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IL&FS Investment Managers Ltd.

BSE: 511208 Sector: Financials
NSE: IVC ISIN Code: INE050B01023
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OPEN 14.70
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VOLUME 102552
52-Week high 18.45
52-Week low 13.00
P/E 25.19
Mkt Cap.(Rs cr) 451
Buy Price 0.00
Buy Qty 0.00
Sell Price 14.36
Sell Qty 4697.00
OPEN 14.70
CLOSE 14.53
VOLUME 102552
52-Week high 18.45
52-Week low 13.00
P/E 25.19
Mkt Cap.(Rs cr) 451
Buy Price 0.00
Buy Qty 0.00
Sell Price 14.36
Sell Qty 4697.00

IL&FS Investment Managers Ltd. (IVC) - Director Report

Company director report

To The Members of IL&FS Investment Managers Limited

Your Directors have pleasure in presenting for your consideration and approval theThirtieth Annual Report with the Audited Financials of the Company for the year endedMarch 312016

FINANCIAL ACHIEVEMENTS AND DIVIDEND

For the year ended March 31 2016 For the year ended March 312015 For the year ended March 31 2016 For the year ended March 312015
(Rs. mn) (Rs. mn) (Rs. mn) (Rs. mn)
Standalone Standalone Consolidated Consolidated
Total Income 1070.96 1154.63 1907.60 2086.80
Profit before Taxation 648.81 761.68 747.69 965.07
Provision for Taxation 157.47 202.76 186.58 234.14
Net Profit after Taxation 491.34 558.92 560.85* 730.26*
Profit available for appropriation (inclusive of balance carried forward from the previous year) 704.12 718.69 2720.77 2681.15
Appropriations:
General Reserve - 57.00 - 57.00
Dividend (inclusive of dividend tax) 399.95 448.90 412.63 464.23

* after Minority Interest

The Company does not propose to transfer any amount to the General Reserve

DIVIDEND

During the year your Company achieved a Net Profit after Tax of '491.34 mn. YourDirectors recommend a Dividend of '1.20 per share of the Face Value of '2/- each. Thetotal amount of Dividend is '399.95 mn (inclusive of dividend tax of '23.11 mn)

REVIEW OF OPERATIONS

The global economic recovery remained muted in CY2015 and growth in emerging marketsand developing economies declined for the fifth consecutive year. Even as the US economyshowed resilience plunging oil and commodity prices along with volatile equity andcurrency markets led to the International Monetary Fund estimating a lower global growthrate at 3.4% in CY2016. Even so factors like tightening of economy in the US and aslowdown in China are expected to weigh on this growth rate along with a potential exit ofBritain from the European Union

The Indian economy showed signs of improvement with baseline GDP growth rate target of7.6% for FY2016 being achieved inflation under control and RBI announcing four rate cutssince January 2015 aggregating 150 basis points. With the expectation of an improvedbusiness environment boosted by a projection of better monsoon leading to higherconsumption demand the economy is projected to grow at 7.6% in FY2017. The Government haslaid considerable thrust on infrastructure and rural sector in the Union Budget for2016-17 and is expected to increase investment. However risk aversion in the bankingsector and weaker global growth and trade outlook could temper the growth outlook

The global Private Equity industry continued to reflect the uncertain economicenvironment with funds raised for Emerging Markets in 2015 declining 17% from 2014 to US$44 bn as also the deployment which reduced from US$ 38 bn to US$ 29 bn. Overall due tocurrency volatility and capital outflows the emerging markets share of global fundraising declined from 14% in 2014 to 12% in 2015

With projections of a steady 7%+ growth rates in the country India continued toattract investor interest. The fund raising environment in India picked up with anaggregate fund raising for FY2016 at US$ 5.8 bn up 24% compared to FY2015. However bulkof the funds have gone towards the Venture Capital sectors resulting in 45% of totalinvestments coming into IT&ITES sector. Even so concerns regarding a potentialslowdown continued to build as the number of VC deals fell by 14% on a quarterly basis inQ4 CY2015. Investments in the Real

Estate sector declined 20% year on year while limited primary deals were concluded inthe Infrastructure sector. However with developers looking to reduce their debt burdenand recycle capital the latter sector is showing considerable promise to Private Equityplayers and acceleration is expected in this sector going forward

With a clear understanding of the market drivers and the types of fund products whichwould meet the investor's requirements the Company has structured the IL&FS IndiaInfrastructure Fund targeting investors seeking a regular yield together with emergingmarket returns. Fund raising efforts are focused on investors in the geographies of JapanKorea and Australia. Despite keen interest investor conversion is slow due to currencyvolatility and also due to their prior experience in India

The Tara India Fund IV which had a first close of US$ 40 mn in January 2015 receivedadditional approvals from financial and multilateral institutions and also saw an increasein commitment from the existing investors. A final close is expected shortly. The Fund'sfocus areas of healthcare and life sciences education and skill development cleanenergy financial inclusion food and agriculture water urban infrastructure andconnectivity services are in sync with where the focus of the current government policylies as also the areas with maximum growth potential in the near and long term

In Real Estate IL&FS India Realty Fund II with a corpus of US$ 895 mn approachedthe end of its life in December 2015. The investors reposed their faith in the Fund'sendeavours to generate exits and extended the fund life recognising that optimal exitsoften involve protracted negotiations. In this sector as well recognising the shift inthe investors demand towards more structured products the Company has started marketing alisted product to them. While similar concerns around currency and returns are beingfaced your Company with its track record and expertise in the sector is addressing thesame through a measured process of investor education. However this has resulted inincreased timelines for fund raise

The Company also has a significant opportunity to showcase its expertise through itsdivestment track record and in implementation of Environment Social and GovernanceStandards (ESG) given that all the current Funds being managed by the Company haveimplemented ESG and are presently in the monitoring and harvesting stage

During the year the Company undertook 19 divestments and coupled with yield/dividendincome generated provided reverse cash flows of Rs. 14.7 bn during FY2016 compared tothe Rs.11.7 bn cash flows generated during FY2015. Key Funds such as IL&FS IndiaRealty Fund Standard Chartered IL&FS Asia Infrastructure Growth Fund and Tara IndiaFund III are in active divestment phase and your Company is working with the respectiveinvestee companies to lay the path towards liquidity over the next 2-3 years

With a steady divestment pattern the fee earning Assets Under Management (AUM) of theCompany has been declining. Lower profitability from this count has been offset by a focuson generating other fee based income as also by way of cost rationalisation

On a consolidated basis the Total Income for the Financial Year 2015-2016 wasRs.1907.60 mn and the Total Expenses for the year were Rs.1159.92 mn and the resultantProfit after Tax on a consolidated basis for the Financial Year 2015-2016 was Rs.560.85 mn(after minority interest)

On a standalone basis the Total Income of the Company for the Financial Year 2015-2016was '1070.96 mn and the Total Expenses for the year were Rs.422.15 mn and the resultantProfit after Tax for the Financial Year 2015-2016 was Rs.491.34 mn

SUBSIDIARIES AND JOINT VENTURES

Your Company has three Domestic Subsidiaries viz. IL&FS Asian InfrastructureManagers Limited IL&FS Urban Infrastructure Managers Limited and IIML Asset AdvisorsLimited and three Offshore Subsidiaries viz. IL&FS Investment Advisors LLC MauritiusIIML Advisors LLC Mauritius and IIML Fund Managers (Singapore) Pte Ltd Singapore

Your Company also has two Joint Venture Companies viz. Standard Chartered IL&FSManagement (Singapore) Pte Limited Singapore and IL&FS Milestone Realty AdvisorsPrivate Limited

As per Section 129(3) of the Companies Act 2013 and Regulation 33 of the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 [LODR] the consolidatedfinancial statements of the Company with its Subsidiaries forms part of the Annual Report

The copies of the Audited Annual Accounts of the Company's Subsidiaries and otherrelated documents can also be sought by any Member of the Company or its Subsidiaries onmaking a written request to the Company Secretary in this regard. The Annual Accounts ofthe Subsidiary Companies are also available for inspection by any Member at the Company'sRegistered Office

A separate statement pursuant to Section 129(3) of the Companies Act 2013 read withCompanies (Accounts) Rules 2014 containing the salient features of the FinancialStatements of the Company's Subsidiaries and Joint Ventures in Form AOC 1 is given as anAnnexure to Standalone Financial Statements

Performance and Financial position of the Subsidiaries and the Joint Venture Companies:

IL&FS Asian Infrastructure Managers Limited:

IL&FS Asian Infrastructure Managers Limited (IAIML) had been set up to manage thePan Asia Project Development Fund India (the Fund). The Fund having a corpus of Rs.1125mn invested across seven investments. At present the Fund has two balance investments onits books which are in the process being divested. IAIML is playing an active role inmanaging monitoring and crafting exit from these investments

The Total Income for Financial Year 2015-2016 was '5.63 mn inclusive of Income fromInvestments and Other Income of Rs.3.27 mn. The Total Expenses of IAIML for the year wereRs.5.09 mn and the resultant Profit after Tax for the year was Rs.0.54 mn

IL&FS Urban Infrastructure Managers Limited:

IL&FS Urban Infrastructure Managers Limited (IUIML) functions as the Asset Managerfor the Pooled Municipal Debt Obligations (PMDO) Facility. The objective of the PMDOFacility is to provide long tenure term loans to meet the debt requirements of urbaninfrastructure projects across cities in India. The corpus of the PMDO Facility stands atRs.50 bn. The Company's role as an Asset Manager is to identify and appraise the eligibleprojects and obtain sanctions of the lenders and thereafter assist the lenders todisburse monitor and administer the loan assets until entire repayment of the loan. ByMarch 312016 projects for term loans of Rs.30.82 bn have been sanctioned from the PMDOfacility and the Assets Under Management were at Rs.17.38 bn

The Total Income for the Financial Year 2015-2016 was Rs.157.41 mn inclusive of Incomefrom Investments and Other Income of Rs.8.77 mn. The Total Expenses of IUIML for the yearwere Rs.122.15 mn and the resultant Profit after Tax for the year was Rs.24.28 mn

IIML Asset Advisors Limited:

IIML Asset Advisors Limited (IAAL) is in the business of providing advice oninvestments finance management and consultancy and acts as the India Advisor toIL&FS Investment Advisors LLC for two funds

The Total Income of IAAL for the Financial Year 2015-2016 was Rs.95.20 mn inclusive ofIncome from Investments and Other Income of '7.07mn. The Total Expenses of IAAL for theyear were '68 mn and the resultant Profit after Tax for the year was '20.34 mn

IL&FS Investment Advisors LLC:

IL&FS Investment Advisors LLC Mauritius (IIAL) acts as the Investment Manager toIL&FS India Realty Fund LLC IL&FS India Realty Fund II LLC Tara India Fund IIILLC Tara India Fund IV LLC K2 Property Limited and Saffron India Real Estate Fund

The Total Income of IIAL for the Financial Year 2015-2016 was US$ 21.67 mn. The TotalExpenses of IIAL for the year was US$ 16.66 mn and the resultant Profit after Tax for theyear was US$ 4.83 mn

IIML Advisors LLC:

IIML Advisors LLC (IAL) has been set up for managing certain niche funds from Mauritius

IIML Fund Managers (Singapore) Pte Ltd:

IIML Fund Managers (Singapore) Pte Ltd (IFMPL) was incorporated for the purposes ofmanaging funds from Singapore. The Company is currently acting as a Manager to a Fund andas an Advisor to another Fund

The Total Income of IFMPL for the Financial Year 2015-2016 was US$ 0.44mn. The TotalExpenses of IFMPL for the year was US$ 0.61 mn and the resultant Loss for the year was US$0.17 mn

Standard Chartered IL&FS Management (Singapore) Pte Limited:

Standard Chartered IL&FS Management (Singapore) Pte. Limited (SCIMPL) is a 50:50Joint Venture Company established with the Standard Chartered Bank to manage the StandardChartered IL&FS Asia Infrastructure Growth Fund. The Manager is playing an active rolein managing and monitoring these investments

The Total Income of SCIMPL for the Financial Year 2015-2016 was US$ 2.34 mn. The TotalExpenses of SCIMPL for the year was US$ 2.42 mn and the resultant Loss (net of tax) forthe year was US$ 0.03 mn

IL&FS Milestone Realty Advisors Private Limited:

IL&FS Milestone Realty Advisors Private Limited (IMRAPL) is a Joint VentureCompany established with the objective of raising funds that would invest in incomeyielding assets. Since inception the JV raised three funds that are currently underexit/asset management mode

The Total Income of IMRAPL for the Financial Year 2015-2016 was Rs.86.4 mn inclusive ofIncome from Investments and Other Income of Rs.4.16 mn. The Total Expenses of IMRAPL forthe year were Rs.76.32 mn and the resultant Profit after Tax for the year was Rs.7.60 mn

FUTURE OUTLOOK

With a projected growth rate of 7.6% in FY2017 India's economy is on track to beingone of the fastest-growing economies in the World this year. The Government has alsoannounced measures with Rural sector and Infrastructure in focus to fuel growth.Continuing reform momentum forecast of a better than normal monsoon the likely boost toconsumption demand from the implementation of the 7th Pay Commission recommendations andcontinuing monetary policy accommodation are expected to help maintain the growthtrajectory. However any weakening in global economic activity and volatility in theforeign exchange market along with uncertainty in oil prices could generate spill overs inthe Indian market as well

Infrastructure in the country is in a challenging phase and with the regulator allowingIndian firms to launch Real Estate Investment Trusts (REITs) and Infrastructure InvestmentTrusts (InvITs) and the Government recently removing Dividend Distribution Tax on InvITs /REITs more foreign funds are now expected to flow in India's financial markets. IL&FSIndia Infrastructure Fund is rightly positioned and well timed to channelize the investorinterest into this sector. Though at a nascent stage it is also an upcoming opportunityfor IIML to play on its strength and expertise and act as managers for external InvITs andREITs

Your Company realises the need to evolve beyond classic fund management and to exploredifferent business models through deepening of its existing product offering - forinstance offering structured products across infrastructure and real estate not just inIndia but across geographies like Middle East and Africa. The Company is also initiatingadvisory services to offshore investors as success fee based mandates in the real estatespace and would seek to build on this practice

In addition the Company is conceptualising a consortium of like-minded investors toinvest in opportunities sourced through our robust network of corporate relationships andin the process also leverage the existing relationships. This initiative will give yourCompany a competitive edge on its peers through access to a large number of proprietarydeals. The acquisition of the Infrastructure Debt Fund Business will be completed uponreceipt of necessary regulatory approvals

While the new business lines envisaged would help broaden our revenue profile andensure growth it will also entail a higher marketing and establishment costs. YourCompany would continue to stay focussed on managing and optimizing its costs in order tomaintain its sight on profitability

With the Indian economy on its robust growth trajectory and a stable governmentcontinuing on the path to fiscal consolidation the investment environment in India isbecoming more optimistic. The Company with its long and diversified track record andunique expertise is optimally positioned to maximise on the opportunities that this offersand create better value for its stakeholders

DIRECTORS

Mr Siddharth Mehta who was appointed as an Independent Director during the yearresigned from the Company with effect from May 1 2016. Mr Arun Saha and Mr Shahzaad Dalalresigned as Directors of the Company with effect from September 14 2015 and May 2 2016respectively

Mr Hari Sankaran was appointed as an Additional Director of the Company at the meetingof the Board of Directors of the Company held on February 10 2016 to hold office untilthe conclusion of the next Annual General Meeting. Dr Archana Hingorani was re-appointedas the Chief Executive Officer & Executive Director subject to the approval of theshareholders for a period of five years with effect from April 20 2016

Mr Vibhav Kapoor shall retire by rotation at the ensuing Annual General Meeting andbeing eligible offers himself for re-appointment

BOARD INDEPENDENCE

The Company has received Declarations of Independence pursuant to Regulation 16(1)(b)and Regulation 25(1) of LODR and Section 149(6) of the Companies Act 2013 from all theIndependent Directors

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met four times during the Financial Year ended March 312016.The meetings were held during the year on May 5 2015 August 11 2015 November 10 2015and February 10 2016. The details of the Board Committee Meetings and attendance of theDirectors at the Board/Committee meeting are given in the Corporate Governance Report

SELECTION CRITERIA FOR APPOINTMENT OF DIRECTORS

The Board has framed a selection criteria for determining the necessary qualificationsand attributes for appointment of Directors and also to ensure Board diversity. Thedetails of the above are provided in the Corporate Governance Report

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and LODR the Board has carriedout an annual performance evaluation of the Board. The manner in which the evaluation hasbeen carried out has been explained in the Corporate Governance Report

DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:

(a) In the preparation of the Annual Accounts for the year ended March 31 2016 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures if any;

(b) that such accounting policies as mentioned in Note 1 of the Notes to the AnnualAccounts have been selected and applied consistently and judgments and estimates have beenmade that are reasonable and prudent so as to give a true and fair view of the state ofaffairs of the Company at the end of the March 312016 and of the Profit of the Companyfor the year ended on that date;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) that the Annual Accounts are prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the internalfinancial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS

Risk Management forms an integral part of the business of the Company. The Company hasa Risk Management Framework which not only ensures timely identification of risksanalysis of the reasons for such risk assessment of its materiality assessment of itsimpact but also adequate risk mitigation processes. The Risk Management Frameworkencompasses all areas of the Company's business and the Funds under its management. TheRisk Management Framework ensures that all risks however remote which could potentiallythreaten the existence of the Company are identified and risk mitigation steps identifiedfor them

The Company has an adequate system of internal controls commensurate with the nature ofits business and complexity of its operations to ensure accuracy of accounting recordscompliance with all laws and regulations and compliance with all rules processes andguidelines prescribed by the management

An extensive internal audit is carried out by an independent firm of CharteredAccountants. Post audit reviews are also carried out to ensure follow up on theobservations made. The scope of the internal audit is determined by the Audit Committeeand the Internal Audit Reports are reviewed by the Audit Committee on a regular basis

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered into during the Financial Year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant Related Party Transactions made by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. No new Material Related Party Transactions wereentered during the year by your Company. Accordingly the disclosure of Related PartyTransactions as required under Section 134(3) of the Companies Act 2013 in Form AOC 2 isnot applicable

The disclosure of transactions with Related Parties is set out in Note No. 27 of theStandalone Financial Statements forming part of the Annual Report

The Company has developed a Related Party Transactions Framework for the purpose ofidentification and approval of such transactions. The Policy on Related Party Transactionsas approved by the Board has been uploaded on the Company's website and is available onthe link http://www.iimlindia.com/Policies.aspx

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

Details of the Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the Notes Nos. 8 10 11 &14 ofthe Standalone Financial Statements

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act 2013 the Company has designated DrArchana Hingorani Executive Director & Chief Executive Officer Mr Manoj BorkarChief Financial Officer and Mr Sanjay Mitra Company Secretary as the Key ManagerialPersonnel of the Company

PARTICULARS OF EMPLOYEES

Your Directors wish to place on record their appreciation for the services rendered bythe employees of the Company at all levels

The particulars of the employees as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) and Rule 5(2) of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 forms part of the Directors' Report for the yearended March 312016

In terms of Section 136 of the Act the Report and Accounts are being sent to theMember and others entitled thereto excluding the information on employees' particularspursuant to Rule 5(2) of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 which is available for inspection by the Member at the RegisteredOffice of the Company during business hours on all working days of the Company up to thedate of the ensuing Annual General Meeting. Any Member interested in obtaining a copy ofthe said information may write to the Company Secretary at the Registered Office of theCompany. The particulars of employees pursuant to Rule 5(1) of The Companies (Appointmentand Remuneration of Managerial Personnel) Rules is annexed as Annexure 1

DETAILS OF EMPLOYEE STOCK OPTION PLANS

The Members of the Company had approved the Employee Stock Option Scheme 2003("ESOP 2003") and the Employee Stock Option Scheme 2004 ("ESOP 2004")for granting Options to the Directors and employees of the Company and the Employee StockOption Scheme 2006 ("ESOP 2006") for granting Options to the Directors andemployees of the Company and the Holding and Subsidiary Companies of the Company

During the Financial Year 2015-2016 the Nomination & Remuneration Committee of theCompany did not grant any Options under the above schemes. Further please note that thereare no options vested/exercised/lapsed during the Financial Year 2015-2016

The number of Options available for Grant in future under ESOP 2003 ESOP 2004 and ESOP2006 are as follows:

ESOP 2003 - 37815 Options ESOP 2004 - 130928 Options ESOP 2006 - 1935000 Options

All the options granted till date under ESOP 2003 ESOP 2004 & ESOP 2006 haveeither vested or lapsed on or before March 312016 and accordingly there is no employeecompensation cost for the year ended March 312016

The Auditors' Report for review of ESOP 2003 ESOP 2004 and ESOP 2006 is annexed asAnnexure 2 REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The remuneration paid to the Directors and the Senior Management is as perthe Managerial Remuneration Policy of the Company. Brief details of the ManagerialRemuneration Policy are provided in the Corporate Governance Report

POLICY FOR PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has always been committed to provide a safe and dignified work environmentfor its employees which is free of discrimination intimidation and abuse. The Company hasadopted a Policy for Prevention of Sexual Harassment of Women at Workplace under theprovisions of The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 ("Act"). The objective of this policy is to provideprotection against sexual harassment of women at workplace and for redressal of complaintsof any such harassment. The Company has also constituted an Internal Complaints Committeeto redress the complaints received under this policy. During the year no complaints werereceived by the Company

STATUTORY AUDITORS

The Statutory Auditors of the Company M/s Deloitte Haskins & Sells LLP CharteredAccountants Mumbai Registration Number 117366W/W-100018 were appointed at the AnnualGeneral Meeting held on August 7 2014 for a period of three years subject to annualratification of the same by the Members

Accordingly the appointment of M/s Deloitte Haskins & Sells LLP CharteredAccountants Mumbai as the Statutory Auditors of the Company is proposed for annualratification by the Members at the ensuing Annual General Meeting

SECRETARIAL AUDIT

The Company has appointed M/s Mehta & Mehta a firm of Company Secretaries inPractice to undertake the Secretarial Audit of the Company pursuant to the provisions ofSection 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014

The Secretarial Audit Report is annexed herewith as Annexure 3

QUALIFICATIONS IN THE AUDITORS’ REPORT

There are no qualifications reservations or adverse remarks or disclaimers made by M/sDeloitte Haskins & Sells LLP Statutory Auditors in their report and by M/s Mehta& Mehta Company Secretaries in Practice in their Secretarial Audit Report

The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company in the year under review

INCREASE IN SHARE CAPITAL

No new shares were allotted during the year and there has been no change in the sharecapital of the Company

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) and 53(f) of the LODR Related Party disclosureManagement Discussion and Analysis Disclosure of Accounting treatment Report onCorporate Governance along with the Auditors' Certificate on compliance with the CorporateGovernance requirements have been included in this Annual Report as separate sections

CORPORATE SOCIAL RESPONSIBILITY

The Company has adopted a Corporate Social Responsibility (CSR) Policy which aims atnurturing socio-economic development schemes for capacity building livelihood creationquality education empowerment of people etc. with the primary goal of ensuring thatbenefits reach the targeted beneficiaries. The approach of the Company for implementationof the CSR activities is to identify and fund projects in response to the needs ofsociety devise transparent monitoring mechanisms and ensure whole hearted commitment toget the desired results

The Company undertakes specific CSR projects that are in conformity with the ScheduleVII to the Companies Act 2013. Given that the Company is in the private equity fundmanagement business and invests across India and in all sectors the Company undertakesCSR activities in Mumbai and also across the country

In addition to the NGOs the Company currently supports it engages with NalandaFoundation a Charitable Trust established by Infrastructure Leasing & FinancialServices Limited (IL&FS) for its group CSR activities. The Annual Plan for CSR isapproved at the start of each financial year. Periodic reviews and/or modifications to theprojects and allocations are approved by the CSR Committee

The CSR policy is posted on the Company's website at the link http://iimlindia.com/Policies.aspx

The Company has been actively involved in various CSR initiatives over the last fewyears long before it was mandated by the Companies Act 2013. In addition to its existingCSR initiatives with the advent of Companies Act 2013 it was thought prudent tochannelise the Company's CSR effort along with the IL&FS Group's CSR initiatives inorder to make a more significant impact

Given only the second year of a much larger CSR initiative the Company has been ableto formalise the process identify focus areas and projects and deploy a comprehensivemonitoring and reporting system. The disbursement of the amounts is linked to theachievement of certain pre-identified milestones by the implementing agency. As theimplementing agencies have informed the Company that there have been delays related toobtaining the necessary approvals mobilisation of students and completion of trainingthe Company was not able to expend the entire statutory amount although the Company hasdeployed substantial amount of the total CSR commitment.The Composition of the CSRCommittee is given in the Corporate Governance Report

The Annual Report on the CSR activities is annexed herewith as Annexure 4

WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blowers Policy for employees to report instances ofunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct

The details of the Whistle Blower Policy is explained in the Corporate GovernanceReport and also posted on the website of the Company at http://www.iimlindia.com/policies.aspx

DEPOSITS

Your Company has not accepted any deposits from the public for the year underconsideration

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not own any manufacturing facility the Energy Conservation andTechnology Absorption particulars in the Companies (Accounts) Rules 2014 are notapplicable

The particulars regarding foreign earnings and expenditure appear as Item Nos. 21(c)and 21(d) of the Notes to Accounts of the Standalone Financial Statements

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return pursuant to Section 92(3)of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 in Form MGT 9 are annexed herewith as Annexure 5

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no orders passed by the Regulators/Courts which would impact the goingconcern status of the Company and its future operations

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to thank the Investors of the Funds undermanagement shareholders employees bankers Reserve Bank of India Securities andExchange Board of India other Regulatory authorities for their co-operation and continuedsupport to the Company. We look forward to their continued patronage and encouragement inall our future endeavours

For and on behalf of the Board
Place : Mumbai S M DATTA
Date : May 3 2016 CHAIRMAN