IDFC LIMITED IDFC SUBSIDIARY ANNUAL REPORT 2015–2016
contents
1. IDFC FInanCIal holDIng Company lImIteD 2
2. IDFC FoUnDatIon 31
3. IDFC InFRa DeBt FUnD lImIteD 58
4. IDFC alteRnatIVeS lImIteD 95
5. IDFC CapItal (SIngapoRe) pte. lImIteD 133
6. IDFC tRUStee Company lImIteD 150
7. IDFC SeCURItIeS lImIteD 170
8. IDFC SeCURItIeS SIngapoRe pte. lImIteD 207
9. IDFC CapItal (USa) InC. 223
10. IDFC aSSet management Company lImIteD 232
11. IDFC InVeStment manageRS (maURItIUS) lImIteD 292
12. IDFC amC tRUStee Company lImIteD 311
13. IDFC pRoJeCtS lImIteD 330
14. IDFC FInanCe lImIteD 353
U65900TN2014PLC097942
Mr. Vinod Rai (Chairperson)
Dr. Jaimini Bhagwati
Mr. Donald Peck
Dr. Omkar Goswami
Ms. Marianne Økland
Deloitte Haskins & Sells LLP
Chartered Accountants
IDFC Bank Limited
KRM Tower, 8th Floor,
No. 1 Harrington Road,
Chetpet Chennai 600 031
tel +91 44 4564 4000
Fax + 91 44 4564 4022
Website www.idfc.com
email ID [email protected]
Idfc fInancIal holdIng company lImIted
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 3
BOARD'S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Second Annual Report together with the audited financial statements for the year ended March 31, 2016.
opeRatIons RevIew
IDFC Limited (“IDFC”) was granted an In-principle approval by the Reserve Bank of India (“RBI”) on April 9, 2014 (“RBI In-Principle Approval”) to set up a new bank in the private sector under Section 22 of the Banking Regulation Act, 1949. The applicable RBI Guidelines specifically mandatory that all new banks are required to be set up through a non-operative financial holding company and will need to be categorically structured such that all businesses which a bank is permitted to carry out, will necessarily vest in the new bank. The bank and all other regulated financial services entities (regulated by the RBI or other financial sector regulators) will need to be held by such non-operative financial holding company.
Accordingly, IDFC Financial Holding Company Limited (“IDFC FhCl” or “the Company”) was incorporated on November 7, 2014 as a wholly owned subsidiary of IDFC.
IDFC FHCL received Certificate of Registration from the RBI on June 18, 2015 for Non-operative Financial Holding Company (“noFhC”) (as a non-deposit taking NBFC).
fInancIal hIghlIghts
paRtIcUlaRs foR the yeaR endedmaRch 31, 2016
foR the yeaR endedmaRch 31, 2015
Total Income 35,487,207 NIL
Less: Total Expenses 2,906,682 25,275,430
Profit before Tax 32,580,525 (25,275,430)
Less: Provision for Tax 11,728,000 NIL
Profit after Tax 20,852,525 (25,275,430)
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 4 of the Notes forming part of the financial statements.
dIvIdend
The Directors did not recommend dividend for the financial year ended March 31, 2016.
holdIng, sUBsIdIaRy, JoInt ventURe and assocIate companIes
The Hon’ble High Court of Judicature at Madras, vide its Order dated June 25, 2015, sanctioned the Scheme of Arrangement amongst IDFC and IDFC Bank Limited (“IDFC Bank”) and their respective shareholders and creditors under Section 391 to 394 of the Companies Act, 1956 (“Demerger Scheme”). The terms and conditions contained in the Guidelines for Licensing of New Banks in the Private Sector dated February 22, 2013 required IDFC to Transfer / Demerge all assets and liabilities of its lending businesses (“Financing Undertaking”) to IDFC Bank.
Pursuant to the Demerger Scheme, the below subsidiaries of IDFC Limited were transferred to IDFC Financial Holding Company Limited on July 09, 2015:
sR. no name of the company % of eqUIty shaRes tRansfeRRed
i. IDFC Bank Limited* 100%
ii. IDFC Infra Debt Fund Limited ** 100%
iii. IDFC Alternatives Limited 100%
iv. IDFC Trustee Company Limited 100%
v. IDFC Securities Limited 100%
vi. IDFC Asset Management Company Limited (approx) 75%
vii. IDFC AMC Trustee Company Limited (approx) 75%
* Post demerger of Financial Undertaking into IDFC Bank and additional capital infused by IDFC FHCL into IDFC Bank, the shareholding of IDFC FHCL in IDFC Bank stands diluted to approximately 53% as of now.
** IDFC Infra Debt Fund Limited made preferential allotment to Housing Development Finance Corporation Limited and SBI Life Insurance Company Limited. Post preferential issue, the shareholding of IDFC FHCL in IDFC IDF stands diluted. to 81.48%.
A statement containing salient features of the financial statement and all other requisite details of the aforesaid subsidiary company in the format AOC-I is appended as annexure I.
shaRe capItal Update
During the year Company issued and allotted 5,000,000,000; 1,600,000,000 and 4,950,000 equity shares of ` 10 each by Preferential allotment on July 7,2015, July 9, 2015 and May 20, 2015, respectively to IDFC Limited.
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BOARD'S REPORT
Further, on September 30, 2015 Company issued 2,180,000,000 equity shares of ` 10 each by way of Rights Issue to IDFC Limited.
The total share capital of the Company as on March 31,2016 was 8,785,000,000.
paRtIcUlaRs of employees
The Company does not have any employee as on March 31, 2016.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits during the year under review.
paRtIcUlaRs of loans, gUaRantees and Investments
The provision of Section 186 of the Companies Act, 2013 are not applicable to the Company and hence, the particulars of loans, guarantees and investments have not been given.
foReIgn eXchange eaRnIngs and eXpendItURe
There were no foreign exchange earnings or expenditure during the year under review.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Accounts) Rules, 2014 are not applicable.
dIRectoRs and Kmp
With profound grief and sadness we deeply regret the demise of one of our respected Director, Late Mr. S. H. Khan on January 12, 2016. He was associated with IDFC over two decades and contributed immensely to the growth of the group.
During the period under review, the following Directors resigned from the Board
sR no name of the dIRectoR date of ResIgnatIon
1 Mr. Vikram Limaye July 30, 2015
2 Mr. S S Kohli1 July 30, 2015
3 Dr. Rajiv B. Lall September 30, 2015
4 Mr. Gautam Kaji2 September 30, 2015
5 Mr. Sunil kakar2 October 31, 2015
1 Appointed as an Additional Director w.e.f. April 13, 2015.2 Appointed as an Additional Director w.e.f. July 30, 2015.
The Board placed on record its appreciation for the valuable services rendered by the outgoing Directors during their tenure as Directors of the Company.
The following Directors / KMPs were appointed by the Company:
sR no name of the dIRectoR / Kmp desIgnatIon date of appoIntment
1 Mr. Vinod Rai Nominee Director July 30, 2015
2 Dr. Jaimini Bhagwati Independent Director September 1, 2015
3 Dr. Omkar Goswami Independent Director April 13, 2015
4 Dr. Rajeev Uberoi Chief Executive Officer July 1, 2015
5 Mr. Bipin Gemani Chief Financial Officer October 31, 2015
6 Mr. Ketan Kulkarni Company Secretary October 31, 2015
Mr. Donald Peck will retire at the ensuing AGM and being eligible, offers himself for re-appointment.
declaRatIon of Independence
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 same were placed at the Board Meeting of the Company held on April 29, 2016.
BoaRd meetIngs
During FY16, the Board met five times and gap between two consecutive board meetings was less than one hundred and twenty days. The dates of the meetings were: April 30, 2015, July 30, 2015, October 31, 2015, January 30, 2016 and March 30, 2016. The composition of the Board is in compliance with the Companies Act, 2013. Attendance details of the Board Meeting are given in table below:
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 5
BOARD'S REPORT
attenDanCe DetaIlS oF BoaRD oF DIReCtoRS FoR Fy16
name of the memBeR dIn posItIon no. of meetIngs held
no. of meetIngs attended
Mr. Vinod Rai1 01119922 Chairperson & Nominee Director 4 4
Dr. Jaimini Bhagwati2 07274047 Independent Director 3 3
Mr. Donald Peck 00140734 Nominee Director 5 3
Dr. Omkar Goswami3 00004258 Independent Director 5 3
Ms. Marianne Økland 03581266 Nominee Director 5 4
Mr. S H Khan4 00006170 Independent Director 2 1
Mr. Gautam Kaji5 02333127 Independent Director 1 1
Dr. Rajiv B Lall5 00131782 Non-Executive Director 2 2
Mr. S S Kohli6 00169907 Nominee Director 2 2
Mr. Vikram Limaye6 00488534 Non-Executive Director 2 2
Mr. Sunil Kakar7 03055561 Non-Executive Director 1 1
1 Appointed as an additional Director w.e.f. July 30, 2015. 2 Appointed as an Additional Director w.e.f. September 1, 2015.3 Appointed as an Additional Director w.e.f. April 13, 2015. 4 Ceased to be Director w.e.f. January 12,2016.5 Resigned from the board w.e.f. September 30, 2015. 6 Resigned from the board w.e.f. July 30,2015.7 Resigned from the board w.e.f. October 31, 2015.
commIttees of the BoaRd
As of March 31, 2016, IDFC Financial Holding Company Limited had the following Board level Committees:
(i) the Audit and Risk Committee; (ii) Nomination & Remuneration Committee; (iii) CSR Committee.
aUdIt and RIsK commIttee
During the year, two Audit & Risk Committee meetings were held. The gap between the two meetings was within the limit prescribed under the Companies Act, 2013.
As on March 31, 2016, the Audit & Risk Committee of the Company comprises of the following members:
1. Dr. Jaimini Bhagwati - Independent Director - Chairperson
2. Mr. Vinod Rai – Nominee Director
3. Mr. Donald Peck – Nominee Director
The Committee met two times during FY16: October 31, 2015 and January 30, 2016.
Attendance details of the Audit & Risk Committee Meetings are given in Table below:
attenDanCe DetaIlS oF aUDIt anD RISk CommIttee meetIngS FoR Fy16
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Dr. Jaimini Bhagwati Independent Director Chairperson 2 2
Mr. Vinod Rai Nominee Director Member 2 2
Mr. Donald Peck Nominee Director Member 2 2
Ms. Marianne Økland1 Nominee Director Member 1 0
1 Resigned as a member w.e.f. October 31, 2015
nomInatIon and RemUneRatIon commIttee
The composition and attendance details of the Meetings of Nomination and Remuneration Committee of the Company are given below:
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Donald Peck Independent Director Chairperson 1 1
Mr. Vinod Rai Nominee Director Member 1 1
Ms. Marianne Økland Nominee Director Member 1 1
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coRpoRate socIal ResponsIBIlIty
The Corporate Social Responsibility (“CSR”) Committee comprised of the following;
1. Dr. Jaimini Bhagwati - Chairperson
2. Dr. Omkar Goswami
3. Mr. Donald Peck
Pursuant to Section 135 and Schedule VII of the Act and Rules made thereunder and on recommendation of CSR Committee, the Board approved the revised CSR Policy and the said policy is available on the website of the Company - www.idfc.com.
aUdItoRs
Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai (“DhS”) (Registration No - 117366W/W-100018), will retire as the Statutory Auditors of the Company at the ensuing AGM.
DHS, the retiring auditors, have confirmed that their appointment, if made, would be in conformity with the provisions of Section 139(1), read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and Section 141 of the Companies Act, 2013 and have given their consent to be reappointed.
The Board recommends re-appointment of DHS as the Statutory Auditors of the Company.
aUdItoR’s RepoRt
There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
Related paRty tRansactIon
The Company has in place the policy on Related Party Transactions (“Rpt”) and the same has been uploaded on the website of the Company. Since all RPTs entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.
RemUneRatIon polIcy
The Company has a policy in place for identification of Independence, qualifications and positive attributes of Directors. The Board approved the Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees which is formulated in line with the requirements of the Companies Act, 2013.
InteRnal contRol systems
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit & Risk Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit & Risk Committee of the Company.
RIsK management
The Members of the Audit & Risk Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
There were no significant material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.
secRetaRIal aUdIt
Pursuant to the provisions of Section 204 of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Bhandari & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for FY16. The Secretarial Audit Report is appended as annexure II.
There are no qualifications or observations or other remarks made by Secretarial Auditors in their report.
mateRIal changes/ commItments
As per Section 134(3)(l) of the Companies Act, 2013, there have been no material changes and commitments affecting the financial position of the Company that has occurred between March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
BOARD'S REPORT
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 7
BOARD'S REPORT
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) such accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual financial statements have been prepared on a going concern basis; and
(e) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
eXtRact of annUal RetURn
The extract of the Annual Return in the prescribed Form No. MGT - 9 is appended as annexure III.
acKnowledgements
We are grateful to RBI and other regulatory bodies for their co-operation and support. The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD
vinod RaiChairperson
Mumbai, June 25, 2016
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anneXURe IFORM AOC-I
PART BassocIates and JoInt ventURes(Pursuant to Section 129(3) of the Act related to Associates Companies and Joint Ventures)
NOT APPLICABLE
PART A sUBsIdIaRIes ` In cRoRe
sR. no. name of the sUBsIdIaRy companIes
shaRe capItal
ReseRves and sURplUs
total assets
total lIaBIlItIes Investments tURnoveR
pRofIt BefoRe taX
pRovIsIon foR taX
pRofIt afteR taX
pRoposed dIvIdend (%)
% of shaReholdIng
EQUITY
1 IDFC Alternatives Limited 0.22 309.98 359.54 49.34 262.29 124.41 26.28 11.67 14.61 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
2 IDFC AMC Trustee Company Limited 0.05 0.05 0.14 0.04 - 0.12 0.01 ß 0.01 - 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
3 IDFC Asset Management Company Limited 2.68 123.45 278.33 152.20 233.10 315.61 162.78 52.74 110.04 3050% 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
4 IDFC Capital (Singapore) Pte. Ltd.* 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
5 IDFC Capital (USA) Inc.* 4.62 1.65 6.66 0.39 - 2.49 0.14 0.05 0.19 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
6 IDFC Investment Advisors Limited - - - - - - - - - - -
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
7 IDFC Investment Managers (Mauritius) Limited* 2.51 (0.75) 1.82 0.07 - - (0.23) - (0.23) - 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
8 IDFC Securities Limited 14.14 120.53 170.31 35.64 74.57 73.31 23.37 8.52 14.85 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
9 IDFC Securities Singapore Pte. Ltd* 14.91 (9.81) 5.31 0.20 - 0.73 (2.98) - (2.98) - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
10 IDFC Trustee Company Limited 0.05 3.84 3.91 0.03 3.86 0.83 0.81 0.25 0.56 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
11 IDFC Infra Debt Fund Limited 540.00 41.53 1,421.61 840.43 106.50 74.99 37.10 - 37.10 - 81%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
12 IDFC Bank Limited 3,392.62 10,239.94 73,969.87 60,337.31 20,091.18 3,648.83 715.77 248.92 466.85 - 53%
(Previous Year) 0.05 (2.58) 0.05 2.58 - - (2.59) ß (2.59) - 100%
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 9
PART A sUBsIdIaRIes ` In cRoRe
sR. no. name of the sUBsIdIaRy companIes
shaRe capItal
ReseRves and sURplUs
total assets
total lIaBIlItIes Investments tURnoveR
pRofIt BefoRe taX
pRovIsIon foR taX
pRofIt afteR taX
pRoposed dIvIdend (%)
% of shaReholdIng
EQUITY
1 IDFC Alternatives Limited 0.22 309.98 359.54 49.34 262.29 124.41 26.28 11.67 14.61 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
2 IDFC AMC Trustee Company Limited 0.05 0.05 0.14 0.04 - 0.12 0.01 ß 0.01 - 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
3 IDFC Asset Management Company Limited 2.68 123.45 278.33 152.20 233.10 315.61 162.78 52.74 110.04 3050% 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
4 IDFC Capital (Singapore) Pte. Ltd.* 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
5 IDFC Capital (USA) Inc.* 4.62 1.65 6.66 0.39 - 2.49 0.14 0.05 0.19 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
6 IDFC Investment Advisors Limited - - - - - - - - - - -
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
7 IDFC Investment Managers (Mauritius) Limited* 2.51 (0.75) 1.82 0.07 - - (0.23) - (0.23) - 75%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
8 IDFC Securities Limited 14.14 120.53 170.31 35.64 74.57 73.31 23.37 8.52 14.85 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
9 IDFC Securities Singapore Pte. Ltd* 14.91 (9.81) 5.31 0.20 - 0.73 (2.98) - (2.98) - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
10 IDFC Trustee Company Limited 0.05 3.84 3.91 0.03 3.86 0.83 0.81 0.25 0.56 - 100%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
11 IDFC Infra Debt Fund Limited 540.00 41.53 1,421.61 840.43 106.50 74.99 37.10 - 37.10 - 81%
(Previous Year) NA NA NA NA NA NA NA NA NA NA NA
12 IDFC Bank Limited 3,392.62 10,239.94 73,969.87 60,337.31 20,091.18 3,648.83 715.77 248.92 466.85 - 53%
(Previous Year) 0.05 (2.58) 0.05 2.58 - - (2.59) ß (2.59) - 100%
For and on behalf of the Board of Directors ofIDFC Financial holding Company limited
Vinod RaiDirector
Dr. omkar goswamiDirector
Mumbai, April 29, 2016Bipin gemaniChief Financial Officer
ketan kulkarniCompany Secretary
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anneXURe IISECRETARIAL AUDIT REPORT
FoR the FInanCIal yeaR enDeD maRCh 31, 2016
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
ToThe Members,IDFC FInanCIal holDIng Company lImIteDCIN: U65900TN2014PLC097942
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by IDFC FInanCIal holDIng Company lImIteD (hereinafter called “the Company”) having CIn: U65900tn2014plC097942. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on march 31, 2016 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2016 according to the provisions of:
i. The Companies Act, 2013 (the Act) and the rules made thereunder;
ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made thereunder# ;
iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
iv. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings#;
v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ;
b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and Regulations, 2015;
c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009# ;
d. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2014# ;
e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008# ;
f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009# ; and
h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998# ;
# The Regulations or Guidelines, as the case may be were not applicable for the period under review.
The list of Acts, Laws and Regulations specifically applicable to the Company are given below:
vi. Reserve Bank of India Guidelines for Licensing of New Banks in the Private Sector.
vii. Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015.
We have also examined compliance with the applicable clauses of the following:
i. Secretarial Standards issued by the Institute of Company Secretaries of India.;
ii. The Listing Agreements entered into by the Company with Stock Exchange(s), if applicable#.
iii. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, to the extent applicable.
# The Regulations or Guidelines, as the case may be were not applicable for the period under review.
During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above, to the extent applicable.
We further report that the Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 1
anneXURe IISECRETARIAL AUDIT REPORT
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. As confirmed by Management the meeting of Independent Directors is schedule to be held on April 29, 2016.
During the period under review, decisions were carried through unanimously and no dissenting views were observed, while reviewing the minutes.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period, the Company has undertaken following events/actions –
i. Member’s approval has been obtained at the Extra Ordinary General Meetings held on May 20, 2015, July 07, 2015 and July 09, 2015 pursuant to Section 42, 62 of the Companies Act, 2013 and Rule 13 of the Companies ( Share Capital and Debentures), Rules 2014 to the Board of Directors to create, offer and issue 49,50,000; 500,00,00,000; 160,00,00,000 Equity Shares respectively on preferential basis for cash at par for an aggregate price of ` 4,95,00,000, ` 50,00,00,00,000, ` 160,00,00,000 to IDFC Limited.
ii. Board of Directors of the Company at its meeting held on July 30, 2015 has issued and offered 21,800,00,000 Equity Shares by way of Rights Issue to IDFC Limited for cash at par for an aggregate price of ` 21,800,000,000.
iii. Pursuant to RBI guidelines for Licensing of New Banks in the Private Sector, 2013, and the Hon’ble High Court of Judicature at Madras, vide its Order dated June 25, 2015, sanctioned the Scheme of Arrangement amongst IDFC Limited and IDFC Bank Limited (“IDFC Bank”) and their respective shareholders and creditors under Section 391 to 394 of the Companies Act, 1956 (“Demerger Scheme”), Company has acquired the entire Equity Stake held by IDFC Limited in all the Regulated Financial Subsidiaries of IDFC Group.
For Bhandari & associatesCompany Secretaries
S. n. Bhandari Partner FCS No: 761; C P No. : 366
Mumbai| April 29, 2016.
This report is to be read with our letter of even date which is annexed as Annexure ‘A’ and forms an integral part of this report.
‘annexure a’
ToThe Members,IDFC FInanCIal holDIng Company lImIteDCIn: U65900tn2014plC097942
Our Secretarial Audit Report for the Financial Year ended on March 31, 2016 of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
For Bhandari & associatesCompany Secretaries
S. n. Bhandari Partner FCS No: 761; C P No. : 366
Mumbai | April 29, 2016.
12 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
as on the financial year ended on march 31, 2016
[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. RegIstRatIon and otheR detaIls:
i) CIN U65900TN2014PLC097942
ii) Registration Date 07/11/2014
iii) Name of the Company IDFC FINANCIAL HOLDING COMPANY LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares
Indian Non-Government Company
v) Address of the Registered office and contact details KRM Tower, 8th Floor,
No.1, Harrington Road, Chetpet, Chennai – 600 031.
Tel.: +91 44 4564 4000, Fax: +91 44 4564 4022
vi) Whether listed company Yes / No No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot No. 31 & 32, Gachibowli, Financial District, Nanakramguda, Serilingampally, Hyderabad 500 032. Tel.: +91 40 6716 1500 Fax No.: +91 40 2342 0814
II. pRIncIpal BUsIness actIvItIes of the company
all the business activities contributing 10 % or more of the total turnover of the company shall be stated:-
sR. no.
name and descRIptIon of maIn pRodUcts / seRvIces nIc code of the pRodUct / seRvIce
% to total tURnoveR of the company
1. Non-operating financial holding company (Investment Company) 65993 –
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company
cIn/gln holdIng/ sUBsIdIaRy /assocIate
% of shaRes held
applIcaBle sectIon
1. IDFC Limited L65191TN1997PLC037415 Holding 100% Section 2(46)
2. IDFC Bank Limited U65110TN2014PLC097792 Subsidiary approx. 53% Section 2(87)
3. IDFC Asset Management Company Limited
U65993MH1999PLC123191 Subsidiary approx. 75% Section 2(87)
4. IDFC AMC Trustee Company Limited
U69990MH1999PLC123190 Subsidiary approx. 75% Section 2(87)
5. IDFC Securities Limited U99999MH1993PLC071865 Subsidiary 100% Section 2(87)
6. IDFC Alternatives Limited U67190MH2002PLC137798 Subsidiary 100% Section 2(87)
7. IDFC Trustee Company Limited U65990MH2002PLC137533 Subsidiary 100% Section 2(87)
8. IDFC Infra Debt Fund Limited U67190MH2014PLC253944 Subsidiary 81.48% Section 2(87)
9. IDFC Securities Singapore Pte. Limited
Foreign Company Subsidiary 100% Section 2(87)
10. IDFC Capital (USA) Inc. Foreign Company Subsidiary 100% Section 2(87)
11. IDFC Investment Managers (Mauritius) Limited
Foreign Company Subsidiary 75% Section 2(87)
12. IDFC Capital (Singapore) Pte. Limited
Foreign Company Subsidiary 100% Section 2(87)
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 3
Iv. shaRe holdIng patteRn (eqUIty shaRe capItal BReaKUp as peRcentage of total eqUIty)
(i) Category-wise Share holding
categoRy of shaReholdeRs no. of shaRes held as on maRch 31, 2015 no. of shaRes held as on maRch 31, 2016 % change dURIng
the yeaR
demat physIcal total % of total shaRes
demat physIcal total % of total 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. NIL 50,000 50,000 100% 8,784,999,940 60 8,785,000,000 100% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other NIL NIL NIL NIL NIL NIL NIL NIL NIL
SUB-total (a) (1):- nIl 50,000 50,000 100% 8,784,999,940 60 8,785,000,000 100% nIl
(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):- NIL NIL NIL NIL NIL NIL NIL NIL NIL
total ShaReholDIng oF pRomoteR(a) = (a)(1)+(a)( 2)
nIl 50,000 50,000 100% 8,784,999,940 60 8,785,000,000 100% nIl
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
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
14 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs no. of shaRes held as on maRch 31, 2015 no. of shaRes held as on maRch 31, 2016 % change dURIng
the yeaR
demat physIcal total % of total shaRes
demat physIcal total % of total shaRes
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) nIl 50,000 50,000 100% 8,784,999,940 60 8,785,000,000 100% nIl
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng as on maRch 31, 2015 shaRe holdIng as on maRch 31, 2016 % change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
no. of shaRes % of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
1. IDFC Limited 50,000 100% NIL 87,85,000,000 100% NIL NIL
total 50,000 100% nIl 87,85,000,000 100% nIl nIl
(iii) Change in promoters’ Shareholding (please specify, if there is no change)
sR. no.
shaReholdIng as on maRch 31, 2016 cUmUlatIve shaReholdIng dURIng the peRIod
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 50000 100% 50,000 0.00
2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc):
5,000,000,000 Allotted on 7/7/2015 5,000,050,000 56.91%
1,600,000,000 Allotted on 9/7/2015 6,600,050,000 18.21%
4,950,000 Allotted on 20/5/2015 6,605,000,000 0.056%
2,180,000,000 Allotted on 30/9/2015 8,785,000,000 24.81%
3 At the end of the year 8,785,000,000 100% 8,785,000,000 100%
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 5
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs anD aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NOT APPLICABLE
B. Remuneration to other directors:
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoRs total amoUnt
In `vInod RaI donald
pecKmaRIanne
oKlandomKaR
goswamIs h
KhanJaImInI
BhagwatI
1. Independent Directors NA NA NA
Fee for attending board committee meetings 150,000 25,000 225,000 400,000
Commission 500,000 NIL 500,000 1,000,000
Others, please specify NIL NIL NIL NIL
total (1) na na na 650,000 25,000 725,000 1,400,000
2. Other Non-Executive Directors NIL NIL NIL NA NA NA NA
Fee for attending board committee meetings
Commission
Others, please specify
total (2) nIl nIl nIl na na na na
total (B) = (1 + 2) nIl nIl nIl 650,000 25,000 725,000 1,400,000
Overall 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: NOT APPLICABLE
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
16 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
to the memBeRS oF IDFC FInanCIal holDIng Company lImIteD
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC FInanCIal holDIng Company lImIteD (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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 prescribed under section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 7
INDEPENDENT AUDITOR’S REPORT
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/ “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 29, 2016
18 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
We have audited the internal financial controls over financial reporting of IDFC FInanCIal holDIng Company lImIteD (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the Guidance Note issued by the Institute of Chartered Accountants of India.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 29, 2016
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 1 9
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) The Company does not have any fixed assets and hence reporting under clause (i) of the CARO 2016 is not applicable.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which provision of section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including, Income-tax, Sales Tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees’ State Insurance, Sales tax, Custom Duty and Excise duty.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, cess and other material statutory dues in arrears as on 31st March, 2016 for a period of more than six months from the date they became payable.
(c) There are no dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on 31st March, 2016 on account of disputes.
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us, the Company has made preferential allotment of shares during the year under review.
In respect of the above issue, we further report that:
a) the requirement of Section 42 of the Companies Act, 2013, as applicable, have been complied with; and
b) the amounts raised have been applied by the Company during the year for the purposes for which the funds were raised, other than temporary deployment pending application.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and it has obtained the registration.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 29, 2016
20 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
NOTES
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 87,850,000,000 500,000
(b) Reserves and surplus 4 (4,422,905) (25,275,430)
87,845,577,095 (24,775,430)
Current liabilities
(a) Trade payables 5
Total Outstanding dues of micro enterprises and small enterprises
- -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
2,559,000 51,180
(b) Other current liabilities 6 20,000 25,224,250
TOTAL 87,848,156,095 500,000
assets
non current assets
(a) Non current investments 7 87,398,047,941 500,000
(b) Long term loans and advances 8 156,291 -
Current assets
(a) Cash and bank balances 9 442,892,246 -
(b) Other current assets 10 7,059,617 -
TOTAL 87,848,156,095 500,000
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins and Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Financial holding Company limited
pallavi gorakshakarPartner(Membership No. 105035)
Vinod RaiDirector
Dr. omkar goswamiDirector
Mumbai | April 29, 2016Bipin gemaniChief Financial Officer
ketan kulkarniCompany Secretary
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 2 1
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
NOTES
FOR THE YEAR ENDED MARCH 2016
`
NOVEMBER 7, 2014 TO MARCH 31, 2015
`
I Income
Income from Operations 11 35,487,207 -
TOTAL INCOME (I) 35,487,207 -
II eXpenses
Other expenses 12 2,906,682 25,275,430
TOTAL ExPENSES (II) 2,906,682 25,275,430
III pRofIt / (loss) BefoRe taX (I - II) 32,580,525 (25,275,430)
Iv taX eXpense
Current tax 11,728,000 -
TOTAL TAx ExPENSES (IV) 11,728,000 -
v pRofIt / (loss) foR the yeaR fRom contInUIng opeRatIons (III - Iv) 20,852,525 (25,275,430)
Earnings per equity share (nominal value of share ` 10 each) 16
Basic (`) 0.004 (1,272.49)
Diluted (`) 0.004 (1,272.49)
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins and Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Financial holding Company limited
pallavi gorakshakarPartner(Membership No. 105035)
Vinod RaiDirector
Dr. omkar goswamiDirector
Mumbai | April 29, 2016Bipin gemaniChief Financial Officer
ketan kulkarniCompany Secretary
22 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
NOTES FOR THE YEAR ENDED MARCH 31, 2016
`
NOVEMBER 07, 2014 TO MARCH 31, 2015
`
a. cash flow fRom opeRatIng actIvItIes
Profit / (loss) before tax for the year / period 32,580,525 (25,275,430)
adjustment for changes in working capital:
adjustments for increase/(decrease) in operating liabilities:
Trade payables 2,507,820 51,180
Other Current liabilities (25,204,250) 25,224,250
Adjustments for (increase)/decrease in operating assets:
Other current assets (448,559,671) -
Direct Taxes paid (11,884,291) -
NET CASH USED IN OPERATING ACTIVITIES (A) (450,559,813) -
B. cash flow fRom InvestIng actIvItIes
Purchase of Long Term Investment- Subsidiaries (87,397,547,941) (500,000)
NET CASH USED IN INVESTING ACTIVITIES (B) (87,397,547,941) (500,000)
c. cash flow fRom fInancIng actIvItIes
Proceeds from Issue of Shares 87,849,500,000 500,000
NET CASH FROM FINANCING ACTIVITIES (C) 87,849,500,000 500,000
NET CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C) 1,392,246 -
Cash and cash equivalents as at the beginning of the year.(As per AS 3- Cash Flow Statement)
9 - -
Cash and cash equivalents as at the end of the year.(As per AS 3- Cash Flow Statement)
9 1,392,246 -
1,392,246 -
In terms of our report attached.
For Deloitte haskins and Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Financial holding Company limited
pallavi gorakshakarPartner(Membership No. 105035)
Vinod RaiDirector
Dr. omkar goswamiDirector
Mumbai | April 29, 2016Bipin gemaniChief Financial Officer
ketan kulkarniCompany Secretary
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 2 3
01 BacKgRoUndIDFC Financial Holding Company Limited (‘the Company’) is a public company, incorporated in India on November 07, 2014. The Company is a wholly owned subsidiary of IDFC Limited. The Company has received certificate of registration for NBFC NOFHC from Reserve Bank of India on June 18, 2015. As per the guidelines for licensing of new banks in the private sector issued by Reserve Bank of India (RBI), the company, a non-operative financial holding company limited holds the investment in IDFC Bank as well as all other financial services entities of the group regulated by RBI or other financial sector regulators
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF pRepaRatIon The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles
in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.
B. USe oF eStImateS The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and
assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.
c. InVeStmentS Investments which are readily realisable and intended to be held for not more than one year from the date on which such
investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on ‘Accounting for Investments’ as specified under section 133 of Companies Act, 2013. All other investments are classified as long term investments.
All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.
¡ ‘Long Term Investments’ are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis.
¡ ‘Current investments’ are valued scrip-wise and depreciation/ appreciation is aggregated for each category.
d. ReVenUe ReCognItIon Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be
reliably measured. In addition, the following criteria must also be met before revenue is recognised:
¡ Interest Income is accounted on accrual basis.
¡ Dividend is accounted on accrual basis when the right to receive is established.
¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is determined based on the FIFO cost for current investments and weighted average cost for long term investments.
e. taxeS on InCome Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income
for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as specified under section 133 of Companies Act, 2013 read with Rule 7 of the companies (Accounts) Rules, 2014. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
f. CaSh anD CaSh eqUIValentS Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity
of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
24 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
g. CaSh FloW Statement Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of
non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
h. eaRnIngS peR ShaRe Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items,
if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
I. pRoVISIonS anD ContIngenCIeS A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of
resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.
J. opeRatIng CyCle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation
in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
authorised shares
Equity shares of ` 10 each 10,000,000,000 100,000,000,000 5,000,000,000 50,000,000,000
Issued, subscribed & fully paid-up shares
Equity shares of ` 10 each 8,785,000,000 87,850,000,000 50,000 500,000
( All of above shares are held by IDFC Limited and its nominees)
TOTAL 87,850,000,000 500,000
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
Outstanding at the beginning of the year 50,000 500,000 - -
Issued during the year 8,784,950,000 87,849,500,000 50,000 500,000
Outstanding at the end of the year 8,785,000,000 87,850,000,000 50,000 500,000
(b) terms / rights attached to equity shares
¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled
to one vote per share.
¡ 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
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Limited and its nominees 8,785,000,000 100% 50,000 100%
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 2 5
04 ReseRves & sURplUs
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
(a) Special Reserve u/s. 45-IC of RBI act,1934
Opening balance - -
Add: Transferred from surplus in Statement of Profit and Loss 5,588,000 -
Closing balance 5,588,000 -
(b) Deficit in the Statement of profit and loss
Opening balance (25,275,430) -
Profit / (Loss) for the year 20,852,525 (25,275,430)
Less: Transfer to special reserve u/s 45IC (5,588,000)
Closing balance (10,010,905) (25,275,430)
TOTAL RESERVES & SURPLUS (4,422,905) (25,275,430)
05 tRade payaBles
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Total Outstanding dues of micro enterprises and small enterprises - -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
Provision for expenses 2,559,000 51,180
TOTAL 2,559,000 51,180
(a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006.
(b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
(c) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
(d) No amount of interest has accrued and remained unpaid at the end of the year under the Micro, Small and Medium Enterprises Development Act, 2006.
(e ) The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.
06 otheR cURRent lIaBIlItIes
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Statutory dues (represents withholding tax) 20,000 5,000
Intercompany payables (See Note 15) - 25,219,250
TOTAL 20,000 25,224,250
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
26 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
07 non cURRent Investments
FACE VALUE
(`)
QUANTITY AS ATMARCH 31, 2016
`
QUANTITY AS ATMARCH 31, 2015
`
trade Investments (Valued at cost) (trade)
Investment in subsidiaries
quoted equity Shares
IDFC Bank Limited 10 1,797,512,668 70,300,720,445 - -
Unquoted equity Shares (Fully paid)
IDFC Alternatives Limited 10 219,850 2,000,483,750 - -
IDFC Asset Management Company Limited 10 2,009,283 6,294,873,879 - -
IDFC AMC Trustee Company Limited 10 37,499 496,750 - -
IDFC Bank Limited 10 - - 50,000 500,000
IDFC Infra Debt Fund Limited 10 440,000,000 4,400,000,000 - -
IDFC Securities Limited 10 14,137,200 4,400,973,117 - -
IDFC Trustee Company Limited 10 50,000 500,000 - -
TOTAL 87,398,047,941 500,000
(a) Aggregate amount of quoted investments
Cost 70,300,720,445 -
Market value 86,640,110,598 -
(b) Aggregate amount of unquoted investments - cost
17,097,327,496 500,000
08 long teRm loans and advances
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Advance income tax [net of provision of ` 11,728,000 (Previous Year ` Nil)] 156,291 -
156,291 -
09 cash and BanK Balances
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Cash and cash equivalents
Balance with bank:
In current account 1,392,246 -
Total (As per AS 3- Cash Flow Statement) 1,392,246 -
others
Balance with bank:
In deposit accounts (original maturity of more than 3 months) 441,500,000 -
TOTAL 442,892,246 -
10 otheR cURRent assets
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Interest accrued on deposits 7,059,617 -
TOTAL 7,059,617 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 2 7
11 Income fRom opeRatIons
FOR THE YEAR ENDED MARCH 2016
NOVEMBER 7, 2014 TO MARCH 31, 2015
` `
Interest on deposits 35,487,207 -
TOTAL 35,487,207 -
12 otheR eXpenses
FOR THE YEAR ENDED MARCH 2016
NOVEMBER 7, 2014 TO MARCH 31, 2015
` `
Preliminary expenses written off - 25,148,635
Directors Sitting Fees 200,000 -
Commission to directors 1,000,000 -
Other Professional Fees 1,321,369 -
Demat Charges 95,761 -
NSDL Charges 34,200 -
Notary & Franking Charges 1,500 -
Printing & Stationary 2,820 42,525
Miscellaneous expenses 6,112 -
Auditors’ remuneration* 244,920 84,270
TOTAL 2,906,682 25,275,430
*Breakup of auditor’s remuneration
Audit fee 50,000 50,000
Tax Audit fees 50,000 -
Other services 115,000 25,000
Service tax 29,920 9,270
244,920 84,270
13 pRovIsIons & contIngencIesa. There are no litigations claims made by the Company or pending on the Company
b. Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The 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.
14 The Company is engaged in the business of non banking financial services. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of Companies Act, 2013.
15 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
holding Company :
IDFC Limited
Subsidiary Company:
IDFC Alternatives Limited
IDFC Asset Management Company Limited
IDFC AMC Trustee Company Limited
IDFC Bank Limited
IDFC Infra Debt Fund Limited
IDFC Securities Limited
IDFC Trustee Company Limited
key management personnel
Chief Executive Officer: Mr Rajeev Uberoi
Chief Financial Officer: Mr. Bipin Gemani
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
28 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
the nature and volume of transactions carried out with the above related party in the ordinary course of business are as follows:
NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP
PARTICULARS CURRENT YEAR PREVIOUS YEAR
holding Company
IDFC Limited Intercompany Payable - 25,219,250
Issue of Shares 87,849,500,000
Purchase of shares of following companies:
IDFC Alternatives Limited 2,000,483,750 -
IDFC Asset Management Company Limited 6,294,873,879 -
IDFC AMC Trustee Company Limited 496,750 -
IDFC Bank Limited 70,300,220,445 500,000
IDFC Infra Debt Fund Limited 1,520,000,000 -
IDFC Securities Limited 4,400,973,117 -
IDFC Trustee Company Limited 500,000 -
Fellow Subsidiary:
IDFC Bank Limited Balance in Current Accounts 786,742 -
Balance in Deposit Accounts 441,500,000 -
Interest Income 15,827,434 -
Interest accrued 7,059,617 -
IDFC Alternatives Limited Interest Income 16,660,479 -
Inter corporate deposits taken and repaid 1,557,500,000 -
Purchase of Investment in Infra Debt Fund Limited 1,430,000,000 -
IDFC Finance Limited Purchase of Investments in Infra Debt Fund Limited 150,000,000 -
IDFC Infra Debt Fund Limited Purchase/ Subscription of Investment 1,300,000,000 -
16 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013:
PARTICULARS CURRENT YEAR PREVIOUS PERIOD
Profit / (loss) after tax (`) 20,852,525 (25,275,430)
Weighted average number of equity shares (Nos.) 5,942,370,082 19,863
Basic & diluted earnings per share (`) 0.004 (1,272.49)
Nominal value per share (`) 10 10
17 IDFC Financial Holding Company Limited was incorporated as a Company under the Companies Act, 2013 on November 07, 2014. Reserve Bank of India (RBI) has granted a certificate dated June 18, 2015 to the Company permitting it to commence and carry on the business of Non-Operative Financial Holding Company (NOFHC) (as a non-deposit taking NBFC). Accordingly, figures for the previous period / year is not comparable since NOFHC operations were not carried out during the previous period / year.
The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBR (PD) CC No.044/03.10.119/2015-16 dated July 1, 2015):
(a) Capital to risk assets ratio (CRaR):
PARTICULARS AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
CRAR (%) 100.49% -
CRAR - Tier I Capital (%) 100.49% -
CRAR - Tier II Capital (%) - -
Amount of Subordinated Debt considered as Tier-II Capital - -
Amount raised by issue of Perpetual Debt Instruments - -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F I N A N C I A L H O L D I N G C O M PA N Y L I M I T E D | 2 9
(b) Details of Investments are set out below:
1 Value of Investments
AS AT MARCH 31, 2016
`
AS AT MARCH 31, 2015
`
(i) gross Value of Investments
(a) In India 87,398,047,941 -
(b) Outside India - -
87,398,047,941 -
(ii) provision for depreciation
(a) In India - -
(b) Outside India - -
- -
(iii) net Value of Investments
(a) In India 87,398,047,941 -
(b) Outside India - -
87,398,047,941 -
2 movement of provisions held towards depreciation on investments.
The Company has not made any provisions in the current year and in the previous years.
(c) asset liability management maturity pattern of certain items of assets and liabilities
paRtICUlaRS 1 Day to 30/31
DayS (one month)
oVeR one month to
tWo monthS
oVeR tWo monthS
to thRee monthS
oVeR thRee monthS to SIx monthS
oVeR SIx monthS to one
yeaR
oVeR one yeaR
to thRee yeaRS
oVeR thRee yeaRS
to FIVe yeaRS
oVeR FIVe yeaRS total
` ` ` ` ` ` ` ` `
Deposits - - - - - - - - -
Advances - - - - - - - - -
Investments - - - - - - - 87,398,047,941 87,398,047,941
Foreign Currency assets
- - - - - - - - -
Foreign Currency liabilities
- - - - - - - - -
(d) Investor group wise classification of all investments (Current and long term) in shares and securities (both quoted and Unquoted):
CategoRy aS at maRCh 31, 2016 aS at maRCh 31, 2015
maRket ValUe/ BReakUp ValUe / FaIR ValUe / naV
Book ValUe net oF pRoVISIon
maRket ValUe/ BReakUp ValUe / FaIR ValUe / naV
Book ValUe net oF pRoVISIon
` ` ` `
1. Related Parties 99,584,737,947 87,398,047,941 - -
2. Other than related Parties - - - -
(e) penalties / fines imposed by the RBI
During the year ended March 31, 2016 there was no penalty imposed by the RBI (Previous Year ` Nil).
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
30 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(f) Considering the nature of the business of the entity and transactions entered during the year ended march 31, 2016 and march 31, 2015 following disclosures required as per nBFC circular DnBR (pD) CC.no.053/03.10.119/2015-16 are not applicable to the company and hence are not disclosed:
(i) Disclosures regarding Derivatives
(ii) Disclosures relating to securitisation
(iii) Exposure to Real Estate Sector
(iv) Exposure to Capital Market
(v) Details of financing of parent company product
(vi) Detail of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC.
(vii) Unsecured Advances
(viii) Ratings assigned by credit rating agencies and migration of ratings during the year.
(ix) Provisions and Contingencies.
(x) Draw Down from Reserves
(xi) Concentration of Deposits, Advances, Exposures and NPAs.
(xii) Movement of NPAs.
(xiii) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad).
(xiv) Off-balance sheet SPVs sponsored
(xv) Disclosure of Complaints.
18 pRevIoUs yeaR fIgURes Previous 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 ofIDFC Financial holding Company limited
Vinod RaiDirector
Dr. omkar goswamiDirector
Mumbai | April 29, 2016Bipin gemaniChief Financial Officer
ketan kulkarniCompany Secretary
Idfc foUndatIon
U93000DL2011NPL215231
Mr. Anil Baijal (Chairperson)
Dr. Rajiv B Lall
Dr. Ashok Gulati
Ms. Sonalde B Desai
Mr. Vikram Limaye
Mr. Sunil Kakar
Deloitte Haskins & Sells
Chartered Accountants
IDFC Bank Limited
The Capital Court, 2nd Floor
Olof Palme Marg, Munirka
New Delhi 110067
tel +91 11 4331 1000
Fax + 91 11 2671 3129
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
32 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
Your Directors have pleasure in presenting the Sixth Annual Report together with the audited financial statements for the year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
Total Income 169,751,030 116,638,654
Less: Total Expenses 157,653,999 113,423,587
Surplus 12,097,031 3,215,067
opeRatIonal RevIewIDFC Foundation (“the company”), a not-for-profit company, within the meaning of Section 8 of the Companies Act, 2013 (erstwhile Section 25 of the Companies Act, 1956), was incorporated in India on March 4, 2011.
The Company is a wholly-owned subsidiary of IDFC Limited and managed by the Board of Directors comprising the representatives of IDFC Limited and Independent Directors. The primary focus of the Company is to contribute to the development of infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society) and in developing social infrastructure (education and healthcare). The Company also oversees the working of its joint ventures with the state governments of Karnataka, Uttarakhand and Delhi.
After the enactment of Companies Act, 2013, the focus of the Company has been re-alinated as per Section 135 of the Companies Act, 2013 read with CSR Rules 2014. IDFC Foundation, as implementing agency, would carry out CSR activities as per CSR policy adopted by IDFC and its group Companies in line with the schedule VII of the companies Act, 2013. The Company would primarily focus on CSR activities as well-defined projects or programmes 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, renewable energy, slum re-development and affordable housing.
During the FY 2015-16, some of the major projects that the Company has undertaken in pursuit of its CSR policy are given as under:-
¡ promoting digital literacy in government schools: The Company aims to promote Digital Literacy among school students through establishment of Digital Learning Centres (DLC) in 18 government schools of Hoshangabad District of Madhya Pradesh. The programme is in line with the government’s aim to transform the country into a digitally empowered society and knowledge economy. The program is aimed at improving learning outcomes of students in classes I to x.
¡ setting up of solar street lighting and safe & clean drinking water in meghalaya: The Company has installed solar street lights at the Mawlynnong village in Meghalaya to help improve the quality of life for communities. With the Solar Street Lights and lighting up of public spaces, tourists would also be encouraged to spend the night in the village to experience the local culture, which would significantly improve the livelihood of the villagers. The Company is also making efforts to provide clean drinking water to the village from natural spring by providing infrastructure to prevent contamination of drinking water at source.
¡ learning outcome Improvement programme in alwar, Rajasthan: The primary education improvement programme for “Improving Learning Outcomes in 60 Government Primary Schools in Ramgarh and Kishangarh blocks of Alwar District of Rajasthan” aims at (i) Improvement in teaching-learning processes through the use of effective pedagogic tools (ii) development of leadership skills among students through extra-curricular activities, (iii) Improvement in overall school management through strengthening of School Management Committees (SMCs) (iv) Improvement in the physical environment of the schools.
¡ developing handloom and craft livelihood in Uttarakhand: The Company aims to develop a Centre of Excellence (COE) for traditional handloom and craft which will anchor efforts to revive the dying arts and craft of the mountains of Uttarakhand and to provide artisans living in remote areas critical facilities like skill upgradation, design and product development services, high quality raw materials, and a common platform for marketing.
¡ chennai floods emergency Relief: The Company provided emergency food supplies, household items and non food items (NFIs) to meet the urgent needs of around 10,000 families in Chennai city.
¡ cattle care program in madhya pradesh: The Company initiated ‘Cattle Care Program’ that focuses on cattle breed improvement and care through permanent high-quality affordable veterinary infrastructure and temporary cattle camps to enhance the livelihoods of small and marginal farming families in rural Madhya Pradesh.
¡ masoom: The Company has been supporting Masoom, an NGO, to implement the “Night School Transformation Programme” and working towards improving enrollment and learning outcomes at 10 night schools across Mumbai city.
¡ society for nutrition, education and health action (“sneha”): The Company has been supporting SNEHA for its “Maternal & Newborn Health Beyond Boundaries” programme which has significantly benefited both pregnant women with normal conditions and those with high risk and emergency conditions through establishment of referral networks and service protocols in government healthcare centers.
¡ support for cancer treatment: The Company supported Kamla Nehru Memorial Hospital, Allahabad by providing support for the maintenance cost of essential cancer treatment equipment which will benefit at least 800 patients over the course of the project.
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.
I D F C F O U N D AT I O N | 3 3
BOARD'S REPORT
sUBsIdIaRy companIes/ JoInt ventURes and assocIate companIes
As on March 31, 2016, the Company has following subsidiaries, joint ventures and associate companies:-
subsidiary
(i) India PPP Capacity Building Trust (I-Cap)
Joint venture
(i) Infrastructure Development Corporation (Karnataka) Limited (iDeCK),
(ii) Delhi Integrated Multi Modal Transit System Limited (DIMTS),
(iii) Uttarakhand Infrastructure Development Company Limited (U-DeC)
In addition, iDeCK, a joint venture of the Company, has one JV company namely Rail Infrastructure Development Company (Karnataka) Limited and one associate company namely Narayana Hrudayalaya Surgical Hospital Private Limited (NHSH). iDeCK has transferred its full holding in NHSH on February 1, 2016.
A statement containing salient features of the financial statement and all other requisite details of all associates / joint venture companies in the format AOC-I is appended as annexure I. The statement also provides details of performance, financial position of each subsidiary.
paRtIcUlaRs of employees
The Company had 22 employees as on March 31, 2016. The information required pursuant to section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon a request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and other entitled thereto, excluding information on employees’ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any Member is interested in obtaining copy thereof, such Member may write to the Company Secretary in this regard.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There were no loans or guarantee or investments of the Company under the provisions of Section 186 of the Companies Act, 2013.
foReIgn eXchange eaRnIngs and eXpendItURe
The particulars regarding foreign exchange earnings and expenditure are furnished at Note No. 21 and 20 respectively in the Notes forming part of the Financial Statements.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed are not applicable and hence not given.
dIRectoRs and Key manageRIal peRsonnel
Independent directors
In order to further broad base the Board, Dr. Ashok Gulati was appointed as an Independent Director of the Company w.e.f. September 15, 2015, subject to the approval of the shareholders of the Company. The Shareholders at their meeting held on September 30, 2015 approved the said appointment.
Key managerial personnel
As on March 31, 2016, KMP of the Company were as follows:-
(i) Mr. Animesh Kumar – CEO
(ii) Mr. Gopal Chandra Mondal – Chief Financial Officer
(iii) Ms. Priyanka Agrawal – Company Secretary
RetIRement By RotatIon In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar (DIN: 03055561) would retire by rotation at the ensuing Annual General Meeting (“agm”) and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Mr. Sunil Kakar at the ensuing AGM.
Further, the Company has received a declaration from IDs, that they meet the criteria of independence specified under Section 149(6)&(7) of the Companies Act, read with Rules 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 & Schedule IV of the Act.
meetIngs of the BoaRdThe Board of Directors of the Company meets at regular intervals to discuss and decide on CSR activities and strategy apart from the regular board business. The Board met five times in the FY 2016 viz., on May 18, 2015, June 17, 2015, September 15, 2015, October 27, 2015
34 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
and January 28, 2016. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013. The composition of the Board is in compliance with the Companies Act, 2013. Attendance details of the Board Meeting are given in table below:
name of the memBeR dIn posItIon no. of meetIngs held
no. of meetIngs attended
Mr. Anil Baijal 1608892 Chairperson & Independent Director 5 5
Dr. Ashok Gulati1 7062601 Independent Director 3 3
Dr. Rajiv B Lall 131782 Non- Executive Director 5 5
Mr. Vikram Limaye 488534 Non- Executive Director 5 3
Mr. Sunil Kakar 3055561 Non- Executive Director 5 4
Ms. Sonalde Desai 7124672 Independent Director 5 4
Mr. Cherian Thomas2 707735 Director & CEO 2 2
Mr. Animesh Kumar2 3529945 Non Executive Director 2 2
1 Appointed as an Independent Director wef September 15, 20152 Resigned from the Board with effect from August 5, 2015
commIttees of BoaRd (i) audit Committee
The Audit Committee met three times in the FY 2016 viz., on June 17, 2015, October 27, 2015 and January 28, 2016. The gap between two meetings was within the limit as prescribed under the Companies Act, 2013. The composition of Audit Committee is in compliance with the Companies Act, 2013. Attendance and composition (as on March 31, 2016) details of the Audit Committee Meetings are given below:
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Anil Baijal Independent Director Chairperson 3 3
Mr. Sunil Kakar Non- Executive Director Member 3 3
Ms. Sonalde B Desai Independent Director Member 3 2
(ii) nomination and Remuneration Committee
The Company had constituted Nomination and Remuneration Committee on March 18, 2015 to comply with the provisions of the Section 178 of the Companies Act, 2013 and rules made there under comprising of the following:
1. Dr. Rajiv B Lall - Chairperson
2. Mr. Anil Baijal
3. Ms. Sonalde B. Desai
Ministry of Corporate Affairs (MCA) vide its notification dated June 5, 2015 had given exemption to the companies covered under Section 8 of the Companies Act, 2013 from the requirement of constituting a Nomination & Remuneration Committee and accordingly, the Board of Company at its meeting held on October 27, 2015 had dissolved the Nomination & Remuneration Committee (NRC).
aUdItoRsDeloitte Haskins & Sells, Chartered Accountants having Registration No. 117365W issued by the Institute of Chartered Accountants of India (ICAI), will retire as the Statutory Auditors of the Company at the ensuing AGM.
In accordance with the provisions of Sections 139 and other applicable provisions, if any, of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules 2014, the Audit Committee recommended to the Board to re-appoint Deloitte Haskins & Sells, Chartered Accountants as the Statutory Auditors of the Company for a period of one year, to hold office from the conclusion of this Annual General Meeting up to the conclusion of the next Annual General Meeting of the Company.
Deloitte Haskins & Sells, the retiring auditors, have confirmed that their re-appointment, if made, would be in conformity with the provisions of Section 139(1) read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and Section 141 of the Companies Act, 2013, and have given their consent to be re-appointed.
The approval of the Shareholders by passing of Ordinary Resolution at the ensuing AGM would be required for re-appointment of the Statutory Auditors of the Company. The Shareholders are further requested to authorize the Board of Directors to fix their remuneration.
RIsK managementThe Business Operations Risk Committee (BORC) of the Company endeavors to review the risk at every meeting held during the year and have prepared the Financial and Operational Risk registers. The members of the BORC ensure the measurement and control of risk factors and advice on the same to the Management of the Company.
InteRnal fInancIal contRol RepoRtIng polIcy In order to ensure the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, the company has adopted Internal Financial Control Reporting (IFCR) Policy as per Sec 134(5) of Companies Act, 2013 (“Act”).
I D F C F O U N D AT I O N | 3 5
BOARD'S REPORT
Instances of fRaUd, If any RepoRted By the aUdItoRs There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal ImpactIng the goIng conceRn statUs of the companyThere are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
mateRIal changes/ commItmentsThere have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period March 31, 2016 till the date of this report.
aUdItoRs’ RepoRtThere are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
dIRectoRs’ ResponsIBIlIty statementThe Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 accounts 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 MGT-9 is annexed herewith as annexure II.
InfoRmatIon ReqUIRed UndeR seXUal haRassment of women at woRKplace (pReventIon, pRohIBItIon & RedRessal), act, 2013:The Company has in place a policy on Anti Sexual Harassment. The Company undertakes ongoing trainings to create awareness on this policy.
There were no instances of Sexual Harassment that were reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
paRtIcUlaRs of contRacts oR aRRangements wIth Related paRtIes UndeR sectIon 188 of the companIes act, 2013In all related party transactions that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. IDFC Foundation 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, the Board of Directors of the Company adopted the “Policy on Related Party Transactions” on the same lines as approved by IDFC Limited, the holding Company, except for few exceptions which are not applicable to the Company, it being an unlisted Company.
The Audit Committee reviews, at least on a quarterly basis, the details of related party transactions entered into by 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.
acKnowledgements
The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
anIl BaIJalChairperson
New Delhi, June 23, 2016
36 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[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 Sl. no./CIn NA
2 name of the subsidiary India PPP Capacity Building Trust
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
NA
5 trust's capital 400
6 Reserves & surplus 255
7 total assets -
8 total liabilities -
9 Investments -
10 turnover 1,671,936
11 profit before taxation 1,101,508
12 provision for taxation 390,500
13 profit after taxation 711,008
14 proposed Dividend -
15 % of unit holding 100
PART “B”: assocIates and JoInt ventURes
Statement pursuant to Section 129 (3) of the Companies act, 2013 related to associate Companies and Joint Ventures
name of assocIates/JoInt ventURes delhI IntegRated mUltI modal
tRansIt system lImIted
InfRastRUctURe development coRpoRatIon (KaRnataKa)
lImIted
UttaRaKhand InfRastRUctURe
development company
lImIted (wIth pRopoRtIonate
of IdecK shaRes holdIngs)
RaIl InfRastRUctURe
development company
(KaRnataKa) lImIted (thRoUgh
IdecK)
1. latest audited Balance Sheet Date March 31, 2016 March 31, 2016 March 31, 2016 March 31, 2016
2. Shares of associate/Joint Ventures held by the company on the year end
50% 49.49% 50.44% 24.71%
Number of Shares 73,045 4,948,996 242,130 1,237
Amount of Investment in Associates/Joint Venture 147,289,740 154,832,554 4,644,451 123,725
Extend of Holding % 50% 49.49% 50.44% 24.71%
3. Description of how there is significant influence Joint Venture Joint Venture Joint Venture Joint Venture
4. Reason why the associate/joint venture is not consolidated
NA NA NA NA
5. net worth attributable to Shareholding as per latest audited Balance Sheet
404,122,427 281,833,750 1,868,680 15,328,656
6. profit / (loss) for the year 138,253,848 131,608,740 (3,503,742) 6,196,593
i. Considered in Consolidation 69,126,924 65,133,165 (1,767,287) 1,531,178
ii. Not Considered in Consolidation 69,126,924 66,475,575 (1,736,455) 4,665,415
For and on behalf of the Board of Directors ofIDFC Foundation
anil BaijalChairman
Sunil kakarDirector
Place : New DelhiDate : June 23, 2016
gopal Chandra mondalChief Financial Officer
priyanka agrawalCompany Secretary
anneXURe IFORM AOC-I
I D F C F O U N D AT I O N | 3 7
as on the financial year ended on march 31, 2016[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:- U93000DL2011NPL215231
ii) Registration Date March 4, 2011
iii) Name of the Company IDFC Foundation
iv) Category / Sub-Category of the Company A not for profit company, within the meaning of Section 8 of the Companies Act, 2013.
v) Address of the Registered office and contact details The Capital Court, 2nd FloorOlof Palme Marg, MunirkaNew Delhi - 110067
vi) Whether listed company Yes / No No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any N.A.
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. Donation - 71.80%
2. Bank Interest 64191 21.76%
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR.
no.
name and addRess of the
company
cIn/gln holdIng/ sUBsIdIaRy/
assocIate
% of shaRes
held
applIcaBle sectIon
1. IDFC Limited L65191TN1997PLC037415 Holding 100% Section 2(46)
2. India PPP Capacity Building Trust (I-Cap)
- Subsidiary 100% Section 2(87)
3. Infrastructure Development Corporation (Karnataka) Ltd.
U45203KA2000PLC027382 Joint Venture 49.49% Section 2(6)
4. Delhi Integrated Multi Modal Transit System Ltd.
U60232DL2006PLC148406 Joint Venture 50% Section 2(6)
5. Uttarakhand Infrastructure Development Company Ltd.
U65993UR2002SGC027065 Joint Venture 50.44% Section 2(6)
6. Rail Infrastructure Development Company (Karnataka) Limited
U60100KA2000PLC028171 Joint Venture1 24.71% Section 2(6)
1 Joint venture of Infrastructure Development Corporation (Karnataka) Ltd.
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 yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
shaRes
a. promoters
(1) Indian
g) Individual/ HUF
h) Central Govt
i) State Govt (s)
j) Bodies Corp. NIL 13,000,000 13,000,000 100% NIL 13,000,000 13,000,000 100% NIL
k) Banks/FI
l) Any Other..
Sub-total (a) (1):- nIl 13,000,000 13,000,000 100% nIl 13,000,000 13,000,000 100% nIl
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
38 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR no. of shaRes held at the end of the yeaR
% change dURIng
the yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
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)
nIl 13,000,000 13,000,000 100% nIl 13,000,000 13,000,000 100% nIl
B. Public Shareholding NIL NIL NIL NIL NIL NIL NIL NIL NIL
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):-
2. non-Institutions NIL NIL NIL NIL NIL NIL NIL NIL NIL
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 Rs 1 lakh
c) others (specify)
Sub-total (B)(2):-
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) nIl 13,000,000 13,000,000 100% nIl 13,000,000 13,000,000 100% nIl
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C F O U N D AT I O N | 3 9
(ii) Shareholding of promoters
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR shaRe holdIng at the end of the yeaR % change In shaRe holdIng
dURIng the yeaR
no. of shaRes % of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
no. of shaRes % of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
IDFC Limited 13,000,000 100% NIL 13,000,000 100% NIL NIL
Total 13,000,000 100% NIL 13,000,000 100% NIL NIL
* beneficial interest of Equity share is in the name of IDFC Limited
(iii) Change in promoters’ Shareholding (please specify, if there is no change): NO CHANGE
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL
B. Remuneration to other directors:
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoRs total amoUnt
RaJIv B lall
vIKRam lImaye
sUnIl KaKaR
anIl BaIJal
ashoK gUlatI
sonalde B desaI
1. Independent Directors
Fee for attending board/committee meetings NIL NIL NIL 182,272 68,500 136,472 387,244
Commission NIL NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL NIL
total (1) 182,272 68,500 136,472 387,244
2. non-executive Directors NIL NIL NIL NIL NIL NIL NIL
Fee for attending board/committee meetings
Commission
Others, please specify
total (2) NIL NIL NIL nIl nIl nIl nIl
total (B) = (1 + 2) NIL NIL NIL 182,272 68,500 136,472 387,244
C. Remuneration to key managerial personnel other than mD/manager/WtD. IN `
sR. no.
paRtIcUlaRs of RemUneRatIon ceo cfo cs(w.e.f. octoBeR
01, 2015)
1. gross salary
(a) Salary as per provisions contained in section 17(1) of the Income Tax Act, 1961 NIL 2,808,755 627,586
(b) Value of perquisites u/s 17(2) Income Tax Act, 1961 NIL 32,400 NIL
(c) Profits in lieu of salary under section 17(3) Income Tax Act, 1961 NIL NIL NIL
(d) Others, please specify NIL NIL NIL
2. Stock option NIL NIL NIL
3. Sweat equity NIL NIL NIL
4. Commission NIL NIL NIL
5. others – Contribution to provident Fund NIL 126,624 33,600
total nIl 2,967,779 661,186
Note: Sitting fees paid to Directors is within the overall Ceiling limit as prescribed under the Companies Act, 2013.
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
40 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITORS’ REPORT
to the memBeRs of Idfc foUndatIon
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of IDFC FoUnDatIon (“the Company”), which comprise the
Balance Sheet as at 31 March, 2016, the Statement of Income and Expenditure and the Cash Flow Statement for the year then ended, and
a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with
respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the
Accounting Standards prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for
safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
auditors’ Responsibility
Our responsibility is to express an opinion on these standalone 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 and the Order under Section 143 (11) of the
Act.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the 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 auditors’ judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control
relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and
the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2016, and its surplus and its cash
flows for the year ended on that date.
I D F C F O U N D AT I O N | 4 1
INDEPENDENT AUDITORS’ REPORT
Report on other legal and Regulatory Requirements
1. 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 Income and Expenditure, and the Cash Flow Statement dealt with by this Report are in
agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under Section
133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March, 2016 from being appointed as a director in terms of Section 164
(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the
adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditors’ 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 has disclosed the impact of pending litigations on its financial position in its financial statements – Refer
Note 26 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses – Refer Note 27 (b) to the financial statements;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company – Refer Note 28 to the financial statements;
2. The Companies (Auditors’ Report) Order, 2016 (“the CARO 2016 Order”) issued by the Central Government in terms of Section
143(11) of the Act, is not applicable to the Company in term of clause 1 (2) (iii) of the CARO 2016 Order.
for deloitte haskins & sells
Chartered Accountants
(Firm’s Registration No. 117365W)
Kalpesh J mehta
(Partner)
(Membership No. 48791)
Mumbai, June 23, 2016
42 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET
NOTES
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
eqUIty and lIaBIlItIes
Shareholders’ funds
a. Share capital 3 130,000,000 130,000,000
b. Reserves and surplus 4 46,285,226 34,188,195
Current liabilities
a. Trade payables 5
i. total outstanding dues to micro enterprises and small enterprises - -
ii. total outstanding dues to creditors other than micro enterprises and small enterprises
13,585,174 17,281,551
b. Other current liabilities 6 769,565,376 639,719,124
c. Short-term provisions 7 2,288,225 8,550,000
TOTAL 961,724,001 829,738,870
assets
non-current assets
a. Fixed assets
i. Tangible assets 9(a) 1,585,236 2,824,489
ii. Intangible assets 9(b) 75,152 124,037
b. Non-current investments 8 303,822,782 314,011,944
c. Long-term loans and advances 10 24,827,162 10,376,505
Current assets
a. Current investments 11 271,863,203 8,311,768
b. Trade receivables 12 1,435,548 6,215,218
c. Cash and cash equivalents 13 357,431,170 474,822,165
d. Short-term loans and advances 10 490,060 4,138,789
e. Other current assets 14 193,688 8,913,955
TOTAL 961,724,001 829,738,870
See accompanying notes forming part of the financial statements. 1 to 31
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants
For and on behalf of the Board of Directors ofIDFC FoUnDatIon
kalpesh J mehtaPartner
anil BaijalChairman
Sunil kakarDirector
gopal Chandra mondalChief Financial Officer
priyanka agrawalCompany Secretary
Place : MumbaiDate : June 23, 2016
Place : New DelhiDate : June 23, 2016
I D F C F O U N D AT I O N | 4 3
STATEMENT OF INCOME AND ExPENDITURE
NOTES
(`)
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(I) Income
Revenue from operations 15 124,025,269 102,468,617
Other income 16 45,725,761 14,170,037
TOTAL INCOME 169,751,030 116,638,654
(II) eXpendItURe
Employee benefits expense 17 44,449,133 53,057,356
Finance costs 18 40,055 96,555
Depreciation and amortisation expense 9 1,250,312 1,869,896
Other expenses 19 111,914,499 58,399,780
TOTAL ExPENDITURE 157,653,999 113,423,587
(III) sURplUs foR the yeaR fRom contInUIng opeRatIons [(I)- (II)] 12,097,031 3,215,067
(Iv) eaRnIngs peR shaRe (nomInal valUe of ` 10 peR shaRe)
Basic and diluted (`) 24 0.93 0.25
See accompanying notes forming part of the financial statements. 1 to 31
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants
For and on behalf of the Board of Directors ofIDFC FoUnDatIon
kalpesh J mehtaPartner
anil BaijalChairman
Sunil kakarDirector
gopal Chandra mondalChief Financial Officer
priyanka agrawalCompany Secretary
Place : MumbaiDate : June 23, 2016
Place : New DelhiDate : June 23, 2016
44 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT
Notes
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
a. cash flow fRom opeRatIng actIvItIes
Surplus before tax 12,097,031 3,215,067
Adjustments for :
Depreciation and amortisation expense 1,250,312 1,869,896
Provision for diminution in value of investments 1,896,996 1,021,324
Dividend income from long-term investments - (989,999)
Loss on fixed assets sold / scrapped / written off 9,472 13,553
Bad trade and other receivables, loans and advances written off 387,590 91,915
Interest income from bank on deposits (36,935,764) (12,163,400)
Profit on redemption of non-current investments (2,844,223) (828,788)
Net gain on sale of current investments (5,738,591) -
Changes in working capital:
Adjustments for (increase)/decrease in operating assets
Trade receivables 4,392,080 10,669,361
Short-term loans and advances 3,648,729 2,088,692
Long-term loans and advances (10,000,000) -
Adjustments for increase/(decrease) in operating liabilities
Trade payables (3,696,377) (5,755,667)
Other current liabilities 129,846,252 391,551,165
Cash generated from operations 94,313,507 390,783,119
Net income- tax (paid)/refund (10,712,432) (2,958,115)
NET CASH FLOW FROM OPERATING ACTIVITIES (A) 83,601,075 387,825,004
B. cash flow fRom InvestIng actIvItIes
Purchase of fixed assets (326,142) (1,846,699)
Sale proceeds of fixed assets 354,496 -
Sale proceeds of non current investments 11,136,389 4,762,500
Purchase of current investments (269,365,939) -
Sale proceeds of current investments 11,553,095
Dividend income from long-term investments - 989,999
Interest income on bank deposits 45,656,031 8,724,147
Bank balance not considered as cash and cash equivalents :
Placed - (700,000)
Matured 700,000 -
NET CASH FLOW FROM / (USED) INVESTING ACTIVITIES (B) (200,292,070) 11,929,947
c. cash flow fRom fInancIng actIvItIes
Repayment of short-term borrowings - (9,659,180)
NET CASH FLOW USED IN FINANCING ACTIVITIES (C) - (9,659,180)
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A)+(B)+(C) (116,690,995) 390,095,771
Cash and cash equivalents as at the beginning of the year 13 474,122,165 84,026,394
Cash and cash equivalents as at the end of the year 13 357,431,170 474,122,165
(116,690,995) 390,095,771
See accompanying notes forming part of the financial statements 1 to 31
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants
For and on behalf of the Board of Directors ofIDFC FoUnDatIon
kalpesh J mehtaPartner
anil BaijalChairman
Sunil kakarDirector
gopal Chandra mondalChief Financial Officer
priyanka agrawalCompany Secretary
Place : MumbaiDate : June 23, 2016
Place : New DelhiDate : June 23, 2016
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 4 5
01 company oveRvIew
IDFC Foundation (“the Company”), a not for profit company, within the meaning of Section 8 of the Companies Act, 2013 (earlier Section
25 of the Companies Act, 1956), was incorporated in India on March 4, 2011.
The Company is a wholly-owned subsidiary of IDFC Limited and managed by the nominees of IDFC Limited and Independent directors.
The primary focus of the Company is to contribute to the development of infrastructure through engagement in policy research and
advocacy, programme support (for economic benefits to society) and in developing social infrastructure (education and healthcare). The
Company also oversees the working of its joint ventures with the state governments of Karnataka, Uttarakhand and Delhi.
Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, the Company, as an implementing
agency, would carry out Corporate Social Responsibility (‘CSR’) activities as per CSR policy adopted by IDFC Limited and its
group Companies in line with the Schedule VII of the Companies Act, 2013. The Company would primarily focus on CSR activities
as well-defined projects or programmes that would include promoting and 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, renewable energy, slum re-development and affordable housing.
02 sIgnIfIcant accoUntIng polIcIes
2.1 BaSIS oF pRepaRatIon
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles
in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the
relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial
statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those followed in the previous year unless stated otherwise.
2.2 USe oF eStImateS
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and
assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income
and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are
prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the
estimates are recognised in the periods in which the results are known / materialised.
2.3 InVeStmentS
Non-current investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such
investments. Current investments are carried individually, at the lower of cost and fair value.
2.4 tangIBle FIxeD aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less
accumulated depreciation. Income or expenditure arising from derecognition of fixed assets are measured as difference between
the net disposal proceeds and the cost of the assets less accumulated depreciation upto the date of disposal and are recognised in
the Statement of Income and Expenditure.
2.5 IntangIBle aSSetS
Intangible assets comprising of computer software are stated at cost of acquisition, including any cost attributable for bringing the
asset to its working condition, less accumulated amortisation. Any technology support cost or annual maintenance cost for such
software is charged annually to the Statement of Income and Expenditure.
2.6 DepReCIatIon anD amoRtISatIon
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
Depreciation on tangible fixed assets has been provided on written down value method as per the useful life prescribed in Schedule
II to the Companies Act, 2013 except in respect of the following category of assets, in whose case the life of the assets has been
assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the
operating conditions of the asset, past history of replacement etc.:
Notes formiNg part of the fiNaNcial statemeNts
46 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
- Mobile phones - 2 years on straight line method.
- Intangible assets are being amortised over the estimated useful life over a period of six years on the written down value method.
- Assets costing less than ` 5,000 individually have been fully depreciated in the year of purchase
- Depreciation on additions during the year is provided on a pro-rata basis.
2.7 CaSh anD CaSh eqUIValentS
Cash and cash equivalents comprises cash on hand, cash in bank and deposits with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk of changes in value.
2.8 CaSh FloW Statement
Cash flows are reported using the indirect method, whereby surplus / (deficit) before 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.
2.9 employee BeneFItS
(i) Defined contribution plans
The Company’s contribution to provident fund, superannuation fund and National Pension Scheme are considered as defined
contribution plans and are charged to the Statement of Income and Expenditure as they fall due, based on the amount of
contribution required to be made and when services are rendered by the employees.
(ii) Defined benefit plan
The net present value of the Company’s obligation towards gratuity to employees is funded and actuarially determined as at
the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement
of Income and Expenditure for the year.
(iii) Compensated absences
Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to
the extent encashable is paid to the employees and charged to the Statement of Income and Expenditure for the year.
2.10 ReVenUe ReCognItIon
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be
reliably measured. In addition, the following criteria must also be met before revenue is recognised:
(a) Voluntary Contribution:
(i) Contributions received other than for corpus donation are recognised as income in the year of receipt.
(ii) Contributions received as corpus donations are credited to ‘Fund held in corpus donation’ in the Balance sheet. Such
contributions are transferred to Statement of Income and Expenditure as per the direction of the management for
carrying out the activities of the Company.
(b) Income from advisory / consultancy and policy advocacy services are recognised on accrual basis based on percentage of
completion method on rendering of services.
(c) Interest income on savings bank accounts and fixed deposits are accounted on accrual basis.
(d) Profit on redemption of mutual funds is accounted on realisation basis.
(e) Dividend is accounted when the right to receive is established.
2.11 InCome tax
The Company has been granted exemption from Income Tax under section 12A read with section 12AA of the Income Tax Act, 1961.
2.12 opeRatIng leaSeS
Leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases.
Amount due under the operating leases are charged to the Statement of Income and Expenditure, on a straight-line method, over
the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the 2013 Act read with Rule
7 of the Companies (Accounts) Rules, 2014. Initial direct costs incurred specifically for operating leases are recognised as expense in
the year in which they are incurred.
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 4 7
2.13 FoReIgn CURRenCy tRanSaCtIonS anD tRanSlatIonS
Transactions in foreign currencies of the Company are accounted at the exchange rates prevailing on the date of the transaction
or at rates that closely approximate the rate at the date of the transaction. Foreign currency monetary items outstanding at
the Balance Sheet date are reported using the closing rate. Gain or loss resulting from the settlement of such transactions and
translations of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and
Expenditure.
2.14 eaRnIngS peR ShaRe
Basic earnings per share is computed by dividing the surplus / (deficit) after tax by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is computed by dividing the surplus / (deficit) after tax as adjusted for
expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered
for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares.
2.15 ImpaIRment oF aSSetS
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment, if any indication of
impairment exists.
If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount.
The impairment loss is recognised as an expense in the Statement of Income and Expenditure, unless the asset is carried at revalued
amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation
reserve is available for that asset.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods
no longer exists or may have decreased, such reversal of impairment loss is recognised in the Income and Expenditure, to the extent
the amount was previously charged to the Statement of Income and Expenditure. In case of revalued assets such reversal is not
recognised.
2.16 pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow
of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding
retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle
the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are disclosed in the Notes. Contingent assets are not recognised in the financial statements.
2.17 SeRVICe tax InpUt CReDIt
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when
there is reasonable certainty in availing / utilising the credits.
2.18 opeRatIng CyCle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation
in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its
assets and liabilities as current and non-current.
Notes formiNg part of the fiNaNcial statemeNts
48 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
aUthoRIsed
Equity shares of ` 10 each with voting rights 20,000,000 200,000,000 20,000,000 200,000,000
IssUed, sUBscRIBed and fUlly paId-Up
Equity shares of ` 10 each with voting rights 13,000,000 130,000,000 13,000,000 130,000,000
(All the above shares are held by IDFC Limited, the Holding Company and its nominees)
TOTAL 13,000,000 130,000,000 13,000,000 130,000,000
(a) Reconciliation of the number of shares and amount outstanding as at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
Outstanding as at the beginning of the year 13,000,000 130,000,000 13,000,000 130,000,000
Issued during the year - - - -
outstanding as at the end of the year 13,000,000 130,000,000 13,000,000 130,000,000
(b) terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share and ranks pari passu.
As per clause x of Memorandum of Association (MoA) of the Company, in the event of liquidation of the Company, the holder of equity shares will not be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The amount remaining, if any, shall be given or transferred to such other Company having similar objects, to be determined by the member of the Company at or before the time of dissolution or in default thereof by the High Court of Judicature that has or may acquire jurisdiction in the matter.
(c) Details of shareholders holding more than 5% of the shares in the Company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%
TOTAL 13,000,000 100% 13,000,000 100%
(d) Details of shares held by the holding company:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%
TOTAL 13,000,000 100% 13,000,000 100%
04 ReseRves and sURplUs
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
sURplUs In the statement of Income and eXpendItURe
Opening balance 34,188,195 30,973,128
Surplus for the year 12,097,031 3,215,067
TOTAL 46,285,226 34,188,195
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 4 9
05 tRade payaBles
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
tRade payaBles
- total outstanding dues of micro enterprises and small enterprises [see note 30] - -
- total outstanding dues of creditors other than micro enterprises and small enterprises 13,585,174 17,281,551
TOTAL 13,585,174 17,281,551
06 otheR cURRent lIaBIlItIes
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Amount payable to a related party [see note 25 (b)] 195,000,000 210,000,000
Fund held in corpus donation 572,786,445 428,028,521
Statutory dues 1,778,931 1,324,548
Meghalaya Basin Development Authority (MBDA) - 366,055
TOTAL 769,565,376 639,719,124
07 shoRt-teRm pRovIsIons
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Provision for income tax (net of advances of ` 6,261,775 (Previous year ` Nil)) 2,288,225 8,550,000
TOTAL 2,288,225 8,550,000
08 non-cURRent Investments
FACE VALUE AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) qUantIty (`) qUantIty (`)
Investments (at cost) (UnqUoted)
a. Investment in equity instruments fully paid up
- jointly controlled entities
Delhi Integrated Multi-Modal Transit System Limited 1,000 73,045 147,289,740 73,045 147,289,740
Infrastructure Development Corporation (Karnataka) Limited
10 4,948,996 154,832,554 4,948,996 154,832,554
Uttarakhand Infrastructure Development Company Limited
10 239,517 4,618,320 239,517 4,618,320
B. other non-current investments - Investment in trust units
India PPP Capacity Building Trust - partially paid[` 200 paid up (Previous year ` 200 paid up)]
1,000 2 488 34,000 8,292,654
gross total 306,741,102 315,033,268
Less: Provision for diminution in value of investment 2,918,320 1,021,324
NET TOTAL 303,822,782 314,011,944
Notes formiNg part of the fiNaNcial statemeNts
50 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
09 fIXed assets
(a) tangible assets (`)
GROSS BLOCK DEPRECIATION NET BLOCK
BA
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AS
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1,
20
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Computers 1,706,582 263,995 61,367 1,909,210 1,077,922 469,766 51,660 1,496,028 413,182 628,660
(Previous year) (939,314) (767,268) - (1,706,582) (374,618) (703,304) - (1,077,922) (628,660) (564,696)
Vehicles 2,928,396 - 401,029 2,527,367 1,143,165 484,672 88,528 1,539,309 988,058 1,785,231
(Previous year) (2,527,367) (401,029) - (2,928,396) (269,682) (873,483) - (1,143,165) (1,785,231) (2,257,685)
Furniture and
fixtures
106,776 - - 106,776 37,411 18,005 - 55,416 51,360 69,365
(Previous year) (106,776) - - (106,776) (5,770) (31,641) - (37,411) (69,365) (101,006)
Office equipment 551,313 62,147 142,860 470,600 210,080 228,984 101,100 337,964 132,636 341,233
(Previous year) (80,274) (516,639) (45,600) (551,313) (18,385) (223,742) (32,047) (210,080) (341,233) (61,889)
TOTAL 5,293,067 326,142 605,256 5,013,953 2,468,578 1,201,427 241,288 3,428,717 1,585,236 2,824,489
(Previous Year) (3,653,731) (1,684,936) (45,600) (5,293,067) (668,455) (1,832,170) (32,047) (2,468,578) (2,824,489) (2,985,276)
(b) Intangible assets (`)
GROSS BLOCK DEPRECIATION NET BLOCK
BA
LA
NC
E
AS
AT
AP
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1,
20
15
AD
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ION
S
DIS
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BA
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31,
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BA
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BA
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BA
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BA
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Computer
software
161,763 - - 161,763 37,726 48,885 - 86,611 75,152 124,037
(Previous year) - (161,763) - (161,763) - (37,726) - (37,726) (124,037) -
TOTAL 161,763 - - 161,763 37,726 48,885 - 86,611 75,152 124,037
(Previous Year) - (161,763) - (161,763) - (37,726) - (37,726) (124,037) -
GRAND TOTAL 5,454,830 326,142 605,256 5,175,716 2,506,304 1,250,312 241,288 3,515,328 1,660,388 2,948,526
(Previous Year) (3,653,731) (1,846,699) (45,600) (5,454,830) (668,455) (1,869,896) (32,047) (2,506,304) (2,948,526) (2,985,276)
10 loans and advances (UnsecURed, consIdeRed good Unless stated otheRwIse)(`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non CURRent CURRent non CURRent CURRent
Security deposits 10,000,000 - - -
Advance payment of income tax (net of provision ` Nil) 14,827,162 - 10,376,505 -
Balances with Government authorities- CENVAT credit receivable
- 8,882 - 227,985
Loans and advances to employees - - - 4,500
Receivable from gratuity fund trust - 73,379 - 3,040,525
[Net of payable from fund of ` 367,362(Previous year ` Nil)]
Other loans and advances:
(a) Ministry of Urban Development (MoUD) - - - 387,127
(b) Others - 407,799 - 478,652
TOTAL 24,827,162 490,060 10,376,505 4,138,789
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 5 1
11 cURRent Investments
FACE VALUE AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) qUantIty (`) qUantIty (`)
trade investments (Unquoted)
(at lower of cost and fair value, unless otherwise stated)
Investment in trust securities (fully paid)
India Infrastructure Initiative Trust 1,000 1,712 2,497,264 5,700 8,311,768
Investment in mutual fund
IDFC Corporate Bond Fund Direct Plan - Growth 10 26,936,594 269,365,939 - -
aggregate amount of unquoted investments 271,863,203 8,311,768
TOTAL 271,863,203 8,311,768
(a) Aggregate amount of unquoted investments 271,863,203 8,311,768
(b) Market value of unquoted investments 274,349,209 -
12 tRade ReceIvaBles (unsecured) (considered good, unless stated otherwise)
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Outstanding for a period less than six months from the date they are due for payment 141,325 4,935,719
Outstanding for a period more than six months from the date they are due for payment 1,294,223 1,279,499
TOTAL 1,435,548 6,215,218
13 cash and cash eqUIvalents
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Cash and cash equivalents
(as per aS 3 Cash Flow Statements)
Cash on hand 48,856 87,838
Balances with banks:
- In savings accounts 6,382,314 967,062
- In demand deposit accounts 351,000,000 473,067,265
TOTAL - CASH AND CASH EQUIVALENTS (AS PER AS 3 CASH FLOW STATEMENTS) (A) 357,431,170 474,122,165
others balances with banks:
- Balances held as margin money against guarantees [see note (a)] - 700,000
TOTAL - OTHER BANK BALANCES (B) - 700,000
TOTAL CASH AND CASH EQUIVALENTS (A)+(B) 357,431,170 474,822,165
(a) Balance with banks in deposit accounts include deposits under lien amounting to ` Nil (Previous year ` 700,00).
14 otheR cURRent assets
(`)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Interest accrued on fixed deposits 193,688 8,913,955
TOTAL 193,688 8,913,955
Notes formiNg part of the fiNaNcial statemeNts
52 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
15 RevenUe fRom opeRatIons
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Voluntary contributions
- Corpus donation [see note (a)] 121,500,000 90,000,000
- Others 365,503 25,868
Advisory/ consultancy 693,450 1,240,620
Policy advocacy 1,466,316 11,202,129
TOTAL 124,025,269 102,468,617
(a) Corpus donation ` 121,500,000 (Previous year ` 90,000,000) transferred from fund held in corpus fund as per the direction of the management for carrying out the activities of the Company.
16 otheR Income
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Interest income from bank on deposits 36,935,764 12,163,400
Dividend income from long-term investments [see note 25 (b)] - 989,999
Net gain on sale of current investments 5,738,591 -
Profit on redemption of non-current investments 2,844,223 828,788
Net gain on foreign currency transactions and translation 6,934 25,850
Sitting fees 190,000 162,000
Miscellaneous income 10,249 -
TOTAL 45,725,761 14,170,037
17 employee BenefIts eXpense
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Salaries 41,119,103 47,657,317
Contribution to provident and other funds 2,478,091 4,310,275
Staff welfare expenses 851,939 1,089,764
TOTAL 44,449,133 53,057,356
18 fInance costs
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Others - Interest on delayed / deferred payment of statutory dues 40,055 96,555
TOTAL 40,055 96,555
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 5 3
19 otheR eXpenses
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Grants 69,153,722 23,059,174
Sub consultancy charges 1,380,230 6,335,552
Legal and professional charges 15,736,766 9,673,668
Rent [see note 29] 6,053,763 1,680,561
Repairs and maintenance - Others 623,860 486,363
Communication costs 558,452 712,361
Travelling and conveyance 12,853,792 4,989,403
Printing and stationery 1,177,024 2,338,417
Donations - 7,000,000
Payments to auditors [see note (a)] 602,874 200,000
Bad trade and other receivables, loans and advances written off 387,590 91,915
Loss on fixed assets sold / scrapped / written off 9,472 13,553
Provision for diminution in value of investment 1,896,996 1,021,324
Books and periodicals 225,075 69,296
Training and conference 171,661 269,528
Sitting fee to directors 387,244 60,000
Miscellaneous expenses 695,978 398,665
TOTAL 111,914,499 58,399,780
(a) Payments to the auditors comprise
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
To statutory auditors
for audit 373,750 114,000
for tax audit 115,000 57,000
for other services 86,250 57,000
Reimbursement of expenses 27,874 -
602,874 228,000
Less: Service tax set-off receivable - 28,000
TOTAL 602,874 200,000
20 eXpendItURe In foReIgn cURRencIes
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Travelling and conveyance 1,884,226 1,082,612
Books and periodicals 18,650 -
TOTAL 1,902,876 1,082,612
21 eaRnIngs In foReIgn cURRencIes
(`)
For the year endedMarch 31, 2016
For the year endedMarch 31, 2015
Advisory / consultancy 693,450 1,240,620
Reimbursement of expenses - 101,554
TOTAL 693,450 1,342,174
Notes formiNg part of the fiNaNcial statemeNts
54 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
22 dIsclosURe of employees BenefItsThe Company makes Provident Fund, Superannuation Fund and National Pension Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
(a) The Company has recognised the following amounts in the Statement of Income and Expenditure towards contribution to defined contribution plan which are included under contribution to provident and other funds:
(`)
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
Provident fund 2,012,766 2,101,615
National Pension Scheme 33,333 100,000
Superannuation fund 64,630 114,630
TOTAL 2,110,729 2,316,245
(b) The details of the Company’s post – retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors:
(`)
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
change In the defIned BenefIt oBlIgatIons:
Liability at the beginning of the year 6,742,988 4,605,205
Current service cost 1,492,254 1,257,845
Interest cost 540,106 435,229
Benefits paid (913,113) (189,284)
Actuarial loss 212,867 633,993
Liabilities assumed on acquisition/(Settled on divestiture) (1,277,370) -
LIABILITY AT THE END OF THE YEAR 6,797,732 6,742,988
faIR valUe of plan assets:
Opening fair value of planned assets 6,742,988 1,310,960
Actuarial gain 74,488 270,334
Return on planned assets 526,007 62,703
Contributions - 5,288,275
Benefits paid (913,113) (189,284)
FAIR VALUE OF PLAN ASSETS AT THE END OF THE YEAR 6,430,370 6,742,988
TOTAL ACTUARIAL LOSS TO BE RECOGNISED 212,867 633,993
amoUnt RecognIsed In the Balance sheet
Liability at the end of the year 6,797,732 6,742,988
Fair value of plan assets at the end of the year 6,430,370 6,742,988
AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER “SHORT-TERM LOANS AND ADVANCES” - RECEIVABLES FROM GRATUITY FUND TRUST [NET OF RECEIVABLES OF ` 440,741 (PREVIOUS YEAR ` 3,040,523)]
367,362 -
eXpense RecognIsed In the statement of Income and eXpendItURe
Current service cost 1,492,254 1,257,845
Interest cost 540,106 435,229
Expected return on plan assets (526,007) (62,703)
Net actuarial loss recognised 138,379 363,659
Losses assumed on acquisition / (Gains) on divestiture (1,277,370) -
ExPENSE RECOGNISED IN THE STATEMENT OF INCOME AND ExPENDITURE UNDER “EMPLOYEE BENEFITS ExPENSE”
367,362 1,994,030
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 5 5
(`)
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
ReconcIlIatIon of the lIaBIlIty RecognIsed In the Balance sheet:
Opening net liability 6,742,988 4,605,205
Expense recognised in Income and Expenditure 367,362 1,994,030
Opening fair value of planned assets (6,742,988) (1,310,960)
Contribution by the Company - (5,288,275)
AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER “SHORT-TERM LOANS AND ADVANCES” - RECEIVABLES FROM GRATUITY FUND TRUST [NET OF RECEIVABLES OF ` 440,741 (PREVIOUS YEAR ` 3,040,523)]
367,362 -
ExPECTED EMPLOYER’S CONTRIBUTION FOR THE NExT YEAR 1,000,000 1,000,000
experience adjustments (`)
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2013
Defined benefit obligation 6,797,732 6,742,988 4,605,205 1,727,710
Plan assets 6,430,370 6,742,988 1,310,960 -
Surplus / (deficit) (367,362) - (3,294,245) (1,727,710)
Experience adjustments on plan liabilities 138,616 423,410 381,471 (10,313)
Experience adjustments on plan assets 74,488 270,334 - -
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016 MARCH 31, 2015
% %
Investment patteRn
Insurer managed funds
Government securities 39.18 34.27
Deposit and money market securities 16.93 14.32
Debentures/bonds 43.89 51.41
Mortality Indian Assured Lives Mortality (2006-08)
pRIncIpal assUmptIons
Discount rate (per annum) 7.50 7.90
Expected rate of return on assets (per annum) 9.00 9.00
Salary escalation rate (per annum) 8.00 8.00
The estimate of future salary increase considered in the actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.
23 segment InfoRmatIonThe primary focus of the Company is to contribute to the development of infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society), social infrastructure (education and healthcare) and capacity building for government departments and agencies. All other activities revolve around the main business. The Company does not have any geographical segments.
24 eaRnIngs peR shaRe
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
(a) Net surplus after tax (`) 12,097,031 3,215,067
(b) Weighted average number of equity shares (Nos.) 13,000,000 13,000,000
(c) Basic and diluted earnings per share (a)/(b) (`) 0.93 0.25
(d) Nominal value per share (`) 10 10
Notes formiNg part of the fiNaNcial statemeNts
56 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
25 Related paRty dIsclosURe(a) Relationship:
holding Company
IDFC Limited
Jointly controlled entities
Infrastructure Development Corporation (Karnataka) Limited
Delhi Integrated Multi-Modal Transit System Limited
Uttarakhand Infrastructure Development Company Limited
holding’s subsidiary
IDFC Alternatives Limited
IDFC Securities Limited
IDFC Investment Advisors Limited
IDFC Asset Management Company Limited
IDFC Bank Limited
IDFC Infra Debt Fund Limited
entities over which control is exercised
India PPP Capacity Building Trust
(b) the nature and volume of transactions carried out with the above related parties in the ordinary course of business are as follows:
(`)
NAME OF THE RELATED PARTY NATURE OF TRANSACTIONS FOR THE YEAR ENDED
MARCH 31, 2016
FOR THE YEAR ENDED
MARCH 31, 2015
IDFC Limited Bad trade and other receivables, loans and advances written off
- 41,228
Sale of fixed assets 36,416 -
Reimbursement of expenses to the Company * - 3,956,714
Loans and advances - repaid 15,000,000 5,000,000
Reimbursement of expenses by the Company * 998,857 2,360,981
Corpus donation received 234,000,000 465,000,000
Trade receivables 1,279,499 1,279,499
Advance payable -balance outstanding 195,000,000 210,000,000
Share capital 130,000,000 130,000,000
Infrastructure Development Corporation (Karnataka) Limited
Dividend income - 989,999
Sitting fees 20,000 22,000
Sale of investments - 42,500
IDFC Bank Limited Sale of fixed assets 312,501 -
Interest income from bank deposits 214,025 -
Rent 4,146,732 -
Reimbursement of expenses to the Company * 24,909 -
Reimbursement of other expenses by the Company * 365,274 -
Amount deposited in the bank account 376,206,595 -
Amount Withdrawal from the bank account 371,350,810 -
Demand deposit placed 351,000,000 -
Balances with banks - saving bank accounts 4,855,785 -
Balance in demand deposit accounts 351,000,000 -
Interest accrued on fixed deposits with banks 193,688 -
Delhi Integrated Multi-Modal Transit System Limited
Sitting fees 170,000 140,000
Uttarakhand Infrastructure Development Company Limited
Reimbursement of expenses to the Company * - 483,968
Tangible assets transfer - 62,000
India PPP Capacity Building Trust Redemption of investment 11,136,389 4,720,000
IDFC Alternatives Limited Corpus donation received 6,800,000 6,228,521
IDFC Securities Limited Corpus donation received 5,673,000 2,000,000
IDFC Investment Advisors Limited Corpus donation received - 1,800,000
IDFC Infra Debt Fund Limited Corpus donation received 376,924 -
IDFC Asset Management Company Limited Rent - 1,123,299
Corpus donation received 19,408,000 13,000,000
note: * Inclusive of service tax
Notes formiNg part of the fiNaNcial statemeNts
I D F C F O U N D AT I O N | 5 7
26 contIngent lIaBIlItIes
(`)
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
Claims against the Company not acknowledged as debts:
- Income tax demands under appeal (net of amounts provided) [See note (a)] 18,661,453 3,973,550
(a) No provision is considered necessary since the Company expects favourable decisions.
27 (a) The estimated amount of contracts remaining to be executed on capital amount and not provided for (net of advances) amount to ` Nil (Previous year ` Nil).
(b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(c) The Company has other commitments, for purchases/sales orders which are issued after considering requirements per operating cycle for purchase/sale of services and employee benefits, in normal course of business.
28 There are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.
29 leasesThe Company has acquired premises under cancellable operating lease. The total lease rentals recognised as expenses during the year under the above lease agreement aggregates to ` 6,053,763 (Previous year ` 1,680,561).
30 Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)
(`)
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
a. the principal amount and the interest due thereon (to be shown separately) remaining unpaid to any supplier at the end of each accounting year;
Principal - -
Interest due thereon - -
b. Payments made to suppliers beyond the appointed day during the year
Principal - -
Interest due thereon - -
c. Amount of interest due and payable for delay in payment (which have been paid but beyond the appointed day during the year) but without adding the interest under MSMED
- -
d. Amount of interest accrued and remaining unpaid as on March 31, 2016 - -
e. Amount of interest remaining due and payable to suppliers disallowable as deductible expenditure under Income Tax Act, 1961
- -
31 Previous 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 ofIDFC FoUnDatIon
anil BaijalChairman
Sunil kakarDirector
gopal Chandra mondalChief Financial Officer
priyanka agrawalCompany Secretary
Place : New DelhiDate : June 23, 2016
U67190MH2014PLC253944
Mr. S S Kohli (Chairperson)
Mr. A K T Chari
Ms. Ritu Anand
Mr. Vikram Limaye
Mr. Pavan Kaushal
Deloitte Haskins & Sells LLP
Chartered Accountants
IDFC Bank Limited
IDBI Trusteeship Services Limited
Asian Building, Ground Floor,
17, R. Kamani Marg, Ballard Estate,
Mumbai 400 001.
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.idfcidf.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
DEBENTURE
TRUSTEE
REGISTERED
OFFICE
Idfc InfRa deBt fUnd lImIted
I D F C I N F R A D E B T F U N D L I M I T E D | 5 9
BOARD'S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Third Annual Report together with the audited financial statements for the year ended March 31, 2016
fInancIal hIghlIghts
paRtIcUlaRs (amoUnt In `)
foR the yeaR ended maRch 31,2016
foR the yeaR ended maRch 31,2015
Total Income 749,855,908 88,822,630
Less: Total Expenses 378,834,391 31,415,167
Profit before Tax 371,021,517 57,407,463
Less: Provision for Tax - 12,215,300
PROFIT AFTER TAx 371,021,517 45,192,163
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 4 of the Notes forming part of the financial statements.
dIvIdend
The Directors do not recommend any dividend for the financial year ended March 31, 2016 as the Company has decided to reinvest its earnings.
peRfoRmance of the company
IDFC Infra Debt Fund Limited (‘IDFC IDF’) is regulated by the Reserve Bank of India (‘RBI’) and registered as Non-Banking Finance Company (‘nBFC’).
As per the initial RBI guidelines, Infrastructure Debt Funds – Non Banking Finance Companies (‘IDF-nBFCs’) were allowed to invest only in Public Private Partnerships (PPP) infrastructure projects which have completed one year of commercial operations, subject to the IDF - NBFC being a party to a tripartite agreement with the Concessionaire and the Project Authority for ensuring a compulsory buyout with termination payment. In May 2015, the RBI came out with revised guidelines that widened the scope of financing by IDF- NBFCs to include investments in PPP infrastructure projects without a Project Authority and non PPP projects, with minimum one year of satisfactory commercial operation. Thus, in addition to taking exposures in PPP projects with tripartite agreements, the revised regulations allow exposures to operating infrastructure projects without tripartite agreements. While the maximum exposure that an IDF-NBFC can take in PPP projects with tripartite agreements is capped at 50% of its total Capital Funds*, the same is capped at 25% for single party exposure and 40% for group exposure for PPP projects without a Project Authority and non-PPP projects, thereby reducing concentration risk to an extent. Also, investments in projects apart from PPP road projects help in diversifying the portfolio.
IDFC IDF completed its first year of operations in FY16. In the financial year ended March 31, 2016, IDFC IDF made aggregate disbursements of ` 1,267 crore to various operating infrastructure projects. The loan book as at the end of FY16 stands at ` 1202 crore after adjusting for repayments / prepayments of facilities during the year. The portfolio is well diversified with exposures across PPP road projects with tripartite agreements as well as non-PPP projects in renewable power, healthcare, education, captive power and IT SEZs.
The capitalisation of the company is comfortable with a Capital Adequacy Ratio of 43.05% as on March 31, 2016 and Tier I ratio of 42.67%. The Company received additional equity capital of around ` 230 crore in FY16, including ` 100 crore from two large institutions namely Housing Development Finance Corporation Limited (‘hDFC’) and SBI Life Insurance Company Limited (‘SBI life’) This resulted in part dilution of stake of IDFC Financial Holding Company Limited (‘IDFC FhCl’) in the Company to 81.48%.
In FY16, the Company raised a total of ` 808 crore of funds from the bond market comprising issuance of senior secured non - convertible debentures (‘nCDs’) in multiple tranches. All the issuances were rated AAA by domestic credit rating agencies namely ICRA and CARE. These issuances were subscribed to by a wide variety of investors, including insurance companies, provident funds, mutual funds among others.
* Additional exposure up to 10% could be taken at the discretion of the Board of the IDF-NBFC, further additional 15% with approval of RBI.
fUtURe oUtlooK
With the expanded scope, IDF-NBFCs can refinance all operational infrastructure projects which have completed 1 year of satisfactory commercial operations. IDFC IDF plans to progressively increase its leverage to grow its loan book and maintain a diversified portfolio across both PPP and non-PPP infrastructure projects.
sUBsIdIaRIes/JoInt ventURe / assocIate companIes
The Company is a subsidiary of IDFC Financial Holding Company Limited. It does not have any step down subsidiary/Joint venture / Associate Company.
60 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
shaRe capItal Update
During the year, equity shares of the Company held by IDFC Limited (49%), IDFC Alternatives Limited(46%) and IDFC Finance Limited (5%) were transferred to IDFC Financial Holding Company Limited, thereby making IDFC Financial Holding Company Limited 100% holding company of IDFC Infra Debt Fund Limited. The Company made a Rights issue of 13,00,00,000 equity shares of ` 10 (Rupees ten only) each to IDFC Financial Holding Company Limited. The company made a Preferential allotment aggregating to 10,00,00,000(Ten crore only) equity shares of ` 10/ each at par divided into 6,00,00,000 (Six crore only) equity shares to Housing Development Finance Corporation Limited and 4,00,00,000 (Four crore only) equity shares to SBI Life Insurance Company Limited. After the aforesaid issues and allotment, the paid up share capital of the company as on March 31, 2016 was ` 5,400,000,000 (Five hundred and forty crore only) comprising of 540,000,000 (Fifty four crore only) equity shares of ` 10/ each. Accordingly, the current shareholding structure of the Company is as follows:
IDFC Financial Holding Company Limited : 81.48%
Housing Development Finance Corporation Limited : 11.11%
SBI Life Insurance Company Limited : 7.41%
During the year, the Authorised Share Capital of the Company was increased from ` 500 crore to ` 800 crore.
paRtIcUlaRs of employees
Your Company had 13 employees as on March 31, 2016.
The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
employees’ stocK optIon plan
Pursuant to the resolution passed by the Members at the EGM held on February 1, 2016, IDFC Infra Debt Fund Limited had introduced Employee Stock Option Scheme 2016 (“the ESOS- 2016”) to enable the employees of IDFC Infra Debt Fund Limited to participate in the future growth and financial success of the Company.
All Options vest in graded manner and are required to be exercised within a specific period.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
Since the Company is engaged in business of financing of companies in the ordinary course of business, provisions of Section 186 of the Companies Act, 2013 relating to loan made, guarantees given or securities provided are not applicable to the Company. Thus, provision of Section 134(g) requiring to provide the particulars of loans, guarantees or investments are not applicable and hence not given.
vIgIl mechanIsm/ whIstle BloweR polIcy
The Board has put in place a “Whistle Blower Policy”, so as to establish a Vigil Mechanism to enable Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the company’s code of conduct or ethics policy. The Group General Counsel & Head - Legal & Compliance is 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 eaRnIngs and eXpendItURe
There was no income or expenditure in foreign currency during the period under review.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRs / Key manageRIal peRsonnel
At the last Annual General Meeting of the Company held on July 09, 2015, Mr. Sunil Kakar, Dr. Rajeev Uberoi and Mr. Pavan Kaushal were appointed as Directors. Dr. Rajiv B. Lall resigned w.e.f. July 24, 2015. Mr. Sunil Kakar and Dr. Rajeev Uberoi resigned w.e.f. October 28, 2015.
During the year, following directors were appointed on October 28, 2015 as Additional directors:
1. Mr. S H Khan – Independent Director and Chairperson of the Board
2. Mr. S S Kohli – Independent Director
3. Mr. A K T Chari – Independent Director
4. Ms. Ritu Anand – Non Executive Director
I D F C I N F R A D E B T F U N D L I M I T E D | 6 1
BOARD'S REPORT
However, there was cessation of directorship of Mr. S H Khan due to his sudden demise on January 12, 2016. The Board placed on record its sincere appreciation for the contribution made by Mr. Khan during his tenure as a Director. We convey our sincere and deep felt condolences to Late Mr. S H Khan’s family.
Mr. S S Kohli was appointed as a Chairperson of the Board w.e.f. January 25, 2016.
The Company has received notices from Members of the Company under Section 160 of the Companies Act, 2013, proposing the confirmation of appointment of Mr. S S Kohli, Mr. A K T Chari and Ms. Ritu Anand at the ensuing AGM. The Board of Directors recommend the appointment of said directors.
In accordance with the provisions of the Companies Act, 2013, Mr. Pavan Kaushal would retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.
Also, during the year, the following were appointed as Key Managerial Personnel’s:
1. Mr. Sadashiv S. Rao - Chief Executive Officer
2. Mr. Sanjay Ajgaonkar - Chief Financial Officer
3. Mr. Amol A. Ranade - Company Secretary
declaRatIon of Independence
The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.
meetIngs of the BoaRd
During the year, the Board met seven (7) times on April 29, 2015, July 24, 2015, August 21, 2015, September 21, 2015, October 28, 2015, January 25, 2016 and March 04, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance details of the Board Meetings held during FY16 is given in the table below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. S S Kohli 00169907 Chairperson & Independent Director 3 3
Mr. A K T Chari 06478173 Independent Director 3 3
Ms. Ritu Anand 05154174 Non-Executive Director 3 3
Mr. Vikram Limaye 00488534 Non-Executive Director 7 7
Mr. Pavan Kaushal 07117387 Non-Executive Director 7 7
Dr. Rajiv B. Lall1 00131782 Chairperson & Non-Executive Director 2 1
Late Mr. S H Khan2 00006170 Chairperson & Independent Director 1 1
Mr. Sunil Kakar3 03055561 Non-Executive Director 5 5
Dr. Rajeev Uberoi3 01731829 Non-Executive Director 5 51 Resigned w.e.f. July 24, 20152 Appointed as Chairperson w.e.f. October 28, 2015 & Cessation due to death w.e.f. January 12, 20163 Resigned w.e.f. October 28, 2015
aUdIt commIttee
During the year, the Audit Committee met four (4) times on April 29, 2015, July 24, 2015, October 28, 2015 and January 25, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance details of the Audit Committee Meetings held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. S S Kohli Independent Director Chairperson 2 2
Mr. A K T Chari Independent Director Member 2 2
Mr. Pavan Kaushal Non-Executive Director Member 2 2
Mr. Vikram Limaye1 Non-Executive Director Chairperson 3 3
Mr. Sunil Kakar1 Non-Executive Director Member 3 3
Dr. Rajeev Uberoi1 Non-Executive Director Member 3 3
Dr. Rajiv B. Lall2 Non-Executive Director Member 1 01 Ceased to be a Member w.e.f. October 28, 20152 Ceased to be a Member w.e.f. July 24, 2015
cRedIt commIttee
During the year, The Credit Committee met three (3) times on December 23, 2015, January 25, 2016 and March 04, 2016. The attendance details of the Credit Committee Meetings held during FY16 is given in the table below.
62 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. S S Kohli Independent Director Chairperson 3 3
Mr. A K T Chari Independent Director Member 3 3
Mr. Vikram Limaye Non-Executive Director Member 3 3
Mr. Pavan Kaushal Non-Executive Director Member 3 3
nomInatIon and RemUneRatIon commIttee (nRc)
During the year, NRC was constituted to comply with the provisions of the Companies Act, 2013, comprising of:
1. Mr. A K T Chari – Chairperson
2. Mr. S S Kohli
3. Mr. Vikram Limaye
During the year, one (1) NRC meeting was convened and held on January 25, 2016. The composition of NRC is in compliance with the Companies Act, 2013. The attendance details of the NRC Meeting held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. A K T Chari Independent Director Chairperson 1 1
Mr. S S Kohli Independent Director Member 1 1
Mr. Vikram Limaye Non-Executive Director Member 1 1
BoaRd evalUatIon
The process of evaluations for the Directors including Chairperson and the Board and its committees has been started through circulation of questionnaires.
The said process will be completed in FY17 as most of the Directors were appointed on October, 2015.
RemUneRatIon polIcy
The Board approved the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013.
statUtoRy aUdItoRs
The 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) as Statutory Auditors for a period of 5 years to hold office from the conclusion of the First Annual General Meeting for FY14 up to the conclusion of the Sixth Annual General Meeting of the Company for FY19. As per the provisions of the Companies Act, 2013 and Rules made there under, the above appointment is required to be ratified at every AGM during the period of 5 years of their appointment. The Statutory Auditors have confirmed that they are eligible to be appointed as Statutory Auditors for FY17.
The Board recommends the reappointment of Deloitte Haskins & Sells LLP, Chartered Accountants, as the Statutory Auditors of the Company.
There are no qualifications or observations or other remarks made by the Statutory Auditors for FY16.
secRetatRIal aUdIt
Pursuant to section 204 of the Companies Act, 2013 and the rules made thereunder, the company had appointed M/S. BNP & Associates, Company Secretaries, as Secretarial Auditors to undertake Secretarial Audit of the Company for FY16. The Secretarial Audit Report forms part of this Board’s Report as annexure I.
There are no qualifications or observations or other remarks made by the Secretarial Auditors for FY16.
Related paRty tRansactIons
In all related party transactions (RPTs) that were entered into during the financial year, an endeavor was made consistently that they were on an arm’s length basis and were in the ordinary course of business. The Company has always been committed to good corporate governance practices, including matters relating to RPTs.
As per the Accounting standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013 and Para A of Schedule V of SEBI (LODR) Regulations, 2015, the related parties of the company are given in note no. 24 of the Notes forming part of the financial statements.
Pursuant to the provisions of Companies Act, 2013 and Rules made thereunder and in the back-drop of the Company’s philosophy on such matters, on the recommendation of Audit Committee the Board approved “Policy on Related Party Transactions” at its meeting held on March 20, 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.
BOARD'S REPORT
I D F C I N F R A D E B T F U N D L I M I T E D | 6 3
InteRnal contRol systems and RIsK management
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
The Risk Management Committee has been formulated to monitor and review Risk Management of the Company.
mateRIal changes / commItments
As per Section 134(3)(l) of Companies Act, 2013,there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs / coURts / tRIBUnal
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.
antI-seXUal haRassment polIcy
The company has in place a policy on Anti-Sexual Harassment. The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.
eXtRact of annUal RetURn
The details forming part of the extract of the Annual Return in form MGT-9 are annexed herewith as annexure II.
coRpoRate socIal ResponsIBIlIty (csR)
During the year, Corporate Social Responsibility Committee was reconstituted to comply with the provisions of the Companies Act, 2013, comprising of:
1. Mr. S S Kohli - Chairperson
2. Mr. Vikram Limaye
3. Ms. Ritu Anand
The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed herewith as annexure III.
dIRectoRs’ ResponsIBIlIty statement
the Directors confirm that:
(a) in the preparation of financial statements for the year ended March 31, 2016, 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, 2016 and of the profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual financial statements on a going concern basis; and
(e) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
acKnowledgements
The Directors express their gratitude for the unstinted support and guidance received from IDFC Financial Holding Company Limited, Investors (HDFC and SBI Life) and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
s s KohlIChairperson
Mumbai, June 25, 2016
BOARD'S REPORT
64 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
for the financial year ended march 31, 2016
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To
The MembersIdfc Infra debt fund limitedC-32, G-Block, Naman ChambersBandra-Kurla ComplexBandra EastMumbai 400051
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to corporate practices by IDFC InFRa DeBt FUnD lImIteD (hereinafter called ‘the Company’) for the audit period covering the financial year ended on March 31, 2016. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, and subject to our separate letter attached as Annexure I; we hereby report that in our opinion, the Company has, during the audit period generally complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March 31, 2016 according to the provisions of:
(i) The Companies Act, 2013 (‘the Act’) and the Rules made thereunder;
(ii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):
(a) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(b) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(c) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
(iv) Infrastructure Debt Fund-Non-Banking Financial Companies (Reserve Bank) Directions, 2011;
(v) Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015;
(vi) Non-Banking Financial Companies – Corporate Governance (Reserve Bank) Directions, 2015.
We have also examined compliance with the applicable clauses of Secretarial Standards issued by The Institute of Company Secretaries of India related to meetings and minutes.
During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
During the period under review, provisions of the following Act / Regulations were not applicable to the Company:
(i) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder;
(ii) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(iii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (“SEBI Act”):
(a) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015;
(b) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;
(d) The Securities and Exchange Board of India (Share based Employee benefits) Regulations, 2014;
(e) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(f) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;
(iv) Listing Agreement (since not applicable being an unlisted company).
anneXURe ISECRETARIAL AUDIT REPORT
I D F C I N F R A D E B T F U N D L I M I T E D | 6 5
We further report that -
The Board of Directors of the Company is duly constituted with proper balance of Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Proper notice is given to all Directors to schedule the Board meetings in compliance with the provisions of Section 173(3) of the Companies Act, 2013, agenda and detailed notes on agenda were generally sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of majority. There were no dissenting views by any member of the Board of Directors during the period under review.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the audit period, the Company has:
1. Obtained consent of the Board of Directors to issue Non-Convertible Securities aggregating up to ` 20,000 crores on Private Placement basis.
2. Obtained approval from the members to borrow monies aggregating up to ` 20,000 crores by issuance of Non-Convertible Securities on Private Placement basis.
3. Obtained consent of the Board of Directors to issue 13,00,00,000 Equity Shares of the face value of ` 10/- each for cash at par on Rights basis.
4. Obtained approval from the members to issue and allot up to 10,00,00,000 Equity Shares of the face value of ` 10/- each for cash at par on Preferential basis.
For Bnp & associatesCompany Secretaries
Jatin S. popatPartnerFCS 4047 / CP No.6880
Mumbai, April 25, 2016
anneXURe I to the secRetaRIal aUdIt RepoRt foR the fInancIal yeaR ended maRch 31, 2016
To,
The Members,IDFC Infra Debt Fund limited
1. Maintenance of Secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial Records. The verification was done on the test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
4. Wherever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
For Bnp & associatesCompany Secretaries
Jatin S. popatPartnerFCS 4047 / CP No.6880
Mumbai, April 25, 2016
anneXURe ISECRETARIAL AUDIT REPORT
66 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
as on the financial year ended on march 31, 2016
[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 U67190MH2014PLC253944
ii) Registration Date 07/03/2014
iii) Name of the Company IDFC INFRA DEBT FUND LIMITED
iv) Category / Sub-Category of the Company Company Limited by sharesIndian Non-Government Company
v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex,Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354
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. The Company is in process of changing Registrar & Transfer Agent (RTA).
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. Finance to Infra Debt projects 66309 100%
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1 IDFC Limited L65191TN1997PLC037415
Ultimate Holding
Indirectly 81.48%
Section 2(46)
2 IDFC Financial Holding Company Limited L65900TN2014PLC097942 Holding 81.48% Section 2(46)
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 yeaRdemat physIcal total % of total shaRes
demat physIcal total % of total 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. 309,999,994 6 310,000,000 100% 439,999,994 6 440,000,000 81.48% (18.52%)
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):- 309,999,994 6 310,000,000 100% 439,999,994 6 440,000,000 81.48% (18.52%)
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C I N F R A D E B T F U N D L I M I T E D | 6 7
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR no. of shaRes held at the end of the yeaR % change dURIng
the yeaRdemat physIcal total % of total shaRes
demat physIcal total % of total 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):- nIl nIl nIl nIl nIl nIl nIl nIl nIl
total shareholding of promoter(a) = (a)(1)+(a)( 2)
309,999,994 6 310,000,000 100% 439,999,994 6 440,000,000 81.48% (18.52%)
B. public Shareholding nIl nIl nIl nIl nIl nIl nIl nIl nIl
1. Institutions
a) Mutual Funds
b) Banks/FI 60,000,000 NIL 60,000,000 11.11% 11.11%
c) Central Govt
d) State Govt(s)
e) Venture Capital Funds
f) Insurance Companies 40,000,000 NIL 40,000,000 7.41% 7.41%
g) FIIs
h) Foreign Venture Capital Funds
i) Others (specify)
Sub-total (B)(1):- nIl nIl nIl nIl 100,000,000 nIl 100,000,000 18.52% 18.52%
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 100,000,000 nIl 100,000,000 18.52% 18.52%
C. Shares held by Custodian for gDRs & aDRs
nIl nIl nIl nIl nIl nIl nIl nIl nIl
grand total (a+B+C) 309,999,994 6 310,000,000 100% 539,999,994 6 540,000,000 100%
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR
shaRe holdIng at the end of the yeaR % change In shaRe holdIng
dURIng the yeaR
no. of shaRes % of total
shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
no. of shaRes % of total
shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
1. IDFC Limited 152,000,000 49% NIL NIL NIL NIL (49%)
2. IDFC Alternatives Limited 143,000,000 46% NIL NIL NIL NIL (46%)
3. IDFC Finance Limited 15,000,000 5% NIL NIL NIL NIL (5%)
4. IDFC Financial Holding Company Limited NIL NIL NIL 440,000,000 81.48% NIL 81.48%
total 310,000,000 100% nIl 440,000,000 81.48% nIl (18.52%)
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
68 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
(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 310,000,000 100% 310,000,000 100%
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 440,000,000 81.48% 440,000,000 81.48%
# Inter-se transfer and increase in shareholding 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 Ltd 152,000,0000 49% July 9, 2015 Decrease Transfer inter se 0 0%
IDFC Alternatives Limited
143,000,000 46% August 21, 2015 Decrease Transfer inter se 0 0%
IDFC Finance Limited 15,000,000 5% August 21, 2015 Decrease Transfer inter se 0 0%
IDFC Financial Holding Company Limited
0 0 July 9, 2015 and August 21, 2015
Increase Transfer Inter se 310,000,000 100%
2. IDFC Financial Holding Company Limited
0 0 September 21, 2015 Increase Right Issue* 440,000,000 100%
* The Company made Rights Issue of 130,000,000 equity shares of ` 10 each to IDFC Financial Holding Company Limited.
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
sR. no.
foR each of the top 10 shaReholdeRs shaReholdIng at the BegInnIng of the yeaR
no. of shaRes % of total shaRes of the company
1. At the beginning of the year 0 0
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):#
10,00,00,000 18.52%
3. At the end of the year (or on the date of separation, if separated during the year) 10,00,00,000 18.52%
# Preferential Allotment aggregating to 10,00,00,000 equity shares (6,00,00,000 and 4,00,00,000 to Housing Development Finance Corporation Limited and SBI Life Insurance Company Limited, respectively) on March 29, 2016.
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: IN `
secURed loans eXclUdIng
deposIts
UnsecURedloans
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 808,00,00,000 NIL NIL 808,00,00,000
• Reduction NIL NIL NIL NIL
Net Change 808,00,00,000 NIL NIL 808,00,00,000
Indebtedness at the end of the financial year 808,00,00,000 NIL NIL 808,00,00,000
i) Principal Amount 808,00,00,000 NIL NIL 808,00,00,000
ii) Interest due but not paid NIL NIL NIL NIL
iii) Interest accrued but not due 22,31,70,669 NIL NIL 22,31,70,669
I D F C I N F R A D E B T F U N D L I M I T E D | 6 9
total (I+II+III) 830,31,70,669 NIL NIL 830,31,70,669
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NOT APPLICABLE
B. Remuneration to other directors: IN `
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoRs total amoUnt
late s h Khan
s s KohlI aKt chaRI RItU anand vIKRam lImaye
pavan KaUshal
1. Independent Directors
Fee for attending board committee meetings 25,000 200,000 200,000 - N.A. N.A. 425,000
Commission - - - - N.A. N.A. -
Others, please specify - - - - N.A. N.A. -
total (1) 25,000 200,000 200,000 - n.a. n.a. 425,000
2. other non-executive Directors
Fee for attending board committee meetings N.A. N.A. N.A. 75,000 - - 75,000
Commission N.A. N.A. N.A. - - - -
Others, please specify N.A. N.A. N.A. - - - -
total (2) n.a. n.a. n.a. 75,000 - - 75,000
total (B) = (1 + 2) 25,000 200,000 200,000 75,000 - - 500,000
Overall Ceiling as per the Act Refer Note
Note: Aforesaid payment of sitting fees is within overall limits prescribed by the Companies Act, 2013.
C. Remuneration to key managerial personnel other than mD/manager/WtD. IN `
sR. no.
paRtIcUlaRs of RemUneRatIon Key manageRIal peRsonnel
ceo company secRetaRy
(w.e.f. octoBeR 1, 2015)
cfo(w.e.f. septemBeR
1, 2015)
total
1. gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
22,555,287 955,006 3,238,332 26,748,625
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
39,600 NIL NIL 39,600
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961
2. Stock option NIL NIL NIL NIL
3. Sweat equity NIL NIL NIL NIL
4. Commission NIL NIL NIL NIL
- as % of profit
- others, specify...
5. others, please specify
2,435,411 81,320 357,553 2,874,284
total (a) 25,030,298 1,036,326 3,595,885 29,662,509
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
70 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014] ` IN LAC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams 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
0.83
0.12 0.12
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.06 0.06
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 0.17 0.17
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.14 0.14
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
0.09 0.09
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.04 0.04
total 0.83 0.62 0.62
7 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
0.55
0.15 0.15
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 0.20 0.20
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 0.11 0.11
total 0.55 0.46 0.46
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
0.52
0.13 0.13
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects; Cl. (iv) ensuring environmental sustainability; Cl. (x) rural development projects.
Meghalaya - Across State 0.11 0.11
12 Setting up a Centre of Excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 0.07 0.07
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.03 0.03
total 0.52 0.34 0.34
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 1.87 0.61 0.61
total 1.87 0.61 0.61
total Direct expense of project & programmes (a) 2.03 2.03
overhead expense (restricted to the 5% of total CSR expenditure) (B) 0.18 0.18
total (a) + (B) 3.77 2.21 2.21
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C I N F R A D E B T F U N D L I M I T E D | 7 1
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014] ` IN LAC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams 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
0.83
0.12 0.12
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.06 0.06
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 0.17 0.17
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.14 0.14
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
0.09 0.09
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.04 0.04
total 0.83 0.62 0.62
7 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
0.55
0.15 0.15
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 0.20 0.20
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 0.11 0.11
total 0.55 0.46 0.46
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
0.52
0.13 0.13
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects; Cl. (iv) ensuring environmental sustainability; Cl. (x) rural development projects.
Meghalaya - Across State 0.11 0.11
12 Setting up a Centre of Excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 0.07 0.07
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.03 0.03
total 0.52 0.34 0.34
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 1.87 0.61 0.61
total 1.87 0.61 0.61
total Direct expense of project & programmes (a) 2.03 2.03
overhead expense (restricted to the 5% of total CSR expenditure) (B) 0.18 0.18
total (a) + (B) 3.77 2.21 2.21
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
72 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
1. a brief outline of the Company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The CSR policy is to ensure that CSR activities are not performed in silos and that it be skillfully and inextricably woven into the fabric of the Company’s business strategy for overall value creation for all stakeholders. IDFC believes that profitability must be complemented by a sense of responsibility towards all stakeholders with a view to make a material, visible and lasting difference to the lives of disadvantaged sections of the people, preferably in the immediate vicinity in which the Company operates but at the same time ensure widespread spatial distribution of its CSR activities Pan-India befitting its status as a conscientious corporate citizen.
Section 135 of Companies Act, 2013 (“the act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Infra Debt Fund Limited to mandatorily spend on CSR.
During the year, IDFC Infra Debt Fund Limited carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).
The object of the CSR activities would seek to –
(a) serve the poor, marginalised and underprivileged
(b) promote inclusion
(c) be sustainable
(d) meet needs of the larger community and society
IDFC Foundation, as implementing agency on behalf of IDFC Limited and its group companies, undertook the following CSR activities which fall within the ambit of the activities listed in Schedule VII of the Act for promoting the development of –
(a) livelihoods
(b) rural 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, renewable energy, slum re-development and affordable housing.
2. the Composition of the CSR Committee.
Mr. Vikram Limaye
Mr. S. S. Kohli
Ms. Ritu Anand
3. average net profit of the company for last three financial years ` 188.46 lacs
4. prescribed CSR expenditure (two per cent of the amount as in item 3 above) ` 3.77 lacs
5. Details of CSR spent during the financial year. ` 3.77 lacs
(a) Total amount to be spent for the financial year; ` 3.77 Lacs
(b) Amount unspent, if any; ` NIL
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C I N F R A D E B T F U N D L I M I T E D | 7 3
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc InfRa deBt fUnd lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of Idfc InfRa deBt fUnd lImIted (“the Company”), which comprise the Balance Sheet as at March 31, 2016, 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 Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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 prescribed under section 133 of the Act, as applicable.
(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
74 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For deloItte hasKIns & sells llp
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar
Partner
(Membership No. 105035)
Mumbai, April 25, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 7 5
(Referred to in paragraph 1 (f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal financial controls over financial Reporting under clause (i) of sub-section 3 of section 143 of the companies act, 2013 (“the act”)We have audited the internal financial controls over financial reporting of Idfc InfRa deBt fUnd lImIted (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal financial controlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal financial controls over financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal financial controls over financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For deloItte hasKIns & sells llp
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar
Partner
(Membership No. 105035)
Mumbai, April 25, 2016
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
76 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered deed of conveyance provided to us, we report that, the title deeds, comprising the immovable property of land which is freehold, is held in the name of the Company as at the balance sheet date.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provide guarantees to which provisions of section 185 and 186 of Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO is not applicable.
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanations given to us, during the year, there were no dues payable in respect of Employees’ State Insurance, Sales Tax, Custom Duty and Excise Duty.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) There are no dues of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2016 on account of disputes.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company does not have an Executive or a Whole-time Director hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us, the Company has made private placement of shares during the year under review.
In respect of the above issue, we further report that:
a) the requirement of Section 42 of the Companies Act, 2013, as applicable, have been complied with; and
b) the amounts raised have been applied by the Company during the year for the purposes for which the funds were raised, other than temporary deployment pending application.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its Holding Company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, and it has obtained the registration.
For deloItte hasKIns & sells llp
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
pallavi a. gorakshakar
Partner
(Membership No. 105035)
Mumbai, April 25, 2016
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
I D F C I N F R A D E B T F U N D L I M I T E D | 7 7
BALANCE SHEET AS AT MARCH 31, 2016
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
NOTES ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 5,400,000,000 3,100,000,000
(b) Reserves and surplus 4 415,288,931 44,267,414
5,815,288,931 3,144,267,414
non Current liabilities
(a) Long-term borrowings 5 8,080,000,000 -
(b) Long-term provisions 6 48,070,351 -
8,128,070,351 -
Current liabilities
(a) Trade payables
(i) Total outstanding dues of Micro, Small and Medium Enterprises 7 - -
(ii) Total outstanding dues of creditors other than Micro, Small and Medium Enterprises
7 43,455,611 125,034
(b) Other current liabilities 8 229,323,399 13,000
272,779,010 138,034
TOTAL 14,216,138,292 3,144,405,448
assets
non-current assets
(a) Fixed assets
Tangible assets 9 4,947,982 4,515,444
(b) Long term loans and advances
(i) Loans 10 11,263,482,159 -
(ii) Others 11 60,373,978 23,198,269
11,328,804,119 27,713,713
Current assets
(a) Current investments 12 1,065,000,000 3,112,034,460
(b) Cash and cash equivalents 13 1,022,659,003 1,073,301
(c) Short-term loans and advances -
(i) Loans 10 754,105,883 -
(ii) Others 14 2,461,322 3,583,974
(d) Other current assets 15 43,107,965 -
2,887,334,173 3,116,691,735
TOTAL 14,216,138,292 3,144,405,448
See accompanying notes forming part of the financial statements (See notes 1 to 33).
In terms of our report attached
For Deloitte haskins & Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Infra Debt Fund limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeDirector
S S kohliDirector
Mumbai | April 25, 2016Sanjay ajgaonkarChief Financial Officer
amol Ranade Company Secretary
78 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
In terms of our report attached
For Deloitte haskins & Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Infra Debt Fund limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeDirector
S S kohliDirector
Mumbai | April 25, 2016Sanjay ajgaonkarChief Financial Officer
amol Ranade Company Secretary
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
NOTES
FOR THE YEAR ENDED MARCH 31,
2016`
FOR THE YEAR ENDED MARCH 31,
2015`
I Income
Revenue from operations 16 749,855,908 34,460
Other income 17 - 88,788,170
TOTAL INCOME (I) 749,855,908 88,822,630
II eXpenses
Employee benefits expense 18 84,050,738 -
Finance Costs 19 232,230,773 1,211,222
Provisions and contingencies 20 48,070,351 -
Other expenses 21 12,891,000 29,979,958
Depreciation 9 1,591,529 223,987
TOTAL ExPENSES (II) 378,834,391 31,415,167
III pRofIt BefoRe taX (I - II) 371,021,517 57,407,463
Iv taX eXpense 32
Current tax - 12,180,500
Deferred tax - 12,900
Short provision of last year - 21,900
TOTAL TAx ExPENSES (IV) - 12,215,300
v pRofIt foR the yeaR (III - Iv) 371,021,517 45,192,163
Earnings per equity share (nominal value of share ` 10 each) 25
Basic & Diluted (`) 0.98 0.22
See accompanying notes forming part of the financial statements (See notes 1 to 33)
I D F C I N F R A D E B T F U N D L I M I T E D | 7 9
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
NOTES
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
a. cash flow fRom opeRatIng actIvItIes
Profit before tax 371,021,517 57,407,463
adjustments for
Depreciation 9 1,591,529 223,987
Provision for contingencies 20 48,070,351 -
Interest expense 19 (i) 223,170,669 -
Interest income 16 (a) (475,484,935) -
Profit on sale of current investments 16 (249,594,769) (34,460)
Interest paid - -
Interest received 432,376,970 -
Operating profit before working capital changes 351,151,332 57,596,990
Changes in working capital:
adjustment for (increase)/decrease in operating assets/other current assets
Short term loans & advances 1,122,652 (3,290,590)
adjustment for increase/ (decrease) in operating liabilities
Trade payables 43,330,577 38,801
Other current liabilities 6,139,730 5,000
Direct taxes paid (net of refund) (37,175,709) (35,469,469)
CaSh geneRateD FRom opeRatIonS 364,568,582 18,880,732
Infrastructure Loans disbursed (net of repayments) (12,017,588,042) -
net CaSh USeD In opeRatIng aCtIVItIeS (a) (11,653,019,460) 18,880,732
B. cash flow fRom InvestIng actIvItIes
Purchase of fixed assets 9 (2,024,067) (4,739,431)
Purchase of current investments (14,752,600,001) (3,118,000,000)
Sale proceeds of current investments 17,049,229,230 6,000,000
net CaSh USeD In InVeStIng aCtIVItIeS (B) 2,294,605,162 (3,116,739,431)
c. cash flow fRom fInancIng actIvItIes
Proceeds from issue of Share Capital 2,300,000,000 2,980,000,000
Proceeds from Borrowings 8,080,000,000 -
net CaSh FRom FInanCIng aCtIVItIeS (C ) 10,380,000,000 2,980,000,000
net decrease in Cash & Cash equivalents (a+B+C) 1,021,585,702 (117,858,699)
Cash and cash equivalents as at the beginning of the year 13 1,073,301 118,932,000
Cash and cash equivalents as at the end of the year 13 1,022,659,003 1,073,301
1,021,585,702 (117,858,699)
In terms of our report attached
For Deloitte haskins & Sells llpChartered Accountants(Registration No. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC Infra Debt Fund limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeDirector
S S kohliDirector
Mumbai | April 25, 2016Sanjay ajgaonkarChief Financial Officer
amol Ranade Company Secretary
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
80 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01 BacKgRoUndIDFC Infra Debt Fund Limited (‘the Company’) is a public company incorporated in India on March 7, 2014. The Company has received a Non-banking Financial Company license from the Reserve Bank of India (the RBI) on September 22, 2014. The main object of the Company is to undertake infrastructure debt fund activities ie, re-financing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to new infrastructure projects.
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF pRepaRatIon
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in preparation of financial statements are consistent with those followed in the previous year.
B. USe oF eStImateS
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.
c. CaSh anD CaSh eqUIValentS
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
d. CaSh FloW Statement
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
e. loanS
In accordance with the RBI guidelines, all loans are classified under any of four categories i.e. (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.
f. tangIBle FIxeD aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the fair value/cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
g. DepReCIatIon on tangIBle FIxeD aSSetS
Depreciable amount for assets is the cost of an asset in the year of addition. Depreciation on tangible fixed assets is provided on straight line method as per the useful life prescribed in Part C of Schedule II to the Companies Act, 2013. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.
h. ImpaIRment oF aSSetS
The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an appropriate discounting factor. If at the Balance Sheet date, there is indication that previously recognised impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.
I. expenSe UnDeR employee StoCk optIon SChemeS (eSoS)
The ESOS provides for grant of stock options to employees to acquire equity shares of the Company that vest in a graded manner and that are to be exercised within a specified period. In accordance with the Guidelines and the Guidance Note on ‘Accounting for Employees Share-based Payments’ issued by the Institute of Chartered Accountants of India, the excess, if any, of the fair value/closing market price on the day prior to the date of grant of the stock options under the ESOS over the exercise price is amortised on a straight-line method over the vesting period and is charged to the Statement of Profit and Loss as employee benefits expense. In case the vested stock options expires unexercised, the balance in stock options outstanding is transferred to the general reserve.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 8 1
In case the unvested stock options get lapsed / cancelled, the balance in stock option outstanding account is transferred to the Statement of Profit & Loss.
J. InVeStmentS
Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
K. employee BeneFItS
Defined contribution plan
The contribution to provident fund, superannuation fund and pension fund are considered as defined contribution plans and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made and when services are rendered by the employees.
Defined benefit plan
The net present value of obligation towards gratuity to employees is actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit and Loss for the year.
Compensated absences
Employees are not permitted to accumulate leave. Based on the leave rules, unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.
l. BoRRoWIng CoStS
Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Interest cost in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan.
m. ReVenUe ReCognItIon
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised:
Interest Income is accounted on accrual basis except in the case of non-performing loans where it is recognised upon realisation, as per the income recognition and asset classification norms prescribed by the RBI.
Front end fees on processing of loans are recognised upfront as income.
Dividend is accounted on accrual basis when the right to receive is established.
Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is determined based on the FIFO cost for current investments and weighted average cost for long term investments.
n. polICy on Segment
The Company is engaged in business of Non banking financial services. As such, there are no separate reportable segments (including geographical segments).
o. eaRnIngS peR ShaRe
Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the year, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each year.
p. taxeS on InCome
Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as notified under the Companies (Accounting Standards) Rules, 2006. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
82 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
As the income of the Company is exempt under section 10(47) of the Income Tax Act, 1961, no deferred tax asset/liability has been recognised from October, 2014, post obtaining registration with Reserve Bank of India as IDF-NBFC.
q. pRoVISIonS anD ContIngenCIeS
Contingent provision against standard assets is made at 0.40% of the outstanding standard assets, higher than the provisioning requirement of 0.30% in accordance with the extant RBI guidelines.
The policy of provisioning against non performing loans and advances has been decided by the Management considering norms prescribed by the RBI under Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2007. As per the policy adopted, the provision against non performing loans and advances are created on a conservative basis, taking into account Management’s perception of the higher risk associated with the business of the Company.
R. otheR pRoVISIonS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.
s. SeRVICe tax InpUt CReDIt
Service tax input credit is accounted for in the books in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.
t. opeRatIng CyCle
Operating cycle is the normal time between acquisition of assets and their realisation in cash or cash equivalents. Since normal operating cycle cannot be identified, it is assumed to have a duration of twelve months for the purpose of classification of its assets and liabilities as current and non-current.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
authorised shares
Equity shares of ` 10 each 800,000,000 8,000,000,000 500,000,000 5,000,000,000
Issued, subscribed & fully paid-up shares
Equity shares of ` 10 each(Of the above, 440,000,000 equity shares are held by IDFC Financial Holding Company Limited & its nominees; IDFC Limited is the Ultimate Holding Company)
540,000,000 5,400,000,000 310,000,000 3,100,000,000
TOTAL 5,400,000,000 3,100,000,000
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
Outstanding at the beginning of the year 310,000,000 3,100,000,000 12,000,000 120,000,000
Issued during the year (see note 24) 230,000,000 2,300,000,000 298,000,000 2,980,000,000
OUTSTANDING AT THE END OF THE YEAR 540,000,000 5,400,000,000 310,000,000 3,100,000,000
(b) terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 8 3
(c) Details of shareholders holding more than 5% of the shares in the Company
EQUITY SHARES AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Financial Holding Company Limited and its nominees 440,000,000 81.48 - -
Housing Development Finance Corporation Limited 60,000,000 11.11 - -
SBI Life Insurance Company Limited 40,000,000 7.41 - -
IDFC Limited and its nominees - - 152,000,000 49.03
IDFC Alternatives Limited - - 143,000,000 46.13
(d) movement in stock options granted under the eSoS is as under:
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
nUmBeR nUmBeR
Outstanding as at beginning of the year - -
Add: Granted during the year 3,901,000 -
Less: Exercised during the year - -
Less: Lapsed / forfeited during the year - -
OUTSTANDING AS AT THE END OF THE YEAR 3,901,000 -
04 ReseRves and sURplUs (RefeR note 31)
AS AT MARCH 31, 2016`
AS AT MARCH 31, 2015`
(a) special Reserve u/s. 45-Ic of the RBI act,1934
Opening balance 9,040,000 -
Add : Transferred from surplus in Statement of Profit and Loss 75,000,000 9,040,000
CLOSING BALANCE 84,040,000 9,040,000
(b) surplus in the statement of profit and loss
Opening balance 35,227,414 (924,749)
Profit for the year 371,021,517 45,192,163
Less: Appropriations
Transfer to Special Reserve u/s. 45-IC of the RBI Act, 1934 75,000,000 9,040,000
CLOSING BALANCE 331,248,931 35,227,414
TOTAL RESERVES AND SURPLUS 415,288,931 44,267,414
05 long-teRm BoRRowIngs
`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NON-CURRENT CURRENT NON-CURRENT CURRENT
Debentures (non convertible) (secured)[see note (a), (b), ( c) below & note 24]
8,080,000,000 - - -
TOTAL LONG-TERM BORROWINGS 8,080,000,000 - - -
(a) The above borrowings are secured by way of a first floating pari passu charge by way of hypothecation of receivables of the Company arising out of its investments, loans, current assets, loans and advances, both present and future, excluding investments in and other receivables from subsidiaries and affiliates and lien marked assets.
(b) In terms of the RBI circular (Ref No. DNBR (PD) CC No.043 / 03.10.119 / 2015-16 dated July 1, 2015) no borrowings remained overdue as on March 31, 2016. (Previous Year ` Nil).
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
84 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(c) Interest and repayment terms of long-term borrowings:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
RESIDUAL MATURITY BALANCE OUTSTANDING
INTEREST RATE(%) BALANCE OUTSTANDING
INTEREST RATE(%)
Fixed Rate
Above 5 years 1,030,000,000 8.88 - -
3-5 years 7,050,000,000 8.55 to 8.85 - -
1-3 years - - - -
TOTAL 8,080,000,000 -
06 long-teRm pRovIsIons
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Contingent provision against standard assets [see note (a) & (b) below] 48,070,351 -
48,070,351 -
(a) A contingent provision against standard assets has been created at 0.40% of the outstanding standard assets as against 0.30% required in terms of the RBI circular (Ref. No. DNBR (PD) CC No.043 / 03.10.119 / 2015-16 dated July 1, 2015).
(b) Movement in contingent provision against standard assets during the year is as under:
Opening balance - -
Additions during the year 48,070,351 -
CLOSING BALANCE 48,070,351 -
07 tRade payaBles
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Total outstanding dues of Micro, Small and Medium Enterprises-Trade payables (see note 27) - -
Total outstanding dues of creditors other than Micro, Small and Medium Enterprises-Trade payables (see note 27)
1,094,925 -
Provision for expenses 42,360,686 125,034
TOTAL 43,455,611 125,034
08 otheR cURRent lIaBIlItIes
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Interest accrued but not due on borrowings 223,170,669 -
Statutory dues 2,348,906 13,000
Payable to Gratuity Fund (see note 22) 3,513,934 -
Payable to New Pension Scheme 28,904 -
Other liabilities 260,986 -
TOTAL 229,323,399 13,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 8 5
09 tangIBle assets (see note 24)
GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK
BALANCE AS AT
APRIL 1, 2015
ADDITIONS DISPOSALS BALANCE AS AT
MARCH 31, 2016
BALANCE AS AT
APRIL 1, 2015
DEPRECIATION CHARGE FOR
THE YEAR
ON DISPOSALS
BALANCE AS AT
MARCH 31, 2016
BALANCE AS AT
MARCH 31, 2016
BALANCE AS AT
MARCH 31, 2015
(`) (`) (`) (`) (`) (`) (`) (`) (`) (`)
Freehold Land - 382,500 - 382,500 - - - - 382,500 -
(Previous year) - - - - - - - - - -
Vehicles (owned) 4,739,431 1,443,479 - 6,182,910 223,987 1,572,609 - 1,796,596 4,386,314 4,515,444
(Previous year) - (4,739,431) - (4,739,431) - (223,987) - (223,987) (4,515,444)
Computers - 179,213 - 179,213 - 15,630 - 15,630 163,583 -
(Previous year) - - - - - - - - -
Office Equipments - 18,875 - 18,875 - 3,290 - 3,290 15,585 -
(Previous year) - - - - - - - - -
TOTAL TANGIBLE
ASSETS
4,739,431 2,024,067 - 6,763,498 223,987 1,591,529 - 1,815,516 4,947,982 4,515,444
(previous year) - (4,739,431) - (4,739,431) - (223,987) - (223,987) (4,515,444) -
10 loans (see note 24)
`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NON-CURRENT CURRENT NON-CURRENT CURRENT
Rupee loans [see note (a), (b) & (c) below] 9,178,187,268 681,857,025 - -
Debentures [see note (a), (b) and ( c) below] 2,085,294,891 72,248,858 - -
TOTAL 11,263,482,159 754,105,883 - -
(a) The above amount includes:
Secured [see note 10(b)] 11,263,482,159 754,105,883 - -
Unsecured - - - -
(b) The above loans are secured by:
(i) Hypothecation of assets and / or
(ii) Mortgage of property and / or
(iii) Trust and retention account and / or
(iv) Assignment of receivables or rights and / or
(v) Pledge of shares
(c) The classification of loans under the RBI guidelines is as under:
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
(i) Standard assets 12,017,588,042 -
(ii) Sub-standard assets - -
(iii) Doubtful assets - -
(iv) Loss assets - -
TOTAL 12,017,588,042 -
11 long teRm loans and advances-otheRs (consIdeRed good, Unless stated otheRwIse)
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Advance payment of income tax 60,373,978 23,198,269
(net of provision for tax of ` Nil, Previous year ` 12,180,500)
TOTAL 60,373,978 23,198,269
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
86 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
12 cURRent Investments
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Investment in mutual funds (unquoted)
578,910.125 units of IDFC Cash Fund-Direct Plan-Growth (previous year-1,876,720.636 units) 1,065,000,000 3,112,034,460
(Face value per unit - ` 1,000)
TOTAL 1,065,000,000 3,112,034,460
Aggregate amount of investments in unquoted mutual funds
Cost 1,065,000,000 3,112,034,460
Market value 1,066,248,304 3,191,516,957
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds
13 cash and cash eqUIvalents (see note 24)
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Balance with bank:
In current account 1,659,003 1,073,301
In deposit account 1,021,000,000 -
TOTAL 1,022,659,003 1,073,301
14 shoRt-teRm loans and advances (consIdeRed good, Unless stated otheRwIse)
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Prepaid expenses 1,825,182 3,295,890
Supplier Advance 62,425 -
Employee Advance 17,350 -
Balances with government authorities - cenvat credit receivable 556,365 288,084
TOTAL 2,461,322 3,583,974
15 otheR cURRent assets (consIdeRed good, Unless stated otheRwIse)
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
Interest accrued on Bank deposits (See note 24) 593,520 -
Interest accrued on loans 42,514,445 -
TOTAL 43,107,965 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 8 7
16 RevenUe fRom opeRatIons
FOR THE YEAR ENDEDMARCH 31, 2016
`
FOR THE YEAR ENDEDMARCH 31, 2015
`
Interest [see note (a) below] 475,484,935 -
Other financial services -Fees 24,776,204 -
Profit on sale of current investments 249,594,769 34,460
TOTAL 749,855,908 34,460
(a) Details of interest income
Interest on loans [see note (i) below] 472,766,469 -
Interest on deposits (see note 24) 2,718,466 -
TOTAL 475,484,935 -
(i) Interest on loans includes interest on debentures & bonds of ` 58,008,762 (Previous Year ` Nil).
17 otheR Income
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Interest on bank deposit [see note (a) below] - 88,788,170
Miscellaneous income - -
TOTAL - 88,788,170
(a) In the previous year, the interest on bank deposit earned prior to the date of commencement of operations is classified as other income.
18 employee BenefIts eXpense
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Salaries 75,106,847 -
Contribution to provident and other funds (Refer Note 22) 8,408,090 -
Staff welfare expenses 535,801 -
TOTAL 84,050,738 -
19 fInance costs
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Interest expense 223,185,540 6,776
(i) Borrowings (see note 24) 223,170,669 -
(ii) Others-Interest on delayed payment of income tax 14,871 6,776
Other borrowing cost (see note 24) 9,045,233 1,204,446
TOTAL 232,230,773 1,211,222
20 pRovIsIons and contIngencIes
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Contingent provision against standard assets (see note 6) 48,070,351 -
TOTAL 48,070,351 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
88 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
21 otheR eXpenses
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Professional fees 3,838,046 112,825
Rates and taxes 7,175 285,154
Insurance charges 1,753 -
Travelling and conveyance 874,763 452,147
Printing and stationery 6,939 -
Communication costs 11,543 -
Stamp duty and registration fees for increase in authorised share capital 892,131 28,729,000
Directors’ sitting fees 625,000 -
NSDL & Demat Charges 12,840 40,450
Shared service cost [see note (a) below & note 24)] 4,265,985 -
Contribution towards corporate social responsibility (CSR) (see note 24) 376,924 -
Auditor’s remuneration [see note (b) below] 1,740,646 355,591
Advertising & publicity 88,320 -
Miscellaneous expenses 135,560 4,791
Other operating expenses 13,375 -
TOTAL 12,891,000 29,979,958
(a) Shared service costs includes amount paid to fellow subsidiary ` 4,014,125 (previous year ` Nil) & ultimate holding company ` 251,860 (previous year ` Nil) towards a Service Level Agreement.
(b) Breakup of Auditors’ remuneration
Audit fees 400,000 100,000
Tax audit fees 50,000 30,000
Taxation matters 500,000 -
Other Services 670,000 195,000
Service tax 176,646 40,170
Swachh Bharat Cess 7,000 -
Total 1,803,646 365,170
Less: Cenvat credit available 63,000 9,579
1,740,646 355,591
22 In accordance with Accounting Standard 15 on ‘Employee Benefits’ specified under Section 133 of the 2013 Act, the following disclosures have been made:
i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Provident fund 2,023,380 -
Superannuation fund 230,192 -
Pension fund 1,196,466 -
ii The details of the Company’s post - retirement benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors:
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Change in the defined benefit obligations:
Liability at the beginning of the year - -
Current service cost 682,742 -
Interest cost 383,913 -
Liabilities assumed on acquisition 14,898,975 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 8 9
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Benefits paid - -
Actuarial loss 3,891,397 -
Liability at the end of the year 19,857,027 -
Fair value of plan assets :
Fair value of plan assets at the beginning of the year - -
Expected return on plan assets - -
Assets acquired on Acquisition/(Distributed on Divestiture) 14,898,960 -
Contributions 1,444,118 -
Benefits paid - -
Actuarial gain on plan assets - -
Fair value of plan assets at the end of the year 16,343,078 -
Amount recognised in the Balance sheet under ‘Other current liabilities’-payable to Gratuity Fund
3,513,949 -
actual return on plan assets :
Expected return on plan assets - -
Actuarial gain on plan assets - -
Actual return on plan assets - -
amount recognised in the Balance Sheet:
Liability at the end of the year 19,857,027 -
Fair value of plan assets at the end of the year 16,343,078 -
Amount recognised in the Balance sheet under ‘Other current liabilities’-payable to Gratuity Fund 3,513,949 -
expense recognised in the Statement of profit and loss :
Current service cost 682,742 -
Interest cost 383,913 -
Expected return on plan assets - -
Net actuarial loss recognised during the year 3,891,397 -
Expense recognised in the Statement of Profit and Loss under ‘Employee benefits expense’ 4,958,052 -
Reconciliation of the liability recognised in the Balance Sheet:
Opening net asset / (liability) - -
Expense recognised 4,958,052 -
Contribution by the Company 1,444,118 -
Expected employer’s contribution next year 1,000,000 -
experience adjustments:
FOR THE YEAR ENDED MARCH 31, 2016
`
FOR THE YEAR ENDED MARCH 31, 2015
`
Defined benefit obligation 19,857,027 -
Plan assets 14,898,960 -
Recoverable on short settled Liability on divestiture 15
Deficit before contribution (4,958,052) -
Contribution made by Company 1,444,118
Deficit (3,513,934)
Experience adjustments on plan liabilities - -
Experience adjustments on plan assets - -
Investment pattern:
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
Insurer managed funds - -
principal assumptions:
Discount rate (p.a.) 8% 0%
Expected rate of return on assets (p.a.) 9% 0%
Salary escalation rate (p.a.) 8% 0%
The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
90 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
23 The Company is engaged in business of Non banking financial services. As such, there are no separate reportable segments (including geographical segments) as per Accounting Standard 17 on ‘Segment Reporting’ specified u/s 133 of Companies Act, 2013.
24 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
I. Ultimate Holding Company: IDFC Limited
II. Holding company: IDFC Financial Holding Company Limited
III. Fellow Subsidiaries
i) IDFC Bank Limited
ii) IDFC Foundation
iii) IDFC Alternatives Limited
iv) IDFC Finance Limited
The nature and volume of transactions carried out with the above related parties in the ordinary course of business is as follows:
NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
a. UltImate holdIng company
1 IDFC LIMITED
i Expense
Shared services cost (*) 235,383 -
Interest expense on NCDs issued 8,933,607 -
ii Assets/Transactions
Purchase of fixed assets 675,877 -
Assignment of third party loans 4,944,000,000 -
iii Liabilities/Transactions
Inter corporate deposits received & repaid 1,900,000 -
NCDs issued & outstanding 450,000,000 -
Proceeds from issue of equity shares - 1,400,000,000
Interest on NCDs issued 8,933,607 -
B. holdIng company
1 IDFC FINANCIAL HOLDING COMPANY LIMITED
i Liabilities/Transactions
Proceeds from issue of equity shares 1,300,000,000 -
Outstanding equity share capital 4,400,000,000 -
c. fellow sUBsIdIaRIes
1 IDFC BANK LIMITED
i Income
Interest on Fixed deposits 2,718,466 -
ii Expense
Shared services cost expense (*) 3,751,518 -
Arranger fees paid* 131,424 -
iii Assets/Transactions
Purchase of fixed assets 198,088 -
Purchase of third party NCDs 1,088,259,724 -
Reimbursement of accrued interest on third party NCDs 4,073,375 -
Fixed deposits placed 2,635,500,000 -
Fixed deposits matured 1,614,500,000 -
Assignment of third party loans 1,252,092,044 -
Outstanding fixed deposits 1,021,000,000 -
Interest accrued on fixed deposits-balance outstanding 593,520 -
Balance in current account 1,503,731 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 9 1
NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
2 IDFC FOUNDATION
i Expense
Contribution towards corporate social responsibility (CSR) 376,924 -
3 IDFC ALTERNATIVES LIMITED
Proceeds from issue of equity shares - 1,430,000,000
4 IDFC FINANCE LIMITED
Proceeds from issue of equity shares - 150,000,000
(*) amounts exclude service tax expensed out in the statement of profit & Loss
25 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014:
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
Profit after tax (`) 371,021,517 45,192,163
Weighted average number of equity shares (Nos.) 379,371,585 201,413,699
Basic & diluted earnings per share (`) 0.98 0.22
Nominal value per share (`) 10 10
26 There are no contingent liabilities as at the end of current year and the previous year.
27 No amount is payable to ‘Suppliers’ registered 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.
28 The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBR (PD) CC No. 043 / 03.10.119 / 2015-16 dated July 1, 2015) and RBI circular DNBR(PD) CC No. 053 / 03.10.119 / 2015-16:
(a) Capital to risk assets ratio (CRaR):
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
i) CRAR (%) 43.05% 100.77%
ii) CRAR - Tier I Capital (%) 42.67% 100.77%
iii) CRAR - Tier II Capital (%) 0.38% -
iv) Amount of Subordinated Debt considered as Tier-II Capital - -
v) Amount raised by issue of Perpetual Debt Instruments - -
(b) Details of Investments are set out below:
AS ATMARCH 31, 2016
`
AS ATMARCH 31, 2015
`
1 valUe of Investments
(I) GROSS VALUE OF INVESTMENTS
(a) In India 1,065,000,000 3,112,034,460
(b) Outside India - -
(A) 1,065,000,000 3,112,034,460
(II) PROVISION FOR DEPRECIATION
(a) In India - -
(b) Outside India - -
(B) - -
(III) NET VALUE OF INVESTMENTS
(a) In India 1,065,000,000 3,112,034,460
(b) Outside India - -
(A-B) 1,065,000,000 3,112,034,460
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
92 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
2 movement of pRovIsIons held towaRds depRecIatIon on Investments.
(I) OPENING BALANCE - -
(II) ADD: PROVISIONS MADE DURING THE YEAR - -
(III) LESS: WRITE-OFFS/ WRITE-BACK OF ExCESS PROVISIONS DURING THE YEAR
- -
(IV) CLOSING BALANCE - -
(c) Investor group wise classification of all investments (Current and long term) in shares and securities (both quoted and Unquoted):
`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
MARKET VALUE/ BREAKUP VALUE / FAIR
VALUE / NAV
BOOK VALUE NET OF PROVISION
MARKET VALUE/ BREAKUP VALUE / FAIR
VALUE / NAV
BOOK VALUE NET OF PROVISION
1 Related parties - - - -
(a) Subsidiaries - - - -
(b) Companies in the same group - - - -
(c) Other related parties
2 Other than related parties 1,066,248,304 1,065,000,000 3,191,516,957 3,112,034,460
TOTAL 1,066,248,304 1,065,000,000 3,191,516,957 3,112,034,460
(d) Derivatives
The Company does not have any Interest Rate Swaps (IRS) and Forward Rate Agreements (FRA), Exchange Traded Interest Rate Derivatives (IR), Risk Exposure in Derivatives and hence the related disclosures are not applicable to the Company.
(e) Securitisation /assignment
The Company has no transactions of Securitisation / Assignment in the current and in the previous year and hence the related disclosures are not applicable to the Company.
(f) Details of non-performing financial assets purchased/sold and accounts subjected to restructuring:
The Company has not undertaken any transactions for purchase/sale of NPA’s in the current and in the previous year and hence the related disclosures are not applicable to the Company.
(g) asset liability management maturity pattern of certain items of assets and liabilities
Current year `
PARTICULARS 1 DAY TO 30/31 DAYS
(ONE MONTH)
OVER ONE MONTH
TO TWO MONTHS
OVER TWO MONTHS
TO THREE MONTHS
OVER THREE MONTHS TO SIx MONTHS
YEAR
OVER SIx MONTHS TO ONE YEARS
OVER ONE YEAR TO
THREE YEARS
OVER THREE YEARS TO
FIVE
OVER FIVE YEARS
TOTAL
Deposits - - - - - - - - -
Advances (net) 98,717,741 21,441,804 52,850,410 207,128,781 373,967,147 1,719,115,845 1,678,605,478 7,865,760,836 12,017,588,042
Investments 1,065,000,000 - - - - - - - 1,065,000,000
Borrowings - - - - - - 7,050,000,000 1,030,000,000 8,080,000,000
Foreign Currency assets
- - - - - - - - -
Foreign Currency liabilities
- - - - - - - - -
previous year `
1 DAY TO 30/31 DAYS
(ONE MONTH)
OVER ONE MONTH
TO TWO MONTHS
OVER TWO MONTHS
TO THREE MONTHS
OVER THREE MONTHS TO SIx MONTHS
YEAR
OVER SIx MONTHS TO ONE YEARS
OVER ONE YEAR TO
THREE YEARS
OVER THREE YEARS TO
FIVE
OVER FIVE YEARS
TOTAL
Deposits - - - - - - - - -
Investments 3,112,034,460 - - - - - - - 3,112,034,460
Borrowings - - - - - - - - -
Foreign Currency assets
- - - - - - - - -
Foreign Currency liabilities
- - - - - - - - -
In computing the above information, certain estimates, assumptions and adjustments have been made by the Management which have been relied upon by auditors.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N F R A D E B T F U N D L I M I T E D | 9 3
(h) exposures to real estate sector (Based on amounts sanctioned):
This disclosure is not applicable to the Company as there are no exposures, direct or indirect to real estate sector as at March 31, 2016 and as at March 31, 2015.
(i) exposures to Capital market
This disclosure is not applicable to the Company as there are no exposures to capital market as at March 31, 2016 and as at March 31, 2015.
(j) Details of Single Borrower limit and Borrower group limit exceeded by the Company
During the years ended March 31, 2016 and March 31, 2015, the Company’s credit exposure to single borrowers and group borrowers were within the limits prescribed by the RBI.
(k) Borrower group-wise classification of assets financed:`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NET OF PROVISION (*) NET OF PROVISION
1 RELATED PARTIES
(a) Subsidiaries - -
(b) Companies in the same group - -
(c) Other related parties - -
2 OTHER THAN RELATED PARTIES 11,969,517,691 -
TOTAL 11,969,517,691 -
(*) Net of provision for standard assets
(l) Unsecured advances
The Company has not given any unsecured advances in the current year and in the previous year.
(m) Registration obtained from other financial regulators
The Company has not obtained registrations from other financial regulators.
(n) penalties / fines imposed by the RBI
During the year ended March 31, 2016 there was no penalty imposed by the RBI and other regulators (Previous Year ` Nil).
(o) provisions and Contingencies
AS AT MARCH 31, 2016`
AS AT MARCH 31, 2015`
Break up of ‘Provisions and Contingencies’ shown under the head ‘Expenses’ in the Statement of Profit and Loss
- -
Provisions for depreciation on Investment - -
Provision towards NPA - -
Provision made towards Income tax - 12,215,300
Other Provision and Contingencies - -
Provision for Standard Assets 48,070,351 -
48,070,351 12,215,300
(p) Drawdowns from Reserves
The Company has not undertaken any drawdown from reserves during the current year and previous year and hence the related disclosures are not applicable to the Company.
(q) Concentration of advances
AS AT MARCH 31, 2016`
AS AT MARCH 31, 2015`
Total Advances to twenty largest borrowers 12,004,098,958 -
Percentage of Advances to twenty largest borrowers to Total Advances of the NBFC 99.9% -
(r) Concentration of exposures
AS AT MARCH 31, 2016`
AS AT MARCH 31, 2015`
Total Exposure to twenty largest borrowers / customers 17,454,393,142 -
Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the NBFC on borrowers / customers
86.8% -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
94 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(s) Concentration of non performing assets (npas) /Sector wise npas/ movement in npas
The Company did not have any NPAs in the current year and in the previous year and hence the related disclosures are not applicable to the Company.
(t) the information on overseas assets (for those with Joint Ventures and Subsidiaries abroad) is given below:
name oF the JoInt VentURe/ SUBSIDIaRy FoR the yeaR enDeD maRCh 31, 2016
otheR paRtneR In the JV CoUntRy total aSSetS
Nil Nil Nil
name oF the JoInt VentURe/ SUBSIDIaRy FoR the yeaR enDeD maRCh 31, 2015
otheR paRtneR In the JV CoUntRy total aSSetS
Nil Nil Nil
(u) the information on off balance sheet SpV sponsored (which are required to be consolidated as per accounting norms):
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
Nil Nil
(v) Debenture holder’ complaints :
(a) No. of complaints pending at the beginning of the year Nil
(b) No. of complaints received during the year Nil
(c) No. of complaints redressed during the year Nil
(d) No. of complaints pending at the end of the year Nil
The above information is certified by management and relied upon by the auditors.
29 The additional information required to be disclosed in terms of RBI circular (Ref. No. RBI/2009-2010/356/IDMD/4135/11.08.43/2009-10) dated March 23, 2010) is not applicable for the Company.
30 Ratings assigned by credit rating agencies and migration of ratings during the year
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(i) Name of the Rating Agency Credit analysis & research Limited ICRA Limited Credit analysis & research Limited
(ii) Rating Assigned AAA AAA AAA
(iii) Date of Rating December 22, 2015 February 18, 2016 February 10, 2015
(iv) Rating Valid upto December 21, 2016 February 17, 2017 August 09, 2015
The validity of the rating is subject to periodical revalidation by rating agencies.
31 There is no Debenture Redemption Reserve (DRR) created as the Non Banking Financial Companies registered with Reserve Bank of India are not required to create DRR for the privately placed debentures.
32 The Company is an Infra Debt Fund - Non Banking Finance Company (IDF - NBFC) registered with the Reserve Bank of India on September 22, 2014.
The income of the Company, being IDF-NBFC, is exempt under section 10(47) of the Income Tax Act, 1961, with effect from October, 2014.
33 The figures for previous year are not comparable due to substantial increase in business activities during the current year and have been regrouped wherever required.
For and on behalf of the Board of Directors ofIDFC Infra Debt Fund limited
Vikram limayeDirector
S S kohliDirector
Mumbai | April 25, 2016Sanjay ajgaonkarChief Financial Officer
amol Ranade Company Secretary
Idfc alteRnatIves lImIted
U67190MH2002PLC137798
Dr. Jaimini Bhagwati (Chairperson)
Mr. Gautam Kaji
Mr. Bharat Shah
Ms. Marianne Økland
Mr. Sanjiv Kapur
Mr. Vikram Limaye
Mr. Sunil Kakar
Deloitte Haskins & Sells LLP
Chartered Accountants
IDFC Bank Limited
Naman Chambers
C-32, G-Block, Bandra-Kurla
Complex, Bandra (East)
Mumbai 400 051
tel +91 22 4222 2000
Fax + 91 22 2654 0354
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
96 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD’S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Fourteenth Annual Report together with the audited financial statements for the year ended March 31, 2016.
fInancIal hIghlIghts
paRtIcUlaRs (amoUnt In `)
foR the peRIod ended maRch 31, 2016
foR the peRIod ended maRch 31, 2015
Total Income 1,279,171,564 1,286,330,289
Less: Total Expenses 1,016,363,691 901,274,796
Profit before Tax 262,807,873 385,055,493
Less: Provision for Tax 116,670,000 157,853,158
profit after tax 146,137,873 227,202,335
opeRatIons RevIewYour Company continues to be one of the leading multi-asset class fund managers in India, with presence in the areas of Private Equity, Infrastructure and Real Estate. During the last fiscal year, your Company acted as Fund Manager for a total of five funds - IDFC Private Equity Fund II and IDFC Private Equity Fund III under the Private Equity asset class; India Infrastructure Fund (“IIF”) and India Infrastructure Fund II (“IIF II”) under the Infrastructure Equity asset class; and IDFC Real Estate Yield Fund (“REYF”) under the Real Estate asset class.
IIF, our first infrastructure focused fund, has just started the phase of harvesting the portfolio with a couple of exits in the last year. In FY16, IIF’s total exit proceeds were INR 278 crore, including a full exit from Sabarmati Gas at 2.7x with lRR of 16%. In Viom Networks, a full exit has been contractually agreed and about half of the exit proceeds have been received at 1.5x with an IRR of 25%. During FY16, the infrastructure team has committed 3 new investments aggregating INR 1,050 crore from IIF II and has a robust pipeline of prospective investments and is expected to be fully committed over the next 18 months.
During FY16, Private Equity Funds continue to successfully build on their exit track record having secured 3 exits comprising a full exit for Fund II in Viom Networks and a partial exit for Fund III in Staragri Limited. Alongside the Viom Fund II exit, a guaranteed future exit in Fund III was also secured. Another IDFC PE portfolio company, Parag Milk Foods recently completed it’s IPO thus providing a partial exit for Fund III at 2x with a gross IRR of 21%. Further, two more Fund II investments, GVR Infra and Seaways Shipping have filed their DRHP with SEBI and are awaiting their respective IPO’s. The IDFC PE vertical has over it’s lifetime across three funds achieved 28 exits realizing INR 4,260 Cr and have therefore achieved 2.6x return in Fund I and return of capital invested in Fund II portfolio. Investments made by the PE Fund III continue to attract foreign strategic investors and it’s consumption sector investments continue to track healthy IRRs. The team remains engaged in monetizing investments and raising its 4th PE fund focused on select consumption themes.
For the real estate vertical, FY16 has been a year of steady deployment and asset management for the domestic real estate fund (REYF). The portfolio performance behaved in line with the underlying property markets - some investments performed well while others lagged behind. REYF made regular monthly distributions to its investors through the year aggregating INR 128 crore. With this the fund has distributed INR 190 crore since inception resulting in 30% return of the capital contributed. During the year, we also continued efforts to raise an offshore investment vehicle in partnership with SARE, an institutionally owned real estate developer. Towards the end of the year, we launched a new domestic fund that would focus on providing structured credit to real estate developers. This is follow-on to REYF and the initial response of market has been encouraging.
For the infrastructure sector, FY16 had witnessed increased activity such as award of over 21 GW solar projects, 60% increase in road project awards, launch of “Ujwal DISCOMS Assurance Yojana” program etc. Government’s thrust on reforms and new project awards is expected to continue going forward in FY17. In order to bid for these projects, existing developers are looking to raise capital through sale of their existing assets, which creates an opportunity for infrastructure investors such as IIF II to buy operating assets and manage these through settling up operating platforms.
Given its demographic dividend and urbanization drive, India’s long term structural drivers remain firm in contrast with other emerging markets. With ongoing reforms, some of the leading indicators of growth have already started pointing towards a revival in consumer spending. Aligning to India’s macroeconomic opportunity and the experience of the team, IDFC PE is now raising Fund IV based on the strategy of consumption portfolio. Domestic banks and insurance companies, including IDFC Ltd, have already committed to the new fund. IDFC PE is also engaged with select development financial institutions, pension funds and fund-of-funds for the first international fund close. Fund IV envisages investing two third as growth equity and the balance in building business platforms.
Globally, the Real Estate sector moves in tandem with the general economic environment and India is no different. With GDP growth upwards of 7% for the last 2 years, we are seeing robust activity levels in the commercial office segment. Further, with improving affordability and lower mortgage rates, the residential sector should also see a meaningful pick-up over the next 12-24 months. This augurs well for our mid-market residential focused investment vehicles which are looking to provide structured debt as well as equity for such projects. Alongside residential, the Real Estate vertical is also evaluating investment strategies like student housing and warehousing.
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.
I D F C A LT E R N AT I V E S L I M I T E D | 9 7
BOARD’S REPORT
dIvIdend
The Directors do not recommend any dividend for the financial year ended March 31, 2016 as the Company has decided to reinvest its earnings.
paRtIcUlaRs of employees
The Company had 60 employees as on March 31, 2016.
The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
sUBsIdIaRy companIes / JoInt ventURes / assocIate companIes
IDFC Limited was granted an in-principle approval by the Reserve Bank of India on April 9, 2014 to set up a Bank under the guidelines (“guidelines”) for licensing of new bank in private sector. The terms and conditions contained in the Guidelines mandated that all new banks would need to be set up through a Non-Operative Financial Holding Company (NOFHC). The NOFHC would be required to hold the Bank as well as all the other financial services entities of IDFC Group which are regulated by RBI or other financial sector regulators. Pursuant to Guidelines and subject to approval of Securities and Exchange Board of India Limited and any regulatory authorities, the Board of Directors at their meeting held on April 23, 2015 approved the transfer of entire equity shares of the Company from IDFC Limited to IDFC Financial Holding Company Limited, thereby making IDFC Alternatives, a wholly owned subsidiary of IDFC Financial Holding Company Limited.
The Company had one wholly owned subsidiary, namely IDFC Capital (Singapore) Pte. Limited
A statement containing salient features of the financial statement and all other requisite details of the subsidiary company in the format AOC-I is appended as annexure I. .
shaRe capItal Update
During the year, the entire shareholding of the Company held by IDFC Limited was transfered to IDFC Financial Holding Company Limited (“IDFC FhCl”), the holding company. The Company had acquired 46% stake in IDFC Infra Debt Fund Limited, thereby making it an Associate Company. However, during the year, the said shareholding was transferred to IDFC FHCL, the holding Company.
shaReholdeRs’ Update
With the advent of a number of various special purpose vehicles including infrastructure unit trust, hedge trust and the like and to rationalise and expand the scope of the services offered by the Company to the various pools of capital and special purpose vehicles, it is proposed to alter object clause of MOA of the Company to include the above businesses.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There 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 polIcy
The Board has put in place a Vigil Mechanism to enable Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Group General Counsel & Head - Legal & Compliance is the Whistle Officer for this purpose. 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 eaRnIngs
The 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 aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable.
dIRectoRs and Key manageRIal peRsonnel
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Mr. Sunil Kakar as Director at the ensuing AGM.
During the year, the following Directors were appointed in the category of Independent Directors (‘IDs’) to hold office till the conclusion of the Sixteenth AGM of the Company to be held for FY18.
98 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Ms. Marianne Økland (w.e.f. July 27, 2015)
Mr. Sanjiv Kapur (w.e.f. July 27, 2015)
Dr. Jaimini Bhagwati (w.e.f. September 1, 2015)
The shareholders at their meeting held on September 29, 2015 approved the appointment of Ms. Marianne Økland, Mr. Sanjiv Kapur and Dr. Jaimini Bhagwati as IDs of the Company.
On July 27, 2015, Dr. Rajiv Lall, Mr. Sadashiv S. Rao and Dr. Rajeev Uberoi resigned as Directors of the Company. The Board places on record its sincere appreciation for the services rendered by the said Directors during their tenure in the Company.
declaRatIon of Independence
As per the provisions of the Companies Act, 2013, Independent Directors are not liable to retire by rotation and the terms of appointment of Independent Director will be governed by the provisions of Companies Act, 2013. All Independent Directors 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 28, 2016.
BoaRd meetIngs
During FY16, the Board met five times and gap between two meetings was less than one hundred and twenty days. The dates of the meetings were: April 23, 2015, July 27, 2015, October 29, 2015, January 29, 2016, and March 8, 2016. The composition of Board is in compliance with the Companies Act, 2013. Attendance details of the Board Meetings are given below:
attenDanCe DetaIlS oF BoaRD oF DIReCtoRS FoR Fy16
name of the memBeR dIn posItIon no. of meetIngs held
no. of meetIngs attended
Dr. Jaimini Bhagwati1 07274047 Chairperson & Independent Director 3 3
Mr. Sanjiv Kapur2 01356126 Independent Director 3 3
Mr. Gautam Kaji 02333127 Independent Director 5 4
Ms. Marianne Økland2 03581266 Independent Director 3 3
Mr. Bharat Shah 00136969 Independent Director 5 2
Mr. Vikram Limaye 00488534 Non-Executive Director 5 5
Mr. Sunil Kakar 03055561 Non-Executive Director 5 5
Mr. Sadashiv Rao3 01245772 Non-Executive Director 2 2
Dr. Rajeev Uberoi3 01731829 Non-Executive Director 2 2
Dr. Rajiv B Lall3 00131782 Chairperson & Non-Executive Director 2 01 Appointed as an Additional Director w.e.f. September 1, 2015.2 Appointed as an Additional Director w.e.f. July 27, 2015.3 Resigned from Board w.e.f. July 27, 2015.
commIttees of the BoaRd
As of March 31, 2016, IDFC Alternatives had the following Board-level Committees:
(i) the Audit Committee; (ii) the Nomination & Remuneration Committee, (iii) CSR Committee
aUdIt commIttee
During the year, 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 dates of the Meetings are April 23, 2015, July 27, 2015, October 29, 2015, and January 29, 2016. The composition of Audit Committee is in compliance with the Companies Act, 2013.
The Audit Committee of the Company comprises of the following members:
1. Mr. Gautam Kaji - Independent Director - Chairperson
2. Mr. Bharat Shah - Independent Director
3. Mr. Sunil Kakar
Attendance details of the Audit Committee Meetings are given below:
attenDanCe DetaIlS oF aUDIt CommIttee meetIngS FoR Fy16
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Gautam Kaji Independent Director Chairperson 4 3
Mr. Bharat Shah Independent Director Member 4 2
Mr. Sunil Kakar Non-Executive Director Member 4 4
Ms. Marianne Økland1 Independent Director Member 1 11 Resigned as a member w.e.f. October 29, 2015.
BOARD’S REPORT
I D F C A LT E R N AT I V E S L I M I T E D | 9 9
BOARD’S REPORT
nomInatIon and RemUneRatIon commIttee
During the year, the Nomination and Remuneration Committee was re-constituted by inducting Mr. Sunil Kakar in place of Dr. Rajiv B Lall as a member of the Committee. The composition of Nomination and Remuneration Committee is in compliance with the Companies Act, 2013.
1. Mr. Vikram Limaye - Chairperson
2. Mr. Gautam Kaji - Independent Director
3. Mr. Bharat Shah – Independent Director
4. Dr. Rajiv B Lall - (resigned as a Member and Director of the Company w.e.f. July 27, 2015.)
5. Mr. Sunil Kakar
The Committee met two times during FY16: July 27, 2015 and March 8, 2016.
Attendance details of the NRC are given below:
attenDanCe DetaIlS oF nomInatIon anD RemUneRatIon CommIttee meetIngS FoR Fy16
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Vikram Limaye Non-Executive Director Chairperson 2 2
Mr. Gautam Kaji Independent Director Member 2 2
Mr. Bharat Shah Independent Director Member 2 0
Mr. Sunil Kakar Non-Executive Director Member 1 1
Dr. Rajiv B Lall1 Non-Executive Director Member 1 0
1 Resigned as a member w.e.f. July 27, 2015.
RemUneRatIon polIcy
The Company has a policy in place for identification of Independence, qualifications and positive attributes of Directors. The Board approved the Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees which is formulated in line with the requirements of the Companies Act, 2013.
aUdItoRs
The Shareholders of the Company at their meeting held on September 29, 2015 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 Thirteenth Annual General Meeting up to the conclusion of the Fourteenth 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.
aUdItoR’s RepoRt
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
Related paRty tRansactIon
The Company has in place the policy on Related Party Transactions (“Rpt”) and the same has been uploaded on the website of the Company. Since all RPTs entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.
InteRnal contRol systems
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
RIsK management
The Audit Committee of the Company endeavours to review the risk register at regular intervals. 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.
mateRIal changes / commItments
As per Section 134(3)(l) of Companies Act, 2013,there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
100 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
There are no significant and/or material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.
InfoRmatIon ReqUIRed UndeR seXUal haRassment of women at woRKplace (pReventIon, pRohIBItIon & RedRessal) act, 2013
The Company has in place a policy on Anti Sexual Harassment. There were no instances of Sexual Harassment that were reported under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company undertakes ongoing trainings to create awareness on this policy.
eXtRact of annUal RetURn
The details forming part of the extract of the Annual Return in form MGT-9 are annexed herewith as annexure II.
coRpoRate socIal ResponsIBIlIty
The Corporate Social Responsibility (“CSR”) Committee was re-constituted on July 27, 2015 by inducting Mr. Vikram Limaye as a Chairperson and Ms. Marianne Økland, in place of Dr. Rajiv B Lall:
The Committee comprised of the following;
1. Mr. Vikram Limaye - Chairperson (Appointed as the Chairperson of the Committee w.e.f. July 27, 2015)
2. Mr. Bharat Shah
3. Ms. Marianne Økland (Inducted as a member w.e.f. July 27, 2015)
4. Mr. Sunil Kakar
5. Dr. Rajiv B Lall (DIN - 00131782) (resigned as a Member and Director of the Company w.e.f. July 27, 2015.)
Pursuant to Section 135 and Schedule VII of the Act and Rules made thereunder and on recommendation of CSR Committee, the Board approved the revised CSR Policy and the said policy is available on the website of the Company - www.idfc.com/alternatives. The CSR Policy of the Company has been put up on the website of the Company. The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is appended as annexure III.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) such accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit and loss of the Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual financial statements have been prepared on a going concern basis; and
(e) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
acKnowledgements
The 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
Jaimini BhagwatiChairperson
Mumbai, June 25, 2016
BOARD’S REPORT
I D F C A LT E R N AT I V E S L I M I T E D | 1 0 1
[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 Foreign Company
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 66.3329
5. Share capital INR 2,462,166,070
6. Reserves & surplus INR (435,675,794)
7. total assets INR 2,029,987,856
8. total liabilities INR 2,029,987,856
9. Investments INR 1,370,541,791
10. turnover INR 78,833,690
11. profit before taxation INR (37,115,986)
12. provision for taxation Nil
13. profit after taxation INR (37,115,986)
14. proposed Dividend Nil
15. % of shareholding 100%
notes: Names of subsidiaries which have been liquidated or sold during the year: not applicable
PART “B”: assocIates and JoInt ventURes
Statement pursuant to Section 129 (3) of the Companies act, 2013 related to associate Companies and Joint Ventures:
NOT APPLICABLE
For and on behalf of the Board of Directors ofIDFC alternatives limited
Vikram limaye Director
Sunil kakar Director
Mumbai, April 29, 2016manish Jindal Chief Financial Officer
anneXURe IFORM AOC-I
102 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
as on the financial year ended on march 31, 2016
[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 shares Indian Non-Government Company
v) address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051. Tel.: +91 22 4222 2000; Fax: +91 22 2654 0354
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. The Company is in process of changing Registrar & Transfer Agent (RTA).
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 the company cIn/gln holdIng/ sUBsIdIaRy/assocIate % of shaRes
held
applIcaBle sectIon
1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Company 100% Section 2(46)
2. IDFC Financial Holding Company U65900TN2014PLC097942 Holding 100% Section 2(46)
3. IDFC Capital (Singapore) Pte. Ltd. Foreign Company Subsidiary Company 100% Section 2(87)
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
yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total shaRes
pRomoteRs
(1) Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL
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. 219,250 600 219,850 100% 219,250 600 219,850 100% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C A LT E R N AT I V E S L I M I T E D | 1 0 3
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR
% change dURIng the
yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total shaRes
(2) Foreign
a) NRIs - Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL
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)
219,250 600 219,850 100% 219,250 600 219,850 100% nIl
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) 219,250 600 219,850 100% 219,250 600 219,850 100% nIl
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
104 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR
shaRe holdIng at the end of the yeaR
% change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
no. of shaRes
% of total shaRes of the
company
% of shaRes pledged/
encUmBeRed to total
shaRes
1. IDFC Limited 219,250 100% NIL NIL NIL NIL (100%)
2. IDFC Financial Holding Company Limited NIL NIL NIL 219,250 100% NIL 100%
total 219,850 100% nIl 219,850 100% nIl 100%
(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 219,250 100% 219,250 100%
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% 219,250 100%
# 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 219,250 100% 23/04/2015 NA Transfer 219,250 100%
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness -
Indebtedness of the Company including interest outstanding/accrued but not due for payment IN `
secURed loans eXclUdIng deposIts
UnsecURed loans
deposIts total IndeBtedness
Indebtedness at the beginning 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
Change in Indebtedness during the financial year
• Addition NIL 3,107,500,000 NIL 3,107,500,000
• Reduction NIL (4,610,089,041) NIL (4,610,089,041)
net Change NIL (1,502,589,041) NIL (1,502,589,041)
Indebtedness at the end of the financial year
i) Principal Amount NIL NIL NIL NIL
ii) Interest due but not paid NIL NIL NIL NIL
iii) Interest accrued but not due NIL NIL NIL NIL
total (I+II+III) NIL NIL NIL NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C A LT E R N AT I V E S L I M I T E D | 1 0 5
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL
B. Remuneration to other directors: IN `
sR. no.
paRtIcUlaRs of RemUneRatIon
name of dIRectoRs total amoUnt
dR. JaImInI BhagwatI
gaUtam KaJI BhaRat shah
vIKRam lImaye
sUnIl KaKaR
sanJIv KapUR
maRIanne ØKland
1. Independent Directors
Fee for attending board /committee meetings
75,000 210,000 90,000 NIL NIL 75,000 100,000 550,000
Commission 500,000 500,000 500,000 NIL NIL 500,000 500,000 2,500,000
Others, please specify NIL NIL NIL NIL NIL NIL NIL NIL
total (1) 575,000 710,000 590,000 nIl nIl 575,000 600,000 3,050,000
2. other non-executive Directors
NIL NIL NIL NIL NIL NIL NIL NIL
Fee for attending board committee meetings
NIL NIL NIL NIL NIL NIL NIL NIL
Commission NIL NIL NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL NIL NIL
total (2) nIl nIl nIl nIl nIl nIl nIl nIl
total (B) = (1 + 2) 575,000 710,000 590,000 nIl nIl 575,000 600,000 3,050,000
Overall 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 3% 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 peRsonnel
ceo company secRetaRy cfo total
1. gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
55,488,904 N.A. 16,662,643 72,151,547
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
8,552,316 N.A. 263,025 8,815,341
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961
NIL N.A. NIL NIL
2. Stock option NIL N.A. NIL NIL
3. Sweat equity NIL N.A. NIL NIL
4. Commission NIL N.A. NIL NIL
- as % of profit
- others, specify...
5. others, please specify 2,514,700 N.A. 1,563,182 4,077,882
total (a) 66,555,920 N.A. 18,488,850 85,044,770
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
106 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]` In laC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes
act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams 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
14.89
2.15 2.97
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
1.00 2.44
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 2.99 4.19
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2.58 2.58
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
1.55 1.55
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.74 0.74
total 14.89 11.01 14.47
7 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
9.96
2.75 4.12
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 3.53 3.53
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 1.96 1.96
total 9.96 8.24 9.61
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
9.30
2.33 2.33
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
"Cl.(ii) livelihood enhancement projects; Cl. (iv) ensuring environmental sustainability; Cl. (x) rural development projects."
Meghalaya - Across State 2.02 3.87
12 Setting up a centre of excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 1.31 1.31
13 Skill development programme for improving the employment opportunities for the of youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.55 0.55
total 9.30 6.21 8.06
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 33.85 11.12 16.35
total 33.85 11.12 16.35
total Direct expense of project & programmes (a) 36.58 48.49
overhead expense (restricted to the 5% of total CSR expenditure) (B) 3.18 4.70
total (a) + (B) 68.00 39.76 53.18
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C A LT E R N AT I V E S L I M I T E D | 1 0 7
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]` In laC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes
act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams 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
14.89
2.15 2.97
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
1.00 2.44
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 2.99 4.19
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2.58 2.58
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
1.55 1.55
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.74 0.74
total 14.89 11.01 14.47
7 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
9.96
2.75 4.12
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 3.53 3.53
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 1.96 1.96
total 9.96 8.24 9.61
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
9.30
2.33 2.33
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
"Cl.(ii) livelihood enhancement projects; Cl. (iv) ensuring environmental sustainability; Cl. (x) rural development projects."
Meghalaya - Across State 2.02 3.87
12 Setting up a centre of excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 1.31 1.31
13 Skill development programme for improving the employment opportunities for the of youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.55 0.55
total 9.30 6.21 8.06
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 33.85 11.12 16.35
total 33.85 11.12 16.35
total Direct expense of project & programmes (a) 36.58 48.49
overhead expense (restricted to the 5% of total CSR expenditure) (B) 3.18 4.70
total (a) + (B) 68.00 39.76 53.18
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
108 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
1. a brief outline of the Company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The CSR policy is to ensure that CSR activities are not performed in silos and that it be skillfully and inextricably woven into the fabric of the Company’s business strategy for overall value creation for all stakeholders. IDFC believes that profitability must be complemented by a sense of responsibility towards all stakeholders with a view to make a material, visible and lasting difference to the lives of disadvantaged sections of the people, preferably in the immediate vicinity in which the Company operates but at the same time ensure widespread spatial distribution of its CSR activities Pan-India befitting its status as a conscientious corporate citizen.
Section 135 of Companies Act, 2013 (“the act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Alternative Ltd. to mandatorily spend on CSR.
During the year, IDFC Alternative carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).
The object of the CSR activities would seek to –
(a) serve the poor, marginalised and underprivileged
(b) promote inclusion
(c) be sustainable
(d) meet needs of the larger community and society
IDFC Foundation, as implementing agency on behalf of IDFC Limited and its group companies, undertook the following CSR activities which fall within the ambit of the activities listed in Schedule VII of the Act for promoting the development of –
(a) livelihoods
(b) rural 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, renewable energy, slum re-development and affordable housing.
2. the Composition of the CSR Committee.
Mr. Vikram Limaye
Mr. Bharat Shah
Mr. Sunil Kakar
Ms. Marianne Økland
3. average net profit of the company for last three financial years – ` 3347 lacs
4. prescribed CSR expenditure (two per cent of the amount as in item 3 above) – ` 68 lacs
5. Details of CSR spent during the financial year. ` 68 lacs
(a) Total amount to be spent for the financial year; ` 68 Lacs
(b) Amount unspent, if any; ` NIL
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C A LT E R N AT I V E S L I M I T E D | 1 0 9
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc alteRnatIves lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC alteRnatIVeS lImIteD (“the Company”), which comprise the Balance Sheet as at March 31, 2016, 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 Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, and evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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 prescribed under section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
1 10 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No.117366W / W-100018)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, 28 April, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 1 1
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
We have audited the internal financial controls over financial reporting of IDFC alteRnatIVeS lImIteD (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial ControlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No.117366W / W-100018)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, April 28, 2016
1 12 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising the immovable property of building which is freehold, is held in the name of the Company as at the balance sheet date.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees to which provision of section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO is not applicable
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanations given to us, during the year, there were no dues payable in respect of Employees’ State Insurance, Sales Tax, Custom Duty and Excise Duty.
(b) There were no undisputed amounts payable in respect of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) There are no dues of Provident Fund, Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2016 on account of disputes.
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 Order is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company does not have an Executive or a Whole-time Director hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its Holding Company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For DeloItte haSkInS & SellS llpChartered Accountants(Firm’s Registration No.117366W / W-100018)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, 28 April, 2016
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
I D F C A LT E R N AT I V E S L I M I T E D | 1 1 3
BALANCE SHEET AS AT MARCH 31, 2016
PARTICULARS
NOTES
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 2,198,500 2,198,500
(b) Reserves and surplus 4 3,099,786,229 2,953,648,356
non-current liabilities
(a) Deferred tax liability (net) 5 64,004,000 59,252,000
Current liabilities
(a) Short-term borrowings 6 - 1,500,000,000
(b) Trade payables 7
(A) total outstanding dues of micro enterprises and small enterprises - -
(B) total outstanding dues of creditors other than micro enterprises and small enterprises
255,620,398 303,198,525
(c) Other current liabilities 8 164,146,826 172,363,664
(d) Short-term provisions 9 9,677,059 9,896,210
TOTAL 3,595,433,012 5,000,557,255
assets
non-current assets
(a) Fixed assets
i) Tangible assets 10a 504,490,140 461,290,906
ii) Intangible assets 10b 399,893 604,953
504,890,033 461,895,859
(b) Non-current investments 11 2,482,547,854 3,913,397,214
(c) Long-term loans and advances 12 315,988,029 240,429,413
Current assets
(a) Current investments 11 140,340,182 227,760,673
(b) Cash and cash equivalents 13 17,323,108 37,853,529
(c) Short-term loans and advances 12 103,799,855 99,459,536
(d) Other current assets 14 30,543,951 19,761,031
TOTAL 3,595,433,012 5,000,557,255
See accompanying notes forming part of the financial statements (see notes 1 to 30).
In terms of our report attached.
For Deloitte haskins & Sells llpChartered Accountants(Registration no. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC alternatives limited
Vikram limaye Sunil kakar
pallavi a. gorakshakarPartner(Membership no. 105035)
Director Director
manish Jindal
Mumbai | April 28, 2016 Chief Financial Officer
1 14 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
In terms of our report attached.
For Deloitte haskins & Sells llpChartered Accountants(Registration no. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC alternatives limited
Vikram limaye Sunil kakar
pallavi a. gorakshakarPartner(Membership no. 105035)
Director Director
manish Jindal
Mumbai | April 28, 2016 Chief Financial Officer
PARTICULARS
NOTES
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
I Income
Revenue from operations 15 1,244,127,336 1,161,686,069
Other income 16 35,044,228 124,644,220
TOTAL INCOME (I) 1,279,171,564 1,286,330,289
II eXpenses
Employee benefit expenses 17 574,019,322 583,537,627
Finance cost 18 54,860,806 72,814,214
Depreciation and amortisation expense 10 25,197,397 (56,887,649)
Other expenses 19 362,286,166 301,810,604
TOTAL ExPENSES (II) 1,016,363,691 901,274,796
III pRofIt BefoRe taX (I-II) 262,807,873 385,055,493
Iv taX eXpense
Current tax 111,918,000 134,224,000
Deferred tax 5 4,752,000 23,629,158
TOTAL TAx ExPENSE 116,670,000 157,853,158
v pRofIt foR the yeaR fRom contInUIng opeRatIons (III-Iv) 146,137,873 227,202,335
Earnings per share (nominal value of ` 10 per share) 28
(a) Basic 664.72 1,567.67
(b) Diluted 664.72 1,567.67
See accompanying notes forming part of the financial statements (see notes 1 to 30).
I D F C A LT E R N AT I V E S L I M I T E D | 1 1 5
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
` `
a. cash flows fRom opeRatIng actIvItIes
Net profit before tax 262,807,873 385,055,493
adjustments for:
Depreciation and amortisation expenses 25,197,397 (56,887,649)
Interest expenses on inter corporate deposit 54,705,824 72,238,657
Loss on sale / write off of fixed assets - 22,988,231
Interest income on bank deposits - (67,726,168)
Profit on sale of current investments (11,412,228) (44,730,095)
Provision for expenses recoverable from funds 74,040,762 -
Dividend income on current investments - (3,969,272)
Operating profit before working capital changes 405,339,628 306,969,197
Changes in working capital:
Adjustments for (increase) / decrease in operating assets:
Long-term loans and advances (36,380,808) (49,802,634)
Short-term loans and advances (891,362) (59,810,266)
Other current assets (84,823,682) 33,697,878
adjustments for increase / (decrease) in operating liabilities:
Short-term provisions - 168,467,900
Trade payables (47,578,127) 2,950,345
Other current liabilities (5,627,797) (1,094,761)
Cash generated from operations 230,037,852 401,377,659
Net income tax paid (net of refund) (151,314,959) (114,410,937)
NET CASH FROM OPERATING ACTIVITIES 78,722,893 286,966,722
B. cash flows fRom InvestIng actIvItIes
Purchase of fixed assets (68,191,572) (9,311,033)
Capital advance (3,448,957) (1,981,152)
Proceeds from sale of fixed assets - 2,233,365
Bank balances not considered as cash and cash equivalents
Matured Fixed Deposits - 1,813,098,032
Purchase of current investments (999,740,000) (3,950,729,885)
Proceeds from sale of current investments 1,098,572,719 3,767,699,307
Investment in subsidiary companies - (4,592,166,070)
Investment in associate company - (1,430,000,000)
Proceeds from sale of non-current investments 849,360 (1,186,280)
Proceeds from sale of non-current investments - associate company 1,430,000,000 -
Interest income on bank deposits - 67,926,100
Dividend income on current investments - 3,969,272
NET CASH FROM / (USED IN) INVESTING ACTIVITIES 1,458,041,550 (4,330,448,344)
1 16 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
` `
c. cash flows fRom fInancIng actIvItIes
Issuance of equity shares - 1,999,983,750
Inter corporate deposit taken 3,107,500,000 2,950,000,000
Inter corporate deposit repaid (4,607,500,000) (1,450,000,000)
Interest paid on inter corporate deposit (57,294,864) (69,649,616)
NET CASH FROM / (USED) IN FINANCING ACTIVITIES (1,557,294,864) 3,430,334,134
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) (20,530,421) (613,147,488)
Cash and cash equivalents at the beginning of the year (see note 13) 37,853,529 259,304,284
Cash and cash equivalents of the merged entities - 391,696,733
Cash and cash equivalents at the end of the year (see note 13) 17,323,108 37,853,529
(20,530,421) (613,147,488)
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
In terms of our report attached.
For Deloitte haskins & Sells llpChartered Accountants(Registration no. 117366W/W-100018)
For and on behalf of the Board of Directors ofIDFC alternatives limited
Vikram limaye Sunil kakar
pallavi a. gorakshakarPartner(Membership no. 105035)
Director Director
manish Jindal
Mumbai | April 28, 2016 Chief Financial Officer
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 1 7
01 BacKgRoUndIDFC Alternatives Limited (‘Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited (‘IDFC FHC’), incorporated in India, providing Investment Management and Advisory Services. The Company is 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 their respective meetings held on July 21, 2014.
The Amalgamation was effective October 1, 2014 (Appointed Date) as approved by the Hon’ble Bombay High Court (“High Court”) vide its order dated January 30, 2015 which had 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 Hon’ble High Court was effective from the Appointed Date but operative from the Effective Date, hence the business of these subsidiaries had been transferred to and vested with the Holding Company on a going concern basis.
Consequent to 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 is now being carried out by the Company.
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF aCCoUntIng anD pRepaRatIon oF FInanCIal StatementS
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) 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.
B. USe oF eStImateS
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise..
c. CaSh anD CaSh eqUIValentS
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known 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. InFlatIon
Assets 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 ReCognItIon
i Management fees are recognised on accrual basis as per the terms of the agreement.
ii Interest and other dues are accounted on accrual basis.
iii Dividend is accounted when the right to receive is established.
iv Profit / loss on sale of investments is determined based on the ‘first in first out’ cost for current investments.
v Rental income is recognised on accrual basis as per the terms of the Leave & License Agreement.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
1 18 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
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 years 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, the Company has reviewed its policy of providing for depreciation on its tangible fixed assets and also reassessed their useful lives. On and from April 1, 2014, the straight line method is being used to depreciate all classes of tangible fixed assets.
Intangible assets
Intangible assets consisting of computer software are pro-rata amortised over a period of three years on the straight-line method.
I. InVeStmentS
Non-current investments are carried individually at acquisition cost. A provision is made for diminution other than temporary on an individual basis..
Current investments are carried individually at the lower of cost and fair values.
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 and when services are rendered by the employees..
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 in which they occur..
Compensated absences
Employees are not permitted to accumulate leave. Based on the leave rules, unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.
K. opeRatIng leaSeS
Where the assets are taken on lease
Leases under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Amount due under the operating leases are charged to the Statement of Profit and Loss, on a straight-line method, over the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the 2013 Act. Initial direct costs incurred specifically for operating leases are recognised as expense in the year in which they are incurred.
Where the assets are given on lease
Leases under which risks and benefits of ownership of the asset are not substantially transferred are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income in respect of operating leases is recognised in the Statement of Profit and Loss on a straight-line method over the lease term in accordance with Accounting Standard 19 on ‘Leases’ as specified under Section 133 of the 2013 Act. Maintenance costs including depreciation are recognised as an expense in the Statement of Profit and Loss.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 1 9
l. eaRnIngS peR ShaRe
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the year, unless they have been issued at a later date.
m. InCome-tax
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with applicable tax rates and the provisions of the Income-tax Act, 1961.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the Balance Sheet date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the Statement of Profit and Loss..
n. pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes. Contingent Assets are not recognised in the financial statements.
o. FoReIgn CURRenCy tRanSaCtIonS
Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.
p. ImpaIRment oF aSSetS
The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an appropriate discounting factor. If at the Balance sheet date, there is a indication that previously recognised impairment loss no longer exists or may have decreased, the recoverable amount is reassessed and the asset is reflected at the recoverable amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.
q. SeRVICe tax InpUt CReDIt
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilising the credits.
R. opeRatIng CyCle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
s. FUnD Set-Up expenSeS ReCoVeRaBle
As the investment manager, one of the key responsibilities of the Company is to undertake setting up new funds and offering Fund’s units on a private placement basis and procure investors’ commitments. To fulfil this responsibility, the Company incurs expenses for and on behalf of the new Fund which are booked as recoverable from the respective new Funds. Management performs an annual assessment of recoverablity of such expenses incurred. Based on management’s assessment these expenses may be provided / written -off at the year-end as deemed fit.
t. Segment RepoRtIng
The Company’s Primary segments are reflected based on the principle business carried out i.e. Investment Management and Advisory Services. The risk and return of the business of the company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
120 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
03 shaRe capItal
PARTICULARS AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER ` NUMBER `
(a) aUthoRIsed
Equity shares of ` 10 each 227,000,000 2,270,000,000 227,000,000 2,270,000,000
(B) IssUed, sUBscRIBed & fUlly paId Up
Equity shares of ` 10 each 219,850 2,198,500 219,850 2,198,500
(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees (Previous year - IDFC Limited) IDFC Limited is the ultimate Holding Company)
TOTAL 219,850 2,198,500 219,850 2,198,500
Note: Pursuant to the scheme of amalgamation by the Bombay High Court becoming effective from October 1, 2014 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 had 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, 2016 AS AT MARCH 31, 2015
no. oF ShaReS helD
` no. oF ShaReS helD
`
Outstanding as at the beginning of the year 219,850 2,198,500 50,000 500,000
Issued during the year - - 169,850 1,698,500
Outstanding as at the end of the year 219,850 2,198,500 219,850 2,198,500
(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 shares
The Company has only one class of equity share having a par value of ` 10 each. Each holder of equity share is entitled to one vote per share.
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 AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
no. oF ShaReS helD
% oF holDIng no. oF ShaReS helD
% oF holDIng
IDFC Limited and its nominees - - 219,850 100%
IDFC Financial Holding Company Limited and its nominees 219,850 100% - -
219,850 100% 219,850 100%
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 2 1
04 ReseRves and sURplUs
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
(a) secURItIes pRemIUm accoUnt
Opening balance 1,998,285,250 -
Add: Premium on issue of equity shares (see note 3(b)) - 1,998,285,250
Closing balance 1,998,285,250 1,998,285,250
(B) geneRal ReseRve
Opening balance 259,662,721 204,539,721
Add: Transferred from surplus in Statement of Profit and Loss - -
On amalgamation (see note 23) - 55,123,000
Closing balance 259,662,721 259,662,721
(c) sURplUs In statement of pRofIt and loss
Opening balance 695,700,385 383,789,340
Add: Profit for the year 146,137,873 227,202,335
On amalgamation (see note 23) - 84,708,710
Closing balance 841,838,258 695,700,385
TOTAL 3,099,786,229 2,953,648,356
05 defeRRed taX lIaBIlIty
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
defeRRed taX lIaBIlIty
On difference between book balance and tax balance of fixed assets 64,459,000 60,041,000
defeRRed taX assets
Others 455,000 789,000
DEFERRED TAx LIABILITY (NET) 64,004,000 59,252,000
(a) In compliance with Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of Companies Act, 2013, ` 4,752,000 (previous year ` 23,629,158) 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, 2015 59,252,000
Less: Deferred tax liability as at March 31, 2016 64,004,000
Charged to Statement of Profit and Loss (4,752,000)
06 shoRt-teRm BoRRowIngs
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Inter corporate deposit (see note 3(b) and note 26) - 1,500,000,000
TOTAL - 1,500,000,000
07 tRade payaBles
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Outstanding dues of micro enterprises and small enterprises - -
Outstanding dues of creditors other than micro enterprises and small enterprises
Payable to vendors 52,876,030 32,668,150
Provision for expenses 202,744,368 270,530,375
TOTAL 255,620,398 303,198,525
a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006
b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
122 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
c) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
d) No amount of interest has accrued and remained unpaid at the end of the year 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 lIaBIlItIes
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Fees received in advance 93,161,101 144,741,143
Other amount received in advance 15,844,942 5,449,982
Interest accrued but not due on Inter Corporate Deposits (see note 26) - 2,589,041
Payable to employee benefit funds (see note 24) 18,779,956 1,755,413
Security deposit (see note 26) 17,724,000 -
Others
Statutory remittances 18,636,827 17,828,085
TOTAL 164,146,826 172,363,664
09 shoRt-teRm pRovIsIons
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Provision for income tax (net of taxes paid ` 745,527,035 (previous year ` 745,307,885)) 9,293,028 9,512,179
Provision for fringe benefit tax (net of taxes paid ` 14,876,617 (previous year ` 14,876,617)) 384,031 384,031
TOTAL 9,677,059 9,896,210
10 fIXed assets
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` ` ` ` ` ` ` ` ` ` ` ` `
a tangIBle assets
Buildings 494,192,000 - - - 494,192,000 49,780,254 - 8,236,533 - - 58,016,787 436,175,213 444,411,746
(Previous Year) (523,563,116) - - (29,371,116) (494,192,000) (119,274,467) - (9,187,640) ((7,27,67,396)) (5,914,457) (49,780,254) (444,411,746) (404,288,649)
Leasehold Improvement - - 54,869,812 - 54,869,812 - - 9,156,893 - - 9,156,893 45,712,919 -
(Previous Year) - - - - - - - - - - - - -
Computer hardware 10,206,404 - 1,089,573 - 11,295,977 8,898,679 - 910,048 - - 9,808,727 1,487,250 1,307,725
(Previous Year) (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)
Furniture and fixtures 6,727,411 - 126,787 - 6,854,198 3,033,515 - 650,078 - - 3,683,593 3,170,605 3,693,896
(Previous Year) (6,190,800) (536,611) - - (6,727,411) (2,629,203) (184,084) (634,996) ((4,14,768)) - (3,033,515) (3,693,896) (3,561,597)
Office equipment 10,761,626 - 792,429 - 11,554,055 9,695,552 - 833,299 - - 10,528,851 1,025,204 1,066,074
(Previous Year) (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)
Vehicles 13,692,622 - 11,281,284 - 24,973,906 2,881,157 - 5,173,800 - - 8,054,957 16,918,949 10,811,465
(Previous Year) (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)
TOTAL (A) 535,580,063 - 68,159,885 - 603,739,948 74,289,157 - 24,960,651 - - 99,249,808 504,490,140 461,290,906
Previous year (549,708,102) (10,385,268) (8,714,586) (33,227,893) (535,580,063) (134,847,027) (4,391,964) (13,150,393) ((7,00,93,931)) (8,006,297) (74,289,157) (461,290,906) (414,861,075)
B IntangIBle assets (otheR then InteRnally geneRated)
Computer software 5,320,138 - 31,687 - 5,351,825 4,715,185 - 236,746 - - 4,951,932 399,893 604,953
(Previous Year) (4,530,097) (193,594) (596,447) - (5,320,138) (4,484,188) (175,109) (55,889) - - (4,715,185) (604,953) (45,909)
TOTAL (B) 5,320,138 - 31,687 - 5,351,825 4,715,185 - 236,746 - - 4,951,932 399,893 604,953
Previous year (4,530,097) (193,594) (596,447) - (5,320,138) (4,484,188) (175,109) (55,889) - - (4,715,185) (604,953) (45,909)
TOTAL (A) + (B) 540,900,201 - 68,191,572 - 609,091,773 79,004,342 - 25,197,397 - - 104,201,740 504,890,033 461,895,859
Total of previous year (554,238,199) (10,578,862) (9,311,033) (33,227,893) (540,900,201) (139,331,215) (4,567,073) (13,206,282) ((7,00,93,931)) (8,006,297) (79,004,342) (461,895,859) (414,906,984)
Note: Represent assets transferred on amalgamation (see note 23)
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 2 3
11 Investments (unquoted)(cost)
PARTICULARS AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non-CURRent poRtIon
CURRent poRtIon non-CURRent poRtIon
CURRent poRtIon
` ` ` `
Investment In eqUIty shaRes (tRade)
Subsidiary Company
IDFC Capital (Singapore) Pte. Limited 2,462,166,070 - 2,462,166,070 -
55,475,000 equity shares of SGD 1 each fully paid up
associate
IDFC Infra Debt Fund Limited (see note 26) - - 1,430,000,000 -
143,000,000 equity share of ` 10 each fully paid up
others
Aavantika Gas Limited 25,000 - 25,000 -
2,500 equity shares of ` 10 each fully paid up
Indian Oil LNG Private Limited - 40,000 - -
4,000 equity shares of ` 10 each fully paid up
Investments In ventURe capItal UnIts (non-tRade) (see note 29)
IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class C
13,700,957 - 14,183,448 -
2,550,000 (previous year 2,550,000) units of ` 10 each, ` 5.37 (previous year ` 6.51) paid up per unit, commitment restricted to ` 7.143 per unit
IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class F
6,655,827 - 7,022,696 -
728,535 (previous year 728,535) units of ` 10 each, ` 9.14 (previous year ` 9.64) paid up per unit
Investments In mUtUal fUnd UnIts (non-tRade)
IDFC Mutual Fund - Cash Fund Growth - Direct Plan 77,208.175 (previous year 134,264.951) units of ` 1,000 each fully paid up, (Net Asset Value ` 142,203,569 previous year ` 228,328,532)
- 140,300,182 - 227,760,673
TOTAL 2,482,547,854 140,340,182 3,913,397,214 227,760,673
The above investments in venture capital units are subject to restrictive covenants.
Following Companies were acquired and merged during the previous year (see note 23)
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
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
124 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
12 loans and advances (unsecured, considered good unless stated otherwise)
PARTICULARS AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non-CURRent poRtIon
CURRent poRtIon non-CURRent poRtIon
CURRent poRtIon
` ` ` `
Security deposits 84,506,089 20,000,000 59,075,089 39,000,000
Capital advance - 3,448,957 - 1,981,152
Prepaid expenses 30,094,027 39,701,417 24,416,504 40,830,469
Gratuity receivable (see note 24) - - - 3,139,753
Supplier Advance - 149,189 - 2,163,494
Balances with government authorities
Service tax credit receivable - 39,936,566 - 12,343,081
Advance payment of income tax (net of provision for tax of `1,348,427,939 (previous year `1,236,605,346))
190,387,940 - 151,210,132 -
Others 10,999,973 2,831,091 5,727,688 1,587
Less: Provision for doubtful advance - (2,267,365) - -
TOTAL 315,988,029 103,799,855 240,429,413 99,459,536
13 cash and cash eqUIvalents
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Cash on hand 5,118 31,329
Balances with banks
In current accounts (see note 26) 17,317,990 37,822,200
TOTAL 17,323,108 37,853,529
14 otheR cURRent assets (unsecured, considered good unless stated otherwise)
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Gratuity receivable (see note below) 1,254,566 -
Expenses recoverable 103,330,147 19,761,031
Less: Provision for doubtful receivables (see note 22) (74,040,762) -
TOTAL 30,543,951 19,761,031
Note: Represents amount paid by the fund but lying in the IDFC Private Equity Group Gratuity Scheme Account. The funds from the said account were received by the Company subsequent to March 31, 2016.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 2 5
15 RevenUe fRom opeRatIons
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Management fees 1,244,127,336 1,161,686,069
TOTAL 1,244,127,336 1,161,686,069
16 otheR Income
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Dividend income from current investments - 3,969,272
Interest income on bank deposits - 67,726,168
Profit on sale of current investments 11,412,228 44,730,095
Interest on income tax refund - 8,218,685
Rental Income (see note 26 and note 27) 23,632,000 -
TOTAL 35,044,228 124,644,220
17 employee BenefIt eXpenses
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Salaries and bonus (see note 20, note 26 and note 27) 520,591,909 544,658,329
Contribution to provident and other funds (see note 24) 44,071,964 27,337,601
Staff welfare expenses 9,355,449 11,541,697
TOTAL 574,019,322 583,537,627
18 fInance cost
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Interest expenses (see note 26) 54,705,824 72,238,657
Other borrowing costs - 575,000
Interest tax 154,982 557
TOTAL 54,860,806 72,814,214
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
126 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
19 otheR eXpenses
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Rent (see note 27) 31,726,170 1,227,000
Rates and taxes (see note 26) 1,759,812 1,784,964
Repairs and maintenance
Equipment - 10,270
Others (see note 26) 6,822,424 1,706,601
Insurance charges 1,787,211 2,554,230
Travelling and conveyance (see note 20) 27,399,535 40,968,901
Realised loss on foreign currency transactions 74,753 62,139
Printing and stationery 1,190,915 1,431,564
Postage, telephone and fax 2,854,641 1,838,260
Advertisement and publicity (see note 20) 25,636,138 35,009,453
Professional fees (see note 20) 121,145,646 100,512,423
Directors’ fees (see note 20) 3,050,000 160,000
Auditors’ remuneration (see note (a) below) 1,581,403 1,769,108
Shared service cost (see note (b) below and see note 26) 5,735,381 9,769,811
Fund organisational expenses (see note 22) 82,764,955 -
Brokerage paid 43,000 164,700
Distribution fees 26,887,906 64,538,801
CSR expenditure (see note 26) 6,800,000 6,228,521
Loss on sale of fixed assets - 22,988,231
Miscellaneous expenses (see note 20 and note 26) 15,026,276 9,085,627
TOTAL 362,286,166 301,810,604
(a) Break up of auditors’ remuneration:
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Audit fees 750,000 750,000
Tax audit fees 175,000 175,000
Other services 652,009 835,000
Out of pocket expenses 4,394 6,018
Service tax 93,853 82,320
TOTAL 1,675,256 1,848,338
Less: Service tax set off claimed 93,853 79,230
TOTAL 1,581,403 1,769,108
(b) Shared service cost of ` 3,852,731 (previous year ` 9,769,811) represents cost allocated by the Ultimate Holding Company under a service level agreement and `1,882,650 (previous year `Nil) represents cost allocated by IDFC Bank Limited,a fellow subsidiary under a service level agreement dated March 21, 2016.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 2 7
20 eXpendItURe In foReIgn cURRency (on payment basis)
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Travelling expenses 1,285,421 1,121,209
Professional fees - 1,896,658
Director sitting fees - 55,280
Others 12,641,431 11,374,880
21 eaRnIngs In foReIgn cURRencIesThere are no earnings in foreign currencies.
22 The Company has been actively engaged in raising new international funds in Private Equity and Real Estate space since last year. Given that currently the international fund raising environment is challenging, no firm commitments have been received till March 31, 2016. Accordingly Fund set-up expenses recoverable of `74,040,762 have been provided in FY 2015-16.
23 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’), had been amalgamated with the Company (Transferee Company), upon which the entire business, including all assets and liabilities of the Transferor Companies stood transferred to and vested in the Transferee Company. The amalgamation had been accounted under the pooling of interest method and the assets and liabilities transferred had 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 had 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 had 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.
24 employee BenefItsIn accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of Companies Act, 2013, the following disclosures have been made:
The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Provident fund 17,278,528 12,040,249
Pension fund 4,397,125 3,509,560
Superannuation fund 2,001,386 1,910,116
Labour welfare fund 1,776 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
128 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
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:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
change In the defIned BenefIt oBlIgatIons:
Liability at the beginning of the year 67,039,729 32,937,687
Current service cost 10,392,916 7,399,742
Interest cost 5,848,706 4,536,066
Benefits paid (7,399,340) (10,301,968)
Actuarial loss 3,717,190 4,296,876
Liability assumed on acquisition 1,168,042 28,171,326
Liability at the end of the year 80,767,243 67,039,729
faIR valUe of plan assets:
Fair value of plan assets at the beginning of the year 70,179,482 31,160,442
Expected return on plan assets 6,283,391 3,566,170
Contributions - 14,793,340
Benefits paid (7,399,340) (10,301,968)
Assets assumed on acquisition - 26,316,690
Actuarial gain / (loss) on plan assets (5,549,686) 4,644,808
Fair value of plan assets at the end of the year 63,513,847 70,179,482
TOTAL ACTUARIAL LOSS/(GAIN) TO BE RECOGNISED 9,266,876 (347,932)
actUal RetURn on plan assets:
Expected return on plan assets 6,283,391 3,566,170
Actuarial gain / (loss) on plan assets (5,549,686) 4,644,808
Actual return on plan assets 733,705 8,210,978
amoUnt RecognIsed In the Balance sheet:
Liability at the end of the year 80,767,243 67,039,729
Fair value of plan assets at the end of the year 63,513,847 70,179,482
Amount recognised in the Balance Sheet under “Short-term loans and advances”-Gratuity receivable / “Other current liabilities”-Payable to Employee Benefit Funds
17,253,396 (3,139,753)
eXpense RecognIsed In the statement of pRofIt and loss:
Current service cost 10,392,916 7,399,742
Interest cost 5,848,706 4,536,066
Expected return on plan assets ( 6,283,391) ( 3,566,170)
Net actuarial loss to be recognised 9,266,876 (347,932)
Losses on acquisition 1,168,042 1,854,636
Expense recognised in the Statement of Profit and Loss under “Employee benefit expenses” 20,393,149 9,876,342
ReconcIlIatIon of the lIaBIlIty RecognIsed In the Balance sheet:
Opening net liability (3,139,753) 1,777,245
Expense recognised 20,393,149 9,876,342
Contribution by the Company - (14,793,340)
Amount recognised in the Balance Sheet under “Short-term loans and advances”-Gratuity receivable / “Other current liabilities”-Payable to Employee Benefit Funds
17,253,396 (3,139,753)
ExPECTED EMPLOYER’S CONTRIBUTION FOR THE NExT YEAR 10,000,000 7,000,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 2 9
experience adjustments:
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2013 MARCH 31, 2012
IN `
Defined benefit obligation 80,767,243 67,039,729 32,937,687 22,759,846 15,133,437
Plan assets 63,513,847 70,179,482 31,160,442 22,759,846 -
Surplus / (deficit) (17,253,396) 3,139,753 (1,777,245) - (15,133,437)
Experience adjustment on plan liabilities
3,717,190 (818,432) 4,355,447 2,298,723 (618,889)
Experience adjustment on plan assets (5,549,686) 4,644,808 (602,656) - -
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
% %
Investment patteRn:
Insurer managed funds
Government securities 45.48 41.56
Deposit and money market securities 7.06 4.33
Debentures / bonds 47.46 54.11
pRIncIpal assUmptIons:
Discount rate (per annum) 7.95 7.95
Expected rate of return on assets (per annum) 9.00 9.00
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.
25 segment RepoRtIngThe Company’s Primary Segments are selected based on the principal business carried out. The Company’s main business is Investment Management and providing Advisory Services. All other activities revolve around the main business. The risk and return of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segments.
26 Related paRty dIsclosUResIn accordance with the Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
I Ultimate holding Company:
IDFC Limited (w.e.f. July 09, 2015)
II holding Company:
IDFC Limited (upto July 08, 2015)
IDFC Financial Holiding Company Limited (w.e.f. July 09, 2015)
III Subsidiary Company
IDFC Capital (Singapore) Pte. Limited
IV associate
IDFC Infra Debt Fund Limited (from August 28, 2014 upto August 19, 2015)
V Fellow Subsidiary Company
IDFC Foundation
IDFC Bank Limited
VI key management personal
Mr. M. K. Sinha - Managing Partner & Chief Executive Officer (w.e.f. October 1, 2014)
Mr. Satish Mandhana - Managing Partner & Chief Investment Officer
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
130 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
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
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
(I) UltImate holdIng company
IDFC Limited Shared services cost 928,306 -
Interest expenses 3,206,303 -
Rental Income 5,908,000 -
Office Maintenance (Received) 168,000 -
Property Tax (Received) 504,000 -
Inter corporate deposits taken 50,000,000 -
Inter corporate deposits repaid 1,550,000,000 -
Purchase of Assets 4,189,596 -
(II) holdIng company
IDFC Limited Shared services cost 2,924,425 9,769,811
Interest expenses 34,839,042 72,238,357
Interest accrued on inter corporate deposits - 2,589,041
Issuance of equity shares - 1,999,983,750
Inter corporate deposits taken 1,500,000,000 2,950,000,000
Inter corporate deposits repaid 1,500,000,000 1,450,000,000
Inter corporate deposits outstanding - 1,500,000,000
Purchase of Investment - 2,130,000,000
IDFC Financial Holding Company Limited Interest expenses 16,660,479 -
Inter corporate deposits taken 1,557,500,000 -
Inter corporate deposits repaid 1,557,500,000 -
Sale of Equity Investment in IDFC Infra Debt Fund Limited
1,430,000,000 -
(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 6,800,000 6,228,521
IDFC Bank Limited Rental Income 17,724,000 -
Office Maintenance (Received) 504,000 -
Property Tax (Received) 1,512,000 -
Security Deposit Received 17,724,000 -
Shared services cost 1,882,650 -
Bank Charges (Paid) 46,028 -
Balance with Bank in current account 15,166,875 -
(v) Key management peRsonal
Mr. M. K. Sinha Remuneration paid 68,197,035 48,509,977
Mr. Satish Mandhana Remuneration paid 40,402,929 44,342,394
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A LT E R N AT I V E S L I M I T E D | 1 3 1
27 lease dIsclosUReIn accordance with the Accounting Standard 19 on ‘Leases’ as specified u/s 133 of Companies Act, 2013, the following disclosures in respect of operating leases are made:
The Company has taken vehicles for certain employees under operating leases, which expires between May 2016 to August 2016 (previous year May 2015 to August 2016). Salaries include gross rental expenses of ` 1,519,007 (previous year ` 1,804,155).
The committed lease rentals in the future are:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Not later than one year 202,265 1,147,953
Later than one year and not later than five years - 32,817
The Company has taken premises under operating leases, which expires between September 2016 to May 2020 (previous year August 2015 to May 2020).
The committed lease rentals in the future are:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Not later than one year 37,139,403 29,854,775
Later than one year and not later than five years 112,356,554 135,340,491
Later than five years - 5,597,350
The Company has given premises under operating lease, which expires between October 1, 2015 to September 30, 2020 (previous year Nil).
The committed lease rentals in the future are:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Not later than one year 35,448,000 -
Later than one year and not later than five years 124,068,000 -
Later than five years - -
28 eaRnIngs peR shaReIn accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013, the earning per share has been computed as under:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Net profit after tax for the year 146,137,873 227,202,335
Weighted average number of equity shares 219,850 144,930
Par value per share 10 10
Earnings per share - Basic 664.72 1,567.67
Earnings per share - Diluted 664.72 1,567.67
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
132 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
29 pRovIsIon and contIngencIes(a) Contingent liabilities and commitments
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
commItments
Uncalled liability on shares and other investments partly paid 585,454 585,454
585,454 585,454
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.
30 pRIoR yeaRs 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 ofIDFC alternatives limited
Vikram limaye Sunil kakar
Director Director
manish Jindal
Mumbai, April 28, 2016 Chief Financial Officer
Mr. Vikram Limaye
Dr. Rajeev Uberoi
Mr. Rajesh Hemnani
Deloitte & Touche LLP
Hongkong and Shanghai
Banking Corporation
One Finlayson Green #16-02
Singapore 049246
tel +65 6499 0700
Fax +65 65363359
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc capItal (sIngapoRe) pte. lImIted
134 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
DIRECTORS’ STATEMENT
The directors present their statement together with the audited financial statements of IDFC Capital (Singapore) Pte. Ltd. (the “Company”) for the financial year ended March 31, 2016.
In the opinion of the directors, the financial statements of the Company so as to give a true and fair view of the financial position of the Company as at March 31, 2016 and the financial performance, changes in equity and cash flows of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.
1. DIReCtoRS
The directors of the Company in office at the date of this report are:
Dr. Rajeev Uberoi
Mr. Vikram Mukund Limaye (Appointed on July 07, 2015)
Mr. Rajesh Hemnani (Appointed on March 31, 2016)
2. aRRangementS to enaBle DIReCtoRS to aCqUIRe BeneFItS By meanS oF the aCqUISItIon oF ShaReS anD DeBentUReS
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate, except for the options mentioned in paragraph 3 of the Directors’ statement.
3. DIReCtoRS’ InteReStS In ShaReS anD DeBentUReS
The directors of the Company holding office at the end of the financial year had no interests in the share capital and debentures of the Company and related corporations as recorded in the register of directors’ shareholdings kept by the Company under section 164 of the Singapore Companies Act except as follows:
name of dIRectoRs and companIes In whIch InteRests aRe held
oRdInaRy shaRes
shaReholdIngs RegIsteRedIn name of dIRectoR
shaReholdIngs In whIch dIRectoRsaRe deemed to have an InteRest
at BegInnIng of yeaR, oR date of
appoIntment, If lateR
at endof yeaR
at BegInnIng of yeaR, oR date of
appoIntment, If lateR
at endof yeaR
Ultimate holding company - IDFC Limited
Dr. Rajeev Uberoi 150,000 132,704 – –
Mr. Vikram Mukund Limaye 2,043,728 2,043,728 – –
4. ShaRe optIonS
(a) Options to take up unissued shares
During the financial year, no options to take up unissued shares of the Company were granted.
(b) Options exercised
During the financial year, there were no shares of the Company issued by virtue of the exercise of an option to take up unissued shares.
(c) Unissued shares under option
At the end of the financial year, there were no unissued shares of the Company under options.
5. aUDItoRS
The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.
ON BEHALF OF THE DIRECTORS
Rajeev Uberoi Rajesh hemnani Director Director
April 21, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 3 5
to the memBeR of Idfc capItal (sIngapoRe) pte. ltd.
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC Capital (Singapore) Pte. Ltd. (the “Company”) which comprise the statement of financial position as at March 31, 2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 6 to 29.
management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that gives a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.
auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, 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 entity’s preparation of 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 the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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.
opinion
In our opinion, the financial statements of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the financial position of the Company as at March 31, 2016 and the financial performance, changes in equity and cash flows of the Company for the year ended on that date.
Report on other legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.
Public Accountants and Chartered Accountants
Singapore
April 21, 2016
INDEPENDENT AUDITORS' REPORT
136 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
NOTES 2016 2015
US$ US$
assets
Current assets
Cash and cash equivalents 7 9,486,052 8,085,845
Trade and other receivables 8 416,186 128,372
TOTAL CURRENT ASSETS 9,902,238 8,214,217
Non-current assets
Investment in associate 9 20,661,569 22,706,966
Plant and equipment 10 40,842 45,291
TOTAL NON-CURRENT ASSETS 20,702,411 22,752,257
TOTAL ASSETS 30,604,649 30,966,474
lIaBIlIty and net eqUIty
Current liability
Trade and other payables 11 54,345 37,104
Capital and reserves
Share capital 12 42,507,538 42,507,538
Accumulated losses (11,957,234) (11,578,168)
Net equity 30,550,304 30,929,370
TOTAL LIABILITY AND NET EQUITY 30,604,649 30,966,474
See accompanying notes to financial statements.
STATEMENT OF FINANCIAL POSITION MARCH 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 3 7
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIvE INCOME YEAR ENDED MARCH 31, 2016
NOTES 2016 2015
US$ US$
RevenUe 13 1,200,000 1,282,588
Other operating income 14 (485,568) 552,570
Staff costs 15 (672,022) (390,452)
Professional fees (64,304) (49,074)
Depreciation expense 10 (9,237) (12,593)
Other operating expenses 16 (347,935) (1,018,191)
(loss) profit before income tax (379,066) 364,848
Income tax 17 - -
NET (LOSS) PROFIT FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE (LOSS) INCOME FOR THE YEAR
(379,066) 364,848
See accompanying notes to financial statements.
138 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
SHARE CAPITAL ACCUMULATED TOTAL
US$ (LOSSES) US$ US$
Balance at April 1, 2014 13,179,761 (11,943,016) 1,236,745
Transactions with owners, recognised directly in equity
Issue of share capital 29,327,777 - 29,327,777
Net profit for the year, representing total comprehensive income for the year
- 364,848 364,848
Balance at March 31, 2015 42,507,538 (11,578,168) 30,929,370
Net loss for the year, representing total comprehensive loss for the year
- (379,066) (379,066)
BALANCE AT MARCH 31, 2016 42,507,538 (11,957,234) 30,550,304
See accompanying notes to financial statements.
STATEMENT OF CHANGES IN EqUITy YEAR ENDED MARCH 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 3 9
2016 2015
US$ US$
opeRatIng actIvItIes
(Loss) Profit before income tax (379,066) 364,848
adjustments for:
Write-back (Allowance) for impairment of investment in associate. (238,417) 238,417
Depreciation expense 9,237 12,593
Interest income (18,275) (9,932)
Write-down of other receivables 41,188 -
Operating cash flows before movements in working capital (585,333) 605,926
Trade and other receivables (329,002) 26,773
Trade and other payables 17,241 (285,125)
net cash (used in) generated from operating activities (897,094) 347,574
InvestIng actIvItIes
Interest received 18,275 9,932
Purchase of plant and equipment (4,788) (5,055)
Distributions (purchase) of investment in associate 2,283,814 (22,945,383)
net cash from (used in) investing activities 2,297,301 (22,940,506)
fInancIng actIvIty
proceeds from issuance of shares, representing net cash from financing activity - 29,327,777
Net increase in cash and cash equivalents 1,400,207 6,734,845
Cash and cash equivalents at beginning of the year 8,085,845 1,351,000
Cash and cash equivalents at end of the year 9,486,052 8,085,845
See accompanying notes to financial statements.
STATEMENT OF CASH FLOwS YEAR ENDED MARCH 31, 2016
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
140 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01 geneRalThe Company (Registration No. 200800200R) is incorporated in Singapore with its registered office and principal place of business at One Finlayson Green #16-02, Singapore 049246. The financial statements are expressed in United States dollars.
The principal activity of the Company is to establish funds, act as advisor and manager of funds, and to provide advice in relation to the setting up of funds.
The financial statements of the Company for the year ended March 31, 2016 were authorised for issue by the Board of Directors on April 21, 2016.
02 sUmmaRy of sIgnIfIcant accoUntIng polIcIes
BasIs of accoUntIng
The financial statements are prepared in accordance with the historical cost basis except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of FRS 102 Share-based Payment, and measurements that have some similarities to fair value but are not fair value, such as value in use in FRS 36 Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows:
¡ Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
¡ Level 2 inputs are inputs, other than the quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
¡ Level 3 inputs are unobservable inputs for the asset or liability.
adoptIon of new and RevIsed standaRds
On April 1, 2015, the Company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Company’s accounting policies and has no material effect on the amounts reported for the current or prior years.
At the date of authorisation of these financial statements, the following FRSs and amendments to FRS that are relevant to the Company were issued but not effective:
¡ FRS 109 Financial Instruments3
¡ FRS 115 Revenue from Contracts with Customers3
¡ Amendments to FRS 1 Presentation of Financial Statements: Disclosure Initiative1
¡ Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative2
¡ Improvements to Financial Reporting Standards (November 2014)1
1 Applies to annual periods beginning on or after January 1, 2016, with early application permitted.
2 Applies to annual periods beginning on or after January 1, 2017, with early application permitted.
3 Applies to annual periods beginning on or after January 1, 2018, with early application permitted.
Consequential amendments were also made to various standards as a result of these new/revised standards.
The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material impact on the financial statements of the Company in the period of their initial adoption.
Investments In assocIate
An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 4 1
The equity method of accounting has not been adopted for the investment in associate in the Company’s financial statements as the Company itself is a fully owned subsidiary of IDFC Limited which presents publicly available consolidated financial statements.
The investment in associate is stated at cost less allowance for impairment with the allowance being the difference between the carrying amount less the net asset value of the Associate, as reduced by distribution of capital invested.
fInancIal InstRUment
Financial assets and financial liabilities are recognised on the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
effective interest rate method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest rate basis for debt instruments.
fInancIal assets
loans and receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans and receivables”. Loans and receivable are measured at amortised cost using the effective interest method less impairment. Interest is recognised by applying the effective interest method, except for short-term receivables when the effect of discounting is immaterial.
Impairment of financial assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been impacted.
For available-for-sale equity instruments, a significant or prolonged decline in the fair value of the investment below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:
¡ significant financial difficulty of the issuer or counterparty; or
¡ default or delinquency in interest or principal payments; or
¡ it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
deRecognItIon of fInancIal assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
fInancIal lIaBIlItIes and eqUIty InstRUments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
142 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
eqUIty InstRUments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
fInancIal lIaBIlItIes
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest method, with interest expense recognised on an effective yield basis.
deRecognItIon of fInancIal lIaBIlItIes
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.
offsettIng aRRangements
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company and the group has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.
plant and eqUIpment
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost of assets, using the written down value method, on the following bases:
Leasehold improvements - 33.33% or 36 months
Computers - 40.00%
Office equipment - 13.91%
Furniture and fittings - 18.10%
Fully depreciated assets still in use are retained in the financial statements.
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.
The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
ImpaIRment of non-fInancIal assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
pRovIsIons
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 4 3
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
RevenUe RecognItIon
Revenue is measured at the fair value of the consideration, received or receivable. Revenue is recognised as follows:
fee Income
Management fee income is recognised over the period the services are rendered based on the applicable terms as agreed with the fund company.
dIstRIBUtIons fRom assocIate
Dividend income and distributions are recognised when declared by the Associate.
RetIRement BenefIt costs
Payments to defined contribution retirement benefit plans are charged as an expense when employees have rendered the services entitling them to the contributions. Payments made to state-managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the Company’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.
employee leave entItlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.
Income taX
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The Company’s liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on the differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss.
foReIgn cURRency tRansactIons and tRanslatIon
The financial statements of the Company are measured and presented in the currency of the primary economic environment in which the entity operates (its functional currency). The financial statements of the Company are presented in United States dollars, which is the functional currency of the Company.
Transactions in currencies other than the Company’s functional currency are recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of each reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or
loss for the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit
or loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses
are recognised in other comprehensive income. For such non-monetary items, any exchange component of that gain or loss is also
recognised in other comprehensive income.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
144 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
cash and cash eqUIvalents In the statement of cash flows
Cash and cash equivalents in the statement of cash flows comprise cash on hand and demand deposits and other short-term highly
liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
03 cRItIcal accoUntIng JUdgements and Key soURces of estImatIon UnceRtaInty
In the application of the Company’s accounting policies, which are described in Note 2, management is required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
(i) Critical judgements in applying the Company’s accounting policies
The management is of the opinion that there are no instances of application of judgements which are expected to have a significant
effect on the amounts recognised in the financial statements.
(ii) key sources of estimation uncertainty
The management is of the opinion that there are no key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year, except as follows:
ImpaIRment of Investment In assocIate
The investment held in associate has been accounted at cost less net asset value, if any, of the associate. Net asset value is the amount
recoverable based on the financial statements of the associate. The Company uses its judgement to ensure that investment amount
adjusted to net asset value is recoverable and appropriate.
04 fInancIal InstRUments, fInancIal RIsKs and capItal RIsKs management
(a) CategoRIeS oF FInanCIal InStRUmentS
The following table sets out the financial instruments as at the end of the reporting period:
2016 2015
US$ US$
fInancIal assets
Loans and receivables (including cash and bank balances) 9,864,840 8,161,298
fInancIal lIaBIlItIes
At amortised cost 54,345 37,104
At the end of reporting period, the Company does not have any financial instruments subject to offsetting, enforceable master
netting arrangements or similar agreements.
(b) CReDIt RISk
Credit risk refers to the risk that debtors will default on their obligations to repay the amount owing to the Company, resulting in a
loss to the Company. The Company has adopted a stringent procedure in extending credit terms to its customers and in monitoring
its credit risk.
The Company does not have any significant credit risk exposure as at the end of the reporting period. The Company places its cash
with creditworthy financial institutions.
The maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as at the end of the
reporting period is the carrying amount of the financial assets as stated in the statement of financial position.
(c) InteReSt Rate RISk
The Company does not have any significant interest bearing assets and liabilities except fixed deposits. Management is of the view that given the current low interest rates, it is not exposed to significant interest rate risk, and accordingly sensitivity analysis is not disclosed.
(d) FoReIgn CURRenCy RISk
The Company’s foreign currency exposures arise mainly from the exchange rate movements of the Singapore dollar against the United States dollar.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 4 5
At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the Company’s functional currency are as follows:
2016 2015
SIngapoRe DollaR / US$ SIngapoRe DollaR / US$
assets
Cash and cash equivalents 121,397 6,159,876
Trade and other receivables 164,139 45,833
TOTAL 285,536 6,205,709
lIaBIlItIes
Trade and other payables 54,344 32,721
net currency exposure 231,192 6,172,988
Foreign currency sensitivity
The following table details the sensitivity to a 9% (2015: 13%) increase and decrease in the relevant foreign currencies against the functional currency of the Company. 9% (2015: 13%) is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates.
If the relevant foreign currency weakens by 9% (2015: 13%) against the functional currency of the Company, loss will increase (decrease) by:
SIngapoRe DollaR ImpaCt
2016 US$
2015 US$
loss 20,807 802,488
In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk as the year end exposure does not reflect the exposure during the year.
(e) lIqUIDIty RISk
The Company maintains sufficient cash and bank balances to fund its daily operating requirement. In addition, the Company also relies on the holding company to fund any shortfall in liquidity requirements.
All financial assets and financial liabilities in 2015 and 2016 are repayable on demand or due within 1 year from the end of the reporting period.
(f) FaIR ValUeS oF FInanCIal aSSetS anD FInanCIal lIaBIlItIeS
Management considers that the carrying amounts of cash and cash equivalents, trade and other receivables and trade and other payables that are carried at amortised cost approximate their respective fair values due to the relatively short-term maturity of these financial instruments. The Company does not have financial assets/liabilities that are carried at fair values on a recurring basis.
(g) CapItal RISk
The Company reviews its capital structure at least annually to ensure that it will be able to continue as a going concern. The capital structure of the Company comprises of issued share capital net of accumulated losses.
The Company is required to maintain a minimum amount of capital as prescribed under the Securities and Futures Act (Chapter 289) and relevant Regulations. The Company is in compliance with the capital requirements for the years ended March 31, 2016 and March 31, 2015.
There were no changes to the Company’s overall strategy during the year.
05 holdIng company and Related company tRansactIons
The Company was a wholly-owned subsidiary of IDFC Securities Ltd. India. The Company’s ultimate holding company is IDFC Limited,
incorporated in India. Related companies in these financial statements refer to members of the ultimate holding company’s group of
companies.
The Company has vide Directors Resolution in Writing dated March 27, 2015 approved the transfer of whole of the shareholding from
IDFC Securities Ltd., India to IDFC Alternatives Ltd., India, which is in turn a wholly owned subsidiary of IDFC Financial Holding Company
Ltd., India, and the ultimate holding company continues to be IDFC Ltd. The Company has updated the shareholder records with the
Accounting and Corporate Regulatory Authority.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
146 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Some of the Company’s transactions and arrangements are between members of the group and the effect of these on the basis
determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest-free and
repayable on demand unless otherwise stated.
During the year, the Company has entered into the following transactions with its related companies:
2016 2015
US$ US$
Purchase of investment from related company - 22,368,000
Recharges to a related company 44,928 51,025
06 otheR Related paRty tRansactIons
Some of the Company’s transactions and arrangements are with related parties and the effect of these on the basis determined between
the parties is reflected in these financial statements. The balances are unsecured, interest-free and repayable on demand unless
otherwise stated.
During the year, the Company has entered into the following transactions with its related parties:
2016 2015
US$ US$
Management fee earned from a related party 1,200,000 1,282,588
Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year was as follows:
2016 2015
US$ US$
Short-term benefits 302,305 157,019
The figures for 2016 and 2015 do not include any remuneration attributable to the key management from the bonus pool that has been
accrued for in the financial statements as the allocation is yet to be determined.
07 cash and cash eqUIvalents
2016 2015
US$ US$
Cash and bank balances 2,386,052 7,285,845
Fixed deposits 7,100,000 800,000
TOTAL CASH AND CASH EQUIVALENTS 9,486,052 8,085,845
The fixed deposit bears interest at an average rate of 0.34% (2015 : 1.25%) per annum and matures within six months (2015 : six months)
from the end of year. The fixed deposits are readily convertible into cash with insignificant risk of changes in value and hence are
included in cash and cash equivalents.
08 tRade and otheR ReceIvaBles
2016 2015
US$ US$
Trade receivables from a related company (Note 5) 4,297 4,186
Recoverables from related parties (Note 6) 319,974 14,982
Prepayments 37,398 52,919
Deposits 46,420 45,801
Others 8,097 10,484
TOTAL 416,186 128,372
Recoverables from related parties relate to administrative expenses paid on behalf of related party funds which will be recovered from India Infrastructure Fund (Singapore) Pte Ltd. The average credit period is 30 days (2015 : 30 days). At year-end, there were no balances which were past due and no impairment allowance was made.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 4 7
09 Investments In assocIate
2016 2015
US$ US$
Cost of investment in associate 22,706,966 22,368,000
Net (Distribution) drawdown during the year (2,283,814) 577,383
Write-back (Allowance) for impairment 238,417 (238,417)
TOTAL 20,661,569 22,706,966
Details of the Company’s associate at year end is as follows:
NAME OF ASSOCIATE
plaCe oF InCoRpoRatIon
eFFeCtIVe oWneRShIp anD VotIng poWeR
pRInCIpal aCtIVIty
2016 % 2015 %
Emerging Markets Private Equity Fund LP Guernsey 43.28 43.28 Private equity fund
In November 2014, the Company acquired a 46.15% stake in Emerging Markets Private Equity Fund from a related company at a value of US$22,368,000 with a commitment of US$30,000,000 and an effective commitment for investment of US$26,705,585 resulting in effective ownership of 43.28%.
10 plant and eqUIpment
NAME OF ASSOCIATE
leaSeholD ImpRoVementS
CompUteRS oFFICe eqUIpment
FURnItURe anD FIttIngS
total
US$ US$ US$ US$ US$
Cost:
At April 1, 2014 148,219 93,486 33,844 63,366 338,915
Additions - 3,210 161 1,684 5,055
At March 31, 2015 148,219 96,696 34,005 65,050 343,970
Additions - 4,067 721 - 4,788
At March 31, 2016 148,219 100,763 34,726 65,050 348,758
accumulated depreciation:
At April 1, 2014 148,219 80,458 14,104 43,305 286,086
Depreciation - 5,996 2,763 3,834 12,593
At March 31, 2015 148,219 86,454 16,867 47,139 298,679
Depreciation - 3,936 2,315 2,986 9,237
At March 31, 2016 148,219 90,390 19,182 50,125 307,916
Carrying amount:
At March 31, 2016 - 10,373 15,544 14,925 40,842
At March 31, 2015 - 10,242 17,138 17,911 45,291
11 tRade and otheR payaBles
2016 2015
US$ US$
Accruals and others 54,345 37,104
TOTAL 54,345 37,104
Accrued expenses principally comprise amounts outstanding for ongoing costs.
12 shaRe capItal
2016 2015 2016 2015
nUmBeR oF oRDInaRy ShaReS US$ US$
Issued and paid up:
At the beginning of the year 55,475,000 17,475,000 42,507,538 13,179,761
Issued for cash - 38,000,000 - 29,327,777
at the end of the year 55,475,000 55,475,000 42,507,538 42,507,538
Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the Company.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
148 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
13 RevenUe
2016 2015
US$ US$
Management fee income from a related party (Note 6) 1,200,000 1,282,588
14 otheR (losses) Income
2016 2015
US$ US$
Net foreign exchange gain 23,815 -
(Reversal of) Dividend received from an associate (532,589) 532,589
Recharges to a related company 3,696 5,037
Interest income 18,275 9,932
Government grant 1,235 5,012
(485,568) 552,570
15 staff costs
2016 2015
US$ US$
Included in staff costs are:
Costs of defined contribution plans 30,912 22,521
16 otheR opeRatIng eXpenses
2016 2015
US$ US$
Rental and related expenses 180,777 195,291
Travelling expenses 22,094 86,447
Corporate communication expense 1,880 1,457
Net foreign exchange loss - 633,012
Write down of other receivables 41,188 -
General administrative expenses 101,996 101,984
TOTAL 347,935 1,018,191
17 Income taXThe income tax benefit varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2015 : 17%) to profit before income tax as a result of the following differences:
2016 2015
US$ US$
(Loss) Profit before income tax (379,066) 364,848
Tax (benefit) charge at the statutory tax rate of 17% (2015 : 17%) (64,441) 62,024
Effects of expenses that are not deductible in determining taxable profit - 40,531
Tax losses not recognised as deferred tax assets 64,441 -
Effect of utilisation of tax losses not previously recognised as deferred tax assets - (102,555)
TOTAL - -
Subject to the agreement by the tax authorities, at the end of the reporting period, the Company has unutilised tax losses of US$10,027,787 (2015: US$9,062,681) available for offset against future profit. Deferred tax asset of US$1,704,724 (2015 : US$1,540,656) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 4 9
18 opeRatIng lease commItments
a) operating lease commitments
2016 2015
US$ US$
Minimum lease payments under operating leases 172,030 184,759
At the end of the reporting year, the Company has outstanding commitments under non-cancellable operating leases, which fall due as follows:
2016 2015
US$ US$
Within one year 171,616 183,951
In the second to fifth years inclusive 3,446 187,644
Operating lease payments represent rentals payable by the Company for rental of office premises and equipment. Leases are negotiated for an average term of two years, with an option to renew for another one year subject to terms and conditions then prevailing.
b) The Company has a commitment to inject capital to its associate amounting to US$6,343,718.
U65990MH2002PLC137533
Mr. Sunil Kakar (Chairperson)
Dr. Rajeev Uberoi
Mr. Mahendra N. Shah
Deloitte Haskins & Sells LLP
Chartered Accountants
IDFC Bank Limited
Naman Chambers
C-32, G-Block, Bandra-Kurla
Complex, Bandra (East)
Mumbai 400 051
tel +91 22 4222 2000
Fax + 91 22 2654 0354
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc tRUstee company lImIted
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 5 1
to the memBeRs
Your Directors have pleasure in presenting the Fourteenth Annual Report together with the audited financial statements for the year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
paRtIcUlaRs foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
Total Income 8,404,474 7,500,000
Less: Total Expenses 328,927 261,094
Profit before Tax 8,075,547 7,238,906
Less: Provision for Tax 2,498,000 2,233,304
profit after tax 5,577,547 5,005,602
company’s affaIRs
The main object of the Company is to act as trustee for various investment funds under the private equity business primarily established by IDFC Limited and its subsidiaries.
The Company continues to act as the trustee of India Infrastructure Fund, IDFC Infrastructure Fund 2 – IDFC Private Equity Fund II, IDFC Infrastructure Fund 3 – IDFC Private Equity Fund III, IDFC Project Equity Domestic Investors Trust – I, IDFC Project Equity Domestic Investors Trust – II, India Infrastructure Fund II, IDFC Real Estate Yield Fund, IDFC Private Equity Employee Benefit Trust.
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.
dIvIdend
The Directors do not recommend any dividend for the financial year ended March 31, 2016 as the Company has decided to reinvest its earnings.
paRtIcUlaRs of employees
The Company does not have any employee.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.
foReIgn eXchange eaRnIngs and eXpendItURe
There was no income or expenditure in foreign currency during the year under review.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRs
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. Rajeev Uberoi would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Dr. Rajeev Uberoi at the ensuing AGM.
Mr. Mahendra N Shah was appointed as an Additional Director w.e.f. November 30, 2015 and it is proposed to confirm his appointment at the ensuing AGM. Mr. S B Mathur resigned as a Director w.e.f. November, 30 2015. The Board places on record its sincere appreciation for the valuable services rendered by Mr. Mathur during his tenure as a Director of the Company.
meetIngs of the BoaRd
During the year, four Board meetings were convened and held. The gap between the two meetings was within the limit prescribed under the Companies Act, 2013. The composition of Board is in compliance with the Companies Act, 2013. The dates of the meetings were: April 23, 2015, July 27, 2015, October 29, 2015 and January 29, 2016. Attendance details of the Board Meeting are given in the below table.
BOARD'S REPORT
152 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
attenDanCe DetaIlS oF BoaRD oF DIReCtoRS FoR Fy16
name of the memBeR dIn posItIon no. of meetIngs held
no. of meetIngs attended
Mr. Sunil Kakar1 03055561 Chairperson & Non-Executive Director 3 3
Dr. Rajeev Uberoi 01731829 Non-Executive Director 4 4
Mr. Mahendra N. Shah2 00124629 Non-Executive Director 1 1
Dr. Rajiv B. Lall3 00131782 Non-Executive Director 2 1
Mr. S. B. Mathur4 00013239 Chairperson & Independent Director 3 2
1 Appointed as an Additional Director w.e.f. July 27, 2015 3 Resigned from the Board w.e.f. July 27, 20152 Appointed as an Additional Director w.e.f. November 30, 2015 4 Resigned from the Board w.e.f. November 30, 2015
aUdItoRs
The Shareholders of the Company at their meeting held on September 29, 2014 had approved the appointment of Deloitte Haskins & Sells, Ahmedabad, Chartered Accountants, (Registration No. 117365W) Statutory Auditors for a period of 5 years to hold office from the conclusion of the Twelfth Annual General Meeting up to the conclusion of the Seventeenth Annual General Meeting of the Company.
The Board recommends the ratification of appointment of Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of the Company.
Related paRty tRansactIons
The Company has in place the policy on Related Party Transactions (“Rpt”) and the same has been uploaded on the website of the Company. Since all RPTs entered into by the Company were in ordinary course of business and were on arm’s length basis, Form AOC-2 is not applicable to the Company.
InteRnal contRol systems
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
RIsK management
The Board members ensures control of risk factors and advice on the same to the Management of the Company.
mateRIal changes/ commItments
As per Section 134(3)(I) of the Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
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.
aUdItoR’s RepoRt
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
eXtRact of annUal RetURn
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as annexure I.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) such accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit and loss of the
BOARD'S REPORT
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 5 3
Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual financial statements have been prepared on a going concern basis; and
(e) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
acKnowledgements
The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and IDFC Financial Holding Company Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
Sunil kakarChairperson
Mumbai, June 25, 2016
BOARD'S REPORT
154 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
As on the financial year ended on March 31, 2016
[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 U65990MH2002PLC137533
ii) Registration Date 11/10/2002
iii) Name of the Company IDFC TRUSTEE COMPANY LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares
Indian Non-Government Company
v) Address of the Registered office and contact details 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. The Company is in process of changing Registrar & Transfer Agent (RTA).
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. Act as Trustee for various investment funds under the Private Equity business.
6619 100%
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company
cIn/gln holdIng/ sUBsIdIaRy/assocIate % of shaRes held
applIcaBle sectIon
1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Company 100% Section 2(46)
1. IDFC Financial Holding Company Limited
U65900TN2014PLC097942 Holding Company 100% Section 2(46)
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 yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total
shaRes
a. promoters
(1) Indian
a) Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL
b) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL
c) State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NIL
d) Bodies Corp. 49,400 600 50,000 100% 49,400 600 50,000 100% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (a) (1):- 49,400 600 50,000 100% 49,400 600 50,000 100% nIl
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 5 5
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR % change dURIng
the yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total
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):- nIl nIl nIl nIl nIl nIl nIl nIl nIl
total shareholding of promoter (a) = (a)(1)+(a)( 2)
49,400 600 50,000 100% 49,400 600 50,000 100% nIl
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% 49,400 600 50,000 100% nIl
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR
shaRe holdIng at the end of the yeaR
% change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
no. of shaRes
% of total shaRes of the
company
% of shaRes pledged/
encUmBeRed to total
shaRes
1. IDFC Limited 50,000 100% NIL NIL NIL NIL (100%)
2. IDFC Financial Holding Company Limited NIL NIL NIL 50,000 100% NIL 100%
TOTAL 50,000 100% NIL 50,000 100% NIL 100%
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
156 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(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% 49,400 100%
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 49,400 100% 49,400 100%
# 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% 23/04/2015 NA Transfer 49,400 100%
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NOT APPLICABLE
B. Remuneration to other directors: In `
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoR total amoUnt
RaJIv B. lall
s. B. mathUR
RaJeev UBeRoI
sUnIl KaKaR
mahendRa n shah
Independent Directors
Fee for attending board committee meetings NA 20,000 NA NA NA 20,000
Commission NA NA NA NA NA NA
Others, please specify NA NA NA NA NA NA
total (1) na 20,000 na na na 20,000
other non-executive Directors na na na na na na
Fee for attending board committee meetings
Commission
Others, please specify
total (2) na na na na na na
total (B) = (1 + 2) na 20,000 na na na 20,000
Overall Ceiling as per the Act
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: NOT APPLICABLE
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 5 7
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc tRUstee company lImted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC TRUSTEE COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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, as applicable.
e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
158 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No.20).
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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/ “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, 28th April, 2016
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 5 9
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1(f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
We have audited the internal financial controls over financial reporting of IDFC TRUSTEE COMPANY LIMITED (“the Company”) as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2016, based on the Guidance Note issued by the Institute of Chartered Accountants of India.
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, April 28, 2016
160 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) The Company does not have any fixed assets. Therefore, reporting under clause (i) of the CARO 2016 is not applicable.
(ii) The Company does not have any inventory hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which provision of section 185 and 186 of Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Income-Tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees’ State Insurance, Sales tax, Custom Duty and Excise duty.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as on March 31, 2016 for a period of more than six months from the date they became payable.
(c) There are no dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2016 on account of disputes.
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or availed of any term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) The Company has not paid any managerial remuneration during the year and hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakarPartner(Membership No. 105035)
Mumbai, April 28, 2016
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 6 1
BALANCE SHEET AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
Notes ` ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 500,000 500,000
(b) Reserves and surplus 4 38,378,106 32,800,559
38,878,106 33,300,559
Current liabilities
(a) Trade payables 5
Total Outstanding dues of micro enterprises and small enterprises - -
Total Outstanding dues of creditors other than micro enterprises and small enterprises 58,409 134,909
(b) Other current liabilities 6 14,491 5,000
(c) Short-term provisions 7 191,040 -
263,940 139,909
TOTAL 39,142,046 33,440,468
assets
non-current assets
(a) Non current investments 8 - 15,000,000
(b) Long-term loans and advances 9 117,214 199,113
Current assets
(a) Current investments 10 38,614,982 17,900,510
(b) Cash and cash equivalents 11 396,362 334,665
(c) Short-term loans and advances 12 13,488 6,180
39,024,832 18,241,355
TOTAL 39,142,046 33,440,468
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC tRUStee Company limited
pallavi gorakshakarPartner(Membership No. 105035)
mahendra n. Shah Director
Rajeev UberoiDirector
Mumbai | April 28, 2016
162 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
NOTES ` `
I Income
Revenue from operations 13 8,300,000 7,500,000
Other income 14 104,474 -
TOTAL INCOME (I) 8,404,474 7,500,000
II eXpenses
Finance cost 15 56 445
Other expenses 16 328,871 260,649
TOTAL ExPENSES (II) 328,927 261,094
III pRofIt BefoRe taX (I - II) 8,075,547 7,238,906
Iv taX eXpense
Current tax 2,498,000 2,237,000
Short / (excess) provision in earlier years - (3,696)
TOTAL TAx ExPENSE (IV) 2,498,000 2,233,304
v pRofIt foR the yeaR fRom contInUIng opeRatIons (III - Iv) 5,577,547 5,005,602
Earnings per equity share (nominal value of share ` 10) 19
Basic (`) 111.55 100.11
Diluted (`) 111.55 100.11
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC tRUStee Company limited
pallavi gorakshakarPartner(Membership No. 105035)
mahendra n. Shah Director
Rajeev UberoiDirector
Mumbai | April 28, 2016
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 6 3
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
Notes
Year ended March 31, 2016
Year ended March 31, 2015
` `
(a) cash flow fRom opeRatIng actIvItIes
Profit before tax 8,075,547 7,238,906
adjustment for:
Profit on sale of current investments (104,474) -
Changes in working capital:
adjustment for (increase) / decrease in operating assets
Short term loans and advances (7,308) (1,180)
Long term loans and advances 81,900 (84,909)
adjustment for increase / (decrease) in operating liabilities
Trade payables (76,500) 48,077
Other current liabilities 9,491 5,000
(96,891) (33,012)
Direct taxes paid (2,306,962) (2,248,599)
Net cash flow from operating activities (A) 5,671,694 4,957,295
(B) cash flow fRom InvestIng actIvItIes
Purchase of Current investments (6,210,000) (4,800,000)
Sale of Current investments 600,000
NET CASH USED IN INVESTING ACTIVITIES (B) (5,610,000) (15,000,000)
(c) cash flow fRom fInancIng actIvItIes - -
NET CASH FROM FINANCING ACTIVITIES (C) - -
net increase in cash and cash equivalents (A+B+C) 61,694 157,295
Cash and cash equivalents as at the beginning of the year (As per AS 3-Cash Flow Statement)
11 334,665 177,370
Cash and cash equivalents as at the end of the year (As per AS 3-Cash Flow Statement)
11 396,362 334,665
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC tRUStee Company limited
pallavi gorakshakarPartner(Membership No. 105035)
mahendra n. Shah Director
Rajeev UberoiDirector
Mumbai | April 28, 2016
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
164 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01 BacKgRoUnd IDFC Trustee Company Limited is a wholly owned subsidiary of IDFC Limited. This company is formed for providing trusteeship
services.
02 sIgnIfIcant accoUntIng polIcIes
(A) BaSIS oF pRepaRatIon
‘The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
(B) USe oF eStImateS
‘The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which the results are known / materialise.
(C) InVeStmentS
‘Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
(D) ReVenUe ReCognItIon
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised:
¡ Trusteeship fees are accounted for on an accrual basis in accordance with the agreements.
¡ Dividend is accounted on accrual basis when the right to receive is established.
¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is
determined based on the FIFO cost for current investments and weighted average cost for long term investments.
(E) taxeS on InCome
Income tax expense comprises of current income tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on “Accounting for Taxes on Income” as specified under section 133 of Companies Act, 2013. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
‘Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
(F) CaSh anD CaSh eqUIValentS
Cash and cash equivalents for the purpose of Cash Flow Statement 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 amounts of cash and which are subject to insignificant risk of change in value.
(G) CaSh FloW Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 6 5
(H) eaRnIngS peR ShaRe
‘Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
(I) pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.
(j) opeRatIng CyCle
Based on the nature of 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.
(K) SeRVICe tax InpUt CReDIt
Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
aUthoRIsed shaRes
Equity shares of `10 each 100,000 1,000,000 100,000 1,000,000
IssUed, sUBscRIBed & fUlly paId-Up shaRes
Equity shares of `10 each 50,000 500,000 50,000 500,000
[All of these shares are held by IDFC Financial Holding Company Limited, the holding company and its nominees, previous year held by IDFC Limited, the holding company and its nominees ]
total issued, subscribed and fully paid-up share capital 500,000 500,000
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
Outstanding at the beginning of the year 50,000 500,000 50,000 500,000
Issued during the year - - - -
outstanding at the end of the year 50,000 500,000 50,000 500,000
(b) terms / rights attached to equity shares
¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is
entitled to one vote per share.
¡ 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.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
166 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(c) Details of shareholders holding more than 5% of the shares in the company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Financial Holding Company Limited and its nominees 50,000 100% - -
IDFC Limited and its nominees - - 50,000 100%
04 ReseRves and sURplUs
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
(a) sURplUs In the statement of pRofIt and loss
Opening balance 32,800,559 27,794,957
Profit for the year 5,577,547 5,005,602
Closing balance 38,378,106 32,800,559
05 tRade payaBles
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Total Outstanding dues of micro enterprises and small enterprises - -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
1) Provision for expenses 58,409 134,909
TOTAL 58,409 134,909
(a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006.
(b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
(c ) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
(d) No amount of interest has accrued and remained unpaid at the end of the year under the Micro, Small and Medium Enterprises Development Act, 2006.
(e ) The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.
06 otheR cURRent lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Statutory remittances (Comprises of Tax Deducted at Source) 14,491 5,000
TOTAL 14,491 5,000
07 shoRt teRm pRovIsIons
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Provision for income tax 191,040 -
[Net of advance tax of ` 2,330,000 (Previous year ` Nil)]
TOTAL 191,040 -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 6 7
08 non cURRent Investments (at cost, non tRade)
FaCe ValUe (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR oF UnItS
(`) nUmBeR oF UnItS
(`)
Non Current Investment in mutual funds (unquoted)
IDFC Fixed Term Plan Series 25 Direct Plan - Growth 10 - - 1,500,000 15,000,000
TOTAL - 15,000,000
Aggregate amount of investments in unquoted mutual funds
Cost - 15,000,000
Market value - 17,592,600
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
09 long teRm loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Advance payment of income tax [Net of provision for tax ` 6,523,451 (Previous Year ` 6,523,451)] 114,205 114,204
Supplier advance 3,009 84,909
TOTAL 117,214 199,113
10 cURRent Investments (non tRade)
FaCe ValUe (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR oF UnItS
(`) nUmBeR oF UnItS
(`)
Current Maturity of long-term investments
IDFC Fixed Term Plan Series 25 Direct Plan - Growth 10 1,500,000.000 15,000,000 - -
Current Investment in mutual funds (unquoted)
(Valued at lower of cost and market value, unless stated otherwise)
IDFC Cash Fund - Direct Plan - Growth 1000 8,166.130 13,614,982 4,993.829 7,900,510
IDFC Ultra Short Term Fund Direct Plan- Growth 10 616,488.604 10,000,000 616,488.604 10,000,000
TOTAL 38,614,982 17,900,510
Aggregate amount of investments in unquoted mutual funds
Cost 38,614,982 17,900,510
Market value 47,259,653 20,568,933
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
11 tRade ReceIvaBles (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
cash and cash eqUIvalents
Balance with bank:
In current accounts 396,362 334,665
TOTAL 396,362 334,665
12 shoRt-teRm loans and advances
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Balances with government authorities - Cenvat credit available 13,488 6,180
TOTAL 13,488 6,180
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
168 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
13 RevenUe fRom opeRatIons
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Trusteeship fees 8,300,000 7,500,000
TOTAL 8,300,000 7,500,000
14 otheR Income
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Profit on sale of current investments 104,474 -
TOTAL 104,474 -
15 fInance cost
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Interest on delayed payment of service tax 56 445
TOTAL 56 445
16 otheR eXpenses
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Rates and taxes 2,980 2,500
Travelling & conveyance - 88,848
Professional fees 68,460 37,908
Auditors' remuneration [see note (a)] 125,000 85,000
Bad debts written off 112,000 -
Directors' sitting fees 20,000 40,000
Miscellaneous expenses 431 6,393
TOTAL 328,871 260,649
(a) Break up of auditors’ remuneration:
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Audit fee 50,000 50,000
Tax audit fee - (30,000)
Other services 75,000 65,000
Service tax 15,450 14,214
Less: Service tax set off claimed (15,450) (14,214)
TOTAL 125,000 85,000
17 The Company is engaged in the business of providing trusteeship services. As such, there is no separate reportable primary business segment or geographical segment as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of Companies Act, 2013.
18 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C T R U S T E E C O M PA N Y L I M I T E D | 1 6 9
RelatIonshIp:
holdIng company:
IDFC Financial Holding Company Limited
UltImate holdIng company
IDFC Limited
fellow sUBsIdIaRy
IDFC Bank Limited
Particulars Transaction March 31, 2016 March 31, 2015
IDFC Bank Limited Balance in Current Accounts 246,737 -
19 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013:
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Profit for the year (`) 5,577,547 5,005,602
Weighted average number of equity shares (Nos.) 50,000 50,000
Basic & Diluted Earnings Per Share (`) 111.55 100.11
Nominal Value Per Share (`) 10 10
20 contIngent lIaBIlItIes and commItments (to the eXtent not pRovIded foR)
PARTICULARS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Contingent liabilities
Claims not acknowledged as debts in respect of:
Income-tax demands disputed by the Company (net of amounts provided). The matters in dispute are under appeal. The demands have been partly paid / adjusted and will be received as refund if the matters are decided in favour of the Company.
595,951 595,951
a. There are no litigations claims made by the Company or pending on the Company.
b. Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
21 pRevIoUs yeaR fIgURes
Previous 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 IDFC tRUStee Company limited
mahendra n. Shah Director
Rajeev UberoiDirector
Mumbai | April 28, 2016
U99999MH1993PLC071865
Mr. Vikram Limaye (Chairperson)
Mr. T S Bhattacharya
Mr. Ajay Sondhi
Mr. Sunil Kakar
Dr. Rajeev Uberoi
Deloitte Haskins & Sells LLP
Chartered Accountants
IDFC Bank Limited
Naman Chambers
C-32, G-Block, Bandra-Kurla
Complex, Bandra (East)
Mumbai 400 051
tel +91 22 6622 2600
Fax + 91 22 6622 2501
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc secURItIes lImIted
I D F C S E C U R I T I E S L I M I T E D | 1 7 1
to the memBeRs
Your Directors have pleasure in presenting the Twenty Third Annual Report together with the audited financial statements for the financial year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
paRtIcUlaRs foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
From continuing operations
Total Income 543,153,142 760,275,401
Less: Total Expenses 535,941,837 482,436,657
Profit before Tax 7,211,305 277,838,744
Less: Provision for Tax 9,068,610 54,726,404
(Loss) / Profit after Tax (1,857,305) 223,112,340
From discontinuing operations
Profit after Tax discontinuing operations 150,377,806 195,679,923
Profit for the year 148,520,501 418,792,263
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 04 of the Notes forming part of the financial statements.
dIvIdend
Your Directors have decided not to recommend any dividend for the financial year ended March 31, 2016 as the Company has decided to reinvest its earnings.
opeRatIonal RevIew and fUtURe oUtlooK
Institutional Broking
FY16 proved to be a challenging year for the Indian capital markets, witnessing significant volatility. DIIs pumped in a stellar ~US$10bn in Indian equities and bonds, while FIIs pulled out ~US$2.1bn. Further, the Nifty fell ~11% yoy in FY16 (during 1 April 2015-31 March 2016). Since the start of FY16, some improvement was seen in investor sentiment, led by a pick-up in industrial activity, improved GDP growth (evident from lead indicators such as robust auto sales) and hopes of good monsoons. The MSCI EM returned 5.4% in the first three months of FY16, but India underperformed. In this backdrop, IDFC Securities’ performance was commendable – while market volumes dropped ~9% in FY16, the company’s commission market share improved across MFs, insurance funds and FIIs. The improvement was mainly led by deeper mining of existing clients, new client additions and entry into new geographies.
The outlook for FY17 remains healthy as India’s GDP growth is expected to be among the best globally at 7.5%, as per the World Bank. With critical macro indicators such as current account deficit, fiscal deficit and inflation being in the comfort zone, the Reserve Bank of India has already reduced the repo rate by 0.75%. Further, an expected pick-up in demand/consumption, continued softness in input prices and lower interest rates will ensure that India Inc.’s performance improves going forward.
Propped by idea-driven research, constant improvement in talent and further widening/deepening of client relationships, IDFC Securities is well-poised to benefit from the improving investment climate. The company has been deeply appreciated by various rating agencies such as Institutional Investor, Asiamoney and StarMine Awards, wherein IDFC Securities’ Sales, Research and Dealing desks have won multiple accolades.
IDFC Securities Limited was engaged in the business of Institutional Broking, Research and Investment Banking.
IDFC Bank Limited, Fellow Subsidiary obtained Investment Banking license from SEBI. For better business synergy, post IDFC Bank Limited receiving Investment Banking license from SEBI, Complete deal pipe line of Investment Banking Business was transfered to IDFC Bank Limited.
sUBsIdIaRy companIes / JoInt ventURes / assocIate companIes
The Company has two direct wholly-owned subsidiaries namely IDFC Securities Singapore Pte. Limited and IDFC Capital (USA) Inc. at the end of the Financial Year.
The Company does not have any Joint Venture and Associate Company.
A statement containing salient features of the financial statement and all other requisite details of all the subsidiary companies in the format AOC-I is appended as annexure I.
BOARD'S REPORT
172 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
shaRe capItal Update
During the year, IDFC Ltd. (‘IDFC’) was granted in-principal approval by the Reserve Bank of India (‘RBI’) on April 9, 2014 to set up a new private sector bank. The terms and conditions contained in the Guidelines for Licensing of New Banks in the Private Sector dated February 22, 2013 mandated that all new banks would need to be set up through a Non-Operative Financial Holding Company (‘noFhC’). The NOHFC was required to hold bank as well as all other financial services entities of IDFC Group which are regulated by RBI or other financial sector regulators. As per the said guidelines, IDFC Financial Holding Company Limited (‘IDFC FhCl’) was incorporated as the Wholly owned subsidiary of IDFC . Equity stake held by IDFC of IDFC Securities Limited was transferred to IDFC FHCL, being regulated by SEBI. However, there was no change in control of IDFC Securities Limited as IDFC remained Ultimate Holding Company.
paRtIcUlaRs of employees
The Company had 80 employees as on March 31, 2016.
The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company and the same will be furnished on request.
pUBlIc deposIts
During the year under review, your Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There 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 polIcy
Pursuant to provisions of Section 177(9) of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers) Rules, 2014 (“the Rules”), the 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 eaRnIngs
The particulars regarding foreign exchange expenditure and earnings are furnished in Note no. 26 in the Notes forming part of the Financial Statements..
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRs / Key manageRIal peRsonnel
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment
The Board of Directors recommends re-appointment of Mr. Sunil Kakar, as a Director at the ensuing AGM.
Subject to the approval of Stock Exchange, the Board of Directors of the Company at its meeting held on July 16, 2015, appointed Mr. Ajay Sondhi as an Additional Director under the category of Independent Director of the Company under the Companies Act, 2013, for a period of three years. The Company has received notices from Members of the Company under Section 160 of the Companies Act, 2013, proposing the appointment of Mr. Ajay Sondhi at the ensuing AGM. The Board of Directors recommend the appointment of Mr. Ajay Sondhi.
During the year, Mr. Sadashiv S Rao resigned from the Board of Directors of the Company. The Board places on record its sincere appreciation for the services rendered by him during his tenure.
During the year, Mr. Rajesh Jain resigned as the CEO of the company and Mr. Amol Ranade resigned as the Company Secretary of the Company.
Following are the existing Key Managerial Personnel pursuant to Section 203 of the Companies Act, 2013:
1. Mr. Anish Damania - Chief Executive Officer
2. Mr. Hitesh Desai - Chief Financial Officer
BOARD'S REPORT
I D F C S E C U R I T I E S L I M I T E D | 1 7 3
declaRatIon of Independence
The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.
meetIngs of the BoaRd
During the year, the Board met five (5) times on April 23, 2015, July 16, 2015, October 27, 2015, January 25, 2016 and March 09, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY16 is given in the table below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. Vikram Limaye 00488534 Chairperson 5 5
Mr. T S Bhattacharya 00157305 Independent Director 5 4
Mr. Ajay Sondhi1 01657614 Independent Director 3 3
Mr. Sunil Kakar 03055561 Non-Executive Director 5 5
Dr. Rajeev Uberoi 01731829 Non-Executive Director 5 5
Mr. Sadashiv S. Rao2 01245772 Non-Executive Director 2 2
Mr. Yuvraj Narayan3 00306652 Independent Director Nil Nil
1 Appointed as an Independent Director, subject to approval of Stock Exchanges w.e.f. July 16, 20152 Resigned as a Director, subject to approval of Stock Exchanges on July 16, 2015 3 Resigned as a Director, subject to approval of Stock Exchanges as on April 7, 2015
aUdIt commIttee
During the year, the Audit Committee met four (4) times on April 23, 2015, July 16, 2015, October 27, 2015 and January 25, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance of the Audit Committee Meetings held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. T S Bhattacharya Independent Director Chairperson 4 3
Mr. Ajay Sondhi1 Independent Director Member 2 2
Mr. Sunil Kakar Independent Director Member 4 4
Mr. Yuvraj Narayan2 Independent Director Member 0 0
1 Appointed as a member of the committee w.e.f. July 16, 20152 Resigned as a Director, subject to approval of Stock Exchanges w.e.f. April 7, 2015
nomInatIon and RemUneRatIon commIttee (nRc)
During the year, one (1) NRC meeting was convened and held on July 16, 2015. The composition of NRC is in compliance with the Companies Act, 2013. The attendance details of the NRC Meeting held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Sunil Kakar Non Executive Director Chairperson 1 1
Mr. T S Bhattacharya Independent Director Member 1 0
Mr. Ajay Sondhi1 Independent Director Member 0 0
Mr. Vikram Limaye Non Executive Director Member 1 1
1 Appointed as a member w.e.f. July 16, 2015
BoaRd evalUatIon
The evaluation for the Directors and the Board was done through circulation of questionnaires, which would assess the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
BOARD'S REPORT
174 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
RemUneRatIon polIcy
The Board approved the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements of Companies Act, 2013.
statUtoRy aUdItoRs
The Shareholders of the Company at their meeting held on September 29, 2015 had approved the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, (Registration No. 117365W) Statutory Auditors for a period of 1 year to hold office from the conclusion of the Twenty Second Annual General Meeting up to the conclusion of the Twenty Third Annual General Meeting of the Company.
M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad (Registration No. 117365W) Statutory Auditors of the Company will retire at the conclusion of the ensuing AGM.
The Board recommends the reappointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of the Company.
There was no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
Related paRty tRansactIons
In all related party transactions (RPTs) that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. The Company has always been committed to good corporate governance practices, including matters relating to RPTs.
Pursuant to the provisions of Companies Act, 2013 and Rules made there under and in the back-drop of the Company’s philosophy on such matters, on the recommendation of Audit Committee the Board approved “Policy on Related Party Transactions” at its meeting held on March 20, 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.
InteRnal contRol systems and RIsK management
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
The Risk Management Committee has been formulated to monitor and review Risk Management of the Company.
mateRIal changes/ commItments
As per Section 134(3)(l) of Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
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.
antI-seXUal haRassment polIcy
The company has in place a policy on Anti-Sexual Harassment. The Company undertakes ongoing trainings to create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.
coRpoRate socIal ResponsIBIlIty (csR)
The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed herewith as annexure III.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2016 and of the profit and loss of the company for that period;
BOARD'S REPORT
I D F C S E C U R I T I E S L I M I T E D | 1 7 5
(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 RetURn
The details forming part of the extract of the Annual Return in form MGT-9 are annexed herewith as annexure II.
acKnowledgements
The Directors express their gratitude for the unstinted support and guidance received from IDFC Financial Holding Company Limited and other group companies.
FOR AND ON BEHALF OF DIRECTORS
Vikram limayeChairperson
Mumbai, June 25, 2016
BOARD'S REPORT
176 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[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 Securities Singapore Pte. Ltd IDFC Capital (USA) Inc.
3 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period
April 1, 2015 to March 31, 2016 April 1, 2015 to March 31, 2016
4 Reporting currency and exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.
INR Conversion rate:66.663 INR Conversion rate:66.663
5 Share capital 149,125,695 46,240,000
6 Reserves & surplus (98,076,242) 16,523,573
7 total assets 53,061,947 66,633,305
8 total liabilities 53,061,947 66,633,305
9 Investments - -
10 turnover 7,251,221 24,925,883
11 profit / (loss) before taxation (29,781,635) 1,396,509
12 provision for taxation - 482,409
13 profit/(loss) after taxation (29,781,635) 1,878,918
14 proposed Dividend - -
15 % of shareholding 100% 100%
anneXURe IFORM AOC-I
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
As on the financial year ended on March 31, 2016
[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 U99999MH1993PLC071865
ii) Registration Date 07/05/1993
iii) Name of the Company IDFC SECURITIES LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares Indian Non-Government Company
v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354
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. The Company is in process of changing Registrar & Transfer Agent (RTA).
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. Institutional Broking 6612 56%
2. Investment Banking 6619 44%
I D F C S E C U R I T I E S L I M I T E D | 1 7 7
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1 IDFC Limited L65191TN1997PLC037415
Ultimate Holding
Indirectly 100%
Section 2(46)
1. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100% Section 2(46)
2. IDFC Securities Singapore Pte Ltd – Subsidiary 100% Section 2(87)
3. IDFC Capital (USA) Inc. – Subsidiary 100% Section 2(87)
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
yeaRdemat physIcal total % of total shaRes
demat physIcal total % of total 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. 14,137,200 NIL 14,137,200 100% 14,137,200 NIL 14,137,200 100% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
SUB-total (a) (1):- 14,137,200 nIl 14,137,200 100% 14,137,200 nIl 14,137,200 100% nIl
(2) Foreign
a) NRIs – Individuals
b) Other – Individuals
c) Bodies Corp.
d) Banks / FI
e) Any Other
SUB-TOTAL (A) (2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL
TOTAL SHAREHOLDING OF PROMOTER (A) = (A)(1)+(A)( 2)
14,137,200 NIL 14,137,200 100% 14,137,200 NIL 14,137,200 100% NIL
B. pUBlIc shaReholdIng
NIL NIL NIL NIL NIL NIL NIL NIL NIL
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
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
178 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs
no. of shaRes held at the BegInnIng of the yeaR no. of shaRes held at the end of the yeaR % change dURIng the
yeaRdemat physIcal total % of total shaRes
demat physIcal total % of total shaRes
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) 14,137,200 nIl 14,137,200 100% 14,137,200 nIl 14,137,200 100% nIl
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR
shaRe holdIng at the end of the yeaR
% change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of
the company
%of shaRes pledged/
encUmBeRed to total shaRes
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
1. IDFC Limited 14,137,200 100% NIL NIL NIL NIL (-100%)
2. IDFC Financial Holding Company Limited
NIL NIL NIL 14,137,200 100% NIL 100%
TOTAL 14,137,200 100% NIL 14,137,200 100% NIL NIL
(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 14,137,200 100% 14,137,200 100%
2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):
14,137,200 shares transferred from
IDFC Limited and its nominees to IDFC Financial Holding
Company Limited and its nominees on July 9,
2015
100% 14,137,200 shares transferred from
IDFC Limited and its nominees to IDFC Financial Holding
Company Limited and its nominees on July 9,
2015
100%
3 At the end of the year 14,137,200 100% 14,137,200 100%
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C S E C U R I T I E S L I M I T E D | 1 7 9
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL
B. Remuneration to other directors: IN `
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoRs total amoUnt
vIKRam lImaye t. s. BhattachaRya sUnIl KaKaR aJay sondhI RaJeev UBeRoI
1. Independent Directors
Fee for attending board committee meetings
NIL 120,000 NIL NIL NIL 120,000
Commission NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL
total (1) nIl 120,000 nIl nIl nIl 120,000
2. other non-executive Directors
Fee for attending board committee meetings
NIL NIL NIL NIL NIL NIL
Commission NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL
total (2) nIl nIl nIl nIl nIl nIl
total (B) = (1 + 2) nIl 120,000 nIl nIl nIl 120,000
overall Ceiling as per the act Refer note
Note: Aforesaid payment of sitting fees is within overall limits prescribed under the Companies Act, 2013.
g. RemUneRatIon to key manageRIal peRSonnel otheR than mD/manageR/WtD. IN `
sR. no.
paRtIcUlaRs of RemUneRatIon Key manageRIal peRsonnel
ceo company secRetaRy cfo total
1. gross salary
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
4,695,349 NIL 26,831,002 31,526,351
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 32,400 NIL 39,600 72,000
(c) Profits in lieu of salary under section 17(3) Income – tax Act, 1961
NIL NIL NIL NIL
2. Stock option NIL NIL NIL NIL
3. Sweat equity NIL NIL NIL NIL
4. Commission NIL NIL NIL NIL
– as % of profit
– others, specify...
5. others, please specify 449,995 NIL 1,719,800 2,169,795
TOTAL (A) 5,177,744 NIL 28,590,402 33,768,146
vIII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
180 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
` In laC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams sUB heads:
(1) dIRect eXpendItURe on pRoJects oR pRogRams (2) oveR
heads
cUmUlatIve eXpendItURe
Up to the RepoRtIng
peRIod
amoUnt spent : dIRect oR
thRoUgh ImplementIng
agency
1 Improvement in the learning environment in night schools - which cater to underprivileged students.
Cl.(ii) promoting education Maharashtra-Mumbai
12.42
1.79 2.03
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.84 1.25
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 2.49 2.84
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2.15 2.15
5 Support to Janaagraha Centre for Citizenship and Democracy to Strengthen and Improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
1.29 1.29
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.62 0.62
total 12.42 9.18 10.18
7 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
8.31
2.30 2.69
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 2.94 2.94
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 1.63 1.63
total 8.31 6.87 7.26
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
7.76
1.95 1.95
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects;Cl.(iv) ensuring environmental sustainability;Cl.(x) rural development projects.
Meghalaya - Across State 1.69 2.22
12 Setting up a centre of Excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 1.09 1.09
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.46 0.46
total 7.76 5.19 5.72
14 Other programmes (including research & studies) Various clauses of Schedule VII All India coverage 28.24 9.28 10.80
total 28.24 9.28 10.80
total DIReCt expenSe oF pRoJeCt & pRogRammeS (a) 30.52 33.96
oVeRheaD expenSe (ReStRICteD to the 5% oF total CSR expenDItURe) (B) 2.65 3.09
total (a) + (B) 56.73 33.17 37.05
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
I D F C S E C U R I T I E S L I M I T E D | 1 8 1
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
` In laC
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no
csR pRoJect oR actIvIty IdentIfIed sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
amoUnt spent on the pRoJects oR pRogRams sUB heads:
(1) dIRect eXpendItURe on pRoJects oR pRogRams (2) oveR
heads
cUmUlatIve eXpendItURe
Up to the RepoRtIng
peRIod
amoUnt spent : dIRect oR
thRoUgh ImplementIng
agency
1 Improvement in the learning environment in night schools - which cater to underprivileged students.
Cl.(ii) promoting education Maharashtra-Mumbai
12.42
1.79 2.03
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.84 1.25
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 2.49 2.84
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2.15 2.15
5 Support to Janaagraha Centre for Citizenship and Democracy to Strengthen and Improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects,
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
1.29 1.29
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.62 0.62
total 12.42 9.18 10.18
7 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
8.31
2.30 2.69
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 2.94 2.94
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 1.63 1.63
total 8.31 6.87 7.26
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
7.76
1.95 1.95
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects;Cl.(iv) ensuring environmental sustainability;Cl.(x) rural development projects.
Meghalaya - Across State 1.69 2.22
12 Setting up a centre of Excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 1.09 1.09
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.46 0.46
total 7.76 5.19 5.72
14 Other programmes (including research & studies) Various clauses of Schedule VII All India coverage 28.24 9.28 10.80
total 28.24 9.28 10.80
total DIReCt expenSe oF pRoJeCt & pRogRammeS (a) 30.52 33.96
oVeRheaD expenSe (ReStRICteD to the 5% oF total CSR expenDItURe) (B) 2.65 3.09
total (a) + (B) 56.73 33.17 37.05
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
182 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
1. a brief outline of the Company’s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The CSR policy is to ensure that CSR activities are not performed in silos and that it be skillfully and inextricably woven into the fabric of the Company’s business strategy for overall value creation for all stakeholders. IDFC believes that profitability must be complemented by a sense of responsibility towards all stakeholders with a view to make a material, visible and lasting difference to the lives of disadvantaged sections of the people, preferably in the immediate vicinity in which the Company operates but at the same time ensure widespread spatial distribution of its CSR activities Pan-India befitting its status as a conscientious corporate citizen.
Section 135 of Companies Act, 2013 (“the act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC Securities Ltd. to mandatorily spend on CSR.
During the year, IDFC Securities Ltd. carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).
The object of the CSR activities would seek to –
(a) serve the poor, marginalised and underprivileged
(b) promote inclusion
(c) be sustainable
(d) meet needs of the larger community and society
IDFC Foundation, as implementing agency on behalf of IDFC Limited and its group companies, undertook the following CSR activities which fall within the ambit of the activities listed in Schedule VII of the Act for promoting the development of –
(a) livelihoods
(b) rural 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, renewable energy, slum re-development and affordable housing.
2. the Composition of the CSR Committee.
Mr. Sunil Kakar
Mr. T S Bhattacharya
Dr. Rajeev Uberoi
3. average net profit of the company for last three financial years– ` 2836.37 lacs
4. prescribed CSR expenditure (two per cent of the amount as in item 3 above) – ` 56.73 lacs
5. Details of CSR spent during the financial year. ` 56.73 lacs
(a) Total amount to be spent for the financial year; ` 56.73 Lacs
(b) Amount unspent, if any; NIL
anneXURe IIICORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C S E C U R I T I E S L I M I T E D | 1 8 3
INDEPENDENT AUDITORS’ REPORT
to the memBeRs of Idfc secURItIes lImIted
Report on the financial statements
We have audited the accompanying financial statements of Idfc secURItIes lImIted (“the Company”), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the financial statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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 prescribed under section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
184 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITORS’ REPORT
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No.24(a))
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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/ “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
I D F C S E C U R I T I E S L I M I T E D | 1 8 5
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal financial controls over financial Reporting under clause (i) of sub-section 3 of section 143 of the companies act, 2013 (“the act”)We have audited the internal financial controls over financial reporting of Idfc secURItIes lImIted (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal financial controlsThe Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal financial controls over financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal financial controls over financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinionIn our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016 based on the Guidance Note issued by the Institute of Chartered Accountants of India.
For deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
186 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to Companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which the provisions of Section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable.
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Service Tax, Value Added tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanation given to us during the year there were no dues payable in respect of Sales Tax, Customs Duty and Excise Duty.
(b) There were no undisputed amounts payable in respect of Provident Fund, , Employees’ State Insurance, Income-tax, Service Tax, Value Added tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax and Service Tax which have not been deposited as on March 31, 2016 on account of disputes are given below:
name of statUte natURe of dUes foRUm wheRe dIspUte Is pendIng
peRIod to whIch the amoUnt Relates
amoUnt Involved (`)
amoUnt UnpaId (`)
Income Tax Act, 1961 Income Tax Income Tax Officer A. Y. 1997-98 160,000 160,000
Income Tax Officer A. Y. 1998-99 107,396 107,396
Income Tax Officer A. Y. 1999-00 87,500 87,500
Income Tax Officer A. Y. 2007-08 100,807 100,807
High Court A. Y. 2008-09 103,62,211 103,62,211
Income Tax Officer A. Y. 2009-10 1,360,137 1,360,137
High Court A. Y. 2010-11 29,14,930 29,14,930
Service Tax Service Tax The Commissioner of Service Tax
For the period July 12 - March 13 10,636,201 10,636,201
For the Financial Year 2013-14 14,291,421 14,291,421
For the period Apr 09 - Feb 10 36,71,607 36,71,607
For the period Apr 14-Mar 15 78,78,647 78,78,647
518,32,261 518,32,261
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
I D F C S E C U R I T I E S L I M I T E D | 1 8 7
(xi) The Company has not paid any managerial remuneration during the year and hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding Company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
For deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
188 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
NOTES
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 141,372,000 141,372,000
(b) Reserves and surplus 4 1,205,323,063 1,056,802,562
1,346,695,063 1,198,174,562
non-current liabilities
(a) Other long-term liabilities 5 176,541 176,541
176,541 176,541
Current liabilities
(a) Trade payables 6
Total outstanding dues of micro enterprises and small enterprises - -
Total outstanding dues of creditors other than micro enterprises and small enterprises
162,741,983 35,166,020
(b) Other current liabilities 7 30,216,736 16,996,887
(c) Short-term provisions 8 163,240,391 2,018,843,424
356,199,110 2,071,006,331
TOTAL 1,703,070,714 3,269,357,434
assets
non-current assets
(a) Fixed assets
Tangible assets 9 21,425,140 16,023,847
Intangible assets 10 3,055,922 4,184,700
Capital work-in-progress - 629,216
24,481,062 20,837,763
(b) Non-current investments 11 195,375,695 160,764,045
(c) Deferred tax asset 12 22,800,000 19,300,000
(d) Long-term loans and advances 13 222,471,343 233,498,473
(e) Other non-current assets 14 3,376,495 42,130,465
468,504,595 476,530,746
Current assets
(a) Current investments 15 550,367,848 2,284,249,976
(b) Trade receivables 16 213,542,444 75,888,577
(c) Cash and Cash equivalents 17 411,856,832 385,104,634
(d) Short-term loans and advances 13 13,116,397 29,911,145
(e) Other current assets 14 45,682,598 17,672,356
1,234,566,119 2,792,826,688
TOTAL 1,703,070,714 3,269,357,434
See accompanying notes forming part of the financial statements.
In terms of our report attached.
foR deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC Securities limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeChairman
Sunil kakarDirector
Mumbai | April 25, 2016hitesh DesaiChief Financial Officer
I D F C S E C U R I T I E S L I M I T E D | 1 8 9
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
NOTES
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
` `
a contInUIng opeRatIons
I Income
Revenue from operations 18 411,647,531 409,255,775
Other income 19 131,505,611 351,019,626
TOTAL INCOME (I) 543,153,142 760,275,401
II eXpenses
Operating expenses 20 42,750,729 40,629,941
Employee benefits expenses 21 359,423,843 307,750,837
Finance costs 22 2,730,923 6,700,919
Depreciation and amortisation expense 9, 10 11,010,530 8,030,258
Other expenses 23 118,705,926 117,300,452
Provisions and contingencies 1,319,886 2,024,250
TOTAL ExPENSES (II) 535,941,837 482,436,657
III pRofIt BefoRe taX (I-II) 7,211,305 277,838,744
Iv taX eXpense
Current tax 5,400,000 28,500,000
Deferred tax 12 (1,075,000) (850,000)
Current tax expense relating to prior years 4,743,610 27,076,404
TOTAL TAx ExPENSE 9,068,610 54,726,404
v pRofIt / (loss) foR the yeaR fRom contInUIng opeRatIons (III-Iv) (1,857,305) 223,112,340
B dIscontInUIng opeRatIons
vI pRofIt fRom dIscontInUIng opeRatIons (BefoRe taX) 31 226,502,883 283,829,923
vII add / (less): taX eXpense of dIscontInUIng opeRatIons
(a) on ordinary activities attributable to the discontinuing operations 31 76,125,077 88,150,000
vIII pRofIt / (loss) fRom dIscontInUIng opeRatIons (vI-vII) 31 150,377,806 195,679,923
c total opeRatIons
IX pRofIt / (loss) foR the yeaR (v+vIII) 148,520,501 418,792,263
Earnings per equity share (nominal value of share ` 10) 30
(a) Basic (`)
(i) Continuing operations (0.13) 15.78
(ii) Total operations 10.51 29.62
(b) Diluted (`)
(i) Continuing operations (0.13) 15.78
(ii) Total operations 10.51 29.62
See accompanying notes forming part of the financial statements.
In terms of our report attached.
foR deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC Securities limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeChairman
Sunil kakarDirector
Mumbai | April 25, 2016hitesh DesaiChief Financial Officer
190 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
` `
cash flow fRom opeRatIng actIvItIes
profit before tax 233,714,188 561,668,667
adjustments for
Depreciation and amortisation expense 11,985,377 9,709,306
Provisions and contingencies 9,049,872 28,933,133
Interest on bank deposits (31,955,944) (33,987,257)
Finance costs 2,733,423 6,705,219
Dividend from investments (1,720,834) (2,063,935)
(Profit)/loss on sale of fixed assets (net) (33,932) (61,771)
Gain on sale of current investment (85,002,034) (94,029,343)
Gain on sale of long-term investment - (20,138,742)
Gain on sale of subsidiary - (197,595,258)
(94,944,072) (302,528,648)
operating profit before working capital changes 138,770,116 259,140,019
Changes in working capital:
adjustments for (increase) / decrease in operating assets:
Trade receivables (146,703,738) (50,456,849)
Short-term loans and advances 16,794,746 (16,046,924)
Long-term loans and advances 163,437 19,075,268
Other current assets (23,928,533) (6,421,857)
adjustments for increase / (decrease) in operating liabilities:
Short-term provision (59,900,000) 109,400,000
Trade payables 127,575,963 (7,344,161)
Other current liabilities 13,219,849 (1,565,959)
(72,778,276) 46,639,518
Cash generated from operations 65,991,840 305,779,537
Net income taxes paid (86,931,654) (45,781,628)
net cash from operating activities (A) (20,939,814) 259,997,909
I D F C S E C U R I T I E S L I M I T E D | 1 9 1
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2016
FOR THE YEAR ENDEDMARCH 31, 2015
` `
cash flow fRom InvestIng actIvItIes
Capital advances - 1,027,008
Proceeds from sale of fixed assets 3,461,523 1,493,055
Bank balances not considered as cash and cash equivalents
- Placed (338,018,496) (354,945,828)
- Matured 327,045,828 505,900,637
Purchase of fixed assets (19,056,266) (14,558,575)
Purchase of investments - others (8,091,143,030) (17,169,390,791)
Investments in subsidiaries (34,611,650) (1,901,292,625)
Proceeds from transfer of subsidiaries - 3,856,282,162
Proceeds from sale of current investments 9,910,027,192 15,969,379,471
Proceeds from sale of other investments - 40,723,802
Interest received on bank deposits 30,001,928 35,479,717
Dividend received on investments 1,720,834 2,063,935
net cash used in investing activities (B) 1,789,427,863 972,161,968
cash flow fRom fInancIng actIvItIes
Buy back of debentures - (1,250,000,000)
Finance costs (2,733,423) (6,705,219)
Dividends paid (1,484,406,000) -
Tax on dividend (302,195,373) -
net cash from /(used in) financing activities (C) (1,789,334,796) (1,256,705,219)
net decrease in cash and cash equivalents (A+B+C) (20,846,747) (24,545,342)
Cash and cash equivalents as at the beginning of year (see note 17) 58,058,806 82,604,148
Cash and cash equivalents as at the end of year (see note 17) 37,212,059 58,058,806
(20,846,747) (24,545,342)
In terms of our report attached.
foR deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC Securities limited
pallavi a. gorakshakarPartner(Membership No. 105035)
Vikram limayeChairman
Sunil kakarDirector
Mumbai | April 25, 2016hitesh DesaiChief Financial Officer
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
192 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01 BacKgRoUndIDFC Securities Limited (‘the Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited, (the ‘Holding Company’) incorporated in India and regulated by the Securities Exchange Board of India (SEBI) as a stock broking company.
The Company is engaged in the business of share and stock broking for both cash segment and Derivatives segment and is a member of the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The activities of the Company include providing equity research and stock broking services to Foreign Institutional Investors (FIIs) & Domestic Institutional Investors (DIIs).
The Company is also registered with Security and Exchange Board of India (SEBI) as category – I, Merchant Banker, engaged in providing Investment Banking services like Advisory services, IPO Underwriting, Qualified Institutional Placement (QIP), fund raising and Debt Syndication.
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF aCCoUntIng anD pRepaRatIon oF FInanCIal StatementS
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except for categories of fixed assets acquired before April 1, 2014, that are carried at revalued amount. 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 2e.
B. USe oF eStImateS
The Company adopts the accrual concept in the preparation of the accounts. The preparation of financial statements in conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and 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 brokerage activities is recognised on trade-date basis and is net of statutory payments.
(b) Income from fee-based activities is recognised on the basis of terms of contracts with the clients and when reasonable right of recovery is established and is accounted net of service tax.
(c) Interest income is recognised on an accrual basis.
(d) Dividend is recognised when the right to receive is established as at the Balance sheet date.
d. FIxeD aSSetS anD IntangIBle aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. 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. Consideration paid for transfer of tenancy rights is capitalised as an intangible asset.
The Company has regular programme of evaluating useful life of its assets.
e. DepReCIatIon anD amoRtISatIon
¡ Tangible assets
Depreciation on tangible fixed assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the Companies Act, 2013. Certain electronic items and vehicles are depreciated over a period of two years and four year respectively on a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.
Having regard to the Part C of Schedule II of the Companies Act, 2013 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.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 1 9 3
¡ Intangible assets
Intangible assets comprising of computer software are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated amortisation. Any technology support cost or annual maintenance cost for such software is charged annually to the Statement of Profit and Loss. Intangible assets are being amortised over a period of three years on a straight-line method. Tenancy rights are amortised over a period of 10 years by using Straight-line method.
f. InVeStmentS
Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with Accounting Standards specified under Section 133 of the Companies Act, 2013. All other investments are classified as long-term investments.
All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.
Long Term Investments’ are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis. Current Investments’ are carried at the lower of cost or fair value on an individual basis.
g. CaSh anD CaSh eqUIValentS (FoR pURpoSeS 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.
h. CaSh FloW Statement
Cash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Company are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.
I. mISDeal StoCk
Misdeal stock comprises of stock that has devolved on the Company due to erroneous execution of trades on behalf of the institutional clients in the normal course of business. These securities are valued at lower of cost or market value/ realisable value on an individual basis. Any valuation loss based on the above is debited to the Statement of Profit and Loss.
J. employee BeneFItS –
Defined contribution plans
¡ The Company’s contribution to provident fund is considered as defined contribution plan and is charged to the Statement of
Profit and Loss as they fall due based on the amount of contribution required to be made as and when services are rendered
by the employees.
¡ The Company participates in the holding company’s superannuation policy for future payments of superannuation and the
Company’s contribution paid / payable during the year is charged to the Statement of Profit and Loss every year.
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 period in which they occur.
other benefits
¡ Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to
the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.
K. InCome - tax
The accounting treatment for income-tax in respect of the Company’s income is based on the Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of Companies Act, 2013. The provision made for income-tax in the accounts comprises both the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
Deferred tax is 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.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
194 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
l. eaRnIngS peR ShaRe
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
m. pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any are disclosed in the notes. The Company does not account for Contingent assets.
n. FoReIgn CURRenCy tRanSaCtIonS
Foreign currency transactions are accounted at the exchange rates prevailing on the date of the transaction. Foreign currency monetary items outstanding as at the Balance Sheet date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.
o. InSURanCe ClaImS
Insurance claims are accounted for on the basis of claims admitted/expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
p. SeRVICe tax InpUt CReDIt
Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing/utilising the credits.
q. opeRatIng CyCle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
authorised
Equity shares of ` 10 each 52,000,000 520,000,000 52,000,000 520,000,000
Issued, subscribed and fully paid up shares
Equity shares of ` 10 each 14,137,200 141,372,000 14,137,200 141,372,000
(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees (Previous year Nil), IDFC Limited is the Holding Company of IDFC Financial Holding Company Limited, which is the ultimate Holding Company of the Company)
0% (Previous year 100%) are held by IDFC Limited
TOTAL 141,372,000 141,372,000
a Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
Outstanding at the beginning of the year 14,137,200 141,372,000 14,137,200 141,372,000
Issued during the year - - - -
Outstanding at the end of the year 14,137,200 141,372,000 14,137,200 141,372,000
b terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share. During the year ended March 31,2016 dividend of ` Nil per share ( Previous year ` 105 per share ) is recognised as amount distributable to equity shareholders.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 1 9 5
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 AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Financial Holding Company Limited and its nominees 14,137,200 100 - -
IDFC Limited and its nominees - - 14,137,200 100
04 ReseRves and sURplUs
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
(a) Securities premium account 142,578,000 142,578,000
(b) general reserve 355,628,577 355,628,577
(c) Capital reserve 38,147,550 38,147,550
(d) Surplus in the Statement of profit and loss
opening balance 520,448,435 1,263,257,545
Add: Profit for the year 148,520,501 418,792,263
Add: Transfer from debenture redemption reserve - 625,000,000
Less: Dividend proposed to be distributed to equity shareholder - (1,484,406,000)
( ` Nil per share (Previous year ` 105 per share))
Less: Tax on dividend - (302,195,373)
Closing balance 668,968,936 520,448,435
TOTAL 1,205,323,063 1,056,802,562
05 otheR long - teRm lIaBIlItIes
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Others * 176,541 176,541
TOTAL 176,541 176,541
* Represents amounts withheld from erstwhile promoters in terms of the Share Purchase Agreement.
06 tRade payaBles
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Total outstanding dues of micro enterprises and small enterprises - -
Total outstanding dues of creditors other than micro enterprises and small enterprises
- Provision for expenses (see note 28) 26,742,807 19,672,443
- Payable to vendors 135,999,176 15,493,577
TOTAL 162,741,983 35,166,020
a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006
b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
c) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
d) No amount of interest has accrued and remained unpaid at the end of the year 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.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
196 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
07 otheR cURRent lIaBIlItIes
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Payable to gratuity fund (see note 25) 6,594,529 -
(net of gratuity receivable, current year ` 353,829 (Previous year ` Nil)
Amount received in advance - 1,656,370
Statutory dues (includes tax deducted at source, service tax, stamp duty, security transaction tax, profession tax and contribution of provident fund)
23,622,207 15,340,517
TOTAL 30,216,736 16,996,887
08 shoRt-teRm pRovIsIons
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Provision for employee benefit expense 115,000,000 174,900,000
Provision for income tax 48,225,391 57,327,051
[net of advance tax ` 247,341,539 (Previous year ` 153,070,239)]
Provision for fringe benefit tax 15,000 15,000
[net of advance tax ` 905,000 (Previous year ` 905,000)]
Provision for proposed equity dividend - 1,484,406,000
Provision for tax on proposed dividend - 302,195,373
TOTAL 163,240,391 2,018,843,424
GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK
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` ` ` ` ` ` ` ` ` ` ` `
9 tangible assets
Furniture and fixtures 532,236 - 94,867 437,369 345,610 43,856 7,148 - 32,671 363,943 73,426 186,626
(Previous year) (532,236) - - (532,236) (322,471) (47,497) (5,727) 30,085 - (345,610) (186,626) (209,765)
Office equipment 8,558,041 767,242 4,596,407 4,728,876 7,255,906 950,568 109,613 - 4,445,747 3,870,340 858,536 1,302,135
(Previous year) (7,350,588) (1,474,220) (266,767) (8,558,041) (5,039,116) (635,209) (604,257) (1,201,732) (224,408) (7,255,906) (1,302,135) (2,311,472)
Computers 31,470,826 1,921,044 15,322,956 18,068,914 24,481,181 2,995,750 339,097 - 14,741,887 13,074,141 4,994,773 6,989,645
(Previous year) (27,483,393) (4,060,633) (73,200) (31,470,826) (21,834,733) (2,122,481) (659,165) 118,619 (16,579) (24,481,181) (6,989,645) (5,648,660)
Vehicles 10,391,600 15,474,317 3,930,356 21,935,561 2,846,159 4,399,338 518,989 - 1,327,330 6,437,156 15,498,405 7,545,441
(Previous year) (5,757,356) (6,467,575) (1,833,331) (10,391,600) (1,159,080) (1,788,314) (409,899) 10,107 (501,027) (2,846,159) (7,545,441) (4,598,276)
TOTAL 50,952,703 18,162,603 23,944,586 45,170,720 34,928,856 8,389,512 974,847 - 20,547,635 23,745,580 21,425,140 16,023,847
(Previous year) (41,123,573) (12,002,428) (2,173,298) (50,952,703) (28,355,400) (4,593,501) (1,679,048) (1,042,921) (742,014) (34,928,856) (16,023,847) (12,768,173)
10 Intangible assets -other than internally generated
Tenancy rights 1,083,200 - - 1,083,200 660,604 108,617 - - - 769,221 313,979 422,596
(Previous year) (1,083,200) - - (1,083,200) (551,987) (108,320) - (297) - (660,604) (422,596) (531,213)
Computer software 18,832,541 1,522,880 4,685,490 15,669,931 15,070,437 2,512,401 - - 4,654,850 12,927,988 2,741,943 3,762,104
(Previous year) (16,236,414) (2,596,127) - (18,832,541) (12,785,218) (2,217,230) - (67,989) - (15,070,437) (3,762,104) (3,451,196)
TOTAL 19,915,741 1,522,880 4,685,490 16,753,131 15,731,041 2,621,018 - - 4,654,850 13,697,209 3,055,922 4,184,700
(Previous year) (17,319,614) (2,596,127) - (19,915,741) (13,337,205) (2,325,550) - (68,286) - (15,731,041) (4,184,700) (3,982,409)
TOTAL TANGIBLE AND
INTANGIBLE ASSETS
70,868,444 19,685,483 28,630,076 61,923,851 50,659,897 11,010,530 974,847 - 25,202,485 37,442,789 24,481,062 20,208,547
(Previous year) (58,443,187) (14,598,555) (2,173,298) (70,868,444) (41,692,605) (6,919,051) (1,679,048) (1,111,207) (742,014) (50,659,897) (20,208,547) (16,750,582)
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 1 9 7
11 non-cURRent Investments
FaCe ValUe `
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
qUantIty ` qUantIty `
trade investments (valued at cost unless stated otherwise)
Unquoted equity shares (fully paid)
Investment in subsidiaries
IDFC Capital (USA) INC. USD 0.01 100,000,000 46,240,000 100,000,000 46,240,000
IDFC Securities Singapore Pte Ltd (see note 28)
SGD1 3,140,001 149,125,695 2,400,001 114,514,045
195,365,695 160,754,045
others
BSE Limited 1 130,000 10,000 130,000 10,000
Epsilon Advisers Private Limited 10 1,250,000 15,135,000 1,250,000 15,135,000
Provision for diminution in value of investments
(15,135,000) (15,135,000)
10,000 10,000
TOTAL 195,375,695 160,764,045
12 defeRRed taX asset
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
tax effects of items constituting deferred tax assets
(a) On difference between book balance and tax balance of fixed assets 4,600,000 3,950,000
(b) Provision for doubtful debtors and investments 18,200,000 15,350,000
TOTAL 22,800,000 19,300,000
As per Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of Companies Act, 2013, the Company has taken credit of ` 3,500,000 (previous year credit of ` 9,200,000) in the Statement of Profit and Loss towards deferred tax asset on account of timing differences.
13 loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non-CURRent poRtIon
CURRent poRtIon non-CURRent poRtIon
CURRent poRtIon
` ` ` `
Security deposits
- Deposits with stock exchanges 30,502,200 - 30,502,200 -
- Other deposits 730,920 - 725,920 20,000,000
Loan and advances to employees - 686,640 - 496,353
Prepaid expenses 291,454 4,590,977 459,891 4,746,420
Advance payment of income tax 186,032,144 - 196,895,837 -
[net of provision for tax of ` 817,354,201 (Previous year ` 922,594,561)]
Advance payment of fringe benefit tax 4,914,625 - 4,914,625 -
[net of provision for tax of ` 6,625,000(Previous year ` 6,625,000)]
Balances with government authorities
- Service tax credit receivable - 1,653,753 - 143,944
Advances to suppliers - 6,185,027 - 4,524,428
TOTAL 222,471,343 13,116,397 233,498,473 29,911,145
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
198 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
14 otheR assets (consIdeRed good, Unless stated otheRwIse)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NON-CURRENT PORTION
CURRENT PORTION NON-CURRENT PORTION
CURRENT PORTION
` ` ` `
Bank deposit (see note 17) 3,173,723 - 39,800,000 -
Interest accrued on bank deposits 202,772 15,285,810 2,330,465 11,204,101
Gratuity receivable (see note below) - - - 2,775,969
Fees recoverable (considered good) - 17,175,000 - -
Expenses recoverable (considered good) (see note 28) - 13,221,788 - 3,692,286
Expenses recoverable (considered doubtful) - 3,661,209 - 3,310,581
Less:- Provisions - (3,661,209) - (3,310,581)
TOTAL 3,376,495 45,682,598 42,130,465 17,672,356
15 cURRent Investments (Valued at lower of cost and fair value, unless stated otherwise)
FACE VALUE `
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY ` QUANTITY `
Mutual funds (Unquoted)
IDFC Cash Fund - Growth scheme (Direct plan)
1000 299,167.623 550,367,848 1,344,101.430 2,284,249,976
TOTAL 550,367,848 2,284,249,976
a aggregate amount of investments in unquoted mutual funds
Cost 550,367,848 2,284,249,976
Market Value 551,012,941 2,285,754,429
Market value of investment in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
16 tRade ReceIvaBles (unsecured) (considered good unless stated otherwise)
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
` `
Outstanding for a period less than six months from the date they are due for payment 213,511,541 68,616,273
Outstanding for a period more than or equal to six months from the date they are due for payment
30,903 7,272,304
Considered doubtful outstanding for a period exceeding six months from the date they are due for payment
33,727,693 25,761,157
Provision for doubtful debts (33,727,693) (25,761,157)
TOTAL 213,542,444 75,888,577
17 cash and cash eqUIvalentsAS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non-CURRent poRtIon
CURRent poRtIon non-CURRent poRtIon
CURRent poRtIon
` ` ` `
Cash and cash equivalents
Cash on hand - 13,261 - 5,616
Balances with banks:
- In current accounts (see note 28) - 37,198,798 - 58,053,190
TOTAL CASH AND CASH EQUIVALENTS (FOR CASH FLOW PURPOSE)
- 37,212,059 - 58,058,806
others
Balances with banks:
- In deposit accounts [see note (a) and (b)] 3,173,723 374,644,773 39,800,000 327,045,828
3,173,723 374,644,773 39,800,000 327,045,828
Amount disclosed under “other assets” (see note 14) (3,173,723) - (39,800,000) -
TOTAL OTHERS - 411,856,832 - 385,104,634
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 1 9 9
a Balances with banks include deposits amounting to ` 250,623,723 (Previous year ` 249,450,000) which have an original maturity of more than 12 months.
b Balances with banks include deposits amounting to ` 377,818,496 (Previous year ` 366,845,828) which are under lien. The Company has created the lien on bank deposits for availing bank guarantee and overdraft facility for exchange margin funding. The bank guarantee are issued by bank in favour of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for exchange margin in both cash and derivatives segment.
18 RevenUe fRom opeRatIons
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Brokerage (see note 28) 358,906,424 368,146,099
Advisory Fee income (see note 26 and 28) 52,741,107 41,109,676
TOTAL 411,647,531 409,255,775
19 otheR Income
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Dividend from long-term investments 1,105,000 775,864
Dividend from current investments 615,834 1,288,071
Interest on bank deposit 31,955,944 33,987,257
Gain on sale of current investment 85,002,034 94,029,343
Gain on sale of subsidiary - 197,595,258
Gain on sale of long term investment - 20,138,742
Interest on income-tax refund 11,799,400 2,931,265
Other Interest 993,467 212,055
Profit on sale of fixed assets 33,932 61,771
TOTAL 131,505,611 351,019,626
20 opeRatIng eXpenses
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Membership and subscription (see note 26) 40,308,521 37,987,465
Clearing house maintenance charges 254,198 158,774
Depository charges 320,003 359,997
Loss on sale of misdeal stock (net) 2,259,130 1,973,534
Others 397,541 150,171
43,539,393 40,629,941
Less: Other recoveries (see note 28) 788,664 -
TOTAL 42,750,729 40,629,941
21 employee BenefIt eXpenses
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Salaries and bonus (see note 29) 341,792,302 284,677,699
Contribution to provident and other funds (see note 25) 35,595,819 19,324,211
Staff welfare expenses 3,326,560 3,748,927
380,714,681 307,750,837
Less: Other recoveries (see note 28) 21,290,838 -
TOTAL 359,423,843 307,750,837
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
200 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
22 fInance costs
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Interest on temporary overdraft 146,206 4,086,732
Bank guarantee charges 2,573,197 2,605,240
Bank charges 11,520 8,947
TOTAL 2,730,923 6,700,919
The bank guarantee facilities were availed from the nationalised/scheduled banks and were submitted to BSE/NSE (Exchanges) as margin deposit. The temporary borrowings are taken in the normal course of broking business.
23 otheR eXpenses
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
` `
Repairs and maintenance
- Equipment 2,383,181 1,598,031
- Others 579,730 1,171,587
Insurance charges 811,831 881,108
Travelling and conveyance (see note 26) 31,209,122 21,999,714
Printing and stationery 2,433,301 1,446,624
Postage, telephone and fax 8,017,429 7,414,949
Advertising and publicity 26,281,059 19,324,972
Professional fees (see note 26 and 28) 31,876,133 41,299,015
Loss on foreign exchange fluctuation 265,210 310,737
Service tax credit written off 569,543 1,922,708
Miscellaneous expenses 288,202 483,784
Donation (see note 28) 5,723,000 2,150,000
Directors’ fees 270,000 160,000
Auditor’s remuneration * 2,227,121 2,795,000
Shared services costs (see note 28) 22,955,474 14,342,223
135,890,336 117,300,452
Less: Other recoveries (see note 28) 17,184,410 -
TOTAL 118,705,926 117,300,452
¡ Break up of Auditor’s remuneration:
Audit fee 1,100,000 1,100,000
Tax audit fee 200,000 200,000
Taxation matters 100,000 100,000
Other services 815,000 1,395,000
Out of pocket expenses 12,121 -
Service Tax 80,025 141,522
TOTAL 2,307,146 2,936,522
Less:- Service tax set off claimed 80,025 141,522
TOTAL 2,227,121 2,795,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 2 0 1
24 contIngent lIaBIlItIes not pRovIded foR In Respect of:
(a) Contingent liability table
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Claims not acknowledged as debts in respect of :
Income-tax \service tax demands disputed by the Company, (net of amount provided). The matters in dispute are under appeal. The demands have been partly paid/adjusted and will be received as refund if the matter is decided in favour of the Company.
51,832,261 99,403,605
Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for:
Tangible assets 48,175 1,699,236
Intangible assets 76,045 770,784
(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.
25 employee BenefIts –(i) In accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of Companies Act, 2013, the following
disclosures have been made:
The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Provident fund 14,794,043 14,863,040
Superannuation fund 1,936,469 758,745
Pension fund 2,007,923 1,246,582
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.
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Change in the benefit obligations:
Liability at the beginning of the year 52,398,445 44,108,257
Current service cost 10,103,786 9,258,587
Interest cost 4,527,645 4,194,895
Actuarial loss /(gain) 7,053,517 3,032,815
Liabilities assumed on acquisition / (settled on divestiture) (15,122,014) -
Benefits paid (6,178,545) (8,196,109)
Liability at the end of the year 52,782,834 52,398,445
Fair value of plan assets:
Fair value of plan assets at the beginning of the year 52,398,445 38,315,842
Expected return on plan assets 4,698,736 2,904,115
Contributions 18,807,982 18,148,701
Actuarial gain on plan assets (520,505) 1,225,896
Assets Acquired on Acquisition / (Distributed on Divestiture) (23,371,637) -
Benefits paid (6,178,545) (8,196,109)
Fair value of plan assets at the end of the year 45,834,476 52,398,445
Total actuarial gain to be recognised 7,574,022 1,806,919
actual return on plan assets:
Expected return on plan assets 4,698,736 2,904,115
Actuarial gain on plan assets (520,505) 1,225,896
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
202 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Actual return on plan assets 4,178,231 4,130,011
amount recognised in the Balance Sheet:
Liability at the end of the year 52,782,834 52,398,445
Fair value of plan assets at the end of the year 45,834,476 52,398,445
Amount recognised in the balance sheet under “Other current liabilities- Payable to gratuity fund”
6,948,358 -
expenses recognised in the Statement of profit and loss under “employee benefit expenses”
Current service cost 10,103,786 9,258,587
Interest cost 4,527,645 4,194,895
Expected return on plan assets (4,698,736) (2,904,115)
Net actuarial loss to be recognised 7,574,022 1,806,919
Losses / (Gains) on Acquisition / Divestiture 8,249,623 -
Expense recognised in the Statement of Profit and Loss under “Employee benefit expenses” 25,756,340 12,356,286
Reconciliation of the liability recognised in the Balance Sheet
Opening net liability - 5,792,415
Expense recognised in the Statement of Profit and Loss under “Employee benefit expenses” 25,756,340 12,356,286
Contribution by the Company 18,807,982 18,148,701
Amount recognised in the Balance Sheet under “Other current liabilities- Payable to gratuity fund”
6,948,358 -
Expected employer’s contribution next year 8,000,000 10,000,000
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
AS ATMARCH 31, 2014
AS ATMARCH 31, 2013
AS ATMARCH 31, 2012
experience adjustments
Defined benefit obligation 52,782,834 52,398,445 44,108,257 45,907,570 45,245,851
Plan assets 45,834,476 52,398,445 38,315,842 45,709,123 21,225,319
Deficit (6,948,358) - (5,792,415) (198,447) (24,020,532)
Experience adjustment on plan liabilities
7,193,380 461,439 3,410,174 (6,027,279) (115,526)
Experience adjustment on plan assets (520,505) 1,225,896 1,346,323 5,380,092 (1,553,720)
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
Investment pattern % %
Insurer managed fund 100 100
principal assumptions
Discount rate 7.95 7.90
Return on plan assets 9.00 9.00
Salary escalation rate 8.00 8.00
As the Gratuity fund is managed by HDFC Standard Life Insurance Company Limited and Life Insurance Company details of investments are not available with the Company.
The estimates of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
26 eXpendItURe In foReIgn cURRencIes (on payment BasIs) :
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Professional fees 17,448,323 24,844,865
Others 20,761,963 18,740,199
TOTAL 38,210,286 43,585,064
earnings in foreign currencies :
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Advisory fee income 83,741,106 73,902,898
TOTAL 83,741,106 73,902,898
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 2 0 3
27 segment RepoRtIng:The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments comprise of Stock broking services and Investment banking services. Revenues and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reportable segment have been allocated on the basis of associated revenues of the segment and manpower efforts. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. The Company does not have any reportable geographic segment.
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016
FOR THE YEAR ENDED
MARCH 31, 2015
( ` ) ( ` )
Segment operating revenue
(a) Stock broking 411,647,531 409,255,775
(b) Investment banking 321,448,889 532,660,120
TOTAL 733,096,420 941,915,895
Segment results
(a) Stock broking (86,082,589) (37,193,625)
(b) Investment banking 226,502,884 283,829,923
(c) Unallocated 93,293,890 315,032,369
profit before tax 233,714,185 561,668,667
Less: Provision for tax 85,193,687 142,876,404
profit after tax 148,520,498 418,792,263
Segment assets
(a) Stock broking 631,244,883 462,372,708
(b) Investment banking 73,469,706 82,657,493
(c) Unallocated 998,356,124 2,724,327,233
TOTAL 1,703,070,713 3,269,357,434
Segment liabilities
(a) Stock broking 287,710,105 125,427,302
(b) Investment banking 7,642,856 93,563,512
(c) Unallocated 61,022,690 1,852,192,058
TOTAL 356,375,651 2,071,182,872
Capital employed
(a) Stock broking 343,534,778 336,945,407
(b) Investment banking 65,826,850 (10,906,019)
(c) Unallocated 937,333,434 872,135,175
TOTAL 1,346,695,062 1,198,174,563
Capital expenditure (including capital work-in-progress)
(a) Stock broking 24,481,062 18,694,483
(b) Investment banking - 2,143,280
TOTAL 24,481,062 20,837,763
Depreciation and amortisation
(a) Stock broking 11,010,530 8,030,258
(b) Investment banking 974,847 1,679,048
TOTAL 11,985,377 9,709,306
Significant non cash expenses other than depreciation and amortisation
(a) Stock broking 1,319,886 2,024,250
(b) Investment banking 7,729,986 26,908,883
TOTAL 9,049,872 28,933,133
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
204 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
28 Related paRty dIsclosURes:In accordance with the Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
i. Ultimate holding company:
IDFC Limited (w.e.f July 9, 2015)
ii. holding company:
IDFC Limited (upto July 8, 2015)
IDFC Financial Holding Company Limited (w.e.f July 9, 2015)
iii. Subsidiary companies:
IDFC Capital (USA) INC.
IDFC Securities Singapore Pte Ltd
iv. Fellow subsidiary companies:
IDFC Bank Limited
IDFC Foundation
The nature and volume of transactions carried out with the above related parties in the ordinary course of business:
NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
(a) Ultimate holding company
IDFC Limited Inter corporate deposits placed and redeemed - 2,005,000,000
Interest paid on inter corporate deposits - 3,596,192
Buy back of zero coupon optionally convertible debentures
- 1,250,000,000
Fees Income - 143,480,000
Shared service costs 10,150,004 21,662,912
Brokerage received 514,811 2,189,847
Professional fees - 345,000
(b) Subsidiary company
IDFC Capital (USA) INC Professional fees 25,107,315 32,409,705
Provision for expenses 7,658,992 7,564,840
IDFC Fund of Funds Limited Subscription to equity shares - 15,050,625
Redemption of equity shares - 1,394,116,092
IDFC Capital (Singapore) Pte Ltd Subscription to equity shares - 1,808,990,000
Transfer of equity shares - 2,462,166,070
IDFC Securities (Singapore) Pte Ltd. Subscription to equity shares 34,611,650 77,252,000
(c) Fellow subsidiary company
IDFC Bank Limited Commitment Fees 10,000,000 -
Fees Income 48,439,827 -
Shared services costs 17,022,678 -
Other Professional Fees 4,249,767 -
Advertising and publicity 10,101,164 -
Membership and subscription 1,542,855 -
Employee benefit expenses 29,774,124 -
Other expenses 3,529,195 -
Other receivables 11,797,540 -
Balances with bank 16,893,962 -
Provision for expenses 7,500,000 -
Transfer of fixed assets 3,425,073 -
IDFC Foundation Donation paid 5,673,000 2,000,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S L I M I T E D | 2 0 5
29 leases:In accordance with the Accounting Standard 19 on ‘Leases’ as specified u/s 133 of Companies Act, 2013, the following disclosures in respect of operating leases are made:
i. The Company has taken vehicles for certain employees under operating leases, which shall expire between April 3, 2016 and July 4, 2016. Salaries include gross rental expenses of ` 426,792 (previous year ` 1,233,069). The committed lease rentals in the future are:
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Not later than one year 80,748 453,841
Later than one year and not later than five years - 80,529
30 eaRnIngs peR shaRe :In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013, the earning per share has been computed as under:
earning per share of continuing operations
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Net profit attributable to equity shareholders (1,857,305) 223,112,340
Number of equity shares issued 14,137,200 14,137,200
Basic Earnings Per Share (0.13) 15.78
Diluted Earnings Per Share (0.13) 15.78
earning per share of total operations
PARTICULARS AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Net profit attributable to equity shareholders 148,520,501 418,792,263
Number of equity shares issued 14,137,200 14,137,200
Basic Earnings Per Share 10.51 29.62
Diluted Earnings Per Share 10.51 29.62
31 dIscontInUIng opeRatIonsIn accordance with the Accounting Standard 24 on ‘Discontinuing operations’ as specified u/s 133 of Companies Act, 2013, the following disclosures in respect of discontinuing operations are made:
The results for the year ended March 31, 2016 and for the corresponding year includes the Investment Banking business that has been transferred to IDFC Bank Limited w.e.f October 1, 2015. Investment Banking business is a discontinuing operation w.e.f October 1, 2015. However the ongoing equity capital market (ECM) mandates/deals shall be completed in the financial year 2016-17. Based on the carve-out workings prepared by Management, information required under Accounting Standard 24 on Discontinuing Operations relating to investment banking business is given below:
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016
FOR THE YEAR ENDED
MARCH 31, 2015
( ` ) ( ` )
Sale of services 321,448,889 532,660,120
Other operating revenue 107,500 66,000
TOTAL REVENUE (A) 321,556,389 532,726,120
Operating expenses 1,775,537 2,451,355
Employee benefits expenses 61,411,881 193,037,125
Finance costs 2,500 4,300
Depreciation and amortisation expense 974,847 1,679,048
Other expenses 23,158,755 24,815,486
Provisions and contingencies 7,729,986 26,908,883
TOTAL ExPENSES (B) 95,053,506 248,896,197
PROFIT BEFORE TAx FROM ORDINARY ACTIVITIES (A-B) 226,502,883 283,829,923
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
206 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
PARTICULARS FOR THE YEAR ENDED
MARCH 31, 2016
FOR THE YEAR ENDED
MARCH 31, 2015
( ` ) ( ` )
tax expense
- on ordinary activities attributable to the discontinuing operations 76,125,077 88,150,000
profit after tax of discontinuing operations 150,377,806 195,679,923
AS ATMARCH 31, 2016
AS ATMARCH 31, 2015
( ` ) ( ` )
Carrying amount of assets as at the balance sheet date relating to the discontinued business to be disposed off
73,469,706 82,657,493
Carrying amount of liabilities as at the balance sheet date relating to the discontinued business to be settled
8,385,356 94,496,604
FOR THE PERIOD ENDED
MARCH 31, 2016
FOR THE YEAR ENDED
MARCH 31, 2015
( ` ) ( ` )
net cash flow attributable to the discontinued business
Cash flows from operating activities 74,917,282 242,137,114
Cash flows from investing activities - -
Cash flows from financing activities (2,500) (4,300)
32 pRIoR yeaR’s fIgURes:Previous 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 ofIDFC Securities limited
Vikram limayeChairman
Sunil kakarDirector
Mumbai | April 25, 2016hitesh DesaiChief Financial Officer
Idfc secURItIes sIngapoRe pte. lImIted
Mr. Vikram Limaye
Dr. Rajeev Uberoi
Mr. Kumar Anand
Deloitte & Touche LLP
Standard Chartered Bank
One Finlayson Green #16-02
Singapore 049246
tel +65 6499 0700
Fax +65 65363359
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
208 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
DIRECTORS’ STATEMENT
The directors present their statement together with the audited financial statements of IDFC Securities Singapore Pte. Limited (the “Company”) for the financial year ended March 31, 2016.
In the opinion of the directors, the financial statements of the Company so as to give a true and fair view of the financial position of the Company as at March 31, 2016 and the financial performance, changes in equity and cash flows of the Company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts when they fall due.
I. dIRectoRs
The directors of the Company in office at the date of this report are:
Dr. Rajeev Uberoi
Mr. Vikram Mukund Limaye (Appointed on February 29, 2016)
Mr. Kumar Anand (Appointed on February 29, 2016)
II. aRRangements to enaBle dIRectoRs to acqUIRe BenefIts By means of the acqUIsItIon of shaRes and deBentURes
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares or debentures in the Company or any other body corporate, except for the options mentioned in paragraph 3 of the Directors’ statement.
III. dIRectoRs’ InteRest In shaRes and deBentURes The directors holding office at the end of the financial year had no interests in the share capital and debentures of the Company and
related corporations as recorded in the register of directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act except as follows:
name of dIRectoRs and companIes In whIch InteRests aRe held
oRdInaRy shaRes
shaReholdIngs RegIsteRed In name of dIRectoR
shaReholdIngs In whIch dIRectoRs aRe deemed to have an InteRest
at BegInnIng of yeaR, oR date of
appoIntment, If lateR
at end of yeaR
at BegInnIng of yeaR, oR date of
appoIntment, If lateR
at end of yeaR
Ultimate holding company - IDFC Limited
Dr. Rajeev Uberoi 150,000 132,704 – –
Mr. Vikram Mukund Limaye 2,043,728 2,043,728 – –
Iv. shaRe optIons
(a) Options to take up unissued shares
During the financial year, no options to take up unissued shares of the Company were granted.
(b) Options exercised
During the financial year, there were no shares of the Company issued by virtue of the exercise of an option to take up unissued shares.
(c) Unissued shares under option
At the end of the financial year, there were no unissued shares of the Company under options.
v. aUdItoRs
The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.
ON BEHALF OF THE DIRECTORS
Rajeev Uberoi kumar anand Director Director
April 20, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 0 9
to the memBeR of Idfc secURItIes sIngapoRe pte lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC Securities Singapore Pte. Limited (the “Company”) which comprise the statement of financial position of the Company as at March 31,2016, and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 6 to 25.
management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.
auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, 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 entity’s preparation of 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 the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by 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.
opinion
In our opinion, the financial statements of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the financial position of the Company as at March 31,2016 and the financial performance, changes in equity and cash flows of the Company for the year then ended.
Report on other legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.
Public Accountants and Chartered Accountants
Singapore
April 20, 2016
INDEPENDENT AUDITORS' REPORT
210 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes2016 US$
2015 US$
assets
Current assets
Cash and cash equivalents 641,091 718,838
Trade and other receivables 7 151,313 889
Prepayments 7,530 2,607
TOTAL CURRENT ASSETS 799,934 722,334
Non-current assets
Plant and equipment 8 - 1,034
TOTAL ASSETS 799,934 723,368
lIaBIlIty and net eqUIty
Current liability
Other payables and accruals 9 30,339 24,369
Capital and reserves
Share capital 10 2,444,785 1,920,856
Accumulated losses (1,675,190) (1,221,857)
Total equity 769,595 698,999
total lIaBIlIty anD eqUIty 799,934 723,368
See accompanying notes to financial statements.
STATEMENT OF FINANCIAL POSITION MARCH 31, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 1 1
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIvE INCOME YEAR ENDED MARCH 31, 2016
Notes2016 US$
2015 US$
Revenue 11 111,162 52,833
Staff costs (472,702) (530,950)
Depreciation expense 8 (1,034) (1,795)
Other operating income 12 20,787 -
Other operating expenses 13 (111,546) (213,689)
loss before income tax 14 (453,333) (693,601)
Income tax expense 15 - -
LOSS FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE YEAR
(453,333) (693,601)
See accompanying notes to financial statements.
212 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
STATEMENT OF CHANGES IN EqUITy YEAR ENDED MARCH 31, 2016
ShaRe CapItal US$
aCCUmUlateD loSSeS
US$
total US$
Balance at April 1, 2014 639,216 (528,256) 110,960
Transactions with owners, recognised directly in equity
Issue of shares during the year 1,281,640 - 1,281,640
loss for the year, representing total comprehensive loss for the year - (693,601) (693,601)
Balance at March 31, 2015 1,920,856 (1,221,857) 698,999
Transactions with owners, recognised directly in equity
Issue of shares during the year 523,929 - 523,929
loss for the year, representing total comprehensive loss for the year - (453,333) (453,333)
BALANCE AT MARCH 31, 2016 2,444,785 (1,675,190) 769,595
See accompanying notes to financial statements.
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 1 3
2016 US$
2015 US$
opeRatIng actIvItIes
Loss before income tax (453,333) (693,601)
adjustment for:
Depreciation expense 1,034 1,795
opeRatIng cash flows BefoRe movements In woRKIng capItal (452,299) (691,806)
Trade and other receivable (150,424) 70,226
Prepayments (4,923) (46)
Other payables and accruals 5,970 (62,414)
net cash Used In opeRatIng actIvItIes (601,676) (684,040)
fInancIng actIvIty
Proceeds from issue of share capital, representing net cash from financing activity 523,929 1,281,640
net (decRease) IncRease In cash and cash eqUIvalents (77,747) 597,600
Cash and cash equivalents at beginning of the year 718,838 121,238
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 641,091 718,838
See accompanying notes to financial statements.
STATEMENT CASHFLOwS YEAR ENDED MARCH 31, 2016
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
214 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01 geneRalThe Company (Registration No. 201228582N) is incorporated in Singapore with its registered office and principal place of business at One Finlayson Green #16-02, Singapore 049246. The financial statements are expressed in United States dollars.
The principal activity of the Company is dealing in securities. During the year on February 17, 2016, the Company obtained a licence under the Securities and Futures Act (Cap. 289) to provide dealing in securities services.
The financial statements of the Company for the financial year ended March 31,2016 were authorised for issue by the Board of Directors on April 20, 2016.
02 sUmmaRy of sIgnIfIcant accoUntIng polIcIes
BasIs of accoUntIng
The financial statements have been prepared in accordance with the historical cost basisand are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability which market participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as value in use in FRS 36 Impairment of Asset.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which are described as follows:
¡ Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
¡ Level 2 inputs are inputs, other than the quoted market prices included within Level 1, that are observable for the asset or
liability, either directly or indirectly; and
¡ Level 3 inputs are unobservable inputs for the asset or liability.
adoptIon of new and RevIsed standaRds
On April 1, 2015, the Company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the Company’s accounting policies and has no material effect on the amounts reported for the current or prior years.
At the date of authorisation of these financial statements, the following FRSs and amendments to FRS that are relevant to the Company were issued but not effective:
¡ FRS 109 Financial Instruments3
¡ FRS 115 Revenue from Contracts with Customers3
¡ Amendments to FRS 1 Presentation of Financial Statements: Disclosure Initiative1
¡ Amendments to FRS 7 Statement of Cash Flows: Disclosure Initiative2
¡ Improvements to Financial Reporting Standards (November 2014)1
1 Applies to annual periods beginning on or after January 1, 2016, with early application permitted.
2 Applies to annual periods beginning on or after January 1, 2017, with early application permitted.
3 Applies to annual periods beginning on or after January 1, 2018, with early application permitted.
Consequential amendments were also made to various standards as a result of these new/revised standards.
The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material impact on the financial statements of the Company in the period of their initial adoption.
fInancIal InstRUments
Financial assets and financial liabilities are recognised on the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 1 5
fInancIal assets
effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income
or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or
payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and
expense is recognised on an effective interest basis.
loans and receivables
Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans
and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest
is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be
immaterial.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired where there
is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated
future cash flows of the investment have been impacted.
For financial assets, objective evidence of impairment could include:
¡ significant financial difficulty of the issuer or counterparty; or
¡ default or delinquency in interest or principal payments; or
¡ it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and
the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial
asset is reduced by the impairment loss directly for all financial assets with the exception of loans and receivables where the carrying
amount is reduced through the use of an allowance account. When a loan and receivable is uncollectible, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the
carrying amount of the allowance account are recognised in profit or loss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the
extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would
have been had the impairment not been recognised.
Derecognition of financial assets
The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor
retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognises its
retained interest in the asset and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks
and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
fInancIal lIaBIlItIes and eqUIty InstRUments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual
arrangements entered into and the definitions of a financial liability and an equity instrument.
equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Equity instruments are recorded at the proceeds received, net of direct issue costs.
other payables
Other payables and accruals are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised
cost, using the effective interest method, with interest expense recognised on an effective yield basis.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
216 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
offsetting arrangements
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company and the group has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be exercisable by any of the counter parties, both in the normal course of business and in the event of default, insolvency or bankruptcy.
leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
operating lease
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
plant and eqUIpment
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the written down value method, on the following bases:
Computers - 30 months
Fully depreciated assets still in use are retained in the financial statements.
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes in estimate accounted for on a prospective basis.
The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
ImpaIRment of non-fInancIal assets
At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of the asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as immediately in profit or loss.
pRovIsIons
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
RevenUe RecognItIon
Revenue is measured at the fair value of the consideration received or receivable.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 1 7
fee Income
Fee income is recognised as income in the period in which the service has been rendered and the Company’s rights to receive payment
has been established.
RetIRement BenefIt costs
Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed
retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans
where the Company’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.
employee leave entItlement
Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for
annual leave as a result of services rendered by employees up to the end of the reporting period.
Income taX
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit
or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years
and it further excludes items that are not taxable or tax deductible. The Company’s liability for current tax is calculated using tax rates
(and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based
on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and the Company intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised as an expense or income in profit or loss.
foReIgn cURRency tRansactIons and tRanslatIon
The financial statements of the Company are measured and presented in the currency of the primary economic environment in which
the entity operates (its functional currency). The financial statements of the Company are presented in United States dollar, which is the
functional currency of the Company.
In preparing the financial statements of the Company, transactions in currencies other than the Company’s functional currency are
recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items that
are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss
for the period.
cash and BanK Balances In the statement of cash flows
Cash and cash equivalents in the statement of cash flows comprise of cash at bank that are subject to an insignificant risk of changes in
value.
03 cRItIcal accoUntIng JUdgements and Key soURces of estImatIon UnceRtaInty
In the application of the Company’s accounting policies, which are described in Note 2, management is required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
218 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Critical judgement in applying the entity’s accounting policies
The management is of the opinion that any instances of application of judgements are not expected to have a significant effect on the
amounts recognised in the financial statements.
key sources of estimation uncertainty and judgements
The management is of the opinion that there are no key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year.
04 fInancIal InstRUments, fInancIal RIsKs and capItal RIsKs management
a. CategoRIeS oF FInanCIal InStRUmentS
The following table sets out the financial instruments as at the end of the reporting period:
2016 2015
US$ US$
fInancIal assets
Loans and receivables (including cash and cash equivalents) 792,404 719,727
fInancIal lIaBIlItIes
Amortised cost 30,339 24,369
At the end of reporting period, the Company does not have any financial instruments subject to offsetting, enforceable master
netting arrangements and similar agreements.
B. FInanCIal RISk management polICIeS anD oBJeCtIVeS
The Company has a system of controls in place to create an acceptable balance between the probability of risks occurring and
the cost of managing the risks. The management continually monitors the Company’s risk management process to ensure that
an appropriate balance between risk and control is achieved.
The Company’s activities expose it to certain financial risks such as market risk (including exchange rate risk and interest rate
risk), credit risk and liquidity risk.
(i) Foreign currency risk
The Company transacts business in various foreign currencies, including Singapore dollar and therefore is exposed to
foreign exchange risk.
At the end of the reporting period, the carrying amounts of significant monetary assets and monetary liabilities
denominated in currencies other than the Company’s functional currency are as follows:
2016 2015
InDIan RUpee SIngapoRe DollaR InDIan RUpee SIngapoRe DollaR
assets
Cash and bank balances - 585,245 - 684,660
Other receivable 75,378 75,935 - 889
TOTAL 75,378 661,180 - 685,549
lIaBIlItIes
Other payables - (26,030) - (20,171)
net foreign exchange position 75,378 635,150 - 665,378
Foreign currency sensitivity
The following table details the sensitivity to an increase and decrease in the relevant foreign currencies against the
functional currency of the Company. The sensitivity rate represents management’s assessment of the possible change in
foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items
and adjusts their translation at the period end for a change in foreign currency rates.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 1 9
If the relevant foreign currency strengthens by against the functional currency of the Company, loss before tax will
decrease by:
loSS BeFoRe tax
2016 US$
2015 US$
Singapore dollar - Strengthened 9% (2015 : 13%) 57,164 86,499
Indian Rupee - Strengthened 11% (2015 : Nil) 8,292 -
A weakening of the functional currency of the Company against the above currencies would have had the equal but
opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
(ii) Interest rate risk
The Company does not have any significant interest bearing assets and liabilities, hence it is not exposed to interest rate
risk. Accordingly, no sensitivity analysis is presented.
(iii) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company.
The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults.
The credit risk on liquid funds (bank deposits) is limited as the counterparties are banks with high credit-ratings assigned
by international credit-rating agencies.
At the end of the reporting period, there were no concentrations of credit risk. The carrying amount of financial assets
recorded in the financial statements, grossed up for any allowances for losses, represents the Company’s maximum
exposure to credit risk without taking account of the value at any collateral obtained.
(iv) liquidity risk
The Company maintains sufficient cash and bank balances to fund its daily operating requirement. In addition, the
Company also relies on the holding company to fund any shortfall in liquidity requirements. All financial assets and
financial liabilities of the Company are non-interest bearing and repayable on demand or within 1 year.
c. CapItal RISk management anD oBJeCtIVeS
The Company manages its capital to ensure that it will be able to continue on a going concern while maximising the return to
stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Company comprises of issued share capital net of accumulated losses.
The Company is required to maintain a minimum amount of capital as prescribed under the Securities and Futures Act
(Chapter 289) and relevant Regulations. The Company is in compliance with the capital requirements for the year ended March
31, 2016.
There were no changes to the Company’s overall strategy during the year.
d. FaIR ValUe oF FInanCIal aSSetS anD FInanCIal lIaBIlItIeS
Management consider that the carrying amounts of cash and cash equivalents, trade and other receivables, and other payables
and accrual that are carried at amortised cost to approximate their respective fair values due to the relatively short-term
maturity. There are no financial instruments that are measured at fair value on a recurring basis.
05 holdIng company and Related company tRansactIons
The Company is a wholly-owned subsidiary of IDFC Securities Ltd., India. IDFC Securities Ltd., India is a wholly owned subsidiary of IDFC
Financial Holding Company Ltd., India, which in turn is a wholly owned subsidiary of IDFC Ltd., India. The Company’s ultimate holding
company is IDFC Limited, incorporated in India. Related companies in these financial statements refer to members of the ultimate
holding company’s group of companies.
Some of the Company’s transactions and arrangements are between members of the group and the effects of these on the basis
determined between the parties are reflected in these financial statements. The intercompany balances are unsecured, interest-free and
repayable on demand unless otherwise stated.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
220 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Significant related company transactions are as follows:
2016 2015
US$ US$
Recharges by a related company (44,928) (51,025)
Placement fee revenue from a related company 75,378 -
06 otheR Related paRty tRansactIonsSome of the Company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements.
Compensation of directors and key management personnel
The remuneration of directors and other members of key management during the year was as follows:
2016 2015
US$ US$
Salaries and other short-term benefits 433,740 311,948
07 tRade and otheR ReceIvaBles
2016 2015
US$ US$
Related company - Trade 75,378 -
Third Parties - Non-trade 1,921 889
Deposits 74,014 -
TOTAL 151,313 889
The average credit period is 30 days (2015 : 30 days). At year-end, there were no balances which were past due and no impairment allowance was made.
08 plant and eqUIpment
NAME OF ASSOCIATE COMPUTERS
US$
cost:
At April 1, 2014 4,398
Additions -
At March 31, 2015 4,398
Additions -
AT MARCH 31, 2016 4,398
accUmUlated depRecIatIon:
At April 1, 2014 1,569
Depreciation 1,795
At March 31, 2015 3,364
depRecIatIon 1,034
AT MARCH 31, 2016 4,398
caRRyIng amoUnt:
AT MARCH 31, 2016 -
At March 31, 2015 1,034
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C S E C U R I T I E S S I N G A P O R E P T E L I M I T E D | 2 2 1
09 otheR payaBles and accRUals
2016 2015
US$ US$
Accrued expenses 21,325 16,927
Other payables 2,910 -
Salary related accruals 6,104 7,442
TOTAL 30,339 24,369
10 shaRe capItal
2016 2015 2016 2015
NUMBER OF ORDINARY SHARES US$ US$
IssUed and fUlly paId:
At beginning of year 2,400,001 800,001 1,920,856 639,216
Issued for cash 740,000 1,600,000 523,929 1,281,640
at the end of the year 3,140,001 2,400,001 2,444,785 1,920,856
Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the Company.
11 RevenUe
2016 2015
US$ US$
Fee income 111,162 52,833
12 otheR opeRatIng Income
2016 2015
US$ US$
Interest income 4,915 -
Foreign exchange gain 15,872 -
20,787 -
13 otheR opeRatIng eXpenses
2016 2015
US$ US$
Communication expenses 5,899 6,559
Professional fees 67,560 69,512
travelling and conveyance 2,868 9,413
Subscription/membership fee 17,790 30,627
Foreign exchange loss - 77,770
Rental 5,396 6,946
others 12,033 12,862
TOTAL 111,546 213,689
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
222 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
14 loss BefoRe Income taX Loss before income tax is arrived at after charging:
2016 2015
US$ US$
Staff costs (excluding directors’ remuneration and costs of defined contribution plans)
189,290 195,147
Costs of defined contribution plans 26,666 24,224
15 Income taX eXpense The income tax benefit varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2015 : 17%) to loss before income tax as a result of the following differences:
2016 2015
US$ US$
Loss before income tax (453,333) (693,601)
Income tax benefit at statutory rate 17% (2015 : 17%) (77,067) (117,912)
Effects of expenses that are not deductible in determining taxable profit - 15,213
Effects of unused tax losses not recognised as deferred tax assets 77,067 102,699
Income tax expense - -
Subject to the agreement by the tax authorities, at the end of the reporting period, the Company has unutilised tax losses of US$1,561,238 (2015 : US$1,132,005) available for offset against future profit. Deferred tax asset of US$265,410 (2015 : US$192,441) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.
Mr. Clifford Goldman
Deloitte & Touche LLP
JP Morgan Chase Bank NA
Regus Business Centre
600 Third Avenue
2nd Floor New York, USA 10016
tel +1 646 571 2303
CEO
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc capItal (Usa) Inc.
224 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Fifth Annual Report of IDFC Capital (USA), Inc. together with the audited accounts for the year ended March 31, 2016.
fInancIal ResUlts
paRtIcUlaRs foR the yeaR ended maRch 31, 2016
amoUnt In Us$
Total Income 354,166
Less: Total Expenses 334,309
Profit before Tax 19,857
Less: Income Taxes (999)
Net Income 20,856
opeRatIonal RevIew and fUtURe oUtlooK
The US business has shown stable client traction and additions throughout the year. Although the environment remains challenging, the firm has been able to add new clients and have been successful in terms of increasing its ranking in the large clients as well. Expect some improvement in revenues going forward due to improvement in client ranking and newly acquired clients begin to ramp up.
IDFC Capital (USA), Inc., (“the Company”) is the wholly owned subsidiary of IDFC Securities Limited. It was incorporated in the State of New York on August 3, 2009. IDFC Securities Limited, is in turn is a wholly owned subsidiary of IDFC Financial Holding Company Limited. On September 15, 2011, the Company became a broker-dealer and as such is registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority.
shaRe capItal
During the year, there was no change in the paid up equity share capital of the Company.
acKnowledgements
The Board wishes to thank the clients, custodians Banks and other statutory and regulatory authorities for their support to your Company. The Board also places on record its appreciation for the sincere efforts of the staff.
The Board would also like to express its gratitude for the unstinted support and guidance received from IDFC Securities Limited and IDFC, the ultimate parent organization and also other group companies.
clifford goldman
CEO
June 25, 2016
I D F C C A P I TA L ( U S A ) , I N C . | 2 2 5
INDEPENDENT AUDITOR’S REPORT
to the Board of Directors and Stockholder of
IDFC Capital (USa), Inc.
We have audited the accompanying statement of financial condition of IDFC Capital (USA), Inc. (the “Company”) as of March 31, 2016,
and the related statements of operations, cash flows, and changes in stockholder’s equity for the year then ended. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the financial position of IDFC Capital (USA), Inc. as of
March 31, 2016, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
As described in Notes 1 and 7, the activities of the Company include significant transactions with IDFC Limited and its affiliates that may
not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had operated as an
unaffiliated business. Our opinion is not modified with respect to this matter.
Deloitte & touche llp
New York
May 20, 2016
226 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
STATEMENT OF FINANCIAL CONDITION March 31, 2016
AMOUNT IN US$
assets
Cash 785,241
Due from parent 115,463
Fixed assets - net of accumulated depreciation of $44,373 -
Deferred tax asset 57,100
Income tax receivable 7,808
Other assets 18,245
TOTAL ASSETS 983,857
lIaBIlItIes and stocKholdeR’s eqUIty
liabilities:
Accrued expenses and other liabilities 58,338
TOTAL LIABILITIES 58,338
Commitments
stocKholdeR’s eqUIty:
Common stock ($.01 par value; 100,000,000 shares authorized, issued and outstanding) 1,000,000
Accumulated deficit (74,481)
TOTAL STOCKHOLDER’S EQUITY 925,519
TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY 983,857
I D F C C A P I TA L ( U S A ) , I N C . | 2 2 7
STATEMENT OF OPERATIONS For the Year Ended March 31, 2016
AMOUNT IN US$
RevenUes
Advisory fees 354,166
eXpenses
Employee compensation and benefits 169,673
Consulting and professional fees 109,806
Rent, utilities and other office expenses 28,633
Market data and communications 7,712
Regulatory fees and expenses 6,222
Travel, entertainment and promotional expenses 2,749
Other 9,514
TOTAL ExPENSES 334,309
net income before income taxes 19,857
Income tax benefit (999)
net income 20,856
228 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
STATEMENT OF CHANGES IN STOCKHOLDER’S EqUITy For the Year Ended March 31, 2016
amoUnt In US$
ShaReS Common StoCk aCCUmUlateD DeFICIt
total
Balance, April 1, 2015 100,000,000 1,000,000 (95,337) 904,663
Net income - - 20,856 20,856
Balance, March 31, 2016 100,000,000 1,000,000 (74,481) 925,519
I D F C C A P I TA L ( U S A ) , I N C . | 2 2 9
STATEMENT OF CASH FLOwS For the Year Ended March 31, 2016
AMOUNT IN US$
cash flows fRom opeRatIng actIvItIes
net income 20,856
adjustments to reconcile net income to net cash provided by operating activities
Depreciation 5,045
Deferred tax 5,400
Decrease (increase) in operating assets
Due from parent 30,653
Income tax receivable (6,399)
Other assets (1,516)
(Decrease) increase in operating liabilities
Compensation payable (22,424)
Accrued expenses and other liabilities 41,700
Income tax payable (8,354)
NET CASH PROVIDED BY OPERATING ACTIVITIES 64,961
NET INCREASE IN CASH 64,961
cash
Beginning of year 720,280
End of year 785,241
sUpplemental dIsclosURes of cash flow InfoRmatIon
Cash paid for taxes 8,534
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
230 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
01. oRganIzatIonIDFC Capital (USA), Inc. (the “Company”), a wholly owned subsidiary of IDFC Securities Limited (“the Parent”) was incorporated in the State of New York on August 9, 2009. The Parent is a wholly owned subsidiary of IDFC Limited (“the Ultimate Parent”). The Company is a broker- dealer registered with the Securities and Exchange Commission (the “SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”).
The Company’s principal business activity is distributing research and market commentary and brokering transactions in Indian equities for U.S. institutional clients. The customers introduced by the Company transact their business on delivery versus payment basis with settlement of the transactions facilitated by an affiliate in India for securities traded in Indian stock markets.
02. sIgnIfIcant accoUntIng polIcIes
Basis of presentation
The Company’s financial statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Use of estimates
In preparing the financial statements, management makes estimates and assumptions that may affect the reported amounts. Such estimates include assumptions used in determining the provision for income taxes. Actual results could differ from these estimates.
Fixed assets
Fixed assets represent equipment and are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight-line basis over the assets estimated useful lives of 3 years.
advisory Fees
The Company receives fees from the Parent for performing sales and marketing functions on behalf of the Parent in order to attract institutional customers. The fees are based on expenses incurred by the Company in relation to the marketing activities such as compensation and benefits, professional services, occupancy, travel and other operating costs, plus a transfer pricing agreement profit factor of 6%.
Income taxes
Deferred tax assets and liabilities are recognized for the future tax effect of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. In the event it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is recorded.
The Company applies a single, comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on its tax returns. Income tax expense is based on pre-tax accounting income, including adjustments made for the recognition or derecognition related to uncertain tax positions.
The Company evaluates uncertain tax positions by reviewing against applicable tax law all positions taken by the Company with respect to tax years for which the statute of limitations remains open. A tax benefit from an uncertain tax position will be recognized when it is considered to be more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position.
03. Income taXesThe components of the income tax benefit for the year ended March 31, 2016 are as follows:
AMOUNT IN US$
tax (BeneFIt) pRoVISIon
CURRent DeFeRReD total
Federal (5,685) 2,138 (3,547)
State and local (714) 3,262 2,548
(6,399) 5,400 (999)
Deferred income taxes are provided for the effects of temporary differences between the tax basis of an asset or liability and its reported amount in the Statement of Financial Condition. As of March 31, 2016, the Company has a deferred tax asset of $57,100, recorded in the accompanying Statement of Financial Condition, and is a result of temporary differences primarily related to amortization of organization costs.
The Company has determined that it is more likely than not that the deferred tax asset will be realized and therefore there is no valuation allowance against the deferred tax asset.
The difference between the Company’s current income tax (benefit) provision using statutory U.S. tax rate and its effective tax rate is primarily due to overpayment of prior year state and local income taxes.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C C A P I TA L ( U S A ) , I N C . | 2 3 1
Based upon the Company’s review of its federal, state, local income tax returns and tax filing positions, the Company determined no unrecognized tax benefits for uncertain tax positions were required to be recorded, as such, there were no reserves recorded for uncertain tax positions for the Company’s open tax years (2013-2016). In addition, the Company does not believe that it has any tax positions for which it is reasonably possible that it will be required to record significant amounts of unrecognized tax benefits within the next twelve months.
04. Recent accoUntIng developmentsFASB issued ASU 2014-15: Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in this Update provide guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the impact of the adoption of this accounting standards update on its financial statements.
FASB issued ASU 2015-14, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The new guidance is effective for the fiscal years beginning after December 15, 2017. The Company is currently evaluating the potential impact on its financial statements and the related disclosures, as well as the available transition methods.
05. concentRatIon of cRedIt RIsKIn the normal course of business, the Company’s activities involve transactions with the Parent. These activities may expose the Company to risk in the event the Parent is unable to fulfill its contractual obligations.
The Company maintains substantially all of its cash balance at one major financial institution. The Company does not believe that these amounts are exposed to significant risk.
06. net capItal ReqUIRementsThe Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule15c3-1) (“the Rule”) under the Securities Exchange Act of 1934. The Company has elected to use the alternative method permitted by the Rule, which requires the Company maintain minimum net capital, as defined, shall not be less than $250,000 or 2% of aggregate debit balances arising from customer transactions. At March 31, 2016, the Company had net capital of $726,903 which was $476,903 in excess of required minimum net capital of $250,000.
The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company’s activities are limited to those set forth in the condition for exemption appearing in paragraph (k)(2)(i).
07. Related paRty tRansactIonThe Company entered into a service level agreement with the Parent on December 26, 2011 whereby the Company will distribute research on behalf of the Parent.
The Company earned $354,166 in advisory fees from the Parent for the year ended March 31, 2016, representing 106% of total expenses, in accordance with the service level agreement, of which $115,463 remained unpaid as of March 31, 2016 and is reflected as receivable from parent in the statement of financial condition.
08. commItments and contIngencIesThe Company rents office space under an operating lease, which expires August 31, 2016. The future minimum annual base rent payments required under this operating lease is $11,695.
Total rental expense for the year ended March 31, 2016, was $25,332 and is included in rent, utilities and other office expenses on the Statement of Operations.
09. fIXed assetsFixed assets consisted of the following at March 31, 2016:
AMOUNT IN US$
Equipment 44,373
Less: accumulated depreciation (44,373)
-
Depreciation expense for the year ended March 31, 2016 was $5,045.
10. faIR valUe of fInancIal InstRUmentsSubstantially all of the Company’s assets and liabilities are carried at fair value or contracted amounts which approximate fair value.
11. sUBseqUent eventsThe Company has evaluated subsequent events up to the date on which the financial statements are issued. As a result of the Company’s evaluation, the Company noted no subsequent events that require adjustment to, or disclosure in, these financial statements.
U65993MH1999PLC123191
Mr. Vikram Limaye (Chairperson)
Mr. Vishwavir Saran Das
Ms. Anita Ramachandran
Mr. Eric Ward
S. R. Batliboi & Co. LLP
Chartered Accountants
Standard Chartered Bank
IDFC Bank Limited
One Indiabulls Centre,
6th Floor, Jupiter Mills Compound,
841, Senapati Bapat Marg,
Elphinstone Road (West)
Mumbai 400 013
tel +91 22 6628 9999
Fax + 91 22 2421 5051
Website www.idfcmf.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc asset management company lImIted
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 3 3
BOARD'S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Sixteenth Annual Report of IDFC Asset Management Company Limited (“the Company” or “Idfc amc”) together with the audited financial statements for the financial year ended March 31, 2016.fInancIal hIghlIghts
paRtIcUlaRs (amoUnt In `)
foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
Total Income 3,255,954,776 2,784,871,082
Less: Total Expenses 1,628,191,505 1,664,031,021
Profit before Tax 1,627,763,271 1,120,840,061
Less: Provision for Tax 527,353,342 417,081,000
Profit after Tax 1,100,409,929 703,759,061
company’s affaIRs
I. mutual Funds IDFC Asset Management Company Limited (“IDFC amC” or “the Company”) is the Investment Manager of the schemes of IDFC Mutual Fund (“IDFC mF”). The Assets under Management of IDFC MF were `51,448.31 crore (excluding Fund of Funds Schemes) as on March 31, 2016.
new Scheme launches: During the year, the AMC launched a new scheme under IDFC MF viz., IDFC Corporate Bond Fund, an open-ended debt scheme that would invest only in corporate bonds and would not take any exposure to G-Sec. The AMC also received SEBI clearance for launch of IDFC Nifty ETF and IDFC Sensex ETF and would launch the schemes at appropriate opportunity. Further, the Board approved the launch of new schemes viz., IDFC Balanced Fund and IDFC Money Market Fund, subject to SEBI clearance.
II. portfolio management Services:The Hon’ble High Court of Bombay sanctioned the scheme of amalgamation of IDFC IA with the Company vide its Order dated April 18, 2015, having Appointed Date as April 1, 2015. The certified copy of the Order was also filed with the Registrar of Companies, Mumbai on June 23, 2015. Portfolio Management business & Investment Management of Venture Capital Fund are now carried on directly through the Company and the Company has received necessary approvals from SEBI.
amoUnt to Be caRRIed foRwaRd to ReseRvesThe details of amount transferred to reserves are given in note no. 5 of the Notes forming part of the financial statements.
dIvIdendThe Company has made a profit after tax of ` 110.04 crore For FY15-16. The Directors recommend a dividend of `305 (i.e. 3050%) per equity share on face value of `10 for the financial year ended March 31, 2016.
sUBsIdIaRy companIes / assocIates / JoInt ventUResAs on March 31, 2016, the Company had one subsidiary, namely IDFC Investment Managers (Mauritius) Limited (“Imml”). The Board of Directors of the Company reviews the affairs of its subsidiary companies regularly. In accordance with the provisions of Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statement including requisite details of all the subsidiaries. Further, a statement containing the salient features of the financial statement and details of performance and financial positions of IMML in the format AOC-I is appended as annexure I.
IDFC IA filed an application with the Hon’ble High Court of Bombay under Sections 391-394 of Companies Act, 1956 to amalgamate with IDFC AMC. The Hon’ble High Court of Bombay approved the amalgamation of IDFC IA with IDFC AMC vide its Order dated April 18, 2015. The certified copy of the Order was also filed with the Registrar of Companies, Mumbai on June 23, 2015 and the scheme was effective from that date having Appointed date as April 1, 2015. Consequent upon the amalgamation of IDFC IA with IDFC AMC, the Portfolio Management business & Investment Management of Venture Capital Fund was carried out by the Company.
shaRe capItal UpdateIDFC Limited (“IDFC”) was granted an in-principle approval by the Reserve Bank of India on April 9, 2014 to set up a bank in new private sector. The terms and conditions contained in the Guidelines for Licensing of New Banks in the Private Sector dated February 22, 2013 mandates that all new banks would need to be set up through a Non-Operative Financial Holding Company (“noFhC”). The NOFHC was required to hold the Bank as well as all the other financial services entities of IDFC Group which are regulated by RBI or other financial sector regulators. Accordingly, IDFC Financial Holding Company Limited (“IDFC FhCl”) was incorporated as a wholly owned subsidiary company of IDFC.
Consequent to the restructuring, equity stake held by IDFC in its regulated subsidiary companies engaged in financial activities, including IDFC AMC, was required to be transferred to IDFC FHCL. However, IDFC would continue to be the Sponsor of IDFC Mutual Fund. On July 9, 2015, the Board approved the transfer of approximately 75% of equity stake of IDFC AMC from IDFC to IDFC FHCL. The said transfer was executed after obtaining prior approval of IDFC AMC Trustee Company Limited and Securities and Exchange Board of India.
paRtIcUlaRs of employees
The Company had 180 employees as on March 31, 2016.
The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of
234 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request.
pUBlIc deposItsThe Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and InvestmentsIMML, having paid up capital of USD 157,290 which was equivalent to INR 85.44 lacs, approached the Company for further investment by subscribing to its equity capital which would help IMML for the business expansion and growth. Looking at the future prospects of IMML, the Management of the Company recommended subscription to the equity share capital of IMML.
Accordingly, the Board of IDFC AMC enhanced overall limit of investment in IMML to INR 5 crore, including all the current investments and also invested additional USD 250,000 (approximately INR 1.59 crore) in the equity capital of IMML. As on March 31, 2016, the paid up capital of IMML and total investment of IDFC AMC in IMML was USD 407,290.
foReIgn eXchange eXpendItURe and eaRnIngThe particulars regarding foreign exchange expenditure and earning are furnished in Note no. 21 and 22 respectively in the Notes forming part of the Financial Statements.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIonSince the Company does not undertake any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRsIn 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 would retire by rotation at the ensuing Annual General Meeting (“agm”) and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Mr. Vikram Limaye, as a Director at the ensuing AGM.
Pursuant to the provisions of Section 149, 150, 152, 160 and other applicable provisions of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and Schedule IV to the Companies Act, 2013 and based on the recommendation of the Nomination and Remuneration Committee (“nRC”) of the Company and subject to the approval of the members at the AGM, the Board at its meeting held on July 16, 2015 appointed Ms. Anita Ramachandran as an Additional Director in the category of Independent Director (“ID”) of the Company. It is proposed to appoint her as ID to hold office till the conclusion of the Eighteenth (18th) AGM of the Company to be held for the FY 2017-18.
Mr. Pradip Madhavji and Dr. Bakul Patel were appointed as IDs of the Company at the Extra- Ordinary General Meeting (“egm”) of the Company held on December 19, 2014 to hold office till the conclusion of the 15th AGM of the Company for FY 14-15 held on July 16, 2015. Consequently, the term of Mr. Pradip Madhavji and Dr. Bakul Patel was completed on July 16, 2015 and they cease to be IDs of the Company from that day. Further, Dr. Rajiv B Lall resigned as Director of the Company w.e.f. July 16, 2015. The Board places on record sincere appreciation for services rendered by them during their tenure.
declaRatIon of IndependenceThe Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.
meetIngs of the BoaRdDuring the year, five Board meetings were held on April 23, 2015, July 16, 2015, October 21, 2015, January 28, 2016 and March 9, 2016. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.
Attendance details of Board of Directors for the Board Meetings held during FY16 are given below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. Vikram Limaye 00488534 Chairperson 5 5
Mr. Vishwavir Saran Das 03627147 Independent Director 5 5
Ms. Anita Ramachandran1 00118188 Independent Director 3 3
Mr. Eric Ward 03522521 Nominee of NATIxIS Global Asset Management 5 4
Dr. Rajiv B Lall2 00131782 Chairperson 2 1
Mr. PradipMadhavji2 00549826 Independent Director 2 2
Dr. Bakul Patel2 00580300 Independent Director 2 21 Appointed as an Independent Director w.e.f. August 1, 20152 Ceased to be Directors w.e.f. July 16, 2015
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 3 5
BOARD'S REPORT
aUdIt commIttee
During the year, four Audit Committee meetings were held on April 23, 2015, July 16, 2015, October 21, 2015 and January 28, 2016. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.
On October 17, 2015, the Audit Committee of the Company was re-constituted as per the provisions of Section 177 of the Companies Act, 2013 and Rules made thereunder. The composition of Audit Committee is in compliance with the Companies Act, 2013.
Attendance details of Directors for the Audit Committee Meetings held during FY16 are given below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Vishwavir S. Das1 Independent Director Chairperson 2 2
Ms. Anita Ramachandran2 Independent Director Member 2 1
Mr. Eric Ward Nominee of NATIxIS Global Asset Management Member 4 4
Mr. Pradip Madhavji3 Independent Director Chairperson 2 2
Dr. Bakul Patel3 Independent Director Member 2 2
1 Appointed as a Chairperson of the Committee w.e.f. October 17, 20152 Appointed as a Member of the Committee w.e.f. October 13, 20153 Ceased to be Members of the Company w.e.f. July 16, 2015
nomInatIon and RemUneRatIon commIttee
During the year, One meeting of NRC was held on July 16, 2015.
NRC was re-constituted on October 13, 2015 as per the provisions of the section 178 of the Companies Act, 2013 and Rules made thereunder. The composition of NRC is in compliance with the Companies Act, 2013.
Attendance details of Directors for the NRC Meetings held during FY16 are given below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Ms. Anita Ramachandran1 Independent Director Chairperson N.A. N.A.
Mr. Vikram Limaye Nominee for IDFC Member 1 1
Mr. Vishwavir S. Das Independent Director Member 1 1
Mr. Eric Ward Nominee of NATIxIS Global Asset Management Member 1 1
Dr. Rajiv B. Lall2 Director Member 1 1
Mr. PradipMadhavji2 Independent Director Member 1 1
Dr. Bakul Patel2 Independent Director Member 1 1
1 Appointed as a Member w.e.f. October 13, 20152 Ceased to be Members of the Company w.e.f. July 16, 2015
BoaRd evalUatIon
The evaluation for the Directors and the Board was done through circulation of questionnaires, which would assess the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
RemUneRatIon polIcy
On recommendation of NRC, the Board adopted a Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees which is line with the Section 178 of Companies Act, 2013 and Rules made thereunder.
statUtoRy aUdItoRs
At the 14th AGM of the Company, the Shareholders approved the appointment of S.R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration Number- 301003E, a member firm of Ernst & Young Global Limited, as Statutory Auditors for a period of five consecutive years i.e. from 14th AGM of the Company held for FY14 to 19th AGM of the Company to be held for FY19.
As per the provisions of the Companies Act, 2013 and Rules made thereunder, the above appointment is required to be ratified at every AGM. The Statutory Auditors have confirmed that they are eligible to be appointed as Statutory Auditors for FY17.
236 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD'S REPORT
The Members are requested to ratify the appointment of S.R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the Company for FY17.
There are no qualifications or observations or other remarks made by the Statutory Auditors in their report.
secRetaRIal aUdIt
Pursuant to Section 204 of the Companies Act, 2013 and the Rules made thereunder, the Company appointed M/s Kaushik Jhaveri & Co., Practicing Company Secretary, as Secretarial Auditors to undertake the Secretarial Audit of the Company for FY16.
There are no qualifications or observations or other remarks made by the Secretarial Auditors in their report.
The Secretarial Audit Report forms part of this Board’s Report as annexure II.
paRtIcUlaRs of contRacts oR aRRangements wIth Related paRtIes UndeR sectIon 188 of the companIes act, 2013
In all related party transactions that were entered into during the financial year, 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, the Board of Directors of the Company adopted the “Policy on Related Party Transactions” on the same lines as approved by IDFC Limited, the ultimate holding Company. The said Policy is also uploaded on the website of the Company.
The Audit Committee reviews the details of related party transactions entered into by the Company on quarterly basis.
Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.
InteRnal contRol systems
The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.
RIsK management
The Audit Committee of the Company endeavours to review the risk register at every meeting held during the year. The Members of the Audit Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.
mateRIal changes/ commItments
As per Section 134(3)(l) of Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
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.
InfoRmatIon ReqUIRed UndeR seXUal haRassment of women at woRKplace (pReventIon, pRohIBItIon & RedRessal) act, 2013
There were no instances of Sexual Harassment that were reported during FY15-16 under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
eXtRact of annUal RetURn
The extract of the Annual Return in the prescribed Form No. MGT 9 are appended as annexure III.
coRpoRate socIal ResponsIBIlIty
During the year, Corporate Social Responsibility Committee (“CSR Committee”) was reconstituted on October 13, 2015 as per the provisions of the Section 135 and Schedule VII of the Companies Act, 2013. As on March 31, 2016, the CSR Committee comprises of the following:
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 3 7
1. Mr. Vikram Limaye - Chairperson
2. Mr. Vishwavir Saran Das
3. Ms. Anita Ramachandran
The composition of CSR Committee is in compliance with the Companies Act, 2013. The disclosure of contents of Corporate Social Responsibility Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as annexure IV.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual financial statements on a going concern basis; and
(e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
acKnowledgements
The Board places on record its gratitude to the Securities and Exchange Board of India, Reserve Bank of India, Association of Mutual Funds of India, other regulatory authorities and institutions, Investors in the Mutual Fund schemes and to the Members for their continued guidance and support and expresses its sincere appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year.
The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
vIKRam lImayeChairperson
Mumbai, June 25, 2016
238 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[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 Investment Managers (Mauritius) Limited
3 Reporting period for the subsidiary concerned, if different from the holding company’s reporting period
April 1, 2015 to March 31, 2016
4 Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries.
INR*
5 Share capital 25,069,224
6 Reserves & surplus (7,529,220)
7 Total assets 18,186,750
8 Total Liabilities 18,186,750
9 Investments -
10 Turnover -
11 Profit/(Loss) before taxation (2,252,511)
12 Provision for taxation -
13 Profit/(Loss) after taxation (2,252,511)
14 Proposed Dividend -
15 % of shareholding 100%
*Exchange Rate:
Closing Rate: 1 USD = 66.3329
Average Rate: 1 USD = 65.6947
note:
IDFC Investment Advisors Limited was amalgamated with IDFC Asset Management Company Limited effective June 23, 2015.
PART “B”: assocIates and JoInt ventURes
Statement pursuant to Section 129 (3) of the Companies act, 2013 related to associate Companies and Joint Ventures:
NOT APPLICABLE
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Vikram limaye anita Ramachandran
Director Director
nirav Shah
April 27, 2016 Company Secretary
anneXURe IFORM AOC-I
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 3 9
FoR the FInanCIal yeaR enDeD maRCh 31, 2016
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014]
To,
The Members,
IDFC asset management Company limited
One India Bulls Centre, 841 Jupiter Mills Compound,
Senapati Bapat Marg, Elphinstone (West),
Mumbai – 400 013
CIN :U65993MH1999PLC123191
We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate
practices by IDFC aSSet management Company lImIteD having CIN:U65993MH1999PLC123191 (hereinafter called “the Company”).
Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory
compliances and expressing our opinion thereon.
Based on our verification of Company’s books, papers, minute books, forms and returns filed and other records maintained by the
Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of
secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on
March 31, 2016 (‘Audit Period’) complied with the statutory provisions listed hereunder and also that the Company has proper Board –
processes and compliance – mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
We have examined the books, papers, minute books, forms and returns filed and other records maintained by IDFC aSSet management
Company lImIteD for the financial year ended on March 31, 2016 according to the provisions of:
(i) The Companies Act, 2013 (‘the Act’) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; (not applicable to the company during
the audit period)
(iii) The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment
and Overseas Direct Investment. The Company does not have any External Commercial Borrowings for the financial year.
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(not applicable to the company during the audit period)
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 and 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (not applicable
to the company during the audit period)
(d) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999; (not applicable to the company during the audit period)
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (not applicable to the
company during the audit period)
(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993 regarding the
Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (not applicable to the company
during the audit period)
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (not applicable to the company during
the audit period).
anneXURe IISECRETARIAL AUDIT REPORT
240 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
We have relied on the report of Internal Auditors placed at the Board Meeting and on the representations made by the Company, its
officers for systems and mechanisms developed by the Company in order to ensure compliances under the other applicable Acts, Laws
and Regulations to the Company. The list of Acts, Other Laws and Regulations specifically applicable to the Company are given below:
(i) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended;
(ii) The Prevention of Money Laundering Act, 2002
We have also examined compliance with applicable clauses of the following:
(i) Secretarial Standards issued by The Institute of Company Secretaries of India;
(ii) The Listing Agreements entered into by the Company with Stock Exchange(s), if applicable; (not applicable to the company during
the audit period)
(iii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015;
During the period under review, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines and
Standards etc. as mentioned above, to the extent applicable.
we further inform that the Company has adequate Composition of Board of Directors as per SEBI (Mutual Funds) Regulations, 1996 and Companies Act, 2013. During the audit period the Composition of the Board of Directors has been changed which is below the prescribed number as provided in Articles of Association. As informed by the Management, the Company is in process of Alteration of Articles to bring the complete set of Articles in line with the existing provisions of Companies Act, 2013.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven
days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the
meeting and for meaningful participation at the meeting.
During the period under review, the decisions were carried unanimously and no dissenting views were observed, while reviewing the
minutes.
We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the
Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
We further report that during the period under review IDFC Investment Advisors Limited, wholly owned subsidiary of the Company,
had filed a Petition/an Application to the Hon’ble High Court of Judicature at Bombay for Amalgamation of IDFC Investment Advisors
Limited (Transferor Company) with this company i.e. IDFC Asset Management Company Limited (Transferee Company). The Hon’ble
High Court of Bombay approved the said amalgamation vide its order dated 18th April, 2015. The certified copy of the order was also
filed with the Registrar of Companies, Mumbai on 23rd June, 2015 and the scheme was effective from that date having Appointed date
as 1st April, 2015.
for Kaushik m. Jhaveri & co.,Practising Company Secretary
Kaushik m. JhaveriFCS No.: 4254; CP No. : 2592
Mumbai, April 27, 2016
anneXURe IISECRETARIAL AUDIT REPORT
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 4 1
as on the financial year ended on march 31, 2016
[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 U65993MH1999PLC123191
ii) Registration Date 20/12/1999
iii) Name of the Company IDFC ASSET MANAGEMENT COMPANY LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares
Indian Non-Government Company
v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra.
Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051
vi) Whether listed company Yes / No No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any
TSR Darashaw Limited
6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011. Tel.: +91 22 6656 8484
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. Asset Management 66301 96.54%
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1 IDFC Limited L65191TN1997PLC037415
Ultimate Holding
Indirectly approx. 75%
Section 2(46)
2 IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding approx. 75% Section 2(46)
3 IDFC Investment Managers (Mauritius) Limited
N.A. Subsidiary 100% Section 2(87)
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 yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
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. 2,009,277 6 2,009,283 75% 2,009,277 6 2,009,283 75% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other. NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (a) (1):- 2,009,277 6 2,009,283 75% 2,009,277 6 2,009,283 75% nIl
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
01 RegIstRatIon and otheR detaIls
242 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR
% change dURIng
the yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
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):- nIl nIl nIl nIl nIl nIl nIl nIl nIl
total shareholding of promoter (a) = (a)(1)+(a)(2)
2,009,277 6 2,009,283 75% 2,009,277 6 2,009,283 75% nIl
B. public Shareholding
1. Institutions nIl nIl nIl nIl nIl nIl nIl nIl nIl
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 NIL NIL NIL NIL NIL NIL NIL NIL NIL
ii) Overseas 669,762 NIL 669,762 25% 669,762 NIL 669,762 25% NIL
b) Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL
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) NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (B)(2):- 669,762 nIl 669,762 25% 669,762 nIl 669,762 25% nIl
total public Shareholding (B) = (B)(1) + (B)(2)
669,762 nIl 669,762 25% 669,762 nIl 669,762 25% nIl
C. Shares held by Custodian for gDRs & aDRs
nIl nIl nIl nIl nIl nIl nIl nIl nIl
grand total (a+B+C) 2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% nIl
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 4 3
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR
shaRe holdIng at the end of the yeaR
% change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
no. of shaRes
% of total shaRes of
the company
%of shaRes pledged/
encUmBeRed to total shaRes
1. IDFC Limited 2,009,283 75% NIL NIL NIL NIL (100%)
2. IDFC Financial Holding Company Limited
NIL NIL NIL 2,009,283 75% NIL 100%
total 2,009,283 75% 2,009,283 75%
(iii) Change in promoters’ Shareholding:
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 2,009,283 75% 2,009,283 75%
2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):
2,009,283 shares transferred from IDFC
Limited and its nominees to IDFC Financial Holding Company Limited and its nominees on July 9, 2015
75% 2,009,283 shares transferred from IDFC
Limited and its nominees to IDFC Financial Holding Company Limited and its nominees on July 9, 2015
75%
3 At the end of the year 2,009,283 75% 2,009,283 75%
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel: NOT APPLICABLE
a. Remuneration to managing Director, Whole-time Directors and/or manager: NOT APPLICABLE
B. Remuneration to other directors: IN `
sR. no.
paRtIcUlaRs of RemUneRatIon name of dIRectoRs total amoUnt
RaJIv B. lall
pRadIp madhavJI
BaKUl patel
vIshwavIR saRan das
vIKRam lImaye
eRIc waRd
anIta RamachandRan
1. Independent Directors
Fee for attending board committee meetings
NIL 100,000 100,000 185,000 NIL NIL 100,000 485,000
Commission NIL NIL NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL NIL NIL
total (1) nIl 100,000 100,000 185,000 nIl nIl 100,000 485,000
2. other non-executive Directors NIL NIL NIL NIL NIL NIL NIL NIL
Fee for attending board committee meetings
Commission
Others, please specify
total (2) nIl nIl nIl nIl nIl nIl nIl
total (B) = (1 + 2) nIl 100,000 100,000 185,000 nIl nIl 100,000 485,000
Overall Ceiling as per the Act Refer Note
Note: Aforesaid payment of sitting fees is within overall limits prescribed by the Companies Act, 2013.
C. Remuneration to key managerial personnel other than mD/manager/WtD: NOT APPLICABLE
vII. penaltIeS/pUnIShment/CompoUnDIng oF oFFenCeS: NIL
anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
244 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[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 CRORE
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no csR pRoJect oR actIvIty IdentIfIed
sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
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
0.42
0.06 0.08
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.03 0.06
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 0.09 0.11
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.07 0.07
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
0.04 0.04
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.02 0.02
total 0.42 0.31 0.38
7 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
0.28
0.08 0.10
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 0.10 0.10
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 0.06 0.06
total 0.28 0.24 0.26
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
0.27
0.07 0.07
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects;
Cl. (iv) ensuring environmental sustainability;
Cl. (x) rural development projects.
Meghalaya - Across State 0.06 0.10
12 Setting up a centre of excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 0.04 0.04
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.01 0.01
total 0.27 0.18 0.22
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 0.97 0.31 0.43
total 0.97 0.31 0.43
total Direct expense of project & programmes (a) 1.04 1.29
overhead expense (restricted to the 5% of total CSR expenditure) (B) 0.09 0.12
total (a) + (B) 1.94 1.13 1.41
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
anneXURe IvCORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 4 5
[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 CRORE
(1) (2) (3) (4) (5) (6) (7) (8)
sR. no csR pRoJect oR actIvIty IdentIfIed
sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)
pRoJects oR pRogRams (1) local aRea oR otheR (2) specIfy the state and dIstRIct wheRe pRoJects oR pRogRams was UndeRtaKen
amoUnt oUtlay
(BUdget)
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
0.42
0.06 0.08
IMP
LE
ME
NT
ING
AG
EN
CY
- I
DF
C F
OU
ND
AT
ION
*
2 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.
Cl.(ii) promoting education Uttarakhand - Dehradun, Nainital, Haridwar, Udham Singh Nagar and Tehri.
0.03 0.06
3 Improvement in learning outcomes and universalization of primary education for a set of 60 schools in the backward blocks of Ramgarh and Kishangarh through an identified set of interventions and infrastructure improvements.
Cl.(ii) promoting education Rajasthan - Alwar 0.09 0.11
4 Promoting Digital Literacy amongst School Students to enable access to universal knowledge, quality education, healthcare, transparent governance and economic opportunities.
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.07 0.07
5 Support to Janaagraha Centre for Citizenship and Democracy to strengthen and improve the quality of life in Indian cities and towns.
Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects
Gujarat - Ahmadabad & Surat, Karnataka - Bangalore, Madhya Pradesh - Bhopal, Odisha - Bhubaneswar, Chandigarh, Tamilnadu - Chennai, Kerala - Thiruvananthapuram, Uttarakhand - Dehradun, Delhi, Andhra Pradesh - Hyderabad, Rajasthan - Jaipur, Uttar Pradesh - Kanpur & Lucknow, West Bengal - Kolkata, Punjab - Ludhiana, Maharashtra - Mumbai, Bihar - Patna, Chhattisgarh - Raipur, Jharkhand - Ranchi
0.04 0.04
6 Improvement of infrastructure facilities at Anganwadi centre and Primary Schools at Sanghakheda Kalan Village
Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.02 0.02
total 0.42 0.31 0.38
7 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
0.28
0.08 0.10
8 Providing emergency food supplies, house hold items and non-food items (NFIs) to meet the urgent needs of Families affected by flood in Chennai
Cl.(i) promoting health care including preventive health care
Tamilnadu - Chennai 0.10 0.10
9 Support to Kamla Nehru Memorial Hospital for the maintenance cost of the essential cancer treatment equipment used for providing cancer treatment to underprivileged/economic weaker section of the society.
Cl.(i) promoting health care including preventive health care
Uttar Pradesh - Allahabad 0.06 0.06
total 0.28 0.24 0.26
10 Cattle Care program for breed improvement by providing services such as Artificial Insemination (AI) & other Veterinary Services to the Cattle farmers which have helped in their livelihood promotion.
Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad, Harda, Khandwa, Khargone and Dhar
0.27
0.07 0.07
11 Improving the aspired quality of life for the people through the development of infrastructure projects - (i) Setting up of Micro Hydel for supply of electricity, (ii) Solar street light and (iii) Clean drinking water in Mawlyngbwa Village, Meghalaya
Cl.(ii) livelihood enhancement projects;
Cl. (iv) ensuring environmental sustainability;
Cl. (x) rural development projects.
Meghalaya - Across State 0.06 0.10
12 Setting up a centre of excellence for developing Handloom and Crafts as a means of sustainable livelihoods for the women in the remote areas of Uttarakhand
Cl.(ii) livelihood enhancement projects, Uttarakhand - Almora 0.04 0.04
13 Skill development programme for improving the employment opportunities for the youth. Cl.(ii) livelihood enhancement projects, Madhya Pradesh - Hoshangabad 0.01 0.01
total 0.27 0.18 0.22
14 Other programmes (including research & studies). Various clauses of Schedule VII All India coverage 0.97 0.31 0.43
total 0.97 0.31 0.43
total Direct expense of project & programmes (a) 1.04 1.29
overhead expense (restricted to the 5% of total CSR expenditure) (B) 0.09 0.12
total (a) + (B) 1.94 1.13 1.41
*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 Inclusion and environmental sustainability such as water supply, sanitation, renewable energy, slum re-development and affordable housing.
we heReBy ceRtIfy that the ImplementatIon and monItoRIng of csR polIcy
Is In complIance wIth csR oBJectIves and polIcy of the company.
246 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[Pursuant to clause (o) of sub-section (3) of section 134 of the Act and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]
1. a brief outline of the CSR policy of IDFC asset management Company limited (“the Company”), including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.
The CSR policy is to ensure that CSR activities are not performed in silos and that it be skillfully and inextricably woven into the fabric of the Company’s business strategy for overall value creation for all stakeholders. IDFC believes that profitability must be complemented by a sense of responsibility towards all stakeholders with a view to make a material, visible and lasting difference to the lives of disadvantaged sections of the people, preferably in the immediate vicinity in which the Company operates but at the same time ensure widespread spatial distribution of its CSR activities Pan-India befitting its status as a conscientious corporate citizen.
Section 135 of Companies Act, 2013 (“the Act”) read with Companies (Corporate Social Responsibility Policy) Rules 2014 requires IDFC AMC Ltd. to mandatorily spend on CSR.
During the year, the Company carried out CSR activities through its associate company, namely, IDFC Foundation, a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).
The object of the CSR activities would seek to –
(a) serve the poor, marginalised and underprivileged
(b) promote inclusion
(c) be sustainable
(d) meet needs of the larger community and society
IDFC Foundation, as implementing agency on behalf of IDFC Limited and its group companies, undertook the following CSR activities which fall within the ambit of the activities listed in Schedule VII of the Act for promoting the development of –
(a) livelihoods
(b) rural 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, renewable energy, slum re-development and affordable housing.
2. the Composition of the CSR Committee.
Mr. Vikram Limaye Chairperson
Mr. V.S Das Member - Independent Director
Ms. Anita Ramachandran Member - Independent Director
3. average net profit of the company for last three financial years. ` 97.27 cr.
4. prescribed csR expenditure (two per cent of the amount as in item 3 above) ` 1.94 cr.
5. details of csR spent during the financial year. ` 1.94 cr.
(a) Total amount to be spent for the financial year; ` 1.94 Cr.
(b) Amount unspent, if any; NIL
anneXURe IvCORPORATE SOCIAL RESPONSIBILITy (CSR)
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 4 7
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc asset management company lImIted
Report on the Financial Statements
We have audited the accompanying standalone financial statements of IDFC Asset Management Company Limited (“the Company”),
which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)
with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with 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
of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance
of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by
the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control
relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the
financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements give
the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on
that date.
Report on other legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of
sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the
Order.
2. As required by section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the
books of account;
248 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
(d) In our opinion, the aforesaid standalone 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 written representations received from the directors as on March 31, 2016, and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164
(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate Report in “Annexure A” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer
Note 29 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses; and
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company.
For S.R. Batliboi & Co. llp Chartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 4 9
ANNExURE TO THE INDEPENDENT AUDITOR’S REPORT
annexure referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even
date
Re: IDFC asset management Company limited
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, there are no immovable properties, included in
fixed assets of the company and accordingly, the requirements under paragraph 3(i)(c) of the Order are not applicable to the
Company.
(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 4(ii) of the Order are not
applicable to the Company.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to
companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the
Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and
hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and
securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable. Accordingly, the
provisions of clause 3(iv) of the Order are not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under
Section 148(1) of the Companies Act, 2013, for the services of the Company.
(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of
custom, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with
the appropriate authorities though there has been a slight delay in a few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund,
employees’ state insurance, income-tax, service tax, sales-tax, custom duty, excise duty, value added tax, cess and other
material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became
payable.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of custom, duty of
excise, value added tax and cess on account of any dispute, are as follows:
name of the statUte natURe of dUes amoUnt (`) peRIod to whIch the amoUnt Relates
foRUm wheRe the dIspUte Is pendIng
Income Tax Act, 1961 Income tax demand payable on PTC trust in which the Company was one of the beneficiaries
3,03,58,620 Assessment Year 2009-10 Income Tax Appellate Tribunal
20,32,120 Assessment Year 2010-11
(viii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and
according to information and explanations given by the management, we are of the opinion that the Company has not defaulted in
repayment of dues to a financial institution, bank or debenture holders or government.
(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and
according to the information and explanations given by the management, the Company has not raised any money way of initial
public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the
Company and hence not commented upon.
250 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE TO THE INDEPENDENT AUDITOR’S REPORT
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and
according to the information and explanations given by the management, we report that no fraud on the Company by the officers
and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the provisions of section 197 read with Schedule V of the
Act is not applicable to the company and hence reporting under clause 3(xi) are not applicable and hence not commented upon.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the
Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance
with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial
statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has
not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under
review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash
transactions with directors or persons connected with him as referred to in section 192 of Companies Act , 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934
are not applicable to the Company.
For S.R. Batliboi & Co. llp Chartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 5 1
ANNExURE A TO THE INDEPENDENT AUDITOR’S REPORT
annexURe a to the InDepenDent aUDItoR’S RepoRt oF eVen Date on the FInanCIal StatementS oF IDFC aSSet management Company lImIteD
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
to the members of IDFC asset management Company limited We have audited the internal financial controls over financial reporting of IDFC Asset Management Company Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial ControlsThe Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
explanatory paragraphWe also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act, the financial statements of IDFC Asset Management Company Limited, which comprise the Balance Sheet as at March 31, 2016, the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated April 27, 2016 expressed an unqualified opinion thereon.
For S. R. Batliboi & Co. llp Chartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
252 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
NOTES ` ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 4 26,790,450 26,790,450
(b) Reserves and surplus 5 1,234,484,556 855,269,993
1,261,275,006 882,060,443
Non-current liabilities
(a) Other long-term liabilities 6 8,974,174 8,181,769
8,974,174 8,181,769
Current liabilities
(a) Other current liabilities 7 53,492,873 172,164,499
(b) Short-term provisions 8 1,459,529,132 1,176,824,947
1,513,022,005 1,348,989,446
TOTAL 2,783,271,185 2,239,231,658
assets
Non-current assets
(a) Fixed assets
Tangible assets 9 39,153,887 35,870,462
Intangible assets 10 9,373,417 9,042,082
48,527,304 44,912,544
(b) Non-current investments 11 167,861,224 139,544,224
(c) Deferred tax assets (net) 12 29,587,000 29,346,000
(d) Long-term loans and advances 13 125,675,612 149,270,729
323,123,836 318,160,953
371,651,140 363,073,497
Current assets
(a) Current investments 14 2,163,092,053 1,547,746,526
(b) Trade receivables 15 110,788,130 75,275,276
(c) Cash and bank balances 16 45,707,506 159,235,787
(d) Short-term loans and advances 13 92,032,356 93,900,572
2,411,620,045 1,876,158,161
TOTAL 2,783,271,185 2,239,231,658
Summary of significant accounting policies 3
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 5 3
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
NOTES ` `
I Income
Revenue from operations 17 3,156,132,584 2,714,772,672
Other income 18 99,822,192 70,098,410
TOTAL INCOME (I) 3,255,954,776 2,784,871,082
II eXpenses
Employee benefits expense 19 563,316,234 518,485,169
Depreciation and amortisation expense 9, 10 24,588,244 37,314,609
Other expenses 20 1,040,287,027 1,108,231,243
TOTAL ExPENSES (II) 1,628,191,505 1,664,031,021
III pRofIt BefoRe taX (I - II) 1,627,763,271 1,120,840,061
Iv taX eXpense
Current tax 570,453,000 422,243,000
Deferred tax (233,432) (5,162,000)
Adjustment of tax relating to earlier periods (42,866,226) -
TOTAL TAx ExPENSE (IV) 527,353,342 417,081,000
V pRoFIt FoR the yeaR FRom ContInUIng opeRatIonS (III - IV) 1,100,409,929 703,759,061
Basic and diluted earnings per equity share (Nominal value of share ` 10) 27 410.75 262.69
Summary of significant accounting policies 3
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For S.R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
254 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
` ` `
(a) cash flow fRom opeRatIng actIvItIes
pRofIt / (loss) BefoRe taXatIon 1,627,763,271 1,120,840,061
adjustment for:
Add/(Less) : Depreciation and amortisation 24,588,244 37,314,609
Add/(Less) : Lease escalation charge 602,035 (599,556)
Add/(Less) : Loss on sale of Fixed assets (net of profit) (171,742) 87,246
Add/(Less) : Profit on sale of other investments (99,226,323) (61,131,802)
operating profit before working capital changes 1,553,555,485 1,096,510,558
Changes in working capital:
(Increase)/decrease in long term loans and advances 56,866,709 19,506,518
(Increase)/decrease in trade receivables 496,095 4,775,756
(Increase)/decrease in short term loans and advances 5,224,243 24,147,931
Increase/(decrease) in other current liabilities (119,142,818) 63,001,224
Increase/(decrease) in short term provisions (77,027,116) 84,965,122
(133,582,887) 196,396,551
Cash generated from/(used in) operations 1,419,972,598 1,292,907,109
Direct taxes paid (net of refund) (554,369,871) (336,898,719)
net cash flow fRom opeRatIng actIvItIes (A) 865,602,727 956,008,390
(B) cash flow fRom InvestIng actIvItIes
Purchase of fixed asset including capital work-in-progress (27,305,157) (28,190,070)
Sale proceeds from fixed assets 931,928 69,550
Purchase of investments (3,392,160,182) (3,110,936,245)
Sale proceeds on sale of investments 3,081,509,205 3,024,281,447
Investment in subsidiaries (16,525,000) (5,975,000)
Purchase of other investments - (500,000)
net cash flow fRom InvestIng actIvItIes (B) (353,549,206) (121,250,318)
(c) cash flow fRom fInancIng actIvItIes
Dividend paid (including dividend tax) (628,766,773) (783,587,174)
net cash flow fRom fInancIng actIvItIes (C) (628,766,773) (783,587,174)
net increase/(decrease) in cash and cash equivalents (a + B + C) (116,713,252) 51,170,897
Cash and cash equivalents as at beginning of the year (refer note 16)
159,235,787 108,064,890
Cash and cash equivalents of the merged company (refer note 31) 3,184,971 -
Cash and cash equivalents as at end of the year (refer note 16) 45,707,506 159,235,787
(116,713,252) 51,170,897
Investing and Operating activities exclude non cash transactions on account of amalgamation (refer note 31)
As per our report of even date
For S.R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 5 5
01 BacKgRoUndIDFC Asset Management Company Limited (‘the Company’) is a public limited company, incorporated in India and regulated by The Securities Exchange Board of India (“SEBI”). The Company provides asset management services, portfolio management and investment advisory services. IDFC Investment Advisors Limited, subsidiary of the Company, had filed a petition with the Bombay High Court on December 22, 2014 to obtain its sanction to a Scheme of Amalgamation for carrying out an amalgamation of IDFC Investment Advisors Limited with the Company.
The Amalgamation is effective from April 01, 2015 (Appointed Date) as approved by the Honorable High Court of Bombay (“High Court”) vide its order dated April 18, 2015 which had been filed by the Company with the Registrar of Companies on June 23, 2015 (“Effective Date”). The said scheme of merger as approved by the High Court shall be effective from the Appointed Date but shall be operative from the Effective Date, hence the business of subsidiary has been transferred to and vested with the Holding Company on going concern basis. Also refer to note no 31.
IDFC Limited has transferred its shareholding in the Company to IDFC Financial Holding Company Limited which is a wholly owned subsidiary of IDFC Limited with effect from July 09, 2015.
02 BasIs of pRepaRatIonThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on the accrual basis under the historical cost convention.
The accounting policies followed in the preparation of financial statements are consistent with those followed in the previous year.
03 sIgnIfIcant accoUntIng polIcIes
a. USe oF eStImateS
The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
B. InVeStmentS
Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Long term investments are carried at acquisition cost. However, a provision is made for diminution other than temporary on an individual basis.
Current investments are carried in the financial statement at lower of cost or fair value on an individual investment basis.
On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to Statement of Profit and Loss.
c. tangIBle FIxeD aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for the intended use, less accumulated depreciation and accumulated losses, if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Leasehold Improvements are shown at historical cost less accumulated depreciation.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the year during which such expenses are incurred.
The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of remaining asset.
d. DepReCIatIon on tangIBle FIxeD aSSetS
Depreciation on tangible fixed assets is provided on straight-line method, as per the useful life prescribed in schedule II to the Companies Act, 2013 except in case of assets costing less than `5,000 each, which are fully depreciated in the year of capitalization and vehicles and certain office equipments, in which case, life of asset has been internally assessed.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
256 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
¡ Computers for 3 years
¡ Servers and networks for 6 years
¡ Furniture for 10 years
¡ Office Equipment for 5 years
¡ Vehicle for 4 years
¡ Leasehold improvements over the extended lease term or 5 years whichever is earlier.
Depreciation on additions during the year is provided on a pro-rata basis.
e. IntangIBle aSSetS anD amoRtISatIon
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised over a period of three years on a straight line method. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
f. ImpaIRment oF tangIBle anD IntangIBle aSSetS
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists or when annual impairment testing of an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and it’s value in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted for their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. In determining net selling price, recent market transactions are taken into account. If available, If no such transaction can be identified , an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognised in the revaluation reserve up to the amount of any previous revaluation. After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or the carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Profit and Loss unless the assets is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
g. ReVenUe ReCognItIonS
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.
Asset management fees are recognised net of service tax on an accrual basis in terms of Investment Management Agreement entered into by the Company with IDFC AMC Trustee Company Limited and in accordance with SEBI guidelines.
Income from portfolio management and advisory services is recognised at price agreed in accordance with the arrangement with the customers.
Interest
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Profit and Loss.
Dividends
Dividend income is recognised when the Company’s right to receive dividend is established at the reporting date.
h. FoReIgn CURRenCy tRanSaCtIonS
Initial recognition
Foreign currency transactions are recorded in the reported currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transactions.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 5 7
Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction. Non monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
exchange differences
Exchange differences are recognised as income or as expenses in the period in which they arise.
I. opeRatIng leaSeS
Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Rental charges over the term of such leases, after taking into account the escalation clause, are charged to the Statement of Profit and Loss on a straight line basis over the extended lease term.
J. expenSe UnDeR employee StoCk optIon SChemeS
The Ultimate Holding Company has formulated Employee Stock Option Schemes (‘the ESOS’) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the Guidelines’). The ESOS provides for grant of stock options to employees (including employees of subsidiary companies) to acquire equity shares of the Ultimate Holding Company that vest in a graded manner and that are to be exercised within a specified period. In accordance with the Guidelines and the Guidance Note on ‘Accounting for Employees Share-based Payments’ issued by the Institute of Chartered Accountants of India, the excess, if any, of the closing market price on the day prior to the date of grant of the stock options under the ESOS over the exercise price is amortised on a straight-line method over the vesting period and the cost is allocated to the Company to be charged to Statement of Profit and Loss as employee benefits expense. In case the vested/unvested stock options expire unexercised/get lapsed/cancelled, the Company credits the amount charged to the Statement of Profit and Loss.
K. RetIRement anD otheR employee BeneFIt
Retirement benefit in the form of provident fund, superannuation fund and pension fund is a defined contribution scheme and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made. The Company has no obligation, other than the contribution payable to the provident fund, superannuation fund and pension fund.
If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment.
The Company operates a defined plan for its employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end which is determined using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the Statement of Profit and Loss.
Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.
l. pRoVISIonS
A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.
m. InCome tax
Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961, enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
258 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
n. ContIngent lIaBIlItIeS A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
o. CaSh anD CaSh eqUIValentS
Cash and cash equivalents for the purpose of Cash Flow Statement comprises cash at bank, cash in hand, fixed deposits with an original maturity of three months or less.
p. eaRnIng peR ShaRe
Basic earnings per share is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. amalgamatIon aCCoUntIng
The Company treats an amalgamation in the nature of merger if it satisfies all the following criteria:
(i) All assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee Company.
(ii) The business of the transferor company is intented to be carried on, after the amalgamation, by the transferee Company.
(iii) The transferee Company does not intend to make any adjustment to the book values of the assets and liabilities of the transferor company, except to ensure uniformity of accounting policies.
R. Segment RepoRtIng
The Company’s primary business segments are reflected based on the principal business carried out, i.e. Asset Management Services, Investment Advisory and Portfolio Management Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.
04 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
aUthoRIsed shaRes
Equity shares of ` 10 each 35,000,000 350,000,000 25,000,000 250,000,000
IssUed, sUBscRIBed & fUlly paId-Up shaRes
Equity shares of ` 10 each 2,679,045 26,790,450 2,679,045 26,790,450
TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 26,790,450 26,790,450
Note:- Pursuant to the scheme of amalgamation by the Bombay High Court becoming effective and consequent to the amalgamation of IDFC Investment Advisors Limited, with the Company, the authorised capital has changed as laid down in the scheme.
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
Outstanding at the beginning of the year 2,679,045 26,790,450 2,679,045 26,790,450
Issued during the year - - - -
OUTSTANDING AT THE END OF THE YEAR 2,679,045 26,790,450 2,679,045 26,790,450
(b) terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupee. During the year ended March 31, 2016, dividend of `305 per share (Previous year `195 per share) is recognised as amount distributable to equity shareholders. 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 exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 5 9
(c) Shares held by holding/ultimate holding company
Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 2,009,283 20,092,830
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
2,009,283 20,092,830 - -
(d) Details of shareholders holding more than 5% of the equity shares in the Company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER % OF HOLDING NUMBER % OF HOLDING
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 2,009,283 75.00%
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
2,009,283 75.00% - -
Natixis Global Asset Management Asia Pte. Limited 669,762 25.00% 669,762 25.00%
(e) proposed dividends on equity shares:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
The board proposed dividend on equity shares after the balance sheet date
Proposed dividend on equity shares for the year ended on March 31, 2016: `305 per share (previous year `195)
817,108,725 522,413,775
05 ReseRves and sURplUs
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
(a) secURItIes pRemIUm accoUnt
Opening balance 221,897,167 221,897,167
Add: Premium on issue of equity shares - -
Closing balance 221,897,167 221,897,167
(B) capItal RedemptIon ReseRve
Opening balance 197,925,000 197,925,000
Add: Transferred from Statement of Profit and Loss - -
Closing balance 197,925,000 197,925,000
(c) geneRal ReseRve
Opening balance 226,815,000 156,439,000
Add: Transferred on amalgamation (refer note (a) below) 8,755,000 -
Add: Transferred from Statement of Profit and Loss 110,041,000 70,376,000
Closing balance 345,611,000 226,815,000
(d) sURplUs In the statement of pRofIt and loss
Opening balance 208,632,826 204,016,537
Add: Transfer on amalgamation (refer note (a) below) 253,505,356 -
Profit for the year 1,100,409,929 703,759,061
Less: Appropriations
General reserve 110,041,000 70,376,000
Proposed dividend on equity shares 817,108,725 522,413,775
[`305 per share (Previous year `195 per share)]
Tax on proposed equity dividend 166,346,997 106,352,997
Total appropriations 1,093,496,722 699,142,772
net surplus in the Statement of profit and loss 469,051,389 208,632,826
TOTAL 1,234,484,556 855,269,993
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
260 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(a) Represents amount pertaining to IDFC Investment Advisors Limited transferred on amalgamation (refer note 31).
06 otheR long-teRm lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Lease equalisation 8,974,174 8,181,769
8,974,174 8,181,769
07 otheR cURRent lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Lease equalisation 1,296,991 1,487,361
Statutory dues payable 27,889,172 15,293,557
Other payables (read with note 30) 24,306,710 155,383,581
53,492,873 172,164,499
08 shoRt teRm pRovIsIons
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Other short term provisions (read with note 30) 382,523,184 445,560,763
Provision for gratuity [(net of receivable from fund) read with note 23] 13,344,985 227,463
other provisions
Provision for income tax (Net of advance tax of `1,016,534,845; Previous year `734,466,804)
80,205,242 102,269,949
Proposed equity dividend 817,108,725 522,413,775
Tax on proposed equity dividend 166,346,996 106,352,997
1,459,529,132 1,176,824,947
09 tangIBle assets
gRoSS BloCk aCCUmUlateD DepReCIatIon net BloCk
BalanCe aS at apRIl
1, 2015
aDJUStment (See note
BeloW)
aDDItIonS DISpoSalS BalanCe aS at maRCh
31, 2016
BalanCe aS at apRIl
1, 2015
aDJUStment (See note
BeloW)
DepReCIatIon ChaRge FoR the
yeaR
on DISpoSalS
BalanCe aS at maRCh
31, 2016
BalanCe aS at maRCh
31, 2016
BalanCe aS at
maRCh 31, 2015
(`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`)
Leasehold improvements
79,474,000 - 2,561,582 - 82,035,582 75,676,658 - 2,650,225 - 78,326,883 3,708,699 3,797,342
Furniture and fixtures
20,222,236 299,632 1,368,729 - 21,890,597 11,713,215 170,017 2,064,369 - 13,947,601 7,942,996 8,509,021
Office equipment
45,081,419 869,147 3,646,886 125,500 49,471,952 37,760,740 795,902 4,403,908 117,223 42,843,327 6,628,625 7,320,679
Computers 51,603,990 1,266,010 9,314,570 2,264,727 59,919,843 42,799,718 1,129,145 6,134,559 2,262,257 47,801,165 12,118,678 8,804,272
Vehicles 9,953,208 - 5,066,514 975,944 14,043,778 2,514,060 - 3,001,333 226,504 5,288,889 8,754,889 7,439,148
TOTAL 206,334,853 2,434,789 21,958,281 3,366,171 227,361,752 170,464,391 2,095,064 18,254,394 2,605,984 188,207,865 39,153,887 35,870,462
Previous year 197,108,424 - 20,204,070 10,977,641 206,334,853 149,591,952 - 31,693,287 10,820,848 170,464,391 35,870,462
10 IntangIBle assets
gRoSS BloCk aCCUmUlateD DepReCIatIon net BloCk
BalanCe aS at apRIl
1, 2015
aDJUStment (See note
BeloW)
aDDItIonS DISpoSalS BalanCe aS at maRCh
31, 2016
BalanCe aS at apRIl
1, 2015
aDJUStment (See note
BeloW)
DepReCIatIon ChaRge FoR the
yeaR
on DISpoSalS
BalanCe aS at maRCh
31, 2016
BalanCe aS at maRCh
31, 2016
BalanCe aS at maRCh
31, 2015
(`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`) (`)
Computer software
51,142,157 8,236,301 5,346,876 - 64,725,334 42,100,075 6,917,992 6,333,850 - 55,351,917 9,373,417 9,042,082
TOTAL 51,142,157 8,236,301 5,346,876 - 64,725,334 42,100,075 6,917,992 6,333,850 - 55,351,917 9,373,417 9,042,082
Previous year 43,156,157 - 7,986,000 - 51,142,157 36,478,753 - 5,621,322 - 42,100,075 9,042,082
TOTAL TANGIBLE & INTANGIBLE ASSETS
257,477,010 10,671,090 27,305,157 3,366,171 292,087,086 212,564,466 9,013,056 24,588,244 2,605,984 243,559,782 48,527,304 44,912,544
Previous year 240,264,581 - 28,190,070 10,977,641 257,477,010 186,070,705 - 37,314,609 10,820,848 212,564,466 44,912,544
Note: Represents assets pertaining to IDFC Investment Advisors Limited transferred on amalgamation (refer note 31).
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 1
11 non-cURRent Investments (tRade, at cost Unless stated otheRwIse)
FACE VALUE (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
Unquoted equity shares (fully paid)
Investment in subsidiaries (unquoted)
IDFC Investment Advisors Limited (Merged w.e.f. April 01, 2015)
10 - - 10,000,000 100,000,000
IDFC Investment Managers (Mauritius) Limited 62 407,290 25,069,224 157,290 8,544,224
25,069,224 108,544,224
Investment in equity Shares (unquoted)
MF Utilities India Private Limited 1 500,000 500,000 500,000 500,000
500,000 500,000
Investment in preference Shares (unquoted)
0% Moser Baer Solar Limited (optionally convertible) 10 61,290,000 500,000 61,290,000 500,000
500,000 500,000
Investments in Venture Capital Units (Unquoted)
IDFC Spice Fund* 10,000 10,000 - -
10,000 -
* Represents assets pertaining to IDFC Investment Advisors Limited transferred on amalgamation (refer note 31).
Investment in mutual funds (quoted)
IDFC Yearly Series Interval Fund Direct Plan-Series I-Growth 420,066 5,000,000 420,066 5,000,000
IDFC Yearly series Interval Fund Direct Plan-Series II-Growth 417,199 5,000,000 417,199 5,000,000
IDFC Yearly series Interval Fund Direct Plan-Series III-Growth 416,084 5,000,000 416,084 5,000,000
15,000,000 15,000,000
Aggregate amount of investments in quoted mutual funds
Cost 15,000,000 15,000,000
Market value (Net asset value) 16,534,167 15,204,046
Investment in mutual funds (unquoted)
IDFC Super Saver Income Fund-Medium Term Plan-Growth-Direct Plan 241,765 5,000,000 241,765 5,000,000
IDFC Dynamic Bond Fund-Growth-Direct Plan 348,029 5,000,000 348,029 5,000,000
IDFC Dynamic Equity Fund-Direct Plan-Growth 500,000 5,000,000 500,000 5,000,000
IDFC Government Securities Fund-Provident Fund-Growth-Direct Plan
204,552 5,000,000 - -
IDFC Classic Equity Fund-Growth-Direct Plan 156,504 5,000,000 - -
IDFC Premier Equity Fund-Growth-Direct Plan 68,914 5,000,000 - -
IDFC Imperial Equity Fund-Growth-Direct Plan 180,629 5,000,000 - -
IDFC Equity Fund-Growth-Direct Plan 204,679 5,000,000 - -
IDFC Arbitrage Fund-Growth-Direct Plan 268,680 5,000,000 - -
IDFC Sterling Equity Fund-Growth-Direct Plan 137,398 5,000,000 - -
IDFC Arbitrage Plus Fund-Growth-Direct Plan 216,200 3,540,000 - -
IDFC Tax Advantage (ELSS) Fund-Growth-Direct Plan 124,904 5,000,000 - -
IDFC Asset Allocation Fund of Fund-Conservative Plan-Direct Plan-Growth
79,529 1,280,000 - -
IDFC Asset Allocation Fund of Fund-Moderate Plan-Direct Plan-Growth 215,738 3,720,000 - -
IDFC Asset Allocation Fund of Fund-Aggressive Plan-Direct Plan-Growth 201,531 3,610,000 - -
IDFC Monthly Income Plan-Growth-Direct Plan 296,653 5,000,000 - -
IDFC Nifty Fund-Growth-Direct Plan 98,659 1,620,000 - -
IDFC Infrastructure Fund-Growth-Direct Plan 423,920 4,970,000 - -
IDFC Banking Debt Fund-Direct Plan-Growth 414,120 5,000,000 - -
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
262 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
FACE VALUE (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
IDFC Money Manager Fund-Investment Plan-Growth-Direct Plan
228,005 5,000,000 - -
IDFC All Seasons Bond Fund-Direct Plan-Growth 110,773 2,430,000 - -
IDFC Ultra Short Term Fund-Direct Plan-Growth 253,691 5,000,000 - -
IDFC Government Securities Fund-Investment Plan-Growth-Direct Plan 295,440 5,000,000 - -
IDFC Cash Fund-Growth-Direct Plan 2,921 5,000,000 - -
IDFC Money Manager Fund-Treasury Plan-Growth-Direct Plan 224,028 5,000,000 - -
IDFC Government Securities Fund-Short Term Plan-Growth-Direct Plan 30,313 612,000 - -
IDFC Super Saver Income Fund-Investment Plan-Growth-Direct Plan
143,738 5,000,000 - -
IDFC Super Saver Income Fund-Short Term Plan-Growth-Direct Plan 171,318 5,000,000 - -
IDFC Corporate Bond Fund-Direct Plan-Growth 500,000 5,000,000 - -
126,782,000 15,000,000
Aggregate amount of investments in unquoted mutual funds
Cost 126,782,000 15,000,000
Market value (Net asset value) 131,925,353 17,194,285
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
TOTAL NON-CURRENT INVESTMENTS 167,861,224 139,544,224
12 defeRRed taX asset (net)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
Deferred tax asset
(a) Provisions: Lease equalisation 3,555,000 3,287,000
(b) Fixed assets: Impact of difference between tax depreciation and depreciation / amortisation charged for the financial reporting * 26,032,000 26,059,000
29,587,000 29,346,000
DEFERRED TAx ASSET (NET) 29,587,000 29,346,000
* Includes assets pertaining to IDFC Investment Advisors Limited transferred on amalgamation (refer note 31).
13 loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
Advances to employees - 1,793,111 - 535,622
Loans and advances to related parties - 318,119 - -
Other receivables - 538,621 - 102,347
Security deposits 70,687,205 28,667,725 103,606,065 1,035,685
Capital/supplier advances 4,437,963 3,806,319 722,721 3,992,230
Other loans and advances
Advance tax (Net of provision `894,263,262; Previous year `557,664,848)
48,104,974 - 14,553,215 -
Fringe benefit tax (Net of provision `13,053,367; Previous year `12,072,000)
86,646 - 366,813 -
Balances with government authorities - Service tax credit receivable - 16,578,363 - 14,005,057
Prepaid expenses 2,358,824 40,330,098 30,021,915 74,229,631
125,675,612 92,032,356 149,270,729 93,900,572
11 non-cURRent Investments (tRade, at cost Unless stated otheRwIse) (continued)
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 3
14 cURRent Investments
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
qUantIty (`) qUantIty (`)
Investment in mutual funds (unquoted)
IDFC Dynamic Bond Fund-Growth-(Regular Plan) - - 11,275,107 147,793,756
IDFC Dynamic Bond Fund-Growth-(Direct Plan)* 62,006,091 965,625,640 25,429,149 358,369,125
IDFC Ultra Short Term Fund-Growth-(Direct Plan) 4,668,264 97,000,000 2,425,590 44,213,230
IDFC Cash Fund-Growth-(Direct plan)* 305,265 554,380,717 405,591 679,654,166
IDFC Super Saver Income Fund-Medium Term Plan-Growth-(Direct Plan)
2,973,715 61,500,000 2,973,715 61,500,000
IDFC Super Saver Income Fund-Short Term Plan-Growth-(Direct Plan)*
777,529 20,000,000 - -
IDFC Corporate Bond Fund-Growth-(Direct Plan) 20,000,000 200,000,000 - -
1,898,506,357 1,291,530,277
Aggregate amount of investments in unquoted mutual funds
Cost 1,898,506,357 1,291,530,277
Market value (Net asset value) 2,105,604,664 1,439,894,115
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
* Includes investments held by IDFC Investment Advisors Limited prior to merger (refer note 31).
Investment in mutual funds (quoted)
IDFC Fixed Term Plan Series 49 Direct Plan-Growth 5,000,000 50,000,000 5,000,000 50,000,000
IDFC Fixed Term Plan Series 54 Direct Plan-Growth 1,000,000 10,000,000 1,000,000 10,000,000
IDFC Fixed Term Plan Series 52 Direct Plan-Growth 1,371,625 13,716,249 1,371,625 13,716,249
IDFC Fixed Term Plan Series 66 Direct Plan-Growth 5,836,945 58,369,447 6,500,000 65,000,000
IDFC Fixed Term Plan Series 74 Direct Plan-Growth (411 Days) 3,000,000 30,000,000 3,000,000 30,000,000
IDFC Fixed Term Plan Series 78 Direct Plan-Growth (366 Days) 6,000,000 60,000,000 6,000,000 60,000,000
IDFC Fixed Term Plan Series 97 Direct Plan-Growth (366 Days) 2,750,000 27,500,000 2,750,000 27,500,000
IDFC Yearly series Interval Fund Direct Plan-Series I-Growth* 1,379,602 15,000,000 - -
264,585,696 256,216,249
Aggregate amount of investments in quoted mutual funds
Cost 264,585,696 256,216,249
Market value (Net asset value) 318,388,601 284,051,709
TOTAL CURRENT INVESTMENTS 2,163,092,053 1,547,746,526
* Includes investments held by IDFC Investment Advisors Limited prior to merger (refer note 31).
15 tRade ReceIvaBles (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
Outstanding for a period less than six months - 110,788,130 - 75,275,276
- 110,788,130 - 75,275,276
16 cash and BanK Balances
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
Cash and cash equivalents
Balances with banks:
In current accounts - 45,707,506 - 159,235,787
- 45,707,506 - 159,235,787
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
264 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
17 RevenUe fRom opeRatIons
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Management fees (Net of service tax `424,012,003; Previous year `335,545,925) 3,046,932,643 2,714,772,672
Portfolio management fees 88,252,473 -
Advisory fees 20,947,468 -
3,156,132,584 2,714,772,672
18 otheR Income
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Interest on income tax refund - 8,626,035
Other interest 36,693 -
Net gain/loss on sale of current investments 99,226,323 61,131,802
Profit on sale of fixed assets (net) 171,742 -
Miscellaneous income 387,434 340,573
99,822,192 70,098,410
19 employee BenefIts eXpense
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Salaries and bonus 510,081,591 469,609,494
Contribution to provident and other funds (refer note 23) 35,447,973 30,394,781
ESOP compensation cost - (785,474)
Staff welfare expenses 17,786,670 19,266,368
TOTAL 563,316,234 518,485,169
(a) Salaries and bonus includes shortfall of bonus provision for year ended March 31, 2015 of `2,550,000 on account of change in estimate in provision of bonus.
20 otheR eXpenses
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Rent 107,156,317 103,281,260
Rates & taxes 2,305,656 1,071,404
Electricity 13,488,675 12,151,009
Repairs and maintenance
Equipments 2,587,523 3,781,402
Others 36,432,092 32,638,868
Insurance charges 1,032,551 1,148,437
Travelling and conveyance 25,349,489 21,698,938
Printing and stationery 23,366,378 15,195,811
Communication costs 31,378,537 29,538,476
Advertising and publicity 89,034,027 53,479,031
Listing & rating Fees 2,394,106 1,406,892
Loss on sale of fixed assets (net) - 87,246
Professional fees 108,822,214 83,463,060
Directors' sitting fees 485,000 540,000
Membership and subscription 41,694,429 29,064,990
Computer Software Expenses 13,996,218 10,651,322
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 5
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Auditors' remuneration (refer note (a) below) 2,291,781 1,279,393
Scheme issue expenses (refer note (b) below) 60,912,846 161,562,151
Shared service cost (refer note (e) below) 12,229,176 5,507,757
Operational costs (refer note (d) below) 435,806,163 521,838,551
Contribution to IDFC Foundation towards corporate social responsibility expenses 19,408,000 13,000,000
Miscellaneous expenses 10,115,849 5,845,245
1,040,287,027 1,108,231,243
(a) Break up of auditors’ remuneration:
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Audit fee 1,245,000 650,000
Tax audit fee 300,000 300,000
Other services 665,000 291,147
Out of pocket expenses 81,781 38,246
2,291,781 1,279,393
(b) Scheme issue expenses are the expenses incurred by the Company towards launching of schemes and plans of IDFC Mutual Fund during the year.
(c) Expenses incurred on behalf of schemes of IDFC Mutual Fund are charged to the Statement of Profit and Loss unless considered recoverable from schemes.
(d) Operational costs amongst other include expenses which are incurred by mutual fund schemes over and above the expense limits prescribed by SEBI, interest charged by bank to the Mutual Fund on account of temporary borrowings or overdrafts and payments made to investors of Mutual Fund on account of delay in payment of redemption proceeds which are borne by the Company.
(e) Shared service cost represents reimbursement to holding company/fellow subsidiary under a shared service agreement (Net of recoveries `Nil; Previous year `3,685,733 )
21 eXpendItURe In foReIgn cURRencIes (on accRUal BasIs)
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Advertising - Media 16,665,846 2,179,554
Foreign travel 260,312 97,825
Other professional fees 9,370,390 955,046
22 eaRnIngs In foReIgn cURRencIes (on accRUal BasIs)
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Advisory Fees - Absolute Asia Asset Management Limited 20,947,468 -
23 In accordance with Accounting Standard 15 on ‘Employee Benefits’ the following disclosures have been made:
i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Provident fund 16,286,141 14,019,278
Superannuation fund 1,111,721 1,200,203
Pension fund 2,127,875 1,657,500
Labour welfare fund 478 210
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
266 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ii. The details of the Company’s post - retirement gratuity benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
change In the defIned BenefIt oBlIgatIons:
Liability at the beginning of the year 47,753,657 34,829,206
Current service cost 9,542,197 8,236,989
Interest cost 4,190,297 3,539,153
Liabilities extinguished on settlement - -
Liabilities assumed on acquisition / (settled on divestiture) 4,252,725 113,345
Benefits paid (7,982,591) (4,234,922)
Actuarial Losses / (Gain) 5,598,917 5,269,886
Past Service Cost - -
Closing Defined Benefit Obligation 63,355,202 47,753,657
Unrecognised Past Service Cost - -
Liability at the end of the year 63,355,202 47,753,657
faIR valUe of plan assets:
Fair value of plan assets at the beginning of the year 46,642,243 32,116,168
Expected return on plan assets 4,129,931 2,549,912
Contributions 1,111,414 15,119,214
Benefits paid (7,982,591) (4,234,922)
Actuarial gain / (loss) on plan assets (524,771) 1,091,871
Unrecognised past service cost - -
Assets acquired on acquisition 5,448,080 -
Fair value of plan assets at the end of the year 48,824,306 46,642,243
Total actuarial loss / (gain) to be recognised 6,123,688 4,178,015
actUal RetURn on plan assets:
Expected return on plan assets 4,129,931 2,549,912
Actuarial gain / (loss) on plan assets (524,771) 1,091,871
Actual return on plan assets 3,605,160 3,641,783
amoUnt RecognIsed In the Balance sheet:
Liability at the end of the year 63,355,202 47,753,657
Fair value of plan assets at the end of the year (48,824,306) (46,642,243)
Amount recognised in the balance sheet under "Provision for employee benefits" 14,530,896 1,111,414
Amount receivable recognised in the balance sheet under "Provision for employee benefits" (1,185,911) (883,951)
eXpense RecognIsed In the statement of pRofIt and loss:
Current service cost 9,542,197 8,236,989
Interest cost 4,190,297 3,539,153
Expected return on plan assets (4,129,931) (2,549,912)
Net actuarial loss / (gain) to be recognised 6,123,688 4,178,015
Past Service Cost - -
Loss/(Gains) on Acquisition / Divestiture (1,195,355) 113,345
Expense recognised in the Statement of Profit and Loss under 'Employee benefits expense' 14,530,896 13,517,590
ReconcIlIatIon of the lIaBIlIty RecognIsed In the Balance sheet:
Opening net Liability 1,111,414 2,713,038
Expense recognised 14,530,896 13,517,590
Contribution by the Company (1,111,414) (15,119,214)
Amount recognised in the balance sheet under "Gratuity" 14,530,896 1,111,414
Expected employer's contribution next year 10,000,000 7,000,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 7
experience adjustments:
MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2013 MARCH 31, 2012
(`) (`) (`) (`) (`)
Defined benefit obligation 63,355,202 47,753,657 34,829,206 25,897,310 18,716,760
Plan assets 48,824,306 46,642,243 32,116,168 25,897,310 -
Surplus/(deficit) (14,530,896) (1,111,414) (2,713,038) - (18,716,760)
Exp. Adj. on Plan Liabilities 5,998,246 2,320,620 3,130,977 (782,789) 1,136,092
Exp. Adj. on Plan Assets (524,771) 1,091,871 (753,684) 3,863,873 -
MARCH 31, 2016 MARCH 31, 2015
(%) (%)
Investment pattern:
Insurer managed funds 100.00 100.00
Principal assumptions:
Discount rate (p.a.) 8.00 7.90
Expected rate of return on assets (p.a.) 9.00 9.00
Salary escalation rate (p.a.) 8.00 8.00
The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
24 The Company is engaged in the business of providing Asset Management Services, Investment Advisory and Portfolio Management Services. During the year ended March 31, 2016 the Company was engaged in only one business segment and no geographical segment and as such there are no separate reportable segments, as required by Accounting Standard 17 on ‘Segment Reporting’.
25 Related paRty dIsclosUResAs per the Accounting Standard 18 on “Related Party Disclosures” the related parties of the Company are as follows:
Names of the related parties where control exists irrespective of whether transactions have been occurred or not:
I. Ultimate holding Company:
IDFC Limited (w.e.f. July 9, 2015)
II. holding Company:
IDFC Limited (upto July 8, 2015)
IDFC Financial Holding Company Limited (w.e.f. July 9, 2015)
III. Subsidiaries:
IDFC Investment Advisors Limited (upto March 31, 2015)
IDFC Investment Managers (Mauritius) Limited
Names of the related parties with which there are transactions during the year:
IV. Fellow Subsidiaries
IDFC AMC Trustee Company Limited
IDFC Foundation
IDFC Bank Limited
V. associates
Uttarakhand Infrastructure Development Company Limited
VI. key management personnel:
Mr. Naval Bir Kumar - Vice Chairman (upto October 31, 2015)
Mr. Kalpen Parekh - Chief Executive Officer
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
268 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
The nature of transactions carried out with the above related parties in the ordinary course of business are as follows:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
I. holding Company/Ultimate holding Company:
IDFC Limited Reimbursement of expenses 2,817,316 9,619,961
Purchase of preference shares - 500,000
Shared service cost paid 3,125,256 9,193,490
Recovery of expenses / cost of asset 243,219 1,433,022
ESOP cost recovery on cancellation - 785,474
II. Subsidiaries:
IDFC Investment Advisors Limited Recovery of expenses - 3,050,157
(upto March 31, 2015) Business centre fees recovered - 2,676,000
IDFC Investment Managers (Mauritius) Limited Purchase of equity shares 16,525,000 5,975,000
III. Fellow Subsidiaries:
IDFC AMC Trustee Company Limited Recovery of expenses 318,356 193,544
IDFC Foundation Business centre fees recovered - 999,733
CSR Contribution 19,408,000 13,000,000
IDFC Bank Limited Reimbursement of expenses 2,777,150 -
Shared service cost paid 9,103,920 -
Recovery of expenses 1,712,397 -
Balance receivable 318,119 -
Current Account Balance 2,680,832 -
Current Account Balance (Investor Education and Awareness)
3,137,428 -
IV. associates:
Uttarakhand Infrastructure Development Company Limited
Purchase of fixed assets - 12,398
V. key management personnel: Remuneration paid 61,508,369 71,372,203
Reimbursement of business expenses 49,854 273,463
26 In accordance with Accounting Standard 19 on ‘Leases’ the following disclosures in respect of operating leases are made:
i. The Company has taken vehicles for two employees under cancellable operating leases which is included under salaries as follows:
name oF the leSSoR lateSt expIRy Date MARCH 31, 2016 MARCH 31, 2015
(`) (`)
ALD Automative Private Limited September 2016 1,132,044 808,024
The total future minimum lease payments under cancellable operating lease for each of the periods is given below:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Not later than one year 120,880 260,580
Later than one year and not later than five years - 120,880
ii. The Company has entered into cancellable as well as non-cancellable leasing arrangements for office premises at various locations in India generally for a period of 36 months. As per the term of the lease all maintenance charges and municipal levies are borne by the lessee.
The total future minimum lease payments under non-cancellable operating lease for each of the periods is given below:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Not later than one year 78,762,686 78,769,417
Later than one year and not later than five years 220,489,671 293,909,749
The terms of renewal and escalation clauses are those normally prevalent in similar agreements.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 6 9
27 In accordance with Accounting Standard 20 on ‘Earnings Per Share’:
‘The basic / diluted earnings per share has been calculated based on the following:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Net profit after tax 1,100,409,929 703,759,061
Net amount available for equity shareholders 1,100,409,929 703,759,061
Weighted average number of equity shares (Nos.) 2,679,045 2,679,045
Basic and diluted earnings per equity share (`) 410.75 262.69
28 capItal and otheR commItmentsEstimated amount of contracts remaining to be executed and not provided for `8,959,646 (Previous year `6,387,441).
29 contIngent lIaBIlItIes not pRovIded foR In Respect of :
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
(a) Claims not acknowledged as debts in respect of :
i Reversal of Cenvat credit under protest. 6,481,420 1,841,159
(b) Income Tax demand on Mutual Fund on account of non-payment of tax on income from pass through certificates by the issuing trust.
4,860,729 4,860,729
30 As per information available with the Company, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.
31 accoUntIng foR amalgamatIonThe Honorable High Court of Bombay, on April 18, 2015, sanctioned a scheme of amalgamation (the scheme) under sections 391 to 394 of the Companies Act, 1956. In terms of the Scheme, IDFC Investment Advisors Limited (Transferor Company) has been amalgamated with the Company (Transferee Company) with effect from June 23, 2015 having Appointed date April 01, 2015, upon which the entire business, including all assets and liabilities of the Transferor Company stands transferred to and vested in the Transferee Company. The amalgamation has been accounted under the pooling of interest method and the transfer of assets and liabilities have been recorded at their book value.
AS AT MARCH 31, 2016
(`) (`)
valUe of assets and lIaBIlItIes acqUIRed:non current assets
(a) Fixed assets
Tangible assets 339,725
Intangible assets 1,318,309
1,658,034
(b) Non-current investments 10,000
(c) Deferred tax assets (net) 7,568
(d) Long-term loans and advances 29,114,477
29,132,045
Current assets
(a) Current investments 317,250,224
(b) Trade receivables 36,008,950
(c) Cash and bank balances 3,184,971
(d) Short-term loans and advances 3,356,027
359,800,172
Current liabilities
(a) Other current liabilities 661,562
(b) Short-term provisions 27,668,332
28,329,894
362,260,357
Less:
Carrying value of investments in the Transferor Company 100,000,000
Reserves and Surplus of transferor company (including General Reserve) 262,260,357
362,260,357
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
270 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
32 As per the provisions of the Section 135 of the Companies Act, 2013, the Company is required to contribute `19,407,794 (Previous year `12,983,727) during the financial year towards Corporate Social Responsibility. The Company has contributed `19,408,000 (Previous year `13,000,000) to IDFC Foundation.
33 net dIvIdend RemItted In foReIgn eXchange
yeaR oF RemIttanCe (enDIng on) MARCH 31, 2016 MARCH 31, 2015
Period to which it relates April 01, 2014 to April 01, 2013 to
March 31, 2015 March 31, 2014
Number of non-resident shareholders 1 1
Number of equity shares held on which dividend was due 669,762 669,762
Amount remitted (in USD) 2,029,582 2,676,051
Amount remitted (in INR) 130,603,590 167,440,500
34 employee stocK optIonsDuring the year ended March 31, 2016, Employee Stock Option Scheme (‘ESOS’) were granted by IDFC Limited (Ultimate Holding Company) to the employees of the Company. The exercise price of these ESOS was market price, thus no cost has been allocated to the Company.
35 The figures for the previous year are strictly not comparable to the figures for the current year due to amalgamation of IDFC Investment Advisors Limited with the Company with effect from June 23, 2015 having Appointed date April 01, 2015 vide High Court Order dated April 18, 2015.
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 1
INDEPENDENT AUDITOR’S REPORT
Independent aUdItoR’s RepoRt
To the Members of IDFC Asset Management Company Limited
Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of IDFC Asset Management Company Limited (hereinafter referred to as “the Holding Company”) its subsidiary (together referred to as “the Group”), comprising of the consolidated Balance Sheet as at March 31, 2016, the consolidated Statement of Profit and Loss and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as ‘the consolidated financial statements’).
management’s Responsibility for the Consolidated Financial StatementsThe Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms with the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated 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 Holding 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 accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in paragraph (a) of the Other Matters below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
opinionIn our opinion and to the best of our information and according to the explanations given to us, the consolidated 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 consolidated state of affairs of the Group, as at March 31, 2016, their consolidated profit and their consolidated cash flows for the year ended on that date.
Report on other legal and Regulatory RequirementsAs required by section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the aforesaid consolidated financial statements; and
(b) In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(c) With respect to the adequacy and the operating effectiveness of the internal financial controls over financial reporting of the Holding Company and its subsidiary company, since the subsidiary company is not incorporated in India, no separate report on internal financial controls over financial reporting of the Holding Company is being issued.
other matterThe accompanying consolidated financial statements include total assets of ` 1,81,86,750 as at March 31, 2016, and total revenues and loss before tax of ` NIL and ` 22,52,511 for the year ended on that date, in respect of the subsidiary, which have been audited by other auditors, which financial statements, other financial information and auditor’s reports have been furnished to us by the management. Our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of the subsidiary and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, in so far as it relates to the subsidiary, is based solely on the report of such other auditors. Our opinion is not modified in respect of this matter.
For S. R. Batliboi & Co. llp Chartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
272 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
NOTES ` ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 6 26,790,450 26,790,450
(b) Reserves and surplus 7 1,226,955,336 1,112,034,950
1,253,745,786 1,138,825,400
non-current liabilities
(a) Other long-term liabilities 8 8,974,174 8,181,769
8,974,174 8,181,769
Current liabilities
(a) Other current liabilities 9 54,139,619 173,360,111
(b) Short-term provisions 10 1,459,529,132 1,204,327,630
1,513,668,751 1,377,687,741
TOTAL 2,776,388,711 2,524,694,910
assets
non-current assets
(a) Fixed assets
Tangible assets 11 39,153,887 36,210,187
Intangible assets 12 9,373,417 10,360,391
48,527,304 46,570,578
(b) Non-current investments 13 142,792,000 31,010,000
(c) Deferred tax assets (net) 14 29,587,000 29,353,568
(d) Long-term loans and advances 15 125,675,612 178,385,206
298,054,612 238,748,774
346,581,916 285,319,352
Current assets
(a) Current investments 16 2,163,092,053 1,864,996,750
(b) Trade receivables 17 110,788,130 111,284,225
(c) Cash and bank balances 18 60,359,110 165,079,785
(d) Short-term loans and advances 15 95,567,502 98,014,798
2,429,806,795 2,239,375,558
TOTAL 2,776,388,711 2,524,694,910
Summary of significant accounting policies 5
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 3
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
NOTES ` `
I Income
Revenue from operations 19 3,156,132,584 2,977,441,532
Other income 20 99,822,192 78,536,504
TOTAL INCOME (I) 3,255,954,776 3,055,978,036
II eXpenses
Employee benefits expense 21 563,316,234 546,926,223
Depreciation and amortisation expense 11, 12 24,588,244 38,010,647
Other expenses 22 1,042,539,538 1,155,519,078
TOTAL ExPENSES (II) 1,630,444,016 1,740,455,948
III pRofIt BefoRe taX (I - II) 1,625,510,760 1,315,522,088
Iv taX eXpense
Current tax 570,453,000 488,943,000
Deferred tax (233,432) (5,169,568)
Adjustment of tax relating to earlier periods (42,866,226) -
TOTAL TAx ExPENSE (IV) 527,353,342 483,773,432
v pRofIt foR the yeaR fRom contInUIng opeRatIons (III - Iv) 1,098,157,418 831,748,656
Basic and diluted earnings per equity share (Nominal value of share ` 10) 29 409.91 310.46
Summary of significant accounting policies 5
The accompanying notes are an integral part of the financial statements.
274 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CONSOLIDATED CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
` ` `
(a) cash flow fRom opeRatIng actIvItIes
pRofIt / (loss) BefoRe taXatIon 1,625,510,760 1,315,522,088
adjustment for:
Add/(Less) : Depreciation and amortisation 24,588,244 38,010,647
Add/(Less) : Lease escalation charge 602,035 (599,556)
Add/(Less) : Loss on sale of Fixed assets (net of profit) (171,742) 77,946
Add/(Less) : Profit on sale of other investments (99,226,323) (63,523,523)
Add/(Less) : Foreign currency reserve 218,690 205,194
operating profit before working capital changes 1,551,521,664 1,289,692,796
Changes in working capital:
(Increase)/decrease in long term loans and advances 56,866,709 19,815,323
(Increase)/decrease in trade receivables 496,095 (16,919,488)
(Increase)/decrease in short term loans and advances 2,447,296 40,511,638
Increase/(decrease) in other current liabilities (119,030,122) 62,501,536
Increase/(decrease) in short term provisions (76,861,467) 86,494,208
(136,081,489) 192,403,217
Cash generated from/(used in) operations 1,415,440,175 1,482,096,013
Direct taxes paid (net of refund) (554,369,871) (408,182,254)
NET CASH FLOW FROM OPERATING ACTIVITIES (A) 861,070,304 1,073,913,759
(B) cash flow fRom InvestIng actIvItIes
Purchase of fixed asset including capital work-in-progress (27,305,157) (29,607,974)
Sale proceeds from fixed assets 931,928 78,850
Purchase of investments (3,392,160,183) (3,379,736,246)
Sale proceeds on sale of investments 3,081,509,205 3,175,178,347
Purchase of other investments - (500,000)
NET CASH FLOW FROM INVESTING ACTIVITIES (B) (337,024,207) (234,587,023)
(c) cash flow fRom fInancIng actIvItIes
Dividend paid (including dividend tax) (628,766,772) (783,587,174)
NET CASH FLOW FROM FINANCING ACTIVITIES (C) (628,766,772) (783,587,174)
net increase/(decrease) in cash and cash equivalents (a + B + C) (104,720,675) 55,739,561
Cash and cash equivalents as at beginning of the year (refer note 18)
165,079,785 109,340,224
Cash and cash equivalents as at end of the year (refer note 18) 60,359,110 165,079,785
(104,720,675) 55,739,561
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors ofIDFC asset management Company limited
Viren h. mehtaPartner(Membership No. 048749)
Vikram limayeDirector
anita RamachandranDirector
Mumbai | April 27, 2016nirav ShahCompany Secretary
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 5
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
01 gRoUp InfoRmatIonIDFC Asset Management Company Limited (‘the Company’) is a public limited company, incorporated in India and regulated by The Securities Exchange Board of India (SEBI). During the year, the Holding Company and its one subsidiary company constituted the Group. The Group is engaged in asset management, portfolio management & investment advisory services. IDFC Investment Advisors Limited, subsidiary of the Company, has filed a petition with the Bombay High Court on December 22, 2014 to obtain its sanction to a Scheme of Amalgamation for carrying out an amalgamation of IDFC Investment Advisors Limited with the Company with the effective date as April 1, 2015.
The Amalgamation is effective from April 01, 2015 (Appointed Date) as approved by the Honorable High Court of Bombay (“High Court”) vide its order dated April 18, 2015 which had been filed by the Company with the Registrar of Companies on June 23, 2015 (“Effective Date”). The said scheme of merger as approved by the High Court shall be effective from the Appointed Date but shall be operative from the Effective Date, hence the business of subsidiary has been transferred to and vested with the Holding Company on going concern basis. Also refer to note no 33.
IDFC Limited has transferred its shareholding in the Company to IDFC Financial Holding Company Limited which is a wholly owned subsidiary of IDFC Limited with effect from July 9, 2015.
02 BasIs of pRepaRatIonThe consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) except in case of IDFC Investment Managers (Mauritius) Limited which has been prepared in accordance with International Financial Reporting Standards (IFRS). The Group has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the applicable guidelines issued by SEBI. The financial statements have been prepared on the accrual basis under the historical cost convention. The accounting policies followed in the preparation of financial statements are consistent with those followed in the previous year.
03 BasIs of consolIdatIon(a) The Consolidated Financial Statements comprise the individual financial statements of the Holding Company and its subsidiary as
on March 31, 2016 and for the year ended on that date. The Consolidated Financial Statements have been prepared on the following basis:
i. The financial statements of the Holding Company and its subsidiary have been consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses as per Accounting Standard 21 on ‘Consolidated Financial Statements’.
ii. The financial statements of the subsidiary used in the consolidation are drawn up to the same Balance Sheet date as that of the Holding Company, i.e. March 31, 2016.
iii. In case of foreign subsidiary, being non-integral operations, revenue items are consolidated at the average rate prevailing during the year. All assets and liabilities are converted at the rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the foreign currency translation reserve.
(b) The financial statements of the following subsidiary have been consolidated as per Accounting Standard 21 on ‘Consolidated Financial Statement’.
name oF SUBSIDIaRy
MARCH 31, 2016 MARCH 31, 2015
pRopoRtIon oF oWneRShIp
InteReSt %
pRopoRtIon oF oWneRShIp
InteReSt %
i. IDFC Investment Advisors Limited, a Company incorporated in India. (Merged with IDFC Asset Management Company Limited w.e.f. April 1, 2015)
- 100
ii. IDFC Investment Managers (Mauritius) Limited, a Company incorporated in Mauritius. 100 100
04 change In holdIng In sUBsIdIaRIes:Consequent to the approval from the Hon’ble High Court of Bombay vide its order dated April 18, 2015 with Appointed date April 1, 2015 and effective date June 23, 2015, IDFC Investment Advisors Limited has been amalgamated with the Company.
05 sIgnIfIcant accoUntIng polIcIes
(A) InVeStmentS Investments which are readily realisable and intended to be held for not more than one year from the date on which such
investments are made are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Long term investments are carried at acquisition cost. However, a provision is made for diminution other than temporary on an individual basis.
Current investments are carried in the financial statement at lower of cost or fair value on an individual investment basis.
On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to Statement of Profit and Loss.
276 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
(B) tangIBle FIxeD aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for the intended use, less accumulated depreciation and accumulated losses, if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation upto the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Leasehold Improvements are shown at historical cost less accumulated depreciation.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.
The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of remaining asset.
(C) DepReCIatIon on tangIBle FIxeD aSSetS
Depreciation on tangible fixed assets is provided on straight-line method, as per the useful life prescribed in schedule II to the Companies Act, 2013 except in case of assets costing less than `5,000 each, which are fully depreciated in the year of capitalization and vehicles and certain office equipments, in which case, life of asset has been internally assessed.
¡ Computers for 3 years
¡ Servers and networks for 6 years
¡ Furniture for 10 years
¡ Office Equipment for 5 years
¡ Vehicle for 4 years
¡ Leasehold improvements over the extended lease term or 5 years whichever is earlier.
Depreciation on additions during the year is provided on a pro-rata basis.
(D) IntangIBle aSSetS anD amoRtISatIon
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised over a period of three years on a straight line method. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
(E) ImpaIRment oF tangIBle anD IntangIBle aSSetS
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists or when annual impairment testing of an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and it’s value in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted for their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. In determining net selling price, recent market transactions are taken into account. If available, If no such transaction can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognised in the revaluation reserve up to the amount of any previous revaluation. After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or the carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Profit and Loss unless the assets is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
(F) ReVenUe ReCognItIonS
Revenue is recognised to the extent that it is probable that economic benefits will flow and the revenue can be reliably measured.
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 7
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
Asset management fees are recognised net of service tax on an accrual basis in terms of Investment Management Agreement entered into and in accordance with SEBI guidelines.
Income from management and advisory services is recognised at price agreed in accordance with the arrangement with the customers.
Interest
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Profit and Loss.
Dividends
Dividend income is recognised when the right to receive dividend is established at the reporting date.
(G) FoReIgn CURRenCy tRanSaCtIonS
Initial recognition
Foreign currency transactions are recorded in the reported currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transactions.
Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction. Non monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
exchange differences
Exchange differences are recognised as income or as expenses in the period in which they arise.
(H) opeRatIng leaSeS
Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Rental charges over the term of such leases, after taking in to account the escalation clause, are charged to the Statement of Profit and Loss on a straight line basis over the extended lease term.
(I) expenSe UnDeR employee StoCk optIon SChemeS
The Ultimate Holding Company has formulated Employee Stock Option Schemes (‘the ESOS’) in accordance with the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (‘the Guidelines’). The ESOS provides for grant of stock options to employees (including employees of subsidiary companies) to acquire equity shares of the Ultimate Holding Company that vest in a graded manner and that are to be exercised within a specified period. In accordance with the Guidelines and the Guidance Note on ‘Accounting for Employees Share-based Payments’ issued by the Institute of Chartered Accountants of India, the excess, if any, of the closing market price on the day prior to the date of grant of the stock options under the ESOS over the exercise price is amortised on a straight-line method over the vesting period and the cost is allocated to the Company to be charged to Statement of Profit and Loss as employee benefits expense. In case the vested/unvested stock options expire unexercised/get lapsed/cancelled, the Company credits the amount charged to the Statement of Profit and Loss.
(j) RetIRement anD otheR employee BeneFIt
Retirement benefit in the form of provident fund, superannuation fund and pension fund is a defined contribution scheme and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made.
There is a defined plan for the employees, viz., gratuity. The cost of providing benefits under this plan is determined on the basis of actuarial valuation at each year-end which is determined using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the Statement of Profit and Loss.
Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.
(K) pRoVISIonS
A provision is recognised for a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.
278 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
(L) InCome tax
Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income-tax Act 1961, enacted in India and tax laws prevailing in the respective tax jurisdictions.
The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and
Loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during
the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax
laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is
recognised in equity and not in the Statement of Profit and Loss.
Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing
differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which
such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses,
all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised
against future taxable profits.
(M) ContIngent lIaBIlItIeS
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not
recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability
also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The
Company does not recognise a contingent liability but discloses its existence in the financial statements.
(N) CaSh anD CaSh eqUIValentS
Cash and cash equivalents for the purpose of cash flow statement comprises cash at bank, cash in hand, fixed deposits with an
original maturity of three months or less.
(O) eaRnIng peR ShaRe
Basic earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity
shares.
(P) amalgamatIon aCCoUntIng
The Company treats an amalgamation in the nature of merger if it satisfies all the following criteria:
(i) All assets and liabilities of the transferor company become, after amalgamation, the assets and liabilities of the transferee
Company.
(ii) The business of the transferor company is intended to be carried on, after the amalgamation, by the transferee Company.
(iii) The transferee Company does not intend to make any adjustment to the book values of the assets and liabilities of the
transferor company, except to ensure uniformity of accounting policies.
(q) Segment RepoRtIng
The Company’s primary business segments are reflected based on the principal business carried out, i.e. Asset Management
Services, Investment Advisory and Portfolio Management Services. The risk and returns of the business of the Company is not
associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.
06 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
aUthoRISeD ShaReS
Equity shares of ` 10 each 35,000,000 350,000,000 35,000,000 350,000,000
ISSUeD, SUBSCRIBeD & FUlly paID-Up ShaReS
Equity shares of `10 each 2,679,045 26,790,450 2,679,045 26,790,450
TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 26,790,450 26,790,450
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 9
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
Outstanding at the beginning of the year 2,679,045 26,790,450 2,679,045 26,790,450
Issued during the year - - - -
OUTSTANDING AT THE END OF THE YEAR 2,679,045 26,790,450 2,679,045 26,790,450
(b) terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupee. During the year ended March 31, 2016, dividend of `305 per share (Previous year `195 per share) is recognised as amount distributable to equity shareholders. 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 exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) Shares held by holding/ultimate holding company
Out of the equity shares issued by the Company, shares held by its holding company, ultimate holding company are as below:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 2,009,283 20,092,830
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
2,009,283 20,092,830 - -
(d) Details of shareholders holding more than 5% of the equity shares in the Company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER % OF HOLDING NUMBER % OF HOLDING
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 2,009,283 75.00%
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
2,009,283 75.00% - -
Natixis Global Asset Management Asia Pte. Limited 669,762 25.00% 669,762 25.00%
(e) proposed dividends on equity shares:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
The board proposed dividend on equity shares after the balance sheet date
Proposed dividend on equity shares for the year ended on March 31, 2016: `305 per share (previous year `195)
817,108,725 522,413,775
07 ReseRves and sURplUs
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
(a) Securities premium account
Opening balance 221,897,167 221,897,167
Add: Premium on issue of equity shares - -
Closing balance 221,897,167 221,897,167
(b) Capital Redemption Reserve
Opening balance 197,925,000 197,925,000
Add: Transferred from Statement of Profit and Loss - -
Closing balance 197,925,000 197,925,000
280 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
(c) general reserve
Opening balance 235,570,000 165,194,000
Add : Transfer from Statement of Profit and Loss 110,041,000 70,376,000
Closing balance 345,611,000 235,570,000
(d) Foreign currency translation reserve
Opening balance 2,285,179 2,079,985
Add : Transfer from Statement of Profit and Loss 218,690 205,194
Closing balance 2,503,869 2,285,179
(e) Surplus in the Statement of profit and loss
Opening balance 454,357,604 321,751,720
Profit for the year 1,098,157,418 831,748,656
Less: Appropriations
Less: Appropriations 110,041,000 70,376,000
General reserve 817,108,725 522,413,775
[`305 per share (Previous year `195 per share)]
Tax on proposed equity dividend 166,346,997 106,352,997
Total appropriations 1,093,496,722 699,142,772
net surplus in the Statement of profit and loss 459,018,300 454,357,604
TOTAL 1,226,955,336 1,112,034,950
08 otheR long-teRm lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Lease equalisation 8,974,174 8,181,769
8,974,174 8,181,769
09 otheR cURRent lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Lease equalisation 1,296,991 1,487,361
Statutory dues payable 27,889,172 15,954,369
Other payables (read with note 32) 24,953,456 155,918,381
54,139,619 173,360,111
10 shoRt teRm pRovIsIons
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Other short term provisions (read with note 32) 382,523,184 472,729,636
Provision for gratuity [(net of receivable from fund) read with note 25] 13,344,985 -
other provisions
Provision for income tax (Net of advance tax of `1,016,534,845; Previous year `768,905,531)
80,205,242 102,831,222
Proposed equity dividend 817,108,725 522,413,775
Tax on proposed equity dividend 166,346,996 106,352,997
1,459,529,132 1,204,327,630
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 8 1
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
11 tangIBle assets
gRoSS BloCk aCCUmUlateD DepReCIatIon net BloCk
BalanCe aS at apRIl 1, 2015
aDDItIonS DISpoSalS BalanCe aS at
maRCh 31, 2016
BalanCe aS at apRIl
1, 2015
DepReCIatIon ChaRge FoR
the yeaR
on DISpoSalS
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2015
(`) (`) (`) (`) (`) (`) (`) (`) (`) (`)
Leasehold
improvements
79,474,000 2,561,582 - 82,035,582 75,676,658 2,650,225 - 78,326,883 3,708,699 3,797,342
Furniture and
fixtures
20,521,868 1,368,729 - 21,890,597 11,883,232 2,064,369 - 13,947,601 7,942,996 8,638,636
Office
equipment
45,950,566 3,646,886 125,500 49,471,952 38,556,642 4,403,908 117,223 42,843,327 6,628,625 7,393,924
Computers 52,870,000 9,314,570 2,264,727 59,919,843 43,928,863 6,134,559 2,262,257 47,801,165 12,118,678 8,941,137
Vehicles 9,953,208 5,066,514 975,944 14,043,778 2,514,060 3,001,333 226,504 5,288,889 8,754,889 7,439,148
TOTAL 208,769,642 21,958,281 3,366,171 227,361,752 172,559,455 18,254,394 2,605,984 188,207,865 39,153,887 36,210,187
Previous year 199,727,629 20,347,816 11,305,803 208,769,642 151,531,157 32,177,308 11,149,010 172,559,455 36,210,187.00
12 IntangIBle assets
gRoSS BloCk aCCUmUlateD DepReCIatIon net BloCk
BalanCe aS at
apRIl 1, 2015
aDDItIonS DISpoSalS BalanCe aS at
maRCh 31, 2016
BalanCe aS at apRIl 1, 2015
amoRtISatIon ChaRge FoR
the yeaR
on DISpoSalS
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2015
(`) (`) (`) (`) (`) (`) (`) (`) (`) (`)
Computer
software
59,378,458 5,346,876 - 64,725,334 49,018,067 6,333,850 - 55,351,917 9,373,417 10,360,391
TOTAL 59,378,458 5,346,876 - 64,725,334 49,018,067 6,333,850 - 55,351,917 9,373,417 10,360,391
Previous year 50,118,300 9,260,158 - 59,378,458 43,184,728 5,833,339 - 49,018,067 10,360,391
TOTAL TANGIBLE & INTANGIBLE ASSETS
268,148,100 27,305,157 3,366,171 292,087,086 221,577,522 24,588,244 2,605,984 243,559,782 48,527,304 46,570,578
Previous year 249,845,929 29,607,974 11,305,803 268,148,100 194,715,885 38,010,647 11,149,010 221,577,522 46,570,578
13 non-cURRent Investments (tRade, at cost Unless stated otheRwIse)
FACE VALUE (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
Unquoted equity shares (fully paid)
Investment in equity Shares (unquoted)
MF Utilities India Private Limited 1 500,000 500,000 500,000 500,000
500,000 500,000
Investment in preference Shares (unquoted)
0% Moser Baer Solar Limited (optionally convertible) 10 61,290,000 500,000 61,290,000 500,000
500,000 500,000
Investments in Venture Capital Units (Unquoted)
IDFC Spice Fund 10,000 10,000 10,000 10,000
10,000 10,000
Investment in mutual funds (quoted)
IDFC Yearly Series Interval Fund Direct Plan-Series I-Growth 420,066 5,000,000 420,066 5,000,000
IDFC Yearly series Interval Fund Direct Plan-Series II-Growth 417,199 5,000,000 417,199 5,000,000
IDFC Yearly series Interval Fund Direct Plan-Series III-Growth 416,084 5,000,000 416,084 5,000,000
15,000,000 15,000,000
Aggregate amount of investments in quoted mutual funds
Cost 15,000,000 15,000,000
Market value (Net asset value) 16,534,167 15,204,046
282 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
FACE VALUE (`)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
Investment in mutual funds (unquoted)
IDFC Super Saver Income Fund-Medium Term Plan-Growth-Direct Plan 241,765 5,000,000 241,765 5,000,000
IDFC Dynamic Bond Fund-Growth-Direct Plan 348,029 5,000,000 348,029 5,000,000
IDFC Dynamic Equity Fund-Direct Plan-Growth 500,000 5,000,000 500,000 5,000,000
IDFC Government Securities Fund-Provident Fund-Growth-Direct Plan
204,552 5,000,000 - -
IDFC Classic Equity Fund-Growth-Direct Plan 156,504 5,000,000 - -
IDFC Premier Equity Fund-Growth-Direct Plan 68,914 5,000,000 - -
IDFC Imperial Equity Fund-Growth-Direct Plan 180,629 5,000,000 - -
IDFC Equity Fund-Growth-Direct Plan 204,679 5,000,000 - -
IDFC Arbitrage Fund-Growth-Direct Plan 268,680 5,000,000 - -
IDFC Sterling Equity Fund-Growth-Direct Plan 137,398 5,000,000 - -
IDFC Arbitrage Plus Fund-Growth-Direct Plan 216,200 3,540,000 - -
IDFC Tax Advantage (ELSS) Fund-Growth-Direct Plan 124,904 5,000,000 - -
IDFC Asset Allocation Fund of Fund-Conservative Plan-Direct Plan-Growth
79,529 1,280,000 - -
IDFC Asset Allocation Fund of Fund-Moderate Plan-Direct Plan-Growth 215,738 3,720,000 - -
IDFC Asset Allocation Fund of Fund-Aggressive Plan-Direct Plan-Growth 201,531 3,610,000 - -
IDFC Monthly Income Plan-Growth-Direct Plan 296,653 5,000,000 - -
IDFC Nifty Fund-Growth-Direct Plan 98,659 1,620,000 - -
IDFC Infrastructure Fund-Growth-Direct Plan 423,920 4,970,000 - -
IDFC Banking Debt Fund-Direct Plan-Growth 414,120 5,000,000 - -
IDFC Money Manager Fund-Investment Plan-Growth-Direct Plan 228,005 5,000,000 - -
IDFC All Seasons Bond Fund-Direct Plan-Growth 110,773 2,430,000 - -
IDFC Ultra Short Term Fund-Direct Plan-Growth 253,691 5,000,000 - -
IDFC Government Securities Fund-Investment Plan-Growth-Direct Plan 295,440 5,000,000 - -
IDFC Cash Fund-Growth-Direct Plan 2,921 5,000,000 - -
IDFC Money Manager Fund-Treasury Plan-Growth-Direct Plan 224,028 5,000,000 - -
IDFC Government Securities Fund-Short Term Plan-Growth-Direct Plan 30,313 612,000 - -
IDFC Super Saver Income Fund-Investment Plan-Growth-Direct Plan
143,738 5,000,000 - -
IDFC Super Saver Income Fund-Short Term Plan-Growth-Direct Plan
171,318 5,000,000 - -
IDFC Corporate Bond Fund-Direct Plan-Growth 500,000 5,000,000 - -
126,782,000 15,000,000
Aggregate amount of investments in unquoted mutual funds
Cost 126,782,000 15,000,000
Market value (Net asset value) 131,925,353 17,194,285
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
TOTAL NON-CURRENT INVESTMENTS 142,792,000 31,010,000
14 defeRRed taX asset (net)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
Deferred tax asset
(a) Provisions: Lease equalisation 3,555,000 3,287,000
(b) Fixed assets: Impact of difference between tax depreciation and depreciation / amortisation charged for the financial reporting
26,032,000 26,066,568
29,587,000 29,353,568
DEFERRED TAx ASSET (NET) 29,587,000 29,353,568
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 8 3
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
15 loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
Loans and advances to employees - 1,793,111 - 535,622
Loans and advances to related parties - 318,119 - -
Other receivables - 3,812,481 - 840,918
Security deposits 70,687,205 28,667,725 103,606,065 1,035,685
Capital/supplier advances 4,437,963 3,806,319 722,721 4,011,408
Other loans and advances
Advance tax (Net of provision `894,263,262; Previous year `694,421,714) 48,104,974 - 43,857,858 -
Fringe benefit tax (net of provision) 86,646 - 176,647 -
Balances with government authorities - Service tax credit receivable - 16,578,363 - 14,486,569
Prepaid expenses 2,358,824 40,591,384 30,021,915 75,941,197
Gratuity (read with note 25) - - - 1,163,399
125,675,612 95,567,502 178,385,206 98,014,798
16 cURRent Investments
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
QUANTITY (`) QUANTITY (`)
Investment in mutual funds (unquoted)
IDFC Dynamic Bond Fund-Growth-(Regular Plan) - - 11,275,107 147,793,756
IDFC Dynamic Bond Fund-Growth-(Direct Plan) 62,006,091 965,625,640 36,570,221 516,597,458
IDFC Ultra Short Term Fund-Growth-(Direct Plan) 4,668,264 97,000,000 2,425,590 44,213,230
IDFC Cash Fund-Growth-(Direct plan) 305,265 554,380,717 479,762 803,676,057
IDFC Super Saver Income Fund-Medium Term Plan-Growth-(Direct Plan)
2,973,715 61,500,000 2,973,715 61,500,000
IDFC Super Saver Income Fund-Short Term Plan-Growth-(Direct Plan)
777,529 20,000,000 777,529 20,000,000
IDFC Corporate Bond Fund-Growth-(Direct Plan) 20,000,000 200,000,000 - -
1,898,506,357 1,593,780,501
Aggregate amount of investments in unquoted mutual funds
Cost 1,898,506,357 1,593,780,501
Market value (Net asset value) 2,105,604,664 1,781,436,890
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
Investment in mutual funds (quoted)
IDFC Fixed Term Plan Series 49 Direct Plan-Growth 5,000,000 50,000,000 5,000,000 50,000,000
IDFC Fixed Term Plan Series 54 Direct Plan-Growth 1,000,000 10,000,000 1,000,000 10,000,000
IDFC Fixed Term Plan Series 52 Direct Plan-Growth 1,371,625 13,716,249 1,371,625 13,716,249
IDFC Fixed Term Plan Series 66 Direct Plan-Growth 5,836,945 58,369,447 6,500,000 65,000,000
IDFC Fixed Term Plan Series 74 Direct Plan-Growth (411 Days) 3,000,000 30,000,000 3,000,000 30,000,000
IDFC Fixed Term Plan Series 78 Direct Plan-Growth (366 Days) 6,000,000 60,000,000 6,000,000 60,000,000
IDFC Fixed Term Plan Series 97 Direct Plan-Growth (366 Days) 2,750,000 27,500,000 2,750,000 27,500,000
IDFC Yearly Series Interval Fund Direct Plan - Series I - Growth 1,379,602 15,000,000 1,379,602 15,000,000
264,585,696 271,216,249
Aggregate amount of investments in quoted mutual funds
Cost 264,585,696 271,216,249
Market value (Net asset value) 318,388,601 300,740,756
TOTAL CURRENT INVESTMENTS 2,163,092,053 1,864,996,750
284 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
17 tRade ReceIvaBles (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
Outstanding for a period less than six months - 110,788,130 - 111,284,225
- 110,788,130 - 111,284,225
18 cash and BanK Balances
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`) (`) (`)
non-CURRent CURRent non-CURRent CURRent
cash and cash eqUIvalents
Balances with banks:
In current accounts - 60,359,110 - 165,079,785
- 60,359,110 - 165,079,785
19 RevenUe fRom opeRatIons
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Asset Management fees (Net of service tax `424,012,003; Previous year `335,545,925) 3,046,932,643 2,714,772,672
Portfolio management fees 88,252,473 195,764,274
Performance fees - 51,017,402
Advisory fees 20,947,468 15,887,184
3,156,132,584 2,977,441,532
20 otheR Income
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Interest on income tax refund - 8,626,035
Other interest 36,693 -
Net gain/loss on sale of current investments 99,226,323 63,523,523
Profit on sale of fixed assets (net) 171,742 -
Miscellaneous income 375,795 523,639
Write backs 11,639 5,863,307
99,822,192 78,536,504
21 employee BenefIts eXpense
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Salaries and bonus 510,081,591 497,904,872
Contribution to provident and other funds 35,447,973 29,926,478
ESOP Compensation Cost (refer note 25) - (785,474)
Staff welfare expenses 17,786,670 19,880,347
TOTAL 563,316,234 546,926,223
(a) Salaries and bonus includes shortfall of bonus provision for year ended March 31, 2015 of `2,550,000 on account of change in estimate in provision of bonus.
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 8 5
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
22 otheR eXpenses
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Rent 107,156,317 103,286,951
Rates & taxes 2,305,656 1,083,077
Electricity 13,488,675 12,151,009
Repairs and maintenance
Equipments 2,587,523 3,786,927
Others 36,432,092 33,039,233
Insurance charges 1,266,077 1,377,260
Travelling and conveyance 25,349,489 22,505,758
Printing and stationery 23,366,378 15,594,610
Communication costs 31,378,537 30,359,038
Advertising and publicity 89,034,027 53,496,160
Listing & rating Fees 2,394,106 1,406,892
Loss on sale of fixed assets (net) - 77,946
Professional fees 109,594,127 92,575,783
Directors' sitting fees 1,010,558 1,029,767
Computer Software Expenses 13,996,218 11,310,507
Membership and subscription 41,694,429 35,028,470
Auditors' remuneration (refer note (a) below) 2,684,636 2,181,199
Scheme issue expenses (refer note (b) below) 60,912,846 161,562,151
Shared service cost (refer note (c) below) 12,229,176 8,183,757
Operational costs (refer note (e) below) 435,806,163 543,742,551
Contribution to IDFC Foundation towards corporate social responsibility expenses 19,408,000 14,800,000
Miscellaneous expenses 10,214,576 6,195,066
Provision for doubtful loans 229,932 744,966
1,042,539,538 1,155,519,078
(a) Break up of auditors’ remuneration:
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Audit fee 1,637,855 1,309,060
Tax audit fee 300,000 405,000
Other services 665,000 401,147
Out of pocket expenses 81,781 65,992
2,684,636 2,181,199
(b) Scheme issue expenses are the expenses incurred by the Company towards launching of schemes and plans of IDFC Mutual Fund during the year.
(c) Expenses incurred on behalf of schemes of IDFC Mutual Fund are charged to the Statement of Profit and Loss unless considered recoverable from schemes.
(d) Operational costs comprises of expenses which are incurred by mutual fund schemes over and above the expense limits prescribed by SEBI, interest charged by bank to the Mutual Fund on account of temporary borrowings or overdrafts and payments made to investors of Mutual Fund on account of delay in payment of redemption proceeds which are borne by the Company.
(e) Shared service cost represents reimbursement to holding company/fellow subsidiary under a shared service agreement (Net of recoveries `Nil; Previous year `3,685,733)
286 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
23 eXpendItURe In foReIgn cURRencIes (on accRUal BasIs)
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Advertising - Media 16,665,846 2,179,554
Professional fees for SEC filing - 5,355,000
Membership & Subscription - 85,562
Foreign travel 260,312 248,945
Other professional fees 9,370,390 955,046
24 eaRnIngs In foReIgn cURRencIes (on accRUal BasIs)
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Advisory Fees - Absolute Asia Asset Management Limited 20,947,468 15,675,106
25 In accordance with Accounting Standard 15 on ‘Employee Benefits’ the following disclosures have been made:
i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Provident fund 16,286,141 14,861,198
Superannuation fund 1,111,721 1,247,637
Pension fund 2,127,875 1,690,705
Labour welfare fund 478 210
ii. The details of the Company’s post - retirement gratuity benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
change In the defIned BenefIt oBlIgatIons:
Liability at the beginning of the year 51,656,861 39,878,900
Current service cost 9,542,197 8,807,426
Interest cost 4,190,297 3,944,806
Liabilities assumed on acquisition / (settled on divestiture) 349,521 1
Benefits paid (7,982,591) (4,781,099)
Actuarial Losses / (Gain) 5,598,917 3,806,827
Closing Defined Benefit Obligation 63,355,202 51,656,861
Unrecognised Past Service Cost - -
Liability at the end of the year 63,355,202 51,656,861
faIR valUe of plan assets:
Fair value of plan assets at the beginning of the year 52,090,323 35,242,274
Expected return on plan assets 4,129,931 2,744,985
Contributions 1,111,414 17,042,802
Benefits paid (7,982,591) (4,781,099)
Actuarial gain / (loss) on plan assets (524,771) 1,841,361
Assets acquired on acquisition - -
Fair value of plan assets at the end of the year 48,824,306 52,090,323
Total actuarial loss / (gain) to be recognised 6,123,688 1,965,466
actUal RetURn on plan assets:
Expected return on plan assets 4,129,931 2,744,985
Actuarial gain / (loss) on plan assets (524,771) 1,841,361
Actual return on plan assets 3,605,160 4,586,346
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 8 7
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
amoUnt RecognIsed In the Balance sheet:
Liability at the end of the year 63,355,202 51,656,861
Fair value of plan assets at the end of the year (48,824,306) (52,090,323)
Amount not recognised as an Asset - 154,014
Amount recognised in the balance sheet under "Provision for employee benefits/(Loans and advances)" 14,530,896 (279,448)
Amount receivable recognised in the balance sheet under "Provision for employee benefits/(Loans and advances)" (1,185,911) (883,951)
eXpense RecognIsed In the statement of pRofIt and loss:
Current service cost 9,542,197 8,807,426
Interest cost 4,190,297 3,944,806
Expected return on plan assets (4,129,931) (2,744,985)
Net actuarial loss / (gain) to be recognised 6,123,688 1,965,466
Liabilities assumed on acquisition/ (settled on divestiture) 349,521 1
Effect the limit in Para 59 (b) (154,014) 154,014
Expense recognised in the statement of profit and loss under 'Employee benefits expense' 15,921,758 12,126,728
ReconcIlIatIon of the lIaBIlIty RecognIsed In the Balance sheet:
Opening net Liability (279,448) 4,636,626
Expense recognised 15,921,758 12,126,728
Contribution by the Company (1,111,414) (17,042,802)
Amount recognised in the balance sheet under "Gratuity" 14,530,896 (279,448)
Expected employer's contribution next year 10,000,000 7,800,000
experience adjustments:
MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014 MARCH 31, 2013 MARCH 31, 2012
(`) (`) (`) (`) (`)
Defined benefit obligation 63,355,202 51,656,861 39,878,900 30,485,959 21,737,970
Plan assets 48,824,306 52,090,323 35,242,274 30,485,959 -
Surplus/(deficit) (14,530,896) 433,462 (4,636,626) - (21,737,970)
Exp. Adj. on Plan Liabilities 5,998,246 387,811 5,345,910 (394,748) 522,079
Exp. Adj. on Plan Assets (524,771) 1,841,361 (869,961) 3,863,873 -
MARCH 31, 2016 MARCH 31, 2015
(%) (%)
Investment pattern:
Insurer managed funds 100.00 100.00
Principal assumptions:
Discount rate (p.a.) 8.00 7.85
Expected rate of return on assets (p.a.) 9.00 9.00
Salary escalation rate (p.a.) 8.00 8.00
The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
26 The Group is engaged in the business of providing asset management service and investment advisory services. During the year ended March 31, 2016, the Group was engaged in only one business segment no geographical segments and as such there are no separate reportable segments, as required by Accounting Standard 17 on ‘Segment Reporting’.
288 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
27 Related paRty dIsclosUResNames of the related parties where control exists irrespective of whether transactions have been occurred or not:
I. Ultimate holding Company:
IDFC Limited (w.e.f. July 9, 2015)
II. holding Company:
IDFC Limited (upto July 8, 2015)
IDFC Financial Holding Company Limited (w.e.f. July 9, 2015)
Names of the related parties with which there are transactions during the year:
III. Fellow Subsidiaries
IDFC AMC Trustee Company Limited
IDFC Foundation
IDFC Bank Limited
IV. associates
Uttarakhand Infrastructure Development Company Limited
V. key management personnel:
Mr. Naval Bir Kumar - Vice Chairman (upto October 31, 2015)
Mr. Kalpen Parekh - Chief Executive Officer
The nature of transactions carried out with the above related parties in the ordinary course of business are as follows:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
I. holding Company/Ultimate holding Company:
IDFC Limited Reimbursement of expenses 2,817,316 10,077,265
Purchase of Preference Share - 500,000
Shared service cost paid 3,125,256 9,193,490
Recovery of expenses / cost of asset 243,219 1,433,022
ESOP cost recovery/(reimbursement) - 785,474
Management fees income - 8,359,544
Advisory fees - 219,653
II. Fellow Subsidiaries:
IDFC AMC Trustee Company Limited Recovery of expenses 318,356 193,544
IDFC Foundation Business centre fees recovered - 999,733
CSR Contribution 19,408,000 14,800,000
IDFC Bank Limited Reimbursement of expenses 2,777,150 -
Shared service cost paid 9,103,920 -
Recovery of expenses / cost of asset 1,712,397 -
Balance receivable 318,119 -
Current Account Balance 2,680,832 -
Current Account Balance (Investor Education and Awareness)
3,137,428 -
IV. associates:
Uttarakhand Infrastructure Development Company Limited
Purchase of fixed assets - 12,398
V. key management personnel: Remuneration paid 61,508,369 71,372,203
Reimbursement of business expenses 49,854 273,463
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 8 9
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
28 In accordance with Accounting Standard 19 on ‘Leases’ the following disclosures in respect of operating leases are made:
i. The Group companies have taken vehicles for certain employees under cancellable operating leases which is included under salaries as follows:
name oF the leSSoR lateSt expIRy Date maRCh 31, 2016 maRCh 31, 2015
(`) (`)
ALD Automative Private Limited September 2016 1,132,044 1,153,169
The total future minimum lease payments under cancellable operating lease for each of the periods is given below:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Not later than one year 120,880 610,626
Later than one year and not later than five years - 120,880
ii. The Holding Company has entered into cancellable as well as non-cancellable leasing arrangements for office premises at various locations in India generally for a period of 36 months. As per the term of the lease all maintenance charges and municipal levies are borne by the lessee.
The total future minimum lease payments under non-cancellable operating lease for each of the periods is given below:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Not later than one year 78,762,686 78,769,417
Later than one year and not later than five years 220,489,671 293,909,749
The terms of renewal and escalation clauses are those normally prevalent in similar agreements.
29 In accoRdance wIth accoUntIng standaRd 20 on ‘eaRnIngs peR shaRe’:
‘The basic / diluted earnings per share has been calculated based on the following:
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
Net profit after tax 1,098,157,418 831,748,656
Net amount available for equity shareholders 1,098,157,418 831,748,656
Weighted average number of equity shares (Nos.) 2,679,045 2,679,045
Basic and diluted earnings per equity share (`) 409.91 310.46
30 capItal and otheR commItments
Estimated amount of contracts remaining to be executed and not provided for `8,959,646 (Previous year `6,387,441).
31 contIngent lIaBIlItIes not pRovIded foR In Respect of :
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
(a) Claims not acknowledged as debts in respect of :
i. Income-tax department has preferred an appeal with High Court pertaining to AY 2007 - 08 as ITAT passed an order in favor of the Company.
- 6,682,283
ii. Income-tax department has preferred an appeal with High Court pertaining to AY 2008 - 09 as ITAT passed an order in favor of the Company.
- 4,458,623
iii. Income-tax department has preferred an appeal with ITAT pertaining to AY 2009 - 10 as CIT(A) passed an order in favor of the Company.
- 205,790
iv. Income-tax demands disputed by the Company Pertaining AY 12-13. The matter in dispute is under appeal.
- 5,941,196
v. Reversal of Cenvat credit under protest. 6,481,420 1,841,159
(b) Income Tax demand on Mutual Fund on account of non-payment of tax on income from pass through certificates by the issuing trust.
4,860,729 4,860,729
290 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
32 As per information available with the group companies, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the group companies owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the group companies and relied upon by the auditors.
33 accoUntIng foR amalgamatIonThe Honorable High Court of Bombay, on April 18, 2015, sanctioned a scheme of amalgamation (the scheme) under sections 391 to 394 of the Companies Act, 1956. In terms of the Scheme, IDFC Investment Advisors Limited (Transferor Company) has been amalgamated with the Company (Transferee Company) with effect from June 23, 2015 having Appointed date April 01, 2015, upon which the entire business, including all assets and liabilities of the Transferor Company stands transferred to and vested in the Transferee Company. The amalgamation has been accounted under the pooling of interest method and the transfer of assets and liabilities have been recorded at their book value.
AS AT MARCH 31, 2016
(`) (`)
valUe of assets and lIaBIlItIes acqUIRed:
non current assets
(a) Fixed assets
Tangible assets 339,725
Intangible assets 1,318,309
1,658,034
(b) Non-current investments 10,000
(c) Deferred tax assets (net) 7,568
(d) Long-term loans and advances 29,114,477
29,132,045
Current assets
(a) Current investments 317,250,224
(b) Trade receivables 36,008,950
(c) Cash and bank balances 3,184,971
(d) Short-term loans and advances 3,356,027
359,800,172
Current liabilities
(a) Other current liabilities 661,562
(b) Short-term provisions 27,668,332
28,329,894
362,260,357
Less:
Carrying value of investments in the Transferor Company 100,000,000
Reserves and Surplus of transferor company (including General Reserve) 262,260,357
362,260,357
34 As per the provisions of the Section 135 of the Companies Act, 2013, the Group is required to contribute ` 19,407,794 (Previous year ` 14,760,957) during the financial year towards Corporate Social Responsibility. The Group has contributed `19,408,000 (Previous year ` 14,800,000) to IDFC Foundation.
35 net dIvIdend RemItted In foReIgn eXchange
yeaR oF RemIttanCe (enDIng on) March 31, 2016 March 31, 2015
Period to which it relates April 01, 2014 to April 01, 2013 to
March 31, 2015 March 31, 2014
Number of non-resident shareholders 1 1
Number of equity shares held on which dividend was due 669,762 669,762
Amount remitted (in USD) 2,029,582 2,676,051
Amount remitted (in INR) 130,603,590 167,440,500
I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 9 1
Notes formiNg part of the coNsolidated fiNaNcial statemeNts as at and for the year ended march 31, 2016
36 employee stocK optIonsDuring the year ended March 31, 2016, Employee Stock Option Scheme (‘ESOS’) were granted by IDFC Limited (Ultimate Holding Company) to the employees of the Company. The exercise price of these ESOS was market price, thus no cost has been allocated to the Company.
37 The figures for the previous year have been regrouped, whereever necessary to conform with the current year’s classification/disclosure.
Mr. Sahjahan Ally Nauthoo
Mr. Sevin Chendriah
Ernst & Young
Deutsche Bank
(Mauritius) Limited
Cim Fund Services Ltd
33, Edith Cavell Street
Port Louis, Mauritius
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
Idfc Investment manageRs (maURItIUs) lImIted
I D F C I N V E S T M E N T M A N A G E R S ( M A U R I T I U S ) L I M I T E D | 2 9 3
geneRal InfoRmatIon
IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 as a private company limited by shares and holds a Category 1 Global Business Licence Company issued by the Financial Services Commission. The Company is licenced to operate as a CIS Manager pursuant to Section 98 of the Securities Act 2005 and the Financial Services (Consolidated Licensing and Fees) Rules 2008.
The principal activity of the Company is to provide investment management services.
However, The India Hybrid Infrastructure Fund limited has already been wound up and India Infrastructure Opportunities Fund Ltd is currently under liquidation. During the year under review, the Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously known as IDFC Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015. However, the fund has been set up but not yet operational.
The Company holds standards of corporate governance through awareness of business ethics and supervision of its management team by the Board of directors.
The main objects and functions of the Board as regards Corporate Governance are to:
¡ determine, agree and develop the Company’s general policy on corporate governance in accordance with the applicable Code of Corporate Governance;
¡ select candidates for eventual Board appointments; and
¡ review the terms and conditions of all service agreements between the Company and service providers.
The Board is satisfied that it has discharged its responsibilities for the year in respect of Corporate Governance.
the BoaRd of dIRectoRs
The directors have been selected based on their professional background and expertise to positively contribute to the Board’s activities. The Board is currently made up of two resident directors.
dIRectoRs
Resident
Mr. Sahjahan Ally Nauthoo
Mr. Bashir Nabeebokus (Resigned on 15 January 2016)
Mr. Sevin Chendriah (Appointed on 15 January 2016)
The Board is responsible for directing the affairs of the Company in the best interests of shareholders, in conformity with legal and regulatory framework, and consistent with its constitution and best governance practices.
the dIRectoRs’ pRofIle
mr. Sahjahan ally nauthoo
Mr Nauthoo is a Fellow of the Association of Chartered Certified Accountants - UK and holds a Bachelor of Business Science (Hons) degree in the field of Accountancy with the University of Mauritius. He is also a Member of the Mauritius Institute of Professional Accountants and Mauritius Institute of Directors.
He has over 11 years of experience in the global business sector and 2 years of experience in the field of banking and finance. He has gained wide experience in the structuring, setting up and administration including secretarial, accounting, taxation and compliance of offshore funds and companies. He serves as director and authorized signatory for a large number of funds/companies administered by Cim Global Business. He is currently a Senior Manager and prior to joining Cim Global Business, he also worked for 5 years with International Financial Services Limited.
mr. Sevin Chendriah (appointed on 15 January 2016)
Mr. Chendriah holds a Bsc (Hons) in Management with Finance from the University of Mauritius. He joined Cim Group in 2007 and has gained wide experience in corporate secretarial, administration, compliance and legal field. He has also been broadly involved in the structuring, setting-up, taxation and administration of Global Business entities promoted by a wide portfolio of clients, including large multi-national Companies and high net-worth individuals.
mr. Bashir nabeebokus (Resigned on 15 January 2016)
Mr. Nabeebokus was a Fellow of the Association of Chartered and Certified Accountants - UK and hold a B.Sc (Hons) Economics from the University of Mauritius. He was also a member of the Mauritius Institute of Professional Accountants, and Mauritius Institute of Directors, as well as former Panel Member of ACCA Mauritius office. Bashir had been in the global business sector for over 15 years with an enriched exposure in fund/company set up, structuring and administration, company secretarial, accounting, international tax planning, compliance and customer due diligence checks along with a strong client and people relationship management skills among others. He also had directorship in several client companies including investment managers/advisors and collective investment schemes. Bashir spent the last 9 years with International Financial Services Limited prior to joining the Cim Group as Senior Manager in July 2009.
CORPORATE GOvERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2016
294 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
constItUtIon
The Constitution of the Company was adopted on 19 August 2010 and same was subsequently altered on 26 December 2014 to insert a clause on Arbitration.
BoaRd meetIngs
The Board has at least one scheduled meeting each year during which it:
1. examines all statutory matters;
2. approves the audited financial statements and reviews important accounting issues;
3. reviews the Company’s performance;
4. ensures compliance of the Company with the legislations; and
5. takes note of changes in the legislations which may affect the Company.
In addition, the Board meets whenever necessary to discuss urgent business.
The Board papers are usually sent to the directors one week in advance, except where urgent meetings are convened.
During the year under review, the Board met five times and the table below shows the attendance of directors either physically or by alternates at meetings held from 01 April 2015 to 31 March 2016:
dIRectoRs attendance at BoaRd
Mr. Bashir Nabeebokus (Resigned on 15 January 2016) 5/5
Mr. Sevin Chendriah (Appointed on 15 January 2016) 0/0
Mr. Sahjahan Ally Nauthoo 5/5
The Board promotes, encourages and expects open and frank discussions at meetings. Board meetings provide a forum for challenging and constructive debate.
BoaRd commIttees
The Board of directors collectively considers the measures in respect of the Code of Corporate Governance issues. Due to the size of the Board, no sub-committees (Audit Committees, The Corporate Governance Committee, Board Risk Committee, Remuneration Committee and the Nomination Committee) have been established.
statement of RemUneRatIon polIcy
The Director fee is USD 4, 000 per annum per officer of the Administrator serving as Director.
IdentIfIcatIon of Key RIsKs foR the company
The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. The Board confirms that there is an ongoing process for identifying, evaluating and managing the various risks faced by the Company.
fInancIal RIsK factoRs
The financial risk factors have been set out in note 14 of these financial statements.
Related paRty tRansactIons
The related party transactions have been set out in note 13 of these financial statements.
code of ethIcs, health and safety and socIal IssUes
These issues are not applicable to the Company given the nature of activities of the Company and the fact that the Company has no employees. The Company is managed under service agreements with third parties detailed in the Corporate Data section.
envIRonment
Due to the nature of its activities, the Company has no adverse impact on the environment.
coRpoRate socIal ResponsIBIlIty and donatIons
During the year, the Company has not made any donations.
natURe of BUsIness
The principal activity of the Company is that of a CIS Manager.
aUdItoRs’ RepoRt and fInancIal statements
The auditors’ report is set out on pages 8 and 9 and the statement of profit or loss and other comprehensive income is set out on page 11 of this financial statements.
aUdIt fees
Audit fees payable to Ernst & Young (Mauritius) for the year amounted to USD 4,800 (excluding VAT and any disbursements).
appRecIatIon
The Board expresses its appreciation and gratitude to all those involved for their contribution during the year.
CORPORATE GOvERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2016
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COMMENTARy OF DIRECTORS FOR THE YEAR ENDED 31 MARCH 2016
The directors present their commentary, together with the audited financial statements of IDFC Investment Managers (Mauritius) Ltd. for
the year ended 31 March 2016.
statUs and pRIncIpal actIvIty
IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 in the Republic of Mauritius and
obtained its Category 1 Global Business Licence on 14 September 2010.
The principal activity of the Company is to provide investment management services. The Company has entered into an investment
management agreement with India Multi-Avenues Fund Limited (previously known as IDFC Focus Fund Limited), a fund incorporated in
Mauritius on 22 May 2015. However, the fund has not yet been launched.
ResUlts
The Company’s loss for the year under review is USD 34,287 (2015: loss of USD 43,543).
The directors do not recommend the payment of a dividend for the year under review.
dIRectoRs’ ResponsIBIlIty In Respect of the fInancIal statements
The Company’s directors are responsible for the preparation and fair presentation of the financial statements, comprising the Company’s
statement of financial position at 31 March 2016, and the statement of profit or loss and other comprehensive income, the statement
of changes in equity and statement of cash flows for the year then ended, and the notes to the financial statements, which include a
summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting Standards
and in compliance with the requirements of the Companies Act 2001.
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International
Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the
directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error and applying appropriate accounting policies; and making account estimates that are reasonable in the circumstances.
The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the
business will not be a going concern in the year ahead as detailed out under note 6 of these financial statements.
aUdItoRs
The auditors, Ernst & Young, have indicated their willingness to continue in office.
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We, Cim Fund Services Ltd, certify, to the best of our knowledge and belief, that we have filed with the Registrar of Companies all such returns as are required for IDFC Investment Managers (Mauritius) Ltd. under the Companies Act 2001 for the financial year ended 31 March 2016.
cIm fUnd seRvIces ltd
SeCRetaRy
12 April, 2016
SECRETARy’S CERTIFICATE UNDER SECTION 166 (D) OF THE COMPANIES ACT 2001
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INDEPENDENT AUDITOR’S REPORT
to the memBeR oF
IDFC InVeStment manageRS (maURItIUS) ltD
Report on the Financial Statements
We have audited the financial statements of IDFC Investment Managers (Mauritius) Ltd (the “Company”) on pages 10 to 24 which comprise the statement of financial position as at 31 March 2016 and the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended and a summary of significant accounting policies and other explanatory notes.
Directors’ Responsibility for the Financial Statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, 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 auditors consider internal control relevant to the entity’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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the 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.
opinion
In our opinion, the financial statements on page 6 to 18 give a true and fair view of the financial position of the Company as at 31 March 2016 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and comply with the Companies Act 2001.
other matter
This report has been prepared solely for the Company’s member in accordance with Section 205 of the Companies Act 2001. Our audit work has been undertaken so that we might state to the Company’s member those matters we are required to state to the latter in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s member for our audit work, for this report, or for the opinions we have formed.
Report on other legal and Regulatory Requirements
Companies act 2001
We have no relationship with or interests in the Company other than in our capacity as auditors and dealings in the ordinary course of business.
We have obtained all the information and explanations we have required.
In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.
eRnSt & yoUng RogeR De ChaZal, a.C.a.
Ebène, Mauritius Licensed by FRC
Date:
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STATEMENT OF FINANCIAL POSITION as at March 31, 2016
NOTES
2016 2015
USD USD
assets
Current assets
Other receivables 7 49,355 11,800
Prepayments 7a 3,939 3,948
Cash at bank 8 220,880 42,483
TOTAL ASSETS 274,174 58,231
eqUIty and lIaBIlItIes
equity and reserves
Stated capital 9 407,290 157,290
Accumulated losses (142,866) (108,579}
Shareholder’s funds 264,424 48,711
Current liabilities
Accrued expenses 10 9,750 9,520
TOTAL EQUITY AND LIABILITIES 274,174 58,231
These financial statements have been approved and authorised for issue by the Board of directors on 12 April 2016 and signed on its behalf by:
name oF DIReCtoRS
mr. Sahjahan ally nauthoo mr. Sevin Chendriah
the notes on pages 10 to 18 form an integral part of these financial statements. Independent auditors’ report on page 5.
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STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIvE INCOME For the Year Ended March 31, 2016
the notes on pages 10 to 18 form an integral part of these financial statements. Independent auditors’ report on page 5.
NOTES
2016 2015
USD USD
Income - -
eXpenses
Fees paid on behalf of India Multi-Avenues Fund Limited 41,055 8,300
Fees paid on behalf of other funds 13 - 3,500
Receivable from Fund (41 055) (11,800)
Write off of fees paid in respect of funds 13 3,500 12,169
Professional fees 11,000 11,000
Audit fees 5,980 5,865
Administration fees 5,000 5,000
Licence and annual registration fees 4,059 4,059
Insurance cover 3,555 3,545
Disbursement 490 345
Bank charges 503 360
TRC renewal Fees 200 700
Legal fees - 500
TOTAL ExPENSES 34,287 43,543
operating loss for the year (34,287) (43,543)
Income tax expense 12 - -
loss for the year (34,287) (43,543)
Other comprehensive income
TOTAL COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAx (34,287) (43,543)
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STATEMENT OF CHANGES IN EqUITy For the Year Ended March 31, 2016
STATED CAPITAL ACCUMULATED LOSSES TOTAL
USD USD USD
At 01 April 2014 57,290 (65, 036) (7,746)
Issue of shares (note 9) 100,000 - 100,000
Loss for the year - (43,543) (43, 543)
Other comprehensive income for the year - - -
At31 March 2015 157,290 (108,579) 48,711
Issue of shares (note 9) 250,000 - 250,000
Loss for the year - (34,287) (34,287)
Other comprehensive income for the year - - -
Total comprehensive loss for the year - (34,287) (34,287)
At 31 March 2016 407,290 (142,866) 264,424
the notes on pages 10 to 18 form an integral part of these financial statements. Independent auditors’ report on page 5.
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STATEMENT OF CASH FLOwS For the Year Ended March 31, 2016
NOTE
2016 2015
USD USD
opeRatIng actIvItIes
Loss before tax (34,287) (43,543)
Adjustments to reconcile loss before tax to net cash flows: 3,500 -
Working capital adjustments:
Increase in other receivables and prepaid expenses (41,046) (11,800)
Increase / (decrease) in accrued expenses 230 (3,655)
NET CASH FLOWS USED IN OPERATING ACTIVITIES (71,603) (58,998)
fInancIng actIvItIes
Proceeds from issue of shares 9 250,000 100,000
NET CASH FLOW FROM FINANCING ACTIVITIES 250,000 100,000
Net increase in cash and cash equivalents 178,397 41,002
Cash and cash equivalents at 01 April 42,483 1,481
CASH AND CASH EQUIVALENTS AT 31 MARCH 220,880 42,483
note: Cash and cash equivalents comprises of cash at bank.
the notes on pages 10 to 18 form an integral part of these financial statements. Independent auditors’ report on page 5.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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01. coRpoRate InfoRmatIonIDFC Investment Managers (Mauritius) Ltd. (the “Company”) is a private company limited by shares, incorporated in the Republic of Mauritius on 13 September 2010, with registered address at C/o Cim Fund Services Ltd, 33, Edith Cavell Street, Port Louis, Mauritius. The Company holds a Category 1 Global Business Licence and is regulated by the Financial Services Commission (FSC).
The principal activity of the Company is to provide investment management services.
However, India Infrastructure Opportunities Fund Ltd is currently under liquidation. During the year under review, the Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously known as IDFC India Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015, to which the Company shall provide investment management services. The Fund has not yet started operation.
02. BasIs of pRepaRatIonThe financial statements of the Company are prepared under the historical cost convention.
2.1 Statement oF ComplIanCe
The financial statements are prepared in accordance with and comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
03. sUmmaRy of sIgnIfIcant accoUntIng polIcIesThe principal accounting policies applied in the preparation of these financial statements are set out below.
Foreign currency transactions
Functional and presentation currency
The Company’s functional currency is the USD, which is the currency of the primary economic environment in which it operates. The Company’s performance is evaluated and its liquidity is managed in USD. Therefore, the USD is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The Company’s presentation currency is also in USD.
transactions and balances
Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities are translated at the spot rate of exchange ruling at the reporting date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition gain or loss on change in fair value of the item (i.e. translation differences are recognised in other comprehensive income or profit or loss).
Financial assets
Initial recognition and measurement
Financial assets within the scope of lAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial assets at initial recognition.
Financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.
The Company’s financial assets include cash at bank and other receivables.
Subsequent measurement
loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the profit or loss.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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Impairment
At each reporting date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net realisable price and value in use, that is the present value of estimated future cash flows expected to arise from continuing to use the assets and from its disposals at the end of its useful life.
An impairment loss is recognised as an expense in profit or loss immediately, unless the asset is carried at revalued amount in which case the impairment loss is recognised against the revaluation or fair value reserve for the assets to the extent that the impairment loss does not exceed the amount held in the revaluation or fair value reserve for that same asset. Any excess is recognised immediately in profit or loss.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of lAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of directly attributable transaction costs.
The Company’s financial liabilities include accrued expenses only.
Derecognition of financial instruments
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a company of similar financial assets) is derecognised when:
- the rights to receive cash flows from the asset have expired; or
- the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability is substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.
Stated capital
Ordinary shares are classified as equity, net of costs directly related to the issue of the shares.
provision
A provision is recognised when and only when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow embodying economic benefits will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, and sales taxes or duty.
- Management fees are accounted for on an accrual basis.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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Related parties
Parties are considered to be related to the Company if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operating decisions, or vice versa, or where the Company is subject to common control or common significant influence. Related parties may be individuals or other entities.
expenses
Expenses are accounted for on an accrual basis.
taxation
Current income tax
Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.
Deferred taxation
Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax.
The principal temporary differences arise from provisions for bad debts and unrealised exchange differences. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
04. changes In accoUntIng polIcIes and dIsclosUResThe accounting policies adopted are consistent with those of the previous financial year except for the following new and amended IFRS and IFRIC interpretations adopted in the year commencing 1 April2015:
eFFeCtIVe FoR aCCoUntIng peRIoD BegInnIng on oR aFteR
amendments to laS 19 Defined Benefit plans: employee Contributions 1 July 2014
Annual Improvements 2010-2012 Cycle
IFRS 2 Share-based Payment 1 July 2014
IFRS 3 Business Combinations 1 July 2014
IFRS 8 Operating Segments 1 July 2014
lAS 16 Property, Plant and Equipment 1 July 2014
lAS 38 Intangible Assets 1 July 2014
lAS 24 Related Party Disclosures 1 July 2014
annual Improvements 2011-2013 Cycle
IFRS 3 Business Combinations 1 July 2014
IFRS 13 Fair Value Measurement 1 July 2014
lAS 40 Investment Property 1 July 2014
Where the adoption of the standards or amendments or improvements is deemed to have an impact on the financial statements or performance of the Company, their impact is described below:
annual Improvements 2010-2012 Cycle
IaS 24 Related party Disclosures
The amendment is applied retrospectively and clarifies that a management entity (an entity that provides key management personnel services) is a related party subject to the related party disclosures. In addition, an entity that uses a management entity is required to disclose the expenses incurred for management services.
Transactions and balances with related parties are disclosed under Note 13.
annual Improvements 2011-2013 Cycle
IFRS 13 Fair Value measurement
The amendment is applied prospectively and clarifies that the portfolio exception in IFRS 13 can be applied not only to financial assets and financial liabilities, but also to other contracts within the scope of lAS 39. The Company does not apply the portfolio exception in IFRS 13.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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05. standaRds IssUed BUt not yet effectIveThe standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Company’s financial statements are disclosed below. The Company intends to adopt applicable standards when they become effective.
The applicable standards, amendments to existing standards and interpretations for the Company which were in issue but not yet effective are as follows.
eFFeCtIVe FoR aCCoUntIng peRIoD BegInnIng on oR aFteR
IFRS 9 Financial Instruments 1 January 2018
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture(Amendments to IFRS 10 and lAS 28)
1 January 2016
Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and lAS 28) 1 January 2016
IFRS 14 Regulatory Deferral Accounts 1 January 2016
IFRS 15 Revenue from Contracts with Customers 1 January 2018
IFRS 16 Leases 1 January 2019
Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11) 1 January 2016
Clarification of Acceptable Methods of Depreciation and Amortisation(Amendments to lAS 16 and lAS 38)
1 January 2016
Agriculture: Bearer Plants (Amendments to lAS 16 and lAS 41) 1 January 2016
Amendments to lAS 27: Equity Method in Separate Financial Statement 1 January 2016
Disclosure Initiative (Amendments to lAS 1) 1 January 2016
Annual Improvements 2012-2014 Cycle 1 January 2016
They are mandatory for accounting periods beginning on the specified dates, but the Company has not early adopted them.
An assessment of the standards, amendments to existing standards and interpretations that may impact on the Company’s financial statements when they become effective, given existing operations and financial position, is as follows:
IFRS 9 Financial Instruments - Classification and measurement of financial assets, accounting for financial liabilities and derecognition - 1 January 2018
IFRS 9 introduces new requirements for classifying and measuring financial assets, as follows:
In July 2014, the IASB issued the final version of IFRS 9 Financial Instruments that replaces lAS 39 Financial Instruments: Recognition and Measurement and all previous versions of IFRS 9. IFRS 9 brings together all three aspects of the accounting for financial instruments project: classification and measurement, impairment and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
Classification and measurement of financial assets
All financial assets are measured at fair value on initial recognition, adjusted for transaction costs if the instrument is not accounted for at fair value through profit or loss (FVTPL). Debt instruments are subsequently measured at FVTPL, amortised cost or fair value through other comprehensive income (FVOCI), on the basis of their contractual cash flows and the business model under which the debt instruments are held. There is a fair value option (FVO) that allows financial assets on initial recognition to be designated as FVTPL if that eliminates or significantly reduces an accounting mismatch. Equity instruments are generally measured at FVTPL. However, entities have an irrevocable option on an instrument-by-instrument basis to present changes in the fair value of non-trading instruments in other comprehensive income (OCI) (without subsequent reclassification to profit or loss).
Classification and measurement of financial liabilities
For financial liabilities designated as FVTPL using the FVO, the amount of change in the fair value of such financial liabilities that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other lAS 39 Financial Instruments: Recognition and Measurement classification and measurement requirements for financial liabilities have been carried forward into IFRS 9, including the embedded derivative separation rules and the criteria for using the FVO.
Impairment
The impairment requirements are based on an expected credit loss (ECL) model that replaces the lAS 39 incurred loss model. The ECL model applies to: debt instruments accounted for at amortised cost or at FVOCI; most loan commitments; financial guarantee contracts; contract assets under !FRS 15; and lease receivables under lAS 17
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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Leases. Entities are generally required to recognise either 12-months’ or lifetime ECL, depending on whether there has been a significant increase in credit risk since initial recognition (or when the commitment or guarantee was entered into). For some trade receivables, the simplified approach may be applied whereby the lifetime expected credit losses are always recognised.
The impact on the Company is still being assessed.
Investment entities: applying the Consolidation exception (amendments to IFRS 10, IFRS 12 and laS 28) effective 1 January 2016
This amendment to IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in Other Entities and lAS 28 Investments in Associates and Joint Ventures (2011) was made to address issues that have arisen in the context of applying the consolidation exception for investment entities by clarifying the following points:
¡ the exemption from preparing consolidated financial statements for an intermediate parent entity is available to a parent entity that
is a subsidiary of an investment entity, even if the investment entity measures all of its subsidiaries at fair value.
¡ a subsidiary that provides services related to the parent’s investment activities should not be consolidated if the subsidiary itself is
an investment entity.
¡ when applying the equity method to an associate or a joint venture, a non-investment entity investor in an investment entity may
retain the fair value measurement applied by the associate or joint venture to its interests in subsidiaries.
¡ an investment entity measuring all of its subsidiaries at fair value provides the disclosures relating to investment entities required by
IFRS 12.
The amendment will not have an impact on the Company.
Disclosure Initiative (Amendments to lAS 1) • effective 1 January 2016
This amends lAS 1 Presentation of Financial Statements to address perceived impediments to preparers exercising their judgement in presenting their financial reports by making the following changes:
¡ clarification that information should not be obscured by aggregating or by providing immaterial information, materiality
considerations apply to the all parts of the financial statements, and even when a standard requires a specific disclosure, materiality
considerations do apply;
¡ clarification that the list of line items to be presented in these statements can be disaggregated and aggregated as relevant and additional guidance on subtotals in these statements and clarification that an entity’s share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single line items based on whether or not it will subsequently be reclassified to profit or loss; and
¡ additional examples of possible ways of ordering the notes to clarify that understandability and comparability should be considered when determining the order of the notes and to demonstrate that the notes need not be presented in the order so far listed in paragraph 114 of lAS 1.
This standard would be adopted by the Company on the effective date.
06. sIgnIfIcant accoUntIng JUdgements, estImates and assUmptIonsThe preparation of the Company’ s financial statements requires management to make judgements, estimates and assumptions that affect the amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Judgements
Recoverability of receivable from India multi avenues Fund
The Company is the promoter of a new fund namely India Multi-Avenues Fund Limited (“IMAFL”) (previously known as IDFC India Focus Fund Limited). The Company also acts as the Investment Manager of IMAFL. IMAFL will invest in a portfolio of securities comprising principally of shares, depository receipts, convertible bonds, debt securities, derivative instruments and units of Mutual Funds worldwide.
However, given that India Multi-Avenues Fund Limited has not yet started trading, the Company is currently incurring all its expenses on its behalf. The directors have made an assessment of the recoverability of the receivable from IMAFL and believe that there is no indication of impairment.
Determination of functional currency
The determination of the functional currency of the Company is important since recording of transactions and exchange differences arising there from are dependent on the functional currency selected. As described in note 3, the directors have considered those factors described therein and have determined that the functional currency of the Company in the USD.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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07. otheR ReceIvaBles
2016 2015
USD USD
Amount receivable from sub fund (note 13a) 49,355 11,800
(a) pRepaymentS 2,768 2,778
- Professional indemnity cover 500 500
- Activity licence fees 438 437
- Financial Services Commission licence fees 233 233
- Annual registration fees 3,939 3,948
08. cash at BanK
2016 2015
USD USD
Cash at bank 220,880 42,483
09. stated capItal
NO OF SHARES 2016 2015
2016 2015 USD USD
At 01 April 157,290 57,290 157,290 57,290
Issue 250,000 100,000 250,000 100,000
At 31 March 407,290 157,290 407,290 157,290
10. accRUed eXpenses
2016 2015
USD USD
Audit fees 5,750 5,520
Director fees 2,000 2,000
Administration fees 1,250 1,250
MLRO fees 750 750
9,750 9,520
11. management and advIsoRy fees
(i) management fees
During the year under review, the Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously known as IDFC India Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015. However, the fund has not yet started trading and as such no management fees have been received by the Company.
(ii) advisory fees
The new fund namely India Multi-Avenues Fund Limited, has not yet started its trading activities and as such no advisory fees have been paid during the year under review.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
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12. taXatIonThe Company, being the holder of a Category 1, Global Business Licence, is liable to income tax in Mauritius on its taxable profit arising from its world-wide income at the rate of 15%. The Company’s foreign sourced income is eligible for a foreign tax credit which is computed as the lower of the Mauritian tax and the foreign tax on the respective foreign sourced income. The foreign tax for a GBL1 company is based on either the foreign tax charged by the foreign country or a presumed amount of foreign tax: the presumed amount of foreign tax is based on 80% of the Mauritian tax on the relevant foreign sourced income.
Capital gains are outside the scope of the Mauritian tax net while trading profits made by the Company from the sale of shares are exempt from tax. At 31 March 2016, the Company had tax losses of USD 119,044 (2015: USD 88,257).
A numerical reconciliation between accounting loss and tax charge is shown below:
(a) Statement of comprehensive income:
2016 2015
USD USD
Loss for the year (34,287) (43,543)
Add: Non allowable expenses 3,500 94,959
Tax losses (30,787) (31,374)
Loss brought forward (88,257) (56,883}
Loss carried forward (119,044) (88,257)
13. Related paRty dIsclosUResThe Company had the following related party transactions during the year.
NAME OF RELATED COMPANY NATURE OF TRANSACTIONS
RELATIONSHIP 2016 2015
ExPENSES PAID ON BEHALF IMAFL
INVESTMENT MANAGER
USD USD
(a) (i) India multi-avenues Fund limited (“ImaFl”)
At 01 April 8,300 -
Additions during the year 41,055 8,300
At 31 March 49,355 8,300
The Company is the promoter of a fund namely India Multi-Avenues Fund Limited (IMAFL), for which it has incurred expenses amounting to USD 41,055 (2015: USD 8,300). Once IMAFL is launched and starts its operation, it is expected that this amount will be reimbursed to the Company.
(a) (ii) In 2015, the Company had paid USD 3,500 to BLC & Associates Ltd for the review of legal and statutory documents of a proposed new fund. This amount was accounted for as a receivables in the financial statements at 31 March 2015. The Fund documents pertained to Equity and a Feeder Fund. However, the project did not materialised and as such there is no possibility to recover these costs. Therefore these have been written off in the accounts of the Company in the current year.
(b) India Infrastructure opportunities Fund ltd (“IIoF”)
2016 2015
USD USD
Additions during the year - 10,226
Receipt from IIOF - -
Write-off - (10,226)
At 31 March - -
Expenses incurred on behalf of IIOF have been written off as the Fund is in the process of winding up.
(c) the India hvbrid Infrastructure Fund limited (“tIhIFl”)
2016 2015
USD USD
At 01 April - -
Additions during the year - 1,368
Fees paid on behalf of TIHIFL - -
Write off - (1,368)
At 31 March - -
Expenses incurred on behalf of TIHIFL have been written off as the Fund has been wound up on 26 March 2015.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C I N V E S T M E N T M A N A G E R S ( M A U R I T I U S ) L I M I T E D | 3 0 9
(d) hvbrid India listed ltd. (“hIl”)
2016 2015
USD USD
At 01 April - -
Additions during the year - 575
Write off - (575)
At 31 March - -
Expenses incurred on behalf of HIL have been written off as the Fund has been wound up.
(e) name oF Company RelatIonShIp natURe oF tRanSaCtIonS
VolUme oF tRanSaCtIonS
BalanCeS USD
2016 2015
Cim Fund Services Ltd Administrator, Secretary and directorship
Professional (including director fees)
13,000 13,000 13,000
14. fInancIal RIsK management oBJectIves and polIcIes
Fair values
The carrying amounts of cash at bank, other receivables and accrued expenses approximate their fair values.
Financial risk factors
The Company’s activities expose it to a variety of financial risks such as market risk, credit risk, interest rate risk, foreign exchange risk, price risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.
market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk
The Company’s financial assets are non-interest bearing. As a result, the Company is not subject to any interest rate risk.
Foreign exchange risk
The Company has no exposure to currency risk as all its financial assets and liabilities are in USD.
Credit risk
The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets which potentially subject to the Company to concentrations of credit risk consist principally of bank balances. Cash at bank are held in reputable financial institutions. Accordingly, the Company has no significant concentration of credit risk. The maximum exposure to credit risk assisting from default of the counterpart, with a maximum exposure equal to the carrying amount of these instruments.
The risk of default for the amount receivable from related company is minimal as the IMAFL will be launching its activities soon and will be able to repay its debt.
The maximum exposure to credit risk at the reporting date was:
2016 2015
USD USD
Amount receivable from related company 49,355 11,800
Cash and cash equivalents 220,880 42 483
270,235 54,283
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
310 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
liquidity risk
The Company maintains and manages liquidity risk through the ability to close out market position. Residual and discounted contractual maturities of financial liabilities are presented below:
2016 ON DEMAND TOTAL
USD USD
Accrued expenses 9,750 9,750
2015 ON DEMAND TOTAL
USD USD
Accrued expenses 9 520 9 520
15. capItal RIsK managementAs per Regulation 38 of the Securities (Collective Investment Schemes and Closed-End Funds) Regulations 2008, a CIS Manager holding a licence issued by the Financial Services Commission is required to maintain a minimum stated unimpaired capital of at least Mauritian rupees 1 million or an equivalent amount.
As at 31 March 2016, the Company’s minimum stated unimpaired capital has been met.
16. ImmedIate and UltImate holdIng companyThe directors consider IDFC Asset Management Company Limited, a company incorporated in India, as the immediate and ultimate holding company.
17. events afteR RepoRtIng dateThere are no subsequent events.
Idfc amc tRUstee company lImIted
U69990MH1999PLC123190
Mr. Sunil Kakar (Chairperson)
Mr. Nityanath Ghanekar
Mr. Bharat Raut
Mr. Sridar Venkatesan
Mr. Geoffroy Sartorius
Mr. Uday Phadke
S. R. Batliboi & Co. LLP
Chartered Accountants
Standard Chartered Bank
IDFC Bank Limited
One Indiabulls Centre,
6th Floor, Jupiter Mills Compound,
841, Senapati Bapat Marg,
Elphinstone Road (West)
Mumbai 400 013
tel +91 22 6628 9999
Fax + 91 22 2421 5051
Website www.idfcmf.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
312 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD’S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Sixteenth Annual Report together with the audited financial statements for the financial year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
paRtIcUlaRs foR the peRIod ended maRch 31, 2016
foR the peRIod ended maRch 31, 2015
Total Income 1,202,513 841,788
Less: Total Expenses 1,095,405 789,850
Profit before Tax 107,108 51,938
Less: Provision for Tax 33,100 16,000
profit after tax 74,008 35,938
company’s affaIRs
The Company is the Trustee to the schemes of IDFC Mutual Fund (“IDFC mF”). The Assets under Management of IDFC MF were ` 51,448.31 crore (excluding Fund of Funds Schemes) as on March 31, 2016.
new Scheme launches: During the year, the AMC launched a new scheme under IDFC MF viz., IDFC Corporate Bond Fund, an open-ended debt scheme that would invest only in corporate bonds and would not take any exposure to G-Sec. The AMC also received SEBI clearance for launch of IDFC Nifty ETF and IDFC Sensex ETF and would launch the schemes at appropriate opportunity. Further, the Board approved the launch of new schemes viz., IDFC Balanced Fund and IDFC Money Market Fund, subject to SEBI clearance.
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 5 of the Notes forming part of the financial statements.
dIvIdend
The Directors do not recommend any dividend for the financial year ended March 31, 2016.
shaRe capItal Update
IDFC Limited (“IDFC”) was granted an in-principle approval by the Reserve Bank of India on April 9, 2014 to set up a bank in new private sector. The terms and conditions contained in the Guidelines for Licensing of New Banks in the Private Sector dated February 22, 2013 mandates that all new banks would need to be set up through a Non-Operative Financial Holding Company (“noFhC”). The NOFHC was required to hold the Bank as well as all the other financial services entities of IDFC Group which are regulated by RBI or other financial sector regulators. Accordingly, IDFC Financial Holding Company Limited (“IDFC FhCl”) was incorporated as a wholly owned subsidiary company of IDFC.
Consequent to the restructuring, equity stake held by IDFC in its regulated subsidiary companies engaged in financial activities, including IDFC AMC Trustee Company Limited, was required to be transferred to IDFC FHCL. However, IDFC would continue to be the Sponsor of IDFC Mutual Fund. On July 9, 2015, the Board approved the transfer of approximately 75% of equity stake of the Company from IDFC to IDFC FHCL. The said transfer was executed after obtaining prior approval of Securities and Exchange Board of India.
paRtIcUlaRs of employees
The Company does not have any employee.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.
foReIgn eXchange eaRnIngs and eXpendItURe
There was no income or expenditure in foreign currency during the period under review.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed as per Section 134(3)(m) are not applicable and hence not given.
dIRectoRs
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing Annual General Meeting (“agm”) and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Mr. Sunil Kakar as Director at the ensuing AGM.
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 1 3
BOARD’S REPORT
Pursuant to the provisions of Section 149, 150, 152, 160 and other applicable provisions of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014, Schedule IV to the Companies Act, 2013 and with prior approval of Securities and Exchange Board of India (“SeBI”) the Board appointed Mr. Nityanath Ghanekar and Mr. Uday Phadke as an additional Directors w.e.f. September 9, 2015 and April 1, 2016 respectively, in the category of Independent Director (“ID”) of the Company. It is proposed to appoint them as Independent Directors for a period starting from the ensuing AGM to hold office till the conclusion of the Eighteenth (18th) Annual General Meeting of the Company to be held for the FY18.
Mr. Jamsheed Kanga and Mr. D.M. Sukthankar were appointed as IDs of the Company at the Extra – Ordinary General Meeting of the Company held on December 19, 2014 for the period of one year starting from the said EGM till the conclusion of the Fifteenth AGM of the Company for FY 14-15 held on July 16, 2015. Consequently, the term of Mr. Jamsheed Kanga and Mr. D.M. Sukthankar was completed on July 16, 2015 and they cease to be Directors of the Company from that day. Further, Mr. Tara Sankar Bhattacharya resigned as Director of the Company w.e.f. October 15, 2015. The Board places on record sincere appreciation for services rendered by them during their tenure.
declaRatIon of Independence
The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.
meetIngs of the BoaRd
During the year, seven Board meetings were held on April 23, 2015, June 10, 2015, July 16, 2015, October 21, 2015, December 16, 2015, January 28, 2016 and March 9, 2016. The gap between any two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013. Attendance details of Board of Directors for the Board Meetings held during FY16 are given below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. Sunil Kakar 03055561 Chairperson 7 7
Mr. Nityanath Ghanekar1 00009725 Independent Director 4 4
Mr. Bharat Raut 00066080 Independent Director 7 7
Mr. Sridar Venkatesan 02241339 Independent Director 7 6
Mr. Uday Phadke2 00030191 Independent Director NA NA
Mr. Geoffroy Sartorius 03536833 Nominee of NATIxIS Global Asset Management 7 2
Mr. Jamsheed Kanga3 00045641 Independent Director 3 3
Mr. D. M. Sukthankar3 00034416 Independent Director 3 3
Mr. T. S. Bhattacharya4 00157305 Independent Director 3 21 Appointed as an Independent Director w.e.f. September 9, 2015.2 Appointed as an Independent Director w.e.f. April 1, 2016.3 Ceased to be Directors of the Company w.e.f. July 16, 2015.4 Ceased to be Director of the Company w.e.f. October 15, 2015.
aUdIt commIttee
During the year, Four Audit Committee meetings were held on April 23, 2015, July 16, 2015, October 21, 2015 and January 28, 2016. The gap between two meetings was within the limit of the period prescribed under the Companies Act, 2013.
On October 13, 2015, the Audit Committee of the Company was re-constituted by the Board as per the provisions of section 177 the Companies Act, 2013 and rules made thereunder. The composition of Audit Committee is in compliance with the Companies Act, 2013. Attendance details of Directors for the Audit Committee Meetings held during FY16 are given below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Nityanath Ghanekar1 Independent Director Chairperson 2 2
Mr. Bharat Raut Independent Director Member 4 4
Mr. Geoffroy Sartorius Nominee of NATIxIS Global Asset Management Member 4 2
Mr. Sunil Kakar2 Director Member 2 2
Mr. Jamsheed Kanga3 Independent Director Chairperson 2 2
Mr. D. M. Sukthankar4 Independent Director Member 2 21 Appointed as a Chairperson of the Committee w.e.f. October 13, 20152 Ceased to be a Member of the Committee w.e.f.. October 13, 20153 Ceased to be Chairperson of the Company w.e.f. July 16, 20154 Ceased to be a Member of the Company w.e.f. July 16, 2015
314 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
statUtoRy aUdItoRs
At the Fourteenth AGM of the Company, the Shareholders approved the appointment of S.R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration Number- 301003E, a member firm of Ernst & Young Global Limited, as Statutory Auditors for a period of five consecutive years i.e. from 14th AGM of the Company held for FY14 to 19th AGM of the Company to be held for FY19.
As per the provisions of the Companies Act, 2013 and Rules made there under, the above appointment is required to be ratified at every AGM. The Statutory Auditors have confirmed that they are eligible to be appointed as Statutory Auditors for FY17.
The Members are requested to ratify the appointment of S.R. Batliboi & Co. LLP, Chartered Accountants as Statutory Auditors of the Company for FY17.
There are no qualifications or observations or other remarks made by the Statutory Auditors in their report.
paRtIcUlaRs of contRacts oR aRRangements wIth Related paRtIes UndeR sectIon 188 of the companIes act, 2013
In all related party transactions that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. IDFC Group has always been committed to good corporate governance practices, including matters relating to Related Party Transactions.
RIsK management
The Members of the Audit Committee ensure the measurement and control of risk factors and advice on the same to the Management of the Company.
mateRIal changes/ commItments
There have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
There were no significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.
eXtRact of annUal RetURn
The extract of Annual Return in the prescribed Form No. MGT 9 is appended as annexure I.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2016 and of the profit and loss of the Company for that period;
(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual financial statements on a going concern basis; and
(e) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
acKnowledgements
The Board places on record its gratitude to the Securities and Exchange Board of India, Reserve Bank of India, Association of Mutual Funds of India, other regulatory authorities and institutions, Investors in the Mutual Fund schemes and to the Members for their continued guidance and support.
The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
sunil KakarChairperson
Mumbai, June 25, 2016
BOARD’S REPORT
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 1 5
as on the fInancIal yeaR ended on maRch 31, 2016
[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 U69990MH1999PLC123190
ii) Registration Date 20/12/1999
iii) Name of the Company IDFC AMC TRUSTEE COMPANY LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares Indian Non-Government Company
v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra. Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051
vi) Whether listed company Yes / No No
vii) Name, Address and Contact details of Registrar and Transfer Agent, if any
TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011. Tel.: +91 22 6656 8484
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. Trustee of Mutual Fund 6619 100%
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding approx. 75% Section 2(46)
2 IDFC Limited L65191TN1997PLC037415
Ultimate Holding
Indirectly approx. 75%
Section 2(46)
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 yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
shaRes
Promoter
(1) Indian
Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL
Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL
State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL
Bodies Corp. 37,493 6 37,499 75% 37,493 6 37,499 75% NIL
Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (a) (1):- 37,493 6 37,499 75% 37,493 6 37,499 75% nIl
(2) Foreign nIl nIl nIl nIl nIl nIl nIl nIl nIl
a) NRIs - Individuals
b) Other - Individuals
c) Bodies Corp.
d) Banks /
e) Any Other
Sub-total (a) (2):- nIl nIl nIl nIl nIl nIl nIl nIl nIl
total shareholding of promoter (a) = (a)(1)+(a)(2)
37,493 6 37,499 75% 37,493 6 37,499 75% nIl
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
316 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR
% change dURIng
the yeaRdemat physIcal total % of total
shaResdemat physIcal total % of total
shaRes
B. public Shareholding
1. Institutions nIl nIl nIl nIl nIl nIl nIl nIl nIl
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 NIL NIL NIL NIL NIL NIL NIL NIL NIL
ii) Overseas 12,501 NIL 12,501 25% 12,501 NIL 12,501 25% NIL
b) Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL
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) NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (B)(2):- 12,501 nIl 12,501 25% 12,501 nIl 12,501 25% 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) 49,994 6 50,000 100% 49,994 6 50,000 100% nIl
(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
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
% change In shaRe holdIng
dURIng the yeaR
1. IDFC Limited 37,499 75% NIL NIL NIL NIL (100%)
9. IDFC Financial Holding Company Limited
NIL NIL NIL 37,499 75% NIL 100%
total 37,499 75% 37,499 75%
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 1 7
(iii) Change in promoters’ Shareholding:
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
37,499 75% 37,499 75%
2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):
37,499 shares transferred from IDFC Limited and its nominees to IDFC Financial Holding Company Limited and its nominees on July 9, 2015
75% 37,499 shares transferred from IDFC Limited and its nominees to IDFC Financial Holding Company Limited and its nominees on July 9, 2015
75%
3 At the end of the year 37,499 75% 37,499 75%
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NOT APPLICABLE
B. Remuneration to other directors: IN `
sR. no.
paRtIcUlaRs of RemUneRatIon
name of dIRectoRs total amoUnt
sUnIl KaKaR
Jamsheed Kanga
d. m. sUKthanKaR
t. s. BhattachaRya
BhaRat RaUt
sRIdaR venKatesan
geoffRoy saRtoRIUs
nItyanath ghaneKaR
1. Independent Directors
Fee for attending board /committee meetings
NIL 60,000 60,000 30,000 210,000 120,000 NIL 150,000 630,000
Commission NIL NIL NIL NIL NIL NIL NIL NIL
Others, please specify NIL NIL NIL NIL NIL NIL NIL NIL
total (1) nIl 60,000 60,000 30,000 210,000 120,000 nIl 150,000 630,000
2. Other Non-Executive Directors
NIL NIL NIL NIL NIL NIL NIL NIL NIL
Fee for attending board committee meetings
Commission
Others, please specify
total (2) nIl nIl nIl nIl nIl nIl nIl nIl nIl
total (B) = (1 + 2) nIl 60,000 60,000 30,000 210,000 120,000 nIl 150,000 630,000
Note: Sitting fees paid to Directors is within the overall Ceiling limit as prescribed under the Companies Act, 2013.
C. Remuneration to key managerial personnel other than mD/manager/WtD: NOT APPLICABLE
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
318 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc amc tRUstee company lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC AMC Trustee Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2016, its profit, and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act;
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 1 9
INDEPENDENT AUDITOR’S REPORT
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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; and
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For S.R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
320 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE TO THE INDEPENDENT AUDITOR’S REPORT
annexure referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date Re: IDFC amC trustee Company limited
(i) The company does not have any fixed assets. Accordingly, the provisions of clause 3 (i)of the Order are not applicable to the Company and hence not commented upon.
(ii) The Company’s business does not involve inventories and, accordingly, the requirements under paragraph 4(ii) of the Order are not applicable to the Company.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a), (b) and (c)of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, there are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act 2013 are applicable. Accordingly, the provisions of clause 3(iv) of the Order are not applicable to the Company and hence not commented upon.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including income-tax, service tax, cess and other material statutory dues applicable to it. The provisions relating to employees’ state insurance, provident fund,sales-tax, duty of custom, duty of excise, value added tax, are not applicable to the Company.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, there are no dues of income-tax, sales-tax, service tax, custom duty, excise duty, value added tax and cess which have not been deposited on account of any dispute.
(viii) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders or government.
(ix) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the provisions of section 197 read with Schedule V of the Act is not applicable to the company and hence reporting under clause 3(xi) are not applicable and hence not commented upon.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act , 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 1
ANNExURE A TO THE INDEPENDENT AUDITOR’S REPORT
anneXURe a to the Independent aUdItoR’s RepoRt of even date on the fInancIal statements of Idfc amc tRUstee company lImIted
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
to the members of IDFC amC trustee Company limitedWe have audited the internal financial controls over financial reporting of IDFC AMC Trustee Company Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial ControlsThe Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinionIn our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
explanatory paragraphWe also have audited, in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India,as specified under Section 143(10) of the Act, the financial statements of IDFC AMC Trustee Company Limited, which comprise the Balance Sheet as at March 31, 2016, and the related Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, and our report dated April 27, 2016 expressed an unqualified opinion thereon.
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration Number: 301003E
per Viren h. mehtaPartnerMembership Number: 048749
Mumbai, April 27, 2016
322 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
NOTES ` ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 4 500,000 500,000
(b) Reserves and surplus 5 527,763 453,755
1,027,763 953,755
non-current liabilities
(a) Other long-term liabilities 6 30,000 30,000
Current liabilities
(a) Other current liabilities 7 4,037 7,556
(b) Short-term provisions 8 371,425 114,711
375,462 122,267
TOTAL 1,433,225 1,106,022
assets
non-current assets
(a) Long-term loans and advances 9 229,738 201,838
Current assets
(a) Trade receivables 10 114,500 78,652
(b) Cash and bank balances 11 1,084,076 798,665
(c) Short-term loans and advances 9 4,911 26,867
1,203,487 904,184
TOTAL 1,433,225 1,106,022
Summary of significant accounting policies 3
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors of
IDFC amC trustee Company limited
Viren h. mehtaPartner(Membership No. 048749)
nityanath ghanekarDirector
Sunil kakarDirector
Mumbai | April 27, 2016
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 3
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
NOTES ` `
I Income
Revenue from operations
Trusteeship fees 1,200,000 840,000
Other income 12 2,513 1,788
TOTAL INCOME (I) 1,202,513 841,788
II eXpenses
Other expenses 13 1,095,405 789,850
TOTAL ExPENSES (II) 1,095,405 789,850
III pRofIt BefoRe taX (I - II) 107,108 51,938
Iv taX eXpense (cURRent taX) 33,100 16,000
v pRofIt afteR taX (III - Iv) 74,008 35,938
Basic and diluted earnings per equity share (Nominal value of share `10) 16 1.48 0.72
Summary of significant accounting policies 3
The accompanying notes are an integral part of the financial statements.
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors of
IDFC amC trustee Company limited
Viren h. mehtaPartner(Membership No. 048749)
nityanath ghanekarDirector
Sunil kakarDirector
Mumbai | April 27, 2016
324 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
` ` `
cash flow fRom opeRatIng actIvItIes
profit before tax 107,108 51,938
Changes in working capital:
(Increase)/decrease in loans and advances (short-term) 21,956 (16,928)
(Increase)/decrease in trade receivables (35,848) -
Increase/(decrease) in current liabilities 249,358 11,905
235,466 (5,023)
Cash generated from/(used in) operations 342,574 46,915
Direct taxes paid (net of refund received) (57,163) (40,164)
net cash flow from operating activities (a) 285,411 6,751
net cash flow from investing activities (B) - -
net cash flow from financing activities (C) - -
Net increase/(decrease) in cash and cash equivalents (a + B + C) 285,411 6,751
Cash and cash equivalents as at beginning of the year (refer note 11) 798,665 791,914
Cash and cash equivalents as at end of the year (refer note 11) 1,084,076 798,665
285,411 6,751
As per our report of even date
For S. R. Batliboi & Co. llpChartered AccountantsICAI Firm Registration No. 301003E
For and on behalf of the Board of Directors of
IDFC amC trustee Company limited
Viren h. mehtaPartner(Membership No. 048749)
nityanath ghanekarDirector
Sunil kakarDirector
Mumbai | April 27, 2016
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 5
01 natURe of opeRatIonsIDFC AMC Trustee Company Limited (‘the Company’) is a public limited company, incorporated in India and regulated by The Securities Exchange Board of India (SEBI).
During the year, IDFC Limited has transferred its shareholding in IDFC AMC Trustee Company Limited to IDFC Financial Holding Company Limited which is a wholly owned subsidiary of IDFC Limited with effect from July 9, 2015.
02 BasIs of pRepaRatIonThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and the applicable guidelines issued by SEBI. The financial statements have been prepared on the accrual basis under the historical cost convention. The accounting policies followed in the preparation of financial statements are consistent with those followed in the previous year.
03 sIgnIfIcant accoUntIng polIcIes
a. USe oF eStImateS
The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
B. ReVenUe ReCognItIon
¡ Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.
¡ Income from trusteeship services is recognised at price agreed in accordance with the arrangement with the IDFC Mutual Fund.
c. pRoVISIonS
¡ A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.
d. InCome tax
¡ Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961, enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
¡ Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.
Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
e. CaSh anD CaSh eqUIValentS
Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.
f. eaRnIng peR ShaRe
Basic earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
326 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
g. Segment RepoRtIng
The Company’s primary business segments are reflected based on the principal business carried out, i.e. Trusteeship Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.
04 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
aUthoRIsed shaRes
Equity shares of `10 each 50,000 500,000 50,000 500,000
IssUed, sUBscRIBed & fUlly paId-Up shaRes
Equity shares of `10 each 50,000 500,000 50,000 500,000
TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL
500,000 500,000
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
Outstanding at the beginning of the year 50,000 500,000 50,000 500,000
Issued during the year - - - -
outstanding at the end of the year 50,000 500,000 50,000 500,000
(b) terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) Shares held by holding/ultimate holding company
Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 37,499 374,990
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
37,499 374,990 - -
(d) Details of shareholders holding more than 5% of the equity shares in the Company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % OF HOLDING nUmBeR % OF HOLDING
IDFC Limited (of which 6 shares are held jointly with nominees)
- - 37,499 75.00%
IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)
37,499 75.00% - -
Natixis Global Asset Management Asia Pte. Limited 12,501 25.00% 12,501 25.00%
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 7
05 ReseRves and sURplUs
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
sURplUs In the statement of pRofIt and loss
Opening balance 453,755 417,817
Add: Profit for the year 74,008 35,938
Closing balance 527,763 453,755
06 otheR long-teRm lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Other payables - Corpus 30,000 30,000
TOTAL 30,000 30,000
07 otheR cURRent lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Statutory dues payable 4,037 7,556
TOTAL 4,037 7,556
08 shoRt teRm pRovIsIons
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Provision for income tax (Net of advance tax of `231,132; Previous year `218,969) 46,468 42,631
Other short term provisions (read with note 17) 324,957 72,080
TOTAL 371,425 114,711
09 loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
non-CURRent poRtIon
CURRent matURItIeS
non-CURRent poRtIon
CURRent matURItIeS
(`) (`) (`) (`)
Balances with government authorities - Service tax credit receivable
- 4,911 - 26,867
Advance tax (Net of provision `150,600; Previous year `133,500)
229,738 - 201,838 -
TOTAL 229,738 4,911 201,838 26,867
10 tRade ReceIvaBles (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Outstanding for a period less than six months 114,500 78,652
TOTAL 114,500 78,652
11 cash and BanK Balances
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Cash and cash equivalents
Balances with banks: In current accounts 1,084,076 798,665
TOTAL 1,084,076 798,665
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
328 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
12 otheR Income
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
(`) (`)
Interest on income tax refund 2,513 1,788
TOTAL 2,513 1,788
13 otheR eXpenses
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
(`) (`)
Travelling and conveyance 134,823 132,089
Printing, stationery and postage 1,890 3,780
Professional fees 105,732 48,161
Directors' sitting fees 590,000 460,000
Internet expenses 25,000 25,000
Statutory Notice 9,804 -
Miscellaneous expenses 5,906 1,039
Meeting and other expenses 187,844 85,544
Auditors' remuneration (refer note (a) below) 31,906 31,737
Profession tax paid 2,500 2,500
TOTAL 1,095,405 789,850
(a) Break up of auditors’ remuneration:
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
(`) (`)
Audit fee 15,000 15,000
Other services 12,000 12,000
Out of pocket expenses 4,906 4,737
TOTAL 31,906 31,737
14 The Company is engaged in the business of providing trusteeship services. As such there is no separate reportable primary business segment or geographical segment as required by Accounting Standard 17 on “Segment Reporting”.
15 Related paRty dIsclosURes
Names of the related parties where control exists irrespective of whether transactions have been occurred or not:
I. Ultimate holding Company:
IDFC Limited (w.e.f. July 9, 2015)
II. holding Company:
IDFC Limited (upto July 8, 2015)
IDFC Financial Holding Company Limited (w.e.f. July 9, 2015)
Names of the related parties with which there are transactions during the year:
III. Fellow Subsidiary:
IDFC Asset Management Company Limited
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 9
Details of transactions:
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
(`) (`)
name oF RelateD paRty anD natURe oF RelatIonShIp tRanSaCtIonS DURIng the yeaR
I. fellow sUBsIdIaRIes:
IDFC Asset Management Company Limited Reimbursement of expenses
318,356 193,544
16 the BasIc and dIlUted eaRnIngs peR shaRe has Been calcUlated Based on the followIng:
YEAR ENDED MARCH 31, 2016
YEAR ENDED MARCH 31, 2015
(`) (`)
Net profit after tax 74,008 35,938
Weighted average number of equity shares (Nos.) 50,000 50,000
Basic and diluted earnings per share (`) 1.48 0.72
17 As per information available with the Company, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by auditors.
18 The figures for the previous year have been regrouped wherever necessary, in order to make them comparable to the current year.
Idfc pRoJects lImIted
U45203MH2007PLC176640
Mr. Sunil Kakar (Chairperson)
Mr. A K T Chari
Mr. T S Bhattacharya
Dr. Rajeev Uberoi
Deloitte Haskins & Sells
Chartered Accountants
IDFC Bank Limited
Naman Chambers
C-32, G-Block, Bandra-Kurla
Complex, Bandra (East)
Mumbai 400 051
tel +91 22 4222 2000
Fax + 91 22 2421 5051
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
I D F C P R O J E C T S L I M I T E D | 3 3 1
to the memBeRs
Your Directors have pleasure in presenting the Ninth Annual Report together with the audited financial statements for the year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
paRtIcUlaRs foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
Total Income 57,343,545 -
Less: Total Expenses 404,277,985 1,073,180
Loss before Tax (346,934,440) (1,073,180)
Less: Provision for Tax - -
loss after tax (346,934,440) (1,073,180)
company’s affaIRs
Your Company’s principle activity is to design, develop, engineer, finance, construct, operate and maintain infrastructure projects.
dIvIdend
The Directors do not recommend any dividend for the year ended March 31, 2016 in view of the losses.
sUBsIdIaRy companIes / JoInt ventURes and assocIate companIes
IDFC Finance Limited (“IFl”), which was a Non-deposit taking Non-Banking Financial Company, surrendered the certificate of registration to the RBI during FY16. Post surrender of the registration, the entire share capital of IFL was transferred by IDFC to IDFC Projects Limited (“Ipl”). IFL is now wholly owned subsidiary of the IDFC Projects Limited.
Additionally, IDFC Projects Limited has one Associate Company (26% owned), namely, Jetpur Somnath Tollways Pvt. Ltd.
A Statement containing salient features of the financial statement and all other requisite details of the said Associate company in the format AOC-I is appended as annexure I.
meRgeR
An application has been filed with the Hon’ble High Court of Bombay for amalgamation of IFL with IPL. The said application was admitted by Hon’ble High Court of Bombay on April 22, 2016. The entire process of amalgamation is expected to be completed within 4 -5 months time.
paRtIcUlaRs of employees
The Company does not have any employee.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.
foReIgn eXchange eaRnIngs and eXpendItURe
There are no foreign exchange earnings and expenditure during the year.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRs
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Dr. Rajeev Uberoi would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment of Dr. Rajeev Uberoi at the ensuing AGM.
During the year, Mr. Sadashiv S. Rao resigned as a Director w.e.f. July 24, 2015.
During the year, Mr. A K T Chari and Mr. T S Bhattacharya were appointed as additional directors under the category of Independent Director with effect from July 24, 2015 and March 31, 2016 respectively. The Board recommends appointment of Mr. A K T Chari and Mr. T S Bhattacharya as an Independent Directors on the Board to the Shareholders of the Company.
BOARD’S REPORT
332 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
declaRatIon of Independence
The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.
meetIngs of the BoaRd
During the year, the Board met five (5) times on April 23, 2015, July 24, 2015, October 21, 2015, January 05, 2016 and January 29, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY16 is given in the table below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. Sunil Kakar 03055561 Chairperson 5 5
Mr. A K T Chari1 00746153 Independent Director 3 0
Mr. T S Bhattacharya2 00157305 Independent Director 0 0
Dr. Rajeev Uberoi 01731829 Non Executive Director 5 5
Mr. Sadashiv S Rao3 01245772 Non Executive Director 2 01 Appointed as an Independent Director w.e.f. July 24, 20152 Appointed as an Independent Director w.e.f. March 31, 2016 3 Resigned as a Director w.e.f. July 24 , 2015
aUdIt commIttee
During the year, the Audit Committee met four (4) times on April 23, 2015, July 24, 2015, October 21, 2015 and January 29, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance of the Audit Committee Meetings held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. A K T Chari1 Independent Director Member 2 0
Mr. Sunil Kakar2 Non Executive Director Chairperson 4 4
Mr. T S Bhattacharya3 Independent Director Member 0 0
Dr. Rajeev Uberoi Non Executive Director Member 4 4
Mr. Sadashiv S Rao4 Non Executive Director Member 2 01 Appointed as a member of the committee w.e.f. July 24, 2015 and appointed as Chairperson w.e.f. April 25, 20162 Resigned as a Chairperson w.e.f. April 25, 2016 but continuing as a Member3 Appointed as a member w.e.f. April 25, 20164 Resigned as member w.e.f. July 24, 2015
nomInatIon and RemUneRatIon commIttee
Nomination and Remuneration Committee (‘NRC’) was constituted on April 25, 2016. The NRC comprises of the following:
1. Mr. A K T Chari - Chairperson
2. Mr. Sunil Kakar
3. Mr. T S Bhattacharya
The Composition of NRC is in compliance with the provisions of the Companies Act, 2013.
BoaRd evalUatIon
The evaluations for the Directors and the Board is proposed to done through circulation of two questionnaires, one for the Directors and other for the Board which would assess the performance of the Board on select parameters related to roles, responsibilities and obligations of the Board and functioning of the Committees including assessing the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
aUdItoRs
The Shareholders of the Company at the AGM held on September 29, 2015 had approved the appointment of Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, (Registration No. 117365W) Statutory Auditors for a period of 1 year to hold office from the conclusion of the Eighth Annual General Meeting for FY15-16 up to the conclusion of the Ninth Annual General Meeting of the Company for FY16-17.
M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, Statutory Auditors of the Company will retire at the conclusion of the ensuing AGM.
BOARD’S REPORT
I D F C P R O J E C T S L I M I T E D | 3 3 3
The Board recommends the reappointment of Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, as the Statutory Auditors of the Company.
RIsK management
The members of the Board ensures control of risk factors and advice on the same to the Management of the Company.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
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/ commItments
There have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period March 31, 2016 till the date of this report.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
On April 22, 2016, Hon’ble Bombay High Court passed order to dispense with holding Shareholders Meeting for considering the Scheme of Amalgamation and filing of separate company scheme petition by IDFC Projects Limited, the Transferee Company. There are no other significant material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its future operations.
aUdItoR’s RepoRt
There was no qualification, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2016 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 RetURn
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as annexure II.
Related paRty tRansactIon
In 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, the Board approved “Policy on Related Party Transactions” at the meeting held on January 22, 2015 which was also recommended by the Audit Committee.
Since all related party transactions entered into the 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.
acKnowledgements
The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
sunil KakarChairperson
BOARD’S REPORT
acknowledgement
334 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
[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 U45201MH2000PLC271333
2. name of the subsidiary IDFC Finance 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.
INR
5. Share capital 210,002,000
6. Reserves & surplus 24,181,782
7. total assets 234,444,000
8. total liabilities 234,444,000
9. Investments NIL
10. turnover 42,968,620
11. profit before taxation 42,382,880
12. provision for taxation 14,207,000
13. profit after taxation 28,175,880
14. proposed Dividend NIL
15. % of shareholding 100%
notes: Names of subsidiaries which have been liquidated or sold during the year: NOT APPLICABLE
anneXURe IFORM AOC-I
PART BassocIates and JoInt ventURes(Pursuant to Section 129(3) of the Act related to Associates Companies and Joint Ventures)
sR. no. name of assocIate companIes
JetpUR somnath tollways pRIvate lImIted
1 Latest audited Balance Sheet Date March 31, 2016
2 Shares of associate held by the Company at March 31, 2016
Number of Equity Shares 42,637,400
Number of Preference Shares 40,300,000
Amount of investment in associate companies (I in crore) 89.50
Extend of Holding (%) 26.00%
3 Description of how there is significant influence Note 1
4 Reason why the associate is not consolidated NA
5 Net worth attributable to Shareholding as per latest audited Balance Sheet (I in crore) 73.45
6 Profit / (Loss) for the year ended March 31, 2016 (I in crore) (0.53)
i. Considered in Consolidation (0.14)
ii. Not Considered in Consolidation (0.39)
note 1: The Company has significant influence through holding more than 20% of the equity shares in the investee company in terms of Accounting Standard 23, issued by ICAI.
I D F C P R O J E C T S L I M I T E D | 3 3 5
as on the fInancIal yeaR ended on maRch 31, 2016[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 U45203MH2007PLC176640
ii) Registration Date 11/12/2007
iii) Name of the Company IDFC PROJECTS LIMITED
iv) Category / Sub-Category of the Company Company Limited by sharesIndian Non-Government Company
v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354
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. The Company is in process of changing Registrar & Transfer Agent (RTA).
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. Design, develop, engineer, finance, construct, operate and maintain infrastructure projects
III. paRtIcUlaRs of holdIng company, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1. IDFC Limited L65191TN1997PLC037415 Holding 100% Section 2(46)
2. IDFC Finance Limited U45201MH2000PLC271333 Subsidiary 100% Section 2(46)
1. Jetpur Somnath Tollways Pvt. Ltd. U74120MH2011PTC212162 Associate 26% 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
demat physIcal total % of total
shaRes
promoter
(1) Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL
Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL
Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL
State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL
Bodies Corp. 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% NIL
Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (a) (1):- 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% nIl
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
336 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs
no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR
% change dURIng
the yeaR
demat physIcal total % of total
shaRes
demat physIcal total % of total
shaRes
(2) Foreign NIL NIL NIL NIL NIL NIL NIL NIL NIL
a) NRIs - Individuals
b) Other - Individuals
c) Bodies Corp.
d) Banks /
e) Any Other
Sub-total (a) (2):-
total shareholding of promoter (a) = (a)(1)+(a)(2)
34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% nIl
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) 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% nIl
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C P R O J E C T S L I M I T E D | 3 3 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 % change In shaRe holdIng
dURIng the yeaR
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
1. IDFC Limited 34,050,000 100% NIL 34,050,000 100% NIL NIL
total 34,050,000 100% nIl 34,050,000 100% nIl nIl
(iii) Change in promoters’ Shareholding ( please specify, if there is no change): NO CHANGE
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: IN `
secURed loans eXclUdIng deposIts
UnsecURed loans
deposIts total IndeBtedness
Indebtedness at the beginning of the financial year NIL NIL
i) Principal Amount 976,574,260 976,574,260
ii) Interest due but not paid NIL
iii) Interest accrued but not due NIL
total (i+ii+iii) NIL 976,574,260 NIL 976,574,260
Change in Indebtedness during the financial year NIL
• Addition 668,400,000 668,400,000
• Reduction NIL NIL
Net Change 668,400,000 668,400,000
Indebtedness at the end of the financial year NIL NIL
i) Principal Amount 1,644,974,260 1,644,974,260
ii) Interest due but not paid NIL NIL
iii) Interest accrued but not due NIL NIL
total (i+ii+iii) NIL 1,644,974,260 NIL 1,644,974,260
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL
B. Remuneration to other Directors: NIL
C. Remuneration to key managerial personnel other than mD/manager/WtD: NIL
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
338 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc pRoJects lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC PROJECTS LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its loss and its cash flows for the year ended on that date.
emphasis of matter
We draw attention to the Note 23 to the financial statements which indicates that the Company has accumulated losses and its net worth has been fully eroded, the company has incurred a net loss during the current year and previous year and the Company’s current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in Note 23, indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.
Our opinion is not modified in respect of this matter.
Report on other legal and Regulatory Requirements
1. 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.
I D F C P R O J E C T S L I M I T E D | 3 3 9
INDEPENDENT AUDITOR’S REPORT
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 prescribed under section 133 of the Act, as applicable.
e) The going concern matter described in the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/ “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
for deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W) pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 25, 2016
340 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (g) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
We have audited the internal financial controls over financial reporting of IDFC Projects Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the Guidance Note issued by the Institute of Chartered Accountants of India.
for deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 25, 2016
I D F C P R O J E C T S L I M I T E D | 3 4 1
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable.
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities. According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees State Insurance, Sales Tax, Customs Duty and Excise Duty.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) There are no dues of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues which have not been deposited as on March 31, 2016 on account of disputes.
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) The Company has not paid any managerial remuneration during the year and hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) During the current year, the Company’s financial assets constituted more than 50 per cent of the total assets and income from financial assets constituted more than 50 per cent of the gross income for the year. Consequently, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 regarding registration as an NBFC will be applicable. As explained to us, the Company has not applied to the Reserve Bank of India and has not obtained the registration under section 45-IA of the Reserve Bank of India Act, 1934, as the increase in the income from financial assets has been on account of temporary deployment of surplus funds during the year in Schemes of Mutual Funds.
for deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner) (Membership No. 105035)
Mumbai, April 25, 2016
342 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC projects limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
NOTES AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 340,500,000 340,500,000
(b) Reserves and surplus 4 (889,225,299) (530,690,859)
(548,725,299) (190,190,859)
Current liabilities
(a) Trade payables 5
Total Outstanding dues of micro enterprises and small enterprises
- -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
696,145 167,699
(b) Other current liabilities 6 1,645,026,960 976,594,260
1,645,723,105 976,761,959
TOTAL 1,096,997,806 786,571,100
assets
non current assets
(a) Fixed assets
Tangible assets 7 - 24,987
(b) Non-current investments 8 1,075,737,353 735,774,000
(c) Long-term loans and advances 9 4,177,997 50,479,142
1,079,915,350 786,278,129
Current assets
(a) Current investments 10 13,565,445 -
(b) Cash and cash equivalents 11 3,506,404 292,971
(c) Short-term loans and advances 12 - -
(d) Other current assets 13 10,607 -
17,082,456 292,971
TOTAL 1,096,997,806 786,571,100
See accompanying notes forming part of the financial statements.
I D F C P R O J E C T S L I M I T E D | 3 4 3
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC projects limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
NOTES FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
I Income
Income from operations 14 57,343,545 -
TOTAL INCOME (I) 57,343,545 -
II eXpenses
Employee benefits expense 15 - 218,512
Finance costs 16 469,746 -
Provision and contingencies 17 403,064,978 (630,173)
Other expenses 18 718,274 1,335,850
Depreciation 7 24,987 148,991
TOTAL ExPENSES (II) 404,277,985 1,073,180
III loss foR the yeaR BefoRe taX (I-II) (346,934,440) (1,073,180)
Iv taX eXpense
Current tax 11,600,000 -
v loss afteR taX (III-Iv) (358,534,440) (1,073,180)
earnings per equity share (nominal value of share ` 10 each) 22
Basic (`) (10.53) (0.03)
Diluted (`) (10.53) (0.03)
344 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors ofIDFC projects limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
NOTES FOR THE YEAR ENDED
MARCH 31, 2016 FOR THE YEAR ENDED
MARCH 31, 2015
` `
a. cash flow fRom opeRatIng actIvItIes
Loss before tax (346,934,440) (1,073,180)
adjustments for :
Depreciation and amortisation 7 24,987 148,991
Provision and Contingencies 403,064,978 (258,976)
operating loss before working capital changes 56,155,525 (1,183,165)
Changes in working capital:
adjustments for (increase)/decrease in operating assets
Short- term loans and advances (77,978) 46,000
Current investments (13,565,445) -
Other non-current assets (10,607) -
adjustments for increase/(decrease) in operating liabilities
Trade payables 528,446 (12,286)
Other current liabilities 32,700 16,634
Cash used in operations 43,062,641 (1,132,817)
Income tax paid (net of refund) (12,098,855) (102,209)
NET CASH FROM / (USED IN) OPERATING ACTIVITIES (A) 30,963,786 (1,235,026)
B. cash flow fRom InvestIng actIvItIes
Subscription to preference shares in an associate company (112,470,000) (309,400,000)
Purchase of equity share in a subsidiary company (227,500,000) -
Subscription to equity shares in a company (356,180,353) -
Advance against investments - (46,800,000)
NET CASH USED IN INVESTING ACTIVITIES (B) (696,150,353) (356,200,000)
c. cash flow fRom fInancIng actIvItIes
Advance taken from the holding company 668,400,000 357,550,000
NET CASH FROM FINANCING ACTIVITIES (C) 668,400,000 357,550,000
net increase in cash and cash equivalents (a+B+C) 3,213,433 114,974
Cash and cash equivalents as at the beginning of the year (As per AS 3- Cash Flow Statement)
11 292,971 177,997
Cash and cash equivalents as at the end of the year (As per AS 3- Cash Flow Statement)
11 3,506,404 292,971
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C P R O J E C T S L I M I T E D | 3 4 5
01 BacKgRoUnd IDFC Projects Limited ('the Company') is a company, incorporated in India under the Companies Act 1956. The Company is promoted by IDFC Limited. The Company is in the business of conceiving, developing, owning, managing, executing and operating infrastructure projects, in India. The Company has purchased 100% stake in IDFC Finance Limited from IDFC Limited, the holding company. IDFC Finance Limited has filed application with High Court on January 18, 2016 to obtain its sanction to a scheme of amalgamation for carrying out an amalgamation of IDFC Finance Limited with the company.
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF pRepaRatIon
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
B. USe oF eStImateS
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.
c. InVeStmentS
Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
d. tangIBle FIxeD aSSetS
Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Subsequent expenditure on fixed assets after its purchase / completion is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.
e. DepReCIatIon on tangIBle FIxeD aSSetS
Depreciation on tangible fixed assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the Companies Act, 2013. Certain electronic items are depreciated over a period of two years on a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.
f. ImpaIRment oF tangIBle.
The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount.
g. ReVenUe ReCognItIon
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised.
Interest and other dues are accounted on accrual basis.
Fees are recognised when reasonable right of recovery is established, the revenue can be reliably measured and there is no uncertainty regarding recoverability.
Dividend income on investments is recognised when the unconditional right to receive payment is established.
h. pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are not recognised in financial statements.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
346 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
I. employee BeneFItS
Defined contribution plan
¡ The Company’s contribution to provident fund is deposited with the prescribed authorities and is charged to the Statement of
Profit and Loss.
¡ The Company participates in the holding company’s superannuation policy and the Company’s contribution paid / payable during
the year is charged to the Statement of Profit and Loss.
Defined benefit plan
The net present value of the Company’s obligation towards gratuity to employees is unfunded and actuarially determined as at the reporting 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
Based on the leave policy 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. taxeS on InCome
Income tax expense comprises current tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company's income is based on Accounting Standard 22 on "Accounting for Taxes on Income" as specified under section 133 of Companies Act, 2013.The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
K. FoReIgn CURRenCy tRanSaCtIonS
Foreign currency transactions are accounted at the exchange rates prevailing on the dates of the transactions. Foreign currency monetary items outstanding as at the reporting date are reported using the closing rate. Gains and losses resulting from the settlement of such transactions and translation of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Profit and Loss.
l. tReatment oF exChange DIFFeRenCeS
Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.
m. CaSh anD CaSh eqUIValentS
Cash and cash equivalents for the purpose of the Cash Flow Statement comprises cash on hand, cash in bank, fixed deposits and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.
n. CaSh FloW Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
o. eaRnIngS peR ShaRe
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C P R O J E C T S L I M I T E D | 3 4 7
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.
p. SeRVICe tax InpUt CReDIt
Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credit.
q. opeRatIng CyCle
Operating cycle is the normal time between acquisition of assets and their realisation in cash or cash equivalents. Since normal operating cycle cannot be identified at this stage, it is assumed to have a duration of twelve months for the purpose of classification of its assets and liabilities as current and non-current.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER ` NUMBER `
aUthoRIsed shaRes
Equity shares of ` 10 each 100,000,000 1,000,000,000 100,000,000 1,000,000,000
IssUed, sUBscRIBed & fUlly paId-Up shaRes
Equity shares of ` 10 each 34,050,000 340,500,000 34,050,000 340,500,000
[All of these shares are held by IDFC Limited, the holding company and its nominees]
TOTAL 340,500,000 340,500,000
(a) Reconciliation of the number of shares outstanding at the beginning and at the end of the year.
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
Equity shares
Outstanding at the beginning of the year 34,050,000 340,500,000 34,050,000 340,500,000
Issued during the year - - - -
OUTSTANDING AT THE END OF THE YEAR 34,050,000 340,500,000 34,050,000 340,500,000
(b) terms / rights attached to equity shares
¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled
to one vote per share.
¡ 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
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Limited and its nominees 34,050,000 100 34,050,000 100
04 ReseRves & sURplUs
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Deficit in the Statement of Profit and Loss
Opening balance (530,690,859) (529,617,679)
Loss for the year (358,534,440) (1,073,180)
Closing balance (889,225,299) (530,690,859)
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
348 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
05 tRade payaBles
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Total Outstanding dues of micro enterprises and small enterprises - -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
Payable to vendors 200 -
Provision for expenses 695,945 167,699
TOTAL 696,145 167,699
(a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006.
(b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
(c) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
(d) No amount of interest has accrued and remained unpaid at the end of the year under the Micro, Small and Medium Enterprises Development Act, 2006.
(e) The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.
06 otheR cURRent lIaBIlItIes
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
Statutory dues (Comprises of tax deducted at source liability) 52,700 20,000
Amount payable to a related party 1,644,974,260 976,574,260
TOTAL 1,645,026,960 976,594,260
07 (a) tangIBle assets
gRoSS BloCk aCCUmUlateD DepReCIatIon net BloCk
BalanCe aS at
apRIl 1, 2015
aDDItIonS DISpoSalS BalanCe aS at
maRCh 31, 2016
BalanCe aS at
apRIl 1, 2015
DepReCIatIon ChaRge FoR
the yeaR
aDDItIonal Dep (WRIte
BaCk)(See note
2(e))
on DISpoSalS
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2016
BalanCe aS at
maRCh 31, 2015
` ` ` ` ` ` ` ` ` ` `
Office equipment 179,020 - - 179,020 178,122 899 - - 179,020 - 898
(Previous year) (179,020) - - (179,020) (102,668) (12,568) (62,886) - (178,122) (898)
Computers 302,259 - - 302,259 278,170 24,088 - - 302,259 - 24,089
(Previous year) (302,259) - - (302,259) (204,633) (52,847) (20,690) - (278,170) (24,089)
TOTAL 481,279 - - 481,279 456,292 24,987 - - 481,279 - 24,987
(Previous year) (481,279) - - (481,279) (307,301) (65,415) (83,576) - (456,292) (24,987)
08 non cURRent Investments (at cost)
FACE VALUE
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
` qUantIty ` qUantIty `
trade investments
Investments in equity shares (fully paid)
Subsidiaries (unquoted)
IDFC Finance Limited 10 21,000,200 227,500,000 - -
associate (unquoted)
Jetpur Somnath Tollways Private Limited 10 42,637,400 426,374,000 42,637,400 426,374,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C P R O J E C T S L I M I T E D | 3 4 9
FACE VALUE
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
` qUantIty ` qUantIty `
non-trade investments
Investment in equity shares (unquoted) (fully paid)
Novopay Solutions Private Limited 10 227,145 356,180,353 - -
Investment in preference shares (unquoted)(fully paid)
Associate
0.0001% Jetpur Somnath Tollways Private Limited (Compulsorily Convertible ) (see note (b) below)
10 40,300,000 403,000,000 30,940,000 309,400,000
0.0002% Jetpur Somnath Tollways Private Limited (Compulsorily Convertible ) (see note (b) below)
10 6,567,000 65,670,000 - -
Total non current investments 1,478,724,353 735,774,000
Less: Provision for Dimunition in the value of Investments
402,987,000 -
TOTAL 1,075,737,353 735,774,000
(a) Investment includes ` 895,044,000 (previous year ` 735,774,000) in respect of shares which are subject to restrictive covenants.
(b) Investment includes ` 38,585,274 (previous year ` 346,072,740) in respect of shares pledged with security trustee.
(c ) Compulsorily convertible preference shares shall convert into 1 equity share before the expiry of 20 years from the date of issue.
09 long-teRm loans and advances (UnsecURed, consIdeRed good)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Advance tax [net of provision for tax of ` 11,600,000 (Previous Year ` Nil)] 4,177,997 3,679,142
Advance against investments - 46,800,000
TOTAL 4,177,997 50,479,142
10 cURRent Investments (loweR of cost and faIR valUe / maRKet valUe)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
non-trade investments
Investment in mutual funds 13,565,445 -
IDFC Cash Fund - Direct Growth
TOTAL 13,565,445 -
(a) Aggregate amount of investments in unquoted mutual funds
Cost 13,565,445
Market value 13,910,391
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
11 cash and cash eqUIvalents
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Balance with bank:
In current account 6,404 292,971
In deposit account (See note 21) 3,500,000 -
TOTAL 3,506,404 292,971
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
350 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
12 shoRt-teRm loans and advances (UnsecURed)
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Considered doubtful:
Balances with government authorities - Cenvat credit available 6,839,497 6,761,519
Less: Provision for doubtful receivables (6,839,497) (6,761,519)
TOTAL - -
13 otheR cURRent assets
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Interest accrued on fixed deposits 10,607 -
TOTAL 10,607 -
14 Income fRom opeRatIons
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Profit on sale of Investments 56,349,949 -
Interest on deposits 993,596 -
TOTAL 57,343,545 -
15 employee BenefIts eXpense
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Salaries and bonus - 214,379
Gratuity Expenses - (4,574)
Contribution to provident and other funds - 7,260
Staff welfare expenses - 1,447
TOTAL - 218,514
16 fInance costs
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Interest on delayed payment of advance tax 469,746 -
TOTAL 469,746 -
17 pRovIsIon and contIngencIes
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Provision for Doubtful Loans & Debtors 77,978 (630,173)
Provision for Dimunition in the value of Investment 402,987,000 -
403,064,978 (630,173)
18 otheR eXpenses
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
Rates and taxes 3,940 2,500
Insurance charges - 1,320
Travelling and conveyance - 1,010
Bad debts written off - 744,038
Professional fees 239,750 89,187
Demat Charges 49,584 72,795
Auditors' remuneration (see note (a) below) 425,000 425,000
TOTAL 718,274 1,335,850
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C P R O J E C T S L I M I T E D | 3 5 1
(a) Breakup of auditor's remuneration:
Audit fees 200,000 200,000
Other services 225,000 225,000
Service tax 61,625 52,530
Less: Service tax set off claimed (61,625) (52,530)
TOTAL 425,000 425,000
19 contIngent lIaBIlItIes and commItments not pRovIded In Respect of:
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
(i) Contingent liabilities
(a) Guarantees 107,016,000 107,016,000
(b) Sponsor's undertaking for Jetpur Somnath Tollways Private Limited 250,770,000 250,770,000
(ii) Commitments
Uncalled liability on shares and other investments 707,500,000 85,826,000
TOTAL 1,065,286,000 443,612,000
(a) There are no litigations claims made by the Company or pending on the Company
(b) Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
20 segment RepoRtIng
The primary mandate of the Company is to conceive, develop, execute and manage infrastructure projects in India. All other activities revolve around the main business. The Company does not have any geographical segments. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ as specified u/s 133 of Companies Act, 2013.
21 Related paRty dIsclosURes
In accordance with Accounting Standard 18 on 'Related Party Disclosures' as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
I. holding Company
IDFC Limited
II. Subsidiary
IDFC Finance Limited
III. Fellow Subsidiary
IDFC Bank Limited
III. associate
Jetpur Somnath Tollways Private Limited
The nature and volume of transactions carried out with the above related parties in the ordinary course of business are as follows:
name of related party and nature of relationship
paRtICUlaRS natURe oF tRanSaCtIonS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
holding Company
IDFC Limited Advance taken 8,905,500,000 357,550,000
Advance paid 8,237,100,000 -
Amount payable 1,644,974,260 976,574,260
Purchase of IDFC Finance Limited 227,500,000
Purchase of Novopay Solutions Private Limited 356,180,353
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
352 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
paRtICUlaRS natURe oF tRanSaCtIonS FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
associate
Jetpur Somnath Tollways Private Limited
Subscription towards preference share capital 112,470,000 309,400,000
Advance against investments - 46,800,000
Fellow Subsidiary
IDFC Bank Limited Balance in Current Accounts (178,796) -
Interest accrued on Fixed Deposits (Net of TDS) 10,607 -
Interest earned on Fixed Deposits 413,203 -
Balance in Deposits Accounts 3,500,000 -
22 eaRnIngs peR shaReIn accordance with Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of Companies Act, 2013, the earnings per share has been calculated as under:
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
(`) (`)
(a) Net loss after tax (358,534,440) (1,073,180)
(b) Weighted average number of equity shares (Nos.) 34,050,000 34,050,000
(c) Basic and diluted earnings per share (a)/(b) (10.53) (0.03)
(d) Nominal value per share 10 10
23 The accumulated losses of the Company are substantially in excess of its net worth. However, the accounts of the Company have been prepared on a going concern basis. The Company continues to be a going concern in view of the commitment and financial support from its Holding Company, IDFC Limited, regarding the amounts due to it and other liabilities as and when they fall due for payment.
24 Disclosure as required under section 186 (4) of Companies Act, 2013:
a) Investments made during the year:
PARTICULARS FACE VALUE QUANTITY AMOUNT(`)
IDFC Finance Limited 10 21,000,200 227,500,000
Novopay Solutions Private Limited 10 227,145 356,180,353
Jetpur Somnalh Tollways Private Limited- Preference Shares 10 15,927,000 159,270,000
b) Outstanding Investments as at year end:
PARTICULARS FACE VALUE QUANTITY AMOUNT(`)
IDFC Finance Limited 10 21,000,200 227,500,000
Novopay Solutions Private Limited 10 227,145 356,180,353
Jetpur Somnalh Tollways Private Limited- Equity shares 10 42,637,400 426,374,000
Jatpur Somnath Tollways Private Limited- Preference Shares 10 46,867,000 468,670,000
25 Previous year’s figures Previous 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 ofIDFC projects limited
Mumbai | April 25, 2016Sunil kakarDirector
Rajeev Uberoi Director
Idfc fInance lImIted
U45201MH2000PLC271333
Mr. Sunil Kakar (Chairperson)
Dr. Rajeev Uberoi
Mr. Mahendra N. Shah
Deloitte Haskins & Sells
Chartered Accountants
IDFC Bank Limited
Naman Chambers
C-32, G-Block, Bandra-Kurla
Complex, Bandra (East)
Mumbai 400 051
tel +91 22 4222 2000
Fax + 91 22 2654 0354
Website www.idfc.com
email ID [email protected]
CIN
DIRECTORS
AUDITORS
PRINCIPAL
BANKER
REGISTERED
OFFICE
354 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BOARD’S REPORT
to the memBeRs
Your Directors have pleasure in presenting the Sixteenth Annual Report together with the audited financial statements for the year ended March 31, 2016.
fInancIal hIghlIghts
(amoUnt In `)
paRtIcUlaRs foR the yeaR ended maRch 31, 2016
foR the yeaR ended maRch 31, 2015
Total Income 42,968,620 19,554,114
Less: Total Expenses 585,740 361,967
Profit before Tax 42,382,880 19,192,147
Less: Provision for Tax 14,207,000 4,537,000
Profit after Tax 28,175,880 14,655,147
amoUnt to Be caRRIed foRwaRd to ReseRves
The details of amount transferred to reserves are given in note no. 4 of the Notes forming part of the financial statements.
dIvIdend
During the year, your Company has declared and paid an interim dividend of ` 123,901,180. No final dividend has been recommended for the FY16.
shaReholdeRs’ Update
Your Company i.e. IDFC Finance Limited (“IFl”), which was a Non – deposit taking Non-Banking Financial Company, surrendered the certificate of registration to the RBI during FY16. Post surrender of the registration, the entire share capital of IFL was transferred by IDFC Limited to IDFC Projects Limited (“Ipl”). Thereby making IFL wholly owned subsidiary of IPL.
Thereafter, an application has been filed with the Hon’ble High Court of Bombay for amalgamation of IFL with IPL. The said application was admitted by Hon’ble High Court of Bombay on April 22, 2016. The entire process of amalgamation is expected to be completed within 4 -5 months time.
paRtIcUlaRs of employees
The Company does not have any employee.
pUBlIc deposIts
The Company has neither invited nor accepted any Public Deposits.
paRtIcUlaRs of loans, gUaRantees and Investments
There were no loans or guarantee or investments made by the Company under the provisions of Section 186 of the Companies Act, 2013.
foReIgn eXchange eaRnIngs and eXpendItURe
There was no earnings or expenditure in foreign currency during the year ended under review.
paRtIcUlaRs RegaRdIng conseRvatIon of eneRgy and technology aBsoRptIon
Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.
dIRectoRs
During the year Mr. Mahendra N. Shah was appointed as an additional Director w.e.f. July 24, 2015 and Mr. Sadashiv S. Rao resigned w.e.f. July 24, 2015. At the 15th Annual General Meeting of the Company held on September 30, 2015, Mr. Mahendra N. Shah was appointed as a Director.
In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Sunil Kakar would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.
The Board of Directors recommends re-appointment Mr. Sunil Kakar at the ensuing AGM.
I D F C F i n a n c e L i m i t e d | 3 5 5
BOARD’S REPORT
meetIngs of the BoaRd
During the year, the Board met five (5) times on April 23, 2015, July 24, 2015, October 21, 2015, January 05, 2016 and January 25, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY16 is given in the table below.
name of the dIRectoR dIn no. posItIon no. of meetIngs held In fy16
no. of meetIngs attended In fy16
Mr. Sunil Kakar 03055561 Chairperson and Non-Executive Director 5 5
Dr. Rajeev Uberoi 01731829 Non-Executive Director 5 5
Mr. Mahendra N Shah1 00124629 Non-Executive Director 4 4
Mr. Sadashiv S Rao2 01245772 Non-Executive Director 2 1
1 Appointed as a member w.e.f. July 24, 20152 Resigned as a member w.e.f. July 24, 2015
aUdIt commIttee
During the year, the Audit Committee met four (4) times on April 23, 2015, July 24, 2015, October 21, 2015 and January 25, 2016. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013. The composition of the Audit Committee is in compliance with the Companies Act, 2013. The attendance of the Audit Committee Meetings held during FY16 is given in the table below.
name of the memBeR posItIon statUs no. of meetIngs held
no. of meetIngs attended
Mr. Sunil Kakar Non-Executive Director Chairperson 4 4
Dr. Rajeev Uberoi Non-Executive Director Member 4 4
Mr. Mahendra N Shah1 Non-Executive Director Member 2 2
Mr. Sadashiv S Rao2 Non-Executive Director Member 2 1
1 Appointed w.e.f. October 28, 20152 Resigned w.e.f. October 28, 2015
aUdItoRs
The Shareholders of the Company at the AGM held on September 30, 2015 had approved the appointment of Deloitte Haskins & Sells, Chartered Accountants, (Registration No. 117365W) as Statutory Auditors for a period of 1 year to hold office from the conclusion of the Fifteenth Annual General Meeting for FY15 up to the conclusion of the Sixteenth Annual General Meeting of the Company for FY16.
M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad (Registration No.117365W) Statutory Auditors of the Company will retire at the conclusion of the ensuing AGM.
The Board recommends the reappointment of Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad, as the Statutory Auditors of the Company.
RIsK management
The Board members ensures control of risk factors and advice on the same to the Management of the Company.
Instances of fRaUd, If any RepoRted By the aUdItoRs
There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.
sIgnIfIcant and mateRIal oRdeRs passed By the RegUlatoRs/coURts/tRIBUnal
On April 22, 2016, Hon’ble Bombay High Court passed order to dispense with holding Shareholders Meeting for considering the Scheme of Amalgamation and filing of separate company scheme petition by IDFC Projects Limited, the Transferee Company. There are no other 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 / commItments
As per Section 134(3)(I) of the Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period March 31, 2016 till the date of this report.
aUdItoR’s RepoRt
There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.
356 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
dIRectoRs’ ResponsIBIlIty statement
The Directors confirm that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 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 accounts 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 RetURn
The details forming part of the extract of the Annual Return in form MGT-9 are annexed herewith as annexure I.
Related paRty tRansactIon
In 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, the Board approved the “Policy on Related Party Transactions” at the meeting held on January 22, 2015 which was also recommended by the Audit Committee.
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.
acKnowledgements
The Directors express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
sunil KakarChairperson
BOARD’S REPORT
I D F C F i n a n c e L i m i t e d | 3 5 7
as on the fInancIal yeaR ended on maRch 31, 2016[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 U45201MH2000PLC271333
ii) Registration Date 18/04/2000
iii) Name of the Company IDFC FINANCE LIMITED
iv) Category / Sub-Category of the Company Company Limited by shares
Indian Non-Government Company
v) Address of the Registered office and contact details C-32, G Block, Naman Chambers Bandra Kurla Complex, Bandra East. Mumbai- 400051.
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
Karvy Computershare Private LimitedKarvy Selenium Tower B, Plot No.31 & 32, Gachibowli, Financial District, Nanakramguda, Hyderabad– 500 032 Tel.: +91 40 6716 1500, Fax: + 91 40 2342 0814
II. pRIncIpal BUsIness actIvItIes of the company
All the business activities contributing 10% or more of the total turnover of the company shall be stated:-
sR. no.
name and descRIptIon of maIn pRodUcts / seRvIces
nIc code of the pRodUct / seRvIce % to total tURnoveR of the company
1. Non Banking Finance Company (till November 04, 2015) 649
III. paRtIcUlaRs of holdIng, sUBsIdIaRy and assocIate companIes
sR. no.
name and addRess of the company cIn/gln holdIng/ sUBsIdIaRy/assocIate
% of shaRes held
applIcaBle sectIon
1 IDFC Limited L65191TN1997PLC037415
Ultimate Holding
Indirectly 100%
Section 2(46)
2 IDFC Projects Limited U45203MH2007PLC176640 Holding 100% Section 2(46)
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
yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total
shaRes
promoter
(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. 21,000,200 NIL 21,000,200 100% 21,000,200 NIL 21,000,200 100% NIL
e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL
f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL
Sub-total (a) (1):- 21,000,200 nIl 21,000,200 100% 21,000,200 nIl 21,000,200 100% nIl
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
358 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
categoRy of shaReholdeRs
no. of shaRes held at the BegInnIng of the yeaR
no. of shaRes held at the end of the yeaR
% change dURIng the
yeaRdemat physIcal total % of
total shaRes
demat physIcal total % of total
shaRes
(2) Foreign nIl nIl nIl nIl nIl nIl nIl nIl nIl
a) NRIs - Individuals
b) Other - Individuals
c) Bodies Corp.
d) Banks /
e) Any Other
Sub-total (a) (2):- nIl nIl nIl nIl nIl nIl nIl nIl nIl
total shareholding of promoter (a) = (a)(1)+(a)(2)
21,000,200 nIl 21,000,200 100% 21,000,200 nIl 21,000,200 100% nIl
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) 21,000,200 nIl 21,000,200 100% 21,000,200 nIl 21,000,200 100% nIl
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
I D F C F i n a n c e L i m i t e d | 3 5 9
(ii) Shareholding of promoters
sR. no.
shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR shaRe holdIng at the end of the yeaR % change In shaRe holdIng
dURIng the yeaR
no. of shaRes % of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total
shaRes
no. of shaRes
% of total shaRes of the
company
%of shaRes pledged/
encUmBeRed to total shaRes
1. IDFC Limited 21,000,200 100% NIL NIL 0% NIL (100%)
2. IDFC Projects Limited NIL 0% NIL 21,000,200 100% NIL 100%
total 21,000,200 100% nIl 21,000,200 100% nIl nIl
(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
21,000,200 100% 21,000,200 100%
2 Date wise Increase/ Decrease in Promoters Share holding during the year specifying the reasons for increase/decrease (e.g. allotment/transfer/bonus/ sweat equity etc.):
21,000,200 shares transferred from
IDFC Limited and its nominees to IDFC
Projects Limited and its nominees in September
2015
100% 21,000,200 shares transferred from
IDFC Limited and its nominees to IDFC
Projects Limited and its nominees in September
2015
100%
3 At the end of the year 21,000,200 100% 21,000,200 100%
(iv) Shareholding pattern of top ten Shareholders (other than Directors, promoters and holders of gDRs and aDRs):
NOT APPLICABLE
(v) Shareholding of Directors and key managerial personnel: NIL
v. IndeBtedness
Indebtedness of the Company including interest outstanding/accrued but not due for payment: NIL
vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel:
a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL
B. Remuneration to other Directors: NIL
C. Remuneration to key managerial personnel other than mD/manager/WtD: NIL
vII. penaltIes/pUnIshment/compoUndIng of offences: NIL
anneXURe IFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN
360 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
INDEPENDENT AUDITOR’S REPORT
to the memBeRs of Idfc fInance lImIted
Report on the Financial Statements
We have audited the accompanying financial statements of IDFC FINANCE LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
management’s Responsibility for the Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
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 and the Order under section 143 (11) of the Act.
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
Report on other legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, 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 prescribed under section 133 of the Act, as applicable.
e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
I D F C F i n a n c e L i m i t e d | 3 6 1
INDEPENDENT AUDITOR’S REPORT
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No.16(a))
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.
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”/ “CARO 2016”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
362 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
ANNExURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1 (f) under ‘Report on other legal and Regulatory Requirements’ of our report of even date)
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies act, 2013 (“the act”)
We have audited the internal financial controls over financial reporting of IDFC FINANCE LIMITED (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India and the Standards on auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.
meaning of Internal Financial Controls over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the Guidance Note issued by the Institute of Chartered Accountants of India.
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
I D F C F i n a n c e L i m i t e d | 3 6 3
ANNExURE “B” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 2 under ‘Report on other legal and Regulatory Requirements’ section of our report of even date)
(i) The Company does not have any fixed assets and hence reporting under clause (i) of the CARO 2016 is not applicable.
(ii) The Company does not have any inventory and hence reporting under clause (ii) of the CARO 2016 is not applicable.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
(iv) The Company has not granted any loans, made investments or provided guarantees and securities and hence reporting under clause (iv) of the CARO 2016 is not applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year and hence reporting under clause (v) of the CARO 2016 is not applicable.
(vi) Having regard to the nature of the Company’s business / activities, reporting under clause (vi) of the CARO 2016 is not applicable.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been regular in depositing undisputed statutory dues, including Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
According to the information and explanations given to us, during the year, there were no dues payable in respect of Provident Fund, Employees State Insurance contribution, Sales Tax, Customs Duty and Excise Duty.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2016 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, 2016 on account of disputes are given below:
name of statUte natURe of dUes foRUm wheRe dIspUte Is pendIng
peRIod to whIch the amoUnt Relates
amoUnt Involved
(`)
amoUnt UnpaId
(`)
Income Tax Act, 1961 Income Tax Demand u/s 156 ACIT A.Y. 2012-13 314,140 269,110
Income Tax Act, 1961 Income Tax Demand u/s 156 ACIT A.Y. 2013-14 324,940 324,940
Income Tax Act, 1961 Income Tax intimation u/s 143(1) ACIT A.Y. 2015-16 42,760 42,760
(viii) The Company has not taken any loans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of the CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of the CARO 2016 is not applicable.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) The Company has not paid any managerial remuneration during the year hence reporting under clause (xi) of the CARO 2016 is not applicable.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934
For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)
pallavi a. gorakshakar(Partner)(Membership No. 105035)
Mumbai, April 25, 2016
364 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
BALANCE SHEET AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2016
AS AT MARCH 31, 2015
NOTES ` ` `
eqUIty and lIaBIlItIes
Shareholders’ funds
(a) Share capital 3 210,002,000 210,002,000
(b) Reserves and surplus 4 24,181,782 145,130,452
234,183,782 355,132,452
Current liabilities
(a) Trade payables 5
Total Outstanding dues of micro enterprises and small enterprises
- -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
198,900 184,248
(b) Short term provisions 6 30,918
(c) Other current liabilities 7 30,400 15,000
260,218 199,248
TOTAL 234,444,000 355,331,700
assets
non-current assets
(a) Long-term loans and advances 8 704,013 5,190,892
(b) Non-current investments 9 - 150,000,000
704,013 155,190,892
Current assets
(a) Current investments 10 - 200,037,844
(b) Cash and cash equivalents 11 233,591,092 102,964
(c) Other current assets 12 148,895 -
233,739,987 200,140,808
TOTAL 234,444,000 355,331,700
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC Finance limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
I D F C F i n a n c e L i m i t e d | 3 6 5
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2016
FOR TYHE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
NOTES ` `
I Income
Revenue from operations 13 42,968,620 19,554,114
TOTAL INCOME (I) 42,968,620 19,554,114
II eXpenses
Finance cost 14 70,686 29,129
Other expenses 15 515,054 332,838
TOTAL ExPENSES (II) 585,740 361,967
III pRoFIt BeFoRe tax (I - II) 42,382,880 19,192,147
IV tax expenSe
Current tax 14,207,000 4,537,000
TOTAL TAx ExPENSE 14,207,000 4,537,000
v pRofIt afteR taX (III - Iv) 28,175,880 14,655,147
Earnings per equity share (nominal value of share `10) 19
(a) Basic (`) 1.34 0.70
(b) Diluted (`) 1.34 0.70
See accompanying notes forming part of the financial statements.
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC Finance limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
366 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2016
FOR THE YEAR ENDED MARCH 31, 2015
NOTES ` `
(a) cash flow fRom opeRatIng actIvItIes
profit before tax 42,382,880 19,192,147
Changes in working capital:
adjustment for increase/ (decrease) in operating liabilities
Trade payables 14,652 -
Other current liabilities 15,400 15,000
adjustment for (increase)/decrease in operating assets
Current Investments 200,037,844 (15,413,379)
Other current assets (148,895) -
Direct taxes paid (9,689,203) (3,856,350)
net CaSh FRom / (USeD In) opeRatIng aCtIVItIeS (A) 232,612,678 (62,582)
(B) cash flow fRom InvestIng actIvItIes
Sale of investments 150,000,000 -
net cash fRom InvestIng actIvItIes (B) 150,000,000 -
(c) cash flow fRom fInancIng actIvItIes
Dividend paid (including dividend distribution tax) (149,124,550) -
net cash (Used In) fInancIng actIvItIes (C) (149,124,550) -
net (decrease) / increase in cash and cash equivalents (A+B+C) 233,488,128 (62,582)
Cash and cash equivalents as at the beginning of the year (As per AS 3- Cash Flow Statement)
10 102,964 165,546
Cash and cash equivalents as at the end of the year (As per AS 3- Cash Flow Statement)
10 233,591,092 102,964
In terms of our report attached.
For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)
For and on behalf of the Board of Directors of IDFC Finance limited
pallavi gorakshakarPartner(Membership No. 105035)
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F i n a n c e L i m i t e d | 3 6 7
01 BacKgRoUndIDFC Finance Limited is a wholly owned subsidiary of IDFC Projects Limited, incorporated in India. On July 13, 2015, the Company had written to the Reserve Bank of India (RBI) for voluntary surrender of the Certificate of Registration (COR) issued by the RBI for carrying out non-banking financial activities and for discontinuance of the NBFC business. Subsequently, the RBI vide its letter dated November 4, 2015 has cancelled the COR N.14.02342 dated August 18, 2009. The Company has filed a petition with High Court on January 18, 2016 to obtain its sanction to a scheme of amalgamation for carrying out an amalgamation of the company with IDFC Projects Limited.
02 sIgnIfIcant accoUntIng polIcIes
a. BaSIS oF pRepaRatIon
‘The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
B. USe oF eStImateS
‘The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.
c. InVeStmentS
Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the RBI guidelines and Accounting Standard 13 on ‘Accounting for Investments’ as specified under Section 133 of the Companies Act, 2013. All other investments are classified as long term investments.
All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.
‘Long Term Investments’ are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis.
‘Current investments’ are valued scrip-wise and depreciation/ appreciation is aggregated for each category.
d. ReVenUe ReCognItIon
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised:
Interest Income is accounted on accrual basis.
Dividend is accounted on accrual basis when the right to receive is established.
Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is determined based on the FIFO cost for current investments and weighted average cost for long term investments.
e. taxeS on InCome
Current tax is the amount payable on taxable income for the year as determined in accordance with applicable tax rates and the provisions of Income-tax Act 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified under Section 133 of the Companies Act, 2013. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
368 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability.
f. CaSh anD CaSh eqUIValentS
‘Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
g. CaSh FloW Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
h. eaRnIngS peR ShaRe
‘Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.
I. pRoVISIonS anD ContIngenCIeS
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.
J. opeRatIng CyCle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
03 shaRe capItal
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
NUMBER (`) NUMBER (`)
aUthoRIsed shaRes
Equity shares of `10 each 40,000,000 400,000,000 40,000,000 400,000,000
Total authorised share capital 400,000,000 400,000,000
IssUed shaRes
Equity shares of `10 each 27,000,400 270,004,000 27,000,400 270,004,000
sUBscRIBed & fUlly paId-Up shaRes
Equity shares of `10 each 21,000,200 210,002,000 21,000,200 210,002,000
[All of these shares are held by IDFC Projects Limited, the holding company and its nominees, previous year held by IDFC Limited and its nominees, the holding company]
TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL
210,002,000 210,002,000
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F i n a n c e L i m i t e d | 3 6 9
(a) Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR (`) nUmBeR (`)
Outstanding at the beginning of the year 21,000,200 210,002,000 21,000,200 210,002,000
Issued during the year - - - -
outstanding at the end of the year 21,000,200 210,002,000 21,000,200 210,002,000
(b) terms / rights attached to equity shares
¡ The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is
entitled to one vote per share.
¡ In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining
assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently.
The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) Details of shareholders holding more than 5% of the equity shares in the company
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR % oF holDIng nUmBeR % oF holDIng
IDFC Projects Limited and its nominees 21,000,200 100% - -
IDFC Limited and its nominees - - 21,000,200 100%
04 ReseRves and sURplUs
aS at maRCh 31, 2016 aS at maRCh 31, 2015
(`) (`)
(a) specIal ReseRve U/s. 45-Ic of RBI act,1934
Opening balance 29,045,000 26,105,000
Add: Transferred from/(to) surplus in Statement of Profit and Loss (29,045,000) 2,940,000
Closing balance - 29,045,000
(B) sURplUs In the statement of pRofIt and loss
Opening balance 116,085,452 104,370,305
Profit for the year 28,175,880 14,655,147
Less: Appropriations
Transferred to / (from) Reserves (29,045,000) 2,940,000
Interim Dividend Paid 123,901,180 -
Tax on Interim dividend 25,223,370 -
Closing balance 24,181,782 116,085,452
TOTAL RESERVES AND SURPLUS 24,181,782 145,130,452
05 tRade payaBles
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Total Outstanding dues of micro enterprises and small enterprises - -
Total Outstanding dues of creditors other than micro enterprises and small enterprises
1) Provision for expenses 198,900 184,248
198,900 184,248
(a) No principal and interest due thereon is outstanding and remaining unpaid to any supplier registered under the Micro, Small and Medium Enterprises Development Act, 2006.
(b) No amount is payable as interest in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 to any supplier beyond the appointed day during the year.
(c ) No amount is payable as interest for delay in making payment under the Micro, Small and Medium Enterprises Development Act, 2006.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
370 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
(d) No amount of interest has accrued and remained unpaid at the end of the year under the Micro, Small and Medium Enterprises Development Act, 2006.
(e ) The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.
06 shoRt teRm pRovIsIons
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Provision for tax 30,918 -
[Net of advance tax of ` 96,78,103 (Previous year ` Nil)]
TOTAL 30,918 -
07 otheR cURRent lIaBIlItIes
aS at maRCh 31, 2016 aS at maRCh 31, 2015
(`) (`)
Statutory dues (Comprises of Tax Deducted at Source Liability) 30,400 15,000
TOTAL 30,400 15,000
08 long-teRm loans and advances
aS at maRCh 31, 2016 aS at maRCh 31, 2015
(`) (`)
Advance payment of income tax 704,013 692,912
[Net of provision for tax of ` 16,702,548 (Previous year ` 12,844,235)]
Minimum alternate tax (MAT) credit - 4,497,980
TOTAL 704,013 5,190,892
09 non-cURRent Investments (non tRade) (at cost)
FaCe ValUe
`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
Investment in Equity shares (unquoted) (fully paid)
IDFC Infra Debt Fund Limited 10 - - 15,000,000 150,000,000
total - 150,000,000
10 cURRent Investments (non tRade) (valUed at loweR of cost and maRKet valUe)
FaCe ValUe
`
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
nUmBeR ` nUmBeR `
cURRent matURItIes of long-teRm Investments (at cost)
IDFC Fixed Term Plan Series 21 Direct plan - Growth 10 - - 5,000,000.000 50,000,000
IDFC Fixed Term Plan Series 48 Direct plan - Growth 10 - - 10,000,000.000 100,000,000
- 150,000,000
cURRent Investments
Investment In mUtUal fUnds (UnqUoted)
IDFC Banking Debt Fund- Direct plan- Growth 10 - - 4,474,317.576 49,225,100
ICICI Prudential Institutional Liquid Fund-Super Institutional Plan -Growth
100 - - 6,271.074 812,744
TOTAL - 200,037,844
(a) Aggregate amount of investments in unquoted mutual funds
Cost - 200,037,844
Market value - 226,319,427
Market value of investments in unquoted mutual funds represents the repurchase price of the units issued by the mutual funds.
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
I D F C F i n a n c e L i m i t e d | 3 7 1
11 cash and BanK Balances
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
cash and cash eqUIvalents
Balances with bank:
In current account 591,092 102,964
In deposit account (See note 18) 233,000,000 -
TOTAL (AS PER AS 3-CASH FLOW STATEMENT) 233,591,092 102,964
12 otheR cURRent assets
AS AT MARCH 31, 2016 AS AT MARCH 31, 2015
(`) (`)
Interest accrued on Investments 148,895 -
TOTAL 148,895 -
13 RevenUe fRom opeRatIons
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Interest on bank deposits 11,329,933 -
Profit on sale of non-current investments 23,235,703 5,238,612
Profit on sale of current investments 8,402,984 14,315,502
TOTAL 42,968,620 19,554,114
14 fInance cost
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Bank charges 70,686 225
Interest on delayed payment of advance tax - 28,859
Other finance costs - 45
TOTAL 70,686 29,129
15 otheR eXpenses
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Rates & taxes 2,980 2,500
Legal and professional fees 43,097 10,112
Miscellaneous expenditure 185 -
Auditors' remuneration [see note (a)] 468,792 320,226
TOTAL 515,054 332,838
(a) Break up of auditors’ remuneration:
YEAR ENDEDMARCH 31, 2016
YEAR ENDEDMARCH 31, 2015
(`) (`)
Audit fee 150,000 150,000
Tax audit fee 30,000 30,000
Other services 230,000 105,000
Service tax 58,792 35,226
TOTAL 468,792 320,226
Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016
372 | I D F C A N N U A L R E P O R T 2 0 1 5 – 2 0 1 6
16 contIngent lIaBIlItIes and commItments (to the eXtent not pRovIded foR)
MARCH 31, 2016 MARCH 31, 2015
(`) (`)
(a) Contingent liabilities
(i) Claims not acknowledged as debts in respect of:
Income-tax demands disputed by the Company (net of amounts provided). The matters in dispute are under rectification.
636,810 269,110
(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.
17 ‘The Company is no longer engaged in business of Non banking financial services. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ specified u/s 133 of Companies Act, 2013.
18 As per Accounting Standard 18 on ‘Related Party Disclosures’ as specified u/s 133 of Companies Act, 2013, the related parties of the Company are as follows:
RelatIonshIp:
I. holding Company:
IDFC Projects Limited
II. Ultimate holding Company:
IDFC Limited
III. Fellow Subsidiaries
IDFC Infra Debt Fund Limited
IDFC Bank Limited
IDFC Financial Holding Company Limited
IV. key management personnel:
Mr. Bipin Gemani - Manager
PARTICULARS TRANSACTION MARCH 31, 2016 MARCH 31, 2015
(`) (`)
IDFC Infra Debt fund Limited Subscription of equity shares - 150,000,000
IDFC Bank Limited Interest accrued on Fixed Deposits (Net of TDS)
134,006 -
Interest earned on Fixed Deposits 4,646,501 -
Balance in Current Acocunts 139,980 -
Balance in Deposit Accounts 233,000,000 -
IDFC Financial Holding Company Limited
Transfer of shares in IDFC Infra Debt Fund Limited
150,000,000 -
19 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ specified u/s 133 of Companies Act, 2013.
For the year ended
March 31, 2016
For the year ended
March 31, 2015
(`) (`)
Profit for the year (`) 28,175,880 14,655,147
Weighted average number of equity shares (Nos.) 21,000,200 21,000,200
Basic & Diluted Earnings Per Share (`) 1.34 0.70
Nominal Value Per Share (`) 10 10
20 pRevIoUs yeaR 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 IDFC Finance limited
Sunil kakarDirector
Rajeev Uberoi Director
Mumbai | April 25, 2016
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This annual report is printed on Eco-Friendly Paper
IDFC LIMITEDwww.idfc.com | [email protected]
REGISTERED OFFICE
KRM Tower, 8th floorNo.1 Harrington RoadChetpetChennai 600 031
TEL +91 (44) 4564 4000FAX +91 (44) 4564 4022
CORPORATE OFFICE
Naman Chambers, C-32, G-BlockBandra-Kurla ComplexBandra (East)Mumbai 400 051
TEL +91 (22) 4222 2000FAX +91 (22) 2654 0354
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