ANNUAL REPORT

Transcription

1 ANNUAL REPORT

2 to ensure that every individual and every enterprise has complete access to financial services

3 AUDITORS REPORT TO THE TRUSTEES OF IFMR TRUST 1. We have audited the attached Balance Sheet of IFMR TRUST ( the Trust ) as at 31st March, 2012, the Profit and Loss and the Cash Flow Statement of the Trust for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Trust s Management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. We report that: (a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit; (b) in our opinion, proper books of account as required by law have been kept by the Trust so far as it appears from our examination of those books; (c) the Balance Sheet, the Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards issued by the Institute of Chartered Accountants of India; (e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Trust as at 31st March, 2012; (ii) in the case of the Profit and Loss Account, of the loss of the Trust for the year ended on that date and (iii) in the case of the Cash Flow Statement, of the cash flows of the Trust for the year ended on that date. For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No S) Bhavani Balasubramanian Partner (Membership No ) CHENNAI, 18th July, 2012

4 IFMR Trust Balance Sheet as of March 31, 2011 Amount in INR Note As at As at Reference March 31, 2012 March 31, 2011 A. EQUITY & LIABILITIES (1) General Fund 1,000 1,000 (2) Reserves & Surplus 3 (497,620,635) (227,396,309) (3) Non Current Liabilities (a) Long-term Borrowings 4 1,500,000,000 1,500,000,000 (b) Other Long-term Liabilities 5 564,628, ,628,532 (c) Long-term Provision 6 1,028,790 1,635,000 2,065,657,322 2,066,263,532 (4) Current Liabilities (a) Trade Payables 7 6,229,995 13,991,700 (b) Other current liabilities 8 3,235, ,116,136 (c) Short-term provisions 9 5,617,050 4,238,776 15,082, ,346,612 TOTAL 1,583,120,629 2,067,214,835 B. ASSETS (1) Non-Current assets (a) Fixed assets 10 (i) Tangible assets 12,840,653 15,650,262 (ii) Intangible assets 3,040,945 3,218,214 (b) Non-current investments 11 1,173,557,531 1,080,287,798 (c) Long-term loans and advances ,869, ,232,014 1,530,308,543 1,898,388,288 (2) Current assets (a) Current Investments 11 14,507,293 13,350,033 (b) Cash and cash equivalents 13 4,396,670 89,926,137 (c) Short-term loans and advances 14 33,908,123 65,550,377 52,812, ,826,547 TOTAL 1,583,120,629 2,067,214,835 See accompanying notes forming part of the financial statements In terms of our report attached. For Deloitte Haskins & Sells Chartered Accountants For and on behalf of IFMR Trust Bhavani Balasubramanian Bindu Ananth V. Vijayaraghavan Partner Director Head - Corporate Centre Place: Chennai Date: July 18,

5 IFMR Trust Profit and Loss Account for the year ended March 31, 2012 Amount in INR Notes For the year ended For the year ended Reference March 31, 2012 March 31, Interest Income 15 8,080,573 18,142, Other Income 16 56,357,146 75,654, TOTAL REVENUE (1 + 2) 64,437,719 93,797, EXPENSES a Staff Costs 17 33,642,884 58,180,448 b Administrative and Other Expenses ,931,901 70,071,400 c Interest Expense 19 34, ,072 d Depreciation 10 7,052,289 57,347,250 TOTAL EXPENSES 334,662, ,760, Loss for the period before tax (3-4) (270,224,326) (91,962,639) 6. Tax Expenses : a. Current tax - - b. Deferred Tax Loss for the year (270,224,326) (91,962,639) See accompanying notes forming part of the financial statements In terms of our report attached. For Deloitte Haskins & Sells Chartered Accountants For and on behalf of IFMR Trust Bhavani Balasubramanian Bindu Ananth V. Vijayaraghavan Partner Director Head - Corporate Centre Place: Chennai Date: July 18,

6 IFMR Trust Cash Flow Statement for the Year ended March 31, 2012 Amount in INR For the year ended For the year ended March 31, 2012 March 31, 2011 A. CASH FLOW FROM OPERATING ACTIVITIES: Loss before Tax (270,224,326) (91,962,639) Adjustments for: Depreciation 7,052,289 57,347,250 Interest income on fixed deposit (1,973,656) (5,355,034) Interest income on investments (339,176) (756,189) (Profit)/ Loss on assets written off (30,233) 896,614 (Profit)/ Loss on sale of investments 85,764,326 (2,692,379) Provision for Gratuity - 365,000 Provision for Gratuity written back (606,210) - Provision for doubtful loans and advances 11,116,374 3,725,857 Provision for other advances considered doubtful 137,686,108 6,847,271 Provision for diminution in value of investments 10,329,550 4,096,240 Provision for bad debts provided in earlier years now written back - (3,328,429) Bad debts written off - 456,187 Operating Loss before working capital changes (21,224,954) (30,360,251) Changes in working capital: Adjustments for (increase)/decrease in Operating Assets: Long-term Loans and Advances 327,225,269 86,749,341 Short-term Loans and Advances (106,043,854) 13,499,685 Adjustments for increase/(decrease) in Operating Liabilities: Trade Payables (7,761,704) 621,006 Other current Liabilities (3,687,911) 3,351,510 Short Term provisions 1,378,274 (3,785,641) Cash generated from operations 189,885,120 70,075,650 Less: Income Taxes paid 4,144,535 - Net cash flow generated from operating activities (A) 185,740,585 70,075,650 B. CASH FLOW FROM INVESTING ACTIVITIES: Capital expenditure on Fixed assets (4,497,970) (25,364,777) Proceeds from Sale of fixed assets 462,792 - Purchase of Investments - Current (1,157,260) (13,350,033) Purchase of Investments - Non Current (313,674,001) - Proceeds from sale of investments - Non Current 113,194,017 16,700,000 Subscription towards purchase of equity shares (Net) 133,677,802 (350,111,463) Advance received towards sale of shares (203,192,328) 203,192,328 Proceeds from/(investment in) Fixed Deposits with Banks (Net) 81,900,000 33,600,000 Interest Received - Fixed deposits 3,552,525 8,074,150 Interest Received - Other investments 364, ,994 Net cash used in Investing activities (B) (189,370,052) (126,528,801) 04

7 IFMR Trust Cash Flow Statement for the Year ended March 31, 2012 Amount in INR For the year ended For the year ended March 31, 2012 March 31, 2011 C. CASH FLOW FROM FINANCING ACTIVITIES (C ) - - Net decrease in Cash and Cash Equivalents (A+B+C) (3,629,467) (56,453,151) Cash & Cash Equivalents at the beginning of the year 8,026,137 64,479,288 Cash & Cash Equivalents at the end of the year 4,396,670 8,026,137 Reconciliation of cash and cash equivalents: Cash and Cash Equivalents as per Balance sheet (Refer Note No 13) 4,396,670 89,926,137 Less: Bank balances not considered as Cash and cash equivalents as defined in AS 3 Cash Flow Statements Deposits maturing beyond a period of three months - 81,900,000 Net Cash and cash equivalents (as defined in AS 3 Cash Flow Statements) included in Note 13 4,396,670 8,026,137 Cash and cash equivalents at the end of the year * * Comprises: (a) Cheques on hand 537,051 - (b) Balances with banks - in Savings account 3,859,619 3,026,137 - in Deposit account - 5,000,000 See accompanying notes forming part of the financial statements In terms of our report attached. For Deloitte Haskins & Sells Chartered Accountants For and on behalf of IFMR Trust Bhavani Balasubramanian Bindu Ananth V. Vijayaraghavan Partner Director Head - Corporate Centre Place: Chennai Date: July 18,

8 IFMR Trust Notes to financial statements 1. Corporate Information IFMR Trust is a private trust established under the Indian Trust Act 1882 on 19th October 2006 at Chennai represented by IFMR Trusteeship Services Private Limited acting in its capacity as trustee to IFMR Trust. IFMR Trust s mission is to ensure that every individual and every enterprise has complete access to financial services. The names and the business of the major Companies which are incubated / acquired by the Trust have been elucidated below: IFMR Capital Finance Private Limited (IFMR Capital): IFMR Capital s mission is to act as a bridge to mainstream capital markets for entities and asset classes of relevance to low-income households. Its objective is providing liquidity and developing access to debt-capital markets for critical sectors such as, rural financial service providers, urban financial service providers that focus on low-income households, municipalities, rural infrastructure. IFMR Rural Finance Services Private Limited (formerly known as IFMR Holdings Private Limited) (IFMR Rural Finance): High quality delivery of financial services requires delivering them in a convenient, flexible, reliable and continuous manner. IFMR Rural Finance therefore has been set up by IFMR Trust with a mandate to design a model than can withstand scrutiny on the aforementioned essential parameters and thus pave the way towards complete financial inclusion in rural remote India. IFMR Finance Foundation: IFMR Trust s principal strategy for ensuring complete access to financial services is advocacy. IFMR Finance Foundation is looking to complement existing efforts in the arena of access to financial services by supporting practice-relevant action research and pilot projects on access to finance, and by influencing thinking and action among key sectoral actors. IFMR Mezzanine Finance Private Limited (IFMR Mezzanine) : IFMR Mezzanine is established with the aim to facilitate access to risk capital to microfinance institutions (MFIs). It is intended that this Company will make investments in micro financial institutions in the form of subordinated debt instruments with a quasi-equity nature that can be leveraged by the microfinance institutions with other lenders, allowing them to access funds that were hitherto unavailable to them. This is the first attempt to enable MFIs to use a new class of liability to leverage their equity capital for further expansion. IFMR Rural Channels and Services Private Limited (IRCS) : IRCS was established during the year for facilitating financial services delivery to rural households including those in relation to third party products. Pudhuaaru Financial Services Pvt. Ltd (formerly known as Pamara MicroFinance Pvt. Ltd) is a non-deposit taking NBFC, wholly owned by IFMR Trust. This company was incorporated in 04th March 1993, and is engaged in the business of providing financial services in remote rural parts of Thanjavur & Thiruvarur District. 2. Significant accounting policies 2.1 Basis of accounting and preparation of financial statements: The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in accordance with accounting principles generally accepted in India and comply with the accounting standards issued by the Institute of Chartered Accountants of India (ICAI). The Trust is classified as a Level I enterprise as defined by the scheme of applicability of accounting standards issued by ICAI. Accordingly, the Trust is required to comply with all mandatory accounting standards prescribed by the ICAI.

9 2.2 Use of estimates The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize. 2.3 Fixed Assets and depreciation: Fixed assets are stated at historical cost less accumulated depreciation and impairment losses, where applicable. The Trust capitalizes all costs relating to the acquisition and installation of fixed assets. Cost comprises the purchase price and any attributed cost of bringing the asset to its working condition for its intended use. Depreciation on assets is provided on the Written down Value Method at the following rates based on the management s estimate of the useful life of the asset. Asset category Depreciation rate Furniture and Fittings 10% Computers and software 60% Office Equipment 15% Vehicles 15% Leasehold Improvements 100% Assets individually costing less than Rs.5,000/- added during the year are fully depreciated. 2.4 Impairment of assets: The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets. 2.5 Revenue recognition: Revenue is recognized to the extent that it is probable that the economic value will flow to the Trust and the revenue can be reliably measured. Income arising from shared services and Infrastructure services between the group companies is recognized on accrual basis, in accordance with mutually agreed terms. Interest income on loans given is recognized under internal rate of return method. Interest income on bank deposits is accounted on accrual basis. Dividend income on mutual fund investment is accounted for when the right to receive it is established. 2.6 Investments: Long-term investments are stated at cost of acquisition. Provision for diminution is made if such diminution is considered as being other than temporary in nature. Investments in Mutual Funds are valued at lower of cost or market value, prevailing as at the date of the Balance Sheet.

10 2.7 Employee benefits: Defined contribution plans: Fixed Contributions to Provident Fund made on monthly basis with relevant authorities are absorbed in the Statement of Profit and Loss. Gratuity The Trust accounts for its liability for future gratuity benefits based on the actuarial valuation, as at the balance sheet date, determined by an Independent Actuary using the Projected Unit Credit method and is provided for. The Trust s gratuity plan is non-funded. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the year in which they occur. Compensated absences Benefits of Compensated absences are not provided to the employees of the Trust. 2.8 Taxes on Income: (a) Income tax Current tax is determined in accordance with the provisions of Income tax act, (b) Deferred tax Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Trust has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. 2.9 Provisions, contingent liabilities and contingent assets: Provisions are recognised only when the Trust has present or legal or constructive obligation as a result of past events for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Trust or (ii) Present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised Leases: Leases are classified as finance or operating leases depending upon the terms of the lease agreements. Finance leases Finance leases, which effectively transfer substantially all the risks and benefits incidental to the ownership of the leased item, are capitalised at the lower of the fair value or present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and the reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income.

11 Operating leases Leases of assets under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term Foreign Currency Transactions Transaction in foreign currencies is accounted at the exchange rates prevailing on the date of the transaction and the realized exchange loss /gain is dealt with in the Statement of Profit and Loss. Monetary assets and liabilities denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and the exchange gain/loss is suitably dealt with in the Statement of Profit and Loss Provision for advances: Provision for advances given to various parties is made based on the management s analysis of the recoverability of such advances outstanding as at the balance sheet date.

12 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 Note 3: Reserves & Surplus (a) Deficit in profit and loss A/c Opening balance (227,396,309) (135,433,670) Add: Loss for the year (270,224,326) (91,962,639) Closing balance (497,620,635) (227,396,309) Note 4: Long-term Borrowings Term loans from ICICI Bank Limited 1,500,000,000 1,500,000,000 TOTAL 1,500,000,000 1,500,000,000 Term loan represents the interest-free, unsecured term loans received from ICICI Bank Limited repayable in two bullet payments in December, 2014 (Rs 500,000,000) and March 2015 (Rs 1,000,000,000 ) respectively. Term loans are given for supporting/funding enterprises set up with the objective of providing services including but not limited to consulting, advisory, training services to low income, unbanked households and/or semi-urban/ rural population in India. Note 5: Other Long-term Liabilities Others - Revocable Grants from Banks 564,628, ,628,532 TOTAL 564,628, ,628,532 Revocable grants represent funding for specific purpose. Note 6: Long-term Provision Provision for Employee Benefits for gratuity (Refer note no: 22 (I)) 1,028,790 1,635,000 TOTAL 1,028,790 1,635,000 Note 7: Trade Payables Sundry creditors 6,229,995 13,991,700 TOTAL 6,229,995 13,991,700 Note 8: Other Current Liabilities (a) Advance Received towards sale of shares - 203,192,328 (b) Statutory Remittances 507,735 4,273,808 (c) Other Liabilites 2,728,162 2,650,000 TOTAL 3,235, ,116,136 Note 9: Short-term provisions Others 5,617,050 4,238,776 TOTAL 5,617,050 4,238,776

13 Schedule 10: Fixed Assets Amount in Rs. Gross block Depreciation Net block Asset As on As on As on For the On As on As on As on category April 1, Additions Deletions Adjustments* March 31, April 1, year Deletions Adjustments* March 31, March 31, March 31, Tangible assets Furniture and Fittings 8,271,752 61,941 - (242,462) 8,091,231 1,034, ,740 - (44,547) 1,713,262 6,377,969 7,237,683 Computers 17,044, , ,119 (596,354) 17,183,688 13,853,107 2,070, ,281 (415,386) 15,365,950 1,817,738 3,191,768 Office Equipments 5,803, ,632 76,500-6,001, , ,269 31,662-1,642,509 4,359,402 4,884,877 Vehicles 542, , ,867 50, , , ,934 Leasehold Improvements 48,078,812-65,070-48,013,742 48,078,812-65,070-48,013, Intangible Assets Software 9,150,940 3,275, ,426,051 5,932,726 3,452, ,385,106 3,040,945 3,218,214 Total 88,892,959 4,497, ,689 (838,816) 92,259,424 70,024,483 7,052, ,013 (459,933) 76,377,826 15,881,598 18,868,476 Previous Year 33,137,653 56,903,450 1,107,529 (40,615) 88,892,959 12,917,352 57,347, ,916 (29,203) 70,024,483 18,868,476 20,220,301 * Adjustments represent cost and accumulated depreciation of assets transferred during the year to entities within the group

14 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 Note 11: Investments Non-Current In Subsidiaries (Unquoted) IFMR Capital Finance Private Limited 60,24,32,843 60,24,32,843 (59,999,999 Equity Shares (PY 59,999,999 Equity Shares) of Rs 10/- each) IFMR Rural Finance Services Private Limited 18,29,99,900 12,30,99,900 (18,299,990 Equity Shares (PY 12,309,990 Equity Shares) of Rs 10/- each) Megha Holdings Private Limited 1,00,93,300 50,93,300 (750,000 Equity Shares (PY 250,000 Equity Shares) of Rs 10/- each) IFMR Mezzanine Finance Private Limited 10,04,00,000 10,04,00,000 (1,000,000 Equity Shares (PY 1,000,000 Equity Shares) of Rs. 100/ each) IFMR Rural Channels and Services Private Limited 24,87,74,000 - (24,877,400 Equity shares (PY NIL) of Rs.10/- each) IFMR Finance Foundation 99,900 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) IFMR Ventures India Private Limited 9,99,900 (99,990 Equity Shares (PY 99,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (9,99,900) - 9,99,900 Pudhuaaru Financial Services Private Limited - 20,29,92,328 (Current year NIL) (PY 15,839,600 Equity Shares) of Rs 10/- each) (Refer note no: 22 (III) Pudhuaaru Kshetriya Gramin Financial Services 1,00,000 (1,000 Equity Shares (PY 1,000 Equity Shares) of Rs. 100/- each) Less: Provision for Diminution (Refer Note: 20) (1,00,000) - 1,00,000 Dhanei Kshetriya Gramin Services 1,00,000 (1,000 Equity Shares (PY 1000 Equity Shares) of Rs. 100/- each) Less: Provision for Diminution (Refer Note : 20) (1,00,000) - 1,00,000 Sahastradhara Kshetriya Gramin Services 1,00,000

15 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 (1,000 Equity Shares (PY 1000 Equity Shares) of Rs. 100/- each) Less: Provision for Diminution (Refer Note : 20) (100,000) - 100,000 NE Aqua Private Limited 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) -99,900-99,900 NE Crafts Apparel and Furnishings Company Private Limited 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,900) - 99,900 NE Education Private Limited 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,900) - 99,900 NE Emerging Channels Services Private Limited 99,990 99,990 (9,999 Equity Shares (PY 9,999 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,990) - (99,990) - NE Green Power Private Limited 99,900 (9,990 Equity Shares ( PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,900) - 99,900 NE Milkrush Private Limited 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,900) - 99,900 NE Rural BPO Company Private Limited 99,900 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (99,900) - (99,900) - NE Rural Tourism Private Limited 99,900 99,900 (9,990 Equity Shares (PY 9,990 Equity Shares) of Rs 10/- each) NE Agri Services Private Limited 3,999,900 3,999,900 (399,990 Equity Shares (PY 399,990 Equity Shares) of Rs 10/- each) Less: Provision for Diminution (Refer Note : 20) (3,999,900) 11,44,899,843 1,040,017,471

16 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 In Associates (Unquoted) IKP Center For Advancement in Agricultural Practices 49,000 49,000 (4,900 Equity Shares (PY 4900 Equity Shares) of Rs 10 /- each) Grameen Capital India Limited 24,750,000 24,750,000 (2,475,000 Equity Shares (PY 2,475,000 Equity Shares) of Rs 10/- each) Aarusha Homes Private Limited 483, ,580 (48,358 Equity share (PY 48,358 Equity Shares) of Rs. 10/- each) 25,282,580 25,282,580 In Other Companies (Unquoted) Financial Information and Network Operations Limited - 5,000,000 (Current year NIL (PY 5,00,000 Equity Shares) of Rs 10/- each) Education Initiatives Private Limited^ 3,375,108 5,991,497 (24,582 Equity Shares (PY 43,638 Equity Shares) of Rs 1/- each) 3,375,108 10,991,497 Investments in preference shares Desi Power (Kosi) Private Limited 1,750,000 1,750,000 (3,198 shares (PY 3,198 shares) of Rs.100/- each) Less: Provision for Diminution (Refer Note : 20) (1,750,000) - (1,750,000) - In Debentures - - Earthy Goods & Services Private Limited 15,985,000 15,985,000 (91(PY 91), 15% Debentures of Rs 100,000/- Each) Less: Provision for Diminution (Refer Note : 20) (15,985,000) - (11,988,750) 3,996,250-3,996,250 Total Non-current Investments 1,173,557,531 1,080,287,798

17 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 Current Investments in Mutual Funds (Trade, Unquoted) Baroda Pioneer PSU Equity Fund 2,000,000 Less: Provision for Diminution (Refer Note : 20) (534,000) 1,466,000 2,000,000 (200,000 Units (PY 200,000) of Rs.10/- each) ICICI Prudential Flexible Income Plan 13,025,808 - (115,648 Units (PY NIL) of Rs.113/- each) Kotak Mahindra Mutual Fund (Growth Plan) 15,485 - (885 Units (PY NIL) of Rs.18/- each) 14,507,293 2,000,000 Investment in loan portfolio of: Dhanei Kshetriya Gramin Services - 5,275,223 Sahastradhara Kshetriya Gramin Services - 6,074,810-11,350,033 Total Current Investments 14,507,293 13,350,033 ^ The Investee company has bought back 19,055 (P.Y 1,02,022) shares under a scheme of buy back

18 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 Note 12: Long-term loans and advances Unsecured, considered good (a) Capital Advances Advance Subscription towards proposed investment in Equity Shares 135,302, ,244,072 Less: Provision for Doubtful Advances (Refer note no:20) (121,302,000) 14,000,000 (6,847,271) 509,396,801 (b) Other Security Deposits 70,590,447 70,288,947 (c) Loans and advances to related parties 100,000,000 65,000,000 (d) Other loans and advances 139,704, ,886,876 Less: Provisions (29,684,461) 110,019,559 (19,782,918) 115,103,958 (e) Advance Taxes (net of provision) 46,259,408 39,442,308 TOTAL 340,869, ,232,014 Advance subscription of Rs Million (PY Rs million) represents the proposed investment of Rs million in the shares of Pudhuaaru Kshetriya Gramin Financial Services (PKGFS), Rs million in the shares of Dhanei Kshetriya Gramin Services(DKGS), Rs million in the shares of Sahastradhara Kshetriya Gramin Financial Services(SKGS), Rs. 14 million in the shares of IFMR Rural Finance Services Private Limited and Rs million in the shares of NE Emerging Channels Services Private Limited (NEECS). These shares are yet to be allotted. Of the above, advance of Rs Million given to PKGFS, Rs Million given to DKGS, Rs Million given to SKGS and Rs Million given to NEECS is considered doubtful and provided for as of 31st March (PY Rs.6.84 Million paid to NEECS was considered doubtful and provided as on 31st March 2011) Note 13: Cash & Cash Equivalents Cash and cash equivalents as defined in AS- 3 Cheques on hand 537,051 - Balance in Savings account 3,859,619 3,026,137 Balance in Fixed Deposit account - 5,000,000 Other Bank Balances Balance in Deposit account - 81,900,000 TOTAL 4,396,670 89,926,137 Of the above, the balances that meet the definition of Cash Equivalents as per AS 3 4,396,670 8,026,137

19 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR As at As at March 31, 2012 March 31, 2011 Note 14: Short-term loans and advances Unsecured, Considered good (a) Advances to related parties (Refer note no: 22 (III)) 51,149,080 Less: Provisions (23,231,379) 27,917,701 52,346,745 (b) Deposits (i) Staff Security deposit 1,944,750 2,604,600 (ii) other deposits 77,484 80,399 (c) Advances recoverable in cash or in kind or for 1,074,006 1,392,820 value to be received including advances to creditors (d) Loans to Others 19,253 Less: Provisions - 19,253 1,060,201 (e) Interest Accrued but not due 1,469,627 6,880,927 (f) Amount recoverable towards remuneration 60,000 82,198 Less: Remuneration payable to Trustees (60,000) (40,000) 42,198 (g) Prepaid Expenses 1,405,302 1,142,487 TOTAL 33,908,123 65,550,377 For the year ended For the year ended March 31, 2012 March 31, 2011 Note 15: Interest Income Interest on Loans 5,767,741 12,031,485 Interest on Fixed Deposits with Bank 1,973,656 5,355,034 Interest on Investments 339, ,189 TOTAL 8,080,573 18,142,708 Note 16: Other Income Excess Provision for doubtful advances made in earlier years no longer required written back - 3,328,429 Fees for professional services rendered - 2,719,857 Income from shared services 15,007,467 27,096,841 Income from infrastructure services 36,915,813 38,671,786 Profit on sale of Investments (Net) - 2,692,379 Provisions no longer required written back- for Gratuity 606, for others 754,671 1,360,881 Profit on sale of Assets 30,233 - Others 3,042,752 1,145,531 TOTAL 56,357,146 75,654,823

20 IFMR Trust Notes to Financial Statements as at March 31, 2012 Amount in INR For the year ended For the year ended March 31, 2012 March 31, 2011 Note 17: Staff Costs Salaries, Allowances and Bonus 30,249,492 52,031,719 Company's Contribution to Provident Fund, labour welfare fund 1,551,097 2,490,941 Staff Welfare Expenses 1,842,295 3,292,788 Gratuity - 365,000 TOTAL 33,642,884 58,180,448 Note 18: Administrative & Other Expenses Grants 4,500,000 5,000,000 Rent and Amenities 8,955,930 8,789,113 Repairs & Maintenance - Computers 178, ,925 - Building 7,935,160 7,186,548 - Others 263,947 8,377, ,147 7,936,620 Postage & Telegrams 82,155 99,455 Printing & Stationery 636,388 1,093,011 Telephone Expenses 958,490 1,850,458 Consumables 202,249 - Travelling & Conveyance 3,702,972 5,047,454 Consultancy Charges 4,837,838 6,964,449 Legal & Professional Charges 5,126,408 4,864,684 Brokerage & Commission 30,610 42,044 Conference & Seminar Expenses 689, ,795 Recruitment Charges 31,286 91,571 Office Expenses 7,606,838 7,297,944 Subscription 129,881 95,211 Sponsorship Charges 594, ,637 Loss on sale of asset - 896,614 Exchange variation (Net) Software Development expenses - 110,939 Website maintenance and internet expenses 1,129,866 2,085,570 Auditors' Remuneration For Statutory Audit (exclusive of Service Tax) 1,200,000 1,200,000 For Tax Audit 75,000 75,000 1,275,000 1,275,000 Provision for Doubtful Debt's 11,116,374 3,725,857 Provision for other advances 137,686,108 6,847,271 Provision for Dimunition in Value of Investment 10,329,550 4,096,240 Loss on sale of Investment (NET) 85,764,326 - Bad debts 1,214,831 77,209,337 Less: Transfer from Provision for Doubtful Debts (1,214,831) - (76,753,150) 456,187 Miscellaneous expenses 168, ,400 TOTAL 293,931,901 70,071,400 Note 19: Interest & Finance Charges Bank Charges 5,307 20,753 Interest on Service Tax 17,963 90,252 Intererst on Tax deducted at source 11,701 50,067 TOTAL 34,971 1,61,072

21 20. Provision for doubtful advances and diminution in the value of investments: Provision for advances given to various parties is made based on management s analysis of the recoverability of such advances as explained in policy 2.12 above. Provision for diminution in value of investments is made if such diminution is considered other than temporary in nature. The details of movement of these provisions are given below: (Amount in Rs.) Opening Balance Additions Release Closing Balance Provision for doubtful loans and advances 19,782,918 11,116,374 (1,214,831) 29,684,461 Provision for doubtful other advances 6,847, ,096,108 (1,410,000) 144,533,379 Provision for diminution in the value of investments 13,938,640 10,329,550-24,268,190 Total 40,568, ,542,032 (2,624,831) 198,486, Additional information to the financial Statements Contingent liabilities and commitments (to the extent not provided for) Sl. No. Name of Nature of Dues Amount /Rs. Period Forum where dispute the Statute is pending 1. Income Tax Act, Disallowance of incubation 8,289,070 AY The Commissioner 1961 expenses, Consultancy charges (PY Rs.NIL) of Income tax and Legal and professional charges Appeals (-XII) Out of the above, an amount of Rs. 4,144,535 /- (P.Y Rs. NIL) has been deposited with the concerned authorities

22 22. Accounting Standard Disclosures I. Employee benefits: The Trust's obligation towards gratuity is a defined benefit plan. The details of actuarial valuation have been given below: Valuation as on 31/03/2012 (Amount in Rs.) Movements in Accrued Liability Accrued Liability as at beginning of the period: 1,635,000 1,270,000 Interest Cost 129, ,000 Current Service Cost 387, ,000 Benefits Paid (34,080) Actuarial (gain) / loss (1,089,040) (726,000) Accrued Liability as at the end of the period 1,028,790 1,635,000 (No Fund is being maintained) (Amount in Rs.) Amounts to be recognized in the Balance Sheet Present Value of obligations as on the accounting date 1,028,790 1,635,000 Liability to be recognized in the Balance Sheet 1,028,790 1,635,000 Expenses to be recognized in Statement of Profit and Loss Interest Cost 129, ,000 Current Service Cost 387, ,000 Net Actuarial (gain) / loss (1,089,040) (726,000) Net Expenses to be recognized in Statement of Profit and Loss (572,130) 365,000 Principal Actuarial Assumptions Interest Rate (Liabilities) 8.5% 8.00% Return on Assets N.A. N.A. Mortality Table LIC (94-96) LIC (94-96) Resignation Rate per annum 10.00% 10.00% Salary Escalation Rate 10.00% 10.00% Note:- i) The estimate of future salary increase takes into account inflation, seniority, promotion and other relevant factors. ii) Discount rate is the prevailing market yields used by LIC for similar computations. iii) In the absence of information, the disclosure relating to experience adjustment is not given.

23 II. Segment Reporting: The Trust is primarily engaged in the business of providing access to financial services to the underserved population in the country. Further, the Trust does not have any separate geographical segments other than India. As such there is no separate reportable segment as per AS-17, Segment Reporting. III. Related party disclosures (a) List of related parties and nature of relationship (as identified by management and relied upon by Auditors) Parties where control exists: i) Trustee: IFMR Trusteeship Services Private Limited represented by Bindu Ananth, Puneet Gupta, Dave Wallack, Anil Kumar and Sucharita Mukherjee Directors ii) Associates: Grameen Capital India Limited IKP Center for Advancement in Agricultural Practices iii) Subsidiaries: IFMR Capital Finance Private Limited IFMR Mezzanine Finance Private Limited IFMR Finance Foundation IFMR Rural Finance Services Private Limited Pudhuaaru Kshetriya Gramin Financial Services (PKGFS) Dhanei Kshetriya Gramin Services (DKGS) Sahastradhara Kshetriya Gramin Services (SKGS) Pudhuaaru Financial Services Private Limited (PFSPL) Megha holdings Private Limited IFMR Ventures India Private Limited NE Emerging Channels Services Private Limited. NE Agri Services Private Limited NE Crafts Apparel and Furnishings Company Private Limited (Till 31st January 2012) * NE Education Private Limited (Till 31st January 2012)* NE Processed foods private Limited (wound-up during & revived on 23rd May 2011) NE Green Power Private Limited NE Milkrush Private Limited NE Rural BPO Company Private Limited (Till 31st January 2012)* NE Rural Tourism Private Limited NE Aqua Private Limited(Till 31st January 2012)* * The Companies have gone into liquidation during the year (b) Key Management Personnel: Bindu Ananth, President of IFMR Trust Remuneration paid by the Trust to the President amounting to Rs 4,370,000/- (Previous year Rs. 3,800,000/-)

24 (c) Transaction with related parties during the year: Related Party Transaction For the Year ended For the Year ended 31st March st March 2011 IFMR Trusteeship Services Private Limited Remuneration to Trustees 20,000 20,000 Advance given 26,249 10,044 IFMR Ventures India Private Limited Advance given 440,505 2,615,689 Space Sharing Cost NIL 487,875 Employee Sharing Cost NIL 445,540 IFMR Rural Finance Services Share Application Private Limited Money paid 60,152,705 21,747,295 Advance given 2,574,919 5,165,220 Advance received back 14,851,522 24,580,941 Assets Transferred 72,783 9,648 Investment Equity shares 59,900,000 74,000,000 Space Sharing Cost 6,968,001 7,513,275 Employee Sharing Cost 4,387,097 12,238,402 IFMR Rural channels and Share Application Services Prviate Limited Money paid 248,774,000 NIL Advance given 132,536 NIL Advance received back 988,616 NIL Investment Equity shares 248,774,000 NIL Transfer of shares in subsidiary 202,992,328 NIL Assets Transferred 15,250 NIL Space Sharing Cost 964,802 NIL Employee Sharing Cost 428,982 NIL Pudhuaaru Kshetriya Gramin Advance given NIL 3,803 Financial Services Unsecured Loan-repaid during the year NIL 7,504,313 Advance given ,803 Share Application Money paid 17,350,000 17,069,903 Share Application Money refunded 8,519,903 NIL Dhanei Kshetriya Gramin Services Advance given 16,000 3,724 Advance received back NIL 24,301 Share Application Money paid 47,081,000 NIL Share Application Money refunded 2,331,000 NIL Investment in Portfolio NIL 10,001,465 Sahastradhara Kshetriya Gramin Services Advance given NIL 4,619 Advance received back 70,245 76,273 Share Application Money paid 37,329,000 NIL Share Application Money refunded 579,000 NIL Investment in Portfolio NIL 10,001,470 NE Emerging Channels Services Advance given NIL 510 Private Limited. Advance received back NIL 455,498 Share application Money Paid 7,054,729 6,847,271 IFMR Capital Finance Private Limited Advance given NIL 10,284,308 Advance received back 14,154,016 23,138,108 Assets Transferred 6,525 NIL Space Sharing Cost 7,503,999 6,830,250 Employee Sharing cost 3,924,545 7,346,005

25 Related Party Transaction For the Year ended For the Year ended 31st March st March 2011 IFMR Mezzanine Finance Private Limited Advance given 471,828 7,141,419 Advance received back 20,022,958 7,841,207 Share Application Money paid NIL 20,670,000 Share application money refunded NIL 145,320,000 Assets Transferred 49,553 NIL Assets Returned back NIL 25,852 Space Sharing Cost 23,94,134 2,838,605 Employee Sharing Cost 3,136,258 5,167,744 NE Agri Services Private Limited Advance given 872,202 10,217,324 Advance Received back 130,000 8,786,733 IFMR Finance Foundation Advance given 283,624 6,054,411 Advance received back 533,714 11,795,261 Assets Transferred 36,857 NIL Space Sharing Cost 1,643,734 1,756,350 Employee Sharing Cost 1,632,075 4,018,267 Grant Given 4,500,000 5,000,000 Pudhuaaru Financial Services Advance given 92,332 9,690 Private Limited Advance received back NIL 1,266,861 Assets Transferred 197,915 NIL Share Application Money paid NIL 150,000,000 Investment in Equity Shares NIL 153,500,000 Megha Holdings Private Limited Advance given NIL 3,030,793 Advance received back 1,963,643 5,208,391 Share Application Money paid 6,500, ,990,821 Share application money refunded 480,079,603 83,893,827 Investment in Equity Shares 5,000,000 NIL Space Sharing Cost 1,116, ,300 Employee Sharing Cost 679, ,860 Advance received towards sale of shares NIL 203,192,328 NE Crafts Apparel and Furnishings Advance given 25,878 35,432 Company Private Limited Advance received back 100,193 NIL NE Education Private Limited Advance given 32,227 3,560 Advance received back 62,170 NIL NE Green Power Private Limited Advance given 189, ,824 NE Housing Company Private Limited Advance given NIL 50,653 Advance received back NIL 81,618 NE Medicare Private Ltd Advance given NIL 54,827 Advance received back NIL 81,563 NE Milkrush Private Limited Advance given 91, ,848 NE Processed Foods Private Limited Advance given 13,221 58,507 Advance received back NIL 74,892 NE Rural BPO Company Private Limited Advance given 32,319 2,871 Advance received back 65,955 NIL

26 Related Party Transaction For the Year ended For the Year ended 31st March st March 2011 NE Rural Supply Chain Private Limited Advance given NIL 70,693 Advance returned back NIL 82,076 NE Rural Tourism Private Limited Advance given 8,007,709 7,021,112 Advance received back NIL 29,273 Space sharing cost 821,868 NIL Employee sharing cost 2,322, ,725 NE Aqua Private Limited Advance given 31,694 2,538 Advance received back 65,955 NIL IKP Center for Advancement in Agricultural Practices Advance given 3,483 NIL Advance received back 308,884 NIL Space sharing cost 107,201 NIL (d) Outstanding balances with related parties as on balance sheet date: Related Party Transaction For the Year ended For the Year ended 31st March st March 2011 IFMR Trusteeship Services Private Limited Remuneration to Trustees 60,000 40,000 Advance given and outstanding 71,007 44,758 IFMR Ventures India Private Limited*** Advance given and outstanding 13,128,268 12,687,763 Investment in Equity Shares 999, ,900 IFMR Rural Finance Services Investment in Equity 182,999, ,099,900 Private Limited Shares Share Application money 14,000,000 13,747,295 Advance given and outstanding 1,022,236 1,870,958 IFMR Rural Channels and Investment in Equity Shares 248,774,000 NIL Services Private Limited Advance given and outstanding 552,954 NIL Pudhuaaru Kshetriya Gramin Advance given and outstanding 29,666 NIL Financial Services*** Share application money 25,900,000 17,069,903 Investment in Equity shares 100, ,000 Dhanei Kshetriya Gramin Services*** Advance given and outstanding 13,881 (2,119) Share application 44,750,000 NIL Investment in Equity shares 100, ,000 Sahastradhara Kshetriya Advance given and Gramin Services*** outstanding (70,245) NIL Share application 36,750,000 NIL Investment in Equity shares 100, ,000 NE Emerging Channels Services Investment in Private Limited Equity Shares 99,990 99,990 Share Application 13,902,000 6,847,271 IFMR Capital Finance Private Limited Advance given and outstanding 1,190,876 3,909,823 Investment in Equity Shares 602,432, ,432,843 IFMR Mezzanine Finance Private Limited Advance given and outstanding 529,043 14,500,228 Investment in Equity Shares 100,400, ,400,000 NE Agri Services Private Limited*** Advance given and outstanding 8,482,832 7,740,630 Investment in Equity Shares 3,999,900 3,999,900

27 Related Party Transaction For the Year ended For the Year ended 31st March st March 2011 IFMR Finance Foundation Investment in Equity Shares 99,900 99,900 Advance given and outstanding 4,407,982 1,365,406 Pudhuaaru Financial Services Investment Purchase Private Limited Equity Shares NIL 202,992,328 Advance given and outstanding 290,247 NIL Megha holdings Private Limited Investment in Equity Shares 10,093,300 5,093,300 Share Application Money NIL 478,579,603 Advance given and outstanding NIL 185,072 NE Crafts Apparel and Furnishings Investment in Company Private Limited *** Equity Shares 99,900 99,900 Advance given and outstanding NIL 74,315 NE Education Private Limited*** NE Green Power Private Limited*** NE Milkrush Private Limited*** Ne Processed Foods Private Limited NE Rural BPO Company Private Limited*** NE Rural Tourism Private Limited NE Aqua Private Limited *** Investment in Equity Shares 99,900 99,900 Advance given and outstanding NIL 29,943 Investment in Equity Shares 99,900 99,900 Advance given and outstanding 964, ,314 Investment in Equity Shares 99,900 99,900 Advance given and outstanding 691, ,145 Advance given and outstanding 13,221 NIL Investment in Equity Shares 99,900 99,900 Advance given and outstanding NIL 33,636 Investment in Equity Shares 99,900 99,900 Advance given and outstanding 18,954,598 7,802,279 Investment in Equity Shares 99,900 99,900 Advance given and outstanding NIL 34,261 IKP Center for Advancement in Investment in Agricultural Practices Equity Shares 49,000 49,000 Advance given and Outstanding 3, *** Provision for the entire investment in the subsidiary has been made.

28 IV. Deferred tax The trust has reviewed its deferred tax assets and liabilities as of March 31, The timing differences relate to carried forward losses, employee benefits and provision for doubtful advances, which has resulted in deferred tax asset of Rs. 185,269,422. However in the absence of virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized, the said deferred tax asset has not been recognized. V. Leases Operating leases: The trust has not entered into any non-cancellable operating leases. The trust has taken premises on cancellable operating lease and lease payments on such operating lease amounting to Rs. 8,955,931 (Previous year Rs. 8,789,113) have been charged to Statement of Profit and Loss. Finance leases: The trust has not taken any finance lease. 23. Trust has entered into a share purchase agreement with the promoters of Pamara Micro Finance Private Limited during (now known as Pudhuaaru Financial Services Private Limited) for acquiring the shares of this Company. As per the agreement, an amount of Rs. 150,000 has been retained by the Trust and shown under Note 8 Other Current liabilities, which would become payable on completion of certain secretarial matters in a manner that would not attract any legal consequences to the buyers or their successors. 24. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. For and on behalf of IFMR Trust Bindu Ananth President V.VijyaRaghavan Head Corporate center Place: Chennai Date:

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