MANAGEMENT DISCUSSION  & ANALYSIS

INDIAN FINANCIAL MARKETS REVIEW:

Indian economy clocked a GDP growth of 7.4% in 2014-15 based on the new series released by the Central Statistics Office (CSO). Based on this new series, GDP growth for the year 2015-16 is expected to be between 8-8.5%. The government managed to achieve a fiscal deficit of 3.9% and expects to reduce the same to 3% of GDP within 3 years.

The monetary policy remains accommodative with RBI having reduced benchmark interest rates by 75 basis points in 2015. RBI has targeted inflation rate of 6% by January, 2016 with the risks of achieving the same being broadly balanced. However, with IMD forecasting monsoons in India expected to be 88% of long period average, there remains a possibility of food inflation spiking later in the year.

The recent decline in oil prices is likely to significantly benefit the Indian economy with the country importing more than 75% of its crude oil imports. Falling prices should enable the government to bring down the oil subsidies which in turn should improve fiscal deficit and have a salutary impact on inflation.

GLOBAL FINANCIAL MARKETS REVIEW:

Global economic environment has stabilized even as overall growth remains subdued. IMF has projected that the global economy will grow at 3.3% in 2015 with a gradual pick up in advanced economies balanced by a slowdown in emerging markets and developing economies. In 2016, IMF expects growth to strengthen  to 3.8%.

North America witnessed a slow start to the year driven by one off factors such as harsh winter weather and port closure. Further, strong fall in oil prices has also resulted in downsizing of capital expenditure in oil sector contributing to weakening of activity in North America.

Economic environment in Europe had been recovering with many euro nation economies showing improved economic performance. However, recent developments in Greece which has resulted in Greece defaulting in its payment obligations to IMF, is likely to have a significant impact on the business environment in Europe, thereby impacting growth.

Growth in Emerging market and developing economies have been impacted by falling commodity prices, the rebalancing in China, and structural bottlenecks, as well as economic distress related to geopolitical factors. The recent declines in Chinese stock markets have raised concerns that the weakness will spill over to the broader economy, resulting in further slowdown in Chinese economy.

Monetary Policy in general remains accommodative though Federal Reserve (Fed) is widely expected to raise benchmark interest rate in September 2015. Apart from the reaction to the expected increase in interest rates in USA, continuing weakness in commodity prices and any further signs of weak economic output in China are likely to be major factors in determining the global growth outlook in near term.

The details on Business Overview for fiscal year 2014-15, technology Business, Divestments, Business Outlook and Legal Matters are covered in the Directors' Report (Page 17 and 18).

Balance Sheet

As a result of the various divestment undertaken by your Company over the last two years, your Company has a strong balance sheet with a cash reserves of Rs. 197,558.55 lakhs (including investments in Mutual Funds and Bonds) as at 31st March, 2015. This does not include cash to be generated from other exits like IEX, Bourse Africa, Bahrain Financial Exchange and Dubai Gold & Commodity Exchange and Atom Technolgoies. Further, your Company has a strong talent pool of 850+ employees and a world class intelligent infrastructure in FT Tower. Your Company is now gearing to enter into a new phase of growth building on the Digital India vision of our Hon'ble Prime Minister.

New Vision

Your Company has been always blessed to be ahead by 10 years in identifying trends and making them commercially viable since 1995. All this through unparalleled ventures which are not just best in India but have set global benchmarks. The footprints of our business extended from trading technologies such as ODIN and net.net  to the exchanges of global stature  such as MCX & IEX in India and SMX & DGCX in  international financial centers of Singapore and Dubai respectively. We have not just created shareholder value and a nation-wide market but also social impact of creating one million jobs for young, enterprising and aspiring India.

63 moonsTM will create a laboratory of global standard on lines of Bell Labs, Google Labs and Apple Labs which will explore innovative technology IPs in the key areas of Internet of Things (IOT), Artificial Intelligence, Speech Recognition, Behavioral Science including Real Time Data Analytics including Predictive, SMAC and 4G. The lab is named as JS Innovation Lab, as a mark of recognition and respect to our founder who built FTIL from grounds up.

63 moonsTM will actively participate and partner in the development of technologies and innovative IPs in new generation verticals that among other include, Medicine/ Life Sciences, Space, Sports, Education, Digital Media, Robotics, E-Commerce (3.0) Financial Markets and Agri Tech.

Going forward we are keen and committed to create a vast universe of businesses around digital ecology, which will be the mainstream business of the 63 MoonsTM. We will remain in the realm of technology but will strive to expand its sphere of influence in the new generational businesses built around it. we will create a structure that will ignite true innovation. We will nurture it, support it and make it commercially relevant, so that it has maximum social impact.

With our feet on the ground and balanced mind we have set our vision to partner 108 new Digital Giants over the next 10 years where we believe that India is poised to have 10,000 digital brands compared to 100,000 new digital brands built by China in the past 10 years.

FINANCIAL POSITION AND RESULT OF OPERATIONS

Overview

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 133 of the Companies Act, 2013 ("the 2013 Act") read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the 2013 Act, as applicable.

The Consolidated financial statements have been brpared in compliance with the Accounting Standard  AS 21, AS 23 and AS 27 issued by the Institute of  Chartered Accountants of India (ICAI) as notified under the Companies (Accounts) Rules, 2014.

The discussion on financial performance in the Management Discussion and Analysis relate to the standalone financial statement of the Company.

Shareholder's Equity

Your Company's authorised share capital is f 3000 lacs, divided into 1500 lacs equity shares of f 2 each. The paid up share capital of your company stood at f 921.57 lacs. During the year, there was no change in the paid-up share capital of your Company.

Reserves and Surplus

Your Company's total reserves and surplus amounted to Rs. 277,072.63 lacs as on March 31, 2015 as against Rs. 240,028.64 lacs as on March 31, 2014, increased on account of net profit during the year.

During the year, there was no change in Securities brmium account which stood at Rs.41,746.61 lacs as on March 31, 2015.

General reserve as at March 31, 2015 stood at Rs.26,413.15 lacs. During the year, there was no change in general reserve.

Shareholders' Funds

Total shareholder funds stood at Rs.277,994.20 lacs as on March 31, 2015 as against Rs. 240,950.21 lacs as on March 31, 2014.

Loan Funds

During the year ended March 31, 2012, the Company had availed External commercial borrowings (ECB) aggregating to USD 110.00 million partly for investments in overseas wholly owned subsidiary companies and partly to repay the Zero Coupon Convertible Bonds.

In view of the developments in NSEL, various lenders of External Commercial Borrowings (ECB) raised concerns regarding on repayment of their loans and, after negotiations with the lenders, the Company has made part brpayment of ECB loan of USD 33.25 million during the brvious year out of the total ECB loan of USD 110.00 million in compliance with the ECB guidelines. The outstanding ECB balance amounted to USD 76.75 million (equivalent to f 48,038.44 lacs as at March 31, 2015 as against f 46,126.60 lacs as at March 31, 2014). The increase in loan liability is due to exchange rate fluctuations during the year. There is no additional loan during the year.

Deferred Tax Liability

During the year, your Company has reported accrual of total net deferred tax liability of f 2,244.18 lacs compared to Rs. 2,524.64 lacs in the brvious year. Deferred tax assets and liabilities are recognized for future tax consequence attributable to timing difference between taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured at substantively enacted tax rates.

Trade Payable:

At the end of the year, trade payables stood at Rs. 249.45 lacs as compared to Rs. 531.60 lacs at the end of brvious year.

Other Liabilities (current + non current)

Other liabilities at the end of the year amounted to Rs. 10,252.99 lacs as against of Rs. 25,060.52 lacs at the end of brvious year. It mainly includes advances received from customers, income received in advance/ unearned revenue and other contractual obligations. The decrease during the year is mainly on account of decrease in advance from customers and income received in advance/unearned revenue.

Provisions (short term + long term)

Total provisions as at the end of the year increased to Rs. 4,015.14 lacs as against of Rs.2489.52 lacs at the end of the brvious year mainly due to proposed final dividend.

Investments (current + non-current)

The total investments (net of provision) as at March 31, 2015 were at Rs.236,189.65 lacs as compared to  Rs. 127,715.90 lacs as at March 31, 2014. The investments mainly comprised of investment in mutual funds, bonds and investments in subsidiaries, joint venture & associate companies. During the year, cash reserves of the Company have substantially increased on account of the sale of investments in MCX, NBHC and MCX-SX. Cash reserve which includes cash and bank balance, fixed deposit, investments in Mutual funds and Bonds stood at Rs. 197,559 lacs as against Rs. 77543 Lacs in brvious year. In view of the NSEL event and considering the current scenario, the Company has made an additional provision of Rs.73227 lacs towards provision for diminution in the value of investments which includes provision of Rs.1,500.00 lacs towards investments in NSEL.

Trade Receivables

As at the end of year, trade receivables (net of provision) were at Rs.1662.78 lacs as compared to Rs.6,775.60 lacs at the end of the brvious year, decreased by 5112.82 lacs.

Loans & Advances (current + non-current)

At the end of the year, Loans and advances (current + non-current) (net of provision) amounted to Rs.35,232.61 lacs as against Rs. 122,811.86 lacs at the end of brvious year. Decrease is mainly due to conversion of loan given to a subsidiary company in to equity during the year and repayment of loan by another subsidiary. Further MAT credit entitlement increased to f 19,270.02 lacs at the end of the year as against Rs. 9,188.82 lacs at the end of the brvious year.

Cash & Cash Equivalents:

At the end of the year cash & cash equivalent stood at Rs. 10,992.95lacs as compared to Rs. 11,919.08 lacs at the end of the brvious year.

Other Assets (current and non-current):

At the end of the year, other assets amounted to Rs. 15,832.88 lacs as against Rs. 1,926.87 lacs at the end of the brvious year.

Revenue Analysis

During the year, revenue from operations stood at Rs.16,103.11 lacs compared to Rs. 33,471.49 lacs in the brvious year. Your Company mainly derived revenues from sale of IPR licenses, annual maintenance charges and project-based services, including software customization. Revenue was decreased during the year mainly due to lower variable charges from the exchanges on account of lower volume of the exchanges and lower fixed AMC charges due to renegotiation and waiver.

Other Income

During the year, other income stood at Rs.44,264.90 lacs as compared to Rs. 20,655.17 lacs in the brvious year. Other Income includes dividend income from investments, interest on deposits / loan to subsidiaries / investments, profit on sale of investments (other than those disclosed separately under exceptional items), rental income etc. During the year, dividend income from investments was Rs. 16916.97 lacs (brvious year Rs. 3310.37 lacs). Further there was other income of Rs. 12983.20 lacs on account of advance written back due to cancellation of agreement and in terms of the agreement.

Expense Review

During the year, employee benefits expenses were Rs. 12,091.10 lacs as compared to Rs.12,275.19 lacs in the brvious year and finance cost was at Rs. 2,266.12 lacs as compared to f 3,053.82 lacs in the brvious year.

Other expenses during the year were Rs. 15,379.20 lacs as compared to Rs. 12,599.99 lacs in the brvious year. The increase was mainly due to higher legal and professional charges during the year due to various ongoing legal cases.

Exceptional Items

During the year, exceptional items stood at profit of Rs. 24,282.09 lacs compared to loss of Rs.41,152.11 lacs in brvious year. Under the exceptional items during the year includes (a) gain of Rs. 98789.50 lacs on sale of investments in shares (net of expenses) of 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 were Rs.73226.82 lacs and (c) provision of Rs. 1280.59 lacs towards doubtful loans and advances receivable from subsidiaries. The same was discussed elsewhere in the notes to Accounts which forms parts of the Annual report.

Profit/ (Loss)

Your Company has reported net profit during the year.

• Profit before finance cost, debrciation, exceptional items and tax was Rs.32,896.06 lacs, compared to Rs.29,245.39 lacs in the brvious year.

• Profit before tax and exceptional items were Rs. 26,724.21 lacs, compared to Rs. 23,116.71 lacs in the brvious year.

• Profit before tax were Rs. 51,006.3 lacs, compared to loss of Rs. 18,035.40 lacs in the brvious year.

• Net Profit after tax was Rs. 44,513.88 lacs, compared to net loss of Rs. 22,854.85 lacs in the brvious year.

Cautionary Statements

This report may contain forward-looking statements about Financial Technologies (India) Ltd. and its group companies, including their business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are brdictive in nature, depend upon or refer to future events or conditions, or concern future financial performance (including revenues, earnings or growth rates), possible future Company plans and action. Forward-looking statements are based on current expectations and understanding about future events. They are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the industry in general. The Company's actual performance and events could differ materially from those exbrssed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as general economic, political and market factors in India and internationally, competition, technological change and changes in Government regulations.