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IFMR Investment Adviser Services Private Limited
Second Annual Report
2013-14
“Our Group’s mission is to ensure that every individual and every enterprise has
complete access to financial services”
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Annual Report 2013-14
Corporate Information
Board of Directors:
Sucharita Mukherjee, Chairperson
Bindu Ananth
Strategic Counsel Committee:
Sucharita Mukherjee, Chairperson
Chaitanya Pande
Debi Guha
Chief Executive Officer
Suchindran V G
Compliance Officer
Aruna Subbaraman
Bankers
ICICI Bank, Chennai
Auditors
Deloitte Haskins & Sells, Chennai
Registered Office
10th Floor-Phase 1,
IIT-Madras Research Park
Kanagam Village, Taramani
Chennai 600 113, India
CIN: U74900TN2012PTC087839
SEBI Regn No: INA200000019
Contact Details
Phone: +91 44 6668 7000
Fax: +91 44 6668 7010
Email: [email protected]
Website: http://ia.ifmr.co.in
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IFMR Investment Adviser Services Private Limited
The Journey So Far
Message from the Chairperson 4
Message from the CEO 6
Directors’ Report 8
Report on Corporate Governance 12
Independent Auditors’ Report 16
Balance Sheet 20
Statement of Profit and Loss 21
Cash Flow Statement 22
Notes Forming Part of Financial Statements 24
Board of Directors 34
Strategic Counsel Committee–Independent Members 35
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Annual Report 2013-14
Message from the Chairperson
“We need more financial
innovation--not less--and
finance should play a larger
role in helping society
achieve its goals”
Dear Shareholders,
It gives me great pleasure in presenting the second
annual report of IFMR Investment Adviser
Services Private Limited (“IFMR Investments”).
IFMR Investments is a key part of the IFMR Trust
Group as it will focus on one of the three pillars of
the IFMR Trust Group namely ‘risk aggregation’
and focus on building access to long term debt
capital markets for high-quality originators, such as
microfinance institutions, small business lenders
and affordable housing financiers.
We believe that asymmetric information is at the
root of inefficient credit markets. Facilitating the
flow of information in a sustainable manner, will
enable millions of people and enterprises obtain
quality, relevant and affordable financial services.
Professor Robert Shiller makes a powerful case for
recognizing that finance, is one of the most
powerful tools we have for solving our common
problems and increasing general well-being. We
need more financial innovation--not less--and
finance should play a larger role in helping society
achieve its goals.
Professor Shiller argues that finance should be
defined not merely as the management or
manipulation of money or the management of risk
but as the stewardship of society's assets. He
explains how people in financial careers--from
CEO, investment manager and banker to insurer,
lawyer, and regulator--can and do manage, protect,
and increase these assets. He describes how finance
has historically contributed to the good of society
through inventions such as insurance, mortgages,
savings accounts, and pensions, and argues that we
need to envision new ways to re-channel financial
creativity to benefit society as a whole.
Like Professor Shiller, we too believe that finance
can be a powerful force for good.
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IFMR Investment Adviser Services Private Limited
We also believe performance speaks for itself; a
high quality asset, by virtue of its performance,
should be attractive to capital markets investors.
However, this does imply that the market
infrastructure necessary to connect local originators
of risk such as microfinance institutions and small
business lenders and the capital markets investors
is already in place. While we believe in markets, its
true power can be realized only if the market is
functioning well. At the IFMR Trust Group, we are
building that market infrastructure to unleash the
power of the markets, that is the link between
financial inclusion and capital markets.
Markets are powerful precisely because of their
efficiency in disseminating information. we believe
markets are also a great equalizer, size is not the
only thing that matters, quality does. Also, it
rewards issuers that do well and penalizes those
that don’t. IFMR Investments has a key role to play
in disseminating this information in its credit
selection and subsequent monitoring.
Financial year 2013-14 has been an eventful year
for IFMR Investments as it completed its first full
year in operation. During the year, the company
secured registration as an Investment Adviser and
was subsequently appointed as an Investment
Adviser to the proposed IFMR FImpact
Investment Fund, the first scheme of IFMR
Finance for Freedom Social Venture Fund. The
fund will focus on debt investments in high-quality
microfinance institutions, through long term senior
secured and subordinated instruments.
Going ahead, the Company also proposes to advise
other fund managers both on-shore and offshore.
In the future, IFMR Investments is also building
underwriting and evaluation frameworks in other
asset classes that impact the financially excluded
such as vehicle finance and SME finance.
“we are building that
market infrastructure to
unleash the power of the
markets, that is the link
between financial inclusion
and capital markets”
“Going ahead, the
Company also proposes to
advise other fund
managers both on-shore
and offshore”
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Annual Report 2013-14
Message from the CEO
“we were among the first
investment advisers to be
registered with SEBI”
Dear Shareholders,
IFMR Investment Adviser Services Private Limited
(IFMR Investments) began the financial year 2013-
14 with a focus on providing high quality
investment advice and recommendations to
investment managers in asset classes that enable
financial inclusion.
One of the key steps taken during the year was to
seek the SEBI approval for registration as an
investment adviser under the new regulations. In
fact, we were among the first investment advisers
to be registered with SEBI during August 2013.
During the year, we developed a proprietary
underwriting framework for microfinance
institutions and strengthened the investment
identification and evaluation processes with the
setting up of two committees, namely, the
Originator Appraisal Committee (OAC) and the
Investment Recommendation Committee (IRC).
The due diligence and appraisal process includes
management meetings, meetings with external
stakeholders including investors, lenders, auditors
etc., apart from discussions with independent
directors. Review of portfolio cuts and stress
testing of business plans in relation to past
performance and future key assumptions are also
part of the appraisal process. The entire investment
identification and evaluation processes have been
automated to ensure seamless integration with the
underwriting framework as well as to act as
information storage with robust back-up and to
ensure availability of audit trail. A social
performance assessment tool was developed during
the year taking into account the importance
attached by investors to social performance of the
investee companies, which encompasses aspects
like mission alignment, focus on governance,
importance of attracting and retaining employees,
client protection, awareness of impact to
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IFMR Investment Adviser Services Private Limited
environment etc. This is designed to supplement
the underwriting guidelines significantly.
IFMR Investments also subscribes to the highest
standards of governance with the formation of the
Strategic Counsel Committee (SCC) consisting of
independent members with significant market
expertise.
During the year, 24 MFIs were evaluated for an in-
principle approval to the OAC and 10 due
diligence visits were carried out subsequently. We
have hired the core team and we feel confident, the
team is well equipped to handle the investment
advisory role in relation to our own expectations
and those of the fund managers.
During the latter part of the year, the company was
appointed as an Investment Adviser to the
proposed IFMR FImpact Investment Fund, the
first scheme of IFMR Finance for Freedom Social
Venture Fund.
The proposed fund has made an application to
SEBI for registration as a Social Venture Fund
under Category I of the SEBI (AIF) Regulations in
March 2014 with a target fund size of Rs. 100 crore
and is expected to launch post approval. The
proposed fund will primarily focus on long term
debt investments in high-quality microfinance
institutions, through senior secured and
subordinated instruments.
IFMR Investments proposes to advise fund
managers that are investing in retail finance sectors
that impact the financially excluded such as
affordable housing, small business and micro
enterprise finance and commercial vehicle finance
etc. IFMR Investments will build on the vast
experience within the IFMR Trust Group in
working with these sectors.
This is beginning of a long journey ahead and we
aim to become the preferred investment adviser for
the funds in the financial inclusion space.
“IFMR Investments also
subscribes to the highest
standards of governance
with the formation of the
Strategic Counsel
Committee (SCC)
consisting of independent
members with significant
market expertise.”
“IFMR Investments
proposes to advise fund
managers that are
investing in retail finance
sectors that impact the
financially excluded such
as affordable housing,
small business and micro
enterprise finance and
commercial vehicle
finance”
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Annual Report 2013-14
Directors’ Report
Dear Shareholders,
Your Directors have immense pleasure in
presenting the second annual report of your
Company, together with the audited financial
statements for the year ended March 31, 2014.
Background:
The Company was incorporated as IFMR Advisory
Services Private Limited on September 27, 2012.
The Company’s name was subsequently changed to
IFMR Investment Adviser Services Private Limited
on June 10, 2013. The Company received the
Certificate of Registration as an Investment
Adviser from SEBI dated August 1, 2013. IFMR
Investment Adviser Services Private Limited was
founded with the intent providing high quality
investment advice and investment products in asset
classes that impact the financially excluded, such
that we help achieve desired investor outcomes.
Financial Results:
Amount in INR
Particulars Year ended March 31, 2014
Period ended March 31, 2013
Income 398,930 -
Expenses 5,687,922 806,871
(Loss)/Profit Before Tax
(5,288,592) (806,871)
Less: Tax Expenses - -
(Loss)/Profit After Tax (5,288,592) (806,871)
Add: Brought forward Profit / (Loss)
(806,871) -
Less: Transfer to reserves
- -
Balance Carried Forward
(6,095,463) (806,871)
Earnings per share (basic)
(88.00) (157.32)
Earnings per share (diluted)
(88.00) (157.32)
Dividend:
Your Directors do not recommend for any
dividend for the year under review.
Transfer to Reserves:
In the absence of profits, your Company has not
made any transfers to reserves during the year
under review.
Deposits:
The Company has not accepted any deposits from
the public for the year under review.
Operational Highlights:
The Company completed its first full year during
the financial year ended March 31, 2014 and it is
yet to commence operations.
Some of the highlights for the year ended March
31, 2014 are:
1) The Company was part of the first list of
Investment Advisers that were approved by
SEBI and in fact, it was the first company in
that list.
2) The Company has entered into a MOU with
UTI Group for advising an off-shore fund,
which is presently under discussions
3) The Company has been appointed as
Investment Adviser by IFMR Investment
Managers Private Limited in March 2014 for
the proposed IFMR FImpact Investment
Fund, an Alternate Investment Fund under
Category 1 of the SEBI (Alternate
Investment Fund) Regulations which is
awaiting approval from SEBI.
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IFMR Investment Adviser Services Private Limited
4) The Company has automated the investment
process and has developed an automated
fund model during the period.
Future outlook:
The underlying market factors which have created
financial stress and have resulted in lower
economic growth continue to play a significant
factor. More particularly for India, Investors will
closely look at Government’s policy action in
enabling investments on one hand and outcome of
various initiatives to improve economic growth on
the other. These will be key determinants to the
timelines associated with your Company’s plans for
advising Investment Managers as their fund raise in
dependent on investor interest. Your Company,
however, continues to reach out to Investment
Managers to understand the thought process of
various investors and, in a ‘business as usual’
scenario, expects to begin advising investors and
investment managers from the first half of fiscal
2015.
Your Company has also been working on various
strategic initiatives. Given the nature of such
strategic initiatives and the prevalent market
environment, gestation periods are expected to be
longer and spread across fiscals.
Capital Infusion & Change in Ownership
Structure:
The Company mobilised Rs.70 lakhs of capital
funds during the year ended March 31, 2014 by
issuance of 70,000 equity shares of Rs.100 each to
its promoter IFMR Trusteeship Services Private
Limited (Trustee of IFMR Trust).
Further during the year, IFMR Trusteeship
Services Private Limited (Trustee of IFMR Trust),
the Company’s existing promoters transferred its
shareholding of 95,000 equity shares of Rs.100
each (100% of total shareholding of the company)
and 10,000 preference shares of Rs.100 each to
IFMR Holdings Private Limited.
SEBI Guidelines:
The Company being an Investment Adviser under
the SEBI (Investment Advisers) Regulations, 2013
has complied with all applicable regulations of the
Securities and Exchange Board of India.
Compliance:
The Company has complied with all the mandatory
regulatory compliances as required under the
Companies Act, various tax statutes and other
regulatory bodies.
The Company does not have a Whole Time
Secretary and accordingly, pursuant to the second
proviso of Section 383A, a compliance certificate is
obtained from a practicing Company Secretary for
the previous financial year.
Corporate governance:
A report on corporate governance is attached and
forms part of this report.
Directors:
Jayshree Venkatesan who was appointed as an
Additional Director, on October 5, 2012 has
resigned from the Board of the Company with
effect from August 5, 2013.
Puneet Gupta who was appointed as an Additional
Director, on September 13, 2013 has resigned from
the Board of the Company with effect from
February 28, 2014.
The Board places on record its appreciation to the
above directors for their contribution to the
performance of the Company.
Subject to the Companies Act, 1956 and as per the
Articles of Association of the Company, none of
the Directors shall retire by rotation.
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Annual Report 2013-14
Auditors:
M/s. Deloitte Haskins & Sells, Chartered
Accountants, Statutory Auditors of the Company
retire at the ensuing Annual General Meeting and
are eligible for re-appointment.
Subsidiary Companies:
As on March 31, 2014, the Company does not have
any subsidiaries.
Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and
Outgo:
The Company has no activity relating to
conservation of energy and technology absorption.
There were no foreign exchange earnings or
outflow during the year under review.
Particulars of Employees:
In accordance with the provisions of Section 217
(2A) of the Companies Act, 1956, read with
Companies (Particulars of Employees) Rules, 1975
and the Companies (Particulars of Employees)
Amendment Rules, 2011, the name and other
particulars of employees are to be set out in the
annexure to the directors’ report. However, as per
provisions of Section 219 (1)(b)(iv) of the
Companies Act, 1956, the annual report is being
sent to members excluding the aforesaid
information. Any member interested in obtaining
such particulars may write to the Company.
Dematerialization of Shares:
The equity and preference shares of the Company
have been admitted for dematerialization by
National Securities Depository Limited (NSDL)
during the year in addition to Central Depository
Services Limited (CDSL).
Directors Responsibility Statement:
To the best of their knowledge and belief, and
according to the information and explanations
obtained by them, your Directors confirm the
following in terms of Section 217(2AA) of the
Companies Act, 1956:
a. that in preparation of the financial
statements the generally accepted accounting
principles (GAAP) of India and applicable
accounting standards issued by Institute of
Chartered Accountants of India have been
followed.
b. that appropriate accounting policies have
been selected and applied consistently and
judgments and estimates that are reasonable
and prudent have been made so as to give a
true and fair view of the state of affairs of
the Company at the end of the financial year
and of the profit or loss of the Company for
that year;
c. that they have taken proper and sufficient
care for the maintenance of adequate
accounting records in accordance with the
provisions of the Companies Act, 1956 for
safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities. To ensure this, the Company
has established internal control systems,
consistent with its size and nature of
operations. These systems are reviewed and
updated on an on-going basis.
d. that they have prepared the annual accounts
on a going concern basis.
Employee Relationship:
The employees at all ranks of the Company have
extended their whole-hearted cooperation with the
Company for the smooth conduct of the affairs of
the Company and hence the employee relations of
the Company have been cordial. Your Directors
wish to place on record their appreciation to all the
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IFMR Investment Adviser Services Private Limited
employees for their contribution to the performance of the Company.
Acknowledgement:
Your Directors take this opportunity to thank the
Investment Managers of the funds under advice,
shareholders, employees, bankers, auditors,
Securities and Exchange Board of India, other
Regulatory authorities for their co-operation and
continued support to the Company. We look
forward to their continued patronage and
encouragement in all our future endeavours.
On behalf of the Board
Place: Chennai Date: May 2, 2014
Sucharita Mukherjee
Chairperson Bindu Ananth
Director
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Annual Report 2013-14
Report on Corporate Governance
Corporate Governance is the commitment of an
organization to follow ethics, fair practices and
transparency in all its dealings with its various
stakeholders such as Clients, Employees, Investors,
Government and the Community at large. Sound
corporate governance is the result of external
marketplace commitment and legislation plus a
healthy board culture which directs the policies and
philosophy of the organization. Your Company is
committed to good Corporate Governance in all its
activities and investment advisory processes.
Corporate Governance Philosophy
IFMR Investment Adviser Services Private
Limited’s philosophy on corporate governance
envisages adherence to the highest levels of
accountability, transparency and fairness, in all
areas of its operations and in all interactions with
its stakeholders. The Board shall work to ensure
the success and continuity of the Company’s
business through the appointment of qualified
management and through on-going monitoring to
assure the Company’s activities are conducted in a
responsible, ethical and transparent manner.
Board of Directors
In terms of the Corporate Governance philosophy
all statutory and other significant material
information is placed before the Board of
Directors to enable it to discharge its responsibility
of strategic supervision of the Company as trustees
of the Shareholders. The Board currently consists
of two Directors. All the members of the Board are
non-executive directors and the Company is in the
process of inducting independent directors.
During the year ended 31 March 2014, ten (10)
Board Meetings were held with a gap of not more
than four months between any two meetings.
Particulars of the Directors’ attendance to the
Board Meeting and particulars of their other
company directorships and committee
memberships are given below:
Name Nature of Directorship No. of
directorships
excluding the
Company
Board Meetings attended (Meetings held)
Sucharita Mukherjee Non-Executive
Chairperson
6 10 (10)
Bindu Ananth Non-Executive Director 7 10 (10)
Jayashree Venkatesan* Non-Executive Director NA 3 (3)
Puneet Gupta ** Non-Executive Director NA 2 (2)
* Resigned w.e.f August 5, 2013 ** Appointed on September 13, 2013. Resigned w.e.f February 28, 2014
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IFMR Investment Adviser Services Private Limited
Changes in Board Constitution
During the year ended March 31, 2014, the
following changes took place in the constitution of
the Board.
Jayshree Venkatesan who was appointed as an
Additional Director, on October 5, 2012 has
resigned from the Board of the Company with
effect from August 5, 2013. Puneet Gupta who was
appointed as an Additional Director, on September
13, 2013 has resigned from the Board of the
Company with effect from February 28, 2014.
Committees of the Board
During the year, the Strategic Counsel Committee,
Investment Recommendation Committee and
Originator Approval Committee of the Board were
constituted. The Board fixes the terms of reference
of committees and also delegated powers from
time to time. The minutes of the meetings of the
committee are circulated to the Board for its
information and confirmation.
Strategic Counsel Committee
The Strategic Counsel Committee provides advice
and overall guidance to the Company regarding the
formation, implementation and monitoring of the
Company’s business strategies. The Committee
currently has three members including the
Chairperson of the Company and two independent
members who are experts in fund management.
Terms of reference
The Committee’s goals and responsibilities shall
include, but not be restricted to:
Guide the management to help formulate
short- and long-term investment strategies
Recommending potential growth and
expansion opportunities for the Company.
Identify strategic issues or opportunities
material to the Company outside the scope of
the Company’s traditional business operations.
Performing such other responsibilities
regarding the Company’s overall strategy or
other matters as the Board may from time to
time assign the Committee.
Composition & Meetings
The Strategic Counsel Committee consists of the
following members (majority being non-executive
and independent):
1. Sucharita Mukherjee, Chairperson
2. Chaitanya Pande, Independent Member
3. Debi Guha, Independent Member
The Committee met once during financial year
2013-14.
Name Nature of
Membership
Meetings
attended
(Meetings
Held)
Sucharita Mukherjee Chairperson 1 (1)
Chaitanya Pande Member 1 (1)
Debi Guha Member 1 (1)
Investment Recommendation Committee
The Investment Recommendation Committee has
been constituted to evaluate investment proposals
made by the Investment Origination and
Management team and make the suitable
recommendations to investors and/or investment
managers.
Terms of reference
This Committee’s goals and responsibilities shall
be:
To review and recommend underwriting
guidelines for providing advisory services in
new asset classes and offering of advisory
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Annual Report 2013-14
services to new funds to the Board for its
approval
To review and recommend the investment
proposals made by the Investment
Origination and Management Team and make
necessary recommendations to the investment
managers
To evaluate and recommend terms and
conditions of all investments
To review and approve periodically policies
and guidelines governing the Company’s
investment recommendations and monitor
compliance with these policies
To perform such other responsibilities
regarding the Company’s investment
recommendation activities or policies or other
matters as the Board may from time to time
assign the Committee.
Composition & Meetings
The Investment Recommendation Committee
consists of the following members:
1. Sucharita Mukherjee, Chairperson
2. V.G. Suchindran, CEO
The Committee met once during financial year
2013-14.
Name Nature of
Membership
Meetings
attended
(Meetings
Held)
Sucharita Mukherjee Chairperson 1 (1)
V. G. Suchindran Member 1 (1)
Originator Appraisal Committee
The Originator Appraisal Committee has been
constituted for the first level screening of all
potential investees that meet the pre-due diligence
requirements. The primary responsibility of this
Committee is to review the recommendations of
the Investment Appraisal team and accord in-
principle approvals for retaining originators as
potential investees in the Funds for which the
Company will act as an Investment Adviser.
Composition & Meetings
The Originator Appraisal Committee consists of
the following members, namely,
1. Sucharita Mukherjee, Chairperson
2. V.G. Suchindran, CEO
3. Director of the respective asset class.
The Committee met 7 times during the financial
year 2013-14.
Name Nature of
Membership
Meetings
attended
(Meetings
Held)
Sucharita Mukherjee Chairperson 7 (7)
V. G. Suchindran Member 7 (7)
Berenice Rose Member 7 (7)
Remuneration of Non-Executive Directors
As a policy, the Company does not pay any sitting
fee or other remuneration to non-executive
Directors or other members of any committee
constituted of the Board.
General Body Meetings
During the financial year 2013-14, one Annual
General Meeting and three Extraordinary General
Meetings were held as per details given below:
Date Type of
meeting
Time Venue
June 10,
2013
EGM 10:00 am Registered office
of the Company
August 19,
2013
AGM 11:30 am Registered office
of the Company
September
13, 2013
EGM 5:30 pm Registered office
of the Company
February 26,
2014
EGM 12:30
pm
Registered office
of the Company
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IFMR Investment Adviser Services Private Limited
All the proposed resolutions, including special
resolutions, were passed by the shareholders as set
out in their respective Notices.
Compliance Report
The board reviews the compliance of all applicable
laws every quarter and gives appropriate directions,
wherever necessary.
Code of Conduct
The Board has adopted a code of conduct,
corporate governance policy and whistle blower
policy applicable to all directors and employees of
the Company.
Risk Management
The Company keeps the Board informed
periodically of the significant risks associated with
the business of the company and the various risk
identification and mitigation processes put in place
by the management.
Disclosures
The particulars of transactions between the
Company and its related parties, as defined in
Accounting Standard 18, are set out the financial
statements. There were no material transactions
with related parties i.e., transactions of the
company of material nature, with its promoters, the
directors or the management, their subsidiaries or
relatives etc. that may have potential conflict with
the interest of company at large.
General Shareholder Information
Financial year: April 1st to March 31st
Shareholding pattern as on March 31, 2014
Category Number of
Shares
% of
total
Promoters:
IFMR Holdings Private
Limited (including its
nominee)
95,000 100
Total 95,000 100
Address for Correspondence IFMR Investment Adviser Services Private Limited
10th Floor-Phase 1, IIT-Madras Research Park,
Kanagam Village, Taramani,
Chennai - 600 113
Tel.: +91 044 6668 7000
Fax: +91 044 6668 7010
E-mail: [email protected]
Website: http://ia.ifmr.co.in
On behalf of the Board
Place: Chennai Date: May 2, 2014
Sucharita Mukherjee
Chairperson
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Annual Report 2013-14
Independent Auditors’ Report
TO THE MEMBERS OF IFMR INVESTMENT ADVISER SERVICES PRIVATE LIMITED
(FORMERLY IFMR ADVISORY SERVICES PRIVATE LIMITED)
Report on the Financial Statements
We have audited the accompanying financial statements of IFMR INVESTMENT ADVISER
SERVICES PRIVATE LIMITED (formerly IFMR Advisory Services Private Limited) (“the Company”),
which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant accounting policies and other
explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Management is responsible for the preparation of these financial statements that give a true
and fair view of the financial position, financial performance and cash flows of the Company in accordance
with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
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IFMR Investment Adviser Services Private Limited
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid financial statements give the information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that
date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that
date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central
Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by
this Report are in agreement with the books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow
Statement comply with the Accounting Standards notified under the Act (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received from the directors as on 31st March, 2014
taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,
2014 from being appointed as a director in terms of Section 274(1) (g) of the Act.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm’s Registration No. 008072S)
Bhavani Balasubramanian
(Partner)
CHENNAI, May 2, 2014 (Membership No. 22156)
18
Annual Report 2013-14
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our
report of even date)
Having regard to the nature of the Company’s business / activities / results during the year, clauses (ii), (vi),
(vii), (viii), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xviii), (xix) and (xx) of paragraph 4 of the Order are not
applicable to the Company.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in
accordance with a regular programme of verification which, in our opinion, provides for
physical verification of all the fixed assets at reasonable intervals. According to the
information and explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute a
substantial part of the fixed assets of the Company and such disposal has, in our
opinion, not affected the going concern status of the Company.
(ii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies,
firms or other parties covered in the Register maintained under Section 301 of the Companies Act,
1956.
(iii) In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business
for the purchase of fixed assets and for the sale of services and during the course of our audit we
have not observed any continuing failure to correct major weaknesses in such internal control
system.
(iv) To the best of our knowledge and belief and according to information and explanations given to us,
there are no contracts or arrangements that need to be entered in the register maintained in
pursuance to Section 301 of Companies Act, 1956.
(v) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including
Income-tax, Service Tax, Cess and other material statutory dues applicable to it with the
appropriate authorities. The statutory dues relating to Provident Fund, Investor Education
and Protection Fund, Employees’ State Insurance, Sales Tax, Wealth Tax, Customs Duty and
Excise Duty are not applicable to the Company.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Cess and
other material statutory dues in arrears as at 31st March, 2014 for a period of more than six
months from the date they became payable.
19
IFMR Investment Adviser Services Private Limited
(c) There were no disputed amounts due in respect of Income-tax, Service Tax and Cess which
have not been deposited as on 31st March 2014.
(vi) In our opinion and according to the information and explanations given to us, and on an overall
examination of the Balance Sheet of the Company, we report that funds raised on short term basis
(excluding internal accruals) have, prima facie, not been used during the year for long term
investment.
(vii) To the best of our knowledge and according to the information and explanations given to us, no
fraud by the Company and no material fraud on the Company has been noticed or reported during
the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm Registration No. 008072S)
Bhavani Balasubramanian
(Partner)
CHENNAI, May 2, 2014 (Membership No. 22156)
20
Annual Report 2013-14
Balance Sheet
Particulars Note No.
March 31, 2014 March 31, 2013
(Amount in INR) (Amount in INR)
A. Equity and Liabilities (1) Shareholders’ funds (a) Share Capital 3 10,500,000 3,500,000
(b) Reserves and Surplus 4 (6,095,463) (806,871)
4,404,537 2,693,129
(2) Non-Current Liabilities Long-Term Provisions 5 125,124 49,475
125,124 49,475
(3) Current Liabilities (a) Trade Payables 6 1,267,172 613,561
(b) Other Current liabilities 7 783,281 24,710
2,050,453 638,271
Total 6,580,114 3,380,875
B. Assets (1) Non-Current Assets Fixed Assets Tangible Assets 11 32,878 39,013
32,878 39,013
(2) Current Assets (a) Current Investments 8 5,710,000 -
(b) Cash and Cash Equivalents 9 177,113 2,272,554
(c) Short-Term Loans and Advances 10 660,123 1,069,308
6,547,236 3,341,862
Total 6,580,114 3,380,875
See accompanying notes forming part of the financial statements
In terms of our report attached For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Bhavani Balasubramanian Sucharita Mukherjee Bindu Ananth
Partner Chairperson Director
Place: Chennai Date: May 2, 2014
21
IFMR Investment Adviser Services Private Limited
Statement of Profit and Loss
Particulars Note No.
Year ended March 31, 2014
Period ended March 31, 2013
(Amount in INR) (Amount in INR)
Income
Revenue from operations
- -
Other Income 12 398,930 -
Total Revenue (I)
398,930 -
Expenses
Employee Benefits Expense 13 4,453,652 51,691
Depreciation 11 22,712 9,887
Other Expenses 14 1,211,158 745,293
Total Expenses (II)
5,687,522 806,871
Loss Before Tax (I-II)
(5,288,592) (806,871)
Tax Expenses:
a) Tax Expenses for the Current Period
- -
b) Deferred Tax
- -
- -
Loss for the Year
(5,288,592) (806,871)
Earnings per share (of Rs.100 each)
Basic 17 (88.00) (157.32)
Diluted 17 (88.00) (157.32)
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Bhavani Balasubramanian Sucharita Mukherjee Bindu Ananth
Partner Chairperson Director
Place: Chennai Date: May 2, 2014
22
Annual Report 2013-14
Cash Flow Statement
Particulars
Year ended March 31, 2014
Period ended March 31, 2013
(Amount in INR) (Amount in INR)
Cash Flow From Operating Activities:
Loss before Tax (5,288,592) (806,871)
Adjustments for:
Depreciation 22,712 9,887
Provision for Gratuity 75,649 49,475
Provision no longer required written back (6,472) -
Operating Loss before Working Capital Changes (5,196,703) (747,509)
Changes in working capital:
Adjustments for (increase)/decrease in Operating Assets
Short Term Loans & Advances 409,185 (1,069,308)
Adjustments for increase/(decrease) in Operating Liabilities
Current Liabilities
- Trade payables 653,611 -
- Other Current liabilities 765,043 638,271
Cash used in operations (3,368,864) (1,178,546)
Net income taxes Paid/(Refunded) - -
Net Cash used in Operations Activities (A) (3,368,864) (1,178,546)
Cash Flow From Investing Activities:
Purchase of Fixed Assets (88,354) (48,900)
Sale of Fixed Assets 71,777 -
Net Cash used in Investing Activities (B) (16,577) (48,900)
Cash Flow From Financing Activities:
Proceeds from issue of Equity Shares 7,000,000 2,500,000
Proceeds from issue of Preference Shares - 1,000,000
Net cash generated from Financing Activities (C ) 7,000,000 3,500,000
Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C)
3,614,559 2,272,554
23
IFMR Investment Adviser Services Private Limited
Particulars
Year ended March 31, 2014
Period ended March 31, 2013
(Amount in INR) (Amount in INR)
Cash and Cash Equivalents at the beginning of the period 2,272,554 -
Cash and Cash Equivalents at the end of the period 5,887,113 2,272,554
Reconciliation of Cash and Cash equivalents:
Cash and Cash Equivalents as per Balance sheet (Refer Note 9) 177,113 2,272,554
Less: Bank balances not considered as Cash and cash equivalents as defined in AS 3 Cash Flow Statements
- -
Add: Current Investments considered as part of cash and cash equivalents as defined in AS 3 Cash flow statements)
5,710,000 -
Net Cash and cash equivalents (as defined in AS 3 Cash Flow Statements)
5,887,113 2,272,554
Cash and cash equivalents at the end of the period comprises of:
(a) Balances with banks in Current Account 176,002 2,272,554
(b) Cash on Hand 1,111 -
(c) Investments in Mutual funds 5,710,000 -
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells For and on behalf of the Board of Directors
Chartered Accountants
Bhavani Balasubramanian Sucharita Mukherjee Bindu Ananth
Partner Chairperson Director
Place: Chennai Date: May 2, 2014
24
Annual Report 2013-14
Notes Forming Part of Financial Statements
Note 1 - Corporate Information
IFMR Investment Adviser Services Private Limited (Formerly IFMR Advisory Services Private Limited) was
incorporated on September 27, 2012, under The Companies Act, 1956 with the aim to undertake the business
of facilitating investments and act as advisors to provide financial / investment advice to both Indian and
Foreign Investors. The company is currently a wholly owned subsidiary of IFMR Holdings Private Limited.
Note 2 - Significant Accounting Policies
2.1 Basis of accounting and preparation of financial statements:
The financial statements of the Company have been prepared in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards
notified Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be
applicable in 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
accrual basis under the historical cost convention.
The Company is a subsidiary of IFMR Holdings Private Limited, which is not a Small and Medium
Sized entity (SMC) as defined in the General Instructions in respect of Accounting Standards notified
under the Companies Act, 1956. Accordingly, the Company has also been classified as non-SMC and
has complied with the accounting standards as applicable to a non - SMC.
2.2 Use of estimates
The preparation of the financial statements in conformity with the Generally Accepted Accounting
Principles requires the management estimates and assumptions to be made that affect the reported
amounts of assets and liabilities on the date of financial statements and the reported amount of
revenues and expenses during the period. Management believes that the estimates used in preparation
of the financial statements are prudent and reasonable. Future results could differ due to these
estimates and the differences between the actual results and the estimates are recognized in the periods
in which the results are known / materialise.
2.3 Fixed Assets and Depreciation:
Fixed assets are carried at historical cost less accumulated depreciation and impairment losses, where
applicable. The Company capitalizes all costs relating to the acquisition and installation of fixed assets.
Cost comprises the purchase price and any attributed cost of bringing the asset to its working
condition for its intended use. Depreciation on assets is provided on the Written down Value Method
at the following rates based on the management’s estimate of the useful life of the asset, which are
higher than the rates prescribed under Schedule XIV of the Companies Act, 1956:
Asset category Depreciation rate
Computers 60%
Assets individually costing less than Rs.5,000 added during the year are fully depreciated.
25
IFMR Investment Adviser Services Private Limited
2.4 Employee benefits:
Employee benefits include provident fund and gratuity.
Defined contribution plans:
As the number of employees on the rolls of the Company is less than the statutory minimum required
for Provident Fund (PF) registration, no registration is required to be made by the Company with
Provident Fund department and no remittances have been made to appropriate Authorities.
Gratuity
The Company accounts for its liability for future gratuity benefits based on the actuarial valuation, as at
the balance sheet date, determined by an Independent Actuary using the Projected Unit Credit method
and is provided for. The company’s gratuity plan is non-funded.
Actuarial gains and losses are recognized in the statement of Profit and Loss account in the year in
which they occur.
Compensated absences
Benefits of Compensated absences are not provided to the employees of the company.
2.5 Taxes on Income:
i) Current Tax:
Current tax is determined in accordance with the provisions of the Income Tax Act, 1961
ii) Deferred Tax: Deferred tax is recognised on timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or
substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists
that sufficient future taxable income will be available against which these can be realised. Deferred
tax assets and liabilities are offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each Balance Sheet date for their realisability.
2.6 Provisions and Contingencies:
Provisions are recognised only when the Company has a present or legal or constructive obligation as a
result of past events for which it is probable that an outflow of economic benefit will be required to
settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent
liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly
within the control of the company or (ii) Present obligation arising from past events where it is not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of
the amount of the obligation cannot be made.
26
Annual Report 2013-14
2.7 Service tax input credit:
Service tax input credit is accounted for in the books in the period in which the underlying service
received is accounted and when there is no uncertainty in availing / utilizing the same.
Note 3 - Share Capital
Particulars March 31, 2014 March 31, 2013
(Amount in INR) (Amount in INR)
Authorised
95,000 ( Previous Year : 25,000) Equity Shares of Rs.100 each
with voting rights # 9,500,000 2,500,000
10,000 ( Previous Year : 10,000) Redeemable Preference Shares
of Rs.100 each 1,000,000 1,000,000
Total 10,500,000 3,500,000
Issued, Subscribed and Fully Paid up
95,000 ( Previous Year : 25,000) Equity Shares of Rs.100 each
with voting rights 9,500,000 2,500,000
10,000 ( Previous Year : 10,000) Redeemable Preference Shares
of Rs.100 each 1,000,000 1,000,000
Total 10,500,000 3,500,000
# In the Board Meeting held on August 19, 2013 the authorised Equity Share Capital has been increased from
Rs.2,500,000 (25,000 shares of Rs.100 Each)- to Rs.9,500,000 (95,000 shares of Rs.100 Each) the same has
been allotted to IFMR Trust.
(a) Details of Shares held by each Shareholder more than 5% of Shares
Name of the Shareholder
March 31, 2014 March 31, 2013
No. of
Shares held
% of
Shareholding
No. of
Shares held
% of
Shareholding
IFMR Holdings Private Limited (Holding
Company) along with its nominee –
Equity Shares
95,000 100 - -
IFMR Holdings Private Limited (Holding
Company)– Preference Shares 10,000 100
IFMR Trust and its nominee - Equity
Shares 25,000 100
IFMR Trust – Preference Shares 10,000 100
(b) During the year, M/s. IFMR Trust transferred its entire equity shareholding of 94,999 equity shares
(entire shareholding of the company) of Rs.100 each to M/s. IFMR Holdings Private Limited. Consequently,
the Company has become the subsidiary of M/s. IFMR Holdings Private Limited with effect from the date of
transfer i.e., March 31, 2014.
27
IFMR Investment Adviser Services Private Limited
(c) Terms / rights attached to Equity Shares: The Company has only one class of Equity Shares having par value of Rs.100 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 remaining
assets of the Company. The distribution will be in proportion to the number of equity shares held by the
shareholders.
(d) Terms / rights attached to Preference Shares: Preference Shares are redeemable at par at the end of 4 years from the date of allotment i.e. February 28,
2013
The preference shareholder is entitled to vote only on resolution placed before the Company which directly
affects the rights attached to such preference shares as set out in Section 87 of the Companies Act, 1956. The
right to entitlement for dividend on preference shares not declared in a financial year shall be carried forward
to the subsequent financial years.
(e) Preference Dividend: Arrears of Fixed Cumulative Dividend on Preference Shares as at March 31, 2014 – Rs.87,014 (As at March
31, 2013 – Rs.7,014)
Note 4: Reserves and Surplus
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Deficit in Statement of Profit and Loss
Opening Balance (806,871) -
Add: Loss for the Year (5,288,592) (806,871)
Closing balance (6,095,463) (806,871)
Note 5: Long Term Provisions
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Provision for Employee Benefits:
Provision for Gratuity 125,124 49,475
Total 125,124 49,475
Note 6: Trade Payables
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Sundry Creditors 127,913 115,260
Advance from Related Parties (Refer Note 16) 1,139,259 498,301
Total 1,267,172 613,561
28
Annual Report 2013-14
Note 7: Other Current Liabilities
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Statutory Liabilities 175,506 10,517
Other Liabilities- Accrued expenses 607,775 14,193
Total 783,281 24,710
Note 8: Current Investments
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Investment in Mutual Funds - (valued at lower of cost and
Fair Value - unquoted - fully paid-up)
Templeton India Treasury Management Account Fund - Super
IP (2,992 units) of Rs.1,908.63 each (Previous Year - NIL) 5,710,000 -
Total 5,710,000 -
Aggregate Market Value of current Investments 5,725,485 -
Aggregate amount of Unquoted Investment 5,710,000 -
Aggregate of value of Investments in the nature of Cash and cash
equivalents (as defined under AS 3) 5,710,000 -
Note 9: Cash and Cash Equivalents
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Cash and cash equivalents as defined in AS-3
Balance in Current account 176,002 2,272,554
Cash on Hand 1,111 -
Total 177,113 2,272,554
Note 10: Short Term Loans and Advances
Particulars March 31, 2014 March 31, 2013
Amount in INR Amount in INR
Advance to Related Parties (Refer Note 16) 241,460 995,725
Advances Recoverable in Cash or in kind or for value to be
received 176,180 73,583
Security Deposit for Employees 208,000 -
Balances with Govt. Authorities -Service Tax credit receivable 34,483 -
Total 660,123 1,069,308
29
IFMR Investment Adviser Services Private Limited
No
te 1
1: F
ixed
Ass
ets
Net
Blo
ck
As
at
Marc
h 3
1,
2013
39,0
13
39,0
13
-
As
at
Marc
h 3
1,
2014
32,8
78
32,8
78
(39,0
13)
Dep
reci
ati
on
As
at
Marc
h 3
1,
2014
16,8
76
16,8
76
(9,8
87)
Dele
tio
ns
du
rin
g t
he
year
15,7
23
15,7
23
-
Fo
r th
e
year
22,7
12
22,7
12
(9,8
87)
As
at
Ap
ril
1,
2013
9,8
87
9,8
87
-
Gro
ss B
lock
As
at
Marc
h 3
1,
2014
49,7
54
49,7
54
(48,9
00)
Dele
tio
ns
du
rin
g t
he
year
87,5
00
87,5
00
-
Ad
dit
ion
s
du
rin
g t
he
year
88,3
54
88,3
54
(48,9
00)
As
at
Ap
ril
1,
2013
48,9
00
48,9
00
-
Ass
et
Tan
gib
le
Ass
ets
Co
mp
ute
rs –
O
wn
ed
To
tal
Pre
vio
us
Year
30
Annual Report 2013-14
Note 12: Other Income
Particulars
Year ended
March 31, 2014
Period ended
March 31, 2013
Amount in INR Amount in INR
Gain on sale of current investment 385,324 -
Interest on Fixed Deposits 7,134 -
Provisions no longer required written back 6,472 -
Total 398,930 -
Note 13: Employee Benefits Expense
Particulars
Year ended March 31, 2014
Period ended March 31, 2013
Amount in INR Amount in INR
Salaries and Wages 4,331,201 -
Staff Welfare Expenses 46,802 2,216
Gratuity 75,649 49,475
Total 4,453,652 51,691
Note 14: Other Expenses
Particulars
Year ended
March 31, 2014
Period ended
March 31, 2013
Amount in INR Amount in INR
Rent and Amenities 387,115 128,332
Repairs and Maintenance 1,400 2,900
Printing and Stationery 8,114 10,402
Telephone Expenses 26,348 11,341
Travelling and Conveyance 265,168 39,292
Legal and Professional Charges 134,938 364,824
Rates and Taxes 262,640 73,967
Auditors' Remuneration
For Statutory Audit (inclusive of Service Tax) 112,360 112,360
For Reimbursement of expenses 7,348 -
Miscellaneous expenses 5,727 1,875
Total 1,211,158 745,293
31
IFMR Investment Adviser Services Private Limited
Disclosures under Accounting Standards
Note 15: Employee Benefits:
The company’s obligation towards gratuity is a defined benefit plan and no fund is being maintained. The
details for actuarial valuation are given below:
Particulars
Year ended March 31, 2014
Period ended March 31, 2013
Amount in INR Amount in INR
Movements in Accrued Liability
Accrued Liability as at beginning of the period: 49,475 -
Interest Cost 3,958 -
Current Service Cost 125,124 -
Actuarial (gain) / loss (53,433) 49,475
Accrued Liability as at the end of the Year: 125,124 49,475
Amounts to be recognized in the Balance Sheet
Present Value of obligations as on the accounting date: 125,124 49,475
Fair Value of the Plan Assets: - -
Liability to be recognised in the Balance Sheet: 125,124 49,475
Expenses to be recognized in Statement of Profit and Loss
Interest Cost 3,958 -
Current Service Cost 125,124 -
Net Actuarial (gain) / loss (53,433) 49,475
Net Expenses to be recognized in Statement of Profit and
Loss 75,649 49,475
Reconciliation
Net Liability as at the beginning of the year 49,475 -
Net Expenses in statement of Profit and loss 75,649 49,475
Benefits paid - -
Net liability as at the end of the Year 125,124 49,475
Principal Actuarial Assumptions
Interest Rate (Liabilities) 9.00% 8.00%
Return on Assets N.A. N.A.
Mortality Table LIC (94-96) LIC (94-96)
Resignation Rate per annum 10.00% 10.00%
Salary Escalation Rate 10.00% 10.00%
Note:-
i) The estimate of future salary increase takes in to account inflation, seniority, promotion and other relevant
factors.
32
Annual Report 2013-14
ii) Discount rate is the prevailing market yields used by LIC for similar computations.
iii) Experience Adjustments:
Particulars
Year ended
March 31, 2014
Period ended
March 31, 2013
Amount in INR Amount in INR
On plan Liability (gain)/loss 42,787 49,475
On plan Assets (gain) / loss - -
Present Value of benefit obligations 125,124 49,475
Fair Value of Plan Assets - -
Excess of obligation over plan assets 125,124 49,475
Note 16: Related party disclosures
Information relating to related party transaction for the year ended March 31, 2014 (as identified by
management and relied upon by Auditors)
a) Parties where control exists:
Holding Company : IFMR Holdings Private Limited (With effect from March 31, 2014)
Controlling Entity : IFMR Trust represented by IFMR Trusteeship Services Private Limited (Up to
March 30, 2014)
b) Fellow Subsidiaries with whom the Company had transactions during the Year:
IFMR Mezzanine Finance Private Limited
IFMR Investment Managers Private Limited
c) Key Management Personnel:
V.G.Suchindran – Chief Executive Officer (with effect from September 2, 2013)
Transactions with related parties during the Year:
Related Party Transaction
Year ended March 31, 2014
Period ended March 31, 2013
Amount in INR Amount in INR
IFMR Trust
Equity Shares Allotted 7,000,000 2,500,000
Preference Shares Allotted - 1,000,000
Employee Sharing Cost 49,977 225,419
Infrastructure Cost 339,961 115,498
Reimbursement of expenses 251,020 157,384
IFMR Mezzanine Finance
Private Limited
Asset Sold 71,777 -
Asset purchased (49,754) -
Reimbursement of expenses 624,491 995,725
IFMR Investment Managers
Private Limited Reimbursement of expenses 423,776 -
V.G.Suchindran Remuneration 3,500,000 -
33
IFMR Investment Adviser Services Private Limited
Outstanding balances with related parties as on balance sheet date:
Related Party Transaction March 31, 2014 March 31, 2013
Amount in INR Amount in INR
IFMR Trust Advances Payable 1,139,259 498,301
IFMR Mezzanine Finance Private
Limited Advance Receivable 25,684 995,725
IFMR Investment Managers
Private Limited Advance Receivable 423,776 -
Note 17: Earnings per share – Basic and Diluted:
Year ended
March 31, 2014
Period ended
March 31, 2013
Amount in INR Amount in INR
Loss for the year attributable to equity shareholders (5,288,592) (806,871)
Weighted average shares outstanding during the year 60,096 5,129
Basic and Diluted Earnings per Share (88.00) (157.32)
Note 18:
The company has entered into an agreement with IFMR Investment managers Services Private Limited for
providing investment adviser services for proposed IFMR Finance for Freedom Social Venture Fund. The
agreement shall be operational subsequent to the registration of the said fund and launch of the same.
Note 19:
The financial statements of the previous period included the operating results for part of the year from
September 27, 2012 to March 31, 2013. Therefore, previous period figures are not comparable with that of
the current year. Previous period figures have been re-grouped / re-classified wherever necessary to confirm
to current year classification.
For and on behalf of the Board of Directors
Place: Chennai Sucharita Mukherjee Bindu Ananth Date: May 2, 2014 Chairperson Director
34
Annual Report 2013-14
Board of Directors
Sucharita Mukherjee Chairperson
Sucharita Mukherjee is currently CEO of IFMR Holdings and Vice Chairperson
of IFMR Trust. She is the founder and was CEO of IFMR Capital since
inception till 2012. Prior to joining IFMR Capital, Sucharita Mukherjee led the
origination and structuring effort in credit derivatives and structured finance for
corporates at Morgan Stanley in London. Her work included developing
innovative asset-backed financing structures in such areas as intellectual
property and health-care receivables. She was also part of the credit derivatives
team at Deutsche Bank in London, structuring credit-derivatives-linked
repackaged investments for financial institutions. Sucharita Mukherjee holds a
bachelor’s degree in Economics and an MBA from IIM Ahmedabad.
Bindu Ananth is the Chair of IFMR Trust. Prior to this, she worked in ICICI
Bank’s microfinance team between 2001 and 2005 and was Head of the new
product development team within the Rural Banking Group in 2007. Bindu
Ananth has an under-graduate degree in Economics from Madras University
and Masters Degrees from the Institute of Rural Management (IRMA) and
Harvard University’s John. F. Kennedy School of Government. She is a Fellow
of the Global Economic Society and a member of the FICCI Taskforce on
Financial Inclusion. She was a member of the RBI Committee (2013) on
Comprehensive Financial Services for Low-Income Households and Small
Businesses
Bindu Ananth
Director
35
IFMR Investment Adviser Services Private Limited
Strategic Counsel Committee–Independent Members
Chaitanya Pande has over 18 years of experience in Investment management
with specialization in Fixed Income and Structured Products as well as valuation
and portfolio risk management. A mathematics graduate from St Stephens,
Chaitanya after completing a Post Graduate diploma in Finance & Corporate
Strategy from IMI Delhi, started his career with Jardine Fleming before joining
ICICI Prudential AMC. After an award winning stint of 10 years, as CIO &
Head of Fixed Income, Chaitanya decided to set up Polymath Capital.
His efficiency in fund management also won him the title of India’s Most
Astute Bond Investor by Asset Magazine for the year 2007 and the coveted
Business Standard Fund Manager of the Year (Debt) – 2011 in addition to
several other fund awards.
Chaitanya Pande
Member
Debi Guha Member
Debi Guha has more than two decades of experience in the financial services
industry. She started her career in ICICI from 1993 to 1998 where she was a
founding member of the Infrastructure Industry Group. She then began her
investing career with GIC Special Investments (the alternate investment arm of
the Government of Singapore Investment Corporation), where she headed GIC
SI’s investment activities in multiple countries including India and worked with
them for 12 years. In 2012, she set up Arcus India Advisors Pvt Ltd, an Indian
asset management company focused on investing in credit oriented strategies.
Debi has considerable expertise in private equity, structured debt and
mezzanine.
She is an MBA from the Indian Institute of Management, Ahmedabad and a BE
in Electrical Engineering (Gold medalist) from Jadavpur University.
36
Annual Report 2013-14
Notes
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