IIT Investrust Limited

REPORT OF THE DIRECTORS

The Members

Your Directors are pleased to present this 24th Annual Report of the Company together with the Audited Accounts for the year ended 31st March 2015.

FINANCIAL PERFORMANCE

The profit after tax achieved by your company during the period under review is almost same as that of the previous year though the gross receipts is also less than previous year. For the fourth year in succession, your Directors are pleased to recommend 4% dividend i.e. INR. 0.40 for every equity share of Rs.10/- each fully paid up for the year 2014-15. The Dividend, if approved by the Shareholders at the ensuing Annual General Meeting will be paid to the equity share holders, whose names appear in the Register of Members, as per the provisions of the Companies Act 2013. In which case, the dividend out go would be INR. 3.70 Mn. and the dividend tax to be paid by the company would be INR.0.90 Mn.

ECONOMIC SCENARIO AND OUTLOOK:

India's growth story is expected to dominate the headlines in the years ahead with both the World Bank and the International Monetary fund predicting robust expansion for Asia's Third Largest economy on the back of reform, initiatives launched by the government and the impact loweroil prices.

The fact that India will take over China as the fastest growing economy by 2015-16 is well acknowledged. The World Bank in a report on South Asian economies said India's economy is expected to a accelerate to 8%in 2017-18 after growth of 7.6% in 2015-16.ln 2014-15 growth is expected to be 7.2% the World Bank said in its South Asia Economic Focus Spring 2015 titled "Making the most of Cheap Oil"

The IMF in its World Economic Outlook (WEO) update said India's growth is expected to strengthen from7.2% in 2014 to 7.5% in 2015. "Growth will benefit from recent policy reforms, a consequent pick up in investment, and lower oil prices. Lower Oil prices will raise disposable incomes, particularly among poorer house hold and help drive down inflation" the IMF said.

It said in China, growth fell to 7.4% in 2014 and is expected to fall further to 6.8% in 2015as previous excesses in real estate credit and investment continue to unwind. "Ongoing implantation of structural reforms and lower commodity prices are expected to expand consumer oriented activities partially buffering the slowdown" IMF said.

Indian Government expects the economy to grow 8.1-8.5% in the current financial year while RBI has forecast 7.8% growth. Economic indicators have signaled sign of green shoots and policy makers expect the momentum to be sustained on the back of reform measures that unfold in the months ahead.

"Higher production capacity, commensurate with accumulating capital and increase in factor productivity and continued but targeted fiscal consolidation will help curb domestic and external imbalances in the face of rising domestic demand in medium term" the World Bank report said. It further said that acceleration on real GDP growth will be driven largely by higher investments, which are expected to grow at an average of 12% during 2015-2017.

The report said inflationary pressures are likely to ease gradually on account of lower crude prices, and an improved production capacity will prevent overheating in the medium-term.

The Government has abolished MAT from April 1,2015 and no retrospective Tax law has brought in by the Government and the Government is hopeful of Goods and Services Tax (GST) getting passed in the coming session of Parliament and the new tax regime would be put in place from April 1,2016 which would be a "single biggesttax reform since independence.

FUTURE OUTLOOK

The Non- Banking Finance Company [NBFC] sector despite operating mostly in the area under served by the fast growing banking Industry in India, has grown considerably in terms of technological sophistication as well as size. They are exposed all kinds of risks like interest rate movement, liquidity, counter party failures .recession etc. like any other player in the financial sector. During the Year, RBI while undertaking a review of the entire regulatory framework for the NBFC Sector, issued prudential guidelines for NBFCs. Key measures introduced are classification of NPA recognition norm, standard asset provisioning norms and change in capital adequacy norms. Though the migration to new norms will strengthen the governing standards of the NBFCs, it is likely to increase volatility and uncertainty in the earning over next 3 years. However this does not change the actual credit flow or the margins over the cycle as there is enough liquidity in the system and hence the return ratios are likely to remain same over the cycle. These regulatory measures will make NBFCs tightly regulated, almost at par with banks.

With most of the players being very cautious during the concluded financial year, the sector concentrated much on risk analysis, mitigation and strengthening the governing standards. However for asset / infra financing NBFCs, FY16 will be a transition year wherein they will start recognizing NPAs and doing provisioning as per RBI's guidelines of 90 days NPA recognition and 0.4% standard asset provisioning by FY18.The proposal to extend the provisions of the SARFAESI Act to the NBFC s with asset size of Rs. 500.00 crores and above sector will go a long way towards the orderly growth and development of the sector. However non-inclusion of all NBFCs [with lesser size] will not enable the growth of the other disciplined players in the sector.

OPPORTUNITIES & THREATS

Now it has become a proven fact that only those NBFCs which fall under the regulatory norms and serious about being in the finance business survived. To survive and constantly grow, NBFCs have to focus on their core strengths while improving on weaknesses. The SARFAESI Act move for NBFCs is a great piece of news. With the economy showing signs of revival the NBFCs are likely to be very aggressive in funding particularly sunrise sectors like housing and other retail business. The automobile sector, an all-time favorite NBFCs which is back in news is likely add for the good show of the sector in the coming years. The fact that NBFCs with a size of over Rs 500 crores can be brought under the SARFAESI Act, helps maintain the asset quality management and speedy recovery. However non-inclusion of small size NBFCs who have played a pivotal role in filling the gap once again leaves behind a 'no level playing field".

Though most of the NBFCs have found alternate methods for additional resources, the Regulatory guidelines to the NBFCs to reduce the dependence on public deposit has already curtailed the capacity of the sectorto raise funds and in turn sustained growth.

Your Company operating only in major cities and having not accepted any public deposit has not ventured into any riskiersegments. Proper systems and procedures are in place to analyze and mitigate the threats.

Due to a slowdown in economic activity in past couple of years and aggressive lending by some of the NBFCs many loans have turned non-performing. Restructuring of assets means loans whose duration has been increased or the interest rate has been decreased. This happens due to inability of the loan taking company/individual to pay off the debt. Both of these have impacted the profitability of NBFCs as they are required to have a higher provisioning amount which directly eats into the profitability. Increasing the loan portfolio and effectively managing the NPAs is the key challenge, going forward for NBFCs

RISK & CONCERNS

Your Company being a NBFC is subjected to both Business and Financial risk. While the business risk associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance, the financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFL recognizes these risks and makes best effort to mitigate them in time.

One of the major concerns for the sector is the deteriorating asset quality in the banking sector which has certain indirect impact on the asset qualities of NBFCs also. Any negative growth of the Industry, irrespective of the sector has some adverse effect on the workings of the NBFCs. IFL has always kept in mind the uncertainties and their mitigation while conducting the business.

NUMBER OF MEETING OF BOARD

Indus Finance Ltd, held 4 Board Meetings during the year ended 31st March 2015. These were on 30th May 2014,11thAugust2014,11th November2014and 30th January 2015

DIRECTORS

Mr. Bala V. Kutti is retiring in the forth coming 24th AGM of the company and being eligible offers himself for re-appointment. Your company has received a notice from a member proposing Mr. T.S. Raghavan as Independent Director for the period of five years. Ms. Alice Chhikara was appointed as additional director with effect from March 30, 2015. She holds of his up to the date of 24th Annual General Meeting. Your company has received a notice from a member proposing Ms. Alice Chhikara as Director of the Company and the information regarding their appointment and reappointment are provided in the notice convening the 24th AGM of the company.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTOR UNDER SECTION 149 (6) OF COMPANIES ACT 2013

The Company has obtained declaration from the Independent Directors that they meet the criteria of Independence has provided in section 149 (6) of the Companies Act 2013

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors hereby state that;

1. In the presentation of the Annual accounts, applicable standards have been followed and there are no material departures.

2. The Directors have selected such accounting policies and apply 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 as at 31st March 2015 and profit for the Company for the year ended 31st March 2015.

3. The Directors have taken proper and sufficient care in the maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. The Directors have prepared the annual accounts on a going concern basis; and

5. The Directors, in the case of listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

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

POLICY FOR SELECTION AND APPOINTMENT OF DIRECTORS AND THEIR REMUNERATION

The Nomination and Remuneration (N&R) Committee has adopted a Charter which, inter alia, deals with the manner of selection of Board of Directors and CEO & Managing Director and their remuneration. This policy is accordingly derived from the said charter.

1. Criteria of Selection of Non-Executive Directors

a. The Non-Executive Directors shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

b. In case of appointment of Independent Directors, the N&R Committee shall satisfy itself with regard to the independent nature of the Directors vis-a-vis the Company so as to enable the Board to discharge its function and duties effectively.

c. The N&R Committee shall ensure that the candidate identified for appointment as a Director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

d. The N&R Committee shall consider the following attributes / criteria, whilst recommending to the Board the candidature for appointment as Director.

I. Qualification, expertise and experience of the Directors in their respective fields.

ii. Personal, Professional or business standing:

iii. Diversity of the Board.

e. In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Director and his engagement level.

2. Remuneration:

The Non-Executive Directors shall be entitled to receive remuneration by way of sitting fees, reimbursementof expenses for participation in the Board/Committee meetings.

i. A Non-Executive Director shall be entitled to receive sitting fees for each meeting of the Board or Committee of the Board attended by him, of such sum as may be approved by the Board of Directors within the overall limits prescribed under the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel Rules, 2014).

ii. The Independent Directors of the Company shall not be entitled to participate in the Stock Option Scheme of the Company, if any, introduced by the Company.

3. CEO, Managing Director/Whole Time Director Criteria for selection / appointment

For the purpose of selection of the CEO, Managing Director / Whole Time Director, the N&R Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position and shall take into consideration recommendation, if any, received from any memberof the Board.

The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down underthe CompaniesAct, 2013 orotherapplicable laws.

Remuneration forthe CEO, Managing Director/Whole Time Director

i. At the time of appointment or re-appointment, the CEO, Managing Director/Whole Time Director, shall be paid such remuneration as may be mutually agreed between the Companies (which includes the N&R Committee and the Board of Directors) and the CEO, Managing Director / Whole Time Director, within the overall limits prescribed underthe CompaniesAct, 2013.

ii. The remuneration shall be subject to the approval of the Members of the Company in General Meeting.

iii. The remuneration of the CEO, Managing Director/Whole Time Director, component comprises salary allowances, perquisites, amenities and retrial benefits.

Remuneration Policy for the Senior Management Employees

1. In determining the remuneration of the Senior Management Employees (i.e. KMPs and Executive Committee Members)the N&R Committee shall ensure/considerthefollowing:

i. The relationship of remuneration and performance benchmark is clear;

ii. The remuneration component comprising salaries, perquisites and retirement benefits;

iii. The remuneration including annual increment is decided based on the criticality of the roles and responsibilities, the Company's performance vis-a-vis the annual budget achievement.

iv. N&R Committee will carry out the individual performance review based on the standard appraisal matrix and shall take into account the appraisal score card and other factors, whilst recommending the annual increment.

AUDIT COMMITTEE

A qualified and independent Audit Committee of the Board of the company is functioning. It monitors and supervises the Management's financial reporting process with a view to ensure accurate and proper disclosure, transparency and quality of financial reporting. The committee reviews the financial and risk management policies and also the adequacy of internal control systems and holds discussions with Statutory Auditors and Internal Auditors. This is enhancing the credibility of the financial disclosures of the company and also provides transparency.

The company continued to derive immense benefit from the deliberation of the Audit Committee comprising of three Directors, Mr. T.S. Raghavan, Dr. K.R. Shyamsundar & Mr. Bala V. Kutti who are highly experienced and having knowledge in project finance, accounts and company law. Mr. T.S. Raghavan is the Chairman of the Audit Committee. The Company Secretary acts as the Secretary of the Audit Committee. The minutes of each Audit Committee meeting are placed before, and discussed in the full by the Board

THE PERCENTAGE INCREASE IN REMUNERATION OF DIRECTORS. KMP AND MEDIAN EMPLYEE FOR THE FINANCIAL YEAR 2014-15

There is no increase in remuneration to the Directors, KMP and median employee during the financial year2014-15

DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR

Ms. Alice Chhikara was appointed as Additional Directorof the Company effect from 30th March 2015 and there is no new appointment or resignation of KMP of the Company during the under review.

PARTICULARS OF LOANS. GUARANTEE OR INVESTMENTS:

Detailed information is provided in respect of loans under long term loans and advances in notes No. 10 (d) of Notes forming part of the financial statements, similarly detailed information is provided under Non-Current investments in Note No. 9 of Notes forming part of the financial statements. As regards guarantee, the Company has not provided any guarantee to any person or Bodies Corporates

BUSINESS RISK MANAGEMENT:

The Company has developed a Risk Management Policy by identifying the elements of risk which are mentioned below. The risk management approach at various levels inclining documentation and reporting seeks to create transparency, minimize adverse impact on the business objectives and enhance the company's competitive advantage.

The Business risk is associated with operating environment, ownership structure, Management, System & Policy and Corporate Governance

The Financial risk lies in Asset Quality, Liquidity, Profitability and Capital Adequacy. IFL recognizes these risks and makes best effort to mitigate them in time.

BOARD EVALUATION:

Pursuant to the provisions of the CompaniesAct 2013, and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance the directors individually as well as the evaluation of the of its Audit, nomination and remuneration and compliance committees. The manner in which the valuation has been carried out has been explained in the Corporate Governance report.

DEPOSITS:

During the year under review the company has not accepted any deposits from the public with in the ambit of section 73 of the CompaniesAct, 2013 and The companies (Acceptance of Deposits) Rules, 2014.

There is no significant/ material order passed by the Judicial / Regulatory authorities during the year under review.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY ANY COURTS DURING THE UNDER REVIEW. None

WHISTLE BLOWER POLICY

The Company has a whistle blower policy to deal with instance of fraud and mismanagement if an any. The detail of the policy is explained in the Corporate Governance Report and posted on the website of the company.

FINANCIAL STATEMENTS OF THE SUBSIDIARY COMPANY IF ANY

None

INDUSTRIAL RELATIONS AND PARTICULARS OF EMPLOYEES

As of 31st March 2015, Your Company has 6 employees on its rolls. The employees will be inducted in to permanent services of the Company after training; to fill up vacancies as when arises. Your company has not issued any shares under Employees' Stockoption Scheme during the year under review

PERCENTAGE OF INCREASE OR DECREASE IN THE MARKET QUOTATION OF THE SHARES IN COMPARISON TO THE RATE AT WHICH THE COMPANY CAME OUT WITH THE LAST PUBLIC OFFER:

Price of Public offer Rs. 30, Market Price ason 31.3.2015-Rs. 21.15, difference (Rs.8.85) (29.50%)

THE KEY PARAMETERS FOR ANY VARIABLE COMPONENT OF REMUNERATION AVAILED BYTHE DIRECTORS: None.

THE RATIO OF THE REMUNERATION OF THE HIGHEST PAID DIRECTOR TO THAT OF THE EMPLOYEES WHO ARE NOT DIRECTORS BUT RECEIVE REMUNERATION IN EXCESS OF THE HIGHEST PAID DIRECTOR DURING THE YEAR: None.

LIST OF EMPLOYEES WHO ARE IN RECEIPT OF REMUNERATION MORE THAN THE STIPULATED AMOUNT MENTIONED UNDER RULE 5 (2) OF COMPANIES (APPOINTMENT AND REMUNERATION) RULES2014 None.

AFFIRMATION THAT THE REMUNERATION IS AS PER THE REMUNERATION POLICY OF THE COMPANY:

The Company affirms remuneration is as per the remuneration policy of the Company. CORPORATE GOVERNANCE

Your Company has complied with the requirements regarding Corporate Governance as required under revised clause 49 of the Listing agreement entered in with the Stock exchanges where the Company's shares are listed. A Report on the Corporate Governance in this regard is made as a part of this Annual Report and a certificate from the Auditors of Your Company regarding compliance of the conditions of the Corporate Governance is attached to this report.

LISTING OF EQUITY SHARES

Your Company's equity shares are continued to be listed on the Bombay Stock Exchange Ltd, Mumbai during the year under review.

AUDITORS

M/s.V.Ramaratnam & Co. retires at the conclusion of this Annual General Meeting and are eligible for reappointment.

EXTRACT OF ANNUAL RETURN

As provided in Sec 92 (3) of the Act the extract of annual return is given in Annexure (I) of this report in the format Form MGT 9, which forms part of this report.

TRANSACTIONS WITH RELATED PARTIES

Detailed information is provided with respect to the list of Related parties and transactions with them are provided in note No. 18.4 of Notes forming part of the financial statements and also in the form no. AOC 2 under Annexure II.

SECRETARIAL AUDIT

Mr. R. Kannan, PCS is the secretarial auditor of the company for the year under review and his report is attached with this report underAnnexure III.

ADEQUACY OF INTERNAL CONTROL

Your Company has effective and adequate internal control systems in combination with delegation of powers. The control system is also supported by internal audits and management reviews with documented policies and procedures.

M/s. S. Vasudevan& Associates are the Internal Auditors to continuously monitor and strengthen the financial control procedures in line with the growth operations of the Company

PARTICULARES REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT. 2013 AND ITS COMPANIES (ACCOUNTS) RULES 2014

The particulars required to be given in terms of section 134 of the CompaniesAct, 2013 and its Companies (Accounts) Rules, 2014, regarding conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Foreign Exchange outgo are not applicable to Your Company.

ACKNOWLEDGEMENT

The Directors wish to place on record their sincere thanks and gratitude to all its Bond holders, Share holders, Bankers, State Governments, Central Government and its agencies, statutory bodies, suppliers, and customers, for their continued co-operation and excellent support extended to the Company from time to time.

Your Directors place on record their utmost appreciation for the sincere and devoted services rendered by the employees at all levels.

For and on behalf of board of directors of

INDUS FINANCE LIMITED

(formerly known as Indus Finance Corporation Ltd)

Bala V. Kutti

Chairman

Dale:5ih August2015.

Place: Chennai - 600 034.