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Company Information

Home » Market » Company Information

Affle (India) Ltd.

Nov 29, 04:00
1117.00 -63.10 ( -5.35 %)
 
VOLUME : 36862
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1180.00
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1259.25
Nov 29, 03:59
1116.25 -65.35 ( -5.53 %)
 
VOLUME : 581885
Prev. Close 1181.60
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1149.55
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Market Cap. ( ₹ ) 14874.15 Cr. P/BV 17.94 Book Value ( ₹ ) 62.23
52 Week High/Low ( ₹ ) 1260/631 FV/ML 2/1 P/E(X) 110.34
Bookclosure 08/10/2021 TTM EPS ( ₹ ) 12.94 Div Yield (%) 0.00
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2021-03 

The Board of Directors hereby submits the report of the business and operations of Affle (India) Limited (“Affle” or the “Company”), along with the audited financial statements, for the financial year ended March 31, 2021.

The results of operations for the year under review are given below:

FINANCIAL HIGHLIGHTS

(In Rs. million)

Particulars

Consolidated

Standalone

FY2020-21

FY2019-20

FY2020-21

FY2019-20

Revenue from contracts with customers

5,167.79

3,337.83

2,667.34

1,822.26

Other income

415.31

60.88

64.45

51.30

Total revenue

5,583.10

3,398.71

2,731.79

1,873.56

Total expenses

4,103.89

2,606.46

2,336.13

1,433.31

Profit before exceptional items and tax

1,479.21

792.25

395.66

440.25

Less: Exceptional items

-

-

-

-

Profit before tax

1,479.21

792.25

395.66

440.25

Less: Current tax

119.80

138.35

91.45

112.60

Less: Deferred tax charge / (credit)

9.04

(1.27)

21.94

(1.20)

Profit for the year

1,350.37

655.17

282.27

328.85

Other comprehensive (loss) / income

(54.38)

54.73

(0.71)

1.16

Total comprehensive income for the year

1,295.99

709.90

281.56

330.01

Non-controlling interests

2.34

-

-

-

Profit attributable to equity holders of the parent

1,348.03

655.17

282.27

328.85

Total comprehensive income attributable to equity holders of the parent

1,293.65

709.90

281.56

330.01

Earnings per equity share - face value of Rs. 10/- each

52.96

26.13

11.07

13.12

REVIEW OF OPERATIONS Consolidated Financial Review

During the year under review, the Company reported total revenue of Rs. 5,583.10 million, an increase of 64.3% from Rs. 3,398.71 million in FY2019-20. Revenue from contracts with customers was Rs. 5,167.79 million, an increase of 54.8% from Rs. 3,337.83 million in FY2019-20. Profit before tax registered a growth of 86.7%

to stand at Rs. 1,479.21 million for the year under review as compared to Rs. 792.25 million in FY2019-20. Profit after tax registered a growth of 106.1% to stand at Rs. 1,350.37 million for the year under review as compared to Rs. 655.17 million in FY2019-20. Profit after tax attributable to equity holders of the parent (after adjusting for non-controlling interests) registered a growth of 105.8% to stand at Rs. 1,348.03 million for the year under review as compared to Rs. 655.17 million in FY2019-20.

Total debt for the Company was Rs. 1,168.43 million as of March 31, 2021 and total cash & cash equivalent (including 'other bank balance') was Rs. 632.45 million as of March 31, 2021.

The Company generated Cash flows from operations of Rs. 1,016.16 million during the year, a growth of 41.4% from Rs. 718.52 million generated in FY2019-20.

Standalone Financial Review

During the year under review, the Company reported total revenue of Rs. 2,731.79 million, an increase of 45.8% from Rs. 1,873.56 million in FY2019-20. Revenue from contracts with customers was Rs. 2,667.34 million, an increase of 46.4% from Rs. 1,822.26 million in the previous financial year. Profit before tax stood at Rs. 395.66 million for the year under review as compared to Rs. 440.25 million in the previous financial year. Profit after tax stood at Rs. 282.27 million for the year under review as compared to Rs. 328.85 million in the previous financial year.

On a standalone basis, the Company had no debt as of March 31, 2021 and total cash & cash equivalent (including 'other bank balance') was Rs. 342.96 million as of March 31, 2021.

DIVIDEND

The Directors wish to invest the profits back into the Company for further growth and expansion, and therefore did not recommend any dividend for the FY2020-21.

TRANSFER TO RESERVES

The Company did not transfer any amount to the general reserve during the year.

MATERIAL CHANGE AND COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

The Company on May 4, 2021 made an allotment of 1,153,845 equity shares of face value Rs. 10 each at a price of Rs. 5,200 per equity share, including a premium of Rs. 5,190 per equity share at a discount of 4.11% on the Floor Price amounting to Rs. 222.94 per equity share, aggregating to Rs. 5,999.99 million to Qualified Institutional Buyers pursuant to Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018.

In view of the above, the paid-up share capital of the Company increased from Rs. 254,963,670/-divided into 25,496,367 equity shares of face value Rs. 10/- per share, to Rs. 266,502,120 divided into 26,650,212 equity shares of face value Rs. 10/- per share.

CHANGE IN NATURE OF BUSINESS OF THE COMPANY

There was no change in the nature of business of the Company.

SHARE CAPITAL

As on the date of this report, consequent to allotment made to Qualified Institutional Buyers on May 4, 2021, the paid-up share capital of the Company is Rs. 266,502,120 divided into 26,650,212 equity shares of face value of Rs. 10/- per share.

BUSINESS ACQUISITIONS AND STRATEGIC INVESTMENTSBusiness AcquisitionsAcquisition of Appnext Pte. Ltd.

The Company through its wholly owned subsidiary, Affle International Pte. Ltd., Singapore (“Affle International”), acquired 66.67% shares and 95% control in Appnext Pte. Ltd. (“Appnext”), vide Share Purchase Agreement for a consideration of USD 16.45 million (equivalent to Rs. 1,204.73 million). Also, Affle MEA FZ-LLC, Dubai (“AMEA”), a step-down subsidiary of the Company entered into an Intellectual Property Purchase Agreement

to acquire 100% Tech IP assets of Appnext for a consideration of USD 0.80 million (equivalent to Rs. 58.59 million).

Further, Affle International, in the Share Purchase Agreement, also has the right to acquire 28.33% shares of Appnext at the end of three years from the date of completion of the Share Purchase Agreement which has been accounted as per anticipated acquisition method in books of Affle International.

Acquisition of business assets of Discover Tech Limited

On February 17, 2021, the Company through its step-down subsidiary, Affle MEA FZ-LLC, Dubai completed the necessary closing conditions for acquisition of business assets of Discover Tech Limited.

For more details on acquisitions and strategic investments by the Company during the year, please refer note 39 of the Consolidated Financial Statements.

Strategic Investments

Talent Unlimited Online Services Private Limited (“Bobble”)

On August 08, 2020, the Company had made a strategic, non-controlling investment and acquired 8% stake on a fully diluted basis in Talent Unlimited Online Services Private Limited (“Bobble”) for a consideration of Rs. 198.00 million through Compulsory Convertible Preference Shares (“CCPS”). Additionally, the Company also entered into an exclusive global monetisation agreement for Bobble's intellectual property, which also provides rights to the Company to acquire an additional stake up to 10.74% of Bobble, through subscription/purchase to CCPS and Equity Shares at a pre-agreed consideration, upon meeting of milestones as defined in the global monetisation agreement.

OS Labs Pte. Ltd.

The Company through its wholly owned subsidiary, Affle International Pte. Ltd. (“Affle International”), had made a strategic, non-controlling investment and acquired 8% stake in OS Labs Pte. Ltd., Singapore for a consideration of USD 2.86 million (equivalent to Rs. 209.24 million) through

Compulsory Convertible Preference Shares (“CCPS”). On January 25, 2021, Affle International entered into a definitive share purchase agreement to sell its minority investment of 8% in OS Labs Pte. Ltd. to its promoter group company, Affle Global Pte. Ltd. (“AGPL”) for a consideration of USD 2.86 million (equivalent to Rs. 209.24 million) with an option to purchase the minority investment back from AGPL at a premium of 5% after 1 year or 10% after 2 years subject to any approvals that may be required.

SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES

As on March 31, 2021, the Company has the following subsidiary and step-down subsidiaries:

• Affle International Pte. Ltd., Singapore (Subsidiary with effect from April 01, 2018)

• PT. Affle Indonesia, Indonesia (Step down

Subsidiary with effect from July 01, 2018)

• Affle MEA FZ-LLC, Dubai (Step down Subsidiary with effect from April 01, 2019)

• Mediasmart Mobile S.L, Spain (Step down

Subsidiary with effect from January 22, 2020)

• Appnext Pte. Ltd., Singapore (Step down

Subsidiary with effect from June 8, 2020)

• Appnext Technologies Limited, Israel (Step

down Subsidiary with effect from July 19, 2020)

Mediasmart Mobile Limited, United Kingdom has ceased to be a step-down subsidiary as it was dissolved with effect March 23, 2021.

The Company does not has any Joint Venture and Associate Company, as on March 31, 2021.

A statement containing the salient features of the financial statements of the subsidiaries in the prescribed Form AOC-1 is annexed to this report as Annexure I.

CORPORATE GOVERNANCE

In terms of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements)

Regulations, 2015 (“Listing Regulations”), a separate section on “Corporate Governance” with a detailed Report on Corporate Governance forms part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report for the year under review as stipulated under Listing Regulations is presented separately as part of this Annual Report.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met 9 (nine) times during the year under review. The details of the meetings of the Board including that of its Committees are given in the Report on Corporate Governance section forming part of this Annual Report.

ESTABLISHMENT OF THE VIGIL MECHANISM

The Company has formulated an effective Whistle Blower Mechanism and a policy that lays down the process for raising concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy. The full text of the Policy is available under investor relations section on the website of the Company at https://www.affle.com.

No complaints were received through the said mechanism.

RISK MANAGEMENT POLICY

The Company has an effective risk management procedure, which is governed at the highest level by the Board of Directors, covering the process of identifying, assessing, mitigating, reporting and review of critical risks impacting the achievement of Company's objectives or threaten its existence.

To further strengthen & streamline the procedures about risk assessment and minimization procedures, the Board of Directors has a Risk Management Committee and has also formulated a Risk Management Policy. The full text of the Policy is available under investor relations section on the website of the Company at https://www.affle.com.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

The Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such

controls were tested and no reportable material weakness in the design or operation were observed.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of investments made by the Company in securities of other companies are set out in note 5(a) of the Standalone Financial Statements of the Company.

The Company has not given any loan. However, the Company issued Standby Letter of Credit (SBLC) amounting to Rs. 695.74 million (equivalent to USD 9.5 million) in favour of Axis Bank Limited, Singapore in lieu of term loan taken by Affle International Pte. Ltd, a wholly owned subsidiary of the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all contracts/ arrangements/transactions entered into by the Company with related parties under Section 188(1) of the Companies Act, 2013 were in the ordinary course of business and on arm's length basis. Thus, the transactions reported in Form AOC-2 annexed to this report as Annexure II are all at arm's length basis.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any deposits from the public falling within the preview of section 73 of the Act read with the Companies (Acceptance of Deposits) Rule 2014 during the year.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, following changes took place in the Board of Directors of the Company.

1. Re-appointment of Mr. Bijynath (DIN: 08160918), Ms. Sumit Mamak Chadha (DIN: 05207581) and Mr. Vivek Narayan Gour (DIN: 00254383), as Independent Director of the Company for a term of 5 consecutive years w.e.f. June 1, 2020.

2. Cessation of tenure of Mr. Naresh Chand Gupta (DIN: 00172311) and Mr. Sudhir Mohanlal Jatia (DIN: 00031969) as Independent Director w.e.f June 1, 2020.

3. Resignation of Mr. Charles Yong Jien Foong (DIN: 08160891) and Mr. Kapil Mohan Bhutani (DIN: 00554760) as Executive Director w.e.f June 1, 2020.

Retire by Rotation

As per the provisions of the Companies Act, 2013, Ms. Mei Theng Leong, Director retires by rotation at the ensuing Annual General Meeting and, being eligible, seeks reappointment. The Board recommends her reappointment.

Key Managerial Personnel

During the year under review, the following persons were designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

Mr. Anuj Khanna Sohum, Chairman, Managing Director & Chief Executive Officer

Mr. Kapil Mohan Bhutani, Chief Financial & Operations Officer

Ms. Parmita Choudhury, Company Secretary & Compliance Officer

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Committee has framed a policy for selection and appointment of Directors including determining qualifications and independence of a Director, Key Managerial Personnel (KMP), Senior Management Personnel and their remuneration as part of its charter and other matters provided under Section 178(3) of the Companies Act, 2013.

Pursuant to Section 134(3) of the Companies Act, 2013, the Nomination and Remuneration Policy of the Company which lays down the criteria for determining qualifications, competencies, positive attributes and independence for appointment of Directors and policies of the Company relating to remuneration of Directors, KMP and other employees is available under investor relations section on the Company's website at https://www. affle.com.

Further, the Company has also formulated a Board Diversity Policy to assure that the Board is fully diversified and comprises of an ideal combination of Executive and Non-Executive Directors, including Independent Directors, with diverse backgrounds.

DECLARATION FROM INDEPENDENT DIRECTORS

The Company received declaration from Independent Directors in accordance with Section 149(7) of the Companies Act, 2013 and Listing Regulations, that he/she meets the criteria of independence as laid out in sub-section (6) of Section 149 of the Companies Act, 2013 and Listing Regulations.

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board carried out an annual performance evaluation of its own performance, the Directors individually, as well as, the evaluation of the working of its Committees.

The Board evaluation was conducted through questionnaire designed with qualitative parameters and feedback based on ratings.

Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board Committees, review of performance of Executive Directors and strategic planning.

Evaluation of Committees was based on criteria such as adequate independence of each Committee, frequency of meetings and time allocated for discussions at meetings, functioning of Board Committees and effectiveness of its advice/recommendation to the Board.

Evaluation of Directors was based on criteria such as participation and contribution in Board and Committee meetings, experience and expertise to provide feedback and guidance to top management on business strategy, governance, risk and understanding of the organization's strategy.

The outcome of the Board Evaluation for the financial year 2020-21 was discussed by the Independent Directors at its meeting held on March 24, 2021 and by the Board at its meeting held on May 29, 2021.

INDEPENDENT DIRECTORS MEETING

A separate meeting of Independent Directors without the attendance of Executive Directors and members of Management was held on March 24, 2021.

ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013 read with read with Rule 12 of the Companies (Management and Administration) Rules, 2014, copy of the Annual Return of the Company (MGT-7) for financial year 2020-21 prepared in accordance with Section 92(1) of the Act has been placed on the website and is available at https://affle.com/ images/pdf/Q4/Annual%20Return%20for%20 financial%20year%20ended%20March%2031,%20 2021.pdf

STATUTORY AUDITORS

M/s. S.R. Batliboi & Associates LLP, Chartered Accountants (FRN:101049W/E300004), were appointed as the Statutory Auditors of the Company in the 24th Annual General Meeting of the Company for carrying out the audit of the financial statements of the Company from FY2019-20 to FY2023-24 subject to ratification by members at every Annual General Meeting.

The Companies (Amendment) Act, 2017, effective May 7, 2018 had done away with the requirement of annual ratification of appointment of Statutory Auditors, therefore in accordance with the amended Section 139 of the Companies Act, 2013, the appointment of M/s. S.R. Batliboi & Associates LLP, Chartered Accountants, as the Statutory Auditors of the Company, shall not require any annual ratification.

The notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark except the following Emphasis of Matter.

"We draw your attention to note 39.2 (i) of the consolidated financial statements and note 38.1 of the standalone financial statements, which indicate that business combination under common control has been accounted for using purchase method in accordance with previous GAAP resulting in recognition of goodwill amounting to Rs. 59.24 million as on March 31, 2021 as prescribed under court scheme instead of using pooling

of interest method as prescribed under Ind ,4S 103 Business Combinations as the approved court scheme will prevail over applicable accounting standard.

Our opinion is not qualified in respect of this matter."

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Kiran Sharma & Co., Company Secretaries as the Secretarial Auditors of the Company to undertake Secretarial Audit of the Company for FY2020-21. The Secretarial Audit Report is annexed to this report as Annexure III.

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

INTERNAL AUDITORS

Grant Thornton Bharat LLP performs the duties of Internal Auditors of the Company and their report is reviewed by the Audit Committee quarterly.

DETAILS ON CORPORATE SOCIAL RESPONSIBILITY (“CSR”) INITIATIVES

The Annual Report on CSR activities of the Company in prescribed format is annexed to this report as Annexure IV.

BUSINESS RESPONSIBILITY REPORT

Business Responsibility Report in accordance with the Listing Regulations, separately forms a part of this Annual Report.

INFORMATION RELATING TO ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a. Conservation of energy

The Company being in mobile advertising technology business, is relatively less resource intensive in terms of material inputs. However, as a responsible corporate entity, the Company endeavours to reduce its energy consumption by tracking the consumption of resources critically.

b. Technology absorption and innovation

The Company continues to innovate and enhance its technology capabilities for delivering a sustainable profitable growth to all its shareholders. During the year, the Company has worked towards building expertise in the following technology domains:

1. Data Science Developments: During the year, we have grown the data science team both organically and inorganically through hirings. Organically, we have encouraged trainings in Data Science and many employees within the team have taken up these learnings. Moreover, we have increased the use of tools that allow for data science to be used by product managers and staff for faster insights and behavioural analysis.

2. Appnext: We have integrated our Out-of-Box-Experience (OOBE) solution with Appnext platform.

3. Omnichannel Developments: Key

developments include a faster and better feed bus integration which can now ingest large volumes of catalogue / inventory and feed information that enables better intelligence and engagement with users. This coupled with our drive in data science with smart segments enables us to reach the right audience with the right notifications at the right time.

4. DevOps Developments: Our DevOps team continually improves our infrastructure costs by implementing the latest stable versions of systems that reduce certain costs in our infrastructure by up to 30-40%. Also, ensuring our systems are automated for fast delivery cycles and faster recovery times.

• Method and System for Creating Decentralized Repository of Fraud IPs and Publishers using Blockchain

• Method and system for click to install behavior-based detection of fraud

• Method and system for application installation and interaction during a podcast

c. Foreign exchange earnings and outgo

The foreign exchange earned in terms of actual inflows and the foreign exchange in terms of actual outflows, during FY2020-21 are as follows:

(In Rs.)

Earnings

489,346,014

Outgo

691,592,265

PARTICULARS OF EMPLOYEES

Details of the top ten employees in terms of remuneration drawn, as required under the provisions of Section 197 of the Act, read with Rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this report as Annexure V.

The ratio of remuneration of each director and key managerial personnel to the median of employees' remuneration, the percentage increase in remuneration, as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure VI.

There were no employees who were employed throughout the financial year or part thereof, by himself/ herself or along with his/ her spouse and dependent children, held more than two percent of the equity shares of the Company.

Further, there are no employees posted and working outside India and drawing salary in excess of the prescribed limits under the above Rules and accordingly, the statement included in this report does not contain the particulars of employees who are posted and working outside India.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(5)

of the Companies Act, 2013, the Board hereby

submit its responsibility Statement:

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

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2021 and of the profit of the Company for that year.

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

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

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

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

ACKNOWLEDGEMENTS

The Directors place on record their sincere thanks to the customers, employees, bankers, business associates, consultants, various Government Authorities and other stakeholders for their continued support extended to the Company during the year under review. Your Directors also acknowledges gratefully the shareholders for their support and confidence reposed on your Company.

For and on Behalf of The Board of Directors

Affle (India) Limited

Anuj Khanna Sohum Chairman, Managing Director & Chief Executive Officer

DIN: 01363666

Date: May 29, 2021 Place: Singapore