YT 17 - idfc.com · U65900TN2014PLC097942 Mr. Vinod Rai (Chairperson) Dr. Jaimini Bhagwati Mr....

IDFC SUBSIDIARY

ANNUAL REPORT

2016 - 2017

CONTENTS

1. IDFC FINANCIAL HOLDING COMPANY LIMITED 2

2. IDFC FOUNDATION 35

3. IDFC PROJECTS LIMITED 63

4. IDFC INFRASTRUCTURE FINANCE LIMITED 86

5. IDFC ALTERNATIVES LIMITED 125

6. IDFC CAPITAL (SINGAPORE) PTE. LIMITED 160

7. IDFC TRUSTEE COMPANY LIMITED 178

8. IDFC SECURITIES LIMITED 198

9. IDFC SECURITIES SINGAPORE PTE. LIMITED 235

10. IDFC CAPITAL (USA) INC. 251

11. IDFC ASSET MANAGEMENT COMPANY LIMITED 260

12. IDFC INVESTMENT MANAGERS (MAURITIUS) LIMITED 297

13. IDFC AMC TRUSTEE COMPANY LIMITED 315

14. IDFC BHARAT LIMITED 333

U65900TN2014PLC097942

Mr. Vinod Rai (Chairperson)

Dr. Jaimini Bhagwati

Mr. Donald Peck

Ms. Marianne Økland

Dr. Omkar Goswami

(Till April 2, 2017)

Deloitte Haskins & Sells LLP

Chartered Accountants

IDFC Bank Limited

KRM Tower, 7th Floor,

No. 1 Harrington Road,

Chetpet Chennai 600 031

Tel +91 44 4564 4000

Fax + 91 44 4564 4022

Website www.idfc.com

Email ID [email protected]

IDFC FINANCIAL HOLDING COMPANY LIMITED

CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 3

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Third Annual Report together with the audited financial statements for the year ended March 31, 2017.

OPERATIONS REVIEW

IDFC Limited (“IDFC”) was granted an In-principle approval by the Reserve Bank of India (“RBI”) on April 9, 2014 (“RBI In-Principle Approval”) to set up a new bank in the private sector under Section 22 of the Banking Regulation Act, 1949. The applicable RBI Guidelines specify that all new banks are required to be set up through a Non-Operative Financial Holding Company (“NOFHC”) and will need to be categorically structured such that all businesses which a bank is permitted to carry out, will necessarily vest in the new bank. The bank and all other regulated financial services entities (regulated by the RBI or other financial sector regulators) will need to be held by such NOFHC.

Accordingly, IDFC Financial Holding Company Limited (“IDFC FHCL” or “the Company”) was incorporated on November 7, 2014 as a wholly owned subsidiary of IDFC.

IDFC FHCL received Certificate of Registration from the RBI on June 18, 2015 for Non-operative Financial Holding Company (as a non-deposit taking NBFC).

FINANCIAL HIGHLIGHTS

(AMOUNT IN `)

PARTICULARS FOR THE YEAR ENDED MARCH 31, 2017

FOR THE YEAR ENDED MARCH 31, 2016

Total Income 1,114,370,707 35,487,207

Less: Total Expenses 3,561,826 2,906,682

Profit before Tax 1,110,808,881 32,580,525

Less: Provision for Tax 17,246,000 11,728,000

Profit after Tax 1,093,562,881 20,852,525

AMOUNT TO BE CARRIED FORWARD TO RESERVES

The details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.

DIVIDEND

During the year, the Company paid an interim dividend of ` 781,865,000. The Directors did not recommend any final dividend for the year ended March 31, 2017.

HOLDING, SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has Eight direct / indirect domestic subsidiaries and Four indirect foreign subsidiaries, as on date which are given below:

SR. NO NAME OF THE COMPANY % OF SHAREHOLDING

Domestic Companies

i. IDFC Bank Limited 52.88

ii. IDFC Bharat Limited (Formerly known as Grama Vidiyal Micro Finance Ltd) 52.88 (Through IDFC Bank Ltd)

iii. IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited) 81.48

iv. IDFC Alternatives Limited 100

v. IDFC Trustee Company Limited 100

vi. IDFC Securities Limited 100

vii. IDFC Asset Management Company Limited (see note below) 100

viii. IDFC AMC Trustee Company Limited (see note below) 100

Foreign Companies

i. IDFC Capital (Singapore) Pte. Limited 100

ii. IDFC Securities Singapore Pte. Limited 100

iii. IDFC Capital (USA) Inc. 100

iv. IDFC Investment Managers (Mauritius) Limited 100

Note: Acquisition of Stake of Natixis Global Asset Management in IDFC Asset Management Company Limited (“IDFC AMC”) and IDFC AMC Trustee

Company Limited (“IDFC AMC Trustee”)

IDFC FHCL was holding approximately 75% equity stake of IDFC AMC and IDFC AMC Trustee and the balance stake (approximately 25%) was held by

Natixis Global Asset Management (“NGAM”). In March 2017, IDFC FHCL acquired the stake held by NGAM in both IDFC AMC and IDFC AMC Trustee,

making them its wholly owned subsidiaries.

A statement containing salient features of the financial statement and all other requisite details of the aforesaid subsidiary companies in the format AOC-I forms part of this report and marked as Annexure I.

4 | I D F C A N N U A L R E P O R T 2 0 1 6 – 2 0 1 7

BOARD'S REPORT

SHARE CAPITAL UPDATE

During the year Company issued and allotted 244,240,000 shares by way of Rights Issue to IDFC Limited. The total share capital of the Company as on March 31, 2017 was ` 90,292,400,000.

PARTICULARS OF EMPLOYEES

The Company does not have any employee as on March 31, 2017.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any Public Deposits during the year under review.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The provision of Section 186 of the Companies Act, 2013 (“the Act”) are not applicable to the Company and hence, the particulars of loans, guarantees and investments have not been given.

FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

There were no foreign exchange earnings or expenditure during the year under review.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Since the Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable.

DIRECTORS AND KMP

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Act, Mr. Vinod Rai (DIN: 01119922) would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for reappointment.

Dr. Omkar Goswami resigned from the board vide his letter dated April 2, 2017. The Board placed on record its sincere appreciation towards the services rendered by him. Further, the Company is in the process of appointing requisite no. of Independent Directors (“IDs”) and reconstitute its Audit & Risk Committee and Nomination and Remuneration Committee.

The Board of Directors recommends reappointment of Mr. Vinod Rai at the ensuing AGM.

The following are the Directors / KMPs of the Company:

Table 1

SR NO NAME OF THE DIRECTOR DIN DESIGNATION

1 Mr. Vinod Rai 01119922 Nominee Director

2 Mr. Donald Peck 00140734 Nominee Director

3 Ms. Marianne Økland 03581266 Nominee Director

4 Dr. Jaimini Bhagwati 07274047 Independent Director (ID)

5 Dr. Omkar Goswami* 00004258 Independent Director (ID)

SR NO NAME OF THE KMP PAN DESIGNATION

6 Dr. Rajeev Uberoi AAIPU6376N Chief Executive Officer

7 Mr. Bipin Gemani AACPG6412A Chief Financial Officer

8 Mr. Ketan Kulkarni AIZPK3637L Company Secretary

* Resigned w.e.f. April 2, 2017

DECLARATION OF INDEPENDENCE

As per the provisions of the Act, IDs are not liable to retire by rotation and the terms of appointment of IDs will be governed by the provisions of the Act. All IDs have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.

BOARD MEETINGS

During FY17, the Board met six times and gap between two consecutive board meetings was less than one hundred and twenty days. The dates of the meetings were: April 29, 2016; July 26, 2016; October 28, 2016; January 31, 2017; February 17, 2017 and March 31, 2017. The composition of the Board is in compliance with the Act. Attendance details of the Board Meeting are given in Table 2


BOARD'S REPORT

COMMITTEES OF THE BOARD

As of March 31, 2017, the Company had the following Board level Committees:

(i) the Audit and Risk Committee; (ii) Nomination & Remuneration Committee; (iii) Corporate Social Responsibility Committee.

ATTENDANCE OF DIRECTORS AT BOARD AND COMMITTEE MEETING(S)

Table 2 shows attendance of Directors at the Board Meetings and Committee meeting(s) held during the year ended March 31, 2017. Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) held during the year.

Table 2

NAME OF THE DIRECTOR DIN CATEGORY BOARD AUDIT AND RISK COMMITTEE

NOMINATION & REMUNERATION

COMMITTEE

CORPORATE SOCIAL RESPONSIBILITY

COMMITTEE

Mr. Vinod Rai 01119922 Chairperson & Nominee Director C 6/6 4/4 1/1 -

Dr. Jaimini Bhagwati 07274047 Independent Director 6/6 C 4/4 - C 1/1

Mr. Donald Peck 00140734 Nominee Director 6/6 4/4 C 1/1 1/1

Ms. Marianne Økland 03581266 Nominee Director 6/6 - 1/1 -

Dr. Omkar Goswami* 00004258 Independent Director 3/6 3/4 - 1/1

* Resigned w.e.f. April 2, 2017

** figures marked with “C” represent Chairperson of the Board/Committee

AUDIT AND RISK COMMITTEE As on March 31, 2017, the Audit and Risk Committee comprised of four Members, with Dr. Jaimini Bhagwati being Chairperson and Mr. Vinod Rai, Mr. Donald Peck and Dr. Omkar Goswami as its members. During the year, the Audit Committee met four (4) times on April 29, 2016, July 26, 2016, October 28, 2016 and January 31, 2017. The gap between any two consecutive meetings was within the period prescribed under the Act. The committee meets, inter alia, to review the accounts of the Company, transactions with related parties and to discuss the audit findings and recommendations of the internal and statutory auditors. The composition and attendance details of the Audit Committee Meetings held during FY17 is given in Table 2.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

The NRC comprises of three Members. The Committee is headed by Mr. Donald Peck and has Mr. Vinod Rai and Ms. Marianne Økland as its members. The NRC meets, inter alia, to fill up of vacancies in the Board, evaluate the performance of the Board and its individual Members. The NRC recommends to the Board from time to time the framework relating to the remuneration for the Directors and Key Managerial Personnel. The Company has put in place Board approved remuneration policy which is in line with the requirements of the Act.

During the year, one meeting of NRC was held on April 29, 2016. The composition and attendance details of the NRC Meeting held during FY17 is given in Table 2.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

As on March 31, 2017, the CSR Committee comprised of three Members, Dr. Jaimini Bhagwati being the Chairperson and Dr. Omkar Goswami and Mr. Donald Peck as members of the Committee. The Company continued to partner with IDFC Foundation (a Section 8 company which is a wholly owned subsidiary of IDFC Limited) for inclusive growth to support the cause of sustainable livelihood and skill development, elementary education and primary health to achieve the CSR objectives. During the year, one CSR Committee meeting was convened and held on April 29, 2016. The composition and attendance details of the CSR Committee Meetings held during FY17 is given in Table 2.

Pursuant to Section 135 and Schedule VII of the Act and Rules made thereunder and on recommendation of CSR Committee, the Board has approved CSR Policy and the said policy is available on the website - www.idfc.com.

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed herewith as Annexure IV.

SEPARATE MEETING OF INDEPENDENT DIRECTORS

The IDs of the Company met on April 29, 2016 without the presence of the non-independent Directors and senior management team of the Company. Both the IDs attended the said meeting. The IDs discussed matters as required under the relevant provisions of the Act.


BOARD EVALUATION

Pursuant to the provisions of the Act, a detailed questionnaire was prepared and circulated to the Board for Annual evaluation. The Directors discussed and requested for some changes.

The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. The said process is expected to be completed in due course of time.

AUDITORS

At the AGM of the Company held on September 28, 2016, the shareholders had approved the appointment of Deloitte Haskins & Sells LLP (“DHS”), Chartered Accountants, (Registration No. 117366W / W-100018) as Statutory Auditors for a period of 1 year to hold office from the conclusion of the 2nd AGM up to the conclusion of the 3rd AGM of the Company. There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report on the Financial Statements for FY17. DHS will retire at the conclusion of the ensuing AGM.

Accordingly, the Audit Committee and Board of Directors of the Company at their respective meetings held on April 28, 2017 recommended the appointment of M/s Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of DHS, Chartered Accountants, for a period of five years from the conclusion of ensuing AGM upto the conclusion of 8th AGM to be held for FY22, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis.

PWC have confirmed that their appointment, if made, would be in conformity with the provisions of Section 141 of the Act and have also indicated their willingness to be appointed.

A Resolution seeking approval for appointment of PWC is included in the Notice of the ensuing AGM. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company as per the details given in the Notice.

RELATED PARTY TRANSACTIONS

The Company has in place a policy on Related Party Transactions (“RPT”) and the same has been uploaded on the website. Since all RPTs entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.

REMUNERATION POLICY

The Company has a policy in place for identification of independence, qualifications and positive attributes of Directors. The Board approved the Remuneration Policy which is formulated in line with the requirements of the Act.

INTERNAL CONTROL SYSTEMS

The Company has in place adequate internal control systems which commensurate with the size and operations of the Company.

RISK MANAGEMENT

The Members of the Audit & Risk Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNAL

There were no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Bhandari & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for FY17. The Secretarial Audit Report forms part of this report and marked as Annexure II.

MATERIAL CHANGES/ COMMITMENTS

As per Section 134(3)(l) of the Act, there have been no material changes and commitments affecting the financial position of the Company that has occurred between March 31, 2017 till the date of this report.

INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act.

BOARD'S REPORT


BOARD'S REPORT

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that:

(a) in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) such accounting policies have been selected and applied consistently and 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, 2017 and profit of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual financial statements have been prepared on a going concern basis; and

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

EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in the prescribed Form No. MGT - 9 forms part of this Report and marked as Annexure III.

ACKNOWLEDGEMENTS

We are grateful to RBI and other regulatory bodies for their co-operation and support. The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.

FOR AND ON BEHALF OF THE BOARD

Vinod RaiChairperson

Mumbai, June 30, 2017


ANNEXURE IFORM AOC-I

PART BASSOCIATES AND JOINT VENTURES(Pursuant to Section 129(3) of the Act related to Associates Companies and Joint Ventures)

NOT APPLICABLE

PART A SUBSIDIARIES ` IN CRORE

SR. NO. NAME OF THE SUBSIDIARY COMPANIES

DATE SINCE WHEN SUBSIDIARY ACQUIRED /

INCORPORATED CAPITAL RESERVES TOTAL ASSETS

TOTAL LIABILITIES INVESTMENTS TURNOVER

PROFIT BEFORE TAX

PROVISION FOR TAX

PROFIT AFTER TAX

PROPOSED DIVIDEND ()

EXTEND OF SHAREHOLDING (IN %)

PREFERENCE EQUITY

1 IDFC Alternatives Limited November 7, 2002 0.22 329.02 374.08 44.84 270.39 124.78 28.39 9.35 19.04 - - 100

(Previous Year) 0.22 309.98 359.54 49.34 262.29 124.41 26.28 11.67 14.61 - - 100

2 IDFC AMC Trustee Company Limited May 30, 2008 0.05 0.10 0.16 0.01 - 0.18 0.06 0.02 0.04 - - 100

(Previous Year) 0.05 0.05 0.14 0.04 - 0.12 0.01 ß 0.01 - - 75

3 IDFC Asset Management Company Limited May 30, 2008 2.68 220.73 276.31 52.90 233.45 291.96 140.00 42.72 97.28 2275 - 100

(Previous Year) 2.68 123.45 278.45 152.32 233.10 315.61 162.78 52.74 110.04 3050 - 75

4 IDFC Capital (Singapore) Pte. Ltd.* January 2, 2008 246.22 (48.98) 197.51 0.27 127.02 8.05 (0.87) - (0.87) - - 100

(Previous Year) 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - - 100

5 IDFC Capital (USA) Inc.* August 3, 2009 4.62 1.53 6.29 0.14 - 3.36 0.22 0.20 0.02 - - 100

(Previous Year) 4.62 1.65 6.66 0.39 - 2.49 0.14 (0.05) 0.19 - - 100

6 IDFC Investment Managers (Mauritius) Limited* September 13, 2010 2.51 (1.00) 1.57 0.06 - - (0.22) - (0.22) - - 100

(Previous Year) 2.51 (0.75) 1.82 0.06 - - (0.23) - (0.23) - - 75

7 IDFC Securities Limited October 22, 2007 14.14 131.72 205.45 59.59 20.13 67.82 16.63 5.44 11.19 - - 100

(Previous Year) 14.14 120.53 170.31 35.64 74.57 41.16 23.37 8.52 14.85 - - 100

8 IDFC Securities Singapore Pte. Ltd* November 21, 2012 14.91 (11.50) 3.65 0.24 - 2.10 (1.63) - (1.63) - - 100

(Previous Year) 14.91 (9.81) 5.30 0.20 - 0.73 (2.98) - (2.98) - - 100

9 IDFC Trustee Company Limited October 11, 2002 0.05 4.95 5.01 0.01 2.28 0.89 1.47 0.36 1.11 - - 100

(Previous Year) 0.05 3.84 3.91 0.02 3.86 0.83 0.81 0.25 0.56 - - 100

10IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited)

March 7, 2014 540.00 112.37 2,837.04 2,184.67 125.28 206.93 70.84 - 70.84 - - 81.48

(Previous Year) 540.00 41.53 1,421.61 840.08 106.50 74.99 37.10 - 37.10 - - 81.48

11 IDFC Bank Limited October 21, 2014 3,399.01 11,279.04 112,159.66 97,481.61 50,471.70 8,532.71 1,470.96 451.22 1,019.74 7.50 - 52.88

(Previous Year) 3,392.62 10,239.93 83,215.87 69,583.32 29,728.61 3,648.83 715.77 248.92 466.85 2.50 - 52.98

12IDFC Bharat Limited ** (Formerly known as Grama Vidiyal Micro Finance Limited)

October 13, 2016 5.58 161.61 233.94 66.75 - 262.30 20.90 8.49 12.41 - - 52.88

(Previous Year) NA NA NA NA NA NA NA NA NA NA NA -

Note: There are no subsidiaries which are yet to commence operations. No subsidiaries have been liquidated or sold during the year.

* Exchange rate:

Closing Rate : 1 USD = ` 64.83

Average Rate : 1 USD = ` 67.06

Figures of ` 50,000 or less have been denoted by ß.

** Acquired by IDFC Bank w.e.f. October 13, 2016.


PART A SUBSIDIARIES ` IN CRORE

SR. NO. NAME OF THE SUBSIDIARY COMPANIES

DATE SINCE WHEN SUBSIDIARY ACQUIRED /

INCORPORATED CAPITAL RESERVES TOTAL ASSETS

TOTAL LIABILITIES INVESTMENTS TURNOVER

PROFIT BEFORE TAX

PROVISION FOR TAX

PROFIT AFTER TAX

PROPOSED DIVIDEND ()

EXTEND OF SHAREHOLDING (IN %)

PREFERENCE EQUITY

1 IDFC Alternatives Limited November 7, 2002 0.22 329.02 374.08 44.84 270.39 124.78 28.39 9.35 19.04 - - 100

(Previous Year) 0.22 309.98 359.54 49.34 262.29 124.41 26.28 11.67 14.61 - - 100

2 IDFC AMC Trustee Company Limited May 30, 2008 0.05 0.10 0.16 0.01 - 0.18 0.06 0.02 0.04 - - 100

(Previous Year) 0.05 0.05 0.14 0.04 - 0.12 0.01 ß 0.01 - - 75

3 IDFC Asset Management Company Limited May 30, 2008 2.68 220.73 276.31 52.90 233.45 291.96 140.00 42.72 97.28 2275 - 100

(Previous Year) 2.68 123.45 278.45 152.32 233.10 315.61 162.78 52.74 110.04 3050 - 75

4 IDFC Capital (Singapore) Pte. Ltd.* January 2, 2008 246.22 (48.98) 197.51 0.27 127.02 8.05 (0.87) - (0.87) - - 100

(Previous Year) 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - - 100

5 IDFC Capital (USA) Inc.* August 3, 2009 4.62 1.53 6.29 0.14 - 3.36 0.22 0.20 0.02 - - 100

(Previous Year) 4.62 1.65 6.66 0.39 - 2.49 0.14 (0.05) 0.19 - - 100

6 IDFC Investment Managers (Mauritius) Limited* September 13, 2010 2.51 (1.00) 1.57 0.06 - - (0.22) - (0.22) - - 100

(Previous Year) 2.51 (0.75) 1.82 0.06 - - (0.23) - (0.23) - - 75

7 IDFC Securities Limited October 22, 2007 14.14 131.72 205.45 59.59 20.13 67.82 16.63 5.44 11.19 - - 100

(Previous Year) 14.14 120.53 170.31 35.64 74.57 41.16 23.37 8.52 14.85 - - 100

8 IDFC Securities Singapore Pte. Ltd* November 21, 2012 14.91 (11.50) 3.65 0.24 - 2.10 (1.63) - (1.63) - - 100

(Previous Year) 14.91 (9.81) 5.30 0.20 - 0.73 (2.98) - (2.98) - - 100

9 IDFC Trustee Company Limited October 11, 2002 0.05 4.95 5.01 0.01 2.28 0.89 1.47 0.36 1.11 - - 100

(Previous Year) 0.05 3.84 3.91 0.02 3.86 0.83 0.81 0.25 0.56 - - 100

10IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited)

March 7, 2014 540.00 112.37 2,837.04 2,184.67 125.28 206.93 70.84 - 70.84 - - 81.48

(Previous Year) 540.00 41.53 1,421.61 840.08 106.50 74.99 37.10 - 37.10 - - 81.48

11 IDFC Bank Limited October 21, 2014 3,399.01 11,279.04 112,159.66 97,481.61 50,471.70 8,532.71 1,470.96 451.22 1,019.74 7.50 - 52.88

(Previous Year) 3,392.62 10,239.93 83,215.87 69,583.32 29,728.61 3,648.83 715.77 248.92 466.85 2.50 - 52.98

12IDFC Bharat Limited ** (Formerly known as Grama Vidiyal Micro Finance Limited)

October 13, 2016 5.58 161.61 233.94 66.75 - 262.30 20.90 8.49 12.41 - - 52.88

(Previous Year) NA NA NA NA NA NA NA NA NA NA NA -

For and on behalf of the Board of Directors ofIDFC Financial Holding Company Limited

Vinod RaiChairperson

Dr. Jaimini BhagwatiDirector

Mumbai, April 28, 2017Bipin GemaniChief Financial Officer

Ketan KulkarniCompany Secretary


ANNEXURE IISECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

ToThe Members,IDFC FINANCIAL HOLDING COMPANY LIMITEDCIN: U65900TN2014PLC097942

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by IDFC FINANCIAL HOLDING COMPANY LIMITED (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2017 according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made thereunder;

ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder# ;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment. The Company does not have any Overseas Direct Investment and External Commercial Borrowings during the financial year;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015#;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009#;

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014#;

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008#;

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009#; and

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998#;

# The Regulations or Guidelines, as the case may be were not applicable for the period under review.

The list of Acts, Laws and Regulations specifically applicable to the Company are given below:

vi. Reserve Bank of India Guidelines for Licensing of New Banks in the Private Sector, 2013.

vii. Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by the Institute of Company Secretaries of India.;

ii. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015#.

# Not applicable for the period under review

During the period under review the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following:

a) Company does not have requisite number of Independent Director as required under clause G of Guidelines for Licensing of New Banks in the Private Sector, 2013.

b) Composition of the Audit & Risk Management Committee and Nomination & Remuneration Committee does not have requisite number of Independent Directors as required under the provisions of the Companies Act, 2013.

We have been informed by the Management of the Company that they are under process of appointing requisite number of Independent directors and re-constituting its Audit & Risk Management Committee and Nomination & Remuneration committee.

I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 1


We further report that

Subject to the foregoing the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

During the period under review, decisions were carried through unanimously and no dissenting views were observed, while reviewing the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, the Company has undertaken following events/actions –

i. Board of Directors of the Company at its meeting held on January 31, 2017 has issued and offered 244,240,000 Equity Shares by way of Rights Issue to IDFC Limited for cash, at par, for an aggregate price of ` 244.24 Crore.

ii. Board of Directors at their meeting held on January 31, 2017 has approved the acquisition of approximately 25% Equity Share Capital of IDFC Asset Management Company Limited and IDFC AMC Trustee Company Limited from Natixis Global Asset Management Asia Pte Ltd for an amount of ` 244.24 Crore.

For Bhandari & AssociatesCompany Secretaries

S. N. Bhandari Partner FCS No: 761; C P No. : 366

Mumbai| April 20, 2017

This report is to be read with our letter of even date which is annexed as Annexure ‘A’ and forms an integral part of this report.

‘Annexure A’

ToThe Members,IDFC FINANCIAL HOLDING COMPANY LIMITEDCIN: U65900TN2014PLC097942

Our Secretarial Audit Report for the Financial Year ended on March 31, 2017 of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For Bhandari & AssociatesCompany Secretaries

S. N. Bhandari Partner FCS No: 761; C P No. : 366

Mumbai | April 20, 2017.


As on the financial year ended on March 31, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN U65900TN2014PLC097942

ii) Registration Date November 7, 2014

iii) Name of the Company IDFC FINANCIAL HOLDING COMPANY LIMITED

iv) Category / Sub-Category of the Company Company Limited by shares

Indian Non-Government Company

v) Address of the Registered office and contact details KRM Tower, 7th Floor, No.1, Harrington Road, Chetpet, Chennai – 600 031. Tel.: +91 44 4564 4000, Fax: +91 44 4564 4022

vi) Whether listed company Yes / No No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad 500 032.Tel.: +91 40 6716 1500 Fax No.: +91 40 2342 0814

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities contributing 10 % or more of the total turnover of the company shall be stated:-

SR. NO.

NAME AND DESCRIPTION OF MAIN PRODUCTS / SERVICES NIC CODE OF THE PRODUCT / SERVICE

% TO TOTAL TURNOVER OF THE COMPANY

1. Non-operating financial holding company (Investment Company) 65993 –

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SR. NO.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY /ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Holding 100 Section 2(46)

2. IDFC Bank Limited L65110TN2014PLC097792 Subsidiary 52.88 Section 2(87)

3 IDFC Bharat Limited(Formerly known as Grama Vidiyal Micro Finance Limited)

U65929TN2003PLC050856 Subsidiary 52.88 (through IDFC Bank Limited)

Section 2(87)

4. IDFC Asset Management Company Limited

U65993MH1999PLC123191 Subsidiary 100 Section 2(87)

5. IDFC AMC Trustee Company Limited

U69990MH1999PLC123190 Subsidiary 100 Section 2(87)

6. IDFC Securities Limited U99999MH1993PLC071865 Subsidiary 100 Section 2(87)

7. IDFC Alternatives Limited U67190MH2002PLC137798 Subsidiary 100 Section 2(87)

8. IDFC Trustee Company Limited U65990MH2002PLC137533 Subsidiary 100 Section 2(87)

9. IDFC Infrastructure Finance Limited (formerly known as IDFC Infra Debt Fund Limited)

U67190MH2014PLC253944 Subsidiary 81.48 Section 2(87)

10. IDFC Securities Singapore Pte. Limited

Foreign Company Subsidiary 100 Section 2(87)

11. IDFC Capital (USA) Inc. Foreign Company Subsidiary 100 Section 2(87)

12. IDFC Investment Managers (Mauritius) Limited


13. IDFC Capital (Singapore) Pte. Limited


ANNEXURE IIIFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN


IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)

(i) Category-wise Share Holding

CATEGORY OF SHAREHOLDERS NO. OF SHARES HELD AS ON MARCH 31, 2016 NO. OF SHARES HELD AS ON MARCH 31, 2017 % CHANGE DURING

THE YEARDEMAT PHYSICAL TOTAL % OF TOTAL SHARES

DEMAT PHYSICAL TOTAL % OF TOTAL SHARES

A. PROMOTERS

Indian

Bodies Corp. 8,784,999,940 60 8,785,000,000 100 9,029,239,940 60 9,029,240,000 100 NIL

SUB-TOTAL (A):- 8,784,999,940 60 8,785,000,000 100 9,029,239,940 60 9,029,240,000 100 NIL

B. PUBLIC SHAREHOLDING NIL NIL NIL NIL NIL NIL NIL NIL NIL

C. SHARES HELD BY CUSTODIAN FOR GDRS & ADRS

NIL NIL NIL NIL NIL NIL NIL NIL NIL

GRAND TOTAL (A+B+C) 8,784,999,940 60 8,785,000,000 100 9,029,239,940 60 9,029,240,000 100 NIL

(ii) Shareholding of Promoters

SR. NO.

SHAREHOLDER’S NAME SHAREHOLDING AS ON MARCH 31, 2016 SHARE HOLDING AS ON MARCH 31, 2017 % CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES % OF TOTAL SHARES OF THE

COMPANY

% OF SHARES PLEDGED/

ENCUMBERED TO TOTAL SHARES


COMPANY



1. IDFC Limited & its nominees

87,85,000,000 100 NIL 9,029,240,000 100 NIL NIL

TOTAL 87,85,000,000 100 NIL 9,029,240,000 100 NIL NIL

(iii) Change in Promoters’ Shareholding

SR. NO.

SHAREHOLDING AS ON MARCH 31, 2016 CUMULATIVE SHAREHOLDING DURING THE PERIOD

NO. OF SHARES % OF TOTAL SHARES OF THE COMPANY


1 At the beginning of the year 8,785,000,000 100 8,785,000,000 100

2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc):

244,240,000 Allotted on March 17, 2017

by way of Rights Issue

9,029,240,000 100

3 At the end of the year 9,029,240,000 100 9,029,240,000 100

(iv) Shareholding Pattern of top Ten Shareholders (other than Directors, Promoters and Holders of GDRs AND ADRs):

NOT APPLICABLE

(v) Shareholding of Directors and Key Managerial Personnel: NIL

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: NOT APPLICABLE



B. Remuneration to other directors:

SR. NO.

PARTICULARS OF REMUNERATION NAME OF DIRECTORS TOTAL AMOUNT

IN `VINOD RAI DONALD

PECKMARIANNE

ØKLANDOMKAR

GOSWAMIJAIMINI

BHAGWATI

1. Independent Directors NA NA NA

Fee for attending board committee meetings 200,000 300,000 500,000

Commission for FY16 paid in FY17 500,000 500,000 1,000,000

Others, please specify NIL NIL NIL

Total (1) 700,000 800,000 1,500,000

2. Other Non-Executive Directors

Total (2) NIL NIL NIL NA NA NA

Total (B) = (1 + 2) NIL NIL NIL 700,000 800,000 1,500,000

Overall Ceiling as per the Act Refer Note

Note: In terms of the provisions of the Act, the remuneration payable to Directors other than Executive Directors shall not exceed 1% of the net profit of the Company. The remuneration paid to the Directors is well within the said limit.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: NOT APPLICABLE

VII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: NIL



[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

1. A brief outline of the Company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

The CSR policy is to ensure that CSR activities are not performed in silos and that it be skillfully and inextricably woven into the fabric of the Company’s business strategy for overall value creation for all stakeholders. IDFC believes that profitability must be complemented by a sense of responsibility towards all stakeholders with a view to make a material, visible and lasting difference to the lives of disadvantaged sections of the people, preferably in the immediate vicinity in which the Company operates but at the same time ensure widespread spatial distribution of its CSR activities Pan-India befitting its status as a conscientious corporate citizen.

Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Financial Holding Co. Ltd. to mandatorily spend on CSR.

During the year, IDFC Financial Holding Co. Ltd. carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).

The object of the CSR activities would seek to –

(a) serve the poor, marginalised and underprivileged

(b) promote inclusion

(c) be sustainable

(d) meet needs of the larger community and society

IDFC Foundation, as implementing agency on behalf of IDFC Limited and its group companies, undertook the following CSR activities which fall within the ambit of the activities listed in Schedule VII of the Act for promoting the development of –

(a) livelihoods

(b) rural development projects

(c) promoting healthcare including preventive health care

(d) education

(e) community engagement/development

(f) environmental sustainability

(g) disaster relief

(h) research and studies in all or any of the activities mentioned in Schedule VII and

(i) Others

2. The Composition of the CSR Committee:

Dr. Jaimini Bhagwati, Chairperson

Mr. Donald Peck

Dr. Omkar Goswami

3. Average net profit of the company for last three financial years ` 2,435,032

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) ` 48,701

5. Details of CSR spent during the financial year.

a) Total amount to be spent for the financial year: ` 48,701

b) Amount spent during the year: ` 50,000

c) Amount unspent, if any; Nil

d) Manner in which the amount spent during the financial year is detailed below: Annexure – A

6. In case the Company has failed to spend 2% of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report: Not Applicable

7. The CSR Committee of the Company hereby confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

For IDFC Financial Holding Company Limited

Place : Mumbai Dr. Jaimini Bhagwati Vinod RaiDate : June 30, 2017 Chairperson – CSR Committee Director

ANNEXURE IVCORPORATE SOCIAL RESPONSIBILITY (CSR)



IN `

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO

CSR PROJECT OR ACTIVITY IDENTIFIED SECTOR IN WHICH THE PROJECT IS COVERED (CLAUSE NO. OF SCHEDULE VII TO THE COMPANIES ACT, 2013, AMENDED)

PROJECTS OR PROGRAMS (1) LOCAL AREA OR OTHER (2) SPECIFY THE STATE AND DISTRICT WHERE PROJECTS OR PROGRAMS WAS UNDERTAKEN

AMOUNT OUTLAY

(BUDGET)

AMOUNT SPENT ON THE PROJECTS OR PROGRAMS SUB HEADS:

(1) DIRECT EXPENDITURE ON PROJECTS OR PROGRAMS (2) OVER

HEADS

CUMULATIVE EXPENDITURE

UP TO THE REPORTING

PERIOD

AMOUNT SPENT : DIRECT OR

THROUGH IMPLEMENTING

AGENCY

1 Improvement in the learning environment in night schools - which cater to underprivileged students.

Cl.(ii) promoting education Maharashtra-Mumbai

12,282

482 482

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

2 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.

Cl.(ii) promoting education Rajasthan - Alwar 665 665

3 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.

Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 285 285

4 Support towards strengthening and improving the quality of life in Indian cities and towns. Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,

Gujarat - Ahmedabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi

418 418

5 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village


Total 12,282 2,010 2,010

6 Providing economic and affordable service delivery on water and sanitation to the community. Cl.(i) Sanitation & Safe Drinking water Odisha

14,039

234 234

7 Support for affordable and accessible healthcare services. Cl.(i) promoting health care including preventive health care

All India coverage 345 345

8 Support for elimination of Open Defecation and achieving Open Defecation Free Status in Machlipatnam division of Krishna District

Cl.(i) Sanitation Andhra Pradesh - Krishna district 1,557 1,557

Total 14,039 2,136 2,136

9 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to enhance the livelihoods of small and marginal farming families in rural districts

Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone,Dhar, Bhopal, Raisen, Dewas and Indore Karnataka-Hubbali (Dharwad), Haveri, Koppal, Bagalkot, Belgaavi

12,066

1,598 1,598

10 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) clean drinking water in Mawlyngbwa Village, Meghalaya

Cl.(ii) livelihood enhancement projects; Cl. (iv) ensuring environmental sustainability; Cl. (x) rural development projects.

Meghalaya - Across State 147 147

11 Setting up a Centre of Excellance for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand

Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 142 142

12 Support on improving the competitiveness of Indian economy through jobs and livelihood creation.

Cl.(ii) livelihood enhancement projects, All India coverage 234 234

13 Financial inclusion through channelizing Interoperable Micro ATMs Network to improve access to basic banking & payments network services after providing financial literacy and digital skilling program under Rural Livelihoods & Development Program

Cl.(ii) livelihood enhancement projects; Cl. (x) rural development projects.

Rural India coverage 1,261 1,261

Total 12,066 3,382 3,382

14 Research & studies on various programmes Various clauses of Schedule VII All India coverage 11,613 5,078 5,078

Total 11,613 5,078 5,078

Total Direct Expense of Project & Programmes (A) 12,606 12,606Overhead Expense (B) 303 303

Total (A) + (B) 50,000 12,909 12,909

*IDFC Foundation, a wholly owned subsidiary of the IDFC Limited, is an implementing agency of IDFC Limited and its group Companies and engaging Corporate Social Responsibility (CSR) activities as per the CSR policy adopted by IDFC & its group companies in line with the Schedule VII of the Companies Act, 2013.

The Company is primarily focussing on CSR activities as well defined projects or programmes that would include promoting and development of (a) livelihoods, (b) rural development projects, (c) promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII and (i) Others, with the help of various partners.

ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)



IN `

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO



AMOUNT OUTLAY

(BUDGET)



HEADS


UP TO THE REPORTING

PERIOD



AGENCY



12,282

482 482

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*


Cl.(ii) promoting education Rajasthan - Alwar 665 665





418 418



Total 12,282 2,010 2,010


14,039

234 234


All India coverage 345 345


Cl.(i) Sanitation Andhra Pradesh - Krishna district 1,557 1,557

Total 14,039 2,136 2,136



12,066

1,598 1,598



Meghalaya - Across State 147 147


Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 142 142


Cl.(ii) livelihood enhancement projects, All India coverage 234 234



Rural India coverage 1,261 1,261

Total 12,066 3,382 3,382

14 Research & studies on various programmes Various clauses of Schedule VII All India coverage 11,613 5,078 5,078

Total 11,613 5,078 5,078

Total Direct Expense of Project & Programmes (A) 12,606 12,606Overhead Expense (B) 303 303

Total (A) + (B) 50,000 12,909 12,909




INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF IDFC FINANCIAL HOLDING COMPANY LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of IDFC FINANCIAL HOLDING COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2017 the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, based on our audit we report, to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.



f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company does not have any pending litigations which would impact its financial position;

ii. The Company did not have long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

iv. The Company did not have any holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/”CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLS LLPChartered Accountants(Firm’s Registration No. 117366W/W-100018)

Kalpesh J. Mehta(Partner) (Membership No. 487915)

Mumbai, April 28, 2017.


ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of IDFC FINANCIAL HOLDING COMPANY LIMITED (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017 based on Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.





ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

(i) The Company does not have any fixed assets and hence reporting under clause (i) of the CARO 2016 is not applicable.

(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable.

(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including, Income-tax, Service Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees’ State Insurance, Sales tax, Custom Duty, Value Added Tax and Excise duty.

(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, cess and other material statutory dues in arrears as on March 31, 2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2017 on account of disputes.

(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no material fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding or subsidiary companies or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and it has obtained the registration.





BALANCE SHEET AS AT MARCH 31, 2017

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

NOTES ` `

EQUITY AND LIABILITIES

Shareholders’ funds

(a) Share capital 3 90,292,400,000 87,850,000,000

(b) Reserves and surplus 4 307,274,976 (4,422,905)

90,599,674,976 87,845,577,095

Current liabilities

(a) Trade payables 5

Total outstanding dues of micro enterprises and small enterprises - -

Total outstanding dues of creditors other than micro enterprises and small enterprises

2,131,250 2,559,000

(b) Other current liabilities 6 10,000 20,000

(c) Short term provisions 7 862,705 -

TOTAL 90,602,678,931 87,848,156,095

ASSETS

Non current assets

(a) Non current investments 8 89,840,715,289 87,398,047,941

(b) Long term loans and advances 9 155,935 156,291

Current assets

(a) Cash and cash equivalents 10 737,598,776 442,892,246

(b) Other current assets 11 24,208,931 7,059,617

TOTAL 90,602,678,931 87,848,156,095

See accompanying notes forming part of the financial statements.

In terms of our report attached.

For Deloitte Haskins and Sells LLPChartered Accountants(Registration No. 117366W/W-100018)


Kalpesh J. MehtaPartner

Vinod RaiDirector









Vinod RaiDirector




STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2017

FOR THE YEAR ENDED MARCH 2017


NOTES ` `

I INCOME

Income from operations 12 1,113,220,707 35,487,207

Other income 13 1,150,000 -

TOTAL INCOME (I) 1,114,370,707 35,487,207

II EXPENSES

Other expenses 14 3,561,826 2,906,682

TOTAL EXPENSES (II) 3,561,826 2,906,682

III PROFIT BEFORE TAX (I - II) 1,110,808,881 32,580,525

IV TAX EXPENSE

Current tax 17,246,000 11,728,000

TOTAL TAX EXPENSES (IV) 17,246,000 11,728,000

V PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS (III - IV) 1,093,562,881 20,852,525

Earnings per equity share (nominal value of share ` 10 each)

Basic (`) 18 0.123 0.004

Diluted (`) 0.123 0.004



CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2017



NOTES ` `

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 1,110,808,881 32,580,525

Adjustments for :

Interest income from term deposits 12 (51,011,225) (35,487,207)

Interest received on term deposits 33,861,911 28,427,590

Operating profit before working capital changes 1,093,659,567 (25,520,908)

Adjustment for changes in working capital:

Adjustments for increase / (decrease) in operating liabilities:

Trade payables (427,750) 2,507,820

Other current liabilities (10,000) (25,204,250)

1,093,221,817 2,824,478

Direct Taxes paid (16,382,939) (11,884,291)

NET CASH FROM / (USED IN) OPERATING ACTIVITIES (A) 1,076,838,878 (9,059,813)

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of long term investments- subsidiaries (2,442,667,348) (87,397,547,941)

Term deposits placed (1,814,275,000) (441,500,000)

Term deposits matured 1,518,375,000 -

NET CASH USED IN INVESTING ACTIVITIES (B) (2,738,567,348) (87,839,047,941)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares 2,442,400,000 87,849,500,000

Dividend paid to shareholders (781,865,000) -

NET CASH FROM FINANCING ACTIVITIES (C) 1,660,535,000 87,849,500,000

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (1,193,470) 1,392,246

Cash and cash equivalents as at the beginning of the year. 10 1,392,246 -

Cash and cash equivalents as at the end of the year. 10 198,776 1,392,246

(1,193,470) 1,392,246

Reconcialition :

Cash & Cash equivalents as per Balance Sheet (refer note no. 10) 737,598,776 442,892,246

Less : Bank balances not considered as Cash & Cash equivalents as defined in AS 3 Cash Flow Statements

737,400,000 441,500,000

NET CASH & CASH EQUIVALENTS AS DEFINED IN AS 3 CASH FLOW STATEMENTS 198,776 1,392,246





Vinod RaiDirector




NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2017


01 BACKGROUNDIDFC Financial Holding Company Limited (‘the Company’) is a public company, incorporated in India. The Company is a wholly owned subsidiary of IDFC Limited. The Company has received certificate of registration for Non-Banking Financial Company (NBFC) Non-Operating Financial Holding Company (NOFHC) from Reserve Bank of India, on June 18, 2015. As per the guidelines for licensing of new banks in the private sector issued by Reserve Bank of India (RBI), the company, a Non-Operative Financial Holding Company Limited holds the investment in IDFC Bank as well as all other financial services entities of the group regulated by RBI or other financial sector regulators.

02 SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PREPARATION The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles

in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

B. USE OF ESTIMATES The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and

assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

C. INVESTMENTS Investments which are readily realisable and intended to be held for not more than one year from the date on which such

investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on ‘Accounting for Investments’ as specified under section 133 of Companies Act, 2013. All other investments are classified as long term investments.

All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.

¡ ‘Long Term Investments’ are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis.

¡ ‘Current investments’ are valued scrip-wise and depreciation / appreciation is aggregated for each category. Net appreciation in each category, if any, being unrealised gain is ignored, while net depreciation is provided for.

D. REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be

reliably measured. In addition, the following criteria must also be met before revenue is recognised:

¡ Interest Income is accounted on accrual basis.

¡ Dividend is accounted on accrual basis when the right to receive is established.

¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is determined based on the FIFO cost for current investments and weighted average cost for long term investments.

E. TAXES ON INCOME Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income for

the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as specified under section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

F. CASH AND CASH EQUIVALENTS Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity

of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.



G. CASH FLOW STATEMENT Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of

non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

H. EARNINGS PER SHARE Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items,

if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

I. PROVISIONS AND CONTINGENCIES A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of

resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.

J. OPERATING CYCLE Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or

cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

03 SHARE CAPITAL

AS AT MARCH 31, 2017 AS AT MARCH 31, 2016

NUMBER ` NUMBER `

Authorised shares

Equity shares of ` 10 each 10,000,000,000 100,000,000,000 10,000,000,000 100,000,000,000

Issued, subscribed & fully paid-up shares

Equity shares of ` 10 each 9,029,240,000 90,292,400,000 8,785,000,000 87,850,000,000

(All of above shares are held by IDFC Limited and its nominees).

TOTAL 90,292,400,000 87,850,000,000

(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.


NUMBER ` NUMBER `

Outstanding at the beginning of the year 8,785,000,000 87,850,000,000 50,000 500,000

Issued during the year 244,240,000 2,442,400,000 8,784,950,000 87,849,500,000

Outstanding at the end of the year 9,029,240,000 90,292,400,000 8,785,000,000 87,850,000,000

(b) Terms / rights attached to equity shares

¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled

to one vote per share.

¡ In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets

of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The

distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Details of shareholders holding more than 5% of the shares in the Company

Equity shares


NUMBER % OF HOLDING NUMBER % OF HOLDING

IDFC Limited and its nominees 9,029,240,000 100% 8,785,000,000 100%



04 RESERVES & SURPLUS

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

(a) Special Reserve u/s. 45-IC of RBI Act,1934

Opening balance 5,588,000 -

Add: Transferred from surplus in Statement of Profit and Loss 280,000,000 5,588,000

Closing balance 285,588,000 5,588,000

(b) Surplus / (Deficit) in the Statement of Profit and Loss

Opening balance (10,010,905) (25,275,430)

Profit for the year 1,093,562,881 20,852,525

Less: Transfer to special reserve u/s 45IC 280,000,000 5,588,000

Less: Interim dividend paid 781,865,000 -

Closing balance 21,686,976 (10,010,905)

TOTAL RESERVES & SURPLUS 307,274,976 (4,422,905)

05 TRADE PAYABLES

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Total Outstanding dues of micro enterprises and small enterprises (see note below) - -

Total Outstanding dues of creditors other than micro enterprises and small enterprises

Provision for expenses 2,131,250 2,559,000

TOTAL 2,131,250 2,559,000

Note: Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:

PARTICULARS AS AT MARCH 31, 2017

AS AT MARCH 31, 2016

(a) Principal amount remaining unpaid to any supplier at the end of the accounting year. - -

(b) Interest due thereon remaining unpaid to any supplier at the end of the accounting year. - -

(c) The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006.

- -

(d) The amount of interest accrued and remaining unpaid at the end of each accounting year. - -

(e) The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

- -

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

06 OTHER CURRENT LIABILITIES

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Statutory dues 10,000 20,000

TOTAL 10,000 20,000

07 SHORT TERM PROVISIONS

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Provision for income tax [net of advance tax ` 10,865,295 (Previous Year ` Nil)] 862,705 -

TOTAL 862,705 -



08 NON CURRENT INVESTMENTS

FACE VALUE

QUANTITY AS ATMARCH 31, 2017

QUANTITY AS ATMARCH 31, 2016

(`) ` `

Trade Investments (Valued at cost) (Trade)

Investment in subsidiaries

Quoted Equity Shares

IDFC Bank Limited 10 1,797,512,668 70,300,720,445 1,797,512,668 70,300,720,445

Unquoted Equity Shares (Fully paid)

IDFC Alternatives Limited 10 219,850 2,000,483,750 219,850 2,000,483,750

IDFC Asset Management Company Limited (669,762 shares purchased during the year)

10 2,679,045 8,737,248,954 2,009,283 6,294,873,879

IDFC AMC Trustee Company Limited (12,501 shares purchased during the year)

10 50,000 789,023 37,499 496,750

IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund limited)

10 440,000,000 4,400,000,000 440,000,000 4,400,000,000

IDFC Securities Limited 10 14,137,200 4,400,973,117 14,137,200 4,400,973,117

IDFC Trustee Company Limited 10 50,000 500,000 50,000 500,000

TOTAL 89,840,715,289 87,398,047,941

(a) Aggregate amount of quoted investments

Cost 70,300,720,445 70,300,720,445

Market value 106,592,501,212 86,640,110,598

(b) Aggregate amount of unquoted investments Cost

19,539,994,844

17,097,327,496

09 LONG TERM LOANS AND ADVANCES

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Advance income tax [net of provision of `17,246,000 (Previous Year ` 11,728,000)] 155,935 156,291

155,935 156,291

10 CASH AND CASH EQUIVALENTS

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Cash and bank balances [see note (a)]

Balance with bank:

In current account 198,776 1,392,246

Others

Balance with bank:

In deposit accounts (original maturity of more than 3 months) 737,400,000 441,500,000

TOTAL 737,598,776 442,892,246

(a) Cash and cash equivalents as referred in Cash Flow Statement.

11 OTHER CURRENT ASSETS

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Interest accrued on deposits 24,208,931 7,059,617

TOTAL 24,208,931 7,059,617



12 INCOME FROM OPERATIONS



` `

Interest on deposits 51,011,225 35,487,207

Dividend from Subsidiary Companies 1,062,209,482 -

TOTAL 1,113,220,707 35,487,207

13 OTHER INCOME



` `

Miscellaneous income 1,150,000 -

TOTAL 1,150,000 -

14 OTHER EXPENSES



` `

Directors sitting fees 500,000 200,000

Commission to directors 2,000,000 1,000,000

Demat charges - 95,761

NSDL charges - 34,200

Printing & stationary - 2,820

Other professional fees 400,640 1,321,369

Notary & franking charges - 1,500

Donations 50,000 -

Service tax written off 358,816 29,920

Miscellaneous expenditure 42,370 6,112

Auditors' remuneration* 210,000 215,000

TOTAL 3,561,826 2,906,682

*Breakup of Auditor’s remuneration

Audit fee 50,000 50,000

Tax audit fees 50,000 50,000

Other services 110,000 115,000

Service tax 31,500 29,920

Service tax written off (31,500) (29,920)

210,000 215,000

15 PROVISIONS & CONTINGENCIESa. There are no litigations claims made by the company or pending on the company.

b. Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provisions is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

16 The Company is engaged in the business of non banking financial services. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of Companies Act, 2013.



17 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:

Holding Company :

IDFC Limited

Subsidiary Company:

IDFC Alternatives Limited

IDFC Asset Management Company Limited

IDFC AMC Trustee Company Limited

IDFC Bank Limited

IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited)

IDFC Securities Limited

IDFC Trustee Company Limited

Key Management Personnel

Chief Executive Officer: Dr Rajeev Uberoi

Chief Financial Office: Mr. Bipin Gemani

Company Secretary : Mr. Ketan Kulkarni

The nature and volume of transactions carried out with the above related party in the ordinary course of business are as follows:

NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP

PARTICULARS CURRENT YEAR PREVIOUS YEAR

` `

Holding Company

IDFC Limited Issue of shares 2,442,400,000 87,849,500,000

Purchase of shares of following companies:

IDFC Alternatives Limited - 2,000,483,750

IDFC Asset Management Company Limited - 6,294,873,879

IDFC AMC Trustee Company Limited - 496,750

IDFC Bank Limited - 70,300,220,445


- 1,520,000,000

IDFC Securities Limited - 4,400,973,117

IDFC Trustee Company Limited - 500,000

Interim dividend paid 781,865,000 -

Fellow Subsidiary:

IDFC Bank Limited Balance in Current Accounts 187,631 786,742

Balance in Deposit Accounts 737,400,000 441,500,000

Interest Income (Net of TDS) 45,910,103 15,827,434

Interest accrued 24,208,931 7,059,617

Dividend received 449,378,167 -

IDFC Alternatives Limited Interest Income - 16,660,479

Inter corporate deposits taken and repaid - 1,557,500,000

Purchase of Investment in IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund limited)

- 1,430,000,000

IDFC Finance Limited Purchase of Investment in IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund limited)

- 150,000,000


Purchase / Subscription of Investment - 1,300,000,000


Dividend received 612,831,315 -



18 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013:

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Profit after tax (`) 1,093,562,881 20,852,525

Weighted average number of equity shares (Nos.) 8,905,447,123 5,942,370,082

Basic & diluted earnings per share (`) 0.123 0.004

Nominal value per share (`) 10 10

19 IDFC Financial Holding Company Limited was incorporated as a Company under the Companies Act, 2013 on November 07, 2014. RBI has granted a certificate dated June 18, 2015 to the Company permitting it to commence and carry on the business of NOFHC (as a non-deposit taking NBFC).

The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBR (PD) CC No.008/03.10.119/2016-17):

(a) Capital to risk assets ratio (CRAR):

PARTICULARS AS AT MARCH 31, 2017 AS AT MARCH 31, 2016

CRAR (%) 100.82% 100.49%

CRAR - Tier I Capital (%) 100.82% 100.49%

CRAR - Tier II Capital (%) - -

Amount of Subordinated Debt considered as Tier-II Capital - -

Amount raised by issue of Perpetual Debt Instruments - -

(b) Details of Investments are set out below:

I Value of Investments


` `

(i) Gross Value of Investments

(a) In India 89,840,715,289 87,398,047,941

(b) Outside India - -

89,840,715,289 87,398,047,941

(ii) Provision for depreciation

(a) In India - -


- -

(iii) Net Value of Investments

(a) In India 89,840,715,289 87,398,047,941


89,840,715,289 87,398,047,941

II Movement of provisions held towards depreciation on investments.

The Company has not made any provisions in the current year and in the previous year.

(c) Asset Liability Management Maturity pattern of certain items of assets and liabilities as on March 31, 2017

PARTICULARS UPTO 30 / 31

DAYS

OVER 1 MONTH

UPTO 2 MONTHS

OVER 2 MONTH

UPTO 3 MONTHS

OVER 3 MONTH &

UPTO 6 MONTH

OVER 6 MONTHS & UPTO

1 YEAR

OVER 1 YEAR

& UPTO 3 YEARS

OVER 3 YEAR

& UPTO 5 YEARS

OVER 5 YEARS TOTAL

` ` ` ` ` ` ` ` `

Deposits - - - - - - - - -

Advances - - - - - - - - -

Investments - - - - - - - 89,840,715,289 89,840,715,289

Borrowings - - - - - - - - -

Foreign Currency assets

- - - - - - - - -

Foreign Currency liabilities

- - - - - - - - -



Asset Liability Management Maturity pattern of certain items of assets and liabilities as on March 31, 2016

PARTICULARS UPTO 30 / 31

DAYS

OVER 1 MONTH

UPTO 2 MONTHS

OVER 2 MONTH

UPTO 3 MONTHS

OVER 3 MONTH &

UPTO 6 MONTH

OVER 6 MONTHS & UPTO

1 YEAR

OVER 1 YEAR

& UPTO 3 YEARS

OVER 3 YEAR

& UPTO 5 YEARS

OVER 5 YEARS TOTAL

` ` ` ` ` ` ` ` `

Deposits - - - - - - - - -

Advances - - - - - - - - -

Investments - - - - - - - 87,398,047,941 87,398,047,941

Borrowings - - - - - - - - -

Foreign Currency assets

- - - - - - - - -

Foreign Currency liabilities

- - - - - - - - -

(d) Investor group wise classification of all investments (Current and Long Term) in shares and securities (both Quoted and Unquoted):


CATEGORY MARKET VALUE / BREAKUP VALUE / FAIR VALUE / NAV

BOOK VALUE NET OF PROVISION

MARKET VALUE / BREAKUP VALUE / FAIR VALUE / NAV


` ` ` `

1. Related Parties

(a) Subsidiaries 121,873,360,037 89,840,715,289 99,584,737,947 87,398,047,941

(b) Companies in the same group - - - -

(c) Other related parties - - - -

2. Other than related Parties - - - -

(e) Exposure to Capital Market

PARTICULARS AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Direct investment in equity shares, convertible bonds, convertible debentures and units of equity-oriented mutual funds the corpus of which is not exclusively invested in corporate debt;

89,840,715,289 87,398,047,941

Advances against shares / bonds / debentures or other securities or on clean basis to individuals for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds;

- -

Advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security;

- -

Advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds does not fully cover the advances;

- -

Secured and unsecured advances to stockbrokers and guarantees issued on behalf of stockbrokers and market makers;

- -

Loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoter's contribution to the equity of new companies in anticipation of raising resources;

- -

Bridge loans to companies against expected equity flows / issues; and - -

All exposures to Venture Capital Funds (both registered and unregistered). - -

TOTAL EXPOSURE TO CAPITAL MARKET 89,840,715,289 87,398,047,941



(f) Provisions and Contingencies

BREAK UP OF ‘PROVISIONS AND CONTINGENCIES’ SHOWN UNDER THE HEAD EXPENDITURE IN PROFIT AND LOSS ACCOUNT

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

` `

Provisions for depreciation on Investment - -

Provision towards Non Performing Advances (NPA) - -

Provision made towards Income tax 17,246,000 11,728,000

Other Provision and Contingencies (with details) - -

Provision for Standard Assets - -

(g) Penalties / fines imposed by the RBI

During the year ended March 31, 2017 there was no penalty imposed by RBI (Previous Year ` Nil).

(h) Considering the nature of the business of the entity and transactions entered during the year ended March 31, 2017 and March 31, 2016 following disclosures required as per NBFC circular DNBR (PD) CC.No.008/03.10.119/2016-17 are not applicable to the Company and hence are not disclosed:

(i) Disclosures regarding Derivatives.

(ii) Disclosures relating to Securitisation.

(iii) Exposure to Real Estate Sector.

(iv) Details of financing of parent company products.

(v) Detail of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC.

(vi) Unsecured Advances.

(vii) Ratings assigned by credit rating agencies and migration of ratings during the year.

(viii) Draw Down from Reserves.

(ix) Concentration of Deposits, Advances, Exposures and NPAs.

(x) Sector-wise NPAs.

(xi) Movement of NPAs.

(xii) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad).

(xiii) Off-balance sheet SPVs sponsored.

(xiv) Disclosure of Complaints.

20 DETAILS OF SPECIFIC BANK NOTES (SBNs) HELD AND TRANSACTED DURING THE PERIOD NOVEMBER 8, 2016 TO DECEMBER 30, 2016 IS PROVIDED IN TABLE BELOW:

PARTICULARS SBNS OTHER DENOMINATION NOTES TOTAL

Closing cash on hand as on November 8, 2016 - - -

Add: Permitted receipts - - -

Less: Permitted payments - - -

Less: Amount deposited in Banks - - -

Closing cash on hand as on December 30, 2016 - - -



21 CORPORATE SOCIAL RESPONSIBILITY (CSR) 1. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year

` 50,000 (Previous Year ` Nil).

2. Amount spent towards CSR during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities is ` 50,000 (Previous Year ` Nil), which comprise of following:

FOR THE YEAR ENDED MARCH 31, 2017 FOR THE YEAR ENDED MARCH 31, 2016

NATURE OF ACTIVITIES IN CASH YET TO BE PAID IN CASH

(I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN CASH

(I.E. PROVISION)

TOTAL

Construction / acquisition of any asset - - - - - -

On purpose other than above (`) 50,000 - 50,000 - - -

22 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


Vinod RaiDirector




IDFC FOUNDATION

U93000DL2011NPL215231

Dr. Rajiv B. Lall

Dr. Ashok Gulati

Ms. Sonalde B. Desai

Mr. Vikram Limaye

(Till July 15, 2017)

Mr. Sunil Kakar

Deloitte Haskins & Sells,


IDFC Bank Limited

6th Floor, The Capital Court

Olof Palme Marg, Munirka

New Delhi – 110067

Tel : +91 11 4331 1000

Fax : +91 11 2671 3129

Website www.idfcfoundation.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Seventh Annual Report together with the audited financial statements for the financial year ended March 31, 2017.

OPERATIONAL REVIEW

IDFC Foundation (“the Company”), a not-for-profit company, within the meaning of Section 8 of the Companies Act, 2013 (erstwhile Section 25 of the Companies Act, 1956), was incorporated in India on March 4, 2011. IDFC Institute (a division of IDFC Foundation) has been set up as a research-focused think / do tank to investigate the political, economic and spatial dimensions of India’s ongoing transition from a low-income state-led country to a prosperous market-based economy.

After the enactment of Companies Act, 2013, the focus of the Company has been re-alinated as per Section 135 of the Companies Act, 2013 read with CSR Rules 2014. IDFC Foundation, as implementing agency, carries out CSR activities as per CSR policy adopted by IDFC and its group Companies in line with the schedule VII of the Companies Act, 2013. The Company primarily focuses on CSR activities as well defined projects or programmes that include promoting and development of (a) livelihoods, (b) rural development projects, (c) promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII of the Companies Act, 2013 and (i) Others;

During the FY17, some of the major projects that the Company has undertaken in pursuit of its CSR policy are given as under:-

¡ Rural development and livelihood program through Financial Inclusion: The Company aims to build a nationwide network of

interoperable Micro ATMs (MATMs) that will significantly improve access for all customers, irrespective of which bank they have an

account with, to basic banking & payments network services. The Company will roll out MATMs in rural districts across the country

and educate people on all aspects of financial literacy, skill these people to operate Aadhar enabled, digitally connected tablets and

other similar devices and support (in the form of a free micro ATM) to all individuals who are selected to become ‘Mitra’ and thereby

creating livelihood and income generating opportunities for people in rural India.

¡ Elimination of Open Defecation and achieving Open Defecation Free Status in Machlipatnam division of Krishna District, AP:

The Company in collaboration with its partner (Tata Trust) has provided Strategic Support to State Government of Andhra

Pradesh in implementing district wide approach for Elimination of Open Defecation and achieving Open Defecation Free Status

in Machlipatnam division of Krishna District. The Company aims to promote toilet construction and generate awareness amongst

community members to change their insanitary behaviours.

¡ Cattle Care Program in Madhya Pradesh and Karnataka: The Company initiated ‘Cattle Care Program’ that focuses on cattle breed

improvement and care through permanent high-quality affordable veterinary infrastructure and temporary cattle camps to enhance

the livelihoods of small and marginal farming families in rural districts of Madhya Pradesh and Karnataka.

¡ Promoting Digital Literacy in Government Schools: The Company aims to promote Digital Literacy among school students

through establishment of Digital Learning Centres (DLC) in 18 government schools of Hoshangabad District of Madhya Pradesh.

The programme is in line with the government’s aim to transform the country into a digitally empowered society and knowledge

economy. The program is aimed at improving learning outcomes of students in classes I to X.

¡ Learning Outcome Improvement Programme in Alwar, Rajasthan: The primary education improvement programme for “Improving

Learning Outcomes in 60 Government Primary Schools in Ramgarh and Kishangarh blocks of Alwar District of Rajasthan” aims at

(i) Improvement in teaching-learning processes through the use of effective pedagogic tools (ii) development of leadership skills

among students through extra-curricular activities, (iii) Improvement in overall school management through strengthening of School

Management Committees (SMCs) (iv) Improvement in the physical environment of the schools.

¡ Developing Handloom and Craft Livelihood in Uttarakhand: The Company developed a Centre of Excellence (COE) for traditional

handloom and craft which will anchor efforts to revive the dying arts and craft of the mountains of Uttarakhand and to provide

artisans living in remote areas critical facilities like skill upgradation, design and product development services, high quality raw

materials, and a common platform for marketing.

¡ Masoom: The Company has been supporting Masoom, an NGO, to implement the “Night School Transformation Programme” and

working towards improving enrollment and learning outcomes at 10 night schools across Mumbai city.

¡ Setting up of Solar Street Lighting and Safe & Clean drinking water in Meghalaya: The Company has installed solar street lights at

the Mawlyngbna village in Meghalaya to help improve the quality of life for communities. With the Solar Street Lights and lighting

up of public spaces, tourists would also be encouraged to spend the night in the village to experience the local culture, which would

significantly improve the livelihood of the villagers. The Company is also making efforts to provide clean drinking water to the

village from natural spring by providing infrastructure to prevent contamination of drinking water at source.

¡ Transforming quality of life in Indian cities and town: Improving access to basic minimum quality of public infrastructure and

services by transforming social infrastructure and service delivery in India’s town and cities.

I D F C F O U N D AT I O N | 3 7

BOARD'S REPORT

¡ Affordable service delivery on water and sanitation: Developing a framework for promoting and delivering affordable water and

sanitation facilities that impact the poor and the under serviced section of the society in the state of Odisha.

¡ Support for affordable and accessible healthcare services: To develop a network of individuals and institutions involved in the

process of digitization and data-work across the country, to improve delivery of affordable and accessible health care services.

¡ Support on improving the competitiveness of Indian economy through jobs and livelihood creation: To create more productive

jobs for India’s rapidly rising workforce by integrating Indian enterprises into global value chains and by creating an enabling

environment for firms to expand, grow and hire more workers.

¡ Improvement of infrastructure at 2 primary schools and anganwadi centre at Sanghakhedakalan Village, Hoshangabad:

The Company has improved physical infrastructure including classroom upgradation and levelling & paving of the ground at 2

primary schools in villages covered by the Centre’s SansadAdarshGram Yojana at SangakhedaKalan, HoshangabadDist, M.P.

¡ Research & Studies: IDFC Institute’s research is structured around two pillars – Transitions and State Capacity. The research under

“Transitions” evaluates the multiple dimensions of India’s transition from rural to urban, informal to formal, farm to non-farm and a

low to high productivity economy with its corresponding impact on poverty reduction. Further, this research also aims to establish

the centrality of well-paying and secure jobs to economic development and poverty alleviation. Research under the second pillar,

“State Capacity” is focused on enhancing institutional capacity within the government, for robust implementation and strong

governance. The objective is to minimise the “transmission” loss between the intent layer of public policy and the execution layer

of governance. With this aim, IDFC Institute works closely with various stakeholders, including the government, to plug this loss

through innovative solutions grounded in actionable research and recommendations.


(AMOUNT IN `)

PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2017

FOR THE YEAR ENDEDMARCH 31, 2016

Total Income 178,446,442 169,751,030


Surplus 1,177,121 12,097,031



BOARD OF DIRECTORS

The Board of Directors oversee the management functions to ensure that these are effective and enhance Shareholder value. The Board’s mandate inter alia is to have an oversight of the Company’s strategic direction, to review the performance, assess the adequacy of risk management and mitigation measures, to ensure regulatory compliance as well as high standards of governance and safeguard interests of all stakeholders. The Board comprises of five Directors with two of its Directors being Independent. The Independent Directors (IDs) are eminent personalities with significant expertise in the fields of agriculture, education and economy. None of the Directors are related to any other Director or employee of the Company.

BOARD MEETINGS

The Board of Directors of the Company meets at regular intervals to discuss and decide on CSR activities and strategy apart from the regular board business. During the year, the Board met six (6) times on April 27, 2016, June 23, 2016, August 10, 2016, October 26, 2016, January 24, 2017 and March 29, 2017 and the intervening period between two Board meetings was well within the maximum gap of 120 days as prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY17 is given in the Table 1.


AUDIT COMMITTEE

The Audit Committee comprises of three Members, majority being IDs. The Committee is headed by Dr. Ashok Gulati and Ms. Sonalde B. Desai and Mr. Sunil Kakar as its members. The Audit Committee of the Company was re-constituted with effect from January 24, 2017 in view of the resignation of Mr. Anil Baijal, Chairperson with effect from December 30, 2016. During the year, the Audit Committee met five (5) times on April 27, 2016, June 23, 2016, August 10, 2016, October 26, 2016 and January 24, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The Committee meets, inter alia, to review the accounts of the Company, transactions with related party, and to discuss the audit findings and recommendations of the internal and statutory auditors. The composition and attendance details of the Audit Committee Meetings held during FY17 is given in Table 1.

Attendance of Directors at Board and Audit Committee Meeting(s)

Table 1 shows attendance of Directors at the Board Meetings and Audit Committee meeting(s) held for the year ended March 31, 2017. Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) required to be attended.


BOARD'S REPORT

Table 1

NAME OF MEMBER DIN CATEGORY BOARD MEETING AUDIT COMMITTEE

Mr. Anil Baijal* 01608892 Chairperson & ID 4/4 4/4

Dr. Rajiv B. Lall 00131782 Director 4/6 -

Dr. Ashok Gulati** 07062601 Chairperson of Audit Committee & ID

4/6 0/1

Ms. Sonalde B. Desai 07124672 ID 4/6 3/5

Mr. Vikram Limaye*** 00488534 Director 5/6 -

Mr. Sunil Kakar 03055561 Director 6/6 5/5

* Resigned from the Board and Audit Committee w.e.f. December 30, 2016** Appointed as Chairperson of Audit Committee w.e.f. January 24, 2017*** Tendered his resignation w.ef. July 15, 2017

DIRECTORS / KEY MANAGERIAL PERSONNEL

During the year, Mr. Anil Baijal resigned w.e.f. December 30, 2016, in view of his appointment as Lieutenant Governor of Delhi. The Board placed on record its sincere appreciation for the valuable contribution and services rendered by Mr. Anil Baijal during his tenure in the Company.

The Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013 are as follows:

1. Mr. Animesh Kumar - Chief Executive Officer (“CEO”)*

2. Mr. Gopal Chandra Mondal - Chief Financial Officer

* Mr. Animesh Kumar, CEO, had resigned from the Company w.e.f. May 5, 2017. The Board placed on its sincere appreciation for the valuable contribution and services rendered by Mr. Kumar during his tenure in the Company.

Dr. NS Rajan was appointed as the CEO in the capacity of Key Managerial Personnel (“KMP”) of the Company w.e.f. May 10, 2017.

During the year, Ms. Priyanka Agrawal resigned as the Company Secretary in the capacity of KMP w.e.f. October 26, 2016.

RETIREMENT BY ROTATION

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. Rajiv B. Lall (DIN: 00131782) would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Dr. Rajiv B. Lall (DIN: 00131782) at the ensuing AGM.


As per the provisions of the Companies Act, 2013, Independent Directors are not liable to retire by rotation and the terms of appointment of Independent Directors are governed by the provisions of Companies Act, 2013. The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.

STATUTORY AUDITORS

The Shareholders of the Company at their meeting held on September 27, 2016 had approved the appointment of Deloitte Haskins & Sells (DHS), Chartered Accountants, (Registration No. 117365W) as Statutory Auditors for a period of 1 year to hold office from the conclusion of the 6th AGM up to the conclusion of the 7th AGM of the Company. There was no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report. DHS will retire at the conclusion of the ensuing AGM.

Accordingly, the Audit Committee and Board of Directors of the Company at their respective meetings held on April 26, 2017 recommended the appointment of M/s Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”)as the Statutory Auditors of the Company, in place of Deloitte Haskins & Sells, Chartered Accountants, for a period of five years from the conclusion of the 7th Annual General Meeting (AGM) of the Company to be held for FY17, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis.

PWC have confirmed that their appointment, if made, would be in conformity with the provisions of Section 141 of the Companies Act, 2013 and have also indicated their willingness to be appointed.

The Resolution seeking approval of appointment of PWC is included in the Notice of the ensuing Annual General Meeting. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company.


BOARD'S REPORT


As per Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related Party Transactions” is also uploaded on the website of the Company. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company. As per Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are also included in the Notes to Accounts.

SUBSIDIARY COMPANIES / JOINT VENTURES / ASSOCIATE COMPANIES

As on March 31, 2017, the Company has following subsidiaries, joint ventures and associate companies:-

Subsidiary

(i) India PPP Capacity Building Trust (I-Cap)

Joint Venture(i) Infrastructure Development Corporation (Karnataka) Limited (iDeCK),

(ii) Delhi Integrated Multi Modal Transit System Limited (DIMTS),

(iii) Uttarakhand Infrastructure Development Company Limited (Under Liquidation)

In addition, iDeCK, a joint venture of the Company, has one JV company namely Rail Infrastructure Development Company (Karnataka) Limited.

A statement containing salient features of the financial statement and all other requisite details of all associates / joint venture companies in the format AOC-I is appended as Annexure I. The statement also provides details of performance, financial position of each subsidiary.


The Company had 14 employees as on March 31, 2017. The information required pursuant to section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon a request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and other entitled thereto, excluding information on employees’ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any Member is interested in obtaining copy thereof, such Member may write to the Company in this regard.

PUBLIC DEPOSITS

During the year under review, your Company has neither invited nor accepted any Public Deposits.


There were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.

FOREIGN EXCHANGE EXPENDITURE AND EARNINGS

The particulars regarding foreign exchange expenditure and earnings are furnished in Note no. 20 and 21 respectively in the Notes forming part of the Financial Statements.


Since the Company does not own any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

The Company has in place adequate internal control systems commensurate with its size and operation of the Company.


As per Section 134(3)(l) of Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2017 till the date of this report.


There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNAL

There are no significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.


BOARD'S REPORT

ANTI-SEXUAL HARASSMENT POLICY

The company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.



(a) in the preparation of financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2017 and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual financial statements on a going concern basis; and

(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The details forming part of the extract of the Annual Return in form MGT-9 are annexed herewith as Annexure II.

ACKNOWLEDGEMENTS

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group Companies.

FOR AND ON BEHALF OF DIRECTORS

Dr. Rajiv B. LallChairperson

New Dehli, June 30, 2017


(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of the Companies (Accounts) Rules, 2014)

Statement containing sailent features of the financial statement of subsidiaries/associate companies/joint ventures

PART “A”: SUBSIDIARIES

(Information in respect of each subsidiary to be presented with amounts in `)

1 Sl. No./CIN NA

2 Name of the subsidiary India PPP Capacity Building Trust

3 Date since when subsidiary was acquired March 23, 2011

4 Reporting period for the subsidiary concerned, if different from the holding company's reporting period NA

5 Reporting currency and exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries

NA

6 Trust's capital 400

7 Reserves & surplus 1,536,178

8 Total assets -

9 Total liabilities -

10 Investments -

11 Turnover 2,254,773

12 Profit before taxation 1,983,923

13 Provision for taxation 448,000

14 Profit after taxation 1,535,923

15 Proposed Dividend -

16 Extent of unit holding in % 100


PART “B”: ASSOCIATES AND JOINT VENTURES

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

SL. NO.

NAME OF ASSOCIATES/JOINT VENTURES DELHI INTIGRATED MULTI MODAL TRANSIT SYSTEM

LIMITED

INFRASTRUCTURE DEVELOPMENT CORPORATION

(KARNATAKA) LIMITED

RAIL INFRASTRUCTURE DEVELOPMENT COMPANY

(KARNATAKA) LIMITED (THROUGH IDECK)

1 Latest audited Balance Sheet Date March 31, 2017 March 31, 2017 March 31, 2017

2 The date since when Associate/Joint Ventures was acquired

March 23, 2011 March 23, 2011 March 23, 2011

3 Shares of Associate/Joint Ventures held by the company on the year end

50% 49.49% 24.71%

Numbers of shares 73,045 4,948,996 1,237

Amount of Investment in Associates/Joint Venture 147,289,740 154,832,554 123,725

Extent of Holding % 50% 49.49% 24.71%

4 Description of how there is significant influence Joint Venture Joint Venture Joint Venture

5 Reason why the associate/joint venture is not consolidated NA NA NA

6 Net worth attributable to Shareholding as per latest audited Balance Sheet

458,184,322 307,166,161 17,155,233

7 Profit / (Loss) for the year 108,123,791 51,186,928 7,392,057

i. Considered in Consolidation 54,061,896 25,332,411 1,826,577

i. Not Considered in Consolidation 54,061,895 25,854,517 5,565,480 Notes

(i) Names of associates or joint ventures which are yet to commence operations. NA

(ii) Names of associates or joint ventures which have been liquidated or sold during the year. Uttarakhand Infrastructure Development Company Limited (Under Liquidation) - joint venture of IDFC Foundation

For and on behalf of the Board of Directors ofIDFC Foundation

Vikram LimayeDirector

Sunil KakarDirector

Place : New DehliDate : June 30, 2017

Gopal Chandra MondalChief Financial Officer



As on the financial year ended on March 31, 2017[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

REGISTRATION AND OTHER DETAILS:

i) CIN U93000DL2011NPL215231

ii) Registration Date 04/03/2011

iii) Name of the Company IDFC FOUNDATION

iv) Category / Sub-Category of the Company A not for profit company, within the meaning of Section 8 of the Companies Act, 2013.

v) Address of the Registered office and contact details The Capital Court, 6th FloorOlof Palme Marg, MunirkaNew Delhi – 110067Tel : +91 11 4331 1000


vii) Name, Address and Contact details of Registrar and Transfer Agent, if any N.A.

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY


SR. NO.

NAME AND DESCRIPTION OF MAIN PRODUCTS / SERVICES NIC CODE OF THE PRODUCT / SERVICE % TO TOTAL TURNOVER OF THE COMPANY

1. IDFC Foundation ("the Company"), a not-for-profit company, within the meaning of Section 8 of the Companies Act, 2013 (erstwhile Section 25 of the Companies Act, 1956 and also registered under Section 80G and 12AA of the Income Tax Act, 1961 as a charitable organisation.

IDFC Foundation receives CSR contribution from IDFC Limited and its group companies for carrying out CSR activities.

100

PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SR.

NO.

NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING/ SUBSIDIARY/

ASSOCIATE

% OF SHARES

HELD

APPLICABLE

SECTION

1 IDFC Limited L65191TN1997PLC037415 Holding 100 Section 2(46)

2. India PPP Capacity Building Trust Subsidiary 100 Section 2(87)

3. Delhi Integrated Multi Modal Transit System Ltd.

U60232DL2006PLC148406 Joint Venture 50 Section 2(6)

4. Infrastructure Development Corporation (Karnataka) Ltd.

U45203KA2000PLC027382 Joint Venture 49.49 Section 2(6)

5. Rail Infrastructure Development Company (Karnataka) Limited (Through iDeCK)

U60100KA2000PLC028171 Joint Venture* 24.71 Section 2(6)

6. Uttarakhand Infrastructure Development Company Limited (Under Liquidation)

U65993UR2002SGC027065 Joint Venture 49.90 Section 2(6)

*Joint venture of Infrastructure Development Company (Karnataka) Limited.

SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY)


CATEGORY OF SHAREHOLDERS NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR NO. OF SHARES HELD AT THE END OF THE YEAR % CHANGE DURING



A. Promoters

Indian

a) Bodies Corp. NIL 13,000,000 13,000,000 100 NIL 13,000,000 13,000,000 100 NIL

SUB-TOTAL (A) :- NIL 13,000,000 13,000,000 100 NIL 13,000,000 13,000,000 100 NIL

Total shareholding of Promoter (A)

NIL 13,000,000 13,000,000 100 NIL 13,000,000 13,000,000 100 NIL

B. Public Shareholding NIL NIL NIL NIL NIL NIL NIL NIL NIL

C. Shares held by Custodian for GDRs & ADRs


Grand Total (A+B+C) NIL 13,000,000 13,000,000 100 NIL 13,000,000 13,000,000 100 NIL

ANNEXURE IIFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN



SR NO

SHAREHOLDER’S NAME SHAREHOLDING AT THE BEGINNING OF THE YEAR SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR


COMPANY

%OF SHARES PLEDGED/



COMPANY

%OF SHARES PLEDGED/


1. IDFC Limited & its nominees

13,000,000 100 NIL 13,000,000 100 NIL NIL

Total 13,000,000 100 NIL 13,000,000 100 NIL NIL

(iii) Change in Promoters’ Shareholding (please specify, if there is no change): NO CHANGE

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):

NOT APPLICABLE


I. INDEBTEDNESS


II. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

A. Remuneration to Managing Director, Whole-time Directors and/or Manager: NIL

B. Remuneration to other directors: IN `

SR. NO.

PARTICULARS OF REMUNERATION NAME OF DIRECTORS TOTAL AMOUNTRAJIV

B LALLVIKRAM LIMAYE

SUNIL KAKAR

ANIL BAIJAL

ASHOK GULATI

SONALDE B DESAI

1. Independent Directors

Fee for attending Board & committee meetings NIL NIL NIL 252,650 126,325 212,450 591,425

Commission NIL NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL NIL

TOTAL (1) NIL NIL NIL 252,650 126,325 212,450 591,425

2. Non-Executive Directors NIL NIL NIL NIL NIL NIL NIL

Fee for attending board committee meetings NIL NIL NIL NIL NIL NIL NIL

Commission NIL NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL NIL

TOTAL (2) NIL NIL NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) NIL NIL NIL 252,650 126,325 212,450 591,425

Overall Ceiling as per the Act

Note: Aforesaid payment of sitting fees is within overall limits prescribed under the Companies Act, 2013.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD. IN `

SR. NO.

PARTICULARS OF REMUNERATION KEY MANAGERIAL PERSONNEL TOTAL

CEO CFO (UPTO

SEPTEMBER 30, 2016)

COMPANY SECRETARY

(UPTO SEPTEMBER 30, 2016)

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 NIL 974,616 630,744 1,605,360

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 16,200 - 16,200

(c) Profits in lieu of salary under section 17(3) Income – tax Act, 1961 NIL NIL NIL NIL

2. Stock Option NIL NIL NIL NIL

3. Sweat Equity NIL NIL NIL NIL

4. Commission NIL NIL NIL NIL

– as % of profit

– others, specify

5. Others, please specify 112,621 62,047 174,668

TOTAL (A) NIL 1,103,437 692,791 1,796,228

During FY17 CFO & CS were paid bonus of ` 7.5 lacs & ` 5 lacs, respectively for FY16.

III. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: NIL



INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF IDFC FOUNDATION

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of IDFC FOUNDATION (“the Company”), which comprise the Balance Sheet as at 31 March, 2017, the Statement of Income and Expenditure and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these standalone financial statements based on our audit.


We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2017, and its surplus and its cash flows for the year ended on that date.


1. As required by Section 143 (3) of the Act, we report that:



c) The Balance Sheet, the Statement of Income and Expenditure, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31 March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.



f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting


i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 26 to the standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses – Refer Note 27(b) to the standalone financial statements;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company – Refer Note 28 to the standalone financial statements; and

iv. The Company has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated 8 November, 2016 of the Ministry of Finance, during the period from 8 November 2016 to 30 December 2016; and such disclosures are in accordance with the books of account maintained by the Company – Refer Note 14 to the standalone financial statements

2. The Companies (Auditor’s Report) Order, 2016 (“the CARO 2016 Order”) issued by the Central Government in terms of Section

143(11) of the Act, is not applicable to the Company in term of clause 1(2)(iii) of the CARO 2016 Order.

For Deloitte Haskins & Sells


(Firm’s Registration No. 117365W)

Kalpesh J Mehta

(Partner)

(Membership No. 48791)




(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)


We have audited the internal financial controls over financial reporting of IDFC FOUNDATION (“the Company”) as of 31 March, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.




Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatement due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Deloitte Haskins & Sells


(Firm’s Registration No. 117365W)

Kalpesh J Mehta

(Partner)





NOTES

(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016


Shareholders' funds

a. Share capital 3 130,000,000 130,000,000

b. Reserves and surplus 4 47,462,347 46,285,226

Current liabilities

a. Trade payables 5

i. total outstanding dues to micro enterprises and small enterprises - -

ii. total outstanding dues to creditors other than micro enterprises and small enterprises

79,626,745 13,585,174

b. Other current liabilities 6 740,564,659 769,565,376

c. Short-term provisions 7 - 2,288,225

TOTAL 997,653,751 961,724,001

ASSETS

Non-current assets

a. Fixed assets

i. Tangible assets 9(a) 11,378,404 1,585,236

ii. Intangible assets 9(b) 45,614 75,152

b. Non-current investments 8 302,122,782 303,822,782

c. Long-term loans and advances 10 30,814,777 24,827,162

d. Other non-current assets 11 750,000 -

Current assets

a. Current investments 12 66,625,884 271,863,203

b. Trade receivables 13 - 1,435,548

c. Cash and cash equivalents 14 298,325,616 357,431,170

d. Short-term loans and advances 10 4,154,282 490,060

e. Other current assets 11 283,436,392 193,688

TOTAL 997,653,751 961,724,001

See accompanying notes forming part of the financial statements. 1 to 31


For Deloitte Haskins & SellsChartered Accountants

For and on behalf of the Board of Directors ofIDFC FOUNDATION

Kalpesh J MehtaPartner


Sunil KakarDirector


Place : MumbaiDate : June 30, 2017

Place : New DelhiDate : June 30, 2017


STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED MARCH 31, 2017

NOTES

(`)



(I) INCOME

Revenue from operations 15 125,005,000 124,025,269

Other income 16 53,441,442 45,725,761

TOTAL INCOME 178,446,442 169,751,030

(II) EXPENDITURE

Employee benefits expense 17 25,953,320 44,449,133

Finance costs 18 - 40,055

Depreciation and amortisation expense 9 2,438,593 1,250,312

Other expenses 19 148,877,408 111,914,499

TOTAL EXPENDITURE 177,269,321 157,653,999

(III) SURPLUS FOR THE YEAR FROM CONTINUING OPERATIONS [(I)- (II)] 1,177,121 12,097,031

(IV) EARNINGS PER SHARE (NOMINAL VALUE OF ` 10 PER SHARE)

Basic and diluted (`) 24 0.09 0.93

See accompanying notes forming part of the financial statements. 1 to 31






Sunil KakarDirector






NOTES

(`)




Surplus before tax 1,177,121 12,097,031

Adjustments for :

Depreciation and amortisation expense 2,438,593 1,250,312

Provision for diminution in value of investments - 1,896,996

Loss on fixed assets sold / scrapped / written off 3,631 9,472

Bad trade and other receivables, loans and advances written off 1,310,157 387,590

Liabilities no longer required written back (336,900) -

Interest income from bank on deposits (26,775,256) (36,935,764)

Profit on redemption of non-current investments - (2,844,223)

Loss on disposal of long-term investment 63,501 -

Net gain on sale of current investments (25,762,681) (5,738,591)

Changes in working capital:

Adjustments for (increase)/decrease in operating assets

Trade receivables 125,391 4,392,080

Short-term loans and advances (3,664,222) 3,648,729

Long-term loans and advances - (10,000,000)

Other current assets (265,456,079) -

Adjustments for increase/(decrease) in operating liabilities

Trade payables 66,378,471 (3,696,377)

Other current liabilities (29,000,717) 129,846,252

Cash (used in) / generated from operations (279,498,990) 94,313,507

Net income- tax paid (8,275,840) (10,712,432)

NET CASH FLOW (USED IN) / FROM OPERATING ACTIVITIES (A) (287,774,830) 83,601,075


Capital expenditure on fixed assets (12,463,090) (326,142)

Proceeds from sale of fixed assets 257,236 354,496

Purchase of current investments - (269,365,939)

Proceeds from sale of long-term investments 1,636,499 11,136,389

Proceeds from sale of current investments 231,000,000 11,553,095

Interest received from banks 8,988,631 45,656,031

Bank balance not considered as cash and cash equivalents (net):

Placed (750,000) -

Matured - 700,000

NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES (B) 228,669,276 (200,292,070)


NET CASH FLOW USED IN FINANCING ACTIVITIES (C) - -

NET DECREASE IN CASH AND CASH EQUIVALENTS (A)+(B)+(C) (59,105,554) (116,690,995)

Cash and cash equivalents as at the beginning of the year 14 357,431,170 474,122,165

Cash and cash equivalents as at the end of the year 14 298,325,616 357,431,170

(59,105,554) (116,690,995)

See accompanying notes forming part of the financial statements 1 to 31






Sunil KakarDirector




NOTES FORMING PART OF THE FINANCIAL STATEMENTS


01 COMPANY OVERVIEWIDFC Foundation (“the Company”), a not for profit company, within the meaning of Section 8 of the Companies Act, 2013 (earlier Section 25 of the Companies Act, 1956), was incorporated in India on 4 March, 2011.

The Company is a wholly-owned subsidiary of IDFC Limited and managed by the nominees of IDFC Limited and Independent directors. The primary focus of the Company is to contribute to the development of infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society) and in developing social infrastructure (education and healthcare). The Company also oversees the working of its joint ventures with the state governments of Karnataka and Delhi.

Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, the Company, as an implementing agency, has been carrying out Corporate Social Responsibility (‘CSR’) activities as per CSR policy adopted by IDFC Limited and its group Companies in line with the Schedule VII of the Companies Act, 2013. The Company primarily focuses on CSR activities as well defined projects or programmes that includes promoting and development of (a) livelihoods, (b) rural development projects, (c) promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII and (i) Others.


2.1 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles

in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the

Act’) and the relevant provisions of the Act, The financial statements have been prepared on accrual basis under the historical cost

convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the

previous year unless stated otherwise.

2.2 USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and

assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income

and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are

prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the

estimates are recognised in the periods in which the results are known / materialise.

2.3 INVESTMENTS

Non-current investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such

investments.

Current investments are carried individually, at the lower of cost and fair value.

2.4 TANGIBLE FIXED ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less

accumulated depreciation. Income or expenditure arising from derecognition of fixed assets are measured as difference between

the net disposal proceeds and the cost of the assets less accumulated depreciation upto the date of disposal and are recognised in

the Statement of Income and Expenditure.

2.5 INTANGIBLE ASSETS

Intangible assets comprising of computer software are stated at cost of acquisition, including any cost attributable for bringing the

asset to its working condition, less accumulated amortisation. Any technology support cost or annual maintenance cost for such

software is charged annually to the Statement of Income and Expenditure.

2.6 DEPRECIATION AND AMORTISATION

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets has been provided on written down value method as per the useful life prescribed in Schedule

II to the Companies Act, 2013 except in respect of the following category of assets, in whose case the life of the assets has been

assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the

operating conditions of the asset, past history of replacement etc.:

- Mobile phones - 2 years

- Cost of improvements to leasehold premises is amortised over the remaining period of lease of the premises.

- Intangible assets are being amortised over the estimated useful life over a period of six years on the written down value method.



- Assets costing less than ` 5,000 individually have been fully depreciated in the year of purchase

- Depreciation on additions during the year is provided on a pro-rata basis.

2.7 CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity

of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of

cash and which are subject to insignificant risk of changes in value.

2.8 CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby surplus / (deficit) before tax is adjusted for the effects of transactions

of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating,

investing and financing activities of the Company are segregated based on the available information.

2.9 EMPLOYEE BENEFITS

(i) Defined contribution plans

The Company’s contribution to provident fund, superannuation fund and National Pension Scheme are considered as defined contribution plans and are charged to the Statement of Income and Expenditure as they fall due, based on the amount of contribution required to be made and when services are rendered by the employees.

(ii) Defined benefit plan

The net present value of the Company’s obligation towards gratuity to employees is funded and actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Income and Expenditure for the year.

(iii) Compensated absences

Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Income and Expenditure for the year.

2.10 REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be


(a) Voluntary Contribution:

(i) Contributions received other than for corpus donation are recognised as income in the year of receipt.

(ii) Contributions received as corpus donations are credited to ‘Fund held in corpus donation’ in the Balance sheet. Such contributions are transferred to Statement of Income and Expenditure as per the direction of the management for carrying out the activities of the Company.

(b) Income from advisory / consultancy and policy advocacy services are recognised on accrual basis based on percentage of completion method on rendering of services.

(c) Interest income on savings bank accounts and fixed deposits are accounted on accrual basis.

(d) Profit on redemption of mutual funds/trust units is accounted on realisation basis.

(e) Dividend is accounted when the right to receive is established.

2.11 INCOME TAX

The Company has been granted exemption from Income Tax under section 12A read with section 12AA of the Income Tax Act, 1961.

2.12 OPERATING LEASES

Leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases.

Amount due under the operating leases are charged to the Statement of Income and Expenditure, on a straight-line method, over

the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the Act. Initial direct costs

incurred specifically for operating leases are recognised as expense in the year in which they are incurred.

2.13 FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS

Transactions in foreign currencies of the Company are accounted at the exchange rates prevailing on the date of the transaction

or at rates that closely approximate the rate at the date of the transaction. Foreign currency monetary items outstanding at



the Balance Sheet date are reported using the closing rate. Gain or loss resulting from the settlement of such transactions and

translations of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and

Expenditure.

2.14 EARNINGS PER SHARE

Basic earnings per share is computed by dividing the surplus / (deficit) after tax by the weighted average number of equity shares

outstanding during the year. Diluted earnings per share is computed by dividing the surplus / (deficit) after tax as adjusted for

expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered

for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the

conversion of all dilutive potential equity shares.

2.15 IMPAIRMENT OF ASSETS

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment, if any indication of

impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount.

The impairment loss is recognised as an expense in the Statement of Income and Expenditure, unless the asset is carried at revalued

amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation

reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the

future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods

no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Income and Expenditure,

to the extent the amount was previously charged to the Statement of Income and Expenditure. In case of revalued assets such

reversal is not recognised.

2.16 PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow

of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding

retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle

the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best

estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.

2.17 SERVICE TAX INPUT CREDIT

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when

there is reasonable certainty in availing / utilising the credits.

2.18 OPERATING CYCLE

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation

in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its

assets and liabilities as current and non-current.



03 SHARE CAPITAL


NUMBER (`) NUMBER (`)

AUTHORISED

Equity shares of ` 10 each with voting rights 20,000,000 200,000,000 20,000,000 200,000,000

ISSUED, SUBSCRIBED AND FULLY PAID-UP

Equity shares of ` 10 each with voting rights 13,000,000 130,000,000 13,000,000 130,000,000

(All the above shares are held by IDFC Limited, the Holding Company and its nominees)

TOTAL 13,000,000 130,000,000 13,000,000 130,000,000

(a) Reconciliation of the number of shares and amount outstanding as at the beginning and at the end of the year.



Outstanding as at the beginning of the year 13,000,000 130,000,000 13,000,000 130,000,000

Issued during the year - - - -

Outstanding as at the end of the year 13,000,000 130,000,000 13,000,000 130,000,000


The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share and ranks pari passu.

As per clause X of Memorandum of Association (MoA) of the Company, in the event of liquidation of the Company, the holder of equity shares will not be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The amount remaining, if any, shall be given or transferred to such other Company having similar objects, to be determined by the member of the Company at or before the time of dissolution or in default thereof by the High Court of Judicature that has or may acquire jurisdiction in the matter.




IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%

TOTAL 13,000,000 100% 13,000,000 100%

(d) Details of shares held by the holding company:



IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%

TOTAL 13,000,000 100% 13,000,000 100%

04 RESERVES AND SURPLUS

(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

SURPLUS IN THE STATEMENT OF INCOME AND EXPENDITURE

Opening balance 46,285,226 34,188,195

Surplus for the year 1,177,121 12,097,031

TOTAL 47,462,347 46,285,226



05 TRADE PAYABLES

(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

TRADE PAYABLES

- total outstanding dues of micro enterprises and small enterprises [see note 30] - -

- total outstanding dues of creditors other than micro enterprises and small enterprises

Other trade payables 79,626,745 13,585,174

TOTAL 79,626,745 13,585,174


(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

Amount payable to a related party [see note 25 (b)] 187,364,000 195,000,000

Fund held in corpus donation 551,553,479 572,786,445

Statutory dues 1,282,629 1,778,931

Retention money 364,551 -

TOTAL 740,564,659 769,565,376

07 SHORT-TERM PROVISIONS

(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

Provision for income tax (net of advances of ` 6,261,775) - 2,288,225

TOTAL - 2,288,225

08 NON-CURRENT INVESTMENTS

FACE VALUE AS AT MARCH 31, 2017 AS AT MARCH 31, 2016

(`) QUANTITY (`) QUANTITY (`)

INVESTMENTS (AT COST) (UNQUOTED)

A. Investment in equity instruments fully paid up

- jointly controlled entities

Delhi Integrated Multi-Modal Transit System Limited 1,000 73,045 147,289,740 73,045 147,289,740

Infrastructure Development Corporation (Karnataka) Limited

10 4,948,996 154,832,554 4,948,996 154,832,554

Uttarakhand Infrastructure Development Company Limited ('UDeC') [see note (a)]

10 - - 239,517 4,618,320

B. Other non-current investments - Investment in trust units

India PPP Capacity Building Trust - partially paid [` 200 paid up (Previous year ` 200 paid up)]

1,000 2 488 2 488

Gross Total 302,122,782 306,741,102

Less: Provision for diminution in value of investment - 2,918,320

NET TOTAL 302,122,782 303,822,782

(a) During the year, the Company has received ` 1,636,499 as against its 49.9% shareholding in JV company i.e. Uttarakhand Infrastructure Development Company Limited (UDeC) towards the final distribution of suplus assets under voluntary winding up of UDeC as per Section 484 of the Companies Act, 1956. Accordingly loss on disposal of long-term investments of ` 63,501 has been charged in the Statement of Income and Expenditure.



09 FIXED ASSETS

(a) Tangible assets (`)

GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

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Furniture and

fixtures

106,776 628,683 - 735,459 55,416 110,026 - 165,442 570,017 51,360

(Previous year) (106,776) - - (106,776) (37,411) (18,005) - (55,416) (51,360) (69,365)

Vehicles 2,527,367 457,182 2,070,185 1,539,309 272,326 314,471 1,497,164 573,021 988,058

(Previous year) (2,928,396) - (401,029) (2,527,367) (1,143,165) (484,672) (88,528) (1,539,309) (988,058) (1,785,231)

Office equipment 470,600 724,470 268,840 926,230 337,964 235,905 219,672 354,197 572,033 132,636

(Previous year) (551,313) (62,147) (142,860) (470,600) (210,080) (228,984) (101,100) (337,964) (132,636) (341,233)

Leashold

improvements

- 10,315,257 - 10,315,257 - 1,379,946 - 1,379,946 8,935,311 -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

Computers 1,909,210 794,680 337,240 2,366,650 1,496,028 410,852 268,252 1,638,628 728,022 413,182

(Previous year) (1,706,582) (263,995) (61,367) (1,909,210) (1,077,922) (469,766) (51,660) (1,496,028) (413,182) (628,660)

TOTAL 5,013,953 12,463,090 1,063,262 16,413,781 3,428,717 2,409,055 802,395 5,035,377 11,378,404 1,585,236

(Previous Year) (5,293,067) (326,142) (605,256) (5,013,953) (2,468,578) (1,201,427) (241,288) (3,428,717) (1,585,236) (2,824,489)

(b) Intangible assets (`)

GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

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16

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31,

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16

Computer software 161,763 - - 161,763 86,611 29,538 - 116,149 45,614 75,152

(Previous year) (161,763) - - (161,763) (37,726) (48,885) - (86,611) (75,152) (124,037)

TOTAL 161,763 - - 161,763 86,611 29,538 - 116,149 45,614 75,152

(Previous Year) (161,763) - - (161,763) (37,726) (48,885) - (86,611) (75,152) (124,037)

GRAND TOTAL 5,175,716 12,463,090 1,063,262 16,575,544 3,515,328 2,438,593 802,395 5,151,526 11,424,018 1,660,388

(Previous Year) (5,454,830) (326,142) (605,256) (5,175,716) (2,506,304) (1,250,312) (241,288) (3,515,328) (1,660,388) (2,948,526)

10 LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD UNLESS STATED OTHERWISE)(`)


NON CURRENT CURRENT NON CURRENT CURRENT

Security deposits 10,000,000 600,000 10,000,000 -

Advance payment of income tax (net of provision of ` 8,550,000 (Previous year ` Nil))

20,814,777 - 14,827,162 -

Balances with Government authorities- CENVAT credit receivable

- - - 8,882

Receivable from gratuity fund trust - 3,088,915 - 73,379

[Net of payable to fund of ` Nil (Previous year ` 367,362)]

Other loans and advances - 465,367 - 407,799

TOTAL 30,814,777 4,154,282 24,827,162 490,060



11 OTHER ASSETS(`)


NON CURRENT CURRENT NON CURRENT CURRENT

Interest accrued on fixed deposits - 17,980,313 - 193,688

Contractually reimbursable expenses - 425,770 - -

Micro ATMs for financial literacy and digital skill development (in hand)

- 265,030,309 - -

Bank balances in earmarked accounts*

- Balances held as margin money (deposit accounts)* 750,000 - - -

750,000 283,436,392 - 193,688

* Fixed deposits are under lien with banks against bank guarantees and are restricted from being exchanged or used to settle a liability for more than 12 months from the balance sheet date.

12 CURRENT INVESTMENTS (AT LOWER OF COST AND FAIR VALUE, UNLESS OTHERWISE STATED)


(`) QUANTITY (`) QUANTITY (`)

Trade investments (Unquoted)

(At lower of cost and fair value, unless otherwise stated)

Investment in trust securities (fully paid)

India Infrastructure Initiative Trust [see note (i)] 1,000 212 309,241 1,712 2,497,264

Investment in mutual fund

IDFC Corporate Bond Fund Direct Plan - Growth 10 6,631,664 66,316,643 26,936,594 269,365,939

TOTAL 66,625,884 271,863,203

(a) Aggregate amount of unquoted investments 66,625,884 271,863,203

(b) Market value of unquoted investments 74,380,083 274,349,209

(i) During the year, the investment in India Infrastructure Initiative Trust (“Triple I Trust”) has been further reduced to 212 units (Previous year 1,712 units) on account of partial redemption of 1,500 units at lump-sum amount of ` 6,000,000. The gain of ` 3,811,977 has been recognised as income in the Statement of Income and Expenditure.

13 TRADE RECEIVABLES (UNSECURED) (CONSIDERED GOOD, UNLESS STATED OTHERWISE)

(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

Trade receivables outstanding for a period exceeding six months from the date they were due for payment

- Unsecured, considered good - 1,294,223

Other Trade receivables

- Unsecured, considered good - 141,325

TOTAL - 1,435,548


(`)

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

Cash and cash equivalents

(as per AS 3 Cash Flow Statements)

Cash on hand 23,760 48,856

Balances with banks:

- In savings accounts 770,024 6,382,314

- In demand deposit accounts 297,531,832 351,000,000

TOTAL 298,325,616 357,431,170



(`)(a) PARTICULARS SPECIFIED BANK NOTES (500/1000) OTHER DENOMINATION NOTES TOTAL

Closing cash in hand as on 8 November, 2016 - 650 650 Add: Permitted receipts - 30,000 30,000 Less: Permitted payments - 19,228 19,228 Less: Amount deposited in banks - - - Closing cash in hand as on 30 December, 2016 - 11,422 11,422

* For the purposes of this note, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8 November, 2016.

15 REVENUE FROM OPERATIONS

(`)



Voluntary contributions

- Utilisation of corpus donation [see note (a)] 125,000,000 121,500,000

- Others 5,000 365,503

Advisory/ consultancy - 693,450

Policy advocacy - 1,466,316

TOTAL 125,005,000 124,025,269

(a) Corpus donation ` 125,000,000 (Previous year ` 121,500,000) transferred from fund held in corpus donation as per the direction of the management for carrying out the activities of the Company.

16 OTHER INCOME

(`)



Interest income from bank on deposits 26,775,256 36,935,764

Net gain on sale of current investments 25,762,681 5,738,591

Profit on redemption of non-current investments - 2,844,223

Net gain on foreign currency transactions and translation - 6,934

Interest received on income tax refund 310,605 -

Sitting fees 256,000 190,000

Liabilities no longer required written back 336,900 -

Miscellaneous income - 10,249

TOTAL 53,441,442 45,725,761

17 EMPLOYEE BENEFITS EXPENSE

(`)



Salaries 24,486,307 41,119,103

Contribution to provident and other funds 1,265,647 2,478,091

Staff welfare expenses 201,366 851,939

TOTAL 25,953,320 44,449,133



18 FINANCE COSTS

(`)



Others - Interest on delayed / deferred payment of statutory dues - 40,055

TOTAL - 40,055

19 OTHER EXPENSES

(`)



Grants 74,944,674 69,153,722

Micro ATMs for financial literacy and digital skill development 16,503,444 -

Electricity and water expenses 201,916 -

Sub consultancy charges - 1,380,230

Legal and professional charges 33,325,752 15,736,766

Rent [see note 29] 8,198,292 6,053,763

Repairs and maintenance - Others 1,941,432 623,860

Communication costs 493,067 558,452

Travelling and conveyance 7,220,021 12,853,792

Printing and stationery 169,220 1,177,024

Donations 2,530,000 -

Payments to auditors [see note (a)] 614,272 602,874

Bad trade and other receivables, loans and advances written off 1,310,157 387,590

Loss on fixed assets sold / scrapped / written off 3,631 9,472

Provision for diminution in value of investments - 1,896,996

Loss on disposal of long-term investment 63,501 -

Books and periodicals 184,453 225,075

Training and conference 204,113 171,661

Sitting fee to directors 591,425 387,244

Miscellaneous expenses 378,038 695,978

TOTAL 148,877,408 111,914,499

(a) Payments to the auditors comprise

(`)



To statutory auditorsfor audit 373,750 373,750 for tax audit 115,000 115,000 for other services 86,250 86,250 Reimbursement of expenses 39,272 27,874

TOTAL 614,272 602,874

20 EXPENDITURE IN FOREIGN CURRENCIES

(`)



Travelling and conveyance 1,829,628 1,884,226 Books and periodicals 79,955 18,650 Training and conference 179,713 - Miscellaneous expenses 78,258 - TOTAL 2,167,554 1,902,876

21 EARNINGS IN FOREIGN CURRENCIES

(`)



Advisory / consultancy - 693,450 TOTAL - 693,450



22 DISCLOSURE OF EMPLOYEES BENEFITSThe Company makes Provident Fund, Superannuation Fund and National Pension Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

(a) The Company has recognised the following amounts in the Statement of Income and Expenditure towards contribution to defined contribution plan which are included under contribution to provident and other funds:

(`)



Provident fund 1,233,958 2,012,766

National Pension Scheme - 33,333

Superannuation fund 31,689 64,630

TOTAL 1,265,647 2,110,729

(b) The details of the Company’s post – retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors:

(`)



CHANGE IN THE DEFINED BENEFIT OBLIGATIONS:Liability at the beginning of the year 6,797,732 6,742,988

Current service cost 1,320,417 1,492,254

Interest cost 512,286 540,106

Benefits paid (481,361) (913,113)

Actuarial (gain) / loss 171,198 212,867

Liabilities assumed on acquisition/(Settled on divestiture) (4,898,223) (1,277,370)

LIABILITY AT THE END OF THE YEAR 3,422,049 6,797,732

FAIR VALUE OF PLAN ASSETS:Opening fair value of planned assets 6,430,370 6,742,988

Actuarial gain / (losses) (313,250) 74,488

Return on planned assets 507,843 526,007

Contributions 367,362 -

Benefits paid (481,361) (913,113)

FAIR VALUE OF PLAN ASSETS AT THE END OF THE YEAR 6,510,964 6,430,370

TOTAL ACTUARIAL (GAIN) / LOSS TO BE RECOGNISED 171,198 212,867

AMOUNT RECOGNISED IN THE BALANCE SHEETLiability at the end of the year 3,422,049 6,797,732

Fair value of plan assets at the end of the year 6,510,964 6,430,370

AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER "SHORT-TERM LOANS AND ADVANCES" - 'RECEIVABLE FROM GRATUITY FUND TRUST [NET OF RECEIVABLES OF ` NIL (PREVIOUS YEAR ` 440,741)]

(3,088,915) 367,362

EXPENSE RECOGNISED IN THE STATEMENT OF INCOME AND EXPENDITURECurrent service cost 1,320,417 1,492,254

Interest cost 512,286 540,106

Expected return on plan assets (507,843) (526,007)

Net actuarial loss recognised 484,448 138,379

Losses assumed on acquisition / (Gains) on divestiture (4,898,223) (1,277,370)

EXPENSE/(ADJUSTMENT) RECOGNISED IN THE STATEMENT OF INCOME AND EXPENDITURE UNDER "EMPLOYEE BENEFITS EXPENSE"

(3,088,915) 367,362

RECONCILIATION OF THE LIABILITY/ASSETS RECOGNISED IN THE BALANCE SHEET:Opening net liability 6,797,732 6,742,988

Expense recognised in Income and Expenditure (3,088,915) 367,362

Opening fair value of planned assets (6,430,370) (6,742,988)

Contribution by the Company (367,362) -

AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER "SHORT-TERM LOANS AND ADVANCES" - 'RECEIVABLE FROM GRATUITY FUND TRUST [NET OF RECEIVABLES OF ` NIL (PREVIOUS YEAR ` 440,741)]

(3,088,915) 367,362

EXPECTED EMPLOYER'S CONTRIBUTION FOR THE NEXT YEAR - 1,000,000



Experience adjustments (`)

PARTICULARS FOR THE YEAR ENDED

MARCH 31, 2017 MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2013

Defined benefit obligation 3,422,049 6,797,732 6,742,988 4,605,205 1,727,710

Plan assets 6,510,964 6,430,370 6,742,988 1,310,960 -

Surplus / (deficit) 3,088,915 (367,362) - (3,294,245) (1,727,710)

Experience adjustments on plan liabilities (179,494) 138,616 423,410 381,471 (10,313)

Experience adjustments on plan assets (313,250) 74,488 270,334 - -


MARCH 31, 2017 MARCH 31, 2016

% %

INVESTMENT PATTERN

Insurer managed funds

Government securities 27.81 39.18

Deposit and money market securities 14.77 16.93

Debentures/bonds 57.42 43.89

Mortality Indian Assured Lives Mortality (2006-08)

PRINCIPAL ASSUMPTIONS

Discount rate (per annum) 6.55 7.50

Expected rate of return on assets (per annum) 7.50 9.00

Salary escalation rate (per annum) 8.00 8.00

Notes:

The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment strategy, market scenario, etc.

The estimate of future salary increase considered in the actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. The above information is certified by the actuary and relied upon by the auditors.

23 SEGMENT INFORMATIONThe primary focus of the Company is to contribute to the economic benefits to society, social infrastructure (education, helathcare, water and sanitation) and other engagement in research and studies. All other activities revolve around the main business. The Company does not have any geographical segments.

24 EARNINGS PER SHARE



(a) Net surplus after tax ( `) 1,177,121 12,097,031

(b) Weighted average number of equity shares (Nos.) 13,000,000 13,000,000

(c) Basic and diluted earnings per share (a)/(b) ( `) 0.09 0.93

(d) Nominal value per share ( `) 10 10



25 RELATED PARTY DISCLOSURE(a) Relationship:

Holding Company

IDFC Limited

Jointly controlled entities


Delhi Integrated Multi-Modal Transit System Limited

Uttarakhand Infrastructure Development Company Limited (upto 31 October, 2016)

Holding’s subsidiary




IDFC Bank Limited

IDFC Finance Holding Company Limited

IDFC Infrastructure Finance Limited*

*Name of IDFC Infra Debt Fund Limited has been changed w.e.f. 10 January, 2017

Entities over which control is exercised

India PPP Capacity Building Trust

(b) The nature and volume of transactions carried out with the above related parties in the ordinary course of business are as follows:

(`)

NAME OF THE RELATED PARTY NATURE OF TRANSACTIONS FOR THE YEAR ENDEDMARCH 31, 2017


IDFC Limited Sale of fixed assets - 36,416

Loans and advances - repaid - 15,000,000

Reimbursement of expenses by the Company* 764,360 998,857

Corpus donation received 12,500,000 234,000,000

Trade receivables - 1,279,499

Advance payable -balance outstanding 187,364,000 195,000,000

Share capital 130,000,000 130,000,000


Sitting fees 16,000 20,000

IDFC Bank Limited Sale of fixed assets 74,133 312,501

Interest income from bank deposits 26,775,256 214,025

Rent* 2,783,172 4,146,732

Reimbursement of expenses to the Company* 114,642 24,909

Reimbursement of other expenses by the Company* 27,817 365,274

Amount deposited in the bank account 313,316,538 376,206,595

Amount withdrawal from the bank account 318,104,863 371,350,810

Term deposits placed 134,250,000 351,000,000

Balances with banks - saving bank accounts 384,208 4,855,785

Balance in demand deposit accounts 298,281,832 351,000,000

Interest accrued on fixed deposits with banks 17,980,313 193,688

Corpus donation received 48,500,000 -

Delhi Integrated Multi-Modal Transit System Limited

Sitting fees received 240,000 170,000

Uttarakhand Infrastructure Development Company Limited

Amount received from final distribution of surplus assets under voluntary winding up

1,636,499 -

India PPP Capacity Building Trust Redemption of investment - 11,136,389

Reimbursement of expenses by the Trust 474,200 -

IDFC Alternatives Limited Corpus donation received 6,002,229 6,800,000

IDFC Securities Limited Corpus donation received 6,079,935 5,673,000

IDFC Infrastructure Finance Limited Corpus donation received 3,170,870 376,924


Corpus donation received 27,464,000 19,408,000

Reimbursement of expenses by the Company* 476,229 -

IDFC Finance Holding Company Limited

Corpus donation received 50,000 -

Note: * Inclusive of service tax



26 CONTINGENT LIABILITIES

(`)



Claims against the Company not acknowledged as debts:

- Income tax demands under appeal [See notes below] 41,711,156 18,661,453

(a) Net of amount provided ` 8,550,000 (Previous year ` 8,550,000)

(b) Amount deposited under protest against the demands ` 14,742,111 (Previous year ` 6,261,774)

27 (a) The estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances) amount to ` Nil (Previous year ` Nil).

(b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

28 There are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.

29 LEASESThe Company has acquired premises under cancellable operating lease. The total lease rentals recognised as expenses during the year under the above lease agreement aggregates to ` 8,198,292 (Previous year ` 6,053,763).

30 (a) Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the MSMED Act, 2006 is ` Nil (Previous Year ` Nil) and no interest during the year has been paid or is payable under the terms of MSMED Act, 2006. The information provided by the Company has been relied upon by the auditors.

(b) Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

(`)



a. Principal amount remaining unpaid to any supplier as at the end of the accounting year

b. Interest due thereon remaining unpaid to any supplier as at the end of the accounting year

- -

c. The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day

- -

d. The amount of interest due and payable for the year - -

e. The amount of interest accrued and remaining unpaid at the end of the accounting year

- -

f. The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid

- -

31 Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


Vikram LimayeChairperson

Sunil KakarDirector



IDFC PROJECTS LIMITED

U45203MH2007PLC176640

Mr. Sunil Kakar (Chairperson)

Mr. A K T Chari

Mr. T S Bhattacharya

Dr. Rajeev Uberoi

Deloitte Haskins and Sells,


IDFC Bank Limited

Naman Chambers

C-32, G-Block, Bandra-Kurla

Complex, Bandra (East)

Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


TO THE MEMBERS

Your Directors have pleasure in presenting the Tenth Annual Report together with the audited financial statements for the year ended March 31, 2017.


(AMOUNT IN `)



Total Income 14,369,116 57,343,545


Loss before Tax (527,348,939) (346,934,440)

Less: Provision for Tax 2,950,000 -

Loss after Tax (530,298,939) (346,934,440)

COMPANY’S AFFAIRS

Your Company’s principal activity is to design, develop, engineer, finance, construct, operate and maintain infrastructure projects.

DIVIDEND

In view of the losses, the Directors do not recommend any dividend for the year ended March 31, 2017.

SUBSIDIARY COMPANIES / JOINT VENTURES AND ASSOCIATE COMPANIES

IDFC Projects Limited has one Associate Company (26% owned), namely, Jetpur Somnath Tollways Pvt. Ltd.

DEVELOPMENT DURING THE YEAR

Jetpur Somnath Tollways Private Limited (“JSTPL”) served notice of termination on NHAI terminating the project on account of Authority Default and has handed over its toll operations to the NHAI in November, 2016. JSTPL has received Termination Payment from NHAI which is below the amount due as per Concession Agreement. JSTPL proposes to refer the matter to Arbitration.

A Statement containing salient features of the financial statement and all other requisite details of the said Associate company in the format AOC-I is appended as Annexure I.

UPDATE ON MERGER

An application was filed with the Hon’ble High Court of Bombay for merger of IDFC Finance Limited with IDFC Projects Limited. The said application was admitted by Hon’ble High Court of Bombay on April 22, 2016. Subsequently the Hon’ble High Court of Bombay accorded its approval for the said merger on November 18, 2016 after receiving No- Objection Certificate from the Official Liquidator, Regional Director, ROC and Income Tax Authorities. The said merger is effective from April 1, 2016.


The Company does not have any employee.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any Public Deposits.




There are no foreign exchange earnings and expenditure during the year.


Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.

DIRECTORS

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar (DIN:03055561) would retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Mr. Sunil Kakar at the ensuing AGM.


The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.

BOARD’S REPORT

I D F C P R O J E C T S L I M I T E D | 6 5

MEETINGS OF THE BOARD

During the year, the Board met four (4) times on April 25, 2016, July 22, 2016, October 24, 2016 and January 23, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY17 is given in the table below.

NAME OF THE DIRECTOR DIN POSITION NO. OF MEETINGS HELD IN FY17

NO. OF MEETINGS ATTENDED IN FY17

Mr. Sunil Kakar 03055561 Chairperson 4 4

Mr. A K T Chari 00746153 Independent Director 4 4

Mr. T S Bhattacharya 00157305 Independent Director 4 4

Dr. Rajeev Uberoi 01731829 Non-Executive Director 4 4

AUDIT COMMITTEE

During the year, the Audit Committee met four (4) times on April 25, 2016, July 22, 2016, October 24, 2016 and January 23, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance of the Audit Committee Meetings held during FY17 is given in the table below.

NAME OF THE MEMBER POSITION STATUS NO. OF MEETINGS HELD IN FY17


Mr. A K T Chari Independent Director Chairperson 4 4

Mr. Sunil Kakar Non-Executive Director Member 4 4

Mr. T S Bhattacharya* Independent Director Member 3 3

* Appointed as an Audit Committee Member w.e.f. April 25, 2016.

NOMINATION AND REMUNERATION COMMITTEE

Nomination and Remuneration Committee (‘NRC’) comprises of the following:

1. Mr. A K T Chari - Chairperson

2. Mr. Sunil Kakar

3. Mr. T S Bhattacharya

The Composition of NRC is in compliance with the provisions of the Companies Act, 2013.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was prepared and circulated to the Board for Annual evaluation. The Directors discussed and requested for some changes.

The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. For this purpose the Company may engage an External Agency to carry out the entire Annual Board Evaluation process independently. The said process is expected to be completed in due course of time.

AUDITORS

At the AGM of the Company held on September 28, 2016, the shareholders had approved the appointment of Deloitte Haskins & Sells (DHS), Chartered Accountants, (Registration No. 117365W) as Statutory Auditors for a period of 1 year to hold office from the conclusion of the 9th AGM up to the conclusion of the 10th AGM of the Company. There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report on the Financial Statements for FY17. DHS will retire at the conclusion of the ensuing AGM.

Section 139(2) of Companies Act, 2013 requires companies to mandatorily rotate their auditors once the auditor has served the office for a consecutive period of 10 years or more. A transition period of three years was provided for companies incorporated prior to April 1, 2014 to comply with the said provisions which ended on March 31, 2017. Accordingly, beginning April 1, 2017, all companies which are required to rotate their auditors under the Act, will have to rotate their existing auditors if they have held office as Company’s auditors for a consecutive period of 10 years or more.

Accordingly, the Audit Committee and Board of Directors of the Company at their respective meetings held on April 24, 2017 recommended the appointment of Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of Deloitte Haskins & Sells, Chartered Accountants, for a period of five years from the conclusion of the 10th AGM of the Company to be held for FY17, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis. The said appointment is in compliance with the mandatory rotation of auditors as per the provisions of the Companies Act, 2013.

PWC confirmed that their appointment, if made, would be in conformity with the provisions of Section 141 of the Companies Act, 2013 and have also indicated their willingness to be appointed.

BOARD’S REPORT


The Resolution seeking approval for appointment of PWC is included in the Notice of the ensuing AGM. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company as per the details given in the Notice.


The members of the Board ensure control of risk factors and advice on the same to the Management of the Company.




There have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period March 31, 2017 till the date of this report.


On November 18, 2016, Hon’ble Bombay High Court passed the order for amalgamation of IDFC Finance Limited into IDFC Projects Limited. There are no other significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.

AUDITOR’S REPORT

There was no qualification, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.



(a) in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2017 and of the loss of the company for that period;





The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure II.

RELATED PARTY TRANSACTION

As per Section 177, read with Section 188 of the Act and the Rules made thereunder, the Audit Committee approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related Party Transactions” is uploaded on the website of the Company. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company. As per Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are included in the Notes to Accounts.

ACKNOWLEDGEMENTS

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sunil KakarChairperson


BOARD’S REPORT


[Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014]

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

PART “A”: SUBSIDIARIES : NOT APPLICABLE

Note : During the year, IDFC Finance Limited was merged with IDFC Projects Limited w.e.f. April 1, 2016.


PART BASSOCIATES AND JOINT VENTURES(Pursuant to Section 129(3) of the Act related to Associates Companies and Joint Ventures)

SR. NO. NAME OF ASSOCIATE COMPANIES

JETPUR SOMNATH TOLLWAYS PRIVATE LIMITED

(ASSOCIATE OFIDFC PROJECTS LIMITED)

1 Latest audited Balance Sheet Date March 31, 2017

2 Date on which the Associate or Joint Venture was associated or acquired January 11, 2011

3 Shares of associate held by the Company at March 31, 2017

Number of Equity Shares 42,637,400

Number of Preference Shares

0.0001% Compulsory Convertible Preference Shares 40,300,000

0.0002% Compulsory Convertible Preference Shares 14,628,490

Amount of investment in associate companies (` in crore) 97.57

Extent of Holding (%) 26.00%

4 Description of how there is significant influence Note 1

5 Reason why the associate is not consolidated NA

6 Net worth attributable to Shareholding as per latest audited Balance Sheet (` in crore) (25.76)

7 Profit / (Loss) for the year ended March 31, 2017 (` in crore) (422.56)

i. Considered in Consolidation (24.70)

ii. Not Considered in Consolidation (398.06)

Note 1: The group has significant influence through holding more than 20% of the equity shares in the investee company in terms of Accounting Standard 23, issued by ICAI.Note 2: There are no associates or joint ventures which are yet to commence operations.

No associates or joint ventures have been liquidated or sold during the year.

For and on behalf of the Board of Directors of IDFC Projects Limited

Mumbai, April 24, 2017

Sunil KakarDirector

Rajeev UberoiDirector


AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2017[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN U45203MH2007PLC176640


iii) Name of the Company IDFC PROJECTS LIMITED

iv) Category / Sub-Category of the Company Company Limited by sharesIndian Non-Government Company

v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354


vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

Link Intime India Pvt Ltd.* C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.

*Link Intime India Pvt Ltd. provides electronic connectivity services with depositories for the equity shares of the Company. During FY17, Registrar and Transfer Agent was changed from Sharepro Services (India) Pvt Ltd to Link Intime India Pvt Ltd.



SR. NO.

NAME AND DESCRIPTION OF MAIN PRODUCTS / SERVICES

NIC CODE OF THE PRODUCT / SERVICE % TO TOTAL TURNOVER OF THE COMPANY

1. Design, develop, engineer, finance, construct, operate and maintain infrastructure projects

III. PARTICULARS OF HOLDING COMPANY, SUBSIDIARY AND ASSOCIATE COMPANIES

SR. NO.

NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING/ SUBSIDIARY/ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Holding Company 100 Section 2(46)

2. Jetpur Somnath Tollways Pvt. Ltd. U74120MH2011PTC212162 Associate 26 Section 2(6)





CATEGORY OF SHAREHOLDERS

NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR

NO. OF SHARES HELD AT THE END OF THE YEAR

% CHANGE DURING

THE YEAR

DEMAT PHYSICAL TOTAL % OF TOTAL

SHARES


SHARES

A. Promoter

Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL

Bodies Corp. 34,049,400 600 34,050,000 100 34,049,400 600 34,050,000 100 NIL

Sub-total (A):- 34,049,400 600 34,050,000 100 34,049,400 600 34,050,000 100 NIL

Total shareholding of Promoter

34,049,400 600 34,050,000 100 34,049,400 600 34,050,000 100 NIL




Grand Total (A+B+C) 34,049,400 600 34,050,000 100 34,049,400 600 34,050,000 100 NIL


SR. NO.

SHAREHOLDER’S NAME SHAREHOLDING AT THE BEGINNING OF THE YEAR SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES

% OF TOTAL SHARES OF THE

COMPANY

%OF SHARES PLEDGED/


NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

1. IDFC Limited & its nominees 34,050,000 100 NIL 34,050,000 100 NIL NIL

TOTAL 34,050,000 100 NIL 34,050,000 100 NIL NIL

(iii) Change in Promoters’ Shareholding: NO CHANGE


NOT APPLICABLE


V. INDEBTEDNESS




B. Remuneration to other Directors: (`)

SR. NO.


SUNIL KAKAR A K T CHARI T S BHATTACHARYA RAJEEV UBEROI


Fee for attending Board & committee meetings NA 200,000 175,000 NA 375,000

TOTAL (1) NA 200,000 175,000 NA 375,000

2. Other Non-Executive Directors NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) NIL 200,000 175,000 NIL 375,000








TO THE MEMBERS OF IDFC PROJECTS LIMITED


We have audited the accompanying financial statements of IDFC PROJECTS LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.









We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

a) We draw attention to the Note 24 of the financial statements which indicates that, the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net loss during the current and previous year and, the Company’s current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note 24, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

b) We draw attention to Note 20 of the financial statements which describes the merger of IDFC Finance Limited, a wholly owned subsidiary of the Company, as per the Scheme of Amalgamation under section 391-394 of the Companies Act, 1956 and corresponding provision of the Companies Act, 2013 approved by the Hon’ble High Court, Bombay vide its order dated 18th November, 2016 into the Company with effect from April 1, 2016, the Appointed Date.

Our opinion is not modified in respect of these matters.




1. As required by Section 143 (3) of the Act, based on our audit we report, to the extent applicable, that:



c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.


e) The going concern matter described in sub-paragraph (a) under Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as at 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as at 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company did not have any holdings or dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016.

2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order” / “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.

For DELOITTE HASKINS & SELLSChartered Accountants(Firm’s Registration No. 117365W) Pallavi A. Gorakshakar(Partner) (Membership No. 105035)




(Referred to in paragraph 1 (g) under ‘Report on Other Legal and Regulatory Requirements’ section of the auditor’s report of even date)


We have audited the internal financial controls over financial reporting of IDFC PROJECTS LIMITED (“the Company”) as of 31st March, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.




Meaning of Internal Financial Controls Over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.


Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.






(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

During the year, the Company has disposed-off all its fixed assets. (Refer note 8 to the financial statements)

(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.


(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.


(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of CARO 2016 is not applicable.

(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) CARO 2016 is not applicable.


(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees State Insurance, Sales Tax, Customs Duty and Excise Duty.

(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on 31st March, 2017 on account of disputes are as follows:

NAME OF THE STATUTE NATURE OF THE DUES AMOUNT INVOLVED (RS.)

ASSESSMENT YEAR TO WHICH THE AMOUNT RELATES

FORUM WHERE PENDING

Income-tax Act, 1961 Income-tax 889,980 2014-15Commissioner of Income-tax (Appeals)

Income-tax Act, 1961 Income-tax 1,510 2014-15 Commissioner of Income-tax (Appeals)



(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company does not have an Executive or a Whole-time Director hence reporting under clause (xi) of the CARO 2016 is not applicable.


(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.


(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.






For Deloitte Haskins & SellsChartered Accountants(Registration No. 117365W)


Pallavi A. GorakshakarPartner

Sunil KakarDirector





NOTES ` `



(a) Share capital 3 340,500,000 340,500,000

(b) Reserves and surplus 4 (1,412,840,457) (889,225,299)

(1,072,340,457) (548,725,299)

Current liabilities


Total Outstanding dues of micro enterprises and small enterprises - -


250,649 696,145

(b) Other current liabilities 6 1,112,004,671 1,645,026,960

(ç) Short-term provisions 7 491,302 -

1,112,746,622 1,645,723,105

TOTAL 40,406,165 1,096,997,806

ASSETS

Non current assets

(a) Non-current investments 9 33,332,500 1,075,737,353

(b) Long-term loans and advances 10 4,539,319 4,177,997

37,871,819 1,079,915,350

Current assets

(a) Current investments 11 1,856,771 13,565,445

(b) Cash and cash equivalents 12 677,575 3,506,404

(c) Short term loans and advances 13 - -

(d) Other current assets 14 - 10,607

2,534,346 17,082,456

TOTAL 40,406,165 1,096,997,806







Sunil KakarDirector






NOTES ` `

I INCOME

Income from operations 15 14,369,116 57,343,545

TOTAL INCOME (I) 14,369,116 57,343,545

II EXPENSES

Finance Costs 16 1,162 469,746

Provisions and contingencies 17 539,566,812 403,064,978

Depreciation expense 8 - 24,987

Other expenses 18 2,150,081 718,274


III LOSS FOR THE YEAR (I-II) (527,348,939) (346,934,440)

IV TAX EXPENSE

Current tax 2,950,000 11,600,000

V LOSS AFTER TAX (III-IV) (530,298,939) (358,534,440)

Earnings per equity share (nominal value of share ` 10 each) 23

Basic (`) (15.57) (10.53)

Diluted (`) (15.57) (10.53)






NOTES ` `


Loss before tax (527,348,939) (346,934,440)

Adjustments for :

Depreciation expense 8 - 24,987


Operating profit before working capital changes 12,217,873 56,155,525


Adjustments for (increase) / decrease in operating assets

Short- term loans and advances (227,412) (77,978)

Current investments 11,708,674 (13,565,445)

Other current assets 10,607 (10,607)

Adjustments for (decrease) / increase in operating liabilities

Trade payables (445,496) 528,446

Other current liabilities (24,850) 32,700

Cash generated from operations 23,239,396 43,062,641

Income tax paid (2,820,020) (12,098,855)

NET CASH FLOW FROM OPERATING ACTIVITIES (A) 20,419,376 30,963,786


Subscription to preference shares in an associate company (80,614,900) (112,470,000)

Purchase of equity shares in a subsidiary company - (227,500,000)

Subscription to equity shares in a company - (356,180,353)

Sale of equity shares in a company 356,180,353 -

NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES (B) 275,565,453 (696,150,353)


Advance taken from the holding company 85,336,465 668,400,000

Advance repaid to holding company (618,333,904) -

NET CASH (USED IN) / FLOW FROM FINANCING ACTIVITIES (C) (532,997,439) 668,400,000

Net (decrease) / increase in cash and cash equivalents (A+B+C) (237,012,610) 3,213,433

Cash and cash equivalents as at the beginning of the year 12 3,506,404 292,971

Add: Pursuant to Scheme of Amalgamation [refer note no. 20] 234,183,781 -

Cash and cash equivalents as at the end of the year 12 677,575 3,506,404





Sunil KakarDirector





01 BACKGROUND IDFC Projects Limited (‘the Company’) is a company, incorporated in India under the Companies Act, 1956. The Company is

promoted by IDFC Limited. The Company is in the business of conceiving, developing, owning, managing, executing and operating infrastructure projects, in India. IDFC Finance Limited, wholly owned subsidiary of the company merged with effective date of April 01, 2016 (Appointed Date) as approved by the Bombay High Court (‘’High Court’’) vide its order dated November 18, 2016 which has been filed by the Company with the Registrar of Companies on December 21, 2016 (‘’Effective Date’’). Also refer to note no 20.


A BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the 2013 Act”) as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

B USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and any revision or the differences between the actual results and the estimates are recognised prospectively in the future periods.

C INVESTMENTS

Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

D TANGIBLE FIXED ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation and impairment loss if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

E DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciation on tangible fixed assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the Companies Act, 2013. Certain electronic items are depreciated over a period of two years on a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.

F IMPAIRMENT OF ASSETS

The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an appropriate discounting factor. If at the Balance sheet date, there is a indication that previously recognised impairment loss no longer exists or may have decreased, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

G REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised.

¡ Interest and other dues are accounted on accrual basis.

¡ Fees are recognised when reasonable right of recovery is established, the revenue can be reliably measured and there is no uncertainty regarding recoverability.

¡ Dividend income on investments is recognised when the unconditional right to receive payment is established.

¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss earned on sale of investments is determined based on FIFO cost for current investments and weighted average cost for long-term investments.



H PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are not recognised in financial statements.

I TAXES ON INCOME

Income tax expense comprises current tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as specified under Section 133 of the Companies Act, 2013. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income-tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income-tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

J FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted at the exchange rates prevailing on the dates of the transactions. Foreign currency monetary items outstanding as at the reporting date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

K TREATMENT OF EXCHANGE DIFFERENCES

Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.

L CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of the Cash Flow Statement comprises cash on hand, cash in bank, fixed deposits and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

M CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

N EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.



O SERVICE TAX INPUT CREDIT

Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.

P OPERATING CYCLE

Operating cycle is the normal time between acquisition of assets and their realisation in cash or cash equivalents. Since normal operating cycle cannot be identified, it is assumed to have a duration of twelve months for the purpose of classification of its assets and liabilities as current and non-current.

03 SHARE CAPITAL


NUMBER ` NUMBER `

AUTHORISED SHARES

Equity shares of ` 10 each 140,000,000 1,400,000,000 100,000,000 1,000,000,000

ISSUED, SUBSCRIBED & FULLY PAID-UP SHARES

Equity shares of ` 10 each 34,050,000 340,500,000 34,050,000 340,500,000

[All of these shares are held by IDFC Limited, the holding company and its nominees].

TOTAL 340,500,000 340,500,000

(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year.


NUMBER ` NUMBER `

Equity shares

Outstanding at the beginning of the year 34,050,000 340,500,000 34,050,000 340,500,000


OUTSTANDING AT THE END OF THE YEAR 34,050,000 340,500,000 34,050,000 340,500,000


¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled

to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders at the

ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the

Balance Sheet date as per the provisions of revised Accounting Standard 4.

¡ In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets

of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The

distribution will be in proportion to the number of equity shares held by the shareholders.




IDFC Limited and its nominees 34,050,000 100 34,050,000 100

04 RESERVES & SURPLUS


` `

(a) Deficit in the Statement of Profit and Loss

Opening balance (889,225,299) (530,690,859)

Loss for the year (530,298,939) (358,534,440)

Closing balance (1,419,524,238) (889,225,299)

(b) Capital reserve

Opening balance - -

Pursuant to the scheme of Amalgamation (See note 20) 6,683,781 -

Closing balance 6,683,781 -

TOTAL (1,412,840,457) (889,225,299)



05 TRADE PAYABLES


` `



Payable to vendors - 200

Provision for expenses 250,649 695,945

TOTAL 250,649 696,145

Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:


(a) The principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year.

- -

(b) The amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year.

- -


- -

(d) The amount of interest accrued and remaining unpaid at the end of each accounting. - -


- -

The above information takes into account only those suppliers whose response to inquiries made by the Company for this purpose has been received.



` `

Statutory dues 27,850 52,700

Amount payable to a related party (See note 22) 1,111,976,821 1,644,974,260

TOTAL 1,112,004,671 1,645,026,960



` `

Provision for Income tax(net of advance tax ` 12,167,718 (Previous year ` Nil)

491,302 -

TOTAL 491,302 -

08 TANGIBLE ASSETS

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

BALANCE AS AT APRIL 1,

2016

ADDITIONS DISPOSALS BALANCE AS AT MARCH

31, 2017


2016

DEPRECIATION CHARGE FOR

THE YEAR

ON DISPOSALS

BALANCE AS AT MARCH

31, 2017

BALANCE AS AT MARCH

31, 2017

BALANCE AS AT MARCH

31, 2016

` ` ` ` ` ` ` ` ` `

Office equipment 179,020 - (179,020) - 179,020 - (179,020) - - -

(Previous year) (179,020) - - (179,020) (178,122) (898) - (179,020) -

Computers 302,259 - (302,259) - 302,259 - (302,259) - - -

(Previous year) (302,259) - - (302,259) (278,170) (24,089) - (302,259) -

TOTAL 481,279 - (481,279) - 481,279 - (481,279) - - -

(Previous year) (481,279) - - (481,279) (456,292) (24,987) - (481,279) -

Note: The Company considering the present condition of its fixed assets which were fully depreciated in earlier years and retired from actual use has removed such assets from its books of accounts.



09 NON CURRENT INVESTMENTS (AT COST)


` QUANTITY ` QUANTITY `

Trade investments

Investments in equity shares (fully paid)

Subsidiaries (unquoted)

IDFC Finance Limited 10 - - 21,000,200 227,500,000

Associate (unquoted)

Jetpur Somnath Tollways Private Limited 10 42,637,400 426,374,000 42,637,400 426,374,000

Non-trade investments

Investment in equity shares (unquoted)(fully paid)

Novopay Solutions Private Limited 1 - - 227,145 356,180,353

Investment in preference shares (unquoted)(fully paid)

Associate

0.0001% Jetpur Somnath Tollways Private Limited (Compulsorily Convertible ) (see note (b) below)

10 40,300,000 403,000,000 40,300,000 403,000,000

0.0002% Jetpur Somnath Tollways Private Limited (Compulsorily Convertible ) (see note (b) below)

10 14,628,490 146,284,900 6,567,000 65,670,000

Total non current investments 975,658,900 1,478,724,353

Less: Provision for diminution in the value of Investments 942,326,400 402,987,000

TOTAL 33,332,500 1,075,737,353

(a) Investment includes ` 975,658,900 (Previous Year ` 895,044,000) in respect of shares which are subject to restrictive covenants.

(b) Investment includes ` 385,852,740 (Previous Year ` 385,852,740) in respect of shares pledged with security trustee.

(c) Compulsorily convertible preference shares shall convert into 1 equity share before the expiry of 20 years from the date of issue.

10 LONG-TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


` `

Advance tax [net of provision for tax of ` 28,761,194 (Previous Year ` 11,600,000)] 4,539,319 4,177,997

TOTAL 4,539,319 4,177,997

11 CURRENT INVESTMENTS (LOWER OF COST AND FAIR VALUE / MARKET VALUE)


` QUANTITY ` QUANTITY `

Non-trade investments

Investment in mutual funds

IDFC Cash Fund - Direct Growth 1,000 1,030.644 1,856,771 7,552.524 13,565,445

TOTAL 1,856,771 13,565,445

(a) Aggregate amount of investments in unquoted mutual funds

Cost 1,856,771 13,565,445

Market value 2,036,269 13,910,391

Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.



` `

Balance with bank:

In current account (see note 22) 677,575 6,404

In deposit account - 3,500,000

TOTAL 677,575 3,506,404



13 SHORT-TERM LOANS AND ADVANCES (UNSECURED)


` `

Balances with government authorities - Cenvat credit available 7,066,909 6,839,497

Less: Provision for doubtful receivables (7,066,909) (6,839,497)

TOTAL - -



` `

Interest accrued on fixed deposits - 10,607

TOTAL - 10,607

15 INCOME FROM OPERATIONS



` `

Profit on sale of current investments 491,326 56,349,949

Interest on deposits (see note 22) 13,877,790 993,596

TOTAL 14,369,116 57,343,545

16 FINANCE COSTS



` `

Bank charges 1,162 -

Interest on delayed payment of advance tax - 469,746

TOTAL 1,162 469,746

17 PROVISIONS AND CONTINGENCIES



` `

Provision for doubtful loans and advances 227,412 77,978

Provision for diminution in the value of Investment 539,339,400 402,987,000

TOTAL 539,566,812 403,064,978

18 OTHER EXPENSES



` `

Rates and taxes 75,336 3,940

Professional fees 1,007,498 239,750

Directors sitting fees 375,000 -

Demat charges 6,775 49,584

Auditors’ remuneration (see note (a) below) 637,500 425,000

Miscellaneous expenses 47,972 -

TOTAL 2,150,081 718,274

(a) Breakup of auditors’ remuneration:

Audit fees 200,000 200,000

Tax audit fees 75,000 -



Less: Service tax set off claimed (50,750) (61,625)

TOTAL 637,500 425,000



19 CONTINGENT LIABILITIES AND COMMITMENTS NOT PROVIDED IN RESPECT OF:


` `

(i) Contingent liabilities

(a) Guarantees 192,158,400 299,174,400

(b) Sponsor’s undertaking for Jetpur Somnath Tollways Private Limited - 250,770,000

(c) Income tax liability, disputed in appeals 891,490 -

(ii) Commitments

Uncalled liability on shares and other investments 900,000,000 707,500,000

TOTAL 1,093,049,890 1,257,444,400

(a) There are no litigations claims made by the Company or pending on the Company.

(b) Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

20 In terms of the scheme of Amalgamation (the scheme), IDFC Finance Limited, wholly owned subsidiary of the Company (referred to as Transferor Company), has been amalgamated with the Company (Transferee Company), upon which the entire business, including all assets and liabilities of the transferor company stand transferred to and vested in the transferee company. The amalgamation has been accounted under the pooling of interest method and the assets and liabilities transferred have been recorded at their book value as determined by the Board of Directors of the transferee Company.

The amalgamation has been accounted for under the pooling of interest method as per Accounting Standard - 14 on Accounting for Amalgamation specified under Section 133 of the Companies Act, 2013.

Details of assets and liabilities acquired on amalgamation and treatment of the difference between the net assets acquired and cost of investment by the Transferee Company in the Transferor Company are as under:

PARTICULARS AS AT APRIL 01, 2016

( ` ) ( ` )

Value of assets and liabilities acquired:

Non-current assets

(a) Advance tax (net of provision) 704,013

704,013

Current assets

(a) Cash and bank balances 233,591,092

(b) Other current assets 148,894

233,739,986

Current liabilities

(a) Trade payables 198,900

(b) Other current liabilities 30,400

(c) Short-term provisions 30,918

260,218

234,183,781

Less:

Carrying value of investment in the transferee company 227,500,000

Difference considered as Capital Reserve (6,683,781)

21 SEGMENT REPORTING

The primary mandate of the Company is to conceive, develop, execute and manage infrastructure projects in India. All other activities revolve around the main business. The Company does not have any geographical segments. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of the Companies Act, 2013.



22 RELATED PARTY DISCLOSURES

In accordance with Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of the Companies Act, 2013, the related parties of the Company are as follows:

I. Holding Company

IDFC Limited

II. Subsidiary

IDFC Finance Limited (Upto March 31, 2016)

III. Fellow Subsidiary

IDFC Bank Limited

IV. Associate

Jetpur Somnath Tollways Private Limited

The nature and volume of transactions carried out with the above related parties in the ordinary course of business are as follows:

Name of related party and nature of relationship

PARTICULARS NATURE OF TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2017


` `

Holding Company

IDFC Limited Advance taken 69,654,776 8,905,500,000

Advance paid 602,652,216 8,237,100,000

Amount payable 1,111,976,821 1,644,974,260

Purchase of IDFC Finance Limited - 227,500,000

Purchase of Novopay Solutions Private Limited - 356,180,353

Sale of Novopay Solutions Private Limited 356,180,353 -

Outstanding Share Capital 340,500,000 340,500,000

Associate

Jetpur Somnath Tollways Private Limited Subscription towards preference share capital 80,614,900 112,470,000

Investment (net of provision) 33,332,500 492,057,000

Fellow Subsidiary

IDFC Bank Limited Interest accrued on Fixed Deposits (Net of TDS) - 10,607

Interest earned on Fixed Deposits 13,877,790 413,203

Balance in Current Accounts 267,771 (178,796)

Balance in Deposits Accounts - 3,500,000

23 EARNINGS PER SHARE

In accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of the Companies Act, 2013, the earnings per share has been calculated as under:



(a) Net loss after tax (`) (530,298,939) (358,534,440)

(b) Weighted average number of equity shares (Nos.) 34,050,000 34,050,000

(c) Basic and diluted earnings per share (a)/(b) (`) (15.57) (10.53)

(d) Nominal value per share (`) 10 10

24 The accumulated losses of the Company are substantially in excess of its net worth. However, the accounts of the Company have been prepared on a going concern basis. The Company continues to be a going concern in view of the commitment and financial support from its Holding Company, IDFC Limited, regarding the amounts due to it and other liabilities as and when they fall due for payment.



25 DISCLOSURE AS REQUIRED UNDER SECTION 186 (4) OF THE COMPANIES ACT, 2013:

a) Investments made during the year:

PARTICULARS INSTRUMENT FACE VALUE QUANTITY AMOUNT

Jetpur Somnath Tollways Private Limited Preference Shares 10 8,061,490 80,614,900

b) Outstanding Investments as at year end:

PARTICULARS INSTRUMENT FACE VALUE QUANTITY AMOUNT

Jetpur Somnath Tollways Private Limited Equity Shares 10 42,637,400 426,374,000

Preference Shares 10 40,300,000 403,000,000

Preference Shares 10 14,628,490 146,284,900

26 PREVIOUS YEAR’S FIGURES

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.



Sunil KakarDirector


IDFC INFRASTRUCTURE FINANCE LIMITED(Formerly known as IDFC Infra Debt Fund Limited)

U67190MH2014PLC253944

Mr. S. S. Kohli (Chairperson)

Mr. A K T Chari

Mr. Suresh Menon

Ms. Ritu Anand

Mr. Vikram Limaye


Mr. Pavan Kaushal



IDFC Bank Limited

IDBI Trusteeship Services Limited

Asian Building, Ground Floor,

17, R. Kamani Marg, Ballard Estate,

Mumbai 400 001.

Naman Chambers



Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354

Website www.idfcifl.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

DEBENTURE TRUSTEE

REGISTERED OFFICE

I D F C I N F R A S T R U C T U R E F I N A N C E L I M I T E D | 8 7

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fourth Annual Report together with the audited financial statements for the year ended March 31, 2017


PARTICULARS (AMOUNT IN `)



Total Income 2,069,320,213 749,855,908

Less: Total Expenses 1,360,905,156 378,834,391

Profit / (Loss) before Tax 708,415,057 371,021,517

Less: Provision for Tax - -

Profit / (Loss) after Tax 708,415,057 371,021,517



CHANGE OF NAME

Pursuant to the Shareholders’ approval obtained at the extra ordinary general meeting held on January 4, 2017, the Name of the Company was changed from ‘IDFC Infra Debt Fund Limited’ to IDFC Infrastructure Finance Limited’ with effect from January 10, 2017.

DIVIDEND

The Directors do not recommend any dividend for the financial year ended March 31, 2017 as the Company has decided to reinvest its earnings.

PERFORMANCE OF THE COMPANY

Company’s business gained significant momentum in FY17, which was the first full year of its operations. Gross disbursements grew by 39% to ` 1,765 crore against ` 1,268 crore in the previous financial year. Loan book grew by 123% to ` 2,683 crore from ` 1,202 crore in FY16.

Profit After Tax (PAT) grew by 91% to ` 70.8 crore from ` 37.1 crore in FY16. The business delivered a healthy Return on Equity (RoE) of 11.5%.

The Company has steadily built a well diversified loan portfolio with exposures across PPP road projects with tripartite agreements as well as non-PPP projects in renewable power, transmission, healthcare, education, captive power and IT SEZs. The asset quality continues to be healthy.

The capitalisation of the company is comfortable with a Capital Adequacy Ratio of 28.9% as on March 31, 2017.

The Company raises resources through issue of bonds of minimum five years maturity. In FY17, the Reserve Bank of India (RBI) allowed Infrastructure Debt Fund – Non Bank Finance Companies (IDF-NBFCs) to borrow upto 10% of their total outstanding borrowings by way of shorter tenor bonds and commercial papers (CPs). The incremental funds raised by the Company in FY17 through bonds and CPs was ` 1,296 crore. All the bond issuances were rated AAA by credit rating agencies namely ICRA and CARE and CP issuance were rated A1+ by ICRA. These were subscribed to by a wide variety of investors, including insurance companies, provident funds, mutual funds amongst others. The total outstanding borrowings as at the end of March 31, 2017 was ` 2,104 crore.

FUTURE OUTLOOK

The Company is well poised for growth and over the next few years the business is expected to gain further momentum. There have been sustained efforts by the Government to address the various issues faced by the infrastructure sector. With improvement in private sector investments in the country, a larger pool of operational projects will be available for refinancing.

The Company plans to steadily increase its loan book and maintain a balanced and diversified portfolio across both PPP and non-PPP infrastructure projects.

SUBSIDIARIES / JOINT VENTURE / ASSOCIATE COMPANIES

The Company is a subsidiary of IDFC Financial Holding Company Limited. It does not have any step down subsidiary / Joint venture / Associate Company.


Your Company had 17 employees as on March 31, 2017.

Disclosures pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees


BOARD'S REPORT

drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

EMPLOYEES’ STOCK OPTION PLAN

Pursuant to the resolution passed by the Members at the EGM held on February 01, 2016, IDFC Infrastructure Finance Limited had introduced Employee Stock Option Scheme (“the ESOS- 2016”) to enable the employees of IDFC Infrastructure Finance Limited to participate in the future growth and financial success of the Company.

All options vest in graded manner and are required to be exercised within specified period.

PUBLIC DEPOSITS



Since the Company is engaged in business of financing of companies in the ordinary course of business, provisions of Section 186 of the Companies Act, 2013 relating to loan made, guarantees given or securities provided are not applicable to the Company. Thus, provision section 134(3)(g) requiring to provide the particulars of loans, guarantees or investments are not applicable and hence not given.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board has put in place a “Whistle Blower Policy”, so as to establish a Vigil Mechanism to enable Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of company’s code of conduct. Head- Legal of the Company is the Whistle Officer for the purpose of this policy. The Whistle Committee established thereunder oversees the Vigil Mechanism. The details of Whistle Blower Policy / Vigil Mechanism are posted on the website of the Company.


There was no income or expenditure in foreign currency during the period under review.




At the last Annual General Meeting (“AGM”) of the Company held on September 26, 2016, Mr. S. S. Kohli and Mr. A K T Chari were appointed as Independent Directors and Ms. Ritu Anand was appointed as a Director.

During the year, Mr. Suresh Menon (DIN – 00737329) was appointed as an Additional Director under the category of Nominee Director of Investor (Housing Development Finance Corporation Limited) on November 18, 2016. The Company has received notice from a member of the Company under Section 160 of the Companies Act, 2013, proposing the appointment of Mr. Suresh Menon at the ensuing AGM. The Board of Directors recommend the appointment of Mr. Suresh Menon.

In accordance with the provisions of the Companies Act, 2013, Mr. Pavan Kaushal would retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment.

Ms. Ritu Anand was recommended to be appointed as an Independent Director of the Company at its board meeting held on April 24, 2017. As per provisions of the section 149(6)(e) of the Companies Act, 2013 a person cannot be appointed as an Independent Director of the Company who holds the position of employee of the Company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year (“Cooling Period”) in which he/she is proposed to be appointed. Since Cooling Period is over, Ms. Ritu Anand was recommended to be appointed as an Independent Director (“ID”) of the Company w.e.f. April 24, 2017 by the Board of Directors of the Company. The Company has received notice from a member of the Company under Section 160 of the Companies Act, 2013, proposing the appointment of Ms. Ritu Anand at the ensuing AGM, The Board of Directors recommend the appointment of Ms. Ritu Anand.

As on March 31, 2017, Key Managerial Personnel were as follows:

1. Mr. Sadashiv S. Rao - Chief Executive Officer

2. Mr. Sanjay Ajgaonkar – Chief Financial Officer

3. Mr. Amol A. Ranade – Company Secretary


As per the provisions of the Companies Act, 2013, Independent Directors are not liable to retire by rotation and the terms of appointment of Independent Directors will be governed by the provisions of Companies Act, 2013. The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.


BOARD'S REPORT

BOARD

During the year, the Board met five (5) times on April 25, 2016, July 22, 2016, October 24, 2016, January 30, 2017 and March 21, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance details of the Board Meetings held during FY17 is given in the table below.



Mr. S. S. Kohli 00169907 Chairperson & Independent Director 5 5

Mr. AKT Chari 00746153 Independent Director 5 5

Ms. Ritu Anand* 05154174 Independent Director 5 4

Mr. Vikram Limaye 00488534 Non-Executive Director 5 5

Mr. Pavan Kaushal 07117387 Non-Executive Director 5 5

Mr. Suresh Menon** 00737329 Nominee Director of Investor 2 1

* Appointed as an Independent Director w.e.f. April 24, 2017 (Previously Non-Executive Director)

** Appointed as an Additional Director w.e.f. November 18, 2016

AUDIT COMMITTEE

During the year, the Audit Committee met four (4) times on April 25, 2016, July 22, 2016, October 24, 2016 and January 30, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance details of the Audit Committee Meetings held during FY17 is given in the table below.

NAME OF THE DIRECTOR DIN POSITION NO OF MEETINGS HELD IN FY17

NO OF MEETING ATTENDED IN FY17




CREDIT COMMITTEE

During the year, The Credit Committee met six (6) times on April 25, 2016, June 27, 2016, July 22, 2016, September 9, 2016, January 30, 2017 and March 21, 2017 The attendance details of the Credit Committee meetings held during FY17 is given in the table below:








During the year, The Nomination and Remuneration Committee met three (3) times on April 25, 2016, July 22, 2016 and March 21, 2017.The attendance details of the Nomination and Remuneration Committee meetings held during FY17 is given in the table below:



Mr. AKT Chari 00746153 Chairperson & Independent Director 3 3

Mr. S. S. Kohli 00169907 Independent Director 3 3


CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

During the year, The Corporate Social Responsibility Committee met one (1) time on April 25, 2016. The attendance details of the Corporate Social Responsibility Committee held during FY17 is given in the table below:




Ms. Ritu Anand* 05154174 Independent Director 1 1


* Appointed as an Independent Director w.e.f. April 24, 2017

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as Annexure III.



During the year, separate meeting of Independent Directors held one (1) time on April 25, 2016. The attendance details of the said meeting held during FY17 is given in the table below:



Mr. S. S. Kohli 00169907 Independent Director 1 1


RISK COMMITTEE

During the year, The Risk Committee met one (1) time on October 24, 2016. The attendance details of the Risk Committee meetings held during FY17 is given in the table below:







BOARD EVALUATION


The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. For this purpose the Company may engage an External Agency to carry out the entire Annual Board Evaluation process independently. The said process is expected to be completed soon.

REMUNERATION POLICY

The Board had approved the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013.

AUDITORS

The Shareholders of the Company at their meeting held on September 29, 2014 had approved the appointment of Deloitte Haskins & Sells LLP (DHS), Chartered Accountants, (Registration No. 117366W / W-100018) Statutory Auditors for a period of 5 years to hold office from the conclusion of the First Annual General Meeting for FY14 up to the conclusion of the Sixth Annual General Meeting of the Company for FY19. As per the provisions of the Companies Act, 2013 and Rules made there under, the above appointment is required to be ratified at every AGM for the 5 years. There were no qualifications, reservations or adverse remarks made by the Statutory Auditors in their report on the Financial Statements for FY17.

The Audit Committee and Board of Directors of the Company at their respective meetings held on April 24, 2017 have recommended the appointment of Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of Deloitte Haskins & Sells, LLP, Chartered Accountants, for a period of five years from the conclusion of the 4th Annual General Meeting (AGM) of the Company to be held for FY17, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis. The Board of IDFC Limited, Holding Company also recommended appointing PWC as Statutory Auditors in all other group entities.


The Resolution seeking approval of appointment of PWC is included in the Notice of the ensuing Annual General Meeting. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company.

SECRETARIAL AUDIT REPORT

Pursuant to section 204 of the Companies act, 2013 and the rules made thereunder, the company has appointed M/S. BNP & Associates, Company Secretaries in practice, as Secretarial Auditors of the Company to undertake Secretarial Audit of the Company for FY17. The Secretarial Audit Report forms part of this Board’s Report as Annexure I.

There are no qualifications or observations or other remarks made by the Secretarial Auditors for FY17.


In all related party transactions (RPTs) that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. The Company has always been committed to good corporate governance practices, including matters relating to RPTs.

BOARD'S REPORT


Pursuant to the provisions of Companies Act, 2013 and Rules made there under and in the back-drop of the Company’s philosophy on such matters, on the recommendation of Audit Committee, the Board approved revised “Policy on Related Party Transactions” at its meeting held on October 24, 2016. The said policy is also uploaded on the website of the Company.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.

The Risk Committee monitors and review Risk Management of the Company.



MATERIAL CHANGES / COMMITMENTS





The company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.










ACKNOWLEDGEMENTS

The Directors express their gratitude for the unstinted support and guidance received from IDFC Financial Holding Company Limited and other group companies.


S. S. KOHLIChairperson

Mumbai, May 10, 2017

BOARD'S REPORT


FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

ToThe MembersIDFC Infrastructure Finance Limited (formerly known as ‘IDFC Infra Debt Fund Limited’)Naman Chambers C-32, G-Block,Bandra - Kurla Complex, Bandra (East)Mumbai 400 051.

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by IDFC Infrastructure Finance Limited (formerly known as ‘IDFC Infra Debt Fund Limited’) (hereinafter called ‘the Company’) for the audit period covering the financial year ended on March 31, 2017 (‘the audit period’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2017 according to the provisions of:

i. The Companies Act, 2013 (‘the Act’) and the Rules made thereunder;

ii. The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder;

iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;

iv. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):

a. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

b. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client,

c. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;

d. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulation, 2008.

v. Other laws as applicable specifically to the Company:

1. Infrastructure Debt Fund-Non-Banking Financial Companies (Reserve Bank) Directions, 2011;

2. Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015;

3. Non-Banking Financial Companies – Corporate Governance (Reserve Bank) Directions, 2015.

We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India related to meetings and minutes.

During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

During the period under review, provisions of the following Act / Regulations were not applicable to the Company:

i) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

ii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”):

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

b. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

c. The Securities and Exchange Board of India (Share based Employee benefits) Regulations, 2014;

d. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;

e. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

We further report that -

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings in compliance with the provisions of Section 173(3) of the Companies Act, 2013. Agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of majority. There were no dissenting views by any member of the Board of Directors during the period under review.

We further report that –

There are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

ANNEXURE ISECRETARIAL AUDIT REPORT


We further report that-

During the audit period, the Company has -

1. Allotted 2090 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 2090,000,000/- (Rupees Two Hundred & Nine Crore only), on July 13, 2016 on Private Placement basis.

2. Allotted 1410 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 1410,000,000/- (Rupees One Hundred & Forty One Crore only), on August 8, 2016 on Private Placement basis.

3. Allotted 1360 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 1360,000,000/- (Rupees One Hundred & Thirty Six Crore only), on August 25, 2016 on Private Placement basis.

4. Allotted 250 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 250,000,000/- (Rupees Twenty Five Crore only), on September 1, 2016 on Private Placement basis.

5. Allotted 2550 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 2550,000,000/- (Rupees Two Hundred & Fifty Five Crore only), on September 22, 2016 on Private Placement basis.

6. Allotted 250 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 250,000,000/- (Rupees Twenty Five Crore only), on November 11, 2016 on Private Placement basis.

7. Allotted 600 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 600,000,000/- (Rupees Sixty Crore only), on November 25, 2016 on Private Placement basis.

8. Allotted 250 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 250,000,000/- (Rupees Twenty Five Crore only), on December 2, 2016 on Private Placement basis.

9. Allotted 1500 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 1500,000,000/- (Rupees One Hundred & Fifty Crore only), on January 27, 2017 on Private Placement basis.

10. Allotted 810 Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 810,000,000/- (Rupees Eighty One Crore only), on March 17, 2017 on Private Placement basis.

For BNP & AssociatesCompany Secretaries

Keyoor BakshiPartnerFCS No. 1844 / COP No. 2720


ANNEXURE I TO THE SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017

To,

The Members,IDFC Infrastructure Finance Limited(formerly known as ‘IDFC Infra Debt Fund Limited’)

Our Secretarial Audit Report of even date is to be read along with this letter.

1. The compliance of provisions of all laws, rules, regulations, standards applicable to IDFC Infrastructure Finance Limited (the ‘Company’) is the responsibility of the management of the Company. Our examination was limited to the verification of records and procedures on test check basis for the purpose of issue of the Secretarial Audit Report.

2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Company. Our responsibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by the Company, along with explanations where so required.

3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial and other legal records, legal compliance mechanism and corporate conduct. The verification was done on test check basis to ensure that correct facts as reflected in secretarial and other records produced to us. We believe that the processes and practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the Secretarial Audit Report.

4. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

5. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and major events during the audit period.

6. The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

For BNP & AssociatesCompany Secretaries

Keyoor BakshiPartnerFCS No. 1844 / COP No. 2720


ANNEXURE ISECRETARIAL AUDIT REPORT





i) CIN U67190MH2014PLC253944


iii) Name of the Company IDFC INFRASTRUCTURE FINANCE LIMITED(Formerly known as IDFC Infra Debt Fund Limited)

iv) Category / Sub-Category of the Company Company Limited by sharesIndian Non-Government Company

v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex,Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354



Link Intime India Pvt. Ltd.*C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.




SR. NO.


1. Finance to Infrastructure projects 66309 100


SR. NO.

NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING / SUBSIDIARY / ASSOCIATE

% OF SHARES HELD APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 81.48 Section 2(46)

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 81.48 Section 2(46)




THE YEARDEMAT PHYSICAL TOTAL % OF TOTAL

SHARESDEMAT PHYSICAL TOTAL % OF TOTAL

SHARES

A. Promoters

(1) Indian

a) Bodies Corp. 439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL

Sub-total (A) (1):- 439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL

(2) Foreign NIL NIL NIL NIL NIL NIL NIL NIL NIL

Sub-total (A) (2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

Total shareholding of Promoter(A) = (A)(1)+(A)( 2)

439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL






SHARES


1. Institutions

a) Banks/FI 60,000,000 NIL 60,000,000 11.11 60,000,000 NIL 60,000,000 11.11 NIL

b) Insurance Companies 40,000,000 NIL 40,000,000 7.41 40,000,000 NIL 40,000,000 7.41 NIL

Sub-total (B)(1):- 100,000,000 NIL 100,000,000 18.52 100,000,000 NIL 100,000,000 18.52 NIL

2. Non-Institutions

Sub-total (B)(2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

Total Public Shareholding(B) = (B)(1) + (B)(2)

100,000,000 NIL 100,000,000 18.52 100,000,000 NIL 100,000,000 18.52 NIL



Grand Total (A+B+C) 539,999,994 6 540,000,000 100 539,999,994 6 540,000,000 100


SR. NO.

SHAREHOLDER’S NAME SHAREHOLDING AT THE BEGINNING OF THE YEAR

SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES % OF TOTAL

SHARES OF THE

COMPANY

%OF SHARES PLEDGED /

ENCUMBERED TO TOTAL

SHARES


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES

1. IDFC Financial Holding Company Limited & its nominees

440,000,000 81.48 NIL 440,000,000 81.48 NIL NIL

TOTAL 440,000,000 81.48 NIL 440,000,000 81.48 NIL NIL

(iii) Change in Promoters’ Shareholding (please specify, if there is no change) NO CHANGE


SR NO.

NAME OF SHAREHOLDERS* SHAREHOLDING AT THE BEGINNING OF THE YEAR

CHANGES IN THE SHAREHOLDING

DURING THE YEAR

CUMULATIVE SHAREHOLDING AT THE END OF THE YEAR

NO OF SHARES % OF TOTAL SHARES OF THE CO

INCREASE DECREASE NO OF SHARES % OF TOTAL SHARES OF THE CO

1 Housing Development Finance Corporation Limited

60,000,000 11.11 - - 60,000,000 11.11

2 SBI Life Insurance Company Limited 40,000,000 7.41 - - 40,000,000 7.41


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due for payment: IN `

SECURED LOANS EXCLUDING

DEPOSITS

UNSECUREDLOANS

DEPOSITS TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year 8,303,170,669 - - 8,303,170,669

i) Principal Amount 8,080,000,000 - - 8,080,000,000

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 223,170,669 - 223,170,669

TOTAL (I+II+III) 8,303,170,669 - - 8,303,170,669

Change in Indebtedness during the financial year

• Addition 11,515,798,891 2,900,000,000 - 14,415,798,891

• Reduction - 1,000,000,000 - 1,000,000,000

Net Change 11,515,798,891 1,900,000,000 - 13,415,798,891

Indebtedness at the end of the financial year

i) Principal Amount 19,150,000,000 1,900,000,000 - 21,050,000,000

ii) Interest due but not paid - - -

iii) Interest accrued but not due 668,969,560 - - 668,969,560

TOTAL (I+II+III) 19,818,969,560 1,900,000,000 - 21,718,969,560







SR. NO.


S S KOHLI AKT CHARI RITU ANAND

SURESH MENON

VIKRAM LIMAYE

PAVAN KAUSHAL


Fee for attending board committee meetings 525,000 500,000 - - - - 1,025,000

Commission - - - - - - -

Others, please specify - - - - - - -

TOTAL (1) 525,000 500,000 - - - - 1,025,000


Fee for attending board committee meetings - - 125,000 25,000 - - 150,000

Commission - - - - - - -

Others, please specify - - - - - - -

TOTAL (2) - - 125,000 25,000 - - 150,000

TOTAL (B) = (1 + 2) 525,000 500,000 125,000 25,000 - - 1,175,000


Note: Aforesaid payment of sitting fees is within overall limits prescribed by the Companies Act, 2013.


SR. NO.

PARTICULARS OF REMUNERATION KEY MANAGERIAL PERSONNEL

CEO CFO CS TOTAL

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

14,252,751 5,720,045 1,962,450 21,935,246

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 39,600 - 11,466 51,066

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

- - - -

2. Stock Option - - - -

3. Sweat Equity - - - -

4. Commission

- as % of profit - - - -

- others, specify... - - - -

5. Contribution to Provident & Other Funds 25,52,181 667,596 177,278 3,397,055

TOTAL (A) 16,844,532 6,387,641 2,151,194 25,383,367

During FY17 CEO, CFO & CS were paid bonus of ` 90 lacs, ` 15 lacs & ` 8.5 lacs, respectively for FY16.






Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Infrastructure Finance Ltd. to mandatorily spend on CSR.

During the year, IDFC Infrastructure Finance Ltd. carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others


Mr. S. S. Kohli

Ms. Ritu Anand

Mr. Vikram Limaye

3. Average net profit of the company for last three financial years ` 1585.43 Lac

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) ` 31.71 Lac


a) Total amount to be spent for the financial year: ` 31.71 Lac

b) Amount spent during the year: ` 31.71 Lac





For IDFC Infrastructure Finance Ltd.

Place : Mumbai Vikram Limaye S. S. KohliDate : May 10, 2017 Director Chairperson – CSR Committee

ANNEXURE IIICORPORATE SOCIAL RESPONSIBILITY (CSR)


ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014] ` IN LAC

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO



AMOUNT OUTLAY

(BUDGET)



HEADS


UP TO THE REPORTING

PERIOD

AMOUNT SPENT: DIRECT

OR THROUGH IMPLEMENTING

AGENCY



7.79

0.34 0.46

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*


Cl.(ii) promoting education Rajasthan - Alwar 0.46 0.63


Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.20 0.34


Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi

0.29 0.38



Total 7.79 1.40 1.96


8.90

0.16 0.16


All India coverage 0.24 0.24


Cl.(i) Sanitation Andhra Pradesh - Krishna district 1.09 1.09

Total 8.90 1.49 1.49



7.65

1.11 1.25


Cl.(ii) livelihood enhancement projects; Cl.(iv) ensuring environmental sustainability; Cl.(x) rural development projects.

Meghalaya - Across State 0.10 0.21


Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 0.10 0.17


Cl.(ii) livelihood enhancement projects, All India coverage 0.16 0.16


Cl.(ii) livelihood enhancement projects; Cl.(x) rural development projects.

Rural India coverage 0.88 0.88

Total 7.65 2.35 2.67

14 Research & studies on various programmes Various clauses of Schedule VII All India coverage 7.37 3.54 4.15

Total 7.37 3.54 4.15

Total Direct Expense of Project & Programmes (A) 8.78 10.27

Overhead Expense (B) 0.21 0.39

Total (A) + (B) 31.71 8.99 10.66




[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014] ` IN LAC

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO



AMOUNT OUTLAY

(BUDGET)



HEADS


UP TO THE REPORTING

PERIOD



AGENCY



7.79

0.34 0.46

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







0.29 0.38



Total 7.79 1.40 1.96


8.90

0.16 0.16





Total 8.90 1.49 1.49



7.65

1.11 1.25


Cl.(ii) livelihood enhancement projects; Cl.(iv) ensuring environmental sustainability; Cl.(x) rural development projects.







Cl.(ii) livelihood enhancement projects; Cl.(x) rural development projects.


Total 7.65 2.35 2.67


Total 7.37 3.54 4.15



Total (A) + (B) 31.71 8.99 10.66





TO THE MEMBERS OF IDFC INFRASTRUCTURE FINANCE LIMITED (FORMERLY KNOWN AS IDFC INFRA DEBT FUND LIMITED)


We have audited the accompanying financial statements of IDFC INFRASTRUCTURE FINANCE LIMITED (FORMERLY KNOWN AS IDFC INFRA DEBT FUND LIMITED)(“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.










Opinion

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.







e) On the basis of the written representations received from the directors as at March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as at March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

I D F C I N F R A S T R U C T U R E F I N A N C E L I M I T E D | 1 0 1


f) With respect to the adequacy of the internal financial controls over financial reporting of the Company refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.





iv. The Company did not have any holdings or dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016.


For DELOITTE HASKINS & SELLS LLP


(Firm’s Registration No. 117366W/W-100018)

Pallavi A. Gorakshakar

Partner




(Referred to in paragraph 1 (f) under ‘Report on Other Legal and Regulatory Requirements’ section of the auditor’s report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)We have audited the internal financial controls over financial reporting of IDFC INFRASTRUCTURE FINANCE LIMITED (FORMERLY KNOWN AS IDFC INFRA DEBT FUND LIMITED) (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.







OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.





Partner





(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of auditor’s report of even date)



(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered deed of conveyance provided to us, we report that, the title deeds, comprising the immovable property of land which is freehold, is held in the name of the Company as at the balance sheet date.



(iv) The Company has not granted any loans, made investments or provide guarantees and hence reporting under clause (iv) of the CARO 2016 is not applicable.




(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Service Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income-tax, Service Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Provident Fund, Employees’ State Insurance, Income-tax, Service Tax, cess and other material statutory dues which have not been deposited as on March 31, 2017 on account of disputes.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.







(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of Section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, and it has obtained the registration.





Partner






In terms of our report attached

For Deloitte Haskins & Sells LLPChartered Accountants(Registration No. 117366W/W-100018)

For and on behalf of the Board of Directors ofIDFC Infrastructure Finance Limited (Formerly IDFC Infra Debt Fund Limited)



S. S. KohliChairperson

Mumbai | April 24, 2017Sanjay AjgaonkarChief Financial Officer

Amol Ranade Company Secretary

AS ATMARCH 31, 2017

AS ATMARCH 31, 2016

NOTES ` `



(a) Share capital 3 5,400,000,000 5,400,000,000

(b) Reserves and surplus 4 1,123,703,988 415,288,931

6,523,703,988 5,815,288,931

Non Current liabilities

(a) Long-term borrowings 5 19,150,000,000 8,080,000,000

(b) Long-term provisions 6 107,313,061 48,070,351

19,257,313,061 8,128,070,351

Current liabilities

(a) Short-term borrowings 7 1,886,852,790 -

(b) Trade payables

(i) Total outstanding dues of micro enterprises and small enterprises 8 - -

(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises

8 30,333,192 43,455,611

(c) Other current liabilities 9 672,162,179 229,323,399

2,589,348,161 272,779,010

TOTAL 28,370,365,210 14,216,138,292

ASSETS

Non-current assets

(a) Fixed assets

Tangible assets 10 5,174,229 4,947,982

(b) Long term loans and advances

(i) Loans 11 25,675,430,418 11,263,482,159

(ii) Others 12 173,647,462 60,373,978

25,854,252,109 11,328,804,119

Current assets

(a) Current investments 13 1,252,772,423 1,065,000,000

(b) Cash and cash equivalents 14 32,193,364 1,022,659,003

(c) Short-term loans and advances

(i) Loans 11 1,152,834,987 754,105,883

(ii) Others 15 6,152,084 2,461,322

(d) Other current assets 16 72,160,243 43,107,965

2,516,113,101 2,887,334,173

TOTAL 28,370,365,210 14,216,138,292

See accompanying notes forming part of the financial statements (See notes 1 to 37)



FOR THE YEAR ENDED

MARCH 31, 2017

FOR THE YEAR ENDED

MARCH 31, 2016

NOTES ` `

I INCOME

Revenue from operations 17 2,069,320,213 749,855,908

TOTAL INCOME (I) 2,069,320,213 749,855,908

II EXPENSES


Finance Costs 19 1,194,204,987 232,242,543


Other expenses 21 29,025,614 12,879,230

Depreciation 10 2,170,390 1,591,529

TOTAL EXPENSES (II) 1,360,905,156 378,834,391

III PROFIT BEFORE TAX (I - II) 708,415,057 371,021,517

IV TAX EXPENSE 34 - -

V PROFIT FOR THE YEAR (III - IV) 708,415,057 371,021,517

Earnings per equity share (nominal value of share ` 10 each) 25

Basic (`) 1.31 0.98

Diluted (`) 1.30 0.98

See accompanying notes forming part of the financial statements (See notes 1 to 37)













NOTES ` `


Profit before tax 708,415,057 371,021,517

Adjustments for

Depreciation 10 2,170,390 1,591,529

Provision for contingencies 20 59,242,710 48,070,351

Interest expense 19 (i) 1,180,469,281 223,170,669

Interest income 17 (a) (1,863,425,300) (475,484,935)

Profit on sale of current investments 17 (143,426,862) (249,594,769)

Interest received 1,834,373,022 432,376,970

Operating profit before working capital changes 1,777,818,298 351,151,332


Adjustment for (increase) / decrease in operating assets / other current assets

Short term loans & advances (3,690,762) 1,122,652

Adjustment for increase / (decrease) in operating liabilities

Trade payables (13,122,419) 43,330,577

Other current liabilities (2,960,111) 6,139,730

CASH GENERATED FROM OPERATIONS 1,758,045,006 401,744,291

Purchase of current investments (36,611,537,866) (14,752,600,001)

Sale proceeds of current investments 36,567,192,305 17,049,229,230

Infrastructure Loans disbursed (net of repayments) (14,810,677,363) (12,017,588,042)

Direct taxes paid (net of refund) (113,273,484) (37,175,709)

NET CASH USED IN OPERATING ACTIVITIES (A) (13,210,251,402) (9,356,390,231)


Purchase of fixed assets 10 (2,396,637) (2,024,067)

NET CASH USED IN INVESTING ACTIVITIES (B) (2,396,637) (2,024,067)


Proceeds from issue of Share Capital - 2,300,000,000

Proceeds from long term Borrowings 11,070,000,000 8,080,000,000

Proceeds from short term Borrowings 3,100,000,000 -

Repayment of shot term Borrowings (1,200,000,000) -

Interest paid on Borrowings (747,817,600) -

NET CASH FROM FINANCING ACTIVITIES (C) 12,222,182,400 10,380,000,000

NET (DECREASE) / INCREASE IN CASH & CASH EQUIVALENTS (A+B+C) (990,465,639) 1,021,585,702

Cash and cash equivalents as at the beginning of the year 14 1,022,659,003 1,073,301

Cash and cash equivalents as at the end of the year 14 32,193,364 1,022,659,003

(990,465,639) 1,021,585,702











01 BACKGROUNDIDFC Infra Debt Fund Limited (‘the Company’) is a public limited company, incorporated in India on March 7, 2014. The Company has received a Non-Banking Financial Company (NBFC) license from Reserve Bank of India (RBI) on September 22, 2014. The name of the Company has been changed to IDFC Infrastructure Finance Limited with effect from January 10, 2017. The object of the Company is to undertake infrastructure debt fund activities i.e. re-financing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to new infrastructure projects.


A. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the 2013 Act”) and the relevant provisions of the 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in preparation of financial statements are consistent with those followed in the previous year.

B. USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and any revisions or the differences between the actual results and the estimates are recognised in the current and future periods.

C. CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

D. CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

E. LOANS

In accordance with the RBI guidelines, all loans are classified under any of four categories i.e. (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.

F. TANGIBLE FIXED ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the fair value / cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

G. DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciable amount for assets is the cost of an asset in the year of addition. Depreciation on tangible fixed assets is provided on straight line method as per the useful life prescribed in Part C of Schedule II to the Companies Act, 2013. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.

H. IMPAIRMENT OF ASSETS

The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an appropriate discounting factor. If at the Balance Sheet date, there is indication that previously recognised impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

I. EXPENSE UNDER EMPLOYEE STOCK OPTION SCHEMES (“ESOS”)

The ESOS provides for grant of stock options to employees to acquire equity shares of the Company that vest in a graded manner and that are to be exercised within a specified period. In accordance with the Guidelines and the Guidance Note on ‘Accounting for Employees Share-based Payments’ issued by the Institute of Chartered Accountants of India, the excess, if any, of the fair value /closing market price on the day prior to the date of grant of the stock options under the ESOS over the exercise price is amortised on a straight-line method over the vesting period and is charged to the Statement of Profit and Loss as employee benefits expense.



In case the vested stock options expires unexercised, the balance in stock options outstanding is transferred to the general reserve. In case the unvested stock options get lapsed / cancelled, the balance in stock option outstanding account is transferred to the Statement of Profit & Loss.

J. INVESTMENTS Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such

investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

K. EMPLOYEE BENEFITS Defined contribution plan

The contribution to provident fund, superannuation fund and pension fund are considered as defined contribution plans and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made and when services are rendered by the employees.

Defined benefit plan

The net present value of obligation towards gratuity to employees is actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit and Loss for the year.

Compensated absences

Employees are not permitted to accumulate leave. Based on the leave rules, unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

L. BORROWING COSTS Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency

borrowings to the extent they are regarded as an adjustment to the interest cost. Interest cost in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.

M. REVENUE RECOGNITION Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be


¡ Interest Income is accounted on accrual basis except in the case of non-performing loans where it is recognised upon realisation, as per the income recognition and asset classification norms prescribed by the RBI.

¡ Front end fees, being in the nature of recovery of costs, on processing of loans are recognised upfront as income.


¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is determined based on the FIFO cost for current investments and weighted average cost for long term investments.

N. POLICY ON SEGMENT The Company is engaged in business of Non banking financial services. As such, there are no separate reportable segments

(including geographical segments).

O. EARNINGS PER SHARE Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding

during the year. Diluted earnings per share is computed by dividing the profit after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the year, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each year.

P. TAXES ON INCOME Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income

for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as notified under the Companies (Accounting Standards) Rules, 2006. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry



forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

As the income of the Company is exempt under section 10(47) of the Income Tax Act, 1961, no deferred tax asset/liability has been recognised from October, 2014, post obtaining registration with RBI as Infrastructure Debt Fund Non - Banking Financial Company (IDF-NBFC).

Q. PROVISIONS AND CONTINGENCIES

Contingent provision against standard assets is made at 0.40% of the outstanding standard assets, higher than the provisioning requirement of 0.35% in accordance with the RBI guidelines.

The policy of provisioning against non performing loans and advances has been decided by the Management considering norms prescribed by the RBI under Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2007. As per the policy adopted, the provision against non performing loans and advances are created on a conservative basis, taking into account Management’s perception of the higher risk associated with the business of the Company.

R. DERIVATIVE CONTRACTS

Interest rate swaps

Interest rate swaps are booked with the objective of managing the interest rate risk on liabilities. Interest rate swaps in the nature of hedge are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of the hedge swaps is amortised over the life of the swap or underlying liability, whichever is shorter.

S. OTHER PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.

T. SERVICE TAX INPUT CREDIT

Service tax input credit is accounted for in the books in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.

U. OPERATING CYCLE

Operating cycle is the normal time between acquisition of assets and their realisation in cash or cash equivalents. Since normal operating cycle cannot be identified, it is assumed to have a duration of twelve months for the purpose of classification of its assets and liabilities as current and non-current.

03 SHARE CAPITAL


NUMBER ` NUMBER `

Authorised shares


Issued, subscribed & fully paid-up shares


(Of the above, 440,000,000 equity shares are held by IDFC Financial Holding Company Limited & its nominees; IDFC Limited is the Ultimate Holding Company)

TOTAL 5,400,000,000 5,400,000,000



NUMBER ` NUMBER `

Outstanding at the beginning of the year 540,000,000 5,400,000,000 310,000,000 3,100,000,000

Issued during the year (see note 24) - - 230,000,000 2,300,000,000

OUTSTANDING AT THE END OF THE YEAR 540,000,000 5,400,000,000 540,000,000 5,400,000,000


1 10 | I D F C A N N U A L R E P O R T 2 0 1 6 – 2 0 1 7


The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

The dividend proposed by the Board of Directors is subject to the approval of shareholders at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the Balance Sheet date as per the provisions of revised Accounting Standards 4.


EQUITY SHARES AS AT MARCH 31, 2017 AS AT MARCH 31, 2016


IDFC Financial Holding Company Limited and its nominees

440,000,000 81.48% 440,000,000 81.48%

Housing Development Finance Corporation Limited 60,000,000 11.11% 60,000,000 11.11%

SBI Life Insurance Company Limited 40,000,000 7.41% 40,000,000 7.41%

(d) Movement in stock options granted under the ESOS is as under:



NUMBER NUMBER

Outstanding as at beginning of the year 3,901,000 -

Add: Granted during the year 2,542,000 3,901,000

Less: Exercised during the year - -

Less: Lapsed / forfeited during the year - -

OUTSTANDING AS AT THE END OF THE YEAR 6,443,000 3,901,000

04 RESERVES AND SURPLUS (REFER NOTE 32)



` `

(a) Special Reserve u/s. 45-IC of RBI Act, 1934

Opening balance 84,040,000 9,040,000

Add : Transferred from surplus in Statement of Profit and Loss 142,000,000 75,000,000

CLOSING BALANCE 226,040,000 84,040,000

(b) Surplus in the Statement of Profit and Loss

Opening balance 331,248,931 35,227,414

Profit for the year 708,415,057 371,021,517

Less: Transfer to Special Reserve u/s. 45-IC of RBI Act, 1934 142,000,000 75,000,000

CLOSING BALANCE 897,663,988 331,248,931

TOTAL RESERVES AND SURPLUS 1,123,703,988 415,288,931

05 LONG-TERM BORROWINGS

`


NON-CURRENT CURRENT NON-CURRENT CURRENT

Debentures (non convertible) (secured) 19,150,000,000 - 8,080,000,000 -

[see note (a), (b), (c) below & note 24]

TOTAL LONG-TERM BORROWINGS 19,150,000,000 - 8,080,000,000 -

(a) The above borrowings are secured by way of mortgage of freehold land and a first floating pari passu charge by way of hypothecation of receivables of the Company arising out of its investments, loans, current assets, loans and advances, both present and future, excluding investments in and other receivables from subsidiaries and affiliates of the IDFC group and lien marked assets.

(b) In terms of the RBI circular (Ref No. DNBR.PD.008 / 03.10.119 / 2016-17 dated September 1, 2016) no borrowings remained overdue as on March 31, 2017. (Previous Year ` Nil).



(c) Interest and repayment terms of long-term borrowings:


RESIDUAL MATURITY BALANCE OUTSTANDING

INTEREST RATE(%) BALANCE OUTSTANDING

INTEREST RATE(%)

Fixed Rate

Above 5 years 2,310,000,000 8 to 8.25 1,030,000,000 8.88

3-5 years 16,840,000,000 7.35 to 8.88 7,050,000,000 8.55 to 8.85

1-3 years - - - -

TOTAL 19,150,000,000 8,080,000,000

06 LONG-TERM PROVISIONS



` `

Contingent provision against standard assets [see note (a) & (b) below] 107,313,061 48,070,351

107,313,061 48,070,351

(a) A contingent provision against standard assets has been created at 0.40% of the outstanding standard assets as against 0.35% required in terms of the RBI circular (Ref. No. DNBR.PD.008 / 03.10.119 / 2016-17 dated September 1, 2016).

(b) Movement in contingent provision against standard assets during the year is as under:

Opening balance 48,070,351 -

Additions during the year 59,242,710 48,070,351

CLOSING BALANCE 107,313,061 48,070,351

07 SHORT-TERM BORROWINGS



` `

Commercial papers (unsecured)

Face value 1,900,000,000 -

Less: Unexpired discount [see note (a) below] 13,147,210 -

1,886,852,790 -

(a) Unexpired discount on commercial papers is net of ` 14,247,190 (Previous Year ` Nil) towards interest accrued but not due.

08 TRADE PAYABLES



` `

Total outstanding dues of micro enterprises and small enterprises (see note 28) - -

Total outstanding dues of creditors other than micro enterprises and small enterprises 990,818 1,094,925


TOTAL 30,333,192 43,455,611




` `

Interest accrued but not due on borrowings 668,969,560 223,170,669

Statutory dues 2,604,190 2,348,906

Payable to Gratuity Fund - 3,513,934

Payable to NPS / Superannuation fund 209,986 28,904

Other liabilities 378,443 260,986

TOTAL 672,162,179 229,323,399



10 TANGIBLE ASSETS (SEE NOTE 24)


BALANCE AS AT

APRIL 1, 2016

ADDITIONS DISPOSALS BALANCE AS AT

MARCH 31, 2017

BALANCE AS AT

APRIL 1, 2016

DEPRECIATION CHARGE FOR

THE YEAR

ON DISPOSALS

BALANCE AS AT

MARCH 31, 2017

BALANCE AS AT

MARCH 31, 2017

BALANCE AS AT

MARCH 31, 2016

(`) (`) (`) (`) (`) (`) (`) (`) (`) (`)

Freehold Land

(refer note below)

382,500 - - 382,500 - - - - 382,500 382,500

(Previous year) - (382,500) - (382,500) - - - - (382,500) -

Vehicles (owned) 6,182,910 1,728,226 - 7,911,136 1,796,596 1,906,079 - 3,702,675 4,208,461 4,386,314

(Previous year) (4,739,431) (1,443,479) - (6,182,910) (223,987) (1,572,609) - (1,796,596) (4,386,314) -

Computers 179,213 334,534 - 513,747 15,630 158,496 - 174,126 339,621 163,583

(Previous year) - (179,213) - (179,213) - (15,630) - (15,630) (163,583) -

Office Equipments 18,875 333,877 - 352,752 3,290 105,815 - 109,105 243,647 15,585

(Previous year) - (18,875) - (18,875) - (3,290) - (3,290) (15,585) -

TOTAL TANGIBLE

ASSETS

6,763,498 2,396,637 - 9,160,135 1,815,516 2,170,390 - 3,985,906 5,174,229 4,947,982

(previous year) (4,739,431) (2,024,067) - (6,763,498) (223,987) (1,591,529) - (1,815,516) (4,947,982) -

Note : The free hold land has been mortgaged in favour of Debenture Trustees against the secured debentures issued by the Company.

11 LOANS (CONSIDERED GOOD, UNLESS STATED OTHERWISE) (SEE NOTE 24)



` ` ` `

Rupee loans [see note (a), (b) & (c) below] 19,282,177,996 971,997,744 9,178,187,268 681,857,025

Debentures [see note (a), (b) and (c) below] 6,393,252,422 180,837,243 2,085,294,891 72,248,858

TOTAL 25,675,430,418 1,152,834,987 11,263,482,159 754,105,883

(a) The above amount includes:

Secured [see note 11(b)] 25,675,430,418 1,152,834,987 11,263,482,159 754,105,883

Unsecured - - - -

(b) The above loans are secured by:

(i) Hypothecation of assets and / or

(ii) Mortgage of property and / or

(iii) Trust and retention account and / or

(iv) Assignment of receivables or rights and / or

(v) Pledge of shares

(c) The classification of loans under the RBI guidelines is as under:



` `

(i) Standard assets 26,828,265,405 12,017,588,042

(ii) Sub-standard assets - -

(iii) Doubtful assets - -

(iv) Loss assets - -

TOTAL 26,828,265,405 12,017,588,042

12 LONG TERM LOANS AND ADVANCES-OTHERS (UNSECURED, CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Advance payment of income tax 173,647,462 60,373,978

(net of provision for tax of ` 12,180,500, Previous year ` 12,180,500)

TOTAL 173,647,462 60,373,978



13 CURRENT INVESTMENTS



` `

Investment in mutual funds (unquoted; at lower of cost and fair value, unless stated otherwise)

634,348.210 units of IDFC Cash Fund-Direct Plan-Growth (previous year-5,78,910.125 units) 1,252,772,423 1,065,000,000

(Face value per unit -` 1,000)

TOTAL 1,252,772,423 1,065,000,000

Aggregate amount of investments in unquoted mutual funds

Cost 1,252,772,423 1,065,000,000

Market value 1,253,297,744 1,066,248,304

Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds

14 CASH AND CASH EQUIVALENTS (SEE NOTE 24)



` `

Balance with bank:

In current account 32,193,364 1,659,003

In deposit account - 1,021,000,000

TOTAL 32,193,364 1,022,659,003

15 SHORT-TERM LOANS AND ADVANCES (CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Prepaid expenses 5,184,643 1,825,182

Supplier Advance 84,857 62,425

Employee Advance 17,350 17,350

Less: Provision for doubtful advance (17,350) -

Other Advance 321,272 -

Balances with government authorities - cenvat credit receivable 561,312 556,365

6,152,084 2,461,322

16 OTHER CURRENT ASSETS (CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Interest accrued on Bank deposits (see note 24) - 593,520

Interest accrued on loans 54,794,319 42,514,445

Interest receivable on debentures 17,365,924 -

TOTAL 72,160,243 43,107,965






` `

Interest [see note (a) below] 1,863,425,300 475,484,935

Other financial services -Fees 62,468,051 24,776,204

Profit on sale of current investments 143,426,862 249,594,769

TOTAL 2,069,320,213 749,855,908

(a) Details of interest income

Interest on loans [see note (i) below] 1,862,319,265 472,766,469

Interest on deposits (see note 24) 1,106,035 2,718,466

TOTAL 1,863,425,300 475,484,935

(i) Interest on loans includes interest on debentures & bonds of ` 429,439,967 (Previous Year ` 58,008,762).




` `

Salaries 67,486,113 75,106,847

Contribution to provident and other funds (Refer Note 22) 7,906,299 8,408,090

Staff welfare expenses 869,043 535,801

TOTAL 76,261,455 84,050,738

19 FINANCE COSTS



` `

Interest expense

(i) Borrowings (see note 24) 1,180,469,281 223,170,669

(ii) Others-Interest on delayed payment of taxes 29,381 14,871

Other borrowing cost (see note 24) 13,706,325 9,057,003

TOTAL 1,194,204,987 232,242,543

20 PROVISIONS AND CONTINGENCIES



` `

Contingent provision against standard assets (see note 6) 59,242,710 48,070,351

TOTAL 59,242,710 48,070,351



21 OTHER EXPENSES



` `

Professional fees 2,097,163 3,851,422

Rates and taxes 1,922,732 55,423

Repairs & maintenance 2,315,599 -

Insurance charges 1,914 1,753

Travelling and conveyance 1,578,063 874,763

Printing and stationery 53,886 6,939

Communication costs 480,545 11,543

Stamp duty and registration fees 7,550 892,131

Directors’ sitting fees 1,050,000 625,000

Shared service cost [see note (a) below & note 24)] 14,720,514 4,265,985

Contribution towards corporate social responsibility (CSR) (see note 24 & note 33) 3,170,870 376,924

Auditor’s remuneration (b) 1,414,734 1,740,646

Advertising & publicity 121,440 88,320


TOTAL 29,025,614 12,879,230

(a) Shared service costs includes amount paid to fellow subsidiary ` 14,720,514, (previous year ` 4,014,125) & ultimate holding company ` Nil, (previous year ` 251,860) towards a Service Level Agreement.

(b) Breakup of Auditors’ remuneration

Audit fees 400,000 400,000


Taxation matters - 500,000

Other Services 860,000 670,000

Out-of-pocket expenses 3,285 -

Service tax 183,860 176,646

Swachh Bharat Cess 6,566 7,000

Krishi Bharat Cess 5,903 -

TOTAL 1,509,614 1,803,646

Less: Cenvat credit available 94,880 63,000

1,414,734 1,740,646

22 In accordance with Accounting Standard 15 on ‘Employee Benefits’ specified under Section 133 of the 2013 Act, the following disclosures have been made:

i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:

FOR THE YEAR ENDED FOR THE YEAR ENDED

` `

March 31, 2017 March 31, 2016

Provident fund 3,373,958 2,023,380

Superannuation fund 347,933 230,192

Pension fund 2,249,210 1,196,466

ii The details of the Company’s post - retirement benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors:



` `

Change in the defined benefit obligations:

Liability at the beginning of the year 19,857,027 -

Current service cost 1,972,460 682,742

Interest cost 1,666,024 383,913

Liabilities assumed on acquisition - 14,898,975





` `

Benefits paid - -

Actuarial loss 695,615 3,891,397

Liability at the end of the year 24,191,126 19,857,027

Fair value of plan assets :

Fair value of plan assets at the beginning of the year 16,343,078 -

Expected return on plan assets 1,295,529 -

Assets acquired on Acquisition /(Distributed on Divestiture) - 14,898,960

Contributions 5,770,418 1,444,118

Benefits paid - -

Actuarial gain on plan assets 1,103,373 -


Amount recognised in the Balance sheet under ‘Other current liabilities’-payable to Gratuity Fund - 3,513,949

Amount recognised in the Balance Sheet under ‘Loans and advances’ 321,272 -

Actual return on plan assets :

Expected return on plan assets 1,295,529 -

Actuarial gain on plan assets - -

Actual return on plan assets 2,398,902 -

Amount recognised in the Balance Sheet:



Amount recognised in the Balance sheet under ‘Other current liabilities’-payable to Gratuity Fund - 3,513,949

Amount recognised in the Balance Sheet under ‘Loans and advances’ 321,272 -

Expense recognised in the Statement of Profit and Loss :

Current service cost 1,972,460 682,742

Interest cost 1,666,024 383,913

Expected return on plan assets (1,295,529) -

Net actuarial (gain) / loss recognised during the year (407,758) 3,891,397

Expense recognised in the Statement of Profit and Loss under ‘Employee benefits expense’ 1,935,197 4,958,052

Reconciliation of the liability recognised in the Balance Sheet:

Opening net asset / (liability) (3,513,949) -

Expense recognised 1,935,197 4,958,052

Contribution by the Company 5,770,418 1,444,118

Expected employer’s contribution next year 2,000,000 1,000,000

Experience adjustments:

Defined benefit obligation 24,191,126 19,857,027

Plan assets 24,512,398 14,898,960

Recoverable on short settled Liability on divestiture - 15

Surplus /(Deficit) before contribution 321,272 (4,958,052)

Contribution made by Company - 1,444,118

Surplus /(Deficit) 321,272 (3,513,934)

Experience adjustments on plan liabilities (212,912) -

Experience adjustments on plan assets 1,103,373 -

Investment pattern:

Insurer managed funds 24,512,398 16,343,078

Principal assumptions:

Discount rate (p.a.) 7.15% 8.00%

Expected rate of return on assets (p.a.) 7.50% 9.00%

Salary escalation rate (p.a.) 8.00% 8.00%

The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.



23 The Company is engaged in business of Non banking financial services. As such, there are no separate reportable segments (including geographical segments) as per Accounting Standard 17 on ‘Segment Reporting’ specified u/s 133 of Companies Act, 2013.

24 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:

I. Ultimate Holding Company: IDFC Limited

II. Holding company: IDFC Financial Holding Company Limited

III. Fellow Subsidiaries

i) IDFC Bank Limited

ii) IDFC Foundation

iii) IDFC Asset Management Company Limited

IV. Key Management personnel:

i) Sadashiv S. Rao- Chief Executive Officer

The nature and volume of transactions carried out with the above related parties in the ordinary course of business is as follows:

NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS AT MARCH 31, 2017


` `

A ULTIMATE HOLDING COMPANY

1 IDFC Limited

I Expense

Shared services cost (*) - 235,383

Interest expenses on NCDs issued - 8,933,607

Charges paid for use of hardware 92,343 -

II Assets / Transactions

Purchase of fixed assets - 675,877

Assignment of third party loans - 4,944,000,000

III Liabilities / Transactions

Inter corporate deposits received & repaid - 1,900,000

NCDs issued & outstanding - 450,000,000

Interest on NCDs issued - 8,933,607

B HOLDING COMPANY

1 IDFC Financial Holding Company Limited

I Liabilities / Transactions

Proceeds from issue of equity shares - 1,300,000,000

Outstanding equity share capital 4,400,000,000 4,400,000,000

C FELLOW SUBSIDIARIES

1 IDFC Bank Limited

I Income

Interest on Fixed deposits 1,106,035 2,718,466

Processing fees on loan reimbursed 4,785,908 -

II Expense

Shared services cost expense (*) 14,412,154 3,751,518

Arranger fees paid (*) 583,878 131,424

III Assets/Transactions

Purchase of fixed assets - 198,088

Purchase of third party NCDs - 1,088,259,724

Reimbursement of accrued interest on third party NCDs - 4,073,375

Fixed deposits placed 177,000,000 2,635,500,000

Fixed deposits matured 1,198,000,000 1,614,500,000



NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS AT MARCH 31, 2017


` `

Assignment of third party loans 736,206,821 1,252,092,044

Outstanding fixed deposits - 1,021,000,000

Interest accrued on fixed deposits-balance outstanding - 593,520

Receivable on fair value of swap book 122,810 -

Balance in current account 31,680,248 1,503,731

Iv Off balance-sheet exposure

Interest Rate swap (Notional principal) 850,000,000 -

2 IDFC Foundation

I Expense

Contribution towards corporate social responsibility (CSR) 3,170,870 376,924

3 IDFC Asset Management Company Limited

I Expense

Charges paid for use of hardware / server 16,685 -

(*) The amounts exclude service tax expensed out in the statement of profit & Loss

D REMUNERATION TO KEY MANAGEMENT PERSONNEL:

(i) Mr. Sadashiv S Rao - Chief Executive Officer Remuneration paid 25,844,532 25,030,298

25 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014:



Profit after tax (`) 708,415,057 371,021,517

Weighted average number of shares for computation of basic earnings per share 540,000,000 379,371,585

Weighted average number of shares for computation of diluted earnings per share 546,019,488 379,563,437

Basic earnings per share (`) 1.31 0.98

Diluted earnings per share (`) 1.30 0.98

Nominal value per share (`) 10 10

The reconciliation between the basic and the diluted earnings per share is as follows



Basic earnings per share (`) 1.31 0.98

Effect of outstanding stock options (0.0145) (0.0005)

Diluted earnings per share (`) 1.30 0.98

The basic earning per share has been computed by dividing the net profit after tax for the year available for equity Shareholders by the weighted average number of equity shares for the respective years, whereas the diluted earning per share has been computed by dividing the net profit after tax for the year available for equity Shareholders by the weighted average number of equity shares, after giving dilutive effect of the outstanding stock options for the respective years. The relevant details as described above are as follows:



Weighted average number of shares for computation of basic earnings per share 540,000,000 379,371,585

Dilutive effect of outstanding stock options 6,019,488 191,852

Weighted average number of shares for computation of diluted earnings per share 546,019,488 379,563,437

26 There are no contingent liabilities as at the end of current year and the previous year.

27 The Company has entered into interest rate swaps in the nature of ‘fixed / floating’ or ‘floating / fixed’ for notional principal of ` 850,000,000 outstanding as on March 31, 2017 (Previous Year ` Nil ) for varying maturities linked to various benchmarks for asset liability management and hedging. (Refer note 24).



28 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:



a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year

Nil Nil

b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

Nil Nil

c) the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006

Nil Nil

d) the amount of interest accrued and remaining unpaid at the end of each accounting year Nil Nil

e) the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006

Nil Nil


29 The following additional information is disclosed in terms of the RBI circular (Ref No. DNBR .PD. 008 / 03.10.119 / 2016-17 dated September 01, 2016) and RBI circular DNBR(PD) CC No. 053 / 03.10.119 / 2015-16 :

(a) Capital to risk assets ratio (CRAR):



i) CRAR (%) 28.96% 43.05%

ii) CRAR - Tier I Capital (%) 28.49% 42.67%

iii) CRAR - Tier II Capital (%) 0.47% 0.38%

iv) Amount of Subordinated Debt considered as Tier-II Capital - -

v) Amount raised by issue of Perpetual Debt Instruments - -

(b) Details of Investments are set out below:



` `

1 VALUE OF INVESTMENTS

(i) Gross Value of Investments

(a) In India 1,252,772,423 1,065,000,000


(A) 1,252,772,423 1,065,000,000

(ii) Provision for depreciation

(a) In India - -


(B) - -

(iii) Net Value of Investments

(a) In India 1,252,772,423 1,065,000,000


(A-B) 1,252,772,423 1,065,000,000

2 MOVEMENT OF PROVISIONS HELD TOWARDS DEPRECIATION ON INVESTMENTS.

(i) Opening balance - -

(ii) Add: Provisions made during the year - -

(iii) Less: Write-offs / write-back of excess provisions during the year - -

(IV) CLOSING BALANCE - -



(c) Investor group wise classification of all investments (Current and Long Term) in shares and securities (both Quoted and Unquoted):

`






1 Related parties - - - -

(a) Subsidiaries - - - -

(b) Companies in the same group - - - -

(c) Other related parties

2 Other than related parties 1,253,297,744 1,252,772,423 1,066,248,304 1,065,000,000

TOTAL 1,253,297,744 1,252,772,423 1,066,248,304 1,065,000,000

(d) Disclosure on Risk exposure on derivatives

(A) Qualitative disclosures:

(a) Structure and organisation for management of risk in derivatives trading, the scope and nature of risk measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:

The Company undertakes transactions in interest rate swaps for hedging the interest rate risks on the balance sheet. These include the hedging of interest rate on fixed rate rupee denominated liabilities.

The Company’s derivative transactions are governed by the foreign exchange and interest rate risk management policy, as approved by the Board. The risk limits are set up and reviewed periodically and the actual exposures are monitored against the limits allocated to the various counterparties. These limits are set up taking into account counterparty assessment and market factors.

The derivative transactions are originated by Resources Group in compliance with the limits as per the Company’s policy and the RBI guidelines. The Risk team independently monitors the risk limits associated with the derivative transactions and apprises the Asset Liability Management Committee (ALCO) and the Risk Management Committee of the Board (RMC) for the compliance with the policy on derivatives. The Finance team undertakes the activities of trade confirmation, settlement and accounting.

(b) Accounting policy for recording hedge transactions, recognition of income, premiums and discounts, valuation of outstanding contracts:

Interest rate swaps are booked with the objective of managing the interest rate risk on liabilities. Interest rate swaps in the nature of hedge are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of the hedge swaps is amortised over the life of the swap or underlying liability, whichever is shorter.

(B) Quantitative disclosures:

(a) Disclosure in respect of Interest Rate Swaps (IRS) is set out below:



(i) Notional principal of swap agreement 850,000,000 -

(ii) Losses which could be incurred if counterparty failed to fulfil their obligations under the agreement

122,810 -

(iii) Collateral required by the Company upon entering into swaps - -

(iv) Concentration of credit risk arising from the swaps - -

(v) Fair value of the swap book 122,810 -



(b) Disclosure on risk exposure in Derivatives



(i) Quantitative disclosure on risk exposure in derivatives

1 Derivatives (Notional Principal Amount)

(a) For Hedging 850,000,000 -

2 Marked to Market positions -

(a) Asset (+) 122,810 -

(b) Liability (-) - -

3 Credit exposure 8,622,810 -

4 Unhedged exposure - -

(e) Securitisation / Assignment

The Company has not under taken any transactions of Securitisation / Assignment in the current and in the previous year and hence the related disclosures are not applicable to the Company.

(f) Details of non-performing financial assets purchased / sold and accounts subjected to restructuring:

The Company has not undertaken any transactions for purchase / sale of NPA’s in the current and in the previous year and hence the related disclosure are not applicable to the Company

(g) Asset Liability Management Maturity pattern of certain items of assets and liabilities

Current year `

PARTICULARS 1 DAY TO30/31

DAYS (ONEMONTH)

OVER ONEMONTH TO

TWOMONTHS

OVER TWOMONTHS

TO THREEMONTHS

OVER THREEMONTHS TOSIX MONTHS

OVER SIXMONTHSTO ONE

YEAR

OVER ONEYEAR

TO THREEYEARS

OVER THREEYEARS

TO FIVEYEARS

OVER FIVEYEARS

TOTAL

Deposits - - - - - - - - -

Advances (net) 69,797,687 36,524,573 164,903,602 331,315,937 550,293,189 3,654,276,639 4,672,509,477 17,348,644,301 26,828,265,405

Investments 1,252,772,423 - - - - - - - 1,252,772,423

Borrowings 996,094,942 644,574,862 246,182,986 - - - 16,840,000,000 2,310,000,000 21,036,852,790

Foreign Currency

assets

- - - - - - - - -

Foreign Currency

liabilities

- - - - - - - - -

Previous year `

1 DAY TO30 / 31

DAYS (ONEMONTH)

OVER ONEMONTH TO

TWOMONTHS

OVER TWOMONTHS

TO THREEMONTHS

OVER THREEMONTHS TOSIX MONTHS

OVER SIXMONTHSTO ONE

YEAR

OVER ONEYEAR

TO THREEYEARS

OVER THREEYEARS

TO FIVEYEARS

OVER FIVEYEARS

TOTAL

Deposits - - - - - - - - -

Advances (net) 98,717,741 21,441,804 52,850,410 207,128,781 373,967,147 1,719,115,845 1,678,605,478 7,865,760,836 12,017,588,042

Investments 1,065,000,000 - - - - - - - 1,065,000,000

Borrowings - - - - - - 7,050,000,000 1,030,000,000 8,080,000,000

Foreign Currency

assets

- - - - - - - - -

Foreign Currency

liabilities

- - - - - - - - -

In computing the above information, certain estimates, assumptions and adjustments have been made by the Management which have been relied upon by auditors.

(h) Exposures to real estate sector (Based on amounts sanctioned):

This disclosure is not applicable to the Company as there are no exposures, direct or indirect to real estate sector as at March 31, 2017 and as at March 31, 2016.

(i) Exposures to Capital Market

This disclosure is not applicable to the Company as there are no exposures to capital market as at March 31, 2017 and as at March 31, 2016.

(j) Details of Single Borrower Limit and Borrower Group Limit exceeded by the Company

During the years ended March 31, 2017 and March 31, 2016, the Company’s credit exposure to single borrowers and group borrowers were within the limits prescribed by the RBI.



(k) Borrower group-wise classification of assets financed:`



NET OF PROVISION (*) NET OF PROVISION (*)

1 Related parties

(a) Subsidiaries - -

(b) Companies in the same group - -

(c) Other related parties - -

2 Other than related parties 26,720,952,344 11,969,517,691

TOTAL 26,720,952,344 11,969,517,691

(*) Net of provision for standard assets

(l) Unsecured advances

The Company has not given any unsecured advances in the current year and in the previous year.

(m) Registration obtained from other financial regulators

The Company has not obtained registrations from other financial sector regulators.

(n) Penalties / fines imposed by the RBI

During the year ended March 31, 2017 there was no penalty imposed by the RBI and other regulators (Previous Year ` Nil).

(o) Provisions and Contingencies


` `

Break up of ‘Provisions and Contingencies’ shown under the head ‘Expenses’ in the Statement of Profit and Loss

- -

Provisions for depreciation on Investment - -

Provision towards NPA - -

Provision made towards Income tax - -

Other Provision and Contingencies - -

Provision for Standard Assets 107,313,061 48,070,351

107,313,061 48,070,351

(p) Drawdowns from Reserves

The Company has not undertaken any drawdown from reserves during the current year and previous year and hence the related disclosures are not applicable to the Company.

(q) Concentration of Advances


` `

Total Advances to twenty largest borrowers 21,644,289,796 12,004,098,958

Percentage of Advances to twenty largest borrowers to Total Advances of the NBFC 80.7% 99.9%

(r) Concentration of Exposures


` `

Total Exposure to twenty largest borrowers / customers 26,805,548,825 17,454,393,142

Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the NBFC on borrowers / customers

75.5% 86.8%

(s) Concentration of Non Performing Assets (NPAs) / Sectorwise NPAs / Movement in NPAs

The Company did not have any NPAs in the current year and in the previous year and hence the related disclosures are not applicable to the Company.



(t) The information on Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) is given below:

NAME OF THE JOINT VENTURE/ SUBSIDIARY FOR THE YEAR ENDED MARCH 31, 2017

OTHER PARTNER IN THE JV COUNTRY TOTAL ASSETS

Nil Nil Nil

NAME OF THE JOINT VENTURE/ SUBSIDIARY FOR THE YEAR ENDED MARCH 31, 2016

OTHER PARTNER IN THE JV COUNTRY TOTAL ASSETS

Nil Nil Nil

(u) The information on off balance sheet SPV sponsored (which are required to be consolidated as per accounting norms):



Nil Nil

(v) Debentureholder’ complaints :

(a) No. of complaints pending at the beginning of the year Nil

(b) No. of complaints received during the year Nil

(c) No. of complaints redressed during the year Nil

(d) No. of complaints pending at the end of the year Nil

The above information is certified by management and relied upon by the auditors.

30 The additional information required to be disclosed in terms of RBI circular (Ref. No. RBI/2009-2010/356/IDMD/4135/11.08.43/2009-10) dated March 23, 2010 is not applicable for the Company.

31 Ratings assigned by credit rating agencies and migration of ratings during the year


(i) Name of the Rating Agency Credit Analysis & Research Limited

ICRA Limited Credit Analysis & Research Limited

ICRA Limited

(ii) Rating Assigned AAA AAA AAA AAA

(iii) Date of Rating August 23, 2016 June 20 2016 December 22, 2015 February 18, 2016

(iv) Rating Valid upto August 22, 2017 June 19 2017 December 21, 2016 February 17, 2017

The validity of the rating is subject to periodical revalidation by rating agencies.

32 There is no Debenture Redemption Reserve (DRR) created as the Non Banking Financial Companies registered with Reserve Bank of India are not required to create DRR for the privately placed debentures.



33 Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ` 3,170,870 (previous year ` 376,924 ). Amount spent towards CSR during the year and recognised as expense in the statement of profit and loss on CSR related activities is ` 3,170,870 (previous year ` 376,924), which comprise of following:


IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL

(i) Construction/acquisition of any asset - - - - - -

(ii) On purposes other than (i) above 3,170,870 - 3,170,870 376,924 - 376,924

34 The Company is an Infra Debt Fund - Non Banking Finance Company (IDF - NBFC) registered with the Reserve Bank of India on September 22, 2014. The income of the Company, being IDF-NBFC, is exempt under section 10(47) of the Income Tax Act, 1961, with effect from October, 2014.

35 Details of SBN held and transacted during the period November 8, 2016 to December 30, 2016


Closing cash in hand as on November 8, 2016 Nil Nil Nil

(+) Permitted receipts - - -

(-) Permitted payments - - -

(-) Amount deposited in Banks - - -

Closing cash in hand as on December 30, 2016 Nil Nil Nil

36 There were no frauds on the Company by its officers or employees has been noticed or reported during the year.

37 The figures of the previous year have been regrouped wherever necessary, to correspond with those of the current year.






IDFC ALTERNATIVES LIMITED

U67190MH2002PLC137798

Dr. Jaimini Bhagwati (Chairperson)

Mr. Gautam Kaji

Mr. Bharat Shah


Mr. Sanjiv Kapur

Mr. Sunil Kakar

Mr. Vikram Limaye




IDFC Bank Limited

Naman Chambers



Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD’S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifteenth Annual Report of IDFC Alternatives Limited (“the Company”) together with the audited financial statements for the year ended March 31, 2017.



FOR THE PERIOD ENDED MARCH 31, 2017


Total Income 1,310,101,341 1,279,171,564

Less: Total Expenses 1,026,167,893 1,016,363,691

Profit before Tax 283,933,448 262,807,873


Profit after Tax 190,384,448 146,137,873

OPERATIONS REVIEW

Your Company continues to be one of the leading multi-asset class fund managers in India, with presence in the areas of Private Equity, Infrastructure and Real Estate. During the last fiscal year, your Company acted as Fund Manager for a total of seven funds - IDFC Private Equity Fund II, IDFC Private Equity Fund III and IDFC Private Equity Fund IV under the Private Equity asset class; India Infrastructure Fund (“IIF”) and India Infrastructure Fund II (“IIF II”) under the Infrastructure Equity asset class; and IDFC Real Estate Yield Fund (“REYF”) and IDFC Score Fund under the Real Estate asset class.



DIVIDEND

The Directors do not recommend any dividend for the financial year ended March 31, 2017.

BOARD MEETINGS

The Board of Directors of the Company meets atleast once a quarter to review the quarterly results and to decide on business policy and strategy apart from other board business. During the year, the Board met five times on April 28, 2016, July 25, 2016, October 27, 2016, January 30, 2017 and March 28, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013.

The Composition and attendance of the Board Meetings held during FY17 is given in the Table 1.


The Board Committees play a crucial role in the governance structure of the Company and help to delegate particular matters that require greater and more focused attention. The Chairperson of the respective Committee informs the Board about the summary of the discussions held in the Committee Meetings. The minutes of the meetings of all Committees are placed before the Board for review. The Board Committees also request special invitees to join the meeting, wherever appropriate.

The Board has the following Committees.

Audit Committee

Nomination and Remuneration Committee

Corporate Social Responsibility Committee

AUDIT COMMITTEE

The Audit Committee comprises of three Members, majority being IDs. The Committee is headed by Mr. Gautam Kaji and have Mr. Bharat

Shah and Mr. Sunil Kakar as its Members. Ms. Marianne Økland is a permanent invitee to the Audit Committee meeting. During the year, the Audit Committee met four times on April 28, 2016, July 25, 2016, October 27, 2016 and January 30, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance details of the Audit Committee Meetings held during FY17 are given in Table 1.


The NRC comprises of four Members. The Committee is headed by Mr. Vikram Limaye and have Mr. Gautam Kaji, Mr. Bharat Shah and Mr. Sunil Kakar as its Members. The Company has put in place Board approved remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of the Companies Act, 2013.

During the year, two meetings of NRC were held on April 28, 2016 and March 28, 2017. The attendance details of the NRC Meetings held during FY17 are given in Table 1.

I D F C A LT E R N AT I V E S L I M I T E D | 1 2 7

BOARD’S REPORT


The CSR Committee comprises of four Members, Mr. Vikram Limaye being the Chairperson and Mr. Sunil Kakar, Mr. Bharat Shah and Ms. Marianne Økland as Members of the Committee. During the year, one meeting of CSR Committee was held on April 28, 2016. The attendance details of the CSR Meetings held during FY17 are given in Table 1.

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed herewith as Annexure III.


During the year, a separate meeting of Independent Directors was held on April 28, 2016. All Independent Directors attended the said meeting.

ATTENDANCE OF DIRECTORS AT BOARD AND COMMITTEE MEETING(S)

Table 1 shows attendance of Directors at the Board Meetings and Committee meeting(s) held during FY17. Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) held during FY17.

TABLE 1

NAME OF THE DIRECTOR DIN CATEGORY BOARD MEETING

AUDIT COMMITTEE


COMMITTEE


COMMITTEE

Dr. Jaimini Bhagwati 07274047 Independent Director C 5/5 - - -

Mr. Gautam Kaji 02333127 Independent Director 5/5 C 4/4 2/2

Mr. Bharat Shah 00136969 Independent Director 4/5 3/4 2/2 1/1

Mr. Sanjiv Kapur 01356126 Independent Director 5/5 - - -

Ms. Marianne Økland 03581266 Independent Director 5/5 - - 1/1

Mr. Vikram Limaye1 00488534 Non-Executive Director 5/5 - C 2/2 C 1/1

Mr. Sunil Kakar 03055561 Non-Executive Director 5/5 4/4 2/2 1/11 Tendered his resignation w.ef. July 15, 2017.* Figures marked with “C” represent chairperson of the Board/Committee

DECLARATION OF INDEPENDENCEThe Company has received a declaration from IDs at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Companies Act, 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Mr. Sunil Kakar as Director at the ensuing AGM.


1. Mr. M.K. Sinha - Chief Executive Officer

2. Mr. Manish Jindal - Chief Financial Officer

BOARD EVALUATION


The Company is in the process of designing a simplified Questionnaire based on the inputs / views from some of the IDs that would cover the essence of evaluation. The said process is expected to be completed in due course of time.

REMUNERATION POLICY

The Company has in place the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013.

STATUTORY AND TAX AUDITORS

The term of Deloitte Haskins & Sells, LLP (“DHS”), Chartered Accountants, (Registration No. 117366W/W-100018) as Statutory Auditors and Tax Auditors of the Company is getting completed at the ensuing Annual General Meeting (“AGM”).

The Audit Committee and Board of Directors of the Company at their respective meetings held on April 27, 2017 have recommended the appointment of Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors and Tax Auditors of the Company, in place of DHS, for a period of Five years from the conclusion of the 15th AGM of the Company to be held


for FY17, till the conclusion of 20th AGM of the Company to be held for FY22, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis. The said appointment is in compliance with the mandatory rotation of Auditors as per the provisions of the Companies Act, 2013.


The Resolution seeking approval of appointment of PWC is included in the Notice of the ensuing AGM. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company.

AUDITOR’S REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.


As per Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related Party Transactions” is also uploaded on the website of the Company. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.



RISK MANAGEMENT

The Members of the Audit Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.


The Company had 66 employees as on March 31, 2017.

The disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company and the same will be furnished on request.


The Company had one wholly owned subsidiary, namely IDFC Capital (Singapore) Pte. Limited.

A statement containing salient features of the financial statement and all other requisite details of the subsidiary company in the format AOC-I is appended as Annexure I.

PUBLIC DEPOSITS




VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to provisions of Section 177(9) of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014, the Board approved and adopted “Whistle Blower Policy”, which had already been adopted by IDFC Limited, the ultimate holding Company so as to establish vigil mechanism, including reporting to the Management instances of unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Group General Counsel & Head - Legal & Audit was appointed as the Whistle Officer for the purpose of this Policy. The Audit Committee directly oversees the Vigil Mechanism.


There were no foreign exchange earnings during the year. The particulars regarding foreign exchange expenditure are furnished at Note No. 19 in the Notes forming part of the Financial Statements.

BOARD’S REPORT


BOARD’S REPORT


Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable.






There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The Company has in place a policy on Anti Sexual Harassment. There were no instances of Sexual Harassment that were reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company undertakes ongoing trainings to create awareness on this policy.










ACKNOWLEDGEMENTS

We are grateful to Securities and Exchange Board of India, National Stock Exchange of India Limited, BSE Limited, National Securities Depository Limited, Central Depository Services (India) Limited, Ministry of Corporate Affairs and other statutory authorities and its bankers for their continued support to the Company.

The Directors express their gratitude for the support and guidance received from IDFC / IDFC Financial Holding Company Limited and other group companies and also express their warm appreciation to all the employees of the Company for their commendable teamwork, professionalism and contribution during the year.

The Directors extend their sincere thanks to the clients of the Company for their support.


Dr. Jaimini BhagwatiChairperson







1. CIN Foreign Company

2. Name of the subsidiary IDFC Capital (Singapore) Pte. Limited

3. Date since when subsidiary was acquired March 26, 2015

4. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

NA

5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

USD, USD 1 = INR 64.8386

6. Share capital 2,462,166,070

7. Reserves & surplus (489,767,771)

8. Total assets 1,975,054,848

9. Total Liabilities (Excludes Share capital and Reserves & Surplus) 2,656,549

10. Investments 1,270,217,080

11. Turnover 80,473,839

12. Profit before taxation (8,730,050)

13. Provision for taxation -

14. Profit after taxation (8,730,050)

15. Proposed Dividend NA

16. % of shareholding 100

Note: There are no subsidiaries which are yet to commence operations.

No subsidiaries have been liquidated or sold during the year.

PART “B”: ASSOCIATES AND JOINT VENTURES : NOT APPLICABLE

For and on behalf of the Board of Directors ofIDFC Alternatives Limited

Vikram Limaye Director

Sunil Kakar Director

Mumbai, April 27, 2017Manish Jindal Chief Financial Officer






i) CIN U67190MH2002PLC137798


iii) Name of the Company IDFC ALTERNATIVES LIMITED

iv) Category / Sub-Category of the Company Company Limited by shares Indian Non-Government Company

v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051. Tel.: +91 22 4222 2000; Fax: +91 22 2654 0354



Link Intime India Private Limited * C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.




SR. NO.



1. Multi-asset class fund managers 66309 100


SR. NO.

NAME AND ADDRESS OF THE COMPANY CIN/GLN HOLDING / SUBSIDIARY /ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 100 Section 2(46)

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3. IDFC Capital (Singapore) Pte. Ltd. N.A. Subsidiary Company 100 Section 2(87)



CATEGORY OF SHAREHOLDERS NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR


% CHANGE DURING THE

YEARDEMAT PHYSICAL TOTAL % OF

TOTAL SHARES


A. Promoters

(1) Indian

a) Bodies Corp. 219,250 600 219,850 100 219,250 600 219,850 100 NIL

Sub-Total (A)(1):- 219,250 600 219,850 100 219,250 600 219,850 100 NIL

(2) Foreign (A)(2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

A. Total Shareholding of Promoter (A) = (A)(1) + (A)(2)

219,250 600 219,850 100 219,250 600 219,850 100 NIL

B. Total Public Shareholding NIL NIL NIL NIL NIL NIL NIL NIL NIL



Grand Total (A+B+C) 219,250 600 219,850 100 219,250 600 219,850 100 NIL




SR. NO.


SHARE HOLDING AT THE END OF THE YEAR

% CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY


ENCUMBERED TO TOTAL

SHARES


219,850 100 NIL 219,850 100 NIL NIL

TOTAL 219,850 100 NIL 219,850 100 NIL NIL

(iii) Change in Promoters’ Shareholding (please specify, if there is no change): NIL


NOT APPLICABLE


V. INDEBTEDNESS - NIL




SR. NO.

PARTICULARS OF REMUNERATION NAME OF DIRECTORS TOTAL AMOUNTDR. JAIMINI

BHAGWATIGAUTAM

KAJIBHARAT

SHAHSANJIV KAPUR

MARIANNE ØKLAND

VIKRAM LIMAYE

SUNIL KAKAR


Fee for attending board / committee meetings

150,000 300,000 275,000 150,000 175,000 NIL NIL 1,050,000

Commission* 500,000 500,000 500,000 500,000 500,000 NIL NIL 2,500,000

Others, please specify NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL (1) 650,000 800,000 775,000 650,000 675,000 - - 3,550,000

2. Other Non-Executive Directors NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL (2) NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) 650,000 800,000 775,000 650,000 675,000 - - 3,550,000


Note: In terms of the provisions of the Companies Act, 2013, the remuneration payable to Directors other than executive Directors shall not exceed 3% of the net profit of the Company. The remuneration paid to the Directors is well within the said limit.* Commission for FY16 paid in FY17.


SR. NO.


CEO CFO TOTAL

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 21,567,763 10,180,453 31,748,216

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 5,725,485 282,751 6,008,236

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961 - - -

2. Stock Option - - -

3. Sweat Equity - - -

4. Commission - - -

5. Contribution to Provident & Other Funds 2,712,918 1,617,342 4,330,260

TOTAL (A) 30,006,166 12,080,546 42,086,712During FY17 CEO & CFO were paid bonus of ` 1.50 crore & ` 60 lacs, respectively for FY16.







Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Alternatives Ltd. to mandatorily spend on CSR.

During the year, IDFC Alternatives Limited carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others


Mr. Vikram Limaye

Mr. Sunil Kakar

Mr. Bharat Shah







c) Amount unspent, if any; NIL

d) Manner in which the amount spent during the financial year is enclosed as Annexure – A



For IDFC Alternatives Limited

Place: Mumbai Vikram Limaye Sunil KakarDate: June 30, 2017 Chairperson – CSR Committee Director



ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

(` in Lacs)

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO

CSR PROJECT OR ACTIVITY IDENTIFIED SECTOR IN WHICH THE PROJECT IS COVERED (CLAUSE NO. OF SCHEDULE VII TO THE COMPANIES

ACT, 2013, AMENDED)


AMOUNT OUTLAY

(BUDGET)


(1) DIRECT EXPENDITURE ON PROJECTS OR PROGRAMS

(2) OVER HEADS


UP TO THE REPORTING

PERIOD



AGENCY



14.75

1.68 4.65

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.45 3.00



Total 14.75 7.00 19.03


16.85

0.82 0.82





Total 16.85 7.44 7.44


Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone,Dhar, Bhopal, Raisen, Dewas and Indore Karnataka - Hubbali (Dharwad), Haveri, Koppal, Bagalkot, Belgaavi

14.48

5.56 7.89











Total 14.48 11.78 19.29


Total 13.94 17.70 34.05



Total (A) + (B) 60.02 44.98 85.56




[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014](` in Lacs)

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO

CSR PROJECT OR ACTIVITY IDENTIFIED SECTOR IN WHICH THE PROJECT IS COVERED (CLAUSE NO. OF SCHEDULE VII TO THE COMPANIES

ACT, 2013, AMENDED)


AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS


UP TO THE REPORTING

PERIOD



AGENCY



14.75

1.68 4.65

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.45 3.00



Total 14.75 7.00 19.03


16.85

0.82 0.82





Total 16.85 7.44 7.44


Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone,Dhar, Bhopal, Raisen, Dewas and Indore Karnataka - Hubbali (Dharwad), Haveri, Koppal, Bagalkot, Belgaavi

14.48

5.56 7.89











Total 14.48 11.78 19.29


Total 13.94 17.70 34.05



Total (A) + (B) 60.02 44.98 85.56



TO THE MEMBERS OF IDFC ALTERNATIVES LIMITED


We have audited the accompanying financial statements of IDFC ALTERNATIVES LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act.







We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.






d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under Section 133 of the Act.









iv. The Company did not have any holdings or dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016.


For DELOITTE HASKINS & SELLS LLPChartered Accountants(Firm’s Registration No.117366W / W-100018)

Pallavi A. GorakshakarPartner(Membership No. 105035)






We have audited the internal financial controls over financial reporting of IDFC ALTERNATIVES LIMITED (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.





OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the Institute of Chartered Accountants of India.





(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of the auditor’s report of even date)


(b) The Company has a program of verification of fixed assets once over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising the immovable property of building which is freehold, is held in the name of the Company as at the Balance Sheet date.



(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which the provisions of Section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO is not applicable.



(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

According to the information and explanations given to us, during the year, there were no dues payable in respect of Employees’ State Insurance, Sales Tax, Customs Duty and Excise Duty.

(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2017 on account of disputes.






(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its Holding or Subsidiary Company or persons connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable. The Company does not have an associate company.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.







PARTICULARS

NOTES



` `



(a) Share capital 3 2,198,500 2,198,500

(b) Reserves and surplus 4 3,290,170,677 3,099,786,229

Non-current liabilities

(a) Deferred tax liability (Net) 5 66,641,000 64,004,000

Current liabilities


(A) total outstanding dues of micro enterprises and small enterprises 198,676 -

(B) total outstanding dues of creditors other than micro enterprises and small enterprises

240,078,696 255,620,398

(b) Other current liabilities 7 131,399,469 164,146,826

(c) Short-term provisions 8 10,094,684 9,677,059

TOTAL 3,740,781,702 3,595,433,012

ASSETS

Non-current assets

(a) Fixed assets

i) Tangible assets 9a 485,206,470 504,490,140

ii) Intangible assets 9b 197,019 399,893

485,403,489 504,890,033

(b) Non-current investments 10 2,477,894,458 2,482,547,854

(c) Long-term loans and advances 11 376,886,630 315,988,029

Current assets


(b) Cash and cash equivalents 12 13,268,650 17,323,108

(c) Short-term loans and advances 11 120,401,533 103,799,855

(d) Other current assets 13 40,914,112 30,543,951

TOTAL 3,740,781,702 3,595,433,012

See accompanying notes forming part of the financial statements (see notes 1 to 30).


For Deloitte Haskins & Sells LLPChartered Accountants(Registration no. 117366W/W-100018)





Manish Jindal

Mumbai, April 27, 2017 Chief Financial Officer








Manish Jindal



PARTICULARS

NOTES



` `

I INCOME

Revenue from operations 14 1,247,780,617 1,244,127,336

Other income 15 62,320,724 35,044,228

TOTAL INCOME (I) 1,310,101,341 1,279,171,564

II EXPENSES

Employee benefits expenses 16 601,845,146 574,019,322

Finance costs 17 107,385 54,860,806


Other expenses 18 394,745,411 362,286,166

TOTAL EXPENSES (II) 1,026,167,893 1,016,363,691

III PROFIT BEFORE TAX (I-II) 283,933,448 262,807,873

IV TAX EXPENSE

Current tax 90,912,000 111,918,000

Deferred tax 5 2,637,000 4,752,000

TOTAL TAX EXPENSE (IV) 93,549,000 116,670,000

V PROFIT FOR THE YEAR (III-IV) 190,384,448 146,137,873

Earnings per share (nominal value of ` 10 per share)

(a) Basic 26 865.97 664.72

(b) Diluted 865.97 664.72

See accompanying notes forming part of the financial statements (see notes 1 to 30).





` `

A. CASH FLOWS FROM OPERATING ACTIVITIES

Net profit before tax 283,933,448 262,807,873

Adjustments for:


Interest expenses on inter corporate deposit - 54,705,824

Profit on sale of fixed assets (Net) (1,179,764) -

Interest on income tax refund (4,455,957) -

Profit on sale of current investments (21,132,649) (11,412,228)

Provision for expenses recoverable from funds - 74,040,762



Adjustments for (increase) / decrease in operating assets:

Long-term loans and advances (15,151,287) (36,380,808)

Short-term loans and advances (20,050,635) (891,362)

Other current assets (10,370,161) (84,823,682)


Trade payables (15,343,026) (47,578,127)

Other current liabilities (32,747,357) (5,627,797)


Net income tax paid (net of refund) (131,785,732) (151,314,959)

NET CASH FLOW FROM OPERATING ACTIVITIES 61,186,831 78,722,893

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (9,700,183) (68,191,572)

Capital advance - (3,448,957)

Proceeds from sale of fixed assets 4,345,497 -

Purchase of current investments (1,157,800,001) (999,740,000)

Proceeds from sale of current investments 1,093,260,002 1,098,572,719

Proceeds from sale of non-current investments 4,653,396 849,360

Proceeds from sale of non-current investments - associate company - 1,430,000,000

NET CASH FLOW FROM / (USED IN) INVESTING ACTIVITIES (65,241,289) 1,458,041,550




` `

C. CASH FLOWS FROM FINANCING ACTIVITIES

Inter corporate deposit taken - 3,107,500,000

Inter corporate deposit repaid - (4,607,500,000)

Interest paid on inter corporate deposit - (57,294,864)

NET CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES - (1,557,294,864)

NET DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C) (4,054,458) (20,530,421)

Cash and cash equivalents at the beginning of the year (see note 12) 17,323,108 37,853,529

Cash and cash equivalents at the end of the year (see note 12) 13,268,650 17,323,108

(4,054,458) (20,530,421)








Manish Jindal




01 BACKGROUNDIDFC Alternatives Limited (the ‘Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited (‘IDFC FHC’), incorporated in India, providing Investment Management and Advisory Services. The Company is an Investment Manager to IDFC Infrastructure Fund 2 of which IDFC Private Equity Fund II is a unit scheme (“Fund II”), IDFC Infrastructure Fund 3 of which IDFC Private Equity Fund III is a unit scheme (“Fund III”) and India Infrastructure Fund (“IIF”) all of which are domestic venture capital funds registered under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996. The Company is also the Investment Manager to the India Infrastructure Fund II registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 as a category I Alternative Investment Fund and IDFC Real Estate Yield Fund registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 as a category II Alternative Investment Fund.

During the year, the Company was appointed as the Investment Manager to the IDFC SCORE Fund and IDFC Private Equity Fund IV, both registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 as a category II Alternative Investment Fund from April 8, 2016 and September 1, 2016 respectively.


A. BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”)/ the Companies Act, 1956, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

B. USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and any revision or the differences between the actual results and the estimates are prospectively recognised in the future periods.

C. CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of the cash flow statement comprise of cash on hand and demand deposits with banks, short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into a known amount of cash and which are subject to an insignificant risk of change in value.

D. CASH FLOW STATEMENTS

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

E. REVENUE RECOGNITION

i Management fees are recognised on accrual basis as per the terms of the agreement.

ii Interest and other dues are accounted on accrual basis.

iii Dividend is accounted when the right to receive is established.

iv Profit / loss on sale of investments is determined based on the ‘first in first out’ cost for current investments.

v Rental income is recognised on accrual basis as per the terms of the Leave & License Agreement.

F. FIXED ASSETS

Tangible assets

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation and impairment losses, if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Intangible assets

Intangible Assets comprising of system software are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated amortisation and impairment losses, if any. Any expenses on such software for support and maintenance payable annually are charged to the Statement of Profit and Loss.



G. DEPRECIATION AND AMORTISATION

Tangible assets

Depreciation on tangible fixed assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the Companies Act, 2013. Certain electronic items and vehicles are depreciated over a period of two years and four year respectively on a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than `5,000 each are fully depreciated in the year of capitalisation. Having regard to the Part C of Schedule II of the Companies Act, 2013, the Company has reviewed its policy of providing for depreciation on its tangible fixed assets and also reassessed their useful lives. On and from April 1, 2014, the straight line method is being used to depreciate all classes of tangible fixed assets.

Intangible assets

Intangible assets consisting of computer software are pro-rata amortised over a period of three years on the straight-line method.

H. INVESTMENTS

Non-current investments are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis.

Current investments are carried at the lower of cost or fair value on an individual basis.

I. EMPLOYEE BENEFITS

Defined contribution plans

The contribution to provident fund, superannuation fund and pension fund are defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made and when services are rendered by the employees.


The net present value of the Company’s obligation towards Gratuity to employees is funded and actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit and Loss for the year in which they occur.

Compensated absences

Employees are not permitted to accumulate leave. Based on the leave rules, unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

J. OPERATING LEASES

Where the assets are taken on lease

Leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Amount due under the operating leases are charged to the Statement of Profit and Loss, on a straight-line method, over the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the 2013 Act. Initial direct costs incurred specifically for operating leases are recognised as expense in the year in which they are incurred.

Where the assets are given on lease

Leases under which risks and benefits of ownership of the asset are not substantially transferred are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income in respect of operating leases is recognised in the Statement of Profit and Loss on a straight-line method over the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the 2013 Act. Maintenance costs including depreciation are recognised as an expense in the Statement of Profit and Loss.

K. EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the year, unless they have been issued at a later date.



L. INCOME-TAX

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with applicable tax rates and the provisions of the Income-tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the Balance Sheet date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss.

M. PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent Assets are not recognised in the financial statements.

N. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

O. IMPAIRMENT OF ASSETS

The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an appropriate discounting factor. If at the Balance Sheet date, there is a indication that previously recognised impairment loss no longer exists or may have decreased, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

P. SERVICE TAX INPUT CREDIT

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilising the credits.

Q. OPERATING CYCLE

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

R. FUND SET-UP EXPENSES

As the investment manager, one of the key responsibilities of the Company is to undertake setting up new funds and offering Fund’s units on a private placement basis and procure investors’ commitments. To fulfil this responsibility, the Company incurs expenses for and on behalf of the new Fund which are booked as recoverable from the respective new Funds. Management performs an annual assessment of recoverablity of such expenses incurred. Based on management’s assesment, these expenses may be provided / written-off at the year-end as deemed fit.

S. SEGMENT REPORTING

The Company’s Primary segment is reflected based on the principle business carried out i.e. Investment Management and Advisory Services. The risk and return of the business of the Company is not associated with geographical segmentation, hence there is no sencondary segment reporting based on geographical segment.



03 SHARE CAPITAL


NUMBER ` NUMBER `

(A) AUTHORISED


(B) ISSUED, SUBSCRIBED & FULLY PAID UP

Equity shares of ` 10 each 219,850 2,198,500 219,850 2,198,500

(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees; IDFC Limited is the Ultimate Holding Company)

TOTAL 219,850 2,198,500 219,850 2,198,500

(a) Reconciliation of the number of shares and amount outstanding as at the beginning and at the end of the year


NO. OF SHARES HELD

` NO. OF SHARES HELD

`

Outstanding as at the beginning of the year 219,850 2,198,500 219,850 2,198,500

Outstanding as at the end of the year 219,850 2,198,500 219,850 2,198,500

(b) Terms/rights attached to equity shares

The Company has only one class of equity share having a par value of ` 10 each. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the Balance Sheet date as per the provisions of the revised Accounting Standard 4.

In the event of liquidation of Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of preferential amount. However, no such preferential amount exists currently. The distribution will be in proportion to the number of equity shares held by the shareholder.

(c) Details of the Shareholders holding more than 5% of the Share capital

NAME OF SHAREHOLDER AS AT MARCH 31, 2017 AS AT MARCH 31, 2016

NO. OF SHARES HELD

% OF HOLDING NO. OF SHARES HELD

% OF HOLDING

IDFC Financial Holding Company Limited and its nominees 219,850 100% 219,850 100%

219,850 100% 219,850 100%





AS ATMARCH 31, 2016

` `

(A) SECURITIES PREMIUM ACCOUNT

Opening balance 1,998,285,250 1,998,285,250

Closing balance 1,998,285,250 1,998,285,250

(B) GENERAL RESERVE

Opening balance 259,662,721 259,662,721

Closing balance 259,662,721 259,662,721

(C) SURPLUS IN STATEMENT OF PROFIT AND LOSS

Opening balance 841,838,258 695,700,385

Add: Profit for the year 190,384,448 146,137,873

Closing balance 1,032,222,706 841,838,258

TOTAL 3,290,170,677 3,099,786,229

05 DEFERRED TAX LIABILITY (NET)


AS ATMARCH 31, 2016

` `

DEFERRED TAX LIABILITY

On difference between book balance and tax balance of fixed assets 66,928,000 64,459,000

DEFERRED TAX ASSETS

Others 287,000 455,000

DEFERRED TAX LIABILITY (NET) 66,641,000 64,004,000

(a) In compliance with Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of the Companies Act, 2013, ` 2,637,000 (previous year ` 4,752,000) has been debited to the Statement of Profit and Loss towards deferred tax on account of timing differences.

(b) Particulars `

Deferred tax liability (net) as at March 31, 2016 64,004,000

Less: Deferred tax liability (net) as at March 31, 2017 66,641,000

Charged to the Statement of Profit and Loss (2,637,000)

06 TRADE PAYABLES


AS ATMARCH 31, 2016

` `

Outstanding dues of micro enterprises and small enterprises 198,676 -

Outstanding dues of creditors other than micro enterprises and small enterprises

Payable to vendors 9,471,378 52,876,030


TOTAL 240,277,372 255,620,398

Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006: ` `

a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year

Principal 198,676 Interest Nil

Principal Nil Interest Nil

b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

- -

c) the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006

- -

d) the amount of interest accrued and remaining unpaid at the end of each accounting year - -

e) the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006

- -






AS ATMARCH 31, 2016

` `

Fees received in advance 94,083,060 93,161,101

Other amounts received in advance 1,000,000 15,844,942

Payable to employee benefit funds (see note 22) 1,792,574 18,779,956

Security deposit (see note 24) 17,724,000 17,724,000

Others

Statutory remittances 16,799,835 18,636,827

TOTAL 131,399,469 164,146,826



AS ATMARCH 31, 2016

` `

Provision for income tax (net of taxes paid ` 828,869,411 (previous year ` 745,527,035)) 9,710,653 9,293,028

Provision for fringe benefit tax (net of taxes paid ` 14,876,617 (previous year ` 14,876,617)) 384,031 384,031

TOTAL 10,094,684 9,677,059

09 FIXED ASSETS

PARTICULARS GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCK

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` ` ` ` ` ` ` ` ` `

A TANGIBLE ASSETS

Buildings 494,192,000 - - 494,192,000 58,016,787 8,236,533 - 66,253,320 427,938,680 436,175,213

(Previous Year) (494,192,000) (-) (-) (494,192,000) (49,780,254) (8,236,533) (-) (58,016,787) (436,175,213) (444,411,746)

Leasehold Improvements 54,869,812 102,606 - 54,972,418 9,156,893 10,987,399 - 20,144,292 34,828,126 45,712,919

(Previous Year) (-) (54,869,812) (-) (54,869,812) (-) (9,156,893) (-) (9,156,893) (45,712,919) (-)

Computer hardware 11,295,977 1,870,916 927,742 12,239,151 9,808,727 1,099,284 927,742 9,980,269 2,258,882 1,487,250

(Previous Year) (10,206,404) (1,089,573) (-) (11,295,977) (8,898,679) (910,048) (-) (9,808,727) (1,487,250) (1,307,725)

Furniture and fixtures 6,854,198 - 1,297,328 5,556,870 3,683,593 598,439 999,899 3,282,133 2,274,737 3,170,605

(Previous Year) (6,727,411) (126,787) (-) (6,854,198) (3,033,515) (650,078) (-) (3,683,593) (3,170,605) (3,693,896)

Office equipment 11,554,055 1,007,559 637,049 11,924,565 10,528,851 900,032 539,990 10,888,893 1,035,672 1,025,204

(Previous Year) (10,761,626) (792,429) (-) (11,554,055) (9,695,552) (833,299) (-) (10,528,851) (1,025,204) (1,066,074)

Vehicles 24,973,906 10,153,035 5,798,711 29,328,230 8,054,957 7,430,366 3,027,466 12,457,857 16,870,373 16,918,949

(Previous Year) (13,692,622) (11,281,284) (-) (24,973,906) (2,881,157) (5,173,800) (-) (8,054,957) (16,918,949) (10,811,465)

TOTAL (A) 603,739,948 13,134,116 8,660,830 608,213,234 99,249,808 29,252,053 5,495,097 123,006,764 485,206,470 504,490,140

Previous Year (535,580,063) (68,159,885) (-) (603,739,948) (74,289,157) (24,960,651) (-) (99,249,808) (504,490,140) (461,290,906)

B INTANGIBLE ASSETS (OTHER THEN INTERNALLY GENERATED)

Computer software 5,351,825 15,024 - 5,366,849 4,951,932 217,898 - 5,169,830 197,019 399,893

(Previous Year) (5,320,138) (31,687) (-) (5,351,825) (4,715,185) (236,746) (-) (4,951,932) (399,893) (604,953)

TOTAL (B) 5,351,825 15,024 - 5,366,849 4,951,932 217,898 - 5,169,830 197,019 399,893

Previous Year (5,320,138) (31,687) (-) (5,351,825) (4,715,185) (236,746) (-) (4,951,932) (399,893) (604,953)

TOTAL (A) + (B) 609,091,773 13,149,140 8,660,830 613,580,083 104,201,740 29,469,951 5,495,097 128,176,594 485,403,489 504,890,033

Total of Previous Year (540,900,201) (68,191,572) (-) (609,091,773) (79,004,342) (25,197,397) (-) (104,201,740) (504,890,033) (461,895,859)



10 INVESTMENTS (unquoted)(cost)


NON-CURRENT PORTION

CURRENT PORTION NON-CURRENT PORTION

CURRENT PORTION

` ` ` `

INVESTMENT IN EQUITY SHARES (TRADE)

Subsidiary Company

IDFC Capital (Singapore) Pte. Limited 2,462,166,070 - 2,462,166,070 -

55,475,000 (previous year 55,475,000) equity shares of SGD 1 each fully paid up

Others

Aavantika Gas Limited 25,000 - 25,000 -

2,500 (previous year 2,500) equity shares of ` 10 each fully paid up

IndianOil LNG Private Limited - 40,000 - 40,000

4,000 (previous year 4,000) equity shares of ` 10 each fully paid up

INVESTMENTS IN VENTURE CAPITAL UNITS (NON-TRADE)

IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class C

11,132,718 - 13,700,957 -

2,550,000 (previous year 2,550,000) units of ` 10 each, ` 4.69 (previous year ` 5.37) paid up per unit, commitment restricted to ` 7.143 per unit

IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class F

4,570,670 - 6,655,827 -

728,535 (previous year 728,535) units of ` 10 each, ` 8.43 (previous year ` 9.14) paid up per unit

INVESTMENTS IN MUTUAL FUND UNITS (NON-TRADE)

IDFC - Cash Fund Growth - Direct Plan 116,539.627 (previous year 77,208.175) units (Net Assets Value ` 230,250,278 previous year ` 142,203,569)

- 225,972,830 - 140,300,182

TOTAL 2,477,894,458 226,012,830 2,482,547,854 140,340,182

The above investments in venture capital units are subject to restrictive covenants.

11 LOANS AND ADVANCES (unsecured, considered good unless stated otherwise)


NON-CURRENT PORTION


CURRENT PORTION

` ` ` `

Security deposits 58,076,089 23,155,293 84,506,089 20,000,000

Capital advance - - - 3,448,957

Prepaid expenses 64,574,451 62,257,036 30,094,027 39,701,417

Supplier Advance - 135,210 - 149,189

Balances with government authorities

Service tax credit receivable - 34,612,152 - 39,936,566

Advance payment of income tax (net of provision for tax of ` 1,355,675,346 (previous year ` 1,348,427,939))

236,135,254 - 190,387,940 -

Interest accrued and not due - 104,354 - -

Others 18,100,836 2,404,853 10,999,973 2,831,091

Less: Provision for doubtful advance - (2,267,365) - (2,267,365)

TOTAL 376,886,630 120,401,533 315,988,029 103,799,855





AS ATMARCH 31, 2016

` `

Cash on hand 6,090 5,118

Balances with banks

In current accounts (see note 24) 13,262,560 17,317,990

TOTAL 13,268,650 17,323,108

13 OTHER CURRENT ASSETS (unsecured, considered good unless stated otherwise)


AS ATMARCH 31, 2016

` `

Gratuity receivable (see note below) - 1,254,566

Expenses recoverable 40,914,112 103,330,147

Less: Provision for doubtful receivables (see note 21) - (74,040,762)

TOTAL 40,914,112 30,543,951

Note: Represents amount paid by the fund but lying in the IDFC Private Equity Group Gratuity Scheme Account. The funds from the said account were received by the Company subsequent to March 31, 2016.






` `

Management fees 1,247,780,617 1,244,127,336

TOTAL 1,247,780,617 1,244,127,336

15 OTHER INCOME



` `

Profit on sale of fixed assets (Net) 1,179,764 -

Profit on sale of current investments 21,132,649 11,412,228

Interest on income tax refund 4,455,957 -

Rental income (see note 24 and note 25) 35,448,000 23,632,000

Other interest 104,354 -

TOTAL 62,320,724 35,044,228

16 EMPLOYEE BENEFITS EXPENSES



` `

Salaries and bonus (see note 24 and note 25) 554,414,892 520,591,909

Contribution to provident and other funds (see note 22) 40,920,297 44,071,964

Staff welfare expenses 6,509,957 9,355,449

TOTAL 601,845,146 574,019,322

17 FINANCE COSTS



` `

Interest expenses (see note 24) - 54,705,824

Interest tax 107,385 154,982

TOTAL 107,385 54,860,806



18 OTHER EXPENSES



` `

Rent (see note 24 and note 25) 39,794,704 31,726,170

Repairs and maintenance

Equipment 113,002 -

Others (see note 24) 18,353,794 6,822,424

Insurance charges 1,608,196 1,787,211

Electricity 1,772,140 1,450,688

Travelling and conveyance (see note 19) 53,362,881 27,399,535

Realised loss on foreign currency transactions 82,729 74,753

Printing and stationery 1,487,084 1,190,915

Postage, telephone and fax 2,932,802 2,854,641

Advertisement and publicity (see note 19) 24,684,259 25,636,138

Professional fees (see note 19) 171,391,493 121,145,646

Directors' fees 5,850,000 3,050,000

Auditors' remuneration (see note (a) below) 1,433,739 1,581,403

Shared service cost (see note (b) below and see note 24) 5,401,911 5,735,381

Fund organisational expenses (see note 21) - 82,764,955

Brokerage paid - 43,000

Distribution fees 45,072,200 26,887,906

CSR expenditure (see note 24 and note 28) 6,002,229 6,800,000

Miscellaneous expenses (see note 19 and note 24) 15,402,248 15,335,400

TOTAL 394,745,411 362,286,166

(a) Break up of auditors’ remuneration:



` `

Audit fees 750,000 750,000



Out of pocket expenses 8,739 4,394

Service tax 203,703 93,853

TOTAL 1,637,442 1,675,256

Less: Service tax set off claimed 203,703 93,853

TOTAL 1,433,739 1,581,403

(b) Shared service cost of ` 380,911 (previous year ` 3,852,731) represents cost allocated by the Ultimate Holding Company under a service level agreement and ` 5,021,000 (previous year ` 1,882,650) represents cost allocated by IDFC Bank Limited, a fellow subsidiary under a service level agreement dated March 21, 2016.



19 EXPENDITURE IN FOREIGN CURRENCY (on payment basis)


AS ATMARCH 31, 2016

` `

Travelling expenses 2,202,451 1,285,421

Professional fees 627,805 -

Others (include advertisement and miscellaneous expenses) 12,272,517 12,641,431

20 EARNINGS IN FOREIGN CURRENCIESThere are no earnings in foreign currencies.

21 The Company has been actively engaged in raising new international funds in Private Equity and Real Estate space. Given that the international fund raising environment is challenging, no firm commitments were received till March 31, 2016. Accordingly Fund set-up expenses recoverable of ` 74,040,762 had been provided for in FY16. During the year, this amount has been written off in the books of account.

22 EMPLOYEE BENEFITSIn accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of the Companies Act, 2013, the following disclosures have been made:

The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included in note 16 under contribution to provident and other funds:


AS ATMARCH 31, 2016

` `

Provident fund 18,344,279 17,278,528

Pension fund 3,966,124 4,397,125

Superannuation fund 1,553,674 2,001,386

Labour welfare fund 111 1,776

The details of the Company’s post – retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors:


AS ATMARCH 31, 2016

` `

CHANGE IN THE DEFINED BENEFIT OBLIGATIONS:

Liability at the beginning of the year 80,767,243 67,039,729


Interest cost 7,036,838 5,848,706

Benefits paid (12,883,507) (7,399,340)

Actuarial loss 3,549,595 3,717,190

Liability assumed on acquisition 271,174 1,168,042


CHANGE IN FAIR VALUE OF PLAN ASSETS:

Fair value of plan assets at the beginning of the year 63,513,847 70,179,482

Expected return on plan assets 5,767,503 6,283,391

Contributions by the Company 34,309,505 -

Benefits paid (12,883,507) (7,399,340)

Actuarial gain / (loss) on plan assets 210,915 (5,549,686)


TOTAL ACTUARIAL LOSS TO BE RECOGNISED 3,338,680 9,266,876




AS ATMARCH 31, 2016

` `

ACTUAL RETURN ON PLAN ASSETS:


Actuarial gain / (loss) on plan assets 210,915 (5,549,686)

Actual return on plan assets 5,978,418 733,705

AMOUNT RECOGNISED IN THE BALANCE SHEET:



Amount recognised in the Balance Sheet under note 7 “Other current liabilities- Payable to Employee Benefit Funds"

- 17,253,396

EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS:


Interest cost 7,036,838 5,848,706


Net actuarial loss to be recognised 3,338,680 9,266,876

Losses on acquisition/divestiture 271,174 1,168,042

Expense recognised in the Statement of Profit and Loss under note 16 "Employee benefits expenses"

17,056,109 20,393,149

RECONCILIATION OF THE LIABILITY RECOGNISED IN THE BALANCE SHEET:

Opening net liability 17,253,396 (3,139,753)


Contributions by the Company (34,309,505) -

Amount recognised in the Balance Sheet under note 7 “Other current liabilities - Payable to Employee Benefit Funds"

- 17,253,396

EXPECTED EMPLOYER’S CONTRIBUTION FOR THE NEXT YEAR 15,000,000 10,000,000




IN `


Plan assets 90,918,263 63,513,847 70,179,482 31,160,442 22,759,846

Surplus / (deficit) - (17,253,396) 3,139,753 (1,777,245) -

Experience adjustment on plan liabilities

(2,085,060) 3,717,190 (818,432) 4,355,447 2,298,723

Experience adjustment on plan assets 210,915 (5,549,686) 4,644,808 (602,656) -


AS ATMARCH 31, 2016

% %

INVESTMENT PATTERN:

Insurer managed funds

Government securities 27.81 45.48

Deposit and money market securities 14.77 7.06

Debentures / bonds 57.42 47.46

PRINCIPAL ASSUMPTIONS:

Discount rate (per annum) 6.90 7.95

Expected rate of return on assets (per annum) 7.50 9.00

Salary escalation rate (per annum) 8.00 8.00

The estimates of future salary increase considered in the acturial valuation, takes into account inflation, seniority, promotion and other relevant factors.



23 SEGMENT REPORTINGThe Company’s Primary Segments are selected based on the principal business carried out. The Company’s main business is Investment Management and providing Advisory Services. All other activities revolve around the main business. The risk and return of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segments.

24 RELATED PARTY DISCLOSURESIn accordance with the Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of the Companies Act, 2013, the related parties of the Company are as follows:

I Ultimate Holding Company:

IDFC Limited (w.e.f. July 09, 2015)

II Holding Company:

IDFC Limited (upto July 08, 2015)

IDFC Finance Holding Company Limited (w.e.f. July 09, 2015)

III Subsidiary Company

IDFC Capital (Singapore) Pte. Limited

IV Associate

IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited) (from August 28, 2014 upto August 19, 2015)

V Fellow Subsidiary Companies

IDFC Foundation

IDFC Bank Limited


VI Key Management Personnel

Mr. M. K. Sinha - Managing Partner & Chief Executive Officer

The nature and volume of transactions carried out and balances with the above related parties in the ordinary course of business are as follows:

NAME OF THE RELATED PARTY AND NATURE OF THE RELATIONSHIP


AS ATMARCH 31, 2016

` `

(I) ULTIMATE HOLDING COMPANY

IDFC Limited Shared services cost 380,911 928,306

Interest expenses - 3,206,303

Rental Income - 5,908,000

Office Maintenance (Received) - 168,000

Property Tax (Received) - 504,000

Inter corporate deposits taken - 50,000,000

Inter corporate deposits repaid - 1,550,000,000

Purchase of Assets - 4,189,596

Other Repairs and Maintenance 126,970 -



NAME OF THE RELATED PARTY AND NATURE OF THE RELATIONSHIP


AS ATMARCH 31, 2016

` `

(II) HOLDING COMPANY

IDFC Limited Shared services cost - 2,924,425

Interest expenses - 34,839,042

Inter corporate deposits taken - 1,500,000,000


IDFC Financial Holding Company Limited Interest expenses - 16,660,479

Inter corporate deposits taken - 1,557,500,000


Sale of Equity Investment in IDFC Infra Debt Fund Limited

- 1,430,000,000

(III) FELLOW SUBSIDIARY COMPANY

IDFC Foundation CSR expenditure 6,002,229 6,800,000

IDFC Bank Limited Rental Income 35,448,000 17,724,000

Office Maintenance (Received) 1,008,000 504,000

Property Tax (Received) 3,024,000 1,512,000

Security Deposit Received 17,724,000 17,724,000

Shared service cost (Paid) 5,021,000 1,882,650

Bank Charges - 46,028

Rent paid 3,000,000 -

Balance with Bank in current account 12,380,097 15,166,875

IDFC Asset Management Company Limited Computer consumables 91,771 -

(IV) KEY MANAGEMENT PERSONAL

Mr. M. K. Sinha Remuneration paid 45,006,166 68,197,035

25 LEASE DISCLOSURE

In accordance with the Accounting Standard 19 on ‘Leases’ as specified u/s 133 of the Companies Act, 2013, the following disclosures in respect of operating leases are made:

The Company had taken vehicles for certain employees under operating leases, which have expired (previous year expiring between May 2016 to August 2016) during the year. Salaries include gross rental expenses of ` 743,724 (previous year ` 1,519,007).

The committed lease rentals in the future are:


AS ATMARCH 31, 2016

` `

Not later than one year - 202,265

The Company has taken premises under operating leases, which expires between August 2017 to May 2020 (previous year September 2016 to May 2020). Rent include gross rental expenses of ` 36,794,704 (previous year ` 31,726,170).



The committed lease rentals in the future are:


AS ATMARCH 31, 2016

` `

Not later than one year 36,188,371 37,139,403

Later than one year and not later than five years 75,922,976 112,356,554

The Company has given premises under operating lease, which expires in September 2020 (previous year: September 2020). The committed lease rentals in the future are:


AS ATMARCH 31, 2016

` `



26 EARNINGS PER SHAREIn accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of the Companies Act, 2013, the earnings per share has been computed as under:


AS ATMARCH 31, 2016

` `

Net profit after tax for the year 190,384,448 146,137,873

Weighted average number of equity shares 219,850 219,850

Par value per share 10 10

Earnings per share - Basic 865.97 664.72

Earnings per share - Diluted 865.97 664.72

27 PROVISION AND CONTINGENCIES(a) Contingent liabilities and commitments


AS ATMARCH 31, 2016

` `

(I) COMMITMENTS

Uncalled liability on shares and other investments partly paid 585,454 585,454

TOTAL 585,454 585,454

The Company does not account for or recognise contingent assets.

(b) There are no litigations claims made by the Company or pending on the Company.

(c) Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.



28 CORPORATE SOCIAL RESPONSIBILITY (CSR)(a) Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year

` 6,002,229 (previous year ` 6,800,000).

(b) Amount spent towards CSR during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities is ` 6,002,229 (previous year ` 6,800,000), which comprise of following:

S.N. PARTICULARS YEAR ENDED MARCH 31, 2017 YEAR ENDED MARCH 31, 2016



TOTAL

IN `

(i) Construction/acquisition of any asset - - - - - -

(iI) On purposes other than (i) above 6,002,229 - 6,002,229 6,800,000 - 6,800,000

29 DETAILS OF SPECIFIED BANK NOTES (SBNS) HELD AND TRANSACTED DURING THE PERIOD NOVEMBER 08, 2016 TO DECEMBER 30, 2016:

SBNs OTHER DENOMINATION NOTES TOTAL

` ` `

Closing cash in hand as on November 08, 2016 - 4,968 4,968

(+) Permitted receipts - 78,200 78,200

(-) Permitted payments - (18,819) (18,819)

(-) Amount deposited in banks - (7,500) (7,500)

Closing cash in hand as on December 30, 2016 - 56,849 56,849

30 PRIOR YEARS FIGURESPrevious year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.


Vikram Limaye Sunil Kakar

Director Director

Manish Jindal


IDFC CAPITAL (SINGAPORE) PTE. LTD.

Mr. Vikram Limaye


Dr. Rajeev Uberoi

Mr. Sachin Johri

Deloitte & Touche LLP

DBS Bank Limited

One Finlayson Green #16-02

Singapore 049246

Tel +65 6499 0700

Fax +65 6536 3359

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 6 1

DIRECTORS’ STATEMENT

The directors present their statement together with the audited financial statements of the company for the financial year ended March 31, 2017.

In the opinion of the directors, the financial statements of the Company are drawn up so as to give a true and fair view of the financial position of the company as at March 31, 2017 and the financial performance, changes in equity and cash flows of the company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts when they fall due.

1. DIRECTORS

The directors of the company in office at the date of this statement are:

Rajeev Uberoi

Vikram Mukund Limaye

Sachin Johri (Appointed on November 21, 2016)

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate, except for the options mentioned in paragraph 3 of the Directors’ statement.

3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding office at the end of the financial year had no interests in the share capital and debentures of the company and related corporations as recorded in the register of directors’ shareholdings kept by the company under section 164 of the Singapore Companies Act except as follows:

NAME OF DIRECTORS AND COMPANIES IN WHICH INTERESTS ARE HELD

ORDINARY SHARES

SHAREHOLDINGS REGISTEREDIN NAME OF DIRECTOR

SHAREHOLDINGS IN WHICH DIRECTORSARE DEEMED TO HAVE AN INTEREST

AT BEGINNING OF YEAR, OR DATE OF

APPOINTMENT, IF LATER

AT ENDOF YEAR



AT ENDOF YEAR

Ultimate holding company - IDFC Limited

Rajeev Uberoi 132,704 132,704 – –

Vikram Mukund Limaye 2,043,728 2,117,728 – –


OPTIONS TO SUBSCRIBE FOR ORDINARY SHARES IN ULTIMATE HOLDING COMPANY



AT ENDOF YEAR


Rajeev Uberoi 600,000 600,000

Vikram Mukund Limaye 3,575,158 6,528,358

Sachin Johri 125,001 125,001

4. SHARE OPTIONS

(a) Options to take up unissued shares

During the financial year, no options to take up unissued shares of the company were granted.

(b) Options exercised

During the financial year, there were no shares of the company issued by virtue of the exercise of an option to take up unissued shares.

(c) Unissued shares under option

At the end of the financial year, there were no unissued shares of the company under options.

5. AUDITORS

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept reappointment.

ON BEHALF OF THE DIRECTORS

Rajeev Uberoi Sachin Johri Director Director

April 26, 2017


INDEPENDENT AUDITORS' REPORT

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of IDFC Capital (Singapore) Pte. Ltd. (the “company”) which comprise the

statement of financial position of the company as at March 31, 2017, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows of the company for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies, as set out on pages 7 to 28.

In our opinion, the accompanying financial statements of the company are properly drawn up in accordance with the provisions of the

Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”), so as to give a true and fair view of

the financial position of the company as at March 31, 2017 and of the financial performance, changes in equity and cash flows of the

company for the year then ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are

further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of

the company in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics

for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of

the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and

the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages 1 to 2.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance

conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit

or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of

the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are

recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the

audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform

audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our

opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.



(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management.

(d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the management regarding, among other matters, the planned scope and timing of the audit and significant audit

findings, including any significant deficiencies in internal control that we identify during our audit.


In our opinion, the accounting and other records required by the Act to be kept by the company have been properly kept in accordance

with the provisions of the Act.

Public Accountants and


Singapore

April 26, 2017


STATEMENT OF FINANCIAL POSITION MARCH 31, 2017

2017 2016

NOTE US$ US$

ASSETS

Current assets

Cash and cash equivalents 7 10,714,301 9,486,052

Trade and other receivables 8 121,453 416,186

TOTAL CURRENT ASSETS 10,835,754 9,902,238

Non-current assets

Investment in associate 9 19,590,446 20,661,569

Plant and equipment 10 34,883 40,842

TOTAL NON-CURRENT ASSETS 19,625,329 20,702,411

TOTAL ASSETS 30,461,083 30,604,649

LIABILITY AND NET EQUITY

Current liability

Trade and other payables 11 40,959 54,345

Capital and reserves

Share capital 12 42,507,538 42,507,538

Accumulated losses (12,087,414) (11,957,234)

Net equity 30,420,124 30,550,304

TOTAL LIABILITY AND NET EQUITY 30,461,083 30,604,649

See accompanying notes to financial statements.


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME YEAR ENDED MARCH 31, 2017

2017 2016

NOTE US$ US$

REVENUE 13 1,200,000 1,200,000

Other income (losses) 14 52,473 (485,568)

Staff costs 15 (694,396) (672,022)

Professional fees (44,230) (64,304)

Depreciation expense 10 (8,023) (9,237)

Other operating expenses 16 (636,004) (347,935)

Loss before income tax (130,180) (379,066)

Income tax 17 - -

NET LOSS FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(130,180) (379,066)



STATEMENT OF CHANGES IN EQUITY YEAR ENDED MARCH 31, 2017

SHARE CAPITAL ACCUMULATED LOSSES

TOTAL

US$ US$ US$

Balance at April 1, 2015 42,507,538 (11,578,168) 30,929,370

Net loss for the year, representing total comprehensive loss for the year - (379,066) (379,066)

Balance at March 31, 2016 42,507,538 (11,957,234) 30,550,304

Net loss for the year, representing total comprehensive loss for the year - (130,180) (130,180)

BALANCE AT MARCH 31, 2017 42,507,538 (12,087,414) 30,420,124



STATEMENT OF CASH FLOWS YEAR ENDED MARCH 31, 2017

2017 2016

US$ US$

OPERATING ACTIVITIES


Adjustments for:

Reversal of impairment of investment in associate - (238,417)

Depreciation expense 8,023 9,237

Write-down of other receivables - 41,188

Interest income (45,669) (18,275)

Operating cash flows before movements in working capital (167,826) (585,333)

Trade and other receivables 294,733 (329,002)

Trade and other payables (13,386) 17,241

NET CASH GENERATED FROM (USED IN) OPERATING ACTIVITIES 113,521 (897,094)

INVESTING ACTIVITIES

Interest received 45,669 18,275

Purchase of plant and equipment (2,064) (4,788)

Distributions of investment in associate 1,071,123 2,283,814

NET CASH GENERATED FROM INVESTING ACTIVITIES 1,114,728 2,297,301

Net increase in cash and cash equivalents 1,228,249 1,400,207

Cash and cash equivalents at beginning of the year 9,486,052 8,085,845

Cash and cash equivalents at end of the year 10,714,301 9,486,052




01 GENERALThe company (Registration No. 200800200R) is incorporated in Singapore with its registered office and principal place of business at One Finlayson Green #16-02, Singapore 049246. The financial statements are expressed in United States dollars.

The principal activity of the company is to establish funds, act as advisor and manager of funds, and to provide advice in relation to the setting up of funds.

The financial statements of the company for the year ended March 31, 2017 were authorised for issue by the Board of Directors on April 26, 2017.

02 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements are prepared in accordance with the historical cost basis except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Financial Reporting Standards in Singapore (“FRS”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102 Share-based Payment, and measurements that have some similarities to fair value but are not fair value, such as value in use in FRS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows:

¡ Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at

the measurement date;

¡ Level 2 inputs are inputs, other than the quoted market prices included within Level 1, that are observable for the asset or liability,

either directly or indirectly; and

¡ Level 3 inputs are unobservable inputs for the asset or liability.

ADOPTION OF NEW AND REVISED STANDARDS

On April 1, 2016, the company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the company’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following new/revised FRSs and amendments to FRS that are relevant to the company were issued but not effective:

¡ FRS 109 Financial Instruments2

¡ FRS 115 Revenue from Contracts with Customers (with clarifications issued)2

¡ FRS 116 Leases3

¡ Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative1

¡ Amendments to FRS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses1

1 Applies to annual periods beginning on or after January 1, 2017, with early application permitted.


3 Applies to annual periods beginning on or after January 1, 2019, with earlier application permitted if FRS 115 is adopted.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material impact on the financial statements of the company in the period of their initial adoption except for the following:

FRS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS

In November 2014, FRS 115 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. FRS 115 will supersede the current revenue recognition guidance including FRS 18 Revenue, FRS 11 Construction Contracts and the related Interpretations when it becomes effective.



The core principle of FRS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

¡ Step 1: Identify the contract(s) with a customer.

¡ Step 2: Identify the performance obligations in the contract.

¡ Step 3: Determine the transaction price.

¡ Step 4: Allocate the transaction price to the performance obligations in the contract.

¡ Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

Under FRS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in FRS 115 to deal with specific scenarios. Furthermore, extensive disclosures are required by FRS 115.

Management anticipates that the initial application of the new FRS 115 may result in changes to the accounting policies relating to revenue. Additional disclosures will also be made with respect to revenue and other income, including any significant judgement and estimation made. Management is in the process of performing an assessment of the possible impact of implementing FRS 115. It is currently impracticable to disclose any further information on the known or reasonably estimable impact to the company’s financial statement in the period of initial application as the management has yet to complete its detailed assessment. Management does not plan to early adopt the new FRS 115.

INVESTMENTS IN ASSOCIATE

An associate is an entity over which the company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

The equity method of accounting has not been adopted for the investment in associate in the company’s financial statements as the company itself is a fully owned subsidiary of IDFC Limited which presents publicly available consolidated financial statements.

The investment in associate is stated at cost less allowance for impairment with the allowance being the difference between the carrying amount less the net asset value of the Associate, as reduced by distribution of capital invested.

FINANCIAL INSTRUMENT

Financial assets and financial liabilities are recognised on the company’s statement of financial position when the company becomes a party to the contractual provisions of the instrument.

Effective interest rate method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest rate basis for debt instruments.

FINANCIAL ASSETS

Loans and receivables

Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivable are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the effect of discounting is immaterial.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been impacted.

For all other financial assets, objective evidence of impairment could include:

¡ significant financial difficulty of the issuer or counterparty; or

¡ default or delinquency in interest or principal payments; or

¡ it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial



asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

DERECOGNITION OF FINANCIAL ASSETS

The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Classification as debt or equity

Financial liabilities and equity instruments issued by the company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or they expire.

Offsetting arrangements

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of assets, using the written down value method, on the following bases:

Leasehold improvements - 33.33% or 36 months

Computers - 40.00%

Office equipment - 13.91%

Furniture and fittings - 18.10%

Fully depreciated assets still in use are retained in the financial statements.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.

IMPAIRMENT OF NON-FINANCIAL ASSETS

At the end of each reporting period, the company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).



Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

PROVISIONS

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration, received or receivable. Revenue is recognised as follows:

Fee income

Management fee income is recognised over the period the services are rendered based on the applicable terms as agreed with the fund company.

Distributions from associate

Dividend income and income distributions are recognised when declared by the Associate.

RETIREMENT BENEFIT COSTS

Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered the services entitling them to the contributions. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the company’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYEE LEAVE ENTITLEMENT

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

INCOME TAX

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The company’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.



Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION

The financial statements of the company are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The financial statements of the company are presented in United States dollars, which is the functional currency of the company.

Transactions in currencies other than the company’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of each reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also recognised in other comprehensive income.

CASH AND CASH EQUIVALENTS IN THE STATEMENT OF CASH FLOWS

Cash and cash equivalents in the statement of cash flows comprise cash on hand and demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

03 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYIn the application of the company’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

(i) Critical judgements in applying the company’s accounting policies

The management is of the opinion that there are no instances of application of judgements which are expected to have a significant effect on the amounts recognised in the financial statements.

(ii) Key sources of estimation uncertainty

The management is of the opinion that there are no key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, except as follows:

Impairment of investment in associate

The investment held in associate has been accounted at cost less allowance for impairment, if any, of the associate. Net asset value is the amount recoverable based on the financial statements of the associate. The company uses its judgement to ensure that investment amount adjusted to net asset value is recoverable and appropriate.



04 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL RISKS MANAGEMENT

(a) Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

2017 2016

US$ US$

Financial assets

Loans and receivables (including cash and bank balances) 10,803,895 9,864,840


At amortised cost 40,959 54,345

At the end of reporting period, the company does not have any financial instruments subject to offsetting, enforceable master netting arrangements or similar agreements.

(b) Credit risk

Credit risk refers to the risk that debtors will default on their obligations to repay the amount owing to the company, resulting in a loss to the company. The company has adopted a stringent procedure in extending credit terms to its customers and in monitoring its credit risk.

The company does not have any significant credit risk exposure as at the end of the reporting period. The company places its cash with creditworthy financial institutions.

The maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as at the end of the reporting period is the carrying amount of the financial assets as stated in the statement of financial position.

(c) Interest rate risk

The company does not have any significant interest bearing assets and liabilities except fixed deposits. Management is of the view that given the current low interest rates, it is not exposed to significant interest rate risk, and accordingly sensitivity analysis is not disclosed.

(d) Foreign currency risk

The company’s foreign currency exposures arise mainly from the exchange rate movements of the Singapore dollar against the United States dollar.

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the company’s functional currency are as follows:

SINGAPORE DOLLAR

US$

2017 2016

ASSETS

Cash and cash equivalents 92,812 121,397

Trade and other receivables 47,055 164,139

TOTAL 139,867 285,536

LIABILITIES

Trade and other payables 40,959 54,344

Net currency exposure 98,908 231,192

Foreign currency sensitivity

The following table details the sensitivity to a 8% (2016 : 9%) increase and decrease in the relevant foreign currencies against the functional currency of the company. 8% (2016 : 9%) is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates.

If the relevant foreign currency weakens by 8% (2016 : 9%) against the functional currency of the company, loss will increase (decrease) by:

SINGAPORE DOLLAR IMPACT

2017 2016

US$ US$

Loss 7,913 20,807

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.



(e) Liquidity risk

The company maintains sufficient cash and bank balances to fund its daily operating requirement. In addition, the company also relies on the holding company to fund any shortfall in liquidity requirements.

All financial assets and financial liabilities in 2016 and 2017 are repayable on demand or due within 1 year from the end of the reporting period.

(f) Fair values of financial assets and financial liabilities

Management considers that the carrying amounts of cash and cash equivalents, trade and other receivables and trade and other payables that are carried at amortised cost approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The company does not have financial assets/liabilities that are carried at fair values on a recurring basis.

(g) Capital risk

The company reviews its capital structure at least annually to ensure that it will be able to continue as a going concern. The capital structure of the company comprises of issued share capital net of accumulated losses.

The company is required to maintain a minimum amount of capital as prescribed under the Securities and Futures Act (Chapter 289) and relevant Regulations. The company is in compliance with the capital requirements for the years ended March 31, 2017 and March 31, 2016.

There were no changes to the company’s overall strategy during the year.

05 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONSThe company is a wholly-owned subsidiary of IDFC Alternatives Ltd. India. The company’s ultimate holding company is IDFC Limited, incorporated in India. Related companies in these financial statements refer to members of the ultimate holding company’s group of companies.

Some of the company’s transactions and arrangements are between members of the group and the effect of these on the basis determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand unless otherwise stated.

During the year, the company has entered into the following transactions with its related companies:

2017 2016

US$ US$

Recharges to a related company 48,693 44,928

06 OTHER RELATED PARTY TRANSACTIONSSome of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances are unsecured, interest-free and repayable on demand unless otherwise stated.

During the year, the company has entered into the following transactions with its related parties:

2017 2016

US$ US$

Management fee earned from a related party 1,200,000 1,200,000

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

2017 2016

US$ US$

Short-term benefits 374,962 302,305

The figures for 2017 and 2016 do not include any remuneration attributable to the key management from the bonus pool that has been accrued for in the financial statements as the allocation is yet to be determined.




2017 2016

US$ US$

Cash and bank balances 510,752 2,386,052

Fixed deposits 10,203,549 7,100,000

TOTAL CASH AND CASH EQUIVALENTS 10,714,301 9,486,052

The fixed deposit bears interest at an average rate of 1.33% (2016 : 0.34%) per annum and matures within twelve months (2016 : six months) from the end of year. The fixed deposits are readily convertible into cash with insignificant risk of changes in value and hence are included in cash and cash equivalents.

08 TRADE AND OTHER RECEIVABLES

2017 2016

US$ US$

Trade receivables from a related company (Note 5) 4,166 4,297

Recoverables from related parties (Note 6) - 319,974

Prepayments 31,859 37,398

Deposits 44,868 46,420

Others 40,560 8,097

TOTAL 121,453 416,186

Recoverables from related parties relate to administrative expenses paid on behalf of related party funds which will be recovered from India Infrastructure Fund (Singapore) Pte Ltd. The average credit period is 30 days (2016 : 30 days). At year-end, there were no balances which were past due and no impairment allowance was made.

09 INVESTMENT IN ASSOCIATE

2017 2016

US$ US$

Cost of investment in associate 20,661,569 22,706,966

Net distribution during the year (1,071,123) (2,283,814)

Write back for impairment - 238,417

19,590,446 20,661,569

Details of the company’s associate at year end is as follows:

NAME OF ASSOCIATE PLACE OF INCORPORATION

EFFECTIVE OWNERSHIP AND VOTING POWER PRINCIPAL ACTIVITY

2017%

2016%

Emerging Markets Private Equity Fund LP Guernsey 43.28 43.28 Private equity fund

In November 2014, the company acquired a 46.15% stake in Emerging Markets Private Equity Fund from a related company at a value of US$ 22,368,000 with a commitment of US$ 30,000,000 and an effective commitment for investment of US$ 26,705,585 resulting in effective ownership of 43.28%.

In accordance with the fund constitution documents, all distributions received from the fund until the capital is repaid in full is treated as distribution of capital. Distributions over and above the sums invested will be considered as revenue and will be taken to profit or loss.



10 PLANT AND EQUIPMENT

LEASEHOLDIMPROVEMENTS

COMPUTERS OFFICE EQUIPMENT

FURNITURE AND FITTINGS

TOTAL

US$ US$ US$ US$ US$

Cost:

At April 1, 2015 148,219 96,696 34,005 65,050 343,970

Additions - 4,067 721 - 4,788

At March 31, 2016 148,219 100,763 34,726 65,050 348,758

Additions - - - 2,064 2,064

At March 31, 2017 148,219 100,763 34,726 67,114 350,822

Accumulated depreciation:

At April 1, 2015 148,219 86,454 16,867 47,139 298,679

Depreciation - 3,936 2,315 2,986 9,237

At March 31, 2016 148,219 90,390 19,182 50,125 307,916

Depreciation - 3,467 2,036 2,520 8,023

At March 31, 2017 148,219 93,857 21,218 52,645 315,939

Carrying amount:

At March 31, 2017 - 6,906 13,508 14,469 34,883

At March 31, 2016 - 10,373 15,544 14,925 40,842

11 TRADE AND OTHER PAYABLES

2017 2016

US$ US$

Accruals and others 40,959 54,345

Accrued expenses principally comprise amounts outstanding for ongoing costs.

12 SHARE CAPITAL

2017 2016 2017 2016

NUMBER OF ORDINARY SHARES US$ US$

Issued and paid up:

At the beginning and end of the year 55,475,000 55,475,000 42,507,538 42,507,538

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the company.

13 REVENUE

2017 2016

US$ US$

Management fee income from a related party (Note 6) 1,200,000 1,200,000

14 OTHER INCOME (LOSSES)

2017 2016

US$ US$

Net foreign exchange gain - 23,815

Reversal of amount received from an associate - (532,589)

Recharges to a related company 3,209 3,696

Interest income 45,669 18,275

Government grant 3,595 1,235

52,473 (485,568)



15 STAFF COSTS

2017 2016

US$ US$

Included in staff costs are:

Costs of defined contribution plans 29,583 30,912

16 OTHER OPERATING EXPENSES

2017 2016

US$ US$

Rental and related expenses 180,532 180,777

Fund organisational expenses 352,013 -

Travelling expenses 36,018 22,094

Corporate communication expense 1,850 1,880

Net foreign exchange loss 5,852 -

Write down of other receivables - 41,188

General administrative expenses 59,739 101,996

TOTAL 636,004 347,935

17 INCOME TAXThe income tax benefit varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2016 : 17%) to profit before income tax as a result of the following differences:

2017 2016

US$ US$

(Loss) Profit before income tax (130,180) (379,066)

Tax benefit at the statutory tax rate of 17% (2016 : 17%) (22,131) (64,441)

Tax losses not recognised as deferred tax assets 22,131 64,441

- -

Subject to the agreement by the tax authorities, at the end of the reporting period, the company has unutilised tax losses of US$10,149,944 (2016 : US$10,027,787) available for offset against future profit. Deferred tax asset of US$1,725,490 (2016 : US$1,704,724) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.

18 COMMITMENTS

a) Operating lease commitments

2017 2016

US$ US$

Minimum lease payments under operating leases 171,433 172,030

At the end of the reporting year, the company has outstanding commitments under non-cancellable operating leases, which fall due as follows:

2017 2016

US$ US$

Within one year 165,955 171,616

In the second to fifth years inclusive - 3,446

Operating lease payments represent rentals payable by the company for rental of office premises and equipment. Leases are negotiated for an average term of two years, with an option to renew for another one year subject to terms and conditions then prevailing.

b) The company has a commitment to inject capital to its associate amounting to US$4,362,569.

IDFC TRUSTEE COMPANY LIMITED

U65990MH2002PLC137533


Dr. Rajeev Uberoi

Mr. Mahendra N. Shah

Deloitte Haskins & Sells


IDFC Bank Limited

Naman Chambers



Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 7 9

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifteenth Annual Report together with the audited financial statements for the year ended March 31, 2017.


(AMOUNT IN `)



Total Income 1,49,21,112 8,404,474

Less: Total Expenses 1,76,725 328,927

Profit before Tax 1,47,44,387 8,075,547


Profit after Tax 1,11,45,116 5,577,547

COMPANY’S AFFAIRS

The main object of the Company is to act as trustee for various investment funds under the private equity business primarily established by IDFC Limited and its subsidiaries.

The Company continues to act as the trustee of India Infrastructure Fund, IDFC Infrastructure Fund 2 – IDFC Private Equity Fund II, IDFC Infrastructure Fund 3 – IDFC Private Equity Fund III, IDFC Project Equity Domestic Investors Trust – I, IDFC Project Equity Domestic Investors Trust – II, India Infrastructure Fund II, IDFC Real Estate Yield Fund, IDFC Score Fund, IDFC Private Equity Fund - IV, IDFC Private Equity Employee Benefit Trust.



DIVIDEND


BOARD OF DIRECTORS

The Board comprises of three Directors. In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Mr. Sunil Kakar at the ensuing AGM.


During the year, four Board meetings were convened and held. The gap between the two meetings was within the limit prescribed under the Companies Act, 2013. The composition of Board is in compliance with the Companies Act, 2013. The dates of the meetings were: April 28, 2016, July 25, 2016, October 27, 2016 and January 30, 2017. Attendance details of the Board Meeting are given in the below table.

ATTENDANCE DETAILS OF BOARD OF DIRECTORS FOR FY17

NAME OF THE MEMBER DIN POSITION NO. OF MEETINGS HELD

NO. OF MEETINGS ATTENDED

Mr. Sunil Kakar 03055561 Chairperson & Non-Executive Director 4 4

Dr. Rajeev Uberoi 01731829 Non-Executive Director 4 4

Mr. Mahendra N. Shah 00124629 Non-Executive Director 4 4

AUDITORS

The Shareholders of the Company had approved appointment of Deloitte Haskins & Sells (“DHS”), Chartered Accountants, (Registration No. 117365W) as Statutory Auditors for a period of 5 years to hold office from the conclusion of the Twelfth Annual General Meeting up to the conclusion of the Seventeenth Annual General Meeting of the Company. There are no qualifications or observations or other remarks made by the Statutory Auditors in their report for FY17.

The Board of Directors of the Company at its meeting held on April 27, 2017 have recommended the appointment of Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of DHS, for a period of five years from the conclusion of the ensuing AGM of the Company to be held for FY17 till the conclusion of the 20th AGM of the Company to be held for FY22, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis.

BOARD'S REPORT




The Company has in place the policy on Related Party Transactions (“RPT”) and the same has been uploaded on the website of the Company. Since all RPTs entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control that commensurate with operations of the Company to ensure compliance with policies and procedures.

RISK MANAGEMENT

The Board members ensures control of risk factors and advice on the same to the Management of the Company.



PUBLIC DEPOSITS





There was no income or expenditure in foreign currency during the year under review.




As per Section 134(3)(I) of the Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2017 till the date of this report.





AUDITOR’S REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.


The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as Annexure I.

BOARD'S REPORT




(a) in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) such accounting policies have been selected and applied consistently and 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, 2017 and of the profit and loss of the Company for that period;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual financial statements have been prepared on a going concern basis; and

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

ACKNOWLEDGEMENTS

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and IDFC Financial Holding Company Limited and other group companies.




BOARD'S REPORT





i) CIN U65990MH2002PLC137533


iii) Name of the Company IDFC TRUSTEE COMPANY LIMITED


v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051. Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354



Link Intime India Private Limited * C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.




SR. NO.



1. Act as Trustee for various investment funds under the Private Equity business.

6619 100


SR. NO.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY/ASSOCIATE % OF SHARES HELD

APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 100 Section 2(46)

2. IDFC Financial Holding Company Limited

U65900TN2014PLC097942 Holding Company 100 Section 2(46)




NO. OF SHARES HELD AT THE END OF THE YEAR % CHANGE DURING

THE YEARDEMAT PHYSICAL TOTAL % OF

TOTAL SHARES


SHARES

A. Promoters

(1) Indian

a) Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Bodies Corp. 49,400 600 50,000 100 49,400 600 50,000 100 NIL

e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL

Sub-total (A) (1):- 49,400 600 50,000 100 49,400 600 50,000 100 NIL

(2) Foreign NIL NIL NIL NIL NIL NIL NIL NIL NIL

Total shareholding of Promoter (A) = (A)(1)+(A)( 2)

49,400 600 50,000 100 49,400 600 50,000 100 NIL





ANNEXURE IFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN



SR. NO.




DURING THE YEAR

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY


ENCUMBERED TO TOTAL

SHARES


50,000 100 NIL 50,000 100 NIL NIL

TOTAL 50,000 100 NIL 50,000 100 NIL NIL

(iii) Change in Promoters’ Shareholding ( please specify, if there is no change)-NO CHANGE


NOT APPLICABLE


V. INDEBTEDNESS




B. Remuneration to other directors: NIL






TO THE MEMBERS OF IDFC TRUSTEE COMPANY LIMTED


We have audited the accompanying financial statements of IDFC TRUSTEE COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.










Opinion

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profits and its cash flows for the year ended on that date.







e) On the basis of the written representations received from the directors as at 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as at 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.



f) With respect to the adequacy of the internal financial controls over financial reporting of the Company refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.





iv. The Company did not have any holdings or dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November, 2016 to 30th December, 2016.


For DELOITTE HASKINS & SELLSChartered Accountants(Firm’s Registration No. 117365W)





(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of auditor’s report of even date)


We have audited the internal financial controls over financial reporting of IDFC TRUSTEE COMPANY LIMITED (“the Company”) as of 31st March, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.







OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For DELOITTE HASKINS & SELLSChartered Accountants (Firm’s Registration No. 117365W)




(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ section of auditor’s report of even date)

(i) The Company does not have any fixed assets and hence reporting under clause (i) of the CARO 2016 is not applicable.







(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees State Insurance, Sales Tax, Customs Duty and Excise Duty.

(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at 31st March, 2017 for a period of more than six months from the date they became payable.

(c) There are no dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on 31st March, 2017 on account of disputes.




(xi) The Company has not paid any managerial remuneration during the year and hence reporting under clause (xi) of the CARO 2016 is not applicable.




(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For DELOITTE HASKINS & SELLSChartered Accountants (Firm’s Registration No. 117365W)








Notes ` `



(a) Share capital 3 500,000 500,000

(b) Reserves and surplus 4 49,523,222 38,378,106

50,023,222 38,878,106

Current liabilities



Total outstanding dues of creditors other than micro enterprises and small enterprises 45,000 58,409

(b) Other current liabilities 6 5,000 14,491

(c) Short-term provisions 7 - 191,040

50,000 263,940

TOTAL 50,073,222 39,142,046

ASSETS

Non-current assets

(a) Long-term loans and advances 8 90,063 117,214

Current assets


(b) Cash and cash equivalents 10 26,081,234 396,362

(c) Short-term loans and advances 11 6,655 13,488

(d) Other current assets 12 1,083,112 -

49,983,159 39,024,832

TOTAL 50,073,222 39,142,046




For and on behalf of the Board of Directors of IDFC Trustee Company Limited


Mahendra N. Shah Director





YEAR ENDED MARCH 31, 2017


NOTES ` `

I INCOME


Other income 14 6,059,468 104,474

TOTAL INCOME (I) 14,921,112 8,404,474

II EXPENSES

Finance costs 15 - 56

Other expenses 16 176,725 328,871

TOTAL EXPENSES (II) 176,725 328,927

III PROFIT BEFORE TAX (I - II) 14,744,387 8,075,547

IV TAX EXPENSE

Current tax 3,600,000 2,498,000

Short/(excess) provision in earlier years (729) -


V PROFIT FOR THE YEAR (III - IV) 11,145,116 5,577,547

Earnings per equity share (nominal value of share ` 10)

Basic (`) 19 222.90 111.55

Diluted (`) 222.90 111.55











Notes

For the year ended March 31, 2017

For the year ended March 31, 2016

` `

(A) CASH FLOW FROM OPERATING ACTIVITIES


Adjustments for :

Profit on sale of current investments (4,810,095) (104,474)

Interest income (1,249,373) -



Adjustment for (increase) / decrease in operating assets

Long term loans and advances 3,009 81,900

Short term loans and advances 6,833 (7,308)

Adjustment for increase / (decrease) in operating liabilities

Trade payables (13,409) (76,500)

Other current liabilities (9,491) 9,494

8,671,862 7,978,659

Direct taxes paid (3,766,170) (2,306,962)


(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Current investments - (6,210,000)

Sale of Current investments 20,612,919 600,000

Interest received 166,261 -

NET CASH FROM / (USED IN) INVESTING ACTIVITIES (B) 20,779,180 (5,610,000)

(C) CASH FLOW FROM FINANCING ACTIVITIES - -

NET CASH FROM FINANCING ACTIVITIES (C) - -

Net increase in cash and cash equivalents (A+B+C) 25,684,872 61,697

Cash and cash equivalents as at the beginning of the year 10 396,362 334,665

Cash and cash equivalents as at the end of the year 10 26,081,234 396,362










01 BACKGROUND IDFC Trustee Company Limited is a wholly owned subsidiary of IDFC Financial Holding Company Limited (“Ultimate Holding - IDFC

Limited”). This Company is formed for providing trusteeship services.


(A) BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the 2013 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(B) USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and any revision or the estimates are prospectively recognised in the future periods.

(C) INVESTMENTS

Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

(D) REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before the respective revenue is recognised:

¡ Trusteeship fees are accounted for on an accrual basis in accordance with the agreements.


¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is

determined based on the FIFO cost for current investments and weighted average cost for long term investments.

(E) TAXES ON INCOME

Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as specified under section 133 of the Companies Act, 2013. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.

(F) CASH AND CASH EQUIVALENTS Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash on hand, cash in bank, fixed deposits and

other short term highly liquid investments with an original maturity of three months or less that are readily convertible into a known amounts of cash and which are subject to insignificant risk of change in value.

(G) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.



(H) EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

(I) PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.

(J) OPERATING CYCLE


(K) SERVICE TAX INPUT CREDIT

Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.

(L) IMPAIRMENT OF ASSETS


03 SHARE CAPITAL



AUTHORISED SHARES

Equity shares of `10 each 100,000 1,000,000 100,000 1,000,000


Equity shares of `10 each 50,000 500,000 50,000 500,000

[All of these shares are held by IDFC Financial Holding Company Limited, the holding company and its nominees (IDFC Limited is the Ultimate Holding Company)].

TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 500,000 500,000






Outstanding at the beginning of the year 50,000 500,000 50,000 500,000


Outstanding at the end of the year 50,000 500,000 50,000 500,000


¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is

entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders

at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at

the Balance Sheet date as per the provisions of revised Accounting Standard 4.

¡ In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining

assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists

currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Details of shareholders holding more than 5% of the shares in the company



IDFC Financial Holding Company Limited and its nominees 50,000 100.00% 50,000 100.00%



(`) (`)

(a) Surplus in the Statement of Profit and Loss

Opening balance 38,378,106 32,800,559


Closing balance 49,523,222 38,378,106

05 TRADE PAYABLES


(`) (`)



- Provision for expenses 45,000 58,409

TOTAL 45,000 58,409

Disclosures under the Micro, Small and Medium Enterprises Development Act, 2006:



(a) The principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year.

- -

(b) The amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year.

- -


- -

(d) The amount of interest accrued and remaining unpaid at the end of each accounting. - -


- -






(`) (`)

Statutory remittances 5,000 14,491

TOTAL 5,000 14,491



(`) (`)

Provision for income tax - 191,040

[Net of advance tax of ` Nil (Previous year ` 2,330,000)]

TOTAL - 191,040

08 LONG TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Advance payment of income tax [Net of provision for tax ` 12,621,451 (Previous Year ` 6,523,451)] 90,063 114,205

Supplier advance - 3,009

TOTAL 90,063 117,214

09 CURRENT INVESTMENTS (NON TRADE; AT LOWER OF COST AND FAIR VALUE, UNLESS STATED OTHERWISE)

FACE VALUE (`)


NUMBER OF UNITS

(`) NUMBER OF UNITS

(`)

Current maturity of long-term investments

IDFC Fixed Term Plan Series 25 Direct Plan - Growth 10 - - 1,500,000.000 15,000,000

Current investment in mutual funds (unquoted)

IDFC Cash Fund - Direct Plan - Growth 1000 7,634.462 12,812,158 8,166.130 13,614,982

IDFC Ultra Short Term Fund Direct Plan - Growth 10 616,488.604 10,000,000 616,488.604 10,000,000

TOTAL 22,812,158 38,614,982


Cost 22,812,158 38,614,982

Market value 29,357,036 47,259,653

Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.



(`) (`)

CASH AND CASH EQUIVALENTS

Balance with bank:

In current accounts 181,234 396,362

In deposit account 25,900,000 -

TOTAL 26,081,234 396,362



11 SHORT-TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Balances with government authorities - Cenvat credit available 6,655 13,488

TOTAL 6,655 13,488



(`) (`)

Interest accrued on deposits 1,083,112 -

TOTAL 1,083,112 -


YEAR ENDEDMARCH 31, 2017


(`) (`)

Trusteeship fees 8,861,644 8,300,000

TOTAL 8,861,644 8,300,000

14 OTHER INCOME



(`) (`)

Interest on deposits 1,249,373 -

Profit on sale of current investments 4,810,095 104,474

TOTAL 6,059,468 104,474

15 FINANCE COST



(`) (`)

Interest on delayed payment of service tax - 56

TOTAL - 56

16 OTHER EXPENSES



(`) (`)

Rates and taxes 7,402 2,980

Professional fees 47,402 68,460

Auditors' remuneration [see note (a)] 120,595 125,000

Bad debts written off - 112,000

Directors' sitting fees - 20,000

Miscellaneous expenses 1,326 431

TOTAL 176,725 328,871






(`) (`)

Audit fee 50,000 50,000


Out of pocket expense 595 -


Less: Service tax set off claimed (16,800) (15,450)

TOTAL 120,595 125,000

17 The Company is engaged in the business of providing trusteeship services. As such, there is no separate reportable primary business segment or geographical segment as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of the Companies Act, 2013.

18 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of the Companies Act, 2013, the related parties of the Company are as follows:

RELATIONSHIP:

HOLDING COMPANY:

IDFC Financial Holding Company Limited

ULTIMATE HOLDING COMPANY

IDFC Limited

FELLOW SUBSIDIARY

IDFC Bank Limited

PARTICULARS TRANSACTION MARCH 31, 2017 MARCH 31, 2016

(`) (`)

IDFC Bank Limited Balance in Current Account 173,821 246,737

IDFC Bank Limited Balance in Deposit Accounts 25,900,000 -

IDFC Bank Limited Interest on deposits (Net of TDS) 1,124,436 -

IDFC Bank Limited Interest accrued but not due 1,083,112 -

19 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013:



Profit for the year (`) 11,145,116 5,577,547

Weighted average number of equity shares (Nos.) 50,000 50,000

Basic & Diluted Earnings Per Share (`) 222.90 111.55

Nominal Value Per Share (`) 10 10



20 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)



(`) (`)

Contingent liabilities

Claims not acknowledged as debts in respect of:

Income-tax demands disputed by the Company (net of amounts provided). The matters in dispute are under appeal. The demands have been partly paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

- 595,951

a. There are no litigations claims made by the Company or pending on the Company.

b. Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

21 Details of Specific Bank Notes (SBNs) held and transacted during the period November 8, 2016 to December 30, 2016 is provided in table below:


Closing cash in hand as on November 8, 2016 - - -

Add: Permitted receipts - - -

Less: Permitted payments - - -

Less: Amount deposited in Banks - - -

Closing cash in hand as on December 30, 2016 - - -

22 PREVIOUS YEAR FIGURES

Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.





IDFC SECURITIES LIMITED

U99999MH1993PLC071865

Mr. Vikram Limaye (Chairperson)


Mr. T S Bhattacharya

Mr. Ajay Sondhi

Mr. Sunil Kakar

Dr. Rajeev Uberoi

Deloitte Haskins & Sells,


IDFC Bank Limited

Naman Chambers



Mumbai 400 051

Tel. +91 22 6622 2600

Fax + 91 22 6622 2501



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C S E C U R I T I E S L I M I T E D | 1 9 9

TO THE MEMBERS

Your Directors have pleasure in presenting the Twenty Fourth Annual Report, together with the audited financial statements for the financial year ended March 31, 2017.

OPERATIONAL REVIEW AND FUTURE OUTLOOK

Institutional Broking

Even though FY17 was challenging, Indian capital markets witnessed steady gains through the year delivering a return of 18.5%. So while events such as Brexit, the US Presidential elections and currency demonetisation created phases of extreme volatility, these were at best momentary. So much so that FIIs brought in approx US$8.4bn during the year to complement the steady inflow of US$4.7bn from DIIs.

In hindsight, these phases of uncertainty were transient and markets bounced back convincingly at every opportunity driven by increased participation. Steadily improving global macro data helped strengthen consumer, business and investor confidence. Even the Fed found little resistance while undertaking two back-to-back rate hikes, something which would have been almost impossible to digest a year back.

IDFC Securities delivered a stellar performance during the year – while market volumes increased approx 23% YOY in FY17, our market share improved across domestic and foreign institutional clients. Furthermore, our efforts across the research, sales and dealing desks were well recognized by clients and were backed by strong accolades from leading surveys such as AsiaMoney and Institutional Investor.

With the Nifty hitting new highs, we believe FY18 will see increased fund flows into India. Currently, flows into emerging markets (EM) have been boosted by improving macro and trade statistics, and the strengthening of EM currencies. India, with it’s strong fundamentals and policy impetus, is attracting a significant proportion of these flows. We expect this trend to continue this year. The much anticipated roll-out of GST and it’s impact on business and consumer sentiment will be closely watched. Nevertheless, going ahead we believe that the improvement in public finances, deleveraging of corporate balance sheets, improvement in demand and consequently industry capacity utilisation, will be key monitorables for most investors.

During FY 16, IDFC Securities Limited was engaged in the business of Institutional Broking, Research and Investment Banking. IDFC Bank Limited, Fellow Subsidiary obtained Investment Banking license from SEBI. For better business synergy, post IDFC Bank Limited receiving Investment Banking license from SEBI, Complete deal pipe line of Investment Banking Business was transferred to IDFC Bank Limited.


(AMOUNT IN `)



From continuing operations

Total Income 754,073,563 543,153,142


Profit before Tax 166,280,673 7,211,305


Profit / (Loss) after Tax 111,897,569 (1,857,305)

From discontinuing operations

Profit after Tax discontinuing operations - 150,377,806




DIVIDEND

Your Directors have decided not to recommend any dividend for the financial year ended March 31, 2017.

BOARD OF DIRECTORS

The Board of Directors oversee the management functions to ensure that these are effective and enhance Shareholder value. The Board’s mandate inter alia is to have an oversight of the Company’s strategic direction, to review corporate performance, assess the adequacy of risk management and mitigation measures, to authorise and monitor strategic investments, to ensure regulatory compliance as well as high standards of governance and safeguard interests of all stakeholders. The Board comprises of five Directors including two Independent Directors (IDs). The IDs are eminent personalities with significant experience and expertise in the fields of banking, finance and strategy advisory. None of the Directors are related to any other Director or employee of the Company.

BOARD'S REPORT


BOARD MEETINGS

The Board of Directors of the Company meets at least once a quarter to review the quarterly results and to decide on business policy and strategy apart from other board business. During the year, the Board met five (5) times on April 25, 2016, July 22, 2016, October 24, 2016, January 23, 2017 and March 20, 2017 and the intervening period between two Board meetings was well within the maximum gap of 120 days as prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY17 is given in the Table 1.


The Board Committees play a crucial role in the governance structure of the Company and help to delegate particular matters that require greater and more focused attention. The Chairperson of the respective Committee informs the Board about the summary of the discussions held in the Committee Meetings. The minutes of the meetings of all Committees are placed before the Board for review. Majority of the members of all the Committees consist of IDs. The Board Committees also request special invitees to join the meeting, wherever appropriate. The Company Secretary officiates as the Secretary to all the Committees.

The Board has currently established the following Committees.

i) Audit Committee ii) Nomination & Remuneration Committee iii) Corporate Social Responsibility Committee

Attendance of Directors at Board and Committee Meeting(s)

Table 1 shows attendance of Directors at the Board Meetings and Committee meeting(s) held for the year ended March 31, 2017. Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s) required to be attended.

Table 1

NAME OF THE DIRECTOR DIN CATEGORY BOARD MEETING

AUDIT COMMITTEE


COMMITTEE


COMMITTEE

Mr. Vikram Limaye** 00488534 Chairperson C 5/5 - 2/2 -

Mr. T S Bhattacharya 00157305 ID 5/5 C 4/4 2/2 1/1

Mr. Ajay Sondhi 01657614 ID 5/5 4/4 2/2 -

Mr. Sunil Kakar 03055561 Director 5/5 4/4 C 2/2 C 1/1

Dr. Rajeev Uberoi 01731829 Director 5/5 - - 1/1

* Figures marked with “C” represent Chairperson of the Board/Committee

** Tendered his resignation w.e.f. July 15, 2017

AUDIT COMMITTEEThe Audit Committee comprises of three Members, majority being IDs. The Committee is headed by Mr. T S Bhattacharya and has Mr. Ajay Sondhi and Mr. Sunil Kakar as its members. During the year, the Audit Committee met four (4) times on April 25, 2016, July 22, 2016, October 24, 2016 and January 23, 2017. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The Committee meets, inter alia, to review the accounts of the Company, transactions with related party and to discuss the audit findings and recommendations of the internal and statutory auditors. The composition and attendance details of the Audit Committee Meetings held during FY17 is given in Table 1.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

The NRC comprises of four Members. The Committee is headed by Mr. Sunil Kakar and has Mr. T S Bhattacharya, Mr. Ajay Sondhi and Mr. Vikram Limaye as its members. The NRC meets, inter alia, to fill up vacancies in the Board, evaluate the performance of the Board and its individual Members. The NRC recommends to the Board from time to time the framework relating to the remuneration for the Directors, Key Managerial Personnel, Senior Managerial Personnel and other employees. The Company has put in place Board approved remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013.

During the year, two meetings of NRC was held on April 25, 2016 and March 20, 2017. The composition and attendance details of the NRC Meetings held during FY17 is given in Table 1.


The CSR Committee comprises of three Members, Mr. Sunil Kakar being the Chairperson and Mr. T S Bhattacharya and Dr. Rajeev Uberoi as members of the Committee. The Company’s primary focus areas for CSR activities are Education, Health Care, Skill development and sustainable livelihoods, Rural Development, Support employee engagement in CSR activities, Capacity building for corporate social responsibility and other areas. The Company continued to partner with IDFC Foundation (a Section 8 company which is a wholly owned subsidiary of IDFC Limited) for Inclusive Growth to support the cause of sustainable livelihood and skill development, elementary education, primary health to achieve the CSR objectives. During the year, one (1) CSR meeting was convened and held on April 25, 2016. The composition and attendance details of the CSR Meetings held during FY17 is given in Table 1.

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed herewith as Annexure III.

BOARD'S REPORT



The IDs of the Company met on April 25, 2016 without the presence of the non-independent Directors and senior management team of the Company. Both the IDs attended the said meeting. The IDs discussed matters as required under the relevant provisions of the Companies Act, 2013.


The shareholders of the Company at the Annual General Meeting (AGM) held on September 9, 2016 approved the appointment of i) Mr. Ajay Sondhi as ID of the Company for a period of three years and ii) Mr. T S Bhattacharya as ID of the Company for a period of two years.


1. Mr. Anish Damania - Chief Executive Officer

2. Mr. Hitesh Desai - Chief Financial Officer

3. Ms. Priyanka Agrawal - Company Secretary*

*During the year, Ms. Priyanka Agrawal was appointed as the Company Secretary in the capacity of Key Managerial Personnel (KMP) w.e.f. October 24, 2016.


As per the provisions of the Companies Act, 2013, IDs are not liable to retire by rotation and the terms of appointment of IDs is governed by the provisions of Companies Act, 2013. The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.

BOARD EVALUATION


The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. For this purpose the Company may engage an External Agency to carry out the entire Annual Board Evaluation process independently. The said process is expected to be completed in due course of time.

REMUNERATION POLICY

The Board has a Remuneration policy in place, for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013. The said Remuneration Policy is available on the website of the Company.

STATUTORY AUDITORS

At the AGM of the Company held on September 9, 2016, the shareholders had approved the appointment of Deloitte Haskins & Sells (DHS), Chartered Accountants, (Registration No. 117365W) as Statutory Auditors for a period of 1 year to hold office from the conclusion of the 23rd AGM up to the conclusion of the 24th AGM of the Company. There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report on the Financial Statements for FY17. DHS will retire at the conclusion of the ensuing AGM.

Section 139(2) of Companies Act, 2013 requires companies to mandatorily rotate their auditors once the auditor has served the office for a consecutive period of 10 years or more. A transition period of three years was provided for companies incorporated prior to April 1, 2014 to comply with the said provisions which ended on March 31, 2017. Accordingly, beginning April 1, 2017, all companies which are required to rotate their auditors under the Act, will have to rotate their existing auditors if they have held office as company’s auditors for a consecutive period of 10 years or more.

Accordingly, the Audit Committee and Board of Directors of the Company at their respective meetings held on April 24, 2017 recommended the appointment of Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of Deloitte Haskins & Sells, LLP, Chartered Accountants, for a period of five years from the conclusion of the 24th AGM of the Company to be held for FY17, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis. The said appointment is in compliance with the mandatory rotation of auditors as per the provisions of the Companies Act, 2013.


The Resolution seeking approval for appointment of PWC is included in the Notice of the ensuing AGM. The Board recommends the appointment of PWC, as the Statutory Auditors of the Company as per the details given in the Notice.

BOARD'S REPORT



As per Section 177, read with Section 188 of the Act and the Rules made thereunder, the Audit Committee approves the related party transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related Party Transactions” is uploaded on the website of the Company. Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company. As per Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are included in the Notes to Accounts.


The Company has two direct wholly-owned subsidiaries namely IDFC Securities Singapore Pte. Limited and IDFC Capital (USA) Inc. as at the end of the Financial Year. The Company does not have any Joint Venture and Associate Company. A statement containing salient features of the financial statements and all other requisite details of all the subsidiary companies in the format AOC-I is appended as Annexure I.


The Company had 84 employees as on March 31, 2017.

Disclosures pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company and the same will be furnished on request.

PUBLIC DEPOSITS




VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to provisions of Section 177(9) of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014, the Board approved and adopted “Whistle Blower Policy”, which had already been adopted by IDFC Limited, the ultimate holding Company so as to establish vigil mechanism, including reporting to the Management instances of unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Group General Counsel & Head - Legal & Compliance was appointed as the Whistle Officer for the purpose of this Policy. The Audit Committee directly oversees the Vigil Mechanism.

The details of Whistle Blower Policy/Vigil mechanism are posted on the website of the Company.


The particulars regarding foreign exchange expenditure and earnings are furnished in Note no. 26 in the Notes forming part of the Financial Statements.


Since the Company does not own any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.



BOARD'S REPORT







There are no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations.


The Company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.




(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2017 and profit of the company for that period;






ACKNOWLEDGEMENTS

The Directors thank Securities and Exchange Board of India, National Stock Exchange of India Limited, Bombay Stock Exchange Limited, National Securities Depository Limited, Central Depository Services (India) Limited and other statutory authorities and its bankers for their continued support to the Company.

The Directors express their gratitude for the support and guidance received from IDFC / IDFC Financial Holding Company Limited and other group companies and also express their warm appreciation to all the employees of the Company for their commendable teamwork, professionalism and contribution during the year.

The Directors extend their sincere thanks to the clients of the Company for their support.

FOR AND ON BEHALF OF DIRECTORS



BOARD'S REPORT






1 CIN Foreign Company Foreign Company

2 Name of the subsidiary IDFC Securities Singapore Pte. Ltd IDFC Capital (USA) Inc.

3 Date since when subsidiary was acquired January 2013 August 2009

4 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

April 1, 2016 to March 31, 2017 April 1, 2016 to March 31, 2017

5 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

INR Conversion rate:64.8386 INR Conversion rate:64.8386

6 Share capital 149,125,695 46,240,000

7 Reserves & surplus (115,020,703) 15,313,019

8 Total assets 36,513,039 62,868,449

9 Total Liabilities 36,513,039 62,868,449

10 Investments - -

11 Turnover 21,045,016 33,624,604

12 Profit / (Loss) before taxation (16,335,967) 2,192,496

13 Provision for taxation - 1,980,677

14 Profit/(Loss) after taxation (16,335,967) 211,819

15 Proposed Dividend - -

16 Extend of shareholding in % 100% 100%

Note: i. There are no subsidiaries which are yet to commence operations. ii. No subsidiaries have been liquidated or sold during the year.





i) CIN U99999MH1993PLC071865


iii) Name of the Company IDFC SECURITIES LIMITED


v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354


vii) Name, Address and Contact details of Registrar and Transfer Agent, if any Link Intime India Pvt. Ltd* C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.



For and on behalf of the Board of Directors ofIDFC Securities Limited


Sunil KakarDirector

Mumbai, April 24, 2017Hitesh DesaiChief Financial Officer

Priyanka AgrawalCompany Secretary





SR. NO.



1. Institutional Broking 6612 92

2. Investment Banking 6619 8


SR. NO.


% OF SHARES HELD APPLICABLE SECTION

1 IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 100 Section 2(46)

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3. IDFC Securities Singapore Pte Ltd Foreign Company Subsidiary 100 Section 2(87)

4. IDFC Capital (USA) Inc. Foreign Company Subsidiary 100 Section 2(87)



CATEGORY OF SHAREHOLDERS

NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR NO. OF SHARES HELD AT THE END OF THE YEAR % CHANGE DURING THE

YEARDEMAT PHYSICAL TOTAL % OF TOTAL


SHARES

A. PROMOTERS

Indian

a) Bodies Corp. 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL

SUB-TOTAL (A):- 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL

TOTAL SHAREHOLDING OF PROMOTER (A)

14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL

B. PUBLIC SHAREHOLDING NIL NIL NIL NIL NIL NIL NIL NIL NIL

C. SHARES HELD BY CUSTODIAN FOR GDRS & ADRS


GRAND TOTAL (A+B+C) 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL


SR. NO.




DURING THE YEAR

NO. OF SHARES

% OF TOTAL SHARES OF

THE COMPANY



NO. OF SHARES


COMPANY




14,137,200 100 NIL 14,137,200 100 NIL NIL

TOTAL 14,137,200 100 NIL 14,137,200 100 NIL NIL

(iii) Change in Promoters’ Shareholding: NO CHANGE


NOT APPLICABLE

v) Shareholding of Directors and Key Managerial Personnel: NIL


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment: ` IN CRORE


DEPOSITS

UNSECUREDLOANS

INTER CORPORATE DEPOSITS *

TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year - - - -


Addition - 8,700,000,000 8,700,000,000

Reduction - - 8,700,000,000 8,700,000,000

Net Change - - - -


I Principal Amount - - - -

II Interest due but not paid - - 1,232,877 1,232,877

III Interest accrued but not due - - - -

TOTAL (I+II+III) - - 1,232,877 1,232,877

Note : * Interest payable to IDFC Limited, which is the Ultimate holding company towards Inter corporate deposits.




SR. NO.


VIKRAM LIMAYE T. S. BHATTACHARYA AJAY SONDHI SUNIL KAKAR RAJEEV UBEROI


Fee for attending Board & committee meetings

NIL 325,000 300,000 NIL NIL 625,000

TOTAL (1) NIL 325,000 300,000 NIL NIL 625,000

2. Other Non-Executive Directors NIL NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) NIL 325,000 300,000 NIL NIL 625,000



G. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD. IN `

SR. NO.


CEO CFO CS (W.E.F. OCT. 26, 2016)

TOTAL

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

11,124,622 3,465,906 693,998 15,284,526

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 39,600 32,400 NIL 72,000

(c) Profits in lieu of salary under section 17(3) Income – tax Act, 1961

NIL NIL NIL NIL




– as % of profit

– others, specify

5. Contribution to Provident & Other Funds 1,819,800 624,494 62,047 2,506,341

TOTAL (A) 12,984,022 4,122,800 756,045 17,862,867

During FY17, CEO & CFO were paid bonus of ` 1.35 crore & ` 8 lacs, respectively for FY16.

VIII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: NIL






Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Securities Ltd. to mandatorily spend on CSR.

During the year, IDFC Securities Ltd. carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others


Mr. Sunil Kakar, Chairperson

Mr. T. S. Bhattacharya

Dr. Rajeev Uberoi










For IDFC Securities Ltd

Place : Mumbai Sunil Kakar Vikram LimayeDate : June 30, 2017 Chairperson – CSR Committee Director



ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

` IN LAC

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO



AMOUNT OUTLAY

(BUDGET)



HEADS


UP TO THE REPORTING

PERIOD



AGENCY



14.94

1.20 3.23

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.03 2.33



TOTAL 14.94 5.00 13.946 Providing economic and affordable service delivery on water and sanitation to the community. Cl.(i) Sanitation & Safe Drinking water Odisha

17.07

0.58 0.58





TOTAL 17.07 5.25 5.259 Cattle Care program for breed improvement by providing services such as Artificial Insemination

(AI) & other Veterinary Services to enhance the livelihoods of small and marginal farming families in rural districts


14.67

3.94 5.89











TOTAL 14.67 8.33 13.5914 Research & studies on various programmes Various clauses of Schedule VII All India coverage 14.12 12.14 22.93

TOTAL 14.12 12.14 22.93TOTAL DIRECT EXPENSE OF PROJECT & PROGRAMMES (A) 30.72 55.71OVERHEAD EXPENSE (B) 0.75 3.84TOTAL (A) + (B) 60.80 31.47 59.55*IDFC Foundation, a wholly owned subsidiary IDFC Limited, is an implementing agency of IDFC Limited and its group Companies and engaging Corporate Social Responsibility (CSR) activities as per the CSR policy adopted by IDFC & its group companies in line with the Schedule VII of the Companies Act, 2013.




` IN LAC

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO



AMOUNT OUTLAY

(BUDGET)



HEADS


UP TO THE REPORTING

PERIOD



AGENCY



14.94

1.20 3.23

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.03 2.33



TOTAL 14.94 5.00 13.946 Providing economic and affordable service delivery on water and sanitation to the community. Cl.(i) Sanitation & Safe Drinking water Odisha

17.07

0.58 0.58





TOTAL 17.07 5.25 5.259 Cattle Care program for breed improvement by providing services such as Artificial Insemination

(AI) & other Veterinary Services to enhance the livelihoods of small and marginal farming families in rural districts


14.67

3.94 5.89











TOTAL 14.67 8.33 13.5914 Research & studies on various programmes Various clauses of Schedule VII All India coverage 14.12 12.14 22.93

TOTAL 14.12 12.14 22.93TOTAL DIRECT EXPENSE OF PROJECT & PROGRAMMES (A) 30.72 55.71OVERHEAD EXPENSE (B) 0.75 3.84TOTAL (A) + (B) 60.80 31.47 59.55*IDFC Foundation, a wholly owned subsidiary IDFC Limited, is an implementing agency of IDFC Limited and its group Companies and engaging Corporate Social Responsibility (CSR) activities as per the CSR policy adopted by IDFC & its group companies in line with the Schedule VII of the Companies Act, 2013.




TO THE MEMBERS OF IDFC SECURITIES LIMITED


We have audited the accompanying financial statements of IDFC SECURITIES LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act.







We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.






d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under Section 133 of the Act.






i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.



iv. The Company has provided requisite disclosures in the financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the Management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.



Pallavi A. Gorakshakar(Partner)(Membership No. 105035)





Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)We have audited the internal financial controls over financial reporting of IDFC SECURITIES LIMITED (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.





OpinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the Institute of Chartered Accountants of India.









(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.


(iii) The Company has not granted any loans, secured or unsecured, to Companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which the provisions of Section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable.



(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.

According to the information and explanation given to us, during the year there were no dues payable in respect of Employees’ State Insurance, Sales Tax, Customs Duty and Excise Duty.

(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax and Service Tax which have not been deposited as on March 31, 2017 on account of disputes are given below:

NAME OF STATUTE NATURE OF DUES FORUM WHERE DISPUTE IS PENDING

PERIOD TO WHICH THE AMOUNT RELATES

AMOUNT INVOLVED (`)

AMOUNT UNPAID (`)

Income-tax Act, 1961 Income Tax

Income Tax Officer

A.Y. 1997-98 160,000 160,000

A.Y. 1998-99 107,396 107,396

A.Y. 1999-00 87,500 87,500

A.Y. 2007-08 100,807 100,807

A.Y. 2015-16 5,488,205 5,488,205

High CourtA.Y. 2008-09 10,362,211 10,362,211

A.Y. 2010-11 2,914,930 2,914,930

Income Tax Appellate Tribunal

A.Y. 2010-11 261,404 261,404

Service Tax Service Tax

The Commissioner of Service Tax

July 12 - March 13 10,636,201 10,636,201

April 13 – March 14 14,291,421 14,291,421

April 09 - February 10 3,814,268 3,671,607

April 14 - March 15 7,878,647 7,878,647

56,102,990 55,960,329

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company has not taken any loans or borrowings from financial institutions and government or has not issued any debentures.




(xi) The Company has not paid any managerial remuneration during the year and hence reporting under clause (xi) of the CARO 2016 is not applicable.


(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its Holding or Subsidiary Company or persons connected with them and hence provisions of Section 192 of the Companies Act, 2013 are not applicable. The Company does not have an associate company.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.








FOR DELOITTE HASKINS & SELLSChartered Accountants(Firm’s Registration No. 117365W)




Sunil KakarDirector





NOTES ` `



(a) Share capital 3 141,372,000 141,372,000


1,458,592,632 1,346,695,063


(a) Other long-term liabilities 5 176,541 176,541

176,541 176,541

Current liabilities




418,971,505 277,741,983

(b) Other current liabilities 7 130,799,792 30,216,736

(c) Short-term provisions 8 45,964,555 48,240,391

595,735,852 356,199,110

TOTAL 2,054,505,025 1,703,070,714

ASSETS

Non-current assets

(a) Fixed assets

Tangible assets 9 26,467,409 21,425,140

Intangible assets 10 4,965,458 3,055,922

31,432,867 24,481,062

(b) Non-current investments 11 195,375,695 195,375,695

(c) Deferred tax assets 12 38,300,000 22,800,000

(d) Long-term loans and advances 13 230,077,172 222,471,343

(e) Other non-current assets 14 40,992,481 3,376,495

536,178,215 468,504,595

Current assets


(b) Trade receivables 16 289,637,545 213,542,444

(c) Cash and Cash equivalents 17 904,770,919 411,856,832

(d) Short-term loans and advances 13 304,770,905 13,116,397

(e) Other current assets 14 13,254,611 45,682,598

1,518,326,810 1,234,566,119

TOTAL 2,054,505,025 1,703,070,714









Sunil KakarDirector





NOTES ` `

A CONTINUING OPERATIONS

I INCOME


Other income 19 75,923,492 131,505,611

TOTAL INCOME (I) 754,073,563 543,153,142

II EXPENSES

Operating expenses 20 48,112,962 42,750,729

Employee benefits expenses 21 318,889,864 359,423,843

Finance costs 22 8,886,375 2,730,923

Depreciation and amortisation expense 9,10 13,072,909 11,010,530

Other expenses 23 153,392,896 118,705,926

Provisions for doubtful trade receivables and expenses recoverable 45,437,884 1,319,886


III PROFIT BEFORE TAX (I-II) 166,280,673 7,211,305

IV TAX EXPENSE

Current tax 69,800,000 5,400,000

Deferred tax 12 (15,500,000) (1,075,000)

Current tax expense relating to prior years 83,104 4,743,610

TOTAL TAX EXPENSE 54,383,104 9,068,610

V PROFIT / (LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS (III-IV) 111,897,569 (1,857,305)

B DISCONTINUING OPERATIONS

VI PROFIT FROM DISCONTINUING OPERATIONS (BEFORE TAX) 32 - 226,502,883

VII ADD / (LESS): TAX EXPENSE OF DISCONTINUING OPERATIONS

(a) on ordinary activities attributable to the discontinuing operations 32 - 76,125,077

VIII PROFIT FROM DISCONTINUING OPERATIONS (VI-VII) 32 - 150,377,806

C TOTAL OPERATIONS

IX PROFIT FOR THE YEAR (V+VIII) 111,897,569 148,520,501

Earnings per equity share (nominal value of share ` 10) 31

(a) Basic (`)

(i) Continuing operations 7.92 (0.13)

(ii) Total operations 7.92 10.51

(b) Diluted (`)

(i) Continuing operations 7.92 (0.13)

(ii) Total operations 7.92 10.51






` `

CASH FLOW FROM OPERATING ACTIVITIES


Adjustments for


Provisions for doubtful trade receivables and expenses recoverable 45,437,884 9,049,872

Interest on bank deposits (33,048,863) (31,955,944)

Finance costs 8,886,375 2,733,423

Dividend from long-term and current investments (1,073,581) (1,720,834)

Profit on sale of fixed assets (net) (175,789) (33,932)

Gain on sale of current investments (38,296,401) (85,002,034)

(5,197,466) (94,944,072)



Adjustments for (increase) / decrease in operating assets:

Trade receivables (121,300,869) (146,703,738)

Short-term loans and advances (291,654,508) 16,794,746

Long-term loans and advances (15,673,342) 163,437

Other current assets 30,009,987 (23,928,533)


Trade payables 141,229,522 67,675,963

Other current liabilities 100,583,056 13,219,849

(156,806,154) (72,778,276)


Net income taxes paid (64,091,427) (86,931,654)

Net cash used in operating activities (A) (59,814,374) (20,939,814)





` `

CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of fixed assets 1,758,599 3,461,523

Bank balances not considered as cash and cash equivalents

- Placed (511,559,677) (338,018,496)

- Matured 374,644,768 327,045,828

Purchase of fixed assets (21,607,524) (19,056,266)

Purchase of investments - others (4,769,119,887) (8,091,143,030)

Investments in subsidiaries - (34,611,650)

Proceeds from sale of current investments 5,351,891,306 9,910,027,192

Interest received on bank deposits 34,245,038 30,001,928

Dividend received on long term and current investments 1,073,581 1,720,834

Net cash flow from investing activities (B) 461,326,204 1,789,427,863

CASH FLOW FROM FINANCING ACTIVITIES

Finance costs (8,886,375) (2,733,423)

Inter Corporate Deposits taken 8,700,000,000 -

Inter Corporate Deposits repaid (8,700,000,000) -

Dividends paid - (1,484,406,000)

Tax on dividend - (302,195,373)

Net cash used in financing activities (C) (8,886,375) (1,789,334,796)

Net increase / (decrease) in cash and cash equivalents (A+B+C) 392,625,455 (20,846,747)

Cash and cash equivalents as at the beginning of year (see note 17) 37,212,059 58,058,806

Cash and cash equivalents as at the end of year (see note 17) 429,837,514 37,212,059

392,625,455 (20,846,747)

Reconciliation of Cash and cash equivalents with the Balance Sheet

Cash and cash equivalents as per Balance Sheet (see note 17) 904,770,919 411,856,832

Less: Bank balances not considered as Cash and cash equivalents as defined in AS-3 - “Cash Flow Statements” (see note 17)

474,933,405 374,644,773

Cash and cash equivalents as restated as at the year end 429,837,514 37,212,059






Sunil KakarDirector





01 BACKGROUNDIDFC Securities Limited (‘the Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited, (the ‘Holding Company’) incorporated in India and regulated by the Securities and Exchange Board of India (SEBI) as a stock broking company.

The Company is engaged in the business of share and stock broking for both cash segment and Derivatives segment and is a member of the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The activities of the Company include providing equity research and stock broking services to Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs).

The Company is also registered with the Securities and Exchange Board of India (SEBI) as category – I, Merchant Banker, engaged in providing Investment Banking services like Advisory services, IPO Underwriting, Qualified Institutional Placement (QIP), fund raising and Debt Syndication.


A BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

B USE OF ESTIMATES

The Company adopts the accrual concept in the preparation of the accounts. The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and any revisions or the difference between the actual results and the estimates are prospectively recognised in the future periods.

C REVENUE RECOGNITION

(a) Income from brokerage activities is recognised on trade-date basis and is net of statutory payments.

(b) Income from fee-based activities is recognised on the basis of terms of contracts with the clients and when reasonable right of recovery is established and is accounted net of service tax.

(c) Interest income is recognised on an accrual basis.

(d) Dividend is recognised when the right to receive is established as at the Balance Sheet date.

D FIXED ASSETS AND INTANGIBLE ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation and impairment losses, if any. Intangible assets comprising of system software are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated amortisation and impairment losses, if any. Any technology support cost or annual maintenance cost for such software is charged annually to the Statement of Profit and Loss. Consideration paid for transfer of tenancy rights is capitalised as an intangible asset.

The Company has regular programme of evaluating useful life of its assets.

E IMPAIRMENT OF ASSETS


F DEPRECIATION AND AMORTISATION

Tangible assets

Depreciation on tangible fixed assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the Companies Act, 2013. Certain electronic items and vehicles are depreciated over a period of two years and four year respectively on a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.



Intangible assets

Intangible assets are amortised over a period of three years on a straight-line method. Tenancy rights are amortised over a period of 10 years by using straight-line method.

G INVESTMENTS

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with Accounting Standards specified under Section 133 of the Companies Act, 2013. All other investments are classified as long-term investments.

All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.

Long Term Investments are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis. Current Investments are carried at the lower of cost or fair value on an individual basis.

H CASH AND CASH EQUIVALENTS (FOR PURPOSES OF CASH FLOW STATEMENT)

Cash and cash equivalents for the purpose of the Cash Flow Statement comprise cash on hand, cash in bank, fixed deposits and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible into a known amount of cash and which are subject to an insignificant risk of change in value.

I CASH FLOW STATEMENT

Cash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Company are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

J MISDEAL STOCK

Misdeal stock comprises of stock that has devolved on the Company due to erroneous execution of trades on behalf of the institutional clients in the normal course of business. These securities are valued at lower of cost or market value / realisable value on an individual basis. Any valuation loss based on the above is debited to the Statement of Profit and Loss.

K EMPLOYEE BENEFITS

Defined contribution plans

The Company’s contribution to provident fund is defined contribution plan and is charged to the Statement of Profit and Loss as they fall due based on the amount of contribution required to be made as and when services are rendered by the employees.

The Company participates in the holding company’s superannuation policy for future payments of superannuation and the Company’s contribution paid / payable during the year is charged to the Statement of Profit and Loss every year.


The net present value of the Company’s obligation towards gratuity to employees is funded and actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit and Loss for the period in which they occur.

Other benefits

Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

L INCOME-TAX

The accounting treatment for income-tax in respect of the Company’s income is based on the Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of the Companies Act, 2013. The provision made for income-tax in the accounts comprises both the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet. Current tax is the amount of tax payable on the taxable income for the year as determined in the accordance with applicable tax rates and the provisions of the Income-tax Act, 1961.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax asset is recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carried forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that the same can be realised against future taxable profits.



M EARNINGS PER SHARE

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

N PROVISIONS AND CONTINGENCIES

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any are disclosed in the notes. The Company does not account for Contingent assets.

O FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.

P INSURANCE CLAIMS

Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

Q SERVICE TAX INPUT CREDIT

Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing/utilising the credits.

R OPERATING CYCLE


03 SHARE CAPITAL


NUMBER ` NUMBER `

Authorised


Issued, subscribed and fully paid up shares


(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees (Previous year 100%), IDFC Limited is the Holding Company of IDFC Financial Holding Company Limited, which is the ultimate Holding Company of the Company)

TOTAL 141,372,000 141,372,000

a Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.


NUMBER ` NUMBER `




b Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the Balance Sheet date as per the provisions of revised Accounting Standard 4.



In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

c Details of shareholders holding more than 5% of the shares in the Company



IDFC Financial Holding Company Limited and its nominees 14,137,200 100 14,137,200 100




` `

(a) Securities premium account 142,578,000 142,578,000

(b) General reserve 355,628,577 355,628,577

(c) Capital reserve 38,147,550 38,147,550

(d) Surplus in the Statement of Profit and Loss

Opening balance 668,968,936 520,448,435

Add: Profit for the year 111,897,569 148,520,501

Closing balance 780,866,505 668,968,936

TOTAL 1,317,220,632 1,205,323,063

05 OTHER LONG-TERM LIABILITIES



` `

Others* 176,541 176,541

TOTAL 176,541 176,541

* Represents amounts withheld from erstwhile promoters in terms of the Share Purchase Agreement.

06 TRADE PAYABLES



` `



- Provision for expenses (see note 28) 158,959,464 141,742,807

- Payable to vendors 260,012,041 135,999,176

TOTAL 418,971,505 277,741,983

Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006: ` `

(a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year.

- -

(b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year.

- -

(c) the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the Micro, Small and Medium Enterprises Development Act, 2006.

- -

(d) the amount of interest accrued and remaining unpaid at the end of each accounting year. - -

(e) the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise, for the purpose of disallowance of a deductible expenditure under Section 23 of the Micro, Small and Medium Enterprises Development Act, 2006.

- -







` `

Payable to gratuity fund (see note 25) - 6,594,529

(net of gratuity receivable, current year ` Nil (Previous year ` 353,829)

Statutory dues (include tax deducted at source, service tax, stamp duty, security transaction tax, profession tax and contribution to provident fund)

130,799,792 23,622,207

TOTAL 130,799,792 30,216,736




` `

Provision for income tax 45,949,555 48,225,391

[net of advance tax ` 164,447,735 (Previous year ` 247,341,539)]

Provision for fringe benefit tax 15,000 15,000

[net of advance tax ` 905,000 (Previous year ` 905,000)]

TOTAL 45,964,555 48,240,391

GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK

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` ` ` ` ` ` ` ` ` ` `

09 TANGIBLE ASSETS

Furniture and fixtures 437,369 - - 437,369 363,943 39,307 - - 403,250 34,119 73,426

(Previous year) (532,236) (-) (94,867) (437,369) (345,610) (43,856) (7,148) (32,671) (363,943) (73,426) (186,626)

Office equipment 4,728,876 676,067 - 5,404,943 3,870,340 797,349 - - 4,667,689 737,254 858,536

(Previous year) (8,558,041) (767,242) (4,596,407) (4,728,876) (7,255,906) (950,568) (109,613) (4,445,747) (3,870,340) (858,536) (1,302,135)

Computers 18,068,914 6,670,179 - 24,739,093 13,074,141 3,609,622 - - 16,683,763 8,055,330 4,994,773

(Previous year) (31,470,826) (1,921,044) (15,322,956) (18,068,914) (24,481,181) (2,995,750) (339,097) (14,741,887) (13,074,141) (4,994,773) (6,989,645)

Vehicles 21,935,561 10,056,097 2,848,638 29,143,020 6,437,156 6,330,986 - 1,265,828 11,502,314 17,640,706 15,498,405

(Previous year) (10,391,600) (15,474,317) (3,930,356) (21,935,561) (2,846,159) (4,399,338) (518,989) (1,327,330) (6,437,156) (15,498,405) (7,545,441)

TOTAL 45,170,720 17,402,343 2,848,638 59,724,425 23,745,580 10,777,264 - 1,265,828 33,257,016 26,467,409 21,425,140

(Previous year) (50,952,703) (18,162,603) (23,944,586) (45,170,720) (34,928,856) (8,389,512) (974,847) (20,547,635) (23,745,580) (21,425,140) (16,023,847)

10 INTANGIBLE ASSETS-OTHER THAN INTERNALLY GENERATED

Tenancy rights 1,083,200 - - 1,083,200 769,221 108,320 - - 877,541 205,659 313,979

(Previous year) (1,083,200) (-) (-) (1,083,200) (660,604) (108,617) (-) (-) (769,221) (313,979) (422,596)

Computer software 15,669,931 4,205,181 - 19,875,112 12,927,988 2,187,325 - - 15,115,313 4,759,799 2,741,943

(Previous year) (18,832,541) (1,522,880) (4,685,490) (15,669,931) (15,070,437) (2,512,401) (-) (4,654,850) (12,927,988) (2,741,943) (3,762,104)

TOTAL 16,753,131 4,205,181 - 20,958,312 13,697,209 2,295,645 - - 15,992,854 4,965,458 3,055,922

(Previous year) (19,915,741) (1,522,880) (4,685,490) (16,753,131) (15,731,041) (2,621,018) (-) (4,654,850) (13,697,209) (3,055,922) (4,184,700)

TOTAL TANGIBLE AND INTANGIBLE ASSETS

61,923,851 21,607,524 2,848,638 80,682,737 37,442,789 13,072,909 - 1,265,828 49,249,870 31,432,867 24,481,062

(Previous year) (70,868,444) (19,685,483) (28,630,076) (61,923,851) (50,659,897) (11,010,530) (974,847) (25,202,485) (37,442,789) (24,481,062) (20,208,547)



11 NON-CURRENT INVESTMENTS


FACE VALUE ` QUANTITY ` QUANTITY `

Trade investments (valued at cost unless stated otherwise)

Unquoted equity shares (fully paid)

Investment in subsidiaries

IDFC Capital (USA) INC. (see note 28) USD 0.01 100,000,000 46,240,000 100,000,000 46,240,000

IDFC Securities Singapore Pte Ltd (see note 28 and 33)

SGD 1 3,140,001 149,125,695 3,140,001 149,125,695

195,365,695 195,365,695

Others

BSE Limited (market value : ` 63,547,250)

2* 65,000 10,000 130,000 10,000

Epsilon Advisers Private Limited 10 1,250,000 15,135,000 1,250,000 15,135,000

Less : Provision for diminution in value of investments

(15,135,000) (15,135,000)

* (Previous year ` 1) 10,000 10,000

TOTAL 195,375,695 195,375,695

12 DEFERRED TAX ASSETS



` `

Tax effects of items constituting deferred tax assets

(a) On difference between book balance and tax balance of fixed assets 4,600,000 4,600,000

(b) Provision for doubtful receivables, diminution in value of investments and doubtful expenses recoverable

33,700,000 18,200,000

TOTAL 38,300,000 22,800,000

As per Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of the Companies Act, 2013, the Company has credited ` 15,500,000 (Previous year ` 3,500,000) in the Statement of Profit and Loss towards deferred tax assets on account of timing differences.

13 LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


NON-CURRENT PORTION


CURRENT PORTION

` ` ` `

Security deposits

- Deposits with stock exchanges 30,502,200 290,546,946 30,502,200 -

- Other deposits 16,080,920 - 730,920 -

Loan and advances to employees - 1,894,550 - 686,640

Prepaid expenses 614,796 6,536,760 291,454 4,590,977

Advance payment of income tax 177,964,631 - 186,032,144 -

[net of provision for tax of ` 970,954,201 (Previous year ` 817,354,201)]

Advance payment of fringe benefit tax 4,914,625 - 4,914,625 -

[net of provision for tax of ` 6,625,000 (Previous year ` 6,625,000)]

Balances with government authorities

- Service tax credit receivable - 1,999,300 - 1,653,753

Advances to suppliers - 3,793,349 - 6,185,027

TOTAL 230,077,172 304,770,905 222,471,343 13,116,397



14 OTHER ASSETS (CONSIDERED GOOD, UNLESS STATED OTHERWISE)


NON-CURRENT PORTION


CURRENT PORTION

` ` ` `

Bank deposits (see note 17) * 39,800,000 - 3,173,723 -

Gratuity receivable (see note below) - 154,685 - -

Interest accrued on bank deposits 1,192,481 13,099,926 202,772 15,285,810

Fees recoverable (considered good) - - - 17,175,000

Expenses recoverable (considered good) (see note 28) - - - 13,221,788

Expenses recoverable (considered doubtful) - 3,893,325 - 3,661,209

Less:- Provisions - (3,893,325) - (3,661,209)

TOTAL 40,992,481 13,254,611 3,376,495 45,682,598

Note : Represents amount paid by the fund but lying in the IDFC Securities Limited Employees Group Gratuity Scheme account.

* Bank deposits amounting to ` 39,800,000 (Previous year ` 3,173,723) are under lien. The Company has created the lien on bank deposits for availing bank guarantee and overdraft facility for exchange margin funding. The bank guarantees are issued by bank in favour of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for exchange margin in both cash and derivatives segment.

15 CURRENT INVESTMENTS (Valued at lower of cost and fair value, unless stated otherwise)


QUANTITY ` QUANTITY `

Mutual funds (Unquoted)

IDFC Cash Fund - Growth scheme (Direct plan) 2,988.199 5,892,830 299,167.623 550,367,848

TOTAL 5,892,830 550,367,848

a Aggregate amount of investments in unquoted mutual funds

Cost 5,892,830 550,367,848

Market Value 5,903,860 551,012,941

Market value of investment in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.

16 TRADE RECEIVABLES (UNSECURED) (CONSIDERED GOOD UNLESS STATED OTHERWISE)



` `

Trade receivables outstanding for a period exceeding six months from the date they were due for payment

Considered good - 30,903

Considered doubtful 78,933,461 33,727,693

Less: Provision for doubtful trade receivables (78,933,461) (33,727,693)

Other trade receivables-considered good 289,637,545 213,511,541

TOTAL 289,637,545 213,542,444



NON-CURRENT PORTION


CURRENT PORTION

` ` ` `


Cash on hand - 7,110 - 13,261

Cheques on hand - 325,000 - -


- In current accounts (see note 28) - 429,505,404 - 37,198,798

TOTAL CASH AND CASH EQUIVALENTS (FOR CASH FLOW PURPOSE)

- 429,837,514 - 37,212,059




NON-CURRENT PORTION


CURRENT PORTION

` ` ` `

Others


- In deposit accounts [see note (a) and (b)] 39,800,000 474,933,405 3,173,723 374,644,773

39,800,000 474,933,405 3,173,723 374,644,773

Amount disclosed under “other assets” (see note 14) (39,800,000) - (3,173,723) -

TOTAL - 904,770,919 - 411,856,832

a Balances with banks in deposit accounts include deposits amounting to ` 250,623,723 (Previous year ` 250,623,723) which have an original maturity of more than 12 months.

b Balances with banks in deposit accounts include deposits amounting to ` 474,933,405 (Previous year ` 374,644,773) are under lien. The Company has created the lien on bank deposits for availing bank guarantee and overdraft facility for exchange margin funding. The bank guarantees are issued by bank in favour of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for exchange margin in both cash and derivatives segment.




` `

Brokerage (see note 28) 542,317,321 358,906,424

Advisory Fee income (see note 26 and 28) 135,832,750 52,741,107

TOTAL 678,150,071 411,647,531

19 OTHER INCOME



` `

Dividend from long-term investments 845,000 1,105,000

Dividend from current investments 228,581 615,834

Interest on bank deposits 33,048,863 31,955,944

Gain on sale of current investments 38,296,401 85,002,034

Interest on income-tax refund 3,257,532 11,799,400

Other Interest 51,326 993,467

Profit on sale of fixed assets (net) 175,789 33,932

Miscellaneous income 20,000 -

TOTAL 75,923,492 131,505,611

20 OPERATING EXPENSES



` `

Membership and subscription (see note 26) 44,055,207 40,308,521

Clearing house maintenance charges 239,764 254,198

Depository charges 359,997 320,003

Loss on sale of misdeal stock (net) 4,110,779 2,259,130

Others 874,900 397,541

49,640,647 43,539,393

Less: Other recoveries (see note 28) 1,527,685 788,664

TOTAL 48,112,962 42,750,729



21 EMPLOYEE BENEFITS EXPENSES



` `

Salaries and bonus (see note 29) 348,460,277 341,792,302

Contribution to provident and other funds (see note 25) 25,703,617 35,595,819


377,614,936 380,714,681

Less: Other recoveries (see note 28) 58,725,072 21,290,838

TOTAL 318,889,864 359,423,843

22 FINANCE COSTS



` `

Interest on temporary overdraft 849,749 146,206

Interest on Inter Corporate Deposit (ICD) (see note 28) 5,457,534 -

Bank guarantee charges 2,535,394 2,573,197

Bank charges 43,698 11,520

TOTAL 8,886,375 2,730,923

The bank guarantee facilities were availed from the nationalised / scheduled banks and were submitted to BSE / NSE (Exchanges) as margin deposit. The temporary borrowings are taken in the normal course of broking business.

23 OTHER EXPENSES



` `


- Equipment 5,295,828 2,383,181

- Others 1,959,173 579,730

Insurance charges 702,301 811,831

Travelling and conveyance (see note 26) 35,199,927 31,209,122


Postage, telephone and fax 8,920,341 8,017,429

Advertising and publicity 24,793,732 26,281,059

Professional fees (see note 26 and 28) 52,457,289 31,876,133

Loss on foreign exchange fluctuation 709,938 265,210

Service tax credit written off 958,456 569,543

Miscellaneous expenses (see note 26) 1,364,201 338,202

Contribution towards corporate social responsibility (CSR) (see note 28) ** 6,079,935 5,673,000

Directors’ sitting fees 645,000 270,000

Auditor’s remuneration * 1,893,325 2,227,121

Shared services costs (see note 28) 37,298,000 22,955,474

180,291,985 135,890,336

Less: Other recoveries (see note 28) 26,899,089 17,184,410

TOTAL 153,392,896 118,705,926

* Break up of Auditor’s remuneration:

Audit fees 1,100,000 1,100,000


Taxation matters 150,000 100,000



Service Tax 322,153 80,025

TOTAL 2,215,478 2,307,146

Less:- Service tax set off claimed 322,153 80,025

TOTAL 1,893,325 2,227,121



** Details of CSR expenditure

1. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ` 6,079,935 (previous year ` 5,673,000).

2. Amount spent towards CSR during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities is ` 6,079,935 (previous year ` 5,673,000), which comprise of following:

S.N. PARTICULARS YEAR ENDED MARCH 31, 2017 YEAR ENDED MARCH 31, 2016



TOTAL

` ` ` ` ` `

(i) Construction / acquisition of any asset - - - - - -

(ii) On purposes other than (i) above 6,079,935 - 6,079,935 5,673,000 - 5,673,000

24 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR):

(a) Details of contingent liabilities and commitments (to the extent not provided for):



( ` ) ( ` )

Claims not acknowledged as debts in respect of :

Income-tax / Service tax demands under appeal, (net of amounts provided). The demands have been partly paid / adjusted and will be received as refund if the matter is decided in favour of the Company.

55,960,329 51,832,261

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for :

Tangible assets 3,723,457 48,175

Intangible assets - 76,045

(b) Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

25 EMPLOYEE BENEFITS :(i) In accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of the Companies Act, 2013, the

following disclosures have been made:

The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included in note 21 under “Contribution to provident and other funds”:



( ` ) ( ` )

Provident fund 12,529,577 14,794,043


Pension fund 2,402,930 2,007,923

Labour Welfare Fund 384 -

ii) The details of the Company’s post-retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors.



( ` ) ( ` )

Change in the benefit obligations:



Interest cost 4,446,269 4,527,645

Actuarial loss / (gain) 2,441,149 7,053,517

Liabilities assumed on acquisition / (settled on divestiture) (1,582,979) (15,122,014)

Benefits paid (5,415,172) (6,178,545)






( ` ) ( ` )

Change in Fair value of plan assets:



Contributions by the Company 16,451,848 18,807,982

Actuarial gain / (loss) on plan assets 557,911 (520,505)

Assets Acquired on Acquisition / (Distributed on Divestiture) - (23,371,637)

Benefits paid (5,415,172) (6,178,545)


Total actuarial losses to be recognised 1,883,238 7,574,022

Actual return on plan assets:



Actual return on plan assets 4,539,593 4,178,231

Amount recognised in the Balance Sheet:


Fair value of plan assets at the end of the year (61,410,745) 45,834,476

Amount recognised in the Balance Sheet under note 7 “Other current liabilities- Payable to gratuity fund”

- 6,948,358

Expenses recognised in the Statement of Profit and Loss


Interest cost 4,446,269 4,527,645

Expected return on plan assets (3,981,682) (4,698,736)

Net actuarial loss to be recognised 1,883,238 7,574,022

Losses / (Gains) on Acquisition / Divestiture (1,582,979) 8,249,623

Other adjustments (475,484) -

Expense recognised in the Statement of Profit and Loss under note 21 “ Employee benefits expenses” 9,028,006 25,756,340

Reconciliation of the liability recognised in the Balance Sheet

Opening net liability 6,948,358 -

Expense recognised in the Statement of Profit and Loss under note 21 “ Employee benefits expenses” 9,028,006 25,756,340

Other adjustments 475,484 -

Contribution by the Company 16,451,848 18,807,982

Amount recognised in the Balance Sheet under “Other current liabilities-Payable to gratuity fund” - 6,948,358

Expected employer’s contribution next year 12,000,000 8,000,000



AS ATMARCH 31, 2015



` ` ` ` `

Experience adjustments


Plan assets 61,410,745 45,834,476 52,398,445 38,315,842 45,709,123

Deficit - (6,948,358) - (5,792,415) (198,447)

Experience adjustment on plan liabilities (1,095,055) 7,193,380 461,439 3,410,174 (6,027,279)

Experience adjustment on plan assets 557,911 (520,505) 1,225,896 1,346,323 5,380,092



Investment pattern % %

Insurer managed funds 100 100

Principal assumptions

Discount rate 6.90 7.95

Return on plan assets 7.50 9.00

Salary escalation rate 8.00 8.00

As the Gratuity fund is managed by HDFC Standard Life Insurance Company Limited and Life Insurance Company, details of investments are not available with the Company.

The estimates of future salary increase considered in the actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors.



26 EXPENDITURE IN FOREIGN CURRENCIES (ON PAYMENT BASIS) :



( ` ) ( ` )


Others (include travelling and conveyance, advertising and publicity, miscellaneous expenses) 15,439,650 20,761,963

TOTAL 38,903,091 38,210,286

Earnings in foreign currencies :



( ` ) ( ` )

Advisory fee income 64,837,130 83,741,106

TOTAL 64,837,130 83,741,106

27 SEGMENT REPORTING:The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments comprise of Stock broking services and Investment banking services. Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. The Company does not have any reportable geographic segment.


MARCH 31, 2017

FOR THE YEAR ENDED

MARCH 31, 2016

( ` ) ( ` )

Segment operating revenue

(a) Stock broking 662,255,302 411,647,531

(b) Investment banking 15,894,769 321,448,889

TOTAL 678,150,071 733,096,420

Segment results

(a) Stock broking 152,741,194 (86,082,589)

(b) Investment banking (21,543,123) 226,502,884

(c) Unallocated 35,082,602 93,293,890


Less: Provision for tax 54,383,104 85,193,687

Profit after tax 111,897,569 148,520,498

Segment assets

(a) Stock broking 1,457,948,680 645,929,899

(b) Investment banking - 73,469,706

(c) Unallocated 596,556,345 983,671,108

TOTAL 2,054,505,025 1,703,070,713

Segment liabilities

(a) Stock broking 549,925,206 287,710,105

(b) Investment banking 22,632 7,642,856

(c) Unallocated 45,964,555 61,022,690

TOTAL 595,912,393 356,375,651

Capital employed

(a) Stock broking 908,023,474 358,219,794

(b) Investment banking (22,632) 65,826,850

(c) Unallocated 550,591,790 922,648,418

TOTAL 1,458,592,632 1,346,695,062




MARCH 31, 2017

FOR THE YEAR ENDED

MARCH 31, 2016

( ` ) ( ` )

Capital expenditure (including capital work-in-progress)

(a) Stock broking 21,607,524 19,685,483

(b) Investment banking - -

TOTAL 21,607,524 19,685,483

Depreciation and amortisation

(a) Stock broking 13,072,909 11,010,530

(b) Investment banking - 974,847

TOTAL 13,072,909 11,985,377

Significant non cash expenses other than depreciation and amortisation

(a) Stock broking - 1,319,886

(b) Investment banking 45,437,884 7,729,986

TOTAL 45,437,884 9,049,872

28 RELATED PARTY DISCLOSURES:

In accordance with the Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of the Companies Act, 2013, the related parties of the Company are as follows:

i. Ultimate holding company:

IDFC Limited (w.e.f. July 9, 2015)

ii. Holding company:

IDFC Limited (upto July 8, 2015)

IDFC Financial Holding Company Limited (w.e.f. July 9, 2015)

iii. Subsidiary companies:

IDFC Capital (USA) INC.

IDFC Securities Singapore Pte Ltd

iv. Fellow subsidiary companies:

IDFC Bank Limited

IDFC Foundation


The nature and volume of transactions carried out and balances with the above related parties in the ordinary course of business:




( ` ) ( ` )

(a) Ultimate holding company

IDFC Limited Inter corporate deposits taken 8,700,000,000 -

Inter corporate deposits repaid 8,700,000,000 -

Interest expenses on inter corporate deposits 5,457,534 -

Shared service costs - 10,150,004

Brokerage received 45,020 514,811

Computer hardware/software expenses 692,567 -

Provision for expenses 1,109,589 -

(b) Subsidiary company

IDFC Capital (USA) INC. Professional fees 33,398,840 25,107,315


IDFC Securities (Singapore) Pte Ltd. Subscription to equity shares - 34,611,650






( ` ) ( ` )

(c) Fellow subsidiary company

IDFC Bank Limited Commitment Fees 20,000,000 10,000,000

Fees Income 19,422,181 48,439,827

Shared services costs 37,298,000 17,022,678

Professional Fees recovered 11,817,896 4,249,767

Advertising and publicity recovered 10,412,692 10,101,164

Membership and subscription recovered 1,527,685 1,542,855

Employee benefits expenses recovered 58,725,072 29,774,124

Other expenses recovered 4,668,501 3,529,195

Other receivables - 11,797,540

Balances in current account 149,119,377 16,893,962

Interest on temporary overdraft 154,194 -

Fixed deposits 128,700,000 -

Interest accrued on fixed deposits 3,892,956 -

Interest income on fixed deposits 4,325,507 -

Brokerage received 2,811,274 -

Provision for expenses - 7,500,000

Transfer of fixed assets - 3,425,073

IDFC Foundation Donation paid 6,079,935 5,673,000

IDFC Asset Management Company Limited Brokerage received 78,314 -

Computer hardware/software expenses 125,144 -

29 LEASES:In accordance with the Accounting Standard 19 on ‘Leases’ as specified u/s 133 of Companies Act, 2013, the following disclosures in respect of operating leases are made:

i) The Company has taken vehicles for certain employees under operating leases, which expired between April 3, 2016 and July 4, 2016. Salaries include gross rental expenses of ` 64,141 (previous year ` 426,792). The committed lease rentals in the future are:



( ` ) ( ` )


ii) The Company has taken premises under operating lease effective from April 1, 2017. The initial tenure of the lease is 36 months. The lease rental recognized in the Statement of Profit and Loss for the year is ` Nil (previous year ` Nil).

The committed lease rentals in the future is:



( ` ) ( ` )

Not later than one year 744,000 -

Later than one year and not later than five years 1,601,460 -

30 Details of Specified Bank Notes (SBNs) held and transacted during the period November 8, 2016 to December 30, 2016 as provided in table below:

SBNS OTHER DENOMINATION NOTES

TOTAL

Closing cash on hand as on November 8, 2016 15,000 22,542 37,542

Add : Permitted receipts - 172,946 172,946

Less : Permitted payments - 147,879 147,879

Less : Amount deposited in Banks 15,000 - 15,000

Closing cash in hand as on December 30, 2016 - 47,609 47,609



31 EARNINGS PER SHARE :In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of the Companies Act, 2013, the earnings per share has been computed as under:

Earning per share of continuing operations



( ` ) ( ` )

Net profit attributable to equity shareholders 111,897,569 (1,857,304.59)

Number of equity shares issued 14,137,200 14,137,200

Basic Earnings Per Share 7.92 (0.13)

Diluted Earnings Per Share 7.92 (0.13)

Earning per share of total operations



( ` ) ( ` )

Net profit attributable to equity shareholders 111,897,569 148,520,501

Number of equity shares issued 14,137,200 14,137,200

Basic Earnings Per Share 7.92 10.51

Diluted Earnings Per Share 7.92 10.51

32 DISCONTINUING OPERATIONS:In accordance with the Accounting Standard 24 on ‘Discontinuing Operations’ as specified u/s 133 of the Companies Act, 2013, the following disclosures in respect of discontinuing operations are made:

The results for the year ended March 31, 2016 includes the Investment Banking business that was transferred to IDFC Bank Limited w.e.f. October 1, 2015. Investment Banking business is a discontinuing operations w.e.f. October 1, 2015. Based on the carve-out workings prepared by the Management, information required under Accounting Standard 24 on Discontinuing Operations relating to investment banking business is given below:


MARCH 31, 2017

FOR THE YEAR ENDED

MARCH 31, 2016

( ` ) ( ` )

Sale of services - 321,448,889

Other operating revenue - 107,500

TOTAL REVENUE (A) - 321,556,389

Operating expenses - 1,775,537

Employee benefits expenses - 61,411,881

Finance costs - 2,500

Depreciation and amortisation expense - 974,847

Other expenses - 23,158,755

Provisions and contingencies - 7,729,986

TOTAL EXPENSES (B) - 95,053,506

PROFIT BEFORE TAX FROM ORDINARY ACTIVITIES (A-B) - 226,502,883

Tax expense

- on ordinary activities attributable to the discontinuing operations - 76,125,077

Profit after tax of discontinuing operations - 150,377,806



( ` ) ( ` )

Carrying amount of assets as at the Balance Sheet date relating to the discontinued business to be disposed off

- 73,469,706

Carrying amount of liabilities as at the Balance Sheet date relating to the discontinued business to be settled

- 8,385,356



FOR THE YEAR ENDED

MARCH 31, 2017

FOR THE YEAR ENDED

MARCH 31, 2016

( ` ) ( ` )

Net cash flow attributable to the discontinued business

Cash flows from operating activities - 74,917,282

Cash flows from investing activities - -

Cash flows from financing activities - (2,500)

33 The Company has made long-term strategic investments aggregating to ` 149,125,695 (previous year ` 149,125,695) in IDFC Securities Singapore Pte Ltd. (ISSPL), wholly owned subsidiary. ISSPL conduct regulated activities for dealing in securities services. ISSPL has reported a loss of ` 16,335,967 (previous year ` 29,781,635) in the current year and has accumulated losses of ` 120,052,818 as at March 31, 2017 resulting in substantial erosion of its net worth. The Company considers its investments in ISSPL to be long term and strategic in nature. As the Ultimate Holding Company, namely IDFC Limited (“IDFC”) has made a strategic business decision to form ISSPL, it shall financially and operationally continue to support ISSPL to meet its obligations as and when they fall due. Following the commencement of business in March 2016, it is expected that future improved performance of ISSPL will enable recovery of the investment over the longer time.

34 PRIOR YEAR’S FIGURES:Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/disclosure.



Sunil KakarDirector

Mumbai | April 24, 2017Hitesh DesaiChief Financial Officer


IDFC SECURITIES SINGAPORE PTE. LIMITED

Mr. Vikram Limaye


Dr. Rajeev Uberoi

Mr. Kumar Anand


Standard Chartered Bank

One Finlayson Green #16-02

Singapore 049246

Tel +65 6499 0700

Fax +65 6536 3359

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


DIRECTORS’ STATEMENT

The directors present their statement together with the audited financial statements of the company for the financial year ended March 31, 2017.

In the opinion of the directors, the financial statements of the Company are drawn up so as to give a true and fair view of the financial position of the company as at March 31, 2017 and the financial performance, changes in equity and cash flows of the company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts when they fall due.

1. DIRECTORS

The directors of the company in office at the date of this statement are:

Rajeev Uberoi

Vikram Mukund Limaye

Kumar Anand

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate, except for the options mentioned in paragraph 3 of the Directors’ statement.

3. DIRECTORS’ INTEREST IN SHARES AND DEBENTURES The directors holding office at the end of the financial year had no interests in the share capital and debentures of the company and

related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Singapore Companies Act except as follows:


ORDINARY SHARES

SHAREHOLDINGS REGISTERED IN NAME OF DIRECTOR

SHAREHOLDINGS IN WHICH DIRECTORS ARE DEEMED TO HAVE AN INTEREST



AT END OF YEAR



AT END OF YEAR


Rajeev Uberoi 132,704 132,704 – –

Vikram Mukund Limaye 2,043,728 2,117,728 – –


OPTIONS TO SUBSCRIBE FOR ORDINARY SHARES IN ULTIMATE HOLDING COMPANY



AT END OF YEAR


Rajeev Uberoi 600,000 600,000

Vikram Mukund Limaye 3,575,158 6,528,358

4. SHARE OPTIONS

(a) Options to take up unissued shares

During the financial year, no options to take up unissued shares of the company were granted.

(b) Options exercised

During the financial year, there were no shares of the company issued by virtue of the exercise of an option to take up unissued shares.

(c) Unissued shares under option

At the end of the financial year, there were no unissued shares of the company under options.

5. AUDITORS

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept reappointment.

ON BEHALF OF THE DIRECTORS

Rajeev Uberoi Kumar Anand Director Director

April 20, 2017

I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 3 7

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of IDFC Securities Singapore Pte. Limited (the “company”) which comprise

the statement of financial position of the company as at March 31, 2017, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows of the company for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies, as set out on pages 7 to 26.

In our opinion, the accompanying financial statements of the company are properly drawn up in accordance with the provisions of the

Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”), so as to give a true and fair view of

the financial position of the company as at March 31, 2017 and of the financial performance, changes in equity and cash flows of the

company for the year then ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are

further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of

the company in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics

for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of

the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and

the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages 1 to 2.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance

conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit

or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of

the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are

recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the company’s financial reporting process.


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the

audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform

audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our

opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.



(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management.

(d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the management regarding, among other matters, the planned scope and timing of the audit and significant audit

findings, including any significant deficiencies in internal control that we identify during our audit.


In our opinion, the accounting and other records required by the Act to be kept by the company have been properly kept in accordance

with the provisions of the Act.

Public Accountants and


Singapore

April 20, 2017



STATEMENT OF FINANCIAL POSITION MARCH 31, 2017

2017 2016

NOTE US$ US$

ASSETS

Current assets


Trade and other receivables 7 123,847 151,313

Prepayments 7,127 7,530

TOTAL CURRENT ASSETS 561,664 799,934

Non-current asset

Plant and equipment 8 1,473 -

TOTAL ASSETS 563,137 799,934

LIABILITY AND EQUITY

Current liability

Other payables and accruals 9 37,139 30,339

Capital and reserves

Share capital 10 2,444,785 2,444,785

Accumulated losses (1,918,787) (1,675,190)

TOTAL EQUITY 525,998 769,595

TOTAL LIABILITY AND EQUITY 563,137 799,934

See accompanying notes to financial statements


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME YEAR ENDED MARCH 31, 2017

STATEMENT OF CHANGES IN EQUITY YEAR ENDED MARCH 31, 2017

2017 2016

NOTE US$ US$

REVENUE 11 315,309 111,162

Staff costs (460,809) (472,702)

Depreciation expense 8 (110) (1,034)

Other operating income 12 3,015 20,787

Other operating expenses 13 (101,002) (111,546)

Loss before income tax 14 (243,597) (453,333)

Income tax expense 15 - -

LOSS FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(243,597) (453,333)


SHARECAPITAL

ACCUMULATEDLOSSES

TOTAL

US$ US$ US$

Balance at April 1, 2015 1,920,856 (1,221,857) 698,999

Transactions with owners, recognised directly in equity Issue of shares during the year (Note 10) 523,929 - 523,929

Loss for the year, representing total comprehensive loss for the year - (453,333) (453,333)

Balance at March 31, 2016 2,444,785 (1,675,190) 769,595

Loss for the year, representing total comprehensive loss for the year - (243,597) (243,597)

Balance at March 31, 2017 2,444,785 (1,918,787) 525,998



STATEMENT CASHFLOWS YEAR ENDED MARCH 31, 2017

2017 2016

US$ US$



Adjustment for:

Depreciation expense 110 1,034

OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL (243,487) (452,299)

Trade and other receivables 27,466 (150,424)

Prepayments 403 (4,923)

Other payables and accruals 6,800 5,970

NET CASH USED IN OPERATING ACTIVITIES (208,818) (601,676)

INVESTING ACTIVITY

Purchase of plant and equipment, representing net cash used in investing activity (1,583) -

FINANCING ACTIVITY

Proceeds from issue of share capital, representing net cash from financing activity - 523,929

NET DECREASE IN CASH AND CASH EQUIVALENTS (210,401) (77,747)

Cash and cash equivalents at beginning of the year 641,091 718,838

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 430,690 641,091




01 GENERAL

The company (Registration No. 201228582N) is incorporated in Singapore with its registered office and principal place of business at One Finlayson Green #16-02, Singapore 049246. The financial statements are expressed in United States dollars.

The principal activity of the company is dealing in securities. On February 17, 2016, the company obtained a licence under the Securities and Futures Act (Cap. 289) to provide dealing in securities services, as a restricted broker.

The financial statements of the company for the financial year ended March 31, 2017 were authorised for issue by the Board of Directors on April 20, 2017.

02 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The financial statements have been prepared in accordance with the historical cost basis and are drawn up in accordance with the provisions of the Singapore Companies Act and Financial Reporting Standards in Singapore (“FRS”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as value in use in FRS 36 Impairment of Asset.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows:

¡ Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at

the measurement date;

¡ Level 2 inputs are inputs, other than the quoted market prices included within Level 1, that are observable for the asset or liability,

either directly or indirectly; and

¡ Level 3 inputs are unobservable inputs for the asset or liability.

ADOPTION OF NEW AND REVISED STANDARDS

On April 1, 2016, the company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the company’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following new/revised FRSs and amendments to FRS that are relevant to the company were issued but not effective:

¡ FRS 109 Financial Instruments2

¡ FRS 115 Revenue from Contracts with Customers (with clarifications issued)2

¡ FRS 116 Leases3

¡ Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative1

¡ Amendments to FRS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses1



3 Applies to annual periods beginning on or after January 1, 2019, with earlier application permitted if FRS 115 is adopted.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material impact on the financial statements of the company in the period of their initial adoption except for the following:

FRS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS

In November 2014, FRS 115 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. FRS 115 will supersede the current revenue recognition guidance including FRS 18 Revenue, FRS 11 Construction Contracts and the related Interpretations when it becomes effective.



The core principle of FRS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

¡ Step 1: Identify the contract(s) with a customer.

¡ Step 2: Identify the performance obligations in the contract.

¡ Step 3: Determine the transaction price.

¡ Step 4: Allocate the transaction price to the performance obligations in the contract.

¡ Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

Under FRS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in FRS 115 to deal with specific scenarios. Furthermore, extensive disclosures are required by FRS 115.

Management anticipates that the initial application of the new FRS 115 may result in changes to the accounting policies relating to revenue. Additional disclosures will also be made with respect to revenue and other income, including any significant judgement and estimation made. Management is in the process of performing an assessment of the possible impact of implementing FRS 115. It is currently impracticable to disclose any further information on the known or reasonably estimable impact to the company’s financial statement in the period of initial application as the management has yet to complete its detailed assessment. Management does not plan to early adopt the new FRS 115.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised on the company’s statement of financial position when the company becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis.

FINANCIAL ASSETS


Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be immaterial.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

For financial assets, objective evidence of impairment could include:

¡ significant financial difficulty of the issuer or counterparty; or

¡ default or delinquency in interest or principal payments; or

¡ it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of loans and receivables where the carrying amount is reduced through the use of an allowance account. When a loan and receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.



Derecognition of financial assets

The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.

FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Classification as debt or equity

Financial liabilities and equity instruments issued by the company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Other payables

Other payables and accruals are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or they expire.

Offsetting arrangements

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.

LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Operating lease

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

PLANT AND EQUIPMENT

Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the written down value method, on the following bases:

Computers - 30 months

Fully depreciated assets still in use are retained in the financial statements.

The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.

The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.

IMPAIRMENT OF NON-FINANCIAL ASSETS

At the end of each reporting period, the company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).



Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of the asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as immediately in profit or loss.

PROVISIONS

Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

REVENUE RECOGNITION

Revenue is measured at the fair value of the consideration received or receivable.

Fee income

Fee income is recognised as income in the period in which the service has been rendered and the company’s rights to receive payment has been established.

RETIREMENT BENEFIT COSTS

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the company’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

EMPLOYEE LEAVE ENTITLEMENT

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

INCOME TAX

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The company’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and the company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION

The financial statements of the company are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The financial statements of the company are presented in United States dollar, which is the functional currency of the company.



In preparing the financial statements of the company, transactions in currencies other than the company’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period.

CASH AND BANK BALANCES IN THE STATEMENT OF CASH FLOWS - Cash and cash equivalents in the statement of cash flows comprise of cash at bank that are subject to an insignificant risk of changes in value.

03 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the company’s accounting policies, which are described in Note 2, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

CRITICAL JUDGEMENT IN APPLYING THE ENTITY’S ACCOUNTING POLICIES

The management is of the opinion that any instances of application of judgements are not expected to have a significant effect on the amounts recognised in the financial statements.

KEY SOURCES OF ESTIMATION UNCERTAINTY AND JUDGEMENTS

The management is of the opinion that there are no key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

04 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT

A. CATEGORIES OF FINANCIAL INSTRUMENTS

The following table sets out the financial instruments as at the end of the reporting period:

2017 2016

US$ US$

FINANCIAL ASSETS

Loans and receivables (including cash and cash equivalents) 554,537 792,404

FINANCIAL LIABILITIES

Amortised cost 37,139 30,339

At the end of reporting period, the company does not have any financial instruments subject to offsetting, enforceable master netting arrangements and similar agreements.

B. FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES

The company has a system of controls in place to create an acceptable balance between the probability of risks occurring and the cost of managing the risks. The management continually monitors the company’s risk management process to ensure that an appropriate balance between risk and control is achieved.

The company’s activities expose it to certain financial risks such as market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

(i) Foreign currency risk

The company transacts business in various foreign currencies, including Singapore dollar and India rupee and therefore is exposed to foreign exchange risk.



At the end of the reporting period, the carrying amounts of significant monetary assets and monetary liabilities denominated in currencies other than the company’s functional currency are as follows:

2017 2016

INDIAN RUPEE SINGAPORE DOLLAR INDIAN RUPEE SINGAPORE DOLLAR

ASSETS

Cash and bank balances - 113,931 - 585,245

Other receivable 52,306 71,541 75,378 75,935

52,306 185,472 75,378 661,180

LIABILITIES

Other payables - (32,961) - (26,030)

Net foreign exchange position 52,306 152,511 75,378 635,150

Foreign currency sensitivity

The following table details the sensitivity to an increase and decrease in the relevant foreign currencies against the functional currency of the company. The sensitivity rate represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a change in foreign currency rates.

If the relevant foreign currency strengthens by against the functional currency of the company, loss before tax will decrease by:

LOSS BEFORE TAX

2017 2016

US$ US$

Singapore dollar - Strengthened 8% (2016 : 9%) 12,201 57,164

Indian Rupee - Strengthened 6% (2016 : 11%) 3,138 8,292

A weakening of the functional currency of the company against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

(ii) Interest rate risk

The company does not have any significant interest bearing assets and liabilities, hence it is not exposed to interest rate risk. Accordingly, no sensitivity analysis is presented.

(iii) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company.

The company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

The credit risk on liquid funds (bank deposits) is limited as the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

At the end of the reporting period, there were no concentrations of credit risk. The carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for losses, represents the company’s maximum exposure to credit risk without taking account of the value at any collateral obtained.

(iv) Liquidity risk

The company maintains sufficient cash and bank balances to fund its daily operating requirement. In addition, the company also relies on the holding company to fund any shortfall in liquidity requirements. All financial assets and financial liabilities of the company are non-interest bearing and repayable on demand or within 1 year.

C. CAPITAL MANAGEMENT AND OBJECTIVES

The company manages its capital to ensure that it will be able to continue on a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the company comprises of issued share capital net of accumulated losses.

The company is required to maintain a minimum amount of capital as prescribed under the Securities and Futures Act (Chapter 289) and relevant Regulations. The company is in compliance with the capital requirements for the year ended March 31, 2017 and March 31, 2016.

There were no changes to the company’s overall strategy during the year.



D. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Management consider that the carrying amounts of cash and cash equivalents, trade and other receivables, and other payables and accrual that are carried at amortised cost to approximate their respective fair values due to the relatively short-term maturity. There are no financial instruments that are measured at fair value on a recurring basis.

05 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONS

The company is a wholly-owned subsidiary of IDFC Securities Ltd., India. IDFC Securities Ltd., India is a wholly owned subsidiary of IDFC Financial Holding Company Ltd., India, which in turn is a wholly owned subsidiary of IDFC Ltd., India. The company’s ultimate holding company is IDFC Limited, incorporated in India. Related companies in these financial statements refer to members of the ultimate holding company’s group of companies.

Some of the company’s transactions and arrangements are between members of the group and the effects of these on the basis determined between the parties are reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand unless otherwise stated.

Significant related company transactions are as follows:

2017 2016

US$ US$

Recharges by a related company (48,693) (44,928)

Placement fee revenue from a related company 89,248 75,378

06 OTHER RELATED PARTY TRANSACTIONSSome of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements.

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

2017 2016

US$ US$

Salaries and other short-term benefits 232,883 433,740

07 TRADE AND OTHER RECEIVABLES

2017 2016

US$ US$

Related company - Trade 52,306 75,378

Third parties - Non-trade - 1,921

Deposit 71,541 74,014

123,847 151,313

The average credit period is 30 days (2016 : 30 days). At year-end, there were no balances which were past due and no impairment allowance was made.



08 PLANT AND EQUIPMENT

COMPUTERS

US$

COST:

At April 1, 2015 4,398

Additions -

At March 31, 2016 4,398

Additions 1,583

At March 31, 2017 5,981

ACCUMULATED DEPRECIATION:

At April 1, 2015 3,364

Depreciation 1,034

At March 31, 2016 4,398

Depreciation 110

At March 31, 2017 4,508

CARRYING AMOUNT:

At March 31, 2017 1,473

At March 31, 2016 -

09 OTHER PAYABLES AND ACCRUALS

2017 2016

US$ US$

Accrued expenses 29,544 21,325

Other payables - 2,910

Salary related accruals 7,595 6,104

37,139 30,339

10 SHARE CAPITAL

2017 2016 2017 2016

NUMBER OF ORDINARY SHARES US$ US$

Issued and fully paid:

At beginning of year 3,140,001 2,400,001 2,444,785 1,920,856

Issued for cash - 740,000 - 523,929

At the end of the year 3,140,001 3,140,001 2,444,785 2,444,785

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the company.

11 REVENUE

2017 2016

US$ US$

Fee income 315,309 111,162



12 OTHER OPERATING INCOME

2017 2016

US$ US$

Interest income 3,015 4,915

Foreign exchange gain - 15,872

3,015 20,787

13 OTHER OPERATING EXPENSES

2017 2016

US$ US$

Communication expenses 7,132 5,899


Travelling and conveyance 4,780 2,868

Subscription/Membership fee 20,567 17,790

Foreign exchange loss 16,746 -

Rental 4,877 5,396

Others 14,713 12,033

101,002 111,546

14 LOSS BEFORE INCOME TAX Loss before income tax is arrived at after charging:

2017 2016

US$ US$

Staff costs (excluding directors’ remuneration and costs of defined contribution plans) 199,564 189,290

Directors’ remuneration 212,931 238,052

Costs of defined contribution plans 31,008 26,666

15 INCOME TAX EXPENSEThe income tax benefit varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2016 : 17%) to loss before income tax as a result of the following differences:

2017 2016

US$ US$


Income tax benefit at statutory rate 17% (2016 : 17%) (41,411) (77,067)

Effects of expenses that are not deductible in determining taxable profit 2,865 -

Effects of unused tax losses not recognised as deferred tax assets 38,546 77,067

Income tax expense - -

Subject to the agreement by the tax authorities, at the end of the reporting period, the company has unutilised tax losses of approximately US$1,787,979 (2016 : US$1,561,238) available for offset against future profit. Deferred tax asset of US$303,956 (2016 : US$265,410) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.

IDFC CAPITAL (USA) INC.

Mr. Clifford Goldman


JP Morgan Chase Bank NA

Regus Business Centre

600 Third Avenue

2nd Floor New York, USA 10016

Tel +1 646 571 2303

CEO

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Sixth Annual Report of IDFC Capital (USA), Inc. together with the audited accounts for the year ended March 31, 2017.

FINANCIAL RESULTS


AMOUNT IN US$

Total Income 501,400

Less: Total Expenses 469,256

Profit before Tax 32,144

Less: Income Taxes (4,191)

Net Income 27,953

OPERATIONAL REVIEW AND FUTURE OUTLOOK

The US business has shown stable client traction and additions throughout the year. Although the environment remains challenging, the firm has been able to add new clients, increase revenues for 2017 and have been successful in terms of increasing its ranking in the large clients as well. Expect some improvement in revenues going forward due to improvement in client ranking and newly acquired clients begin to ramp up.

IDFC Capital (USA), Inc., (“the Company”) is the wholly owned subsidiary of IDFC Securities Limited. It was incorporated in the State of New York on August 3, 2009. IDFC Securities Limited, is in turn is a wholly owned subsidiary of IDFC Financial Holding Company Limited. On September 15, 2011, the Company became a broker-dealer and as such is registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority.

SHARE CAPITAL

During the year, there was no change in the paid up equity share capital of the Company.

ACKNOWLEDGEMENTS

The Board wishes to thank the clients, custodians Banks and other statutory and regulatory authorities for their support to your Company. The Board also places on record its appreciation for the sincere efforts of the staff.

The Board would also like to express its gratitude for the unstinted support and guidance received from IDFC Securities Limited and IDFC, the ultimate parent organization and also other group companies.

Clifford Goldman

CEO

June 30, 2017

I D F C C A P I TA L ( U S A ) , I N C . | 2 5 3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

IDFC Capital (USA), Inc.

We have audited the accompanying statement of financial condition of IDFC Capital (USA), Inc. (the “Company”) as of March 31, 2017,

and the related statements of operations, cash flows, and changes in stockholder’s equity for the year then ended. These financial

statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial

statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,

evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant

estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of IDFC Capital (USA), Inc. as of

March 31, 2017, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles

generally accepted in the United States of America.

As described in Notes 1 and 7, the activities of the Company include significant transactions with IDFC Limited and its affiliates that may

not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had operated as an

unaffiliated business. Our opinion is not modified with respect to this matter.


New york

May 24, 2017


STATEMENT OF FINANCIAL CONDITION March 31, 2017

AMOUNT IN US$

ASSETS

Cash 734,903

Due from parent 157,989

Fixed assets - net of accumulated depreciation of $44,963 1,772

Deferred tax asset 26,300

Income tax receivable 8,668

Other assets 16,428

TOTAL ASSETS 946,060

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:

Accrued expenses and other liabilities 20,288

Commitments and contingencies

STOCKHOLDER’S EQUITY:

Common stock ($.01 par value; 100,000,000 shares authorized, issued and outstanding) 1,000,000

Accumulated deficit (74,228)

TOTAL STOCKHOLDER’S EQUITY 925,772

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY 946,060


STATEMENT OF OPERATIONS For the Year Ended March 31, 2017

AMOUNT IN US$

REVENUES

Transfer pricing income 501,400

EXPENSES

Employee compensation and benefits 246,290

Consulting and professional fees 101,516

Rent, utilities and other office expenses 30,708

Market data and communications 34,126

Regulatory fees and expenses 11,821

Travel, entertainment and promotional expenses 31,118

Other 13,677

TOTAL EXPENSES 469,256

Net income before income taxes 32,144

Provision for income tax (4,191)

Net income 27,953


STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY For the Year Ended March 31, 2017

AMOUNT IN US$

SHARES COMMON STOCK ACCUMULATED DEFICIT

TOTAL

Balance, April 1, 2016 100,000,000 1,000,000 (74,481) 925,519

Prior year adjustment - Note 2 (27,700) (27,700)

Restated balance, April 1, 2016 100,000,000 1,000,000 (102,181) 897,819

Net income 27,953 27,953

Balance, March 31, 2017 100,000,000 1,000,000 (74,228) 925,772


STATEMENT OF CASH FLOWS For the Year Ended March 31, 2017

AMOUNT IN US$

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 27,953

Adjustments to reconcile net income to net cash used by operating activities

Depreciation 591

Deferred tax 3,100

Decrease (increase) in operating assets

Due from parent (42,526)

Income tax receivable (860)

Other assets 7,685

(Decrease) in operating liabilities

Accrued expenses and other liabilities (38,050)

Net cash used in operating activities (42,107)

CASH USED IN INVESTING ACTIVITIES

Purchases of fixed assets (2,363)

Loan to officer (11,248)

Repayment of loan to officer 5,380

Net cash used in investing activities (8,231)

NET DECREASE IN CASH (50,338)

CASH

Beginning of year 785,241

End of year 734,903

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for taxes 2,501



01. ORGANIZATIONIDFC Capital (USA), Inc. (the “Company”), is a wholly owned subsidiary of IDFC Securities Limited (“the Parent”). The Parent is a wholly owned subsidiary of IDFC Limited (“the Ultimate Parent”). The Company is a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”).

The Company’s principal business activity is distributing research and market commentary and brokering transactions in Indian equities for U.S. institutional clients. The customers introduced by the Company transact their business on delivery versus payment basis with settlement of the transactions facilitated by an affiliate in India for securities traded in Indian stock markets.

02. SIGNIFICANT ACCOUNTING POLICIES

Basis of PresentationThe Company’s financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Use of EstimatesIn preparing the financial statements, management makes estimates and assumptions that may affect the reported amounts. Such estimates include assumptions used in determining the provision for income taxes. Actual results could differ from these estimates.

Prior Year AdjustmentAs result of a change in state and local tax law, the Company should have eliminated any related deferred tax asset at March 31, 2016. Accordingly, an adjustment in the amount of $27,700 has been made to correct retained earnings at April 1, 2016.

Fixed AssetsFixed assets represent equipment and are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the assets estimated useful lives of 3 years.

Transfer Pricing IncomeThe Company receives fees from the Parent for performing sales and marketing functions on behalf of the Parent in order to attract institutional customers. The fees are based on expenses incurred by the Company in relation to the marketing activities such as compensation and benefits, professional services, occupancy, travel and other operating costs, plus a transfer pricing agreement profit factor of 7%.

Income TaxesDeferred tax assets and liabilities are recognized for the future tax effect of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. In the event it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is recorded.

The Company applies a single, comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on its tax returns. Income tax expense is based on pre-tax accounting income, including adjustments made for the recognition or derecognition related to uncertain tax positions.

The Company evaluates uncertain tax positions by reviewing against applicable tax law all positions taken by the Company with respect to tax years for which the statute of limitations remains open. A tax benefit from an uncertain tax position will be recognized when it is considered to be more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position.

03. INCOME TAXESThe components of the income tax benefit for the year ended March 31, 2017 are as follows:

AMOUNT IN US$

TAX PROVISION

CURRENT DEFERRED TOTAL

Federal 1,677 3,100 4,777

State and local (586) - (586)

1,091 3,100 4,191

Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Statement of Financial Condition. As of March 31, 2017, the Company has a deferred tax asset of $26,300, recorded in the accompanying Statement of Financial Condition, and is a result of temporary differences primarily related to amortization of organization costs.

The Company has determined that it is more likely than not that the deferred tax asset will be realized and therefore there is no valuation allowance against the deferred tax asset.

The difference between the Company’s current income tax (benefit) provision using statutory U.S. tax rate and its effective tax rate is primarily due to overpayment of prior year state and local income taxes.

Based upon the Company’s review of its federal, state, local income tax returns and tax filing positions, the Company determined no unrecognized tax benefits for uncertain tax positions were required to be recorded, as such, there were no reserves recorded for uncertain tax positions for the Company’s open tax years (2013 – 2016). In addition, the Company does not believe that it has any tax



positions for which it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits within the next twelve months.

04. RECENT ACCOUNTING DEVELOPMENTSFASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The new guidance is effective for the fiscal years beginning after December 15, 2017. The Company is currently evaluating the potential impact on its financial statements and the related disclosures, as well as the available transition methods.

On August 27, 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern. The ASU provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016. The Company has evaluated the impact that this new standard might have on its financial statements and has determined that there is no impact.

05. CONCENTRATION OF CREDIT RISKIn the normal course of business, the Company’s activities involve transactions with the Parent. These activities may expose the Company to risk in the event the Parent is unable to fulfill its contractual obligations.

The Company maintains substantially all of its cash balances at two major financial institutions. The Company does not believe that these amounts are exposed to significant risk.

06. REGULATORY REQUIREMENTSThe Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1) (“the Rule”) under the Securities Exchange Act of 1934. The Company has elected to use the alternative method permitted by the Rule, which requires the Company maintain minimum net capital, as defined, shall not be less than $250,000. At March 31, 2017, the Company had net capital of $714,615 which was $464,615 in excess of its required minimum net capital of $250,000.

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company’s activities are limited to those set forth in the condition for exemption appearing in paragraph (k)(2)(i).

07. RELATED PARTY TRANSACTIONSBased on its liquidity at any given time, the Company’s ability to meet regulatory capital requirements may be dependent on its access to funding from the Parent.

The Company maintains a service level agreement with the Parent whereby the Company distributes research on its behalf. The Parent compensates the Company by paying its expenses plus a markup of 7%.

The Company earned $501,400 in transfer pricing income from the Parent for the year ended March 31, 2017, representing 107% of total expenses, in accordance with the service level agreement, of which $157,989 remained unpaid as of March 31, 2017 and is reflected as receivable from parent in the statement of financial condition.

The Company loaned $11,248 to an officer. The loan is non-interest bearing. The unpaid balance as of March 31, 2017 was $5,868 and is reflected in other assets on the statement of financial condition.

The activities of the Company include significant transactions with affiliates and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had operated as an unaffiliated business.

08. COMMITMENTS AND CONTINGENCIESThe Company rents office space under an operating lease, which expires August 31, 2017. The future minimum annual base rent payments required under this operating lease is $11,915.

Total rental expense for the year ended March 31, 2017, was $28,395 and is included in rent, utilities and other office expenses on the Statement of Operations.

There is no pending litigation against the company.

09. FIXED ASSETSFixed assets consisted of the following at March 31, 2017:

AMOUNT IN US$

Equipment 46,735

Less: accumulated depreciation (44,963)

1,772

Depreciation expense for the year ended March 31, 2017 was $591.

10. FAIR VALUE OF FINANCIAL INSTRUMENTSCertain financial instruments are carried at amounts that approximate fair value due to the short- term nature and negligible credit risk. These instruments include cash (Level 1), due from parent (Level 2) and loan to officer (Level 2).

11. SUBSEQUENT EVENTSThe Company has evaluated subsequent events up to the date on which the financial statements are issued. As a result of the Company’s evaluation, the Company noted no subsequent events that require adjustment to, or disclosure in, these financial statements.

IDFC ASSET MANAGEMENT COMPANY LIMITED

U65993MH1999PLC123191

Mr. Vikram Limaye (Chairperson)


Mr. Vishwavir Saran Das

Ms. Anita Ramachandran

Mr. Eric Ward (Till March 20, 2017)

S. R. Batliboi & Co. LLP


IDFC Bank Limited

One Indiabulls Centre,

6th Floor, Jupiter Mills Compound,

841, Senapati Bapat Marg,

Elphinstone Road (West)

Mumbai 400 013

Tel +91 22 6628 9999

Fax + 91 22 2421 5051

Website www.idfcmf.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 1

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Seventeenth Annual Report of IDFC Asset Management Company Limited

(“the Company” or “IDFC AMC”) together with the audited financial statements for the financial year ended March 31, 2017.





Total Income 3,096,303,079 3,255,954,776

Less: Total Expenses 1,696,287,581 1,628,191,505

Profit before Tax 1,400,015,498 1,627,763,271


Profit after Tax 972,814,191 1,100,409,929

COMPANY’S AFFAIRS

I. Mutual Funds

IDFC Asset Management Company Limited (“IDFC AMC” or “the Company”) is the Investment Manager of the schemes of IDFC Mutual

Fund (“IDFC MF”). The Assets under Management of IDFC MF were ` 55,383.40 crore (excluding Fund of Funds Schemes) as on March

31, 2017.

New Scheme launches:

During FY17, below schemes were launched

1. IDFC Nifty Exchange Traded Fund

2. IDFC Sensex Exchange Traded Fund

3. IDFC Balanced Fund

4. IDFC Credit Opportunities Fund

5. IDFC Fixed Term Plan - Series 129


II. Portfolio Management Services:

The Company is registered as a Portfolio Manager with the Securities and Exchange Board of India (“SEBI”) to carry out Portfolio

Management Services pursuant to SEBI (Portfolio Managers) Regulations, 1993. IDFC Hybrid Infrastructure Portfolio (“HIP”) was the

first portfolio offering for domestic retail investors under the PMS platform of the Company. The investment objective of HIP is to invest

in permitted securities / instruments issued by companies operating in the Infrastructure space and endeavour to achieve risk adjusted

medium to long term capital appreciation.

The Company also acts as an Investment Manager to IDFC S.P.I.C.E. Fund, the objective of the fund is to achieve attractive risk adjusted

returns through investments in medium to long term unlisted and listed opportunities in social infrastructure, physical infrastructure,

consumption and environment sectors.



DIVIDEND

The Company has made a profit after tax of ` 97.28 crore For FY17. The Directors recommend a dividend of ` 227.5 (i.e. 2275%) per

equity share on face value of `10 for the financial year ended March 31, 2017.

SUBSIDIARY COMPANIES / ASSOCIATES / JOINT VENTURES

As on March 31, 2017, the Company had one subsidiary, namely IDFC Investment Managers (Mauritius) Limited (“IMML”). The Board of

Directors of the Company reviews the affairs of its subsidiary companies regularly. Further, a statement containing the salient features of

the financial statement and details of performance and financial positions of IMML in the format AOC-I is appended as Annexure I.


On March 20, 2017, IDFC discontinued association with Natixis and 669,762 equity shares of IDFC AMC held by Natixis Global Asset

Management Asia Pte. Ltd were transferred to IDFC Financial Holding Company Limited (“IDFC FHCL”), thereby making IDFC AMC a

wholly owned subsidiary of IDFC FHCL.


BOARD'S REPORT

ALTERATION OF ARTICLES OF ASSOCIATION

The Articles of Association of the Company as currently in force were adopted by the Company at its extra ordinary general meeting held on December 08, 2011 after having an association with Natixis Global Asset Management by executing Share Subscription and Purchase Agreement and Shareholders Agreement. During FY17, the same association was discontinued and the aforesaid agreements were amended accordingly.

Further, the Existing Articles of Association of the Company were referring to the Companies Act, 1956 which was debarred and was replaced with the Companies Act, 2013. The references to specific sections of the erstwhile Companies Act, 1956 in the existing Articles of Association may no longer be in conformity with the Companies Act, 2013. Considering discontinuation of association with Natixis and that substantive sections of the Companies Act which deal with the general working of the companies stand notified, it The Board of Directors of the Company at its meeting held on April 24, 2017, recommended the amendment of the existing Articles of Association to the Shareholders at the ensuing AGM for aligning the Articles with the provisions of Companies Act, 2013 including the Rules framed thereunder and adoption of specific sections from Table “F” to Schedule I to the Companies Act, 2013 which sets out the model articles of association for a company limited by shares.

PARTICULARS OF EMPLOYEESThe Company had 189 employees as on March 31, 2017.

The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.

PUBLIC DEPOSITSThe Company has neither invited nor accepted any Public Deposits.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTSThere were no loans or guarantee or investments of the Company under the provisions of Section 186 of the Companies Act, 2013.

FOREIGN EXCHANGE EXPENDITURE AND EARNINGThe particulars regarding foreign exchange expenditure and earning are furnished in Note no. 21 & 22 respectively in the Notes forming part of the Financial Statements.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONSince the Company does not undertake any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.

DIRECTORSDuring the year, Dr. Rajeev Uberoi was appointed as an Alternate Director to Mr. Eric Ward w.e.f. July 20, 2016 and he ceased to be an Alternate Director w.e.f. October 25, 2016 on account of Mr. Eric Ward returning to India. Further, Mr. Eric ward resigned as Director w.e.f. March 20, 2017.

The Board places on record sincere appreciation for services rendered by them during their tenure.

At the Extra ordinary general Meeting of the Company held on December 19, 2014, Mr. Vishwavir Saran Das was appointed as an Independent Director (“ID”) of the Company to hold office from the conclusion of that General Meeting till the conclusion of the 17th Annual General Meeting of the Company to be held for the FY17 i.e. ensuing AGM. As per the provisions of Section 149(10) & (11) of the Companies Act, 2013, Mr. Vishwavir Saran Das can be appointed for another term, if the same is approved by the Shareholders by way of Special Resolution. On recommendation of the Nomination and Remuneration Committee and considering the valuable contributions and continued association of Mr. Vishwavir Saran Das, the Board proposed to reappoint Mr. Vishwavir Saran Das as ID of the Company for two years from the conclusion of the ensuing AGM till the conclusion of 19th AGM to be held for FY19. He fulfills the conditions specified in the Companies Act, 2013 and the Rules made thereunder and is Independent of the Management. In the opinion of the Board, Mr. Vishwavir Saran Das is a person of integrity and has the necessary knowledge, experience and expertise for being reappointed as ID. He shall not be liable to retire by rotation. The Members are requested to consider reappointment of Mr. Vishwavir Saran Das at ensuing AGM.

DECLARATION OF INDEPENDENCEThe Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.


BOARD'S REPORT

MEETINGS OF THE BOARDDuring the year, Seven Board meetings were held on April 27, 2016; July 21, 2016; September 7, 2016; October 26, 2016; December 21, 2016; January 24, 2017 and March 29, 2017. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.

Attendance details of Board of Directors for the Board Meetings held during FY17 are given below.



Mr. Vikram Limaye1 00488534 Chairperson 7 7

Mr. Vishwavir Saran Das 03627147 Independent Director 7 7

Ms. Anita Ramachandran 00118188 Independent Director 7 5

Mr. Eric Ward2 03522521 Nominee of NATIXIS Global Asset Management 4 1

Dr. Rajeev Uberoi3 01731829 Alternate Director to Mr. Eric Ward 2 11 Tendered his resignation w.e.f. July 15, 2017.2 Resigned as a Director w.e.f. March 20, 20173 Appointed as an Alternate Director to Mr. Eric Ward w.e.f. July 20, 2016 and ceased to be an Alternate Director w.e.f. October 25, 2016.

AUDIT COMMITTEE

During the year, Four Audit Committee meetings were held on April 27, 2016, July 21, 2016, October 26, 2016 and January 24, 2017. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.

Attendance details of Directors for the Audit Committee Meetings held during FY17 are given below.

NAME OF THE MEMBER POSITION STATUS NO. OF MEETINGS HELD


Mr. Vishwavir Saran Das Independent Director Chairperson 4 4

Ms. Anita Ramachandran Independent Director Member 4 3

Mr. Vikram Limaye1 Nominee of IDFC Member NA NA

Mr. Eric Ward2 Nominee of NATIXIS Global Asset Management Member 3 1

Dr. Rajeev Uberoi3 Alternate Director to Mr. Eric Ward Member 1 11 Appointed as a member w.e.f. April 17, 2017 and tendered his resignation w.e.f. July 15, 2017 2 Resigned as a Director w.e.f. March 20, 20173 Appointed as an Alternate Director to Mr. Eric Ward w.e.f. July 20, 2016 and ceased to be an Alternate Director w.e.f. October 25, 2016.


During the year, Two meetings of NRC were held on April 27, 2016 and March 29, 2017.

Attendance details of Directors for the NRC Meetings held during FY17 are given below.



Ms. Anita Ramachandran Independent Director Chairperson 2 2

Mr. Vishwavir Saran Das Independent Director Member 2 2

Mr. Vikram Limaye1 Nominee of IDFC Member 2 2

Mr. Eric Ward2 Nominee of NATIXIS Global Asset Management Member 1 -

1 Tendered his resignation w.e.f. July 15, 2017 2 Resigned as a Director w.e.f. March 20, 2017


During the year, a separate meeting of Independent Directors was held on April 27, 2016. All Independent Directors attended the said meeting.

BOARD EVALUATION


The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. For this purpose the Company may engage an External Agency to carry out the entire Annual Board Evaluation process independently. The said process is expected to be completed in due course.


BOARD'S REPORT

REMUNERATION POLICY

The Company has in place a Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees which is line with the Section 178 of Companies Act, 2013 and Rules made thereunder.

STATUTORY AUDITORS

S.R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration Number- 301003E, a member firm of Ernst & Young Global Limited, were Statutory Auditors of the Company for FY17. There are no qualifications or observations or other remarks made by the Statutory Auditors in their report for FY17.

S.R. Batliboi & Co. LLP have expressed their unwillingness to act as a Statutory Auditors of the Company after conclusion of ensuing AGM. Audit Committee and Board of Directors of the Company at their respective meetings held on April 24, 2017 have recommended the appointment of Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of S.R. Batliboi & Co. LLP, Chartered Accountants, for a period of Five years from the conclusion of the ensuing Annual General Meeting (AGM) of the Company to be held for FY17 till the conclusion of the 22nd AGM of the Company to be held for FY22, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis.


SECRETARIAL AUDIT

Pursuant to Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company appointed M/s Kaushik Jhaveri & Co., Practicing Company Secretary, as Secretarial Auditors to undertake the Secretarial Audit of the Company for FY17.

There are no qualifications or observations or other remarks made by the Secretarial Auditors in their report.

The Secretarial Audit Report forms part of this Board’s Report as Annexure II.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013

In all related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. IDFC Group has always been committed to good corporate governance practices, including matters relating to Related Party Transactions. The Company has in place a Policy on Related Party Transactions and the same is uploaded on the website of the Company.

The Audit Committee reviews the details of related party transactions entered into by the Company on quarterly basis.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and Enterprise risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.

RISK MANAGEMENT

The Audit Committee of the Company endeavours to review the risk register at every meeting held during the year. The Members of the Audit Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.







There are no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the going concern status of the Company and its future operations.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

There were no instances of Sexual Harassment that were reported during FY17 under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.


The extract of the Annual Return in the prescribed Form No. MGT 9 are appended as Annexure III.


As on March 31, 2017, the Corporate Social Responsibility Committee comprises of the following:

1. Mr. Vikram Limaye - Chairperson

2. Mr. Vishwavir Saran Das

3. Ms. Anita Ramachandran

During the year under review, one meeting of CSR Committee was held on April 27, 2016 where all members were present.

The composition of CSR Committee is in compliance with the Companies Act, 2013. The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure IV.



(a) in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual financial statements on a going concern basis; and

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

ACKNOWLEDGEMENTS

The Board places on record its gratitude to SEBI, Reserve Bank of India, Association of Mutual Funds of India, other regulatory authorities and institutions and Investors of the Mutual Fund schemes for their continued guidance and support and expresses its sincere appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year.

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, IDFC FHCL and other group companies.








(Information in respect of each subsidiary to be presented with amounts in ` )

1. CIN -

2. Name of the subsidiary IDFC Investment Managers (Mauritius) Limited

3. Date since when subsidiary was acquired September 13, 2010

4. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

April 1, 2016 to March 31, 2017

5. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.

INR*

6. Share capital (as on March 31, 2017) 2,50,69,224

7. Reserves & surplus (as on March 31, 2017) (1,22,20,852)

8. Total assets (as on March 31, 2017) 1,56,61,742

9. Total Liabilities (as on March 31, 2017) 1,56,61,742

10. Investments Nil

11. Turnover Nil

12. Profit/(Loss) before taxation (21,87,763)

13. Provision for taxation Nil

14. Profit/(Loss) after taxation (21,87,763)

15. Proposed Dividend Nil

16. % of shareholding 100

*Exchange Rate:

Closing Rate: 1 USD = 64.8386

Average Rate: 1 USD = 67.0615


PART “B”: ASSOCIATES AND JOINT VENTURES

Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures:

NOT APPLICABLE

For and on behalf of the Board of Directors ofIDFC Asset Management Company Limited


Vishwavir Saran DasDirector

Nirav Shah Rupesh Acharya

Mumbai, April 24, 2017 Company Secretary Chief Financial Officer



FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014]

To,

The Members,


One India Bulls Centre, 841 Jupiter Mills Compound,

Senapati Bapat Marg, Elphinstone (West),

Mumbai – 400 013

CIN :U65993MH1999PLC123191

WE have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate

practices by IDFC ASSET MANAGEMENT COMPANY LIMITED having CIN:U65993MH1999PLC123191 (hereinafter called “the Company”).

Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory

compliances and expressing our opinion thereon.

Based on our verification of Company’s books, papers, minute books, forms and returns filed and other records maintained by the

Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of

secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on

31st March, 2017 (‘Audit Period’) complied with the statutory provisions listed hereunder and also that the Company has proper Board -

processes and compliance - mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by IDFC ASSET

MANAGEMENT COMPANY LIMITED for the financial year ended on 31st March, 2017 according to the provisions of:

(i) The Companies Act, 2013 (‘the Act’) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (Not applicable to the company during the audit period)

(iii) The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment and Overseas Direct Investment. The Company does not have any External Commercial Borrowings for the financial year.

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act,1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011; (Not applicable to the company during the audit period)

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (Not applicable to the company during the audit period)

(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999; (Not applicable to the company during the audit period)

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the company during the audit period)

(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not Applicable to the Company during audit period).



We have relied on the report of Internal Auditors placed at the Board Meeting and on the representations made by the Company, its

officers for systems and mechanisms developed by the Company in order to ensure compliances under the other applicable Acts, Laws

and Regulations to the Company. The list of Acts, Other Laws and Regulations specifically applicable to the Company are given below:

(i) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended;

(ii) The Prevention of Money Laundering Act, 2002

We have also examined compliance with applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;

(ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;

During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines and

Standards etc. as mentioned above, to the extent applicable.

We further inform that the Company has adequate Composition of Board of Directors as per SEBI (Mutual Funds) Regulations, 1996

and Companies Act, 2013. During the audit period the Composition of the Board of Directors has been changed which is below the

prescribed number as provided in Articles of Association. As informed by the Management, the Company is in process of Alteration of

Articles to bring the complete set of Articles in line with the existing provisions of Companies Act, 2013.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven

days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the

meeting and for meaningful participation at the meeting.

During the period under review, the decisions were carried unanimously and no dissenting views were observed, while reviewing the

minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the

Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that, during the period under, there are no other specific events/actions in pursuance of the above referred laws, rules,

regulations, guidelines, etc. having a major bearing on the Company’s affairs.

For Kaushik M. Jhaveri & Co.,Practising Company Secretary

Kaushik M. JhaveriFCS No.: 4254; CP No. : 2592




AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2017



i) CIN U65993MH1999PLC123191


iii) Name of the Company IDFC ASSET MANAGEMENT COMPANY LIMITED

iv) Category / Sub-Category of the Company Company Limited by shares

Indian Non-Government Company

v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra.Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051



TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011. Tel.: +91 22 6656 8484



SR. NO.



1. Asset Management 66301 94.28


SR. NO.


% OF SHARES HELD

APPLICABLE SECTION


2 IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3 IDFC Investment Managers (Mauritius) Ltd. N.A. Subsidiary 100 Section 2(87)





% CHANGE DURING

THE YEAR



A. Promoters

(1) Indian

d) Bodies Corp. 2,009,277 6 2,009,283 75 2,679,039 6 2,679,045 100 25

Sub-total (A) (1):- 2,009,277 6 2,009,283 75 2,679,039 6 2,679,045 100 25

(2) Foreign

a) Bodies Corp. 669,762 NIL 669,762 25 NIL NIL NIL NIL (25)

Sub-total (A) (2):- 669,762 NIL 669,762 25 NIL NIL NIL NIL (25)

Total shareholding of Promoter (A) = (A)(1)+(A)(2)

2,679,039 6 2,679,045 100 2,679,039 6 2,679,045 100 NIL




Grand Total (A+B+C) 2,679,039 6 2,679,045 100 2,679,039 6 2,679,045 100 NIL




SR. NO.




DURING THE YEAR

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/


NO. OF SHARES

% OF TOTAL SHARES OF

THE COMPANY

%OF SHARES PLEDGED/


1 IDFC Financial Holding Company Limited & its nominees

2,009,283 75 NIL 2,679,045 100 NIL 25

Total 2,009,283 75 NIL 2,679,045 100 NIL 25

(iii) Change in Promoters’ Shareholding:

SR. NO.

SHAREHOLDING AT THE BEGINNING OF THE YEAR CUMULATIVE SHAREHOLDING DURING THE YEAR



1 At the beginning of the year 2,009,283 75 2,009,283 75

2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):

On March 20, 2017, 669,762 equity share of IDFC AMC

held by Natixis Global Asset Management Asia

Pte. Ltd were transferred to IDFC Financial Holding

Company Limited

25 On March 20, 2017, 669,762 equity share of IDFC AMC

held by Natixis Global Asset Management Asia Pte. Ltd

were transferred to IDFC Financial Holding Company

Limited

25

3 At the end of the year 2,679,045 100 2,679,045 100


NOT APPLICABLE


V. INDEBTEDNESS


VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: NOT APPLICABLE



SR. NO.


VIKRAM LIMAYE

ERIC WARD VISHWAVIR SARAN DAS

ANITA RAMACHANDRAN


Fee for attending board committee meetings 375,000 300,000 675,000

Commission NIL NIL

Others, please specify NIL NIL

Total (1) 375,000 300,000 675,000

2. Other Non-Executive Directors NIL NIL NIL

Total (B) = (1 + 2) NIL NIL 375,000 300,000 675,000


Note: Sitting fees paid to Directors is within the overall Ceiling limit as prescribed under the Companies Act, 2013.








Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC AMC Ltd. to mandatorily spend on CSR.

During the year, IDFC Asset Management Company Ltd. carried out CSR activities through on of the group companies of IDFC Limited, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others

2. The Composition of the CSR Committee.

Mr. Vikram Limaye

Mr. Vishwavir Saran Das

Ms. Anita Ramachandran

3. Average net profit of the company for last three financial years ` 137.32 Cr

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) ` 2.75 Cr


a) Total amount to be spent for the financial year: ` 2.75 Cr

b) Amount spent during the year: ` 2.75 Cr

c) Amount unspent, if any; NIL




For IDFC AMC Limited

Place : Mumbai Vikram Limaye Anita RamachandranDate : June 30, 2017 Chairperson – CSR Committee Director

ANNEXURE IVCORPORATE SOCIAL RESPONSIBILITY (CSR)



` IN CRORE

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO CSR PROJECT OR ACTIVITY IDENTIFIED

SECTOR IN WHICH THE PROJECT IS COVERED (CLAUSE NO. OF SCHEDULE VII TO THE COMPANIES ACT, 2013, AMENDED)

PROJECTS OR PROGRAMS: (1) LOCAL AREA OR OTHER (2) SPECIFY THE STATE AND DISTRICT WHERE PROJECTS OR PROGRAMS WAS UNDERTAKEN

AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS


UP TO THE REPORTING

PERIOD



AGENCY



0.67

0.05 0.13

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







0.04 0.09



Total 0.67 0.21 0.54


0.77

0.02 0.02





Total 0.77 0.23 0.23


Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone,Dhar, Bhopal, Raisen, Dewas and Indore Karnataka - Hubbali(Dharwad), Haveri, Koppal, Bagalkot, Belgaavi

0.66

0.17 0.24











Total 0.66 0.36 0.56


Total 0.65 0.54 0.96



Total (A) + (B) 2.75 1.37 2.44



ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)



` IN CRORE

(1) (2) (3) (4) (5) (6) (7) (8)

SR. NO CSR PROJECT OR ACTIVITY IDENTIFIED

SECTOR IN WHICH THE PROJECT IS COVERED (CLAUSE NO. OF SCHEDULE VII TO THE COMPANIES ACT, 2013, AMENDED)

PROJECTS OR PROGRAMS: (1) LOCAL AREA OR OTHER (2) SPECIFY THE STATE AND DISTRICT WHERE PROJECTS OR PROGRAMS WAS UNDERTAKEN

AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS


UP TO THE REPORTING

PERIOD



AGENCY



0.67

0.05 0.13

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







0.04 0.09



Total 0.67 0.21 0.54


0.77

0.02 0.02





Total 0.77 0.23 0.23


Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone,Dhar, Bhopal, Raisen, Dewas and Indore Karnataka - Hubbali(Dharwad), Haveri, Koppal, Bagalkot, Belgaavi

0.66

0.17 0.24











Total 0.66 0.36 0.56


Total 0.65 0.54 0.96



Total (A) + (B) 2.75 1.37 2.44





TO THE MEMBERS OF IDFC ASSET MANAGEMENT COMPANY LIMITED


We have audited the accompanying financial statements of IDFC Asset Management Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2017, its profit, and its cash flows for the year ended on that date.


1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;



(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” to this report;

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 29 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. As per books of account of the Company and as represented by the management of the Company, the Company did not have cash balance as on November 8, 2016 and December 30, 2016 and has no cash dealings during this period.

For S.R. Batliboi & Co. LLP Chartered AccountantsICAI Firm Registration Number: 301003E/E300005

per Viren H. MehtaPartnerMembership Number: 048749



ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT

Annexure referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date

Re: IDFC Asset Management Company Limited


(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management, there are no immovable properties, included in fixed assets of the company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.

(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the services of the Company.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, custom duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income tax, sales-tax, service tax, customs duty, excise duty, value added tax and cess which have not been deposited on account of any dispute.

(viii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders or government.

(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud on or by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the provisions of section 197 read with Schedule V to the Act is not applicable to the company and hence reporting under clause 3(xi) are not applicable and hence not commented upon.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP Chartered AccountantsICAI Firm Registration Number: 301003E/E300005




ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF IDFC ASSET MANAGEMENT COMPANY LIMTED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

To the Members of IDFC Asset Management Company Limited We have audited the internal financial controls over financial reporting of IDFC Asset Management Company Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial ControlsThe Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.



OpinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.For S.R. Batliboi & Co. LLP Chartered AccountantsICAI Firm Registration Number: 301003E/E300005








NOTES ` ` `



(a) Share capital 4 26,790,450 26,790,450


2,234,089,197 1,261,275,006


(a) Other long-term liabilities 6 8,579,072 8,974,174

8,579,072 8,974,174

Current liabilities

(a) Other current liabilities 7 33,753,644 53,492,873

(b) Short-term provisions 8 486,648,076 1,460,715,043

520,401,720 1,514,207,916

TOTAL 2,763,069,989 2,784,457,096

ASSETS

Non-current assets

(a) Fixed assets

Tangible assets 9 64,998,581 39,153,887


86,411,104 48,527,304

(b) Non-current investments 11 169,960,965 167,861,224

(c) Deferred tax assets (net) 12 25,485,000 29,587,000

(d) Long-term loans and advances 13 150,899,664 125,675,612

346,345,629 323,123,836

432,756,733 371,651,140

Current assets

(a) Current investments 14 2,164,520,826 2,163,092,053

(b) Trade receivables 15 84,825,111 110,788,130

(c) Cash and bank balances 16 21,574,863 45,707,506

(d) Short-term loans and advances 13 59,392,456 93,218,267

2,330,313,256 2,412,805,956

TOTAL 2,763,069,989 2,784,457,096

Summary of significant accounting policies 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For S. R. Batliboi & Co. LLPChartered AccountantsICAI Firm Registration No. 301003E/E300005


Viren H. MehtaPartner(Membership No. 048749)



Mumbai, April 24, 2017Nirav ShahCompany Secretary

Rupesh AcharyaChief Financial Officer





NOTES ` `

I INCOME


Other income 18 176,653,484 99,822,192

TOTAL INCOME (I) 3,096,303,079 3,255,954,776

II EXPENSES


Depreciation and amortisation expense 9, 10 29,146,764 24,588,244

Other expenses 20 1,129,502,712 1,040,287,027

TOTAL EXPENSES (II) 1,696,287,581 1,628,191,505

III PROFIT BEFORE TAX (I - II) 1,400,015,498 1,627,763,271

IV TAX EXPENSE

Current tax 457,800,000 570,453,000

Deferred tax 4,102,000 (233,432)

Adjustment of tax relating to earlier periods (34,700,693) (42,866,226)


V PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS (III - IV) 972,814,191 1,100,409,929

Basic and diluted earnings per equity share (Nominal value of share ` 10) 27 363.12 410.75















` ` `

(A) CASH FLOW FROM OPERATING ACTIVITIES

PROFIT / (LOSS) BEFORE TAXATION 1,400,015,498 1,627,763,271

Adjustment for:

Add/(Less) : Depreciation and amortisation 29,146,764 24,588,244

Add/(Less) : Lease escalation charge (776,012) 602,035

Add/(Less) : Loss on sale of Fixed assets (net of profit) (322,460) (171,742)

Add/(Less) : Interest on Bank Fixed Deposit (323,273) -

Add/(Less) : Profit on sale of other investments (173,829,344) (99,226,323)

Add/(Less) : Profit from trading in derivatives (969,953) -

Add/(Less) : Interest on income tax refund (602,165) -

Operating profit before working capital changes 1,252,339,055 1,553,555,485


(Increase)/decrease in long term loans and advances (31,263,109) 56,866,709

(Increase)/decrease in trade receivables 25,963,019 496,095

(Increase)/decrease in short term loans and advances 33,825,811 5,224,243

Increase/(decrease) in other current liabilities (19,358,318) (119,142,818)

Increase/(decrease) in short term provisions (29,939,970) (77,027,116)

(20,772,567) (133,582,887)

Cash generated from/(used in) operations 1,231,566,488 1,419,972,598

Direct taxes paid (net of refund) (377,129,361) (554,369,871)


(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed asset including capital work-in-progress (67,226,695) (27,305,157)

Sale Proceeds from Fixed assets 518,592 931,928

Purchase of investments (4,043,727,570) (3,392,160,182)

Sale Proceeds on sale of investments 4,214,028,399 3,081,509,205

Proceeds from trading in derivatives 969,953 -

Purchase of Bank Fixed Deposit (20,000,000) -

Maturity of Bank Fixed Deposit 20,323,273 -

Investment in Subsidiaries - (16,525,000)

NET CASH FLOW FROM INVESTING ACTIVITIES (B) 104,885,952 (353,549,206)

(C) CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (including dividend tax) (983,455,722) (628,766,773)

NET CASH FLOW FROM FINANCING ACTIVITIES (C) (983,455,722) (628,766,773)

Net increase/(decrease) in cash and cash equivalents (A + B + C) (24,132,643) (116,713,252)

Cash and cash equivalents as at beginning of the year (refer note 16)

45,707,506 159,235,787

Cash and cash equivalents of the merged company - 3,184,971

Cash and cash equivalents as at end of the year (refer note 16) 21,574,863 45,707,506

(24,132,643) (116,713,252)

Investing and Operating activities for the year ended March 31, 2016 excludes non cash transactions on account of amalgamation.











01 BACKGROUNDIDFC Asset Management Company Limited (‘the Company’) is a public limited company, incorporated in India and regulated by The Securities Exchange Board of India (“SEBI”). The Company provides asset management services, portfolio management and investment advisory services.

IDFC Investment Advisors Limited, wholly owned subsidiary company, had filed a petition with the Bombay High Court on December 22, 2014 to obtain its sanction to a Scheme of Amalgamation for carrying out an amalgamation of IDFC Investment Advisors Limited with the Company.

The Amalgamation was effective from April 01, 2015 (Appointed Date) as approved by the Honorable High Court of Bombay (“High Court”) vide its order dated April 18, 2015 which had been filed by the Company with the Registrar of Companies on June 23, 2015 (“Effective Date”). The said scheme of merger as approved by the High Court was effective from the Appointed Date but operative from the Effective Date, hence the business of the subsidiary had been transferred to and vested with the Holding Company on a going concern basis.

During the year, IDFC Financial Holding Company Limited has acquired the entire shareholding of Natixis Global Asset Management Asia Pte. Ltd., Singapore in IDFC Asset Management Company Limited with effect from March 20, 2017.

02 BASIS OF PREPARATIONThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the and the Companies (Accounting Standards) Amendment Rule 2016 and applicable guidelines issued by SEBI. The financial statements have been prepared on the accrual basis under the historical cost convention. The accounting policies followed in the preparation of financial statements are consistent with those followed in the previous year.


A. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

B. INVESTMENTS

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Long term investments are carried at acquisition cost. However, a provision is made for diminution other than temporary on an individual basis.

Current investments are carried in the financial statement at lower of cost or fair value on an individual investment basis.

On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to Statement of Profit and Loss.

C. TANGIBLE FIXED ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for the intended use, less accumulated depreciation and accumulated losses, if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Leasehold Improvements are shown at historical cost less accumulated depreciation.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the year during which such expenses are incurred.

The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of remaining asset.



D. DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciation on tangible fixed assets is provided on straight-line method, as per the useful life prescribed in schedule II to the Companies Act, 2013 except in case of assets costing less than `5,000 each, which are fully depreciated in the year of capitalization and vehicles and certain office equipments, in which case, life of asset has been internally assessed.

¡ Computers for 3 years

¡ Servers and networks for 6 years

¡ Furniture for 10 years

¡ Office Equipment for 5 years

¡ Vehicle for 4 years

¡ Mobile for 2 years

¡ Leasehold improvements over the extended lease term or 5 years whichever is earlier.

Depreciation on additions during the year is provided on a pro-rata basis.

E. INTANGIBLE ASSETS AND AMORTISATION

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised over a period of three years on a straight line method. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.

F. IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists or when annual impairment testing of an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and it’s value in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted for their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. In determining net selling price, recent market transactions are taken into account. If available, If no such transaction can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognised in the revaluation reserve up to the amount of any previous revaluation. After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or the carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Profit and Loss unless the assets is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

G. REVENUE RECOGNITIONS

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

Asset management fees are recognised net of service tax on an accrual basis in terms of Investment Management Agreement entered into by the Company with IDFC AMC Trustee Company Limited and in accordance with SEBI guidelines.

Income from portfolio management and advisory services is recognised at price agreed in accordance with the arrangement with the customers.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Profit and Loss.

Dividends

Dividend income is recognised when the Company’s right to receive dividend is established at the reporting date.



H. FOREIGN CURRENCY TRANSACTIONS

Initial recognition

Foreign currency transactions are recorded in the reported currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transactions.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction. Non monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differences

Exchange differences are recognised as income or as expenses in the period in which they arise.

I. OPERATING LEASES

Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Rental charges over the term of such leases, after taking into account the escalation clause, are charged to the Statement of Profit and Loss on a straight line basis over the extended lease term.

J. EXPENSE UNDER EMPLOYEE STOCK OPTION SCHEMES

The Ultimate Holding Company has formulated Employee Stock Option Schemes (‘the ESOS’) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the Guidelines’). The ESOS provides for grant of stock options to employees (including employees of subsidiary companies) to acquire equity shares of the Ultimate Holding Company that vest in a graded manner and that are to be exercised within a specified period. In accordance with the Guidelines and the Guidance Note on ‘Accounting for Employees Share-based Payments’ issued by the Institute of Chartered Accountants of India, the excess, if any, of the closing market price on the day prior to the date of grant of the stock options under the ESOS over the exercise price is amortised on a straight-line method over the vesting period and is charged to the Statement of Profit and Loss as employee benefits expense. In case the vested stock options expire unexercised, the balance in stock options outstanding is transferred to the general reserve. In case the unvested stock options get lapsed / cancelled, the balance in stock option outstanding account is transferred to Statement of Profit and Loss.

K. RETIREMENT AND OTHER EMPLOYEE BENEFIT

Retirement benefit in the form of provident fund, superannuation fund and pension fund is a defined contribution scheme and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made. The Company has no obligation, other than the contribution payable to the provident fund, superannuation fund and pension fund. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment.

The Company operates a defined plan for its employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end which is determined using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the Statement of Profit and Loss.

Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

L. PROPOSED DIVIDEND

The Board of Directors, in their meeting held on April 24, 2017 have proposed a final dividend of `227.50 per equity share amounting to `609,482,738 exclusive of corporate dividend tax. The proposal is subject to the approval of shareholders at the Annual General Meeting. In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance Sheet date’ as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated March 30, 2016, proposed dividend is not recognised as a liability as on March 31, 2017. Accordingly, the balance of Reserves and Surplus is higher by `733,561,234 (including corporate dividend tax) and the balance of Short term provisions is lower by an equivalent amount as on March 31, 2017.

M. PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.



N. INCOME TAX Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax

authorities in accordance with the Income-tax Act 1961, enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

O. CONTINGENT LIABILITIES A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence

or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

P. CASH AND CASH EQUIVALENTS Cash and cash equivalents for the purpose of Cash Flow Statement comprises cash at bank, cash in hand, fixed deposits with an

original maturity of three months or less.

Q. EARNING PER SHARE Basic earnings per share is computed by dividing the net profit or loss for the year attributable to equity shareholders by the

weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

R. SEGMENT REPORTING The Company’s primary business segments are reflected based on the principal business carried out, i.e. Asset Management

Services, Investment Advisory and Portfolio Management Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.

04 SHARE CAPITAL



AUTHORISED SHARES




TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 26,790,450 26,790,450

(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year






(b) Terms / rights attached to equity sharesThe Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupee. During the year ended March 31, 2017, dividend of `Nil per share (Previous year `305 per share) is recognised as amount distributable to equity shareholders.




(c) Shares held by holding/ultimate holding company

Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:



IDFC Limited (of which 6 shares are held jointly with nominees)

- - 2,009,283 20,092,830

IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)

2,679,045 26,790,450 - -

(d) Details of shareholders holding more than 5% of the equity shares in the Company




2,679,045 100.00% - -

IDFC Limited (of which 6 shares are held jointly with nominees)

- - 2,009,283 75.00%

Natixis Global Asset Management Asia Pte. Limited - - 669,762 25.00%

(e) Proposed dividends on Equity shares:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

The board proposed dividend on equity shares after the balance sheet date

Proposed dividend on equity shares for the year ended on March 31, 2017: `227.50 per share; (Previous year `305 per share)

609,482,738 817,108,725



(`) (`)

(A) SECURITIES PREMIUM ACCOUNT

Opening balance 221,897,167 221,897,167

Add: Premium on issue of equity shares - -

Closing balance 221,897,167 221,897,167

(B) CAPITAL REDEMPTION RESERVE

Opening balance 197,925,000 197,925,000

Add: Transferred from Statement of Profit and Loss - -

Closing balance 197,925,000 197,925,000

(C) GENERAL RESERVE

Opening balance 345,611,000 226,815,000

Add: Transferred on amalgamation - 8,755,000

Add: Transferred from Statement of Profit and Loss - 110,041,000

Closing balance 345,611,000 345,611,000

(D) SURPLUS IN THE STATEMENT OF PROFIT AND LOSS

Opening balance 469,051,389 208,632,826

Add: Transfer on amalgamation - 253,505,356

Profit for the year 972,814,191 1,100,409,929

Less: Appropriations

General reserve - 110,041,000

Proposed dividend on equity shares [ For year ended March 31, 2017: refer note 3 (l); (Previous year `305 per share)]

- 817,108,725

Tax on proposed equity dividend - 166,346,997

Total appropriations - 1,093,496,722

Net surplus in the Statement of Profit and Loss 1,441,865,580 469,051,389

TOTAL 2,207,298,747 1,234,484,556





(`) (`)

Lease equalisation 8,579,072 8,974,174

8,579,072 8,974,174



(`) (`)

Lease equalisation 916,081 1,296,991

Statutory dues payable 23,422,432 27,889,172

Other payables (read with note 31) 9,415,131 24,306,710

33,753,644 53,492,873



(`) (`)

Other short term provisions (read with note 31) 367,114,109 382,523,184

Provision for gratuity (read with note 23) - 14,530,896

Other Provisions

Provision for income tax (Net of advance tax of `1,449,087,248; Previous year `1,016,534,845)

119,533,967 80,205,242

Proposed equity dividend - 817,108,725

Tax on proposed equity dividend - 166,346,996

486,648,076 1,460,715,043

09 TANGIBLE ASSETS



2016

ADJUSTMENT (SEE NOTE

BELOW)

ADDITIONS DISPOSALS BALANCE AS AT MARCH

31, 2017


2016


BELOW)

DEPRECIATION CHARGE FOR THE

YEAR

ON DISPOSALS

BALANCE AS AT MARCH

31, 2017

BALANCE AS AT MARCH

31, 2017

BALANCE AS AT MARCH 31,

2016

(`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`)

Leasehold improvements

82,035,582 - 1,834,505 471,823 83,398,264 78,326,883 - 1,557,283 471,824 79,412,342 3,985,922 3,708,699

Furniture and fixtures

21,890,597 - 603,012 128,196 22,365,413 13,947,601 - 2,232,037 111,460 16,068,178 6,297,235 7,942,996

Office equipment

49,471,952 - 5,271,773 628,312 54,115,413 42,843,327 - 4,170,845 593,094 46,421,078 7,694,335 6,628,625

Computers 59,919,843 - 30,829,661 5,859,065 84,890,439 47,801,165 - 9,409,927 5,843,155 51,367,937 33,522,502 12,118,678

Vehicles 14,043,778 - 9,798,513 717,512 23,124,779 5,288,889 - 4,926,547 589,244 9,626,192 13,498,587 8,754,889

TOTAL 227,361,752 - 48,337,464 7,804,908 267,894,308 188,207,865 - 22,296,639 7,608,777 202,895,727 64,998,581 39,153,887

Previous year 206,334,853 2,434,789 21,958,281 3,366,171 227,361,752 170,464,391 2,095,064 18,254,394 2,605,984 188,207,865 39,153,887

10 INTANGIBLE ASSETS


BALANCE AS AT APRIL

1, 2016


BELOW)

ADDITIONS DISPOSALS BALANCE AS AT MARCH 31,

2017

BALANCE AS AT APRIL

1, 2016


BELOW)

AMORTISATION CHARGE FOR THE

YEAR

ON DISPOSALS


2017

BALANCE AS AT MARCH

31, 2017


2016

(`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`)

Computer software

64,725,334 - 18,889,231 - 83,614,565 55,351,917 - 6,850,125 - 62,202,042 21,412,523 9,373,417

TOTAL 64,725,334 - 18,889,231 - 83,614,565 55,351,917 - 6,850,125 - 62,202,042 21,412,523 9,373,417

Previous year 51,142,157 8,236,301 5,346,876 - 64,725,334 42,100,075 6,917,992 6,333,850 - 55,351,917 9,373,417

TOTAL TANGIBLE & INTANGIBLE ASSETS

292,087,086 - 67,226,695 7,804,908 351,508,873 243,559,782 - 29,146,764 7,608,777 265,097,769 86,411,104 48,527,304

Previous year 257,477,010 10,671,090 27,305,157 3,366,171 292,087,086 212,564,466 9,013,056 24,588,244 2,605,984 243,559,782 48,527,304

Note: Represents assets pertaining to IDFC Investment Advisors Limited transferred on amalgamation.



11 NON-CURRENT INVESTMENTS (TRADE, AT COST UNLESS STATED OTHERWISE)

FACE VALUE (`)


QUANTITY (`) QUANTITY (`)

Unquoted equity shares (fully paid)

Investment in subsidiaries (unquoted)

IDFC Investment Managers (Mauritius) Limited 62 407,290 25,069,224 407,290 25,069,224

25,069,224 25,069,224

Investment in Equity Shares (unquoted)

MF Utilities India Private Limited 1 500,000 500,000 500,000 500,000

500,000 500,000

Investment in Preference Shares (unquoted)

0% Moser Baer Solar Limited (optionally convertible) 10 61,290,000 500,000 61,290,000 500,000

500,000 500,000

Investments in Venture Capital Units (Unquoted)

IDFC Spice Fund 10,000 10,000 10,000 10,000

10,000 10,000

Investment in mutual funds (quoted)

IDFC Yearly Series Interval Fund-Series I-Growth-Direct Plan - - 420,066 5,000,000

IDFC Yearly series Interval Fund-Series II-Growth-Direct Plan 417,199 5,000,000 417,199 5,000,000

IDFC Yearly series Interval Fund-Series III-Growth-Direct Plan - - 416,084 5,000,000

IDFC Nifty ETF 12,072 1,049,767 - -

IDFC Sensex ETF 3,741 1,049,974 - -

7,099,741 15,000,000

Aggregate amount of investments in quoted mutual funds

Cost 7,099,741 15,000,000

Market value (Net asset value) 8,161,198 16,534,167

Investment in mutual funds (unquoted)

IDFC Super Saver Income Fund-Medium Term Plan-Growth-Direct Plan 241,765 5,000,000 241,765 5,000,000

IDFC Dynamic Bond Fund-Growth-Direct Plan 348,029 5,000,000 348,029 5,000,000

IDFC Dynamic Equity Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

IDFC Government Securities Fund-Provident Fund-Growth-Direct Plan 204,552 5,000,000 204,552 5,000,000

IDFC Classic Equity Fund-Growth-Direct Plan 156,504 5,000,000 156,504 5,000,000

IDFC Premier Equity Fund-Growth-Direct Plan 68,914 5,000,000 68,914 5,000,000

IDFC Imperial Equity Fund-Growth-Direct Plan 180,629 5,000,000 180,629 5,000,000

IDFC Equity Fund-Growth-Direct Plan 204,679 5,000,000 204,679 5,000,000

IDFC Arbitrage Fund-Growth-Direct Plan 268,680 5,000,000 268,680 5,000,000

IDFC Sterling Equity Fund-Growth-Direct Plan 137,398 5,000,000 137,398 5,000,000

IDFC Arbitrage Plus Fund-Growth-Direct Plan 216,200 3,540,000 216,200 3,540,000

IDFC Tax Advantage (ELSS) Fund-Growth-Direct Plan 124,904 5,000,000 124,904 5,000,000

IDFC Asset Allocation Fund of Fund-Conservative Plan-Growth-Direct Plan 79,529 1,280,000 79,529 1,280,000

IDFC Asset Allocation Fund of Fund-Moderate Plan-Growth-Direct Plan 215,738 3,720,000 215,738 3,720,000

IDFC Asset Allocation Fund of Fund-Aggressive Plan-Growth-Direct Plan 201,531 3,610,000 201,531 3,610,000

IDFC Monthly Income Plan-Growth-Direct Plan 296,653 5,000,000 296,653 5,000,000

IDFC Nifty Fund-Growth-Direct Plan 98,659 1,620,000 98,659 1,620,000

IDFC Infrastructure Fund-Growth-Direct Plan 423,920 4,970,000 423,920 4,970,000

IDFC Banking Debt Fund-Growth-Direct Plan 414,120 5,000,000 414,120 5,000,000

IDFC Money Manager Fund-Investment Plan-Growth-Direct Plan 228,005 5,000,000 228,005 5,000,000

IDFC All Seasons Bond Fund-Growth-Direct Plan 110,773 2,430,000 110,773 2,430,000

IDFC Ultra Short Term Fund-Growth-Direct Plan 253,691 5,000,000 253,691 5,000,000

IDFC Government Securities Fund-Investment Plan-Growth-Direct Plan 295,440 5,000,000 295,440 5,000,000



FACE VALUE (`)



IDFC Cash Fund-Growth-Direct Plan 2,921 5,000,000 2,921 5,000,000

IDFC Money Manager Fund-Treasury Plan-Growth-Direct Plan 224,028 5,000,000 224,028 5,000,000

IDFC Government Securities Fund-Short Term Plan-Growth-Direct Plan 30,313 612,000 30,313 612,000

IDFC Super Saver Income Fund-Investment Plan-Growth-Direct Plan 143,738 5,000,000 143,738 5,000,000

IDFC Super Saver Income Fund-Short Term Plan-Growth-Direct Plan 171,318 5,000,000 171,318 5,000,000

IDFC Corporate Bond Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

IDFC Balanced Fund-Growth-Direct Plan 500,000 5,000,000 - -

IDFC Credit Opportunities Fund-Growth-Direct Plan 500,000 5,000,000 - -

136,782,000 126,782,000


Cost 136,782,000 126,782,000


Market value of investments in unquoted mutual funds represents the Net Asset Value of the units issued by the mutual funds.

TOTAL NON-CURRENT INVESTMENTS 169,960,965 167,861,224

12 DEFERRED TAX ASSET (NET)


(`) (`) (`) (`)

Deferred tax asset

(a) Provisions: Lease equalisation 3,286,000 3,555,000

(b) Fixed assets: Impact of difference between tax depreciation and depreciation / amortisation charged for the financial reporting 22,199,000 26,032,000

25,485,000 29,587,000

DEFERRED TAX ASSET (NET) 25,485,000 29,587,000



(`) (`) (`) (`)


Advances to employees - 1,586,254 - 1,793,111

Loans and advances to related parties - - - 318,119

Other receivables - - - 538,621

Security deposits 106,080,335 982,975 70,687,205 28,667,725

Capital/supplier advances 633,715 10,779,109 4,437,963 3,806,319

Gratuity receivable (read with note 23) - 915,171 - 1,185,911

Other loans and advances

Advance tax (Net of provision of `846,130,738; Previous year `894,263,262)

42,065,917 - 48,104,974 -

Fringe benefit tax (Net of provision `13,053,367; Previous year `13,053,367)

86,646 - 86,646 -

Balances with government authorities - Service tax credit receivable - 27,712,493 - 16,578,363

Prepaid expenses 2,033,051 17,416,454 2,358,824 40,330,098

150,899,664 59,392,456 125,675,612 93,218,267

11 NON-CURRENT INVESTMENTS (TRADE, AT COST UNLESS STATED OTHERWISE) (continued)



14 CURRENT INVESTMENTS



Investment in mutual funds (unquoted)

IDFC Dynamic Bond Fund-Growth-Direct Plan 50,226,198 816,792,099 62,006,091 965,625,640

IDFC Ultra Short Term Fund-Growth-Direct Plan - - 4,668,264 97,000,000

IDFC Cash Fund-Growth-Direct Plan 240,144.6 471,859,280 305,265 554,380,717

IDFC Super Saver Income Fund-Medium Term Plan-Growth-Direct Plan - - 2,973,715 61,500,000

IDFC Super Saver Income Fund-Short Term Plan-Growth-Direct Plan - - 777,529 20,000,000

IDFC Corporate Bond Fund-Growth-Direct Plan 20,000,000 200,000,000 20,000,000 200,000,000

IDFC Arbitrage Fund-Growth-Direct Plan 27,112,033 500,000,000 - -

1,988,651,379 1,898,506,357


Cost 1,988,651,379 1,898,506,357

Market value (Net asset value) 2,256,667,165 2,105,604,664

Market value of investments in unquoted mutual funds represents the Net Asset Value of the units issued by the mutual funds.

Investment in mutual funds (quoted)

IDFC Fixed Term Plan Series 49-Growth-Direct Plan - - 5,000,000 50,000,000



IDFC Fixed Term Plan Series 66-Growth-Direct Plan 5,836,945 58,369,447 5,836,945 58,369,447




IDFC Yearly series Interval Fund-Series I-Growth-Direct Plan - - 1,379,602 15,000,000

175,869,447 264,585,696

Aggregate amount of investments in quoted mutual funds

Cost 175,869,447 264,585,696


TOTAL CURRENT INVESTMENTS 2,164,520,826 2,163,092,053

15 TRADE RECEIVABLES (UNSECURED, CONSIDERED GOOD)


(`) (`) (`) (`)


Outstanding for a period less than six months - 84,825,111 - 110,788,130

- 84,825,111 - 110,788,130

16 CASH AND BANK BALANCES


(`) (`) (`) (`)




In current accounts - 21,574,863 - 45,707,506

- 21,574,863 - 45,707,506






(`) (`)

Management fees (Net of service tax `423,742,094; Previous year `424,012,003) 2,840,322,398 3,046,932,643

Portfolio management fees 58,286,640 88,252,473

Advisory fees 21,040,557 20,947,468

2,919,649,595 3,156,132,584

18 OTHER INCOME



(`) (`)

Interest on income tax refund 602,165 -

Other interest 559,148 36,693

Net gain/loss on sale of current investments 174,799,297 99,226,323

Profit on sale of fixed assets (net) 322,460 171,742

Miscellaneous income 370,414 387,434

176,653,484 99,822,192




(`) (`)

Salaries and bonus (refer note (a) below) 478,418,351 510,081,591

Contribution to provident and other funds (refer note 23) 45,155,344 35,447,973


TOTAL 537,638,105 563,316,234

(a) Salaries and bonus includes reversal of bonus provision for year ended March 31, 2016 of `17,237,676 (Previous year shortfall of `2,550,000) on account of change in estimate in provision of bonus.

20 OTHER EXPENSES



(`) (`)

Rent 111,100,296 107,156,317

Rates & taxes 7,044,630 2,305,656

Electricity 12,737,360 13,488,675


Equipments 7,541,263 2,587,523

Others 40,143,765 36,432,092

Insurance charges 900,251 1,032,551

Travelling and conveyance 22,025,887 25,349,489


Communication costs 39,786,299 31,378,537

Advertising and publicity 51,728,334 92,179,040

Listing & rating Fees 119,176 2,394,106


Directors' sitting fees 675,000 485,000

Membership and subscription 47,702,795 41,847,720

Computer Software Expenses 23,332,652 13,996,218

Auditors' remuneration (refer note (a) below) 2,389,007 2,291,781





(`) (`)

Scheme issue expenses (refer note (b) below) 48,806,106 60,912,846

Shared service cost (refer note (c) below) 24,006,662 12,229,176

Operational costs (refer note (d) below) 498,278,017 435,806,163

Contribution to IDFC Foundation towards corporate social responsibility expenses 27,464,000 19,408,000

Miscellaneous expenses 9,985,548 10,115,849

1,129,502,712 1,040,287,027




(`) (`)

Audit fee 1,150,000 1,245,000

Tax audit fee 300,000 300,000



2,389,007 2,291,781

(b) Scheme issue expenses are the expenses incurred by the Company towards launching of schemes and plans of IDFC Mutual Fund during the year.

(c) Shared service cost represents reimbursement to holding company/fellow subsidiary under a shared service agreement (Net of recoveries `250,287; Previous year `Nil )

(d) Operational costs amongst other include expenses which are incurred by mutual fund schemes over and above the expense limits prescribed by SEBI, interest charged by bank to the Mutual Fund on account of temporary borrowings or overdrafts and payments made to investors of Mutual Fund on account of delay in payment of redemption proceeds which are borne by the Company.

(e) Expenses incurred on behalf of schemes of IDFC Mutual Fund are charged to the Statement of Profit and Loss unless considered recoverable from schemes.

21 EXPENDITURE IN FOREIGN CURRENCIES (ON ACCRUAL BASIS)



(`) (`)

Advertising - Media 54,529 16,665,846

Foreign travel 77,811 260,312

Staff Training 159,986 -

Other professional fees 2,176,896 9,370,390

22 EARNINGS IN FOREIGN CURRENCIES (ON ACCRUAL BASIS)



(`) (`)

Advisory Fees - Natixis Asia Asset Management Limited (formerly Absolute Asia Asset Management Limited)

21,040,557 20,947,468

23 In accordance with Accounting Standard 15 on ‘Employee Benefits’ the following disclosures have been made:

i. The Company has recognised the following amounts in the statement of profit and loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

Provident fund 17,641,861 16,286,141


Pension fund 2,668,815 2,127,875

Labour welfare fund 1,466 478



ii. The details of the Company’s post - retirement gratuity benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

CHANGE IN THE DEFINED BENEFIT OBLIGATIONS:



Interest cost 5,602,591 4,190,297

Liabilities extinguished on settlement - -

Liabilities assumed on acquisition / (settled on divestiture) 2,439,594 4,252,725

Benefits paid (14,172,845) (7,982,591)

Actuarial Losses / (Gain) 8,866,422 5,598,917

Past Service Cost - -

Closing Defined Benefit Obligation 77,446,995 63,355,202

Unrecognised Past Service Cost - -


FAIR VALUE OF PLAN ASSETS:



Contributions 14,530,896 1,111,414

Benefits paid (14,172,845) (7,982,591)


Unrecognised past service cost - -

Assets acquired on acquisition - 5,448,080


Total actuarial loss / (gain) to be recognised 8,839,574 6,123,688

ACTUAL RETURN ON PLAN ASSETS:



Actual return on plan assets 4,449,939 3,605,160

AMOUNT RECOGNISED IN THE BALANCE SHEET:


Fair value of plan assets at the end of the year (53,632,296) (48,824,306)

Amount recognised in the balance sheet under "Provision for employee benefits" 23,814,699 14,530,896

Amount receivable recognised in the balance sheet under "Loans and advances" (915,171) (1,185,911)

EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS:


Interest cost 5,602,591 4,190,297

Expected return on plan assets (4,423,091) (4,129,931)

Net actuarial loss / (gain) to be recognised 8,839,574 6,123,688

Past Service Cost - -

Loss/(Gains) on Acquisition / Divestiture 2,439,594 (1,195,355)

Expense recognised in the statement of profit and loss under 'Employee benefits expense' 23,814,699 14,530,896

RECONCILIATION OF THE LIABILITY RECOGNISED IN THE BALANCE SHEET:

Opening net Liability 14,530,896 1,111,414


Contribution by the Company (14,530,896) (1,111,414)

Amount recognised in the balance sheet under "Gratuity" 23,814,699 14,530,896

Expected employer's contribution next year 10,000,000 10,000,000





(`) (`) (`) (`) (`)


Plan assets 53,632,296 48,824,306 46,642,243 32,116,168 25,897,310

Surplus/(deficit) (23,814,699) (14,530,896) (1,111,414) (2,713,038) -

Exp. Adj. on Plan Liabilities 4,398,497 5,998,246 2,320,620 3,130,977 (782,789)

Exp. Adj. on Plan Assets 26,848 (524,771) 1,091,871 (753,684) 3,863,873

MARCH 31, 2017 MARCH 31, 2016

(%) (%)

Investment pattern:

Insurer managed funds 100.00 100.00

Principal assumptions:

Discount rate (p.a.) 7.10 8.00

Expected rate of return on assets (p.a.) 7.50 9.00

Salary escalation rate (p.a.) 8.00 8.00

The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.

24 The Company is engaged in the business of providing Asset Management Services to IDFC Mutual Fund, Investment Advisory and Portfolio Management Services. During the year ended March 31, 2017, the Company was engaged in only one business segment and no geographical segment and as such there are no separate reportable segments, as required by Accounting Standard 17 on ‘Segment Reporting’ as notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.

25 RELATED PARTY DISCLOSURESAs per the Accounting Standard 18 on “Related Party Disclosures” the related parties of the Company are as follows:

Names of the related parties where control exists irrespective of whether transactions have been occurred or not:

I. Ultimate Holding Company:

IDFC Limited

II. Holding Company:


III. Subsidiaries:

IDFC Investment Managers (Mauritius) Limited

Names of the related parties with which there are transactions during the year:

IV. Fellow Subsidiaries


IDFC Foundation

IDFC Bank Limited



IDFC Infrastructure Finance Company Limited

V. Key management personnel:

Mr. Vishal Kapoor - Chief Executive Officer (w.e.f. September 14, 2016)

Mr. Kalpen Parekh - Chief Executive Officer (upto September 13, 2016)

Mr. Naval Bir Kumar - Vice Chairperson (upto October 31, 2015)



The nature of transactions carried out with the above related parties in the ordinary course of business are as follows:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

I. Holding Company/Ultimate Holding Company:

IDFC Limited Reimbursement of expenses 35,259,285 2,817,316

Shared service cost paid (net of recovery) 2,938,263 3,125,256

Recovery of expenses / cost of asset 710,809 243,219

II. Subsidiaries:

IDFC Investment Managers (Mauritius) Limited Purchase of equity shares - 16,525,000

III. Fellow Subsidiaries:

IDFC AMC Trustee Company Limited Recovery of expenses 134,236 318,356

IDFC Foundation CSR Contribution 27,464,000 19,408,000

Recovery of expenses 414,111 -

IDFC Bank Limited Reimbursement of expenses 681,792 2,777,150

Shared service cost paid 21,302,000 9,103,920

Recovery of expenses / cost of asset 1,868,449 1,712,397

Balance receivable - 318,119

Current Account Balance 4,634,160 2,680,832

Current Account Balance (Investor Education and Awareness)

3,974,833 3,137,428

IDFC Alternatives Limited Shared Services Cost Recovered 91,771 -

Recovery of expenses / cost of asset 3,260,866 -

IDFC Securities Limited Brokerage Paid 78,313 -

Shared Services Cost Recovered 125,144 -

Recovery of expenses / cost of asset 3,708,127 -

IDFC Infrastructure Finance Company Limited Shared Services Cost Recovered 16,686 -

Recovery of expenses 685,110 -

IV. Key Management Personnel:

Mr. Vishal Kapoor - Chief Executive Officer (w.e.f. September 14, 2016)

Remuneration paid 13,423,281 -

Reimbursement of business expenses 56,584 -

Mr. Kalpen Parekh - Chief Executive Officer (upto September 13, 2016)

Remuneration paid 22,940,271 27,172,934

Reimbursement of business expenses 213,554 42,915

Mr. Naval Bir Kumar - Vice Chairperson (upto October 31, 2015)

Remuneration paid - 34,335,435

Reimbursement of business expenses - 6,939

26 In accordance with Accounting Standard 19 on ‘Leases’ the following disclosures in respect of operating leases are made:

i The Company had taken vehicles for two employees under cancellable operating leases which is included under salaries as follows:

NAME OF THE LESSOR LATEST EXPIRY DATE MARCH 31, 2017 MARCH 31, 2016

(`) (`)

ALD Automotive Private Limited September 2016 - 1,132,044

The total future minimum lease payments under cancellable operating lease for each of the periods is given below:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)




ii. The Company has entered into cancellable as well as non-cancellable leasing arrangements for office premises at various locations in India generally for a period of 36 months. As per the term of the lease all maintenance charges and municipal levies are borne by the lessee.

The total future minimum lease payments under non-cancellable operating lease for each of the periods is given below:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)



The terms of renewal and escalation clauses are those normally prevalent in similar agreements.

27 In accordance with Accounting Standard 20 on ‘Earnings Per Share’:

The basic / diluted earnings per share has been calculated based on the following:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

Net profit after tax 972,814,191 1,100,409,929

Net amount available for equity shareholders 972,814,191 1,100,409,929

Weighted average number of equity shares (Nos.) 2,679,045 2,679,045

Basic and diluted earnings per equity share (`) 363.12 410.75

28 CAPITAL AND OTHER COMMITMENTSEstimated amount of contracts remaining to be executed and not provided for `17,085,540 (Previous year `8,959,646).

29 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

MARCH 31, 2017 MARCH 31, 2016

(`) (`)

(a) Claims not acknowledged as debts in respect of :

i. Reversal of Cenvat credit under protest. 13,033,744 6,481,420

(b) Income Tax demand on Mutual Fund on account of non-payment of tax on income from pass through certificates by the issuing trust.

- 4,860,729

30 Details of Specified Bank Notes (“SBN”) held and transacted during the period 08/11/2016 to 30/12/2016


Closing cash in hand as on 08.11.2016 Nil Nil Nil


(-) Permitted receipts - - -



31 As per information available with the Company, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

32 CORPORATE SOCIAL RESPONSIBILITY (CSR) (a) As per the provisions of the Section 135 of the Companies Act, 2013, the Company is required to contribute `27,463,135

(Previous year `19,407,794) during the financial year towards Corporate Social Responsibility.

(b) The Company has contributed `27,464,000 (Previous year `19,408,000) to IDFC Foundation during the year and recognised as expense in the statement of profit and loss on CSR related activities, which comprise of following:

PARTICULARS YEAR ENDED MARCH 31, 2017 YEAR ENDED MARCH 31, 2016

IN CASH YET TO BE PAID IN CASH

TOTAL IN CASH YET TO BE PAID IN CASH

TOTAL

i. Construction/acquisition of any asset - - - - - -

ii. On purposes other than (i) above 2,746,135 - 2,746,135 19,407,794 - 19,407,794



33 NET DIVIDEND REMITTED IN FOREIGN EXCHANGE

YEAR OF REMITTANCE (ENDING ON) MARCH 31, 2017 MARCH 31, 2016

Period to which it relates April 01, 2015 to April 01, 2014 to

March 31, 2016 March 31, 2015

Number of non-resident shareholders 1 1

Number of equity shares held on which dividend was due 669,762 669,762

Amount remitted (in USD) 3,022,749 2,029,582

Amount remitted (in INR) 204,277,410 130,603,590

34 EMPLOYEE STOCK OPTIONSDuring the year ended March 31, 2017, Employee Stock Option Scheme (‘ESOS’) were granted by IDFC Limited (Ultimate Holding Company) to the eligible employees of the Company. The exercise price of these ESOS was market price, thus no cost has been allocated to the Company.

35 The figures for the previous year have been regrouped wherever necessary, in order to make them comparable to the current year.

IDFC INVESTMENT MANAGERS (MAURITIUS) LTD.

Mr. Sahjahan Ally Nauthoo

Mr. Sevin Chendriah

Ernst & Young

Deutsche Bank

(Mauritius) Limited

C/o Cim Fund Services Ltd

33, Edith Cavell Street

Port Louis, Mauritius

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2017

GENERAL INFORMATION

IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 as a private company limited by

shares and holds a Category 1 Global Business Licence Company issued by the Financial Services Commission. The Company is licenced

to operate as a CIS Manager pursuant to Section 98 of the Securities Act 2005 and the Financial Services (Consolidated Licensing and

Fees) Rules 2008.

The principal activity of the Company is to provide investment management services.

Since last year, the Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously

known as IDFC Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015.

The Company holds standards of corporate governance through awareness of business ethics and supervision of its management team

by the Board of directors.

The main objects and functions of the Board as regards Corporate Governance are to:

¡ determine, agree and develop the Company’s general policy on corporate governance in accordance with the applicable Code of

Corporate Governance;

¡ select candidates for eventual Board appointments; and

¡ review the terms and conditions of all service agreements between the Company and service providers.

The Board is satisfied that it has discharged its responsibilities for the year in respect of Corporate Governance.

THE BOARD OF DIRECTORS

The directors have been selected based on their professional background and expertise to positively contribute to the Board’s activities.

The Board is currently made up of two resident directors.

DIRECTORS

Resident


Mr. Sevin Chendriah

The Board is responsible for directing the affairs of the Company in the best interests of shareholders, in conformity with legal and

regulatory framework, and consistent with its constitution and best governance practices.

THE DIRECTORS’ PROFILE


Mr Nauthoo is a Fellow of the Association of Chartered Certified Accountants - UK and holds a Bachelor of Business Science (Hons)

degree in the field of Accountancy with the University of Mauritius. He is also a Member of the Mauritius Institute of Professional

Accountants and Mauritius Institute of Directors.

He has over 11 years of experience in the global business sector and 2 years of experience in the field of banking and finance. He has

gained wide experience in the structuring, setting up and administration including secretarial, accounting, taxation and compliance of

offshore funds and companies. He serves as director and authorised signatory for a large number of funds/companies administered

by Cim Global Business. He is currently a Senior Manager and prior to joining Cim Global Business, he also worked for 5 years with

International Financial Services Limited.

Mr. Sevin Chendriah

Mr. Chendriah holds a Bsc (Hons) in Management with Finance from the University of Mauritius. He joined Cim Group in 2007 and has

gained wide experience in corporate secretarial, administration, compliance and legal field. He has also been broadly involved in the

structuring, setting-up, taxation and administration of Global Business entities promoted by a wide portfolio of clients, including large

multi-national Companies and high net-worth individuals.

I D F C I N V E S T M E N T M A N A G E R S ( M A U R I T I U S ) L I M I T E D | 2 9 9

CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2017

CONSTITUTION

The Constitution of the Company was adopted on 19 August 2010 and same was subsequently altered on 26 December 2014 to insert a

clause on Arbitration.

BOARD MEETINGS

The Board has at least one scheduled meeting each year during which it:

1. examines all statutory matters;

2. approves the audited financial statements and reviews important accounting issues;

3. reviews the Company’s performance;

4. ensures compliance of the Company with the legislations; and

5. takes note of changes in the legislations which may affect the Company.

In addition, the Board meets whenever necessary to discuss urgent business.

The Board papers are usually sent to the directors one week in advance, except where urgent meetings are convened.

During the year under review, the Board met five times and the table below shows the attendance of directors either physically or by

alternates at meetings held from 01 April 2016 to 31 March 2017:

Directors Attendance at Board

Mr. Sevin Chendriah 5/5

Mr. Sahjahan Ally Nauthoo 5/5

The Board promotes, encourages and expects open and frank discussions at meetings. Board meetings provide a forum for challenging

and constructive debate.

BOARD COMMITTEES

The Board of directors collectively considers the measures in respect of the Code of Corporate Governance issues. Due to the size of the

Board, no sub-committees (Audit Committees, The Corporate Governance Committee, Board Risk Committee, Remuneration Committee

and the Nomination Committee) have been established.

STATEMENT OF REMUNERATION POLICY

Cim Fund Services Ltd is paid USD 8,000 per annum for fee provision of directorship services.

IDENTIFICATION OF KEY RISKS FOR THE COMPANY

The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. The Board confirms

that there is an ongoing process for identifying, evaluating and managing the various risks faced by the Company.

FINANCIAL RISK FACTORS

The financial risk factors have been set out in note 13 of these financial statements.


The related party transactions have been set out in note 12 of these financial statements.

CODE OF ETHICS, HEALTH AND SAFETY AND SOCIAL ISSUES

These issues are not applicable to the Company given the nature of activities of the Company and the fact that the Company has no

employees. The Company is managed under service agreements with third parties detailed in the Corporate Data section.

ENVIRONMENT

Due to the nature of its activities, the Company has no adverse impact on the environment.


COMMENTARY OF DIRECTORS FOR THE YEAR ENDED 31 MARCH 2017

CORPORATE SOCIAL RESPONSIBILITY AND DONATIONS

During the year, the Company has not made any donations.

NATURE OF BUSINESS

The principal activity of the Company is that of a CIS Manager.

AUDITOR’S REPORT AND FINANCIAL STATEMENTS

The auditor’s report is set out on pages 8 to 10 and the statement of profit or loss and other comprehensive income is set out on page 12

of this financial statements.

AUDIT FEES

Audit fees payable to Ernst & Young (Mauritius) for the year amounted to USD 4,800 (excluding VAT and any disbursements).

APPRECIATION

The Board expresses its appreciation and gratitude to all those involved for their contribution during the year.

The directors are pleased to present their commentary, together with the audited financial statements of IDFC Investment Managers

(Mauritius) Ltd. for the year ended 31 March 2017.

STATUS AND PRINCIPAL ACTIVITY

IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 in the Republic of Mauritius and

obtained its Category 1 Global Business Licence on 14 September 2010.

The principal activity of the Company is to provide investment management services. The Company has entered into an investment

management agreement with India Multi-Avenues Fund Limited (previously known as IDFC Focus Fund Limited), a fund incorporated in

Mauritius on 22 May 2015.

RESULTS

The Company’s loss for the year under review is USD 32,623 (2016: loss of USD 34,287).

The directors do not recommend the payment of a dividend for the year under review.

DIRECTORS’ RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS

The Company’s directors are responsible for the preparation and fair presentation of the financial statements, comprising the Company’s

statement of financial position at 31 March 2017, and the statement of profit or loss and other comprehensive income, the statement

of changes in equity and statement of cash flows for the year then ended, and the notes to the financial statements, which include a

summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards

and in compliance with the requirements of the Companies Act 2001.

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International

Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the

directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due

to fraud or error and applying appropriate accounting policies; and making account estimates that are reasonable in the circumstances.

The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the

business will not be a going concern in the year ahead. The Company has enough funds to meet its liabilities and those of the fund in the

coming year.

AUDITORS

The auditors, Ernst & Young, have indicated their willingness to continue in office.


We, Cim Fund Services Ltd, certify, to the best of our knowledge and belief, that we have filed with the Registrar of Companies all such

returns as are required for IDFC Investment Managers (Mauritius) Ltd. under the Companies Act 2001 for the financial year ended

31 March 2017.

For and on behalf of

Cim Fund Services Ltd

Company Secretary

Date: 13 April 2017

SECRETARY’S CERTIFICATE UNDER SECTION 166 (D) OF THE COMPANIES ACT 2001



TO THE MEMBER OF

IDFC INVESTMENT MANAGERS (MAURITIUS) LTD

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of IDFC INVESTMENT MANAGERS (MAURITIUS) LIMITED (the “Company“) set out on pages 11 to 24 which comprise the statement of financial position as at 31 March 2017, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including significant accounting policies.

In our opinion, the financial statements give a true and fair view of, the financial position of IDFC INVESTMENT MANAGERS (MAURITIUS) LIMITED as at 31 March 2017, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The directors are responsible for the other information. The other information comprises the Dynamic information, commentary of the directors and the certificate from the Secretary as required by the Companies Act 2001, but does not include the financial statements and our auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.


Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformaudit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditproceduresthatareappropriateinthecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesandrelateddisclosuresmade by the directors.



• Concludeontheappropriatenessofthedirector’suseofthegoingconcernbasisofaccountingandbasedontheauditevidenceobtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures,andwhetherthefinancial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other matter

This report is made solely for the Company’s member in accordance with Section 205 of the Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s member those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s member for our audit work, for this report, or for the opinions we have formed.


Companies Act 2001

We have no relationship with or interests in the Company other than in our capacity as auditor and dealings in the ordinary course of business.

We have obtained all the information and explanations we have required.

In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.

ERNST & YOUNG ROGER DE CHAZAL, A.C.A.

Ebène, Mauritius Licensed by FRC

Date: April 13, 2017


STATEMENT OF FINANCIAL POSITION as at March 31, 2017

The notes on pages 11 to 17 form an integral part of these financial statements. Independent Auditors’ report on pages 5 to 6.

2017 2016

NOTES USD USD

ASSETS

Current assets

Other receivables 6 75,945 49,355

Prepayments 6a 4,413 3,939

Cash at bank 7 161,193 220,880

TOTAL ASSETS 241,551 274,174


Equity and reserves

Stated capital 8 407,290 407,290

Accumulated losses (175,489) (142,866)

TOTAL EQUITY 231,801 264,424

Current liabilities

Accrued expenses 9 9,750 9,750

TOTAL EQUITY AND LIABILITIES 241,551 274,174

These financial statements have been approved and authorised for issue by the Board of directors on 13 April 2017 and signed on its behalf by:

NAME OF DIRECTORS

Mr. Sahjahan Ally Nauthoo Mr. Sevin Chendriah



STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended March 31, 2017

2017 2016

NOTES USD USD

INCOME - -

EXPENSES

Fees paid on behalf of India Multi-Avenues Fund Limited 26,589 41,055

Receivable from India Multi-Avenues Fund Limited (26,589) (41,055)

Write off of fees paid in respect of funds - 3,500


Audit fees 5,750 5,980

Administration fees 5,000 5,000

Licence and annual registration fees 4,060 4,059

Insurance cover 3,545 3,555

Disbursement 580 490

Bank charges 375 503

TRC renewal fees 700 200

TOTAL EXPENSES 32,623 34,287

Operating loss for the year (32,623) (34,287)

Income tax expense 11 - -

Loss for the year (32,623) (34,287)

Other comprehensive income - -

TOTAL COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX (32,623) (34,287)


STATEMENT OF CHANGES IN EQUITY For the Year Ended March 31, 2017

STATED CAPITAL ACCUMULATED LOSSES TOTAL

USD USD USD

At 01 April 2015 157,290 (108,579) 48,711

Issue of shares (note 8) 250,000 - 250,000

Loss for the year - (43,543) (43,543)

Other comprehensive income for the year - - -

Total comprehensive loss for the year - (43,543) (43,543)

At 31 March 2016 407,290 (142,866) 264,424

Loss for the year - (32,623) (32,623)

Other comprehensive income for the year - - -

Total comprehensive loss for the year - (32,623) (32,623)

At 31 March 2017 407,290 (175,489) 231,801



STATEMENT OF CASH FLOWS For the Year Ended March 31, 2017

2017 2016

NOTE USD USD


Loss before tax (32,623) (34,287)

Adjustments to reconcile loss before tax to net cash flows: - 3,500

Working capital adjustments:

Net change other receivables and prepaid expenses (27,064) (41,046)

Net change in accrued expenses - 230

Net cash flows used in operating activities (59,687) (71,603)

FINANCING ACTIVITIES

Proceeds from issue of shares 8 - 250,000

NET CASH FLOW FROM FINANCING ACTIVITIES - 250,000

Net change in cash and cash equivalents (59,687) 178,397

Cash and cash equivalents at 01 April 220,880 42,483

CASH AND CASH EQUIVALENTS AT 31 MARCH 161,193 220,880

Note: Cash and cash equivalents comprise cash at bank.




01. CORPORATE INFORMATIONIDFC Investment Managers (Mauritius) Ltd. (the “Company”) is a private company limited by shares, incorporated in the Republic of Mauritius on 13 September 2010, with registered address at C/o Cim Fund Services Ltd, 33, Edith Cavell Street, Port Louis, Mauritius. The Company holds a Category 1 Global Business Licence and is regulated by the Financial Services Commission (FSC).

The principal activity of the Company is to provide investment management services.

The Company provides investment management services to India Multi-Avenues Fund Limited (previously known as IDFC India Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015, to which the Company provides investment management services.

02. BASIS OF PREPARATIONThe financial statements of the Company are prepared under the historical cost convention.

2.1 STATEMENT OF COMPLIANCE

The financial statements are prepared in accordance with and comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

03. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these financial statements are set out below.

Foreign currency transactions

Functional and presentation currency

The Company’s functional currency is the USD, which is the currency of the primary economic environment in which it operates. The Company’s performance is evaluated and its liquidity is managed in USD. Therefore, the USD is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The Company’s presentation currency is also in USD.

Transactions and balances

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities are translated at the spot rate of exchange ruling at the reporting date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition gain or loss on change in fair value of the item (i.e. translation differences are recognised in other comprehensive income or profit or loss).

Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial assets at initial recognition.

Financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

The Company’s financial assets include cash at bank and other receivables.

Subsequent measurement


Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in profit or loss. The losses arising from impairment are recognised in profit or loss.

Impairment

At each reporting date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net realisable price and value in use, that is the present value of estimated future cash flows expected to arise from continuing to use the assets and from its disposals at the end of its useful life.



An impairment loss is recognised as an expense in profit or loss immediately, unless the asset is carried at revalued amount in which case the impairment loss is recognised against the revaluation or fair value reserve for the assets to the extent that the impairment loss does not exceed the amount held in the revaluation or fair value reserve for that same asset. Any excess is recognised immediately in profit or loss.


Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of directly attributable transaction costs.

The Company’s financial liabilities include accrued expenses only.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in statement of comprehensive income when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are integral part of the EIR. The EIR amortisation is included in finance costs in the statement of comprehensive income.

Derecognition of financial instruments

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a company of similar financial assets) is derecognised when:

- the rights to receive cash flows from the asset have expired; or

- the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.


A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability is substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

Stated capital

Ordinary shares are classified as equity, net of costs directly related to the issue of the shares.

Provision

A provision is recognised when and only when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow embodying economic benefits will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, and sales taxes or duty.

- Management fees are accounted for on an accrual basis.



Related parties transactions

Parties are considered to be related to the Company if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operating decisions, or vice versa, or where the Company is subject to common control or common significant influence. Related parties may be individuals or other entities.

Expenses

Expenses are accounted for on an accrual basis.

Taxation

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Deferred taxation

Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax.

The principal temporary differences arise from provisions for bad debts and unrealised exchange differences. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

04. (A) CHANGES IN ACCOUNTING POLICIESThe accounting policies adopted are consistent with those of the previous financial year except for the following new and amended IFRS and IFRIC interpretations adopted in the year commencing 01 April 2016:

EFFECTIVE FOR ACCOUNTING PERIOD BEGINNING ON OR

AFTER

Standards

IFRS 14 Regulatory Deferral Accounts 01 January 2016

Amendments

Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) 01 January 2016

Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38) 01 January 2016

Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) 01 January 2016

Equity Method in Separate Financial Statements (Amendments to IAS 27) 01 January 2016

Annual Improvements 2012-2014 Cycle 01 January 2016

Disclosure Initiative (Amendments to IAS 1) 01 January 2016

Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28) 01 January 2016

Where the adoption of the standard or interpretation or improvement is deemed to have an impact on the financial statements or performance of the Company, its impact is described below:

Disclosure Initiative (Amendments to IAS 1)

The amendment address perceived impediments to preparers exercising their judgement in presenting their financial reports by making the following changes:

¡ clarification that information should not be obscured by aggregating or by providing immaterial information, materiality

considerations apply to the all parts of the financial statements, and even when a standard requires a specific disclosure, materiality

considerations do apply;

¡ clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and

additional guidance on subtotals in these statements and clarification that an entity’s share of OCI of equity-accounted associates

and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified

to profit or loss;

¡ additional examples of possible ways of ordering the notes to clarify that understandability and comparability should be considered

when determining the order of the notes and to demonstrate that the notes need not be presented in the order so far listed in

paragraph 114 of IAS 1.

There has been no impact following the adoption of this standard on the financial statements for the current year as the notes and policies already included in the financial statements provide good understandability and comparability to the users.



04. (B) ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVEThe following standards, amendments to existing standards and interpretations were in issue but not yet effective. They are mandatory for accounting periods beginning on the specified dates, but the Company has not early adopted them:

New or revised standards and interpretations:

EFFECTIVE FOR ACCOUNTING PERIOD BEGINNING ON OR

AFTER

New or revised standards

IFRS 9 Financial Instruments 01 January 2018

IFRS 15 Revenue from Contracts with Customers 01 January 2018

IFRS 16 Leases 01 January 2019

AMENDMENTS EFFECTIVE DATE DEFERRED INDEFINITELY

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12) 01 January 2017

Disclosure Initiative (Amendment to IAS 7) 01 January 2017

Annual Improvements 2014 – 2016 Cycle 01 January 2017

IFRIC 22 Foreign Currency Transactions and Advance Consideration 01 January 2018

Transfers of Investment Property (Amendments to IAS 40) 01 January 2018

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) 01 January 2018

Clarifications to IFRS 15 ‘Revenue from Contracts with Customers’ 01 January 2018

Applying IFRS 9 ‘Financial Instruments’ with IFRS 4 ‘Insurance Contracts’ (Amendments to IFRS 4) 01 January 2018

Annual Improvements 2014 – 2016 Cycle - 01 January 2017

An assessment of the standards, amendments to existing standards and interpretations that may impact on the Company’s financial statements when they become effective, given existing operations and financial position, is as follows:

Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12)

The amendments provide additional guidance on the existence of deductible temporary differences, which depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset.

The amendments also provide additional guidance on the methods used to calculate future taxable profit to establish whether a deferred tax asset can be recognised. No impact is expected given that the Company did not recognize any deferred tax asset in previous years and is not expecting to recognise in the future.

The amendments apply for annual periods beginning on or after 01 January 2017 and early application are permitted.

These amendments are not expected to have any impact on the Company.

IAS 7 Disclosure Initiative (Amendments to IAS 7) – effective 01 January 2017

The amendments to IAS 7 Statement of Cash Flows are part of the IASB’s Disclosure Initiative and require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide comparative information for preceding periods. These amendments are effective for annual periods beginning on or after 01 January 2017, with early application permitted.

The Company is still evaluating the effect of these new or revised standards and interpretations on the presentation of its financial statements.

05. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONSThe preparation of the Company’s financial statements requires management to make judegments, estimates and assumptions that affect the amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future.



Judgements

Recoverability of receivable from India Multi Avenues Fund (‘IMAFL)

The Company is the promoter of a new fund namely India Multi-Avenues Fund Limited (‘‘IMAFL”) (previously known as IDFC India Focus Fund Limited). The Company also acts as the Investment Manager of IMAFL. IMAFL will invest in a portfolio of securities comprising principally of shares, depository receipts, convertible bonds, debt securities, derivative instruments and units of Mutual Funds worldwide.

However, given that India Multi-Avenues Fund Limited has not yet started trading, the Company is currently incurring all its expenses on its behalf. The directors have made an assessment of the recoverability of the receivable from IMAFL. IDFC Investment Manager (Mauritius) Ltd has entered into an agreement with Greenshoots capital UK Ltd to look for potential investors for IMAFL and have firm intention that the IMAFL will start generating the revenue within the next financial year. The Directors believe that there is no indication of impairment at this stage.

Determination of functional currency

The determination of the functional currency of the Company is important since recording of transactions and exchange differences arising there from are dependent on the functional currency selected. As described in note 3, the directors have considered those factors described therein and have determined that the functional currency of the Company in the USD.

06. OTHER RECEIVABLES

2017 2016

USD USD

Amount receivable from India Multi-Avenues Fund Limited fund (note 12a) 75,945 49,355

(a) PREPAYMENTS

- Professional indemnity cover 3,242 2,768

- Activity licence fees 500 500

- Financial Services Commission licence fees 438 438

- Annual registration fees 233 233

4,413 3,939

07. CASH AT BANK

2017 2016

USD USD

Cash at bank 161,193 220,880

08. STATED CAPITAL

NO. OF SHARES 2017 2016

2017 2016 USD USD

At 01 April 407,290 157,290 407,290 157,290

Issue - 250,000 - 250,000

At 31 March 407,290 407,290 407,290 407,290

09. ACCRUED EXPENSES

2017 2016

USD USD

Audit fees 5,750 5,750

Director fees 2,000 2,000

Administration fees 1,250 1,250

MLRO fees 750 750

9,750 9,750

10. MANAGEMENT AND ADVISORY FEES

(i) Management fees

The Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously known as IDFC India Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015. During the year under review, the fund has not yet started its trading activities and as such no management fees have been paid.



(ii) Advisory fees

The new fund namely India Multi-Avenues Fund Limited, has not yet started its trading activities and as such no advisory fees have been paid during the year under review.

11. TAXATIONThe Company, being the holder of a Category 1, Global Business Licence, is liable to income tax in Mauritius on its taxable profit arising from its world-wide income at the rate of 15%. The Company’s foreign sourced income is eligible for a foreign tax credit which is computed as the lower of the Mauritian tax and the foreign tax on the respective foreign sourced income. The foreign tax for a GBL1 company is based on either the foreign tax charged by the foreign country or a presumed amount of foreign tax: the presumed amount of foreign tax is based on 80% of the Mauritian tax on the relevant foreign sourced income.

Capital gains are outside the scope of the Mauritian tax net while trading profits made by the Company from the sale of shares are exempt from tax. At 31 March 2017, the Company had tax losses of USD 151,667 (2016: USD 119,044).

A numerical reconciliation between accounting loss and tax charge is shown below:

(a) Statement of comprehensive income:

2017 2016

USD USD

Loss for the year (32,623) (34,287)

Add: Non allowable expenses 3,500

Tax losses (32,623) (30,787)

Loss brought forward (119,044) (88,257)

Loss carried forward (151,667) (119,044)

The tax losses are available for set off against future taxable profit of the Company as follows:

TAX LOSS AT: CARRIED FORWARD UP TO: USD

31 March 2013 31 March 2018 (25,228)

31 March 2014 31 March 2019 (31,655)

31 March 2015 31 March 2020 (31,374)

31 March 2016 31 March 2021 (30,787)

31 March 2017 31 March 2022 (32,623)

TOTAL: (151,667)

12. RELATED PARTY DISCLOSURESThe Company had the following related party transactions during the year.

NAME OF RELATED COMPANY NATURE OF TRANSACTIONS

RELATIONSHIP 2017 2016

Expenses paid on behalf IMAFL

Investment Manager USD USD

(a) India Multi-Avenues Fund Limited

At 01 April 49,355 8,300

Additions during the year 26,589 41,055

At 31 March 75,945 49,355

(b) Cim Fund Services Ltd

Administration fees Professional (including director fees)

3,580 16,580 13,000

13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Fair values

The carrying amounts of cash at bank, other receivables and accrued expenses approximate their fair values.

Financial risk factors

The Company’s activities expose it to a variety of financial risks such as market risk, credit risk, interest rate risk, foreign exchange risk, price risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.



Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest rate risk

The Company’s financial assets are non-interest bearing. As a result, the Company is not subject to any interest rate risk.

Foreign exchange risk

The Company has no exposure to currency risk as all its financial assets and liabilities are in USD.

Credit risk

The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets which potentially subject to the Company to concentrations of credit risk consist principally of bank balances. Cash at bank are held in reputable financial institutions. Accordingly, the Company has no significant concentration of credit risk. The maximum exposure to credit risk assisting from default of the counterpart, with a maximum exposure equal to the carrying amount of these instruments.

The risk of default for the amount receivable from related company is minimal as the IMAFL will be launching its activities soon and will be able to repay its debt.

The maximum exposure to credit risk at the reporting date was:

2017 2016

USD USD

Amount receivable from India Multi –Avenues Fund Limited 75,945 49,355


237,138 270,235

Liquidity risk

The Company maintains and manages liquidity risk through active monitoring of operating cash flows and availability of funding. At the year end, the directors did not consider there to be any significant liquidity risk. Residual and discounted contractual maturities of financial liabilities are presented below:

2017

ON DEMAND TOTAL

USD USD


2016

ON DEMAND TOTAL

USD USD


14. CAPITAL RISK MANAGEMENTAs per Regulation 38 of the Securities (Collective Investment Schemes and Closed-End Funds) Regulations 2008, a CIS Manager holding a licence issued by the Financial Services Commission is required to maintain a minimum stated unimpaired capital of at least Mauritian Rupees 1 million or the equivalent amount.

As at 31 March 2017, the Company’s minimum stated unimpaired capital has been met.

15. IMMEDIATE AND ULTIMATE HOLDING COMPANYThe directors consider IDFC Asset Management Company Limited, a Company incorporated in India, as the immediate and ultimate holding company.

16. COMMITMENTS AND CONTINGENCIESThere are no commitments and contingencies.

17. EVENTS AFTER REPORTING DATEThere have been no material events after the reporting date which would require disclosure or adjustment to the financial statements for year under review.

IDFC AMC TRUSTEE COMPANY LIMITED

U69990MH1999PLC123190


Mr. Nityanath Ghanekar

Mr. Bharat Raut

Mr. Sridar Venkatesan

Mr. Uday Phadke

Mr. Geoffroy Sartorius

(Till March 20, 2017)

S. R. Batliboi & Co. LLP


IDFC Bank Limited

One Indiabulls Centre,

6th Floor, Jupiter Mills Compound,

841, Senapati Bapat Marg,

Elphinstone Road (West)

Mumbai 400 013

Tel +91 22 6628 9999

Fax + 91 22 2421 5051

Website www.idfcmf.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD’S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Seventeenth Annual Report together with the audited financial statements for the financial year ended March 31, 2017.


(AMOUNT IN `)

PARTICULARS FOR THE PERIOD ENDED MARCH 31, 2017


Total Income 1,801,110 1,202,513


Profit before Tax 607,766 107,108

Less: Provision for Tax 183,480 33,100

Profit after Tax 424,286 74,008

COMPANY’S AFFAIRS

The Company is the Trustee to the schemes of IDFC Mutual Fund (“IDFC MF”). The Assets under Management of IDFC MF were ` 55,383.40 crore (excluding Fund of Funds Schemes) as on March 31, 2017 as against ` 51,448.31 crore as on March 31, 2016.

NEW SCHEME LAUNCHES:

During FY17, below schemes were launched

1. IDFC Nifty Exchange Traded Fund

2. IDFC Sensex Exchange Traded Fund

3. IDFC Balanced Fund

4. IDFC Credit Opportunities Fund





DIVIDEND



On March 20, 2017, IDFC discontinued association with Natixis and 12,501 equity share of IDFC AMC Trustee held by Natixis Global Asset Management Asia Pte. Ltd were transferred to IDFC Financial Holding Company Limited (“IDFC FHCL”), thereby making IDFC AMC Trustee a wholly owned subsidiary of IDFC FHCL.

ALTERATION OF ARTICLES OF ASSOCIATION

The Articles of Association of the Company as currently in force were adopted by the Company at its extra ordinary general meeting held on December 08, 2011 after having an association with Natixis Global Asset Management by executing Share Subscription and Purchase Agreement and Shareholders Agreement. During FY17, the same association was discontinued and the aforesaid agreements were amended accordingly.

Further, the Existing Articles of Association of the Company were referring to the Companies Act, 1956 which was debarred and was replaced with the Companies Act, 2013. The references to specific sections of the erstwhile Companies Act, 1956 in the existing Articles of Association may no longer be in conformity with the Companies Act, 2013. Considering discontinuation of association with Natixis and that substantive sections of the Companies Act which deal with the general working of the companies stand notified, The Board of Directors of the Company at its meeting held on April 24, 2017, recommended the amendment of the existing Articles of Association to the Shareholders at the ensuing AGM for aligning the Articles with the provisions of Companies Act, 2013 including the Rules framed thereunder and adoption of specific sections from Table “F” to Schedule I to the Companies Act, 2013 which sets out the model articles of association for a company limited by shares.



PUBLIC DEPOSITS





There was no income or expenditure in foreign currency during the period under review.

I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 1 7

BOARD’S REPORT


Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed as per Section 134(3)(m) are not applicable and hence not given.

DIRECTORS

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar (DIN: 03055561) would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Mr. Sunil Kakar as Director at the ensuing AGM.

Mr. Geoffroy Sartorius (DIN: 03536833) resigned as a Director w.e.f. March 20, 2017.

The Board places on record sincere appreciation for services rendered by him during their tenure.

At the Extra ordinary General Meeting of the Company held on December 19, 2014, Mr. Bharat Raut and Mr. Sridar Venkatesan were appointed as Independent Directors of the Company to hold office from the conclusion of that General Meeting till the conclusion of the 17th Annual General Meeting of the Company to be held for the FY17 i.e. ensuing AGM. As per the provisions of Section 149(10) & (11) of the Companies Act, 2013, Independent Directors can be appointed for another term, if the same is approved by the shareholders by way of Special Resolution. Considering the valuable contributions and continued association of Mr. Bharat Raut and Mr. Sridar Venkatesan, the Board proposed to reappoint them as IDs of the Company for a period of two years from the conclusion of the ensuing AGM till the conclusion of 19th AGM to be held for FY19. They fulfill the conditions specified in the Companies Act, 2013 and the Rules made thereunder and are Independent of the Management. In the opinion of the Board, they are persons of integrity and have the necessary knowledge, experience and expertise for being reappointed as IDs. Mr. Bharat Raut and Mr. Sridar Venkatesan shall not be liable to retire by rotation. The Members are requested to consider reappointment of Mr. Bharat Raut and Mr. Sridar Venkatesan at ensuing AGM.


The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.


During the year, Eight Board meetings were held on April 27, 2016, June 15, 2016, July 21, 2016, September 7, 2016, October 26, 2016, December 21, 2016, January 24, 2017 and March 29, 2017. The gap between any two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.

Attendance details of Board of Directors for the Board Meetings held during FY17 are given below.



Mr. Sunil Kakar 03055561 Chairperson 8 8

Mr. Nityanath Ghanekar 00009725 Independent Director 8 8

Mr. Bharat Raut 00066080 Independent Director 8 6

Mr. Sridar Venkatesan 02241339 Independent Director 8 6

Mr. Uday Phadke 00030191 Independent Director 8 8

Mr. Geoffroy Sartorius1 03536833 Nominee of NATIXIS Global Asset Management 7 21 Resigned as Director w.e.f. March 20, 2017

AUDIT COMMITTEE

During the year, Four Audit Committee meetings were held on April 27, 2016, July 21, 2016, October 26, 2016 and January 24, 2017. The gap between two meetings was within the limit of the period prescribed under the Companies Act, 2013.

Attendance details of Directors for the Audit Committee Meetings held during FY17 are given below.



Mr. Nityanath Ghanekar Independent Director Chairperson 4 4

Mr. Bharat Raut Independent Director Member 4 4

Mr. Sunil kakar1 Nominee of IDFC Member NA NA

Mr. Geoffroy Sartorius2 Nominee of NATIXIS Global Asset Management Member 4 2

1 Appointed as a Member w.e.f. April 17,20172 Resigned as Director w.e.f. March 20, 2017


SEPARATE MEETING OF INDEPENDENT DIRECTORSDuring the year, a separate meeting of Independent Directors was held on April 27, 2016. All Independent Directors attended the said meeting.

BOARD EVALUATIONPursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was prepared and circulated to the Board for Annual evaluation. The Directors discussed and requested for some changes.

The Company is in the process of designing a simplified Questionnaire based on the inputs/views from some of the Independent Directors that would cover the essence of evaluation. For this purpose the Company may engage an External Agency to carry out the entire Annual Board Evaluation process independently. The said process is expected to be completed in due course.

STATUTORY AUDITORSS.R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration Number- 301003E, a member firm of Ernst & Young Global Limited, were Statutory Auditors of the Company for FY17. There are no qualifications or observations or other remarks made by the Statutory Auditors in their report for FY17.

S.R. Batliboi & Co. LLP have expressed their unwillingness to act as a Statutory Auditors of the Company after conclusion of ensuing AGM. Audit Committee and Board of Directors of the Company at their respective meetings held on April 24, 2017 have recommended the appointment of Price Waterhouse & Co Chartered Accountants LLP, (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of S.R. Batliboi & Co. LLP, Chartered Accountants, for a period of five years from the conclusion of the ensuing Annual General Meeting (AGM) of the Company to be held for FY17 till the conclusion of the 22nd AGM of the Company to be held for FY22, subject to approval of the Shareholders of the Company at the ensuing AGM and subsequent ratification on annual basis.


PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013In all related party transactions that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. IDFC Group has always been committed to good corporate governance practices, including matters relating to Related Party Transactions.

RISK MANAGEMENTThe Members of the Audit Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.

MATERIAL CHANGES/ COMMITMENTSThere have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2017 till the date of this report.

INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORSThere have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/COURTS/TRIBUNALThere were no significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.

EXTRACT OF ANNUAL RETURNThe extract of Annual Return in the prescribed Form No. MGT 9 is appended as Annexure I.

DIRECTORS’ RESPONSIBILITY STATEMENTThe Directors confirm that:

(a) in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2017 and of the profit and loss of the Company for that period;

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

(d) the Directors had prepared the annual financial statements on a going concern basis; and

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

ACKNOWLEDGEMENTSThe Board places on record its gratitude to the Securities and Exchange Board of India, Reserve Bank of India, Association of Mutual Funds of India, other regulatory authorities and institutions and Investors in the Mutual Fund schemes for their continued guidance and support.

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, IDFC FHCL and other group companies.




BOARD’S REPORT


AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2016



i) CIN U69990MH1999PLC123190


iii) Name of the Company IDFC AMC TRUSTEE COMPANY LIMITED


v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra. Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051



TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011. Tel.: +91 22 6656 8484



SR. NO.



1. Trustee of Mutual Fund 6619 100


SR. NO.


% OF SHARES HELD

APPLICABLE SECTION


2 IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)





% CHANGE DURING



SHARES

A. Promoter

(1) Indian

Bodies Corp. 37,493 6 37,499 75 49,994 6 50,000 100 25

Sub-total (A) (1):- 37,493 6 37,499 75 49,994 6 50,000 100 25

(2) Foreign

Bodies Corp. 12,501 NIL 12,501 25 NIL NIL NIL NIL (25)

Sub-total (A) (2):- 12,501 NIL 12,501 25 NIL NIL NIL NIL (25)

Total shareholding of Promoter (A) = (A)(1)+(A)(2)

49,994 6 50,000 100 49,994 6 50,000 100 NIL








SR. NO.



NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/



DURING THE YEAR


37,499 75 NIL 50,000 100 NIL 25

TOTAL 37,499 75 NIL 50,000 100 NIL 25

(iii) Change in Promoters’ Shareholding:

SR. NO.

SHAREHOLDING AT THE BEGINNING OF THE YEAR CUMULATIVE SHAREHOLDING DURING THE YEAR



1 At the beginning of the year

37,499 75 37,499 75

2 Date wise Increase in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):

On March 20, 2017, 12,501 equity share of

IDFC AMC Trustee held by Natixis Global Asset Management Asia Pte.

Ltd were transferred to IDFC Financial Holding

Company Limited

25 On March 20, 2017, 12,501 equity share of

IDFC AMC Trustee held by Natixis Global Asset Management Asia Pte.

Ltd were transferred to IDFC Financial Holding

Company Limited

25

3 At the end of the year 50,000 100 50,000 100


NOT APPLICABLE


V. INDEBTEDNESS





SR. NO.


SUNIL KAKAR

GEOFFROY SARTORIUS

BHARAT RAUT SRIDAR VENKATESAN

NITYANATH GHANEKAR

UDAY PHADKE


Fee for attending board /committee meetings 250,000 150,000 325,000 225,000 950,000

TOTAL (1) 250,000 150,000 325,000 225,000 950,000

2. Other Non-Executive Directors NIL NIL NIL

TOTAL (B) = (1 + 2) NIL NIL 250,000 150,000 325,000 225,000 950,000

Overall ceiling as per the Act Refer Note

Note: Sitting fees paid to Directors is within the overall Ceiling limit as prescribed under the Companies Act, 2013.






TO THE MEMBERS OF IDFC AMC TRUSTEE COMPANY LIMITED


We have audited the accompanying financial statements of IDFC AMC Trustee Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2017, its profit, and its cash flows for the year ended on that date.


1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;



(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” to this report;

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:



iii. As at March 31, 2017 there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. As per books of accounts of the Company and as represented by the management of the Company, the Company did not have cash balance as on November 8, 2016 and December 30, 2016 and has no cash dealings during this period.

For S.R. Batliboi & Co. LLPChartered AccountantsICAI Firm Registration Number: 301003E/E300005




ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT

Annexure referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date Re: IDFC AMC Trustee Company Limited

(i) According to the information and explanations given to us, there are no immovable properties, included in property, plant and equipment/ fixed assets of the company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the Company.

(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable and hence not commented upon.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the services of the Company.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including income-tax, service tax, cess and other material statutory dues applicable to it. The provisions relating to employees’ state insurance, provident fund, sales-tax, duty of custom, duty of excise, value added tax, are not applicable to the Company.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, custom duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of income-tax, sales-tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of any dispute.

(viii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders or government.

(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud on or by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the provisions of section 197 read with Schedule V to the Act is not applicable to the company and hence reporting under clause 3(xi) are not applicable and hence not commented upon.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.

(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.





ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE A TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF IDFC ASSET MANAGEMENT COMPANY LIMTED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

To the Members of IDFC AMC Trustee Company Limited

We have audited the internal financial controls over financial reporting of IDFC AMC Trustee Company Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on [the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, [based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.









NOTES ` ` `



(a) Share capital 4 500,000 500,000

(b) Reserves and surplus 5 952,049 527,763

1,452,049 1,027,763


(a) Other long-term liabilities 6 30,000 30,000

Current liabilities

(a) Other current liabilities 7 13,936 4,037

(b) Short-term provisions 8 87,669 371,425

101,605 375,462

TOTAL 1,583,654 1,433,225

ASSETS

Non-current assets

(a) Long-term loans and advances 9 86,370 229,738

Current assets

(a) Trade receivables 10 517,500 114,500

(b) Cash and bank balances 11 956,368 1,084,076

(c) Short-term loans and advances 9 23,416 4,911

1,497,284 1,203,487

TOTAL 1,583,654 1,433,225





For and on behalf of the Board of Directors of



Nityanath GhanekarDirector

Bharat S. RautDirector






NOTES ` `

I INCOME

Revenue from operations

Trusteeship fees 1,800,000 1,200,000

Other income 12 1,110 2,513

TOTAL INCOME (I) 1,801,110 1,202,513

II EXPENSES

Other expenses 13 1,193,344 1,095,405


III PROFIT BEFORE TAX (I - II) 607,766 107,108

IV TAX EXPENSE

Current tax 187,800 33,100

Adjustment of tax relating to earlier periods (4,320) -

TOTAL TAX EXPENSE (IV) 183,480 33,100

V PROFIT AFTER TAX (III - IV) 424,286 74,008

Basic and diluted earnings per equity share (Nominal value of share `10) 16 8.49 1.48















` ` `

CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 607,766 107,108


(Increase)/decrease in loans and advances (short-term) (18,505) 21,956

(Increase)/decrease in trade receivables (403,000) (35,848)

Increase/(decrease) in current liabilities (270,189) 249,358

(691,694) 235,466

Cash generated from/(used in) operations (83,928) 342,574

Direct taxes paid (net of refund received) (43,780) (57,163)

Net cash flow from operating activities (A) (127,708) 285,411

Net cash flow from investing activities (B) - -

Net cash flow from financing activities (C) - -

Net increase/(decrease) in cash and cash equivalents (A + B + C) (127,708) 285,411

Cash and cash equivalents as at beginning of the year (refer note 11) 1,084,076 798,665

Cash and cash equivalents as at end of the year (refer note 11) 956,368 1,084,076

(127,708) 285,411











01 NATURE OF OPERATIONSIDFC AMC Trustee Company Limited (‘the Company’) is a public limited company, incorporated in India and regulated by The Securities Exchange Board of India (SEBI).

During the year, IDFC Financial Holding Company Limited has acquired the entire shareholding of Natixis Global Asset Management Asia Pte. Ltd., Singapore in IDFC AMC Trustee Company Limited with effect from March 20, 2017.

02 BASIS OF PREPARATIONThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the and the Companies (Accounting Standards) Amendment Rule, 2016 and applicable guidelines issued by SEBI. The financial statements have been prepared on the accrual basis under the historical cost convention. The accounting policies followed in the preparation of financial statements are consistent with those followed in the previous year.


A. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

B. REVENUE RECOGNITION

¡ Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

¡ Income from trusteeship services is recognised at price agreed in accordance with the arrangement with the IDFC Mutual Fund.

C. PROVISIONS

¡ A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.

D. INCOME TAX

¡ Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961, enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.

¡ Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing

differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which

such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all

deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against

future taxable profits.

E. CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

F. EARNING PER SHARE

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.



G. SEGMENT REPORTING

The Company’s primary business segments are reflected based on the principal business carried out, i.e. Trusteeship Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.

04 SHARE CAPITAL



AUTHORISED SHARES




TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL

500,000 500,000

(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year



Outstanding at the beginning of the year 50,000 500,000 50,000 500,000


Outstanding at the end of the year 50,000 500,000 50,000 500,000

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share.


(c) Shares held by holding/ultimate holding company

Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:




50,000 500,000 37,499 374,990

(d) Details of shareholders holding more than 5% of the equity shares in the Company




50,000 100.00% 37,499 75.00%

Natixis Global Asset Management Asia Pte. Limited - - 12,501 25.00%





(`) (`)

SURPLUS IN THE STATEMENT OF PROFIT AND LOSS

Opening balance 527,763 453,755

Add: Profit for the year 424,286 74,008

Closing balance 952,049 527,763



(`) (`)

Other payables - Corpus 30,000 30,000

TOTAL 30,000 30,000



(`) (`)

Statutory dues payable 13,936 4,037

TOTAL 13,936 4,037



(`) (`)

Provision for income tax (Net of advance tax of `145,000; Previous year `231,132) 42,800 46,468

Other short term provisions (read with note 17) 44,869 324,957

TOTAL 87,669 371,425



NON-CURRENT PORTION

CURRENT MATURITIES

NON-CURRENT PORTION

CURRENT MATURITIES

(`) (`) (`) (`)

Balances with government authorities - Service tax credit receivable

- 23,416 - 4,911

Advance tax (Net of provision `6,492; Previous year `150,600)

86,370 - 229,738 -

TOTAL 86,370 23,416 229,738 4,911

10 TRADE RECEIVABLES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Outstanding for a period less than six months 517,500 114,500

TOTAL 517,500 114,500



(`) (`)


Balances with banks: In current accounts 956,368 1,084,076

TOTAL 956,368 1,084,076



12 OTHER INCOME



(`) (`)

Interest on income tax refund 1,110 2,513

TOTAL 1,110 2,513

13 OTHER EXPENSES



(`) (`)

Travelling and conveyance 115,600 134,823

Printing, stationery and postage - 1,890


Directors' sitting fees 1,000,000 590,000

Statutory Notice - 9,804


Meeting and other expenses 19,636 187,844

Auditors' remuneration (refer note (a) below) 33,410 31,906

Profession tax paid 2,500 2,500

TOTAL 1,193,344 1,095,405




(`) (`)

Audit fee 18,000 15,000



TOTAL 33,410 31,906

14 The Company is engaged in the business of providing trusteeship services. As such there is no separate reportable primary business segment or geographical segment as required by Accounting Standard 17 on “Segment Reporting”.

15 RELATED PARTY DISCLOSURES

Names of the related parties where control exists irrespective of whether transactions have been occurred or not:

I. Ultimate Holding Company:

IDFC Limited

II. Holding Company:


Names of the related parties with which there are transactions during the year:

III. Fellow Subsidiary:




Details of transactions:



(`) (`)

NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP TRANSACTIONS DURING THE YEAR

I. FELLOW SUBSIDIARIES:

IDFC Asset Management Company Limited Reimbursement of expenses 134,236 318,356

16 THE BASIC AND DILUTED EARNINGS PER SHARE HAS BEEN CALCULATED BASED ON THE FOLLOWING:



(`) (`)

Net profit after tax 424,286 74,008

Weighted average number of equity shares (Nos.) 50,000 50,000

Basic and diluted earnings per share (`) 8.49 1.48

17 As per information available with the Company, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by auditors.

18 DETAILS OF SPECIFIED BANK NOTES (“SBN”) HELD AND TRANSACTED DURING THE PERIOD 08/11/2016 TO 30/12/2016




(-) Permitted receipts - - -



19 The figures for the previous year have been regrouped wherever necessary, in order to make them comparable to the current year.

IDFC BHARAT LIMITED

U65929TN2003PLC050856

Mr. S. Devaraj (Chairperson)

Dr. J. Sadakkadulla

Mr. A. Krishnamoorthy

Mr. R. Ravishankar

Mr. Arjun Muralidharan

M/s. Walker Chandiok & Co LLP


IDFC Bank Limited

No. 9, Paripoorna Towers, Manoranjitham Street, Annamalai Nagar, Tiruchirappalli, Tamil Nadu - 620 018 Tel: +91 431 4500000 Fax: +91 431 2750393Website www.gvmfl.comEmail ID [email protected]

CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fourteenth Annual Report of IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited) together with the audited financial statements for the financial year ended March 31, 2017.

FINANCIAL HIGHLIGHTS (SUMMARY)




Total Income 2,629,469,448 3,107,467,969

Less: Expenditure (2,202,286,574) (2,419,026,224)

Profit / (Loss) before depreciation 427,182,874 688,441,745

Less: Depreciation (31,328,897) (25,630,052)

Profit / (Loss) before tax and exceptional Items 395,853,977 662,811,693

Less : Exceptional items (186,863,267) -

Profit Before tax 208,990,710 662,811,693

Less: Taxes (84,857,440) (242,677,657)

Net Profit / (Loss) 124,133,270 420,134,036

CHANGE OF NAME

Pursuant to the Shareholders’ approval obtained at the Extra Ordinary General Meeting held on March 21, 2017, the name of the Company was changed from ‘Grama Vidiyal Micro Finance Limited’ to ‘IDFC Bharat Limited’ with effect from April 17, 2017.

BUSINESS & OVERVIEW

IDFC Bharat Limited became a Wholly Owned Subsidiary (“WOS”) of IDFC Bank Limited (“IDFC Bank”), pursuant to its acquisition by IDFC Bank on October 13, 2016. Prior to the said acquisition, the Company was operating as an NBFC - MFI engaged in the business of microfinance and was one of the pioneer microfinance institutions in India.

The Company and the then Shareholders had entered in to a Share Purchase Agreement on July 12, 2016 with IDFC Bank according to which IDFC Bank, subject to approval of the Reserve Bank of India (“RBI”), would acquire 100% stake in the Company and convert it in to its WOS.

IDFC Bank received in-principle approval from the RBI for acquisition of the Company, subject to the Company surrendering its NBFC-MFI Licence issued by the RBI, its Certificate of Registration and other terms and conditions including transfer of its assets and liabilities.

The Company had repaid all its outside borrowings including the ECBs and secured / unsecured Non-Convertible Debentures before completion of the acquisition with the consent of the respective lenders / investors and with the prior permission of the RBI wherever required. Further, the Company had transferred all its outstanding receivables / loan portfolio to IDFC Bank through a Direct Assignment (“DA”) Agreement dated September 29, 2016.

The Company had also entered into a Business Correspondent (“BC”) agreement with IDFC Bank dated September 01, 2016, by which it agreed to act as a BC to IDFC Bank for distribution of its products.

IDFC Bank received final approval from the RBI for acquisition of the Company on October 06, 2016 and accordingly acquisition of the Company by IDFC Bank was effected on October 13, 2016.

By satisfying the terms of the In-principal approval for the acquisition given by RBI, the Company had surrendered its Certificate of Registration as NBFC MFI to RBI. The RBI canceled the Certificate of Registration of the Company on October 18, 2016. The Company is presently acting as a BC for distribution of the products of IDFC Bank.

TRANSFER TO RESERVES

Since the Company is no longer registered with RBI under Section 45IA of the Reserve Bank of India Act, 1934, the requirement of creating a Reserve Fund (Statutory Reserve) in terms of Section 45-IC(1) of the Reserve Bank of India Act, 1934 and transferring 20% of the profit to the Statutory Reserve does not arise. Consequently, no amount has been transferred to the said Reserve Fund during the year 2016-17 and balance in Reserve Fund of ` 21.50 crore has been transferred to surplus in the Statement of Profit and Loss.

REVIEW OF PERFORMANCE

Until surrendering of the NBFC-MFI Licence, the Company had disbursed ` 2,322.43 crore loans during the financial year 2016-17.

The total number of branches of the Company as on March 31, 2017 was 326 with operations in seven (7) states viz. Tamil Nadu, Maharashtra, Madhya Pradesh, Puducherry, Kerala, Karnataka and Gujarat as compared to 306 Branches during the previous year.

The total number of clients of the Company as on March 31, 2017 was 1,116,703.

The Company’s growth momentum during the period under review, was slowed down due to the adverse effects of demonetisation. The total loan disbursements and recovery were adversely affected during the 3rd and 4th quarters of FY 2016-17. However, good signs of improvement were evident by the end of the period.

For the year ended March 31, 2017, total income of the Company was ` 262.94 crore compared to ` 310.75 crore during the Previous Year. The Profit Before Tax for the year was ` 20.89 crore as compared to ` 66.28 crores and the Net Profit for the year was ` 12.41 crore as compared to profit of ` 42.01 crore in the previous year.

I D F C B H A R AT L I M I T E D | 3 3 5

BOARD'S REPORT

DIVIDEND

The Directors did not recommend any dividend for the year ended March 31, 2017.

HOLDING COMPANY / SUBSIDIARY COMPANY / JOINT VENTURES / ASSOCIATE COMPANY

The Company is a wholly owned subsidiary of IDFC Bank. The Company does not have any Subsidiary Company / Joint Venture / Associate Company.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The total number of employees of the Company as on March 31, 2017 was 3,432 as compared to 2,930 during the previous year.

Disclosures pertaining to the provisions of Section 197(12) of the Companies Act, 2013 (“the Act”) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Member of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and Member interested in obtaining such information may write to the Company Secretary at [email protected] and the same will be furnished on request.


The Company did not issue any fresh equity share capital, during FY17.

The Company has so far issued a total of 5,579,996 equity shares of ` 10 each. The capital structure of the Company as on March 31, 2017 was as follows:

SHARE CAPITAL AMOUNT IN `

AUTHORISED

Equity Shares 250,000,000

Preference Shares 250,000,000

TOTAL 500,000,000

ISSUED, SUBSCRIBED AND FULLY PAID-UP

Equity Shares 55,799,960

Preference Shares -

TOTAL 55,799,960

PUBLIC DEPOSITS

The Company has neither invited nor accepted any Public Deposits during the year under review.


The provision of Section 186 of the Companies Act, 2013 are not applicable to the Company and hence, the particulars of loans, guarantees and investments have not been given.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has in place a Whistle Blower Policy, so as to establish a Vigil Mechanism to enable Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct.


Your Company did not have any foreign exchange earnings as on March 31, 2017. The particulars regarding foreign exchange expenditure are furnished under Item No. 24 in the Notes forming part of the Financial Statements.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Since the Company does not own any manufacturing facility, the particulars regarding conservation of energy, technology absorption and other particulars as required by Section 134 (3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 are not applicable and hence not given.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Act, Mr. S. Devaraj would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for re-appointment. The Board of Directors recommends re-appointment of Mr. S. Devaraj as Director at the ensuing AGM.

During the year, Mr. Peter Manoharan was appointed in the category of Independent Directors (“IDs”) w.e.f. July 6, 2016.

Mr. Arjun Muralidharan was appointed as Managing Director and CEO of the Company and Mr. R. Ravishankar was appointed as the Nominee Director representing IDFC Bank Limited w.e.f. October 13, 2016.


BOARD'S REPORT

The shareholders at their meeting held on October 13, 2016 approved the appointment of Mr. Arjun Muralidharan as Managing Director and CEO of the Company.

Dr. J. Sadakkadulla was appointed in the category of ID at the Board Meeting held on January 23, 2017 for a term of Three (3) years w.e.f. February 1, 2017.

In terms of Section 160 of the Act, your Company has received notice in writing from Members along with requisite deposit of ` 100,000 each proposing candidature of Dr. J. Sadakkadulla and Mr. R. Ravishankar. The Directors recommend their appointment at the ensuing AGM.

On October 13, 2016, Mr. Rahul Jakatdar, Ms. Shirley Devaraj, Mr. Rajasekar Thanuskodi and Mr. Peter Manoharan resigned as Directors of the Company. The Board places on record its sincere and deep appreciation for the services rendered by these Directors as members of the Board and as members of the various Committees of the Board that they served on.

During FY17, all appointments were made in compliance with the provisions of applicable regulations. None of the Directors of the Company are disqualified to be appointed as Directors in accordance with Section 164 of the Act.

As on March 31, 2017, Key Managerial Personnel of the Company were as follows:

i. Mr. Arjun Muralidharan - Managing Director and CEO

ii. Mr. Boby Xavier - Company Secretary


The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in FY17, that they meet the criteria of independence specified under sub-sections (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.

BOARD MEETINGS

During FY17, the Board met 8 times on May 14, 2016; May 30, 2016; July 06, 2016; September 13, 2016; October 13, 2016; November 09, 2016; January 23, 2017 and March 15, 2017. The gap between any two consecutive meetings was less than one hundred and twenty days.

The attendance details of the Board Meetings held during FY17 is given in the table below:



Mr. S. Devaraj1 01936417 Chairman & Managing Director 8 6

Mr. Arjun Muralidharan2 02726409 Managing Director & CEO 4 4

Mr. A. Krishnamoorthy 00386122 Independent Director 8 8

Dr. J. Sadakkadulla3 07544406 Independent Director 1 1

Mr. R. Ravishankar2 05106028 Non-Executive Director 4 4

Ms. Shirley Devaraj4 2030034 Whole Time Director 5 4

Dr. Rajasekar Thanushkodi4 3112885 Non-Executive Director 5 5

Mr. Rahul Jakatdar4 00508152 Non-Executive Director 5 5

Mr. Peter Manoharan4 07568604 Independent Director 2 21 Resigned from the position of Managing Director w.e.f. October 13, 2016. Continued to be the Executive Chairman.2 Appointed w.e.f. October 13, 2016.3 Appointed as Additional Director w.e.f. February 01, 2017.4 Resigned from Board w.e.f. October 13, 2016.


As on March 31, 2017, your Company had the following Board Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Corporate Social Responsibility Committee

4. Risk Management Committee

5. Resourcing Committee

AUDIT COMMITTEE

During the year under review, the Audit Committee was reconstituted twice on September 13, 2016 and January 23, 2017. The composition of the Audit Committee is in compliance with the provisions of the Companies Act, 2013. During FY17, the Audit Committee met two (2) times on May 30, 2016 and September 13, 2016. All the recommendation made by the Audit Committee during the year were accepted by the Board.

The Audit Committee of the Company comprises of the following Members:

i. Mr. A. Krishnamoorthy, Chairman

ii. Dr. J. Sadakkadulla

iii. Mr. R. Ravishankar


Attendance details of the Audit Committee Meetings held during FY17 are given below:



Mr. S. Devaraj1 Executive Chairman Ex-Chairman 1 1

Mr. A. Krishnamoorthy Independent Director Chairman 2 2

Dr. J. Sadakkadulla3 Independent Director Member 0 0

Mr. R. Ravishankar4 Non-Executive Director Member 0 0

Mr. Rahul Jakatdar2 Non-Executive Director Member 2 2

Mr. Peter Manoharan2 Independent Director Member 1 11 Resigned as a member w.e.f. September 13, 20162 Resigned as a member w.e.f. October 13, 20163 Appointed as a member w.e.f. February 1, 20174 Appointed as a member w.e.f. January 23, 2017


During the year under review, the Nomination and Remuneration Committee (“NRC”) was reconstituted twice on September 13, 2016 and January 23, 2017. The composition of the NRC is in compliance with the Companies Act, 2013. During FY17, the NRC met three (3) times on July 6, 2016, September 13, 2016 and October 13, 2016.

The NRC of the Company comprises of the following members:

i. Mr. R. Ravishankar, Chairman

ii. Mr. S. Devaraj

iii. Mr. A. Krishnamoorthy

iv. Dr. J. Sadakkadulla

Attendance details of the Nomination and Remuneration Committee Meetings held during FY17 are given below:



Mr. R. Ravishankar2 Non-Executive Director Chairman 0 0

Mr. S. Devaraj2 Executive Chairman Member 0 0

Mr. A. Krishnamoorthy Independent Director Member 3 3


Mr. Rahul Jakatdar1 Non-Executive Director Member 3 3

Mr. Peter Manoharan1 Independent Director Member 1 11 Resigned as a member w.e.f. October 13, 20162 Appointed as a member w.e.f. January 23, 20173 Appointed as a member w.e.f. February 1, 2017


The Company has duly constituted a Corporate Social Responsibility (“CSR”) Committee as per the provisions of Section 135 of the Act and has devised a policy for the implementation of the CSR framework, broadly defining the areas of spending for promotion / development at least two per cent of its average net profits made during the three immediately preceding financial years on the activities mentioned under Schedule VII of the Act.

During the year under review, the CSR Committee was re-constituted once on January 23, 2017. During FY17, the CSR Committee met one (1) time on May 30, 2016.

The CSR Committee comprises of the following members:

i. Mr. S. Devaraj, Chairman

ii. Mr. R. Ravishankar

iii. Dr. J. Sadakkadulla

Attendance details of the CSR Committee Meetings held during FY17 are given below:



Mr. S. Devaraj Executive Chairman Chairman 1 1

Mr. A. Krishnamoorthy1 Independent Director Member 1 1


Mr. R. Ravishankar3 Non-Executive Director Member 0 0

Ms. Shirley Devaraj4 Whole Time Director Member 1 11 Resigned as a member w.e.f. January 23, 20172 Appointed as a member w.e.f. February 1, 20173 Appointed as a member w.e.f. January 23, 20174 Resigned as a member w.e.f. October 13, 2016

BOARD'S REPORT


The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as ‘Annexure I’.

RISK MANAGEMENT COMMITTEE

The Board of the Company has the ultimate responsibility for the Company’s risk management framework. To ensure the Company has a sound system of risk management and internal controls in place, the Board has established the Risk Management Committee of the Board which endeavours to review the risk register at regular intervals. The members of the Risk Management Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company. The Company has in place a well defined Risk Management Policy.

During the year under review, the Risk Management Committee of the Company was re-constituted once on January 23, 2017. During FY17, the Risk Management Committee met three (3) times on April 11, 2016, July 6, 2016 and October 13, 2016.

The Risk Management Committee comprises of the following members:

i. Mr. R. Ravishankar, Chairman

ii. Mr. A. Krishnamoorthy

iii. Mr. Arjun Muralidharan

Attendance details of the Risk Management Committee Meetings held during FY17 are given below:



Mr. S. Devaraj3 Executive Chairman Ex-Chairman 3 3

Mr. Arjun Muralidharan1 MD & CEO Member 0 0

Mr. A. Krishnamoorthy1 Independent Director Member 0 0

Dr. Rajasekar Thanushkodi2 Non-Executive Director Member 3 3

Ms. Shirley Devaraj2 Whole Time Director Member 3 3

Mr. R. Ravishankar1 Non-Executive Director Chairman 0 01 Appointed as a member w.e.f. January 23, 20172 Resigned as a member w.e.f. October 13, 20163 Resigned as a member w.e.f. January 23, 2017

RESOURCING COMMITTEE

During the year under review, no meeting of the Resourcing Committee was held. The Resourcing Committee of the Company was re-constituted once on January 23, 2017. During FY17, the Risk Management Committee met eight (8) times on April 11, 2016; April 27, 2016; May 30, 2016; June 24, 2016; June 26, 2016; June 28, 2016 and October 13, 2016.

The Resourcing Committee comprises of the following members:

i. Mr. S. Devaraj, Chairman

ii. Mr. R. Ravishankar

iii. Mr. Arjun Muralidharan

Attendance details of the Resourcing Committee Meetings held during FY17 are given below:



Mr. S. Devaraj Executive Chairman Chairman 8 8

Mr. Arjun Muralidharan1 MD & CEO Member 0 0

Dr. Rajasekar Thanushkodi2 Non-Executive Director Member 6 6

Ms. Shirley Devaraj2 Whole Time Director Member 8 8

Mr. R. Ravishankar1 Non-Executive Director Member 0 01 Appointed as a member w.e.f. January 23, 20172 Resigned as a member w.e.f. October 13, 2016

AUDITORS

The Shareholders of the Company at their meeting held on July 30, 2016 had approved the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants (Registration No: 001076N / N500013) as the Statutory Auditors of the Company for a period of five (5) years to hold office from the conclusion of the Thirteenth Annual General Meeting up to the conclusion of the Eighteenth Annual General Meeting of the Company, subject to ratification by Members at every Annual General Meeting.

The Board recommends ratification of the appointment of M/s. Walker Chandiok & Co LLP, Chartered Accountants, as the Statutory Auditors of the Company.

AUDITORS’ REPORT

There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report for the financial year ended March 31, 2017.

BOARD'S REPORT



The Company has in place Policy on Related Party Transactions (“RPT”) and the same has been uploaded on the website of the Company. Since all RPTs entered into by the Company during FY17 were in the ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. This ensures orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The internal auditors of the Company check and verify the internal control and monitor them in accordance with policies adopted by the Company. The internal financial controls with reference to the financial statements were adequate and operating effectively.


There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

As per Section 134(3)(l) of the Act, there have been no reportable changes and commitments, affecting the financial position of the Company that have occurred during the period from March 31, 2017 till the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.


The Company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.


The details forming part of the extract of the Annual Return in Form MGT-9 are annexed herewith as Annexure II.



i. in the preparation of financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

ii. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2017 and profit of the company for that period;

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

iv. the directors had prepared the annual financial statements on a going concern basis;

v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

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

ACKNOWLEDGEMENT

Your Directors would like to thank our clients, vendors and bankers for their continued support during the year. We would like to place on record our appreciation for the support received from the Reserve Bank of India and other regulatory agencies. We would also like to express our deep sense of appreciation for the hard work and efforts put in by the employees at all levels of the Company. Your Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, IDFC Bank Limited and other Group Companies.


S. DevarajExecutive Chairman

Tiruchirapalli, April 20, 2017


ANNEXURE ICORPORATE SOCIAL RESPONSIBILITY (CSR)[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

1. A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

The CSR policy of IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited) is framed with the following objectives:

• Striveforeconomicdevelopmentthatpositivelyimpactsthesocietyatlargewithaminimalresourcefootprint.

• EmbraceresponsibilityfortheCompany’sactionsandencourageapositiveimpactthroughitsactivitiesonhunger,poverty,malnutrition, environment, communities, stakeholders and the society.

CSR Activities:

The Company has undertaken some of the activities which fall in the ambit of the activities listed in Schedule VII of the Act. The list of activities as provided in Schedule VII of the Act are included in the CSR Policy of the Company and some of the main areas are:

i. Eradicating hunger, poverty and malnutrition, promoting health care and sanitation and making available safe drinking water

ii. Promoting education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;

iii. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

2. The Composition of the CSR Committee.

The Board of Directors of the Company had constituted the CSR Committee of the Board comprising of the following members as on March 31, 2017:

SR. NO.

NAME OF THE MEMBER DESIGNATION POSITION IN COMMITTEE

1. Mr. S. Devaraj Executive Chairman Chairman

2. Mr. R. Ravishankar Executive Director Member

3. Dr. J. Sadakkadulla Independent Director Member

3. Average net profit of the Company for last three financial years: ` 327,574,027

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above) ` 6,551,481

5. Details of CSR spent during the financial year

(a) Total amount spent for the financial year ` 6,740,902

(b) Amount unspent, if any NIL


ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)[Pursuant to clause (o) of sub-section (3) of Section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]

` IN LAC

(1) (2) (3) (4) (5) (6) (7) (8)

SR NO

CSR PROJECT OR ACTIVITY IDENTIFIED

SECTOR IN WHICH THE PROJECT IS COVERED(CLAUSE NO OF SCHEDULE VII TO THE COMPANIES ACT, 2013, AMENDED)

PROJECTS OR PROGRAMS(1) LOCAL AREA OR OTHER(2) SPECIFY THE STATE AND DISTRICT WHERE PROJECTS OR PROGRAMS WAS UNDERTAKEN.

AMOUNT OUTLAY(BUDGET)

AMOUNT SPENT ON THE PROJECTS

OR PROGRAMS SUBHEADS:

1.DIRECT EXPENDITURE ON PROJECTS

OR PROGRAMS 2. OVERHEADS

CUMULATIVEEXPENDITURE

UPTO THE REPORTING

PERIOD

AMOUNT SPENT:DIRECT OR THROUGHIMPLEMENTINGAGENCY

1 Distribution of food Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation

Local Area, Tamil Nadu, Maharashtra, Madhyapradesh

6,551,481

3,892,959 3,892,959 3,892,959: Direct

2 Health Camps Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation


512,601 512,601 512,601: Direct

3 Drought Relief Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation


501,855 501,855 501,855: Direct

4 Financial Literacy camps

Cl.(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects


1,602,671 1,602,671 1,602,671: Direct

5 Livelihood training Cl.(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects


230,816 230,816 230,816: Direct

TOTAL 6,551,481 6,740,902 6,740,902 6,740,902



[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN U65929TN2003PLC050856

ii) Registration Date May 12, 2003

iii) Name of the Company IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited)

iv) Category / Sub-Category of the Company Company Limited by Shares Indian Non-Government Company

v) Address of the Registered office and contact details No. 9, Paripoorna Towers, Manoranjitham Street, Annamalai Nagar, Tiruchirappalli, Tamil Nadu - 620 018 Tel: +91 431 4500000; Fax: +91 431 2750393



NSDL Database Management Limited* 4th Floor, Trade World A Wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 Tel: +91 22 4914 2700; Fax: +91 22 4914 2503

* For electronic connectivity with Depositories.


All the business activities contributing 10 % or more of the total turnover of the Company shall be stated: -

SR. NO.


1 Micro Finance* 64990 77

2 Business Correspondent (“BC”) 66190 23

* The Company discontinued the business of microfinance from the date of surrendering of and cancellation of NBFC-MFI Licence by RBI w.e.f. October 18, 2016.


SR. NO.

NAME AND ADDRESS OF THE COMPANY CIN / GLN HOLDING / SUBSIDIARY /ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

i) IDFC Bank Limited L65110TN2014PLC097792 Holding Company 100 Section 2(46)






A PROMOTERS

(1) Indian

a) Individual / HUF NIL 1,451,661 1,451,661 26.02 NIL NIL NIL NIL (26.02)

b) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Bodies Corp. NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Banks / FI NIL NIL NIL NIL 5,579,990 6 5,579,996 100.00 100.00

f) Any Other. NIL NIL NIL NIL NIL NIL NIL NIL NIL

SUB-TOTAL (A) (1) NIL 1,451,661 1,451,661 26.02 5,579,990 6 5,579,996 100.00 73.98






(2) Foreign

a) NRIs - Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Other - Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) Bodies Corp. NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Any Other.... NIL NIL NIL NIL NIL NIL NIL NIL NIL

SUB-TOTAL (A) (2) NIL NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL SHARE HOLDING OF PROMOTER (A) = (A)(1)+(A)(2)

NIL 1,451,661 1,451,661 26.02 5,579,990 6 5,579,996 100.00 73.98

B PUBLIC SHAREHOLDING

1 Institutions

a) Mutual Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Venture Capital Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

f) Insurance Companies NIL NIL NIL NIL NIL NIL NIL NIL NIL

g) FIIs NIL 2,106,598 2,106,598 37.75 NIL NIL NIL NIL (37.75)

h) Foreign Venture Capital Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

i) Others (Trusts) NIL 1,376,929 1,376,929 24.68 NIL NIL NIL NIL (24.68)

SUB-TOTAL (B) (1) NIL 3,483,527 3,483,527 62.43 NIL NIL NIL NIL (62.43)

2 Non - Institutions

a) Bodies Corp

i) Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL

ii) Overseas NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Individuals NIL NIL NIL NIL NIL NIL

i) Individual shareholders holding nominal share capital up to ` 1 lakh

NIL 140,492 140,492 2.52 NIL NIL NIL NIL (2.52)

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

NIL 504,316 504,316 9.04 NIL NIL NIL NIL (9.04)

SUB-TOTAL (B) (2) NIL 644,808 644,808 11.56 NIL NIL NIL NIL (11.56)

TOTAL PUBLIC SHARE HOLDING (B) = (B)(1)+(B)(2)

NIL 4,128,335 4,128,335 73.98 NIL NIL NIL NIL (73.98)

C SHARES HELD BY CUSTODIAN FOR GDR & ADR


GRAND TOTAL (A+B+C) NIL 5,579,996 5,579,996 100.00 5,579,990 6 5,579,996 100.00 NIL





SR. NO.


SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES

1 Mr. S. Devaraj 1,291,192 23.14 NIL NIL NIL NIL (23.14)

2 Mr. K. R. Ganesh 54,000 0.97 NIL NIL NIL NIL (0.97)

3 Mr. R. Raju 43,905 0.79 NIL NIL NIL NIL (0.79)

4 Dr. T. Rajasekar 21,953 0.39 NIL NIL NIL NIL (0.39)

5 Dr. Arul Jeganatha Raj 10,976 0.20 NIL NIL NIL NIL (0.20)

6 Dr. Mary John 10,976 0.20 NIL NIL NIL NIL (0.20)

7 Ms. D. Shirley 18,659 0.33 NIL NIL NIL NIL (0.33)

8 IDFC Bank Limited NIL NIL NIL 5,579,996 100.00 NIL 100.00

TOTAL 1,451,661 26.02 NIL NIL NIL NIL NIL

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

SHAREHOLDING AT THE BEGINNING OF THE YEAR

CUMULATIVE SHAREHOLDING DURING THE YEAR



At the beginning of the year 1,451,661 26.02 1,451,661 26.02

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

# #

At the end of the year 5,579,996 100.00 5,579,996 100.00

# Inter-se transfer of the promoter

SR. NO.


DATE INCREASE/ DECREASE IN

SHAREHOLDING

REASON CUMULATIVE SHAREHOLDING DURING THE YEAR

NO. OF SHARES % NO. OF SHARES %

1 Mr. S. Devaraj 1,291,192 23.14 13-10-2016 Decrease Transfer NIL NIL

2 Mr. K. R. Ganesh 54,000 0.97 13-10-2016 Decrease Transfer NIL NIL

3 Mr. R. Raju 43,905 0.79 13-10-2016 Decrease Transfer NIL NIL

4 Dr. T. Rajasekar 21,953 0.39 13-10-2016 Decrease Transfer NIL NIL

5 Dr. Arul Jeganatha Raj 10,976 0.20 13-10-2016 Decrease Transfer NIL NIL

6 Dr. Mary John 10,976 0.20 13-10-2016 Decrease Transfer NIL NIL

7 Ms. D. Shirley 18,659 0.33 13-10-2016 Decrease Transfer NIL NIL

8 IDFC Bank Limited NIL NIL 13-10-2016 Increase Transfer 5,579,996 100.00







Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

# #

At the end of the year NIL NIL NIL NIL

# Date wise Increase / Decrease in Shareholding of each of the Top 10 Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) during the year specifying the reasons:


SR. NO.


DATE INCREASE / DECREASE IN

SHAREHOLDING



1 Mauritius Unitus Corporation 1,116,557 20.01 13-10-2016 Decrease Transfer NIL NIL

2 MV Mauritius Limited 832,106 14.91 13-10-2016 Decrease Transfer NIL NIL

3 Mr. Vinod Khosla 400,038 7.17 13-10-2016 Decrease Transfer NIL NIL

4 Amar Foundation 157,935 2.83 13-10-2016 Decrease Transfer NIL NIL

5 Employee Welfare Trust 125,641 2.25 13-10-2016 Decrease Transfer NIL NIL

6 GramaVidiyal Community Mutual Benefit Trust – Annavasal

107,018 1.92 13-10-2016 Decrease Transfer NIL NIL

7 GramaVidiyal Community Mutual Benefit Trust – Mannapparai


8 GramaVidiyal Community Mutual Benefit Trust – Cholan Nagar


9 GramaVidiyal Community Mutual Benefit Trust – Somarasampet


10 GramaVidiyal Community Mutual Benefit Trust – Pudukkottai North


(v) Shareholding of Directors and Key Managerial Personnel:






Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc):

# #

At the end of the year NIL NIL NIL NIL

# Date wise Increase / Decrease in Shareholding of each of the KMPs (other than Directors, Promoters and Holders of GDRs and ADRs) during the year specifying the reasons:

SR. NO.


DATE INCREASE / DECREASE IN

SHAREHOLDING



1 Mr. S. Devaraj 1,291,192 23.14 13-10-2016 Decrease Transfer NIL NIL

2 Dr. T. Rajasekar 21,953 0.39 13-10-2016 Decrease Transfer NIL NIL

3 Mr. Arjun Muralidharan 27,439 0.49 13-10-2016 Decrease Transfer NIL NIL

4 Ms. D. Shirley 18,659 0.33 13-10-2016 Decrease Transfer NIL NIL

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment IN `


DEPOSITS

UNSECUREDLOANS

DEPOSITS TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year

i) Principal Amount 10,866,355,116 880,176,534 NIL 11,746,531,650

ii) Interest due but not paid 17,456,915 NIL NIL 17,456,915

iii) Interest accrued but not due 42,675,255 45,873,502 NIL 88,548,757

TOTAL (I+II+III) 10,926,487,286 926,050,036 NIL 11,852,537,322


• Addition NIL NIL NIL -

• Reduction (10,926,487,286) (926,050,036) NIL (11,852,537,322)

Net Change (10,926,487,286) (926,050,036) NIL (11,852,537,322)


i) Principal Amount NIL NIL NIL NIL

ii) Interest due but not paid NIL NIL NIL NIL

iii) Interest accrued but not due NIL NIL NIL NIL

TOTAL (I+II+III) NIL NIL NIL NIL



VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and / or Manager: IN `

SR. NO. PARTICULARS OF REMUNERATION NAME OF MD / WTD / MANAGER TOTAL AMOUNT

MR. S. DEVARAJ MS. D. SHIRLEY1 MR. ARJUN MURALIDHARAN2

1. Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961

11,308,000 4,140,000 3,593,240 19,041,240

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 NIL NIL NIL NIL

(c) Profits in lieu of salary under Section 17(3) Income- tax Act, 1961

NIL NIL NIL NIL




- as % of profit NIL NIL NIL NIL

- others, specify... NIL NIL NIL NIL

5. Others, please specify NIL NIL NIL NIL

TOTAL (A) 11,308,000 4,140,000 3,593,240 19,041,240

Ceiling as per the Act 1 Resigned as Whole Time Director w.e.f October 13, 2016. This remuneration is for the period from April 1, 2016 to October 13, 2016.2 Appointed as Managing Director and CEO of the Company w.e.f. October 13, 2016. This remuneration is for the period from October 13, 2016 to March 31, 2017.


SR. NO.


MR. A. KRISHNAMOORTHY

MR. T. RAJASEKAR

MR. RAHUL PRABHAKAR

JAKATDAR

MR. PETER MANOHARAN

DR. J. SADAKKADULLA


Fee for attending board committee meetings 625,000

- - 150,000 25,000 800,000

Commission NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL

TOTAL (1) 625,000 NIL NIL 150,000 25,000 800,000


Fee for attending board committee meetings NIL 250,000 500,000 NIL NIL 750,000

Commission NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL

TOTAL (2) NIL 250,000 500,000 NIL NIL 750,000

TOTAL (B) = (1 + 2) 625,000 250,000 500,000 150,000 25,000 1,550,000


Note: In terms of the provisions of the Companies Act, 2013, the remuneration payable to Directors other than executive Directors shall not exceed 3% of the net profit of the Company. The remuneration paid to the directors is well within the limit



C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD. IN `

SR. NO.


MR. ARJUN MURALIDHARAN1

(CEO)

MR. BOBY XAVIER

(CS)

MR. S. PATTABIRAMAN2

(CFO)

TOTAL

1. Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 4,528,000 2,157,651 4,160,000 10,845,651

(b) Value of Perquisites u/s 17(2) Income-tax Act, 1961 NIL NIL NIL NIL

(c) Profits in lieu of Salary under Section 17(3) Income-tax Act, 1961 NIL NIL NIL NIL



4. Commission

- as % of profit NIL NIL NIL NIL

- others, specify... NIL NIL NIL NIL

5. Others, please specify - NIL NIL NIL

TOTAL (A) 4,528,000 2,157,651 4,160,000 10,845,651

1 This remuneration is for the period from April 1, 2016 to October 13, 2016 for his position as the CEO.

2 Resigned as the CFO w.e.f. October 13, 2016. This remuneration is for the period from April 1, 2016 to October 13, 2016.

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

TYPE SECTION OF THE COMPANIES ACT

BRIEF DESCRIPTION DETAILS OF PENALTY / PUNISHMENT /

COMPOUNDING FEES IMPOSED

AUTHORITY [RD / NCLT /

COURT]

APPEAL MADE, IF ANY (GIVE

DETAILS)

A. COMPANY

Penalty - - - - -

Punishment - - - - -

Compounding Section 87 Petition filed u/s 87 of the

Companies Act, 2013 by Company

to Condone the Delay in filling the particulars

of satisfaction of Charge.

`1000 RD -

B. DIRECTORS

Penalty - - - - -


Compounding - - - - -

C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -


Compounding - - - - -




TO THE MEMBERS OF IDFC BHARAT LIMITED (FORMERLY, GRAMA VIDIYAL MICRO FINANCE LIMITED)


1. We have audited the accompanying financial statements of IDFC Bharat Limited (Formerly, Grama Vidiyal Micro Finance Limited)

(‘the Company’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss and the Cash Flow

Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.


2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with

respect to the preparation of these financial statements, that give a true and fair view of the financial position, financial performance

and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting

Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended).

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for

safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application

of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation

and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness

of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and

are free from material misstatement, whether due to fraud or error.


3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be

included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether

these financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal financial controls relevant to the Company’s preparation of the financial statements that give a true and fair view in order

to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of

the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as

evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on these

financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements

give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting

principles generally accepted in India, of the state of affairs of the Company as at 31 March 2017, and its profit and its cash flows for

the year ended on that date.


9. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of

Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.



10. Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purpose of our audit;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our

examination of those books;

c. the financial statements dealt with by this report are in agreement with the books of account;

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act,

read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);

e. on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of

the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164(2) of the Act;

f. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2017 in

conjunction with our audit of the financial statements of the Company for the year ended on that date and our report dated 20

April 2017 as per Annexure B expressed an unmodified opinion.

g. with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit

and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in Note 32 to the financial statements, has disclosed the impact of pending litigations on its

financial position;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the

Company.

iv. the company, as detailed in Note 34 to the financial statements, has made requisite disclosures in these financial

statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30

December 2016. Based on the audit procedures performed and taking into consideration the information and explanations

given to us, in our opinion, these are in accordance with the books of account maintained by the company.

For WALKER CHANDIOK & CO LLP


Firm’s Registration No.: 001076N/N500013

per Sumesh E S

Partner

Membership No.: 206931

Place : Tiruchirappalli

Date : 20 April 2017



Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company

and taking into consideration the information and explanations given to us and the books of account and other records examined by us

in the normal course of audit, and to the best of our knowledge and belief, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed

assets.

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed

on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of

the Company and the nature of its assets.

(c) The title deed of the following immovable property, (which is included under the head ‘fixed assets’), which according to the

information and explanation given to us, is subject matter of an order from the Tiruchirappalli Corporation citing encroachment

of land. In response to this, the Company has filed a petition with the High Court of Madras (Madurai Bench) for stay and quash

of the Order for which an interim stay has been granted.

NATURE OF PROPERTY TOTAL NUMBER OF CASES

WHETHER LEASEHOLD /FREEHOLD

GROSS BLOCK AS ON 31 MARCH 2017 (`)

NET BLOCK ON 31 MARCH 2017 (`)

Land 1 Freehold 37,613,550 37,613,550

(ii) The Company does not have any inventory. Accordingly, the provisions of clause 3(ii) of the Order are not applicable.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other

parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and

3(iii)(c) of the Order are not applicable.

(iv) In our opinion, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the

provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies

(Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of

Company’s services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of

customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly

deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts

payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became

payable.

(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on

account of any dispute, are as follows:

NAME OF THE STATUTE

NATURE OF DUES AMOUNT (`) AMOUNT PAID UNDER PROTEST (`)

PERIOD TO WHICH THE AMOUNT RELATES

FORUM WHERE DISPUTE IS PENDING

Finance Act, 1994 Penalty 5,331,304 Nil 2007-08 to 2009-10 Customs, Excise and Service Tax Appellate Tribunal

Finance Act, 1994 Service tax 13,496,638 3,578,652 2009-10 to 2013-14 Customs, Excise and Service Tax Appellate Tribunal

Finance Act, 1994 Penalty 13,496,638 Nil 2009-10 to 2013-14 Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax 14,861,720 2,230,000 Assessment year 2014 - 15

CIT(A) Tiruchirappalli

(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government or any

dues to debenture-holders during the year.



(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion,

the term loans were applied for the purpose for which the loans were obtained, though idle funds which were not required for

immediate utilization were temporarily used for the purpose other than for which the loan was sanctioned but were ultimately

utilized for the stated end-use.

(x) According to the information and explanations given to us, no fraud on or by the Company, has been noticed or reported during the

year, except for, 1 case of misappropriation of cash by the employee of the Company to the extent of ` 1,962,540 identified by the

management during the year regarding which, the Company has initiated disciplinary action against that employee.

(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the

provisions of Section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the

requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible

debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them

covered under Section 192 of the Act.

(xvi) The company ceased its Non-Banking Financial Institution business during October 2016 until which date the Company was

registered under Section 45-IA of the Reserve Bank of India Act, 1934. Consequent to an application made by the Company, Reserve

Bank of India, on 18th October 2016, cancelled its Certificate of Registration as a Non-Banking Financial Institution.

For WALKER CHANDIOK & CO LLP


Firm’s Registration No.: 001076N/N500013

per Sumesh E S

Partner

Membership No.: 206931

Place : Tiruchirappalli

Date : 20 April 2017



Independent Auditor’s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. In conjunction with our audit of the financial statements of IDFC Bharat Limited (Formerly, Grama Vidiyal Micro Finance Limited) (“the Company”) as of and for the year ended 31 March 2017, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company as of that date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the company’s business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For WALKER CHANDIOK & CO LLPChartered AccountantsFirm’s Registration No.: 001076N/N500013

per Sumesh E SPartnerMembership No.: 206931

Place: TiruchirappalliDate: 20 April 2017



AS AT31 MARCH 2017

AS AT31 MARCH 2016

NOTES IN ` IN `



Share capital 3 55,799,960 95,799,960

Reserves and surplus 4 1,616,143,203 1,497,792,717

1,671,943,163 1,593,592,677


Long-term borrowings 5 - 5,813,316,044

Other long-term liabilities 6 19,375,615 32,775,753

Long-term provisions 7 16,494,281 6,237,303

35,869,896 5,852,329,100

Current liabilities

Other current liabilities 6 618,196,181 7,223,791,204

Short-term provisions 7 13,429,414 156,087,326

631,625,595 7,379,878,530

TOTAL 2,339,438,654 14,825,800,307

ASSETS

Non-current assets

Fixed assets

Tangible assets 8 109,526,995 96,330,477


Intangible assets under development 5,458,676 -

Deferred tax assets (net) 10 23,900,237 47,734,681

Loan receivables 11 - 623,730,339

Long-term loans and advances 12 3,746,150 1,806,745

Other non-current assets 13 24,836,170 1,030,571,293

175,662,796 1,809,294,559

Current assets

Trade receivables 14 109,589,516 9,078,919

Cash and bank balances 15 1,897,956,734 4,312,231,659

Loan receivables 11 - 8,060,804,917

Short-term loans and advances 12 130,993,131 233,391,270

Other current assets 13 25,236,477 400,998,983

2,163,775,858 13,016,505,748

TOTAL 2,339,438,654 14,825,800,307

Notes 1 to 34 form an integral part of these financial statements

This is the balance sheet referred to in our report of even date

For Walker Chandiok & Co LLPChartered Accountants(Firm’s Registration No.: 001076N/N500013)

For and on behalf of the Board of Directors ofIDFC Bharat Limited(Formerly, Grama Vidiyal Micro Finance Limited)

per Sumesh E SPartner

S DevarajChairperson

Arjun MuralidharanManaging Director and CEO

Tiruchirappalli | April 20, 2017Boby XavierCompany Secretary



YEAR ENDED31 MARCH 2017


NOTES IN ` IN `

REVENUE


Other income 17 6,427,016 21,426,452

TOTAL REVENUE 2,629,469,448 3,107,467,969

EXPENSES


Finance costs 19 987,910,623 1,372,253,619


Other expenses 21 281,199,090 305,030,030

TOTAL EXPENSES 2,233,615,471 2,444,656,276

PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX 395,853,977 662,811,693

Exceptional items 22 186,863,267 -


Consisting of:-

Continuing operations - (Loss) / profit before tax (48,385,814) 3,100,155

Discontinuing operations - Profit before tax 31 257,376,524 659,711,538

Tax expense

Current tax 52,118,172 241,057,365

Tax for earlier periods 8,904,824 10,836,969

Deferred tax 23,834,444 (9,216,677)

84,857,440 242,677,657

Profit after tax 124,133,270 420,134,036

Consisting of:-

Continuing operations - (Loss) / profit after tax (30,801,161) 2,015,771

Discontinuing operations - Profit after tax 31 154,934,431 418,118,265

Earnings per equity share 26

- Basic and diluted (`) 21.21 74.56

Notes 1 to 34 form an integral part of these financial statements

This is the statement of profit and loss referred to in our report of even date











IN ` IN `

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 208,990,710 662,811,693Adjustments Depreciation, amortisation and impairment 31,328,897 25,630,052 Net (gain)/loss on foreign currency transaction and translation (629,439) 27,261,469 Bad debts written off 2,428,309 - Derivative liability written back (9,146,185) - (Gain) on mark to market valuation of hedging contract - (15,848,150) Provision no longer required, written back (87,181,637) - Provision for loan losses, net - 29,510,577 Profit on sale of tangible assets (297,555) (492,971) Other finance costs - 4,063,094 Interest income on income tax refund - (741,368)Operating profit before working capital changes 145,493,100 732,194,396 Increase in provisions 9,654,929 3,774,485 Increase in other liabilities (543,366,229) 148,447,990 Decrease / (increase) loan receivables 8,701,029,537 (2,586,830,920) (Increase) in trade receivables (102,938,906) (5,389,828) (Increase) in loans and advances 147,959,363 (158,934,530) (Increase) in other assets 488,885,599 (55,817,848)Cash used in operating activities 8,846,717,393 (1,922,556,255) Income taxes paid (net) (177,792,420) (217,230,147)NET CASH (USED IN) OPERATING ACTIVITIES 8,668,924,973 (2,139,786,402)CASH FLOWS FROM INVESTING ACTIVITIESPurchase of tangible assets including capital work-in-progress and advances (49,292,447) (43,265,510)Purchase of intangible assets (2,040,773) (5,325,328)Proceeds from sale of tangible assets 473,428 822,756Investments in deposits (14,412,002,240) (15,402,732,376)Proceeds from maturity of deposits 15,848,264,409 15,121,972,246NET CASH (USED IN) FROM INVESTING ACTIVITIES 1,385,402,377 (328,528,212)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issue of preference shares - 40,000,000Redemption of preference shares (40,000,000) (35,000,000)Preference dividend paid including dividend distribution tax (5,782,784) (4,737,914)Proceeds from borrowings 15,300,000,000 9,137,370,000Repayment of borrowings (27,179,169,352) (5,071,180,844)NET CASH GENERATED FROM FINANCING ACTIVITIES (11,924,952,136) 4,066,451,242Net increase in cash and cash equivalents (1,870,624,786) 1,598,136,628Cash and cash equivalents as at the beginning of the year 3,548,570,980 1,950,434,352CASH AND CASH EQUIVALENTS AS AT THE END OF THE YEAR 1,677,946,194 3,548,570,980Notes (Also, refer note 15):Cash and cash equivalents comprises of Cash on hand 1,156,682 2,441,688Balances with banks - in current accounts 1,211,789,512 3,546,129,292 - in deposit account (with maturity up to 3 months) 465,000,000 -

1,677,946,194 3,548,570,980

This is the cash flow statement referred to in our report of even date









01 GENERAL INFORMATION

A. BACKGROUND Grama Vidiyal Micro Finance Limited was incorporated as a private limited company in the year 2003 under the erstwhile

Companies Act, 1956. Effective 21 December 2009, the Company was registered as a “Non Banking Financial Company” under the rules and regulations framed by the Reserve Bank of India (“the RBI”). The Company has obtained registration under the category of Non-Banking Financial Company - Micro Finance Institutions (“NBFC-MFI”), w.e.f 4 October 2013. The Company was in the business of providing micro loans to women borrowers.

During the year, IDFC Bank Limited executed share purchase agreements with the Company’s equity shareholders and thereby acquired 100% of the equity shares. Consequently the Company had assigned its entire loan receivables outstanding as at 29 September 2016 to IDFC Bank Limited by virtue of a Master Assignment Agreement. The Company had settled all liabilities towards borrowings and debentures (including debentures listed with Bombay Stock Exchange) that existed prior to acquisition of equity shares by IDFC Bank Limited and has surrendered its Certificate of Registration as a Non-Banking Financial Institution (NBFI) with RBI which was cancelled on 18 October 2016.

Subsequently,the Company discontinued to operate as a Non-Banking Financial Institution and has been operating as business correspondent. The Company applied to the Registrar of Companies for change of its legal name to IDFC Bharat Limited (‘the Company’) and has obtained the approval for the same subsequent to the balance sheet date with effect from 17 April 2017.

B. COMPARATIVES All amounts in the financial statements are presented in Indian Rupees except share data and as otherwise stated. Figures for the

previous year have been regrouped / re-classified wherever considered necessary to conform to the figures presented in the current year.


A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) applicable in India.

GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, (to the extent notified and applicable). The financial statements have been prepared under the historic cost convention on accrual basis of accounting, except interest in respect of non-performing loan assets are accounted for on a cash basis. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an ongoing basis.

B. USE OF ESTIMATES The preparation of the financial statements in conformity with Indian GAAP requires management to make estimates and

assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful loans and advances, future obligations under employee retirement benefit plans, income taxes and the useful lives of fixed assets. Further the classification of assets and liabilities into current and non-current is based on the estimation of the operating cycle of the Company.

Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

C TANGIBLE ASSETS AND DEPRECIATION Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and impairment losses, if any.

Cost comprises the purchase price, including duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising on the disposal of the tangible assets are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in the statement of profit and loss within other income or other expenses, as the case may be.

Depreciation is provided using straight line method at the rates of depreciation prescribed in Schedule II to the Companies Act, 2013. If the management’s estimates of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is different than that envisaged in the aforesaid schedule, depreciation is provided at a rate based on the management estimate of useful life/remaining useful life.

ASSET CATEGORY USEFUL LIFE (YEARS)

Computers and accessories 3-6

Furniture and fittings 10

Office equipment 5

Vehicles 8

D INTANGIBLE ASSETS AND AMORTISATION Goodwill represents the excess of acquisition cost over the carrying amount of the Company’s share of the identifiable net assets

of the acquiree at the date of acquisition and is attributed to the future economic benefits arising from an acquisition that are not individually identified and separately recognised. Goodwill is amortised over a period of 5 years.



Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the specific software. These assets are amortised over their estimated useful lives on a straight line basis, commencing from the date the assets is available to the Company for its use. After initial recognition, intangible assets are carried at its cost less any accumulated amortisation and any accumulated impairment losses.

When an intangible asset is disposed off, the gain or loss on disposal is determined as the difference between the disposal proceeds and the carrying amount of the asset, and is recognised in the statement of profit and loss within other income or other expenses, as the case may be.

The useful life of the assets is reviewed at each balance sheet date. If the expected useful life of the asset is significantly different from the previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefit from the asset, the method of amortisation is changed to reflect the changed pattern. Such changes are accounted in accordance with Accounting Standard (AS) 5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

E IMPAIRMENT

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For the assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units). As a result some assets are tested individually for impairment and some are tested at cash-generating unit level. Recoverable amount is the higher of the asset’s or cash generating units net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

F LEASES

Finance lease

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Company is a lessee in such type of arrangements, the related assets are recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability. Leases of land and buildings are classified separately and are split into a land and a building element, in accordance with the relative fair values of the leasehold interests at the date the asset is recognised initially. The corresponding finance lease liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to the statement of profit and loss, as finance costs over the period of the lease.

Operating lease

All other leases are treated as operating leases. Where the Company is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs such as maintenance and insurance are expensed as incurred.

G REVENUE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the collectivity is reasonably assured.

Interest on loans is recognised on accrual basis, except in the case of Non Performing Assets (“NPAs”), where interest is recognised upon realisation. Also refer note 2(a).

Interest income on deposits with banks is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

Loan processing fees is accounted up-front as and when it becomes due.

Income from managed portfolio represents income from receivables securitized / assigned wherein losses arising are recognized in the Statement of Profit and Loss immediately upon receipt of sale consideration. Gains arising from the transaction are amortized over the tenor of the transaction.

Commission income is recognised on accrual basis on the completion of the service in accordance with terms of the agreement.

Service fee for management of receivables is recognized on accrual basis in accordance with terms of the agreement.

H SECURITIZATION/ASSIGNMENT OF LOAN RECEIVABLES

Transactions relating to transfers of loans and advances through securitization/assignment with other financial institutions and banks are accounted for in accordance with the relevant guidelines of RBI on “Accounting for Securitisation”. Such transferred loans and advances are de-recognised from the financial statements and gains/losses are accounted for only where the Company surrenders rights to benefits specified in the loan contract in favour of the counter parties.



I BORROWING COST

Borrowing costs consist of interest and other costs that Company incurs in connection with the borrowing of funds. Borrowing costs other than borrowing costs incurred on securitisation are amortised over the period of the respective borrowings.

J EMPLOYEE BENEFITS

(i) Defined contribution plan: The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952. Eligible employees receive benefits from the provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to specified percentage of the covered employee’s basic salary. The Company has no further obligations under the plan beyond its monthly contributions. Contributions to provident fund are charged to the statement of profit and loss on accrual basis.

(ii) Defined benefit plan: The Company provides gratuity, a defined benefit retirement plan covering eligible employees. The Company provides the gratuity benefit through annual contribution to a fund. Liabilities related to the gratuity plan are determined by an independent actuarial valuation carried out using projected unit credit method as at the balance sheet date. Actuarial gain or loss is recognized immediately in the statement of profit and loss.

K FOREIGN CURRENCY TRANSACTIONS, FORWARD CONTRACTS AND DERIVATIVES

Foreign currency transactions are translated into the functional currency (Indian Rupees) of the Company, using the exchange rates prevailing on the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in the statement of profit and loss.

Forward contracts, other than those entered into to hedge foreign currency risk on unexecuted firm commitments or highly probable forecast transactions, are treated as foreign currency transactions and accounted accordingly as per Accounting Standard (AS) 11 “The Effects of Changes in Foreign Exchange Rates”. Exchange differences arising on such contracts are recognised in the period in which they arise. Gains and losses arising on account of roll over/cancellation of forward contracts are recognised as income/expense of the period in which such roll over/cancellation takes place

All the other derivative contracts, including forward contracts entered into to hedge foreign currency risks are recognised in the financial statements at fair value as on the Balance Sheet date, in pursuance of the announcement of the ICAI dated March 29, 2008 on accounting for derivatives.

L TAXATION

Provision for tax for the year comprises current income tax and deferred tax.

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantially enacted at the reporting date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.

M EARNINGS PER EQUITY SHARE

The basic earnings per equity share (“EPS”) is computed by dividing the net profit after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for effects of all dilutive potential equity shares.

N PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company creates a provision when there is present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. The amount of provision recognised are best estimates of expenditure that are required to settle the obligation at the balance sheet date. The estimates are not discounted to their present value.

A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither recognized nor disclosed in the financial statements.

O CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the Company are segregated based on the available information. Cash comprises of cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.



03 SHARE CAPITAL

AS AT 31 MARCH 2017 AS AT 31 MARCH 2016

NUMBER ` NUMBER `

AUTHORISED


Preference shares of ` 10 each 25,000,000 250,000,000 25,000,000 250,000,000

50,000,000 500,000,000 50,000,000 500,000,000

ISSUED, SUBSCRIBED AND FULLY PAID UP


Cumulative Non Convertible Compulsorily Redeemable (‘CNCCR’) Preference shares of ` 10 each

- - 4,000,000 40,000,000

5,579,996 55,799,960 9,579,996 95,799,960

a) There is no movement in the equity share capital during the current and previous year.


NUMBER ` NUMBER `

b) Preference shares

At the beginning of the year 4,000,000 40,000,000 3,500,000 35,000,000

Issued during the year - - 4,000,000 40,000,000

Redeemed during the year (4,000,000) (40,000,000) (3,500,000) (35,000,000)

OUTSTANDING AT THE END OF THE YEAR - - 4,000,000 40,000,000

c) Shares held by the holding company

Equity shares of ` 10 each

IDFC Bank Limited together with its nominees (Also, refer note 1(a))

5,579,996 55,799,960 - -

5,579,996 55,799,960 - -

d) Shareholders holding more than 5% of the shares Number % Number %

Equity shares of ` 10 each

IDFC Bank limited together with its nominees 5,579,996 100.00% - -

S Devaraj - - 1,291,192 23.14%

Mauritius Unitus Corporation - - 1,116,557 20.01%

MV Mauritius Limited - - 832,106 14.91%

Vinod Khoshla - - 400,038 7.17%

5,579,996 100.00% 3,639,893 65.23%

CNCCR Preference shares of ` 10 each

UNIFI AIF - - 4,000,000 100.00%

- - 4,000,000 100.00%

e) There were no shares issued pursuant to contract without payment being received in cash and allotted as fully paid up by way of bonus issues and bought back during the last 5 years immediately preceding 31 March 2017.

f) Rights, preferences and restrictions

Equity

The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors in any financial year, other than interim dividend, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shares shall be transferable subject to the provisions contained in the Articles of Association and in the agreements entered / to be entered into with the investors / shareholders from time to time.



Cumulative Non-Convertible Compulsorily Redeemable Preference shares

CNCCR Preference shares have the right to receive dividend at 12% per annum. The claims of holders shall be subordinated to the claims of all secured and unsecured creditors but senior to equity shareholders and pari passu amongst themselves and with other preference shareholders of the issuer. No dividend shall be paid to holders of common equity shares unless all amounts payable to holder(s) of CNCCR preference shares have been paid up to the date of payment of such dividend. Redemption shall be out of profits/free reserves or out of proceeds of a fresh issue of shares made for the purposes of the redemption or a combination of both. Redemption is to be made in 365 days (Previous year 365 days) from the date of issue. No voting rights are provided to the CNCCR preference share-holders except in respect of matters directly affecting the rights attached to them.


AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Capital redemption reserve

Balance at the beginning of the year 75,000,000 35,000,000

Add : Transferred from statement of profit and loss - 40,000,000

Balance at the end of the year 75,000,000 75,000,000

Securities premium reserve 437,373,207 437,373,207

Statutory reserve*


Add : Transferred from Surplus in statement of profit and loss - 84,027,000

Less: Transferred to Surplus in statement of profit and loss (215,012,000) -

Balance at the end of the year - 215,012,000

Surplus in statement of profit and loss


Add: Transferred from statutory reserve* 215,012,000 -

Add : Transferred from statement of profit and loss 124,133,270 420,134,036

Less : Transferred to statutory reserve - (84,027,000)

Less : Transferred to capital redemption reserve - (40,000,000)

Less : Preference dividend paid (4,800,000) (3,932,706)

Less : Tax on preference dividend paid (982,784) (805,208)

Balance at the end of the year 1,103,769,996 770,407,510

1,616,143,203 1,497,792,717

*Please refer note 1(a). The Company is no longer registered with RBI under Section 45IA of the Reserve Bank of India Act, 1934. Therefore requirement of creating a Reserve fund in terms of Section 45-IC(1) (‘Statutory reserve’) of the Reserve Bank of India Act, 1934 and transferring 20% of the profit to the Statutory reserve fund does not arise. Consequently, no amount has been transferred to the said Statutory reserve fund during the year 2016-17 and balance in Statutory reserve as on 31 March 2016 has been transferred to Surplus in Statement of Profit and Loss.

05 LONG TERM BORROWINGS

AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Secured

Term loans (Also, refer note (a) below)

From banks - 8,597,068,866

From other parties - 1,654,181,160

- 10,251,250,026

Other loans

Finance lease obligations (Also, see note (b) below) - 4,735,635

- 4,735,635



AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Debentures (Also, refer note (a) below)

14.75% Redeemable non convertible debentures of ` 1,000,000 each - 30,000,000







- 624,000,188

Unsecured

Term loans from other parties (Also, refer note (a) below) - 273,807,270

Debentures (Also, refer note (a) below)


19% Redeemable non convertible debentures of ` 1,000,000 each - 150,000,000



- 620,000,000

- 11,773,793,119

Less: Classified as Other current liabilities (Refer note 6)

Current maturities of long term borrowings

From banks - 4,445,502,696

From other parties - 999,727,475

Current maturities of finance lease obligations - 2,496,716

Current maturities of debentures - 512,750,188

- 5,960,477,075

- 5,813,316,044

a) Refer note 29 for details of security and terms of repayment.

b) Disclosure in respect of finance lease obligations

The lease payments are determined on the basis of the lease agreements entered into with the constituents and the future lease commitments are given below:

PARTICULARS MINIMUMPAYMENTS

MINIMUMPAYMENTS

Payable not later than 1 year - 2,979,002

Payable later than 1 year but not later than five years - 2,526,930

- 5,505,932

Less : Amounts representing interest - (770,297)

- 4,735,635

Represented as

- Current maturities of finance lease obligations - 2,496,716

- Finance lease obligations under long term borrowings - 2,238,919

Finance lease obligations (Also, see note 8) are secured by the related assets held under finance lease. Future minimum finance lease payments at the end of each reporting period have been disclosed above.



06 OTHER LIABILITIES


LONG-TERM CURRENT LONG-TERM CURRENT

IN ` IN ` IN ` IN `

Current maturities of long term borrowings (Also, refer note 5)

From banks - - - 4,445,502,696

From other parties - - - 999,727,475

Current maturities of finance lease obligations (Also, refer note 5)

- - - 2,496,716

Current maturities of debentures (Also, refer note 5) - - - 512,750,188

Security deposits from employees 19,375,615 2,826,798 17,050,116 2,356,825

Derivative liability - - 9,146,185 -

Unrealised gain on loan transfer transactions - 15,353,307 6,579,452 261,578,129

Interest accrued but not due on borrowings - - - 106,005,672

Payables towards securitisation/assignment transactions and management of loans receivables

- 522,883,655 - 791,691,939

Employee related payables - 49,895,284 - 21,408,897

Statutory dues payable - 10,969,019 - 20,963,181

Other payables - 16,268,118 - 59,309,486

19,375,615 618,196,181 32,775,753 7,223,791,204

07 PROVISIONS


LONG-TERM SHORT-TERM LONG-TERM SHORT-TERM

IN ` IN ` IN ` IN `

Provision against loan portfolio # - - 6,237,303 80,944,111

Provision for income tax (net of advance tax) - - - 71,368,507

Provision for non-performing assets # - - - 223

Provision for gratuity (Refer note b) 16,494,281 13,429,414 - 3,774,485

16,494,281 13,429,414 6,237,303 156,087,326

# The Company is no longer registered with RBI under Section 45IA of the Reserve Bank of India Act, 1934. Accordingly, the requirement to create provision for loan losses in accordance RBI regulation on Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances is not applicable as at 31 March 2017. Consequently, no loan loss provision has been made during the year and balance in provision against loan portfolio and non-performing assets has been written back to the statement of profit and loss.

a) Movement in

AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

(i) Provision against loan portfolio

Opening balance 87,181,414 61,374,131

Add: Provision made during the year - 25,807,283

Less: Reversed during the year (Also refer note 22) (87,181,414) -

- 87,181,414

(ii) Provision for non-performing assets

Opening balance 223 3,963.0

Add: Provision made during the year - 3,703,294

Less: Reversed/Utilised during the year (Also refer note 22) (223) (3,707,034)

- 223



b) Employee benefits

The Company has taken a group gratuity for its employees with the Life Insurance Corporation of India (LIC). Under this policy the eligible employees are entitled to receive gratuity payments upon their resignation or death in lump sum after deduction of necessary taxes up to a maximum limit of ` 1,000,000.

The following table set out the status of the gratuity plan as required under Accounting Standard (AS) - 15 - Employee benefits and the reconciliation of opening and closing balances of the present value of the defined benefit obligation.

AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Change in projected benefit obligation

Projected benefit obligation at the beginning of the year 67,276,098 49,768,170

Service cost 9,250,732 6,995,470

Interest cost 5,031,342 3,802,399

Benefits paid (5,543,423) (2,038,935)

Actuarial loss 26,571,318 8,748,994

Projected benefit obligation at the end of the year 102,586,067 67,276,098

Change in plan assets



Actuarial loss 110,784 (528,969)

Contributions made 9,140,822 2,982,326

Benefits paid (5,543,423) (2,038,935)


Reconciliation of present value of obligation on the fair value of plan assets

Present value of projected benefit obligation at the end of the year (102,586,067) (67,276,098)

Funded status of the plan 72,662,372 63,501,613

(Liability)/Asset recognised in the balance sheet (29,923,695) (3,774,485)

Components of net gratuity costs are

Service cost 9,250,732 6,995,470

Interest cost 5,031,342 3,802,399

Expected returns on plan assets (5,452,576) (5,247,981)

Recognized net actuarial gain 26,460,534 9,277,963

Net gratuity costs (Refer note 18) 35,290,032 14,827,851

Assumptions used

Discount rate 6.90% 7.80%

Long-term rate of compensation increase 8.00% 5.00%

Attrition rate 15.00% 15.00%

Rate of return on plan assets 8.20% 9.00%

Average remaining life (in years) 32 33

The following table sets out the status of the Gratuity Plan and the amounts recognized in the financial statement:

In `

AS AT

PARTICULARS 31 MARCH 2017 31 MARCH 2016 31 MARCH 2015 31 MARCH 2014 31 MARCH 2013


Plan asset 72,662,372 63,501,613 57,839,210 42,924,725 39,864,730

Fund status of plan - (liability)/asset (29,923,695) (3,774,485) 8,071,040 870,034 4,061,619



08 TANGIBLE ASSETS

In `

FREEHOLD LAND @

COMPUTERS & ACCESSORIES

FURNITURE AND FITTINGS

OFFICE EQUIPMENT

VEHICLES TOTAL

GROSS BLOCK

As at 01 April 2015 - 52,176,378 29,819,509 31,791,483 30,908,480 144,695,850

Additions - 20,548,456 4,475,392 7,402,631 10,839,031 43,265,510

Transfer from assets held for sale ** 37,613,550 - - - - 37,613,550

Disposals - (13,273,030) (2,131,574) (3,288,224) (132,750) (18,825,578)

As at 31 March 2016 37,613,550 59,451,804 32,163,327 35,905,890 41,614,761 206,749,332

Additions - 24,339,390 6,029,933 9,066,402 2,298,334 41,734,059

Disposals - (226,924) (608,131) (2,046,560) (84,053) (2,965,668)

As at 31 March 2017 37,613,550 83,564,270 37,585,129 42,925,732 43,829,042 245,517,723

ACCUMULATED DEPRECIATION

As at 01 April 2015 - 44,693,359 23,941,656 23,827,606 14,390,561 106,853,182

Depreciation charge - 7,326,158 4,056,028 5,397,387 5,281,893 22,061,466

Reversal on disposal of assets - (13,163,097) (1,967,550) (3,253,792) (111,354) (18,495,793)

As at 31 March 2016 - 38,856,420 26,030,134 25,971,201 19,561,100 110,418,855

Depreciation charge 13,291,726 4,328,967 5,506,030 5,234,945 28,361,668

Reversal on disposal of assets (226,923) (557,366) (1,934,548) (70,958) (2,789,795)

As at 31 March 2017 - 51,921,223 29,801,735 29,542,683 24,725,087 135,990,728

NET BLOCK

As at 31 March 2016 37,613,550 20,595,384 6,133,193 9,934,689 22,053,661 96,330,477

As at 31 March 2017 37,613,550 31,643,047 7,783,394 13,383,049 19,103,955 109,526,995

AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

IN ` IN `

Assets acquired under finance lease (Also, refer note 5(b)

Vehicles

Gross block - 14,100,459

Accumulated depreciation - 2,406,493

Net block - 11,693,966

Depreciation charges for the year - 1,151,878

@ The Company has received an order during financial year 2012-13 from the Tiruchirappalli Corporation citing encroachment of land. In response to this the Company has filed a petition with the High Court of Madras (Madurai Bench) for stay and quash of the Order for which an interim stay has been granted.

** Reclassified from assets held for sale pursuant to resolution passed in the board meeting dated 30 May 2016.



09 INTANGIBLE ASSETSIn `

GOODWILL SOFTWARE TOTAL

GROSS BLOCK

As at 01 April 2015 122,415,000 24,664,200 147,079,200

Additions - 5,325,328 5,325,328

As at 31 March 2016 122,415,000 29,989,528 152,404,528

Additions - 2,040,773 2,040,773

As at 31 March 2017 122,415,000 32,030,301 154,445,301

ACCUMULATED AMORTISATION

As at 01 April 2015 122,415,000 17,299,918 139,714,918

Amortisation charge - 3,568,586 3,568,586

As at 31 March 2016 122,415,000 20,868,504 143,283,504

Amortisation charge - 2,967,229 2,967,229

As at 31 March 2017 122,415,000 23,835,733 146,250,733

NET BLOCK

As at 31 March 2016 - 9,121,024 9,121,024

As at 31 March 2017 - 8,194,568 8,194,568

10 DEFERRED TAX ASSETS (NET)

AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Timing difference between depreciation and amortisation as per financials and as per tax 13,544,245 15,843,593

Provision for employee benefits 10,355,992 1,306,274

Provision for loan losses - 30,584,814

23,900,237 47,734,681

11 LOAN RECEIVABLES



IN ` IN ` IN ` IN `

Unsecured, considered good

Loan receivables - - 623,730,339 8,060,804,917

- - 623,730,339 8,060,804,917

12 LOANS AND ADVANCES


LONG-TERM SHORT-TERM LONG-TERM SHORT-TERM

IN ` IN ` IN ` IN `


Capital advances 2,099,712 - - -

Rental deposits - 33,274,882 - 31,477,675

Loans to employees 1,586,688 25,593,989 1,746,995 27,101,294

Loan to employee welfare trust (Also, refer note 28) - - - 4,757,832

Prepaid expenses - 6,544,870 - 5,302,565

Balances with government authorities - 15,129,751 - 1,102,000

Advance income tax (net of provision) - 45,400,917 - -

Other advances 59,750 5,048,722 59,750 163,649,904

3,746,150 130,993,131 1,806,745 233,391,270



13 OTHER ASSETS



IN ` IN ` IN ` IN `

Non-current bank balances (Also, refer note 15) 24,836,170 - 838,148,200 -

Deposits held with financial institutions - - 62,000,000 17,300,000

Unamortised costs - - 60,305,647 67,807,164

Interest strip retained on securitisation of receivables - 16,140,428 15,548,012 259,929,817

Interest accrued but not due on

- Bank deposits - 9,096,049 54,569,434 31,181,981

- Loan receivables - - - 24,780,021

24,836,170 25,236,477 1,030,571,293 400,998,983

14 TRADE RECEIVABLES

AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

IN ` IN `


Due for period exceeding six months - -

Others (Also, refer note 28) 109,589,516 9,078,919

109,589,516 9,078,919


AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

IN ` IN `


Cash on hand 1,156,682 2,441,688

Balances with banks

- in current accounts 1,211,789,512 3,546,129,292

- in deposit accounts (with maturity up to 3 months) 465,000,000 -

A 1,677,946,194 3,548,570,980

Other bank balances

Balances with bank held as security against borrowings and other commitments 220,010,540 1,582,156,011

Balances with banks in restricted accounts 24,836,170 19,652,868

244,846,710 1,601,808,879

Less : Amounts disclosed as ‘Other non-current assets’ (Refer note 13) (24,836,170) (838,148,200)

B 220,010,540 763,660,679

A + B 1,897,956,734 4,312,231,659




YEAR ENDED 31 MARCH 2017


IN ` IN `

Interest income on

- Loans given 1,548,712,476 2,204,117,826

- Fixed deposits with banks 89,813,320 155,232,585

Loan processing fees 140,548,128 239,688,468

Income from managed portfolio 252,524,457 422,487,955

Commission income 17,282 16,975,636

Service fee for management of loan receivables 591,426,769 47,539,047

2,623,042,432 3,086,041,517

17 OTHER INCOME



IN ` IN `

Interest income on

- Staff loans 4,318,194 4,318,483

- Income tax refund - 741,368

Other non-operating income 1,479,383 518,451

Net gain on foreign currency transaction and translation 629,439 -

Gain on mark to market valuation (Also, refer note 2(l)) - 15,848,150

6,427,016 21,426,452




IN ` IN `

Salaries and wages 779,812,463 631,463,125

Gratuity expense (Also, refer note 7(b)) 35,290,032 14,827,851

Contribution to provident and other funds 58,142,956 43,356,859


933,176,861 741,742,575

19 FINANCE COSTS



IN ` IN `

Interest expenses 871,991,884 1,233,524,785

Other borrowing costs 115,918,739 138,728,834

987,910,623 1,372,253,619

20 DEPRECIATION AND AMORTISATION EXPENSE



IN ` IN `

Depreciation of tangible assets (Also, refer note 8) 28,361,668 22,061,466

Amortisation of intangible assets (Also, refer note 9) 2,967,229 3,568,586

31,328,897 25,630,052



21 OTHER EXPENSESYEAR ENDED

31 MARCH 2017YEAR ENDED

31 MARCH 2016

IN ` IN `

Power and fuel 9,231,110 8,078,303

Rent and amenities 50,201,322 42,092,492

Repairs and maintenance - Others 32,714,644 34,095,933

Net loss on foreign currency transaction and translation - 27,261,469

Insurance 1,004,429 233,398

Rates and taxes 3,977,889 5,015,401

Legal and professional charges 23,018,205 16,447,276

Payments to auditors (Also, refer note 23) 2,750,300 3,886,556

Business promotion expenses 17,803,240 27,184,893

Client welfare expenses 17,437,247 25,826,360

Directors sitting fees 1,741,217 2,906,340

Traveling, conveyance and lodging expenses 79,146,737 54,329,791

Postage and courier 2,376,850 2,069,245


Communication expenses 9,444,052 6,797,740

Bad debts written off 2,428,309 -

Provision for loan losses, net - 29,510,577

Contribution towards corporate social responsibility (Also, refer note 33) 6,740,902 3,022,859


281,199,090 305,030,030

22 EXCEPTIONAL ITEMS (INCOME)/EXPENSEYEAR ENDED


31 MARCH 2016

IN ` IN `

Derivative liability written back (9,146,185) -

Provisions no longer required, written back (87,181,637) -

Other finance costs 248,191,089 -

Other borrowing costs 35,000,000 -

186,863,267 -

The Company has disclosed the above items which pertain to ceasure of NBFI activity as “exceptional” items considering its relevance to explain the performance of the Company.

23 PAYMENTS TO AUDITORS (EXCLUDING SERVICE TAX)YEAR ENDED


31 MARCH 2016

IN ` IN `

Statutory audit * 1,900,000 3,300,000

Limited review 700,000 500,000


2,750,300 3,886,556

* includes additional billing pertaining to previous year Nil (2015-16: ` 300,000)

24 EXPENDITURE IN FOREIGN CURRENCY (ACCRUAL BASIS)YEAR ENDED


31 MARCH 2016

IN ` IN `

Traveling expenses - 386,649

Interest expenses 14,587,765 23,016,980

14,587,765 23,403,629

25 PAYABLES TO MICRO AND SMALL ENTERPRISESBased on the information available with the Company, as at 31 March 2017, there are no suppliers who are registered as micro and small enterprises under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006.



26 EARNINGS PER EQUITY SHARE



IN ` IN `

Profit after tax (in `) 124,133,270 420,134,036

Less: Preference dividend (in `) (5,782,784) (4,076,712)

Profit attributable to equity shareholders (in `) 118,350,486 416,057,324

Weighted average number of equity shares in calculating basic EPS 5,579,996 5,579,996

Dilutive effect of potential equity shares - -

Weighted average number of equity shares in calculating diluted EPS 5,579,996 5,579,996

Nominal value of shares (In `) 10 10

Earnings per equity share (In `)

- Basic 21.21 74.56

- Diluted 21.21 74.56

27 SEGMENT REPORTINGThe Company has considered business segments as the primary segments for disclosure on the basis that the risk and returns of the Company is primarily determined by the nature of products and services. The products included in each of the reported domestic business segments are as follows:

1. NBFI activity - Providing micro loans to women borrowers

2. Business correspondence - provide business correspondence services.

The Company operates only in India and hence does not disclose geographic segment reporting.

Fixed assets used in the Company’s business, assets or liabilities contracted in the course of business, other than those specifically identifiable, have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to such assets and liabilities since a meaningful segregation of the available data is onerous.

Revenue and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other costs, wherever allocable, are apportioned to the segments on an appropriate basis. Certain income and expenses are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company believes that it is not practicable to provide segment disclosures relating to such income and expenses, and accordingly such income and expenses are separately disclosed as ‘unallocated’.

The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

BUSINESS SEGMENT IN `

YEAR ENDED 31 MARCH 2017 YEAR ENDED 31 MARCH 2016

PARTICULARS NBFI ACTIVITY BUSINESS CORRESPONDENCE

UNALLOCATED TOTAL NBFI ACTIVITY BUSINESS CORRESPONDENCE

UNALLOCATED TOTAL

REVENUE

Revenue from operations 562,685,281 17,282 562,702,563 38,037,310 16,975,636 55,012,946

Discontinuing operations 2,060,339,869 2,060,339,869 3,031,028,571 3,031,028,571

TOTAL REVENUE 2,060,339,869 562,685,281 17,282 2,623,042,432 3,031,028,571 38,037,310 16,975,636 3,086,041,517

RESULTS

Segment result 257,376,524 13,562,747 3,633,535 274,572,806 659,711,538 38,037,310 16,975,636 714,724,484

Unallocated corporate expenses (65,582,096) (65,582,096) (51,912,791) (51,912,791)

Profit before tax 257,376,524 13,562,747 (61,948,561) 208,990,710 659,711,538 38,037,310 (34,937,155) 662,811,693

Income taxes (84,857,440) (84,857,440) (242,677,657) (242,677,657)

Profit for the year 257,376,524 13,562,747 (146,806,001) 124,133,270 659,711,538 38,037,310 (277,614,812) 420,134,036

OTHER INFORMATION

Segment assets 245,212,245 1,321,384,455 772,841,954 2,339,438,654 13,305,681,624 355,901,384 1,164,217,299 14,825,800,307

Segment liabilities 103,068,479 435,168,483 129,258,529 667,495,491 13,035,976,133 - 196,231,497 13,232,207,630

Capital expenditure - - - 49,233,508 - - - 48,590,838

Depreciation and amortisation - - - 31,328,897 - - - 25,630,052

Other non-cash expenses - - - 37,718,341 - - - 44,338,428



28 RELATED PARTIES DISCLOSURES

a) Names of related parties

RELATIONSHIP NAME

Holding Company IDFC Bank Limited (from 13 October 2016)

Key management personnel (KMP) S Devaraj - Chairperson

Arjun Muralidharan - Managing Director and CEO

S Pattabiraman - President and Chief Financial Officer (till 13 October 2016)

Entities in which directors of the Company are able to exercise control or have significant influence

Grama Vidiyal Enterprises Private Limited

Grama Vidiyal Trust

Grama Vidiyal Employees’ Welfare Trust

Relatives of KMP D Shirley - Daughter of S Devaraj (Whole Time Director till 13 October 2016) D Satish - Son of S Devaraj and Brother of D Shirley

b) Transactions with related partiesIn `

TRANSACTION RELATED PARTY YEAR ENDED 31 MARCH 2017


Service Income IDFC Bank Limited 451,509,542 -

Remuneration S Devaraj 19,600,000 16,138,116

S Pattabiraman 4,378,065 8,186,594

Arjun Muralidharan 11,472,000 7,756,594

D Shirley 10,510,000 7,526,594

D Satish 3,135,051 2,300,086

Expenses / (income)

Rent and amenities Grama Vidiyal Trust 3,988,800 3,456,000

Repairs and maintenance - Others Grama Vidiyal Trust 2,861,952 2,304,000

Commission income Grama Vidiyal Enterprises Private Limited - (5,336,261)

c) Outstanding balances as at year end

In `

TRANSACTION RELATED PARTY AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

Trade receivable IDFC Bank Limited 105,388,697 -

Fixed deposits including accured interest IDFC Bank Limited 466,446,520 -

Managed portfolio payable IDFC Bank Limited 434,683,561

Bank balances IDFC Bank Limited 638,951,232 -

Incentive payable S Devaraj 8,500,000 529,782

Incentive payable S Pattabiraman - 176,594

Incentive payable Arjun Muralidharan 3,500,000 176,594

Incentive payable D Shirley 3,250,000 176,594

Incentive payable D Satish 767,300 -

Loans given Grama Vidiyal Employees’ Welfare Trust - 4,757,832

Rental deposit Grama Vidiyal Trust 4,000,000 4,000,000

29 DISCLOSURES REGARDING DERIVATIVE INSTRUMENTSThe particulars of derivative contracts entered into for hedging purposes outstanding as at 31 March 2017 are as under:-

AMOUNT OF EXPOSURES HEDGED

CATEGORY OF DERIVATIVE INSTRUMENTS AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

For hedging foreign currency and interest rate risks:

Cross currency interest rate swap

In ` - 476,767,720

In foreign currency (USD) - 7,187,500



30 DETAILS OF SECURITY, REPAYMENT TERMS, APPLICABLE INTEREST RATES.

A. TERM LOANS AND OTHER LOANS

SL. NO.

REPAYMENT TERMS

AMOUNT PER

INSTALMENT `

NUMBER OF INSTALMENTS

COMMENCEMENT MONTH

INTEREST RATE PER

ANNUM

NATURE OF THE SECURITY LOAN AMOUNT `

OUTSTANDING AS AT

31 MARCH 2017

`

31 MARCH 2016

`

1 Monthly 4,166,666 24 Apr-15 15.60% Book debt 100,000,000 - 54,166,663

2 Monthly 4,166,666 24 Apr-15 15.60% Book debt 100,000,000 - 54,166,663

3 Monthly 2,083,333 24 Jul-15 15.60% Book debt and PDC 50,000,000 - 31,250,003

4 Monthly 6,250,000 24 Sep-15 15.60% Book debt and PDC 150,000,000 - 106,250,000

5 Monthly 2,916,667 24 Dec-15 15.60% Book debt and PDC 70,000,000 - 58,333,332

6 Monthly 6,250,000 24 Apr-16 15.60% Book debt and PDC 150,000,000 - 150,000,000

7 Monthly 5,290,000 18 Nov-14 14.69% Book debts and cash collateral 85,000,000 - 10,384,928

8 Monthly 3,107,000 18 Apr-15 14.48% Book debts and cash collateral 50,000,000 - 17,910,705

9 Monthly 3,728,000 18 May-15 14.48% Book debts and cash collateral 60,000,000 - 24,908,631

10 Monthly 4,350,000 18 Aug-15 14.48% Book debts and cash collateral

of 5%

70,000,000 - 40,775,885

11 Monthly 4,350,000 18 Apr-16 14.48% Book debts and cash collateral

of 5%

70,000,000 - 70,000,000

12 Monthly 2,894,000 24 Dec-15 14.48% Book debts and cash collateral

of 5%

60,000,000 - 51,172,667


of 5%

50,000,000 - 50,000,000


of 5%

50,000,000 - 50,000,000

15 Monthly 10,833,333 12 Jan-16 13.50% Book debts and cash collateral

of 10%

130,000,000 - 97,500,000

16 Monthly 18,333,333 12 Jan-16 13.50% Book debts and cash collateral

of 10%

220,000,000 - 165,000,000

17 Monthly 2,800,000 36 Jul-14 12.15% Book debts and cash collateral

of 10%

100,000,000 - 41,666,683


of 10%

150,000,000 - 100,008,000

19 Monthly 6,944,444 36 Oct-15 12.50% Book debts and cash collateral

of 10%

250,000,000 - 208,333,336

20 Monthly 20,000,000 30 Sep-16 12.50% Book debts and cash collateral 600,000,000 - 600,000,000

21 Half yearly 83,333,333 6 Jul-16 11.50% Book debt 500,000,000 - 500,000,000

22 Half yearly 83,333,333 6 Jul-16 11.50% Book debt 500,000,000 - 500,000,000

23 Quarterly 25,000,000 20 Sep-11 12.45% Book Debts And Cash

Collateral

500,000,000 - 50,000,000

24 Quarterly 12,500,000 20 Jun-15 12.45% Book Debts And Cash

Collateral

250,000,000 - 212,499,846


Collateral

250,000,000 - 107,142,857

26 Quarterly 28,571,428 6 Dec-15 13.75% Book debts and cash collateral

of 5%

200,000,000 - 142,857,144

27 Quarterly 35,714,286 7 Aug-16 13.65% Book debts and cash collateral

of 5%

250,000,000 - 250,000,000

28 Quarterly 10,000,000 20 Dec-11 12.50% Book Debts 200,000,000 - 30,000,000

29 Quarterly 7,692,308 13 Jun-14 13.50% Book debts 100,000,000 - 38,461,538


Collateral

100,000,000 - 50,000,000

31 Quarterly 12,500,000 8 May-16 13.00% Book debts and cash collateral

of 10%

100,000,000 - 99,999,969

32 Quarterly 7,000,000 19 Apr-13 14.20% Book Debts; Cash collateral

of 10%

133,800,000 - 46,976,730



SL. NO.

REPAYMENT TERMS

AMOUNT PER

INSTALMENT `


COMMENCEMENT MONTH

INTEREST RATE PER

ANNUM


OUTSTANDING AS AT

31 MARCH 2017

`

31 MARCH 2016

`

33 Quarterly 5,000,000 20 Sep-14 12.25% Book Debts And Cash

Collateral

100,000,000 - 70,000,000

34 Quarterly 12,500,000 8 May-15 13.15% Book Debts 100,000,000 - 49,976,435

35 Quarterly 12,500,000 8 Feb-16 13.15% Book Debts 100,000,000 - 87,655,721

36 Quarterly 12,500,000 8 Jun-16 13.15% Book Debts 100,000,000 - 100,000,000

37 Quarterly 5,000,000 20 Dec-13 14.40% Book Debts And Cash

Collateral

100,000,000 - 55,000,000

38 Quarterly 6,845,000 19 Feb-16 12.40% Book Debts; Cash collateral

of 10%

130,000,000 - 123,323,175

39 Quarterly 12,500,000 8 Aug-14 13.20% Book Debts And Cash

Collateral

100,000,000 - 12,500,000

40 Quarterly 31,250,000 8 Oct-14 12.85% Book Debts And Cash

Collateral

200,000,000 - 93,750,000

41 Quarterly 27,500,000 8 Dec-15 12.90% Book debts and cash collateral

of 5%

220,000,000 - 165,000,000

42 Quarterly 27,500,000 8 Feb-16 12.90% Book debts and cash collateral

of 5%

220,000,000 - 192,500,000

43 Quarterly 7,250,000 8 Jun-16 12.90% Book debts and cash collateral

of 5%

58,000,000 - 58,000,000


45 Quarterly 8,333,333 12 Dec-15 13.60% Book Debts 100,000,000 - 91,709,577


47 Quarterly 6,700,000 12 Mar-14 13.20% Book debts 80,000,000 - 26,031,320

48 Quarterly 25,000,000 10 Sep-15 12.30% Book Debts 250,000,000 - 198,522,079

49 Quarterly 62,500,000 8 May-16 12.30% Book Debts 500,000,000 - 500,000,000


Collateral

200,000,000 - 126,315,795

51 Quarterly 10,526,315 19 Apr-15 12.20% Book Debts And Cash

Collateral

200,000,000 - 157,894,740

52 Quarterly 7,894,736 19 Mar-16 12.20% Book Debts And Cash

Collateral

150,000,000 - 142,105,264

53 Quarterly 8,400,000 12 Mar-14 12.15% Book debts 100,000,000 - 24,400,000

54 Quarterly 13,636,000 12 Jun-15 12.15% Book Debts; Cash collateral

of 10%

150,000,000 - 95,456,000

55 Quarterly 18,750,000 8 May-16 12.15% Book Debts; Cash collateral

of 10%

150,000,000 - 150,000,000

56 Monthly 3,125,000 16 May-15 13.85% Book Debts And Cash

Collateral

50,000,000 - 15,625,000

57 Monthly 1,250,000 16 Jun-15 13.35% Book Debts And Cash

Collateral

20,000,000 - 7,500,000

58 Quarterly 8,333,333 12 Nov-13 13.85% Book debts 100,000,000 - 7,810,000

59 Quarterly 12,500,000 20 Apr-15 14.35% Book Debts And Cash

Collateral

250,000,000 - 194,298,000

60 Quarterly 18,750,000 16 Dec-13 13.05% Book debts 300,000,000 - 112,500,000

61 Monthly 12,500,000 24 Apr-15 11.25% Book Debts And Cash

Collateral

300,000,000 - 150,000,000

62 Monthly 7,812,500 24 Apr-16 11.50% Book Debts; Cash collateral

of 10%

187,500,000 - 187,500,000

63 Quarterly 10,000,000 20 Dec-13 12.70% Book debts 200,000,000 - 110,000,000

64 Quarterly 7,500,000 20 Jun-14 12.70% Book debts 150,000,000 - 97,379,535

65 Quarterly 18,200,000 12 Mar-16 12.70% Book Debts; Cash collateral

of 10%

200,000,000 - 181,800,000

66 Monthly 31,250,000 24 Dec-14 12.50% Book Debts And Cash

Collateral

750,000,000 - 281,250,000



SL. NO.

REPAYMENT TERMS

AMOUNT PER

INSTALMENT `


COMMENCEMENT MONTH

INTEREST RATE PER

ANNUM


OUTSTANDING AS AT

31 MARCH 2017

`

31 MARCH 2016

`


Collateral

500,000,000 - 291,666,670

68 Monthly 20,833,333 24 Feb-16 12.75% Book debts and cash collateral

of 5%

500,000,000 - 458,333,333

69 Monthly 7,812,500 32 May-14 13.65% Book Debts; Cash collateral

of 10%

250,000,000 - 77,803,703

70 Monthly 3,125,000 32 Oct-15 13.65% Book Debts; Cash collateral

of 10%

100,000,000 - 81,047,765

71 Quarterly 6,667,000 12 Sep-13 13.00% Book debts 80,000,000 - 13,330,000


of 10%

100,000,000 - 94,736,000


of 10%

100,000,000 - 94,736,000

74 Quarterly 20,000,000 10 Sep-16 13.50% Book debts 200,000,000 - 200,000,000

75 Monthly 4,583,333 24 May-15 14.50% Book debts and cash collateral

of 5%

110,000,000 - 63,496,929

76 Monthly 6,250,000 24 Dec-15 14.25% Security Post Dated Cheques 150,000,000 - 127,855,793

77 Monthly 634,921 63 May-15 18.00% Unsecured 40,000,000 - 35,422,004

78 Monthly 8,333,333 24 Aug-15 13.50% Book Debts; Cash collateral

of 10%

200,000,000 - 133,333,336

79 Monthly 7,777,778 18 Aug-15 15.75% Book Debts; Cash collateral

of 7%

140,000,000 - 81,812,349

80 Quarterly 6,250,000 8 Jun-16 12.25% Book Debts; Term Deposit

Receipt of 5%

50,000,000 - 50,000,000

81 Monthly 312,500 48 Jun-15 15.50% Book Debts And Cash

Collateral

15,000,000 - 12,650,670

82 Monthly 250,000 60 Mar-16 15.00% Book debts and cash collateral

of 5%

15,000,000 - 14,830,650

83 , 4,166,700 18 Dec-14 13.50% Book Debts And Cash

Collateral

75,000,000 - 12,499,500


Collateral

50,000,000 - 4,166,674

85 Monthly 16,666,666 12 Dec-14 13.30% Book Debts 200,000,000 - -

86 Quarterly 12,500,000 12 Aug-14 14.50% Book Debts And Cash

Collateral

50,000,000 - -

87 Monthly 1,871,000 18 May-14 14.95% Book Debts And Cash

Collateral

30,000,000 - -

88 Monthly 5,882,353 17 Aug-14 16.00% Book Debts and Personal

Guarantee.

100,000,000 - -

89 Quarterly 8,333,333 12 Jun-13 15.25% Book Debts; Cash collateral

of 5%

100,000,000 - -

90 Quarterly 31,250,000 8 Apr-14 13.75% Book debts 250,000,000 - -

91 Monthly 15,000,000 12 Jun-14 13.30% Book Debts & Cash collateral 180,000,000 - -

92 Quarterly 8,750,000 8 Oct-13 14.25% Book debts 70,000,000 - -

93 Quarterly 5,000,000 12 Oct-10 14.00% Book Debts; Cash collateral

of 5%

70,000,000 - -

94 Quarterly 25,000,000 20 Oct-06 13.00% Book Debts; Cash collateral

of 10%

500,000,000 - -

95 Monthly 7,692,308 13 Apr-14 16.00% Book Debts 100,000,000 - -

96 Monthly 5,882,353 17 Jul-14 16.00% Book Debts 100,000,000 - -

97 Quarterly 35,714,286 7 Jul-14 13.05% Book debts 250,000,000 - -

98 Monthly 5,042,000 18 Oct-13 15.33% Book Debts 90,000,000 - -





SL. NO.

REPAYMENT TERMS

AMOUNT PER

INSTALMENT `


COMMENCEMENT MONTH

INTEREST RATE PER

ANNUM


OUTSTANDING AS AT

31 MARCH 2017

`

31 MARCH 2016

`

101 Quarterly $156,250 12 Mar-16 3 month

LIBOR +

420 bps

Book debts 231,996,328 - 238,382,454

102 Quarterly $156,250 12 Mar-16 3 month

LIBOR +

420 bps

Unsecured 231,996,328 - 238,385,266

- 10,525,057,296

Note: For interest rates on floating basis, rates disclosed above represents the rate of interest as at 31 March 2016

AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

IN ` IN `

Classified as

Long term borrowings (Also, refer note 5)

Term loans (Also, refer note 5)

- From banks (secured) - 8,597,068,866

- From other parties

Secured - 1,654,181,160

Unsecured - 273,807,270

- 10,525,057,296

B. DEBENTURES

SL NO

REPAYMENT TERMS

AMOUNT PER

INSTALMENT `


COMMENCEMENT MONTH

INTEREST RATE PER

ANNUM


OUTSTANDING AS AT

31 MARCH 2017

`

31 MARCH 2016

`

1 One time

payment

30,000,000 1 Dec-20 14.75%

First ranking exclusive charge

over the Hypothecated

Property, which shall be

equal to the value of the

Outstanding Principal amount

multiplied by 1.1 times.

30,000,000 - 30,000,000

2 Monthly 1,25,00,000 16 Oct-15 11.84% 200,000,000 - 125,000,000

3 Monthly 1,04,16,667 24 Oct-15 12.75% 250,000,000 - 187,500,000

4 Monthly 62,50,000 24 Oct-15 13.02% 150,000,000 - 112,500,000

5 Monthly 3,500,000 24 Aug-14 13.25% 84,000,000 - 14,000,028

6 Monthly 4,166,700 24 Oct-14 13.25% 100,000,000 - 25,000,000

7 Quarterly 5,833,240 24 Jan-15 13.50% 140,000,000 - 46,666,760

8 Quarterly 4,166,700 24 Feb-15 13.25% 200,000,000 - 83,333,400

9 Half yearly 18,750,000 8 Mar-17 19.00% Unsecured 150,000,000 - 150,000,000

10 Half yearly 15,000,000 8 Mar-17 18.00% Unsecured 120,000,000 - 120,000,000

11 Half yearly 1,87,50,000 8 Feb-18 19.00% Unsecured 150,000,000 - 150,000,000

12 One time

payment

20,00,00,000 1 Dec-21 16.25% Unsecured 200,000,000 - 200,000,000

1,774,000,000 - 1,244,000,188

AS AT 31 MARCH 2017

AS AT 31 MARCH 2016

IN ` IN `

Classified as

Long term borrowings (Also, refer note 5)

Debentures

Secured - 624,000,188

Unsecured - 620,000,000

- 1,244,000,188



31 DISCONTINUING OPERATIONSThe Company was registered under the category of Non-Banking Financial Company - Micro Finance Institutions (“NBFC-MFI”) with RBI and the Company was engaged in the business of providing loans to women borrower which is the primary segment of business. Pursuant to the board approval dated 1 September 2016 the Board of Directors has approved the business plan of assignment of loan receivable to IDFC Bank Limited and the Board of Director has entered in to a Master Assignment Agreement for assignment of loan receivable balances as on 29 September 2016 to IDFC Bank Limited. Consequent to the above transactions, and further to the explanations provided in Note 1(a), the Company has surrendered its Certificate of Registration as an NBFI and discontinued the business of providing direct loans to borrowers.

The amounts of revenue and expenses in respect of the ordinary activities attributable to the discontinuing operation during the current financial reporting period.



IN ` IN `

REVENUE

Revenue from operations 2,060,339,869 3,031,028,571

Other income 2,810,763 21,426,452

TOTAL REVENUE 2,063,150,632 3,052,455,023

EXPENSES

Employee benefits expense 500,253,711 741,742,575

Finance costs 987,910,623 1,372,253,619

Other expenses 130,746,507 278,747,291

TOTAL EXPENSES 1,618,910,841 2,392,743,485

Profit before exceptional item and taxes 444,239,791 659,711,538

Exceptional item 186,863,267 -


Tax expense 102,442,093 241,593,273

Profit after tax 154,934,431 418,118,265

Net cash flows from:-

Operating activities 9,444,022,051 (1,236,121,210)

Financing activities (13,150,900,503) 2,833,532,600

Investing activities 76,690,138 (1,695,438,025)

Note: There were no gain/loss due to transfer of assets and liabilities pursuance to discontinuance of the above business.

The carrying amounts of total assets and liabilities of discontinuing operations are as follows:-

AS AT31 MARCH 2017

AS AT31 MARCH 2016

IN ` IN `

Total assets 245,212,245 13,305,681,624

Total liabilities 103,068,479 13,035,976,133

NET ASSETS 142,143,766 269,705,491

The company expects to realise the above assets and settle the liabilities pertaining to discontinuing operations before 31 March 2018.

32 CONTINGENT LIABILITIES

i. Credit enhancements provided by the Company towards assignment / securitisation transactions aggregating to ` 216,310,540 (cash collateral) (31 March 2016: ` 923,819,644 (cash collateral and principal subordination))

ii. Demand for service tax received from service tax authorities in respect of which the Company has gone for appeal is ` 32,324,580 (31 March 2016: ` 32,324,580). Based on the management assessment, crystallization of liability on these items is not considered probable and hence not acknowledged as debt by the Company.

iii. During the year the Company had received demand for Income tax for ` 14,861,720 in respect of which the Company has gone for appeal. Based on the management assessment, crystallization of liability on these items is not considered probable and hence not acknowledged as debt by the Company.



33 CORPORATE SOCIAL RESPONSIBILITYAs per Section 135 of the Companies Act, 2013, the Company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger, poverty and malnutrition, promoting health care and sanitation, promoting education, promoting gender equality, empowering women, destitute care and rehabilitation, ensuring environment sustainability, protection of national heritage, art and culture, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Companies Act, 2013. With the approval of CSR Committee, the funds were primarily allocated and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

Gross amount required to be spent by the Company during the year is ` 6,551,481 (previous year ` 2,602,890 ).

In `

Particulars IN CASH YET TO BE PAID TOTAL

For the year ended 31 March 2017

On construction/acquisition of any asset - - -

On purposes other than above 6,740,902 - 6,740,902

For the year ended 31 March 2016

On construction/acquisition of any asset - - -

On purposes other than above 3,022,859 - 3,022,859

34 DISCLOSURE ON SPECIFIED BANK NOTES (SBNS)During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R.308(E) dated 30 March 2017 on the details of SBN held and transacted during the period between 08 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification are given below:-

In `

PARTICULARS SBNS* OTHER DENOMINATION

NOTES

TOTAL

Closing cash in hand as on 08 November 2016 6,294,000 1,887,182 8,181,182

(+) Permitted receipts 818,802,000 3,280,343,950 4,099,145,950

(-) Permitted payments - 1,305,753,852 1,305,753,852

(-) Amount deposited in Banks 825,093,000 1,970,939,937 2,796,032,937

Closing cash in hand as on 30 December 2016 3,000 5,537,343 5,540,343

*For the purpose of this clause, the term “Specified Notes” shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407( E), dated 08 November 2016

This is the summary of significant policies and other explanatory information referred to in our report of event date.

For Walker Chandiok & Co LLPChartered Accountants(Registration No. 117366W/W-100018)






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This annual report is printed on Eco-Friendly Paper

IDFC LIMITED

www.idfc.com | [email protected]

REGISTERED OFFICE

KRM Tower, 7th floor

No.1 Harrington Road

Chetpet

Chennai 600 031

TEL +91 (44) 4564 4000

FAX +91 (44) 4564 4022

CORPORATE OFFICE

Naman Chambers, C-32, G-Block

Bandra-Kurla Complex

Bandra (East)

Mumbai 400 051

TEL +91 (22) 4222 2000

FAX +91 (22) 2654 0354

YT 17 - idfc.com · U65900TN2014PLC097942 Mr. Vinod Rai (Chairperson) Dr. Jaimini Bhagwati Mr....

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