16 IDFC FOUNDATION BOARD OF DIRECTORS AUDITORS PRINCIPAL BANKER REGISTERED OFFICE

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1 16 IDFC FOUNDATION BOARD OF DIRECTORS Mr. Anil Baijal Chairman Dr. Rajiv B. Lall Mr. Vikram Limaye Mr. Cherian Thomas Mr. Sunil Kakar Mr. Animesh Kumar AUDITORS Deloitte Haskins & Sells Chartered Accountants PRINCIPAL BANKER HDFC Bank Limited REGISTERED OFFICE The Capital Court 2 nd Floor, Olof Palme Marg Munirka, New Delhi Tel: Fax: info@idfc.com CIN: U93000DL2011NPL215231

2 s' Report TO THE MEMBERS Your s have pleasure in presenting the Fourth Aual Report together with the audited accounts for the year ended March 31, FINANCIAL RESULTS PARTICULARS Total Income 151,889, ,282,131 Less: Total Expenditure 144,136, ,154,548 Surplus for the year 7,753,051 1,127,583 OPERATIONAL REVIEW IDFC Foundation ( the Company ) was incorporated in India on March 4, 2011 (incorporated as a limited Company under Section 25 of the Companies Act, 1956). The Company is a wholly-owned subsidiary of IDFC Limited. The primary focus of the Company is to contribute to the development of Infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society), capacity building for government departments and agencies and in developing social infrastructure such as education and healthcare. The Company also oversees the working of its joint ventures with the State Governments of Karnataka, Uttarakhand and Delhi. The Board of s during a strategic session held on April 4, 2014 discussed in details the provisions of Section 135 of the Companies Act, 2013 ( The Act ) alongwith the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("Rules"). As per the Rules, IDFC Foundation would carry out CSR activities as envisaged under Schedule VII of the Act as an implementing agency of IDFC Limited. The Company would primarily focus on CSR activities as well-defined projects or programmes promoting the development of (a) livelihoods; (b) rural areas; (c) social infrastructure such as healthcare and education; and (d) other infrastructure that would meet the objectives of Inclusion and environmental sustainability such as water supply, sanitation, sustainable urbanization, renewable energy, slum re-development and affordable housing. COMPANIES ACT, 2013 Most of the provisions of the Companies Act, 2013 and the Rules notified by the Ministry of Corporate Affairs ("MCA") in this regard, have come into force with effect from April 1, MCA issued a General Circular no. 8/2014 dated April 4, 2014 which clarified that the Financial Statements, Auditors' Report and the Board s Report in respect of the previous year ended March 31, 2014 will be in accordance with the Companies Act, 1956 and Rules made there under. Your Company shall comply with the provisions of the Companies Act, 2013, as applicable. SHAREHOLDERS UPDATE IDFC PPP Trusteeship Company Limited which was a subsidiary of the Company had made an application to the Registrar of Companies, Maharashtra, Mumbai ("ROC") under Fast Track Exit Mode 2011 on April 25, 2013 to get its name struck off from the Register of Companies maintained by ROC. On August 23, 2013, the name of IDFC PPP Trusteeship Company Limited was struck off by ROC and was dissolved pursuant to Section 560 of the erstwhile Companies Act, DIRECTORS During the year, Dr. Rajeev Uberoi (DIN ) and Ms. Ritu Anand (DIN ) resigned as s of the Company w.e.f. June 5, 2013 and November 29, 2013 respectively. The Board placed on record it's appreciation for the valuable services rendered by Dr. Uberoi and Ms. Ritu Anand during their tenure as s of the Company. Mr. Animesh Kumar (DIN ) and Mr. Sunil Kakar (DIN ) would retire at the ensuing Aual General Meeting ("AGM") and being eligible, offer themselves for reappointment. The Board of s recommends reappointment of the above s at the ensuing AGM. AUDIT COMMITTEE During the period, Dr. Rajeev Uberoi resigned from the Board and accordingly, the Audit Committee of the Company was reconstituted comprising the following: Mr. Sunil Kakar Chairman (DIN ) Mr. Cherian Thomas (DIN ) Mr. Animesh Kumar (DIN ) The Audit Committee met four times during the year. 266 IDFC ANNUAL REPORT

3 s' Report AUDITORS M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmedabad (Registration No W) Statutory Auditors of the Company will retire at the conclusion of the ensuing AGM. The Board recommends the reappointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as the Statutory Auditors of the Company. PUBLIC DEPOSITS During the period under review, your Company has not accepted deposits under Section 58-A of the Companies Act, PARTICULARS REGARDING CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION Since your Company does not carry out any manufacturing activity, the particulars regarding conservation of energy, technology absorption and other particulars as required by the Companies (Disclosure of Particulars in the Report of the Board of s) Rules, 1998 are not applicable and hence not given. FOREIGN EXCHANGE EARNINGS AND EXPENDITURE The particulars regarding foreign exchange expenditure and earnings are furnished at Note Nos. 22 & 23 of the Notes forming part of the Financial Statements. PARTICULARS OF EMPLOYEES AND REMUNERATION The Company had 20 employees as on March 31, As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in Aexure to the s Report. DIRECTORS RESPONSIBILITY STATEMENT The s confirm that: in the preparation of the aual accounts, the applicable accounting standards have been followed; they 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 the Company as at March 31, 2014 and the profit of the Company for the period ended on that date; they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and they have prepared the aual accounts on a going concern basis. ACKNOWLEDGEMENTS The Board would like to express their sincere thanks and appreciation to all the employees for their contribution made during the year. The s also express their gratitude for the unstinted support and guidance received from IDFC Limited and other group companies. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS ANIL BAIJAL Chairman New Delhi, June 20, 2014 IDFC FOUNDATION 267

4 Independent Auditors' Report TO THE MEMBERS OF IDFC FOUNDATION Report on the Financial Statements We have audited the accompanying financial statements of IDFC FOUNDATION ( the Company ), which comprise the Balance Sheet as at March 31, 2014, the Statement of Income and Expenditure and 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 The Company s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ( the Act ) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal controls relevant to the Company s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company s internal controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the maer so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014; (b) in the case of the Statement of Income and Expenditure, of the surplus of the Company for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. The Companies (Auditor s Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 is not applicable to the Company in terms of Clause 1(2)(iii) of the Order. 2. As required by Section 227(3) of the Act, we report that: (a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit. (b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books. (c) The Balance Sheet, Statement of Income and Expenditure and the Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company. (a) In our opinion, the Balance Sheet, the Statement of Income and Expenditure and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs). (b) On the basis of the written representations received from the directors as on 31st March, 2014 taken on record by the Board of s, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of Section 274(1)(g) of the Act. FOR DELOITTE HASKINS & SELLS Chartered Accountants (Registration No W) Z. F. BILLIMORIA Partner (Membership No ) Mumbai, June 20, IDFC ANNUAL REPORT

5 Balance Sheet AS AT AS AT AS AT NOTES EQUITY AND LIABILITIES SHAREHOLDERS FUNDS (a) Share capital 3 130,000, ,000,000 (b) Reserves and surplus 4 30,973,128 23,220,077 NON-CURRENT LIABILITIES (a) Long-term provisions 5 1,382,057 CURRENT LIABILITIES (a) Short-term borrowings 6 9,659, ,904 (b) Trade payables 7 23,037,218 15,520,842 (c) Other current liabilities 8 248,167, ,754,240 (d) Short-term provisions 9 8,550, ,653 TOTAL 450,387, ,358,773 ASSETS NON-CURRENT ASSETS (a) Fixed assets Tangible assets 10 2,985, ,168 (b) Non-current investments ,966, ,966,980 (c) Long-term loans and advances 12 7,418,390 4,631,252 CURRENT ASSETS (a) Current investments 13 8,311,768 8,311,768 (b) Trade receivables 14 16,976,494 25,180,005 (c) Cash and bank balances 15 84,026,394 44,149,029 (d) Short-term loans and advances 12 6,227,481 1,832,239 (e) Other current assets 16 5,474,702 3,727,332 TOTAL 450,387, ,358,773 See accompanying notes forming part of the financial statements. IN TERMS OF OUR REPORT ATTACHED. FOR DELOITTE HASKINS & SELLS Chartered Accountants FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF IDFC FOUNDATION Z. F. BILLIMORIA Partner SUNIL KAKAR CHERIAN THOMAS GOPAL CH. MONDAL Company Secretary Mumbai June 20, 2014 New Delhi June 19, 2014 IDFC FOUNDATION 269

6 Statement of Income and Expenditure (I) INCOME NOTES Revenue from operations ,839,203 91,327,985 Other income 18 11,050,715 9,954,146 TOTAL INCOME 151,889, ,282,131 (II) EXPENDITURE Employee benefits expense 19 58,516,481 35,486,535 Finance costs ,299 Depreciation , ,952 Other expenses 21 85,065,883 64,438,762 TOTAL EXPENDITURE 144,136, ,154,548 (III) SURPLUS FOR THE YEAR FROM CONTINUING OPERATIONS [(I)- (II)] 7,753,051 1,127,583 (IV) EARNINGS PER SHARE (NOMINAL VALUE OF 10 PER SHARE) Basic and diluted () See accompanying notes forming part of the financial statements. IN TERMS OF OUR REPORT ATTACHED. FOR DELOITTE HASKINS & SELLS Chartered Accountants FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF IDFC FOUNDATION Z. F. BILLIMORIA Partner SUNIL KAKAR CHERIAN THOMAS GOPAL CH. MONDAL Company Secretary Mumbai June 20, 2014 New Delhi June 19, IDFC ANNUAL REPORT

7 Cash Flow Statement A. CASH FLOW FROM OPERATING ACTIVITIES Surplus for the year 7,753,051 1,127,583 Adjustments for: Depreciation and amortisation expense 554, ,952 Provision for diminution in value of investments 500,000 Provision for employee benefits (1,727,710) 1,727,710 Dividend income (1,979,998) (4,949,996) Interest on bank deposits (8,026,859) (4,946,150) (Profit) / Loss on redemption of long term investments 16,712,957 Changes in working capital: Adjustments for (increase) / decrease in operating assets Short-term loans and advances (4,395,242) (299,612) Trade receivables 8,203,511 (18,435,165) Adjustments for increase / (decrease) in operating liabilities Trade payables 7,516,376 13,913,074 Other current liabilities 11,413,718 (180,360,812) Cash used in Operations 19,311,350 (174,896,459) Income - tax (paid) / refund 5,762,862 (4,820,812) NET CASH USED IN OPERATING ACTIVITIES (A) 25,074,212 (179,717,271) B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (2,979,611) (674,120) Sale proceeds of non-current investments 80,760,194 Dividend income 1,979,998 4,949,996 Interest on bank deposits 6,279,489 1,365,520 Bank balance not considered as cash and cash equivalents: Placed (150,239,371) (40,500,000) Matured 106,876,755 3,025,858 NET CASH FLOW FROM INVESTING ACTIVITIES (B) (38,082,740) 48,927,448 C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from short-term borrowings 9,523, ,904 Proceeds from issue of equity share capital 49,500,000 NET CASH FLOW FROM FINANCING ACTIVITIES (C) 9,523,276 49,635,904 Net increase / (decrease) in cash and cash equivalents (A+B+C) (3,485,252) (81,153,919) Cash and cash equivalents as at the begiing of the year (see note 15) 3,649,029 84,802,948 Cash and cash equivalents as at the end of the year (see note 15) 163,777 3,649,029 (3,485,252) (81,153,919) See accompanying notes forming part of the financial statements IN TERMS OF OUR REPORT ATTACHED. FOR DELOITTE HASKINS & SELLS Chartered Accountants FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF IDFC FOUNDATION Z. F. BILLIMORIA Partner SUNIL KAKAR CHERIAN THOMAS GOPAL CH. MONDAL Company Secretary Mumbai June 20, 2014 New Delhi June 19, 2014 IDFC FOUNDATION 271

8 Notes forming part of the Financial Statements AS AT AND 01 Company overview IDFC Foundation ("the Company") was incorporated in India on March 4, 2011 as a limited company under Section 25 of the Companies Act,1956. The Company is a wholly-owned subsidiary of IDFC Limited and managed by a Board of s comprising senior executives of IDFC Limited. The primary focus of the Company has been to contribute to the development of infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society), capacity building for government departments and agencies and in developing social infrastructure (education and healthcare). The Company also oversees the working of its joint ventures with the state governments of Karnataka, Uttarakhand and Delhi. 02 Significant accounting policies 2.1 Basis of preparation The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India ("Indian GAAP") to comply in all material respect with the accounting standards notified under section 211(3C) of the Companies Act, 1956 ( the 1956 Act ) (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ( the 2013 Act ) in terms of General Circular 15 / 2013 dated September 13, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act / 2013 Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year. 2.2 Use of estimates The Company adopts the accrual concept in the preparation of the accounts. The preparation of the financial statements requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 2.3 Investments Investments which are readily realisable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments in accordance with Accounting Standard 13 on Accounting for Investments as notified under the Companies (Accounting Standards) Rules, Current investments also include current maturities of long-term investments. All other investments are classified as long-term investments. All investments are initially recorded at cost. The cost of an investment includes purchase price, directly attributable acquisition charges and reduced by recovery of costs, if any. On disposal of an investment, the difference between its carrying amount and the net disposal proceeds is charged or credited to the Statement of Income and Expenditure. Current investments are individually carried at the lower of cost and fair value / market value on an individual basis. Long-term investments are carried at acquisition cost. A provision is made for diminution other than temporary on an individual basis. 2.4 Tangible fixed assets Fixed assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation. Income or Expenditure arising from the derecognition of fixed assets are measured as difference between the net disposal proceeds and the cost of the assets less accumulated depreciation up to the date of disposal and are recognised in the Statement of Income and Expenditure. 2.5 Depreciation on tangible fixed assets "Depreciation for all tangible fixed assets, excluding certain electronic items, is provided on the written down value method, at the rates prescribed by Schedule XIV of the Companies Act, Certain electronic items are depreciated over a period of two years on a straight-line method based on the Management s estimate of useful life of assets. Depreciation on additions during the year is provided on a pro-rata basis. Assets costing less than 5,000/- each are written off in the year of capitalisation. 2.6 Cash and cash equivalents Cash and cash equivalents for the purpose of the Cash Flow Statement comprises cash on hand, cash in bank, fixed deposits and other shortterm highly liquid investments with an original maturity of three months or less that are readily convertible into known amount of cash and which are subject to an insignificant risk of change in value. 272 IDFC ANNUAL REPORT

9 Notes forming part of the Financial Statements AS AT AND 2.7 Cash flow statement Cash flows are reported using the indirect method whereby cash flows from operating, investing and financing activities of the Company are segregated and surplus / (deficit) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. 2.8 Employee benefits (i) (ii) Defined contribution plans The Company's contribution to provident fund, superauation fund and pension fund are considered as defined contribution plans and are charged to the Statement of Income and Expenditure as they fall due, based on the amount of contribution required to be made. Defined benefit plan The net present value of the Company's obligation towards gratuity to employees is funded and actuarially determined as at the Balance Sheet date based on the projected unit credit method. Actuarial gains and losses are recognised in the Statement of Income and Expenditure for the year. (iii) Compensated absences Based on the leave rules of the Company, employees are not permitted to accumulate leave. Any unavailed privilege leave to the extent encashable is paid to the employees and charged to the Statement of Income and Expenditure for the year. 2.9 Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must also be met before revenue is recognised: (a) Voluntary contributions are accounted on the date of receipt. All voluntary contributions received during the year are towards the objectives of the Company. (b) Income from advisory / consultancy / policy advocacy and capacity building services are recognised on accrual basis based on percentage of completion method / agreement with clients. (c) Interest income on Savings Bank accounts and Fixed Deposits are accounted on accrual basis. (d) Dividend is accounted when the right to receive is established Income tax The Company has been granted exemption from Income Tax under section 12A read with section 12AA of the Income Tax Act, Foreign currency transactions and translations Transactions in foreign currencies of the Company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are reported using the closing rate. Gain or loss resulting from the settlement of such transactions and translations of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Income and Expenditure Earnings per share Basic earnings per share is computed by dividing the surplus / (deficit) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the surplus / (deficit) after tax as adjusted for expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares Provisions and contingencies A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation as at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are disclosed in the notes Service tax input credit Service tax input credit is accounted in the period in which the underlying services are received and when there is no uncertainty in availing / utilising the credits Operating Cycle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current. IDFC FOUNDATION 273

10 Notes forming part of the Financial Statements AS AT AND 03 Share capital AUTHORISED AS AT AS AT NUMBER NUMBER Equity shares of 10 each 20,000, ,000,000 20,000, ,000,000 ISSUED, SUBSCRIBED & FULLY PAID-UP Equity shares of 10 each 13,000, ,000,000 13,000, ,000,000 (All the above shares are held by IDFC Limited, the Holding Company and its nominees) TOTAL 13,000, ,000,000 13,000, ,000,000 (a) Reconciliation of the number of shares and amount outstanding as at the begiing and at the end of the year. AS AT AS AT NUMBER NUMBER Outstanding as at the begiing of the year 13,000, ,000,000 8,050,000 80,500,000 Issued during the year 4,950,000 49,500,000 OUTSTANDING AS AT THE END OF THE YEAR 13,000, ,000,000 13,000, ,000,000 (b) Terms / rights attached to equity shares The Company has only one class of equity shares having a par value of 10 per share. Each holder of equity share is entitled to one vote per share and ranks pari passu. As per clause X of Memorandum of Association ("MoA") of the Company, in the event of liquidation of the Company, the holder of equity shares will not be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The amount remaining, if any, shall be given or transferred to such other Company having similar objects, to be determined by the member of the Company at or before the time of dissolution or in default thereof by the High Court of judicature that has or may acquire jurisdiction in the matter. (c) Details of shareholders holding more than 5% of the shares in the Company AS AT AS AT NUMBER % OF HOLDING NUMBER % OF HOLDING IDFC Limited and its nominees 13,000, % 13,000, % TOTAL 13,000, % 13,000, % 04 Reserves and surplus AS AT AS AT Surplus in the Statement of Income and Expenditure Opening balance 23,220,077 22,092,494 Surplus for the year 7,753,051 1,127,583 TOTAL 30,973,128 23,220, Long-term provisions AS AT AS AT Provision for employee benefits [see note 25 (b)] 1,382,057 TOTAL 1,382, IDFC ANNUAL REPORT

11 Notes forming part of the Financial Statements AS AT AND 06 Short-term borrowings AS AT AS AT Book overdraft 9,659, ,904 TOTAL 9,659, , Trade payables AS AT AS AT Payable to vendors [see note (a)] 10,635,614 1,166,362 Provision for expenses 12,401,604 14,354,480 TOTAL 23,037,218 15,520,842 (a) No amount is payable to Suppliers registered under the Micro, Small and Medium Enterprises Development Act, No interest has been paid / payable by the Company during the year to the Suppliers covered under the Micro, Small and Medium Enterprises Development Act, The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose. 08 Other current liabilities AS AT AS AT Amount payable to a related party [see note 28 (b)] 215,000, ,000,000 Statutory remittances 2,689,639 1,157,617 Payable to employee benefit fund [see note 25(b)] 443,006 Fund held in trust for KFW Development Bank, Germany 35, ,758 Fund held for Meghalaya Project 373,865 Fund held in corpus donation received from IDFC Limited [see note 28 (b)] 30,000,000 10,000,000 TOTAL 248,167, ,754, Short-term provisions AS AT AS AT Provision for income tax 8,550,000 Provision for employee benefits [see note 25 (b)] 345,653 TOTAL 8,550, , Tangible assets GROSS BLOCK DEPRECIATION NET BLOCK BALANCE AS AT APRIL 1, 2013 ADDITIONS DISPOSALS BALANCE AS AT BALANCE AS AT APRIL 1, 2013 DEPRECIATION CHARGE FOR THE YEAR ON DISPOSALS BALANCE AS AT BALANCE AS AT BALANCE AS AT Computers 674, , , , , , , ,168 (Previous year) (674,120) (674,120) (113,952) (113,952) (560,168) Vehicles 2,527,367 2,527, , ,682 2,257,685 (Previous year) Furniture & Fixture 106, ,776 5,770 5, ,006 (Previous year) Office Equipment 80,274 80,274 18,385 18,385 61,889 (Previous year) TOTAL 674,120 2,979,611 3,653, , , ,455 2,985, ,168 (Previous Year) (674,120) (674,120) (113,952) (113,952) (560,168) IDFC FOUNDATION 275

12 Notes forming part of the Financial Statements AS AT AND 11 Non-current investments Trade investments (at cost) Investment in jointly controlled entities (unquoted) FACE VALUE AS AT AS AT QUANTITY QUANTITY Delhi Integrated Multi-Modal Transit System Limited 1,000 73, ,289,740 73, ,289,740 Infrastructure Development Corporation (Karnataka) Limited 10 4,949, ,863,840 4,949, ,863,840 Uttarakhand Infrastructure Development Company Limited ,517 4,618, ,517 4,618,320 Investment in trust units (unquoted) India PPP Capacity Building Trust [ 200 paid up (Previous year 200 paid-up)] 1,000 50,000 12,195,080 50,000 12,195,080 TOTAL 318,966, ,966, Loans and advances (unsecured, considered good unless stated otherwise) AS AT AS AT NON-CURRENT CURRENT NON-CURRENT CURRENT Bid deposits 370,000 Advance payment of income tax 7,418,390 4,631,252 Receivable from IDFC Limited 3,602,621 Receivable from Ministry of Urban Development ("MoUD") 1,513, ,499 Receivable from Delhi Urban Shelter Improvement Board ("DUSIB") 36,850 28,755 Receivable from Government of Meghalaya 248,341 Balances with Government authorities - cenvat credit 576, ,985 Employee advance 250,000 TOTAL 7,418,390 6,227,481 4,631,252 1,832, Current investments Trade investments (at cost) Equity shares (fully paid) Investment in subsidiary company (unquoted) FACE VALUE AS AT AS AT QUANTITY QUANTITY IDFC PPP Trusteeship Company Limited [see note (a)] 50, ,000 Investment in trust units (unquoted) India Infrastructure Initiative Trust (fully paid) [see note (b)] 1,000 5,700 8,311,768 5,700 8,311,768 TOTAL CURRENT INVESTMENTS 8,311,768 8,811,768 Less: Provision for diminution in value of investments 500,000 NET CURRENT INVESTMENTS 8,311,768 8,311,768 (a) IDFC PPP Trusteeship Company Limited at its Board Meeting held on March 26, 2013 decided to make an application to the Registrar of Companies to strike off its name from the Register of Companies under section 560 of the Companies Act 1956, through Fast Track Exit Scheme, The same has been confirmed by Registrar of Companies through letter dated August 23, In view of that investment in IDFC PPP Trusteeship Company Limited has been written off. (b) During the financial year , the investment in India Infrastructure Initiative Trust ( Triple I Trust ) has been reduced on account of partial redemption of 54,300 units at the Net Assets Value ("NAV") as on June 30, 2012 as per audited financial statements. Accordingly, the investment in Triple I Trust is below 20% of total investment held by the Company. 276 IDFC ANNUAL REPORT

13 Notes forming part of the Financial Statements AS AT AND 14 Trade receivables (unsecured) (considered good, unless stated otherwise) Outstanding for a period less than six months from the date they are due for payment [see note 24 and 28 (b)] Outstanding for a period more than six months from the date they are due for payment [see note 28 (b)] AS AT AS AT 10,591,839 23,432,956 6,384,655 1,747,049 TOTAL 16,976,494 25,180, Cash and bank balances AS AT AS AT CASH AND CASH EQUIVALENTS Cash on hand 163,777 70,403 Balances with banks: in deposit accounts 3,578, ,777 3,649,029 OTHERS Balances with banks: in deposit accounts [see note (a)] 83,862,617 40,500,000 TOTAL 84,026,394 44,149,029 (a) Balances with banks in deposit accounts include deposits amounting to 83,862,617 (Previous Year 40,500,000) which have an original maturity of more than 12 months. 16 Other current assets AS AT AS AT Interest accrued on fixed deposits 5,474,702 3,727,332 TOTAL 5,474,702 3,727, Revenue from operations Voluntary contribution (see note (a) and 28 (b)] 110,040,712 40,026,949 Advisory / consultancy [see note 23 and 28 (b)] 12,427,604 36,545,622 Capacity building [see note 23 and 28 (b)] 10,370,976 11,417,927 Policy advocacy 7,999,911 3,337,487 TOTAL 140,839,203 91,327,985 (a) Voluntary contribution includes donation of 100,000,000 (Previous Year 40,000,000) received from IDFC Limited with specific direction. IDFC FOUNDATION 277

14 Notes forming part of the Financial Statements AS AT AND 18 Other income Dividend income from long-term investments [see note 28 (b)] 1,979,998 4,949,996 Interest income from bank 8,026,859 4,946,150 Sitting fees [see note 28 (b)] 92,000 58,000 Profit on foreign currency transactions and translation [see note (23)] 32,218 Interest on Income Tax refund 919,640 TOTAL 11,050,715 9,954, Employee benefits expense Salaries 48,711,107 32,340,438 Contribution to provident and other funds [see note (25)] 8,031,066 3,013,246 Staff welfare expenses 1,774, ,851 TOTAL 58,516,481 35,486, Finance costs Interest on delayed payment of statutory dues 7,210 Net loss on foreign currency transactions and translation [see note 23] 108,089 TOTAL 115, Other expenses Sub consultancy charges [see note 28(b)] 24,686,808 18,179,005 Donations 11,955, Grants [see note 28(b)] 19,458,241 5,906,808 Fees for increase in authorised share capital 500,000 Legal documentation expenses 14,503 Rent 3,305,652 Travelling and conveyance [see note 22 and 28(b)] 7,252,457 6,299,541 Printing and stationery 2,191,111 1,490,697 Books and periodicals 46,454 10,854 Communication costs [see note 28(b)] 835, ,122 Membership Fee 1,132,360 1,423,600 Auditors remuneration [see note (a)] 200, ,000 Training and conference 1,079, ,395 Professional fees [see note 28(b)] 9,460,552 8,628,372 Repair and maintenance 231, ,097 Foundation day conference expenses 1,114,004 2,820,830 Loss on redemption of non-current investments 16,712,957 Bad debts written off [see note 28(b)] 6, ,172 Commission and brokerage 211,043 Stipend to trainees 297, ,677 Provision for diminution in value of investments 500,000 Miscellaneous expenses 1,600, ,332 TOTAL 85,065,883 64,438, IDFC ANNUAL REPORT

15 Notes forming part of the Financial Statements AS AT AND (a) Break-up of auditors remuneration Audit fees 100,000 50,000 Tax audit fees 50,000 50,000 Other services 50,000 50,000 Service tax 24,720 18, , ,540 Less: Service tax set-off receivable 24,720 18,540 TOTAL 200, , Expenditure in foreign currencies Travelling expenses 450, ,740 TOTAL 450, , Earnings in foreign currencies Advisory / consultancy 3,156,969 11,107,596 Capacity building 810, ,823 TOTAL 3,967,188 11,943, Unhedged foreign currency exposure CURRENCY FCY FCY Trade receivables AUD 23,000 1,258,199 TOTAL 23,000 1,258, Disclosure of employees benefits In accordance with Accounting Standard 15 on Employee Benefits as notified under the Companies (Accounting Standards) Rules, 2006 the following disclosures have been made: (a) The Company has recognised the following amounts in the Statement of Income and Expenditure towards contribution to defined contribution plan which are included under contribution to provident and other funds: Provident fund 2,055,619 1,177,907 National pension scheme 126,250 45,000 Superauation fund 120,463 TOTAL 2,302,332 1,222,907 IDFC FOUNDATION 279

16 Notes forming part of the Financial Statements AS AT AND (b) The details of the Company s post retirement benefit plans for gratuity for its employees are given below which is certified by the actuary and relied upon by the auditors: CHANGE IN THE DEFINED BENEFIT OBLIGATIONS: Liability at the begiing of the year 1,727,710 1,305,663 Current service cost 1,095, ,102 Interest cost 386,530 81,428 Benefits paid (2,851,239) (71,445) Actuarial loss 273,060 6,962 Liabilities assumed on acquisition 3,973,896 Liability at the end of the year 4,605,205 1,727,710 FAIR VALUE OF PLAN ASSETS: Contributions 4,162,199 71,445 Benefits paid (2,851,239) (71,445) Fair value of plan assets at the end of the year 1,310,960 Total actuarial loss to be recognised 273,060 6,962 AMOUNT RECOGNISED IN THE BALANCE SHEET: Liability at the end of the year 4,605,205 1,727,710 Long-term provisions - Provision for employee benefits 1,382,057 Short-term provisions - Provision for employee benefits 345,653 Fair value of plan assets at the end of the year 1,310,960 Amount recognised in the Balance Sheet under Other current liabilities - Payable to employee benefit fund [Net of receivable of 2,851,239 (Previous year Nil)] 3,294,245 EXPENSE RECOGNISED IN THE STATEMENT OF INCOME AND EXPENDITURE: Current service cost 1,095, ,102 Interest cost 386,530 81,428 Net actuarial loss recognised 273,060 6,962 Liabilities assumed on acquisition 3,973,896 Expense recognised in the Statement of Income and Expenditure under Employee benefits expense 5,728, ,492 RECONCILIATION OF THE LIABILITY RECOGNISED IN THE BALANCE SHEET: Opening net liability 1,727,710 1,305,663 Expense recognised 5,728, ,492 Contribution by the Company (4,162,199) (71,445) Amount recognised in the Balance Sheet under Other current liabilities - Payable to employee benefit fund (Net of receivable of 2,851,239) 3,294,245 Liability at the end of the year 1,727,710 Long-term provisions - Provision for employee benefits 1,382,057 Short-term provisions - Provision for employee benefits 345,653 Expected employer s contribution for the next year 1,000, , IDFC ANNUAL REPORT

17 Notes forming part of the Financial Statements AS AT AND EXPERIENCE ADJUSTMENTS MARCH 31, 2012 MARCH 31, 2011 Defined benefit obligation 4,605,205 1,727,710 Plan assets 1,310,960 Surplus / (deficit) (3,294,245) (1,727,710) Experience adjustment on plan liabilities 381,471 (10,313) Experience adjustment on plan assets INVESTMENT PATTERN % % Insurer managed funds Government securities Deposit and money market securities Debentures / bonds PRINCIPAL ASSUMPTIONS Discount rate (per aum) Expected rate of return on assets (per aum) 8.00 Salary escalation rate (per aum) The estimate of future salary increase considered in the actuarial valuation takes into account inflation, seniority, promotion and other relevant factors. 26 Segment Information The primary focus of the Company has been to contribute to the development of infrastructure through engagement in policy research and advocacy, programme support (for economic benefits to society), social infrastructure (education and healthcare) and capacity building for government departments and agencies. All other activities revolve around the main business. The Company does not have any geographical segments. As such, there are no separate reportable segments as per Accounting Standard 17 on Segment Reporting as notified under the Companies (Accounting Standards) Rules, Earnings per share In accordance with Accounting Standard 20 on Earnings Per Share as notified under the Companies (Accounting Standards) Rules, 2006, the earnings per share has been calculated as under: (a) Net surplus after tax ( ) 7,753,051 1,127,583 (b) Weighted average number of equity shares (Nos.) 13,000,000 8,104,247 (c) Basic and diluted earnings per share (a) / (b) ( ) (d) Nominal value per share ( ) Related party disclosure As per the Accounting Standard 18 on Related Party Disclosure as notified by the Companies (Accounting Standards) Rules 2006, the related parties of the Company are as follows: (a) Relationship: Holding Company IDFC Limited Fellow Subsidiaries (with whom there are transactions) IDFC Asset Management Company Limited IDFC FOUNDATION 281

18 Notes forming part of the Financial Statements AS AT AND Jointly controlled entities Infrastructure Development Corporation (Karnataka) Limited Delhi Integrated Multi-Modal Transit System Limited Uttarakhand Infrastructure Development Company Limited Entities over which control is exercised India PPP Capacity Building Trust (b) The nature and volume of transactions carried out with the above related parties in the ordinary course of business are as follows: NAME OF THE RELATED PARTY NATURE OF TRANSACTIONS IDFC Limited Advisory / consultancy* 10,416,489 28,700,165 Capacity building* 6,979,636 7,779,916 Bad debts written off 88,992 Trade receivables * 10,733,552 22,085,097 Loans and advances - receivables 3,602,621 Fees paid * 11,051,347 1,338,583 Trade payables-balance outstanding * 1,325 Proceeds from issue of share capital 49,500,000 Voluntary contribution 100,000,000 40,000,000 Corpus received 30,000,000 10,000,000 Advance repaid 10,000, ,000,000 Advance taken -balance outstanding 215,000, ,000,000 Infrastructure Development Corporation (Karnataka) Limited Advisory / consultancy* 402,922 Sub consultancy charges* 124, ,250 Dividend income 1,979,998 4,949,996 Sitting fees 12,000 8,000 Sitting fees 80,000 50,000 Delhi Integrated Multi-Modal Transit System Limited India PPP Capacity Building Trust Fees paid* 79,416 Sale of investment 22,450,564 Profit on sale of investment 4,157,944 Foreign currency exchange 739 Uttarakhand Infrastructure Development Company Limited Note: * Inclusive of service tax Grants* 834, ,260 Advisory / consultancy* 103,158 39, Claims against the company not acknowledged as debt in respect of: Provident fund demand disputed by the Company. The matter is under dispute. 101,125 TOTAL 101, Previous year s figures have been regrouped / reclassified wherever necessary to correspond with the current year s classification / disclosure. FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF IDFC FOUNDATION SUNIL KAKAR CHERIAN THOMAS New Delhi June 19, 2014 GOPAL CH. MONDAL Company Secretary 282 IDFC ANNUAL REPORT

19 Statement Pursuant to Section 212 OF THE COMPANIES ACT, 1956 NAME OF SUBSIDIARY COMPANY IDFC PPP TRSUTEESHIP CO LTD. 1 Financial year of the Subsidiary Company ended on August 23, Equity Shares of 10 each a) Number of Shares 0 Shares of 10 b) Extent of Holding 0% 3 Net aggregate amount of Profit / (Loss) of the Subsidiary, so far as they concern members of IDFC Foundation i. For the Financial Year of the Subsidiary a) Dealt with in the accounts of the Holding Company. Nil b) Not dealt with in the accounts of the Holding Company. Nil ii. For the previous financial years of the Subsidiary since it became the Holding Company s Subsidiary. a) Dealt with in the accounts of the Holding Company. Nil b) Not dealt with in the accounts of the Holding Company. 225,768 FOR AND ON BEHALF OF THE BOARD OF DIRECTORS OF IDFC FOUNDATION SUNIL KAKAR CHERIAN THOMAS New Delhi June 19, 2014 IDFC FOUNDATION 283