Directors Report of IIFL Capital Services Ltd.

Mar 31, 2024

The Directors are pleased to present the Twenty-Ninth Annual Report of IIFL Securities Limited (âthe Companyâ or âOur Companyâ or âIIFL Securitiesâ) along with the audited financial statements for the Financial Year (FY) ended March 31,2024.

1. Company Overview

IIFL Securities is one of the largest independent full-service broking house providing diversified financial services and product distribution and is also a SEBI registered Merchant Banker.

The Companyâs retail brokerage and financial product distribution businesses comprises equity, commodities and currency broking, depository participant services, distribution of mutual funds, bonds, fixed income products, portfolio management services (PMS), alternative investment funds (AIF) and other investment products. The Company also offers in-depth insight on asset allocation, market dynamics, wealth management and investment strategies to grow and protect customers wealth. These services and offerings do not just enable customers to access the Indian financial capital markets but also provide an integrated interface that allows them to track various portfolio parameters, including the performance of their investments.

The Companyâs mobile trading app âIIFL Marketsâ is rated 4.4 on Android and iOS and had over 1.18 million downloads in FY24. Continuous upgrades and enhancements makes this app the top choice of most customers. The app is preferred by most investors given its superior features, quick transactions and best-in-class user experience.

The Company forms one of the major institutional broking franchises in India with robust research capabilities. The research team covers 273 stocks across 20 sectors and market caps. As of March 31, 2024, the combined market cap of stocks under our coverage was about USD 3.2 trillion.

The Company also provides Investment Banking services to corporate and institutional clients and has evolved as a leading domestic Investment Banker in recent years, engaging in multiple transactions across capital markets and private placement/advisory including significant number of Initial Public Offerings (IPOs) and Qualified Institutional Placements (QIPs).

IIFL Securities is well-placed as a prominent name in the industry backed by end-to-end technology platforms, experienced management and vast network of branches across the country. With complete investment planning and quality offerings, the Company continuously strives to deliver more value to its customers.

2. Financial summary and highlights

A summary of the Companyâs financial performance for FY ended March 31,2024, is as under:

(Rs. in Million)
Particulars	Standalone		Consolidated
Particulars	FY 24	FY 23	FY 24	FY 23
Gross Income	19,661	12,690	22,313	13,704
Profit/(Loss) before Depreciation and Tax	7,996	4,265	7,964	4,077
Depreciation	(1,072)	(600)	(1,138)	(668)
Profit/(Loss) before tax	6,924	3,665	6,826	3,409
Provision for Tax	1,578	831	1,693	911
Non-controlling interest	-	-	10	(3)
Profit/(Loss) after Tax	5,345	2,834	5,123	2,502
Balance brough forward from previous year	8,873	6,953	10,403	8,816
Appropriation towards dividend paid	(923)	(915)	(923)	(915)
Surplus carried forward	13,295	8,873	14,604	10,403
Earnings per share on equity shares of '' 2 each
Basic (in '')	17.46	9.31	16.73	8.22
Diluted (in '')	17.11	9.24	16.40	8.16

3. Review of the operations and business and the state of Company affairs

During the year under review, there was no change in the nature of business of the Company.

Our Companyâs consolidated revenue was '' 22,313 million as against '' 13,704 million in FY23, an increase of 63% YoY. The Company earned a net profit after tax (TCI) of '' 5,121 million versus '' 2,480 million in FY23, increased by 106% on YoY basis.

I. Broking and Distribution

During the year, the average daily turnover was '' 2,631 billion, up 71% YoY. Brokerage income stood at '' 10,152 million, up 58% on a YoY basis.

Our distribution segment including AIF, PMS, Mutual Funds, Insurance etc., gained good traction during the year. AIF and PMS AUM stood at '' 39 billion & '' 24 billion and increased 23% and 52% respectively on YoY basis. Further, Mutual Fund AUM stood at '' 108 billion, an increase by 53% on YoY basis. These segments hold immense promise over the long term growth of the business.

II. Investment Banking

This business had shown exemplary performance in FY24, delivering revenues of ~''2,245 million driven by consistent mandate wins, coupled with high quality and speedy execution. The investment banking division completed 59 transactions including 20 Initial Public Offers, 14 Qualified Institutional Placements, 19 advisory/private placement transactions along with Buyback, Rights Issue and number of Offer for Sale transactions during the year. The Company has also filed several offer documents for upcoming IPOs and is currently engaged in a number of private equity and other capital market transactions which are in various stages of execution.

Our Company continues to focus on being a âBanker of choiceâ for the Indian entrepreneurial ecosystem by continuing to focus on both mid and large sized transactions. As always, superior client focus, unbiased advice and consistent performance continue to result in high repeat business - a hallmark of our Companyâs strategy.

IIFL Securities continues to expand the investment banking team to capitalise on opportunities across Equity Capital Market (ECM) and advisory practice.

4. Dividend and Reserves

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âSEBI Listing Regulationsâ), our Company has formulated the

Dividend Distribution Policy which is available on the website of the Company at https://www.indiainfoline.com/ securities/reports/Dividend Distribution Policy.pdf

The Board of Directors at their meeting held on March 01, 2024, declared an interim dividend of '' 3 per equity share (i.e. 150% of the face value of '' 2 per share) in accordance with the Dividend Distribution Policy of the Company. This led to an outgo of '' 923.11 million. The same is considered as final.

During the year under review, the Company has transferred an amount of '' 4 million to the General Reserve maintained by the Company.

5. Investor Education and Protection Fund (âIEPFâ)

A detailed disclosure with regard to the IEPF related activities undertaken by our Company during the year under review forms part of the Report on Corporate Governance.

6. Commercial Paper

During the FY24, the Company issued Commercial Papers (âCPsâ) for margin trading facility.

7. Particulars of loans, guarantees or investments by the Company

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

8. Material changes and commitments affecting the financial position of the Company

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this Report which could have an impact on our Companyâs operation or its status in the future.

9. Share Capital

As on March 31, 2024, the issued, subscribed and paid-up equity share capital of the Company stood at '' 615,733,058 (comprising 307,866,529 equity shares of '' 2/- each).

During the year under review, the total paid up equity share capital of the Company increased from '' 611,057,932/-to '' 615,733,058/- pursuant to allotment of 23,37,563 equity shares of '' 2/- each under IIFL Securities Limited Employee Stock Option Scheme - 2018 to the eligible employees of the Company and the said equity shares rank pari passu with the existing equity shares from the date of allotment.

Further, the Company neither issued equity shares with differential rights as to dividend, voting or otherwise nor any sweat equity shares during the year..

Employees Stock Option Scheme (ESOS)

During the year under review, the Company had in force the following Employees Stock Option Schemes, prepared in terms of the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021:

1) IIFL Securities Limited Employee Stock Option Scheme 2018 (âIIFL ESOS Scheme-2018â).

2) IIFL Securities Employee Stock Option 2019 -Demerger Scheme (âISL Demerger Schemeâ).

There was no material change in the IIFL ESOS Scheme - 2018 and the ISL Demerger Scheme and the same is in compliance with the Securities and Exchange Board of India (Share based Employee Benefits and Sweat Equity) Regulations, 2021 (âSBEBSE Regulationsâ).

During FY24, the Nomination and Remuneration Committee of the Board of Directors of the Company, pursuant to the IIFL ESOS Scheme-2018, granted 50,00,000 stock options to the identified employees of the Company, each Option being convertible into one Fully Paid-up Equity Share.

As on March 31, 2024, 619350 options lapsed under the IIFL ESOS Scheme -2018 and the same have been added back to the pool and are available for further grant. The aggregate number of stock options outstanding as on March 31,2024 under the IIFL ESOS Scheme - 2018 stood at 11230396. Further, as on March 31, 2024, Nil options lapsed under the ISL Demerger Scheme and the aggregate number of stock options outstanding stood at 12000.

The disclosures relating to ESOPs required to be made under the provisions of the Act and the rules made thereunder and SBEBSE Regulations are provided on the website of the Company at www.iiflsecurities.com and the same is available for inspection by the members at the registered office of the Company. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at [email protected], whereupon a copy will be provided.

The relevant disclosures in terms of IND AS 102, relating to share-based payment forms part of note 33 of the notes to the Standalone Financial Statements and note 42 of the notes to the Consolidated Financial Statements of the Company

10. Scheme of Arrangement

As part of re-organisation of business, the Board of Directors had approved a Scheme of Arrangement for transfer of IIFL Securities Online Retail Trading Business (as defined in the Scheme of Arrangement) to the 5paisa Capital Limited (âResulting Companyâ), so as to consolidate the said business under one single entity (i.e. the Resulting Company).

Considering the base of customers, valuation and market conditions had changed substantially post approval of the Scheme by the Board in December 2022, the Board, in the interest of the Company and its stakeholders, decided to withdraw and re-evaluate the Scheme.

11. Corporate Social Responsibility (CSR)

In accordance with the provisions of Section 135 of the Act and rules made thereunder, our Company has adopted a CSR policy indicating the CSR activities that will be undertaken by the Company and its subsidiaries. The CSR Policy is available on our website at https://www.indiainfoline.com/securities/reports/IIFL Securities_CSR_Policy.pdf

India Infoline Foundation (hereafter referred to as âIIFL Foundationâ), a Section-8 Company under the Act and a wholly owned subsidiary of the Company, acts as the principal arm to undertake CSR initiatives on behalf of the Company and its subsidiaries. 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 form CSR 1 with the Registrar of Companies.

IIIFL Foundation through its CSR initiatives addresses 5 thematic areas - Health, Education & Environment, Livelihood and Poverty Alleviation (HELP).

During the year, our Company through IIFL Foundation has undertaken various CSR initiatives which contribute to meet UNâs Sustainable Development Goals (SDGs) -No Poverty (SGD 1), Good Health & Well-being (SDG 3), Quality Education (SDG 4), Gender Equality (SDG 5) and Reduced Inequalities (SDG 10).

The details of the initiatives undertaken by the Company forms part of this Integrated Annual Report. The CSR programs undertaken by the Company through IIFL Foundation positively impacted over 4.15 lakh lives, with a special emphasis to empower the marginalised and disadvantaged.

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted Corporate Social Responsibility (âCSRâ) Committee and statutory disclosures with respect to the CSR Committee and Annual Report on CSR Activities is attached as Annexure-1 and forms an integral part of this Report.

12. Nomination and Remuneration Policy

The Board of Directors, on recommendation of Nomination and Remuneration Committee, have framed the Nomination and Remuneration Policy which provides the criteria for determining qualifications and positive attributes for appointment of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel and recommend their remuneration to the Board of Directors.

The Nomination and Remuneration Policy is attached as Annexure-2 to this Report and is also available on the website of the Company at https://www.indiainfoline. com/securities/reports/IIFL_Securities_Nomination_and_ Remuneration Policy.pdf.

13. Human Resources Management

IIFL Securities recognize that employees are most valuable assets. The Company is dedicated to fostering a workplace environment where every individual can thrive. Through the commitment to quality hiring practices and comprehensive retention and engagement strategies, the Company ensure that the team members are integral contributors to the success of the Company.

IIFL Securities focus on employee development goes beyond professional growth; it extends to nurturing a conducive and healthy workplace culture.

Prevention of Sexual Harassment (POSH)

The Company is committed to promote a work environment that is conducive to the professional growth of its women employees and encourages equality of opportunity. IIFL Securities aims to adopt zero tolerance attitude against any kind of sexual harassment or discrimination. Providing a safe working environment for women, free from sexual harassment and discrimination is among the key priorities of the Company.

In compliance with the provisions ofthe Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a Policy on Prevention of Sexual Harassment at Workplace which aims to provide protection against sexual harassment to women at the workplace and prevent and redress complaints of sexual harassment and matters connected therewith and incidental thereto. The said Policy is available on the website of the Company at https://www.indiainfoline.com/ securities/corporate-governance.php.

Furthermore, the Company has constituted an Internal Complaints Committee (ICC) to consider and resolve all sexual harassment complaints reported under the said Policy. The ICC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Committee includes external memberâs with relevant experience for

handling complaints under the said Policy. The Policy includes the scope, complaint and redressal mechanism along with contact details of the Committee members for raising any grievance/complaint under the said Policy. The Company provides for mandatory online training on POSH for all employees, including new joinee.

The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report forming part of this Integrated Annual Report.

Particulars of employees

The Company had 1486 employees as of March 31,2024.

The disclosures required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - 3 and forms an integral part of this Report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaid rules, is maintained and 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 aforesaid information is available for inspection by the members. Any member interested in obtaining a copy thereof, may write to the Company Secretary at [email protected].

14. Subsidiary, Associates and Joint Venture Companies

As on March 31, 2024, the Company has twelve subsidiaries (including step-down subsidiary) and has no associate and joint venture companies. The following are the subsidiaries located in India and overseas:

Sr. No.	Name of the domestic subsidiary
1	IIFL Facilities Services Limited*
2	IIFL Management Services Limited*
3	Livlong Insurance Brokers Limited (Formerly IIFL Insurance Brokers Limited)*
4	Livlong Protection and Wellness Solutions Limited (Formerly IIFL Corporate Services Limited)
5	India Infoline Foundation* (Section 8 Company)
6	Shreyans Foundations LLP (Step down subsidiary company)
7	Meenakshi Towers LLP
8	IIFL Securities Services IFSC Limited*
9	IIFL Commodities Limited*

Sr. No.	Name of the domestic subsidiary
10	IIFL Securities Alternate Asset Management Limited*
Name of the foreign/overseas subsidiary
11	IIFL Wealth (UK) Limited*
12	IIFL Capital Inc.*
*Wholly-owned subsidiary

During FY24, no company has become or ceased to be subsidiary, joint venture or associate of the Company except incorporation of a wholly owned subsidiary of the Company in the name of âIIFL Securities Alternate Asset Management Limitedâ, to act as Investment Manger to AIF and providing PMS. The said company is yet to commence its business.

IIFL Facilities Services Limited is a material subsidiary of the Company as per Regulation 16 of SEBI Listing Regulations. The Board of Directors of the Company have approved a Policy for determining material subsidiaries which is in line with the SEBI Listing Regulations as amended from time to time. The Policy is available on the Companyâs website at https://www.indiainfoline.com/ securities/corporate-governance.php.

In accordance with Section 136(1) of the Act, the financial statements including consolidated financial statements and all other documents required to be attached thereto and audited annual accounts of subsidiary companies are available on the Companyâs website at https:// www.indiainfoline.com/securities/flnancials.php. 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 respective subsidiaries, except on Saturdays, Sundays and Public Holidays.

15. Financial performance of the major subsidiaries of the Company

The performance in brief of the major subsidiaries companies is given hereunder:

Domestic subsidiaries

I. IIFL Facilities Services Limited (âIFSLâ)

IFSL is engaged into providing office and related infrastructure and facility services catering mainly to group companies and outsiders and allied services. During FY24, the total income and total comprehensive income / (loss) of IFSL stood at '' 566 million and ('' 62) million as compared to '' 727 million and '' 263 million in FY23, respectively.

II. Livlong Insurance Brokers Limited (formally âIIFL Insurance Brokers Limitedâ) (âLIBLâ)

LIBL is registered with Insurance Regulatory Development Authority as Direct Broker for providing insurance broking services. During the FY24, the total income and total comprehensive income of LIBL stood at '' 1,154 million and '' 169 million as compared to '' 714 million and '' 264 million in FY23, respectively.

III. Livlong Protection and Wellness Solutions Limited (Formerly âIIFL Corporate Services Limitedâ) (âLPWSLâ)

LPWSL is mainly into solving healthcare need of customers by leveraging technologies. During FY24, the total income and total comprehensive income/ (loss) of LPWSL stood at '' 1,433 million and '' 115 million as compared to '' 267 million and (''104) million in FY23, respectively.

IV. IIFL Management Services Limited (âIMSLâ)

IMSL is mainly into providing property advisory, consultancy and allied services and also into the business of providing office and related infrastructure, Manager to Alternate Investment Funds and facility services catering mainly to the group company. During FY24, the total income and total comprehensive income/(loss) of IMSL stood at '' 121 million and ('' 112) million as compared to '' 465 million and ('' 259) million in FY23, respectively.

Foreign/overseas subsidiaries

V. IIFL Capital Inc.

IIFL Capital Inc. is engaged in the business of Advisor and Financial Services. During FY24, the total income and total comprehensive income of IIFL Capital Inc. stood at '' 213 million and '' 13 million as compared to '' 136 million and '' 14 million in FY23, respectively.

CONSOLIDATED FINANCIAL STATEMENTS

Our Company has, in accordance with Section 129(3) of the Act, prepared the annual consolidated financial statements, consolidating its financials with its subsidiary companies. The annual audited consolidated financial statements have been prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India.

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries Companies is given in Form AOC-1 as âAnnexure Aâ of the Consolidated Financial Statements and forms an integral part of this Report.

16. Integrated Annual Report

In compliance with SEBI circular dated 6th February, 2017, the Company has voluntarily published the Integrated Annual Report, which includes both financial and non-financial information and is based on the International Integrated Reporting Framework. This Report covers aspects such as organisationâs strategy, governance framework, performance and prospects of value creation based on the six forms of capitals viz. financial capital, physical capital, intellectual capital, human capital, social & relationship capital and natural capital.

17. Management Discussion and Analysis Report

In accordance with Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Integrated Annual Report.

18. Business Responsibility and Sustainability Report

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR), covering disclosures on the Companyâs performance on Environment, Social and Governance parameters for FY24, forms part of this Integrated Annual report. BRSR includes reporting on the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC) as prescribed by the Ministry of Corporate Affairs.

The Company has voluntarily obtained limited assurance of the BRSR core principles as prescribed by SEBI for FY24. The report of Lodha & Co. on limited assurance is annexed with the BRSR Report forming part of this Integrated Annual Report.

19. Environment Social & Governance (ESG)

ESG factors are important for fostering sustainable practices, meeting stakeholdersâ expectations and mitigating risks. These factors represent a holistic approach to evaluating a companyâs impact on society, the environment and corporate governance practices. IIFL Securities aims to become a sustainable organization by keeping ESG at its core and continue to positively impact people, planet and profit.

Towards this, the Company has an ESG Policy approved by the Board of Directors which provides the role and responsibilities of the Board of Directors/ Board Committees, ESG Committee and the ESG team towards achieving the objectives of being a sustainable organization. The Policy enshrines the ESG focus area for the Company which includes Environment, Corporate Governance, Customers, Employee, Corporate Social Responsibility and Information and Cyber Security Framework. Based on the ESG focus areas, Key Performance Indicators (KPIs) have been identified and quarterly updates are taken from respective stakeholders. The ESG Policy is available on the website of the

Company at https://www.indiainfoline.com/securities/ reports/ESG Policy.pdf

The Company has also framed various policies against the nine principles as per National Guidelines on Responsible Business Conduct (NGRBC). Further, the Company has ESG Risk register in place which helps in identification and management of environmental, social and governance risks.

The Company has integrated ESG Profile on ESG World Platform to enhance visibility and creditability in the realm of sustainability and responsible corporate governance and to foster stakeholder trust. The same can be accessed at here.

The Company has also carried out gap analysis alongside the ESG rating agenciesâ criteria in order to identify areas where the Organization can improve ESG practices and disclosures. This will help the Company to build investor confidence through transparent and enhanced disclosures.

20. Directors and Key Managerial Personnel (KMP)

Directors

Our Company has a well-diversified Board comprising of Directors from various backgrounds and having broad range of experience, in the areas of finance, accounting, technology, governance, risk management among others. Their combined experience and expertise enables the Company to ensure effective corporate governance on one hand, and to take future-ready business decisions on the other. The Board provides leadership, strategic guidance and discharges its fiduciary duties of safeguarding the interest of the Company and its stakeholders.

The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Executive, Non-Executive and Independent Directors (including one independent woman director).

All the Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1) (b) of SEBI Listing Regulations. In terms of requirements of the SEBI Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Companyâs businesses for effective functioning which are detailed in the Report on Corporate Governance forming part of this Integrated Annual Report.

Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of

Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs.

The complete list of Directors of the Company has been provided in the Report on Corporate Governance forming part of this Integrated Annual Report.

Changes in the composition of the Board of Directors

Mr. Nemkumar H (DIN: 00350448) was appointed as Additional Director on the Board of the Company w.e.f. October 17, 2023. Further, he was appointed as the Whole-Time Director of the Company for a period of five years w.e.f. October 17, 2023, and the said appointment was approved by the shareholders of the Company through postal ballot on January 06, 2024.

Ms. Rekha Warriar (DIN: 08152356) was re-appointed as Non-Executive Independent Director on the Board of the Company for a second term of five consecutive years w.e.f. May 08, 2024. Further, Mr. Narendra Jain (DIN: 01984467) was re-appointed as a Whole-Time Director and Key Managerial Personnel of the Company for a period of five years w.e.f. May 13, 2024. The said re-appointments were subject to approval of shareholders of the Company and Regulator/Exchange(s), as may be required.

The tenure of Mr. R. Venkataraman (DIN: 00011919) as Managing Director and Key Managerial Personnel of the Company expired on May 14, 2024. Mr. Venkataraman did not seek renewal of his term as Managing Director. Accordingly, the Board of Directors of the Company, based on recommendation of the Nomination and Remuneration Committee, appointed Mr. Nemkumar H (DIN: 00350448), Whole Time Director of the Company, as the Managing Director and Key Managerial Personnel of the Company for a period of 5 (five) years w.e.f. May 15, 2024, subject to requisite regulatory and shareholdersâ approval.

Mr. R. Venkataraman continues to be the Chairman & Non-Executive Director on the Board of the Company. The Board is of the view that the separation of the posts of Chairman and Managing Director is better aligned with good corporate governance standards.

The Board recommends proposal of the above mentioned appointment/re-appointment for the consideration of the Members of the Company at the forthcoming AGM and same has been mentioned in the Notice convening the AGM. A brief profile of Mr. Nemkumar H, Ms. Rekha Warriar and Mr. Narendra Jain has also been provided therein.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year

During the year there was no new appointment of Independent Director on the Board of the Company.

Retirement by rotation

In accordance with the provisions of Section 152 of the Act and the Companyâs Articles of Association, Mr. R. Venkataraman (DIN: 00011919), Non-Executive Director is liable to retire by rotation at the forthcoming Annual General Meeting (AGM) and being eligible, has offered himself for re-appointment. The Board recommends the proposal of his re-appointment for the consideration of the Members of the Company at the forthcoming AGM and same has been mentioned in the Notice convening the AGM. A brief profile of Mr. R. Venkataraman has also been provided therein.

Changes in Key Managerial Personnels (KMPs)

Mr. Shanker Ramrakhiani - Chief Information Security Officer was identified as a KMP of the Company w.e.f. May 01,2023 pursuant to SEBI Circular SEBI/HO/MIRSD/ MIRSD-PoD-1/P/CIR/2023/24 dated February 06, 2023.

Mr. Nemkumar H (DIN: 00350448) was appointed as Whole-Time Director and KMP of the Company, for a period of five years w.e.f. October 17, 2023.

The tenure of Mr. R. Venkataraman as a Managing Director and KMP of the Company expired on May 14, 2024. Consequently, Mr. Nemkumar H was appointed as Managing Director and KMP w.e.f. May 15, 2024.

As on the date of this report Mr. Nemkumar H -Managing Director, Mr. Narendra Jain - Whole-Time Director, Mr. Ronak Gandhi- Chief Financial Officer, Ms. Meghal Shah- Company Secretary & Compliance Officer and Mr. Shanker Ramrakhiani - Chief Information Security Officer are KMPs of the Company in terms of the provisions of the Act and rules made thereunder and the SEBI Listing Regulations..

21. Meetings of Board/Committee

The Board/Committee meetings are pre-scheduled and the agenda and minutes of the Board/Committee meetings are circulated within timeline to ensure meaningful participation. Only in the case of special and urgent business, should the need arise, the Boardâs approval is taken by passing resolutions through circulation, as permitted by law, which are noted in the subsequent Board/Committee meeting. In certain special circumstances, the meetings of the Board are called at a shorter notice to deliberate on business items which require urgent attention of the Board. The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board meetings.

The Board met 7 times during the year under review and have accepted all recommendations made to it by various Committees.

The details of the number of meetings of the Board held during the FY24 and the attendance of Directors thereat forms part of the Report on Corporate Governance forming part of this Integrated Annual Report.

22. Committee of the Board

The Board of Directors as on March 31, 2024 had the following Committees:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholdersâ Relationship Committee

d) Corporate Social Responsibility Committee

e) Risk Management Committee

f) Finance Committee

g) Independent Directorâs Committee

h) ESG Committee

i) Information Technology Committee

j) Cyber Security Committee

The details of the Committees of the Board along with their composition, number of meetings held and attendance thereat are provided in the Report on Corporate Governance forming part of this Integrated Annual Report.

23. Risk management

Risk Management is important to define, assess and track business threats and obstacles throughout the organisation. Towards this, our Company has adequate measures in place and has adopted a comprehensive Enterprise Risk Management (âERMâ) Policy duly approved by Risk Management Committee and the Board of Directors which encompasses identification, analysis, mitigation and control of various type of risks for achieving its key business objectives.

The Companyâs ERM Policy is aligned to the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2017 ERM Framework and has adopted the practices of ISO 31000 Risk Management Standard, integrated with Organizationâs strategy and business objectives. The ERM Policy comprises risk such as Strategic risk, Market risk, Financial risk, Fraud risk, Legal risk, Regulatory risk, Operational risk, Reputational risk, ESG risk, Technology risk, Cyber/Information risk, Third party risk.

Our Company has adopted the âThree lines of defenseâ as part of the risk governance structure. The following diagram illustrates it.

Risk governance structure and key roles & responsibilities

A strong risk governance structure can help ensure that an organization is able to identify, assess, and respond to risk effectively. The structure is also intended to provide an effective system of checks and balances to ensure that the risk management practices are in compliance with the regulations and industry standards.

Roles and Responsibilities of key stakeholders constituting the Risk Governance Structure are as under:

Role of Board of Directors: The Board of Directors is responsible for monitoring and overseeing the implementation of the risk management policy and practices.

Role of Risk Management Committee (RMC):

RMC is responsible for formulation of the detailed risk management policy. It ensures that appropriate methodology, processes and systems are in place to monitor and evaluate risk associated with the business of the Company. It monitors and oversees implementation of the risk management policy, including evaluating the adequacy of risk management systems. The appointment, removal, and terms of remuneration of the Chief Risk Officer is subject to review by RMC. The details of

composition and meetings of RMC is covered under the Corporate Governance Report forming part of this Report.

Role of Chief Risk Officer (CRO): CRO is responsible for the overseeing the risk management activities. CRO periodically reviews the ERM Policy, monitors and oversees its implementation, process for systematic identification and assessment of all the risks and update RMC on the risks identified and the assessment and mitigation controls relating thereto. CRO conducts internal meetings with the Risk Owners/Functional Heads on ERM initiative and updates the management on the progress/status of the same on a quarterly basis.

Role of Risk Management Department: The Risk Management Department is responsible for development and maintenance of overall risk management infrastructure. It facilitates implementation of the ERM policy and collates and reviews risk assessment prepared by the CRO/Functional heads. It also maintains and update the risk register and creates awareness on the risk management process/ practices for the identified stakeholders periodically. Further, it reports risk and risk management measures to RMC. The Risk Management Department is responsible for ensuring compliance with regulations and continuously improving the risk management process.

Role of Risk Owners and Functional Heads: Each Risk owner/Functional head is responsible for their respective risk i.e., risk identification, mitigation, implementation of the controls and any other matter relating thereto and update the Risk Management Department on the same. Further, Risk owner/Functional Head prepares a Risk Report advising on the results and residual risks and recommending further action.

Incident Management

The Company has a process to track and monitor the incidents occurred which covers its root cause analysis, and taking corrective and preventive measures thereon, thereby helping the Company to have a control over repetitiveness of the incidents. The Incident Report is also presented before the Risk Management Committee for its review.

24. Qualified Stock Brokers (QSBs)

In order to further strengthen the compliance and monitoring requirements of the stock brokers through mandating enhanced obligations and responsibilities on stockbrokers, SEBI, vide circular no. SEBI/HO/ MIRSD-PoD-1/P/CIR/2023/24 dated February 06, 2023 stated various parameters including size/ scale of operations, impact on investors and securities market, governance and service standards and amount of clientsâ funds handled for designating a stockbroker as QSB , on an annual basis.

IIFL Securities has been designated as a QSB during FY24 in terms of various SEBI circulars issued in this regard, thereby entailing enhanced responsibilities, adherence to regulatory standard and upholding investor trust.

25. Annual evaluation of the Board

Our Company believes that the process of performance evaluation at the Board level is pivotal to its Board engagement and effectiveness. The Company has a Performance Evaluation Policy duly approved by the Nomination and Remuneration Committee specifying the criteria and process for effective evaluation of Board, its Committees and individual Directors pursuant to the provisions of the Act and Regulation 17 and Part D of Schedule II to the SEBI Listing Regulations. The details of the Board evaluation criteria and process are provided in the Report on Corporate Governance forming part of this Integrated Annual Report.

26. Internal financial controls

Our Company has maintained adequate internal financial controls over financial reporting, which are constantly assessed and strengthened with new/ revised standard operating procedures. The internal financial controls procedure adopted by the Company are adequate for safeguarding its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Such internal financial controls over financial reporting were operating effectively during the year.

Further, the Statutory Auditors have confirmed that the internal financial control systems over financial reporting are adequate and the same is annexed with the Independent Auditorâs Report.

27. Quality initiatives and process improvements

Our Company continues to sustain its commitment to the highest levels of quality, superior service management, robust information security practices and mature business continuity management. Our Company successfully completed ISO 27001:2013 (ISMS) Surveillance audit with no non-conformities.

The Company has sustained compliance with respect to various applicable laws and regulations in terms of technology, business continuity management and information and cyber security from various Regulators.

Further, the Company has strengthened its information and cyber security mechanisms and other risk measures to mitigate potential threats, risks and challenges. The Company has cyber insurance cover to protect from financial losses.

Our Company has enhanced cyber security program by implementing latest tools and technologies at various layers. This has helped Company to mitigate risk of latest security threats.

The Company believes in skill development, hence various e-learning modules on technology and other business areas have been enabled for employees through online training.

28. Contracts and arrangements with Related Parties

The Company has a policy on Related Party Transactions (âRPT Policyâ), which has been approved by the Board of Directors and amended from time to time. The Policy provides for identification of RPTs, necessary approvals by the Audit Committee/Board/Shareholders, reporting and disclosure requirements in compliance with the Act and provisions of the SEBI Listing Regulations. The said Policy may be accessed on the website of the Company at https://www.indiainfoline.com/securities/reports/ Related1205211.pdf.

The Audit Committee approves all the RPTs in compliance with the provisions of the Act and SEBI Listing Regulations. Omnibus approval is obtained on a yearly basis for transactions which are repetitive in nature. The details of all RPTs are placed before the Audit Committee for review and noting on a quarterly basis.

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 entered into in accordance with the RPT Policy of the Company.

During FY24, the Company has entered into material contract/arrangement/transaction with related parties within the maximum limit approved by the Members of the Company. As there is no outstanding balance as at March 31, 2024, the disclosure in Form AOC-2 as prescribed under the Act has not been made. You may refer to note no. 36 and note no. 43 to the Standalone Financial Statements and Consolidated Financial Statements respectively, for the related party disclosures.

The Company has also engaged an independent Chartered Accountant firm for reviewing and confirming that the related party transactions entered into by the Company are in compliance with the provisions of the Act and Rules made thereunder and the SEBI Listing Regulations and a certificate to that effect is placed before the Audit Committee on quarterly basis.

29. Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 109208W), were appointed as the Statutory Auditors of the Company for a second term of five years, from the conclusion of the 27^th AGM till the 32^nd AGM of the Company, at such remuneration as mutually agreed and approved by the Board.

During the year, the Statutory Auditors have confirmed that they satisfy the independence criteria required under the Act and the Code of Ethics issued by the Institute of Chartered Accountants of India.

The Statutory Auditorsâ Report forms part of this Integrated Annual Report. There were no qualifications, reservations, adverse remarks or disclaimers in the Report of the Statutory Auditors of the Company.

30. Secretarial Audit and their Report

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Nilesh Shah and Associates, Company Secretaries in Practice for conducting the Secretarial Audit for FY24. The Secretarial Audit Report of the Company is annexed as Annexure - 4. The Secretarial Auditor has not expressed any qualification, reservation, adverse remark in their Secretarial Audit Report for the year under review. The Secretarial Auditor has mentioned the following events in their Report.

a) In the matter of various inspections conducted during 2011-2014 and 2015-2017, pursuant to SEBI circular no. SMD/SED/CIR/93/23321 dated November 18, 1993, it was held by the Whole Time Member of SEBI vide its order dated 19^th June, 2023 that the Company has violated provisions of Clauses A(1), A(2) and A(5) of Code of Conduct as specified under Schedule II read with Regulation 9(f) of the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 and prohibited the Company from onboarding new clients for two years in respect of its business as stock broker.

b) During the FY 24, two designated persons of the Company had entered into contra trade in the securities of the Company in violation to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015.

Management response:

a) The matter pertains to two separate inspections carried out by SEBI for different periods viz. 2011- 2014 and 2015-2017 to verify the compliance relating to the monitoring of clientsâ funds. Although the inspection was for the past period,

SEBI applied the new methodology prescribed vide SEBI Circular on enhanced supervision dated September 26, 2016 regarding monitoring of clientsâ funds calculation retrospectively. In this regard SEBI already passed two separate Adjudication Orders dated May 20, 2022 and May 30, 2022 levying a penalty of '' 10,000,000/- each on the Company.

In respect of the present matter, the Company filed an Appeal before the Securities Appellate on June 20, 2023. The matter was posted for hearing on interim relief on June 27, 2023 wherein the SAT granted a stay for the operation of the order dated June 19, 2023 till the disposal of the Appeal and tagged all the 3 pending matters together for disposal. SAT vide order dated 07^th December, 2023, set aside the order of Whole Time Member of SEBI restraining the Company from on boarding new clients and also the penalty of '' 2 Crores as levied by Adjudicating Officer was reduced to '' 20 lakhs. The Company has complied with the aforesaid Order. In furtherance to the above, SEBI had preferred an appeal against the said SAT Order before the Supreme Court and the same is pending.

b) The Company conducts periodic webinars for creating awareness on the compliances under Securities & Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. Also, the Company has a mandatory compliance module on compliances under the said Regulation for all the employees.

With regard to the contra trade, it may be noted that the same were executed by the employees inadvertently. On becoming aware of the same the Compliance Officer issued Warning Letter to the concerned employees. Further, Audit Committee directed that the profit earned and the penalty imposed on the respective employee be disgorged in the IPEF. The same has been complied.

Further, pursuant to Regulation 24A of the SEBI Listing Regulations, the Secretarial Audit Report of material unlisted subsidiary of the Company i.e. IIFL Facilities Services Limited for FY24 is annexed as Annexure- 5.

31. Maintenance of cost records

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

32. Reporting of frauds by Auditors

During FY24, the Statutory Auditors of the Company have not reported any instances of fraud committed in the Company, by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

33. Annual return

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 as amended from time to time, the Annual Return of the Company in Form MGT-7 for FY24 has been placed on the Companyâs website at https://www.indiainfoline.com/securities/flnancials.php .

34. Significant and material order passed by the Regulators or Court or Tribunals

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going-concern status of the Company and its future operations.

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

a) Energy conservation

As the Company is engaged in providing financial services, the information relating to conservation of energy, as required under Section 134 (3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014, is not required to be given. However, initiatives taken by the Company towards energy management are provided in the Business Responsibility and Sustainability Report forming part of this Integrated Annual Report.

b) Technology absorption

The Company keeps itself abreast of the technological advancements in the industry and has adopted the best in class technology across business, operations and functions. The Company is acceleratingthe technology and digital transformation on continuous basis. It stays invested in creating a seamless digital and customer experience across digital touchpoints. our Companyâs focused approach is to keep on enhancing its in-house tech capabilities. Moreover, our Company periodically introduces enhanced features to provide rich and seamless trading experience to its customers. The Company has enhanced IT Disaster Recovery readiness for ensuring resilience and high uptime.

c) Foreign exchange earnings and outgo

The information on 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 as under:

('' In million)
Particulars	FY24	\| FY23
Earning in Foreign Currency	599	275
Expenses in Foreign Currency	321	248

36. 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 SEBI Listing Regulations, the Company has in place a Whistle Blower Policy and established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns or grievances about unethical behaviour, actual or suspected fraud or violation of the Companyâs Code of Conduct or Ethics Policy. Vigil Mechanism provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases. For further details, please refer Report on Corporate Governance forming part of this Integrated Annual Report. The Company has disclosed the Policy on the website of the Company at https://www.indiainfoline.com/securities/reports/IIFL Securities Whistle Blower Policy.pdf.

37. Corporate Governance

A Report on Corporate Governance, along with a certificate from the Secretarial Auditors of the Company, regarding the compliance of the requirements of Corporate Governance, as stipulated under the provisions of Regulation 34 of the SEBI Listing Regulationsâ forms an integral part of this Report.

38. Directorsâ Responsibility Statement:

In compliance with Section 134(5) of the Act, the Board of Directors of our Company, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts for the year ended March 31, 2024, 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 as at March 31,2024 and of the profit of the Company for the year ended on that date;

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 ensured the annual accounts are prepared 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 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.

39. Other disclosures

As no application has been made under the Insolvency and Bankruptcy Code, the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

The requirement to disclose the details of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is not applicable.

The Company has not accepted /renewed any deposits within the meaning of Section 73 of the Act and the rules made thereunder and, as such, no amount of principal or interest was outstanding, as on the Balance Sheet date.

40. Appreciation

The Company wish to place on record deep appreciation, for the contribution made by the employees at all levels for their hard work, commitment and dedication towards the Company. Their enthusiasm and untiring efforts have enabled the Company to scale new heights.

The Company is grateful to all its stakeholders including customers, banker, shareholders, business partner, regulators and communities for staying right beside us in our journey of constant evolution.

Mar 31, 2023

The Directors are pleased to present the Twenty-Eighth Annual Report of IIFL Securities Limited (''the Company'' or ''Our Company'' or ''IIFL Securities'') along with the audited financial statements for the Financial Year (FY) ended March 31,2023.

1. Company Overview

I IFL Securities is one of the largest independent full-service broking house providing diversified financial services and product distribution and is also a SEBI registered Merchant Banker.

The Companyâs retail brokerage and financial product distribution businesses comprises equity, commodities and currency broking, depository participant services, distribution of mutual funds, bonds, portfolio management services (PMS), alternative investment funds (AIFs) and other investment products. These services and offerings do not just enable customers to access the Indian financial capital markets but also provide an integrated interface that allows them to track various portfolio parameters, including the performance of their investments.

The Company''s mobile trading app ''IIFL Markets'' is rated 4.4 on Android and iOS and had over 10.8 million downloads in FY 2022-23 (versus 9.4 million in FY 2021-22). Continuous upgrades and enhancements makes this app the top choice of most customers. The app is preferred by most investors given its superior features, quick transactions and best-in-class user experience.

The Company forms one of the major institutional broking franchises in India with robust research capabilities. During the year, the research team covers 262 stocks across a wide range of sectors and market caps. As of March 31,2023, the combined market cap of stocks under our coverage was about USD 2.4 trillion.

The Company also provides Investment Banking services to corporate and institutional clients and has evolved as a leading domestic investment banker in recent years, engaging in a number of significant Initial Public Offerings (IPOs) and Qualified Institutional Placements (QIPs).

2. Financial summary and highlights

A summary of the Companyâs financial performance for FY ended March 31,2023, is as under

Rs. in Million
Particulars	Standalone		Consolidated
	FY 2022-23	FY 2021-22	FY 2022-23	FY 2021-22
Gross income	12,690.31	1 1,505.20	13,703.85	13,164.11
Profit/(loss) before Depreciation and Tax	4,265.36	4,230.79	4,077.09	4,654.14
Depreciation	(599.89)	(643.09)	(668.36)	(634.56)
Profit/(loss) before tax	3,665.47	3,587.70	3,408.73	4,019.58
Share of Profit/(loss) of associates and joint venture companies	-	-	-	1.45
Provision for Tax	(831.16)	(746.58)	(910.63)	(962.72)
Non-controlling interest	-	-	3.47	2.26
Profit/(loss) after Tax	2,834.31	2,841.12	2,501.57	3,060.57
Balance brought forward from previous year	6,953.08	5,023.54	8,816.45	6,667.30
Appropriation towards dividend paid	(914.56)	(911.58)	(914.56)	(911.58)
Other addition(s)	-	-	-	0.16
Surplus carried forward	8,872.83	6,953.08	10,403.46	8,816.45
Earning Per share on equity share of '' 2/- each
Basic (in '')	9.31	9.37	8.22	10.09
Diluted (in '')	9.24	9.23	8.16	9.94

3. Review of the operations and business, and the state of Company affairs

During the year under review, there was no change in the nature of business of our Company.

Our Companyâs consolidated revenue was '' 13,704 million as against '' 13,164 million in FY 2021-22, an increase of 4 % YoY. The Company earned a net profit after tax (TCI) of '' 2,480 million versus '' 3,057 million in FY 2021-22, registering a YoY decline of 19%.

I. Broking and Distribution

During the year, the average daily market turnover (including F&O) for the broking business was '' 1,536 Billion (BSE NSE), up 95% YoY, and the share of daily cash and total turnover stood at 2.97% (NSE) and 1.00% (NSE), respectively. Broking revenue stood at '' 6,435 million, up 12% on a YoY basis.

Our distribution segment, mainly insurance, AIF and PMS gained good traction during the year. Insurance premiums stood at '' 2,788 million, grew 48% on a YoY basis. AIF AUM increased from ''24.0 billion in FY22 to '' 31.6 billion in FY23 increased by 32% and PMS AUM increased from '' 11.2 billion in FY22 to '' 15.6 billion in FY23 increased by 39% on YoY basis. These segments hold immense promise over the long term growth of the business.

II. Investment Banking

This business had a strong run in FY 2022-23, delivering revenues of 1,287 million driven by consistent mandate wins, coupled with high quality and speedy execution, despite a highly volatile market environment. The investment banking division completed 29 transactions including 12 Initial Public Offers, 3 Qualified Institutional Placements, 6 debt transactions and a number of advisory transactions, buybacks, offer for sale and open offers during the year. The Company has also filed several offer documents for upcoming IPOs and is currently engaged in a number of private equity and other capital market transactions which are in various stages of execution.

As always, superior client focus, unbiased advice and consistent performance continue to result in high repeat business - a hallmark of our Companyâs strategy. Our Company has also expanded the Investment Banking team to capitalise on the market opportunities across Equity Capital Markets and advisory.

4. Dividend

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), our Company has formulated the Dividend Distribution Policy which is available on the

website of the Company at https://www.indiainfoline. com/securities/reports/Dividend Distribution Policy.pdf

During FY 2022-23, the Board of Directors of our Company declared an interim dividend of '' 3 per equity share (i.e. 150% of the face value of '' 2 per share) in accordance with the Dividend Distribution Policy of the Company. This led to an outgo of '' 914.56 million. The same is considered as final.

5. Transfer of unclaimed/unpaid amounts to the Investor Education and Protection Fund (''IEPF'')

In terms of the provisions of Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) and other applicable provisions, all monies remaining unpaid or unclaimed for a period of seven years from the date of transfer to unpaid/unclaimed dividend account, shall be transferred to the IEPF.

Information relating to unclaimed dividend and the due dates by which it can be claimed by the shareholders are as under

Financial Year	Date of declaration of dividend	Last date for claiming unpaid dividend
2019-20	February 07, 2020	March 14, 2027
2020-21	March 10, 2021	April 15, 2028
2021-22	January 24, 2022	March 01,2029
2022-23	January 23, 2023	February 22, 2030

The details of unclaimed/unpaid dividends are available on the website of the Company at https://www.indiainfoline. com/securities/corporate-annoucements.php.

Pursuant to the provisions of Rule 7 of IEPF Rules, Ms. Meghal Shah, Company Secretary of the Company is the Nodal Officer for the purposes of verification of claims and co-ordination with IEPF Authority under IEPF Rules. Details of the Nodal Officer are available on the website of the Company at www.iiflsecurities.com.

Shareholders, whose dividend/shares are transferred to the IEPF, may claim the same by making an application in prescribed form to the IEPF Authority in this regard, details of which are available on www.iepf.gov.in. No claims shall lie against the Company in respect of the dividend/shares so transferred. The members/claimants can file only one consolidated claim in a financial year as per the IEPF Rules.

6. Transfer to reserves

During the year under review, the Company has transferred an amount of '' 14.52 million to the General Reserve.

7. Deposits

8. Commercial Paper

During the FY 2022-23, the Company has issued Commercial Papers (''CPsâ) for margin trading facility.

9. Particulars of loans, guarantees or investments

Particulars of loans extended and investments made are given in the notes 6 and 7 of the Standalone Financial Statements, respectively, for the year ended March 31, 2023 forming part of this Integrated Annual Report.

10. Material changes and commitments affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate till the date of this Report which could have an impact on our Companyâs operations or its status in the future.

11. Share Capital

As on March 31, 2023, the issued, subscribed and paid-up equity share capital of the Company stood at '' 61 1,057,932 (comprising 305,528,966 equity shares of '' 2 each).

During the year under review, the total paid up equity share capital of the Company changed from '' 607,872,460/- to '' 611,057,932/- pursuant to allotment of 1,582,514 equity shares of '' 2/- each under IIFL Securities Limited Employee Stock Option Scheme(s)-2018 and 10,222 equity shares of '' 2 each under IIFL Securities Employees Stock Option 2019-Demerger Scheme to the eligible employees of the Company and the said equity shares rank pari passu with the existing equity shares from the date of allotment.

Further, the Company neither issued equity shares with differential rights as to dividend, voting or otherwise nor any sweat equity shares during the year.

Employees Stock Option Scheme (ESOS)

Our Company has in force the following Employees Stock Option Schemes, prepared in terms of the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

â¢ IIFL Securities Employee Stock Option 2019 -Demerger Scheme ("ISL Demerger Schemeâ).

â¢ IIFL Securities Limited Employee Stock Option Scheme 2018 ("IIFL ESOS Scheme-2018â).

As on March 31, 2023, 251,194 options have lapsed under the ISL Demerger Scheme and the same are not available for further grant. The aggregate number of stock options outstanding as on March 31, 2023, are 12,000 under the ISL Demerger Scheme. As on March 31, 2023, 2,348,115 options have lapsed under

the IIFL ESOS Scheme -2018 and the same have been added back to the pool and are available for further grant. The aggregate number of stock options outstanding as on March 31, 2023, stood at 9,187,309 under the IIFL ESOS Scheme- 2018.

There is no material change in the ISL Demerger Scheme and the IIFL ESOS Scheme - 2018 and the same is in compliance with the Securities and Exchange Board of India (Share based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEBSE Regulationsâ). The disclosures relating to ESOPs required to be made under the provisions of the Act and the rules made thereunder and SBEBSE Regulations are provided on the website of the Company at https://www.indiainfoline.com/ securities/financials.php and the same is available for inspection by the members at the registered office of the Company. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at [email protected], whereupon a copy will be provided.

The relevant disclosures in terms of IND AS 102, relating to share-based payment, forms part of note 32 of the notes to the Standalone Financial Statements and note 41 of the notes to the Consolidated Financial Statements of the Company.

12. Scheme of Arrangement

As part of re-organisation of business, the Board of Directors had approved a Scheme of Arrangement for transfer of IIFL Securitiesâ Online Retail Trading Business (as defined in the Scheme of Arrangement) to the 5paisa Capital Limited ("Resulting Companyâ), so as to consolidate the said business under one single entity (i.e. the Resulting Company). IIFL Securities and 5paisa Capital Limited are part of common promoter group. As part of the process, IIFL Securities being a Listed Company, as well as, an Intermediary has made applications seeking necessary approvals/ making intimations to the stock exchanges and other concerned regulator/authorities, as per the applicable laws, in relation to the proposed Scheme of Arrangement. The petition with Honâble NCLT will be filed thereafter.

13. Environment Social and Governance (ESG)

Globally, the boundaries of ESG performance are evolving and are joining the league of crucial indicators for assessing the holistic development of an organisation. The Companyâs philosophy is to become a value creating business that upholds highest standards of ethics and transparency. The Company aims to become a sustainable organisation by keeping ESG at its core and continuing to positively impact people, planet and profit.

Towards this, the Company has framed an ESG Policy to align its exercise of independent judgment in the identification of ESG risks and opportunities, incorporating ESG in its business activities, and engaging with all stakeholders (both external and internal). The ESG

Policy enshrines the ESG focus area for the Company which includes Environment, Corporate Governance, Customers, Employee, Corporate Social Responsibility and Information and Cyber Security Framework.

The Companyâs approach to ESG is indistinguishably linked to the core objective of the organisation which is to prioritise the stakeholders and empower them. The Company is taking positive strides in its ESG journey and is guided by its values of fairness, integrity and transparency.

The Companyâsâ ESG framework provides the role and responsibilities of the Board of Directors/Board Committees, ESG Committee and the ESG team towards achieving the objectives of being a sustainable organisation. The Company has also framed various policies against the nine principles as per National Guidelines on Responsible Business Conduct (NGBRCs).

The ESG Policy is available at website of the Company at https://www.indiainfoline.com/securities/reports/

FSG Policy.pdf.

14. Corporate Social Responsibility (CSR)

In accordance with the provisions of Section 135 of the Act and rules made thereunder, our Company has adopted a CSR policy indicating the CSR activities that will be undertaken by the Company and its subsidiaries. During the year under review the CSR Policy has been amended and is available on the website of the Company at https://www.indiainfoline.com/securities/reports/

IIFL Securities CSR Policy.pdf.

India Infoline Foundation (hereafter referred to as "IIFL Foundation"), a Section-8 Company under the Act and a wholly owned subsidiary of the Company, acts as the principal arm to undertake CSR initiatives on behalf of the Company and its subsidiaries. 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 form CSR 1 with the Registrar.

IIFL Foundation through its CSR initiatives addresses 5 thematic areas - Health, Education & Environment, Livelihood and Poverty Alleviation, or HELP. The

initiatives undertaken by IIFL Securities, through IIFL Foundation, during FY 2022-23 include upgrading treatment facilities at government hospitals, construction of science laboratories and sanitation facilities at government schools (rural), support to improve the academic outcome of students from government schools in 5 aspirational districts of Rajasthan, program to build foundational literacy and numeracy skills among females from marginalised and vulnerable communities of Rajasthan, supporting the education of children from slums in Mumbai (urban), a retail sales associate training programme for youths from Kashmir and

development of business hub for women to promote entrepreneurship.

IIFL Foundationâs flagship program - Sakhiyon Ki Baadi (SKB), is dedicated to provide foundational literacy and numeracy to out-of-school girls in Rajasthan and facilitate their progression at government schools. IIFL Foundation had conducted an impact assessment of the Sakhiyon Ki Baadi program and the evaluation shows that the said program has helped usher in a positive change in the attitude of the community at large, towards educating females.

5 Aspirational Districts of Rajasthan have been targeted with an aim to improve academic outcome of children enrolled at government schools. For this, IIFL Foundation has partnered with SAMPARK Foundation to execute ''Smart Shaalaâ program, a long term initiative that engages 4.03 lakh students and 11,820 teachers from 5,910 Government schools.

IIFL Foundation has also chosen the Aspirational District of Kupwara, from the union territory of Jammu and Kashmir, to initiate a retail sales associate program for youth to give them skills in the retail sector and subsequently assist them in pursuing a promising career in the field. Along with classroom training sessions, the students are taken on field visits, allowing for exploration and a wider understanding of the sector. The initiative is executed with the significant support of Indian Army officers.

The activities contribute to meet UNâs Sustainable Development Goals (SDGs) - Quality Education (SDG 4), Gender Equality (SDG 5), Reduced Inequalities (SDG 10), Good Health & Well-being (SDG 3) and No Poverty (SGD 1).

In compliance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted Corporate Social Responsibility (''CSRâ) Committee and statutory disclosures with respect to the CSR Committee and Annual Report on CSR Activities is attached as Annexure-1 and forms an integral part of this report.

The highlights of the initiatives undertaken by the Company and IIFL Foundation, form part of this Integrated Annual Report.

15. Nomination and Remuneration Policy

During the year, the Nomination and Remuneration Policy was amended to, inter alia, include applicability of malus and clawback of the remuneration paid in case of

any act of gross negligence and breach of integrity by the Director, KMP or Senior Management Personnel or any other employee.

The Nomination and Remuneration Policy is attached as Annexure-2 and forms an integral part of this report and is also available on the website of the Company at https://www.indiainfoline.com/securities/reports/IIFL Securities Nomination and Remuneration Policy.pdf.

16. Particulars of employees

The disclosures 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 attached as Annexure-3 and form an integral part of this report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaid rules, is maintained and 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 aforesaid information is available for inspection by the members. Any member interested in obtaining a copy thereof, may write to the Company Secretary at [email protected].

17. Prevention of Sexual Harassment (POSH)

In compliance with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on Prevention of Sexual Harassment at Workplace which aims to provide protection against sexual harassment to women, at the workplace, and prevent and redress complaints of sexual harassment and matters connected therewith and incidental thereto. The said Policy has been uploaded on the internal portal of the Company for information of all employees.

Furthermore, the Company has constituted an Internal Complaints Committee (ICC) to consider and resolve all sexual harassment complaints reported by women. The ICC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Committee includes external members with relevant experience for handling complaints under the said Policy. The Policy includes the scope, complaint mechanism along with contact details of the Committee members for raising any grievance/ complaint under the said Policy. The Company provides

mandatory online training on POSH for all employees, including new joinees.

The details of sexual harassment complaints that were filed, disposed off and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Integrated Annual Report.

18. Subsidiary, Associates and Joint Venture Companies

As on March 31, 2023, the Company has eleven subsidiaries (including step-down subsidiary) and has no associate and joint venture companies. The following are the subsidiaries located in India and overseas

Sr. No.	Name of the domestic subsidiary
1	IIFL Facilities Services Limited*
2	IIFL Management Services Limited*
3	Livlong Insurance Brokers Limited (Formerly IIFL Insurance Brokers Limited)*
4	Livlong Protection and Wellness Solutions Limited (Formerly IIFL Corporate Services Limited)(Formerly IIFL Asset Reconstruction Limited)
5	India Infoline Foundation* (Section 8 Company)
6	Shreyans Foundations LLP (Step down subsidiary company)
7	Meenakshi Towers LLP
8	IIFL Securities Services IFSC Limited*
9	IIFL Commodities Limited*
Name of the foreign subsidiary
10	IIFL Wealth (UK) Limited*
11	IIFL Capital Inc.*

*Wholly-owned subsidiary

During FY 2022-23, no company has become or ceased to be subsidiary, joint venture or associate company of the Company.

IIFL Facilities Services Limited is a material subsidiary of the Company as per Regulation 16 of SEBI Listing Regulations. The Board of Directors of the Company have approved a Policy for determining material subsidiaries which is in line with the SEBI Listing Regulations as amended from time to time. The Policy has been uploaded on the Companyâs website at https://www.indiainfoline. com/securities/corporate-governance.php.

In accordance with Section 136(1) of the Act, the financial statements including consolidated financial statements and all other documents required to be attached thereto and audited annual accounts of subsidiary companies are available on the Companyâs website at https://www.indiainfoline.com/securities/financials. php. 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 respective subsidiaries, except on Saturdays, Sundays and Public Holidays. The Annual Report of all the subsidiaries will be uploaded on the website of the Company at https://www.indiainfoline.com/securities/ financials.php.

19. Financial performance of the major subsidiary of

the Company

The performance in brief of the major subsidiary

companies is given hereunder

I. IIFL Facilities Services Limited ("IFSL")

IFSL is engaged into providing office and related infrastructure and facility services catering mainly to group companies and outsiders and allied services. During the FY 2022-23, the total income and total comprehensive income of IFSL stood at '' 727 million and '' 263 million as compared to '' 1,612 million and '' 462 million in FY 2021-22, respectively.

II. Livlong Insurance Brokers Limited (formally ''IIFL Insurance Brokers Limited'') ("LIBL")

LIBL is registered with Insurance Regulatory Development Authority as Direct Broker for providing insurance broking services. During the FY 2022-23, the total income and total

comprehensive income of LIBL stood at '' 714 million and '' 264 million as compared to '' 516 million and '' 227 million in FY 2021-22, respectively.

III. Livlong Protection and Wellness Solutions Limited (Formerly IIFL Corporate Services Limited) (Formerly IIFL Asset Reconstruction Limited) (LPWSL)

LPWSL is mainly into solving healthcare need of customers by leveraging technologies. During the FY 2022-23, the total income and total comprehensive loss of LPWSL stood at '' 267 million and '' 104 million as compared to '' 29 million and '' 51 million in FY 2021-22, respectively.

IV. IIFL Management Services Limited ("IMSL")

IMSL is mainly into providing property advisory, consultancy and is a Manager to Alternate Investment Fund. During the FY 2022-23, the total income and total comprehensive income/(loss) of IMSL stood at '' 465 million and ('' 259) million as compared to '' 368 million and '' 33 million in FY 2021-22, respectively.

V. IIFL Capital Inc. ("IIFL Capital")

IIFL Capital is engaged in the business of Advisor and Financial Services. During the FY 2022-23, the total income and total comprehensive income of IIFL Capital stood at '' 136 million and '' 14 million as compared to '' 114 million and '' 7 million in FY 2021-22, respectively.

CONSOLIDATED FINANCIAL STATEMENTS

have been prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India.

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries Companies is given in Form AOC-1 as Annexure-Aâ of the Consolidated Financial Statements and forms an integral part of this Report.

20. Management Discussion and Analysis Report

In accordance with Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Integrated Annual Report.

21. Business Responsibility and Sustainability Report

Pursuant to Regulation 34(2) of the SEBI Listing Regulations the Business Responsibility and Sustainability Report describing the initiatives taken by the Company, from an environmental, social and governance perspective, forms part of this Integrated Annual Report.

22. Directors and Key Managerial Personnel (KMP) Directors

The complete list of Directors of the Company has been provided in the Report on Corporate Governance forming part of this Integrated Annual Report. During the year under review, there was no change in the composition of the Board of Directors of the Company.

are detailed in the Report on Corporate Governance forming part of this Integrated Annual Report.

Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year

During the year there was no new appointment of Independent Director on the Board of the Company.

Retirement by rotation

In accordance with the provisions of Section 152 of the Act and the Companyâs Articles of Association, Mr. Narendra Jain (DIN: 01984467), Director retires by rotation at the forthcoming Annual General Meeting (AGM) and being eligible, offers himself for re-appointment. The Board recommends the proposal of his reappointment for the consideration of the Members of the Company at the forthcoming AGM and same has been mentioned in the Notice convening the AGM. A brief profile of Mr. Narendra Jain has also been provided therein.

Key Managerial Personnel

During the year under review, there was no change in the Key Managerial Personnel of the Company. As on March 31, 2023, Mr. R. Venkataraman - Chairman and Managing Director, Mr. Narendra Jain -Whole-Time Director, Mr. Ronak Gandhi- Chief Financial Officer and Ms. Meghal Shah- Company Secretary & Compliance Officer are the Key Managerial Personnel in terms of the provisions of the Act and rules made thereunder and the SEBI Listing Regulations.

23. Meetings of Board/Committee

The Board/Committee meetings are pre-scheduled and the agenda and minutes of the Board/Committee meetings are circulated within timelines to ensure meaningful participation. Only in the case of special and urgent business, should the need arise, the Boardâs approval is taken by passing resolutions through circulation, as permitted by law, which are noted in the subsequent Board/Committee meeting. In certain special circumstances, the meetings of the Board are called at a shorter notice to deliberate on business items which require urgent attention of the Board. The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India on Board meetings.

The Board met 5 times during the year under review and has accepted all recommendations made to it by various Committees.

The details of the number of meetings of the Board held during the FY 2022-23 and the attendance of Directors forms part of the Report on Corporate Governance.

24. Committee of the Board

The Board of Directors as on March 31, 2023 had the following committees:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Stakeholdersâ Relationship Committee

d) Corporate Social Responsibility Committee

e) Risk Management Committee

f) Finance Committee

g) Independent Directorsâ Committee

h) ESG Committee

The Board had constituted an Buy-back Committee (Adhoc Committee) to do all such acts, deed, matters, and things in connection with Buyback of equity shares of the Company. During the year, the Buy back Committee was dissolved. Further, the Board of Directors at its meeting held on April 24, 2023, constituted Information Technology Committee and Cyber Security Committee. The details of the Committees of the Board along with their composition, number of meetings and attendance at the meetings are provided in the Report on Corporate Governance forming part of this Integrated Annual Report.

25. Risk management

Risk management is important to define, assess and track business threats and obstacles throughout the organisation. Towards this, our Company has adequate measures in place and has adopted a comprehensive Enterprise Risk Management ("ERM") Policy and Framework duly approved by Risk Management Committee and the Board of Directors which encompasses identification, analysis, mitigation and control of various type of risks for achieving its key business objectives. The ERM Framework outlines details of some contents that have been incorporated in the ERM Policy.

The Companyâs ERM framework is aligned to the Committee of Sponsoring Organisations of the Treadway Commission (COSO) 2017 ERM Framework. Our Company has adopted the practices of ISO 31000 Risk Management Standard, integrated with organisationâs strategy and business objectives. The ERM framework comprises risk such as Strategic risk, Market risk, Credit risk, Financial risk, Fraud risk, Legal risk, Compliance risk, Operational risk, Reputational risk, People risk, Governance risk, Technology risk, Cyber Security risk, Third party risk, ESG risk, Regulatory risk, Liquidity risk and Competition risk.

Our Company has adopted the ''Three lines of defenseâ as part of the risk governance framework. The following diagram illustrates it.

A risk governance framework is characterised by

â¢ Broad risk management competency throughout the organisation with a consensus that risk management is everyoneâs responsibility

â¢ A well informed Board of Directors

â¢ Appropriate risk committees and sub-committees with clearly defined roles and responsibilities

â¢ ERM team with effective leadership qualitative and quantitative skills

â¢ Effective risk management leaders undertaking coordinated efforts throughout the business

â¢ A common risk language in support of a consistent enterprise-wide view of risk

The ERM framework contains explicit indicators that

result in identification, establishment, monitoring and

reporting of Key Risk Indicators (KRIs) and set their

thresholds level for such KRIs/metrics.

Business continuity plan

The Company has a Business Continuity Management (BCM) Policy duly approved by the Risk Management Committee and the Board of Directors.

The purpose of the Policy is to formalise the business continuity program of the Company and to provide guidelines for developing, implementing, exercising, and maintaining specific business continuity plans for the respective departments of the Company. More importantly, the Policy seeks to provide for the recovery of critical and important processes in accordance with pre-established timeframes, restoration of the processing site and ultimately return to a permanent operating environment. BCM Policy is aligned with ISO 22301 Business Continuty Management System Standard and SEBI Guidelines.

Apart from Policy, our Company has a robust Business Continuity Framework in place, consisting of Crisis Management Team, Business Continuity Steering Committee, detailed Business Continuity Planning (BCP), BCM charter, Information Technology Disaster Recovery (IT DR) Plan, BCM Procedure, Business Impact Analysis (BIA), Risk Assessment and BCM Awareness. In terms of the Policy, the BIA are required to be updated regularly to determine the adequacy of recovery strategies. The strategies for recovery of critical and important processes are required to be updated in BCP Periodic High Availability tests and IT DR Drill tests are also carried out.

Risk register

The Company maintains a risk register for all the departments/functions which act as a repository for all risks identified and evaluate the controls put in place to arrive at the residual risk and develop mitigation measures as may be required. The Company also maintains an incident register and tracker which, inter alia, includes the details of the incident occurred, its impact on the business, corrective action and preventive measures taken thereon, etc. Identified risks and incidents are presented before the Risk Management Committee.

Role of Board of Directors: The Board of Directors is responsible for monitoring the risk management policy/ framework. It reviews the risk policy and ensures that appropriate systems and controls are in place.

Role of Risk Management Committee (RMC): RMC is

responsible for formulation of the detailed ERM policy/ framework and monitor and oversee its implementation. It ensures that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company. The appointment, removal, and terms of remuneration of the Risk Officer is subject to review by RMC. The Board is informed of the discussions of RMC, its recommendations and actions to be taken. The details of composition and meetings of RMC are covered under the Corporate Governance Report forming part of this report.

Role of Risk Officer (RO): RO is responsible for overseeing the risk management activities. RO periodically reviews the ERM policy/framework, monitors and oversees its implementation, process for systematic identification, assesses all the risks and updates RMC on the risks identified and the assessment and mitigation controls relating thereto. RO conducts internal meetings with the Risk Owners/Functional Heads on ERM initiative and updates the management on the progress/status of the same on a quarterly basis.

Role of Risk Management Department: The Company has in place a Risk Management Department for development and maintenance of overall risk management infrastructure. It facilitates implementation of the ERM policy and collate and review risk assessment prepared by the RO/Functional heads. It also maintains and updates the risk register and creates awareness on the risk management process/ practices for the identified stakeholders periodically. Further, it reports risk and risk management measures to RMC. The Risk Management Department is responsible for ensuring compliance with regulations and continuously improving the risk management process.

Role of Risk Owners and Functional Heads: Each Risk owner/Functional head is responsible for their respective risk i.e., risk identification, mitigation, implementation of the controls and any other matter relating thereto and update the Risk Management Department on the same. Further, Risk owner/Functional heads prepare a Risk Report advising on the results and residual risks and recommending further action.

26. Annual evaluation of the Board

Pursuant to the requirement of the Act and the SEBI Listing Regulations and SEBI circular dated January 5, 2017 which provides further clarity on the process of board evaluation ("SEBI Guidance Note"), the Company has a Performance Evaluation Policy duly approved by the Nomination and Remuneration Committee specifying

the criteria and process for effective evaluation of Board, its Committees and individual Directors.

In accordance with the aforesaid Policy, the performance evaluation was carried out on the basis of structured questionnaire comprising of evaluation criteria, through peer evaluation, excluding the Director being evaluated. The Independent Directors Committee of the Company met on February 28, 2023, inter alia, to review the performance of Non- Independent Directors, the Board of Directors as a whole and the Chairman of the Company. The performance evaluation of the Committees and the Independent Directors was carried out by the entire Board excluding the director being evaluated. Based on such evaluation, the Board is of the view that all Independent Directors are having requisite knowledge, expertise and experience in their respective areas and good understanding of the Companyâs business and the industry in which it operates. They devote quality time to understand key issues relating to business of the Company and their valuable contribution has certainly improved the governance standards within the Company.

The criteria for evaluation of performance of Independent Directors, inter alia, includes the following

a. Relevant knowledge, expertise and experience

b. Maintaining Independence as specified under section 149(6) of the Companies Act, 2013 and regulation 16(I)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and no conflict of interest

c. Level of participation and contribution to the performance of Board/ Committee(s) meetings

d. Adherence to ethical standards and code of conduct for Independent Directors

e. Exercising objective independent judgment in the best interest of the Company

f. Raising valid concerns to the Board and constructively contributing to the resolution of issues at the meeting

g. Ability to contribute and monitor corporate governance practices

The Directors have expressed their satisfaction of the evaluation process.

27. Internal financial controls

financial information. Such internal financial controls over financial reporting were operating effectively during the year.

Further, the Statutory Auditors have confirmed that the internal financial controls systems over financial reporting are adequate and the same is annexed with Independent Auditorâs Report.

28. Quality initiatives

Our Company continues to sustain its commitment to the highest levels of quality, superior service management, robust information security practices and mature business continuity management. Our Company has successfully completed ISO 27001:2013 (ISMS) recertification audit in January 2023.

The Company has Complied with respect to various applicable laws and regulations in terms of technology, business continuity management and information and cyber security.

Our Company has strengthened its information and cyber security mechanisms and other risk measures to mitigate potential threats, risks and challenges. Our Company has cyber insurance cover to protect from financial losses.

Our Company has initiated Secure Code Review of Critical Broking Applications. It has further enhanced Vulnerability Management program with introduction of Black Box, Grey Box and White box testing exercise. Additionally, our Company has implemented Endpoint Access Management tool for security enhancement.

Our Company believes in skill development, hence various e-learning modules on technology and other business areas have been enabled for employees through online training.

29. Contracts and arrangements with Related Parties

Our Company have put in place a policy for Related Party Transactions (RPT Policy), which has been approved by the Board of Directors and amended from time to time. The Policy provides for identification of RPTs, necessary approvals by the Audit Committee/Board/Shareholders, reporting and disclosure requirements in compliance with the Act and provisions of the SEBI Listing Regulations. The said Policy may be accessed on the website of the Company at https://www.indiainfoline. com/securities/reports/Related120521 1.pdf.

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 entered into in accordance with the RPT Policy of the Company.

During FY 2022-23, the Company has entered into material contract/arrangement/transaction with related parties within the maximum limit approved by the Members of the Company at its meeting held on July 12,

2022. As there is no outstanding balance as at March 31,

2023, the disclosure in Form AOC-2 as prescribed under the Act has not been made. You may refer to note no. 35 and note no. 42 to the Standalone Financial Statements and Consolidated Financial Statements respectively, for the related party disclosures.

The Company has also engaged an independent Chartered Accountant firm for reviewing and confirming that the related party transactions entered into by the Company are in compliance with the provisions of the Companies Act, 2013 and Rules made thereunder and the SEBI Listing Regulations and a certificate to that effect is placed before the Audit Committee every quarter.

30. Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Act, read with the Companies (Audit and Auditors) Rules, 2014, M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 109208W), were appointed as the Statutory Auditors of the Company for a second term of five years, from the conclusion of the 27^th AGM till the 32^nd AGM, at such remuneration mutually agreed and approved by the Board.

During the year, the statutory auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013 and the Code of Ethics issued by the Institute of Chartered Accountants of India.

31. Secretarial Audit and their Report

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Nilesh Shah and Associates, Company Secretaries in Practice for conducting the Secretarial Audit for FY 2022-23. The Secretarial Audit Report of the Company is annexed as Annexure-4. The Secretarial Auditor has not expressed any qualification, reservation, adverse remark in their Secretarial Audit Report for the year under review. The Secretarial Auditor has mentioned about the following events in their Report

1) In an investigation in the matter of trading activities in the scrip of ICICI Lombard General Insurance Co. Ltd. during the period April 01, 2019 to September 30, 2019, it was held by the Adjudicating Officer that the Company has violated provisions of

Clauses A(3) to A(4) of Code of Conduct as specified under Schedule II read with Regulation 9(f) of the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992 and levied penalty of '' 2,500,000/- on the Company;

2) In the matter of various inspections conducted during 2011-2014 and 2015-2017, pursuant to SEBI circular no. SMD/SED/CIR/93/23321 dated November 18, 1993, the SEBI has passed two separate adjudication order levying penalty of '' 10,000,000/- each for failure to segregate its own funds from client funds, misusing credit balance of client funds for debit balance client funds; and not appropriately designating client bank accounts. The Company preferred an appeal before the Securities Appellate Tribunal (SAT) and the same is pending with SAT.

3) During the inspection of Merchant Banking activities, the Company has received an administrative warning in the matter of one of the IPO, for violating the provisions of Regulation 24(3) of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 read with the Securities and Exchange Board of India (Merchant Bankers) Regulation, 1992 for not conducting site visit;

4) During the inspection of Merchant Banking activities, the Company has received an administrative warning for not maintaining time stamp and audit trail for Structured Digital Database (SDD) as required under Regulation 3(5) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 as applicable to an intermediary.

Management response

1) IIFL Securities had executed trades in ICICI Lombard General Insurance Co. Ltd. in the block window on behalf of reputed institutional investors. SEBI initiated adjudication proceedings contending that the sale of the residual quantity influenced the block window price. The Company had put forward its case that the trade was genuine with all buyers and the seller with the instructions of the clients, no proprietary trading was done in the scrip. Therefore, there can be no unfair trade practice when there is no unfairness either to the buyer or the seller. The Company had complied with the order and paid the amount, considering the cost and time involved in the litigation.

2) The matter pertains to two separate inspections carried out by SEBI for different periods viz. 20112014 and 2015-2017 to verify the compliance relating to the monitoring of clientsâ funds. Although the inspection was for the past period, SEBI applied the new methodology prescribed vide SEBI Circular on enhanced supervision dated September 26, 2016

regarding monitoring of clientsâ funds calculation retrospectively. Accordingly, the Company responded that the allegations are improper and not in line with the industry wide practice followed since 1993 to June 30, 2017 by all the brokers. In this regard SEBI passed two separate Adjudication Orders dated May 20, 2022 and May 30, 2022 levying a penalty of '' 10,000,000/- each on the Company. Further, aggrieved by the said orders, the Company preferred to appeal before the Securities Appellate Tribunal (SAT) and the same is pending with SAT.

3) The Company generally do conduct physical site visits as part of its due diligence process. However, in given transaction, physical site visits were not undertaken due to the onset of the COVID 19 pandemic. As a part of the due diligence process the Company had conducted virtual meetings/ interactions with the client company to develop an understanding of the business, industry and the regulatory environment. These interactions included online due diligence meetings, online drafting sessions and conference calls to discuss and draft disclosures in the DRHP and same was informed to SEBI.

4) I n accordance with SEBI (PIT) Regulations, 2015, SDD was implemented by the Company. Further, a detailed Working Group List is being made at the start of each transaction capturing the deal team details involved in the specific transaction. However, as directed by SEBI, the Company had initiated the process of capturing prescribed information of specific deal team members in SDD along with maintaining the same in the Working Group List.

32. Maintenance of cost records

33. Reporting of frauds by Auditors

During FY 2022-23, the Statutory Auditors of the Company have not reported any instances of fraud committed in the Company, by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

34. Annual return

7 for FY 2022-23 has been placed on the Companyâs website at https://www.indiainfoline.com/securities/ financials.php

35. Significant and material order passed by the Regulators or Court or Tribunals

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going-concern status of the Company and its future operations.

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

a) Energy conservation

As our Company is engaged in providing financial services, the information relating to conservation of energy, as required under Section 134 (3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014, is not required to be given. However, initiatives taken by our Company towards energy management are provided in the Business Responsibility and Sustainability Report forming part of this Integrated Annual Report.

b) Technology absorption

The management remains updated with the latest technological advancements in the industry and embraces cutting-edge technology across the organisationâs business processes, operational infrastructure and functional areas. Our Company periodically introduces enhanced features to provide rich and seamless trading experience to its customers. Further, Our Company leverage technology in all aspects of the customer lifecycle i.e. right from onboarding to providing customer service through various means like chatbots for faster resolution of their queries/concerns.

c) Foreign exchange earnings and outgo

The information on 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 as under

('' In Million)
Particulars	FY 2022-23	FY 2021-22
Earnings in foreign currency	275.12	355.25
Expenses in foreign
currency	247.53	115.50

37. 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 SEBI Listing Regulations, the Company has in place a Whistle Blower Policy and has established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns or grievances about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. Vigil mechanism provides adequate safeguards against victimisation of persons who use such mechanism and also make provision for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases. For further details, please refer Report on Corporate Governance forming part of this Integrated Annual Report. The Company has disclosed the Policy on the website of the Company at https://www.indiainfoline.com/securities/reports/IIFL Securities Whistle Blower Policy.pdf.

38. Corporate Governance

39. Directors'' Responsibility Statement

In compliance with Section 134(5) of the Act, the Board of Directors of our Company, to the best of their knowledge and ability, confirm that

a) in the preparation of the Annual Accounts for the year ended March 31, 2023, 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 as at March 31, 2023 and of the profit of the Company for the year ended on that date

d) the Directors ensured the annual accounts are prepared 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 operating effectively

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

40. Other disclosures

41. Appreciation

The Company wish to place on record deep appreciation, for the contribution made by the employees at all levels for their hard work, commitment and dedication towards the Company.

The Company is grateful to all its stakeholders including customers, bankers, shareholders, business partners, regulators and communities for staying right beside us in our journey of constant evolution.

Mar 31, 2022

The Directors are pleased to present the Twenty-Seventh Annual Report of IIFL Securities Limited (''the Company or ''IIFL Securities'') along with the audited financial statements for the Financial Year (FY) ended March 31,2022.

1. Financial performance

The table below summarizes the financial performance of your Company for FY ended March 31,2022:

('' in million)
Particulars	Standalone		Consolidated
	FY2021-22	FY2020-21	FY2021-22	FY2020-21
Gross Income	1 1,505.20	7,600.79	13,164.11	8,676.20
Profit/(Loss) before Depreciation and Tax	4,230.79	2,666.22	4,654.14	3,304.47
Depreciation	(643.09)	(442.92)	(634.56)	(458.76)
Profit/(Loss) before Tax	3,587.70	2,223.30	4,019.58	2,845.71
Share of profit/(loss) of associates and joint ventures	-	-	1.45	1.63
Exceptional items	-	-	-	-
Provision for Tax	(746.58)	(494.86)	(962.72)	(644.29)
Impact of change in rate on opening deferred tax	-	-	-	-
Non-controlling interest	-	-	2.26	0.30
Profit/(Loss) after Tax	2,841.12	1,728.44	3,060.57	2,203.35
Balance brought forward from previous year	5,023.54	3,598.04	6,667.30	4,766.89
Appropriation towards dividend paid	(911.58)	(302.94)	(911.58)	(302.94)
Dividend Distribution Tax	-	-	-	-
Other Addition	-	-	0.16	-
Surplus carried forward	6,953.08	5,023.54	8,816.45	6,667.30
Earnings per share on equity shares of '' 2 each
Basic (in '')	9.37	5.46	10.09	6.97
Diluted (in '')	9.23	5.42	9.94	6.91
The table below summarizes the financial performance of the major subsidiaries of the Company for FY ended March 31,2022: ('' in million)
Name of the Company			Revenue 1	Profit after Tax
IIFL Facilities Services Limited			1,612.50	461.90
Livlong Insurance Brokers Limited (formally ''IIFL Insurance Brokers Limitedâ)			516.18	227.13
IIFL Management Services Limited			368.08	32.51
IIFL Capital Inc.			114.09	6.51

2. Macro-economic overview

Indian economy has emerged strongly from a pandemic induced, technical recession witnessed in FY21. Industry and services, two key pillars of the economy witnessed steady recovery during the year under review. Growth-oriented policies of the central government, along with the accommodative stance of the Reserve Bank of India (RBI) helped this improvement. Reducing interest rates, all-encompassing stimulus measures and rapid vaccination were other key enablers for economic recovery. Indiaâs economy is expected to

grow by 8.9% in FY22 as compared to a contraction of 6.6% in FY21.

According to the survey report of RBI, economic growth could moderate to 7.5% in FY23. However, India will still remain the fastest growing major economy in the world during 2021-24, going by the projections of the World Bank and the International Monetary Fund.

Gains from supply-side reforms, sustained export growth, and availability of budgetary space to ramp up

capital spending will all contribute to growth in FY23. The year ahead looks promising for private sector investment, with the banking system in a strong position to help the economy recover.

On the flip side, persistent supply-side bottlenecks, steadily rising international crude oil prices, increasing raw material costs and rising inflation could pose challenges for economic growth. Emergence of any new variant/s of coronavirus and the ongoing geopolitical crisis owing to the Russia-Ukraine war must be monitored closely. In this scenario, it is anticipated that the RBI will start hiking rates soon.

3. Industry overview

Indian equities outperformed peers in both Asian markets and developed markets during 2021. Favorable macro-economic performance aided market rally in the first nine months of the fiscal. In the last quarter, though, Indian equities remained under pressure, in sync with the trends in global markets. Uncertainty arising from the Russia-Ukraine war, monetary tightening in the US as well as in India, surging bond yields, and spike in commodity prices (including crude oil) were the key pressure points.

For the full fiscal, Indian equity markets outperformed the broader EM indices, with the Nifty 50 increasing by 18.9% and NIFTY 500 rising 21%. Robust corporate earnings, sufficient liquidity in both international and local markets, increasing internet penetration as well as retail engagement were prominent drivers of the rise in equity market activity. During FY22, the average daily turnover in the cash market increased 9.6% YoY to '' 725 billion, from '' 663 billion in FY21.

SEBI data indicates that the average new demat accounts opened per month have increased from 41 million in FY20 to 55 million FY21, and to 90 million in FY22. This metric has more than doubled since FY20, reflecting growing participation of retail investors in the equity markets. Systematic Investment Plans or SIPs have been the most preferred investment vehicle of retail investors, and continued to witness healthy inflows during the year. This trend has culminated into reversal of roles between foreign institutional investors (FIIs) and domestic institutional investors (DIIs), with the latter now taking the driverâs seat. In the year under review, FIIs were net sellers of emerging market equities (including India), while DIIs have been consistently buying Indian shares every month since March 2021. Net DII inflows into equities were '' 2,021 billion during FY22.

Above factors led to a surge in the Assets Under Management (AUM) of Indian mutual funds, especially post May 2020. Data from Association of Mutual Funds of India (AMFI), shows that the industryâs total AUM has increased from '' 31,428 billion in March 2021 to '' 37,567 billion in March 2022. In March 2022, the SIP inflows

reached a new all-time high of about '' 123 billion. This translates to average monthly inflows of '' 104 billion for the year, versus '' 79 billion recorded in FY21.

In this scenario, it is not surprising that FY23 is estimated to be a record year for the brokerage industry (Source: ICRA). According to a recent report by ICRA, the industry is expected to generate total revenue of '' 27,000-28,000 crore in FY22, growing 28-33% over the preceding year. With a projected industry turnover of '' 28,500-29,000 crore in FY23, revenue growth could moderate to 5-7%; though growth will largely be dependent on performance of the capital markets.

4. Review of the operations and business, and the state of Company affairs

During the year under review, there was no change in the nature of business of the Company.

Your Companyâs consolidated revenue was '' 13,164.11 million as against '' 8,676.20 million in FY21, an increase of 52 % YoY. The Company has earned net profit after tax (TCI) of '' 3,056.71 million versus '' 2,210.36 million in FY21, registering a YoY growth of 38%.

I. Broking and Distribution

IIFL Securities remains one of the leading players in this business, across both retail and institutional segments. Its wide range of offerings cater to customers across the segments of equities, commodities & currency broking, mutual fund distribution, life and general insurance distribution, depository participant services, portfolio management services, structured products and investment banking.

Your Company continues to become truly digital with an unwavering aim of providing customers with a superior, state-of-the art digital experience.

During the year, the average daily market turnover (including F&O) for the broking business was '' 788.05 billion (BSE NSE), up 166% YoY, and the share of daily cash and total turnover stood at 2.7% (NSE) and 1.1% (NSE), respectively. Retail broking revenue stood at '' 4,106 million, up 35% on a YoY basis.

Mutual Funds and Insurance segments gained good traction during the year. Insurance premiums stood at '' 1,880 million, growing 29% on a YoY basis. Mutual Fund AUM stood at '' 71.3 billion, up 38% on a YoY basis. Both these segments hold immense promise over the long term. FY22 was a record year for the institutional equities business, with revenues surging more than 30% on a YoY basis. Continued market share gains, improvement in yields, better product mix and jump in market volumes are key contributors to the revenue growth. During the year, secondary market activity was buoyed by large inflows into equity mutual funds.

Your Companyâs research business too witnessed healthy momentum in the year under review. The team initiated coverage on 26 companies, issued 36 initial public offer (IPO) reports and produced close to 1,400 research notes. The Companyâs research continues to be ranked among the top in the industry.

The Companyâs mobile trading app ''IIFL Marketsâ is rated 4.4 on Android and iOS, and has over 9.4 million downloads in FY22 (versus 2.3 million in FY21). Continuous upgrades and enhancements makes this app the top choice of most customers. The app is preferred by most investors given its superior features, quick transactions and best-in-class user experience.

II. Investment banking

This business had a strong run in FY22 with revenues increasing 104% on a YoY basis, driven by a robust deal environment, consistent mandate wins coupled with high quality and speedy execution. The investment banking division completed 39 transactions including 17 Initial Public Offers, 7 Qualified Institutional Placements, 5 debt transactions and 10 advisory transactions including private equity advisory, preferential allotments and open offers during the year. The Company has also filed several offer documents for upcoming IPOs and is currently engaged in a number of private equity and other capital market transactions which are in various stages of execution.

As always, superior client focus, unbiased advice and consistent performance continue to result in high repeat business - a hallmark of your Companyâs strategy. Your Company has expanded its product portfolio this year and will continue do so in sync with the evolving needs of customers. It will make the requisite investment needed to enhance its people and process capabilities, to drive overall growth.

IN. Response to COVID-19 challenges

While COVID-related challenges persisted in FY22, they were for relatively smaller periods as compared to FY21 and did not necessitate complete lockdown. Nonetheless, leveraging the learnings from FY21, your Company implemented the best practices to ensure the safety and well-being of employees and other stakeholders.

Your Companyâs operations continued smoothly, backed by its seamless and robust technology and well-established processes.

Your Company focused on further cementing its bonds with customers, providing the best working environment to its people. Its strong balance sheet, profitability and resilient business model enabled it to combat COVID-related challenges efficiently.

5. Key initiatives/developments

I. Acquiring customers at a faster speed

IIFL Securities provides one of the fastest account opening facility among peers, at 3 minutes and 18 seconds. This has been made possible because of the best-in-class technologies adopted by the Company such as Facematch, OCR, Liveliness check, etc. These technologies act as tools for simplification and optimization of customer interactions and transactions. Consequently, customer acquisition has doubled over FY21 and 61.5% accounts were opened without any document upload or manual intervention. Your Companyâs omnichannel single KYC stack serves dual purposes of acquiring online Do-It-Yourself (DIY) customers, and assisting its B2B partners to acquire clients.

In an industry first move, your Company launched WhatsApp-based end-to-end account servicing during the year. This offering encompasses opening of demat account, servicing customers and ensuring seamless transactions.

II. Transaction simplification, revamp of user experience and analytics

In sync with its focus on providing superior experience to users, your Company offers its customers an array of facilities, namely, real-time margin benefit on pledging of stocks, seamless eDIS within a few clicks, among others. The team works continuously to identify and address areas where user experience can be improved. It is not surprising then that your Companyâs app is one of the highest rated trading apps in the country with a rating of 4.4.

During the year under review, total number of active users of the app have doubled to 1 million. Your Companyâs net banking transactions have grown 15%. At the same time, there has been a 3X increase in UPI transactions with a turnaround time of less than a minute. Other important metrics such as client activation ratio and mobile traded clients have increased by 3.4X and 110%, respectively, during the year. This growth is a combined outcome of initiatives such as real-time monitoring of user behavior and personalized nudges aimed at driving user engagement.

III. Customer servicing through WhatsApp

During the year, your Company completely revamped its WhatsApp communication channel. Some of the best-inclass features in WhatsApp include IPO investing, access to reports, FAQs, etc. The IIFL Help servicing portal, your Companyâs one-stop shop for all query resolution witnessed continued traction, leading to 40% reduction in contact ratio.

IV. Derivatives

Your Company witnessed a 4X increase in derivative turnover, largely due to enhanced product offerings. Some of the prominent offerings include industryâs

first gamified options feature - Option House, one-click activation of derivatives segment, simplified search and trading view charting tool.

V. Fintech ecosystem

During the year, your Company further fortified its fintech collaborations with the aim of driving richer functionality, cohesive experience, and access to multiple investment products. Some of the prominent ones include global investing, wealth baskets, tax filing, ETFy, golden Pi for secondary market bonds and algo Trading platforms powered by IIFLâs robust open APIs.

VI. Acquisition of stake in Rajen Chandrakant Securities Private Limited ("RCSPL").

During the year under review, your Company has executed a binding term sheet with M/s. Rajen Chandrakant Securities Private Limited ("RCSPL") and its existing shareholders for the acquisition of 100% stake in RCSPL, subject to requisite regulatory approvals.

RCSPL is a private company, registered with Securities & Exchange Board of India (SEBI) as a market participant and a broking member with the National Stock Exchange of India (NSE) and as a depository participant with Central Depository Services Limited (CDSL).

Requisite application has been made in this regard. No Objection Certificate (NOC) from NSE has been received. Approval from CDSL and SEBI is under process.

VII. Launch of Alternate Investment Fund (AIF) business

During the year, your Company through its subsidiary has entered AIF business. This year 2 AIFâs were launched, one in listed space i.e IIFL Securities Dynamic Fund (SEBI Registered Category III Alternative Investment Fund) and other in unlisted/start up space i.e. IIFL Securities Capital Enhancer Fund (SEBI Registered Category II Alternative Investment Fund). There has been significant interest shown by the clients in both these products.

VIII. Enterprising India Investor Conference

For the second year in a row, your Companyâs flagship event - Enterprising India Investor Conference was held virtually. CEOs of 48 companies presented at the event which witnessed healthy participation.

Your Company also hosted the first physical event in almost two years at Chennai, webinars with 20 specialist speakers, a virtual conference focused on the chemicals sector and a thematic conference on rural recovery. Your Company also conducted 26 corporate roadshows and managed 12 client trips during the year.

Further, your Company hosted its business partners for its annual event, ''Fanfare 2022â at the Taj Mahal Palace, Mumbai. More than 100 partners participated in the grand gala night which witnessed many memorable

moments. Seasoned investor and market veteran, Mr. Madhu Kela provided several insights to all advisors.

IX. Awards and Accolades

The Directors are happy to report that during the year, your Company has been recognized and felicitated for its exemplary performance in various fields.

Some significant achievements are:

â¢ "Customer Service Champion Award" by Asia Innovation Congress & Awards

â¢ "Best use of social media in marketing" at National Awards for Branding & Marketing

â¢ "Dream Company to Work for" at National Awards for Excellence in BFSI

â¢ "Best use of Technology in Customer Service" at BFSI Excellence Awards

â¢ "CEO of the Year" to Sandeep Bhardwaj at National Awards for Excellence in BFSI

â¢ "Top Performer in the Equity Institutional Segment" felicitation by the BSE

â¢ "Top Performer in the Sovereign gold bonds

Segment" by the BSE

â¢ "Most Innovative Wealth, Asset and Investment Management Services" at World BFSI Congress

â¢ "CEO of the Year" to Sandeep Bhardwaj at

World BFSI Congress

â¢ "Business Icon of India" recognition to Sandeep Bhardwaj by Zee Business

â¢ IIFL Securities was recognized as one of the "Most Trusted Brands of India"

â¢ "Great Place to Work" award for the fourth

time in a row

X. Corporate Social Responsibility (CSR) initiatives

In accordance with the provisions of Section 135 of the Companies Act, 2013 and rules made thereunder, IIFL Securities has adopted a CSR policy indicating the CSR activities that will be undertaken by the Company and its subsidiaries. The CSR Policy is available on the website of the Company at https://content.indiainfoline.com/wb/securities/ reports/IIFL%20Securities%20Limited%20 CSR % 2 0 P o I i c y % 2 0 A p r i l % 202022. p d f ?_ ga = 2.202746769.1 664058785.1 6552951 50 2017514718.1654148603.

India Infoline Foundation (hereafter referred to as "IIFL Foundation"), a Section-8 Company under the Companies Act, 2013 and a wholly owned subsidiary of the Company, acts as the principal arm to undertake CSR initiatives on behalf of the Company and its subsidiaries. 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 form CSR 1 with the Registrar.

IIFL Foundation through its CSR initiatives addresses 4 thematic areas - Health, Education, Livelihood & Poverty Alleviation, or HELP. The initiatives include upgrading treatment facilities at government hospitals, construction of classrooms and laboratories at government schools (rural), educating females from marginalized communities, electrification of government schools using solar energy, skill development initiatives for women, scholarship to students (females) to improve female literacy rate, distribution of Android tablets for students to promote learning over digital platform, activities promoting second livelihood to farmers through livestock development, and more.

The activities contribute to meet UNâs Sustainable Development Goals - Quality Education (SDG 4), Gender Equality (SDG 5), Reduced Inequalities (SDG 10), Good Health & Well-being (SDG 3), Clean Water and Sanitation (SDG 6), No Poverty (SGD 1) and Affordable & Clean Energy (SDG 13).

IIFL Foundation''s flagship program - Sakhiyon Ki Baadi (SKB), is dedicated to provide foundational literacy and numeracy to out-of-school girls in Rajasthan and facilitate their progression at government schools. The program is spread across 13 districts of Rajasthan, reaching out to over 32,000 girls from marginalized communities. IIFL Foundation has conducted an impact assessment of the Sakhiyon Ki Baadi program and the evaluation shows that the said program has helped usher in a positive change in the attitude of the community at large, towards educating females.

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted Corporate Social Responsibility (''CSR'') Committee and statutory disclosures with respect to the CSR Committee and Annual Report on CSR Activities is attached as Annexure - 1 and forms an integral part of this report.

6. Dividend

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), your Company has formulated the Dividend Distribution Policy which is available on the website of the Company at https:// www.indiainfoline.com/securities/reports/Dividend_ Distribution_Policy.pdf.

During FY22, the Board of Directors of your Company declared an interim dividend of '' 3 per equity share (i.e. 150% of the face value of '' 2 per share) in accordance with the Dividend Distribution Policy of the Company. This led to an outgo of '' 911.58 million. The same is considered as final.

7. Transfer of unclaimed/unpaid amounts to the Investor Education and Protection Fund (''IEPF'')

In terms of the provisions of Section 124 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules) and other applicable provisions, all monies remaining unpaid or unclaimed for a period of seven years from the date of transfer to unpaid/unclaimed dividend account, shall be transferred to the IEPF.

Information relating to unclaimed dividend and the due dates by which it can be claimed by the shareholders are as under:

Financial	Date of	Last date
Year	declaration	for claiming
	of dividend	unpaid dividend
2019-20	February 07, 2020	March 14, 2027
2020-21	March 10, 2021	April 15, 2028
2021-22	January 24, 2022	March 01,2029

The details of unclaimed/unpaid dividends are available on the website of the Company at https://www.indiainfoline. com/securities/corporate-annoucements.php.

Shareholders, whose dividend/shares are transferred to the IEPF, may claim the same by making an application in prescribed form to the IEPF Authority in this regard, details of which are available on www.iepf.gov.in. No claims shall lie against the Company in respect of the dividend/shares so transferred. The members/ claimants can file only one consolidated claim in a financial year as per the IEPF Rules.

8. Transfer to reserves

During the year under review, the Company has transferred an amount of '' 3.34 million to the General Reserve.

9. Deposits

The Company has not accepted /renewed any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder and, as such, no amount of principal or interest was outstanding, as on the Balance Sheet date.

10. Share Capital

As on March 31, 2022, the issued, subscribed and paid-up equity share capital of the Company stood at '' 607,872,460 (comprising 30,39,36,230 equity shares of '' 2 each).

During the year under review, the total paid up equity share capital of the Company changed from '' 605,870,660/-to '' 607,872,460/- pursuant to allotment of 8,94,820 equity shares of '' 2/- each under IIFL Securities Limited Employee Stock Option Scheme(s)- 2018 and

1,06,080 equity shares of '' 2 each under IIFL Securities Employees Stock Option 2019-Demerger Scheme to the eligible employees of the Company and the said equity shares rank pari passu with the existing equity shares from the date of allotment.

Further, the Company neither issued equity shares with differential rights as to dividend, voting or otherwise nor any sweat equity shares during the year.

Employees Stock Option Scheme (ESOS)

Your Company has in force the following Employees Stock Option Schemes, prepared in terms of the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021:

1) IIFL Securities Employee Stock Option 2019 -Demerger Scheme ("ISL Demerger Scheme").

2) IIFL Securities Limited Employee Stock Option Scheme 2018 ("IIFL ESOS Scheme-2018").

Pursuant to the IIFL ESOS Scheme-2018, the Nomination and Remuneration Committee, at its meeting held on October 08, 2021, granted 65,00,000 stock options to the eligible employees of IIFL Securities Limited.

As on March 31, 2022, 66,145 options have lapsed under the ISL Demerger Scheme and the same are not available for further grant. The aggregate number of stock options outstanding as on March 31, 2022 are 2,73,416 under the ISL Demerger Scheme. As on March 31, 2022, 14,25,180 options have lapsed under the IIFL ESOS Scheme -2018 and the same have been added back to the pool, and are available for further grant. The aggregate number of stock options outstanding as on March 31, 2022 stood at 1,31,17,938 under the IIFL ESOS Scheme- 2018.

There is no material change in the ISL Demerger Scheme and the IIFL ESOS Scheme - 2018, except that IIFL ESOS Scheme -2018 has been aligned with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SBEBSE Regulations") and is in compliance with the same. The disclosures relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and SBEBSE Regulations are provided on the website of the Company at www.iiflsecurities.com and the same is available for inspection by the members at the registered office of the Company. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at [email protected], whereupon a copy will be provided.

The relevant disclosures in terms of IND AS 102, relating to share based payment, forms part of note 32 of the

notes to the Standalone Financial Statements and note 43 of the notes to the Consolidated Financial Statements of the Company.

11. Nomination and Remuneration Policy

The Company has a Nomination and Remuneration Policy which lays down a framework in relation to appointment and remuneration of Directors, Key Managerial Personnel, and senior management personnel of the Company and the same is amended from time to time. The Nomination & Remuneration Policy is attached as Annexure - 2 and forms an integral part of this report and is also available on the website of the Company at https://www.indiainfoline.com/ securities/reports/NR-Policy-120521.pdf.

12. Particulars of employees

The disclosures 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 is attached as Annexure - 3 and forms an integral part of this report.

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and 5(3) of the aforesaid rules, is maintained and 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 aforesaid information is available for inspection by the members. Any member interested in obtaining a copy thereof, may write to the Company Secretary at [email protected].

13. Prevention of Sexual Harassment (POSH)

Your Company is committed to promote a work environment that is conducive to the professional growth of its women employees and encourages equality of opportunity. IIFL Securities aims to adopt zero tolerance attitude against any kind of sexual harassment or discrimination. Providing a safe working environment for women, free from sexual harassment and discrimination is among the key priorities of the Company.

Your Company has in place a Policy on Prevention of Sexual Harassment in accordance with the provisions of "The Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013".

Furthermore, the Company has constituted an Internal Complaints Committee for handling complaints under the said Policy. The Policy includes the scope, consequence of non-compliance and redressal

mechanism along with contact details of the Committee members for raising any grievance/complaint under the said Policy. The Company provides for mandatory online training on POSH for every new joinee, as well as, all employees on an annual basis.

During FY22, 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 for more than ninety days: Nil

d) Number of workshops or awareness programs against sexual harassment carried out: 5

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

14. Subsidiary and Associate companies Subsidiary companies

As on March 31, 2022, the Company has the following subsidiaries located in India and overseas:

Sr. No.	Name of the domestic subsidiary
1	IIFL Facilities Services Limited*
2	IIFL Management Services Limited*
3	Livlong Insurance Brokers Limited (Formerly IIFL Insurance Brokers Limited)*
4	IIFL Commodities Limited*
5	Livlong Protection and Wellness Solutions Ltd (Formerly IIFL Corporate Services Limited) (Formerly IIFL Asset Reconstruction Limited)
6	India Infoline Foundation* (Section 8 Company)
7	Shreyans Foundations LLP (Step down subsidiary company)
8	Meenakshi Towers LLP
9	IIFL Securities Services IFSC Limited*
Name of the foreign subsidiary
10	IIFL Wealth (UK) Limited*
11	IIFL Capital Inc.*
*Wholly-owned subsidiary

I IFL Facilities Services Limited is a material subsidiary of the Company as per Regulation 16 of SEBI Listing Regulation. The Board of Directors of the Company have approved a Policy for determining material subsidiaries

which is in line with the SEBI Listing Regulations as amended from time to time. The Policy has been uploaded on the Companyâs website and can be accessed at https://www.indiainfoline.com/securities/ corporate-governance.php.

During the year under review, the name of IIFL Corporate Services Limited, a wholly owned subsidiary of the Company was changed to Livlong Protection and Wellness Solutions Limited ("LPWSL"). The object clause of LPWSL was also changed to solving healthcare and insurance needs of customers by leveraging technologies. LPWSL has commenced its business in FY22.

Further, during the year the Company had sold its 5% stake in LPWSL. Consequent to the same, LPWSL continues to be a subsidiary of the Company.

Furthermore, during the year the name of IIFL Insurance Brokers Limited, wholly owned subsidiary, was changed to Livlong Insurance Brokers Limited.

Associate company

During the year under review, your Company had transferred its 21.47% stake in the Giskard Datatech Private Limited ("Trendlyne") to IIFL Securities Capital Enhancer Fund (AIF Category II). Pursuant to the said transfer, Trendlyne ceased to be an associate company.

In accordance with Section 136(1) of the Companies Act, 2013, the financial statements including consolidated financial statements and all other documents required to be attached thereto and audited annual accounts of subsidiary companies are available on the Companyâs website at https://www.indiainfoline.com/securities/ financials.php. 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 subsidiaries, except on Saturdays, Sundays and Public Holidays. The Annual Report of all the subsidiaries will be uploaded on the website of the Company at https:// www.indiainfoline.com/securities/financials.php.

CONSOLIDATED FINANCIAL STATEMENTS

Your Company has, in accordance with Section 129(3) of the Companies Act, 2013, prepared the annual consolidated financial statements, consolidating its financials with its subsidiary and associate companies as mentioned above. The annual audited consolidated financial statements have been prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India.

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of

Subsidiaries and Associate Companies is given in Form AOC-1 as ''Annexure A'' of the Consolidated Financial Statements and forms an integral part of this Report.

15. Management Discussion and Analysis Report

In accordance with Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Annual Report.

16. Business Responsibility Report

Pursuant to Regulation 34(2) of the SEBI Listing Regulations the Business Responsibility Report describing the initiatives taken by the Company, from an environmental, social and governance perspective, forms part of this Annual report.

17. Directors and Key Managerial Personnel (KMP) Directors

Your Company has a well-diversified Board comprising of Directors from various backgrounds and having broad range of experience, in the areas of finance, accounting, technology, governance, risk management, among others. Their combined experience and expertise enables the Company to ensure effective corporate governance on one hand, and to take future-ready business decisions on the other. The Board provides leadership, strategic guidance and discharges its fiduciary duties of safeguarding the interest of the Company and its stakeholders.

The composition of the Board of Directors of the Company is in accordance with the provisions of Section 149 of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, with an appropriate combination of Executive, Non-Executive and Independent Directors (including one independent woman director). During the year under review there was no change in the composition of the Board of Directors of the Company.

As on March 31,2022, the Board comprises of 6 directors.

Name	DIN	Designation
Mr. R. Venkataraman	00011919	Chairman and Managing Director
Mr. Narendra Jain	01984467	Executive Director
Ms. Rekha Warriar	08152356	Non-Executive Independent Director
Mr. Shamik Das Sharma	07779526	Non-Executive Independent Director
Mr. Anand Shailesh Bathiya	03084831	Non-Executive Independent Director
Mr. Viswanathan Krishnan	09026252	Non-Executive Independent Director

All the Independent Directors of the Company have given declarations that they meet the criteria of independence as prescribed under Section 149(6) of the Companies

Act, 2013 and Regulation 16(1) (b) of SEBI Listing Regulations. In terms of requirements of the SEBI Listing Regulations, the Board has identified core skills, expertise and competencies of the Directors in the context of the Companyâs businesses for effective functioning, which are detailed in the Report on Corporate Governance.

Further, in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year

During the year there was no new appointment of Independent Director on the Board of the Company.

Retirement by rotation

In accordance with Section 152 of the Companies Act, 2013 read with Article 157 of the Articles of Association of the Company, Mr. R. Venkataraman (DIN: 00011919) is liable to retire by rotation at the ensuing Annual General Meeting ("AGM") and, being eligible, has offered himself for re-appointment. The Board recommends the same for the consideration of the Members of the Company at the ensuing AGM and same has been mentioned in the Notice convening the AGM. A brief profile of Mr. R. Venkataraman has also been provided therein.

Key Managerial Personnel

During the year under review there was no change in the Key Managerial Personnels of the Company. As on March 31, 2022, Mr. R. Venkataraman - Chairman and Managing Director, Mr. Narendra Jain -Whole-Time Director, Mr. Ronak Gandhi- Chief Financial Officer and Ms. Meghal Shah- Company Secretary & Compliance Officer are the Key Managerial Personnels in terms of the provisions of the Companies Act, 2013 and rules made thereunder and the SEBI Listing Regulations.

18. Meetings of Board

The Board met Eight times during the FY22, the details of which are given in the Corporate Governance Report forming part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and the SEBI Listing Regulations. The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board meetings.

19. Audit Committee of the Board

Five meetings of the Audit Committee of the Board were held during FY22. The composition of Audit Committee is covered under the Corporate Governance Report.

During the year under review, there were no instances, where the Board had not accepted any recommendation of the Audit Committee.

For details of various Committees constituted by the Board please refer to the report on Corporate Governance forming part of this Annual Report.

20. Risk management

The Company realizes the importance of Enterprise Risk Management ("ERM") framework and has formulated a well-defined ERM Policy which encompasses practices relating to the identification, analysis, evaluation, impact, control, mitigation and monitoring of the risks for achieving its key business objectives. Your Companyâs ERM framework comprises risks such

as Strategic risk, Market risk, Credit risk, Financial risk, Fraud risk, Legal risk, Compliance risk, Operational Risk, Reputational risk, People risk, Governance risk, Sustainability risk and Technology risk. ERM at 11FL Securities seeks to minimize the adverse impact of these risks, thus enabling the Company to leverage market opportunities effectively and enhance its long-term competitive advantage.

The Company maintains a risk register for all the departments in order to track the processes of each department. This approach helps in identifying the risk and then evaluating the risk for which controls have been set. The Company also maintains an incident register and tracker to know the incidents that occurred and had an impact on its business.

Role of Board of Directors: The Board of Directors is responsible for framing, implementing and monitoring the risk management policy/framework. It reviews the risk policy and ensures that appropriate systems of control are in place.

Role of Risk Management Committee (RMC): RMC is

responsible for formulation of the detailed ERM policy and monitor and oversee its implementation. It ensures that appropriate methodology, processes and systems are in place to monitor and evaluate risk associated with the business of the Company. The details of composition and meetings of RMC is covered under the Corporate Governance Report forming part of this report.

Role of Designated Risk Officer (DRO): DRO periodically reviews the process for systematic identification and assessment of all the risks and update RMC on the risks identified and the assessment and mitigation controls relating thereto. DRO conducts internal meetings with the Risk Owners/Functional Heads on ERM initiative and updates the management on the progress/status of the same on a quarterly basis.

Role of Risk Management Function: The Company has in place a risk management function for development and maintenance of overall risk management infrastructure. It facilitates implementation of the ERM policy. It also maintains and update the risk register and creates awareness on the risk management process/ practices for the identified stakeholders periodically. Further, it reports risk and risk management measures to RMC.

Role of Risk Owners and Functional Heads: Each Risk owner/Functional head is responsible for their respective risk i.e risk identification, mitigation, implementation of the controls and any other matter relating thereto and update the risk management function on the same. Further, Risk owner/Functional head prepare a Risk Report advising on the results and residual risks and recommending further action.

21. Annual evaluation of the Board

The Company has in place a Policy on Performance Evaluation, framed in accordance with the relevant provisions of the Companies Act, 2013, SEBI Listing Regulations and SEBI circular dated January 5, 2017 which provides further clarity on the process of board evaluation ("SEBI Guidance Note"). The manner and criteria of the evaluation of performance of the Board of Directors, Board Committees and the individual Directors has been provided in the Corporate Governance Report forming part of this report.

22. Internal financial controls

Your Company has maintained adequate internal financial controls over financial reporting, which are constantly assessed and strengthened with new/ revised standard operating procedures. The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records.

The Companyâs internal control system is commensurate with its size, scale and complexities of its operations. The Audit Committee of the Board actively reviews the adequacy and effectiveness of the internal control systems. The Audit Committee of the Board and Statutory Auditors are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors on the effectiveness of internal controls and the veracity of the financial statements. Such internal financial controls over financial reporting were operating effectively during the year.

During the FY22, there were no material observation which has been highlighted for inefficiency or inadequacy of such controls. The details of adequacy of Internal Financial controls are given at length in the Management Discussion and Analysis report.

23. Quality initiatives

Your Company continues to sustain its commitment to the highest levels of quality, superior service management, robust information security practices and mature business continuity management. Your Company successfully completed the annual ISO 27001:2013 (ISMS) surveillance audit in December 2021. Further, the Company has sustained compliance with respect to various applicable laws and regulations in terms of technology, business continuity management and information security from various regulators.

The technology used in the Company comprises industry standard business applications and robust IT infrastructure. These capabilities are used to manage business operations, are scalable, improve overall productivity & efficiency, and provide seamless and world class experience to the Companyâs customers. Your Company ensured that there was no business or operations impact due to the second/third wave of COVID as its robust Business Continuity Plan was already active.

Your Company has strengthened its information and cyber security mechanisms and other risk measures to mitigate potential threats, risks and challenges. It also procured cyber insurance cover to protect from financial losses.

Your Company believes in skill development, hence various e-learning modules on technology and other business areas have been enabled for employees through online training.

24. Contracts and arrangements with Related Parties

Your Company has put in place a Policy for Related Party Transactions (RPT Policy), which has been approved by the Board of Directors and amended from time to time. The Policy provides for identification of RPTs,

necessary approvals by the Audit Committee/Board/ Shareholders, reporting and disclosure requirements in compliance with the Companies Act, 2013 and provisions of the SEBI Listing Regulations. The said Policy may be accessed on the website of the Company at https://www.indiainfoline.com/securities/reports/ Related-Party-Transaction-Policy-120521.pdf.

All contracts executed by your 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 entered into in accordance with the RPT Policy of the Company.

During FY22, the Company has entered into material contract/arrangement/transaction with related parties within the maximum limit approved by the Members of the Company at its meeting held on June 30, 2021. As there is no outstanding balance as at March 31,2022, the disclosure in Form AOC-2 as prescribed under the Act has not been made. You may refer to note no. 35 and note no. 45 to the Standalone Financial Statements and Consolidated Financial Statements respectively, for the related party disclosures.

25. Statutory Auditors and their Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s V Sankar Aiyar & Co., Chartered Accountants, Mumbai (Firm Registration Number: 109208W), were appointed as the Statutory Auditors of the Company to hold office from the conclusion of 22^nd Annual General Meeting (AGM) till the conclusion of the 27^th AGM of the Company.

The Company has received confirmation from the Auditors to the effect that their re-appointment, if made, will be in accordance with the limits specified under Companies Act, 2013 and the firm satisfies the criteria specified in Section 141 of the Companies Act, 2013 read with Rule 4 of Companies (Audit and Auditors) Rules, 2014.

The Board of Directors of the Company is of the opinion that continuation of M/s V Sankar Aiyar & Co, Chartered Accountants will be in the best interest of the Company and therefore, the members are requested to consider their re-appointment as Statutory Auditors of the Company, for a second term of five years, from the conclusion of the ensuing 27^th AGM till the 32^ndAGM, at such remuneration mutually agreed and approved by the Board.

The Statutory Auditorsâ Report forms part of the Annual Report. There were no qualifications, reservations, adverse remarks or disclaimers in the Report of the Statutory Auditors of the Company.

26. Secretarial Audit and their Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s Nilesh Shah and Associates, Company Secretaries in Practice for conducting the Secretarial Audit for FY22. The Secretarial Audit Report of the Company is annexed as Annexure - 4. The Secretarial Auditor has not expressed any qualification, reservation, adverse remark in their Secretarial Audit Report for the year under review. The Secretarial Auditor has mentioned about the following events in their Report:

1) The Company has paid Settlement amount of '' 2,21,92,125/- in the matter of alleged violation of Clauses A(1), A(2) A(3) & A(4) of Code of Conduct prescribed under Schedule II read with regulation 9(f) of SEBI (Stock Brokers) Regulations, 1992 for manipulation of reference price considered for execution of block deal trades in the scrip of Alkem Laboratories Ltd. during the period April 1, 2019 to September 30, 2019 without admitting or denying findings of the facts and conclusion of law;

2) In an investigation in the matter of trading activities in the scrip of Pantaloon Retail (India) Ltd. (now known as Future Enterprises Limited) during the period February 02, 2012 to April 30, 2012, it was held by the Adjudicating Officer that the Company has violated provisions of Clause A(2) of the Code of Conduct for Stock Brokers as specified under Schedule II read with Regulation 7 of the SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992. However, considering the fact that the Company has already been imposed monetary penalty in another matter for a similar charge, the Adjudicating Officer has disposed off the matter without imposing any penalty on the Company.

Management response:

1) In the said transaction the Company acted as broker for buy side institutional clients and the transactions were executed as per the consent of the clients. The buyers in the block window are all reputed institutional investors and all the trades were executed in the block window. There is no dispute that the transaction was genuine i.e. there was indeed a change of beneficial ownership and the buyers were genuine. The delivery of shares was indeed given and taken, the trades were fair to the buyers and the seller they were indeed fair to the market as well. It is clear that the pattern of conduct shows that there was no intention to manipulate. Accordingly, the Company denied the allegation of manipulating the reference price of Alkem for the Volume Weighted Average Price window and believe that the Company had

not violated any provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulation, 2003 or any other securities laws.

However, in the interest of the closure of the matter, the Company had filed a Settlement Application before SEBI and agreed for settlement terms in accordance with the SEBI Settlement Regulations, 2018.

2) The Company acted only as a broker for executing the transactions of the client on the exchange platform and confirmed the same to the client through the registered mobile number and email id from time to time and ensured the account settlements from time to time. The Company had ensured with its systems and process as per SEBl/ Exchange norms all the time. The client had never disputed the trades executed on her behalf by her authorized person which shows/reconfirms the fact that the trades were executed by duly authorized person of the client. This clearly demonstrates the Companyâs actions only as a broker in dealing and servicing the client.

Accordingly, considering the fact that the Company had already been imposed of monetary penalty in another matter for a similar charge and in connection with the same client and corrective action taken by freezing the operations of the client trading account, the Adjudicating Officer has not levied penalty.

27. Maintenance of cost records

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

28. Reporting of frauds by Auditors

During FY22, the Statutory Auditors of the Company have not reported any instances of fraud committed in the Company, by its Officers or Employees, to the Audit Committee under Section 143(12) of the Companies Act, 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

29. Particulars of loans, guarantees or investments

Particulars of loans extended and investments made are given in the note 6 of the Standalone Financial Statements for the year ended March 31, 2022 forming part of this Annual Report.

30. Annual return

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 as amended from time to time, the Annual Return of the Company in Form MGT-7 for FY22 has been placed on the Companyâs website at https://www.indiainfoline. com/securities/financials.php.

31. Material changes and commitments affecting the financial position of the Company

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year of the Company to which the financial statements relate till the date of this Report which could have an impact on your Companyâs operation or its status in the future.

32. Significant and material order passed by the Regulators or Court or Tribunals

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going-concern status of the Company and its future operations.

33. Energy conservation

The information on energy conservation stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as under;

The Company is engaged in providing financial services and, as such, its operations do not account for substantial energy consumption. However, the Company is taking all possible measures to conserve energy. Several environment friendly measures were adopted by the Company which are:

i. Installation of capacitors to save power;

ii. Saving power by providing laptops and tablets instead of desktops;

iii. Installation of Light Emitting Diode (LED) lights;

iv. Installation of access-based network printers to control printing, thereby saving paper;

v. Optimizing usage of air-conditioning;

vi. Shutting off all lights, when not in use;

vii. Minimizing usage of single use plastic

Your Company frequently puts circulars on the corporate intranet, IWIN, for its employees, educating them on ways and means to conserve electricity and other natural resources and ensures strict compliance of the same.

34. Technology absorption

The information on technology absorption stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as under;

Technology absorption and innovation:

Advancement in Information Technology (IT) has led to accelerated development in newer technologies, resulting in higher demand for digital solutions. This has enabled organizations to create world class products that deliver customer delight through a robust service delivery framework.

Your Companyâs management understands the importance of technology and digital innovations in the business segments it operates and lays utmost emphasis on system development and use of best technology available in the industry. Your Company keeps itself abreast of technological advancements in the industry and ensures continued and sustained efforts towards absorption of technology, adaptation as well as, development of the same to meet the business needs and objectives.

Your Company remains committed to investing in technology to provide competitive edge and contribute in business that is scalable. Digital and analytics continue to be the key focus areas, to bring in agility, availability and relevance. As the Company continues to expand and amplify its business, it will enhance its digital presence and provide much better features, reports and service to its clients.

The Company is making requisite investments in skilled manpower, security and new technology to ensure that the organization is in line with the market trends, to improve staff performance, enhance the security of data, expand storage and compute capacity.

Data and cyber security along with continuity of services is also considered as a paramount importance for the organization. The Company successfully completed the annual ISO 27001:2013 (ISMS) surveillance audit in December 2021.

As the Company continues to expand its geographic reach and enhance the scale of operations, it intends to further develop and integrate technology to support growth and improve service quality.

The Company made significant investments, in technology, digital innovations, systems and manpower, in the aforesaid initiative and is continuously developing the same.

During FY 22, several new technology initiatives were completed successfully as well as systems upgraded

to latest versions to support the growing needs of the business of the Company.

Some of the key Company-wide projects completed were:

Digital innovations and enhancements:

Introduction of best-in-class technologies for simplification and optimization of user journeys and application processing like Digi locker, fraud detection, liveliness check, face match, AI based automated document verification, and OCR, WhatsApp based client acquisition journey where customers can open an IIFL account without human intervention. Complete revamp of login process to reduce friction while maintaining 2FA security. Enhancements to fund transfer processes - one click UPI based transfers, support for additional banks, real-time withdrawable balance. Improving transaction experience with contextual nudges and optimizations. Simplification of pledge experience to address concerns around minimum margin requirements defined by the regulator. Implementation of deep integrations enabled richer functionality, cohesive experience, and access to multiple investment products including Global Investing, Wealth Baskets, Tax Filing, ETFy. Entire Application User Interface were revamped and made it more user friendly. Introduced real-time margin requirement monitoring with combined reports of all segments for better risk management. Enabled Earmarking feature so that on the same day margin benefit extended to customer on stock sell even during corporate action period.

Launch of new services/products:

Launch of Voice Bot and IIFL Help servicing portal which is one stop shop for all query resolution. Launch of Gemrush which is end-to-end research recommendation and dissemination platform based on e-commerce principles for user engagement and retention. Launch of buy now pay later which is a super simplified end-to-end margin trading experience for users. Launch of AAA Web which is a one stop partner portal for onboarding, servicing, and driving business. Launch of integration and tie-ups with leading advanced trading platforms including Luxemburg based Gocharting, Algobulls, Arthalabs. Launch of Option House which is a simplified option trading tool for beginners. Launch of trading view which is a charting tool for derivative traders.

35. Foreign exchange earnings and outgo

The information on 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 as under.

('' In million)
Particulars	FY 2021-22	FY 2020-21
Earning in Foreign Currency	355.25	290.48
Expenses in Foreign
Currency	115.50	139.51

36. Whistle Blower Policy/Vigil Mechanism

Pursuant to Section 177(9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has adopted a Whistle Blower Policy and established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns or grievances about unethical behaviour, actual or suspected fraud or violation of the Companyâs code of conduct or ethics policy. Vigil Mechanism provide for adequate safeguards against victimization of persons who use such mechanism and also make provision for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases. For further details, please refer Report on Corporate Governance forming part of this Annual Report. The Company has disclosed the Policy on the website of the Company at https://www.indiainfoline.com/securities/reports/ Whistle-Blower-120521.pdf. During FY22, no complaints were received under this Policy.

37. Corporate Governance

38. Directors'' Responsibility Statement:

In compliance with Section 134(5) of the Companies Act, 2013, the Board of Directors of your Company, to the best of their knowledge and ability, confirm that:

a) in the preparation of the Annual Accounts for the year ended March 31, 2022, 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 as at March 31, 2022 and of the profit of the Company for the year ended on that date;

d) the Directors ensured the annual accounts are prepared 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 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.

39. Other disclosures

40. Appreciation

The Company is grateful to the Securities and Exchange Board of India, the Exchanges, Depositories, and other Regulatory and Statutory Authorities, its bankers, lenders, clients, investors, members and all other stakeholders for their continued co-operation and support.

Your Directors further wish to place on record their sincere gratitude and appreciation, for the services and generous efforts rendered by its employees at all levels, towards the overall growth and success the Company.

For and on behalf of the Board

R. Venkataraman

Chairman and Managing Director DIN:00011919

Date: April 26, 2022 Place: Mumbai

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