensurate with the nature and scale of operations of the Company.

36. Loans/Guarantees /Investments

Details of loans, guarantees and investments covered under Section 186 of the Act are provided in Note 8 and 9 forming part of Financial Statements.

37. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment in accordance with The Sexual

Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received under the Policy. No complaint has been received by the Company under this Policy so far.

38. Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by Regulators or Courts or Tribunals impacting the going concern status and the future operations of the Company. Further, no penalties have been levied by RBI/any other Regulators on the Company during the year under review.

39. Annual Return

The Annual Return (MGT-7) as required under the Act is available at the website of the Company, https://www.equitas.in

40. Dividend Distribution Policy

The Dividend Distribution Policy of the Company is available on our website https://www.equitas.in/ polices.php

41. Depository System

As the Members are aware, the Company''s Equity Shares are tradable in electronic form. As on March 31, 2022, out of the Company''s total equity paid-up share capital comprising of 34,17,90,115 Equity Shares, only 97,723 equity shares were in physical form and the remaining shares were in electronic form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail themselves of the facility of dematerialization.

Acknowledgement

The Directors thank the investors and customers for reposing confidence in Equitas. The Directors gratefully acknowledge the guidance and support extended by RBI, SEBI, Stock Exchanges, Depositories and other statutory authorities. Your Directors place on record their sincere thanks to its valued constituents for their support and patronage. The Board also expresses its deep sense of appreciation to the employees at all levels for their unstinted commitment to the growth of Equitas.

For and on behalf of the Board of Directors

John Alex Rangachary N

ED & CEO Chairman

May 28, 2022 Chennai Bengaluru

---

Mar 31, 2018

To,

The Members,

Equitas Holdings Limited

The Directors have pleasure in presenting the Eleventh Annual Report together with the audited accounts of the Company on a Consolidated and Standalone basis for the Financial Year ended March 31, 2018 (FY 2017-18).

Financial Results

The summary of the Company’s financial performance, both on a Consolidated and Standalone basis for FY 2017-18 compared to the previous year, FY 2016-17 is given below:

(Rs. in lakh)

Particulars	Consolidated		Standalone
	2017-18	2016-17	2017-18	2016-17
Total Revenue	1,78,741.19	1,55,655.24	1,357.21	1,235.53
Less: Total Expenditure	1,73,624.78	1,30,499.15	515.15	485.23
Profit before taxation	5,116.41	25,156.09	842.06	750.30
Provision for taxation	1,981.15	9,219.52	298.62	282.13
Profit after taxation	3,135.26	15,936.57	543.44	468.17
Transfer to Statutory Reserve	904.48	3,812.56	108.70	93.70
Transfer to General Reserve	Nil	2,097.55	Nil	Nil

Dividend

The Directors do not recommend any dividend for the year.

Transfer to Reserves

Your Company has transferred a sum of Rs.108.70 lakh to Statutory Reserve as required under the Reserve Bank of India Act, 1934.

Capital Adequacy

The Capital Adequacy Ratio of the Company was 89.71% as of March 31, 2018 as against the minimum capital adequacy requirements of 30% stipulated by RBI.

Material Changes and Commitments

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate to and the date of this Report.

Share Capital

The Company, during the year, has issued in aggregate, 26,16,230 equity shares to the employees of the Company and its Subsidiaries under the Equitas Employees Stock Option Scheme, 2015.

Pursuant to the aforesaid issue and allotment of equity shares, the paid-up share capital of the Company stood at Rs.34,043.00 lakh as of March 31, 2018 as compared to Rs.33,781.37 lakh as of March 31, 2017.

During FY 2017-18, the Company had infused a capital of Rs.500.00 lakh in its Subsidiary, Equitas Technologies Private Limited by subscribing to its equity shares on a rights basis.

The State of Company’s affairs

The Company continues to be categorised as a Non-Banking Financial Institution - Non-Deposit taking - Systemically Important Core Investment Company (CIC-ND-SI) under the RBI Regulations. The Company is in compliance with the conditions of Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016, as amended.

Statutory Disclaimer

The Company is having a valid Certificate of Registration dated September 1, 2016 issued by RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for discharge of any liability by the Company.

Neither there is any provision in law to keep, nor does the Company keep any part of the deposits with RBI and by issuing a Certificate of Registration to the Company, RBI neither accepts any responsibility nor guarantees the payment of deposits to any depositor or any person who has lent any sum to the Company.

Fixed Deposits

The Company has not accepted any deposits from the public since inception.

Subsidiary Companies

The Company conducts its business through the following Subsidiaries:

Sl. No.	Name of the Subsidiary	Activities
1	Equitas Small Finance Bank Limited (ESFBL)	ESFBL is engaged in Banking business. Its various activities are outlined in the Management Discussion and Analysis Report which forms part of this Report.
2	Equitas Technologies Private Limited (ETPL)	ETPL is engaged in freight facilitation business under the brand name of ‘Wowtruck’. ETPL provides a common platform for transporters and customers to connect online and carry out transactions on a real time basis.

The Company has laid down a Policy for determining Material Subsidiaries which is available on our website https://www.equitas.in/pdf/EHL_Policy_Materiality.pdf.

There are no Associate or Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013 (“the Act”).

(Rs. in lakh)

Sl. No.	Particulars	1	2
1.	Name of the Subsidiary	ESFBL	ETPL
2.	Reporting period for the Subsidiary concerned, if different from the Holding Company’s reporting period	N.A.	N.A.
3.	Reporting currency and Exchange rate as on the last date of the relevant Financial Year in the case of Foreign Subsidiaries	N.A.	N.A.
4.	Share capital	1,00,594.34	2,009.60
5.	Reserves & surplus	1,03,780.92	(1,580.65)
6.	Total assets	13,30,995.83	482.12
7.	Total liabilities	13,30,995.83	482.12
8.	Investment in Shares/Mutual Funds	2,520.00	9.60
9.	Turnover (Revenue from operations)	1,78,392.75	302.79
10.	Profit/(Loss) before taxation	4,851.49	(625.41)
11.	Provision for taxation	1,668.35	0.00
12.	Profit/(Loss) after taxation	3,183.14	(625.41)
13.	Proposed Dividend	Nil	Nil
14.	% of shareholding	100.00%	99.52%

There are no Companies which have become or ceased to be Subsidiaries, Associate or Joint Ventures Companies during FY 2017-18.

There has been no change in the nature of business of the Company or its Subsidiaries.

Further, pursuant to the provisions of Section 136 of the Act, the audited financial statements in respect of Subsidiaries are available on the website of the Company.

Consolidated Financial Statements

The Consolidated Financial Statements which have been prepared in accordance with the Act and the relevant Accounting Standards form part of this Annual Report.

Management Discussion and Analysis

In accordance with the SEBI (Listing Obligations and Disclosure Reqirements) Regulations, 2015 [SEBI (LODR) Regulations] the Management Discussion and Analysis Report highlighting the business-wise details of ESFBL and ETPL forms part of this Report.

Corporate Governance

A report on Corporate Governance containing the details as required under the SEBI (LODR) Regulations forms part of this Report.

M/s S R Batliboi & Associates LLP, Statutory Auditors have certified that the Company has complied with the conditions of corporate governance as stipulated under SEBI (LODR) Regulations.

Corporate Social Responsibility

The Company has laid down a Corporate Social Responsibility Policy, which is available on our website https://www.equitas.in/pdf/EHL-CSR-Policy.pdf. In accordance with the Policy, the Company and its Subsidiary, ESFBL contribute higher of 5% of its net profits or 2% of average net profits made during the preceding three financial years, to Equitas Development Initiatives Trust, a Public Charitable Trust, for carrying out CSR activities on their behalf. The report on CSR is enclosed as Annexure - I.

Business Responsibility Report

Business Responsibility Report is attached and forms part of this Report.

Board Meetings

During FY 2017-18, the Board of Directors of the Company met six times. The Meeting details are given in the Report on Corporate Governance. The maximum interval between any two Meetings did not exceed 120 days, as prescribed in the Act.

Composition of Audit Committee

The Company has constituted an Audit Committee in terms of the requirements of the Act and Regulation 18 of SEBI (LODR) Regulations. The composition of the same is disclosed in the Report on Corporate Governance.

Board of Directors

As on the date of this Report, the Company has six Independent Directors including a Woman Director.

Directors & Key Managerial Personnel Change in Directors

Dr Parthasarathi Shome and Mr Kuppuswamy P T, Independent Directors have resigned from the Board w.e.f. April 21, 2017 and September 27, 2017 respectively.

Your Directors place on record their appreciation for the valuable advice and guidance provided by Dr Parthasarathi Shome and Mr Kuppuswamy P T during their tenure as Directors of the Company.

The Board of Directors of the Company at its Meeting held on October 26, 2017, had appointed Mr Raghavan M S and Mr Viswanatha Prasad S as Additional Directors of the Company w.e.f. October 26, 2017. Mr Raghavan M S subsequently resigned from the Board w.e.f. April 27, 2018.

Your Directors place on record their appreciation for the valuable advice and guidance provided by Mr Raghavan M S during his tenure as Director of the Company.

Resolution for appointment of Mr Viswanatha Prasad S as Director of the Company is being placed before the shareholders for approval at the ensuing Annual General Meeting (AGM) and the same has been included in the Notice of AGM. Brief profile of the above appointee has been annexed to the Notice of AGM.

The Company has familiarised the Independent Directors of the Company with their roles and responsibilities, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarisation programme imparted to Independent Directors are available on our website https://www.equitas.in/pdf/Familiarisation-Programme-for-Independent-Directors.pdf.

The terms and conditions of appointment of Independent Directors are also available on our website https://www.equitas.in/pdf/EHL-ID-Appt-TermsnConditions.pdf. Section 152 of the Act provides that two-thirds of the total numbers of Directors shall be liable to retire by rotation out of which one-third shall retire from office at every AGM. In terms of Section 149(13), the provisions of retirement of Directors by rotation shall not be applicable to Independent Directors and an Independent Director shall not be included in the total number of Directors liable to retire by rotation.

Accordingly, Mr Bhaskar S, ED & CEO, the only non-Independent Director, retires by rotation this year, and being eligible, offers himself for re-appointment. The Board recommends his re-appointment as Director of the Company. Appropriate resolution for his re-appointment is being placed for approval of the shareholders at the ensuing AGM.

Declaration from Independent Directors

The Board has received declarations from the Independent Directors as required under Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Evaluation of Board Performance

The performance of the Chairman, the Board, Audit & Risk Management Committee (ARMC), Nomination, Remuneration & Governance Committee (NRGC), Corporate Social Responsibility Committee (CSRC), Stakeholders’ Relationship Committee (SRC) and that of individual Directors for FY 2017-18 were evaluated on the basis of criteria approved by the Board. Some of the performance indicators, based on which the independent directors are evaluated include contribution to setting strategies and policy directions, concern for stakeholders, approach to issues placed before the Board, exercising of own judgement and voicing opinion freely.

All Directors were provided the criteria for evaluation which were duly filled in and sent to the Secretary to NRGC. The feedback was then collated and shared in confidence with the Chairman of NRGC.

The Chairman of NRGC discussed the same with the other Members of NRGC. Later at the Board Meeting, he shared the feedback with the Chairman of the Board and other Directors.

Policy on Directors’ appointment & remuneration

The Company has formulated and adopted Policy on selection of Directors and Remuneration Policy which are available on our website https://www.equitas.in/pdf/EHLFit&ProperPolicy.pdf and https://www.equitas.in/pdf/ EHLRemunerationPolicy.pdf

Directors’ Responsibility Statement

The Board of Directors of the Company, to the best of their knowledge and belief, confirm that:

1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2) they 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 as at March 31, 2018 and of the profit of the Company for that period;

3) they have taken proper and sufficient care for the maintenance of 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;

4) they have prepared the annual accounts on a going concern basis;

5) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively;

6) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Key Managerial Personnel (KMP)

Ms Srimathy R was appointed as CFO of the Company w.e.f. August 1, 2017 in the place of Mr Vasudevan S who had resigned with effect from close of office hours on July 31, 2017 and moved to ESFBL payroll. As at March 31, 2018, the Company had the following KMPs:

Sl. No.	Name	Designation
1	Mr Bhaskar S	ED & CEO
2	Ms Srimathy R	CFO
3	Ms Jayashree S Iyer	Company Secretary (CS)

Overall remuneration

Details of all elements of remuneration paid to the Directors are given in the Report on Corporate Governance. The Independent Directors of the Company are not entitled to stock options.

Details of remuneration as required to be provided under Section 197 of the Act, read with rules thereunder are given in Annexure - A.

Whistle Blower Policy/Vigil Mechanism

The Company has devised a Vigil mechanism for Directors and employees through the adoption of Whistle Blower Policy, which is available on our website https://www.equitas.in/pdf/EHL-Whistle-Blower-Policy.pdf.

Auditors

Statutory Auditors:

M/s S R Batliboi & Associates LLP, Chartered Accountants, were appointed as Auditors of the Company for a period of 5 years till the conclusion of 15^th AGM to be held in the year 2022. The Company has received a letter from them stating that they are eligible to continue as Auditors of the Company and are not disqualified for appointment under the Companies Act, 2013, the Chartered Accountants Act, 1949 and the rules and regulations made thereunder. The Directors recommend the ratification of appointment of M/s S R Batliboi & Associates LLP, Chartered Accountants, as Auditors of the Company from the conclusion of the ensuing AGM till the conclusion of 12^th AGM to be held in the year 2019.

Details in respect of frauds, if any, reported by Auditors:

There have been no frauds reported during FY 2017-18.

Secretarial Auditors:

The Secretarial Audit Report of M/s B Ravi & Associates, Practising Company Secretaries for FY 2017-18 is enclosed as Annexure-II.

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made by Statutory Auditors or Secretarial Auditors -

There are no qualifications, reservations, adverse remarks or disclaimers made either by the Statutory Auditors or Secretarial Auditors.

Information as per Section 134 (3) (q) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014

During FY 2017-18, the Company had no activity relating to conservation of energy or technology absorption. Also, there were no foreign currency earnings or outgo.

Details of Employee Stock Option Scheme

Since FY 2007-08, the Company has formulated and adopted several Employee Stock Option Schemes (ESOS) for the benefit of eligible employees of the Company and its Subsidiaries.

The Nomination, Remuneration & Governance Committee constituted by the Board of Directors of the Company, administers the ESOS.

Information as required under Section 62 of the Companies Act, 2013 and SEBI (Share Based Employee Benefits) Regulations, 2014 is as under:

Sl. No.	Information required	Particulars
1	Number of Options granted during the year	31,47,750
2	Number of Options vested during the year	46,97,597
3	Number of Options exercised during the year	26,16,230
4	Number of shares arising as a result of exercise of Options	26,16,230
5	Number of Options forfeited/ lapsed during the year	93,27,664
6	Exercise Price (‘)	164/156/151
7	Money realized by exercise of Options	Rs.1,425.93 lakh
8	Total number of Options granted but unvested	1,79,81,734
9	Total number of Options available for grant	2,03,18,627
10	Variation of terms of options	Nil

There were no material changes in the ESOS of the Company during FY 2017-18 and the same is in compliance with the relevant provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014.

Employee-wise details of options granted to

1. Key Managerial Personnel - Nil

2. Any other employee who receives a grant of options in any one year, amounting to five percent or more of options granted during FY 2017-18:

Name of the Employee	Designation	No. of options granted	Exercise Price (Rs.)	% of options granted
Mr Raghavan H K N	President - Outreach and Retail Banking, ESFBL	5,00,000	164.00	16
Mr Sanjeev Srivastava	President & Country Head - Liabilities, Branch Banking, Product & Wealth, ESFBL	4,00,000	156.00	13

3. Identified employees who were granted options during FY 2017-18, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant - Nil

Other details relating to Stock Options as required under SEBI (Share Based Employee Benefits) Regulations, 2014 are available on our website https://www.equitas.in/pdf/ESOSInformation.pdf.

Particulars of contracts or arrangements with related parties

All the Related Party Transactions that were entered into during FY 2017-18 were on an arm’s length basis and were in the ordinary course of business.

There are no transactions to be reported under Section 188(1) of the Act, in Form AOC-2.

All Related Party Transactions as required under AS-18 are provided in Note 24 forming part of Financial Statements of your Company.

The Company’s Policy on dealing with Related Party Transactions is available on our website https://www.equitas.in/pdf/EHLPolicyonRelatedPartyTransactions.pdf

Risk Management

The Company is a Core Investment Company (CIC) and its operations are limited to being a CIC. The risks therefore relate to investments made in its Subsidiaries. The operations of each of the subsidiaries, the risks faced by them and the risk mitigation tools followed by them to manage these risks are reviewed periodically by the Audit Committees and the Boards of the respective Subsidiaries. The same are considered by the Board of the Company, as well. Details of the same are covered in the Management Discussion and Analysis Report.

Internal Financial Controls

The Company has clear delegation of authority and standard operating procedures. These are reviewed periodically by ARMC of the Board. These measures help in ensuring adequacy of internal financial controls commensurate with the nature and scale of operations of the Company.

Loans / Guarantees / Investments

Details of loans, guarantees and investments covered under Section 186 of the Act, are provided in Notes 11, 13, 24 and 28 forming part of Standalone Financial Statements of your Company.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received under the Policy. No complaint has been received by the Company under this Policy so far.

Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by Regulators or Courts or Tribunals impacting the going concern status and the future operations of the Company. Further, no penalties have been levied by RBI/any other Regulators on the Company during FY 2017-18.

However, Equitas Small Finance Bank Limited (ESFBL), the wholly-owned Subsidiary of the Company was penalised for having commenced the business of distribution of third party products without obtaining prior approval of Reserve Bank of India.

ESFBL was formed by merger of three NBFC Subsidiaries carrying on the business of micro finance, vehicle finance and housing finance respectively. These Companies were arranging / distributing insurance for its borrowers, primarily to secure the loans in the event of their death or incapacitation due to accident or otherwise as well as insuring the asset which is secured to the loan, such as vehicles, property, etc. This legacy arrangement was continued after becoming a Small Finance Bank, however, there was an oversight in seeking RBI’s prior approval.

Soon after noticing this omission in an internal compliance review, ESFBL promptly reported the matter to RBI admitting its lapse and sought its approval for distribution of third party products. The approval was received from RBI vide letter dated December 29, 2017. RBI also levied a monetary penalty of Rs.10 lakh on ESFBL for the aforesaid omission to obtain prior RBI approval.

Extract of Annual Return

The Extract of Annual Return as required under the Act is enclosed as Annexure - III.

Dividend Distribution Policy

The Dividend Distribution Policy of the Company is available on our website https://www.equitas.in/polices.php Depository System

As the Members are aware, the Company’s equity shares are tradable in electronic form. As on March 31, 2018, out of the Company’s total equity paid-up share capital comprising of 34,04,29,976 equity shares, only 2,04,331 equity shares were in physical form and the remaining shares were in electronic form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail themselves of the facility of dematerialization.

Acknowledgement

The Directors thank the investors and customers for reposing confidence in Equitas. The Directors similarly express gratitude for the assistance and co-operation extended by RBI, SEBI, Stock Exchanges, Depositories and other statutory authorities. Your Directors record with sincere appreciation, the valuable contribution made by employees at all levels and look forward to their continued commitment to achieve further growth and take up more challenges to achieve the Mission and Vision of the Organisation.

For and on behalf of the Board of Directors

Bhaskar S Rangachary N

ED & CEO Chairman

Chennai Bengaluru

April 27, 2018

---

Mar 31, 2017

DIRECTORS'' REPORT

To,

The Members,

Equitas Holdings Limited

The Directors have pleasure in presenting the Tenth Annual Report together with the audited accounts of the Company for the Year ended March 31, 2017 (FY 2016-17).

Financial Results

The summary of the Company''s financial performance, both on a consolidated basis and standalone basis for FY 2016-17 compared to previous FY 2015-16 is given below:

(Rs, in lakh)

Particulars	consolidated		Standalone
	2016-17	2015-16	2016-17	2015-16
Gross Income	1,55,655.24	111,487.42	1235.53	819.72
Less: Total Expenditure	1,30,499.15	85,475.47	485.23	435.66
Profit before taxation	25,156.09	26,011.96	750.30	384.06
Provision for taxation	9,219.52	9,297.78	282.13	172.43
Profit after taxation	15,936.57	16,714.18	468.17	211.63
Transfer to Statutory Reserve	2697.05	3,410.00	93.70	42.40
Transfer to General Reserve	2097.55	Nil	Nil	Nil

dividend

The Directors do not recommend any dividend for the year.

Transfer to Reserves

Your company has transferred a sum of Rs, 93.70 lakh to Statutory Reserve as required under the Reserve Bank of India Act, 1934.

capital Adequacy

The Capital Adequacy Ratio of the Company was 81.60% as of March 31, 2017 as against the minimum capital adequacy requirements of 30% stipulated by RBI.

Material changes and commitments

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate to and the date of this Report.

iPo Update

The Company raised Rs, 720 crore through an Initial Public Offering (IPO) in April 2016, to fund the capital requirements of the subsidiaries. The Equity Shares of the Company were listed on BSE Limited and National Stock Exchange of India Limited on April 21, 2016. The entire proceeds of the IPO of the Company have been fully utilized in the manner specified in the prospectus, as detailed in Note No. 30 of the standalone financial statements for FY 2016-17.

share capital

During the year under review, the Company has made fresh issue of 6,54,54,545 Equity Shares in its IPO.

The Company has also issued in aggregate, 24,38,834 Equity Shares to employees of the Company and its Subsidiaries under the Equitas Employees Stock Option Scheme, 2015.

Pursuant to the aforesaid issue and allotment of Equity Shares, the paid-up share capital of the Company stood at Rs, 33781.37 lakh as at March 31, 2017 as compared to Rs,26992.04 lakh as at March 31, 2016.

investment in subsidiaries

During the year under review, the Company has infused capital in its following subsidiaries by subscribing to the Equity Shares offered by them:

name of the subsidiary company	amount of capital subscribed ( Rs, in lakh)
Equitas Small Finance Bank Limited	28,800
Equitas Micro Finance Limited *	28,800
Equitas Housing Finance Limited *	4,000
Total	61,600

* Merged with Equitas Finance Limited, which was later re-named as Equitas Small Finance Bank Limited, with effect from September 2, 2016.

Registration as a core investment company

The Company has been registered as a Non-Banking Financial Institution - Non-Deposit taking-Systemically Important Core Investment Company (CIC-ND-SI) pursuant to the Certificate of Registration issued by the Reserve Bank of India ("RBI") dated September 1, 2016, under Section 45-IA of the Reserve Bank of India Act, 1934.

statutory disclaimer

The Company is having a valid Certificate of Registration dated September 1, 2016 issued by the RBI under Section 45-IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for discharge of any liability by the Company.

Neither there is any provision in law to keep, nor does the Company keep any part of the deposits with the Reserve Bank of India and by issuing a Certificate of Registration to the Company, the Reserve Bank of India, neither accepts any responsibility nor guarantees the payment of deposits to any depositor or any person who has lent any sum to the Company.

Fixed deposits

The Company has not accepted any deposits from the public since inception. subsidiary companies

The Company conducts its business through subsidiaries.

To meet the conditions prescribed by RBI while granting ''in-principle'' approval for establishing a ''Small Finance Bank'' (SFB), the wholly owned subsidiaries of the Company viz., Equitas Micro Finance Limited (EMFL) and Equitas Housing Finance Limited (EHFL) were merged with another wholly owned subsidiary viz., Equitas Finance Limited (EFL) with effect from September 2, 2016, pursuant to Orders of Honourable High Court of Judicature at Madras (HC), Chennai dated June 6, 2016. The name of EFL was changed to Equitas Small Finance Bank Limited (ESFBL) and ESFBL commenced banking operations with effect from September 5, 2016. In accordance with the Court approved Scheme of Amalgamation, EMFL and EHFL were dissolved vide orders of the HC dated December 2, 2016.

As at March 31, 2017, the Company had the following two subsidiaries:

Sl No.	name of the subsidiary	activities
1	Equitas Small Finance Bank Limited (ESFBL)	• ESFBL is engaged in Banking business. On the Advances side, it offers loans such as Micro Finance, Agri Loans, Used Commercial Vehicle (UCV) Finance, Micro Loan against Property (LAP), Housing Finance, Business Loans, Gold Loans etc. On the Liabilities side, it offers Term Deposits and Current & Savings Accounts (CASA), distribution of Insurance and Mutual Fund products, etc.
2	Equitas Technologies Private Limited (ETPL)	• ETPL is engaged in freight facilitation business under the brand name of ''Wowtruck''. The Company provides a common platform for transporters and customers to connect ''online'' and carry out transactions on real time basis.

As required under Regulations 16(1)(c) & 46 of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ["SEBI (LODR) Regulations"], the Board of Directors had approved the Policy for determining Material Subsidiaries ("Policy"). The details of the Policy are available on our website http://www.equitas.in/ sites/default/files/EHL-Policy-on-Material-Subsidiary.pdf

Performance and Financial Position of each subsidiary company

( Rs, in lakh)

Sl. No.	Particulars	1	2
1.	name of the subsidiary	ESFBL	ETPL
2.	Reporting period for the subsidiary concerned, if different from the holding Company''s reporting period	N.A.	N.A.
3.	Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries	N.A.	N.A.
4.	Share capital	100,594.34	1500
5.	Reserves & surplus	100,597.76	(955.24)
6.	Total assets	9,24,540.31	641.29
7.	Total liabilities	9,24,540.31	641.29
8.	Investment in shares/Mutual funds	20.00	477.75
9.	Turnover (Revenue from operations)	1,21,432.17	83.29
10.	Profit before taxation	16,144.72	(710.25)
11.	Provision for taxation	5,731.32	-
12.	Profit after taxation	10,413.40	(710.25)
13.	Proposed Dividend	-	-
14.	% of shareholding	100%	100%

consolidated Financial statements

In accordance with the requirements of the Companies Act, 2013, ("the Act") the audited consolidated financial statements are provided in the Annual Report.

corporate Governance Rating

CRISIL has reaffirmed ''CRISIL GVC Level 2'' rating for the Company. This Governance and Value Creation (GVC) rating indicates very high capability of the Company with regard to Corporate Governance and value creation for all its stakeholders.

Management discussion and analysis Report, Report on corporate governance and Business Responsibility Report

In accordance with SEBI (LODR) Regulations, the Management Discussion and Analysis Report, Corporate Governance Report with auditor''s certificate thereon and the Business Responsibility Report (BRR) form part of this report.

corporate social Responsibility

The Company has laid down a Corporate Social Responsibility Policy, which is disclosed on our website http://www. equitas.in/sites/default/files/EHL-CSR-Policy.pdf. In accordance with the Policy, the Company and its Subsidiary, ESFBL contribute 5% of its net profits to Equitas Development Initiatives Trust, a Public Charitable Trust, set up by the Company and Equitas Dhanyakosha India, a not-for-profit, Section 25 Company, under the Companies Act, 1956, for carrying out CSR activities on their behalf. A report on CSR is at annexure - I.

Board Meetings

During the Financial Year 2016-17, our Board has met five times. composition of audit committee

The Company has constituted an Audit & Risk Management Committee in terms of the requirements of the Act, Regulation 18 of SEBI (LODR) and RBI Regulations. The composition of the same is disclosed in the Corporate Governance Report.

directors & Key Managerial Personnel change in directors

The Board of Directors of the Company appointed Dr Parthasarathi Shome as an Additional Director with effect from (w.e.f.) July 22, 2016, pursuant to the provisions of Section 161 of the Act. He resigned from the Board of the Company w.e.f. the close of office hours on April 21, 2017 due to extensive commitments abroad.

Mr Vasudevan P N, Managing Director, Mr Srinivasan N and Mr Vinod Kumar Sharma, Independent Directors resigned from the Board of the Company w.e.f. close of office hours on July 22, 2016, to facilitate their joining the Board of Equitas Small Finance Bank Limited.

Your Directors place on record their appreciation for the valuable advice and guidance rendered by Mr Vasudevan P N, Mr Srinivasan N, Mr Vinod Kumar Sharma and Dr Parthasarathi Shome during their tenure as Directors of the Company.

The Board of Directors of the Company at its Meeting held on October 21, 2016 has appointed Mr Bhaskar S as a Whole-time Director of the Company, designated as Executive Director & Chief Executive Officer (ED & CEO) w.e.f. October 21, 2016.

The appointment of Mr Bhaskar S as Director has been included in the Notice of the Annual General Meeting ("AGM"). Additional information and brief profile with respect to appointment of a new director has been annexed to the Notice of the AGM.

As on the date of this report, the Company has six Independent Directors including a lady Director. The Company has familiarized the Independent Directors with the Company, their roles and responsibilities in the Company, nature of industry in which the Company operates, business model of the Company, etc. The details of the familiarization programme imparted to Independent Directors are available on our website http://www.equitas.in/sites/default/files/EHL-Policy-on-Familiarisation-Programme.pdf.

The terms and conditions of appointment of Independent Directors are also available on our website http://www.equitas. in/sites/default/files/EHL-ID-Appt-TermsnConditions.pdf

Section 152 of the Act provides that unless the articles provide for the retirement of all directors at every AGM, not less than two-third of the total number of directors of a public company shall be persons whose period of office is liable to determination by retirement of directors by rotation. For the purpose of determining the total number of directors, Independent Directors are required to be excluded. The only Non-Independent Director on the Board of the Company viz., Mr Bhaskar S has been appointed as Whole-time Director during the course of the year and his appointment as Director of the Company is being considered in the ensuing AGM. Hence, there is no Director liable to retire by rotation in the ensuing AGM.

declaration from independent directors

The Board has received declarations from the Independent Directors as required under Section 149(7) of the Act and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Act.

evaluation of Board Performance

The performance of the Chairman, the Board, Audit & Risk Management Committee (ARMC), Nomination, Remuneration & Governance Committee (NRGC), Corporate Social Responsibility Committee (CSRC), Stakeholders'' Relationship Committee (SRC) and that of individual Directors for the Year 2016-17 were evaluated on the basis of criteria as approved by the Board. All Directors were provided the criteria for evaluation which were duly filled in. The feedback was then collated and shared in confidence with the Chairman of the NRGC.

The Chairman of NRGC discussed the same at length with the other Members of the Committee. Areas of improvement in the functioning of the Board and Committees were identified. Later at the Board Meeting, the Chairman of NRGC shared the feedback with the Chairman of the Board and the other Directors. Specific action points were drawn out.

Policy on directors'' appointment & remuneration and other details

Pursuant to the provisions of Section 178 of the Act, the Company has formulated and adopted Policy on selection of Directors and Remuneration Policy which are disclosed on our website, links of which are provided below. http://www.equitas.in/sites/default/files/EHL-Fit-and-Proper-Policy-for-selection-of-Directors.pdf http://www.equitas.in/sites/default/files/EHL_RemunerationPolicy.pdf

directors'' Responsibility statement

The Board of Directors of the Company, to the best of their knowledge and belief, confirm that:

1) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

2) 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 as at March 31, 2017 and of the profit of the Company for that period;

3) the Directors have taken proper and sufficient care for the maintenance of 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;

4) the Directors have prepared the annual accounts on a going concern basis;

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

6) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Whistle Blower Policy/Vigil Mechanism

The Company has devised a Vigil mechanism for Directors and employees through the adoption of Whistle Blower Policy, details whereof is available on our website http://www.equitas.in/sites/default/files/EHL-Whistle-Blower-Policy.pdf.

Key Managerial Personnel

During the year under review, Mr Vasudevan S was appointed as the Chief Financial Officer of the Company w.e.f. October 21, 2016 in the place of Mr Bhaskar S who was appointed as ED & CEO of the Company on the same date. As at March 31, 2017, the Company had the following KMPs:

Sl. No.	name of the Key Managerial Personnel	designation
1	Mr Bhaskar S	ED & CEO
2	Mr Vasudevan S	Chief Financial Officer
3	Ms Jayashree S Iyer	Company Secretary

overall remuneration

Details of all elements of remuneration paid to all the Directors are given in the Corporate Governance Report. The NonExecutive Directors of the Company are not entitled to stock options.

details of remuneration as required to be provided under section 197 of the companies act, 2013 read with Rule 5 of companies (appointment and Qualification of Managerial Personnel) Rules, 2014

(i) Ratio of Remuneration of each Director with Median Employees Remuneration	name of the director/ designation	Ratio of remuneration to Median Remuneration of employees	% increase in remuneration
	Mr Rangachary N, Non-executive/Independent Director /Chairman	0.21:1	35.59%
	Ms Jayshree Ashwinkumar Vyas, Non-executive/ Independent Director	0.10:1	35.55%
	Mr Kuppuswamy P T, Non-executive/ Independent Director	0.09:1	NA*
	Mr Nanda Y C, Non-executive/ Independent Director	0.06:1	NA*
	Mr Rajaraman P V, Non-executive/ Independent Director	0.06:1	NA*
	Other Directors	No remuneration was paid by the Company as they would be paid remuneration by the subsidiary(ies).	NA
	*Since these Directors drew remuneration from the subsidiaries, they were not paid any remuneration by the Company in the previous year.
(ii) the percentage increase in remuneration of Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;	Increase in remuneration** of KMP is as follows: MD / ED / CEO - Not applicable*** CFO - Not applicable**** Company Secretary - 23% **excluding the perquisite value arising out of exercise of Employee Stock Options granted by the Company. ***There was a change in the MD/ED. Earlier Mr Vasudevan P N was the MD. To facilitate his joining the Board of Equitas Small Finance Bank Limited, he resigned as MD and Mr Bhaskar S has been appointed as Executive Director w.e.f. October 21, 2016. Hence comparison of percentage increase is not feasible. ****There was a change in the CFO. Earlier Mr Bhaskar S was the CFO. On his appointment as ED of the Company, Mr Vasudevan S was appointed as CFO w.e.f. October 21, 2016. Hence comparison of percentage increase is not feasible.

(iii) the percentage increase in the median remuneration of employees in the financial year;	(-) 59%. This is due to change in employee profile with increase in number of staff in the junior level.
(iv) the number of permanent employees on the rolls of the Company as on 31st March 2017	6
(v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial Remuneration.	The average percentage increase in salaries of employees other than the managerial personnel in the last financial year was 16.5%. The managerial personnel viz., Mr Vasudevan P N, Managing Director ceased to be a Director w.e.f July 22, 2016 while Mr Bhaskar S was appointed as Executive Director w.e.f. October 21, 2016. Hence, comparison of percentile increase in managerial remuneration is not feasible.
(vi) affirmation that the remuneration is as per the remuneration policy of the Company.	The remuneration is as per the Remuneration Policy of the Company.

None of the employees drew remuneration beyond the limits specified under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

auditors

statutory auditors:

M/s Deloitte Haskins & Sells, Chartered Accountants, who were appointed as Auditors of the Company for two years till the conclusion of the 10th Annual General Meeting to be held in the year 2017, complete their tenure of 10 years with the Company. In view of the same, the Board at its Meeting held on May 5, 2017, pursuant to the recommendation of the Audit & Risk Management Committee and subject to approval of the shareholders, has appointed M/s. S R Batliboi & Associates LLP, Chartered Accountants as Statutory Auditors of the Company for a period of four years i.e. from the conclusion of the Tenth AGM till the conclusion of the Fourteenth AGM. Your Company has received written consent(s) and certificate(s) of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Act and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) for the time being in force), from M/s. S R Batliboi & Associates LLP. Further, they have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under SEBI (LODR) Regulations.

details in respect of frauds, if any, reported by auditors:

There have been no frauds reported during the Financial Year ended March 31, 2017. secretarial auditor:

The Board appointed M/s B Ravi & Associates, Practising Company Secretaries as the Secretarial Auditors to conduct an audit of the secretarial records, for the Financial Year 2016-17. The Secretarial Audit Report for the Financial Year ended March 31, 2017 is given in this Report as annexure - ii

Explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made -

(i) Statutory Auditor''s report

There are no qualifications, reservations, adverse remarks or disclaimers in the auditor''s report.

(ii) Secretarial Auditor''s Report

The Secretarial Audit Report does not contain any qualification, reservation or adverse remarks.

information as per section 134 (3) (q) of the companies act, 2013 read with Rule 8 of the companies (accounts) Rules, 2014

The Company has no activity relating to conservation of energy or technology absorption. However, the Company has been continuously using technology in its operations.

During the year, the Company did not have any foreign currency earnings. Foreign currency expenditure of '' 51.4 lakh was incurred by the Company mainly towards legal and professional fee in connection with the IPO and reimbursement of travel expenses.

details of Employee stock Option scheme

The Nomination, Remuneration & Governance Committee constituted by the Board of Directors of the Company, administers the Employees Stock Option Schemes, formulated by the Company, from time to time.

On December 17, 2007, the Company implemented the Equitas Employees Stock Option Scheme 2007 ("ESOP Scheme 2007"). Under the plan, the Company was authorized to issue up to 56,20,000 Equity Shares of Rs, 10/- each to eligible employees of the Company and its Subsidiaries. Employees covered by the plan were granted options to purchase shares of the Company subject to the terms and conditions of the Scheme.

Effective November 10, 2012, the Company established a new employee stock option scheme titled Equitas Employees Stock Option Scheme, 2012 ("ESOP Scheme 2012"). Under the plan, the Company was authorized to issue up to 10,00,000 Equity Shares of Rs, 10/- each to eligible employees of the Company and its Subsidiaries. ESOP Scheme 2007 was subsequently terminated and the outstanding options under ESOP Scheme 2007 have been transferred and made available for grant under ESOP Scheme 2012.

Effective July 8, 2014, the Company established a new employee stock option scheme titled Equitas Employees Stock Option Scheme, 2014 ("ESOP Scheme 2014"). Under the plan, the Company is authorized to issue up to 1,05,00,000 (Post bonus in the ratio of 2:1) Equity Shares of Rs, 10/- each to eligible employees of the Company and its subsidiaries as per the terms and conditions of the Scheme. ESOP Scheme 2012 was subsequently terminated. Further, the outstanding options under ESOP Scheme 2012 have been transferred and made available for grant under ESOP Scheme 2014.

Thereafter, effective September 7, 2015, the Equitas Employees Stock Option Scheme, 2015 ("ESOP Scheme 2015") was implemented. ESOP Scheme 2015 was for a total of 2,22,00,000 Equity Shares. ESOP Scheme 2014 was subsequently terminated and all options that had lapsed, cancelled, withdrawn, recalled or surrendered (including those having lapsed by forfeiture) or outstanding under ESOP Scheme 2014 have been transferred and made available for grant under ESOP Scheme 2015.

information as required under section 62 of the companies act, 2013 and Rule 12 of the companies (share capital and debentures) Rules, 2014 and sEBi (share Based Employee Benefits) Regulations, 2014 (sEBi Regulations):

Sl. No.	information required	Particulars
1	Number of options granted during the year	1,93,85,700
2	Number of options vested during the year	28,96,582
3	Number of options exercised during the year	24,38,834
4	Number of shares arising as a result of exercise of options	24,38,834
5	Number of options forfeited/ lapsed during the year	55,66,843
6	Exercise Price (Rs,)	178/184/173/182/183/165
7	Money realized by exercise of Options	Rs,1051.96 lakh
8	Total number of options in force	4,09,16,591
9	Variation of terms of options	Nil

Employee-wise details of options granted during the year to

1. Key Managerial Personnel

Employee name	designation	Options Granted	Exercise Price [Rs,]
Bhaskar S	ED & CEO	27,000	184
Vasudevan S	Chief Financial Officer	Nil	Nil
Jayashree S Iyer	Company Secretary	Nil	Nil

2. any other employee who receives a grant of options in any one year of options amounting to five percent or more of options granted during that year:

Nil

3. identified employees who were granted options during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant

Nil

Other details relating to Stock Options as required under SEBI (Share Based Employee Benefits) Regulations, 2014 are displayed on our website www.equitas.in/sites/default/files/ESOS-Information-2016-17.pdf.

The Company has not issued any Equity Shares with differential rights or Sweat Equity Shares during the financial year. Particulars of contracts or arrangements with related parties

Pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Act in Form AOC-2.

All Related Party Transactions as required under Accounting Standards AS-18 are reported in Note 23 - Notes to Accounts of the Standalone financial statements of your Company.

The Company''s Policy on dealing with Related Party Transactions is available on our website http://www.equitas.in/sites/ default/files/EHL-Policy-on-Related-Party-Transactions.pdf

Risk Management

The Company is a Core Investment Company ("CIC") and its operations are limited to being a CIC. The risks therefore relate to investments made in its subsidiaries. The operations of each of the subsidiaries, the risks faced by them and the risk mitigation tools followed to manage them are reviewed periodically by the Audit Committees and the Boards of the respective subsidiaries. The same are considered by the Board of the Company, as well. Details of the same are covered in the Management Discussion and Analysis Report.

internal Financial controls

The Company has clear delegation of authority and standard operating procedures. These are reviewed periodically by the Audit & Risk Management Committee. These measures help in ensuring adequacy of internal financial controls commensurate with the nature and scale of operations of the Company.

Loans / Guarantees / investments

During the year, the Company had given fresh loans amounting to Rs, 176.70 crore to its wholly owned subsidiaries. The amount of loans outstanding from these subsidiaries as on March 31, 2017 is Rs, 121.70 crore. The guarantees outstanding on the loans availed by its wholly owned subsidiaries and other companies amount to Rs, 339.53 crore as on March 31, 2017.

disclosure under the sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) act, 2013

The Company has in place a Policy on Prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received under the Policy. No complaint has been received by the Company under this Policy during the year 2016-17.

significant and Material Orders Passed by the Regulators or courts

There have been no significant and material orders passed by Regulators or Courts or Tribunals impacting the going concern status and the future operations of the Company. Further, no penalties have been levied by the RBI /any other Regulators during the year under review.

Extract of annual Return as required and prescribed under section 92(3) of the act and Rules made thereunder

The extract of Annual Return in MGT-9 as required under Section 92(3) of the Act and prescribed in Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as annexure - iii to this Report.

depository system

As the Members are aware, the Company''s Equity Shares are tradable in electronic form. As on March 31, 2017, out of the Company''s total equity paid-up share capital comprising of 33,78,13,746 Equity Shares, only 45,72,417 Equity Shares were in physical form and the remaining shares are in electronic form. In view of the numerous advantages offered by the Depository System, the Members holding shares in physical form are advised to avail of the facility of dematerialization.

acknowledgement

The Directors thank the investors for reposing confidence in Equitas. The Directors are also grateful to the Financial Institutions and Banks associated with the Company and the subsidiaries for their support. The Directors also thank the employees of the Company and the Subsidiaries for their commitment and contribution towards the Mission and Vision of the organization.

For and on behalf of the Board of directors

Bhaskar s Rangachary N

Executive Director and CEO Chairman

Chennai May 5, 2017