5paisa capital ltd share price Directors report

Dear Members,

We, the Board of Directors ("Board") are pleased to present the Sixteenth (16th) Annual Report of 5paisa Capital Limited ("5paisa Capital", our Company, "We") along with the Audited Financial Statements for the Financial Year ended March 31, 2023 ("year under review" or "year" or "FY 2022-23"). The consolidated performance of our Company and its subsidiaries has been referred to wherever required.

In compliance with the applicable provisions of Companies Act, 2013, (including any statutory modification(s) or re-enactment(s) thereof, for time being in force) ("Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Regulations"), this report covers the financial results and other developments in respect of 5paisa Capital Limited during the financial year ended March 31, 2023 and upto the date of the Board Meeting held on May 01, 2023 to approve this report.

1. FINANCIAL RESULTS

Our Companys Standalone and Consolidated financial performance during Financial Year 2022-23, as compared with that of the previous Financial Year 2021-22 is summarized below:

				(Rs. In Millions)
Particulars	CONSOLIDATED		STANDALONE
	2022-23	2021-22	2022-23	2021-22
Gross total income	3,393.68	2,979.81	3,381.47	2,975.67
Profit/(Loss) before interest, depreciation and taxation	875.16	454.02	864.29	461.15
Interest and financial charges	206.34	218.69	206.34	218.69
Depreciation	87.94	50.29	80.40	42.75
Profit/(Loss) before tax	580.89	185.04	577.55	199.72
Taxation- Current	83.18	-	82.91	-
- Deferred	62.05	47.68	61.67	51.37
- Short or excess provision for income tax	-	-	-	-
Net profit/ (Loss) for the year	435.67	137.36	432.97	148.35
Less: Appropriations	-	-	-	-
Add: Balance brought forward from the previous year	(355.89)	(493.25)	(318.28)	(466.63)
Balance to be carried forward	79.77	(355.89)	114.69	(318.28)

Note: Previous periods figures have been regrouped/rearranged wherever necessary

The statement containing extract of subsidiaries financial statement are provided on the corporate website at https://www.5paisa.com/investor-relations.

2. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of our Company for the FY 2022-23 are prepared in compliance with the applicable provisions of the Companies Act, 2013 (the Act), Indian Accounting Standards (Ind AS) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) Regulations].

3. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF YOUR COMPANYS AFFAIRS

We, at 5paisa Capital, are committed to fostering the financial journeys of both prevailing and first-time investors. We provide them with a digital platform with various features that helps investors to educate themselves about the world of investments, authorize them to take measured decisions, invest through its mobile application and elevate their participation and gains from the financial market.

Read more about our performance during the year on page no. 128 of this Report.

During the year, we focused on leveraging technology to strengthen our business processes, ensure deeper market penetration and deliver a superior customer experience. As a result, we have cemented our position as a strong player in the discount broking space, offering superior products and services.

The growing penetration of internet and smartphone in the country has helped our Company to expand its customer base. We have leveraged an integrated investment platform to capitalize on the opportunity. Our mobile application/web platform has helped individuals to trade across equity, F&O, commodity, currency segments; invest in mutual fund and insurance; or facilitate algorithm based robo advisory services.

As capital market participation remains low in India when compared to the other developed nations, there is an enormous opportunity for growth. The outlook for financial products distribution looks healthy with gradual resumption of economic activities.

Retail participation is expected to increase, given the favourable demographics, rising financial literacy and increasing smart phone and internet penetration. With the ever-increasing demand for financial transactions, the digital payments ecosystem has also been evolving continuously. These factors will enable us in fuelling 5paisa Capitals future growth trajectory.

4. MACRO-ECONOMIC OVERVIEW

Read more about our performance during the year on page no. 128 of this Report.

5. INDUSTRY OVERVIEW

Read more about our performance during the year on page no. 128 of this Report.

6. KEY INITIATIVES/DEVELOPMENTS

a. Conversion of Share Warrants:

The Capital Raising Committee of the Board of Directors of our Company in its meeting held on August 02, 2022 allotted 12,00,000 Equity Shares pursuant to exercise of options attached to the convertible warrants held by Mr. Nirmal Jain, Mrs. Madhu Jain & Mr. Venkataraman Rajamani, Promoters of the Company, consequent to the receipt of notice for exercise, along with the balance 75% of the application money (being Rs.375/- per share) due on the said warrants, i.e. Rs.45,00,00,000 (INR Forty Five Crore only). The trading approval for the 12,00,000 equity shares was received by our Company from BSE and NSE on August 25, 2022. However, the allotted shares are locked-in up to August 29, 2025 as required by SEBI (ICDR) Regulations, 2018.

b. Scheme of Arrangement between IIFL Securities Limited and 5paisa Capital Limited and their respective shareholders and creditors:

The Board of Directors at their meeting held on December 06, 2022, approved the Scheme of Arrangement between IIFL Securities Limited and 5paisa Capital Limited and their respective shareholders and creditors under Section 230-232 of the Companies Act, 2013, as amended read with other applicable provisions of the Act and Rules made thereunder, which envisages the transfer of the Online Retail Trading Business (Demerged Undertaking) from the IIFL Securities Limited to our Company, so as to consolidate the said business under our Company subject to the approval of the shareholders and such other class of persons as directed by the Honble National Company Law Tribunal, Mumbai Bench (Honble NCLT), sanction of the Honble NCLT and such other approvals as may be required.

Our Company has filed an application with BSE Limited, National Stock Exchange of India Limited and such other membership departments wherein your Company holds membership for obtaining No Objection Certificate pursuant to Regulation 37 of SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015 and the same is under process. We shall file an application to the Honble National Company Law Tribunal (NCLT), Mumbai Bench for the sanction of scheme post receipt of No Objection Certificate from the aforesaid exchanges and other authorities.

Upon the Scheme becoming effective, our Company shall issue 1 (one) fully paid up equity share of INR 10 (Indian Rupees Ten only) each for every 50 (fifty) equity shares of INR 2 (Indian Rupees Two only) each of IIFL Securities Limited.

The details of the Scheme and other related documents are available on our companys corporate website at https://www.5paisa.com/ investor-relations.

c. Setting up of 5paisa International Securities (IFSC) Limited:

With a view to offer diversified products to its customers, our Company intends to offer an option to its clients for trading in US stocks by registering itself with NSE IFSC Ltd. as a trading cum clearing member. Consequently, our Company has incorporated a wholly owned IFSC subsidiary viz. 5paisa International Securities (IFSC) Limited and is in process of seeking all the regulatory licenses and permissions to commence its operations shortly.

7. RETURN TO INVESTORS (DIVIDEND):

In order to conserve the resources of our Company for future expansion, the Directors have decided not to recommend any dividend on equity shares of our Company for the financial year under review.

The Dividend Distribution Policy is available on the website at https://storage.googleapis.com/5paisa-prod- storage/files/investor relations/2022-04/Dividend%20 Distribution%20Policy 1.pdf

8. TRANSFER TO GENERAL RESERVE:

During the year under review, our Company has not transferred any amount to the reserves.

9. TRANSFER OF FUNDS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 ("Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by our Company to the Investor Education and Protection Fund ("IEPF" or "Fund") Account established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/ unclaimed account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority after complying with the procedure laid down under the Rules.

During FY 2022-23, our company had not transferred any shares to IEPF Account.

However, as on the March 31, 2023, Rs.0.18 million is lying as the unclaimed fractional entitlements in the unpaid fractional shares account.

10. AWARDS AND RECOGNITION:

During the year under review, our Company received numerous awards and accolades which were conferred by reputable organizations and is designed to honor the efforts made by us and the details of the same are given herein below:

• The Great Indian BFSI CEO of the Year

Mr. Prakarsh Gagdani, Chief Executive Officer and Whole-Time Director of our Company has been recognized as The Great Indian BFSI CEO of the Year.

• The Great Indian BFSI fastest growing Company of the Year

5paisa Capital Limited was recognized as

"The Great Indian BFSI fastest growing Company of the Year".

• Naya Bharat Business Conclave 2022

5paisa Capital Limited was awarded in Naya Bharat Business Conclave 2022.

• Excellence in Online Share Trading

5paisa Capital Limited was recognized as

"Excellence in Online Share Trading".

• Digixx Awards 2022

5paisa Capital Limited won Silver in Digixx Awards 2022.

• Best Integration of Digital Content with TV

5paisa Capital Limited was recognized as "Best Integration of Digital Content with TV".

11. SHARE CAPITAL:

The paid up equity share capital of our Company as on March 31, 2023 was Rs.306,355,680/- divided into 30,635,568 equity shares of Rs.10/- each as compared to Rs.294,173,180/- divided into 29,417,318 equity shares of Rs.10/- each as on March 31, 2022.

The increase in the share capital was on account of issuance of 12,00,000 equity shares on preferential basis to promoters pursuant to conversion of Share Warrants as mentioned above in Point No. 6 of this Report and pursuant to exercise of 18,250 ESOPs granted under the 5paisa Capital Limited Employee Stock Option Scheme 2017, by eligible employees, which were converted into equity shares Rs.10/- each.

12. EMPLOYEES STOCK OPTION SCHEMES ("ESOS"):

Presently, our Company has two Schemes which are prepared as per the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"):

1) 5paisa Capital Limited Employee Stock Option Scheme 2017 ("5PCL ESOS 2017") was approved by shareholders vide a special resolution dated January 25, 2018.

2) 5paisa Capital Limited Employee Stock Option Trust Scheme 2017 ("5PCL ESOTS 2017") was approved by shareholders vide a special resolution dated January 25, 2018.

During the year under review, there was no material change in ESOS of our Company. As per Regulation 14 of "SBEB Regulations", read with SEBI circular no. CIR/CFD/ POLICY CELL/2/2015 dated June 16, 2015, the details of the "ESOS" are uploaded on our corporate website at https://www.5paisa.com/investor-relations and the same is available for inspection by the Members at the Registered Office of our Company. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a soft copy would be sent at the registered email address of the Member. A certificate from Secretarial Auditor of the Company confirming that the Scheme has been implemented in accordance with the applicable Regulations would be made available for inspection by Members through electronic means.

13. INCREASE IN SIZE OF ESOP POOL:

The Board of Directors in their meeting held on January 11, 2023 and pursuant to recommendation of Nomination and Remuneration Committee, approved the increase in size of ESOP Pool for grant of options to eligible employees under the Employee Stock Option Scheme-2017 from 15,00,000 (Fifteen Lakhs) options to 22,00,000 (Twenty-two Lakhs) options convertible into equity shares of Rs.10/- each of the Company. Further, the members vide Special Resolution dated March 01, 2023 passed through postal ballot also approved the same.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

Particulars of loans, guarantees given and investments made during the year, as required pursuant to the provisions of Section 186 of the Companies Act, 2013 and schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("LODR Regulations"), forms part of the financial statements.

15. DEPOSITS:

Our Company has not accepted any deposits from public falling under the ambit of Section 73 of the Companies Act, 2013 and the Rules framed thereunder and as such, no amount on account of principal or interest on deposits from public was outstanding as on the Balance Sheet date.

Further, our Company does not intend to raise any public deposits, in terms of its declaration to the Reserve Bank of India.

16. SUBSIDIARIES:

• 5paisa P2P Limited

During the year under review, the company continued its operations as P2P NBFC. However, the lending and borrowing activities on the said platform were carried out conservatively.

• 5paisa Corporate Services Limited (Formerly known as 5paisa Insurance Brokers Limited)

Since, no business was undertaken in the company from the date of incorporation and on account of its inability to register as an Insurance Broker, the management decided to change the main object of the Company and undertake different business under the said company. Accordingly, the name of the company was changed from 5paisa Insurance Brokers Limited to 5paisa Corporate Services Limited with effect from November 16, 2022 pursuant to receipt of fresh Certificate of Incorporation dated November 16, 2022 issued by the Registrar of Companies, Mumbai, in order to align with the main object of the company. The Company shall commence its business shortly.

• 5paisa Trading Limited

During the year under review, the Company commenced its business by offering an online trading platform to its clients to trade in Digital Gold.

• 5paisa International Securities (IFSC) Limited

5paisa International Securities (IFSC) Limited was incorporated as a public limited company on June 15, 2022 as a wholly owned subsidiary of 5paisa Capital Limited. 5paisa International Securities (IFSC) Limited is incorporated with the intention of carrying out business of IFSC (International Financial Service Centre) Unit and act as intermediary in IFSC. The Company is in process of registration with NSE IFSC Limited as a trading cum clearing member and shall commence its operations after receipt of necessary clearances/licenses.

17. CONSOLIDATED FINANCIAL STATEMENTS:

As per the provisions of section 134 and 136 of the Companies Act, 2013 read with applicable Rules, Regulation 33 of LODR Regulations and applicable Accounting Standards, the Board of Directors had in their meeting held on May 01, 2023 approved the Consolidated Financial Statements of our Company along with the Standalone Financial Statements. Copies of the Balance Sheet, Statement of Profit & Loss, Report of the Board of Directors and Report of the Auditors of the subsidiary company are not attached to the accounts of our Company for the financial year 2022-23. Our Company will arrange for soft copies of these documents/ details upon request by any member of the Company and dispatch the same on the registered email address of the member.

These documents/details will also be available for inspection by any member of our Company at its registered office and at the registered offices of the concerned subsidiary during the business hours on working days i.e. except on Saturdays, Sundays and Public Holidays. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a soft copy of the same would be sent to the registered email address of the member. The Annual Report of subsidiaries is uploaded on our corporate website at https:// www.5paisa.com/investor-relations. As required by Companies Act, 2013 and Accounting Standard - 21 (AS 21) issued by the Institute of Chartered Accountants of India, our Companys Consolidated Financial Statements included in this Annual Report incorporate the accounts of its subsidiaries. A report on the performance and financial position of the subsidiaries is provided in the prescribed form AOC-1 as "Annexure-I" to this Directors Report.

The policy on determining the material subsidiary is available on our corporate website at https://storage. googleapis.com/5paisa-prod-storage/files/investor_ relations/2021-05/policy-on-determining-material- subsidiary.pdf.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In accordance with Regulation 34 of LODR Regulations, the Management Discussion and Analysis Report is presented in separate section to this Annual Report.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Pursuant to Regulation 34(2) of the Listing Regulations read with SEBI Circular No. CIR/CFD/CMD/10/2015 and PR No. 18/2021 dated November 04, 2015 and May 10, 2021 respectively, the Business Responsibility and Sustainability Report describing the initiatives taken by our Company, from an environmental, social and governance perspective is provided in a separate section and forms part of this Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. Directors:

The Board comprises of the following Directors as on March 31, 2023.

Mr. Prakarsh Gagdani (DIN: 07376258)	Whole-Time Director
Mr. Gourav Munjal (DIN: 06360031)	Whole-Time Director
Dr. Archana Hingorani (DIN: 00028037)	Non - Executive Independent Director
Mr. Milin Mehta (DIN: 01297508)	Non - Executive Independent Director
Mr. Ravindra Garikipati (DIN: 00984163)	Non - Executive Independent Director
Ms. Nirali Sanghi (DIN: 00319389)	Non - Executive Independent Director

I. Changes in Board Composition

During the year under review, there were no changes in the composition of the Board.

II. Retirement by Rotation

In accordance with Section 152 of the Companies Act, 2013 ("Act") read with Article 157 of the Articles of Association of the Company, Mr. Gourav Munjal (DIN: 06360031), Whole Time Director and Chief Financial Officer of our Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board recommends their re-appointment for the approval of members. A resolution seeking approval of the members for his re-appointment forms part of the Notice of 16th AGM of our Company.

There was no change in the composition of the Board of Directors and Key Managerial Personnel during the financial year ended March 31, 2023, except as stated above.

b. Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Companies Act, 2013 and rules made thereunder, the Key Managerial Personnel of our Company as on March 31, 2023 are:

Mr. Prakarsh Gagdani	: Whole-Time Director & Chief Executive Officer
Mr. Gourav Munjal	: Whole-Time Director & Chief Financial Officer
Mrs. Namita Godbole	: Company Secretary & Compliance Officer

The Remuneration and other details of the Key Managerial Personnel for the year ended March 31, 2023 are mentioned in Form MGT-7 - Annual Return which can be accessed on our corporate website at https://www.5paisa.com/investor-relations.

Further, pursuant to SEBI Circular No. SEBI/ HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/24 dated February 06, 2023, your company has recognized and has designated following CXO level officers as a Key Managerial Personnel of your company for managing the key risks.

Mrs. Namita Godbole :	Chief Compliance Officer
Mr. Yogesh Maroli :	Chief Information Security Office

21. MEETING OF DIRECTORS AND COMMITTEE/BOARD EFFECTIVENESS:

• Meetings of the Board of Directors

The Board met Five (5) times during the year to discuss and approve various matters including financials, raising of funds, review of audit reports and other businesses. For further details please refer to the report on Corporate Governance.

• Committees of the Board of Directors (as on March 31, 2023)

In accordance with the applicable provisions of the Companies Act, 2013 and LODR Regulations, the Board has in place the following Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Finance Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

• Environment, Social and Governance (ESG) Committee

• Independent Directors (ID) Committee

• Audit Committee:

During the year, there was no change in the composition of Audit Committee. The Audit Committee met Five (5) times which is in compliance with the provisions of LODR Regulations and Companies Act, 2013. The Committee comprises of Mr. Milin Mehta as the Chairman, Ms. Nirali Sanghi and Dr. Archana Hingorani as the Members of the Audit Committee.

The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and LODR Regulations. The Committee met during the year under review and discussed on various matters including financials and audit reports. During the period under review, the Board of Directors of our Company accepted all the recommendations of the Audit Committee.

The terms of reference of Audit Committee and details of Committee Meeting are provided in the Corporate Governance Report.

• Nomination & Remuneration Committee

During the year, the Nomination & Remuneration Committee met Two (2) times. The Committee comprises of Ms. Nirali Sanghi as the Chairperson, Dr. Archana Hingorani, Mr. Ravindra Garikipati and Mr. Milin Mehta as members of the Committee.

The role, terms of reference and powers of the Nomination & Remuneration Committee are in conformity with the requirements of the Companies Act, 2013 and LODR Regulations and the same has been provided in the Corporate Governance Report.

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Nomination and Remuneration Policy in compliance with the aforesaid provisions for selection and appointment of Directors, Key Managerial Personnel (KMP), Senior Managerial Personnel (SMP) of our company. The said policy is stated in the Corporate Governance Report of our Company and can also be accessed on our corporate website at https://www.5paisa.com/investor-relations.

The details of Committee Meeting are provided in the Corporate Governance Report.

• Stakeholders Relationship Committee

During the year, the Stakeholders Relationship Committee met one (1) time in compliance with the provisions of LODR Regulations and Companies Act, 2013. The Committee comprises of Ms. Nirali Sanghi as the Chairperson, Dr. Archana Hingorani and Mr. Prakarsh Gagdani as the Members of the Committee.

The role, terms of reference of the Stakeholders Relationship Committee are in conformity with the requirements of the Companies Act, 2013 and Regulation 20 of LODR Regulations and the same has been provided in the Corporate Governance Report.

During the year under review, our Company has not received any complaints from any Stakeholders. The details of the Meeting are given in the Corporate Governance Report.

• Finance Committee

During the year, the Finance Committee met Eighteen (18) times. The Committee comprises of Mr. Prakarsh Gagdani as the Chairman and Mr. Gourav Munjal as the member of the Committee.

The role and terms of reference of the Finance Committee are in conformity with the requirements of the Companies Act, 2013 and Regulation 20 of LODR Regulations and the same has been provided in the Corporate Governance Report.

The details of the Meetings are given in the Corporate Governance Report.

• Risk Management Committee

During the year, the Risk Management Committee met Two (2) times. The Committee comprises of Dr. Archana Hingorani as Chairperson, Mr. Prakarsh Gagdani and Mr. Gourav Munjal as the member of the Committee.

Our Company is exposed to a lot of inherent uncertainties owing to the sector in which it operates. A key factor in ascertaining a companys capacity to maintain its sustainable value is the risks that it is willing to take at both - strategic and operational level and its ability to manage them effectively.

Our Companys Risk Management processes focus on ensuring that the risks to which our company is exposed to, at all times, are identified on a timely basis and addressed with appropriate solutions. Further, as mandated by LODR Regulations, the Board of Directors, in its meeting held on April 20, 2021, has constituted a Risk Management Committee.

The Committee has adopted a Risk Management policy which outlines the role, responsibilities and powers of the Committee and the procedure and periodicity for organizing the meeting of the Committee. The purpose of the Committee is to assist the Board of Directors in fulfilling its oversight responsibilities with regard to enterprise risk management. The Committee shall review the risk management practices and actions deployed by the Management with respect to identification, impact assessment, monitoring, mitigation and reporting of key risks while at the same time trying to achieve its business objectives. Further, the Committee shall endeavor to assist the Board in framing, implementing and monitoring the risk management plan for our Company and reviewing and guiding the risk policy.

The Committee shall have the primary responsibility of implementing the Risk Management Policy of our Company and achieving the stated objective of developing a risk mitigated culture that supports decision making and helps improve our Companys performance.

The role, terms of reference of the Risk Management Committee are in conformity with the requirements of the Companies Act, 2013 and LODR Regulations and the same has been provided in the Corporate Governance Report.

The Directors, on a regular basis:

(a) oversee and approve our Companys enterprise-wide risk management framework

(b) oversee that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational KYC Risk, technology risks, operational risk, general risk which includes fraud risk, risk due to outsourcing of activities to third parties and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

Our company has in place various policies and procedures covering the business, operations, employees, finance & accounting, customer services which are approved by the Board.

Our Company has in place specialized internal audits on Broking and Depository Participant business as per the SEBI/Exchanges/Depositories norms. The findings on Audit Reports are reviewed by the Audit Committee/Board at their periodical meetings and the reports are submitted to the Exchanges/Depositories.

Our management monitors and reports on the principal risks and uncertainties that can impact our Companys ability to achieve its strategic objectives.

Our management systems, organizational structures, processes, standards and code of conduct together form the risk management governance system of our Company and management of associated risks.

• Corporate Social Responsibility Committee

During the year, the Corporate Social Responsibility Committee met One (1) time. The Committee comprises of Mr. Milin Mehta as Chairman, Mr. Prakash Gagdani and Mr. Gourav Munjal as Members of the Committee.

The Board of Directors, in their meeting held on April 20, 2021 has framed and adopted the Corporate Social Responsibility (CSR) policy, which can be accessed on our corporate website, at https://storage.googleapis.com/5paisa-prod- storage/files/investor relations/2022-04/ CSR-Policy-updated.pdf.

Annual Report on CSR activities, as required under sections 134 and 135 of the Companies Act, 2013 read with rule 8 of the (Corporate Social Responsibility Policy) Rules, 2014, as amended ("CSR Rules") is provided as "Annexure V" to this Directors Report.

Further, our Company is required to spend at least 2% of its average net profits during three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.

• Environmental, Social and Governance ("ESG") Committee

The Environmental, Social and Governance ("ESG") Committee was constituted on December 01, 2022 and the Members of the Committee comprises of Ms. Nirali Sanghi, Independent Director, as the Chairperson, Mr. Gourav Munjal, Whole-Time Director and Chief Financial Officer and Ms. Namita Godbole, Company Secretary and Compliance officer as the Members.

The role and terms of reference of the ESG Committee has been provided in the Corporate Governance Report.

• Independent Directors (ID) Committee

The Independent Directors (ID) Committee was constituted on December 01, 2022 and the Members of the Committee comprises of Mr. Ravindra Garikipati, Independent Director, as the Chairman, Ms. Nirali Sanghi, Independent Director, Dr. Archana Hingorani, Independent Director and Mr. Milin Mehta, Independent Director as the Members.

The role and terms of reference of the ID Committee has been provided in the Corporate Governance Report.

The details of the Meeting are given in the Corporate Governance Report.

• Board Effectiveness

• Familiarization Program for the Independent Directors:

In compliance with the requirements of LODR Regulations, our Company has put in place a Familiarization Program for Independent Directors to familiarize them with the working of our Company, their roles, rights and responsibilities vis-a-vis our Company, the industry in which the Company operates business model etc. Details of the Familiarization Program are explained in the Corporate Governance Report and are also available on our corporate website at https:// storage.googleapis.com/5paisa-prod- storage/files/investor relations/2021-04/ familarisation-programmes.pdf

• Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and LODR Regulations and SEBI Circular No. SEBI/CFD/CMD/CIR/P/2017/004 dated January 05, 2017, the Board of Directors have carried out an annual performance evaluation of its own performance, its Committees, the Directors individually including Independent Directors (wherein the concerned Director being evaluated did not participate) based out of the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by Nomination & Remuneration Committee ("NRC"). The evaluation process, manner and performance criteria for independent directors in which the evaluation has been carried out is explained in the Corporate Governance Report which forms part of this Annual Report. The Board is responsible to monitor and review the evaluation framework.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting held on March 21, 2023 reviewed the following:

• Performance of Non-Independent Directors and the Board and the Committee as a whole.

• Performance of the Chairperson of your Company.

• Assessed the quality, quantity and timeliness of flow of information between our Companys management and the Board, which is necessary for the Board to effectively and reasonably perform their duties.

The Independent Directors expressed their satisfaction with overall functioning and implementations of their suggestions.

The evaluation process endorsed the Board Members confidence in the ethical standards of our Company, the cohesiveness that exists amongst the Board Members, the two-way candid communication between the Board and the Management and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities.

• Statement on declaration given by the Independent Directors :

The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act. Our Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and rule 5 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and as well as under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and there has been no change in the circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact the ability of Independent Directors to discharge their duties with an objective independent judgment and without any external influence.

The above declarations were placed before the Board and in the opinion of the Board, all the Independent Directors fulfil the conditions specified under the Act and the SEBI Listing Regulations and are Independent to the Management.

22. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Sections 134(3)(c) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:

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

b) t hey 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 our Company at the end of the financial year and of the profit or loss of our Company for that period.

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

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

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

23. INTERNAL CONTROL SYSTEMS:

Internal audit and its adequacy

The scope and authority of the internal audit function is well defined and to maintain independence and objectivity in its functions, the internal audit function reports directly to the Audit Committee of the Board. At the beginning of each Financial Year, a risk-based annual audit plan is rolled out after it is approved by the Audit Committee of the Board. The audit plan aims to evaluate the efficacy and adequacy of the internal control system(s) and compliance(s) thereof, robustness of internal processes, policies and accounting procedures, compliance with laws and regulations. The Internal Audit function, consisting of professionally qualified chartered accountants and specialists, is adequately skilled and resourced to deliver audit assurances at highest levels. Based on the reports of internal audit function, process owners undertake corrective action in their respective areas. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Internal Financial Controls Systems and their Adequacy

Our Company has in place adequate internal controls with reference to financial statements and operations and the same are operating effectively. The Internal Auditors tested the design and effectiveness of the key controls and no material weaknesses were observed in their examination. Further, Statutory Auditors verified the systems and processes and confirmed that the Internal Financial Controls system over financial reporting are adequate and such controls are operating effectively.

Based on the framework of internal financial controls and compliance systems established and maintained by our Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by management and the relevant board committees, including the Audit committee, the Board is of the opinion that our Companys internal financial controls were adequate and effective during FY 2022-23.

24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

Our Company has put in place a policy for Related Party Transactions (RPT Policy), which has been approved by the Board of Directors. The policy provides for identification of RPTs, necessary approvals by the Audit Committee/Board/Members, reporting and disclosure requirements in compliance with Companies Act, 2013 and provisions of LODR Regulations.

All transactions with Related Parties are placed before the Audit Committee and also the Board for approval. Prior omnibus approval of the Audit Committee and the Board is obtained for the transactions which are foreseeable and of a repetitive nature. The transactions entered into pursuant to the approvals so granted are subjected to audit and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. The statement is supported by a certificate from Independent Chartered Accountant.

All contracts executed by our Company during the financial year with related parties were on arms length basis and in the ordinary course of business. All such Related Party Transactions were placed before the Audit Committee/Board for approval, wherever applicable.

During the year, our Company has entered into any contract/arrangement/transaction with related parties, which are considered as material in accordance with Regulation 23 of LODR Regulations and the same was also approved by the members in the Annual General Meeting held on July 11,2022. The policy for determining material subsidiaries and the policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on our corporate website at https://www.5paisa.com/investor-relations. You may refer to Note no. 33 to the financial statement, which contains related party disclosures.

Our Company had not entered into any contracts or arrangements or transactions under sub-section (1) of section 188 of the Act. Hence, Form AOC-2 disclosure is not required to be provided.

None of the Directors and the Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.

25. ANNUAL RETURN:

As per the requirements of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of our Company is available on the corporate website at https://www.5paisa.com/investor-relations.

26. CHIEF EXECUTIVE OFFICER (CEO) AND CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION:

A Certificate from Mr. Prakarsh Gagdani, CEO and Mr. Gourav Munjal, CFO, pursuant to provisions of SEBI (LODR) Regulations, 2015, for the year under review was placed before the Board of Directors of our Company at its meeting held on May 01, 2023.

27. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF OUR COMPANY:

There have been no material changes and commitments affecting the financial position of our Company, which have occurred between the end of the financial year of our Company to which the financial statements relate and the date of this Annual Report. There has been no change in the nature of business of our Company as on the date of this Report.

However, kindly note that Exchange vide its circulars no. NSE/INSP/4519 dated July 31, 2020 and NSE/ INSP/49929 dated October 12, 2021, had directed all the stock brokers for reversing the penalties levied on account of short/non-collection of upfront margins to its clients, if the same were debited to the clients in the past. Consequently, in adherence to the directions, the company had reversed an amount of Rs.709 Lakhs to its eligible clients during the year, being the amount recovered from such clients on account of penalty levied by clearing corporation on company for "Short Collection/Non-collection of upfront margins from the client" since October 11, 2021 as per NSE Circular Ref. No. NSE/ INSP/53525 dated September 02, 2022. The same has been included in "Other Expenses" of above "Statement of Standalone Financial Results" in Q3 FY 2022-23 and in FY 2022-23.

28. SECRETARIAL AUDITOR, SECRETARIAL AUDIT REPORT AND COMPLIANCE WITH SECRETARIAL STANDARDS:

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. Nilesh Shah & Associates, Company Secretaries in whole-time practice, Mumbai, as Secretarial Auditor for conducting Secretarial Audit of our Company for the financial year 2022-23. The Auditor had conducted the audit and their report thereon was placed before the Board. The Secretarial Audit Report for the Financial Year 2022-23 does not contain any material observations or instances of non-compliance in respect of the same. The Secretarial Auditors report is appended as "Annexure - II" to this Directors Report. Our Company is in compliance with the Secretarial Standards, specified by the Institute of Company Secretaries of India ("ICSI").

29. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The additional information on energy conservation, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is appended as "Annexure -III" to this Directors Report.

30. WHISTLE BLOWER POLICY/ VIGIL MECHANISM:

Our Company since its inception believes in honest and ethical conduct from all the employees and others who are directly or indirectly associated with us.

Further, in compliance of the Companies Act, 2013 and Regulation 22 of LODR Regulations, we have adopted a Whistle Blower Policy. Our Companys vigil mechanism/ Whistle blower Policy aims to provide the appropriate platform for Whistle blowers to report instances of any actual or suspected incidents of unethical practices, violation of applicable laws and regulations including our Companys code of conduct or ethics policy or Code of Conduct for Prevention of Insider Trading in our Company, Code of Fair Practices and Disclosure. The Policy also provides for adequate safeguards against victimization of Director(s)/ Employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. It is affirmed that no person has been denied access to the Audit Committee. Our Company has disclosed the policy at our corporate website at https://storage.googleapis.com/5paisa-prod- storage/files/investor relations/2021-05/whistle-blower- policy.pdf.

The Audit Committee is also committed to ensure fraud-free work environment. We investigate complaints speedily, confidentially and in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always maintained.

During the financial year 2022-23, no cases under this mechanism were reported to our Company and/or to any of its subsidiaries.

31. PREVENTION OF SEXUAL HARASSMENT:

We recognize our responsibility and provide equal opportunities and are committed to creating a healthy working environment that enables all our employees to work with equality and without fear of discrimination, prejudice, gender bias or any form of harassment at workplace. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, our Company has put in place a Policy on prevention of Sexual Harassment of Women at workplace. We have complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The policy is frequently communicated at regular intervals through various assimilation programs to all the employees.

The Directors further state that during the fiscal year 2022-23, there were no complaints pending pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The following is reported pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

a) Number of complaints received in the year: Nil

b) Number of complaints disposed off during the year: Nil

c) Number of cases pending more than ninety days: Nil

d) Number of workshops or awareness program against sexual harassment carried out: Our Company has conducted an online training for creating awareness against the sexual harassment against the women at workplace.

e) Nature of action taken by the employer or district officer: Not Applicable.

Further, awareness and training sessions about the Prevention of Sexual Harassment at workplace are conducted for all employees, including our associates. Further, following are some of the awareness programs imparted to train the employees and Internal Complaints Committee ("ICC") during the year:

1. Every employee of our company has to undergo mandatory e-learning module on "Prevention of Sexual Harassment" at workplace.

2. Every new joiner is trained on Prevention of Sexual Harassment during induction program.

3. The Internal Complaints Committee is appropriately trained when the Committee Members are on-boarded to the Committee.

4. Policy of "Prevention of Sexual Harassment" at workplace is available on the intranet portal to access as and when required. Further, our company has setup an ICC which has equal representation of men and women and is chaired by senior woman and has an external women representation. The details of ICC members have been prominently displayed across all areas in office.

32. PARTICULARS OF EMPLOYEES:

The statement of Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in "Annexure - IV" to this Directors Report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rules 5(2) and 5(3) of the aforesaid Rules, forms part of this Annual Report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the Members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by any member of our Company during the business hours on working days except on Saturdays, Sundays and Public Holidays upto the date of the ensuing Annual General Meeting ("AGM"). Any Member interested in obtaining a copy of the same may write to the Company Secretary at csteam@5paisa.com. whereupon a soft copy would be sent to the Member.

33. STATUTORY AUDITORS:

As per Section 139 of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, the members of our Company in its 15th AGM of the Company approved the re-appointment of M/s. V Sankar Aiyar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 109208W), as the Statutory Auditors of our Company for a term of five consecutive years i.e. from the conclusion of 15th AGM till the conclusion of 20th AGM of our Company.

34. AUDITORS REPORT:

The notes on the financial statement referred in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer for the Financial Year 2022-23.

35. REPORTING OF FRAUDS BY AUDITORS:

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in our Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

36. CORPORATE GOVERNANCE:

Our Company has a strong legacy of following fair, transparent and ethical governance practices and is committed to maintain the highest standards of Corporate Governance and strictly adheres to the Corporate Governance requirements set out by SEBI. Our Companys Corporate Governance policy is based on the belief that good governance is an essential element of business, which helps us fulfill our responsibilities towards all our stakeholders. The report on Corporate Governance as stipulated under the LODR Regulations forms an integral part of this Annual Report of our Company. The requisite Auditors Certificate on Corporate Governance obtained from M/s. V Sankar Aiyar & Co., Chartered Accountants (Firm Registration Number: 109208W) for compliance with LODR Regulations is attached to the report on Corporate Governance.

37. MAINTENANCE OF COST RECORDS:

The maintenance of cost records, for the services rendered by our Company is not required pursuant to Section 148(1) of the Companies Act, 2013 read with Rule 3 of the Companies (Cost records and audit) Rules, 2014.

38. GENERAL:

The Directors states that there being no transactions with respect to the following items during the financial year 2022-23, no disclosure or reporting is required with respect to the same:

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

2. Significant or material orders passed against our Company by the Regulators or Courts or Tribunals during the year ended March 31, 2023 which would impact the going concern status of our Company and its future operations.

3. Buyback of shares.

4. Receipt of any remuneration or commission by the Whole-time Director of our Company from any of its subsidiaries.

5. Material changes and commitments affecting the financial position of our Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report, unless otherwise stated in the report.

6. Application or proceedings made under the Insolvency and Bankruptcy Code, 2016.

39. APPRECIATION:

The Directors place on record their sincere appreciation for the assistance and guidance provided by the Government, Regulators, Stock Exchanges, Depositories, other statutory bodies and our Companys Bankers for the assistance, cooperation and encouragement extended to our Company.

The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year. Our employees are instrumental for the Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as members is also greatly valued. The Directors look forward to your continuing support.

For 5paisa Capital Limited
Prakarsh Gagdani	Gourav Munjal
Whole-Time Director & Chief Executive Officer	Whole-Time Director & Chief Financial Officer
DIN:07376258	DIN: 06360031
Date: May 01,2023
Place: Thane