Kotak Investment Advisors Limited Annual Report CHANGING WITH INDIA. FOR INDIA.

Transcription

1 Investment Advisors Limited Annual Report CHANGING WITH INDIA. FOR INDIA. 1

2 DIRECTORS REPORT To the Members KOTAK INVESTMENT ADVISORS LIMITED The Directors present their Twenty-Third Annual Report together with the audited accounts of your Company for the financial year ended 31st March, FINANCIAL SUMMARY/ HIGHLIGHTS (` in Lacs) Particulars For the year ended 31st March 2017 For the year ended 31st March 2016 Gross Income 9, , Profit before Tax Profit after Tax Add: Surplus brought forward from the previous year 26, , Amount available for appropriation 27, , Surplus carried to the Balance Sheet 27, , OPERATIONS The Company acts as the investment manager for domestic funds operating in the alternate assets domain, the aggregate assets under management of which as on 31st March 2017 is `3, Crore. During the year ended 31st March 2017, certain funds managed by the Company made distributions to investors aggregating to ` Crore comprising of income and divestment proceeds. The Company also provides non-binding advisory services to offshore funds managed by Group s international subsidiaries. Fee income from the business of investment management/advisory was `51.14 Crore for the financial year ended 31st March 2017 as compared to `45.70 Crore for the previous financial year. The earnings per share of the Company were `12.90 per share for the financial year ended 31st March 2017 as compared to `10.16 per share during the previous financial year. DIVIDEND The Directors do not recommend any dividend for the financial year ended on 31st March RISK MANAGEMENT & INTERNAL FINANCIAL CONTROL The Company has adopted comprehensive risk management policy and procedures for its business of investment management of domestic funds operating in the alternate assets domain. Under these policies and procedures, the risk analysis is done at the time of doing any transactions as well as on periodic intervals. The Board of Directors confirms that your Company has laid down set of standards, processes and structure which enables to implement Internal Financial controls across the organization with reference to Financial Statements and that such controls are adequate and are operating effectively. During the year under review, no material or serious observation has been observed for inefficiency or inadequacy of such controls. DIRECTORS & MEETINGS Director retiring by rotation Mr. Jaimin Bhatt retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Change in Directors during the year Pursuant to the recommendation of Nomination Committee, the Board at its Meeting held on January 17, 2017 approved the appointment of Mr. Sriniwasan Subramanian as an additional director and designated him as Managing Director of the Company. 2 Annual Report

3 Further, the shareholders of the company had approved the appointment of Mr. Sriniwasan Subramanian as Managing director of the Company at the Extra-Ordinary general meeting held on April 18, During the year under review, Mr. C. Jayaram resigned as Director of the Company w.e.f. May 1, Change in Company Secretary of the Company During the year under review Mr. Deepak Mukhija resigned w.e.f. December 7, 2016, subsequent to his resignation, Mr. Umang Patel has been appointed as Company Secretary of the Company w.e.f. January 17, Board Meetings During the financial year , nine meetings of Board of Directors were held on the following dates. Sr. No Date of Meeting 1 27/04/ /05/ /06/ /06/ /07/ /09/ /10/ /10/ /01/2017 Details of number of Board Meetings attended by the Directors are as under: Name of Director No. of meetings entitled to attend No. of meetings attended Mr. C. Jayaram 1 1 Ms. Shanti Ekambaram 9 9 Mr. Jaimin Bhatt 9 8 Mr. Dipak Gupta 9 8 Mr. Sriniwasan Subramanian 0 0 CONSTITUTION OF COMMITTEES Audit Committee Although the Company is not required to form an Audit Committee under Section 177 of the Companies Act, 2013, in furtherance of Group s commitment to good corporate governance practices, the Company had constituted an Audit Committee in the year 2008 and also adopted its terms of reference. The Audit Committee consists of Mr. Dipak Gupta, Mr. Jaimin Bhatt and Ms. Shanti Ekambaram, with any two members forming the quorum. Nomination Committee The Company is a subsidiary of Mahindra Bank Limited ( KMBL ) and the Nomination Committee was constituted as per the directive of the Reserve Bank of India for KMBL and its subsidiaries. The Nomination Committee consists of Mr. Dipak Gupta, Mr. Jaimin Bhatt and Ms. Shanti Ekambaram, with any two members forming the quorum. Corporate Social Responsibility Committee During the financial year , the Company constituted a Corporate Social Responsibility Committee ( CSR Committee ). 3

4 The CSR Committee consists of Mr. Dipak Gupta, Mr. Jaimin Bhatt and Ms. Shanti Ekambaram, with any two members forming the quorum. During the year ended 31st March 2017, two meetings of the CSR Committee were held on the following dates. Sr. No. Date of CSR Committee Meeting Name of members who attended the meeting 1 27/04/2016 Mr. C. Jayaram Mr. Jaimin Bhatt Ms. Shanti Ekambaram 2 27/10/2016 Mr. Dipak Gupta Mr. Jaimin Bhatt Ms. Shanti Ekambaram Risk Management Committee The Company has a two level structure of Risk Management Committee. The Tier I level is Risk Management Committee (Operations) consisting four members namely, Mr. S. Sriniwasan (Chief Executive Officer-Real Estate & Special Situation Funds), Mr. Alroy Lobo (Chief Executive Officer-Listed Strategies), Mr. Rajeev Saptarshi and Mr. Hemal Mehta (operating management members). The Tier II level is Risk Management Committee (Board) consisting four members namely, Mr. Dipak Gupta (Director), Mr. Jaimin Bhatt (Director), Mr. S. Sriniwasan (Managing Director) and Mr. Alroy Lobo (Chief Executive Officer-Listed Strategies). PARTICULARS OF LOAN, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 The Company has not made any loans or given guarantee covered under Section 186 of the Companies Act, The details of the investments under section 186 of the Companies Act, 2013 are annexed to this report. CORPORATE SOCIAL RESPONSIBILITY ( CSR ) Your Company s CSR Committee drives the CSR programme of its holding company, i. e. Mahindra Bank Limited. Your Company has a Board approved CSR policy, charting out its CSR approach. The CSR expenditure incurred for the financial year under Section 135 of the Companies Act, 2013 amounts to `5.00 Lacs as against `10 Lacs CSR spent in the financial year Your Company is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company. Following is the web-link to access the CSR policy and projects or programs: Annual Report on CSR activities in accordance with Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, has been annexed to this report. RELATED PARTY TRANSACTIONS All Related Party Transactions that were entered into during the financial year were on arm s length basis and were in the ordinary course of business. Pursuant to Section 134(3)(h) read with Rule 8(2) of the Companies (Accounts) Rules, 2014, there are no transactions to be reported under Section 188(1) of the Companies Act, Annual Report

5 All Related Party Transactions as required under Accounting Standards AS18 are reported in Notes to Accounts. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The provisions pertaining to the Conservation of Energy and Technology Absorption are not applicable to your Company. Following are the foreign exchange earnings and outgo for the financial year ended on 31st March, 2017: (i) (ii) Foreign exchange inflow: `19.57 crores Foreign exchange outgo: `38.7 Lacs AUDITORS The members of the Company had, at the Twentieth Annual General Meeting, appointed Messers Price Waterhouse, Chartered Accountants, Mumbai (Regn. No E) as Auditors of the Company for five years, subject to ratification every year by the members. Accordingly, the matter shall be placed before the members in the ensuing Annual General Meeting. EMPLOYEES The Company recognizes that human capital is the key to success and growth in the Company s business. As on 31st March 2017, the Company has 45 employees. The employees are highly qualified with approx. 23 graduates from premier business schools and approx. 17 being professionals like CAs, CSs and Lawyers. A statement giving the particulars of employees as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed. DIRECTORS RESPONSIBILITY STATEMENT The Directors, based on representations received from the operational management team, confirm in pursuance of Section 134(5) of the Companies Act, 2013, that: (i) (ii) (iii) (iv) (v) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any; the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at the end of the financial year and of the profits of your Company for the financial year ended 31st March, 2017; they have taken proper and sufficient care to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities; the annual accounts have been prepared on a going concern basis; they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. ANNEXURES Extract of Annual Return under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12 (1) of Companies (Management and Administration) Rules, 2014 is annexed. 5

6 ACKNOWLEDGEMENT We thank our members, trustees, investors of funds under management, investee companies and bankers for their continued support during the year. We place on record our appreciation for the contributions made by the employees at all levels for their commendable efforts, teamwork and professionalism. We would like to place on record our gratitude for the valuable guidance and support received from the Securities and Exchange Board of India and other Government and Regulatory agencies and look forward to their continued support in the future. For and on behalf of the Board of Directors Sriniwasan Subramanian Dipak Gupta Managing Director Director (DIN: ) (DIN: ) Place: Mumbai Date: 24th April, Annual Report

7 ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITES TO BE INCLUDED IN THE BOARD S REPORT 1. A brief outline of the company s CSR policy, including overview of programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs. Outline of the company s CSR policy: Vision and mission of the Company and Group towards the corporate social responsibility Governance of the corporate social responsibility activity of the Company Statement of commitment of the Company and Group towards the CSR activity CSR initiatives to be undertaken by the Company and Group in the areas of Promoting Education, Enhancing vocational skills and livelihood projects, Promoting preventive healthcare and sanitation, Reducing inequalities faced by socially and economically backward groups, Environmental Sustainability, Relief and rehabilitation, Clean India (Swachh Bharat) and Sports. Monitoring and Review of CSR Activities 2. The Composition of the CSR Committee The CSR Committee consists of Mr. Dipak Gupta, Mr. Jaimin Bhatt and Ms. Shanti Ekambaram, with any two members forming the quorum. 3. Average net profit of the company for last three financial years. ` 9.13 Crore Prescribed CSR Expenditure (two per cent. of the amount as in item 3 above) ` Lacs 5. Details of CSR spent during the financial year: a) Total amount to be spent for the financial year: ` Lacs b) Amount unspent, if any; ` Lacs c) Manner in which the amount spent during the financial year is detailed below. (1) (2) (3) (4) (5) (6) (7) (8) (9) CSR project/ Sector in which Programme / Programme / project Cumulative Expenditure activity the project is project wise wise actual spend upto reporting period identified covered budgeted during the year (since FY ) amount Direct expenditures S. No. Area of project implementation (Name of the District / s, State / s where project / programme was undertaken Programme / project wise actual spend during the year Overheads Amount spent through implementing agency 1 Contributions to Education Foundation Education based interventions children and youth from underprivileged families Mumbai 5,00, ,24, , ,00, (Out of this, Education Foundation has not utilised ` 13,000/ -. This will be used towards meeting expenses for FY ) 5,00,000 ( Implemented through the Education Foundation- KEF) TOTAL (` ) 5,00, ,24, , In case the company has failed to spend the two per cent of the average net profit of the last three financial year or any part thereof, the company shall provide the reasons for not spending the amount in its Board report. The Company is building its CSR capabilities on a sustainable basis and is committed to gradually increase its CSR spend in the coming years. 7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company. The CSR Committee of the Board confirms that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company. Chief Executive Officer Chairman (CSR Committee) 7

8 PARTICULARS OF INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 INCLUDED IN THE BOARD S REPORT Particulars (As at 31st March, 2017) Face Value (In `) Quantity Amount (In `) EQUITY SHARES (UNQUOTED) IVR Hotels and Resorts Limited 10 1,762 43,022,754 S H Mangalam Realty Private Limited - Class A Equity Shares ,470 S H Mangalam Realty Private Limited - Class B Equity Shares 10 3,881 38,810 Mahindra Aerospace Private Limited 10 1,013,309 19,800,058 Matrix Business Services India Private Limited 10 13,255 2,981,402 Fortune Estate Developers Private Limited - Class B Equity Shares 10 4,090 50,062 Native Buildcon Private Limited - Class A Equity Shares ,080 Native Buildcon Private Limited - Class B Equity Shares ,000 Prolifics Corporation Limited (Formerly known as SemanticSpace Technologies Limited) 10 22,313 7,575,710 Prolifics Corporation Limited (Formerly known as SemanticSpace Technologies Limited) - Series A ,420 Equity Shares with Differential Voting Rights NSL Renewable Power Private Limited ,000 18,249,840 Meriton Infotech Private Limited 10 1,154, ,147,628 Samson Maritime Limited 10 39,762 20,292,537 Samson Maritime Limited - Class A Equity Shares with Differential Voting Rights ,767 Infrastructure Debt Fund Limited 10 62,000, ,000,000 EQUITY SHARES (QUOTED) Minda Corporation Limited 2 186,371 7,454,840 PREFERENCE SHARES (UNQUOTED) Prolifics Corporation Limited (Formerly known as SemanticSpace Technologies Limited) - Series B 10 18,644 1,864,400 Redeemable Optionally Convertible Cumulative Participatory Preference Shares Meriton Infotech Private Limited - Compulsorily Convertible Preference Shares 10 89,726 8,420,786 Samson Maritime Limited - Series A Compulsorily Convertible Cumulative Preference Shares ,431 10,071,465 DEBENTURES (UNQUOTED) S H Mangalam Realty Private Limited - Series A Optionally Convertible Redeemable Debentures 10 1,292,788 12,927,880 Fortune Estate Developers Private Limited - Series A Redeemable Optionally Convertible Debentures ,623 7,762,300 Fortune Estate Developers Private Limited - Series B Redeemable Optionally Convertible Debentures ,979 17,997,900 Native Buildcon Private Limited - Compulsorily Convertible Debentures 1,000 84,709 84,709,000 DEBENTURES (QUOTED) SS Group Private Limited - Secured Redeemable Non-Convertible Debentures 985, ,832,423 Lodha Buildcon Private Limited - Secured Non-Convertible Redeemable Debentures 1,000, ,000,000 Nirmal Lifestyle Limited - Secured Non-Convertible Redeemable Debentures 1,000, ,000,000 For and on behalf of the Board of Directors Sriniwasan Subramanian Dipak Gupta Managing Director Director (DIN: ) (DIN: ) Place: Mumbai Date: April 24, Annual Report

9 ANNEXURE A FORM NO. MGT-9 Extract of Annual Return as on the financial year ended on 31st March, 2017 [Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014] I. REGISTRATION AND OTHER DETAILS i. CIN U65990MH1994PLC ii. Registration Date 31/03/1994 iii. Name of the Company Investment Advisors Limited iv. Category / Sub-Category of the Company Public Limited Company v. Address of the Registered office and contact details 27-BKC, 7th Floor, Plot No. C-27, G Block, Bandra-Kurla Complex Bandra (East), Mumbai Tel No.: Fax No.: vi. Whether listed company (Yes / No) NO vii. Name, Address and Contact details of Registrar and Transfer Agent, if any Not Applicable II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY All the business activities contributing 10% or more of the total turnover of the company shall be stated:- Sl. No. Name and Description of main products / services NIC Code of the Product/ service % to total turnover of the company 1 Investment Management and Advisory % III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES: Sl. No. Name and Address of the Company CIN/GLN Holding/ Subsidiary/ Associate % of shares held Applicable Section 1 Mahindra Bank Limited 27-BKC, Plot No. C-27, G Block, Bandra- Kurla Complex Bandra (East), Mumbai L65110MH1985PLC Holding Company 51% 2(87)(ii) 9

10 IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity) i) Category-wise Share Holding Category of shareholders A. Promoters & Promoter Group No. of Shares held at the beginning of the year Demat Physical Total % of total shares No. of Shares held at the end of the year Demat Physical Total % of total shares % Change during the year (1) Indian a) Individual/ HUF b) Central Govt c) State Govt(s) d) Bodies Corp % % Nil e) Banks / FI % % Nil f) Any Other Sub-total (A) (1): % % Nil (2) Foreign a) NRIs - Individuals b) Other Individuals c) Bodies Corp d) Banks / FI e) Any Other Sub-total (A)(2) Total shareholding of Promoter (A) = (A)(1)+(A)(2) % % Nil B. Public Shareholding Institutions a) Mutual Funds b) Banks / FI c) Central Govt d) State Govt.(s) e) Venture Capital Funds f) Insurance Companies g) FIIs h) Foreign Venture Capital Funds i) Others (specify) Sub-total (B)(1) Non-Institutions a) Bodies Corp i) Indian ii) Overseas Shares are held jointly with nominees 10 Annual Report

11 Category of shareholders No. of Shares held at the beginning of the year Demat Physical Total % of total shares No. of Shares held at the end of the year Demat Physical Total % of total shares % Change during the year b) Individuals i) Individual shareholders holding nominal share capital upto ` 1 lakh ii) Individual shareholders holding nominal share capital in excess of ` 1 lakh c) Others (specify) Sub-total (B)(2) Total Public Shareholding (B) = (B)(1)+(B)(2) C. Shares held by Custodian for GDRs & ADRs Grand Total (A+B+C) % % NIL ii) Shareholding of Promoters Sl. No. Shareholder s Name 1. Mahindra Bank Limited 2. Mahindra Capital Company Limited TOTAL Shareholding at the beginning of the year No. of Shares Shareholding at the end of the year No. of Shares % change in shareholding during the year % of total Shares of the Company % of Shares Pledged / encumbered to total shares % of total Shares of the Company % of Shares Pledged / encumbered to total shares % None % None None * 49% None * 49% None None *60 Shares are held jointly with nominees 11

12 iii) Change in Promoters Shareholding (please specify, if there is no change): There is no change in the Promoters Holding during the financial year ended on 31st March, Sl. No. Particulars 1. At the beginning of the year Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc.): At the End of the year Shareholding at the beginning of the year No. of Shares % of total Shares of the Company Cumulative Shareholding during the year No. of Shares % of total Shares of the Company* iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs) Sl. No. For Each of the Top 10 Shareholders At the beginning of the year Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.): At the End of the year (or on the date of separation, if separated during the year) Shareholding at the beginning of the year No. of Shares % of total Shares of the Company Shareholding at the end of the year No. of Shares % of total Shares of the Company NIL NIL NIL NIL NIL NIL NIL NIL v) Shareholding of Directors and Key Managerial Personnel: Sl. No. For Each of the Directors and KMP 12 Annual Report Shareholding at the beginning of the year No. of Shares % of total Shares of the Company Cumulative Shareholding during the year No. of Shares % of total Shares of the Company At the beginning of the year 10* % Nil Nil Date wise increase / decrease in Shareholding during the year Decrease: Nil Nil specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus/ sweat equity etc.): Mr. C. Jayaram Ceases to be director of the Company w.e.f. May 1, At the End of the year Nil Nil Nil NIL *10 shares held as a nominee of Mahindra Capital Company Limited ( KMCC ) jointly with KMCC V. INDEBTEDNESS: None Indebtedness of the Company including interest outstanding/accrued but not due for payment (` in Lac) Particulars Secured Loans excluding deposits Unsecured Loans Deposits Total Indebtedness Indebtedness at the beginning of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii) Change in Indebtedness during the financial year Addition Reduction Net Change Indebtedness at the end of the financial year i) Principal Amount ii) Interest due but not paid iii) Interest accrued but not due Total (i+ii+iii)

13 VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: Sl. no. Particulars of Remuneration Name of MD/ WTD/Manager Total Amount * Subramanian Sriniwasan 1. Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, ,87,200 8,028-53,87,200 8, Stock Option Sweat Equity Commission - as % of profit - others, specify Others, please specify - - Total (A) 53,95,228 53,95,228 Ceiling as per the Act *Mr. Subramanian Sriniwasan was appointed as Managing Director of the Company w.e.f. January 17, 2017 B. Remuneration to other directors: Not Applicable Sr. Particulars of Remuneration No. 1. Independent Directors Fee for attending board committee meetings Commission Others, please specify Total (1) 2. Other Non-Executive Directors Fee for attending board committee meetings Commission Others, please specify Total (2) Total (B)=(1+2) Total Managerial Remuneration Overall Ceiling as per the Act Name of Director Total Amount 13

14 C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD: In `. Section 203 of Companies Act, 2013 is not applicable to the Company, as paid-up capital is less than ` 10 crores. Sl. no. Particulars of Remuneration Key Managerial Personnel CEO Company Secretary CFO Total 1. Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 (b) Value of perquisites u/s 17(2) Income-tax Act, 1961 (c) Profits in lieu of salary under section 17(3) Income-tax Act, Stock Option 3. Sweat Equity Commission - as % of profit - others, specify Others, please specify Total VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NIL Type Section of the Companies Act Brief Description Details of Penalty / Punishment/ Compounding fees imposed Authority [RD / NCLT / COURT] Appeal made, if any (give details) A. COMPANY Penalty Punishment Compounding B. DIRECTORS Penalty Punishment Compounding C. OTHER OFFICERS IN DEFAULT Penalty Punishment Compounding Annual Report

15 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF KOTAK INVESTMENT ADVISORS LIMITED Report on the Financial Statements 1. We have audited the accompanying financial statements of Investment Advisors Limited ( the Company ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Management s Responsibility for the Financial Statements 2. The Company s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ( the Act ) with respect to the preparation of these financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditors Responsibility 3. Our responsibility is to express an opinion on these financial statements based on our audit. 4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report. 5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company s Directors, as well as evaluating the overall presentation of the financial statements. 7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements. Opinion 8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 9. As required by the Companies (Auditor s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the Order ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order. 15

16 10. As required by Section 143 (3) of the Act, we report that: (a) (b) (c) (d). (e) (f) (g) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us: i. The Company does not have any pending litigations as at March 31, 2017 which would impact its financial position. ii. iii. iv. The Company has long-term contracts as at March 31, 2017 for which there were no material foreseeable losses. There are no derivative contracts as March 31, There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management. Refer Note 29. For Price Waterhouse Firm Registration Number: E Chartered Accountants Sharad Vasant Place : Mumbai Partner Date : April 24, 2017 Membership Number: Annual Report

17 ANNEXURE A TO THE INDEPENDENT AUDITOR S REPORT Referred to in paragraph 10 (f) of the Independent Auditors Report of even date to the members of Investment Advisors Limited on the financial statements for the year ended March 31, 2017 Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act 1. We have audited the internal financial controls over financial reporting of Investment Advisors Limited ( the Company ) as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management s Responsibility for Internal Financial Controls 2. The Company s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act. Auditors Responsibility 3. Our responsibility is to express an opinion on the Company s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. 4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company s internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting 6. A company s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company s assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting 7. Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion 8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For Price Waterhouse Firm Registration Number: E Chartered Accountants Sharad Vasant Place :Mumbai Partner Date : April 24, 2017 Membership Number :

18 ANNEXURE B TO THE INDEPENDENT AUDITOR S REPORT Referred to in paragraph 9 of the Independent Auditors Report of even date to the members of Investment Advisors Limited on the financial statements as of and for the year ended March 31, 2017 i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets. (b) (c) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable. The Company does not own any immovable properties. Therefore, the provisions of Clause 3(i)(c) of the said Order are not applicable to the Company. ii. iii. iv. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the said Order are not applicable to the Company. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company. The Company has not entered in to transactions with the parties covered by Section 185 of the Companies Act, 2013 and thus the provisions of this section are not applicable to the Company. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it. v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, income tax, service tax, and other material statutory dues, as applicable, with the appropriate authorities. (b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of provident fund, income tax, service tax and other material statutory dues, as applicable, which have not been deposited on account of any dispute. viii. ix. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company. x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management. xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act. 18 Annual Report

19 xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company. xiii. The Company has entered into transactions with related parties in compliance with the provisions of Section 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, Further, the Company is not required to constitute an Audit Committee under Section 177 of the Act, and accordingly, to this extent, the provisions of Clause 3(xiii) of the Order are not applicable to the Company. xiv. xv. xvi. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company. For Price Waterhouse Firm Registration Number: E Chartered Accountants Sharad Vasant Place : Mumbai Partner Date : April 24, 2017 Membership Number :

20 BALANCE SHEET AS AT 31ST MARCH, 2017 ` in lacs Notes 31st March st March 2016 EQUITY AND LIABILITIES Shareholders funds Share capital Reserves and surplus 4 27, , Non-current liabilities Long term provisions Current liabilities Trade payables 23 total outstanding dues of micro enterprises - - and small enterprises and total outstanding dues of creditors other than 1, , micro enterprises and small enterprises Other current liabilities , Short-term provisions TOTAL 30, , ASSETS Non-current assets Fixed Assets Property, Plant and Equipment Intangible assets Non-current investments 10 25, , Deferred tax assets (net) Long-term loans and advances Current assets Current investments 12 1, , Trade receivables Cash and bank balances , Short-term loans and advances Other current assets 16 1, , TOTAL 30, , Significant Accounting Policies 2 The accompanying notes are an integral part of these financial statements. This is the Balance Sheet referred to in our report of even date. For Price Waterhouse Firms Registration Number : E Chartered Accountants For and on behalf of the Board of Directors Sharad Vasant Dipak Gupta S Sriniwasan Partner Director Managing Director Membership No Rajeev Saptarshi Umang Patel Mumbai Chief Operating Officer Company Secretary Dated : April 24, 2017 Dated : April 24, Annual Report

21 STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2017 ` in lacs Note 31st March st March 2016 INCOME Revenue from operations 17 5, , Other income 18 4, , Total Income 9, , EXPENSES Employee Benefit Expenses 19 4, , Depreciation and amortization expenses Other expenses 20 4, , Total Expenses 9, , Profit before tax Tax expense Current tax - Pertaining to profit/(loss) for the current period (MAT) Adjustment of tax relating to earlier periods MAT Credit Entitlement (156.14) Deferred tax (109.68) Profit for the year Earnings per equity share: Basic and Diluted (`) Significant Accounting Policies 2 The accompanying notes are an integral part of these financial statements. This is the Statement of Profit and Loss referred to in our report of even date. For Price Waterhouse Firms Registration Number : E Chartered Accountants For and on behalf of the Board of Directors Sharad Vasant Dipak Gupta S Sriniwasan Partner Director Managing Director Membership No Rajeev Saptarshi Umang Patel Mumbai Chief Operating Officer Company Secretary Dated : April 24, 2017 Dated : April 24,

22 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017 ` in lacs Cash flow from operating activities Net Profit before taxation Adjustments for: Depreciation and amortization expenses (Profit)/ Loss on sale of Current Investments (1,109.12) (74.72) (Profit)/ Loss on sale of Non Current Investments (639.44) (Profit) / Loss on disposal of Fixed assets (3.95) (18.77) Dividend on Current Investments - (43.39) Dividend on Non Current Investments (734.21) (2,179.45) Diminution / (Write back) in value of Long Term Investments Interest on Non Current investments (1,977.03) (1,593.76) Interest on Current investments/fixed deposit (220.11) (291.35) Operating profit before working capital changes (3,933.69) (3,017.73) Adjustments for: (Increase) / Decrease in Short term and Long term loans and advances (242.32) (282.38) (Increase) / Decrease in Trade Receivable (548.78) (Increase) / Decrease in Other current assets (124.97) (542.36) Increase / (Decrease) in Other current liabilities (965.75) 1, Increase / (Decrease) in Trade Payables , Increase / (Decrease) in Short term and Long term provisions (16.78) Cash (used in) / generated from operations (4,391.59) (1,961.01) Direct taxes paid (net of refunds and Interest thereon) Net cash flow (used in) / from operating activities (A) (4,535.11) (2,573.82) 22 Annual Report

23 CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017 ` in lacs Cash flow from investing activities Purchase of fixed assets (91.56) (119.84) Proceeds from sale of fixed assets Purchase of investments (27,414.44) (4,943.65) Sale of investments 26, , Interest / dividend received on Investments 2, , Net cash flow (used in) / from investing activities (B) 1, , Cash flow from financing activities - - Net cash flow from financing activities (C) - - Net Increase / (Decrease) In Cash And Cash Equivalents (A + B + C) (2,811.84) 2, Cash And Cash Equivalents At The Beginning Of The Year 3, , Cash And Cash Equivalents At The End Of The Year , (2,811.84) 2, Notes: 1 The above Cash Flow statement has been prepared under the Indirect Method as set out in Accounting Standard-3 Cash Flow Statements specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, Cash and Bank Balance at the year end includes cash balance ` Nil (Previous year ` Nil) and bank balances ` Lacs (Previous year ` 3, Lacs). 3 The corresponding amounts of previous year have been re-grouped, wherever necessary. This is the Cash Flow Statement referred to in our report of even date. For Price Waterhouse Firms Registration Number : E Chartered Accountants For and on behalf of the Board of Directors Sharad Vasant Dipak Gupta S Sriniwasan Partner Director Managing Director Membership No Rajeev Saptarshi Umang Patel Mumbai Chief Operating Officer Company Secretary Dated : April 24, 2017 Dated : April 24,