IDFC CapItal lImIteD

IDFC CapItal lImIteD

DIReCtORSMr. Vikram Limaye - ChairmanMr. Sunil KakarMr. Sadashiv S. RaoDr. Rajeev Uberoi

aUDItORSDeloitte Haskins & SellsChartered Accountants

pRINCIpal BaNKeRSHDFC Bank Limited

ReGISteReD OFFICeNaman Chambers, C-32G-Block, Bandra-Kurla Complex Bandra (East)Mumbai- 400 051TEL: +91 22 4222 2000FAX: +91 22 2654 0354Website: www.idfccapital.com

138 | I D F C A N N U A L R E P O R T 2 0 1 2 – 2 0 1 3

TO THE MEMBERSYour directors have pleasure in presenting the Eighteenth Annual Report together with the Audited Accounts for the year ended March 31, 2013.

FINANCIAL OVERVIEW & OUTLOOKFY13 ended up being the third difficult year in a row for the Investment Banking business where in the overall fee pool for the industry shrunk dramatically. The deal activity slowed down significantly due to various factors like subdued economic environment, unstable tax regime and impact of that on the international investor sentiment. There was hardly any fund raising activity through the IPO and QIP route in the infrastructure/ real estate sector which has been an area of strength for us. On the other hand the deal closure has become difficult for PE/ M&A deals with longer deal cycles. Notwithstanding these challenges we closed the year with revenues of ` 45.63 crore which is better than ` 28.11 crore in FY12.During the year we made gradual inroads in the non-infra sectors. The focus on the non-infra sectors led to successful closure of deals in sectors like cement, engineering, pharma, etc. During the year we also saw successful closure of a couple of M&A deals including our first cross border M&A deal in the pharma sector. The deal momentum picked up significantly in the month of March with the closure of four deals. We are also seeing positive outcome of active PE investor coverage. In addition to these developments on the business front, we have done selective hiring for talent upgradation. As we are beginning FY14 with a robust pipeline that has a good mix of infrastructure/non-infrastructure deals as well as PE/ M&A deals with a few deals with large revenue potential, the year ahead of us looks very promising.

FINANCIAL RESULTS

PARTICULARs

FOR THE yEaR EndEd MaRcH 31, 2013


` `

Total Income 456,269,047 281,199,744

Less: Total Expenses 240,139,974 269,261,765

Profit/(Loss) before Tax 216,129,073 11,937,979

Less: Total Tax Expenses 58,620,000 3,450,000

Profit/(Loss) after Tax 157,509,073 8,487,979

DIVIDENDThe Directors do not recommend any dividend for the year ended March 31, 2013.

SUBSIDIARY COMPANIESIDFC Capital Ltd. has three wholly owned subsidiaries namely IDFC Capital (Singapore) Pte. Ltd., IDFC Fund of Funds Ltd and IDFC Securities Singapore Pte Limited. During the year, IDFC General Partners, a wholly owned subsidiary of IDFC Capital Limited was placed in liquidation on March 2, 2012 and it was dissolved under voluntary liquidation process with effect from September 21, 2012. During the year, IDFC Securities Singapore Pte. Limited, a wholly owned subsidiary of IDFC Capital Ltd was incorporated on November 21, 2012.As required under the provisions of Section 212 of the Companies Act, 1956, a statement of holding company’s interest in the subsidiary companies and the Annual Report of such subsidiary companies have been attached to this report.

DIRECTORSMr. Sunil Kakar would be retiring by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting (AGM).The Board of Directors recommends re-appointment of all the above Directors at the ensuing AGM.

AUDIT COMMITTEEThe Audit Committee comprises of three Directors as its Members namely Mr. Sunil Kakar, Mr. Sadashiv S. Rao and Dr. Rajeev Uberoi.The Audit Committee met four times during the year under review.

AUDITORSM/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad will retire as the Statutory Auditors of the Company at the conclusion of the ensuing AGM. The Board at its meeting held on April 22, 2013 has proposed their re-appointment as Statutory Auditors to audit the accounts of the Company for the financial year ending March 31, 2014.M/s. Deloitte Haskins & Sells, Ahmedabad, the retiring Auditors, have confirmed that their re-appointment, if made, would be in conformity with the provisions of Sections 224 and 226 of the Companies Act, 1956 and also indicated their willingness to be re-appointed. You are requested to consider their re-appointment.

Directors' Report

I D F C C A P I T A L L I M I T E D | 1 3 9

PUBLIC DEPOSITSDuring the year under review, your Company has not accepted any public deposits under provisions of Section 58A of the Companies Act, 1956.

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 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the report of Board of Directors) Rules, 1988, are not applicable and hence not given.

FOREIGN EXCHANGE EARNINGS AND EXPENDITUREThe particulars regarding foreign exchange earnings and expenditure are furnished at Note No. 27 in the Notes to the financial statements.

PARTICULARS OF EMPLOYEES AND REMUNERATIONThe Company had 67 employees as on March 31, 2013. As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of employees are annexed to the Directors’ Report.

DIRECTORS’ RESPONSIBILITY STATEMENTPursuant to Section 217(2AA) of the Companies Act, 1956, the Directors confirm that:

� in preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating to the material departures;

� they have 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, 2013 and the profit of the Company for the year ended on that date;

� they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

� they have prepared annual accounts on a going concern basis.

ACKNOWLEDGEMENTSThe Board wishes to thank the clients, Banks, Securities Exchange Board of India and other Regulatory and Statutory Authorities for their continued support to your Company. The Board also places on record its appreciation for the sincere efforts of the staff. The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, the parent organisation, and also other group companies.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORs

VIKRAM LIMAYE

Chairman

Mumbai, July 1, 2013

Directors' Report


Independent Auditors’ Report TO THE MEMBERS OF IdFc caPITaL LIMITEdReport on the Financial StatementsWe have audited the accompanying financial statements of IDFC CAPITAL LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsThe Company’s Management is responsible for 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 Standards referred to in Section 211(3C) of the Companies Act, 1956 (“the Act”). This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, 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.

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:(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;(b) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government in terms of Section 227(4A) of the

Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.2. As required by Section 227(3) of the Act, we report that:

(a) We have 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards

referred to in Section 211(3C) of the Act.(e) On the basis of the written representations received from the directors as on March 31, 2013 taken on record by the Board of Directors,

none of the directors is disqualified as on March 31, 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

FOR DELOITTE HAsKINs & sELLs

Chartered Accountants(Firm Registration No. 117365W)

Z. F. BILLIMORIA

Partner(Membership No. 42791)

Mumbai, April 22, 2013


(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)(i) Having regard to the nature of the Company’s business / activities / results / transactions, etc. clauses (ii), (vi), (viii), (x), (xii), (xiii), (xv), (xvi),

(xviii), (xix) and (xx) of CARO are not applicable.(ii) In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which,

in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In case of loans, secured or unsecured, taken by the Company from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:(a) The Company has taken loans to ` 1,200,000,000 during the year from one party. At the year-end, the outstanding balance of such

debentures aggregated to ` 1,200,000,000 and the maximum amount involved during the year was ` 1,200,000,000.(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(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) To the best of our knowledge and belief and according to the information and explanations given to us, there were no contracts or arrangements that needed to be entered in the Register maintained under Section 301 of the Companies Act, 1956.

(vi) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(vii) According to the information and explanations given to us in respect of statutory dues:(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, 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 Income-tax, Service tax, Cess and other material statutory dues in arrears as at

March 31, 2013 for a period of more than six months from the date they became payable.(c) Details of dues of Income-tax which have not been deposited as on March 31, 2013 on account of disputes are given below:

NAME OF THE sTATUTE NATURE OF DUEs FORUM wHERE DIsPUTE Is PENDINg

PERIOD TO wHICH THE AMOUNT RELATEs

AMOUNT `

Income Tax Act, 1961 Income Tax Income Tax Officer AY 2009-10 918,529

Commissioner of Income Tax AY 2006-07 100,807

Income Tax Appellate Tribunal AY 2004-05 10,799,091

(viii) In our opinion and according to the information and explanation given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.

(ix) Based on our examination of the records and evaluation of the related internal controls, the Company has maintained proper records of the transactions and contracts in respect of its dealing in mutual fund investments and timely entries have been made therein. The aforesaid securities have been held by the Company in its own name.

(x) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

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


Chartered Accountants(Firm registration number: 117365W)

Z. F. BILLIMORIA

Partner(Membership No.: 42791)

Mumbai, April 22, 2013

Annexure to the Auditors’ Report


Balance Sheet aS aT MaRcH 31, 2013

nOTES aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

EqUITY AND LIABILITIEs

sHAREHOLDERs’ FUNDs

(a) Share capital 3 60,352,200 60,352,200

(b) Reserves and surplus 4 1,249,220,506 1,091,711,433

1,309,572,706 1,152,063,633 NON-CURRENT LIABILITIEs

(a) Long-term borrowings 5 1,200,000,000 -

(b) Other long-term liabilities 6 22,632 22,632

1,200,022,632 22,632 CURRENT LIABILITIEs

(a) Trade payables 7 127,657,709 74,917,894

(b) Other current liabilities 8 14,824,380 259,373,522

(c) Short-term provisions 9 22,561,407 246,191

165,043,496 334,537,607

TOTAL 2,674,638,834 1,486,623,872 AssETs

NON-CURRENT AssETs

(a) Fixed assets

Tangible assets 10 2,345,251 1,723,537

Intangible assets 11 227,111 469,416

2,572,362 2,192,953

(b) Non-current investments 12 1,562,618,316 1,184,823,417

(c) Deferred tax assets 13 8,000,000 9,700,000

(d) Long-term loans and advances 14 71,925,388 72,225,477

1,645,116,066 1,268,941,847 CURRENT AssETs

(a) Current investments 15 619,111,795 769,725

(b) Trade receivables 16 271,872,469 202,539,240

(c) Cash and bank balances 17 131,780,253 6,859,872

(d) Short-term loans and advances 14 1,183,438 1,590,116

(e) Other current assets 18 5,574,813 5,923,072

1,029,522,768 217,682,025

TOTAL 2,674,638,834 1,486,623,872

See accompanying notes forming part of the financial statements.

IN TERMs OF OUR REPORT ATTACHED.


Chartered AccountantsFOR AND ON BEHALF OF THE BOARD OF DIRECTORs OF

IDFC CAPITAL LIMITED

Z. F. BILLIMORIA

PartnerVIKRAM LIMAYE

Chairman sUNIL KAKAR

Director

Mumbai | April 22, 2013NARENDRA gANgAN

Company Secretary


Statement of Profit and Loss FOR THE yEaR EndEd MaRcH 31, 2013

nOTES FOR THE yEaR EndEd MaRcH 31, 2013


` `

I INCOME

Revenue from operations 19 418,822,748 277,652,750

Other income 20 37,446,299 3,546,994

TOTAL INCOME (I) 456,269,047 281,199,744

I I ExPENsEs

Employee benefits expense 21 187,952,282 210,663,360

Finance costs 22 239,529 638,939

Depreciation and amortisation expense 10,11 1,167,590 1,499,940

Other expenses 23 49,074,015 53,871,215

Provisions and contingencies 24 1,706,558 2,588,311

TOTAL ExPENsEs (II) 240,139,974 269,261,765

I I I PROFIT BEFORE TAx (I - II) 216,129,073 11,937,979

IV TAx ExPENsE

Current tax 56,920,000 2,360,000

Less: Minimum Alternate Tax (MAT) credit - (2,110,000)

Deferred tax 13 1,700,000 3,200,000

TOTAL TAx ExPENsE (IV) 58,620,000 3,450,000

V PROFIT FOR THE YEAR FROM CONTINUINg OPERATIONs (III - IV) 157,509,073 8,487,979

Earnings per equity share (nominal value of share ` 10 each) 28

Basic (`) 26.10 1.41

Diluted (`) 21.73 1.41

See accompanying notes forming part of the financial statements.





Z. F. BILLIMORIA



Director


Company Secretary


Cash Flow Statement FOR THE yEaR EndEd MaRcH 31, 2013



` `

CAsH FLOw FROM OPERATINg ACTIVITIEs

PROFIT BEFORE TAx 216,129,073 11,937,979 Adjustments for

Depreciation and amortisation 1,167,590 1,499,940 Interest on delayed payment of advance tax 80,000 - Provision for doubtful debts 1,706,558 (2,855,685)Dividend income (36,408,960) (2,277,937)Loss on sale /discarding of fixed assets 18,525 443,247 Gain on sale of current investment (789,839) (142,150)Gain on disposal of subsidiary (104,157) - Provision for employee benefits (6,847,031) 4,414,084

Operating profit before working capital changes 174,951,759 13,019,478

Changes in working capital:Adjustments for (increase) / decrease in operating assets:

Trade receivables (69,939,975) 180,918,511 Short-term loans and advances 406,678 5,473,859 Long-term loans and advances 2,165,664 (2,165,664)Other current assets (751,553) 5,348,436

Adjustments for increase / (decrease) in operating liabilities:Other trade payables 52,739,815 (240,340,138)Other current liabilities (237,702,111) 206,303,133 Other long-term liabilities - (942,828)

CAsH (UsED IN )/gENERATED FROM OPERATIONs (78,129,723) 167,614,787 Net income tax paid (35,840,308) (62,580,268)

NET CAsH gENERATED FROM OPERATINg ACTIVITIEs (A) (113,970,031) 105,034,519 CAsH FLOw FROM INVEsTINg ACTIVITIEs

Proceeds from sale of fixed assets 62,307 435,186 Purchase of fixed assets ( including capital advance) (2,337,877) (1,361,690)Purchase of current investments (2,971,998,453) - Proceeds from sale of current investments 2,353,676,493 77,841,365 Liquidation of investments in subsidiaries 873,882 - Investments in subsidiary (377,794,900) (260,031,225)Dividend received 36,408,960 2,277,937

NET CAsH UsED IN INVEsTINg ACTIVITIEs (B) (961,109,588) (180,838,427)CAsH FLOw FROM FINANCINg ACTIVITIEs

Proceed from fresh issue of Debentures 1,200,000,000 - NET CAsH FROM FINANCINg ACTIVITIEs (C) 1,200,000,000 - Net increase/(decrease) in cash and cash equivalents (A+B+C) 124,920,381 (75,803,908)Cash and cash equivalents as at the beginning of year (see note 17) 6,859,872 82,663,780 Cash and cash equivalents as at the end of year (see note 17) 131,780,253 6,859,872

124,920,381 (75,803,908)





Z. F. BILLIMORIA



Director


Company Secretary


Notes to financial statements aS aT and FOR THE yEaR EndEd MaRcH 31, 2013

01 BackgroundIDFC Capital Limited ("the Company") is a public company, incorporated in India and regulated by the Securities and Exchange Board of India (SEBI) as a Category - I Merchant Banker. The Company is a wholly owned subsidiary of IDFC Securities Limited. IDFC Limited (formerly Infrastructure Development Finance Company Limited) is the ultimate holding company.

02 Significant accounting policiesa. Basis of preparationThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) with the accounting standards notified by the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b. Use of estimatesThe Company adopts the accrual concept in the preparation of the accounts. The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognised in the period in which the results are known/materialise.

c. Revenue recognition (a) Income from fee-based activities is recognised on the basis of terms of contracts with the clients and when reasonable right of recovery is

established and is accounted net of service tax. (b) Interest income is recognised on an accrual basis. (c) Dividend is recognised when the right to receive is established as at the Balance Sheet date.

d. Fixed assets and intangible assetsFixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. 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 technology support cost or annual maintenance cost for such software is charged annually to the Statement of Profit and Loss.

e. depreciation and amortisation Tangible assets Depreciation on fixed assets, excluding certain electronic items, is provided on the written down value method, at the rates prescribed by

Schedule XIV of The Companies Act, 1956. Certain electronic items are depreciated over a period of 2 years on straight-line method based on the management’s estimate of the useful life of assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are written off in the year of capitalisation.

Intangible assets Computer software is amortised over a period of 3 years by using straight-line method. The Company has regular programme of evaluating useful life of its assets.

f. InvestmentsInvestments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on ‘Accounting for Investments’ as notified by the Companies (Accounting Standards) Rules, 2006. All other investments are classified as long-term investments.All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.

� ‘Long Term Investments' are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis. � ‘Current Investments' are carried at the lower of cost or fair value on an individual basis.

g. cash and cash equivalentsCash 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.



h. cash flow statementCash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Company are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

i. Employee benefits – Defined contribution plans The Company’s contribution to provident fund and superannuation fund are considered as defined contribution plan and are charged as an

expense to the Statement of Profit and Loss every year 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.

Compensated absences Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent

encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

j. Income - TaxThe provision for tax in the accounts comprises both, current tax and deferred tax. Current tax is the amount payable on taxable income for the year as determined in accordance with the provisions of Income-tax Act 1961. The accounting treatment for income-tax in respect of the Company's income is based on Accounting Standard 22 on 'Accounting for Taxes on Income' as notified by the Companies (Accounting Standards) Rules, 2006. 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 assets can be realised. In situations where the Company has unabsorbed depreciation or carried forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that the same can be realised against future taxable profits.

k. 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.

l. 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, if any, are disclosed in the notes.

m. 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.

n. Service tax input creditService tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing/utilising the credit.

o. 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 capitalaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

nUMBER ` nUMBER `

(A) AUTHORIsED

Equity shares of ` 10 each 10,000,000 100,000,000 7,000,000 70,000,000 (B) IssUED, sUBsCRIBED & FULLY PAID UP

Equity shares of ` 10 each 6,035,220 60,352,200 6,035,220 60,352,200

{All the above equity shares are held by IDFC Securities Limited, the holding company and its nominees. The ultimate holding company is IDFC Limited (formerly Infrastructure Development Finance Company Limited)}

TOTAL 60,352,200 60,352,200

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

aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

nUMBER ` nUMBER `

Outstanding at the beginning of the year 6,035,220 60,352,200 6,035,220 60,352,200

Issued during the year - - - -

Outstanding at the end of the year 6,035,220 60,352,200 6,035,220 60,352,200

b Terms/rights attached to equity sharesThe Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

c details of shareholders holding more than 5% of the shares in the company


EqUITY sHAREs NUMBER % OF HOLDINg NUMBER % OF HOLDINg

IDFC Securities Limited and its nominees 6,035,220 100% 6,035,220 100%

04 Reserves and surplusaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

(a) sECURITIEs PREMIUM ACCOUNT 101,100,000 101,100,000

(b) DEBENTURE REDEMPTION REsERVE

Opening balance - -

Add:- Transferred from surplus in statement of Profit and Loss 300,000,000 -

Closing balance 300,000,000 -

Debenture redemption reserve has been created in accordance with section 117C of the Companies Act, 1956 in respect of the privately placed Zero Coupon Optionally Convertible Debentures ("ZCOCD").

(c) sURPLUs IN THE sTATEMENT OF PROFIT AND LOss

Opening balance 990,611,433 982,123,454

Add: Profit for the year 157,509,073 8,487,979

Less: Transfer to debenture redemption reserve 300,000,000 -

Closing balance 848,120,506 990,611,433

TOTAL 1,249,220,506 1,091,711,433



05 Long -term borrowingsaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Zero coupon optionally convertible debentures (Unsecured) 1,200,000,000 -

1,200,000,000 -

The Company has issued the ZCOCDs to the Holding Company. The term of the ZCOCDs is for a period of 5 years and is convertible into 2,267,831 shares at ` 529.14/ share. The tenure can be renewed / extended as may be mutually agreed upon between the parties. The redemption/conversion is at the option of the holder of ZCOCDs i.e. the Holding Company.

06 Other long-term liabilitiesaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Others * 22,632 22,632

TOTAL 22,632 22,632

* Represents amounts withheld from erstwhile promoters in terms of the Share Purchase Agreement.

07 Trade payablesaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Provision for expenses 43,144,724 35,570,394

Payable to vendors 88,608 88,608

Payable to holding company (see note 30) 84,424,377 39,258,892

TOTAL 127,657,709 74,917,894

No amount is payable to "Suppliers" registered under Micro Small and Medium Enterprises Development Act, 2006. No interest has been paid / is 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 liabilitiesaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Payable to gratuity fund (see note 26) - 6,847,031

Amount payable to a related party - 229,500,000

Statutory remittances 14,824,380 23,026,491

TOTAL 14,824,380 259,373,522

09 Short-term provisionsaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Provision for income tax [net of advance tax ` 34,684,784 (Previous year ` Nil)]

22,546,407 231,191

Provision for fringe benefit tax[net of advance tax ` 905,000 (Previous year ` 905,000)]

15,000 15,000

TOTAL 22,561,407 246,191



10 Tangible assetsGROSS BLOCk ACCuMuLATeD DePReCIATION NeT BLOCk

BA

LA

NC

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S A

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PR

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` ` ` ` ` ` ` ` ` `

Office equipment 1,301,248 424,288 18,100 1,707,436 787,609 375,146 1,488 1,161,267 546,169 513,639

Computers 5,076,477 248,289 201,761 5,123,005 3,866,579 516,924 137,541 4,245,962 877,043 1,209,898

Furniture & Fixtures - 94,867 - 94,867 - 11,855 11,855 83,012 -

Vehicles - 860,387 - 860,387 - 21,360 - 21,360 839,027 -

TOTAL 6,377,725 1,627,831 219,861 7,785,695 4,654,188 925,285 139,029 5,440,444 2,345,251 1,723,537

Previous year 9,023,158 818,170 3,463,603 6,377,725 6,122,396 1,116,962 2,585,170 4,654,188 1,723,537 2,900,762

11 Intangible assetsGROSS BLOCk ACCuMuLATeD AMORTISATION NeT BLOCk

BA

LA

NC

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S A

T A

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2

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BA

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2

` ` ` ` ` ` ` ` ` `

Computer software 1,314,363 - - 1,314,363 844,947 242,305 - 1,087,252 227,111 469,416

TOTAL 1,314,363 - - 1,314,363 844,947 242,305 - 1,087,252 227,111 469,416

Previous year 770,843 543,520 - 1,314,363 461,969 382,978 - 844,947 469,416 308,874

Total tangible & intangible assets 7,692,088 1,627,831 219,861 9,100,058 5,499,135 1,167,590 139,029 6,527,696 2,572,362 2,192,953

Previous year 9,794,001 1,361,690 3,463,603 7,692,088 6,584,365 1,499,940 2,585,170 5,499,135 2,192,953 3,209,636

12 Non-current investmentsaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

FACE VALUE ` qUANTITY ` qUANTITY `

TRADE INVEsTMENTs (VALUED AT COsT UNLEss sTATED OTHERwIsE)

UNqUOTED EqUITY sHAREs (FULLY PAID)

INVEsTMENT IN sUBsIDIARIEs

IDFC Capital (Singapore) Pte Ltd. SGd1 15,475,000 563,767,070 11,600,000 392,458,070

IDFC Fund of Funds Limited USd 1 19,819,290.56 964,814,141 16,262,711.56 771,780,287

IDFC Securities Singapore Pte Ltd SGd1 300,001 13,452,045 - -

1,542,033,256 1,164,238,357 NON-TRADE INVEsTMENTs (VALUED AT COsT UNLEss sTATED OTHERwIsE)

INVEsTMENT IN EqUITY INsTRUMENTs (UNqUOTED) (FULLY PAID)

Epsilon Advisers Private Limited 10 1,250,000 15,135,000 1,250,000 15,135,000

SSIPL Retail Private Limited 10 121,840 20,585,060 121,840 20,585,060

Provision for diminution in value of investments (15,135,000) (15,135,000)

20,585,060 20,585,060

TOTAL 1,562,618,316 1,184,823,417



13 Deferred tax assets aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

TAx EFFECTs OF ITEMs CONsTITUTINg DEFERRED TAx AssETs

(a) On difference between book balance and tax balance of fixed assets 1,021,524 1,082,688

(b) Provision for gratuity and others 6,978,476 8,617,312

TOTAL 8,000,000 9,700,000 As per Accounting Standard 22 relating to ‘Accounting for Taxes on Income’ as notified under the Companies (Accounting Standards) Rules, 2006, the Company has taken debit of ` 1,700,000 (Previous year debit ` 3,200,000) in the Statement of Profit and Loss towards deferred tax asset on account of timing differences.

14 Loans and advances (unsecured, considered good) aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

NON-CURRENT PORTION

CURRENT MATURITIEs

NON-CURRENT PORTION

CURRENT MATURITIEs

` ` ` `

Loan and advances to employees - 164,081 - 29,096

Capital Advance 710,046 - - -

Prepaid expenses - 1,019,357 55,664 1,561,020

Advance payment of income tax 71,079,820 - 69,924,291 -

[net of provision for tax of ` 532,562,283 (Previous year ` 531,660,000)]

Advance payment of fringe benefit tax 135,522 135,522

[net of provision for tax of ` 905,000 (Previous year ` 905,000)]

Minimum Alternate Tax (MAT) credit - - 2,110,000 -

TOTAL 71,925,388 1,183,438 72,225,477 1,590,116

15 Current investmentsFacE

vaLUE ` aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

QUanTITy ` QUanTITy `

TRADE INVEsTMENTs (VALUED AT COsT UNLEss sTATED OTHERwIsE)

UNqUOTED EqUITY sHAREs (FULLY PAID)

A INVEsTMENT IN sUBsIDIARIEs

IDFC General Partners Limited * USD 1.65 - 10,000 769,725 B NON-TRADE INVEsTMENTs (VALUED AT

LOwER OF COsT AND FAIR VALUE)

MUTUAL FUNDs (UNqUOTED)

IDFC Cash Fund-Daily Dividend (Direct Plan) 10 10,917.323 10,920,052 - -

IDFC Dynamic Bond Fund-Growth-(Direct Plan) 10 40,876,599.18 575,554,779 - -

IDFC Cash Fund-Direct Plan-Daily Dividend 10 2,636.305 2,636,964 - -

IDFC Fixed Maturity Plan 366 Days Series 82-Monthly - Dividend

10 3,000,000 30,000,000

TOTAL 619,111,795 769,725

Aggregate amount of Investments in unquoted mutual funds

Cost 619,111,795 -

Market Value 620,270,884 -

Market value of investment in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.

* IDFC General Partners Limited was dissolved under voluntary liquidation process with effect from September 21, 2012.



16 Trade receivables (unsecured) (considered good unless stated otherwise)aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` ` `

Outstanding for a period less than six months from the date they are due for payment

209,956,557 139,519,617

Outstanding for a period more than six months from the date they are due for payment

61,915,912 63,019,623

Considered doubtful outstanding for a period exceeding six months from the date they are due for payment

1,493,506 886,760

Provision for doubtful debts (1,493,506) (886,760)

- -

TOTAL 271,872,469 202,539,240

17 Cash and bank balancesaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

CAsH AND CAsH EqUIVALENTs

Cash on hand 11,146 23,066

Cheques on hand 29,151,799 728,156

Balances with banks:

- In current accounts 102,617,308 6,108,650

TOTAL 131,780,253 6,859,872

18 Other current assetsaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` ` `

Gratuity receivable 777,792 1,874,716

Contractually reimbursable expenses 8,663,284 6,814,807

Less: Provision against reimbursable expenses (3,866,263) 4,797,021 (2,766,451)

TOTAL 5,574,813 5,923,072

19 Revenue from operationsFOR THE yEaR EndEd

MaRcH 31, 2013FOR THE yEaR EndEd

MaRcH 31, 2012

` `

Investment banking fees (see notes a and b) 418,200,243 277,652,750

Others 622,505 -

TOTAL 418,822,748 277,652,750

(a) The Company has an arrangement with the holding company, IDFC Securities Limited to avail of research, financial advisory and other distribution services on some of the assignment/mandates. In consideration of these services, the Company shares the success fees received from the clients in the ratio mutually agreed upon. An amount of ` 86,495,242 (Previous year ` 12,952,258) has been shared during the year in respect of the above services with the holding company.

(b) The Company also has an arrangement with IDFC Limited (formerly Infrastructure Development Finance Company Limited),for its Debt Syndication business on some of the assignments/mandates. In consideration of these services, the Company receives a share from IDFC Limited (Formerly Infrastructure Development Finance Company Limited)in the ratio mutually agreed upon. An amount of ` Nil (Previous year `149,697,925) has been shared during the year in respect of the above services.



20 Other incomeFOR THE yEaR EndEd


MaRcH 31, 2012

` `

Dividend from current investments 36,408,960 2,277,937

Gain on sale of current investments 789,839 142,150

Miscellaneous income 247,500 1,126,907

TOTAL 37,446,299 3,546,994

21 Employee benefits expenseFOR THE yEaR EndEd


MaRcH 31, 2012

` `

Salaries and bonus * (see note 31) 174,062,766 195,642,253

Contribution to provident and other funds (see note 26) 11,118,808 12,290,247

Staff welfare expenses 2,770,708 2,730,860

TOTAL 187,952,282 210,663,360

* Salaries and bonus includes deputation charges of ` 6,700,000 (previous year ` Nil) paid /payable to IDFC Securities Limited

22 Finance CostFOR THE yEaR EndEd


MaRcH 31, 2012

` `

Bank Charges 4,744 25,108

Interest on delayed payment of Statutory Liabilities 234,785 613,831

TOTAL 239,529 638,939

23 Other expensesFOR THE yEaR EndEd


MaRcH 31, 2012

` `

Repairs and maintenance

Equipment 821,990 619,618

Others 111,000 -

Insurance charges 9,482 -

Travelling and conveyance 16,460,431 16,838,219

Printing and stationery 321,797 368,933

Postage, telephone and fax 1,255,640 2,013,272

Advertising and publicity 1,087,070 673,798

Professional fees 6,078,444 2,115,972

Membership and subscription 6,524,560 5,346,045

Filing & registration fees 945,078 247,873

Bad debts - 5,337,652

Loss on foreign exchange fluctuation(net) 25,152 40,933

Loss on sale/discarding of fixed assets (net) 18,525 443,247

Miscellaneous expenses 243,946 126,120

Auditors' remuneration * 1,490,000 2,281,487

Shared services costs (see note 30) 13,680,900 17,418,046

TOTAL 49,074,015 53,871,215



* Break up of auditors’ remuneration:



` `

Audit fee 800,000 1,200,000

Tax audit fee 200,000 400,000

Taxation matters 100,000 100,000

Other services 390,000 580,000

Out of pocket expenses - 1,487

Service tax 184,164 270,013

Total 1,674,164 2,551,500

Less:- Service tax set off claimed 184,164 270,013

TOTAL 1,490,000 2,281,487

24 Provisions for contingenciesFOR THE yEaR EndEd


MaRcH 31, 2012

` `

Opening provision for trade receivables 3,653,211 6,508,896

Less : Amount written off out of opening provision - 5,443,996

Balance out of opening provision 3,653,211 1,064,900

Less : Closing provision for the year as per note 16 and 18 5,359,769 3,653,211

Charge for the year 1,706,558 2,588,311

25 Contingent liabilities not provided for in respect of:aS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

(a Claims not acknowledged as debts in respect of :

Disputed Income-tax demands (net of amounts provided). The matters in dispute are under appeal. The demands have been paid/adjusted and will be received as refund if the matters are decided in favour of the Company.

11,818,427 10,899,898

(b) Commitments

Liquidation cost of subsidiary - 2,044,980

26 Employee benefits In accordance with Accounting Standard –15 on “Employee Benefits”, notified under the Companies (Accounting Standards) Rules 2006, the following disclosures have been made:(i) The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans

which are included under contribution to provident and other funds:



` `

Provident fund 6,639,064 7,263,492

Superannuation fund 541,821 612,671



ii) The details of the Company’s post-retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors:



` `

CHANgE IN THE BENEFIT OBLIgATIONs:

Liability at the beginning of the year 16,646,342 13,254,132

Current service cost 4,480,387 5,624,187

Interest cost 1,617,972 1,528,449

Actuarial gain (1,228,580) (2,686,966)

Liabilities assumed on Acquisition/(Settled on Divestiture) (169,609) -

Past service cost - -

Benefits paid (3,158,386) (1,073,460)

Liability at the end of the year 18,188,126 16,646,342 FAIR VALUE OF PLAN AssETs:

Fair value of plan assets at the beginning of the year 9,269,441 9,938,068

Expected return on plan assets 636,020 957,984

Contributions 10,961,577 -

Actuarial loss on plan assets 479,474 (553,151)

Benefits paid (3,158,386) (1,073,460)

Fair value of plan assets at the end of the year 18,188,126 9,269,441

Total actuarial gain to be recognized 1,708,054 2,133,815 ACTUAL RETURN ON PLAN AssETs:

Expected return on plan assets 636,020 957,984

Actuarial loss/(Gain) on plan assets 479,474 553,151

Actual return on plan assets 1,115,494 404,833 AMOUNT RECOgNIsED IN THE BALANCE sHEET:

Liability at the end of the year 18,188,126 16,646,342

Fair value of plan assets at the end of the year 18,188,126 9,269,441

Unrecognized past service cost 176,623 529,870

Amount recognised in the Balance Sheet under “Payable to gratuity fund” (176,623) 6,847,031 ExPENsEs RECOgNIsED IN THE sTATEMENT OF PROFIT AND LOss UNDER "EMPLOYEE BENEFIT ExPENsE"

Current service cost 4,480,387 5,624,187

Interest cost 1,617,972 1,528,449

Expected return on plan assets (636,020) (957,984)

Net actuarial gain to be recognised (1,708,054) (2,133,815)

Past service cost 353,247 353,247

Losses/(Gains) on "Acquisition/ Divestiture" (169,609) -

Expenses recognised in the Statement of Profit and Loss under "Employee benefit expense 3,937,923 4,414,084 RECONCILIATION OF THE LIABILITY RECOgNIsED IN THE BALANCE sHEET:

Opening net liability 6,847,031 2,432,947

Expense recognised 3,937,923 4,414,084

Contribution by the Company 10,961,577 -

Amount recognised in the Balance Sheet under “Excess with to gratuity fund” (176,623) 6,847,031

Expected Employer’s contribution next year 4,000,000 1,000,000



FOR THE yEaR EndEd

MaRcH 31,2013 MaRcH 31, 2012 MaRcH 31, 2011 MaRcH 31, 2010 MaRcH 31, 2009

ExPERIENCE ADjUsTMENTs: ` ` ` ` `

Defined benefit obligation 18,188,126 16,646,342 13,254,132 6,102,901 3,773,094

Plan assets 18,188,126 9,269,441 9,938,068 2,954,601 1,950,208

Deficit - (7,376,901) (3,316,064) (3,148,300) (1,822,886)

Experience adjustment on plan liabilities (1,839,842) (1,999,531) (1,459,495) (2,751,189) (162,937)

Experience adjustment on plan assets 479,474 (553,151) (328,063) (88,492) (8,939)


% %

INVEsTMENT PATTERN:

Insurer managed fund 100 100PRINCIPAL AssUMPTIONs:

Discount rate 8.05 8.38

Return on plan assets 8.00 8.00

Salary escalation rate 8.00 8.00

As the Gratuity fund is managed by Life Insurance Company details of investments are not available with the Company.

The estimates of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.

27 Expenditure in foreign currenciesaS aT MaRcH 31, 2013 aS aT MaRcH 31, 2012

` `

Professional fees 1,415,297 20,000

Others 3,043,767 2,287,792

TOTAL 4,459,064 2,307,792

EARNINgs IN FOREIgN CURRENCIEs :


` `

Investment Banking Fees 14,707,665 -

TOTAL 14,707,665 -

28 In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as notified under the Companies (Accounting Standards) Rules,

2006, the Earnings Per Share has been computed as under:


` `

Net profit attributable to equity shareholders 157,509,073 8,487,979

Weighted average number of equity shares issued 6,035,220 6,035,220

Basic Earnings Per Share (EPS) 26.10 1.41

Diluted Earnings Per Share (EPS) 21.73 1.41



The reconciliation between the basic and the diluted earnings per share is as follows:



` `

Basic Earnings Per Share 26.10 1.41

Effect of Zero coupon optionally converted debenture (4.37) -

Diluted Earnings Per Share 21.73 1.41

The basic earnings per share has been computed by dividing the net profit after tax for the year available for equity shareholders by the weighted average number of equity shares for the respective years, whereas the diluted earnings per share has been computed by dividing the net profit after tax for the year available for equity shareholders by the weighted average number of equity shares, after giving dilutive effect of Zero coupon optionally converted debenture for the respective years. The relevant details as described above are as follows.



` `

Weighted average number of shares for computation of basic earning per share 6,035,220 6,035,220

Dilutive effect of conversion of Zero coupon optionally converted debenture 1,211,581 -

Weighted average number of shares for computation of diluted earning per share 7,246,801 6,035,220

29 Segment reportingThe Company is mainly engaged in Merchant Banking business in India. All other activities of the Company revolve around the main business in India. As such, there are no separate reportable segments as per Accounting Standard 17 “Segment Reporting” as notified under the Companies (Accounting Standards) Rules, 2006.

30 Related party disclosuresAs per the Accounting Standard 18 on ‘Related Party Disclosures’ as notified under the Companies (Accounting Standards) Rules, 2006, the related parties of the Company are as follows:

i. Ultimate holding company: IDFC Limited (formerly Infrastructure Development Finance Company Limited)

ii. Holding company: IDFC Securities Limited

iii. Subsidiary companies: IDFC Capital (Singapore) Pte. Ltd. IDFC Securities Singapore Pte Ltd. (w.e.f November 21, 2012) IDFC Fund of Funds Limited IDFC General Partners Limited (upto September 21, 2012) There are no transactions with any fellow subsidiaries.

III Key Management Personnel: Mr. Naishadh Paleja ( upto November 30, 2011 )

The nature and volume of transactions carried out with the above related parties in the ordinary course of business:


` `

NAME OF RELATED PARTY AND NATURE OF RELATIONsHIP

(a) ultimate holding company

IDFC Limited Fees received - 149,697,925

Shared services costs paid 13,680,900 15,898,046

Trade payables - 6,828,902

Trade receivables - 137,732,757

Transfer of Fixed assets 47,213.00 -




` `

NAME OF RELATED PARTY AND NATURE OF RELATIONsHIP

(b) holding company

IDFC Securities Limited Fees paid 86,495,242 12,952,258

Deputation charges paid 6,700,000 -

Professional fees recovered 1,334,995 449,952

Trade payables-others 84,424,376 32,428,899

Zero coupon optionally convertible debentures

1,200,000,000 -

Advance payable - 229,500,000

(c) Subsidiary company

IDFC Capital (Singapore) Pte. Ltd. Subscription to equity capital 171,309,000 25,077,500

IDFC Fund of Funds Limited Subscription to equity capital 193,033,854 234,953,724

IDFC Securities Singapore Pte Ltd Subscription to equity capital 13,452,045 -

IDFC General Partners Limited Refund of capital on winding up 769,725 -

(d) Fellow subsidiary

IDFC Asset Management Company Limited Shared services costs paid - 1,520,000

(e) key management personnel

Mr. Naishadh Paleja Remuneration paid* - 50,978,808

*The remuneration is paid by the holding company.

31 Lease

In accordance with Accounting Standard 19 on 'Leases' as notified under the Companies (Accounting Standards) Rules, 2006, the following

disclosures in respect of operating leases are made:i. The Company has taken vehicle for an employee under operating lease, which expires in December 2015 (Previous year Nil). Salaries include

gross rental expenses of ` 208,971 (Previous year ` 66,848). The committed lease rentals in the future are:


` `

Not later than one year 459,144 209,760

Later than one year and not later than five years 1,078,305 562,617

32 The accounts have not been signed by a Managing Director/ Whole Time Director/ Manager as required under section 215(1)(ii) of the

Companies Act, 1956, since the company is in the process of appointing a suitable person.

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

FOR AND ON BEHALF OF THE BOARD OF DIRECTORs OF


VIKRAM LIMAYE


Director


Company Secretary


NAME OF sUBsIDIARY COMPANY IDFC CAPITAL (sINgAPORE) PTE. LTD.

IDFC FUND OF FUNDs LIMITED

IDFC sECURITIEs sINgAPORE PTE. LTD.

1 Financial year of the Subsidiary Companies ended on

March 31, 2013 March 31, 2013 March 31, 2013

2 Equity Shares of ` 10 each

a) Number of Shares 15,475,000Shares of SGD 1

19,819,291Shares of USD 1

300,001Shares of SGD 1

b) Extent of Holding 100% 100% 100%

3 Net aggregate amount of Profit/ (Losses) of the Subsidiary, so far as they concern members of IDFC Securities Limited

i. For the Financial Year of the Subsidiary

a) Dealt with in the accounts of the Holding Company.

Nil Nil Nil

b) Not dealt with in the accounts of the Holding Company.

(116,134,000) 5,336,693 (5,892,289)

ii. For the previous financial years of the Subsidiary since it became the Holding Company’s Subsidiary.

a) Dealt with in the accounts of the Holding Company.

Nil Nil Nil

b) Not dealt with in the accounts of the Holding Company.

(370,672,285) (164,581,132) Nil

FOR AND ON BEHALF OF THE BOARD OF DIRECTORs OF


Mumbai | April 22, 2013

VIKRAM LIMAYE


Director

Statement Pursuant to Section 212 OF THE cOMPanIES acT, 1956

IDFC CapItal lImIteD

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