You are here » Home » Companies » Company Overview » IL&FS Investment Managers Ltd

IL&FS Investment Managers Ltd.

BSE: 511208 Sector: Financials
NSE: IVC ISIN Code: INE050B01023
BSE 00:00 | 20 Feb 2.97 -0.02
(-0.67%)
OPEN

3.04

HIGH

3.04

LOW

2.95

NSE 00:00 | 20 Feb 3.00 0.05
(1.69%)
OPEN

3.05

HIGH

3.05

LOW

2.95

OPEN 3.04
PREVIOUS CLOSE 2.99
VOLUME 15939
52-Week high 6.52
52-Week low 2.90
P/E 9.90
Mkt Cap.(Rs cr) 93
Buy Price 2.97
Buy Qty 317.00
Sell Price 3.50
Sell Qty 5000.00
OPEN 3.04
CLOSE 2.99
VOLUME 15939
52-Week high 6.52
52-Week low 2.90
P/E 9.90
Mkt Cap.(Rs cr) 93
Buy Price 2.97
Buy Qty 317.00
Sell Price 3.50
Sell Qty 5000.00

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 theThirty-third Annual Report with the Audited Financials of the Company for the year endedMarch 31 2019

FINANCIAL ACHIEVEMENTS AND DIVIDEND

For the year ended March 31 2019 For the year ended March 31 2018 For the year ended March 31 2019 For the year ended March 31 2018
( mn) ( mn) ( mn) ( mn)
Particulars Standalone Standalone Consolidated Consolidated
Total Income 490.28 553.65 1028.32 1189.16
Profit before Taxation 147.13 106.16 (78.39)# 265.79
Provision for Taxation 45.33 53.08 58.39 89.16
Net Profit after Taxation 101.80 53.08 (136.77) 176.63
Total Comprehensive income/(loss) for the period 107.66 59.11 (84.33)* 158.64*
Dividend (inclusive of dividend tax) 197.05 195.25 197.05 195.25

* after Minority Interest

# After exceptional item of र 294.7 mn due to one time provision on the Inter CorporateDeposits lent by subsidiary companies to IL&FS and its group entities The Company doesnot propose to transfer any amount to the General Reserves

DIVIDEND

During the year your Company achieved a Total Comprehensive Income after tax of र107.66 mn. Your Directors recommend a Dividend of र 0.30 per share of the Face Value of र2/- each. The total amount of Dividend is र 197.05 mn (inclusive of dividend tax of र 4.96mn)

REVIEW OF OPERATIONS

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

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

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

This has been the most successful year for the team in respect of quantum ofdivestments achieved during a financial year. Similarly on the investment front IIML hadbeen deploying capital through its fourth generation private equity Fund (Tara India FundIV). Between April 2018 and early August 2018 the team undertook 4 new investments and 2follow-on investments. With a robust deal pipeline in place the Fund team was on track toutilize 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 InfrastructureDebt Fund (IDF) space increased its AUM from र 20 bn as on March 31 2018 to र 23 bn ason March 31 2019. Likewise activity level at IIML's joint venture with Government ofAndhra Pradesh also gained traction during the year. The joint venture company seeks todevelop urban infrastructure projects in Andhra Pradesh and towards this end is nowworking on multiple projects

While satisfactory progress was being made by IIML in its business activities certainentities of the IL&FS Group began to default on their debt obligations during thesecond quarter of FY2019. Considering the impact the Government of India petitioned theNational Company Law Tribunal (NCLT) to replace the IL&FS Board of Directors. In itsorder on October 1 2018 NCLT superseded the Board of IL&FS with a new Board withmembers nominated by Government of India. The Government of India also initiated aninvestigation into the affairs of IL&FS through the Serious Fraud Investigation Officeand the Enforcement Directorate

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

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

FUTURE OUTLOOK

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

The newly constituted IL&FS Board has initiated the process to sell its holding inIIML. The outcome of this sale process is uncertain as the sale by IL&FS is contingenton approval from investors of some of the IIML managed Funds In the above context it isimportant to leverage IIML's extensive investment experience across sectors andstrategies as also IIML's relationship with key global investors to rebuild theCompany's business model. For the immediate future IIML would need to focus on deliveringnew initiatives largely in the form of non-Fund format based products. Such initiativescould include providing advisory services potentially in areas such as managing orderlyliquidation of tail end portfolios of third party offshore funds. In the event IIML isable to successfully embark on these initiatives the same would enable the Company toride over the current challenges and over time rebuild the Company on a better footingThis period of business realignment is expected to take 12-18 months during which periodthe Company would have to deal with a large degree of uncertainties. However IIML has theability to undergo this metamorphosis. IIML and its subsidiaries are debt free and have nooutstanding creditors. The cash reserves of the IIML Group has gone up from र 1252 mn asof March 31 2018 to र 2090 mn as of March 31 2019. The past year has been a challengingone and more challenges lie ahead. The aforementioned strengths are expected to standIIML in good stead as it endeavours to overcome the setbacks and once again rebuild itsbusiness 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 auditorsof the Company with effect from June 20 2019 M/s. Khimji Kunverji & Co. LLP has beenappointed as the auditors of the Company in casual vacancy on July 31 2019 and shall holdoffice until the conclusion of the ensuing Annual General Meeting

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

SUBSIDIARIES AND JOINT VENTURES

Your Company has Six Domestic Subsidiaries viz. IL&FS Asian Infrastructure ManagersLimited IL&FS Urban Infrastructure Managers Limited IIML Asset Advisors LimitedAndhra Pradesh Urban Infrastructure Asset Management Limited IL&FS Infra AssetManagement 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&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 and Disclosure Requirements)

Regulations 2015 [LODR] the consolidated financial statements of the Company with itsSubsidiaries forms part of the Annual Report

The copies of the Audited Annual Accounts and other related documents of the Company'sSubsidiaries can be sought by any shareholder of the Company or its Subsidiaries on makinga written request to the Company Secretary in this regard. The Annual

Accounts of the Subsidiary Companies are also available for inspection by anyshareholder at the Company's Registered Office and are also uploaded on the company'swebsite at http://www.iimlindia.com/financials_SubsidiaryCompanies.aspx

A separate statement pursuant to Section 129(3) of the Companies Act 2013 read withthe Companies (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 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 thePan Asia Project Development Fund India (the Fund). The Fund having a corpus of र 1125mn invested across seven investments. Six of these investments have been divested and thebalance one investment is partially divested. IAIML is working actively to fully divestfrom the residual investment of the Fund

The Total Income for FY2019 was र 4.84 mn. The Total Expenses of IAIML for the yearwere र 0.56 mn (excluding exceptional item of र 20.92 mn) and the resultant totalcomprehensive income was a loss of र 17.75 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 Company's role as an asset manager isto identify and appraise the eligible projects and obtain sanctions from the lenders andthereafter facilitate the borrowers to seek disbursement from the lenders monitor andadminister the project assets until entire repayment of the loan

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

The Total Income for FY2019 was र 36.87 mn inclusive of Other Income of र 13.29 mn. TheTotal Expenses of IUIML for the year were र 77.42 mn (excluding exceptional item of र21.30 mn) and the resultant total comprehensive income was a loss of र 74.95 mn

IIML Asset Advisors Limited :

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

The Total Income of IAAL for FY2019 was र 28.46 mn inclusive of Income from Investmentsand Other Income of र 13.04 mn. The Total Expenses of IAAL for the year were र 15.16 mn(excluding exceptional item of र 13.30 mn) and the resultant total comprehensive incomewas at a loss of र 41.99 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 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 theyear 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 ofmanaging funds from Singapore. The Company surrendered its Capital Market Service Licenseto the Monetary Authority of Singapore in FY2019

The Total Income of IFMPL for FY2019 was US$ 0.06 mn. The Total Expenses of IFMPL forthe 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 InfrastructureAsset Management Limited' (APUIAML) along with the Government of Andhra Pradesh. TheCompany and the Government of Andhra Pradesh hold 51% : 49% equity stake respectively inAPUIAML

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

APUDF has been registered with SEBI as an AIF Category II fund APUDF had been createdwith 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 andprogram 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 mobilizingresources from different sources like banks and financial institutions including privatesector arms of multilateral and bilateral agencies and by leveraging Government and otherfinancial assistance. These funds would be deployed in the urban areas on variousinfrastructure projects including public private partnership projects

APUIAML Projects to the extent of र 1347.45 Crores are under implementation andprojects of about र293.91 Cr are in the tendering stage

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

IL&FS Infra Asset Management Limited :

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

The IDF has closed ended schemes with a commitment of र 16180 mn and र 1725 mn is yetto 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 wasर 20903 mn

The Total Income for FY2019 was र 260.44 mn inclusive of Other Income of र 10.16 mn.The Total Expenses for the year were र 315.66 mn (including exceptional item of र 200.20mn) and the resultant total comprehensive income was a loss of र 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 र 2.10 mn inclusive of Other Income of र 0.03 mn. TheTotal Expenses for the year were र 1.11 mn and the resultant total comprehensive incomefor the year was र 0.81 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 the investments made by the Fund

The Total Income of SCIMPL for FY2019 was US$ 1.32 mn. The Total Expenses of SCIMPL forthe 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 incomeyielding assets. Since inception the JV raised three funds and the Company has been ableto successfully divest from all the investments of these three funds

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

DIRECTORS & KEY MANAGERIAL PERSONNEL

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

The Board of Directors on March 28 2019 approved the re-appointment of Mr Datta as anIndependent Non-Executive Director for a second term of five consecutive years from April1 2019 to March 31 2024 subject to the approval of the shareholders. On the even datethe Board also approved the re-appointment of Mr Datta as an Independent Non-ExecutiveChairman of the Company for a second term of five years from April 1 2019 to March 312024 subject to the approval of the shareholders

The Board recommends the appointment of Mr Nand Kishore and Mr Kaushik Modak asNon-Executive Directors of the Company appointment of Mr Chitranjan Kahlon asNon-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 MrDatta as an Independent Non-Executive Chairman of the Company for a term of five years MrBansi Mehta and Ms Shubhalakshmi Panse resigned as a Non-Executive Independent Directorsof the Company with effect from June 5 2018 and April 30 2019 respectively. Mr RaviParthasarathy and Mr Vibhav Kapoor resigned as Non- Executive Directors of the Companywith effect from July 21 2018 and October 19 2018 respectively. Mr Ramesh Bawa resignedas 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 bythe National Company Law Tribunal (NCLT) with effect from October 1 2018

None of the Directors retire by rotation at the ensuing Annual General Meeting pursuantto 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 Companyother than the above

BOARD INDEPENDENCE

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

NUMBER OF MEETINGS OF THE BOARD

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

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the LODR the Board hascarried out an annual performance evaluation of the Board and Committees thereof. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance 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 2019 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures if any;

(b) that such accounting policies as mentioned in Note 2 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 March 31 2019 and of the Profit of the Company forthe year ended on that date;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting of the Companies Act 2013 for safeguarding the assets of the Company and forpreventing 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 internalfinancial controls were adequate and were operating effectively; and

(f) that proper systems were devised to ensure compliance with the provisions of allapplicable 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 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 including the Funds under its management.The Risk Management Framework ensures that all risks which could potentially threaten theexistence of the Company are identified and risk mitigation is initiated in due time TheCompany has an adequate system of internal controls including financial controls withreference to Financial Statements commensurate with the nature of its business andcomplexity of its operations to ensure accuracy of accounting records compliance with alllaws and regulations and compliance with all rules processes and guidelines prescribed bythe 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 the interest of the Company at large.

No new Material Related Party Transactions were entered during the year by yourCompany. Accordingly the disclosure of Related Party Transactions as required underSection 134(3) of the Companies Act 2013 in Form AOC 2 is not applicable The disclosureof transactions with Related Parties is set out in Note No. 25 of the Standalone FinancialStatements 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 atthe link http://www.iimlindia.com/Policies.aspx

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

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

KEY MANAGERIAL PERSONNEL

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

PARTICULARS OF EMPLOYEES

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 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 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 FY2019 the Nomination & Remuneration Committee of the Company did not grantany 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 andclosed the ESOP 2003 ESOP 2004 and ESOP 2006 with effect from May 29 2019. The followingnumber of options available for grant in future under ESOP 2003 ESOP 2004 and ESOP 2006were considered as lapsed :

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

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

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. The Management Remuneration Policy isposted on the company's website at http:// www.iimlindia.com/Policies.aspx and the briefdetails 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 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. The objective of this policy is to provide protection against sexualharassment 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 thecomplaints received under this policy. During the year no complaints were received by theICC

STATUTORY AUDITORS

M/s B S R & Associates LLP Chartered Accountants were appointed as the StatutoryAuditors of the Company for a term of five consecutive years at the 31st Annual GeneralMeeting held on September 6 2017. The Statuary Auditors resigned as the Auditors of theCompany with effect from June 20 2019 on account of their firm's policies andre-evaluation of the Company done by them considering recent development includingactions and investigations initiated by various regulatory authorities in relation toInfrastructure 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 onJuly 31 2019 on the recommendation of the Audit Committee and subject to the approval ofthe shareholders appointed M/s Khimji Kunverji & Co. LLP as the Statutory Auditor ofthe Company in a Casual Vacancy pursuant to Section 139(8) of the Companies Act 2013 tohold 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 AuditCommittee and subject to the approval of the shareholders also recommended the appointmentof M/s Khimji Kunverji & Co. LLP as the Statutory Auditor of the Company for a termof years from the conclusion of 33rd Annual General meeting upto the conclusion of 38thAnnual General Meeting five Accordingly at the ensuing Annual General Meeting an ordinaryresolution 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 theconclusion of the ensuing Annual General Meeting and an ordinary resolution is alsoproposed to appoint them as the Statutory Auditor of the Company for a term of fiveconclusion of 33rd Annual General meeting upto the conclusion of 38th Annual GeneralMeeting

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 for the Financial Yearended March 31 2019 is annexed herewith as an Annexure 3(I)

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

QUALIFICATIONS IN THE AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT AND ITSEXPLANATIONS

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

Further the Secretarial Auditor M/s Mehta & Mehta Company Secretaries inPractice have made an observation in the Secretarial Audit Report The explanations orcomments by the Board on the Statutory Audit qualification and Secretarial Auditobservation 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 theInfrastructure Leasing & Financial Services Limited (IL&FS) the Holding Companyand its subsidiaries (including the Company) and the NCLT order for re-opening of pastbooks of Accounts of IL&FS and its fellow subsidiaries- IL&FS Financial ServicesLimited (‘IFIN') and IL&FS Transportation Networks Limited (‘ITNL') theAuditors qualified that they were unable to comment on the consequential impact thereof onthese standalone annual financial results

Explanation 1:

The Company based on its current understanding believes that the implications ifany arising from the aforesaid developments would be known only after the aforesaidmatters 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 relatedparties for the period April 1 2017 to March 31 2019 as defined under Ind As 24 RelatedParty Disclosures and as per Companies Act 2013. The Auditors qualified that they wereunable to obtain sufficient appropriate audit evidence with regard to completeness andaccuracy the financial statements and on the Company's compliance with the provisions ofthe 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 HoldingCompany the Company has identified its related party's relationship on the basis ofinformation made available in the past by the Holding Company. Accordingly the relatedparties may not be complete and accurate. However the Company believes thatunavailability of the required information from the Holding Company may not have amaterial 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 stockexchanges 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 theBombay Stock Exchange and National Stock Exchange soon after the Board meeting and managedto file the same within the statutory timeline of 30 minutes post the conclusion of theBoard meeting. However on account of a technical hitch there has been delay of fewminutes 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 sharecapital of the Company

SECRETARIAL STANDARDS

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

CORPORATE GOVERNANCE

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

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

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 Company undertakes specific CSR projectsthat are in conformity with Schedule VII of the Companies Act 2013. Given that theCompany is in the private equity fund management business and invests across India and inall 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/ormodifications to the projects and allocations are undertaken periodically. The CSR Policyis posted on the Company's website at the link http://iimlindia.com/Policies.aspx TheComposition of the CSR Committee is given in the Corporate Governance Report. The AnnualReport 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 andDirectors to report instances of unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct. During the year no personnel has been deniedaccess to the Audit Committee The details of the Whistle Blower Policy is explained in theCorporate Governance Report and also posted on the Company's website at the linkhttp://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 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 ForeignExchange outgo during the year in terms of actual outflows is as follows :

USD INR
Outflow 15200 1011575
Inflow 5850000 405034580

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 andaccordingly 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 andAdministration) 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 theprovisions of Sections 241 and 242 of the Companies Act 2013 for suspending the existingBoard 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 grantedits exemption to IL&FS and its group Companies from appointing Independent Directorsand Woman Directors on the Board of IL&FS and its group companies The NCLT by an Orderpassed on February 11 2019 has categorized ‘169 IL&FS Group Entities'incorporated within the territorial jurisdiction of India into (a) "GreenEntities" (b) "Amber Entities" (c) "Red Entities". Our Companyand its subsidiaries have been categorised as Green entities - meaning one which cancontinue to meet all its payment obligation (both financial and operational) as and whenthey become due

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 : July 31 2019 Chairman