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

IFIN Annual Report 2016-17

(ii) The Accounting Policies of the Consolidation Entities (note 1(c)) have been adjusted as necessary so as to ensure consistent accounting within the Group
(iii) For translation of the non-integral foreign operations both monetary and non monetary assets and liabilities are translated using closing rate as on the Balance Sheet date. The Income and Expenses are converted at the average rate. The Shareholders funds are consolidated by applying the transaction date rate of the foreign currency amounts. Any gain/(loss) arising on such conversion is transferred to foreign exchange translation reserve until the disposal of net investments
(iv) Minority interest in the net assets of the consolidating Subsidiaries consists of the amount of equity attributable to the minority shareholders at the dates on which investments are made and further movements in their share in the equity of the subsidiary company subsequent to the date of investment
(v) Investment in associate companies have been accounted for by using the equity method, whereby an investment is initially recorded at cost and the carrying amount is adjusted thereafter for post-acquisition change in the Group’s share of net assets of the associate companies. The carrying amount of investment in associate companies is reduced to recognize any decline which is other than temporary in nature and such determination of decline in value, if any, is made for each investment individually. The unrealized profits / losses on transactions with associate companies are eliminated by adjusting the carrying amount of investments
(vi) The Group’s interest in joint controlled entities (JCE) are proportionately consolidated on a line-by-line basis by adding together the book values of assets, liabilities, income and expenses, after eliminating the unrealized profits / losses on intra-group transactions
(vii) The financial statements of the subsidiaries, jointly controlled entity and associates used in the consolidated Financial Statements are drawn up to the same reporting date as that of the Company, i.e. March 31, 2017
(viii) Adjustments due to differences between the unaudited accounts and the subsequent audited accounts and prior period errors / omissions, if any, are accounted through the Consolidated Statement of Profit and Loss in the year the accounts of the consolidating entity gets audited or errors / omissions are identified
IL&FS Financial Services Limited Annual Report 2017 1 5 1


(c) List of Consolidating Entities
(i) The Consolidated Financial Statements consist of the Company and the following entities :
Shareholding % As on
March 31, 2017
March 31, 2016
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
100.00
-
86.60
100.00
76.00
100.00
100.00
100.00
100.00
92.00
92.00
-
100.00
100.00
100.00
100.00
-
100.00
100.00
73.98
73.98
100.00
100.00
100.00
100.00
26.00
26.00
49.90
49.90
50.00
50.00
50.00
50.00
49.99
49.99
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
Name of the Entity
Direct Subsidiaries
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.
Countryof incorporation
Singapore UK
Dubai Hong Kong India
IL&FS AMC Trustee Ltd. (Upto December 31, 2016) India
IL&FS Infra Asset Management Ltd. (Upto December 31, 2016)
IL&FS Broking Services Pvt. Ltd.
IL&FS Infrastructure Equity Fund- I
IL&FS ORIX Trust
IFIN Realty Trust
Investment Square Trust (Upto March 27, 2017) India
India
India India India India
IL&FS IIDC Fund
IL&FS Investment Trust – IV
Indirect Subsidiaries
Integrated Trans Log Development Company Ltd India
Free Trade Warehousing Pvt. Ltd.
Integrated Warehousing Kandla Project
Development Pvt. Ltd.
Haldia Free Trade Warehousing Pvt. Ltd.
Direct Joint Venture
Syniverse Technologies (India) Pvt. Ltd.
Indirect Joint Ventures
Bengal Integrated Infrastructure Development Ltd.
Infrastructure Development Corporation of Assam Ltd.
Jharkhand Infrastructure Development
Corporation Ltd.
KSIIDC – IL&FS Project Development Company Ltd. India
India India
PDCOR Ltd.
Orissa Project Development Company Pvt. Ltd. South Coast Infrastructure Development Company of Andhra Pradesh Pvt. Ltd. Uttarakhand Infrastructure Projects Company Pvt. Ltd.
India India
India India
India India India
India India India
India
1 5 2
IL&FS Financial Services Limited Annual Report 2017


50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
50.00
26.00
26.00
49.99
49.99
Infrastructure Development Co of Nagaland Pvt. Ltd. Bengal Urban Infrastructure Development Pvt. Ltd. Gujarat Tourism Opportunity Ltd.
Damodar Valley Tourism Development Pvt. Ltd. Gujarat Industrial Infrastructure Projects Ltd. Indirect Associates
Canopy Housing & Infrastructure Pvt. Ltd. Urban Mass Transit Company Ltd.
India India India India India
India India
(ii) In respect of one of Subsidiary i.e. IL&FS Orix Trust, Financial Statements have not been drawn on a going concern basis. The Assets of ` 0.01 mn are accounted at lower of carrying value or net realisable value and the liabilities of ` 0.01 mn are accounted at the settlement value in the financial statement as at reporting date
(iii) The Board of Director of IL&FS Capital Advisors Limited (ICAP) at their meeting dated April 19, 2017 recommended for voluntary winding up of the Company, under Section 59 of the Insolvency and Bankruptcy Code, 2016, read with Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017. ICAP has also intimated to Securities and Exchange Board of India (SEBI) for non-renewal of its Merchant Banking License. ICAP has hence discontinued its operations which is an evidence of the Company’s inability to continue as a going concern, therefore financial statement has not been drawn on a going concern basis
(iv) IL&FS Broking Services Pvt. Ltd. (IBSPL) has surrendered its stock broking license based on the approval received from the shareholders vide its resolution passed at its extra ordinary general meeting held on February 27, 2017. IBSPL will be providing advisory services going forward
(v) The financial position and results of the above entities are as under:
(` in million)
Total Liabilities
Total Assets
Total Income
0.01
0.01
-
0.87
102.77
55.83
2.52
134.97
36.16
Name of Entity
IL&FS Orix Trust
IL&FS Capital Advisors Limited
IL&FS Broking Services Private Limited
Total Expenses
0.01 33.58
52.29
IL&FS Financial Services Limited Annual Report 2017 1 5 3


(d)
Property, Plant and Equipment and Depreciation/Amortisation (i) Leased Assets
Capitalisation
At Cost including incidental expenses to bring the asset to its working condition for its intended use
At Cost including incidental expenses to bring the asset to its working condition for its intended use
At Cost including incidental expenses to bring the asset to its working condition for its intended use
Type of Lease
Operating Lease
Capital Expenditure
on renovation / Improvements to Lease- hold Premises
Leasehold Land
(ii) Other Property, Plant and Equipment
Depreciation Policy
Straight Line Method
at the rates provided under Schedule II to the Companies Act, 2013
Amortised over the primary period of the Lease
Depreciated over the period of the lease on a straight line basis after implementation of the project
Tangible and Intangible Property, Plant and Equipment are reported at acquisition cost, with deductions for accumulated depreciation / amortisation and impairment losses, if any. Cost comprises the purchase price and any attributable cost to bring the asset to its working condition for its intended use
The useful lives of the assets as determined by the Company are as stated below:
• All assets are depreciated on a Straight Line Method (SLM) of depreciation, over the useful life of assets as prescribed under Schedule II of the Companies Act 2013 other than assets specified in para below
• Following assets are depreciated over a useful life which is shorter than the life prescribed under Schedule II of the Companies Act 2013 based on internal technical evaluation, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes etc.:
1 5 4
IL&FS Financial Services Limited Annual Report 2017


Asset
Useful Life (years)
Data Processing Equipment
(Server & Networking)
Mobile Phones and I pad / Tablets Fully depreciated in the year of purchase
Specialised office equipment’s Vehicles
Assets provided to employees Leasehold improvement costs All categories of assets costing less than ` 5,000/- each Software
4
3 5 3
Amortised over Primary period of Lease Fully depreciated in the year of purchase
4 years or the useful life of the software, whichever is shorter
The residual value of fully depreciated assets is retained at ` 1/- each to identify the asset in the asset register
(e) Goodwill
The difference of cost of investment in a subsidiary and the Company’s share of the equity of subsidiary at the date on which the investment is made, is recognised as ‘Goodwill’ or ‘Capital Reserve’, as the case may be, in the consolidated financial statements
(f) Operating Leases
Leases where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating lease
(g) Investments
(i) Investments are capitalized at cost including costs incidental to acquisition
(ii) Investments are classified into long-term or current investments at the time of acquisition of such investments. Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with the Accounting Standard 13 (AS 13) – “Accounting for Investments”. All other investments are classified as long-term investments
(iii) Long-term investments are individually valued at cost less provision for diminution, other than temporary
(iv) Quoted current investments are valued at lower of cost and market value of investments on a category basis. Unquoted current investments are valued at lower of cost and breakup value/fair value of investments in accordance with RBI Guidelines
(v) Reclassification of investments from the current to the long-term category or vice-versa is made at the lower of cost and fair value either on April 1st or October 1st of the year. Resultant loss, if any, is recognised in the Consolidated Statement of Profit and Loss
IL&FS Financial Services Limited Annual Report 2017 1 5 5


(vi) Investment in properties are stated at cost less accumulated depreciation as per Straight Line Method (SLM) over estimated useful life of 60 years
(vii) Investment in Security Receipts (SR) issued by SC/ARC are recognized at lower of: (i) Net Book Value (NBV) (i.e., book value less provisions held) of the financial asset; and (ii) Redemption value of SR. SRs issued by an SC/ARC are valued on the Net Asset Value provided by SC/ARC
(h) Earnings per Share
(i) Basic earnings per share is calculated by dividing the net profit after tax for the year attributable to the equity shareholders of the Company by weighted average number of equity shares outstanding during the year
(ii) Diluted earnings per share is calculated by dividing the net profit after tax for the year attributable to the equity shareholders of the Company by weighted average number of equity shares determined by assuming conversion on exercise of conversion rights for all potential dilutive securities
(i) Cash Flow Statements
(i) Cash flows are reported using the indirect method, whereby Profit / (loss) Before Tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Group are segregated based on the available information
(ii) Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value
(j) Foreign currency transactions
(i) Foreign Currency Transactions and Balances
Initial Recognition
Foreign currency transactions are recorded at the rate prevailing on the date of the transaction
Conversion
Foreign currency monetary items are restated using the exchange rate prevailing at the reporting date. Foreign Currency non-monetary items, which are measured in terms of historical cost, are reported using the exchange rate at the date of the transaction
(ii) Exchange Differences
Foreign Currency short-term Monetary Items
The exchange differences on foreign currency short-term monetary items are recognised as income or as expenses in the period in which they arise
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IL&FS Financial Services Limited Annual Report 2017


Foreign Currency Long-term Monetary Items
The Group has exercised the option of amortising / capitalising the exchange differences arising on long-term foreign currency monetary items as given under Ministry of Corporate Affairs (MCA) Notification No. G.S.R 914(E) dated December 29, 2011
(k) Derivative transactions and Hedge Accounting
(i) Pursuant to the issuance of the Guidance Note on Accounting for Derivative Contracts by the Institute of Chartered Accountants of India, the Group has changed its accounting policy on Derivative Contracts to be in line with the Guidance Note with effect from April 1, 2016. Refer note 18(c) for impact on the financial statement of change in accounting policy
(ii) The Group uses derivative instrument as part of its asset and liability management activities to manage exposures to interest rate and foreign currency risk. It enters into derivative contracts to hedge its assets and liabilities
(iii) All derivative contracts are recognised on the balance sheet and measured at fair value
(iv) The Group applies either fair value or cash flow hedge accounting when transactions meet the specified criteria to apply hedge accounting treatment
At the time a financial instrument is designated as a hedge, the Group formally documents the relationship between the hedging instruments and hedged items including the risk management objectives and strategy in undertaking the hedge transactions.
The Group regards a hedge as a highly effective only if at the inception of hedge and throughout its life, the hedge is expected to be highly effective in achieving offsetting changes in fair value or cash flows attributable to the hedged risk
(v) Fair Value Hedge :
• The changes in fair value of the hedged item that is attributable to the risks hedged with the hedged instrument is reflected as an adjustment to the carrying value of the hedged item and is recognized in the statement of profit and loss
• The changes in fair value of the hedging instrument are also recognized in the statement of profit and loss
(vi) Cash Flow Hedge
• The changes in fair value of the hedged item that is attributable to the risks hedged with the hedged instrument is reflected as an adjustment to the carrying value of the hedged item and is recognized in the statement of profit and loss
IL&FS Financial Services Limited Annual Report 2017 1 5 7


• The fair value of the hedging instrument is initially recognized in equity. Subsequently the effective portion of the change in the fair value of the hedged item is recycled from equity to statement of profit and loss
• In case where cash flow hedge materializes, the associated gain or loss on the hedge instrument is transferred from equity to the statement of profit and loss
(vii) All other derivative contracts which do not qualify for Hedge Accounting are marked-to-market based on the category of the contracts and changes in the fair value are recognised in the Statement of Profit and Loss
(viii) The Group discontinues hedge accounting when it determines that a derivative is not, or has ceased to be, highly effective as a hedge:
• when the derivative has expired or is terminated;
• when the hedged item is repaid or
• when a forecast transactions are no longer deemed highly probable
(ix) Premium received upfront on equity options written by the Group is accounted as a liability. Premium paid on equity options bought by the Group is accounted as Loans and Advances
(x) Initial margin paid on Equity Futures is recognized as Loans and Advances
(l) Redemption Premium
The premium payable on redemption of preference shares is applied out of the securities premium account on the contractual redemption dates
(m) Revenue recognition
Revenue is recognised to the extent it is probable that economic benefits will flow to the Group and the revenue can be reliably measured. In addition, the following criteria must be met before revenue is recognised:
(i) Interest and other dues on Lending is recognized on accrual basis, except in case of Non-Performing Assets (NPA’s), wherein income is recognized on realization of the same. NPA’s are determined in accordance with the Guidelines issued by the Reserve Bank of India
(ii) Income on Discounted Instruments is recognized over the tenor of Instrument on Straight line basis
(iii) Upfront fee received, directly related to the Loans disbursed to borrowers, is amortised as income on a pro rata basis over the tenor of loan
(iv) Lease income in respect of assets capitalized up to March 31, 2001 is accounted in accordance with the Guidance Note on Accounting for Leases. Lease income in respect of assets capitalized on or after April 1, 2001 is recognised as per Accounting Standard 19 (AS-19) – Leases
1 5 8
IL&FS Financial Services Limited Annual Report 2017


(v) Income on services provided in the nature of Corporate Advisory, Debt Structuring & Distribution, Project Finance and other services fee based income is recognized on an accrual basis on completion of services as enumerated in the milestones specified in the relevant mandate letters
(vi) Dividend income is recognized once the unconditional right to receive dividend is established
(vii) Income from investment in units of Private Equity Funds (PEF) is recognized on the basis of the income distributed by the respective PEF
(viii) ProfitorLossonsaleofinvestmentsisdeterminedbasedonweightedaverage cost of investments and is recognized on trade date basis
(ix) Fees received on providing Guarantees and Letter of Comfort is recognised in the Consolidated Statement of Profit and Loss over the period of Guarantee on straight line basis
(x) In respect of servicing fee from number portability services, revenue is recognized on completion of transaction processing
(xi) Brokerage Income is recognised as income on the trade date of transaction
(n) Finance Costs
Interest cost is recognised as expenses in the period in which the cost is incurred. Other finance charges includes Origination fees and other ancillary costs with respect to funds mobilised by the Group which are amortised over the tenure of such borrowings
(o) Employee benefits
(i) Short Term
Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the Group
(ii) Long Term
The Group has both defined-contribution and defined-benefit plans, of which some have assets in special funds or securities. The plans are financed by the Group and in the case of some defined contribution plans by the Group along with its employees
• Defined-contribution Plans
These are plans in which the Group pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees’ Provident Fund, Family Pension Fund and Superannuation Fund. The Group’s payments to the defined contribution plans are reported as expenses in the period in which the employees perform the services that the payment covers
IL&FS Financial Services Limited Annual Report 2017 1 5 9


• Defined-benefit Plans
Expenses for defined-benefit plans are calculated as at the balance sheet date by independent actuaries. These commitments are valued at the present value of the expected future payments, with consideration for calculated future salary increases, using a discount rate corresponding to the interest rate estimated by the actuary having regard to the interest rate on government bonds with a remaining term that is almost equivalent to the average balance working period of employees. Incremental liability based on the projected unit credit method as at the reporting date, is charged to the Consolidated Statement of Profit and Loss. The actuarial gains / losses are accounted in the Consolidated Statement of Profit and Loss
(iii) Other Employee Benefits
Compensated absences which accrue to employees and which can be carried to future periods but are expected to be encashed or availed in twelve months immediately following the period end are reported as expenses during the period in which the employees perform the services that the benefit covers and the liabilities are reported at the undiscounted amount of the benefits after deducting amounts already paid. Where there are restrictions on availment or encashment of such accrued benefit or where the availment or encashment is otherwise not expected to wholly occur in the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit method. The resulting actuarial gains / losses are accounted in the Consolidated Statement of Profit and Loss
(p) Taxation
(i) Income Tax comprises of Current tax and net changes in Deferred Tax Assets or Liability during the year. Current tax is determined at the amount of tax payable in respect of taxable income for the year as per the Income Tax Act, 1961
(ii) The provision for tax has been for each consolidating entity on the basis of the standalone financial statements prepared under Indian accounting standards and has been aggregated for the purpose of Consolidated Financial Statements
(iii) Deferred tax assets and liabilities are recognized for future tax consequences of timing differences between the book profit and tax profit. Deferred tax assets and liabilities, other than carry forward losses and unabsorbed depreciation as computed under the tax laws, are recognized when it is reasonably certain that there will be future taxable income. Deferred tax assets on carry forward losses and unabsorbed depreciation, if any, are recognized when it is virtually certain that there will be future taxable profit. Deferred tax assets and liabilities are measured using substantively enacted tax rates. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Consolidated Statement of Profit and Loss in the year of substantive enactment of the change
1 6 0
IL&FS Financial Services Limited Annual Report 2017


(q) Provisions for Non Performing Assets (NPAs) and Investments
(i) NPAs are identified and categorised according to the Guidelines issued by the Reserve Bank of India (RBI). Provisions are made against sub-standard, doubtful and loss assets at the rates prescribed in the RBI guidelines, unless an accelerated provision / write-off is warranted on a case to case basis where additional risks are identified by the Management
(ii) Provisioning for NPAs is dependent upon, inter alia, whether the NPA is secured or unsecured. Loans are considered as secured, where the Company has valid recourse to assets / recovery by :
 Equitable mortgage of property and / or
 Pledge of shares, units, other securities, and / or
 Hypothecation of assets and / or
 Bank guarantees, corporate guarantees supported by assets, and / or
 Decretal debts where Courts have attached property and / or
 Collateral by way of cash or cash equivalent
(iii) Impairment in the investment portfolio is provided, as per the Guidelines issued by the RBI, unless an accelerated provision / write-off is warranted on a case to case basis
(iv) In respect of Non NBFI activities provision/write off is done based on evaluation by the Management
(v) The Group carries a significant quantum of project finance and investment banking assets in its books. Given the risk profile of such assets and based upon internal risk assessment, the Group creates a provision for general contingency to cover adverse events that may affect the quality of the Group’s assets
(vi) With regard to restructured credit facilities, the Group had followed RBI Circular No.DBS.FID No. C-19 dated March 28, 2001 applicable to All India Term Lending and Refinancing Institutions till January 22, 2014
From January 23, 2014, the Group has adopted RBI Circular No DNBS (PD) No. 272 dated January 23, 2014 applicable to Non-Banking Financial (Non- Deposit Accepting or Holding) Companies. In compliance with above circular, the Group creates provision on all standard restructured accounts. Unrealised income represented by Funded Interest Term Loan (FITL) on standard accounts restructured after January 23, 2014 are fully provided
(vii) RBI has issued a Circular DNBS (PD) CC.No.371/03.05.02/2013-14 on March 21, 2014 for the purpose of Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders and consequential accelerated provisioning for non-compliance of the process. As per the above Circular, the Group is required to categorize its exposure as Special Mention Account (SMA) based on the past due status, initiate the process for formation of Joint Lender Forum (JLF) and arrive at Corrective Action Plan (CAP). The Group has adopted this policy where the Group is obligated to and has control over the above process
IL&FS Financial Services Limited Annual Report 2017 1 6 1


(viii) Provision for Standard Assets is made at 0.35% on the outstanding standard assets in accordance with RBI guidelines
(r) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when the Group has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimates. A contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent Assets are neither recognised nor disclosed in the Consolidated Financial Statements
(s) Project Development Expenses / Capital Work In Progress
The project related expenses by the Group, till the date of balance sheet have been accounted under the head Project Development Expenses / Work in progress and have been reflected on the Assets side of the Balance Sheet
(2) SHAREHOLDERS’ FUNDS
(a) The details of the Authorised, Issued, Subscribed and paid-up Share Capital is as below: (` in million)
Particulars
Authorised Share Capital
300,000,000 Equity shares of ` 10 per share
1,000,000 Non-convertible Redeemable Cumulative Preference Shares (NCRCPS) of ` 7,500/-each
Issued, Subscribed and fully paid-up
265,667,555 Equity Shares of ` 10 per share fully paid-up
166,666 Non-Convertible Redeemable Cumulative Preference Shares (NCRCPS) of ` 7,500/-each
As at March 31, 2017
3,000.00
7,500.00
10,500.00
2,656.68 1,249.99
As at March 31, 2016
3,000.00 7,500.00
10,500.00
2,656.68 1,249.99
3,906.67
Total 3,906.67
(b) Details of movement of Equity Shares is as under:
Particulars
Opening Balance
Add : Allotment made during the year
Closng Balance
Number of Shares at March 31,
2017
265,667,555
-
265,667,555
2016
265,667,555
-
265,667,555
(c) The Company has one class of equity shares having a par value of ` 10 per share. Each shareholder is eligible for one vote per share held. The shares are entitled to interim dividend if proposed by the Board of Directors. The final dividend is subject to approval of the shareholder in the Annual General Meeting
162 IL&FS Financial Services Limited Annual Report 2017


(d) Details of movement of NCRCPS is as under:
Particulars
Opening Balance
Add : Allotment made during the year
Closing Balance
Number of Shares at March 31,
2017 2016
166,666 -
- 166,666
166,666 166,666
(e) The terms of NCRCPS issued and subscribed are as under:
Rate of Dividend for Category I and Category II Investors
Additional Dividend on preference shares held by Category II Investors
Category I Investors mean investors which does not fall into category II investors
Category II Investors mean Resident Individuals, Hindu Undivided Families, Partnership Firms, Private Family Trusts with one or more beneficiaries being individual and Employee Welfare Trusts
Tenure
Issue Proceeds
Date of Allotment Redemption Date Redemption Value
Voting Rights
Seniority
17.00% p.a. on face value of NCRCPS payable on March 31, every year or 17.39% p.a. if paid on July 31
1.89% p.a. on face value of NCRCPS payable on March 31, every year or 1.98% p.a. if paid on July 31
5 years
Face Value of ` 7,500/- per NCRCPS plus Share
Premium of ` 7,500/- per share
March 30, 2016
March 30, 2021
Face Value of ` 7,500/- per NCRCPS plus Redemption Premium of ` 7,500/- per share
Right to vote on resolutions as holders of NCRCPS, as per the provisions of Companies Act, 2013 and Articles of Association. If the Company fails to pay the dividend for a period of two years or more, preference shareholders have the right to vote on all resolutions placed before the Company
Senior to all equity shares and rank paripassu interse among all classes of preference shares currently existing or established hereafter, with respect to (a) dividend distribution and (b) repayment of capital upon a liquidation of the Company
IL&FS Financial Services Limited Annual Report 2017 1 6 3


(f) The entire equity shareholding of the Company is held by Infrastructure Leasing and Financial Services Ltd (IL&FS) and its nominees
(g) List of shareholders holding more than 5% of NCRCPS as on March 31, 2017 is as under
Name of Shareholder
Shree Cement Ltd Sanjeev Kumar Juneja
(h) Reserves and Surplus comprises of :
Particulars
Capital Reserve on Consolidation
Cash Flow Hedge Reserve
Foreign Exchange Translation Reserve Surplus in Statement of Profit and Loss
(i) Details of addition and deletion in Securities Premium are as below:
(` in million)
Securities Premium Account Special Reserve I
Special Reserve II
General Reserve
Number of Shares
33,400
13,333
As at March 31, 2017
9,681.08 4,929.01
Holding (%)
20.04
8.00
(` in million)
As at March 31, 2016
9,681.08 4,511.45
187.65 2,066.94 12.50 - 88.32 2,464.61 19,012.55
223.65 2,066.94 12.50 (4.69) 53.51 3,175.98 Total 20,137.98
Particulars Opening Balance
Add: Premium received on issue of NCRCPS Less: Utilised for writing off share issue Closing Balance
As at March 31, 2017
9,681.08 - - 9,681.08
As at March 31, 2016
8,503.48 1,250.00 72.40 9,681.08
164 IL&FS Financial Services Limited Annual Report 2017


(j) Special Reserve I is created pursuant to under Section 45-IC of the Reserve Bank of India Act, 1934. Details of the movement in the Special Reserve I are as below: (` in million)
Particulars Opening Balance
Addition:
Transferred from Statement of Profit and Loss Closing Balance
As at March 31, 2017
4,511.45
417.56 4,929.01
As at March 31, 2016
4,125.89
385.56 4,511.45
(k) Special Reserve II has been created in terms of Section 36 (1)
Tax Act, 1961 out of the distributable profits of the Group.
management, it is expected that utilization of the reserve is not likely to happen and accordingly deferred tax liability is not created on the reserve. The details of movement in the Special Reserve II is as below :
Particulars Opening Balance
Addition:
Transferred from Statement of Profit and Loss Closing Balance
As at March 31, 2017
187.65
36.00 223.65
(` in million) As at March
31, 2016 146.65
41.00 187.65
(viii) of Income In view of the
(l) Details of movement in the General Reserve are as below :
Particulars
Opening Balance
Addition:
Adjustment on reversal of dividend Transferred from Statement of Profit and Loss Closing Balance
(` in million) As at March As at March
31, 2017 31, 2016 2,066.94 2,066.87
- (0.05)
- 0.12 2,066.94 2,066.94
IL&FS Financial Services Limited Annual Report 2017 1 6 5


(m) Details of movement in the Capital Reserve on Consolidation are as below :
(` in million)
Particulars Opening Balance
Add / (Less) : During the year
Closing Balance
As at March 31, 2017
12.50 -
12.50
As at March 31, 2016
12.50 -
12.50
(` in million) As at March
31, 2016
-
-
-
-
(n) Details of movement in Cash Flow Hedge Reserve is as below :
Particulars As at March 31, 2017
Opening Balance - Loss recognized during the year (13.69)
Transferred to Statement of Profit and Loss 9.00 under Finance Cost
Closing Balance (4.69)
(o) Details of the addition and deletion to the Foreign Exchange Translation Reserve are as below :
Particulars Opening Balance
(Less) / Add : During the year
Closing Balance
As at March 31, 2017
88.32 (34.79)
53.51
(` in million) As at March
31, 2016 55.22
33.10
88.32
1 6 6
IL&FS Financial Services Limited Annual Report 2017


(p) The Surplus in Statement of Profit and Loss is arrived at as per the table below: (` in million)
Particulars Opening Balance
Profit for the Year
Less: Appropriations
Proposed Dividend on Equity Shares
Tax on Dividend on Equity Shares
Proposed Dividend on Preference Shares
Tax on Dividend on Preference Shares
Interim Dividend on Equity Shares
Tax on Interim Dividend on Equity Shares Towards Dividend on Preference Shares
Tax on Dividend on Preference Shares
Interim Dividend on Preference Shares
Tax on Interim Dividend on Preference Shares Distribution
Other Consolidation Adjustments
Balance Transferred to :
General Reserve
Special Reserve I
Special Reserve II
Closing Balance
As at March 31, 2017
2,464.61 2,262.44
- - - -
664.51 137.92 232.62
47.35 29.61 10.41
(24.91)
- 417.56 36.00 3,175.98
As at March 31, 2016
2556.37 1,970.46
1,328.34 270.42 1.23 0.25 - - - - 17.52 8.90
8.87
0.13 385.56 41.00 2,464.61
(q) The Board of Directors of the Company in its meeting held on March 29, 2017, had declared and paid interim dividend @ 25% i.e. ` 2.5/- per equity share of ` 10 each fully paid up aggregating to ` 799.37 mn (inclusive of dividend distribution tax of ` 135.20 mn)
(r) The Board of Directors of the Company have proposed final dividend of ` 2.5/-
IL&FS Financial Services Limited Annual Report 2017 1 6 7


per equity share aggregating to ` 799.37 mn (inclusive of dividend distribution tax of ` 135.20 mn), for the year ended March 31, 2017, which is subject to approval of shareholders. However, pursuant to revised Accounting Standard (AS) 4 – Contingencies and Events After Balance Sheet Date, final dividend declared after the balance sheet date but before the approval of Financial Statements, is not recognised as a liability at the balance sheet date as no obligation exist on that date
(s) Amount appropriated towards Preference Dividend represents preference share dividend payable pursuant to contractual terms agreed with the preference shareholders
1 6 8
IL&FS Financial Services Limited Annual Report 2017


IL&FS Financial Services Limited Annual Report 2017 1 6 9
(3) BORROWINGS
(a) Borrowings Outstanding:
(` in million) Total
Particulars
As at March 31, 2017 Long-term
As at March 31, 2016 Long-term
Secured
Debentures - Term Loan From Banks 8,000.00 Demand Loan From Banks 2,445.91 Collateralized 698.68 Borrowings (CBLO)
2,249.00 20,265.90 - -
26,347.50 48,185.10 - -
28,596.50 76,451.00 2,445.91 698.68
- 4,011.60 2,410.80 1,598.65
2,410.00 16,229.17 - -
17,046.50 49,050.00 - -
19,456.50 69,290.77 2,410.80 1,598.65
11,144.59 Subordinated Debt -
22,514.90 - -
74,532.60 10,000.00
108,192.09
8,021.05 -
18,639.17 - -
66,096.50 9,000.00 -
92,756.72 9,000.00
Unsecured
(Tier II Capital)
Debentures -
6,000.00 - -
6,000.00 1,000.00 111.61
- 1,000.00 -
- 1,000.00 -
Term Loan From Banks Demand Loan From Banks
Inter Corporate Deposit From Others Inter Corporate Deposit From Related Parties (Refer Note 24) Commercial Papers (Gross)
1,000.00 111.61
- -
- -
- -
Less : Unexpired Discount
(417.49)
-
-
(749.80)
-
-
Total
31,859.01 43,003.60
1,460.00 23,974.90
16,544.03 91,076.63
49,863.04 158,055.13
39,626.64 47,647.69
2,835.47 21,474.64
9,642.50 75,739.00
52,104.61 144,861.33
Short- term
Current Portion
Non- Current
Total
Short-term
Current Portion
Non- Current
9,956.95 1,057.94
1,460.00 -
544.03 -
11,960.98 1,057.94
2,205.76 10,270.68
981.05 1,854.42
542.50 100.00
3,729.31 12,225.10
20,150.00
-
-
20,150.00 (417.49)
26,900.00
-
-
26,900.00 (749.80)
10,000.00


Secured Borrowings:
(b) The details of Secured Non-Convertible Debentures(NCDs) issued on private placement basis are as below
Debenture Series
2017 Series XVII 2017 Series XV 2017 Series XII
2017 Series XI
2017 Series VIII
2016 Series VI
2016 Series V
2014 Series II
2014 Series I
2017 Series IV
2017 Series III
2016 Series V
2012 Series IV
2017 Series XIV
2017 Series IX
2017 Series VIII
2017 Series VII
2017 Series VI
2017 Series IV
2017 Series III 2017 Series II 2017 Series I 2016 Series VI 2016 Series V 2016 Series II 2017 Series X 2014 Series III 2014 Series II 2014 Series I 2017 Series III 2017 Series I 2016 Series IV 2016 Series V 2016 Series II 2013 Series VI
Number of NCDs Issued
500,000
350,000
1,000,000
600,000
1,000,000
700,000
510,000
60,000
470,000
300,000
110,000
580,000
500,000
1,000,000
1,000,000
250,000
750,000
250,000
1,000,000
290,000
500,000
550,000
50,000
900,000
180,000
1,000,000
2,000,000 372,500 2,530,000 50,000 150,000 500,000 250,000 370,000 1,075,000
Number of NCDs outstanding as on (`)
March 31,
2017 2016
500,000 - 1,000
350,000 - 1,000
1,000,000 - 1,000
600,000 - 1,000
1,000,000 - 1,000
700,000 700,000 1,000
510,000 510,000 1,000
60,000 60,000 1,000
470,000 470,000 1,000
300,000 - 1,000
110,000 - 1,000
580,000 580,000 1,000
500,000 500,000 1,000
1,000,000 - 1,000
1,000,000 - 1,000
250,000 - 1,000
750,000 - 1,000
250,000 - 1,000
1,000,000 - 1,000
290,000 - 1,000
500,000 - 1,000
550,000 - 1,000
50,000 50,000 1,000
900,000 900,000 1,000
180,000 180,000 1,000
1,000,000 - 1,000
2,000,000 2,000,000 1,000 372,500 372,500 1,000 2,530,000 2,530,000 1,000 50,000 - 1,000 150,000 - 1,000 500,000 500,000 1,000 250,000 250,000 1,000 370,000 370,000 1,000 1,075,000 1,075,000 1,000
Face Value Interest Earliest Rate Redemption
(%)
8.50% 8.50% 8.51%
8.75%
8.90%
8.85%
8.85%
9.55%
9.50%
8.80%
8.75%
8.90%
9.54%
8.22%
8.60%
8.75%
8.65%
8.78%
8.78%
8.75% 8.75% 8.75% 8.90% 8.90% 8.90% 8.54% 9.65% 9.60% 9.50% 8.75% 8.75% 8.88% 8.90% 8.90% 9.90%
Date
20-Feb-27 30-Sep-26 12-Sep-26
16-Aug-26
01-Aug-26
31-Mar-26
28-Mar-26
28-Aug-24
03-Jul-24
21-Jun-23
14-Jun-23
28-Mar-23
28-Sep-22
28-Sep-21
05-Aug-21
01-Aug-21
18-Jul-21
28-Jun-21
21-Jun-21
14-Jun-21 09-Jun-21 03-Jun-21
31-Mar-21 28-Mar-21 21-Mar-21 08-Nov-19 18-Sep-19 28-Aug-19
03-Jul-19 14-Jun-19 03-Jun-19
15-May-19 28-Mar-19 21-Mar-19
28-Jan-19
1 7 0
IL&FS Financial Services Limited Annual Report 2017


Debenture Series
2017 Series I 2015 Series I 2013 Series I 2013 SeriesII 2017 Series V 2012 Series VI 2014 Series III 2012 Series III 2012 Series II
Number of NCDs Issued
150,000 1,500,000 1,750,000
500,000 750,000 289,000 460,000 500,000
1,000,000
Number of NCDs outstanding as on March 31,
Face Value Interest
Earliest Redemption Date
03-Dec-18 30-Sep-18 17-Sep-18
28-Aug-18 27-Jun-18 07-Jan-18 18-Sep-17 03-Sep-17
13-Aug-17
2017
150,000 1,500,000 1,750,000
500,000 750,000 289,000 460,000 500,000
1,000,000
2016
- 1,500,000 1,750,000 500,000 - 289,000 460,000 500,000 1,000,000
(`)
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Rate (%)
8.75%
8.70% 10.50% 10.50%
ZCB 9.60% 9.65% 9.75% 9.75%
(c) The Company has the right to buy-back and re-issue Debentures before expiry of their tenor or maturity date, as per the terms of the issue. As at March 31, 2017 there are no such outstanding buy-back Debentures
(d) Age-wise analysis and Repayment terms of the Group’s Non-Current Secured Term Loans from Banks are as below:
Previous year figures are in (bracket) (` in million)
Rate of Interest
7.00% to 9.00%
9.01% to 11.00%
Total
1-2 years
250.00
2-3 Years
2,247.50
3-4 4-5 Years Years
62.50
> 5 Years
Total
2,560.00
Frequency of repayment*
Q, MT,Y,HY
Q, MT,Y,HY
------
20,791.50 11,958.60 8,125.00 4,500.00 250.00 45,625.10
(19,858.20) (17,708.20) (7,133.60) (4,350.00) - (49,050.00)
21,041.50 14,206.10 8,187.50 4,500.00 250.00 48,185.10
(19,858.20) (17,708.20) (7,133.60) (4,350.00) - (49,050.00)
-
-
*MT= Bullet payment on Maturity, Y=Yearly Installment, HY=Half-yearly Installment Q=Quarterly Installment. Interest Repayment Frequency : Monthly and quarterly
(e) All Secured borrowings of the Groups (except CBLO borrowing) are covered under a pari-passu first charge on all the assets, excluding own Tangible Fixed Asset and Intangible Assets, Trading Portfolio (current investments), Investment in Subsidiaries and Affiliates, Tax Assets, Deferred Tax Assets and unamortized expenses. Secured borrowing includes certain loans, where security creation is under process
IL&FS Financial Services Limited Annual Report 2017 1 7 1


(f) CBLO of ` 698.68 mn (As at March 31, 2016- ` 1,598.65 mn) are secured by Government securities held as part of Investment portfolio
(g) Details of Subordinated Debt comprises of 10,000,000 Unsecured Redeemable Non-Convertible Debenture (NCD) issued on private placement basis
Debenture Series
2017 Series XIII 2016 Series III 2016 Series I
2012 SeriesVII
2012 Series V
2012 Series I 2011 Series II 2011 Series I
Number of NCDs issued
1,000,000
650,000
350,000
1,000,000
1,000,000
2,000,000
2,000,000 2,000,000
Number of NCDs outstanding as on (`)
Earliest Redemption Date
29-Sep-26 22-Mar-26 27-Jan-26
28-Feb-23
27-Nov-22
29-Jun-22
22-Mar-22 28-Dec-21
March 31,
(%)
8.69% 9.03% 8.90%
9.55%
9.55%
10.15%
10.30% 10.30%
Face Value Interest Rate
2017
1,000,000
650,000
350,000
1,000,000
1,000,000
2,000,000
2,000,000 2,000,000
2016
650,000 1000
350,000 1000
1,000,000 1000
1,000,000 1000
2,000,000 1000
2,000,000 1000 2,000,000 1000
- 1000
(h) The details of Un-secured Non-Convertible Debentures(NCDs) issued on private placement basis are as below
Debenture Series
2017 Series XVI 2017 Series XVI 2017 Series XVI 2017 Series XVI
Number of NCDs issued
500,000
1,000,000
1,500,000
3,000,000
Number of NCDs outstanding as on March 31,
Face Value Interest (`) Rate
(%)
1000 8.68%
1000 8.68%
1000 8.65%
Earliest Redemption Date
06-Dec-26 06-Dec-23 06-Jun-22 06-Dec-21
2017
500,000
1,000,000
1,500,000
3,000,000
2016
-
-
-
- 1000 8.65%
1 7 2
IL&FS Financial Services Limited Annual Report 2017


(i) Age-wise analysis and Repayment terms of the Group’s Non-Current Unsecured Borrowings from Others are as below:
Previous year figures are in (brackets) (` in million)
Rate of Interest
7.00% to 9.00%
9.01% to 11.00%
Total
(250.00)
Interest Repayment Frequency : Monthly
(4) OTHER CURRENT AND LONG-TERM LIABILITIES
1-2 years 2-3 Years
Total
248.53
(-)
295.50
Frequency of Repayment
Bullet payment on Maturity
Bullet payment on Maturity
(` in million)
As at March 31, 2016 Current Long-term
1,486.20 2.79
258.01 68.59
71.75 7.11
- 26.08
37.29 -
15.95 -
- 285.69 40.00 -
- -
54.86 22.24 1,964.06 412.50
-
(-)
292.50
(250.00)
292.50
248.53
(-)
3.00
(292.50) (542.50)
251.53 544.03
(292.50) (542.50
Particulars
Interest accrued but not due
Income Received in Advance
Security Deposits Received
Preference Shares issued by Joint Venture to outside Group
Statutory Dues Payable
Interim Dividend Payable
Advances Received for Projects
Bank Guarantee Encashed (Refer Note 16 (c))
Advance received for allotment of equity
As at March 31, 2017
Current
2,305.72
366.18
-
-
30.36
-
10.80 40.00
-
Long-term
100.53
73.85
3.13
26.08
-
-
81.92 -
275.72
- 561.23
Others 60.30 Total 2,813.36
Footnote: No amount of unclaimed dividend and unclaimed interest was due for transfer to Investor Education and Protection Fund u/s 125 of Companies Act, 2013 as at the balance sheet date
IL&FS Financial Services Limited Annual Report 2017 1 7 3


(5)
SHORT-TERM AND LONG-TERM PROVISIONS
(a) Break-up of the Provisions are as below:
Particulars
I. For Loans and Advances
Standard Assets
Non- Performing Assets Standard Restructured Assets Other Provisions*
II.For Investments
Diminutioninvalueof Investments Mark to Market on Derivatives
III.Others
Employee Benefits
Provision for Income Tax (net)
Proposed Equity Dividend
Dividend Distribution Tax on above
Appropriated towards Preference Dividend
Appropriated towards Dividend Distribution Tax on Preference Dividend
General Contingencies
Total
As at March 31, 2017
(` in million)
As at March 31, 2016
Short-term
-
1,093.80
-
-
740.14
0.96
252.59
27.39
-
-
232.62
47.41
-
2,394.91
Long-term
425.00
-
112.94
330.76
2,274.01
-
58.73
-
-
-
-
-
4,500.00
7,701.44
Short-term
-
687.99
-
-
547.68
-
299.58
261.77
1,328.34
270.42
1.23
0.31
-
3,397.32
Long-term
370.00 - 126.76 307.14
1,862.52 -
55.25 - - -
-
-
3,600.00
6,321.67
*other provisions represent provision for ((Refer Note 19 (a)):
Particulars
Interest sacrifice on restructured advances Funded Interest Term Loans classified as
- Non – Performing Assets
- Standard Assets
Total
As at March 31, 2017
136.32
98.84
95.60 330.76
(` in million)
As at March 31, 2016
145.79
65.81
95.54 307.14
1 7 4
IL&FS Financial Services Limited Annual Report 2017


(b) Contingent Provision against Standard assets aggregating ` 425 mn (As on March 31, 2016- ` 370 mn) represents provision made pursuant to Reserve Bank of India circular DNBS.PD.CC.No.207/ 03.02.002 /2010-11 issued on January 17, 2011 requiring all NBFCs to make a provision of 0.35% on the outstanding standard assets:
Particulars
Opening Balance
Provision made during the year
Closing Balance
As at March 31, 2017
370.00
55.00
425.00
(` in million)
As at March 31, 2016
250.00
120.00
370.00
(c) In accordance with the Guidelines issued by the RBI, the Group has made provision for non-performing assets. The details of movement in provision for non-performing assets is as follows:
Particulars
Opening Balance
Provision made during the year
Non-Performing Assets Written off against provision
Closing Balance
As at March 31, 2017
687.99
405.81
-
1,093.80
(` in million)
As at March 31, 2016
462.98
589.71
(364.70)
687.99
(d) Following table summarises movement in Provision for General Contingencies
(` in million)
Particulars
Opening Balance
Provision made during the year
Closing Balance
As at March 31, 2017
3,600.00
900.00
4,500.00
As at March 31, 2016
2,400.00
1,200.00
3,600.00
IL&FS Financial Services Limited Annual Report 2017 1 7 5


(e) The details of movement in provision for diminution in value of investments is as follows: (` in million)
Particulars
Opening Balance
Provision made during the year
Closing Balance
Provision for
Short-term As at March 31
Long-term As at March 31
(f) Provision against Standard Restructured Accounts aggregating ` 112.94 mn (As on March 31, 2016- ` 126.76 mn) represents provision made pursuant to Reserve Bank of India circular No DNBS (PD) No. 272 dated January 23, 2014
2017
547.68
193.42
741.10
2016
462.65
85.03
547.68
2017
1,862.52
411.49
2,274.01
2016
1,618.41
244.11
1,862.52
Particulars
Opening Balance
Provision written back during the year
Closing Balance
As at March 31, 2017
126.76
(13.82)
112.94
(` in million)
As at March 31, 2016
132.53
(5.77)
126.76
(g) Disclosure as required under AS- 15 – “Employee Benefits”:
(i) The Group has recognized ` 19.30 mn (Previous Year ` 18.88 mn) and ` 11.94 mn (Previous Year ` 10.39 mn) in Statement of Profit and Loss under Company’s Contribution to Provident Fund and contribution to Superannuation fund respectively
(ii) The Group operates funded post retirement defined benefit plans for gratuity, details for which are as follows
I. Assumption
Discount Rate
Rate of Return on Plan Assets
Salary Escalation Mortality
As at March 31, 2017
7.09%-7.33% 7.39%-8.00%
6.50%-8.50%
Indian Assured Lives Mortality (2006-08)
As at March 31, 2016
7.72%-8.08% 7.72%-8.08%
5.50%-11.00%
Indian Assured Lives Mortality (2006-08)
1 7 6
IL&FS Financial Services Limited Annual Report 2017


II. Table Showing Change in Defined Benefit Obligation
Opening Defined Benefit obligation Interest Cost
Current Service Cost
Liabilities Transferred In
Liabilities Transferred Out
Benefit Paid
Actuarial loss on obligations
Closing Defined Benefit obligation
III. Table of Fair Value of Plan Assets
Fair Value of Plan Assets at the start Expected Return on Plan Assets
As at March 31, 2017
116.22
9.57
16.82
13.08
(3.63)
(10.45)
1.68
143.29
As at March 31, 2017
81.69
8.04
(` in million)
As at March 31, 2016
80.27
6.43
10.20
(0.28)
-
(3.01)
22.61
116.22
(` in million)
As at March 31, 2016
72.78
6.31
7.14
0.15
(0.81)
(1.80)
(2.08)
81.69
(` in million)
As at March 31, 2016
6.31
(2.08)
4.23
million)
As at March 31,2013
57.15
53.08
4.07
4.07
Contributions 42.96
Transfer from other Company
Transfer to other Company
Benefit Paid
Actuarial gain/(loss) on Plan Assets
Fair Value of Plan Assets at the end
IV. Actual Return on the Plan Assets
13.08
(2.82)
(2.54)
6.90
147.31
As at March 31, 2017
Expected Return on the Plan Assets Actuarial gain/(loss) on Plan Assets
8.04
6.90
14.94
As at March 31,2015
80.27
72.78
7.49
7.49
V.
Actual Return on Plan Assets
Amount Recognised in the Balance Sheet
Liability at the end of the year
As at March 31,2017
143.29
As at March 31,2016
116.22
81.69
(` in
As at March 31,2014
56.72
56.09
0.63
0.63
Fair Value of Plan Assets at the end 147.31
Shortfall/(Excess) (net) (4.02) 34.53 Amount Recognised in Balance - 34.53 Sheet
IL&FS Financial Services Limited Annual Report 2017
1 7 7


VI. Reconciliation of the Liability Recognised in the Balance Sheet
Opening Net Liability Expense Recognised Liability Transfer In Liability Transfer Out
Contribution / benefits paid by the group
Amount recognised in Balance Sheet
VII.Expenses Recognised in the Statement of Profit and Loss
Current Service Cost
Interest Cost
Expected Return on Plan Assets
Actuarial (Gain)/loss
Expense Recognised in Statement of Profit and Loss
As at March 31, 2017
34.53
18.241
-
0.81
50.87 1.09
As at March 31, 2017
16.82
9.57
(8.04)
(5.21)
13.141
(` in million)
As at March 31, 2016
5.84
35.01
(0.82)
-
7.14 34.53
(` in million)
As at March 31, 2016
10.20
6.43
(6.31)
24.69
35.01
1 The expenses recognised and paid by the group accounted in the statement of profit and loss is ` 18.24 mn. The actuarial expense is ` 13.14 mn, thereby the excess amount of ` 5.10 mn has not been accounted as prepaid expense on grounds of prudence
VIII. Experience Adjustment
Defined Benefit Obligation
Plan Assets
Asat March 31,2017
143.29
147.31
As at March 31,2016
116.22
81.69
(34.53)
As at March 31,2015
80.27
72.78
(7.49)
(3.31)
6.26
(` in
As At March 31,2014
56.72
56.09
(0.63)
25.30 (8.36)
million)
As At March 31,2013
57.15
53.08
(4.07)
(2.18) 0.91
Surplus/(Deficit) 4.02
Experience adjustment on Plan 8.24 (3.62) Liability
Experience adjustment on Plan 6.90 2.16 Asset
1 7 8
IL&FS Financial Services Limited Annual Report 2017


IX. Description of Plan Assets As at March 31, 2017
Insurer Managed Funds 100%
As at March 31, 2016
100%
*Footnote:- The above disclosure does not include details of its four foreign subsidiary companies, five trust and two domestic subsidiary companies as the same is not applicable to these entities
(iii) Other Details:
The Employer’s best estimate of the contributions expected to be paid to the plan assets during the next 12 months is ` 10.00 mn (Previous year: ` 9.21 mn)
The estimates of salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other factors. The above information is certified by the actuary and relied upon by the Auditors
(6) TRADE PAYABLES
Based on information received by the Group from its suppliers regarding their status under the Micro, Small and Medium Enterprises (MSME) Development Act, 2006; details of amount due to such vendors is as below:
No Particulars As at March 31, 2017
(i) Principal Amount Outstanding 0.21
(ii) Interest due on above and unpaid -
(iii) Interest due and payable for the period of delay -
(iv) Interest accrued and remaining unpaid -
(` in million) As at March
31, 2016 - - - -
IL&FS Financial Services Limited Annual Report 2017
1 7 9


1 8 0 IL&FS Financial Services Limited Annual Report 2017
(7) PROPERTY, PLANT & EQUIPMENT For the year ended March 31, 2017
(` in million)
Description of Assets
Gross Block (At Cost)
Depreciation/Amortisation
Lease Terminal Adjustment
Net Block
TANGIBLE ASSETS
Assets Given on Lease
Data Processing Equipments
Vehicles 8.93 - -
- (8.33) (224.61)
126.59 2.34 708.60
- - -
- 5.63 0.14
- (7.52) (224.61)
Plant & Machinery
1,613.44 - -
Own Assets
Office Premises
Leasehold Land
Lease Improvements
Data Processing Equipments Furniture and Fixtures
11.31 - - 360.00 - - 45.97 (1.78) 146.47 52.04 (2.66) 4.27 34.48 (2.01) 7.80
-
11.31 360.00 190.63
1.82 - 41.62 41.92 16.68
-
0.29 - 10.64 5.92 3.87
-
2.11 - - - 50.89 - 40.26 - 19.66 -
9.20 360.00 139.74 7.51 20.55
Office Equipments Plant & Machinery Electrical Fittings Total (A)
11.33 (0.48) 2.14 1.65 - - 12.99 (0.51) 1.49 2,309.56 (7.44) 162.17
(1.35) - (0.18) (240.44)
11.64 1.65 13.79 2,223.85
9.28 0.46 4.67
(0.39) - (0.09) (4.67)
2.10 0.11 1.56
(1.30) - (0.13) (239.21)
9.69 - 0.57 - 6.01 -
1.95 1.08 7.78
INTANGIBLE ASSETS
Licensed Software Website Development Total (B)
46.13 (0.64) 3.60 1.25 - - 47.38 (0.64) 3.60
(0.21) - (0.21)
48.88 1.25 50.13
34.31 1.09 35.40
(0.46) - (0.46)
6.96 0.06 7.02
(0.17) - (0.17)
40.64 - 1.15 - 41.79 -
8.24 0.10 8.34
As at April Adjust- Additions 1, 2016 ments*
Deductions
As at March 31, 2017
As at April 1, 2016
Adjust- ments
For the Year**
Deductions
AsatMarch AsatMarch 31, 2017 31, 2017
As at March 31, 2017
157.42 - -
157.42 0.60 1,388.83
126.59 30.83 0.45 - 484.13 904.00
- 0.15 0.70
- (0.03) (5.88) (0.06)
47.77 40.21
- (1.35) (2.09) (0.75)
- (0.02) (5.49) (0.14)
* Adjustments are on account of the foreign currency translation and includes deductions to Gross Block and Accumulated Depreciation towards sale / cessation of Subsidiaries
** Rs 0.20 Mn capitalized during the year
953.98
30.26
740.36 934.83
548.66


IL&FS Financial Services Limited Annual Report 2017 1 8 1
PROPERTY, PLANT & EQUIPMENT For the year ended March 31, 2016
(` in million)
Description of Assets
Gross Block (At Cost)
Depreciation/Amortisation
Lease Terminal Adjustment
Net Block
TANGIBLE ASSETS
Assets Given on Lease
Data Processing Equipments
Vehicles 8.93 - -
- - -
126.59 2.34 708.46
- - - - - 0.14
- 126.59 - 2.34 - 708.60
Plant & Machinery
1,613.44 - -
Own Assets
Office Premises
Leasehold Land
Lease Improvements
Data Processing Equipments Furniture and Fixtures
11.31 - - 360.00 - - 43.21 1.63 1.13 48.38 0.51 6.96 31.29 0.39 3.20
- - -
11.31 360.00 45.97 52.04 34.48
1.53 - 34.90 39.29 13.17
- 0.29
- 1.82 - - - 41.62
- - - - -
9.49 360.00 4.35 10.12 17.80
Vehicles
Office Equipments Plant & Machinery Electrical Fittings Total (A)
0.14 - - 11.26 (0.09) 1.84 1.33 (0.04) 0.59 12.33 0.09 0.79 2,299.04 2.49 14.51
(0.14) (1.68) (0.23) (0.22)
- 11.33 1.65 12.99 2,309.56
0.01 8.73 0.51 3.33
- 0.00 0.09 2.07 (0.04) 0.10 0.03 1.39 1.73 19.24
(0.01) - (1.61) 9.28 (0.11) 0.46 (0.08) 4.67
- - - -
- 2.05 1.19 8.32 421.34
INTANGIBLE ASSETS
Licensed Software Website Development Total (B)
40.36 0.13 5.64 1.10 - 0.15 41.46 0.13 5.79
- - -
46.13 1.25 47.38
25.95 1.01 26.96
0.05 8.31 - 0.08 0.05 8.39
- 34.31 - 1.09 - 35.40
- - -
11.82 0.16 11.98
As at April Adjust- Additions 1, 2015 ments*
Deductions
As at March 31, 2016
As at April 1, 2015
Adjust- For the ments Year**
Deductions AsatMarch AsatMarch
As at March 31, 2016
* Adjustments are on account of the foreign currency translation ** Rs 0.23 Mn capitalized during the year
157.42 - -
157.42 8.93 1,613.44
30.83 0.32 903.09
- 6.27 1.75
(3.81) (0.40)
- - 1.31 5.41 0.14 6.28 0.20 3.56
(3.79) 41.92 (0.25) 16.68
(6.48)
938.86
(5.85) 953.98
934.24
31, 2016
31, 2016


(8) TAXATION
(a) Details of Tax expenses during the year is as under
Particulars
Current Tax
Adjustment for earlier years MAT Credit Entitlement
Deferred Tax
Tax Expense (net)
(b) Details of Deferred Tax are as follows:
Year ended March 31, 2017
1,554.76
(1.03)
(0.20)
(333.00) 1,220.53
(` in million)
Year ended March 31, 2016
1,744.87
0.05
(2.29)
(392.71) 1,349.92
(i) Details of major components of deferred tax assets arising on account of timings differences as on March 31, 2017 are as below :
As at Created April 01, during the 2016 year
43.94 (17.82)
depreciation
Provisions and Contingencies
Others 21.83 0.68 Deferred Tax Assets (net) 1,663.97 332.86
Adjust- ments*
(0.05)
-
(1.34)
(1.39)
(` in million)
As at March 31, 2017
26.07
1,948.20
21.17
1,995.44
Particulars
Difference between book and tax
1,598.20 350.00
*Adjustment are on account of the foreign currency translation and ` 1.34 mn of IL&FS Infra Asset Management Limited which ceased to be a subsidiary during the year
(ii) Detailsofmajorcomponentsofdeferredtaxassetsarisingonaccountoftimings differences as on March 31, 2016 are as below:
As at April 01, 2015
49.40
depreciation
Provisions and Contingencies
Others 34.13 Deferred Tax Assets (net) 1,271.16
Created during the
(` in million)
Adjust- As at
Particulars
Difference between book and tax
ments* March 31, year 2016
1,187.63
(5.53)
410.57
(12.30)
392.74
0.07 43.94
- 1,598.20
- 21.83
0.07 1,663.97
*Adjustment are on account of the foreign currency translation
1 8 2
IL&FS Financial Services Limited Annual Report 2017


(iii) Details of major components of deferred tax liabilities arising on account of timings differences as on March 31, 2017 are as below :
Particulars
Difference between book and tax depreciation
Deferred Tax Liabilities (net)
As at April 01, 2016
0.43
0.43
Created/
(Utilised) during the
year
(0.13)
(0.13)
Adjust- ments*
(0.06)
(0.06)
(` in million)
As at March 31, 2017
0.24
0.24
*Adjustment are on account of the foreign currency translation
(iv) Details of major components of deferred tax liabilities arising on account of timings differences as on March 31, 2016 are as below :
Particulars
Difference between book and tax depreciation
Deferred Tax Liabilities (net)
As at April 01, 2015
0.38
0.38
Created (Utilised) during the year
0.04
0.04
Adjust- ments*
0.01
0.01
(` in million)
As at March 31, 2016
0.43
0.43
*Adjustment are on account of the foreign currency translation
(v) Deferred Tax assets (net) include ` 1.30 mn (Previous year ` 1.01 mn) share of JCE
IL&FS Financial Services Limited Annual Report 2017 1 8 3


(9)
NON-CURRENT INVESTMENTS
(a) Summary of Non-Current Investments is as below :
Particulars
Investment in Associates*
Trade Investments
Equity Shares
Preference Shares
Units of Mutual Funds
Other Investments
Equity Shares
Preference Shares
Units of Other Funds
Security Receipts Investment Property Debentures and Bonds Units of Mutual Fund Pass Through Certificates
Total
As at March 31, 2017
29.49
2,856.38
2,073.99
1,704.00
6,634.37
7,523.35
1,491.10
4,053.50
19.29
4,129.96
4,247.58
10.00
0.16
21,474.94
28,138.80
(` in million)
As at March 31, 2016
29.96
2,621.34
2,073.96
2,160.00
6,855.30
8,069.61
1,489.42
4,045.59
-
3,833.24
4,707.74
10.00
0.16
22,155.76
29,041.02
* Investment in Associate net of Capital Reserve: ` 83.52 mn (Previous Year ` 83.52 mn) arising at the time of acquisition of associate
(b) Market Value of Quoted Investment and Cost of Unquoted Non Investments
Particulars
Quoted Investment
Aggregate Market Value Cost (a)
Unquoted Investment
Cost (b)
Total (a)+(b)
Year ended March 31, 2017
4,123.30
4,459.60
23,679.20 28,138.80
(` in million)
Year ended March 31, 2016
4,302.19
5,628.53
23,412.49 29,041.02
(c) With respect to the Company investments in IL&FS Engineering & Construction Company Ltd (IECCL) the Ultimate Holding Company acquired management control of IECCL vide orders of the Company Law Board (CLB) dated August 31, 2009, in order to protect the credit exposure of the Company to IECCL. Towards this objective, the Company had subscribed to the preferential allotment of shares in IECCL. Such exposure is exclusively to protect the interest of the Company and optimize return on asset and does not form part of a strategy to acquire and retain long term assets /investments
1 8 4
IL&FS Financial Services Limited Annual Report 2017


(d) Provision of ` 42.56 mn (As at March 31,2016 – ` 15.04 mn) is created being Non-performing assets as per RBI Guidelines and included in Provision for Non- Performing Assets disclosed under Note 5 (c)
(e) Premises completed are net of accumulated depreciation of ` 1.35 mn (As at March 31, 2016 : ` 0.54 mn). Depreciation charged during the year is ` 1.48 mn (Previous Year : ` 0.54 mn)
(f) The Company has entered into an agreement to sell its entire equity investment in one of the Company, Planetcast Media Services Ltd (formerly Essel Shyam Communication Ltd) to third party subject to fulfillment of terms of agreement
(10) CURRENT MATURITIES OF NON CURRENT INVESTMENTS
Current Maturities of the Non-Current Investments represents Compulsorily Convertible Debentures of ` 1,700.00 mn (As at March 31, 2016 ` 3,680.00 mn) and Optionally Convertible Debentures of ` 22.56 mn (As at March 31, 2016 ` 15.04 mn)
(11) CURRENT INVESTMENTS
(a) Summary of Current Investments is as below :
Particulars
Equity Shares
Government Securities Units of Mutual Fund
As at March 31, 2017
3,262.71
1,199.85
21.15
(` in million)
As at March 31, 2016
2,586.56
2,645.75
29.63
5,261.94
Total 4,483.71
(b) Market Value of Quoted Investment and Cost of Unquoted Current Investment:
(` in million)
Particulars
Quoted Investment
Aggregate Market Value Cost (a)
Unquoted Investment
Cost (b)
Total (a)+(b)
As at March 31, 2017
4,019.38
3,800.06
683.65 4,483.71
As at March 31, 2016
4,778.38
4,780.89
481.05 5,261.94
(c) The Company has executed Power of Attorney in favour of its Professional Clearing Member in respect of its Dematerialised holding of quoted equity investment. These investments are appropriated against margin requirement of the respective stock exchange. As on March 31, 2017, the Company is required to maintain margin of ` 14.95 mn (As on March 31, 2016 ` 364.45 mn) which is covered by current investments aggregating to ` 25.92 mn (As on March 31, 2016 ` 407.28 mn)
(d) The Group carries a provision for the diminution in value of investments in accordance with the NBFC Prudential Norms which is disclosed under Note 5 and is not netted off with the cost of current investments
IL&FS Financial Services Limited Annual Report 2017 1 8 5


1 8 6 IL&FS Financial Services Limited Annual Report 2017
(12) LOANS AND ADVANCES
(a) Break up of Loans and Advances is as below:
Particulars
As at March 31, 2017
Short-term Long-term Total
As at March 31, 2016 Long-term
Secured Loans (considered good)
To Related Parties (Refer note 24)
To Others
Unsecured Loans (considered good) To Related Parties (Refer note 24)
8,039.26 4,356.73 5,783.38 18,179.37 11,323.24 11,559.06 40,073.92 62,956.22
13,596.90 12,051.96
4,399.92 10,745.16
9,140.71 33,577.97
27,137.53 56,375.09
To Others
2,438.50 811.61 9,743.75 12,993.86 3,091.09 635.71 16,547.91 20,274.71
5,389.05 3,946.27
2,700.87 422.62
9,221.81 8,268.28
17,311.73 12,637.17
Doubtful Loans
To Related Parties (Refer note 24) To Others
66.14 3,353.85 36,331.85 19,458.76 61,090.90 116,881.51
Unsecured Advances (Considered good)
Advance Payment of Taxes (net) Mat Credit Entitlement
Capital Advances
2.12 - 912.89 915.01 - - - -
2.12 - - -
1,097.00 4.51
1,099.12 4.51
To Related Parties (Refer note 24)
- - 4.65 4.65 - - 978.07 978.07 - - 1,855.23 1,855.23
- - - - - -
2.50 976.32 0.01
2.50 976.32 0.01
To Others
Advance towards Investments Other Advances
To Related Parties (Refer note 24)
9.62 - 15.90 25.52 83.52 - 67.43 150.95
30.54 - 231.33 - 11.11 - 364.45 -
44.10 17.68 43.12
74.64 249.01 54.233 364.45
To Others
Deposits 14.14
- 41.83 55.97 - - 14.95 - 10.74 10.74 - - 20.13 - 3,886.74 4,031.22
Margin Money with Related Parties Project Development Expenses Prepaid Expenses
14.95 - 20.13 144.48 26,322.26
- 20.03 40.97 2,246.24 63,337.14
20.03
Total
18,570.04 77,366.84 122,259.14
683.91 - 37,015.76 19,458.76
2,930.15 119,811.66
Current Non-Current
Current
Non-Current
- 5.94 56.43 62.37 1,285.69 1,200.99 1,274.71 3,761.39 26,177.78 18,570.04 73,480.10 118,227.92
- 1,347.67
3.24 1,186.95
62.90 819.23
Short-term
Total
44.36 -
85.33
(` in million)


(b) Provision of ` 1,150.08 mn (As at March 31,2016 – ` 738.76 mn) is created on Doubtful Loans (Non-performing assets) as per RBI Guidelines and disclosed under Provision for Non-Performing Assets under Note 5
(c) Unsecured Loans include loans aggregating ` 11,625.50 mn (As at March 31, 2016- ` 16,148.00 mn), which are contractually unsecured. Remaining amount represents contractually Secured Loans where either the realizable value of underlying security is less than Loan amount or Security Creation is under process as at balance sheet date
(d) Margin Money with Related Parties includes Initial Margin on Equity Derivative transactions of ` 14.95 mn (As at March 31, 2016- ` 364.45 mn) paid by the Company in their capacity as Professional Clearing Member
(13) TRADE RECEIVABLES
(a) Trade Receivables comprises of receivable of Interest and other dues from clients and fee for services rendered to its clients. Provision for Bad and Doubtful Trade Receivables is made on receivable of fees for services rendered
(b) Trade Receivables are classified into following categories
Particulars
Outstanding for a period exceeding six months from the date they are due for payment
Unsecured, Considered Good
Unsecured, Considered Doubtful
Less : Provision for Bad and Doubtful Trade Receivable
Other Debts
Secured, Considered Good
Unsecured, Considered Good
Unsecured, Considered Doubtful
Less : Provision for Bad and Doubtful Trade Receivable
As at March 31, 2017
89.21
47.04
(47.04)
89.21
(` in million)
As at March 31, 2016
143.79
183.28
(183.28)
143.79
402.18 1,325.93 1.61 (1.61) 1,728.11 1,871.90
229.48 1,845.68 0.79 (0.79) 2,075.16 Total 2,164.37
IL&FS Financial Services Limited Annual Report 2017 1 8 7


(14) CASH AND CASH EQUIVALENTS
Particulars
Cash and Cash Equivalents (As per AS-3)
Cash in Hand
Cheques on Hand
Balance with Banks
(i) In current accounts
(ii) In demand deposit accounts
(iii) In demand deposits more than 3 months (iv) In demand deposit accounts (earmarked)
(` in million)
As at March 31, 2016
0.01
226.26
7,661.97
5,487.09 240.02 119.00 28.08 13,762.43 13,375.33
As at March 31, 2017
0.02
1,926.25
22,081.27
Of the above, the balances that meet the definition 29,609.93 of Cash and cash equivalents as per AS 3 Cash Flow
Statements is
5,602.39 45.53 58.88 0.03 Total 29,714.37
(v) In current accounts (earmarked)
During the year, the Group had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December, 30 2016, the denomination wise SBNs and other notes as per the notification is given below:
SBNs*
Other Denom- ination notes
101,000.00
41,650.00
-
219,442.00
-
189,821.00
101,000.00
234.00
-
71,037.00
Particulars
Closing cash in hand as on November 08, 2016
(+) Permitted receipts
(-) Permitted payments
(-) Amount deposited in Banks
Closing cash in hand as on December 30, 2016
(`) Total
142,650.00
219,442.00 189,821.00 101,234.00 71,037.00
* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 08, 2016
1 8 8
IL&FS Financial Services Limited Annual Report 2017


(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 Project Development Expenses Others
Total
(16) CONTINGENT LIABILITY (a) Guarantees
Particulars
Guarantees issued on behalf of third parties
(b) Taxes and other demands
(` in million)
As at March 31, 2016
As at March 31, 2017
Current
Non- Current
Current
60.47
-
649.86
2,387.29
860.01
1,672.88
939.73
-
105.13
254.03
-
86.52
29.58
141.83
29.78
17.75
0.58
18.81
3,688.85
1,002.42
2,562.98
As at March 31, 2017
405.06
Non- Current
835.30 801.47
-
- 137.25 1.00 1,775.02
(` in million)
As at March 31, 2016
586.85
(i) Income Tax: Demand Raised by Income Tax Authorities against the Group not acknowledged as debts and not provided for, the Group is in appeal at various authorities - ` 132.22 mn (As at March 31, 2016- ` 10.23 mn)
(ii) Sales Tax: Demand raised by Sales Tax authorities against the Group ` 11.71 mn for Lease tax dues (As at March 31, 2016- ` 11.71 mn), against which the Group has preferred appeals with the Appellate Tribunal, High Court
(iii) Service Tax: Demand raised by Service Tax authorities against the Group ` 11.29 mn for CENVAT credit availed (As at March 31, 2016 ` 2.06 mn), against which the Group has preferred appeals with the Custom Excise & Service Tax Appellate Tribunal
IL&FS Financial Services Limited Annual Report 2017 1 8 9


(c)
(iv) Others: Demand Raised by Superintendent of Stamps, Maharashtra against the Group not acknowledged as debts and not provided for towards penalty for delay in payment of stamp duty, the Group has challenged the notice issued, with the authorities - ` 97.60 mn (As at March 31, 2016- ` 97.60 mn)
Bank Guarantees Encashed
The amount of Bank Guarantee invoked by one of the step-down subsidiary has been disclosed under “Other Current Liabilities” note 4. Pending settlement and uncertainty of the liability, the interest on such amount has been considered to be contingent in the nature hence provision of the same has not been made on the amount of Bank Guarantees encashed
The Group does not expect any outflow of economic resources in respect of the above
(17) COMMITMENTS
(a) Capital Commitments
Estimated amount of contracts remaining to be executed but not provided in respect of Assets ` 63.90 mn (As at March 31, 2016- ` 1.75 mn)
(b) Financial Commitments
Undisbursed Commitment in respect of Loans is ` 6.15 mn (As at March 31, 2016 ` 96.70 mn) and in respect of Investments is ` 1,224.02 mn (As at March 31, 2016 ` 1,311.15 mn)
(c) Operating Lease Commitments
The Group has entered into Operating Lease arrangements 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
Later than five years
Total 158.42
(` in million)
As at March 31, 2016
81.36
79.91 7.91 169.18
As at March 31, 2017
111.43
41.79 5.20
Footnote - The Operating Lease expenses incurred during the year of ` 137.64 mn (Previous Year ` 70.15 mn) is included in Rent Expenses
1 9 0 IL&FS Financial Services Limited Annual Report 2017


(18) DERIVATIVE INSTRUMENTS
(a)
Financial Risk Management Objectives
Treasury function of the Group 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 Group through financial risk reports which analyses exposures by degree and magnitude of risks. These risks include currency risk and interest rate risk
The Group 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
Following types of hedging instruments are entered into by the Group
(b)
(c)
In accordance with the change in accounting policy and transitional provision of the Guidance Note, following is the impact on the financial statement:
(` in million)
Amount After adoption of Guidance Note
(4.69)
23,974.90
2,750.68
(i)
(ii)
Interest risk management:
The Group is exposed to interest rate risk as it carries both fixed and floating rates assets and liabilities. The risk is managed by the Group 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
Foreign currency risk management :
The Group is also exposed to foreign currency risk ad 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
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
IL&FS Financial Services Limited Annual Report 2017 1 9 1


(d) The carrying amounts of foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows :
Current Year
Liabilities Exchange Amount
Amount ( ` mn)
366.01 0.35
366.36 - - -
Rate
in Foreign Currency (USD mn)
Foreign Currency Loans Total Payables (A)
Hedged by derivative (B)
Unhedged Payables (C=A-B)
Principal Interest
Principal Interest
64.845 5.64 64.845 0.005
- 5.64 - 0.005 - NIL
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 million)
Fair Value (` in million)
Interest Rate Swap
No. of Contracts
Notional Principal (` in in million) Fair Value (` in in million)
As at March 31, 2017
1
375.00
(13.69)
- - -
As at March 31, 2016
1
700.00
(4.04)
1 250.00 1.62
1 9 2
IL&FS Financial Services Limited Annual Report 2017


(f) Details of Equity/Index option outstanding as at March 31, 2017 are as below:
Particulars
Index Options Nifty
No. of Contracts No. of Units
Bank Nifty
As at March 31, 2017
As at March 31, 2016
Long Position
Short Position
Long Position
Short Position
1,332
99,900
1,666
49,980
-
-
2,666 -
199,950 -
- 1,666
49,980
No. of Contracts -
No. of Units
Total Premium carried forward at the year end
including provision made (` in million)
(19) REVENUE FROM OPERATIONS
12.74
16.37
(a) The Group is engaged in the Financial Services Business and its revenue from operations is as per the table below:
(` in million)
Year ended March 31, 2016
14,628.17
2,164.83
0.24
514.67
1,366.45
757.53 117.51 287.75
21.77 19,858.92
*Footnote- Interest income is net-off provision for interest sacrifice and reversal of interest income towards provision for funded interest term loan on restructured advances (Refer note 5(a))
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 Porting Fee
Asset Management Fee Brokerage Income
Year ended March 31, 2017
18,677.94
2,348.82
56.60
427.77
1,547.56
864.14 160.80 128.95
3.98 Total 24,216.56
IL&FS Financial Services Limited Annual Report 2017 1 9 3


(b) Break up of Income from Investments are as below:
Particulars
Interest/Discount/Premium Dividend and Pass Through Income Net Gain on Sale of Investments
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 1,109.30
(` in million)
Year ended March 31, 2016
Current
223.05 13.88 152.47
434.28
823.68 2,164.83
(` in million)
Year ended March 31, 2016
12,124.03
63.83 12,187.86
(` in million)
Year ended March 31, 2016
913.59
67.33
44.25
39.12 1,064.29
Non- Current
1,045.50
292.54
3.11
-
1,341.15
1 9 4
IL&FS Financial Services Limited Annual Report 2017
Year ended March 31, 2017
Non- Current
623.30
301.61
Current
343.10
25.56
266.22
-
539.92
249.11
1,191.13
1,157.69
2,348.82
Year ended March 31, 2017
14,429.57
146.60 14,576.17
Year ended March 31, 2017
949.34
59.76
35.07 65.13


(b) Other Operating & Administrative Expenses comprises of :
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
(22) OTHER PROVISION AND WRITE OFFS
Particulars Year ended March 31, 2017
(` in million)
Year ended March 31, 2016
153.86
5.01
73.78
36.18
61.37
16.54
177.18
9.01
195.05
231.94
69.35
298.51 1,327.78
(` in million)
Year ended March 31, 2016
315.94
(364.70)
(75.00) (123.76)
7.90
- 7.90
Year ended March 31, 2017
161.94
4.38
84.19
40.06
50.11
17.52
274.42
11.58
195.26
265.17
67.20
289.43 Total 1,461.26
Miscellaneous Expenses
Write Offs of
- Loans
Written off during the year 1,664.62
Provision for Non-Performing Assets - written back against write off of Loans
Recovery of Loans Written off earlier (25.20)
- Bad and Doubtful Trade Receivables
Written off during the year 164.03
Provision for Bad and Doubtful Trade (141.03) Receivables written back
1,639.42
23.00
IL&FS Financial Services Limited Annual Report 2017 1 9 5


Particulars Year ended March 31, 2017
Year ended March 31, 2016
Provisions for
Standard Assets 55.00
Standard Restructured Assets (13.82)
Non-Performing Assets Created 405.81
Bad and Doubtful Trade Receivables 37.57
Mark to Market on Derivatives
Provision for Diminution in :
- Long-term Investments
- Current Investments
(23) EARNINGS PER SHARE (EPS)
484.56
0.96
411.49
192.46
2,751.89
120.00
(5.77)
589.71
66.16
770.10
(7.17)
244.11
85.03
976.21
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
Less: Dividend on NCRCPS (including dividend distribution tax thereon)
Less / (Add) : Arrears on dividend on Preference Shares issued by Subsidiary Company to outside Group
Less : Redemption Premium on Preference Shares issued by Subsidiary Company to outside Group
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)
Year ended March 31, 2017
2,262.44
(279.97)
-
-
1,982.47 265,667,555
10.00 7.46
(` in million)
Year ended March 31, 2016
1,970.50
-
(0.03)
8.90
1,961.63 265,667,555
10.00 7.38
1 9 6
IL&FS Financial Services Limited Annual Report 2017


(24) RELATED PARTY TRANSACTIONS
(a) As per the Accounting Standard - 18 on ‘Related Party Transactions’, the related parties As at March 31, 2017 are as follows:
Ultimate Holding Company
Infrastructure Leasing & Financial Services 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
Elsamex SA
Etesian Urja Limited (formerly Bhojpur Biomass Power Company Limited)
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 Advisors LLC
IL&FS Investment Managers Ltd
IL&FS Investment Trust – I
IL&FS Maritime Infrastructure Co Ltd
IL&FS Paradip Refinery Water Ltd
March March 31, 31, 2017 2016
 
2017 2016  
  






 
   
 
   
   -
 
 
 
 
IL&FS Portfolio Management Services Ltd
IL&FS Rail Ltd
IL&FS Renewable Energy Ltd
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
IL&FS Trust Co Ltd
IL&FS Urban Infrastructure 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
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
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
-

-






-















-
-


-





-









-
* As certified by the holding Company and with whom transactions done during the year
IL&FS Financial Services Limited Annual Report 2017
1 9 7


LIVIA India Ltd
Mahidad Wind Energy Pvt Ltd
Moradabad Bareilly Expressway Ltd
Mota Layja Gas Power Co Ltd
 
- 
 
 
Tierra Enviro Ltd
Unique Waste Processing Co Ltd
Wind Urja India Pvt Ltd
Indirect Associates*
Urban Mass Transit Company Ltd
 
 
 -
 
 
 
 
 
 
 
 
 
 
 
2017 2016  -
-
Nana Layja Power Co Ltd 
Patiala Bio Power Co Ltd 
-
- Private Ltd
Canopy Housing & Infrastructure
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
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
Srinagar Sonamarg Tunnelway Ltd TADAS Wind Energy Pvt Ltd
 
 
- 
 
 -
 
 
 
 
 
- 
 
- 
 - - 
Key Management Personnel (KMP)
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 
* As certified by the Ultimate 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 9 8 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:
(` in million)
Nature of Transactions Ultimate Holding Company
Income
Interest -
Fellow Subsidiaries
7,949.28
Key Associates Management Personnel
2.40 -
- -
- -
- -
- 5.56
- 194.54
14.20 -
- -
- -
- -
3.75 -
- -
- -
- -
- -
- - - -
-
- - - -
* -
- - - -
Year ended March 31, 2017
7,951.68
237.99
1,642.33
444.01
648.08
194.54
15,604.11
5,174.28
1,385.69
10,502.33
1,066.83
-
1,057.94
83.86
76.70
- 181.11
32,040.70 45,320.49 71,176.54 82,228.70
664.17 1,328.34
paid as per
Investment Income
Fee and Other Income
Expenditure
Interest and Finance charges
Other Operating & Administrative Expenses
Employee Benefit Expenses
Balances as at end of the Year
Assets
Non-Current Assets
Long-term Loans & Advances
Current Assets
Current Maturity of Long-termLoans & Advances
Trade Receivables
Short-term Loans & Advances
Other Current Assets
Liabilities
Non-Current Liabilities
Current Liabilities
Current Maturities of Long-termBorrowings
- 237.99
0.55 1,641.78
1.48 442.53
313.97 328.55
- -
- 15,589.91
- 5,174.28
- 1,385.69
1.23 10,501.101
0.26 1,062.82
- -
Short-termBorrowings -
Trade Payables 9.56
Other Current Liabilities 7.51
Off Balance Sheet Items
Guarantees Given -
Transactions during the year*
Sale/Redemption of Shares/units -
Long Term / Short Term Loans Given (Assets) -
Long Term / Short Term Loans Repaid (Assets) -
LongTerm/ShortTermBorrowingTaken(Liabilities) -
Repayment of Long Term / Short Term Bor- - rowing (Liabilities)
Interim Equity Divided Paid 664.17 Equity Dividend Paid 1,328.34
1,057.94
74.30
69.19
-
181.11 32,040.70 45,320.49 71,176.54 82,228.70
- -
1 Includes ` 14.95 mn paid to clearing member and stock broker on account of margin money required to be Exchange regulations.
* Transactions during the year excludes reimbursement of expenses with related parties
IL&FS Financial Services Limited Annual Report 2017 1 9 9


The nature and volume of the transactions during the year ended March 31, 2016 with the above related parties were as follows:
Nature of Transactions Ultimate Holding Company
Income
Interest -
Fellow
Subsidiaries Associates
3,153.93 2.40
255.99 -
1,732.04 -
675.57 -
332.23 -
- -
18,458.47 14.20
7,104.03 -
1,207.95 -
19,352.721 -
525.61 3.75
100.00 -
20.41 -
1,854.42 - 10,270.68 - 73.22 - 187.27 0.83
300.00 -
129.59 - 8.60 - 61,257.75 - 29,214.49 - 68,227.02 -
60,902.34 -
Key Management Personnel
-
-
-
-
4.75
151.60
-
-
-
2.22
-
-
- -
- - -
-
- - - - -
-
Year ended March 31, 2016
3,156.33
255.99
1,732.07
714.20
649.31
151.60
18,472.67
7,104.03
1,207.97
19,383.16
529.36
100.00
20.41 1,854.42
10,270.68 78.12 195.61
300.00
129.59 8.60 61,257.75 29,214.49 99,010.72
91,686.04
(` in million)
Investment Income
Fee and Other Income
Expenditure
Interest and Finance charges
Other Operating & Administrative Expenses
Employee Benefit Expenses
Balances as at end of the Year
Assets
Non-Current Assets
Long-term Loans & Advances
Current Assets
Current Maturity of Long-termLoans & Advances
Trade Receivables
Short-term Loans & Advances
Other Current Assets
Liabilities
Non-Current Liabilities
Long-termBorrowings
Other Long Term Liabilities
Current Liabilities
Current Maturities of Long-termBorrowings Short-termBorrowings
Trade Payables
OtherCurrentLiabilities 7.51 Off Balance Sheet Items
-
0.03
38.63
312.33
-
-
-
0.02
28.22
-
-
-
-
-
- - - -
30,783.70
30,783.70
1,328.34 1 Includes ` 364.45 mn paid to clearing member and stock
Exchange regulations
* Transactions during the year excludes reimbursement of
- 4.90
Guarantees Given
Transactions during the year*
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 Bor- rowing (Liabilities)
Dividend Paid
- -
broker on account of margin money required
expenses with related parties
-
to be paid as per
1,328.34
2 0 0
IL&FS Financial Services Limited Annual Report 2017


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