1. general information

The Financial Technologies (India) Limited, the Company, is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next-generation financial markets, that are transparent, efficient and liquid, across all asset classes including equities, commodities, currencies and bonds among others. The Company is pioneer in end to end Straight Through Processing (STP) solution that support high density transactions. It has developed proprietary technology platform benchmarked against global standard which give it a decisive edge in driving mass disruptive innovation at the speed and cost of execution unmatched in the financial market industry.

2. SIGNIFICANT ACCOUNTING POLICIES:

A. Basis of accounting and brparation of financial statements

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. The financial statements have been brpared on accrual basis under the historical cost convention except for certain financial instruments which are measured at fair value. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year.

B. Use of estimates

The brparation of financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

C. Fixed assets (Tangible / Intangible)

Fixed assets are carried at cost less accumulated debrciation / amortisation and impairment losses, if any. The cost of fixed assets comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. The Company has adopted the provisions of para 46 / 46A of Accounting Standard-11, "The Effects of Changes in Foreign Exchange Rates", accordingly, exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of debrciable fixed assets are adjusted to the cost of the respective assets and debrciated over the remaining useful life of such assets. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance.

D. Capital work-in-progress

Fixed assets which are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

E. Operating leases

Assets taken/given on lease under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease payments/income under operating leases are recognised as expenses/income on a straight line basis over the lease term in accordance with the respective lease agreements.

F. Debrciation and amortisation

I. (i) Debrciation has been provided on the straight-line method.

(ii) Upto December 31, 2013, debrciation was being provided at the rates brscribed in Schedule XIV to the Companies Act, 1956 except in respect of the following categories of assets.

G. Investments

Current investments are carried individually at the lower of cost and fair value. Long-term investments are carried individually at cost less provision for diminution. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the Management. Cost of investments include acquisition charges such as brokerage, fees and duties. The difference between carrying amount of the investment determined on average cost basis and sale proceeds, net of expenses, is recognised as gain or loss on sale of investments.

H. Revenue recognition

Revenue is recognised when no significant uncertainty as to determination and realisation exists. Income from software products (IPR based licenses) and income from software services (project based contracts) for the use of software applications is recognised on delivery/granting of right to use.

Revenue from fixed price service contracts is recognised based on milestones/acts performed as specified in the contracts or on a straight line basis over the contract period where performance of several acts is required over that period.

In the case of time and material contracts, revenue is recognised on the basis of hours completed and material used.

Revenue from annual maintenance contracts, lease of licenses, IT infrastructure sharing income and Shared Business Support Services is recognised proportionately over the period in which the services are rendered/licenses are leased.

Revenue from sale of traded goods is recognised when the significant risks and rewards in respect of ownership of products are transferred by the Company.

Sales are stated net of returns, VAT and service tax wherever applicable.

I. Other income

Dividend income is recognised when the Company's right to receive dividend is established. Interest income is recognised on time proportion basis. Insurance claim is recognised when such claim is admitted by the Insurance Company.

J. Foreign currency transactions and translations

Foreign currency transactions are recorded at the exchange rates brvailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Monetary items denominated in foreign currency are restated using the exchange rate brvailing at the balance sheet date. Exchange differences relating to long term monetary items are dealt with in the following manner:

i. Exchange differences arising during the year on settlement / restatement, in so far as they relate to the acquisition of a debrciable capital asset are added to / deducted from the cost of the asset and debrciated over the remaining useful life of such assets.

ii. In other cases, such differences are accumulated in a "Foreign Currency Monetary Item Translation Difference Account" and amortised to the statement of profit and loss over maturity period / upto the date of settlement of such monetary item, whichever is earlier. The unamortised exchange difference is carried under Reserves and Surplus as "Foreign Currency Monetary Item Translation Difference  Account (FCMITDA)"

All other exchange differences are dealt with in the statement of profit and loss. Non-monetary items denominated in foreign currency are carried at historical cost.

Foreign branches :

The translation of the financial statements of foreign branches (non-integral) is accounted for as under:

a) All revenues and expenses are translated at average rate.

b) All monetary and non-monetary assets and liabilities are translated at the rate brvailing on the balance sheet date.

c) Resulting exchange difference is accumulated in Foreign Currency Translation Reserve Account (FCTR) until the disposal of the net investment in / closure of the said non-integral foreign operation, in which case the accumulated balance in FCTR is recognised as income / expense in the same period in which the gain or loss on disposal / closure of branch is recognised.

K. Derivative contracts

Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortised over the period of the contracts if such contracts relate to monetary items as at the balance sheet date. Exchange differences on such contracts are recognised in the statement of profit and loss.

The Company uses derivative financial contracts in the nature of forward foreign exchange contracts entered into for hedging the risks of foreign currency exposure in respect of highly probable forecasted transactions / firm commitments and interest rate swap contracts to hedge its risks associated with fluctuations in interest rate. As per principles of prudence as enunciated in Accounting Standard 1, "Disclosure of Accounting Policies", losses, if any, on Mark to Market basis, are recognised in the statement of profit and loss and gains are not recognised until realised on grounds of prudence.

L. Employee Benefits

a) Post-employment benefits and other long term benefits

Payments to defined contribution retirement schemes and other similar funds are expensed as incurred.

For defined benefit schemes and other long term benefit plans viz. gratuity and compensated absences expected to occur after twelve months, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the balance sheet date. Actuarial gains and losses are recognised in full in the statement of profit and loss for the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the balance sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the brsent value of the available refunds and reduction in future contributions to the scheme.

b) Short term employee benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees is recognised as an expense during the period when the employee renders those services. These benefits include compensated absences such as leave expected to be availed within a year and performance incentives.

M. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. Ancillary borrowing costs are amortised to the statement of profit and loss over maturity period / upto the date of settlement of loan, whichever is earlier. All other borrowing costs are charged to revenue.

N. Income taxes

Income taxes are accounted for in accordance with Accounting Standard 22 "Accounting for Taxes on Income". Tax expense comprises current tax and deferred tax. Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income-tax Act, 1961. Current tax assets and liabilities are offset if the Company has a legally enforceable right for such set off and the Company intends to settle the asset and the liability on a net basis.

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed debrciation and carry forward of losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets are reviewed at each balance sheet date for their realisability.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off.

O. Stock based compensation

The compensation cost of stock options granted to employees is measured by the intrinsic value method, i.e. difference between the market price of the Company's shares on the date of grant of options and the exercise price to be paid by the option holders. The compensation cost, if any, is amortised uniformly over the vesting period of the options.

P. Impairment of assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the statement of profit and loss.

Q. Provisions and contingencies

A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.

R. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period brsented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1. With effect from January 1, 2014, the Company has revised the estimated useful life of certain fixed assets as stated in Note 2(F). As a result, the debrciation expense and loss before tax for the brvious year were both higher by Rs. 556.07 lacs.

2 During the Previous Year, the Company had received an order dated December 17, 2013 passed by the Forward Markets Commission (FMC) holding the Company not a fit and proper person to continue to be a shareholder of 2% or more of the paid up equity capital of Multi-Commodity Exchange of India Ltd. (MCX). Further, FMC has issued revised norms regarding Shareholding, Ownership, Net worth, Fit and Proper Criteria, etc. on May 6, 2014 and has, inter alia, provided that no person shall, directly or indirectly, acquire or hold equity shares of a commodity exchange unless he is fit and proper person and in the event of any person ceasing to be a 'fit and proper person' or being declared so by the Commission, such person shall forthwith divest his shareholding.

The Company has challenged the Order dated December 17, 2013 passed by the Forward Markets Commission (FMC) holding the Company not a fit and proper person to continue to be a shareholder of Multi-Commodity Exchange of India Ltd (MCX) by way of a Writ Petition before the Hon'ble Bombay High Court. On February 28, 2014, prayer for ad-interim relief was rejected by Hon'ble High Court but was pleased to admit the said Writ Petition. On November 17, 2014, the Hon'ble Bombay High Court rejected Notice of Motion filed by the Company due to change in circumstances for seeking stay on the FMC order. The Company filed SLP on November 27, 2014 before Hon'ble Subrme Court against order dated February 28, 2014 and November 17, 2014. On February 6, 2015 the Company withdrew the SLP The Writ Petition is pending for hearing before the Hon'ble Bombay High Court. Without brjudice to legal rights available within the law, the Company has divested its stake in MCX during the year and consequent profit of Rs. 85,262.70 lacs (Net of attributable expenses of Rs. 2,722.02 lacs) is grouped under 'Net gain on sale of Current Investments in Exceptional items (Refer Note 28). The Company's shareholding in MCX has become 'NIL'.

3. During the Previous Year, SEBI has passed an Order on March 19, 2014 declaring the Company not a 'Fit and Proper' person and directed the Company to divest the equity shares or any instrument that provides for rights over the equity shares held by the Company in MCX-SX, MCX-SX Clearing Corporation Limited (MCX-SX CCL), Delhi Stock Exchange Ltd (DSE), the Vadodara Stock Exchange Limited (VSE) and National Stock Exchange of India Limited (NSEIL). The Company had filed an appeal in the Security Appellate Tribunal (SAT) against the said order which was rejected by SAT. The Company has filed Civil Appeal before Hon'ble Subrme Court challenging the SEBI Order and SAT Order. The Hon'ble Subrme Court admitted the Civil Appeal and Civil Appeal is pending for hearing. Without brjudice to the legal rights and remedies available under the law, the Company entered into Share and Warrant Purchase Agreements (SWPA)/ Warrant Purchase Agreements (WPA) with certain investors for sale of its 100% stake in MCX Stock Exchange Ltd (MCX-SX) and resultant profit of Rs. 1,282.46 lacs (net of attributable expense of Rs. 1,665.66 lacs) is grouped under 'Net gain on sale of Current Investments in Exceptional items (Refer Note 28). The Company's shareholding in MCX-SX has become 'NIL'. In meanwhile, the Company has filed an appeal before the SAT against the Securities and Exchange Board of India (SEBI) order for rejecting Company's request for extension for divestment in recognized stock exchanges. The said appeal is pending before SAT for hearing. The investment in the aforesaid entities are continued to be classified as current investment at the lower of cost and fair value. MCX-SX CCL is not considered as an associate company from the date of order i.e. March 19, 2014. According to the Management's view, on the basis of the information available including latest financial statements/ results and/or latest transactions carried out, the fair value of above investments exceeds the cost of the investments. In case of investments where the book value is less than the investment amount, the Company has made appropriate provision for the same.

4 As per the Regulatory requirement under Central Electricity Regulatory Commission (Power Market) (CERC) Regulations 2010, the Company had to reduce its holding in an associate company viz. Indian Energy Exchange Limited (IEX) to 25%. Accordingly, during the Previous Year, the Company had divested part of its investments aggregating 1,364,787 equity shares of Rs. 10 each in IEX. The resulting profit of Rs. 6,989.14 lacs (net of directly attributable expenses of Rs. 164.05 lacs) is regrouped under 'Net gain on sale of Current Investments' in Exceptional items (Refer  Note6).

Subsequently, during the year , the Company received communication from IEX vide its letter dated May 19, 2014 informing that CERC vide their order dated May 13, 2014 stated that the Company cannot be considered as fit and proper person to hold the shares in power exchanges in view of FMC Order & SEBI Order and inter alia directed IEX a) to ensure that the Company divests its entire shareholding from IEX by September 30, 2014, b) pending divestment of shares, the voting rights of the Company shall stand extinguished and any corporate benefit in lieu of such shareholding shall be kept in abeyance or withheld by the exchange and c) IEX shall ensure that no nominee of the Company is rebrsented in the Board of IEX. The above directions of CERC were binding with immediate effect. The Company had challenged the said CERC Order before Appellate Tribunal for Electricity. The Appellate Tribunal has dismissed the appeal filed by the Company on February 4, 2015. On April 17, 2015 the Ld. Central Commission passed an order in Suo-Motu Petition No. SM/341/2013 inter alia directing the Company to complete divestment of its shareholding in IEX by May 9, 2015. The Company filed Civil Appeal before Hon'ble Subrme Court challenging the CERC Order, Appellate Tribunal Order and Order dated April 17, 2015 which is pending for hearing. On May 8, 2015, the Hon'ble Subrme Court has issued notice in both the matters. Further, on May 19, 2015, Appellate Tribunal has granted time till June 18, 2015 for completing the divestment in IEX based on the application filled by the Company. IEX is not considered as an associate company from the date of order i.e. May 13, 2014.

Without brjudice to the legal rights and remedies available under the law, during financial year, the Company has entered into Share Purchase Agreement (SPA) with certain Investors for sale of entire 25.64% equity stake on a fully diluted basis in Indian Energy Exchange Ltd (IEX). The said transaction is subject to fulfillment of certain condition brcedents. Post completion of the above said transaction, the Company's shareholding in IEX will become 'NIL'.

5. During the Previous Year, the Company along with other shareholders entered into a share purchase agreement for sale of 100% equity shares of National Bulk Handling Corporation Limited (NBHC) to IVF Trustee Company Limited, which sale transaction was completed during the year and the resultant profit of Rs. 12,252.34 lacs (net of attributable expense of Rs. 2,491.80 lacs) is grouped under 'Net gain on sale of Current Investments in Exceptional items (Refer Note 28).

6 The Company received letter from Financial Services Commission (FSC) in May, 2014 informing that FSC does not consider the Company as fit & proper, pursuant to Section 23(3) of the Financial Services Act, 2007 of Mauritius and directed the Company to dispose of its shareholding in Bourse Africa Limited, Mauritius ("BAL"). During the year, the Board of FT Group Investments Pvt, Ltd. Mauritius., ("FTGIPL"), a wholly owned subsidiary of the Company has entered into Share Purchase Agreement (SPA) for sale of 100% of its stake in Bourse Africa Limited, Mauritius (together with its wholly owned subsidiary Bourse Africa Clear Ltd.) to Continental Africa Holdings Limited (CAHL), Mauritius subject to certain conditions brcedents including regulatory approvals. The shareholders of FTIL with 99.975% majority approved the said transaction on February 20, 2015.

7 During the brvious year, Financial Technologies Singapore Pte. Ltd (FTSPL), a wholly-owned subsidiary of the Company, sold 100% of FTSPL's equity ownership in its wholly owned subsidiaries, Singapore Mercantile Exchange Pte. Ltd. (SMX) and Singapore Mercantile Exchange Clearing Corporation Pte. Ltd. (SMXCC) to ICE Singapore Holdings Pte. Ltd, an entity owned by Intercontinental Exchange Group, Inc. (ICE).

6 As at March 31, 2015, the Company's investment in certain subsidiaries and a jointly controlled entity aggregating Rs. 84,069.44 lacs (Previous Year Rs. 12,590.95 lacs) and loans and advances / recoverables from these entities aggregating Rs.3,321.18 lacs (Previous Year Rs. 90,758.89 lacs) (excluding NSEL and its subsidiaries) which brsently have accumulated losses, [share of aggregate losses till March 31, 2015 Rs. 106,979.33 lacs (Previous year Rs. 112,881.99 lacs)].

During the year, FTGIPL a wholly owned subsidiary of the Company has carried out capital reduction of USD 35.0 million out of its accumulated losses and reduced its stated capital. Consequently the Company's investment in the subsidiary is reduced by Rs. 20,999.05 lacs which is shown in Exceptional items (Refer Note 28). On a conservative basis the Company has made an additional provision of Rs. 65,726.76 lacs (Previous Year Rs. 6,944.45 lacs) towards provision for other than temporary diminution in the value of long term investments including provision (write down) in value of investments of Rs. Nil (Previous Year Rs. 15.00 lacs) in respect of investments reclassified during the brvious year from long-term (non-current) to current investments, and Rs. 159.57 lacs (Previous Year Rs. 15,150.00 lacs) towards doubtful loans and advances. Accordingly, total provision of Rs. 74,393.47 lacs (Previous Year Rs. 8,681.71 lacs) for other than temporary diminution in the value of long term investments excluding NSEL and provision of Rs. 178.57 lacs (Previous Year Rs. 15,150.00 lacs) for doubtful loans and advances excluding NSEL as at the year ended on March 31, 2015 is considered to be adequate for these investments and loans and advances / receivables.

8 In view of the developments in respect of its subsidiary NSEL, during the Previous year, on conservative basis, then the Company had made a provision towards diminution other than temporary in value of long term investments of Rs. 4,499.99 lacs for its investment in NSEL. In order to meet the working capital requirements of NSEL, the Company has subscribed to the right issue made by NSEL to the extent of Rs. 1,500.00 lacs. On conservative basis, the Company has made a provision towards diminution other than temporary in value of long term investments of the same (Refer Note No. 28).

9.During the brvious year, to protect the interest of the large number of small clients of the trading members of the NSEL who had to receive money from its defaulting members, NSEL had requested the Company to give a bridge loan, which request was accepted by the Company's Board of Directors as a goodwill gesture without admitting any liability on behalf of NSEL and a onetime bridge loan amounting to Rs. 17,939.81 lacs was given which NSEL will have to repay to the Company from the receipt of the amounts from defaulting members after paying to all the investors. The ongoing recovery process by NSEL from its defaulting members seems long drawn process as major amounts are in litigation. In view of the current status of recovery in NSEL, possibility of recovery of the said loan amount from NSEL seems very remote and difficult. Hence the Company has written off the said bridge loan of Rs. 17,939.81 lacs, without brjudice to its right to recover the loan and interest amount from NSEL in future, for which the provision was made during the Previous Year (Refer Note No. 28).

Further during the brvious year, the Company had provided corporate guarantee of Rs. 22,500.00 lacs on behalf of NSEL for availing banking facility in relation to procurement of cotton on behalf of National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED). In view of the developments at NSEL, the bank recalled the credit facility granted to NSEL and invoked the guarantee to the extent of outstanding balance of Rs. 3,143.25 lacs including interest thereon and debited the said amount from the Company's bank account and, accordingly, the Company has debited the same to NSEL's account as loan. Recovery of the said loan amount is dependent on the recovery by NSEL from NAFED. On conservative basis the Company had made provision of the said amount during the brvious year.

Further, during the year, an additional loan of Rs. 1,098.76 lacs (Previous Year Rs. 350.00 Lacs) has been provided to NSEL for its working capital. On conservative basis, the Company has made provision of additional loan given Rs. 1,098.76 lacs (Previous Year Rs. 350.00 lacs).

10. During the year the Company has raised invoices / debit notes for income from rent, interest and reimbursement of expenses. In view of the developments at NSEL, the Company is unable to assess the ultimate collection with reasonable certainty, and on a prudent basis, the Company, to the extent of uncertainty involved, during the year the Company derecognised interest income of Rs. 1,761.29 lacs (Previous Year Rs. 1,003.22 lacs) and rent income Rs. 24.00 lacs (Previous Year Rs. 164.63 lacs). The additional amount receivable from NSEL towards taxes as applicable and reimbursement of expenses is Rs. 22.26 lacs (Previous Year Rs. 131.68 lacs) for which, on conservative basis, the Company has made further provision of Rs. 22.26 lacs (Previous Year Rs. 131.68 lacs) during the year ended March 31, 2015

11. The Company has received Draft Order of amalgamation of National Spot Exchange Limited (NSEL) with the Company under Section 396 (1) of the Companies Act, 1956 from Ministry of Corporate Affairs (MCA) on October 21, 2014. The Company has filed a Writ Petition before the Hon'ble Bombay High Court, interalia challenging the draft Order issued by the Ministry of Corporate Affairs, dated October 21, 2014, for proposed forced amalgamation of National Spot Exchange Limited with the Company. The Hon'ble High Court, Bombay, granted status quo in the said matter till February 4, 2015. On February 4, 2015, the Hon'ble High Court passed order inter alia stating that:

a) the Company and other parties mentioned in the Order may file their objections within 30 days and within 4 weeks thereafter Central Govt. may pass appropriate order after giving brief hearing to all the interested parties.

b) it is further clarified that if any adverse order is passed by the Central Govt, then same shall not be notified for a period of two weeks after the order is communicated to the Company

c) the Central Govt may give brief hearing to the parties mentioned in Section 396 of the Companies Act 1956.

d) in view of the above, the order of the status quo passed by the Hon'ble High Court on November 27, 2014 is vacated.

e) notice of Motion by the Union of India and others is accordingly disposed off

f) liberty is given to the parties to apply for a fixed date of hearing.

As per the above Order, the Company filed its objection with MCA. In meanwhile, MCA has filed Chamber Summons in March 2015 seeking extension of time granted to the Central Government for considering 19,000 suggestions and objections received and to pass order thereto and to complete the procedure as contemplated u/s 396 of the Companies Act, 1956 till July 31, 2015. The Hon'ble Bombay High Court has allowed said Chamber Summons filed by MCA.

12. The Union of India, Ministry of Corporate Affairs ("MCA"), has filed the Company Petition under Sections 397 and 398 read with Sections 388B, 388C, 401, 402, 403, 406 and 408 of the Companies Act, 1956 (the "Act") before the Principal Bench of the Company Law Board at New Delhi (the "CLB"). The Petition has been filed inter alia seeking removal and supersession of the Board of Directors of FTIL. The Company appeared before CLB protesting the action initiated by MCA. The matter is pending before CLB for consideration. No notice has yet been issued in the matter.

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

b) First Information Report (FIR) has been registered against various parties, including the Company, with the Economic Offences Wing of the Mumbai Police (EOW) and Central Bureau of Investigation (CBI) in connection with the NSEL event. After investigation, EOW has filed charge-sheet on January 06, 2014, June 04, 2014 and August 04, 2014. It is pertinent to note that the Company has not been named in the said charge-sheets. EOW investigation is in progress.

14 During the year, the Company received letter from the Registrar of Companies, Chennai (ROC), Ministry of Corporate Affairs ("MCA") regarding a notice for inspection under section 209A of the Companies Act, 1956 ("Companies Act") and technical scrutiny of the Company's balance sheet FY12-13 and explanation sought under section 234(1) of Companies Act. The inspection conducted by Dy. ROC and Company submitted requested information to MCA. After inspection, RoC issued show cause notices to the Company stating that the Company contravened certain compliance stipulated under the Indian Companies Act, 1956. The Company has replied to the said show cause notices from RoC.

15 An FIR has been registered with the M.I.D.C Police station, District: Mumbai against the Company and others on the basis of complaint filed by one Mr. Ketan Shah on the basis of a report dated April 21, 2014 of PricewaterhouseCoopers Private Limited (PwC), uploaded by Multi Commodity Exchange of India Ltd (MCX) on the website of BSE Ltd on May 26, 2014, purported to be a "Special Audit Report" on MCX at the direction of Forward Market Commission. The matter is under investigation by the police.

The Company believes that the said FIR is misguided and misconceived based on information in PwC Report as the report is not an audit report since PwC being Private Ltd Company is not an audit firm but provides advisory services. The alleged report was brpared by PwC based on a limited one-sided information without verifying the authenticity of the data, without following the procedure in accordance with generally accepted auditing standards or attestation standards and without taking any responsibility towards any person who acts in reliance of the contents of the Report. The Company is exploring appropriate legal options regarding the said FIR.

16 On February 28, 2015, the Chief Investigating Officer of the SIT, Economic Offences Wing, CB, CID, Mumbai ("EOW") issued a letter directing FTIL, inter alia, and "not to dispose of, alienate, encumber, part with possession of, or create any third party right, title, and/or interest in, to, upon or in respect of any of assets of FTIL, its subsidiaries, and its step down subsidiaries except for the payment of statutory dues, amounts for the brservation, maintenance and protection of their assets and wages and salaries under intimation to the Investigating agency and in the case of immovable properties, without the orders of the trial Court". The Company is seeking legal advice on the aforesaid letter from EOW.

17 The Company has a total MAT credit entitlement of Rs. 19,270.02 lacs as at March 31, 2015 including recognition of Rs. 10,081.20 lacs during the year ended March 31, 2015. The management of the Company is confident that the Company will be able to utilize unexpired MAT entitlement in future projected years.

18 As per Section 135 of the Companies Act 2013, a Corporate Social Responsibility (CSR) Committee has been formed by the Company. The earmarked funds were transferred to a separate bank account and the same shall be utilized on activities which are specified in Schedule VII of the Companies Act, 2013.

19 Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/disclosure.

For and on behalf of the Board

Venkat R Chary  

Chairman

DIN - 00273036

Prashant Desai

Managing Director & Chief Executive Officer

DIN- 01578418

Hariraj Chouhan  

Vice President

Devendra Agrawal

Chief Financial Officer & Company Secretary

Place : Mumbai

Date : May 22, 2015