The Board of Directors (the "Board") is pleased to present the Thirtieth Annual Report of IIFL Finance Limited (the "Company") on the business and operations of the Company, together with the Audited Financial Statements of the Company for the Financial Year ended March 31,2025. The Company is registered with the Reserve Bank of India ("RBI") as a Middle Layer ("NBFC-ML") entity under Master Direction - Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023 ("RBI SBR Direction").

1. FINANCIAL HIGHLIGHTS
A summary of the financial performance of the Company and its subsidiaries, for the Financial Year ended March 31,2025, is as under:

(' in Crore)

Name of the Company

Revenue

Profit/(Loss) After Tax

IIFL Finance Limited

4,066.17

(409.57)

IIFL Home Finance Limited ("HFC")*

3,706.78

976.50

IIFL Samasta Finance Limited ("Samasta")

2,499.48

20.40

IIFL Open Fintech Private Limited ("IIFL Open")

0.22

(9.18)

* includes IIHFL Sales Limited, wholly-owned subsidiary of HFC.

The consolidated and standalone financial statements of the Company for the financial year ended March 31, 2025, prepared as per Indian Accounting Standards ("Ind AS") and in accordance with the provisions of the Companies Act, 2013 ("the Act") forms part of this Annual Report. The financial performance during the financial year 2024-25 compared with the previous financial year 2023-24, is summarized below:

(' in Crore)

Particulars

Consolidated

Standalone

FY2024-25

FY2023-24

FY2024-25

FY2023-24

Total income

10,237.07

10,490.47

4,080.16

4,649.43

Profit before Finance Cost, Depreciation Amortization Expenses and Tax Expenses and Exceptional Items

5,651.60

6,620.51

2,021.43

2,566.96

Less: Finance Cost

4,169.52

3,867.78

1,848.72

1,702.08

Depreciation

188.57

180.82

136.98

134.90

Exceptional items

586.50

-

586.50

-

Profit/(Loss) before tax

707.01

2,571.91

(550.77)

729.98

Less: Current tax

365.76

610.57

77.39

188.91

Deferred tax

(230.36)

(10.48)

(218.59)

(41.45)

Short/(Excess) provision relating to previous year

(6.55)

(2.40)

-

(2.26)

Profit/(Loss) for the year

578.16

1,974.22

(409.57)

584.78

Other Comprehensive Income /(Loss) net of tax

(13.27)

(17.30)

(3.06)

(7.94)

Total Comprehensive Income/(Loss) net of tax

564.89

1,956.92

(412.63)

576.84

Attributable to:

Owners of the Company

367.54

1,747.77

(412.63)

576.84

Non-controlling interests

197.35

209.15

N.A.

N.A.

Less: Appropriations

Dividend

-

182.24

-

152.59

Transfer to/ from Other Reserves

204.04

422.59

-

116.96

Change in Minority

2.69

0.22

-

-

Add: Balance brought forward from the previous year

4,167.58

3,024.86

1,686.60

1,379.31

Balance to be carried forward

4,328.39

4,167.58

1,273.97

1,686.60

Note: Previous period’s figures have been regrouped/rearranged wherever necessary.

Transfer to Reserve
Under Section 45-IC (1) of RBI Act, 1934, Non-Banking Financial Companies ("NBFCs") are required to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any dividend. Accordingly, during the year under review, your Company transferred the below mentioned amount to Special Reserves and to the General Reserve out of the Retained Earnings, as mentioned below:

(' in Crore)

Particulars

Standalone

Consolidated

FY 2024-25

FY 2024-25

Special Reserve during the year (Pursuant to Section 45-IC (1) of the Reserve Bank of India Act, 1934)

-

4.04

Special Reserve during the year (Pursuant to Section 29C (1) of National Housing Bank Act, 1987)

Not Applicable

200.00

General Reserve during the year

4.72

4.91

2. REVIEW OF BUSINESS, OPERATIONS AND STATE OF AFFAIRS OF YOUR COMPANY AND OUTLOOK
Details of business, operations and state of affairs of your Company is provided in the Management Discussion and Analysis Report. Refer page 204 of the Report.

3. MACROECONOMIC OVERVIEW
Details on macroeconomic overview of your Company is provided in the Management Discussion and Analysis Report. Refer page 204 of the Report.

4. DIVIDEND DISTRIBUTION POLICY AND DIVIDEND
As stipulated in Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Board has adopted a Dividend Distribution Policy which is annexed as "Annexure I" to this Report and is available on the website of the Company at https://storage.googleapis. com/iifl-finance-storage/files/2025-03/Dividend_ Distribution_Policy_04032025.pdf.

In line with the principles of financial prudence and capital conservation, the Board has decided not to recommend any dividend for the financial year 202425. The Company remains focused on strengthening its operational and financial position in the forthcoming period.

5. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")
In accordance with the applicable provisions of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the Company is required to transfer all unclaimed or unpaid dividends, along with the corresponding shares

in respect of which dividends have remained unclaimed for seven (7) consecutive years, to the Investor Education and Protection Fund (IEPF).

Similarly, in the case of Non-Convertible Debentures ("NCDs"), the unclaimed interest and principal amounts are also required to be transferred to the IEPF Authority within thirty (30) days from the expiry of seven (7) years from the respective due dates of payment, as per the provisions of the IEPF Rules.

During the year under review, the Company transferred '10,73,225 on April 4, 2025 being the unclaimed dividend amount, pertaining to the FY 2017-18 and has also transferred unclaimed interest and principal amount on NCDs of ' 13,90,821.68 to the IEPF.

The shares on which dividend has not been claimed by the Members for seven (7) consecutive years shall be transferred to demat account of the IEPF Authority within thirty (30) days of expiry of the said period. Accordingly, various steps are being taken on an ongoing basis to reach out to the Shareholders, through email and other means, whose shares are due to be transferred to the IEPF, in order to create awareness and provide them an opportunity to claim their unclaimed dividends. In view of the aforesaid, the Company had also published the notice in the leading newspapers in English and Regional Language having wide circulation to inform them about the said transfer to IEPF. Post closure of the financial year, the Company, in accordance with the above provisions, transferred 8,652 equity shares to the IEPF

In compliance with Securities and Exchange Board of India ("SEBr) Circular No. SEBI/HO/DDHS/DDHS-RAC-l/P/CIR/2023/176 dated November 8, 2023, relating to unclaimed amounts in respect of listed NonConvertible Securities, the Company has put in place a procedural framework for handling unclaimed interest

and redemption amounts lying with it. The Company has also adopted the "Policy on transfer of Unclaimed Amounts to Escrow Accounts and claim thereof by Investors", which outlines the process for investors to claim such amounts. The policy is available on the Company’s website at https://storage.googleapis. com/iifl-finance-storage/files/2024-03/IEPF_Policy. pdf.

6. KEY INITIATIVES/DEVELOPMENTSa. Public Issue of Non-Convertible Debentures
During the year under review, your Company has filed a Shelf Prospectus on March 29, 2025, with the Registrar of Companies and SEBI, to raise through Public Issue of Secured, Rated, Listed, Redeemable NCDs an amount aggregating up to ' 2,500 Crore. The Company also filed a Tranche I Prospectus on March 29, 2025 read with the corrigendum to the Tranche I prospectus dated April 2, 2025 with the Registrar of Companies to raise through Public Issue of Secured, Rated, Listed, Redeemable NCDs an amount aggregating up to ' 100 Crore with an option to retain oversubscription of ' 400 Crore. These NCDs were alloted on April 21,2025, and are listed and traded on the National Stock Exchange of India Limited ("NSE") and BSE Limited ("BSE").

Additionally, during the year under review, IIFL Home Finance Limited ("HFC") raised through Public Issue of Secured, Redeemable NCDs an amount of ' 380 Crore. These NCDs are listed and traded on NSE and BSE. IIFL Samasta Finance Limited ("Samasta") raised through Public Issue of Secured, Redeemable NCDs an amount of ' 181 Crore. These NCDs are listed and traded on BSE.

b. Issuance of Non-Convertible Debentures on a Private Placement basis
During the year under review, your Company raised through Private Placement of NCDs an amount aggregating to ' 2,450 Crore. These NCDs are listed and traded on NSE and/or BSE.

Additionally, during the year under review, HFC raised ' 550 Crore through Private Placement of Redeemable NCDs, and Samasta raised ' 367 Crore through Private Placement of Redeemable NCDs. The said Privately Placed NCDs issued by HFC are listed and traded on NSE, while NCDs issued by Samasta are listed and traded on BSE.

c. Bank Refinance
During the year under review, HFC had availed

'1,700 Crore of refinance facility from National Housing Bank ("NHB") under various refinance schemes.

d. Funds raised by way of other Borrowings
During the year under review, your Company raised ' 1,950 Crore through term loans from various banks. Additionally, HFC and Samasta raised ' 2,086 Crore and ' 2,288 Crore, respectively, through term loans from various banks and financial institutions.

e. International credit rating from S&P Global Ratings
During the year under review, your Company has secured long term issuer rating of B /Stable and short term issuer rating of B from S&P Global Ratings.

f. Issuance of Global Medium Term Note Programme
During the year under review, your Company has raised an amount aggregating to USD 425 Million, in multiple tranches, through issue of Senior, Secured, Fixed Rate Notes due 2028 ("Notes") as part of the USD 1 billion Global Medium Term Note Programme updated by the Company by way of offering circular dated December 31, 2024. These Notes are listed and traded on India International Exchange (IFSC) Limited.

g. Acquisition of shares of IIFL Open Fintech Private Limited (Subsidiary Company)

During the year under review, in a significant strategic move, your Company acquired the remaining 82,47,312 equity shares of IIFL Open Fintech Private Limited, thereby making it a wholly-owned subsidiary. This acquisition reflects the Company’s commitment to enhancing its digital capabilities, expanding its fintech offerings, and reinforcing its position in the evolving financial services landscape. By bringing IIFL Open Fintech Private Limited under full ownership, the Company aims to leverage its innovative technology platforms to deliver integrated financial solutions, deepen customer engagement, improve operational efficiency, and create synergies across business segments, in line with its long-term value creation strategy.

h. Fund raising by way of Rights Issue:
During the year under review, your Company raised funds by way of issuance of Equity Shares

on a Rights basis ("Rights Issue") from its existing eligible shareholders of the Company, in accordance with applicable provisions of the Act, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended from time to time and other applicable laws. Accordingly, the Company made an allotment of 4,23,94,270 fully paid-up equity shares of face value of '2 each of the Company on May 17, 2024, for cash at a price of '300 per equity share (including a premium of '298 per equity share) for an amount aggregating to '1,271.83 Crore, on a rights basis to the eligible equity shareholders of the Company.

7. UTILIZATION OF FUNDS
During the year under review, your Company successfully raised additional capital through rights issue of equity shares to its existing shareholders and the issuance of Non-Convertible Debentures (NCDs) on a private placement basis. These funds were raised to support the Company’s growth plans, strengthen its balance sheet, and ensure adequate liquidity to meet operational and regulatory requirements.

The proceeds from the rights issue were primarily utilized to augment the capital base, repay certain high-cost borrowings, and meet general corporate purposes, including investments in technology, digital infrastructure, and business expansion initiatives.

The utilization of proceeds has been in line with the objects stated in the offer documents, and the Board periodically reviews their deployment to ensure compliance and effective use of capital.

8. CORPORATE SOCIAL RESPONSIBILITY ("CSR") INITIATIVES
The CSR Committee of the Board has formulated and recommended to the Board a CSR Policy indicating the CSR activities which can be undertaken by the Company. The Board approved the CSR Policy which is available on the website of the Company at https://storage.googleapis.com/iifl-fmance-storage/ files/2023-07/CSR%20policy_MFL%20Finance.pdf

IIFL group has set-up IIFL Foundation, a Section 8 Company incorporated under the Act which acts as the principal arm to undertake CSR initiatives on behalf of your Company and its subsidiary. IIFL Foundation through its CSR initiatives addresses 5 thematic areas - Health, Education and Environment, Livelihood & Poverty Alleviation, collectively - HELP

As per Rule 4(2) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, IIFL Foundation has registered itself with the Central Government by filing the e-Form CSR-1 with the Registrar of Companies.

IIFL Foundation has identified focus areas for CSR initiatives which includes:

Medical Camp at Barsana, District Mathura in Uttar Pradesh, offering free of cost Cataract Operations, Dental Check-ups, Treatments and Surgeries;

Medical Camp at Pandharpur, District Solapur in Maharashtra, offering free of cost treatment to thousands of pilgrims visiting in month of July;

Repair and renovation of Dharamshala at the Maharana Bhupal Government Hospital, Udaipur, Rajasthan, by upgrading 6 Halls, 31 washrooms and 36 rooms, benefiting the marginalised population under treatment at the Government hospital;

Emergency Medical Assistance at the Mahakumbh Mela in Prayagraj, Uttar Pradesh, offering lifesaving services at the massive gathering with Emergency Medical Assistance Boats (with rescue swimmers), Doctors and trained volunteers;

A first-aid workshop on conducting life-saving CPR (Cardiopulmonary Resuscitation) during medical emergency in Mumbai, Maharashtra;

Donation of an Ambulance to the Sub District Hospital - Lolab, Kupwara, an aspirational district in Jammu & Kashmir;

Donation of Medical Equipment - Endohold ENT surgical machine and Frenzel Goggles pack, to ENT Department at the Maharana Bhupal Government Hospital in Udaipur, Rajasthan;

Building foundational literacy among females from marginalised communities of Rajasthan, through flagship programme 'Sakhiyon ki Baadi’, which has an overall reach across 5 districts with 255 learning centres;

Digital Shaala programme in Government Schools through 50 television sets upgraded with educational content to improve students learning experience, in the grade 6th-8th, especially for girls from 10 to 16 years of age;

Support for Education and Nutrition of boys at Shelter Home in Mumbai, Maharashtra;

I Smart Shala programme to promote Academic Learning of Teachers and Students at Government schools in Jodhpur, Bikaner & Jaipur. This programme engaged 1.11 lakh students and 3,010 teachers across 1,505 Government schools;

I Setting up and operating an English Language Lab and Computer Lab at 2 Government schools in Rajsamand District, Rajasthan, to improve learning outcomes of the students;

I Support to a Primary School in Kandivali, Mumbai, Maharashtra, for education of children from financially weaker group residing in slums;

I Provided essential IT equipment to setup E-learning centre for children with special needs (Intellectual Disability);

I An awareness program on Girls Education (Akshar Jyoti) among rural communities promoting importance of Education for girls, subsequently assisting their enrolment at Government School, in Udaipur, Rajasthan;

I Financial literacy program for Girls students at Government Girls School in Udaipur district of Rajasthan;

I Support to setup a Computer Lab at Sri Ramkrishna Mission (SRKM) Vivekanand Girls High School, Chennai, Tamil Nadu;

I Supported surveying of Rajasthan state for the Annual Status of Education Report (ASER) 2024 facilitated by Pratham Foundation;

I Supported upgradation of school for children of marginalised (Scheduled Tribe) with construction at classroom and a Kitchen at Sarvalli village in Dahanu (Taluka), Palghar district of Maharashtra;

I A skill development course on Banking and Finance for 30 youths from lower income groups, in Mumbai, Maharashtra;

I Homestay Host Training, a skill development programme for youths at Tezu, Arunachal Pradesh, to offer livelihood to the native population and help promote tourism. The project is supported by the National Cadet Corp (NCC) - India, under the Ministry of Defence;

I Skill development programmes in Hospitality Training Programme (Chef Trade - Commis Chef)

for youths residing at Kupwara (Aspirational) district in Kashmir. The programme is supported by Indian Army;

Conducted Relief activity at Flood affected site in Dibrugarh, Assam;

Support to 35th Maharashtra State Police Sports Competition held in Thane, Maharashtra;

Donated haematology analyser for blood testing to provide detailed information about the different types of blood cells, including red blood cells (RBCs), white blood cells (WBCs), and platelets;

Set up English language labs in government schools to strengthen English comprehension and language skills;

Extended salary support to contract teachers to ensure uninterrupted education in public schools;

Promoted digital literacy through installation of two smart boards at two government schools; and

Financial support to a deserving underprivileged student to ensure education continuity.

During the year under review, your Company allocated 2% of its average net profits of the preceding three financial years (computed as per the relevant provisions of the Act) on CSR projects. The details thereof are mentioned in the CSR Annual Report, attached as "Annexure II" to this report. Refer page 147 of this Report.

Further, during the year under review, impact assessment was not applicable to the Company. However, an impact assessment of the Sakhiyon ki Baadi programme was conducted by IIFL Foundation through an independent agency using the OECD-DAC Methodology.

9. SHARE CAPITAL
During the year under review, the total paid up equity share capital of the Company increased from ?76,30,96,870 to ' 84,90,33,140 pursuant to allotment

of 5,73,865 equity shares of ' 2 each under Employee Stock Option Scheme(s) of the Company to eligible employees and allotment of 4,23,94,270 equity shares of ' 2 each pursuant to Rights Issue and the said equity shares rank pari passu with the existing equity shares.

The movement of share capital is as under:

Particulars

No. of equity shares allotted

Cumulative outstanding share capital

Share Capital at the beginning of the year

-

76,30,96,870

Allotment of shares to employees on April 30, 2024 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

60,383

76,32,17,636

Allotment of shares on May 17, 2024 pursuant to Rights Issue to the eligible shareholders

4,23,94,270

84,80,06,176

Allotment of shares to employees on June 20, 2024 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

1,87,883

84,83,81,942

Allotment of shares to employees on August 14, 2024 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

51,246

84,84,84,434

Allotment of shares to employees on October 11,2024 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

2,13,103

84,89,10,640

Allotment of shares to employees on December 10, 2024 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

24,096

84,89,58,832

Allotment of shares to employees on February 4, 2025 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme

37,154

84,90,33,140

Further, post closure of the financial year, 3,43,214 equity shares were allotted to employees on April 4, 2025 pursuant to exercise of options granted under IIFL Finance Employee Stock Option Plan 2008 and IIFL Finance Employee Stock Option Plan 2020 - Merger Scheme. Pursuant to the aforesaid allotments, the paid-up equity share capital of the Company stands increased to ' 84,97,19,568.

10. SECURITIZATION/ASSIGNMENT OF LOAN PORTFOLIO
During the year under review, your Company has undertaken securitization transactions of total book value of loan assets amounting to ' 378 Crore and Direct Assignment transactions of total book value of loan assets amounting to ' 3,147 Crore.

11. FINANCIAL LIQUIDITY
From a liquidity standpoint, the Company continues to maintain a strong and resilient position. The Company’s principal sources of liquidity include cash and cash equivalents, along with cash flows generated from our lending and investment activities. During the year under review, the Company took proactive steps to ensure that its liquidity position remained robust and aligned with

the operational and regulatory expectations applicable to NBFCs.

The Company successfully raised capital through Rights Issue from existing shareholders and through the issuance of Non-Convertible Debentures (NCDs), thereby further strengthening its liquidity profile. These funds enhanced the Company’s financial flexibility, enabling it to respond swiftly to evolving business needs and pursue strategic opportunities as they arise.

The Consolidated cash and cash equivalent of your Company as on March 31, 2025, stood at '2,066.63 Crore as against '2,469.87 Crore in the previous year. The Company continues to maintain a prudent balance between liquidity and return on assets, recognizing the

importance of ensuring sufficient liquidity to meet all foreseeable financial and business obligations, while also seeking optimal deployment of funds for revenue generation.

12. INTERNAL CONTROL SYSTEMSInternal audit and its adequacy:
The scope and authority of the internal audit function is well defined, and to maintain independence and objectivity in its functions, the internal audit function reports directly to the Audit Committee of the Board. At the beginning of each financial year, an annual Risk-Based Internal Audit ("RBIA") plan is rolled out post approval by the Audit Committee of the Board. The audit plan aims to evaluate the efficacy and adequacy of the internal control system(s) and compliance(s) thereof, robustness of internal processes, policies and accounting procedures, compliance with laws and regulations. The internal audit function, consisting of professionally qualified accountants, engineers, fraud risk and information technology specialists, is adequately skilled and resourced to deliver audit assurances at highest levels. Based on the reports of the internal audit function, process owners undertake corrective action in their respective areas. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Internal Controls over Financial Reporting:
Your Board is of the opinion that internal financial controls with reference to the financial statements were tested and reported adequately and operating effectively. The internal financial controls are commensurate with the size, scale and complexity of operations. The controls were tested during the year and no reportable material weaknesses either in their design or operations were observed. Your Company has put in place robust policies and procedures, which inter alia, ensure integrity in conducting its business, safeguarding of its assets, timely preparation of reliable financial information, accuracy and completeness in maintaining accounting records, prevention and detection of frauds and errors.

13. EMPLOYEES STOCK OPTION SCHEMES
Your Company has in force the following Schemes:

a. IIFL Finance Employee Stock Option Plan 2008 ("ESOP Scheme 2008")

b. I IFL Finance Employee Stock Option Plan 2020 -Merger Scheme ("ESOP Scheme 2020")

During the year under review, your Company granted no stock options to the employees under the ESOP Scheme 2008. Further, 4,01,435 stock options got lapsed and the same were added back to the pool, which can be used for further grant, and 16,510 stock options granted under ESOP Scheme 2020 got lapsed and the same are not available for further grant.

The aggregate number of stock options outstanding as on March 31, 2025, stands at 35,58,866 stock options under ESOP Scheme 2008 and 12,01,536 stock options under ESOP Scheme 2020.

A certificate from the Secretarial Auditor of your Company confirming that the ESOP Scheme 2008 and ESOP Scheme 2020 has been implemented in accordance with the applicable Regulations. The same will be available for inspection by Members through electronic means. Members can request the same by sending an email to shareholders@iifl.com till the Annual General Meeting ("AGM").

The relevant disclosures pursuant to Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 and Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are uploaded on the website of the Company i.e. www.iifl.com and the same would be available for inspection by Members through electronic means.

The relevant disclosures in terms of Ind AS 102, relating to share based payment, forms part of note no. 40 of the Standalone Financial Statements and note no. 40 of the Consolidated Financial Statements of the Company.

14. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company, being a NBFC registered with the RBI and engaged in the business of giving loans in the ordinary course of its business, is exempt from complying with the provisions of section 186 of the Act with respect to loans, guarantees and investments. Accordingly, the Company is exempted from complying with the requirements to disclose in the financial statement the full particulars of the loans given, investment made, guarantee given, or security provided.

During the year under review, the Company strategically invested its surplus funds in various securities, as part of its normal business operations. These investments were made to optimize returns while ensuring liquidity and managing risks in accordance with the Company’s investment policy.

For detailed information on the Company’s investments, please refer to note no. 9 of the financial statements.

15. SUBSIDIARY COMPANIES
As on March 31, 2025, the Company has two (2) subsidiaries, one (1) wholly-owned subsidiary and one (1) step down subsidiary as below.

IIFL Home Finance Limited ("HFC"), Subsidiary Company

IIFL Samasta Finance Limited ("Samasta"), Subsidiary Company

Ý I IFL Open Fintech Private Limited, Wholly-owned Subsidiary Company

IIHFL Sales Limited, Step-down Subsidiary Company

The Company does not have any Associate(s)/Joint Venture(s).

Pursuant to Regulation 16 of the Listing Regulations, HFC and Samasta are the Material Subsidiaries of the Company for FY 2024-25 and shall continue to be the Material Subsidiaries of the Company during FY 2025-26 for compliance with Listing Regulations. In accordance with the terms of Regulation 24(1) of the Listing Regulations, Mr. Ramakrishnan Subramanian, an Independent Director on the Board of the Company, also serves as an Independent Director on the Board of HFC w.e.f. April 1,2024. Mr. Nihar Niranjan Jambusaria, an Independent Director on the Board of the Company, also serves as an Independent Director on the Board of Samasta w.e.f. April 24, 2024.

The Policy on Determining Material Subsidiary is available on the Company’s website at https:// storage.googleapis.com/iifl-finance-storage/ files/2025-03/Policy_on_determining_Material_ Subsidiaries_04032025.pdf.

During the year, the Board reviewed the affairs of the subsidiaries. In accordance with Section 129(3) of the Act, the Company prepared the consolidated financial statements of the Company and all its subsidiaries, which forms part of the Annual Report. Further, a statement containing the salient features of the financial statements of the Company’s subsidiaries, in the prescribed Form AOC-1, is annexed to the Consolidated Financial Statements. The statement also provides the details of performance and financial positions of each of the subsidiaries.

The Audited Financial Statements of the subsidiaries of the Company for the financial year ended March 31,2025, are available on the website of the Company at www.iifl.com. The Members may download the

aforesaid documents from the Company’s website and can also request the same by sending an email to shareholders@iifl.com till the AGM. Further, the aforesaid documents shall also be available for inspection by the Members at the registered office/ corporate office of the Company, during business hours on working days and through electronic mode.

16. CAPITAL ADEQUACY
Your Company remains committed to maintaining a strong capital adequacy position in line with regulatory requirements and best practices within the financial services industry. As on March 31 2025, the Capital to Risk Assets Ratio ("CRAR") of the Company was 18.48% which is well above the minimum requirement of 15% CRAR prescribed by the RBI.

Out of the above, Tier I capital adequacy ratio stood at 13.78% and Tier II capital adequacy ratio stood at 4.70%, respectively.

17. ANTI- BRIBERY AND ANTI-CORRUPTION POLICY
Your Company has an Anti-Bribery and Anti-Corruption Policy ("Policy") on combating bribery and corruption and to conduct Company’s business in an honest and ethical manner. The Company takes a zero-tolerance approach to bribery, corruption and other forms of unlawful payment (including gifts, hospitality, etc.) and are committed to act professionally, fairly and with integrity in all it’s dealings wherever it operates. The Company is also committed towards implementing and enforcing effective systems to counter bribery and corruption. The Policy prohibits offering, promising, giving or authorizing others to give anything in excess of a certain value, either directly or indirectly, to any person or entity, thereby setting out Company’s standards on bribery and other forms of unlawful payments.

The policy provides information and guiding principles to prevent any activity or conduct relating to bribery, facilitation payments or corruption and to guide employees to act professionally, fairly and with utmost integrity in all their business dealings and relationships, wherever they operate.

The Policy requires that the Company do not engage in bribery or corruption in any form and explicitly mentions that the Company will not pay or procure payment of a bribe or unlawful fee to encourage the performance of a task or one which is intended or likely to compromise the integrity of another. The Company will not accept any payment, gift or inducement from a third party which is intended to compromise Company’s integrity.

The Company has appointed Ms. Preeti Kanan, Chief Human Resources Officer (CHRO), as the Chief Anti-Corruption Officer. Any individual may report instances of bribery or corruption by writing to anticorruption@iifl.com. The Anti-Bribery and AntiCorruption Policy is also available on the Company’s website at https://www.iifl.com/finance/anti-corruption-policy.

18. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
The Business Responsibility and Sustainability Report ("BRSR") forms a separate and integral part of the Annual Report and has been prepared in accordance with the regulatory requirements prescribed by SEBI, including the Master Circular No. SEBI/HO/CFD/ PoD2/CIR/P/0155 dated November 11, 2024, and the earlier circular SEBI/HO/CFD/CFD-SEC-2/P/ CIR/2023/122 dated July 12, 2023. As mandated, BRSR disclosures are applicable to the top 1,000 listed entities by market capitalization, and the Company has ensured full alignment with the updated BRSR framework. The BRSR outlines the Company’s key initiatives and performance across Environmental, Social, and Governance (ESG) parameters. Further, the requirement for reasonable assurance of BRSR Core and ESG disclosures pertaining to the value chain is not applicable to the Company for the financial year 202425, in line with the phased applicability prescribed under the aforementioned circulars.

19. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report for the year under review, as specified under Regulation 34 read with Schedule V of the Listing Regulations and RBI SBR Direction, is presented in a separate section, forming part of this Annual Report.

20. DIRECTORS AND KEY MANAGERIAL PERSONNEL Board and Committees
The Board is central to the Company’s corporate governance practices, overseeing the Company’s operations to ensure that Management acts in the best interests of all stakeholders. The Company believes that a well-informed, independent, and engaged Board is essential to maintaining the highest standards of governance. The Board provides strategic guidance, monitors performance, and ensures adherence to ethical business practices, while managing risks effectively. It continually evaluates and adapts governance practices to remain aligned with the evolving business environment, markets in which we

operate, and the Company’s core values, ensuring that governance principles support long-term strategic objectives.

The Board is supported by its various Committees, each of which ensures that specific matters receive the appropriate attention and consideration. These Committees focus on key areas, make informed decisions within the framework set by the Board, and provide recommendations on issues within their respective purviews. Each Committee operates under clearly defined terms of reference, which outline the authority delegated by the Board.

The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience, expertise (including proficiency, as applicable) and hold highest standards of integrity.

Appointment and Cessation of Directors and Key Managerial Personnel

During the year under review, based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors of the Company took on record the appointments, re-appointments, cessations, and retirements of various Directors and Key Managerial Personnel ("KMP"), respectively, in accordance with the applicable provisions of the Act and the Listing Regulations.

I. Appointments / Re-appointments

A. Directors
l Mr. Gopalakrishnan Soundarajan

(DIN: 05242795), was appointed as an Additional Non-Executive Director of the Company, liable to retire by rotation, with effect from May 11, 2024. His appointment was subsequently regularised by the Shareholders by way of a Special Resolution passed through Postal Ballot on June 10, 2024.

l Ms. Nirma Anil Bhandari (DIN: 02212973), was appointed as an Additional Non-Executive Independent Director of the Company, not liable to retire by rotation, for a term of five (5) consecutive years commencing from September 16, 2024. Her appointment was subsequently regularised by the Shareholders by way of a Special Resolution passed through Postal Ballot on December 10, 2024.

I Mr. R Venkataraman (DIN: 00011919), Joint Managing Director of the Company, whose term was due to expire on April 22, 2025, and was reappointed by the Board at its meeting held on February 12, 2025, for a further term of five (5) consecutive years with effect from April 23, 2025, subject to approval of the Shareholders. A notice under Section 160 of the Act has been received from a Member signifying intention to propose his re-appointment at the ensuing Annual General Meeting.

B. Key Managerial Personnel

I Mr. Samrat Sanyal was appointed as the Company Secretary of the Company, with effect from August 23, 2024. He was also designated as the Compliance Officer pursuant to Regulation 6(1) of the Listing Regulations and as a Key Managerial Personnel in terms of Section 203 of the Act.

II. CessationsA. Directors
I Mr. Chandran Ratnaswami (DIN:

00109215), resigned as a Non

Executive Director of the Company with effect from May 10, 2024, close of business hours, upon attaining the age of 75 years on May 11,2024.

I Mr. Vijay Kumar Chopra (DIN:

02103940), completed his term as a Non-Executive Independent Director and ceased to be a Director of the Company with effect from May 20, 2024, close of business hours.

Ý Ms. Geeta Mathur (DIN: 02139552), completed her second term as a NonExecutive Independent Director and consequently ceased to hold office with effect from September 17, 2024.

B. Key Managerial Personnel

I Ms. Mauli Agarwal resigned from the position of Company Secretary and Compliance Officer with effect from August 23, 2024.

The Board placed on record its sincere appreciation for the valuable contributions made by the outgoing Directors and Key Managerial Personnel during

their tenure and extended its best wishes for their future endeavours.

III. Retirement by Rotation

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company:

I Mr. Arun Kumar Purwar (DIN: 00026383), Chairperson and Non-Executive NonIndependent Director, is retiring by rotation at the ensuing AGM and does not wish to seek re-appointment. Accordingly, he shall cease to hold office at the conclusion of the AGM.

I Mr. T S Ramakrishnan (DIN: 09515616), NonExecutive Nominee Director, is liable to retire by rotation and being eligible, has offered himself for re-appointment. The Board, at its meeting held on May 8, 2025, approved and recommended his re-appointment for the approval of the Shareholders at the ensuing AGM.

21. MEETING OF DIRECTORS & COMMITTEES AND BOARD EFFECTIVENESSBoard of Directors:
During the year under review, the Board of Directors met eleven (11) times to discuss and approve various matters including financials, appointment of auditor, review of audit reports and other Board matters. For further details, please refer to the report on Corporate Governance forming part of this Report.

Committees of the Board:
In accordance with the applicable provisions of the Act, Listing Regulations and RBI SBR Direction, the Company has the following Committees:

Statutory Board Committees:

Audit Committee

Nomination and Remuneration Committee

Corporate Social Responsibility Committee

Stakeholders Relationship Committee

Risk Management Committee

Asset Liability Management Committee

IT Strategy Committee

Review Committee (Wilful Defaulters)

Special Committee of the Board for Monitoring and Follow-up of cases of Fraud

Customer Service Committee The Chairperson of respective Committees report to the Chairperson of the Board who is a Non-Executive Director. The Chairperson of respective committees

apprises the Board about the key highlights and decisions taken by the Committees.

The Board of Directors have set up various Committees, delegated powers, and assigned roles and responsibilities with well-documented terms of reference for each Committee.

The details inter alia including the composition, and terms of reference of the aforesaid Committees are provided on the website of the Company at www.iifl.com.

Besides the aforesaid Committees, the Board of the Company have constituted Committees comprising of Senior Management Personnel for day-to-day operations of the Company viz. Finance Committee, Group Credit Committee, Environmental, Social and Governance Committee, etc.

Board Effectiveness
Familiarization Program for the Independent Directors

Details of the Familiarization Program are provided in the Corporate Governance Report forming part of this Report and are also available on the website of the Company at https://storage.googleapis.com/ iifl-finance-storage/files/2025-06/Familiarization_ Programme_of_ID_2025.pdf

Evaluation of Board, its Committees and Directors
The evaluation process, manner and performance criteria as carried out for Board, its Committees and Directors is explained in the Corporate Governance Report forming part of this Report.

Declaration by Independent Directors

Your Company has received necessary declarations from each Independent Director of the Company, pursuant to the provisions of section 149(7) of the Act and Regulation 25(8) of the Listing Regulations, stating that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

The above-mentioned declarations were placed before the Board and in the opinion of the Board, all the Independent Directors fulfil the conditions specified under the Act and the Listing Regulations and are Independent to the Management and that there has been no change in the circumstances or situation, which exist or may be reasonably anticipated, that could impair or impact the ability to discharge their duties with an objective of independent judgment and without any external influence.

All the Independent Directors of the Company have registered themselves on the Independent Directors’ Databank mandated by the Indian Institute of Corporate Affairs as per the requirements of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

Fit and Proper Criteria & Code of Conduct
Your Company has received undertaking and declaration from each Director on fit and proper criteria in terms of the provisions of RBI SBR Direction. The Board have confirmed that all existing Directors are fit and proper to continue to hold the appointment as Directors on the Board, as reviewed and recommended by the Nomination and Remuneration Committee on fit and proper criteria under RBI SBR Direction.

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

Board Diversity and Inclusion

Your Company recognizes and embraces the importance of a diverse Board in its success. The Company believes that a truly diverse Board will leverage difference in thought, perspective, knowledge, skills, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race, gender that will help us retain our competitive advantage. The Policy adopted by the Board sets out its approach to diversity. The Policy is available on the website of the Company at https://storage.googleapis.com/ iifl-finance-storage/files/2022-07/Board_Diversity_ Policy_27072022.pdf

Remuneration Policy and criteria for selection of candidates for appointment of Directors

Your Company has in place policy for remuneration of Directors and Key Managerial Personnel along with a well-defined criteria for the selection of candidates for appointment on the said positions, duly approved by the Board of Directors.

The Nomination and Remuneration Policy is also available on the website of the Company at https:// storage.googleapis.com/iifl-finance-storage/ files/2024-04/Nomination_and_Remuneration_ Policy_26042024.pdf.

Succession Planning

Your Company has in place a succession planning framework for Directors and Key Managerial Personnel to address anticipated, as well as unscheduled changes

in leadership for continuity and smooth functioning of the Company.

22. RISK MANAGEMENT
Your Company has a well-defined comprehensive Enterprise Risk Management ("ERM") Framework in place and a robust organizational structure to identify, assess, measure and monitor risks and strengthen controls to mitigate risks. The Company has established procedures to periodically place before the Risk Management Committee and the Board, the risk assessment and minimization procedures being followed by the Company and steps taken by it to mitigate these risks. ERM has been adopted by the Company which uses defined Key Risk Indicators based on quantitative and qualitative factors. A two-dimensional quantitative heat map has been implemented, which enables the Management to have a comprehensive view of various identified risk areas based on their probability and impact. The Company have initiated adequate Risk training and awareness program to ensure preparedness.

The composition, terms of reference and powers of the Risk Management Committee are in conformity with the requirements of Regulation 21 of the Listing Regulations and RBI SBR Direction and the same has been provided in the Corporate Governance Report. The Risk Management Committee is authorized to monitor and review overall risk management plan including liquidity risk and is also empowered, inter alia, to review and recommend to the Board the modifications to the Risk Management Policy. The ERM Policy is approved by the Board of Directors and inter alia, includes identification of risks, including strategic, financial, credit, market, liquidity, security, compliance, fraud, reputation, technology, cyber, outsourcing, people/conduct, collection, ESG, business which in the opinion of the Board may threaten the existence of the Company.

23. RELATED PARTY TRANSACTIONS
Your Company has in place a Policy on Related Party Transactions ("RPTs") ("RPT Policy"), as amended from time to time. The Policy provides for identification of RPT, necessary approvals from the Audit Committee/ Board/ Members, reporting and disclosure requirements in compliance with the provisions of the Act and Listing Regulations. The said Policy can be accessed on the website of the Company at https://storage.googleapis. com/iifl-finance-storage/files/2025-04/Policy_on_ Related_Party_Transactions_23042025.pdf.

All contracts or arrangements executed by the

Company during the year under review with related parties were on arm’s length basis and in the ordinary course of business. Hence, the disclosure of RPTs as required under Section 134(3)(h) of the Act, 2013 in Form AOC-2 is not applicable to the Company.

All such RPTs were placed before the Audit Committee/ Board/Members for their approval, wherever applicable. A certificate from an Independent Chartered Accountant is placed before the Audit Committee on a quarterly basis, certifying that all related party transactions entered into by the Company during the quarter were conducted at arm’s length and in the ordinary course of business.

You may refer to note no. 44 of the Standalone Financial Statements and note no. 44 of the Consolidated Financial Statements respectively, which contain related party disclosures.

Your Company has obtained the Member’s approval on Material RPTs in the last AGM held on September 30, 2024 for financial year 2024-25.

Considering that the Company is a NBFC-ML and given the nature of its business and operations, it will continue to enter into various related party transactions (RPTs) in the ordinary course of business. Accordingly, the Company has sought approval from the Members for material RPTs, the details of which are available in the Notice convening the AGM of the Company.

24. ANNUAL RETURN
In terms of provisions of Section 92(3), 134(3)(a) of the Act and the Rule 12 of Companies (Management and Administration) Rules, 2014, the Annual Return in Form MGT-7 for the financial year ended March 31, 2025 is placed on the website of the Company and can be accessed at www.iifl.com.

25. 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 that have occurred between the end of the financial year to which the financial statements relate and the date of this Report, except as mentioned in point no. 6 of this Report.

26. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on energy conservation, technology

absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in "Annexure MI” to this Report. Refer page 151 of this Report.

27. WHISTLE BLOWER POLICY/ VIGIL MECHANISM
Pursuant to Section 177(9) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the Listing

Regulations, the Company has adopted a Whistle Blower Policy/Vigil Mechanism and has established the necessary vigil mechanism for Directors and Employees of the Company 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 on the website of the Company at https://www.iifl.com/ finance/whistle-blowervigilance-policy

28. CREDIT RATING
Your Company’s financial discipline and prudence is reflected in the strong credit ratings prescribed by credit rating agencies. The following credit ratings were assigned to the Company as on March 31,2025.

29. PREVENTION OF SEXUAL HARASSMENT
Your Company recognizes 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 and has duly constituted an Internal Complaints Committee under the same.

Your Company also provides for mandatory online training on prevention of sexual harassment for every new joinee, as well as for all the employees on an annual basis.

The details of complaints received during the year 2024-25 pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are provided in the Corporate Governance Report.

30. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in "Annexure IV" to this report. Refer page 153 of this Report.

Further, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits as set out in the Rule 5(2) and other details as mentioned in Rule 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 and any Member interested in obtaining a copy thereof, may write to the Company at shareholders@iifl.com.

The Managing Director and Joint Managing Director of the Company as per the terms of their appointments, does not draw any commission or remuneration from any Subsidiary Company. Hence, no disclosure as required under Section 197(14) of the Act has been made.

31. STATUTORY AUDITORS
Pursuant to the RBI Circular No. RBI/2021-22/25 Ref. No. DoS. CO. ARG/SEC.01/08.91.001/2021-22 dated April 27, 2021 ("RBI Guidelines"), the statutory audit of the entities with asset size of '15,000 Crore and above, as at the end of previous year, should be conducted under joint audit of a minimum of two audit firms. Accordingly, the current Joint Statutory Auditors M/s. Sharp & Tannan Associates, Chartered Accountants, Mumbai (Firm Registration Number 109983W) and M/s. G. M. Kapadia, Chartered Accountants, Mumbai (Firm Registration Number 104767W) who were appointed at the 28th Annual General Meeting ("AGM") held on July 31, 2023 and 29th AGM held on September 30, 2024, respectively, to hold office for a term of three consecutive years till the conclusion of 31st AGM and 32nd AGM, respectively.

M/s. Sharp & Tannan Associates and M/s. G.M. Kapadia & Co. have also confirmed that they hold a valid peer review certificate as prescribed under Listing Regulations. The Joint Statutory Auditors have confirmed that they continue to satisfy the eligibility norms and independence criteria as prescribed by RBI guidelines and the Act.

The Audit for FY 2024-25 was conducted by M/s. Sharp & Tannan Associates and M/s. G.M. Kapadia & Co, Joint Statutory Auditors of the Company and that there are no qualifications, reservations, adverse remarks or disclaimers made by the Joint Statutory Auditors in their Audit Report. 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 Act. The Joint Statutory Auditors’ Report is enclosed with the financial statements in this Report.

32. SECRETARIAL AUDIT
Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Nilesh Shah & Associates, Practicing Company Secretaries, Mumbai (Peer Review No. 6454/2025) as the Secretarial Auditor of the Company to conduct Secretarial Audit for FY 2024-25.

As required under the said provisions of the Act, the report in respect of the Secretarial Audit carried out by the Secretarial Auditor in Form MR-3 for the FY 2024-25 is annexed hereto marked as "Annexure V" and forms part of this Report. The said Secretarial Audit Report contains qualifications on fines/penalties as below.

Sl.

No.

Observations/Remarks

Management Response

1.

The Company has not submitted its annual audited financial results along with the audit report for financial year ended March 31, 2024 within sixty days from the end of the financial year pursuant to Regulation 33 (3) (d), Regulation 52 (1) and Regulation 52 (2) (d) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Subsequently, BSE Limited and National Stock Exchange of India vide their email dated June 28, 2024 has imposed fine of ' 94,400/- each. The Company has paid the fine.

Due to certain internal contingencies, the Company experienced substantial disruptions to its operational workflows and financial processes. These unforeseen circumstances necessitated an in-depth internal assessment and process adjustments within the affected business segment to restore operational integrity and maintain financial reporting standards. As a result, there was an unavoidable delay in the completion of audit procedures.

We wish to emphasize that the delay was beyond the control of the management and was directly attributable to compliance with regulatory directives. The Company has taken all reasonable steps to cooperate with the auditors and to work toward timely resolution of the issues. Further, there was no material impact on the financial, operations, or other activities of the Company.

2.

The Company has paid remuneration to Mr. Nirmal Jain - Managing Director of the Company in excess of maximum remuneration as provided under Section 197 read together with Schedule V of the Companies Act, 2013 and Regulation 17 (6) (e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. We have been informed that due to RBI cease and desist order on Gold Loan business from March 04, 2024 to September 19, 2024, the business volume and the resultant net profit for the current fiscal was heavily impacted resulting in payment of excess remuneration. The Company proposes to obtain approval of members at the ensuing Annual General Meeting for waiver of excess remuneration.

This situation arose primarily due to an unforeseen regulatory development during the year. As informed earlier, the Reserve Bank of India had imposed a temporary restriction on the Company’s Gold Loan business, which remained in effect until September 19, 2024. This restriction significantly impacted the Company’s operations, resulting in a decline in business volume and profitability. Consequently, the remuneration, exceeded the permissible limits under applicable laws owing to the shortfall in net profits.

Pursuant to Regulation 24A of the Listing Regulations, a listed company is required to annex the Secretarial Audit Report of its material unlisted subsidiary to its Directors Report. The Secretarial Audit Reports of the material subsidiaries of the Company i.e. HFC and Samasta for FY 2024-25 are annexed herewith as "Annexure VI" & "Annexure VII" respectively. Refer pages 159 & 163, respectively, of this Report.

Further, in line with the recent amendments to Regulation 24A of the Listing Regulations, mandating the appointment of a Secretarial Auditor for a continuous term of five years, the Board at its meeting held on May 8, 2025, has appointed M/s. Nilesh Shah & Associates, Practising Company Secretary, Mumbai, as the Secretarial Auditor of the Company for a term of five (5) consecutive financial years commencing from FY 2025-26 to FY 2029-30.

33. REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Joint 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 Act. Therefore, there is no detail which needs to be mentioned in this report.

34. RBI DIRECTIONS
As per Master Direction - RBI (NBFC-SBR) Directions, 2023, the Company has been classified as NBFCs-Middle Layer (ML). The Company continues to comply with all the applicable directions, circulars, notifications and guidelines etc. issued by the RBI applicable to NBFCs -ML from time to time.

continued to operate in its other areas of business and maintains a valid NBFC license. Accordingly, there was no impact on the going concern status of the Company.

Except for the above, no other significant or material orders have been passed by any Regulator, Court, or Tribunal that could impact the going concern status or the Company’s future operations.

39. DIRECTORS' RESPONSIBILITY STATEMENT

As stipulated in Section 134(5) of the Act, the Directors subscribe to the "Directors Responsibility Statement" and to the best of their knowledge and ability, hereby confirm that:

i. in the preparation of the annual accounts, the applicable Indian Accounting Standards had been followed and there were no material departures;

ii. they have 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 year;

iii. they have 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;

iv. the annual accounts have been prepared on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

41. GENERAL

Your Directors state that during FY 2024-25:

(i) the Company has not issued equity shares with differential rights as to dividend, voting or otherwise;

(ii) the Company has not issued any sweat equity shares during the year;

(iii) the Central Government has not prescribed the maintenance of cost records for any of the products of the Company under sub-section (1) of

35. CORPORATE GOVERNANCE
Your Company is committed to creating longterm value for all stakeholders while upholding the highest standards of integrity, social responsibility, environmental stewardship, and regulatory compliance. The Company’s actions are driven by core values and guiding principles that are deeply embedded across every level of the organization. These principles have consistently shaped the Company’s journey and will continue to guide the Company into the future.

The report on Corporate Governance for FY 2024-25, as stipulated under the Listing Regulations and the RBI SBR Direction, forms an integral part of this report.

36. OBSERVANCE OF THE SECRETARIAL STANDARDS
The Board affirms that a proper system have been devised to ensure compliance with the applicable laws. Pursuant to the provisions of Section 118 of the Act, during the FY 2024-25, the Company has adhered with the applicable provisions of the Secretarial Standards, as amended from time to time, issued by the Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.

37. DEPOSITS
During the year under review, the Company did not accept/renew any deposits within the meaning of Section 73 of the Act and the Rules made thereunder and RBI SBR Direction.

38. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
The Reserve Bank of India (RBI), through a press release and order dated March 4, 2024, directed the Company to immediately cease and desist from sanctioning or disbursing gold loans, as well as from assigning, securitising, or selling any of its gold loans. However, the Company was permitted to continue servicing its existing gold loan portfolio through regular collection and recovery processes.These supervisory restrictions were imposed pending the completion of a special audit initiated by the RBI. Following the completion of the audit and RBI's inspection, the ban was lifted.

The Special Audit commenced on April 23, 2024, and subsequently concluded, the RBI, after examining the submissions made and the remedial actions undertaken by the Company, vide its communication dated September 19, 2024, lifted the restrictions imposed on the gold loan business. The aforesaid directions were specific to the gold loan portfolio and did not affect the Company’s other business activities. The Company

Section 148 of the Act and the Rules framed there under;

(iv) there is no change in nature of business of the Company during the year;

(v) the Company has not defaulted in repayment of loans from banks and financial institutions;

(vi) there were no delays or defaults in payment of interest/principal of any of its debt securities;

(vii) the Company had not made any application under the Insolvency and Bankruptcy Code, 2016 (the "Code"). As at March 31, 2025, no applications have been filed or are pending under the Code. No proceeding is pending against the Company under the Code;

(viii) there was no instance of one-time settlement with any bank or financial institution;

(ix) the details of Debenture Trustees of the Company are as follows:

Particulars

Catalyst Trusteeship Limited

Vardhman Trusteeship Private Limited

Address

GDA House, First Floor, Plot No. 85 S. No. 94 & 95, Bhusari Colony (right), Kothrud, Pune- 411038

The Capital, 412A, Bandra Kurla Complex, Bandra East, Mumbai 400051

Contact Details

91 22 49220555

91 22 40140832

Email

complianceCTL-Mumbai@ctltrustee.com

Corporate@vardhmantrustee.com

Website

www.catalysttrustee.com

www.vardhmantrustee.com

42. AWARDS AND RECOGNITIONS
During the year under review, the Company, one of its affiliated entities engaged in social impact initiatives, and a member of the Board of Directors of the affiliated entity were conferred with various awards and accolades in recognition of their contributions across financial services, social responsibility, and leadership.

I. Company

i. Most Trusted NBFC for 2023 award at NBFC & Fintech Leadership Awards 2024;

ii. Corporate Governance Excellence Award - NBFC at the NBFC & Fintech Leadership Awards 2024;

iii. Best Customer Experience Initiative - NBFC award at the NBFC & Fintech Leadership Awards 2024;

iv. Listed among 'India's Top 25 Best Workplaces in BFSI’ for the year 2025 by Great Place To Work® India;

v. IIFL Finance was Great Place to Work® Certified™ in India for the period (February 2025 - February 2026);

vi. Best Brand Building Campaign - NBFC for its 'Customer Testimonial' Campaign at the Bharat NBFC & Fintech Summit and Awards 2024;

vii. Best Technology based NBFC’ award at

Bharat NBFC & Fintech Summit and Awards 2024;

viii. 'Best NBFC in Customer Experience of the Year’ award at Bharat NBFC & Fintech Summit and Awards 2024;

ix. Best Data Driven NBFC of the Year award at the NBFC & Fintech Leadership Awards 2024;

x. Best Cyber Security Initiative - NBFC award at the NBFC & Fintech Leadership Awards 2024;

xi. Great Indian Corporate Treasury - Leadership in Risk Management award at the Great Indian Treasury Leaders’ Summit and Awards; and

xii. Great Indian Audit Team of the Year at the Great Indian Audit Leader Summit and Awards 2024

II. IIFL Foundation Limited and Mrs. Madhu Jain
i. The Government of Rajasthan felicitated the IIFL Foundation Limited and Mrs. Madhu Jain with the 'Bhamashah Samman’ in recognition of their outstanding contribution to education, particularly in advancing girl child literacy.

ii. IIFL Foundation received the 'Best Skill Development Program’ award for its Retail and Hospitality Training Program in Kashmir at the CSR Summit and Awards.

iii. IIFL Foundation received the 'Best Social Welfare Program’ award for its Dharamshala for Patients at Maharana Bhupal Hospital at the CSR Summit and Awards.

iv. Mrs. Madhu Jain, Director - IIFL Foundation, received the CSR Leadership Award at the CSR Summit and Awards.

43. APPRECIATION
At IIFL Finance Limited, every business is adeptly managed by a distinguished team of leaders with extensive and diverse experience in the financial sector, dedicated to our mission of establishing the Company as a leading financial services provider. This professionally equipped and technically sound management has set progressive policies and objectives, adhering to global best practices, with a clear vision to elevate the Company to new heights.

Having consistently received external reassurance in our commitments over the years, your Directors place on record their sincere appreciation for the assistance

and guidance provided by the Reserve Bank of India, the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Government and other regulatory authorities, Stock Exchanges, Depositories, Registrar and Share Transfer Agent, and other statutory bodies. Their continued support, cooperation, and encouragement have been instrumental in the Company’s journey.

We also express our heartfelt gratitude to our employees for their unwavering dedication and valuable contributions, which have been pivotal in navigating challenges and achieving strategic goals.

Your Directors gratefully acknowledge the valuable support extended by all stakeholders of the Company, including customers, members, investors, dealers, vendors, bankers, and other business partners, during the year. Our employees continue to play a key role in helping the Company scale new heights year after year, and their commitment is deeply appreciated. The involvement of Members is also greatly valued, and your Directors look forward to your continued support.