IDFC LIMITED · IDFC FInanCIal holDIng Company lImIteD 2 2. IDFC ... email ID info@idfc ... As per the provisions of the Companies Act, 2013, IDs are not liable to retire by rotation

IDFC LIMITED

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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 info@idfc.com

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.

4 | 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

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:


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


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:



Mr. Donald Peck Independent Director Chairperson 1 1

Mr. Vinod Rai Nominee Director Member 1 1

Ms. Marianne Økland Nominee Director Member 1 1


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


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


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%


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%


4 IDFC Capital (Singapore) Pte. Ltd.* 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - 100%


5 IDFC Capital (USA) Inc.* 4.62 1.65 6.66 0.39 - 2.49 0.14 0.05 0.19 - 100%


6 IDFC Investment Advisors Limited - - - - - - - - - - -


7 IDFC Investment Managers (Mauritius) Limited* 2.51 (0.75) 1.82 0.07 - - (0.23) - (0.23) - 75%


8 IDFC Securities Limited 14.14 120.53 170.31 35.64 74.57 73.31 23.37 8.52 14.85 - 100%


9 IDFC Securities Singapore Pte. Ltd* 14.91 (9.81) 5.31 0.20 - 0.73 (2.98) - (2.98) - 100%


10 IDFC Trustee Company Limited 0.05 3.84 3.91 0.03 3.86 0.83 0.81 0.25 0.56 - 100%


11 IDFC Infra Debt Fund Limited 540.00 41.53 1,421.61 840.43 106.50 74.99 37.10 - 37.10 - 81%


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%


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%


2 IDFC AMC Trustee Company Limited 0.05 0.05 0.14 0.04 - 0.12 0.01 ß 0.01 - 75%


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%


4 IDFC Capital (Singapore) Pte. Ltd.* 246.22 (43.57) 203.00 0.35 137.05 7.88 (3.71) - (3.71) - 100%


5 IDFC Capital (USA) Inc.* 4.62 1.65 6.66 0.39 - 2.49 0.14 0.05 0.19 - 100%


6 IDFC Investment Advisors Limited - - - - - - - - - - -


7 IDFC Investment Managers (Mauritius) Limited* 2.51 (0.75) 1.82 0.07 - - (0.23) - (0.23) - 75%


8 IDFC Securities Limited 14.14 120.53 170.31 35.64 74.57 73.31 23.37 8.52 14.85 - 100%


9 IDFC Securities Singapore Pte. Ltd* 14.91 (9.81) 5.31 0.20 - 0.73 (2.98) - (2.98) - 100%


10 IDFC Trustee Company Limited 0.05 3.84 3.91 0.03 3.86 0.83 0.81 0.25 0.56 - 100%


11 IDFC Infra Debt Fund Limited 540.00 41.53 1,421.61 840.43 106.50 74.99 37.10 - 37.10 - 81%


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


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


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.


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


12. IDFC Capital (Singapore) Pte. Limited


anneXURe IIIFORM NO. MGT-9 ExTRACT OF ANNUAL RETURN


Iv. shaRe holdIng patteRn (eqUIty shaRe capItal BReaKUp as peRcentage of total eqUIty)

(i) Category-wise Share holding

categoRy of shaReholdeRs no. of shaRes held as on maRch 31, 2015 no. of shaRes held as on maRch 31, 2016 % change dURIng

the yeaR

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



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



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)


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


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/


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


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%



(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



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.



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


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.


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.





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.





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)


pallavi gorakshakarPartner(Membership No. 105035)

Vinod RaiDirector


Mumbai | April 29, 2016Bipin gemaniChief Financial Officer



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)






Vinod RaiDirector





CASH FLOw STATEMENT FOR THE YEAR ENDED MARCH 31, 2016

NOTES FOR THE YEAR ENDED MARCH 31, 2016

`


`

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 -





Vinod RaiDirector




Notes formiNg part of the fiNaNcial statemeNts as at and for the year ended march 31, 2016


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.



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.


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


nUmBeR % oF holDIng nUmBeR % oF holDIng

IDFC Limited and its nominees 8,785,000,000 100% 50,000 100%



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 - -


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



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 -



11 Income fRom opeRatIons



` `

Interest on deposits 35,487,207 -

TOTAL 35,487,207 -

12 otheR eXpenses



` `

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



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 - -



(b) Details of Investments are set out below:

1 Value of Investments

AS AT MARCH 31, 2016

`


`

(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 - -


- -

(iii) net Value of Investments

(a) In India 87,398,047,941 -


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).



(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.


Vinod RaiDirector




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


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



CIN

DIRECTORS

AUDITORS

PRINCIPAL

BANKER

REGISTERED

OFFICE


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.


(amoUnt In `)

foR the yeaR ended maRch 31, 2016


Total Income 169,751,030 116,638,654


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.



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.


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.


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


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.


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


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:



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:



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”).


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


[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



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) 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


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


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%


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.



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


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



shaRes




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)



g) FIIs


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


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)


C. Shares held by Custodian for gDRs & aDRs


grand total (a+B+C) nIl 13,000,000 13,000,000 100% nIl 13,000,000 13,000,000 100% nIl




shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR shaRe holdIng at the end of the yeaR % change In shaRe holdIng

dURIng the yeaR


company

%of shaRes pledged/



company

%of shaRes pledged/


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. IndeBtedness



a. Remuneration to managing Director, Whole-time Directors and/or manager: NIL

B. Remuneration to other directors:

sR. no.


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


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.




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.





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


(Firm’s Registration No. 117365W)

Kalpesh J mehta

(Partner)

(Membership No. 48791)



BALANCE SHEET

NOTES

(`)

AS ATMARCH 31, 2016

AS ATMARCH 31, 2015



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


For Deloitte haskins & SellsChartered Accountants

For and on behalf of the Board of Directors ofIDFC FoUnDatIon

kalpesh J mehtaPartner

anil BaijalChairman

Sunil kakarDirector



Place : MumbaiDate : June 23, 2016



STATEMENT OF INCOME AND ExPENDITURE

NOTES

(`)

FOR THE YEAR ENDED MARCH 31, 2016


(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





anil BaijalChairman

Sunil kakarDirector






CASH FLOw STATEMENT

Notes

(`)

For the year endedMarch 31, 2016



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


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


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





anil BaijalChairman

Sunil kakarDirector





Notes formiNg part of the fiNaNcial statemeNts


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.


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.:



- 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.



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.



03 shaRe capItal


nUmBeR (`) nUmBeR (`)

aUthoRIsed

Equity shares of ` 10 each with voting rights 20,000,000 200,000,000 20,000,000 200,000,000

IssUed, sUBscRIBed and fUlly paId-Up

Equity shares of ` 10 each with voting rights 13,000,000 130,000,000 13,000,000 130,000,000

(All the above shares are held by IDFC Limited, the Holding Company and its nominees)

TOTAL 13,000,000 130,000,000 13,000,000 130,000,000

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



Outstanding as at the beginning of the year 13,000,000 130,000,000 13,000,000 130,000,000

Issued during the year - - - -

outstanding as at the end of the year 13,000,000 130,000,000 13,000,000 130,000,000


The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity share is entitled to one vote per share and ranks pari passu.

As per clause x of Memorandum of Association (MoA) of the Company, in the event of liquidation of the Company, the holder of equity shares will not be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The amount remaining, if any, shall be given or transferred to such other Company having similar objects, to be determined by the member of the Company at or before the time of dissolution or in default thereof by the High Court of Judicature that has or may acquire jurisdiction in the matter.




IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%

TOTAL 13,000,000 100% 13,000,000 100%

(d) Details of shares held by the holding company:



IDFC Limited and its nominees 13,000,000 100% 13,000,000 100%

TOTAL 13,000,000 100% 13,000,000 100%

04 ReseRves and sURplUs

(`)

AS ATMARCH 31, 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



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


(`)

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



09 fIXed assets

(a) tangible assets (`)

GROSS BLOCK DEPRECIATION NET BLOCK

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15

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

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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)(`)


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



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


(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



15 RevenUe fRom opeRatIons

(`)



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

(`)



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

(`)



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

(`)



Others - Interest on delayed / deferred payment of statutory dues 40,055 96,555

TOTAL 40,055 96,555



19 otheR eXpenses

(`)



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

(`)



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

(`)



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

(`)



Advisory / consultancy 693,450 1,240,620

Reimbursement of expenses - 101,554

TOTAL 693,450 1,342,174



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


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:

(`)



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


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



(`)



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 - -


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



(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



25 Related paRty dIsclosURe(a) Relationship:

holding Company

IDFC Limited

Jointly controlled entities


Delhi Integrated Multi-Modal Transit System Limited


holding’s subsidiary


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


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


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



26 contIngent lIaBIlItIes

(`)



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)

(`)



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.


anil BaijalChairman

Sunil kakarDirector




U67190MH2014PLC253944

Mr. S S Kohli (Chairperson)

Mr. A K T Chari

Ms. Ritu Anand

Mr. Vikram Limaye

Mr. Pavan Kaushal



IDFC Bank Limited

IDBI Trusteeship Services Limited

Asian Building, Ground Floor,

17, R. Kamani Marg, Ballard Estate,

Mumbai 400 001.

Naman Chambers

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 info@idfcidf.com

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


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


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



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.


BOARD'S REPORT


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.


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



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.


There was no income or expenditure in foreign currency during the period under review.


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


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


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.



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.




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.



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.


BOARD'S REPORT


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.



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.


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.


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.


s s KohlIChairperson


BOARD'S 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]

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


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


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


anneXURe ISECRETARIAL AUDIT REPORT





i) CIN U67190MH2014PLC253944


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


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).



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%


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)



categoRy of shaReholdeRs no. of shaRes held at the BegInnIng of the yeaR no. of shaRes held at the end of the yeaR % change dURIng

the yeaRdemat physIcal total % of total shaRes


a. promoters

(1) Indian




d) Bodies Corp. 309,999,994 6 310,000,000 100% 439,999,994 6 440,000,000 81.48% (18.52%)


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%)



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


(2) Foreign nIl nIl nIl nIl nIl nIl nIl nIl nIl



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)


f) Insurance Companies 40,000,000 NIL 40,000,000 7.41% 7.41%

g) FIIs


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



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%



grand total (a+B+C) 309,999,994 6 310,000,000 100% 539,999,994 6 540,000,000 100%


sR. no.

shaReholdeR’s name shaReholdIng at the BegInnIng of the yeaR

shaRe holdIng at the end of the yeaR % change In shaRe holdIng

dURIng the yeaR

no. of shaRes % of total

shaRes of the

company

%of shaRes pledged/

encUmBeRed to total

shaRes

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%)





sR. no.

shaReholdIng at the BegInnIng of the yeaR

cUmUlatIve shaReholdIng dURIng the yeaR


company


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%


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.


sR. no.

foR each of the top 10 shaReholdeRs shaReholdIng at the BegInnIng of the yeaR


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. 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


total (I+II+III) 830,31,70,669 NIL NIL 830,31,70,669



B. Remuneration to other directors: IN `

sR. no.


late s h Khan

s s KohlI aKt chaRI RItU anand vIKRam lImaye

pavan KaUshal


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


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




[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


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


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.


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)


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

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

sR. no



amoUnt oUtlay

(BUdget)

amoUnt spent on the pRoJects oR pRogRams sUB

heads: (1) dIRect eXpendItURe on pRoJects oR pRogRams

(2) oveR heads


Up to the RepoRtIng

peRIod

amoUnt spent : dIRect oR thRoUgh ImplementIng agency



0.83

0.12 0.12

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*



0.06 0.06








0.09 0.09



total 0.83 0.62 0.62



Maharashtra-Mumbai

0.55

0.15 0.15







total 0.55 0.46 0.46



0.52

0.13 0.13


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


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



total 0.52 0.34 0.34


total 1.87 0.61 0.61



total (a) + (B) 3.77 2.21 2.21





[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




to the memBeRs of Idfc InfRa deBt fUnd lImIted


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.










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.



(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.



(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.



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


(Firm’s Registration No. 117366W/W-100018)

pallavi a. gorakshakar

Partner





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.



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.





Partner





(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.


(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.


(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.



(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.



(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.





Partner






AS ATMARCH 31, 2016

AS ATMARCH 31, 2015

NOTES ` `



(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







S S kohliDirector




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


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)



NOTES


`


`


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


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


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)


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)






S S kohliDirector





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.


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.



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



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


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



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


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.




EQUITY SHARES AS AT MARCH 31, 2016 AS AT MARCH 31, 2015


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:



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`


(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

`


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).



(c) Interest and repayment terms of long-term borrowings:


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


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



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)

`


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



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 -





`


`

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


`


`

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


`


`

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


`


`

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


`


`

Contingent provision against standard assets (see note 6) 48,070,351 -

TOTAL 48,070,351 -



21 otheR eXpenses


`


`

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 -


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:


`


`

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:


`


`

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 -




`


`

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 :


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 -


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:


`


`

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:



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.



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.


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 -



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


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


(A) 1,065,000,000 3,112,034,460

(II) PROVISION FOR DEPRECIATION

(a) In India - -


(B) - -

(III) NET VALUE OF INVESTMENTS

(a) In India 1,065,000,000 3,112,034,460


(A-B) 1,065,000,000 3,112,034,460



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):

`


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


- - - - - - - - -


- - - - - - - - -

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 - - - - - - - - -


- - - - - - - - -


- - - - - - - - -

In computing the above information, certain estimates, assumptions and adjustments have been made by the Management which have been relied upon by auditors.



(h) exposures to real estate sector (Based on amounts sanctioned):

This disclosure is not applicable to the Company as there are no exposures, direct or indirect to real estate sector as at March 31, 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:`


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



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



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



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% -



(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):



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


(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.



S S kohliDirector



Idfc alteRnatIves lImIted

U67190MH2002PLC137798

Dr. Jaimini Bhagwati (Chairperson)

Mr. Gautam Kaji

Mr. Bharat Shah


Mr. Sanjiv Kapur

Mr. Vikram Limaye

Mr. Sunil Kakar



IDFC Bank Limited

Naman Chambers



Mumbai 400 051

tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL

BANKER

REGISTERED

OFFICE


BOARD’S REPORT

to the memBeRs

Your Directors have pleasure in presenting the Fourteenth Annual Report together with the audited financial statements for the year ended March 31, 2016.



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


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.



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 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. .


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



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.


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.


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.


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:




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



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


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



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




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.





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.




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.




(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;




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.



Jaimini BhagwatiChairperson


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




(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


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






i) CIn U67190MH2002PLC137798


iii) name of the Company IDFC ALTERNATIVES LIMITED

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

v) address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051. Tel.: +91 22 4222 2000; Fax: +91 22 2654 0354

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




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%


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)



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


pRomoteRs

(1) Indian 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


f) Any Other.. NIL NIL NIL NIL NIL NIL NIL NIL NIL





% change dURIng the

yeaRdemat physIcal total % of

total shaRes


(2) Foreign

a) NRIs - Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL


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



1. Institutions

a) Mutual Funds

b) Banks/FI

c) Central Govt

d) State Govt(s)



g) FIIs


i) Others (specify)


2. non-Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals



c) Others (specify)


total pUBlIC ShaReholDIng (B) = (B)(1) + (B)(2)




gRanD total (a+B+C) 219,250 600 219,850 100% 219,250 600 219,850 100% nIl




sR. no.


shaRe holdIng at the end of the yeaR

% change In shaRe holdIng

dURIng the yeaR

no. of shaRes


company

%of shaRes pledged/

encUmBeRed to total

shaRes

no. of shaRes


company

% 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%


sR. no.

shaReholdIng at the BegInnIng of the yeaR cUmUlatIve shaReholdIng dURIng the yeaR



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.


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%


NOT APPLICABLE


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


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


iii) Interest accrued but not due NIL NIL NIL NIL

total (I+II+III) NIL NIL NIL NIL






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


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


NIL NIL NIL NIL NIL NIL NIL NIL


NIL NIL NIL NIL NIL NIL NIL NIL

Commission 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


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.


ceo company secRetaRy cfo total

1. gross salary


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




[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)


amoUnt oUtlay

(BUdget)

amoUnt spent on the pRoJects oR pRogRams sUB heads:

(1) dIRect eXpendItURe on pRoJects oR pRogRams (2)

oveR heads


Up to the RepoRtIng

peRIod

amoUnt spent : dIRect oR

thRoUgh ImplementIng

agency



14.89

2.15 2.97

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*



1.00 2.44








1.55 1.55



total 14.89 11.01 14.47



Maharashtra-Mumbai

9.96

2.75 4.12







total 9.96 8.24 9.61



9.30

2.33 2.33


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


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


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


total 33.85 11.12 16.35



total (a) + (B) 68.00 39.76 53.18






[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)


amoUnt oUtlay

(BUdget)


(1) dIRect eXpendItURe on pRoJects oR pRogRams (2)

oveR heads


Up to the RepoRtIng

peRIod



agency



14.89

2.15 2.97

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*



1.00 2.44








1.55 1.55



total 14.89 11.01 14.47



Maharashtra-Mumbai

9.96

2.75 4.12







total 9.96 8.24 9.61



9.30

2.33 2.33


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




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


total 33.85 11.12 16.35



total (a) + (B) 68.00 39.76 53.18








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).




(c) be sustainable



(a) livelihoods

(b) rural areas




Mr. Vikram Limaye

Mr. Bharat Shah

Mr. Sunil Kakar


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




to the memBeRs of Idfc alteRnatIves lImIted


We have audited the accompanying financial statements of IDFC alteRnatIVeS lImIteD (“the Company”), which comprise the Balance Sheet as at March 31, 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.








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.


opinion





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



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




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.


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)


Mumbai, 28 April, 2016





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.



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.






(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising the immovable property of building which is freehold, is held in the name of the Company as at the balance sheet date.



(iv) The Company has not granted any loans, made investments or provided guarantees 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.


(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.



(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.



(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.



Mumbai, 28 April, 2016




PARTICULARS

NOTES



` `



(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).


For Deloitte haskins & Sells llpChartered Accountants(Registration no. 117366W/W-100018)


Vikram limaye Sunil kakar

pallavi a. gorakshakarPartner(Membership no. 105035)

Director Director

manish Jindal

Mumbai | April 28, 2016 Chief Financial Officer








Director Director

manish Jindal


PARTICULARS

NOTES



` `

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).



PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2016


` `

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


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)


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)


PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2016


` `

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)







Director Director

manish Jindal




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.


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.



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..


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.



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.



03 shaRe capItal


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


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%




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


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


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


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.



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.




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



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)



11 Investments (unquoted)(cost)


non-CURRent poRtIon

CURRent poRtIon non-CURRent poRtIon

CURRent poRtIon

` ` ` `

Investment In eqUIty shaRes (tRade)

Subsidiary Company

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

55,475,000 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



12 loans and advances (unsecured, considered good unless stated otherwise)


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



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)


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.






` `

Management fees 1,244,127,336 1,161,686,069

TOTAL 1,244,127,336 1,161,686,069

16 otheR Income



` `

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



` `

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



` `

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



19 otheR eXpenses



` `

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


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:



` `

Audit fees 750,000 750,000

Tax audit fees 175,000 175,000


Out of pocket expenses 4,394 6,018


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.



20 eXpendItURe In foReIgn cURRency (on payment basis)


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:


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 -



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


AS ATMARCH 31, 2015

` `

change In the defIned BenefIt oBlIgatIons:



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


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


TOTAL ACTUARIAL LOSS/(GAIN) TO BE RECOGNISED 9,266,876 (347,932)

actUal RetURn on plan assets:


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:



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:


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



experience adjustments:


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) - -


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



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


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



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:


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).



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).



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:


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



29 pRovIsIon and contIngencIes(a) Contingent liabilities and commitments


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.



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


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 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.


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 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.


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.


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


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


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



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


STATEMENT OF CHANGES IN EqUITy YEAR ENDED MARCH 31, 2016


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


STATEMENT OF CASH FLOwS YEAR ENDED MARCH 31, 2016



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.



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.



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.



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.



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.



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


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.



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.



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.


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.



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.



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.



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



IDFC Bank Limited

Naman Chambers



Mumbai 400 051

tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL

BANKER

REGISTERED

OFFICE

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.


(amoUnt In `)

paRtIcUlaRs foR the yeaR ended maRch 31, 2016


Total Income 8,404,474 7,500,000

Less: Total Expenses 328,927 261,094



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.



dIvIdend



The Company does not have any employee.

pUBlIc deposIts





There was no income or expenditure in foreign currency during the year under review.


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.


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





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.





RIsK management

The Board members ensures control of risk factors and advice on the same to the Management of the Company.


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.





aUdItoR’s RepoRt

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their report.


The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as annexure I.




(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


Company for that period;




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.


Sunil kakarChairperson


BOARD'S REPORT


As on the financial year ended on March 31, 2016



i) CIN U65990MH2002PLC137533


iii) Name of the Company IDFC TRUSTEE COMPANY LIMITED



v) Address of the Registered office and contact details Naman Chambers, C-32, G-Block, Bandra Kurla Complex, Bandra East, Mumbai – 400 051.

Tel.: +91 22 4222 2000, Fax: +91 22 2654 0354



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




sR. no.



1. Act as Trustee for various investment funds under the Private Equity business.

6619 100%


sR. no.

name and addRess of the company

cIn/gln holdIng/ sUBsIdIaRy/assocIate % of shaRes held

applIcaBle sectIon

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


U65900TN2014PLC097942 Holding Company 100% Section 2(46)




no. of shaRes held at the end of the yeaR % change dURIng

the yeaRdemat physIcal total % of

total shaRes

demat physIcal total % of total

shaRes

a. promoters

(1) Indian




d) Bodies Corp. 49,400 600 50,000 100% 49,400 600 50,000 100% 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



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




c) Bodies Corp.

d) Banks / FI

e) Any Other


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)



g) FIIs


i) Others (specify)


2. non-Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals



c) Others (specify)


total public Shareholding (B) = (B)(1) + (B)(2)




grand total (a+B+C) 49,400 600 50,000 100% 49,400 600 50,000 100% nIl


sR. no.




dURIng the yeaR

no. of shaRes


company

%of shaRes pledged/

encUmBeRed to total

shaRes

no. of shaRes


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%



(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



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.


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%


NOT APPLICABLE


v. IndeBtedness




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


Commission


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.






to the memBeRs of Idfc tRUstee company lImted


We have audited the accompanying financial statements of IDFC TRUSTEE COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 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.


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.








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.




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.


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.





i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No.20).




For DeloItte haSkInS & SellSChartered Accountants(Firm’s Registration No. 117365W)


Mumbai, 28th April, 2016



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


We have audited the internal financial controls over financial reporting of IDFC TRUSTEE COMPANY LIMITED (“the Company”) as of 31st March, 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.


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.



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.






(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.


(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



(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.


(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.


(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.


(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










Notes ` ` `



(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



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



For Deloitte haskins & SellsChartered Accountants(Registration No. 117365W)

For and on behalf of the Board of Directors of IDFC tRUStee Company limited


mahendra n. Shah Director

Rajeev UberoiDirector

Mumbai | April 28, 2016



YEAR ENDED MARCH 31, 2016

YEAR ENDED MARCH 31, 2015

NOTES ` `

I Income


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











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) -


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










01 BacKgRoUnd IDFC Trustee Company Limited is a wholly owned subsidiary of IDFC Limited. This company is formed for providing trusteeship

services.


(A) BaSIS oF pRepaRatIon

‘The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013. The 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.



(H) eaRnIngS peR ShaRe

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

(I) pRoVISIonS anD ContIngenCIeS

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities if any, are disclosed in the notes. Contingent assets are not recognised in the financial statements.

(j) opeRatIng CyCle


(K) SeRVICe tax InpUt CReDIt

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

03 shaRe capItal



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




Outstanding at the beginning of the year 50,000 500,000 50,000 500,000


outstanding at the end of the year 50,000 500,000 50,000 500,000


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

entitled to one vote per share.

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

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

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



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



IDFC Financial Holding Company Limited and its nominees 50,000 100% - -

IDFC Limited and its nominees - - 50,000 100%



(`) (`)

(a) sURplUs In the statement of pRofIt and loss

Opening balance 32,800,559 27,794,957


Closing balance 38,378,106 32,800,559

05 tRade payaBles


(`) (`)



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.



(`) (`)

Statutory remittances (Comprises of Tax Deducted at Source) 14,491 5,000

TOTAL 14,491 5,000

07 shoRt teRm pRovIsIons


(`) (`)

Provision for income tax 191,040 -

[Net of advance tax of ` 2,330,000 (Previous year ` Nil)]

TOTAL 191,040 -



08 non cURRent Investments (at cost, non tRade)

FaCe ValUe (`)


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


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)


(`) (`)

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 (`)


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


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)


(`) (`)

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


(`) (`)

Balances with government authorities - Cenvat credit available 13,488 6,180

TOTAL 13,488 6,180




YEAR ENDEDMARCH 31, 2016


(`) (`)

Trusteeship fees 8,300,000 7,500,000

TOTAL 8,300,000 7,500,000

14 otheR Income



(`) (`)

Profit on sale of current investments 104,474 -

TOTAL 104,474 -

15 fInance cost



(`) (`)

Interest on delayed payment of service tax 56 445

TOTAL 56 445

16 otheR eXpenses



(`) (`)

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:



(`) (`)

Audit fee 50,000 50,000

Tax audit fee - (30,000)



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.




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:



(`) (`)

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)



(`) (`)

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.





U99999MH1993PLC071865

Mr. Vikram Limaye (Chairperson)

Mr. T S Bhattacharya

Mr. Ajay Sondhi

Mr. Sunil Kakar

Dr. Rajeev Uberoi



IDFC Bank Limited

Naman Chambers



Mumbai 400 051

tel +91 22 6622 2600

Fax + 91 22 6622 2501



CIN

DIRECTORS

AUDITORS

PRINCIPAL

BANKER

REGISTERED

OFFICE

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.


(amoUnt In `)



From continuing operations

Total Income 543,153,142 760,275,401




(Loss) / Profit after Tax (1,857,305) 223,112,340

From discontinuing operations

Profit after Tax discontinuing operations 150,377,806 195,679,923




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



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.



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.



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..


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



The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.


During the year, 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.



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.



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.



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


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.


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.


InteRnal contRol systems and RIsK management


The Risk Management Committee has been formulated to monitor and review Risk Management of the Company.


As per Section 134(3)(l) of Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2016 till the date of this report.





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.



(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


(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 and other group companies.

FOR AND ON BEHALF OF DIRECTORS

Vikram limayeChairperson


BOARD'S REPORT






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%



As on the financial year ended on March 31, 2016



i) CIN U99999MH1993PLC071865


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


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




sR. no.



1. Institutional Broking 6612 56%

2. Investment Banking 6619 44%



sR. no.


% of shaRes held

applIcaBle sectIon


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)



categoRy of shaReholdeRs

no. of shaRes held at the BegInnIng of the yeaR no. of shaRes held at the end of the yeaR % change dURIng the

yeaRdemat physIcal total % of total shaRes


a. pRomoteRs

(1) Indian




d) Bodies Corp. 14,137,200 NIL 14,137,200 100% 14,137,200 NIL 14,137,200 100% 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



1. Institutions

a) Mutual Funds

b) Banks/FI

c) Central Govt

d) State Govt(s)



g) FIIs


i) Others (specify)

SUB-TOTAL (B)(1):- NIL NIL NIL NIL NIL NIL NIL NIL NIL



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


2. non-Institutions

a) Bodies Corp.

i) Indian

ii) Overseas

b) Individuals



c) Others (specify)


total pUBlIC ShaReholDIng (B) = (B)(1) + (B)(2)


c. shaRes held By cUstodIan foR gdRs & adRs


gRanD total (a+B+C) 14,137,200 nIl 14,137,200 100% 14,137,200 nIl 14,137,200 100% nIl


sR. no.




dURIng the yeaR

no. of shaRes

% of total shaRes of

the company

%of shaRes pledged/


no. of shaRes


company

%of shaRes pledged/

encUmBeRed to total

shaRes

1. IDFC Limited 14,137,200 100% NIL NIL NIL NIL (-100%)


NIL NIL NIL 14,137,200 100% NIL 100%

TOTAL 14,137,200 100% NIL 14,137,200 100% NIL NIL


sR. no.





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%




NOT APPLICABLE

v) Shareholding of Directors and key managerial personnel: NIL

v. IndeBtedness





sR. no.


vIKRam lImaye t. s. BhattachaRya sUnIl KaKaR aJay sondhI RaJeev UBeRoI



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



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.


ceo company secRetaRy cfo total

1. gross salary


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





` In laC

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

sR. no



amoUnt oUtlay

(BUdget)


(1) dIRect eXpendItURe on pRoJects oR pRogRams (2) oveR

heads


Up to the RepoRtIng

peRIod



agency



12.42

1.79 2.03

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*



0.84 1.25





5 Support to Janaagraha Centre for Citizenship and Democracy to Strengthen and Improve the quality of life in Indian cities and towns.



1.29 1.29



total 12.42 9.18 10.18



Maharashtra-Mumbai

8.31

2.30 2.69







total 8.31 6.87 7.26



7.76

1.95 1.95


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


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



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






` In laC

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

sR. no



amoUnt oUtlay

(BUdget)


(1) dIRect eXpendItURe on pRoJects oR pRogRams (2) oveR

heads


Up to the RepoRtIng

peRIod



agency



12.42

1.79 2.03

IMP

LE

ME

NT

ING

AG

EN

CY

- I

DF

C F

OU

ND

AT

ION

*



0.84 1.25





5 Support to Janaagraha Centre for Citizenship and Democracy to Strengthen and Improve the quality of life in Indian cities and towns.



1.29 1.29



total 12.42 9.18 10.18



Maharashtra-Mumbai

8.31

2.30 2.69







total 8.31 6.87 7.26



7.76

1.95 1.95


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


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



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








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

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




(c) be sustainable



(a) livelihoods

(b) rural areas




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




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









opinion





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.



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.





i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. (Refer Note No.24(a))




For deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)

pallavi a. gorakshakar(Partner)(Membership No. 105035)





Report on the Internal financial controls over financial Reporting under clause (i) of sub-section 3 of section 143 of the companies act, 2013 (“the act”)We have audited the internal financial controls over financial reporting of Idfc secURItIes lImIted (“the Company”) as of March 31, 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.



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.







(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(c) The Company does not have any immovable properties of freehold or leasehold land and building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.


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

(iv) The Company has not granted any loans, made investments or provided guarantees and securities to which the provisions of Section 185 and 186 of the Companies Act, 2013 apply and hence reporting under clause (iv) of the CARO 2016 is not applicable.

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



(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, 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



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


(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.



(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.


(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.







NOTES

AS ATMARCH 31, 2016

AS ATMARCH 31, 2015

` `



(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


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



foR deloItte hasKIns & sellsChartered Accountants(Firm’s Registration No. 117365W)

For and on behalf of the Board of Directors ofIDFC Securities limited


Vikram limayeChairman

Sunil kakarDirector

Mumbai | April 25, 2016hitesh DesaiChief Financial Officer



NOTES



` `

a contInUIng opeRatIons

I Income


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


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







Sunil kakarDirector






` `

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


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


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


Net income taxes paid (86,931,654) (45,781,628)

net cash from operating activities (A) (20,939,814) 259,997,909





` `

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)






Sunil kakarDirector




01 BacKgRoUndIDFC Securities Limited (‘the Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited, (the ‘Holding Company’) incorporated in India and regulated by the Securities 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.


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.



¡ 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.


¡ 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.



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


03 shaRe capItal


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.


nUmBeR ` nUmBeR `

Outstanding at the beginning of the year 14,137,200 141,372,000 14,137,200 141,372,000


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.



In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exists currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

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



IDFC Financial Holding Company Limited and its nominees 14,137,200 100 - -

IDFC Limited and its nominees - - 14,137,200 100


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.





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


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)



11 non-cURRent Investments

FaCe ValUe `


qUantIty ` qUantIty `

trade investments (valued at cost unless stated otherwise)

Unquoted equity shares (fully paid)

Investment in subsidiaries

IDFC Capital (USA) INC. 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)


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



14 otheR assets (consIdeRed good, Unless stated otheRwIse)


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 `


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

` ` ` `


Cash on hand - 13,261 - 5,616


- 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


- 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



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.




` `

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



` `

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



` `

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



` `

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



22 fInance costs



` `

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



` `

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


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


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



24 contIngent lIaBIlItIes not pRovIded foR In Respect of:

(a) Contingent liability table


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:


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.


AS ATMARCH 31, 2015

( ` ) ( ` )

Change in the benefit obligations:



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)


Fair value of plan assets:

Fair value of plan assets at the beginning of the year 52,398,445 38,315,842


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)


Total actuarial gain to be recognised 7,574,022 1,806,919

actual return on plan assets:


Actuarial gain on plan assets (520,505) 1,225,896




AS ATMARCH 31, 2015

( ` ) ( ` )

Actual return on plan assets 4,178,231 4,130,011

amount recognised in the Balance Sheet:



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”


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 -


Reconciliation of the liability recognised in the Balance Sheet

Opening net liability - 5,792,415


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


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)


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) :


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 :


AS ATMARCH 31, 2015

( ` ) ( ` )

Advisory fee income 83,741,106 73,902,898

TOTAL 83,741,106 73,902,898



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.


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)


(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


(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


(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


TOTAL 9,049,872 28,933,133



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


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



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:


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


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


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:


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


TOTAL ExPENSES (B) 95,053,506 248,896,197

PROFIT BEFORE TAx FROM ORDINARY ACTIVITIES (A-B) 226,502,883 283,829,923




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.



Sunil kakarDirector


Idfc secURItIes sIngapoRe pte. lImIted

Mr. Vikram Limaye

Dr. Rajeev Uberoi

Mr. Kumar Anand


Standard Chartered Bank

One Finlayson Green #16-02

Singapore 049246

tel +65 6499 0700

Fax +65 65363359

DIRECTORS

AUDITORS

PRINCIPAL

BANKER

REGISTERED

OFFICE


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 end of yeaR



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


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 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.


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.


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


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


STATEMENT OF FINANCIAL POSITION MARCH 31, 2016


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)



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


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


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



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


STATEMENT CASHFLOwS YEAR ENDED MARCH 31, 2016



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




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.



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.



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.



fee Income

Fee income is recognised as income in the period in which the service has been rendered and the Company’s rights to receive payment

has been established.

RetIRement BenefIt costs

Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state-managed

retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans

where the Company’s obligations under the plans are equivalent to those arising in a defined contribution retirement benefit plan.

employee leave entItlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for

annual leave as a result of services rendered by employees up to the end of the reporting period.

Income taX

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of profit

or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years

and it further excludes items that are not taxable or tax deductible. The Company’s liability for current tax is calculated using tax rates

(and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the

corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable

temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available

against which deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer

probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based

on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax

liabilities and the Company intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax are recognised as an expense or income in profit or loss.

foReIgn cURRency tRansactIons and tRanslatIon

The financial statements of the Company are measured and presented in the currency of the primary economic environment in which

the entity operates (its functional currency). The financial statements of the Company are presented in United States dollar, which is the

functional currency of the Company.

In preparing the financial statements of the Company, transactions in currencies other than the Company’s functional currency are

recorded at the rate of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items

denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items that

are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss

for the period.

cash and BanK Balances In the statement of cash flows

Cash and cash equivalents in the statement of cash flows comprise of cash at bank that are subject to an insignificant risk of changes in

value.

03 cRItIcal accoUntIng JUdgements and Key soURces of estImatIon UnceRtaInty

In the application of the Company’s accounting policies, which are described in Note 2, management is required to make judgements,

estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The

estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual

results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the

period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the

revision affects both current and future periods.



Critical judgement in applying the entity’s accounting policies

The management is of the opinion that any instances of application of judgements are not expected to have a significant effect on the

amounts recognised in the financial statements.

key sources of estimation uncertainty and judgements

The management is of the opinion that there are no key assumptions concerning the future, and other key sources of estimation

uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of

assets and liabilities within the next financial year.

04 fInancIal InstRUments, fInancIal RIsKs and capItal 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


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.



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.



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



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



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


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.


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


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


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


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


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


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


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



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.



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


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 infoidfcmf@idfc.com

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




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


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.



The Disclosure pertaining to the provisions of Section 197 of the Act, read with the Companies (Appointment and Remuneration of


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.



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


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.



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


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.



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.


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.




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.


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.





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.


The extract of the Annual Return in the prescribed Form No. MGT 9 are appended as annexure III.


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:


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.



(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.



vIKRam lImayeChairperson







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.


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



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).



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







i) CIN U65993MH1999PLC123191


iii) Name of the Company IDFC ASSET MANAGEMENT COMPANY LIMITED



v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra.

Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051



TSR Darashaw Limited

6-10, Haji Moosa Patrawala Industrial Estate, 20 Dr. E. Moses Road, Mahalaxmi, Mumbai- 400011. Tel.: +91 22 6656 8484



sR. no.



1. Asset Management 66301 96.54%


sR. no.


% of shaRes held

applIcaBle sectIon


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)





% change dURIng



shaRes

a. promoters

(1) Indian




d) Bodies Corp. 2,009,277 6 2,009,283 75% 2,009,277 6 2,009,283 75% 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


01 RegIstRatIon and otheR detaIls




% change dURIng



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


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)



g) FIIs


i) Others (specify)


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



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



grand total (a+B+C) 2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% nIl




sR. no.




dURIng the yeaR

no. of shaRes


company

%of shaRes pledged/


no. of shaRes

% of total shaRes of

the company

%of shaRes pledged/


1. IDFC Limited 2,009,283 75% NIL NIL NIL NIL (100%)


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.





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%


NOT APPLICABLE


v. IndeBtedness


vI. RemUneRatIon of dIRectoRs and Key manageRIal peRsonnel: NOT APPLICABLE



sR. no.


RaJIv B. lall

pRadIp madhavJI

BaKUl patel

vIshwavIR saRan das

vIKRam lImaye

eRIc waRd

anIta RamachandRan



NIL 100,000 100,000 185,000 NIL NIL 100,000 485,000

Commission 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


Commission


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


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


vII. penaltIeS/pUnIShment/CompoUnDIng oF oFFenCeS: NIL




` 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)


amoUnt oUtlay

(BUdget)

amoUnt spent on the pRoJects oR pRogRams

sUB heads : (1) dIRect eXpendItURe on pRoJects

oR pRogRams (2) oveR heads


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

*



0.03 0.06






Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects


0.04 0.04



total 0.42 0.31 0.38



Maharashtra-Mumbai

0.28

0.08 0.10







total 0.28 0.24 0.26



0.27

0.07 0.07


Cl.(ii) livelihood enhancement projects;

Cl. (iv) ensuring environmental sustainability;

Cl. (x) rural development projects.





total 0.27 0.18 0.22


total 0.97 0.31 0.43



total (a) + (B) 1.94 1.13 1.41




anneXURe IvCORPORATE SOCIAL RESPONSIBILITy (CSR)



` IN CRORE

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

sR. no csR pRoJect oR actIvIty IdentIfIed

sectoR In whIch the pRoJect Is coveRed (claUse no. of schedUle vII to the companIes act, 2013, amended)


amoUnt oUtlay

(BUdget)

amoUnt spent on the pRoJects oR pRogRams

sUB heads : (1) dIRect eXpendItURe on pRoJects

oR pRogRams (2) oveR heads


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

*



0.03 0.06






Cl.(ii) promoting education Cl.(ii) livelihood enhancement projects


0.04 0.04



total 0.42 0.31 0.38



Maharashtra-Mumbai

0.28

0.08 0.10







total 0.28 0.24 0.26



0.27

0.07 0.07


Cl.(ii) livelihood enhancement projects;

Cl. (iv) ensuring environmental sustainability;

Cl. (x) rural development projects.





total 0.27 0.18 0.22


total 0.97 0.31 0.43



total (a) + (B) 1.94 1.13 1.41






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.


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).




(c) be sustainable



(a) livelihoods

(b) rural areas




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)



to the memBeRs of Idfc asset management company lImIted


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.


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.


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 pr

IDFC LIMITED · IDFC FInanCIal holDIng Company lImIteD 2 2. IDFC ... email ID info@idfc ... As per the provisions of the Companies Act, 2013, IDs are not liable to retire by rotation

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