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IIFL Finance Ltd.

BSE: 532636 Sector: Financials
NSE: IIFL ISIN Code: INE530B01024
BSE 00:00 | 06 Dec 321.45 -5.95
(-1.82%)
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318.45

NSE 00:00 | 06 Dec 321.25 -5.25
(-1.61%)
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OPEN 334.85
PREVIOUS CLOSE 327.40
VOLUME 83817
52-Week high 375.05
52-Week low 100.50
P/E 21.26
Mkt Cap.(Rs cr) 12,193
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 334.85
CLOSE 327.40
VOLUME 83817
52-Week high 375.05
52-Week low 100.50
P/E 21.26
Mkt Cap.(Rs cr) 12,193
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IIFL Finance Ltd. (IIFL) - Director Report

Company director report

Dear Shareholders

Your Directors present the Twenty Sixth Annual Report of IIFL Finance Limited (Formerlyknown as IIFL Holdings Limited) ("your Company / the Company") together with theAudited Financial Statements for the financial year ended March 31 2021. The Company isregistered with the Reserve Bank of India ("RBI") as a Systemically ImportantNon-Banking Financial Company ("NBFC") not accepting public deposits(NBFC-ND-SI).

This was an unprecedented year with the Covid-19 pandemic affecting countriesbusinesses and individuals in India and across the world. Lockdown and restrictionsimposed on various activities due to the pandemic called for extraordinary changes in theway operations were managed at the Company. Our technological investments and timely anddecisive steps towards remote working ensured business continuity even as the pandemicunfolded across locations of our presence.

The Company extended wholehearted support to vulnerable sections of society during thisperiod in a number of ways. More details of the COVID-19 relief work are covered in theCSR Report attached to this report.

1. FINANCIAL RESULTS

A summary of the financial performance of your Company and its major subsidiaries forthe financial year ended March 312021 is as under:

(Rs. in Million)

Name of the Company Revenue Profit After Tax
IIFL Finance Limited 34362.05 3425.77
IIFL Home Finance Limited 20677.50 4010.95
Samasta Microfiinance Limited 7021.30 666.23

Consolidated Financial Results

A summary of the consolidated financial performance of your Company for the financialyear ended March 312021 is as under:

(Rs. in Million)

Particulars 2019-20 2020-21
Gross total income 59893.95 49261.25
Profit before Finance Cost depreciation share of loss of Joint Venture exceptional items and taxation 37359.55 32358.51
Finance Cost 26258.27 24050.18
Depreciation 1053.44 1056.49
Profit before share of loss of Joint Venture exceptional items and tax 10047.84 7251.84
Profit before exceptional items and tax 10047.84 7251.84
Exceptional items - -
Profit before tax 10047.84 7251.84
Taxation - Current tax 3173.53 1778.98
- Deferred tax (779.46) 466.34
- Short or excess provision for income tax 45.67 (28.21)
Net profit for the year 7608.10 5034.74
Other Comprehensive Income (243.17) (66.60)
Total Comprehensive Income before Non-Controlling interest 7364.93 4968.13
Attributable to:
Owners of the Company 7358.03 4951.77
Non-controlling interests 6.90 16.36
Less: Appropriations
Dividend (1135.41) (817.05)
Dividend Distribution Tax - (167.95)
Transfer to/ from Other Reserves (1624.48) (1476.92)
Change in Minority 2.73 2.27
On account of Merger - (25.83)
Add: Balance brought forward from the previous year 10872.03 8405.73
Balance to be carried forward 15472.90 10872.03

*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 2021 is as under:

(Rs. in Million)

Particulars I 2020-21 2019-20
Gross total income 34362.05 26712.00
Profit before Finance Cost depreciation share of loss of Joint Venture exceptional items and taxation 20203.03 15697.95
Finance Cost 15549.75 12483.57
Depreciation 908.83 894.09
Profit before share of loss of Joint Venture exceptional items and tax 3744.45 2320.29
Profit before exceptional items and tax 3744.45 2320.29
Exceptional items 530.50 46.06
Profit before tax 4274.95 2366.35
Taxation
- Current tax 972.83 419.33
- Deferred tax (167.48) 479.68
- Short or excess provision for income tax 43.83 (20.69)
Net profit for the year 3425.77 1488.03
Other Comprehensive Income (211.07) (24.86)
Total Comprehensive Income 3214.70 1463.17
Less: Appropriations
Dividend (1135.41) (817.05)
Dividend Distribution Tax - (79.34)
Transfer to/ from Other Reserves (686.80) (686.05)
On account of Merger - (25.82)
Add: Balance brought forward from the previous year 3193.73 3338.83
Balance to be carried forward 4586.23 3193.73

*Previous periods figures have been regrouped / rearranged wherever necessary.

Transfer to Reserve

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

(Rs. in Million)

Particulars Consolidated Standalone
2020-21 2020-21
Special Reserve during the year (Pursuant to Section 45 IC of the Reserve Bank of India Act 1934) 819.59 686.80
Special Reserve during the year (Pursuant to Section 29C of National Housing Bank Act 1987) 805.00 -
General Reserve during the year 6.82 6.82

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

During the year under review your Company's total income on a consolidated basisamounted to Rs. 59894 million compared to Rs. 49261 million in the previous year. Werecorded our highest ever preprovision operating profit of Rs. 21734 million during theyear driven by volume growth reduction in cost of funds and better cost managementcompared to Rs. 11914 million in the previous year. Profit before tax stood at Rs. 10048million compared to Rs. 7252 million in the previous year and Profit after tax (TCI postnoncontrolling interest) stood at Rs. 7358 million compared to Rs. 4952 million in theprevious year.

Our Loan assets under management (AUM) grew 18% y-o-y to Rs. 446880 million comparedto Rs. 379511 million in the previous year. The core segments of our portfolio namelyHome loans Gold loans Business loans (excluding Healthcare Finance) and Microfinanceloans grew faster at 22% y-o-y to Rs. 396324 million compared to Rs. 325206 million inthe previous year. The primary drivers of the AUM growth were Gold loans which grew by44% y-o-y and Microfinance loans which grew by 40% y-o-y. The synergistic products ofConstruction & Real-Estate finance and Capital Market loans continue to have adeclining share in the portfolio.

The Company is in the process of transferring a substantial part of its Construction& Real Estate (CRE) loan assets that are in the form of non-convertible debentures toan Alternative Investment Fund wherein the Company will continue to own at least a thirdof the AIF's units. The AIF has a target fund size of Rs. 36 billion. The capital releasedby the above transaction will strengthen Company's balance sheet and help to focussharply on retail lending in line with Company's strategy.

The AUM of standalone IIFL Finance Limited (holding Company) grew 20% y-o-y to Rs.191988 million from Rs. 160566 million in the previous year. The AUM of IIFL HomeFinance Ltd grew 12% y-o-y to Rs. 206937 million as of March 312021 from Rs. 184947million in the previous year and that of Samasta Microfinance Limited grew 41% y-o-y toRs. 47956 million as on March 31 2021 from Rs. 33998 in the previous year. Our bookcontinues to get more granular with about 90% of the book as at March 31 2021 beingretail in nature. Moreover 36% of the loans are compliant with RBI's priority sectorlending norms. Gold loans are not deemed to be PSL compliant. The large share of retailand PSL compliant loans are of significant value in the prevailing environment as they canbe easily securitised/assigned with banks to raise long-term resources.

Our average cost of borrowings for the year declined by 28 bps y-o-y to 9.00% and NetInterest Margin (NIM) on Balance Sheet loans increased by 46 bps y-o-y to 6.83%.Consolidated GNPAs and NNPAs recognised as per RBI's prudential norms and provisioned asper Expected Credit Loss (ECL) method prescribed in Ind AS stood at 1.98%^ and 0.89%^ ofloans respectively as against 2.04%^ and 0.82%^ respectively in previous year '.

Provision coverage (incl. standard assets provision) under Ind AS norms on stage 3assets for the year was 185.76%.

Return on assets for the year was at 1.96% as compared to 1.46% in the previous year.Similarly return on equity for the year was at 14.83% as compared to 11.07% in theprevious year. It has mainly increased due to higher profits driven by increase in netinterest income and cost optimisation. Net interest income has mainly increased due tosuperior product mix and savings in cost of funds.

Despite the challenging environment for the industry we have managed our liquiditywell with adequate margin of safety. We raised long-term funds (excluding assigned andsecuritised) of Rs. 102.83 billion in FY 2020-21 including Rs. 6.70 billion from publicissue of unsecured subordinated non-convertible debentures. Our exposure to commercialpaper continues to be Nil. We completed securitisation and assignment transactions of Rs.112.33 billion in FY 2020-21. Our outstanding liability (excluding assignment andsecuritisation) mix remained well diversified with NCDs including sub-ordinate debtconstituting 37% Bank term loans and working capital finance constituting 53% and NHBre-finance constituting 10%. Our outstanding securitization / assignment balance grew by27% y-o-y to Rs. 149040 million. We had a positive ALM throughout the year wherebyinflows covered or exceeded expected outflows across all buckets.

 

C'GNPA and NNPA numbers excluding discontinued Healthcare equipment finance (HCF)business.)

Outlook

Though the pandemic brought challenges on the NBFC sector it gave rise to greateropportunities such as realignment of strategies cost optimisation and more focus ondigital mode for sustainable growth. With the second wave of Covid-19 leading to partiallockdown and restricted business activities the upside is vaccination drives are in fullswing across the country. The outlook for FY 2021-22 looks promising especially in theretail segment since macroeconomic indicators show that this segment is highly underpenetrated. For eg. mortgage to GDP ratio of India is hardly 10%. Our investment indigital and technology initiatives has enabled us to seamlessly conduct business in anuninterrupted manner even during lockdown periods. Wherever required our staffs areworking from home. Disbursements and physical collections which were impacted during theonset of Covid-19 are back to pre-Covid levels. IIFL Finance is well prepared to seizeopportunities and manage risks at every stage of our value chain.

The Government and RBI have introduced several liquidity and stimulus measures tosupport the NBFC industry which have slowly started to yield results. Disbursements arepicking up sequentially across the NBFC sector driven by moratorium exit pent-up andseasonally strong demand. The NBFC industry remains an important functionary in theeconomic ecosystem to fulfil credit requirement of credit starved and new to creditcustomers by bringing them into formal financial services ecosystem.

3. IMPACT OF COVID-19 PANDEMIC

The detailed disclosure on the material impact of Covid-19 pandemic on the Company isforming part of the Financial Statements of the Company. You may refer to Note no. 8 ofthe Standalone Financial Statement for the same.

4. MACROECONOMIC OVERVIEW

Indian economy has experienced a massive hit due to the spread of second wave ofCOVID-19. Partial restrictions and lockdowns slowed down business activities across thecountry. The wave of positivity came with the roll out of vaccines and revival of severalinfrastructure projects by the Government. This helped uplift morale while also boostingeconomic activities. Though uncertainty looms around on account of the second wave therecovery momentum should not be affected backed by vaccine rollout. The economy isstrongly fighting against the second wave of COVID-19 to handle the downside risks posedby cases.

The economy slowly graduated out of the contraction zone from a dip of 23.90% in June2020 to a positive 0.40% in December 2020 (Source: MOSPI). The latest GDP numbers supportthe economy's narrative of a strong sequential recovery. However the pace of ongoingrecovery and its ability to return to prepandemic levels remain slow. The eight coresector industries' index has shown a positive momentum with minor dips in the short-term.The outlook for the future remains optimistic with recovery in business activities. TheIndian economy is expected to show decisive and strong signs of recovery. These positivesignals are underpinned by the confidence post the vaccine roll out low interest ratesresurgence of consumer confidence and other investment-attracting measures. With strongprospects of robust growth gaining grounds in consumption and investment along with alower base effect GDP is estimated to grow at 11% in FY 2021-22 (Source: Economic Survey2020-21)

5. DIVIDEND ON EQUITY SHARES

During the year 2020-21 the Board of Directors of the Company declared and paid aninterim dividend of Rs. 3/- per equity share (i.e. 1.50 times of the face value of Rs. 2/-per equity share). This led to an outgo of Rs. 1135.41 million owing to dividend. YourDirectors recommend that the said interim dividend be considered as final. The dividendpaid during the previous financial year 2019-20 was Rs. 2.25/- 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.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of Directors of the Company has adopted aDividend Distribution Policy which is annexed as "Annexure V" to thisreport and is available on the website of the Company i.e. www.iifl.com.

6. KEY INITIATIVES / DEVELOPMENTS

Public Issue of Unsecured Sub-Ordinated Redeemable Non-Convertible Debentures

During the year under review IIFL Finance Limited raised through Public Issue ofUnsecured SubOrdinated Redeemable Non-Convertible Debentures ("NCDs") an amountaggregating to Rs. 6708.6 million. These NCDs are listed and traded on the NSE and BSE.

Issuance of Non-Convertible Debentures on Private Placement basis

During the year under review IIFL Finance Limited raised through Private Placement ofSecured Redeemable Non-Convertible Debentures ("NCDs") an amount aggregating toRs. 18511.7 million. These NCDs are listed on the NSE.

NHB Refinance

During the year under review National Housing Bank (NHB) sanctioned Rs. 12020 millionrefinance facility to IIFL

Home Finance Limited a Wholly Owned Subsidiary of the Company.

Funds raised by way of other Borrowings

During the year under review IIFL Finance Limited (consolidated) raised Rs. 66102.5million through term loan from various banks.

Sale stake of Samasta Microfinance During the year under review due to identifiedsynergies and to increase IIFL Home Finance Limited's penetration in semi urban and ruralareas in more strategic manner IIFL Finance Limited sold 66061285 number of fully paidequity shares of Rs. 10/- each constituting of upto 25% equity shares held by IIFL FinanceLimited in Samasta Microfinance Limited Subsidiary Company to IIFL Home Finance LimitedWholly-owned Subsidiary Company.

Additional investment in Samasta Microfinance During the year under review theCompany invested in Right Issue of equity shares of Samasta Microfinance Limited aSubsidiary of the Company for an amount of Rs. 675 million. The post allotment holding ofthe Company in Samasta Microfinance Limited is 74.09% and the post allotment holding ofIIFL Home Finance Limited a wholly owned subsidiary of the Company in SamastaMicrofinance Limited is 25%.

Transfer of real estate credit assets to an Alternate Investment Fund (AIF)

The Company is in the process of transferring a substantial part of its Construction& Real Estate (CRE) loan assets that are in the form of non-convertible debentures toan Alternative Investment Fund wherein the Company will continue to own at least a thirdof the AIF's units. The AIF has a target fund size of Rs. 36 billion. The capital releasedby the above transaction will strengthen Company's balance sheet and help to focussharply on retail lending in line with Company's strategy.

Ex-gratia

Reserve Bank of India vide its circular dated April 07 2021 instructed all lendinginstitutions to refund / adjust 'interest on interest' to all borrowers including thosewho had availed of working capital facilities during the moratorium period irrespectiveof whether moratorium had been fully or partially availed or not availed. Pursuant tothese instructions The Group has estimated an amount of Rs. 169.8 million and charged thesame to Profit and Loss Account for the year ended March 31 2021 on the basis of themethodology for calculation of the amount of such 'interest on interest' finalised by theIndian Banks Association (IBA) in consultation with other industry participants / bodies.

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

During the year under review IIFL Home Finance Limited did co lending tie ups withICICI Bank for providing affordable housing and secured MSME loans with StandardChartered Bank for secured MSME loans and for CSB Bank IIFL Finance Limited has tied up asBusiness Correspondent for gold loans. During the year ended March 312021 we havealready commenced business under the tie-ups with CSB Bank and ICICI Bank.

Corporate Social Responsibility (CSR) Initiative The Corporate SocialResponsibility ("CSR") Committee of the Board has formulated and recommended tothe Board a CSR Policy indicating the CSR activities which can be undertaken by theCompany. The Board approved the CSR Policy which is available on the website of theCompany i.e. www.iifl.com.

IIFL group has set-up India Infoline Foundation (generally referred to as "IIFLFoundation") a Section 8 Company under the Companies Act 2013 which acts as theprincipal arm to undertake CSR initiatives on behalf of the Company & itssubsidiaries. As per Rule 4(2) of the Companies (Corporate Social Responsibility Policy)Rules 2014 IIFL Foundation has registered itself with the Central Government by fillingthe e-Form CSR-1 with the Registrar of Companies.

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

• Girl Child Illiteracy Eradication programme.

• Redevelopment and digitisation of Maa Bari Learning Centers.

• Improving the quality of education in Government schools through technologicalinterventions.

• Support to the differently abled.

• Financial Literacy and Financial Inclusion.

• Health Initiative and facilities.

• Fight against Covid-19 by contributing to the PM-Cares Fund providing PersonalProtective Equipment (PPEs) Donating oxygen concentrators to rural areas supportingCovid Care Centers and donating Ventilator machine

• Livelihood support programmes.

During the year under review your Company deployed 2% of its average net profits(computed as per the relevant provisions of the Companies Act 2013) of the precedingyears on CSR projects fully utilizing the required amount.

Awards and Recognitions

During the year under review following awards and accolades were conferred by reputableorganisations details of the same is as follows: -

• IIFL Finance is recognised as one of The Economic Times Best Brands 2020

• IIFL Foundation's flagship girl child literacy program 'Sakhiyon Ki Baadi'received Women Empowerment Award at Golden Globe Tigers International Awards

• IIFL Foundation received 'outstanding contribution to the cause of education'award at National Award for CSR Excellence

• IIFL Foundation's flagship girl child education initiative 'Sakhiyon Ki Baadi'received the 'best CSR impact initiative award' at National Award for CSR Excellence

• IIFL Foundation's 'Sakhiyon Ki Baadi' initiative received the most promising CSRprogram at Goodera Karma Awards

• Ms Madhu Jain Director IIFL Foundation received the CSR Leadership Award atGolden Globe Tigers International Awards 2020

• Ms Madhu Jain Director IIFL Foundation received the CSR Leadership Award atNational Award for CSR Excellence

• IIFL Finance's #SeedhiBaat campaign received the Best PR Campaign award at theGlobal Marketing Excellence Awards

• IIFL Finance's #SeedhiBaat campaign received the Best Television Campaign awardat the Global Marketing Excellence Awards

• IIFL Finance's TVC with Rohit Sharma received the Best Marketing Campaign Awardat the National Awards for Marketing Excellence

• IIFL Home Loan recognised as one of The Best BFSI Brands by Economic Times

• IIFL received Golden Peacock Award for National Training 2020 under FinancialServices Category

• IIFL Finance received 'Great Place To Work' for the third year in a row

7. SHARE CAPITAL

During the year under review the total paid up equity share capital of the Companyincreased from Rs. 756681844/- to Rs. 757681352/- pursuant to allotment of 499754equity shares of Rs. 2/- each under Employee Stock Option Scheme(s) of the Company to theeligible employees.

The movement of share capital was as under:

Particulars No. of shares allotted Cumulative outstanding capital (no. of shares with face value of Rs. 2 each)
Capital at the beginning of the year - 756681844
Allotment of shares to employees on August 14 2020 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 27135 756736114
Allotment of shares to employees on September 21 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 27510 756791134
Allotment of shares to employees on December 02 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 52274 756895682
Allotment of shares to employees on December 22 2020 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 21668 756939018
Allotment of shares to employees on February 08 2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 56689 757052396
Allotment of shares to employees on March 16 2021 pursuant to exercise of options granted under Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme 314478 757681352

8. INVESTOR EDUCATION AND PROTECTION FUND (lEPF)

In accordance with the applicable provisions of Companies Act 2013 read with InvestorEducation and Protection Fund (Accounting Audit Transfer and Refund) Rules 2016("IEPF Rules") all unclaimed dividends are required to be transferred by theCompany to the IEPF after completion of seven (7) years. Further according to IEPFRules the shares on which dividend has not been claimed by the shareholders for seven (7)consecutive years or more shall be transferred to the demat account of the IEPF Authority.The details relating to amount of dividend transferred to the IEPF during 2020-21 andcorresponding shares on which dividends were unclaimed for seven (7) consecutive yearsare provided in the General Shareholders Information section of Corporate Governancereport forming part of this Annual Report.

9. SECURITISATION OF LOAN PORTFOLIO

During the year under review your Company (consolidated) as an originator hasundertaken securitisation transactions of total book value of loan assets amounting to Rs.34128.72 million and Direct Assignment transactions of total book value of loan assetsamounting to Rs. 89581.21 million.

10. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

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

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

2. IIFL Finance Employee Stock Option Plan 2008 ("ESOS Scheme 2008")

3. IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme ("ESOS Scheme2020")

Further no stock options were granted to the employees during the year under the ESOSScheme 2007 and ESOS 2020 Merger Scheme. The Company granted 50000 Stock Options toeligible employee during the year under ESOS Scheme 2008.

During the year under review 27315 stock options granted under ESOS Scheme 2008 gotlapsed and the same have been added back to the pool which can be used for further grantand 3458788 stock options granted under ESOS 2020 Merger Scheme got lapsed and the sameare not available for further grant.

Under Ind AS equity settled share based payment transactions with employees arerequired to be accounted for as per Ind AS 102 "Share-based Payment" wherebythe fair value of options as on the grant date should be estimated and recognised as anexpense over the vesting period. In accordance with above the Company has followed fairvalue method for equity options in its accounts.

There is no material change in Employees' Stock Option Scheme during the year underreview and the Scheme is in line with SBEB Regulations. A certificate from the Auditors ofthe Company that the Scheme has been implemented in accordance with the SBEB Regulationsand the resolution passed by the Members would be placed at the ensuing Annual GeneralMeeting ("AGM") for inspection by Members through electronic means. Thedisclosures relating to ESOPs required to be made under the provisions of the CompaniesAct 2013 and the SBEB Regulations are provided on the website of the Company i.e.www.iifl.com and the same is available for inspection by the Members at the RegisteredOffice of the Company on all working days except Saturdays Sundays and Public Holidaysduring business hours and through electronic means. Members can request the same bysending an email to shareholders@iifl.com till the AGM.

11. 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 the Standalone FinancialStatement (please refer to Note 8 9 and 37 to the standalone financial statement).

12. SUBSIDIARY COMPANIES

The Company is having following 2 (Two) subsidiaries and does not have any Associate /Joint Venture:

Particulars
1 IIFL Home Finance Limited
2 Samasta Microfinance Limited

During the year under review Clara Developers Private Limited ceased to be thewholly-owned subsidiary of the Company with effect from July 27 2020 due to sale of ClaraDevelopers Private Limited.

As per the provisions of Section 129 134 and 136 of the Companies Act 2013 read withapplicable Rules Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and applicable Indian Accounting Standards ("Ind AS") theBoard of Directors had at their meeting held on May 06 2021 approved the ConsolidatedFinancial Statements of the Company and its subsidiaries. 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 for2020-21. The Company will make these documents / details available upon request by anyMember of the Company. These documents / details will also be available for inspection byany Member of the Company at its registered office and at the registered offices of theconcerned subsidiaries during business hours on working days and through electronic means.Members can request the same by sending an email to shareholders@iifl.com till the AnnualGeneral Meeting. The Annual Reports of all the subsidiaries are available on the websiteof the Company i.e. www. iifl.com. The Company's financial statement including theaccounts of its subsidiaries which forms part of this Annual Report is prepared inaccordance with the Companies Act 2013 and Ind AS 110.

A report on the performance and financial position of each of the subsidiaries of theCompany as per the Companies Act 2013 is provided in the prescribed Form AOC-1 asAnnexure A of the Consolidated Financial Statements and hence not repeated here for thesake of brevity.

Pursuant to Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 IIFL Home Finance Limited and Samasta Microfinance Limited were theMaterial Subsidiaries of the Company for the financial year 2020-21 and shall be theMaterial Subsidiaries for the financial year 2021-22. In line with the provisions ofRegulation 24(1) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Mr. Arun Kumar Purwar Independent Director on the Board of the Companyis also an Independent Director of IIFL Home Finance Limited. The policy on determiningthe material subsidiary is available on the website of the Company i.e. www.iifl.com.

13. CAPITAL ADEQUACY

The capital adequacy ratio (Standalone) was at 25.40% as on March 312021 comprisingTier I capital ratio of 17.51% against the ratio of 10% as prescribed by the RBI.

14. ANTI CORRUPTION MECHANISM

The Company with a high regard for honesty and institutional integrity formulated anAnti-Corruption framework which consists of Anti-Corruption Gift and WhistleBlower/Vigilance policy applicable to all our employees and in our subsidiaries. TheCompany has responsibility both to the members and to the communities to which we dobusiness to be transparent in all our dealings.

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

The Vigilance Policy of the Company urges employees to report and escalate unfairtransactions without any fear of retribution. The Code of Conduct also includes proceduresdealing with Gifts and Entertainment conflicts of interest and other important matters.Risk Assessment framework identifying inherent corruption risks has been prepared andimplemented for all business and support verticals. The same is audited by our internalauditors. E-learning training and declaration on anti-corruption is mandatory for ouremployees to ensure understanding of anti-corruption policy and ways to mitigate suchrisk.

15. BUSINESS RESPONSIBILITY REPORT

The Business Responsibility Report in terms of Regulation 34(2)(f) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 describing theinitiatives taken by the Company from an environmental social and governance perspectiveis attached as part of the Annual Report.

16. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and Non-Banking Financial Company-Systemically ImportantNon-Deposit taking Company and Deposit taking Company Directions 2016 as amended("RBI Master Direction") the Management Discussion and Analysis Report formspart of this report.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Members of the Company's Board of Directors are eminent persons of proven competenceand integrity. Besides experience strong financial acumen strategic astuteness andleadership qualities they have a significant degree of commitment to the Company anddevote adequate time to meetings and preparation. In terms of requirement of ListingRegulations 2015 the Board has identified core skills expertise and competencies of theDirectors in the context of the Company's business for effective functioning which aredetailed in the Corporate Governance Report. The Board meets at regular intervals todiscuss and decide on Company / business policy and strategy apart from other Boardbusiness. The Board exhibits strong operational oversight with regular businesspresentations of meetings. The Company has complied with secretarial standards issued bythe Institute of Company Secretaries of India on Board meetings and Annual GeneralMeetings.

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. Arun Kumar Purwar Mr. Vijay Kumar Chopra and Ms. Geeta Mathur areIndependent Directors. Mr. Chandran Ratnaswami is NonExecutive Director and Mr. NagarajanSrinivasan is Non-Executive Director (Investor Director representing CDC Group Plc) of theCompany. The Board composition is in compliance with the requirements of the CompaniesAct 2013 ("the Act") SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") and the RBI Master Directions.

The Board is of the opinion that the Independent Directors of the Company has therequired integrity expertise and experience (including the proficiency).

b. Key Managerial Personnel

Mr. Nirmal Jain - Chairman and Whole Time Director Mr. R. Venkataraman - ManagingDirector Mr. Rajesh Rajak - Chief Financial Officer and Ms. Sneha Patwardhan - CompanySecretary are the Key Managerial Personnel as per the provisions of the Act and Rules madethereunder.

c. Appointment and Cessation of Directors and Key Managerial Personnel

In accordance with Section 152 of the Act read with Article 157 of the Articles ofAssociation of the Company Mr. R. Venkataraman is liable to retire by rotation at theensuing Annual General Meeting ("AGM") and being eligible has offered himselffor re-appointment. The Board recommends the same for the approval of Shareholders.

During the year Mr. Sumit Bali ceased to be the Chief Executive Officer of the Companyw.e.f. June 30 2020.

During the year Mr. Gajendra Thakur ceased to be the Company Secretary of the Companyw.e.f. July 312020 and Mr. Jayesh Sharma was appointed as Company Secretary of theCompany w.e.f. August 01 2020 in place of Mr. Gajendra Thakur. Thereafter Mr. JayeshSharma ceased to be the Company Secretary of the Company w.e.f. November 03 2020 and Ms.Sneha Patwardhan was appointed as the Company Secretary of the Company w.e.f. November 032020.

18. MEETING OF DIRECTORS & COMMITTEE / BOARD EFFECTIVENESS

0 Meetings of the Board of Directors

The Board met 8 (Eight) 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.

0 Committees of the Board

In accordance with the applicable provisions of the Companies Act 2013 ("theAct") and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Listing Regulations") and RBI Master Directions the Board constituted thefollowing Committees:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Asset Liability Management Committee (ALCO)

• IT Strategy Committee

Audit Committee

The Audit Committee comprises Mr. Vijay Kumar Chopra Independent Director Mr. NileshVikamsey Independent Director Ms. Geeta Mathur Independent Director and Mr. NagarajanSrinivasan Non-Executive Director.

The role terms of reference and powers of the Audit Committee are in conformity withthe requirements of the Act Listing Regulations and RBI Master Directions and the samehas been provided in the Corporate Governance Report.

The Committee met during the year under review and discussed on various mattersincluding financials internal audit reports and Audit Report. During the period underreview the Board of Directors of the Company accepted all the recommendations of theAudit Committee.

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

Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises Mr. Vijay Kumar Chopra IndependentDirector Mr. Nilesh Vikamsey Independent Director Mr. Arun Kumar Purwar IndependentDirector and Mr. Nagarajan Srinivasan Non-Executive 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 Act Listing Regulations and RBI MasterDirections and the same has been provided in the Corporate Governance Report.

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a Nomination and Remuneration policy in compliance with the aforesaid provisionsfor selection and appointment of Directors Key Managerial Personnel Senior ManagementPersonnel of the Company. The Nomination and Remuneration policy is available on thewebsite of the Company i.e. www.iifl.com.

The said policy and the details of Committee meetings held during the year under revieware provided in the Corporate Governance Report.

Corporate Social Responsibility Committee (CSR Committee)

The CSR Committee comprises Mr. Nirmal Jain Chairman Mr. Nilesh Vikamsey IndependentDirector and Mr. R. Venkataraman Managing Director.

The Committee has approved CSR Policy of the Company and the same is available on thewebsite of the Company i.e. www.iifl.com. The CSR Report on activities in accordance withthe Companies (Corporate Social Responsibility Policy) Rules 2014 is attached as "AnnexureI" to this report.

The roles details of Committee meeting held during the year and the terms of referenceof CSR Committee are provided in the Corporate Governance Report.

Stakeholders Relationship Committee

The Stakeholders Relationship Committee comprises Mr. Arun Kumar Purwar IndependentDirector Mr. Vijay Kumar Chopra Independent Director and Mr. R. Venkataraman ManagingDirector.

The role terms of reference and power of the Stakeholders Relationship Committee arein conformity with the requirements of the Act and Regulation 20 of Listing Regulationsand the same has been provided in the Corporate Governance Report.

The details of Committee meeting held during the year under review and status ofcomplaints are provided in the Corporate Governance Report.

Risk Management Committee

The Risk Management Committee comprises Mr. Arun Kumar Purwar Independent DirectorMr. R. Venkataraman Managing Director Mr. Nilesh Vikamsey Independent Director Ms.Geeta Mathur Independent Director Mr. Nagarajan Srinivasan Non-Executive Director andMr. Sanjeev Srivastava Chief Risk Officer. The role terms of reference and power of theRisk Management Committee are in conformity with the requirements of Regulation 21 ofListing Regulations and RBI Master Directions and the same has been provided in theCorporate Governance Report.

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

Asset Liability Management Committee (ALCO)

The ALCO comprises Mr. Vijay Kumar Chopra Independent Director Mr. R VenkataramanManaging Director Mr. Rajesh Rajak Chief Financial Officer Mr. Sanjeev SrivastavaChief Risk Officer and Mr. Govind Modani V.P. Treasury.

The role terms of reference and power of the ALCO are in conformity with therequirements of the provisions of RBI Master Direction and Asset Liability Management(ALM) System for NBFCs - Guidelines and the same has been provided in the CorporateGovernance Report.

IT Strategy Committee

The IT Strategy Committee comprises Mr. Nilesh Vikamsey Chairman Ms. Geeta MathurMember Mr. Aditya Sisodia Member Mr. Raghunathan Balaji Member Mr. SanjeevSrivastava Member Mr. Sanjay Tiwari Member and Mr. Shankar Ramrakhiani Member.

The role terms of reference and power of the IT Strategy Committee are in conformitywith the requirements of the Master Direction - Information Technology Framework for theNBFC Sector issued by the RBI and the same has been provided in the Corporate GovernanceReport.

Besides the aforesaid Committees the Board of Directors of the Company has constitutedCommittees comprising of Senior Management Persons for day to day operations of theCompany viz. Finance Committee Group Credit Committee Credit Committee EnvironmentSocial and Governance Committee etc.

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-a-vis the Company the industry in which theCompany operates and business model etc.

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

Details of the Familiarisation Programme are provided in the Corporate GovernanceReport and are also available on the website of the Company i.e. www.iifl.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 annual performanceevaluation of its own performance the Directors individually including IndependentDirectors based out of the criteria and framework adopted by the Board. The Board approvedthe evaluation results as collated by the Nomination and Remuneration Committee("NRC"). The evaluation process manner and performance criteria for IndependentDirectors in which the evaluation has been carried out is explained in the CorporateGovernance Report. The Board considered and discussed the inputs received from theDirectors. Also the Independent Directors at their meeting held on March 24 2021reviewed the following:

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

(b) Performance of the Chairperson of the Company.

(c) 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 satisfaction with overall functioning andimplementations 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 of theCompany that they meet the criteria of independence laid down in Section 149(6) of theCompanies Act 2013 ("the Act") and Regulation 16(1)(b) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations").

The above declarations were placed before the Board and in the opinion of the Board allthe Independent Director fulfils the conditions specified under the Act and the ListingRegulations and are Independent to the Management.

There has been no change in the circumstances or situation which exist or may bereasonably anticipated that could impair or impact the ability of Independent Directorsto discharge their duties with an objective of independent judgment and without anyexternal influence.

The Independent Directors of your Company have registered on the Independent Directors'Databank as per the requirements of Section 149 of the Companies Act 2013 and theapplicable rules thereto.

• Fit and Proper Criteria & Code of Conduct

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

All the Directors of the Company have affirmed compliance with the Code of Conduct ofthe Company. The Declaration of the same is provided in the Corporate Governance Report.

• Board Diversity

The Company recognises and embraces the importance of a diverse Board in its success.The Company believes that a truly diverse Board will leverage difference in thoughtperspective knowledge skills regional and industry experience cultural andgeographical backgrounds age ethnicity race gender that will help us retain ourcompetitive advantage. The policy adopted by the Board sets out its approach to diversity.The policy is available on the website of the Company i.e. www.iifl.com.

19. RISK MANAGEMENT

The Company has in place a Risk Management Committee constituted in accordance with theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and RBI MasterDirections to assist the Board in overseeing the Risk Management activities of theCompany approving measurement methodologies and suggesting appropriate risk managementprocedures mitigating all the risks that the organisation faces such as strategicfinancial credit market liquidity security property IT legal regulatoryreputational and other risks which have been identified and assessed. There is an adequaterisk management infrastructure in place capable of addressing those risks.

In light of Covid-19 pandemic the organisation has put in place an exhaustiveframework to manage any event specific risk. This framework included:

i. A quick response team comprising of senior management personnel to address anypeople risk be it on health front or psychological support;

ii. Customer support team to seamlessly address any customer grievances / complaints;

iii. Information technology steering committee to address technology related challengesand support;

iv. Senior management team who undertook an ongoing evaluation of asset quality andliquidity in lieu of the fast changing external environment. On an ongoing basis updateswere sent to Board to appraise them on the ground situation and provide an outlook.

The Company's management monitors and reports principal risks and uncertainties thatcan affect its ability to achieve its strategic objectives. The Company's managementsystems organisational structures policy processes standards and code of conducttogether form the risk management governance system of the Company.

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

20. 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 verified the systems andprocesses and confirmed that the Internal Financial Controls system over financialreporting are adequate and such controls are operating effectively.

21. 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 Related Party Transactions (RPTs) necessary approvals by the Audit Committee / Board /Shareholders reporting and disclosure requirements in compliance with the Companies Act2013 and provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.

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 RPTs wereplaced before the Audit Committee/ Board for approval wherever applicable. The AuditCommittee reviews all RPTs quarterly.

The Company has obtained the shareholder's approval on Material Related PartyTransaction in the previous Annual General Meeting.

During the year the Company has entered into contract/ arrangement / transaction withrelated parties which could be considered material in accordance with Regulation 23 ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and the policy ofthe Company on materiality of RPTs. The policy for determining 'material' subsidiaries andthe policy on materiality of RPTs and dealing with RPTs as approved by the Board may beaccessed on the website of the Company i.e. www.iifl.com. You may refer to Note no. 40 ofthe Standalone Financial Statement which contains related party disclosures. Since allRPTs entered into by the Company were on an arm's length basis and in the ordinary courseof business. The Company has not entered into any transaction requiring disclosure in FormAOC-2 hence the same is not provided.

Considering the Company is being NBFC and its nature of business and operations theCompany will be/continue entering into various Related Party Transactions in the ordinarycourse of business and accordingly the Company has sought approval from shareholders forMaterial Related Party Transactions and details of same can be sought from the NoticeConvening the Annual General Meeting of the Company.

22. ANNUAL RETURN

As required under Section 92(3) of the Act and the Rules made thereunder and amendedfrom time to time the Annual Return of the Company in prescribed Form MGT-7 is availableon the website of the Company i.e. www.iifl.com.

23. 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 had occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this annual report.

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

The information on energy conservation technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 is appended as "Annexure -MI" and forms part of this Report.

25. 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 / Vigil Mechanism and has established the necessary vigil mechanism for DirectorsEmployees and Stakeholders of the Company to report genuine concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's code of conduct orethics policy. The Company has disclosed the policy on the website of the Company i.e.www.iifl.com.

26. CREDIT RATING

The Company's financial discipline and prudence is reflected in the strong creditratings ascribed by rating agencies. The following Credit ratings were assigned to theCompany as on March 312021.

Rating Agency Product Rating As on March 31 2021 Rating As on March 31 2020
CARE Non-Convertible Debenture CARE AA Negative CARE AA Stable
Long Term Bank Facilities CARE AA Negative CARE AA Stable
Preference Shares NA CARE AA(RPS) Stable
Subordinate Debt CARE AA Negative CARE AA Stable
ICRA Limited Non-Convertible Debentures Programme [ICRA]AA (Negative) [ICRA]AA (Negative)
Commercial Paper programme [ICRA]A1 + [ICRA]A1 +
Subordinate Debt Programme [ICRA]AA (Negative) [ICRA]AA (Negative)
Long Term Bank Lines [ICRA]AA (Negative) [ICRA]AA (Negative)
Long Term Principle Protected Equity Linked Debenture Programme PP-MLD[ICRA]AA (Negative) PP-MLD[ICRA] AA (Negative)
Long Term Principle Protected Market Linked Debenture Programme PP-MLD[ICRA]AA (Negative) PP-MLD[ICRA] AA (Negative)
Commercial Paper programme (IPO financing) [ICRA]A1 + [ICRA]A1 +
Long term Debt programme NA [ICRA]AA (Negative)
Secured NCD Programme NA [ICRA]AA (Negative)
Un-secured NCD Programme NA [ICRA]AA (Negative)
CRISIL Limited Non-Convertible Debentures CRISIL AA/Stable CRISIL AA/Stable
Subordinate Debt CRISIL AA/Stable CRISIL AA/Stable
Long Term Principal Protected Market Linked Debentures CRISIL PP-MLD AAr/Stable CRISIL PP-MLD AAr/Stable
Commercial Paper programme (IPO financing) CRISIL A1 + CRISIL A1 +
Commercial Paper CRISIL A1 + CRISIL A1 +
Total Bank Loan Facilities Rated (Long Term Rating) CRISIL AA/Stable CRISIL AA/Stable
Brickwork NCDs (Public Issue) BWR AA+ Negative BWR AA+ Negative
Ratings Non-Convertible Debentures BWR AA+ Negative
Secured Non-Convertible Debentures BWR AA+ Negative BWR AA+ Negative
Unsecured Subordinated NonConvertible Debentures BWR AA+ Negative BWR AA+ Negative
Moody's Corporate family rating (CFR) B2 / Stable Ba3 / Stable
Long-term foreign- and local-currency senior secured ratings to USD 1 billion Medium Term Note (MTN) program. B2 / Stable Ba3 / Stable
Fitch Senior secured notes issued under USD 1 billion Medium Term Note (MTN) Programme B+ / Stable B+ / Negative Watch
Senior secured notes issued under USD 400 million bond B+ / Stable
Long-Term Issuer Default Rating (IDR) NA B+ / Negative Watch

• During the year CARE has reaffirmed the rating i.e. CARE AA however outlook hasbeen revised from Stable to Negative.

• During the year Fitch has affirmed the rating i.e. B+ however outlook has beenrevised from Negative to Stable.

• During the year Moody's has changed its rating from Ba3 to B2.

27. 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 and has duly constituted an Internal Complaints Committee under the same. TheCompany also provides for mandatory online training on Prevention of Sexual Harassment forevery new joinee as well as all employees on an annual basis.

The details of complaints received pursuant to the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 are provided in the CorporateGovernance Report.

28. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 ("the Act") read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are providedin "Annexure - IV" to this report.

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 first 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 and through electronic means up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining a copy thereof such Member maywrite to the Company Secretary at shareholders@ iifl.com whereupon a copy would be sent.

29. STATUTORY AUDITORS

Upon resignation of erstwhile Statutory Auditors M/s Deloitte Haskins & Sells LLPChartered Accountants (Firm's Registration Number 117366W/ W-100018) on June 07 2020 M/sV Sankar Aiyar & Co Chartered Accountants (Firm Registration Number 109208W) wereappointed as the Statutory Auditors of the Company by the Members at the 25th AnnualGeneral Meeting ("AGM") of the Company held on June 30 2020 for a period of 5(five) years from the conclusion of the ensuing 25th AGM till the conclusion of the 30thAGM to be held in the year 2025 at such remuneration plus out of pocket expenses andapplicable taxes as may be mutually agreed between the Board of Directors of the Companyand the Auditors.

The firm holds a Peer Review Certificate No. 11660 dated April 15 2019 issued by thePeer Review Board of the Institute of Chartered Accountants of India valid till April 142022.

The Audit for FY 2020-21 was conducted by M/s V Sankar Aiyar & Co and there are noqualifications reservations adverse remarks or disclaimers made by the Statutory Auditorin their Audit Report. The Notes to the financial statements referred in the AuditorsReport are self-explanatory and therefore do not call for any comments under Section 134of the Companies Act 2013. The Auditors' Report is enclosed with the financial statementsin the Annual Report.

30. SECRETARIAL AUDIT

The Board had appointed M/s Nilesh Shah & Associates Practicing CompanySecretaries to conduct Secretarial Audit of the Company for the financial year 2020-21.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 - II" tothis report. There are no qualifications or observations in the Report.

31. REPORTING OF FRAUDS BY AUDITORS

During the year under review the Statutory Auditor 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.

32. RBI DIRECTIONS

Your Company complies with the direction(s) circular(s) notification(s) andguideline(s) issued by the RBI as applicable to your Company as a systemically importantnon-deposit taking NBFC.

The Company has in place the system of ensuring compliance with applicable provisionsof Foreign Exchange Management Act 1999 and rules made thereunder.

33. 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 and the RBI Master Directions forms an integral part ofthis Report. The requisite certificate from the M/s Nilesh Shah & AssociatesPracticing Company Secretaries confirming compliance with the conditions of CorporateGovernance is attached to the report on Corporate Governance.

Your Company has complied with all the norms prescribed by the RBI including the FairPractices Code Anti Money Laundering and Know Your Customer (KYC) guidelines besidesother guidelines.

34. COMPLIANCE WITH THE SECRETARIAL STANDARDS

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

35. DEPOSITS

During the period under review your Company did not accept / renew any deposits withinthe meaning of Section 73 of the Companies Act 2013 and the rules made there under and assuch no amount of principal or interest was outstanding as on the balance sheet date.Further The Company did not hold any public deposits at the beginning of the year nor hasit accepted any public deposits during the year under review.

36. 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 applicable accounting standards hadbeen followed and there are no material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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

e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

37. GENERAL

Your Directors state that during the financial year 2020-21:

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

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

3. 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.

4. The Central Government has not prescribed the maintenance of cost records for any ofthe products of the Company under sub-section (!) of Section 148 of the Companies Act2013 and the Rules framed there under.

5. There is no change in nature of business of the Company during the year.

6. The details of Debenture Trustees of the Company are as follows:

Catalyst Trusteeship Limited IDBI Trusteeship Services Limited Milestone Trusteeship Services Private Limited
Address- GDA House First Floor Plot No. 85 S. No. 94 & 95 Bhusari Colony (right) Kothrud Pune- 411038 Address- Asian Building Ground Floor 17 R.Kamani Marg Ballard Estate Mumbai- 400001 Address- Cowrks Worli PS56 3rd Floor Birla Centurion Century Mills Compound Pandurang Budhkar Marg Worli Mumbai - 400030
Phone- 022 49220555 Phone-+91 2240807001 Phone- +91 22 628861 19
Fax No- 022 49220505 Fax No- +91 22 6631 1776 Fax No- +91 22 67167077
Email-complianceCTL-Mumbai@ ctltrustee.com Email-itsl@idbitrustee.com Email-compliance@milestonetrustee.in
Website-www.catalysttrustee.com Website- www.idbitrustee.com Website- www.milestonetrustee.in

38. APPRECIATION

Your Directors place on record their sincere appreciation for the assistance andguidance provided by the Reserve Bank of India the Ministry of Corporate Affairs theSecurities and Exchange Board of India government and other regulatory Authorities stockexchanges other statutory bodies Company's bankers Members and employees of the Companyfor the assistance cooperation and encouragement and continued support extended to theCompany.

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 helping theCompany 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
Date: May 06 2021 Chairman
Place: Mumbai (DIN: 00010535)

.