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IL&FS Investment Managers Ltd.

BSE: 511208 Sector: Financials
NSE: IVC ISIN Code: INE050B01023
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VOLUME 13401
52-Week high 5.75
52-Week low 2.14
P/E
Mkt Cap.(Rs cr) 152
Buy Price 4.80
Buy Qty 5000.00
Sell Price 4.85
Sell Qty 2783.00
OPEN 4.86
CLOSE 4.84
VOLUME 13401
52-Week high 5.75
52-Week low 2.14
P/E
Mkt Cap.(Rs cr) 152
Buy Price 4.80
Buy Qty 5000.00
Sell Price 4.85
Sell Qty 2783.00

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

Company director report

To The Shareholders of IL&FS Investment Managers Limited

Your Directors have pleasure in presenting for your consideration and approval the Thirty-third Annual Report with the Audited Financials of the Company for the year ended March 31 2019

FINANCIAL ACHIEVEMENTS AND DIVIDEND

For the year ended March 31 2019For the year ended March 31 2018For the year ended March 31 2019For the year ended March 31 2018
(? mn)(? mn)(? mn)(? mn)
ParticularsStandaloneStandaloneConsolidatedConsolidated
Total Income490.28553.651028.321189.16
Profit before Taxation147.13106.16(78.39)#265.79
Provision for Taxation45.3353.0858.3989.16
Net Profit after Taxation101.8053.08(136.77)176.63
Total Comprehensive income/(loss) for the period107.6659.11(84.33)*158.64*
Dividend (inclusive of dividend tax)197.05195.25197.05195.25

* after Minority Interest

# After exceptional item of ? 294.7 mn due to one time provision on the Inter Corporate Deposits lent by subsidiary companies to IL&FS and its group entities The Company does not propose to transfer any amount to the General Reserves

DIVIDEND

During the year your Company achieved a Total Comprehensive Income after tax of ? 107.66 mn. Your Directors recommend a Dividend of ? 0.30 per share of the Face Value of ? 2/- each. The total amount of Dividend is ? 197.05 mn (inclusive of dividend tax of ? 4.96 mn)

REVIEW OF OPERATIONS

The global economic activity is reflecting slowdown in trade and manufacturing. Barring US the economic activity has remained weak world over. The US economy has been relatively strong on account of higher government spending increase in private investment and a lower trade deficit. In UK the outlook is clouded by uncertainty relating to Brexit. The economic activity has slowed in many emerging market economies like China South Africa and Brazil. The Brazilian economy contracted for the first time since 2016 and there are fears that it could return to recession

Crude oil prices have been volatile and the Financial markets have also been driven by uncertainties surrounding the US-China trade negotiations and Brexit. Equity markets in most emerging markets have lost steam and the bond yields have been falling globally with central banks adopting an accommodative monetary policy to boost economic growth In India GDP growth for 2018-19 has been estimated at 6.8% lower than previously expected. The growth in economy decelerated sharply to 5.8% Q4FY2019 compared to 6.6% in the previous quarter and 8.1% in the comparable quarter of the previous financial year. Gross fixed capital formation (GFCF) growth declined sharply to 3.6%. Weak global demand due to escalation in trade wars may further impact India's exports and investment activity. In light of these developments the Reserve Bank of India has revised downward the GDP growth projection for FY2020 from 7.2% to 7.0%

The growth slowdown in the economy has been reflected in the cautiousness of Private Equity (PE) investors. The first quarter of 2019 recorded the lowest number of PE deals in the last 5 years. Furthermore the deal activity has been falling every quarter for the last 5 quarters At IIML the team has primarily focussed on divestments and has been able to achieve divestments aggregating ? 19 bn during the year.

This has been the most successful year for the team in respect of quantum of divestments achieved during a financial year. Similarly on the investment front IIML had been deploying capital through its fourth generation private equity Fund (Tara India Fund IV). Between April 2018 and early August 2018 the team undertook 4 new investments and 2 follow-on investments. With a robust deal pipeline in place the Fund team was on track to utilize all the unfunded commitment before the end of the Fund's Commitment Period

On the debt side IIML through its subsidiary which operates in the Infrastructure Debt Fund (IDF) space increased its AUM from ? 20 bn as on March 31 2018 to ? 23 bn as on March 31 2019. Likewise activity level at IIML's joint venture with Government of Andhra Pradesh also gained traction during the year. The joint venture company seeks to develop urban infrastructure projects in Andhra Pradesh and towards this end is now working on multiple projects

While satisfactory progress was being made by IIML in its business activities certain entities of the IL&FS Group began to default on their debt obligations during the second quarter of FY2019. Considering the impact the Government of India petitioned the National Company Law Tribunal (NCLT) to replace the IL&FS Board of Directors. In its order on October 1 2018 NCLT superseded the Board of IL&FS with a new Board with members nominated by Government of India. The Government of India also initiated an investigation into the affairs of IL&FS through the Serious Fraud Investigation Office and the Enforcement Directorate

The developments at the IL&FS Group has had a negative impact on IIML and its brand equity. These developments severely impacted the ongoing fund raising efforts. More importantly IIML had expended significant effort in nurturing two key the Africa focused Infrastructure Debt Fund in partnership with Islamic Corporation for the Development of the Private Sector (ICD) and the stressed asset initiative with Lone Star a US based global private equity firm which sought to invest into stressed thermal power and road assets in India. In case of the Africa Debt Fund consequent to the developments at IL&FS ICD put on hold further Fund raising activities. Likewise in case of the Lonestar initiative the team was working on an active pipeline of thermal power and road assets. Given that IL&FS was to infuse 10% of the investment the crisis at IL&FS led Lonestar to suspend the activities of the stressed asset facility.

Furthermore new Fund initiatives specifically in the infrastructure space were beginning to gain traction during the first half of FY2019 which have stalled On a consolidated basis the Income from Operations of the Company for FY2019 was ? 886.90 mn Income from Investment and Other Income was ? 141.42 mn. Accordingly the Total Income on a consolidated basis for FY2019 was ? 1028.32 mn. The resultant Loss after Tax on a consolidated basis for FY2019 was ? 136.77 mn after exceptional item of ? 294.7 mn due to one time provision on the Inter Corporate Deposits lent by subsidiary companies to IL&FS and its group entities On a standalone basis the Total Income of the Company for FY2019 was ? 490.28 mn and the Total Expenses for the year were ? 343.15 mn and the resultant Profit after Tax before other comprehensive income for FY2019 was ? 101.80 mn

FUTURE OUTLOOK

As regards IIML the adverse developments at the IL&FS Group have significantly impinged on IIML's business plans for revenue growth.

The newly constituted IL&FS Board has initiated the process to sell its holding in IIML. The outcome of this sale process is uncertain as the sale by IL&FS is contingent on approval from investors of some of the IIML managed Funds In the above context it is important to leverage IIML's extensive investment experience across sectors and strategies as also IIML's relationship with key global investors to rebuild the Company's business model. For the immediate future IIML would need to focus on delivering new initiatives largely in the form of non-Fund format based products. Such initiatives could include providing advisory services potentially in areas such as managing orderly liquidation of tail end portfolios of third party offshore funds. In the event IIML is able to successfully embark on these initiatives the same would enable the Company to ride over the current challenges and over time rebuild the Company on a better footing This period of business realignment is expected to take 12-18 months during which period the Company would have to deal with a large degree of uncertainties. However IIML has the ability to undergo this metamorphosis. IIML and its subsidiaries are debt free and have no outstanding creditors. The cash reserves of the IIML Group has gone up from ? 1252 mn as of March 31 2018 to ? 2090 mn as of March 31 2019. The past year has been a challenging one and more challenges lie ahead. The aforementioned strengths are expected to stand IIML in good stead as it endeavours to overcome the setbacks and once again rebuild its business model

MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR

The Auditors of the Company M/s B S R & Associates LLP resigned as the auditors of the Company with effect from June 20 2019 M/s. Khimji Kunverji & Co. LLP has been appointed as the auditors of the Company in casual vacancy on July 31 2019 and shall hold office until the conclusion of the ensuing Annual General Meeting

There have been no other material changes and commitments affecting the financial position of the Company which have occurred from the end of the financial year for the Company to which the financial statement

SUBSIDIARIES AND JOINT VENTURES

Your Company has Six Domestic Subsidiaries viz. IL&FS Asian Infrastructure Managers Limited IL&FS Urban Infrastructure Managers Limited IIML Asset Advisors Limited Andhra Pradesh Urban Infrastructure Asset Management Limited IL&FS Infra Asset Management Limited and IL&FS AMC Trustee Limited and two Offshore Subsidiaries viz. IL&FS Investment Advisors LLC Mauritius Managers (Singapore) Pte Ltd Singapore

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

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

The copies of the Audited Annual Accounts and other related documents of the Company's Subsidiaries can be sought by any shareholder of the Company or its Subsidiaries on making a written request to the Company Secretary in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection by any shareholder at the Company's Registered Office and are also uploaded on the company's website at http://www.iimlindia.com/financials_SubsidiaryCompanies.aspx

A separate statement pursuant to Section 129(3) of the Companies Act 2013 read with the Companies (Accounts) Rules 2014 containing the salient features of the Financial Statements of the Company's Subsidiaries and Joint Ventures in Form AOC 1 is given as an Annexure to the 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 the Pan Asia Project Development Fund India (the Fund). The Fund having a corpus of ? 1125 mn invested across seven investments. Six of these investments have been divested and the balance one investment is partially divested. IAIML is working actively to fully divest from the residual investment of the Fund.

The Total Income for FY2019 was ? 4.84 mn. The Total Expenses of IAIML for the year were ? 0.56 mn (excluding exceptional item of ? 20.92 mn) and the resultant total comprehensive income was a loss of ? 17.75 mn

IL&FS Urban Infrastructure Managers Limited :

IL&FS Urban Infrastructure Managers Limited (IUIML) functions as the Asset Manager for the Pooled Municipal Debt Obligations (PMDO) Facility. The objective of the PMDO Facility is to provide long tenure term loans to meet the debt requirements of urban infrastructure projects across cities in India. The Company's role as an asset manager is to identify and appraise the eligible projects and obtain sanctions from the lenders and thereafter facilitate the borrowers to seek disbursement from the lenders monitor and administer the project assets until entire repayment of the loan

The amount outstanding under the PMDO Facility as on March 31 2019 was at ? 13.54 bn

The Total Income for FY2019 was ? 36.87 mn inclusive of Other Income of ? 13.29 mn. The Total Expenses of IUIML for the year were ? 77.42 mn (excluding exceptional item of ? 21.30 mn) and the resultant total comprehensive income was a loss of ? 74.95 mn

IIML Asset Advisors Limited :

IIML Asset Advisors Limited (IAAL) acts as India Advisor to two Offshore Real Estate Funds

The Total Income of IAAL for FY2019 was ? 28.46 mn inclusive of Income from Investments and Other Income of ? 13.04 mn. The Total Expenses of IAAL for the year were ? 15.16 mn (excluding exceptional item of ? 13.30 mn) and the resultant total comprehensive income was at a loss of ? 41.99 mn

IL&FS Investment Advisors LLC :

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

The Total Income of IIAL for FY2019 was US$ 5.47 mn. The Total Expenses of IIAL for the year were US$ 6.1 mn and the resultant loss for the year was US$ 0.63 mn

IIML Fund Managers (Singapore) Pte Ltd :

IIML Fund Managers (Singapore) Pte Ltd (IFMPL) was incorporated for the purposes of managing funds from Singapore. The Company surrendered its Capital Market Service License to the Monetary Authority of Singapore in FY2019

The Total Income of IFMPL for FY2019 was US$ 0.06 mn. The Total Expenses of IFMPL for the year were US$ 0.19 mn and the resultant loss for the year was US$ 0.13 mn

Andhra Pradesh Urban Infrastructure Asset Management Limited :

The Company has set up a subsidiary namely `Andhra Pradesh Urban Infrastructure Asset Management Limited' (APUIAML) along with the Government of Andhra Pradesh. The Company and the Government of Andhra Pradesh hold 51% : 49% equity stake respectively in APUIAML

APUIAML has been formed with an objective of acting as the Fund Manager for the Andhra Pradesh Urban Development Fund (APUDF).

APUDF has been registered with SEBI as an AIF Category II fund APUDF had been created with the objective to finance the Urban Local Bodies in the State of Andhra Pradesh. APUIAML will also be involved in integrated urban infrastructure project development and program management for the Urban Local Bodies and provide end to end solutions to them

APUIAML will help the State Government of Andhra Pradesh to manage APUDF by mobilizing resources from different sources like banks and financial institutions including private sector arms of multilateral and bilateral agencies and by leveraging Government and other financial assistance. These funds would be deployed in the urban areas on various infrastructure projects including public private partnership projects

APUIAML Projects to the extent of ? 1347.45 Crores are under implementation and projects of about ?293.91 Cr are in the tendering stage

The Total Income for FY2019 was ? 205 mn inclusive of Other Income of ? 5 mn. The Total Expenses for the year were ? 147.07 mn and the resultant total comprehensive income for the year was ? 42.02 mn

IL&FS Infra Asset Management Limited :

IL&FS Infra Asset Management Limited (IIAML) is the asset manager of the IL&FS Mutual Fund which is an Infrastructure Debt Fund (IDF) as per SEBI Mutual Fund Regulations

The IDF has closed ended schemes with a commitment of ? 16180 mn and ? 1725 mn is yet to be drawn down as of March 31 2019.

The Fund has made 14 investments as on March 31 2019 and AUM as of March 31 2019 was ? 20903 mn

The Total Income for FY2019 was ? 260.44 mn inclusive of Other Income of ? 10.16 mn. The Total Expenses for the year were ? 315.66 mn (including exceptional item of ? 200.20 mn) and the resultant total comprehensive income was a loss of ? 54.48 mn

IL&FS AMC Trustee Limited :

IL&FS AMC Trustee Limited (IATL) acts as the Trustee of the IDF

The Total Income for FY2019 was ? 2.10 mn inclusive of Other Income of ? 0.03 mn. The Total Expenses for the year were ? 1.11 mn and the resultant total comprehensive income for the year was ? 0.81 mn

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

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

The Total Income of SCIMPL for FY2019 was US$ 1.32 mn. The Total Expenses of SCIMPL for the year were US$ 0.66 mn and the resultant Profit after Tax for the year was US$ 0.57 mn

IL&FS Milestone Realty Advisors Private Limited :

IL&FS Milestone Realty Advisors Private Limited (IMRAPL) is a Joint Venture (JV) Company established with the objective of raising funds that would invest in income yielding assets. Since inception the JV raised three funds and the Company has been able to successfully divest from all the investments of these three funds

The Total Income of IMRAPL for FY2019 was ? 0.89 mn. The Total Expenses of IMRAPL for the year were ? 2.77 mn and the resultant loss for the year was ? 1.88 mn

DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr Nand Kishore and Mr Kaushik Modak were appointed as the Non-Executive Directors of the Company with effect from December 6 2018 and Mr Chitranjan Kahlon was appointed as Non-Executive Independent Director with effect from August 28 2018 subject to the approval of the shareholders

The Board of Directors on March 28 2019 approved the re-appointment of Mr Datta as an Independent Non-Executive Director for a second term of five consecutive years from April 1 2019 to March 31 2024 subject to the approval of the shareholders. On the even date the Board also approved the re-appointment of Mr Datta as an Independent Non-Executive Chairman of the Company for a second term of five years from April 1 2019 to March 31 2024 subject to the approval of the shareholders

The Board recommends the appointment of Mr Nand Kishore and Mr Kaushik Modak as Non-Executive Directors of the Company appointment of Mr Chitranjan Kahlon as Non-Executive Independent Director re-appointment of Mr S M Datta as an Independent Non- Executive Director for a second term of fiveconsecutive years and re-appointment of Mr Datta as an Independent Non-Executive Chairman of the Company for a term of five years Mr Bansi Mehta and Ms Shubhalakshmi Panse resigned as a Non-Executive Independent Directors of the Company with effect from June 5 2018 and April 30 2019 respectively. Mr Ravi Parthasarathy and Mr Vibhav Kapoor resigned as Non- Executive Directors of the Company with effect from July 21 2018 and October 19 2018 respectively. Mr Ramesh Bawa resigned as the Managing Director of the Company with effect from September 22 2018

Mr Hari Sankaran ceased to be a Director of the Company pursuant to the Order passed by the National Company Law Tribunal (NCLT) with effect from October 1 2018

None of the Directors retire by rotation at the ensuing Annual General Meeting pursuant to the provisions of Section 149 Section 152 and Section 162 of the Companies Act 2013

There have been no changes in the Directors and Key Managerial Personnel of the Company other than the above

BOARD INDEPENDENCE

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

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met six times during the Financial Year ended March 31 2019 and the gap between two meetings did not exceed 120 days. The meetings were held during the year on May 4 2018 two meetings on August 28 2018 October 4 2018 December 14 2018 and February 6 2019. The details of the composition of the Board Committees and attendance of the Directors at the Board meetings/Committee meetings are given in the Corporate Governance Report

SELECTION CRITERIA FOR APPOINTMENT OF DIRECTORS

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

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the LODR the Board has carried out an annual performance evaluation of the Board and Committees thereof. The manner in which the evaluation has been 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 and explanations obtained by them your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act 2013 :

(a) in the preparation of the Annual Accounts for the year ended March 31 2019 the applicable Accounting Standards have been followed along with proper explanations relating to material departures if any;

(b) that such accounting policies as mentioned in Note 2 of the Notes to the Annual Accounts have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of March 31 2019 and of the Profit of the Company for the year ended on that date;

(c) proper and sufficient care has been taken for the maintenance of adequate accounting of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS

Risk Management forms an integral part of the business of the Company. The Company has a Risk Management Framework which not only ensures timely identification of risks analysis of the reasons for such risk assessment of its materiality assessment of its impact but also adequate risk mitigation processes. The Risk Management Framework encompasses all areas of the Company's business including the Funds under its management. The Risk Management Framework ensures that all risks which could potentially threaten the existence of the Company are identified and risk mitigation is initiated in due time The Company has an adequate system of internal controls including financial controls with reference to Financial Statements commensurate with the nature of its business and complexity of its operations to ensure accuracy of accounting records compliance with all laws and regulations and compliance with all rules processes and guidelines prescribed by the management

An extensive internal audit is carried out by an independent firm of Chartered Accountants. Post audit reviews are also carried out to ensure follow up on the observations made. The scope of the internal audit is determined by the Audit Committee and 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 on an arm's length basis and were in the ordinary course of business. There are no materially significant Related Party Transactions made by the Company with Promoters Directors Key Managerial Personnel or other the interest of the Company at large.

No new Material Related Party Transactions were entered during the year by your Company. Accordingly the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act 2013 in Form AOC 2 is not applicable The disclosure of transactions with Related Parties is set out in Note No. 25 of the Standalone Financial Statements forming part of the Annual Report

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

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Details of the Loans Guarantees and Investments covered under the provisions of Section 186 of the Companies Act 2013 are given in Note No. 7 of the Standalone Financial Statements

KEY MANAGERIAL PERSONNEL

Pursuant to Section 203 of the Companies Act 2013 the Company has designated Mr Krishna Kumar Gangadharan Chief Executive Officer Mr Manoj Borkar Chief Financial Officer and Mr Sanjay Mitra Company Secretary as the Key Managerial Personnel of the Company

PARTICULARS OF EMPLOYEES

The particulars of the employees as required under Section 197(12) of the Companies Act 2013 read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 forms part of the Directors' Report for the year ended March 31 2019 and are annexed as Annexure 1 and Annexure 2 respectively

DETAILS OF EMPLOYEE STOCK OPTION PLANS

The Shareholders 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 Stock Option Scheme 2006 (ESOP 2006) for granting Options to the Directors and Employees of the Company and the Holding and Subsidiary Companies of the Company

During FY2019 the Nomination & Remuneration Committee of the Company did not grant any Options under the above schemes.

Further please note that there are no options vested/ exercised/lapsed during FY2019

The Nomination & Remuneration Committee of the Company thereafter approved and closed the ESOP 2003 ESOP 2004 and ESOP 2006 with effect from May 29 2019. The following number of options available for grant in future under ESOP 2003 ESOP 2004 and ESOP 2006 were considered as lapsed :

ESOP 200337815 Options
ESOP 2004130928 Options
ESOP 20061935000 Options

All the options granted till date under ESOP 2003 ESOP 2004 and ESOP 2006 have either vested or lapsed on or before March 31 2019 and accordingly there is no employee compensation cost for the year ended March 31 2019

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors Senior Management and their remuneration. The remuneration paid to the Directors and the Senior Management is as per the Managerial Remuneration Policy of the Company. The Management Remuneration Policy is posted on the company's website at http:// www.iimlindia.com/Policies.aspx and the brief details thereof are given 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 environment for its employees which is free of discrimination intimidation and abuse. The Company has adopted a Policy for Prevention of Sexual Harassment of Women at Workplace under the provisions of The Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. The objective of this policy is to provide protection against sexual harassment of women at workplace and for redressal of complaints of any such harassment. The Company has also constituted an Internal Complaints Committee (ICC) to redress the complaints received under this policy. During the year no complaints were received by the ICC

STATUTORY AUDITORS

M/s B S R & Associates LLP Chartered Accountants were appointed as the Statutory Auditors of the Company for a term of five consecutive years at the 31st Annual General Meeting held on September 6 2017. The Statuary Auditors resigned as the Auditors of the Company with effect from June 20 2019 on account of their firm's policies and re-evaluation of the Company done by them considering recent development including actions and investigations initiated by various regulatory authorities in relation to Infrastructure Leasing & Financial Services Limited and its affiliated companies

Post the resignation of M/s B S R & Associates LLP the Board at its meeting held on July 31 2019 on the recommendation of the Audit Committee and subject to the approval of the shareholders appointed M/s Khimji Kunverji & Co. LLP as the Statutory Auditor of the Company in a Casual Vacancy pursuant to Section 139(8) of the Companies Act 2013 to hold office till the conclusion of the ensuing

Annual General Meeting

The Board at its meeting held on July 31 2019 on the recommendation of the Audit Committee and subject to the approval of the shareholders also recommended the appointment of M/s Khimji Kunverji & Co. LLP as the Statutory Auditor of the Company for a term of years from the conclusion of 33rd Annual General meeting upto the conclusion of 38th Annual General Meeting five Accordingly at the ensuing Annual General Meeting an ordinary resolution is proposed for the appointment of M/s Khimji Kunverji & Co.

LLP as the Statutory Auditor of the Company in casual vacancy to hold office till the conclusion of the ensuing Annual General Meeting and an ordinary resolution is also proposed to appoint them as the Statutory Auditor of the Company for a term of five conclusion of 33rd Annual General meeting upto the conclusion of 38th Annual General Meeting

SECRETARIAL AUDIT

The Company has appointed M/s Mehta & Mehta a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The Secretarial Audit Report for the Financial Year ended March 31 2019 is annexed herewith as an Annexure 3(I)

According to Regulation 24A of the LODR effective from April 1 2019 every listed entity and its material unlisted subsidiaries incorporated in India shall undertake secretarial audit and shall annex with its annual report a secretarial audit report given by a company secretary in practice in such form as may be specified with effect from the year ended March 31 2019. Accordingly Secretarial Audit report of Andhra Pradesh Urban Infrastructure Asset Management Limited and IL&FS Infra Asset Management Limited is attached as Annexure 3(II) and 3(III) respectively

QUALIFICATIONS IN THE AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT AND ITS EXPLANATIONS

The Statutory auditors M/s B S R & Associates LLP have qualified the Standalone and Consolidated Financials of the Company in their Statutory Audit report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the year under review

Further the Secretarial Auditor M/s Mehta & Mehta Company Secretaries in Practice have made an observation in the Secretarial Audit Report The explanations or comments by the Board on the Statutory Audit qualification and Secretarial Audit observation pursuant to Section 134(3)(f) of the Companies Act and LODR are as follows :

Statutory Auditor's qualification and its explanation :

Qualification 1:

In view of the investigation by Serious Fraud Investigation Officer (SFIO) against the Infrastructure Leasing & Financial Services Limited (IL&FS) the Holding Company and its subsidiaries (including the Company) and the NCLT order for re-opening of past books of Accounts of IL&FS and its fellow subsidiaries- IL&FS Financial Services Limited (`IFIN') and IL&FS Transportation Networks Limited (`ITNL') the Auditors qualified that they were unable to comment on the consequential impact thereof on these standalone annual financial results

Explanation 1:

The Company based on its current understanding believes that the implications if any arising from the aforesaid developments would be known only after the aforesaid matters are concluded and hence are not determinable at this stage

Qualification 2:

The Company has not been able to determine the accurate and complete list of related parties for the period April 1 2017 to March 31 2019 as defined under Ind As 24 Related Party Disclosures and as per Companies Act 2013. The Auditors qualified that they were unable to obtain sufficient appropriate audit evidence with regard to completeness and accuracy the financial statements and on the Company's compliance with the provisions of the Companies Act 2013 with regard to transactions

Explanation 2 :

In absence of list of receipt of Related Parties as on March 31 2019 from the Holding Company the Company has identified its related party's relationship on the basis of information made available in the past by the Holding Company. Accordingly the related parties may not be complete and accurate. However the Company believes that unavailability of the required information from the Holding Company may not have a material impact on the financial results

Secretarial Auditors' observation and its explanation :

Observation 1:

The outcome of the Board Meeting dated May 4 2018 was disclosed to the stock exchanges beyond the stipulated time as per Regulation 30 and Schedule III Part A of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Explanation 1:

The Company started filing both the standalone and consolidated Financials on both the Bombay Stock Exchange and National Stock Exchange soon after the Board meeting and managed to file the same within the statutory timeline of 30 minutes post the conclusion of the Board meeting. However on account of a technical hitch there has been delay of few minutes in filing the outcome of the Board meeting on the stock exchanges

INCREASE IN SHARE CAPITAL

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

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards have been duly followed by the Company during the year

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) and 53(f) of the LODR Related Party Disclosures Management Discussion and Analysis Disclosure of

Accounting treatment Report on Corporate Governance have been included in this Annual Report as separate sections. The Certificate on Compliance with the Corporate Governance requirement from M/s. Mehta & Mehta Practicing Company Secretaries is annexed to the Corporate Governance Report

CORPORATE SOCIAL RESPONSIBILITY

The Company has adopted a Corporate Social Responsibility (CSR) Policy which aims at nurturing socio-economic development schemes for capacity building livelihood creation quality education empowerment of people etc. with the primary goal of ensuring that benefits reach the targeted beneficiaries The Company undertakes specific CSR projects that are in conformity with Schedule VII of the Companies Act 2013. Given that the Company is in the private equity fund management business and invests across India and in all sectors the Company undertakes CSR activities in Mumbai and also across the country

The Annual Plan for CSR is approved at the start of each financial year. Reviews and/or modifications to the projects and allocations are undertaken periodically. The CSR Policy is posted on the Company's website at the link http://iimlindia.com/Policies.aspx The Composition of the CSR Committee is given in the Corporate Governance Report. The Annual Report on the CSR activities is annexed herewith as Annexure 4

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy/Vigil Mechanism for Employees and Directors to report instances of unethical behaviour actual or suspected fraud or violation of the Company's Code of Conduct. During the year no personnel has been denied access to the Audit Committee The details of the Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the Company's website at the link http://iimlindia.com/Policies.aspx

DEPOSITS

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

The particulars regarding foreign earnings and expenditure appear as Note Nos. 19(c) and 19(d) of the Notes to Accounts of the Standalone Financial Statements respectively

The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows is as follows :

USDINR
Outflow152001011575
Inflow5850000405034580

COST RECORDS

Maintenance of cost records as specified by the Central Government under section 148 (1) of the Companies Act 2013 are not required to be maintained by the Company and accordingly such accounts and records are not maintained for the FY 2018-19

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 and Administration) Rules 2014 in Form MGT 9 are annexed herewith as Annexure 5

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

The National Company Law Tribunal (NCLT) passed an Order on October 1 2018 under the provisions of Sections 241 and 242 of the Companies Act 2013 for suspending the existing Board of Directors of Infrastructure Leasing and Financial Services Limited (IL&FS) the Holding Company and new members were inducted on the Board of IL&FS

The NCLT based on a petition by IL&FS vide its Order dated April 26 2019 granted its exemption to IL&FS and its group Companies from appointing Independent Directors and Woman Directors on the Board of IL&FS and its group companies The NCLT by an Order passed on February 11 2019 has categorized `169 IL&FS Group Entities' incorporated within the territorial jurisdiction of India into (a) Green Entities (b) Amber Entities (c) Red Entities. Our Company and its subsidiaries have been categorised as Green entities - meaning one which can continue to meet all its payment obligation (both financial and operational) as and when they become due

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to thank the Investors of the Funds under management shareholders employees bankers Reserve Bank of India 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

For and on behalf of the Board
Place : MumbaiS M DATTA
Date : July 31 2019Chairman

   

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