IIFL Capital Services Ltd Directors Report

Dear Stakeholders,

The Directors are pleased to present the Thirty-First Annual Report of IIFL Capital Services Limited (Formerly known as IIFL Securities Limited) (‘the Company or ‘Your Company or ‘IIFL Capital) along with the audited financial statements for the Financial Year (FY) ended March 31, 2026.

1. COMPANY OVERVIEW

IIFL Capital is one of Indias leading financial services conglomerates, with a growing focus on providing comprehensive wealth management solutions and a broad spectrum of investment offerings to a diverse client base. Over the years, the Company has established a strong legacy of trust, innovation, and excellence through its diversified portfolio of services, consistently delivering long-term value to its clients, shareholders, and other stakeholders.

With nearly three decades of experience, IIFL Capital serves a diverse client base comprising Ultra High Net Worth Individuals (UHNIs), High Net Worth Individuals (HNIs), affluent and institutional investors. Through its Investment Banking, Institutional Equities, Broking & Distribution and Asset Management businesses, the Company offers a comprehensive range of investment and financial solutions, including Mutual Funds Alternative Investment Funds (AIFs), Fixed Income Products (FIPs), structured products, insurance solutions, and other wealth creation opportunities, tailored to meet the evolving needs of its clients.

The Company adopts a holistic approach to financial planning, enabling clients to benefit from comprehensive solutions encompassing wealth preservation, tax optimisation, and succession planning. This integrated framework allows the Company to provide informed and structured guidance across the clients financial lifecycle, with solutions tailored to meet evolving objectives and long-term financial aspirations.

During FY 2026, the Company continued to strengthen its wealth management franchise. With over 400 Relationship Managers (RMs), strong advisory capabilities, a diversified product suite, market-leading research, and technology-enabled platforms, the Company remains well-positioned to drive sustainable growth and deepen client engagement across the wealth spectrum.

Further, the Company continued to strengthen its digital ecosystem to enhance client engagement and investment experience. The IIFL Markets app, with a 4.4 user rating and over 10 Mn downloads, remained a preferred platform for investors, supported by continuous upgrades, advanced features, seamless transactions, and an intuitive user experience. The platform also enables clients to track portfolios, access investment insights, and manage their financial investments seamlessly.

Leading the market in capital raising and advisory, the Company maintained a strong position in the Investment Banking business during FY 2026, with successful execution across Initial Public Offerings (IPOs), Qualified Institutional Placements (QIPs), Offer for Sale (OFS), private placements, stake sales, and advisory mandates. The Companys research platform comprised 48 professionals, covering 318+ stocks across 20+ sectors, representing over 72% of Indias market capitalisation, and providing sectoral and thematic insights to institutional and wealth clients.

As on March 31, 2026, the Company served over 3 Mn clients across institutional, wealth and retail segments through a robust distribution network of 2,600+ partners and ~100 branches across India, complemented by an institutional sales presence in key global financial centres. Supported by an agile technology platform, trusted brand equity and a strong capital base, the Company continued to deliver a seamless client experience and managed Assets Under Management (AUM) and Custody of 2,296 Bn.

2. FINANCIAL SUMMARY AND HIGHLIGHTS

A summary of the Companys financial performance for FY ended March 31, 2026, is as under:

Particular	Standalone		Consolidated
	FY 2026	FY 2025	FY 2026	FY 2025
Gross Income	22,201	21,585	26,031	25,674
Profit/(Loss) before Depreciation and Tax	7,429	8,354	8,214	9,795
Depreciation	(533)	(436)	(651)	(549)
Profit/(Loss) before tax	6,896	7,918	7,563	9,246
Provision for Tax	1,587	1,889	1,927	2,117
Non-controlling interest	-	-	23	5
Profit/(Loss) after Tax	5,309	6,030	5,613	7,123
Balance brought forward from previous year	18,395	13,295	20,797	14,604
Appropriation towards dividend paid	(934)	(930)	(934)	(930)
Surplus carried forward	22,770	18,395	25,477	20,797
Earning Per share on equity Share of 2/- each
Basic (in )	17.10	19.45	18.08	23.06
Diluted (in )	16.14	18.53	17.07	21.89

3. REVIEW OF THE OPERATIONS AND BUSINESS, AND THE STATE OF COMPANY AFFAIRS

During the year under review, there was no change in the nature of business of the Company.

Your Company continued to maintain a strong business performance during FY 2026, reporting consolidated revenue of 26,031 Mn as against 25,674 Mn in FY 2025. The consolidated net profit after tax (TCI) stood at 5,620 Mn in FY 2026 as compared to 7,108 Mn in FY 2025.

i. Retail Equities

During the year, Retail Equities income (including interest income on Margin Trading Facility and Bank Fixed Deposits) stood at Rs.11,212 Mn, down by 9% on a YoY basis, primarily impacted due to regulatory changes and evolving market dynamics; however the Company continue to maintain strong market participation, supported by its diversified client franchise, robust execution capabilities, and technology-led platforms.

ii. Financial Product Distribution and Wealth Management

The Financial Product Distribution business recorded revenue of 5,716 Mn in FY 2026, representing a growth of 12% over 5,094 Mn in FY 2025, aided by higher client adoption and continued diversification of the product portfolio. The Financial Product

Distribution business comprises the distribution of AIFs, Portfolio Management Services (PMS), Mutual Funds, Insurance products, FIPs, and other investment solutions.

iii. Investment Banking & Institutional Equities

The Investment Banking and Institutional Equities business delivered a strong performance in FY 2026, with revenues of 7,119 Mn, reflecting 11% YoY growth. During FY 2026, your Company successfully completed around 45 transactions, including 31 IPOs, 2 QIPs, a rights issue and several private placements.

The Company continued to strengthen its position across capital markets and advisory services through consistent mandate wins, strong execution and enduring client relationships. Multiple offer documents for upcoming IPOs were filed during the year, while several private equity and advisory mandates remained under execution. Continued investment in talent and leadership development further enhanced the Companys capabilities and growth prospects.

iv. Asset Management

The Companys Asset Management business, carried on through its wholly owned subsidiary, IIFL Capital Asset Management Limited (ICAML), continued to strengthen its presence across PMS and AIFs during FY 2026.

As at March 31, 2026, ICAML managed PMS AUM of 22.95 Bn and AIF AUM of Rs.15.05 Bn. During the year, the transfer of the Companys PMS business to ICAML further strengthened its asset management platform and consolidated investment management operations under a dedicated asset management entity. These developments reflect ICAMLs strong investment capabilities, disciplined investment approach and growing presence in the asset management industry, positioning it for sustainable growth and long-term value creation.

4. DIVIDEND AND RESERVES

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company has adopted a Dividend Distribution Policy, which is available on the Companys website at https://files.iiflcapital.com/assets/ Dividend_Distribution_Policy1_d3d028fa68.pdf.

In accordance with the Policy, the Board of Directors declared an interim dividend of 3 per equity share (150% of the face value of 2 per share) at its meeting held on February 10, 2026. The dividend payout aggregated to 934 Mn and is considered as the final dividend for FY 2026.

During the year under review, the Company has transferred an amount of Rs.13 Mn to the General Reserve maintained by the Company.

5. INVESTOR EDUCATION AND PROTECTION FUND

The Company remains committed to safeguarding investor interests and ensuring compliance with the provisions relating to the Investor Education and Protection Fund ("IEPF"). Details of the IEPF-related activities undertaken during FY 2026 are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

6. COMMERCIAL PAPER

During FY 2026, the Company utilised Commercial Papers as a source of short-term funding for its growing Margin Trading Facility business.

7. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY THE COMPANY

Particulars of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 ("Act") are disclosed in Note No. 6 & 7 to the Standalone Financial Statements forming part of this Integrated Annual Report.

8. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes or commitments affecting the financial position of the Company between the end of FY 2026 and the date of this Report, except that subsequent to the close of the financial year, Fairfax India Holdings Corporation, through FIH Mauritius Investments Ltd. and its affiliate ("Fairfax"), proposed to increase its shareholding in the Company to at least 51% through a combination of transactions, including a preferential issue of equity shares aggregating ~2,000 Crores at an issue price of 350 per equity share, an open offer, and arrangements with the existing Promoters, subject to receipt of customary regulatory and other approvals. The shareholders of the Company approved the preferential issue of equity shares at the Extraordinary General Meeting held on June 01, 2026.

Upon completion of the proposed transaction, Fairfax will become part of the Promoter Group alongside the existing Promoters and will have the right to nominate two directors on the Board.

9. SHARE CAPITAL

As on March 31, 2026, the Companys issued, subscribed and paid-up equity share capital stood at 62,28,69,426, comprising 31,14,34,713 equity shares of 2 each. During the year under review, the paid-up equity share capital increased from 61,99,11,618 to 62,28,69,426 pursuant to the allotment of 14,78,904 equity shares under the IIFL Securities Limited Employee Stock Option Scheme – 2018 ("IIFL ESOS Scheme–2018"). The equity shares allotted rank pari passu with the existing equity shares of the Company.

The Company did not issue any equity shares with differential rights as to dividend, voting or otherwise, nor did it issue any sweat equity shares during the year under review.

Subsequent to the close of the financial year, the Board and the shareholders approved the preferential issue of 5,71,42,857 equity shares to FIH Mauritius Investments Ltd. at an issue price of 350 per equity share, aggregating

~2,000 Crores, subject to receipt of customary regulatory and other approvals.

Employees Stock Option Scheme (ESOS)

The Company has in force the IIFL ESOS Scheme–2018, formulated in accordance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021

("SEBI SBEB & SE Regulations"). There were no material changes to the scheme during the year, and the same is in compliance with the applicable provisions of the SEBI SBEB & SE Regulations.

During FY 2026, the Nomination and Remuneration Committee, pursuant to the IIFL ESOS Scheme–2018, granted 23,08,279 stock options to eligible employees of the Company, each convertible into one fully paid-up equity share of the Company. As on March 31, 2026, 11,61,257 stock options had lapsed and were added back to the option pool, and the total number of stock options outstanding under the scheme stood at 3,77,80,027. The disclosures related to ESOPs, as required under the provisions of the Act, the rules made thereunder, and SEBI SBEB & SE Regulations, are available on the Companys website at www.iiflcapital.com. These disclosures can also be inspected by members at the Companys registered office. Members interested in obtaining a copy may contact the Company Secretary at secretarial@iiflcapital. com.

The relevant disclosures in accordance with IND AS 102, relating to share-based payments, forms part of Note 33 of the Standalone Financial Statements and Note 43 of the Consolidated Financial Statements of the Company.

10. CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Act and the rules made thereunder, the Company has constituted a Corporate Social Responsibility ("CSR") Committee. The composition of the CSR Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Integrated Annual Report. The Annual Report on CSR Activities, as required under the Act, is annexed as Annexure 1 and forms a part of this Integrated Annual Report.

The Company has adopted a CSR Policy in compliance with the provisions of the Act, which is available on the Companys website at www.iiflcapital.com The Companys CSR initiatives are primarily implemented through India Infoline Foundation ("IIFL Foundation"), a wholly owned subsidiary incorporated under Section 8 of the Act and registered in accordance with the applicable provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014.

Through IIFL Foundation, the Company undertakes CSR initiatives across the areas of Health, Education & Environment, Livelihood and Poverty Alleviation (HELP). During FY 2026, the CSR programmes remained aligned with select United Nations Sustainable Development Goals (SDGs), including No Poverty (SDG-1), Quality Education (SDG 4), Gender Equality (SDG 5), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8) and Reduced Inequalities (SDG 10).

The Company continued to focus its CSR efforts on creating sustainable and inclusive social impact, with an average of

80% of the beneficiaries of its CSR programmes belonging to marginalised and disadvantaged communities. CSR spending in aspirational districts increased from 0.52 Crores in FY 2025 to Rs.1.97 Crores in FY 2026, underscoring the Companys commitment to inclusive growth and community development. Further details of the CSR initiatives undertaken during the year are provided in the CSR – Social and Relationship Capital of the Narrative Section and the Annual Report on CSR Activities forming part of this Integrated Annual Report.

11. NOMINATION AND REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act and Regulation 19 read with Schedule II of the SEBI Listing Regulations, the Board of Directors has, on the recommendation of the Nomination and Remuneration Committee, adopted a Nomination and Remuneration Policy. The Policy lays down the criteria for appointment, qualifications, positive attributes, independence, remuneration, and evaluation of Board of Directors, Key Managerial Personnel ("KMP") and Senior Management Personnel ("SMP").

The Nomination and Remuneration Policy is attached as Annexure–2 and forms an part of this Integrated Annual Report. The Policy is also available on the Companys website at https://files.iiflcapital.com/assets/Nomination_ and_Remuneration_Policy_d2cd45fce3.pdf

12. HUMAN RESOURCES MANAGEMENT

Your Companys employees are its most valuable asset and key drivers of sustainable growth. The Company continues to focus on attracting, developing, engaging and retaining talent through a people-centric approach, while fostering a high-performance, inclusive and collaborative work culture. Continuous learning and development initiatives, performance-linked rewards, employee engagement programmes and career development opportunities remain integral to the Companys human resource strategy. As on March 31, 2026, the Company had 1,546 permanent employees.

Maternity Benefit Act, 1961

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961, as amended, including provisions relating to maternity benefits and cr?che facilities, as applicable.

Prevention of Sexual Harassment of Women at Workplace

Your Company is committed to providing a safe, secure and inclusive work environment and maintains a zero-tolerance approach towards any form of sexual harassment. In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act, 2013 ("POSH Act") and the rules made thereunder, the Company has in place a Policy on Prevention of Sexual Harassment at Workplace and has constituted an Internal Committee for redressal of complaints. Regular awareness and training programmes are conducted to reinforce a respectful and harassment-free workplace. The Policy is available on the Companys website at https://files.iiflcapital.com/assets/Policy_ and_Prevention_of_Sexual_Harassment_at_Workplace_ ed9b6ac07e.pdf.

During FY 2026, the status of complaints received under the POSH Act was as under: a. Number of complaints received : Nil b. Number of complaints disposed of : Nil c. Number of cases pending for more than 90 days:

Nil

Particulars of employees

The disclosures 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 attached as Annexure – 3 and forms part of this Integrated Annual Report Further, a statement showing the names and other particulars of employees drawing remuneration exceeding the limits specified in Rule 5(2) and 5(3) of the aforementioned rules is maintained and forms part of this Report. However, in accordance with the first proviso to Section 136(1) of the Act, the Annual Report and Accounts are being sent to members and other entitled parties, excluding this information. The information is available for inspection by members. Any member interested in obtaining a copy may write to the Company Secretary at secretarial@iiflcapital. com.

13. SUBSIDIARY, ASSOCIATES AND JOINT VENTURE COMPANIES

As of March 31, 2026, the Company has eleven subsidiaries (including step-down subsidiaries) and no associate or joint venture companies. The following is a list of the subsidiaries, both in India and overseas:

Sr. No.	Name of the domestic subsidiary
1	IIFL Facilities Services Limited*
2	IIFL Management Services Limited*
3	Livlong Insurance Brokers Limited*
4	Livlong Protection and Wellness Solutions Limited
5	India Infoline Foundation* (Section 8 Company)
6	Shreyans Foundations LLP (Step down subsidiary company)
7	Meenakshi Towers LLP
8	IIFL Securities Services IFSC Limited*
9	IIFL Commodities Limited*
10	IIFL Capital Asset Management Limited (Formerly IIFL Securities Alternate Asset Management Limited)*
11	IIFL Capital Inc.*

*Wholly-owned subsidiary

During FY 2026, IIFL Wealth (UK) Limited, a wholly owned subsidiary of the Company, had undergone voluntary strike off and was dissolved with effect from July 22, 2025, and accordingly ceased to be a wholly owned subsidiary of the Company from such date. Other than the aforesaid change, no company became or ceased to be a subsidiary, joint venture or associate of the Company during the year.

Subsequent to the close of the financial year, IIFL Capital (IFSC) Limited became a wholly owned subsidiary of the Company upon its incorporation on May 11, 2026.

Pursuant to Regulation 16 of the SEBI Listing Regulations, the Board has approved a Policy for Determining Material Subsidiaries, which is available on the Companys website at https://files.iiflcapital.com/assets/Policy_for_ determining_material_subsidiaries_7edbd88b99.pdf In accordance with the provisions of Section 136 of the Act, the audited financial statements of the Company, including the consolidated financial statements, along with the financial statements of its subsidiaries, are available on the Companys website at https://www.iiflcapital.com/ investor-relations/financials. These documents are also available for inspection by the Members in accordance with the applicable provisions of the Act.

14. FINANCIAL PERFORMANCE OF THE MAJOR SUBSIDIARIES OF THE COMPANY

A brief overview of the performance of the major subsidiary companies is provided below.

Domestic subsidiaries

I. IIFL Facilities Services Limited ("IFSL")

IFSL is engaged in providing office infrastructure, facility services and related services, primarily catering to group companies as well as external clients. During FY 2026, the total income and total comprehensive income of IFSL were Rs.1,355 Mn and 758 Mn, respectively, compared to Rs.1,095 Mn and 611 Mn in FY 2025.

II. Livlong Insurance Brokers Limited ("LIBL")

LIBL is registered with the Insurance Regulatory and Development Authority as a Direct Broker, providing insurance broking services. During FY 2026, LIBLs total income and total comprehensive income were 925 Mn and 68 Mn, respectively, compared to Rs.1,110 Mn and Rs.199 Mn in FY 2025.

III. Livlong Protection and Wellness Solutions Limited ("LPWSL")

LPWSL primarily focuses on addressing the healthcare needs of customers by leveraging technology. During FY 2026, LPWSLs total income and total comprehensive income were Rs.1,922 Mn and 97 Mn, respectively, compared to Rs.1,449 Mn and 25 Mn in FY 2025.

IV. IIFL Management Services Limited ("IMSL")

IMSL act as a manager to AIFs. The Company is also engaged in the business of dealing in unlisted shares, stocks, debenture-stock, bonds, obligations or any other securities on its own account. During FY 2026, the total income and total comprehensive income/(loss) of IMSL were 435 Mn and (92) Mn, respectively, compared to 799 Mn and 297 Mn in FY 2025.

V. IIFL Capital Asset Management Limited (Formerly IIFL Securities Alternate Asset Management Limited) (ICAML)

ICAML acts as the Manager to AIFs and is registered with SEBI as an Investment Adviser and Portfolio Manager. Pursuant to the Business Transfer Agreement executed during the year, the Companys

PMS business was transferred to ICAML on a going-concern basis. During FY 2026, the total income and total comprehensive income/(loss) of ICAML were Rs.136 Mn and (Rs.10) Mn, respectively, compared to 26 Mn and (5) Mn in FY 2025.

Foreign/overseas subsidiaries VI. IIFL Capital Inc.

IIFL Capital Inc. is engaged in providing advisory and financial services. During FY 2026, the total income and total comprehensive income of IIFL Capital Inc. were Rs.148 Mn and 8 Mn, respectively, compared to Rs.184 Mn and 9 Mn in FY 2025.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with Section 129(3) of the Act, your Company has prepared the annual consolidated financial statements, consolidating its financials with its subsidiary companies. The annual audited consolidated financial statements have been prepared in compliance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India.

Pursuant to Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of subsidiary companies is provided in Form AOC-1, as ‘Annexure A of the Consolidated Financial Statements, and forms part of this Integrated Annual Report.

15. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report forms part of this Integrated Annual Report. The report provides a detailed overview of the Companys business performance, industry trends, opportunities and risks, and the outlook for the future.

16. ENVIRONMENT SOCIAL & GOVERNANCE (ESG) COMPLIANCE AND SUSTAINABILITY INITIATIVES

IIFL Capital recognises Environmental, Social and Governance (ESG) factors as integral to sustainable growth, effective risk management and long-term value creation. The Company continues to embed ESG principles across its business operations and decision-making processes, reflecting its commitment to responsible business practices and creating sustainable value for all stakeholders. To reinforce its commitment to sustainable and responsible business practices, the Company has adopted a comprehensive ESG Policy, approved by the ESG Committee and the Board of Directors. The Policy sets out the roles and responsibilities of the Board, the ESG Committee and the ESG team in driving the Companys sustainability agenda. It identifies key ESG focus areas, including Environment, Corporate Governance, Customer Relations, Employee Well-being, Corporate Social Responsibility and Information & Cyber Security. The Companys ESG performance is monitored through defined Key Performance Indicators (KPIs), with periodic updates submitted by relevant stakeholders to facilitate ongoing oversight and accountability. The ESG Policy is available on the Companys website at https:// files.iiflcapital.com/assets/Environment_Social_and_ Governance_ESG_Policy_6fb9955251.pdf In alignment with the nine principles of the National Guidelines on Responsible Business Conduct (NGRBC), the Company has also instituted a range of policies aimed at promoting responsible business practices. Additionally, an ESG Risk Register has been established to proactively identify, assess, and manage risks related to environmental, social, and governance matters.

During FY 2025, the Company undertook a comprehensive ESG materiality assessment, with the assistance of PwC, to identify and prioritise ESG matters that are most relevant to its business and stakeholders. The assessment incorporated inputs from key internal stakeholders, including senior management and employees, as well as external stakeholders such as customers, lenders, business partners, shareholders and investors. Based on the materiality assessment, the Company, during FY 2026, established targets to address the material ESG issues identified under the high-priority category. The Company has also made notable progress against these targets. Details of the targets and achievements are provided in the Business Responsibility and Sustainability Report (BRSR), which forms part of this Integrated Annual Report.

The Company has obtained ISO 14001:2015 certification for its Environmental Management System (EMS), and the successful completion of the surveillance audit reaffirmed its continued compliance with the standard. The Company also secured a ‘Strong ESG rating from CRISIL ESG Ratings & Analytics, reflecting its strong sustainability performance and governance practices, and reaffirming its commitment to responsible value creation for stakeholders.

To enhance transparency and credibility in its sustainability journey, the Company has integrated its ESG profile on the ESG World Platform, thereby strengthening stakeholder engagement and trust. The profile is publicly accessible and reflects the Companys ongoing efforts to benchmark, monitor and enhance its ESG performance.

The Company remains committed to advancing its sustainability agenda, fostering responsible corporate governance and creating long-term value for all stakeholders.

17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the BRSR for FY 2026 forms part of this Integrated Annual Report. The BRSR provides comprehensive disclosures on the Companys performance with respect to ESG parameters and includes reporting on the nine principles of NGRBC as prescribed by the Ministry of Corporate Affairs.

As part of its commitment to transparency, accountability and sustainable business practices, the Company has voluntarily obtained reasonable assurance on the applicable BRSR Core disclosures for FY 2026. The reasonable assurance report issued by Kirtane & Pandit LLP forms part of the BRSR and is included in this Integrated Annual Report.

18. DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors

The Company is steered by a well-diversified and experienced Board of Directors, whose collective expertise spans finance, accounting, technology, corporate governance and risk management. This wide-ranging knowledge base empowers the Board to provide robust strategic leadership, uphold the highest standards of corporate governance, and facilitate future-ready decision-making that aligns with the best interests of the Company and its stakeholders.

As on March 31, 2026, the composition of the Board was in compliance with the requirements of Section 149 of the Act and Regulation 17 of the SEBI Listing Regulations. The Board comprises an appropriate mix of Executive, Non-Executive and Independent Directors, including an Independent Woman Director serving as the Chairperson of the Board, thereby ensuring diversity, independence and balanced decision-making.

All Independent Directors have submitted declarations confirming their independence in terms of Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI Listing Regulations. Further, in compliance with Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs. In accordance with the SEBI Listing Regulations, the Board has identified the core skills, expertise, and competencies necessary for effective governance and oversight of the Companys business. The details of the Boards skill matrix, along with the profile of Directors, are provided in the Report on Corporate Governance forming part of this Integrated Annual Report.

A complete list of the Companys Directors is provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Changes in the composition of the Board of Directors

During the year under review, the Members of the Company approved the appointment of Mr. R. Venkataraman (DIN: 00011919) as the Managing Director and Key Managerial Personnel of the Company with effect from March 22, 2025, through a Postal Ballot on June 06, 2025, in accordance with the provisions of the Act, and the applicable provisions of the SEBI Listing Regulations. Mr. Anand Shailesh Bathiya (DIN: 03084831) was reappointed as a Non-Executive Independent Director of the Company for a second consecutive term of five years with effect from September 22, 2025. Further, Mr. Viswanathan Krishnan (DIN: 09026252) was re-appointed as a Non-Executive Independent Director of the Company for a second consecutive term of five years with effect from January 21, 2026. The aforesaid re-appointments were approved by the Members of the Company at the 30th Annual General Meeting ("AGM") held on September 16, 2025, in accordance with the provisions of the Act and the applicable provisions of the SEBI Listing Regulations.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Director appointed during the year

During the year, there was no new appointment of Independent Director on the Board of the Company.

Retirement by rotation

In accordance with the provisions of Section 152 of the Act and the Companys Articles of Association, Mr. R. Venkataraman (DIN: 00011919), Managing Director is liable to retire by rotation at the forthcoming AGM and being eligible, has offered himself for re-appointment. The Board recommends the proposal of his re-appointment for the consideration of the Members of the Company at the forthcoming AGM. This proposal has been included in the Notice convening the 31st AGM, along with a brief profile of Mr. Venkataraman.

Changes in KMPs

During the year under review, there was no change in the KMPs of the Company.

As on the date of this Report, the following officials are designated as KMPs of the Company in accordance with the provisions of the Act and the rules made thereunder, and the SEBI Listing Regulations: Mr. R. Venkataraman – Managing Director Mr. Narendra Jain – Whole-Time Director

Mr. Ronak Gandhi – Chief Financial Officer Ms. Meghal Shah – Company Secretary

Mr. Shanker Ramrakhiani – Chief Information Security Officer

19. MEETINGS OF BOARD/COMMITTEE

During FY 2026, the Board of Directors met six (6) times. The meetings of the Board and its Committees were conducted in compliance with the provisions of the Act, the SEBI Listing Regulations and the applicable Secretarial Standards issued by the Institute of Company Secretaries of India. Agenda papers and minutes were circulated within the prescribed timelines; however, in exceptional circumstances requiring urgent consideration, agenda papers were circulated and meetings convened at shorter notice, or approvals were obtained through resolutions passed by circulation, in accordance with applicable laws. All recommendations made by the Committees of the Board were accepted by the Board.

The details of the meetings of the Board and its Committees, including the attendance of Directors, are provided in the Report on Corporate Governance, which forms an integral part of this Integrated Annual Report.

20. COMMITTEE OF THE BOARD

As on March 31, 2026, the Board had the following Committees to assist it in the effective discharge of its responsibilities and to strengthen governance and oversight mechanisms: a) Audit Committee b) Nomination and Remuneration Committee c) Stakeholders Relationship Committee d) Corporate Social Responsibility Committee e) Risk Management Committee f) Finance Committee g) Independent Directors Committee h) ESG Committee i) Information Technology Committee

Changes during the year:

During the year under review, the Board approved the merger of the Cybersecurity Committee with the Information Technology Committee at its meeting held on November 07, 2025, in line with the regulatory framework governing information technology and cybersecurity oversight for the Company. Consequently, the Information Technology Committee was entrusted with overseeing both information technology and cybersecurity-related matters.

The details of the Board Committees, including their terms of reference, composition, number of meetings held during the year and attendance of members thereat, are provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

21. RISK MANAGEMENT

Effective risk management is essential for identifying, assessing, and monitoring potential threats and challenges across the organisation. In line with this, the Company has implemented robust measures, including a comprehensive Enterprise Risk Management ("ERM") Policy, which has been duly approved by the Risk Management Committee and the Board of Directors. This policy encompasses the identification, analysis, mitigation, and control of various risk categories to support the achievement of the Companys key business objectives.

The Companys ERM Policy is aligned with the Committee of Sponsoring Organisations of the Treadway Commission (COSO) 2017 ERM Framework. It covers a broad spectrum of risks, including Strategic Risk, Market Risk, Financial Risk, Fraud Risk, Legal Risk, Regulatory Risk, Operational Risk, Reputational Risk, ESG Risk, Technology Risk, Cyber/ Information Risk, and Third-Party Risk.

Your Company has adopted the ‘Three lines of defense as part of the risk governance structure. The following diagram illustrates it.

Roles and responsibilities of key stakeholders constituting the risk governance structure are as under: Role of Board of Directors: The Board of Directors is responsible for monitoring and overseeing the implementation of the ERM policy and practices.

Role of Risk Management Committee (RMC): RMC is responsible for formulation of the detailed ERM policy. ensures that appropriate methodology, processes and systems are in place to monitor and evaluate risk associated with the business of the Company. It monitors and oversees implementation of the ERM policy, including evaluating the adequacy of risk management systems. The appointment, removal, and terms of remuneration of the Chief Risk Officer is subject to review by RMC. The details of composition and meetings of RMC is provided in the Report on Corporate Governance, which forms part of this Integrated Annual Report.

Role of Chief Risk Officer (CRO): CRO is responsible for the overseeing the risk management activities. CRO periodically reviews the ERM Policy, monitors and oversees its implementation, process for systematic identification and assessment of all the risks and update RMC on the risks identified and the assessment and mitigation controls relating thereto. CRO conducts internal meetings with the Risk Owners/Functional Heads on ERM initiatives and updates the management on the progress/status of the same on a quarterly basis.

Risk governance structure and key roles & responsibilities

A strong risk governance structure can help ensure that an organisation is able to identify, assess, and respond to risk effectively. The structure is also intended to provide an effective system of checks and balances to ensure that the risk management practices are in compliance with the regulations and industry standards.

Role of Risk Management Department: The Risk Management Department is responsible for development and maintenance of overall risk management infrastructure. It facilitates implementation of the ERM policy and collates and reviews risk assessment prepared by the CRO/ Functional heads. It also maintains and update the risk register and creates awareness on the risk management process/ practices for the identified stakeholders periodically. Further, it reports risk and risk management measures to RMC. The Risk Management Department is responsible for ensuring compliance with regulations and continuously improving the risk management process. Role of Risk Owners/Functional Heads: Each Risk owner/Functional head is responsible for their respective risk i.e., risk identification, mitigation, implementation of the controls and any other matter relating thereto and update the Risk Management Department on the same. Further, Risk owner/Functional Head prepares a Risk Report advising on the results and residual risks and recommending further action.

Incident Management

The Company has a process to track and monitor the incidents occurred which covers its root cause analysis, and taking corrective and preventive measures thereon, thereby helping the Company to have a control over repetitiveness of the incidents. The Incident Report is also presented before the RMC for its review.

22. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and Regulation 17 read with Part D of Schedule II to the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual Directors.

The evaluation covered various aspects of the functioning of the Board and its Committees, including their composition, effectiveness, governance oversight, strategic guidance, participation and contribution of Directors, and overall Board processes.

The Independent Directors evaluated the performance of the Non-Independent Directors, the Chairperson of the Board and the Board as a whole. The Board also reviewed the performance of its Committees and independent Directors. The details of the evaluation criteria and process are provided in the Report on Corporate Governance, which forms an integral part of this Integrated Annual Report.

23. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Your Company has established and maintained robust internal financial controls over financial reporting, which are continuously evaluated and enhanced through the implementation of new and revised standard operating procedures. These internal financial control measures are designed to safeguard the Companys assets, prevent and detect fraud and errors, ensure the accuracy and completeness of accounting records, and enable the timely preparation of reliable financial information. Throughout the year, these controls have been operating effectively.

Further, the Statutory Auditors have confirmed that the internal financial control systems over financial reporting are adequate and the same is annexed with the Independent Auditors Report.

24. QUALITY INITIATIVES AND PROCESS IMPROVEMENTS

IIFL Capital remains committed to maintaining high standards of quality, information security, cyber resilience and business continuity. During FY 2026, the Company successfully completed the surveillance audits for ISO 27001:2022 (Information Security Management System) and ISO 22301:2019 (Business Continuity Management System) without any major non-conformities, reaffirming the effectiveness of its management systems and internal control framework.

During FY 2026, the Company continued to strengthen its technology and cyber security framework through enhanced governance, proactive monitoring, robust risk management practices and employee awareness programmes. The Company remained focused on information security, data privacy, cyber resilience and business continuity while further enhancing its digital capabilities and operational efficiency.

The Company continued to comply with applicable regulatory requirements relating to technology, information security, cyber security, business continuity and data privacy. It also progressed initiatives towards compliance with the Digital Personal Data Protection Act, 2023 and further strengthened its governance and risk management framework.

25. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your Company has adopted a Related Party Transactions Policy ("RPT Policy"), approved by the Board of Directors and updated from time to time. The Policy provides a comprehensive framework for the identification, approval, review, monitoring, reporting and disclosure of related party transactions in accordance with the provisions of the Act, the SEBI Listing Regulations and prevailing industry standards and governance practices. The RPT Policy is available on the Companys website at https:// files.iiflcapital.com/assets/Related_Party_Transaction_ Policy_08a864ccf4.pdf

In compliance with the provisions of the Act and the SEBI Listing Regulations, all related party transactions are placed before the Audit Committee for its review and approval. For transactions of a repetitive nature, omnibus approval is obtained on an annual basis, and the Audit Committee is provided with quarterly disclosures of all related party transactions for its review and noting.

All contracts and arrangements entered into with related parties during the financial year were in the ordinary course of business and on an arms length basis, in accordance with the Companys RPT Policy. During FY 2026, the Company entered into material related party transactions within the limits approved by the Members. Accordingly, the disclosure of related party transactions in Form AOC-2, as prescribed under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is not applicable. Details of related party transactions are disclosed in Note 36 and Note 44 to the Standalone and Consolidated Financial Statements, respectively.

Further, the Company has engaged an independent firm of Chartered Accountants to review and confirm compliance of related party transactions with the provisions of the Act, the Rules made thereunder, and the SEBI Listing Regulations. A certificate in this regard is submitted to the Audit Committee on a quarterly basis.

26. STATUTORY AUDITORS AND THEIR REPORT

Pursuant to the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, M/s. V. Sankar Aiyar & Co., Chartered Accountants (Firm Registration No. 109208W), continue as the Statutory Auditors of the Company and shall hold office until the conclusion of the 32nd AGM of the Company.

The Statutory Auditors have confirmed that they continue to satisfy the criteria of independence prescribed under the Act and have complied with the Code of Ethics issued by the Institute of Chartered Accountants of India.

The Report of the Statutory Auditors on the Standalone and Consolidated Financial Statements for FY 2026 forms part of this Integrated Annual Report. The Auditors Report does not contain any qualification, reservation, adverse remark, disclaimer, or emphasis of matter requiring any explanation from the Board.

27. SECRETARIAL AUDITORS AND THEIR REPORT

In accordance with the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of SEBI Listing Regulations, the Board of Directors, based on the recommendation of the Audit Committee, appointed M/s. Rathi & Associates, Practicing Company Secretaries, as the Secretarial Auditors of the Company for a term of five consecutive financial years commencing from FY 2026 to FY 2030. The Secretarial Audit Report is annexed as Annexure - 4. The Secretarial Auditors have not expressed any qualifications, reservations, or adverse remarks in their Report for the year under review. The Secretarial Auditor have mentioned the following event in their report: a. During the inspection of Merchant Banking activities, the Company has received an administrative warning for non-compliance of certain provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, SEBI (Merchant Bankers) Regulation, 1992 and SEBI (Prohibition of Insider Trading) Regulations, 2015 for (a) Non-updation of track record in one instance; (b) Failure to communicate through a person - centric email ID; (c) Delay in making entries in the Structured Digital Database in terms of Regulation 9 read with Schedule C of SEBI (Prohibition of Insider Trading) Regulations, 2015; (d) Failure to obtain login credentials for uploading offer documents; and (e) Lack of due diligence in one Initial Public Offer in violation of Regulation 24(3) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Management Response:

The corrective measures has been taken by the Company in relation to the rectification of the violations mentioned in the SEBI letter and shall continue to ensure strict adherence to applicable SEBI Regulations, Circulars, and compliance requirements.

28. MAINTENANCE OF COST RECORDS

Pursuant to the provisions of Section 148(1) of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the maintenance of cost records and requirement of cost audit are not applicable to the activities carried on by the Company.

29. REPORTING OF FRAUDS BY AUDITORS

During FY 2026, the Statutory Auditors and Secretarial Auditors of the Company have not reported any instance of fraud under Section 143(12) of the Act read with the Companies (Audit and Auditors) Rules, 2014.

30. ANNUAL RETURN

Pursuant to the provisions of Section 92(3) and

Section 134(3)(a) of the Act read with the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for FY 2026 is available on the Companys website and can be accessed at https:// www.iiflcapital.com/investor-relations/financials.

31. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURT OR TRIBUNALS

There were no significant or material orders passed by any Regulators, Courts, or Tribunals during the year that would impact the going concern status of the Company or its future operations.

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo are provided below:

a) Energy conservation

As the Company is primarily engaged in providing financial services, the information related to conservation of energy, as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is not applicable. However, the initiatives undertaken by the Company towards energy management are detailed in the BRSR, which forms part of this Integrated Annual Report.

b) Technology absorption

The Company continued to strengthen its technology capabilities during FY 2026 through focused investments in digital transformation, innovation and platform enhancement. Your Company remains committed to adopting best-in-class technologies across business, operations, and customer platforms, with enhancements in trading infrastructure, analytics, and user interfaces driving improved scalability, execution efficiency, and overall customer experience. Adoption of cloud-based infrastructure and low-latency systems has further enhanced the ability to efficiently manage high-volume market activity.

The Company has also reinforced platform resilience through robust investments in business continuity, disaster recovery readiness, and scalable infrastructure, ensuring high system reliability and uptime. In parallel, it continues to enhance in-house technological capabilities and introduce advanced features to deliver a seamless and differentiated trading experience. The Company remains focused on leveraging emerging technologies to drive innovation and support sustainable growth.

c) Foreign exchange earnings and outgo

The details of foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are as follows:

Particular	FY 2026	FY 2025
Earning in Foreign Currency	427	336
Expenses in Foreign Currency	410	403

33. WHISTLE BLOWER POLICY/VIGIL MECHANISM

In accordance with the provisions of Section 177(9) and 177(10) of the Act read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 22 of the SEBI Listing Regulations, the Company has implemented a Whistle Blower Policy and established a Vigil Mechanism for Directors, employees and other stakeholders to report genuine concerns relating to unethical behaviour, actual or suspected fraud, violation of the Companys Code of Conduct, or any other misconduct.

The Whistle Blower Policy provides adequate safeguards against victimisation of whistle blowers and ensures that concerns are investigated in a fair, transparent and confidential manner. It also provides for direct access to the Chairperson of the Audit Committee in appropriate and exceptional cases.

The Company affirms that during the year under review, no person was denied access to the Audit Committee. Further details of the Vigil Mechanism are provided in the Corporate Governance Report forming part of this Integrated Annual Report. The Policy is available on the Companys website at https://files.iiflcapital.com/assets/ Whistle_Blower_Policy_21_6845f5e625.pdf

34. CORPORATE GOVERNANCE

Your Company is committed to maintaining the highest standards of corporate governance and has complied with the applicable requirements of the Act and the SEBI Listing Regulations.

Pursuant to Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed Report on Corporate Governance forms part of this Integrated Annual Report. The requisite certificate from the Secretarial Auditor confirming compliance with the conditions of Corporate Governance as stipulated under the SEBI Listing Regulations is annexed to the Corporate Governance Report and forms part of this Integrated Annual Report.

35. DIRECTORS RESPONSIBILITY STATEMENT

In compliance with Section 134(5) of the Act, the Directors of your Company, to the best of their knowledge and ability, confirm that: a) the applicable accounting standards have been followed in the preparation of the annual accounts and that there are no material departures; b) such accounting policies have been selected and applied consistently and judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the profit of the Company for the year ended on that date; c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act to safeguard the assets of the Company and to prevent and detect fraud and other irregularities; d) the annual accounts have been prepared on a ‘going concern basis; e) 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 f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

36. OTHER DISCLOSURES

As no application has been made under the Insolvency and Bankruptcy Code, 2016, the requirement to disclose details of any application made or proceedings pending under the Code, along with their status as of the end of the financial year, is not applicable.

The requirement to disclose the difference between the valuation done at the time of a one-time settlement and the valuation done when taking loans from Banks or Financial Institutions, along with the reasons, is not applicable. The requirement to disclose details regarding the non-exercising of voting rights in respect of shares purchased directly by employees under a scheme, pursuant to Section 67(3) of the Act read with Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014, is also not applicable.

The Company has not accepted or renewed any deposits as per the provisions of Section 73 of the Act and the rules made thereunder. Therefore, no principal or interest amount was outstanding as of the Balance Sheet date.

37. APPRECIATION

Your Directors place on record their sincere appreciation for the dedication, commitment, and contributions of employees across all levels of the organisation, whose efforts have been instrumental in the Companys continued growth and success.

Your Directors also express their gratitude to the Companys customers, shareholders, investors, bankers, business partners, and other stakeholders for their continued trust and support. The Board further acknowledges the guidance and cooperation received from various regulatory and statutory bodies and looks forward to their continued support in the years ahead.

	For and on behalf of the Board
	Rekha Gopal Warriar
Date: July 23, 2026	Chairperson and Independent Director
Place: Pune	DIN: 08152356