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Notes to Accounts of IDFC Ltd.

Mar 31, 2015

01 Corporate information

IDFC Limited (''the Company'') is a public company incorporated in India and regulated by the Reserve Bank of India (''RBI'') as an Infrastructure Finance Company - Non Banking Finance Company (''IFC-NBFC'') engaged in financing infrastructure projects in sectors like energy, telecommunication, transportation, commercial and industrial projects including hospital, education, tourism and hotels. In April 2014, the Company had received in principle approval from the RBI to set up a new private sector bank.

In order to achieve, a RBI compliant corporate structure under the new banking guidelines and for corporate restructuring, the Company has filed a Scheme of Arrangement before the Hon''ble Madras High Court (''High Court'') on April 13, 2015 under section 391-394 of the Companies Act, 1956 to demerge its financial undertaking into its subsidiary, IDFC Bank Limited.

02 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 with the Accounting Standards specified under Section 133 of the Companies Act, 2013 (''the 2013 Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the 2013 Act / Companies Act, 1956 (''the 1956 Act'') as applicable. The financial statements have been prepared on the 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 unless stated otherwise. [see note 3 (h)]

03 Share capital

(b) Terms / rights attached to equity shares

- The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to approval of the Shareholders at the ensuing Annual General Meeting. During the year ended March 31,2015 dividend of Rs. 2.60 per share (Previous Year Rs. 2.60 per share) is recognised as amount distributable to equity Shareholders.

- In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.

04 Long-term borrowings

(a) Borrowings of Rs. 54,165.76 crore (Previous Year Rs. 48,089.09 crore) are secured by way of a first floating pari passu charge over investments, other assets, trade receivables, cash and bank balances and loans & advances excluding investments in and other receivables from subsidiaries and affiliates and lien marked assets.

(b) In terms of the RBI circular (Ref No. DNBS (PD) CC No.381/03.02.001/2014-15 dated July 1, 2014) no borrowings remained overdue as on March 31,2015 (Previous Year Rs. Nil).

(c) Unexpired discount is net of Rs. 236.86 crore (Previous Year Rs. 251.00 crore) towards interest accrued but not due.

(d) Interest and repayment terms of long-term borrowings - debentures and bonds (non convertible) (secured):

5 Short-term borrowings

(a) Borrowings of Rs. 100.00 crore (Previous Year Rs. 1,500.00 crore) are secured by way of a first floating pari passu charge over investments, other assets, trade receivables, cash and bank balances and loans and advances excluding investments in and other receivables from subsidiaries and affiliates and lien marked assets.

(b) Borrowings under CBLO is secured against investments in government securities and treasury bills of Rs. 11,151.12 crore at book value (Previous Year Rs. 2,143.92 crore at book value).

(c) Borrowings under REPO are secured by assignment of government securities and treasury bills of Rs. 4,443.62 crore at book value (Previous Year Rs. 1,364.45 crore at book value).

(d) Unexpired discount on commercial papers is net of Rs. 4.39 crore (Previous Year Rs. 61.35 crore) towards interest accrued but not due.

(e) In terms of the RBI circular (Ref. No. DNBS (PD) CC No.381/03.02.001/2014-15 dated July 1, 2014) no borrowings remained overdue as on March 31,2015 (Previous Year Rs. Nil).

6 Deferred tax assets (net)

In compliance with Accounting Standard 22 on ''Accounting for Taxes on Income'' as specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014, the Company has taken credit of Rs. 290.81 crore (Previous Year Rs. 112.88 crore) in the Statement of Profit and Loss towards deferred tax assets (net) on account of timing differences. Deferrred tax liablity for the year ended March 31,2015 of Rs. 32.31 crore (Previous Year Rs. 18.88 crore) is created on account of tax adjustment of prior year. Tax adjustment of prior year also includes Rs. 0.38 crore (Previous Year Rs. Nil) on account of refund of interest tax.

(d) Loans includes non-performing loans of Rs. 357.57 crore (Previous Year Rs. 332.98 crore) against which provisions of Rs. 238.00 crore

(Previous Year Rs. 112.40 crore) has been made in accordance with the RBI circular (Ref. No. DNBS (PD) CC No.381/03.02.001/2014-15 dated July 1,2014). [see note (e) & 40(j)].

7 Other income

(a) Profit on sale of long-term investments of Rs. 1.00 crore for the year ended March 31,2015 is booked on sale of 100% stake in IDFC Primary Dealership Company Limited and IDFC Housing Finance Company Limited to IDFC Alternatives Limited, a wholly-owned subsidiary of the Company. (Previous Year Rs. 0.68 crore was booked as profit on sale of 49.99% stake in IDFC Pension Fund Management Company Limited, subsidiary of the Company to IDFC Securities Limited, a wholly-owned subsidiary of the Company).

8 In accordance with Accounting Standard 15 on ''Employee Benefits'' specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014 the following disclosures have been made:

9 The Company''s main business is financing by way of loans. All other activities revolve around the main business. The Company does not have any geographic segments. As such, there are no separate reportable segments as per Accounting Standard 17 on ''Segment Reporting'' specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014. During the current year, these activities also involved steps taken towards transitioning into the proposed bank. In view of the transitional nature of activities, these are not considered as reportable segments.

10 As per Accounting Standard 18 on ''Related Party Disclosures'' as notified under the Accounting Standards specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014, the related parties of the Company are as follows:

I. SUBSIDIARIES:

(a) Direct

Galaxy Mercantiles Limited (w.e.f. December 6, 2013, up to September 28, 2014)

IDFC Alternatives Limited

IDFC Asset Management Company Limited

IDFC AMC Trustee Company Limited

IDFC Bank Limited (Incorporated on October 21,2014, direct up to December 25, 2014)

IDFC Finance Limited IDFC Foundation

IDFC Financial Holding Company Limited (Incorporated on November 7, 2014)

IDFC Housing Finance Company Limited (Incorporated on March 4, 2014, direct up to August 27, 2014)

IDFC Infra Debt Fund Limited (Incorporated on March 7, 2014, direct up to August 11,2014)

IDFC Primary Dealership Company Limited (direct up to August 27, 2014)

IDFC Projects Limited IDFC Securities Limited IDFC Trustee Company Limited

Neopro Technologies Private Limited (w.e.f. March 30, 2013, up to September 28, 2014)

(b) Through subsidiaries

IDFC Bank Limited (w.e.f. December 26, 2014)

IDFC Capital Limited (up to October 31,2013)

IDFC Capital (USA) Inc.

IDFC Capital (Singapore) Pte. Ltd.

IDFC Distribution Company Limited (up to October 31,2013)

IDFC Infra Debt Fund Limited (w.e.f. August 12, 2014)

IDFC Fund of Funds Limited (up to December 12, 2014)

IDFC Housing Finance Company Limited (w.e.f. August 28, 2014 up to September 30, 2014)

IDFC Investment Advisors Limited

IDFC Investment Managers (Mauritius) Limited

IDFC Primary Dealership Company Limited (w.e.f. August 28, 2014 up to September 30, 2014)

IDFC Pension Fund Management Company Limited (up to October 31,2013)

IDFC PPP Trusteeship Company Limited (dissolved on August 23, 2013)

IDFC Project Equity Company Limited (up to September 30, 2014)

IDFC Securities Singapore Pte. Limited

II. JOINTLY CONTROLLED ENTITIES:

(a) Through subsidiaries

Delhi Integrated Multi-Modal Transit System Limited Infrastructure Development Corporation (Karnataka) Limited Uttarakhand Infrastructure Development Company Limited Rail Infrastructure Development Company (Karnataka) Limited Narayana Hrudayalaya Surgical Hospital Private Limited

III. ASSOCIATES:

(a) Direct

Galaxy Mercantiles Limited (up to December 5, 2013)

Feedback Infra Private Limited

Millennium City Expressway Private Limited (w.e.f. May 19, 2014)

(b) Through subsidiaries

Jetpur Somnath Tollways Private Limited

IV. ENTITIES OVER WHICH CONTROL IS EXERCISED:

(a) Through subsidiaries

India PPP Capacity Building Trust

V. KEY MANAGEMENT PERSONNEL:

(a) Dr. Rajiv B. Lall - Executive Chairman

(b) Mr. Vikram Limaye - Managing Director & CEO

vI. relatives OF key management PERSONNEL: (wHERE TRANSACTIONS ExIST):

(a) Ms. Bunty Chand

(b) Mr. Bharat Mukund Limaye

8 In accordance with Accounting Standard 19 on ''Leases'' as notified under the Accounting Standards specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014, the following disclosures in respect of operating leases are made: i The Company has taken office premises under operating leases, which expires between March 2016 and March 2024 (Previous Year December 2015 and September 2018). Rent includes gross rental expenses of Rs. 8.90 crore (Previous Year Rs. 7.23 crore). The committed lease rentals in the future are:

9 In accordance with Accounting Standard 20 on ''Earnings Per Share'' as notified under the Accounting Standards specified under Section 133 of the 2013 Act read with Rule 7 of the Companies (Accounts) Rules, 2014:

10 Contingent liabilities and commitments (to the extent not provided for)

(Rs. IN CRORE)

AS AT MARCH 31,2015 AS AT MARCH 31,2014

(i) Claims not acknowledged as debts in respect of :

Income-tax demands disputed by the Company (net of amounts provided). 143.68 135.71

The matters in dispute are under appeal. The demands have been partly paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

Other claims 0.55 7.20

(ii) Guarantees issued:

As a part of project assistance, the Company has also provided the following guarantees:

Financial guarantees 129.28 1,356.70

Performance guarantees 19.22 42.47

(iii) Other financial guarantees 0.01 0.33

(B) CAPITAL COMMITMENTS

(i) Uncalled liability on shares and other investments partly paid 1,650.34 1,955.77

(ii) Estimated amount of contracts remaining to be executed on capital account (net of advances) 69.43 0.86

11 The Company has entered into interest rate swaps in the nature of ''fixed / floating'' or ''floating / fixed'' for notional principal of Rs. 4,646.00 crore outstanding as on March 31, 2015 (Previous Year Rs. 4,396.00 crore) for varying maturities linked to various benchmarks for asset liability management and hedging.

The Company has foreign currency borrowings equivalent to Rs. 8,761.93 crore (Previous Year Rs. 7,240.47 crore), against which the Company has undertaken currency interest rate swaps and forward contracts to fully hedge foreign currency risk.

The Company has also entered in to coupon only currency swaps for notional principal equivalent to Rs. 314.53 crore (Previous Year Rs. 391.16 crore) and forward contracts of Rs. 22.85 crore (Previous Year Rs. 14.16 crore) to hedge the foreign currency risk towards interest on the foreign currency borrowings.

12 No amount is payable to ''Suppliers'' registered under the Micro, Small and Medium Enterprises Development Act, 2006. 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, 2006. The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.

13 The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBS (PD) CC No.381 /03.02.001 /2014-15 dated July 1,2014) :

14 Penalties / fines imposed by the RBI

The following information is disclosed in terms of RBI circular (Ref.No.RBI/2010-11/115 IDMD17/11.01.01(B)2010-11) dated July 14, 2010:

During the year ended March 31,2015 there was no penalty imposed by the RBI (Previous Year Rs. Nil).

15 Securitisation

The Company sells loans through securitisation and direct assignment. The following table sets forth, the information on securitisation and direct assignment activity of the Company as an originator.

16 Details of financial assets transferred to securitisation / reconstruction companies:

The Company has transferred certain assets to Asset Reconstruction Companies (ARC) for cash / security receipts. For the purpose of the valuation of the underlying security receipts issued by the underlying trusts managed by ARCs, the security receipts are valued in accordance with the RBI guidelines and provisioning policy of the Company.

17 The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBS (PD) CC No. 002/03.10.001/2014-15 dated November 10, 2014):

Disclosure on risk exposure on derivatives (A) QUALITATIVE DISCLOSURES:

(a) Structure and organisation for management of risk in derivatives trading, the scope and nature of risk measurement, risk reporting and risk monitoring systems, policies for hedging and/or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/mitigants:

Derivatives are financial instruments whose characteristics are derived from an underlying asset, or from interest and exchange rates or indices.

The Company undertakes transactions in interest rate swaps, cross currency swaps, principal only swaps, coupon only swaps and forward contracts for hedging the interest rate and/or exchange rate risks on the balance sheet. These include mainly the hedging of interest rate on fixed rate rupee denominated liabilities and currency & interest rate risk on the foreign currency borrowings.

The Company''s derivative transactions are governed by the foreign exchange and interest rate risk management policy, as approved by the Board. The risk limits are set up and reviewed periodically and the actual exposures are monitored against the limits allocated to the various counterparties. These limits are set up taking into account counterparty assessment and market factors.

The derivative transactions are originated by treasury front office in compliance with the limits as per the Company''s policy and the RBI guidelines. The risk group independently monitors the risk limits associated with the derivative transactions and apprises the Asset Liability Management Committee (ALCO) and the Risk Management Committee of the Board (RMC) for the compliance with the policy on derivatives. The treasury back office undertakes the activities of trade confirmation, settlement and accounting.

(b) Accounting policy for recording hedge transactions, recognition of income, premiums and discounts, valuation of outstanding contracts

The Company deals in derivatives for hedging fixed rate and floating rate coupon or foreign currency assets/liabilities. Derivative contracts designated as hedges are not marked to market. The Company identifies the hedged item (liability) at the inception of the transaction itself. Hedge effectiveness is ascertained at the time of the inception of the hedge. Derivative transactions are covered under International Swaps and Derivatives Association (ISDA) master agreements with respective counterparties.

Interest rate swaps in the nature of hedge are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of the hedge swaps is amortised over the life of the swap or underlying liability, whichever is shorter.

Currency interest rate swaps in the nature of hedge, are recorded on accrual basis and these transactions are not marked-to-market. Any resultant profit or loss on termination of hedge swaps is amortised over the life of swap or underlying liability, which-ever is shorter. The foreign currency balances on account of principal of currency interest rate swaps outstanding as at the Balance Sheet date are revalued using the closing rate.

The Company does not undertake any proprietary trading in Derivatives.

18 The figures for the previous year have been reclassified / regrouped, wherever necessary to conform with the current year''s classification / disclosure.

19 The figures of Rs. 50,000 or less have been denoted by 3.


Mar 31, 2014

01 Corporate information

DFC Limited (''the Company'') is a public company incorporated in India and regulated by the Reserve Bank of India (''RBI'') as an Infrastructure Finance Company - Non-Banking Finance Company (IFC-NBFC) engaged in financing infrastructure projects in sectors like energy, telecommunication, transportation, commercial and industrial projects including hospital, education, tourism and hotels. The Company had applied for banking license in response to the guidelines for licensing of new banks in the private sector issued by RBI in February 2013 and has received in-principle approval to set-up the bank.

02 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 with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (''the 1956 Act'') [which continues to be applicable n 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 the 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 unless stated otherwise.

03 Provisions and contingencies

(RS. IN CRORE)

FOR THE YEAR ENDED FOR THE YEAR ENDED MARCH 31, 2014 MARCH 31, 2013

Contingent provision against standard assets [see note 9 (b)] 7.21 18.80

Provision for contingencies 313.97 175.13

Provision against non- performing loans, restructured loans, doubtful debts / advances & 282.83 164.45 others (net) (see note 45 & 46)

Provision for diminution in value of investments (net) 24.82 35.73

TOTAL 628.83 394.11

4 In accordance with Accounting Standard 15 on ''Employee Benefits'' as notified under the Companies (Accounting Standards) Rules, 2006 the following disclosures have been made:

i. The Company has recognised the following amounts in the Statement of Profit and Loss towards contribution to defined contribution plans which are included under contribution to provident and other funds:

5 The Company''s main business is financing by way of loans. All other activities revolve around the main business. The Company does not have any geographic 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, 2006.

6 As per Accounting Standard 18 on ''Related Party Disclosures'' as notified under the Companies (Accounting Standards) Rules, 2006, the related parties of the Company are as follows:

I. SUBSIDIARIES:

(a) Direct

Galaxy Mercantiles Limited (w.e.f. December 6, 2013)

IDFC Alternatives Limited

IDFC Asset Management Company Limited

IDFC AMC Trustee Company Limited

IDFC Finance Limited

IDFC Foundation

IDFC Housing Finance Company Limited (incorporated on March 4, 2014)

IDFC Infra Debt Fund Limited (incorporated on March 7, 2014)

IDFC Primary Dealership Company Limited

IDFC Project Equity Company Limited (up to May 16, 2012)

IDFC Projects Limited

IDFC Securities Limited

IDFC Trustee Company Limited

Neopro Technologies Private Limited (w.e.f. March 30, 2013)

(b) Through subsidiaries

Dheeru Powergen Limited (up to April 13, 2012)

IDFC Capital Limited (up to October 31, 2013)

IDFC Capital (USA) Inc.

IDFC Capital (Singapore) Pte. Ltd.

IDFC Distribution Company Limited (up to October 31, 2013)

IDFC Fund of Funds Limited

IDFC General Partners Limited (up to September 21, 2012)

IDFC Investment Advisors Limited

IDFC Investment Managers (Mauritius) Limited

IDFC Pension Fund Management Company Limited (up to October 31, 2013)

IDFC PPP Trusteeship Company Limited (dissolved on August 23, 2013)

IDFC Project Equity Company Limited (w.e.f. May 17, 2012)

IDFC Securities Singapore Pte. Limited (incorporated on November 21, 2012)

II. JOINTLY CONTROLLED ENTITIES: (a) Through subsidiaries

Delhi Integrated Multi-Modal Transit System Limited Infrastructure Development Corporation (Karnataka) Limited Uttarakhand Infrastructure Development Company Limited

III. ASSOCIATES:

(a) Direct

Galaxy Mercantiles Limited (up to December 5, 2013)

Feedback Infra Private Limited (formerly Feedback Infrastructure Services Private Limited)

(b) Through subsidiaries

Jetpur Somnath Tollways Private Limited

Dheeru Powergen Limited (from April 14, 2012 to March 26, 2013)

IV. ENTITIES OVER WHICH CONTROL IS EXERCISED: (a) Through subsidiaries

India Infrastructure Initiative Trust (up to June 30, 2012) India PPP Capacity Building Trust

V. KEY MANAGEMENT PERSONNEL:

(a) Dr. Rajiv B. Lall - Executive Chairman

(b) Mr. Vikram Limaye - Managing Director & CEO

VI RELATIVES OF KEY MANAGEMENT PERSONNEL (WHERE TRANSACTIONS EXIST):

(a) Ms. Bunty Chand

(b) Mr. Bharat Mukund Limaye

7 Contingent liabilities and commitments (to the extent not provided for)

(RS. IN CRORE) AS AT MARCH 31, 2014 AS AT MARCH 31, 2013

(a) CONTINGENT LIABILITIES

(i) Claims not acknowledged as debts in respect of: ncome-tax demands disputed by the Company (net of amounts provided). 135.71 152.02

The matters in dispute are under appeal. The demands have been partly paid / adjusted and will be received as refund if the matters are decided in favour of the Company.

Other claims 7.20 7.20

(ii) Guarantees issued:

As a part of project assistance, the Company has also provided the following guarantees:

Financial guarantees 1,398.42 1,922.08

Performance guarantees 0.75 0.75

(iii) Other financial gurantees 0.33 47.30

(b) CAPITAL COMMITMENTS

(i) Uncalled liability on shares and other investments partly paid 1,955.77 912.88

(ii) Estimated amount of contracts remaining to be executed on capital account 0.86 0.51 (net of advances)

8 The Company has entered into interest rate swaps in the nature of ''fixed / floating'' or ''floating / fixed'' for notional principal of Rs. 4,396.00 crore outstanding as on March 31, 2014 (Previous Year Rs. 3,696.00 crore) for varying maturities linked to various benchmarks for asset liability management and hedging.

The Company has foreign currency borrowings equivalent to Rs. 7,240.47 crore (Previous Year Rs. 6,160.12 crore), against which the Company has undertaken currency interest rate swaps and forward contracts to fully hedge foreign currency risk.

The Company has also entered in to coupon only currency swaps for notional principal equivalent to Rs. 391.16 crore (Previous Year Rs. 967.37 crore) and forward contracts ofRs. 14.16 crore (Previous Year RS.8.03 crore) to hedge the foreign currency risk towards interest on the foreign currency borrowings.

9 No amount is payable to ''Suppliers'' registered under the Micro, Small and Medium Enterprises Development Act, 2006. 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, 2006. The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.

10 Penalties / fines imposed by the RBI

The following information is disclosed in terms of RBI circular (Ref. No. RBI / 2010-11 / 115 IDMD.17 / 11.01.01 (B) 2010-11) dated July 14, 2010: During the year ended March 31, 2014 there was no penalty imposed by the RBI (Previous Year Rs. 0.05 crore). Previous year penalty was on account of one instance of SGL bounce and the penalty was paid to the RBI.

11 Details of financial assets transferred to securitisation / reconstruction companies:

The Company has transferred certain assets to Asset Reconstruction Companies (ARC) for cash / security receipts. For the purpose of the valuation of the underlying security receipts issued by the underlying trusts managed by ARCs, the security receipts are valued in accordance with the provisioning policy of the Company.

12 The figures for the previous year have been reclassified, wherever necessary to conform with the current year''s classification.

13 Figures of Rs. 50,000 or less have been denoted by .


Mar 31, 2013

01 Corporate information

IDFC Limited (formerly Infrastructure Development Finance Company Limited (''the Company'') is a public company incorporated in India and regulated by the Reserve Bank of India (RBI) as an Infrastructure Finance Company - Non Banking Finance Company (IFC-NBFC) engaged in financing infrastructure projects in sectors like energy, telecommunication, transportation, commercial and industrial projects including hospital, education, tourism and hotels.

02 Basis of preparation

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended), the relevant provisions of the Companies Act, 1956 and the applicable guidelines issued by the RBI. The financial statements have been prepared on the 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,

3 The Company''s main business is financing by way of loans. All other activities revolve around the main business. The Company does not have any geographic 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, 2006.

4 As per Accounting Standard 18 on ''Related Party Disclosures'' as notified under the Companies (Accounting Standards) Rules, 2006, the related parties of the Company are as follows:

I. SUBSIDIARIES:

(a) Direct

IDFC Alternatives Limited (formerly IDFC Private Equity Company Limited)

IDFC Asset Management Company Limited IDFC AMC Trustee Company Limited IDFC Finance Limited IDFC Foundation

IDFC PPP Trusteeship Company Limited (up to March 22, 2012)

IDFC Primary Dealership Company Limited (with effect from March 17, 2012)

IDFC Project Equity Company Limited (up to May 16, 2012)

IDFC Projects Limited IDFC Securities Limited IDFC Trustee Company Limited

Neopro Technologies Private Limited (with effect from March 30, 2013)

Uniquest Infra Ventures Private Limited (up to June 3, 2011)

(b) Through subsidiaries

Dheeru Powergen Limited (up to April 13, 2012)

IDFC Capital Limited IDFC Capital (USA) Inc.

IDFC Capital (Singapore) Pte. Limited IDFC Distribution Company Limited IDFC Fund of Funds Limited

IDFC General Partners Limited (up to September 21, 2012)

IDFC Investment Advisors Limited

IDFC Investment Managers (Mauritius) Limited

IDFC Pension Fund Management Company Limited

IDFC PPP Trusteeship Company Limited (with effect from March 23, 2012)

IDFC Project Equity Company Limited (with effect from May 17, 2012)

IDFC Securities Singapore Pte. Limited (incorporated on November 21, 2012)

Jetpur Somnath Tollways Private Limited (formerly known as Jetpur Somnath Tollways Limited) (up to August 12, 2011)

II. JOINTLY CONTROLLED ENTITIES:

(a) Through subsidiaries

Delhi Integrated Multi-Modal Transit System Limited (with effect from March 24, 2011)

Infrastructure Development Corporation (Karnataka) Limited (with effect from March 24, 2011)

Uttarakhand Infrastructure Development Company Limited (with effect from March 24, 2011)

III. ASSOCIATES:

(a) Direct

Galaxy Mercantiles Limited (with effect from December 2, 2011)

Feedback Infrastructure Services Private Limited

(b) Through subsidiaries

Jetpur Somnath Tollways Private Limited (formerly known as Jetpur Somnath Tollways Limited) (with effect from August 12, 2011) Dheeru Powergen Limited (from April 14, 2012 to March 26, 2013)

IV. ENTITIES OVER WHICH CONTROL IS EXERCISED:

(a) Through subsidiaries

Emerging Markets Private Equity Fund, L. P (up to January 26, 2012)

India Infrastructure Initiative Trust (up to June 30, 2012)

India PPP Capacity Building Trust

V. KEY MANAGEMENT PERSONNEL:

(a) Dr. Rajiv B. Lall - Vice Chairman & Managing Director

(b) Mr. Vikram Limaye - Deputy Managing Director

5 The Company has entered into interest rate swaps in the nature of ''fixed / floating'' or ''floating / fixed'' for notional principal of Rs. 3,696.00 crore outstanding as on March 31, 2013 (Previous Year Rs. 3,066.00 crore) for varying maturities linked to various benchmarks for asset liability management and hedging.

The Company has foreign currency borrowings equivalent to Rs. 6,160.12 crore (Previous Year Rs. 4,152.99 crore), against which the Company has undertaken currency interest rate swaps and forward contracts of Rs. 6,160.12 crore (Previous Year Rs. 4,152.99 crore) to hedge foreign currency risk. The Company has also entered in to coupon only currency swaps for notional principal equivalent to Rs. 967.37 crore (Previous Year Rs. 430.26 crore) and forward contracts of Rs. 8.03 crore (Previous Year Rs. Nil) to hedge the foreign currency risk towards interest on the foreign currency borrowings.

6 No amount is payable to ''Suppliers'' registered under the Micro, Small and Medium Enterprises Development Act, 2006. 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, 2006. The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.

7 The following additional information is disclosed in terms of the RBI circular (Ref. No. DNBS (PD) CC No. 279 / 03.02.001 / 2012-13 dated July 2, 2012):

8 Penalties / fines imposed by the RBI

The following information is disclosed in term of the RBI circular (Ref.No.RBI/2010-11/115 IDMD17/11.01.01(B)2010-11) dated July 14, 2010:

During the year ended March 31, 2013 there was one instance of SGL bounce for which the RBI has imposed a penalty of Rs. 500,000 (Previous Year Rs. Nil). The Company has paid the penalty to the RBI.

9 Utilisation of money raised through public issues

During the year, the Company raised Rs. Nil (Previous Year Rs. 1,387.46 crore) through public issue of long-term Infrastructure Bonds eligible for deduction under Section 80CCF of the Income-tax Act, 1961 of which Rs. 179.17 crore (Previous Year Rs. 1,208.29 crore) has been utilised towards lending to infrastructure projects. Rs. Nil (Previous Year Rs. 179.17 crore) remained unutilised as at the Balance Sheet date pending regulatory approvals.

10 The figures for the previous year have been reclassified, wherever necessary to conform with the current year''s classification.

11 Figures of Rs. 50,000 or less have been denoted by 0.


Mar 31, 2012

1 CORPORATE INFORMATIONGGROUP INFORMATIONROUP INFORMATION

Infrastructure Development Finance Company Limited ('the Company') is a public company incorporated in India and regulated by the Reserve Bank of India (RBI) as an Infrastructure Finance Company-Non Banking Finance Company (IFC-NBFC) engaged in financing infrastructure projects in sectors like energy, telecommunication, transportation, commercial and industrial projects including hospital, education, tourism and hotels.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended), the relevant provisions of the Companies Act, 1956 and the applicable guidelines issued by the RBI. The financial statements have been prepared on the 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.

(a) TERMS / RIGHTS ATTACHED TO EQUITY SHARES

The Company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting. During the year ended March 31, 2012, dividend of Rs 2.30 per share (Previous Year Rs 2.00 per share) is recognised as amount distributable to equity shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(c) TERMS / RIGHTS ATTACHED TO PREFERENCE SHARES

The Company had raised Rs 840.00 crore through the issue of CCCPS during the year ended March 31, 2011. The preference shares were convertible at any time into equity shares of face value of Rs 10 each until the date falling 18 months from the date of issuance of the preference shares, at the option of the holders, at Rs 176 per equity share and carry dividend @ 6% p.a. During the year ended March 31, 2012, the preference shares were converted into 47,727,272 equity shares of Rs 10 each at a premium of Rs 166 per equity share.

(e) SHARES RESERVED FOR ISSUE UNDER STOCK OPTIONS

Refer to note (f) for details of shares reserved for issue under the ESOS of the Company and refer to note (c) for details regarding the terms of conversion of CCCPS.

(i) In respect of equity shares issued pursuant to exercise of stock options under the ESOS, the Company paid dividend of Rs 0.24 crore for the year 2010-11 (Previous Year Rs 0.15 crore for the year 2009-10) and tax on dividend of Rs 0.04 crore (Previous Year Rs 0.02 crore) as approved by the shareholders at the respective Annual General Meetings.

(ii) Tax on proposed dividend for the year is net of dividend distribution tax of Rs 11.24 crore (Previous Year Rs 7.60 crore) paid by the subsidiary companies under Section 115-O of the Income-tax Act, 1961.

(a) Borrowings of Rs 38,427.77 crore (Previous Year Rs 33,960.28 crore) are secured by way of a first floating pari passu charge over investments, current assets and loans and advances excluding investments in and other receivables from subsidiaries and affiliates.

(b) In terms of the RBI circular (Ref. No. DNBS (PD) CC No. 225 / 03.02.001 / 2011-12 dated July 1, 2011) no borrowings remained overdue as on March 31, 2012 (Previous Year Rs Nil).

(c) Unexpired discount is net of Rs 117.72 crore (Previous Year Rs 227.96 crore) towards interest accrued but not due.

(a) Borrowings of Rs 3,856.07 crore (Previous Year Rs 1,225.00 crore) are secured by way of a first floating pari passu charge over investments, current assets and loans & advances excluding investments in and other receivables from subsidiaries and affiliates.

(b) Borrowings under CBLO is secured against investments in Government securities.

(c) Unexpired discount on commercial papers is net of Rs 100.27 crore (Previous Year Rs 7.74 crore) towards interest accrued but not due.

(d) In terms of the RBI circular (Ref. No. DNBS (PD) CC No. 225 / 03.02.001 / 2011-12 dated July 1, 2011) no borrowings remained overdue as on March 31, 2012 (Previous Year Rs Nil).

(d) Rupee loans - secured includes non-performing loans of Rs 148.32 crore (Previous Year Rs 79.73 crore) against which provisions of Rs 76.89 crore

(Previous Year Rs 40.83 crore) has been made in accordance with the RBI circular (Ref. No. DNBS (PD) CC No. 225 / 03.02.001 / 2011-12 dated July 1, 2011) [see note (e) & 40 (f)].

(a) Balances with banks in current accounts include Rs Nil (Previous Year Rs 223.43 crore) being amount raised on issue of long-term Infrastructure Bonds - Tranche III, that remained unutilised as at the Balance Sheet date pending regulatory approvals.

(b) Balances with banks in deposit accounts include deposits under lien of Rs 21.00 crore (Previous Year Rs 17.00 crore) to the National Securities Clearing Corporation Limited for meeting margin requirements.

(c) Balances with banks include deposits of Rs 501.00 crore (Previous Year Rs 25.00 crore) having original maturity of more than 12 months.

3 The Company has entered into interest rate swaps in the nature of "fixed / floating" or "floating / fixed" for notional principal of Rs 3,066.00 crore outstanding as on March 31, 2012 (Previous Year Rs 2,391.00 crore) for varying maturities linked to various benchmarks for asset liability management and hedging.

The Company has foreign currency borrowings of USD 81.18 crore (Previous Year USD 62.56 crore), against which the Company has undertaken currency interest rate swaps and forward contracts of USD 81.18 crore (Previous Year USD 60.91 crore) to hedge foreign currency risk.

The Company has also entered in to coupon only currency swaps for notional principal of USD 8.41 crore (Previous Year USD 11.11 crore) to hedge the foreign currency risk towards interest on the foreign currency borrowings.

4 No amount is payable to 'Suppliers' registered under the Micro, Small and Medium Enterprises Development Act, 2006. 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, 2006. The above information takes into account only those suppliers who have responded to inquiries made by the Company for this purpose.

During the year, the Company raised Rs 1,387.46 crore (Previous Year Rs 1,451.76 crore) through public issue of long-term Infrastructure Bonds eligible for deduction under Section 80CCF of the Income-tax Act, 1961 of which Rs 1,208.29 crore (Previous Year Rs 1,228.33 crore) has been utilised towards lending to infrastructure projects. Rs 179.17 crore (Previous Year Rs 223.43 crore) remained unutilised as on the Balance Sheet date pending regulatory approvals.

During the previous year, the Company had issued and allotted 157,752,090 equity shares of Rs 10 each at a premium of Rs 158.25 per share and 84,000,000 CCCPS of Rs 100 each at par pursuant to a qualified institutional placement. The proceeds of the issue were utilised for general business purposes.

5 The Revised Schedule VI to the Companies Act, 1956 has become effective from April 1, 2011 for preparation and presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Accordingly, the figures for the previous year have been reclassified, wherever necessary to conform with the current year's classification.

 
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