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IIFL Finance Ltd.

BSE: 532636 | NSE: IIFL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE530B01024 | SECTOR: Finance - General

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report

Dear Shareholders,

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

1. FINANCIAL RESULTS

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

Rs. in Million

Name of Company

Revenue

Profit after tax

IIFL Holdings Limited

2,530.03

2,043.48

India Infoline Finance Limited

25,051.94

3,544.97

India Infoline Housing Finance Limited

12,686.66

1,974.09

Samasta Microfinance Limited

967.83

25.83

IIFL Securities Limited (Formerly known as India Infoline Limited)

6,345.96

1,293.89

IIFL Wealth Management Limited

7,265.35

1,484.57

IIFL Wealth Finance Limited

7,829.77

1,560.20

IIFL Asset Management Limited

1,030.36

297.25

IIFL Asset Management (Mauritius) Limited

1,256.58

706.30

IIFL Facilities Services Limited (Formerly known as IIFL Real Estate Ltd.)

1,448.97

131.28

IIFL Insurance Brokers Limited (Formerly known as India Infoline Insurance Brokers Limited)

299.08

138.35

IIFL Commodities Limited (Formerly known as India Infoline Commodities Limited)

135.67

19.28

IIFL Distribution Services Limited

196.24

1.19

IIFL Capital Pte. Limited

266.35

19.02

IIFL Private Wealth Management (Dubai) Limited

78.02

7.39

IIFL Securities Pte Limited

84.78

18.44

IIFL Investment Adviser and Trustee Services Limited

382.80

102.67

IIFL Alternate Asset Advisers Limited

63.46

23.32

IIFL Private Wealth Hong Kong Limited

20.61

3.20

IIFL Trustee Limited (Formerly India Infoline Trustee Company Limited)

17.83

9.50

IIFL Inc

59.71

(18.36)

India Infoline Media and Research Services Limited

163.33

111.15

IIFL Capital Inc.

141.76

13.51

IIFL Wealth (UK) Limited

94.49

5.11

Others

412.22

8.15

Consolidated Financial Results

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

Rs. in Million

Particulars

2017-18

2016-17

Gross total income

38,541.62

31,639.98

Profit before interest, depreciation and taxation

28,230.05

24,689.26

Interest and financial charges

18,967.68

17,793.52

Depreciation

173.05

158.72

Profit before tax (from Continuing Operations)

9,089.32

6,737.02

Taxation - Current

3,096.97

2,420.07

- Deferred

(250.24)

(186.34)

- Short or excess provision for income tax

2.74

25.77

Net profit for the year (from Continuing Operations)

6,239.85

4,477.52

Profit/(loss) before tax from Discontinuing Operation

7,587.58

5,502.90

Tax Expenses of Discontinuing Operations

2,206.66

1,758.62

Profit from Discontinuing Operations after tax

5,380.92

3,744.28

Net profit before minority interest

11,620.77

8,221.80

Less: Share of Profit to Minority Shareholders / Share of profit from Associates

2,507.53

1,360.91

Net Profit after Taxes, Minority Interest and Share of profit of Associates Companies

9,113.24

6,860.89

Less: Minority interest

(146.45)

(730.36)

Opening Adjustments

234.79

-

On account of demerger of 5Paisa Capital Ltd.

12.45

-

Less: Appropriations

Dividend

(1,592.38)

(1,449.62)

Dividend Distribution Tax

(270.72)

(291.04)

Transfer to Special Reserve

(1,422.21)

(1,082.40)

Transfer to Debenture Redemption Reserve

(617.02)

(830.15)

Transfer to Capital Redemption Reserve

(750.00)

(1,500.00)

Deferred tax Liability

-

(14.81)

Add: Balance brought forward from the previous year

6,541.66

5,579.15

Balance to be carried forward

11,103.36

6,541.66

* Previous periods figures have been regrouped / rearranged wherever necessary

Standalone Financial Results:

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

Rs. in Million

Particulars

2017-18

2016-17

Gross total income

1,588.09

1,428.71

Profit before interest, depreciation and taxation

1,555.22

1,408.70

Interest and financial charges

NIL

NIL

Depreciation

4.19

1.94

Profit before tax

1,551.03

1,406.76

Taxation - Current

NIL

NIL

- Deferred

NIL

NIL

- Short or excess provision for income tax

NIL

NIL

Profit/(loss) after Tax from Continuing Operations

1,551.03

1,406.76

Profit/(loss) after tax from Discontinuing Operations

492.45

161.02

Profit/(loss) for the year

2,043.48

1,567.78

Less: Appropriations

Interim Dividend

(1,592.38)

(1,429.19)

Dividend Distribution Tax

(0.96)

(0.64)

Transfer to Debenture Redemption Reserve

(31.22)

(41.9)

Add: Balance brought forward from the previous year

2,310.18

2,214.13

On account of demerger of 5paisa Capital Limited

12.45

-

Balance to be carried forward

2,741.55

2,310.18

* Previous periods figures have been regrouped / rearranged wherever necessary

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

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

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

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

3. MACROECONOMIC OVERVIEW

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

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

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

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

4. DIVIDEND ON EQUITY SHARES

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

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

5. SCHEME OF ARRANGEMENTS

Composite Scheme of Arrangement

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

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

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

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

iv. amalgamation of IIFL Finance with the Company; and

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

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

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

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

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

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

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

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

The Appointed Date for the amalgamation of IIFL M&R with the Company is opening hours of April 1, 2017 and for all the other steps, the Appointed Date is opening hours of April 1, 2018. The Scheme will be given effect to upon receipt of requisite approvals of National Company Law Tribunal (“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 Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited subject to necessary approvals.

The Rationale of the Scheme is as under:

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

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

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

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

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

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

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

The above is subject to regulatory and NCLT approval.

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

Demerger of 5paisa digital Undertaking

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

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

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

Demerger of IIFL Facilities Services Limited

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

Merger of Ayusha Dairy Private Limited

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

6. KEY INITIATIVES/DEVELOPMENTS:

i. Investment Banking

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

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

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

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

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

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

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

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

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

ii. Asset Management

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

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

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

1) Category II Alternative Investment Funds:

a. IIFL Special Opportunities Fund and its series till 7

b. India Housing Fund

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

3) IIFL Mutual Fund

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

iii. Real Estate Investment Trust (REIT) Initiative

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

iv. Slump sale of Commodities Broking Business

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

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

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

vi. Corporate Social Responsibility (CSR)

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

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

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

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

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

c) Rural Transformation in Maharashtra.

d) Financial Literacy and Financial Inclusion.

e) Preventive Health.

f) Disaster Relief and Rehabilitation.

g) Integrated rural development, drought relief and water conservation

(h) Protection of culture

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

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

vii. Investor Conference/Events

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

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

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

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

- Adda Express

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

- Off The Cuff (OTC)

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

- Value of Things (VoT)

Value of Things 2018 was held over two chapters in Delhi and Pune with over 1000 attendees collectively. It was a celebration of the ideals that create values, the values that represent people and the people that understand these values. We recognised four common values that drive our clients’ businesses - Ambition, Passion, Innovation and Foresight. Speakers included Business futurist Patrick Schwerdtfeger, Eminent Journalist T. N. Ninan & Motivational speaker Capt. Raghu Raman.

- Positive Action Changes Things (PACT)

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

- Dhan Ki Baat

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

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

viii. Awards and Recognitions

The following awards were conferred in FY18:

- IIFL was featured in the prestigious Forbes list of India’s Super 50 Companies

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

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

- IIFL received the “Great Places to Work” Certification

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

- IIFL received the”Data Center Innovation award” for adopting futuristic technology

- ETNOWDealingRoomHeroes2017

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

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

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

- IIFL was awarded “Best IPO Bidding Member -Retail” at the NSE Market Achievers Awards

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

- IIFL was awarded as ”lndia’s Greatest CSR Brand” by Asia One magazine

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

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

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

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

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

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

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

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

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

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

7. SHARE CAPITAL

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

8. EMPLOYEES STOCK OPTION SCHEMES (ESOS)

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

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

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

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

10. SUBSIDIARY COMPANIES

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

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

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

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

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

11. BUSINESS RESPONSIBILITY REPORT

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

12. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Directors

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

In accordance with Section 152 of the Companies Act, 2013 (“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 and being eligible has offered himself for reappointment. The Board recommends the same for the approval of Shareholders.

b. Key Managerial Personnel

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

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

14. Meeting of Directors & Committee/Board Effectiveness

- Meetings of the Board of Directors

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

- Committees of the Board

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

- Audit Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Stakeholders Relationship Committee

- Risk Management Committee

- Audit Committee:

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

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

The role, terms of reference and powers of the Nomination and Remuneration Committee are in conformity with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same have been provided in the Corporate Governance Report. The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Nomination and Remuneration policy in compliance with the aforesaid provisions for selection and appointment of Directors, KMP, senior management personnel of the company. The said policy and the details of Committee meetings are provided in the Corporate Governance Report.

- Corporate Social Responsibility Committee

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

- Stakeholders Relationship Committee

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

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

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

- Risk Management Committee

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

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

- Board Effectiveness

- Familiarisation Program for the Independent Directors

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

- Board Evaluation

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

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

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

- Performance of the Chairperson of the Company

- Assessed the quality, quantity and timeliness of flow of information between the Company’s management and the Board, which is necessary for the Board to effectively and reasonably perform their duties

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

The evaluation process endorsed the Board Members’ confidence in the ethical standards of the Company, the cohesiveness that exists amongst the Board Members, the two-way candid communication between the Board and the Management and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities.

- Declaration by Independent Directors

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

15. DIRECTORS’ RESPONSIBILITY STATEMENT

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

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

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

c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

16. RISK MANAGEMENT

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

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

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

17. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal controls with reference to financial statements and operations and the same are operating effectively. The Internal Auditors tested the design and effectiveness of the key controls and no material weaknesses were observed in their examination. Further, Statutory Auditors verified the systems and processes and confirmed that the Internal Financial Controls system over financial reporting are adequate and such controls are operating effectively.

18. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

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

All contracts executed by the Company during the financial year with related parties were on arm’s length basis and in the ordinary course of business. All such Related Party Transactions were placed before the Audit Committee/Board for approval, wherever applicable.

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

19. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return of the Company in form MGT - 9 is annexed herewith as “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 of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this annual report.

21. SECRETARIAL AUDIT

The Board had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2017-18. The Auditor had conducted the audit and their report thereon was placed before the Board. The report of the Secretarial Auditor is annexed herewith as “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 foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is appended as “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 Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for Directors, Employees and Stakeholders to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy. The Company has disclosed the policy at the website at https://www.iifl. com/investor-relations/corporate-governance.

24. PREVENTION OF SEXUAL HARASSMENT

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

Your Directors further state that the during the fiscal year 2017-18, there were no complaints received pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The following is reported pursuant to Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

a) Number of complaints received in the year : Nil

b) Number of complaints disposed off during the year : Nil

c) Number of cases pending more than ninety days: Nil

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

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

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

25. PARTICULARS OF EMPLOYEES

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

Further, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the Rules 5(2) and 5(3) of the aforesaid Rules, forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary, whereupon a copy would be sent.

26. STATUTORY AUDITORS

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

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

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

27. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

28. RBI/FEMA COMPLIANCE

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

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

29. CORPORATE GOVERNANCE

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

30. GENERAL

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

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

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

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

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

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

31. APPRECIATION

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

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

For and on behalf of the Board

Nirmal Jain

Chairman

DIN: 00010535

Place : Mumbai

Date : May 3, 2018

Director’s Report