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Published by Repro Graphics, 2017-07-06 06:39:36

IFIN Annual Report 2016-17

(15) OTHER CURRENT AND NON-CURRENT ASSETS
Particulars
Income Accrued on Investments
Income Accrued on Lease, Loans and Advances
Receivable on Sale/Redemption of Securities
Unamortised Borrowing Cost
Total
(16) CONTINGENT LIABILITY
(` in million)
As at March 31, 2016
As at March 31, 2017
Current
Non- Current
Current
35.51
-
605.67
2,382.79
860.00
1,671.46
939.73
-
105.13
254.03
-
86.52
3,612.06
860.00
2,468.78
(a)
(b)
Guarantees
Particulars
Guarantees issued on behalf of third parties
Taxes and other demands
As at March 31, 2017
403.07
Non- Current
835.30 801.47
-
- 1,636.77
(` in million)
As at March 31, 2016
584.87
(i) Income Tax: Demand raised by Income Tax authorities against the Company not acknowledged as debts and not provided for, the Company is in appeal at various authorities `124.09 mn (As at March 31, 2016 : `9.95 mn)
(ii)Sales Tax: Demand raised by Sales Tax authorities against the Company `11.71 mn for Lease tax dues (As at March 31, 2016 : `11.71 mn), against which the Company has preferred appeals with the Appellate Tribunal, High Court
(iii) Service Tax: Demand raised by Service Tax authorities against the Company `9.90 mn for CENVAT credit availed (As at March 31, 2016 : `0.67 mn), against which the Company has preferred appeals with the Custom Excise & Service Tax Appellate Tribunal
(iv) Others: Demand raised by Superintendent of Stamps, Maharashtra against the Company not acknowledged as debts and not provided for towards penalty for delay in payment of stamp duty, the Company has challenged the notice issued, with the authorities `97.60 mn (As at March 31, 2016 : `97.60 mn)
The Company does not expect any outflow of economic resources in respect of the above
IL&FS Financial Services Limited Annual Report 2017 1 0 1


(17) COMMITMENTS
(a) Capital Commitments
Estimated amount of contracts remaining to be executed but not provided in respect of Assets `62.62 mn (As at March 31, 2016 : `0.47 mn)
(b) Financial Commitments
UndisbursedCommitmentinrespectofLoansis`6.15mn (AsatMarch31,2016:`96.70mn) and in respect of Investments is `1,224.02 mn (As at March 31, 2016 : `1,311.15 mn)
(c) Operating Lease Commitments
The Company has entered into Operating Lease arrangement in respect of premises. The minimum future payments during non-cancellable years under the foregoing arrangement in aggregate for each of the following years are as below:
Particulars
Less than one year One to five years Total
As at March 31, 2017
68.96
- 68.96
(` in million)
As at March 31, 2016
24.66
4.73 29.39
Footnote - the Operating Lease expenses incurred during the year of `80.78 mn (Previous Year `16.70 mn) is included in Rent Expenses
(18) DERIVATIVE INSTRUMENTS
(a) Financial Risk Management Objectives
Treasury function of the Company provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the company through financial risk reports which analyses exposures by degree and magnitude of risks. These risks include currency risk and interest rate risk
The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the RBI and Board approved policies, which provide written principles on foreign exchange risk, interest rate risk, and the use of derivatives instruments. Compliance with the policies and exposure limits are reviewed periodically
The corporate treasury function reports periodically to the Committee of Directors and to an internally delegated committee that monitors risks and policies implemented to mitigate risk exposures
1 0 2 IL&FS Financial Services Limited Annual Report 2017


(b)
Following types of hedging instruments are entered into by the Company (i) Interest risk management:
The Company is exposed to interest rate risk as it carries both fixed and floating rates assets and liabilities. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings and by the use of derivatives. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most appropriate strategies are applied
(ii) Foreign currency risk management :
The Company is also exposed to foreign currency risk and floating interest rate risk as it undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. These exposures are managed within approved policy parameters utilizing forward foreign exchange contracts, currency swaps and coupon swaps by ensuring application of appropriate strategies
In accordance with the change in accounting policy and transitional provision of the Guidance Note, following is the impact on the financial statement:
(c)
Particulars
Cash flow Hedge Reserve
Current Portion of Long- term Borrowing
Other Current Liabilities
Amount before adoption of Guidance Note
-
23,983.90
2,736.99
Impact of Guidance Note
(4.69)
(9.00)
13.69
(` in million)
Amount after adoption of Guidance Note
(4.69)
23,974.90
2,750.68
IL&FS Financial Services Limited Annual Report 2017 1 0 3


(d) The carrying amounts of foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:
Exchange Rate
Amount in Foreign Currency (USD mn)
Principal
64.845
5.64
Interest
64.845
0.005
Principal
5.64
Interest
0.005
NIL
Liabilities
Foreign Currency Loans
Total Payables (A)
Hedged by derivative (B)
Unhedged Payables (C=A-B)
Current Year
(` in million)
Amount (` mn)
366.01 0.35 366.36
The Company has adopted hedge accounting principles with effect from April 1, 2016, hence previous year figures are not applicable
(e) Following are the details of outstanding interest rate derivatives and currency derivatives:
Particulars
Cash Flow Hedge
Currency Rate Swap
No. of Contracts
Notional Principal (` in mn)
Fair Value (` in mn)
Others
Interest Rate Swap
No. of Contracts
Notional Principal (` in mn) Fair Value (` in mn)
Year ended March 31, 2017
Year ended March 31, 2016
11
375.00 700.00
(13.69) (4.04)
-1 - 250.00 - 1.62
1 0 4
IL&FS Financial Services Limited Annual Report 2017


(f) Details of Equity/Index Option outstanding as at March 31, 2017 are as below: (` in million)
Particulars
Index Options Nifty
No. of Contracts No. of Units Bank Nifty
No. of Contracts No. of Units
Total Premium carried forward at the year end including provision made
(19) REVENUE FROM OPERATIONS
Year ended March 31, 2016
Short Position
1,332 99,900
1,666 49,980 16.37
Year ended March 31, 2017
Long Position
-
-
1,666
49,980
Long Position
Short Position
-
2,666
-
199,950
-
-
12.74
(a) The Company is engaged in the Financial Services Business and its revenue from operations is as per the table below:
Particulars
Fund Based
Interest Income on Loans* Income from Investments Lease Income
Interest on Deposits
Fee Based
Debt Structuring & Distribution Fees Consultancy and Advisory Fees Total
Year ended March 31, 2017
18,677.42
2,404.51
56.59
427.77
1,547.56
300.18 23,414.03
(` in million)
Year ended March 31, 2016
14,628.17
2,180.83
0.24
514.67
1,366.45
333.76 19,024.12
*Footnote - Interest income is net-off provision made for interest sacrifice and reversal of interest income towards provision for funded interest term loan on restructured advances (Refer note 5 (a))
IL&FS Financial Services Limited Annual Report 2017 1 0 5


(b) Break up of Income from Investments are as below:
Particulars
Interest/Discount/Premium Dividend and Pass Through Income Net Gain on Sale of Investment
Net Profit on Derivative Contracts
Total (20) FINANCE COSTS
Particulars
Interest Expenses on Borrowings
Other Finance Costs
Total (21) EXPENSES
(a) Employees Bene t Expenses comprises of:
Particulars
Salaries and Allowances
Contribution to Provident and Other Fund
Staff Training and Welfare Expenses
Deputation Cost
Total 798.08
(` in million)
Year ended March 31, 2016
Current
223.05 13.63 150.48 434.29 821.45 2,180.83
(` in million)
Year ended March 31, 2016
12,123.66
62.01 12,185.67
(` in million)
Year ended March 31, 2016
596.67
54.55 29.41 39.12
719.75
Year ended March 31, 2017
Non- Current
1,037.15
319.98
2.25
-
1,359.38
Non- Current
Current
619.96
343.10
25.45
Year ended March 31, 2017
14,426.87
144.15 14,571.02
Year ended March 31, 2017
663.89
44.62 24.44 65.13
1 0 6
IL&FS Financial Services Limited Annual Report 2017
336.08
290.89
539.92
-
249.11
1,246.93
1,157.58
2,404.51


(b)
Other Operating & Administrative Expenses
(i) Break up of Other Operating Expenses is as below:
Particulars
Rent
Electricity Charges
Rates and Taxes
Repairs and Maintenance
Travelling and Conveyance
Communication Expenses
Legal and Professional Charges
Insurance Expenses
Brand Subscription Charges
Service Charges
Corporate Social Responsibility Expense
(` in million)
Year ended March 31, 2016
96.44
3.94
67.94
31.42
47.55
9.72
61.44
1.07
192.12
214.13
69.35
133.32 928.44
Year ended March 31, 2017
102.11
3.37
109.01
33.43
39.41
10.09
129.34
3.55
192.16
257.76
66.19
154.59 Total 1,101.01
Miscellaneous Expenses
(ii) Rent expense is net of recovery made of `1.63 mn (Year ended March 31, 2016: `6.20 mn) from Subsidiary Companies
(iii) In terms of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been formed by the Company. The areas for CSR activities approved by the Committee are (i) skills and livelihood (ii) education and (iii) discretionary items
The disclosure of the CSR expenditure incurred during the year, is as under:
(a) (b)
Sr. No. (i) (ii)
Gross amount required to be spent by the Company for FY 2016-17 is ` 67.50 mn Amount spent during the year on:
(` in million) Total
Nil 66.19
Particulars
In Cash
Yet to be paid in cash
Construction/acquisition of any asset
Nil
Nil
On purposes other than (i) above*
66.19
Nil
* The Company has paid the amount as donation to a trust carrying out the CSR activities
IL&FS Financial Services Limited Annual Report 2017 1 0 7


(iv) Miscellaneous Expenses includes: (a) Payment to Director’s
Particulars
Sitting Fees Commission
(b) Auditor’s Remuneration as below:
Particulars
As Auditor Taxation Matters Other Matters
Year ended March 31, 2017
2.20
8.07
Year ended March 31, 2017
21.20
3.69
8.46*
(` in million)
Year ended March 31, 2016
2.62
8.75
(` in million)
Year ended March 31, 2016
18.85
-
2.82
21.67
Total 33.35
*Service Tax of ` 2.03 mn (Previous Year : ` 1.53 mn) has been accounted and Input credit taken under Service Tax Rules. The reversal of 50% input credit has been included under Rates & Taxes
*Includes ` 3.05 mn for which services provided during the current year but pertaining to year ended March 31, 2016
1 0 8
IL&FS Financial Services Limited Annual Report 2017


(22) OTHER PROVISION AND WRITE OFFS
Particulars
Write Offs of
- Loans
Written off during the year
Provision for Non-Performing Assets written back against write off of Loans
Recovery of Loans Written off earlier
- Bad and Doubtful Trade Receivables
Written off during the year
Provision for Bad and Doubtful Trade Receivables written back
Provisions for
Standard Assets
Standard Restructured Assets
Non-Performing Assets
Bad and Doubtful Trade Receivables
Mark to Market on Derivatives
Provision for Diminution in :
- Long-term Investments
- Current Investments
Year ended March 31, 2017
(` in million)
Year ended March 31, 2016
1,664.62
-
(25.20)
164.03
(141.03)
55.00
(13.82)
405.81
11.71
1,639.42
23.00
458.70
0.96
530.72
192.46
2,845.26
315.94
(364.70)
(75.00)
7.90
-
120.00
(5.77)
589.71
39.61
(123.76)
7.90
743.55
(7.17)
240.11
85.03
945.66
IL&FS Financial Services Limited Annual Report 2017 1 0 9


(23) EARNINGS PER SHARE (EPS)
In accordance with the Accounting Standard 20 on ‘Earning per Share’, the Basic Earnings per Share and Diluted Earnings per Share have been computed by dividing the Profit after Tax by the number of equity shares for the respective years as under:
Particulars
Profit for the year (` in mn)
Dividend on NCRCPS (including dividend
distribution tax thereon)
Profit attributable for Equity Shareholders
- Weighted Average number of Equity Shares in calculating Basic and Diluted EPS
Face Value (` per Share)
Basic and Diluted Earnings (` per Share)
(24) FOREIGN CURRENCY TRANSACTIONS
Year ended March 31, 2017
2,087.81
(279.97)
1,807.84
265,667,555
10.00 6.80
(` in million)
Year ended March 31, 2016
1,927.79
(1.48)
1,926.31
265,667,555
10.00 7.25
(` in million)
Year ended March 31, 2016
-
4.00
3.24
7.24
Foreign currency transactions during the year are as follows:
Particulars
I. Earnings in Foreign Currency
Income
II. Expenses in Foreign Currency
Foreign Travel Others
Total
Year ended March 31, 2017
5.39
3.91
13.38
17.29
1 1 0
IL&FS Financial Services Limited Annual Report 2017


25) RELATED PARTY TRANSACTIONS
(a) As per the Accounting Standard - 18 on ‘Related Party Disclosures’, the Related Parties as at March 31, 2017 are as follows:
Holding Company
Infrastructure Leasing & Financial Services Ltd
Subsidiary Companies
IL&FS Global Financial Services Pte Ltd
IL&FS Global Financial Services (UK) Ltd
IL&FS Global Financial Services (ME) Ltd
IL&FS Global Financial Services (HK) Ltd
IL&FS Capital Advisors Ltd IL&FS AMC Trustee Ltd (up to December 31,2016)
IL&FS Infra Asset Management Ltd (up to December 31,2016) IL&FS Broking Services Pvt Ltd
Enterprises over which IFIN has control
IFIN Realty Trust
Investment Square Trust
IL&FS IIDC Fund
IL&FS Infrastructure Equity Fund-I IL&FS Orix Trust
IL&FS Investment Trust - IV
Affiliates Companies (Joint Venture)
Syniverse Technologies (India) Pvt Ltd
Fellow Subsidiaries*
Apptex Marketing Services & Solutions Ltd
Avash Logistic Park Pvt Ltd Baleshwar Kharagpur Expressway Ltd
Barwa Adda Expressway Ltd Bhopal E Governance Ltd Chenani Nashri Tunnelway Ltd Chhotagovindpur & Bagbera Drinking Water Supply Project Ltd
Dakshin Dilli Swachh Initiatives Ltd
East Delhi Waste Processing Co Pvt Ltd
2017 2016 -
 - 






 2017 2016 IL&FS Maritime Infrastructure Co Ltd 
2017 2016 Fellow Subsidiaries*
  Etesian Urja Limited (formerly
Bhojpur Biomass Power
Company Limited)
2017 2016 Gujarat Integrated Maritime
  Complex Pvt Ltd
Hazaribagh Ranchi Expressway
  Ltd IIDC Ltd
  IL&FS Airport Ltd
IL&FS Cluster Development
  Initiative Ltd
IL&FS Education & Technology
  Services Ltd
-  IL&FS Energy Development Co
Ltd
-  IL&FS Environmental
Infrastructure & Services Ltd
  IL&FS Investment Managers Ltd
IL&FS Investment Trust – I
IL&FS Paradip Refinery Water Ltd    IL&FS Portfolio Management 
 
  Services Ltd   IL&FS Rail Ltd
  IL&FS Renewable Energy Ltd


2017 2016 
IL&FS Trust Co Ltd
- IL&FS Urban Infrastructure







-

 
-









  -
 
   
2017 2016 
IL&FS Securities Services Ltd IL&FS Solar Power Ltd
IL&FS Tamil Nadu Power Co Ltd IL&FS Technologies Ltd
IL&FS Township & Urban Assets Ltd
IL&FS Transportation Networks Ltd
-
Managers Ltd IL&FS Water Ltd
  IL&FS Wind Energy Limited
  (formerly Mandvi LNG Terminal
-  Ltd)
 - IL&FS Wind Farms Ltd
IL&FS Wind Power Services Ltd
  IL&FS Wind Projects Development Ltd

IMICL Dighi Maritime Ltd
* As certified by the holding Company and with whom transactions done during the year
IL&FS Financial Services Limited Annual Report 2017
1 1 1


Fellow Subsidiaries*
ISSL Market Services Ltd
ISSL Settlement & Transaction
Services Ltd ISSLCPG BPO Pvt Ltd
ITNL Road Infrastructure Development Co Ltd ITNL International Pte Ltd
Jharkhand Road Projects Implementation Co Ltd Jogihali Wind Energy Pvt Ltd
Kanak Resources Management Ltd
Karyavattom Sports Facilities Ltd
2017 2016
   
 
 
 
 
 
  - 
Fellow Subsidiaries*
Ratedi Wind Power Ltd Rohtas Bio Energy Ltd Sabarmati Capital One Ltd Sabarmati Capital Two Ltd Sealand Warehousing Pvt Ltd Sipla Wind Energy Ltd
Skill Training Assessment Management Partners Ltd TADAS Wind Energy Pvt Ltd
Tierra Enviro Ltd
Unique Waste Processing Co Ltd Wind Urja India Pvt Ltd
Key Management Personnel
Mr Ravi Parthasarathy, Chairman Mr Hari Sankaran, Director
Mr Arun K Saha, Director
Mr Vibhav Kapoor, Director
Mr Ramesh Bawa, Managing Director & CEO
Mr Milind Patel, Joint Managing Director
Mr Rajesh Kotian, (Deputy Managing Director upto December 31, 2016)
Mr Deepak Pareek, Chief Financial Officer
Mrs Neelam Desai, Company Secretary
Relatives of Key Management Personnel (KMP)^
Ms Rhea Parthasarathy
Mr Abhishek Bawa
2017 2016
 
 
 
 
-   
- 
- 
 
 
 -
2017 2016
 
 
 
 
 
 
 
 
 
2017 2016
 -
 -
Kaze Energy Ltd (Formerly  Vaspeth Wind Energy Ltd)
Khandke Wind Energy Pvt Ltd
Khed Sinnar Expressway Ltd
Kiratpur Ner Chowk Expressway Ltd
Lalpur Wind Energy Pvt Ltd
LIVIA India Ltd
Mahidad Wind Energy Pvt Ltd
Moradabad Bareilly Expressway Ltd
Mota Layja Gas Power Co Ltd
Nana Layja Power Co Ltd
Patiala Bio Power Company Ltd Porto Novo Maritime Ltd
Pune Solapur Road Development Co Ltd
Ramagiri Renewable Energy Limited (formerly IL&FS Wind Farms Ltd)
Rapid MetroRail Gurgaon Ltd
Rapid MetroRail Gurgaon South Ltd
RDF Power Projects Ltd
- - 
  - 
 
 
 
 
 
   -
   
-   
 
 
* As certified by the holding Company and with whom transactions done during the year/previous year
^ As certified by the Key Management Personnel and with whom transactions done during the year/previous year The company does not have significant influence over IL&FS Engineering & Construction Company Ltd and accordingly is not considered as an associate of the company
1 1 2 IL&FS Financial Services Limited Annual Report 2017


(b) The nature and volume of the transactions during the year ended March 31, 2017 with the above related parties were as follows:
NatureofTransactions*
Income
Holding Company
Subsidi-aries Felow Enterprises Subsidiaries over which IFINhas control
- 7,949.28 -
(` in million)
Joint KMPsand Yearended Venture Relativesof March31, KMPs 2017
- - 7,949.28
90.53 - 330.29
- - 1,408.16
- - 445.00
- 5.56 546.38
- 194.54 194.54
- 151.60 151.60
- - 15,588.71
- - 5,174.28
- - 1,336.61
- - 10,502.48
- - 1,052.96
- - 1,172.94
- - 19.46
- - 69.64
- - 0.97
- - 44.35
- - 232.25
- - 32,040.70
- - 45,320.49
- - 71,176.54
- - 82,228.70
- - 664.17
- - 1,328.34
Interest -
Investment Income
Fee and Other Income
Expenditure
Interest and Finance Charges
Other Operating & Administrative Expenses
Employee Benefit Expenses
KMP Remuneration
Balances as at end of the Year
Assets
Non-Current Assets
Long-term Loans & Advances
Current Assets
Current Maturity of Long-term Loans & Advances
Trade Receivables
Short-term Loans & Advances
Other Current Assets
Liabilities
Current Liabilities
Short-term Borrowings
Trade Payables
Other Current Liabilities
Transactions during the Year
Brokerage Paid
Subscription to Shares/Units
Sale/Redemption of Shares/Units
Long Term/ Short Term Loans Given (Assets)
Long Term/ Short Term Loans repaid (Assets)
Long Term/ Short Term Borrowing Taken (Liabilities)
Repayment of Long Term / Short term Borrowing (Liabilities)
Interim Equity Dividend Paid
Equity Dividend Paid
- 10.61
0.55 5.39
1.48 0.99
298.53 (5.21)
- -
- -
- 0.50
- -
- 3.66
1.23 0.13
0.26 -
- 115.00
9.46 -
- 0.45
- 0.97
- -
- -
- -
- -
- -
- -
664.17 -
1,328.34 -
227.87
1,402.22
442.53
247.49
-
-
15,588.21
5,174.28
1,332.95
10,501.101
1,052.70
1,057.94
10.00
69.19
-
-
181.11
32,040.70
45,320.49
71,176.54
82,228.70
-
-
1.28
-
-
-
-
-
-
-
-
0.02
-
-
-
-
-
44.35
51.14
-
-
-
-
-
-
1 Includes ` 14.95 mn paid to clearing member and stock broker on account of margin money required to be paid as per Exchange regulations
*Transactions during the period excludes reimbursement of expenses with related parties
IL&FS Financial Services Limited Annual Report 2017 1 1 3


The nature and volume of the transactions during the year ended March 31, 2016 with the above related parties were as follows:
NatureofTransactions*
Income
Holding Company
Subsidiaries Fellow Enterprises Subsidi- over which aries IFINhas control
- 3,153.93 -
(` in million)
Joint KMPsand Yearended Venture Relatives of March 31, KMPs 2016
- - 3,153.93
61.35 - 295.96
- - 1,456.64
- - 714.58
- 4.75 494.38
- 151.60 151.60
- - 18,428.42
- - 7,104.03
- - 1,042.20
- 2.22 19,387.11
- - 502.16
- - 100.00
- - 1,854.42
- - 10,270.68
- - 19.85
- - 187.27
- - 300.00
- - 2.71
- - 1,039.59
- - 22.34
- - 61,257.75
- - 29,214.49
- - 99,010.72
- - 91,686.04
- - 1,328.34
Interest -
Investment Income
Fee and Other Income
Expenditure
Interest and Finance Charges
Other Operating Expenses
KMP Remuneration
Balances as at end of the Year
Assets
Non-Current Assets
Long-term Loans & Advances
Current Assets
Current Maturity of Long-term Loans & Advances
Trade Receivables
Short-term Loans & Advances
Other Current Assets
Liabilities
Non-Current Liabilities
Long-term Borrowings
Current Liabilities
Current Maturity of Long Term Borrowings
Short-term Borrowings
Trade Payables
Other Current Liabilities
Off Balance Sheet Items
Guarantees Given
Transactions during the Year
Brokerage Paid
Subscription to Shares/Units
Redemption of Shares/Units
Long Term/ Short Term Loans Given (Assets)
Long Term/ Short Term Loans repaid (Assets)
Long Term/ Short Term Borrowing Taken (Liabilities)
Repayment of Long Term / Short term Borrowing (Liabilities)
Dividend Paid
- -
0.03 5.35
38.63 0.38
297.30 (9.55)
- -
- 0.50
- -
- 3.10
25.04 7.12
- -
- -
- -
- -
4.86 0.35
- -
- -
- 2.71
- 910.00
- -
- -
- -
30,783.70 -
30,783.70 -
1,328.34 -
232.54
1,451.26
675.57
201.88
-
18,427.92
7,104.03
1,039.10
2.07
-
-
-
-
-
-
-
19,352.721 0.01
502.16 -
100.00 -
1,854.42 -
10,270.68 -
14.64 -
187.27 -
300.00 -
- -
129.59 -
8.60 13.74
61,257.75 -
29,214.49 -
68,227.02 -
60,902.34 -
--
1 Includes ` 364.45 mn paid to clearing member and stock broker on account of margin money required to be paid as per Exchange regulations
*Transactions during the period excludes reimbursement of expenses with related parties
1 1 4
IL&FS Financial Services Limited Annual Report 2017


(c) Statement of significant transaction/balances during the year ended March 31, 2017
are as below:
Nature of Transactions
INCOME
Interest
Rapid Metrorail Gurgaon South Ltd
Jharkhand Road Projects Implementation Co Ltd
Sabarmati Capital Two Ltd
Rapid Metrorail Gurgaon Ltd
Gujarat Integrated Maritime Complex Pvt Ltd
Livia India Ltd
Unique Waste Processing Co Ltd
Investment Income
IL&FS Transportation Networks Ltd
IL&FS Investment Managers Ltd
IFIN Realty Trust
Fee & Other Income
IL&FS Transportation Networks Ltd
IL&FS Tamilnadu Power co Ltd
Moradabad Bareilly Expressway Ltd
EXPENDITURE
Interest and Finance Charges
IL&FS Securities Services Ltd
Other Operating and Administrative Expenses
IL&FS Securities Services Ltd
IL&FS Portfolio Management Services Ltd
Livia India Ltd
Mr Ramesh Bawa
Brokerage Paid
IL&FS Broking Services Pvt Ltd
Employee Benefit Expenses
Mr Ramesh Bawa
Mr Milind Patel
Mr Rajesh Kotian
Mr Deepak Pareek
Mrs Neelam Desai
Ms Rhea Parthasarathy (Relative of KMP)
Mr Abhishek Bawa (Relative of KMP)
(` in million)
Subsidiaries Fellow
Subsidiaries over which
KMPs and Relatives of KMPs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5.56
-
80.86
49.97
40.91
13.56
7.50
0.80
0.94
- 579.96
- 482.57
- 442.23
- 440.54
- 419.49
- 419.11
- 401.63
- 213.53
- 10.58
- -
- 479.68
- 293.34
- 172.80
- 314.88
- 117.24
- 71.87
- 59.74
- -
0.97 -
- -
- -
- -
- -
- -
- -
- -
IFIN has control
-
-
-
-
-
-
-
-
-
3.80
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Enterprises
IL&FS Financial Services Limited Annual Report 2017
1 1 5


Nature of Transactions
Long Term/ Short Term Loans Given (Assets)
IL&FS Cluster Development Initiative Ltd
IL&FS Airports Ltd
Long Term/ Short Term Loans repaid (Assets)
IL&FS Cluster Development Initiative Ltd
Gujarat Integrated Maritime Complex Pvt Ltd
Subscription to Shares/Units
IL&FS IIDC Fund
IL&FS Infrastructure Equity Fund-1 (P Units)
Sale/Redemption of Shares/Units
IL&FS Investment Managers Ltd
IFIN Realty Trust
Long Term/ Short Term Borrowing Taken (Liabilities)
IL&FS Securities Services Ltd
LongTerm/ShorttermBorrowingrepaid (Liabilities)
IL&FS Securities Services Ltd
Balances as at end of the Year
ASSETS
Long-term Loans and Advances
Patiala Bio Power Company Ltd
Jharkhand Road Projects Implementation Co Ltd
Current Maturity Of Long-term Loans
IL&FS Wind Projects Development Ltd (Form IL&FS Hydro Energy Ltd)
IL&FS Solar Power Ltd
Jogihali Wind Energy Pvt Ltd
Short-term Loans and Advances
Livia India Ltd
Sabarmati Capital One Ltd
Tierra Enviro Ltd
Sabarmati Capital Two Ltd
Subsidiaries
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Fellow Subsidiaries
5,094.00
3,520.00
4,744.00
4,650.00
-
-
181.11
-
52,381.60
63,591.60
2,560.00
1,965.50
2,150.00
1,820.00
810.00
2,800.00
1,685.95
1,659.55
1,250.00
Enterprises over which IFIN has control
-
-
-
-
35.35
9.00
-
38.28
-
-
-
-
-
-
-
-
-
-
-
KMPs and Relatives of KMPs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 1 6
IL&FS Financial Services Limited Annual Report 2017


Nature of Transactions
Trade Receivables
IL&FS Tamilnadu Power co Ltd
IL&FS Transportation Networks Ltd
Moradabad Bareilly Expressway Ltd
Other Current Assets
Sabarmati Capital Two Ltd
LIABILITIES
Short-term Borrowings
IL&FS Maritime Infrastructure Co Ltd
Porto Novo Maritime Ltd
Sabarmati Capital Two Ltd
IL&FS Capital Advisors Ltd
IL&FS Broking Services Pvt Ltd
Trade Payables
IL&FS Securities Services Ltd
Current Liabilities
Apptex Marketing Services & Solutions Ltd
Subsidiaries Fellow Enterprises Subsidiaries over which IFIN has control
- 269.18 -
- 264.00 -
- 197.00 -
- 315.93 -
- 205.98 -
- 204.50 -
- 155.00 -
95.00 - -
20.00 - -
- 9.68 -
- 46.25 -
KMPs and Relatives of KMPs
-
-
-
-
-
-
-
-
-
-
-
IL&FS Financial Services Limited Annual Report 2017
1 1 7


Statement of significant transaction/balances during the year ended March 31, 2016
are as below
Nature of Transactions
INCOME
Interest
IL&FS Maritime Infrastructure Co. Ltd
IL&FS Renewable Energy Ltd
IL&FS Technologies Ltd
Jharkhand Road Projects Implementation Co Ltd
Investment Income
IL&FS Transportation Networks Ltd
IL&FS Securities Services Ltd
Fee & Other Income
IL&FS Energy Development Co Ltd
IL&FS Paradip Refinery Water Ltd
IL&FS Tamil Nadu Power Company Ltd
IL&FS Transportation Networks Ltd
EXPENDITURE
Interest and Finance Charges
IL&FS Securities Services Ltd
IL&FS Energy Development Co Ltd
IL&FS Maritime Infrastructure Co Ltd
IL&FSRenewableEnergy Ltd
ISSLSettlementandTransactions Ltd
Other Operating Expenses
IL&FS Securities Services Ltd
IL&FS Portfolio Management Ltd
Livia India Ltd
Mr Ramesh Bawa
Brokerage Paid
IL&FS Broking Services Pvt Ltd
Managerial Remuneration
Mr Ramesh Bawa
Mr Milind Patel
Mr Rajesh Kotian
Mr Deepak Pareek
Mrs Neelam Desai
(` in million)
Subsidiaries
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.71
-
-
-
-
-
Fellow Enterprises Subsidiaries over which IFIN has control
405.14 -
377.75 -
371.53
441.40 -
217.80 -
14.77 -
171.75 -
150.00 -
211.68 -
459.78 -
518.13 -
30.46 -
30.44 -
21.58 -
27.57 -
113.97 -
60.04 -
34.43 -
- -
- -
- -
- -
- -
- -
- -
KMPs and Relatives of KMPs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4.75
-
52.68
42.57
31.68
11.90
7.21
1 1 8
IL&FS Financial Services Limited Annual Report 2017


Nature of Transactions
Long Term/ Short Term Loans Given (Assets)
Gujarat Integrated Maritime Complex Pvt Ltd
IL&FSRenewableEnergy Ltd
IL&FS Wind Projects Development Ltd
Jharkhand Road Project Implementations Co Ltd
Mota Layja Gas Power Co Ltd
Rapid Metrorail Gurgaon South Ltd
Long Term/ Short Term Loans repaid (Assets)
IL&FS Cluster Development Initiative Ltd
IL&FS Renewable Energy Ltd
IL&FS Rail Ltd
IL&FS Technologies Ltd
IL&FS Employees Welfare Trust
Jharkhand Road Project Implementations Co Ltd
Rapid Metrorail Gurgaon South Ltd
Subscription to Shares/Units
IL &FS Transportation Networks Ltd
IL&FS Infrastructure Equity Fund-I
Tara India Fund IV Trust
IL&FS Infra Asset Management Ltd
Redemption of Investments
IFIN Realty Trust
IL&FS IIDC Fund
Long Term / Short Term Borrowing Taken (Liabilities)
IL&FS Securities Services Ltd
IL&FS Renewable Energy Ltd
LongTerm/ShorttermBorrowingrepaid (Liabilities)
IL&FS Securities Services Ltd IL&FS Renewable Energy Ltd
Subsidiaries Fellow Subsidiaries
- 3,230.00
- 5,010.00
- 3,240.00
- 3,335.00
- 3,400.00
- 6,450.00
- 1,700.00
- 7,626.00
- 2,050.00
- 1,775.52
- 1,738.75
- 2,829.50
- 2,762.50
- 95.99
- 30.00
- 3.60
910.00 -
Enterprises over which IFIN has control
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
KMPs and Relatives of KMPs
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- -
- - 13.74
- 8.60
- 41,509.00
- 11,557.44
- 34,570.10 - 11,557.44
-
-
-
- -
IL&FS Financial Services Limited Annual Report 2017
1 1 9


Nature of Transactions
Balances as at end of the year ASSETS
Long-term Loans and Advances IL&FS Solar Power Ltd
IL&FS Wind Projects Development Ltd Jharkhand Road Projects Implementation Co Ltd Mota Layja Gas Power Co Ltd
Rohtas Bio Energy Ltd
Current Maturity Of Long-term Loans
Gujarat Integrated Maritime Complex Pvt Ltd IL&FS Maritime Infrastructure Co Ltd
Rapid Metrorail Gurgaon South Ltd Short-term Loans and Advances
Livia India Ltd
Rapid Metrorail Gurgaon Ltd
Tierra Enviro Ltd UniqueWasteProcessingCo Ltd
Mr Ramesh C Bawa
Trade Receivables
IL&FS Energy Development Co Ltd IL&FS Transportation Networks Ltd Pune Solapur Road Development Co Ltd Other Current Assets
Livia India Ltd
Sabarmati Capital One Ltd
Sabarmati Capital Two Ltd
Tierra Enviro Ltd UniqueWasteProcessingCo Ltd
LIABILITIES
Long-term Borrowings
IL&FS Securities Services Ltd
Current Maturity of Long-term Borrowings IL&FS Securities Services Ltd
Short-term Borrowings
IL&FS Securities Services Ltd
Trade Payables
IL&FS Securities Services Ltd
Current Liabilities
IL&FS Securities Services Ltd
IL&FS Wind Projects Development Ltd
Off Balance Sheet Items
IL&FS Transportation Networks Ltd
Subsidiaries
- - - - -
- - -
- -
- -
- - -
- - - - -
-
-
-
-
- -
-
Fellow Subsidiaries
2,540.00 2,140.00 3,335.00 1,999.31 2,310.00
3,000.00 1,020.00 2,700.00
2,760.00 2,850.00 2,000.00 2,000.00
-
155.24 315.92 103.05
67.73 58.71 76.30 74.79 74.79
100.00 1,720.00 9,390.00
13.12
134.15 29.09
300.00
Enterprises over which IFIN has control
- - - - -
- - -
- - - - -
- - -
- - - - -
-
-
-
-
- -
-
KMPs and Relatives of KMPs
- - - - -
- - -
- - - -
2.22
- - -
- - - - -
-
-
-
-
- -
-
1 2 0
IL&FS Financial Services Limited Annual Report 2017


(26) JOINT VENTURE REPORTING
(a)
The Company has a joint control over the following entity and as per AS 27 - Financial reporting of interests in Joint Ventures is as follows:
Jointly Controlled Entity (Incorporated In India)
Syniverse Technologies (India) Pvt Ltd
Percentage of Ownership Interest
As at March 31, 2017
26.00%
As at March 31, 2016
26.00%
(b)
The aggregate amount of assets, liabilities, income and expenditure of the jointly controlled entity, based on audited financial statement of the entity is as follows:
Balance Sheet Items
Particulars As at March 31, 2017
Assets 84.63
Liabilities 11.13 Contingent Liabilities 1.68
Statement of Profit and Loss Items
Particulars Year ended March 31, 2017
Income 163.64 Expenses (including tax) 85.47
(` in million)
As at March 31, 2016
98.94
27.72 1.56
(` in million)
Year ended March 31, 2016
120.56 68.21
(27) Additional information as on March 31, 2017 as required in terms of paragraph 18 of Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 are annexed as Annexure II
(28) Additional Disclosures as required in terms of paragraph 70 of Master Direction - Non- Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 are annexed as Annexure I
IL&FS Financial Services Limited Annual Report 2017 1 2 1


1 2 2 IL&FS Financial Services Limited Annual Report 2017
(29) Information relating to Restructured Accounts in accordance with RBI Notification No. DNBS(PD).NO.272 /CGM(NSV) dated January 23, 2014
(a) For the year ended March 31, 2017
(` in Crores)
Sr. Type of Restructuring No. Asset Classification
Under CDR Mechanism
Others
Sub- Stand- Doubtful
1 Restructured Accounts as on April 01, 2016 NoofBorrowers
1 1 4.51 15.96 1.14 1.88
- - -
- - -
2 7 20.47 265.21 3.02 20.28
2 7 9.61 71.421 0.03 3.92
- - -
16 346.24 24.23
AmountOutstanding
Provision there on
2 Freshly Restructured during the year ended March 31, 2017
No of Borrowers Amount Outstanding Provision there on
- -
- -
- -
- - -
- - -
- - - 36.10 - 1.85
- - - - - -
- - -
- 36.10 1.85
Standard
Sub- Stand- ard
Doubtful
Loss
Total Standard
Loss
Total
3 Up gradations to restructured standard category
NoofBorrowers ---------- AmountOutstanding ---------- Provisionthereon ----------
4 Restructured standard advances which cease to attract higher provisioning and / or additional risk weight at March 31, 2017 and hence need not be shown as restructured standard advances at the April 1, 20172
NoofBorrowers AmountOutstanding Provision there on
(1) - - (4.51) - - (1.14) --
- (1) - (4.51) - (1.14)
(1) (33.97) (1.67)
- - (0.38) (0.96) - -
- (1) - (35.30) - (1.67)
5 Down gradations of restructured accounts during the year ended March 31, 2017
No of Borrowers Amount Outstanding Provision there on
- (1) 1 - (15.96) 15.96 - (1.88) 1.88
- - - - - -
(2) (32.25) (1.37)
(1) 3 (3.00) 35.26 (0.03) 0.03
- - - - - (1.37)
6 Write offs of restructured accounts during the year ended March 31, 2017
NoofBorrowers ---------- AmountOutstanding ---------- Provisionthereon ----------
7 Restructured Accounts as on March 31, 2017 No of Borrowers
- -1 - - 15.96 - - 1.88
-14110 - 15.96 235.08 6,.24 105.721 - 1.88 19.10 19.10 3.95
-15 - 347.03 - 23.05
Amount Outstanding Provision there on
1. For one of the clients in addition to amount of restructured facility, the Company has made investment in Optionally Convertible Debentures. Amount outstanding as on April 1, 2016 and March 31, 2017 is ` 7.52 crores
2. No of borrowers and amount outstanding under Sr no 4 of above table includes, recoveries made from existing restructured facilities
3. Provision includes provision made for interest sacrifice amounting to ` 13.63 crores and provision on standard restructured assets amounting to ` 11.30 crores in
accordance with notification no DNBS(PD).NO.272 /CGM(NSV) (Refer Note 5 (a))
ard


IL&FS Financial Services Limited Annual Report 2017 1 2 3
(b) For the year ended March 31, 2016
Sr. Type of Restructuring No. Asset Classification
Under CDR Mechanism
Others
Sub- Stand- Doubtful
1 Restructured Accounts as on April 01, 2015 NoofBorrowers
2 1 16.752 15.96 3.53 1.88
- - -
- - -
3 9 32.71 363.31 5.41 28.19
5 2 25.011 10.15 0.03 0.14
- - -
16 398.47 28.36
Amount Outstanding
Provision there on
2 Freshly Restructured during the year ended March 31, 2016
No of Borrowers Amount Outstanding Provision there on
- -
- - -
- - -
- 2
- - 0.22 - - -
- - -
2 37.99 3.23
Standard
Sub- Stand- ard
Doubtful
Loss
Total Standard
Loss
Total
- - 0.03 -
- 37.77 0.03 3.23
3 Up gradations to restructured standard category
NoofBorrowers ---------- AmountOutstanding ---------- Provisionthereon ----------
4 Restructured standard advances which cease to attract higher provisioning and / or additional risk weight at March 31, 2016 standard advances at the April 1, 20163
and hence need not be shown as restructured
NoofBorrowers Amount Outstanding Provision there on
- - - - - (0.05) - - - (0.05) - - - - -
(1) (81.32) (4.99)
- - -
- - -
- (1) - (81.32) - (4.99)
5 Down gradations of restructured accounts during the year ended March 31, 2016
No of Borrowers Amount Outstanding Provision there on
(1) - - 1 - (12.19) - - 12.19 - (2.42) - - 2.42 -
(3) (54.55) (6.15)
(3) (15.62)1 -
5 61.271 3.78
1 - 8.90 - - (2.37)
6 Write offs of restructured accounts during the year ended March 31, 2016
No of Borrowers Amount Outstanding Provision there on
- - - (1) (1) - - - (12.19) (12.19) - - - (2.42) (2.42)
- - -
- - -
- - -
(1) (1) (8.90) (8.90) - -
7 Restructured Accounts as on March 31, 2016 NoofBorrowers
1 1 - - 2 4.512 15.96 - - 20.47 1.14 1.88 - - 3.02
7 265.21 20.28
2 9.61 0.03
7 71.421 3.92
- 16 - 346.24 - 24.23
Amount Outstanding Provision there on
1. For one of the clients in addition to amount of restructured facility, the Company has made investment in Optionally April 1, 2015 and March 31, 2016 is ` 7.52 crores
Convertible
Debentures. Amount outstanding as on
2. For one of the clients in addition to amount of restructured facility, the Company has made investment in Optionally March 31, 2015 and March 31, 2016 is ` 118.64 crores
Convertible
Debentures. Amount outstanding as on
3. No of borrowers and amount outstanding under Sr no 4 of above table includes, recoveries made from existing restructured facilities
4. Provision includes provision made for interest sacrifice amounting to ` 14.58 crores and provision on standard restructured assets amounting to ` 12.67 crores in accordance
with notification no DNBS(PD).NO.272 /CGM(NSV) (Refer Note 5 (a))
ard
(` in Crores)


(30) SEGMENT REPORTING
The Company is in the business of providing financial services. As such, all activities undertaken by the Company are incidental to the main business segment. There is no separate reportable business segment as per Accounting Standard 17 “Segment reporting”
(31) Corresponding figures for the previous year have been reclassified and represented in accordance with the current period presentation wherever necessary
Mumbai, April 25, 2017
For and on behalf of the Board
Ravi Parthasarathy,
Chairman (DIN : 00002392)
Ramesh C Bawa,
Managing Director & CEO (DIN : 00040523)
Deepak Pareek,
Chief Financial Officer
Neelam Desai,
Company Secretary
1 2 4 IL&FS Financial Services Limited Annual Report 2017


Annexure I
Additional information as on March 31, 2017 as required in terms of paragraph 18 of Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016
Amount Outstanding
299,916
164,690
-
775,483
135,808
197,325
-
6,988
25,575
1,605,785
844,113
338,166
9
-
-
-
-
-
1,182,288
Particulars
(A) Liabilities Side
(1) Loans and Advances availed by the Company inclusive of interest accrued thereon but not paid
(` in lakhs) Amount Overdue
-
- - - - - - - - - -
52,919 10,315
- -
- - - -
-
63,234
(` in lakhs) Amount Outstanding
26,002 - - - 11,998 -
6,625 - -
(a)
(b) (c) (d) (e) (f) (g)
Debentures : Secured
: Unsecured (Refer Note 1)
(other than falling within the meaning of Public Deposits) Deferred Credits
Term Loans
Inter Corporate Loans and Borrowings Commercial Paper
Public Deposits
Other Loans (specify nature)
- Collateralised Borrowings
- Demand Loans
(B) Assets Side
(2) Break-up of Loans and Advances including Bills Receivables (other
than those included in (3) below) (Refer Note 2):
(a) Secured
(b) Unsecured
(3) Break up of Leased Assets and Stock on Hire and Hypothecation Loans counting towards EL/ HP activities
(i) Lease assets including lease rentals under Sundry Debtors :
(a) Financial Lease
(b) Operating Lease
(ii) Stock on Hire including hire charges under Sundry Debtors :
(a) Assets on Hire
(b) Repossessed Assets
(iii) Hypothecation Loans counting towards EL/ HP activities
(a) Loans where assets have been repossessed (b) Loans other than (a) above
Particulars
(4) Break up of Investments (Refer note 2)
(A) Current Investments :
(1) Quoted :
(i) Shares : (a) Equity
(b) Preference (ii) Debentures and Bonds
(iii) Units of Mutual Funds (iv) Government Securities (v) Others
(2) Unquoted :
(i) Shares : (a) Equity
(b) Preference (ii) Debentures and Bonds
IL&FS Financial Services Limited Annual Report 2017
1 2 5


Particulars
(iii) Units of Mutual Funds
(iv) Government Securties
(v) Others
(B) Long Term Investments :
(` in lakhs) Amount Outstanding - - -
36,319 - - 8,040 - -
65,017 23,495 59,252
9,100 -
52,264 20,569 193 41,300 360,174
(` in lakhs)
Total
-
(1)
(2)
Quoted :
(i) Shares : (a) Equity
(b) Preference (ii) Debentures and Bonds
(iii) Units of Mutual funds (iv) Government Securities (v) Others
Unquoted :
(i) Shares : (a) Equity
(b) Preference (ii) Debentures and Bonds
(iii) Units of Mutual Funds (iv) Government Securties (v) Others
-Units in Other Funds -Pass Through Certificates -Security Receipts -Investment in Property
Total
Particulars
Amount net of provisions
Secured
Unsecured
-
-
-
-
182,297
129,939
576,167
278,936
758,464
408,875
(5)
Borrower Group-wise Classification of all Leased Assets, Stock -on hire and Loans and Advances (Refer note 4)
(A) Related Parties
(a) Subsidiary Companies
(b) Companies in the Same Group
(c) Other Related Parties
(B) Other than Related Parties
Total
- 312,236 855,103 1,167,339
1 2 6
IL&FS Financial Services Limited Annual Report 2017


Market value/ Break up / fair value/ NAV
8,101
1,000
56,965
223,179
289,245
(6) Investor group-wise classification of all Investments (Current and Long term in shares and securities) (both quoted and unquoted) (Refer note 3 and note 4)
1. Related Parties
(a) Subsidiary Companies
(b) Companies in the Same Group (c) Other Related Parties
2. Other than Related Parties
Total
(7) Other information
(` in lakhs)
Book value (Net of Provisions)
5,496
1,000 58,077 222,583 287,156
(` in lakhs) Amount
624 40,366
503 28,560 8,578
(i) (ii) (iii)
Gross Non- performing Assets
(a) Related parties
(b) Other than related parties
Net Non- performing Assets (a) Related parties
(b) Other than related parties
Assets acquired in satisfaction of debt
IL&FS Financial Services Limited Annual Report 2017 1 2 7


Annexure II
Additional Disclosures in terms of paragraph 70 of Master Direction - Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016
1. 2.1
2.2
Summary of Significant Accounting Policies
As disclosed in Note 1 of the Financial Statements
Capital
Particulars (Refer note 4)
(i) CRAR (%)
(ii) CRAR - Tier I Capital (%)
(iii) CRAR - Tier II Capital (%)
(iv) Amount of subordinated debt raised as Tier-II capital (v) Amount raised by issue of Perpetual Debt Instruments
Investments
Particulars
(1) Value of Investments
(i) Gross Value of Investments
(a) In India
(b) Outside India
(ii) Provisions for Depreciation (Refer note 5)
(a) In India
(b) Outside India
(iii) Net Value of Investments
(a) In India
(b) Outside India
(2) Movement of provisions held towards depreciation on investments
(i) Opening balance
(ii) Add : Provisions made during the year
(iii) Less : Write-off / write-back of excess provisions during the year
(iv) Reclassification of Provision
(v) Closing balance
Derivatives Interest Rate Swap
Particulars
(i) The notional principal of swap agreements
(ii) Losses which would be incurred if counterparties failed to fulfill
their obligations under the agreements
(iii) Collateral required by the NBFC upon entering into swaps
(iv) Concentration of credit risk arising from the swaps (Refer note 6) (v) The fair value of the swap book
Exchange Traded Interest Rate (IR) Derivatives
FY 2017
13.15 7.93 1,000.00 Nil
FY 2017
3,601.74 3,570.05 31.69 312.94 312.94 - 3,288.80 3,257.11 31.69
240.62 72.32
(` in crores)
FY 2016
12.74 7.73 900.00 Nil
(` in crores)
FY 2016
3,979.51 3,947.82 31.69 240.62 240.62 - 3,738.89 3,707.20 31.69
208.10 32.52
--
2.3 2.3.1
2.3.2
- 312.94
FY 2017
-
-
NIL NIL -
- 240.62
(` in crores)
FY 2016
25.00 0.12 NIL
NIL 0.12
The Company has not undertaken any transaction in Exchange Traded Derivatives in current year or previous year
1 2 8
IL&FS Financial Services Limited Annual Report 2017


2.3.3
Disclosures on Risk Exposure in Derivatives
Qualitative Disclosure
(a) The Company undertakes transactions in interest rate swaps, cross currency swaps, principal only swaps, coupon only swaps and forward contracts for hedging the interest rate and/or exchange rate risks on the balance sheet. These include mainly the hedging of interest rate on fixed rate rupee denominated liabilities and currency and interest rate risk on the foreign currency borrowings
(b) The Company’s derivative transactions are governed by ‘Investment Policy’ and ‘Risk Management Framework’ as approved by Board of Directors of the Company. The risk limits are set up and reviewed periodically and the actual exposures are monitored against the limits allocated to the various counterparties
(c) The derivative transactions are originated by the Treasury department, which ensures compliance with the Company’s policy and the Regulatory guidelines. The settlement, accounting and risk reporting of derivatives transactions are handled by separate team in Finance & Accounts and Risk Monitoring Function of the Company
(d) The Accounting policy of the Company in respect of Derivative Transactions is mentioned in Note no 1(h) of the Financial Statements
Quantitative Disclosures
(` in crores)
S.N. Particular Currency
Derivatives Derivatives
Interest Rate
(i) Derivatives (Notional Principal Amount)
For hedging
(ii) Marked to Market Positions
(a) Asset (+)
(b) Liability (-)
(iii) Credit Exposure
(iv) Unhedged Exposures
Disclosures relating to Securitisation
No Securitisation transaction for special purpose vehicles has been undertaken by the year
37.50 -
NIL -
1.37 - NA NA NA NA
2.4 2.4.1
2.4.2
the Company during
Details of Financial Assets sold to Securitisation / Reconstruction Company
Particulars FY 2017
(i) No. of accounts 2
(ii) Aggregate value (net of provisions) of accounts sold to 12.78 SC / RC
(iii) Aggregate consideration 18.26
(iv) Additional consideration realized in respect of accounts NIL transferred in earlier years
(` in crores)
FY 2016
-
-
-
-
-
(v) Aggregate gain over net book value
5.48
IL&FS Financial Services Limited Annual Report 2017
1 2 9


2.4.3 Details of Assignment transactions undertaken by NBFCs
The Company has not undertaken any assignment transaction during the year
2.4.4 Details of non-performing financial assets purchased / sold
During the year the Company has not purchased/sold any non-performing financial asset from/to any other NBFC
2.5 Asset Liability Management Maturity pattern of certain items of Assets and Liabilities
Up to 30/31 days
Over 1
month and upto 2 months
Over 2 months and upto 3 months
Over 3 months and up to 6 months
Over 6 months and up to 1 year
Over 1 year and up to 3 years
Over 3 years and up to 5 years
Over 5 years
193.10
505.50
1,182.27
2,952.61
2,536.89
2,208.60
1,662.57
1,044.94
372.29
-
-
-
-
38.27
11.80
2,273.93
-
-
-
-
-
-
-
-
565.39
505.50
1,182.27
2,952.61
2,536.89
2,246.87
1,674.37
3,318.87
524.58
1,145.65
732.26
1,285.01
3,064.51
4,873.91
2,640.75
1,593.00
-
-
-
-
-
-
-
-
524.58
1,145.65
732.26
1,285.01
3,064.51
4,873.91
2,640.75
1,593.00
Particulars (Refer note 7)
Inflows
Advances
Investments
Foreign Cur- rency Assets
Total Outflows Borrowings
Foreign Currency Liabilities
Total
(` in crores) Total
12,286.49 2,696.29 -
14,982.77
15,859.66 -
15,859.66
1 3 0 IL&FS Financial Services Limited Annual Report 2017


2.6 Exposures
2.6.1 Exposure to Real Estate Sector@
Category
(a) Direct exposure
(i) Residential Mortgages -
Lending fully secured by mortgages on residential property that is or will be occupied by the borrower or that is rented
(ii) Commercial Real Estate -
Lending secured by mortgages on commercial real estates (office buildings, retail space, multipurpose commercial premises, multi-family residential buildings, multi-tenanted commercial premises, industrial or warehouse space, hotels, land acquisition, development and construction, etc.). Exposure would also include non-fund based limits;
(iii) Investments in Mortgage Backed Securities (MBS) and other securitised exposures -
(a) Residential
(b) Commercial Real Estate
Total exposure to Real Estate Sector
@As certified by the Management and relied upon by Auditors
2.6.2 Exposure to Capital Market@
S.N. Particulars
(i) direct investment in equity shares, convertible bonds, convertible debentures and units of equity- oriented mutual funds the corpus of which is not exclusively invested in corporate debt;
(ii) advances against shares / bonds / debentures or other securities or on clean basis to individuals
for investment in shares (including IPOs / ESOPs), convertible bonds, convertible debentures, and units of equity-oriented mutual funds;
FY 2017
-
2,741.00
(` in crores)
FY 2016
-
1,678.47
-
-
2,741.00
FY 2017
1,567.15
92.08
-
-
1,678.47
(` in crores)
FY 2016
2,164.05
181.57
IL&FS Financial Services Limited Annual Report 2017 1 3 1


(iii) advances for any other purposes where shares or convertible bonds or convertible debentures or units of equity oriented mutual funds are taken as primary security;
(iv) advances for any other purposes to the extent secured by the collateral security of shares or convertible bonds or convertible debentures or units of equity oriented mutual funds i.e. where the primary security other than shares / convertible bonds / convertible debentures / units of equity oriented mutual funds 'does not fully cover the advances;
(v) secured and unsecured advances to stock brokers and guarantees issued on behalf of stock brokers and market makers;
(vi) loans sanctioned to corporates against the security of shares / bonds / debentures or other securities or on clean basis for meeting promoter's contribution to the equity of new companies in anticipation of raising resources;
(vii) bridge loans to companies against expected equity flows / issues;
(viii) all exposures to Venture Capital Funds (both registered and unregistered)
Total Exposure to Capital Market
@As certified by the Management and relied upon by Auditors
2.6.3 Details of financing of parent company products
2,109.31
1,357.23
223.18
548.95
- 440.03 6,337.93
2,803.21
920.33
172.01
254.00
- 441.79 6,936.96
The Company has not financed any products of the parent during current year
2.6.4 Details of Single Borrower Limit (SGL) / Group Borrower Limit (GBL) exceeded by the NBFC
3.
The Company has not exceeded the Single Borrower Limit (SGL) / Group Borrower Limit (GBL) during the current year
Miscellaneous@
3.1 Registration/license/authorisation obtained from other financial sector regulators
In addition to registration with RBI as NBFC-ND-SI, the Company has obtained Underwriting License from Securities and Exchange Board of India (SEBI)
1 3 2
IL&FS Financial Services Limited Annual Report 2017


3.2 Disclosure of Penalties imposed by RBI and other regulators
No penalties were imposed by RBI or SEBI (being the regulator for the Company) during the year ended March 31, 2017
3.3 Ratings assigned by credit rating agencies and migration of ratings during the year
The Company has been assigned credit rating as per the details below and there has been no change in ratings of the Company during the year.
Rating Agency
Credit Analysis & Research Limited (CARE) Investment Information and Credit Rating Agency (ICRA)
India Ratings & Research
Rating
CARE AAA, CARE A1+ ICRA A1+
IND AAA, IND A1+ @As certified by the Management and relied upon by Auditors
4. Additional Disclosures
4.1 Provisions and Contingencies
Break up of ‘Provisions and Contingencies’ shown under the head Expenditure in Statement of Profit and Loss Account:
S.N. Particulars
(i) Provisions for depreciation on Investment
(ii) Provision towards NPA
(iii) Other Provision and Contingencies (with details)
Provision for Standard Restructured Assets
Provision for Bad and Doubtful Debts
Provision for General Contingencies
Provision for Standard Assets
Provision for Mark to Market on Derivatives
Loans & Trade Receivables written off/(written back)
(iv) Total Provision and Contingencies Other than Provision for Tax (iv) = (i) + (ii) + (iii)
(v) Provision made towards Income Tax net of Deferred Tax
(vi) Total Provision and Contingencies including Provision for Tax (vi) = (iv) + (v)
4.2 Draw Down from Reserves
FY 2017
72.32
40.58
(1.38)
1.17
90.00
5.50
0.10
166.24
374.53
113.90
488.43
(` in crores)
FY 2016
32.51
58.97
(0.57)
3.96
120.00
12.00
(0.71)
(11.59)
214.57
129.08
343.65
The Company has not undertaken any drawdown from reserves during the year
IL&FS Financial Services Limited Annual Report 2017 1 3 3


4.3 Concentration of Deposits, Advances, Exposures and NPAs 4.3.1 Concentration of Advances (Refer note 8)
Particulars
Total Advances to twenty largest borrowers
Percentage of Advances to twenty largest borrowers to Total Advances of the NBFC
4.3.2 Concentration of Exposures (Refer note 9)
Particulars
Total Exposure to twenty largest borrowers / customers Percentage of Exposures to twenty largest borrowers / customers to Total Exposure of the NBFC on borrowers / customers
4.3.3 Concentration of NPAs Particulars
Total Gross Exposure to top four NPA accounts (Refer note 10) 4.3.4 Sector-wise NPAs
(` in crores) FY 2017 4,858.31
39.00
(` in crores) FY 2017 5,084.86
39.54
(` in crores) FY 2017 216.10
Sector Percentage of Gross NPAs to Total Advances in that sector
1. Agriculture & allied activities -
2. MSME -
3. Corporate borrowers 3.28
4. Services -
5. Unsecured personal loans -
6. Auto loans -
7. Other personal loans 6.79
1 3 4
IL&FS Financial Services Limited Annual Report 2017


4.4 Movement of NPAs
S.N. Particulars
(i) Net NPAs to Net Advances (%)
(ii) Movement of NPAs (Gross)
(a) Opening balance
(b) Additions during the year
(c) Reductions during the year
(d) Closing balance
(iii) Movement of Net NPAs
(a) Opening balance
(b) Additions during the year
(c) Reductions during the year
(d) Closing balance
FY 2017
2.36
349.52
407.64
347.26
409.90
274.14
301.01
284.51
290.63
(` in crores)
FY 2016
2.20
252.97
224.52
127.98
349.52
202.50
157.90
86.26
274.14
assets)
50.47
66.62
41.72
75.38
(` in crores)
Total Assets*
(iv) Movement of provisions for NPAs (excluding provisions on standard
(a) Opening balance
(b) Provisions made during the year
(c) Write-off / write-back of excess provisions
(d) Closing balance
4.5 Joint Ventures and overseas Subsidiaries (Refer note 12)
75.38
106.63
62.75
119.26
Name of the Subsidiary
IL&FS Global Financial Services Pte Ltd
IL&FS Global Financial Services (UK) Ltd
IL&FS Global Financial Services (ME) Ltd
IL&FS Global Financial Services (HK) Ltd
4.6 Off-balance Sheet SPVs sponsored
Particulars
Name of the SPV sponsored
5. Disclosure of Complaints@
Particulars
(a) No. of complaints pending at the beginning of the year
(b) No. of complaints received during the year
(c) No. of complaints redressed during the year
(d) No. of complaints pending at the end of the year
@As certified by the Management and relied upon by the auditors
Country of Operation
Singapore 24.59
UK 10.65
Dubai 23.84
Hong Kong
Domestic
NIL
FY 2017
NIL
NIL
NIL
NIL
8.36
Overseas
NIL
FY 2016
NIL
NIL
NIL
NIL
IL&FS Financial Services Limited Annual Report 2017
1 3 5


Explanatory Notes to Annexure I and II
1. 2.
3.
4.
5.
6.
7.
Unsecured Debentures aggregating to ` 164,690 Lakhs includes subordinated debts of ` 100,000 Lakhs
Figures reported under the head of ‘Break-up of Loans and Advances including Bills Receivables’ and ‘Break up of Investments’ are at gross level and provision held against these has not been netted off
Quoted investments are considered at market value. Unquoted investments are considered at fair value where fair value is available as assessed by independent valuer, in other cases investments are considered at break-up value
In respect of the definition of ‘companies in the same group’, the Company has adopted a policy which was approved by the Board of Directors in October 2007. This policy has been consistently followed till date for purpose of disclosure and computation of various ratios. In the current financial year RBI has in its observation recommended a different method for the computation of the same. The Company is of the opinion that the basis adopted since October 2007 is appropriate and the matter is under discussion with RBI
Investment in Non-Convertible Debentures, being credit substitute has been classified as Non-performing Asset (NPA) in accordance with RBI guidelines and a provision of `4.26 crore is held on the same and disclosed under note 4.4: Movement of NPA’s and not included in provision for depreciation on Investments
The Company does not offer derivative products to its customers for market making purposes and the derivative transactions entered into by the Company are for hedging its own balance sheet risks. Counterparty for swap agreements entered to hedge its asset/liabilities are banks
The statement has been prepared in accordance with
RBI circular DNBS (PD) .CC.No.15 /02.01 / 2000-2001 dated June 27, 2001
(i) Advances and borrowing represents the principal component only and does not include interest accrued but not due thereon
(ii) For the purpose of the statement, the Management has classified trading portfolio (comprising of quoted equity shares and government securities) in ‘Up to 30/31 days’ bucket which have been relied upon by the auditors
(iii) Certain long-term loans extended by the Company have an option wherein the Company has right to call the loans on specific dates. Maturity pattern of Advances has been determined based on cash flows as stipulated in the repayment schedule adjusted for earliest exercisable date of embedded options, which is earlier than actual contractual maturity date
(iv) The Company has made equity investment in its overseas subsidiaries which are included under the head of ‘Investment’ in the table
1 3 6
IL&FS Financial Services Limited Annual Report 2017


(v) Advances includes debentures in the nature of credit exposure
(vi) Advances and investments are net of provision held
8. Total Advances represent principal outstanding of Loans & Advances, Debentures in the nature of credit exposure and non-fund based exposures outstanding as at Balance sheet date
9. Total Exposure represents Total Advances as stated in note 8 above and investments in shares of these companies
10. Total Exposure represents Loans & Advances and Debentures in the nature of credit exposure. The Company carries provision aggregating to ` 62.15 crores against the same
11. Gross NPA and Provision for NPAs includes Funded Interest Term Loans amounting to `9.88 Crore (FY 2016 : ` 6.58 Crore)
12. The total assets figures are based on audited financial statement of the subsidiary companies as on March 31, 2017 except for IL&FS Global Financial Services (UK) Ltd, which is based on management certified financial statements
DISCLOSURE UNDER REGULATION 53 (F) OF THE SEBI (LISTING OBLIGATIONS & DISCLOSURE REQUIREMENTS), 2015
Particulars
1) Loans and Advances in the Nature of Loans given to :
i. Subsidiaries
ii. Associates
iii. Firms/Companies in
which Directors are
interested
2) Investment by Loanee
in the Shares of
Parent and Subsidiary Company, when the Company has made a Loan or Advance in the nature of Loan
Maximum outstanding during (` in Mn)
March 31, 2016
- - -
-
Amount outstanding as at (` in Mn)
March 31, 2017
March 31, 2016
March 31, 2017
-
-
-
-
-
-
-
-
-
-
-
-
IL&FS Financial Services Limited Annual Report 2017
1 3 7


CONSOLIDATED FINANCIAL STATEMENTS


AUDITORS’ REPORT ON
CONSOLIDATED FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF IL&FS FINANCIAL SERVICES LIMITED
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial statements of IL&FS FINANCIAL SERVICES LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) its associates and jointly controlled entities, comprising of the Consolidated Balance Sheet as at March 31, 2017, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated financial statements”).
Management’s Responsibility for the Consolidated Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its Associates and Jointly controlled entities in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act. The respective Board of Directors of the companies included in the Group and of its associates and jointly controlled entities are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and its associates and its jointly controlled entities and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Holding Company, as aforesaid.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
IL&FS Financial Services Limited Annual Report 2017 1 3 9


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraphs (a) and (b) of the paragraph 1 of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, and:
a. based on the consideration of reports of the other auditors on separate financial statements of the subsidiaries and jointly controlled entities referred to in paragraph 1 of Other Matters paragraph below; and
b. based on the unaudited financial statements / information of subsidiaries, associates and jointly controlled entities, referred to in paragraph 2 of Other Matter paragraph below,
the aforesaid consolidated 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, of the consolidated state of affairs of the Group, its associates and jointly controlled entities as at March 31, 2017, and their consolidated profit and their consolidated cash flows for the year ended on that date.
Other Matters
1. We did not audit the financial statements of :
a. Four subsidiaries whose financial statements reflect total assets of Rs.1,559.29 mn as at March 31, 2017, total revenues of Rs.149.80 mn and net cash inflows amounting to Rs.2.15 mn for the year ended on that date, as considered in the consolidated financial statements.
b. One jointly controlled entity which reflect the Group’s share of total assets of Rs.84.63 mn as at March 31, 2017, total revenues of Rs.163.64 mn and net cash (outflows) of Rs.4.18 mn for the year ended on that date, as considered in the consolidated financial statements.
These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries and jointly controlled entity, and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries and jointly controlled entity is based solely on the reports of the other auditors.
1 4 0 IL&FS Financial Services Limited Annual Report 2017


2. We did not audit the financial statements / financial information of:
a. Six subsidiaries, whose financial statements / financial information reflect total assets of Rs.1,428.28 mn as at March 31, 2017, total revenue of Rs.12.52 mn and net cash (outflows) amounting to Rs.6.11 mn for the year ended on that date, as considered in the consolidated financial statements.
b. Thirteen jointly controlled entities, whose financial statements / financial information reflect total assets of Rs.379.87 mn as at March 31, 2017, total revenue of Rs.126.40 mn and net cash (outflows) amounting to Rs.8.37 mn for the year ended on that date, as considered in the consolidated financial statements.
c. Two associates, wherein the Group’s share of net profit of Rs.1.93 mn for the year ended March 31, 2017, as considered in the consolidated financial statements.
These financial statements / financial information are unaudited and have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, jointly controlled entities and associates, is based solely on such unaudited financial statements / financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements / financial information are not material to the Group.
Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements / financial information certified by the Management.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of the other auditors on separate financial statements and the other financial information of subsidiaries, associates and jointly controlled entities, referred to in the Other Matters paragraph above, we report, to the extent applicable, that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated financial statements.
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated financial statements.
d. In our opinion, the aforesaid consolidated financial statements comply with the Accounting Standards prescribed under Section 133 of the Act.
e. On the basis of the written representations received from the directors of the Holding Company as on March 31, 2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors of its subsidiary companies and jointly controlled company incorporated in India, none of the directors of the Group
IL&FS Financial Services Limited Annual Report 2017 1 4 1


companies and its jointly controlled company incorporated in India, is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”, which is based on the auditors’ reports of the Holding company, subsidiary companies and jointly controlled company incorporated in India. Our report express an unmodified opinion on the adequacy and operating effectiveness of the Holding Company’s, subsidiary company’s and jointly controlled company’s incorporated in India internal financial control over financial reporting.
g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i.
ii. iii.
iv.
.
Place: Mumbai Date: May 19, 2017
The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and jointly controlled entities – refer Note 16(b) to the consolidated financial statements;
The Group, its associates and jointly controlled entities did not have any material foreseeable losses on long-term contracts including derivative contracts;
There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, and its subsidiary companies and jointly controlled companies incorporated in India.
The Holding Company has provided requisite disclosures in the consolidated financial statements as regards the holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 08, 2016 of the Ministry of Finance, during the period from November 08, 2016 to December 30, 2016 of the Group entities as applicable. Based on audit procedures performed and the representations provided to us by the Management, we report that the disclosures are in accordance with the relevant books of accounts maintained by those entities for the purpose of preparation of the consolidated financial statements and as produced to us and the other auditors by the Management of the respective Group entities.
For Deloitte Haskins & Sells LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)
Udayan Sen
Partner Membership No. 31220
1 4 2 IL&FS Financial Services Limited Annual Report 2017


ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of the Company as of and for the year ended March 31, 2017, we have audited the internal financial controls over financial reporting of IL&FS FINANCIAL SERVICES LIMITED (hereinafter referred to as “the Holding Company”) and its subsidiary companies, and jointly controlled companies, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Holding company, its subsidiary companies, and jointly controlled companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Holding Company, its subsidiary companies and its jointly controlled company, which are companies incorporated in India, based on our audit and in terms of the reports of the other auditors referred to in the Other Matters paragraph below. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s
IL&FS Financial Services Limited Annual Report 2017 1 4 3


judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies and jointly controlled company, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Holding Company, its subsidiary companies, and its jointly controlled company, which are companies incorporated in India.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that:
1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion to the best of our information and according to the explanations given to us and based on the consideration of the reports of other auditors referred to in the Other Matters paragraph (a) below and read with our comments referred to in the Other Matters paragraph (b) below, the Holding Company, its subsidiary companies, and its jointly controlled company, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the respective companies considering
1 4 4 IL&FS Financial Services Limited Annual Report 2017


the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
a) Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to one jointly controlled company, which is company incorporated in India, is based on the corresponding report of the auditor of such company incorporated in India. There are ten subsidiary entities which are incorporated in India or outside India, to whom the aforesaid reporting is not applicable and no reporting under the Section has been made.
b) In respect of six subsidiary companies, thirteen jointly controlled entities and two associate companies, which have been included in the consolidated financial statements based on unaudited financial statements /information provided to us by the Management of the Holding Company and since these entities are unaudited, the possible effects of the same on our reporting under section 143(3)(i) has not been considered.
Our opinion is not modified in respect of the above matters
Place: Mumbai Date: May 19, 2017
For Deloitte Haskins & Sells LLP Chartered Accountants (Firm’s Registration No. 117366W/W-100018)
Udayan Sen
Partner Membership No. 31220
IL&FS Financial Services Limited Annual Report 2017 1 4 5


CONSOLIDATED BALANCE SHEET
(` in million) As at
March 31, 2016
As at March 31, 2017
3,906.67
20,137.98
24,044.65
53.31
-
91,076.63
0.24
561.23
7,701.44
99,339.54
43,003.60
0.21
374.84
23,974.90
2,813.36
2,394.91
72,561.82
195,999.32
548.66
8.34
210.86
61.80
1,995.44
28,138.80
77,366.84
1,002.42
1,09,333.16
1,722.56
18,570.04
4,483.71
2,164.37
29,714.37
26,322.26
3,688.85
86,666.16
195,999.32
EQUITIY AND LIABILITIES
SHAREHOLDERS' FUNDS
Share Capital Reserves and Surplus
MINORITY INTEREST
PREFERENCE SHARES ISSUED BY SUBSIDIARY COMPANY TO OUTSIDE GROUP
NON CURRENT LIABILITIES
Long- term Borrowings Deferred Tax Liability (net) Other Long- term Liabilities Long- term Provisions
CURRENT LIABILITIES
Short- term Borrowings Trade Payable
MSME
Other than MSME
Current Maturity of Long- term Borrowings Other Current Liabilities
Short- term Provisions
TOTAL
ASSETS
NON CURRENT ASSETS
Property, Plant & Equipment Tangible Assets (Net) Intangible Assets (Net) Capital Work-in-Progress Goodwill
Deferred Tax Assets (net) Non-Current Investments Long-Term Loans and Advances Other Non-Current Assets
CURRENT ASSETS
Current Maturity of Non-Current Investments Current Maturity of Long-term Loans and Advances Current Investments
Trade Receivables (net)
Cash and Cash Equivalents Short-term Loans and Advances Other Current Assets
TOTAL
Note
2 2
3 8 (b) 4
5
3 6
3 4 5
7 7
8 (b) 9 12 15
10
12
11
13
14
12
15
3,906.67
19,012.55
75,739.00
0.43
412.50
6,321.67
47,647.69
-
247.79
21,474.64
1,964.06
3,397.32
421.34
11.98
302.53
61.80
1,663.97
29,041.02
63,337.14
1,775.02
3,695.04
19,458.76
5,261.94
1,871.90
13,762.43
37,015.76
2,562.98
22,919.22
92.33
26.96
82,473.60
74,731.50
1,80,243.61
96,614.80
83,628.81
1,80,243.61
Notes 1 to 29 forms part of the Consolidated Financial Statements
In terms of our report attached.
For Deloitte Haskins & Sells LLP
Chartered Accountants
Udayan Sen
Partner
Membership No. 31220
Mumbai, May 19, 2017
Ravi Parthasarathy Ramesh C Bawa Deepak Pareek Neelam Desai
For and on behalf of the Board
Chairman (DIN: 00002292) Managing Director & CEO (DIN: 00040523) Chief Financial Of cer Company Secretary
Mumbai, April 25, 2017
1 4 6 IL&FS Financial Services Limited Annual Report 2017


CONSOLIDATED STATEMENT OF PROFIT AND LOSS
(` in million) Year ended
March 31, 2016 19,858.92
261.00 20,119.92
12,187.86 1,064.29 1,327.78
27.94
19.91 1,200.00 976.21 16,803.99
3,315.93 1,349.92 1,966.01
(1.62) 6.11 1,970.50
7.38
For and on behalf of the Board
Chairman (DIN: 00002292) Managing Director & CEO (DIN: 00040523) Chief Financial Of cer Company Secretary
Mumbai, April 25, 2017
Year ended March 31, 2017
24,216.56
102.48
24,319.04
14,576.17
1,109.30
1,461.26
38.56
-
900.00
2,751.89
20,837.18
3,481.86
1,220.53
2,261.33
(0.82)
1.93
2,262.44
7.46
REVENUE
Revenue from Operations
Other Income
EXPENSES
Finance Costs
Employee Benefit Expenses
Other Operating & Administrative Expenses
Depreciation and Amortisation
Goodwill impairment
Provision for General Contingency
Other Provisions and Write offs
PROFIT BEFORE TAX
Tax Expenses (Net)
PROFIT AFTER TAX
Add/(Less):
Minority Interest
Share of Profit from Associates PROFIT FOR THE YEAR
EARNINGS PER SHARE
Basic and Diluted
(Face value per share `10)
Note
19
20
21(a)
21(b)
7, 9
22
23
Notes 1 to 29 forms part of the Consolidated Financial Statements
In terms of our report attached.
For Deloitte Haskins & Sells LLP
Chartered Accountants
Udayan Sen
Partner
Membership No. 31220
Mumbai, May 19, 2017
Ravi Parthasarathy Ramesh C Bawa Deepak Pareek Neelam Desai
IL&FS Financial Services Limited Annual Report 2017 1 4 7


CONSOLIDATED CASH FLOW STATEMENT
Year ended March 31, 2017
3,481.86
38.56
-
900.00
2,751.89
(43.52)
(301.61)
(266.22)
(22.62)
(43.78)
6,494.56
778.24
567.64
312.50
(829.41)
1,322.00
(4,644.09)
3,998.54
(1,599.54)
2,399.00
(3,183.59)
1,738.64
954.05
(2,064.52)
181.11
1,694.96
301.61
(74.10)
45.05
(141.68)
(20.00)
185.94
21.98
28.05
158.40
(A) CASH FLOW FROM OPERATING ACTIVITIES
PROFIT BEFORE TAX
Adjustments for:
Depreciation and Amortisation
Goodwill impairment
Provision for General Contingency
Other Provisions and Write offs
Provisions for Employee Benefits (net)
Dividend and Pass through Income on Long term Investments
Net Profit on sale of Long Term Investments
Interest Income on Deposits
Net Profit on Sale of Assets
Operating Profit before Working Capital Changes
Adjustments for changes in:
Decrease / (Increase) in Current Investments
Decrease / (Increase) in Long term and Short term Advances
Decrease / (Increase) in Other Current and Non – Current Assets
(Increase) / Decrease in Trade Receivables
Increase / (Decrease) in Trade Payables, Other Current and Non – Current Liabilities
(Repayments) / Proceeds of / from Short Term Borrowings (net)
Payment of Advance Tax (net of refund)
Loan Disbursed (Net)
Credit Instruments Repaid
NET CASH GENERATED FROM / (USED IN) OPERATING ACTIVITIES
(B) CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Long Term Investments (including advance towards investments)
- Others
Proceeds from Sale of Long Term Investments
- Subsidiaries, Associates and Joint Ventures
- Others
Divided & Pass Through Income on Long term Investments
Purchase of Fixed Assets including CWIP
Proceeds from Sale of Fixed Assets
Fixed Deposits Placed
Inter Corporate Deposits Placed
Proceeds from Fixed Deposits
Interest received on Deposits
Movement in Earmarked Balance
NET CASH GENERATED FROM / (USED IN) INVESTING ACTIVITIES
A
(` in million)
Year ended March 31, 2016
3,315.93
27.94
19.91 1200.00 976.21 92.46 (292.54)
(2.25) (25.46) (0.26) 5,311.94
(878.29) (506.74) (832.58)
45.08 (606.86)
23,069.79 25,602.34 (1,305.12) 24,297.22
(27,736.27) (32.76)
(3,471.81)
(1,433.16)
- 239.76 292.54 (46.39) 0.89 (150.00) - 150.00 25.12 (27.55)
(948.79)
B
1 4 8 IL&FS Financial Services Limited Annual Report 2017


(` in million)
Year ended March 31, 2016
48,938.22
(56,439.11) 1,000.00 5,540.00 (1,191.00) (1.19) 2,499.99 12.72 (1,620.49)
- - -
(72.40)
(0.16) (1,333.42)
(5,754.02)
19,096.26 -
33.09 13,375.33
13,762.43
240.02 119.00 28.08 13,375.33
For and on behalf of the Board
Chairman (DIN: 00002292) Managing Director & CEO (DIN: 00040523) Chief Financial Of cer Company Secretary
Mumbai, April 25, 2017
Year ended March 31, 2017
50,944.78
(49,237.89)
1,000.00
17,550.00
(2,410.00)
(3.00)
-
(205.23)
(2,458.37)
19.33
(10.34)
(24.33)
-
(0.33)
15,164.62
16,277.07
13,375.33
(7.67)
(34.80)
29,609.93
29,714.37
45.53
58.88
0.03
29,609.93
(C) CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Proceeds from Issue of Subordinate Debt
Proceeds from Issue of Non-Convertible Debentures Repayment of Non-Convertible Debentures
Decrease in Minority Interest
Proceeds from Issue of Preference Share Capital (Decrease)/Increase in Advance for Projects
Dividend paid on Equity/Preference Shares (including tax thereon)
Issue of Unit Capital Redemption of Unit Capital
Acquisition of Preference Shares Issued by Subsidiary Company held by Outside Group
Expense written off against Securities Premium Account
Dividend paid to Minority Shareholder
NET CASH GENERATED FROM / (USED IN) FINANCING ACTIVITIES
(D) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the Year
Cash and cash equivalents due to investment/divestment/ dilution in subsidiaries
Effect of Changes in Exchange rate on cash and cash equivalents
Cash and cash equivalents at the end of the Year
Cash and cash equivalents (Refer Note 14)
Less : Bank balances not considered as Cash and cash equivalents as defined in AS 3 Cash Flow Statements
In deposit accounts (more than 3 months)
In deposit accounts (earmarked)
In current accounts (earmarked)
Net Cash and cash equivalents (as defined in AS 3 Cash Flow)
Notes 1 to 29 forms part of the Consolidated Financial Statements
C
(A+B+C)
In terms of our report attached.
For Deloitte Haskins & Sells LLP
Chartered Accountants
Udayan Sen
Partner
Membership No. 31220
Mumbai, May 19, 2017
Ravi Parthasarathy Ramesh C Bawa Deepak Pareek Neelam Desai
IL&FS Financial Services Limited Annual Report 2017 1 4 9


NOTES FORMING PART OF THE CONSOLIDATED ACCOUNTS
Background
IL&FS Financial Services Ltd is incorporated in India as a public limited company and registered with Reserve bank of India as Non Deposit Taking Systemically Important Non Banking Financial Services Company (NBFC-ND-SI). The Group is engaged in financial services business comprising of lending, investments, broking, merchant banking and advisory services
(1)
SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Consolidation
(i) The Consolidated Financial Statements (CFS) relate to IL&FS Financial Services Limited (the Company), its Subsidiaries, Jointly Controlled Entities (JCE) and Associates, which together constitute the Group
(ii) The CFS of the Group have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) and Guidelines issued by Reserve Bank of India. The CFS have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the Financial Statements are consistent with those followed in the previous year
(iii) The Group adopts the accrual concept in the preparation of the accounts. The preparation of CFS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the CFS and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the CFS are prudent and reasonable. Actual results could differ from these estimates. Any change in estimates is recognized prospectively in current and future period
(b) Principles of Consolidation
(i) The Financial Statements of the Company and its Subsidiaries have been consolidated as a single economic entity to show the economic resources controlled by the Group and then on a line-by-line basis by adding together the book value of the like items of assets, liabilities, income and expenses, after eliminating intra-group balances and unrealized profits / losses on intra- group transactions and are presented to the extent possible, in the same manner as the Company’s Standalone Financial Statements
1 5 0
IL&FS Financial Services Limited Annual Report 2017


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