Indostar Capital Finance Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

1. The financial results of the Company have been prepared in accordance the Indian Accounting Standard ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standard) Rules, 2015 as amended from time to time. The Company has adopted Ind AS from 1 April 2018 with effective transition date of 1 April 2017. This transition has been carried out from the erstwhile Accounting Standard notified under the Act, read with relevant rules issued thereunder and guidelines issued by the Reserve Bank of India ("RBI") and generally accepted accounting principles in India (collectively referred to as "Previous GAAP"). Accordingly, the impact of transition has been recorded in the opening reserves as at 1 April 2017 and the corresponding figures presented in these results have been restated/reclassified.



There is a possibility that these financial results for the current and previous periods may require adjustments due to changes in financial reporting requirements arising from new standards, modifications to the existing standards, guidelines issued by the Ministry of Company Affairs and RBI or changes in the use of one or more optional exemptions from full retrospective applications of certain Ind AS permitted under Ind AS-101 which may arise upon finalisation of the financial statements as at and for the year ending 31 March 2019 prepared under Ind AS.



2. As permitted under circular no. CIR/CFD/FAC/62/2016 dated 5 July 2016 issued by the Securities and Exchange Board of India ("SEBI"), the Company has opted to avail exemption for submission of lnd AS compliant financial results for the previous year ended 31 March 2018. Further, the standalone financial results under previous GAAP, for the quarter and nine months ended 31 December 2017 have been adjusted for differences in accounting principles adopted by the Company on transition to Ind ASs. The Statutory Auditors of the Company have reviewed these Ind AS adjustments and the reconciliations as disclosed in note 4 below.



3. The standalone financial results of IndoStar Capital Finance Limited ("ICFL" or "the Company") for the quarter and nine months ended 31 December 2018 have been reviewed by the Audit Committee and subsequently approved at the meeting of the Board of Directors held on 02 February 2019. The standalone financial results have been subjected to a limited review, by the Statutory Auditors of the Company, as indicated above.



4. As required by paragraph 32 of Ind AS 101, net profit reconciliation between the figures under the Previous GAAP and Ind AS is as under:



(INR in Lakhs)

For the quarter ended 31 December, 2017 :

(Unaudited)

a. Net profit after tax under Previous GAAP - INR 5,679

b. Ind AS adjustments resulting in increase/(decrease) in net profit after tax under the Previous GAAP :

i) Expected credit Loss provision - INR (354)

ii) Effective interest rate on financial assets and liabilities (net) - INR (1,157)

iii) ESOP fair value charge - INR (504)

iv) Others - INR (148)

iv) Tax effect on above adjustments - INR 753

c. Net profit after tax as per Ind AS - INR 4,269

d. Other comprehensive income, net of tax - INR 0

e. Total comprehensive income - INR 4,269



(INR in Lakhs)

For the nine months ended 31 December, 2017 :

(Unaudited)

a. Net profit after tax under Previous GAAP - INR 16,973

b. Ind AS adjustments resulting in increase/(decrease) in net profit after tax under the Previous GAAP :

i) Expected credit Loss provision - INR 1,991

ii) Effective interest rate on financial assets and liabilities (net) - INR (647)

iii) ESOP fair value charge - INR (1,832)

iv) Others - INR (137)

iv) Tax effect on above adjustments - INR 220

c. Net profit after tax as per Ind AS - INR 16,568

d. Other comprehensive income, net of tax - INR (8)

e. Total comprehensive income - INR 16,560



5. Consequent to the listing of equity shares and adoption of Dividend Distribution Policy, the Company has revised underlying variables used for fair valuation of employee stock options during the current quarter. Had the Company followed previous underlying variables, profits before tax for the quarter and nine months ended 31 December 2018 would have been lower by INR 1,214 lakhs.



6. The Company has opted to publish an extract of consolidated unaudited financial results, pursuant to option made available as per the Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI circular dated 5 July 2016. The standalone financial results are available on the website of the Company at www.indostarcapital.com and on the websites of the BSE Ltd. at www.bseindia.com and the National Stock Exchange of India Ltd. at www.nseindia.com.



7. The Company is primarily engaged in the business of financing and accordingly there are no separate reportable segments as per Ind AS 108 dealing with Operating segment.



8. The Secured Listed Non-Convertible Debentures of the Company as on 31 December 2018 are secured by first pari-passu charge on a freehold land owned by the Company and first pari-passu charge by way of hypothecation, over standard present and future receivables. The total asset cover required thereof has been maintained as per the terms and conditions stated in the respective Debenture Trust Deeds.



9. Figures for the previous periods have been regrouped and / or reclassified wherever considered necessary to conform to current period presentation.