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The Investment Trust of India Ltd.

BSE: 530023 | NSE: THEINVEST |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE924D01017 | 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 have pleasure in presenting the twenty seventh annual report and audited financial statements of the Company for the year ended 31st March, 2018.

Change in the name of the Company :

The name of the Company has been changed to The Investment Trust of India Limited as per fresh certificate of Incorporation dated 9th June, 2018 issued by the Registrar of Companies, Maharashtra, Mumbai.

Extension for holding of annual general meeting

The Board of Directors have obtained approval from the Registrar of Companies, Maharashtra, Mumbai for extension of holding Annual General Meeting of the members of the Company by three months.

Financial summary and highlights :

(Rs. in lakhs)

2017-2018

2016-2017

2017-2018

2016-2017

Standalone

Consolidated

Income from continuing operations

11,439.71

1,229.19

33,140.85

15,995.25

Other Income

1,297.27

666.69

1,997.15

1,006.11

Total Income

12,736.98

1,895.88

35,138.00

17,001.36

Profit / (Loss) before depreciation, exceptional item and tax

(1,811.62)

(45.33)

5,456.24

4,029.96

Depreciation and amortization

6.71

5.63

853.15

818.61

Profit / (Loss) before exceptional item and tax

(1,818.33)

(50.93)

4,603.09

3,211.35

Exceptional item

---

60.00

---

(0.89)

Add : Share of profit from Associates

---

---

2,050.46

771.28

Profit / (Loss) before tax

(1,818.33)

9.07

6,653.55

3,981.74

Provision for tax

- Current tax

---

77.22

1,758.82

1,252.57

- Deferred tax

6.94

(88.43)

(3,088.43)

(201.00)

- Current tax relating to prior years

(27.74)

0.53

(41.64)

(20.48)

Profit after tax but before minority interest

(1,797.53)

19.75

8,024.81

2,950.64

Add : Other Comprehensive Income

(1.30)

4.31

73.81

(17.78)

Less : Profit attributable to non controlling interest

---

---

308.16

119.53

Total Comprehensive Income for the year

(1,798.83)

24.06

7,790.46

2,813.33

Add: Balance as per last financial statements

2,538.17

2,514.11

4,622.54

1,812.16

Add: Addition on account of merger

42.05

---

11.68

---

Add: Adjustment on account of equity method for associate

---

---

(245.81)

---

Profit available for appropriations

781.39

2,538.17

11,204.68

4,625.49

Less : Appropriations

IND AS Adjustments

---

---

---

(0.51)

Transfers with in other equity (including statutory reserves)

---

---

(974.18)

(2.44)

Net Surplus in Statement of Profit and Loss

781.39

2,538.17

11,204.68

4,622.54

Nominal value per share (in Rs.)

10.00

10.00

10.00

10.00

Basic and diluted earnings per share

- Basic (in Rs.)

(3.52)

0.04

15.09

5.69

- Diluted (in Rs.)

(3.52)

0.04

15.09

5.69

The state of Company’s affairs Standalone

The total income during the year 2017-2018 stood at Rs. 12,736.98 lakhs as against Rs. 1,895.88 lakhs during the previous year, showing an increase of income compared to the previous year. The Company has incurred a loss of before tax Rs. 1818.33 lakhs as compared to a profit of Rs. 9.07 lakhs in the previous year. The loss after tax and Other Comprehensive Income stood at Rs. 1,798.83 lakhs as against the profit of Rs. 24.06 lakhs in the previous year.

Consolidated

The total revenue during the year 2017-2018 stood at Rs. 35,138.00 lakhs as against Rs. 17,001.36 lakhs during the previous year. The Company has earned a profit of before tax Rs. 6,653.55 lakhs as compared to a profit of Rs. 3,981.74 lakhs in the previous year. The profit after tax and Other Comprehensive Income stood at Rs. 8,024.81 lakhs as against the profit of Rs. 2,950.64 lakhs in the previous year.

Consolidated Financial Statements

The Board of Directors of your Company at its meeting held on 26th October, 2018 approved the consolidated financial statements for the financial year 2017 - 2018 in accordance with the Accounting Standard (AS-21) and other applicable Accounting Standards issued by the Institute of Chartered Accountants of India as well as Regulation 34 (2) (c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which includes financial information of all its subsidiaries.

Transfer to General Reserves

The Board of Directors does not propose to transfer any amount to General Reserve for the financial year 2017 - 2018.

Dividend

In view of the losses incurred by the Company, the Board of Directors does not recommend any dividend for the financial year 2017 - 2018. The Company has complied with the dividend distribution policy :

Web link for dividend distribution policy : https://www.itigroup.co.in/investorrelations/compliance Major events occurred during the year

a) State of the Company’s affairs

Segment wise position of business and its operations

The company mainly operates two segments

1. Financial advisory and consultancy

2. Trading activities

Change in status of the Company : During the year under review there has been no change in the status of the Company.

Key business developments :

a) Setting up of Mutual Fund

The Company has received the SEBI Registration Certificate No. MF/073/18/01 dated 14.05.2018 for setting up of Mutual Fund and expected to launch schemes on approval from the SEBI.

The Mutual Fund has been sponsored by the Company and its wholly owned subsidiary viz. Fortune Credit Capital Limited (FCCL).

The Company’s shareholding in ITI Asset Management Limited is 60% and that of FCCL is 40%.

ITI Asset Management Limited (ITIAML) is a subsidiary of FFSIL. The company’s principal activity is to act as an Investment Manager to the proposed “ITI Mutual Fund”. The Investment Management Agreement was executed between ITI Mutual Fund Trustee Private Limited and ITIAML on April 7, 2017. The entire infrastructure of the business including all systems, processes, policies and personnel are in place and the Company is fully geared to enter the markets as soon as the necessary regulatory approvals are received.

ITI Mutual Fund Trustee Private Limited (ITIMFTPL) is subsidiary of FFSIL. The company’s principal activity is to act as Trustee to the proposed “ITI Mutual Fund” The Trust Deed was executed on April 6, 2017 between the Company, Fortune Credit Capital Limited and ITIMFTPL.

b) Alternative Investment Fund

During the year, the Company has received registration certificate from SEBI to act as Alternative Investment Fund in the name of ITI Long Short Equity Fund. Category III.

The Company has also SEBI registration for Alternative Investment Fund i.e. ITI Infrastructure Fund a Category I Infrastructure Fund under Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012. The operations of the fund is yet to be commenced.

The Company through its LLP has made an application to the SEBI for registration as Category III Alternative Investment Fund viz. ITI Growth Opportunities Fund

Change in the financial year : During the year under review there has been no change in the financial year of the Company.

Capital expenditure programs : The Company does not have any material capital expenditure program for the financial year 20182019.

Details and status of acquisitions, merger, expansion, modernization and diversification

a) Demerger of United Petro Finance Limited

In the Board meeting held on 31st March, 2017, the Board has unanimously approved Scheme of Arrangement between United Petro Finance Limited (‘UPFL’ or the ‘Demerged Company’) and Fortune Credit Capital Limited (‘FCCL’ or the ‘Resulting Company’) and Fortune Financial Services (India) Limited (now known as The Investment Trust of India Limited) (‘FFSIL’ or the ‘Holding Company of the Resulting Company’) and their respective shareholders providing for the demerger of Lending Business (‘NBFC Business’) of UPFL to FCCL (Wholly Owned Subsidiary of FFSIL), and issue of equity shares of FFSIL to the shareholders of UPFL. By operation of section 2(19AA) read with 2(41A) of the Income Tax Act, 1961, the consideration for demerger will be discharged by the Company to the shareholders of UPFL. The Company has made applications to the BSE Limited and The National Stock Exchange of India Limited for seeking prior approval. The application for in principle approval has been returned by the exchange for ensuring compliance of the amended provision of the SEBI Circular. The company has provided undertaking to the exchanges for ensuring compliance with applicable provision of the SEBI Circular and the same is being processed by SEBI. The company is awaiting the response from the exchanges.

b) Merger of Fortune Integrated Assets Finance Limited with the Company

In the Board meeting held on 25th April, 2017, the Board has Unanimously approved Scheme of Amalgamation of Fortune Integrated Assets Finance Limited (‘FIAFL’ or the ‘Transferor Company’) with Fortune Financial Services (India) Limited (now known as The Investment Trust of India Limited) (‘FFSIL’ or the ‘Transferee Company’) and their respective shareholders providing for the merger of Fortune Integrated Assets Finance Limited with Fortune Financial Services (India) Limited. The Company has made applications to the BSE Limited and The National Stock Exchange of India Limited for seeking prior approval. The application for in principle approval has been returned by the exchange for ensuring compliance of the amended provision of the SEBI Circular. The company has provided undertaking to the exchanges for ensuring compliance with applicable provision of the SEBI Circular and the same is being processed by SEBI. The company is awaiting the response from the exchanges.

c) Merger of ITI Wealth Management Limited with the Company

The Company has received approvals from High Court Judicature at Bombay and National Company Law Tribunal at Chennai for merger of The Investment Trust of India Limited (the then transferee Company) with the Company. On merger of The Investment Trust of India Limited (earlier known as ITI Wealth Management Limited) with the Company, the Board of Directors in their meeting held on 1st January, 2018 issued 2,25,000 1 % Redeemable Preference shares of Rs. 100 each fully paid aggregating to Rs. 225.00 lakhs as per the approved Scheme to the shareholders of ITI Wealth Management Limited.

Further 22,70,000 equity shares of Rs. 10 each fully paid aggregating to Rs. 227.00 lakhs of The Investment Trust of India Limited held by the Company have been cancelled in the Company’s books on merger of ITI Wealth Management Limited and as per the approved Scheme the Company’s name has been changes to The Investment Trust of India Limited.

Developments, acquisitions and assignments of material intellectual property rights : There are no Developments, acquisitions and assignments of material intellectual property rights.

Any other material event having an impact on the affairs of the Company : There are no material event having an impact on the affairs of the Company.

Change in nature of business : There has been no change in the nature of business during the year under review except for becoming a sponsor of Mutual Fund and Alternative Investment Fund. The Company is yet to commence business in these lines of activities.

Material changes and commitments, affecting financial statements of the Company, having occurred since the end of the year and till the date of the report : There are no material changes and commitments affecting financial statements of the Company.

Details of revision of financial statements or the report :

Financial statements for the year ended 31st March, 2018 have been revised after taking in to consideration the effect of demerger of NBFC business of Napean Finvest Private Limited in to Fortune Credit Capital Limited, a wholly owned subsidiary of the Company. The appointed date as per the scheme of arrangement was 15th February, 2018. The National Company Law Tribunal has passed the order for approving the Scheme on 12th July, 2018.

General Information

Overview of industry and important changes in the industry during the last year :

The Company is in to the financial advisory and consultancy services. No specific comments available for this type of services.

The Company is also in to the trading activities of goods. During the year under review, the company has traded in electrical goods.

External environment and economic outlook :

Induction of strategic and financial partners during the year : During the year under review the Company has not inducted any strategic and financial partners.

Details of listing / delisting :

During the year under review the Company has not delisted any securities on any exchange.

During the year under review, the Company’s equity shares are admitted for trading on The National Stock Exchange of India Limited w e f 2nd August, 2017.

Capital and Debt Structure

During the year under review

a) The authorised capital was increased from Rs. 100.00 crores divided into 10,00,00,000 (Ten Crore) Equity Shares of Rs. 10 (Rupees Ten only) each to Rs. 105.25 crores divided in to 10,30,00,000 (Ten Crore Thirty Lakhs) Equity Shares of Rs. 10 (Rupees Ten only) each aggregating to Rs. 103,00,00,000 (Rupees One Hundred Three Crores) and 2,25,000 1 % Redeemable Preference shares of Rs. 100 each aggregating to Rs. 2,25,00,000 (Rupees Two Crores Twenty Five Lakhs) both aggregating to Rs. 105,25,00,000 (Rupees One Hundred Five Crores Twenty Five Lakhs only) as per Scheme of merger passed by the High Court judicature at Bombay and National /Company law Tribunal, Chennai Bench for merger of The Investment Trust of India Limited with the Company and the said order has been taken on record by the Board of Directors in their meeting held on 151 January, 2018.

b) The authorised capital was increased from Rs. 60 crores divided into 6,00,00,000 (Six Crores) Equity Shares of Rs. 10 (Rupees Ten only) each to Rs. 100 crores divided in to 10,00,00,000 (Ten Crores) Equity Shares of Rs. 10 each was amended vide Special Resolution passed by the members in 26th annual general meeting held on 8th September, 2017.

c) the issued, subscribed and paid up capital of the Company increased from Rs. 5,102.38 lakhs divided in to 5,10,23,767 equity shares of Rs. 10 each fully paid to Rs. 5,327.38 lakhs divided in to 5,10,23,767 equity shares of Rs. 10 each fully paid and 2,25,000 1 % Redeemable Preference shares of Rs. 100 each fully paid.

d) the Company has not reclassified, sub divided the authorized capital of the Company;

e) there has been no reduction of share capital or buy back of shares; or

f) there has been no change in capital structure resulting from restructuring or change in voting rights.

Issue of preference shares

1

Date of issue and allotment

1st January, 2018

2

Details of securities issued

2,25,000 1 % Redeemable Preference shares of Rs. 100 each

3

Method of allotment

Pursuant to the approval of the merger scheme by the High Court judicature at Bombay and National Company law Tribunal, Chennai bench.

4

Issue price

Rs. 100 (Rupees One Hundred only) per preference share

5

Conversion price

Not applicable

6

Number of shares allotted or to be allotted in case the right or option is exercised by all the holders of such securities

Not applicable

7

Number of shares or securities allotted to the promoter group including shares represented by Depository Receipts

Nil

8

Issue of shares for consideration other than cash

Not applicable

Issue of convertible securities

1

Date of issue and allotment

27th March, 2018

2

Details of securities issued

30,000 Optionally Convertible Debentures

3

Method of allotment

Preferential

4

Issue price

Rs. 1,00,000 (Rupees One Lakh only) per debenture.

5

Conversion price

The Debentures allowed to be converted in to preference shares only.

6

Number of shares allotted or to be allotted in case the right or option is exercised by all the holders of such securities

3,00,00,000 preference shares of Rs. 100 each will be issued to the holders of debentures on conversion. The Debentures are optionally convertible in to preference shares.

7

Number of shares or securities allotted to the promoter group including shares represented by Depository Receipts

Nil

8

Issue of debentures for consideration other than cash

Not applicable

During the year the Company has not issued of shares for consideration other than cash, issue of equity shares with differential rights or Issue of Sweat equity shares

Details of Employee Stock Options

Sr. No.

Particulars

Remarks

1

Options granted

3,00,000

2

Options vested

Nil

3

Options exercised

Nil

4

The total number of shares arising as a result of exercise of options

Nil

5

options lapsed;

Nil

6

the exercise price;

Rs. 247.25

7

variation in terms of options;

Not applicable

8

money realised by exercise of options;

Not yet due for exercise

9

total number of options in force;

3,00,000

10

employee wise details of options granted to :

a)

Key Managerial Personnel;

Nil

b)

any other employee who receives a grant of options in any one year of options amounting to five percent or more of total options granted during that year;

Mr. Rajesh Bhatia was granted 3,00,000 options.

c)

identified employees who were granted options, during any one year, equal to or exceeding one percent of the issued capital, excluding outstanding warrants and conversions, of the company at the time of grant.

Not applicable

11

a)

any material change to the scheme and whether such scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014;

No

b)

web-link of disclosures made on the website of the company, as required under SEBI (Share Based Employee Benefits) Regulations, 2014.

https://www.itigroup.co.in/investorrelations

/corporateactions#ESOPScheme

Shares held in trust for the benefit of employees where the voting rights are not exercised directly by the Employees : Not applicable Issue of debentures, bonds or any non-convertible securities

1

Date of issue and allotment of the securities

27th March, 2018

2

Number of securities;

30,000 Unsecured Optionally Convertible Debentures of Rs. 1,00,000/- (Rupees One Lakh) each fully paid at par.

3

Whether the issue of the securities was by way of preferential allotment, private placement or public issue;

Preferential allotment

4

Brief details of the debt restructuring pursuant to which the securities are issued;

Not applicable

5

Issue price

Rs. 1,00,000 per debenture

6

Coupon rate

The debentures carries 0% interest for the time being paid-up thereon.

The Company will pay redemption premium calculated @ 10% per annum cumulative to the debentures on redemption by the Company from the date of receipt of the money and upto the date of redemption of the Debentures.

7

Maturity date

60 months from the date of issue

8

Amount raised

Rs. 300.00 crores

Issue of warrants : During the year the Company has not issued any warrants. Credit rating of securities : Not applicable

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

details of the transfer/s to the IEPF made during the year :

1

amount of unclaimed/unpaid dividend and the corresponding shares

Rs. 6,03,188

Unclaimed dividend for the financial year 2009-2010

Number of shares pertaining to the unclaimed dividend amount : 2,41,275

2

redemption amount of preference shares

Nil

3

amount of matured deposits, for companies other than banking companies, along with interest accrued thereon

Nil

4

amount of matured debentures along with interest accrued thereon;

Nil

5

application money received for allotment of any securities and due for refund along with interest accrued

Nil

6

sale proceeds of fractional shares arising out of issuance of bonus shares, merger and amalgamation

Nil

7

details of the resultant benefits arising out of shares already transferred to the IEPF

8

year wise amount of unpaid/unclaimed dividend lying in the unpaid account up to the year and the corresponding shares, which are liable to be transferred to the IEPF, and the due dates for such transfer; as on 31st March, 2018

Year

Amount (Rupees)

No. of shares

Due Date

2010-2011

4,95,288

2,47,644

02/10/2018

2011-2012

1,12,794

2,25,588

30/09/2019

9

the amount of donation, if any, given by the company to the IEPF

Nil

10

such other amounts transferred to the IEPF, if any, during the year.

Nil

Management

Directors and Key Managerial Personnel

names of the persons who have been appointed / ceased to be Directors and/or Key Managerial Personnel of the company:

1

During the year

Ms. Shaily Maheshwari was been appointed as an additional non executive Director liable to retire by rotation w. e. f. 8th September, 2017

2

After the end of the year and up to the date of the Report

Mr. Suryakant B. Mainak has been appointed as an Additional Independent Director of the Company not liable to retire by rotation w e f 11th October, 2018

3

Mode of such appointments;

Appointed by Board of Directors in their meeting held on 8th September, 2017 and by Circular resolution passed on 11th October, 2018 respectively.

4

Names of the Director retiring by rotation at the ensuing annual general meeting and whether they offer themselves for re-appointment.

Mr. Chintan Valia

- being eligible offered himself for re-appointment

5

Specific sector where approval of any regulatory authority is required before the appointment of a Director/ Key Managerial Personnel

Not applicable

6

Independent Directors

7

Appointment of Independent Directors, the justification for choosing the proposed appointees for appointment as Independent Directors; and

No Independent Director has been appointed during the year under review

8

Re-appointment after completion of the first term, the rationale for such re-appointment

The Board has re-appointed Mr. Pankaj Bhuta as an Independent Director for a second term subject to approval from the members. His first term expired on 30th July, 2018. Being experienced and specialized in fields of Accounts, Finance and taxation, the Board has re-appointed him as an Independent Director for the second term.

9

Declaration by Independent Directors and statement on compliance of code of conduct

a)

that necessary declaration with respect to independence has been received from all the Independent Directors of the company;

b)

that the Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

c)

The company has formulated a Code of Conduct for Directors and senior management personnel.

10

Board Meetings :

The number and dates of meetings of the Board held during the year

During the year under review ten meetings of the Board of Directors of the Company were held on 25th April, 2017, 17th May, 2017, 25th May, 2017, 8th September, 2017, 25th November, 2017, 7th December, 2017, 1st January, 2018, 5th February, 2018, 1st March, 2018 and 27th March, 2018.

11

Committees :

as on 26th October, 2018

Composition of Committees constituted by the Board

under the Act and the Listing Regulations

Audit Committee :

Constitution

Mr. Pankaj Bhuta

Chairman

Mr. Alok Kumar Misra

Member

Mr. Chintan Valia

Member

Mr. Suryakant B. Mainak

Member

Stakeholder Relationship Committee

Constitution

Mr. Chintan Valia

Chairman

Mr. Pankaj Bhuta

Member

Mr. Alok Kumar Misra

Member

Mr. Suryakant B. Mainak

Member

Nomination & Remuneration Committee

Constitution

Mr. Alok Kumar Misra

Chairman

Mr. Chintan Valia

Member

Mr. Pankaj Bhuta

Member

Mr. Suryakant B. Mainak

Member

Internal Finance Committee

Constitution

Mr. Chintan Valia

Chairman

Mr. Pankaj Bhuta

Member

Mr. Alok Kumar Misra

Member

Mr. Suryakant B. Mainak

Member

The number and dates of meetings of such committees held during the year.

Audit Committee : Six meetings were held during the financial year on 25th April, 2017, 17th May, 2017, 8th September, 2017, 7th December, 2017, 5th February, 2018 and 27th March, 2018

Stakeholder Relationship Committee : Four meetings were held during the financial year on 17th May, 2017, 8th September, 2017, 7th December, 2017 and 5th February, 2018

Nomination & Remuneration Committee review, no meeting was held.

: During the year under

Internal Finance Committee : During the year under review, no meeting was held.

12

Recommendations of Audit Committee

All the recommendations given by the Audit committed were accepted by the board.

reasons for such non-acceptance of any such recommendations

Not applicable

13

Company’s Policy on Directors’ appointment and remuneration

Annexure “ I “

Web link of policy.

https://www.itigroup.co.in/investorrelations/compliance

14

Board Evaluation

A statement indicating the manner in which formal annual evaluation of the performance of the Board, its Committees and of individual Directors has been made.

The company has a system in place for formal annual evaluation of the performance of the Board, its Committees and of individual Directors. The same has been implemented.

15

Remuneration of Directors and Employees

the number of permanent employees on the rolls of the company;

24

the ratio of remuneration of each Director to the median remuneration of the employees of the company for the year

The Company has not paid any remuneration to Directors except for the meeting fees

the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the year

Average increase in remuneration of Manager : 10%

Company Secretary : 10%

Directors : Not applicable Chief Executive Officer : Not applicable

the percentage increase in the median remuneration of employees in the year;

10%

average percentile increase already made in the salaries of employees other than managerial personnel in the last year and its comparison with the percentile increase in the managerial remuneration and justification thereof and whether there are any exceptional circumstances for increase in the managerial remuneration

10%

affirmation that the remuneration is as per the remuneration policy of the company

Remuneration paid to the Company Secretary is as per the remuneration policy of the company

names of top ten employees of the company in terms of remuneration drawn.

Name

Remuneration (Rupees)

Rajesh Bhatia *

1,46,11,382

Prateek Tayal

34,53,832

Rajesh Kumar Acha

29,60,956

Hersh Sanjiv Shah

25,00,633

Rajesh G Aynor *

15,01,484

Subbiah Manickam

13,05,884

Haroon Mansuri

11,83,406

Siddhartha Bhotika *

9,43,526

Bhaurao S Desai

7,29,850

Akash Jhaveri *

5,04,160

( * ) employed for part of the year

name of every employees who

if employed throughout the year, was in receipt of remuneration not less than one crore and two lakh rupees in the aggregate;

Not applicable

if employed for a part of the year, was in receipt of remuneration not less than eight lakh and fifty

NAME

Remuneration (Rupees)

thousand rupees per month in the aggregate

Rajesh Bhatia *

1,46,11,382

if employed throughout the year or part thereof, was in receipt of remuneration which is in excess of that drawn by the Managing Director or Wholetime Director or Manager and who holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company.

Name of employee

Rajesh Bhatia

designation of the employee

President & CIO AIF III

remuneration received

Rs. 1,46,11,382

nature of employment, whether contractual or otherwise

Contractual

qualifications and experience of he employee

B. Com., CFA and ACWA

date of commencement of employment

10/07/2017

the age of such employee

49 years

the last employment held by such employee before joining the company;

Simto Investments (Tata Group)

the percentage of equity shares held by the employee along with his spouse and dependent children, if such shareholding is not less than two percent of the total equity shares

Nil

whether any such employee is a relative of any Director or Manager of the company and if so, the name of such Director or Manager.

No

Remuneration received by Managing/Whole time Director from holding or subsidiary company

Nil

Internal Financial Controls

The Company has in place adequate systems of internal control that are commensurate with its size and nature of the business and documented procedures covering all financial and operating functions. The Company being in service industry, it has in place clear processes and well-defined roles and responsibilities for its staff at various levels. The Management has a defined reporting system, which facilitates monitoring and adherence to the process and systems in place.

Frauds reported by the Auditor : During the year under review, no fraud occurred and reported by the Auditors.

Disclosures relating to Subsidiaries, Associates and Joint Ventures

Report on performance and financial position of the subsidiaries, associates and joint ventures :

In terms of section 129 (3) of the Companies Act, 2013 the Company has prepared consolidated financial statements and a statement of salient features of the subsidiaries in form AOC 1 which is attached to notes forming part of financial statements.

Companies which have become or ceased to be subsidiaries, associates and joint ventures During the year or at any time after the closure of the year and till the date of the Report.

During the year under review a new subsidiary in the name of ITI Nirman Limited has been incorporated as per certificate of incorporation dated 30th August, 2017 issued by the Registrar of Companies, Maharashtra, Mumbai. The object of the new company is to undertake and carry on the business of real estate developers and related activities.

A new subsidiary in the name of ITI Alternate Funds Management Limited has been incorporated as per certificate of incorporation dated 28th June, 2018 issued by the Registrar of Companies, Maharashtra, Mumbai. The object of the new company is to undertake and carry on the business of Portfolio Management Services, Alternative Investment Find and other financial advisory activities.

During the year under review, ITI Wealth Management Limited ceased to be a subsidiary of the Company due to approval of the merger scheme by the High Court judicature at Bombay and National Company law Tribunal, Chennai bench.

1

Listing of Specified Securities

Not applicable

2

the name of material subsidiary as per the Listing Regulations

1 Fortune Credit Capital Limited

2 Antique Stock Broking Limited

3 ITI Reinsurance Limited

3

Sale and disposal and leased assets of more than twenty percent of the assets of the material subsidiary on an aggregate basis during a year

The Company together with its subsidiary has entered in to a Share Purchase Agreement (SPA) with the proposed buyer for selling the equity shares of ITI Reinsurance Limited held by the Company. The Company holds 80% of the total issued capital of ITI Reinsurance Limited. The SPA is subject to approval by the IRDA.

Details of Deposits

The Company does not hold and has not accepted any deposits from the public during the year under review, within the meaning of Section 73 of the Companies Act, 2013 and the rules made there under.

Particulars of loans, guarantees and investments

The details of Loans made, Investments and Guarantees given are provided in the notes forming part of the financial statements for the year ended 31st March, 2018

Particulars of contracts or arrangements with related parties

The Company has entered in to transactions with related parties during the financial year 2017 - 2018. All such transactions are on arm’s length basis and in the ordinary course of business except for investments and/or disinvestments made by the Company which are not in ordinary course of business and such transactions are with the wholly owned subsidiary companies that the provisions of section 188 of the Companies Act, 2013 relating to the approval are not attracted. Related Party Transactions with the Directors and Key Managerial Personnel have been entered in the normal course of business and that also to the extent of payment of remuneration to the executive directors and KMPs. The disclosure in Form AOC - 2 forms part of the annual report and marked as Annexure “ II “ . All related party transactions are placed before the Audit Committee and Board meetings on quarterly basis for review and approval

Corporate Social Responsibility (CSR) : The provisions relating to the Corporate Social Responsibility are not applicable to the Company.

Conservation of Energy, Technology Absorption : The Company being in service sector, provisions relating to Conservation of energy and Technology absorption are not applicable. The information required under section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Disclosures of Particulars in the Report of the Board of Directors) Rules, 2014 with respect to the matters specified therein are not applicable to your company.

Foreign exchange earnings and Outgo :

Foreign exchange earnings : Nil

Foreign exchange outgo : Business Promotion expenses : Rs. 8.38 lakhs

Travelling & Conveyance expenses : Rs. 8.40 lakhs Risk Management : The provisions relating to the risk management are not applicable to the Company.

Details of Establishment of Vigil Mechanism

a) the Directors and employees to report their genuine concerns about unethical behaviour, actual or suspected fraud or violation of the company’s code of conduct;

b) providing adequate safeguards against victimisation;

c) providing direct access to the higher levels of supervisors and/or to the Chairman of the Audit Committee, in appropriate or exceptional cases.

Web-link of the aforesaid mechanism : https://www.itigroup.co.in/investorrelations/compliance

Material Orders of Judicial Bodies / Regulators : No material Orders have been passed by the Judicial bodies and/or regulators for or against the Company during the year under review.

Auditors

Names of the Statutory Auditor : Bathiya & Associates, LLP Secretarial Auditor : Dinesh Kumar Deora Cost Auditor : Not applicable

During the year under review and up to the date of the Report there has been no change in such Auditors due to resignation / casual vacancy / removal / completion of term.

Explanations in response to Auditors’ qualifications : There are no qualifications in the auditors report for the year ended 31st March, 2018.

Compliance with Secretarial Standards : The Company has complied with all the applicable Secretarial Standards during the year ended 31st March, 2018.

Corporate Insolvency Resolution process initiated under The Insolvency and Bankruptcy Code, 2016 (IBC) : Not applicable

Failure to implement any Corporate Action : Not applicable

Annual Return : Web Link : https://www.itigroup.co.in/investorrelations/compliance

Other Disclosures :

(a) the consolidated financial statement is also being presented in addition to the standalone financial statement of the company.

(b) the Company has taken initiatives with respect to Stakeholder relationship, Customer relationship, Environment, Sustainability, Health and Safety.

(c) reasons for delay in holding the annual general meeting; the Company has obtained approval from the Registrar of Companies, Maharashtra, Mumbai for extension for holding annual general meeting for the year 2018 by three months.

(d) cost records are not required to be maintained by the company.

24. Additional disclosures under listing regulations 24.1 Statement of deviation or variation

(a) use of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable; Not Applicable

(b) category wise variation (capital expenditure, sales and marketing, working capital etc.) between the projected utilisation of funds made by the company in its offer document or explanatory statement to the notice for the general meeting, as applicable, and the actual utilisation of funds. Not Applicable

Management Discussion and Analysis Report (MDAR) : Annexure “ III “

Certificate on Compliance of conditions of Corporate Governance : Annexure “ IV “

Suspension of Trading : During the year under review, there had been no suspension of trading by any of the exchanges on which the Company’s equity shares are listed.

Disclosures pertaining to the Sexual Harassment of women at the workplace (Prevention, Prohibition and Redressal) Act, 2013

The company has complied with the provision relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The details of number of cases filed and disposed as required under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Not Applicable

Subsidiaries, Associates and Step down Subsidiaries :

As on 31st March, 2018 the Company had eleven wholly owned subsidiaries, two subsidiaries, two step down subsidiaries and two associates. The Board of Directors reviews the performance of these companies on quarterly basis.

Financial statements of subsidiary companies

In terms of proviso to section 136 of the Companies Act, 2013 the Company has not attached the financial statements of its subsidiaries with the accounts of the Company. However, the audited annual financial statements of the subsidiary companies will be made available for inspection by the members of the holding and subsidiary companies at the registered office of the Company and will also be uploaded on the website of the Company. The audited annual financial statements of the subsidiary companies will be made available on request to members of the company and its subsidiaries, seeking such information at any point of time.

ESOP

The Company has formulated an Employee Stock Option Scheme known as FFSIL Employees Stock Option Plan 2017 ( “ESOP - 2017” ) in accordance with the provisions of Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014

Subject to the members approval board of Directors in its meeting held on 25th May, 2017 approved the Scheme ESOP-2017 and the shareholders approval was obtained in 26th Annual General Meeting held on 8th September, 2017. Nomination and Remuneration Committee (“Committee”) was authorised to formulate, administer and implement the detailed and conditions of the Scheme.

The Company has received a certificate dated 24th October, 2017 from Bathiya & Associates LLP, Chartered Accountants, Statutory Auditors of the Company confirming that the FFSIL Employees Stock Option Plan 2017 has been implemented in accordance with Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

The Certificate would be placed at the Annual General Meeting for inspection by Members.

The Company has received in principle approvals from BSE Limited and The National Stock Exchange of India Limited.

On 19th April, 2018 the Nomination and Remuneration Committee has granted (Grant I) 3,00,000 options. Each option when exercised will be converted in to one equity share of Rs. 10 each fully paid.

Summary of Employee Stock Option Schemes (‘ESOS’)

For the Period from 01/04/2017 to till 26th October, 2018

Sr. No.

Particulars of Options / Scheme

ESOP 2017

1

Outstanding as at beginning of the Period

---

2

Granted during the Period

3,00,000

3

Date of Grant

19/04/2018

4

Forfeited during the Period

---

5

Cancelled during the Period

---

6

Lapsed during the Period

---

7

Exercised during the Period

---

8

Allotted during the Period

---

9

Number of shares arising as a result of exercise of options

---

10

Money realized by exercise of options (INR), if scheme is implemented directly by the company

---

11

Number of options vested during the Period

---

12

Outstanding as at the end of the Period

3,00,000

13

Exercisable at the end of the Period

---

14

Weighted average remaining contractual life (in years)

3.5 years

15

Weighted average fair value of options granted

62.27

Postal Ballot

During the year under review, the Company had issued Postal Ballot Notice dated 8th September, 2017 to the members of the Company seeking approvals alteration of Object Clause of the Memorandum of Association of the Company.

The Scrutinizer appointed by the Board of Directors has submitted his report on the Postal Ballot on 18th October, 2017 and the following result was announced by Director of the Company on 18th October, 2017 at the registered Office of the company situated at Naman Midtown, “A” Wing, 2151 Floor, Unit No. 2103, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400 013.

Resolutions

Particulars

No. of valid votes polled

Votes casted in favour of the Resolution

Votes casted against the Resolution

Item No. 1 (Special Resolution ) Alteration of Object Clause of the Memorandum of Association of the Company

3,87,82,618

3,87,82,613

5

Material changes and commitments affecting financial statements between financial year end : There has been no material changes and commitments affecting financial statements between financial year end.

Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future : Not applicable

Adequacy of internal financial controls with reference to the Financial Statements : The Company has adequate internal financial control in its place.

Directors

Mr. Chintan Valia, Director of the Company retires by rotation and being eligible offers himself for re-appointment.

Ms. Shaily Maheshwari had been appointed as an Additional Director of the Company effective from 8th September, 2017. Ms. Shaily Maheshwari holds office up to the date of this Annual General Meeting.

Mr. Suryakant B. Mainak had been appointed as an Additional Independent Director of the Company effective from 11th October, 2018. Mr. Suryakant B. Mainak holds office up to the date of this Annual General Meeting.

The Board proposes to appoint Ms. Shaily Maheshwari as Non Executive Director of the Company liable to retire by rotation and Mr. Suryakant B. Mainak as an Independent Director of the Company not liable to retire by rotation and seeks members approval for the same.

The Company has received a letter from a member of the Company proposing the candidature of Ms. Shaily Maheshwari and Mr. Suryakant B. Mainak as Non Executive Director and Independent Director of the Company respectively.

Re-appointment of Mr. Pankaj Bhuta as an Independent Director

Mr. Pankaj Bhuta who had been appointed as an Independent Director of the Company w e f 31st July, 2013 for a period of five years from the date of appointment. His term expired on 30th July, 2018 and the Board of Directors have subject to the members approval re-appointed Mr. Pankaj Bhuta as an Independent Director of the Company for a second term of five years.

Brief profiles of the Directors to be appointed/re-appointed in the ensuing Annual General Meeting of the members of the Company have been provided as an annexure to the notice.

Statement of particulars of appointment and remuneration of managerial personnel

[Pursuant to section 134 (3) (q) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

1

Name

Mr. Prateek Tayal

2

Designation

Manager under the Companies Act

3

Remuneration paid for the year 2017-2018

Rs. 34,53,832/-

4

Nature of employment, whether contractual or otherwise

Contractual

5

Qualifications and experience of the employee

M.B.A. from S P Jain Institute of Management and BBA

6

Date of commencement of employment

6th October, 2016

7

The age of employee

29 years

8

Last employment held by such employee before joining the Company

Sunmarg Securities Private Limited

9

The percentage of equity shares held by the employee in the Company within meaning clause (iii) of sub rule 2 above as on 31st March, 2017

Nil

10

Whether any such employee is a relative of any director or manager of the Company and if so, name of such director or manager

No

Key Managerial Personnel (KMP)

The followings have been designated as Key Managerial Personnel of the Company pursuant to section 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

1. Mr. Prateek Tayal - Manager under the Companies Act

2. Mr. S. G. Muthu Kumar - Chief Financial Officer

3. Mr. Haroon Mansuri - Company Secretary

Particulars of employees :

Information pursuant to Rule 5 (2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

Details of the employee(s) who were employed for part of the year and were in receipt of remuneration for any part of the year, at a rate which, was not less than Rs. 8,50,000 per month.

1

Name of the Employee

Mr. Rajesh Bhatia

2

Designation

President & CIO AIF III

3

Remuneration

Rs. 1,46,11,382

4

Nature of employment

Contractual

5

Qualification

B. Com., CFA and ACWA

6

Experience with the company

Six months

7

Date of joining

10/07/2017

8

Age

49 years

9

Last employment

Simto Investments (Tata Group)

10

No. of shares held as on 31st March, 2018

Nil

11

Relation to Board of Directors

Not applicable

Statement on declaration given by independent directors

The Independent Director of the Company have submitted the declarations of independence, as required under section 149 (7) of the Companies Act, 2013 confirming that they all meet the criteria of independence as required in sub section 6 of section 149 of the Companies Act, 2013.

Committees

The Company has four committees of the Board of Directors. These committees are - Audit Committee, Nomination & Remuneration Committee, Stakeholder Relationship Committee and Internal Finance Committee.

The terms of reference, composition and the details of the meetings of the committees held during the year under review are provided in corporate governance report.

Corporate Governance

A report on the corporate governance along with a certificate from the auditors of the Company regarding the compliance of conditions of the corporate governance as stipulated under Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included and forms part of this annual report.

All Board members and senior management personnel of the Company have affirmed compliance with code of conduct for the year 20172018. A declaration to this effect certified by the Director of the Company is also attached in the annual report.

The Director and the Chief Financial Officer (CFO) of the Company have certified to the Board with regard to the financial statements and other matters as required under Regulation 17 (8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the said certificate is attached in the annual report.

Management Discussion and Analysis

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this annual report.

Performance evaluation of Directors

In terms of applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has carried out an annual evaluation of its own performance, its committees and individual Directors.

Further there had been an exclusive meeting of the Independent Directors of the Company without presence of the non independent Directors, discussed the performance evaluation of the Board members.

Prevention of insider trading

The Company has in its place the policy for prevention of insider trading.

Policies :

The Company has in place the following policies which have been approved by the Board of Director of the Company.

1. Criteria for payment to non executive Directors

2. Directors familiarization program

3. Policy for dealing with related parties

4. Policy on group entities

5. Policy on materiality

6. Terms and conditions of appointment of Independent Directors

7. Whistle blower policy

8. Code of Conduct for Directors and Senior Management

9. Archival Policy

10. Remuneration Policy

11. Policy for prevention of Insider Trading

12. Dividend Distribution Policy

The above are posted on the website of the Company - www.itigroup.co.in Extract of the Annual Return

Extract of the Annual Return as required under section 92 (3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in the prescribed Form MGT 9 is annexed and marked as Annexure “ V “ and forms part of the annual report.

Statutory Auditors

At the 23rd Annual General Meeting held on 22nd September, 2014, M/s Bathiya & Associates LLP, (earlier known as M/s S H Bathiya & Associates) Chartered Accountants, were appointed as statutory auditors of the Company for the term of five years to hold the office up to the conclusion of 28th Annual General Meeting to be held in the calendar year 2019. As required under first proviso of section 139 of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every Annual General Meeting of the members of the Company.

Auditors’ Report

Your Directors refer to the observations made by the Auditors in their report and wish to state that the notes forming part of accounts are self explanatory and hence do not require any further comments.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Dinesh Kumar Deora, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2018.

Secretarial Audit Report

As required under section 204 of the Companies Act, 2013, a Secretarial Audit Report dated 5th May, 2018 issued by Dinesh Kumar Deora, a Practicing Company Secretary is attached herewith and marked as Annexure “ VI “.

Explanation on observations by Secretarial Auditors in Secretarial Audit Report

1. The Board of Directors of the Company is not duly constituted with proper balance of Non Executive Directors and Independent Directors

2. Appointment of Independent Director in its material subsidiary company viz. Antique Stock Broking Limited

The Company has appointed Mr. Suryakant B. Mainak as an Independent Director of the company and is in process for identifying the suitable person to be appointed as an Independent Director in the subsidiary company.

Transfer of unclaimed dividend to the Investor Education and Protection Fund (IEPF)

As required under section 124 (5) of the Companies Act, 2013 the Company has transferred Rs. 6,03,187/- to the Investor Education and Protection Fund (IEPF) during the year under review towards unclaimed dividend for the financial year 2009 - 2010 declared on 28th August, 2010.

Transfer of shares to the Fund

During the year under review, the Company has in terms of notification dated 13th October, 2017 transferred 36,693 equity shares of Rs. 10 each fully paid to the credit of Investor Education and Protection Fund (IEPF)

Directors’ Responsibility Statement

Pursuant to Section 134 (5) of the Companies Act, 2013 read with rule 8 of the Companies (Accounts) Rules, 2014 to the best of their knowledge and belief confirm that:

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

- 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 year and of the profit and loss of the company for that period;

- the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities

- the Directors had prepared the annual accounts on a going concern basis

- 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;

- the Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and operating effectively

Acknowledgement

Your Directors are pleased to place on record their deep appreciation towards the sincere services and co-operation extended by employees of the organization at all levels. They also wish to place on record their gratitude for the confidence placed in by the shareholders of the Company, banks, financial institutions and intermediaries they are associated with. Further, your Directors wish to thank the various regulatory authorities, business associates and clients for their valued co-operation.

On behalf of the Board

Chintan V. Valia Khyati Valia

Non Executive Chairman Non Executive Director

(DIN : 05333936) (DIN: 03445571)

Mumbai, 26th October, 2018

Director’s Report