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IIFL Finance Ltd.

BSE: 532636 Sector: Financials
NSE: IIFL ISIN Code: INE530B01024
BSE 00:00 | 17 Sep 113.05 -3.60
(-3.09%)
OPEN

116.00

HIGH

117.00

LOW

112.20

NSE 00:00 | 17 Sep 113.20 -2.95
(-2.54%)
OPEN

116.95

HIGH

117.20

LOW

111.50

OPEN 116.00
PREVIOUS CLOSE 116.65
VOLUME 3082
52-Week high 331.08
52-Week low 98.85
P/E 23.26
Mkt Cap.(Rs cr) 3,609
Buy Price 111.60
Buy Qty 399.00
Sell Price 112.95
Sell Qty 199.00
OPEN 116.00
CLOSE 116.65
VOLUME 3082
52-Week high 331.08
52-Week low 98.85
P/E 23.26
Mkt Cap.(Rs cr) 3,609
Buy Price 111.60
Buy Qty 399.00
Sell Price 112.95
Sell Qty 199.00

IIFL Finance Ltd. (IIFL) - Director Report

Company director report

Dear Shareholders

Your Directors present the Twenty Third Annual Report of IIFL Holdings Limited(‘your Company') together with the Audited Financial Statements for the financialyear ended March 31 2018.

1. FINANCIAL RESULTS

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

Rs. in Million
Name of Company Revenue Profit after tax
IIFL Holdings Limited 2530.03 2043.48
India Infoline Finance Limited 25051.94 3544.97
India Infoline Housing Finance Limited 12686.66 1974.09
Samasta Microfinance Limited 967.83 25.83
IIFL Securities Limited (Formerly known as India Infoline Limited) 6345.96 1293.89
IIFL Wealth Management Limited 7265.35 1484.57
IIFL Wealth Finance Limited 7829.77 1560.20
IIFL Asset Management Limited 1030.36 297.25
IIFL Asset Management (Mauritius) Limited 1256.58 706.30
IIFL Facilities Services Limited (Formerly known as IIFL Real Estate Ltd.) 1448.97 131.28
IIFL Insurance Brokers Limited (Formerly known as India Infoline Insurance Brokers Limited) 299.08 138.35
IIFL Commodities Limited (Formerly known as India Infoline Commodities Limited) 135.67 19.28
IIFL Distribution Services Limited 196.24 1.19
IIFL Capital Pte. Limited 266.35 19.02
IIFL Private Wealth Management (Dubai) Limited 78.02 7.39
IIFL Securities Pte Limited 84.78 18.44
IIFL Investment Adviser and Trustee Services Limited 382.80 102.67
IIFL Alternate Asset Advisers Limited 63.46 23.32
IIFL Private Wealth Hong Kong Limited 20.61 3.20
IIFL Trustee Limited (Formerly India Infoline Trustee Company Limited) 17.83 9.50
IIFL Inc 59.71 (18.36)
India Infoline Media and Research Services Limited 163.33 111.15
IIFL Capital Inc. 141.76 13.51
IIFL Wealth (UK) Limited 94.49 5.11
Others 412.22 8.15

Consolidated Financial Results

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

Rs. in Million
Particulars 2017-18 2016-17
Gross total income 38541.62 31639.98
Profit before interest depreciation and taxation 28230.05 24689.26
Interest and financial charges 18967.68 17793.52
Depreciation 173.05 158.72
Profit before tax (from Continuing Operations) 9089.32 6737.02
Taxation - Current 3096.97 2420.07
- Deferred (250.24) (186.34)
- Short or excess provision for income tax 2.74 25.77
Net profit for the year (from Continuing Operations) 6239.85 4477.52
Profit/(loss) before tax from Discontinuing Operation 7587.58 5502.90
Tax Expenses of Discontinuing Operations 2206.66 1758.62
Profit from Discontinuing Operations after tax 5380.92 3744.28
Net profit before minority interest 11620.77 8221.80
Less: Share of Profit to Minority Shareholders / Share of profit from Associates 2507.53 1360.91
Net Profit after Taxes Minority Interest and Share of profit of Associates Companies 9113.24 6860.89
Less: Minority interest (146.45) (730.36)
Opening Adjustments 234.79 -
On account of demerger of 5Paisa Capital Ltd. 12.45 -
Less: Appropriations
Dividend (1592.38) (1449.62)
Dividend Distribution Tax (270.72) (291.04)
Transfer to Special Reserve (1422.21) (1082.40)
Transfer to Debenture Redemption Reserve (617.02) (830.15)
Transfer to Capital Redemption Reserve (750.00) (1500.00)
Deferred tax Liability - (14.81)
Add: Balance brought forward from the previous year 6541.66 5579.15
Balance to be carried forward 11103.36 6541.66

* Previous periods figures have been regrouped / rearranged wherever necessary

Standalone Financial Results:

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

Rs. in Million
Particulars 2017-18 2016-17
Gross total income 1588.09 1428.71
Profit before interest depreciation and taxation 1555.22 1408.70
Interest and financial charges NIL NIL
Depreciation 4.19 1.94
Profit before tax 1551.03 1406.76
Taxation – Current NIL NIL
- Deferred NIL NIL
- Short or excess provision for income tax NIL NIL
Profit/(loss) after Tax from Continuing Operations 1551.03 1406.76
Profit/(loss) after tax from Discontinuing Operations 492.45 161.02
Profit/(loss) for the year 2043.48 1567.78
Less: Appropriations
Interim Dividend (1592.38) (1429.19)
Dividend Distribution Tax (0.96) (0.64)
Transfer to Debenture Redemption Reserve (31.22) (41.9)
Add: Balance brought forward from the previous year 2310.18 2214.13
On account of demerger of 5paisa Capital Limited 12.45 -
Balance to be carried forward 2741.55 2310.18

* Previous periods figures have been regrouped / rearranged wherever necessary

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

During the year under review your Company's total income on a consolidated basisincreased to Rs. 64376 million up 31% year-on-year (y-o-y). Profit before tax increasedto Rs. 16677 million up 36% y-o-y and Profit after tax before minority interestincreased to Rs. 11621 million up 41% y-o-y.

During the year the income from the loans and mortgages business has increased by 22%y-o-y to Rs. 38570 million. This was driven by growth in the loan AUM by 40% from Rs.222810 million in FY17 to Rs. 311336 million in FY18. The Loan book of Housing FinanceCompany grew robustly by 45% to Rs. 119169 million as of March 31 2018 as against Rs.81924 million in the previous year. The Company's MFI subsidiary namely SamastaMicrofinance Limited has achieved a significant growth of 252% in its AUM to Rs. 8406.19million and its branch network increased to 186. During the year income from the wealthmanagement business witnessed robust growth of 60% y-o-y to reach Rs. 17378 million andassets under advice distribution and management increased by 39% y-o-y to Rs. 1317617million. The Wealth Management arm i.e. IIFL Asset Management Limited continued to be thelargest AIF platform in the Country with AUM of Rs. 117359 million Income from CapitalMarket related activities increased significantly by 24% y-o-y to Rs. 8428 million.

There is no change in the nature of business of the Company. There were no significantor material orders passed by regulators or courts or tribunals impacting the going concernstatus and Company's operations in future.

3. MACROECONOMIC OVERVIEW

Indian Economy has regained the tag of fastest growing economy in the world in FY18despite the two major reforms namely GST and Demonetisation that deterred the growth ratein the short run. The growth has been mainly driven by manufacturing and constructionsectors. The country posted an overall growth of 6.7% in 2017 and is expected to rise to7.4% in 2018. The construction sector grew at 3.4% in FY18 compared with 6.3% in FY17.The agricultural sector grew at 3.4% in FY18 compared with 6.3% in FY17.

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

The concerns regarding banking sector credit quality after the discovery of recentfrauds have slowed down the investment pace in the country. It is expected that furtherre-capitalisation as part of a broader package of financial reforms to improve thegovernance of public sector banks and lenders' debt recovery mechanisms will improve thebanking sector's ability to support growth. On the NBFC front one of the biggestchallenges in FY19 is higher borrowing costs and narrowing options to raise funds as theyseek to raise Rs. 3800 billion to Rs. 4000 billion of debt to finance a 20% growth inloan portfolio according to rating agency ICRA. ICRA expects the weighted average cost offunds for NBFCs to increase to about 9.3%-9.5% in FY19 compared to 8.4%-8.5% in FY18. Theweighted average cost of funding for NBFCs could be higher by a minimum of about 45 basispoints in FY19 based on the debt maturity profiles and incremental funding requirement.

4. DIVIDEND ON EQUITY SHARES

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

The dividend payout for the year under review is in accordance with the Company'spolicy to pay sustainable dividend linked to long-term growth objectives of the Companyto be met by internal cash accruals. The Board had approved the Dividend DistributionPolicy on January 25 2017 in line with the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015. The Policy is available on the Company's website athttps://www.iifi. com.

5. SCHEME OF ARRANGEMENTS

Composite Scheme of Arrangement

The Board of Directors of the Company at its meeting held on January 31 2018 approvedthe Composite Scheme of Arrangement amongst the Company India Infoline Media and ResearchServices Limited ("IIFL M&R") IIFL Securities Limited ("IIFLSecurities") IIFL Wealth Management Limited ("IIFL Wealth")India Infoline Finance Limited ("IIFL Finance") IIFL DistributionServices Limited ("IIFL Distribution") and their respectiveshareholders under Sections 230 - 232 and other applicable provisions of the CompaniesAct 2013 ("Scheme") which inter-alia envisages the following: i.amalgamation of IIFL M&R with the Company; ii. demerger of the Securities BusinessUndertaking (as defined in the Scheme) of the Company into IIFL Securities; iii. demergerof the Wealth Business Undertaking (as defined in the Scheme) of the Company into IIFLWealth; iv. amalgamation of IIFL Finance with the Company; and v. transfer of the Brokingand Depository Participant Business Undertaking (as defined in the Scheme) of IIFL Wealthto its wholly owned subsidiary i.e. IIFL Distribution on a going-concern basis.

The share entitlement ratio under the scheme is as under:- a. For the demerger of theSecurities Business Undertaking from the Company: For every 1 (One) fully paid equityshare of Rs. 2 each held in the Company the shareholder of the Company will get 1 (One)fully paid equity share of Rs. 2 each of IIFL Securities Limited. b. For the demerger ofthe Wealth Business Undertaking from the Company: For every 7 (Seven) fully paid equityshare of Rs. 2 each held in the Company the shareholders of the Company will get 1 (One)fully paid equity share of Rs. 2 each of IIFL Wealth Management Limited. c. Foramalgamation of India Infoline Finance Limited with the Company: For every 100 (Onehundred) fully paid equity shares of Rs. 10 each held in India Infoline Finance Limitedthe shareholder of India Infoline Finance Limited will get 135 (One Hundred and ThirtyFive) fully paid equity shares of Rs. 2 each of the Company.

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

This will enable the Company's three dominant focused businesses i.e. loan &mortgage securities and wealth management to list as independent entities at StockExchanges i.e. BSE Limited and National Stock Exchange of India Limited subject tonecessary approvals.

The Rationale of the Scheme is as under:

(i) Over the course of time Company has grown into a diversified financialconglomerate with interests in loans & mortgages wealth management servicesdistribution of financial products and capital market services. Each of the corebusinesses have acquired critical mass requiring flexibility and independence to growfaster in the fast changing technology and innovation driven environment. (ii) Each corebusiness has a differentiated strategy different industry specific risks and operateinter alia under different market dynamics and growth trajectory. The nature andcompetition involved in each of the businesses is distinct from others and consequentlyeach business or undertaking is capable of attracting a different set of investorsstrategic partners lenders and other stakeholders. (iii) Accordingly the Companyproposes to re-organise and segregate by way of a composite scheme of arrangement itsbusinesses and undertakings into three different listed verticals dealing in loans &mortgages business wealth management services and capital market business. These listedentities will be subject to public media analysts and regulatory review. A cleancorporate structure with no cross holdings will ensure transparency accountabilityhighest standards of corporate governance and compliance. It also enhances operationalflexibility and helps quick response to competitive or environmental challenges.

(iv) The proposed reorganisation pursuant to this Scheme is expected inter alia toresult in the following benefits: a) unlocking of value and create enhanced value forshareholders and allow a focused strategy in operations which would be in the bestinterest of all the stakeholders; and b) creation of listed loans & mortgagesbusiness wealth management services and capital market business with ability to achievevaluation based on respective risk-return profile and cash flows attracting the rightinvestors and thus enhancing flexibility in accessing capital; (v) Further each listedcompany can separately attract and motivate its key people with stock options such thattheir rewards are strongly correlated with their own and their business's performance andconnect to the IIFL Group's philosophy of ‘owner mindset' which believes in sharedownership and shared accountability by all team members.

The above is subject to regulatory and NCLT approval. The Company has flled the draftScheme with exchanges SEBI and other authorities for their approval and approval isawaited.

Demerger of 5paisa digital Undertaking

The Hon'ble National Company Law Tribunal ("NCLT") Mumbai bench had vide itsorder dated September 06 2017 sanctioned the Scheme of Arrangement between IIFL HoldingsLimited and 5paisa Capital Limited and their respective Shareholders ("theScheme"). The Scheme inter alia provided for Demerger of 5paisa digital undertakingfrom IIFL Holdings Limited to 5paisa Capital Limited. The said order has been flled withMinistry of Corporate Affairs ("MCA") on September 30 2017 and Demerger iseffected w.e.f. the Appointed Date i.e. October 1 2016 in the books of accounts of theCompany.

Upon the Scheme came into effect and in consideration of the transfer and vesting ofthe 5paisa digital Undertaking into 5paisa Capital Limited 17716500 Equity Shares ofRs. 10/- each held by IIFL Holdings Limited in the 5paisa Capital Limited wereextinguished and cancelled and in lieu of the same the equity shareholders of IIFLHoldings Limited whose name appeared in the Register of Members on October 18 2017 wereallotted one (1) equity share of Rs. 10/- each in 5paisa Capital Limited credited asfully paid-up for every Twenty Five (25) equity share of Rs. 2/- each fully paid-up heldby such equity shareholders in IIFL Holdings Limited. Accordingly 12739022 equityShares of Rs. 10/- each of 5paisa Capital Limited were issued and allotted to the eligibleShareholders of IIFL Holdings Limited on October 20 2017. Pursuant to this 5paisaCapital Limited ceased to be a subsidiary of the Company w.e.f. from September 30 2017.

The equity shares of 5paisa Capital Limited so issued pursuant to the Scheme ofArrangement were listed and admitted for trading on BSE Limited ("BSE") andNational Stock Exchange of India Limited ("NSE") with effect from November 162017.

Demerger of IIFL Facilities Services Limited

During the financial year ended March 31 2018 the Hon'ble National Company LawTribunal ("NCLT") Mumbai bench had vide its order dated July 19 2017sanctioned the Scheme of Arrangement for demerger of Real Estate Advisory servicesundertaking from IIFL Facilities Services Limited a wholly-owned-subsidiary of theCompany into another wholly-owned-subsidiary namely IIFL Management Services Limited(Erstwhile India Infoline Insurance Services Limited) in terms of the provisions ofCompanies Act 2013. The said order has been flled with MCA on September 29 2017 andDemerger is effected w.e.f. the Appointed Date i.e. April 01 2017 in the books ofaccounts of the Company.

Merger of Ayusha Dairy Private Limited

M/s Ayusha Dairy Private Limited a wholly-owned subsidiary of Samasta MicrofinanceLimited ("Samasta") is in the process of merger with Samasta. The members andcreditors of both the companies have approved the scheme of amalgamation in their meetingsheld on March 28 2018 respectively and requisite forms have been flled with theappropriate authorities for their approval and approval is awaited.

6. KEY INITIATIVES/DEVELOPMENTS:

i. Investment Banking

Fiscal 2018 has been the best year for the Company's Investment Banking business. IIFLcompleted 27 transactions viz. IPOs QIPs right issues private equity advisory and preIPO placements. This included 11 IPOs and 8 follow on transactions involving listedcompanies. Recently IIFL has been ranked as #1 Investment Banker for equity raising forprivate sector companies by PRIME Database for the financial year 2017-18 as per theirInvestment Banking league tables FY 2018 of private sector issuers for aggregated equityIPOs FPOs QIPs and InvIT IPOs by issue amount on full credit basis. AdditionallyCapital Finance International ("CFI.co") has ranked IIFL as the Best IPO LeadManager – India for 2018.

As was the case in 3scal 2017 IIFL completed a number of large Investment Bankingtransactions with marquee clients in 3scal 2018 as well. Some of the notable transactionscompleted by IIFL in the last 3scal year includes:

India (Reliance Nippon Life Asset Management) The Company has a robust pipeline ofinvestment banking transactions across a number of product categories which are indifferent stages of execution. IIFL continues to diversify its product/service offeringsand invest in people processes and technology. The Company's efforts and investments intothis business are beginning to pay off. Clients continue to value IIFL's focus andcommitment and consider it as their trusted advisor.

ii. Asset Management

IIFLAssetManagementactsasanInvestmentManager to IIFL Mutual Fund IIFL AlternativeInvestment Funds and undertakes Portfolio Management Services.

The total assets managed by IIFL AMC under Mutual Fund AIF and Portfolio ManagementServices has increased to Rs. 135832 million as on March 31 2018 vis-a-vis Rs. 92651million as on March 31 2017. Under IIFL Mutual Fund Platform the assets under managementhave increased from Rs. 6252 million to Rs. 9012 million. IIFL Capital Enhancer Fund anannual interval mutual fund scheme was launched in April 2018 which garnered aboutRs.4600 million.

AIF assets saw a robust growth of approx. 58% on a YoY basis to Rs. 117358.7 millionas on March 2018 under its various focused scheme. IIFL AMC continued to offer variousproducts to the investors which is beyond the mainstream investments and has been marketdisrupter. IIFL Special Opportunities Fund with an intent to invest in Pre-IPO and IPOopportunities garnered lots of interest and huge demand which required the AMC to launchvarious series under these Scheme.

1) Category II Alternative Investment Funds: a. IIFL Special Opportunities Fund and itsseries till 7 b. India Housing Fund

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

3) IIFL Mutual Fund a. IIFL Capital Enhancer Fund – Series 1

During the year the Company took initiatives to diversify and strengthen itsdistribution. IIFL AMC got empanelled with several large banks and wealth management firmsenabling IIFL AMC to significantly enhance its reach and distribute its products widely.The Company has also significantly strengthened its sales team and mid-office team inorder to service investors. iii. Real Estate Investment Trust (REIT) Initiative

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

iv. Slump sale of Commodities Broking Business With a view to integrate the equityand commodities broking carried on by respective subsidiary within IIFL group and toensure smooth operations and servicing of their clients the commodity broking business ofMCX and NCDEX carried on by IIFL

Commodities Limited a wholly owned subsidiary of the Company is transferred to IIFLSecurities Limited another wholly owned subsidiary of the Company pursuant to thenecessary approvals and in accordance with the SEBI circular on integration of equity andcommodity broking. The transfer is undertaken as per the valuation certificate receivedfrom independent Chartered Accountant for a cash consideration of Rs. 76.9 million. Theintegration is expected to be implemented by July 2018.

v. Merger of Ashburton India Equity Opportunities Fund with IIFL India EquityOpportunities Fund

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

Requisite applications have been flled with Commission de Surveillance du SecteurFinancier (CSSF) Luxembourg and regulatory approvals are awaited post which the mergerwill be concluded.

vi. Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee of the Board has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe CSR activities which can be undertaken by the Company. The Board approved CSR Policymay be accessed from the Company's website link: https://www.ii3.com.

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

The group has identified focus areas for CSR initiatives which includes : a) Girl childilliteracy eradication program for out of school and illiterate girls. b) Improving thequality of education in Government schools through technological interventions. c) RuralTransformation in Maharashtra. d) Financial Literacy and Financial Inclusion. e)Preventive Health. f) Disaster Relief and Rehabilitation. g) Integrated rural developmentdrought relief and water conservation (h) Protection of culture (i) Measures for benefitof armed forces veterans war widows etc.

During the financial year your Company deployed 2 % of its average net profits(computed as per the relevant provisions of Companies Act 2013) of the preceding threeyears on CSR projects fully utilising the required amount. At the group level besides theCompany ten subsidiary companies came under the purview of the provisions for CSR for theyear. During the 3scal year 2017-18 the group made a total deployment of Rs. 183 millioninto CSR activities. vii. Investor Conference/Events

IIFL's Enterprising India Global Investors' Conference IIFL's ninth Enterprising IndiaConference was held from the 21st to 23rd of February 2018 with the theme ‘Rise ofthe millenials'.

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

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

IIFL's Enterprising India Conference has grown over the years in size and stature toemerge as a key corporate event in the Indian Investment environment

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

OFF The Cuff or OTC is a series of candid talk shows organised in collaboration withNDTV and was launched in January 2016 and held once a month. The event is hosted as anon-ground event anchored by eminent journalist Shekhar

Gupta in conversation with a distinguished guest in the presence of a notable invitedaudience. After the initial dialogue between the guest and the moderator OTC is open tothe audience to question and engage with the guest. The idea is to break through theclutter and noise of existing debates on television and other platforms and bring out anengaging constructive discussion; while also keeping live audiences involved throughout.Eminent personalities have graced the OTC series including Maharashtra's Chief MinisterDevendra Fadnavis Dalai Lama authors Vikram Seth and Amish Tripathi actor RanveerSingh Union Minister Dharmendra Pradhan and New York Times columnist and author ThomasFriedman to name a few.

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

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

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

Dhan ki Baat made its TV debut on September 30 2017 and was telecast every Monday at10 PM for the next 25 weeks. During these weeks the topics covered such as Mutual fundsstock market investing basics understanding the di3erence between trading investing andspeculation and IPO investing. Later on in house experts discussed topics such as marginfunding/ LAS commodity and currency trading technical analysis for beginners Futuresand Options/ Derivatives trading SIP for wealth creation and fixed-income products:Bonds FDs and NCDs. Unique insights were provided on differentiated topics such ascreating of trust investing outside India investing in AIF etc.

viii. Awards and Recognitions

7. SHARE CAPITAL

During the period under review the total share capital of the Company increased fromRs. 635816386/- to Rs. 637958052/- pursuant to allotment of 1070833 equity sharesof Rs. 2/- each under Employee Stock Option Scheme(s) of the Company to the eligibleemployees.

8. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

During the year under review 472635 stock options under ESOS 2008 granted to employeeshave lapsed and the same have been added back to the pool which can be used for furthergrant. Further 200000 stock options were granted to the employees during the year underthe ESOS 2008. The issue of equity shares pursuant to exercise of options does not affectthe Statement of Profit and Loss of the Company as the exercise of options is made at themarket price prevailing a day before the grant plus taxes as applicable.

There is no material change in Employees' Stock Option Scheme during the year underreview and the Scheme is in line with the SEBI (Share Based Employee Benefits)Regulations 2014 ("SBEB Regulations"). A certificate from the Auditors of theCompany that the Scheme has been implemented in accordance with the SBEB Regulations andthe resolution passed by the members would be placed at the ensuing Annual General Meetingfor inspection by members. The disclosures relating to ESOPs required to be made under theprovisions of the Companies Act 2013 and the SEBI (Share Based Employee Benefits)Regulations 2014 are provided on the website of the Company www.ii3.com and the same isavailable for inspection by the members at the Registered Office of the Company on allworking days except Saturdays Sundays and Public Holidays during business hours up tothe date of the ensuing Annual General Meeting.

9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

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

10. SUBSIDIARY COMPANIES

As on March 31 2018 the Company had 32 (Thirty two) subsidiaries (including step downsubsidiaries)/ Associates located in India and overseas. During the year the Company hasacquired additional 50% equity shares of IIFL Asset Reconstruction Limited("ARC") and consequently ARC became a wholly-owned subsidiary of the Company andceased to be an associate Company. Further India Infoline Finance Limited the NBFCsubsidiary has acquired 100% equity shares of Clara Developers Private Limited and IIFLWealth Management Limited has incorporated IIFL Capital (Canada) Limited as itswholly-owned subsidiary. During the year 5paisa Capital Limited and IIFL PropertiesPrivate Limited ceased to be subsidiaries of the Company in terms of respective schemes ofarrangement approved by Court/NCLT.

As per the provisions of section 134 and 136 of the Companies Act 2013 read withapplicable Rules Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and applicable Accounting Standards the Board of Directors had at theirmeeting held on May 03 2018 approved the consolidated financials of all the subsidiariesof the Company along with the Company's financial statements. Copies of the Balance SheetProfit and Loss Account Report of the Board of Directors and Report of the Auditors ofeach of the subsidiary companies are not attached to the accounts of the Company for thefinancial year 2017-18. The Company will make these documents/details available uponrequest by any member of the Company. These documents/details will also be available forinspection by any member of the Company at its registered office and at the registeredoffices of the concerned subsidiaries i.e. except on Saturdays Sundays and PublicHolidays. The Annual Report of all the subsidiaries will be uploaded on the website of theCompany i.e. www.ii3.com. As required by Companies Act 2013 and Accounting Standard - 21(AS 21) issued by the Institute of Chartered Accountants of India the Company'sconsolidated financial statements included in this Annual Report incorporate the accountsof its subsidiaries. A report on the performance and financial position of each of thesubsidiaries associates and joint ventures companies as per Companies Act 2013 isprovided in the prescribed form AOC-1 as Annexure A of the Consolidated FinancialStatement and hence not repeated here for the sake of brevity.

Pursuant to regulation 16 and 24 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 India Infoline Finance Limited IIFL Wealth ManagementLimited and IIFL Wealth Finance Limited and India Infoline Housing Finance Limited werethe Material Subsidiaries of the Company for the financial year 2017-18 and pursuant toaforesaid regulations the same will continue to remain as such for the financial year2018-19 as well.

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

11. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report in terms of Regulation 34(2)(f) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 describing the initiativestaken by IIFL Group from an environmental social and governance perspective is attachedas part of the Annual Report.

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Management Discussion and Analysis Report forms partof this report.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL a. Directors

The Board comprises Mr. Nirmal Jain and Mr. R. Venkataraman as Executive Directors ofthe Company in their capacity of Chairman and Managing Director respectively. Mr. NileshVikamsey Mr. A. K. Purwar Mr. Kranti Sinha Dr S. Narayan and Ms. Geeta Mathur areIndependent Directors and Mr. Chandran Ratnaswami is a non-executive non-independentDirector of the Company. In accordance with Section 152 of the Companies Act 2013("Act") read with Article 157 of the Articles of Association of the Company Mr.R. Venkataraman is liable to retire by rotation at the ensuing Annual General Meeting andbeing eligible has offered himself for reappointment. The Board recommends the same forthe approval of Shareholders.

b. Key Managerial Personnel

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

The Remuneration and other details of the Key Managerial Personnel for the year endedMarch 31 2018 are mentioned in the Extract to the Annual Return in Form MGT-9 which isattached as "Annexure II" and forms a part of this report of theDirectors.

14. Meeting of Directors & Committee/Board Effectiveness

Meetings of the Board of Directors

The Board met Four (4) times during the year to discuss and approve various mattersincluding financials appointment of auditor declaration of dividend review of auditreports and other board businesses. For further details please refer to the report onCorporate Governance. Committees of the Board In accordance with the applicableprovisions of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board constituted the following Committees: t AuditCommittee t Nomination and Remuneration Committee t Corporate Social ResponsibilityCommittee t Stakeholders Relationship Committee t Risk Management Committee

Audit Committee:

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

Nomination and Remuneration Committee:

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

The role terms of reference and powers of the Nomination and Remuneration Committeeare in conformity with the requirements of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and the same have been providedin the Corporate Governance Report. The Board has on the recommendation of the Nomination& Remuneration Committee framed a Nomination and Remuneration policy in compliancewith the aforesaid provisions for selection and appointment of Directors KMP seniormanagement personnel of the company. The said policy and the details of Committee meetingsare provided in the Corporate Governance Report.

Corporate Social Responsibility Committee

As per the provision of Section 135 of the Companies Act 2013 the Company hasconstituted CSR Committee comprises Mr. Nilesh Vikamsey Independent Director Mr. NirmalJain Executive Director and Mr. R. Venkataraman Executive Director. The Committee hasapproved CSR Policy of the Company. The details of CSR Committee meeting are provided inthe Corporate Governance Report. The policy on corporate social responsibility isavailable on the website www. ii3.com. The Annual Report on Corporate Socialresponsibility is attached as "Annexure I".

Stakeholders Relationship Committee

The role terms of reference of the Stakeholders Relationship Committee are inconformity with the requirements of the Companies Act 2013 and Regulation 20 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 and the same have beenprovided in the Corporate Governance Report.

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

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

Risk Management Committee

In compliance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Companies Act 2013 the Company has constituted aRisk Management Committee. The objective of the Committee is to oversee the riskmanagement governance structure define and review the framework for identificationassessment monitoring mitigation and reporting of risks. The Risk Management Committeecomprises Mr. A. K. Purwar Independent Director Mr Nilesh Vikamsey Independent Directorand Mr Nirmal Jain Executive Director. The Committee held its meetings during the yearunder review and details thereof are mentioned under Corporate Governance Report.

Board Effectiveness

Familiarisation Program for the Independent Directors

In compliance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has put in place a Familiarisation Programmefor Independent Directors to familiarise them with the working of the Company theirroles rights and responsibilities vis--vis the Company the industry in which theCompany operates business model etc. Details of the Familiarisation Programme areexplained in the Corporate Governance Report and are also available on the Company'swebsite at http://www.ii3.com.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and SEBI Circular no SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 05 2017 the Board of Directors has carried out an annualperformance evaluation of its own performance the Directors individually includingIndependent Directors based out of the criteria and framework adopted by the Board. TheBoard approved the evaluation results as collated by Nomination and Remuneration Committee("NRC"). The evaluation process manner and performance criteria for independentdirectors in which the evaluation has been carried out by is explained in the CorporateGovernance Report.

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

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

Performance of the Chairperson of the Company

Assessed the quality quantity and timeliness of flow of information between theCompany's management and the Board which is necessary for the Board to effectively andreasonably perform their duties The Independent Directors expressed their satisfactionwith overall functioning and implementations of their suggestions.

The evaluation process endorsed the Board Members' confidence in the ethical standardsof the Company the cohesiveness that exists amongst the Board Members the two-way candidcommunication between the Board and the Management and the openness of the Management insharing strategic information to enable Board Members to discharge their responsibilities.

? Declaration by Independent Directors

The Company has received necessary declaration from each Independent Director undersection 149(7) of the Companies Act 2013 that he/she meets the criteria of independencelaid down in Section 149(6) of the Companies Act 2013 and Regulation 25 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

15. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(5) of the Companies Act 2013 it ishereby confirmed that: a) in the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures; b) the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period; c) the directors hadtaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d) thedirectors had prepared the annual accounts on a going concern basis; e) the Directors hadlaid down internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and are operating effectively; and f) the Directors haddevised proper systems to ensure compliance with the provisions of all applicable laws andthat such systems are adequate and operating effectively.

16. RISK MANAGEMENT

The Company has in place Risk Management Committee to assist the Board in (a)overseeing and approving the company's enterprise wide risk management framework; and (b)overseeing that all the risks that the organisation faces such as strategic financialcredit market liquidity security property IT legal regulatory reputational andother risks have been identified and assessed. There is an adequate risk managementinfrastructure in place capable of addressing those risks. The Company's managementmonitors and reports principal risks and uncertainties that can affect its ability toachieve its strategic objectives. The company's management systems organisationalstructures policy processes standards and code of conduct together form the riskmanagement governance system of the company.

The Company has in place a Risk Management Policy and introduced several processimprovements to internal controls systems and processes to drive a common integrated viewof risks and optimal and mitigation responses. This integration is enabled throughdedicated team and Risk Management Internal Control and Internal Audit methodologies andprocesses.

17. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal controls with reference to financialstatements and operations and the same are operating effectively. The Internal Auditorstested the design and effectiveness of the key controls and no material weaknesses wereobserved in their examination. Further Statutory Auditors veri3ed the systems andprocesses and confirmed that the Internal Financial Controls system over financialreporting are adequate and such controls are operating effectively.

18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company has put in place a policy for Related Party Transactions (RPT Policy)which has been approved by the Board of Directors. The policy provides for identificationof RPTs necessary approvals by the Audit Committee/Board/Shareholders reporting anddisclosure requirements in compliance with Companies Act 2013 and provisions of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

All contracts executed by the Company during the financial year with related partieswere on arm's length basis and in the ordinary course of business. All such Related PartyTransactions were placed before the Audit Committee/Board for approval whereverapplicable. During the year the Company has not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance withRegulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and the policy of the Company on materiality of related party transactions. The policy fordetermining ‘material' subsidiaries and the policy on materiality of Related PartyTransactions and dealing with Related Party Transactions as approved by the Board may beaccessed on the Company's website www.ii3.com. You may refer to Note no. 34 to thestandalone financial statement which contains related party disclosures. Since allrelated party transactions entered into by the Company were on an arm's length basis andin the ordinary course of business and the Company had not entered into any materialrelated party contracts Form AOC-2 disclosure is not required to be provided.

19. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return of the Company in form MGT– 9 is annexed herewith as "Annexure - II".

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

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

21. SECRETARIAL AUDIT

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

22. ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The additional information on energy conservation technology absorption and foreignexchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013read with Rule 8 of the Companies (Accounts) Rules 2014 is appended as "Annexure–IV" to and forms part of this Report.

23. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

In Compliance of the Companies Act 2013 and Regulation 22 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Company has adopted a Whistle BlowerPolicy and has established the necessary vigil mechanism for Directors Employees andStakeholders to report genuine concerns about unethical behaviour actual or suspectedfraud or violation of the Company's code of conduct or ethics policy. The Company hasdisclosed the policy at the website at https://www.ii3.com/investor-relations/corporate-governance.

24. PREVENTION OF SEXUAL HARASSMENT

Your Company recognises its responsibility and continues to provide a safe workingenvironment for women free from sexual harassment and discrimination. In Compliance withthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 the Company has put in place a Policy on prevention of Sexual Harassment of Women atworkplace. Your Directors further state that the during the 3scal year 2017-18 there wereno complaints received pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. The following is reported pursuant toSection 22 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013: a) Number of complaints received in the year : Nil b) Number ofcomplaints disposed off during the year : Nil c) Number of cases pending more than ninetydays: Nil d) Number of workshops or awareness programme against sexual harassment carriedout: The Company has conducted an online training for creating awareness against thesexual harassment against the women at work place. e) Nature of action taken by theemployer or district officer: Not applicable

25. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in "Annexure –V".

Further a statement showing the names and other particulars of employees drawingremuneration in excess of the limits as set out in the Rules 5(2) and 5(3) of theaforesaid Rules forms part of this report. However in terms of 3rst proviso to Section136(1) of the Act the Annual Report and Accounts are being sent to the members and othersentitled thereto excluding the aforesaid information. The said information is availablefor inspection by the members at the Registered Office of the Company during businesshours on working days up to the date of the ensuing Annual General Meeting. If any memberis interested in obtaining a copy thereof such member may write to the Company Secretarywhereupon a copy would be sent.

26. STATUTORY AUDITORS

Pursuant to the provisions of Section 139(2) of the Companies Act 2013 and the rulesmade thereunder the Members at their 22nd Annual General Meeting ("AGM") heldon July 22 2017 had appointed M/s. Deloitte Haskins & Sells LLP CharteredAccountants (ICAI Firm's Registration Number 117366W/W-100018) as the Statutory Auditorsof the Company for a term of five years i.e. from the conclusion of the 22nd AGM till theconclusion of the 27th AGM subject to ratification of their appointment at every AGM.Accordingly the appointment of M/s. Deloitte Haskins & Sells LLP CharteredAccountants as the Statutory Auditors of the Company is being placed for ratification bythe Members in the forthcoming AGM. In this regard the Company has received a certificatefrom the Statutory Auditors to the effect that ratification of their appointment if madewould be in accordance with the provisions of Section 141 of the Act. They have alsoconfirmed that they hold a valid Peer Review Certificate issued to them by the Instituteof Chartered Accountants of India ("ICAI"). The Notes to the financialstatements referred in the Auditors Report are self-explanatory and therefore do not callfor any comments under Section 134 of the Companies Act 2013. The Auditors' Report isenclosed with the financial statements in the Annual Report.

27. REPORTING OF FRAUDS BY AUDITORS

During the year under review the Statutory Auditors and the Secretarial Auditor havenot reported any instances of frauds committed in the Company by its Officers or Employeesto the Audit Committee under section 143(12) of the Companies Act 2013 details of whichneeds to be mentioned in this Report.

28. RBI/FEMA COMPLIANCE

The Reserve Bank of India vide its press release dated June 10 2016 had noti3ed FII/FPI investment limit of up to 80% in the paid up capital of IIFL Holdings Limited underthe Portfolio Investment Scheme. The Company has in place the system of ensuringcompliance with RBI Master Direction on Foreign Investment in India and for certificationfrom the Statutory Auditors of the Company on an annual basis.

29. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by SEBI. The Company has alsoimplemented several best Corporate Governance practices as prevalent globally. The reporton Corporate Governance as stipulated under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 forms an integral part of this Report. The requisitecertificate from the Auditors of the Company confirming compliance with the conditions ofCorporate Governance is attached to the report on Corporate Governance.

30. GENERAL

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

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

2. The Company has redeemed Non Convertible debentures of Rs. 500 million on December30 2017.

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

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

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

31. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance andguidance provided by the government regulators stock exchanges other statutory bodiesCompany's bankers and employees for the assistance cooperation and encouragement extendedto the Company.

Your Directors also gratefully acknowledge all stakeholders of the Company viz.customers members dealers vendors banks and other business partners for the excellentsupport received from them during the year. Our employees are instrumental in the Companyto scale new heights year after year. Their commitment and contribution is deeplyacknowledged. Your involvement as shareholders is also greatly valued. Your Directors lookforward to your continuing support.

For and on behalf of the Board
Nirmal Jain
Chairman
DIN: 00010535
Place : Mumbai
Date : May 3 2018

Annexure – IV to Directors' Report

Information relating to conservation of energy technology absorption and innovationand foreign exchange earnings/ outgo forming part of the Directors' Report in termsSection 134(3) (m) of the Companies Act 2013.

Conservation of Energy

The Company is engaged in providing finance and financial services and as such itsoperations do not account for substantial energy consumption. However the Company istaking all possible measures to conserve energy. Several environment friendly measureswere adopted by the Company such as:

The Management frequently puts circulars on corporate intranet IWIN for the employeeseducating them on ways and means to conserve the electricity and other natural resourcesand ensures strict compliance of the same.

Technology absorption and innovation:

The Management understands the importance of technology in the business segments itoperates and lays utmost emphasis on system development and use of best technologyavailable in the industry. The management keeps itself abreast of technologicaladvancements in the industry and ensures continued and sustained efforts towardsabsorption of technology adaptation as well as development of the same to meet thebusiness needs and objectives.

Your Company remains committed to investing in technology to provide competitive edgeand contribute in business that is scalable. Digital and analytics continue to be the keyfocus areas to bring in agility availability and relevance.

As company continues to expand its geographic reach and enhance the scale ofoperations it intends to further develop and integrate technology to support growth andimprove service quality. Technology is a trusted ally in creating business value.

Your Company has committed significant investments in terms of technology systems andmanpower in the aforesaid initiative and continuously developing the same.

Foreign Exchange Earnings/Outgo of the Standalone Company a) The foreign exchangeearnings: Nil b) The foreign exchange expenditure: Nil

Research and Development (R & D)

The Company is engaged in finance and financial services and so there were noactivities in the nature of research and development involved in the business. Being infinancial services we provide financial and equity research to the customers which isnot in the nature of research and development. Amount of expenditure incurred on Researchand Development: Amount of expenditure incurred on Research and Development:

Particulars March 31 2018 March 31 2017
Capital Nil Nil
Revenue Nil Nil

Annexure – V to Directors' Report

The ratio of the remuneration of each director to the median employee's remunerationand other details in terms of subsection 12 of Section 197 of the Companies Act 2013 readwith Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014:

Sr. No. Requirement Disclosure
I The ratio of the remuneration of each Director to the median remuneration of the employees for the financial year *Executive Chairman – Mr. Nirmal Jain *Managing Director – Mr. R Venkataraman 31.97x 22.64x
Non Executive Director
Mr. Nilesh Vikamsey 0.59x
Dr. S Narayan 0.59x
Ms. Geeta Mathur 0.59x
Mr. Kranti Sinha 0.59x
Mr. A. K. Purwar 0.59x
Mr. Chandran Ratnaswami Nil
II The percentage increase in remuneration of each Director CFO CEO CS in the financial year Executive Chairman 25%
Managing Director 25%
CFO Nil
CS 10%
Non Executive Director
Mr. Nilesh Vikamsey Nil
Dr. S Narayan Nil
Ms. Geeta Mathur Nil
Mr. Kranti Sinha Nil
Mr. A. K. Purwar Nil
Mr. Chandran Ratnaswami Nil
III The percentage increase in the median remuneration of employees in the financial year The median remuneration of the employees in the financial year was increased by 10%. The calculation of % increase in Median Remuneration is done based on comparable employees. For this the employees who were not eligible for any increment have been excluded.
IV The number of permanent employees on the rolls of the Company The Company had 52 employees on the rolls as on March 31 2018
V Average percentile increase already made in the Not Applicable to the Company as all the employees are under
salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justi3cation thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration Managerial Role
VI Afirmation that the remuneration is as per the remuneration policy of the Company Yes it is confirmed

*The remuneration to Executive Chairman and Managing Director are being paid by IndiaInfoline Finance Limited subsidiary of the Company.

For IIFL Holdings Limited
Nirmal Jain
Place: Mumbai Chairman
Date : May 03 2018 DIN:-00010535