Mar 31, 2023
a. The Board of the Directors of the Company at its meeting held on April 06, 2022 has considered and declared an Interim Dividend of 10% i.e. '' 1 per equity share of the Company. The interim dividend was paid to the eligible shareholders on May 02, 2022, whose names appeared on the Register of Members of the Company as at close of day on April 10, 2022 being the record date for the purpose of the aforesaid interim dividend.
b. The Board of Directors at its meeting held on February 01, 2023 has considered and declared a special interim dividend of 110% i.e. '' 11 per equity share of the Company. The interim dividend was paid to the eligible shareholders on February 23, 2023, whose names appeared on the Register of Members of the Company as at close of the record date February 13, 2023.
(i) Reserve Bank of India (âRBIâ) has, vide its letter No.DOR..HOL.No.SUO-75590/16.01.146/2021-22 dated July 20, 2021, clarified that after the expiry of lock-in period of 5 years, IDFC Limited can exit as the promoter of IDFC FIRST Bank Limited.
Post completion of lock-in period of 5 years, the Board of Directors of IDFC FIRST Bank at their meeting held on December 30, 2021 has confirmed that they are âIn-principleâ in favour of Merger of ''IDFC'' and ''IDFC FHCL'' with ''IDFC FIRST Bank''. The said corporate restructuring activity shall be subject to approval by the Board of Directors of entities involved, shareholders, creditors and other necessary statutory / regulatory approvals.
The Board of Directors of the Company and IDFC FHCL, at their respective meetings held on March 18, 2023, have appointed
a) registered valuer for recommendation of fair share exchange ratio; b) merchant banker for issuance of fairness opinion on the share exchange ratio; c) law firm for conducting legal due diligence, drafting and finalizing scheme of amalgamation and filing regulatory applications.
(ii) The Board of Directors of the Company and IDFC FHCL at their respective meetings held on April 06, 2022, have inter alia considered binding bids received in connection with divestment of IDFC Asset Management Company Limited (''IDFC AMC'') along with IDFC AMC Trustee Company Limited (''IDFC AMC Trustee'') and have approved sale of the entire shareholding of IDFC AMC and IDFC AMC Trustee held by the Company to a consortium comprising of Bandhan Financial Holding Limited, Lathe Investment Pte. Ltd. (affiliate of GIC), Tangerine Investments Limited, Infinity Partners (affiliates of ChrysCapital) (''Proposed Transaction''). The consideration for the Proposed Transaction is '' 4,500 crores on a fully diluted basis and subject to customary price adjustments at the closure.
All the requisite regulatory and other approvals, as applicable have been received and the Proposed Transaction is completed on January 31, 2023. IDFC FHCL sold 27,636,940 shares (including 846,490 shares purchased from employees on exercise of ESOPs at a price of '' 1,625 per share) in IDFC AMC and 50,000 shares in IDFC AMC Trustee to the consortium for consideration of '' 4,490 crores and '' 0.50 crores respectively. With the conclusion of the transaction, post January 31, 2023, IDFC AMC, IDFC AMC Trustee and IDFC Investment Managers (Mauritius) Limited are no more subsidiaries of the Group.
(iii) On August 15, 2022, Ms. Ritu Anand ceased to be an Independent Director of the Company upon completion of her term.
Pursuant to Regulation 17(1)(c) of SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, the Board of Directors of the Company shall comprise of not less than six directors. Due to cessation of her directorship from the Board, the number of Directors on the Board of the Company reduced from six to five and the composition of the Board as well as constitution of Board''s committees were impacted. As on March 31, 2023 the Company is in process of appointing New Directors, on the Board to comply with Regulation 17(1)(c) of SEBI LODR Regulations 2015.
a) The Company has donated equity shares of its wholly owned subsidiary IDFC Foundation to Upajeevan Sangathan Foundation via a deed of donation signed by both the parties on October 27, 2022. The Company has also undertaken to make good any short fall in the net tax liabilities which become payable arising out of the Tax Appeal which is in excess of the Net Value of the assets realised by the donee. The Undertaking is valid for three years from the date of donation i.e. from October 27, 2022.
b) The Company had issued letter of comfort to IDFC Foundation - wholly owned subsidiary of the Company, if there is any short fall in meeting its obligations towards its contingent liabilities amounting to '' 14.57 crore and any related penalty. The comfort letter was valid till April 30, 2022.
c) The Company holds 26.00% stake in Jetpur Somnath Tollways Private Limited (âJSTPLâ). JSTPL had executed the concession agreement with National Highway Authority of India (âNHAIâ) for the purpose of four laning of 123.45 km Jetputur Somnath Section of NH-8D in the state of Gujarat under NHDP phase III on Build Operate Transfer (BOT) (TOLL) on DBFO pattern. Due to certain disputes, NHAI terminated the Concession Agreement in November 2016. Matter was referred to Arbitration. Arbitral Tribunal on March 31, 2021 passed an award in favour of JSTPL for '' 1,019.43 crore. JSTPL filed an appeal with Hon''ble Delhi High Court for enforcement of the award dated March 31, 2021. Hon''ble High Court directed NHAI to deposit the entire decretal amount along with interest till the date of payment with court on February 27, 2023. The next hearing is fixed for May 11, 2023.
d) At the time of sale of IDFC AMC and IDFC AMC Trustee company to Bandhan consortium, IDFC as a seller had given various warranties. These includes Business / General warranty, Tax warranty and Fundamental Warranty.
e) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders'' suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
The Company maintains a capital base to cover risks inherent in the business and is meeting capital adequacy requirements of the regulator, Reserve Bank of India (RBI) of India. The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by RBI. Company has complied in full with all its externally imposed capital requirements over the reported period. The primary objectives of the Company''s capital management policy are to ensure that the Company complies with externally imposed capital requirements and healthy capital ratios in order to support its business and to maximise shareholder value.
The Company manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes have been made to the objectives, policies and processes from the preceding years. However, they are under constant review by the Board.
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); RBI circular DNBR(PD) CC No. 053/ 03.10.119 / 2015-16 and RBI circular DOR (NBFC).CC.PD.No.109/22.10.106/2019-20 dated March 13, 2020 :
Regulatory capital Tier I capital, which comprises share capital, share premium, special reserves, share option outstanding account, retained earnings including current year profit less accrued dividends. Certain adjustments are made to Ind AS-based results and reserves, as prescribed by the Reserve Bank of India.
i) There are no transfers between levels 1, 2 and 3 during the year.
ii) The Companies policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
The Company uses the following hierarchy for determining and disclosing the fair value of financial assets by valuation technique:
The fair value of financial instruments are classified into three categories i.e. Level 1, 2 or 3 depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements).
The hierarchies used are as follows:
Level 1: Hierarchy includes financial instruments measured using quoted prices in an active market.
Level 2: The fair value of financial instruments that are not traded in an active market (such as mutual fund units) is determined using observable market data and not the entity specific estimates. These investments are valued at closing Net Asset Value (NAV), which represents the repurchase price at which the issuer will redeem the units from investors. Since all significant inputs required to fair value an instrument are observable, the investments are included in Level 2.
Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
b) Valuation technique used to determine fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
Specific valuation techniques used to value financial instruments include:
⢠the fair value of the mutual fund units is determined using observable NAV at the reporting date as declared by the issuer.
⢠the fair value of the venture capital units (VCFs) is determined using NAV at the reporting date as declared by the issuer. *
⢠the fair value of unlisted equity shares are has been valued by an independent valuer.
⢠Considering the illiquidity discount, the Company has provided for additional diminution over and above the NAV communicated by the VCFs in order to appropriately reflect the fair value as on March 31, 2022.
c) Valuation Process
In order to assess Level 3 valuations as per Company''s investment policy, the management relies on the NAVs issued by the VCF''s.
The finance team performs the above process and reports directly to the Chief Financial Officer (CFO) of the Company. Discussions of valuation processes and results are held between the finance team and CFO on regular basis. Investment valuation is placed before the members of the board at least once every three months which is in line with the Company''s quarterly reporting periods.
f) Fair value of financial assets and liabilities measured at amortised cost
For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts are a reasonable approximation of their fair value. Such instruments include cash and bank balances, bank deposits, security deposits, trade and other receivables, and trade and other payable.
Advance to related parties and security deposits are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these financial assets. Accordingly, fair value of such instruments is not materially different from their carrying amounts
34. FINANCIAL RISK MANAGEMENT
Risk management is an integral part of the business practices of the Company. The Company''s senior management has the overall responsibility for the establishment and oversight of the Company''s risk policies. These risk management policies are reviewed regularly to reflect changes in market conditions and the Company''s activities.
The objective is that these financial risks are identified, measured and managed in accordance with the Company''s policies in a timely manner. The activities are designed to:
⢠protect the Company''s financial results and position from financial risks;
⢠maintain market risks within acceptable parameters, while optimising returns;
⢠protect the Company''s financial investments, while maximising returns.
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. Credit risk arises mainly from cash and cash equivalents, deposits with banks, trade and other receivable, loans measured at amortised cost.
Expected credit loss methodology:
Ind As 109 outlines a âthree-stageâ model for impairment based on changes in credit quality since initial recognition as summarised below:
⢠Stage 1 - A financial instrument that is not credit impaired on initial recognition is classified in ''Stage 1'' and has its credit risk continuously monitored by the Company. The Company has established credit quality review process which considers net asset position, financial strength and leverage; operational & financial performance; cash flows, etc. in identification of creditworthiness of counterparties.
⢠Stage 2 - Financial instruments with significant increase in credit risk, but not yet deemed to be credit impaired are moved to Stage 2.
⢠Stage 3 - Credit impaired financial instruments are moved to stage 3.
The Company performs internal risk assessment on an individual basis and not on a portfolio basis due to the limited number of counterparties involved. The assessment of credit risk of a loans (including loan commitments) entails estimations as to the likelihood of loss occurring due to default of counterparties. The estimation of credit exposure for risk management purposes is complex and considers expected cash flows and the passage of time.
Default and credit-impaired asset:
The Company defines a financial asset as in default or credit-impaired, when it meets one or more of the following criteria:
- Quantitative criteria:
The borrower is more than 90 days past due on its contractual payments to be considered in default.
- Qualitative criteria:
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial difficulty.
For all financial instruments held by the Company, if the borrower is on the watch list and/or the instrument meets one or more of the following criteria:
⢠Significant increase in credit spread
⢠Significant adverse changes in business, financial and/or economic conditions in which the borrower operates
⢠Actual or expected forbearance or restructuring
⢠Actual or expected significant adverse change in operating results of the borrower
⢠Significant change in collateral value (secured facilities only) which is expected to increase risk of default
⢠Early signs of cash flow/liquidity problems such as delay in servicing of trade creditors/loans Policy for write-off of financial assets
All loans which in the opinion of management are not recoverable are written off. The Company may write off financial assets that are still subject to enforcement activity. The Company still seeks to recover amounts it is legally owed in full, but which have been written off due to no reasonable expectation of full recovery.
Explanation of inputs and assumptions considered in the ECL model:
PD Estimation:
- âProbability of defaultâ (PD) is defined as the probability of whether the borrowers will default on their obligations in the future. For Stage 1, 12 month PD are calculated.
For Stage 2, Lifetime PD are calculated by considering the survival rate of the counterparty for the remaining maturity. For Stage 3, Lifetime PD is taken as 100%.
Exposure at default:
- âExposure at defaultâ (EAD) represents the expected exposure in the event of a default and is the gross carrying amount in case of the financial assets held by the Company.
For the loan commitments, the exposure at default (EAD) is predicted by aggregating total unfunded credit exposure and applying a âcredit conversion factor (CCF)â which considers any further amount that is expected to be lent under arrangement at the time of default. CCF denotes the probability of off-balance sheet exposure (i.e. loan commitment) becoming credit exposure shifting onto the balance sheet if the loan commitment is called.
Loss given default:
- âLoss given defaultâ (LGD) is an estimate of loss from a transaction given that a default occurs. LGD varies by type of counterparty, type and seniority of claim. LGD is expressed as a percentage loss per unit of exposure at the time of default (EAD). LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan.
The Expected Credit Loss (ECL) is measured either on a 12-month (12M) or lifetime basis depending on whether a significant increase in credit risk has occurred since initial recognition or whether an asset is considered to be credit impaired. Expected credit losses are the product of the probability of default (PD), exposure at default (EAD) and loss given default (LGD).
There have been no significant changes in estimation techniques or significant assumptions made during the reporting period.
In determining the ECL, management assesses a range of possible outcomes, taking into account past events, current conditions and the economic outlook. Additional facts and circumstances, that in management''s judgment are considered to have been inadequately addressed in the ECL Model, are taken into consideration through the application of a management overlay framework. ECL adjustments arising from the exercise of the management overlay are subject to a review.
i) Trade and other receivables
Concentrations of credit risk with respect to trade and other receivables are limited, due to the customer base being limited. All trade receivables are reviewed and assessed for default on a individual basis. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.
ii) Other financial assets
The Company maintains exposure in cash and cash equivalents, deposits with banks. Cash and cash equivalents and bank deposits are held with only high rated banks/financial institutions only, therefore credit risk is perceived to be low.
For investment in mutual fund units and venture capital fund units carried at fair value through profit and loss, the Company does not have significant concentration of credit risk.
The maximum exposure at the end of the reporting period is the carrying amount of these investments is '' 347.82 crores (March 31, 2022: '' 301.26 crores).
b) Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the value of a financial asset. The value of a financial asset may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments.
i) Fair value interest rate risk:
Interest rate risk is the risk where the company is exposed to the risk that the fair value or future cash flows of its financial instruments will fluctuate as a result of a changes in market interest rates.
The Company is exposed to interest rate risk from investments held in debt oriented mutual fund units. These funds invests in debt securities. Sensitivity analysis for exposure to interest rate risk in case of units backed by debt securities is not disclosed as there are no investments outstanding as on March 31, 2023 and March 31, 2022.
ii) Foreign currency risk:
The Company does not have any foreign currency exposures in respect of financial assets and financial liabilities as at the balance sheet date.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Prudent liquidity risk management implies maintaining sufficient cash and liquid investments. The Company believes that current cash and bank balances, bank deposits and investments in liquid investments are sufficient to meet liquidity requirements since Company has no external borrowings. Accordingly, liquidity risk is perceived to be low.
The Company introduced IDFC Employee Stock Option Scheme, 2016 (âIDFC ESOS - 2016â) to enable the employees of the Company and its subsidiaries / associates to participate in the future growth and financial success of the IDFC Group. The scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The ESOS provides for grant of stock options to employees [including employees of subsidiary companies and IDFC FIRST Bank Limited (an associate of the Company)] to acquire equity shares of the Company, that will vest in a graded manner and that are to be exercised within a specified period.
The fair value of options granted to the employees of the Company under the ESOS is recognised as an employee benefits expense with a corresponding increase in ''Share Option Outstanding Account'' under ''Other Equity''. The fair value of options granted to the employees of subsidiaries or associate of the Company is recognised as an increase in the investment in the respective subsidiaries or associate, with a corresponding credit to ''Share Option Outstanding Account'' under ''Other Equity'' in accordance with group share based payment guidance under Ind AS 102.
Options are granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the Company. The options granted will vest upon the completion of service condition as specified in scheme in a graded manner. Vested options are exercisable for the period of five years after the vesting.
iii) Fair value of options granted
The fair value at grant date is determined using the Black Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the stock option.
b) Employee stock option scheme (equity settled) - IDFC FIRST Bank Limited
IDFC FIRST Bank Limited (earlier known as IDFC Bank Limited), an indirect associate of the Company, got demerged from the Company under the sanctioned scheme of arrangement in October 2015. Pursuant to Scheme of Demerger, IDFC FIRST Bank Limited has allotted employee stock options to the employees of the Company and it''s subsidiaries. The employee share based payments arrangement between the Company and its associate is outside the scope of Ind AS 102 - Group share based payment arrangement, as associate is not a part of the same group. However, under Ind AS 8, the Company has taken a policy choice to account the said employee share based payments arrangement as per the provisions of Ind AS 102.
Applying Ind AS 102 - Group share based payments arrangement guidance, the fair value of options granted to the employees of the Company is recognised as an employee benefits expense with a corresponding decrease in investment in associate. However, the fair value of options granted to the employees of subsidiaries of the Company is recognised as an increase in the investment in the respective subsidiaries and a decrease in investment in associate.
c) Amounts recognised in statement of profit and loss and investment in subsidiary:
The Company had established an intermediate Non-Operating Financial Holding Company (NOFHC) (i.e. IDFC Financial Holding Company Limited) to hold the investment in IDFC FIRST Bank Limited (an associate of the Company) and other subsidiaries of the Company due to regulatory requirements of RBI. Since the Company does not hold direct investment in its associate and other subsidiaries involved in group, the Company increases or decreases its investment in IDFC Financial Holding Company Limited, to give the effect of increase or decrease in the investment in subsidiary or associate for accounting employee stock options.
i) Total expenses arising from share-based payment transactions recognised in statement of profit and loss as part of employee benefit expense for the year ended March 31, 2023 is '' 0.24 crores (preceding year '' 2.01 crores).
ii) Reversal of expense on account of cancel / lapse of employee stock option of IDFC FIRST Bank Limited which has been recognised in statement of profit and loss as part of employee benefit expense for the year ended March 31, 2023 is '' (2.34 crore) (preceding year '' (0.47 crore)).
e) All transactions were made on normal commercial terms and conditions and at market rates. The average interest rate on the inter corporate deposits taken during the year was 10% (previous year 10%) and average interest rate on the inter corporate deposits given during the previous year was 10%.
f) Disclosure requirements in relation to related party transactions wide- NBFC circular RBI/2022-23/26 DOR.ACC.REC. No.20/21.04.018/2022-23 dated April 19, 2022 are complied.
The Company''s main business is to carry out Investment activity in India. All other activities of the Company revolve around the main business of the Company. Accordingly, there are no separate reportable segments, as per Ind AS 108 âOperating Segment.â Also the Company does not have any geographical segment.
(i) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(ii) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(iii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(iv) No satisfaction of charges are pending to be filed with ROC.
(v) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
(vi) The Company had entered into scheme of arrangement, details of which are disclosed in Note 1A. The Company filed petition with National Company Law Tribunal (NCLT) - Chennai and NCLT has passed the order on November 22, 2022 in favor of the Company.
The Company has given effect to the order and have prepared merged accounts for all the periods appearing in the result. Consequently, all previous periods presented in the statement have been restated.
(vii) There have been no revaluation of Plant, Property and Equipment during the current year.
(viii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(x) The Company has not advanced any loans or advances in the nature of loans to specified persons viz. promoters, directors, KMPs, related parties; which are repayable on demand or where the agreement does not specify any terms or period of repayment.
47 The figures of '' 50,000 or less have been denoted by p.
48 Previous year numbers have been regrouped / rearranged wherever necessary, in order to make them comparable. There are no significant regrouping / reclassification during the year. Also refer note 24 above.
Mar 31, 2022
a) IDFC Financial Holding Company Limited ("IDFC FHCLâ) had filed application u/s 66 (i) of the Companies Act 2013 for reduction of share capital by '' 650 crore on December 12, 2019 with Hon''ble National Company Law Tribunal ("NCLTâ). Hon''ble NCLT, Chennai Branch passed order on February 04, 2021 approving the reduction of share capital and had given time of 30 days to effect the reduction. However the shareholders of IDFC FHCL passed a special resolution in the Extra Ordinary General Meeting held on March 2, 2021 to not give effect to the said capital reduction. Based on the legal advice obtained, IDFC FHCL has communicated its decision of not being able to comply to the NCLT order to the Registrar of companies (âROCâ) vide MGT-14 dated March 02, 2021 and to NCLT vide their letter dated March 02, 2021. No communication has been received by IDFC FHCL from ROC or NCLT upto the date of approval of these financial statements.
b) As part of simplification of corporate structure, the Company along with its three wholly owned subsidiaries viz. IDFC Projects Limited, IDFC Trustee Company Limited and IDFC Alternatives Limited has filed scheme of amalgamation with Official Liquidator (''OL'') - Chennai on December 06, 2021 and to Regional Director (''RD'') /Registrar of Companies (''ROC'') - Chennai through GNL-1 form on December 06, 2021 seeking their objections / suggestions to the said scheme under Section 233 (1) (a) of the Companies Act, 2013 and rules made thereunder. Physical copies of the same have also been filed with the ROC on December 08, 2021.
The ROC, Chennai vide its letter dated February 01, 2022 intimated it''s no observations/suggestions to the aforesaid scheme of amalgamation. Also, the OL of Madras High Court vide its letter dated March 24, 2022, communicated it''s no observations to the aforesaid scheme of amalgamation. Approval from RD is still awaited.
If approval of RD is received post adoption of accounts by the Board of Directors but before the approval by the members in Annual General Meeting, accounts will be reinstated and merged with effect from Appointed Date i.e. April 01, 2021. The reinstated accounts will be approved by the members at Annual General Meeting and the same will be considered for all regulatory and tax compliances.
c) Impairment loss allowance
(i) The Company had made provision of '' 35.62 crore on Novopay Solutions Private Limited (âNovopayâ) (associate of the Company). Performance of Novopay had lead to substantial erosion of its net worth. Accordingly, investment was completley impaired.
(ii) IDFC Projects Limited, a wholly owned subsidiary of the Company has suspended its business operations and there are no definitive future business plans for its commercial operations. The net worth of IDFC Projects Limited has eroded significantly due to accumulated losses from prior years of operation to such an extent that it''s networth has turned negative, the recoverable amount of the entire equity investment is considered to be less than its carrying value. Consequently, in the preceding years the Company had made a provision for impairment of '' 47.05 crore in the statement of profit and loss. Entire Investment in IDFC Projects Limited has been provided for.
(iii) IDFC Foundation, wholly owned subsidiary of the Company is a section 8 company under Companies Act, 2013. Upon winding up or dissolution of IDFC Foundation, if there remains, after satisfaction of all debts and liabilities, any surplus whatsoever, the same shall not be distributed to IDFC Limited but will be transferred to such other company having objects similar to the objects of IDFC Foundation. Accordingly, in the preceding years, the entire investment of '' 13 crores in IDFC Foundation was full provided for by the Company.
a) During the preceding year, based on the Business Transfer Agreement executed on August 14, 2020, windmills has been sold to Champak Pragati Foundation for aggregate consideration of '' 20.34 crore. The Company had recognised loss of '' 16.57 crore on sale on Windmill. Post the sale of Windmills, transfer application was made to Rajasthan Renewable Energy Corporation (RRECL) for transfer of Power Purchase Agreement (PPA) in favour of the buyer which has been transferred in current year. The Company had received part consideration and balance amount of '' 2.32 crore was to be received post PPA transfer, which the Company has received during the current financial year. As on March 31, 2022 there is no balance outstanding pertaining to sale of Windmills.
b) Terms and 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.
c) Shares reserved for issue under options
During the year ended March 31, 2022 the Company issued 77,626 equity shares of face value of '' 10 each pursuant to exercise of stock option by employees under the employee stock option scheme.
Information relating to the IDFC Limited Employee Stock Option Scheme (ESOS), including details regarding options issued, exercised and lapsed during the year and options outstanding at the end of the reporting period is set out in note 37
18C. NATURE AND PURPOSE OF SPECIAL RESERVES
a) Securities premium
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
b) General reserve
Under the earstwhlie Companies Act, 1956, general reserve was created through an annual transfer of net income at specified percentage in accordance with applicable regulations. The purpose of these transfer was to ensure that if dividend distribution in the given year is more than 10% of paid up capital of the Company of that year, then the total dividend distribution is less than the total distributable results of the year. Consequent to introduction of Companies Act, 2013, the requirement to transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of the Companies Act, 2013.
c) Special reserves u/s 45-IC of RBI Act, 1934
As per section 45-IC of RBI Act, 1934, Every non-banking financial company (NBFC) shall create a reserve fund and transfer therein a sum not less than twenty per cent (20%) of its net profit every year as disclosed in the profit and loss account and before any dividend is declared. No appropriation of any sum from the reserve fund shall be made by the non-banking financial company except for the purpose as may be specified by RBI.
d) Share options outstanding account
The share options outstanding account is used to recognise the grant date fair value of options issued to employees under Employee Stock Option Scheme (ESOS) over the vesting period. (Refer Note 37).
e) Special reserve u/s. 36(1)(viii) of the Income-tax Act, 1961
As per section 36(1)(viii) of Income tax act, 1961, deduction shall be allowed in respect of any special reserve created and maintained by specified entities, for an amount not exceeding twenty percent (20%) of the profits derived from eligible business computed under the head âProfits and gains of business or professionâ (before making any deduction under this clause) carried to such reserve account.
Provided that where the aggregate of the amounts carried to such reserve account from time to time exceeds twice the amount of the paid up share capital and of the general reserves of the specified entity, no allowance under this clause shall be made in respect of such excess.
Before demerger of its financing undertaking, the Company was a notified public financial institution engaged in lending to infrastructure projects. The Company had created special reserve u/s 36(1)(viii) of the Income Tax Act, 1961 on profits derived from eligible business. The Company has claimed deduction for the creation of these reserves in earlier years. Section 41(4A) states that, âWhere a deduction has been allowed in respect of any special reserve created and maintained under clause (viii) of sub- section (1) of section 36, any amount subsequently withdrawn from such special reserve shall be deemed to be the profits and gains of business or profession and accordingly be chargeable to income-tax as the income of the previous year in which such amount is withdrawn.â During the preceding year, based on the legal opinion provided by the external legal advisor and in consultation with the tax consultant, the Company has transferred excess reserves of '' 411.02 crores on which deduction was not allowed in any of the previous years to âSurplus in the statement of profit and lossâ. The transfer of reserves have been approved by the Board of Directors.
Based on the Appeal received from the Government of India, Ministry of Corporate Affairs (MCA), the Company had additionally contributed '' 0.55 crore towards Prime Minister''s CARES fund in FY 19-20. Also MCA had issued a circular dated May 20, 2021 - on offsetting the excess CSR spent for financial year 2019-20 in next financial year. Accordingly excess contribution of '' 0.55 crore made in FY 19-20 has been set off against CSR liability of FY 20-21.
d) Deferred tax expenses of the preceding year include reversal of deferred tax of '' 8.15 crores created on Windmill which has been sold during the preceding year.
e) The Direct Tax Vivad Se Vishwas (VSV) Act, 2020 introduced a dispute resolution scheme, which is applicable to all appeals / petitions filed by the tax payer on the income tax department, which were pending until January 31, 2020, before any appellate forum. Under the Scheme, a taxpayer can settle a litigation pending before any forum by paying the tax on the disputed income and get a full waiver of interest and / or penalty. During the preceding year the Company had settled its liability for Assessment Year 2017-18 by paying '' 1.53 crores under VSV scheme.
The Company has a defined benefit gratuity plan in India (funded). The Company''s defined benefit gratuity plan is a final salary plan for Indian employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age.
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
28. SEGMENT INFORMATION
The Company''s main business is to carry out Investment activity in India. All other activities of the Company revolve around the main business of the Company. Accordingly, there are no separate reportable segments, as per Ind AS 108 âOperating Segment.â Also the Company does not have any geographical segment.
29. OTHER NOTES
i) Reserve Bank of India (âRBIâ) has, vide its letter No.DOR..HOL.No.SUO-75590/16.01.146/2021-22 dated July 20, 2021, clarified that after the expiry of lock-in period of 5 years, IDFC Limited can exit as the promoter of IDFC FIRST Bank Limited.
In relation with note above, since the five years of lock- in period is completed, IDFC Financial Holding Company Limited (IDFC FHCL) had written letters to IDFC FIRST Bank Limited (âIDFC FIRST Bankâ) with respect to Unlocking Value for shareholders of the Company. The Board of Directors of IDFC FIRST Bank at their meeting held on December 30, 2021 has confirmed that they are âIn-principleâ in favour of Merger of ''IDFC'' and ''IDFC FHCL'' with''IDFC FIRST Bank''. The said corporate restructuring activity shall be subject to approval by the Board of Directors of entities involved, shareholders, creditors and other necessary statutory / regulatory approvals.
ii) The Board of Directors of the Company and IDFC FHCL at their respective meetings held on April 06, 2022, have inter alia considered binding bids received in connection with divestment of IDFC Asset Management Company Limited (''IDFC AMC'') along with IDFC AMC Trustee Company Limited (''IDFC AMC Trustee'') and have approved sale of the entire shareholding of IDFC AMC and IDFC AMC Trustee held by the Company to a consortium comprising of Bandhan Financial Holding Limited, Lathe Investment Pte. Ltd. (affiliate of GIC), Tangerine Investments Limited, Infinity Partners (affiliates of ChrysCapital) (''Proposed Transaction''). The consideration for the Proposed Transaction is '' 4,500 crores on a fully diluted basis and subject to customary price adjustments at the closure.
iii) On March 25, 2021 the Company received letter from Government of India, Ministry of Finance , Department of Financials Services informing about the withdrawal of Mr. Anshuman Sharma and Mr. Soumyajit Ghosh as Nominee directors from the Board of IDFC Limited with immediate effect.
Pursuant to Regulation 17(1)(c) of SEBI Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, the Board of Directors of IDFC Limited shall comprise of not less than six directors. Due to sudden and immediate withdrawal of Government Nominees from the Board, the number of Directors on the Board of the Company reduced from 6 to 4 and the composition of the Board as well as constitution of Board''s committees were impacted. As on March 31, 2021 the Company was in process of appointing New Directors, other than Government Nominee, on the Board to comply with Regulation 17(1)(c) of SEBI LODR Regulations 2015.
Subsequently, the Company based on the recommendation of Nomination and Remuneration Committee at its meeting held on May 25, 2021 approved nomination of Mr. Jaimini Bhagwati and Mr. Anil Singhvi as an additional director in the category of independent director for a period of 3 years. These nominations are approved by the shareholders of the Company at the Annual General Meeting held on September 22, 2021.
a) The Company had issued letter of comfort to IDFC Foundation - wholly owned subsidiary of the Company, if there is any short fall in meeting its obligations towards its contingent liabilities amounting to '' 14.57 crore and any related penalty. The comfort letter is valid till April 30, 2022.
b) IDFC Projects Limited, a wholly owned subsidiary of the Company holds 19.90% stake on fully diluted basis in Jetpur Somnath Tollways Private Limited (âJSTPLâ). JSTPL had executed the concession agreement with National Highway Authority of India (âNHAIâ) for the purpose of four laning of 123.45 km Jetputur Somnath Section of NH-8D in the state of Gujarat under NHDP phase III on Build Operate Transfer (BOT) (TOLL) on DBFO pattern. Due to certain disputes, JSTPL along with its lenders had initiated arbitration proceeding against NHAI to make payment of 90% of the debt due under terms of the arrangement. The Hon''ble Supreme Court of India directed NHAI to pay '' 348.60 crore in the Escrow Account with the Lead Lender, Punjab National Bank (PNB) within 6 (six) weeks from January 05, 2018. Following that, NHAI had released the amount of '' 348.60 crore on January 29, 2018 which was distributed to lenders on proportionate basis. However, JSTPL had provided a bank guarantee of the amount of '' 348.60 crore to NHAI in compliance with order of the Court.
The Hon''ble Delhi High Court pronounced the judgement on January 4, 2021 in favour of JSTPL. NHAI challenged this judgment under section 37 and next hearing was scheduled on April 29, 2021 which got adjourned and is rescheduled on July 19, 2021. JSTPL filed execution petition on January 13, 2021 and based on the petition filed Hon''ble Delhi High Court directed NHAI to handover the original bank guarantee before March 15, 2021. JSTPL collected the bank guarantee from NHAI on March 17, 2021 and returned it to PNB. Accordingly IDFC Projects share of commitment (19.90% on fully dilutive basis) which was counter guaranteed by IDFC for '' 69.37 crore was disclosed as commitments in the preceding year. However, as bank guarantee is revoked, it is no more shown as outstanding commitment. Consequently, provision on loan commitment created in IDFC Limited for '' 22.63 crore was also revered in preceding year.
c) The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and postemployment received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India and subsequently on November 13, 2020 draft rules were published and invited for stakeholders'' suggestions. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
32. EVENTS OCCURRING AFTER THE REPORTING PERIOD
The Board of the Directors of the Company at its meeting held on April 06, 2022 has considered and declared an Interim Dividend of 10% i.e. '' 1 per equity share of the Company. The interim dividend was paid to the eligible shareholders on May 02, 2022, whose names appeared on the Register of Members of the Company as at close of day on April 10, 2022 being the record date for the purpose of the aforesaid interim dividend.
33. CAPITAL MANAGEMENT
The Company maintains a capital base to cover risks inherent in the business and is meeting capital adequacy requirements of the regulator, Reserve Bank of India (RBI) of India. The adequacy of the Company''s capital is monitored using, among other measures, the regulations issued by RBI. Company has complied in full with all its externally imposed capital requirements over the reported period. The primary objectives of the Company''s capital management policy are to ensure that the Company complies with externally imposed capital requirements and healthy capital ratios in order to support its business and to maximise shareholder value.
The Company manages its capital structure and makes adjustments to it according to changes in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend payment to shareholders, return capital to shareholders or issue capital securities. No changes have been made to the objectives, policies and processes from the preceding years. However, they are under constant review by the Board.
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
i) There are no transfers between levels 1, 2 and 3 during the year.
ii) The Companies policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
The Company uses the following hierarchy for determining and disclosing the fair value of financial assets by valuation technique:
The fair value of financial instruments are classified into three categories i.e. Level 1, 2 or 3 depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities (level 1 measurements) and lowest priority to unobservable inputs (level 3 measurements).
The hierarchies used are as follows:
Level 1: Hierarchy includes financial instruments measured using quoted prices in an active market.
Level 2: The fair value of financial instruments that are not traded in an active market (such as mutual fund units) is determined using observable market data and not the entity specific estimates. These investments are valued at closing Net Asset Value (NAV), which represents the repurchase price at which the issuer will redeem the units from investors. Since all significant inputs required to fair value an instrument are observable, the investments are included in Level 2.
Level 3: Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
b) Valuation technique used to determine fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e., an exit price), regardless of whether that price is directly observable or estimated using a valuation technique.
Specific valuation techniques used to value financial instruments include:
⢠the fair value of the mutual fund units is determined using observable NAV at the reporting date as declared by the issuer.
⢠the fair value of the venture capital units (VCFs) is determined using NAV at the reporting date as declared by the issuer. *
⢠the fair value of unlisted equity shares are has been valued by an independent valuer.
⢠Considering the illiquidity discount, the Company has provided for additional diminution over and above the NAV communicated by the VCFs in order to appropriately reflect the fair value as on March 31, 2022. During preceding year with respect to the Covid-19 pandemic and the stress in various sectors of the economy the Company had taken appropriate haircuts and provided for an additional diminution over and above the NAV communicated by the VCFs in order to appropriately reflect the fairvalue as on March 31, 2021.
c) Valuation Process
In order to assess Level 3 valuations as per Company''s investment policy, the management relies on the NAVs issued by the VCF''s.
The finance team performs the above process and reports directly to the Chief Financial Officer (CFO) of the Company. Discussions of valuation processes and results are held between the finance team and CFO on regular basis. Investment valuation is placed before the members of the board at least once every three months which is in line with the Company''s quarterly reporting periods.
f) Fair value of financial assets and liabilities measured at amortised cost
For financial assets and financial liabilities that have a short-term maturity (less than twelve months), the carrying amounts are a reasonable approximation of their fair value. Such instruments include cash and bank balances, bank deposits, security deposits, short term loans and advances, trade and other receivables, trade and other payable, and debt securities.
Advance to related parties and security deposits are evaluated by the Company based on parameters such as interest rates and individual creditworthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these financial assets. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
Risk management is an integral part of the business practices of the Company. The Company''s senior management has the overall responsibility for the establishment and oversight of the Company''s risk policies. These risk management policies are reviewed regularly to reflect changes in market conditions and the Company''s activities.
The objective is that these financial risks are identified, measured and managed in accordance with the Company''s policies in a timely manner. The activities are designed to:
⢠protect the Company''s financial results and position from financial risks;
⢠maintain market risks within acceptable parameters, while optimizing returns;
⢠protect the Company''s financial investments, while maximising returns.
a) Credit risk
Credit risk is the risk of suffering financial loss, should any of the Company''s customers, clients or market counterparties fail to fulfil their contractual obligations to the Company. Credit risk arises mainly from cash and cash equivalents, deposits with banks, trade and other receivable, loans measured at amortised cost.
Expected credit loss methodology:
Ind As 109 outlines a âthree-stageâ model for impairment based on changes in credit quality since initial recognition as summarised below:
⢠Stage 1 - A financial instrument that is not credit impaired on initial recognition is classified in ''Stage 1'' and has its credit risk continuously monitored by the Company. The Company has established credit quality review process which considers net asset position, financial strength and leverage; operational & financial performance; cash flows, etc. in identification of creditworthiness of counterparties.
⢠Stage 2 - Financial instruments with significant increase in credit risk, but not yet deemed to be credit impaired are moved to Stage 2.
⢠Stage 3 - Credit impaired financial instruments are moved to stage 3.
The Company performs internal risk assessment on an individual basis and not on a portfolio basis due to the limited number of counterparties involved. The assessment of credit risk of a loans (including loan commitments) entails estimations as to the likelihood of loss occurring due to default of counterparties. The estimation of credit exposure for risk management purposes is complex and considers expected cash flows and the passage of time.
Default and credit-impaired asset:
The Company defines a financial asset as in default or credit-impaired, when it meets one or more of the following criteria:
The borrower is more than 90 days past due on its contractual payments to be considered in default.
The borrower meets unlikeliness to pay criteria, which indicates the borrower is in significant financial difficulty.
For all financial instruments held by the Company, if the borrower is on the watch list and/or the instrument meets one or more of the following criteria:
⢠Significant increase in credit spread
⢠Significant adverse changes in business, financial and/or economic conditions in which the borrower operates
⢠Actual or expected forbearance or restructuring
⢠Actual or expected significant adverse change in operating results of the borrower
⢠Significant change in collateral value (secured facilities only) which is expected to increase risk of default
⢠Early signs of cash flow/liquidity problems such as delay in servicing of trade creditors/loans
Policy for write-off of financial assets
All loans which in the opinion of management are not recoverable are written off. The Company may write off financial assets that are still subject to enforcement activity. The Company still seeks to recover amounts it is legally owed in full, but which have been written off due to no reasonable expectation of full recovery.
Explanation of inputs and assumptions considered in the ECL model:
PD Estimation:
- âProbability of defaultâ (PD) is defined as the probability of whether the borrowers will default on their obligations in the future. For Stage 1, 12 month PD are calculated.
For Stage 2, Lifetime PD are calculated by considering the survival rate of the counterparty for the remaining maturity.
For Stage 3, Lifetime PD is taken as 100%.
Exposure at default:
- âExposure at defaultâ (EAD) represents the expected exposure in the event of a default and is the gross carrying amount in case of the financial assets held by the Company.
For the loan commitments, the exposure at default (EAD) is predicted by aggregating total unfunded credit exposure and applying a âcredit conversion factor (CCF)â which considers any further amount that is expected to be lent under arrangement at the time of default. CCF denotes the probability of off-balance sheet exposure (i.e. loan commitment) becoming credit exposure shifting onto the balance sheet if the loan commitment is called.
Loss given default:
- Loss given default (LGD) is an estimate of loss from a transaction given that a default occurs. LGD varies by type of counterparty, type and seniority of claim. LGD is expressed as a percentage loss per unit of exposure at the time of default (EAD). LGD is calculated on a 12-month or lifetime basis, where 12-month LGD is the percentage of loss expected to be made if the default occurs in the next 12 months and Lifetime LGD is the percentage of loss expected to be made if the default occurs over the remaining expected lifetime of the loan.
In case of loan commitment to IDFC Projects, on account of limited credit information available and no prior history with other forms of operations, the Company has used the standard LGD prescribed in the RBI norms for Capital Adequacy â âInternal Ratings Based (IRB) Approach to Calculate Capital Requirement for Credit Riskâ after giving considerations to the required threshold levels of collateralization.
The Expected Credit Loss (ECL) is measured either on a 12-month (12M) or lifetime basis depending on whether a significant increase in credit risk has occurred since initial recognition or whether an asset is considered to be credit impaired. Expected credit losses are the product of the probability of default (PD), exposure at default (EAD) and loss given default (LGD).
There have been no significant changes in estimation techniques or significant assumptions made during the reporting period.
In determining the ECL, management assesses a range of possible outcomes, taking into account past events, current conditions and the economic outlook. Additional facts and circumstances, that in management''s judgment are considered to have been inadequately addressed in the ECL Model, are taken into consideration through the application of a management overlay framework. ECL adjustments arising from the exercise of the management overlay are subject to a review.
Credit risk exposure:
The following table contains an analysis of Company''s exposure to credit risk towards loan commitments for which and ECL allowance is recognised:
ii) Trade and other receivables
Concentrations of credit risk with respect to trade and other receivables are limited, due to the customer base being limited. All trade receivables are reviewed and assessed for default on a individual basis. Historical experience of collecting receivables of the Company is supported by low level of past default and hence the credit risk is perceived to be low.
The Company maintains exposure in cash and cash equivalents, deposits with banks. Cash and cash equivalents and bank deposits are held with only high rated banks/financial institutions only, therefore credit risk is perceived to be low.
For investment in mutual fund units and venture capital fund units carried at fair value through profit and loss, the Company does not have significant concentration of credit risk.
The maximum exposure at the end of the reporting period is the carrying amount of these investments '' 116.87 crores (March 31, 2021: '' 67.00 crores)
The Company continues to provide the financial support to its Wholly Owned Subsidiay âIDFC Projects Limitedâ to meet its obligations as and when they fall due for payment; as the networth of the subsidiary is fully errorded. During the preceding year, the Company had given an advance of '' 0.02 crore which has been fully provided.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the value of a financial asset. The value of a financial asset may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments.
i) Fair value interest rate risk:
Interest rate risk is the risk where the company is exposed to the risk that the fair value or future cash flows of its financial instruments will fluctuate as a result of a changes in market interest rates.
The Company is exposed to interest rate risk from investments held in debt oriented mutual fund units. These funds invests in debt securities. Sensitivity analysis for exposure to interest rate risk in case of units backed by debt securities is not disclosed as there are no investments outstanding as on March 31, 2022 and March 31, 2021.
ii) Foreign currency risk:
The Company does not have any foreign currency exposures in respect of financial assets and financial liabilities as at the balance sheet date.
iii) Price risk:
The price risk arises from investments in venture capital fund units classified in the balance sheet as financial instruments measured at fair value through profit and loss. The future uncertain changes in the Net Asset Value of the Company''s investment exposes the Company to the price risk.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Prudent liquidity risk management implies maintaining sufficient cash and liquid investments. The Company believes that current cash and bank balances, bank deposits and investments in liquid investments are sufficient to meet liquidity requirements since Company has no external borrowings. Accordingly, liquidity risk is perceived to be low.
37. EMPLOYEE SHARE BASED PAYMENTS
a) Employee stock option scheme (equity settled) - IDFC Limited
The Company introduced IDFC Employee Stock Option Scheme, 2016 (âIDFC ESOS - 2016â) to enable the employees of the Company and its subsidiaries / associates to participate in the future growth and financial success of the IDFC Group. The scheme is in compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014. The ESOS provides for grant of stock options to employees [including employees of subsidiary companies and IDFC FIRST Bank Limited (an associate of the Company)] to acquire equity shares of the Company, that will vest in a graded manner and that are to be exercised within a specified period.
The fair value of options granted to the employees of the Company under the ESOS is recognised as an employee benefits expense with a corresponding increase in ''Share Option Outstanding Account'' under ''Other Equity''. The fair value of options granted to the employees of subsidiaries or associate of the Company is recognised as an increase in the investment in the respective subsidiaries or associate, with a corresponding credit to ''Share Option Outstanding Account'' under ''Other Equity'' in accordance with group share based payment guidance under Ind AS 102.
Options are granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share of the Company. The options granted will vest upon the completion of service condition as specified in scheme in a graded manner. Vested options are exercisable for the period of five years after the vesting.
b) Employee stock option scheme (equity settled) - IDFC FIRST Bank Limited
IDFC FIRST Bank Limited (earlier known as IDFC Bank Limited), an indirect associate of the Company, got demerged from the Company under the sanctioned scheme of arrangement in October 2015. Pursuant to Scheme of Demerger, IDFC FIRST Bank Limited has allotted employee stock options to the employees of the Company and it''s subsidiaries. The employee share based payments arrangement between the Company and its associate is outside the scope of Ind AS 102 - Group share based payment arrangement, as associate is not a part of the same group. However, under Ind AS 8, the Company has taken a policy choice to account the said employee share based payments arrangement as per the provisions of Ind AS 102.
Applying Ind AS 102 - Group share based payments arrangement guidance, the fair value of options granted to the employees of the Company is recognised as an employee benefits expense with a corresponding decrease in investment in associate. However, the fair value of options granted to the employees of subsidiaries of the Company is recognised as an increase in the investment in the respective subsidiaries and a decrease in investment in associate.
c) Amounts recognised in statement of profit and loss and investment in subsidiary:
The Company had established an intermediate Non-Operating Financial Holding Company (NOFHC) (i.e. IDFC Financial Holding Company Limited) to hold the investment in IDFC FIRST Bank Limited (an associate of the Company) and other subsidiaries of the Company due to regulatory requirements of RBI. Since the Company does not hold direct investment in its associate and other subsidiaries involved in group, the Company increases or decreases its investment in IDFC Financial Holding Company Limited, to give the effect of increase or decrease in the investment in subsidiary or associate for accounting employee stock options.
i) Total expenses arising from share-based payment transactions recognised in statement of profit and loss as part of employee benefit expense for the year ended March 31, 2022 is '' 2.01 crores (preceding year '' Nil).
ii) Reversal of expense on account of cancel / lapse of employee stock option of IDFC FIRST Bank Limited which has been recognised in statement of profit and loss as part of employee benefit expense for the year ended March 31, 2022 is '' (0.47 crore) crores (preceding year '' (0.28 crore)).
44 The disclosure on the following matters required under Schedule III as amended on March 24, 2021 not being relevant or applicable in case of the Company, same are not covered:
(i) The Company has not traded or invested in crypto currency or virtual currency during the financial year.
(ii) No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
(iii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
(iv) No satisfaction of charges are pending to be filed with ROC.
(v) There are no transactions which are not recorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.
(vi) The Company has entered into scheme of arrangement, details of which are disclosed in Note 1A. As approval from RD is still pending, no accounting impact has been given in current or previous financial year.
(vii) There have been no revaluation of Plant, Property and Equipment during the current year.
(viii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(x) The Company has not advanced any loans or advances in the nature of loans to specified persons viz. promoters, directors, KMPs, related parties; which are repayable on demand or where the agreement does not specify any terms or period of repayment.
47 IMPACT OF COVID
The Company is an investing company for the group. The Company has its investments in subsidiaries and associates of the group. In lights of the Covid-19 outbreak and based on the information available upto the date of the approval of these financial statements, the Company has assessed its liquidity position for the next one year.
The Company has further assessed the recoverability and carrying value of its assets comprising of Property, Plant and Equipment and Investments as at March 31, 2022, and has concluded that there are no material adjustments required in the financial information, other than those already considered. However, the impact assessment of COVID-19 is a continuing process and the Company will continue to monitor the same. The Company will also monitor any material changes to future economic conditions.
48 The figures of '' 50,000 or less have been denoted by p.
49 Previous year numbers have been regrouped / rearranged wherever necessary, in order to make them comparable.
Mar 31, 2018
01 CORPORATE INFORMATION
IDFC Limited (âthe Companyâ) is a company incorporated in India and is a Non Banking Finance Company (NBFC) regulated by the Reserve Bank of India (âRBIâ). It was operating as an Infrastructure Finance Company, i.e. financing infrastructure projects in sectors like energy, telecommunication, transportation, commercial and industrial projects including hospital, education, tourism and hotels upto SeptembeRs.30, 2015. The Company had received in principle approval from the RBI to set up a new private sector bank in April 2014. Since OctobeRs.1, 2015 the company is operating as NBFC - Investment Company.
02 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 (âthe 2013 Actâ) 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 follows the prudential norms for income recognition, asset classification and provisioning as prescribed by the RBI for non-deposit taking Non-banking Finance Companies (NBFC-ND). The accounting policies adopted in preparation of financial statements are consistent with those followed in the previous year.
Based on the nature of 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.
(A) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors on the board meeting dated April 27, 2018 is subject to approval of the shareholders at the ensuing Annual General Meeting. During the year, the Board of Directors proposed dividend of Rs.0.75 per share (7.5%) [Previous Year Rs.0.25 per share (2.50%)].
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.
3 IN ACCORDANCE WITH ACCOUNTING STANDARD 15 ON âEMPLOYEE BENEFITSâ AS NOTIFIED UNDER THE ACCOUNTING STANDARDS SPECIFIED UNDER SECTION 133 OF THE 2013 ACT, THE FOLLOWING DISCLOSURES HAVE BEEN MADE:
i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds (see note 21) :
ii. The details of the Companyâs post - retirement benefit plans for gratuity for its employees are given below which are certified by the actuary and relied upon by the auditors :
The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
4 The Company is operating as NBFC - Investment Company. The Company does not have any geographic segments. As such, there are no separate reportable segments as per Accounting Standards 17 on âSegment Reportingâ under specified Section 133 of the 2013 Act.
5 As per Accounting Standard 18 on âRelated Party Disclosuresâ as notified under the Accounting Standards specified under section 133 of the 2013 Act, the related parties of the Company are as follows:
I. SUBSIDIARIES:
(a) Direct
IDFC Foundation
IDFC Financial Holding Company Limited IDFC Projects Limited
(b) Through subsidiaries
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
IDFC Capital (USA) Inc.
IDFC Capital (Singapore) Pte. Ltd.
IDFC Investment Managers (Mauritius) Limited IDFC Securities Singapore Pte. Limited IDFC Bharat Limited
II. JOINTLY CONTROLLED ENTITIES:
(a) Through subsidiaries
Delhi Integrated Multi-Modal Transit System Limited
Infrastructure Development Corporation (Karnataka) Limited
Uttarakhand Infrastructure Development Company Limited (under liquidation)*
Rail Infrastructure Development Company (Karnataka) Limited*
III. ASSOCIATES:
(a) Direct
Novopay Solutions Private Limited
(b) Through subsidiaries
Jetpur Somnath Tollways Private Limited Feedback Infra Private Limited (upto March 19, 2018)*
Millennium City Expressway Private Limited*
IV. KEY MANAGEMENT PERSONNEL:
(a) Mr. Sunil Kakar - Managing Director & CEO (w.e.f July 16, 2017)
(b) Mr. Vikram Limaye - Managing Director & CEO (upto July 15, 2017)
The Company is in process of appointing Chief Financial Officer as required u/s 203 of the Companies Act, 2013 and expects to appoint these Key managerial personnel in financial yeaRs.2018-2019.
* No transactions during the year
I) The nature and volume of transactions of the Company with the above mentioned related parties are as summarised below:
6 CORPORATE SOCIAL RESPONSIBILITY (CSR)
ii Amount required to be spent by the Company on Corporate Social Responsibility (CSR) related activities during the year Rs.0.27 crore (Previous year Rs.1.25 crore).
ii Amount spent towards Company on Corporate Social Responsibility (CSR) during the year and recognised as expense in the statement of profit and loss on CSR related activities is Rs.0.27 crore (Previous year Rs.1.25 crore), which comprise of following:
7 In accordance with Accounting Standard 20 on âEarnings Per Shareâ as notified under the Accounting Standards specified under Section 133 of the 2013 Act:
i. The basic earnings per share has been calculated based on:
ii. The reconciliation between the basic and the diluted earnings per share is as follows:
iii. The basic earnings per share has been computed by dividing the net profit / (loss) after tax for the year available for equity shareholders by the weighted average number of equity shares for the respective years, whereas the diluted earnings per share has been computed by dividing the net profit / (loss) 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:
8 PROPOSED DIVIDEND
The Board of Directors, in the meeting held on April 27, 2018 have proposed dividend of Rs.0.75 per equity share (7.5%) amounting to Rs.119.73 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 âContingencies and Events occurring after the Balance Sheet dateâ 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 Rs.119.73 crore (including corporate dividend tax) and the balance of other liabilities is lower by an equivalent amount as on March 31, 2018.
9 Disclosures relating to Specified Bank Notes (âSBNââ)
(a) The disclosures relating to Specified Bank Notes (ââSBNââ) is not applicable to the Company during the year.
(b) Details of Specified Bank Notes (SBNs) held and transacted during the period NovembeRs.8, 2016 to DecembeRs.30, 2016 is provided in table below
10 The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBS (PD) CC No. 008/03.10.119/ 2016-17 dated July 1, 2016) :
11 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.008/03.10.119/2016-17 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 products,
(v) Detail of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC,
(vi) Unsecured Advances,
(vii) Concentration of Deposits, Advances, Exposures and NPAs,
(viii) Sector-wise NPAs.
(ix) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad),
(x) Off-balance sheet SPVs sponsored.
12 The figures for the previous year have been reclassified, wherever necessary to conform with the current yearâs classification / disclosure,
13 The figures of Rs.50,000 or less have been denoted by B,
Mar 31, 2017
1. REMITTANCE IN FOREIGN Currencies FOR DIVIDENDS
The Company has not remitted any amount in foreign currencies on account of dividends paid during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by / on behalf of non-resident Shareholders. The particulars of dividends paid to non-resident Shareholders, are as under:
The estimate of future salary increase, considered in the actuarial valuation takes account of inflation, seniority, promotion and other relevant factors.
Note:
(a) From the effective date of demerger, all employees of the Transferor Company pertaining to the Financing Undertaking and who were in the employment of the Transferor Company were transferred to the Transferee Company. Consequently the corresponding gratuity liability and plan assets had been transferred to the Transferee Company based on actuarial valuation.
2 The Company is operating as NBFC - Investment Company. The Company does not have any geographic segments. As such, there are no separate reportable segments as per Accounting Standards 17 on ''Segment Reporting'' specified under Section 133 of the 2013 Act.
3 As per Accounting Standard 18 on ''Related Party Disclosures'' as notified under the Accounting Standards specified under section 133 of the 2013 Act, the related parties of the Company are as follows:
I. Subsidiaries:
(a) Direct
IDFC Foundation
IDFC Financial Holding Company Limited IDFC Projects Limited
(b) Through subsidiaries
IDFC Alternatives Limited IDFC Asset Management Company Limited IDFC AMC Trustee Company Limited IDFC Bank Limited
IDFC Infrastructure Finance Limited (Formerly known as IDFC Infra Debt Fund Limited)
IDFC Securities Limited IDFC Trustee Company Limited IDFC Capital (USA) Inc.
IDFC Capital (Singapore) Pte. Ltd.
IDFC Investment Managers (Mauritius) Limited IDFC Securities Singapore Pte. Limited IDFC Finance Limited (up to March 31, 2016)
IDFC Bharat Limited (Formerly known as Grama Vidiyal Micro Finance Limited) (w.e.f October 13, 2016)
II. JOINTLY CONTROLLED ENTITIES:
(a) Through subsidiaries
Delhi Integrated Multi-Modal Transit System Limited Infrastructure Development Corporation (Karnataka) Limited Uttarakhand Infrastructure Development Company Limited (under liquidation) Rail Infrastructure Development Company (Karnataka) Limited
III. ASSOCIATES:
(a) Through subsidiaries
Jetpur Somnath Tollways Private Limited Feedback Infra Private Limited Millennium City Expressway Private Limited
IV. KEY MANAGEMENT personnel:
(a) Mr. Vikram Limaye - Managing Director & CEO
(b) Mr. Rajiv B. Lall - Executive Chairperson (up to September 30, 2015)
iii. The basic earnings per share has been computed by dividing the net profit / (loss) after tax for the year available for equity
Shareholders by the weighted average number of equity shares for the respective years, whereas the diluted earnings per share has been computed by dividing the net profit / (loss) 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: [see note 3(k)]
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
4 proposed DIVIDEND
The Board of Directors, in the meeting held on April 28, 2017 have proposed dividend of '' 0.25 per equity share (2.50%) amounting to '' 39.90 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 recognized as a liability as on March 31, 2017. Accordingly, the balance of Reserves and surplus is higher by Rs, 39.90 crore (including corporate dividend tax) and the balance of other liabilities is lower by an equivalent amount as on March 31, 2017.
(b) Draw Down from Reserves
During the previous year, debenture redemption reserve was not created as long term infrastructure bonds have been transferred to IDFC Bank Limited upon demerger of Financing undertaking and as provided in the Scheme of Arrangement entire Debenture Redemption Reserve amount has been transferred to General Reserve. [see note 5(c)]
During the previous year in accordance with the RBI approval, an amount equivalent to Rs, 1,634.80 crore is transferred from the non distributable Statutory Reserve to the balance of the Surplus in Statement of Profit and Loss in Reserves & surplus. [see note 5(e) & 25]
5 Considering the nature of the business of the entity and transactions entered during the year ended March 31, 2017 and March 31, 2016 following disclosures required as per NBFC circular DNBR (PD) CC.No.008/03.10.119/2016-17 are not applicable to the Company and hence are not disclosed:
(i) Disclosures regarding Derivatives.
(ii) Disclosures relating to Securitization.
(iii) Exposure to Real Estate Sector
(iv) Details of financing of parent company products.
(v) Detail of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC.
(vi) Unsecured Advances.
(vii) Concentration of Deposits, Advances, Exposures and NPAs.
(viii) Sector-wise NPAs.
(ix) Overseas Assets (for those with Joint Ventures and Subsidiaries abroad).
(x) Off-balance sheet SPVs sponsored.
6 The following additional information is disclosed in terms of the RBI circular (Ref. No. RBI/2009-2010/356/IDMD/4135/11.08.43/2009-10) dated March 23, 2010:
7 The figures for the previous year have been reclassified, wherever necessary to conform with the current year''s classification / disclosure.
8 The figures of '' 50,000 or less have been denoted by B.
Mar 31, 2015
01 Corporate information
IDFC Limited (''the Company'') is a public company incorporated in
India and regulated by the Reserve Bank of India (''RBI'') as an
Infrastructure Finance Company - Non Banking Finance Company
(''IFC-NBFC'') engaged in financing infrastructure projects in
sectors like energy, telecommunication, transportation, commercial and
industrial projects including hospital, education, tourism and hotels.
In April 2014, the Company had received in principle approval from the
RBI to set up a new private sector bank.
In order to achieve, a RBI compliant corporate structure under the new
banking guidelines and for corporate restructuring, the Company has
filed a Scheme of Arrangement before the Hon''ble Madras High Court
(''High Court'') on April 13, 2015 under section 391-394 of the
Companies Act, 1956 to demerge its financial undertaking into its
subsidiary, IDFC Bank Limited.
02 Basis of preparation
The financial statements of the Company have been prepared in
accordance with 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'') read
with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant
provisions of the 2013 Act / Companies Act, 1956 (''the 1956 Act'')
as applicable. The financial statements have been prepared on the
accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year unless stated
otherwise. [see note 3 (h)]
03 Share capital
(b) Terms / rights attached to equity shares
- The Company has only one class of equity shares having a par value
of Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share and ranks pari passu. The dividend proposed by the Board of
Directors is subject to approval of the Shareholders at the ensuing
Annual General Meeting. During the year ended March 31,2015 dividend of
Rs. 2.60 per share (Previous Year Rs. 2.60 per share) is recognised as
amount distributable to equity Shareholders.
- In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company after distribution of all preferential amounts. However, no
such preferential amounts exist currently. The distribution will be in
proportion to the number of equity shares held by the Shareholders.
04 Long-term borrowings
(a) Borrowings of Rs. 54,165.76 crore (Previous Year Rs. 48,089.09 crore)
are secured by way of a first floating pari passu charge over
investments, other assets, trade receivables, cash and bank balances
and loans & advances excluding investments in and other receivables
from subsidiaries and affiliates and lien marked assets.
(b) In terms of the RBI circular (Ref No. DNBS (PD) CC
No.381/03.02.001/2014-15 dated July 1, 2014) no borrowings remained
overdue as on March 31,2015 (Previous Year Rs. Nil).
(c) Unexpired discount is net of Rs. 236.86 crore (Previous Year Rs. 251.00
crore) towards interest accrued but not due.
(d) Interest and repayment terms of long-term borrowings - debentures
and bonds (non convertible) (secured):
5 Short-term borrowings
(a) Borrowings of Rs. 100.00 crore (Previous Year Rs. 1,500.00 crore) are
secured by way of a first floating pari passu charge over investments,
other assets, trade receivables, cash and bank balances and loans and
advances excluding investments in and other receivables from
subsidiaries and affiliates and lien marked assets.
(b) Borrowings under CBLO is secured against investments in government
securities and treasury bills of Rs. 11,151.12 crore at book value
(Previous Year Rs. 2,143.92 crore at book value).
(c) Borrowings under REPO are secured by assignment of government
securities and treasury bills of Rs. 4,443.62 crore at book value
(Previous Year Rs. 1,364.45 crore at book value).
(d) Unexpired discount on commercial papers is net of Rs. 4.39 crore
(Previous Year Rs. 61.35 crore) towards interest accrued but not due.
(e) In terms of the RBI circular (Ref. No. DNBS (PD) CC
No.381/03.02.001/2014-15 dated July 1, 2014) no borrowings remained
overdue as on March 31,2015 (Previous Year Rs. Nil).
6 Deferred tax assets (net)
In compliance with Accounting Standard 22 on ''Accounting for Taxes on
Income'' as specified under Section 133 of the 2013 Act read with Rule
7 of the Companies (Accounts) Rules, 2014, the Company has taken credit
of Rs. 290.81 crore (Previous Year Rs. 112.88 crore) in the Statement of
Profit and Loss towards deferred tax assets (net) on account of timing
differences. Deferrred tax liablity for the year ended March 31,2015 of
Rs. 32.31 crore (Previous Year Rs. 18.88 crore) is created on account of
tax adjustment of prior year. Tax adjustment of prior year also
includes Rs. 0.38 crore (Previous Year Rs. Nil) on account of refund of
interest tax.
(d) Loans includes non-performing loans of Rs. 357.57 crore (Previous
Year Rs. 332.98 crore) against which provisions of Rs. 238.00 crore
(Previous Year Rs. 112.40 crore) has been made in accordance with the RBI
circular (Ref. No. DNBS (PD) CC No.381/03.02.001/2014-15 dated July
1,2014). [see note (e) & 40(j)].
7 Other income
(a) Profit on sale of long-term investments of Rs. 1.00 crore for the
year ended March 31,2015 is booked on sale of 100% stake in IDFC
Primary Dealership Company Limited and IDFC Housing Finance Company
Limited to IDFC Alternatives Limited, a wholly-owned subsidiary of the
Company. (Previous Year Rs. 0.68 crore was booked as profit on sale of
49.99% stake in IDFC Pension Fund Management Company Limited,
subsidiary of the Company to IDFC Securities Limited, a wholly-owned
subsidiary of the Company).
8 In accordance with Accounting Standard 15 on ''Employee Benefits''
specified under Section 133 of the 2013 Act read with Rule 7 of the
Companies (Accounts) Rules, 2014 the following disclosures have been
made:
9 The Company''s main business is financing by way of loans. All
other activities revolve around the main business. The Company does not
have any geographic segments. As such, there are no separate reportable
segments as per Accounting Standard 17 on ''Segment Reporting''
specified under Section 133 of the 2013 Act read with Rule 7 of the
Companies (Accounts) Rules, 2014. During the current year, these
activities also involved steps taken towards transitioning into the
proposed bank. In view of the transitional nature of activities, these
are not considered as reportable segments.
10 As per Accounting Standard 18 on ''Related Party Disclosures'' as
notified under the Accounting Standards specified under Section 133 of
the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014,
the related parties of the Company are as follows:
I. SUBSIDIARIES:
(a) Direct
Galaxy Mercantiles Limited (w.e.f. December 6, 2013, up to September
28, 2014)
IDFC Alternatives Limited
IDFC Asset Management Company Limited
IDFC AMC Trustee Company Limited
IDFC Bank Limited (Incorporated on October 21,2014, direct up to
December 25, 2014)
IDFC Finance Limited IDFC Foundation
IDFC Financial Holding Company Limited (Incorporated on November 7,
2014)
IDFC Housing Finance Company Limited (Incorporated on March 4, 2014,
direct up to August 27, 2014)
IDFC Infra Debt Fund Limited (Incorporated on March 7, 2014, direct up
to August 11,2014)
IDFC Primary Dealership Company Limited (direct up to August 27, 2014)
IDFC Projects Limited IDFC Securities Limited IDFC Trustee Company
Limited
Neopro Technologies Private Limited (w.e.f. March 30, 2013, up to
September 28, 2014)
(b) Through subsidiaries
IDFC Bank Limited (w.e.f. December 26, 2014)
IDFC Capital Limited (up to October 31,2013)
IDFC Capital (USA) Inc.
IDFC Capital (Singapore) Pte. Ltd.
IDFC Distribution Company Limited (up to October 31,2013)
IDFC Infra Debt Fund Limited (w.e.f. August 12, 2014)
IDFC Fund of Funds Limited (up to December 12, 2014)
IDFC Housing Finance Company Limited (w.e.f. August 28, 2014 up to
September 30, 2014)
IDFC Investment Advisors Limited
IDFC Investment Managers (Mauritius) Limited
IDFC Primary Dealership Company Limited (w.e.f. August 28, 2014 up to
September 30, 2014)
IDFC Pension Fund Management Company Limited (up to October 31,2013)
IDFC PPP Trusteeship Company Limited (dissolved on August 23, 2013)
IDFC Project Equity Company Limited (up to September 30, 2014)
IDFC Securities Singapore Pte. Limited
II. JOINTLY CONTROLLED ENTITIES:
(a) Through subsidiaries
Delhi Integrated Multi-Modal Transit System Limited Infrastructure
Development Corporation (Karnataka) Limited Uttarakhand Infrastructure
Development Company Limited Rail Infrastructure Development Company
(Karnataka) Limited Narayana Hrudayalaya Surgical Hospital Private
Limited
III. ASSOCIATES:
(a) Direct
Galaxy Mercantiles Limited (up to December 5, 2013)
Feedback Infra Private Limited
Millennium City Expressway Private Limited (w.e.f. May 19, 2014)
(b) Through subsidiaries
Jetpur Somnath Tollways Private Limited
IV. ENTITIES OVER WHICH CONTROL IS EXERCISED:
(a) Through subsidiaries
India PPP Capacity Building Trust
V. KEY MANAGEMENT PERSONNEL:
(a) Dr. Rajiv B. Lall - Executive Chairman
(b) Mr. Vikram Limaye - Managing Director & CEO
vI. relatives OF key management PERSONNEL: (wHERE TRANSACTIONS ExIST):
(a) Ms. Bunty Chand
(b) Mr. Bharat Mukund Limaye
8 In accordance with Accounting Standard 19 on ''Leases'' as
notified under the Accounting Standards specified under Section 133 of
the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014,
the following disclosures in respect of operating leases are made: i
The Company has taken office premises under operating leases, which
expires between March 2016 and March 2024 (Previous Year
December 2015 and September 2018). Rent includes gross rental expenses
of Rs. 8.90 crore (Previous Year Rs. 7.23 crore). The committed lease
rentals in the future are:
9 In accordance with Accounting Standard 20 on ''Earnings Per
Share'' as notified under the Accounting Standards specified under
Section 133 of the 2013 Act read with Rule 7 of the Companies
(Accounts) Rules, 2014:
10 Contingent liabilities and commitments (to the extent not provided
for)
(Rs. IN CRORE)
AS AT MARCH 31,2015 AS AT MARCH 31,2014
(i) Claims not acknowledged
as debts in respect of :
Income-tax demands disputed
by the Company (net of
amounts provided). 143.68 135.71
The matters in dispute are
under appeal. The demands
have been partly paid /
adjusted and will be received
as refund if the matters are
decided in favour of the Company.
Other claims 0.55 7.20
(ii) Guarantees issued:
As a part of project assistance,
the Company has also provided the
following guarantees:
Financial guarantees 129.28 1,356.70
Performance guarantees 19.22 42.47
(iii) Other financial guarantees 0.01 0.33
(B) CAPITAL COMMITMENTS
(i) Uncalled liability on shares and
other investments partly paid 1,650.34 1,955.77
(ii) Estimated amount of contracts
remaining to be executed on capital
account
(net of advances) 69.43 0.86
11 The Company has entered into interest rate swaps in the nature of
''fixed / floating'' or ''floating / fixed'' for notional principal
of Rs. 4,646.00 crore outstanding as on March 31, 2015 (Previous Year Rs.
4,396.00 crore) for varying maturities linked to various benchmarks for
asset liability management and hedging.
The Company has foreign currency borrowings equivalent to Rs. 8,761.93
crore (Previous Year Rs. 7,240.47 crore), against which the Company has
undertaken currency interest rate swaps and forward contracts to fully
hedge foreign currency risk.
The Company has also entered in to coupon only currency swaps for
notional principal equivalent to Rs. 314.53 crore (Previous Year Rs. 391.16
crore) and forward contracts of Rs. 22.85 crore (Previous Year Rs. 14.16
crore) to hedge the foreign currency risk towards interest on the
foreign currency borrowings.
12 No amount is payable to ''Suppliers'' registered under the Micro,
Small and Medium Enterprises Development Act, 2006. No interest has
been paid / payable by the Company during the year to the
''Suppliers'' covered under the Micro, Small and Medium Enterprises
Development Act, 2006. The above information takes into account only
those suppliers who have responded to inquiries made by the Company for
this purpose.
13 The following additional information is disclosed in terms of the
RBI circular (Ref. No. DNBS (PD) CC No.381 /03.02.001 /2014-15 dated
July 1,2014) :
14 Penalties / fines imposed by the RBI
The following information is disclosed in terms of RBI circular
(Ref.No.RBI/2010-11/115 IDMD17/11.01.01(B)2010-11) dated July 14, 2010:
During the year ended March 31,2015 there was no penalty imposed by the
RBI (Previous Year Rs. Nil).
15 Securitisation
The Company sells loans through securitisation and direct assignment.
The following table sets forth, the information on securitisation and
direct assignment activity of the Company as an originator.
16 Details of financial assets transferred to securitisation /
reconstruction companies:
The Company has transferred certain assets to Asset Reconstruction
Companies (ARC) for cash / security receipts. For the purpose of the
valuation of the underlying security receipts issued by the underlying
trusts managed by ARCs, the security receipts are valued in accordance
with the RBI guidelines and provisioning policy of the Company.
17 The following additional information is disclosed in terms of the
RBI circular (Ref. No. DNBS (PD) CC No. 002/03.10.001/2014-15 dated
November 10, 2014):
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:
Derivatives are financial instruments whose characteristics are derived
from an underlying asset, or from interest and exchange rates or
indices.
The Company undertakes transactions in interest rate swaps, cross
currency swaps, principal only swaps, coupon only swaps and forward
contracts for hedging the interest rate and/or exchange rate risks on
the balance sheet. These include mainly the hedging of interest rate on
fixed rate rupee denominated liabilities and currency & interest rate
risk on the foreign currency borrowings.
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 treasury front office in
compliance with the limits as per the Company''s policy and the RBI
guidelines. The risk group 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 treasury back office 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
The Company deals in derivatives for hedging fixed rate and floating
rate coupon or foreign currency assets/liabilities. Derivative
contracts designated as hedges are not marked to market. The Company
identifies the hedged item (liability) at the inception of the
transaction itself. Hedge effectiveness is ascertained at the time of
the inception of the hedge. Derivative transactions are covered under
International Swaps and Derivatives Association (ISDA) master
agreements with respective counterparties.
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.
Currency 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 hedge swaps is amortised
over the life of swap or underlying liability, which-ever is shorter.
The foreign currency balances on account of principal of currency
interest rate swaps outstanding as at the Balance Sheet date are
revalued using the closing rate.
The Company does not undertake any proprietary trading in Derivatives.
18 The figures for the previous year have been reclassified /
regrouped, wherever necessary to conform with the current year''s
classification / disclosure.
19 The figures of Rs. 50,000 or less have been denoted by 3.
Mar 31, 2014
01 Corporate information
DFC Limited (''the Company'') is a public company incorporated in India
and regulated by the Reserve Bank of India (''RBI'') as an Infrastructure
Finance Company - Non-Banking Finance Company (IFC-NBFC) engaged in
financing infrastructure projects in sectors like energy,
telecommunication, transportation, commercial and industrial projects
including hospital, education, tourism and hotels. The Company had
applied for banking license in response to the guidelines for licensing
of new banks in the private sector issued by RBI in February 2013 and
has received in-principle approval to set-up the bank.
02 Basis of preparation
The financial statements of the Company have been prepared in
accordance with Generally Accepted Accounting Principles in India
(Indian GAAP'') to comply with the Accounting Standards notified under
Section 211(3C) of the Companies Act, 1956 (''the 1956 Act'') [which
continues to be applicable n respect of Section 133 of the Companies
Act, 2013 (the 2013 Act'') in terms of General Circular 15 / 2013 dated
September 13, 2013 of the Ministry of Corporate Affairs] and the
relevant provisions of the 1956 Act / 2013 Act, as applicable. The
financial statements have been prepared on the accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year unless stated otherwise.
03 Provisions and contingencies
(RS. IN CRORE)
FOR THE YEAR ENDED FOR THE YEAR ENDED
MARCH 31, 2014 MARCH 31, 2013
Contingent provision
against standard assets
[see note 9 (b)] 7.21 18.80
Provision for contingencies 313.97 175.13
Provision against non-
performing loans,
restructured loans, doubtful
debts / advances & 282.83 164.45
others (net) (see note 45 & 46)
Provision for diminution in
value of investments (net) 24.82 35.73
TOTAL 628.83 394.11
4 In accordance with Accounting Standard 15 on ''Employee Benefits'' as
notified under the Companies (Accounting Standards) Rules, 2006 the
following disclosures have been made:
i. The Company has recognised the following amounts in the Statement
of Profit and Loss towards contribution to defined contribution plans
which are included under contribution to provident and other funds:
5 The Company''s main business is financing by way of loans. All other
activities revolve around the main business. The Company does not have
any geographic segments. As such, there are no separate reportable
segments as per Accounting Standard 17 on ''Segment Reporting'' as
notified under the Companies (Accounting Standards) Rules, 2006.
6 As per Accounting Standard 18 on ''Related Party Disclosures'' as
notified under the Companies (Accounting Standards) Rules, 2006, the
related parties of the Company are as follows:
I. SUBSIDIARIES:
(a) Direct
Galaxy Mercantiles Limited (w.e.f. December 6, 2013)
IDFC Alternatives Limited
IDFC Asset Management Company Limited
IDFC AMC Trustee Company Limited
IDFC Finance Limited
IDFC Foundation
IDFC Housing Finance Company Limited (incorporated on March 4, 2014)
IDFC Infra Debt Fund Limited (incorporated on March 7, 2014)
IDFC Primary Dealership Company Limited
IDFC Project Equity Company Limited (up to May 16, 2012)
IDFC Projects Limited
IDFC Securities Limited
IDFC Trustee Company Limited
Neopro Technologies Private Limited (w.e.f. March 30, 2013)
(b) Through subsidiaries
Dheeru Powergen Limited (up to April 13, 2012)
IDFC Capital Limited (up to October 31, 2013)
IDFC Capital (USA) Inc.
IDFC Capital (Singapore) Pte. Ltd.
IDFC Distribution Company Limited (up to October 31, 2013)
IDFC Fund of Funds Limited
IDFC General Partners Limited (up to September 21, 2012)
IDFC Investment Advisors Limited
IDFC Investment Managers (Mauritius) Limited
IDFC Pension Fund Management Company Limited (up to October 31, 2013)
IDFC PPP Trusteeship Company Limited (dissolved on August 23, 2013)
IDFC Project Equity Company Limited (w.e.f. May 17, 2012)
IDFC Securities Singapore Pte. Limited (incorporated on November 21,
2012)
II. JOINTLY CONTROLLED ENTITIES: (a) Through subsidiaries
Delhi Integrated Multi-Modal Transit System Limited Infrastructure
Development Corporation (Karnataka) Limited Uttarakhand Infrastructure
Development Company Limited
III. ASSOCIATES:
(a) Direct
Galaxy Mercantiles Limited (up to December 5, 2013)
Feedback Infra Private Limited (formerly Feedback Infrastructure
Services Private Limited)
(b) Through subsidiaries
Jetpur Somnath Tollways Private Limited
Dheeru Powergen Limited (from April 14, 2012 to March 26, 2013)
IV. ENTITIES OVER WHICH CONTROL IS EXERCISED: (a) Through subsidiaries
India Infrastructure Initiative Trust (up to June 30, 2012) India PPP
Capacity Building Trust
V. KEY MANAGEMENT PERSONNEL:
(a) Dr. Rajiv B. Lall - Executive Chairman
(b) Mr. Vikram Limaye - Managing Director & CEO
VI RELATIVES OF KEY MANAGEMENT PERSONNEL (WHERE TRANSACTIONS EXIST):
(a) Ms. Bunty Chand
(b) Mr. Bharat Mukund Limaye
7 Contingent liabilities and commitments (to the extent not provided
for)
(RS. IN CRORE)
AS AT MARCH 31, 2014 AS AT MARCH 31,
2013
(a) CONTINGENT LIABILITIES
(i) Claims not acknowledged as debts in respect of:
ncome-tax demands disputed by the
Company (net of amounts provided). 135.71 152.02
The matters in dispute are under
appeal. The demands have
been partly paid / adjusted and will
be received as refund if the matters
are decided in favour of the
Company.
Other claims 7.20 7.20
(ii) Guarantees issued:
As a part of project assistance, the Company has also provided the
following guarantees:
Financial guarantees 1,398.42 1,922.08
Performance guarantees 0.75 0.75
(iii) Other financial gurantees 0.33 47.30
(b) CAPITAL COMMITMENTS
(i) Uncalled liability on shares and
other investments partly paid 1,955.77 912.88
(ii) Estimated amount of contracts
remaining to be executed on capital
account 0.86 0.51
(net of advances)
8 The Company has entered into interest rate swaps in the nature of
''fixed / floating'' or ''floating / fixed'' for notional principal of Rs.
4,396.00 crore outstanding as on March 31, 2014 (Previous Year Rs.
3,696.00 crore) for varying maturities linked to various benchmarks for
asset liability management and hedging.
The Company has foreign currency borrowings equivalent to Rs. 7,240.47
crore (Previous Year Rs. 6,160.12 crore), against which the Company has
undertaken currency interest rate swaps and forward contracts to fully
hedge foreign currency risk.
The Company has also entered in to coupon only currency swaps for
notional principal equivalent to Rs. 391.16 crore (Previous Year Rs. 967.37
crore) and forward contracts ofRs. 14.16 crore (Previous Year RS.8.03
crore) to hedge the foreign currency risk towards interest on the
foreign currency borrowings.
9 No amount is payable to ''Suppliers'' registered under the Micro,
Small and Medium Enterprises Development Act, 2006. No interest has
been paid / payable by the Company during the year to the ''Suppliers''
covered under the Micro, Small and Medium Enterprises Development Act,
2006. The above information takes into account only those suppliers
who have responded to inquiries made by the Company for this purpose.
10 Penalties / fines imposed by the RBI
The following information is disclosed in terms of RBI circular (Ref.
No. RBI / 2010-11 / 115 IDMD.17 / 11.01.01 (B) 2010-11) dated July 14,
2010: During the year ended March 31, 2014 there was no penalty imposed
by the RBI (Previous Year Rs. 0.05 crore). Previous year penalty was on
account of one instance of SGL bounce and the penalty was paid to the
RBI.
11 Details of financial assets transferred to securitisation /
reconstruction companies:
The Company has transferred certain assets to Asset Reconstruction
Companies (ARC) for cash / security receipts. For the purpose of the
valuation of the underlying security receipts issued by the underlying
trusts managed by ARCs, the security receipts are valued in accordance
with the provisioning policy of the Company.
12 The figures for the previous year have been reclassified, wherever
necessary to conform with the current year''s classification.
13 Figures of Rs. 50,000 or less have been denoted by .
Mar 31, 2013
01 Corporate information
IDFC Limited (formerly Infrastructure Development Finance Company
Limited (''the Company'') is a public company incorporated in India
and regulated by the Reserve Bank of India (RBI) as an Infrastructure
Finance Company - Non Banking Finance Company (IFC-NBFC) engaged in
financing infrastructure projects in sectors like energy,
telecommunication, transportation, commercial and industrial projects
including hospital, education, tourism and hotels.
02 Basis of preparation
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended),
the relevant provisions of the Companies Act, 1956 and the applicable
guidelines issued by the RBI. The financial statements have been
prepared on the accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year,
3 The Company''s main business is financing by way of loans. All other
activities revolve around the main business. The Company does not have
any geographic segments. As such, there are no separate reportable
segments as per Accounting Standard 17 on ''Segment Reporting'' as
notified under the Companies (Accounting Standards) Rules, 2006.
4 As per Accounting Standard 18 on ''Related Party Disclosures'' as
notified under the Companies (Accounting Standards) Rules, 2006, the
related parties of the Company are as follows:
I. SUBSIDIARIES:
(a) Direct
IDFC Alternatives Limited (formerly IDFC Private Equity Company
Limited)
IDFC Asset Management Company Limited IDFC AMC Trustee Company Limited
IDFC Finance Limited IDFC Foundation
IDFC PPP Trusteeship Company Limited (up to March 22, 2012)
IDFC Primary Dealership Company Limited (with effect from March 17,
2012)
IDFC Project Equity Company Limited (up to May 16, 2012)
IDFC Projects Limited IDFC Securities Limited IDFC Trustee Company
Limited
Neopro Technologies Private Limited (with effect from March 30, 2013)
Uniquest Infra Ventures Private Limited (up to June 3, 2011)
(b) Through subsidiaries
Dheeru Powergen Limited (up to April 13, 2012)
IDFC Capital Limited IDFC Capital (USA) Inc.
IDFC Capital (Singapore) Pte. Limited IDFC Distribution Company Limited
IDFC Fund of Funds Limited
IDFC General Partners Limited (up to September 21, 2012)
IDFC Investment Advisors Limited
IDFC Investment Managers (Mauritius) Limited
IDFC Pension Fund Management Company Limited
IDFC PPP Trusteeship Company Limited (with effect from March 23, 2012)
IDFC Project Equity Company Limited (with effect from May 17, 2012)
IDFC Securities Singapore Pte. Limited (incorporated on November 21,
2012)
Jetpur Somnath Tollways Private Limited (formerly known as Jetpur
Somnath Tollways Limited) (up to August 12, 2011)
II. JOINTLY CONTROLLED ENTITIES:
(a) Through subsidiaries
Delhi Integrated Multi-Modal Transit System Limited (with effect from
March 24, 2011)
Infrastructure Development Corporation (Karnataka) Limited (with effect
from March 24, 2011)
Uttarakhand Infrastructure Development Company Limited (with effect
from March 24, 2011)
III. ASSOCIATES:
(a) Direct
Galaxy Mercantiles Limited (with effect from December 2, 2011)
Feedback Infrastructure Services Private Limited
(b) Through subsidiaries
Jetpur Somnath Tollways Private Limited (formerly known as Jetpur
Somnath Tollways Limited) (with effect from August 12, 2011) Dheeru
Powergen Limited (from April 14, 2012 to March 26, 2013)
IV. ENTITIES OVER WHICH CONTROL IS EXERCISED:
(a) Through subsidiaries
Emerging Markets Private Equity Fund, L. P (up to January 26, 2012)
India Infrastructure Initiative Trust (up to June 30, 2012)
India PPP Capacity Building Trust
V. KEY MANAGEMENT PERSONNEL:
(a) Dr. Rajiv B. Lall - Vice Chairman & Managing Director
(b) Mr. Vikram Limaye - Deputy Managing Director
5 The Company has entered into interest rate swaps in the nature of
''fixed / floating'' or ''floating / fixed'' for notional principal of Rs.
3,696.00 crore outstanding as on March 31, 2013 (Previous Year Rs.
3,066.00 crore) for varying maturities linked to various benchmarks for
asset liability management and hedging.
The Company has foreign currency borrowings equivalent to Rs. 6,160.12
crore (Previous Year Rs. 4,152.99 crore), against which the Company has
undertaken currency interest rate swaps and forward contracts of Rs.
6,160.12 crore (Previous Year Rs. 4,152.99 crore) to hedge foreign
currency risk. The Company has also entered in to coupon only currency
swaps for notional principal equivalent to Rs. 967.37 crore (Previous
Year Rs. 430.26 crore) and forward contracts of Rs. 8.03 crore
(Previous Year Rs. Nil) to hedge the foreign currency risk towards
interest on the foreign currency borrowings.
6 No amount is payable to ''Suppliers'' registered under the Micro,
Small and Medium Enterprises Development Act, 2006. No interest has
been paid / payable by the Company during the year to the ''Suppliers''
covered under the Micro, Small and Medium Enterprises Development Act,
2006. The above information takes into account only those suppliers
who have responded to inquiries made by the Company for this purpose.
7 The following additional information is disclosed in terms of the
RBI circular (Ref. No. DNBS (PD) CC No. 279 / 03.02.001 / 2012-13 dated
July 2, 2012):
8 Penalties / fines imposed by the RBI
The following information is disclosed in term of the RBI circular
(Ref.No.RBI/2010-11/115 IDMD17/11.01.01(B)2010-11) dated July 14, 2010:
During the year ended March 31, 2013 there was one instance of SGL
bounce for which the RBI has imposed a penalty of Rs. 500,000 (Previous
Year Rs. Nil). The Company has paid the penalty to the RBI.
9 Utilisation of money raised through public issues
During the year, the Company raised Rs. Nil (Previous Year Rs. 1,387.46
crore) through public issue of long-term Infrastructure Bonds eligible
for deduction under Section 80CCF of the Income-tax Act, 1961 of which
Rs. 179.17 crore (Previous Year Rs. 1,208.29 crore) has been utilised
towards lending to infrastructure projects. Rs. Nil (Previous Year Rs.
179.17 crore) remained unutilised as at the Balance Sheet date pending
regulatory approvals.
10 The figures for the previous year have been reclassified, wherever
necessary to conform with the current year''s classification.
11 Figures of Rs. 50,000 or less have been denoted by 0.
Mar 31, 2012
1 CORPORATE INFORMATIONGGROUP INFORMATIONROUP INFORMATION
Infrastructure Development Finance Company Limited ('the Company') is a
public company incorporated in India and regulated by the Reserve Bank
of India (RBI) as an Infrastructure Finance Company-Non Banking Finance
Company (IFC-NBFC) engaged in financing infrastructure projects in
sectors like energy, telecommunication, transportation, commercial and
industrial projects including hospital, education, tourism and hotels.
2. BASIS OF PREPARATION
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended),
the relevant provisions of the Companies Act, 1956 and the applicable
guidelines issued by the RBI. The financial statements have been
prepared on the accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year.
(a) TERMS / RIGHTS ATTACHED TO EQUITY SHARES
The Company has only one class of equity shares having a par value of Rs
10 per share. Each holder of equity shares is entitled to one vote per
share and ranks pari passu. The dividend proposed by the Board of
Directors is subject to approval of the shareholders at the ensuing
Annual General Meeting. During the year ended March 31, 2012, dividend
of Rs 2.30 per share (Previous Year Rs 2.00 per share) is recognised as
amount distributable to equity shareholders.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
Company after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholders.
(c) TERMS / RIGHTS ATTACHED TO PREFERENCE SHARES
The Company had raised Rs 840.00 crore through the issue of CCCPS during
the year ended March 31, 2011. The preference shares were convertible
at any time into equity shares of face value of Rs 10 each until the
date falling 18 months from the date of issuance of the preference
shares, at the option of the holders, at Rs 176 per equity share and
carry dividend @ 6% p.a. During the year ended March 31, 2012, the
preference shares were converted into 47,727,272 equity shares of Rs 10
each at a premium of Rs 166 per equity share.
(e) SHARES RESERVED FOR ISSUE UNDER STOCK OPTIONS
Refer to note (f) for details of shares reserved for issue under the
ESOS of the Company and refer to note (c) for details regarding the
terms of conversion of CCCPS.
(i) In respect of equity shares issued pursuant to exercise of stock
options under the ESOS, the Company paid dividend of Rs 0.24 crore for
the year 2010-11 (Previous Year Rs 0.15 crore for the year 2009-10) and
tax on dividend of Rs 0.04 crore (Previous Year Rs 0.02 crore) as
approved by the shareholders at the respective Annual General Meetings.
(ii) Tax on proposed dividend for the year is net of dividend
distribution tax of Rs 11.24 crore (Previous Year Rs 7.60 crore) paid by
the subsidiary companies under Section 115-O of the Income-tax Act,
1961.
(a) Borrowings of Rs 38,427.77 crore (Previous Year Rs 33,960.28 crore)
are secured by way of a first floating pari passu charge over
investments, current assets and loans and advances excluding
investments in and other receivables from subsidiaries and affiliates.
(b) In terms of the RBI circular (Ref. No. DNBS (PD) CC No. 225 /
03.02.001 / 2011-12 dated July 1, 2011) no borrowings remained overdue
as on March 31, 2012 (Previous Year Rs Nil).
(c) Unexpired discount is net of Rs 117.72 crore (Previous Year Rs 227.96
crore) towards interest accrued but not due.
(a) Borrowings of Rs 3,856.07 crore (Previous Year Rs 1,225.00 crore) are
secured by way of a first floating pari passu charge over investments,
current assets and loans & advances excluding investments in and other
receivables from subsidiaries and affiliates.
(b) Borrowings under CBLO is secured against investments in Government
securities.
(c) Unexpired discount on commercial papers is net of Rs 100.27 crore
(Previous Year Rs 7.74 crore) towards interest accrued but not due.
(d) In terms of the RBI circular (Ref. No. DNBS (PD) CC No. 225 /
03.02.001 / 2011-12 dated July 1, 2011) no borrowings remained overdue
as on March 31, 2012 (Previous Year Rs Nil).
(d) Rupee loans - secured includes non-performing loans of Rs 148.32
crore (Previous Year Rs 79.73 crore) against which provisions of Rs 76.89
crore
(Previous Year Rs 40.83 crore) has been made in accordance with the RBI
circular (Ref. No. DNBS (PD) CC No. 225 / 03.02.001 / 2011-12 dated
July 1, 2011) [see note (e) & 40 (f)].
(a) Balances with banks in current accounts include Rs Nil (Previous
Year Rs 223.43 crore) being amount raised on issue of long-term
Infrastructure Bonds - Tranche III, that remained unutilised as at the
Balance Sheet date pending regulatory approvals.
(b) Balances with banks in deposit accounts include deposits under lien
of Rs 21.00 crore (Previous Year Rs 17.00 crore) to the National
Securities Clearing Corporation Limited for meeting margin
requirements.
(c) Balances with banks include deposits of Rs 501.00 crore (Previous
Year Rs 25.00 crore) having original maturity of more than 12 months.
3 The Company has entered into interest rate swaps in the nature of
"fixed / floating" or "floating / fixed" for notional principal of
Rs 3,066.00 crore outstanding as on March 31, 2012 (Previous Year
Rs 2,391.00 crore) for varying maturities linked to various
benchmarks for asset liability management and hedging.
The Company has foreign currency borrowings of USD 81.18 crore
(Previous Year USD 62.56 crore), against which the Company has
undertaken currency interest rate swaps and forward contracts of USD
81.18 crore (Previous Year USD 60.91 crore) to hedge foreign currency
risk.
The Company has also entered in to coupon only currency swaps for
notional principal of USD 8.41 crore (Previous Year USD 11.11 crore) to
hedge the foreign currency risk towards interest on the foreign
currency borrowings.
4 No amount is payable to 'Suppliers' registered under the Micro,
Small and Medium Enterprises Development Act, 2006. No interest has
been paid / payable by the Company during the year to the 'Suppliers'
covered under the Micro, Small and Medium Enterprises Development Act,
2006. The above information takes into account only those suppliers who
have responded to inquiries made by the Company for this purpose.
During the year, the Company raised Rs 1,387.46 crore (Previous Year Rs
1,451.76 crore) through public issue of long-term Infrastructure Bonds
eligible for deduction under Section 80CCF of the Income-tax Act, 1961
of which Rs 1,208.29 crore (Previous Year Rs 1,228.33 crore) has been
utilised towards lending to infrastructure projects. Rs 179.17 crore
(Previous Year Rs 223.43 crore) remained unutilised as on the Balance
Sheet date pending regulatory approvals.
During the previous year, the Company had issued and allotted
157,752,090 equity shares of Rs 10 each at a premium of Rs 158.25 per
share and 84,000,000 CCCPS of Rs 100 each at par pursuant to a qualified
institutional placement. The proceeds of the issue were utilised for
general business purposes.
5 The Revised Schedule VI to the Companies Act, 1956 has become
effective from April 1, 2011 for preparation and presentation of
financial statements. This has significantly impacted the disclosure
and presentation made in the financial statements. Accordingly, the
figures for the previous year have been reclassified, wherever
necessary to conform with the current year's classification.