IFMR Investment Managers Private Limited

2013-14
IFMR Investment Managers
Private Limited
First Annual Report
“Our Group’s mission is to ensure that
every individual and every enterprise has
complete access to financial services”
Corporate Information
Board of Directors:
Registered Office
Puneet Gupta, Chairperson
David Ira Wallack
Anand Sahasranaman
Vijayaraghavan V
10th Floor-Phase 1,
IIT-Madras Research Park
Kanagam Village, Taramani
Chennai 600 113, India
CIN: U74120TN2014PTC095064
Bankers
Contact Details
ICICI Bank, Chennai
Dhanlaxmi Bank, Chennai
Phone: +91 44 6668 7000
Fax: +91 44 6668 7010
Email: contact.investments@ifmr.co.in
Website: http://ims.ifmr.co.in
Auditors
Deloitte Haskins & Sells, Chennai
Page 2
Annual Report 2013-14
Key Milestones and Achievements
Message from the Chairperson
Directors’ Report
Report on Corporate Governance
Independent Auditors’ Report
Balance Sheet
Statement of Profit and Loss
Cash Flow Statement
Notes Forming Part of Financial Statements
Board of Directors
IFMR Investment Managers Private Limited
Page 3
4
5
8
11
14
15
16
18
24
Message from the Chairperson
Dear Shareholders,
It gives me immense pleasure to introduce to you
IFMR Investment Managers Private Limited, an
entity incorporated in February 2014 with the
objective of promoting and managing investment
funds that are trying to reach financial services to
sectors that still depend primarily on informal or
non-banking channels for meeting their
requirements of on-lending funds.
IFMR Investment Managers is an important
addition to the IFMR Trust Group. Access to
medium and long term funds as well as mezzanine
funds has always been a challenge for several high
quality originators in the country. In the last few
years access to senior debt and short duration debt
has been increasing. Partly accelerated by another
IFMR Trust Group Company, IFMR Capital, that
helped its partners raise nearly Rs.3,504 crores
from various investors in the financial year 2013-14
alone. However, access to subordinated tranches
and longer term debt so essential for orderly
growth of financial intermediaries has remained
elusive.
This Fund will be followed by other funds focused
on retail finance sectors such as affordable housing,
small business and micro enterprise finance and
used commercial vehicle finance etc. IFMR
Investment Managers will leverage on the vast
experience within the IFMR Trust Group in
working with these sectors. Many of the partners
of the IFMR Trust Group companies have reached
out for support in helping raise long term and
subordinated tranches. With a strong presence of
the IFMR Trust Group in this space, IFMR
Investment Managers will hit the ground running.
We are already in the process of seeking an external
Fund Manager rating. In ensuring further
transparency, IFMR Investment Managers will also
explore getting ratings for Funds managed.
We have a long journey ahead and I am sure you
will all join me in wishing IFMR Investment
Managers all the best for its endeavours.
Puneet Gupta
Chairperson
Through focused funds that seek to address such
gaps, we believe IFMR Investment Managers will
play an important role in deepening financial access
within the country.
IFMR Investment Managers has been appointed by
IFMR Finance for Freedom Social Venture Fund,
acting through its Trustee, SBI Cap Trustee
Company Ltd, to act as the Investment Manager
for its proposed “IFMR FImpact Investment
Fund” focussed on the microfinance sector. The
Fund has made an application to SEBI for
registration as a Social Venture Fund under
Category I of the AIF regulations in March 2014
with a target fund size of Rs.100 crores and is
expected to launch post approval.
Page 4
Annual Report 2013-14
Directors’ Report
Dear Shareholders,
Deposits:
Your Directors have immense pleasure in
presenting the first annual report of your
Company, together with the audited financial
statements for the period ended March 31, 2014.
The Company has not accepted any deposits from
the public for the period under review.
Background:
The company is yet to commence operations.
The company was incorporated on February 17,
2014. The company was formed with the objective
of providing high quality investment management
services in asset classes that impact the financially
excluded.
Some of the highlights for the period ended March
31, 2014 are:
Financial Results:
Particulars
Period ended
March 31, 2014
Amount in INR
Income
109,055.00
Expenses
322,489.00
(Loss)/Profit Before Tax
(213,434.00)
Less: Tax Expenses
0.00
(Loss)/Profit After Tax
(213,434.00)
Add: Brought forward Profit /
0.00
(Loss)
Less: Transfer to reserves
0.00
Balance Carried Forward
(213,434.00)
Earnings per share (basic)
(213.43)
Earnings per share (diluted)
(213.43)
Dividend:
Your Directors do not recommend for any
dividend for the period under review.
Transfer to Reserves:
In the absence of profits, your Company has not
made any transfers to reserves during the period
under review.
IFMR Investment Managers Private Limited
Operational Highlights:
1) The company has entered into an Investment
Management agreement with SBICAP Trustee
Company Limited for being the Investment
Manager for the proposed IFMR FImpact
Investment Fund, an Alternate Investment
Fund under Category 1 of the SEBI (Alternate
Investment Fund) Regulations which is
awaiting approval from SEBI.
2) The company has entered into an Investment
Adviser agreement with IFMR Investment
Adviser Services Private Limited in March
2014 for obtaining the investment adviser
services towards the proposed IFMR FImpact
Investment Fund, an Alternate Investment
Fund under Category 1 of the SEBI (Alternate
Investment Fund) Regulations which is
awaiting approval from SEBI.
Future Outlook:
The company has started its focus with the
microfinance asset class and it has already taken
efforts to move into other asset classes like housing
finance, SME etc. Even though the investors are
risk averse given the underlying factors related to
the current economic scenario as well as the
underlying asset class, we plan to provide comfort
through sponsor commitment which is more than
required under regulations. Also, the company will
seek independent review of its fund management
capabilities through rating from rating agencies on
Page 5
the fund management quality and also seeks to
avail rating of the fund at an appropriate stage.
The comfort level of the Investors in looking at
locking-in investment for a medium to long term is
linked closely with the Government’s policy action
in enabling investments on one hand and outcome
of various initiatives to improve economic growth
on the other. These will be key determinants to the
timelines associated with your Company’s plans for
obtaining investor commitments into the fund post
its launch. Your Company, however, on receipt of
SEBI approval will reach out to many potential
investors who are looking at investments in social
sector over a medium to long term duration and, in
a ‘business as usual’ scenario, expects to go live
during the first half of financial year 2014-15.
Capital Infusion:
The company mobilized Rs. 136 lakhs of capital
funds during the period ended March 31, 2014 by
issuance of 1,000 equity shares of Rs.100 each to
its promoter IFMR Trust and 135,000 preference
shares of Rs.100 each to IFMR Mezzanine Finance
Private Limited, a company which is wholly owned
by IFMR Trust.
Directors:
During the year, David Ira Wallack and Puneet
Gupta were appointed as Additional Directors, on
February 18, 2014 and March 1, 2014 respectively.
Subject to the Companies Act, 1956 and as per the
Articles of Association of the Company, none of
the Directors shall retire by rotation.
Auditors:
M/s. Deloitte Haskins & Sells, Chartered
Accountants, First Auditors of the Company retire
at the ensuing Annual General Meeting and are
eligible for re-appointment. The company has
received confirmation that their appointment, if
made, will be within the limits prescribed under
Section 139 (1) of the Companies Act 2013 read
with Rule 4 of the Companies (Audit and Auditors)
Rules, 2014.
Subsidiary Company:
As on March 31, 2014, the Company does not have
any subsidiaries.
Compliance:
Conservation of Energy, Technology
Absorption, Foreign Exchange Earnings and
Outgo:
The Company has complied with all the mandatory
regulatory compliances as required under the
Companies Act, various tax statutes and other
regulatory bodies.
The Company has no activity relating to
conservation of energy and technology absorption.
There were no foreign exchange earnings or
outflow during the period under review.
The Company does not have a Whole Time
Secretary and accordingly, pursuant to the second
proviso of Section 383A, a compliance certificate is
obtained from a practicing Company Secretary for
the period ended March 31, 2014.
Particulars of Employees:
Corporate Governance:
The provision under Section 217(2A) of the
Companies Act, 1956 and the rules framed there
under are not applicable since none of the
employees were in receipt of remuneration in
excess of the limits prescribed therein.
A report on corporate governance is attached and
forms part of this report.
Page 6
Annual Report 2013-14
Directors Responsibility Statement:
records in accordance with the provisions of
the Companies Act, 1956 for safeguarding the
assets of the company and for preventing and
detecting fraud and other irregularities. To
ensure this, the company has established
internal control systems, consistent with its
size and nature of operations. These systems
are reviewed and updated on an on-going
basis.
To the best of their knowledge and belief, and
according to the information and explanations
obtained by them, your Directors confirm the
following in terms of Section 217(2AA) of the
Companies Act, 1956:
1) that in preparation of the financial statements
the generally accepted accounting principles
(GAAP) of India and applicable accounting
standards issued by Institute of Chartered
Accountants of India have been followed.
2) that appropriate accounting policies have been
selected and applied consistently and
judgments and estimates that are reasonable
and prudent have been made so as to give a
true and fair view of the state of affairs of the
company at the end of the financial year and of
the profit or loss of the company for that
period;
4) that they have prepared the annual accounts on
a going concern basis.
Acknowledgement:
Your Directors take this opportunity to thank the
shareholders, employees, bankers, auditors,
Securities and Exchange Board of India, other
Regulatory authorities for their co-operation and
continued support to the Company. We look
forward to their continued patronage and
encouragement in all our future endeavours.
3) that they have taken proper and sufficient care
for the maintenance of adequate accounting
On behalf of the Board
Place: Chennai
Date: May 2, 2014
IFMR Investment Managers Private Limited
Puneet Gupta
Chairperson
Page 7
Report on Corporate Governance
Corporate Governance is the commitment of an
organization to follow ethics, fair practices and
transparency in all its dealings with its various
stakeholders such as Employees, Investors,
Government and the Community at large. Sound
corporate governance is the result of external
marketplace commitment and legislation plus a
healthy board culture which directs the policies and
philosophy of the organization. Your Company is
committed to good Corporate Governance in all its
activities and investment management processes.
of strategic supervision of the Company as trustees
of the Shareholders. The Board currently consists
of four Directors. All the members of the Board
are non-executive directors and the Company is in
the process of inducting independent directors.
During the period ended March 31, 2014, three
Board Meetings were held with a gap of not more
than four months between any two meetings.
Particulars of the Directors’ attendance to the
Board Meeting and particulars of their other
company directorships are given in the table below.
Corporate Governance Philosophy
Changes in Board Constitution
IFMR Investment Managers Private Limited’s
(IIMPL) philosophy on corporate governance
envisages adherence to the highest levels of
accountability, transparency and fairness, in all
areas of its operations and in all interactions with
its stakeholders. The Board shall work to ensure
the success and continuity of the Company’s
business through the appointment of qualified
management and through on-going monitoring to
assure the Company’s activities are conducted in a
responsible, ethical and transparent manner.
During the period ended March 31, 2014, the
following changes took place in the constitution of
the Board.
David Ira Wallack was appointed as an additional
director with effect from February 18, 2014.
Puneet Gupta was appointed as an additional
director with effect from March 1, 2014.
Committees of the Board
During the year, the Investment Committee of the
Board was constituted. The Board fixes the terms
of reference of sub-committees and also delegated
powers from time to time. The minutes of the
meetings of the committee are circulated to the
Board for its information and confirmation.
Board of Directors
In terms of the Corporate Governance philosophy
all statutory and other significant material
information is placed before the Board of
Directors to enable it to discharge its responsibility
Particulars of Directors’ Attendance
Name
Nature of Directorship
Anand Sahasranaman
Non-Executive Director
No. of directorships
excluding IIMPL
1
Board Meetings attended
(Meetings held)
3 (3)
Vijayaraghavan V
Non-Executive Director
7
3 (3)
David Ira Wallack*
Non-Executive Director
8
1 (2)
Puneet Gupta**
Non-Executive Chairman
9
1 (1)
* Appointed as additional director w.e.f February 18, 2014
** Appointed as additional director w.e.f March 1, 2014
Page 8
Annual Report 2013-14
Investment Committee
Composition & Meetings
The Investment Committee prescribes investment
criteria on the basis of which IFMR Investment
Managers will make investments. The Investment
Committee also evaluates the investment proposals
for approving investments in eligible securities
issued by potential investee companies.
The Investment Committee consists of the
following members, namely,
Terms of reference
1. Anand Sahasranaman, Member
2. Vijayaraghavan V, Member
The Committee met once during 2013-14 on
March 25, 2014.
Name
Nature of
Membership
Anand Sahasranaman
Member
Meetings
attended
(Meetings
held)
1 (1)
Vijayaraghavan V
Member
1 (1)
This Committee’s goals and responsibilities shall
be:
 To review and approve, if deemed fit and
proper, the underwriting guidelines for each
asset class, prepared by the Investment
Origination and Management Team (including
any other person/entity to whom the
responsibility has been entrusted to)
 To identify, review and recommend new fund
opportunities to the Board for its approval
 To review and approve, if deemed fit and
proper, the investment proposals made by the
Investment Origination and Management
Team (including any other person/entity to
whom the responsibility has been entrusted
to)
 To evaluate and approve, if deemed fit and
proper, terms and conditions of all
investments
 To review and approve periodically, policies
and guidelines governing the Company’s
investments and monitor compliance with
these policies
 To review and approve, if deemed fit and
proper, exit strategies for the investments
made by the any fund managed by the
Company
 To perform such other responsibilities
regarding the Company’s investment activities
or policies or other matters as the Board may
from time to time assign the Committee.
IFMR Investment Managers Private Limited
An independent member representing Investors
will be inducted after the launch of the proposed
IFMR FImpact Investment Fund.
Remuneration of Non-Executive Directors
As a policy, the Company does not pay any sitting
fee or other remuneration to non-executive
Directors or other members of any committee
constituted of the Board.
General Body Meetings
During the period ended March 31, 2014, no
General Meetings were held.
Compliance Report
The board reviews the compliance of all applicable
laws every quarter and gives appropriate directions,
wherever necessary.
Code of Conduct
The Board has adopted a code of conduct,
corporate governance policy and whistle blower
policy applicable to all directors and employees of
the Company.
Page 9
Risk Management
The Company keeps the Board informed
periodically of the significant risks associated with
the business of the company and the various risk
identification and mitigation processes put in place
by the management.
Disclosures
Shareholding pattern as on March 31, 2014
Category
Number
% of
of Shares
total
Promoters:
IFMR Trust (including
1,000
100.0
its nominee)
Total
1,000
100.0
Address for Correspondence
The particulars of transactions between the
Company and its related parties, as defined in
Accounting Standard 18, are set out the financial
statements. There were no material transactions
with related parties i.e., transactions of the
company of material nature, with its promoters, the
directors or the management, their subsidiaries or
relatives etc. that may have potential conflict with
the interest of company at large.
IFMR Investment Managers Private Limited
10th Floor-Phase 1, IIT-Madras Research Park,
Kanagam Village, Taramani,
Chennai - 600 113
Tel.: +91 044 6668 7000
Fax: +91 044 6668 7010
E-mail: contact.investments@ifmr.co.in
Website: http://ims.ifmr.co.in
General Shareholder Information
Financial year: April 1st to March 31st
Current period: February 17, 2014 to March 31,
2014
(being the first financial year from the date of
incorporation)
On behalf of the Board
Place: Chennai
Date: May 2, 2014
Puneet Gupta
Chairperson
Page 10
Annual Report 2013-14
Independent Auditors’ Report
TO THE MEMBERS OF IFMR INVESTMENT MANAGERS PRIVATE LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of IFMR INVESTMENT MANAGERS
PRIVATE LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2014, the
Statement of Profit and Loss and the Cash Flow Statement for the period then ended, and a summary of the
significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
The Company’s Management is responsible for the preparation of these financial statements that give a true
and fair view of the financial position, financial performance and cash flows of the Company in accordance
with the Accounting Standards notified under the Companies Act, 1956 (“the Act”) (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles
generally accepted in India. This responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the financial statements that give a true and
fair view and are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of
India. Those Standards require that we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment
of the risks of material misstatement of the financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
financial statements give the information required by the Act in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India:
IFMR Investment Managers Private Limited
Page 11
(a)
in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;
(b)
in the case of the Statement of Profit and Loss, of the loss of the Company for the period ended on
that date; and
(c)
in the case of the Cash Flow Statement, of the cash flows of the Company for the period ended on that
date.
Report on Other Legal and Regulatory Requirements
1.
As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central
Government in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2.
As required by Section 227(3) of the Act, we report that:
(a)
We have obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
(b)
In our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books.
(c)
The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by
this Report are in agreement with the books of account.
(d)
In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow
Statement comply with the Accounting Standards notified under the Act (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).
(e)
On the basis of the written representations received from the directors as on 31 st March, 2014
taken on record by the Board of Directors, none of the directors is disqualified as on 31st March,
2014 from being appointed as a director in terms of Section 274(1)(g) of the Act.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm’s Registration No. 008072S)
Bhavani Balasubramanian
(Partner)
(Membership No. 22156)
CHENNAI, May 2, 2014
Page 12
Annual Report 2013-14
ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our
report of even date)
Having regard to the nature of the Company’s business / activities / results during the year, clauses (i), (ii),
(vi), (vii), (viii), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi),(xvii), (xix) and (xx) of paragraph 4 of the Order are not
applicable to the Company.
(i)
The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms
or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.
(ii) In our opinion and according to the information and explanations given to us, there is an adequate
internal control system commensurate with the size of the Company and the nature of its business and
during the course of our audit we have not observed any continuing failure to correct major weaknesses
in such internal control system.
(iii) To the best of our knowledge and belief and according to information and explanations given to us,
there are no contracts or arrangements that need to be entered in the register maintained in pursuance to
Section 301 of Companies Act, 1956.
(iv) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including
Income-tax, Service Tax, Cess and other material statutory dues applicable to it with the
appropriate authorities. The statutory dues relating to Provident Fund, Investor Education and
Protection Fund, Employees’ State Insurance, Sales Tax, Wealth Tax, Customs Duty and Excise
Duty are not applicable to the Company.
(b) There were no undisputed amounts payable in respect of Income-tax, Service Tax, Cess and other
material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from
the date they became payable.
(c) There were no disputed amounts due in respect of Income-tax, Service Tax and Cess which have
not been deposited as on 31st March 2014.
(v) According to the information and explanations given to us, the Company has made preferential
allotment of shares to parties and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956 at a price which, in our opinion, is prima facie not prejudicial to the interest of
the Company.
(vi) To the best of our knowledge and according to the information and explanations given to us, no fraud
by the Company and no material fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm’s Registration No. 008072S)
Bhavani Balasubramanian
(Partner)
(Membership No. 22156)
CHENNAI, May 2, 2014
IFMR Investment Managers Private Limited
Page 13
Balance Sheet
Particulars
Note No.
March 31, 2014
(Amount in INR)
A.
(1)
(2)
Equity and Liabilities
Shareholders’ funds
(a) Share Capital
(b) Reserves and Surplus
3
4
13,600,000
(213,434)
13,386,566
Current Liabilities
(a) Trade Payables
(b) Other current Liabilities
5
6
604,047
114,973
719,020
14,105,586
7
8
9
13,648,951
436,736
19,899
14,105,586
Total
B.
Assets
(1)
Current Assets
(a) Cash and Cash Equivalents
(b) Short Term Loans and Advances
(c) Other Current Assets
Total
14,105,586
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
For and on behalf of the Board of Directors
Bhavani Balasubramanian
Partner
Puneet Gupta
Chairman
Vijayaraghavan V
Director
Place: Chennai
Date: May 2, 2014
Page 14
Annual Report 2013-14
Statement of Profit and Loss
Particulars
Note No.
Income
Revenue from Operations
Other Income
Total Revenue (I)
10
Expenses
Employee Benefits Expense
Depreciation
Other Expenses
Total Expenses (II)
11
Loss for the Period Before Tax (I-II)
For the period from
February 17, 2014 to
March 31, 2014
Amount in INR
109,055
109,055
322,489
322,489
(213,434)
Tax Expenses:
a) Tax Expenses for the Current Period
b) Deferred Tax
(213,434)
Loss for the Period
Earnings per share (of Rs.100 each)
Basic
Diluted
14
14
(213.43)
(213.43)
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
For and on behalf of the Board of Directors
Bhavani Balasubramanian
Partner
Puneet Gupta
Chairman
Place: Chennai
Date: May 2, 2014
IFMR Investment Managers Private Limited
Page 15
Vijayaraghavan V
Director
Cash Flow Statement
For the period from
February 17, 2014 to
March 31, 2014
Amount in INR
Particulars
Cash Flow From Operating Activities:
Loss for the period before Tax
(213,434)
Adjustments for:
Interest Income from Banks
(109,055)
Operating Profit before Working Capital Changes
(322,489)
Changes in working capital:
Adjustments for (increase)/decrease in Operating Assets
Short Term Loans and Advances
(423,776)
Other current assets
(19,899)
Adjustments for increase/(decrease) in Operating Liabilities
Current Liabilities
719,020
Cash used in operations
(47,144)
Net income taxes Paid
-
Net Cash used in Operations Activities (A)
(47,144)
Cash Flow From Investing Activities:
Interest Income from Bank
96,095
Net cash generated from Investing Activities (B )
96,095
Cash Flow From Financing Activities:
Proceeds from issue of Equity Shares
100,000
Proceeds from issue of Preference Shares
13,500,000
Net cash generated from Financing Activities (C )
13,600,000
Net Increase in Cash and Cash Equivalents (A+B+C)
13,648,951
Cash and Cash Equivalents at the beginning of the period
Cash and Cash Equivalents at the end of the period
Page 16
13,648,951
Annual Report 2013-14
For the period from
February 17, 2014 to
March 31, 2014
Amount in INR
Particulars
Reconciliation of Cash and Cash equivalents:
Cash and Cash Equivalents as per Balance sheet (Refer Note 7)
Less: Bank balances not considered as Cash and cash equivalents as defined in AS 3
Cash Flow Statements
Net Cash and cash equivalents (as defined in AS 3 Cash Flow Statements)
13,648,951
13,648,951
Cash and cash equivalents at the end of the period comprises of:
Balances with banks in Current Account
13,648,951
See accompanying notes forming part of the financial statements
In terms of our report attached
For Deloitte Haskins & Sells
Chartered Accountants
For and on behalf of the Board of Directors
Bhavani Balasubramanian
Partner
Puneet Gupta
Chairman
Place: Chennai
Date: May 2, 2014
IFMR Investment Managers Private Limited
Page 17
Vijayaraghavan V
Director
Notes Forming Part of Financial Statements
Note 1 - Corporate Information
IFMR Investment Managers Private Limited was incorporated on February 17, 2014, under the Companies
Act, 1956 as a wholly owned subsidiary of IFMR Trust with the aim to carry on the business of investment
Company and also to provide portfolio management services to offshore funds and all kinds of investment
funds.
Note 2 - Significant Accounting Policies
2.1
Basis of accounting and preparation of financial statements:
The financial statements of the Company have been prepared in accordance with the Generally
Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards
notified Section 211(3C) of the Companies Act, 1956 (“the 1956 Act”) (which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 (“the 2013 Act”) in terms of General
Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant
provisions of the 1956 Act/ 2013 Act, as applicable. The Financial statements have been prepared on
accrual basis under the historical cost convention.
The Company is a subsidiary of IFMR Trust, which is not a Small and Medium Sized entity (SMC) as
defined in the General Instructions in respect of Accounting Standards notified under the Companies
Act, 1956. Accordingly, the Company has also been classified as non-SMC and has complied with the
accounting standards as applicable to a non - SMC.
2.2
Use of estimates
The preparation of the financial statements in conformity with the Generally Accepted Accounting
Principles requires the management estimates and assumptions to be made that affect the reported
amounts of assets and liabilities on the date of financial statements and the reported amount of
revenues and expenses during the period. Management believes that the estimates used in preparation
of the financial statements are prudent and reasonable. Future results could differ due to these
estimates and the differences between the actual results and the estimates are recognised in the periods
in which the results are known / materialise.
2.3
Employee benefits:
During the period from February 17, 2014 to March 31, 2014, the company did not have any
employees on rolls.
2.4
Taxes on Income:
i) Current Tax:
Current tax is determined in accordance with the provisions of the Income Tax Act, 1961
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Annual Report 2013-14
ii) Deferred Tax:
Deferred tax is recognised on timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or
substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists
that sufficient future taxable income will be available against which these can be realised. Deferred
tax assets and liabilities are offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each Balance Sheet date for their realisability.
2.5
Provisions and Contingencies:
Provisions are recognised only when the Company has a present or legal or constructive obligation as a
result of past events for which it is probable that an outflow of economic benefit will be required to
settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent
liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly
within the control of the company or (ii) Present obligation arising from past events where it is not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of
the amount of the obligation cannot be made.
Note 3 - Share Capital
Particulars
March 31, 2014
Amount in INR
Authorised
1,000 Equity Shares of Rs.100 each with voting rights
135,000 Redeemable Preference Shares of Rs.100 each
Total
100,000
13,500,000
13,600,000
Issued, Subscribed and Fully Paid up
1,000 Equity Shares of Rs.100 each with voting rights
135,000 Redeemable Preference Shares of Rs.100 each
Total
100,000
13,500,000
13,600,000
(a) Details of Shares held by each Shareholder more than 5% of Shares
Name of the Shareholder
March 31, 2014
No. of Shares
% of
held
Shareholding
IFMR Trust (Controlling Entity) and its nominee - Equity Shares
1,000
100.00
IFMR Mezzanine Finance Private limited ( Fellow subsidiary ) 135,000
100.00
Preference Shares
IFMR Investment Managers Private Limited
Page 19
Movement in Equity shares
Particulars
As at March 31, 2014
No. of shares
Opening Balance
Fresh Issue
Closing Balance
1,000
1,000
Amount in
INR
100,000
100,000
Movement in Preference shares
As at March 31, 2014
Amount in
No. of shares
INR
13,500,000
1,35,000
13,500,000
1,35,000
Particulars
Opening Balance
Fresh Issue
Closing Balance
Terms / rights attached to Equity Shares:
The Company has only one class of Equity Shares having par value of Rs.100 per share. Each holder of
equity shares is entitled to one vote per share.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining
assets of the Company. The distribution will be in proportion to the number of equity shares held by the
shareholders.
Terms / rights attached to Preference Shares:
Preference Shares are redeemable at par at the end of 4 years from the date of allotment i.e. 24th February
2018.
The preference shareholder is entitled to vote only on resolution placed before the Company which directly
affects the rights attached to such preference shares as set out in Section 87 of the Companies Act, 1956. The
right to entitlement for dividend on preference shares not declared in a financial year shall be carried forward
to the subsequent financial years.
Preference Dividend
Arrears of Fixed cumulative Dividend on Preference shares as at March 31, 2014
Rs. 106,521.
Note 4: Reserves and Surplus
March 31, 2014
Amount in INR
Deficit in Statement of Profit and Loss
Opening Balance
-
Add: Loss for the Year
(213,434)
Closing balance
(213,434)
Page 20
Annual Report 2013-14
Note 5: Trade Payables
March 31, 2014
Amount in INR
Sundry Creditors
2,809
Advance from Related Parties (Refer Note 12)
601,238
Total
604,047
Note 6: Other Current Liabilities
March 31, 2014
Amount in INR
Statutory Liabilities
2,613
Other Liabilities
112,360
Total
114,973
Note 7: Cash and Cash Equivalents
March 31, 2014
Amount in INR
Cash and cash equivalents as defined in AS-3
Balance in Current account
13,648,951
Total
13,648,951
Note 8: Short Term Loans and Advances
March 31, 2014
Amount in INR
Advance Taxes and tax deducted at source net of provision of tax
12,960
Advance to Related Parties (Refer Note 12)
423,776
Total
436,736
Note 9: Other Current Assets
March 31, 2014
Amount in INR
-
Interest Accrued but not due
19,899
- on Fixed Deposits
19,899
Total
IFMR Investment Managers Private Limited
Page 21
Note 10: Other Income
Period ended
March 31, 2014
Amount in INR
Interest on Fixed Deposits
109,055
Total
109,055
Note 11: Other Expenses
Period ended
March 31, 2014
Amount in INR
3,008
29,434
177,687
Printing and Stationery
Legal and Professional Charges
Registration & Filing charges
Auditors' Remuneration
For Statutory Audit (inclusive of Service Tax)
Total
112,360
322,489
Disclosures under Accounting Standards
Note 12: Related party disclosures
Information relating to related party transaction for the period ended March 31, 2014 (as identified by
management and relied upon by Auditors)
a) Parties where control exists:
Controlling entity
: IFMR Trust - Represented by IFMR Trusteeship Services Private Limited
b) Fellow Subsidiaries with whom the Company had transactions during the period:
IFMR Mezzanine Finance Private Limited
c) Associate Entities with whom the Company had transactions during the period:
IFMR Investment Adviser Services Private Limited
IFMR Finance for Freedom Social Venture Fund
Transactions with related parties during the period:
Related Party
Transaction
IFMR Trust
IFMR Investment Adviser Services Private Limited
IFMR Mezzanine Finance Private Limited
IFMR Finance for Freedom social venture fund
Equity Shares Allotted
Reimbursement of expenses
Reimbursement of expenses
Preference Shares Allotted
Reimbursement of expenses
Page 22
Period ended
March 31, 2014
Amount in INR
100,000
177,462
423,776
13,500,000
423,776
Annual Report 2013-14
Outstanding balances with related parties as on balance sheet date:
Related Party
Transaction
IFMR Trust
IFMR Investment Adviser Services Private Limited
IFMR Finance for Freedom social venture fund
Advances payable
Advances payable
Advances Receivable
March 31, 2014
Amount in INR
177,462
423,776
423,776
Note 13: Earnings per share – Basic and Diluted:
Period ended
March 31, 2014
Amount in INR
Loss for the period attributable to equity shareholders
(213,434)
Weighted average shares outstanding during the period
1,000
Basic Earnings per Share
(213.43)
Diluted Earnings per Share
(213.43)
Note 14:
The Company has entered into an agreement with SBICAP Trustee Company Limited, Trustee of IFMR
Finance for Freedom Social Venture Fund to act as an Investment Manager for proposed fund and upon
registration of the said fund with SEBI, the company will contribute 2.5% of the fund size or Rs. 5 crores
whichever is less.
Note 15:
The company has entered into an agreement with IFMR Investment Adviser Services Private Limited for
providing investment adviser services for the proposed IFMR Finance for Freedom Social Venture Fund.
The agreement shall be operational subsequent to the registration of the said fund and launch of the same.
Note 16:
Preliminary expenses amounting to Rs. 202,240 have been expensed completely during the period ended
March 31, 2014.
Note 17:
The Company was incorporated on February 17, 2014 and the first accounts have been prepared for the
period February 17, 2014 to March 31, 2014. Consequently, there are no comparative figures to be disclosed.
For and on behalf of the Board
Place: Chennai
Date: May 2, 2014
IFMR Investment Managers Private Limited
Puneet Gupta
Chairman
Page 23
Vijayaraghavan V
Director
Board of Directors
Puneet Gupta is a Founder member of IFMR Trust and represents the Trust as a
promoter director on the board of several group companies. Puneet also serves on
the board of IIT Madras’ Rural Technology Business Incubator. Puneet was also
involved in setting up IFMR Mezzanine Finance, a company that makes
investments in the form of medium to long term capital to MFIs to enable them to
grow.
Puneet Gupta
Chairperson
He began his formal career with ICICI Bank where he worked for a period of 7
years in various roles including coordinating the work of the micro finance practice
at ICICI Bank. His responsibilities at ICICI Bank included identification and
development of new channels and products for reaching out micro financial and
rural financial services. He has worked extensively towards the creation of
facilitative infrastructure for the delivery of micro financial services. In addition he
has worked with microfinance related equity funds to help them raise capital.
Puneet has significant experience of working closely with NGO, academicians,
State Governments and donor agencies. Puneet also has experience in running and
managing his family business for a period of 4 years.
He is a commerce graduate with a Master’s degree in Rural Management from
Institute of Rural Management Anand.
David Ira Wallack is a Director of IFMR Investment Managers Private Limited and
a founding trustee of IFMR Trust. He currently leads innovation and leadership
development across the IFMR Holdings group. David previously led IFMR Trust's
qualitative research and design effort supporting the design of the KGFS model
and IFMR Trust's broader work on livelihood enhancement. Before coming to
India, David was a political campaign consultant in the United States serving
progressive advocacy organisations and Democratic candidates at the statewide and
federal levels. He completed graduate work in Demography and Population Studies
at Georgetown University and his MBA at Stanford University.
Page 24
David Ira Wallack
Director
Annual Report 2013-14
Anand Sahasranaman
Director
Anand Sahasranaman is a Director of IFMR Investment Managers Private Limited
with over 10 years’ experience in financial markets. He currently heads the IFMR
Finance Foundation which is a policy research institution focused on issues of
financial systems design. In 2008, he was a founding member of IFMR Capital and
worked on structuring the first microfinance securitisation transaction in India.
Between 2003 and 2007 he worked in the fixed income desks at Broadstreet Group
and Pali Capital, New York based investment banks, on multiple structured credit
transactions such as CLOs and synthetic CDSs. He holds a MBA in Finance from
Carnegie Mellon University and a bachelor’s degree in engineering from Bharathiar
University.
Vijayaraghavan is a Director of IFMR Investment Managers Private Limited. He
has been with IFMR Trust since 2011, and heads its Corporate Centre, overseeing
the Trust’s investments and overall compliance. Apart from this, he has also been
on the Board of Pudhuaaru Financial Services Pvt Ltd, which ensures financial
inclusion through the KGFS model, and continues to serve on the Board of IFMR
Mezannine Finance Pvt. Ltd.
Previously, he was the Chief Financial Officer at GMAC Financial Services India,
which is a part of the General Motors group, and also served on its Board. His role
as Chief Financial Officer encompassed all aspects of Indian and US GAAP
reporting, treasury, internal controls and audit. Prior to GMAC, he had a brief stint
with GE Capital Transportation Financial Services in 1999.
Vijayaraghavan is a qualified Cost Accountant and has close to 15 years of
experience, primarily in the financial services industry.
IFMR Investment Managers Private Limited
Page 25
Vijayaraghavan V
Director
Notes
Notes
Notes
CORPORATE AND REGISTERED OFFICE
10th Floor Phase I, IITM Research Park, Kanagam Village, Taramani, Chennai – 600113, India
Tel: +91 44 66687000; Fax: +91 44 66687010
Email: contact.investments@ifmr.co.in, Website: http://ims.ifmr.co.in
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