1. CORPORATE INFORMATION

Equitas Holdings Limited ("the Company") was incorporated on 22 June 2007. The Company got converted into a Public Limited Company during the year. Consequent to the conversion of the company to a public limited company the name of the Company has been changed to Equitas Holdings Limited in terms of Certificate dated 26 June 2015 issued by the Registrar of Companies, Chennai.

The Company is a " Not Systematically Important Core Investment Company" (CIC) holding shares of its subsidiaries. The Company also provides financial support to its subsidiaries by way of unsecured loans, guarantees, etc.

The Reserve Bank of India vide its order dated 3 December 2012 has approved the Company's application for cancellation of certificate of registration No. N-07-00768 dated 13 March 2008 considering that the Company is Not Systemically Important Core Investment Company and is eligible for exemption from registration under section 45IA of Reserve Bank of India Act, 1934.

During the year, the RBI invited applications for forming Small Finance Banks and Payment Banks. The Company had made an application dated 30 January 2015 to the RBI for a license to promote a Small Finance Bank and the same was approved by the Board dated 27 December 2014. As per the application for licence, if the Company is given the licence, the operations of the existing subsidiaries have to consolidated under a single wholly owned subsidiary which will operate as a Small Finance Bank.

The RBI granted an in-principle approval for setting up a new SFB under Section 22 of the Banking Regulation Act, 1949, subject to certain conditions through a letter dated October 7, 2015 (the “SFB In-Principle Approval”). The SFB In-principle Approval is valid for a period of 18 months from October 7, 2015 i.e. until April 6, 2017 to enable the applicants to comply with the SFB Guidelines, fulfil the conditions in the SFB In-Principle Approval and any other conditions as may be stipulated by the RBI. ( Also Refer Note 31)

As per the terms and conditions of in-principle approval, the promoting NBFC is required to be registered with RBI as Core Investment Company( CIC) . Accordingly, the Company has made and application to the RBI for registration as Systematically Important Core Investment Company(CIC) to meet the requirement of setting up of Small Finance Bank.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Accounting

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 specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of financial statements are consistent with those followed in the brvious year.

2.2 Use of Estimates

The brparation of the 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 years in which the results are known / materialise.

2.3 Cash and Cash Equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.4 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.5 Debrciation

Debrciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Debrciation on tangible fixed assets has been provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Tangible Assets:

Buildings - 20 Years

Office Equipments - 3 Years

Vehicles - 4 years

Computers Equipments - 3 years

Assets individually costing less than or equal to Rs. 5,000 each are fully debrciated in the year of capitalisation.

Intangible assets are amortised over their estimated useful life as follows:

Software - Lower of license year or 3 years on straight line basis The estimated useful life of the intangible assets and the amortisation year are reviewed at the end of each financial year and the amortisation method is revised to reflect the changed pattern.

2.6 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(a) Interest Income on Loans granted is recognised under the internal rate of return method.

(b) Interest Income on deposits is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(c) Dividend income is accounted for when the right to receive it is established.

(d) All other income is recognized on an accrual basis, when there is no uncertainty in the ultimate realisation / collection.

2.7 Tangible Fixed Assets

Fixed assets are carried at cost less accumulated debrciation and impairment losses, if any. The cost of a tangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Capital work in progress:

Projects under which assets are not ready for their intended use and other capital work-in-progress are carried at cost, comprising direct cost and related incidental expenses.

Advances paid towards acquisition of Fixed assets are included under long-term loans and advances.

2.8 Intangible Assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

2.9 Foreign currency transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company are accounted 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.

Measurement at the balance sheet date

Foreign currency monetary items of the Company, outstanding at the balance sheet date are restated at the year-end rates. Non-monetary items of the Company are carried at historical cost.

Exchange difference recognition

Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

2.10 Investments

Long-Term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current Investments are carried, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.11 Employee benefits

Employee benefits include provident fund, gratuity and compensated absences.

Defined contribution plan:

The Company's contribution to provident fund are considered as defined contribution plan and are charged as an expense as it falls due based on the amount of contribution required to be made and when the services are rendered by the employees.

Defined benefit plans:

For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with Actuarial Valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the year 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 year 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 available refunds and reductions in future contributions to the schemes.

Short-term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the year in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the year in which the employee renders the related service are recognised as a liability at the brsent value of the defined benefit obligation as at the Balance Sheet date.

2.12 Deferred Employee Stock Compensation Cost

Deferred employee stock compensation cost for stock options is recognised as per the Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India. The Company measures compensation cost relating to the employee stock options using the intrinsic value method. The compensation cost, if any, is amortised uniformly over the vesting year of the options.

2.13 Segment Reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

2.14 Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rental income / expenses under operating leases arrangements are recognised in the Statement of Profit and Loss on a straight-line basis.

2.15 Earnings per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax 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 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 year, 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 year brsented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.16 Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one year and are capable of reversal in one or more subsequent years. 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 and items relating to capital 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 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. Deferred tax assets are reviewed at each balance sheet date for their realisability.

Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.

2.17 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.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset

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 (other than a revalued asset) in earlier accounting years no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was brviously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognised.

2.18 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 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.

2.19 Share Issue Expenses

Share issue expenses are adjusted against the Securities Premium Account as permissible under Section 52 of the Companies Act, 2013, to the extent any balance is available for utilisation in the Securities Premium Account. Share issue expenses in excess of the balance in the Securities Premium Account is expensed in the Statement of Profit and Loss.

2.20 Operating Cycle

Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

3 Disclosure of Rights

The Company has only one class of equity shares having a par value of Rs. 10. Each holder is entitled to one vote per equity share. Dividends are paid in Indian Rupees. Dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders at the Annual General Meeting, except in the case of interim dividend.

Repayment of capital will be in proportion to the number of equity shares held.

3.1 Shares Reserved

Refer Note 3.6 with respect to Employee Stock Option Scheme

3.2 Employee Stock Option Scheme

(a) On 17 December 2007, the Company established an Employees Stock Option Scheme 2007 (ESOP Scheme 2007). Under the plan, the Company is authorized to issue upto 5,620,000 Equity Shares of Rs. 10 each to eligible employees of the Company and its Subsidiaries. Employees covered by the plan are granted an option to purchase shares of the Company subject to the requirements of vesting. A Remuneration and

Nomination Committee constituted by the Board of Directors of the Company administers the plan. During the year ended 31 March 2013, the Company established a new employee stock option scheme titled Equitas Employees Stock Option Scheme, 2012 (ESOP Scheme 2012) effective from 10 November  2012. Under the plan, the Company is authorized to issue upto 1,000,000 Equity Shares of Rs. 10 each to eligible employees of the Company and its Subsidiaries. Further, the outstanding options under the ESOP Scheme 2007 has been transferred and made available for grant under the new scheme.

During the year ended 31 March 2014, the Company established a new employee stock option scheme titled Equitas Employees Stock Option Scheme, 2014 (ESOP Scheme 2014) effective from 18 July 2014. Under the plan, the Company is authorized to issue upto 10,500,000 Equity Shares of Rs. 10 each to eligible employees of the Company and its Subsidiaries. Further, the outstanding options under the ESOP S c h e m e  2012 has been transferred and made available for grant under the new scheme.

During the brvious year ended 31 March 2015, pursuant to the issue of bonus shares for the existing shareholders, the company granted 2 additional options for every 1 option outstanding to be exercised as on the date of bonus issue. Further, the exercise price for each option was been reduced to one-third of the original exercise price determined at the grant date.

During the year, the Company established a new employee stock option scheme titled Equitas Employees Stock Option Scheme, 2015 (ESOP Scheme 2015) effective from 7 September 2015. Under the plan, the Company is authorized to issue upto 22,200,000 Equity Shares of Rs. 10 each to eligible employees of the Company and its Subsidiaries. Further, the outstanding options under the ESOP Scheme 2014 has been transferred and made available for grant under the new scheme.

As at 31 March 2016, 15,397,855 (As at 31 March 2015 - 10,761,187 ) (net of forfeitures) options were outstanding, which were granted at various exercise prices. The following are the outstanding options as at 31 March 2016:

10 Capital Work in Progress

The Capital Work in Progress as at 31 March 2016 amounting to Rs.10.39 Lakhs (As at 31 March 2015: Rs. 17.91 Lakhs) rebrsents the cost of construction of additional floors at the existing school buildings and new building work which are in progress as at 31 March 2016.

10.1 Building Given under Operating Lease

The Company constructed buildings primarily for the purpose of leasing them to Equitas Development Initiatives Trust (EDIT) for running schools, as a part of its Corporate Social Responsibility initiatives. During the year the Company has not recognised any amount (For the year ended 31 March 2015 Rs. 36) as rental income because from 1 January 2015, since the Company is providing the buildings on lease to EDIT at free of cost as part of CSR activity (Refer Note 19 and Note 25

11.1 Investment in Equitas B2B Trading Private Limited

As at 31 March 2015, Equitas B2B Trading Private Limited had filed a petition for voluntary winding up with Ministry of Corporate Affairs in accordance with the Companies Act, 2013. During the year, the Ministry of Corporate of Affairs have struck off the name Equitas B2B Trading Private Limited from the Register. The investment was written off in full, out of provisions made in earlier years.

11.2 Investment in Equitas Technologies Private Limited

Equitas Technologies Private Limited ("ETPL"/ "the Company") was Incorporated on 27 October 2015. The Company is a wholly owned subsidiary of Equitas Holdings Limited. The Company is in the freight aggregation business under the brand name of WOW Truck with web domain name registered as 'www.wowtruck.in'. The Company provides a common platform for transporters and suppliers to connect with each other 'online' and carry out transactions on real time basis. During the year, the Company has invested 15,000,000 Equity Shares of Rs.10 each fully paid up.

11.3 Investment in Equitas Finance Limited (Formerly known as "Equitas Finance Private Limited")

During the brvious year, the Company had invested 182,300,000 Equity Shares of Rs.10 each fully paid up at a brmium of Rs.6.45 per share

13 Employee Benefits

13.1 Defined Contribution Plan

The Company makes Provident Fund contributions to State administered fund for qualifying employees. The Company is required to contribute a specified percentage of the payroll costs to the Fund. The Company recognised Rs. 6.47 lakhs (As at 31 March 2015 Rs. 1.69) towards Provident Fund contributions in the Statement of Profit and Loss. The contributions payable to the fund by the Company is at rates specified in the rules of the scheme.

Notes:

The Company accounts for costs incurred by or on behalf of related parties based on the actual invoice / debit notes raised and accruals as confirmed by such related parties. The Related parties have confirmed to the management that as at 31 March 2016, there are no further amounts payable to / receivable from them, other than as disclosed above.

14 Operating Leases

The Company has let out its brmises at Trichy, Dindigul, Salem, Coimbatore, Karur and Cuddalore to Equitas Development Initiatives Trust (EDIT) and income received for the current year Rs. Nil (in the Previous Year income was recorded at an amount of Rs. 36). Because from 1 January 2015, the Company is providing the buildings on lease to EDIT at free of cost as part of CSR activity. The original lease term period is for 30 years (Refer Note 10.2).

Debrciation of Rs. 84.14 Lakhs (Previous Year Rs. 71.14 Lakhs) has been recognised on the leased assets for the Year Ended 31 March 2016

Note:

(a) Income Tax

While completing the Income Tax Assessment for the Assessment Year 2011-12 and 2013-14, the Department had disallowed a portion of total expenses under Section 14A of the Income Tax Act stating that a portion of expenses incurred to earn non-taxable income and raised a demand of Rs. 19.10 Lakhs and Rs. 19.29 Lakhs for respective assessment years. The Company has filed an appeal against the disallowance with Commissioner of Income tax - Appeals. The Company has been professionally advised that they have a strong case in their favour and accordingly no provision has been considered necessary for these disputed demands.

(b) Guarantees

The Company has issued Corporate Guarantee amounting to Rs.154,200 Lakhs (Rs. 191,000 Lakhs -As at 31 March 2015) for the loans taken by Subsidiary Companies from various banks. The amount of such loans outstanding as at 31 March 2016 is Rs. 111,864.45 Lakhs (As at 31 March 2015 - Rs. 147,066.51 Lakhs).

(c) Guarantees to BSE

The Company has issued Bank Guarantee to BSE Limited amounting to Rs.1,876.68 Lakhs (Previous Year - Nil ) as security deposits for the Initial Public Offer of equity shares.

(d) Others

The contingent liabilities stated above excludes claims relating to Provident Fund and Cenvat Credit, which were transferred by the Company pursuant to Scheme of Arrangement with EMFL. The proceedings of the dispute are still carried out in the name of the Company. However, EMFL have agreed to compensate the above contingencies.

15 Statutory Reserve

As per Section 45-IC of the Reserve Bank of India Act, 1934, the Company is required to create a reserve fund at the rate of 20% of the Profit after Tax. Accordingly, the Company has transferred an amount of Rs. 42.40 Lakhs (PreviousYear Rs. 33.11 Lakhs ), out of the Profit after tax for the year ended 31 March 2016 to Statutory Reserve.

16 CSR Activities

The Company in accordance with its CSR Policy has implemented CSR activities, through the Equitas

Development Initiatives Trust, a public charitable trust established by the Company.

The Board of Directors have approved a donation of Rs. 7.00 Lakhs (Previous Year Rs. 9.00 Lakhs) to Equitas Development Initiatives Trust for the year ended 31 March 2016 (Refer Note 21).

17 The Reserve Bank of India (RBI) has granted the Company an 'in-principle' approval for establishing a 'Small Finance Bank' (SFB). As per the requirement of the RBI, the wholly owned subsidiaries of the Company namely, Equitas Micro Finance Limited (EMFL) and Equitas Housing Finance Limited (EHFL) will be merged with Equitas Finance Limited (EFL) to form the SFB. The Scheme of Amalgamation has been filed before the Hon'ble High Court of Judicature at Madras and awaiting approval.

In view of the above, there is no impact on the financial statements of the Company as at and for the year ended March 31, 2016.

18 The Board of Directors have reviewed the realisable value of all the assets of the Group (other than Fixed Assets and Non-Current Investments) and have confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are recognised in the financial statements.

19 Initial Public Offer

The Initial Public Offering (IPO) of the Company opened for subscription from 5 April 2016 to 7 April 2016. The IPO of 197,880,429 equity shares of the Company at the issue price of Rs.110/- per share (consisting of 65,454,545 fresh issue of equity shares and 132,425,884 equity shares under offer for sale) was fully subscribed by the Public. Consequently, the paid up share capital of the Company stands increased to 335,374,912 equity shares of Rs.10/- each. The equity shares were listed in National Stock Exchange of India Limited and BSE Limited on 21 April 2016. Out of the IPO proceeds of Rs.72,000 Lakhs, the Company has till date invested Rs.61,600 lakhs as equity capital in the subsidiaries in line with the Prospectus.

20 Previous Year

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

For and on behalf of the Board of Directors

N Rangachary

Chairman DIN:00054437

P N Vasudevan

Managing Director DIN:01550885

P T Kuppuswamy

Director

DIN:00032309

S Bhaskar Chief Financial Officer

Jayashree S Iyer Company Secretary

A11569

Place : Chennai

Date : 6 May 2016