IL&FS Investment Managers : Annual Report 2023

Annual Report

2023

Corporate Information	1
Directors' Report	2
Annexures to the Directors' Report	10
Management Discussion and Analysis	24
Corporate Governance Report	27
STANDALONE FINANCIALS
Auditors' Report	47
Balance Sheet	56
Statement of Profit and Loss	57
Cash Flow Statement	59
Notes Forming part of Financial Statements	61
Form AOC - 1	93
CONSOLIDATED FINANCIALS
Auditors' Report	95
Balance Sheet	103
Statement of Profit and Loss	104
Cash Flow Statement	107
Notes Forming part of Financial Statements	109
NOTICE	144

CORPORATE INFORMATION

BOARD OF DIRECTORS	Mr Susim Mukul Datta
	Chairman
	Mr Chitranjan Singh Kahlon
	Mr Nand Kishore
	Mr Kaushik Modak
	Ms Priya Shetty
	Ms Lubna Usman
CHIEF EXECUTIVE OFFICER &	Mr Manoj Borkar
CHIEF FINANCIAL OFFICER
COMPANY SECRETARY	Mr Sanjay Mitra
BANKERS	HDFC Bank Limited
STATUTORY AUDITORS	KKC & Associates LLP
	Chartered Accountants
SECRETARIAL AUDITORS	M/s Mehta & Mehta
	Company Secretaries
INTERNAL AUDITORS	M/s N A Shah Associates LLP
	Chartered Accountants
REGISTRARS & SHARE	Link Intime India Private Limited
TRANSFER AGENTS	C-101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai 400 083, India
	Tel : + 91 8108116767 Fax : [phone]
REGISTERED OFFICE	The IL&FS Financial Centre, Plot No C-22, G Block
	Bandra Kurla Complex, Bandra (East), Mumbai 400 051, India
	Tel : [phone]
CIN	L65999MH1986PLC147981

IL&FS Investment Managers Limited

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DIRECTORS' REPORT

To The Shareholders of IL&FS Investment Managers Limited

Your Directors have pleasure in presenting for your consideration and approval the Thirty-Seventh Annual Report with the Audited Financials of the Company ("IIML") for the year ended March 31, 2023

FINANCIAL ACHIEVEMENTS AND DIVIDEND

	For the year	For the year	For the year	For the year
	ended	ended	ended	ended
	March 31, 2023	March 31, 2022	March 31, 2023	March 31, 2022
	(` mn)	(` mn)	(` mn)	(` mn)
Particulars	Standalone	Standalone	Consolidated	Consolidated
Total Income	352.12	243.45	755.13	574.24
Profit/(Loss) before Taxation	236.22	120.40	216.17	152.64
Provision for Taxation	(3.88)	(4.57)	46.19	21.48
Net Profit/(Loss) after Taxation	240.10	124.97	169.97	131.15
Total Comprehensive income/(loss) for the year	244.86	126.14	233.14	157.55

The Company does not propose to transfer any amount to the General Reserves

DIVIDEND

Your Directors recommend a Final Dividend of ` 0.80 per equity share of the Face Value of ` 2/- each. The total amount of Dividend is

• 251.23 mn

REVIEW OF OPERATIONS

The year 2022 saw a global tempering of the peak activity witnessed in 2021, triggered by tightening monetary policies across US and European markets as economies emerged from a Covid-19 induced suppression in economic activity. Countries coped with high inflationary pressures on the back of an extended loan moratorium, Covid-19 stimulus, and supply-demand gaps. These gaps were exacerbated by the mounting geopolitical tensions (Russia-Ukraine conflict, US-China decoupling), which led to trade sanctions and global shortages. Resulting market volatilities cast a shadow over global private equity and venture capital (PE-VC) activity, with investments declining by 15% to 30% across regions

Indian PE-VC investments surpassed $60 bn for a third time, as India demonstrated some resilience in the face of global headwinds. Investment value closed at $61.6 bn, with a moderate decline of 12% from 2021's peak of $69.8 billion, supported by a positive economic outlook, driven by structural enablers such as large consumption opportunity and improved digital infrastructure. Amid a significant contraction in the region, India's share of PE-VC investments in Asia-Pacific strengthened from less than 15% to approximately 20%

At IIML, the team continues to focus on divesting its current portfolio and return money to its investors. The developments at the Infrastructure Leasing & Financial Services Limited ("IL&FS") Group has had a negative impact on IIML and its brand equity. This also resulted in certain fund investors terminating certain management contracts. These developments have significantly impinged on IIML's business plans for revenue growth. The newly constituted IL&FS Board has initiated the process to sell its holding in IIML. However, we have received communication from IL&FS that their current bid process has not resulted in any bidder for IIML. This has impacted the revival of the business. IIML expects that IL&FS would explore other options for selling its stake in IIML

On the debt side, IIML, through its subsidiary operates the Infrastructure Debt Fund ("IDF"). The IDF has closed ended schemes and AUM as of March 31, 2023 was ` 1,348.78 crores

IIML's joint venture with Government of Andhra Pradesh performed very well during the year which is reflected in their financials. This joint venture continues to bag new contracts and is implementing a slew of projects in the State of Andhra Pradesh

On a consolidated basis, the Income from Operations of the Company for FY2023 was ` 644.46 mn and Other Income was ` 110.68 mn. Accordingly, the Total Income on a consolidated basis for FY2023 was ` 755.13 mn. The Total Expenses on consolidated basis were

• 570.89 mn. The resultant Profit Before Tax and Exceptional Items on a consolidated basis for FY2023 was ` 216.17 mn

On a standalone basis, the Total Income of the Company for FY2023 was ` 352.12 mn and the Total Expenses for the year were ` 115.90 mn and the resultant Profit After Tax before other comprehensive income for FY2023 was ` 240.10 mn. This indudes

• 260.48 mn as Dividend from its subsidiaries & associates

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Annual Report 2023

DIRECTORS' REPORT

MATERIAL CHANGES FROM THE END OF THE FINANCIAL YEAR

There have been no material changes and commitments affecting the financial position of the Company, which have occurred from the end of the financial year for the Company to which the financial statement relates and till the date of the Directors' Report

SUBSIDIARIES AND JOINT VENTURES

Your Company has Six Domestic Subsidiaries viz. IL&FS Asian Infrastructure Managers Limited, IL&FS Urban Infrastructure Managers Limited, IIML Asset Advisors Limited, Andhra Pradesh Urban Infrastructure Asset Management Limited, IL&FS Infra Asset Management Limited and IL&FS AMC Trustee Limited and two Offshore Subsidiaries viz. IL&FS Investment Advisors LLC, Mauritius and IIML Fund Managers (Singapore) Pte Ltd, Singapore

Your Company also has two Joint Venture Companies viz. Standard Chartered IL&FS Management (Singapore) Pte Limited, Singapore and IL&FS Milestone Realty Advisors Private Limited

As per Section 129(3) of the Companies Act, 2013 ("Act") and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") the consolidated financial statements of the Company with its Subsidiaries forms part of the Annual Report

The copies of the Audited Annual Accounts and other related documents of the Company's Subsidiaries can be sought by any shareholder of the Company or its Subsidiaries on making a written request to the Company Secretary in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection by any shareholder at the Company's Registered Office and are also uploaded on the Company's website at http://www.iimlindia.com/financials_SubsidiaryCompanies.aspx

A separate statement pursuant to Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014 containing the salient features of the Financial Statements of the Company's Subsidiaries and Joint Ventures in Form AOC 1 is given as an Annexure to the Standalone Financial Statements

Performance and Financial position of the Subsidiaries and the Joint Venture Companies :

IL&FS Asian Infrastructure Managers Limited and IIML Asset Advisors Limited :

The Board at its meeting held on February 14, 2022, had approved the Scheme of Amalgamation for the amalgamation of two of its wholly owned subsidiaries, namely, IL&FS Asian Infrastructure Managers Limited ("IAIML") and IIML Asset Advisors Limited ("IAAL") with the Company

The amalgamation will require the approval of the shareholders of the Company and National Company Law Tribunal ("NCLT") and any other stakeholder as directed by NCLT. In addition to that, this amalgamation will also need to comply with the NCLT approved IL&FS restructuring process applicable to IL&FS Group Companies. The process of amalgamation is underway

IAIML was set up to manage the Pan Asia Project Development Fund, India (the Fund). The Fund, having a corpus of ` 1125 mn, invested across seven investments. Six of these investments have been divested and the balance one investment is partially divested. IAIML is working actively to fully divest from the residual investment of the Fund

The Total Income of IAIML for FY2023 was ` 2.60 mn. The Total Expenses of IAIML for the year were ` 0.16 mn and the resultant total comprehensive income was a profit of ` 1.73 mn

The Total Income of IAAL for FY2023 was ` 5.75 mn. The Total Expenses of IAAL for the year were ` 0.21 mn and the resultant total comprehensive income was a profit of ` 5.16 mn

IL&FS Urban Infrastructure Managers Limited :

IL&FS Urban Infrastructure Managers Limited ("IUIML") functions as the Asset Manager for the Pooled Municipal Debt Obligations ("PMDO") Facility. The objective of the PMDO Facility is to provide long tenure term loans to meet the debt requirements of urban infrastructure projects across cities in India

On representation the consortium member lenders of the PMDO Facility have agreed to pay management fee(s) in relation to the NPA(s) accounts which will boost its revenues and help in sustaining its operations

The Total Income for FY2023 was ` 45.77 mn inclusive of Other Income of ` 0.80 mn. The Total Expenses of IUIML for the year were

• 43.60 mn and the resultant total comprehensive income was at a loss of ` 1.58 mn

IL&FS Investment Advisors LLC :

IL&FS Investment Advisors LLC, Mauritius ("IIAL") acts as the Investment Manager to Tara India Fund III LLC and Saffron India Real Estate Fund

IL&FS Investment Managers Limited

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