IDFC ALTERNATIVES LIMITED - Infrastructure Finance · PDF fileIDFC AlternAtIves lImIteD | 3 Board's Report ... wholly owned subsidiary company namely IDFC Project Equity Company ...

2 | I D F C A n n u A l r e p o r t 2 0 1 4 – 2 0 1 5

IDFC AlternAtIves lImIteD

CIN U67190MH2002PLC137798

DIRECTORS Dr. Rajiv B. Lall - chairman Mr. Gautam Kaji Mr. Bharat Shah Mr. Vikram Limaye Mr. Sunil Kakar Mr. Sadashiv S. Rao Dr. Rajeev Uberoi

AUDITORS Deloitte Haskins & Sells LLP Chartered Accountants

PRINCIPAL BANKERS HDFC Bank Limited

REGISTERED 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 website www.idfc.com email id [email protected]

IDFC ALTERNATIVES LIMITED

I D F C A lt e r n A t I v e s l I m I t e D | 3

Board's Reportto tHe membersYour Directors have pleasure in presenting the Thirteenth Annual Report together with the audited financial statements for the year ended March 31, 2015.

FINANCIAL HIGHLIGHTS(Amount In `)

PARTICULARS For tHe yeAr enDeD

mArCH 31, 2015

For tHe yeAr enDeD

mArCH 31, 2014

Total Income 1,286,330,289 659,016,534

Less: Total Expenses 901,274,796 406,705,384

Profit before Tax 385,055,493 252,311,150

Less: Provision for Tax 157,853,158 63,992,000

Profit after Tax 227,202,335 188,319,150

COMPANY’S AFFAIRSYour Company continues to be one of the leading multi-asset class fund managers in India, with firm 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 five funds - IDFC Private Equity Fund II and IDFC Private Equity Fund III under the Private Equity asset class; India Infrastructure Fund and India Infrastructure Fund II under the Infrastructure Equity asset class; and IDFC Real Estate Yield Fund under the Real Estate asset class.FY15 has been very eventful from several viewpoints. In May 2014, we announced the final close of INR 7.5 billion for our maiden real estate fund, the IDFC Real Estate Yield Fund. The Fund had been entirely raised from retail investors and focuses on making opportunistic investments in the residential real estate segment in India. The investor response to the fund had been very enthusiastic - while the fund had an initial target size of INR 5.0 billion, we finished the fund raise process within a period of five months, closing the fund at its hard-cap of INR 7.5 billion. As at the close of the fiscal year, the fund had made 5 investments deploying ~ 50% of its capital. In September 2014, the Real Estate team added another feather in its cap by engineering a successful exit for IDFC Limited's proprietary investment of INR 6.88 billion in two projects at an investment IRR of 22% and a multiple of 1.34x.FY15 has been an excellent year for the Private Equity asset class as far as exits are concerned. During the year, the Private Equity team engineered as many as four total exits comprising Ashoka Buildcon, Krishna Godavari Gas, Green Infra Limited and Maharashtra Natural Gas, realising approximately ~INR 4.54 billion as gross proceeds. The exit in Green Infra deserves a special mention as this gives us a unique distinction of being the first private equity firm in India to have built a business from scratch, scaled it up to size, and to have achieved a commendable exit through a strategic sale. Investments made by the private equity funds - notably those in the consumption sector - continue to track healthy IRRs, and the team remains engaged in looking for opportunistic exits for all portfolio investments. Fiscal 2015 also witnessed the launch of our fourth private equity fund (and overall, the seventh fund from IDFC): “IDFC Private Equity Fund IV”, which will target attractive investment opportunities in the Consumption sector.It may be recollected that in December 2013, the Infrastructure team had achieved a first close of ~INR 39.58 billion for India Infrastructure Fund II, our second infrastructure-focused fund. It gives us great pleasure to report that in December 2014, we achieved a final close for the fund at a hard cap of INR 55 billion. The infrastructure team has already made three new commitments from this fund amounting to ~ INR 10.52 billion.The investment teams across asset classes continue to track attractive opportunities in their respective target sectors and aims to maximise value for all stakeholders.

OuTLOOkAfter remaining subdued for a rather sustained period, the Indian economy accelerated during fiscal year 2015, charting a YoY growth of 7.3%, with signs pointing to a Manufacturing and Services-led recovery that is expected to gain momentum in the current year. The Services sector continued to dominate GDP contribution, charting a growth rate of 10.2% in FY15, as compared to 9.1% in FY14. The Industry sector, which has traditionally been the laggard in GDP computation over the past few quarters, surprised positively by showing a significant pick-up of 6.1% in FY15 as compared to 4.5% in FY14. The Agriculture sector posed concerns after facing a deficient monsoon in the previous year and unseasonal rainfall and hailstorms in the current year, which damaged the standing crops: growth in agriculture was almost flat during the year with FY15 agriculture registering only a 0.2% growth over FY14. However, the potential for India’s economic growth continues to be endorsed by several international agencies, such as the World Bank, which projected India’s GDP to accelerate at 7.5% in CY15 and 7.8% and 8.0% in CY16 and CY17, respectively. Similarly, the International Monetary Fund projected India to grow at a steady rate 7.5% during CY15 and CY16. In light of benign developments such as narrowing trade and current account deficits, declining inflation, growing forex reserves and keen Government support for promoting investment and kick-starting the growth cycle, it is expected that India’s GDP would grow at a faster rate in the years to come.The private equity industry witnessed strong activity during the year. As per data released by Grant Thornton, the private equity industry invested USD 12.5 billion into Indian companies across 690 deals in FY15, in comparison to USD 10.8 billion invested across 493 deals in FY14. Investors


were active in a variety of sectors such as Healthcare, Real Estate, IT& ITeS, Consumer Services, etc. with sub-sectors such as Consumer Technology witnessing mega-deals leading both in deal value & volume. Private equity investors have also been very active during the year in securing opportunistic exits for their investments in the form of sale to strategic investors, open market transactions, etc. Additionally, as the exuberance in the secondary markets spills over to the primary markets, a number of private-equity backed companies have filed their draft offer documents with the Securities and Exchange Board of India preparing for their initial public offerings. Looking at the year ahead, private equity investors expect a further increase in deal activity, propelled by positive macroeconomic conditions, positive investor sentiment and an improved exit environment.

AMOuNT TO BE CARRIED FORWARD TO RESERVESThe details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.

DIVIDENDThe Directors do not recommend any dividend for the financial year ended March 31, 2015 as the Company has decided to reinvest its earnings.

PARTICuLARS OF EMPLOYEESThe Company had 59 employees as on March 31, 2015.

SuBSIDIARY COMPANIES / JOINT VENTuRES / ASSOCIATE COMPANIESAt the beginning of the financial year, the Company had one direct wholly owned subsidiary company namely IDFC Project Equity Company Limited (“IDFC PE”).On August 28, 2014, the entire equity stake of IDFC Primary Dealership Company Limited (“IDFC PD”) and IDFC Housing Finance Company Limited (“IDFC HFCL”) which was held by IDFC Limited, was acquired by the Company, thereby making IDFC PD and IDFC HFCL wholly owned subsidiaries of the company.On September 26, 2014 the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956 was filed with the Hon’ble High Court of Bombay to amalgamate IDFC PE, IDFC PD and IDFC HFCL with IDFC Alternatives Limited. The Hon’ble High Court of Bombay approved the amalgamation of the above entities on January 30, 2015.The objective of merger was to rationalize and streamline overall corporate structure of IDFC.Further as part of the IDFC Group restructuring, the entire equity stake of IDFC Capital (Singapore) Pte. Limited was transferred to IAL thereby making the said entity, wholly owned subsidiary of the Company.In view of the above changes, the Company had one wholly owned subsidiary, namely IDFC Capital (Singapore) Pte. Limited at the end of the Financial Year.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. During the year, the Company acquired 46% stake in IDFC Infra Debt Fund Limited, thereby making it an Associate Company.

SHARE CAPITAL uPDATEOn September 9, 2014, the Company issued and allotted on rights basis 169,850 equity shares of ` 10 each at a premium of ` 11,765 per share.

PuBLIC DEPOSITSThe Company has neither invited nor accepted any Public Deposits.

PARTICuLARS OF LOANS, GuARANTEES AND INVESTMENTSThere were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICYThe Board approved and adopted “Whistle Blower Policy”, which had already been adopted by IDFC Limited, the 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.

FOREIGN EXCHANGE EXPENDITuRE AND EARNINGSThe particulars regarding foreign exchange expenditure and earnings are furnished at Note no. 20 and 21 in the Notes forming part of the Financial Statements.

PARTICuLARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONSince 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.

Board's Report


DIRECTORS AND kEY MANAGERIAL PERSONNELIn accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Vikram Limaye (DIN – 00488534) and Dr. Rajeev Uberoi (DIN – 01731829) would retire by rotation at the ensuing AGM and being eligible, offers themself for re-appointment.The Board of Directors recommends re-appointment of Mr. Vikram Limaye (DIN - 00488534) and Dr. Rajeev Uberoi (DIN - 01731829), as Directors at the ensuing AGM.The Ministry of Corporate Affairs had, vide its circular no. 14/2014 dated June 9, 2014 clarified that the appointment of the existing Independent Directors (“IDs”) shall be made expressly under Section 149 (10)/(11) of the Companies Act, 2013 read with Schedule IV of the Companies Act, 2013 within one year from April 1, 2014 subject to compliance with eligibility and other prescribed conditions. Accordingly, subject to the approval of the Members at the AGM, the Board of Directors of the Company at its meeting held on October 28, 2014, accorded its consent to re-appoint Mr. Gautam Kaji (DIN - 02333127) and Mr. Bharat Shah (DIN - 00136969) as IDs of the Company under the Companies Act, 2013, for a period of two (2) consecutive years to hold office till the conclusion of the Fourteenth AGM of the Company to be held for FY16. The Shareholders of the Company at the Extra Ordinary General Meeting held on October 28, 2014 approved the appointment of Mr. Gautam Kaji (DIN - 02333127) and Mr. Bharat Shah (DIN - 00136969) as IDs of the Company.As per the provisions of the Companies Act, 2013, IDs are not liable to retire by rotation and the terms of appointment of IDs will be governed by the provisions of Companies Act, 2013. All IDs have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and placed at the Board Meeting of the Company held on April 23, 2015.On October 28, 2014, the Board of Directors of the Company designated Mr. M. K. Sinha, the Managing Partner & CEO and Mr. Manish Jindal, Chief Financial Officer as Key Managerial Personnel (“KMP”) of the Company for the purpose of compliance with the provisions of section 203 of the Companies Act, 2013.

BOARD AND AuDIT COMMITTEEDuring the year, four Board meetings and four Audit Committee meetings were convened and held. The gap between the two meetings was within the limit prescribed under the Companies Act, 2013.The Audit Committee of the Company comprises of the following members:1. Mr. Gautam Kaji (DIN - 02333127) - ID - Chairman2. Mr. Bharat Shah (DIN - 00136969) - ID3. Mr. Sunil Kakar (DIN - 03055561)

NOMINATION AND REMuNERATION COMMITTEEDuring the year, the Nomination and Remuneration Committee was constituted to comply with the provisions of the section 178 of the Companies Act, 2013 comprising of the following:1. Mr. Vikram Limaye (DIN - 00488534) - Chairman2. Mr. Gautam Kaji (DIN - 02333127) - ID3. Mr. Bharat Shah (DIN - 00136969) - ID4. Dr. Rajiv B. Lall (DIN - 00131782)

REMuNERATION POLICYThe Company has a policy in place for identification of Independence, qualifications and positive attributes of Directors. The Company is in the process of developing a Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees.

AuDITORSThe Shareholders of the Company at their meeting held on September 29, 2014 had approved the appointment of Deloitte Haskins & Sells LLP, Chartered Accountants, (Registration No. 117366W/W-100018) Statutory Auditors for a period of 1 year to hold office from the conclusion of the Twelfth Annual General Meeting up to the conclusion of the Thirteenth Annual General Meeting of the Company.Deloitte Haskins & Sells LLP, Chartered Accountants, Statutory Auditors of the Company will retire at the conclusion of the ensuing AGM.The Board recommends the reappointment of Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company.

RISk MANAGEMENTThe 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.

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/TRIBuNALAn Order passed by Hon'ble High Court of Bombay approving amalgamation of IDFC PE, IDFC PD and IDFC HFCL with the Company. Other than

Board's Report


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

MATERIAL CHANGES / COMMITMENTSAs 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, 2015 till the date of this report.

AuDITOR’S REPORTThere are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.

INFORMATION REQuIRED uNDER SEXuAL HARASSMENT OF WOMEN AT WORkPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013There 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.

DIRECTORS’ RESPONSIBILITY STATEMENTThe Directors confirm that:(a) in the preparation of the annual financial statements for the year ended March 31, 2015, 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 as at March 31, 2015 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.

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

CORPORATE SOCIAL RESPONSIBILITYCorporate Social Responsibility Committee was constituted during the year consisting of: 1. Dr. Rajiv B. Lall (DIN - 00131782) - Chairman 2. Mr. Bharat Shah (DIN - 00136969) - ID3. Mr. Sunil Kakar (DIN - 03055561) The CSR Policy of the Company has been put up on the website of the Company. The disclosure of contents of Corporate Social Responsibility Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as Annexure III.

RELATED PARTY TRANSACTIONIn 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.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 the Audit Committee the Board approved “Policy on Related Party Transactions” at it’s meeting held on January 28, 2015. 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.

ACkNOWLEDGEMENTSThe Board acknowledges the invaluable support extended to the Company by the Investors of Funds, the Ministry of Finance, the Reserve Bank of India and the Securities and Exchange Board of India.We would 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.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

RAjIv B. LALL

Chairman

Mumbai, June 30, 2015

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

1. CIN –

2. Name of the subsidiary IDFC Capital (Singapore) Pte. Limited

3. Reporting period for the subsidiary concerned, if different from the holding company’s reporting period

NA

4. 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 62.5908

5. Share capital 2,462,166,070

6. Reserves & surplus (511,356,514)

7. Total assets 1,953,980,221

8. Total Liabilities 1,953,980,221

9. Investments 1,436,169,866

10. Turnover 78,521,136

11. Profit before taxation 36,932,418

12. Provision for taxation -

13. Profit after taxation 36,932,418

14. Proposed Dividend -

15. % of shareholding 100%

Notes: Names of subsidiaries which have been liquidated or sold during the year: IDFC Project Equity Company Limited, IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited (100% subsidiaries of the Company) were merged with the Company during the year.

PART “B”: ASSOCIATES AND JOINT VENTuRESStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

NAmE OF ASSOCIATES/jOINT vENTURES IDFC INFRA DEBT FUND LImITED

1. Latest audited Balance Sheet Date March 31, 2015

2. Shares of Associate/joint ventures held by the company on the year end

No. 143,000,000

Amount of Investment in Associates 1,430,000,000

Extend of Holding % ~ 46%

3. Description of how there is significant influence Significant influence by virtue of holding more than 20% of the voting power

4. Reason why the associate/joint venture is not consolidated In accordance with MCA notification dated October 14, 2014.

5. Net worth attributable to Shareholding as per latest audited Balance Sheet 1,450,450,558

6. Profit / Loss for the year

i. Considered in Consolidation -

ii. Not Considered in Consolidation 45,192,163

Form AOC-I aNNEXURE I

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF

IDFC ALTERNATIvES LImITED

SUNIL KAKAR

DirectorRAjEEv UBEROI

Director

mANISH jINDAL

Mumbai, June 30, 2015 Chief Financial Officer


As on the financial year ended on march 31, 2015[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 U67190MH2002PLC137798

ii) Registration Date 07/11/2002

iii) Name of the Company IDFC ALTERNATIVES 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

vi) Whether listed company Yes / No No

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

Sharepro Services (India) Pvt. Ltd.* 13, AB Samhita Warehousing Complex, 2nd Floor, Telephone Exchange Lane, Saki Naka, Andheri (E), Mumbai - 400 072. Contact No. +91 22 6772 0300 / 400

* Sharepro Services (India) Pvt. Ltd. provides connectivity services with depositories for the equity shares of the Company.

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. Multi-asset class fund managers 66309 100%

III. PARTICuLARS OF HOLDING, SuBSIDIARY AND ASSOCIATE COMPANIES SR. NO.

NAmE AND ADDRESS OF THECOmPANy

CIN/GLN HOLDING/ SUBSIDIARy/ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

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

2. IDFC Capital (Singapore) Pte. Ltd. – Subsidiary 100% Section 2(87)

3. IDFC Infra Debt Fund Limited U67190MH2014PLC253944 Associate ~ 46% Section 2(6)

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 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. 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% 219,250 600 219,850 100% 339.7

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% 219,250 600 219,850 100% 339.7

Form No. MGT-9 Extract of Annual Return aNNEXURE II


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


SHARES


SHARES

(2) Foreign NIL NIL NIL NIL NIL NIL NIL NIL NIL

a) NRIs - Individuals

b) Other - Individuals

c) Bodies Corp.

d) Banks / FI

e) Any Other

Sub-total (A) (2):-

Total shareholding of Promoter (A) = (A)(1)+(A)( 2)

49,400 600 50,000 100% 219,250 600 219,850 100% 339.7

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

1. Institutions

a) Mutual Funds

b) Banks/FI

c) Central Govt

d) State Govt(s)

e) Venture Capital Funds

f) Insurance Companies

g) FIIs

h) Foreign Venture Capital Funds

i) Others (specify)

Sub-total (B)(1):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

2. Non-Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals

i) Individual shareholders holding nominal share capital upto ` 1 lakh

ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh

c) Others (specify)

Sub-total (B)(2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

Total Public Shareholding (B) = (B)(1) + (B)(2)

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) 49,400 600 50,000 100% 219,250 600 219,850 100% 339.7



(ii) Shareholding of Promoters

SR. NO.

SHAREHOLDER’S NAmE SHAREHOLDING AT THE BEGINNING OF THE yEAR SHARE HOLDING AT THE END OF THE yEAR

NO. OF SHARES

% OF TOTAL SHARES OF THE

COmPANy

% OF SHARES PLEDGED/

ENCUmBERED TO TOTAL SHARES

NO. OF SHARES


COmPANy

% OF SHARES PLEDGED/

ENCUmBERED TO TOTAL

SHARES

% CHANGE IN SHARE HOLDING

DURING THE yEAR

1. IDFC Limited 49,400 100% NIL 219,250 100% NIL 339.70

2. Rajiv B. Lall jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

3. Vikram Limaye jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

4. Mahendra N. Shah jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

5. Ketan Kulkarni jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

6. Bipin Gemani jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

7. Sadashiv Rao jointly with IDFC Ltd* 100 0% NIL 100 0% NIL NIL

Total 50,000 100% NIL 219,850 100% NIL 339.70

* beneficial interest of Equity share is in the name of IDFC Limited

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

SR. NO.

SHAREHOLDING AT THE BEGINNING OF THE yEAR CUmULATIvE SHAREHOLDING DURING THE yEAR

NO. OF SHARES % OF TOTAL SHARES OF THE COmPANy

NO. OF SHARES % OF TOTAL SHARES OF THE COmPANy

1. At the beginning of the year 49,400 100.00 49,400 100.00

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.):

# #

At the end of the year 219,250 100.00 219,250 100.00

# Inter-se transfer of Promoter:

SR. NO.

NAmE SHAREHOLDING AT BEGINNING OF THE yEAR

DATE INCREASE / DECREASE IN

SHAREHOLDING

REASON CUmULATIvE SHAREHOLDING DURING

THE yEAR

NO. OF SHARES

% NO. OF SHARES

%

1. IDFC Limited 49,400 100.00 09/09/2014 Increase Rights issue 219,250 100.00

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

SR. NO.

SHAREHOLDING AT THE BEGINNING OF THE yEAR

CHANGES IN THE SHAREHOLDING DURING THE yEAR

SHAREHOLDING AT THE END OF THE yEAR

FOR EACH OF THE TOP 10 SHAREHOLDERS

NO. OF SHARES


COmPANy

INCREASE DECREASE NO. OF SHARES


COmPANy

1. At the beginning of the year

NOT APPLICABLE

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

3. At the end of the year (or on the date of separation, if separated during the year)



(v) Shareholding of Directors and Key Managerial Personnel:

SR. NO.

SHAREHOLDING AT THE BEGINNING OF THE yEAR

CHANGES IN THE SHAREHOLDING DURING THE yEAR

SHAREHOLDING AT THE END OF THE yEAR

FoR EACH oF tHE DIRECtoRS AnD KMP

NO. OF SHARES


COmPANy

INCREASE DECREASE NO. OF SHARES


COmPANy

1. At the beginning of the year

NIL

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

3. At the end of the year (or on the date of separation, if separated during the year)

V. INDEBTEDNESS Indebtedness of the Company including interest outstanding/accrued but not due for payment

IN `

SECuRED LoAnS ExCLuDInG

DEPoSItS

unSECuRED LoAnS

DEPoSItS totAL InDEbtEDnESS

Indebtedness at the beginning of the financial year NIL NIL NIL NIL

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i+ii+iii) NIL NIL NIL NIL

Change in Indebtedness during the financial year

• Addition NIL 2,950,000,000 NIL 2,950,000,000

• Reduction NIL 1,450,000,000 NIL 1,450,000,000

Net Change NIL 1,500,000,000 NIL 1,500,000,000

Indebtedness at the end of the financial year

i) Principal Amount NIL 1,500,000,000 NIL 1,500,000,000

ii) Interest due but not paid NIL NIL NIL NIL

iii) Interest accrued but not due NIL 2,589,041 NIL 2,589,041

Total (i+ii+iii) NIL 1,502,589,041 NIL 1,502,589,041

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

1. Gross salary

NIL

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income-

tax Act, 19612. Stock option3. Sweat Equity4. Commission

- as % of profit- others, specify

5. others, please specifytotal (A)Ceiling as per the Act



b. Remuneration to other directors:IN `

SR. NO.

PARTICULARS OF REmUNERATION

NAmE OF DIRECTORS TOTAL AmOUNT

RAjIv B. LALL

GAUTAm KAjI

BHARAT SHAH

vIKRAm LImAyE

SUNIL KAKAR

SADASHIv S. RAO

RAjEEv UBEROI

Independent DirectorsFee for attending board committee meetings

NIL 80,000 80,000 NIL NIL NIL NIL 160,000

Commission NIL NIL NIL NIL NIL NIL NIL NILOthers, please specify NIL NIL NIL NIL NIL NIL NIL NILTotal (1) NIL 80,000 80,000 NIL NIL NIL NIL 160,000Other Non-Executive Directors

NIL NIL NIL NIL NIL NIL NIL NIL

Fee for attending board committee meetingsCommissionOthers, please specifyTotal (2) NIL NIL NIL NIL NIL NIL NIL NILTotal (B) = (1 + 2) NIL 80,000 80,000 NIL NIL NIL NIL 160,000Overall Ceiling as per the Act

Refer Note

Note: In terms of the provisions of the Companies Act, 2013, 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.IN `

SR. NO.

PARTICULARS OF REmUNERATION KEy mANAGERIAL PERSONNELCEO COmPANy

SECRETARyCFO* TOTAL

1. Gross salary(a) Salary as per provisions contained in section 17(1)

of the Income-tax Act, 196131,774,722 N.A. 5,157,972 36,932,694

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 5,311,527 N.A. 433,452 5,744,979(c) Profits in lieu of salary under section 17(3)

Income-tax Act, 1961NIL N.A. NIL NIL

2. Stock option NIL N.A. NIL NIL3. Sweat Equity NIL N.A. NIL NIL4. Commission NIL N.A. NIL NIL

- as % of profit- others, specify...

5. others, please specify NIL N.A. NIL NIL

Total (A) 37,086,249 N.A. 5,591,424 42,677,673*Appointed w.e.f. August 27, 2014

VII. PENALTIES/PuNISHMENT/COMPOuNDING OF OFFENCES:TyPE SECTION OF THE

COmPANIES ACTBRIEF

DESCRIPTIONDETAILS OF PENALTy/

PUNISHmENT/ COmPOUNDING FEES

ImPOSED

AUTHORITy [RD/NCLT/COURT]

APPEAL mADE, IF ANy (GIvE DETAILS)

A. COmPANy

nIL

Penalty

PunishmentCompoundingB. DIRECTORSPenaltyPunishmentCompoundingC. OTHER OFFICERS IN DEFAULTPenaltyPunishmentCompounding



Corporate Social Responsibility aNNEXURE III

[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

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) PROjECT OR PROGRAmS WISE

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 0.82 0.82 0.82

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*

2 Improvement in access to maternal and neo-natal health services for poor slum dwellers by strengthening the linkages with existing public health systems

Cl.(i) promoting health care including preventive health care

Maharashtra-Mumbai 1.49 1.36 1.36

3 Improvement in learning outcomes through pedagogical interventions for children attending anganwadi centers set up under the Integrated Child Development Scheme of the Govt. of India.


Uttarakhand - Dehradun, Nanital, Haridwar, Udham Singh Nagar and Tehri.

1.77 1.44 1.44

4 Promoting infrastructure development for livelihood support to achieve aspired quality of life for the people of Meghalaya through appropriate institutional mechanisms and programmes including a demonstration solar street lighting project in Mawlynnong Village

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

Meghalaya - Across State Meghalaya - East Khasi Hills

3.31 1.85 1.85

5 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.


Rajasthan - Alwar 4.22 1.20 1.20

6 Development of frameworks/ projects for re-development of slums, operations and maintenance of night shelters and use of mobile bio-toilets in slum clusters

Cl.(xi) slum area development

Delhi 0.55 0.29 0.29

7 Preparation of the India Rural Development Report identifying the reasons for regional differences in various parameters so as to enable appropriate policy responses; Preparation of the India Infrastructure Report on the theme of Health identifying the critical areas of need and policy responses to achieve universal healthcare for the population in the shortest possible time frame.

Cl. (i) promoting health care; Cl. (x) rural development projects.

All India coverage 2.04 1.86 1.86

8 Other programmes being formulated for newer geographies - for which disbursable would be made in the coming years

Various clauses of Schedule VII

All India coverage 48.08 3.08 3.08

Total Direct Expense 62.28 11.91 11.91

Total Indirect Expense – 1.52 1.52

Grand Total 62.28 13.42 13.42

*IDFC Foundation, a not for profit company within the meaning of Section 8 of Companies Act, 2013 (erstwhile Section 25 company of the Companies Act, 1956) has a comprehensive approach towards promoting the development of livelihoods, rural areas, social Infrastructure such as healthcare and education and other infrastructure that would meet the objectives of Inclution and environmental sustainability such as water supply, sanitation, sustainable urbanization, public transport systems, renewable energy, slum re-development and affordable housing.

We confirm that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.


Corporate Social Responsibility aNNEXURE III

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 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 to mandatorily spend on CSR.

IDFC would continue to carry out CSR activities through its wholly owned subsidiary company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Companies Act, 2013 (earlier 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, would undertake the following CSR activities fall within the ambit of the activities listed in Schedule VII of the Companies Act, 2013 for promoting the development of –

(a) livelihoods (b) rural areas (c) social infrastructure such as healthcare and education; and (d) other infrastructure that would meet the objectives of Inclusion and environmental sustainability such as water supply, sanitation,

sustainable urbanization, public transport systems, renewable energy, slum re-development and affordable housing.

2. the Composition of the CSR Committee.

Dr. Rajiv B. Lall (DIN - 00131782) - Chairman Mr. Bharat Shah (DIN - 00136969)

Mr. Sunil Kakar (DIN - 03055561)

3. Average net profit of the company for last three financial years: ` 31.14 crore

4. Prescribed CSR Expenditure (two per cent of the amount as in item 3 above): ` 62.28 Lac

5. Details of CSR spent during the financial year: ` 62.28 Lac

(a) Total amount to be spent for the financial year: ` 62.28 Lac

(b) Amount unspent, if any: NIL


Independent Auditors' Reportto tHe members oF IDFC AlternAtIves lImIteD

Report on the Financial StatementsWe have audited the accompanying financial statements of IDFC ALtERnAtIVES LIMItED (“the Company”), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, 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 StatementsThe 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 specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 ResponsibilityOur 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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.

opinionIn 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, 2015, and its profit and its cash flows for the year ended on that date.Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2015 (“the order”) issued by the Central Government in terms of Section 143(11) of

the Act, we give in the Annexure 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

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

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. e) On the basis of the written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors,

none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.


f) 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 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.

FOR DELOITTE HASKINS & SELLS LLP

Chartered Accountants(Registration No. 117366W/W-100018)

ZUBIN SHEKARy

Partner(Membership No. 48814)

Mumbai, April 23, 2015

Independent Auditors' Report


Annexure to the Independent Auditors’ Report(Referred to in paragraph 1 under ‘Report on other Legal and Regulatory Requirements’ section of our report of even date)(i) In respect of the Company’s fixed assets: (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 the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) According to the information and explanations given to us, the nature of the Company’s business is such that it is not required to hold any inventories. Therefore, the provisions of paragraph 3(ii) of the Order are not applicable to the Company.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of fixed assets and the sale of services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits. Therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

(vi) The provisions of clause (3)(vi) of the Order are not applicable to the Company as the Company is not covered by the Companies (Cost Records and Audit) Rules, 2014.

(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 provident fund, employees’ state insurance, income

tax, service tax, Cess and other material statutory dues applicable to it with 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, 2015 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 and Cess which have not been deposited as on March 31, 2015 on

account of disputes. (d) There were no amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the

relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder by the Company.(viii) The Company does not have accumulated losses. The Company has not incurred cash losses during the financial year covered by our audit

and in the immediately preceding financial year.(ix) According to information and explanations given to us, there were no dues payable by the Company to financial institutions or banks or

debenture holders during the year. Therefore, the provisions of paragraph 3(ix) of the Order are not applicable to the Company.(x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or

financial institutions. Therefore, the provisions of paragraph 3(x) of the Order are not applicable to the Company.(xi) According to the information and explanations given to us, during the year, the Company has not availed of any term loan from financial

institutions. Therefore, the provisions of paragraph 3(xi) of the Order are not applicable to the Company.(xii) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no

material fraud on the Company has been noticed or reported during the year.


Chartered Accountants(Registration No. 117366W/W-100018)

ZUBIN SHEKARy


Mumbai, April 23, 2015


As At mArCH 31, 2015 As At mArCH 31, 2014

notes ` `

EqUITy AND LIABILITIES

SHAREHOLDERS’ FUNDS

(a) Share capital 3 2,198,500 500,000

(b) Reserves and surplus 4 2,953,648,356 588,329,061

NON-CURRENT LIABILITIES

(a) Deferred tax liability (net) 5 59,252,000 36,605,000

CURRENT LIABILITIES

(a) Short-term borrowings 6 1,500,000,000 –

(b) Trade payables 7 49,777,267 40,947,684

(c) Other current liabilities 8 172,363,664 96,972,975

(d) Short-term provisions 9 269,896,210 91,780,830

TOTAL 5,007,135,997 855,135,550

ASSETS

NON-CURRENT ASSETS

(a) Fixed assets

i) Tangible assets 10a 461,290,906 414,861,075

ii) Intangible assets 10b 604,953 45,909

461,895,859 414,906,984

(b) Non-current investments 11 3,913,397,214 57,939,934

(c) Long-term loans and advances 12 240,429,413 109,564,207

CURRENT ASSETS

(a) Current investments 11 227,760,673 –

(b) Cash and cash equivalents 13 37,853,529 259,304,284

(c) Short-term loans and advances 12 106,038,278 8,002,419

(d) Other current assets 14 19,761,031 5,417,722

TOTAL 5,007,135,997 855,135,550

See accompanying notes forming part of the financial statements.

Balance Sheet AS AT MARCH 31, 2015

IN TERmS OF OUR REPORT ATTACHED


Chartered Accountants (Registration No. 117366W/W-100018)



ZUBIN SHEKARy


SUNIL KAKAR


Director

mANISH jINDAL

Mumbai | April 23, 2015 Chief Financial Officer


For tHe yeAr enDeD mArCH 31, 2015


notes ` `

I INCOmE

Revenue from operations 15 1,161,686,069 580,692,293

Other income 16 124,644,220 78,324,241

TOTAL INCOmE (I) 1,286,330,289 659,016,534

II ExPENSES

Employee benefit expenses 17 583,537,627 282,615,342

Finance cost 18 72,814,214 –

Depreciation and amortisation expense 10 (56,887,649) 24,158,137

Other expenses 19 301,810,604 99,931,905

TOTAL ExPENSES (II) 901,274,796 406,705,384

III PROFIT BEFORE TAx (I-II) 385,055,493 252,311,150

Iv TAx ExPENSE

Current tax 134,224,000 60,318,000

Deferred tax 5 23,629,158 3,674,000

TOTAL TAx ExPENSE 157,853,158 63,992,000

v PROFIT FOR THE yEAR FROm CONTINUING OPERATIONS (III-Iv) 227,202,335 188,319,150

Earnings per share (nominal value of ` 10 per share) 27

(a) Basic 1,567.67 3,766.38

(b) Diluted 1,567.67 3,766.38

See accompanying notes forming part of the financial statements.

Statement of Profit and Loss FOR THE YEAR ENDED MARCH 31, 2015






ZUBIN SHEKARy


SUNIL KAKAR


Director

mANISH jINDAL



Cash Flow Statement FOR THE YEAR ENDED MARCH 31, 2015

For tHe yeAr enDeDmArCH 31, 2015


` `

A. CASH FLOW FROm OPERATING ACTIvITIES

Net profit before tax 385,055,493 252,311,150 Adjustments for :Depreciation and amortisation expenses (56,887,649) 24,158,137 Interest expenses on inter corporate deposit 72,238,657 – Loss on sale / write off of fixed assets 22,988,231 – Interest income on bank deposits (67,726,168) (2,635,684)Dividend received from subsidiary company – (65,000,000)Profit on sale of current investments (44,730,095) (10,638,885)Dividend income on current investments (3,969,272) (49,672)Operating profit before working capital changes 306,969,197 198,145,046 Changes in working capital:Adjustments for (increase) / decrease in operating assets: Long-term loans and advances (49,802,634) (298,878) Short-term loans and advances (59,810,266) (3,816,463) Other current assets 33,697,878 (2,262,960)Adjustments for increase / (decrease) in operating liabilities: Short-term provisions 168,467,900 – Trade payables 2,950,345 45,712,685 Other current liabilities (1,094,761) (23,875,210)Cash generated from operations 401,377,659 213,604,220 Net income tax paid (net of refund) (114,410,937) (93,048,547)NET CASH FROm OPERATING ACTIvITIES (A) 286,966,722 120,555,673

B. CASH FLOW FROm INvESTING ACTIvITIES Purchase of fixed assets (9,311,033) (4,386,124)Capital advance (1,981,152) – Proceeds from sale of fixed assets 2,233,365 57,646 Bank balances not considered as cash and cash equivalents Matured 1,813,098,032 – Purchase of current investments (3,950,729,885) (672,549,672)Sale proceeds of current investments 3,767,699,307 683,188,557 Investment in subsidiary companies (4,592,166,070) – Investment in associate company (1,430,000,000) – Purchase of non-current investments (1,186,280) (6,172,849)Interest income on bank deposits 67,926,100 2,673,836 Dividend received from subsidiary company – 65,000,000 Dividend income on current investments 3,969,272 49,672 NET CASH FROm / (USED) IN INvESTING ACTIvITIES (b) (4,330,448,344) 67,861,066

C. CASH FLOW FROm FINANCING ACTIvITIES

Interim dividend paid (including dividend distribution tax) – (141,046,750)Issuance of equity shares 1,999,983,750 – Inter corporate deposit taken 2,950,000,000 – Inter corporate deposit repaid (1,450,000,000) – Interest paid on inter corporate deposit (69,649,616) – NET CASH FROm / (USED) IN FINANCING ACTIvITIES (C) 3,430,334,134 (141,046,750)Net increase / (decrease) in cash and cash equivalents (A+B+C) (613,147,488) 47,369,989 Cash and cash equivalents at the beginning of the year (see note 13) 259,304,284 211,934,295 Cash and cash equivalents of the merged entities 391,696,733 – Cash and cash equivalents at the end of the year (see note 13) 37,853,529 259,304,284 (613,147,488) 47,369,989

IN TERmS OF OUR REPORT ATTACHEDFOR DELOITTE HASKINS & SELLS LLP




ZUBIN SHEKARy


SUNIL KAKAR


Director

mANISH jINDALMumbai | April 23, 2015 Chief Financial Officer

Notes forming part of the Financial Statements AS AT AND For The yeAr eNDeD MArch 31, 2015


01 BackgroundIDFC Alternatives Limited ('Company') is a wholly owned subsidiary of IDFC Limited (“IDFC”), Incorporated in India, providing Investment Management and Advisory Services and was the Investment Manager to IDFC Infrastructure Fund of which India Development Fund was a unit scheme (“IDF”) upto December 24, 2013. The Company is Investment Manager to IDFC Infrastructure Fund 2 of which IDFC Private Equity Fund II is a unit scheme (“Fund II”) and IDFC Infrastructure Fund 3 of which IDFC Private Equity Fund III is a unit scheme (“Fund III”) all of which are domestic venture capital funds registered under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996.

The Company was appointed as 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 from September 18, 2013 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 from December 9, 2013 .

IDFC Project Equity Company Limited, IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited, wholly owned Subsidiary Companies had filed a petition with the Bombay High Court on September 26, 2014 to obtain its sanction to a Scheme of Amalgamation of the Companies with IDFC Alternatives Limited, the Holding Company. This had been approved by the Board of Directors of IDFC Project Equity Company Limited during the meeting held on July 23, 2014 and IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited during the meeting held on July 21, 2014.

The Amalgamation is effective October 1, 2014 (Appointed Date) as approved by the Bombay High Court (“High Court”) vide its order dated January 30, 2015 which has been filed by the Company with the Registrar of Companies on March 12, 2015 (“Effective Date”). The said scheme of merger as approved by the High Court is effective from the Appointed Date but operative from the Effective Date, hence the business of these subsidiaries has been transferred to and vested with the Holding Company on going concern basis. Also refer to note 22.

Consequent upon the merger, the investment management activity of India Infrastructure Fund, a domestic venture capital fund registered under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996 will now be carried out by the Company.

02 Significant accounting policies(a) basis of accounting and preparation of financial statementsThe 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, read with Rule 7 of the Companies (Accounts) Rules, 2014 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 except for categories of fixed assets acquired before April 1, 2014, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for depreciation as more fully described in Note 2(H).

The Financial Statements comprise the individual financial statement of the Company for the period from April 1, 2014 to March 31, 2015 and IDFC Project Equity Company Limited, IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited, merged Companies for the period October 1, 2014 (Appointed Date) to March 31, 2015.

(b) use of estimatesThe 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) Cash and cash equivalents (for purpose of cash flow statement)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.

(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) InflationAssets and liabilities are recorded at historical cost to the Company. These costs are not adjusted to reflect the changing value in the purchasing power of money.



(f) revenue recognitioni 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.

(g) 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. 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. Any expenses on such software for support and maintenance payable annually are charged to the Statement of Profit and Loss.

(h) 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 from the date of put to use. 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 during the quarter ended June 30, 2014, 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. Previously, straight line method was used for depreciating certain office equipment while other tangible fixed assets were depreciated using written down value method.

Intangible assets Intangible assets consisting of computer software are pro-rata amortised over a period of three years on the straight-line method.

(i) 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.

(j) employee benefits

Defined contribution plans The contribution to provident fund, superannuation fund and pension fund are considered as defined contribution plans and are charged as an

expense as they fall due based on the amount of contribution required to be made.

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 Profit and Loss for the year.

Compensated absences Employees are not permitted to accumulated 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.

(k) operating leasesLeases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the lease term in accordance with Accounting Standard 19 on 'Leases' as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014. Initial direct cost incurred specifically for operating leases are recognised as expense in the year in which they are incurred.

(l) earnings per shareBasic 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.

(m) Income-taxIncome 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 u/s 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 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 asset 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.

(n) provisions and contingenciesA 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. The Company does not account or recognise contingent assets.

(o) Foreign currency transactionsForeign 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) Impairment of assetsThe 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, 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.

(q) service tax input creditService 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.

(r) operating cycleBased 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 capitalpArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

number ` number `

(A) AUTHORISED

Equity shares of ` 10 each 227,000,000 2,270,000,000 5,000,000 50,000,000 (B) ISSUED, SUBSCRIBED & FULLy PAID UP

Equity shares of ` 10 each (All the above equity shares are held by IDFC Limited, the

Holding Company and its nominees)

219,850 2,198,500 50,000 500,000

TOTAL 219,850 2,198,500 50,000 500,000

Note: Pursuant to the scheme of amalgamation by the Bombay High Court becoming effective and consequent to the amalgamation of IDFC



Project Equity Company Limited, IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited, with the Company, the authorised capital has changed as laid down in the scheme.

(a) reconciliation of the number of shares and amount outstanding as at the beginning and at the end of the year

equIty sHAres As At mArCH 31, 2015 As At mArCH 31, 2014

number ` number `

Outstanding as at the beginning of the year 50,000 500,000 50,000 500,000 Issued during the year 169,850 1,698,500 – – Outstanding as at the end of the year 219,850 2,198,500 50,000 500,000

(b) On September 9, 2014 the Company issued and allotted 169,850 equity shares of ` 10 each at a premium of ` 11,765 per share. Accordingly, the issued equity share capital has increased from ` 500,000 to ` 2,198,500 and an amount of ` 1,998,285,250 have been credited to the Securities Premium Account. The proceeds of this issue along with short-term borrowings have been utilised for acquisition of 100% equity stake in IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited.

(c) terms/rights attached to equity sharesThe 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.

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.

(d) Details of the shareholders holding more than 5% of the share capital

NAmE OF SHAREHOLDER


NUmBER % OF HOLDING NUmBER % OF HOLDING

IDFC Limited and its nominees 219,850 100% 50,000 100%TOTAL 219,850 100% 50,000 100%

(e) During the year ended March 31, 2015, the Board of Directors, had declared interim dividend of ` Nil per equity share (previous year ` 1,500 per equity share in the meeting held on July 26, 2013).

The total dividend appropriation amounted to ` Nil (previous year ` 76,699,500) including dividend distribution tax of ` Nil (previous year ` 1,699,500).

04 Reserves and surpluspArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

(A) SECURITIES PREmIUm ACCOUNT

Opening balance – – Add: Premium on issue of equity shares [see note 3 (b)] 1,998,285,250 –

Closing balance 1,998,285,250 – (B) GENERAL RESERvE

Opening balance 204,539,721 185,707,806 Add: Transferred from surplus in Statement of Profit and Loss – 18,831,915 On amalgamation (see note 22) 55,123,000 –

Closing balance 259,662,721 204,539,721 (C) SURPLUS IN STATEmENT OF PROFIT AND LOSS

Opening balance 383,789,340 291,001,605 Add: Profit for the year 227,202,335 188,319,150 On amalgamation (see note 22) 84,708,710 – Less: Interim dividend (see note 25) – (75,000,000) Tax on equity dividend (see note below) – (1,699,500) Transfer to General reserve – (18,831,915)

Closing balance 695,700,385 383,789,340 TOTAL 2,953,648,356 588,329,061

Dividend distribution tax for the year is net of dividend distribution tax of ` Nil (previous year ` 11,046,750) paid by the subsidiary company under Section 115-O of the Income-tax Act, 1961.



05 Deferred tax liabilitypArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

DEFERRED TAx LIABILITy

On difference between book balance and tax balance of fixed assets 60,041,000 36,605,000

DEFERRED TAx ASSETS

Others 789,000 – DEFERRED TAx LIABILITy (NET) 59,252,000 36,605,000

(a) In compliance with Accounting Standard 22 on 'Accounting for Taxes on Income' as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, ` 23,629,158 (previous year ` 3,674,000) has been debited to the Statement of Profit and Loss towards deferred tax on account of timing differences.

(b) pArtICulArs `

Deferred tax liability as at March 31, 2014 36,605,000

Less: Transferred on merger (see note 22) 982,158

Less: Deferred tax liability as at March 31, 2015 59,252,000

Charged to Statement of Profit and Loss (23,629,158)

06 Short-term borrowingspArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Inter corporate deposit 1,500,000,000 – TOTAL 1,500,000,000 –

Inter corporate deposit are taken at the Interest rate of 10% p.a. maturing on April 09, 2015 with a roll over option.

07 Trade payablespArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Payable to vendors 32,668,150 19,158,259

Provision for expenses 17,109,117 21,789,425 TOTAL 49,777,267 40,947,684

No amount is payable in the current year to ‘Suppliers’ under the Micro, Small and Medium Enterprises Development Act, 2006.

No interest has been paid / payable by the Company during the year to the ‘Suppliers’ covered under the Micro, Small and Medium Enterprises Development Act, 2006. The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.

08 Other current liabilitiespArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Fees received in advance 144,741,143 90,996,815

Other amount received in advance 5,449,982 –

Interest accrued but not due on Inter Corporate Deposits (see note 25) 2,589,041 –

Payable to employee benefit funds (net of receivable of ` Nil (previous year ` 1,344,866)) 1,755,413 1,480,345

Others

Statutory remittances 17,828,085 4,495,815 TOTAL 172,363,664 96,972,975



09 Short-term provisionspArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Provision for income tax (net of taxes paid ` 745,307,885 (previous year ` 75,703,201)) 9,512,179 296,799

Provision for fringe benefit tax [net of taxes paid ` 14,876,617 (previous year ` 14,876,617)]

384,031 384,031

Provision for employee benefits 260,000,000 91,100,000 TOTAL 269,896,210 91,780,830

10 Fixed AssetsGROSS BLOCK DEPRECIATION NET BLOCK

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(`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`)A TANGIBLE ASSETS

Buildings 523,563,116 – – 29,371,116 494,192,000 119,274,467 – 9,187,640 (72,767,396) 5,914,457 49,780,254 444,411,746 404,288,649 (Previous year) (523,563,116) – – – (523,563,116) (97,996,117) – (21,278,350) – – (119,274,467) (404,288,649) –Computer hardware 7,834,730 2,733,019 699,642 1,060,987 10,206,404 6,767,714 2,173,601 586,625 431,725 1,060,986 8,898,679 1,307,725 1,067,016 Previous year) (7,232,754) – (601,976) – (7,834,730) (6,235,765) – (531,949) – – (6,767,714) (1,067,016) –Furniture and fixtures 6,190,800 536,611 – – 6,727,411 2,629,203 184,084 634,996 (414,768) – 3,033,515 3,693,896 3,561,597 (Previous year) (6,248,446) – – (57,646) (6,190,800) (2,319,821) – (309,382) – – (2,629,203) (3,561,597) –Office equipment 8,729,515 1,291,080 784,883 43,852 10,761,626 5,432,589 1,037,041 546,814 2,682,051 2,944 9,695,552 1,066,074 3,296,926 (Previous year) (8,391,354) – (338,161) – (8,729,515) (4,446,777) – (985,812) – – (5,432,589) (3,296,926) –Vehicles 3,389,941 5,824,558 7,230,061 2,751,938 13,692,622 743,054 997,238 2,194,318 (25,543) 1,027,910 2,881,157 10,811,465 2,646,887 (Previous year) – – (3,389,941) – (3,389,941) – – (743,054) – – (743,054) (2,646,887) – TOTAL (A) 549,708,102 10,385,268 8,714,586 33,227,893 535,580,063 134,847,027 4,391,964 13,150,393 (70,093,931) 8,006,297 74,289,157 461,290,906 414,861,075 Previous year (545,435,670) – (4,330,078) (57,646) (549,708,102) (110,998,480) – (23,848,547) – – (134,847,027) (414,861,075)

B INTANGIBLE ASSETS (OTHER THEN INTERNALLy GENERATED) Computer software 4,530,097 193,594 596,447 – 5,320,138 4,484,188 175,109 55,889 – – 4,715,185 604,953 45,909 (Previous year) (4,474,051) – (56,046) – (4,530,097) (4,174,598) – (309,590) – – (4,484,188) (45,909) –TOTAL (B) 4,530,097 193,594 596,447 – 5,320,138 4,484,188 175,109 55,889 – – 4,715,185 604,953 45,909 Previous year (4,474,051) – (56,046) – (4,530,097) (4,174,598) – (309,590) – – (4,484,188) (45,909)TOTAL (A) + (B) 554,238,199 10,578,862 9,311,033 33,227,893 540,900,201 139,331,215 4,567,073 13,206,282 (70,093,931) 8,006,297 79,004,342 461,895,859 414,906,984 Total of previous year (549,909,721) – (4,386,124) (57,646) (554,238,199) (115,173,078) – (24,158,137) – – (139,331,215) (414,906,984)

Note: Represent assets transferred on amalgamation (see note 22)

11 Investments (unquoted)(cost)


` ` ` `

NON-CURRENT PORTION

CURRENT PORTION

NON-CURRENTPORTION

CURRENT PORTION

INvESTmENT IN EqUITy SHARES (TRADE)

SUBSIDIARy COmPANy

IDFC Project Equity Company Limited (merged w.e.f. October 1, 2014)

– – 37,895,070 –

50,000 equity shares of ` 10 each fully paid up

IDFC Capital (Singapore) Pte. Limited 2,462,166,070 – – –

55,475,000 equity shares of SGD 1 each fully paid up

ASSOCIATE

IDFC Infra Debt Fund Limited 1,430,000,000 – – –

143,000,000 equity share of ` 10 each fully paid up




` ` ` `

NON-CURRENT PORTION

CURRENT PORTION

NON-CURRENTPORTION

CURRENT PORTION

OTHERS

Aavantika Gas Limited 25,000 – 25,000 – 2,500 equity shares of ` 10 each fully paid upINvESTmENTS IN vENTURE CAPITAL UNITS (NON-TRADE)

IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class C 14,183,448 – 13,528,748 – 2,550,000 (previous year 2,550,000) units of ` 10 each, ` 6.51 (previous year ` 6.25) paid up per unit, commitment restricted to ` 7.143 per unitIDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class F 7,022,696 – 6,491,116 – 728,535 (previous year 728,535) units of ` 10 each, ` 9.64 (previous year ` 8.90) paid up per unitINvESTmENTS IN mUTUAL FUND UNITS (NON-TRADE)

IDFC mutual fund - Cash fund growth - Direct plan – 227,760,673 – – 134,264.951 (previous year Nil) units of ` 1,000 fully paid up (Net assets value ` 228,328,532 (previous year ` Nil)) TOTAL 3,913,397,214 227,760,673 57,939,934 –

The above investments in venture capital units are subject to restrictive covenants.

Following Companies were acquired and merged during the year (see note 22)

pArtICulArs number oF sHAres `

IDFC Primary Dealership Company Limited 200,000,000 2,007,500,000

IDFC Housing Finance Company Limited 12,000,000 122,500,000

12 Loans and advances (unsecured, considered good)


` ` ` `

NON-CURRENT PORTION

CURRENT PORTION

NON-CURRENTPORTION

CURRENT PORTION

Security deposits 59,075,089 39,000,000 88,191 – Capital advance – 1,981,152 – – Prepaid expenses 24,416,504 40,830,469 216,575 4,935,422 Gratuity receivable (see note 23) – 3,139,753 – – Supplier Advance – 8,742,236 – – Balances with government authorities

Service tax credit receivable – 12,343,081 – 2,949,989 Advance payment of income tax (net provision for tax ` 1,236,605,346 (previous year ` 1,205,793,407))

151,210,132 – 109,159,441 –

Others 5,727,688 1,587 100,000 117,008 TOTAL 240,429,413 106,038,278 109,564,207 8,002,419

13 Cash and cash equivalentspArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Cash on hand 31,329 9,486 Balances with banksIn current accounts 37,822,200 29,294,798 In deposit accounts – 230,000,000

TOTAL 37,853,529 259,304,284



14 Other current assets

pArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014

` `

Interest accrued on term deposits with banks – 199,932

Expenses recoverable 19,761,031 5,217,790

TOTAL 19,761,031 5,417,722

15 Revenue from operations

pArtICulArs For tHe yeAr enDeD mArCH 31, 2015


` `

Management fees 1,161,686,069 580,692,293

TOTAL 1,161,686,069 580,692,293

16 Other income



` `

Dividend income from subsidiary company (see note 25) – 65,000,000

Dividend income from current investments 3,969,272 49,672

Interest income on bank deposits 67,726,168 2,635,684

Profit on sale of current investments 44,730,095 10,638,885

Interest on income tax refund 8,218,685 –

TOTAL 124,644,220 78,324,241

17 Employee benefit expenses



` `

Salaries and bonus (see note 26) 544,658,329 256,976,239

Contribution to provident and other funds (see note 23) 27,337,601 22,488,283

Staff welfare expenses 11,541,697 3,150,820

TOTAL 583,537,627 282,615,342

18 Finance cost



` `

Interest expenses (see note 25) 72,238,657 –

Other borrowing cost 575,000 –

Interest tax 557 –

TOTAL 72,814,214 –



19 Other expenses



` `

Rent (see note 26) 1,227,000 –

Rates and taxes 1,784,964 2,860,813

Repairs and maintenance

Equipment 10,270 103,864

Others 1,706,601 1,516,922

Insurance charges 2,554,230 1,987,979

Travelling and conveyance (see note 20) 40,968,901 17,611,986

Realised loss on foreign currency transactions 62,139 22,890

Printing and stationery 1,431,564 742,844

Postage, telephone and fax 1,838,260 873,773

Advertisement and publicity 35,009,453 14,853,259

Professional fees (see note 20) 100,512,423 14,742,489

Directors' fees (see note 20) 160,000 140,000

Auditors' remuneration [see note (a) below] 1,769,108 1,585,000

Shared service cost [see note (b) below] (see note 25) 9,769,811 5,742,026

Fund organisational expenses – 11,959,278

Brokerage paid 164,700 –

Distribution fees 64,538,801 20,187,935

CSR expenditure (see note 25) 6,228,521 –

Loss on sale of fixed assets 22,988,231 –

Miscellaneous expenses 9,085,627 5,000,847

TOTAL 301,810,604 99,931,905

(a) Break up of auditors’ remuneration:



` `

Audit fees 750,000 750,000

Tax audit fees 175,000 175,000

Other services 835,000 660,000

Out of pocket expenses 6,018 –

Service tax 82,320 66,126

TOTAL 1,848,338 1,651,126

Less: Service tax set off claimed 79,230 66,126

TOTAL 1,769,108 1,585,000

(b) Shared service cost of ` 9,769,811 (previous year ` 5,742,026) represents cost allocated by the Holding Company under a service level agreement.



20 Expenditure in foreign currency (on payment basis)


` `

Travelling expenses 1,121,209 172,452

Professional fees 1,896,658 3,781,057

Director sitting fees 55,280 41,460

Others 11,374,880 2,945,010

21 Earnings in foreign currenciesThere are no earnings in foreign currencies.

22 Accounting for amalgamationIn terms of the Scheme of Amalgamation (the scheme), IDFC Project Equity Company Limited, IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited, wholly owned subsidiaries of the Company (referred to as ‘Transferor Companies’), have been amalgamated with the Company (Transferee Company), upon which the entire business, including all assets and liabilities of the Transferor Companies 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. IDFC Project Equity Company Limited has entered into an Investment Management Agreement with IDFC Trustee Company Limited on March 11, 2008 to act as the Investment Manager of the India Infrastructure Fund, a domestic venture capital fund registered under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996. IDFC Primary Dealership Company Limited was regulated by the Reserve Bank of India as a systemically important Non-deposit taking Non-Banking Financial Company and has applied to the Reserve Bank of India for surrendering it Non-Banking Financial Company license on June 25, 2014 and it was confirmed by Reserve Bank of India vide letter dated September 5, 2014. IDFC Housing Finance Company Limited had applied for certificate of registration to National Housing Board on March 21, 2014 for commencing the business of Housing Finance. The said application was subsequently withdrawn on September 4, 2014 and withdrawal has been confirmed by National Housing Board vide letter dated September 9, 2014.

The amalgamation has been accounted for under the “Pooling of Interest” method in accordance with the Accounting Standard 14 on 'Accounting for Amalgamation' as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.

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 Companies are as under:

pArtICulArs As At september 30, 2014

` `

vALUE OF ASSETS AND LIABILITIES ACqUIRED:

Non-current assets

(a) Fixed assets

Tangible assets 5,993,304

Intangible assets 18,485

6,011,789

(b) Deferred tax assets 982,158

(c) Long-term loans and advances 106,926,943 113,920,890

Current assets

(a) Cash and bank balances 2,204,794,765

(b) Short-term loans and advances 36,244,441

(c) Other current assets 48,241,119 2,289,280,325

Current liabilities

(a) Trade payables 5,879,238

(b) Other current liabilities 73,896,409

(c) Short-term provisions 15,698,788 95,474,435

2,307,726,780

Less: Carrying value of investments in the Transferor Companies 2,167,895,070

Less: General reserve of transferor companies 55,123,000

Less: Surplus in Statement of Profit and Loss of transferor companies 84,708,710 2,307,726,780

Difference adjusted against Surplus in Statement of Profit and Loss on amalgamation –



23 Employee benefitsIn accordance with the Accounting Standard 15 on 'Employee Benefits' as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, 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 under contribution to provident and other funds:

pArtICulArs As At mArCH 31, 2015 As At mArCH 31, 2014` `

Provident fund 12,040,249 7,904,266 Pension fund 3,509,560 2,543,827 Superannuation fund 1,910,116 1,813,301

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 32,937,687 22,759,846 Current service cost 7,399,742 4,270,841 Interest cost 4,536,066 2,118,976 Benefits paid (10,301,968) (1,344,866)Actuarial loss 4,296,876 1,975,437 Liability assumed on acquisition 28,171,326 3,157,453 Liability at the end of the year 67,039,729 32,937,687 FAIR vALUE OF PLAN ASSETS:

Fair value of plan assets at the beginning of the year 31,160,442 22,759,846 Expected return on plan assets 3,566,170 1,898,474 Contributions 14,793,340 8,449,644 Benefits paid (10,301,968) (1,344,866)Assets assumed on acquisition 26,316,690 –Actuarial gain / (loss) on plan assets 4,644,808 (602,656)Fair value of plan assets at the end of the year 70,179,482 31,160,442 total actuarial loss to be recognised (347,932) 2,578,093 ACTUAL RETURN ON PLAN ASSETS:

Expected return on plan assets 3,566,170 1,898,474 Actuarial gain / (loss) on plan assets 4,644,808 (602,656)Actual return on plan assets 8,210,978 1,295,818 Amount recognised in the balance Sheet:Liability at the end of the year 67,039,729 32,937,687 Fair value of plan assets at the end of the year 70,179,482 31,160,442 Amount recognised in the Balance Sheet under “Short-term loans and advances”-Gratuity receivable / “Other current liabilities”-Payable to Employee Benefit Funds

(3,139,753) 1,777,245

ExPENSE RECOGNISED IN THE STATEmENT OF PROFIT AND LOSS:

Current service cost 7,399,742 4,270,841 Interest cost 4,536,066 2,118,976 Expected return on plan assets 3,566,170 1,898,474 Net actuarial loss to be recognised (347,932) 2,578,093 Liability assumed on acquisition 1,854,636 3,157,453 Expense recognised in the Statement of Profit and Loss under “Employee benefit expenses”

9,876,342 10,226,889

RECONCILIATION OF THE LIABILITy RECOGNISED IN THE BALANCE SHEET:

Opening net liability 1,777,245 –Expense recognised 9,876,342 10,226,889 Contribution by the Company (14,793,340) (8,449,644)Amount recognised in the Balance Sheet under “Short-term loans and advances”-Gratuity receivable / “Other current liabilities”-Payable to Employee Benefit Funds

(3,139,753) 1,777,245

ExPECTED EmPLOyER’S CONTRIBUTION FOR THE NExT yEAR 7,000,000 4,000,000


32 | I D F C A N N U A L R E P O R T 2 0 1 4 – 2 0 1 5

ExpEriEncE adjustmEnts

FOR ThE yEAR ENDED

MARCh 31, 2015 MARCh 31, 2014 MARCh 31, 2013 MARCh 31, 2012 MARCh 31, 2011

` ` ` ` `

Defined benefit obligation 67,039,729 32,937,687 22,759,846 15,133,437 12,855,573

Plan assets 70,179,482 31,160,442 22,759,846 – –

Surplus / (deficit) 3,139,753 (1,777,245) – (15,133,437) (12,855,573)

Experience adjustment on plan liabilities (818,432) 4,355,447 2,298,723 (618,889) 3,897,432

Experience adjustment on plan assets 4,644,808 (602,656) – – –

PARTICULARs As AT MARCh 31, 2015 As AT MARCh 31, 2014

% %

invEstmEnt pattErn:

Insurer managed fundsGovernment securities 41.56 34.27 Deposit and money market securities 4.33 14.32 Debentures / bonds 54.11 51.41

principal assumptions:

Discount rate (per annum) 7.95 8.95 Expected rate of return on assets (per annum) 9.00 8.00 Salary escalation rate (per annum) 8.00 8.00

The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors.

24 Segment reportingThe Company’s main business is to provide asset management services. All other activities revolve around the main business. The Company does not have any geographic segments. 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 read with rule 7 of the Companies (Accounts) Rules, 2014.

25 Related party disclosuresIn accordance with the Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, the related parties of the Company are as follows:

I holding Company: IDFC Limited

II subsidiary Company IDFC Project Equity Company Limited (upto September 30, 2014)

IDFC Primary Dealership Company Limited (from August 28, 2014 upto September 30, 2014)

IDFC Housing Finance Company Limited (from August 28, 2014 upto September 30, 2014)

IDFC Capital (Singapore) Pte. Limited (w.e.f. March 26, 2015)

III Associate IDFC Infra Debt Fund Limited (w.e.f. August 28, 2014)

IV Fellow subsidiary Company IDFC Securities Limited

IDFC Foundation

V Key Management Personnel Mr. M. K. Sinha - Managing Partner & Chief Executive Officer (w.e.f. October 1, 2014)

Mr. Satish Mandhana - Managing Partner & Chief Investment Officer



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 AND NATURE OF THE RELATIONSHIP

(I) Holding Company

IDFC Limited Shared services cost 9,769,811 5,742,026

Interest expenses 72,238,357 –

Interest accrued on inter corporate deposits 2,589,041 –

Interim Dividend – 75,000,000

Final Dividend paid (2012-13) – 55,000,000

Issuance of equity shares 1,999,983,750 –

Inter corporate deposits taken 2,950,000,000 –

Inter corporate deposits repaid 1,450,000,000 –

Inter corporate deposits outstanding 1,500,000,000 –

Purchase of Investment 2,130,000,000 –

(II) Subsidiary Company

IDFC Project Equity Company Limited Interim Dividend received – 65,000,000

(III) Associate Company

IDFC Infra Debt Fund Limited Investment in equity shares 1,430,000,000 –

(IV) Fellow Subsidiary Company

IDFC Securities Limited Purchase of investment 2,462,166,070 –

IDFC Foundation CSR expenditure 6,228,521 –

(V) Key Management Personnel

Mr. M. K. Sinha Remuneration paid 48,509,977 –

Mr. Satish Mandhana Remuneration paid 44,342,394 42,125,361

26 Lease disclosureIn accordance with the Accounting Standard 19 on ‘Leases’ as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, the following disclosures in respect of operating leases are made:

The Company has taken premises under operating leases, which expires between August 2015 to May 2020 (previous year Nil). Rent include gross rental expenses of ` 1,227,000 (previous year ` Nil).

The committed lease rentals in the future are:


Not later than one year 29,854,775 –

Later than one year and not later than five years 135,340,491 –

Later than five year 5,597,350 –

27 Earnings per share In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, the earning per share has been computed as under:


Net profit after tax for the year 227,202,335 188,319,150

Weighted average number of equity shares 144,930 50,000 Par value per share 10 10 Earnings per share - Basic 1,567.67 3,766.38

Earnings per share - Diluted 1,567.67 3,766.38



28 Provision and contingencies(a) Contingent liabilities and commitments


` `

1) CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debt in respect of:

Income-tax demands disputed by the Company, net of amount paid. The matter in dispute is under appeal. The demand have been paid/adjusted and will be received as refund if the matter is decided in favour of the Company.

– 668,825

Other claims – 14,052,000

2) COmmITmENTS

Uncalled liability on shares and other investments partly paid 585,454 1,771,734

585,454 16,492,559

The Company does not account 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.

29 Prior years figuresPrevious year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.






ZUBIN SHEKARy


SUNIL KAKAR


Director

mANISH jINDAL


IDFC ALTERNATIVES LIMITED - Infrastructure Finance · PDF fileIDFC AlternAtIves lImIteD | 3 Board's Report ... wholly owned subsidiary company namely IDFC Project Equity Company ...

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