Dear Shareholders,

The Board of Directors (“Board”) is pleased to present the Seventeenth Annual Report and the Audited Financial Statement of the Company for the financial year ended 31 March 2018.

A. FINANCIAL RESULTS

The highlights of standalone and consolidated financial results of the Company for the financial year ended 31 March 2018 and 31 March 2017 are as under:

(INR in Lakhs)

B. REVIEW OF OPERATIONS

During the financial year ended 31 March 2018, the consolidated income of the Company was Rs 20,167 Lakhs as against Rs 32,117 Lakhs during the previous year ended 31 March 2017 (15 months period). At a standalone level, the total income of the Company for the financial year ended 31 March 2018 amounted to Rs 6,641 Lakhs compared to Rs. 10,976 Lakhs during the previous year ended 31 March 2017 (15 months period).

C. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis for the financial year ended 31 March 2018 as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) is presented in a separate section and forms an integral part of this Report.

D. DIVIDEND

The Board does not recommend a dividend per equity share.

E. TRANSFER TO RESERVES

During the financial year under review, the Company is not required to transfer any amount to the General Reserve.

F. SUBSIDIARY

In your company has 3 (three) direct subsidiaries and 2 (two) step down subsidiaries for the financial year ended 31 March 2018.

During the financial year ended 31 March 2018 under review, there have been no material changes in the business of the subsidiaries. In terms of Section 129(3) of the Companies Act, 2013 (‘Act’), the Company has prepared a statement containing the salient features of the Financial Statement of subsidiaries in the prescribed Form AOC-1 which is attached to the Financial Statements of the Company.

The Financial Statements of Subsidiary Companies are kept open for inspection by the shareholders at the Registered Office of your Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (‘AGM’) as required under Section 136 of the Act. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office. The financial statement including the consolidated financial statement and all other documents required to be attached with this report have been uploaded on to the website of your Company viz. http:// www.xchanging.com/investor-relations/xsl-content.

G. RELATED PARTY TRANSACTIONS

All Related Party Transactions were placed before the Audit Committee for approval as per the Related Party Transactions Policy of the Company as approved by the Board. The policy is also uploaded on to the website of the company and can be accessed through the link http://www.xchanging.com/ investor-relations/xsl-content.

All related party transactions that were entered into during the financial year were on an ‘arm’s length basis’ and were in the ordinary course of business.

Particulars of contracts or arrangements with related parties in the prescribed Form AOC-2, is provided as Annexure - I to this Boards’ Report.

H. AUDITORS

(i) Statutory Auditors and Auditors’ Report

The Shareholders of the Company in the 16th AGM of the Company had appointed M/s Deloitte Haskins & Sells LLP, Chartered Accountants, (Firm Registration No. 117366W/W-100018), (“Deloitte”) as the Statutory Auditors of the Company to hold office from the conclusion of the 16th AGM till the conclusion of the 20th AGM of the Company subject to ratification of their appointment at every AGM by the shareholders, if required pursuant to the provisions of the Companies Act, 2013. Central Government vide Companies (Amendment) Act, 2017 has amended the provisions of Section 139 of the Act and ratification of appointment of Statutory Auditors in every AGM is no longer required. Therefore, matter relating to ratification of appointment of Deloitte is not required to be placed before the members at the ensuing 17th Annual General Meeting.

The written consent from Deloitte to act as Statutory Auditor along with the certificate in compliance of the provisions of the Companies Act, 2013 has been received

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended 31 March 2018 pursuant to the provisions of the Act. The reports of Statutory Auditors forms part of the Annual Report. The reports are self-explanatory and does not contain any qualifications, reservations or adverse remarks.

(ii) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Ankush Agarwal (M/s. Ankush Agarwal & Associates, Company Secretaries), to undertake the Secretarial Audit of the Company. Accordingly, in terms of provisions of Section 204(1) of the Act, a Secretarial Audit Report given by the Secretarial Auditor of the Company in prescribed Form MR-3 is provided as Annexure -II.

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

I. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS AND SECURITIES

Details of loan, Guarantee and Investment covered under Section 186 of the Act are provided in the notes to financial statements.

J. PUBLIC DEPOSITS

Your Company has neither invited nor accepted any deposits from public within the meaning of Section 73 of the Act read with Companies (Acceptance of Deposits) Rules 2014 during the period under review.

K. EMPLOYEES

(i) Key Managerial Personnel (KMP)

The following have been designated as the Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

a) Mr. Srikrishna Madhavan- Managing Director and Chief Executive Officer (from 11.11.2016 to 13.10.2017)

b) Mr. Ramaswamy Sankaranarayanan Kavalapara - Managing Director (Interim) and Chief Executive Officer (Interim) (From 14.10.2017 to 30.03.2018)

c) Mr. Shrenik Kumar Champalal - Whole Time Director and Chief Executive Officer (Interim) (From 31.03.2018 onwards). He resigned as Chief Executive Officer (Interim) on 08.08.2018.

d) Mr. Suresh Akella- Chief Financial Officer (From 29.05.2017 onwards)

e) Mr. Mayank Jain - Company Secretary (From 26.02.2016 onwards)

(ii) Employees’ Stock Option Plan (ESOP)

ESOP scheme has been lapsed and consummated during the year ended 31 December 2015 and therefore, during the period under review no ESOP scheme exists in the Company.

(iii) Particulars of Employees and Related Disclosures

The statement of Disclosure of Remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (“Rules”), is appended as Annexure-III to the Report. The information as per Rule 5(2) of the Rules, forms part of this Report. However, as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of the Rules, the Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. The same are 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 interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company.

L. BOARD AND COMMITTEES

(i) Directors

The following Directors have been appointed or resigned during the year

Based on the recommendation of the Nomination and Remuneration Committee, appointment of Mr. Shrenik Kumar Champalal as Whole Time Director, Ms. Gidugu Kalpana Tatavarti as NonExecutive Director and Mr. Chandrasekhara Rao Boddoju as Managing Director are recommended for your approval in the ensuing Annual General Meeting. The Company has received requisite notices in writing from member(s) of the Company proposing the candidature of Directors of the Company.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of Listing Regulations.

Brief resume and other details relating to the directors, who are to be appointed/ re-appointed as stipulated under Regulation 36(3) of the Listing Regulations and Secretarial Standards issued by ICSI, are furnished in the Notice of Annual General Meeting forming part of the Annual Report.

(ii) Board Evaluation

Pursuant to the provisions of Section 134(3)(p) of the Act and Regulation 4 of Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, and the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(iii) Remuneration Policy

The Remuneration Policy as approved by the Board on the recommendation of the Nomination and Remuneration Committee is available at http://www.xchanging.com/investor-relations/xsl-content.

(iv) Board/Committee Composition and Meetings

A calendar of meetings is prepared and circulated in advance to the Directors. The details of composition of Board and Committee and their meetings held during the year are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

(v) Familiarization Programme and Separate Meeting of Independent Director’s

During the financial year ended 31 March 2018, one separate meeting of the Independent Directors of the Company was held on 13 September 2017 respectively without the attendance of Non-Independent Directors and the Management team.

During their meeting held on 13 September 2017, the Independent Directors discussed the matters specified in Schedule IV of the Act and Regulation 25 of the Listing Regulations.

The Nomination and Remuneration Committee of the Company at its meeting held on 27 February 2015 had approved a familiarization programme for Independent Directors of the Company. The Familiarization programme for Independent Directors is available at http:// www.xchanging.com/investor-relations/xsl-content.

(vi) Audit Committee

This Committee comprises the following Directors viz. Mr. Ashok Kumar Ramanathan (Chairman of the Committee), Mr. Srinivasa Raghavan Venkatavaradhan (till 7 September 2017), Mr. Henry D Souza, Ms. Rekha Murthy (from 29 May 2017 to 22 February 2018), Ms. Gopika Pant (till 29 May 2017), Ms. Gidugu Kalpana Tatavarti (from 27 March 2018 to 17 July 2018) and Mr. Shrenik Kumar Champalal (From 31 March 2018 onwards). The Company Secretary acts as the Secretary to the Committee.

All the recommendations of the Audit Committee were accepted by the Board.

(vii)Directors’ Responsibility Statement

Pursuant to section 134(5) of the Act, your Directors, based on the representations received from the Management and after due enquiry confirms that:

(a) in the preparation of the annual accounts for the financial year ended 31 March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors have selected 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 the Company as at 31 March 2018 and of the profit of the Company for the financial year ended on that date;

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

(d) the Directors have prepared the annual accounts on a going concern basis;

(e) the Directors have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were adequate and operating effectively during the financial year ended 31 March 2018; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively throughout the financial year ended 31 March 2018.

M. GOVERNANCE

(i) Corporate Governance

The Company is committed to uphold the highest standards of Corporate Governance and to adhere to the requirements set out by the Securities and Exchange Board of India. A detailed report on Corporate Governance along with the Certificate of Mr. Ankush Agarwal (M/s Ankush Agarwal & Associates, Company Secretaries), confirming compliance with conditions of Corporate Governance as stipulated under Schedule V of the Listing Regulations forms an integral part of this Report.

(ii) Vigil Mechanism / Whistle Blower Policy

The Company has established a whistle blower policy and also established a mechanism for directors and employees to report their concerns. The details of the same are explained in the Corporate Governance Report. The web-link to the Vigil Mechanism/Whistle Blower Policy is available at http://www.xchanging.com/investor-relations/xsl-content.

(iii) Risk Management

The Company has a Risk Management process which provides an integrated approach for managing the risks in various aspects of the business. The detailed framework is provided in the management discussion and analysis.

(iv) Internal Financial Controls

Your Company has in place adequate internal financial controls with reference to the financial statements.

(v) Disclosure under the Sexual Harassment of Women at the Work Place (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee (“ICC”) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this policy.

The following is the summary of the complaints received and disposed off during the financial year ended 31 March 2018:

a) No. of complaints received: Nil

b) No. of complaints disposed off: Nil

The Company has complied with provisions relating to the constitution of Internal constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

N. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Corporate Social Responsibility Committee had formulated and recommended a Corporate Social Responsibility Policy to the Board of the Company which was subsequently adopted and implemented by the Company. The web-link to the CSR Policy is available at http://www.xchanging.com/investor-relations/xsl-content.

The detailed Annual Report on CSR activities is annexed herewith and marked as Annexure - IV

O. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information as per Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 regarding Conservation of Energy, Research & Development, Technology Absorption and Foreign Exchange Earning and Outgo is annexed herewith as Annexure - V

P. OTHER DISCLOSURE

(i) Share Capital

There was no change in the paid- up share capital of the Company. As on 31 March 2018, the paid -up capital of the Company was Rs. 1,114,037,160. This comprises 111,403,716 equity shares of Rs. 10/- each fully paid-up.

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year.

(ii) Open Offer

The brief details of Mandatory Open Offer are given herein below:

Open offer for acquisition of up to 2,36,49,767 fully paid up equity shares of face value of INR 10 each (“Offer Shares”) representing 21.23% of the fully diluted voting share capital of Xchanging Solutions Limited (“Target Company”) from the public shareholders of the Target Company (“Public Shareholders”) by Xchanging Technology Services India Private Limited (“Acquirer”) together with Computer Sciences Corporation India Private Limited (“PAC 1”) and DXC Technology Company (“PAC 2”) (PAC 1 and PAC 2 are collectively referred to as “PAC”) as the persons acting in concert with the Acquirer pursuant to and in compliance with Regulations 3(1), 4, and 5(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and subsequent amendments thereto (“Takeover Regulations”) at an offer price of INR 55.22 per Offer Share (“Offer”) .

This Offer was being made in accordance with Regulations 3(1 ), 4, and 5(1 ) of the Takeover Regulations as a result of an indirect acquisition of 78.77% of the voting rights in and control by PAC 2 over the Target Company.

This Offer was a mandatory open offer being made by the Acquirer and PAC to the Public Shareholders pursuant to Regulations 3(1), 4, and 5(1) of the Takeover Regulations. The Offer was being made on account of the Merger Agreement dated 24 May 2016 (which was further amended on 2 November 2016 and 6 December 2016) entered into inter alia between Hewlett Packard Enterprise Company, Computer Sciences Corporation and PAC 2. The transactions contemplated under the Merger Agreement were completed on 1 April 2017.

The Acquirer and PAC had made the Public Announcement on 17 November 2017, Detailed Public Statement (“DPS”) published on 24 November 2017 and the draft letter of offer with respect to the Offer (“DLoF”) was filed with SEBI on 30 November 2017.

SEBI has issued observation letter bearing reference no. SEBI/HO/CFD/DCR1/OW/P/2018/ 13149/1 on 2 May 2018 (“SEBI Letter”). The revised schedule of activities relating to the Offer made in the DLoF, was issued in all the newspapers in which the DPS was published in terms of the SEBI Letter.

The tendering period commenced on 18 May 2018 & closed on 30 May 2018

During this period 13,398,299 shares have been tendered and acquirer along with PAC has paid the consideration on 11 June 2018 at Rs. 55.22 per share to the shareholders, who had tendered shares in the open offer;

The process of mandatory Open Offer had been completed and the Merchant Banker to the Offer has published the post Open Offer advertisement in newspapers.

(iii) Statutory Disclosures

None of the Directors of your Company are disqualified as per provision of Section 164(2) of the Act. The Directors of the Company have made necessary disclosures as required under various provisions of the Act and the Listing Regulations.

(iv) Extract of Annual Return

Pursuant to Sub-section 3(a) of Section 134 and Sub-section (3) of Section 92 of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return as on 31 March 2018 in Form MGT - 9 is attached herewith as Annexure -VI and forms a part of this Report.

(v) Compliance of Secretarial Standards

During the financial year under review, the Company has complied with applicable Secretarial Standards on Board and General Meetings specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Companies Act, 2013.

ACKNOWLEDGEMENTS:

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from the Company’s Bankers, Regulatory Bodies and Stakeholders including other business associates who have extended their valuable sustained support and encouragement during the year under review.

Your Directors also wish to place on record their deep sense of gratitude and appreciation for the commitment displayed by executives, officers and staff at all levels of the Company, resulting in the successful performance of the Company during the year under review. We look forward to your continued support in the future.

For and on behalf of the Board of Directors,

Ashok Kumar Chandrasekhara Rao

Ramanathan Boddoju

Chairman Managing Director &

(Independent Director) Chief Executive Officer

Place : Bangalore Place : Bangalore

Date : 9 August 2018 Date : 9 August 2018