BOARD’S REPORT

To the Members,

The Board of Directors (‘Board') is pleased to present the Fifteenth Annual Report of your Company, Kaya Limited, for the year ended March 31, 2018 (‘the year under review', ‘the year' or ‘FY2017-18').

In line with the requirements of the Companies Act, 2013, (the “Act”) this report covers the financial results and other developments during April 1, 2017 to March 31, 2018 in respect of Kaya Limited (‘Kaya') and Kaya Consolidated comprising Kaya, its Subsidiaries and Joint Venture. The consolidated entity has been referred to as ‘Kaya Group' or ‘Your Group' in this report.

FINANCIAL RESULTS - AN OVERVIEW

(Rs, in Lakhs)

Figures for Financial Year 2016-17 have been restated as per Ind AS and therefore may not be comparable with financials for Financial Year 2016-17 approved by the Directors and disclosed in the Financial Statement of previous year.

REVIEW OF OPERATIONS

During the year under review, Your Group posted consolidated total revenue of INR 40,993.45 Lakhs, a reduction of around 2.5% over the previous year. A loss of INR 1,928.75 Lakhs (4.71% of Total Revenue) was reported during the financial year under review, as compared to a loss of INR 2,980.06 Lakhs (7.09% of previous year's Total Revenue) for the previous financial year. There are no material changes and commitments affecting the financial position of your Company which have occurred between the end of the FY 2017-18 and the date of this report.

TRANSFER TO RESERVES

There is no amount proposed to be transferred to general reserve this year due to unavailability of profits.

DIVIDEND

The Directors have recommended no dividend for the year ended March 31, 2018.

INDIAN ACCOUNTING STANDARDS

The Ministry of Corporate Affairs (“MCA”), vide its notification dated February 16, 2015 issued Indian Accounting Standards ("IND AS”) applicable to certain classes of companies. In exercise of the powers conferred by Section 133 read with section 469 and Section 210A(1) of the Companies Act, 1956, the Central Government, in consultation with the National Advisory Committee on Accounting Standards, has replaced the existing Indian GAAP with IND AS. For Kaya, IND AS is applicable for the accounting period beginning April 1, 2017, with the transition date of April 1, 2016.

The following are the key areas which had an impact on account of IND AS transition:

- Customer Loyalty Programme (Deferred Revenue)

- Share based payments

- Deferred Tax Asset

- Defined employee benefit obligations

- Fair valuation of certain financial instruments

The detailed reconciliation of the transition from IGAAP to IND AS has been provided in Note 36 in the notes to accounts of Standalone Financial Statement and Note 38 in the notes to accounts of Consolidated Financial Statement.

SUBSIDIARIES/ JOINT VENTURE

Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5, 8 of Companies (Accounts) Rules, 2014 and other applicable provisions, if any, a statement covering the salient features of the financial statements of our subsidiaries, joint venture in the prescribed format AOC-1 is annexed to this report as Annexure I.

The financial statement of the subsidiary companies and related information are uploaded on the website of your Company and can be accessed using the link http://www.kaya.in/investors/#kaya_investors.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the Financial Statements forming part of this Annual Report.

PUBLIC DEPOSITS

The Company did not accept any public deposits during the year 2017-18.

RELATED PARTY TRANSACTIONS

All the transactions with the related parties entered into during the financial year 2017-18 were at arm's length and in the ordinary course of business and in accordance with the provisions of the Act and the Rules made there under. There were no transactions which were material, considering the materiality thresholds prescribed under the Act and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). Accordingly, no disclosure is made in respect of the Related Party Transactions in the prescribed Form AOC-2 in terms of Section 134 of the Act.

The Policy on Related Party Transactions as approved by the Board is uploaded on the website of the Company at http:// www.kaya.in/investors/#kaya_investors.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis forming a part of this Annual Report, inter alia, covers the following:

- Industry structure and development

- Opportunities and Threats

- Outlook

- Risks and Concerns

- Internal control systems and their adequacy

- Discussion on financial performance with respect to operational performance

- Material Developments in Human Resources/ Industrial Relations front, including number of people employed.

DIRECTORS & KEY MANAGERIAL PERSONNEL

As per Section 152 and other applicable provisions of the Act, Mr. Rajendra Mariwala being liable to retire by rotation at the ensuing Annual General Meeting of the Company has offered himself for re-appointment.

The Company has received declarations from the Independent Directors affirming that they meet the criteria of independence as provided in Section 149(6) of the Act and declaration under Regulation 26 of the Listing Regulations. Further, all the members of the Board of Directors and senior management personnel have confirmed compliance with the code of conduct of board of directors and senior management.

It is also proposed to re-appoint Ms. Ameera Shah, Independent Director, whose term of office expires on March 31, 2019, for a further period of 5 (Five) years, to hold office up to March 31, 2024.

During the year, Mr. Dharmendar Jain resigned as the Chief Financial Officer of the Company, w.e.f. April 21, 2017 and Mr. Naveen Duggal was appointed as the Chief Financial Officer w.e.f. August 2, 2017.

Further, during the year, Ms. Almas Badar resigned as the Company Secretary of the Company w.e.f. November 10, 2017 and Ms. Nitika Dalmia was appointed as the Company Secretary & Compliance Officer w.e.f. December 5, 2017.

MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES

The Board of Directors of the Company met 6 times during the year to deliberate on various matters. The details of the meetings of the Board and its Committees held during the year are stated in the Corporate Governance Report forming part of this Annual Report.

PERFORMANCE EVALUATION

In accordance with the relevant provisions of the Act, Rules made there under and the Regulation 17(10) of the Listing Regulations and the Guidance Note on Board Evaluation issued by SEBI vide its circular dated January 5, 2017, the evaluation of the performance of the individual directors, Chairman of the Board, the Board as a whole and its Committees was carried out. The details of the same are explained in the Corporate Governance Report.

CORPORATE GOVERNANCE

A separate section on corporate governance practices followed by the Company together with a certificate from the Statutory Auditors confirming compliance thereto is annexed to this Annual Report.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosure on the details of remuneration to Directors and other employees pursuant to Section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure II.

Details of employee remuneration as required under provisions of Section 197 of the Companies Act, 2013 and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be made available on the website of the Company 21 days prior to the date of meeting of forthcoming Annual General Meeting. This information is also available for inspection by the members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member desirous of obtaining a copy of the said annexure may write to the Company Secretary of your Company.

POLICY ON NOMINATION AND REMUNERATION

In terms of the applicable provisions of the Act, read with the rules made there under and the Listing Regulations, your Board has formulated a policy in relation to appointment, removal and remuneration of Directors, and Key Managerial Personnel. The Nomination & Remuneration Policy can be accessed using the link http://www.kaya.in/investors/#kaya_ investors.

EMPLOYEES’ STOCK OPTION SCHEME

The Company had formulated and implemented Kaya Limited Employees Stock Option Scheme, 2014 and Kaya Limited Employees Stock Option Scheme, 2014 - KME for grant of options to employees of the Company and its subsidiaries respectively. Vesting Date for the options granted under Kaya Limited Employees Stock Option Scheme, 2014 and Kaya Limited Employees Stock Option Scheme, 2014 - KME was March 31, 2016 and March 31, 2017 respectively. In view of the implementation of the Kaya Employee Stock Options Plan, 2016, as explained below, no further grant of stock options is envisaged in these Schemes.

KAYA EMPLOYEE STOCK OPTION PLAN, 2016

The Board of Directors of the Company through a circular resolution passed on June 28, 2016 had approved the introduction and implementation of Kaya Employee Stock Option Plan, 2016 ("Kaya ESOP 2016” or "the Plan”) for employees of the Company and its subsidiaries and the same was approved by the shareholders at the Annual General Meeting held on August 4, 2016. Under the plan, Stock Options shall be granted to eligible employees by the Nomination and Remuneration Committee through various Schemes to be notified under the Plan. The total number of options granted in aggregate under the Plan shall not exceed 2% of the paid-up equity capital of the Company as on March 31,2016 and the grant of options to any single employee shall not exceed 0.5% of the paid-up equity share capital of the Company.

- KAYA ESOP 2016 - SCHEME I

Nomination and Remuneration Committee of the Board of Directors through a circular resolution passed on August 23, 2016 had approved the Kaya ESOP 2016 - Scheme I. Total of 2,53,893 stock options were granted under the said Scheme to the eligible employees of the Company and its Subsidiaries.

- KAYA ESOP 2016 - SCHEME II

The Nomination and Remuneration Committee of the Board of Directors through a circular resolution passed on June 28, 2017 had approved the Kaya ESOP 2016 - Scheme II. Total of 27,400 stock options were granted under this Scheme to the eligible employees of the Company and its Subsidiaries. However, due to resignation of the said eligible employees during 2017-18, the options granted under this Scheme have lapsed. The vesting date for the options granted was March 31, 2019.

- KAYA ESOP 2016 - SCHEME III

The Nomination and Remuneration Committee of the Board of Directors through a circular resolution passed on June 28, 2017 had approved the Kaya ESOP 2016 - Scheme III. Total of 14,700 stock options were granted under this Scheme to the eligible employees of the Company and its Subsidiaries. The vesting date for the options granted under this Scheme is March 31, 2020.

Additional information on ESOS in terms of section 62(1)(b) of the Companies Act, 2013 read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and applicable provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014 is annexed to this Report as Annexure III.

CORPORATE SOCIAL RESPONSIBILTY (“CSR”)

The statutory provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company as on March 31, 2018.

However, as a good Corporate Governance initiative, the Board of Directors had constituted the CSR Committee. Once the said statutory provisions are applicable to the Company, the CSR Committee shall recommend to the Board of Directors, the CSR Policy and amount of expenditure to be incurred for the purpose. The Composition of the Committee is laid down in the Corporate Governance Report forming part of this Annual Report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made there under, your Company has constituted an Internal Committee and during the year under review, the Committee received no complaints on sexual harassment.

AUDITORS

Statutory Auditors

The shareholders of the Company at their 14th Annual General Meeting held on August 2, 2017 had appointed M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as the Statutory Auditors of the Company to hold office from the conclusion of the 14th Annual General Meeting till the conclusion of 19th Annual General Meeting of the Company, subject to ratification by the shareholders at Annual General Meeting(s), as applicable.

Consequently, the Board of Directors recommends the ratification of appointment of M/s. B S R & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting till the conclusion of 16th Annual General Meeting of the Company.

Internal Auditors

M/s. Ernst & Young LLP, a Chartered Accountant Firm, has been associated with your Company as its internal auditor partnering your Company in the area of risk management and internal control systems.

Secretarial Auditors

Pursuant to Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your company appointed Amita Desai & Co., Practicing Company Secretaries, Mumbai, to conduct the Secretarial Audit of your Company. The Secretarial Audit Report for FY2017-18 is enclosed as Annexure IV to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

AUDITOR’S REPORT

The Auditor's Report does not contain any qualification, reservation or adverse remark or disclaimer by M/s. B S R & Co. LLP, Chartered Accountants.

COMPOSITION OF THE AUDIT AND RISK MANAGEMENT COMMITTEE

The composition and the detailed terms of reference of the Committee are stated in the Corporate Governance Report forming part of this Annual Report.

RISK MANAGEMENT

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage.

INTERNAL FINANCIAL CONTROLS

Kaya has developed IFC framework on the basis of review of Policies, procedures and processes. Controls for each of the processes were documented. Design and operating effectiveness of controls was tested by management and later audited by the statutory auditors. Your statutory auditors have given a clean report after checking effectiveness of controls.

The management believes that strengthening IFC is a continuous process and therefore it will continue its efforts to make the controls smarter with focus on preventive and automated controls as opposed to mitigating and manual controls.

VIGIL MECHANISM

We have embodied the mechanism in the Code of Conduct of the Company for employees to report concerns about unethical behavior, actual or suspected fraud or violation of our Code of Conduct. This mechanism also provides for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases and no personnel have been denied access to the Audit Committee. The Board and its Audit Committee are informed periodically on the cases reported, if any and the status of resolution of such cases.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS

There were no significant/ material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Conservation of Energy

Your company emphasizes on conservation of energy as its responsibility towards the environment and society at large by ensuring that its products, services and operations are safe for consumers, employees and the environment. Your Company focuses on technology, processes and improvements that matter for environment which includes reduction in power consumption, optimal water usage and eliminating excess use of paper.

Technology Absorption

The Company strives to adopt technology that provides the best possible outcome to its customers. The Company constantly reviews technological innovations/advancements applicable to its business.

Foreign Exchange Earnings and Outgo

The details of Foreign Exchange Earnings and Outgo for the year under review are as follows:

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of the Section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, the extract of Annual Return of the Company for the financial year ended March 31, 2018 is given as Annexure V to this report.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company has complied with the Secretarial Standards related to the Board Meetings and General Meeting issued by the Institute of Company Secretaries of India (ICSI).

DIRECTOR’S RESPONSIBILITY STATEMENT

To the best of their knowledge and information and based on the information and explanations provided to them by the Company, your Directors make the following statement in terms of Section 134(3)(c) of the Act

- that in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed and there are no material departures from the same;

- that the Directors 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 your Company as at March 31, 2018 and of the loss of your Company for the said year;

- that proper and sufficient care has been taken 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;

- that the annual accounts have been prepared on a ‘going concern' basis;

- that proper internal financial controls to be followed by the Company were laid down and such internal financial controls are adequate and were operating effectively;

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

ACKNOWLEDGEMENT

The Board takes this opportunity to thank all its employees for their dedicated service and firm commitment to the goals of the Company. The Board also wishes to place on record its sincere appreciation for the wholehearted support received from shareholders, bankers, all other business associates, and customers. We look forward to continued support of all these partners in progress.

On behalf of the Board of Directors

Place : Mumbai Harsh Mariwala

Date : May 4, 2018 Chairman & Managing Director