industrial investment trust ltd share price Directors report


Dear Shareholders,

Your Directors are pleased to present the Ninetieth Annual Report of the Company, together with the Audited Statements of Accounts for the year ended March 31, 2023.

Financial Performance

The summarized standalone and consolidated results of your Company and its subsidiaries are given in the table below.

Rs in ‘000

Particulars

Financial Year ended
Standalone Consolidated
31/03/2023 31/03/2022 31/03/2023 31/03/2022
Total Income 1,59,220.39 72,565.39 1,77,484.50 90,092.52
Profit/(loss) before Interest, 5,22,597.86 55,344.32 4,75,088.20 55,528.08
Depreciation & Tax (EBITDA)
Finance Charges 1,806.49 2,546.67 1,390.46 2,336.38
Depreciation 9,403.55 9,344.05 9,715.12 9,754.97
Exceptional Items - (10,39,500.00) - 7,16,505.58
Net Profit / (Loss) before tax for the year 5,11,387.82 (9,96,046.40) 5,21,993.34 3,56,314.93
Provision for Tax (including for earlier years) / Deferred Tax 81,450.21 (15.28) 81,504.71 1,718.04
Share in Profit / (Loss) for
Associate/Joint Ventures for the year - - 58,010.72 (4,03,627.38)
Net Profit/(Loss) After Tax 4,29,937.61 (9,96,031.12) 4,40,488.63 3,54,596.89
Other comprehensive income for the year 260.13 1,168.50 295.70 1,235.00
Total Comprehensive income for the year 4,30,197.74 (9,94,862.62) 4,40,784.33 3,55,831.89
Profit/(Loss) brought forward from previous year (17,95,663.25) (8,00,800.63) (19,15,120.85) (22,40,765.26)
Share in Profit / (Loss)
Attributable to Minority interest - - (8,369.53) 30,187.48
- Other Comprehensive income/ (expenses) attributable - - - -
Items of other comprehensive income recognized directly in retained earnings: - Remeasurements of post- employment benefit obligation, net of tax - - - -
Profit / (Loss) carried to
Balance Sheet (13,65,465.51) (17,95,663.25) (14,65,966.99) (19,15,120.85)
From this, the Directors have transferred to:
Special Reserve 85,986.34 - 85,986.34 -
General Reserve - - - -
Capital Redemption - - - -
Reserve
Leaving a balance to be carried forward (14,51,451.85) (17,95,663.25) (15,51,953.33) (19,15,120.85)

* includes impact on new Indian Accounting Standard application.

Previous year figures have been regrouped / rearranged wherever necessary.

Indian Accounting Standards

The Company has adopted Indian Accounting Standards (IND AS) from the FY 2018-19 and has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014.

Results of operations and state of Companys affairs

During the year, the Company has earned pre-tax Profit of

Rs 5113.88 lakhs as compared to pre-tax loss of RS 9960.46 lakhs in the previous year. The total Income during the year was Rs 1592.20 lakhs as compared to Rs 725.65 lakhs in the previous year.

During the current year the company has rectified the presentation and disclosure relating to the notional interest and impairment in fair value of investments in preference shares in Associates, in accordance with Ind AS 8, read with Ind AS 27. However, this does not have any impact on the profits / losses determined in the previous periods, networth and the carrying amount of the investments. Net gain on fair value changes for the above transaction in the current year is Rs 59.03 lakhs compared to previous year of Rs 354.35 lakhs.

The Reserve Bank of India (RBI) vide its letter dated June 25, 2018 has prohibited the Company from expanding its credit / investment portfolio other than investment in Government Securities till Net NPAs are brought down to below 5%. During the year under review, the Company has entered into One

Time Settlement with the Joint Ventures of the subsidiary Company, IITL Projects Limited and have recovered all outstanding loans granted to the Joint Ventures. Subsequent to that, the NPAs have become NIL.

As per the directions issued by RBI, the Company has deployed the funds amounting to Rs 225 crores received from the sale of equity stake of Future Generali in Government Securities.

The Company has informed RBI regarding its investment in G secs and have made necessary submissions to RBI with regard to their Supervisory Concerns.

Business Overview

The Company is registered with Reserve Bank of India (RBI) as a Non-Deposit taking Non- Banking Financial Company (NBFC). It is a ‘Systemically Important Non-Deposit taking NBFC. It is primarily a Holding Company, holding investments in its subsidiaries and other group Companies and joint ventures. The activities of the Company comprises of Investment in equity shares quoted as well as unquoted, units of mutual funds, Fixed deposits with renowned Banks, Government Securities (G secs), Inter-Corporate Deposits and Loans to its Group Companies / entities. The Committee of Investments / Loans is entrusted with the power to make investments and grant loans and the Board of Directors is apprised of the investments of the Company and monitors the deployment of resources on regular basis.

The details of the Companys investments and analysis of securities held are given in Note 7 to the Balance Sheet as on March 31, 2023. The loans to subsidiaries and other entities within the group and interest income are disclosed in Note 6 and Note 19 to the

Balance Sheet and Statement of Profit and Loss respectively as on March 31, 2023.

Material changes and commitments occurred after the close of the financial year till date of this report which affects the financial position of the Company

a) Sale, disposal and leasing of assets exceeding 20% of the assets of the material subsidiary of the Company, IITL Projects Limited

The Company has received a Letter dated August 11, 2023 from the subsidiary company, IITL Projects Limited (IITLPL). Vide said Letter, IITL Projects Limited has informed the Company that the other Joint Venture Partner viz. Nimbus Projects Limited of (i) IITL Nimbus - Express Park View (EPV-II); and (ii) IITL

Nimbus The Palm Village (Palm Village), the Joint Venture Firms, have requested the Company that since IITLPL could not make additional capital contribution, it may exit from the Joint Ventures.

As per SEBI (LODR) Regulations, 2015, "material subsidiary" shall mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. In line with the Policy for determining Material subsidiaries and based on the Audited Financials of previous financial year 2022-2023, IITL Projects Limited is a material subsidiary of the Company.

The Management of IITLPL is desirous of exiting from the two Joint Venture Firms.

The said proposal is being placed at the ensuing Annual General Meeting for the approval of the shareholders under Regulation 24(6) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

b) Sale of the Equity and Preference Shares investment held by the Company in the Associate Company, World Resorts Limited to Nimbus (India) Limited, one of the Shareholders of World Resorts Limited World Resorts Limited is in the business of hospitality and owns and operates a Deluxe Five Star Resort by the name Golden Palms Hotel and Spa at Off. Tumkur Road, Bangalore.

The Company had made investment of RS15.52 crores for acquiring 1,30,18,125 equity shares equivalent to 25% of equity share capital of World Resorts Limited (WRL), an unlisted public company. The face value of the said equity shares is Rs 13.02 crores. As on date the full value of investment into equity totalling to RS 15.52 crores are impaired in the books of IITL. The face value is Rs 13.02 crores. Consequent to the Rights Issue raised by WRL, the Companys Equity stake diluted from25.00% to 24.62%.

The Company also holds 1,00,00,000 preference shares (face value RS 10/- and premium paid is RS 40/- per share totaling to Rs 50 crores) constituting 67.23 % of the preference capital of WRL.

The Company has received a letter dated August 07, 2023 from Nimbus (India) Limited for acquiring our investment in the Equity and Preference share capital of World Resorts Limited. Nimbus (India) Limited has proposed the following offer:

1. Nimbus (India) Limited to remit a sum of Rs 50.00 crores, being the Companys original purchase value of preference capital;

2. Nimbus (India) Limited to remit a sum of Rs 15.52 crores, being the Companys original capital purchase value of equity capital;

3. Nimbus (India) Limited to remit 10% of the total consideration amount i.e., Rs 655.20 lakhs within 15 days from the date of receipt of formal approval of the Board. On payment of the 10% of the total consideration, proportionate equity / preference shares will be transferred by the Company to Nimbus (India) Limited;

4. A definitive and binding agreement (Share Purchase Agreement / Binding Term-Sheet / MOU) specifying the warranties / confirmations / assurances needed from the parties for carrying out the subject transaction would be executed between the Parties immediately after the shareholders approval; and

5. Once the shareholders approval is received, Nimbus (India) Limited to remit the balance 90% of the consideration amount, in one or more tranches, on or before March 31, 2024. On transfer of the balance 90% in one or more tranches, proportionate equity / preference shares will be transferred by the Company to Nimbus (India) Limited.

The Management is desirous of exiting from the Associate Company in view of continuous losses incurred by it. The hospitality and travel industry were most hard-hit by COVID-19. The lockdown to contain spread of COVID-19 in the country had disastrous impact on the hospitality sector, particularly for hotels and hoteliers. The hotels are businesses that are very capital intensive and even have very high fixed charges. The associate company has incurred immense losses during last few years.

Over the years, WRL has not been able to pay any dividend and the investee companies had to impair their assets in compliance with the Accounting Standards. The Hotel is in need of urgent renovation / upgradation of the rooms which will need capital infusion.

The said proposal is being placed at the ensuing Annual General Meeting for the approval of the shareholders.

Dividend

Your Directors regret to inform you that the Company has not recommended any dividend for the financial year 2022-2023.

Management Discussion and Analysis

Management Discussion and Analysis comprising an overview of the financial results, operations / performance and the future prospects of the Company forms part of this Annual Report.

Change in Capital Structure

During the year, the Company has not issued any shares or convertible securities. The Company does not have any Scheme for issue of shares including sweat equity to the employees or Directors of the Company.

As on March 31, 2023, the issued, subscribed and paid up share capital of your Company stood at 22,54,75,500/-, comprising 2,25,47,550 Equity Shares of 10/- each.

Extract of Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website on https://iitlgroup.com/newStatic/Reports/ Annual-Return-2022-23.pdf

Compliance with Secretarial Standards

The Board of Directors affirm that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (SS1 and SS2 respectively) relating to Meetings of the Board and its Committees which have mandatory application.

Consolidated Accounts

The Consolidated Financial Statements of your Company for the financial year 2022-23, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and the Listing Regulations. The Consolidated Financial Statements have been prepared on the basis of audited financial statements of the Company, its subsidiaries, associate and joint venture companies, as approved by their respective Board of Directors.

Subsidiary, Associate and Joint Venture Companies

Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient features of the financial statement of companys subsidiaries, associate and joint venture entities of the subsidiary company is given as Annexure 1.

Brief particulars about the business of each of the Subsidiaries and

Joint Venture / Associate Companies is given hereunder:-

Subsidiary Companies:

a. IIT Investrust Limited (IITIL)

The subsidiary company, IITIL was into Stock Broking and Depository business. In June 2019, IITIL had applied for Surrender of membership of Stock Broking business and Depository Participant business. Upon surrender, IITIL ceased to be the Stock Broker as well as Depository Participant. Besides that, IITIL is into the business of providing Advisory and Consultancy services to Body Corporates.

The total income of the subsidiary company for the year ended on March 31, 2023 is Rs 40.50 lakhs as compared to Rs 37.85 lakhs in the previous year. The pre-tax loss for the year ended March 31, 2023 is Rs 503.34 lakhs as against the pre-tax profit of Rs 16.24 lakhs for the preceding year. The Pre-Tax loss in the current year is majorly because of fair value change in the investment in preference shares of the World Resorts Limited.

b. IITL Projects Limited - (IITLPL)

IITLPL is listed on BSE Limited.

IITLPL is engaged in Real Estate business, construction of residential complex in the National Capital Region (NCR). It has acquired a plot of land on long term lease, under Builders Residential Scheme (BRS) of the Greater Noida Industrial Development Authority (GNIDA). Apart from constructing its own project, IITLPL is also engaged in construction of residential flatsthrough Special Purpose Vehicles (SPVs) and these SPVs have been allotted plots of land on long term lease, under Builders Residential Scheme (BRS) of the New Okhala Industrial Development Authority (NOIDA) and Yamuna Expressway Authority (YEA). The total lease hold area allotted to the Company alongwith SPVs is around 2,65,000 sq. meters and the projects are under various stages of construction.

Projects developed by the Company:

Express Park View I: This project is completed and most of the flats have been allotted to the buyers.

Projects being developed by the Company jointly with SPVs:

1) The Hyde Park

2) The Golden Palms

3) Express Park View-II:

The firm 7 of the 10 has towers under construction in Phase I. For the remaining three towers, Firm has already applied for Completion

Certificate. The Project comprises of total no. of 1320 flats out of which 1199 flats has been sold out till March, 2023.

It has also completed the construction of a commercial complex containing 39 units, in Phase II in the name of "The Park Street" which are 100% sold out till March 31, 2023. for The Firm has already applied for Completion Certificate the same with the GNIDA.

The Firm has undertaken construction of low rise apartments, as Phase III, under the name and style of THE EXPRESS PARK VIEW-II LOW RISE APARTMENTS". It is proposed to construct 310 flats in RERA registration is complete and the construction work has begun.

4) The Golden Palm Village:

Yamuna Expressway Industrial Development Authority ("YEIDA") has handed over the physical possession of plot admeasuring 47,776.52 sq.mtrs to the firm. The firm has finalized the lay out plan of its upcoming Group Housing Project to be launched in the name of "THE PALM VILLAGE- AEROCITY" consisting of total 702 studio apartments, 376 low rise apartments and 44 commercial apartments.

The Total Income of IITL Projects for the year ended on March 31, 2023 is Rs 729.26 lakhs as compared to Rs 1,971.10 lakhs in the previous year. Decrease in total income is on account of reduction of share of profit from joint venture partnership firms compared to previous year.

On consolidated basis, the income of the Company increased to Rs 148.86 lakhs as compared to Rs 122.95 lakhs in the previous year and loss before tax accounted to Rs 298.83 lakhs in the current year as compared to previous year profit of Rs 1,065.71 lakhs. The reason for change in profit (loss) before tax is impairment provision made for one of the SPVs and reduction of share of profit from joint venture partnership firms compared to previous year.

c. IITL Management and Consultancy Private Limited (formerly known as IIT Insurance Broking and Risk Management Private Limited)

The subsidiary company, IIT Insurance Broking and Risk Management Private Limited (IIT Insurance) was in the business of Direct Insurance Broking (Life and Non-Life). During the year 2019-20, IIT Insurance had applied to Insurance Regulatory and Development Authority of India (IRDAI) for voluntary surrender of the Broking License (Life and Non-Life). IRDAI vide its letter dated June 17, 2021 granted approval for voluntary surrender of Certificate of Registration.

Subsequently, IIT Insurance changed its name to IITL Management and Consultancy Private Limited and also changed its Object Clause. The same were approved by Ministry of Corporate Affairs. Consequent to this, IIT Insurance ceased to be an Insurance Broker.

The subsidiary companys total revenue for the financial year ended March 31, 2023 is Rs 8.28 lakhs comprising Interest on Bank Deposits of Rs 8.14 lakhs and other Income of Rs 0.14 lakhs as compared to the total revenue of Rs 8.48 lakhs during the previous year. The pre-tax loss for the year ended March 31, 2023 is Rs 3.91 lakhs as against the pre-tax profit of Rs 4.61 lakhs for the preceding year.

d. IITL Corporate Insurance Services Private Limited (IITL Corporate Insurance)

IITL Corporate Insurance Services Private Limited (IITL Corporate Insurance) was incorporated in the year 2014.

The Company did not commence any business and applied to Ministry of Corporate Affairs for removal of its name from the Register of Members. IITL Corporate Insurance Services Private Limited has been struck off from the Register of Companies w.e.f. August 23, 2021 and the Company stands dissolved.

Joint Venture / Associate Companies:

a. Future Generali India Life Insurance Company Limited (FGILICL), a Joint Venture:

In the year 2013, the Company had made an investment of Rs 340 Crores in Future Generali India Life Insurance Company Limited to acquire 22.5% of its equity capital. Subsequent to the acquisition, FGILICL became a joint venture of the Company. FGILICL made several Rights Issues. The Company did not participate in any of the Rights Issue, due to which the companys stake reduced to 16.62%. Since couple of years, the Company had been exploring to divest its stake in FGILICL. In December 2021, the Company received offer from Generali Participations Netherlands N.V. (Generali), one of the Joint Venture partners of FGILICL, to acquire Equity holding of 16.62% (equivalent to 32,67,00,000 equity shares) at a total consideration of 225 crores. On December 18, 2021, the Company entered into Share Purchase Agreement with Generali.

Upon receiving approvals from Insurance Regulatory and Development Authority of India (IRDAI), Registrar of Companies, Competition Commission of India (CCI), Reserve Bank of India, Shareholders and all other statutory / regulatory authorities, the transaction was consummated on March 28, 2022.

b. World Resorts Limited (WRL), an Associate Company:

WRL is into the business of hospitality and owns and operates a Deluxe Five Star Resort by the name "Golden Palms Hotel & Spa", Off. Tumkur Road, Bangalore. The hospitality industry were hard-hit by COVID-19. WRL also incurred immense losses in the last couple of years.

Internal financial controls and their adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

M/s Sheetal Patankar & Co., Chartered Accountants, a consulting / audit firm were appointed for determining the adequacy and operating effectiveness of the existing Internal Financial Controls over Financial Reporting of the Company on behalf of the management.

They have observed that there are no material weaknesses in the financial controls of the Company. Based on the above, management believes that adequate internal financial controls exist in relation to its Financial Statements. The operating staff are complying with the requirements.

Directors and Key Managerial Personnel

There was no change in Directorship during the year under review. As on date, Dr. Bidhubhusan Samal, Mr. Bipin Agarwal, Mr. Venkatesan Narayanan, Mr. Milind Desai, Ms. Sujata Chattopadhyay and Mr. Shankar Narayan Mokashi are the Directors of the Company.

Appointment

Based on the recommendation of the Nomination and Remuneration Committee and approval of Audit Committee, the Board of Directors appointed Mr. Ajit Kumar Mishra as Group Chief Financial of the Company as well as designated him as "Key Managerial Personnel" (KMP), pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, w.e.f.

February 17, 2023.

Based on the recommendation of the Nomination and Remuneration

Committee, the Board of Directors appointed Mr. Rajev Adlakha as Chief Executive Officer - NBFC Operations of the Company as well as designated him as "Key Managerial Personnel" (KMP), pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, w.e.f. February 14, 2023.

Re-appointment of Director retiring by rotation

In terms of the provisions of the Act, Mr. Shankar Narayan Mokashi, Director retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment. The necessary resolution for re-appointment of Mr. Shankar Narayan Mokashi forms part of the Notice convening the Annual General Meeting scheduled to be held on September 22, 2023.

The profile and particulars of experience that qualify Mr. Shankar Narayan Mokashi for Board membership, are disclosed in the said Notice.

Resignation

Mr. Kamlesh Agrawal tendered his resignation from the post of Chief Financial Officer and KMP of the Company from the close of the business hours on February 16, 2023. effectively; Mr. Ajit Kumar Mishra tendered his resignation from the post of Chief Financial Officer and KMP of the Company with effect from the close of the business hours on September 25, 2023.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel of the Company are Dr. Bidhubhusan Samal, Executive Chairman, Mrs. Cumi Banerjee, Chief Executive Officer (Secretarial, Legal and Admin) and Company Secretary, Mr. Ajit Kumar Mishra, Group Chief Financial Officer and Officer - NBFC Operations.

Familiarisation Programme

The Company conducts suitable familiarisation programme for Independent Directors so as to associate themselves with the nature of the industry in which the Company operates and business model of the Company in addition to regular presentations on financial statements and other relevant data. In addition to the above, Directors are periodically advised about the changes effected in the Corporate Law, Listing regulations and RBI regulations with regard to their roles, rights and responsibilities as Directors of the Company.

The details of the familiarisation programme have been disclosed and updated from time to time on the Companys website and its weblink is http://www.iitlgroup.com/newStatic/AboutUs.aspx.

Meetings of the Board

Seven meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance.

Directors Responsibility Statement

Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief, make following statements that:

(a) In preparation of the annual accounts for the year ended

March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

(b) Such accounting policies have been selected 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 as at March 31, 2023 and profit of the Company for the year ended on that date;

(c) Proper and sufficient of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts have been prepared on a going concern basis;

(e) The proper internal financial controls were in place and that such internal financial controls are adequate and were operating

(f) The systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Corporate Governance

Your Company has been practicing the principles of good Corporate Governance over the years and it is a continuous and ongoing process. A detailed Report on Corporate Governance practices followed by your Company as prescribed by SEBI in Chapter IV read with Schedule V of Listing Regulations together with a Certificate Mr. Rajev Adlakha, Chief Executive from M/s Chandanbala Jain & Associates, Practicing Company Secretaries confirming compliance with the conditions of Corporate

Governance are provided separately in this Annual Report.

Declaration by Independent Directors

The Company has received declarations from all the Independent Directors of the Company, confirming that, they meet the criteria of independence as prescribed both under Section 149(7) of the Companies Act, 2013 and Regulation 16(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, the Independent Directors of the Company have registered themselves with Indian Institute of Corporate Affairs for empanelment in the databank of Independent Directors.

Policy on appointment and remuneration for Directors, Key Managerial Personnel and senior management employees

The Board of the Directors has framed the policy which lays down a framework in relation to Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration Policy is uploaded on the Companys weblink viz. http://www.iitlgroup.com/newStatic/ Nomination_Remuneration_Policy.pdf.

The Company has formulated a Succession Planning Policy for Directors and Key Senior management of the Company for continuity and smooth functioning of the Company.

Related Party Transactions

The Company has laid down a Related Party Transaction (RPT) Policy for purpose of identification and monitoring of such transactions. The policy on Related Party Transaction as approved by the Board is uploaded on the Companys weblink viz. http://www.iitlgroup.com/newStatic/POLICY_on_materiality_of_ Related_Party_Transactions_Aug_2023.pdf

All Related Party Transactions are placed before the Audit Committee and also the Members / Board for their approval, wherever necessary.

The details of the related party transactions as per Indian Accounting Standard 24 are set out in Note 36 to the Standalone Financial Statements forming part of this report.

All RPTs entered during the financial year by the Company are in ordinary course of business and on an arms lengthfrom thebasis. Particulars of material contracts or arrangements made with related parties referred to in Section 188(1) of the Companies Act, 2013, in the prescribed Form AOC-2, is appended as Annexure 2 to the Directors Report.

Corporate Social Responsibility (CSR)

The Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR Policy is disclosed on the Companys website http://www. iitlgroup.com/newStatic/Corporate_Social_Responsibility_Policy.pdf

The provisions relating to CSR enumerated under Section 135 of the Companies Act, 2013 are not applicable to the Company during the year under review. Hence, the Annual Report on CSR is not attached to this Report.

However, the applicable provisions will be complied within the next financial year 2023-2024 as per the eligibility.

Secretarial Audit

Pursuant to provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s.evaluates, analyses and prioritise risks Chandanbala Jain & Associates, Practicing Company Secretaries (CP No. 6400), to undertake the Secretarial Audit of the Company.

The Secretarial Audit Report is included as Annexure 3 and forms an integral part of this report. The Secretarial Audit Report does not contain any qualifications or reservations. The observations made in the report are self-explanatory.

Annual Secretarial Compliance Report

M/s. Chandanbala Jain & Associates, Practicing Company Secretaries (CP No. 6400) have submitted Annual Secretarial Compliance Report for the financial year 2022-23 for all applicable compliances as per Securities and Exchange Board of India Regulations and Circulars / Guidelines issued thereunder and the same was submitted to stock exchanges within the permissible time limit.

Particulars of Loans given, Investments made, Guarantees given and Securities provided

The provisions of Section 186 of the Act pertaining to investment and lending activities is not applicable to the Company, since the Company is a Non-Banking Financial Company whose principal business is acquisition of securities.

Details of guarantees and/or security in connection with loans to other bodies corporates or persons as covered under the provisions of Section 186 of the Act, are given in the Notes to the Financial Statements.

Capital Adequacy Ratio

Your Companys Capital to Risk Assets Ratio (CRAR) calculated in line with Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 ("RBI Directions") stood at 769.00% above the regulatory minimum of 15%. Your Companys asset size is Rs 360.03 crores. of the The Company has received a certificate Company, Maharaj N R Suresh and Co LLP, Chartered Accountants, pursuant to Non-Banking Financial Companies Auditors Report (Reserve Bank of India) Directions, 2008 confirming compliance of the conditions with respect to Systemically Important Non-Deposit taking Non-Banking Financial Companies.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(A) Conservation of energy: Not Applicable

(B) Technology absorption: Not Applicable

(C) Foreign exchange earnings and Outgo: During the year under review, the Company did not earn income in foreign exchange as well as did not incur any expenditure in foreign exchange.

Risk Management

The Company has formulated a Risk Management Policy. The Company has formed a separate Risk Management Committee order to whichidentifies, address and minimize such risks. This facilitates identifying high level risks and implement appropriate solutions for minimizing the impact of such risks on the business of the Company. The Committee submits its recommendations and comments for Boards review and necessary action.

Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism / Whistle Blower Policy to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Companys code of conduct.

The details of the Vigil Mechanism policy have been provided in the Corporate Governance Report and also disclosed on the website of the Company viz http://www.iitlgroup.com/newStatic/Vigil_Mechanism_Whistle_Blower_Policy.pdf

Evaluation of the Board, its Committees and individual Directors

The Nomination and Remuneration Policy of the Company empowers the Nomination and Remuneration Committee to formulate a process for evaluating the performance of Directors, Committees of the Board and the Board as a whole.

The process for evaluation of the performance of the Director(s) / Board / Committees of the Board for the financial year 2022-2023 was initiated by the Nomination and Remuneration Committee, by sending out questionnaires designed for the performance evaluation of the Directors, Committees, Chairman and the Board as a whole. The Committee also forwarded their inputs to the Board for carrying out the Performance Evaluation process effectively.

In terms of provisions of Companies Act, 2013 and Schedule II - Part D of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carried out the annual performance evaluation of its own including the various Committees and individual Directors with a detailed questionnaire covering various aspects of doubt on the the Boards functioning like, composition of Board and its Committees, Board culture, performance of specific duties and obligations.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated. Based on the feedback received from the Independent Directors and taking into account the views of Executive Directors and the Non-Executive Directors, the Board evaluated its performance on various parameters such as composition of Board and its committees, experience and competencies, performance of duties and obligations, contribution at the meetings and otherwise, independent judgment, governance issues, effectiveness of flow of information.

Auditors and Auditors Report

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules made thereunder, Maharaj N R Suresh and Co LLP, Chartered Accountants, registered with the Institute of Chartered Accountants of India under Firm registration No. ICAI FRN No. 001931S / S000020, have been appointed as the Statutory Auditors of the Company for a term of five years starting from the conclusion of 89th Annual General Meeting held on September 24, 2022 till the conclusion of the 94th Annual General Meeting of the Company to be held in the year 2027. Maharaj N R Suresh and Co LLP, Chartered Accountants, have carried out Statutory Audit and the Notes on financial statement referred to in the Auditors Report issued by them are self-explanatory and hence do not call for any further comments under Section 134 of the Act. However, the Auditors Report on the Audited Financial Results (Standalone and Consolidated) contains audit qualifications, as detailed hereunder:

Details of Audit Qualification (Standalone):

The subsidiary llTL Projects Limited being a listed entity has made provision for differences in the quoted fair value of the investments and its carrying amount in the books of the Company as required by Ind AS 27 read with lnd-AS 113. However, as stated in note no 3(i) of the Statement regarding investment in its subsidiary IlTL Projects Limited, the financials result of the subsidiary have been prepared on a going concern basis, although the subsidiary company is incurring continuous losses and its net worth is negative as on March 31, 2023. In view of the adverse cash flows of the Joint Ventures (JVs) namely IITL Nimbus, The Hyde Park Noida, IITL-Nimbus The Express Park View, IITL- Nimbus The Palm Village and Capital lnfra Projects Limited their ability to continue as a going concern is doubtful. Based on the financial statement of joint venture as well as estimated cash flow, the investment in three joint ventures namely IITL-Nimbus Express Park View, llTL -Nimbus The Hyde Park and Capital infra Projects are fully impaired and recognised. Further as at March 31, 2023, the accumulated losses of subsidiary is 6,047.06 lakhs exceeds the paid up equity capital and accordingly the net worth of the Subsidiary stands fully eroded. The current liabilities of the Company exceeds its current assets and non-current liabilities dues towards redeemable preference shares is more than the estimated realizable value of the other non-current assets. These conditions indicate the existence

Subsidiary of uncertainty that may cast significant ability to continue as a going concern. The ultimate outcome of the above is not ascertainable at present and hence we are unable to comment on the consequential impact, if any on the accompanying Financial Statements.

Managements Views:

The Management is seized of the matter that the net worth of the subsidiary company is completely eroded. In the light of the above, the subsidiary Company is exploring options to infuse funds or exiting loss making JVs to reduce any further losses. One of the JVs, IlTL Nimbus Palm Village has commenced its Project and the Management is closely monitoring the development of the same and its impact on the cash flows. One of the JVs, llTL Nimbus The Express Park View projects is under progress and its cash flow will depend upon the market condition.

The ultimate outcome of the above is not ascertainable at present and hence we are unable to estimate the impact.

Details of Audit Qualification (Consolidated):

The subsidiary being a listed entity the company made provision for differences in the quoted fair value of the carrying amount in the books of the Company as required by lnd AS 27 read with lnd-AS 113. However, as stated in note no 3(i) of the Statement regarding investment in its subsidiary IlTL Projects Limited. The financialsresult of the subsidiary have been prepared on a going concern basis, although the subsidiary company is incurring continuous losses and its net worth is negative as on March 31, 2023. In view of the adverse cash flows of the Joint Ventures (JVs) namely IITL-Nimbus, The Hyde Park Noida, IITL-Nimbus The Express Park View, IITL- Nimbus The Palm Village and Capital lnfra Projects Limited their ability to continue as a going concern is doubtful. Based on the financial statement of joint venture as well as estimated cash flow, the investment in three joint ventures namely IITL-Nimbus Express Park View, IlTL -Nimbus The Hyde Park and Capital infra Projects are fully impaired and recognised.

Further as at March 31, 2023 the accumulated losses of subsidiary Rs 6,079.83 lakhs exceeds the paid up equity capital and the net worth of the Subsidiary stands fully eroded. The current liabilities of the Company, exceeds its current assets and non-current liabilities dues towards redeemable preference shares is more than the estimated realizable value of the other non-current assets. These .mca.gov.in). conditions indicate the existence of uncertainty that may cast significant doubt on the Subsidiary ability to continue as a going concern. The ultimate outcome of the above is not ascertainable at present and hence we are unable to comment on the consequential impact if any on the accompanying Financial Statements

Managements Views:

The Management is seized of the matter that the net worth of the subsidiary company is completely eroded. In the light of the above, the subsidiary Group is exploring options to infuse funds or exiting loss making JVs to reduce any further losses. One of the JVs, IlTL Nimbus Palm Village has commenced its Project and the

Management is closely monitoring the development of the same and its impact on the cash flows. One of the JVs, llTL Nimbus The Express Park View projects is under progress and its cash flow will depend upon the market condition.

The ultimate outcome of the above is not ascertainable at present and hence we are unable to estimate the impact.

Significant and material orders passed by the regulators

During the period under review, there were no significant and material orders passed by the regulators/ courts or tribunals that would impact going concern status of the Company and its future operations.

Transfer of Dividend amounts to Investor Education and Protection Fund

In terms of Rule 5(4) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, a sum of 3,92,808/- lying with the Company as unclaimed dividend for the year 2014 - 2015 i.e. for a period of seven years from the date they became due for payment, were transferred during the period under review to the Investor Education and Protection Fund. Pursuant to Rule 5(8) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has filed amounts lying with the Company as on March 31, 2022 with the

Ministry of Corporate Affairs and have uploaded the said details on the website of the Company viz.www.iitlgroup.com and the website of the Ministry of Corporate Affairs

Transfer of Equity Shares to Investor Education and Protection

Fund (IEPF) Account on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more

According to the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules), the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the IEPF Authority. Accordingly, the Company has transferred 26,773 Equity shares to IEPF account as per the requirements of the IEPF rules. The details are available on our website, at https://iitlgroup.com/ newStatic/Reports/Equity_shares_of_last_seven_ consecutive_ years_transferred-to-IEPF-on-or-before-October%2022,2022.pdf

Particulars of Employees and related disclosures

A) Details of the ratio of the remuneration of each Director to the median employees remuneration and other details as required pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

S. No. Name of Director / KMP and Designation

Remuneration of Director/ KMP for financial year 2022-23 (in Rs) % increase / (decrease) in Remuneration in the financial year 2022-23^ Ratio of remuneration of each Director / to median remuneration of employees
1 Dr. Bidhubhusan Samal, Executive Chairman 35,16,000/- (22.28%) 5.76
2 Mr. Bipin Agarwal, Non-Executive Director 3,00,000 (Sitting fees) 0% 0.49
3 Mr. Venkatesan Narayanan, Independent Director 8,70,000 (Sitting fees) 20.83% 1.42
4 Ms. Sujata Chattopadyay 2,40,000 (Sitting fees) 0% 0.39
5 Mr. Milind S. Desai 5,70,000 (Sitting fees) (5.00%) 0.93

6 Mr. Shankar Narayan Mokashi (LIC Nominee), Non- Executive Director

7,20,000 (Sitting fees) 60.00% 1.18

7 Ms. Cumi Banerjee, CEO (Secretarial, Legal & Admin) & Company Secretary

38,63,998 (1.69%) 6.33
8 Mr. Ajit Kumar Mishra, Group Chief Financial Officer # 2,85,714 Not Applicable 0.47

9 Mr. Rajev Adlakha, Chief Executive Officer - NBFC Operations @

6,14,285 Not Applicable 1.01
10 Mr. Kamlesh Kumar Agrawal, Group Chief Financial Officer $ 19,99,180 Not Applicable 3.27

# Remuneration not comparable since Mr. Ajit Kumar Mishra was appointed as Group Chief Financial Officer by Board w.e.f. February 17, 2023 and hence his remuneration is for part of the year 2022-23

@ Remuneration not comparable since Mr. Rajev Adlakha was appointed as Chief Executive Officer - NBFC Operations by Board w.e.f. February 14, 2023 and hence his remuneration is for part of the year 2022-23 $ Remuneration not comparable since Mr. Kamlesh Kumar Agrawal resigned as Group Chief Financial Officer w.e.f.

February 16, 2023 and hence his remuneration is for part of the year 2022-23

^(i) On account of financial position of the Company, the Executive Chairman voluntarily relinquished 50% of his salary w.e.f. October 01, 2021. Hence, there is a substantial decrease in % increase / (decrease) in Remuneration in the financial year 2022-23.

(ii)The remuneration of the Non-Executive Directors consists of sitting fees only and Increase in remuneration is based on various factors such as Directors participation in Board and Committee Meetings during the year, other responsibilities undertaken, such as Membership or Chairmanship of Committees, etc. Note: The remuneration to Directors includes sitting fees paid to them for the financial year 2022-23.

Notes:-

i) Median remuneration of employees of the Company during the financial year 2022-2023 wasRs 6,10,896/-.

ii) Median remuneration of employees of the Company during the financial year 2021-2022 was Rs 5,58,072/-. In the financial year, there was an increase of 9.47% in the median remuneration of employees.

iii) There were 12 confirmed employees on the rolls of the Company as on March 31, 2023.

iv) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2022-23 was 11.69% whereas the increase in the managerial remuneration for the same financial year was 5.35%. (This excludes the salaries of the newly joined and resigned employees during the same financial. year)

v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other employees.

B) Details of every employee of the Company as required pursuant to rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

During the year under consideration, none of the employees of the company was in receipt of remuneration in excess of limits prescribed under clause 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence particulars as required under 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been provided.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme

3. Details relating to deposits covered under Chapter V of the Act.

4. The provisions of Section 148 of the Act are not applicable to the Company. Accordingly, there is no requirement of maintenance of cost records as specified under Section 148(1) of theAct.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

6. There is no Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016.

Public Deposits

During the year under review, the Company has not accepted any deposits from the public.

Disclosures under Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013

In accordance with the provisions of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013, Internal Complaints Committee (ICC) has been set up to redress complaints. ICC has not received any complaints during the financial year 2022-2023.

Acknowledgement

Your Directors place on record their appreciation for employees, who have contributed to the growth and performance of your Company. Your Directors thank the Reserve Bank of India (RBI), Bankers, Shareholders and Advisors of the Company for their continued support. Your Directors also thank the Central and State Governments and other statutory authorities / regulators for their continued support.

For and on behalf of the Board

Industrial Investment Trust Limited

Dr. Bidhubhusan Samal

Chairman

(DIN: 00007256)

Date : August 18, 2023
Place : Mumbai