ILandFS Investment Managers

The Directors have pleasure in presenting for your consideration and
 approval the Twenty Second Annual Report with the Audited Financials of
 the Company fortheyearended March 31,2008
 
 FINANCIAL ACHIEVEMENTS AND DIVIDEND
                                For the year ended For the year ended
                                   March  31, 2008     March 31, 2007
                                    (Rs. Million)       (Rs. Million)
 
 Total Income                            825.54             503.26
 Profit before Taxation                  423.73             267.23
 Provision for Taxation                  143.39              94.22
 Net Profit after Taxation               280.35             173.01
 Balance of Profit brought forward        46.72              16.31
 Profit available for appropriation      327.06             189.32
 
 Appropriations :
 General Reserve                          30.00              22.29
 Dividend (inclusive of dividend tax)    170.68             120.31
 Balance carried to Balance Sheet        126.38              46.72
 
 Adjusted for an amount of Rs 3.65 million due to capitalization done
 for Issue of Bonus Shares
 
 DIVIDEND
 
 During the year, your Company achieved a net profit after tax of Rs
 280.35 million. Your Directors recommend a dividend of Rs 5.50 per
 share. The total amount of dividend is Rs170.68 million (inclusive of
 dividend tax of Rs24.79 million)
 
 REVIEW OF OPERATIONS
 
 Income: The income from operations for this year was Rs 753.74 million
 as compared to Rs 465.14 million in the previous year
 
 Inclusive of Income from Investments of Rs 69.17 million and Other
 Income of Rs 2.63 million, the Gross Income for Financial Year 2007-08
 was Rs 825.54 million against Rs 503.26 million in the previous year
 
 Operating Expenses: The total Operating Expenses for the year were Rs
 398.31 million against Rs 211.12 million in the previous year
 
 Profits: The Profit after tax for the year was Rs 280.35 million
 against Rs 173.01 million in the previous year
 
 DIRECTORS
 
 Mr Arun Saha and Mr Vibhav Kapoor retire by rotation at the ensuing
 Annual General Meeting of the Company and being eligible offer
 themselves for re-appointment. During the year Mr Alok Bhargava was
 appointed as an Executive Director of the Company at the Board Meeting
 held on January 25,2008. Since Mr Bhargava was appointed as an
 Additional Director of the Company he holds office upto the date of the
 ensuing Annual General Meeting of the Company and being eligible offers
 himself for appointment. The Company has received a notice under
 Section 257 of the Companies Act, 1956 proposing appointment of Mr Alok
 Bhargava as Director of the Company. During the year Mr Rajaraman
 Viswanathan and Mr Narendra Prasad resigned and ceased to be Directors
 of the Company with effect from September, 2007
 
 STATUTORY AUDITORS
 
 The Statutory Auditors of the Company M/s Deloitte Haskins& Sells,
 Chartered Accountants, retire at the conclusion of the ensuing Annual
 General Meeting and have expressed their willingness to continue as
 Auditors, if re-appointed,attheensuingAnnual General Meeting
 
 The Company has also received a certificate from M/s Deloitte Haskins &
 Sells under Section 224(1 B) of the Companies Act, 1956 confirming
 their eligibility for re-appointment
 
 INCREASE IN SHARE CAPITAL
 
 During the year your Company allotted 815,530 Equity Shares on the
 exercise of Options issued under the Employee Stock Option Plans 2004
 &2006
 
 Further, the Board of Directors of your Company at their meeting held
 on April 1,2008 approved the issue of Bonus Shares in the ratio of one
 Bonus Share for every two existing Equity Shares held by the members of
 the Company subject to the approval of the members of the Company. The
 resolution forapproval of bonus issue by the members of the Company is
 being placed before the members in the ensuing Annual General Meeting
 of the Company
 
 CORPORATE GOVERNANCE
 
 Pursuant to Clause 49 of the Listing Agreement with the Stock
 Exchanges, Report on Corporate Governance along with Management
 Discussion and Analysis and Auditors certificate on compliance with
 the Corporate Governance requirements have been included in this Annual
 Report as separate sections
 
 SUBSIDIARY COMPANIES
 
 During the year2007-2008yourCompany had the following subsidiaries
 IL&FSAsian Infrastructure Managers Limited, IL&FS Urban Infrastructure
 Managers Limited, IL&FS Investment Advisors LLC and IL&FS Singapore
 Asset Management Company Pte Ltd.
 
 Pursuant to Section 212 of the Companies Act, 1956 the Company had made
 an application with the Ministry of Corporate Affairs, Government of
 India and sought exemption from attaching with the Balance Sheet of the
 Company, the Accounts and other documents of each of the Subsidiary
 Companies of the Company. The Ministry of Corporate Affairs, Government
 of India vide its letter no. 47/197/2008-CL-lll dated April 23, 2008,
 has granted the exemption to the Company. In compliance with the terms
 of said exemption the Company has attached a summary financial
 statement of each of the Subsidiary Company in compliance with the
 aforesaid letter of the Ministry of Corporate Affairs
 
 As per Clause 32 of the Listing Agreement the consolidated financial
 statements of the Company with its Subsidiaries form part of the Annual
 Report. The copies of the audited annual accounts of the Companys
 Subsidiaries and other related documents, can also be sought by any
 member of the Company or its Subsidiaries on making a written request
 to the Company Secretary in this regard. The Annual Accounts of the
 Subsidiary Companies are also available for inspection by any investor
 at the Companys and/or the concerned Subsidiaries registered office
 
 DEPOSITS
 
 Your Company has not accepted any deposits from the public for the year
 under consideration
 
 FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 The particulars regarding foreign expenditure and earnings appear as
 Item Nos. 8 (ii) and 8 (iii) respectively, of Schedule 13 to the Notes
 to the Accounts
 
 Since the Company does not own any manufacturing facility, the other
 particulars in the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988 are not applicable
 
 PERSONNEL
 
 Your Directors wish to place on record their appreciation of the
 services rendered by the employees of the Company at all levels. The
 particulars of the employees as required under Section 217(2A) of the
 Companies Act, 1956 read with Companies (Particulars of Employees)
 Rules, 1975 are set out in the annexure to the Directors Report
 
 DETAILS OF EMPLOYEE STOCK OPTION PLANS
 
 The detailed disclosures as per SEBI (Employee Stock Option Scheme and
 Employee Stock Purchase Scheme) Guidelines, 1999 of the ESOP Schemes of
 the Company are annexed to the Directors Report
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Your Directors wish to state that:
 
 (a) in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 (b) they had selected such accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year and of the profit of the
 Company for that year;
 
 (c) they had taken proper and sufficient care for the maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities;
 
 (d) they had prepared the annual accounts on a going concern basis
 
 ACKNOWLEDGEMENT
 
 Relationship with Members, Investors of the funds under management,
 Reserve Bank of India, Securities and Exchange Board of India, other
 Regulatory authorities, investee companies and our bankers remained
 excellent during the year under review. Your Directors are grateful for
 the support extended by them and look forward to receiving their
 continued support and encouragement
 
                                         For and on behalf of the Board
 
 Place : Mumbai                                       S M DATTA
 Date  : April 24, 2008                                Chairman