idfc subsidiary annual report 2017-18 · 6 | idfc annual report 2017–2018 board's report...

IDFC SUBSIDIARYANNUAL REPORT

2017-18

IDFC LIMITED

CONTENTS

1. IDFC FINANCIAL HOLDING COMPANY LIMITED 2

2. IDFC FOUNDATION 35

3. IDFC PROJECTS LIMITED 65

4. IDFC INFRASTRUCTURE FINANCE LIMITED 87

5. IDFC ALTERNATIVES LIMITED 128

6. IDFC CAPITAL (SINGAPORE) PTE. LIMITED 166

7. IDFC TRUSTEE COMPANY LIMITED 184

8. IDFC SECURITIES LIMITED 204

9. IDFC SECURITIES SINGAPORE PTE. LIMITED 243

10. IDFC CAPITAL (USA) INC. 259

11. IDFC ASSET MANAGEMENT COMPANY LIMITED 270

12. IDFC INVESTMENT MANAGERS (MAURITIUS) LIMITED 308

13. IDFC AMC TRUSTEE COMPANY LIMITED 327

14. IDFC BHARAT LIMITED 345

U65900TN2014PLC097942

Mr. Vinod Rai (Chairman)

Dr. Jaimini Bhagwati

Mr. Donald Peck

Ms. Ritu Anand

(w.e.f. July 17, 2017)

Ms. Marianne Økland

(till July 17, 2017)

Dr. Omkar Goswami

(till April 2, 2017)

Price Waterhouse & Co

Chartered Accountants LLP

IDFC Bank Limited

KRM Towers, 7th Floor,

No. 1 Harrington Road,

Chetpet Chennai 600 031

Tel +91 44 4564 4000

Fax + 91 44 4564 4022

Website www.idfc.com

Email ID [email protected]

IDFC FINANCIAL HOLDING COMPANY LIMITED

CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

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

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fourth Annual Report together with the audited financial statements for the year ended

March 31, 2018.

OPERATIONS REVIEWIDFC Financial Holding Company Limited (“IDFC FHCL” or “the Company”) is a non-operative financial holding Company and holds

investments in IDFC Bank, IDFC Asset Management Company Limited, IDFC Alternatives Limited, IDFC Securities Limited, IDFC

Infrastructure Finance Limited and other subsidiaries.

FINANCIAL HIGHLIGHTS

(AMOUNT IN `)

PARTICULARS FOR THE YEAR ENDED MARCH 31, 2018

FOR THE YEAR ENDED MARCH 31, 2017

Total Income 2,026,864,270 1,114,370,707

Less: Total Expenses 3,828,453 3,561,826

Profit before Tax 2,023,035,817 1,110,808,881

Less: Provision for Tax 19,028,000 17,246,000

Profit after Tax 2,004,007,817 1,093,562,881

AMOUNT TO BE CARRIED FORWARD TO RESERVES

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

DIVIDEND

During the year, the Company paid an interim dividend of ` 0.155 per equity share of ` 10 each (i.e. 1.55%) aggregating to ` 1,399,532,200.

The Directors do not recommend any dividend for the financial year ended March 31, 2018.

HOLDING, SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has 8 direct / indirect domestic subsidiaries and 4 indirect foreign subsidiaries, as on date which are given below:

SR. NO. NAME OF COMPANY DIRECT / INDIRECT

% OF SHAREHOLDING

Holding Company

i. IDFC Limited Direct 100

Domestic Subsidiaries

i. IDFC Bank Limited Direct 52.80

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

Indirect through IDFC Bank 52.80

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

Direct 81.48

iv. IDFC Alternatives Limited Direct 100

v. IDFC Trustee Company Limited Direct 100

vi. IDFC Securities Limited Direct 100

vii. IDFC Asset Management Company Limited (“IDFC AMC”) Direct 100

viii. IDFC AMC Trustee Company Limited Direct 100

Foreign Subsidiaries

i. IDFC Capital (Singapore) Pte. Limited Indirect through IDFC Alternatives 100

ii. IDFC Securities Singapore Pte. Limited Indirect through IDFC Securities 100

iii. IDFC Capital (USA) Inc. Indirect through IDFC Securities 100

iv. IDFC Investment Managers (Mauritius) Ltd. Indirect through IDFC AMC 100

A statement containing salient features of the financial statement and all other requisite details of the aforesaid subsidiary company in

the format AOC-I shall form part of this report.

4 | I D F C A N N U A L R E P O R T 2 0 1 7 – 2 0 1 8

BOARD'S REPORT

IDFC ALTERNATIVES LIMITEDIDFC Alternatives Limited has entered into a definitive agreement with Global Infrastructure Partners India for the sale of its infrastructure asset management business. All necessary regulatory approvals for the sale have been received. IDFC Alternatives will continue to manage Private Equity and Real Estate funds and the aforementioned sale to Global Infrastructure Partners India will not have any impact on its Private Equity and Real Estate verticals. IDFC Limited is evaluating divestiture of the Private Equity and Real Estate platform but no definitive agreement has been signed yet.

PROPOSED MERGER OF CAPITAL FIRST GROUP WITH IDFC BANKThe Board of Directors of IDFC Bank and Capital First Limited (“Capital First”) at their respective meetings held on January 13, 2018 had approved a composite scheme of amalgamation (“Scheme”) of Capital First, Capital First Home Finance Limited and Capital First Securities Limited with IDFC Bank and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (“Amalgamation”).

The share exchange ratio for the Amalgamation was approved to be 139 (One Hundred and Thirty Nine) fully paid-up equity shares of IDFC Bank for every 10 (Ten) fully paid-up equity shares held in Capital First.

As on the date of this report, the Scheme has received;

a. Approvals from National Housing Bank and Competition Commission of India;

b. Approvals from BSE Limited and National Stock Exchange of India Limited (in the capacity of a SEBI registered Stock Broker);

c. No Objection Letters from BSE Limited and National Stock Exchange of India Limited under Regulation 37 of SEBI LODR Regulations;

d. No Objection Letter from RBI under RBI (Amalgamation of Private Sector Banks) Directions, 2016.

IDFC Bank has filed an application with the National Company Law Tribunal (“NCLT”), Chennai Bench seeking its direction for convening meetings of the Shareholders and Creditors of IDFC Bank.

On receipt of directions from the NCLT, IDFC Bank shall convene meetings of its Shareholders and Creditors, as may be required.

Subsequent to the receipt of approval of the Shareholders and Creditors, IDFC Bank shall file a Petition with the NCLT for its final approval to the Scheme.

PARTICULARS OF EMPLOYEESThe Company does not have any employee as on March 31, 2018.

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTSThe 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 EXPENDITUREThere were no foreign exchange earnings or expenditure during the year under review.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONSince 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 & KMPThe following are the Directors of the Company

SR NO NAME OF THE DIRECTOR / KMP DESIGNATION

1 Mr. Vinod Rai Chairman and Nominee Director

2 Mr. Donald Peck Nominee Director

3 Dr. Jaimini Bhagwati Independent Director

4 Ms. Ritu Anand Independent Director

During the year:

¾ Mr. Omkar Goswami resigned w.e.f. April 2, 2017 and IDFC Limited (Holding Company) withdrew the nomination of Ms. Marianne Økland w.e.f. July 17, 2017. The Board of Directors hereby record sincere appreciation for enormous contribution made by them towards the Company during their tenure.

¾ Dr. Rajeev Uberoi ceased to be CEO of the Company, post completion of his term w.e.f. June 30, 2017.

¾ Mr. Bipin Gemani resigned as Chief Financial Officer and Mr. Ketan Kulkarni resigned as the Company Secretary w.e.f. January 12, 2018 and January 31, 2018, respectively.

¾ Ms. Ritu Anand was appointed as an Independent Director w.e.f. July 17, 2017.


BOARD'S REPORT

The Board of Directors at its meeting held on April 27, 2018 have recommended the appointment of Ms. Ritu Anand as Managing Director

& CEO of the Company subject to approval of Reserve Bank of India (RBI). The Company has filed an application for the approval of the

aforesaid appointment with RBI.

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013,

Mr. Vinod Rai (DIN: 01119922) 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. Vinod Rai at the ensuing AGM.

The Company is in process of identification and appointment of suitable candidate for the position of CFO and CS.

DECLARATION OF INDEPENDENCE

The Company has received a declaration from IDs, at the time of their respective appointments and also at the first meeting of the Board of

Directors held in the financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the

Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for

Independent Directors” as per Schedule IV of the Act.

BOARD MEETINGSDuring FY18, the Board met seven times and gap between two consecutive board meetings was less than one hundred and twenty days.

The dates of the meetings were: April 28, 2017, July 08, 2017, July 27, 2017, October 30, 2017, January 12, 2018, January 29, 2018 and

March 28, 2018. The composition of the Board is in compliance with the Companies Act, 2013. Attendance details of the Board Meeting

are given in table below:

ATTENDANCE DETAILS OF BOARD OF DIRECTORS FOR FY18

NAME OF THE MEMBER DIN POSITION NO. OF MEETINGS HELD NO. OF MEETINGS ATTENDED

Mr. Vinod Rai 01119922 Chairman & Nominee Director 7 7

Dr. Jaimini Bhagwati 07274047 Independent Director 7 7

Mr. Donald Peck 00140734 Nominee Director 7 6

Ms. Ritu Anand2 05154174 Independent Director 5 5

Ms. Marianne Økland3 03581266 Nominee Director 2 2

Dr. Omkar Goswami1 00004258 Independent Director 0 01 Resigned from the board w.e.f. April 2, 20172 Appointed w.e.f. July 17, 20173 Ceased to be a Director w.e.f July 17, 2017

COMMITTEES OF THE BOARDAs of March 31, 2018, IDFC Financial Holding Company Limited had the following Board level Committees:

(i) Audit and Risk Committee; (ii) Nomination & Remuneration Committee; (iii) CSR Committee.

AUDIT AND RISK COMMITTEEDuring the year, four 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, 2018, the Audit & Risk Committee of the Company comprises of the following members:

1. Dr. Jaimini Bhagwati - Independent Director - Chairman

2. Mr. Donald Peck – Nominee Director

3. Ms. Ritu Anand – Independent Director

The Committee met four times during FY18: April 28, 2017, July 27, 2017, October 30, 2017 and January 29, 2018. The committee

meets, inter alia, to review the accounts of the Company, transactions with related parties and to discuss the audit findings and

recommendations of the internal and statutory auditors.

ATTENDANCE DETAILS OF AUDIT AND RISK COMMITTEE MEETINGS FOR FY18

NAME OF THE MEMBER POSITION STATUS NO OF MEETINGS HELD IN FY18 NO OF MEETINGS ATTENDED IN FY18

Dr. Jaimini Bhagwati Independent Director Chairman 4 4

Mr. Vinod Rai1 Nominee Director Member 2 2

Mr. Donald Peck Nominee Director Member 4 3

Ms. Ritu Anand2 Independent Director Member 2 2

Dr. Omkar Goswami3 Independent Director Member 0 0

1 Cessation due to reconstitution w.e.f. July 27, 20172 Appointed w.e.f. July 17, 20173 Resigned as a member w.e.f. April 2, 2017


BOARD'S REPORT

NOMINATION AND REMUNERATION COMMITTEE

The NRC meets, inter alia, to fill up of vacancies in the Board, evaluate the performance of the Board and its individual Members. The NRC recommends to the Board from time to time the framework relating to the remuneration for the Directors and Key Managerial Personnel. The Company has put in place Board approved remuneration policy which is in line with the requirements of the Act. The Committee met 3 times during FY18: April 28, 2017, January 29, 2018, March 28, 2018. The composition and attendance details of Nomination and Remuneration Committee of the Company is given below:


Dr. Jaimini Bhagwati* Independent Director Chairman 2 2

Mr. Vinod Rai Nominee Director Member 3 3

Ms. Ritu Anand* Independent Director Member 2 2

Mr. Donald Peck ** Nominee Director Member 1 1

Ms. Marianne Økland*** Nominee Director Member 1 1

Dr. Omkar Goswami**** Independent Director Member 0 0

*appointed as a Chairman / Member w.e.f. July 27, 2017**ceased to be a Member w.e.f July 27, 2017***ceased to be a Director w.e.f July 17, 2017****resigned as a Director w.e.f. April 2, 2017

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Company continued to partner with IDFC Foundation (a Section 8 company which is a wholly owned subsidiary of IDFC Limited) for inclusive growth to support the cause of sustainable livelihood and skill development, elementary education and primary health to achieve the CSR objectives. The Committee met once during FY18 on April 28, 2017. The composition and attendance details of the Meetings of Corporate Social Responsibility Committee of the Company are given below:


Dr. Jaimini Bhagwati Independent Director Chairman 1 1

Dr. Omkar Goswami* Independent Director Member 0 0

Mr. Vinod Rai** Nominee Director Member 0 0

Mr. Donald Peck Nominee Director Member 1 1

*resigned w.e.f. April 2, 2017** appointed w.e.f. July 27, 2017

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

IT STRATEGY COMMITTEE

As per the provisions of RBI master direction RBI/DNBS/2016-17/53 DNBS.PPD.No.04/66.15.001/2016-17 dated June 8, 2017 pertaining to “Information Technology Framework for NBFC sector, during the year, IT Strategy Committee was constituted having Ms. Ritu Anand as Independent Director & Chairperson of the Committee and Mr. Sunil Kakar, Mr. Bipin Gemani & Mr. Madhusudan Warrior as Members. The Committee met once on November 28, 2017 and all the Members attended the meeting. The Board approved the Information Technology (IT) Strategy Document, Information Security Management System (ISMS) Policy, IT Policy, Cyber Security Policy and Cyber Crisis Management Plan on the recommendation of IT Strategy Committee.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was prepared and circulated to the Board for Annual evaluation for FY17. The Directors evaluated the Board as a whole, its committee and Individual Directors including Chairman. The exercise of Board evaluation was carried out and completed effectively.

AUDITORS

At the AGM of the Company held on August 4, 2017, the Shareholders had approved the appointment of Price Waterhouse & Co, Chartered Accountants LLP (FRN 304026E / E300009) (“PWC”) as Statutory Auditors for a period of 5 years to hold office from the conclusion of the 20th AGM till the conclusion of the 25th AGM of the Company subject to ratification by the Shareholders at every AGM. PWC has confirmed that they are not disqualified from continuing as Statutory Auditors of the Company for FY19.

In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of the Statutory Auditors is not required to be ratified at every Annual General Meeting.

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.


BOARD'S REPORT

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 internal control systems which commensurate with the size and operations of the company.

RISK MANAGEMENT

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

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

There were no significant 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. BNP & Associates, Company Secretaries to undertake the Secretarial Audit of the Company for FY18. The Secretarial Audit Report forms part of this report.

The secretarial auditors commented that Dr. Omkar Goswami resigned as ID from the Board on April 2, 2017. Accordingly the Company was required to fill up the vacancy on or before July 2, 2017. The Company vide circular resolution dated July 17, 2017 appointed an ID in his place and accordingly reconstituted the Audit and Risk Management Committee, Nomination and Remuneration Committee and Corporate Social Responsibility (CSR) committee in the Board meeting dated July 27, 2017.

COMPLIANCE WITH SECRETARIAL STANDARDS

Pursuant to the Secretarial Standard-I issued by the Institute of Company Secretaries of India pertaining to Board of Directors, the Company confirms that all applicable Secretarial Standards have been duly complied with during the period under review.

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, 2018 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.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that:

(a) in the preparation of the annual financial statements for the year ended March 31, 2018, 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, 2018 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 shall form part of this Report.

ACKNOWLEDGMENTS

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 RaiChairman

Mumbai, June 26, 2018


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

NOT APPLICABLE

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

- During the year, Feedback Infra Private Limited ceased to be Associate Company of IDFC Bank due to sale of partial stake resulted in change in its holding from 24.61% to 17.77%

# Includes interim dividend of 200% on equity shares paid during the year. Further, In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance sheet date’ as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated March 30, 2016, proposed dividend of 1200% is not recognised as a liability by the subsidiary as on March 31, 2018.

* Exchange rate:

Closing Rate : 1 USD = R 65.0441

Average Rate : 1 USD = R 64.4932.

AN

NE

XU

RE

1 AOC - I STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENTS OF SUBSIDIARIES / ASSOCIATES / JOINT VENTURES[Pursuant to first proviso to sub-section 3 of Section 129 of the Act, read with Rule 5 of the Companies

(Accounts) Rules, 2014]

PART A SUBSIDIARIES R IN CRORE

SR. NO. NAME OF THE SUBSIDIARY COMPANIES

DATE SINCE WHEN SUBSIDIARY ACQUIRED /

INCORPORATED CAPITAL RESERVES TOTAL

ASSETS TOTAL

LIABILITIES INVESTMENTS TURNOVER PROFIT

BEFORE TAX PROVISION

FOR TAX PROFIT AFTER

TAX PROPOSED

DIVIDEND (%) EXTEND OF

SHAREHOLDING (IN %)

PREFERENCE EQUITY

1 IDFC Alternatives Limited November 7, 2002 0.22 321.43 394.06 72.41 332.26 104.47 (15.88) (8.29) (7.59) - - 100

(Previous Year) 0.22 329.02 374.08 44.84 313.18 124.78 28.39 9.35 19.04 - - 100

2 IDFC AMC Trustee Company Limited May 30, 2008 0.05 0.15 0.23 0.03 - 0.18 0.07 0.02 0.05 - - 100

(Previous Year) 0.05 0.10 0.16 0.01 - 0.18 0.06 0.02 0.04 - - 100

3 IDFC Asset Management Company Limited May 30, 2008 2.68 201.86 296.18 91.64 225.02 303.08 81.22 26.74 54.48 1200 - 100

(Previous Year) 2.68 220.73 276.31 52.90 233.45 291.96 140.00 42.72 97.28 2275 - 100

4 IDFC Capital (Singapore) Pte. Ltd.* January 2, 2008 246.22 (47.02) 199.73 0.53 116.58 7.74 1.32 - 1.32 - - 100

(Previous Year) 246.22 (48.98) 197.51 0.27 127.02 8.05 (0.87) - (0.87) - - 100

5 IDFC Capital (USA) Inc.* August 3, 2009 4.62 1.66 6.36 0.08 - 3.46 0.23 0.12 0.11 - - 100

(Previous Year) 4.62 1.53 6.29 0.14 - 3.36 0.22 0.20 0.02 - - 100

6 IDFC Investment Managers (Mauritius) Limited* September 13, 2010 2.51 (1.21) 1.37 0.07 - - (0.21) - (0.21) - - 100

(Previous Year) 2.51 (1.00) 1.57 0.06 - - (0.22) - (0.22) - - 100

7 IDFC Securities Limited October 22, 2007 14.14 155.08 193.02 23.80 26.17 92.08 37.11 13.75 23.36 150 - 100

(Previous Year) 14.14 131.72 205.45 59.59 20.13 67.82 16.63 5.44 11.19 - - 100

8 IDFC Securites Singapore Pte. Ltd* November 21, 2012 14.91 (12.16) 3.16 0.41 - 3.33 (0.67) - (0.67) - - 100

(Previous Year) 14.91 (11.50) 3.65 0.24 - 2.10 (1.63) - (1.63) - - 100

9 IDFC Trustee Company Limited October 11, 2002 0.05 5.92 6.34 0.37 5.57 0.91 1.30 0.33 0.97 - - 100

(Previous Year) 0.05 4.95 5.01 0.01 2.28 0.89 1.47 0.36 1.11 - - 100

10 IDFC Infrastructure Finance Limited March 7, 2014 540.00 198.87 4,475.07 3,736.20 158.00 336.52 86.49 - 86.49 - - 81.48

(Previous Year) 540.00 112.37 2,837.04 2,184.67 125.28 206.93 70.84 - 70.84 - - 81.48

11 IDFC Bank Limited October 21, 2014 3,404.07 11,852.46 126,520.18 111,263.65 61,201.53 8,930.00 1,027.30 168.00 859.30 7.50 - 52.80

(Previous Year) 3,399.01 11,279.04 112,159.66 97,481.61 50,471.70 8,532.71 1,470.96 451.22 1,019.74 7.50 - 52.88

12 IDFC Bharat Limited October 13, 2016 5.58 169.43 229.15 54.14 - 177.29 32.95 11.70 21.25 1400# - 52.80

(Previous Year) 5.58 161.61 233.94 66.75 - 262.95 20.90 8.49 12.41 - - 52.88


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

Vinod RaiChairman

Dr. Jaimini BhagwatiDirector

Mumbai, April 27, 2018

PART A SUBSIDIARIES R IN CRORE

SR. NO. NAME OF THE SUBSIDIARY COMPANIES

DATE SINCE WHEN SUBSIDIARY ACQUIRED /

INCORPORATED CAPITAL RESERVES TOTAL

ASSETS TOTAL

LIABILITIES INVESTMENTS TURNOVER PROFIT

BEFORE TAX PROVISION

FOR TAX PROFIT AFTER

TAX PROPOSED

DIVIDEND (%) EXTEND OF

SHAREHOLDING (IN %)

PREFERENCE EQUITY

1 IDFC Alternatives Limited November 7, 2002 0.22 321.43 394.06 72.41 332.26 104.47 (15.88) (8.29) (7.59) - - 100

(Previous Year) 0.22 329.02 374.08 44.84 313.18 124.78 28.39 9.35 19.04 - - 100

2 IDFC AMC Trustee Company Limited May 30, 2008 0.05 0.15 0.23 0.03 - 0.18 0.07 0.02 0.05 - - 100

(Previous Year) 0.05 0.10 0.16 0.01 - 0.18 0.06 0.02 0.04 - - 100

3 IDFC Asset Management Company Limited May 30, 2008 2.68 201.86 296.18 91.64 225.02 303.08 81.22 26.74 54.48 1200 - 100

(Previous Year) 2.68 220.73 276.31 52.90 233.45 291.96 140.00 42.72 97.28 2275 - 100

4 IDFC Capital (Singapore) Pte. Ltd.* January 2, 2008 246.22 (47.02) 199.73 0.53 116.58 7.74 1.32 - 1.32 - - 100

(Previous Year) 246.22 (48.98) 197.51 0.27 127.02 8.05 (0.87) - (0.87) - - 100

5 IDFC Capital (USA) Inc.* August 3, 2009 4.62 1.66 6.36 0.08 - 3.46 0.23 0.12 0.11 - - 100

(Previous Year) 4.62 1.53 6.29 0.14 - 3.36 0.22 0.20 0.02 - - 100

6 IDFC Investment Managers (Mauritius) Limited* September 13, 2010 2.51 (1.21) 1.37 0.07 - - (0.21) - (0.21) - - 100

(Previous Year) 2.51 (1.00) 1.57 0.06 - - (0.22) - (0.22) - - 100

7 IDFC Securities Limited October 22, 2007 14.14 155.08 193.02 23.80 26.17 92.08 37.11 13.75 23.36 150 - 100

(Previous Year) 14.14 131.72 205.45 59.59 20.13 67.82 16.63 5.44 11.19 - - 100

8 IDFC Securites Singapore Pte. Ltd* November 21, 2012 14.91 (12.16) 3.16 0.41 - 3.33 (0.67) - (0.67) - - 100

(Previous Year) 14.91 (11.50) 3.65 0.24 - 2.10 (1.63) - (1.63) - - 100

9 IDFC Trustee Company Limited October 11, 2002 0.05 5.92 6.34 0.37 5.57 0.91 1.30 0.33 0.97 - - 100

(Previous Year) 0.05 4.95 5.01 0.01 2.28 0.89 1.47 0.36 1.11 - - 100

10 IDFC Infrastructure Finance Limited March 7, 2014 540.00 198.87 4,475.07 3,736.20 158.00 336.52 86.49 - 86.49 - - 81.48

(Previous Year) 540.00 112.37 2,837.04 2,184.67 125.28 206.93 70.84 - 70.84 - - 81.48

11 IDFC Bank Limited October 21, 2014 3,404.07 11,852.46 126,520.18 111,263.65 61,201.53 8,930.00 1,027.30 168.00 859.30 7.50 - 52.80

(Previous Year) 3,399.01 11,279.04 112,159.66 97,481.61 50,471.70 8,532.71 1,470.96 451.22 1,019.74 7.50 - 52.88

12 IDFC Bharat Limited October 13, 2016 5.58 169.43 229.15 54.14 - 177.29 32.95 11.70 21.25 1400# - 52.80

(Previous Year) 5.58 161.61 233.94 66.75 - 262.95 20.90 8.49 12.41 - - 52.88


ANNEXURE IISECRETARIAL AUDIT REPORT

Form No. MR-3

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018

[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 Members,IDFC Financial Holding Company Limited KRM Tower, 8th Floor, No.1 Harrington Road, Chetpet Chennai, Tamil Nadu 600031.

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 having CIN NO. U65900TN2014PLC097942 (hereinafter called ‘the Company’) for the year ended on 31st March 2018 (‘the audit period’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

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

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the audit period 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. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment;

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

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

b) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993,

c) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, and

d) The Securities Contracts (Regulation) Act, 1956 (SCRA) and the Rules made thereunder to the extent of transfer of securities.

The list of Acts, Laws and Regulations specifically applicable to the Company is as below:-

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

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

During the period under review, provisions of the following Act/ Regulations were not applicable to the Company:

a) Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Overseas Direct Investment and External Commercial Borrowings;

b) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992:

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

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

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

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

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

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

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

Dr. Omkar Goswami resigned as an Independent Director (ID) from the Board on 02.04.2017. Accordingly the Company was required to fill up the vacancy on or before July 2, 2017. The Company vide circular resolution dated 17.07.2017 appointed an ID in his place and accordingly reconstituted the Audit and Risk Management Committee, Nomination and Remuneration Committee and Corporate Social Responsibility (CSR) committee in the Board meeting dated 27.07.2017.

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


We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India.

We further report that

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

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

During the period under review, decisions were carried through unanimously and there were no dissenting views by any of the directors of the Board 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 there were no major events which has major bearing on the company’s affairs.

For BNP & Associates Company Secretaries

Prakash K. Pandya Partner FCS 3901 COP No. 2311

Mumbai | April 23, 2018

Note: - 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 to the Secretarial Audit Report for the financial year ended 31st March 2018

To, The Members IDFC Financial Holding Company Limited

1. The compliance of provisions of all laws, rules, regulations, standards applicable to IDFC Financial Holding Company Limited (the ‘Company’) is the responsibility of the management of the Company. Our examination was limited to the verification of records and procedures on test check basis for the purpose of issue of the Secretarial Audit Report.

2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Company. Our responsibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by the Company, along with explanations where so required.

3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial and other legal records, legal compliance mechanism and corporate conduct. The verification was done on test check basis to ensure that correct facts as reflected in secretarial and other records produced to us. We believe that the processes and practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the Secretarial Audit Report.

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

5. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and major events during the audit period.

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


Prakash K. Pandya Partner FCS 3901 COP No. 2311



As on the financial year ended on March 31, 2018

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

I. REGISTRATION AND OTHER DETAILS:

i) CIN U65900TN2014PLC097942

ii) Registration Date November 7, 2014

iii) Name of the Company IDFC FINANCIAL HOLDING COMPANY LIMITED

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

Indian Non-Government Company

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

vi) Whether listed company Yes / No No

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

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

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

SR. NO.

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

% TO TOTAL TURNOVER OF THE COMPANY

1. Non-operating financial holding company (Investment Company) 65993 100

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SR. NO.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY /ASSOCIATE

% OF SHARES HELD

APPLICABLE SECTION

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

2. IDFC Bank Limited L65110TN2014PLC097792 Subsidiary 52.80 Section 2(87)

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

U65929TN2003PLC050856 Subsidiary 52.80 Section 2(87)

4. IDFC Asset Management Company Limited

U65993MH1999PLC123191 Subsidiary 100 Section 2(87)

5. IDFC AMC Trustee Company Limited

U69990MH1999PLC123190 Subsidiary 100 Section 2(87)

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

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

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

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

U67190MH2014PLC253944 Subsidiary 81.48 Section 2(87)

10. IDFC Securities Singapore Pte. Limited

Foreign Company Subsidiary 100 Section 2(87)

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

12. IDFC Investment Managers (Mauritius) Limited


13. IDFC Capital (Singapore) Pte. Limited


ANNEXURE IIIFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN


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

(i) Category-wise Share Holding

CATEGORY OF SHAREHOLDERS NO. OF SHARES HELD AS ON MARCH 31, 2017 NO. OF SHARES HELD AS ON MARCH 31, 2018 % CHANGE DURING

THE YEARDEMAT PHYSICAL TOTAL % OF TOTAL SHARES

DEMAT PHYSICAL TOTAL % OF TOTAL SHARES

A. PROMOTERS

(1) Indian

Bodies Corp. 9,029,239,940 60 9,029,240,000 100% 9,029,239,940 60 9,029,240,000 100% NIL

SUB-TOTAL (A) (1): 9,029,239,940 60 9,029,240,000 100% 9,029,239,940 60 9,029,240,000 100% NIL

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

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

2. NON-INSTITUTIONS NIL NIL NIL NIL NIL NIL NIL NIL NIL

C. SHARES HELD BY CUSTODIAN FOR GDRS & ADRS

NIL NIL NIL NIL NIL NIL NIL NIL NIL

GRAND TOTAL (A+B+C) 9,029,239,940 60 9,029,240,000 100% 9,029,239,940 60 9,029,240,000 100% NIL

(ii) Shareholding of Promoters

SR. NO.

SHAREHOLDER’S NAME SHAREHOLDING AS ON MARCH 31, 2017 SHARE HOLDING AS ON MARCH 31, 2018 % CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES % OF TOTAL SHARES OF THE

COMPANY

% OF SHARES PLEDGED/

ENCUMBERED TO TOTAL SHARES


COMPANY



1. IDFC Limited 9,029,240,000 100% NIL 9,029,240,000 100% NIL NIL

TOTAL 9,029,240,000 100% NIL 9,029,240,000 100% NIL NIL

(iii) Change in Promoters’ Shareholding: NO CHANGE

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

NOT APPLICABLE

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

V. INDEBTEDNESS

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



VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

B. Remuneration to other directors:

SR. NO.

PARTICULARS OF REMUNERATION NAME OF DIRECTORS TOTAL AMOUNT

IN ` VINOD RAI DONALD

PECKMARIANNE

ØKLANDOMKAR

GOSWAMIJAIMINI

BHAGWATIRITU

ANAND

1. Independent Directors NA NA NA

Fee for attending board committee meetings NIL 400,000 250,000 650,000

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

Others, please specify NIL NIL NIL NIL

Total (1) NA NA NA 500,000 1,400,000 250,000 2,150,000

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

Total (B) = (1 + 2) NIL NIL NIL 500,000 1,400,000 250,000 2,150,000

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



[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 Finance Holding Co. Ltd. to mandatorily spend on CSR.

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

The object of the CSR activities would seek to –

(a) serve the poor, marginalised and underprivileged

(b) promote inclusion

(c) be sustainable

(d) meet needs of the larger community and society

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

(a) livelihoods

(b) rural development projects

(c) promoting healthcare including preventive health care

(d) education

(e) community engagement/development

(f) environmental sustainability

(g) disaster relief

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

(i) Others

2. The Composition of the CSR Committee:

Dr. Jaimini Bhagwati, Chairman

Mr. Donald Peck

Mr. Vinod Rai

3. Average net profit of the company for last three financial years – ` 18,634,831/-

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) – ` 375,000/-

5. Details of CSR spent during the financial year.

a) Total amount to be spent for the financial year: ` 375,000/-

b) Amount spent during the year: ` 375,000/-

c) Amount unspent, if any; NIL

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

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

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

For IDFC Financial Holding Company Limited

Place : Mumbai Dr. Jaimini Bhagwati Vinod RaiDate : June 26, 2018 Chairman – CSR Committee Director

ANNEXURE IVCORPORATE SOCIAL RESPONSIBILITY (CSR)



IN `

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

SR. NO

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

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

AMOUNT OUTLAY

(BUDGET)

AMOUNT SPENT ON THE PROJECTS OR PROGRAMS SUB HEADS:

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

HEADS

CUMULATIVE EXPENDITURE

UP TO THE REPORTING

PERIOD

AMOUNT SPENT : DIRECT OR

THROUGH IMPLEMENTING

AGENCY

1 Promoting learning outcomes of under privileged students in night schools in Maharashtra Cl.(ii) promoting education Maharashtra-Mumbai

44,324

3,500 3,982

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

2 Promoting learning outcomes in 60 government primary schools in the backward blocks of Ramgarh and Kishangarh

Cl.(ii) promoting education Rajasthan - Alwar 2,624 3,289

3 Promoting Digital Literacy through Digishalas in government schools of Hoshangabad, Madhya Pradesh

Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2,774 3,058

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

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

3,120 3,538

Total 44,324 12,018 13,867

5 Program on improving access to water and sanitation in Odisha Cl.(i) Sanitation & Safe Drinking water Odisha 6,137 1,355 1,589

Total 6,137 1,355 1,589

6 Shwetdhara-Cattle Care Program to improve the productivity of milch animals and increase the income of small and marginal dairy farmers

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

200,320

16,391 17,989

7 Promoting Financial Inclusion by deploying interoperable Financial Inclusion Devices and organising Financial Literacy Programs

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

PAN India 142,704 143,965

Total 200,320 159,095 161,954

8 Research & studies on various social and economic issues directly impacting welfare of people Various clauses of Schedule VII PAN India 124,219 35,717 40,796

Total 124,219 35,717 40,796

Total Direct Expense of Project & Programmes (A) 208,185 218,206

Overhead Expense (B) 2,348 2,651

Total (A) + (B) 375,000 210,533 220,857

*IDFC Foundation, a wholly owned subsidiary of the IDFC Limited, is an implementing agency of IDFC Limited and its group Companies and engaging Corporate Social Responsibility (CSR) activities as per the CSR policy adopted by IDFC & its group companies in line with the Schedule VII of the act. The Company is primarily focussing on CSR activities as well defined projects or programmes that would include promoting and development of (a) livelihoods, (b) rural development projects, (c) promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII and (i) Others, with the help of various partners.

ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)



IN `

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

SR. NO



AMOUNT OUTLAY

(BUDGET)


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

HEADS


UP TO THE REPORTING

PERIOD

AMOUNT SPENT : DIRECT OR

THROUGH IMPLEMENTING

AGENCY


44,324

3,500 3,982

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*


Cl.(ii) promoting education Rajasthan - Alwar 2,624 3,289


Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 2,774 3,058



3,120 3,538

Total 44,324 12,018 13,867

5 Program on improving access to water and sanitation in Odisha Cl.(i) Sanitation & Safe Drinking water Odisha 6,137 1,355 1,589

Total 6,137 1,355 1,589



200,320

16,391 17,989



PAN India 142,704 143,965

Total 200,320 159,095 161,954

8 Research & studies on various social and economic issues directly impacting welfare of people Various clauses of Schedule VII PAN India 124,219 35,717 40,796

Total 124,219 35,717 40,796

Total Direct Expense of Project & Programmes (A) 208,185 218,206

Overhead Expense (B) 2,348 2,651

Total (A) + (B) 375,000 210,533 220,857



INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF IDFC FINANCIAL HOLDING COMPANY LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of IDFC Financial Holding Company Limited (“the Company”), which

comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, the Cash Flow Statement for the year then

ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the

Act”) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial

performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including

the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act

for safeguarding 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 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

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

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and

matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other

applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and

pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial

statements. The procedures selected depend on the 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.

7. 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements

give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting

principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its profit and its cash flows for

the year ended on that date.

Other Matter

9. The financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants

under the Companies Act, 2013 who, vide their report dated April 28, 2017, expressed an unmodified opinion on those financial

statements.

Report on Other Legal and Regulatory Requirements

10. As required by ‘the Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub-section

(11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of

the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure

B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. 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.



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

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(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 knowledge and belief and according to the information and explanations given to us :

i. The Company does not have any pending litigations as at March 31, 2018 which would impact its financial position;

ii. The Company has long-term contracts as at March 31, 2018 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at March 31, 2018.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

For Price Waterhouse & Co Chartered Accountants LLPFirm Registration Number: 304026E/E-300009

Sharad Vasant(Partner) Membership Number : 101119

Mumbai | April 27, 2018.


ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date to the members of IDFC Financial Holding Company Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC Financial Holding Company Limited (“the Company”)

as of March 31, 2018 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 Controls2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control

over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of 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 Act.

Auditors’ Responsibility3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the 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.

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

Meaning of Internal Financial Controls Over Financial Reporting6. 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 Reporting7. 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.

Opinion8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and

such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.


Sharad Vasant(Partner) Membership Number : 101119

Mumbai, April 27, 2018.


ANNEXURE “B” TO THE INDEPENDENT AUDITOR’S REPORT

Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members IDFC Financial Holding Company

Limited on the financial statements as of and for the year ended March 31, 2018

i. The Company does not hold any fixed assets during the year ended March 31, 2018. Therefore, the provisions of Clause 3(i) of the Order are not applicable to the Company.

ii. The Company does not hold any inventory and hence, the provisions of Clause 3(ii) of the said Order are not applicable to the Company.

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 Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loan or provided any guarantee or security in connection with any loan taken by parties covered under Section 185 of the Act. Therefore, the provisions of Section 185 are not applicable to the Company. The Company is registered as a Non-Operative Financial Holding Company with the RBI. Thus, the provision of Section 186 except sub-section (1) of the Act is not applicable to the Company. In our opinion and according to the information and explanations given to us, during the year, the Company has not made any investments through more than two layers of investment companies as mentioned in sub section (1) of Section 186 of the Act

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, service-tax, duty of customs, and duty of excise or value added tax or goods and service tax which have not been deposited on account of any dispute.

viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him within the meaning of section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is required to, and has been registered under Section 45-IA of the Reserve Bank of India Act, 1934 as a Non-Operative Financial Holding Company (NOFHC).

For Price Waterhouse & Co Chartered Accountants LLP

Firm Registration Number: 304026E/E-300009

Sharad Vasant

(Partner)

Membership Number : 101119



BALANCE SHEET AS AT MARCH 31, 2018

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

NOTES ` `

EQUITY AND LIABILITIES

Shareholders’ funds

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

(b) Reserves and surplus 4 911,750,593 307,274,976

91,204,150,593 90,599,674,976

Current liabilities

(a) Trade payables 5

(i) Total outstanding dues of micro enterprises and small enterprises and - -

(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises

2,053,965 2,131,250

(b) Other current liabilities 6 22,694 10,000

(c) Short term provisions 7 910,595 862,705

TOTAL 91,207,137,847 90,602,678,931

ASSETS

Non current assets

(a) Non current investments 8 89,840,715,289 89,840,715,289

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

Current assets

(a) Cash and bank balance 10 1,040,190,617 737,598,776

(b) Short term loans and advances 11 9,000 -

(c) Other current assets 12 326,067,006 24,208,931

TOTAL 91,207,137,847 90,602,678,931

See accompanying notes forming part of the financial statements.

This is the Balance Sheet referred to in our report of even date.

For Price Waterhouse & Co Chartered Accountants LLP(Registration No: 304026E/E-300009)


Sharad VasantPartner Membership Number: 101119

Vinod RaiDirector




This is the Statement of Profit & Loss referred to our report of even date.




Vinod RaiDirector



STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2018



NOTES ` `

I INCOME

Revenue from operations 13 2,026,864,270 1,113,220,707

Other income 14 - 1,150,000

TOTAL INCOME (I) 2,026,864,270 1,114,370,707

II EXPENSES

Other expenses 15 3,828,453 3,561,826

TOTAL EXPENSES (II) 3,828,453 3,561,826

III PROFIT BEFORE TAX (I - II) 2,023,035,817 1,110,808,881

IV TAX EXPENSE

Current tax 19,028,000 17,246,000

TOTAL TAX EXPENSES (IV) 19,028,000 17,246,000

V PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS (III - IV) 2,004,007,817 1,093,562,881

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

Basic (`) 19 0.22 0.12

Diluted (`) 0.22 0.12



CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2018



NOTES ` `

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 2,023,035,817 1,110,808,881

Adjustments for :

Dividend received from subsidairies 13 (1,957,617,239) (1,062,209,482)

Interest income from term deposits 13 (69,247,031) (51,011,225)

Interest received on term deposits 67,388,958 33,861,911

Operating profit before working capital changes 63,560,505 31,450,085

Changes in working capital:

Adjustments for increase / (decrease) in operating liabilities:

Trade payables (77,285) (427,750)

Other current liabilities 12,694 (10,000)

Adjustments for (increase) / decrease in operating assets :

Short term loans and advances (9,000) -

Other current assets (300,000,000) -

(236,513,086) 31,012,335

Direct Taxes paid (18,980,112) (16,382,939)

NET CASH FROM / (USED IN) OPERATING ACTIVITIES (A) (255,493,198) 14,629,396

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of long term investments- subsidiaries - (2,442,667,348)

Dividend received from subsidairies 1,957,617,239 1,062,209,482

Term deposits placed (3,552,300,000) (1,814,275,000)

Term deposits matured 3,250,400,000 1,518,375,000

NET CASH FROM / (USED IN) INVESTING ACTIVITIES (B) 1,655,717,239 (1,676,357,866)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issue of shares - 2,442,400,000

Dividend paid to shareholders (1,399,532,200) (781,865,000)

NET CASH FROM / (USED IN) FINANCING ACTIVITIES (C) (1,399,532,200) 1,660,535,000

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) 691,841 (1,193,470)

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

Cash and cash equivalents as at the end of the year. 10 890,617 198,776

691,841 (1,193,470)

Reconcialition :

Cash & Cash equivalents as per Balance Sheet (refer note no. 10) 1,040,190,617 737,598,776

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

1,039,300,000 737,400,000

NET CASH & CASH EQUIVALENTS AS DEFINED IN AS 3 CASH FLOW STATEMENTS 890,617 198,776


This is the Cash Flow Statement referred to our report of even date.




Vinod RaiDirector



NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2018


01 BACKGROUND IDFC Financial Holding Company Limited (‘the Company’) is a public company, incorporated in India. The Company is a wholly

owned subsidiary of IDFC Limited. The Company has received certificate of registration for 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 POLICIESA. 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 settlement date basis. Profit / loss on sale of investments is determined based on the weighted average cost of 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 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 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, 2018 AS AT MARCH 31, 2017

NUMBER ` NUMBER `

Authorised shares

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

Issued, subscribed & fully paid-up shares

Equity shares of ` 10 each 9,029,240,000 90,292,400,000 9,029,240,000 90,292,400,000

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

TOTAL 90,292,400,000 90,292,400,000

(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 9,029,240,000 90,292,400,000 8,785,000,000 87,850,000,000

Issued during the year - - 244,240,000 2,442,400,000

Outstanding at the end of the year 9,029,240,000 90,292,400,000 9,029,240,000 90,292,400,000

(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. The dividend proposed by the Board of Directors is subject to the approval of shareholders at the

ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the

Balance Sheet date as per the provisions of revised Accounting Standard 4.

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

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

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

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

Equity shares


NUMBER % OF HOLDING NUMBER % OF HOLDING

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



04 RESERVES & SURPLUS

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

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

Opening balance 285,588,000 5,588,000

Add: Transferred from surplus in Statement of Profit and Loss 520,000,000 280,000,000

Closing balance 805,588,000 285,588,000

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

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

Profit for the year 2,004,007,817 1,093,562,881

Less: Transfer to special reserve u/s 45IC 520,000,000 280,000,000

Less: Interim dividend paid 1,399,532,200 781,865,000

Closing balance 106,162,593 21,686,976

TOTAL 911,750,593 307,274,976

05 TRADE PAYABLES

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Total Outstanding dues of micro enterprises and small enterprises - -

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

- Provision for expenses 2,053,965 2,131,250

TOTAL 2,053,965 2,131,250

There were no dues payable to micro and small enterprises as defined under The Micro, Small and Medium Enterprise Development Act, 2006 during the year. The information regarding micro, small and medium enterprise have been determined to the extent such parties have been identified on the basis of information available with the Company.

06 OTHER CURRENT LIABILITIES

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Statutory dues 22,694 10,000

TOTAL 22,694 10,000

07 SHORT TERM PROVISIONS

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Provision for income tax [net of advance tax ` 29,845,406 (Previous Year ` 10,865,295)] 910,595 862,705

TOTAL 910,595 862,705



08 NON CURRENT INVESTMENTS (AT COST)

FACE VALUE

QUANTITY AS ATMARCH 31, 2018

QUANTITY AS ATMARCH 31, 2017

(`) ` `

Trade Investments

Investment in subsidiaries

Quoted Equity Shares

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

Unquoted Equity Shares (Fully paid)

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

IDFC Asset Management Company Limited 10 2,679,045 8,737,248,954 2,679,045 8,737,248,954

IDFC AMC Trustee Company Limited 10 50,000 789,023 50,000 789,023

IDFC Infrastructure Finance Limited 10 440,000,000 4,400,000,000 440,000,000 4,400,000,000

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

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

TOTAL 89,840,715,289 89,840,715,289

(a) Aggregate amount of quoted investments

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

Market value 85,112,224,830 106,592,501,212

(b) Aggregate amount of unquoted investments

Cost 19,539,994,844 19,539,994,844

09 LONG TERM LOANS AND ADVANCES

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

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

TOTAL 155,935 155,935

10 CASH AND BANK BALANCE

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Cash and cash equivalents [see note (a)]

Balance with bank:

In current account 890,617 198,776

Others

Balance with bank:

In deposit accounts 1,039,300,000 737,400,000

TOTAL 1,040,190,617 737,598,776

(a) Cash & Cash equivalents as referred in Cash Flow Statement.

11 SHORT TERM LOANS AND ADVANCES

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Balances with government authorities 9,000 -

TOTAL 9,000 -



13 INCOME FROM OPERATIONS

FOR THE YEAR ENDED MARCH 2018


` `

Interest on deposits 69,247,031 51,011,225

Dividend from subsidiary companies 1,957,617,239 1,062,209,482

TOTAL 2,026,864,270 1,113,220,707

14 OTHER INCOME



` `

Miscellaneous income - 1,150,000

TOTAL - 1,150,000

15 OTHER EXPENSES



` `

Other legal & professional fees 649,422 400,640

Directors sitting fees 575,000 500,000

Commission to directors 1,166,667 2,000,000

Corporate social responsibility & donations 375,000 50,000

Service tax / GST written off 542,843 358,816

Miscellaneous expenditure 118,771 42,370

Auditors' remuneration [see note (a)] 400,750 210,000

TOTAL 3,828,453 3,561,826

(a) Breakup of Auditor's remuneration

Audit fee 50,000 50,000

Tax audit fees 50,000 50,000

Other services 300,000 110,000

Out of pocket expense 750 -

TOTAL 400,750 210,000

16 PROVISIONS & CONTINGENCIES a. There are no litigations claims made by the company or pending on the company.

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

17 The Company is a non operating holding company of the group holding investment in a banking company and other financial services entities of the group regulated by RBI or other financial sector regulators. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’.

12 OTHER CURRENT ASSETS

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Interest accrued on deposits 26,067,006 24,208,931

Other Advances 300,000,000 -

TOTAL 326,067,006 24,208,931



18 As per Accounting Standard 18 on ‘Related Party Disclosures’, the related parties of the Company are as follows:

Holding Company :

IDFC Limited

Subsidiary Company:

(a) Direct

IDFC Alternatives Limited

IDFC Asset Management Company Limited

IDFC AMC Trustee Company Limited

IDFC Bank Limited

IDFC Infrastructure Finance Limited

IDFC Securities Limited

IDFC Trustee Company Limited

(b) Through subsidiaries

IDFC Capital (USA) Inc.

IDFC Capital (Singapore) Pte. Ltd.

IDFC Investment Managers (Mauritius) Limited

IDFC Securities Singapore Pte. Limited

IDFC Bharat Limited

Key Management Personnel

Chief Financial Officer: Mr. Bipin Gemani (resigned w.e.f 12th January, 2018)

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

NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP

PARTICULARS CURRENT YEAR PREVIOUS YEAR

` `

Holding Company

IDFC Limited Issue of shares - 2,442,400,000

Interim dividend paid 1,399,532,200 781,865,000

Subsidiary:

IDFC Bank Limited Balance in Current Accounts 878,886 187,631

Balance in Deposit Accounts 1,039,300,000 737,400,000

Interest Income 69,247,031 51,011,225

Interest accrued 26,067,006 24,208,931

Dividend received 1,348,134,501 449,378,167

IDFC Asset Management Company Limited Dividend received 609,482,738 612,831,315

19 In accordance with Accounting Standard 20 on ‘Earnings Per Share’:

PARTICULARS CURRENT YEAR PREVIOUS YEAR

Profit after tax (`) 2,004,007,817 1,093,562,881

Weighted average number of equity shares (Nos.) 9,029,240,000 8,905,447,123

Basic & diluted earnings per share (`) 0.222 0.123

Nominal value per share (`) 10 10



20 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).

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, 2018 AS AT MARCH 31, 2017

CRAR (%) 101.12% 100.82%

CRAR - Tier I Capital (%) 101.12% 100.82%

CRAR - Tier II Capital (%) - -

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

Amount raised by issue of Perpetual Debt Instruments - -

(b) Details of Investments are set out below:

I Value of Investments


` `

(i) Gross Value of Investments

(a) In India 89,840,715,289 89,840,715,289

(b) Outside India - -

89,840,715,289 89,840,715,289

(ii) Provision for depreciation

(a) In India - -


- -

(iii) Net Value of Investments

(a) In India 89,840,715,289 89,840,715,289


89,840,715,289 89,840,715,289

II Movement of provisions held towards depreciation on investments.

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

(c) Asset Liability Management Maturity pattern of certain items of assets and liabilities as on March 31, 2018

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

Foreign Currency assets

- - - - - - - - -

Foreign Currency liabilities

- - - - - - - - -



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

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

Foreign Currency assets

- - - - - - - - -

Foreign Currency liabilities

- - - - - - - - -

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


CATEGORY MARKET VALUE / BREAKUP VALUE / FAIR VALUE / NAV

BOOK VALUE NET OF PROVISION

MARKET VALUE / BREAKUP VALUE / FAIR VALUE / NAV


` ` ` `

1. Related Parties - subsidiaries 100,689,528,083 89,840,715,289 121,873,360,037 89,840,715,289

2. Other than related Parties - - - -

(e) Exposure to Capital Market

PARTICULARS AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

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

89,840,715,289 89,840,715,289

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

- -

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

- -

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

- -

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

- -

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

- -

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

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

TOTAL EXPOSURE TO CAPITAL MARKET 89,840,715,289 89,840,715,289



(f) Provisions and contingencies

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

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

` `

Provisions for depreciation on Investment - -

Provision towards Non Performing Advances (NPA) - -

Provision made towards Income tax 19,028,000 17,246,000

Other Provision and Contingencies (with details) - -

Provision for Standard Assets - -

(g) Penalties / fines imposed by RBI

During the year ended March 31, 2018 there was no penalty imposed by RBI (Previous Year ` Nil).

(h) Considering the nature of the business of the entity and transactions entered during the year ended March 31, 2018 and March 31, 2017 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) Details of financing of parent company product

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

(vi) Unsecured Advances

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

(viii) Draw Down from Reserves

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

(x) Sector - wise NPAs.

(xi) Movement of NPAs.

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

(xiii) Off-balance sheet SPVs sponsored

(xiv) Disclosure of Complaints.

21 DISCLOSURES RELATING TO SPECIFIED BANK NOTES (‘’SBN’’): (a) The disclosures relating to Specified Bank Notes (‘’SBN’’) is not applicable to the Company during the year.

(b) In previous year, the Company did not held and transacted in SBN during the period November 08, 2016 to December 30, 2016.

*Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated the 8th November, 2017.



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

` 375,000 (Previous Year ` 50,000).

2. Amount spent towards CSR during the year and recognised as expense in the statement of profit and loss on CSR related activities is ` 375,000 (Previous Year ` 50,000), which comprise of following:

FOR THE YEAR ENDED MARCH 31, 2018 FOR THE YEAR ENDED MARCH 31, 2017

NATURE OF ACTIVITIES IN CASH YET TO BE PAID IN CASH

(I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN CASH

(I.E. PROVISION)

TOTAL

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

On purpose other than above 375,000 - 375,000 50,000 - 50,000

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


Vinod RaiDirector



IDFC FOUNDATION

U93000DL2011NPL215231

Dr. Rajiv B. Lall (Chairman)

Dr. Ashok Gulati

Ms. Sonalde B. Desai

Mr. Vikram Limaye


Mr. Sunil Kakar

Price Waterhouse & Co.


IDFC Bank Limited

6th Floor, The Capital Court

Olof Palme Marg, Munirka

New Delhi – 110067

Tel : +91 11 4331 1000

Fax : +91 11 2671 3129

Website www.idfcfoundation.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Eighth Annual Report together with the audited financial statements for the financial year

ended March 31, 2018.

OPERATIONAL REVIEW

IDFC Foundation (“the Company”), a not-for-profit company, within the meaning of Section 8 of the Companies Act, 2013 (erstwhile

Section 25 of the Companies Act, 1956), was incorporated in India on March 4, 2011. IDFC Institute (a division of IDFC Foundation) has

been set up as a research-focused think / do tank to investigate the economic and spatial dimensions of India’s ongoing transition from a

low-income state-led country to a prosperous market-based economy.

After the enactment of Companies Act, 2013, the focus of the Company has been re-aligned as per Section 135 of the Companies Act,

2013 read with CSR Rules 2014. IDFC Foundation, as implementing agency, carries out CSR activities as per CSR policy adopted by IDFC

and its group Companies in line with the schedule VII of the Companies Act, 2013. The Company primarily focusses on CSR activities

as well defined projects or programmes that include promoting and development of (a) livelihoods, (b) rural development projects,

(c) promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental

sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII of the Companies Act,

2013 and (i) Others;

During the FY 2017-18, the Company focused on activities which include: a) livelihood enhancement through financial inclusion; b) rural

development through dairy farming – shwetdhara cattle care program; c) education for children and youth from lower income families;

and d) support for research institutions, in particular, IDFC Institute.

¾ Livelihood enhancement through financial inclusion: Millions of poor people in rural India are dependent on social entitlements

like pensions and wages. In order to ensure efficient transfer of these entitlements, the Government has launched a number of

initiatives including Pradhan Mantri Jan-Dhan Yojana (PMJDY) and Direct Benefit Transfers (DBT). However, large sections of the

rural population are forced to travel 10-15 kms to reach the nearest bank and access their entitlements.

The Company, through its Financial Inclusion initiative, has been complementing government efforts to universalize access to social

entitlements. The Company has deployed interoperable Financial Inclusion Devices in underserved and backward areas across

24 states and 3 Union Territories. Using these devices, community members in over 30,000 villages have been accessing various

banking services like withdrawals, deposits and remittances within minutes and without stepping out of their villages.

In addition to providing large scale access to financial services, the initiative has also resulted in the creation of over 9000 social

entrepreneurship opportunities across the country in the form of Mitras. The Mitras earn a crucial income by providing services to

the community members through the Financial Inclusion Devices.

In addition, the Company in partnership with National Institute of Securities Markets (promoted by SEBI) has conducted a number

of Financial Literacy programs. The participants gained not only better knowledge of personal finance but also skills to manage

their resources. These include awareness about the need to save, ways to access formal credit, protect wealth and prepare for

financial exigencies.

¾ Shwetdhara - cattle care program: Dairy farming is an important source of income for around 70 million households in rural India.

Poorer households including small and marginal farmers prefer dairy farming to other farm based activities due to its superior cash

flows. But low productivity of milch animals continues to be a major challenge. A number of reasons have contributed towards

low productivity. These include inadequate knowledge of good dairy farming practices among farmers, low quality of dairy

animals, suboptimal access to veterinary and Artificial Insemination services. Due to the low productivity of milch animals, the poor

households are trapped in a low income cycle.

The ‘Shwetdhara-cattle care program’ has been focussing on increasing the income of small and marginal dairy farmers in the states

of Madhya Pradesh and Karnataka. As part of the program, the Company established Dairy Vikas Kendras in rural and underserved

areas.

The Dairy Vikas Kendras acted as an important source of information for the farmers in nearby villages. The Foundation also

deployed a trained para-vet in each of the centres. The para-vets provided the farmers a range of dairy related services including

Artificial Insemination, pregnancy diagnosis, infertility treatment, deworming, deticking etc. at their doorstep. The Foundation also

encouraged farmers to adopt fodder cultivation by establishing demonstration fodder plots.

The Shwetdhara program has contributed immensely in strengthening the veterinary infrastructure in project areas. More than half a

million treatments and around 40,000 Artificial Insemination services have also been done till date.

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

BOARD'S REPORT

¾ Education initiatives for children and youth from lower socio-economic strata: The Company has helped thousands of children

and young people in Rajasthan, Madhya Pradesh and Maharashtra gain good quality education. In Alwar district of Rajasthan, the

Company worked with teachers and School Management Committees of 60 Government primary schools to improve learning

outcomes and leadership skills of students. Through the ‘Night School Transformation programme’, the Company has been

supporting 10 night schools located in Mumbai suburbs. The Company also adopted 18 Government Schools in Hoshangabad district

(Madhya Pradesh) to promote ‘digital literacy’ among students. A Digishala was set up in each of these schools, which included a

full-fledged computer lab and a trained local instructor.

¾ Research & Studies: IDFC Institute is an independent, not-for-profit, think/do tank, focusing primarily on two broad areas of

research/action : a) job creation in the context of India’s transition from farm to non-farm, rural to urban and informal to formal

economic activity; and b) improving the delivery of essential services (such as infrastructure). The Institute produces evidence-

based, actionable research and diagnostic tools that can contribute towards bringing about meaningful change. All of the Institute’s

work is in the public domain and freely accessible through the website www.idfcinstitute.org

This year, as part of its research program on urbanization, IDFC Institute released key findings from ‘Safety Trends and Reporting

of Crime’ (SATARC), a 4-city, 21,000 household, crime victimization survey that measures the gap between the true extent of crime

and official crime records. The Ministry of Home Affairs’ Bureau of Police Research & Development (BPR&D) will now roll out a

similar survey covering 100+ police districts across the country. IDFC Institute has been invited to join the Executive Committee on

Crime Victimisation Survey (CVS) to provide inputs on the launch of the first pan-India CVS. IDFC Institute’s research on alternative

urban definitions, and on rental and vacant housing were prominently featured in the Ministry of Finance’s Economic Survey 2016-17

and 2017-18. In August 2017, the IDFC Institute-NITI Aayog “Ease of Doing Business: An Enterprise Survey of Indian States” report

was launched by Nirmala Sitharaman and Ravi Shankar Prasad. The Survey covered 3,200 manufacturing firms and assessed the

business regulatory environment for manufacturing at the state level. In December 2017, Finance Minister Arun Jaitley launched a

book, “Aadhaar: A Biometric History of India’s 12-Digit Revolution” by Visiting Senior Fellow, Shankkar Aiyar.

During the year, the Company has received foreign grants from various agencies for carrying out charitable nature of activities i.e. (i)

spreading awareness on water and sanitation hygiene (WASH) among rural households in Madhya Pradesh and Karnataka; (ii) to develop

and test methodologies to access the impact of investment in infrastructure on employment in India; and (iii) to support ongoing

research and programmatic work aiming to enable the advancement of inclusive economies and market systems innovations in India.


(AMOUNT IN `)

PARTICULARS FOR THE YEAR ENDEDMARCH 31, 2018

FOR THE YEAR ENDEDMARCH 31, 2017

Total Income 390,903,118 178,446,442


Surplus 511,413 1,177,121



BOARD OF DIRECTORS

The Board of Directors oversee the management functions to ensure that these are effective and enhance Shareholder value. The Board’s

mandate inter alia is to have an oversight of the Company’s strategic direction, to review the performance, assess the adequacy of risk

management and mitigation measures, to ensure regulatory compliance as well as high standards of governance and safeguard interests

of all stakeholders. The Board comprises of four Directors with two of its Directors being Independent. The Independent Directors (IDs)

are eminent personalities with significant expertise in the fields of agriculture, education and economy. None of the Directors are related

to any other Director or employee of the Company.

BOARD MEETINGS

The Board of Directors of the Company meets at regular intervals to discuss and decide on CSR & charitable activities and strategy apart

from the regular board business. During the year, the Board met six (6) times on April 26, 2017, June 30, 2017, July 25, 2017, October 23,

2017, January 17, 2018 and March 16, 2018 and the intervening period between two Board meetings was well within the maximum gap of

180 days as prescribed under the Companies Act, 2013 for the Section 8 Company. The attendance of the Board Meetings held during

FY18 is given in the Table 1.


BOARD'S REPORT

COMMITTEES OF THE BOARD

The Board Committees play a crucial role in the governance structure of the Company and help to delegate particular matters that

require greater and more focused attention. The Chairman of the respective Committee informs the Board about the summary of the

discussions held in the Committee Meetings. The minutes of the meetings of the Committee are placed before the Board for review.

Majority of the members of the Committee consist of IDs. The Board Committee also request special invitees to join the meeting,

wherever appropriate.

The Board has currently established the Audit Committee

AUDIT COMMITTEE

The Audit Committee comprises of three Members, majority being IDs. The Committee is headed by Dr. Ashok Gulati, Ms. Sonalde B.

Desai and Mr. Sunil Kakar as its members. During the year, the Audit Committee met five (5) times on April 26, 2017, June 30, 2017, July

25, 2017, October 23, 2017 and January 17, 2018. The gap between any two consecutive meetings was within the period prescribed under

the Companies Act, 2013. The Committee meets, inter alia, to review the accounts of the Company, transactions with related party, and

to discuss the audit findings and recommendations of the internal and statutory auditors. The composition and attendance details of the

Audit Committee Meetings held during FY18 is given in Table 1.

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

Table 1 shows attendance of Directors at the Board Meetings and Audit Committeee meeting(s) held for the year ended March 31, 2018.

Attendance is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number

of meeting(s) required to be attended.

Table 1

NAME OF MEMBER DIN CATEGORY BOARD MEETING AUDIT COMMITTEE

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

Dr. Ashok Gulati 07062601 ID 5/6 4/5

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

Mr. Vikram Limaye* 00488534 Director 1/2 -

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

* Resigned from the Board w.e.f. July 15, 2017

DIRECTORS / KEY MANAGERIAL PERSONNEL

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

1. Dr. NS Rajan - Chief Executive Officer (“CEO”)

2. Mr. Gopal Chandra Mondal - Chief Financial Officer (“CFO”)

RETIREMENT BY ROTATION


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 (DIN: 03055561) at the ensuing AGM.


As per the provisions of the Companies Act, 2013, Independent Directors (“IDs”) are not liable to retire by rotation and the terms of

appointment of Independent Directors are governed by the provisions of Companies Act, 2013. The Company has received a declaration

from IDs, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the financial year,

that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the

Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors”

as per Schedule IV of the Act.

STATUTORY AUDITORS

The Shareholders of the Company at their meeting held on August 3, 2017 had approved the appointment of M/s Price Waterhouse

& Co. Chartered Accountants LLP (PWC) (FRN 304026E/E300009) as Statutory Auditors for a period of five (5) years, to hold office

from the conclusion of the Seventh Annual General Meeting until the conclusion of the Twelfth Annual General Meeting of the Company

to be held for FY 2022, subject to ratification by the Members at every Annual General Meeting. PWC has confirmed that they are not


BOARD'S REPORT

disqualified from continuing as Statutory Auditors of the Company for FY19. In accordance with the Companies Amendment Act, 2017,

enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of the Statutory Auditors is not required to be ratified at

every Annual General Meeting.

RELATED PARTY TRANSACTIONS

As per Section 177, read with Section 188 of the Act, the Audit Committee of the Board of Directors approves the related party

transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary

course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related

Party Transactions” is also uploaded on the website of the Company. Since all related party transactions entered into by the Company

were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company. As per

Accounting Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are

also included in the Notes to Accounts.

JOINT VENTURES / ASSOCIATE COMPANIES

As on March 31, 2018, the Company has following joint ventures and associate companies:-

Joint Venture

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

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

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

In addition, iDeCK, a joint venture of the Company, has one subsidiary and one JV company namely India PPP Capacity Building Trust

and Rail Infrastructure Development Company (Karnataka) Limited respectively.

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

associates / joint ventures companies.

PARTICULARS OF EMPLOYEES

The Company had 15 employees as on March 31, 2018. The information required pursuant to section 197 read with Rule 5 of The

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be

provided upon a request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and other entitled

thereto, excluding information on employees’ particulars which is available for inspection by the Members at the Registered Office of the

Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any Member is

interested in obtaining copy thereof, such Member may write to the Company in this regard.

PUBLIC DEPOSITS

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

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

FOREIGN EXCHANGE EXPENDITURE AND EARNINGS

The particulars regarding foreign exchange expenditure and earnings are furnished in Note no. 20 and 21 respectively in the Notes

forming part of the Financial Statements.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Since the Company does not own any manufacturing facility, the disclosure of information on matters required to be disclosed in terms

of Section 134(3)(m) are not applicable and hence not given.

INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

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


As per Section 134(3)(l) of Companies Act, 2013, there have been no reportable changes and commitments, affecting the financial

position of the Company that has occurred during the period from March 31, 2018 till the date of this report.


BOARD'S REPORT




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 Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create

awareness on this policy. No instances of Sexual Harassment were reported during the period under review.



(a) in the preparation of financial statements for the year ended March 31, 2018, 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, 2018 and of the income

and expenditure of the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the

provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

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

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

were adequate and operating effectively.


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

ACKNOWLEDGMENTS

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

companies and also express their warm appreciation to all the employees of the Company for their commendable teamwork,

professionalism and contribution during the year.

The Directors extend their sincere thanks to all the implementing partners of the Company for their support.

FOR AND ON BEHALF OF DIRECTORS

Dr. Rajiv B. Lall

Chairman

Mumbai | July 16, 2018


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

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

PART “A”: SUBSIDIARIES

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

1 Sl. No./CIN

NA

2 Name of the subsidiary3 The date since when subsidiary was acquired4 Reporting period for the subsidiary concerned, if different from the holding company's reporting period5 Reporting currency and exchange rate as on the last date of the relevant Financial year in the case of foreign

subsidiaries6 Trust's capital7 Reserves & surplus8 Total assets9 Total liabilities 10 Investments11 Turnover12 Profit before taxation13 Provision for taxation14 Profit after taxation15 Proposed Dividend16 % of unit holding

Note: (i) There are no subsidiaries which are yet to commence operations. (ii) The 100% subsidiary i.e. India PPP Capacity Building Trust (I-Cap) was transferred to Infrastructure Development Corporation (Karnakata) Limied (IDeCK) w.e.f.

April 27, 2017.

PART “B”: ASSOCIATES AND JOINT VENTURES

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

SL. NO.

NAME OF ASSOCIATES/JOINT VENTURES DELHI INTIGRATED MULTI MODAL

TRANSIT SYSTEM LIMITED

INFRASTRUCTURE DEVELOPMENT CORPORATION (KARNATAKA)

LIMITED(IDECK)*

RAIL INFRASTRUCTURE

DEVELOPMENT COMPANY

(KARNATAKA) LIMITED

(THROUGH IDECK)*

INDIA PPP CAPACITY

BUILDING TRUST (THROUGH IDECK)

1 Latest audited Balance Sheet Date March 31, 2017 March 31, 2018 March 31, 2018 March 31, 2018

2 The date since when Associate/Joint Ventures was acquired March 23, 2011 March 23, 2011 March 23, 2011 March 23, 2011

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

50% 49.49% 24.71% 49.49%

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

Amount of Investment in Associates/Joint Venture 147,289,740 154,832,554 123,725 760,452

Extend of Holding % 50% 49.49% 24.71% 49.49%

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

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

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

458,184,322 331,834,386 19,723,819 773,557

7 Profit / (Loss) for the year 108,123,791 49,845,411 10,394,926 26,480

i. Considered in Consolidation 54,061,896 24,668,474 2,568,586 13,105

i. Not Considered in Consolidation 54,061,896 25,176,937 7,826,340 13,375 Notes

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

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

* As per unaudited financial statement as on March 31, 2018**Subsidiary of Infrastructure Development Company (Karnataka) Limited w.e.f. April, 2017.

For and on behalf of the Board of Directors ofIDFC Foundation

Rajiv B. LallDirector

Sunil KakarDirector

Place : Mumbai

Date : July 16, 2018Gopal Chandra MondalChief Financial Officer

ANNEXURE IFORM AOC-I


As on the financial year ended on March 31, 2018[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

REGISTRATION AND OTHER DETAILS:

i) CIN U93000DL2011NPL215231

ii) Registration Date 04/03/2011

iii) Name of the Company IDFC FOUNDATION

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

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


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

PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

SR. NO.

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

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

IDFC Foundation receives CSR contribution from IDFC Limited and its group companies for carrying out CSR activities. The Company also receives foreign grants from various foreign donors for carrying out the charitable activities.

100

PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

SR.

NO.

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

ASSOCIATE

% OF SHARES

HELD

APPLICABLE

SECTION

1 IDFC Limited L65191TN1997PLC037415 Holding 100 Section 2(46)

2. Delhi Integrated Multi Modal Transit System Ltd.

U60232DL2006PLC148406 Joint Venture 50 Section 2(6)

3. Infrastructure Development Corporation (Karnataka) Ltd.

U45203KA2000PLC027382 Joint Venture 49.49 Section 2(6)

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

U60100KA2000PLC028171 Associate* 24.71 Section 2(6)

5. India PPP Capacity Building Trust Joint Venture** 49.49 Section 2(87)

6. Uttarakhand Infrastructure Development Company Limited (Under Liquidation)

U65993UR2002SGC027065 Joint Venture 50.44 Section 2(6)

*Joint venture of Infrastructure Development Company (Karnataka) Limited

**Subsidiary of Infrastructure Development Company (Karnataka) Limited w.e.f. April, 2017 due to transfer.

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


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

THE YEARDEMAT PHYSICAL TOTAL % OF TOTAL

SHARESDEMAT PHYSICAL TOTAL % OF TOTAL

SHARES

A. Promoters

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

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

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

C. Shares held by Custodian for GDRs & ADRs


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

ANNEXURE IIFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN



SR NO

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

DURING THE YEAR


COMPANY

%OF SHARES PLEDGED/



COMPANY

%OF SHARES PLEDGED/


1. IDFC Limited 13,000,000 100 NIL 13,000,000 100 NIL NIL

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

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

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

NOT APPLICABLE


I. INDEBTEDNESS


II. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

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

B. Remuneration to other directors: IN `

SR. NO.


RAJIVB LALL

VIKRAM LIMAYE

SUNIL KAKAR

ASHOK GULATI

SONALDE B DESAI

1. Independent Directors

Fee for attending Board & committee meetings NIL NIL NIL 262,500 233,000 495,500

Commission NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL

TOTAL (1) NIL NIL NIL 262,500 233,000 495,500

2. Non-Executive Directors

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

Commission NIL NIL NIL NIL NIL NIL

Others, please specify NIL NIL NIL NIL NIL NIL

TOTAL (2) NIL NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) NIL NIL NIL 262,500 233,000 495,500

Overall Ceiling as per the Act

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

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

SR. NO.

PARTICULARS OF REMUNERATION KEY MANAGERIAL PERSONNEL* TOTAL

CEO CFO

1. Gross salary

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

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

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

2. Stock Option NIL NIL NIL

3. Sweat Equity NIL NIL NIL

4. Commission NIL NIL NIL

– as % of profit

– others, specify

5. Others, please specify NIL NIL NIL

TOTAL (A) NIL NIL NIL

* The Remuneration of KMPs were paid from one of the associate company of the group

III. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: NIL



INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF IDFC FOUNDATION

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of IDFC Foundation (“the Company”), which comprise the

Balance Sheet as at March 31, 2018, the Statement of Income and Expenditure, 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

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)

with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position,

financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India,

including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,

2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act

for safeguarding 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 design,





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















standalone financial statements.

Opinion

8. 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 March 31, 2018, and its Surplus and its

cash flows for the year ended on that date.

Other Matter

9. The standalone financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered

accountants under the Companies Act, 2013 who, vide their report June 30, 2017, expressed an unmodified opinion on those


Our opinion is not qualified in respect of this matter.


10. This report does not contain a statement on the matters specified in paragraphs 3 and 4 of ‘the Companies (Auditor’s Report)

Order, 2016’ issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act as, in our opinion, and

according to the information and explanations given to us, the Order is not applicable in the case of the Company.







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 specified under Section

133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of

Directors, none of the directors is disqualified as on March 31, 2018 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 with reference to financial statements of the Company and the

operating effectiveness of such controls, refer to our separate Report in Annexure A.

(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 knowledge and belief and according to the information and

explanations given to us:

i The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its

standalone financial statements – Refer Note 26.

ii. The Company has long-term contracts as at March 31, 2018 for which there are no material foreseeable losses. The

Company did not have any derivative contracts as at March 31, 2018.

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

Company during the year ended March 31, 2018.

iv. The reporting on disclosure relating to Specified Bank Notes is not applicable to the Company for the year ended March

31, 2018 – Refer note 32.


Firm Registration Number: 304026E/ E-300009

Chartered Accountants

Heman Sabharwal

Partner

Membership Number - 093263

Gurugram | July 17, 2018



Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date to the members of IDFC Foundation on the

standalone financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of

the Act

1. We have audited the internal financial controls with reference to financial statements of IDFC Foundation (“the Company”) as of

March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that

date.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal

control over financial reporting criteria established by the Company considering the essential components of internal control

stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered

Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal

financial controls that were operating effectively for ensuring the orderly and efficient conduct of 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

Act.


3. Our responsibility is to express an opinion on the Company’s internal financial controls with reference to financial statements

based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over

Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the

Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and

both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial

statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system

with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference

to financial statements included obtaining an understanding of internal financial controls with reference to financial statements,

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.


Company’s internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

6. A Company’s internal financial controls with reference to financial statements 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 controls with reference to financial

statements 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 with reference to financial statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, 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 with reference to financial statements to future

periods are subject to the risk that the internal financial control controls with reference to financial statements may become

inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to

financial statements and such internal financial controls with reference to financial statements were operating effectively as

at March 31, 2018, 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.


Firm Registration Number: 304026E/ E-300009


Heman Sabharwal

Partner

Membership Number - 093263

Gurugram | July 17, 2018



NOTES

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017


Shareholders' funds

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

b. Reserves and surplus 4 47,973,760 47,462,347

Corpus donation 5 405,682,679 551,553,479

Current liabilities

a. Trade payables 6

total outstanding dues to micro enterprises and small enterprises - -

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

7,760,523 72,657,439

b. Other current liabilities 7 200,789,480 189,256,906

c. Short-term provisions 8 6,681,000 6,723,580

TOTAL 798,887,442 997,653,751

ASSETS

Non-current assets

a. Fixed assets

Tangible assets 10(a) 9,844,982 11,378,404

Intangible assets 10(b) 27,686 45,614

b. Non-current investments 9 302,122,294 302,122,782

c. Long-term loans and advances 11 39,980,472 30,814,777

d. Other non-current assets 12 750,000 750,000

Current assets

a. Current investments 13 163,017,504 66,625,884

b. Trade receivables 14 8,250,000 -

c. Cash and Bank Balances 15 243,026,163 298,325,616

d. Short-term loans and advances 11 2,408,388 4,154,282

e. Other current assets 12 29,459,953 283,436,392

TOTAL 798,887,442 997,653,751

The accompanying notes are an integral part of these financial statements.


For Price Waterhouse & Co Chartered Accountants LLPFirm Registration Number : 304026E/E-300009

For and on behalf of the Board of Directors ofIDFC FOUNDATION

Heman SabharwalPartner Membership No. 093263

Rajiv B. LallDirectorDIN 00131782

Sunil Kakar Director DIN 03055561

Gopal Chandra MondalChief Financial Officer

Place : Gurugram

Date : July 17, 2018

Place : Mumbai



STATEMENT OF INCOME AND EXPENDITURE FOR THE YEAR ENDED MARCH 31, 2018

NOTES

(`)



(I) INCOME

Revenue from operations 16 359,112,437 125,005,000

Other income 17 31,790,681 53,441,442

TOTAL INCOME 390,903,118 178,446,442

(II) EXPENDITURE

Employee benefits expense 18 36,535,812 25,953,320

Depreciation and amortisation expense 10 3,027,755 2,438,593

Other expenses 19 350,828,138 148,877,408

TOTAL EXPENDITURE 390,391,705 177,269,321

(III) SURPLUS FOR THE YEAR FROM CONTINUING OPERATIONS [(I)- (II)] 511,413 1,177,121

(IV) EARNINGS PER SHARE (NOMINAL VALUE PER SHARE:`10 (MARCH 31, 2017: `10)

Basic (`) 24 0.04 0.09

The accompanying notes are an integral part of these financial statements.

This is the Statement of Income and Expenditure referred to our report of even date.







Place : Gurugram


Place : Mumbai




NOTES

(`)



A. CASH FLOW FROM OPERATING ACTIVITIES Surplus before tax 511,413 1,177,121

Adjustments for :

Depreciation and amortisation expense 3,027,755 2,438,593

Loss on fixed assets sold / scrapped / written off (net) - 3,631

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

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

Interest income from bank on deposits (20,324,899) (26,775,256)

Gains on redemption of non-current investments (1,536,090) -

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

Gains on sale of current investments (net) (9,207,602) (25,762,681)

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

Trade receivables (8,250,000) 125,391

Short-term loans and advances 1,745,894 (3,664,222)

Long-term loans and advances (6,642,095) -

Other current assets 251,079,865 (265,456,079)

Other bank balances 58,493,537 53,468,168

Adjustments for increase/(decrease) in operating liabilities

Corpus donation (145,870,800) (21,232,966)

Trade payables (64,896,916) 66,378,471

Other current liabilities 11,532,574 (7,767,751)

Short-term provisions (42,580) -

CASH GENERATED / (USED IN) FROM OPERATIONS 69,620,056 (226,030,822)

Net income- tax paid (2,523,600) (8,275,840)

NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (A) 67,096,456 (234,306,662)

B. CASH FLOW FROM INVESTING ACTIVITIESCapital expenditure on fixed assets (1,491,364) (12,463,090)

Proceeds from sale of fixed assets 14,959 257,236

Purchase of current investments (163,000,000) -

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

Proceeds from sale of current investments 75,815,982 231,000,000

Interest received from banks 24,758,051 8,988,631

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

Placed - (750,000)

NET CASH FLOW (USED IN) / FROM INVESTING ACTIVITIES (B) (63,902,372) 228,669,276

C. CASH FLOW FROM FINANCING ACTIVITIESNet cash flow used in financing activities (C) - -

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A)+(B)+(C) 3,194,084 (5,637,386)

Cash and cash equivalents as at the beginning of the year 15 793,784 6,431,170

Cash and cash equivalents as at the end of the year 15 3,987,868 793,784

3,194,084 (5,637,386)

The above Cash Flow Statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard 3 on “Cash Flow Statement”. The accompanying notes are an integral part of these financial statements.

This is the Cash Flow Statement referred to our report of even date.







Place : Gurugram


Place : Mumbai


NOTES FORMING PART OF THE FINANCIAL STATEMENTS


1 COMPANY OVERVIEW

IDFC Foundation (“the Company”), is 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. 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).

Pursuant to the enactment of Companies Act, 2013 and Section 135 of the Companies Act, 2013, the Company, as an implementing

agency, has been carrying out Corporate Social Responsibility (‘CSR’) activities as per CSR policy adopted by IDFC Limited and its

group Companies in line with the Schedule VII of the Companies Act, 2013. The Company primarily focuses on CSR activities as well

defined projects or programmes that includes promoting and development of (a) livelihoods, (b) rural development projects, (c)

promoting healthcare including preventive health care, (d) education, (e) community engagement/development, (f) environmental

sustainability, (g) disaster relief, (h) research and studies in all or any of the activities mentioned in Schedule VII and (i) Others.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India

under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1)

of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central

Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting

Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been

prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act,

1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria

set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of products and the time between

the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its

operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities.

2.2 USE OF ESTIMATES

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

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

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

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

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

2.3 INVESTMENTS

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

investments are made, are classified as current investments. All other investments are classified as long term investments.

Current investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However,

provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments, such

reduction being determined and made for each investment individually.

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

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

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



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

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

- Mobile phones - 2 years

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

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

method.

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

- The useful life, residual value and the depreciation method are reviewed at least at each financial year end.

2.7 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprises cash on hand, cash in bank and demand deposits with banks. Cash equivalents are short-

term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are

readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.8 EMPLOYEE BENEFITS

(i) Defined contribution plans

The Company’s contribution to provident fund and superannuation fund 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.

2.9 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 ‘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) Restricted grants received for which there are stipulations as to use are recognized in the Statement of Income and

Expenditure Account as income in the year of utilization and the unutilized amount is shown as ‘Liability for restricted

grants’ under other current liabilities as on balance sheet date. Restricted grants are subject to certain restrictions as set

out by the donor and agreed to by the Company when accepting the grant. If income generated from assets pertaining

to restricted grants is also subject to the same restrictions as the grant, then the same is also credited to restricted grants

and is recognized in the Statement of Income and Expenditure Account as income in the year of utilization.

(c) Fees from policy advocacy are recognised on accrual basis based on percentage of completion method.

(d) Interest income on savings bank accounts and fixed deposits are accounted on accrual basis.

(e) Profit on redemption of mutual funds/trust units is accounted on realisation basis.

(f) Dividend is accounted when the right to receive is established.

2.10 INCOME TAX

The Company is registered under Section 12A read with Section 12AA of the Income Tax Act, 1961 in India vide Commissioner

of Income Tax‘s communication reference letter no NQ.DIT(E)I2012-13/DEL-IR22385-27092012/803 (“Approval Letter”) and



accordingly, is exempt from paying income taxes on excess of revenue over expenses subject to compliance with the conditions

as stipulated in aforesaid Approval Letter. The Company is also registered under section 80G of the Income Tax Act, 1961.

2.11 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’. Initial direct costs incurred specifically for

operating leases are recognised as expense in the year in which they are incurred.

2.12 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.

2.13 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.

2.14 IMPAIRMENT OF ASSETS

Assessment is done at each balance sheet date as to whether there is any indication that an asset (tangible and intangible)

may be impaired. ‘The carrying values of assets / cash generating units at each balance sheet date are reviewed for

impairment, if any indication of impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess

amount. The impairment loss is recognised as an expense in the Statement of Income and Expenditure, unless the asset is

carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the

extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the

future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting

periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Income and

Expenditure, to the extent the amount was previously charged to the Statement of Income and Expenditure. In case of revalued

assets such reversal is not recognised.

2.15 GRANT EXPENDITURE

Grants disbursed to implementing partners are accounted for as expenditure on the basis of utilisation certificates / statements

submitted by the implementing partners in accordance with the terms of the agreements signed with respective implementing

partners and unutilised/ overspent amount as per such certificate is shown as amount recoverable/payable from/ to

implementing partners under loans and advances/ trade payables as at balance sheet date.

2.16 PROVISIONS AND CONTINGENCIES

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an

outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of

the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present

obligation at the Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the

existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not

wholly within the control of the Company or a present obligation that arises from past events where it is either not probable

that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.



03 SHARE CAPITAL


NUMBER (`) NUMBER (`)

AUTHORISED

Equity shares of ` 10 each 20,000,000 200,000,000 20,000,000 200,000,000

ISSUED, SUBSCRIBED AND FULLY PAID-UP


(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

(b) Terms / rights attached to equity shares:

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

vote per share and ranks pari passu.

As per clause X of Memorandum of Association (MoA) of the Company, in the event of liquidation of the Company, the holder

of equity shares will not be entitled to receive any of the remaining assets of the Company after distribution of all preferential

amounts. The amount remaining, if any, shall be given or transferred to such other Company having similar objects, to be

determined by the member of the Company at or before the time of dissolution or in default thereof by the High Court of

Judicature that has or may acquire jurisdiction in the matter.

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



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, 2018

AS ATMARCH 31, 2017

SURPLUS IN THE STATEMENT OF INCOME AND EXPENDITURE

Opening balance 47,462,347 46,285,226

Surplus for the year 511,413 1,177,121

TOTAL 47,973,760 47,462,347

05 CORPUS DONATION

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Opening balance 551,553,479 572,786,445

Received during the year 193,129,200 103,767,034

Utilised during the year (transferred to income)(see note 16) 339,000,000 125,000,000

CLOSING BALANCE 405,682,679 551,553,479



06 TRADE PAYABLES

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Trade payables

- total outstanding dues of micro enterprises and small enterprises [see note 31] - -

- total outstanding dues of creditors other than micro enterprises and small enterprises

Other trade payables * 7,760,523 72,657,439

TOTAL 7,760,523 72,657,439

* includes ` 5,733,012 (Previous year ` Nil) payable to implementing partners.


(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Amount payable to a related party [see note 25 (b)] 186,164,000 187,364,000

Statutory dues 925,419 1,387,835

Retention money - 364,551

Liability for restricted grants [see note 30 (a)] 13,576,611 -

Employee benefit payable 123,450 140,520

TOTAL 200,789,480 189,256,906

08 SHORT-TERM PROVISIONS

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Accrued variable pay 6,681,000 6,723,580

TOTAL 6,681,000 6,723,580

09 NON-CURRENT INVESTMENTS

FACE VALUE AS AT MARCH 31, 2018 AS AT MARCH 31, 2017

(`) QUANTITY (`) QUANTITY (`)

INVESTMENTS (AT COST) (UNQUOTED)

A. Investment in equity instruments fully paid up

- jointly controlled entities

Delhi Integrated Multi-Modal Transit System Limited 1,000 73,045 147,289,740 73,045 147,289,740

Infrastructure Development Corporation (Karnataka) Limited 10 4,948,996 154,832,554 4,948,996 154,832,554

Uttarakhand Infrastructure Development Company Limited ('UDeC') [see note (i)]

- - - - -

B. Other non-current investments - Investment in trust units

"India PPP Capacity Building Trust - partially paid [see note (ii)] [ ̀200 paid up (Previous year ̀ 200 paid up)]"

- - 2 488

NET TOTAL 302,122,294 302,122,782

Notes:

(i) During the year ended March 31, 2017, the Company received ` 1,636,499 as against its 49.9% shareholding in JV company i.e. Uttarakhand

Infrastructure Development Company Limited (UDeC) towards the final distribution of surplus assets under voluntary winding up of UDeC

as per Section 484 of the Companies Act, 1956. Accordingly loss on disposal of long-term investments of ` 63,501 has been charged in the

Statement of Income and Expenditure. [Also see note 19]

(ii) During the year ended March 31, 2018, the trusteeship of India PPP Capacity Building Trust (I-Cap) was transferred to Infrastructure

Development Corporation (Karnataka) Limited (IDeCK) and an amount of ` 1,536,090 (Previous year ` Nil) has been recognised as income in

the Statement of Income and Expenditure based on the Net Asset Value (NAV) of I-Cap as on transaction date. The Company has received

the consideration of ` 1,536,578 subsequent to year end. [Also see notes 12 and 17]



10 FIXED ASSETS

(a) Tangible assets (`)

GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

BA

LA

NC

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AS

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BA

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017

Computers 2,366,650 348,153 299,200 2,415,603 1,638,628 509,474 284,241 1,863,861 551,742 728,022

(Previous year) (1,909,210) (794,680) (337,240) (2,366,650) (1,496,028) (410,852) (268,252) (1,638,628) (728,022) (413,182)

Vehicles 2,070,185 923,156 - 2,993,341 1,497,164 325,126 - 1,822,290 1,171,051 573,021

(Previous year) (2,527,367) - (457,182) (2,070,185) (1,539,309) (272,326) (314,471) (1,497,164) (573,021) (988,058)

Furniture and fixtures 735,459 143,635 - 879,094 165,442 149,901 - 315,343 563,751 570,017

(Previous year) (106,776) (628,683) - (735,459) (55,416) (110,026) - (165,442) (570,017) (51,360)

Office equipment 926,230 76,420 89,998 912,652 354,197 238,264 89,998 502,463 410,189 572,033

(Previous year) (470,600) (724,470) (268,840) (926,230) (337,964) (235,905) (219,672) (354,197) (572,033) (132,636)

Lease hold

improvements

10,315,257 - - 10,315,257 1,379,946 1,787,062 - 3,167,008 7,148,249 8,935,311

(Previous year) - (10,315,257) - (10,315,257) - (1,379,946) - (1,379,946) (8,935,311) -

TOTAL 16,413,781 1,491,364 389,198 17,515,947 5,035,377 3,009,827 374,239 7,670,965 9,844,982 11,378,404

(Previous year) (5,013,953) (12,463,090) (1,063,262) (16,413,781) (3,428,717) (2,409,055) (802,395) (5,035,377) (11,378,404) (1,585,236)

(b) Intangible assets (`)

GROSS BLOCK DEPRECIATION / AMORTISATION NET BLOCK

BA

LA

NC

E

AS

AT

A

PR

IL 1

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17

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SA

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20

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31,

20

18

BA

LA

NC

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AS

AT

M

AR

CH

31,

20

17

Computer software 161,763 - - 161,763 116,149 17,928 - 134,077 27,686 45,614

(Previous year) (161,763) - - (161,763) (86,611) (29,538) - (116,149) (45,614) (75,152)

TOTAL 161,763 - - 161,763 116,149 17,928 - 134,077 27,686 45,614

(Previous year) (161,763) - - (161,763) (86,611) (29,538) - (116,149) (45,614) (75,152)

GRAND TOTAL 16,575,544 1,491,364 389,198 17,677,710 5,151,526 3,027,755 374,239 7,805,042 9,872,668 11,424,018

(Previous year) (5,175,716) (12,463,090) (1,063,262) (16,575,544) (3,515,328) (2,438,593) (802,395) (5,151,526) (11,424,018) (1,660,388)

11 LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD UNLESS STATED OTHERWISE)(`)


NON CURRENT CURRENT NON CURRENT CURRENT

Security deposits 16,400,000 - 10,000,000 600,000

Advance payment of income tax [net of provision of ₹ ` 8,550,000 (March 31, 2017: ₹ ` 8,550,000)] *

23,338,377 - 20,814,777 -

Receivable from gratuity fund trust [see note 22(b)] 242,095 - - 3,088,915

Receivable from an implementing partner - 570,565 - -

Advance to implementing partners - 1,117,161 - -

Other loans and advances - 720,662 - 465,367

TOTAL 39,980,472 2,408,388 30,814,777 4,154,282

* includes amount deposited under protest against the demands [see note 26(b)]



12 OTHER ASSETS(`)


NON CURRENT CURRENT NON CURRENT CURRENT

Interest accrued on fixed deposits - 13,547,161 - 17,980,313

Contractually reimbursable expenses - 425,770 - 425,770

Financial inclusion and skill development (devices in hand)

- 13,950,444 - 265,030,309

Receivable from related party [see notes 9 and 25 (b)] - 1,536,578 - -

Bank balances in earmarked accounts*

- Balances held as margin money (deposit accounts)* 750,000 - 750,000 -

TOTAL 750,000 29,459,953 750,000 283,436,392

*Fixed deposits are under lien with banks against bank guarantees and are restricted from being exchanged or used to settle a liability for more than 12 months from the balance sheet date.

13 CURRENT INVESTMENTS (AT LOWER OF COST AND FAIR VALUE, UNLESS OTHERWISE STATED)


(`) QUANTITY (`) QUANTITY (`)

Trade investments (Unquoted)

(At lower of cost and fair value, unless otherwise stated)

Investment in trust securities (fully paid)

India Infrastructure Initiative Trust [see note (i)] 1,000 12 17,504 212 309,241

Investment in mutual fund

IDFC Corporate Bond Fund Direct Plan - Growth 10 3,427,551 41,000,000 6,631,664 66,316,643

IDFC Cash Fund - Growth 1,000 19,299 40,000,000 - -

IDFC Super Saver Income Fund - Short Term 10 2,317,942 82,000,000 - -

TOTAL 163,017,504 66,625,884

(a) Aggregate amount of unquoted investments 163,017,504 66,625,884

(b) Market value of unquoted investments 166,490,015 74,380,083

(i) During the year, the investment in India Infrastructure Initiative Trust (“Triple I Trust”) has been further reduced to 12 units (Previous year 212 units) on account of partial redemption of 200 units (Previous year 1,500 units) at lump-sum amount of ` 1,189,200 (Previous year ` 6,000,000). The gain of ` 897,463 (Previous year ` 3,811,977) has been recognised as income in the Statement of Income and Expenditure.

14 TRADE RECEIVABLES (UNSECURED) (CONSIDERED GOOD, UNLESS STATED OTHERWISE)

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Outstanding for a period less than six months from the date they are due for payment 8,250,000 -

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

TOTAL 8,250,000 -

15 CASH AND BANK BALANCES

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Cash and cash equivalents

Cash on hand 10,994 23,760

Balances with banks:

- In savings accounts * 3,976,874 770,024

3,987,868 793,784



(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Other bank balances

Deposits with maturity more than three months but less than 12 months # 239,038,295 297,531,832

239,038,295 297,531,832

TOTAL 243,026,163 298,325,616

* Earmarked ` 5,061 (Previous year ` Nil) against restricted grants.

# Earmarked ` 13,388,972 (Previous year ` Nil) against restricted grants.

16 REVENUE FROM OPERATIONS

(`)



Voluntary contributions

- Corpus donation [see note (a)] 339,000,000 125,000,000

- Others 639,718 5,000

Restricted grants [see note 30(a)] 12,413,525 -

Policy advocacy 7,059,194 -

TOTAL 359,112,437 125,005,000

(a) Corpus donation ` 339,000,000 (Previous year ` 125,000,000) transferred from fund held in corpus donation as per the direction of the management for carrying out the activities of the Company [see note 5].

17 OTHER INCOME

(`)



Interest income from bank on deposits * 20,324,899 26,775,256

Gains on sale of current investments (net) 9,207,602 25,762,681

Gains on redemption of non-current investments (net) 1,536,090 -

Interest received on income tax refund 403,389 310,605

Sitting fees 306,000 256,000

Liabilities no longer required written back - 336,900

Miscellaneous income 12,701 -

TOTAL 31,790,681 53,441,442

* interest income from deposits earmarked for restricted grants amounting to ` 514,808 (Previous year ` Nil) has been transferred to ‘Liability for restricted grants’ [see note 30(a)]

18 EMPLOYEE BENEFITS EXPENSE

(`)



Salaries [see note 22(b)] 33,137,033 24,486,307

Contribution to provident and other funds * [see note 22(a)] 1,533,826 1,368,730

Staff welfare expenses 814,953 98,283

Stipend 1,050,000 -

TOTAL 36,535,812 25,953,320

* includes administration charges of ` 85,834 (Previous year ` 103,083)



19 OTHER EXPENSES

(`)



Grants to implementing partners 44,473,752 74,944,674

Financial inclusion and skill development 251,079,865 16,228,641

Other project related expenses* 654,890 274,803

Electricity and water expenses 323,309 201,916

Legal and professional charges 7,334,452 8,199,675

Fee for research fellows* 17,996,223 25,126,077

Lease rent [see note 29]* 6,378,286 8,198,292

Repairs and maintenance - Others 2,346,420 1,941,432

Communication costs 705,093 493,067

Travelling, hotel and conveyance* 15,608,630 7,220,021

Printing and stationery* 975,569 169,220

Donations 300,000 2,530,000

Payments to auditors [see note (a)] 675,630 614,272

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

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

Loss on disposal of long-term investment [see note 9] - 63,501

Books and periodicals 307,954 184,453

Training and conference 354,323 204,113

Sitting fee to directors 495,500 591,425

Bank charges* 9,237 3,796

Miscellaneous expenses 809,005 374,242

TOTAL 350,828,138 148,877,408

*includes expenses made out of restricted grants [see note 30 (b)]

(a) Payments to the auditors (including Service tax / Goods and service tax) comprise

(`)



To statutory auditors

for audit 383,500 373,750

for tax audit 118,000 115,000

for other services 90,270 86,250

Reimbursement of expenses 83,860 39,272

TOTAL 675,630 614,272

20 EXPENDITURE IN FOREIGN CURRENCIES

(`)



Travelling and conveyance 1,463,645 1,829,628

Books and periodicals 33,326 79,955

Training and conference 349,042 179,713


TOTAL 1,848,174 2,167,554

21 EARNINGS IN FOREIGN CURRENCIES

(`)



Restricted grants [See note 30(a)] 25,475,328 -

TOTAL 25,475,328 -



22 DISCLOSURE OF EMPLOYEES BENEFITS

(a) Defined contribution plans

The Company makes Provident Fund and Superannuation Fund 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.

The Company has recognised the following amounts in the Statement of Income and Expenditure towards contribution to defined contribution plan which are included under contribution to provident and other funds:

(`)



Provident fund 1,343,988 1,233,958

Superannuation fund 104,004 31,689

TOTAL 1,447,992 1,265,647

(b) Defined benefit plan - Gratuity (Funded)

The details of the Company’s post – retirement benefit plan for gratuity for its employees are given below which are basis actuarial valuation:

(`)



CHANGE IN THE DEFINED BENEFIT OBLIGATIONS:Liability at the beginning of the year 3,422,049 6,797,732

Current service cost 915,831 1,320,417

Interest cost 273,261 512,286

Benefits paid (58,003) (481,361)

Actuarial (gains) / losses (300,461) 171,198

Liabilities assumed on acquisition/(Settled on divestiture) (4,898,223)

LIABILITY AT THE END OF THE YEAR 4,252,677 3,422,049

FAIR VALUE OF PLAN ASSETS:Opening fair value of planned assets 6,510,964 6,430,370

Actuarial gains / (losses) (103,592) (313,250)

Return on plan assets 475,876 507,843

Contributions 758,442 367,362

Benefits paid (58,003) (481,361)

Assets acquired on acquisition/(Distributed or divestiture) (3,088,915) -

FAIR VALUE OF PLAN ASSETS AT THE END OF THE YEAR 4,494,772 6,510,964

TOTAL ACTUARIAL (GAINS) / LOSSES TO BE RECOGNISED (196,869) 484,448

AMOUNT RECOGNISED IN THE BALANCE SHEETLiability at the end of the year 4,252,677 3,422,049

Fair value of plan assets at the end of the year 4,494,772 6,510,964

AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER "LOANS AND ADVANCES" (SEE NOTE 11)

(242,095) (3,088,915)

EXPENSE RECOGNISED IN THE STATEMENT OF INCOME AND EXPENDITURECurrent service cost 915,831 1,320,417

Interest cost 273,261 512,286

Expected return on plan assets (475,876) (507,843)

Net actuarial (gains) / losses recognised (196,869) 484,448

Losses assumed on acquisition / (gains) on divestiture 3,088,915 (4,898,223)

EXPENSE/(ADJUSTMENT) RECOGNISED IN THE STATEMENT OF INCOME AND EXPENDITURE UNDER "EMPLOYEE BENEFITS EXPENSE" (SEE NOTE 18)

3,605,262 (3,088,915)

RECONCILIATION OF THE LIABILITY/ASSETS RECOGNISED IN THE BALANCE SHEET:Opening net liability 3,422,049 6,797,732

Expense recognised in Income and Expenditure 3,605,262 (3,088,915)

Opening fair value of planned assets (6,510,964) (6,430,370)

Contribution by the Company (758,442) (367,362)

AMOUNT TO BE RECOGNISED IN THE BALANCE SHEET UNDER "LOANS AND ADVANCES" (SEE NOTE 11)

(242,095) (3,088,915)

EXPECTED EMPLOYER'S CONTRIBUTION FOR THE NEXT YEAR - -



Experience adjustments (`)

PARTICULARS FOR THE YEAR ENDED

MARCH 31, 2018 MARCH 31, 2017 MARCH 31, 2016 MARCH 31, 2015 MARCH 31, 2014

Defined benefit obligation 4,252,677 3,422,049 6,797,732 6,742,988 4,605,205

Plan assets 4,494,772 6,510,964 6,430,370 6,742,988 1,310,960

Surplus / (deficit) 242,095 3,088,915 (367,362) - (3,294,245)

Experience adjustments on plan liabilities (345,709) 179,494 138,616 423,410 381,471

Experience adjustments on plan assets (103,592) (313,250) 74,488 270,334 -


MARCH 31, 2018 MARCH 31, 2017

% %

INVESTMENT PATTERN

Insurer managed funds

Government securities 25.53 27.81

Deposit and money market securities 6.62 14.77

Debentures/bonds 67.85 57.42

Mortality ‘Indian Assured Lives Mortality

(2006-08)

‘Indian Assured Lives Mortality

(2006-08)

PRINCIPAL ASSUMPTIONS

Discount rate (per annum) 8.20 6.55

Expected rate of return on assets (per annum) 7.50 7.50

Salary escalation rate (per annum) 8.00 8.00

Notes:

The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

The expected rate of return on plan assets is determined after considering several applicable factors such as the composition of the plan assets, investment strategy, market scenario, etc.

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

23 SEGMENT INFORMATIONThe primary focus of the Company is to contribute to the economic benefits to society, social infrastructure (education, healthcare, water and sanitation) and other engagement in research and studies, which (as per Accounting Standard 17 on Segment Reporting) is considered to be the only reportable business segment. All other activities revolve around the main business. The Company does not have any geographical segment.

24 EARNINGS PER SHARE



(a) Net surplus after tax (`) 511,413 1,177,121

(b) Weighted average number of equity shares (Nos.) 13,000,000 13,000,000

(c) Basic earnings per share (a)/(b) (`) 0.04 0.09

(d) Nominal value per share (`) 10 10

There is no dilution to the Basic earnings per share as there are no dilutive potential equity shares.



25 RELATED PARTY DISCLOSURES(a) Relationship:

Holding Company

IDFC Limited

Jointly controlled entities

Infrastructure Development Corporation (Karnataka) Limited

Delhi Integrated Multi-Modal Transit System Limited

Uttarakhand Infrastructure Development Company Limited (Under Liquidation)*

*The Company has filed an application for voluntary winding up and the final order is awaited from Registrar of Companies.

Fellow subsidiaries




IDFC Bank Limited

IDFC Finance Holding Company Limited


Entities over which control is exercised

India PPP Capacity Building Trust#

#The trusteeship of India PPP Capacity Building Trust was transferred to Infrastructure Development Corporation (Karnataka) Limited w.e.f.

April 27, 2017

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

(`)

NAME OF THE RELATED PARTY NATURE OF TRANSACTIONS FOR THE YEAR ENDEDMARCH 31, 2018


IDFC Limited Payment against advances 1,200,000 7,636,000

Reimbursement of expenses by the Company * 927,840 764,360

Corpus donation received 2,700,000 12,500,000

Advance payable -balance outstanding 186,164,000 187,364,000

Share capital 130,000,000 130,000,000

Infrastructure Development Corporation (Karnataka) Limited

Sitting fees 6,000 16,000

Sale of investment 1,536,578 -

Receivable on transfer of trusteeship of I-Cap 1,536,578 -

IDFC Bank Limited Sale of fixed assets - 74,133

Interest income from bank deposits 20,256,063 26,755,571

Lease rent* 389,739 2,783,172

Reimbursement of expenses to the Company * - 114,642

Reimbursement of other expenses by the Company * 796,829 27,817

Amount deposited in the bank account 575,540,883 313,316,538

Amount withdrawal from the bank account 572,018,129 318,104,863

Term deposits placed 282,200,000 134,250,000

Term deposits matured 354,082,509 186,968,168

Balances with banks - saving bank accounts 3,906,962 384,208

Balance in demand deposit accounts 226,399,323 298,281,832

Interest accrued on fixed deposits with banks 13,364,584 17,980,313




(`)

NAME OF THE RELATED PARTY NATURE OF TRANSACTIONS FOR THE YEAR ENDEDMARCH 31, 2018


Delhi Integrated Multi-Modal Transit System Limited

Sitting fees received 300,000 240,000

India PPP Capacity Building Trust Reimbursement of expenses by the Trust - 474,200

IDFC Alternatives Limited Corpus donation received 6,213,500 6,002,229

IDFC Securities Limited Corpus donation received 5,588,800 6,079,935

IDFC Infrastructure Finance Limited Corpus donation received 8,294,400 3,170,870



Reimbursement of expenses by the Company * 471,158 476,229

IDFC Financial Holding Company Limited

Corpus donation received 375,000 50,000

Note: * Inclusive of Service Tax / Goods and Service Tax (GST)

26 CONTINGENT LIABILITIES

(`)

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

Claims against the Company not acknowledged as debts:

- Income tax demands under appeal [See notes below] 45,402,978 41,711,156

(a) The above amount is net of amount provided ` 8,550,000 (Previous year ` 8,550,000) [see note 11]

(b) The above amount does not include amount deposited under protest against the demands ` 19,627,691 (Previous year ` 14,742,111)

[see note 11]

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 has long-term contracts as at March 31, 2018 for which there are no material foreseeable losses. The Company

did not have any derivative contracts as at March 31, 2018.

28 There are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.

29 LEASES

The 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 ` 6,378,286 (Previous year ` 8,198,292).

30 RESTRICTED GRANTS

(`)



(a) Liability for restricted grants

i Opening balance - -

ii Restricted grants received during the year [including interest income of ` 514,808 (Previous year ` Nil)]

25,990,136 -

iii Restricted grants utilised during the year [see note (b) below] 12,413,525 -

CLOSING BALANCE 13,576,611 -

(b) Restricted grants utilised

i Fee for research fellows 8,533,720 -

ii Lease rent 2,124,000 -

iii Travelling, hotel and conveyance 604,163 -

iv Printing and stationery 577,340 -

v Other project related expenses 569,697 -

vi Bank charges 4,605 -

12,413,525 -



31 (a) Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the MSMED Act, 2006 is ` Nil (Previous year ` Nil) and no interest during the year has been paid or is payable under the terms of MSMED Act, 2006. Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of the information collected by the management.

(b) Disclosure under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

(`)



a. Principal amount remaining unpaid to any supplier as at the end of the accounting year

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

- -

c. The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day

- -

d. The amount of interest due and payable for the year - -

e. The amount of interest accrued and remaining unpaid at the end of the accounting year

- -

f. The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid

- -

32 Disclosure relating to Specified bank Notes* (SBNs) held and transacted during the period from November 8, 2016 to December 30, 2016.

PARTICULARS SPECIFIED BANK NOTES* OTHER DENOMINATION NOTES

TOTAL

Closing cash in hand as on November 8, 2016 - 650 650

Add: Permitted receipts - 30,000 30,000

Less: Permitted payments - 19,228 19,228

Less: Amount deposited in banks - - -

Closing cash in hand as on December 30, 2016 - 11,422 11,422

*Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred and one

thousand rupee as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic

Affairs No. S.O.3407 (E), dated the 8th November, 2016.

The reporting on disclosure relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

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







Place : Gurugram


Place : Mumbai


IDFC PROJECTS LIMITED

U45203MH2007PLC176640

Mr. Sunil Kakar (Chairman)

Mr. A K T Chari

Mr. T S Bhattacharya

Dr. Rajeev Uberoi

Price Waterhouse & Co,


IDFC Bank Limited

Naman Chambers

C-32, G-Block, Bandra-Kurla

Complex, Bandra (East)

Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2421 5051



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

IDFC PROJECTS LIMITED


BOARD’S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Eleventh Annual Report together with the audited financial statements for the year ended

March 31, 2018.


(AMOUNT IN `)



Total Income 132,048 14,369,116


Loss before Tax (101,635,743) (527,348,939)

Less: Provision for Tax (922,058) 2,950,000

Loss after Tax (100,713,685) (530,298,939)

COMPANY’S AFFAIRS

In the view of the fact that there are no operations in the company, and there are no specific business plans for future, the financial

statements have been prepared on a Non Going Concern basis and accordingly, assets are stated at realisable values and liabilities at

their discharge values.

The Holding Company, IDFC Limited, continues to provide the financial support to the Company to meet its obligations as and when

they fall due for payment.



DIVIDEND

The Directors do not recommend any dividend for the year ended March 31, 2018 in view of the losses.

SUBSIDIARY COMPANIES / JOINT VENTURES AND ASSOCIATE COMPANIES

IDFC Projects Limited has one Associate Company (26% owned), namely, Jetpur Somnath Tollways Private Limited (“JSTPL”). JSTPL

had served notice of termination on NHAI terminating the project on account of Authority Default and has handed over its toll operation

to the NHAI in November, 2016. JSTPL has received the Termination Payment from NHAI which was below the amount due as per

Concession Agreement. JSTPL has referred matter to Arbitration Proceedings which are underway.

A Statement containing salient features of the financial statement and all other requisite details of the said Associate company in the

format AOC-I is appended as Annexure I.


The Company does not have any employee.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any Public Deposits.


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

Act, 2013.

FOREIGN EXCHANGE EARNINGS AND EXPENDITURE

There are no foreign exchange earnings and expenditure during the year.


Since the Company does not own any manufacturing facility, the disclosure of information on other matters required to be disclosed in

terms of Section 134(3)(m) are not applicable and hence not given.

DIRECTORS


Dr. Rajeev Uberoi (DIN:01731829) would retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Board of Directors recommend re-appointment of Dr. Rajeev Uberoi at the ensuing AGM.

I D F C P R O J E C T S L I M I T E D | 6 7

BOARD’S REPORT

During the year, Ms. Prerana Porwal was appointed as the Chief Financial Officer in the capacity of Key Managerial Personnel w.e.f.

January 18, 2018.

The Company is in process of identification and appointment of suitable candidate for the position of 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 four (4) times on April 24, 2017, July 24, 2017, October 26, 2017 and January 18, 2018. 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 FY18 is given in the table below.

NAME OF THE DIRECTOR DIN POSITION NO. OF MEETINGS HELD IN FY18

NO. OF MEETINGS ATTENDED IN FY18

Mr. Sunil Kakar 03055561 Chairman 4 4

Mr. A K T Chari 00746153 Independent Director 4 4

Mr. T S Bhattacharya 00157305 Independent Director 4 4

Dr. Rajeev Uberoi 01731829 Non Executive Director 4 3

AUDIT COMMITTEE

During the year, the Audit Committee met four (4) times on April 24, 2017, July 24, 2017, October 26, 2017 and January 18, 2018. 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 FY18 is given in the table below.

NAME OF THE MEMBER POSITION STATUS NO. OF MEETINGS HELD IN FY18


Mr. A K T Chari Independent Director Chairman 4 4

Mr. Sunil Kakar Non Executive Director Member 4 4

Mr. T S Bhattacharya Independent Director Member 4 4


During the year, the Nomination and Remuneration Committee (NRC) met two (2) times on April 24, 2017 and January 18, 2018 The attendance of the NRC Meetings held during FY18 is given in the table below:

NAME OF THE MEMBER POSITION STATUS NO. OF MEETINGS HELD IN FY18


Mr. A K T Chari Independent Director Chairman 2 2

Mr. Sunil Kakar Non Executive Director Member 2 2

Mr. T S Bhattacharya Independent Director Member 2 2

The Composition of NRC is in compliance with the provisions of the Companies Act, 2013.

BOARD EVALUATION


SEPARATE MEETING OF INDEPENDENT DIRECTORS

The IDs of the Company met on April 24, 2017 without the presence of the non-independent Directors and senior management team of the Company. Both the IDs attended the said meeting. The IDs discussed matters as required under the relevant provisions of the Act.

SHAREHOLDERS UPDATE

In view of no operations of the Company, the financial statements have been prepared on realizable value basis and accordingly, all assets and liabilities are stated at the value at which they are realizable / payable.

AUDITORS

At the AGM of the Company held on August 2, 2017, the Shareholders had approved the appointment of Price Waterhouse & Co, Chartered

Accountants LLP (FRN 304026E / E300009) (“PWC”) as Statutory Auditors for a period of 5 years to hold office from the conclusion of the


BOARD’S REPORT

20th AGM till the conclusion of the 25th AGM of the Company subject to ratification by the Shareholders at every AGM. PWC has confirmed that they are not disqualified from continuing as Statutory Auditors of the Company for FY19.

In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of the Statutory Auditors is not required to be ratified at every Annual General Meeting.

RISK MANAGEMENT

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




There have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period March 31, 2018 till the date of this report.


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



AUDITOR’S REPORT

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



(a) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2018 and of the 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 non-going concern basis; and

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


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


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.

Since all related party transactions entered into the by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.

ACKNOWLEDGMENTS

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

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Sunil KakarChairman



ANNEXURE IFORM AOC-I[Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014]

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

PART “A”: SUBSIDIARIES: NOT APLICABLE


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

SR. NO. NAME OF ASSOCIATE COMPANIES

JETPUR SOMNATH TOLLWAYS PRIVATE LIMITED

1 Latest audited Balance Sheet Date March 31, 2018

2 Date on which the Associate was associated or acquired January 11, 2011

3 Shares of associate held by the Company at March 31, 2017

Number of Equity Shares 42,637,400

Amount of investment in associate companies (` in crore) 104.23

Extend of Holding (%) 26.00%

4 Description of how there is significant influence Associate

5 Reason why the associate is not consolidated See Note 2

6 Net worth attributable to Shareholding as per latest audited Balance Sheet (` in crore) (23.83)

7 Profit / (Loss) for the year ended March 31, 2017 (` in crore) (26.09)

i. Considered in Consolidation -

ii. Not Considered in Consolidation (` in crore) (26.09)

Note 1: The Company has significant influence through holding more than 20% of the equity shares in the investee company in terms of Accounting Standard 23, issued by ICAI.

Note 2: Losses to the extent of investment in Associate have already been fully absorbed, so entity is no more consolidated.

For and on behalf of the Board of Directors of IDFC Projects Limited

Sunil KakarDirector

Rajeev UberoiDirector

Mumbai, April 24, 2018Prerana PorwalChief Financial Officer


ANNEXURE IIFORM NO. MGT-9 EXTRACT OF ANNUAL RETURNAS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2018 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN U45203MH2007PLC176640


iii) Name of the Company IDFC PROJECTS LIMITED

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

Link Intime India Pvt Ltd.* C-13, Pannalal Silk Mills Compound, Lal Bahadur Shastri Marg, Bhandup West, Mumbai, Maharashtra 400078 Contact No. +91 22 2594 6970

*Link Intime India Pvt Ltd. provides connectivity services with depositories for the equity shares 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 MAINPRODUCTS / SERVICES

NIC CODE OF THE PRODUCT / SERVICE % TO TOTAL TURNOVER OF THE COMPANY

1. Design, develop, engineer, finance, construct, operate and maintain infrastructure projects

III. PARTICULARS OF HOLDING COMPANY, SUBSIDIARY AND ASSOCIATE COMPANIES

SR. NO.

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

% OFSHARES HELD

APPLICABLE SECTION

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

2. Jetpur Somnath Tollways Pvt. Ltd. U74120MH2011PTC212162 Associate 26% Section 2(6)



CATEGORY OF SHAREHOLDERS NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR

NO. OF SHARES HELD AT THE END OF THE YEAR

% CHANGE DURING



SHARES

A. Promoter

(1) Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL

Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL

Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

Bodies Corp. 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% NIL

Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

Any Other NIL NIL NIL NIL NIL NIL NIL NIL NIL

Sub-total (A) (1):- 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% NIL


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

34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% NIL





% CHANGE DURING



SHARES


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

2. Non-Institutions NIL NIL NIL NIL NIL NIL NIL NIL NIL


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




Grand Total (A+B+C) 34,049,400 600 34,050,000 100% 34,049,400 600 34,050,000 100% NIL


SR. NO.

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

DURING THE YEARNO. OF SHARES % OF TOTAL

SHARES OF THE COMPANY

%OF SHARES PLEDGED/



COMPANY

%OF SHARES PLEDGED/


1. IDFC Limited 34,050,000 100% NIL 34,050,000 100% NIL NIL

TOTAL 34,050,000 100% NIL 34,050,000 100% NIL NIL



NOT APPLICABLE


V. INDEBTEDNESS




B. Remuneration to other Directors: NIL

SR. NO.


IN ` SUNIL KAKAR A K T CHARI T S BHATTACHARYA RAJEEV UBEROI


Fee for attending board committee meetings NA 275,000 275,000 NA 550,000

Total (1) NA 275,000 275,000 NA 550,000

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

Total (B) = (1 + 2) NIL 275,000 275,000 NIL 550,000


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

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: NIL

Note: The Remuneration to CFO was paid from the holding company.




TO THE MEMBERS OF IDFC PROJECTS LIMITED


1. We have audited the accompanying financial statements of IDFC Projects Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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.


2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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.



4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the 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.

7. 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its losses and its cash flows for the year ended on that date.

Emphasis of Matters

9. We draw your attention to note 2(a) to the financial statements regarding preparation of financial statements on realizable value basis as there are no operations in the Company. Our opinion is not modified in respect of this matter.

Other Matter

10. The financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants under the Companies Act, 2013 who, vide their report dated April 24, 2017, expressed an unmodified opinion on those financial statements.


11. As required by ‘the Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of



the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.


(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.





(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 knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2018, on its financial position in its financial statements – Refer note 19.

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2018.



For Price Waterhouse & Co Chartered Accountants LLPFirm Registration Number: 304026E/E-300009 Sharad Vasant(Partner) Membership Number : 101119




Referred to in paragraph 12 (f) of the Independent Auditors’ Report of even date to the members of IDFC Projects Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC Projects Limited (“the Company”) as of March 31,

2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.







Meaning of Internal Financial Controls Over Financial Reporting6. 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.




such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.


Sharad Vasant(Partner)





Referred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of IDFC Projects Limited on the financial statements as of and for the year ended March 31, 2018

i. The Company does not hold any fixed assets during the year ended March 31, 2018. Therefore, the provisions of Clause 3(i) of the

Order are not applicable to the Company.

ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of

Clause 3(ii) of the said Order are not applicable to the Company.

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 Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c)

of the said Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of

Section 186 of the Act in respect of the loans or investments made, or guarantees or security provided by it. The Company has

not granted any loans or provided any guarantees or security to parties covered under Section 185 of the Act and accordingly,

provisions of Clause 3(iv) of the said Order, to this extent, are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the

Rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for

any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the

Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income

tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax (with effect from July 1,

2017) and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues

of service tax, sales-tax, duty of customs, duty of excise, value added or goods and service tax which have not been deposited

on account of any dispute. The particulars of dues of income tax as at March 31, 2018 which have not been deposited on

account of a dispute, are as follows:

NAME OF THE STATUTE NATURE OF DUES AMOUNT (`) PERIOD TO WHICH THE AMOUNT RELATES

FORUM WHERE THE DISPUTE IS PENDING

Income-tax Act, 1961 Income-tax 889,980 2014-15 Commissioner of Income-tax (Appeals)

Income-tax Act, 1961 Income-tax 1,510 2014-15 Commissioner of Income-tax (Appeals)

As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued

any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term

loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally

accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across

any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year,

nor have we been informed of any such case by the Management.

xi. The Company has not paid any managerial remuneration during the year. Accordingly, the provisions of Clause 3(xi) of the Order

are not applicable to the Company.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the


xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the

Act. The details of related party transactions have been disclosed in the financial statements as required under Accounting Standard

(AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures

during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him within the meaning

of section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the

provisions of Clause 3(xvi) of the Order are not applicable to the Company.


Sharad Vasant(Partner)








Sharad VasantPartnerMembership Number: 101119

Sunil KakarDirector



AS AT MARCH 31, 2018


NOTES ` `



(a) Share capital 3 340,500,000 340,500,000

(b) Reserves and surplus 4 (1,513,554,142) (1,412,840,457)

(1,173,054,142) (1,072,340,457)

Current liabilities



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

383,518 250,649

(b) Other current liabilities 6 1,178,547,225 1,112,004,671

(ç) Short-term provisions 7 886,647 491,302

1,179,817,390 1,112,746,622

TOTAL 6,763,248 40,406,165

ASSETS

Non current assets

(a) Non-current investments 8 - 33,332,500

(b) Long-term loans and advances 9 - 4,539,319

- 37,871,819

Current assets

(a) Current investments 10 1,678,419 1,856,771

(b) Cash and bank balance 11 111,727 677,575

(c) Short term loans and advances 12 4,973,102 -

6,763,248 2,534,346

TOTAL 6,763,248 40,406,165






NOTES ` `

I INCOME

Income from operations

Other income 13 132,048 14,369,116

TOTAL INCOME (I) 132,048 14,369,116

II EXPENSES

Finance Costs 14 3,736 1,162

Provision for diminution in the value of Investment 15 99,997,500 539,339,400

Provision for doubtful loans and advances 16 61,062 227,412

Other expenses 17 1,705,493 2,150,081


III LOSS BEFORE TAX (I-II) (101,635,743) (527,348,939)

IV TAX EXPENSE

Current tax 30,000 2,950,000

Tax adjustment relating to prior years (952,058) -

V LOSS FOR THE YEAR (III-IV) (100,713,685) (530,298,939)

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

Basic (`) 22 (2.96) (15.57)

Diluted (`) 22 (2.96) (15.57)


This is Statement of Profit & Loss referred to in our report of even date.




Sunil KakarDirector







NOTES ` `


Loss before tax (101,635,743) (527,348,939)

Adjustments for :

Provision for diminution in the value of Investment 15 99,997,500 539,339,400

Provision for doubtful loans and advances 16 61,062 227,412

Operating profit / (loss) before working capital changes (1,577,181) 12,217,873


Adjustments for (increase) / decrease in operating assets

Short- term loans and advances (63,312) (227,412)

Other current assets - 10,607

Adjustments for increase/(decrease) in operating liabilities

Trade payables 132,869 (445,496)

Other current liabilities (27,850) (24,850)

(1,535,474) 11,530,721

Direct taxes paid (net of refund) 885,869 (2,820,020)

NET CASH FLOW FROM / (USED IN) OPERATING ACTIVITIES (A) (649,605) 8,710,702


Subscription to preference shares in an associate company (66,665,000) (80,614,900)

Sale of equity shares in a company - 356,180,353

Sale of current investments 178,353 11,708,674

NET CASH FLOW / (USED IN) INVESTING ACTIVITIES (B) (66,486,647) 287,274,127


Advances taken from the holding company 67,767,895 69,654,776

Advances repaid to holding company (1,197,491) (602,652,216)

NET CASH FLOW / (USED IN) FROM FINANCING ACTIVITIES (C) 66,570,404 (532,997,440)

Net increase/(decrease) in cash and cash equivalents (A+B+C) (565,848) (237,012,610)

Cash and cash equivalents as at the beginning of the year 11 677,575 3,506,404

Add: Pursuant to Scheme of Amalgamation - 234,183,781

Cash and cash equivalents as at the end of the year 11 111,727 677,575

This is Cash Flow Statement referred to in our report of even date.




Sunil KakarDirector





01 BACKGROUND IDFC Projects Limited (‘the Company’) is a company, incorporated in India under the Companies Act 1956. The Company is a wholly

owned subsidiary of IDFC Limited. The Company was in the business of conceiving, developing, owning, managing, executing and operating infrastructure projects, in India. As there are no definitive business plan for the Company, the management is evaluating various options including winding up of the Company, in compliance with the Companies Act, 2013. Accordingly, the assumption of going concern is not considered appropriate for preparation of the financial statements.

02 SIGNIFICANT ACCOUNTING POLICIES

A BASIS OF PREPARATION

These financial statements have been prepared in accordance with the generally accepted accounting principles in India on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] to the extent applicable and relevant and other relevant provisions of the Companies Act, 2013.

‘In the view that there are no operations in the Company, the financial statements has been prepared not on a going concern basis and accordingly, assets are stated at realisable values and liabilities at their discharge values. The Holding Company, IDFC Limited, continues to provide the financial support to the Company to meet its obligations as and when they fall due for payment. In view of the aforesaid, the assets and liabilities are classified as “current”.

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.

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’. 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 lower of cost for fair value, determined on individual basis.

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:

¡ Profit / loss earned on sale of investments is recognised on settlement date basis. Profit / loss on sale of investments is determined based on the weighted average cost of investments.

¡ Interest Income is accounted on accrual basis.

E PROVISIONS AND CONTINGENCIES

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

F TAXES ON INCOME

Income tax expense comprises current tax and deferred tax. Current tax is the amount payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified under section 133 of Companies Act, 2013. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.



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

G CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of the Cash Flow Statement comprises cash on hand, cash in bank, fixed deposits and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value.

H CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effect of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

I 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.

03 SHARE CAPITAL


NUMBER ` NUMBER `

AUTHORISED SHARES

Equity shares of ` 10 each 140,000,000 1,400,000,000 140,000,000 1,400,000,000

ISSUED, SUBSCRIBED & FULLY PAID-UP SHARES


[All of these shares are held by IDFC Limited, the holding company and its nominees]

TOTAL 340,500,000 340,500,000

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


NUMBER ` NUMBER `

Equity shares

Outstanding at the beginning of the year 34,050,000 340,500,000 34,050,000 340,500,000


OUTSTANDING AT THE END OF THE YEAR 34,050,000 340,500,000 34,050,000 340,500,000


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




¡ 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





IDFC Limited and its nominees 34,050,000 100 34,050,000 100



04 RESERVES & SURPLUS


` `

(a) Deficit in the Statement of Profit and Loss

Opening balance (1,419,524,238) (889,225,299)

Add: Loss for the year (100,713,685) (530,298,939)

Closing balance (1,520,237,923) (1,419,524,238)

(b) Capital reserve

Opening balance 6,683,781 -

Pursuant to the scheme of Amalgamation - 6,683,781

Closing balance 6,683,781 6,683,781

TOTAL (1,513,554,142) (1,412,840,457)

05 TRADE PAYABLES


` `

Total outstanding dues of micro enterprises and small enterprises - -

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

Provision for expenses 383,518 250,649

TOTAL 383,518 250,649

There were no dues payable to micro and small enterprises as defined under The Micro, Small and Medium Enterprise Development Act, 2006 during the year. The information regarding micro, small and medium enterprise have been determined to the extent such parties have been identified on the basis of information available with the Company.



` `

Statutory dues - 27,850

Amount payable to related party (see note 21) 1,178,547,225 1,111,976,821

TOTAL 1,178,547,225 1,112,004,671



` `

Provision for Income tax[net of advance tax ` 14,163,099 (Previous year ` 12,167,718)]

886,647 491,302

TOTAL 886,647 491,302



08 NON CURRENT INVESTMENTS (AT COST)


` NO. OF SHARES ` NO. OF SHARES `

Long Term, Trade

Investments in equity shares (fully paid)

Associate (unquoted)

Jetpur Somnath Tollways Private Limited 10 - - 42,637,400 426,374,000

Investment in preference shares (unquoted)(fully paid)

Associate

0.0001% Jetpur Somnath Tollways Private Limited (Compulsorily Convertible)

10 - - 40,300,000 403,000,000


10 - - 14,628,490 146,284,900

Total non current investments - 975,658,900

Less: Provision for Dimunition in the value of Investments - 942,326,400

TOTAL - 33,332,500

(a) Previous year long term investment includes ` 975,658,900 in respect of shares which are subject to restrictive covenants.

(b) Previous year long term investment includes ` 385,852,740 in respect of shares pledged with security trustee.

(c) Compulsorily convertible preference shares shall convert into 1 equity share before the expiry of 20 years from the date of issue.

(d) As there are no operations and also considering progress on the legal matter stated in the Note 18 long term investments have been shown as current assets in current year as per the requirement of Schedule III of the Act.

(e) Disclosure required by section 186 (4) of the Act are covered by Note 8 and Note 10.

09 LONG-TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


` `

Advance tax [net of provision for tax of ` 28,761,194 for previous year] - 4,539,319

TOTAL - 4,539,319

10 CURRENT INVESTMENTS


` NO. OF SHARES ` NO. OF SHARES `

Long Term, Trade [refer note 8(d)]

Investments in equity shares (fully paid)

Associate (unquoted)

Jetpur Somnath Tollways Private Limited 10 42,637,400 426,374,000 - -

Non-trade investments

Investment in preference shares (unquoted) (fully paid)

Associate


10 40,300,000 403,000,000 - -


10 21,294,990 212,949,900 - -

Total current investments 1,042,323,900 -

Less: Provision for Dimunition in the value of Investments 1,042,323,900 -

TOTAL - -

Current investment (lower of cost and fair value / market value)

Investment in mutual funds (unquoted)

IDFC Cash Fund - Direct Growth 931.645 1,678,419 1,030.644 1,856,771

TOTAL 1,678,419 1,856,771





(a) Aggregate amount of investments in unquoted mutual funds

Cost 1,678,419 1,856,771

Market value 1,965,966 2,036,269

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

(b) Investment includes ` 1,042,323,900 in respect of shares which are subject to restrictive covenants.

(c) Investment includes ` 385,852,740 in respect of shares pledged with security trustee.

(d) Compulsorily convertible preference shares shall convert into 1 equity share before the expiry of 20 years from the date of issue.

(e) Disclosure required by section 186 (4) of the Act are covered by Note 8 and Note 10.



` `


Balance with bank:

In current account (see note 21) 111,727 677,575

TOTAL 111,727 677,575

12 SHORT-TERM LOANS AND ADVANCES (UNSECURED)


` `

Considered good unless otherwise stated

[net of provision for tax of ` 16,691,448 (Previous year ` Nil)] 4,970,852 -

Considered Doubtful

Balances with government authorities - Cenvat credit available 7,130,220 7,066,909

Less: Provision for doubtful receivables (7,127,970) (7,066,909)

TOTAL 4,973,102 -

13 OTHER INCOME



` `

Profit on sale of Investments 21,648 491,326

Interest on deposits - 13,877,790

Interest on income tax refund 110,400 -

TOTAL 132,048 14,369,116

14 FINANCE COSTS



` `

Bank charges 3,736 1,162

TOTAL 3,736 1,162

15 PROVISION FOR DIMINUTION IN THE VALUE OF INVESTMENT



` `

Provision for diminution in the value of Investment 99,997,500 539,339,400

TOTAL 99,997,500 539,339,400



16 PROVISION FOR DOUBTFUL LOANS AND ADVANCES



` `

Provision for doubtful loans and advances 61,062 227,412

TOTAL 61,062 227,412

17 OTHER EXPENSES



` `

Rates and taxes 216,789 75,336

Professional fees 298,220 1,007,498

Directors sitting fees 600,000 375,000

Demat charges 6,000 6,775

Auditors' remuneration [see note (a) below] 583,000 637,500


TOTAL 1,705,493 2,150,081

(a) Breakup of auditors’ remuneration:

Audit fees 200,000 200,000

Tax audit fees - 75,000


Out-of pocket expenses 3,000 -

TOTAL 583,000 637,500

18. JSTPL UPDATE

Jetpur Somnath Tollways Private Limited (JSTPL) was incorporated for the purpose of construction, operation and maintenance of the 127 km section of NH 8D connecting Jetpur and Somnath in the state of Gujarat and in this respect, JSTPL had executed the concession agreement with NHAI. However, the construction was not fully completed for approx. 20 kms due pending handover of land by NHAI for construction. Due to certain disputes including of revenue sharing, JSTPL served notice of termination on NHAI terminating the project on account of Authority Default and has handed over its toll operations to the NHAI in November, 2016. Due to this, there are no operations in JSTPL. Considering the aforesaid and the net worth of JSTPL, the Company has made provision for diminution in value of its investments in JSTPL.

The Concession Agreement states that in case of default on account of NHAI, NHAI to pay the Debt Due plus 150% of the Adjusted Equity. In case termination was on account of JSTPL’s default, NHAI to make payment of 90% of the Debt due less insurance cover. JSTPL and Lenders of JSTPL (through lead banker Punjab National Bank) had filed an appeal for interim relief under section 9 of the Arbitration and conciliation Act before Delhi High Court to get at least 90 % of Debt Due as Termination Payment from NHAI. The Delhi High Court after hearing the matter, decided the appeal in favour of JSTPL and Lenders of JSTPL and directed NHAI to pay 90% of the Debt due as Termination payment to JSTPL. NHAI challenged the order of Delhi High Court (Single Judge) before Division Bench of Delhi High Court, who also upheld the decision of the single judge and directed NHAI to release the termination payment. NHAI challenged the Order of Division Bench of High Court by filing Special Leave Petition (“SLP”) in the Hon’ble Supreme Court of India. The Hon’ble Supreme Court of India upheld the Orders of the High Court and dismissed the SLP of NHAI and directed NHAI to pay ` 3,486,000,000 in the Escrow Account with the Lead Lender, Punjab National Bank within 6 (six) weeks from 05 January 2018. Following that, NHAI has released the amount of ` 3,486,000,000 on January 29, 2018 which was distributed to lenders on proportionate basis. However, JSTPL has provided a bank guarantee of the amount of ` 3,486,000,000 received from NHAI given that the proceedings for final arbitration award are still going on before the Delhi High Court.

After distribution of ` 3,486,000,000, ` 1,217,000,000 is left to be distributed to the Lenders. Proportionate portion of bank guarantee and undistributed loan amount to Lenders on a fully diluted basis investment of the Company in JSTPL of 19.90% i.e. ` 935,000,000 out of ` 4,703,000,000 has been disclosed as Other commitments.

19. CONTINGENT LIABILITIES AND COMMITMENTS NOT PROVIDED IN RESPECT OF:


` `

(i) Contingent liabilities

(a) Income tax liability, disputed in appeals 891,490 891,490

(ii) Commitments

Uncalled liability on shares and other investments 935,904,960 900,000,000

TOTAL 936,796,450 900,891,490



(a) 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 of lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

20. SEGMENT REPORTING

The primary mandate of the Company is to conceive, develop, execute and manage infrastructure projects in India. All other activities revolve around the main business. The Company does not have any geographical segments. As such, there are no separate reportable segments as per Accounting Standard 17 on ‘Segment Reporting’ u/s 133 of the Companies Act, 2013.

21. RELATED PARTY DISCLOSURES

In accordance with Accounting Standard 18 on ‘Related Party Disclosures’, the related parties of the Company are as follows:

I. Holding Company

IDFC Limited

II. Fellow Subsidiary





IDFC Bank Limited



IDFC Trustee Company Limited





IDFC Bharat Limited

III. Associate

Jetpur Somnath Tollways Private Limited

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

Name of related party and nature of relationship

PARTICULARS NATURE OF TRANSACTIONS FOR THE YEAR ENDED MARCH 31, 2018


` `

Holding Company

IDFC Limited Advance taken

Advance repaid

Amount payable 1,178,547,225 1,111,976,821

Sale of Novopay Solutions Private Limited - 356,180,353

Associate

Jetpur Somnath Tollways Private Limited Subscription towards preference share capital 66,665,000 80,614,900

Investment during the year 66,665,000 159,270,000

Provisions for diminution in value of investment made during the year

99,997,500 539,339,400

Investment (net of provision) - 33,332,500

Fellow Subsidiary

IDFC Bank Limited Balance in Current Accounts 87,700 267,771

Interest earned on Fixed Deposits - 13,877,790




In accordance with Accounting Standard 20 on ‘Earnings Per Share’ the earnings per share has been calculated as under:



(a) Net loss after tax (`) (100,713,685) (530,298,939)

(b) Weighted average number of equity shares (Nos.) 34,050,000 34,050,000

(c) Basic and diluted earnings per share (`) (2.96) (15.57)

(d) Nominal value per share (`) 10 10

23. DISCLOSURES RELATING TO SPECIFIED BANK NOTES (‘’SBN’’)

(a) The disclosures relating to Specified Bank Notes (‘’SBN’’) is not applicable to the Company during the year. The disclosures relating to Specified Bank Notes (‘’SBN’’) is not applicable to the Company during the year.



24. The Company is in process of appointing whole-time Chief Executive Officer and Company Secretary as required u/s 203 of the Companies Act, 2013 and expects to appoint these key managerial person in financial year 2018-2019.

25. PREVIOUS YEAR’S FIGURES

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


Sunil KakarDirector



IDFC INFRASTRUCTURE FINANCE LIMITED(Formerly known as IDFC Infra Debt Fund Limited)

U67190MH2014PLC253944

Mr. S. S. Kohli (Chairman)

Mr. A K T Chari

Mr. Suresh Menon

Ms. Ritu Anand

Mr. Pavan Kaushal

Mr. Sunil Kakar

(w.e.f. July 19, 2017)

Mr. Vikram Limaye

(Till July 15, 2017)


Chartered Accountant LLP

IDFC Bank Limited

IDBI Trusteeship Services Limited

Asian Building, Ground Floor,

17, R. Kamani Marg, Ballard Estate,

Mumbai 400 001.

Naman Chambers



Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354

Website www.idfcifl.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

DEBENTURE TRUSTEE

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifth Annual Report together with the audited financial statements for the year ended

March 31, 2018


PARTICULARS (AMOUNT IN `)



Total Income 3,365,175,974.00 2,069,320,213.00

Less: Total Expenses 2,500,229,326.00 1,360,905,156.00

Profit / (Loss) before Tax 864,946,648.00 708,415,057.00

Less: Provision for Tax - -

Profit / (Loss) after Tax 864,946,648.00 708,415,057.00



DIVIDEND

The Directors do not recommend any dividend for the financial year ended March 31, 2018 as the Company has decided to reinvest its

earnings.

PERFORMANCE OF THE COMPANY

IDFC Infrastructure Finance Limited (“IDFC IFL”) is engaged in the business of refinancing operating infrastructure projects that have

completed at least one year of satisfactory commercial operations.

In FY 2018, the second full year of its operations, the Company’s business has grown steadily. The Company ended the fiscal year with a

loan book of ` 4,220 cr – registering a robust growth of 57% over that in FY 2017.

Profit after Tax (PAT) grew by 22.2% to ` 86.5 cr from ` 70.8 cr in FY 2017. The business delivered a healthy average Return of Equity (RoE)

of 12.4%.

The loan portfolio of the Company continues to be well-diversified across 49 assets with exposures across PPP (Public Private Partnership)

projects including roads, power transmission as well as non-PPP projects including renewable power, hospitals, education, captive power,

airport cargo terminal and IT SEZs. The asset quality remains healthy with nil Non-Performing Assets (NPAs).

The capitalisation of the Company is comfortable with a Capital Adequacy Ratio of 22.09% as on March 31, 2018.

In FY 2018, the Company raised funds through the issue of long term bonds and Commercial Papers (CPs) aggregating ` 1,491 cr. The bond

issuances were rated AAA by domestic credit rating agencies namely ICRA and CARE while the CPs were rated A1+ by ICRA. The total

outstanding borrowings of the Company in the form of bonds and CPs as at the end of FY 2018 was ̀ 3,596 cr. These have been subscribed

by a diversified base of investors including insurance companies, provident funds and mutual funds.

FUTURE OUTLOOK

The Company is well positioned to continue its growth momentum over the next few years. The strategy going forward would be to

steadily increase the loan book with focus on asset quality, maintain a balanced and diversified portfolio across multiple sectors in the

infrastructure domain and optimise borrowing cost.

SUBSIDIARIES / JOINT VENTURE / ASSOCIATE COMPANIES

The Company is a subsidiary of IDFC Financial Holding Company Limited. It does not have any step down subsidiary / Joint venture /

Associate Company.


Your Company had 18 employees as on March 31, 2018.

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

Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees drawing

remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions of the first

proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company.

The said information is available for inspection at the Registered Office of the Company during working hours and any Member interested

in obtaining such information may write to the Company Secretary and the same will be furnished on request.

I D F C I N F R A S T R U C T U R E F I N A N C E L I M I T E D | 8 9

BOARD'S REPORT

EMPLOYEES’ STOCK OPTION PLAN

Pursuant to the resolution passed by the Members at the EGM held on February 01, 2016, IDFC Infrastructure Finance Limited had introduced

Employee Stock Option Scheme (“the ESOS- 2016”) to enable the employees of IDFC Infrastructure Finance Limited to participate in the

future growth and financial success of the Company.

All options vest in graded manner and are required to be exercised within specified period.

Details required under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 (Rules) regarding options granted under ESOS

2017 forms integral part of this Annual Report. The Annual Report excluding the aforesaid information is being sent to the Shareholders of

the Company and is available for inspection of the Shareholders of the Company at its Registered Office.

PUBLIC DEPOSITS



Since the Company is engaged in business of financing of companies in the ordinary course of business, provisions of Section 186 of the

Companies Act, 2013 relating to loan made, guarantees given or securities provided are not applicable to the Company. Thus, provision

section 134(3)(g) requiring to provide the particulars of loans, guarantees or investments are not applicable and hence not given.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Board has put in place a “Whistle Blower Policy”, so as to establish a Vigil Mechanism to enable Directors and employees to report

genuine concerns about unethical behavior, actual or suspected fraud or violation of company’s code of conduct. Head- Legal of the

Company is the Whistle Officer for the purpose of this policy. The Whistle Committee established thereunder oversees the Vigil Mechanism.

The details of Whistle Blower Policy / Vigil Mechanism are posted on the website of the Company.


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





At the last Annual General Meeting (“AGM”) of the Company held on June 9, 2017, Ms. Ritu Anand was appointed as Independent Director.

As per provisions of the section 149(6)(e) of the Companies Act, 2013 a person cannot be appointed as an Independent Director of the

Company who holds the position of employee of the Company or its holding, subsidiary or associate company in any of the three financial

years immediately preceding the financial year (“Cooling Period”) in which he/she is proposed to be appointed. Since Cooling Period was

over, Ms. Ritu Anand was appointed as an Independent Director (“ID”) of the Company w.e.f. April 24, 2017.

During the year, Mr. Vikram Limaye (DIN: 00488534) resigned on July 15, 2017 as a Director under the category of Nominee Director

of IDFC Limited and replaced by Mr. Sunil Kakar (DIN: 03055561) who was appointed as an Additional Director under the category of

Nominee Director of IDFC Limited on July 19, 2017. The Company has received notice from a member of the Company under Section 160

of the Companies Act, 2013, proposing the appointment of Mr. Sunil Kakar at the ensuing AGM. The Board of Directors recommends the

appointment of Mr. Sunil Kakar.

In accordance with the provisions of the Companies Act, 2013, Mr. Pavan Kaushal would retire by rotation at the ensuing Annual General

Meeting and being eligible, offers himself for reappointment.

As on March 31, 2018, Key Managerial Personnel were as follows:

1. Mr. Sadashiv S. Rao - Chief Executive Officer

2. Mr. Sanjay Ajgaonkar – Chief Financial Officer

3. Mr. Amol A. Ranade – Company Secretary


As per the provisions of the Companies Act, 2013, Independent Directors are not liable to retire by rotation and the terms of appointment

of Independent Directors will be governed by the provisions of Companies Act, 2013. The Company has received a declaration from

independent Directors, at the time of their respective appointments and also at the first meeting of the Board of Directors held in the

financial year, that they meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with

Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent

Directors” as per Schedule IV of the Act.


BOARD'S REPORT

BOARD

During the year, the Board met five (5) times on April 24, 2017, July 24, 2017, October 26, 2017, January 24, 2018 and March 26, 2018. 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 FY18 is given in the table below.



Mr. S. S. Kohli 00169907 Chairman & Independent Director 5 5

Mr. AKT Chari 00746153 Independent Director 5 5

Ms. Ritu Anand* 05154174 Independent Director 5 5

Mr. Vikram Limaye** 00488534 Nominee Director of IDFC Limited 1 1

Mr. Pavan Kaushal 07117387 Nominee Director of IDFC Limited 5 5

Mr. Suresh Menon 00737329 Nominee Director of Investor 5 5

Mr. Sunil Kakar*** 03055561 Nominee Director of IDFC Limited 4 4

* Appointed as an Independent Director w.e.f. April 24, 2017 (Previously Non-Executive Director)

** Resigned as a Director w.e.f. July 15, 2017

*** Appointed as a Director w.e.f. July 19, 2017

AUDIT COMMITTEE

During the year, the Audit Committee met four (4) times on April 24, 2017, July 24, 2017, October 26, 2017 and January 24, 2018. 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 FY18 is

given in the table below.

NAME OF THE DIRECTOR DIN POSITION NO OF MEETINGS HELD IN FY18

NO OF MEETING ATTENDED IN FY18




CREDIT COMMITTEE

During the year, The Credit Committee met nine (9) times on April 24, 2017, May 10, 2017, June 14, 2017, July 24, 2017, September 7, 2017,

October 26, 2017, November 28, 2017, January 15, 2018 and March 26, 2018 The attendance details of the Credit Committee meetings held

during FY18 is given in the table below:





Mr. Vikram Limaye* 00488534 Nominee Director of IDFC Limited 3 3

Mr. Sunil Kakar** 03055561 Nominee Director of IDFC Limited 6 6


* Resigned as a Director w.e.f. July 15, 2017

** Appointed as a Director w.e.f. July 19, 2017


During the year, The Nomination and Remuneration Committee met three (3) times on April 24, 2017, January 24, 2018 and March 26, 2018.

The attendance details of the Nomination and Remuneration Committee meetings held during FY18 is given in the table below:



Mr. AKT Chari 00746153 Chairman & Independent Director 3 3

Mr. S. S. Kohli 00169907 Independent Director 3 3



*Resigned as a Director w.e.f. July 15, 2017

**Appointed as a Director w.e.f. July 19, 2017


BOARD'S REPORT

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

During the year, The Corporate Social Responsibility Committee met one (1) time on April 24, 2017. The attendance details of the Corporate

Social Responsibility Committee held during FY18 is given in the table below:





Mr. Vikram Limaye** 00488534 Nominee Director of IDFC Limited 1 1

Mr. Sunil Kakar*** 03055561 Nominee Director of IDFC Limited 0 0

* Appointed as an Independent Director w.e.f. April 24, 2017** Resigned as a Director w.e.f. July 15, 2017*** Appointed as a Director w.e.f. July 19, 2017

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed

herewith as Annexure III.


During the year, separate meeting of Independent Directors held two (2) times on April 24, 2017 and January 24, 2018. The attendance

details of the said meeting held during FY18 is given in the table below:



Mr. S. S. Kohli 00169907 Independent Director 2 2



* Appointed as an Independent Director w.e.f. April 24, 2017

RISK COMMITTEE

During the year, The Risk Committee met two (2) times on April 24, 2017 and October 26, 2017. The attendance details of the Risk

Committee meetings held during FY18 is given in the table below:








* Resigned as a Director w.e.f. July 15, 2017** Appointed as a Director w.e.f. July 19, 2017

IT STRATEGY COMMITTEE

As per the provisions of RBI master direction RBI/DNBS/2016-17/53 DNBS.PPD.No.04/66.15.001/2016-17 dated June 8, 2017 pertaining to

“Information Technology Framework for NBFC sector, during the year, IT Strategy Committee was constituted having Ms. Ritu Anand as

Independent Director & Chairperson of the Committee and Mr. Sadashiv S. Rao (CEO), Mr. Sanjay Ajgaonkar, Mr. Dhananjay Yellulkar &

Mr. Madhusudan Warrior as Members. The Committee met once on November 28, 2017 and all the Members attended the meeting. The

Board approved the Information Technology (IT) Strategy Document, Information Security Management System (ISMS) Policy, IT Policy,

Cyber Security Policy and Cyber Crisis Management Plan on the recommendation of IT Strategy Committee.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was prepared and circulated to the Board for Annual

evaluation for FY17. The Directors evaluated the Board as a whole, its committee and Individual Directors including Chairman. The

exercise of Board evaluation was carried out and completed effectively.


BOARD'S REPORT

REMUNERATION POLICY

The Board had approved the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other

Employees which is formulated in line with the requirements of Companies Act, 2013.

AUDITORS

At the 4th Annual General Meeting of the Company held on June 9, 2017, Shareholders appointed Price Waterhouse & Co, Chartered

Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company,for a period of five years from the

conclusion of the 4th Annual General Meeting (AGM) of the Company to be held for FY17, subject to approval of the Shareholders of the

Company at the ensuing AGM and subsequent ratification on annual basis. The Audit Committee and Board of Directors of the Company

at their respective meetings held on April 20, 2018 have recommended the appointment of PWC.

PWC have confirmed that their appointment, if ratified, would be in conformity with the provisions of Section 141 of the Companies Act,

2013 and have also indicated their willingness to be appointed.

The Resolution seeking ratification of appointment of PWC is included in the Notice of the ensuing Annual General Meeting. The Board

recommends the ratification of appointment of PWC, as the Statutory Auditors of the Company.

SECRETARIAL AUDIT REPORT

Pursuant to section 204 of the Companies act, 2013 and the rules made thereunder, the Company has appointed M/S. BNP & Associates,

Company Secretaries in practice, as Secretarial Auditors of the Company to undertake Secretarial Audit of the Company for FY18. 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 FY18.


Pursuant to the Secretarial Standard-I issued by the Institute of Company Secretaries of India pertaining to Board of Directors, the Company

confirms that all applicable Secretarial Standards have been duly complied with during the period under review.


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 revised “Policy on Related Party Transactions” at its meeting

held on October 24, 2016. The said policy is also uploaded on the website of the Company.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis,

Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly

assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits

of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal

Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the

Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and overall

risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.

The Risk Committee monitors and review Risk Management of the Company.



MATERIAL CHANGES / COMMITMENTS

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, 2018 till the date of this report.

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

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

the Company and its future operations.



The company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to create

awareness on this policy. No instances of Sexual Harassment were reported during the period under review.



(a) in the preparation of financial statements for the year ended March 31, 2018, the applicable accounting standards have been followed

along with proper explanation relating to material departures, if any;


reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at March 31, 2018 and of the profit and

loss of the Company for that period;


provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;


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

adequate and operating effectively.


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

ACKNOWLEDGMENTS

The Directors express their gratitude for the unstinted support and guidance received from IDFC Financial Holding Company Limited and

other group companies.


S. S. KOHLI

Chairman

Mumbai | May 30, 2018


ANNEXURE ISECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018[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 Members IDFC Infrastructure Finance Limited Naman Chambers C-32, G-Block, Bandra - Kurla Complex, Bandra (East) Mumbai 400 051.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by IDFC Infrastructure Finance Limited having CIN No. U67190MH2014PLC253944 (hereinafter called ‘the Company’) for the audit period covering the financial year ended on 31st March 2018 (‘the audit period’). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts / statutory compliances and expressing our opinion thereon.

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

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the audit period 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 (Issue and Listing of Debt Securities) Regulations, 2008.

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

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,

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

iv. Other laws as applicable specifically to the Company:

1. Infrastructure Debt Fund-Non-Banking Financial Companies (Reserve Bank) Directions, 2011;

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

3. Non-Banking Financial Companies – Corporate Governance (Reserve Bank) Directions, 2015.

We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India.

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

During the period under review, provisions of the following Act / Regulations were not applicable to the Company:

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

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

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

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

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

We further report that -

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

Adequate notice is given to all Directors to schedule the Board Meetings in compliance with the provisions of Section 173(3) of the Companies Act, 2013. Agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

Decisions at the meetings of the Board of Directors of the Company were carried through on the basis of majority. There were no dissenting views by any member of the Board of Directors during the period under review.

We further report that –

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


ANNEXURE ISECRETARIAL AUDIT REPORTWe further report that-

During the audit period, the Company has –

1. Allotted 850 units of 8.04% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each, aggregating to ` 85,00,00,000/- (Rupees Eighty-Five Crore Only) on Private Placement basis on 19.04.2017.

2. Allotted 1,010 units of 8.01% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each aggregating to ` 101,00,00,000/- (Rupees One hundred and One Crores Rupees Only) on Private Placement basis on 26.04.2017.

3. Allotted 1,010 units of 7.965% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each aggregating to ` 101,00,00,000/- (Rupees One hundred and One Crores Only) on Private Placement basis on 31.05.2017.

4. Allotted 1,000 units of 7.935% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each aggregating to ` 1,00,00,00,000/- (Rupees One hundred Crores Only) on private placement basis on 12.07.2017.

5. Allotted 820 units of 7.73% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each aggregating to RS. 82,00,00,000/- (Rupees Eighty Two Crores Only) on private placement basis on 31.08.2017.

6. Allotted 3,400 units of 7.73% of Secured Non-Convertible Debentures (NCDs) of ` 10,00,000/- each aggregating to ` 3,40,00,00,000/- (Rupees Three Forty Crores Only) on private placement basis on 19.09.2017.

7. Allotted 1,150 units of 7.99% Secured Non-Convertible Debenture in the nature of Bonds of Face Value of ` 10,00,000/- each aggregating to ` 115,00,00,000/- (Rupees One-Hundred Fifteen Crores Only) through Private placement basis on 28th November 2017.

8. Allotted 2,650 units of 8.08% Secured Non-Convertible Debenture in the nature of Bonds of Face Value of ` 10,00,000/- each aggregating to ` 2,65,00,00,000/- (Rupees Two-Hundred Sixty-Five Crore Only) through Private placement basis on 18th December 2017.

9. Allotted 500 units of 8.48% Secured Redeemable Non-Convertible Debenture in nature of Bonds of Face Value of ` 10,00,000/- each aggregating to ` 50,00,00,000/- (Rupees Fifty Crore Only) through Private placement basis on 6th February 2018.

10. Allotted 2,170 units of 8.49% Secured Redeemable Non-Convertible Debenture in nature of Bonds of Face Value of ` 10,00,000/- each aggregating to ` 2,17,00,00,000/- (Rupees Two Hundred and Seventeen Crores Only) through private placement basis on 22nd March 2018.


[Firm Regn. No. P2014MH037400]

Avinash Bagul Partner FCS No. 5578 /COP No. 19862

Date: April 17, 2018 Place: Mumbai

ANNEXURE I TO THE SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018

To,

The Members,


Our Secretarial Audit Report of even date is to be read along with this letter.

1. The compliance of provisions of all laws, rules, regulations, standards applicable to IDFC Infrastructure Finance Limited (the ‘Company’) is the responsibility of the management of the Company. Our examination was limited to the verification of records and procedures on test check basis for the purpose of issue of the Secretarial Audit Report.

2. Maintenance of secretarial and other records of applicable laws is the responsibility of the management of the Company. Our responsibility is to issue Secretarial Audit Report, based on the audit of the relevant records maintained and furnished to us by the Company, along with explanations where so required.

3. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial and other legal records, legal compliance mechanism and corporate conduct. The verification was done on test check basis to ensure that correct facts as reflected in secretarial and other records produced to us. We believe that the processes and practices we followed, provides a reasonable basis for our opinion for the purpose of issue of the Secretarial Audit Report.


5. Wherever required, we have obtained the management representation about the compliance of laws, rules and regulations and major events during the audit period.

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

For BNP & Associates Company Secretaries [Firm Regn. No. P2014MH037400]

Avinash Bagul Partner FCS No. 5578 /COP No. 19862

Date: April 17, 2018 Place: Mumbai





i) CIN U67190MH2014PLC253944


iii) Name of the Company IDFC INFRASTRUCTURE FINANCE LIMITED(Formerly known as IDFC Infra Debt Fund Limited)

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

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



Link Intime India Pvt. Ltd.*C 101, 247 Park, L.B.S. Marg,Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.

*Link Intime India Pvt Ltd. provides electronic connectivity services with depositories for the equity shares of the Company



SR. NO.

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

1. Finance to Infrastructure projects 66309 100


SR. NO.

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

% OF SHARES HELD APPLICABLE SECTION

1. IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 81.48 Section 2(46)

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 81.48 Section 2(46)






SHARES

A. Promoters

(1) Indian

a) Bodies Corp. 439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL

Sub-total (A) (1):- 439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL


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


439,999,994 6 440,000,000 81.48 439,999,994 6 440,000,000 81.48 NIL






SHARES


1. Institutions

a) Banks/FI 60,000,000 NIL 60,000,000 11.11 60,000,000 NIL 60,000,000 11.11 NIL

b) Insurance Companies 40,000,000 NIL 40,000,000 7.41 40,000,000 NIL 40,000,000 7.41 NIL

Sub-total (B)(1):- 100,000,000 NIL 100,000,000 18.52 100,000,000 NIL 100,000,000 18.52 NIL

2. Non-Institutions


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

100,000,000 NIL 100,000,000 18.52 100,000,000 NIL 100,000,000 18.52 NIL

C. Shares held by Custodian forGDRs & ADRs


Grand Total (A+B+C) 539,999,994 6 540,000,000 100 539,999,994 6 540,000,000 100


SR. NO.

SHAREHOLDER’S NAME SHAREHOLDING AT THE BEGINNING OF THE YEAR

SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES % OF TOTAL

SHARES OF THE

COMPANY

%OF SHARES PLEDGED /

ENCUMBERED TO TOTAL

SHARES


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES

1. IDFC Financial Holding Company Limited & its nominees

440,000,000 81.48 NIL 440,000,000 81.48 NIL NIL

TOTAL 440,000,000 81.48 NIL 440,000,000 81.48 NIL NIL

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


SR NO.

NAME OF SHAREHOLDERS* SHAREHOLDING AT THE BEGINNING OF THE YEAR

CHANGES IN THE SHAREHOLDING

DURING THE YEAR

CUMULATIVE SHAREHOLDING AT THE END OF THE YEAR

NO OF SHARES % OF TOTAL SHARES OF THE CO

INCREASE DECREASE NO OF SHARES % OF TOTAL SHARES OF THE CO

1. Housing Development Finance Corporation Limited

60,000,000 11.11 - - 60,000,000 11.11

2. SBI Life Insurance Company Limited 40,000,000 7.41 - - 40,000,000 7.41


V. INDEBTEDNESS

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

SECURED LOANS EXCLUDING DEPOSITS

UNSECUREDLOANS

DEPOSITS TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year 19,818,969,560 1,900,000,000 - 21,718,969,560

i) Principal Amount 19,150,000,000 1,900,000,000 - 21,050,000,000

ii) Interest due but not paid - - - -

iii) Interest accrued but not due 668,969,560 - 668,969,560

TOTAL (I+II+III) 19,818,969,560 1,900,000,000 - 21,718,969,560

Change in Indebtedness during the financial year

• Addition 15,105,076,236 6,000,000,000 - 21,105,076,236

• Reduction - 5,650,000,000 - 5,650,000,000

Net Change 15,105,076,236 350,000,000 - 15,455,076,236

Indebtedness at the end of the financial year

i) Principal Amount 33,710,000,000 2,250,000,000 - 35,960,000,000

ii) Interest due but not paid - - -

iii) Interest accrued but not due 1,214,045,796 - - 1,214,045,796

TOTAL (I+II+III) 34,924,045,796 2,250,000,000 - 37,174,045,796







SR. NO.


S S KOHLI AKT CHARI RITU ANAND

SURESH MENON

SUNILKAKAR

PAVAN KAUSHAL


Fee for attending board committee meetings 650,000 625,000 200,000 - - - 1,475,000

Commission - - - - - - -

Others, please specify - - - - - - -

TOTAL (1) 650,000 625,000 200,000 - - - 1,475,000

2. Other Non-Executive Directors

Fee for attending board committee meetings - - - 125,000 - - 125,000

Commission - - - - - - -

Others, please specify - - - - - - -

TOTAL (2) - - - 125,000 - - 125,000

TOTAL (B) = (1 + 2) 650,000 625,000 200,000 125,000 - - 1,600,000


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 TOTAL AMOUNT

CEO CFO CS

1. Gross salary

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

15,517,748 5,997,641 1,503,587 23,018,976

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 60,893 - 29,700 90,593

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

- - - -

2. Stock Option - - - -

3. Sweat Equity - - - -

4. Commission

- as % of profit - - - -

- others, specify... - - - -

5. Contribution to Provident & Other Funds 2,686,716 693,480 170,131 3,550,327

TOTAL (A) 18,959,659 6,691,121 1,703,418 27,354,198

During FY18 CEO, CFO & CS were paid bonus of ` 1.17 crore, ` 16.50 lacs & ` 8 lacs, respectively for FY17.




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 Infrastructure Finance Ltd. to mandatorily spend on CSR.

During the year, IDFC Infrastructure Finance Ltd. carried out CSR activities through its associate company, namely, IDFC Foundation,

a not-for-profit Company within the meaning of Section 8 of the Act, 2013 (erstwhile Section 25 of the Companies Act, 1956).




(c) be sustainable


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



(d) education



(g) disaster relief


(i) Others


Mr. S. S. Kohli

Mr. Sunil Kakar

Ms. Ritu Anand

3. Average net profit of the company for last three financial years – ` 4147.19 Lac

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) – ` 82.94 Lac


a) Total amount to be spent for the financial year: ` 82.94 Lac

b) Amount spent during the year: ` 82.94 Lac



6. In case the Company has failed to spend 2% of the average net profit of the last three financial years or any part thereof, the

company shall provide the reasons for not spending the amount in its Board report: Not Applicable

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

CSR objectives and Policy of the Company.

For IDFC Infrastructure Finance Ltd.

Place : Mumbai S. S. Kohli Sunil Kakar

Date : April 20, 2018 Chairman – CSR Committee Director

ANNEXURE IIICORPORATE SOCIAL RESPONSIBILITY (CSR)


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

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

SR. NO



AMOUNT OUTLAY

(BUDGET)


(1) DIRECT EXPENDITURE ON PROJECTS OR PROGRAMS

(2) OVER HEADS


UP TO THE REPORTING

PERIOD

AMOUNT SPENT : DIRECT OR THROUGH

IMPLEMENTING AGENCY

1. Promoting learning outcomes of under privileged students in night schools in Maharashtra Cl.(ii) promoting education Maharashtra-Mumbai

9.80

0.93 1.39

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

2. Promoting learning outcomes in 60 government primary schools in the backward blocks of Ramgarh and Kishangarh

Cl.(ii) promoting education Rajasthan - Alwar 0.70 1.33

3. Promoting Digital Literacy through Digishalas in government schools of Hoshangabad, Madhya Pradesh

Cl.(ii) promoting education Madhya Pradesh - Hoshangabad 0.74 1.08

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


0.83 1.21

Total 9.80 3.20 5.01

5. Program on improving access to water and sanitation in Odisha Cl.(i) Sanitation & Safe Drinking water Odisha 1.36 0.36 0.52

Total 1.36 0.36 0.52

6. Shwetdhara-Cattle Care Program to improve the productivity of milch animals and increase the income of small and marginal dairy farmers

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

44.31

4.35 5.60

7. Promoting Financial Inclusion by deploying interoperable Financial Inclusion Devices and organising Financial Literacy Programs


PAN India 37.92 38.79

Total 44.31 42.27 44.39

8. Research & studies on various social and economic issues directly impacting welfare of people Various clauses of Schedule VII PAN India 27.47 9.49 13.64

Total 27.47 9.49 13.64

Total Direct Expense of Project & Programmes (A) 55.32 63.56

Overhead Expense (B) 0.62 1.01

Total (A) + (B) 82.94 55.94 64.57


I D F C I N F R A S T R U C T U R E F I N A N C E L I M I T E D | 1 0 1

[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)



(2) OVER HEADS


UP TO THE REPORTING

PERIOD


IMPLEMENTING AGENCY

1. Promoting learning outcomes of under privileged students in night schools in Maharashtra Cl.(ii) promoting education Maharashtra-Mumbai

9.80

0.93 1.39

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

2. Promoting learning outcomes in 60 government primary schools in the backward blocks of Ramgarh and Kishangarh


3. Promoting Digital Literacy through Digishalas in government schools of Hoshangabad, Madhya Pradesh


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


0.83 1.21

Total 9.80 3.20 5.01

5. Program on improving access to water and sanitation in Odisha Cl.(i) Sanitation & Safe Drinking water Odisha 1.36 0.36 0.52

Total 1.36 0.36 0.52

6. Shwetdhara-Cattle Care Program to improve the productivity of milch animals and increase the income of small and marginal dairy farmers

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

44.31

4.35 5.60

7. Promoting Financial Inclusion by deploying interoperable Financial Inclusion Devices and organising Financial Literacy Programs


PAN India 37.92 38.79

Total 44.31 42.27 44.39

8. Research & studies on various social and economic issues directly impacting welfare of people Various clauses of Schedule VII PAN India 27.47 9.49 13.64

Total 27.47 9.49 13.64



Total (A) + (B) 82.94 55.94 64.57




TO THE MEMBERS OF IDFC INFRASTRUCTURE FINANCIAL LIMITED


1. We have audited the accompanying financial statements of IDFC Infrastructure Financial Limited (“the Company”), which comprise

the Balance Sheet as at March 31, 2018, 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.


2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”)

with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position,

financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India,

including the Accounting Standards specified under Section 133 of the Act, read with Rule 7(1) 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 design,





















Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements

give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting

principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit and its cash flows for

the year ended on that date.


9. As required by ‘the Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub-section

(11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of

the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure

B a statement on the matters specified in paragraphs 3 and 4 of the Order.





examination of those books.



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

with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act,

read with Rule 7(1) of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of

Directors, none of the directors is disqualified as on March 31, 2018 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 with reference to financial statements of the Company and the

operating effectiveness of such controls, refer to our separate Report in Annexure A.

(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 knowledge and belief and according to the information and

explanations given to us:

i The Company has disclosed the impact, if any, of pending litigations as at March 31, 3018. on its financial position in its

financial statements – Refer Note 26;

ii. The Company has made provision as at March 31, 2018, as required under the applicable law or accounting standards, for

material foreseeable losses, on long-term contracts. The Company did not have any derivative contracts as at March 31,

2018.

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

Company during the year ended March 31, 2018

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended [date]

For Price Waterhouse & Co Chartered Accountant LLP



Sharad Vasant

Partner

Membership Number 101119



Referred to in paragraph 10(f) of the Independent Auditors’ Report of even date to the members of IDFC Infrastructure Finance Limited on the financial statements for the year ended

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC Infrastructure Finance Limited (“the Company”) as

of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.













For Price Waterhouse & Co Chartered Accountant LLP Firm Registration Number: 304026E/E-300009 Chartered Accountants

Sharad VasantPartnerMembership Number 101119


ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT


Referred to in paragraph 9 of the Independent Auditors’ Report of even date to the members of IDFC Infrastructure Finance Limited on the financial statements for the year ended March 31, 2018

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

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties, as disclosed in Note 10 on fixed assets to the financial statements, are held in the name of the Company.

ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the said Order are not applicable to the Company.


iv. The Company is a Non-Banking Financial Company registered with the Reserve Bank of India and engaged in the business of financing. Also, the Company has not made any investments, or provided any guarantees or security to the parties covered under section 185 and section 186. Accordingly, the provisions of section 185 and section 186 are not applicable to the Company.



vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees state insurance, income tax, service tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.


viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.



xi. In our opinion and according to information and explanation given to us, the company does not have an Executive or a Whole-time Director hence reporting under clause (xi) of the CARO 2016 is not applicable.


xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review39. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is required to, and has been registered under Section 45-IA of the Reserve Bank of India Act, 1934 as an Non-Banking Financial Company.

For Price Waterhouse & Co Chartered Accountant LLP Firm Registration Number: 304026E/E-300009 Chartered Accountants

Sharad VasantPartnerMembership Number 101119


ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT



This is the Balance Sheet referred to in our report of even date

For Price Waterhouse & Co Chartered Accountant LLPFirm Registration Number: 304026E/E-300009 Chartered Accountants

For and on behalf of the Board of Directors ofIDFC Infrastructure Finance Limited

Sharad VasantPartnerMembership Number:101119

Sunil KakarDirector

S. S. KohliDirector

Sadashiv S RaoChief Executive Officer

Mumbai | April 20, 2018Sanjay AjgaonkarChief Financial Officer

Amol Ranade Company Secretary

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

NOTES ` `



(a) Share capital 3 5,400,000,000 5,400,000,000

(b) Reserves and surplus 4 1,988,650,636 1,123,703,988

7,388,650,636 6,523,703,988

Non Current liabilities

(a) Long-term borrowings 5 33,710,000,000 19,150,000,000

(b) Long-term provisions 6 168,810,997 107,313,061

33,878,810,997 19,257,313,061

Current liabilities

(a) Short-term borrowings 7 2,227,806,803 1,886,852,790

(b) Trade payables

(i) Total outstanding dues of micro enterprises and small enterprises 8 - -

(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises

8 2,480,747 2,030,063

(c) Other current liabilities 9 1,252,998,203 700,465,308

3,483,285,753 2,589,348,161

TOTAL 44,750,747,386 28,370,365,210

ASSETS

Non-current assets

(a) Fixed assets

Property, plant and equipment 10 6,809,176 5,174,229

Capital work-in-progress 4,289,706 -

(b) Long term loans and advances

(i) Loans 11 39,945,404,124 25,675,430,418

(ii) Others 12 464,870,688 173,647,462

40,421,373,694 25,854,252,109

Current assets

(a) Current investments 13 1,580,000,000 1,252,772,423

(b) Cash and bank balance 14 320,093,903 32,193,364

(c) Short-term loans and advances

(i) Loans 11 2,257,345,304 1,152,834,987

(ii) Others 15 8,889,195 6,152,084

(d) Other current assets 16 163,045,290 72,160,243

4,329,373,692 2,516,113,101

TOTAL 44,750,747,386 28,370,365,210

The accompanying notes are an integral part of these financial statements (See notes 1 to 38)


This is the Statement of Profit and Loss account referred to in our report of even date




Sunil KakarDirector

S. S. KohliDirector





FOR THE YEAR ENDED

MARCH 31, 2018

FOR THE YEAR ENDED

MARCH 31, 2017

NOTES ` `

I INCOME


TOTAL INCOME (I) 3,365,175,974 2,069,320,213

II EXPENSES


Finance Costs 19 2,280,770,790 1,194,204,987

Provisions and contingencies 20 61,497,936 59,242,710

Other expenses 21 43,681,460 29,025,614

Depreciation 10 3,210,505 2,170,390

TOTAL EXPENSES (II) 2,500,229,326 1,360,905,156

III PROFIT BEFORE TAX (I - II) 864,946,648 708,415,057

IV TAX EXPENSE 34 - -

V PROFIT FOR THE YEAR (III - IV) 864,946,648 708,415,057

Earnings per equity share (nominal value of share ` 10 each) 25

Basic (`) 1.60 1.31

Diluted (`) 1.59 1.30

The accompanying notes are an integral part of these financial statements (See notes 1 to 38)





NOTES ` `


Profit before tax 864,946,648 708,415,057

Adjustments for

Depreciation 10 3,210,505 2,170,390

Provision for contingencies 20 61,497,936 59,242,710

Interest expense accrued on borrowings 19 (i) 2,261,793,524 1,180,469,281

Interest paid on Borrowings (1,725,763,275) (747,817,600)

Interest income 17 (a) (3,203,206,842) (1,863,425,300)

Profit on sale of current investments 17 (105,820,147) (143,426,862)

Interest received 3,112,321,796 1,834,373,022

Operating profit before working capital changes 1,268,980,145 1,030,000,698


(Increase) in Short term loans & advances (2,737,111) (3,690,762)

Increase / (Decrease) in Trade payables 450,684 (41,425,548)

Increase in other current liabilities 7,456,659 25,343,018

CASH GENERATED FROM OPERATIONS 1,274,150,377 1,010,227,406

Purchase of current investments (48,508,682,500) (36,611,537,866)

Sale proceeds of current investments 48,287,275,069 36,567,192,305

Infrastructure Loans disbursed (net of repayments) (15,374,484,023) (14,810,677,363)

Direct taxes paid (net of refund) (291,223,226) (113,273,484)

NET CASH USED IN OPERATING ACTIVITIES (A) (14,612,964,303) (13,958,069,002)


Purchase of fixed assets 10 (4,845,452) (2,396,637)

Capital work-in-progress (4,289,706) -

NET CASH USED IN INVESTING ACTIVITIES (B) (9,135,158) (2,396,637)


Proceeds from long term Borrowings 14,560,000,000 11,070,000,000

Proceeds from short term Borrowings 6,000,000,000 3,100,000,000

Repayment of shot term Borrowings (5,650,000,000) (1,200,000,000)

NET CASH FROM FINANCING ACTIVITIES (C) 14,910,000,000 12,970,000,000

NET (DECREASE) / INCREASE IN CASH & CASH EQUIVALENTS (A+B+C) 287,900,539 (990,465,639)

Cash and cash equivalents as at the beginning of the year 14 32,193,364 1,022,659,003

Cash and cash equivalents as at the end of the year 14 320,093,903 32,193,364

287,900,539 (990,465,639)

This is the Cash flow statement referred to in our report of even date




Sunil KakarDirector

S. S. KohliDirector






01 BACKGROUND IDFC Infrastructure Finance Limited (‘the Company’) is a public limited company, incorporated in India on March 7, 2014. The

Company has received a Non-Banking Financial Company (NBFC) license from Reserve Bank of India (RBI) on September 22, 2014. The object of the Company is to undertake infrastructure debt fund activities i.e. re-financing existing debt of infrastructure companies, thereby creating fresh headroom for banks to lend to new infrastructure projects.


A. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (“the 2013 Act”) and the relevant provisions of the 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The company complies with the prudential norms for income recognition, asset classification and provisioning as prescribed by the Reserve bank of India (RBI) for non-deposit taking Non-banking Finance Companies (NBFC-ND) and other directives issued by RBI from time to time. The accounting policies adopted in preparation of financial statements are consistent with those followed in the previous year.

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.

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. These assumptions and estimates are based upon management’s evaluation of the relevant facts and circumstances upto and as on the date of financial statements. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and any revisions or the differences between the actual results and the estimates are recognised in the current and future periods.

C. CASH AND CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

D. CASH FLOW STATEMENT

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

E. LOANS

In accordance with the RBI guidelines, all loans are classified under any of four categories i.e. (i) standard assets (ii) sub-standard assets (iii) doubtful assets and (iv) loss assets.

F. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment 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 de-recognition 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

Depreciation is provided from the date of capitalisation, on a straight line method, over the estimated useful life of each asset as prescribed in Schedule II of the Companies Act, 2013 as follows:-

Vehicles 4 years

Computers 3 years

Office equipment (mobiles) 2 years

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.


1 10 | I D F C A N N U A L R E P O R T 2 0 1 7 – 2 0 1 8

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

investments are made, are classified as current investments. All other investments are classified as long term investments. 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 funded and actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit and Loss for the year.

Compensated absences

Employees are not permitted to 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, being in the nature of recovery of costs, on processing of loans are recognised upfront (net of Goods and Services tax) 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 weighted average cost for current investments and long term investments.

N. POLICY ON SEGMENT The Company is a Non-Banking Financial Company and undertakes infrastructure debt fund activities i.e. re-financing existing debt

of infrastructure companies. As such, there are no separate reportable segments (including geographical segments)

O. EARNINGS PER SHARE Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding

during the year. Diluted earnings per share is computed by dividing the profit after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the year, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each year.

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

for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws. The accounting treatment for income-tax in respect of the Company’s income is based on Accounting Standard



22 on “Accounting for Taxes on Income” as notified under the Companies (Accounting Standards) Rules, 2006. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected in the Balance Sheet.

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

As the income of the Company is exempt under section 10(47) of the Income Tax Act, 1961, no deferred tax asset/liability has been recognised from October, 2014, post obtaining registration with RBI as Infrastructure Debt Fund Non - Banking Financial Company (IDF-NBFC).

Q. PROVISIONS AND CONTINGENCIES Contingent provision against standard assets is made at 0.40% of the outstanding standard assets, in accordance with the RBI

guidelines.

The policy of provisioning against non performing loans and advances has been decided by the Management considering norms prescribed by the RBI under Non Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2007. As per the policy adopted, the provision against non performing loans and advances are created on a conservative basis, taking into account Management’s perception of the higher risk associated with the business of the Company.

R. DERIVATIVE CONTRACTS Interest rate swaps

Interest rate swaps are booked with the objective of managing the interest rate risk on liabilities. Interest rate swaps in the nature of hedge are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of the hedge swaps is amortised over the life of the swap or underlying liability, whichever is shorter.

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

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

T. GOODS AND SERVICES TAX (GST) INPUT CREDIT GST input credit is accounted for in the books in the period in which the underlying goods/services are received and when there is

no uncertainty in availing / utilising the credit.

03 SHARE CAPITAL


NUMBER ` NUMBER `

Authorised shares


Issued, subscribed & fully paid-up shares


(Of the above, 440,000,000 equity shares are held by IDFC Financial Holding Company Limited & its nominees; IDFC Limited is the Ultimate Holding Company)

TOTAL 5,400,000,000 5,400,000,000



NUMBER ` NUMBER `

Outstanding at the beginning of the year 540,000,000 5,400,000,000 540,000,000 5,400,000,000


OUTSTANDING AT THE END OF THE YEAR 540,000,000 5,400,000,000 540,000,000 5,400,000,000



(b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one

vote per share.

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

The dividend proposed by the Board of Directors is subject to the approval of shareholders at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the Balance Sheet date as per the provisions of revised Accounting Standards 4.


EQUITY SHARES AS AT MARCH 31, 2018 AS AT MARCH 31, 2017


IDFC Financial Holding Company Limited and its nominees

440,000,000 81.48% 440,000,000 81.48%

Housing Development Finance Corporation Limited 60,000,000 11.11% 60,000,000 11.11%

SBI Life Insurance Company Limited 40,000,000 7.41% 40,000,000 7.41%

(d) Movement in stock options granted under the ESOS is as under:



NUMBER NUMBER

Outstanding as at beginning of the year 6,443,000 3,901,000

Add: Granted during the year - 2,542,000

Less: Exercised during the year - -

Less: Lapsed / forfeited during the year 2,400,000 -

OUTSTANDING AS AT THE END OF THE YEAR 4,043,000 6,443,000

Excercisable at the end of the year 1,010,750 975,250

Range of exercise prices (`) 10 10

Weighted average exercise price (`) 10 10

Weighted average remaining contractual life of the option (years) 4.47 3.54

Weighted average fair value of an option (`) 4.72 4.79

The fair value for the above impact analysis is estimated on the date of grant using the Black-Scholes model with the following assumptions:

Variables AS AT MARCH 31, 2018


1. Risk Free Interest Rate

No Options granted During

the year

7.50%

2. Expected Life 4.69

3. Expected Volatility 44.83%

4. Dividend Yield -

5. Price of the underlying share in market at the time of the option grant 10.00

Had the Company followed fair value method of accounting of employee stock option, the impact of fair value method on net profit and earnings per share is as follows:



Net Profit (as reported) 864,946,648 708,415,057

Less: Impact of incremental cost under fair value approach 610,660 14,576,081

Net Profit: (pro-forma) 864,335,988 693,838,977

Basic earnings per share (as reported) (in `) 1.602 1.312

Basic earnings per share (pro-forma) (in `) 1.601 1.285

Diluted earnings per share (as reported) (in `) 1.587 1.297

Diluted earnings per share (pro-forma) (in `) 1.586 1.271



04 RESERVES AND SURPLUS (REFER NOTE 32)



` `

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

Opening balance 226,040,000 84,040,000

Add : Transferred from surplus in Statement of Profit and Loss 173,000,000 142,000,000

CLOSING BALANCE 399,040,000 226,040,000

(b) Surplus in the Statement of Profit and Loss

Opening balance 897,663,988 331,248,931

Profit for the year 864,946,648 708,415,057

Less: Transfer to Special Reserve u/s. 45-IC of RBI Act, 1934 173,000,000 142,000,000

CLOSING BALANCE 1,589,610,636 897,663,988

TOTAL RESERVES AND SURPLUS 1,988,650,636 1,123,703,988

05 LONG-TERM BORROWINGS`


NON-CURRENT CURRENT NON-CURRENT CURRENT

Debentures (non convertible) (secured) 33,710,000,000 - 19,150,000,000 -

[see note (a), (b) below and note 35]

TOTAL LONG-TERM BORROWINGS 33,710,000,000 - 19,150,000,000 -

(a) The above borrowings are secured by way of mortgage of freehold land and a first floating pari passu charge by way of hypothecation of receivables of the Company arising out of its investments, loans, current assets, loans and advances, both present and future, excluding investments in and other receivables from subsidiaries and affiliates of the IDFC group and lien marked assets.

(b) In terms of the RBI circular (Ref No. DNBR.PD. 008 / 03.10.119 / 2016-17 dated September 01, 2016) no borrowings remained overdue as on March 31, 2018. (Previous Year ` Nil).

06 LONG-TERM PROVISIONS



` `

Contingent provision against standard assets [see note (a) & (b) below] 168,810,997 107,313,061

168,810,997 107,313,061

(a) A contingent provision against standard assets has been created at 0.40% of the outstanding standard assets (Ref. No. DNBR.PD. 008 / 03.10.119 / 2016-17 dated September 01, 2016).

(b) Movement in contingent provision against standard assets during the year is as under:

Opening balance 107,313,061 48,070,351

Additions during the year 61,497,936 59,242,710

CLOSING BALANCE 168,810,997 107,313,061

07 SHORT-TERM BORROWINGS



` `

Commercial papers (unsecured)

Face value 2,250,000,000 1,900,000,000

Less: Unexpired discount [see note (a) below] 22,193,197 13,147,210

2,227,806,803 1,886,852,790

(a) Unexpired discount on commercial papers is net of ` 22,880,053 (Previous Year ` 14,247,190) which is charged to profit and loss account during the year

(b) Maximum balance outstanding during the year ` 3,250,000,000 (Previous Year ` 1,900,000,000)



08 TRADE PAYABLES



` `

Total outstanding dues of micro enterprises and small enterprises (see note 28) - -

Total outstanding dues of creditors other than micro enterprises and small enterprises 1,386,480 990,818

Others 1,094,267 1,039,245

TOTAL 2,480,747 2,030,063




` `

Interest accrued but not due on borrowings 1,214,045,796 668,969,560

Statutory dues 3,092,263 2,604,190

Other liabilities 542,593 378,443

Payable for employee benefits 35,317,551 28,513,115

TOTAL 1,252,998,203 700,465,308

10 TANGIBLE ASSETS

GROSS BLOCK ACCUMULATED DEPRECIATION NET BLOCK

BALANCE AS AT

APRIL 1, 2017

ADDITIONS DISPOSALS BALANCE AS AT

MARCH 31, 2018

BALANCE AS AT

APRIL 1, 2017

DEPRECIATION CHARGE FOR

THE YEAR

ON DISPOSALS

BALANCE AS AT

MARCH 31, 2018

BALANCE AS AT

MARCH 31, 2018

BALANCE AS AT

MARCH 31, 2017

(`) (`) (`) (`) (`) (`) (`) (`) (`) (`)

Freehold Land

(Refer note below)

382,500 - - 382,500 - - - - 382,500 382,500

(Previous year) (382,500) - - (382,500) - - - - (382,500) -

Vehicles (owned) 7,911,136 4,505,619 - 12,416,755 3,702,675 2,834,236 - 6,536,911 5,879,844 4,208,461

(Previous year) (6,182,910) (1,728,226) - (7,911,136) (1,796,596) (1,906,079) - (3,702,675) (4,208,461) -

Computers 513,747 249,467 - 763,214 174,126 220,285 - 394,411 368,803 339,621

(Previous year) (179,213) (334,534) - (513,747) (15,630) (158,496) - (174,126) (339,621) -

Office Equipments 352,752 90,366 - 443,118 109,105 155,984 - 265,089 178,029 243,647

(Previous year) (18,875) (333,877) - (352,752) (3,290) (105,815) - (109,105) (243,647) -

TOTAL TANGIBLE

ASSETS

9,160,135 4,845,452 - 14,005,587 3,985,906 3,210,505 - 7,196,411 6,809,176 5,174,229

(previous year) (6,763,498) (2,396,637) - (9,160,135) (1,815,516) (2,170,390) - (3,985,906) (5,174,229) -

Note: The free hold land has been mortgaged in favour of Debenture Trustees against the secured debentures issued by the Company.

11 LOANS (CONSIDERED GOOD, UNLESS STATED OTHERWISE) (SEE NOTE 24)



` ` ` `

Rupee loans [see note (a), (b) and (c) below] 27,180,259,998 1,839,088,072 19,282,177,996 971,997,744

Debentures [see note (a), (b), (c) and (d) below] 12,765,144,126 418,257,232 6,393,252,422 180,837,243

TOTAL 39,945,404,124 2,257,345,304 25,675,430,418 1,152,834,987

(a) The above amount includes:

Secured [see note 11(b)] 39,945,404,124 2,257,345,304 25,675,430,418 1,152,834,987

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

Of the above, the creation/perfection of security is under process for loans amounting to ` 193 crores

(c) The classification of loans under the RBI guidelines is as under:



` `

(i) Standard assets 42,202,749,428 26,828,265,405

(ii) Sub-standard assets - -

(iii) Doubtful assets - -

(iv) Loss assets - -

TOTAL 42,202,749,428 26,828,265,405

(d) Debentures (Redeemable) (Other than group companies)


FACE VALUE (`)

QUANTITY VALUE (`) COUPON (%)

FACE VALUE (`)

QUANTITY VALUE (`) COUPON (%)

Ashoka Highways (Durg) Limited 100,000 20,000 1,889,763,780 9.40 100,000 20,000 1,973,753,280 9.40

Bangalore Elevated Tollway Limited

97,075 11,949 1,135,200,000 9.05 - - - -

East-North Interconnection Company Limited

1,000,000 600 619,430,090 9.25 1,000,000 600 621,936,975 9.25

GP Wind Jangi Private Limited 1,000,000 500 486,666,667 9.25 - - - -

Hyderabad Yadgiri Tollway Private Limited

100,000 19,797 1,979,700,000 9.50 100,000 11,937 1,193,700,000 9.50

Jodhpur Pali Expressway Limited 10,000 144,565 1,441,300,000 9.35 - - - -

Kudgi Transmission Limited 1,000,000 895 941,305,892 9.14 - - - -

NK Toll Road Limited 100,000 5,000 427,087,574 10.20 100,000 5,000 470,875,762 10.20

NRSS Xxxi (B) Transmission Limited

1,000,000 1,041 1,062,755,751 8.52 - - - -

Renew Akshay Urja Private Limited 1,000,000 500 497,195,122 8.70 - - - -

Renew Wind Energy Jath Limited 937,916 1,090 1,010,679,449 9.75 966,741 1,090 1,050,644,635 9.75

Shreenathji - Udaipur Tollway Private Limited

100,000 10,000 997,500,000 8.60 - - - -

Ulundurpet Expressways Private Limited

97,500 7,087 694,817,033 9.90 98,000 7,087 699,404,518 9.90

MVR Infrastructure Tollways Limited

- - - - 9,582 59,000 563,774,495 10.05

TOTAL 13,183,401,358 6,574,089,665

12 LONG TERM LOANS AND ADVANCES-OTHERS (UNSECURED, CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Advance payment of income tax 464,870,688 173,647,462

(net of provision for tax of ` 12,180,500, Previous year ` 12,180,500)

TOTAL 464,870,688 173,647,462



13 CURRENT INVESTMENTS



` `

Investment in mutual funds (unquoted; at lower of cost and fair value, unless stated otherwise)

749,822.273 units of IDFC Cash Fund-Direct Plan-Growth (previous year 634,348.210 units) 1,580,000,000 1,252,772,423

(Face value per unit ` 1,000)

TOTAL 1,580,000,000 1,252,772,423

Aggregate amount of investments in unquoted investments

Cost 1,580,000,000 1,252,772,423

Market value 1,582,282,084 1,253,297,744

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

14 CASH AND CASH EQUIVALENTS (SEE NOTE 24)



` `

Balance with bank:

In current account 320,093,903 32,193,364

TOTAL 320,093,903 32,193,364

15 SHORT-TERM LOANS AND ADVANCES (CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Prepaid expenses 6,280,060 5,184,643

Supplier Advance 87,367 84,857

Employee Advance - 17,350

Less: Provision for doubtful advance - (17,350)

Other Advance (see note 22 and 24) 850,512 321,272

Balances with government authorities - cenvat credit receivable 1,671,256 561,312

TOTAL 8,889,195 6,152,084

16 OTHER CURRENT ASSETS (CONSIDERED GOOD, UNLESS STATED OTHERWISE)



` `

Interest accrued on loans 110,964,983 54,794,319

Interest receivable on debentures 52,080,307 17,365,924

TOTAL 163,045,290 72,160,243






` `

Interest [see note (a) below] 3,203,206,842 1,863,425,300

Other financial services -Fees 56,148,985 62,468,051

Profit on sale of current investments 105,820,147 143,426,862

TOTAL 3,365,175,974 2,069,320,213

(a) Details of interest income

Interest on loans [see note (i) below] 3,203,206,842 1,862,319,265

Interest on deposits (see note 24) - 1,106,035

TOTAL 3,203,206,842 1,863,425,300

(i) Interest on loans includes interest on debentures & bonds of ` 875,227,282 (Previous Year ` 429,439,967).




` `

Salaries 101,073,492 67,486,113

Contribution to gratuity funds (see note 22 (ii)) 1,838,698 1,935,198

Contribution to provident and other funds (see note 22 (i)) 6,454,904 5,971,101

Staff welfare expenses 1,701,541 869,043

TOTAL 111,068,635 76,261,455

19 FINANCE COSTS



` `

Interest expense

(i) Borrowings (see note 24) 2,261,793,524 1,180,469,281

(ii) Others-Interest on delayed payment of taxes - 29,381

Other borrowing cost (see note 24) 18,977,266 13,706,325

TOTAL 2,280,770,790 1,194,204,987

20 PROVISIONS AND CONTINGENCIES



` `

Contingent provision against standard assets (see note 6) 61,497,936 59,242,710

TOTAL 61,497,936 59,242,710



21 OTHER EXPENSES



` `

Professional fees 3,261,875 2,097,163

Rates and taxes 3,776,269 2,024,180

Repairs & maintenance 3,178,732 2,315,599

Insurance charges (9,268) 1,914


Printing and stationery 34,730 53,886

Communication costs 552,567 480,545

Stamp duty and registration fees 9,900 7,550

Directors' sitting fees 1,600,000 1,050,000

ESOP compensation to Non executive Director 2,011,200 -

Shared service cost [see note (a) below & note 24)] 13,750,388 14,720,514

Contribution towards corporate social responsibility (CSR) (see note 24 & note 33) 8,294,400 3,170,870

Auditor's remuneration (b) 1,937,192 1,313,285

Advertising & publicity 329,216 121,440

Miscellaneous expenses 2,992,768 90,605

TOTAL 43,681,460 29,025,614

(a) Shared service costs includes amount paid to fellow subsidiaries ` 13,810,713, (previous year ` 14,720,514) and amount recovered (net of payments made) from ultimate holding company ` 60,325, (previous year ` Nil) towards a Service Level Agreement.

(b) Breakup of Auditors’ remuneration

Audit fees 500,000 400,000


Other Services 1,306,500 860,000

Out-of-pocket expenses 30,692 3,285

1,937,192 1,313,285

22 In accordance with Accounting Standard 15 on ‘Employee Benefits’ specified under Section 133 of the Companies Act, 2013, 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 3,814,749 3,373,958

Superannuation fund 428,742 347,933

Pension fund 2,211,413 2,249,211

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 24,191,126 19,857,027

Current service cost 2,514,443 1,972,460

Interest cost 1,824,966 1,666,024

Liabilities assumed on acquisition 930,823 -

Benefits paid (46,277) -

Actuarial loss/(gain) (1,493,757) 695,615

Liability at the end of the year 27,921,324 24,191,126





` `

Fair value of plan assets:

Fair value of plan assets at the beginning of the year 24,512,398 16,343,078

Expected return on plan assets 1,824,812 1,295,529

Assets acquired on Acquisition/(Distributed on Divestiture) 697,299 -

Contributions 1,951,701 5,770,418

Benefits paid (46,277) -

Actuarial gain on plan assets (584,334) 1,103,373


Amount recognised in the Balance sheet under 'Other current liabilities'-payable to Gratuity Fund - -

Amount recognised in the Balance Sheet under 'Loans and advances' 434,275 321,272

Actual return on plan assets :


Actuarial gain on plan assets - -

Actual return on plan assets 1,240,478 2,398,902

Amount recognised in the Balance Sheet:



Amount recognised in the Balance sheet under 'Other current liabilities'-payable to Gratuity Fund - -

Amount recognised in the Balance Sheet under 'Loans and advances' 434,275 321,272

Expense recognised in the Statement of Profit and Loss :


Interest cost 1,824,966 1,666,024

Expected return on plan assets (1,824,812) (1,295,529)

Net actuarial (gain)/loss recognised during the year (909,423) (407,758)

Losses/(gains) on acquisition/divestiture 233,524 -

Expense recognised in the Statement of Profit and Loss under 'Employee benefits expense' 1,838,698 1,935,197

Reconciliation of the Asset/(liability) recognised in the Balance Sheet:

Opening net asset / (liability) 321,272 (3,513,949)

Expense recognised 1,838,698 1,935,197

Contribution by the Company 1,951,701 5,770,418

Expected employer's contribution next year 2,000,000 2,000,000

Experience adjustments:

Defined benefit obligation 27,921,324 24,191,126

Plan assets 28,355,599 24,512,398

Recoverable on short settled Liability on divestiture - -

Surplus/(Deficit) before contribution 434,275 321,272

Contribution made by Company - -

Surplus/(Deficit) 434,275 321,272

Experience adjustments on plan liabilities (528,325) (212,912)

Experience adjustments on plan assets (583,334) 1,103,373

Investment pattern:

Insurer managed funds 28,355,599 24,512,398

Principal assumptions:

Discount rate (p.a.) 7.95% 7.15%

Expected rate of return on assets (p.a.) 7.50% 7.50%

Salary escalation rate (p.a.) 8.00% 8.00%

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



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

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

I. Ultimate Holding Company: IDFC Limited

II. Holding company: IDFC Financial Holding Company Limited

III. Fellow Subsidiaries

i) IDFC Bank Limited

ii) IDFC Foundation

iii) IDFC Asset Management Company Limited

IV. Key Management personnel:

i) Sadashiv S. Rao - Chief Executive Officer

ii) Sanjay Ajgaonkar - Chief Financial Officer

iii) Amol Ranade - Company Secretary

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

NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS AT MARCH 31, 2018


` `

A ULTIMATE HOLDING COMPANY

1 IDFC Limited

I Expense

Shared services cost expense (*) 111,732 -

Shared services cost recovery (*) (172,057) -

Interest expenses on Non Convertible Debentures issued 11,396,121 -

Charges paid for use of hardware (*) 181,198 92,343

II Assets / Transactions

Shared service cost recoverable (*) 172,057 -

III Liabilities / Transactions

Non Convertible Debentures issued and outstanding 495,000,000 -

Interest on Non Convertible Debentures issued 11,396,121 -

B HOLDING COMPANY

1 IDFC Financial Holding Company Limited

I Liabilities / Transactions

Outstanding equity share capital 4,400,000,000 4,400,000,000

C FELLOW SUBSIDIARIES

1 IDFC Bank Limited

I Income

Interest on Fixed deposits - 1,106,035

Processing fees on loan reimbursed 8,126,150 4,785,908

Gain on unwinding of Interest Rate Swap 400,000 -

II Expense

Shared services cost expense (*) 13,810,713 14,412,154

Arranger fees paid (*) 1,734,863 583,878

III Assets/Transactions

Fixed deposits placed - 177,000,000

Fixed deposits matured - 1,198,000,000

Assignment of third party loans 1,005,083,562 736,206,821

Receivable on fair value of swap book - 122,810

Balance in current account 320,092,274 31,680,248

Iv Off balance-sheet exposure

Interest Rate swap (Notional principal) - 850,000,000



NAME OF RELATED PARTY, NATURE OF RELATIONSHIP & PARTICULARS AS AT MARCH 31, 2018


` `

2 IDFC Foundation

I Expense

Contribution towards corporate social responsibility (CSR) 8,294,400 3,170,870

3 IDFC Asset Management Company Limited

I Expense

Charges paid for use of hardware / server (*) 153,043 16,685

(*) The amounts exclude Goods and Services tax /service tax expensed out in the statement of profit and Loss

D REMUNERATION TO KEY MANAGEMENT PERSONNEL:(i) Sadashiv S Rao - Chief Executive Officer Remuneration paid 30,659,659 25,844,532

(ii) Sanjay Ajgaonkar -Chief Financial Officer Remuneration paid 8,341,121 7,887,641

(iii) Amol Ranade - Company Secretary Remuneration paid 2,503,418 3,001,194

25 In accordance with Accounting Standard 20 on ‘Earnings Per Share’ specified u/s 133 of Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014:



Profit after tax (`) 864,946,648 708,415,057

Weighted average number of shares for computation of basic earnings per share 540,000,000 540,000,000

Weighted average number of shares for computation of diluted earnings per share 544,957,098 546,019,488

Basic earnings per share (`) 1.60 1.31

Diluted earnings per share (`) 1.59 1.30

Nominal value per share (`) 10 10

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



Basic earnings per share (`) 1.60 1.31

Effect of outstanding stock options (0.0146) (0.0145)

Diluted earnings per share (`) 1.59 1.30

The basic earning per share has been computed by dividing the net profit after tax for the year available for equity shareholders by the weighted average number of equity shares for the respective years, whereas the diluted earning per share has been computed by dividing the net profit after tax for the year available for equity shareholders by the weighted average number of equity shares, after giving dilutive effect of the outstanding stock options for the respective years. The relevant details as described above are as follows:



Weighted average number of shares for computation of basic earnings per share 540,000,000 540,000,000

Dilutive effect of outstanding stock options 4,957,098 6,019,488

Weighted average number of shares for computation of diluted earnings per share 544,957,098 546,019,488

26 Contingent liabilities and commitments (to the extent not provided for):



A Contingent liabilities

(i) Claims not acknowledged as debts in respect of :

Income-tax demands under appeal (net of amounts provided) 14,898,246 -

B Capital commitments

(i) Estimated amount of contracts remaining to be executed on capital account (net of advances)

2,063,249 -

27 The Company has unwound interest rate swaps in the nature of ‘fixed / floating’ or ‘floating / fixed’ for notional principal during current year. The amount of ` Nil outstanding as on March 31, 2018 (Previous Year ` 850,000,000) for varying maturities linked to various benchmarks for asset liability management and hedging. (Refer note 24)



28 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:



a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year

Nil Nil

b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

Nil Nil

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

Nil Nil

d) the amount of interest accrued and remaining unpaid at the end of each accounting year Nil Nil

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

Nil Nil

The above information takes into account only those suppliers whose response to inquiries made by the Company for this purpose has been received.

29 The following additional information is disclosed in terms of the RBI circular (Ref No. DNBR.PD. 008 / 03.10.119 / 2016-17 dated September 01, 2016) and RBI circular DNBR(PD) CC No. 053 / 03.10.119 / 2015-16 :

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



i) CRAR (%) 22.09% 28.96%

ii) CRAR - Tier I Capital (%) 21.60% 28.49%

iii) CRAR - Tier II Capital (%) 0.49% 0.47%

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

v) Amount raised by issue of Perpetual Debt Instruments - -

(b) Details of Investments are set out below:



` `

1 VALUE OF INVESTMENTS

(i) Gross Value of Investments

(a) In India 1,580,000,000 1,252,772,423


(A) 1,580,000,000 1,252,772,423

(ii) Provision for depreciation

(a) In India - -


(B) - -

(iii) Net Value of Investments

(a) In India 1,580,000,000 1,252,772,423


(A-B) 1,580,000,000 1,252,772,423

2 MOVEMENT OF PROVISIONS HELD TOWARDS DEPRECIATION ON INVESTMENTS.

(i) Opening balance - -

(ii) Add: Provisions made during the year - -

(iii) Less: Write-offs / write-back of excess provisions during the year - -

(iv) CLOSING BALANCE - -



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

`






1 Related parties

(a) Subsidiaries - - - -

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

(c) Other related parties - - - -

2 Other than related parties 1,582,282,084 1,580,000,000 1,253,297,744 1,252,772,423

TOTAL 1,582,282,084 1,580,000,000 1,253,297,744 1,252,772,423

(d) Disclosure on Risk exposure on derivatives

(A) Qualitative disclosures:

(a) Structure and organisation for management of risk in derivatives trading, the scope and nature of risk measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:

The Company undertakes transactions in interest rate swaps for hedging the interest rate risks on the balance sheet. These include the hedging of interest rate on fixed rate rupee denominated liabilities.

The Company’s derivative transactions are governed by the foreign exchange and interest rate risk management policy, as approved by the Board. The risk limits are set up and reviewed periodically and the actual exposures are monitored against the limits allocated to the various counterparties. These limits are set up taking into account counterparty assessment and market factors.

The derivative transactions are originated by Resources Group in compliance with the limits as per the Company’s policy and the RBI guidelines. The Risk team independently monitors the risk limits associated with the derivative transactions and apprises the Asset Liability Management Committee (ALCO) and the Risk Management Committee of the Board (RMC) for the compliance with the policy on derivatives. The Finance team undertakes the activities of trade confirmation, settlement and accounting.

(b) Accounting policy for recording hedge transactions, recognition of income, premiums and discounts, valuation of outstanding contracts:

Interest rate swaps are booked with the objective of managing the interest rate risk on liabilities. Interest rate swaps in the nature of hedge are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of the hedge swaps is amortised over the life of the swap or underlying liability, whichever is shorter.

(B) Quantitative disclosures:

(a) Disclosure in respect of Interest Rate Swaps (IRS) is set out below:



(i) Notional principal of swap agreement - 850,000,000

(ii) Losses which could be incurred if counterparty failed to fulfil their obligations under the agreement

- 122,810

(iii) Collateral required by the Company upon entering into swaps - -

(iv) Concentration of credit risk arising from the swaps - -

(v) Fair value of the swap book - 122,810



(b) Disclosure on risk exposure in Derivatives



(i) Quantitative disclosure on risk exposure in derivatives

1 Derivatives (Notional Principal Amount)

(a) For Hedging - 850,000,000

2 Marked to Market positions

(a) Asset (+) - 122,810

(b) Liability (-) - -

3 Credit exposure - 8,622,810

4 Unhedged exposure - -

(e) Securitisation / Assignment

The Company has not under taken any transactions of Securitisation/Assignment in the current and in the previous year and hence the related disclosures are not applicable to the Company.

(f) Details of non-performing financial assets purchased / sold and accounts subjected to restructuring:

The Company has not undertaken any transactions for purchase/sale of NPA’s in the current and in the previous year and hence the related disclosure are not applicable to the Company.

(g) Asset Liability Management Maturity pattern of certain items of assets and liabilities

Current year `

PARTICULARS 1 DAY TO30/31

DAYS (ONEMONTH)

OVER ONEMONTH TO

TWOMONTHS

OVER TWOMONTHS

TO THREEMONTHS

OVER THREEMONTHS TOSIX MONTHS

OVER SIXMONTHSTO ONE

YEAR

OVER ONEYEAR

TO THREEYEARS

OVER THREEYEARS

TO FIVEYEARS

OVER FIVEYEARS

TOTAL

Deposits - - - - - - - - -

Advances (net) 90,067,316 44,860,194 402,811,066 588,695,058 1,130,911,671 6,206,523,331 7,063,230,578 26,675,650,214 42,202,749,428

Investments 1,580,000,000 - - - - - - - 1,580,000,000

Borrowings 496,824,665 1,238,796,863 492,185,275 - - 7,050,000,000 23,340,000,000 3,320,000,000 35,937,806,803

Foreign Currency

assets

- - - - - - - - -

Foreign Currency

liabilities

- - - - - - - - -

Previous year `

1 DAY TO30 / 31

DAYS (ONEMONTH)

OVER ONEMONTH TO

TWOMONTHS

OVER TWOMONTHS

TO THREEMONTHS

OVER THREEMONTHS TOSIX MONTHS

OVER SIXMONTHSTO ONE

YEAR

OVER ONEYEAR

TO THREEYEARS

OVER THREEYEARS

TO FIVEYEARS

OVER FIVEYEARS

TOTAL

Deposits - - - - - - - - -

Advances (net) 69,797,687 36,524,573 164,903,602 331,315,937 550,293,189 3,654,276,639 4,672,509,477 17,348,644,301 26,828,265,405

Investments 1,252,772,423 - - - - - - - 1,252,772,423

Borrowings 996,094,942 644,574,862 246,182,986 - - - 16,840,000,000 2,310,000,000 21,036,852,790

Foreign Currency

assets

- - - - - - - - -

Foreign Currency

liabilities

- - - - - - - - -

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, 2018 and as at March 31, 2017.

(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, 2018 and as at March 31, 2017.

(j) Details of Single Borrower Limit and Borrower Group Limit exceeded by the Company

During the years ended March 31, 2018 and March 31, 2017, 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 42,033,938,431 26,720,952,344

TOTAL 42,033,938,431 26,720,952,344

(*) Net of provision for standard assets

(l) Unsecured advances

The Company has not given any unsecured advances in the current year and in the previous year.

(m) Registration obtained from other financial regulators

The Company has not obtained registrations from other financial sector regulators.

(n) Penalties / fines imposed by the RBI

During the year ended March 31, 2018 there was no penalty imposed by the RBI and other regulators (Previous Year ` Nil).

(o) Provisions and Contingencies


` `

Break up of ‘Provisions and Contingencies’ shown under the head ‘Expenses’ in the Statement of Profit and Loss

- -

Provisions for depreciation on Investment - -

Provision towards NPA - -

Provision made towards Income tax - -

Other Provision and Contingencies - -

Provision for Standard Assets 168,810,997 107,313,061

168,810,997 107,313,061

(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 27,710,475,046 21,644,289,796

Percentage of Advances to twenty largest borrowers to Total Advances of the NBFC 65.7% 80.7%

(r) Concentration of Exposures


` `

Total Exposure to twenty largest borrowers / customers 27,710,475,046 21,644,289,796

Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the NBFC on borrowers / customers

65.7% 80.7%

(s) Concentration of Non Performing Assets (NPAs) / Sectorwise NPAs / Movement in NPAs

The Company did not have any NPAs in the current year and in the previous year and hence the related disclosures are not applicable to the Company.



(t) The information on Overseas Assets (for those with Joint Ventures and Subsidiaries abroad) is given below:

NAME OF THE JOINT VENTURE/ SUBSIDIARY FOR THE YEAR ENDED MARCH 31, 2018

OTHER PARTNER IN THE JV COUNTRY TOTAL ASSETS

Nil Nil Nil

NAME OF THE JOINT VENTURE/ SUBSIDIARY FOR THE YEAR ENDED MARCH 31, 2017

OTHER PARTNER IN THE JV COUNTRY TOTAL ASSETS

Nil Nil Nil

(u) The information on off balance sheet SPV sponsored (which are required to be consolidated as per accounting norms):



Nil Nil

(v) Debentureholder’ complaints :

(a) No. of complaints pending at the beginning of the year Nil

(b) No. of complaints received during the year Nil

(c) No. of complaints redressed during the year Nil

(d) No. of complaints pending at the end of the year Nil

The above information is certified by management and relied upon by the auditors.

30 The additional information required to be disclosed in terms of RBI circular (Ref. No. RBI/2009-2010/356/IDMD/4135/11.08.43/2009-10) dated March 23, 2010 is not applicable for the Company.

31 Ratings assigned by credit rating agencies and migration of ratings during the year


(i) Name of the Rating Agency Credit Analysis & Research Limited

ICRA Limited Credit Analysis & Research Limited

ICRA Limited

(ii) Rating Assigned AAA AAA AAA AAA

(iii) Date of Rating July 05, 2017 July 03, 2017 August 23, 2016 June 20, 2016

(iv) Rating Valid upto July 04, 2018 July 02, 2018 August 22, 2017 June 19, 2017

The validity of the rating is subject to periodical revalidation by rating agencies.

32 There is no Debenture Redemption Reserve (DRR) created as the Non Banking Financial Companies registered with Reserve Bank of India are not required to create DRR for the privately placed debentures.

33 Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ` 8,294,400 (previous year ` 3,170,870). Amount spent towards CSR during the year and recognised as expense in the statement of profit and loss on CSR related activities is ` 8,294,400 (previous year ` 3,170,870), which comprise of following:


IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL

(i) Construction/acquisition of any asset - - - - - -

(ii) On purposes other than (i) above 8,294,400 - 8,294,400 3,170,870 - 3,170,870

34 The Company is an Infra Debt Fund - Non Banking Finance Company (IDF - NBFC) registered with the Reserve Bank of India on September 22, 2014. The income of the Company, being IDF-NBFC, is exempt under section 10(47) of the Income Tax Act, 1961, with effect from October, 2014.



35 The terms of Non convertible debentures (NCDs) issued and outstanding as of March 31, 2018 are as below

SERIES NAME ISSUANCE DATE

MATURITY DATE



NO. OF NCD

(UNITS)

COUPON RATE

PAYMENT FREQUENCY-INTEREST

PAYMENT FREQUENCY-PRINCIPAL

IDFC IDF PP 1/2016 29/Sep/2015 29/Oct/2020 1,500,000,000 1,500,000,000 1,500 8.85% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 2/2016 21/Oct/2015 20/Nov/2020 1,550,000,000 1,550,000,000 1,550 8.65% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 3/2016 16/Nov/2015 1/Dec/2020 750,000,000 750,000,000 750 8.64% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 4/2016 9/Dec/2015 8/Jan/2021 750,000,000 750,000,000 750 8.55% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 5/2016 8/Jan/2016 28/Jan/2021 2,500,000,000 2,500,000,000 2,500 8.65% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 6/2016 22/Mar/2016 22/Apr/2021 1,030,000,000 1,030,000,000 1,030 8.88% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 1/2017 14/Jul/2016 27/Jul/2021 2,090,000,000 2,090,000,000 2,090 8.75% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 2/2017 9/Aug/2016 25/Aug/2021 1,410,000,000 1,410,000,000 1,410 8.60% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 3/2017 29/Aug/2016 31/Aug/2021 1,360,000,000 1,360,000,000 1,360 8.51% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 4/2017 1/Sep/2016 7/Sep/2021 250,000,000 250,000,000 250 8.51% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 5/2017 27/Sep/2016 12/Oct/2021 2,550,000,000 2,550,000,000 2,550 8.39% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 6/2017 17/Nov/2016 30/Nov/2021 250,000,000 250,000,000 250 8.10% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 7/2017 30/Nov/2016 12/Jan/2022 600,000,000 600,000,000 600 7.35% Annually and on maturity Bullet repayment at maturity

IDFC IDF PP 8/2017 6/Dec/2016 18/Jan/2022 250,000,000 250,000,000 250 7.35% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 9/2017 1/Feb/2017 13/Apr/2022 1,500,000,000 1,500,000,000 1,500 8.00% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 10/2017 22/Mar/2017 24/May/2022 810,000,000 810,000,000 810 8.25% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 2/2018 26/Apr/2017 26/May/2022 1,010,000,000 - 1,010 8.01% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 1/2018 19/Apr/2017 19/Jul/2022 850,000,000 - 850 8.04% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 4/2018 12/Jul/2017 11/Aug/2022 1,000,000,000 - 1,000 7.94% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 3/2018 31/May/2017 18/Aug/2022 1,010,000,000 - 1,010 7.97% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 6/2018 19/Sep/2017 10/Nov/2022 3,400,000,000 - 3,400 7.73% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 5/2018 31/Aug/2017 24/Nov/2022 820,000,000 - 820 7.73% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 8/2018 18/Dec/2017 14/Feb/2023 2,650,000,000 - 2,650 8.08% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 9/2018 6/Feb/2018 21/Feb/2023 500,000,000 - 500 8.48% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 10/2018 22/Mar/2018 22/Aug/2023 2,170,000,000 - 2,170 8.49% Annually and on maturity Bullet repayment at maturity

IDFC IFL PP 7/2018 28/Nov/2017 28/Nov/2024 1,150,000,000 - 1,150 7.99% Annually and on maturity Bullet repayment at maturity

TOTAL NCDS ISSUED 33,710,000,000 19,150,000,000

36 Details of SBN held and transacted during the period November 8, 2016 to December 30, 2016 The below disclosure was introduced under special circumstances and for a special period which are not relevant for the current

year, hence disclosures pertain to the specified period are relevant to the comparative period only.

PARTICULARS SBNS OTHER DENOMINATION NOTES TOTAL

Closing cash in hand as on November 8, 2016 Nil Nil Nil

(+) Permitted receipts - - -

(-) Permitted payments - - -

(-) Amount deposited in Banks - - -

Closing cash in hand as on December 30, 2016 Nil Nil Nil

37 Frauds reported during the year- Nil

38 The figures of the previous year have been regrouped wherever necessary, to correspond with those of the current year.


Sunil KakarDirector

S. S. KohliDirector




IDFC ALTERNATIVES LIMITED

U67190MH2002PLC137798

Dr. Jaimini Bhagwati (Chairman)

Mr. Gautam Kaji


Mr. Sanjiv Kapur

Mr. Sunil Kakar

Mr. Bharat Shah

(till April 06, 2018)

Mr. Vikram Limaye




IDFC Bank Limited

Naman Chambers



Mumbai 400 051

Tel +91 22 4222 2000

Fax + 91 22 2654 0354



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C A LT E R N AT I V E S L I M I T E D | 1 2 9

BOARD’S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifteenth Annual Report of IDFC Alternatives Limited (“the Company”) together with

the audited financial statements for the year ended March 31, 2018.



FOR THE PERIOD ENDED MARCH 31, 2018


Total Income 1,114,237,487 1,310,101,341

Less: Total Expenses 1,272,989,179 1,026,167,893

Profit before Tax (158,751,692) 283,933,448

Less: Provision for Tax (82,881,642) 93,549,000

Profit after Tax (75,870,050) 190,384,448

OPERATIONS REVIEW

Your Company acted as Fund Manager for a total of seven funds - IDFC Private Equity Fund II, IDFC Private Equity Fund III and IDFC

Private Equity Fund IV under the Private Equity asset class; India Infrastructure Fund (“IIF”) and India Infrastructure Fund II (“IIF II”) under

the Infrastructure Equity asset class; and IDFC Real Estate Yield Fund (“REYF”) and IDFC Score Fund under the Real Estate asset class.



DIVIDEND


BOARD MEETINGS

The Board of Directors of the Company meets atleast once a quarter to review the quarterly results and to decide on business policy

and strategy apart from other board business. During the year, the Board met five times on April 27, 2017; July 25, 2017; October

30, 2017; January 29, 2018 and February 19, 2018. The gap between any two consecutive meetings was within the period prescribed

under the Companies Act, 2013.

The Composition and attendance of the Board Meetings held during FY18 is given in the Table 1.

TABLE 1

NAME OF THE DIRECTOR DIN CATEGORY BOARD MEETING

AUDIT COMMITTEE

NOMINATION & REMUNERATION

COMMITTEE

CORPORATE SOCIAL RESPONSIBILITY

COMMITTEE

Dr. Jaimini Bhagwati1 07274047 Independent Director C 5/5 - 0/01 -

Mr. Gautam Kaji 02333127 Independent Director 5/5 C 4/4 3/3 -

Mr. Sanjiv Kapur2 01356126 Independent Director 5/5 - - 0/02

Ms. Marianne Økland3 03581266 Independent Director 5/5 0/03 - 1/1

Mr. Sunil Kakar4 03055561 Non-Executive Director 5/5 4/4 C3/34 C1/14

Mr. Bharat Shah5 00136969 Independent Director 3/5 2/4 3/3 1/1

Mr. Vikram Limaye6 00488534 Non-Executive Director 1/1 - C 1/1 C 1/1

1 Appointed as a Member of NRC w.e.f. April 25, 2018

2 Appointed as a Member of CSR Committee w.e.f. April 25, 2018

3 Appointed as a Member of Audit Committee w.e.f. April 25, 2018

4 Appointed as a Chairman of the Committee w.e.f. July 16, 2017

5 Tendered his resignation w.e.f. April 06, 2018

6 Tendered his resignation w.e.f. July 15, 2017.

* Figures marked with “C” represent Chairman of the Board/Committee


BOARD’S REPORT


The Board Committees play a crucial role in the governance structure of the Company and help to delegate particular matters that

require greater and more focused attention. The Chairman of the respective Committee informs the Board about the summary of the

discussions held in the Committee Meetings. The minutes of the meetings of all Committees are placed before the Board for review. The

Board Committees also request special invitees to join the meeting, wherever appropriate.

The Board has the following Committees.

Audit Committee

Nomination and Remuneration Committee

Corporate Social Responsibility Committee

AUDIT COMMITTEE

Consequent to resignation of Mr. Bharat Shah as an Independent Director and Member of the Committee, the Audit Committee was

reconstituted and comprises of three Members. The Audit Committee is headed by Mr. Gautam Kaji and have Ms. Marianne Økland & Mr.

Sunil Kakar as its Members. During the year, the Audit Committee met four times on April 27, 2017; July 25, 2017; October 30, 2017 and

January 29, 2018. The gap between any two consecutive meetings was within the period prescribed under the Companies Act, 2013.

The attendance details of the Audit Committee Meetings held during FY18 are given in Table 1.


Consequent to resignation of Mr. Vikram Limaye and Mr. Bharat Shah, the NRC was reconstituted and comprises of three Members. The

NRC is headed by Mr. Sunil Kakar and have Dr. Jaimini Bhagwati and Mr. Gautam Kaji as its Members. The Company has put in place

Board approved remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and other Employees

which is formulated in line with the requirements of the Companies Act, 2013.

During the year, three meetings of NRC were held on April 27, 2017, January 29, 2018 and March 28, 2018. The attendance details of the

NRC Meetings held during FY18 are given in Table 1.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

Consequent to resignation of Mr. Vikram Limaye and Mr. Bharat Shah, the CSR Committee was reconstituted and comprises of three

Members. The CSR Committee is headed by Mr. Sunil Kakar and have Ms. Marianne Økland & Mr. Sanjiv Kapur as its Members. During

the year, one meeting of CSR Committee was held on April 27, 2017. The attendance details of the CSR Meetings held during FY17 are

given in Table 1.

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

annexed herewith as Annexure II.


During the year, a separate meeting of Independent Directors was held on April 28, 2016. All Independent Directors attended the said

meeting.


The Company has received a declaration from IDs at the first meeting of the Board of Directors held in the financial year, that they

meet the criteria of independence specified under sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies

(Appointment and Qualification of Directors) Rules, 2014 and that they shall abide by the “Code for Independent Directors” as per

Schedule IV of the Companies Act, 2013.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year, Mr. Vikram Limaye and Mr. Bharat Shah resigned as a Director w.e.f. July 15, 2017 and April 06, 2018 respectively. The

Board places on record sincere appreciation for services rendered by them during their tenure.

In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies

Act, 2013, Mr. Sunil Kakar (DIN: 03055561) would retire by rotation at the ensuing AGM and being eligible, offers himself for re-

appointment.

The Board of Directors recommends re-appointment of Mr. Sunil Kakar, as a Director at the ensuing AGM.


BOARD’S REPORT

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

1. Mr. M.K. Sinha - Chief Executive Officer

2. Mr. Manish Jindal - Chief Financial Officer

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was prepared and circulated to the Board for Annual

evaluation for FY17. The Directors evaluated the Board as a whole, its committee and Individual Directors including Chairman. The

exercise of Board evaluation was carried out and completed effectively.

REMUNERATION POLICY

The Company has in place the Remuneration policy for the Directors, Key Managerial Personnel, Senior Management Personnel and

other Employees which is formulated in line with the requirements of Companies Act, 2013.

STATUTORY AUDITORS

At AGM held on August 2, 2017, the Members of the Company appointed Price Waterhouse & Co Chartered Accountants LLP (FRN

304026E/E300009) (“PWC”) as the Statutory Auditors of the Company for a period of Five years from the 15th AGM of the Company

held for FY17 till the conclusion of the 20th AGM of the Company to be held for FY22. In accordance with the Companies Amendment

Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of the Statutory Auditors is not required to

be ratified at every Annual General Meeting.


Pursuant to the Secretarial Standard-I issued by the Institute of Company Secretaries of India pertaining to Board of Directors, the

Company confirms that all applicable Secretarial Standards have been duly complied with during the period under review.

AUDITOR’S REPORT

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


As per Section 177, the Audit Committee of the Board of Directors approves all the related party transactions of the Company on a

quarterly basis. Related party transactions entered during the year under review were in the ordinary course of business and on an

arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related Party Transactions” is also

uploaded on the website of the Company. Since all related party transactions entered into by the Company were in the ordinary course

of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being

constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls.

Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit

Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the

Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting

financial reporting and overall risk management procedures of the Company and found the same satisfactory. It was placed before the

Audit Committee of the Company.

RISK MANAGEMENT

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

of the Company.


The Company had 60 employees as on March 31, 2018 and 65 employees including employees of IDFC Capital (Singapore) Pte. Ltd.

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


BOARD’S REPORT

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.

SUBSIDIARY COMPANIES / JOINT VENTURES / ASSOCIATE COMPANIES

The Company had one wholly owned subsidiary, namely IDFC Capital (Singapore) Pte. Limited.

A statement containing salient features of the financial statement and all other requisite details of the subsidiary company in the

format AOC-I is appended as Annexure I.

PUBLIC DEPOSITS



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

2013.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to provisions of Section 177(9) of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers)

Rules, 2014, the Board approved and adopted “Whistle Blower Policy”, which had already been adopted by IDFC Limited, the ultimate

holding Company so as to establish vigil mechanism, including reporting to the Management instances of unethical behavior, actual or

suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Group General Counsel & Head - Legal & Audit was

appointed as the Whistle Officer for the purpose of this Policy. The Audit Committee directly oversees the Vigil Mechanism.


There were no foreign exchange earnings during the year. The particulars regarding foreign exchange expenditure are furnished at Note

No. 21 in the Notes forming part of the Financial Statements.



terms of Section 134(3)(m) are not applicable.


IDFC Alternatives has entered into a definitive agreement with Global Infrastructure Partners India, for the sale of its infrastructure

asset management business. All necessary regulatory approvals for the sale have been received. The Company is also evaluating

divestiture of the Private Equity and Real Estate platforms.

In view of the intent to divest the business operations and hence discontinue business of the Company, the financial statements have been

prepared on realizable value basis and accordingly, all assets and liabilities are stated at the value at which they are realizable/ payable.




There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company.

INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION &

REDRESSAL) ACT, 2013

The Company has in place a policy on Anti Sexual Harassment. There were no instances of Sexual Harassment that were reported

under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company

undertakes ongoing trainings to create awareness on this policy.







reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2018 and of the profit

and loss of the company for that period;



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



ACKNOWLEDGMENTS

We are grateful to Securities and Exchange Board of India, National Stock Exchange of India Limited, BSE Limited, National Securities

Depository Limited, Central Depository Services (India) Limited, Ministry of Corporate Affairs and other statutory authorities and its

bankers for their continued support to the Company.

The Directors express their gratitude for the support and guidance received from IDFC / IDFC Financial Holding Company Limited

and other group companies and also express their warm appreciation to all the employees of the Company for their commendable

teamwork, professionalism and contribution during the year.

The Directors extend their sincere thanks to the clients of the Company for their support.


Dr. Jaimini Bhagwati

Chairman



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




1. CIN Foreign Company

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

3. Date since when subsidiary was acquired March 26, 2015

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

NA

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

Reporting currency: USD

Exchange rate*

6. Share capital (as on March 31, 2018) 2,462,166,070

7. Reserves & surplus (as on March 31, 2018) (470,160,858)

8. Total assets (as on March 31, 2018) 1,997,298,030

9. Total Liabilities (as on March 31, 2018) (excl share capital & reserve & surplus) 5,292,818

10. Investments 1,165,843,489

11. Turnover 77,391,869

12. Profit/(Loss) before taxation 13,242,458

13. Provision for taxation 0

14. Profit/(Loss) after taxation 13,242,458

15. Proposed Dividend NA

16. % of shareholding 100

*Exchange Rate:Closing Rate: 1 USD = INR 65.0441Average Rate: 1 USD = INR 64.493225

PART “B”: ASSOCIATES AND JOINT VENTURES : NOT APPLICABLE

For and on behalf of the Board of Directors ofIDFC Alternatives Limited

Jaimini BhagwatiDirector

Sunil KakarDirector

Mumbai, April 27, 2018Manish JindalChief Financial Officer






i) CIN U67190MH2002PLC137798


iii) Name of the Company IDFC ALTERNATIVES LIMITED


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



Link Intime India Private Limited * C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.

*Link Intime India Pvt Ltd. provides electronic connectivity services with depositories for the equity shares of the Company.



SR. NO.

NAME AND DESCRIPTION OF MAIN PRODUCTS / SERVICES


1. Multi-asset class fund managers 66309 100


SR. NO.

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

% OF SHARES HELD

APPLICABLE SECTION

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

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3. IDFC Capital (Singapore) Pte. Ltd. N.A. Subsidiary Company 100 Section 2(87)





% CHANGE DURING THE

YEARDEMAT PHYSICAL TOTAL % OF

TOTAL SHARES


A. Promoters

(1) Indian

a) Bodies Corp. 219,250 600 219,850 100 219,250 600 219,850 100 NIL

Sub-Total (A)(1):- 219,250 600 219,850 100 219,250 600 219,850 100 NIL

(2) Foreign (A)(2):- NIL NIL NIL NIL NIL NIL NIL NIL NIL

A. Total Shareholding of Promoter (A) = (A)(1) + (A)(2)

219,250 600 219,850 100 219,250 600 219,850 100 NIL

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



Grand Total (A+B+C) 219,250 600 219,850 100 219,250 600 219,850 100 NIL




SR. NO.


SHARE HOLDING AT THE END OF THE YEAR

% CHANGE IN SHARE HOLDING

DURING THE YEAR

NO. OF SHARES

% OF TOTAL SHARES OF THE

COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY


ENCUMBERED TO TOTAL

SHARES


219,850 100 NIL 219,850 100 NIL NIL

TOTAL 219,850 100 NIL 219,850 100 NIL NIL



NOT APPLICABLE


V. INDEBTEDNESS - NIL



B. Remuneration to other Directors: IN `

SR. NO.


DR. JAIMINI BHAGWATI

GAUTAM KAJI

BHARAT SHAH

SANJIV KAPUR

MARIANNE ØKLAND

SUNIL KAKAR


Fee for attending board / committee meetings

150,000 325,000 250,000 150,000 175,000 NIL 1,050,000

Commission* 1,000,000 1,000,000 800,000 1,000,000 1,000,000 NIL 4,800,000

Others, please specify NIL NIL NIL NIL NIL NIL NIL

TOTAL (1) 1,150,000 1,325,000 1,050,000 1,150,000 1,175,000 - 5,850,000

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

TOTAL (2) NIL NIL NIL NIL NIL NIL NIL

TOTAL (B) = (1 + 2) 1,150,000 1,325,000 1,050,000 1,150,000 1,175,000 - 5,850,000


Note: In terms of the provisions of the Companies Act, 2013, the remuneration payable to Directors other than executive Directors shall not exceed 3% of the net profit of the Company. The remuneration paid to the Directors is well within the said limit.* Commission for FY17 paid in FY18.

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

SR. NO.

PARTICULARS OF REMUNERATION KEY MANAGERIAL PERSONNEL

CEO CFO TOTAL

1. Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 22,680,962 12,056,785 34,737,747

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 6,644,715 45,814 6,690,529

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

2. Stock Option - - -

3. Sweat Equity - - -

4. Commission - - -

5. Contribution to Provident & Other Funds 2,926,383 1,651,008 4,577,391

TOTAL (A) 32,252,060 13,753,607 46,005,667

During FY18 CEO & CFO were paid bonus of 2 crore & 65 lacs respectively for FY17







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




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others


Mr. Sunil Kakar


Mr. Sanjiv Kapur










.

For IDFC Alternatives Limited

Place: Mumbai Sunil Kakar Marianne Økland

Date: June 26, 2018 Chairman – CSR Committee Member



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

(` in Lacs)

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

SR. NO

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

ACT, 2013, AMENDED)


AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS**


UP TO THE REPORTING

PERIOD


IMPLEMENTING AGENCY

1 Promoting learning outcomes of under privileged students in night schools in Maharashtra

Cl.(ii) promoting education Maharashtra-Mumbai

7.40

1.69 6.34

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.51 4.52

Total 7.40 5.80 23.53

5 Program on improving access to water and sanitation in Odisha Cl.(i) Sanitation & Safe Drinking water Odisha 1.04 0.67 1.49

Total 1.04 0.67 1.49



33.05

7.80 15.69



PAN India 68.14 72.53

Total 33.05 75.94 88.22

8 Research & studies on various social and economic issues directly impacting welfare of people Various clauses of Schedule VII PAN India 20.64 17.06 51.12

Total 20.64 17.06 51.12



Total (A) + (B) 62.14 100.57 171.21


** The excess spending against budget has been made out of the previous years CSR contribution available with the implementing agency i.e. IDFC Foundation.


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

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

SR. NO

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

ACT, 2013, AMENDED)


AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS**


UP TO THE REPORTING

PERIOD


IMPLEMENTING AGENCY

1 Promoting learning outcomes of under privileged students in night schools in Maharashtra


7.40

1.69 6.34

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.51 4.52

Total 7.40 5.80 23.53


Total 1.04 0.67 1.49



33.05

7.80 15.69



PAN India 68.14 72.53

Total 33.05 75.94 88.22


Total 20.64 17.06 51.12



Total (A) + (B) 62.14 100.57 171.21





TO THE MEMBERS OF IDFC ALTERNATIVES LIMITED


1. We have audited the accompanying financial statements of IDFC Alternatives Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to Note 2A to the financial statements, regarding preparation of the financial statements on a realizable value basis, pursuant to management intention to discontinue the operations of the Company in view of the reasons stated therein.

Other Matter


Our opinion is not qualified in respect of these matters.


11. As required by ‘the Companies (Auditor’s Report) Order, 2016’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.




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

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

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

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2o18 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

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 knowledge and belief and according to the information and explanations given to us:

i. The Company does not have any pending litigations as at March 31, 2018 which would impact its financial position;

ii. The Company has made provision as at March 31, 2018, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts - Refer Note 8. The Company did not have any derivative contracts as at March 31, 2018;

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018;

iv. The disclosure requirement as envisaged in Notification G.S.R 308(E) dated 30th March 2017 is not applicable to the Company - Refer Note 31

For Price Waterhouse & Co Chartered Accountants LLPFirm Registration Number: 304026E/E300009

Sharad Vasant Partner Membership Number: 101119




Referred to in paragraph 12(f) of the Independent Auditors’ Report of even date to the members of IDFC Alternatives Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of IDFC Alternatives Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


2. The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of 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 Act.


3. Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate 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

6. 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

7. 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

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 ICAI.






Referred to in paragraph 11 of the Independent Auditors’ Report of even date to the members of IDFC Alternatives Limited on the financial statements for the year ended March 31, 2018


(b) The fixed assets are physically verified by the Management once over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in Note 10 on Current Investments to the financial statements, are held in the name of the Company



iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Act. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. Therefore, the provisions of Clause 3(v) of the said Order are not applicable to the Company.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. Therefore, the provisions of Clause 3(vi) of the said Order are not applicable to the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of Income tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, sales tax, income tax, service tax, duty of customs, duty of excise value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.





xi. The Company has not paid any managerial remuneration. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.



xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.


xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.






PARTICULARS

NOTES



` `



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


Non-current liabilities

(a) Deferred tax liabilities (Net) 5 - 66,641,000

Current liabilities


(A) total outstanding dues of micro enterprises and small enterprises; and - 198,676

(B) total outstanding dues of creditors other than micro enterprises and small enterprises

27,221,592 10,078,696

(b) Other current liabilities 7 457,286,526 361,399,469

(c) Short-term provisions 8 239,593,031 10,094,684

TOTAL 3,940,600,276 3,740,781,702

ASSETS

Non-current assets

(a) Property plant and equipment

i) Tangible assets 9a - 57,267,790

ii) Intangible assets 9b 197,019

- 57,464,809

(b) Non-current investments 10 - 2,905,833,138

(c) Long-term loans and advances 11 - 376,886,630

Current assets

(a) Property plant and equipment

i) Tangible assets 9a 40,785,588 -

ii) Intangible assets 9b 196,560 -

40,982,148 -

(b) Current investments 10 3,322,611,933 226,012,830

(c) Cash and bank balances 12 10,342,147 13,268,650

(d) Short-term loans and advances 11 479,028,483 120,401,533

(e) Deferred tax asset (net) 5 60,916,388 -

(f) Other current assets 13 16,877,623 40,914,112

(g) Trade receivable 14 9,841,554 -

TOTAL 3,940,600,276 3,740,781,702

Significant accounting policies 2

The notes are an intergral part of these financial statements.

This is the balance sheet referred to in our report of even date

For Price Waterhouse & Co. Chartered Accountanats LLP(Registration no. 304026E/E-300009)


Sharad Vasant PartnerMembership Number 101119


Sunil KakarDirector




PARTICULARS

NOTES



` `

I INCOME


Other income 16 69,522,735 62,320,724

TOTAL INCOME (I) 1,114,237,487 1,310,101,341

II EXPENSES

Employee benefits expenses 17 619,219,717 601,845,146

Finance costs 18 143,687 107,385


Other expenses 20 340,841,455 394,745,411

Provision for contingencies 230,596,083 -

Loss on adjustment of realisable value of long term assets 21 53,226,209 -


III PROFIT / (LOSS) BEFORE TAX (I-II) (158,751,692) 283,933,448

IV TAX EXPENSE

Current tax 40,856,000 90,912,000

Deferred tax 5 (127,557,388) 2,637,000

Short/(Excess) provision of earlier years 3,819,746

TOTAL TAX EXPENSE (IV) (82,881,642) 93,549,000

V PROFIT / (LOSS) FOR THE YEAR (III-IV) (75,870,050) 190,384,448

Earnings per share [nominal value of ` 10 per share (March 31,2017 :` 10)]

(a) Basic 28 (345.10) 865.97

(b) Diluted (345.10) 865.97

Significant accounting policies 2

The notes are an intergral part of these financial statements.






Sunil KakarDirector






` `

A. CASH FLOWS FROM OPERATING ACTIVITIES

Net profit / (loss) before taxation (158,751,692) 283,933,448

Adjustments for:


Interest expenses on inter corporate deposit 2,466 -

Profit on sale of tabgible/intangible assets (Net) 247,101 (1,179,764)

Interest on income tax refund 3,399,089 (4,455,957)

Profit on sale of current investments (Net) (29,707,166) (21,132,649)

Loss on fair value of long term assets 53,226,209 -

Provision for contingencies 230,596,083 -


Changes in working capital due to increase / (decrease) in:

Long-term loans and advances 140,751,376 (15,151,287)

Short-term loans and advances (78,035,371) (20,050,635)

Other current assets 24,036,489 (10,370,161)

Trade Receivables (9,841,554) -

Trade payables 16,944,220 (15,343,026)

Other current liabilities 95,887,057 (32,747,357)

Cash generated from operations 317,716,335 192,972,563

Net income tax paid (net of refund) (93,628,898) (131,785,732)

NET CASH GENERATED FROM OPERATING ACTIVITIES 224,087,437 61,186,831

B. CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of fixed assets (6,996,113) (9,700,183)

Proceeds from sale of fixed assets 2,506,177 4,345,497

Purchase of current investments (1,594,099,998) (1,157,800,001)

Proceeds from sale of current investments 1,357,690,233 1,093,260,002

Proceeds from sale of non-current investments 13,888,227 4,653,396

NET CASH GENERATED FROM / (USED IN) INVESTING ACTIVITIES (227,011,474) (65,241,289)




` `

C. CASH FLOWS FROM FINANCING ACTIVITIES

Inter corporate deposit taken 10,000,000 -

Inter corporate deposit repaid (10,000,000) -

Interest paid on inter corporate deposit (2,466) -

NET CASH GENERATED FROM / (USED IN) FINANCING ACTIVITIES (2,466) -

NET DECREASE IN CASH AND CASH EQUIVALENTS (A+B+C) (2,926,503) (4,054,458)

Cash and cash equivalents at the beginning of the year (refer to note 12) 13,268,650 17,323,108

Cash and cash equivalents at the end of the year (refer to note 12) 10,342,147 13,268,650

(2,926,503) (4,054,458)

Notes:

1. The Above Cash flow statement has been prepared under the indirect method set out in Accounting Standard-3 “Cash flow statement”.

2. Figures in brackets indicate cash out go.


This is the cash flow statement referred to in our report of even date.





Sunil KakarDirector




01 BACKGROUND

IDFC Alternatives Limited (the ‘Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited (‘IDFC FHC’),

incorporated in India, providing Investment Management and Advisory Services. The Company is an Investment Manager to IDFC

Infrastructure Fund 2 of which IDFC Private Equity Fund II is a unit scheme (“Fund II”), IDFC Infrastructure Fund 3 of which IDFC Private

Equity Fund III is a unit scheme (“Fund III”) and India Infrastructure Fund (“IIF”) all of which are domestic venture capital funds registered

under the Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996. The Company is also the Investment

Manager to the India Infrastructure Fund II registered under the Securities and Exchange Board of India (Alternative Investment Funds)

Regulations, 2012 as a category I Alternative Investment Fund and IDFC Real Estate Yield Fund, IDFC SCORE Fund and IDFC Private

Equity Fund IV registered under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 as a

category II Alternative Investment Fund.

The Company in its meeting of Board of directors held on February 19, 2018 have expressed an intent to divest the Commercial

operations of the Company and is in the process of assessing various alternatives for the future course of the Company.


A. BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under

the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts.

Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards

of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National

Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply.

Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards

notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other

relevant provisions of the Companies Act, 2013.

In view of the intent to divest the business operations and hence discontinue business of the Company, the financial statements

have been prepared on realizable value basis and accordingly, all assets and liabilities are stated at the value at which they are

realizable/ payable.

Since the financial statements are prepared not on the going concern basis, all the assets and liabilities have been classified as

current assets and liabilities.

B. USE OF ESTIMATES


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

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

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

results and the estimates are prospectively recognised in the future periods.

C. CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of the cash flow statement include cash in hand, demand deposits with banks, other

short term highly liquid investments (with original maturities of three months or less).

D. CASH FLOW STATEMENTS

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the

effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows

from operating, investing and financing activities of the Company are segregated based on the available information.

E. REVENUE RECOGNITION

i Management fees net of service tax / GST 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 ‘weighted’ cost for current investments.

v Rental income is recognised on accrual basis as per the terms of the Leave & License Agreement.



F. FIXED ASSETS

Tangible assets

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

accumulated depreciation and impairment losses, if any. Gains or losses arising from derecognition of fixed assets are measured as

difference between the net disposal proceeds and the cost of the assets net of 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, net of accumulated amortisation and impairment losses, if any. Any expenses on such software for

support and maintenance payable annually are charged to the Statement of Profit and Loss.

G. DEPRECIATION AND AMORTISATION

Tangible assets

Depreciation on tangible assets is provided on straight line method, at the rates prescribed in Part C of Schedule II to the

Companies Act, 2013. Certain electronic items and vehicles are depreciated over a period of two years and four year respectively on

a straight-line method based on the Management’s estimate of the useful life of these assets. Depreciation on additions during the

year is provided on a pro-rata basis. Assets costing less than ` 5,000 each are fully depreciated in the year of capitalisation.Having

regard to the Part C of Schedule II of the Companies Act, 2013, the Company has reviewed its policy of providing for depreciation

on its tangible fixed assets and also reassessed their useful lives. On and from April 1, 2014, the straight line method is being used to

depreciate all classes of tangible fixed assets.

Useful life of assets

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

Intangible assets

Computers for 3 years

Servers and networks for 6 years

Furniture for 10 years

Office Equipment for 5 years

Vehicle for 4 years

Mobile Phone for 2 years

Leasehold improvements over the lease term.

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 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.

I. INVESTMENTS

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

investments are made, are classified as current investments. All other investments are classified as long term investments. Current

investments are carried at cost or fair value, whichever is lower. Long-term investments are carried at cost. However, provision

for diminution is made to recognise a decline, other than temporary, in the value of long-term investments, such reduction being

determined andmade for each investment individually.



Investment property: Investments in buildings that are not intended to be occupied substantially for use by, or in the operations

of the Company, have been classified as investment properties. Investment properties are carried at cost less accumulated

depreciation and accumulated impairment losses, if any.

J. EMPLOYEE BENEFITS

Defined contribution plans

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

an expense as they fall due based on the amount of contribution required to be made and when services are rendered by the

employees.


The net present value of the Company’s obligation towards Gratuity to employees is funded and actuarially determined as at the

Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Profit

and Loss for the year in which they occur.

Compensated absences

Employees are not permitted to accumulate leave. Based on the leave rules, unavailed privilege leave to the extent encashable is

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

K. OPERATING LEASES

As a lessee:

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating

leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the

period of the lease.

As a lessor:

The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and

rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of

Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from

the use of the leased asset is diminished. Initial direct costs are recognised as an expense in the Statement of Profit and Loss in the

period in which they are incurred.

L. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit or 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 or 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. CURRENT AND DEFERRED TAX

Tax expense for the period, comprising current tax and deferred tax, are included in the determination of the net profit or loss for

the period. Current tax is measured at the amount expected to be paid to the tax authorities in accordance with the taxation laws

prevailing in the respective jurisdictions.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred tax ssets.

Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty that sufficient future

taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets and liabilities are

measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. In situations,

where the Company has unabsorbed depreciation or carry forward losses under tax laws, all deferred tax assets are recognised only

to the extent that there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts

and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are ffset



when there is a legally enforceable right to set off assets against liabilities representing current tax and where the deferred tax

assets and the deferred tax liabilities relate to taxes on income levied by the same governing taxation laws.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the

company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the

carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the

Company will pay normal income tax during the specified period.

N. PROVISIONS AND CONTINGENT LIABILITIES

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an outflow

of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount

of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the

Balance sheet date and are not discounted to its present value.

Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence

of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within

the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of

resources will be required to settle or a reliable estimate of the amount cannot be made.

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.

P. SERVICE TAX INPUT CREDIT/ GOODS AND SERVICE TAX (GST) CREDIT

Service tax input credit/GST credit is accounted for in the books in the period in which the underlying service received is accounted

and when there is no uncertainty in availing / utilising the credits.

Q. FUND SET-UP EXPENSES

As the investment manager, one of the key responsibilities of the Company is to undertake setting up new funds and offering Fund’s

units on a private placement basis and procure investors’ commitments. To fulfil this responsibility, the Company incurs expenses for

and on behalf of the new Fund which are booked as recoverable from the respective new Funds. Management performs an annual

assessment of recoverablity of such expenses incurred. Based on management’s assesment, these expenses may be provided /

written-off at the year-end as deemed fit.

R. SEGMENT REPORTING

The Company’s Primary segment is reflected based on the principle business carried out i.e. Investment Management and Advisory

Services. The risk and return of the business of the Company is not associated with geographical segmentation, hence there is no

sencondary segment reporting based on geographical segment.



03 SHARE CAPITAL


NUMBER ` NUMBER `

(A) AUTHORISED


(B) ISSUED, SUBSCRIBED & FULLY PAID UP

Equity shares of ` 10 each 219,850 2,198,500 219,850 2,198,500

(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees; IDFC Limited is the Ultimate Holding Company)

TOTAL 219,850 2,198,500 219,850 2,198,500

(a) Reconciliation of number of shares


NO. OF SHARES HELD

` NO. OF SHARES HELD

`

Balance at the beginning of the year 219,850 2,198,500 219,850 2,198,500


Balance at the end of the year 219,850 2,198,500 219,850 2,198,500

(b) Rights,preferences and restrictions attached to shares

The Company has one class of equity share having a par value of ` 10 each. Each holder of equity share is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting, except in case of interim dividend. Such dividend is not recognised as a liability at the Balance Sheet date as per the provisions of the revised Accounting Standard 4.

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

(c) Details of Shares held by Shareholderes holding more than 5% of the aggregate shares in the company

NAME OF SHAREHOLDER AS AT MARCH 31, 2018 AS AT MARCH 31, 2017

NO. OF SHARES HELD

% OF HOLDING NO. OF SHARES HELD

% OF HOLDING

IDFC Financial Holding Company Limited and its nominees 219,850 100% 219,850 100%

219,850 100% 219,850 100%





AS ATMARCH 31, 2017

` `

(A) GENERAL RESERVE

Balance at the beginning of the year 259,662,721 259,662,721

Add: Transferred from surplus in Statement of Profit and Loss - -

Balance at the end of the year 259,662,721 259,662,721

(B) SECURITIES PREMIUM ACCOUNT

Balance at the beginning of the year 1,998,285,250 1,998,285,250

Add: Premium on issue of equity shares - -

Balance at the end of the year 1,998,285,250 1,998,285,250

(C) SURPLUS IN STATEMENT OF PROFIT AND LOSS

Balance at the beginning of the year 1,032,222,706 841,838,258

Add: Loss / Profit for the year (75,870,050) 190,384,448

Balance at the end of the year 956,352,656 1,032,222,706

TOTAL 3,214,300,627 3,290,170,677

05 DEFERRED TAX ASSETS/ (LIABILITY) (NET)


AS ATMARCH 31, 2017

` `

DEFERRED TAX LIABILITY

On difference between book balance and tax balance of fixed assets - (66,928,000)

DEFERRED TAX ASSETS

On difference between book balance and tax balance of fixed assets 7,121,758

Provision for contingency 53,794,630 287,000

DEFERRED TAX ASSETS / (LIABILITY) (NET) 60,916,388 (66,641,000)

(a) In compliance with Accounting Standard 22 on ‘Accounting for Taxes on Income’ as specified u/s 133 of the Companies Act, 2013, ` 127,557,388 has been credited (previous year ` 2,637,000 debited) to the Statement of Profit and Loss towards deferred tax on account of timing differences.

06 TRADE PAYABLES


AS ATMARCH 31, 2017

` `

Total outstanding dues of micro enterprises and small enterprises (Refer to note 23)

- 198,676


Acceptances 26,213,592 9,471,378

Others 1,008,000 27,221,592 607,318 10,078,696

TOTAL 27,221,592 10,277,372



AS ATMARCH 31, 2017

` `

Fees received in advance 142,008,149 94,083,060

Other Advances - 1,000,000

Payable for employee benefit (Refer to note 24) 281,758,727 231,792,574

Security deposit (Refer to note 26) 17,724,000 17,724,000

Others

Statutory dues including provident fund and tax deducted at source 15,795,650 16,799,835

TOTAL 457,286,526 361,399,469





AS ATMARCH 31, 2017

` `

Provision for income tax (net of advance tax paid ` 272,303,764 (previous year ` 828,869,411)) 8,612,917 9,710,653

Provision for fringe benefit tax (net of advance tax paid ` 14,876,617 (previous year ` 14,876,617)) 384,031 384,031

Provision for contingencies (Refer to Note 29) 230,596,083 -

TOTAL 239,593,031 10,094,684

09 PROPERTY PLANT AND EQUIPMENT

PARTICULARS GROSS BLOCK DEPRECIATION/AMORTISATION NET BLOCKB

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` ` ` ` ` ` ` ` ` `

A TANGIBLE ASSETS

Leasehold Improvements 54,972,418 - - 54,972,418 20,144,292 10,994,484 - 31,138,776 23,833,642 34,828,126

(Previous Year) (54,972,418) (102,606) (102,606) (54,972,418) (20,144,292) (10,987,399) (-) (20,144,292) (34,828,126) (34,828,126)

Computer hardware 12,239,151 463,363 57,805 12,644,709 9,980,269 1,129,708 57,573 11,052,404 1,592,305 2,258,882

(Previous Year) (12,239,151) (1,870,916) (1,870,916) (12,239,151) (9,980,269) (1,099,284) (1,099,284) 9,980,269 (2,258,882) (2,258,882)

Furniture and fixtures 5,556,870 27,433 - 5,584,303 3,282,133 514,241 - 3,796,374 1,787,929 2,274,737

(Previous Year) (5,556,870) (-) (-) (5,556,870) (3,282,133) (598,439) (598,439) (3,282,133) (2,274,737) (2,274,737)

Office equipment 11,924,565 609,660 16,900 12,517,325 10,888,894 850,859 9,722 11,730,031 787,294 1,035,672

(Previous Year) (11,924,565) (1,007,559) (1,007,559) (11,924,565) (10,888,894) (900,032) (900,033) (10,888,893) (1,035,672) (1,035,672)

Vehicles 29,328,230 5,686,113 6,259,014 28,755,329 12,457,857 7,026,200 3,513,146 15,970,911 12,784,418 16,870,373

(Previous Year) (29,328,230) (10,153,035) (10,153,035) (29,328,230) (12,457,857) (7,430,366) (7,430,366) (12,457,857) (16,870,373) (16,870,373)

TOTAL (A) 114,021,234 6,786,569 6,333,719 114,474,084 56,753,445 20,515,492 3,580,441 73,688,496 40,785,588 57,267,790

Previous Year (114,021,234) (13,134,116) (8,660,830) (127,155,350) (56,753,445) (21,015,520) (10,028,122) (77,768,965) (49,386,385) (57,267,790)

B INTANGIBLE ASSETS (ACQUIRED)

Computer software 5,366,849 209,544 - 5,576,393 5,169,830 210,003 - 5,379,833 196,560 197,019

(Previous Year) (5,366,849) (15,024) (15,024) (5,366,849) (5,169,830) (217,898) (217,898) (5,169,830) (197,019) (197,019)

TOTAL (B) 5,366,849 209,544 - 5,576,393 5,169,830 210,003 - 5,379,833 196,560 197,019

Previous Year (5,366,849) (15,024) (15,024) (5,381,873) (5,169,830) (217,898) (217,898) (5,387,729) 5,856 (197,019)

TOTAL (A) + (B) 119,388,083 6,996,113 6,333,719 120,050,477 61,923,275 20,725,495 3,580,441 79,068,329 40,982,148 57,464,809

Total of Previous Year (119,388,083) (13,149,140) (8,675,854) (132,537,223) (61,923,275) (21,233,418) (10,246,020) (83,156,694) (49,380,529) (57,464,809)



10 INVESTMENTS (Refer to note 21)


NON-CURRENT PORTION

CURRENT PORTION

NON-CURRENT PORTION

CURRENT PORTION

` ` ` `

TRADE INVESTMENTS (VALUED AT COST UNLESS STATED OTHERWISE)

a) Unquoted equity shares (fully Paid)


IDFC Capital (Singapore) Pte. Limited - 2,384,588,194 2,462,166,070 -

55,475,000 (previous year 55,475,000) equity shares of SGD 1 each fully paid up

Others

Aavantika Gas Limited - 97,500 25,000 -

2,500 (previous year 2,500) equity shares of ` 10 each fully paid up

IndianOil LNG Private Limited - 40,000 - 40,000

4,000 (previous year 4,000) equity shares of ` 10 each fully paid up

b) Other Investments

INVESTMENTS IN VENTURE CAPITAL UNITS (NON-TRADE)

IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class C - 16,286,411 11,132,718 -

2,550,000 (previous year 2,550,000) units of ` 10 each, ` 4.16 (previous year ` 4.69) paid up per unit, commitment restricted to ` 7.143 per unit

IDFC Infrastructure Fund 3- IDFC Private Equity Fund III - Class F - 8,496,724 4,570,670 -

728,535 (previous year 728,535) units of ` 10 each, ` 5.80 (previous year ` 8.43) paid up per unit

INVESTMENTS IN MUTUAL FUND UNITS (NON-TRADE)

IDFC - Cash Fund Growth - Direct Plan 233816.101 (previous year116,539.627) units (Net Assets Value ` 493,400,957 previous year ` 230,250,278)

- 493,400,957 - 225,972,830

INVESTMENTS IN PROPERTY (AT COST LESS ACCUMULATED DEPRECIATION)

Cost of building - 494,192,000 494,192,000 -

Less: Accumulated depreciation - 74,489,853 66,253,320 -

Net block / Net realisable value - 419,702,147 427,938,680 -

TOTAL - 3,322,611,933 2,905,833,138 226,012,830

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

Aggregate Cost of quoted investments: ` Nil (Previous Year ` Nil)

Aggregate Cost of unquoted investments: ` 3,375,838,142 (Previous Year ` 3,131,845,968)



11 LOANS AND ADVANCES (unsecured, considered good unless otherwise stated)


NON-CURRENT PORTION

CURRENT PORTION NON-CURRENT PORTION

CURRENT PORTION

` ` ` `

Unsecured considered good unless otherwise stated

Advance payment of income tax (net of provision for tax of ` 842,896,939 (previous year ` 1,355,675,346))

- 280,591,579 236,135,254 -

Security deposits - 58,016,647 58,076,089 23,155,293

Others

Prepaid expenses - 100,789,104 64,574,451 62,257,036

Supplier Advance - - - 135,210

Balances with government authorities

GST / Service tax credit receivable - 17,406,852 - 34,612,152

Interest accrued and not due - 875,730 - 104,354

Others - 21,348,571 18,100,836 2,404,853

Less: Provision for doubtful advance - - - (2,267,365)

TOTAL - 479,028,483 376,886,630 120,401,533



AS ATMARCH 31, 2017

` `

Cash on hand 13,422 6,090

Balances with banks

In current accounts (Refer to note 26) 10,328,725 13,262,560

TOTAL 10,342,147 13,268,650

13 OTHER CURRENT ASSETS (unsecured, considered good unless stated otherwise)


AS ATMARCH 31, 2017

` `

Gratuity receivable (refer to note below) 1,183,678 -

Expenses recoverable 15,693,945 40,914,112

TOTAL 16,877,623 40,914,112

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, 2018.

14 TRADE RECEIVABLE


AS ATMARCH 31, 2017

` `

Sundry debtors 9,841,554 -

TOTAL 9,841,554 -






` `

Management fees 1,044,714,752 1,247,780,617

TOTAL 1,044,714,752 1,247,780,617

16 OTHER INCOME



` `

Interest

Interest on income tax refund 3,399,089 4,455,957

Other interest 853,565 104,354

Others

Profit on sale of fixed assets (Net) - 1,179,764


Rental income (Refer to note 26 and note 27) 35,448,000 35,448,000

Miscellaneous income 114,915 -

TOTAL 69,522,735 62,320,724

17 EMPLOYEE BENEFITS EXPENSES



` `

Salaries and bonus (Refer to note 26) 585,654,681 554,414,892

Contribution to provident and other funds (Refer to note 24) 22,597,360 23,864,188

Gratuity 3,688,443 17,056,109

Staff welfare expenses 7,279,233 6,509,957

TOTAL 619,219,717 601,845,146

18 FINANCE COSTS



` `

Interest on inter corporate deposit (Refer to note 26) 2,466 -

Interest tax 141,221 107,385

TOTAL 143,687 107,385



19 DEPRECIATION AND AMOTISATION EXPENSE



` `

Depreciation on tangible assets (Refer to note 9) 20,515,492 21,015,520

Depreciation on intangible assets (Refer to note 9) 210,003 217,898

Depreciation on investment property (Refer to note 10) 8,236,533 8,236,533

TOTAL 28,962,028 29,469,951

20 OTHER EXPENSES



` `

Rent (Refer to note 26 and note 27) 39,188,371 39,794,704

Repairs and maintenance

Equipment - 113,002

Others (Refer to note 26) 18,486,803 18,353,794

Insurance charges 1,372,016 1,608,196

Electricity 1,558,504 1,772,140

Travelling and conveyance (Refer to note 22) 35,315,920 53,362,881

Realised loss on foreign currency transactions 33,790 82,729

Printing and stationery 853,471 1,487,084

Postage, telephone and fax 1,897,088 2,932,802

Advertisement and publicity (Refer to note 22) 23,957,876 24,684,259

Professional fees (Refer to note 22) 140,931,869 171,391,493

Directors' fees 1,050,000 5,850,000

Auditors' remuneration (Refer to note (a) below) 1,424,000 1,433,739

Shared service cost (Refer to note (b) below and see note 26) 5,771,596 5,401,911

Distribution fees 48,598,299 45,072,200

CSR expenditure (Refer to note 26 and note 30) 6,213,500 6,002,229

Loss on sale of fixed assets 247,101 -

Miscellaneous expenses (Refer to note 22 and note 26) 13,941,251 15,402,248

TOTAL 340,841,455 394,745,411

(a) Break up of auditors’ remuneration:



` `

Audit fees 850,000 750,000



Out of pocket expenses 24,000 8,739

TOTAL 1,424,000 1,433,739

(b) Shared service cost of ` 836,518 (previous year ` 380,911) represents cost allocated by the Ultimate Holding Company under a service level agreement, ` 4,131,235 (previous year ` 5,021,000) represents cost allocated by IDFC Bank Limited and ` 534,599 (previous year ` Nil) represents cost allocated by IDFC Asset Management Company Limited, fellow subsidiaries under a service level agreement.



21 LOSS ON ADJUSTMENT OF REALISABLE VALUE OF LONG TERM ASSETS (refer to note 2A)

PARTICULARS "COST/WDV AS AT

MARCH 31, 2018"

"REALISABLE VALUE AS AT

MARCH 31, 2018"

NET LOSS

` ` `

Investment in subsidiaries 2,462,166,070 2,384,588,194 (77,577,876)

Investment in equity shares - others 25,000 97,500 72,500

Investments in venture capital units 1,815,161 24,783,135 22,967,974

Investments in mutual fund units 492,089,764 493,400,957 1,311,193

Loss on adjustment of realisable value of long term assets (53,226,209)

22 FOREIGN CURRENCY TRANSACTIONS (on payment basis)


AS ATMARCH 31, 2017

` `

Travelling expenses 2,793,491 2,202,451

Professional fees - 627,805

Others (include advertisement sponsorship and miscellaneous expenses) 14,547,201 12,272,517

23 DISCLOSURES UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006:


AS ATMARCH 31, 2017

` `

a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year

Principal NilInterest Nil

Principal 198,676Interest Nil

b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year

- -

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

- -

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

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

- -

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

- -

The above information takes into account only those suppliers whose response to inquiries made by the Company for this purpose has been received.



24 EMPLOYEE BENEFITSIn accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of the Companies Act, 2013, the following disclosures have been made:

The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included in note 16 under “Contribution to provident and other funds”:

PARTICULARS AS AT MARCH 31, 2018


` `

Defined contribution plans-Amount recognised in the statement of Profit & Loss

Provident fund 17,950,397 18,344,279

Pension fund 3,546,296 3,966,124

Superannuation fund 1,099,962 1,553,674

Labour welfare fund 705 111

TOTAL 22,597,360 23,864,188

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 the Financial Statements are prepared on realisable value basis, The liability towards gratuity is determined based on actual liability which may become payable by the Company as at March31, 2018 (Refer to Note 2A).



` `

PRESENT VALUE OF DEFINED BENEFIT OBLIGATIONS:

Balance at the beginning of the year - 67,039,729

Current service cost - 10,392,916

Interest cost - 5,848,706

Benefits paid - (7,399,340)

Actuarial loss - 3,717,190

Liability assumed on acquisition - 1,168,042

Balance at the end of the year - 80,767,243

CHANGE IN FAIR VALUE OF PLAN ASSETS:

Balance of plan assets at the beginning of the year - 70,179,482

Expected return on plan assets - 6,283,391

Contributions by the Company - -

Benefits paid - (7,399,340)

Actuarial gain / (loss) on plan assets - (5,549,686)

Balance of plan assets at the end of the year - 63,513,847

TOTAL ACTUARIAL LOSS TO BE RECOGNISED - 9,266,876





` `

ACTUAL RETURN ON PLAN ASSETS:


Actuarial gain / (loss) on plan assets - (5,549,686)

Actual return on plan assets - 733,705

ASSESTS & LIABILITIES RECOGNISED IN THE BALANCE SHEET:

Liability at the end of the year - 80,767,243

Fair value of plan assets at the end of the year - 63,513,847

Amount recognised in the Balance Sheet under note 7 “Other current liabilities- Payable to Employee Benefit Funds"

- 17,253,396

EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS:

Current service cost - 10,392,916

Interest cost - 5,848,706


Net actuarial loss to be recognised - 9,266,876

Losses on acquisition/divestiture - 1,168,042

Expense recognised in the Statement of Profit and Loss under note 16 "Employee benefits expenses"

- 20,393,149

RECONCILIATION OF THE LIABILITY RECOGNISED IN THE BALANCE SHEET:

Opening net liability - (3,139,753)

Expense recognised - 20,393,149

Contributions by the Company - -

Amount recognised in the Balance Sheet under note 7 “Other current liabilities - Payable to Employee Benefit Funds"

- 17,253,396

EXPECTED EMPLOYER’S CONTRIBUTION FOR THE NEXT YEAR - 10,000,000




IN `

Defined benefit obligation - 90,918,263 90,918,263 67,039,729 32,937,687

Plan assets - 90,918,263 90,918,263 70,179,482 31,160,442

Surplus / (deficit) - - - 3,139,753 (1,777,245)

Experience adjustment on plan liabilities - (2,085,060) (2,085,060) (818,432) 4,355,447

Experience adjustment on plan assets - 210,915 210,915 4,644,808 (602,656)





% %

INVESTMENT PATTERN:

Insurer managed funds

Government securities - 27.81

Deposit and money market securities - 14.77

Debentures / bonds - 57.42

PRINCIPAL ASSUMPTIONS:

Discount rate (per annum) - 6.90

Expected rate of return on assets (per annum) - 7.50

Salary escalation rate (per annum) - 8.00

Gratuity liability has been funded to the extent of expected payment as of March 31, 2018 (Refer note 2A).

The estimates of future salary increase considered in the acturial valuation, takes into account inflation, seniority, promotion and other relevant factors for the year ended March 31, 2017.

25 SEGMENT REPORTING

The 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 asscociated with geographical segmentation, hence there is no secondary segment reporting based on geographical segments.

26 RELATED PARTY DISCLOSURES

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

I Ultimate Holding Company:

IDFC Limited

II Holding Company:

IDFC Finance Holiding Company Limited

III Subsidiary Company:

IDFC Capital (Singapore) Pte. Limited

IV Fellow Subsidiary Companies:

IDFC Foundation

IDFC Bank Limited


V Key Management Personnel:

Mr. M. K. Sinha - Managing Partner & Chief Executive Officer

Mr Manish Jindal - Chief Financial Officer & Investor Relations



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

NAME OF THE RELATED PARTY AND NATURE OF THE RELATIONSHIP



` `

(I) ULTIMATE HOLDING COMPANY

IDFC Limited Shared services cost 836,518 380,911

Interest expenses 2,466 -

Other Repairs and Maintenance - 126,970

Inter corporate deposit taken 10,000,000 -

Inter corporate deposit repaid 10,000,000 -

(II) FELLOW SUBSIDIARY COMPANIES

IDFC Foundation CSR expenditure 6,213,500 6,002,229

IDFC Bank Limited Rental Income 35,448,000 35,448,000

Office Maintenance (Received) 1,008,000 1,008,000

Property Tax (Received) 3,024,000 3,024,000

Security Deposit Received 17,724,000 17,724,000

Shared service cost (Paid) 4,131,235 5,021,000

Rent paid 3,000,000 3,000,000

Distributor Commission 1,600,000 -

Balance with Bank in current account 8,822,335 12,380,097

IDFC Asset Management Company Limited Computer consumables - 91,771

Shared service cost (Paid) 534,599 -

(III) KEY MANAGEMENT PERSONNEL

Mr. M. K. Sinha Remuneration paid 52,252,060 45,006,166

Mr. Manish Jindal Remuneration paid 20,253,607 18,080,546

27 LEASE DISCLOSURE

The Company has taken premises under operating leases, which expires between August 2017 to May 2020 (previous year September 2016 to May 2020). Rent include gross rental expenses of ` 36,188,371 (previous year ` 36,794,704).

The committed lease rentals in the future are:



` `

Not later than one year 35,341,522 36,188,371

Later than one year and not later than five years 40,581,454 75,922,976

The Company has given premises on operating lease, which expires in September 2020 (previous year: September 2020).

The committed lease rentals in the future are:



` `






In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of the Companies Act, 2013, the earnings per share has been computed as under:



` `

Profit / (Loss) after taxation (75,870,050) 190,384,448

Weighted average outstanding equity shares 219,850 219,850

Par value per share 10 10

Basic Earnings Per Share (345.10) 865.97

Diluted Earnings per share (345.10) 865.97

29 PROVISION AND CONTINGENCIES

(a) Contingent liabilities and commitments



` `

1) COMMITMENTS

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

TOTAL 585,454 585,454

PARTICULARS

Provisions for contingencies as at 31st March, 2017 - -

Less: Provisions for refund of management fees as at 31st March, 2018 (Refer not below) 230,596,083 -

Debited to the statements of Profit and Loss 230,596,083 -

Note: As per clause 2.2 of Deed of Amendment to the Investment Management Agreement dated November 14, 2014 of IDFC Infrastructure Fund 3 (the fund), in an event if the investment manager does not achieve the agreed milestone of INR exit Multiple of Invested Capital (MoIC) of 1.7x by September 30, 2018, then a sum equivalent to 30% of management fee charged from September 1, 2014 will be refunded by the investment manager to the fund. Accordingly, provision for refund of management fee to the extent of 30% of the fee charged from September 1, 2014 till March 31, 2017 has been provided.

The Company does not account for or recognise contingent assets.

(b) There are no litigations claims made by the Company or pending on the Company.

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

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

` 6,213,500 (previous year ` 6,002,229).

(b) Amount spent towards CSR during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities is ` 6,213,500 (previous year ` 6,002,229), which comprise of following:

S.N. PARTICULARS YEAR ENDED MARCH 31, 2018 YEAR ENDED MARCH 31, 2017



IN CASH YET TO BE PAID IN

CASH (I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN

CASH (I.E. PROVISION)

TOTAL

IN `


(iI) On purposes other than (i) above 6,213,500 - 6,213,500 6,002,229 - 6,002,229

31 DISCLOSURES RELATING TO SPECIFIED BANK NOTES (SBNS)*(a) The disclosures relating to Specified Bank Note (SBN) is not applicable to the Company during the year.

(b) In the previous year, the Company did not held and transacted in Specified Bank Note (SBN) during the period November 08, 2016 to December 30,2016.

* Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O.3407(E), dated the 8th November, 2017.

32 PRIOR YEARS FIGURESPrevious year’s figures have been regrouped / reclassified wherever necessary to correspond with the current year’s classification / disclosure.



Sunil KakarDirector


IDFC CAPITAL (SINGAPORE) PTE. LTD.

Mr. Vikram Limaye


Dr. Rajeev Uberoi

Mr. Sachin Johri

Deloitte & Touche LLP

DBS Bank Limited

One Finlayson Green #16-02

Singapore 049246

Tel +65 6499 0700

Fax +65 6536 3359

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C C A P I TA L ( S I N G A P O R E ) P T E LT D | 1 6 7

DIRECTORS’ STATEMENT

The directors present their statement together with the audited financial statements of the company for the financial year ended March 31, 2018.

In the opinion of the directors, the financial statements of the company as set out on page 7 to 28 are drawn up so as to give a true and fair view of the financial position of the company as at March 31, 2018 and the financial performance, changes in equity and cash flows of the company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts when they fall due.

1. DIRECTORS

The directors of the company in office at the date of this statement are:

Rajeev Uberoi

Sachin Johri

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

AT ENDOF YEAR


AT ENDOF YEAR

Ultimate holding company - IDFC Limited

Rajeev Uberoi 132,704 132,704 – –


OPTIONS TO SUBSCRIBE FOR ORDINARY SHARES IN ULTIMATE HOLDING COMPANY


AT ENDOF YEAR


Rajeev Uberoi 600,000 600,000

Sachin Johri 125,001 125,001

4. SHARE OPTIONS

(a) Options to take up unissued shares

During the financial year, no options to take up unissued shares of the company were granted.

(b) Options exercised

During the financial year, there were no shares of the company issued by virtue of the exercise of an option to take up unissued shares.

(c) Unissued shares under option

At the end of the financial year, there were no unissued shares of the company under options.

5. AUDITORS

The auditors, Deloitte & Touche LLP, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Rajeev Uberoi Sachin Johri Director Director

April 26, 2018


INDEPENDENT AUDITORS' REPORT

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of IDFC Capital (Singapore) Pte. Ltd. (the “company”) which comprise the

statement of financial position of the company as at March 31, 2018, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows of the company for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies, as set out on pages 7 to 28.

In our opinion, the accompanying financial statements of the company are properly drawn up in accordance with the provisions of the

Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”), so as to give a true and fair view of

the financial position of the company as at March 31, 2018 and of the financial performance, changes in equity and cash flows of the

company for the year then ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are

further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of

the company in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics

for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of

the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and

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

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages 1 to 3.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion

thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider

whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit

or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of

the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are

recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high

level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement

when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the

audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform

audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our

opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud

may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.



(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management.

(d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the management regarding, among other matters, the planned scope and timing of the audit and significant audit

findings, including any significant deficiencies in internal control that we identify during our audit.


In our opinion, the accounting and other records required by the Act to be kept by the company have been properly kept in accordance

with the provisions of the Act.

Public Accountants and


Singapore

April 26, 2018


STATEMENT OF FINANCIAL POSITION MARCH 31, 2018

2018 2017

NOTE US$ US$

ASSETS

Current assets

Cash and cash equivalents 7 12,581,884 10,714,301

Trade and other receivables 8 173,384 121,453

TOTAL CURRENT ASSETS 12,755,268 10,835,754

Non-current assets

Investment in associate 9 17,923,893 19,590,446

Property and equipment 10 27,690 34,883

TOTAL NON-CURRENT ASSETS 17,951,583 19,625,329

TOTAL ASSETS 30,706,851 30,461,083

LIABILITY AND NET EQUITY

Current liability

Trade and other payables 11 81,373 40,959

Capital and reserves

Share capital 12 42,507,538 42,507,538

Accumulated losses (11,882,060) (12,087,414)

Net equity 30,625,478 30,420,124

TOTAL LIABILITY AND NET EQUITY 30,706,851 30,461,083

See accompanying notes to financial statements.


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME YEAR ENDED MARCH 31, 2018

2018 2017

NOTE US$ US$

REVENUE 13 1,200,000 1,200,000

Other income 14 184,082 52,473

Staff costs 15 (722,159) (694,396)

Professional fees (132,053) (44,230)

Depreciation expense 10 (6,350) (8,023)

Other operating expenses 16 (318,166) (636,004)

PROFIT / (LOSS) BEFORE INCOME TAX 205,354 (130,180)

Income tax 17 - -

PROFIT/(LOSS) FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE INCOME / (LOSS) FOR THE YEAR

205,354 (130,180)



STATEMENT OF CHANGES IN EQUITY YEAR ENDED MARCH 31, 2018

SHARE CAPITAL ACCUMULATED LOSSES

TOTAL

US$ US$ US$

Balance at April 1, 2016 42,507,538 (11,957,234) 30,550,304

Loss for the year, representing total comprehensive loss for the year - (130,180) (130,180)

Balance at March 31, 2017 42,507,538 (12,087,414) 30,420,124

Profit for the year, representing total comprehensive income for the year - 205,354 205,354

BALANCE AT MARCH 31, 2018 42,507,538 (11,882,060) 30,625,478



STATEMENT OF CASH FLOWS YEAR ENDED MARCH 31, 2018

2018 2017

US$ US$

OPERATING ACTIVITIES

Profit/(Loss) before income tax 205,354 (130,180)

Adjustments for:

Depreciation expense 6,350 8,023

Loss on disposal of property and equipment 843 -

Interest income (170,016) (45,669)

Operating cash flows before movements in working capital 42,531 (167,826)

Trade and other receivables 12,179 294,733

Trade and other payables 40,414 (13,386)

NET CASH GENERATED FROM OPERATING ACTIVITIES 95,124 113,521

INVESTING ACTIVITIES

Interest received 105,906 45,669

Purchase of property and equipment - (2,064)

Distributions of investment in associate 1,666,553 1,071,123

NET CASH GENERATED FROM INVESTING ACTIVITIES 1,772,459 1,114,728

Net increase in cash and cash equivalents 1,867,583 1,228,249

Cash and cash equivalents at beginning of the year 10,714,301 9,486,052

Cash and cash equivalents at end of the year 12,581,884 10,714,301




01 GENERAL

The 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 company is in the process of transferring its rights and obligations as a Fund Manager of the India Infrastructure

Fund (Singapore) Pte Ltd, to a third party. Upon completion of the process, the Company is expected to continue sourcing for new

opportunities.

The financial statements of the company for the year ended March 31, 2018 were authorised for issue by the Board of Directors on April

26, 2018.


BASIS OF ACCOUNTING

The financial statements are prepared in accordance with the historical cost basis except as disclosed in the accounting policies below,

and are drawn up in accordance with the provisions of the Singapore Companies Act and Financial Reporting Standards in Singapore

(“FRS”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation

technique. In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability

which market participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement

and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions

that are within the scope of FRS 102 Share-based Payment, and measurements that have some similarities to fair value but are not fair

value, such as value in use in FRS 36 Impairment of Assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which

the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety

which are described as follows:

• Level1inputsarequotedmarketprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessat

the measurement date;

• Level2inputsareinputs,otherthanthequotedmarketpricesincludedwithinLevel1,thatareobservablefortheassetorliability,

either directly or indirectly; and

• Level3inputsareunobservableinputsfortheassetorliability.

ADOPTION OF NEW AND REVISED STANDARDS

On April 1, 2017, the company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from

that date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the

company’s accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following new/revised FRSs and amendments to FRS that are relevant to

the company were issued but not effective:

• FRS109FinancialInstruments1

• FRS115RevenuefromContractswithCustomers(withclarificationsissued)1

• FRS116Leases2

1 Applies to annual periods beginning on or after January 1, 2018, with early application permitted.

2 Applies to annual periods beginning on or after January 1, 2019, with earlier application permitted if FRS 115 is adopted.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material

impact on the financial statements of the company in the period of their initial adoption except for the following:

FRS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS

In November 2014, FRS 115 was issued which establishes a single comprehensive model for entities to use in accounting for revenue

arising from contracts with customers. FRS 115 will supersede the current revenue recognition guidance including FRS 18 Revenue, FRS



11 Construction Contracts and the related Interpretations when it becomes effective. Further clarification to FRS were also issued in June

2016.

The core principle of FRS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to

customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or

services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

• Step1:Identifythecontract(s)withacustomer.

• Step2:Identifytheperformanceobligationsinthecontract.

• Step3:Determinethetransactionprice.

• Step4:Allocatethetransactionpricetotheperformanceobligationsinthecontract.

• Step5:Recogniserevenuewhen(oras)theentitysatisfiesaperformanceobligation.

Under FRS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or

services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added

in FRS 115 to deal with specific scenarios. Furthermore, extensive disclosures are required by FRS 115.

The Company does not anticipate that the application of this new standard FRS 115 will have any material impact on the financial

statements other than enhanced disclosures.

INVESTMENTS IN ASSOCIATE

An associate is an entity over which the company has significant influence and that is neither a subsidiary nor an interest in a joint

venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control

or joint control over those policies.

The equity method of accounting has not been adopted for the investment in associate in the company’s financial statements as the

company itself is a fully owned subsidiary of IDFC Limited which presents publicly available consolidated financial statements.

The investment in associate is stated at cost less allowance for impairment with the allowance being the difference between the carrying

amount less the net asset value of the Associate, as reduced by distribution of capital invested.

FINANCIAL INSTRUMENT

Financial assets and financial liabilities are recognised on the company’s statement of financial position when the company becomes a

party to the contractual provisions of the instrument.

Effective interest rate method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income

or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or

payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and

other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and

expense is recognised on an effective interest rate basis for debt instruments.

FINANCIAL ASSETS

Loans and receivables

Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans

and receivables”. Loans and receivable are measured at amortised cost using the effective interest method less impairment. Interest is

recognised by applying the effective interest method, except for short-term receivables when the effect of discounting is immaterial.

Impairment of financial assets

Financial assets, other than those at fair value through profit or loss, are assessed for indicators of impairment at the end of each

reporting period. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred

after the initial recognition of the financial asset, the estimated future cash flows of the financial asset have been impacted.

For all other financial assets, objective evidence of impairment could include:

• significantfinancialdifficultyoftheissuerorcounterparty;or

• defaultordelinquencyininterestorprincipalpayments;or

• itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation.

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount and

the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial

asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount



is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance

account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying

amount of the allowance account are recognised in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event

occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the

extent the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would

have been had the impairment not been recognised.

DERECOGNITION OF FINANCIAL ASSETS

The company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the

financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the company neither transfers nor

retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the company recognises its

retained interest in the asset and an associated liability for amounts it may have to pay. If the company retains substantially all the risks

and rewards of ownership of a transferred financial asset, the company continues to recognise the financial asset and also recognises a

collateralised borrowing for the proceeds received.

FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Classification as debt or equity

Financial liabilities and equity instruments issued by the company are classified according to the substance of the contractual

arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost,

using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or they expire.

Offsetting arrangements

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company

has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and

settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be

exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.

PROPERTY AND EQUIPMENT

Property 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

Distributions from the associate in excess of the sums invested are recognized as revenue in the period it was declared.

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 allowance for impairment, if any, of the associate. Net asset value is

the amount recoverable based on the financial statements of the associate. The company uses its judgement to ensure that investment

amount adjusted to net asset value is recoverable and appropriate.



04 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT

(a) Categories of financial instruments

The following table sets out the financial instruments as at the end of the reporting period:

2018 2017

US$ US$

Financial assets

Loans and receivables (including cash and bank balances) 12,729,006 10,803,895


At amortised cost (81,373) (40,959)

At the end of reporting period, the company does not have any financial instruments subject to offsetting, enforceable master netting arrangements or similar agreements.

(b) Credit risk

Credit risk refers to the risk that debtors will default on their obligations to repay the amount owing to the company, resulting in a loss to the company. The company has adopted a stringent procedure in extending credit terms to its customers and in monitoring its credit risk.

The company does not have any significant credit risk exposure as at the end of the reporting period. The company places its cash with creditworthy financial institutions.

The maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as at the end of the reporting period is the carrying amount of the financial assets as stated in the statement of financial position.

(c) Interest rate risk

The company does not have any significant interest bearing assets and liabilities except fixed deposits. Management is of the view that given the current low interest rates, it is not exposed to significant interest rate risk, and accordingly sensitivity analysis is not disclosed.

(d) Foreign currency risk

The company’s foreign currency exposures arise mainly from the exchange rate movements of the Singapore dollar against the United States dollar.

At the end of the reporting period, the carrying amounts of monetary assets and monetary liabilities denominated in currencies other than the company’s functional currency are as follows:

SINGAPORE DOLLAR

US$

2018 2017

ASSETS

Cash and cash equivalents 41,052 92,812


TOTAL 91,329 139,867

LIABILITIES

Trade and other payables (81,373) 40,959

Net currency exposure 9,956 98,908

Foreign currency sensitivity

The following table details the sensitivity to a 8% (2017 : 8%) increase and decrease in the relevant foreign currencies against the functional currency of the company. 8% (2017 : 8%) 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 increase/decrease by 8% (2017 : 8%) against the functional currency of the company, profit/(loss) will increase (decrease) by:

SINGAPORE DOLLAR IMPACT

2018 2017

US$ US$

Profit/(Loss) 797 7,913

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 2017 and 2018 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, 2018 and March 31, 2017.

There were no changes to the company’s overall strategy during the year.

05 HOLDING COMPANY AND RELATED COMPANY TRANSACTIONSThe company is a wholly-owned subsidiary of IDFC Alternatives Ltd. India. The company’s ultimate holding company is IDFC Limited, incorporated in India. Related companies in these financial statements refer to members of the ultimate holding company’s group of companies.

Some of the company’s transactions and arrangements are between members of the group and the effect of these on the basis determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest-free and repayable on demand unless otherwise stated.

During the year, the company has entered into the following transactions with its related companies:

2018 2017

US$ US$

Recharges to a related company 127,561 48,693

06 OTHER RELATED PARTY TRANSACTIONSSome of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between the parties is reflected in these financial statements. The balances are unsecured, interest-free and repayable on demand unless otherwise stated.

During the year, the company has entered into the following transactions with its related parties:

2018 2017

US$ US$

Management fee earned from a related party 1,200,000 1,200,000

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

2018 2017

US$ US$

Short-term benefits 315,484 235,412

The figures for 2018 and 2017 do not include any remuneration attributable to the key management from the bonus pool as the allocation is yet to be determined.



07 CASH AND CASH EQUIVALENTS

2018 2017

US$ US$

Cash and bank balances 68,188 510,752

Fixed deposits 12,513,696 10,203,549

TOTAL CASH AND CASH EQUIVALENTS 12,581,884 10,714,301

The fixed deposit bears interest at an average rate of 1.37% (2017 : 1.33%) per annum and matures within 12 months (2017 : twelve 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

2018 2017

US$ US$

Trade receivables from a related company (Note 5) 27,115 4,166

Prepayments 26,262 31,859

Deposits 47,813 44,868

Others 72,194 40,560

TOTAL 173,384 121,453

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 (2017 : 30 days). At year-end, there were no balances which were past due and no impairment allowance was made.

09 INVESTMENT IN ASSOCIATE

2018 2017

US$ US$

Cost of investment in associate 19,590,446 20,661,569

Net distribution during the year (1,666,553) (1,071,123)

17,923,893 19,590,446

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

2018%

2017%

Emerging Markets Private Equity Fund LP Guernsey 43.28 43.28 Private equity fund

In November 2014, the company acquired a 46.15% stake in Emerging Markets Private Equity Fund from a related company at a value of US$22,368,000 with a commitment of US$30,000,000 and an effective commitment for investment of US$26,705,585 resulting in effective ownership of 43.28%.

In accordance with the fund constitution documents, all distributions received from the fund until the capital is repaid in full is treated as distribution of capital. Distributions over and above the sums invested will be considered as revenue and will be taken to profit or loss.



10 PLANT AND EQUIPMENT

LEASEHOLDIMPROVEMENTS

OFFICECOMPUTERS

OFFICE EQUIPMENT

FURNITURE AND FITTINGS

TOTAL

US$ US$ US$ US$ US$

Cost:

At April 1, 2016 148,219 100,763 34,726 65,050 348,758

Additions - - - 2,064 2,064

At March 31, 2017 148,219 100,763 34,726 67,114 350,822

Disposal - - - (1,445) (1,445)

At March 31, 2018 148,219 100,763 34,726 65,669 349,377

Accumulated depreciation:

At April 1, 2016 148,219 90,390 19,182 50,125 307,916

Depreciation - 3,467 2,036 2,520 8,023

At March 31, 2017 148,219 93,857 21,218 52,645 315,939

Depreciation - 2,282 1,764 2,304 6,350

Disposal - - - (602) (602)

At March 31, 2018 148,219 96,139 22,982 54,347 321,687

Carrying amount:

At March 31, 2018 - 4,624 11,744 11,322 27,690

At March 31, 2017 - 6,906 13,508 14,469 34,883

Loss amounting to US$337 has been recharged to IDFC Securities Singapore Pte. Limited for its share.

11 TRADE AND OTHER PAYABLES

2018 2017

US$ US$

Accruals and others 81,373 40,959

Accrued expenses principally comprise amounts outstanding for ongoing costs.

12 SHARE CAPITAL

2018 2017 2018 2017

NUMBER OF ORDINARY SHARES US$ US$

Issued and paid up:

At the beginning and end of the year 55,475,000 55,475,000 42,507,538 42,507,538

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the company.

13 REVENUE

2018 2017

US$ US$

Management fee income from a related party (Note 6) 1,200,000 1,200,000

14 OTHER INCOME (LOSSES)

2018 2017

US$ US$

Net foreign exchange gain 7,849 -

Recharges to a related company (Note 5) 2,540 3,209

Interest income 170,016 45,669

Government grant 4,183 3,595

Loss on disposal of property and equipment (Note 10) (506) -

184,082 52,473



15 STAFF COSTS

2018 2017

US$ US$

Staff costs expense includes the following:

Staff costs (excluding directors’ remuneration and costs of defined contribution plans) 329,892 386,478

Directors’ remuneration 315,484 235,412

Costs of defined contribution plans 28,428 29,583

Other staff costs 48,355 42,923

TOTAL 722,159 694,396

16 OTHER OPERATING EXPENSES

2018 2017

US$ US$

Rental and related expenses 149,771 180,532

Fund organisational expenses 49,713 352,013

Travelling expenses 36,744 36,018

Corporate communication expense 2,098 1,850

Net foreign exchange loss - 5,852

General administrative expenses 79,840 59,739

TOTAL 318,166 636,004

17 INCOME TAXThe income tax benefit varied from the amount of income tax expense determined by applying the Singapore income tax rate of 17% (2017 : 17%) to profit before income tax as a result of the following differences:

2018 2017

US$ US$

Profit/(Loss) before income tax 205,354 (130,180)

Tax expense (benefit) at the statutory tax rate of 17% (2017 : 17%) 34,910 (22,131)

(Utilized)/unutilized tax losses not recognised as deferred tax assets (34,910) 22,131

- -

Subject to the agreement by the tax authorities, at the end of the reporting period, the company has unutilised tax losses of US$12,925,806 (2017 : US$10,149,944) available for offset against future profit. Deferred tax asset of US$2,197,387 (2017 : US$1,725,490) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders as defined.

18 COMMITMENTS

a) Operating lease commitments

2018 2017

US$ US$

Minimum lease payments under operating leases 141,578 171,433

At the end of the reporting year, the company has outstanding commitments under non-cancellable operating leases, which fall due as follows:

2018 2017

US$ US$

Within one year 175,874 165,955

In the second to fifth years inclusive 12,369 -

Operating lease payments represent rentals payable by the company for rental of office premises and equipment. Leases are negotiated for an average term of two years, with an option to renew for another one year subject to terms and conditions then prevailing.

b) The company has a commitment to inject capital to its associate amounting to US$4,273,546.

IDFC TRUSTEE COMPANY LIMITED

U65990MH2002PLC137533


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

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 8 5

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifteenth Annual Report together with the audited financial statements for the year ended March 31, 2018.


(AMOUNT IN `)



Total Income 13,475,796 14,921,112

Less: Total Expenses 480,744 176,725

Profit before Tax 12,995,052 14,744,387


Profit after Tax 9,725,052 11,145,116

COMPANY’S AFFAIRS

The main object of the Company is to act as Trustee for various investment funds under the private equity business primarily established by IDFC Limited and its subsidiaries.

The Company continues to act as the trustee of India Infrastructure Fund, IDFC Infrastructure Fund 2 – IDFC Private Equity Fund II, IDFC Infrastructure Fund 3 – IDFC Private Equity Fund III, IDFC Project Equity Domestic Investors Trust – I, IDFC Project Equity Domestic Investors Trust – II, India Infrastructure Fund II, IDFC Real Estate Yield Fund, IDFC Score Fund, IDFC Private Equity Fund - IV, IDFC Private Equity Employee Benefit Trust.


The details of amount carried forward to reserves are given in note no. 4 of the Notes forming part of the financial statements.

DIVIDEND


BOARD OF DIRECTORS

The Board comprises of three Directors. In accordance with the Articles of Association of the Company and pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Mahendra N Shah (DIN: 00124629) would retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible, offers himself for reappointment.

The Board of Directors recommends reappointment of Mr. Mahendra N Shah at the ensuing AGM.


During the year, four Board meetings were convened and held. The gap between the two meetings was within the limit prescribed under the Companies Act, 2013. The composition of Board is in compliance with the Companies Act, 2013. The dates of the meetings were: April 27, 2017, July 25, 2017, October 30, 2017 and January 29, 2018. Attendance details of the Board Meeting are given in the below table.

ATTENDANCE DETAILS OF BOARD OF DIRECTORS FOR FY18

NAME OF THE MEMBER DIN POSITION NO. OF MEETINGS HELD

NO. OF MEETINGS ATTENDED

Mr. Sunil Kakar 03055561 Chairman & Non-Executive Director 4 4

Dr. Rajeev Uberoi 01731829 Non-Executive Director 4 4

Mr. Mahendra N. Shah 00124629 Non-Executive Director 4 4

AUDITORS

At its 15th AGM last year, the Shareholders of the Company had approved appointment of Price Waterhouse & Co. Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company for a period of five years from the conclusion of the 15th AGM of the Company held for FY17 till the conclusion of the 20th AGM of the Company to be held for FY22, subject subsequent ratification on annual basis. It is proposed ratify the appointment of PWC as Statutory Auditors of the Company for FY19. The Members are requested to approve the same at the ensuing AGM.

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

BOARD'S REPORT



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


The Company has in place, adequate systems of Internal Control that commensurate with operations of the Company to ensure compliance with policies and procedures.

RISK MANAGEMENT

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



PUBLIC DEPOSITS





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


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.


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, 2018 till the date of this report.




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

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.



(a) in the preparation of the annual financial statements for the year ended March 31, 2018, 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, 2018 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;

BOARD'S REPORT


(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.

ACKNOWLEDGMENTS

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 KakarChairman


BOARD'S REPORT





i) CIN U65990MH2002PLC137533


iii) Name of the Company IDFC TRUSTEE COMPANY LIMITED


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



Link Intime India Private Limited * C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.




SR. NO.



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

6619 100


SR. NO.

NAME AND ADDRESS OF THE COMPANY

CIN/GLN HOLDING/ SUBSIDIARY/ASSOCIATE % OF SHARES HELD

APPLICABLE SECTION

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

2. IDFC Financial Holding Company Limited

U65900TN2014PLC097942 Holding Company 100 Section 2(46)




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

THE YEARDEMAT PHYSICAL TOTAL % OF

TOTAL SHARES

DEMAT PHYSICAL TOTAL % OF TOTAL

SHARES

A. Promoters

(1) Indian

a) Individual/ HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

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

e) Banks/FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

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

Sub-total (A) (1):- 49,400 600 50,000 100 49,400 600 50,000 100 NIL



49,400 600 50,000 100 49,400 600 50,000 100 NIL




Grand Total (A+B+C) 49,400 600 50,000 100 49,400 600 50,000 100 NIL

ANNEXURE IFORM NO. MGT-9 EXTRACT OF ANNUAL RETURN



SR. NO.




DURING THE YEAR

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY


ENCUMBERED TO TOTAL

SHARES


50,000 100 NIL 50,000 100 NIL NIL

TOTAL 50,000 100 NIL 50,000 100 NIL NIL

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


NOT APPLICABLE


V. INDEBTEDNESS




B. Remuneration to other directors: NIL






TO THE MEMBERS OF IDFC TRUSTEE COMPANY LIMITED


1. We have audited the accompanying financial statements of IDFC Trustee Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit and its cash flows for the year ended on that date.

Other Matter














i. The Company does not have any pending litigations as at March 31, 2018 which would impact its financial position.





Sharad VasantPartnerMembership Number : 101119



ANNEXURE “A” TO INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of IDFC Trustee Company Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


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 (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of 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 Act.





Meaning of Internal Financial Controls Over Financial Reporting6. 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.




such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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.



Sharad Vasant

Partner




Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of IDFC Trustee Company Limited on

the financial statements as of and for the year ended March 31, 2018

i. The Company does not hold any fixed assets during the year ended March 31, 2018. Therefore, the provisions of Clause 3(i) of the


ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of

Clause 3(ii) of the said Order are not applicable to the Company.

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 Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c)

of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered

under Section 185 and 186 of the Act. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the

Rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act

for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the

Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income

tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1,

2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues

of income-tax, sales-tax, service-tax, duty of customs, and duty of excise or value added tax or goods and service tax which

have not been deposited on account of any dispute.

viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any

debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term

loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally

accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across

any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year,

nor have we been informed of any such case by the Management.

xi. The Company has not paid any managerial remuneration during the year. Accordingly, the provisions of Clause 3(xi) of the Order

are not applicable to the Company.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the


xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the

Act. The details of related party transactions have been disclosed in the financial statements as required under Accounting Standard

(AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures

during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him within the meaning

of section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the

provisions of Clause 3(xvi) of the Order are not applicable to the Company.



Sharad Vasant

Partner



ANNEXURE “B” TO INDEPENDENT AUDITORS’ REPORT





Notes ` `



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

(b) Reserves and surplus 4 59,248,274 49,523,222

59,748,274 50,023,222

Current liabilities


(i) Total outstanding dues of micro enterprises and small enterprises and - -

(ii) Total outstanding dues of creditors other than micro enterprises and small enterprises 320,674 45,000


(c) Short-term provisions 7 20,930 -

359,234 50,000

TOTAL 60,107,508 50,073,222

ASSETS

Non-current assets

(a) Long-term loans and advances 8 112,496 90,063

Current assets


(b) Cash and bank balances 10 4,044,065 26,081,234

(c) Short-term loans and advances 11 23,673 6,655

(d) Other current assets 12 197,274 1,083,112

59,995,012 49,983,159

TOTAL 60,107,508 50,073,222


This is Balance Sheet referred to in our report of even date.


For and on behalf of the Board of Directors of IDFC Trustee Company Limited


Mahendra N. ShahDirector





This is Statement of Profit and Loss referred to in our report of even date.









NOTES ` `

I INCOME


Other income 14 4,425,796 6,059,468

TOTAL INCOME (I) 13,475,796 14,921,112

II EXPENSES

Other expenses 15 480,744 176,725

TOTAL EXPENSES (II) 480,744 176,725

III PROFIT BEFORE TAX (I - II) 12,995,052 14,744,387

IV TAX EXPENSE

Current tax 3,270,000 3,600,000

Short / (excess) provision in earlier years - (729)

TOTAL TAX EXPENSE (IV) 3,270,000 3,599,271

V PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS (III - IV) 9,725,052 11,145,116

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

Basic (`) 18 194.50 222.90

Diluted (`) 194.50 222.90




Notes

For the year ended March 31, 2018

For the year ended March 31, 2017

` `

(A) CASH FLOW FROM OPERATING ACTIVITIES


Adjustments for :

Profit on sale of current investments 13 (3,352,766) (4,810,095)

Interest income 13 (1,073,030) (1,249,373)



Adjustment for (increase) / decrease in operating assets

Long term loans and advances - 3,009

Short term loans and advances (17,018) 6,833

Adjustment for increase / (decrease) in operating liabilities

Trade payables 275,674 (13,409)

Other current liabilities 12,630 (9,491)

8,840,542 8,671,862

Direct taxes paid (3,271,493) (3,766,170)

NET CASH FLOW FROM OPERATING ACTIVITIES (A) 5,569,049 4,905,692

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Current investments (50,330,000) -

Sale of Current investments 20,764,917 20,612,919

Interest received 1,958,865 166,261

NET CASH USED IN INVESTING ACTIVITIES (B) (27,606,218) 20,779,180

(C) CASH FLOW FROM FINANCING ACTIVITIES

NET CASH FROM FINANCING ACTIVITIES (C) - -

Net increase in cash and cash equivalents (A+B+C) (22,037,169) 25,684,872

Cash and cash equivalents as at the beginning of the year 10 26,081,234 396,362

Cash and cash equivalents as at the end of the year 10 4,044,065 26,081,234


This is Cash Flow Statement referred to in our report of even date.









01 BACKGROUND

IDFC Trustee Company Limited is a wholly owned subsidiary of IDFC Financial Holding Company Limited (“ultimate holding - IDFC

Limited”). This company is formed for providing trusteeship services.


(A) BASIS OF PREPARATION

The financial statements have been prepared in accordance with the generally accepted accounting principles in India under

the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of

the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central

Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting

Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been

prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act,

1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

(B) USE OF ESTIMATES


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:

¡ Trusteeship fees are accounted for on an accrual basis in accordance with the agreements.

¡ Profit / loss earned on sale of investments is recognised on trade date basis. Profit / loss on sale of investments is

determined based on the weighted average cost of 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) SERVICE TAX / GST INPUT CREDIT

Service tax / GST 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.

(K) 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



AUTHORISED SHARES

Equity shares of `10 each 100,000 1,000,000 100,000 1,000,000


Equity shares of `10 each 50,000 500,000 50,000 500,000

[All of these shares are held by IDFC Financial Holding Company Limited, the holding company and its nominees]

TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 500,000 500,000






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


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


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

entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders

at the ensuing Annual General Meeting, except in case of interim dividend.

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

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

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

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



IDFC Financial Holding Company Limited and its nominees 50,000 100.00% 50,000 100.00%



(`) (`)

(a) Surplus in the Statement of Profit and Loss

Opening balance 49,523,222 38,378,106


Closing balance 59,248,274 49,523,222

05 TRADE PAYABLES


(`) (`)


Total Outstanding dues of creditors other than micro enterprises and small enterprises 320,674 45,000

TOTAL 320,674 45,000

There were no dues payable to micro and small enterprises as defined under The Micro, Small and Medium Enterprise Development Act, 2006 during the year. The information regarding micro, small and medium enterprise have been determined to the extenet such parties have been identified on the basis of information available with the Company.



(`) (`)

Statutory dues payable 17,630 5,000

TOTAL 17,630 5,000



(`) (`)

Provision for income tax 20,930 -

[Net of advance tax of ` 5,816,070 (Previous year ` Nil)]

TOTAL 20,930 -



08 LONG TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Advance payment of income tax [Net of provision for tax ` 8,062,484 (Previous year ` 12,621,451)] 112,496 90,063

TOTAL 112,496 90,063

09 CURRENT INVESTMENTS (AT LOWER OF COST AND MARKET VALUE, UNLESS STATED OTHERWISE)

FACE VALUE (`)


NUMBER OF UNITS

(`) NUMBER OF UNITS

(`)

Current Investment in mutual funds (unquoted)

IDFC Cash Fund - Direct Plan - Growth 1000 9,137.121 19,230,000 7,634.462 12,812,158

IDFC Ultra Short Term Fund Direct Plan - Growth 10 1,725,364.109 36,500,000 616,488.604 10,000,000

TOTAL 55,730,000 22,812,158

Aggregate amount of investments in unquoted mutual funds

Cost 55,730,000 22,812,158

Market value 61,877,950 29,357,036

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



(`) (`)

CASH AND CASH EQUIVALENTS

Balance with bank:

In current accounts 244,065 181,234

In deposit account 3,800,000 25,900,000

TOTAL 4,044,065 26,081,234

11 SHORT-TERM LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Balances with government authorities - Cenvat credit available 23,673 6,655

TOTAL 23,673 6,655

12 OTHER CURRENT ASSETS


(`) (`)

Interest accrued on deposits 197,274 1,083,112

TOTAL 197,274 1,083,112






(`) (`)

Trusteeship fees 9,050,000 8,861,644

TOTAL 9,050,000 8,861,644

14 OTHER INCOME



(`) (`)

Interest on deposits 1,073,030 1,249,373


TOTAL 4,425,796 6,059,468

15 OTHER EXPENSES



(`) (`)

Rates and taxes 337 7,402

Professional fees 352,862 47,402

Auditors' remuneration [see note (a)] 126,353 120,595


TOTAL 480,744 176,725




(`) (`)

Audit fee 50,000 50,000


Out of Pocket expense 353 595

TOTAL 126,353 120,595

16 The Company is engaged in the business of providing trusteeship services in India. As such, there is no separate reportable primary business segment or geographical segment as per Accounting Standard 17 on ‘Segment Reporting’.



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

RELATIONSHIP:

HOLDING COMPANY:


ULTIMATE HOLDING COMPANY

IDFC Limited

FELLOW SUBSIDIARY




IDFC Bank Limited







IDFC Bharat Limited

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

Name of related party & mature of relationship

PARTICULARS TRANSACTION MARCH 31, 2018 MARCH 31, 2017

(`) (`)

Fellow Subsidiary

IDFC Bank Limited Balance in Current Account 236,882 173,821

IDFC Bank Limited Balance in Deposit Accounts 3,800,000 25,900,000

IDFC Bank Limited Interest on deposits 1,073,030 1,249,373

IDFC Bank Limited Interest accrued but not due 197,274 1,083,112




Profit for the year (`) 9,725,052 11,145,116

Weighted average number of equity shares (Nos.) 50,000 50,000

Basic & Diluted Earnings Per Share (`) 194.50 222.90

Nominal Value Per Share (`) 10 10



19 DISCLOSURES RELATING TO SPECIFIED BANK NOTES (‘’SBN’’)(a) The disclosures relating to Specified Bank Notes (‘’SBN’’) is not applicable to the Company during the year.



20 PREVIOUS YEAR FIGURES

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


Mumbai, April 27, 2018Mahendra N. ShahDirector


IDFC SECURITIES LIMITED

U99999MH1993PLC071865


Mr. T S Bhattacharya

Mr. Ajay Sondhi

Dr. Rajeev Uberoi

Mr. Vikram Limaye


Price Waterhouse & Co,

Chartered Accountants LLP,

IDFC Bank Limited

Naman Chambers



Mumbai 400 051

Tel. +91 22 6622 2600

Fax + 91 22 6622 2501



CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C S E C U R I T I E S L I M I T E D | 2 0 5

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Twenty fifth Annual Report, together with the audited financial statements for the financial year ended March 31, 2018.

OPERATIONAL REVIEW AND FUTURE OUTLOOK

IDFC Securities Limited is engaged in the business of Institutional Broking, Research and Investment Banking.

Even though FY18 was challenging, Indian capital markets witnessed steady gains in Volume - 23% in cash and 35% in derivatives segment. So while events such as Market in Financial Instrument Directive (“MIFID”) created phases of consolidation, it has resulted in sharp cut in brokerage, coupled with reduction in number of brokers. All broking houses had to reduce their commission, in order to increase the volume and gain share of revenue. Commission market share is different from volume market share, given the cyclicality of ETFs and arbitrage book sizes and Direct Market Access (“DMA”) trades. FIIs net inflow decreased to ~US$3.44bn (~down by 59%) during the year, contrary to the huge inflow of US$17.86bn from DIIs (Up by ~294%).

Inspite of such testing market conditions, IDFC Securities delivered stellar performance during the year – Derivatives volumes increased ~57% and Investment banking revenue increased ~453% yoy in FY18. Furthermore, their efforts across the research, sales and dealing desks were well recognized by clients and backed by strong accolades from leading surveys such as AsiaMoney and Institutional Investor.

FY19 will be a challenging year as well, as it will have the full impact of MIFID and uncertainty in H2’2019 due to the upcoming General Elections. Service quality and increasing breadth of coverage is the need of the hour to remain relevant in the market.


(AMOUNT IN `)



From continuing operations

Total Income 1,048,751,787 754,073,563


Profit before Tax 371,094,377 166,280,673


Profit / (Loss) after Tax 233,594,377 111,897,569

From discontinuing operations

Profit after Tax discontinuing operations - -




DIVIDEND

The Directors recommend a dividend of ` 15 (i.e. 150%) per equity share on face value of ` 10 for the financial year ended March 31, 2018.

BOARD OF DIRECTORS

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

BOARD MEETINGS

The Board of Directors of the Company meet at least once a quarter to review the quarterly results and to decide on business policy and strategy apart from other board business. During the year, the Board met five (5) times on April 24, 2017, July 24, 2017, October 26, 2017, January 18, 2018 and March 22, 2018 and the intervening period between two Board meetings was well within the maximum gap of 120 days as prescribed under the Companies Act, 2013. The attendance of the Board Meetings held during FY18 is given in the Table 1.


The Board Committees play a crucial role in the governance structure of the Company and help to delegate particular matters that require greater and more focused attention. The Chairman of the respective Committee informs the Board about the summary of the discussions


BOARD'S REPORT

held in the Committee Meetings. The minutes of the meetings of all Committees are placed before the Board for review. Majority of

the members of all the Committees consist of IDs. The Board Committees also request special invitees to join the meeting, wherever

appropriate. The Company Secretary officiates as the Secretary to all the Committees.

The Board has currently established the following Committees.

i) Audit Committee ii) Nomination & Remuneration Committee iii) Corporate Social Responsibility Committee

Attendance of Directors at Board and Committee Meeting(s)

Table 1 shows attendance of Directors at the Board Meetings and Committee meeting(s) held for the year ended March 31, 2018. Attendance

is presented as number of meeting(s) attended, (including meetings attended through electronic mode) out of the number of meeting(s)

required to be attended.

Table 1

NAME OF THE DIRECTOR DIN CATEGORY BOARD MEETING

AUDIT COMMITTEE

MEETING

NOMINATION & REMUNERATION

COMMITTEE


COMMITTEE

Mr. Sunil Kakar 03055561 Chairman *C 5/5 4/4 3/3 -

Mr. T S Bhattacharya 00157305 ID 5/5 C 4/4 **C 3/3 1/1

Mr. Ajay Sondhi 01657614 ID 5/5 4/4 3/3 -

Dr. Rajeev Uberoi 01731829 Director 3/5 - - 1/1

Mr. Vikram Limaye*** 00488534 Director 1/1 - 1/1 C 1/1

Figures marked with “C” represent Chairman of the Board/Committee

* Appointed as Chairman w.e.f. July 16, 2017

** Appointed as Chairman of NRC w.e.f. July 24, 2017

*** Tendered his resignation w.e.f. July 15, 2017

AUDIT COMMITTEE

The Audit Committee comprises of three Members, majority being IDs. The Committee is headed by Mr. T S Bhattacharya and has Mr.

Ajay Sondhi and Mr. Sunil Kakar as its members. During the year, the Audit Committee met four (4) times on April 24, 2017, July 24, 2017,

October 26, 2017, January 18, 2018. The gap between any two consecutive meetings was within the period prescribed under the Companies

Act, 2013. The Committee meets, inter alia, to review the accounts of the Company, transactions with related party and to discuss the audit

findings and recommendations of the internal and statutory auditors. The composition and attendance details of the Audit Committee

Meetings held during FY18 is given in Table 1.

NOMINATION AND REMUNERATION COMMITTEE (NRC)

The NRC comprises of three Members. The Committee is headed by Mr. T S Bhattacharya and has Mr. Ajay Sondhi and Mr. Sunil Kakar as its

members. The NRC meets, inter alia, to fill up vacancies in the Board, evaluate the performance of the Board and its individual Members.

The NRC recommends to the Board from time to time the framework relating to the remuneration for the Directors, Key Managerial

Personnel, Senior Managerial Personnel and other employees. The Company has put in place Board approved remuneration policy for the

Directors, Key Managerial Personnel, Senior Management Personnel and other Employees which is formulated in line with the requirements

of Companies Act, 2013.

During the year, three meetings of NRC was held on April 24, 2017, January 18, 2018 and March 22, 2018. The composition and attendance

details of the NRC Meetings held during FY18 is given in Table 1.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR)

The CSR Committee comprises of three Members, Mr. Sunil Kakar being the Chairman and Mr. T S Bhattacharya and Dr. Rajeev Uberoi

as members of the Committee. The Company’s primary focus areas for CSR activities are Education, Health Care, Skill development

and sustainable livelihoods, Rural Development, Support employee engagement in CSR activities, Capacity building for corporate

social responsibility and other areas. The Company continued to partner with IDFC Foundation (a Section 8 company which is a wholly

owned subsidiary of IDFC Limited) for Inclusive Growth to support the cause of sustainable livelihood and skill development, elementary

education, primary health to achieve the CSR objectives. During the year, one (1) CSR meeting was convened and held on April 24, 2017.

The composition and attendance details of the CSR Meetings held during FY18 is given in Table 1.

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

annexed herewith as Annexure III.


The IDs of the Company met on April 24, 2017 without the presence of the non-independent Directors and senior management team of the

Company. Both the IDs attended the said meeting. The IDs discussed matters as required under the relevant provisions of the Companies

Act, 2013.


BOARD'S REPORT



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.

During the year Mr. Vikram Limaye resigned as a Director of the Company w.e.f. July 15, 2017. The Board places on record its sincere

appreciation for the valuable contribution and services rendered by him during his tenure with the Company.

The Shareholders of the Company at 23rd AGM held on September 9, 2016 reappointed Mr. T S Bhattacharya for his 2nd term as an ID till

the conclusion of the 25th AGM (ensuing AGM). Pursuant to provisions of Companies Act, 2013 read with the Rules made thereunder,

Mr. T S Bhattacharya shall complete his 2nd term at the conclusion of ensuing AGM and will cease to be an ID of the Company.

The Board places on record its sincere appreciation for his long association and valuable contribution to the Company.

The Key Managerial Personnel (“KMP”) pursuant to Section 203 of the Companies Act, 2013 are as follows:

1. Mr. Anish Damania - Chief Executive Officer

2. Mr. Hitesh Desai - Chief Financial Officer

3. Mr. Vinayak Vishwanathan - Company Secretary*

* Ms Priyanka Agrawal resigned as Company Secretary w.e.f. May 11, 2018 and Mr. Vinayak Vishwanathan was appointed as Company

Secretary in the capacity of KMP w.e.f. May 12, 2018.


As per the provisions of the Companies Act, 2013, IDs are not liable to retire by rotation and the terms of appointment of IDs is governed

by the provisions of Companies Act, 2013. The Company has received a declaration from IDs, at the time of their respective appointments

and also at the first meeting of the Board of Directors held in the financial year, that they meet the criteria of independence specified under

sub-section (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules,

2014 and that they shall abide by the “Code for Independent Directors” as per Schedule IV of the Act.

BOARD EVALUATION

The Company with the approval of its Nomination & Remuneration Committee has put in place an evaluation framework for evaluation

of the Board, Directors and Chairman. The Board also carries out an evaluation of the working of its Audit Committee, Nomination &

Remuneration Committee and Corporate Social Responsibility Committee. The evaluation of the Committees is based on the assessment

of the compliance with the terms of reference of the Committees. The evaluations for the Directors and the Board were done through

circulation of questionnaires. These questionnaires were modified in order to incorporate the recommendations of the guidance note

issued by the Securities & Exchange Board on India on January 5, 2017 on the evaluation of the Board. The evaluation for FY2018 was

carried out by circulation of three questionnaires, one for the Chairman, second for the Directors other than the Chairman and third for the

Board which assessed 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. The evaluation criteria for

the Chairman and Directors was based on their participation, contribution and offering guidance to and understanding of the areas which

are relevant to them in their capacity as members of the Board.

REMUNERATION POLICY

The Board has a Remuneration policy in place, for the Directors, Key Managerial Personnel, Senior Management Personnel and other

Employees which is formulated in line with the requirements of Companies Act, 2013. The said Remuneration Policy is available on the

website of the Company. The Nomination & Remuneration Committee has oversight over compensation. The Nomination & Remuneration

Committee defines Key Performance Indicators (KPIs) for Senior Employees and the organisational performance norms for bonus based

on the financial and strategic plan approved by the Board. The KPIs include both quantitative and qualitative aspects. The Nomination &

Remuneration Committee assesses organisational performance as well as the individual performance for senior management. Based on its

assessment, it makes recommendations to the Board regarding compensation for senior management.

STATUTORY AUDITORS

At the AGM of the Company held on August 2, 2017, the shareholders had approved the appointment of Price Waterhouse & Co, Chartered

Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company, in place of Deloitte Haskins & Sells, LLP,

Chartered Accountants, for a period of five years from the conclusion of the 24th AGM of the Company held for FY17 subject to ratification

of shareholders annually. There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in

their report on the Financial Statements for FY18.

The Board recommends the ratification of the appointment of PWC as the Statutory Auditors of the Company for a period of one year ie.

for FY 2018-19.


BOARD'S REPORT


Pursuant to the Secretarial Standards-I issued by the Institute of Company Secretaries of India pertaining to Board of Directors, the

Company confirms that all applicable standards have been duly complied with during the period under review.


As per Section 177, read with Section 188 of the Act and the Rules made thereunder, the Audit Committee approves the related party

transactions of the Company on a quarterly basis. Related party transactions entered during the year under review were in the ordinary

course of business and on an arm’s length basis, thus not requiring Board/Shareholders’ approval. A Board approved “Policy on Related

Party Transactions” is uploaded on the website of the Company. Since all related party transactions entered into by the Company were

in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company. As per Accounting

Standard (AS) 18 on ‘Related Party Disclosures’, the details of related party transactions entered into by the Company are included in

the Notes to Accounts.

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. as

at the end of the Financial Year. The Company does not have any Joint Venture and Associate Company. A statement containing salient

features of the financial statements and all other requisite details of all the subsidiary companies in the format AOC-I is appended as

Annexure I.


The Company had 82 employees as on March 31, 2018.

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

Managerial Personnel) Rules, 2014 (to the extent applicable) a statement showing the names and other particulars of the employees

drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report. Having regard to the provisions

of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of

the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any

Member interested in obtaining such information may write to the Company and the same will be furnished on request.

PUBLIC DEPOSITS



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

Act, 2013.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

Pursuant to provisions of Section 177(9) of the Companies Act, 2013, read with the Companies (Meetings of Board and its Powers)

Rules, 2014, the Board approved and adopted “Whistle Blower Policy”, which had already been adopted by IDFC Limited, the ultimate

holding Company so as to establish vigil mechanism, including reporting to the Management instances of unethical behaviour, actual or

suspected fraud or violation of the Company’s Code of Conduct or Ethics Policy. The Group General Counsel & Head - Legal & Compliance

was appointed as the Whistle Officer for the purpose of this Policy. The Audit Committee directly oversees the Vigil Mechanism.

The details of Whistle Blower Policy/Vigil mechanism are posted on the website of the Company.


The particulars regarding foreign exchange expenditure and earnings are furnished in Note no. 26 in the Notes forming part of the

Financial Statements.


Since the Company does not own any manufacturing facility, the disclosure of information on matters required to be disclosed in



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.


BOARD'S REPORT


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, 2018 till the date of this report.




There are no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the going concern

status of the Company and its future operations.


The Company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to

create awareness on this policy. No instances of Sexual Harassment were reported during the period under review.






reasonable and prudent so as to give a true and fair view of the state of affairs of the company at March 31, 2018 and profit of the

company for that period;







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

ACKNOWLEDGMENTS

The Directors thank Securities and Exchange Board of India, National Stock Exchange of India Limited, Bombay Stock Exchange Limited,

National Securities Depository Limited, Central Depository Services (India) Limited and other statutory authorities and its bankers for

their continued support to the Company.

The Directors express their gratitude for the support and guidance received from IDFC / IDFC Financial Holding Company Limited

and other group companies and also express their warm appreciation to all the employees of the Company for their commendable

teamwork, professionalism and contribution during the year.

The Directors extend their sincere thanks to the clients of the Company for their support.

FOR AND ON BEHALF OF DIRECTORS

Sunil Kakar

Chairman

Mumbai, May 31, 2018






1 CIN Foreign Company Foreign Company

2 Name of the subsidiary IDFC Securities Singapore Pte. Ltd IDFC Capital (USA) Inc.

3 Date since when subsidiary was acquired January 2013 August 2009

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

April 1, 2017 to March 31, 2018 April 1, 2017 to March 31, 2018

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

USD : INR Conversion rate: 65.0441

USD : INR Conversion rate: 65.0441

6 Share capital 149,125,695 46,240,000

7 Reserves & surplus (121,713,981) 16,558,805

8 Total assets 31,607,644 63,584,891

9 Total Liabilities 31,607,644 63,584,891

10 Investments - -

11 Turnover 33,260,930 34,647,079

12 Profit / (Loss) before taxation (6,743,730) 2,265,494

13 Provision for taxation - (1,223,756)

14 Profit/(Loss) after taxation (6,743,730) 1,041,738

15 Proposed Dividend - -

16 Extend of shareholding in % 100% 100%

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





i) CIN U99999MH1993PLC071865


iii) Name of the Company IDFC SECURITIES LIMITED


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


vii) Name, Address and Contact details of Registrar and Transfer Agent, if any Link Intime India Pvt. Ltd* C 101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai - 400 083.Contact No. +91 22 4918 6000.



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

Sunil KakarChairman


Mumbai, April 24, 2018Hitesh DesaiChief Financial Officer

Priyanka AgrawalCompany Secretary





SR. NO.



1. Institutional Broking 6612 68

2. Investment Banking 6619 32


SR. NO.


% OF SHARES HELD APPLICABLE SECTION

1 IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 100 Section 2(46)

2. IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3. IDFC Securities Singapore Pte Ltd Foreign Company Subsidiary 100 Section 2(87)

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



CATEGORY OF SHAREHOLDERS

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

YEARDEMAT PHYSICAL TOTAL % OF TOTAL


SHARES

A. PROMOTERS

Indian

a) Bodies Corp. 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL

SUB-TOTAL (A):- 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL

TOTAL SHAREHOLDING OF PROMOTER (A)

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

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

C. SHARES HELD BY CUSTODIAN FOR GDRS & ADRS


GRAND TOTAL (A+B+C) 14,137,200 NIL 14,137,200 100 14,137,200 NIL 14,137,200 100 NIL


SR. NO.




DURING THE YEAR

NO. OF SHARES

% OF TOTAL SHARES OF

THE COMPANY



NO. OF SHARES


COMPANY




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

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



NOT APPLICABLE

v) Shareholding of Directors and Key Managerial Personnel: NIL


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment: ` IN CRORE

SECURED LOANS EXCLUDING

DEPOSITS

UNSECUREDLOANS

INTER CORPORATE

DEPOSITS*

TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year - - - -


Addition - - 5 5

Reduction - - 5 5

Net Change - - - -


I Principal Amount - - - -

II Interest due but not paid - - - -

III Interest accrued but not due - - - -

TOTAL (I+II+III) - - - -

Note : *Interest payable to IDFC Limited, which is the Ultimate holding company towards Inter corporate deposits.




SR. NO.


VIKRAM LIMAYE T. S. BHATTACHARYA AJAY SONDHI SUNIL KAKAR RAJEEV UBEROI


Fee for attending Board & committee meetings

NIL 375,000 350,000 NIL NIL 725,000

TOTAL (1) NIL 375,000 350,000 NIL NIL 725,000

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

TOTAL (B) = (1 + 2) NIL 375,000 350,000 NIL NIL 725,000


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 CFO CS TOTAL

1. Gross salary

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

11,613,888 3,429,754 1,424,706 16,468,348

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 39,600 403,542 978 444,120

(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. Contribution to Provident & Other Funds 1,880,796 643,216 130,296 2,654,308

TOTAL (A) 13,534,284 4,476,512 1,555,980 19,566,776

During FY18, CEO, CFO & CS were paid bonus of ` 1.80 crore, ` 9 lacs & ` 5.5 lacs respectively for FY17.

VIII. PENALTIES/PUNISHMENT/COMPOUNDING OF OFFENCES: NIL






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

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




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others


Mr. Sunil Kakar, Chairman

Mr. T.S. Bhattacharya

Dr. Rajeev Uberoi









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

For IDFC Securities Ltd

Place : Mumbai Sunil Kakar Rajeev UberoiDate : May 31, 2018 Chairman – CSR Committee Director



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

` IN LAC

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

SR. NO



AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS**


UP TO THE REPORTING

PERIOD


IMPLEMENTING AGENCY


6.61

1.22 4.45

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.09 3.41

TOTAL 6.61 4.19 17.10


TOTAL 0.91 0.47 1.05


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

29.86

5.71 11.60


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

PAN India 49.73 52.84

TOTAL 29.86 55.44 64.44


TOTAL 18.51 12.45 35.38

TOTAL DIRECT EXPENSE OF PROJECT & PROGRAMMES (A) 72.55 117.97

OVERHEAD EXPENSE (B) 0.82 4.66

TOTAL (A) + (B) 55.89 73.37 122.63





` IN LAC

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

SR. NO



AMOUNT OUTLAY

(BUDGET)



(2) OVER HEADS**


UP TO THE REPORTING

PERIOD


IMPLEMENTING AGENCY


6.61

1.22 4.45

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*







1.09 3.41

TOTAL 6.61 4.19 17.10


TOTAL 0.91 0.47 1.05


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

29.86

5.71 11.60


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

PAN India 49.73 52.84

TOTAL 29.86 55.44 64.44


TOTAL 18.51 12.45 35.38

TOTAL DIRECT EXPENSE OF PROJECT & PROGRAMMES (A) 72.55 117.97

OVERHEAD EXPENSE (B) 0.82 4.66

TOTAL (A) + (B) 55.89 73.37 122.63





TO THE MEMBERS OF IDFC SECURITIES LIMITED


1. We have audited the accompanying financial statements of IDFC Securities Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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


Other Matter


Our opinion is not modified in respect of this matter.










(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2o18 from being appointed as a director in terms of Section 164 (2) of the Act.



i The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its financial statements – Refer Note 24;

ii. The Company did not have any long-term contracts including derivative contracts as at March 31, 2018

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018

iv. The disclosure requirement as envisaged in Notification G.S.R 308(E) dated 30th March 2017 is not applicable to the Company - Refer Note 30.

For PRICE WATERHOUSE & CO CHARTERED ACCOUNTANTS LLPFirm Registration Number: 304026E/E300009





Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date to the members of IDFC Securities Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC Securities Limited (“the Company”) as of March 31,

2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.












such internal financial controls over financial reporting were operating effectively as at March 31, 2018, 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 ICAI.






Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of IDFC Securities Limited on the financial statements as of and for the year ended March 31, 2018

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

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) The Company does not own any immovable properties. Therefore, the provisions of Clause 3(i)(c) of the said Order are not applicable to the Company.



iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186 of the Act. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. Therefore, the provisions of Clause 3(v) of the said Order are not applicable to the Company.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. Therefore, the provisions of Clause 3(vi) of the said Order are not applicable to the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of Income tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, sales tax, income tax, service tax, duty of customs, duty of excise value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax, duty of customs, duty of excise, value added tax which have not been deposited on account of any dispute. The particulars of dues of income tax and service tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:

NAME OF STATUTE NATURE OF DUES

AMOUNT (`) PERIOD TO WHICH THE AMOUNT RELATES FORUM WHERE DISPUTE IS PENDING

The Income Tax Act, 1961 Income Tax 160,000 AY 1998-1998 Income-tax Appellate Tribunal

The Income Tax Act, 1961 Income Tax 107,396 AY 1999 - 2000 Income-tax Appellate Tribunal

The Income Tax Act, 1961 Income Tax 87,500 AY 2000 - 2001 Income-tax Appellate Tribunal

Service Tax Law Service Tax1,759,473

April 2009 to February 2010 Central Excise and Service Tax Appellate Tribunal


July 2012 to March 2013 Commissioner (Appeals) Service Tax


April 2013 to March 2014 Commissioner (Appeals) Service Tax


April 2014 to March 2015 Commissioner (Appeals) Service Tax

(viii) According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.




xi. The Company has not paid any managerial remuneration. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.



xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.







Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of IDFC Securities Limited on the financial statements for the year ended March 31, 2018



This is the balance sheet referred to in our report of even date.

FOR PRICE WATERHOUSE & CO CHARTERED ACCOUNTANTS LLP(Firm’s Registration No. 304026E/E-30009)


Sharad Vasant PartnerMembeship Number: 101119

Sunil KakarChairman






NOTES ` `



(a) Share capital 3 141,372,000 141,372,000


1,692,187,009 1,458,592,632


(a) Other long-term liabilities 5 - 176,541

- 176,541

Current liabilities


Total outstanding dues of micro enterprises and small enterprises - -


33,064,187 284,904,118



237,983,590 595,735,852

TOTAL 1,930,170,599 2,054,505,025

ASSETS

Non-current assets

(a) Property plant & equipment

Tangible assets 9 68,412,033 26,467,409

Intangible assets 10 6,640,874 4,965,458

75,052,907 31,432,867

(b) Non-current investments 11 68,575,695 195,375,695

(c) Deferred tax assets 12 56,000,000 38,300,000

(d) Long-term loans and advances 13 239,937,104 230,077,172

(e) Other non-current assets 14 14,612,704 40,992,481

454,178,410 536,178,215

Current assets


(b) Trade receivables 16 34,721,560 289,637,545

(c) Cash and bank balances 17 1,086,498,352 904,770,919


(e) Other current assets 14 54,708,599 13,254,611

1,475,992,189 1,518,326,810

TOTAL 1,930,170,599 2,054,505,025

Significant Accounting policies 2

The accompanying notes are integral part of these financial statements.



This is the statement of profit and loss referred to in our report of even date.




Sunil KakarChairman






NOTES ` `

I INCOME


Other income 19 127,903,801 75,923,492

TOTAL INCOME (I) 1,048,751,787 754,073,563

II EXPENSES

Operating expenses 20 58,598,412 48,112,962

Employee benefits expenses 21 315,785,725 318,889,864

Finance costs 22 7,454,529 8,886,375

Depreciation and amortisation expense 9,10 17,876,090 13,072,909

Other expenses 23 151,142,654 153,392,896

Provisions for doubtful debts and recoverable - 45,437,884

Provisions for diminution in value of long term investment other than temporary in nature

126,800,000 -


III PROFIT BEFORE TAX (I-II) 371,094,377 166,280,673

IV TAX EXPENSE

Current tax 155,200,000 69,800,000

Deferred tax 12 (17,700,000) (15,500,000)

Current tax expense relating to prior years - 83,104

TOTAL TAX EXPENSE 137,500,000 54,383,104

V PROFIT FOR THE YEAR (III-IV) 233,594,377 111,897,569

Earnings per equity share (nominal value of share ` 10) 31

Basic (`) 16.52 7.92

Diluted (`) 16.52 7.92

Significant Accounting policies 2

The accompanying notes are integral part of these financial statements.





` `

CASH FLOW FROM OPERATING ACTIVITIES

Profit before taxation 371,094,377 166,280,673

Adjustments for


Provisions 126,800,000 45,437,884

Interest on bank deposits (34,507,844) (33,048,863)

Finance costs 7,454,529 8,886,375

Dividend income (2,089,019) (1,073,581)

Profit on sale of tangible assets (net) (341,342) (175,789)

Profit on sale of short term investments (net) (43,008,500) (38,296,401)

Doubtful debt recovery (Reversal of Provisions) (46,866,587) -

25,317,327 (5,197,466)



(Increase) / Decrease in trade receivables 300,815,985 (121,300,869)

(Increase) / Decrease in short-term loans and advances 197,877,576 (291,654,508)

(Increase) / Decrease in long-term loans and advances (9,859,940) (15,673,342)

(Increase) / Decrease in other current assets (41,556,398) 30,009,987

(Increase) / Decrease in Other long term liabilities (176,541) -

(Increase) / Decrease in trade payables (251,839,931) 123,391,227

(Increase) / Decrease in other current liabilities (116,835,226) 118,421,351

78,425,525 (156,806,154)

Cash generated from operations 474,837,229 4,277,053

Taxes paid (net of refunds) (144,277,086) (64,091,427)

NET CASH USED IN OPERATING ACTIVITIES (A) 330,560,143 (59,814,374)





` `

CASH FLOW FROM INVESTING ACTIVITIES

Proceeds from sale of tangible assets 2,167,606 1,758,599

Bank balances not considered as cash and cash equivalents

- Placed (680,204,190) (511,559,677)

- Matured 618,575,146 374,644,768

Purchase of tangible & intangible assets (63,322,394) (21,607,524)

Purchase of investments - others (6,644,874,680) (4,769,119,887)

Proceeds from sale of current investments 6,500,605,660 5,351,891,306

Interest received on bank deposits 35,421,279 34,245,038

Dividend received on long term and current investments 2,089,019 1,073,581

NET CASH FROM INVESTING ACTIVITIES (B) (229,542,554) 461,326,204

CASH FLOW FROM FINANCING ACTIVITIES

Finance costs paid (7,454,529) (8,886,375)

Inter Corporate Deposits taken 50,000,000 8,700,000,000

Inter Corporate Deposits repaid (50,000,000) (8,700,000,000)

Dividends paid - -

Dividend distribution tax - -

NET CASH USED IN FINANCING ACTIVITIES (C) (7,454,529) (8,886,375)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C) 93,563,060 392,625,455

Cash and cash equivalents at the beginning of year (Refer to note 17) 429,837,514 37,212,059

Cash and cash equivalents at the end of year (Refer to note 17) 523,400,574 429,837,514

93,563,060 392,625,455

Reconciliation of Cash and cash equivalents with the Balance Sheet

Cash and cash equivalents as per Balance Sheet (Refer to note 17) 1,086,498,352 904,770,919

Less: Bank balances not considered as Cash and cash equivalents as defined in AS-3 - "Cash Flow Statements" (Refer to note 17)

563,097,778 474,933,405

CASH AND CASH EQUIVALENTS AS RESTATED AS AT THE YEAR END 523,400,574 429,837,514

This is the cash flow statement referred to in our report of even date.




Sunil KakarChairman






01 BACKGROUND

IDFC Securities Limited (‘the Company’) is a wholly owned subsidiary of IDFC Financial Holding Company Limited, (the ‘Holding

Company’) incorporated in India and regulated by the Securities and Exchange Board of India (SEBI) as a stock broking company.

The Company is engaged in the business of share and stock broking for both cash segment and Derivatives segment and is a

member of the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The activities of

the Company include providing equity research and stock broking services to Foreign Institutional Investors (FIIs) and Domestic

Institutional Investors (DIIs).

The Company is also registered with the Securities and Exchange Board of India (SEBI) as category – I, Merchant Banker, engaged

in providing Investment Banking services like Advisory services, IPO Underwriting, Qualified Institutional Placement (QIP), fund

raising and Debt Syndication.


A BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared in accordance with the generally accepted accounting principles in India

under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued

amounts. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules,

2014, till the standards of counting or any addendum thereto are prescribed by Central Government in consultation and

recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the

Companies Act, 1956 shall continue to apply.

Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards

notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and

other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria

set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of products and the time between

the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its

operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities.

B USE OF ESTIMATES

The Company adopts accrual concept in the preparation of the accounts. The preparation of financial statements in

conformity with Indian GAAP requires the management to make estimates and assumptions considered in the reported

amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported

income and expenses during the reporting period. The management believes that the estimates used in preparation of the

financial statements are prudent and reasonable. Future results could differ due to these estimates and any revisions or the

difference between the actual results and the estimates are prospectively recognised in the future periods.

C REVENUE RECOGNITION

(a) Income from brokerage activities is recognised on trade-date basis and is net of statutory payments/taxes.

(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 GST / ST.

(c) Interest income is recognised on time proportionate basis taking into account the amount outstanding and the rate

applicable.

(d) Profit/loss on sale of investment is recognised on trade date and represents the execss/deficit over the carrying value of

the respective investments.

(e) Dividend is recognised when the right to receive is established as at the Balance Sheet date.

D TANGIBLE ASSETS AND INTANGIBLE ASSETS

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

net of accumulated depreciation and impairment losses, if any. Intangible assets comprising of system software are stated

at cost of acquisition, including any cost attributable for bringing the asset to its working condition, net of accumulated

amortisation and impairment losses, if any. Any technology support cost or annual maintenance cost for such software is

charged annually to the Statement of Profit and Loss. Consideration paid for transfer of tenancy rights is capitalised as an

intangible asset.

The Company has regular programme of evaluating useful life of its assets.



E DEPRECIATION AND AMORTISATION

Tangible assets

Depreciation on tangible 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. Lease hold improvements are shown at historical cost less accomulated depreciation.

Useful life of assets Computers for 3 years

Servers and networks for 6 years

Furniture for 10 years

Office Equipment for 5 years

Vehicle for 4 years

Mobile for 2 years

Leasehold improvements over the lease term or 5 years whichever is earlier.

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

Intangible assets

Intangible assets are amortised over a period of three years on a straight-line method. Tenancy rights are amortised over a

period of 10 years by using straight-line method.

F IMPAIRMENT OF ASSETS

The carrying amount of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment

based on internal / external factors exists, the recoverable amount of such assets is estimated and impairment is recognised

wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the net

selling price and its value in use, which is arrived at by discounting the future cash flows to their present value, based on an

appropriate discounting factor. If at the Balance Sheet date, there is a indication that previously recognised impairment loss

no longer exists or may have decreased, the recoverable amount is reassessed and the asset is reflected at the recoverable

amount, subject to a maximum of the depreciable historical cost and reversal of such impairment loss is recognised in the

Statement of Profit and Loss, except in case of revalued assets.

G INVESTMENTS

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

investments are made are classified as current investments in accordance with Accounting Standards specified under Section

133 of the Companies Act, 2013. All other investments are classified as long-term investments.

All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable

acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying

amount and the net disposal proceeds is charged or credited to the Statement of Profit and Loss.

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

individual basis. Current Investments are carried at the lower of cost or fair value on an individual basis.

H CASH AND CASH EQUIVALENTS (FOR PURPOSES OF CASH FLOW STATEMENT)

Cash and cash equivalents for the purpose of the Cash Flow Statement comprise cash on hand, cash in bank, fixed deposits

and other short-term highly liquid investments with an original maturity of three months or less that are readily convertible

into a known amount of cash and which are subject to an insignificant risk of change in value.

I CASH FLOW STATEMENT

Cash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of

the Company are segregated and profit before tax is adjusted for the effects of transactions of non-cash nature and any

deferrals or accruals of past or future cash receipts or payments.

J MISDEAL STOCK

Misdeal stock comprises of stock that has devolved on the Company due to erroneous execution of trades on behalf of the

institutional clients in the normal course of business. These securities are valued at lower of cost or market value/ realisable

value on an individual basis. Any valuation loss based on the above is debited to the Statement of Profit and Loss.



K EMPLOYEE BENEFITS

DEFINED CONTRIBUTION PLANS

Provident fund

The Company’s contribution to provident fund is defined contribution plan and is charged to the Statement of Profit and

Loss as they fall due based on the amount of contribution required to be made as and when services are rendered by the

employees.

Superannuation

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.


Gratuity

The net present value of the Company’s obligation towards gratuity to employees is funded and actuarially determined as at

the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement

of Profit and Loss for the period in which they occur.

Other benefits

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

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

L SEGMENT REPORTING

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the

Company. Further, inter-segment revenue is accounted for based on the transaction price agreed to between segments which

is primarily market based. Revenue and expenses is identified to segments on the basis of their relationship to the operating

activities of the segment. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments

on a reasonable basis, are included under “Unallocated corporate expenses/income”

M CURRENT AND DEFERRED TAX

The accounting treatment for income-tax in respect of the Company’s income is based on the Accounting Standard 22 on

‘Accounting for Taxes on Income’ as specified u/s 133 of the Companies Act, 2013. The provision made for income-tax in the

accounts comprises both the current tax and the deferred tax. The deferred tax assets and liabilities for the year arising on

account of timing differences are recognised in the Statement of Profit and Loss and the cumulative effect thereof is reflected

in the Balance Sheet. Current tax is the amount of tax payable on the taxable income for the year as determined in the

accordance with applicable tax rates and the provisions of the Income-tax Act, 1961.

Deferred tax is recognised for all the timing differences, subject to the consideration of prudence in respect of deferred

tax assets. Deferred tax assets are recognised and carried forward only to the extent that there is a reasonable certainty

that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax

assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the

Balance Sheet date. In situations, where the Company has unabsorbed depreciation or carry forward losses under tax laws,

all deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence

that they can be realised against future taxable profits. At each Balance Sheet date, the Company re-assesses unrecognised

deferred tax assets, if any.

N EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the profit or loss after tax by the weighted average number of equity shares

outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted

for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares

considered for deriving basic earnings per share and the weighted average number of equity shares which could have been

issued on the conversion of all dilutive potential equity shares.

O PROVISIONS AND CONTINGENT LIABILITIES

Provisions: Provisions are recognised when there is a present obligation as a result of a past event, it is probable that an

outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of

the amount of the obligation.Provisions are measured at the best estimate of the expenditure required to settle the present

obligation at the Balance sheet date and are not discounted to its present value.



Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the

existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not

wholly within the control of the company or a present obligation that arises from past events where it is either not probable

that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

P 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.

Q 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.

R SERVICE TAX / GST INPUT CREDIT

Service tax / GST 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.

S LEASES

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as

operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line

basis over the period of the lease.



03 SHARE CAPITAL


NUMBER ` NUMBER `

Authorised


Issued, subscribed and fully paid up shares


(All the above equity shares are held by IDFC Financial Holding Company Limited, the Holding Company and its nominees (Previous year 100%), IDFC Limited is the Holding Company of IDFC Financial Holding Company Limited, which is the ultimate Holding Company of the Company)

TOTAL 141,372,000 141,372,000

a Reconciliation of number of shares.


NUMBER ` NUMBER `

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


BALANCE AT THE END OF THE YEAR 14,137,200 141,372,000 14,137,200 141,372,000

b Rights, Preferences and restrictions attached to 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




The Board of Directors, in the meeting held on April 24, 2018 have proposed dividend of ` 15 per equity share amounting to ` 25.57crore, inclusive of corporate dividend tax. The proposal is subject to the approval of shareholders at the Annual General

Meeting.

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

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


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



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




` `

(a) Capital reserve 38,147,550 38,147,550

(b) General reserve 355,628,577 355,628,577

(c) Securities premium account 142,578,000 142,578,000

(d) Surplus in the Statement of Profit and Loss

Opening balance 780,866,505 668,968,936

Add: Profit for the year 233,594,377 111,897,569

Balance as at the end of the year 1,014,460,882 780,866,505

TOTAL 1,550,815,009 1,317,220,632



05 LONG-TERM LIABILITIES



` `

Others* - 176,541

TOTAL - 176,541

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

06 TRADE PAYABLES



` `

Total outstanding dues of micro enterprises and small enterprises (Refer to note 32) - -


- Acceptances 13,710,369 258,825,041

- Others 19,353,818 26,079,077

TOTAL 33,064,187 284,904,118




` `

Employee benefit Payable (Refer to note 25) 116,451,018 134,067,387

Statutory dues (including tax deducted at source, GST, stamp duty, security transaction tax, profession tax and contribution to provident fund)

31,580,935 130,799,792

TOTAL 148,031,953 264,867,179






` `

Provision for income tax 56,872,450 45,949,555

[net of advance tax ` 308,725,160 (Previous year ` 164,447,735)]

Provision for fringe benefit tax 15,000 15,000

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

TOTAL 56,887,450 45,964,555

GROSS BLOCK DEPRECIATION AND AMORTISATION NET BLOCK

BA

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` ` ` ` ` ` ` ` ` `

09 TANGIBLE ASSETS

Furniture and fixtures 437,369 3,205,390 - 3,642,759 403,250 68,809 - 472,059 3,170,700 34,119

(Previous year) (437,369) (-) (-) (437,369) (363,943) (39,307) (-) (403,250) (34,119) (73,426)

Office equipment 5,404,943 4,498,452 72,996 9,830,399 4,667,689 894,073 46,750 5,515,012 4,315,387 737,254

(Previous year) (4,728,876) (676,067) (-) (5,404,943) (3,870,340) (797,349) (-) (4,667,689) (737,254) (858,536)

Computers 24,739,093 11,525,675 58,572 36,206,196 16,683,763 4,644,749 38,513 21,289,999 14,916,197 8,055,330

(Previous year) (18,068,914) (6,670,179) (-) (24,739,093) (13,074,141) (3,609,622) (-) (16,683,763) (8,055,330) (4,994,773)

Vehicles 29,143,020 7,309,246 4,438,007 32,014,259 11,502,314 7,971,630 2,658,048 16,815,896 15,198,363 17,640,706

(Previous year) (21,935,561) (10,056,097) (2,848,638) (29,143,020) (6,437,156) (6,330,986) (1,265,828) (11,502,314) (17,640,706) (15,498,405)

Leasehold improvement - 32,503,341 - 32,503,341 - 1,691,955 - 1,691,955 30,811,386 -

(Previous year) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

TOTAL 59,724,425 59,042,104 4,569,575 114,196,954 33,257,016 15,271,216 2,743,311 45,784,921 68,412,033 26,467,409

(Previous year) (45,170,720) (17,402,343) (2,848,638) (59,724,425) (23,745,580) (10,777,264) (1,265,828) (33,257,016) (26,467,409) (21,425,140)

10 INTANGIBLE ASSETS (ACQUIRED)

Tenancy rights 1,083,200 - - 1,083,200 877,541 108,320 - 985,861 97,339 205,659

(Previous year) (1,083,200) (-) (-) (1,083,200) (769,221) (108,320) (-) (877,541) (205,659) (313,979)

Computer software 19,875,112 4,280,290 - 24,155,402 15,115,313 2,496,554 - 17,611,867 6,543,535 4,759,799

(Previous year) (15,669,931) (4,205,181) (-) (19,875,112) (12,927,988) (2,187,325) (-) (15,115,313) (4,759,799) (2,741,943)

TOTAL 20,958,312 4,280,290 - 25,238,602 15,992,854 2,604,874 - 18,597,728 6,640,874 4,965,458

(Previous year) (16,753,131) (4,205,181) (-) (20,958,312) (13,697,209) (2,295,645) (-) (15,992,854) (4,965,458) (3,055,922)

TOTAL TANGIBLE AND INTANGIBLE ASSETS

80,682,737 63,322,394 4,569,575 139,435,556 49,249,870 17,876,090 2,743,311 64,382,649 75,052,907 31,432,867

(Previous year) (61,923,851) (21,607,524) (2,848,638) (80,682,737) (37,442,789) (13,072,909) (1,265,828) (49,249,870) (31,432,867) (24,481,062)



11 NON-CURRENT INVESTMENTS


FACE VALUE ` QUANTITY ` QUANTITY `

Trade investments (valued at cost unless stated otherwise)

Unquoted equity shares (fully paid)


IDFC Capital (USA) INC. (Refer to note 28)

USD 0.01 100,000,000 46,240,000 100,000,000 46,240,000

IDFC Securities Singapore Pte Ltd (Refer to note 28)

SGD 1 3,140,001 149,125,695 3,140,001 149,125,695

Less : Provision for diminution in value of investments

(126,800,000) -

68,565,695 195,365,695

Other Investments (Valued at cost unless stated otherwise)

Quoted equity shares (fully paid)

BSE Limited (Fv. P.v ` 5) 2* 65,000 10,000 65,000 10,000

Unquoted equity shares (fully paid)

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

Less : Provision for diminution in value of investments

(15,135,000) (15,135,000)

10,000 10,000

TOTAL 68,575,695 195,375,695

Aggregate amount of quoted investments

10,000 10,000

Market value of quoted investments 49,153,000 63,547,250

Aggregate amount of unquoted investments

210,500,695 210,500,695

Aggregate provison for diminution in value of unquoted investments

(141,935,000) (15,135,000)

12 DEFERRED TAX ASSETS



` `

Tax effects of items constituting deferred tax assets

(a) On difference between book balance and tax balance of fixed assets 4,464,000 4,600,000

(b) Provision for doubtful debts, diminution in value of investments and doubtful expenses recoverable

51,536,000 33,700,000

TOTAL 56,000,000 38,300,000



13 LOANS AND ADVANCES



` ` ` `

Unsecured, considered good

Advance payment of tax 177,964,623 - 177,964,631 -

[net of provision for tax of ` 970,954,201 (Previous year ` 970,954,201)]

Advance payment of fringe benefit tax 4,914,625 - 4,914,625 -

[net of provision for tax of ` 6,625,000 (Previous year ` 6,625,000)]

Security deposits

Deposits with stock exchanges 32,502,200 70,000,000 30,502,200 290,546,946

Other deposits 16,080,920 - 16,080,920 -

Other loan and advances

- Loan and advances to employees - 60,215 - 1,894,550

- Prepaid expenses 8,474,736 9,314,477 614,796 6,536,760

- Advances to suppliers - 3,722,546 - 3,793,349

Balances with government authorities - 23,796,091 - 1,999,300

TOTAL 239,937,104 106,893,329 230,077,172 304,770,905

14 OTHER CURRENT / NON CURRENT ASSETS



` ` ` `

Considered good unless otherwise stated

Bank deposits (Refer note 17) * 13,264,667 - 39,800,000 -

Gratuity receivable (Refer note below) - 162,557 - 154,685

Interest accrued on bank deposits 1,348,037 12,030,937 1,192,481 13,099,926

Fees recoverable (considered good) - 41,800,000 - -

Other recoverable - 715,105 - -

Expenses recoverable (considered doubtful) - 2,926,746 - 3,893,325

Less:- Provisions - (2,926,746) - (3,893,325)

TOTAL 14,612,704 54,708,599 40,992,481 13,254,611

Note : Represents amount paid by the fund but lying in the IDFC Securities Limited Employees Group Gratuity Scheme account.

* Bank deposits amounting to ` 13,264,667 (Previous year ` 39,800,000) are under lien. The Company has created the lien on bank deposits for availing bank guarantee and overdraft facility for meeting margin requirement of exchanges. The bank guarantees are issued by bank in favour of National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for exchange margin in both cash and derivatives segment.

15 CURRENT INVESTMENTS (Valued at lower of cost and fair value, unless stated otherwise)


QUANTITY ` QUANTITY `

Mutual funds (Unquoted)

IDFC Cash Fund - Growth scheme (Direct plan) 91,673.058 193,170,349 2,988.199 5,892,830

TOTAL 193,170,349 5,892,830

a Aggregate amount of unquoted investments

Cost 193,170,349 5,892,830

Market Value 193,449,358 5,903,860

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



16 TRADE RECEIVABLES



` `

Unsecured, considered doubtful

Outstanding for a period exceeding six months from the date they were due for payment 33,033,461 78,933,461

Less: Provision for doubtful trade receivables (33,033,461) (78,933,461)


Others 34,721,560 289,637,545

TOTAL 34,721,560 289,637,545



NON-CURRENT PORTION

CURRENT PORTION NON-CURRENT PORTION

CURRENT PORTION

` ` ` `


Cash on hand - 5,785 - 7,110

Cheques on hand - - - 325,000


- In current accounts (refer note 28) - 523,394,789 - 429,505,404

- 523,400,574 - 429,837,514

Others

Bank balances:

- In deposit accounts [Refer note (a) and (b)] 13,264,667 563,097,778 39,800,000 474,933,405

13,264,667 563,097,778 39,800,000 474,933,405

Amount disclosed under "other assets" (Refer note 14) (13,264,667) - (39,800,000) -

TOTAL - 1,086,498,352 - 904,770,919

a Balances with banks in deposit accounts include deposits amounting to ` 250,814,667 (Previous year ` 250,623,723) which have an original maturity of more than 12 months.

b Balances with banks in deposit accounts include deposits amounting to ` 563,097,778 (Previous year ` 474,933,405) are under lien. The Company has created the lien on bank deposits for availing bank guarantee and overdraft facility for meeting margin requirements of exchanges. The bank guarantees are issued by bank in favour of National Stock Exchange (NSE) and BSE Limited for exchange margin in both cash and derivatives segment.




` `

Brokerage (Refer note 28) 568,814,539 542,317,321

Advisory Fee Income (Refer note 26 and 28) 352,033,447 135,832,750

TOTAL 920,847,986 678,150,071



19 OTHER INCOME



` `

Dividend

Dividend from long-term investments 1,820,000 845,000

Dividend from current investments 269,019 228,581

Interest

Interest on bank deposits 34,507,844 33,048,863

Interest on income-tax refund - 3,257,532

Other Interest 131,267 51,326

Others

Gain on sale of current investments 43,008,500 38,296,401

Profit on sale of fixed assets (net) 341,342 175,789

Miscellaneous income 959,242 20,000

Provision on bad and doubtful debts no longer required written back 46,866,587 -

TOTAL 127,903,801 75,923,492

20 OPERATING EXPENSES



` `

Membership and subscription 50,457,582 44,055,207

Clearing house maintenance charges 474,196 239,764

Depository charges 89,753 359,997

Loss on sale of misdeal stock (net) 4,132,606 4,110,779

Others 4,219,650 874,900

59,373,787 49,640,647

Less: Other recoveries (Refer note 28) 775,375 1,527,685

TOTAL 58,598,412 48,112,962

21 EMPLOYEE BENEFITS EXPENSES



` `

Salaries and Bonus (Refer note 29) 352,134,082 348,460,277

Contribution to Provident and Other Funds (Refer note 25) 21,600,339 25,703,617

Staff Welfare Expenses 4,510,765 3,451,042

378,245,186 377,614,936

Less: Other recoveries (Refer note 28) 62,459,461 58,725,072

TOTAL 315,785,725 318,889,864

22 FINANCE COSTS



` `

Interest on temporary overdraft 2,709,567 849,749

Interest on Inter Corporate Deposit (ICD) (see note 28) 2,515,068 5,457,534

Bank guarantee charges 2,161,400 2,535,394

Bank charges 68,494 43,698

TOTAL 7,454,529 8,886,375



23 OTHER EXPENSES



` `


- Equipment 7,652,359 5,295,828

- Others 783,818 1,959,173

Insurance charges 613,967 702,301

Travelling and conveyance (see note 26) 30,504,510 35,199,927

Printing and stationery 2,450,168 2,014,539

Postage, telephone and fax 10,140,489 8,920,341

Advertising and publicity 20,518,616 24,793,732

Professional fees (see note 26 and 28) 52,223,116 52,607,289

Loss on foreign exchange fluctuation 392,830 709,938

Service tax credit written off 241,465 958,456

Miscellaneous expenses (see note 26) 970,618 1,364,201

Contribution towards coporate social responsibilty (CSR) (see note 28) ** 5,588,800 6,079,935

Directors' sitting fees 725,000 645,000

Auditor's remuneration * 2,063,006 1,743,325

Shared services costs (see note 28) 46,940,288 37,298,000

181,809,050 180,291,985

Less: Other recoveries (see note 28) 30,666,396 26,899,089

TOTAL 151,142,654 153,392,896

* Break up of Auditor’s remuneration:

Audit fees 1,200,000 1,100,000




TOTAL 2,063,006 1,743,325

** Details of CSR expenditure

1. Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year ` 5,588,800 (previous year ` 6,079,935).

2. Amount spent towards CSR during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities is ` 5,588,800 (previous year ` 6,079,935), which comprise of following:

S.N. PARTICULARS YEAR ENDED MARCH 31, 2018 YEAR ENDED MARCH 31, 2017

IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL IN CASH YET TO BE PAID IN CASH (I.E. PROVISION)

TOTAL

` ` ` ` ` `


(ii) On purposes other than (i) above 5,588,800 - 5,588,800 6,079,935 - 6,079,935

24 CONTINGENT LIABILITIES AND COMMITEMENTS (TO THE EXTENT NOT PROVIDED FOR):

(a) Details of contingent liabilities and commitements (to the extent not provided for):



(`) (`)

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

Income-tax / Service tax matters under appeal, (net of amounts provided). 42,428,984 55,960,329

Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for :

Tangible assets 7,757,000 3,723,457

Intangible assets - -



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

25 EMPLOYEE BENEFITS :(i) In accordance with the Accounting Standard 15 on ‘Employee Benefits’ as specified u/s 133 of the Companies Act, 2013, the

following disclosures have been made:



(`) (`)

Defined Contribution Plans

Amount recognised in the Statement of Profit and Loss

Provident fund 13,089,406 12,529,577


Pension fund 1,963,271 2,402,930

Labour Welfare Fund 432 384

16,669,757 16,675,611

Gratuity 4,930,582 9,028,006

TOTAL 21,600,339 25,703,617



(`) (`)

Present Value of Defined Benefit Obligation



Interest cost 4,562,201 4,446,269

Actuarial loss /(gain) (7,600,346) 2,441,149

Past service cost 2,324,934 -

Liabilities assumed on acquisition / (settled on divestiture) 548,752 (1,582,979)

Benefits paid (5,229,152) (5,415,172)


Fair value of plan assets:



Contributions by the Company 4,930,582 16,451,848

Actuarial gain/(loss) on plan assets (230,400) 557,911

Assets Acquired on Acquisition / (Distributed on Divestiture) - -

Benefits paid (5,229,152) (5,415,172)


Total actuarial losses to be recognised (7,369,946) 1,883,238

Actual return on plan assets:


Actuarial gain/(loss) on plan assets (230,400) 557,911






(`) (`)

Assets and Liabilities recognised in the Balance Sheet:


Fair value of plan assets at the end of the year (65,573,929) (61,410,745)

Amount recognised in the Balance Sheet under note 7 “Other current liabilities- Payable to gratuity fund”

- -

Expenses recognised in the Statement of Profit and Loss


Interest cost 4,562,201 4,446,269


Net actuarial loss to be recognised (7,369,946) 1,883,238

Past service cost 2,324,934

Losses / (Gains) on Acquisition / Divestiture 548,752 (1,582,979)

Other adjustments - (475,484)

Expense recognised in the Statement of Profit and Loss under note 21 " Employee benefits expenses"

4,930,582 9,028,006

Reconciliation of the liability recognised in the Balance Sheet

Opening net liability - 6,948,358

Expense recognised in the Statement of Profit and Loss under note 21 " Employee benefits expenses"

4,930,582 9,028,006

Other adjustments - 475,484

Contribution by the Company 4,930,582 16,451,848

Amount recognised in the Balance Sheet under “Other current liabilities-Employee benefit payable”

- -

Expected employer’s contribution next year 12,000,000 12,000,000



AS ATMARCH 31, 2016



` ` ` ` `

Experience adjustments


Plan assets 65,573,929 61,410,745 45,834,476 52,398,445 38,315,842

Deficit - - (6,948,358) - (5,792,415)

Experience adjustment on plan liabilities (2,050,029) (1,095,055) 7,193,380 461,439 3,410,174

Experience adjustment on plan assets (230,400) 557,911 (520,505) 1,225,896 1,346,323

Amounts recognised in current year and previous four yearsPARTICULARS AS AT

MARCH 31, 2018AS AT

MARCH 31, 2017

Investment pattern % %

Insurer managed funds 100 100

Principal assumptionsDiscount rate 8.15 6.90

Return on plan assets 7.50 7.50

Salary escalation rate 8.00 8.00

As the Gratuity fund is managed by HDFC Standard Life Insurance Company Limited and Life Insurance Company, details of investments are not available with the Company.

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



26 EXPENDITURE IN FOREIGN CURRENCIES (ON PAYMENT BASIS) :



(`) (`)


Others (include travelling and conveyance, advertising and publicity, miscellaneous expenses) 12,696,765 15,439,650

TOTAL 44,721,889 38,903,091

Earnings in foreign currencies :



(`) (`)

Advisory fee income 41,815,327 64,837,130

TOTAL 41,815,327 64,837,130

27 SEGMENT REPORTING:The Company has identified business segments as its primary segment and geographical segments as its secondary segment. Business segments comprise of Stock broking services and Investment banking services. Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. The Company does not have any reportable geographic segment.


MARCH 31, 2018

FOR THE YEAR ENDED

MARCH 31, 2017

(`) (`)

Segment operating revenue

(a) Stock broking 610,629,867 662,255,302

(b) Investment banking 310,218,119 15,894,769

TOTAL 920,847,986 678,150,071

Segment results

(a) Stock broking 156,843,169 152,741,194

(b) Investment banking 301,596,128 (21,543,123)

(c) Unallocated (87,344,920) 35,082,602


Less: Provision for tax 137,500,000 54,383,104

Profit after tax 233,594,377 111,897,569

Segment assets

(a) Stock broking 1,326,640,514 1,457,948,680

(b) Investment banking 41,800,000 -

(c) Unallocated 561,730,085 596,556,345

TOTAL 1,930,170,599 2,054,505,025

Segment liabilities

(a) Stock broking 129,688,840 549,925,206

(b) Investment banking 51,407,300 22,632

(c) Unallocated 56,887,450 45,964,555

TOTAL 237,983,590 595,912,393

Capital employed

(a) Stock broking 1,196,951,674 908,023,474

(b) Investment banking (9,607,300) (22,632)

(c) Unallocated 504,842,635 550,591,790

TOTAL 1,692,187,009 1,458,592,632




MARCH 31, 2018

FOR THE YEAR ENDED

MARCH 31, 2017

(`) (`)

Capital expenditure (including capital work-in-progress)

(a) Stock broking 63,322,394 21,607,524

(b) Investment banking - -

TOTAL 63,322,394 21,607,524

Depreciation and amortisation

(a) Stock broking 17,876,090 13,072,909

(b) Investment banking - -

TOTAL 17,876,090 13,072,909

Significant non cash expenses other than depreciation and amortisation

(a) Stock broking - -

(b) Investment banking - 45,437,884

(c) Unallocated 126,800,000 -

TOTAL 126,800,000 45,437,884

28 RELATED PARTY DISCLOSURES:

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

i. Ultimate holding company:

IDFC Limited (w.e.f. July 9, 2015)

ii. Holding company:

IDFC Limited (upto July 8, 2015)

IDFC Financial Holding Company Limited (w.e.f. July 9, 2015)

iii. Subsidiary companies:

IDFC Capital (USA) INC.

IDFC Securities Singapore Pte Ltd

iv. Fellow subsidiary companies:

IDFC Bank Limited

IDFC Foundation


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




(`) (`)

(a) Ultimate holding company

IDFC Limited Inter corporate deposits taken 50,000,000 8,700,000,000

Inter corporate deposits repaid 50,000,000 8,700,000,000

Interest expenses on inter corporate deposits 2,515,068 5,457,534

Brokerage received 284,507 45,020

Computer hardware/software expenses 905,980 692,567

Provision for expenses - 1,109,589

Deputation charges 111,732 -

(b) Subsidiary company

IDFC Capital (USA) INC. Professional fees 34,694,039 33,398,840

Provision for expenses 2,668,914 10,243,786






(`) (`)

(c) Fellow subsidiary company

IDFC Bank Limited Commitment Fees 20,000,000 20,000,000

Fees Income 255,516,520 19,422,181

Shared services costs 39,495,955 37,298,000

Professional Fees recovered 14,866,174 11,817,896

Advertising and publicity recovered 8,596,998 10,412,692

Membership and subscription recovered 775,375 1,527,685

Employee benefits expenses recovered 62,459,459 58,725,072

Other expenses recovered 7,203,226 4,668,501

Other receivables 41,800,000 -

Balances in current / Overdraft account 13,684,300 149,119,377

Interest on temporary overdraft 1,409,165 154,194

Fixed deposits 323,047,778 128,700,000

Interest accrued on fixed deposits 5,141,753 3,892,956

Interest income on fixed deposits 12,335,904 4,325,507

Brokerage received 1,455,401 2,811,274

IDFC Foundation Donation paid 5,588,800 6,079,935

IDFC Asset Management Company Limited Brokerage received - 78,314

Computer hardware/software expenses 461,287 125,144

Shared services costs 7,444,333 -

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 premises under operating lease effective from Janauary 15, 2018. The tenure of the lease is 48 months. The lease rental recognized in the Statement of Profit and Loss for the year is ` Nil (previous year ` Nil).

ii) The Company has taken vehicles for certain employees under operating leases, which expired between April 3, 2016 and July 4, 2016. Salaries include gross rental expenses of ` Nil (previous year ` 64,141). The committed lease rentals in the future are:

iii) Salaries include gross rental expenses of ` Nil (previous year ` 64,141). The committed lease rentals in the future are:

The committed lease rentals in the future is:



(`) (`)

Not later than one year 411,600 744,000

Later than one year and not later than four years 396,900 1,601,460

30 Disclosures relating to Specified Bank Notes (SBNs) not applicable for current year

Disclosures relating to Specified Bank Notes (SBNs) held and transacted during the period from 8 November 2016 to 30 December 2016

SBNS OTHER DENOMINATION NOTES

TOTAL

Closing cash on hand as on November 8, 2016 15,000 22,542 37,542

Add : Permitted receipts - 172,946 172,946

Less : Permitted payments - 147,879 147,879

Less : Amount deposited in Banks 15,000 - 15,000

Closing cash in hand as on December 30, 2016 - 47,609 47,609

Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated the 8th November, 2017.



31 EARNINGS PER SHARE :In accordance with the Accounting Standard 20 on ‘Earnings Per Share’ as specified u/s 133 of the Companies Act, 2013, the earnings per share has been computed as under:



(`) (`)

Profit after taxation 233,594,377 111,897,569

Weighted average number of shares outstanding 14,137,200 14,137,200

Basic Earnings Per Share 16.52 7.92

Diluted Earnings Per Share 16.52 7.92

32 Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006:

(a) the principal amount and the interest due thereon remaining unpaid to any supplier at the end of each accounting year - Nil

(b) the amount of interest paid by the buyer in terms of Section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year - Nil

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

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

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

The above information takes into account only those suppliers whose response to inquiries made by the Company for this purpose has been received - Nil

33 The Board of Directors, in the meeting held on April 24, 2018 have proposed dividend of ` 15 per equity share (150%) amounting to ` 25.57 crore, inclusive of corporate dividend tax. The proposal is subject to the approval of shareholders at the Annual General Meeting. In terms of revised Accounting Standard (AS) 4 ‘Contingencies and Events occurring after the Balance Sheet date’ as notified by the Ministry of Corporate Affairs through amendments to Companies (Accounting Standards) Amendment Rules, 2016, dated March 30, 2016, proposed dividend is not recognised as a liability as on March 31, 2018. Accordingly, the balance of Reserves and surplus is higher by ` 25.57crore (including corporate dividend tax) and the balance of other liabilities is lower by an equivalent amount as on March 31, 2018.

34 PRIOR YEAR’S FIGURES:

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


Sunil KakarChairman




IDFC SECURITIES SINGAPORE PTE. LIMITED

Mr. Vikram Limaye


Dr. Rajeev Uberoi

Mr. Kumar Anand


DBS Bank Limited

One Finlayson Green #16-02

Singapore 049246

Tel +65 6499 0700

Fax +65 6536 3359

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


DIRECTORS’ STATEMENT

The directors present their statement together with the audited financial statements of the company for the financial year ended March 31, 2018.

In the opinion of the directors, the financial statements of the company as set out on page 7 to 26 are drawn up so as to give a true and fair view of the financial position of the company as at March 31, 2018 and the financial performance, changes in equity and cash flows of the company for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts when they fall due.

1. DIRECTORS

The directors of the company in office at the date of this statement are:

Rajeev Uberoi

Kumar Anand

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate, except for the options mentioned in paragraph 3 of the Directors’ statement.

3. DIRECTORS’ INTEREST IN SHARES AND DEBENTURES The directors holding office at the end of the financial year had no interests in the share capital and debentures of the company and

related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Singapore Companies Act except as follows:


ORDINARY SHARES

SHAREHOLDINGS REGISTERED IN NAME OF DIRECTOR

SHAREHOLDINGS IN WHICH DIRECTORS ARE DEEMED TO HAVE AN INTEREST

AT BEGINNING OF YEAR, OR DATE OF

APPOINTMENT, IF LATER

AT END OF YEAR



AT END OF YEAR


Rajeev Uberoi 132,704 132,704 – –


OPTIONS TO SUBSCRIBE FOR ORDINARY SHARES IN ULTIMATE HOLDING COMPANY



AT END OF YEAR


Rajeev Uberoi 600,000 600,000

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 Kumar Anand Director Director

April 24, 2018

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 4 5


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of IDFC Securities Singapore Pte. Limited (the “company”) which comprise

the statement of financial position of the company as at March 31, 2018, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows of the company for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies, as set out on pages 7 to 26.

In our opinion, the accompanying financial statements of the company are properly drawn up in accordance with the provisions of the

Companies Act, Chapter 50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”), so as to give a true and fair view of

the financial position of the company as at March 31, 2018 and of the financial performance, changes in equity and cash flows of the

company for the year then ended on that date.

Basis for Opinion

We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are


the company in accordance with the Accounting and Corporate Regulatory Authority (“ACRA”) Code of Professional Conduct and Ethics

for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of

the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and

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

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the Directors’ Statement set out on pages 1 to 3.


thereon.


whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit

or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of

the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance

that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are

recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the company’s financial reporting process.




level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement



As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the

audit. We also:

(a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform






(b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control.

(c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by management.

(d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.

(e) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the management regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.


In our opinion, the accounting and other records required by the Act to be kept by the company have been properly kept in accordance with the provisions of the Act.

Public Accountants andChartered AccountantsSingapore

April 24, 2018


STATEMENT OF FINANCIAL POSITION MARCH 31, 2018

2018 2017

NOTE US$ US$

ASSETS

Current assets

Cash and cash equivalents 381,502 430,690

Trade and other receivables 7 90,812 123,847

Prepayments 12,788 7,127

TOTAL CURRENT ASSETS 485,102 561,664

Non-current asset

Plant and equipment 8 840 1,473

TOTAL ASSETS 485,942 563,137

LIABILITY AND EQUITY

Current liability

Other payables and accruals 9 64,509 37,139

Capital and reserves

Share capital 10 2,444,785 2,444,785

Accumulated losses (2,023,352) (1,918,787)

TOTAL EQUITY 421,433 525,998

TOTAL LIABILITY AND EQUITY 485,942 563,137

See accompanying notes to financial statements


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME YEAR ENDED MARCH 31, 2018

STATEMENT OF CHANGES IN EQUITY YEAR ENDED MARCH 31, 2018

2018 2017

NOTE US$ US$

REVENUE 11 546,124 315,309

Staff costs 14 (542,684) (460,809)

Depreciation expense 8 (633) (110)

Other operating income 12 10,375 3,015

Other operating expenses 13 (117,747) (101,002)

Loss before income tax (104,565) (243,597)

Income tax expense 15 - -

LOSS FOR THE YEAR, REPRESENTING TOTAL COMPREHENSIVE LOSS FOR THE YEAR

(104,565) (243,597)


SHARECAPITAL

ACCUMULATEDLOSSES

TOTAL

US$ US$ US$

Balance at April 1, 2016 2,444,785 (1,675,190) 769,595


Balance at March 31, 2017 2,444,785 (1,918,787) 525,998


Balance at March 31, 2018 2,444,785 (2,023,352) 421,433



STATEMENT CASHFLOWS YEAR ENDED MARCH 31, 2018

2018 2017

US$ US$



Adjustment for:

Depreciation expense 633 110

OPERATING CASH FLOWS BEFORE MOVEMENTS IN WORKING CAPITAL (103,932) (243,487)


Prepayments (5,661) 403

Other payables and accruals 27,370 6,800

NET CASH USED IN OPERATING ACTIVITIES (49,188) (208,818)

INVESTING ACTIVITY

Purchase of property and equipment, representing net cash used in investing activity - (1,583)

NET DECREASE IN CASH AND CASH EQUIVALENTS (49,188) (210,401)

Cash and cash equivalents at beginning of the year 430,690 641,091

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 381,502 430,690




01 GENERAL

The company (Registration No. 201228582N) is incorporated in Singapore with its registered office and principal place of business at One

Finlayson Green #16-02, Singapore 049246. The financial statements are expressed in United States dollars.

The principal activity of the company is dealing in securities. On February 17, 2016, the company obtained a licence under the Securities and

Futures Act (Cap. 289) to provide dealing in securities services, as a restricted broker.

The financial statements of the company for the financial year ended March 31, 2018 were authorised for issue by the Board of Directors on

April 24, 2018.


BASIS OF ACCOUNTING - The financial statements have been prepared in accordance with the historical cost basis and are drawn up in

accordance with the provisions of the Singapore Companies Act and Financial Reporting Standards in Singapore (“FRS”).

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique.

In estimating the fair value of an asset or a liability, the company takes into account the characteristics of the asset or liability which market

participants would take into account when pricing the asset or liability at the measurement date. Fair value measurement and/or disclosure

purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but

are not fair value, such as value in use in FRS 36 Impairment of Asset.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which the

inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety which

are described as follows:

¡ Level 1 inputs are quoted market prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the

measurement date;

¡ Level 2 inputs are inputs, other than the quoted market prices included within Level 1, that are observable for the asset or liability,

either directly or indirectly; and

¡ Level 3 inputs are unobservable inputs for the asset or liability.

ADOPTION OF NEW AND REVISED STANDARDS

On April 1, 2017, the company adopted all the new and revised FRSs and Interpretations of FRS (“INT FRSs”) that are effective from that

date and are relevant to its operations. The adoption of these new/revised FRSs and INT FRSs does not result in changes to the company’s

accounting policies and has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these financial statements, the following new/revised FRSs and amendments to FRS that are relevant to the

company were issued but not effective:

¡ FRS 109 Financial Instruments1

¡ FRS 115 Revenue from Contracts with Customers (with clarifications issued)1

¡ FRS 116 Leases2

1 Applies to annual periods beginning on or after January 1, 2018, with early application permitted.

2 Applies to annual periods beginning on or after January 1, 2019, with earlier application permitted if FRS 115 is adopted.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The management anticipates that the adoption of the above FRSs and amendments to FRS in future periods will not have a material impact

on the financial statements of the company in the period of their initial adoption except for the following:

FRS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS

In November 2014, FRS 115 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising

from contracts with customers. FRS 115 will supersede the current revenue recognition guidance including FRS 18 Revenue, FRS 11 Construction

Contracts and the related Interpretations when it becomes effective. Further clarifications to FRS 115 was also issued in June 2016.

The core principle of FRS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in

an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the



Standard introduces a 5-step approach to revenue recognition:

¡ Step 1: Identify the contract(s) with a customer.

¡ Step 2: Identify the performance obligations in the contract.

¡ Step 3: Determine the transaction price.

¡ Step 4: Allocate the transaction price to the performance obligations in the contract.

¡ Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

Under FRS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services

underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in FRS 115 to

deal with specific scenarios. Furthermore, extensive disclosures are required by FRS 115.

The Company does not anticipate that the initial application of this new standard FRS 115 will have any material impact on the financial

statements other than enhanced disclosures.

FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the company’s statement of financial position when

the company becomes a party to the contractual provisions of the instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income

or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or

payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other

premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense

is recognised on an effective interest basis.

FINANCIAL ASSETS


Trade and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as “loans

and receivables”. Loans and receivables are measured at amortised cost using the effective interest method less impairment. Interest

is recognised by applying the effective interest method, except for short-term receivables when the recognition of interest would be

immaterial.

Impairment of financial assets

Financial assets, 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 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 and accruals are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost,

using the effective interest method, with interest expense recognised on an effective yield basis.

Derecognition of financial liabilities

The company derecognises financial liabilities when, and only when, the company’s obligations are discharged, cancelled or they expire.

Offsetting arrangements

Financial assets and financial liabilities are offset and the net amount presented in the statement of financial position when the company

has a legally enforceable right to set off the recognised amounts; and intends either to settle on a net basis, or to realise the asset and

settle the liability simultaneously. A right to set-off must be available today rather than being contingent on a future event and must be

exercisable by any of the counterparties, both in the normal course of business and in the event of default, insolvency or bankruptcy.

LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the

lessee. All other leases are classified as operating leases.

Operating lease

Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease unless

another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate

benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more

representative of the time pattern in which economic benefits from the leased asset are consumed.

PROPERTY AND EQUIPMENT

Property 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 CASH EQUIVALENTS IN THE STATEMENT OF CASH FLOWS

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

03 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

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

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

results may differ from these estimates.

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

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

revision affects both current and future periods.

CRITICAL JUDGEMENT IN APPLYING THE ENTITY’S ACCOUNTING POLICIES

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

amounts recognised in the financial statements.

KEY SOURCES OF ESTIMATION UNCERTAINTY AND JUDGEMENTS

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

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

liabilities within the next financial year.

04 FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT

A. CATEGORIES OF FINANCIAL INSTRUMENTS

The following table sets out the financial instruments as at the end of the reporting period:

2018 2017

US$ US$

FINANCIAL ASSETS

Loans and receivables (including cash and cash equivalents) 472,314 554,537

FINANCIAL LIABILITIES

Amortised cost 64,509 37,139

At the end of reporting period, the company does not have any financial instruments subject to offsetting, enforceable master

netting arrangements and similar agreements.

B. FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES

The company has a system of controls in place to create an acceptable balance between the probability of risks occurring and

the cost of managing the risks. The management continually monitors the company’s risk management process to ensure that an

appropriate balance between risk and control is achieved.

The company’s activities expose it to certain financial risks such as market risk (including exchange rate risk and interest rate risk),

credit risk and liquidity risk.



(i) Foreign currency risk

The company transacts business in various foreign currencies, including Singapore dollar and India rupee and therefore is

exposed to foreign exchange risk.

At the end of the reporting period, the carrying amounts of significant monetary assets and monetary liabilities denominated in

currencies other than the company’s functional currency are as follows:

2018 2017

INDIAN RUPEE SINGAPORE DOLLAR INDIAN RUPEE SINGAPORE DOLLAR

ASSETS

Cash and bank balances - 249,519 - 113,931

Other receivable 14,300 76,511 52,306 71,541

14,300 326,030 52,306 185,472

LIABILITIES

Other payables - (37,394) - (32,961)

Net foreign exchange position 14,300 288,636 52,306 152,511

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

2018 2017

US$ US$

Singapore dollar - Strengthened 8% (2017 : 8%) 23,091 12,201

Indian Rupee - Strengthened 4% (2017 : 6%) 572 3,138

A weakening of the functional currency of the company against the above currencies would have had the equal but opposite

effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

(ii) Interest rate risk

The company does not have any significant interest bearing assets and liabilities, hence it is not exposed to interest rate risk.

Accordingly, no sensitivity analysis is presented.

(iii) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the

company.

The company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where

appropriate, as a means of mitigating the risk of financial loss from defaults.

The credit risk on liquid funds (bank deposits) is limited as the counterparties are banks with high credit-ratings assigned by

international credit-rating agencies.

At the end of the reporting period, there were no concentrations of credit risk. The carrying amount of financial assets

recorded in the financial statements, grossed up for any allowances for losses, represents the company’s maximum exposure to

credit risk without taking account of the value at any collateral obtained.

(iv) Liquidity risk

The company maintains sufficient cash and bank balances to fund its daily operating requirement. In addition, the company

also relies on the holding company to fund any shortfall in liquidity requirements. All financial assets and financial liabilities of

the company are non-interest bearing and repayable on demand or within 1 year.

C. CAPITAL MANAGEMENT AND OBJECTIVES

The company manages its capital to ensure that it will be able to continue on a going concern while maximising the return to

stakeholders through the optimisation of the debt and equity balance.

The capital structure of the company comprises of issued share capital net of accumulated losses.



The company is required to maintain a minimum amount of capital as prescribed under the Securities and Futures Act (Chapter

289) and relevant Regulations. The company is in compliance with the capital requirements for the year ended March 31, 2018 and

March 31, 2017.

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:

2018 2017

US$ US$

Recharges of costs by a related company (127,561) (48,693)

Placement fee revenue from a related company 273,482 89,248

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.

Compensation of directors and key management personnel

The remuneration of directors and other members of key management during the year was as follows:

2018 2017

US$ US$

Salaries and other short-term benefits 260,268 232,883

07 TRADE AND OTHER RECEIVABLES

2018 2017

US$ US$

Related company - Trade 14,300 52,306

Third parties - Non-trade 275 -

Deposits 76,237 71,541

90,812 123,847

The average credit period is 30 days (2017 : 30 days). At year-end, there were no balances which were past due and no impairment

allowance was made.



08 PROPERTY AND EQUIPMENT

COMPUTERS

US$

COST:

At April 1, 2016 4,398

Additions 1,583

At March 31, 2017 5,981

Additions -

At March 31, 2018 5,981

ACCUMULATED DEPRECIATION:

At April 1, 2016 4,398

Depreciation 110

At March 31, 2017 4,508

Depreciation 633

At March 31, 2018 5,141

CARRYING AMOUNT:

At March 31, 2018 840

At March 31, 2017 1,473

09 OTHER PAYABLES AND ACCRUALS

2018 2017

US$ US$

Accrued expenses 29,685 25,366

Trade payables to a related company (Note 5) 27,115 4,178

Other payables 595 -

Salary related accruals 7,114 7,595

64,509 37,139

10 SHARE CAPITAL

2018 2017 2018 2017

NUMBER OF ORDINARY SHARES US$ US$

Issued and fully paid 3,140,001 3,140,001 2,444,785 2,444,785

Fully paid ordinary shares, which have no par value, carry one vote per share and carry a right to dividends as and when declared by the

company.

There are no subscriptions or redemptions during the year.

11 REVENUE

2018 2017

US$ US$

Fee income 546,124 315,309



12 OTHER OPERATING INCOME

2018 2017

US$ US$

Interest income - 3,015

Foreign exchange gain 10,375 -

10,375 3,015

13 OTHER OPERATING EXPENSES

2018 2017

US$ US$

Communication expenses 7,869 7,132


Travelling and conveyance 9,870 4,780

Subscription/Membership fee 19,910 20,567

Foreign exchange loss - 16,746

Rental 34,072 4,877

Others 14,487 14,713

117,747 101,002

14 STAFF COSTS

Staff costs expense includes the following:

2018 2017

US$ US$

Staff costs (excluding directors’ remuneration and costs of defined contribution plans) 244,355 199,564

Directors’ remuneration 247,346 212,931

Costs of defined contribution plans 33,121 31,008

Other staff costs 17,862 17,306

542,684 460,809

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%

(2017 : 17%) to loss before income tax as a result of the following differences:

2018 2017

US$ US$


Income tax benefit at statutory rate 17% (2017 : 17%) (17,776) (41,411)

Effects of (income) expenses that are not (taxable) deductible in determining taxable profit (1,656) 2,865

Effects of unused tax losses not recognised as deferred tax assets 19,432 38,546

Income tax expense - -

Subject to the agreement by the tax authorities, at the end of the reporting period, the company has unutilised tax losses of

approximately US$1,902,286 (2017 : US$1,787,979) available for offset against future profit. Deferred tax asset of US$323,389 (2017 :

US$303,956) has not been recognised in respect of the tax losses due to the unpredictability of future profit streams. The unrecognised

tax losses may be carried forward indefinitely subject to the conditions imposed by law including the retention of majority shareholders

as defined.

IDFC CAPITAL (USA) INC.

Mr. Clifford Goldman


JP Morgan Chase Bank NA

Regus Business Centre

600 Third Avenue

2nd Floor New York, USA 10016

Tel +1 646 571 2303

CEO

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Seventh Annual Report of IDFC Capital (USA), Inc. together with the audited accounts for the year ended March 31, 2018.

FINANCIAL RESULTS

PARTICULARS FOR THE YEAR ENDED MARCH 31, 2018 AMOUNT IN US$

Total Income 537,224

Less: Total Expenses 502,097

Profit before Tax 35,127

Less: Income Taxes (4,583)

Net Income 39,710

OPERATIONAL REVIEW AND FUTURE OUTLOOK

The US business has shown stable client traction and additions throughout the year. Although the environment remains challenging, the firm has been able to add new clients, increase revenues for 2018 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

May 3, 2018

I D F C C A P I TA L ( U S A ) , I N C . | 2 6 1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Audit Committee of IDFC Securities Limited and Stockholder of

IDFC Capital (USA), Inc.

OPINION ON THE FINANCIAL STATEMENTS

We have audited the accompanying statement of financial condition of IDFC Capital (USA), Inc. as of March 31, 2018, and the related statements of operations, changes in stockholder’s equity, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of IDFC Capital (USA), Inc. as of March 31, 2018, 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.

BASIS FOR OPINION

These financial statements are the responsibility of IDFC Capital (USA), Inc.’s management. Our responsibility is to express an opinion on IDFC Capital (USA), Inc.’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to IDFC Capital (USA), Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

SUPPLEMENTAL INFORMATION

The supplemental information has been subjected to audit procedures performed in conjunction with the audit of IDFC Capital (USA), Inc.’s financial statements. The supplemental information is the responsibility of IDFC Capital (USA), Inc.’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a–5. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.

We have served as IDFC Capital (USA), Inc.’s auditor since 2018

New York, New York

May 3, 2018


STATEMENT OF FINANCIAL CONDITION March 31, 2018

AMOUNT IN US$

ASSETS

Cash 885,714

Due from parent 41,032

Fixed assets - net of accumulated depreciation of $45,751 984

Deferred tax asset 32,100

Income tax receivable 5,012

Other assets 12,724

TOTAL ASSETS 977,566

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:

Accrued expenses and other liabilities 12,084

STOCKHOLDER’S EQUITY:

Common stock ($.01 par value; 100,000,000 shares authorized, issued and outstanding) 1,000,000

Accumulated deficit (34,518)

TOTAL STOCKHOLDER’S EQUITY 965,482

TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY 977,566


STATEMENT OF OPERATIONS For the Year Ended March 31, 2018

AMOUNT IN US$

REVENUES

Transfer pricing income 537,220

Other income 4

TOTAL REVENUES 537,224

EXPENSES

Employee compensation and benefits 308,597

Consulting and professional fees 100,351

Rent, utilities and other office expenses 29,767

Market data and communications 31,033

Regulatory fees and expenses 8,863

Travel, entertainment and promotional expenses 17,151

Other 6,335

TOTAL EXPENSES 502,097

Net income before income taxes 35,127

Income tax benefit (4,583)

Net income 39,710


STATEMENT OF CHANGES IN STOCKHOLDER’S EQUITY For the Year Ended March 31, 2018

AMOUNT IN US$

SHARES COMMON STOCK ACCUMULATED DEFICIT

TOTAL

Balance, April 1, 2017 100,000,000 1,000,000 (74,228) 925,772

Net income - - 39,710 39,710

Balance, March 31, 2018 100,000,000 1,000,000 (34,518) 965,482


STATEMENT OF CASH FLOWS For the Year Ended March 31, 2018

AMOUNT IN US$

CASH FLOWS FROM OPERATING ACTIVITIES

Net income 39,710

Adjustments to reconcile net income to net cash provided by operating activities Depreciation 788

Deferred tax (5,800)

Decrease (increase) in operating assets Due from parent 116,957


Other assets (2,164)

(Decrease) in operating liabilities

Accrued expenses and other liabilities (8,204)

Net cash provided by operating activities 144,943

CASH USED IN INVESTING ACTIVITIES

Repayment of loan to officer 5,868

Net increase in cash 150,811

CASH

Beginning of year 734,903

End of year 885,714



01. ORGANIZATIONIDFC Capital (USA), Inc. (the “Company”), is a wholly owned subsidiary of IDFC Securities Limited (“the Parent”). The Parent is a wholly owned subsidiary of IDFC Limited (“the Ultimate Parent”). The Company is a broker-dealer registered with the Securities and Exchange Commission (the “SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”).

The Company’s principal business activity is distributing research and market commentary and brokering transactions in Indian equities for U.S. institutional clients. The customers introduced by the Company transact their business on a delivery versus payment basis with settlement of the transactions facilitated by an affiliate in India for securities traded in Indian stock markets.

2. SIGNIFICANT ACCOUNTING POLICIESBasis 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 EstimatesIn preparing the financial statements, management makes estimates and assumptions that may affect the reported amounts. Such estimates include assumptions used in determining the provision for income taxes. Actual results could differ from these estimates.

Fixed AssetsFixed assets represent equipment and are stated at cost less accumulated depreciation and amortization. Depreciation is computed on a straight line basis over the assets estimated useful lives of 3 years.

Transfer Pricing IncomeThe Company receives fees from the Parent for performing sales and marketing functions on behalf of the Parent in order to attract institutional customers. The fees are based on expenses incurred by the Company in relation to the marketing activities such as compensation and benefits, professional services, occupancy, travel and other operating costs, plus a transfer pricing agreement profit factor of 7%.

Income 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.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes (continued)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 would 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.

3. INCOME TAXESThe components of the income tax expense for the year ended March 31, 2018 are as follows:

AMOUNT IN US$

TAX PROVISION

CURRENT DEFERRED TOTAL

Federal 2,355 (5,800) (3,445)

State and local (1,138) - (1,138)

1,217 (5,800) (4,583)

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, 2018, the Company has a deferred tax asset of $32,100, 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 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. 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.

4. RECENT ACCOUNTING DEVELOPMENTSFASB issued ASU 2014-09, Revenue from Contracts with Customers, which supersedes existing accounting standards for revenue recognition and creates a single framework. The standard also specifies the accounting for certain costs to obtain or fulfill a contract with a customer. The new guidance is effective for the fiscal years beginning after December 15, 2017. The Company has evaluated the potential impact and has determined that there is no adverse impact on its financial statements.

5. CONCENTRATION OF CREDIT RISKIn the normal course of business, the Company’s activities involve transactions with the Parent. These activities may expose the Company to risk in the event the Parent is unable to fulfill its contractual obligations.

The Company maintains substantially all of its cash balances at two major financial institutions. The Company does not believe that these amounts are exposed to significant risk.

6. REGULATORY REQUIREMENTSThe Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1) (“the Rule”) under the Securities Exchange Act of 1934. The Company has elected to use the alternative method permitted by the Rule, which requires that the Company maintain minimum net capital, as defined, shall not be less than $250,000. At March 31, 2018, the Company had net capital of $873,630 which was $623,630 in excess of its required minimum net capital of $250,000.

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company’s activities are limited to those set forth in the condition for exemption appearing in paragraph (k)(2)(i).

7. RELATED PARTY TRANSACTIONSBased on its liquidity at any given time, the Company’s ability to meet regulatory capital requirements may be dependent on its access to funding from the Parent.

The Company maintains a service level agreement with the Parent whereby the Company distributes research on its behalf. The Parent compensates the Company by paying its expenses plus a markup of 7%.

The Company earned $537,220 in transfer pricing income from the Parent for the year ended March 31, 2018, representing 107% of total expenses, in accordance with the service level agreement, of which $41,032 remained unpaid as of March 31, 2018 and is reflected as receivable from parent on the statement of financial condition.

The activities of the Company include significant transactions with affiliates and may not necessarily be indicative of the conditions that would have existed or the results of operations if the Company had operated as an unaffiliated business.

8. COMMITMENTS AND CONTINGENCIESThe Company rents office space under an operating lease, which expires August 31, 2019. The future minimum base rent payments required under this operating lease is $11,915.

Total rental expense for the year ended March 31, 2018, was $28,594 and is included in rent, utilities and other office expenses on the Statement of Operations.

There is no pending litigation against the Company.

9. FIXED ASSETSFixed assets consisted of the following at March 31, 2018:

AMOUNT IN US$

Equipment 46,735

Less: accumulated depreciation (45,751)

984

Depreciation expense for the year ended March 31, 2018 was $788.

10. FAIR VALUE OF FINANCIAL INSTRUMENTSCertain financial instruments are carried at amounts that approximate fair value due to the short- term nature and negligible credit risk. These instruments include cash (Level 1) and due from parent (Level 2).

11. SUBSEQUENT EVENTSThe Company has evaluated subsequent events up to the date on which the financial statements are issued. The Company’s evaluation noted no subsequent events that require adjustment to, or disclosure in, these financial statements.


COMPUTATION OF NET CAPITAL UNDER RULE 15C3-1OF THE SECURITIES AND EXCHANGE COMMISSION March 31, 2018

AMOUNT IN US$

STOCKHOLDER’S EQUITY 965,482

Deductions and/or charges Nonallowable assets

Due from parent 41,032

Fixed assets 984

Deferred tax asset 32,100


Other assets 12,724

TOTAL NONALLOWABLE ASSETS 91,852

Net capital 873,630

Minimum capital requirement 250,000

Excess net capital 623,630

There were no material differences between the computation of net capital presented above and the computation of net capital reported in the Company’s unaudited Form X-17A-5, Part IIA filed as of April 24, 2018


COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS AND INFORMATION RELATING TO POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15C3-3 OF THE SECURITIES AND EXCHANGE COMMISSION March 31, 2018

The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 in that the Company’s activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(i).

IDFC ASSET MANAGEMENT COMPANY LIMITED

U65993MH1999PLC123191

Mr. Vikram Limaye (Chairman)



(w.e.f. July 16, 2017)

Mr. Vishwavir Saran Das

Ms. Anita Ramachandran



IDFC Bank Limited

One Indiabulls Centre,

6th Floor, Jupiter Mills Compound,

841, Senapati Bapat Marg,

Elphinstone Road (West)

Mumbai 400 013

Tel +91 22 6628 9999

Fax + 91 22 2421 5051

Website www.idfcmf.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C A S S E T M A N A G E M E N T C O M PA N Y L I M I T E D | 2 7 1

BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Eighteenth 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, 2018.





Total Income 3,184,916,879 3,096,303,079

Less: Total Expenses 2,372,717,273 1,696,287,581

Profit before Tax 812,199,606 1,400,015,498


Profit after Tax 544,842,562 972,814,191

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 ` 64,550.58 crore (excluding Fund of Funds Schemes) as on March 31, 2018.

New Scheme launches:

During FY18, below schemes were launched

SR. NO. NAME OF THE SCHEME TYPE OF SCHEME

1 IDFC Equity Opportunity - Series 4 Close-ended equity scheme


3 IDFC Fixed Term Plan - Series 140 Close-ended debt scheme




II. Portfolio Management Services:

The Company is registered as a Portfolio Manager with the Securities and Exchange Board of India (“SEBI”) to carry out Portfolio Management Services pursuant to SEBI (Portfolio Managers) Regulations, 1993. IDFC Hybrid Infrastructure Portfolio was the first portfolio offering for domestic retail investors under the PMS platform of the Company. The investment objective of HIP is to invest in permitted securities / instruments issued by companies operating in the Infrastructure space and endeavour to achieve risk adjusted medium to long term capital appreciation.

The Company also acts as an Investment Manager to IDFC S.P.I.C.E. Fund, the objective of the fund is to achieve attractive risk adjusted returns through investments in medium to long term unlisted and listed opportunities in social infrastructure, physical infrastructure, consumption and environment sectors.

Additionally, the company has also rolled out a couple of innovative strategies.

1. A new Alternative Investment Fund (AIF), ‘IDFC IEH Conservative Fund’, an Equity Long/Short Low Net Market neutral Product. The objective of this fund is to outperform long term debt, whilst keeping portfolio volatility lower than the main equity index over a cycle.

2. IDFC NEO Equity Portfolio, a PMS portfolio that incorporates Artificial Intelligence and Machine Learning, with an objective to outperform the BSE 200 Index.



DIVIDEND

The Company has made a profit after tax of ` 54.48 crore For FY18. The Directors recommend a dividend of ` 120 (i.e. 1200%) per equity share on face value of `10 for the financial year ended March 31, 2018.

SUBSIDIARY COMPANIES / ASSOCIATES / JOINT VENTURES

As on March 31, 2018, the Company had one subsidiary, namely IDFC Investment Managers (Mauritius) Limited (“IMML”). The Board of Directors of the Company reviews the affairs of its subsidiary companies regularly. Further, a statement containing the salient features of the financial statement and details of performance and financial positions of IMML in the format AOC-I is appended as Annexure I.


BOARD'S REPORT

ALTERATION OF ARTICLES OF ASSOCIATION

During FY18, the Company adopted the new set of Articles of Association vide a special resolution passed at the Annual General Meeting held on July 25, 2017.

PARTICULARS OF EMPLOYEESThe Company had 213 employees as on March 31, 2018.

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.

EMPLOYEE STOCK OPTIONS

Pursuant to provisions of Companies Act, 2013 and Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 (Rules), the Members of the Company at its Extra-ordinary General meeting held on September 7, 2017, approved IDFC AMC Employee Stock Option Scheme 2017 (“ESOS 2017”) to enable the employees of the Company to participate in the future growth and financial success of the Company. Accordingly, the options were granted to employees of the Company under ESOS 2017. There were no options vested during the year. Details required under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 (Rules) forms integral part of this Annual Report. The Annual Report excluding the aforesaid information is being sent to the Shareholders of the Company and is available for inspection of the Shareholders of the Company at its Registered Office.

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTSThere were no loans or guarantee or investments of the Company under the provisions of Section 186 of the Companies Act, 2013.

FOREIGN EXCHANGE EXPENDITURE AND EARNINGThe particulars regarding foreign exchange expenditure are furnished in Note no. 22 in the Notes forming part of the Financial Statements. There were no foreign exchange earnings during FY18.

PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONSince the Company does not undertake any manufacturing facility, the disclosure of information on matters required to be disclosed in terms of Section 134(3)(m) are not applicable and hence not given.

DIRECTORSDuring the year, Mr. Vikram Limaye resigned as a Director w.e.f. July 15, 2017. The Board places on record sincere appreciation for services rendered by him during his tenure.

The Board appointed Mr. Sunil Kakar as an Additional Director in the category of Nominee Director w.e.f. July 16, 2017. At the Annual General Meeting of the Company held on July 15, 2017, the Members appointed Mr. Sunil Kakar as a Nominee Director of IDFC Limited vide an Ordinary Resolution. Further, the same AGM, the Members reappointed Mr. Vishwavir Saran Das as an Independent Director of the Company for two years from the conclusion of the 17th AGM till the conclusion of 19th AGM to be held for FY19. This being the second term of Mr. Vishwavir Saran Das, the said reappointment was approved vide a special resolution.

At the Annual General Meeting held on July 21, 2016, the Members of the Company appointed Ms. Anita Ramachandran (DIN: 00118188) as an Independent Director to hold office from the conclusion of that Annual General Meeting till the conclusion of the Eighteenth Annual General Meeting of the Company to be held for the FY18 i.e. ensuing Annual General Meeting. Pursuant to provisions of Section 149(10) & (11) of the Companies Act, 2013, Independent Director can be appointed for another term, if the same is approved by the shareholders by way of Special Resolution.

On recommendation of the Nomination and Remuneration Committee and considering the valuable contributions and continued association of Ms. Anita Ramachandran, the Board proposed to reappoint her for three consecutive years as ID of the Company to hold office from the conclusion of the ensuing AGM to be held on June 4, 2018 till June 3, 2021. She fulfills the conditions specified in the Companies Act, 2013 and the Rules made thereunder and is Independent of the Management. In the opinion of the Board, Ms. Anita Ramachandran is a person of integrity and has the necessary knowledge, experience and expertise for being reappointed as ID. She shall not be liable to retire by rotation. The Members are requested to consider reappointment of Ms. Anita Ramachandran at ensuing AGM by passing special resolution.

Pursuant to Section 152 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder, Mr. Sunil Kakar will retire by rotation at the ensuing AGM for be held for FY18. The Company has received notice in writing under the provisions of Section 160 of the Companies Act, 2013 from Member along with a deposit of ` 1,00,000/- proposing the candidature of the Mr. Sunil Kakar as Nominee Director.

The Members are requested to approve the appointments of Mr. Sunil Kakar and Ms. Anita Ramachandran at the ensuing AGM.


BOARD'S REPORT

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.


During the year, Seven Board meetings were held on April 24, 2017; July 25, 2017; August 9, 2017; October 24, 2017; November 28, 2017; January 23, 2018 and March 26, 2018. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013. Your Company has complied with the provisions of Secretarial Standard I on Meetings of Board of Directors issued by the Institute of Company Secretaries of India.

Attendance details of Board of Directors for the Board Meetings held during FY18 are given below.



Mr. Vikram Limaye1 00488534 Nominee of IDFC - Chairman 1 1

Mr. Sunil Kakar2 03055561 Nominee of IDFC - Chairman 6 6

Mr. Vishwavir Saran Das 03627147 Independent Director 7 7

Ms. Anita Ramachandran 00118188 Independent Director 7 6

1 Tendered his resignation w.e.f. July 15, 2017.2 Appointed as Nominee Director w.e.f. July 16, 2017

AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee (earlier known as Audit Committee) was reconstituted on July 17, 2017. During the year, Four Audit and Risk Management Committee meetings were held on April 24, 2017, July 25, 2017, October 24, 2017 and January 23, 2018. The gap between two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013.

Attendance details of Directors for the Audit Committee Meetings held during FY18 are given below.

NAME OF THE MEMBER POSITION STATUS NO. OF MEETINGS HELD


Mr. Vishwavir Saran Das Independent Director Chairman 4 4

Ms. Anita Ramachandran Independent Director Member 4 3

Mr. Vikram Limaye1 Nominee of IDFC Member 1 0

Mr. Sunil Kakar2 Nominee of IDFC Member 3 3

1 Resigned as a Member w.e.f. July 15, 20172 Appointed as a Member of the Committee w.e.f. July 17, 2017


The Nomination and Remuneration Committee was reconstituted on July 17, 2017. During the year, Four meetings of NRC were held on April 24, 2017, August 9, 2017, January 23, 2018 and March 26, 2018.

Attendance details of Directors for the NRC Meetings held during FY18 are given below.



Ms. Anita Ramachandran Independent Director Chairperson 4 3

Mr. Vishwavir Saran Das Independent Director Member 4 4

Mr. Vikram Limaye1 Nominee of IDFC Member 1 1

Mr. Sunil Kakar2 Nominee of IDFC Member 3 3

1 Tendered his resignation w.e.f. July 15, 20172 Appointed as a Member of the Committee w.e.f. July 17, 2017


During the year, a separate meeting of Independent Directors was held on April 24, 2017. All Independent Directors attended the said meeting.


BOARD'S REPORT

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013, a detailed questionnaire was circulated to the Board for Annual evaluation. The Directors evaluated the Board as a whole, its committee and Individual Directors including Chairman. The exercise of Board evaluation was carried out and completed effectively.

REMUNERATION POLICY

The Company has in place a Remuneration Policy for the Directors, Key Managerial Personnel, Senior Management and Other Employees which is line with the Section 178 of Companies Act, 2013 and Rules made thereunder.

STATUTORY AUDITORS

At the AGM held on July 25, 2017, the Members of the Company appointed Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company for a period of Five years from the 17th AGM of the Company till the conclusion of the 22nd AGM of the Company to be held for FY22 subject to subsequent ratification on annual basis. The Members are requested to ratify the appointment of PWC for FY19 at the ensuing AGM.

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

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 FY18.

There are no qualifications or observations or other remarks made by the Secretarial Auditors in their report.

The Secretarial Audit Report forms part of this Board’s Report as Annexure II.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013

In all related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. IDFC Group has always been committed to good corporate governance practices, including matters relating to Related Party Transactions. The Company has in place a Policy on Related Party Transactions and the same is uploaded on the website of the Company.

The Audit Committee reviews the details of related party transactions entered into by the Company on quarterly basis.

Since all related party transactions entered into by the Company were in the ordinary course of business and were on an arm’s length basis, Form AOC-2 is not applicable to the Company.


The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls. Internal audits of all the business units of the Company are regularly carried out to review the Internal Control Systems. The Audit Reports of Internal Auditors along with their recommendations and implementation contained therein are regularly reviewed by the Audit Committee of the Board. The Internal Auditors verified the key Internal Financial Control by reviewing key controls impacting financial reporting and Enterprise risk management procedures of the Company and found the same satisfactory. It was placed before the Audit Committee of the Company.

RISK MANAGEMENT

The Audit and Risk Management Committee of the Company reviewed the risk register at every meeting held during the year. The Members of the Audit and Risk Management 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, 2018 till the date of this report.





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

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 FY18 under the Prevention of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

ANNUAL RETURN

The extract of the Annual Return in the prescribed Form No. MGT 9 is appended as Annexure III. The Annual Return of the Company for FY18 has been hosted at www.idfcmf.com.


During the year, Corporate Social Responsibility Committee was reconstituted on July 17, 2017. As on March 31, 2018, the Corporate Social Responsibility Committee comprises of the following:

1. Mr. Sunil Kakar - Chairman

2. Mr. Vishwavir Saran Das

3. Ms. Anita Ramachandran

In FY18, one meeting of CSR Committee was held on October 24, 2017 where all members were present.

The composition of CSR Committee is in compliance with the Companies Act, 2013. The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed as Annexure IV (will be sent separately).



(a) in the preparation of the annual financial statements for the year ended March 31, 2018, 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, 2018 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.

ACKNOWLEDGMENTS

The Board places on record its gratitude to SEBI, Association of Mutual Funds of India, other regulatory authorities and institutions and Investors of the Mutual Fund schemes for their continued guidance and support and expresses its sincere appreciation to all the employees for their commendable teamwork and enthusiastic contribution during the year.

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, IDFC Financial Holding Company Limited and other group companies.


Sunil KakarChairman


BOARD'S REPORT






1. CIN -

2. Name of the subsidiary IDFC Investment Managers (Mauritius) Limited

3. Date since when subsidiary was acquired September 13, 2010

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

April 1, 2017 to March 31, 2018

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

INR*

6. Share capital (as on March 31, 2018) 2,50,69,224

7. Reserves & surplus (as on March 31, 2018) (14,271,478)

8. Total assets (as on March 31, 2018) 13,746,225

9. Total Liabilities (as on March 31, 2018) 13,746,225

10. Investments Nil

11. Turnover Nil

12. Profit/(Loss) before taxation (2,050,627)

13. Provision for taxation Nil

14. Profit/(Loss) after taxation (2,050,627)

15. Proposed Dividend Nil

16. % of shareholding 100

*Exchange Rate:

Closing Rate: 1 USD = 65.0441

Average Rate: 1 USD = 64.4932

PART “B”: ASSOCIATES AND JOINT VENTURES

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

NOT APPLICABLE

For and on behalf of the Board of Directors ofIDFC Asset Management Company Limited

Sunil KakarDirector

Vishwavir Saran DasDirector

Nirav Shah Rupesh AcharyaMumbai, April 23, 2018 Company Secretary Chief Financial Officer



FOR THE FINANCIAL YEAR ENDED MARCH 31, 2016

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


To,

The Members,


One India Bulls Centre, 841 Jupiter Mills Compound,

Senapati Bapat Marg, Elphinstone (West),

Mumbai – 400 013

CIN: U65993MH1999PLC123191

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate

practices by IDFC ASSET MANAGEMENT COMPANY LIMITED having CIN: U65993MH1999PLC123191 (hereinafter called “the Company”).

Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory

compliances and expressing our opinion thereon.

Based on our verification of Company’s books, papers, minute books, forms and returns filed and other records maintained by the

Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of

secretarial audit, we hereby report that in our opinion, the Company has during the audit period covering the financial year ended on

31st March, 2018 (‘Audit Period’) complied with the statutory provisions listed hereunder and also that the Company has proper Board -

processes and compliance - mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by IDFC ASSET

MANAGEMENT COMPANY LIMITED for the financial year ended on 31st March, 2018 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;

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the

company during the audit period)

(f) The Securities and Exchange Board of India (Registrars to an issue and Share Transfer Agents) Regulations, 1993 regarding the

Companies Act and dealing with client;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company

during the audit period)

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not Applicable to the Company during

audit period).



We have relied on the report of Internal Auditors placed at the Board Meeting and on the representations made by the Company, its

officers for systems and mechanisms developed by the Company in order to ensure compliances under the other applicable Acts, Laws

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

(i) The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended;

(ii) The Prevention of Money Laundering Act, 2002

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

(i) Secretarial Standards issued by The Institute of Company Secretaries of India;

(ii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; (Not Applicable to the Company during audit period).

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.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven

days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the

meeting and for meaningful participation at the meeting.

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

minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the

Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that, during the period under, there are no other specific events/actions in pursuance of the above referred laws, rules,

regulations, guidelines, etc. having a major bearing on the Company’s affairs.

For Kaushik M. Jhaveri & Co.,

Kaushik M. Jhaveri

Practising Company Secretary

FCS No.: 4254; CP No. : 2592




AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2018



i) CIN U65993MH1999PLC123191


iii) Name of the Company IDFC ASSET MANAGEMENT COMPANY LIMITED

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

Indian Non-Government Company

v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra.Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051



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



SR. NO.



1. Asset Management 66301 95.16


SR. NO.


% OF SHARES HELD

APPLICABLE SECTION

1 IDFC Limited L65191TN1997PLC037415 Ultimate Holding Indirectly 100 Section 2(46)

2 IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100 Section 2(46)

3 IDFC Investment Managers (Mauritius) Ltd. N.A. Subsidiary 100 Section 2(87)





% CHANGE DURING

THE YEAR



A. Promoters

(1) Indian



c) State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Bodies Corp. 2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% NIL


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

Sub-total (A) (1):- 2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% NIL




2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% NIL





% CHANGE DURING

THE YEAR






Grand Total (A+B+C) 2,679,039 6 2,679,045 100% 2,679,039 6 2,679,045 100% NIL


SR. NO.




DURING THE YEAR

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/


NO. OF SHARES

% OF TOTAL SHARES OF

THE COMPANY

%OF SHARES PLEDGED/


1 IDFC Financial Holding Company Limited & its nominees

2,679,045 100% NIL 2,679,045 100% NIL NIL

Total 2,679,045 100% NIL 2,679,045 100% NIL NIL

(iii) Change in Promoters’ Shareholding: NIL


NOT APPLICABLE


V. INDEBTEDNESS





SR. NO.


VIKRAM LIMAYE1 SUNIL KAKAR2 VISHWAVIR SARAN DAS

ANITA RAMACHANDRAN


Fee for attending board committee meetings 425,000 350,000 775,000

Commission NIL NIL

Others, please specify NIL NIL

Total (1) 425,000 350,000 775,000

2. Other Non-Executive Directors NIL NIL NIL

Fee for attending board committee meetings

Commission

Others, please specify

Total (2) NIL NIL NIL

Total (B) = (1 + 2) NIL NIL 425,000 350,000 775,000

Overall Ceiling as per the Act Within the ceiling limit1. Tendered his resignation w.e.f. July 15, 20172. Appointed as Nominee Director w.e.f. July 16, 2017








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

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




(c) be sustainable



(a) livelihoods



(d) education



(g) disaster relief


(i) Others

2. The Composition of the CSR Committee.

Mr. Sunil Kakar

Mr. Vishwavir Saran Das

Ms. Anita Ramachandran

3. Average net profit of the company for last three financial years ` 138.29 Cr

4. Prescribed CSR Expenditure (2% of the amount as in item 3. above) ` 2.77 Cr


a) Total amount to be spent for the financial year: ` 2.77 Cr

b) Amount spent during the year: ` 2.77 Cr




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

For IDFC Asset Management Company Limited

Place : Mumbai Sunil Kakar Vishwavir Saran DasDate : April 23, 2018 Chairman – CSR Committee Director

ANNEXURE IVCORPORATE SOCIAL RESPONSIBILITY (CSR)



` IN CRORE

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

SR. NO CSR PROJECT OR ACTIVITY IDENTIFIED

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


AMOUNT OUTLAY

(BUDGET)



(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.


0.33

0.06 0.19

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

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


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


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

Gujarat - 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

0.05 0.14

Total 0.33 0.20 0.70

5 Providing economic and affordable service delivery on water and sanitation to the community. Cl.(i) Sanitation & Safe Drinking water Odisha 0.05 0.02 0.05

Total 0.05 0.02 0.05

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

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

1.47

0.27 0.50

7 Financial inclusion through interoperable devices to improve access to basic banking & payments network services after providing financial literacy and digital skilling program under Rural Livelihoods & Development Program.


PAN India 2.33 2.47

Total 1.47 2.60 2.97

8 Research & studies on various programmes Various clauses of Schedule VII PAN India 0.92 0.58 1.54

Total 0.92 0.58 1.54



Total (A) + (B) 2.77 3.44 5.45



ANNEXURE ACORPORATE SOCIAL RESPONSIBILITY (CSR)



` IN CRORE

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

SR. NO CSR PROJECT OR ACTIVITY IDENTIFIED

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


AMOUNT OUTLAY

(BUDGET)



(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.


0.33

0.06 0.19

IMP

LE

ME

NT

ING

AG

EN

CY

- ID

FC

FO

UN

DA

TIO

N*

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


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


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

Gujarat - 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

0.05 0.14

Total 0.33 0.20 0.70

5 Providing economic and affordable service delivery on water and sanitation to the community. Cl.(i) Sanitation & Safe Drinking water Odisha 0.05 0.02 0.05

Total 0.05 0.02 0.05

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

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

1.47

0.27 0.50

7 Financial inclusion through interoperable devices to improve access to basic banking & payments network services after providing financial literacy and digital skilling program under Rural Livelihoods & Development Program.


PAN India 2.33 2.47

Total 1.47 2.60 2.97

8 Research & studies on various programmes Various clauses of Schedule VII PAN India 0.92 0.58 1.54

Total 0.92 0.58 1.54



Total (A) + (B) 2.77 3.44 5.45





TO THE MEMBERS OF IDFC ASSET MANAGEMENT COMPANY LIMITED


1. We have audited the accompanying financial statements of IDFC Asset Management Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its profit and its cash flows for the year ended on that date.

Other Matter






(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.







(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 knowledge and belief and according to the information and explanations given to us :

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018, on its financial position in its financial statements – Refer Note 31;




For Price Waterhouse & Co Chartered Accountants LLPFirm Registration Number: 304026E/E-300009Chartered Accountants





Referred to in paragraph 11(f) of the Independent Auditors’ Report of even date to the members of IDFC Asset Management Company Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC Asset Management Company Limited (“the

Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


















Referred to in paragraph 10 of the Independent Auditors’ Report of even date to the members of IDFC Asset Management Company Limited on the financial statements as of and for the year ended March 31, 2018


(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The Company does not own any immovable properties as disclosed in Note 10 on fixed assets to the financial statements. Therefore, the provisions of Clause 3(i)(c) of the said Order are not applicable to the Company.



iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act in respect of the loans or investments made, or guarantees or security provided by it. The Company has not granted any loans or provided any guarantees or security to parties covered under Section 185 of the Act and accordingly, provisions of Clause 3(iv) of the said Order, to this extent, are not applicable to the Company.




(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, service-tax, duty of customs, duty of excise, value added or goods and service tax tax which have not been deposited on account of any dispute. The particulars of dues of service tax, duty of customs, duty of excise, value added tax, goods and service tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:

NAME OF THE STATUTE NATURE OF DUES AMOUNT (`) PERIOD TO WHICH THE AMOUNT RELATES

FORUM WHERE THE DISPUTE IS PENDING

The Finance Act, 1994 Service Tax 14,987,548 April 2009 to March 2018 The Commissioner (Service Tax)viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any

debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.



xi. The Company has not paid any managerial remuneration during the year. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.











AS ATMARCH 31, 2018

AS ATMARCH 31, 2018

AS ATMARCH 31, 2017

NOTES ` ` `



(a) Share capital 4 26,790,450 26,790,450


2,045,370,525 2,234,089,197


(a) Other long-term liabilities 6 13,672,780 8,579,072

13,672,780 8,579,072

Current liabilities

(a) Trade Payable 7

total outstanding due of micro enterpirses and small enterprises

- -

total outstanding due of creditors other than micro enterprises and small enterprises

373,980,704 120,742,336



902,682,027 520,401,720

TOTAL 2,961,725,332 2,763,069,989

ASSETS

Non-current assets

(a) Fixed assets

Tangible assets 10 89,005,367 64,998,581


117,544,737 86,411,104

(b) Non-current investments 12 250,612,965 169,960,965

(c) Deferred tax assets (net) 13 34,127,956 25,485,000

(d) Long-term loans and advances 14 202,402,942 150,899,664

487,143,863 346,345,629

604,688,600 432,756,733

Current assets

(a) Current investments 15 1,999,597,224 2,164,520,826

(b) Trade receivables 16 127,688,639 84,825,111

(c) Cash and bank balances 17 36,021,408 21,574,863


2,357,036,732 2,330,313,256

TOTAL 2,961,725,332 2,763,069,989

Summary of significant accounting policies 3

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For Price Waterhouse & Co Chartered Accountant LLPChartered AccountantsFirm Registration No. 304026E/E-300009


Sharad VasantPartnerMembership No. 101119

Sunil KakarDirector


Nirav Shah Company Secretary

Rupesh AcharyaChief Financial Officer

Mumbai, April 27, 2018 Mumbai, April 23, 2018






Sunil KakarDirector






YEAR ENDED MARCH 31, 2018


NOTES ` `

I INCOME


Other income 19 154,101,666 176,653,484

TOTAL INCOME (I) 3,184,916,879 3,096,303,079

II EXPENSES


Depreciation and amortisation expense 9, 10 42,012,345 29,146,764

Other expenses 21 1,657,964,276 1,129,502,712


III PROFIT BEFORE TAX (I - II) 812,199,606 1,400,015,498

IV TAX EXPENSE

Current tax 276,000,000 457,800,000

Deferred tax (8,642,956) 4,102,000

Adjustment of tax relating to earlier periods - (34,700,693)

TOTAL TAX EXPENSE (IV) 267,357,044 427,201,307

V PROFIT FOR THE YEAR (III - IV) 544,842,562 972,814,191

Earning per equity share (Nominal value of share `10) 29

Basic 203.37 363.12

Diluted 203.37 363.12







` ` `

(A) CASH FLOW FROM OPERATING ACTIVITIES

PROFIT / (LOSS) BEFORE TAXATION 812,199,606 1,400,015,498

Adjustment for:

Add/(Less) : Depreciation and amortisation 42,012,345 29,146,764

Add/(Less) : Lease escalation charge 4,585,112 (776,012)

Add/(Less) : Loss on sale of Fixed assets (net of profit) 747,986 (322,460)

Add/(Less) : Interest on Bank Fixed Deposit - (323,273)

Add/(Less) : Profit on sale of current investments (152,093,551) (173,829,344)

Add/(Less) : Profit from trading in derivatives - (969,953)

Add/(Less) : Interest on income tax refund (1,901,788) (602,165)

Add/(Less) : Provision for diminution in value of investment in subsidiary

19,348,000 -

Operating profit before working capital changes 724,897,710 1,252,339,055


(Increase)/decrease in long term loans and advances (7,981,155) (31,263,109)

(Increase)/decrease in trade receivables (42,863,528) 25,963,019

(Increase)/decrease in short term loans and advances (134,337,005) 33,825,811

Increase/(decrease) in other current liabilities 156,025,776 251,320,165

Increase/(decrease) in other trade payable 253,238,368 (286,087,558)

Increase/(decrease) in short term provisions 791,614 (14,530,895)

Increase/(decrease) in other bank balance (16,775,338) (837,405)

208,098,732 (21,609,972)

Cash generated from/(used in) operations 932,996,442 1,230,729,083

Direct taxes paid (net of refund and interest thereon) (344,364,558) (377,129,361)

NET CASH FLOW FROM OPERATING ACTIVITIES (A) 588,631,884 853,599,722

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed asset including capital work-in-progress (74,835,725) (67,226,695)

Sale Proceeds from Fixed assets 941,762 518,592

Purchase of investments (3,510,735,441) (4,043,727,570)

Sale Proceeds on sale of investments 3,727,229,961 4,214,028,399

Proceeds from trading in derivatives - 969,953

Investments in Bank Fixed Deposit - (20,000,000)

Maturity of Bank Fixed Deposit - 20,323,273

NET CASH FLOW FROM INVESTING ACTIVITIES (B) 142,600,557 104,885,952

(C) CASH FLOW FROM FINANCING ACTIVITIES

Dividend paid (including dividend tax) (733,561,234) (983,455,722)

NET CASH FLOW FROM FINANCING ACTIVITIES (C) (733,561,234) (983,455,722)

Net increase/(decrease) in cash and cash equivalents (A + B + C) (2,328,793) (24,970,048)

Cash and cash equivalents as at beginning of the year (refer note 17)

17,600,030 42,570,078

Cash and cash equivalents as at end of the year (refer note 17) 15,271,237 17,600,030

(2,328,793) (24,970,048)

Notes:

The above cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 on Cash Flow Statements.





Sunil KakarDirector







01 BACKGROUNDIDFC Asset Management Company Limited (‘the Company’) is a public limited company, incorporated in India under the Companies Act, 1956 and regulated by The Securities Exchange Board of India (“SEBI”). The Company provides asset management services, portfolio management and investment advisory services.

02 BASIS OF PREPARATIONThe financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of services and the time between rendering of services and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities.


A. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. The differences between estimate and actual outcome are recognised in the Statement of Profit and Loss for the year in which it materialises.

B. INVESTMENTS

Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Long term investments are carried at acquisition cost. However, a provision is made for diminution other than temporarily determined on an individual basis.

Current investments are carried in the financial statement at lower of cost or fair value determined on an individual investment basis.

On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to Statement of Profit and Loss.

C. TANGIBLE FIXED ASSETS

Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition for the intended use, less accumulated depreciation and accumulated losses, if any. Gains or losses arising from derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Profit and Loss when asset is derecognised. Leasehold Improvements are shown at historical cost less accumulated depreciation.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the year during which such expenses are incurred.

The Company identifies and determines cost of each component/part of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of remaining asset.

D. DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciation on tangible fixed assets is provided on straight-line method, as per the useful life prescribed in schedule II to the Companies Act, 2013 except in case of assets costing less than `5,000 each, which are fully depreciated in the year of capitalization and vehicles and certain office equipments, in which case, life of asset has been internally assessed based on technical evaluation done by management’s expert.

¡ Computers for 3 years

¡ Servers and networks for 6 years

¡ Furniture for 10 years

¡ Office Equipment for 5 years



¡ Vehicle for 4 years

¡ Mobile for 2 years

¡ Leasehold improvements over the extended lease term or 5 years whichever is earlier.

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

E. INTANGIBLE ASSETS AND AMORTISATION

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets (Computer Software) are amortised over a period of three years on a straight line method. The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.

F. IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists or when annual impairment testing of an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and it’s value in use. The recoverable amount is determined for an individual asset unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted for their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risk specific to the asset. In determining net selling price, recent market transactions are taken into account. If available, If no such transaction can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations are recognised in the Statement of Profit and Loss, except for previously revalued tangible fixed assets, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognised in the revaluation reserve up to the amount of any previous revaluation. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount or the carrying amount that would have been determined net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the Statement of Profit and Loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.

G. REVENUE RECOGNITIONS

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

Asset management fees are recognised net of service tax on an accrual basis in accordance with terms of Investment Management Agreement entered into by the Company with IDFC AMC Trustee Company Limited and in accordance with SEBI guidelines.

Income from portfolio management and advisory services is recognised at price agreed in accordance with the arrangement with the customers.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Profit and Loss.

Dividends

Dividend income is recognised when the Company’s right to receive dividend is established at the reporting date.

H. FOREIGN CURRENCY TRANSACTIONS

Initial recognition

Foreign currency transactions are recorded in the reported currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transactions.

Conversion

Foreign currency monetary items are translated using the exchange rate prevailing at the reporting date. Non monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction. Non monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.



Exchange differences

Exchange differences on conversion or settlement of monetary assets/liabilities are recognised as income or as expenses in the period in which they arise.

I. OPERATING LEASES

Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Rental charges over the term of such leases, after taking into account the escalation clause, are charged to the Statement of Profit and Loss on a straight line basis over the extended lease term.

J. EXPENSE UNDER EMPLOYEE STOCK OPTION SCHEMES

During the financial year, the Company has constituted an Employee Stock Option Plan. The plan provides for grant of options to employees of the Company in a specific category to acquire equity shares of the Company that vest in a graded manner on meeting specified conditions and that are to be exercised within a specified period. Employee stock options granted are accounted under the ‘Intrinsic Value Method’ stated in the Guidance Note on Employee Share Based Payments issued by the Institute of Chartered Accountants of India (“ICAI”).

K. RETIREMENT AND OTHER EMPLOYEE BENEFIT

Retirement benefit in the form of provident fund, superannuation fund and pension fund is a defined contribution scheme and are charged to the Statement of Profit and Loss as they fall due, based on the amount of contribution required to be made. The Company has no obligation, other than the contribution payable to the provident fund, superannuation fund and pension fund.

If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment.

The Company operates a defined benefit plan for its employees, viz., gratuity in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. The cost of providing benefits under this plan is determined on the basis of actuarial valuation by an independent actuary at each year-end which is determined using the projected unit credit method. Actuarial gains and losses for defined benefit plans are recognised in full in the period in which they occur in the Statement of Profit and Loss.

Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Profit and Loss for the year.

L. PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.

M. INCOME TAX

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognised directly in equity, if any, is recognised in equity and not in the Statement of Profit and Loss.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity, if any, is recognised in equity and not in the Statement of Profit and Loss.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

N. CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.



O. CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of Cash Flow Statement comprises cash at bank, cash in hand, fixed deposits with an original maturity of three months or less.

P. EARNING PER SHARE

Basic earnings per share is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

Q. SEGMENT REPORTING

The Company’s primary business segments are reflected based on the principal business carried out, i.e. Asset Management Services, Investment Advisory and Portfolio Management Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.

04 SHARE CAPITAL



AUTHORISED SHARES




TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL 26,790,450 26,790,450

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



Outstanding at the beginning of the year 2,679,045 26,790,450 2,679,045 26,790,450


OUTSTANDING AT THE END OF THE YEAR 2,679,045 26,790,450 2,679,045 26,790,450


The Company has only one class of equity shares having a par value of `10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. During the year ended March 31, 2018, dividend of `227.5 per share (Previous year `305 per share) is paid 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 exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) Shares held by holding/ultimate holding company

Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:



IDFC Financial Holding Company Limited (of which 6 shares are held jointly with nominees)

2,679,045 26,790,450 2,679,045 26,790,450

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




2,679,045 100.00% 2,679,045 100.00%



(e) Proposed dividends on Equity shares:

The board proposed dividend on equity shares after the balance sheet date

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

On Equity shares of `10 each

Dividend per Equity Share 120.00 227.50

Amount of dividend proposed 321,485,400 609,482,738

Dividend tax thereon 66,084,539 124,078,496

The Board of Directors, in their meeting held on April 23, 2018 have proposed a final dividend of ` 120.00 per equity share (Previous year ` 227.50 per share). The proposal is subject to the approval of shareholders at the Annual General Meeting.

(f) Shares reserved for issue under options

Refer note 25 for details of shares to be issued under the Employee Stock Option Plan.



(`) (`)

(A) SECURITIES PREMIUM ACCOUNT

Opening balance 221,897,167 221,897,167

Add: Premium on issue of equity shares - -

Closing balance 221,897,167 221,897,167

(B) CAPITAL REDEMPTION RESERVE

Opening balance 197,925,000 197,925,000

Add: Transferred from Statement of Profit and Loss - -

Closing balance 197,925,000 197,925,000

(C) GENERAL RESERVE

Opening balance 345,611,000 345,611,000

Add: Transferred from Statement of Profit and Loss 97,281,500 -

Closing balance 442,892,500 345,611,000

(D) SURPLUS IN THE STATEMENT OF PROFIT AND LOSS

Opening balance 1,441,865,580 469,051,389


Less: Appropriations

General reserve 97,281,500 -

Dividend on equity shares 609,482,738 -

Tax on equity dividend 124,078,496 -

Total appropriations 830,842,734 -

Closing balance 1,155,865,408 1,441,865,580

TOTAL 2,018,580,075 2,207,298,747

06 OTHER LONG-TERM LIABILITIES


(`) (`)

Lease equalisation 13,672,780 8,579,072

13,672,780 8,579,072

07 TRADE PAYABLES


(`) (`)

Total outstanding dues of micro enterprises and small enterprises (refer note 32) and - -


(i) Others 373,980,704 120,742,336

373,980,704 120,742,336





(`) (`)

Lease equalisation 407,485 916,081

Statutory dues including provident fund and tax deducted at source 127,877,107 23,422,432

Employee benefits payable 243,038,451 172,786,904

Other payables 64,319,554 83,000,000

435,642,597 280,125,417



(`) (`)

Provision for gratuity 791,614 -

Other Provisions

Provision for income tax (Net of advance tax of ` 1,476,354,104; Previous year ` 1,449,087,248)

92,267,112 119,533,967

93,058,726 119,533,967

10 TANGIBLE ASSETS


BALANCE AS AT

APRIL 1, 2017

ADDITIONS DISPOSALS BALANCE AS AT MARCH 31,

2018

BALANCE AS AT APRIL 1,

2017


THE YEAR

ON DISPOSALS

BALANCE AS AT MARCH 31,

2018


2018

(`) (`) (`) (`) (`) (`) (`) (`) (`)

Leasehold improvements 83,398,264 19,366,285 19,330,642 83,433,907 79,412,342 3,378,429 19,269,316 63,521,455 19,912,452

Furniture and fixtures 22,365,413 3,935,316 5,788,250 20,512,479 16,068,178 2,922,007 4,424,387 14,565,798 5,946,681

Office equipment 54,115,413 11,464,068 245,715 65,333,766 46,421,078 5,097,800 242,466 51,276,412 14,057,354

Computers 84,890,439 16,818,096 586,414 101,122,121 51,367,937 11,909,794 586,414 62,691,317 38,430,804

Vehicles 23,124,779 3,907,129 1,131,605 25,900,303 9,626,192 6,486,331 870,296 15,242,227 10,658,076

TOTAL 267,894,308 55,490,894 27,082,626 296,302,576 202,895,727 29,794,361 25,392,879 207,297,209 89,005,367



2016


2017


2016


THE YEAR

ON DISPOSALS


2017


2017

(`) (`) (`) (`) (`) (`) (`) (`) (`)

Leasehold improvements 82,035,582 1,834,505 471,823 83,398,264 78,326,883 1,557,283 471,824 79,412,342 3,985,922

Furniture and fixtures 21,890,597 603,012 128,196 22,365,413 13,947,601 2,232,037 111,460 16,068,178 6,297,235

Office equipment 49,471,952 5,271,773 628,312 54,115,413 42,843,327 4,170,845 593,094 46,421,078 7,694,335

Computers 59,919,843 30,829,661 5,859,065 84,890,439 47,801,165 9,409,927 5,843,155 51,367,937 33,522,502

Vehicles 14,043,778 9,798,513 717,512 23,124,779 5,288,889 4,926,547 589,244 9,626,192 13,498,587

TOTAL 227,361,752 48,337,464 7,804,908 267,894,308 188,207,865 22,296,639 7,608,777 202,895,727 64,998,581

11 INTANGIBLE ASSETS


BALANCE AS AT APRIL

1, 2017


2018


2017

AMORTISATION CHARGE FOR

THE YEAR

ON DISPOSALS


2018


2018

(`) (`) (`) (`) (`) (`) (`) (`) (`)

Computer software 83,614,565 19,344,831 - 102,959,396 62,202,042 12,217,984 - 74,420,026 28,539,370

TOTAL 83,614,565 19,344,831 - 102,959,396 62,202,042 12,217,984 - 74,420,026 28,539,370


BALANCE AS AT APRIL

1, 2016


2017


2016

AMORTISATION CHARGE FOR

THE YEAR

ON DISPOSALS


2017


2017

(`) (`) (`) (`) (`) (`) (`) (`) (`)

Computer software 64,725,334 18,889,231 - 83,614,565 55,351,917 6,850,125 - 62,202,042 21,412,523

TOTAL 64,725,334 18,889,231 - 83,614,565 55,351,917 6,850,125 - 62,202,042 21,412,523



12 NON-CURRENT INVESTMENTS (TRADE, AT COST UNLESS STATED OTHERWISE)

FACE VALUE (`)


QUANTITY (NO. OF

SHARES/UNITS)

(`) QUANTITY (NO. OF

SHARES/UNITS)

(`)

Investments in Equity Instruments

In subsidiaries (unquoted)

IDFC Investment Managers (Mauritius) Limited 62 407,290 25,069,224 407,290 25,069,224

Less: Provision for diminution (19,348,000) -

5,721,224 25,069,224

In others (unquoted) (non-trade)

MF Utilities India Private Limited 1 500,000 500,000 500,000 500,000

500,000 500,000

Investment in Preference Shares (unquoted) (non-trade)

0% Moser Baer Solar Limited (optionally convertible) 10 61,290,000 500,000 61,290,000 500,000

500,000 500,000

Investments in Venture Capital Units (unquoted)

IDFC Spice Fund 1 10,000 10,000 10,000 10,000

10,000 10,000

Investments in Alternate Investment Fund Units (unquoted)

IDFC IEH Conservative Fund 100 1,000,000 100,000,000 -

100,000,000 -

Investment in mutual funds (quoted)

IDFC Yearly series Interval Fund-Series II-Growth-Direct Plan 417,199 5,000,000 417,199 5,000,000

IDFC Nifty ETF 12,072 1,049,767 12,072 1,049,767

IDFC Sensex ETF 3,741 1,049,974 3,741 1,049,974

7,099,741 7,099,741


IDFC Super Saver Income Fund-Medium Term Plan-Growth-Direct Plan 241,765 5,000,000 241,765 5,000,000

IDFC Dynamic Bond Fund-Growth-Direct Plan 348,029 5,000,000 348,029 5,000,000

IDFC Dynamic Equity Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

IDFC Government Securities Fund-Provident Fund-Growth-Direct Plan 204,552 5,000,000 204,552 5,000,000

IDFC Classic Equity Fund-Growth-Direct Plan 156,504 5,000,000 156,504 5,000,000

IDFC Premier Equity Fund-Growth-Direct Plan 68,914 5,000,000 68,914 5,000,000

IDFC Imperial Equity Fund-Growth-Direct Plan 180,629 5,000,000 180,629 5,000,000

IDFC Equity Fund-Growth-Direct Plan 204,679 5,000,000 204,679 5,000,000

IDFC Arbitrage Fund-Growth-Direct Plan 268,680 5,000,000 268,680 5,000,000

IDFC Sterling Equity Fund-Growth-Direct Plan 137,398 5,000,000 137,398 5,000,000

IDFC Arbitrage Plus Fund-Growth-Direct Plan 216,200 3,540,000 216,200 3,540,000

IDFC Tax Advantage (ELSS) Fund-Growth-Direct Plan 124,904 5,000,000 124,904 5,000,000

IDFC Asset Allocation Fund of Fund-Conservative Plan-Growth-Direct Plan 79,529 1,280,000 79,529 1,280,000

IDFC Asset Allocation Fund of Fund-Moderate Plan-Growth-Direct Plan 215,738 3,720,000 215,738 3,720,000

IDFC Asset Allocation Fund of Fund-Aggressive Plan-Growth-Direct Plan 201,531 3,610,000 201,531 3,610,000

IDFC Monthly Income Plan-Growth-Direct Plan 296,653 5,000,000 296,653 5,000,000

IDFC Nifty Fund-Growth-Direct Plan 98,659 1,620,000 98,659 1,620,000

IDFC Infrastructure Fund-Growth-Direct Plan 423,920 4,970,000 423,920 4,970,000

IDFC Banking Debt Fund-Growth-Direct Plan 414,120 5,000,000 414,120 5,000,000

IDFC Money Manager Fund-Investment Plan-Growth-Direct Plan 228,005 5,000,000 228,005 5,000,000

IDFC All Seasons Bond Fund-Growth-Direct Plan 110,773 2,430,000 110,773 2,430,000

IDFC Ultra Short Term Fund-Growth-Direct Plan 253,691 5,000,000 253,691 5,000,000



FACE VALUE (`)


QUANTITY (NO. OF

SHARES/UNITS)

(`) QUANTITY (NO. OF

SHARES/UNITS)

(`)

IDFC Government Securities Fund-Investment Plan-Growth-Direct Plan 295,440 5,000,000 295,440 5,000,000

IDFC Cash Fund-Growth-Direct Plan 2,921 5,000,000 2,921 5,000,000

IDFC Money Manager Fund-Treasury Plan-Growth-Direct Plan 224,028 5,000,000 224,028 5,000,000

IDFC Government Securities Fund-Short Term Plan-Growth-Direct Plan 30,313 612,000 30,313 612,000

IDFC Super Saver Income Fund-Investment Plan-Growth-Direct Plan 143,738 5,000,000 143,738 5,000,000

IDFC Super Saver Income Fund-Short Term Plan-Growth-Direct Plan 171,318 5,000,000 171,318 5,000,000

IDFC Corporate Bond Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

IDFC Balanced Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

IDFC Credit Opportunities Fund-Growth-Direct Plan 500,000 5,000,000 500,000 5,000,000

136,782,000 136,782,000

TOTAL NON-CURRENT INVESTMENTS 250,612,965 169,960,965


Cost 7,099,741 7,099,741

Market value (Net asset value) 8,838,272 8,161,198

Aggregate amount of unquoted investments 243,513,224 162,861,224

Aggregate provision for diminution in value of investments 19,348,000 -

13 DEFERRED TAX ASSET (NET)


(`) (`) (`) (`)

Deferred tax asset

(a) Provisions: Lease equalisation 4,873,000 3,286,000

(b) Fixed assets: Impact of difference between tax depreciation and depreciation / amortisation charged for the financial reporting 22,559,000 22,199,000

(c) Provisions: Diminution in investments 6,695,956 -

34,127,956 25,485,000

DEFERRED TAX ASSET (NET) 34,127,956 25,485,000

14 LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)


(`) (`) (`) (`)


Advances to employees - 706,000 - 1,586,254

Other advances - 522,631 - -

Security deposits 111,529,181 23,854,375 106,080,335 982,975

Capital/supplier advances 4,030,850 44,168,996 633,715 10,779,109

Gratuity receivable (read with note 24) - 156,899 - 915,171

Other loans and advances

Advance tax (Net of provision of `679,761,867; Previous year `846,130,738)

85,065,408 - 42,065,917 -

Fringe benefit tax (Net of provision `13,053,367; Previous year `13,053,367)

86,646 - 86,646 -

Balances with government authorities - Input credit receivable - 110,729,922 - 27,712,493

Prepaid expenses 1,690,857 13,590,638 2,033,051 17,416,454

202,402,942 193,729,461 150,899,664 59,392,456

12 NON-CURRENT INVESTMENTS (TRADE, AT COST UNLESS STATED OTHERWISE) (continued)



15 CURRENT INVESTMENTSAS AT MARCH 31, 2018 AS AT MARCH 31, 2017

QUANTITY (`) QUANTITY (`)


IDFC Yearly series Interval Fund-Series II-Growth-Direct Plan 364,480 5,500,000 - -

IDFC Fixed Term Plan Series 66-Growth-Direct Plan 5,836,945 58,369,447 5,836,945 58,369,447

IDFC Fixed Term Plan Series 74-Growth-Direct Plan 3,000,000 30,000,000 3,000,000 30,000,000

IDFC Fixed Term Plan Series 78-Growth-Direct Plan - - 6,000,000 60,000,000

IDFC Fixed Term Plan Series 97-Growth-Direct Plan - - 2,750,000 27,500,000

93,869,447 175,869,447

Investment in mutual funds (quoted)

IDFC Dynamic Bond Fund-Growth-Direct Plan 41,606,806 709,865,435 50,226,198 816,792,099

IDFC Cash Fund-Growth-Direct Plan 272,694 566,384,973 240,145 471,859,280

IDFC Corporate Bond Fund-Growth-Direct Plan 20,000,000 200,000,000 20,000,000 200,000,000

IDFC Arbitrage Fund-Growth-Direct Plan - - 27,112,033 500,000,000

IDFC Banking and PSU Debt Fund-Growth-Direct Plan 27,685,110 400,000,000 - -

IDFC Cash Fund-Daily Dividend-Direct Plan* 1,443 1,445,596 - -

1,877,696,004 1,988,651,379

*Investments held in Portfolio Management Scheme under IDFC Neo Equity Portfolio

Investments in Equity Instruments (quoted)*

Jubilant Foodworks Limited 726 1,297,965 - -

Britannia Industries Ltd 311 1,450,833 - -

Hindustan Unilever Ltd 1,150 1,421,641 - -

Procter AND Gamble Hygiene and Health Care Ltd 160 1,384,208 - -

Ashok Leyland Ltd 10,362 1,526,324 - -

HCL Technologies Ltd 1,555 1,491,967 - -

Maruti Suzuki India Ltd 169 1,575,761 - -

Gillette India Ltd 228 1,366,685 - -

MphasiS Ltd 1,770 1,249,017 - -

Reliance Industries Ltd 1,630 1,536,204 - -

City Union Bank Ltd 8,291 1,480,258 - -

Mindtree Ltd 1,846 1,503,870 - -

Titan Co Ltd 1,479 1,313,020 - -

GlaxoSmithkline Consumer Healthcare Ltd 220 1,467,036 - -

Divis Laboratories Ltd 1,099 1,187,951 - -

Tech Mahindra Ltd 1,857 1,174,837 - -

Cholamandalam Investment and Finance Company Ltd. 775 1,137,947 - -

Balkrishna Industries Ltd 890 1,015,165 - -

Avenue Supermarts Ltd 700 953,708 - -

Voltas Ltd 1,452 909,319 - -

Tata Consultancy Services Ltd 296 834,998 - -

Info Edge (India) Ltd 594 753,059 - -

28,031,773 -

*Investments held in Portfolio Management Scheme under IDFC Neo Equity Portfolio

TOTAL CURRENT INVESTMENTS 1,999,597,224 2,164,520,826


Cost 121,901,220 175,869,447

Market value 158,510,879 229,123,222

Aggregate amount of unquoted investments 1,877,696,004 1,988,651,379



16 TRADE RECEIVABLES (UNSECURED, CONSIDERED GOOD)


(`) (`) (`) (`)


Outstanding for a period less than six months - 127,688,639 - 84,825,111

- 127,688,639 - 84,825,111



(`) (`) (`) (`)




In current accounts - 15,271,237 - 17,600,030

Other bank balances:

Balance for Investor Education Awareness on behalf of IDFC Mutual Fund

- 20,750,171 - 3,974,833

- 36,021,408 - 21,574,863


YEAR ENDEDMARCH 31, 2018


(`) (`)

Management fees 2,984,507,755 2,840,322,398

Portfolio management fees 44,512,393 58,286,640

Advisory fees 1,795,065 21,040,557

3,030,815,213 2,919,649,595

19 OTHER INCOME



(`) (`)

Interest on income tax refund 1,901,788 602,165

Other interest - 559,148

Net gain/loss on sale of current investments 152,093,551 173,829,344

Profit from trading in derivatives - 969,953

Profit on sale of fixed assets (net) - 322,460

Miscellaneous income 106,327 370,414

154,101,666 176,653,484




(`) (`)

Salaries and bonus (refer note (a) below) 610,726,191 478,418,351

Contribution to provident and other funds (refer note 24) 24,821,378 21,340,645

Gratuity 17,480,528 23,814,699


672,740,652 537,638,105



21 OTHER EXPENSES



(`) (`)

Rent (refer note 28) 124,456,685 111,100,296

Rates & taxes 11,990,615 7,840,468

Electricity 12,974,759 12,737,360


Equipments 9,071,523 7,541,263

Others 44,936,548 40,143,765

Insurance charges 826,816 900,251



Communication costs 43,653,203 39,786,299

Advertising, publicity and promotion 243,716,736 51,728,334

Listing & rating Fees 1,075,496 119,176


Directors' sitting fees 775,000 675,000

Membership and subscription 50,392,907 47,702,795

Computer Software Expenses 28,076,101 23,332,652

Auditors' remuneration (refer note (a) below) 2,523,638 2,389,007

Scheme issue expenses (refer note (b) below) 8,617,137 48,806,106

Shared service cost (refer note (c) below) 10,485,538 24,006,662

Operational costs (refer note (d) below) 808,544,147 498,278,017

Contribution to IDFC Foundation towards corporate social responsibility expenses 27,657,500 27,464,000

Loss on sale of fixed assets (net) 747,986 -

Miscellaneous expenses 10,599,239 9,189,710

Provisions for diminution in value of investments 19,348,000 -

1,657,964,276 1,129,502,712




(`) (`)

Audit fee 1,680,000 1,480,000

Tax audit fee 300,000 300,000



2,523,638 2,389,007

(b) Scheme issue expenses are the expenses incurred by the Company towards launching of schemes and plans of IDFC Mutual Fund during the year.

(c) Shared service cost represents reimbursement to holding company/fellow subsidiary under a shared service agreement (Net of recoveries `87,20,618; Previous year `250,287)

(d) Operational costs amongst other include expenses which are incurred by schemes of IDFC Mutual Fund (the “Fund”) over and above the expense limits prescribed by SEBI, interest charged by bank to the Fund on account of temporary borrowings or overdrafts and payments made to investors of the Fund on account of delay in payment of redemption proceeds which are borne by the Company.

(e) Expenses incurred on behalf of schemes of the Fund are charged to the Statement of Profit and Loss unless considered recoverable from schemes.



22 EXPENDITURE IN FOREIGN CURRENCIES (ON ACCRUAL BASIS)



(`) (`)

Advertising - Media 12,097 54,529

Foreign travel 52,205 77,811

Staff Training 1,087,458 159,986

Other professional fees 894,238 2,176,896

Membership and Subscription 1,684,891 -

23 EARNINGS IN FOREIGN CURRENCIES (ON ACCRUAL BASIS)



(`) (`)

Advisory Fees - Natixis Asia Asset Management Limited (formerly Absolute Asia Asset Management Limited)

- 21,040,557

24 In accordance with Accounting Standard 15 on ‘Employee Benefits’ the following disclosures have been made:

i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

Provident fund 20,203,243 17,641,861


Pension fund 3,435,987 2,668,815

Labour welfare fund 692 1,466

ii. The details of the Company’s post - retirement gratuity benefit plans for gratuity for its employees are given below which are certified by the actuary:

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

CHANGE IN THE DEFINED BENEFIT OBLIGATIONS:

Liability at the beginning of the year 77,446,995 63,355,202


Interest cost 6,056,763 5,602,591

Liabilities assumed on acquisition / (settled on divestiture) 40,326 2,439,594

Benefits paid (7,639,073) (14,172,845)

Actuarial Losses / (Gain) 2,867,774 8,866,422

Past Service Cost 14,360 -

Closing Defined Benefit Obligation 91,842,602 77,446,995

Unrecognised Past Service Cost - -


FAIR VALUE OF PLAN ASSETS:



Contributions 40,503,613 14,530,896

Benefits paid (7,639,073) (14,172,845)

Actuarial gain / (loss) on plan assets 471,425 26,848


Total actuarial loss / (gain) to be recognised 2,396,349 8,839,574



MARCH 31, 2018 MARCH 31, 2017

(`) (`)

ACTUAL RETURN ON PLAN ASSETS:


Actuarial gain / (loss) on plan assets 471,425 26,848


AMOUNT RECOGNISED IN THE BALANCE SHEET:


Fair value of plan assets at the end of the year (91,050,988) (53,632,296)

Amount recognised in the balance sheet under "Provision for employee benefits" 791,614 *23,814,699

Amount receivable recognised in the balance sheet under "Loans and advances" (156,899) (915,171)

EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT AND LOSS:


Interest cost 6,056,763 5,602,591


Net actuarial loss / (gain) to be recognised 2,396,349 8,839,574

Past Service Cost 14,360 -

Loss/(Gains) on Acquisition / Divestiture 40,326 2,439,594

Expense recognised in the statement of profit and loss under 'Employee benefits expense' 17,480,528 23,814,699

RECONCILIATION OF THE LIABILITY RECOGNISED IN THE BALANCE SHEET:

Opening net liability 23,814,699 14,530,896

Expense recognised 17,480,528 23,814,699

Contribution by the Company (40,503,613) (14,530,896)

Amount recognised in the balance sheet under "Gratuity" 791,614 23,814,699

Expected employer's contribution next year 12,000,000 12,000,000

* This amount represents liability as per the actuarial valuation report, however the same was paid on March 31, 2017. This amount was not included in fair value of plan assets as on March 31, 2017 as confirmed by HDFC Standard Life Insurance Company Limited but subsequently included in contribution of current year. Hence, the liability recongised in the Balance Sheet under “Provision for employee benefits” as on March 31, 2017 is Nil.



(`) (`) (`) (`) (`)


Plan assets 91,050,988 53,632,296 48,824,306 46,642,243 32,116,168

Surplus/(deficit) (791,614) (23,814,699) (14,530,896) (1,111,414) (2,713,038)

Exp. Adj. on Plan Liabilities 7,972,139 4,398,497 5,998,246 2,320,620 3,130,977

Exp. Adj. on Plan Assets 471,425 26,848 (524,771) 1,091,871 (753,684)

MARCH 31, 2018 MARCH 31, 2017

(%) (%)

Investment pattern:

Insurer managed funds 100.00 100.00

Principal assumptions:

Discount rate (p.a.) 7.95 7.10

Expected rate of return on assets (p.a.) 7.50 7.50

Salary escalation rate (p.a.) 8.00 8.00

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



25 EMPLOYEE STOCK OPTIONS

During the financial year, the Company has constituted an Employee Stock Option Scheme-2017 (“ESOSAMC-2017”) which provides for grant of equity shares to eligible employees of the Company as decided by Nomination and Remuneration Committee (NRC). This ESOSAMC – 2017 has been formulated by NRC at its meeting held on August 9, 2017 and the same is approved by the Board of Directors at its meeting held on August 9, 2017 and subsequently by the Shareholders of the Company vide special resolution at their Extra-Ordinary General Meeting held on September 7, 2017.

The maximum aggregate number of employee stock option that may be awarded under this scheme during one year are equivalent to or not exceeding 2% of issued equity share capital (excluding outstanding warrants and conversions) of the Company.

During the year ended March 31, 2018, the Company made a grant of 44,389 stock options on various dates during the year. The options granted under ESOSAMC-2017 would vest in a graded manner from one to three years from the date of General meeting for approval of ESOSAMC-2017. The vesting of options would be a function of continued employment with the Company (passage of time) and on achievement of performance criteria as specified by the NRC as communicated on grant of options. The options granted can be excercised within a maximum period of five years from the date of vesting. In accordance with the Guidance Note on Employee Share Based Payments issued by the Institute of Chartered Accountants of India using the intrinsic value method, the intrinsic value of the grant is amortized on a straight-line basis over the vesting period. The intrinsic value is Nil for March 31, 2018.

The activity in ESOSAMC-2017 during the year ended March 31, 2018 is set out below:

PARTICULARS YEAR ENDED MARCH 31, 2018

ESOSAMC-2017 SHARES ARISING OUT OF OPTIONS

WEIGHTED AVERAGE EXERCISE PRICE

WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE

Outstanding at the beginning of the year - - -

Granted during the year 44,389 9,646.93 7.47

Forfeited/Expired during the year - - -

Exercised during the year - - -

Outstanding at the end of the year 44,389 9,646.93 7.47

Exercisable at the end of the year - - -

The fair value for the above impact analysis is estimated on the date of grant using the Black-Scholes model with the following assumptions:

PARTICULARS YEAR ENDEDMARCH 31, 2018

Weighted average fair value of an Option 1,997.82

Exercise price (`) 9,646.93

Expected volatility (%) 0.49%

Expected life of the option (years) 5.51

Expected dividends (%) 2.36%

Risk-free interest rate (%) 6.62%

Had the Company followed the fair value method for accounting of employee stock options, the impact of fair value method on net profit and earning per share would have been as follow:

PARTICULARS YEAR ENDEDMARCH 31, 2018

Net Profit (as reported) 544,842,562

Less: Impact of Incremental cost under fair value approach 16,047,444

Net Profit: (pro-forma) 528,795,118

Basic earnings per share (as reported) (in `) 203.37

Basic earnings per share (pro-forma) (in `) 197.38

Diluted earnings per share (as reported) (in `) 203.37

Diluted earnings per share (pro-forma) (in `) 197.38

26 The Company is engaged in the business of providing Asset Management Services to IDFC Mutual Fund, Investment Advisory and Portfolio Management Services which contributes a single reportable business segment. During the year ended March 31, 2018, the Company was engaged in only one business segment and as such there are no separate reportable segments, as required by Accounting Standard 17 on ‘Segment Reporting’. The Company’s revenue are primarily from services rendered in India.



27 RELATED PARTY DISCLOSURESAs per the Accounting Standard 18 on “Related Party Disclosures” the related parties of the Company are as follows:

I. Ultimate Holding Company:

IDFC Limited

II. Holding Company:

IDFC Financial Holding Company Limited*

III. Subsidiaries:


IV. Fellow Subsidiaries


IDFC Foundation

IDFC Bank Limited



IDFC Infrastructure Finance Company Limited

V. Mutual Fund managed by the Company

IDFC Mutual Fund

VI. Alternate Investment Fund managed by the Company

IDFC IEH Conservative Fund

VII. Venture Capital managed by the Company

IDFC Spice Fund

VIII. Key management personnel:

Mr. Vishal Kapoor - Chief Executive Officer (w.e.f. September 14, 2016)

Mr. Kalpen Parekh - Chief Executive Officer (upto September 13, 2016)*

Mr. Sunil Kakar - Associate Director*

*No transaction during the year

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

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

I. Holding Company/Ultimate Holding Company:

IDFC Limited Reimbursement of expenses 30,972,097 35,259,285

Shared service cost paid (net of recovery) 4,761,884 2,938,263

Recovery of expenses / cost of asset 181,779 710,809

II. Subsidiaries:

IDFC Investment Managers (Mauritius) Limited Provision for diminution 19,348,000 -

Outstanding investments as at year end 5,721,224 25,069,224

III. Fellow Subsidiaries:

IDFC AMC Trustee Company Limited Recovery of expenses 91,829 134,236

IDFC Foundation CSR Contribution 27,657,500 27,464,000

Recovery of expenses 407,629 414,111

IDFC Bank Limited Reimbursement of expenses 698,025 681,792

Shared service cost paid 14,316,916 21,302,000

Recovery of expenses 1,205,973 1,868,449

Balance receivable -

Current Account Balance 8,572,492 4,634,160

Current Account Balance (Investor Education and Awareness)

20,750,171 3,974,833



MARCH 31, 2018 MARCH 31, 2017

(`) (`)

IDFC Alternatives Limited Shared Services Cost Recovered 534,599 91,771

Recovery of expenses / cost of asset 1,809,054 3,260,866

IDFC Securities Limited Brokerage Paid - 78,313

Shared Services Cost Recovered 7,905,621 125,144

Recovery of expenses / cost of asset 2,114,749 3,708,127

IDFC Infrastructure Finance Company Limited Shared Services Cost Recovered 153,043 16,686

Recovery of expenses 457,236 685,110

IV. Mutual Fund

IDFC Mutual Fund Revenue from management fees 2,984,507,755 2,840,322,398

Reimbursement of expenses 283,296,925 105,963,731

Advance Trail brokerage 196,937,558 -

Purchase of investments 3,380,735,441 4,043,727,570

Sale Proceeds on sale of investments 3,727,229,961 4,214,028,399

Outstanding receivable as at year end (net) 58,319,717 -

Outstanding payable as at year end (net) - 11,504,638

Outstanding investments as at year end 2,115,447,192 2,308,402,567

V. Alternative Investment Fund

IDFC IEH Conservative Fund Revenue from management fees 475,444 -

Recovery of other expenses 158,769 -

Outstanding receivable as at year end 512,382 -

Outstanding investments as at year end 100,000,000 -

VI. Venture Capital Revenue from portfolio management fees 43,851,876 55,734,192

IDFC Spice Fund Outstanding investments as at year end 10,000 10,000

VII. Key Management Personnel:

Mr. Vishal Kapoor - Chief Executive Officer (w.e.f. September 14, 2016)

Remuneration paid 37,532,149 13,423,281

Reimbursement of business expenses 86,435 56,584

Mr. Kalpen Parekh - Chief Executive Officer (upto September 13, 2016)

Remuneration paid - 22,940,271

Reimbursement of business expenses - 213,554

28 In accordance with Accounting Standard 19 on ‘Leases’ the following disclosures in respect of operating leases are made:

i The Company has entered into cancellable as well as non-cancellable leasing arrangements for office premises at various locations in India generally for a period of 36 months. As per the term of the lease all maintenance charges and municipal levies are borne by the lessee. The rent expense recognised during the year is ` 124,456,685 (Previous year ` 111,100,296).

The total future minimum lease payments under non-cancellable operating lease for each of the periods is given below:

MARCH 31, 2018 MARCH 31, 2017

(`) (`)



The terms of renewal and escalation clauses are those normally prevalent in similar agreements.


The basic / diluted earnings per share has been calculated based on the following:

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

Basic

Net profit after tax 544,842,562 972,814,191

Net amount available for equity shareholders A 544,842,562 972,814,191

Weighted average number of equity shares (Nos.) B 2,679,045 2,679,045

Basic and diluted earnings per equity share (`) A/B 203.37 363.12

*There is no dilution on account of potential equity shares pertaining to employee stock option granted during the year ended March 31, 2018.



30 CAPITAL AND OTHER COMMITMENTSEstimated amount of contracts remaining to be executed and not provided for `21,891,758/- (Previous year `17,085,540).

31 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:

MARCH 31, 2018 MARCH 31, 2017

(`) (`)

(a) Claims not acknowledged as debts in respect of :

Reversal of Cenvat credit under protest. 14,987,548 13,033,744

32 DISCLOSURES RELATING TO SPECIFIED BANK NOTES (“SBNS”)*

(a) The disclosures relating to Specified Bank Notes (“SBN”) is not applicable to the Company during the year.

(b) In previous year, the Company did not held and transacted in Specified Bank Notes (“SBN”) during the period Novemebr 08, 2016 to December 30, 2016.


33 As per information available with the Company, there are no micro, small or medium enterprises as defined in ‘The Micro, Small and Medium Enterprises Development Act, 2006’, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding micro, small and medium enterprises have been determined to the extent such parties have been identified on the basis of information available with the Company.

34 CORPORATE SOCIAL RESPONSIBILITY (CSR)

(a) As per the provisions of the Section 135 of the Companies Act, 2013, the Company is required to contribute `27,657,459 (Previous year `27,463,135) during the financial year towards Corporate Social Responsibility.

(b) The Company has contributed `27,657,500 (Previous year `27,464,000) to IDFC Foundation during the year and recognised as expense in the Statement of Profit and Loss on CSR related activities, which comprise of following:

PARTICULARS YEAR ENDED MARCH 31, 2018 YEAR ENDED MARCH 31, 2017

IN CASH YET TO BE PAID IN CASH

TOTAL IN CASH YET TO BE PAID IN CASH

TOTAL

i. Construction/acquisition of any asset - - - - - -

ii. On purposes other than (i) above 27,657,500 - 27,657,500 27,464,000 - 27,464,000

35 NET DIVIDEND REMITTED IN FOREIGN EXCHANGE

YEAR OF REMITTANCE (ENDING ON) MARCH 31, 2018 MARCH 31, 2017

Period to which it relates April 01, 2016 to March 31, 2017

April 01, 2015 to March 31, 2016

Number of non-resident shareholders - 1

Number of equity shares held on which dividend was due - 669,762

Amount remitted (in USD) - 3,022,749

Amount remitted (in INR) - 204,277,410

36 The figures for the previous year have been regrouped wherever necessary, in order to make them comparable to the current year.


Sunil KakarDirector


Mumbai, April 23, 2018Nirav Shah Company Secretary


IDFC INVESTMENT MANAGERS (MAURITIUS) LTD.

Mr. Sahjahan Ally Nauthoo

Mr. Sevin Chendriah

Ernst & Young

Deutsche Bank

(Mauritius) Limited

C/o Cim Fund Services Ltd

33, Edith Cavell Street

Port Louis, Mauritius

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE

I D F C I N V E S T M E N T M A N A G E R S ( M A U R I T I U S ) L I M I T E D | 3 0 9

CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2018

GENERAL INFORMATION

IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 as a private company limited

by shares and holds a Category 1 Global Business Licence Company issued by the Financial Services Commission. The Company is

licenced to operate as a CIS Manager pursuant to Section 98 of the Securities Act 2005 and the Financial Services (Consolidated

Licensing and Fees) Rules 2008.

The principal activity of the Company is to provide investment management services.

In 2015, the Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (“IMAFL”), a

fund incorporated in Mauritius on 22 May 2015.

The Company holds standards of corporate governance through awareness of business ethics and supervision of its management

team by the Board of directors.

The main objects and functions of the Board as regards Corporate Governance are to:

¡ determine, agree and develop the Company’s general policy on corporate governance in accordance with the applicable Code of

Corporate Governance;

¡ select candidates for eventual Board appointments; and

¡ review the terms and conditions of all service agreements between the Company and service providers.

The Board is satisfied that it has discharged its responsibilities for the year in respect of Corporate Governance.

THE BOARD OF DIRECTORS

The directors have been selected based on their professional background and expertise to positively contribute to the Board’s

activities. The Board is currently made up of two resident directors.

DIRECTORS

Resident


Mr. Sevin Chendriah

The Board is responsible for directing the affairs of the Company in the best interests of shareholders, in conformity with legal and

regulatory framework, and consistent with its constitution and best governance practices.

THE DIRECTORS’ PROFILE


Mr Nauthoo is a Fellow of the Association of Chartered Certified Accountants - UK and holds a Bachelor of Business Science (Hons)

degree in the field of Accountancy with the University of Mauritius. He is also a Member of the Mauritius Institute of Professional

Accountants and Mauritius Institute of Directors.

He has over 12 years of experience in the global business sector and 2 years of experience in the field of banking and finance. He has

gained wide experience in the structuring, setting up and administration including secretarial, accounting, taxation and compliance of

offshore funds and companies. He serves as director and authorised signatory for a large number of funds/ companies administered

by SGG Mauritius. He is currently a Senior Manager and prior to joining SGG Mauritius, he also worked for 5 years with SANNE

(formerly International Financial Services Limited).

Mr. Sevin Chendriah

Mr. Chendriah holds a BSC (Hons) in Management with Finance from the University of Mauritius. He joined SGG Mauritius in 2007 and

has gained wide experience in corporate secretarial, administration, compliance and legal field. He has also been broadly involved in

the structuring, setting-up, taxation and administration of Global Business entities promoted by a wide portfolio of clients, including

large multi-national Companies and high net-worth individuals.

CONSTITUTION

The Constitution of the Company was adopted on 19 August 2010 and same was subsequently altered on 26 December 2014 to insert

a clause on Arbitration.

BOARD MEETINGS

The Board has at least one scheduled meeting each year during which it:

1. examines all statutory matters;

2. approves the audited financial statements and reviews important accounting issues;


CORPORATE GOVERNANCE REPORT FOR THE YEAR ENDED 31 MARCH 2018

3. reviews the Company’s performance;

4. ensures compliance of the Company with the legislations; and

5. takes note of changes in the legislations which may affect the Company.

In addition, the Board meets whenever necessary to discuss urgent business.

The Board papers are usually sent to the directors one week in advance, except where urgent meetings are convened.

During the year under review, the Board met five times and the table below shows the attendance of directors either physically or by

alternates at meetings held from 01 April 2017 to 31 March 2018:

Directors Attendance at Board

Mr. Sevin Chendriah 5/5

Mr. Sahjahan Ally Nauthoo 5/5

The Board promotes, encourages and expects open and frank discussions at meetings. Board meetings provide a forum for

challenging and constructive debate.

BOARD COMMITTEES

The Board of directors collectively considers the measures in respect of the Code of Corporate Governance issues. Due to the size

of the Board, no sub-committees (Audit Committees, The Corporate Governance Committee, Board Risk Committee, Remuneration

Committee and the Nomination Committee) have been established.

STATEMENT OF REMUNERATION POLICY

SGG Fund Services (Mauritius) Ltd is paid USD 8,000 per annum for fee provision of directorship services.

IDENTIFICATION OF KEY RISKS FOR THE COMPANY

The Board is ultimately responsible for the Company’s system of internal control and for reviewing its effectiveness. The Board

confirms that there is an ongoing process for identifying, evaluating and managing the various risks faced by the Company.

FINANCIAL RISK FACTORS

The financial risk factors have been set out in note 13 of these audited financial statements.


The related party transactions have been set out in note 12 of these audited financial statements.

CODE OF ETHICS, HEALTH AND SAFETY AND SOCIAL ISSUES

These issues are not applicable to the Company given the nature of activities of the Company and the fact that the Company has no

employees. The Company is managed under service agreements with third parties.

ENVIRONMENT

Due to the nature of its activities, the Company has no adverse impact on the environment.

CORPORATE SOCIAL RESPONSIBILITY AND DONATIONS

During the year, the Company has not made any donations.

NATURE OF BUSINESS


AUDITOR’S REPORT AND FINANCIAL STATEMENTS

The auditor’s report is set out on pages 8 to 10 and the statement of profit or loss and other comprehensive income is set out on page

12 of this audited financial statements.

AUDIT FEES

Audit fees payable to Ernst & Young for the year amounted to USD 5,300 (excluding VAT and any disbursements).

APPRECIATION

The Board expresses its appreciation and gratitude to all those involved for their contribution during the year.


COMMENTARY OF DIRECTORS FOR THE YEAR ENDED 31 MARCH 2018

The directors are pleased to present their commentary, together with the audited financial statements of IDFC Investment Managers

(Mauritius) Ltd. for the year ended 31 March 2018.

STATUS AND PRINCIPAL ACTIVITY

IDFC Investment Managers (Mauritius) Ltd. (the “Company”) was incorporated on 13 September 2010 in the Republic of Mauritius and

obtained its Category 1 Global Business Licence on 14 September 2010.

The principal activity of the Company is to provide investment management services. The Company has entered into an investment

management agreement with India Multi-Avenues Fund Limited, a fund incorporated in Mauritius on 22 May 2015.

RESULTS

The Company’s loss for the year under review is USD 31,797 (2017: loss of USD 32,623).

The directors do not recommend the payment of a dividend for the year under review.

DIRECTORS’ RESPONSIBILITY IN RESPECT OF THE FINANCIAL STATEMENTS

The Company’s directors are responsible for the preparation and fair presentation of the financial statements, comprising the Company’s

statement of financial position at 31 March 2018, and the statement of profit or loss and other comprehensive income, the statement

of changes in equity and statement of cash flows for the year then ended, and the notes to the audited financial statements, which

include a summary of significant accounting policies and other explanatory notes, in accordance with International Financial Reporting

Standards and in compliance with the requirements of the Companies Act 2001.

The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International

Financial Reporting Standards and in compliance with the requirements of the Companies Act 2001, and for such internal control as the

directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due

to fraud or error and applying appropriate accounting policies; and making account estimates that are reasonable in the circumstances.

The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to believe the

business will not be a going concern in the year ahead. The Company has enough funds to meet its liabilities and those of the fund in the

coming year.

AUDITORS

The auditors, Ernst & Young, have indicated their willingness to continue in office.


We, SGG Fund Services (Mauritius) Ltd, certify, to the best of our knowledge and belief, that we have filed with the Registrar of

Companies all such returns as are required for IDFC Investment Managers (Mauritius) Ltd. under the Companies Act 2001 for the financial

year ended 31 March 2018.

For and on behalf of

SGG Fund Services (Mauritius) Ltd

Company Secretary

Date: April 23, 2018

SECRETARY’S CERTIFICATE UNDER SECTION 166 (D) OF THE COMPANIES ACT 2001



TO THE MEMBER OF IDFC INVESTMENT MANAGERS (MAURITIUS) LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of IDFC Investment Managers (Mauritius) Limitd (the “Company“) set out on pages 11 to 24

which comprise the statement of financial position as at 31 March 2018, and the statement of profit or loss and other comprehensive

income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements,

including significant accounting policies.

In our opinion, the financial statements give a true and fair view of, the financial position of IDFC Investment Managers (Mauritius)

Limited as at 31 March 2018, and of its financial performance and its cash flows for the year then ended in accordance with International

Financial Reporting Standards and comply with the Companies Act 2001.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are


the Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants

(IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The directors are responsible for the other information. The other information comprises the commentary of directors and the

Secretary’s certificate as required by the Companies Act 2001, but does not include the financial statements and our auditor’s report

thereon.


thereon.


whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the

date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that

fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Statements

The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International

Financial Reporting Standards and the requirements of the Companies Act

2001, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either

intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.




level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement



As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the

audit. We also:

¡ Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform






¡ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

¡ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures

made by the directors.

¡ Conclude on the appropriateness of the director’s use of the going concern basis of accounting and based on the audit evidence

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our

auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or

conditions may cause the Company to cease to continue as a going concern.

¡ Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the

financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit

findings, including any significant deficiencies in internal control that we identify during our audit.

Other matter

This report is made solely for the Company’s member in accordance with Section 205 of the Companies Act

2001. Our audit work has been undertaken so that we might state to the Company’s member those matters we are required to state to

them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to

anyone other than the Company and the Company’s member for our audit work, for this report, or for the opinions we have formed.


Companies Act 2001

We have no relationship with or interests in the Company other than in our capacity as auditor and dealings in the ordinary course of

business.

We have obtained all the information and explanations we have required.

In our opinion, proper accounting records have been kept by the Company as far as it appears from our examination of those records.

ERNST & YOUNG ROGER DE CHAZAL, A.C.A.

Ebène, Mauritius Licensed by FRC

Date: April 23, 2018


STATEMENT OF FINANCIAL POSITION as at March 31, 2018

The notes on pages 15 to 24 form an integral part of these audited financial statements. Independent Auditors’ report on pages 8 to 10.

2018 2017

NOTES USD USD

ASSETS

Current assets

Other receivables 6 110,725 75,945

Prepayments 6a 1,170 4,413

Cash at bank 7 99,442 161,193

TOTAL ASSETS 211,337 241,551


Equity and reserves

Stated capital 8 407,290 407,290

Accumulated losses (207,286) (175,489)

TOTAL EQUITY 200,004 231,801

Current liabilities

Accrued expenses 9 11,333 9,750

TOTAL EQUITY AND LIABILITIES 211,337 241,551

These audited financial statements have been approved and authorised for issue by the Board of directors on ……………………. and signed on its behalf by:

NAME OF DIRECTORS

Mr. Sahjahan Ally Nauthoo Mr. Sevin Chendriah


STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME For the Year Ended March 31, 2018

2018 2017

NOTES USD USD

INCOME - -

EXPENSES

Fees paid on behalf of India Multi-Avenues Fund Limited 34,780 26,589

Receivable from India Multi-Avenues Fund Limited (34,780) (26,589)


Audit fees 6,095 5,750

Administration fees 5,000 5,000

Licence and annual registration fees 4,060 4,060

Insurance cover 4,480 3,545

Disbursement 600 580

Bank charges 362 375

TRC renewal fees 200 700

TOTAL EXPENSES 31,797 32,623

Operating loss for the year (31,797) (32,623)

Income tax expense 11 - -

Loss for the year (31,797) (32,623)

Other comprehensive income - -

TOTAL COMPREHENSIVE LOSS FOR THE YEAR, NET OF TAX (31,797) (32,623)



STATEMENT OF CHANGES IN EQUITY For the Year Ended March 31, 2018

STATED CAPITAL ACCUMULATED LOSSES TOTAL

USD USD USD

At 01 April 2016 407,290 (142,866) 264,424

Loss for the year - (32,623) (32,623)

Other comprehensive income for the year - - -

Total comprehensive loss for the year 407,290 (32,623) (32,623)

At 31 March 2017 407,290 (175,489) 231,801

Loss for the year - (31,797) (31,797)

Other comprehensive income for the year - - -

Total comprehensive loss for the year - (31,797) (31,797)

At 31 March 2018 407,290 (207,286) 200,004



STATEMENT OF CASH FLOWS For the Year Ended March 31, 2018

2018 2017

NOTE USD USD


Loss before tax (31,797) (32,623)

Adjustments to reconcile loss before tax to net cash flows: - -

Working capital adjustments:

Net change in other receivables and prepayments (31,537) (27,064)

Net change in accrued expenses 1,583 -

NET CASH FLOWS USED IN OPERATING ACTIVITIES (61,751) (59,687)

Net change in cash and cash equivalents 8 (61,751) (59,687)

Cash and cash equivalents at 01 April 161,193 220,880

CASH AND CASH EQUIVALENTS AT 31 MARCH 99,442 161,193




01. CORPORATE INFORMATIONIDFC Investment Managers (Mauritius) Ltd. (the “Company”) is a private company limited by shares, incorporated in the Republic of Mauritius on 13 September 2010, with registered address at C/o SGG Fund Services (Mauritius) Ltd, 33, Edith Cavell Street, Port Louis, 11324, Mauritius. The Company holds a Category 1 Global Business Licence and is regulated by the Financial Services Commission (“FSC”) and is licensed by the Financial Services Commission to operate as a CIS Manager as well.


The Company provides investment management services to India Multi-Avenues Fund Limited, a fund incorporated in Mauritius on 22 May 2015.

02. BASIS OF PREPARATIONThe financial statements of the Company are prepared under the historical cost convention.

2.1 STATEMENT OF COMPLIANCE

The financial statements are prepared in accordance with and comply with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

03. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these audited financial statements are set out below.

Foreign currency transactions

Functional and presentation currency

The Company’s functional currency is the USD, which is the currency of the primary economic environment in which it operates. The Company’s performance is evaluated and its liquidity is managed in USD. Therefore, USD is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The Company’s presentation currency is also in USD.

Transactions and balances

Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities are translated at the spot rate of exchange ruling at the reporting date. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition gain or loss on change in fair value of the item (i.e. translation differences are recognised in other comprehensive income or profit or loss).

Financial assets

Initial recognition and measurement

Financial assets within the scope of IAS 39 are classified as financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial assets at initial recognition.

Financial assets are recognised initially at fair value plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

The Company’s financial assets include cash at bank and other receivables.

Subsequent measurement


Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

After initial measurement, such financial assets are subsequently measured at amortised cost using the EIR method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in profit or loss. The losses arising from impairment are recognised in profit or loss.

Impairment

At each reporting date, the Company reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount which is the higher of an asset’s net realisable price and value in use, that is the present value of estimated future cash flows expected to arise from continuing to use the assets and from its disposals at the end of its useful life.



An impairment loss is recognised in profit or loss immediately, unless the asset is carried at revalued amount in which case the impairment loss is recognised against the revaluation or fair value reserve for the assets to the extent that the impairment loss does not exceed the amount held in the revaluation or fair value reserve for that same asset. Any excess is recognised immediately in profit or loss.


Initial recognition and measurement

Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of directly attributable transaction costs.

The Company’s financial liabilities include accrued expenses only.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Loans and borrowings

After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in statement of comprehensive income when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are integral part of the EIR. The EIR amortisation is included in profit or loss.

Derecognition of financial instruments

Financial assets

A financial asset (or, where applicable a part of a financial asset or part of a company of similar financial assets) is derecognised when:

- the rights to receive cash flows from the asset have expired; or

- the Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its right to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Company’s continuing involvement in the asset.


A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability is substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in profit or loss.

Stated capital

Ordinary shares are classified as equity, net of costs directly related to the issue of the shares.

Provision

A provision is recognised when and only when there is a present obligation (legal or constructive) as a result of a past event, and it is probable that an outflow embodying economic benefits will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, and sales taxes or duty.

- Management fees are accounted for on an accrual basis.



Related parties transactions

Parties are considered to be related to the Company if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operating decisions, or vice versa, or where the Company is subject to common control or common significant influence. Related parties may be individuals or other entities.

Expenses

Expenses are accounted for on an accrual basis.

Taxation

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Company operates and generates taxable income.

Deferred taxation

Deferred tax is provided, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax rates are used to determine deferred tax.

The principal temporary differences arise from provisions for bad debts and unrealised exchange differences. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

04. (A) CHANGES IN ACCOUNTING POLICIES

The accounting policies adopted are consistent with those of the previous financial year except for the following new and amended IFRS and IFRIC interpretations adopted in the year commencing 01 April 2017:

EFFECTIVE FOR ACCOUNTING PERIOD BEGINNING ON OR

AFTER

Amendments

Recognition of Deferred Tax Assets for unrealised Losses (Amendments to IAS 12) 01 January 2017

Disclosure Initiative (Amendment to IAS 7) 01 January 2017

Annual Improvements 2014 – 2016 Cycle 01 January 2017

Where the adoption of the standard or interpretation or improvement is deemed to have an impact on the financial statements or performance of the Company, its impact is described below:

IAS 7 Disclosure Initiative – Amendments to IAS 7 - effective January 1, 2017

The amendments to IAS 7 Statement of Cash Flows are part of the IASB’s Disclosure Initiative and require an entity to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes. On initial application of the amendment, entities are not required to provide Comparative information for preceding periods.

There has been no impact following the adoption of this standard on the financial statements for the current year as the notes and policies already included in the financial statements provide good understandability and comparability to the users.

IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses – Amendments to IAS 12 - effective January 1, 2017

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

These amendments are not expected to have any impact on the Company.



04. (B) ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVEThe following standards, amendments to existing standards and interpretations were in issue but not yet effective. They are mandatory for accounting periods beginning on the specified dates, but the Company has not early adopted them:

New or revised standards and interpretations:

EFFECTIVE FOR ACCOUNTING PERIOD BEGINNING ON OR

AFTER

New or revised standards

IFRS 9 Financial Instruments 01 January 2018

IFRS 15 Revenue from Contracts with Customers 01 January 2018

IFRS 16 Leases 01 January 2019

IFRS 17 Insurance Contracts 01 January 2021

IFRIC 22 Foreign Currency Transactions and Advance Consideration 01 January 2018

AMENDMENTS EFFECTIVE DATE DEFERRED INDEFINITELY

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

Transfers of Investment Property (Amendments to IAS 40) 01 January 2018

Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) 01 January 2018

Clarifications to IFRS 15 'Revenue from Contracts with Customers' 01 January 2018

Applying IFRS 9 ‘Financial Instruments’ with IFRS 4 ‘Insurance Contracts’ (Amendments to IFRS 4) 01 January 2018

IFRS 1 First-time Adoption of International Financial Reporting Standards - Deletion of short-term exemptions for first-time adopters

01 January 2018

IAS 28 Investments in Associates and Joint Ventures – Clarification that measuring investees at fair value through profit or loss is an investment - by - investment choice

01 January 2018

IFRIC Interpretation 23 Uncertainty over Income Tax Treatments 01 January 2019

Prepayment Features with Negative Compensation (Amendments to IFRS 9) 01 January 2019

Where the standards and interpretations may have an impact at a future date, they have been discussed below:

IFRS 9 Financial Instruments - Classification and measurement of financial assets, Accounting for financial liabilities and derecognition - 1 January 2018

IFRS 9 introduces new requirements for classifying and measuring financial assets, as follows:

Classification and measurement of financial assets

All financial assets are measured at fair value on initial recognition, adjusted for transaction costs if the instrument is not accounted for at fair value through profit or loss (FVTPL). Debt instruments are subsequently measured at FVTPL, amortised cost or fair value through other comprehensive income (FVOCI), on the basis of their contractual cash flows and the business model under which the debt instruments are held. There is a fair value option (FVO) that allows financial assets on initial recognition to be designated as FVTPL if that eliminates or significantly reduces an accounting mismatch. Equity instruments are generally measured at FVTPL. However, entities have an irrevocable option on an instrument-by-instrument basis to present changes in the fair value of non-trading instruments in other comprehensive income (OCI) (without subsequent reclassification to profit or loss).

Classification and measurement of financial liabilities

For financial liabilities designated as FVTPL using the FVO, the amount of change in the fair value of such financial liabilities that is attributable to changes in credit risk must be presented in OCI. The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other IAS 39 Financial Instruments: Recognition and Measurement classification and measurement requirements for financial liabilities have been carried forward into IFRS 9, including the embedded derivative separation rules and the criteria for using the FVO.



Impairment

The impairment requirements are based on an expected credit loss (ECL) model that replaces the IAS 39 incurred loss model. The ECL model applies to: debt instruments accounted for at amortised cost or at FVOCI; most loan commitments; financial guarantee contracts; contract assets under IFRS 15; and lease receivables under IAS 17 Leases. Entities are generally required to recognise either 12-months’ or lifetime ECL, depending on whether there has been a significant increase in credit risk since initial recognition (or when the commitment or guarantee was entered into). For some trade receivables, the simplified approach may be applied whereby the lifetime expected credit losses are always recognised.

The amendment will result in write off of USD 110,725 in the financial statements.

05. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s audited financial statements requires management to make judegments, estimates and assumptions that affect the amounts recognised in the financial statements. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future.

Judgements

Recoverability of receivable from India Multi Avenues Fund (‘IMAFL)

The Company is the promoter of a new fund namely India Multi-Avenues Fund Limited (‘‘IMAFL”). The Company also acts as the Investment Manager of IMAFL.

The Fund was originally set up for the purpose of opportunistic investments by foreign investors. There has been a change in the purpose and IMAF will now focus on India focused equity long and short funds as a product category. IDFC Investment Managers (Mauritius) Limited had entered into an agreement with Greenshoots Capital UK Ltd to market IMAF. As at date, Greenshoots Capital UK Ltd has already found a list of potential investors and the marketing process to them will start once regulatory approvals have been obtained. The current target for the launch of the Hedge Fund Strategies via the Mauritius platform is around end of April 2018 to mid-May 2018.

Based on above, the directors believe that there is no indication of impairment on the amount due from IMAF as the balance will be reimbursed once IMAF is launched.

Determination of functional currency

The determination of the functional currency of the Company is important since recording of transactions and exchange differences arising there from are dependent on the functional currency selected. As described in note 3, the directors have considered those factors described therein and have determined that the functional currency of the Company in the USD.

06. OTHER RECEIVABLES

2018 2017

USD USD

Amount receivable from India Multi-Avenues Fund Limited fund (note 12a) 110,725 75,945

(a) PREPAYMENTS

Professional indemnity cover - 3,242

Activity licence fees 500 500

Financial Services Commission licence fees 437 438

Annual registration fees 233 233

1,170 4,413

07. CASH AND CASH EQUIVALENTS

2018 2017

USD USD

Cash at bank 99,442 161,193

08. STATED CAPITAL

NO. OF SHARES 2018 2017

2018 2017 USD USD

At 01 April and 31 March 407,290 407,290 407,290 407,290



09. ACCRUED EXPENSES

2018 2017

USD USD

Audit fees 6,095 5,750

Director fees 2,000 2,000

Administration fees 1,250 1,250

MLRO fees 750 750

Insurance cover 1,238 -

11,333 9,750

10. MANAGEMENT AND ADVISORY FEES

(i) Management fees

The Company has entered into an investment management agreement with India Multi-Avenues Fund Limited (previously known as IDFC India Focus Fund Limited), a fund incorporated in Mauritius on 22 May 2015. During the year under review, the fund has not yet started its trading activities and as such no management fees have been paid.

(ii) Advisory fees

India Multi-Avenues Fund Limited, has not yet started its trading activities and as such no advisory fees have been paid during the year under review.

11. TAXATION

The Company, being the holder of a Category 1, Global Business Licence, is liable to income tax in Mauritius on its taxable profit arising from its world-wide income at the rate of 15%. The Company’s foreign sourced income is eligible for a foreign tax credit which is computed as the lower of the Mauritian tax and the foreign tax on the respective foreign sourced income. The foreign tax for a GBL1 company is based on either the foreign tax charged by the foreign country or a presumed amount of foreign tax: the presumed amount of foreign tax is based on 80% of the Mauritian tax on the relevant foreign sourced income.

Capital gains are outside the scope of the Mauritian tax net while trading profits made by the Company from the sale of shares are exempt from tax. At 31 March 2018, the Company had tax losses of USD 158,236 (2017: USD 151,667).

A numerical reconciliation between accounting loss and tax charge is shown below:

(a) Statement of comprehensive income:

2018 2017

USD USD

Loss for the year (31,797) (32,623)

Add: Non allowable expenses - -

Tax losses (31,797) (32,623)

Loss brought forward (126,439) (119,044)

Loss carried forward (158,236) (151,667)

The tax losses are available for set off against future taxable profit of the Company as follows:

TAX LOSS AT: CARRIED FORWARD UP TO: USD

31 March 2014 31 March 2019 (31,655)

31 March 2015 31 March 2020 (31,374)

31 March 2016 31 March 2021 (30,787)

31 March 2017 31 March 2022 (32,623)

31 March 2018 31 March 2023 (31,797)

TOTAL: (158,236)



12. RELATED PARTY DISCLOSURESThe Company had the following related party transactions during the year.

NAME OF RELATED COMPANY NATURE OF TRANSACTIONS RELATIONSHIP 2018 2017

USD USD

(a) India Multi-Avenues Fund Limited

Expenses paid on behalf IMAFL Investment Manager

At 01 April 75,945 49,355

Additions during the year 34,780 26,589

At 31 March 110,725 75,945

(b) SGG Fund Services (Mauritius) Ltd

Professional fees Administrator

At 01 April 16,580 13,000

Additions 4,000 4,000

Payments (3,980) -

At 31 March 16,660 16,580

13. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Fair values

The carrying amounts of cash at bank, other receivables and accrued expenses approximate their fair values.

Financial risk factors

The Company’s activities expose it to a variety of financial risks such as market risk, credit risk, interest rate risk, foreign exchange risk, price risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Interest rate risk

The Company’s financial assets are non-interest bearing. As a result, the Company is not subject to any interest rate risk.

Foreign exchange risk

The Company has no exposure to currency risk as all its financial assets and liabilities are in USD.

Credit risk

The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial assets which potentially subject to the Company to concentrations of credit risk consist principally of bank balances. Cash at bank are held in reputable financial institutions. Accordingly, the Company has no significant concentration of credit risk. The maximum exposure to credit risk assisting from default of the counterpart, with a maximum exposure equal to the carrying amount of these instruments.



The risk of default for the amount receivable from related company is minimal as the IMAFL will be launching its activities soon and will be able to repay its debt.

The maximum exposure to credit risk at the reporting date was:

2018 2017

USD USD

Amount receivable from India Multi –Avenues Fund Limited 110,925 75,945

Cash at bank 99,442 161,193

210,217 237,138

Liquidity risk

The Company maintains and manages liquidity risk through active monitoring of operating cash flows and availability of funding. At the year end, the directors did not consider there to be any significant liquidity risk. Residual and discounted contractual maturities of financial liabilities are presented below:

2018

ON DEMAND TOTAL

USD USD


2017

ON DEMAND TOTAL

USD USD


14. CAPITAL RISK MANAGEMENT

As per Regulation 38 of the Securities (Collective Investment Schemes and Closed-End Funds) Regulations 2008, a CIS Manager holding a licence issued by the Financial Services Commission is required to maintain a minimum stated unimpaired capital of at least Mauritian Rupees 1 million or the equivalent amount.

As at 31 March 2018, the Company’s minimum stated unimpaired capital has been met.

15. IMMEDIATE AND ULTIMATE HOLDING COMPANY

The directors consider IDFC Asset Management Company Limited, a Company incorporated in India, as the immediate and IDFC LIMITED as the ultimate holding company.

16. COMMITMENTS AND CONTINGENCIES

There are no commitments and contingencies.

17. EVENTS AFTER REPORTING DATE

There have been no material events after the reporting date which would require disclosure or adjustment to the audited financial statements for year under review.

IDFC AMC TRUSTEE COMPANY LIMITED

U69990MH1999PLC123190



Mr. Pavan Kaushal (Chairman)

(w.e.f. August 02, 2017)

Mr. Nityanath Ghanekar

Mr. Bharat Raut

Mr. Sridar Venkatesan

Mr. Uday Phadke



IDFC Bank Limited

One Indiabulls Centre,

6th Floor, Jupiter Mills Compound,

841, Senapati Bapat Marg,

Elphinstone Road (West)

Mumbai 400 013

Tel +91 22 6628 9999

Fax + 91 22 2421 5051

Website www.idfcmf.com


CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD’S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Eighteenth Annual Report together with the audited financial statements for the financial year ended March 31, 2018.


(AMOUNT IN `)

PARTICULARS FOR THE PERIOD ENDED MARCH 31, 2018


Total Income 1,802,354 1,801,110


Profit before Tax 697,898 607,766

Less: Provision for Tax 180,000 183,480

Profit after Tax 517,898 424,286

COMPANY’S AFFAIRS

The Company is the Trustee to the schemes of IDFC Mutual Fund (“IDFC MF”). The Assets under Management of IDFC MF were ` 64,550.58 crore (excluding Fund of Funds Schemes) as on March 31, 2018.

NEW SCHEME LAUNCHES:

During FY18, below schemes were launched

Sr. No. Name of the Scheme Type of Scheme1 IDFC Equity Opportunity - Series 4 Close-ended equity scheme








DIVIDEND


ALTERATION OF ARTICLES OF ASSOCIATION

During FY18, the Company adopted the new set of Articles of Association vide a special resolution passed at the Annual General Meeting held on July 25, 2017.



PUBLIC DEPOSITS





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 as per Section 134(3)(m) are not applicable and hence not given.

DIRECTORS

During the year, Mr. Sunil Kakar (DIN: 03055561) resigned as a Nominee Director of the Company w.e.f. July 15, 2017. The Board places on record sincere appreciation for services rendered by him during his tenure.

At the Annual General Meeting of the Company held on July 25, 2017, the Members reappointed Mr. Bharat Raut and Mr. Venkatesan Sridar as Independent Directors of the Company for two years from the conclusion of 17th AGM till the conclusion of 19th AGM to be held for FY19. This being the second term of IDs, the said reappointments were approved vide Special Resolutions.

The Board appointed Mr. Pavan Kaushal (DIN: 07117387) as an Additional Director in the category of Nominee Director of IDFC Limited w.e.f. August 2, 2017. It is proposed to regularize appointment of Mr. Pavan Kaushal as a Nominee Director at the ensuing AGM. The

I D F C A M C T R U S T E E C O M PA N Y L I M I T E D | 3 2 9

BOARD’S REPORT

Company has received notice in writing from a Member signifying its intention to propose the office of Mr. Pavan Kaushal as Nominee Director. The Shareholders are requested to approve the said appointment at the ensuing AGM.

At 16th AGM held on July 21, 2016, the Shareholders appointed Mr. Uday Phadke (DIN - 00030191) as ID to hold office from the conclusion of that AGM till the conclusion of the 18th AGM of the Company to be held for the FY18 i.e. ensuing AGM. Accordingly, the term of Mr. Uday Phadke will end and he will cease to be an Independent Director after the conclusion of ensuing AGM. The Board places on record its sincere appreciation for his commitment and valuable contribution to the Company.

At 16th AGM held on July 21, 2016, the Shareholders appointed Mr. Nityanath Ghanekar (DIN - 00009725) as ID to hold office from the conclusion of that AGM till the conclusion of the 18th AGM of the Company to be held for the FY18 i.e. ensuing AGM. As per the provisions of Section 149(10) & (11) of the Companies Act, 2013, an ID shall be eligible for another term, if the same is approved by the Shareholders by way of Special Resolution. First term of Mr. Nityanath Ghanekar ends at the ensuing AGM to be held for FY18. He brings to the Board his rich experience and insights. The Company continues to benefit from his guidance. Considering his valuable contributions and on the basis of the report of the performance evaluation the Board of Directors of the Company at its meeting held on July 17, 2018 recommended the reappointment of Mr. Nityanath Ghanekar as ID for a period of One year from July 17, 2018 to July 16, 2017. The Company has received notice in writing from a Member signifying its intention to propose the office of Mr. Nityanath Ghanekar as ID of the Company. The Shareholders are requested to approve the said appointment at the ensuing AGM by passing a special resolution.

The Members are requested to approve the appointment of Mr. Pavan Kaushal and Mr. Nityanath Ghanekar at the ensuing AGM.


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


During the year, Eight Board meetings were held on April 24, 2017; June 21, 2017; July 25, 2017; October 24, 2017; November 28, 2017 and January 23, 2018. The gap between any two consecutive meetings was within the limit of the period prescribed under the Companies Act, 2013. Your Company has complied with the provisions of Secretarial Standard I on Meetings of Board of Directors issued by the Institute of Company Secretaries of India.

Attendance details of Board of Directors for the Board Meetings held during FY18 are given below.



Mr. Sunil Kakar1 03055561 Nominee of IDFC - Chairman 2 2

Mr. Pavan Kaushal2 03536833 Nominee of IDFC - Chairman 3 3

Mr. Nityanath Ghanekar 00009725 Independent Director 6 6

Mr. Bharat Raut 00066080 Independent Director 6 5

Mr. Sridar Venkatesan 02241339 Independent Director 6 3

Mr. Uday Phadke 00030191 Independent Director 6 61 Resigned as a Nominee Director w.e.f. July 15, 20172 Appointed as a Nominee Director w.e.f. August 2, 2017

AUDIT AND RISK MANAGEMENT COMMITTEE

During the year, Four Audit and Risk Management Committee meetings (earlier known as Audit Committee) were held on April 24, 2017, July 25, 2017, October 24, 2017 and January 23, 2018. The gap between two meetings was within the limit of the period prescribed under the Companies Act, 2013.

During the year, the Audit and Risk Management Committee was reconstituted on September 26, 2017.

Attendance details of Directors for the Audit Committee Meetings held during FY18 are given below.



Mr. Nityanath Ghanekar Independent Director Chairman 4 4

Mr. Bharat Raut Independent Director Member 4 4

Mr. Sunil kakar1 Nominee of IDFC Member 1 1

Mr. Pavan Kaushal2 Nominee of IDFC Member 2 2

1 Resigned as a member w.e.f. July 15, 20172 Appointed as a member w.e.f. September 26, 2017


During the year, a separate meeting of Independent Directors was held on April 24, 2017. Majority of Independent Directors attended the said meeting.


BOARD’S REPORT

BOARD EVALUATION


STATUTORY AUDITORS

At the AGM held on July 25, 2017, the Members of the Company appointed Price Waterhouse & Co Chartered Accountants LLP (FRN 304026E/E300009) (“PWC”) as the Statutory Auditors of the Company for a period of Five years from the 17th AGM of the Company till the conclusion of the 22nd AGM of the Company to be held for FY22. In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of the Statutory Auditors is not required to be ratified at every Annual General Meeting.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013

In all related party transactions that were entered into during the financial year, an endeavour was made consistently that they were on an arm’s length basis and were in the ordinary course of business. IDFC Group has always been committed to good corporate governance practices, including matters relating to Related Party Transactions.

RISK MANAGEMENT

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


There have been no reportable changes and commitments, affecting the financial position of the Company that has occurred during the period from March 31, 2018 till the date of this report.




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

ANNUAL RETURN

The extract of the Annual Return in the prescribed Form No. MGT 9 is appended as Annexure I. The Annual Return of the Company for FY18 has been hosted at www.idfcmf.com.



(a) in the preparation of the annual financial statements for the year ended March 31, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2018 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.

ACKNOWLEDGMENT

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 and Investors in the Mutual Fund schemes for their continued guidance and

support.

The Directors also express their gratitude for the unstinted support and guidance received from IDFC Limited, IDFC FHCL and other

group companies.


Pavan Kaushal Chairman

Mumbai, July 17, 2018


AS ON THE FINANCIAL YEAR ENDED ON MARCH 31, 2018



i) CIN U69990MH1999PLC123190


iii) Name of the Company IDFC AMC TRUSTEE COMPANY LIMITED


v) Address of the Registered office and contact details One India Bulls Centre, 841 Jupiter Mills Compound, Senapati Bapat Marg, Elphinstone (West), Mumbai – 400013, Maharashtra Tel.: +91 22 6628 9999, Fax: +91 22 2421 5051



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



SR. NO.



1. Trustee of Mutual Fund 6619 100


SR. NO.


% OF SHARES HELD

APPLICABLE SECTION

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

2 IDFC Financial Holding Company Limited U65900TN2014PLC097942 Holding 100% Section 2(46)

3 IDFC Investment Managers (Mauritius) Limited N.A. Subsidiary 100% Section 2(87)





% CHANGE DURING



SHARES

A. Promoter

(1) Indian



c) State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Bodies Corp. 49,994 6 50,000 100% 49,994 6 50,000 100% NIL


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

Sub-total (A) (1):- 49,994 6 50,000 100% 49,994 6 50,000 100% NIL




49,994 6 50,000 100% 49,994 6 50,000 100% NIL




Grand Total (A+B+C) 49,994 6 50,000 100% 49,994 6 50,000 100% NIL




SR. NO.



NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/

ENCUMBERED TO TOTAL

SHARES

NO. OF SHARES


COMPANY

%OF SHARES PLEDGED/



DURING THE YEAR

1. IDFC Financial Holding Company Limited 50,000 100% NIL 50,000 100% NIL NIL

TOTAL 50,000 100% 50,000 100%



NOT APPLICABLE


V. INDEBTEDNESS





SR. NO.


SUNIL KAKAR1

PAVAN KAUSHAL2

BHARAT RAUT VENKATESAN SRIDAR

NITYANATH GHANEKAR

UDAY PHADKE


Fee for attending board /committee meetings 250,000 75,000 275,000 175,000 775,000

TOTAL (1) 250,000 75,000 275,000 175,000 775,000

2. Other Non-Executive Directors NIL NIL NIL

TOTAL (2) NIL NIL NIL

TOTAL (B) = (1 + 2) NIL NIL 250,000 75,000 275,000 175,000 775,000

Overall Ceiling as per the Act Within the ceiling limit

1 Tendered his resignation w.e.f. July 15, 2017

2 Appointed as Nominee Director w.e.f. August 2, 2017

Note: Sitting fees paid to Directors is within the overall Ceiling limit as prescribed under the Companies Act, 2013.






TO THE MEMBERS OF IDFC AMC TRUSTEE COMPANY LIMITED


1. We have audited the accompanying financial statements of IDFC AMC Trustee Company Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, 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


Other Matter














i. The Company does not have any pending litigations as at March 31, 2018 which would impact its financial position.


ii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.







Referred to in paragraph 11 (f) of the Independent Auditors’ Report of even date to the members of IDFC AMC Trustee Company Limited on the financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act1. We have audited the internal financial controls over financial reporting of IDFC AMC Trustee Company Limited (“the Company”) as

of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


















REFERRED TO IN PARAGRAPH 10 OF THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE TO THE MEMBERS OF IDFC AMC TRUSTEE COMPANY LIMITED ON THE FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED MARCH 31, 2018

i. The Company does not hold any fixed assets during the year ended March 31, 2018. Therefore, the provisions of Clause 3(i) of the Order are not applicable to the Company.



iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.








xi. The Company has not paid any managerial remuneration during the year. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the Company.














NOTES ` ` `



(a) Share capital 4 500,000 500,000

(b) Reserves and surplus 5 1,469,947 952,049

1,969,947 1,452,049


(a) Other long-term liabilities 6 30,000 30,000

Current liabilities

(a) Trade Payable 7 172,680 44,869


(c) Short-term provisions 9 80,134 42,800

294,714 101,605

TOTAL 2,294,661 1,583,654

ASSETS

Non-current assets

(a) Long-term loans and advances 10 86,370 86,370

Current assets

(a) Trade receivables 11 531,000 517,500

(b) Cash and bank balances 12 1,649,519 956,368

(c) Short-term loans and advances 10 27,772 23,416

2,208,291 1,497,284

TOTAL 2,294,661 1,583,654




For Price Waterhouse & Co Chartered Accountants LLPChartered AccountantsFirm Registration No. 304026E/E-300009

For and on behalf of the Board of Directors ofIDFC AMC Trustee Company Limited


Pavan KausalDirector

Bharat RautDirector






NOTES ` `

I INCOME

Revenue from operations

Trusteeship fees 1,800,000 1,800,000

Other income 13 2,354 1,110

TOTAL INCOME (I) 1,802,354 1,801,110

II EXPENSES

Other expenses 14 1,104,456 1,193,344


III PROFIT BEFORE TAX (I - II) 697,898 607,766

IV TAX EXPENSE

Current tax 180,000 187,800

Adjustment of tax relating to earlier periods - (4,320)

TOTAL TAX EXPENSE (IV) 180,000 183,480

V PROFIT AFTER TAX (III - IV) 517,898 424,286

Basic and diluted earnings per equity share (Nominal value of share `10) 16 10.36 8.49








Bharat RautDirector







` ` `

CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 697,898 607,766


(Increase)/decrease in loans and advances (short-term) (4,356) (18,505)

(Increase)/decrease in trade receivables (13,500) (403,000)

Increase/(decrease) in current liabilities 155,775 (270,189)

137,919 (691,694)

Cash generated from/(used in) operations 835,817 (83,928)

Direct taxes paid (net of refund received) (142,666) (43,780)

Net cash flow from operating activities (A) 693,151 (127,708)

Net cash flow from investing activities (B) - -

Net cash flow from financing activities (C) - -

Net increase/(decrease) in cash and cash equivalents (A + B + C) 693,151 (127,708)

Cash and cash equivalents as at beginning of the year (refer note 11) 956,368 1,084,076

Cash and cash equivalents as at end of the year (refer note 11) 1,649,519 956,368

693,151 (127,708)

Notes:

The above cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by the Institute of Chartered Accountants of India.






Bharat RautDirector




01 NATURE OF OPERATIONSIDFC AMC Trustee Company Limited (‘the Company’) is a public limited company, incorporated in India under the Companies Act, 1956. The Company provides trusteeship service to IDFC Mutual Fund. The Company has been appointed as the Trustee of IDFC Mutual Fund vide Trust Deed dated December 29, 1999.

02 BASIS OF PREPARATIONThe financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to section 133 of the Companies Act, 2013 read with Rule 7(1) of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III (Division I) to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current – non-current classification of assets and liabilities.


A. USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires the Management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates are based on management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. The differences between estimate and actual outcome are recongnised in the Statement of Profit and Loss when materialised.

B. REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

Income from trusteeship services is recognised at price agreed in accordance with the arrangement with the IDFC Mutual Fund.

C. PROVISIONS

A provision is recognised when the Company has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the reporting date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.

D. INCOME TAX

Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act 1961. The tax rate and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

E. CONTINGENT LIABILITIES

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.



F. CASH AND CASH EQUIVALENTS

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments with an original maturity of three months or less.

G. EARNING PER SHARE

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

H. SEGMENT REPORTING

The Company’s primary business segments are reflected based on the principal business carried out, i.e. Trusteeship Services. The risk and returns of the business of the Company is not associated with geographical segmentation, hence there is no secondary segment reporting based on geographical segment.

04 SHARE CAPITAL



AUTHORISED SHARES




TOTAL ISSUED, SUBSCRIBED AND FULLY PAID-UP SHARE CAPITAL

500,000 500,000

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



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


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

(b) Terms/rights attached to equity shares

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

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

(c) Shares held by holding/ultimate holding company

Out of the equity shares issued by the Company, shares held by its holding company/ultimate holding company are as below:




50,000 500,000 37,499 374,990

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




50,000 100.00% 37,499 75.00%





(`) (`)

SURPLUS IN THE STATEMENT OF PROFIT AND LOSS

Opening balance 952,049 527,763

Add: Profit for the year 517,898 424,286

Closing balance 1,469,947 952,049

06 OTHER LONG-TERM LIABILITIES


(`) (`)

Other payables - Corpus 30,000 30,000

TOTAL 30,000 30,000

07 TRADE PAYABLES


(`) (`)

Total outstanding dues of micro enterprises and small enterprises (Refer note 17) and - -


Other Trade Payable 172,680 44,869

TOTAL 172,680 44,869



(`) (`)

Statutory dues payable 41,900 13,936

TOTAL 41,900 13,936



(`) (`)

Provision for income tax (Net of advance tax of `287,666; Previous year `145,000) 80,134 42,800

TOTAL 80,134 42,800

10 LOANS AND ADVANCES (UNSECURED, CONSIDERED GOOD)



(`) (`) (`) (`)

Balances with government authorities - Input credit receivable

- 23,580 - 23,416

Advance tax (Net of provision `6,492; Previous year `6,492)

86,370 - 86,370 -

Prepaid Expenses - 4,192 - -

TOTAL 86,370 27,772 86,370 23,416



11 TRADE RECEIVABLES (UNSECURED, CONSIDERED GOOD)


(`) (`)

Outstanding for a period less than six months 531,000 517,500

TOTAL 531,000 517,500



(`) (`)


Balances with banks: In current accounts 1,649,519 956,368

TOTAL 1,649,519 956,368

13 OTHER INCOME



(`) (`)

Interest on income tax refund 2,354 1,110

TOTAL 2,354 1,110

14 OTHER EXPENSES



(`) (`)

Travelling and conveyance 94,390 115,600


Directors' sitting fees 775,000 1,000,000

Statutory Notice 8,364 -


Meeting and other expenses - 19,636

Auditors' remuneration (refer note (a) below) 33,660 33,410

Profession tax paid 2,500 2,500

TOTAL 1,104,456 1,193,344




(`) (`)

Audit fee 18,000 18,000


Out of pocket expenses - 3,410

TOTAL 33,660 33,410

15 The Company is engaged in the business of providing trusteeship services in India. As such there is no separate reportable primary business segment or geographical segment as required by Accounting Standard 17 on “Segment Reporting” as notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 and the Companies (Accounting Standards) Amendment Rules, 2016.



16 RELATED PARTY DISCLOSURESAs per the Accounting Standard 18 on “Related Party Disclosures” the related parties of the Company are as follows:

I. Ultimate Holding Company:

IDFC Limited

II. Holding Company:


Names of the related parties with which there are transactions during the year:

III. Fellow Subsidiary:


IDFC Bank Limited

IV. Mutual Fund managed by Fellow Subsidiary

IDFC Mutual Fund, managed by IDFC Asset Management Company Limited

NAME OF RELATED PARTY AND NATURE OF RELATIONSHIP TRANSACTIONS DURING THE YEAR



(`) (`)

a) Details of transactions during the year:I. Fellow Subsidiaries:

IDFC Asset Management Company Limited Reimbursement of expenses 91,829 134,236

II. Mutual Fund managed by Fellow Subsidiary

IDFC Mutual Fund Trusteeship Fees 1,800,000 1,800,000

b) Balances at the year end:I. Holding Company/Ultimate Holding Company:

IDFC Limited Initial Corpus Payable 30,000 30,000

II. Fellow Subsidiaries:

IDFC Bank Limited Current Account Balance 1,000 -

III. Mutual Fund managed by Fellow Subsidiary

IDFC Mutual Fund Trusteeship Fees receivable 531,000 517,500

17 THE BASIC AND DILUTED EARNINGS PER SHARE HAS BEEN CALCULATED BASED ON THE FOLLOWING:



(`) (`)

Net profit after tax 517,898 424,286

Weighted average number of equity shares (Nos.) 50,000 50,000

Basic and diluted earnings per share (`) 10.36 8.49

18 DISCLOSURES RELATING TO SPECIFIED BANK NOTES (“SBNS”)* (a) The disclosures relating to Specified Bank Notes (“SBN”) is not applicable to the Company during the year.

(b) In previous year, the Company did not held and transacted in Specified Bank Notes (“SBN”) during the period Novemebr 08, 2016 to December 30, 2016.


19 The figures for the previous year have been regrouped wherever necessary, in order to make them comparable to the current year.



Bharat RautDirector


IDFC BHARAT LIMITED

U65929TN2003PLC050856

Mr. S. Devaraj (Chairman)

Dr. J. Sadakkadulla

Mr. A. Krishnamoorthy

Mr. Ashish Singh

Mr. Arjun Muralidharan

M/s. Walker Chandiok & Co LLP


IDFC Bank Limited

No. 9, Paripoorna Towers, Manoranjitham Street, Annamalai Nagar, Tiruchirappalli, Tamil Nadu - 620 018 Tel: +91 431 4500000 Fax: +91 431 2750393Website www.idfcbharat.comEmail ID [email protected]

CIN

DIRECTORS

AUDITORS

PRINCIPAL BANKER

REGISTERED OFFICE


BOARD'S REPORT

TO THE MEMBERS

Your Directors have pleasure in presenting the Fifteenth Annual Report of IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited) together with the audited financial statements for the financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS (SUMMARY)




Total Income 1,772,998,576 2,629,469,448

Less: Expenditure (1,396,249,163) (2,202,286,574)

Profit / (Loss) before depreciation 376,749,413 427,182,874

Less: Depreciation (47,286,744) (31,328,897)

Profit / (Loss) before tax and exceptional Items 329,462,669 395,853,977

Less : Exceptional items 0 (186,863,267)

Profit Before tax 329,462,669 208,990,710

Less: Taxes (1,16,943,165) (84,857,440)

Net Profit / (Loss) 212,519,504 124,133,270

CHANGE OF NAME

Pursuant to the Shareholders approval obtained at the Extra Ordinary General Meeting held on March 21, 2017, the name of the Company was changed from “Grama Vidiyal Micro Finance Limited” to “IDFC Bharat Limited” with effect from April 17, 2017.

BUSINESS & OVERVIEW

The Company has entered into a Business Correspondent (BC) agreement with IDFC Bank Limited (IDFC Bank) dated September 01, 2016, by which it agreed to act as a BC to IDFC Bank for distribution of its products. In addition to the distribution of existing products, during the year, IDFC Bharat Limited (IBL or the Company) has started accepting Regular Savings Deposits product and is in the process of introducing new products such as housing loan and other allied products in the next financial year.

TRANSFER TO RESERVES

Since the Company is no longer registered with RBI under Section 45IA of the Reserve Bank of India Act, 1934, the requirement of creating a Reserve Fund (Statutory Reserve) in terms of Section 45-IC(1) of the Reserve Bank of India Act, 1934 and transferring 20% of the profit to the Statutory Reserve does not arise. Consequently, no amount has been transferred to the said Reserve Fund during the year.

REVIEW OF PERFORMANCE

The total number of branches of the Company as on March 31, 2018 was 346 with operations in Seven (7) states viz. Tamil Nadu, Maharashtra, Madhya Pradesh, Puducherry, Kerala, Karnataka and Gujarat as compared to 326 Branches during the previous year.

For the year ended March 31, 2018, total income of the Company was INR 177.29 crore as compared to INR 262.94 crore during the Previous Year which fell by 32% however the Profit Before Tax for the year has gone up by 57.64% which stood at INR 32.94 crore as compared to INR 20.89 crore and the Net Profit for the year was INR 21.25 crore as compared to profit of INR 12.41 crore in the previous year which is a sharp increase by 71.20% on a year over year basis.

DIVIDENDDuring the month of October, the Company has declared a dividend of ` 20/- per share at the rate of 200% of the Face Value of the paid up equity share amounting to ` 11,15,99,920/-. Further the board had recommended a dividend of `120/- per share at the rate of 1200% of the face value of the paid up equity share amounting to ` 66,95,99,520/- (Rupees Sixty-Six Core Ninety-Five Lakh Ninety-Nine Thousand Five Hundred and Twenty Only) subject to the approval of the members at the Annual General Meeting of the Company.

HOLDING COMPANY / SUBSIDIARY COMPANY / JOINT VENTURES / ASSOCIATE COMPANY

The Company is a wholly owned subsidiary of IDFC Bank. The Company does not have any Subsidiary Company / Joint Venture / Associate Company. Since the Company does not have any subsidiary / JV / Associate Company disclosure under section 134(3)(q) read with Rule 8(1) of Companies (Accounts) Rules 2014 is not applicable.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The total number of employees of the Company as on March 31, 2018 was 3,856 as compared to 3,432 as on March 31, 2017.

SHARE CAPITAL UPDATE

The Company did not issue any fresh equity share capital, during FY18.

I D F C B H A R AT L I M I T E D | 3 4 7

BOARD'S REPORT

The Company has so far issued a total of 5,579,996 equity shares of INR 10/- each. The capital structure of the Company as on March 31, 2018 was as follows:

SHARE CAPITAL AMOUNT IN `

AUTHORISED

Equity Shares 250,000,000

Preference Shares 250,000,000

TOTAL 500,000,000

ISSUED, SUBSCRIBED AND FULLY PAID-UP

Equity Shares 55,799,960

Preference Shares -

TOTAL 55,799,960

PUBLIC DEPOSITSExcept the “security deposits” collected from the employees whose name appearing in the Company’s muster role, the Company has neither invited nor accepted, any “Public Deposits” during FY18. Hence, disclosure under section 134(3)(q) read with Rule 8(5)(v) & (vi) of Companies (Accounts) Rules 2014 is not required.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTSThe Company has not provided any loans / guarantees or made investments during FY18. Hence, the provision of Section 186 of the Companies Act, 2013 are not applicable to the Company and the particulars of loans, guarantees and investments under section 134(3)(g) is not applicable.

VIGIL MECHANISM / WHISTLE BLOWER POLICYYour Company has in place a Whistle Blower Policy, so as to establish a Vigil Mechanism to enable Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct. The Audit Committee of the Board reviews the Complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. During the year, there were no complaints under this policy. The Whistle Blower policy is available in the website of the Company at the following address www.idfcbharat.com.

FOREIGN EXCHANGE EARNINGS AND EXPENDITUREYour Company has neither incurred any foreign exchange expenditure and nor earned any foreign exchange income during the year ended March 31, 2018.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTIONSince the Company does not own any manufacturing facility, the particulars regarding conservation of energy, technology absorption and other particulars as required by Section 134 (3)(m) of the Act, read with the Companies (Accounts) Rules, 2014 are not applicable.

DIRECTORS AND KEY MANAGERIAL PERSONNELDuring the year Mr. Ashish Singh (DIN: 01768711) was appointed as additional director in the category of Nominee Director, representing IDFC Bank Limited, with effect from January 17, 2018 till the conclusion of the ensuing Annual General Meeting of the Company. Further, the appointment of Dr. J. Sadakkadulla (DIN: 07544406) and Mr. Ravi Shankar (DIN: 05106028) who were appointed in the category of Independent Director and Nominee Director respectively, got regularised by the approval of shareholders at the Fourteenth Annual General Meeting of the Company held on September 04, 2017.

The office of Mr. R. Ravi Shankar stands vacated due to his sudden demise with effect from November 07, 2017.

During FY18, all appointments were made in compliance with the provisions of applicable regulations. None of the Directors of the Company are disqualified to be appointed as Directors in accordance with Section 164 of the Act.

During the year under review, there was no change in the Key Managerial Personnels of the Company and as on March 31, 2018, Key Managerial Personnel of the Company were as follows:

i. Mr. Arjun Muralidharan - Managing Director and CEO

ii. Mr. Boby Xavier - Company Secretary

DECLARATION OF INDEPENDENCEThe Company has received declarations from Independent Directors (IDs), at the first meeting of the Board of Directors held in FY18 confirming that, they meet the criteria of independence specified under sub-sections (6) and (7) of Section 149 of the Act, read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014, and that they shall abide by the Code for Independent Directors as per Schedule IV of the Act.


BOARD'S REPORT

BOARD MEETINGS

During FY18, the Board met 6 times on April 20, 2017; July 21, 2017; October 16, 2017; January 17, 2018; January 17, 2018 & March 21, 2018.

The gap between any two consecutive meetings was less than one hundred and twenty days.

The attendance details of the Board Meetings held during FY18 is given in the table below:



Mr. S. Devaraj 01936417 Executive Chairman 6 6

Mr. Arjun Muralidharan 02726409 Managing Director & CEO 6 6

Mr. A. Krishnamoorthy 00386122 Independent Director 6 6

Dr. J. Sadakkadulla 07544406 Independent Director 6 6

Mr. R. Ravishankar 1 05106028 Non-Executive Director 3 3

Mr. Ashish Singh 2 01768711 Non-Executive Director 2 21 upto November 07, 20172 Appointed as Additional Director w.e.f. January 17, 2018


As on March 31, 2018, your Company had the following Board Committees:

A. Audit Committee

B. Nomination and Remuneration Committee

C. Corporate Social Responsibility Committee

D. Risk Management Committee

A. AUDIT COMMITTEE

During the year under review, the Audit Committee was reconstituted once on January 17, 2018. The composition of the Audit

Committee is in compliance with the provisions of the Companies Act, 2013. During FY18, the Audit Committee met four (4) times

on April 20, 2017; July 21, 2017; October 16, 2017 and January 17, 2018. All the recommendation made by the Audit Committee

during the year were accepted by the Board.

The Audit Committee of the Company comprises the following Members:

i. Mr. A. Krishnamoorthy, Chairman

ii. Dr. J. Sadakkadulla

iii. Mr. Ashish Singh

Attendance details of the Audit Committee Meetings held during FY18 are given below:

NAME OF THE MEMBER DIN POSITION IN COMMITTEE POSITION IN BOARD NO. OF MEETINGS HELD


Mr. A. Krishnamoorthy 00386122 Chairman Independent Director 4 4

Dr. J. Sadakkadulla 07544406 Member Independent Director 4 4

Mr. R. Ravishankar 1 05106028 Member Nominee Director 3 3

Mr. Ashish Singh 2 01768711 Member Nominee Director 1 1

1 upto November 07, 20172 Appointed as Additional Director w.e.f. January 17, 2018

B. NOMINATION AND REMUNERATION COMMITTEE

During the year under review, the Nomination and Remuneration Committee (NRC) was reconstituted once on January 17, 2018. The

composition of the NRC is in compliance with the Companies Act, 2013. During FY18, the NRC met three (3) times on April 20, 2017;

January 17, 2018 and January 17, 2018.

The NRC of the Company comprises the following members:

i. Mr. Ashish Singh, Chairman

ii. Mr. S. Devaraj

iii. Mr. A. Krishnamoorthy

iv. Dr. J. Sadakkadulla


Attendance details of the NRC Meetings held during FY18 are given below:



Mr. Ashish Singh 1 01768711 Chairman Nominee Director 1 1

Mr. A. Krishnamoorthy 00386122 Member Independent Director 3 3


Mr. S. Devaraj 01936417 Member Executive Chairman 3 3

Mr. R. Ravishankar 2 05106028 Ex-Chairman Nominee Director 1 11 Appointed as Additional Director w.e.f. January 17, 20182 upto November 07, 2017

C. CORPORATE SOCIAL RESPONSIBILITY

The Company has duly constituted a Corporate Social Responsibility (CSR) Committee as per the provisions of Section 135 of the

Companies Act, 2013 (Act) and has devised a policy for the implementation of the CSR framework, broadly defining the areas of

spending, for promotion / development, at least two per cent of its average net profits made during the three immediately preceding

financial years on the activities mentioned under Schedule VII of the Act.

During the year under review, the CSR Committee was re-constituted once on January 17, 2018. During FY18, the CSR Committee met

one (1) time on April 20, 2017.

The CSR Committee comprises the following members:

i. Mr. S. Devaraj, Chairman

ii. Mr. Ashish Singh

iii. Dr. J. Sadakkadulla

Attendance details of the CSR Committee Meetings held during FY18 are given below:



Mr. S. Devaraj 01936417 Chairman Executive Chairman 1 1



Mr. Ashish Singh 2 01768711 Member Nominee Director - -1 upto November 07, 20172 Appointed as Additional Director w.e.f. January 17, 2018

The disclosure of contents of CSR Policy as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 is

appended as Annexure I.

D. RISK MANAGEMENT COMMITTEE

The Board of the Company has the ultimate responsibility for the Company’s Risk Management Framework. To ensure that the

Company has a sound system of risk management and internal controls in place, the Board has established the Risk Management

Committee, which endeavors to review the risk register at regular intervals. The members of the Risk Management Committee

ensure the measurement and control of risk factors and advice on the same to the Management of the Company. The Company has

in place a well-defined Risk Management Policy.

During the year under review, the Risk Management Committee of the Company was re-constituted once on January 17, 2018.

During FY18, the Risk Management Committee met once on March 21, 2018.

The Risk Management Committee comprises of the following members:

i. Mr. Ashish Singh, Chairman

ii. Mr. A. Krishnamoorthy

iii. Mr. Arjun Muralidharan

Attendance details of the Risk Management Committee Meetings held during FY18 are given below:



Mr. Ashish Singh 1 01768711 Chairman Nominee Director 1 1

Mr. A. Krishnamoorthy 00386122 Member Independent Director 1 1

Mr. Arjun Muralidharan 02726409 Member Managing Director & CEO 1 1

Mr. R. Ravishankar 2 05106028 Ex-Chairman Nominee Director - -1 Appointed as Additional Director w.e.f. January 17, 20182 upto November 07, 2017

BOARD'S REPORT



The IDs of the Company met on April 20, 2017 without the presence of the non-independent Directors and senior management team

of the Company. Both the IDs attended the said meeting. The IDs discussed matters as required under the relevant provisions of the

Companies Act, 2013.

RESOURCING COMMITTEE

During the year under review, two (2) meeting of the Resourcing Committee were held on August 07, 2017 and October 16, 2017. The

Board of Directors at the meeting held on October 16, 2017 has decided to dissolve the said committee.

Attendance details of the Resourcing Committee Meetings held during FY18 are given below::



Mr. S. Devaraj 01936417 Chairman Executive Chairman 2 2

Mr. Arjun Muralidharan 02726409 Member Managing Director and CEO 2 2


1 upto November 07, 2017

AUDITORS

The Shareholders of the Company at their meeting held on July 30, 2016 had approved the appointment of M/s. Walker Chandiok & Co

LLP, Chartered Accountants (Registration No: 001076N / N500013) as the Statutory Auditors of the Company for a period of five (5)

years to hold office from the conclusion of the Thirteenth Annual General Meeting up to the conclusion of the Eighteenth Annual General

Meeting of the Company. Accordingly, the statutory auditors had issued an un-qualified audit report under for the Financial Year ended

March 31, 2018. Hence, the disclosure under section 134(3)(f) of the Companies Act, 2013 is not applicable.

SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Companies Act, 2013 and the rules made thereunder, the Company has appointed M/S. Bhandari and

Associates, Company Secretaries in practice, as Secretarial Auditors of the Company to undertake Secretarial Audit of the Company

for FY18. The Secretarial Audit Report forms part of this Board’s Report as Annexure II. There are no qualifications or observations or

other remarks made by the Secretarial Auditors for FY18. Hence, the disclosure under section 134(3)(f) of the Companies Act, 2013 is not

applicable.


Pursuant to the Secretarial Standard-I issued by the Institute of Company Secretaries of India pertaining to Board of Directors, the

Company confirms that all applicable Secretarial Standards have been duly complied with during the period under review.


The Company has in place Policy on Related Party Transactions (RPT) and the same has been uploaded on the website of the Company

www.idfcbharat.com. Since all RPTs entered into by the Company during FY18 were in the ordinary course of business and were on arm’s

length basis, Form AOC-2 is not applicable to the Company. Refer point no. 25 of notes forming part of the Financial Statements.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place, adequate systems of Internal Control to ensure compliance with policies and procedures. It is being

constantly assessed and strengthened with new / revised standard operating procedures and tighter Information Technology controls.

This ensures orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets,

prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The internal auditors of the Company check and verify the internal control and monitor them in accordance with policies adopted by the

Company. The internal financial controls with reference to the financial statements were adequate and operating effectively.


There have been no instances of fraud reported by the Auditors under Section 143(12) of the Act and hence, disclosure in this regard

under section 134(3)(ca) of the Companies Act, 2013 is not applicable.

The Risk Control and Review Department of the Company has identified the instances of Cash Misappropriation to the extent of

` 5,25,374/- of which ` 85,862/- has been recovered and necessary disciplinary actions has been initiated against the said employees as

per the policy of the Company.

MATERIAL CHANGES AFFECTING THE FINANCIAL POSITION OF THE COMPANY

As per Section 134(3)(l) of the Act, except the dividend proposal as mentioned in this report, there have been no reportable changes

and commitments, affecting the financial position of the Company that have occurred during the period from March 31, 2018 till the

date of this report hence disclosure in this regard under section 134(3)(l) of the Companies Act 2013 is not applicable.

BOARD'S REPORT


SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern

status of the Company. Hence, disclosure under section 134(3)(q) read with Rule 8(5)(vii) of Companies (Accounts) Rules 2014 is not

required.


The Company has in place a policy on Sexual Harassment (Prevention & Redressal). The Company undertakes ongoing trainings to

create awareness on this policy. During the year under review. The Company has received 2 complaints under the said policy and the

Management has taken strict actions in this regard as mandated in the policy.


The details forming part of the extract of the Annual Return in Form MGT-9 are available on the website of the Company at

www.idfcbharat.com and the same is enclosed as Annexure -III to this report.

IMPLEMENTATION OF RISK MANAGEMENT POLICY.

Risk Management committee of the Board is entrusted with the responsibilities to identity the risk associated with the industry and also

to formulate plans / ways to mitigate the said risks. Further, the Board has approved Fraud Risk Management Policy, Vigilance Policy,

Operations Management Policy, Whistle Blower Policy, Business Continuity Management Policy and Information Security Management

System Policy which will guide the Management to identity and mitigate the risk associated with the Company on a day to day basis.

Risk Management Committee at its meeting held on March 21, 2018 has reviewed the potential risks faced by the Company and the ways

to mitigate the same.

DIRECTORS RESPONSIBILITY STATEMENT


i. in the preparation of annual accounts, the applicable accounting standards had been followed along with proper explanation

relating to material departures;

ii. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are

reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at end of the financial year and of

the Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the

provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a going concern basis;

v. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

and

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems


REMUNERATION POLICY

The Board has a Remuneration policy in place, for the Directors, Key Managerial Personnel, Senior Management Personnel and other

Employees which is formulated in line with the requirements of Companies Act, 2013. The said Remuneration Policy is available on the

website of the Company www.idfcbharat.com.

ACKNOWLEDGMENT

Your Directors would like to thank our clients, vendors and bankers for their continued support during the year. We would like to

place on record our appreciation for the support received from the regulatory agencies. We would also like to express our deep sense

of appreciation for the hard work and efforts put in by the employees at all levels of the Company. Your Directors also express their

gratitude for the unstinted support and guidance received from IDFC Limited, IDFC Bank Limited and other Group Companies.

FOR & ON BEHALF OF THE BOARD

Sd/-

S. DevarajExecutive Chairman

(DIN: 01936417)

Tiruchirapalli, April 19, 2018


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

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

The CSR policy of IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited) is framed with the following objectives:

Strive for economic development that positively impacts the society at large with a minimal resource footprint.

Embrace responsibility for the Company’s actions and encourage a positive impact through its activities on hunger, poverty, malnutrition, environment, communities, stakeholders and the society.

CSR Activities:

The Company has undertaken some of the activities which fall in the ambit of the activities listed in Schedule VII of the Act. The list of activities as provided in Schedule VII of the Act are included in the CSR Policy of the Company and some of the main areas are:

i. Eradicating hunger, poverty and malnutrition, promoting health care and sanitation and making available safe drinking water

ii. Promoting education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;

iii. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

2. The Composition of the CSR Committee.

The Board of Directors of the Company had constituted the CSR Committee of the Board comprising of the following members as on March 31, 2018:

SR. NO.

NAME OF THE MEMBER DESIGNATION POSITION IN COMMITTEE

1. Mr. S. Devaraj Executive Chairman Chairman

2. Dr. J. Sadakkadulla Independent Director Member

3. Mr. Ashish Singh Non-Executive Director Member

3. Average net profit of the Company for last three financial years: ` 37,04,53,367/-

4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above ` 74,09,068/-

5. Details of CSR spent during the financial year

(a) Total amount spent for the Financial year ` 85,81,231/-

(b) Amount unspent if any NIL

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

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


Sd/- Sd/- S. Devaraj J. Sadakkadulla Chairman CSR Committee Member CSR Committee (DIN: 01936417) (DIN: 07544406)


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

`

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

SR NO

CSR PROJECT ORACTIVITY IDENTIFIED

SECTOR IN WHICH THE PROJECT IS COVERED(CLAUSE NO OF SCHEDULE VII TO THE COMPANIES ACT, 2013, AS AMENDED)

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

AMOUNT OUTLAY(BUDGET)

AMOUNT SPENT ON THE PROJECTS

OR PROGRAMSSUBHEADS: 1.

DIRECTEXPENDITURE ON

PROJECTSOR PROGRAMS

OVERHEADS

CUMULATIVEEXPENDITURE

UPTO THEREPORTING

PERIOD

AMOUNT SPENT:DIRECT ORTHROUGHIMPLEMENTINGAGENCY

1 Distribution of food Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation

Local Area,Tamil Nadu,Maharashtra,Madhya Pradesh

51,16,538 51,16,538

DIR

EC

T S

PE

ND

ING

2 Health Camps Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation


14,24,995 65,41,533

3 Okki Cyclone Relief

Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation


6,16,070 71,57,603

4 Activities. Cl.(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation


13,50,490 85,08,093

5 Federation Level Meeting

Cl(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.


73,138 85,81,231

TOTAL 85,81,231

Sd/- Sd/- S. Devaraj J. Sadakkadulla Chairman CSR Committee Member CSR Committee (DIN: 01936417) (DIN: 07544406)



FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial


To,

The Members,

IDFC BHARAT LIMITED

(Formerly known as Grama Vidiyal Micro Finance Limited)

CIN: U65929TN2003PLC050856

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate

practices by IDFC BHARAT LIMITED (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided us a

reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the

Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of

secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on

31st March, 2018 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 31st March, 2018 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 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, 2015#;

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

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

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

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

Act and dealing with client#;

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

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

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

We have also examined compliance with the applicable clauses of:

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

During the period under review, the Company has 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 and Independent Directors.

The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the

provisions of the Act.

Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in

advance for meetings other than those held at shorter notice, 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.


ANNEXURE IISECRETARIAL AUDIT REPORTDuring 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 no specific events/actions, having a major bearing on the Company’s affairs in

pursuance of the above referred laws, rules, regulations, guidelines, standards etc.

For Bhandari & Associates

Company Secretaries

S. N. Bhandari

Partner

FCS No: 761; C P No. : 366

Mumbai| April 19, 2018

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 TO THE SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018

To,

The Members,

IDFC BHARAT LIMITED

(Formerly known as Grama Vidiyal Micro Finance Limited)

CIN: U65929TN2003PLC050856

Our Secretarial Audit Report for the Financial Year ended on March 31, 2018 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 follow provide a reasonable basis for our opinion.


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 Bhandari & Associates

Company Secretaries

S. N. Bhandari

Partner

FCS No: 761; C P No. : 366

Mumbai| April 19, 2018



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


i) CIN U65929TN2003PLC050856

ii) Registration Date May 12, 2003

iii) Name of the Company IDFC Bharat Limited (formerly known as Grama Vidiyal Micro Finance Limited)

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

v) Address of the Registered office and contact details No. 9, Paripoorna Towers, Manoranjitham Street, Annamalai Nagar, Tiruchirappalli, Tamil Nadu - 620 018 Tel: +91 431 4500000; Fax: +91 431 2750393



NSDL Database Management Limited*4th Floor, Trade World A Wing, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 Tel: +91 22 4914 2700; Fax: +91 22 4914 2503

* For electronic connectivity with Depositories.


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

SR. NO.

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

1 Business Correspondent (“BC”) 66190 100


SR. NO.

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

% OF SHARES HELD

APPLICABLE SECTION

i) IDFC Bank Limited L65110TN2014PLC097792 Holding Company 100 Section 2(46)






A PROMOTERS

(1) Indian

a) Individual / HUF NIL NIL NIL NIL NIL NIL NIL NIL NIL


c) State Govt (s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Bodies Corp. NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Banks / FI 5,579,990 6 5,579,996 100 5,579,990 6 5,579,996 100 NIL

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

SUB-TOTAL (A) (1) 5,579,990 6 5,579,996 100 5,579,990 6 5,579,996 100 NIL






(2) Foreign

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

b) Other - Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) Bodies Corp. NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Any Other NIL NIL NIL NIL NIL NIL NIL NIL NIL

SUB-TOTAL (A) (2) NIL NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL SHARE HOLDING OF PROMOTER (A) = (A)(1)+(A)(2)

5,579,990 6 5,579,996 100 5,579,990 6 5,579,996 100 NIL

B PUBLIC SHAREHOLDING

1 Institutions

a) Mutual Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Banks / FI NIL NIL NIL NIL NIL NIL NIL NIL NIL

c) Central Govt NIL NIL NIL NIL NIL NIL NIL NIL NIL

d) State Govt(s) NIL NIL NIL NIL NIL NIL NIL NIL NIL

e) Venture Capital Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

f) Insurance Companies NIL NIL NIL NIL NIL NIL NIL NIL NIL

g) FIIs NIL NIL NIL NIL NIL NIL NIL NIL NIL

h) Foreign Venture Capital Funds NIL NIL NIL NIL NIL NIL NIL NIL NIL

i) Others (Trusts) NIL NIL NIL NIL NIL NIL NIL NIL NIL

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

2 Non - Institutions

a) Bodies Corp

i) Indian NIL NIL NIL NIL NIL NIL NIL NIL NIL

ii) Overseas NIL NIL NIL NIL NIL NIL NIL NIL NIL

b) Individuals NIL NIL NIL NIL NIL NIL NIL NIL NIL

i) Individual shareholders holding nominal share capital up to` 1 lakh


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


SUB-TOTAL (B) (2) NIL NIL NIL NIL NIL NIL NIL NIL NIL

TOTAL PUBLIC SHARE HOLDING (B) = (B)(1)+(B)(2)


C SHARES HELD BY CUSTODIAN FOR GDR & ADR


GRAND TOTAL (A+B+C) 5,579,990 6 5,579,996 100 5,579,990 6 5,579,996 100 NIL





SR. NO.


SHARE HOLDING AT THE END OF THE YEAR % CHANGE IN SHARE HOLDING

DURING THE YEAR


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES


SHARES OF THE

COMPANY


ENCUMBERED TO TOTAL

SHARES

1 IDFC Bank Limited 5,579,996 100.00 NIL 5,579,996 100.00 NIL NIL

TOTAL 5,579,996 100.00 NIL 5,579,996 100.00 NIL NIL

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

SHAREHOLDING AT THE BEGINNING OF THE YEAR

CUMULATIVE SHAREHOLDING DURING THE YEAR

NO. OF SHARES % OF TOTAL SHARES OF THE COMPANY


NO CHANGE






NOT APPLICABLE

(v) Shareholding of Directors and Key Managerial Personnel:





NIL


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment IN ` INR

SECURED LOANS EXCLUDING

DEPOSITS

UNSECUREDLOANS

DEPOSITS TOTAL INDEBTEDNESS

Indebtedness at the beginning of the financial year

i) Principal Amount NIL NIL NIL NIL

ii) Interest due but not paid NIL NIL NIL NIL

iii) Interest accrued but not due NIL NIL NIL NIL

TOTAL (I+II+III) NIL NIL NIL NIL


• Addition NIL NIL NIL NIL

• Reduction NIL NIL NIL NIL

Net Change


i) Principal Amount NIL NIL NIL NIL

ii) Interest due but not paid NIL NIL NIL NIL

iii) Interest accrued but not due NIL NIL NIL NIL

TOTAL (I+II+III) NIL NIL NIL NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

SR. NO. PARTICULARS OF REMUNERATION NAME OF MD / WTD / MANAGER TOTAL AMOUNT

MR. S. DEVARAJ MR. ARJUN MURALIDHARAN2

1. Gross salary

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

19,700,000 11,966,868 31,666,868

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

(c) Profits in lieu of salary under Section 17(3) Income- tax Act, 1961

NIL NIL NIL



4. Commission NIL NIL NIL

- as % of profit NIL NIL NIL

- others, specify... NIL NIL NIL

5. Others, please specify NIL NIL NIL

TOTAL (A) 19,700,000 11,966,868 31,666,868

Ceiling as per the Act




SR. NO.


MR. A. KRISHNAMOORTHY DR. J. SADAKKADULLA


Fee for attending board committee meetings 375,000 375,000 750,000

Commission NIL NIL NIL

Others, please specify NIL NIL NIL

TOTAL (1)

2. Other Non-Executive Directors

Fee for attending board committee meetings NIL NIL

Commission NIL NIL NIL

Others, please specify NIL NIL NIL

TOTAL (2) NIL NIL

TOTAL (B) = (1 + 2) 375,000 375,000 750,000


Note: In terms of the provisions of the Companies Act, 2013, the remuneration payable to Directors other than executive Directors shall not exceed 3% of the net profit of the Company. The remuneration paid to the directors is well within the limit.

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

SR. NO.


MR. ARJUN MURALIDHARAN1

(CEO)

MR. BOBY XAVIER

(CS)

TOTAL

1. Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 11,966,868 3,093,680 15,060,548

(b) Value of Perquisites u/s 17(2) Income-tax Act, 1961 NIL NIL NIL

(c) Profits in lieu of Salary under Section 17(3) Income-tax Act, 1961 NIL NIL NIL



4. Commission

- as % of profit NIL NIL NIL

- others, specify... NIL NIL NIL

5. Others, please specify - NIL NIL

TOTAL (A) 11,966,868 3,093,680 15,060,548



VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES:

TYPE SECTION OF THE COMPANIES ACT

BRIEF DESCRIPTION DETAILS OF PENALTY / PUNISHMENT /

COMPOUNDING FEES IMPOSED

AUTHORITY [RD / NCLT /

COURT]

APPEAL MADE, IF ANY (GIVE

DETAILS)

A. COMPANY

Penalty NIL NIL NIL NIL NIL

Punishment NIL NIL NIL NIL NIL

Compounding NIL NIL NIL NIL NIL

B. DIRECTORS




C. OTHER OFFICERS IN DEFAULT




Sd/- Sd/-

Arjun Muralidharan S. Devaraj Managing Director and CEO Executive Chairman DIN: 02726409 DIN: 01936417




TO THE MEMBERS OF IDFC BHARAT LIMITED (FORMERLY KNOWN AS GRAMA VIDIYAL MICRO FINANCE LIMITED)


1. We have audited the accompanying financial statements of IDFC Bharat Limited (Formerly known as Grama Vidiyal Micro Finance Limited) (‘the Company’), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.


2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility


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

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

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

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

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2018, and its profit and its cash flows for the year ended on that date.


9. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. Further to our comments in Annexure A, as required by Section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

c. the financial statements dealt with by this report are in agreement with the books of account;

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);

e. on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;



f. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date and our report dated 19 April 2018 as per Annexure B expressed an unmodified opinion.;

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

i. the Company, as detailed in Note 27 to the financial statements, has disclosed the impact of pending litigations on its

financial position;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material

foreseeable losses;

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

Company;

iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period

from 8 November 2016 to 30 December 2016 which are not relevant to these financial statements. Hence, reporting under

this clause is not applicable.

For WALKER CHANDIOK & CO LLP


Firm’s Registration No.: 001076N/N500013

per Sumesh E S

Partner

Membership No.: 206931

Place : Tiruchirappalli

Date : 19 April 2018



Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

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

(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed

on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of

the Company and the nature of its assets.

(c) The title deed of the following immovable property, (which is included under the head ‘fixed assets’) according to the

information and explanation given to us, is subject matter of an order from the Tiruchirappalli Corporation citing encroachment

of land. In response to this, the Company has filed a petition with the High Court of Madras (Madurai Bench) for stay and quash

of the Order for which an interim stay has been granted.

NATURE OF PROPERTY TOTAL NUMBER OF CASES

WHETHER LEASEHOLD /FREEHOLD

GROSS BLOCK AS ON 31 MARCH 2018 (`)

NET BLOCK ON 31 MARCH 2018 (`)

Land 1 Freehold 37,613,550 37,613,550

(ii) The Company does not have any inventory. Accordingly, the provisions of clause 3(ii) of the Order are not applicable.

(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clauses 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, the provisions of clause 3(iv) of the Order are not applicable.

(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records under sub-section (1) of Section 148 of the Act, in respect of Company’s services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income- tax, sales-tax, service tax, duty of

customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly

deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts

payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became

payable.

(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on

account of any dispute, are as follows::

NAME OF THE STATUTE

NATURE OF DUES AMOUNT (`) AMOUNT PAID UNDER PROTEST (`)

PERIOD TO WHICH THE AMOUNT RELATES

FORUM WHERE DISPUTE IS PENDING

Finance Act, 1994 Penalty 5,331,304 Nil 2007-08 to 2009-10 Customs, Excise and Service Tax Appellate Tribunal

Finance Act, 1994 Service tax 13,496,638 3,578,652 2009-10 to 2013-14 Customs, Excise and Service Tax Appellate Tribunal

Finance Act, 1994 Penalty 13,496,638 Nil 2009-10 to 2013-14 Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act, 1961

Income Tax 14,861,720 2,230,000 Assessment year 2014 - 15

CIT(A) Tiruchirappalli

(viii) The Company has no loans or borrowings payable to a financial institution or a bank or government and no dues payable to debenture-holders during the year. Accordingly, the provisions of clause 3(viii) of the Order are not applicable.

(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.



(x) According to the information and explanations given to us, no fraud on or by the Company, has been noticed or reported during the year, except for, 10 cases of misappropriation of cash by the employee of the Company to the extent of ` 525,374 identified by the management during the year regarding which, the Company has initiated disciplinary action against the employees and recovered ` 85,862.

(xi) Managerial remuneration has been provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.

(xii In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.

(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For WALKER CHANDIOK & CO LLP


Firm’s Registration No.: 001076N/N500013

per Sumesh E S

Partner

Membership No.: 206931

Place : Tiruchirappalli

Date : 19 April 2018



Independent Auditor’s report on the Internal Financial Controls under Clause (i) of Sub- section 3 of Section 143 of the

Companies Act, 2013 (“the Act”)

1. In conjunction with our audit of the financial statements of IDFC Bharat Limited (Formerly known as Grama Vidiyal Micro

Finance Limited) (“the Company”) as of and for the year ended 31 March 2018, we have audited the internal financial controls

over financial reporting (IFCoFR) of the Company as of that date.


2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the

internal control over financial reporting criteria established by the Company considering the essential components of internal

control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”)

issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation

and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient

conduct of the Company’s business, including adherence to company’s policies, the safeguarding of its assets, the prevention

and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of

reliable financial information, as required under the Act.


3. Our responsibility is to express an opinion on the Company’s IFCoFR based on our audit. We conducted our audit in

accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to

be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on

Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI. Those Standards and

the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all

material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating

effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material

weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the

assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material

misstatement of the financial statements, whether due to fraud or error.

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

the Company’s IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company’s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles. A company’s IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that,

in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only

in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance

regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company’s assets that could

have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of

controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of

the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or

that the degree of compliance with the policies or procedures may deteriorate.


Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such

internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control

over financial reporting criteria established by the Company considering the essential components of internal control stated

in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the

Institute of Chartered Accountants of India (“ICAI”).

For WALKER CHANDIOK & CO LLPChartered AccountantsFirm’s Registration No.: 001076N/N500013

per Sumesh E SPartnerMembership No.: 206931

Place: TiruchirappalliDate: 19 April 2018



AS AT31 MARCH 2018

AS AT31 MARCH 2017

NOTES IN ` IN `



Share capital 3 55,799,960 55,799,960

Reserves and surplus 4 1,694,343,669 1,616,143,203

1,750,143,629 1,671,943,163


Other long-term liabilities 5 33,864,669 19,375,615

Long-term provisions 6 - 16,494,281

33,864,669 35,869,896

Current liabilities

Other current liabilities 5 470,317,697 618,196,181

Short-term provisions 6 37,172,165 13,429,414

507,489,862 631,625,595

TOTAL 2,291,498,160 2,339,438,654

ASSETS

Non-current assets

Fixed assets

Tangible assets 7 144,609,387 109,526,995


Intangible assets under development - 5,458,676

Deferred tax assets (net) 8 14,188,767 23,900,237

Long-term loans and advances 9 48,161,953 49,147,067

Other non-current assets 10 39,495,081 24,836,170

263,130,630 221,063,713

Current assets

Trade receivables 11 213,107,594 109,589,516

Cash and bank balances 12 1,728,335,132 1,897,956,734

Short-term loans and advances 9 68,207,658 85,592,214

Other current assets 10 18,717,146 25,236,477

2,028,367,530 2,118,374,941

TOTAL 2,291,498,160 2,339,438,654

Notes 1 to 28 form an integral part of these financial statements


For Walker Chandiok & Co LLPChartered Accountants(Firm’s Registration No.: 001076N/N500013)

For and on behalf of the Board of Directors ofIDFC Bharat Limited (Formerly Grama Vidiyal Micro Finance Limited)

per Sumesh E SPartner

S DevarajChairmanDIN: 01936417

Arjun MuralidharanManaging Director and CEODIN: 02726409

Tiruchirappalli | April 19, 2018 Tiruchirappalli | April 19, 2018Boby XavierCompany Secretary



YEAR ENDED31 MARCH 2018


NOTES IN ` IN `

REVENUE


Other income 14 71,145,632 29,644,546

TOTAL REVENUE 1,772,998,576 2,629,469,448

EXPENSES

Employee benefits expense 15 1,104,053,422 933,176,861

Finance costs 16 - 987,369,497


Other expenses 18 292,195,741 281,740,216

TOTAL EXPENSES 1,443,535,907 2,233,615,471

PROFIT BEFORE EXCEPTIONAL ITEMS AND TAX 329,462,669 395,853,977

Exceptional items 19 - 186,863,267


Consisting of:-

Continuing operations - Profit/(Loss) before tax 304,312,247 (48,385,814)

Discontinuing operations - Profit before tax 26 25,150,422 257,376,524

Tax expense

Current tax 107,231,695 52,118,172

Tax for earlier periods - 8,904,824

Deferred tax 9,711,470 23,834,444

116,943,165 84,857,440

Profit after tax 212,519,504 124,133,270

Consisting of:-

Continuing operations - Profit/(Loss) after tax 196,296,254 (30,801,161)

Discontinuing operations - Profit after tax 26 16,223,250 154,934,431

Earnings per equity share 23

- Basic and diluted 38.09 21.21

Nominal value of equity shares 10.00 10.00

Notes 1 to 28 form an integral part of these financial statements

This is the statement of profit and loss referred to in our report of even date











IN ` IN `

CASH FLOWS FROM OPERATING ACTIVITIESProfit before tax 329,462,669 208,990,710

Adjustments


Net gain on foreign currency transactions - (629,439)

Bad debts and advances written off 507,776 2,428,309

Interest income from deposits (66,841,272) (23,217,530)

Derivative liability written back - (9,146,185)

Provision no longer required, written back - (87,181,637)

Profit on sale of tangible assets (188,562) (297,555)


Increase in provisions (14,734,257) 9,654,929

(Decrease) in other liabilities (133,389,430) (543,366,229)

Decrease loan receivables - 8,701,029,537

(Increase) in trade receivables (103,518,078) (102,938,906)

Decrease in loans and advances 17,412,182 147,959,363

Decrease in other assets 16,140,428 497,981,648

Cash flow from operating activities 92,138,200 8,832,595,912

Income taxes paid (net) (85,248,968) (177,792,420)

Net cash generated from operating activities 6,889,232 8,654,803,492

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of tangible assets including capital work-in-progress and advances (80,396,543) (49,292,447)

Purchase of intangible assets (6,809,517) (2,040,773)

Proceeds from sale of tangible assets 2,453,000 473,428

Investments in deposits (5,067,850,000) (14,412,002,240)

Proceeds from maturity of deposits 4,163,201,629 15,848,264,409

Interest collected from deposits 57,220,175 14,121,481

Net cash (used in) / generated from investing activities (932,181,256) 1,399,523,858

CASH FLOWS FROM FINANCING ACTIVITIESRedemption of preference shares - (40,000,000)

Preference dividend paid including dividend distribution tax - (5,782,784)

Equity dividend paid including dividend distribution tax (134,319,038) -

Proceeds from borrowings - 15,300,000,000

Repayment of borrowings - (27,179,169,352)

Net cash used in financing activities (134,319,038) (11,924,952,136)

Net increase in cash and cash equivalents (1,059,611,062) (1,870,624,786)

Cash and cash equivalents as at the beginning of the year 1,677,946,194 3,548,570,980

Cash and cash equivalents as at the end of the year 618,335,132 1,677,946,194

Notes (Also, refer note 12):Cash and cash equivalents comprises of

Cash on hand 2,865,758 1,156,682

Balances with banks

- in current accounts 615,469,374 1,211,789,512

- in deposit account (with maturity up to 3 months) - 465,000,000

618,335,132 1,677,946,194

This is the cash flow statement referred to in our report of even date









01 GENERAL INFORMATION

A BACKGROUND Grama Vidiyal Micro Finance Limited was incorporated as a private limited company in the year 2003 under the erstwhile

Companies Act, 1956. Effective 21 December 2009, the Company was registered as a “”Non Banking Financial Company”” under the rules and regulations framed by the Reserve Bank of India (“”the RBI””). The Company has obtained registration under the category of Non-Banking Financial Company - Micro Finance Institutions (“”NBFC-MFI””), w.e.f 4 October 2013. The Company was in the business of providing micro loans to women borrowers.

During the financial year 2016-17, IDFC Bank Limited executed share purchase agreements with the Company’s equity shareholders and thereby acquired 100% of the equity shares. Consequently the Company had assigned its entire loan receivables outstanding as at 29 September 2016 to IDFC Bank Limited by virtue of a Master Assignment Agreement. The Company had settled all liabilities towards borrowings and debentures (including debentures listed with Bombay Stock Exchange) that existed prior to acquisition of equity shares by IDFC Bank Limited and had surrendered its Certificate of Registration as a Non-Banking Financial Institution (NBFI) with RBI which was cancelled on 18 October 2016.

Subsequently, the Company discontinued to operate as a Non-Banking Finanical Institution and has been operating as business correspondent. The Company has changed its legal name to IDFC Bharat Limited (‘the Company’) with effect from 17 April 2017.

B COMPARATIVES All amounts in the financial statements are presented in Indian Rupees except share data and as otherwise stated. Figures for the

previous year have been regrouped / re-classified wherever considered necessary to conform to the figures presented in the current year.


A BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements are prepared in accordance with generally accepted accounting principles (“GAAP”) applicable in India.

GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014, (to the extent notified and applicable). The financial statements have been prepared under the historic cost convention on accrual basis of accounting, except interest in respect of non-performing loan assets are accounted for on a cash basis. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The management evaluates all recently issued or revised accounting standards on an ongoing basis.

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

assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for doubtful loans and advances, future obligations under employee retirement benefit plans, income taxes and the useful lives of fixed assets.

Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in schedule III to the Companies Act, 2013. The Company determined its operating cycle as 12 months.

C TANGIBLE ASSETS AND DEPRECIATION Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and impairment losses, if any.

Cost comprises the purchase price, including duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use.

Gains or losses arising on the disposal of the tangible assets are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in the statement of profit and loss within other income or other expenses, as the case may be.

Depreciation is provided using straight line method at the rates of depreciation prescribed in Schedule II to the Companies Act, 2013. If the management’s estimates of the useful life of a fixed asset at the time of acquisition of the asset or of the remaining useful life on a subsequent review is different than that envisaged in the aforesaid schedule, depreciation is provided at a rate based on the management estimate of useful life/remaining useful life.

ASSET CATEGORY USEFUL LIFE (YEARS)

Computers and accessories 3-6

Furniture and fittings 10

Office equipment 5

Vehicles 8

D INTANGIBLE ASSETS AND AMORTISATION

Goodwill represents the excess of acquisition cost over the carrying amount of the Company’s share of the identifiable net assets of the acquiree at the date of acquisition and is attributed to the future economic benefits arising from an acquisition that are not individually identified and separately recognised. Goodwill is amortised over a period of 5 years.


372 | I D F C A N N U A L R E P O R T 2 0 1 7 - 2 0 1 8

Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the specific software. These assets are amortised over their estimated useful lives on a straight line basis, commencing from the date the assets is available to the Company for its use. After initial recognition, intangible assets are carried at its cost less any accumulated amortisation and any accumulated impairment losses.

When an intangible asset is disposed off, the gain or loss on disposal is determined as the difference between the disposal proceeds and the carrying amount of the asset, and is recognised in the statement of profit and loss within other income or other expenses, as the case may be.

The useful life of the assets is reviewed at each balance sheet date. If the expected useful life of the asset is significantly different from the previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefit from the asset, the method of amortisation is changed to reflect the changed pattern. Such changes are accounted in accordance with Accounting Standard (AS) 5, Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

E IMPAIRMENT

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For the assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash flows (cash generating units). As a result some assets are tested individually for impairment and some are tested at cash-generating unit level. Recoverable amount is the higher of the asset’s or cash generating units net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

F LEASES

Finance lease

The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and rewards of ownership of the leased asset. Where the Company is a lessee in such type of arrangements, the related assets are recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability. The corresponding finance lease liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a constant proportion of the outstanding capital balance and is charged to the statement of profit and loss, as finance costs over the period of the lease.

Operating lease

All other leases are treated as operating leases. Where the Company is a lessee, payments on operating lease agreements are recognised as an expense on a straight-line basis over the lease term. Associated costs such as maintenance and insurance are expensed as incurred.

G REVENUE

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the collectibility is reasonably assured.

Fees relating to Business Correspondent services is recognized on accrual basis in accordance with terms of the agreement and is measured based on the interest realised, as communicated by the customer.

Interest on loans is recognised on accrual basis, except in the case of Non Performing Assets (“”NPAs””), where interest is recognised upon realisation. Also refer note 2(a).

Interest income on deposits with banks is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

Loan processing fees is accounted up-front as and when it becomes due.

Income from managed portfolio represents income from receivables securitized / assigned whererin losses arising are recognized in the Statement of Profit and Loss immediately upon receipt of sale consideration. Gains arising from the transaction are amortized over the tenor of the transaction.

Commission income is recognised on accrual basis on the completion of the service in accordance with terms of the agreement.

H SECURITIZATION/ASSIGNMENT OF LOAN RECEIVABLES

Transactions relating to transfers of loans and advances through securitization/assignment with other financial institutions and banks are accounted for in accordance with the relevant “Guidelines on Securitisation Transaction” issued by RBI. Such transferred loans and advances are de-recognised from the financial statements and gains/losses are accounted for only where the Company surrenders rights to benefits specified in the loan contract in favour of the counter parties.



I BORROWING COST

Borrowing costs consist of interest and other costs that Company incurs in connection with the borrowing of funds. Borrowing costs other than borrowing costs incurred on securitisation are amortised over the period of the respective borrowings.

J EMPLOYEE BENEFITS

(i) Defined contribution plan: The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952. Eligible employees receive benefits from the provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to specified percentage of the covered employee’s basic salary. The Company has no further obligations under the plan beyond its monthly contributions. Contributions to provident fund are charged to the statement of profit and loss on accrual basis.

(ii) Defined benefit plan: The Company provides gratuity, a defined benefit retirement plan covering eligible employees. The Company provides the gratuity benefit through annual contribution to a fund. Liabilities related to the gratuity plan are determined by an independent actuarial valuation carried out using projected unit credit method as at the balance sheet date. Actuarial gain or loss is recognized immediately in the statement of profit and loss.

K FOREIGN CURRENCY TRANSACTIONS, FORWARD CONTRACTS AND DERIVATIVES

Foreign currency transactions are translated into the functional currency (Indian Rupees) of the Company, using the exchange rates prevailing on the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items denominated in foreign currency at year-end exchange rates are recognised in the statement of profit and loss.

L TAXATION

Provision for tax for the year comprises current income tax and deferred tax.

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantially enacted at the reporting date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realised.

M EARNINGS PER EQUITY SHARE

The basic earnings per equity share (“EPS”) is computed by dividing the net profit after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of shares outstanding durign the period are adjusted for effects of all dilutive potential equity shares.

N PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company creates a provision when there is present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. The amount of provision recognised are best estimates of expenditure that are required to settle the obligation at the balance sheet date. The estimates are not discounted to their present value.

A disclosure for a contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent assets are neither recognized nor disclosed in the financial statements.

O CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby profit before extraordinary items and tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the Company are segregated based on the available information. Cash comprises of cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.



03 SHARE CAPITAL

AS AT 31 MARCH 2018 AS AT 31 MARCH 2017

NUMBER ` NUMBER `

AUTHORISED


Preference shares of ` 10 each 25,000,000 250,000,000 25,000,000 250,000,000

50,000,000 500,000,000 50,000,000 500,000,000

ISSUED, SUBSCRIBED AND FULLY PAID UP


5,579,996 55,799,960 5,579,996 55,799,960

a) Reconciliation of total number of shares

i. Equity shares

There has been no movement in equity shares capital during the current and previous year.


NUMBER ` NUMBER `

ii. Preference shares

At the beginning of the year - - 4,000,000 40,000,000

Redeemed during the year - - (4,000,000) (40,000,000)

OUTSTANDING AT THE END OF THE YEAR - - - -

b) Shares held by the holding company

Equity shares of ` 10 each

IDFC Bank Limited together with its nominees (Also, refer note 1(a))

5,579,996 55,799,960 5,579,996 55,799,960

5,579,996 55,799,960 5,579,996 55,799,960

c) Shareholders holding more than 5% of the shares Number % Number %

Equity shares of ` 10 each

IDFC Bank limited together with its nominees 5,579,996 100.00% 5,579,996 100.00%

- - 5,579,996 100.00%

d) Bonus issue, buy back and issue of shares without payment being received in cash

There were no shares issued pursuant to contract without payment being received in cash allotted as fully paid up by way of bonus issues or bought back during the last 5 years immediately preceding 31 March 2018.

e) Rights, preferences and restrictions attached to Equity share capital

The Company has only one class of equity shares having a par value of ` 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors in any financial year, other than interim dividend, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The equity shares shall be transferable subject to the provisions contained in the Articles of Association and in the agreements entered / to be entered into with the investors / shareholders from time to time.




AS AT31 MARCH 2018

AS AT31 MARCH 2017

IN ` IN `

Capital redemption reserve

Securities premium reserve 437,373,207 437,373,207

Statutory reserve*

Balance at the beginning of the year - 215,012,000

Less: Transferred to surplus in Statement of profit and loss - (215,012,000)

Balance at the end of the year - -

Surplus in Statement of profit and loss

Balance at the beginning of the year 1,103,769,996 770,407,510

Add: Transferred from statutory reserve* - 215,012,000

Add : Transferred from Statement of profit and loss 212,519,504 124,133,270

Less : Preference dividend paid - (4,800,000)

Less : Dividend Distribution Tax on Preference Shares - (982,784)

Less : Interim dividend paid on Equity shares (111,599,920) -

Less : Dividend Distribution Tax on Equity Shares (22,719,118) -

Balance at the end of the year 1,181,970,462 1,103,769,996

*Please refer note 1(a). The Company is no longer registered with RBI under section 45IA of the Reserve Bank of India Act, 1934. Therefore requirement of creating a Reserve fund in terms of section 45-IC(1) (‘Statutory reserve’) of the Reserve Bank of India Act, 1934 and transferring 20% of the profit to the Statutory reserve fund does not arise. Consequently, no amount was transferred to the said Statutory reserve fund and balance in Statutory reserve as on 31 March 2016 was transferred to Surplus in Statement of Profit and Loss.

05 OTHER LIABILITIES


LONG-TERM CURRENT LONG-TERM CURRENT

IN ` IN ` IN ` IN `

Security deposits from employees 33,864,669 6,061,589 19,375,615 2,826,798

Unrealised gain on loan transfer transactions - - - 15,353,307

Payables towards securitisation/assignment transactions - - - 86,870,236

Payable towards business correspondent services (Also, refer note 25(c))

- 300,436,608 - 436,013,419

Employee related payables (Also, refer note 25(c)) - 96,309,366 - 49,895,284

Statutory dues payable - 43,968,910 - 10,969,019

Other payables (Also, refer note 25(c)) - 23,541,224 - 16,268,118

33,864,669 470,317,697 19,375,615 618,196,181

06 PROVISIONS


LONG-TERM SHORT-TERM LONG-TERM SHORT-TERM

IN ` IN ` IN ` IN `

Provision for gratuity (Refer note (a) below) - 15,189,438 16,494,281 13,429,414

Provision for income tax - 21,982,727 - -

- 37,172,165 16,494,281 13,429,414

a) Employee benefits

The Company has taken a group gratuity for its employees with the Life Insurance Corporation of India (LIC). Under this policy the eligible employees are entitled to receive gratuity payments upon their resignation or death in lump sum after deduction of necessary taxes up to a maximum limit of ` 2,000,000.

The following table set out the status of the gratuity plan as required under Accounting Standard (AS) - 15 - Employee benefits and the reconciliation of opening and closing balances of the present value of the defined benefit obligation.



AS AT31 MARCH 2018

AS AT31 MARCH 2017

IN ` IN `

Change in projected benefit obligation

Projected benefit obligation at the beginning of the year 102,586,067 67,276,098

Service cost 12,634,816 9,250,732

Interest cost 6,910,293 5,031,342

Benefits paid (4,873,775) (5,543,423)

Actuarial loss (4,655,434) 26,571,318

Projected benefit obligation at the end of the year 112,601,967 102,586,067

Change in plan assets



Contributions made 23,915,586 9,140,822

Benefits paid (4,873,775) (5,543,423)

Actuarial loss (414,308) 110,784


Reconciliation of present value of obligation on the fair value of plan assets

Present value of projected benefit obligation at the end of the year (112,601,967) (102,586,067)

Funded status of the plan 97,412,529 72,662,372

Liability recognised in the balance sheet (15,189,438) (29,923,695)

Components of net gratuity costs are

Service cost 12,634,816 9,250,732

Interest cost 6,910,293 5,031,342

Expected returns on plan assets (6,122,654) (5,452,576)

Recognized net actuarial gain (4,241,126) 26,460,534

Net gratuity costs (Refer note 15) 9,181,329 35,290,032

Assumptions used

Discount rate 7.45% 6.90%

Long-term rate of compensation increase 8.00% 8.00%

Attrition rate 15.00% 15.00%

Rate of return on plan assets 7.45% 8.20%

The following table sets out the status of the Gratuity Plan and the amounts recognized in the financial statement:

In `

AS AT

PARTICULARS 31 MARCH 2018 31 MARCH 2017 31 MARCH 2016 31 MARCH 2015 31 MARCH 2014


Plan asset 97,412,529 72,662,372 63,501,613 57,839,210 42,924,725

Fund status of plan - (liability)/asset (15,189,438) (29,923,695) (3,774,485) 8,071,040 870,034



07 FIXED ASSETS

In `

TANGIBLE ASSETS INTANGIBLE ASSETS

FREEHOLD LAND@

COMPUTERS & ACCESSORIES

FURNITURE AND

FITTINGS

OFFICE EQUIPMENT

VEHICLES TOTAL GOODWILL SOFTWARE TOTAL

Gross block

As at 01 April 2016 37,613,550 59,451,804 32,163,327 35,905,890 41,614,761 206,749,332 122,415,000 29,989,528 152,404,528

Additions - 24,339,390 6,029,933 9,066,402 2,298,334 41,734,059 - 2,040,773 2,040,773

Disposals - (226,924) (608,131) (2,046,560) (84,053) (2,965,668) - - -

As at 31 March 2017 37,613,550 83,564,270 37,585,129 42,925,732 43,829,042 245,517,723 122,415,000 32,030,301 154,445,301

Additions - 55,371,911 19,805,749 5,668,595 - 80,846,255 - 12,268,193 12,268,193

Disposals - (9,490,990) (1,899,268) (2,751,654) (5,212,737) (19,354,649) (122,415,000) - (122,415,000)

As at 31 March 2018 37,613,550 129,445,191 55,491,610 45,842,673 38,616,305 307,009,329 - 44,298,494 44,298,494

Accumulated depreciation

As at 01 April 2016 - 38,856,420 26,030,134 25,971,201 19,561,100 110,418,855 122,415,000 20,868,504 143,283,504

Depreciation/amortisation charge 13,291,726 4,328,967 5,506,030 5,234,945 28,361,668 - 2,967,229 2,967,229

Reversal on disposal of assets (226,923) (557,366) (1,934,548) (70,958) (2,789,795) - - -

As at 31 March 2017 - 51,921,223 29,801,735 29,542,683 24,725,087 135,990,728 122,415,000 23,835,733 146,250,733

Depreciation/amortisation charge - 27,964,776 5,909,461 5,349,634 4,275,554 43,499,425 - 3,787,319 3,787,319

Reversal on disposal of assets - (9,285,821) (1,716,078) (2,938,766) (3,149,546) (17,090,211) (122,415,000) - (122,415,000)

As at 31 March 2018 - 70,600,178 33,995,118 31,953,551 25,851,095 162,399,942 - 27,623,052 27,623,052

Net block

As at 31 March 2017 37,613,550 31,643,047 7,783,394 13,383,049 19,103,955 109,526,995 - 8,194,568 8,194,568

As at 31 March 2018 37,613,550 58,845,013 21,496,492 13,889,122 12,765,210 144,609,387 - 16,675,442 16,675,442

@ The Company has received an order during financial year 2012-13 from the Tiruchirappalli Corporation citing encroachment of land. In response to this the Company has filed a petition with the High Court of Madras (Madurai Bench) for stay and quash of the Order for which an interim stay has been granted.

08 DEFERRED TAX ASSETS

AS AT31 MARCH 2018

AS AT31 MARCH 2017

IN ` IN `

Timing difference between depreciation and amortisation as per financials and as per tax 8,912,203 13,544,245

Provision for employee benefits 5,276,564 10,355,992

14,188,767 23,900,237

09 LOANS AND ADVANCES


LONG-TERM SHORT-TERM LONG-TERM SHORT-TERM

IN ` IN ` IN ` IN `


Capital advances 1,650,000 - 2,099,712 -

Rental deposits - 38,804,750 - 33,274,882

Loans to employees 1,111,036 15,519,286 1,586,688 25,593,989

Prepaid expenses - 7,364,765 - 6,544,870

Balances with government authorities - - - 15,129,751

Advance income tax (net of provision) 45,400,917 - 45,400,917 -

Other advances - 6,518,857 59,750 5,048,722

48,161,953 68,207,658 49,147,067 85,592,214



10 OTHER ASSETS



IN ` IN ` IN ` IN `

Non-current bank balances (Also, refer note 12) 39,495,081 - 24,836,170 -

Interest strip retained on securitisation of receivables - - - 16,140,428

Interest accrued but not due on bank deposits (Also, refer note 25(c))

- 18,717,146 - 9,096,049

39,495,081 18,717,146 24,836,170 25,236,477

11 TRADE RECEIVABLES

AS AT 31 MARCH 2018

AS AT 31 MARCH 2017

IN ` IN `


-Outstanding for a period exceeding six months from the date they are due for payment - -

Other receivables (Also, refer note 25(c)) 213,107,594 109,589,516

213,107,594 109,589,516


AS AT 31 MARCH 2018

AS AT 31 MARCH 2017

IN ` IN `


Cash on hand 2,865,758 1,156,682

Balances with banks

- in current accounts 615,469,374 1,211,789,512

- in deposit accounts (with maturity up to 3 months) - 465,000,000

A 618,335,132 1,677,946,194

Other bank balances

Deposits with maturity upto 12 months (Also, refer note 25(c)) 1,110,000,000 -

Balances with bank held as security against other commitments and borrowings - 220,010,540

Balances with banks in restricted accounts 39,495,081 24,836,170

1,149,495,081 244,846,710

Less : Amounts disclosed as 'Other non-current assets' (Also, refer note 10) (39,495,081) (24,836,170)

B 1,110,000,000 220,010,540

A + B 1,728,335,132 1,897,956,734




YEAR ENDED 31 MARCH 2018


IN ` IN `

Fees for business correspondent services (Also, refer note 25(b)) 1,673,284,919 562,685,281

Service fee for management of loan receivables - 28,741,488

Interest income on

- Loans given - 1,548,712,476

- Fixed deposits with banks - 66,595,790

Loan processing fees - 140,548,128

Income from managed portfolio 28,568,025 252,524,457

Commission income (Also, refer note 25(b)) - 17,282

1,701,852,944 2,599,824,902

14 OTHER INCOME



IN ` IN `

Interest income on fixed deposits with banks 66,841,272 23,217,530

Interest income on staff loans 3,411,062 4,318,194

Other non-operating income 893,298 1,479,383

Net gain on foreign currency transactions - 629,439

71,145,632 29,644,546




IN ` IN `

Salaries and wages 957,760,411 779,812,463

Gratuity expense (Also, refer note 6(a)) 9,181,329 35,290,032

Contribution to provident and other funds 73,984,645 58,142,956


1,104,053,422 933,176,861

16 FINANCE COSTS



IN ` IN `

Interest expenses - 871,991,884

Other borrowing costs - 115,377,613

- 987,369,497

17 DEPRECIATION AND AMORTISATION EXPENSE



IN ` IN `

Depreciation of tangible assets (Also, refer note 7) 43,499,425 28,361,668

Amortisation of intangible assets (Also, refer note 7) 3,787,319 2,967,229

47,286,744 31,328,897



18 OTHER EXPENSESYEAR ENDED

31 MARCH 2018YEAR ENDED

31 MARCH 2017

IN ` IN `

Power and fuel 10,369,942 9,231,110

Rent and amenities (Also, refer note 25(b)) 55,833,138 50,201,322

Repairs and maintenance - Others (Also, refer note 25(b)) 35,653,553 32,714,644

Insurance 731,105 1,004,429

Rates and taxes 703,861 3,977,889

Legal and professional charges 4,627,427 23,018,205

Payments to auditors (Also, refer note 20) 2,324,900 2,750,300

Business promotion expenses 26,353,689 35,240,487

Directors sitting fees 751,390 1,741,217

Traveling, conveyance and lodging expenses 76,853,864 79,146,737

Postage and courier 7,424,443 2,376,850


Communication expenses 11,692,665 9,444,052

Cash management charges 14,576,708 -

Contribution towards corporate social responsibility (Also, refer note 28) 8,581,231 6,740,902

Bad debts and advances written off 507,776 2,428,309


292,195,741 281,740,216

19 EXCEPTIONAL ITEMS (INCOME)/EXPENSEYEAR ENDED


31 MARCH 2017

IN ` IN `

Derivative liability written back - (9,146,185)

Provisions no longer required, written back - (87,181,637)

Other finance costs - 248,191,089

Other borrowing costs - 35,000,000

- 186,863,267

The Company has disclosed the above items which pertain to cessation of NBFI activity as “exceptional” items considering its relevance to explain the performance of the Company.

20 PAYMENTS TO AUDITORS (EXCLUDING SERVICE TAX)YEAR ENDED


31 MARCH 2017

IN ` IN `

Statutory audit 1,150,000 1,900,000

Limited review 1,050,000 700,000


2,324,900 2,750,300

21 EXPENDITURE IN FOREIGN CURRENCY (ACCRUAL BASIS)YEAR ENDED


31 MARCH 2017

IN ` IN `

Interest expenses - 14,587,765

- 14,587,765

22 PAYABLES TO MICRO AND SMALL ENTERPRISESBased on the information available with the Company, as at 31 March 2018, there are no suppliers who are registered as micro and small enterprises under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006.



23 EARNINGS PER EQUITY SHARE



IN ` IN `

Profit after tax 212,519,504 124,133,270

Less: Preference dividend - (5,782,784)

Profit attributable to equity shareholders 212,519,504 118,350,486

Weighted average number of equity shares in calculating basic EPS 5,579,996 5,579,996

Dilutive effect of potential equity shares - -

Weighted average number of equity shares in calculating diluted EPS 5,579,996 5,579,996

Nominal value of shares 10 10

Earnings per equity share

- Basic 38.09 21.21

- Diluted 38.09 21.21

24 SEGMENT REPORTINGThe Company has considered business segments as the primary segments for disclosure on the basis that the risk and returns of the Company is primarily determined by the nature of products and services. The products included in each of the reported domestic business segments are as follows:

1. NBFI activity - Providing micro loans to women borrowers and securitisation of such loans

2. Business correspondence - provide business correspondence services.

The Company operates only in India and hence does not disclose geographic segment reporting.

Fixed assets used in the Company’s business, assets or liabilities contracted in the course of business, other than those specifically identifiable, have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to such assets and liabilities since a meaningful segregation of the available data is onerous.

Revenue and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other costs, wherever allocable, are apportioned to the segments on an appropriate basis. Certain income and expenses are not specifically allocable to individual segments as the underlying services are used interchangeably. The Company believes that it is not practicable to provide segment disclosures relating to such income and expenses, and accordingly such income and expenses are separately disclosed as ‘unallocated’.

The accounting principles used in the preparation of the financial statements are consistently applied to record revenue and expenditure in individual segments, and are as set out in the significant accounting policies.

The Company had surrendered its NBFI license during the previous year, but continued to service during the current year, the loan assets that were securitised when it was carrying NBFC business.

BUSINESS SEGMENT IN `

YEAR ENDED 31 MARCH 2018 YEAR ENDED 31 MARCH 2017

PARTICULARS NBFI ACTIVITY BUSINESS CORRESPONDENCE

UNALLOCATED TOTAL NBFI ACTIVITY BUSINESS CORRESPONDENCE

UNALLOCATED TOTAL

REVENUE

Revenue from operations - 1,673,185,049 - 1,673,185,049 - 562,685,281 17,282 562,702,563

Discontinuing operations 28,667,895 - - 28,667,895 2,037,122,339 - - 2,037,122,339

TOTAL REVENUE 28,667,895 1,673,185,049 - 1,701,852,944 2,037,122,339 562,685,281 17,282 2,599,824,902

RESULTS

Segment result 25,150,422 367,616,145 - 392,766,567 257,376,524 13,562,747 3,633,535 274,572,806

Unallocated corporate expenses - - (63,303,898) (63,303,898) - - (65,582,096) (65,582,096)

Profit before tax 25,150,422 367,616,145 (63,303,898) 329,462,669 257,376,524 13,562,747 (61,948,561) 208,990,710

Income taxes (116,943,165) (116,943,165) - - (84,857,440) (84,857,440)

Profit for the year 25,150,422 367,616,145 (180,247,063) 212,519,504 257,376,524 13,562,747 (146,806,001) 124,133,270

OTHER INFORMATION

Segment assets - 2,231,908,476 59,589,684 2,291,498,160 245,212,245 1,321,384,455 772,841,954 2,339,438,654

Segment liabilities - 519,371,804 21,982,727 541,354,531 103,068,479 435,168,483 129,258,529 667,495,491

Capital expenditure - - - 93,114,448 - - - 49,233,508

Depreciation and amortisation - - - 47,286,744 - - - 31,328,897

Other non-cash expenses - - - 9,689,105 - - - 37,718,341



25 RELATED PARTIES DISCLOSURESAs per the requirements of Accounting Standard 18 on Related Party Disclosures, the Company has disclosed related parties and nature of relationships only where there have been transactions between related parties, except related party relationships where control exists.

a) Names of related parties

RELATIONSHIP NAME

Ultimate Holding Company IDFC Limited (from 13 October 2016)

Holding Company IDFC Bank Limited (from 13 October 2016)

Key management personnel (KMP) S Devaraj - Chairman

Arjun Muralidharan - Managing Director and CEO

S Pattabiraman - President and Chief Financial Officer (till 13 October 2016)

Entities in which directors of the Company are able to exercise control or have significant influence

Grama Vidiyal Enterprises Private Limited

Grama Vidiyal Trust

Activist for Social Alternatives

Swarnodhayam Credits Private Limited

Relatives of KMP D Shirley - Daughter of S Devaraj (Whole Time Director till 13 October 2016)D Satish - Son of S Devaraj and Brother of D Shirley

b) Transactions with related partiesIn `

TRANSACTION RELATED PARTY YEAR ENDED 31 MARCH 2018


Fees for business correspondent services IDFC Bank Limited 1,672,137,223 451,509,542

Investment in fixed deposits (net) IDFC Bank Limited 645,000,000 465,000,000

Interest income on fixed deposits IDFC Bank Limited 59,077,233 5,283,562

Dividend paid IDFC Bank Limited 111,599,920 -

Remuneration Key management personnel and their relatives 45,765,378 49,095,116

Expenses / (income)

Rent and amenities Grama Vidiyal Trust 4,147,200 3,988,800

Activist for Social Alternatives 2,337,588 -

Repairs and maintenance - Others Grama Vidiyal Trust 2,764,800 2,861,952

Sale of asset Swarnodhayam Credits Private Limited 2,027,500 -

Commission income Grama Vidiyal Enterprises Private Limited - 11,334

c) Outstanding balances as at year end

In `

TRANSACTION RELATED PARTY AS AT 31 MARCH 2018

AS AT 31 MARCH 2017

Trade receivable IDFC Bank Limited 213,107,594 105,388,697

Fixed deposits including accured interest IDFC Bank Limited 1,128,717,146 466,446,520

Payable towards business correspondent services

IDFC Bank Limited 300,434,379 433,838,625

Bank balances IDFC Bank Limited 467,712,302 638,951,232

Incentive payable Key management personnel and their relatives 16,234,650 16,017,300

Rent payable Activist for Social Alternatives 299,640 -

Rental deposit Grama Vidiyal Trust 4,000,000 4,000,000



26 DISCONTINUING OPERATIONSThe Company was registered under the category of Non-Banking Financial Company - Micro Finance Institutions (“NBFC-MFI”) with RBI and the Company was engaged in the business of providing loans to women borrower which is the primary segment of business. Pursuant to the board approval dated 1 September 2016 the Board of Directors has approved the business plan of assignment of loan receivable to IDFC Bank Limited and the Board of Director has entered in to a Master Assignment Agreement for assignment of loan receivable balances as on 29 September 2016 to IDFC Bank Limited. Consequent to the above transactions, and further to the explanations provided in Note 1(a), the Company has surrendered its Certificate of Registration as an NBFI and discontinued the business of providing direct loans to borrowers.

The amounts of revenue and expenses in respect of the ordinary activities attributable to the discontinuing operation during the current financial reporting period.



IN ` IN `

REVENUE

Revenue from operations 28,667,895 2,060,339,869

Other income - 2,810,763

TOTAL REVENUE 28,667,895 2,063,150,632

EXPENSES

Employee benefits expense 1,494,383 500,253,711

Finance costs - 987,910,623

Other expenses 2,023,090 130,746,507

TOTAL EXPENSES 3,517,473 1,618,910,841

Profit before exceptional item and taxes 25,150,422 444,239,791

Exceptional item - 186,863,267


Tax expense 8,927,172 102,442,093

Profit after tax 16,223,250 154,934,431

Net cash flows from:-

Operating activities (61,777,629) 9,444,022,051

Financing activities - (13,150,900,503)

Investing activities 229,071,817 76,690,138

Note: There were no gain/loss due to transfer of assets and liabilities pursuance to discontinuance of the above business.

The carrying amounts of total assets and liabilities of discontinuing operations are as follows:-

AS AT31 MARCH 2018

AS AT31 MARCH 2017

IN ` IN `

Total assets - 245,212,245

Total liabilities - 103,068,479

NET ASSETS - 142,143,766



27 CONTINGENT LIABILITIES

i. Credit enhancements provided by the Company towards assignment / securitisation transactions aggregating to Nil (31 March 2017: ` 216,310,540 (cash collateral and principal subordination))

ii. Demand for service tax received from service tax authorities in respect of which the Company has gone for appeal is ` 32,324,580 (31 March 2017: ` 32,324,580). Based on the management assessment, crystallization of liability on these items is not considered probable and hence not acknowledged as debt by the Company.

iii. Demand from Income tax authorities in respect of which the Company has gone for appeal is ` 14,861,720 (31 March 2017: ` 14,861,720). Based on the management assessment, crystallization of liability on these items is not considered probable and hence not acknowledged as debt by the Company.

iv. Commitment towards capital expenditure as at 31 March 2018 is ` 4,950,000 (31 March 2017: Nil).

28 CORPORATE SOCIAL RESPONSIBILITY

As per section 135 of the Companies Act, 2013, the Company needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger, poverty and malnutrition, promoting health care and sanitation, promoting education, promoting gender equality, empowering women, destitute care and rehabilitation, ensuring environment sustainability, protection of national heritage, art and culture, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Companies Act, 2013. With the approval of CSR Committee, the funds were primarily allocated and utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

Gross amount required to be spent by the Company during the year is ` 7,409,067 (previous year ` 6,551,481).

In `

Particulars IN CASH YET TO BE PAID TOTAL

For the year ended 31 March 2018

On construction/acquisition of any asset - - -

On purposes other than above 8,581,231 - 8,581,231

For the year ended 31 March 2017

On construction/acquisition of any asset - - -

On purposes other than above 6,740,902 - 6,740,902

This is the summary of significant policies and other explanatory information referred to in our report of event date.


For and on behalf of the Board of Directors ofIDFC Bharat Limited(Formerly Grama Vidiyal Micro Finance Limited)





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IDFC LIMITED

www.idfc.com | [email protected]

REGISTERED OFFICE

KRM Towers, 7th floor

No.1, Harrington Road

Chetpet

Chennai 600 031

TEL +91 (44) 4564 4000

FAX +91 (44) 4564 4022

CORPORATE OFFICE

Naman Chambers, C-32, G-Block

Bandra-Kurla Complex

Bandra (East)

Mumbai 400 051

TEL +91 (22) 4222 2000 / +91 (22) 7132 5500

FAX +91 (22) 2654 0354

idfc subsidiary annual report 2017-18 · 6 | idfc annual report 2017–2018 board's report...

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