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Directors Report of IIFL Finance Ltd.

Mar 31, 2023

Your Directors present the Twenty Eighth Annual Report of IIFL Finance Limited ("your Company/the Company") together with the Audited Financial Statements for the Financial Year ended March 31,2023. The Company is registered with the Reserve Bank of India ("RBI") as a Systemically Important Non-Banking Financial Company ("NBFC") not taking public deposits (NBFC-ND-SI).

1. FINANCIAL RESULTS

A summary of the financial performance of your Company and its subsidiaries for the Financial Year ended March 31, 2023, is as under:

('' in Crores)
Name of the Company			Revenue		Profit After Tax
IIFL Finance Limited				4,058.18		805.49
IIFL Home Finance Limited ("HFC") (Consolidated)				2,581.90		768.12
IIFL Samasta Finance Limited (formerly known as Samasta Microfinance Limited) ("Samasta")				1,746.23		128.18
IIFL Open Fintech Private Limited ("IIFL Open")			0.58		3.68
A summary of the consolidated and standalone financial performance of your Company for the Financial Year ended March 31,2023, is as under:
						('' in Crores)
Particulars	Consolidated			Standalone
	2022-23	2021-22		2022-23		2021-22
Gross total income	8,447.11	7,023.61		4,088.69		4,106.60
Profit before Finance Cost, depreciation, share of loss of Joint Venture, exceptional items and taxation	5,486.94	4,648.68		2,623.45		2,689.41
Finance Cost	3,221.83	2,991.00		1,455.96		1,615.61
Depreciation	152.59		121.70	124.77		106.43
Profit before share of loss of Joint Venture, exceptional items and tax	2,112.52	1,535.98		1,042.72		967.37
Share of loss from Joint Venture	-	-		-		-
Profit before exceptional items and tax	2,112.52	1,535.98		1,042.72		967.37
Exceptional items	-				-	-
Profit before tax	2,112.52	1,535.98		1,042.72		967.37
Taxation
- Current tax	362.70	327.78		117.53		171.28
- Deferred tax	144.68	19.38		119.70		51.18
- Short or excess provision for income tax	(2.41)	0.57		-		(0.57)
Net profit for the year	1,607.55	1,188.25		805.49		745.48
Other Comprehensive Income	32.19	9.21		20.82		(9.85)
Total Comprehensive Income	-	-		826.31		735.63
Total Comprehensive Income before Noncontrolling interest	1,639.74	1,197.46		-		-
Attributable to:
Owners of the Company	1,534.01	1,197.11		-		-
Non-controlling interests	105.73	0.35		-		-

('' in Crores)
Particulars	Consolidated			Standalone
		2021-22		2022-23 2021-22
Less: Appropriations				(152.09) (161.11)
Dividend	(173.63)	(132.82)				(132.82)
Transfer to/ from Other Reserves	(344.61)	(312.66)				(195.23)
Change in Minority	(288.59)	0.36		-		-
On account of Merger	-	-		-		-
Add: Balance brought forward from the previous year	2,299.28	1,547.29		866.20		458.62
Balance to be carried forward	3,026.46	2,299.28		1,379.31		866.20
Note: Previous periods figures have been regrouped/rearranged wherever necessary. Transfer to Reserve The Company during the year under review has transferred below mentioned amount to General Reserve out of the Retained Earnings. Further, in accordance with Section 45 IC of the RBI Act, 1934, the Company has also transferred below mentioned amount to Special Reserve: ('' in Crores)
Particulars			Consolidated		Standalone
			2022-23		2022-23
Special Reserve during the year (Pursuant to Section 45 IC of the RBI Act, 1934)			186.51		161.11
Special Reserve during the year (Pursuant to Section 29C of National Housing Bank Act, 1987)			65.71		-
General Reserve during the year			28.27		1.09

2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF AFFAIRS OF YOUR COMPANY AND OUTLOOK

Details of Business, operations, state of affairs and outlook of the Company is provided in the Management Discussion and Analysis Report. Refer to pages 176192 of the Report.

3. MACROECONOMIC OVERVIEW

Details on Macroeconomic overview of the Company is provided in the Management Discussion and Analysis Report. Refer to pages 176-192 of the Report.

4. DIVIDEND

During the year under review, the Board of Directors of the Company declared and paid an interim dividend of '' 4/- per equity share (200%) (i.e. 2 times of the Face Value of '' 2/- per equity share) in accordance with the Dividend Distribution Policy of the Company. This led to an outgo of '' 152.09/- Crores (including tax deducted at source). Your Directors recommend that the said interim dividend be considered as final.

In terms of the provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board of Directors of the Company has adopted a Dividend

Distribution Policy which is annexed as "Annexure - I" to this report and is available on the website of the Company i.e. https://storage.googleapis.com/iifl-finance-storage/files/2022-07/Dividend_distribution_ policy_27072022.pdf

5. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")

I n accordance with the applicable provisions of the Companies Act, 2013 ("the Act") read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividend on shares/interest and principal on Non-Convertible Debentures ("NCDs") are required to be transferred by the Company to the IEPF, if such remains unpaid or unclaimed for a period of seven (7) years after giving an opportunity to the Members. Further, according to the IEPF Rules, the shares on which dividend has not been claimed by the Members for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority.

Accordingly, the Company issued the reminder letters to such Members to claim the dividend and also published a notice to such effect in the leading newspapers in English and Regional Language having wide circulation and accordingly informed them that in the event of failure to claim said dividend, the unpaid/unclaimed dividend along with shares pertaining to unpaid/ unclaimed dividend would be transferred to IEPF.

Further, the details relating to amount of dividend on shares/interest and principal on NCDs transferred to the IEPF during FY 2022-23 and shares on which dividend remained unclaimed for seven (7) consecutive years, are provided in the General Shareholders Information section of Corporate Governance Report forming part of this Annual Report.

6. KEY INITIATIVES/DEVELOPMENTSPublic Issue of Non-Convertible Debentures

During the year under review, the Company raised through public issue of secured, redeemable, NCDs, an amount aggregating to '' 472.11 Crores. These NCDs are listed and traded on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE").

Issuance of Non-Convertible Debentures on a Private Placement basis

During the year under review, the Company raised through Private Placement of Redeemable NCDs an amount aggregating to '' 1,001 Crores. The said NCDs are listed and traded on NSE and/or BSE.

Additionally, during the year under review, HFC and Samasta raised '' 280 Crores and '' 420 Crores through Private Placement of Redeemable NCDs respectively. The said NCDs issued by HFC were listed and traded on NSE while NCDs issued by Samasta were listed and traded on BSE.

National Housing Bank Refinance

During the year under review, National Housing Bank ("NHB") sanctioned '' 1,125 Crores refinance facility to HFC. HFC availed '' 1,061.16 Crores of refinance facility from NHB under various refinance schemes during the year ended March 31,2023.

Additionally, during the year under review, National Bank for Agriculture and Rural Development ("NABARD") refinanced '' 500 Crores under refinance facility to the Company and Small Industries Development Bank of India ("SIDBI"), NABARD and Micro Units Developments & Refinance Agency Limited ("MUDRA") refinanced '' 400 Crores, '' 200 Crores and '' 150 Crores respectively to Samasta.

Funds raised by way of other Borrowings

During the year under review, the Company raised '' 3,517.28 Crores through term loan from various banks. Additionally, HFC and Samasta raised '' 3,110 Crores and '' 3,974.38 Crores, respectively, through term loans from various banks. .

Additional investment in IIFL Samasta Finance Limited

During the year under review, the Company purchased equity shares of Samasta from HFC in July, 2022 which amounts to '' 259.08 Crores and also invested in the right issue of equity shares of Samasta for an amount of '' 199.99 Crores in February, 2023. After the aforesaid acquisition, the holding of the Company in Samasta is 99.51% as on March 31,2023.

Investment in IIFL Home Finance Limited by the subsidiary of Abu Dhabi Investment Authority

During the year under review, a wholly owned subsidiary of the Abu Dhabi Investment Authority ("ADIA") invested '' 2,200 Crores for a 20% stake in HFC, boosting the net worth of HFC by more than 80%. This will help HFC to consolidate its competitive position in the affordable housing finance market in India, which has tremendous long term growth potential.

International credit rating upgrade by Moody''s

On April 06, 2023, Moodyâs upgraded the Companyâs credit rating from B2 to B1, retaining ''stableâ outlook on the Company which also includes the Medium Term Notes ("MTNs"). Moodyâs said the upgrade has been driven by factors such as higher share of off-balance sheet loans; further fortifying its asset-light business model and improvement in the Companyâs key metrics of funding, profitability.

Fully repaid maiden dollar bonds

The Company fully repaid its maiden dollar bonds in April 2023 along with interest. The Company which is one of Indiaâs largest retail-focused NBFCs had raised US$ 400 Million through a MTN program in February 2020. This is a demonstration of strong treasury management capabilities and financial strength of the Company. This has also established a strong track record for the Company in international bond market.

Secured US$ 100 Million in long-term funding jointly from Export Development Canada and Deutsche Bank

During the year under review, the Company secured US$ 100 Million in long-term funding, jointly, from Export Development Canada ("EDC") and Deutsche Bank. The Company secured US$ 50 Million from EDC and US$ 50 Million from Deutsche Bank, respectively. The deal was structured under the aegis of Deutsche Bank as mandated lead arranger, book runner and cofinancier. This would also be the Companyâs second loan from EDC. It had previously secured funding of US$ 100 Million from EDC in 2019.

IIFL Open Fintech Private Limited

During the year under review, the Company has incorporated a new subsidiary IIFL Open Fintech Private Limited where the Company holds 51.02% stake and remaining is held by Open Financial Technologies Private Limited ("Open"), which is the 100^th unicorn of India and the largest SMB (Small and Mid-sized Business) Neo-bank. Open has integrated with 17 large banks and has an existing customer base of more than 2 Million merchants. The Companyâs existing lending book and infrastructure will be used by Open to offer innovative lending solutions to these merchants on their platform. This subsidiary will also give us access to userâs business transactions leading to better insights for underwriting decisions and it will lead to growth in the Companyâs lending book by offering credit solutions to Openâs existing 2 Million merchant base.

Signs top Pan-Indian Actress Tamannaah Bhatia as Brand Ambassador

The Company has signed top Indian actress Ms. Tamannaah Bhatia as its brand ambassador as it aims to bolster its Pan-India brand presence. This will help in our endeavor to become the loans destination of choice fulfilling dreams and goals of Millions of Indians who donât have easy access to credit.

Awards and Recognitions

During the year under review, following awards and accolades were conferred by reputable organizations:

â¢ The Company won ''Customer Service Excellence Awardâ at Asia Awards for Excellence in BFSI.

â¢ The Company won ''Best Lending Tech of the Yearâ at Asia Awards for Excellence in BFSI.

â¢ The Company won ''The Great Indian BFSI Brand of the Yearâ.

â¢ The Company received ''Brand of the Yearâ award from India Today and Team Marksmen.

â¢ The Company received the ''Most Innovative Fintech Productâ award for ''WhatsApp Loan by IIFL Financeâ at National Award for Leadership & Excellence in BFSI.

â¢ The Company received ''Best Lending Tech of the Yearâ award at National Award for Leadership & Excellence in BFSI.

â¢ The Company received ''Quick Loan Approvalâ award for IIFL Instant Loan at National Award for Leadership & Excellence in BFSI.

â¢ IIFL Foundationâs ''Gulabi Gaonâ project received award for being the ''Best Poverty Alleviation Projectâ at the Responsible Business Awards.

â¢ IIFL Foundationâs ''Agricultural Droneâ project received the ''Best Community Program Leadership Awardâ at the Responsible Business Awards.

â¢ IIFL Foundationâs ''Urban Forestâ project received the ''Best Smart City Initiative Awardâ at the Responsible Business Awards.

â¢ The Company received ''Best Radio Campaignâ award for ''Gold Loan Mela Campaignâ at World Marketing Congress.

â¢ The Company received ''Best Social Media Campaignâ award for ''Anmol Kisseâ campaign at World Marketing Congress.

â¢ The Company received ''Most Innovative Fintech Productâ award at National Fintech Leadership and Excellence Awards.

â¢ IIFL Foundation received ''Best Innovative CSR Projectâ award for vaccine delivery on drone at the 4^th edition of CSR Summit & Awards.

â¢ The Company received ''Best Sustainability Initiativeâ award at World BFSI Congress & Awards.

â¢ The Company received ''Best Lending Techâ award at World BFSI Congress & Awards.

â¢ The Company received the ''Most Innovative Fintech Productâ award for Business Loans at National Fintech Leadership Award.

â¢ The Company received ''Marketing Campaign

of the Yearâ for ''Sapna Aapka Loan Humaara Campaignâ at Global Brand Excellence Awards.

â¢ IIFL Foundation received ''Outstanding

contribution to the cause of educationâ award at Global CSR Excellence Awards.

â¢ IIFL Foundationâs ''Urban Forestryâ project

received ''The Best Environment Friendly Projectâ award at Global CSR Excellence Awards.

â¢ IIFL Foundationâs ''Sakhiyon Ki Baadiâ project

received ''Support and improvement in quality of educationâ award at Global CSR Excellence Awards.

7. CORPORATE SOCIAL RESPONSIBILITY ("CSR") INITIATIVES

The CSR Committee of the Board has formulated and recommended to the Board a CSR Policy indicating the CSR activities which can be undertaken by the Company. The Board approved the CSR Policy which is available on the website of the Company, i.e. https://storage.googleapis.com/iifl-finance-storage/ files/2023-07/CSR%20policy_IIFL%20Finance.pdf IIFL group has set-up India Infoline Foundation ("IIFL Foundation") a Section 8 Company incorporated under the Act which acts as the principal arm to undertake CSR initiatives on behalf of the Company and its subsidiaries. IIFL Foundation through its CSR initiatives addresses 4 thematic areas - Health, Education, Livelihood & Poverty Alleviation, collectively - HELP. As per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, IIFL Foundation has registered itself with the Central Government by filing the e-Form CSR-1 with the Registrar of Companies.

The Foundation has identified focus areas for CSR

initiatives which includes:

â¢ Initiative to build Foundational literacy among 16,800 females in Rajasthan.

â¢ Development of ''Emergency Servicesâ at Government hospital at Rajasthan.

â¢ Infrastructure development and academic support to Maa Bari Centres at Rajasthan.

â¢ Development of Infrastructure at Government Schools at Rajasthan.

â¢ Livelihood programme to support and promote women entrepreneurs (Rajasthan).

â¢ Donation of AgriDrone to a University to promote research and development in agriculture at Rajasthan.

â¢ Development of Urban Forest and Botanical garden at Maharashtra.

â¢ Support for a programme on education to improve the academic outcome of 1.03 lakh students and 3,052 teachers of 1,526 government schools, Rajasthan.

â¢ Community radio program to improve learning and mental well-being outcomes for young children and caregivers at Rajasthan.

â¢ Annual Medical Camp at Uttar Pradesh and Maharashtra.

â¢ Donation of medical equipment for Ophthalmic surgery ward (Rural), Rajasthan.

â¢ Digital screen for learning at government schools at Rajasthan

â¢ Relief activity for victims of flood in Maharashtra

â¢ Training on Hospitality and Chef Trade at Kupwara, an Aspirational District in Kashmir.

â¢ Donation of medicines (veterinary) for treatment of the Lumpy Cow Disease

â¢ Capacity building of 50 Non-Governmental Organizations ("NGOs"), Maharashtra

During FY 2022-23, the Company deployed 2% of its average net profit of the preceding three Financial Years (computed as per the relevant provisions of the Act) on CSR projects, utilizing the required amount on various social development activities, details thereof are mentioned in the CSR Annual Report, attached as "Annexure - II" to this Report.

Further, during the year under review impact assessment was not applicable to the Company. However, the same has been conducted by 11FL Foundation at its discretion through an independent agency.

8. SHARE CAPITAL

During the year under review, the total paid up equity share capital of the Company increased from '' 75,91,97,422/- to '' 76,08,60,778/- pursuant to allotment of 8,31,678 equity shares of '' 2/- each under Employee Stock Option Scheme(s) of the Company to the eligible employees and the said equity shares rank Pari Passu with the existing equity shares.

9. SECURITIZATION/ASSIGNMENT OF LOAN PORTFOLIO

During the year under review, your Company (consolidated) as an originator has undertaken Direct Assignment transactions of total book value of loan assets amounting to '' 14,418.44 Crore.

10. FINANCIAL LIQUIDITY

Consolidated cash and cash equivalent as on March 31, 2023 stood at '' 3,630.67 Crores vis-a-vis '' 6,211.64Crores in the previous year. The Companyâs working capital management is robust and involves a well-organized process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.

11. 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 accountants, engineers, Fraud Risk and Information Technology 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 Controls over Financial Reporting

The Companyâs internal financial controls are commensurate with the scale and complexity of its operations. The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. The Company has put in place robust policies and procedures, which inter alia, ensure integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.

12. EMPLOYEES STOCK OPTION SCHEMES ("ESOS")

The Company has in force the following Schemes:

(a) I IFL Finance Employee Stock Option Plan 2007 ("ESOS Scheme 2007")

(b) I IFL Finance Employee Stock Option Plan 2008 ("ESOS Scheme 2008")

Further, no stock options were granted to the employees during the year under the ESOS Scheme

2007 and ESOS Scheme 2020.

The Company granted 2,00,000 Stock Options to eligible employees during the year under ESOS Scheme 2008.

During the year under review, 2,67,233 stock options granted under ESOS Scheme 2008 got lapsed and the same have been added back to the pool, which can be used for further grant and 1,77,836 stock options granted under ESOS Scheme 2020 got lapsed and the same are not available for further grant.

The aggregate number of stock options outstanding as on March 31,2023 is 9,36,947 under ESOS Scheme

2008 and 27,05,444 under ESOS Scheme 2020.

The ESOS Scheme 2008 of the Company was amended by the Board of Directors of the Company at its meeting held on April 26, 2023, to align the same with the amendments made under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEBSE Regulations"). Accordingly, approval of the Members to amend ESOS Scheme 2008 in terms of the SBEBSE Regulations has been sought in the Notice convening the 28^th Annual General Meeting ("AGM") of the Company.

A certificate from the 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.

The relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the SBEBSE Regulations are uploaded on the website of the Company i.e. www.iifl.com and the same would be available for inspection by Members through electronic means. Members can request the same by sending an email to [email protected] till the AGM.

The relevant disclosures in terms of Ind AS 102, relating to share based payment, forms part of note 39 of the Standalone Financial Statements and Consolidated Financial Statements of the Company.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the note no. 8, 9 and 38 of the Standalone Financial Statements.

14. SUBSIDIARY COMPANIES

As on March 31, 2023, the Company has three (3) subsidiaries, one (1) step down subsidiary. The Company does not have any Associate(s)/Joint Venture(s):

Sr. No.	Name of the Subsidiaries
1	IIFL Home Finance Limited
2	IIFL Samasta Finance Limited (formerly known
	as Samasta Microfinance Limited)
3	IIFL Open Fintech Private Limited
4	IIHFL Sales Limited

During the year under review, IIFL Open was incorporated as a wholly owned subsidiary of the Company w.e.f. May 17, 2022. Further, on June 10, 2022, IIFL Open issued and allotted 1,18,38,710 equity shares of face value of '' 10/- each, at a premium of '' 83/- per share, at an Issue Price of '' 93/- per share, aggregating to '' 110.10 Crores on a preferential basis to the Company and Open Financial Technologies Private Limited. Accordingly, stake of the Company diluted to 51.02% and IIFL Open became a subsidiary of the Company.

Pursuant to the Act read with applicable Rules framed thereunder, the Listing Regulations and applicable Ind AS, the Board of Directors of the Company at their Meeting held on April 26, 2023, approved the Audited Standalone Financial Statements of the Company for the financial year ended March 31, 2023 and the Audited Consolidated Financial Statements of the Company and its subsidiaries for the financial year ended March 31,2023. In accordance with Section 129 of the Act, the said Audited Financial Statements form part of the Annual Report. The Companyâs Financial Statements including the accounts of its subsidiaries which forms part of this Annual Report is prepared in accordance with the Act and Ind AS 110.

A report on the performance and financial position of each of the subsidiaries of the Company, as per the Act is provided in the prescribed Form AOC-1 as Annexure A of the Consolidated Financial Statements and hence

not repeated here for the sake of brevity.

The Audited Financial Statements of the subsidiaries of the Company for the financial year ended March 31,2023 are available on the website of the Company i.e. www.iifl.com. The Members may download the aforesaid documents from the Companyâs website or may write to the Company for obtaining a copy of the same. Further, the aforesaid documents shall also be available for inspection by the Members at the registered office of the Company, during business hours on working days and through electronic mode. Members can also request the same by sending an email to [email protected] till the AGM.

Pursuant to Regulation 16 of the Listing Regulations, HFC and Samasta were the Material Subsidiaries of the Company for FY 2022-23 and shall be the Material Subsidiaries for FY 2023-24. In line with the provisions of Regulation 24(1) of the Listing Regulations, Mr. Arun Kumar Purwar, Independent Director on the Board of the Company is also an Independent Director of HFC. The Policy on determining the material subsidiary is available on the website of the Company, i.e. https:// storage.googleapis.com/iifl-finance-storage/ files/2022-07/Policy_on_determining_Material_ Subsidiary_27072022.pdf

15. CAPITAL ADEQUACY

The capital adequacy ratio (Standalone) was 20.38% as on March 31,2023, comprising Tier I capital ratio of 12.85% against the ratio of 10% as prescribed by the RBI.

16. ANTI-CORRUPTION MECHANISM

The Company with a high regard for honesty and institutional integrity, formulated an Anti-Corruption framework which consists of Anti-Corruption, Gift and Whistle Blower/Vigilance policy, Fairness, Integrity and Transparency - FIT principles, applicable to all our employees and in our subsidiaries. The Company has responsibility both to the Members and to the communities to which we do business to be transparent in all our dealings.

likely to compromise the integrity of another. We will not accept any payment, gift or inducement from a third party which is intended to compromise our own integrity.

The Whistle Blower/Vigilance Policy of the Company urges employees to report and escalate unfair transactions without any fear of retribution. The Code of Conduct also includes procedures dealing with gifts and entertainment, conflicts of interest and other important matters. Risk assessment framework identifying inherent corruption risks has been prepared and implemented for all business and support verticals. The same is audited by our Internal Auditors. E-learning training and declaration on anticorruption is mandatory for our employees to ensure understanding of anti-corruption policy and ways to mitigate such risk.

In addition to the above, policies and procedures have been put in place for establishing channels for encouraging and facilitating employees to raise concerns or report a possible breach of law or regulations with appropriate measures to protect such whistle blower.

17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report is attached as part of the Annual Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of the Listing Regulations and Non-Banking Financial Company -Systemically Important Non-Deposit taking Company and Deposit taking Company Directions, 2016, as amended ("RBI Master Directions"), the Management Discussion and Analysis Report is attached as part of the Annual Report.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company are eminent Persons of proven competence and integrity. Besides experience, strong financial acumen, strategic astuteness and leadership qualities, they have a significant degree of commitment to the Company and devote adequate time to meetings and preparation. In terms of requirement of the Listing Regulations, the Board has identified core skills, expertise and

competencies of the Directors in the context of the Companyâs business for effective functioning, which are detailed in the Corporate Governance Report. The Board meets at regular intervals to discuss and decide on Company/business policy and strategy, apart from other Board business. The Board exhibits strong operational oversight with regular business presentations of meetings.

a. Directors

As on March 31, 2023, the Board comprises of eight (8) Directors out of which five (5) are Independent Directors including one (1) Independent Woman Director.

The Board comprises of Mr. Arun Kumar Purwar - Chairman & Independent Director, Mr. Nirmal Jain and Mr. R Venkataraman as Executive Directors of the Company in their capacity as Managing Director and Joint Managing Director, respectively. Mr. Nilesh Vikamsey, Mr. Vijay Kumar Chopra, Ms. Geeta Mathur and Mr. Ramakrishnan Subramanian as Independent Directors. Mr. Chandran Ratnaswami as a NonExecutive Director. The Board composition is in compliance with the requirements of the Act, Listing Regulations and the RBI Master Directions.

The Board is of the opinion that the Independent Directors of the Company have the required integrity, expertise and experience (including the proficiency).

b. Key Managerial Personnel

As on March 31,2023, Mr. Nirmal Jain - Managing Director, Mr. R Venkataraman - Joint Managing Director, Mr. Kapish Jain - Chief Financial Officer and Ms. Sneha Patwardhan - Company Secretary are the Key Managerial Personnel as per the provisions of the Act and Rules framed thereunder.

c. Appointment and Cessation of Directors and Key Managerial Personnel Appointment/Re-appointment

I n accordance with Section 152 of the Act read with Article 157 of the Articles of Association of the Company, Mr. R Venkataraman is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends the same for the approval of the Member.

During the year under review, Mr. Kapish Jain was appointed as the Deputy Chief Financial Officer & Head IR as Key Managerial Personnel ("KMP") of the Company w.e.f. September 27, 2022. Further, he was appointed as the Chief Financial Officer ("CFO") and KMP of the Company w.e.f. November 01,2022 to take over from Mr. Rajesh Rajak who had resigned as CFO of the Company. Cessation

Mr. Vibhore Sharma resigned from the position of Independent Director of the Company w.e.f. August 31,2022. The Board placed on record its appreciation for the valuable contribution made by him as a member of the Board.

Mr. Rajesh Rajak resigned from the position of CFO and KMP of the Company w.e.f. November 01, 2022. The Board placed on record its appreciation for the valuable contributions made by Mr. Rajesh Rajak during his tenure and wished him the very best in his future endeavors.

20. MEETING OF DIRECTORS & COMMITTEE/BOARD EFFECTIVENESS> Meetings of the Board of Directors

During the year under review, the Board met ten (10) times to discuss and approve various matters including financials, appointment of auditor, declaration of dividend, review of audit reports and other board businesses. For further details, please refer to the report on Corporate Governance forming part to this Annual Report.

> Committees of the Board

In accordance with the applicable provisions of the Act, Listing Regulations and RBI Master Directions, the Board constituted the following Committees:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Corporate Social Responsibility Committee ("CSR Committee")

â¢ Stakeholdersâ Relationship Committee

â¢ Risk Management Committee

â¢ Asset Liability Management Committee

â¢ IT Strategy Committee

The Board has set up various committees and delegated powers and assigned roles and responsibilities and has layered down well documented terms of references.

All the Committees are chaired by the Independent Directors except Asset Liability Management Committee which is chaired by Mr. R Venkataraman, Joint Managing Director pursuant to RBI circular dated November 04, 2019 on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies.

The Chairperson of respective Committees report to the Chairman of the Board who is an Independent Director and apprise the Board about the key highlights and decisions taken by the Committees.

The details inter alia including the composition, terms of reference and meetings held during the year under review of the aforesaid committee are provided in the Corporate Governance Report, forming part of this Annual Report.

Besides the aforesaid Committees, the Board of Directors of the Company has constituted Committees comprising of Senior Management Persons for day to day operations of the Company viz. Finance Committee, Group Credit Committee, Credit Committee, Environment Social and Governance ("ESG") Committee, etc.

> Board Effectiveness

â¢ Familiarization Program for the Independent Directors

Details of the Familiarization Programme are provided in the Corporate Governance Report and are also available on the website of the Company i.e. https:// storage.googleapis.com/iifl-finance-storage/files/2023-04/Familiarisation_ Programmes_for_IDs_25042023.pdf

â¢ Board Evaluation and outcome

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 forming part of this Annual Report.

â¢ Declaration by Independent Directors

The Company has received necessary declarations from each Independent Director of the Company as required, pursuant to the provisions of Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet

the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

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 Listing Regulations and are Independent to the Management and that there has been no change in the circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact the ability to discharge their duties with an objective of independent judgment and without any external influence.

All the Independent Directors of the Company have registered themselves on the Independent Directorsâ Databank mandated by the Indian Institute of Corporate Affairs as per the requirements of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

â¢ Fit and Proper Criteria & Code of Conduct Your Company has received undertaking and declaration from each Director on fit and proper criteria in terms of the provisions of RBI Master Directions. The Board of Directors has confirmed that all existing Directors are fit and proper to continue to hold the appointment as Directors on the Board, as reviewed and recommended by the NRC on fit and proper criteria under RBI Master Directions.

All the Directors of the Company have affirmed compliance with the Code of Conduct of the Company. The Declaration of the same is provided in the Corporate Governance Report which forms part of this Annual Report.

â¢ Board Diversity

The Company recognizes and embraces the importance of a diverse Board in its success. The Company believes that a truly diverse Board will leverage difference in thought, perspective, knowledge, skills, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race, gender that will help us retain our competitive advantage. The Policy adopted by the Board sets out its approach to diversity. The Policy is available on the website of the Company i.e. https:// storage.googleapis.com/iifl-finance-storage/files/2022-07/Board_Diversity_ Policy_27072022.pdf

â¢ Remuneration policy and criteria for selection of candidates for appointment of Directors

The Company has in place policy for remuneration of Directors and Key Managerial Personnel as well as a well-defined criteria for the selection of candidates for appointment on the said positions, which has been approved by the Board.

The Nomination and Remuneration Policy is also available on the website of the Company, i.e. https://storage.googleapis. com/iifl-finance-storage/files/2023-06/ Nomination_and_Remuneration_ Policy_30062023.pdf

â¢ Succession Planning

The Company has formulated policy on Succession Planning for Directors and Key Managerial Personnel for continuity and smooth functioning of the Company.

21. RISK MANAGEMENT

Your Company has a well-defined comprehensive Enterprise Risk Management ("ERM") Framework in place and a robust organizational structure to identify, assess, measure and monitor risks and strengthen controls to mitigate risks. Your Company has established procedures to periodically place before the RMC and the Board of Directors, the risk assessment and minimization procedures being followed by the Company and steps taken by it to mitigate these risks. ERM has been adopted by the Company which uses defined Key Risk Indicators based on quantitative and qualitative factors. A two-dimensional quantitative Heat Map has been implemented, which enables the Management to have a comprehensive view of various identified risk areas based on their probability and impact. The Company has initiated adequate Risk training and awareness programmes. The Composition, terms of reference and powers of the RMC are in conformity with the requirements of Regulation 21 of the Listing Regulations and RBI Master Directions and the same has been provided in the Corporate Governance Report. The RMC is authorized to monitor and review overall risk management plan including liquidity

risk and is also empowered, inter alia, to review and recommend to the Board the modifications to the Risk Management Policy. The ERM Policy is approved by the Board and inter alia, includes identification of risks, including strategic, financial, credit, market, liquidity, security, compliance, fraud, reputation, technology, cyber, outsourcing, people/conduct, collection, ESG, business which in the opinion of the Board may threaten the existence of the Company.

22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company has put in place a Policy for Related Party Transactions ("RPT Policy"), amended from time to time. The Policy provides for identification of Related Party Transactions ("RPTs"), necessary approvals by the Audit Committee/Board/Members, reporting and disclosure requirements in compliance with the provisions of the Act and Listing Regulations. The said policy can be accessed on the website of the Company i.e https://storage.googleapis.com/iifl-finance-storage/files/2022-07/Policy_on_Related_ Party_Transactions_27072022.pdf

All contracts or arrangements executed by the Company during the year under review with related parties were on armâs length basis and in the ordinary course of business. Hence, the disclosure of RPTs as required under Section 134(3)(h) of the the Act in Form AOC-2 is not applicable to your Company.

All such RPTs were placed before the Audit Committee/ Board/Members for their approval, wherever applicable. The Audit Committee reviews all RPTs on a quarterly basis.

You may refer to note no.4! to the Standalone Financial Statements and Consolidated Financial Statements respectively, which contain related party disclosures.

The Company has obtained the Memberâs approval on Material RPTs in the last AGM.

Considering the Company being NBFC and its nature of business and operations, the Company will continue entering into various RPTs in the ordinary course of business and accordingly the Company has sought

approval from Members for Material RPTs and details of the same can be sought from the Notice convening the AGM of the Company.

23. ANNUAL RETURN

Pursuant to Section 92(3) of the Act and the Rules framed thereunder and amended from time to time, the Annual Return of the Company for the Financial Year ended March 31, 2023 in prescribed Form MGT-7 is available on the website of the Company i.e.www.iifl.com.

24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company, which had occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of this Annual Report.

25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

26. WHISTLE BLOWER POLICY/VIGIL MECHANISM

Pursuant to Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Company has adopted a Whistle Blower Policy/Vigil Mechanism and has established the necessary vigil mechanism for Directors and Employees of the Company to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics policy. The said policy can be accessed on the website of the Company. i.e. https://storage. googleapis.com/iifl-finance-storage/files/2021-03/ MFL_WhistleBlower_VigilancePolicy_2020.pdf

28. PREVENTION OF SEXUAL HARASSMENT

Your Company recognizes its responsibility and continues to provide a safe working environment for women, free from sexual harassment and discrimination. In Compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on prevention of Sexual Harassment of Women at workplace and has duly constituted an Internal Complaints Committee under the same.

The Company also provides for mandatory online training on prevention of sexual harassment for every new joinee, as well as all employees on an annual basis.

The details of complaints received during during the Financial Year pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in the Corporate Governance Report.

29. PARTICULARS OF EMPLOYEES

Disclosures 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 Report. Further, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and other details as mentioned in Rule 5(3) of the aforesaid Rules, forms part of this 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 the Members and any Member interested in obtaining a copy thereof, may write to the Company, at [email protected].

30. STATUTORY AUDITORS

M/s. V Sankar Aiyar & Co, Chartered Accountants (Firm Registration Number 109208W) were appointed as the Statutory Auditors of the Company by the Members at the 25^th AGM of the Company held on June 30, 2020 for a period of five (5) years from the conclusion of the 25^th AGM till the conclusion of the 30^th AGM to be held in the year 2025.

The Members at the Extra Ordinary General Meeting of the Company held on September 30, 2021, revised the term of office for M/s. V Sankar Aiyar & Co, Chartered Accountants, from a term of five (5) years to a term of three (3) years i.e. three (3) years from FY 2020-21

till (and including) FY 2022-23 pursuant to the RBI Circular No. RBI/2021 -22/25 Ref. No. DoS.CO.ARG/ SEC.01/08.91.001/2021-22 dated April 27, 2021 ("RBI Guidelines") which required NBFCs to appoint the Statutory Auditors for a continuous period of three (3) years.

Further, pursuant to the said RBI Guidelines, the statutory audit of the entities with asset size of '' 15,000 Crores and above as at the end of previous year, should be conducted under joint audit of a minimum of two audit firms. Accordingly, based on recommendation of the Audit Committee, the Board of Directors of the Company at their Meeting held on July 27, 2021, recommended the appointment of M/s. Chhajed & Doshi, Chartered Accountants (Firm Registration Number 101794W) as the Joint Statutory Auditors for approval of the members of the Company. Subsequently, the Members at the Extra Ordinary General Meeting of the Company held on September 30, 2021, approved the said appointment of M/s. Chhajed & Doshi as the Joint Statutory Auditors for a continuous period of three (3) years with effect from FY 2021-22 till and including the FY 2023-24.

M/s. V Sankar Aiyar & Co and M/s. Chhajed & Doshi have also confirmed that they hold a valid peer review certificate as prescribed under Listing Regulations. The Joint Statutory Auditors have confirmed that they continue to satisfy the eligibility norms and independence criteria as prescribed by RBI Guidelines and the Act.

Further, pursuant to the completion of the term of M/s. V Sankar Aiyar & Co, Chartered Accountants, the Board of Directors of the Company at their meeting held on April 26, 2023, based on the recommendation of the Audit Committee, recommended the appointment of M/s. Sharp & Tannan Associates, Chartered Accountant (Firm Registration Number 109983W) as the Joint Statutory Auditors of the Company for the approval of the Members at the ensuing AGM for a period of 3 (three) years i.e. from the conclusion of the 28^th AGM till the conclusion of the 31^st AGM to be held in the year 2026 at such remuneration plus out of pocket expenses and applicable taxes, as may be mutually agreed between the Board of Directors of the Company and the Auditors.

Appropriate resolution seeking Membersâ approval for the appointment of M/s. Sharp & Tannan Associates, Chartered Accountant as the Statutory Auditors of the Company is appearing in the Notice convening the ensuing AGM of the Company.

The Audit for FY 2022-23 was conducted by M/s. V Sankar Aiyar & Co and M/s. Chhajed & Doshi, Joint Statutory Auditors of the Company and that there are no qualifications, reservations, adverse

remarks or disclaimers made by the Joint Statutory Auditors in their Audit Report. The Notes to the financial statements referred in the Auditorsâ Report are self-explanatory and therefore do not call for any comments under Section 134 of the Act. The Joint Statutory Auditorsâ Report is enclosed with the financial statements forming parts of this Annual Report.

31. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for FY 2022-23. The Secretarial Auditor had conducted the audit and their report was placed before the Board. The report of the Secretarial Auditor is annexed herewith as "Annexure - V" to this report. There are no qualifications or observations in the Report.

Pursuant to Regulation 24A of the Listing Regulations, a listed Company is required to annex a secretarial audit report of its material unlisted subsidiary to its Directors Report. Accordingly, the Secretarial Audit Reports of the material subsidiaries of the Company i.e. HFC and Samasta for FY 2022-23 is annexed herewith as "Annexure - VI" & "Annexure VII" respectively.

32. REPORTING OF FRAUDS BY AUDITORS

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

33. RBI DIRECTIONS

Your Company complies with the direction(s), circular(s), notification(s) and guideline(s) issued by the RBI as applicable to your Company as a Systemically Important Non-Deposit taking NBFC.

The Company has in place the system of ensuring compliance with applicable provisions of Foreign Exchange Management Act, 1999 and rules made thereunder as amended from time to time.

34. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India. The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Regulations and the RBI Master Directions forms an integral part of this Report. The requisite

certificate from M/s. Nilesh Shah & Associates, Practicing Company Secretaries confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Your Company has complied with all the norms prescribed by the RBI including the Fair Practices Code, Anti Money Laundering and Know Your Customer (KYC) guidelines besides other guidelines.

35. COMPLIANCE WITH THE SECRETARIAL STANDARDS

The Board of Directors affirm that the Company has complied with the applicable and mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

36. DEPOSITS

During the year under review, your Company did not accept/ renew any deposits within the meaning of Section 73 of the Act and the Rules made thereunder.

37. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Act and to the best of their knowledge and belief and according to the information and explanation obtained by your Directors, your Directors hereby confirm that:

a) i n the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b) the Directors had 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 the Company at the end of the Financial Year and of the profit of the Company for that period;

c) the Directors had 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 other irregularities;

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

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

38. GENERAL

Your Directors state that during FY 2022-23:

(i) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

(ii) The Company has not issued any sweat equity shares during the year;

(iii) There are no significant and material orders passed against the Company by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations;

(iv) The Central Government has not prescribed the maintenance of cost records for any of the products of the Company under sub-section (1) of Section 148 of the Act and the Rules framed there under;

(v) There is no change in nature of business of the Company during the year;

(vi) The Company has not defaulted in repayment of loans from banks and financial institutions;

(vii) There were no delays or defaults in payment of interest/principle of any of its debt securities;

39. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Reserve Bank of India, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, Government and other regulatory Authorities, Stock Exchanges, Depositories, Registrar and Share Transfer Agent, other statutory bodies, Companyâs bankers, Members and employees of the Company for the assistance, cooperation and encouragement and continued support extended to the Company.

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

For and on behalf of the Board Arun Kumar Purwar

Date: April 26, 2023 Chairman & Independent Director

Place: Mumbai (DIN: 00026383)

Mar 31, 2022

Your Directors present the Twenty Seventh Annual Report of IIFL Finance Limited ("your Company/the Company") together with the Audited Financial Statements for the Financial Year ended March 31, 2022. The Company is registered with the Reserve Bank of India ("RBI") as a Systemically Important Non-Banking Financial Company ("NBFC") not accepting public deposits (NBFC-ND-SI).

Under the cloud of COVID-19 pandemic, the year passed with difficult times and uncertainties. The second wave of the COVID-19 pandemic had a significant impact on lives, livelihoods and business. Despite the raging COVID-19 pandemic and lockdown, strong recovery and business momentum was witnessed. Your Company has ensured business continuity through a phygital model wherein the business as well as workforce adopted to this agile way of working.

1. FINANCIAL RESULTS

A summary of the financial performance of your Company and its major subsidiaries, for the Financial Year ended March 31,2022 is as under:

('' in Million)
Name of the Company			Revenue		Profit After Tax
IIFL Finance Limited			40,623.09		7,454.84
IIFL Home Finance Limited ("HFC")			20,860.76		5,779.95
IIFL Samasta Finance Limited (formerly known as Samasta Microfinance Limited) ("Samasta")			10,127.87		506.04
A summary of the consolidated and standalone financial performance of your Company, for the Financial Year ended March 31,2022, is as under: ('' in Million)
Particulars	Consolidated			Standalone
	2021-22	2020-21		2021	-22	2020-21
Gross total income	70,062.79	59,896.89		40,892.53		34,362.05
Profit before Finance Cost, depreciation, share of loss of Joint Venture, exceptional items and taxation	46,486.87	37,362.87		26,894.08		20,203.04
Finance Cost	29,910.05	26,258.27		16,156.07		15,549.75
Depreciation	1,216.98	1,056.76		1,064.26		908.83
Profit before share of loss of Joint Venture, exceptional items and tax	15,359.84	10,047.84		9,673.75		3,744.45
Share of loss from Joint Venture	-	-		-		-
Profit before exceptional items and tax	15,359.84	10,047.84		9,673.75		3,744.45
Exceptional items	-	-		-		530.50
Profit before tax	15,359.84	10,047.84		9,673.75		4,274.95
Taxation
-Current tax	3,277.76	3,173.53		1,712.83		972.83
-Deferred tax	193.84	(779.46)		511.79		(167.48)
-Short or excess provision for income tax	5.74	45.67		(5.71)		43.83
Net profit for the year	11,882.50	7,608.10		7,454.84		3,425.77
Other Comprehensive Income	92.14	(243.17)		(98.55)		(211.07)
Total Comprehensive Income	-	-		7,356.29		3,214.70
Total Comprehensive Income before Non Controlling interest	11,974.64	7,364.93		-		-
Attributable to:
Owners of the Company	11,971.12	7,358.03		-		-
Non-controlling interests	3.52	6.90		-		-

('' in Million)
Particulars	Consolidated		Standalone
	2021-22	2020-21	2021-22	2020-21
Less: Appropriations
Dividend	(1,328.20)	(1,135.41)	(1,328.21)	(1,135.41)
Dividend Distribution Tax	-	-	-	-
Transfer to/from Other Reserves	(3,126.57)	(1,624.48)	(1,952.30)	(686.80)
Change in Minority	3.67	2.73	-	-
On account of Merger	-	-	-	-
Add: Balance brought forward from the previous year	15,472.90	10,872.03	4,586.23	3,193.73
Balance to be carried forward	22,992.90	15,472.90	8,662.01	4,586.23

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

Transfer to Reserve

The Company during the year under review has transferred below mentioned amount to General Reserve out of the Retained Earnings. Further, in accordance with Section 45 IC of the Reserve Bank of India Act, 1934, the Company has also transferred below mentioned amount to Special Reserve.

('' in Million)
Particulars	Consolidated	Standalone
Particulars	2021-22	2021-22
Special Reserve during the year (Pursuant to Section 45 IC of the Reserve Bank of India Act, 1934)	2,053.51	1,952.30
Special Reserve during the year (Pursuant to Section 29C of National Housing Bank Act, 1987)	1,156.00	-
General Reserve during the year	0.65	0.65

2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF AFFAIRS OF YOUR COMPANY

During the year under review, your Company''s total income, on a consolidated basis, amounted to '' 70,062 Million compared to '' 59,897 Million in the previous year. We recorded our highest ever preprovision operating profit of '' 23,464 Million during the year, driven by volume growth and reduction in cost of funds compared to '' 20,018 Million in the previous year. Profit Before Tax stood at '' 15,360 Million compared to '' 10,048 Million in the previous year and Profit After Tax (TCI post non-controlling interest) stood at '' 11,971 Million compared to '' 7,358 Million in the previous year.

Our Loan Assets Under Management ("AUM") grew 15% y-o-y to '' 512,098 Million compared to '' 446,880 Million in the previous year. The core segments of our portfolio viz. Home loans, Gold loans, Business loans and Microfinance loans, grew faster at 20% y-o-y to '' 476,688 Million compared to '' 396,324 Million in the previous year. The primary drivers of the AUM growth were Gold loans, which grew by 23% y-o-y, Home loans, which grew by 23%

y-o-y and Microfinance loans, which grew by 30% y-o-y. The synergistic products of Construction & Real Estate finance and Capital Market loans continue to have a declining share in the portfolio.

We have transferred a substantial part of Construction & Real Estate ("CRE") loan assets that are in the form of non-convertible debentures to an Alternative Investment Fund. ("AIF"). The AIF has a target fund size of '' 36,000 Million. The above transaction is in line with the Company''s strategy of focusing on retail lending.

The AUM of the Company on standalone basis grew 10% y-o-y to '' 211,086 Million from '' 191,988 Million in the previous year. The AUM of HFC grew 14% y-o-y to '' 236,174 Million as of March 31, 2022 from '' 206,937 Million in the previous year and that of Samasta grew 35% y-o-y to '' 64,838 Million as on March 31, 2022 from '' 47,956 Million in the previous year. Our book continues to get more granular with about 94% of the book as at March 31,2022 being retail in nature. Moreover, 69% of the retail loans, excluding Gold loans, are compliant with RBI''s Priority Sector

Lending ("PSL") norms. Gold loans are not deemed to be PSL compliant. The large share of retail and PSL compliant loans are of significant value in the prevailing environment as they can be easily securitized/ assigned with banks to raise long-term resources.

Our average cost of borrowings for the year declined by 40 bps y-o-y to 8.60% and Net Interest Margin ("NIM") on On-Book Assets increased by 18 bps y-o-y to 7.0% in FY 2021-22. Consolidated Gross Non-Performing Assets ("GNPAs") and Net Non-Performing Assets ("NNPAs") recognized as per RBIâs prudential norms and provisioned as per Expected Credit Loss ("ECL") model prescribed in Indian Accounting Standards ("Ind AS"), stood at 3.2% and 1.8% of loans respectively as against 2.0% and 0.9% respectively in FY 2020-21. This includes the impact of RBI notification dated November 12, 2021.

Provision coverage (including standard assets provision), under Ind AS norms, on stage 3 assets for the year was 123%.

Return on assets for the year was at 2.7% as compared to 2.0% in the previous year. Similarly return on equity for the year was at 20.6% as compared to 15.3% in the previous year. It has mainly increased due to increase in net interest income and lower provisioning. Net interest income has mainly increased due to volume growth and savings in cost of funds. We added over 730 new branches and 8,500 more people. As a result, cost to income ratio increased to 40% in FY 2021-22 as compared to 35% in FY 2020-21.

Despite the challenging environment for the industry, we have managed our liquidity well with adequate margin of safety. We raised long-term funds (excluding assigned and securitized) of '' 157.92 Billion in FY 2021-22, including

'' 6.56 Billion from public issue of unsecured subordinated Non-Convertible Debentures ("NCDs") and '' 12.47 Billion raised through secured redeemable NCDs. Our exposure to commercial paper continues to be Nil. We completed securitization and assignment transactions of '' 133.6 Billion in FY 2021-22. We bought back US $ 50 Million worth of overseas bonds at par, funded by a corresponding External Commercial Borrowings ("ECB") loan of maturity not less than the maturity of the bonds bought back, in line with RBI regulations. This will reduce its cost of funds by approximately 225 bps on this transaction. Your Company successfully raised long term funds of US $ 68 Million from ADB to improve financial access to affordable green housing

& lower-income women borrowers. Our outstanding liability (excluding assignment and securitization) mix remained well diversified with NCDs including sub-ordinate debt constituting 31%, bank term loans and working capital finance constituting 61% and re-finance constituting 8%. Our outstanding securitization/assignment balance grew by 12% y-o-y to '' 166,957 Million. Cash and cash equivalents and committed credit lines from banks and institutions of '' 94.99 Billion were available as on March 31, 2022, adequate to meet not only all near-term liabilities but also to fund the growth momentum. We had a positive ALM throughout the year, whereby inflows covered or exceeded expected outflows across all buckets.

Outlook

â¢ India is expected to witness a Gross Domestic Product ("GDP") growth of 7.2% in FY 2022-23. The Governmentâs substantial capital spending program as envisaged in the Union Budget 2022 along with a healthy financial system is well positioned to attract private investment by reviving economic activity and boosting demand.

â¢ The outlook for FY 2022-23 looks promising especially in the retail segment, since macroeconomic indicators show that this segment is highly under penetrated. For eg. mortgage to GDP ratio of India is hardly 10%. Our investment in digital and technology initiatives has enabled us to seamlessly conduct business in an uninterrupted manner even during lockdown periods. Wherever required, our staffs are working from home. Disbursements and physical collections which were impacted during the onset of COVID-19 are back to pre-covid levels. We are well prepared to seize opportunities and manage risks at every stage of our value chain.

3. MACRO-ECONOMIC OVERVIEW

The COVID-19 pandemic that broke out in early 2020 continued to inflict health and economic shocks across countries in FY 2021-22 with its resurgent waves. The Delta variant of COVID-19 struck India in the beginning of FY 2021-22 marking the onset of the second wave. Unlike the first wave, the second wave was asynchronous in its onset across States and more intense in its spread, entering the rural hinterland. However, the economic impact of second wave was muted compared to that of the first wave.

After battling with technical recession in FY 2020-21, Indian economy showed recovery during FY 2021 -22. Following a contraction of 7.3% in FY 2020-21,

the Indian economy grew by FY 9.2% in FY 2021-22. This amelioration can be accredited to various growth policies of the Central Government, reduced interest rates and expeditious vaccination drive in the country.

Given the asynchronous nature of the second wave, Indiaâs Policy response constituted a differentiated response, the Government announced various production linked incentive schemes and committed nearly '' 1.97 Trillion for the next five years starting in FY 2021-22. Furthermore, the Centre also extended the Emergency Credit Line Guarantee Scheme ("ECLGS") till March 31, 2023 to provide credit support to small and micro organizations. As of March 2022, loans sanctioned under ECLGS had crossed '' 3.19 Trillion.

(Source: Economic Survey 2021-22, Union Budget 2022)

4. DIVIDEND

During the year under review, the Board of Directors of the Company declared and paid an interim dividend of '' 3.50/- per equity share (175%) (i.e. 1.75 times of the Face Value of '' 2/- per equity share) in accordance with the Dividend Distribution Policy of the Company. This led to an outgo of '' 1,328.20 Million (including tax deducted at source). Your Directors recommend that the said interim dividend be considered as final.

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board of Directors of the Company has adopted a Dividend Distribution Policy which is annexed as "Annexure-VM" to this report and is also available on the website of the Company i.e. https://storage.googleapis.com/iifl-finance-storage/files/7077-01/Dividend distribution policy IIFI Finance limited 2022.pdf.

5. INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")

In accordance with the applicable provisions of the Companies Act, 2013 ("the Act") read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends/interest and principal on NCDs are required to be transferred by the Company to the IEPF, after completion of seven (7) years. Further, according to the IEPF Rules, the shares on which dividend has not been claimed by the Members for seven (7) consecutive years or more shall be transferred to the demat account of the IEPF Authority.

The details relating to amount of dividend/interest and principal on NCDs transferred to the IEPF during

FY 2021-22 and shares on which dividends were unclaimed for seven (7) consecutive years, are provided in the General Shareholders Information section of Corporate Governance report forming part of this Annual Report.

6. KEY INITIATIVES/DEVELOPMENTS Public Issue of Debentures

During the year under review, the Company raised through public issue of secured, redeemable, NonConvertible Debentures ("NCDs"), an amount aggregating to '' 8,429.88 Million. Additionally, HFC raised an amount of '' 6,558.23 Million through public issue of unsecured, subordinated, redeemable, NCDs and '' 4,043.87 Million raised through secured, redeemable NCDs. These NCDs are listed and traded on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE").

Issuance of Non-Convertible Debentures on a Private Placement basis

During the year under review, the Company raised through Private Placement of Redeemable NCDs an amount aggregating to '' 7,200 Million. These NCDs are listed and traded on NSE and/or BSE.

Additionally, during the year under review, HFC and Samasta raised '' 7,650.20 Million and '' 1,248 Million respectively through Private Placement of Redeemable NCDs. The NCDs issued by HFC were listed on NSE while NCDs issued by Samasta were listed on BSE.

National Housing Bank Refinance

During the year under review, National Housing Bank ("NHB") sanctioned '' 12,950 Million refinance facility to HFC. HFC availed '' 12,338.40 Million of refinance facility from NHB under various refinance schemes during the year ended March 31,2022.

Additionally, during the year under review, Mudra and NABARD have refinanced '' 2,000 Million and '' 13,000 Million respectively under refinance facility to the Company. SIDBI and NABARD have refinanced '' 2,000 Million and '' 3,600 Million respectively to Samasta.

Funds raised by way of other Borrowings

During the year under review, the Company raised '' 24,292.50 Million through term loan from various banks. Additionally, during the year under review, HFC raised '' 31,900 Million through term loans and Samasta raised '' 30,430 Million through term loans from various banks.

Additional investment in Samasta

During the year under review, the Company invested in

the right issue of equity shares of Samasta for an amount of '' 1,500 Million, in June, 2021 and an amount of '' 750 Million in March, 2022. Post allotment, the holding of the Company in Samasta is 74.41%.

Additionally, during the year under review, HFC also invested in the right issue of equity shares of Samasta, for an amount of '' 1,546.30 Million in June, 2021 and an amount of '' 750 Million in March, 2022. Post allotment, the holding of the HFC in Samasta is 25%.

Transfer of real estate credit assets to an AIF

During the year under review, the Company has transferred a substantial part of its Construction and Real Estate ("CRE") loan assets that are in the form of NCDs to an AIF. The AIF has a target fund size of '' 36,000 Million. The above transaction is in line with the Companyâs strategy of focusing on retail lending.

Buyback of Overseas Dollar Bond

During the year under review, in relation to the US$ 400 Million, 5.875% Notes Due 2023 ("Notes"), the Company bought back US $ 60.30 Million worth of Notes. The Company had raised US $ 400 Million through issue of Medium Term Notes under Secured Medium Term Note Programme in February 2020 at an effective issue price of US $ 998.75 per US $ 1000 of face value, to fund its business growth. Notes of US $ 384 million were outstanding as on March 31,

2021. During FY 2021-22, the Company had bought back Notes of US $ 60.30 Million including US $ 50 Million at par through an open tender offer in March,

2022. The buyback of US $ 50 Million was funded by corresponding loan of the same amount from a global bank. After these buybacks, Notes of US $ 323.70 Million remained outstanding as on March 31,2022.

Listing of Bonds on NSE IFSC

During the year under review, US $ 376 Million of 5.875% Fixed Rate Senior Secured Notes were listed on NSE IFSC Limited on September, 2021. As on March 31,2022, US $ 323.70 Million bonds were outstanding.

Non-Convertible Debentures issued to Asian Development Bank

During the year under review, HFC has raised US $ 68 Million by issue of NCDs to Asian Development Bank ("ADB") to improve funding to affordable green housing for lower-income groups in India. 80% will be earmarked for women borrowers and 20% for green-certified homes.

Co-origination/co-lending tie-up with banks

During the year under review, the Company and its

subsidiaries tied up leading public sector and private sector banks for co-lending/co-origination/business correspondence. During the year under review, overall Asset under Management under co-lending stood at '' 34,899.33 Million (includes Home Loans and Gold).

Digital DIY business loans

During the year under review, the Company launched instant paperless digital business loans via WhatsApp and Mymoney App under its digital DIY journey initiative. The Company has disbursed '' 4,167 Million in FY 2021-22. More than 27,000 customers have been on boarded under this initiative till date.

Awards and Recognitions

During the year under review, following awards and accolades were conferred by reputable organizations:

â¢ IIFL Finance was listed as an "Iconic Brand" by the Economic Times.

â¢ IIFL Financeâs ''MyMoney Appâ received award for ''Quick Loan Approvalâ at the Asian BFSI Leadership Awards.

â¢ IIFL Finance received ''Most Admired Financial Services Companyâ Award at the Asian BFSI Leadership Awards.

â¢ IIFL Financeâs ''MyMoney Appâ received Best Finance App at National Awards for Excellence in Digital Marketing.

â¢ IIFL Finance received award for the best financial inclusion initiative at National Awards for Excellence in BFSI.

â¢ IIFL Financeâs #UmeedwaliSeedhiBaat received Silver in the Impact Digital Influencer Award (Best BFSI Campaign in Small Budget Campaign category).

â¢ IIFL Finance received Great Place to Work Certification.

â¢ IIFL Finance received - The Most Preferred Brand Award 2021 for Sustained Brilliance in Brand Building at Marksmen Daily Awards.

â¢ IIFL Financeâs ''Gold Loan at Homeâ product received ''Customer Services Excellence Awardâ at the World BFSI Congress.

â¢ IIFL Financeâs ''WhatsApp Loanâ product received ''Best Use of Mobile Technology in Financial Servicesâ award at the World BFSI Congress.

â¢ Mr. Saurabh Kumar, Business Head-Gold Loans, received the ''Most Admired BFSI Professional'' Award at World BFSI Congress.

â¢ Mr. Mayank Sharma, Senior Director Investments, Gold Investments, received the ''Most Admired BFSI Professionalâ Award at the World BFSI Congress.

â¢ IIFL Foundation''s ''Maa Baadi'' project received the ''Best Environment Friendly Project'' Award at the Global CSR Excellence & Leadership Awards.

â¢ IIFL Foundation''s ''Drone Vaccine Delivery'' project received the ''Most Innovative Solution for COVID-19'' award at the Global CSR Excellence & Leadership Awards.

â¢ IIFL Foundation received the award for ''Most Outstanding Contribution to the Cause of Education'' at the Global CSR Excellence & Leadership Awards.

â¢ Ms. Madhu Jain, Director, IIFL Foundation received the ''CSR Leadership'' Award at Global CSR Excellence & Leadership Awards.

â¢ IIFL Foundation received award for ''Best Covid Training Solutionâ at the Asian CSR Leadership Awards.

â¢ IIFL Foundation received award for ''Best CSR Practice in Banking and Finance Industryâ at the Asian CSR Leadership Awards.

â¢ IIFL Foundation''s ''Sakhiyon Ki Baadi'' program received the ''Best Innovation in CSR Practices Awardâ at the Asian CSR Leadership Awards.

â¢ IIFL Foundation was recognized as ''Champion of Changeâ by ET Now for bringing over 36,000 out-of-school girl children into education fold.

â¢ IIFL Foundation received India''s Greatest CSR Brand recognition by Asia One.

â¢ Ms. Madhu Jain, Director, IIFL Foundation received ''BlackSwan Award for Women Empowerment'' from the United Nations Global Compact network for her impactful leadership towards girl child education in India.

â¢ IIFL Foundation received Best Sustainability Education Program at Global Sustainability Leadership Awards.

â¢ IIFL Foundation received Sustainable Carbon Management Award at Global Sustainability Leadership Awards.

7. CORPORATE SOCIAL RESPONSIBILITY ("CSR") INITIATIVES

IIFL group has set-up India Infoline Foundation ("IIFL Foundation") a Section 8 Company incorporated under the Act, which acts as the principal arm to undertake CSR initiatives on behalf of the Company and its subsidiaries. IIFL Foundation through its CSR initiatives addresses 4 thematic areas - Health, Education, Livelihood & Poverty Alleviation, collectively - HELP

As per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, IIFL Foundation has registered itself with the Central Government by filing the e-Form CSR-1 with the Registrar of Companies.

The Company has identified focus areas for CSR initiatives which includes:

â¢ Literacy initiative for Females

â¢ Development of Medical facilities at Government Hospitals

â¢ Development of Infrastructure at Government Schools

â¢ Introduction of Electricity at Government Schools

â¢ Delivery of vaccines by Drone

â¢ Support to Educational Research Programs

â¢ Fight against outbreak of COVID-19 pandemic

â¢ Support to Shelter Home & Education of financially weaker group

â¢ Development of market place for women to promote livelihood

During FY 2021-22, the Company deployed 2% of its average net profits of the preceding three Financial Year (computed as per the relevant provisions of the Act) on CSR projects, utilizing the required amount on various social development activities, details thereof are mentioned in the CSR Annual Report, attached as "Annexure-I" to this report. The unspent amount of the ongoing project has been deposited in a separate bank account.

Further, during the year under review, impact assessment was not applicable to the Company. However, the same has been conducted by IIFL Foundation.

8. SHARE CAPITAL

During the year under review, the total paid up equity share capital of the Company increased from '' 75,76,81,352/- to '' 75,91,97,422/- pursuant to allotment of 7,58,035 equity shares of '' 2/- each under Employee Stock Option Scheme(s) of the Company to the eligible employees and the said equity shares rank pari pasu with the existing equity shares.

The movement of share capital was as under:

Particulars	No. of shares allotted	Cumulative outstanding capital (no. of equity shares with Face Value of '' 2/- each)
Capital at the beginning of the year	-	75,76,81,352
Allotment of shares to employees on May 20, 2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	1,33,914	75,79,49,180
Allotment of shares to employees on July 15, 2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	1,03,184	75,81,55,548
Allotment of shares to employees on September 15, 2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	1,74,725	75,85,04,998
Allotment of shares to employees on November 1 1,2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	53,229	75,86,11,456
Allotment of shares to employees on January 06, 2022 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	1,81,079	75,89,73,614
Allotment of shares to employees on March 10, 2022 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme	1,11,904	75,91,97,422

9. SECURITIZATION/ASSIGNMENT OF LOAN PORTFOLIO

During the year under review, your Company (consolidated) as an originator has undertaken securitization transactions of total book value of loan assets amounting to '' 17,884.70 Million and Direct Assignment transactions of total book value of loan assets amounting to '' 124,196.15 Million.

10. FINANCIAL LIQUIDITY

Consolidated cash and cash equivalent as on March 31, 2022 stood at '' 62,116.40 Million vis-a-vis

'' 26,429.02 Million in the previous year. The Companyâs working capital management is robust and involves a well-organized process, which facilitates continuous monitoring and control over receivables, inventories and other parameters.

11. INTERNAL CONTROL SYSTEMS

A. 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 accountants, engineers, fraud risk and information technology 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.

Due to COVID-19 pandemic, your Company has adopted efficient ''remote auditâ approach by leveraging technology to ensure continuity in audit and assurance processes. This shall enable

the Company to conduct remote internal audit in future as well. A comprehensive plan, scoping and deployment of data analytics, facilitated seamless and effective conduct of remote internal audits during the year.

B. Internal Controls over Financial Reporting:

The Company''s internal financial controls are commensurate with the scale and complexity of its operations. The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. The Company has put in place robust policies and procedures, which inter alia, ensure integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.

12. EMPLOYEES STOCK OPTION SCHEMES ("ESOS")

The Company has in force the following Schemes which are prepared as per the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014 ("SBEB Regulations"):

(a) IIFL Finance Employees Stock Option Plan 2007 ("ESOS Scheme 2007")

(b) I IFL Finance Employee Stock Option Plan 2008 ("ESOS Scheme 2008")

Further, no stock options were granted to the employees during the year under the ESOS Scheme

2007 and ESOS Scheme 2020.

The Company granted 9,25,000 Stock Options to eligible employees during the year under ESOS Scheme 2008.

During the year under review, 14,360 stock options granted under ESOS Scheme 2008 got lapsed and the same have been added back to the pool, which can be used for further grant and 1,98,225 stock options granted under ESOS Scheme 2020 got lapsed and the same are not available for further grant.

The aggregate number of stock options outstanding as on March 31, 2022 is 11,47,105 under ESOS Scheme

2008 and 35,72,033 under ESOS Scheme 2020.

There is no material change in Employeesâ Stock Option Scheme during the year under review and the Scheme is in line with SBEB Regulations.

A certificate from the Secretarial Auditor of the Company confirming that the Scheme has been implemented in accordance with SBEB Regulations and as substituted by the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 would be placed at the ensuing Annual General Meeting ("AGM") for inspection by Members through electronic means.

The relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are uploaded on the website of the Company i.e. www.iifl.com and the same is available for inspection by the Members at the Registered Office of the Company on all working days, except Saturdays, Sundays and Public Holidays, during business hours and through electronic means. Members can request the same by sending an email to shareholders@iifl. com till the AGM.

The relevant disclosures in terms of Ind AS 102, relating to share based payment, forms part of note 40 of the notes to the Standalone Financial Statements and note 39 of the notes to the Consolidated Financial Statements of the Company.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 are given in the Standalone Financial Statements note no. 8, 9 and 39.

14. SUBSIDIARY COMPANIES

As on March 31, 2022, the Company has two (2) subsidiaries, one (1) step down subsidiary. The Company does not have any Associate(s)/Joint Venture(s):

Sr. No.	Name of the Subsidiaries
1.	IIFL Home Finance Limited
2.	IIFL Samasta Finance Limited*
3.	IIHFL Sales Limited

*Name of the Company was changed to IIFL Samasta Finance Limited from Samasta Microfinance Limited vide special resolution passed by the Members of the Company at their Extraordinary General Meeting held on July 24, 2021.

During the year under review, IIHFL Sales Limited was incorporated on September 28, 2021 as a wholly owned subsidiary of HFC, which is a wholly owned subsidiary

of the Company. Accordingly, IIHFL Sales Limited became the step-down subsidiary of the Company.

Pursuant to Section 129, 134 and 136 of the Act read with applicable Rules, Regulation 33 of the Listing Regulations and applicable Ind AS, the Board of Directors had at their Meeting held on April 28, 2022, approved the Consolidated Financial Statements of the Company and its subsidiaries. Copies of the Balance Sheet, Statement of Profit and Loss, Report of the Board of Directors and Report of the Auditors of each of the subsidiary Companies are not attached to the accounts of the Company for FY 2021-22. The Company will make these documents/details available upon request by any Member of the Company. These documents/ details will also be available for inspection by any Member of the Company at its registered office and at the registered offices of the concerned subsidiaries during business hours on working days and through electronic means. Members can also request the same by sending an email to [email protected] till the AGM. The Annual Reports of all the subsidiaries are available on the website of the Company i.e. www.iifl. com. The Companyâs Financial Statements including the accounts of its subsidiaries which forms part of this Annual Report is prepared in accordance with the Act and Ind AS 110.

Pursuant to Regulation 16 of the Listing Regulations, HFC and Samasta were the Material Subsidiaries of the Company for FY 2021-22 and shall be the Material Subsidiaries for FY 2022-23. In line with the provisions of Regulation 24(1) of the Listing Regulations, Mr. Arun Kumar Purwar, Independent Director on the Board of the Company is also an Independent Director of HFC. The Policy on determining the Material Subsidiary is available on the website of the Company i.e. https://storage.googleapis.com/iifl-finance-storage/ files/2021 -03/Policy-on-determining-Material-Subsidiary 1.pdf.

15. CAPITAL ADEQUACY

The capital adequacy ratio (Standalone) was 23.85% as on March 31, 2022, comprising Tier I capital ratio of 16.02% against the ratio of 10% as prescribed by the RBI.

16. ANTI-CORRUPTION MECHANISM

The Company with a high regard for honesty and institutional integrity, formulated an Anti-Corruption framework which consists of Anti-Corruption, Gift and Whistle Blower/Vigilance Policy, Fairness, Integrity and Transparency - FIT principles, applicable to all our employees of the Company and its subsidiaries. The Company has responsibility both to the Members and to the communities with which we do business to be transparent in all our dealings.

The Company takes a zero tolerance approach to bribery and other forms of unlawful payment. The Companyâs Anti-Corruption framework requires that we do not engage in bribery or corruption in any form and explicitly mentions that we will not pay or procure payment of a bribe or unlawful fee to encourage the performance of a task or one which is intended or likely to compromise the integrity of another. We will not accept any payment, gift or inducement from a third party which is intended to compromise our own integrity.

The Whistle Blower/Vigilance Policy of the Company urges employees to report and escalate unfair transactions without any fear of retribution. The Code of Conduct also includes procedures dealing with gifts and entertainment, conflicts of interest and other important matters. Risk Assessment framework identifying inherent corruption risks has been prepared and implemented for all business and support verticals. The same is audited by our internal auditors. E-learning training and declaration on anticorruption is mandatory for our employees to ensure understanding of Anti-Corruption Policy and ways to mitigate such risk.

17. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report, in terms of Regulation 34(2)(f) of the Listing Regulations, describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of the Listing Regulations and Non-Banking Financial Company -

Systemically Important Non-Deposit taking Company and Deposit taking Company Directions, 2016, as amended ("RBI Master Directions"), the Management Discussion and Analysis Report is attached as part of the Annual Report.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company are eminent persons of proven competence and integrity. Besides experience, strong financial acumen, strategic astuteness and leadership qualities, they have a significant degree of commitment to the Company and devote adequate time to meetings and preparation. In terms of the requirement of the Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Companyâs business for effective functioning, which are detailed in the Corporate Governance Report. The Board meets at regular intervals to discuss and decide on Company/business Policy and strategy, apart from other Board business. The Board exhibits strong operational oversight with regular business presentations of meetings. The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meetings.

a. Directors

As on March 31, 2022, the Board comprises of nine (9) Directors out of which six (6) are Independent Directors including one (1) Woman Director.

The Board comprises of Mr. Arun Kumar Purwar -Independent Director & Chairman, Mr. Nirmal Jain and Mr. R Venkataraman as Executive Directors of the Company in their capacity of Managing Director and Joint Managing Director, respectively. Mr. Nilesh Vikamsey, Mr. Vijay Kumar Chopra, Ms. Geeta Mathur, Mr. Vibhore Sharma and Mr. Ramakrishnan Subramanian as Independent Directors. Mr. Chandran Ratnaswami is a Non-Executive Director of the Company. The Board composition is in compliance with the requirements of the Act, Listing Regulations and the RBI Master Directions.

The Board is of the opinion that the Independent Directors of the Company have the required integrity, expertise and experience (including the proficiency).

b. Key Managerial Personnel

Mr. Nirmal Jain - Managing Director, Mr. R Venkataraman - Joint Managing Director, Mr. Rajesh Rajak - Chief Financial Officer and

Ms. Sneha Patwardhan - Company Secretary are the Key Managerial Personnel as per the provisions of the Act and Rules framed thereunder.

c. Appointment and Cessation of Directors and Key Managerial Personnel Appointment/Re-appointment:

I n accordance with Section 152 of the Act read with Article 157 of the Articles of Association of the Company, Mr. Chandran Ratnaswami is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment. The Board recommends the same for the approval of Members.

Mr. Vibhore Sharma and Mr. Ramakrishnan Subramanian were appointed as Additional Directors (Non-Executive Independent) on the Board w.e.f. July 01, 2021 and September 06, 2021 respectively and subsequently the Members at their Extra Ordinary General Meeting of the Company held on September 30, 2021 approved their appointment as Non-Executive Independent Director(s) w.e.f. July 01,2021 and September 06, 2021 respectively.

Further, pursuant to SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2022, the Chairman of the Board may be a Non-Executive Director and not related to the Managing Director or the Chief Executive Officer. As a measure of good corporate governance practices, the Company suo moto appointed Mr. Arun Kumar Purwar as Chairman of the Board w.e.f. April 01,2022.

Further during the year, the Board of Directors approved appointment of Mr. Nirmal Jain as Managing Director of the Company for the period of five (5) years and change in designation of Mr. R Venkataraman as Joint Managing Director of the Company for his remaining tenure w.e.f. April 01, 2022, respectively. Approval of

the Members by ordinary resolutions for regularization of the appointment of Mr. Nirmal Jain as Managing Director and change in designation of Mr. R Venkataraman as Joint Managing Director has been sought in the Notice convening the 27^th AGM of the Company.

Cessation:

During the year, Mr. Nagarajan Srinivasan resigned

from the Board of Directors of the Company w.e.f.

June 15, 2021. The Board placed on record its deep appreciation and gratitude for the valuable contribution made by him.

20. MEETING OF DIRECTORS & COMMITTEES/BOARD EFFECTIVENESS

> Meetings of the Board of Directors

During the year under review, the Board met Seven (7) times to discuss and approve various matters including financials, appointment of auditor, declaration of dividend, review of audit reports and other board businesses. For further details, please refer to the report on Corporate Governance forming part to this Annual Report.

> Committees of the Board

The Board has set up various Committees and delegated powers and assigned roles and responsibilities and has layered down well documented terms of references. All the Committees are chaired by the Independent Directors except Asset Liability Management Committee which is chaired by Mr. R Venkataraman, Joint Managing Director pursuant to RBI circular dated November 04, 2019 on Liquidity Risk Management Framework for Non-Banking Financial Companies and Core Investment Companies. Audit Committee, Risk Management Committee, Nomination and Remuneration Committee and Stakeholdersâ Relationship Committee are chaired by different Independent Directors.

The Chairperson of respective Committees report to the Chairman of the Board who is an Independent Director and apprise the Board about the key highlights and decisions taken by the Committees.

I n accordance with the applicable provisions of the Act and Listing Regulations and RBI Master Directions, the Board constituted the following Committees:

â¢ Audit Committee

â¢ Nomination and Remuneration Committee

â¢ Corporate Social Responsibility Committee

â¢ Stakeholdersâ Relationship Committee

â¢ Risk Management Committee

â¢ Asset Liability Management Committee

â¢ IT Strategy Committee

The Audit Committee comprises of Mr. Nilesh Vikamsey, (Chairman of the Committee), Ms. Geeta Mathur, Mr. Arun Kumar Purwar and Mr. Ramakrishnan Subramanian. All the Members of the Audit Committee are Independent Directors.

The composition of the Audit Committee, role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Act, Listing Regulations and RBI Master Directions and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

During the year under review, the Audit Committee reviewed the internal control put in place to ensure that the accounts of your Company are properly maintained and are in accordance with the prevailing Laws and Regulations. In conducting such reviews, the Committee found no material discrepancy or weakness in the Internal Control system of your Company.

During the year under review, the Committee met and discussed on various matters including financials, internal audit reports and audit report. During the period under review, the Board of Directors of the Company accepted all the recommendations of the Audit Committee.

The details of Committee meetings held during the year under review and quorum are provided in the Corporate Governance Report which forms part of this Annual Report.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises of Mr. Vijay Kumar Chopra (Chairman of the Committee), Mr. Nilesh Vikamsey and Mr. Arun Kumar Purwar. All the Members of the Nomination and Remuneration Committee are Independent Directors.

The composition, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Act, Listing Regulations and RBI Master Directions and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a Nomination and Remuneration Policy in compliance with the aforesaid provisions for selection and appointment of Directors, Key Managerial Personnel,

Senior Management Personnel of the Company. The Nomination and Remuneration Policy is attached to this Annual Report and is also available on the website of the Company i.e. https://storage.googleapis.com/ iifl-finance-storaae/files/2021-03/Nomination and Remuneration Policy.pdf

The said Policy, the details of Committee meetings held during the year under review and quorum are provided in the Corporate Governance Report which forms part of this Annual Report.

CSR Committee

The CSR Committee comprises of Mr. Vibhore Sharma, Independent Director (Chairman of the Committee), Mr. R Venkataraman, Joint Managing Director, Mr. Nilesh Vikamsey, Independent Director and Mr. Vijay Kumar Chopra, Independent Director.

The composition, role, terms of reference and powers of CSR Committee are in conformity with the requirements of the Act and same is provided in Corporate Governance Report which forms part of this Annual Report.

The Committee has approved CSR Policy of the Company and the same is available on the website of the Company i.e. www.iifl.com. The Annual Report on CSR activities in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as "Annexure-I" to this report.

The details of Committee meeting held during the year under review and quorum are provided in the Corporate Governance Report which forms part of this Annual Report.

Stakeholders'' Relationship Committee

The Stakeholdersâ Relationship Committee comprises of Mr. Arun Kumar Purwar, Independent Director (Chairman of the Committee), Mr. Vijay Kumar Chopra, Independent Director and Mr. R Venkataraman, Joint Managing Director.

The composition, role, terms of reference and powers of the Stakeholdersâ Relationship Committee are in conformity with the requirements of the Act and Regulation 20 of the Listing Regulations and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

The details of Committee meeting held during the year under review, quorum and status of complaints are provided in the Corporate Governance Report which forms part of this Annual Report.

The Risk Management Committee comprises of Ms. Geeta Mathur, Independent Director (Chairperson of the Committee), Mr. R Venkataraman, Joint Managing Director, Mr. Nilesh Vikamsey, Independent Director, Mr. Ramakrishnan Subramanian, Independent Director and Mr. Sanjeev Srivastava, Chief Risk Officer.

The composition, role, terms of reference and powers of the Risk Management Committee are in conformity with the requirements of Regulation 21 of the Listing Regulations and RBI Master Directions and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

The details of Committee meetings held during the year under review and quorum are provided in the Corporate Governance Report.

Asset Liability Management Committee

The Asset Liability Management Committee ("ALCO") comprises of Mr. R Venkataraman, Joint Manaaina Director (Chairman of the Committee), Mr. Vijay Kumar Chopra, Independent Director, Mr. Arun Kumar Purwar, Independent Director, Mr. Ramakrishnan Subramanian, Independent Director, Mr. Rajesh Rajak, Chief Financial Officer, Mr. Sanjeev Srivastava, Chief Risk Officer and Mr. Govind Modani, V.P. Treasury.

The composition, role, terms of reference and powers of the ALCO are in conformity with the requirements of the provisions of RBI Master Directions and Asset Liability Manaaement ("ALM") System for NBFCs -Guidelines and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

The details of Committee meetings held during the year under review and quorum are provided in the Corporate Governance Report which forms part of this Annual Report.

IT Strategy Committee

The IT Strategy Committee comprises of Mr. Vibhore Sharma, Independent Director, (Chairman of the Committee), Mr. Nilesh Vikamsey, Independent Director, Ms. Geeta Mathur, Independent Director, Mr. Arun Kumar Purwar, Independent Director, Mr. Ramakrishnan Subramanian, Independent Director, Mr. Aditya Sisodia, Chief Information Officer/Chief Technoloay Officer, Mr. Mitesh Vora, Head - IT Infrastructure, Mr. Sanjeev Srivastava, Chief Risk Officer and Mr. Shanker Ramrakhiani, Chief Information Security Officer.

The composition, role, terms of reference and powers of the IT Strategy Committee are in conformity with the requirements of the Master Direction - Information Technology Framework for the NBFC Sector issued by the RBI and the same has been provided in the Corporate Governance Report which forms part of this Annual Report.

The details of Committee meetings held during the year under review and quorum are provided in the Corporate Governance Report which forms part of this Annual Report.

> Board Effectiveness

â¢ Familiarization Program for the Independent Directors

In compliance with the requirements of Listing Regulations, the Company has put in place a Familiarization Programme for Independent Directors to familiarize them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates and business model etc.

On a quarterly basis, presentations are made at the meeting of Board and Committees, on business, operations and performance updates of the Company and the group, important developments in the subsidiaries, relevant statutory and regulatory changes applicable to the Company, update on important legal matters pertaining to the Company and its subsidiaries.

Details of the Familiarization Programme are provided in the Corporate Governance Report and are also available on the website of the Company i.e. www.iifl.com

â¢ Board Evaluation and outcome

Pursuant to the provisions of the Act and Listing Regulations and SEBI Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 05, 2017, the Board of Directors has carried out an annual performance

evaluation of its own performance, the Directors individually including Independent Directors based out of the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination and Remuneration Committee. 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.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their Meeting held on March 24, 2022 reviewed the following:

(a) Performance of Non-Independent Directors, various Committee of Board and the Board as a whole.

(b) Performance of the Chairperson of the Company.

(c) Assessed the quality, quantity and timeliness of flow of information between the Companyâs management and the Board, which is necessary for the Board to effectively and reasonably perform their duties.

The Board was satisfied with overall management and functioning of the Committees. The Committees are functioning well and besides covering the mandatory terms of reference, important issues and relevant updates are also discussed periodically in the Committee meetings. Further, the contribution made by the Directors in their individual capacities were also found to be satisfactory.

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

The evaluation process endorsed the Board Membersâ confidence in the ethical standards of the 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.

â¢ Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director of the Company that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1 )(b) of the Listing Regulations.

The above declarations were placed before the Board and in the opinion of the Board all the Independent Directors fulfils the conditions specified under the Act and the Listing Regulations and are Independent to the management and that there has been no change in the circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact the ability to discharge their duties with an objective of independent judgment and without any external influence.

â¢ Fit and Proper Criteria & Code of Conduct

Your Company has received undertaking and declaration from each Director on fit and proper criteria in terms of the provisions of RBI Master Directions. The Board of Directors has confirmed that all existing Directors are fit and proper to continue to hold the appointment as Directors on the Board, as reviewed and recommended by the Nomination and Remuneration Committee on fit and proper criteria under RBI Master Directions.

â¢ Board Diversity

regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race, gender that will help us retain our competitive advantage. The Policy adopted by the Board sets out its approach to diversity. The Policy is available on the website of the Company i.e. www.iifl.com.

â¢ Remuneration Policy and criteria for selection of candidates for appointment of Directors

The Company has in place Policy for remuneration of Directors and Key Managerial Personnel as well as a well defined criterion for the selection of candidates for appointment to the said positions, which has been approved by the Board.

The nomination and remuneration Policy has been disclosed in the Corporate Governance Report which forms part of this Annual Report and is also available on the website of the Company i.e. https:// storage.googleapis.com/iifl-finance-storage/files/2021-03/Nomination and Remuneration Policy.pdf

21. RISK MANAGEMENT

Your Company has a well-defined risk management framework in place and a robust organizational structure for managing and reporting on risks.

The Risk Management Committee comprises majorly of Independent Directors with Ms. Geeta Mathur, Independent Director as the Chairperson, Mr. R Venkataraman, Joint Managing Director, Mr. Nilesh Vikamsey, Independent Director, Mr. Ramakrishnan Subramanian, Independent Director and Mr. Sanjeev Srivastava, Chief Risk Officer.

The role, terms of reference and powers of the Risk Management Committee are in conformity with the requirements ofRegulation 21 of the Listing Regulations and RBI Master Directions and the same has been provided in the Corporate Governance Report. The Risk Management Committee is authorized to monitor and review risk management plan and is also empowered, inter alia, to review and recommend to the Board the modifications to the Risk Management Policy. The Risk Management Policy is approved by the Board and inter alia, includes identification of risks, including strategic, financial, credit, market, liquidity, security,

property, IT, legal, regulatory, reputational and other risks which have been Identified and assessed. Risk management process has been embedded across all the major functions and has been established across the Company designed to identify, assess and frame a response to threats that affect the achievement of its objectives.

The details of Committee meetings held during the year under review are provided in the Corporate Governance Report which forms part of this Annual Report.

22. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company has put in place a Policy for Related Party Transactions ("RPT Policy"), amended from time to time. The Policy provides for identification of Related Party Transactions ("RPTs"), necessary approvals by the Audit Committee/Board/Members, reporting and disclosure requirements in compliance with the Act and provisions of the Listing Regulations. The said Policy can be accessed on the website of the Company i.e. https://storage.googleapis.com/ iifl-finance-storage/files/?0??-05/Policy on Related Party Transactions.pdf

All contracts executed by the Company during the year under review with related parties were on armâs length basis and in the ordinary course of business. All such RPTs were placed before the Audit Committee/ Board for approval, wherever applicable. The Audit Committee reviews all RPTs quarterly.

The disclosure of RPTs as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company. You may refer to note no. 42 and note no. 41 to the Standalone Financial Statements and Consolidated Financial Statements respectively, which contain related party disclosures.

The Company has obtained the Memberâs approval on Material RPT(s) in the previous AGM.

Considering the Company being NBFC and its nature of business and operations, the Company will continue entering into various RPTs in the ordinary course of

business and accordingly the Company has sought approval from Members for Material RPTs and details of the same can be sought from the Notice convening the AGM of the Company.

23. ANNUAL RETURN

Pursuant to Section 92(3) of the Act and the Rules framed thereunder, as amended from time to time, the Annual Return of the Company in prescribed Form MGT-7 is available on the website of the Company i.e. www.iifl.com.

24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

25. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

26. WHISTLE BLOWER POLICY/VIGIL MECHANISM

Pursuant to Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing Regulations, the Company has adopted a Whistle Blower Policy/Vigil Mechanism and has established the necessary vigil mechanism for Directors, Employees and Stakeholders of the Company to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or ethics Policy. The Company has disclosed the Policy on the website of the Company i.e. www.iifl. com.

28. PREVENTION OF SEXUAL HARASSMENT

The Company also provides for mandatory online training on prevention of sexual harassment for every new joinee, as well as all employees on an annual basis.

The details of complaints received during FY 2021-22 pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in the Corporate Governance Report.

29. PARTICULARS OF EMPLOYEES

The said information is available for inspection by the Members and any Member interested in obtaining a copy thereof, may write to the Company Secretary at [email protected].

30. STATUTORY AUDITORS

The RBI has vide its Circular No. RBI/2021-22/25 Ref. No.DoS.CO.ARG/SEC.01 /08.91.001 /2021 -22 dated April 27, 2021, issued the Guidelines for Appointment

of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) ("RBI Guidelines"). As per para 8.1 of the said circular, the NBFCs were required to appoint the SAs for a continuous period of three (3) years, subject to the firms satisfying the eligibility norms each year. Whereas, the audit firms which had already completed tenure of one (1) year, were permitted to complete the balance tenure only i.e. two (2) years.

In view of the above, the Members at the Extra Ordinary General Meeting of the Company held on September 30, 2021, revised the term of office for M/s. V Sankar Aiyar & Co, Chartered Accountants (Firm Registration Number 109208W), from a term of five (5) years to a term of three (3) years i.e. three (3) years from FY 2020-21 till (and including) FY 2022-23 and that for the remainder of this revised term, M/s. V Sankar Aiyar & Co, Chartered Accountants (Firm Registration Number 109208W) should act as the Joint Statutory Auditors of the Company.

Further, pursuant to the said RBI Guidelines, the statutory audit of the entities with asset size of '' 15,000 Crore and above as at the end of previous year, should be conducted under joint audit of a minimum of two audit firms. Accordingly, based on recommendation of the Audit Committee and approval of the Board of Directors at their respective meetings held on July 27, 2021, M/s. Chhajed & Doshi, Chartered Accountants (Firm Registration Number 101794W) were appointed as the Joint Statutory Auditors of the Company, by the members at the Extra Ordinary General Meeting of the Company held on September 30, 2021, for a continuous period of three (3) years w.e.f. FY 2021-22 till and including the FY 2023-24.

The Audit for FY 2021-22 was conducted by M/s. V Sankar Aiyar & Co and M/s. Chhajed & Doshi, Joint Statutory Auditors of the Company and that there are no Qualifications, reservations, adverse remarks or disclaimers made by the Joint Statutory Auditors in their Audit Report. The Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under

Section 134 of the Act The Joint Statutory Auditorsâ Report is enclosed with the financial statements in the Annual Report.

31. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for FY 2021-22. The Secretarial Auditor had conducted the audit and their report was placed before the Board. The report of the Secretarial Auditor is annexed herewith as "Annexure-M" to this report. There are no qualifications or observations in the report.

Pursuant to Regulation 24A of the Listing Regulations, a listed company is required to annex a secretarial audit report of its material unlisted subsidiary to its Directorsâ Report. The Secretarial Audit Reports of the material subsidiaries of the Company i.e. IIFL Home Finance Limited and IIFL Samasta Finance Limited for FY 2021-22 is annexed herewith as "Annexure-III" & "Annexure-IV" respectively to this Report.

32. REPORTING OF FRAUDS BY AUDITORS

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

33. RBI DIRECTIONS

Your Company complies with the direction(s), circular(s), notification(s) and guideline(s) issued by the RBI as applicable to your Company as a Systemically Important Non-Deposit taking NBFC.

The Company has in place the system of ensuring compliance with applicable provisions of Foreign Exchange Management Act, 1999 and rules made thereunder as amended from time to time.

34. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Regulations and the RBI Master Directions forms an integral part of this Report. The requisite certificate from M/s. Nilesh Shah & Associates, Practicing Company Secretaries confirming

compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

Your Company has complied with all the norms prescribed by the RBI including the Fair Practices Code, Anti Money Laundering and Know Your Customer ("KYC") guidelines besides other guidelines.

35. COMPLIANCE WITH THE SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India.

36. DEPOSITS

During the period under review, your Company did not accept/renew any deposits within the meaning of Section 73 of the Act and the Rules made thereunder.

37. DIRECTORS'' RESPONSIBILITY STATEMENT

a) i n the preparation of the annual accounts, the applicable accounting standards had been followed and there were no material departures;

b) the directors had 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 the Company at the end of the Financial Year and of the profit of the Company for that period;

c) the directors had 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 other irregularities;

d) the directors had prepared the annual accounts on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; 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.

38. GENERAL

Your Directors state that during the Financial Year 2021-22:

(i) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

(ii) The Company has not issued any sweat equity shares during the year.

(iv) The Central Government has not prescribed the maintenance of cost records for any of the products of the Company under sub-section (1) of Section 148 of the Act and the Rules framed thereunder.

(v) There is no change in nature of business of the Company during the year.

(vi) The Company has not defaulted in repayment of loans from banks and financial institutions.

(vii) There were no delays or defaults in payment of interest/principle of any of its debt securities.

39. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the Reserve Bank of India, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, government and other regulatory Authorities, stock exchanges, other statutory bodies, Companyâs bankers, Members and employees of the Company for the assistance, cooperation and encouragement and continued support extended to the Company.

Your 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 in helping the Company scale new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as Members is also greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board Arun Kumar Purwar

Date: April 28, 2022 Chairman & Independent Director

Place: Mumbai (DIN: 00026383)

Mar 31, 2018

Dear Shareholders,

The Directors present the Twenty Third Annual Report of IIFL Holdings Limited (âyour Companyâ) together with the Audited Financial Statements for the financial year ended March 31, 2018.

1. FINANCIAL RESULTS

A summary of the financial performance of your Company and its major subsidiaries, for the financial year ended March 31, 2018 is as under:

Rs. in Million

Name of Company	Revenue	Profit after tax
IIFL Holdings Limited	2,530.03	2,043.48
India Infoline Finance Limited	25,051.94	3,544.97
India Infoline Housing Finance Limited	12,686.66	1,974.09
Samasta Microfinance Limited	967.83	25.83
IIFL Securities Limited (Formerly known as India Infoline Limited)	6,345.96	1,293.89
IIFL Wealth Management Limited	7,265.35	1,484.57
IIFL Wealth Finance Limited	7,829.77	1,560.20
IIFL Asset Management Limited	1,030.36	297.25
IIFL Asset Management (Mauritius) Limited	1,256.58	706.30
IIFL Facilities Services Limited (Formerly known as IIFL Real Estate Ltd.)	1,448.97	131.28
IIFL Insurance Brokers Limited (Formerly known as India Infoline Insurance Brokers Limited)	299.08	138.35
IIFL Commodities Limited (Formerly known as India Infoline Commodities Limited)	135.67	19.28
IIFL Distribution Services Limited	196.24	1.19
IIFL Capital Pte. Limited	266.35	19.02
IIFL Private Wealth Management (Dubai) Limited	78.02	7.39
IIFL Securities Pte Limited	84.78	18.44
IIFL Investment Adviser and Trustee Services Limited	382.80	102.67
IIFL Alternate Asset Advisers Limited	63.46	23.32
IIFL Private Wealth Hong Kong Limited	20.61	3.20
IIFL Trustee Limited (Formerly India Infoline Trustee Company Limited)	17.83	9.50
IIFL Inc	59.71	(18.36)
India Infoline Media and Research Services Limited	163.33	111.15
IIFL Capital Inc.	141.76	13.51
IIFL Wealth (UK) Limited	94.49	5.11
Others	412.22	8.15

Consolidated Financial Results

A summary of the consolidated financial performance of your Company, for the financial year ended March 31, 2018, is as under:

Rs. in Million

Particulars	2017-18	2016-17
Gross total income	38,541.62	31,639.98
Profit before interest, depreciation and taxation	28,230.05	24,689.26
Interest and financial charges	18,967.68	17,793.52
Depreciation	173.05	158.72
Profit before tax (from Continuing Operations)	9,089.32	6,737.02
Taxation - Current	3,096.97	2,420.07
- Deferred	(250.24)	(186.34)
- Short or excess provision for income tax	2.74	25.77
Net profit for the year (from Continuing Operations)	6,239.85	4,477.52
Profit/(loss) before tax from Discontinuing Operation	7,587.58	5,502.90
Tax Expenses of Discontinuing Operations	2,206.66	1,758.62
Profit from Discontinuing Operations after tax	5,380.92	3,744.28
Net profit before minority interest	11,620.77	8,221.80
Less: Share of Profit to Minority Shareholders / Share of profit from Associates	2,507.53	1,360.91
Net Profit after Taxes, Minority Interest and Share of profit of Associates Companies	9,113.24	6,860.89
Less: Minority interest	(146.45)	(730.36)
Opening Adjustments	234.79	-
On account of demerger of 5Paisa Capital Ltd.	12.45	-
Less: Appropriations
Dividend	(1,592.38)	(1,449.62)
Dividend Distribution Tax	(270.72)	(291.04)
Transfer to Special Reserve	(1,422.21)	(1,082.40)
Transfer to Debenture Redemption Reserve	(617.02)	(830.15)
Transfer to Capital Redemption Reserve	(750.00)	(1,500.00)
Deferred tax Liability	-	(14.81)
Add: Balance brought forward from the previous year	6,541.66	5,579.15
Balance to be carried forward	11,103.36	6,541.66

* Previous periods figures have been regrouped / rearranged wherever necessary

Standalone Financial Results:

A summary of the standalone financial performance of your Company, for the financial year ended March 31, 2018, is as under:

Rs. in Million

Particulars	2017-18	2016-17
Gross total income	1,588.09	1,428.71
Profit before interest, depreciation and taxation	1,555.22	1,408.70
Interest and financial charges	NIL	NIL
Depreciation	4.19	1.94
Profit before tax	1,551.03	1,406.76
Taxation - Current	NIL	NIL
- Deferred	NIL	NIL
- Short or excess provision for income tax	NIL	NIL
Profit/(loss) after Tax from Continuing Operations	1,551.03	1,406.76
Profit/(loss) after tax from Discontinuing Operations	492.45	161.02
Profit/(loss) for the year	2,043.48	1,567.78
Less: Appropriations
Interim Dividend	(1,592.38)	(1,429.19)
Dividend Distribution Tax	(0.96)	(0.64)
Transfer to Debenture Redemption Reserve	(31.22)	(41.9)
Add: Balance brought forward from the previous year	2,310.18	2,214.13
On account of demerger of 5paisa Capital Limited	12.45	-
Balance to be carried forward	2,741.55	2,310.18

* Previous periods figures have been regrouped / rearranged wherever necessary

2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF YOUR COMPANYâS AFFAIRS

During the year under review, your Companyâs total income, on a consolidated basis, increased to Rs.64,376 million, up 31% year-on-year (y-o-y). Profit before tax increased to Rs.16,677 million, up 36% y-o-y and Profit after tax before minority interest increased to Rs.11,621 million, up 41% y-o-y.

During the year, the income from the loans and mortgages business has increased by 22% y-o-y to Rs.38,570 million. This was driven by growth in the loan AUM by 40% from Rs.222,810 million in FY17 to Rs.311,336 million in FY18. The Loan book of Housing Finance Company grew robustly by 45% to Rs.119,169 million as of March 31, 2018 as against Rs.81,924 million in the previous year. The Companyâs MFI subsidiary namely Samasta Microfinance Limited has achieved a significant growth of 252% in its AUM to Rs.8406.19 million and its branch network increased to 186. During the year, income from the wealth management business witnessed robust growth of 60% y-o-y to reach Rs.17,378 million and assets under advice, distribution and management increased by 39% y-o-y to Rs.1,317,617 million. The Wealth Management arm i.e. IIFL Asset Management Limited continued to be the largest AIF platform in the Country with AUM of Rs.117,359 million Income from Capital Market related activities increased significantly by 24% y-o-y to Rs.8,428 million.

There is no change in the nature of business of the Company. There were no significant or material orders passed by regulators or courts or tribunals impacting the going concern status and Companyâs operations in future.

3. MACROECONOMIC OVERVIEW

Indian Economy has regained the tag of fastest growing economy in the world in FY18, despite the two major reforms, namely GST and Demonetisation that deterred the growth rate in the short run. The growth has been mainly driven by manufacturing and construction sectors. The country posted an overall growth of 6.7% in 2017 and is expected to rise to 7.4% in 2018. The construction sector grew at 3.4% in FY18, compared with 6.3% in FY17. The agricultural sector grew at 3.4% in FY18, compared with 6.3% in FY17.

The GDP growth rate for FY18 is expected to be at 6.75% as per government estimates (Economic Survey report 2018) and between 7% and 7.5% in 2019. Production momentum in the country remaining strong, capacity utilisation and private sector capital expenditure is expected to increase in FY19. However, despite a general upside sentiment, the economy remains vulnerable to external risks, key among them is the anticipated rise in crude price and input costs.

The concerns regarding banking sector credit quality after the discovery of recent frauds have slowed down the investment pace in the country. It is expected that further re-capitalisation, as part of a broader package of financial reforms to improve the governance of public sector banks and lendersâ debt recovery mechanisms, will improve the banking sectorâs ability to support growth.

On the NBFC front, one of the biggest challenges in FY19 is higher borrowing costs and narrowing options to raise funds, as they seek to raise Rs.3,800 billion to Rs.4,000 billion of debt to finance a 20% growth in loan portfolio, according to rating agency ICRA. ICRA expects the weighted average cost of funds for NBFCs to increase to about 9.3%-9.5% in FY19 compared to 8.4%-8.5% in FY18. The weighted average cost of funding for NBFCs could be higher by a minimum of about 45 basis points in FY19, based on the debt maturity profiles and incremental funding requirement.

4. DIVIDEND ON EQUITY SHARES

During the year 2017-18, Board of Directors of the Company declared and paid an interim dividend of Rs.5/per equity share (i.e. 2.5 times of face value of Rs.2/- per equity share). This led to an outgo of Rs.1592.38 million owing to dividend (excluding dividend distribution tax). Your Directors recommend that said interim dividend be considered as final. The total dividend paid during the previous financial year 2016-17 was Rs.4.5/- per equity share.

The dividend payout for the year under review is in accordance with the Companyâs policy to pay sustainable dividend linked to long-term growth objectives of the Company, to be met by internal cash accruals. The Board had approved the Dividend Distribution Policy on January 25, 2017 in line with the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Policy is available on the Companyâs website at https://www.iifl. com.

5. SCHEME OF ARRANGEMENTS

Composite Scheme of Arrangement

The Board of Directors of the Company at its meeting held on January 31, 2018, approved the Composite Scheme of Arrangement amongst the Company, India Infoline Media and Research Services Limited (âIIFL M&Râ), IIFL Securities Limited (âIIFL Securitiesâ), IIFL Wealth Management Limited (âIIFL Wealthâ), India Infoline Finance Limited (âIIFL Financeâ), IIFL Distribution Services Limited (âIIFL Distributionâ), and their respective shareholders, under Sections 230 - 232 and other applicable provisions of the Companies Act, 2013 (âSchemeâ) which inter-alia, envisages the following:

i. amalgamation of IIFL M&R with the Company;

ii. demerger of the Securities Business Undertaking (as defined in the Scheme) of the Company into IIFL Securities;

iii. demerger of the Wealth Business Undertaking (as defined in the Scheme) of the Company into IIFL Wealth;

iv. amalgamation of IIFL Finance with the Company; and

v. transfer of the Broking and Depository Participant Business Undertaking (as defined in the Scheme) of IIFL Wealth to its wholly owned subsidiary i.e., IIFL Distribution, on a going-concern basis.

The share entitlement ratio under the scheme is as under:-

a. For the demerger of the Securities Business Undertaking from the Company:

For every 1 (One) fully paid equity share of Rs.2 each held in the Company, the shareholder of the Company will get 1 (One) fully paid equity share of Rs.2 each of IIFL Securities Limited.

b. For the demerger of the Wealth Business Undertaking from the Company:

For every 7 (Seven) fully paid equity share of Rs.2 each held in the Company, the shareholders of the Company will get 1 (One) fully paid equity share of Rs.2 each of IIFL Wealth Management Limited.

c. For amalgamation of India Infoline Finance Limited with the Company:

For every 100 (One hundred) fully paid equity shares of Rs.10 each held in India Infoline Finance Limited, the shareholder of India Infoline Finance Limited will get 135 (One Hundred and Thirty Five) fully paid equity shares of Rs.2 each of the Company.

The Appointed Date for the amalgamation of IIFL M&R with the Company is opening hours of April 1, 2017 and for all the other steps, the Appointed Date is opening hours of April 1, 2018. The Scheme will be given effect to upon receipt of requisite approvals of National Company Law Tribunal (âNCLTâ) and other authorities.

This will enable the Companyâs three dominant focused businesses i.e. loan & mortgage, securities and wealth management to list as independent entities at Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited subject to necessary approvals.

The Rationale of the Scheme is as under:

(i) Over the course of time, Company has grown into a diversified financial conglomerate with interests in loans & mortgages, wealth management services, distribution of financial products and capital market services. Each of the core businesses have acquired critical mass, requiring flexibility and independence to grow faster in the fast changing technology and innovation driven environment.

(ii) Each core business has a differentiated strategy, different industry specific risks and operate inter alia under different market dynamics and growth trajectory. The nature and competition involved in each of the businesses is distinct from others and consequently each business or undertaking is capable of attracting a different set of investors, strategic partners, lenders and other stakeholders.

(iii) Accordingly, the Company proposes to re-organise and segregate, by way of a composite scheme of arrangement, its businesses and undertakings into three different listed verticals dealing in loans & mortgages business, wealth management services and capital market business. These listed entities will be subject to public, media, analysts and regulatory review. A clean corporate structure with no cross holdings will ensure transparency, accountability, highest standards of corporate governance and compliance. It also enhances operational flexibility and helps quick response to competitive or environmental challenges.

(iv) The proposed reorganisation pursuant to this Scheme is expected, inter alia, to result in the following benefits:

a) unlocking of value and create enhanced value for shareholders and allow a focused strategy in operations, which would be in the best interest of all the stakeholders; and

b) creation of listed loans & mortgages business, wealth management services and capital market business with ability to achieve valuation based on respective risk-return profile and cash flows, attracting the right investors and thus enhancing flexibility in accessing capital;

(v) Further, each listed company can separately attract and motivate its key people with stock options such that their rewards are strongly correlated with their own and their businessâs performance and connect to the IIFL Groupâs philosophy of âowner mindsetâ, which believes in shared ownership and shared accountability by all team members.

The above is subject to regulatory and NCLT approval.

The Company has filed the draft Scheme with exchanges, SEBI and other authorities for their approval and approval is awaited.

Demerger of 5paisa digital Undertaking

The Honâble National Company Law Tribunal (âNCLTâ), Mumbai bench had vide its order dated September 06, 2017 sanctioned the Scheme of Arrangement between IIFL Holdings Limited and 5paisa Capital Limited and their respective Shareholders (âthe Schemeâ). The Scheme inter alia provided for Demerger of 5paisa digital undertaking from IIFL Holdings Limited to 5paisa Capital Limited. The said order has been filed with Ministry of Corporate Affairs (âMCAâ) on September 30, 2017 and Demerger is effected w.e.f. the Appointed Date i.e. October 1, 2016 in the books of accounts of the Company.

Upon the Scheme came into effect and in consideration of the transfer and vesting of the 5paisa digital Undertaking into 5paisa Capital Limited, 1,77,16,500 Equity Shares of Rs.10/- each held by IIFL Holdings Limited in the 5paisa Capital Limited were extinguished and cancelled and in lieu of the same, the equity shareholders of IIFL Holdings Limited, whose name appeared in the Register of Members on October 18, 2017, were allotted one (1) equity share of Rs.10/- each in 5paisa Capital Limited, credited as fully paid-up for every Twenty Five (25) equity share of Rs.2/- each fully paid-up held by such equity shareholders in IIFL Holdings Limited. Accordingly, 1,27,39,022 equity Shares of Rs.10/each of 5paisa Capital Limited were issued and allotted to the eligible Shareholders of IIFL Holdings Limited on October 20, 2017. Pursuant to this, 5paisa Capital Limited ceased to be a subsidiary of the Company w.e.f. from September 30, 2017.

The equity shares of 5paisa Capital Limited so issued pursuant to the Scheme of Arrangement were listed and admitted for trading on BSE Limited (âBSEâ) and National Stock Exchange of India Limited (âNSEâ) with effect from November 16, 2017.

Demerger of IIFL Facilities Services Limited

During the financial year ended March 31, 2018, the Honâble National Company Law Tribunal (âNCLTâ), Mumbai bench had vide its order dated July 19, 2017 sanctioned the Scheme of Arrangement for demerger of Real Estate Advisory services undertaking from IIFL Facilities Services Limited, a wholly-owned-subsidiary of the Company, into another wholly-owned-subsidiary namely IIFL Management Services Limited (Erstwhile India Infoline Insurance Services Limited) in terms of the provisions of Companies Act, 2013. The said order has been filed with MCA on September 29, 2017 and Demerger is effected w.e.f. the Appointed Date i.e. April 01, 2017 in the books of accounts of the Company.

Merger of Ayusha Dairy Private Limited

M/s Ayusha Dairy Private Limited, a wholly-owned subsidiary of Samasta Microfinance Limited (âSamastaâ) is in the process of merger with Samasta. The members and creditors of both the companies have approved the scheme of amalgamation in their meetings held on March 28, 2018 respectively and requisite forms have been filed with the appropriate authorities for their approval and approval is awaited.

6. KEY INITIATIVES/DEVELOPMENTS:

i. Investment Banking

Fiscal 2018 has been the best year for the Companyâs Investment Banking business. IIFL completed 27 transactions viz. IPOs, QIPs, right issues, private equity advisory and pre IPO placements. This included 11 IPOs and 8 follow on transactions involving listed companies. Recently, IIFL has been ranked as #1 Investment Banker for equity raising for private sector companies by PRIME Database for the financial year 2017-18 as per their Investment Banking league tables FY 2018 of private sector issuers for aggregated equity IPOs, FPOs, QIPs and InvIT IPOs by issue amount on full credit basis. Additionally, Capital Finance International (âCFI.coâ) has ranked IIFL as the Best IPO Lead Manager - India for 2018.

As was the case in fiscal 2017, IIFL completed a number of large Investment Banking transactions with marquee clients in fiscal 2018 as well. Some of the notable transactions completed by IIFL in the last fiscal year includes:

- The largest QIP in Indian capital markets till date (~Rs.150,000 million of State Bank of India)

- Largest private sector IPO over the last 9 years (~Rs.87,000 million IPO of HDFC Standard Life Insurance Company)

- First IPO ofa Power Exchange in India (i.e. Indian Energy Exchange)

- First IPO of a General Insurance Company in India (ICICI Lombard General Insurance Company)

- First listing of an Infrastructure Investment Trust (IRB InvIT Fund)

- The first IPO of an asset management company in India (Reliance Nippon Life Asset Management)

The Company has a robust pipeline of investment banking transactions across a number of product categories, which are in different stages of execution. IIFL continues to diversify its product/service offerings and invest in people, processes and technology. The Companyâs efforts and investments into this business are beginning to pay off. Clients continue to value IIFLâs focus and commitment and consider it as their trusted advisor.

ii. Asset Management

IIFL Asset Management acts as an Investment Manager to IIFL Mutual Fund, IIFL Alternative Investment Funds and undertakes Portfolio Management Services.

The total assets managed by IIFL AMC under Mutual Fund, AIF and Portfolio Management Services has increased to Rs.135,832 million as on March 31, 2018 vis-a-vis Rs.92,651 million as on March 31, 2017. Under IIFL Mutual Fund Platform, the assets under management have increased from Rs.6,252 million to Rs.9,012 million. IIFL Capital Enhancer Fund, an annual interval mutual fund scheme was launched in April, 2018 which garnered about Rs.4,600 million.

AIF assets saw a robust growth of approx. 58% on a YoY basis to Rs.117,358.7 million as on March 2018 under its various focused scheme. IIFL AMC continued to offer various products to the investors which is beyond the mainstream investments and has been market disrupter. IIFL Special Opportunities Fund with an intent to invest in Pre-IPO and IPO opportunities garnered lots of interest and huge demand which required the AMC to launch various series under these Scheme.

1) Category II Alternative Investment Funds:

a. IIFL Special Opportunities Fund and its series till 7

b. India Housing Fund

2) Category III Alternative Investment Funds: a. Housing Advantage Fund

3) IIFL Mutual Fund

a. IIFL Capital Enhancer Fund - Series 1 During the year, the Company took initiatives to diversify and strengthen its distribution. IIFL AMC got empanelled with several large banks and wealth management firms enabling IIFL AMC to significantly enhance its reach and distribute its products widely. The Company has also significantly strengthened its sales team and mid-office team in order to service investors.

iii. Real Estate Investment Trust (REIT) Initiative

IIFL Holdings Limited sponsored Real Estate Investment Trust (âREITâ) namely IIFL Real Estate Investment Trust (IIFL REIT) has received approval from SEBI to undertake REIT activities. IIFL Asset Management Limited is the Investment Manager for the REIT. This would enable IIFL to launch REIT Funds through REIT IPOs in future.

iv. Slump sale of Commodities Broking Business

With a view to integrate the equity and commodities broking carried on by respective subsidiary within IIFL group and to ensure smooth operations and servicing of their clients, the commodity broking business of MCX and NCDEX carried on by IIFL Commodities Limited, a wholly owned subsidiary of the Company, is transferred to IIFL Securities Limited, another wholly owned subsidiary of the Company, pursuant to the necessary approvals and in accordance with the SEBI circular on integration of equity and commodity broking. The transfer is undertaken as per the valuation certificate received from independent Chartered Accountant, for a cash consideration of Rs.76.9 million. The integration is expected to be implemented by July 2018.

v. Merger of Ashburton India Equity Opportunities Fund with IIFL India Equity Opportunities Fund Ashburton Investments, the asset management arm of First Rand Group and IIFL Capital Pte. (an Asset Management Company registered in Singapore) have entered into a Binding agreement to merge Ashburton India Equity Opportunities Fund (an India focussed sub fund under Ashburton Investments SICAV, UCITS domiciled in Luxembourg) into IIFL India Equity Opportunities Fund (a sub-fund under IIFL Fund, UCITS based in Luxembourg). Ashburton India Equity Opportunities Fund has a fund size of USD124.47 million as on April 30, 2018.

Requisite applications have been filed with Commission de Surveillance du Secteur Financier (CSSF), Luxembourg and regulatory approvals are awaited post which the merger will be concluded.

vi. Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee of the Board has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicating the CSR activities which can be undertaken by the Company. The Board approved CSR Policy may be accessed from the Companyâs website link: https://www.iifl.com.

The IIFL group has set-up India Infoline Foundation (generally referred as âIIFL Foundationâ) a Section 8 Company under the Companies Act, 2013, which acts as the principal arm to undertake CSR initiatives on behalf of the Group.

The group has identified focus areas for CSR initiatives which includes :

a) Girl child illiteracy eradication program for out of school and illiterate girls.

b) Improving the quality of education in Government schools through technological interventions.

c) Rural Transformation in Maharashtra.

d) Financial Literacy and Financial Inclusion.

e) Preventive Health.

f) Disaster Relief and Rehabilitation.

g) Integrated rural development, drought relief and water conservation

(h) Protection of culture

(i) Measures for benefit of armed forces veterans, war widows etc.

During the financial year, your Company deployed 2 % of its average net profits (computed as per the relevant provisions of Companies Act, 2013) of the preceding three years on CSR projects fully utilising the required amount. At the group level, besides the Company, ten subsidiary companies came under the purview of the provisions for CSR for the year. During the fiscal year 2017-18, the group made a total deployment of Rs.183 million into CSR activities.

vii. Investor Conference/Events

IIFLâs Enterprising India Global Investorsâ Conference IIFLâs ninth Enterprising India Conference was held from the 21st to 23rd of February 2018 with the theme âRise of the millenialsâ

The event saw participation from 130 companies and 700 investors. In addition, it featured 24 specialist speakers, including Dr Jim Walker, renowned economist; Ashish Chauhan, Managing Director, BSE Limited; Nisaba Godrej, Executive Chairperson, Godrej Consumer Products; Nikhil Ojha, Partner, Bain & Company; TN Ninan, Editorial Director, Business Standard; Anjan Ghosh, Chief Rating Officer, ICRA; and Dan Ariely, James B Duke Professor of Psychology and Behavioral Economics, Duke University.

The conference was well attended by companies from all major business sectors - Auto Cement, Banking, FMCG, IT Services, Infrastructure, Oil & Gas, Media etc.; and validated the thoughts on strong investor sentiment among both domestic and foreign investors.

IIFLâs Enterprising India Conference has grown over the years in size and stature to emerge as a key corporate event in the Indian Investment environment

- Adda Express

IIFL Private Wealth associated with The Indian Express to put together Express Adda, a series of freewheeling dialogues on contemporary issues with newsmakers in an informal setting. The events are held in New Delhi and Mumbai. Guests such as Dalai Lama, Smriti Irani, Arun Jaitley and Karan Johar have graced the platform on various occasions.

- Off The Cuff (OTC)

Off The Cuff, or OTC, is a series of candid talk shows organised in collaboration with NDTV and was launched in January 2016 and held once a month. The event is hosted as an on-ground event anchored by eminent journalist Shekhar Gupta in conversation with a distinguished guest in the presence of a notable, invited audience. After the initial dialogue between the guest and the moderator, OTC is open to the audience to question and engage with the guest. The idea is to break through the clutter and noise of existing debates on television and other platforms, and bring out an engaging, constructive discussion; while also keeping live audiences involved throughout. Eminent personalities have graced the OTC series including Maharashtraâs Chief Minister Devendra Fadnavis, Dalai Lama, authors Vikram Seth and Amish Tripathi, actor Ranveer Singh, Union Minister Dharmendra Pradhan and New York Times columnist and author Thomas Friedman to name a few.

- Value of Things (VoT)

Value of Things 2018 was held over two chapters in Delhi and Pune with over 1000 attendees collectively. It was a celebration of the ideals that create values, the values that represent people and the people that understand these values. We recognised four common values that drive our clientsâ businesses - Ambition, Passion, Innovation and Foresight. Speakers included Business futurist Patrick Schwerdtfeger, Eminent Journalist T. N. Ninan & Motivational speaker Capt. Raghu Raman.

- Positive Action Changes Things (PACT)

Positive Action Changes Things included a series of client events held in New York, London & Dubai, and was attended by more than 500 clients collectively. Eminent speakers such as Nandan Nilekani, Mark Dzialga, Shashi Tharoor and leading fund managers from India address the audience over a range of topics ranging from healthcare, infrastructure development, rural development schemes to economic reforms.

- Dhan Ki Baat

Adding another feather to the objective of creating financial awareness, IIFL collaborated with Zee Business for a 26-episode televised series - Dhan ki Baat - the complete guide to understanding and managing personal finances. It was complemented with a financial knowledge portal www.dhankibaat.co.in containing supporting blogs to engage the viewers better.

Dhan ki Baat made its TV debut on September 30, 2017 and was telecast every Monday at 10 PM for the next 25 weeks. During these weeks, the topics covered such as Mutual funds, stock market investing basics, understanding the difference between trading, investing and speculation and IPO investing. Later on, in house experts discussed topics such as margin funding/ LAS, commodity and currency trading, technical analysis for beginners, Futures and Options/ Derivatives trading, SIP for wealth creation, and fixed-income products: Bonds, FDs and NCDs. Unique insights were provided on differentiated topics such as creating of trust, investing outside India, investing in AIF etc.

viii. Awards and Recognitions

The following awards were conferred in FY18:

- IIFL was featured in the prestigious Forbes list of Indiaâs Super 50 Companies

- IIFL ranked 241 in prestigious Fortune India 500 list, up by 42 positions

- IIFL was among the seven Outlook Business Outperformers for superior business performance

- IIFL received the âGreat Places to Workâ Certification

- IIFL was nominated in the most promising company category at the CNBC TV18 IBLA Awards 2018

- IIFL received theâData Center Innovation awardâ for adopting futuristic technology

- ETNOWDealingRoomHeroes2017

- IIFL received the Best Customer Centric Company - Financial Sector at World Quality Congress & Awards, 2017

- Proactive Fraud detection analytical model - Suraksha selected for Skotch Financial Technology Awards

- Asset Management Company of the Year- Rising Star, India at The Asset Triple A Asset Servicing, Fund Management and Investors Awards 2017

- IIFL was awarded âBest IPO Bidding Member -Retailâ at the NSE Market Achievers Awards

- National Housing Bank recognised IIFL Housing Finance amongst Best Performing Primary Lending Institutions under CLSS for EWS/LIG

- IIFL was awarded as âlndiaâs Greatest CSR Brandâ by Asia One magazine

- I IFL Wealth was recognised for providing the Best Digital Wealth Management Experience, India at The Asset Triple A Digital Awards 2017

- IIFL Wealth was a recipient of the BFSI Best Brands at The Economic Times Awards, 2018

- IIFL Wealth was among Asiaâs Greatest Brands & Leaders at URS Asia One, 2018

- IIFL Wealth was recognised as provider of the Best Family Office Services, India in the Euromoney Private Banking and Wealth Management Survey, 2018

- IIFL Wealth was awarded for its Research and Asset Allocation Advice, India at the Euromoney Private Banking and Wealth Management Survey, 2018

- IIFL Estate Planning was surveyed as the Best Succession Planning Advice and Trusts, India in the Euromoney Private Banking and Wealth Management Survey, 2018

- Global Finance Best Private Bank Awards, 2018 honoured IIFL Wealth as the Best Private Bank in India

- IIFL Wealth was also won the Best Wealth Manager - India Domestic award at Asian Private Banker Awards for Distinction, 2017

- At Asiamoney Best Bank Awards 2017: India, IIFL Wealth won in the Best Private Bank - India category

- IIFL Wealth received the Best Private Bank, India Award at The Asset Triple A Private Banking, Wealth Management, Investment and ETF Awards, 2017

7. SHARE CAPITAL

During the period under review, the total share capital of the Company increased from Rs.63,58,16,386/- to Rs.63,79,58,052/- pursuant to allotment of 10,70,833 equity shares of Rs.2/- each under Employee Stock Option Scheme(s) of the Company to the eligible employees.

8. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

During the year under review 472,635 stock options under ESOS 2008 granted to employees have lapsed and the same have been added back to the pool, which can be used for further grant. Further, 200,000 stock options were granted to the employees during the year under the ESOS 2008.

The issue of equity shares pursuant to exercise of options does not affect the Statement of Profit and Loss of the Company, as the exercise of options is made at the market price prevailing a day before the grant plus taxes as applicable.

There is no material change in Employeesâ Stock Option Scheme during the year under review and the Scheme is in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 (âSBEB Regulationsâ). A certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SBEB Regulations and the resolution passed by the members would be placed at the ensuing Annual General Meeting for inspection by members. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits) Regulations, 2014 are provided on the website of the Company www.iifl.com and the same is available for inspection by the members at the Registered Office of the Company on all working days, except Saturdays, Sundays and Public Holidays, during business hours up to the date of the ensuing Annual General Meeting.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of investments made, loans given, guarantees given and securities provided along with the purpose for which the loan or guarantee or security was proposed to be utilised by the recipient are given at the respective places in standalone financial statement (please refer to Note 10, 26 & 33 to the standalone financial statement).

10. SUBSIDIARY COMPANIES

As on March 31, 2018, the Company had 32 (Thirty two) subsidiaries (including step down subsidiaries)/ Associates located in India and overseas. During the year, the Company has acquired additional 50% equity shares of IIFL Asset Reconstruction Limited (âARCâ) and consequently ARC became a wholly-owned subsidiary of the Company and ceased to be an associate Company. Further, India Infoline Finance Limited, the NBFC subsidiary, has acquired 100% equity shares of Clara Developers Private Limited and IIFL Wealth Management Limited has incorporated IIFL Capital (Canada) Limited as its wholly-owned subsidiary.

During the year, 5paisa Capital Limited and IIFL Properties Private Limited ceased to be subsidiaries of the Company in terms of respective schemes of arrangement approved by Court/NCLT.

As per the provisions of section 134 and 136 of the Companies Act, 2013 read with applicable Rules, Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable Accounting Standards, the Board of Directors had at their meeting held on May 03, 2018 approved the consolidated financials of all the subsidiaries of the Company along with the Companyâs financial statements. Copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary companies are not attached to the accounts of the Company for the financial year 2017-18. The Company will make these documents/details available upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and at the registered offices of the concerned subsidiaries i.e. except on Saturdays, Sundays and Public Holidays. The Annual Report of all the subsidiaries will be uploaded on the website of the Company i.e. www.iifl.com. As required by Companies Act, 2013 and Accounting Standard - 21 (AS 21) issued by the Institute of Chartered Accountants of India, the Companyâs consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries. A report on the performance and financial position of each of the subsidiaries, associates and joint ventures companies as per Companies Act, 2013 is provided in the prescribed form AOC-1 as Annexure A of the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

Pursuant to regulation 16 and 24 of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, India Infoline Finance Limited, IIFL Wealth Management Limited and IIFL Wealth Finance Limited and India Infoline Housing Finance Limited were the Material Subsidiaries of the Company for the financial year 2017-18 and pursuant to aforesaid regulations the same will continue to remain as such for the financial year 2018-19 as well.

The policy on determining the material subsidiary is available on the website of the Company at www.iifl.com.

11. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report, in terms of Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, describing the initiatives taken by IIFL Group from an environmental, social and governance perspective is attached as part of the Annual Report.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Directors

The Board comprises Mr. Nirmal Jain and Mr. R. Venkataraman as Executive Directors of the Company in their capacity of Chairman and Managing Director respectively. Mr. Nilesh Vikamsey, Mr. A. K. Purwar, Mr. Kranti Sinha, Dr S. Narayan and Ms. Geeta Mathur are Independent Directors and Mr. Chandran Ratnaswami is a non-executive non-independent Director of the Company.

In accordance with Section 152 of the Companies Act, 2013 (âActâ) read with Article 157 of the Articles of Association of the Company, Mr. R. Venkataraman is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment. The Board recommends the same for the approval of Shareholders.

b. Key Managerial Personnel

Mr. Nirmal Jain- Chairman, Mr. R. Venkataraman-Managing Director, Mr. Prabodh Agrawal- Chief Financial Officer and Mr. Gajendra Thakur- Company Secretary are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder. There is no change in the Key Managerial Personnel during the year under review.

The Remuneration and other details of the Key Managerial Personnel for the year ended March 31, 2018 are mentioned in the Extract to the Annual Return in Form MGT-9 which is attached as âAnnexure IIâ and forms a part of this report of the Directors.

14. Meeting of Directors & Committee/Board Effectiveness

- Meetings of the Board of Directors

The Board met Four (4) times during the year to discuss and approve various matters including financials, appointment of auditor, declaration of dividend, review of audit reports and other board businesses. For further details please refer to the report on Corporate Governance.

- Committees of the Board

In accordance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board constituted the following Committees:

- Audit Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Stakeholders Relationship Committee

- Risk Management Committee

- Audit Committee:

The Audit Committee comprises Mr. Nilesh Vikamsey, Independent Director, Mr. Kranti Sinha, Independent Director, Ms. Geeta Mathur, Independent Director and Mr R. Venkataraman, Executive Director. The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same along with details of committee meetings have been provided in the Corporate Governance Report. The Committee met during the year under review and discussed on various matters including financials, audit reports and appointment of auditors. During the period under review, the Board of Directors of the Company accepted all the recommendations of the Audit Committee.

- Nomination and Remuneration Committee: The Nomination and Remuneration Committee comprises three Independent Directors with Mr. Kranti Sinha, Independent Director, Mr. Nilesh Vikamsey, Independent Director and Mr. A K Purwar, Independent Director, as members of the Committee.

The role, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same have 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, KMP, senior management personnel of the company. The said policy and the details of Committee meetings are provided in the Corporate Governance Report.

- Corporate Social Responsibility Committee

As per the provision of Section 135 of the Companies Act, 2013, the Company has constituted CSR Committee, comprises Mr. Nilesh Vikamsey, Independent Director, Mr. Nirmal Jain, Executive Director and Mr. R. Venkataraman, Executive Director. The Committee has approved CSR Policy of the Company. The details of CSR Committee meeting are provided in the Corporate Governance Report. The policy on corporate social responsibility is available on the website www. iifl.com. The Annual Report on Corporate Social responsibility is attached as âAnnexure Iâ.

- Stakeholders Relationship 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same have been provided in the Corporate Governance Report.

The Stakeholders Relationship Committee comprises Mr. A. K. Purwar, Independent Director, Mr. Nirmal Jain, Executive Director and Mr. R Venkataraman, Executive Director.

The details of Committee meeting and complaints are provided in the Corporate Governance Report.

- Risk Management Committee

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013, the Company has constituted a Risk Management Committee. The objective of the Committee is to oversee the risk management governance structure, define and review the framework for identification, assessment, monitoring, mitigation and reporting of risks.

The Risk Management Committee comprises Mr. A. K. Purwar, Independent Director, Mr Nilesh Vikamsey, Independent Director and Mr Nirmal Jain, Executive Director. The Committee held its meetings during the year under review and details thereof are mentioned under Corporate Governance Report.

- Board Effectiveness

- Familiarisation Program for the Independent Directors

In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a Familiarisation Programme for Independent Directors to familiarise them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates, business model etc. Details of the Familiarisation Programme are explained in the Corporate Governance Report and are also available on the Companyâs website at http://www.iifl.com.

- Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular no, SEBI/HO/CFD/CMD/ CIR/P/2017/004 dated January 05, 2017, the Board of Directors has carried out an annual performance evaluation of its own performance, the Directors individually including Independent Directors based out of the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by Nomination and Remuneration Committee (âNRCâ). The evaluation process, manner and performance criteria for independent directors in which the evaluation has been carried out by is explained in the Corporate Governance Report.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting held on March 28, 2018 reviewed the following:

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

- Performance of the Chairperson of the Company

- Assessed the quality, quantity and timeliness of flow of information between the Companyâs 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 Membersâ confidence in the ethical standards of the 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.

- Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

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

b) the directors had 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 the Company at the end of the financial year and of the profit of the Company for that period;

c) the directors had 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) the directors had prepared the annual accounts on a going concern basis;

e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

16. RISK MANAGEMENT

The Company has in place Risk Management Committee to assist the Board in (a) overseeing and approving the companyâs enterprise wide risk management framework; and (b) overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed. There is an adequate risk management infrastructure in place capable of addressing those risks.

The Companyâs management monitors and reports principal risks and uncertainties that can affect its ability to achieve its strategic objectives. The companyâs management systems, organisational structures, policy, processes, standards, and code of conduct together form the risk management governance system of the company.

The Company has in place a Risk Management Policy and introduced several process improvements to internal controls systems and processes to drive a common integrated view of risks and optimal and mitigation responses. This integration is enabled through dedicated team and Risk Management, Internal Control and Internal Audit methodologies and processes.

17. INTERNAL FINANCIAL CONTROLS

The 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.

18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The 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/Shareholders, reporting and disclosure requirements in compliance with Companies Act, 2013 and provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All contracts executed by the Company during the financial year with related parties were on armâs 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, the Company has not entered into any contract / arrangement / transaction with related parties, which could be considered material in accordance with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the policy of the Company on materiality of related party transactions. The policy for determining âmaterialâ 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 the Companyâs website www.iifl.com. You may refer to Note no. 34 to the standalone financial statement, which contains related party disclosures. Since all related party transactions entered into by the Company were on an armâs length basis and in the ordinary course of business and the Company had not entered into any material related party contracts, Form AOC-2 disclosure is not required to be provided.

19. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return of the Company in form MGT - 9 is annexed herewith as âAnnexure - IIâ.

20. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this annual report.

21. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2017-18. The Auditor had conducted the audit and their report thereon was placed before the Board. The report of the Secretarial Auditor is annexed herewith as âAnnexure - IIIâ. There are no qualifications or observations in the Report.

22. 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 âAnnexure -IVâ to and forms part of this Report.

23. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In Compliance of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. The Company has disclosed the policy at the website at https://www.iifl. com/investor-relations/corporate-governance.

24. PREVENTION OF SEXUAL HARASSMENT

Your Company recognises its responsibility and continues to provide a safe working environment for women, free from sexual harassment and discrimination. In Compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has put in place a Policy on prevention of Sexual Harassment of Women at workplace.

Your Directors further state that the during the fiscal year 2017-18, there were no complaints received 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 programme against sexual harassment carried out:

The Company has conducted an online training for creating awareness against the sexual harassment against the women at work place.

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

25. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in âAnnexure - Vâ.

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 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 the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

26. STATUTORY AUDITORS

Pursuant to the provisions of Section 139(2) of the Companies Act, 2013 and the rules made thereunder, the Members at their 22^nd Annual General Meeting (âAGMâ) held on July 22, 2017, had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firmâs Registration Number 117366W/W-100018) as the Statutory Auditors of the Company for a term of five years, i.e. from the conclusion of the 22nd AGM till the conclusion of the 27th AGM subject to ratification of their appointment at every AGM. Accordingly, the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company, is being placed for ratification by the Members in the forthcoming AGM.

In this regard, the Company has received a certificate from the Statutory Auditors to the effect that ratification of their appointment, if made, would be in accordance with the provisions of Section 141 of the Act. They have also confirmed that they hold a valid Peer Review Certificate issued to them by the Institute of Chartered Accountants of India (âICAIâ).

The Notes to the financial statements referred in the Auditors Report are self-explanatory and therefore do not call for any comments under Section 134 of the Companies Act, 2013. The Auditorsâ Report is enclosed with the financial statements in the Annual Report.

27. 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 the 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.

28. RBI/FEMA COMPLIANCE

The Reserve Bank of India vide its press release dated June 10, 2016 had notified FI I/ FPI investment limit of up to 80% in the paid up capital of IIFL Holdings Limited under the Portfolio Investment Scheme.

The Company has in place the system of ensuring compliance with RBI Master Direction on Foreign Investment in India and for certification from the Statutory Auditors of the Company on an annual basis.

29. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

30. GENERAL

Your Directors state that during the financial year 2017-18:

1. The Company did not accept/renew any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under and as such, no amount of principal or interest was outstanding as on the balance-sheet date.

2. The Company has redeemed Non Convertible debentures of Rs.500 million on December 30, 2017.

3. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

4. The Company has not issued any sweat equity shares during the year.

5. There are no significant and material orders passed against the Company by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.

31. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the government, regulators, stock exchanges, other statutory bodies, Companyâs bankers and employees for the assistance, cooperation and encouragement extended to the Company.

Your 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 in the Company to scale new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as shareholders is also greatly valued. Your Directors look forward to your continuing support.

For and on behalf of the Board

Nirmal Jain

Chairman

DIN: 00010535

Place : Mumbai

Date : May 3, 2018

Mar 31, 2017

Dear Shareholders,

The Directors present the Twenty Second Annual Report of IIFL Holdings Limited (âyour Companyâ) together with the Audited Financial Statements for the financial year ended March 31, 2017.

1. FINANCIAL RESULTS

A summary of the financial performance of your Company and its major subsidiaries/associates, for the financial year ended March 31, 2017 is as under:

(Rs. in Million)

Name of Company	Revenue	Profit after tax
Consolidated	49,248.83	8,222.76
IIFL Holdings Limited	1,923.37	1,567.78
India Infoline Finance Limited	22,642.24	3,427.28
India Infoline Housing Finance Limited	9,049.75	835.58
Samasta Microfinance Limited	328.45	8.09
IIFL Wealth Management Limited	4,524.71	864.38
India Infoline Limited	5,083.99	760.00
IIFL Wealth Finance Limited	4,614.72	1,003.86
IIFL Real Estate Limited ( Formerly IIFL Facilities Services Limited )	1,312.29	69.39
IIFL Asset Management Limited	861.94	148.85
5paisa Capital Limited (Formerly IIFL Capital Limited)	74.67	(104.45)
IIFL Asset Management (Mauritius) Limited	663.25	350.69
India Infoline Media and Research Services Limited	569.40	451.51
India Infoline Insurance Brokers Limited	321.76	115.86
IIFL Capital Pte. Limited	239.26	31.20
India Infoline Commodities Limited	159.87	37.14
IIFL Distribution Services Limited	144.41	0.67
IIFL Capital Inc.	89.77	6.82
IIFL Private Wealth Management (Dubai) Limited	78.59	19.20
IIFL Securities Pte Limited	99.84	10.10
IIFL Investment Adviser and Trustee Services Limited	99.28	3.47
IIFL Wealth (UK) Limited	66.88	0.001
IIFL Alternate Asset Advisers Limited	57.01	9.30
IIFL Private Wealth Hong Kong Limited	20.24	3.75
Others	331.34	68.26
Inter Company Adjustments	(4,108.20)	(1465.97)

Consolidated Financial Results

A summary of the consolidated financial performance of your Company, for the financial year ended March 31, 2017, is as under:

(Rs.in Million)

Particulars	2016-2017	2015-2016
Gross total income	49,248.83	39,626.43
Profit before interest, depreciation and taxation	33,726.00	25,891.51
Interest and financial charges	20,922.00	16,799.95
Depreciation	539.71	660.82
Profit before tax (from Continuing Operations)	12,264.29	8,430.74
Taxation - Current	4,215.18	2,915.53
- Deferred	(283.32)	(79.11)
- Short or excess provision for income tax	86.27	41.77
Net profit for the year (from Continuing Operations)	8,246.16	5,552.55
Profit/(loss) before tax from Discontinuing Operation	(23.40)	(4.47)
Net profit before minority interest	8,222.76	5,548.08
Less: Share of Profit to Minority Shareholders	1,361.87	436.32
Net profit after minority interest	6,860.89	5,111.76
Less: Minority interest	730.37	1,023.97
Less: Appropriations
Dividend	1,449.62	1,613.65
Dividend Distribution Tax	291.04	286.88
Transfer to Special Reserve	1,082.40	703.98
Transfer to Debenture Redemption Reserve	830.15	1,429.41
Transfer to Capital Redemption Reserve	1,500.00	-
Deferred tax Liability	14.81	5.02
Add: Adjustment arising out of Liquidation of Subsidiary	-	55.94
Add: Balance brought forward from the previous year	5,579.16	5,474.37
Balance to be carried forward	6,541.66	5,579.16

* Previous periods figures have been regrouped / rearranged wherever necessary

Standalone Financial Results:

A summary of the standalone financial performance of your Company, for the financial year ended March 31, 2017, is as under:

(Rs. in Million)

Particulars	2016-2017	2015-2016
Gross total income	1,923.37	2,114.10
Profit before interest, depreciation and taxation	1,804.61	1,973.11
Interest and financial charges	67.92	63.45
Depreciation	5.83	0.88
Profit before tax	1,730.86	1,90 8.78
Taxation - Current	84.91	159.63
- Deferred	13.93	24.87
- Short or excess provision for income tax	40.84	-
Profit/(loss) after Tax from Continuing Operation	1,591.18	1,724.28
Profit/(Loss) after Tax from Discontinuing Operation	(23.40)	(4.47)
Profit/(Loss) for the year	1,567.78	1,719.81
Less: Appropriations		-
Interim Dividend	1,429.19	1,340.80
Dividend Distribution Tax	0.64	-
Transfer to Debenture Redemption Reserve	41.90	42.01
Add: Balance brought forward from the previous year	2,214.13	1,877.13
Balance to be carried forward	2,310.18	2,214.13

* Previous periods figures have been regrouped / rearranged wherever necessary

2. REVIEW OF BUSINESS AND OPERATIONS AND STATE OF YOUR COMPANYâS AFFAIRS

During the year, your Companyâs total income, on a consolidated basis, increased to Rs.49,249 million, up 24% year-on-year (y-o-y). Profit before tax increased to Rs.12,240 million, up 45% y-o-y and Profit after tax before minority interest increased to Rs.8,223 million, up 48% y-o-y.

The Companyâs financial services business is well diversified consisting of NBFC business which also includes the newly acquired micro finance business constituting 46%, Housing Finance business constituting 18%, Wealth Management business constituting 22%, and capital markets and other businesses comprising of investment banking, equity broking and related income constituting 14% of the groupâs total income.

During the year, the income from the NBFC business has increased by 14% y-o-y to Rs.31,651 million. This was driven by growth in the loan AUM by 14% from Rs.195 billion in FY16 to Rs.223 billion in FY17. The retail home loan business witnessed robust growth of 55% and the home loan book grew to Rs.81,924 million as of March 31, 2017 as against Rs.52,843 million in the previous year. During the year, income from the Wealth Management business witnessed significant growth of 83% y-o-y to reach Rs.10,822 million and assets under advice, distribution and management increased by 51% y-o-y to Rs.1,201 billion. The Company through its step down subsidiary i.e. IIFL Asset Management Limited manages over Rs.86 billion of AIF Assets, making it one of the largest AIF platforms in the country. Income from Capital Market and Investment Banking business increased by 3% y-o-y to Rs.5,672 million. Other income stood at Rs.124 million.

3. MACROECONOMIC OVERVIEW

India remains one of the fastest growing economies in the world. According to the Central Statistical Officeâs (CSO) revised estimates, Indiaâs GDP growth remained steady at 7.1% in FY17 with the third quarter registering a growth rate of 7% y-o-y despite the effects of demonetisation. Certain macroeconomic indicators like automobile sales, export traffic and unemployment suggest that the economy is steadily recovering from the impact of demonetisation, announced on 8th November, 2016, with the RBI forecasting GDP growth at 7.4% in FY18.

Consumer inflation moderated to 4.5% in FY17 versus 4.9% in FY16 (Ministry of Statistics and Programme Implementation, 2017) and is likely to remain below 5% in FY18. RBI cut policy rates by 50 bps through the course of FY17. Low commodity prices have helped push current account deficit to less than 1% of GDP The Central Government remains on the path of fiscal consolidation and is projected to reduce fiscal deficit to 3.2% of GDP in FY18 from 3.5% in FY17. However, state finances have been worsening and maintaining FRBM prescribed limits of fiscal deficit would be challenging due to UDAY scheme, Pay Commission implementation and the recent trend of farm loan waivers in some states.

Government continues to make efforts to revive investment cycle and is spending on building physical infrastructure like road, rails etc. Government has been able to revive many stalled projects in the public sector; however, private sector investments remain weak given low capacity utilization and leveraged balance sheets. The government continued with further liberalized FDI and FPI investments, whereby placing most of the sectors under automatic route and very few sectors under approval route. Overall FDI inflows had increased to $ 60.08 billion during the year 2016-17. The government has further liberalized foreign investments and recently abolished the Foreign Investment Promotion Board (FIPB). We are on the verge of one of the most important reform measures in the country - the transition to the Goods and Services Tax (GST) from 1st July, 2017. The GST will unify India into a single market thereby simplifying the compliance process, broadening the tax base and improving productivity. While there remains a possibility of disruption in the short run, given the scale of change, recent experience with the demonetization exercise suggests that the disruption to economy from GST implementation, if any, is likely to be small and short lived. The long-term potential from GST is immense.

4. DIVIDEND ON EQUITY SHARES

During the year 2016-17, Company declared and paid an interim dividend of Rs.4.50 per equity share (i.e. 225% of face value of Rs.2/- per share). This led to an outgo of Rs.1,429 million owing to dividend (excluding dividend distribution tax). The same is considered as final. The total dividend paid during the financial year 2015-16 was Rs.4.25/- per share which includes a special dividend of Rs.1.25/- per equity share to commemorate a decade of listing.

During the year, unclaimed dividend pertaining to F.Y. 2009-10 of Rs.602,134 and Rs.1,176,922 pertaining to Interim Dividend 1 and Interim Dividend 2 respectively was transferred to the Investor Education & Protection Fund.

5. SCHEME OF ARRANGEMENTS

Demerger of 5paisa digital Undertaking

The Board of Directors of your Company at their meeting held on September 30, 2016 considered and approved the proposed demerger of Rs.5Paisa Digital Undertakingâ from IIFL Holdings Limited (âIHLâ) into 5Paisa Capital Limited (â5PCLâ), a 100% subsidiary of IHL engaged in distribution of financial services and broking, as follows:

a. The proposed demerger would be through a Scheme of Arrangement under section 230-232 of the Companies Act, 2013 between IHL and 5PCL and their respective shareholders. Post demerger, 5PCL will be listed on BSE Limited (âBSEâ) and National Stock Exchange of India Limited (âNSEâ). The appointed date of the demerger is October 01, 2016 and the Scheme shall be effective after filing the order of the National Company law Tribunal (âNCLTâ) with the Registrar of Companies.

b. As per terms of the proposed scheme of Arrangement, the consideration for the demerger is by way of allotment of equity shares by 5PCL to the shareholders of IHL in the ratio of 1 share of Rs.10 each of 5PCL for every 25 shares of IHL held by the shareholders of IHL, as per the share entitlement ratio issued by the Independent Chartered Accountant i.e.M/s. SSPA & Co. and fairness opinion provided by Category I Merchant Banker i.e. M/s. Keynote Corporate Services Limited.

c. The proposed arrangement does not involve any change in the capital structure of IHL. The shareholding of 5PCL will be a mirror image of the shareholding of IHL as on record date to be determined after the approval of Scheme of Arrangement by NCLT.

The Company has received No objection from SEBI, BSE and NSE on the draft Scheme of Arrangement. Pursuant to the order of NCLT and upon approval of the Shareholders of the Company, the Scheme will become effective.

Demerger of IIFL Real Estate Limited

The Board of Directors of IIFL Holdings Limited at its meeting held on January 25, 2017 considered and noted the proposed draft Scheme of Arrangement envisaging the demerger of Real Estate Advisory services undertaking from IIFL Real Estate Limited (Formerly IIFL Facilities Services Limited and IIFL Realty Limited) (âIRELâ), a wholly-owned-subsidiary of the Company into another wholly-owned-subsidiary i.e. India Infoline Insurance Services Limited, in terms of the provisions of Companies Act, 2013. The above proposal does not envisage any change in the capital structure of IIFL Holdings Limited or its interest in the aforesaid Subsidiaries. The appointed date of the proposed Scheme of Arrangement is April 01, 2017. The aforesaid scheme is subject to necessary regulatory approvals including NCLT. IREL has since filed Scheme with NCLT and is awaiting final order.

Pursuant to the said demerger, IRELâs primary business and income will be from rentals of commercial real estate assets owned by it. The proposed restructuring is to facilitate IREL as an eligible SPV for investments under the proposed IIFL REIT, subject to the required Board, SEBI and other regulatory approvals.

Merger of IIFL Properties Private Limited

The Companyâs step down subsidiary under IIFL Real Estate Limited (Formerly IIFL Facilities Services Limited and IIFL Realty Limited) (âIRELâ) namely IIFL Properties Private Limited was holding a real estate property. NCLT vide its order dated March 30, 2017 has approved and sanctioned the Scheme of Arrangement for the merger of IIFL Properties Private Limited with IREL for consolidation of the same. The merger has been effected w.e.f. April 01, 2015.

6. KEY INITIATIVES/DEVELOPMENTS

i. Strategic Investment by CDC Group Plc in India Infoline Finance Ltd. (NBFC) Subsidiary

CDC Group Plc, UK (âCDCâ], the United Kingdomâs government-owned development finance institution invested about Rs.10 billion in India Infoline Finance Ltd (âIIFL Financeâ), a Subsidiary of the Company, by way of issuance of 43,33,409 Compulsorily Convertible Preference share (âCCPSâ) and 100 Equity shares. Upon Conversion of CCPS, CDC shall hold a stake of 15.45% of the total outstanding equity share capital of the IIFL Finance on a fully diluted basis. CDCâs investment will help IIFL Group in expanding the financing business and address the capital needs of under-served segments through diversified offerings.

ii. IIFL Wealth Finance Limited

I IFL Wealth Finance Limited (âIIFLW Financeâ), a non-deposit taking systemically important Non-Banking Finance Company (NBFC-ND-SI) registered with the Reserve Bank of India, is a wholly owned subsidiary of IIFL Wealth Management Limited (âIIFLWâ). IIFLW Finance provides loan against securities, wherein, includes capital market financing, promoter funding, margin funding, IPO financing and loan against property to ultra-high net worth individuals and corporate clients of IIFLW IIFLW has invested Rs.9000 million out of investments received from General Atlantic towards equity into IIFLW Finance during the financial year 2015-16 and has further invested Rs.620 million during the financial year 2016-17. IIFLW Finance commenced its lending business to HNIâs and Corporates in February 2016 and has grown its business during the year with the tota l loan asset(s) as on March 31, 2017 to Rs.36,000 million. IIFLW Finance has issued non-convertible debentures amounting to Rs.22.46 billion and commercial papers amounting to Rs.33.70 billion as on March 31, 2017.

iii. Investment Banking

Fiscal 2017 has been a landmark year for investment banking. IIFL Holdings Limited completed 21 transactions (the largest number of Investment Banking transactions executed by IIFL in its history in a single financial year) viz. IPOs, QIPs, NCD placements, open offers, private equity advisory and pre IPO placements. In all, IIFL was involved in capital raising and advisory transactions of ~Rs.377 billion including 5 equity IPOs.

In fiscal 2017, IIFL completed a number of large transactions with marquee clients. IIFL was involved in the largest QIP of FY2016-2017 (Motherson Sumi Systems Limited aggregating to Rs.19,934 million) and 2017 YTD (Yes Bank Limited aggregating to Rs.49,067 million). IIFL was ranked #2 in terms of amount raised through QIPs in fiscal 2017. IIFL was one of the book running lead managers in the Rs.60,568 million IPO of ICICI Prudential Life Insurance Company Limited, the first IPO in the insurance sector and the largest IPO in 6 years. Additionally, IIFL completed the Rs.100 billion public issue of NCDs of Dewan Housing Finance Corporation Limited, the largest public issue of NCDs by a private sector company till date.

IIFL has a robust pipeline of investment banking transactions spanning across a number of product categories, which are in different stages of execution.

IIFL continues to diversify its product/service offerings and invest in people, processes and technology. Our efforts and investments into this business are beginning to pay off. Clients continue to value IIFLâs focus and commitment and consider us as their trusted advisor.

iv. Samasta Microfinance Limited

During the March 2017, India Infoline Finance Limited (âIIFL Financeâ) , a subsidiary of the Company, has acquired control and management of Samasta Microfinance Limited [âSamastaâ], a Non Banking Finance Company -Micro Finance Institution [NBFC-MFI] registered with RBI and based in Bangalore after obtaining all regulatory and other approvals. This acquisition is through purchase of equity shares from its erstwhile shareholders as well as additional capital investment of Rs.50 Cr. in March 2017 by IIFL. Upon the acquisition, Samasta became a step down subsidiary of the Company with its shareholding standing at 95.22% as on March 31, 2017.

Samasta began operations as an MFI in March 2008 with an aim to provide financial services to the financially weaker sections in the Southern and Western states of India. It operates in Tamil Nadu, Karnataka, Maharashtra and Goa through 70 branches.

Samastaâs income from operations increased by around 66% to Rs.320 million during the year ended March 31, 2017.

The acquisition of Samasta will help IIFL in entering into the growing micro finance segment and extend its wide ranging financial services to their large customer base.

v. Other Financial Services

During the year ended March 31, 2017, IIFL Wealth Finance Limited and India Infoline Housing Finance Limited, the step down subsidiaries of the Company have obtained Corporate Insurance Agency license from IRDA for the distribution of insurance products.

During the financial year ended March 31, 2017, IIFL Wealth Management Limited has obtained membership of NSE and BSE and also become a depository participant of CDSL and NSDL for providing separate services to niche High Net-Worth Individuals and wealth management clients. The Wealth Broking has commenced operations and migration of clients under this platform is under process.

vi. 5Paisa- Digital Undertaking

5Paisa Capital Ltd (â5PCLâ) is a Wholly Owned Subsidiary of IIFL Holdings Ltd. 5PCL is engaged in providing an online technology platform for trading in National Stock Exchange of India Limited and BSE Limited through web based trading terminal, mobile application and a state-of-the-art Call and Trade Unit. 5PCL is also a SEBI approved Research analyst, a Depository Participant with CDSL and registered with AMFI for distribution of mutual funds. 5PCL provides a wide range of financial services to its customers including depository services, distribution of mutual funds, bonds and debentures, Equity and Mutual fund research etc through its technology based platforms.

5PCL invested in Online Marketing, Branding and IT. Also, it has developed Robo Advisory, an automated Mutual Fund advisory platform, which has got a very good response. 30% of 5PCLâs mutual fund transactions are now happening through the Robo advisory platform. This year also saw 5PCLâs new mobile application crossing 100 thousand downloads on Play store with a very good rating of 4.2.

The Board of Directors of IIFL Holdings Limited and 5paisa Capital Limited have approved the Scheme of Arrangement for demerger of 5paisa digital undertaking of IIFL Holdings Limited into 5paisa Capital Limited on September 30, 2016. With a view to giving a segregated focus on the digital way of doing trading and distribution services, which is emerging as a new segment and possesses the potential to grow exponentially in the coming years, especially with the spread of internet and mobile penetration, 3G/4G data services across the country under the DIY (do-it-yourself) model. Further to SEBI, NSE and BSE approvals, the scheme is pending for approval from NCLT. The appointed date of the demerger is October 01, 2016 and the Scheme shall be effective after filing the order of the NCLT with the Registrar of Companies.

vii. Asset Management

During FY 2016-2017, the revenues of IIFL AMC grew by 30.3% to Rs.861.9 million and Profit After Tax growth was 148.26%.

The total assets managed by IIFL AMC under Mutual Fund, AIF and Portfolio Management Services has increased to Rs.86,980 million as on March 31, 2017 vis-s-vis Rs.55,230 million as on March 31, 2016. Under IIFL Mutual Fund Platform, the assets under management have increased from Rs.4,924.6 million to Rs.6,252.3 million. AIF assets saw a growth of 93.17% on a YoY basis to more than Rs.73,000 million as on MarchRs.17 end. Significant ramp-up was seen during the year on the back of the following new diverse product launches:

1) Category II Alternative Investment Funds:

a. IIFL Special Opportunities Fund

b. IIFL Real Estate Fund Domestic Series 4

c. IIFL Select Equity Fund

d. IIFL Income Opportunities - Series Debt Advantage

e. IIFL Income Opportunities - Series Regular Income

2) Category III Alternative Investment Funds:

a. IIFL Yield Enhancer Fund

b. IIFL Phoenix Cash Opportunities Fund

c. IIFL Focused Equity Strategies Fund

d. IIFL Regular Income Fund

e. IIFL Cash Opportunities Fund II

f. IIFL Fixed Income Plus Fund

g. IIFL Debt Advantage Fund

h. IIFL Re Organise India Equity Fund

i. IIFL Perpetual Bond Fund - Series 1

j. IIFL India Opportunities Fund - Series 1, 2 & 3

During the year, the Company took initiatives to diversify and strengthen its distribution. IIFL AMC got empaneled with several large banks and wealth management firms enabling IIFL AMC to significantly enhance itâs reach and distribute itâs products widely. The Company has also significantly strengthened its sales team and mid-office team in order to service investors better.

viii. Corporate Social Responsibility

The Corporate Social Responsibility Committee has formulated and recommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companyâs website at the link: https:// www.iifl.com/aboutus/iifl-csr-policy.

The IIFL group has identified following focus areas for Corporate Social Responsibility (âCSRâ) engagement through India Infoline Foundation, a section 8 Company:

a. Girl child illiteracy eradication program for out of school and illiterate girls in Rajasthan.

b. Improving the quality of education in Government schools through technological interventions.

c. Financial Literacy and Financial Inclusion

d. Preventive Health

During the financial year, your Company deployed 2 % of its average net profits (computed as per the relevant provisions of Companies Act, 2013) of the preceding three years on CSR projects. At the group level, besides the Company, nine subsidiary companies came under the purview of the provisions for CSR for the year. During the fiscal year 2016-17, the group made a total deployment of Rs.135.05 million into CSR activities.

IIFLâs CSR has gained the necessary momentum and has implemented large scale projects, which will have substantial sustainable long term impact. The capabilities, systems and processes needed to take up big activities in an organised manner are also in place. Going forward, the Company will consolidate these projects to get a much bigger and wider impact.

ix. Investor Conference/Events

IIFLâs Enterprising India Global Investorsâ Conference

IIFLâs Eighth Enterprising India Conference was held from the 21st to 23rd of February 2017. 109 companies and 600 investors participated in the event which also hosted 23 specialist speakers. The participating companies had an aggregate market value of US$ 866 bn and represented all major business sectors. The event happened against the backdrop of local and global economic uncertainty and the specialist speakers provided invaluable insights on major developments in the economy including demonetization and GST. The well attended conference suggested overall interest in India to be high among foreign investors and expectations of the economy to recover well from the effects of demonetization to be high.

The event was well timed to provide learned insights on the budget 2017 and the outlook for the new financial year.

Express Addas

PACT

Positive Action Changes Things 2016 -included a series of client events held in London & Dubai, and was attended by more than 250 clients collectively. Speakers such as Dr. Shashi Tharoor and leading fund managers from India addressed the audience, while stand-up comedian Vir Das tickled their funny bone.

Off The Cuff

OTC has Shekhar Gupta in conversation with a distinguished guest in the presence of a notable, invited audience. After the initial dialogue between the guest and the moderator, OTC is open to the audience to question and engage with the guest. The idea is to break through the clutter and noise of existing debates on television and other platforms, and bring out an engaging, constructive discussion; while also keeping live audiences involved throughout. OTC is recorded and telecast on NDTV 24X7 and NDTV Prime at a later date in the month.

Ramnath Goenka Lecture Series

The Ramnath Goenka Lecture, in the spirit of the founder and the newspaper, aims to deepen understanding of change, inspire debate and enrich public discourse through the power of ideas.

The lecture was launched by Dr Raghuram Rajan, then Governor, Reserve Bank of India.

x. Awards and Recognitions

The following awards were conferred in FY17: o ET Best BFSI Brands Recognition o The prestigious Economic Times Awards for Corporate Excellence shortlisted IIFL in the Emerging Company of The Year Award category o Golden Peacock Award for Corporate Social Responsibility - 2016 o BSE Skoch Order of Merit Award for Innovative Deployment of Technology Within Investing Services Space

- ET NOW Dealing Room Heroes - 10 IIFL Employees Awarded for April - September and October - March period.

- Finance Asia -- Deal of the Year for India Awards -for ICICI Prudential Life Insuranceâs $912 million IPO

- Best Independent Wealth Management Team, India at Capital Finance International o Best Wealth Management Firm, India at APAC Insider Investment Awards o I ndia Infoline Ltd received the NSDL Star Performer âLeader in Go Green Initiative -1st Positionâ Award. This award was given to us in recognition of DP participant executing maximum no of digital transactions with NSDL o IIFL Markets mobile app won Silicon Valley Business Awards 2016 for Best Overall App o IIFL Markets mobile app won Silicon Valley Business Awards 2016 for Best Finance and Management o IIFL Markets wins Best Technological Innovation in Capital Markets Space at Zee Business Market Excellence Awards in 2016 for IIFL Markets Application.

- Best Private Banking Services - Overall by Euro-money Private Banking and Wealth Management Survey, 2017

- Best Net-worth-specific services - Euromoney Private Banking and Wealth Management Survey, 2017

- Best Family Office Services - Euromoney Private Banking and Wealth Management Survey, 2017

- Best Research and Asset Allocation Advice -Euromoney Private Banking and Wealth Management Survey, 2017

- Best Succession Planning Advice and Trusts -Euromoney Private Banking and Wealth Management Survey, 2017

- Best Innovative Technology - Back Office Systems Euromoney Private Banking and Wealth Management Survey, 2017

- Best Wealth Manager - India Domestic by Asian Private Banker Awards of Distinction, 2016

- Best Private Bank, India by Global Finance Best Private Bank Awards 2017

- Best Performing National Financial Advisor - Wealth Distributor Award by CNBC & UTI Financial Advisors Award 2016

- Best India Start-Up Fund - Seed Venture Fund at Alternative Investment Awards

- Best Online Wealth Management Experience at The Asset Triple A Digital Enterprise o Digital Innovation Champion Award - CIO Crown 2016.

- Drivers of Digital Award 2016 - Special Jury Mention. o Gold Loan Digital Transformation was chosen as the Best Top 20 Project in 5th BFSI Innovation and Technology Summit - 2016. o BSE Skoch Awards for Innovation and Meritorious CSR

- IIFL Foundation received Skoch Blue Economy Order of Merit Award. IIFL Foundationâs projects were also adjudged as Top 100 projects in India

- Bureaucracy Today - CSR Excellence Awards to IIFL Foundation

- www.indiainfoline.com won the Best Website in Banking & Investment category from Website of the Year India, 2016. o IIFL Corporate Communications team was shortlisted among the top five for Fulcrum Awards in communication o Prayesh Jain of IIFL Wealth Management won âBest Auto Analystâ Award at Zee Business Market Excellence Awards 2016.

- Bhavesh Gandhi of IIFL Wealth Management won âBest Pharma Analystâ Award at Zee Business Market Excellence Awards 2016.

7. SHARE CAPITAL

During the year under review, the total share capital of the Company has increased from Rs.63,30,73,706/- to Rs.63,58,16,386/- pursuant to allotment of 13,71,340 equity shares of Rs.2/- each under Employee Stock Option Scheme(s) of the Company to the eligible employees.

8. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

During the year under review 7,49,800 stock options under ESOS 2008 granted to employees have lapsed and the same have been added back to the pool, which can be used for further grant. Further, there have been no stock options granted to the employees during the year under the Employee Stock Option Scheme(s).

There is no material change in Employeesâ Stock Option Scheme during the year under review and the Scheme is in line with the SEBI (Share Based Employee Benefits) Regulations, 2014 (âSBEB Regulationsâ). The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SBEB Regulations and the resolution passed by the members. The certificate would be placed at the Annual General Meeting for inspection by members. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the SEBI (Share Based Employee Benefits) Regulations, 2014 are provided on the website of the Company www.iifl.com and the same is available for inspection by the members at the Registered Office of the Company on all working days, except Saturdays and Sundays (including Public Holidays), during business hours up to the date of the Meeting.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of investments made, loans given, guarantees given and securities provided along with the purpose for which the loan or guarantee or security was proposed to be utilized by the recipient are given in the standalone financial statement (please refer to Note 10,16 & 28 to the standalone financial statement).

10. SUBSIDIARY COMPANIES

As on March 31, 2017, the Company had 32 (Thirty Two) subsidiaries (including step down subsidiaries)/Associates located in India and overseas. During the year, India Infoline Finance Limited, a subsidiary of the Company has acquired controlling stake in Samasta Microfinance Limited- a Non Banking Finance Company - Micro Finance Institution [NBFC-MFI] registered with RBI and based in Bangalore. Ayusha Dairy Private Limited is a wholly-owned subsidiary of Samasta Microfinance Limited. Further, IIFL Wealth Management Ltd, a subsidiary of the Company, transferred its shareholding (71%) in India Alternatives Investment Advisors Private Limited to its private shareholders.

As per the provisions of section 134 and 136 of the Companies Act, 2013 read with applicable Rules, Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and applicable Accounting Standards, the Board of Directors had at their meeting held on May 04, 2017 approved the consolidated financials of all the subsidiaries of the Company along with the Companyâs financial statements. Copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary companies are not attached to the accounts of the Company for the financial year 2016-17. The Company will make these documents/details available upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and at the registered offices of the concerned subsidiaries i.e. except on Saturdays, Sundays and Public Holidays. The Annual Report of all the subsidiaries will be uploaded on the website of the Company. As required by Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Accounting Standard - 21 (AS 21) issued by the Institute of Chartered Accountants of India, the Companyâs consolidated financial statements included in this Annual Report incorporate the accounts of its subsidiaries, associates and joint ventures. A report on the performance and financial position of each of the subsidiaries, associates and joint ventures companies as per Companies Act, 2013 is provided in the prescribed Form AOC-I as Annexure A of the Consolidated Financial Statement and hence not repeated here for the sake of brevity.

For the financial year 2017-18, the following are the Material Subsidiaries of the Company:

1. India Infoline Finance Limited

2. IIFL Wealth Management Limited

3. IIFL Wealth Finance Limited

4. India Infoline Housing Finance Limited

The policy on determining the material subsidiary is available on the website of the Company at www.iifl.com.

11. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report, in terms of Regulation 34(2) (f) of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015, describing the initiatives taken by IIFL Group from an environmental, social and governance perspective is attached as part of the Annual Report.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Directors:

The Board consists of Mr. Nirmal Jain and Mr. R. Venkataraman as Executive Directors of the Company in their capacity of Chairman and Managing Director respectively. Mr. Nilesh Vikamsey, Mr. A. K. Purwar, Mr. Kranti Sinha, Dr S. Narayan and Ms. Geeta Mathur are Independent Directors and Mr. Chandran Ratnaswami is a non-executive Director of the Company.

In accordance with Section 152 of the Companies Act, 2013 (âActâ) read with Article 157 of the Articles of Association of the Company, Mr. Nirmal Jain is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment. The Board recommends the same for shareholdersâ approval.

b. Key Managerial Personnel:

Mr. Nirmal Jain - Chairman, Mr. R. Venkataraman - Managing Director, Mr. Prabodh Agrawal - Chief Financial Officer and Mr. Gajendra Thakur - Company Secretary are the Key Managerial Personnel as per the provisions of the Companies Act, 2013 and rules made thereunder. None of the Key Managerial Personnel has resigned or appointed during the year under review.

The Remuneration and other details of the Key Managerial Personnel for the year ended March 31, 2017 are mentioned in the Extract to the Annual Return in Form MGT-9 which is attached as âAnnexure IIâ and forms a part of this report of the Directors.

14. MEETING OF DIRECTORS & COMMITTEE/BOARD EFFECTIVENESS

Meetings of the Board of Directors

The Board met 6 (Six) times during the year to discuss and approve various matters including financials, appointment of auditor, declaration of dividend, review of audit reports and other board businesses. For further details please refer to the report on Corporate Governance.

Committees of the Board

In accordance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board constituted the following Committees: o Audit Committee

- Nomination and Remuneration Committee o Corporate Social Responsibility Committee

- Stakeholders Relationship Committee

- Risk Management Committee

Audit Committee:

The Audit Committee comprises of Mr Nilesh Vikamsey, Mr Kranti Sinha, Ms Geeta Mathur and Mr R. Venkataraman. The role, terms of reference and powers of the Audit Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Committee met during the year under review and discussed on various matters including financials, audit reports and appointment of auditors. During the period under review, the Board of Directors of the Company accepted all the recommendations of the Audit Committee.

The terms of reference of Audit Committee and other details thereof has been provided in the Corporate Governance Report.

Nomination and Remuneration Committee:

The Nomination and Remuneration Committee comprises of three Independent Directors with Mr Kranti Sinha as the Chairman of the Committee, Mr Nilesh Vikamsey and Mr A K Purwar as members of the Committee.

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, KMP, senior management personnel of the company. The said policy is stated in the Corporate Governance Report of the Company. The details of Committee meeting are provided in the Corporate Governance Report.

Corporate Social Responsibility Committee:

As per the provision of Section 135 of the Companies Act, 2013, the Company has constituted Corporate Social Responsibility (CSR) Committee, comprises of Mr Nilesh Vikamsey, Mr Nirmal Jain and Mr R. Venkataraman. The Committee has approved CSR Policy of the Company. The group has set-up India Infoline Foundation (generally referred as âIIFL Foundationâ) a Section 8 Company under the Companies Act, 2013, which will act as the principal arm to undertake CSR initiatives on behalf of the IIFL Group. The details of CSR Committee meeting are provided in the Corporate Governance Report. The policy on corporate social responsibility is available on the website www.iifl.com. The Annual Report on Corporate Social responsibility is attached as âAnnexure Iâ.

Stakeholders Relationship Committee:

In compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013, the Company has constituted a Stakeholders Relationship Committee. The Committee comprises of Ms. Geeta Mathur, Independent Director as the Chairperson, Mr Nirmal Jain and Mr R. Venkataraman, Executive Directors as the Members. The details of the Stakeholders Relationship Committee meeting are given in the Corporate Governance Report.

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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same has been provided in the Corporate Governance Report.

The Company received 17 complaints from investors under SEBIâs SCORES portal. All complaints were redressed to the satisfaction of the investors. No complaints were pending either at the beginning or at the end of the year.

Risk Management Committee:

The Risk Management Committee comprises of Mr. A. K. Purwar, Independent Director, Mr Nilesh Vikamsey, Independent Director and Mr Nirmal Jain, Executive Director. The details of the Risk Management Committee meeting is provided in the Corporate Governance Report.

Board Effectiveness

Familiarization Program for the Independent Directors

In compliance with the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a Familiarization Programme for Independent Directors to familiarize them with the working of the Company, their roles, rights and responsibilities vis-a-vis the Company, the industry in which the Company operates, business model etc. Details of the Familiarization Programme are explained in the Corporate Governance Report and are also available on the Companyâs website at http://www.iifl.com.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI Circular no SEBI/CFD/CMD/CIR/P/2017/004 dated January 05, 2017, the Board of Directors has carried out an annual performance evaluation of its own performance, the committee and the Directors individually including Independent Directors based out of the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by Nomination and Remuneration Committee (âNRCâ). The evaluation process, manner and performance criteria for independent directors in which the evaluation has been carried out by is explained in the Corporate Governance Report.

The Board considered and discussed the inputs received from the Directors. Also, the Independent Directors at their meeting held on March 17, 2017 reviewed the following:

- Performance of Non-Independent Directors and the Board as a whole o Performance of the Chairperson of the Company

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

The evaluation process endorsed the Board Membersâ confidence in the ethical standards of the 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.

Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director under section 149(7) of the Companies Act, 2013 that he/she meets the criteria of independent laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

15. DIRECTORSâ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

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

b) the directors had 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 the Company at the end of the financial year and of the profit of the Company for that period;

d) the directors had prepared the annual accounts on a going concern basis;

e) t he Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

16. RISK MANAGEMENT

Your Directors have in place Risk Management Committee to assist the Board in (a) overseeing and approving the companyâs enterprise wide risk management framework; and (b) overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed. There is an adequate risk management infrastructure in place capable of addressing those risks.

The Company has in place a Risk Management Policy and introduced several process improvements to internal controls systems and processes to drive a common integrated view of risks and optimal and mitigation responses. This integration is enabled through suitable co-ordination across group wide Risk Management, Internal Control and Internal Audit methodologies and processes.

17. INTERNAL FINANCIAL CONTROLS

18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The 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/ Shareholders, reporting and disclosure requirements in compliance with Companies Act, 2013 and provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the year, the Company has not entered into any contract / arrangement / transaction with related parties, which could be considered material in accordance with Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the policy of the Company on materiality of related party transactions. The policy for determining âmaterialâ 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 the Companyâs website www.iifl.com. You may refer to Note no. 34 to the financial statement, which contains related party disclosures. Since all related party transactions entered into by the Company were on an armâs length basis and in the ordinary course of business and the Company had not entered into any material related party contracts, Form AOC-2 disclosure is not required to be provided.

19. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return of the Company in form MGT - 9 is annexed herewith as âAnnexure - IIâ.

20. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

21. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for the year 2016-17. The Auditor had conducted the audit and their report thereon was placed before the Board. The report of the Secretarial Auditor is annexed herewith as âAnnexure - IIIâ. There are no qualifications or observations in the Report.

22. 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 âAnnexure -IVâ to and forms part of this Report.

23. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

I n Compliance of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. The Company has disclosed the policy at the website at https://www.iifl.com/aboutus/policies.

24. PREVENTION OF SEXUAL HARASSMENT

Your Directors further state that the during the fiscal year 2016-17, there were no complaints received 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 programme against sexual harassment carried out:

The Company has conducted an online training for creating awareness against the sexual harassment against the women at work place.

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

25. PARTICULARS OF EMPLOYEES

26. STATUTORY AUDITORS

As per the provisions of Section 139 of the Companies Act 2013, M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai (Firm Registration Number: 109983W), will conclude their term as the Statutory Auditors from the close of the forthcoming Annual General Meeting of the Company.

The Board of Directors places on record its appreciation for the services rendered by M/s. Sharp & Tannan Associates as the Statutory Auditors of the Company.

Subject to the approval of the members, the Board of Directors of the Company has recommended the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants (ICAI Firm Registration Number 117366W/W-100018) as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013. Membersâ attention is drawn to a Resolution proposing the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants as Statutory Auditors of the Company which is included at Item No 03 of the Notice convening the Annual General Meeting.

27. REPORTING OF FRAUDS BY AUDITORS

28. RBI/FEMA COMPLIANCE

During the year, the Reserve Bank of India vide its press release dated June 10, 2016 has notified FII/ FPI investment limit in the paid up capital of IIFL Holdings Limited to 80% under the Portfolio Investment Scheme.

Pursuant to RBI Master circular No. 15/2015-16 dated July 01, 2015, the Statutory Auditors of the Company has certified compliances with regards to Regulations on downstream investments and other FEMA provisions.

29. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices as prevalent globally. The report on Corporate Governance as stipulated under the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

30. GENERAL

Your Directors state that during the financial year 2016-17:

2. The Company has not issued equity shares with differential rights as to dividend, voting or otherwise.

3. The Company has not issued any sweat equity shares during the year.

4. There are no significant and material orders passed against the Company by the Regulators or Courts or Tribunals, which would impact the going concern status of the Company and its future operations.

31. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the government, regulators, stock exchanges, other statutory bodies and Companyâs bankers for the assistance, cooperation and encouragement extended to the Company.

For and on behalf of the Board

Nirmal Jain

Chairman

DIN:00010535

Date: May 04, 2017

Place: Mumbai

Mar 31, 2013

The Directors have pleasure in presenting the Eighteenth Annual Report along with the audited statements of accounts of your Company for the financial year ended March 31, 2013.

Financial results:

A summary of the financial performance of the Company and its major subsidiaries, for the financial year ended March 31, 2013, is as under:

(Rs. Million)

Name of Company Revenues Profit after tax

Aggregate 26,652.6 2,793.4

India Infoline Limited 5,504.7 958.1

India Infoline Finance Limited 16,939.8 1,747.5

India Infoline Housing Finance Limited 451.5 139.7

India Infoline Insurance Services Limited 31.7 4.4

India Infoline Insurance Brokers Limited 903.7 26.8

India Infoline Commodities Limited 1,044.9 90.0

India Infoline Media and Research Services Limited 1,110.3 18.2

IIFL Realty Limited 917.5 193.6

IIFL Wealth Management Limited 1,602.6 282.9

IIFL Distribution Services Private Limited 34.4 19.9

IIFL Trustee Services Limited 5.5 1.7

India Infoline Asset Management Company Limited 15.3 (24.2)

IIFL Alternate Assets Advisors Limited 135.7 8.5

India Infoline Distribution Company Limited 33.5 7.0

IIFL Securities Ceylon (Pvt) Limited 33.6 (10.1)

IIFL Inc. 89.1 (4.6)

IIFL Private Wealth (Dubai) Limited 29.5 (20.6)

IIFL Private Wealth (Mauritius) Limited 284.6 44.6

IIFL Wealth (UK) Limited 32.5 0.2

IIFL (Asia) Pte. Limited 25.0 1.2

IIFL Capital Pte. Limited 54.6 9.5

IIFL Securities Pte Limited 321.7 160.4

IIFL Private Wealth Hong Kong Limited 13.7 1.1

Inter Company Adjustments (2,973.6) (860.6)

Other Subsidiaries 10.8 (1.8)

A summary of the consolidated financial performance of your Company, for the financial year ended March 31, 2013, is as under:

(Rs. Million)

2012-13 2011-12

Gross total income 26,652.6 18,864.7

Profit before interest, depreciation and taxation 13,536.0 7,840.5

interest and financial charges 8,692.5 5,043.1

Depreciation 839.3 802.2

Profit before tax 4,004.3 1,995.2

Taxation - Current 1,420.3 835.2

- Deferred (227.2) (207.9)

- Short or excess provision for income tax 17.8 7.2

Net profit for the year 2,793.4 1,360.7

Less: Exceptional item (net of tax) - -

Net profit before minority interest 2,793.4 1,360.7

Less: Minority interest (71.4) (40.0)

Less: Appropriations

Interim Dividend (927.4) (433.6)

Dividend Distribution Tax (150.5) (70.3)

Transfer to General Reserve (306.0) (65.2)

Transfer to Special Reserve (378.0) (216.3)

Debenture Redemption Reserve (220.0) (630.0)

Less: Adjustments for Minority Interest and fair value (31.8) 69.7

Add: Additions/deductions on account of Merger 189.1 -

Add: Balance brought forward from the previous year 2,979.9 3,004.9

Balance to be carried forward 3,877.3 2,979.9

A summary of the stand-alone financial performance of your Company, for the financial year ended March 31, 2013, is as under:

(Rs. Million)

2012-13 2011-12

Gross total income 5,504.7 6,390.0

Profit before interest, depreciation and taxation 1,292.6 1,440.2

Interest and financial charges 90.9 378.6

Depreciation 132.9 314.4

Profit before tax 1,068.8 747.2

Taxation - Current 109.0 142.7

- Deferred 1.7 (29.1)

- Short or excess provision for income tax - 0.6

Net profit for the year 958.1 633.0

Less: Appropriations

Interim Dividend 883.1 433.6

Dividend Distribution tax 18.9 70.3

Transfer to General Reserve 96.0 65.2

Add: Balance brought forward from the previous year 1,801.1 1,737.2

Balance to be carried forward 1,811.6 1,801.1

Review of operations

On a consolidated basis, in the current year, your Company''s income increased by 41.3% to Rs. 26.7 bn and EBITDA increased by 73% to Rs. 13.54 bn. Profit before tax increased by 100.7% and Profit after tax before minority interest increased by 105.3% to Rs. 2.79 bn.

Equity broking and related income marginally increased by 1.2% to Rs. 5.53 bn. Our Credit and Finance business gained further momentum and increased by 66.6% to Rs. 18.17 bn contributing 68% of total revenues, in the current year. Marketing and Distribution income also grew by 18.8% to Rs. 2.89 bn. The other income stood at Rs. 71.5 mn.

Key initiatives

i. Equity Business

Qualified Depository Participant for Qualified Foreign Investor

The Company received SEBI approval as Qualified

Depository Participant (QDP) to undertake newly opened up Qualified Foreign Investor (QFI) transactions in Indian Market. Under this initiative, your Company has already sourced several investors who have made sizeable investment in Indian securities. The Company expects this segment to grow as it facilitates higher QFI transactions in coming years.

Membership of MCX Stock Exchange

The Company received membership from the newly launched MCX Stock Exchange for Cash and Derivatives Segments during the year.

ii. Fund Management Business Alternative Investment Funds

During the year, the Company as a sponsor, received approval from SEBI for newly opened up Alternative Investment Funds (AIFs) under all three categories namely, IIFL Venture Fund (Category I AIF - Venture Capital Fund), IIFL Private Equity Fund (Category II AIF) and IIFL Opportunities Fund (Category III AIF).

As AIFs, these Funds are pooled investment vehicles for HNIs and corporate investors for investing in various securities under the respective Fund. The Company''s subsidiary namely IIFL Alternate Asset Advisors Limited is the Investment Manager for these funds. Under IIFL Private Equity Fund (Category II AIF), IIFL Income Opportunities Fund was launched as a close ended debt scheme in February 2013. The Fund received an overwhelming response from large number of HNIs and corporate investors with a commitment of Rs. 6,200 mn.

We intend to launch various schemes under the above Funds as well as new AIFs in the coming future. We believe that this segment offers enormous potential for providing fund management services and opportunity for rapid growth in the coming years.

Mutual Funds

During the financial year ended March 31, 2013, IIFL Mutual Fund increased the number of its equity schemes by launching IIFL Dividend Opportunity Fund, an open ended index scheme. The scheme garnered Rs. 212.7 mn from 16,426 investors. The Fund also launched a close ended debt scheme, which mobilised Rs. 1,222.1 mn. As on March 31, 2013, IIFL Mutual Fund managed 6 schemes, with Net Assets under Management (AUM) of Rs. 3,282.3 mn as compared to Rs. 1711.3 mn as on March 31, 2012. The number of investor folios increased to 26,928 during the year, from 8,883 folios a year ago. The Fund is in the process of launching further schemes including liquid and other debt schemes, which would enable more debt participation and higher AUM.

iii. NBFC Business

During the year under review, India Infoline Finance Limited, the NBFC subsidiary of the Company, successfully completed Initial Public Offering of Subordinated Debt through Unsecured Redeemable Non-Convertible Debentures ("NCDs") of Rs. 2,500 mn with green shoe option of additional Rs. 2,500 mn. The issue received an overwhelming response and was oversubscribed in three days. The Company retained Rs. 5,000 mn through allotment of NCDs. These NCDs are listed and traded on the NSE and BSE.

During the year, the NBFC subsidiary initiated securitization and assignment of some eligible loans under the revised Securitisation & Assignment Guidelines of RBI.

During the last quarter, the Company, after extensive evaluation, commenced financing of commercial vehicles. The Company has hired a specialised and experienced team for this business. The Company expects to drive and grow this business in the coming years.

iv. Investor Conferences Institutional Investors'' conference

Your Company''s institutional research products have been well appreciated by the target investors. Your Company''s fourth Global Investors'' Conference titled ''Enterprising India-IV'' held in Mumbai in February 2013 had participation from leading corporate and eminent leaders/speakers and received an overwhelming response from global institutional investors.

Wealth Management''s Investor Summit

IIFL Wealth Management''s second Investor Summit titled ''See Clearly'', was held in Pune and Mumbai in the months of January and February, 2013 respectively, and received an equally overwhelming response.

v. Corporate Social Responsibility Financial Literacy

As part of Corporate Social Responsibility initiative, your company continued with its comprehensive financial education and awareness program called FLAME - Financial Literacy Agenda for Mass Empowerment. Under this initiative, your Company has so far successfully completed over 300 FLAME workshops for investors and students. Almost 200 schools covering over 50,000 students have enrolled for the Fin-Lites distance learning program. Our other initiatives include a comprehensive mass media campaign on financial literacy, dedicated portal and helpline and effective use of social media platforms like Twitter and Facebook to answer queries besides providing easy to understand books on Finance (108 Mantras for Financial Success).

Helping the underprivileged and physically handicapped

IIFL has tied up with KJ Somaiya Institute of Management Studies & Research (SIMSR) to impart basic financial knowledge to underprivileged sections of the society and physically handicapped people. The program covers lessons on savings, budgeting, banking, credit management, microfinance and self-help groups (SHGs).

FLAME has sponsored Financial Literacy Courses being conducted in National Society for Equal Opportunities for the Handicapped (NASEOH), Vocational Training Institute & Adarsh Vidyalaya.

vi. Aadhaar

UID-AADHAAR card is an effective government document, which confirms details about identity of Indians. IIFL encourages all its employees to register themselves for the UID-ADHAAR program and submit their UID-AADHAAR number or enrollment number to the Company.

vii. Awards and Recognitions:

Your Company was conferred with the following awards during the financial year ended March 31, 2013:

- An IIFL Analyst was rated as the ''Best Market Analyst'' by Zee Business at the Zee Business Market Analyst Awards 2012

- ''Best Broking House with Global Presence'' awarded by D&B Equity Broking Awards 2012

- IIFL''s Wealth Management subsidiary bagged award for ''Best Wealth Management House - India'' by The Asset Triple A 2012

- BSE Group felicitated IIFL for being one of the top performers in the ''Equity FI'' category on Muhurat Trading day

- Mr. Nirmal Jain, our Chairman, received the ''Entrepreneur of the Year'' award at the 10th Franchise India Awards, 2012

Restructuring

In order to achieve simplified business structure, focused management, strengthen core competencies and enhance value creation for the group, the Board of Directors of your Company have approved transfer of Company''s broking, Depository Participant, Portfolio Management, Mutual Fund Distribution and Investment Banking businesses ("Financial Services Undertaking") to a wholly owned subsidiary, India Infoline Distribution Company Limited ("IIDCL"), through a scheme of arrangement in terms of Section 391 to 394 of the Companies Act, 1956. As the said transfer is to a wholly owned subsidiary, it does not involve issue of new shares by the Company. The Scheme is subject to necessary approvals of regulatory authorities, shareholders, creditors and High Court. The Company has already initiated the process. The appointed date for the transfer is April 1, 2013.

Further, in order to achieve better operational efficiency and control, IIFL (Thane) Private Limited, a step down subsidiary, was merged with IIFL Realty Limited, a direct and the Company''s office infrastructure support subsidiary.

Dividend on equity shares

During 2012-13, the Company declared and paid an interim dividend of Rs. 3 per share (face value of Rs. 2 per share). The same is considered as final. The total dividend paid in 2011-12 was Rs. 1.5 per share.

Employees Stock Option Schemes (ESOS)

The Company granted 3,300,000 stock options to employees during the year under its Employee Stock Option Scheme 2007 and 2008. Details as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Option Purchase Scheme) Guidelines, 1999, are attached as an annexure.

During the year under review, the Company allotted 62,05,680 equity shares of Rs. 2/- each to the eligible employees.

Deposits

During the year, the Company did not accept/renew any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under and as such, no amount of principal or interest was outstanding as on the balance-sheet date.

Subsidiary Companies

As on March 31, 2013, the Company had 28 subsidiaries located in India and overseas. Pursuant to the general exemption granted by the Ministry of Corporate Affairs vide circular dated February 8, 2011, the Board of Directors had at their meeting held on May 11, 2013 approved attaching the consolidated financials of all the subsidiaries of the Company along with that of the Company. Copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary Companies are not attached to the accounts of the Company for the previous financial year 2012-13. Your Company will make available these documents/details upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and also at the registered offices of the concerned subsidiaries. The Annual Report of all the subsidiaries shall be uploaded upon the website of the Company. As required by Accounting Standard - 21 (AS-21) issued by the Institute of Chartered Accountants of India, the Company''s consolidated financial statements included in this Annual Report incorporates the accounts of its subsidiaries. A summary of key financials of the Company''s subsidiaries is also included in this Annual Report.

Management Discussion and Analysis Report and Report of the Directors on Corporate Governance

In accordance with Clause 49 of the listing agreements, the Management Discussion and Analysis Report and the Report of the Directors on Corporate Governance form part of this report.

A certificate from Statutory Auditors Messrs Sharp & Tannan Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the listing agreement is also attached.

Directors

In accordance with Sections 255 and 256 of the Companies Act, 1956 ("Act") read with Article 137 of the Articles of Association of the Company, Mr. Kranti Sinha and Mr. A K Purwar are liable to retire by rotation at the ensuing AGM. Being eligible, they offer themselves for reappointment.

The Board recommends for shareholders'' approval.

Dr. S Narayan has been appointed by the Board as an Additional Director of the Company with effect from August 1, 2012. As per provisions of Section 260 of the Act, Dr. Narayan holds the position till the date of the ensuing Annual General Meeting of the Company. The Company has received notice in writing from a member under Section 257 of the Act, proposing appointment of Dr. Narayan as a Director of the Company.

The proposal to appoint Dr. Narayan as Director of the Company is recommended for shareholders'' approval.

Directors'' Responsibility Statement

In accordance with the provisions of Section 217 (2AA) of the Companies Act, 1956 and based on the information provided by the management, your Directors state that:

(a) In the preparation of the annual accounts, the applicable accounting standards were followed;

(b) Appropriate accounting policies were selected and applied consistently and that judgments and estimates made were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2013, and of its profit for the year ended on that date;

(c) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts of the Company were prepared on a going concern basis.

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The additional information required in accordance with sub-section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988, is appended to and forms part of this Report.

Particulars of Employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other particulars of employees are set out in the annexure to the Directors'' Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Directors'' Report is being sent to all the shareholders of the Company excluding the aforesaid annexure. The annexure is available for inspection at the registered office of the Company. Any shareholder interested in the said information may write to the Company Secretary at the registered office of the Company.

Statutory Auditors

Messrs Sharp & Tannan Associates, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Company has received a confirmation from Messrs Sharp & Tannan Associates to the effect that their appointment, if made, would be within the limits prescribed under Section 224(1 B) of the Companies Act, 1956. The Audit Committee and Board of Directors recommend the re-appointment of Messrs Sharp & Tannan Associates, Chartered Accountants as Statutory Auditors of the Company.

Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the government, regulators, stock exchanges, other statutory bodies and Company''s bankers for the assistance, cooperation and encouragement extended to the Company.

Your Company''s employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as shareholders is also greatly valued. Your Directors look forward to your continuing support.

On behalf of the Board

Place: Singapore Nirmal Jain

Date: May 11, 2013 Chairman

Mar 31, 2012

The Directors have pleasure in presenting the Seventeenth Annual Report along with the audited statements of accounts of your Company for the financial year ended March 31, 2012.

I. Financial results

A snapshot of the financial performance of the Company and its major subsidiaries for the financial year 2011-12 is as under:

(Rs.million)

Name of Company Revenues Profit before interest, Profit after tax depreciation and tax

Aggregate 18,864.7 7,840.5 1,360.7

India Infoline Ltd 6,390.0 1,431.5 633.0

India Infoline Finance Ltd 9,103.7 6,195.4 1,018.5

India Infoline Housing Finance Ltd 431.3 239.1 35.9

India Infoline Insurance Services Ltd 54.6 33.6 1.6

India Infoline Insurance Brokers Ltd 857.9 41.4 26.5

India Infoline Commodities Ltd 1,031.9 110.3 28.5

India Infoline Media and Research Services Ltd 424.6 79.8 15.8

IIFL Realty Ltd 574.6 449.2 (40.0)

IIFL Wealth Management Ltd 1,070.0 277.5 147.6

India Infoline Venture Capital Fund (0.5) (43.2) (43.8)

IIFL Inc 70.3 (3.7) 1.4

India Infoline Asset Management Company Ltd 10.4 (16.2) (23.0)

Finest Wealth Managers Private Ltd 24.4 13.6 9.1

IIFL Securities Ceylon (Pvt) Ltd 26.3 5.5 3.9

IIFL Private Wealth Dubai Ltd 1.5 (33.2) (33.4)

IIFL Private Wealth (Mauritius) Ltd 37.9 0.8 0.7

IIFL Wealth (UK) Ltd 14.8 (1.4) (1.4)

IIFL (Asia) Pte. Ltd - (268.6) (178.0)

IIFL Capital Pte. Ltd 35.1 (35.5) (39.2)

IIFL Securities Pte Ltd 215.5 (38.3) (43.6)

Inter Company Adjustments (1,525.8) (591.2) (143.6)

Other Subsidiaries 16.2 (5.9) (15.7)

A snapshot of the consolidated financial performance of your Company is as under: (Rs.million)

2011-12 2010-11

Gross total income 18,864.7 14,739.4

Profit before interest, depreciation and taxation 7,840.5 6,067.5

Interest and financial charges 5,043.1 2,357.9

Depreciation 802.2 581.7

Profit before tax 1,995.2 3,127.9

Taxation - Current 835.2 1,073.6

- Deferred (207.9) (127.7)

- Short or excess provision for income tax 7.2 34.7

Net profit for the year 1,360.7 2,147.3

Less: Exceptional item (net of tax) - -

Net profit before minority interest 1,360.7 2,147.3

Less: Minority interest (40.0) (35.9)

Less: Appropriations Interim dividend (433.6) (860.4)

Dividend distribution tax (70.3) (147.3)

Transfer to general reserve (65.2) (206.0)

Transfer to special reserve (216.3) (185.5)

Debenture Redemption Reserve (630.0) -

Adjustments for Minority Interest and fair value 69.7 (190.4)

Add: Balance brought forward from the previous year 3,004.9 2,483.1

Balance to be carried forward 2,979.9 3,004.9

A snapshot of the standalone financial performance of your Company is as under:

(Rs.million)

2011-12 2010-11

Gross total income 6,390.0 7,995.5

Profit before interest, depreciation and taxation 1,440.2 2,834.9

Interest and financial charges 378.6 861.5

Depreciation 314.4 240.8

Profit before tax 747.2 1,732.6

Taxation - Current 142.7 512.3

- Deferred (29.1) (10.9)

- Short or excess provision for income tax 0.6 7.6

Net profit for the year 633.0 1,223.6

Less: Appropriations - -

Interim dividend 433.6 859.2

Dividend distribution tax 70.3 127.6

Transfer to general reserve 65.2 123.0

Add: Balance brought forward from the previous year 1,737.2 1,623.4

Balance to be carried forward 1,801.1 1,737.2

II. Review of operations

On a consolidated basis, in the current year, your Company's income increased by 28% to Rs. 18.9 billion and EBIDTA increased by 29.2% to Rs. 7.8 billion. However with higher interest outgo, Profit before tax declined by 36.2% and Profit after tax before minority interest decreased by 36.6% to Rs. 1.4 billion.

Due to sluggish capital markets, equity broking and related income decreased by 18.5% to Rs. 5.5 billion. Our Credit and Finance business gained momentum and increased by 76.4% to Rs. 10.9 billion, contributing 58% to total revenues, in the current year. Marketing and distribution income also grew by 31.9% to Rs. 2,430.7 million. The other income stood at Rs. 71.9 million.

III. Key initiatives

Maiden NCD issue by NBFC subsidiary

During the year under review, India Infoline Finance Limited, the NBFC subsidiary, successfully completed Initial Public Offering of Secured Redeemable Non-Convertible Debentures ("NCDs") of Rs. 3.75 billion with green shoe option to retain additional Rs. 3.75 billion. The issue received an overwhelming response and was oversubscribed and the Company could retain Rs. 7.5 billion subscription. These NCDs are listed and traded on the National Stock Exchange and Bombay Stock Exchange.

Launch of IIFL Real Estate Fund

India Infoline Venture Capital Fund (IIFL VCF), the venture capital arm of India Infoline Group (IIFL), successfully completed the launch of its Real Estate Fund - 'IIFL Real Estate Fund (Domestic) Series 1' in January, 2012. The fund was fully subscribed with total commitment of Rs. 5 billion with green shoe option of Rs. 2.5 billion. The fund is focused on the real estate sector in India by investing in equity, debt and equity-linked instruments of promising real estate development projects and companies involved in projects predominantly located in Tier-I cities which have significant growth potential.

IIFL Mutual Fund

Subsequent to SEBI approval to mutual fund business, IIFL Mutual Fund launched its first New Fund Offer IIFL Nifty ETF in September, 2011 and received an encouraging response from investors. IIFL Nifty ETF ranked second in most traded Equity ETF's on NSE and has a high level of retail investors of over 7,000. IIFL Mutual Fund also launched 3 series of debt schemes under IIFL Fixed Maturity Plan. The total net assets under management of IIFL Mutual Fund as on March 31, 2012 was Rs. 1,711.3 million.

New products introduced by IIFL Wealth Management IIFL Wealth Management introduced new products structured on the fixed income side including NCDs, NABARD,

Structured Notes and Introduced Family Office, a multi- manager investment platform offering a complete wealth structuring solution and inter-generational transfer solution to clients. The total assets under wealth advisory crossed Rs. 200 billion during the year.

Global operations

During the year, the Company set up wholly owned subsidiaries in Hong Kong, Mauritius and Dubai to undertake financial advisory and distribution services.

Global investor conference

Your Company's institutional research products have been well appreciated by the target audience. "Enterprising India- III", your Company's third Global Investors Conference, held in February, 2012 at Mumbai had participation from leading corporates and eminent leaders / speakers. The Conference received an overwhelming response from global investors and institutional participants.

Corporate Social Initiative - Financial Literacy

As a part of its Corporate Social Responsibility initiative, your Company launched a comprehensive financial education and awareness initiative, FLAME - Financial Literacy Agenda for Mass Empowerment, in 2011.

Under this initiative your Company has successfully completed over 250 FLAME workshops for investors and students. Over 45 schools covering 5,500 students have enrolled for the Fin-Lites distance learning programme.

Our other initiatives include a comprehensive mass media campaign on financial literacy, dedicated portal and helpline and effective use of social media platforms like Twitter and Facebook to answer queries and books and publications.

Corporate Social Initiative - Helping the underprivileged and physically handicapped

IIFL sponsored Swadhaar Finaccess (SFA), an NGO to impart financial education to women living in slum communities through a specially designed Financial Education Programme (FEP).

IIFL has also tied up with KJ Somaiya Institute of Management Studies & Research (SIMSR) to impart basic financial knowledge to underprivileged sections and physically handicapped sections of the society. The programmes covers lessons on savings, budgeting, banking, credit management, microfinance and self-help groups (SHGs).

Awards and Recognitions:

Your Company was conferred the following awards during 2011-12:

- Best Broking House with Global Presence' awarded by D&B Equity Broking Awards 2011

- Awarded 'Best Broker - India' by Finance Asia Country Awards for Achievement 2011

- IIFL's Wealth Management subsidiary bagged Euro money awards for Best Fixed Income Portfolio Management &

Best Commodities Investment in India 2012 and 'Best Wealth Management House - India' by The Asset Triple A 2011

IV. Merger of subsidiary

India Infoline Marketing Services Limited ("IIMSL"), a wholly- owned subsidiary was merged with the Company with effect from April 1, 2011. The Scheme of Amalgamation was sanctioned by the Hon'ble High Court of Judicature at Bombay vide order dated April 27, 2012. Pursuant to the Scheme, the Authorised Share Capital of the Company increased to Rs. 1200 million. Similarly, Moneyline Credit Limited, step down NBFC subsidiary was merged with, India Infoline Finance Limited, direct NBFC subsidiary. This enabled consolidation of all lending and investments businesses (except housing loans) under one NBFC subsidiary and ensures better operations and control.

V. Dividend on equity shares

During 2011-12, the Company declared and paid an interim dividend of Rs. 1.5 per share (face value of Rs. 2 per share). The same is considered as final. The total dividend paid in 2010- 11 was Rs. 3 per share.

VI. Allotment of shares

During 2011-12, your Company allotted 2,613,380 equity shares of Rs. 2 each on exercise of stock options under the Employee Stock Option Schemes of the Company.

VII. Deposits

During 2011-12, your Company did not accept / renew any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under and as such, no amount of principal or interest was outstanding as on the balance sheet date.

VIII. Subsidiary companies

As on March 31, 2012, the Company has 29 subsidiaries located in India and overseas. Pursuant to the general exemption granted by the Ministry of Corporate Affairs vide circular dated February 8, 2011, the Board of Directors had at their meeting held on May 15, 2012 approved attaching the consolidated financials of all the subsidiaries of the Company along with that of the Company. The copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary companies are not attached to the accounts of the Company for financial year 2011-12. Your Company will make available these documents / details upon request by any member of the Company. These documents / details will also be available for inspection by any member of the Company at its registered office and also at the registered offices of the concerned subsidiaries. The Annual Report of all the subsidiaries shall be uploaded upon the website of the Company. As required by Accounting Standard - 21 (AS-21) issued by the Institute of Chartered Accountants of India, the Company's consolidated financial statements included in this Annual Report incorporates the accounts of its subsidiaries. A summary of key financials of the Company's subsidiaries is also included in this Annual Report.

IX. Management Discussion and Analysis

The Management Discussion and Analysis Report for 2011- 12, as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report.

X. Disclosure of Employee Stock Options

During 2011-12, the Company granted 5,200,000 stock options to the employees under its Employee Stock Option Scheme 2007 and 2008. Details as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Option Purchase Scheme) Guidelines, 1999, are attached as an annexure.

XI. Directors

In accordance with Sections 255 and 256 of the Companies Act of 1956 read with Article 137 of the Articles of Association of the Company, Mr. Nilesh Vikamsey, retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting of the Company.

Mr. Sunil Kaul has been appointed as an Additional Director of the Company by the Board with effect from November 5, 2011. As per the provisions of Section 260 of the Companies Act, 1956, ("Act"), Mr. Kaul holds the position till the date of the forthcoming Annual General Meeting of the Company. The Company has received notice in writing from a member under Section 257 of the Act, proposing appointment of Mr. Kaul as a Director of the Company.

Mr. Chandran Ratnaswami has been appointed as an Additional Director of the Company by the Board with effect from May 15, 2012. As per the provisions of Section 260 of the Companies Act, 1956, ("Act"), Mr. Chandran holds the position till the date of the forthcoming Annual General Meeting of the Company. The Company has received notice in writing from a member under Section 257 of the Act, proposing appointment of Mr. Chandran as a Director of the Company.

The proposals for appointment of Mr. Sunil Kaul and Mr. Chandran Ratnaswami as Directors of the Company are recommended for shareholders approval.

XII. Directors' Responsibility Statement

As required by Section 217 (2AA) of the Companies Act, 1956, your Directors confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards were followed

(b)Appropriate accounting policies were selected and applied consistently and that judgments and estimates made were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2012, and of its profit for the year ended on that date

(c) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities

(d)The annual accounts were prepared on an ongoing concern basis

XIII. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The additional information required in accordance with sub- section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules,1988, is appended to and forms part of this Report.

XIV. Corporate Governance Report

The Corporate Governance Report giving the details as required under Clause 49 of the Listing Agreement in the stock exchanges is given separately and forms part of the Director's Report to shareholders.

A certificate from the Statutory Auditors, M/s Sharp &

Tannan Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is also attached.

With respect to the Corporate Governance Voluntary Guidelines, 2009 issued by the Ministry of Corporate Affairs, Government of India, your Company is broadly complying with many of the requirements of the guidelines and is also in the process of implementing the remaining suggestions. The gist of major compliance with the said guidelines is given below:

a) Separation of offices of Chairman and Chief Executive:

The roles and offices of Chairman and Chief Executive are separated. Mr. Nirmal Jain is a Chairman of the Company and Mr. R Venkataraman is the Managing Director of the Company.

b) Remuneration of Directors: The Independent Directors on the Board are paid sitting fees for attending the meeting of the Board and / or any Committee thereof. Further, Independent Directors are paid commission as approved by the Board within the overall limit approved by the shareholders of the Company.

c) Independent Directors: Independent Directors are not involved in the day-to-day management of the Company.

d) Number of companies in which an individual may become a Director: The Company has appraised its board members about the restriction on number of other directorships.

e) Internal Auditors: The Company has an internal audit department which carries out audits in designated areas.

f) Internal Control: The Board ensures the effectiveness of the Company's system of internal controls including financial, operational and compliance controls and risk management systems.

XV. Particulars of employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed there under, the names and other particulars of employees are set out in the annexure to the Directors' Report. In terms of the provisions of Section 219 (1) (b) (iv) of the Companies Act, 1956, the Directors' Report is being sent to all the shareholders of the Company excluding the aforesaid information. The annexure is available for inspection at the registered office of the Company. Any shareholder interested in the said information may write to the Company Secretary at the registered office of the Company.

XVI. Statutory Auditors

M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and being eligible offers themselves for reappointment. M/s Sharp & Tannan Associates have sought reappointment and confirmed that their reappointment shall be within the limits of Section 224(1B) of the Companies Act, 1956. The necessary eligibility certificate under Section 224(1B) of the Companies Act, 1956 was received from them. The Audit Committee and Board of Directors recommend the re- appointment of M/s Sharp & Tannan Associates, Chartered Accountants as the Auditors of the Company.

XVII. Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the government, regulators, stock exchanges, other statutory bodies and Company's bankers for the assistance, cooperation and encouragement extended to the Company.

Your Company's employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as shareholders is also greatly valued. Your Directors look forward to your continued support.

On behalf of the Board

Nirmal Jain

Dated: May 15, 2012 Chairman

Mar 31, 2011

The Director have pleasure in presenting the Sixteenth Annual Report along with the audited statements of accounts of your Company for the financial year ended March 31, 2011.

I FInancIal Results

A snapshot of the financial performance of the Company and its major subsidiaries for the financial year 2010-11 is as under:

Rs mn

Name of Company Revenues Profit before Profit after

tax interest,

depreciation and

tax

Aggregate 14,739.4 6,067.5 2,147.3

India Infoline Limited 7,995.5 2,832.4 1,223.6

India Infoline

Investment Services

Limited 4,519.1 3,254.4 826.6

Moneyline Credit Limited 314.8 108.4 32.3

India Infoline

Distribution

Company Limited 67.0 6.2 (0.6)

India Infoline

Housing Finance

Limited 294.0 181.1 64.2

India Infoline

Marketing Services

Limited 930.1 151.9 (51.2)

India Infoline

Insurance Services

Limited 89.5 37.1 0.8

India Infoline

Insurance Broker Limited 609.7 70.0 45.6

India Infoline

Commodities Limited 468.7 90.0 30.5

India Infoline

Media and Research

Services Limited 202.0 193.2 16.1

IIFL Realty Limited 364.9 358.7 (9.8)

IIFL Wealth Management

Limited 1,134.4 426.0 250.6

IIFL (Asia) Pte.

Limited (53.8) (69.9) (79.2)

IIFL Inc. 60.9 1.6 0.4

IIFL Securities Ceylon

(Pvt) Limited 18.4 5.7 3.3

India Infoline Venture

Capital Fund 4.0 (102.6) (103.1)

India Infoline Trustee

Company Limited - (0.5) (0.3)

India Infoline Asset

Management Company

Limited 2.0 (14.1) (10.4)

India Infoline

Commodities DMCC - (20.1) (20.4)

IIFL Capital Pte.

Limited 60.2 (25.4) (17.9)

IIFL Securities Pte.

Limited 207.9 10.2 32.5

Inter Company

Adjustments (2,609.6) (1,463.9) (117.4)

Other Subsidiaries 59.7 37.1 31.1

The consolidated financial performance is as under:

Rs mn

2010-11 2009-10

1 Gross total income 14,739.4 11,238.8

Profit before interest depreciation

and taxation 6,067.5 4,373.1

Interestb and financial charges 2,35.7.9 291.4

Depreciation 5,81.7 534.6

Profit before tax 3,127.9 3,547.1

Taxation - Current 1,073.6 1,201.1

- Deferred (127.7) (3.74)

- Short or excess provision for income tax 34.7 42.9

net profit for the year 2,147.3 2,340.5

Less: Minority interest (35.9) (20.6)

net Profit after minority interest 2,111.4 2,319.9

Less: Appropriations

Interim dividend 860.4 852.0

Dividend distribution tax 147.3 144.8

Transfer to general reserve 206.0 152.1

Transfer;to special reserve 185.5 102.4

net Profit after Tax and appropriation 712.2 1068.6

Less: Adjustments for Interest

and Fair Value 190.4 672.6

Add: Balance brought forward from

the previous year 2483.1 2,087.1

Balance to be carried 3,004.9 2,483.1

Segment wise information is as under:

Rs mn

2010-11 2009-10

Equity brokerage and related income 6,697.3 7,018.1

Financing..an.d..Investing income 6,180.5 2,917.8

Marketing and distribution income 1,842.7 1,293.1

Other income 19.0 9.8

Balance to be carried 14,739.4 11,238.8

A snapshot of the stand-alone financial performance of India Infoline Limited is as under:

Rs mn

2010-11 2009-10

Gross total income 79,955.5 6,981.9

Profit before interest, depreciation

and taxation 2,832.4 2,754.2

Interes and financial charges 859.0 1.02.5

Depreciation 240.8 318.6

Profit before tax 1,732.6 2,333.1

Taxation.- Current 512.3 831.6

- Deferred (10.9) (5.8.2)

-Short or excess provision for Income tax 7.6 39.6

net profit for the year 1,223.6 1,520.1

Less: Appropriations - -

Interim dividend 859.2 852.0

Dividend distribution tax 127.6 144.8

Transfer to general reserve 123.0 152.0

Add: Balance brought forward 1,623.4 1,252.1

Balance to be;..carried...forward 1,737.2 1,623.4

II REVIEW OF OPERATIONS

On a consolidated basis, the Companys income increased by 31.1% to Rs 14.74 bn and EBITDA increased by 38.7% to Rs 6.07 bn. The income growth was primarily driven by credit and financing business. With significant increase in cost as well as quantum of borrowings, interest cost was Rs 2.36 bn in the year under review, as compared to Rs 291.36 mn in the previous year. Consequently profit before and after tax was a shade lower in the year. Profit after tax before minority interest decreased by 8.3% to Rs 2.14 bn.

Income from equity broking and related activities decreased marginally by 4.6% and stood at Rs 6.70 bn. Income from Financing and Investing significantly increased by 111.8% and stood at Rs 6.18 bn. Marketing and distribution income increased by 42.5% to Rs 1,842.7 mn. Other income increased to Rs 19.0 mn.

III KEY INITIATIVES

IIFL Mutual Fund

During the year under review, IIFL Mutual Fund, sponsored by your Company, received final regulatory approval from the Securities and Exchange Board of India (SEBI) to commence operations. This will enable commencement of mutual fund business and launching of mutual fund schemes in due couriere.

IIFL, with its distribution reach spanning over 500 cities/towns, is well placed to take the mutual fund penetration wider and deeper. Your Company sees an opportunity for mutual fund mobilization in tier-II and tier-III cities. We aim to leverage upon our indepth undertanding of technology and reach to offer retail investor a variety of products with minimal expense ratio and encourage them to invest for the long term.

Asia Expansion

During the year, on the global financial services business, the Companys Singapore subsidiary received the final approval from Singapore Stock Exchange for its equity broking business. The subsidiary commenced its broking operations from December 2010. Similarly the Companys subsidiary in Sri Lanka received the approval from Colombo Stock Exchange and SEC, Sri Lanka for undertaking broking business in July 2010, thereby becoming the first Indian broking Company to set up broking business in Sri Lanka. We expect both these subsidiaries to scale up their business substantially during the current year and going forward.

other International Initiatives

Under the advisory, wealth management and distribution business, the Company has set up subsidiaries in UK and Dubai and received approvals from the overseas regulator during the year. We expect these subsidiaries to commence business during the current year.

New Memberhips

Your Company has received Trading and Clearing memberhip of Currency Derivative Segment of United Stock Exchange of India Limited. Further IIFL Capital Limited, the wholly owned subsidiary received Trading and Clearing memberhip from National Stock Exchange of India Limited, Bombay Stock Exchange Limited and MCX Stock Exchange Limited.

Investor conferences

Your Companys institutional and retail research products have been well appreciated by the target audience. ÃEnterprising India-II", your Companys second Global investor Conference, held in February 2011 at Mumbai had participation from leading corporate and eminent leader/speaker and received an overwhelming response from investor. IIFLs Global Investor Conference, Discover Sri Lanka held in Colombo in July 2010 had an encouraging participation from more than 50 leading global and local investor and several leading Sri Lankan corporates along with a number of heads of government undertakings, banks and government officials. IIFL conducted several investor meets and camps across India, on its own as well as with leading media house ET Now to spread financial literacy and awareness about risk- return of various financial products, aspects of financial planning and undertanding of investor rights.

Employee skill Upgradation

Your Company had taken several steps to train its employees. It has introduced various training modules covering functional knowledge as well as skill set development. These modules are delivered through internet e-learning platform as well as classroom sessions followed by tests. The training programme will cover all sales and customer relationship manager to clear the test in a time bound manner.

Financial literacy campaign

Your Company has taken a pionnering intiative to spread fInancial literacy. It launched a comprehensive financial education and awareness initiative, FLAME Rs Financial Literacy Agenda for Mass Empowerment on February 18, 2011. FLAME was launched by Dr K C Chakrabarty, Deputy Governor, RBI and Mr Deepak S Parekh, Chairman, HDFC at a function attended by the leading luminaries from the financial services space.

Under this initiative IIFL Group has launched a series of advertisements in leading newspaper on financial literacy and also plans to conduct seminar and issue training materials to the public for spreading financial literacy.

IV AWARDS AND RECOGNITIONS

Your Company has been awarded the Best Equity Broker of the Year at the Bloomberg UTV Financial leadership Awards, 2011. The award was presented by the Honble Finance Minister of India, Shri Pranab Mukherjee on March 26, 2011.

V BUYBACK

Puruant to the resolution passed by the Board of Director of the Company and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (Buyback of securities) Regulations, 1998, the Company made a public announcement on December 24, 2010, to buy-back the Companys equity shares at a price not exceeding Rs 99.0 per share, aggregating to Rs 1.04 bn. The Buyback was successfully completed and the Company bought back 12,999,877 equity shares and utilised maximum offer size of Rs 1.04 bn.

VI DIVIDEND ON EQUITY SHARES

During the year 2010-11, the Company declared and paid interim dividend of 150% i.e. Rs 3 per share (face value of Rs 2 per share). The same is considered as final. The total dividend paid in 2009-10 was Rs 3 per share. The total outflow on account of dividend payout (including dividend distribution tax and surcharge) was Rs 986.8 mn (previous year Rs 996.8 mn).

VII TRANSFER TO RESERVE

The Company proposes to transfer Rs 123 mn to the General Reserve and retain Rs 113.79 mn to the profit and loss account.

VIII ALLOTMENT OF SHARES

During the year 2010-11, your Company allotted 14,194,925 equity shares of Rs 2 each on exercise of stock options under the Employee Stock Option Schemes of the Company. Towards the said allotments, the Company received a total consideration ofRs 605.4 mn including premium of Rs 577 mn.

IX DEPOSITS

During the year 2010-11, your Company did not accept/ renew any deposits within the meaning of Section 58A of the Companies Act, 1956 and the rules made there under and as such, no amount of principal or interest was outstanding as on the balance-sheet date.

X SUBSIDIARY COMPANIES

The Company had 22 subsidiaries at the beginning of the year. 7 subsidiaries namely

1) IIFL Trustee Services Limited

2) Finest Wealth manager Private Limited

3) IIFL Securities Ceylon (Pvt) Limited

4) IIFL Private Wealth Hong Kong Limited

5) IIFL Capital Ceylon Limited

6) IIFL Private Wealth (Mauritius) Limited and

7) IIFL Private Wealth Management (Dubai) Limited

have been set up/acquired during the year 2010-11. Consequently, the total number of subsidiaries as on March 31, 2011 is 29.

Pursuant to the general exemption granted by the Ministry of Corporate Affair vide circular dated February 8, 2011, the Board of Director had at their meeting held on May 7, 2011 approved attaching the consolidated financials of all the subsidiaries of the Company along with that of the Company. The copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Director and Report of the Auditor of each of the subsidiary Companies are not attached to the accounts of the Company for financial year 2010-11. The Company will make available these documents/details upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and also at the registered offices of the concerned subsidiaries. The Annual Report of all the subsidiaries shall be uploaded upon the website of the Company. As required by Accounting Standard - 21 (AS-21) issued by the Institute of Chartered Accountants of India, the Companys consolidated financial statements included in this Annual Report incorporates the accounts of its subsidiaries. A summary of key financials of the Companys subsidiaries is also included in this Annual Report.

XI MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report for 2010-11, as required under Clause 49 of the Listing Agreement, is given as a separate statement in the Annual Report.

XII DISCLOSURE OF EMPLOYEE STOCK OPTIONS

During the year 2010-11, the Company granted 250,000 stock options to the employees under its Employee Stock Option Scheme 2008. Details as per the Securities and Exchange Board of India (Employees Stock Option Scheme and Employee Stock Option Purchase Scheme) Guidelines, 1999, are attached as an annexure.

XIII DIRECTOR

The Board at its meeting held on May 7, 2011, elevated the existing Executive Director, Mr. R Venkataraman as ÃManaging Director", and consequently the existing Chairman and Managing Director, Mr. Nirmal Jain has been re-designated as the ÃExecutive Chairman" subject to necessary approvals.

In accordance with Sections 255 and 256 of the Companies Act of 1956 read with Article 137 of the Articles of Association of the Company, Mr. A. K. Purwar, retires by rotation and being eligible, offer himself for reappointment at the ensuing Annual General Meeting of the Company. Mr. Sat Pal Khattar, Non Executive Director of the Company, resigned with effect from October 27, 2010. The Board places on record sincere appreciation of Mr. Sat Pal Khattars contribution towards growth of your Company over the last decade.

XIV DIRECTOR RESPONSIBILITY STATEMENT

As required by Section 217(2AA) of the Companies Act, 1956, your Director confirm that:

(a) In the preparation of the annual accounts, the applicable accounting standards were followed;

(b) Appropriate accounting policies were selected and applied consistently and that judgments and estimates made were reasonable and prudent so as to give a true and fair view of the state of affair of your Company as at March 31, 2011, and of its profit for the year ended on that date;

(c) Proper and sufficient care was taken to maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts were prepared on an ongoing concern basis.

XV CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION, FOREIGN EXCHANGE OUTGO

The additional information required in accordance with sub- section (1)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particular in the Report of the Board of Director) Rules,1988, is appended to and forms part of this Report.

XVI CORPORATE GOVERNANCE REPORT

The Securities and Exchange Board of India (SEBI) prescribed Corporate Governance standards. Your Director reaffirm their commitment to these standards and this Annual Report carries a section on Corporate Governance.

A certificate from the Statutory Auditor, M/s Sharp & Tannan

Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under clause 49 of the listing agreement is annexed herewith.

XVII Particular OF EMPLOYEES

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other Particular of employees are set out in the annexure to the Director Report. In terms of the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Director Report is being sent to all the shareholder of the Company excluding the aforesaid information. The annexure is available for inspection at the registered office of the Company. Any shareholder interested in the said information may write to the Company Secretary at the registered office of the Company.

XVIII STATUTORY Auditor

M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. M/s Sharp & Tannan Associates have sought re-appointment and confirmed that their re-appointment shall be within the limits of Section 224(1B) of the Companies Act, 1956. The necessary eligibility certificate under Section 224(1B) of the Companies Act, 1956 was received from them. The Audit Committee and Board of Director recommend the appointment of M/s Sharp & Tannan Associates, Chartered Accountants as the Statutory Auditor of the Company.

The notes to the accounts referred to in the Auditor Report are self-explanatory and therefore do not call for any further comments.

XIX APPRECIATION

Your Director place on record their sincere appreciation for the assistance and guidance provided by the government, regulator, stock exchanges, other statutory bodies, and Companys banker for the assistance, cooperation and encouragement extended to the Company.

Your Companys employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement and support as shareholder is also greatly valued. Your Director look forward to your continuing trust in us.

On behalf of the Board

Nirmal Jain

Chairman

Dated: May 7, 2011

Mar 31, 2010

The Directors have pleasure in presentng the 15th Annual Report along wih the audited statements of accounts of your Company for the financial year ended March 31, 2010.

I Financial results

A snapshot of the financial performance of he Company and s major subsidiares for he fnancial year 2009-10 s as under:

(Rs. mn) Name of Company Revenues Profit before Profi after interest tas depreciation and tax Aggregate 11,238.7 4,373.1 2,340.5 India Infoline Ltd. 6,981.9 2,754.2 1,520.2 india Infoline Investment Services Ltd. 1,650.3 855.3 475.5 Moneyline Credit Ltd. 572.9 94.1 7.1 india Infoline Distribution Company Ltd. 67.9 68.2 35.8 india nfoline Housing Finance Ltd. 54.6 34.2 19.5 india nfoline Marketing Services Ltd. 860.5 130.6 34.0 india nfoline Insurance Services Ltd. 164.8 79.8 18.1 india nfoline Insurance Brokers Ltd. 385.5 31.7 20.6 india nfoline Commodities Ltd. 275.9 44.8 26.7 india Infoline Media and Research Services Ltd. 53.8 44.7 10.9 NFL Realty Ltd. 207.6 207.6 (5.7) FL Wealth Management Ltd. 626.4 222.2 147.3 FL (Asia) Pte. Ltd. 331.8 103.1 29.5 NFL Inc. 49.2 14.8 16.9 Inter Company Adjustments 1,055.0 298.6 - Other subsidiaries 10.6 (13.6) (15.9)

The consolidated financial performance is as under: (rs. mn)

2009-10 2008-09 Gross total income 11,238.7 8,775.0

Profit before interest, depreciation and taxation 4373.1 2,922.7

Interest and fnancial charges 291.4 331.8

Depreciation 534.6 396.0

Profit before tax 3,547.1 2,194.9

Taxation Current 1,201.1 653.7

Deferred (37.4) (30.9)

Fringe benefit tax - 27.9

Short or excess provision for ncome ax 42.9 (29.2)

Net profit for the year 340.5 1,573.4

Less: Exceptional item (net of tax)

Net profit before minority interest 340.5 1,573.4

Less: Minority interest (20.6) (125.2) Less: Appropriations

Interim dividend 852.0 794.5 Proposed dividend Dividend distribution tax 44.8 135.0

Transfer to general eserve 52.0 105.8

Transfer to special reserve 102.4 139.0

Add: Balance brought forward from the previous year 2,087.1 1,813.3

Balance to be carried forward 3155.8 2,087.2

A snapshot of he stand-alone fnancial performance of ndia nfoline Limited is as under: (rs. mn)

2009-10 2008-09

Gross total income 6,981.9 4,921.3

Profit before interest, depreciation and taxation 2754.2 1,848.8

Interest and fnancial charges 102.5 78.5

Depreciation 318.6 255.6

Profit before tax 2,333.1 1,514.7

Taxation Current 831.6 480.8

Deferred (58.2) (12.3)

Fringe benefit tax - 10.3

Short or excess provision for ncome ax 39.6 (22.3)

Net profit for the year 520.1 1,058.2

Less: Exceptional Item (Net of ax)

Less: Appropriations

Interim dividend 852.0 794.5

Dividend distribution tax 144.8 135.0

Transfer to general reserve 152.0 105.8

Add: Balance brought forward from the previous year 1,252.1 1,229.1

Balance to be carried forward 1623.4 1,252.0

II Review of operations

The Indian capital markets staged a remarkable recovery during 2009-10 on the back of an overall global change in sentiment and economic recovery in India. Your Company continues to buid upon its competitve position as a leading player in Indian financial services sector. On a consolidated basis, the Companys income increased by 28.0% to Rs. 11.2 bn and EBITDA increased 49.6% to Rs. 4.4 bn. Profit after tax before extra ordinary items and minority interest increased by 48.7% to Rs. 2.3 bn.

Income from the core business of equity broking increased by 35.4% to Rs. 6.1 bn. Income from wealth management and mutual fund advisory increased significanty by 87.3% and stood at Rs. 331.6 mn. The income from merchant banking activities rose manifold to Rs. 387.7 mn, whereas life insurance distribution income increased by 11.4% to Rs. 536.4 mn. Income from financing grew by 9.9% to Rs. 2.9 bn. The other businesses viz., commodities broking and online and other media also registered a marginal growth and stood at Rs. 907.0 mn.

During 2009-10, the Company received BQ1 broker grading from CRISIL, reflecting its superior quality of operations and services. The Companys research analysts were felicitated at the Indias best market analysts awards - 2009 by Zee Business for being the best in the Oil and Gas and Commodities sectors and finalists in the Banking and IT sectors. The Company was rated by AsiaMoney in 2009 among the countrys three leading brokerages. Additionally, Mr Nirmal Jain, founder and Chairman of India Infoline Ltd., was ranked second in the study of Indias

Most Valuable CEOs by Businessword n November 2009.

Ill Key nitiatives

Your Company continued to successfully scale up its wealth management business, which has been among the fastest growing in India with assets under advice having crossed Rs. 50 bn. It is one of the industrys strongest platforms across various product propositions, which feed into a strong advisory setup. Your Company filed its application for final approval from Securities Exchange Board of India (SEBI) for he proposed mutual fund business.

The lending business was revived and scaled up in view of favourable macro- economic conditions. Housing finance business is also now being actively pursued.

Your Companys institutional and retail research products have been well appreciated by the target audience. Enterprising India1, your Companys first Global Investors Conference, held in February 2010 at Mumbai, received an overwhelming response. It witnessed participation of more than 450 fund managers, over 70 corporates, world- enowned economists and thought eaders.

Your Company now has offices in Dubai, New York and Singapore representing an increasing international footprint IIFL Securities Pte Ltd, which set up its office in early 2008, is the Singapore arm of he India Infoline Group. It has received in-principle approval for Securities Trading and Clearing memberships from Singapore Stock Exchange (SGX). This paves the way for IIFL to be the fist India-based broker to become a member of SGX. IIFL Securities Ceylon (Pvt) Ltd., the subsidiary in Sr Lanka has applied

for membership of Colombo Stock Exchange.

Your Company had taken several initiatives to optimise cost without compromising on service quality and efficiency. Already, a significant part of back office, MIS, customer care and call center operations has been migrated to your Companys Chennai facility. Your Company has set up its new corporate office measuring over one lakh sq. ft. equipped with modern state-of-the-art facilities at Lower Parel, wherein all corporate functions are carried out. Your Company has also shifted its registered office to owned premises in Thane, Maharashtra.

During the year, your Company changed the brand identity of the India Infoline group from India Infoline to IIFL. Incidentally, IIFL is the Bloomberg code for India Infoline. When the group started international operations as well as institutional research, the same was branded with the short form or the Bloomberg code, IIFL. In order to avoid confusion between India Infoline and IIFL, your Company undertook a branding campaign to communicate the fact that IIFL stands for India Infoline Group. Also, your Company retained Ogilvy & Mather as the advertising agency.

IV Buy back

Pursuant to the resolution passed by the Board of Directors of the Company and in accordance with the provisions of the Companies Act, 1956 and the Securities and Exchange Board of India (buy back of securities) Regulations, 1998, the Company made a public announcement on December 4, 2008, to buy-back the Companys equity shares at a price not exceeding Rs. 43.2 per share, aggregating to Rs. 989.1 mn subject o

a buy-back of minimum 5 mn equity shares and maximum of 6 mn equity shares. The buy-back was open from December 18, 2008 and closed on November 28, 2009 and the Company bought back 25,57,915 equity shares at an aggregate value of Rs. 108.0 mn. Consequently, the paid-up equity share capital of the Company declined from Rs. 572.0 mn to Rs. 567.0 mn as on November 28, 2009.

V Dividend on equity shares

During 2009-10, the Company declared and paid two interim dividends of Rs. 1.2 per share and 1.8 per share totaling to Rs. 3.0 per share (face value of Rs. 2 per share). The same is considered as final. The total dividend paid in 2008-09 was Rs. 2.8 per share. The total outflow on account of dividend payout (including dividend distribution tax and surcharge) was Rs. 996.8 mn (previous year Rs. 929.2 mn)

VI Changes in equity capital

During 2009-10, the paid-up share capital of the Company after buy-back of shares increased from Rs. 566.8 mn to Rs. 570.4 mn consequent to allotment of 18,14,775 equity shares of Rs. 21- each on exercise of stock options under the Employee Stock Option Schemes of he Company.

VI Change in registered offce of the Company

The registered office of the Company shifted to NFL House, Sun Infotech Park, Road No. 16V, Plot No.B-23, Ml DC, Thane Industrial Area, Wagle Estate, Thane - 400 604, Maharashtra.

VIM Deposits

During 2009-10, your Company did not accept/renew any deposits within the meaning of Section 58A of the

Companies Act, 1956 and the rules thereunder and as such, no amount of principal or interest was outstanding as on the balance-sheet date.

IX Subsidiary companies

As at March 31, 2010, the Companys subsidiaries and step-down subsidiaries were as follows:

Sr Name of he Company No.

1 India Infoline nvestment Services Ltd.

2 Moneyline Credit Ltd.

3 India Infoline Distribution Company Ltd.

4 India nfoline Housing Finance Ltd.

5 India Infoline Marketing Services Ltd.

6 India Infoline Insurance Services Ltd.

7 India Infoline nsurance Brokers Ltd.

8 India Infoline Commodities Ltd.

9 India Infoline Media and Research Services Ltd.

10 IIFL Realty Ltd.

11 FL Wealth Management Ltd.

12 FL Energy Ltd.

13 IFL Capital Ltd.

14 ndia Infoline Trustee Company Ltd.

15 India nfoline Asset Management Company Ltd.

16 Unval Industries Private Ltd.

17 IIFL (Asia) Pte. Ltd.

18 ndia Infoline Commodites DMCC

19 IFL Capital Pte. Ltd.

20 FL Securities Pte. Ltd.

21 FL Inc.

22 FLWealthUK)Ltd.

Pursuant to the approval of the central government under Section 212(8) of the Companies Act, 1956, copies of the

Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Report of the Auditors of each of the subsidiary Companies are not attached to the accounts of the Company for financial year 2009-10. The Company will make available these documents/details upon request by any member of the Company. These documents/details will also be available for inspection by any member of the Company at its registered office and also at the registered offices of the concerned subsidiaries. As required by Accounting Standard - 21 (AS-21) issued by the Institute of Chartered Accountants of ndia, the Companys consolidated financial statements included in this Annual Report ncorporates the accounts of its subsidiaries. A summary of key financials of the Companys subsidiaries s also included in this Annual Report.

X Management Discussion and Analysis

The Management Discussion and Analysis Repor for 2009-10, as required under Clause 49 of the Listing Agreement is given as a separate statement in the Annual Report.

XI Disclosure of Employee Stock Options

During 2009-10, the Company granted 13,45,000 stock options to the employees under its Employee Stock Option Scheme 2008. Details as per the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are attached as an annexure

XII Directors

In accordance with Sections 255 and 256 of the Companies Act of 1956 read with Arcle 137 of the Articles of

Association of the Company, Mr. Kranti Sinha, retires by rotation and being eligible, offers himself for reappointment at the ensuing Annual General Meeting of he Company.

XIII Directors Responsibiy Statement

As required by Section 217 2AA) of the Companies Act, 1956, your Directors confrm that:

(a) In the preparation of the annual accounts, the applicable accounting standards were followed;

(b) Appropriate accounting policies were selected and applied consistently and that judgments and estimates made were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at March 31, 2010, and of ts profit for the year ended on that date;

c) Proper and sufficient care was taken o maintain adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts were prepared on an ongoing concern basis.

gy technology absorption, foreign exchange earnings and outgo

The additional information required in accordance with sub-section (l)(e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, is appended to and forms part of this Report.

XV Corporate Governance Report

The Securites and Exchange Board of India (SEBI) prescribed Corporate Governance standards. Your Directors reaffirm their commitment to these standards and this Annual Report carres a section on Corporate Governance.

A certificate from the Statutory Auditors, M/s Sharp & Tannan Associates, Chartered Accountants, regarding compliance with the conditions of Corporate Governance as stipulated under clause 49 of the listing agreement is annexed herewith.

XVI Particulars of employees

In accordance with the provisions of Section 217(2A) of the Companies Act, 1956 and the rules framed thereunder, the names and other partculars of employees are set out in the annexure to the Directors Report. In terms of the provisions of Section 219 (1) (b) iv) of the Companies Act, 1956, the Diectors Report is being sent to all the shareholders of the Company excluding the aforesaid information. The annexure s available for inspection at the registered office of the Company. Any shareholder interested in the said information may write to the Company Secretary at the registered office of the Company.

XVII Statutory Auditors

M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai, retire at the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. M/s Sharp & Tannan Associates have sought re-appointment and confirmed that their re-appointment shall be within the mits of Section 224(1 B) of the Companies Act, 1956.

The necessary eligibility certcate under Section 224QB) of the Companies Act, 1956 was received from them. The Audit Committee and Board of Directors recommend the appointment of M/s Sharp & Tannan Associates, Chartered Accountants as the Auditors of the Company.

The notes to the accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further comments.

XVIII Appreciation

Your Directors place on record their sincere appreciation for the assistance and guidance provided by the government, regulators, stock exchanges, other statutory bodies and Companys bankers for the assistance, cooperation and encouragement extended to the Company.

Your Companys employees are instrumental in your Company scaling new heights, year after year. Their commitment and contribution is deeply acknowledged. Your involvement as shareholders is also greatly valued. Your Directors look forward to your continuing support.

On behalf of he Board

Nirmal Jain

Chairman and Managing Diector

Dated: Apr 24, 2010

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