Notes to Accounts of IL&FS Transportation Networks Ltd.

Mar 31, 2018

1. General Information & Significant Accounting Policies

A. General information

IL&FS Transportation Networks Limited (ITNL), the Company is a public limited company incorporated in India. Its parent and ultimate holding company is Infrastructure Leasing & Financial Services Limited (“IL&FS”).The addresses of its registered office and principal place of business are The IL&FS Financial Center, Plot C-22, ‘G’ Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. ITNL is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualization though commissioning to operations and maintenance under public to private partnership on build-operate transfer (“BOT”) basis in India.

B. Critical accounting judgments and key sources of estimation uncertainty

B.1 Critical accounting judgments

The preparation of Financial Statements in conformity with the recognition and measurement principles of Ind AS requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures of contingent liabilities at the date of the Financial Statements and the reported amounts of income and expenses for the periods presented.

Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. In case the actual results are different those from estimates, the effect thereof is given in the financial statements of the period in which the events materialize. Any change in such estimates is accounted prospectively.

The matters to be disclosed will be dictated by the circumstances of the individual entity, and by the significance of judgments and estimates made to the performance and financial position of the entity. Instead of disclosing this information in a separate note, it may be more appropriate to include such disclosures in the relevant asset.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.

B.2 Key sources of estimation uncertainty

Key source of estimation of uncertainty at the date of Financial Statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of fair value measurement of financial instruments, receivables, loans and advances, valuation of deferred tax assets, useful life of assets, cash flow models for impairment and ECL.

Key estimations in relation to fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. The inputs to these models and the discount rates are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Refer Note 30 for further disclosures.

Key estimations in relation to fair value measurement of receivables, loans and interest accrued thereon

The Company has performed valuation for its receivables, loans and interest accrued thereon as to whether there is any ECL. When the fair value of receivables, loans and interest accrued thereon cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. The inputs to these models and the discount rates are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as expected earnings in future years, liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of these receivables, loans and interest accrued thereon.

Key estimations in relation to fair value measurement investments

The Company has performed valuation for its investment as to whether there is any impairment in their fair values. When the fair value of investments cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. The inputs to these models and the discount rates are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as expected earnings in future years, liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of these investments.

Key estimations in relation to Construction revenue and cost

The Company, being a part of construction industry major components of contract estimate are budgeted costs and revenue to complete the contract. While estimating these components various assumptions are considered by the management such as (i) Work will be executed in the manner expected so that the project is completed timely (ii) consumption norms will remain same (iii) Assets will operate at the same level of productivity as determined (iv) Wastage will not exceed the normal % as determined etc. (v) Estimates for contingencies (vi) There will be no change in design and the geological factors will be same as communicated and (vii) price escalations etc. Due to such complexities involved in the budgeting process, contract estimates are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Key estimations in relation to Useful lives of Property, plant and equipment & Intangible assets

Useful lives of Property, plant and equipment & Intangible Assets (other than the life prescribed under Schedule II of the Companies Act, 2013) are estimated based on internal technical evaluation, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes. All these evaluations and assessments involve judgements on part of the management.

Key estimations in relation to deferred tax assets and MAT credit entitlement

In assessing the realisability of deferred tax assets and MAT credit entitlement the management of the Company estimates whether the Company will earn sufficient taxable profit in future periods.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. The amount of the deferred tax assets and MAT credit entitlement considered realizable could be reduced in the near term, if estimates of future taxable income during the carry forward period are reduced.

C. Recent accounting pronouncements

i. Standards issued but not yet effective

On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (“Amended Rules “) as per which Ind AS 115 “Revenue from Contract with Customers” supersedes Ind AS 11 “Construction Contracts” and Ind AS 18 “Revenue” and also MCA has carried out amendments to other existing Ind AS.These amendments shall be applicable to the Company for all accounting periods commencing on or after April 01, 2018.

ii. Impairment Of Investments

The Company performed its annual impairment test for year ended 31 March 2018 for its investments in SPVs based on fair value less costs to sell. The Company has prepared cash flow projection models for each SPV for the purpose of testing of impairment of investments made in these SPVs. The Company is following one valuation approach i.e. Discounted Cash Flow (DCF) Method, under which the value of each SPV is derived by discounting the future debt free cash flow accruing to the SPV over remaining life of the project. As at March 31, 2018, the recoverable value of certain SPVs investment is below the carrying amount recorded in books of accounts indicating potential impairment in these investments. As a result of this analysis, the Company has recognised impairment loss of Rs. 363.57 crore as above. The Company has adjusted the impairment losses arising on account of deemed equity contribution in case of HREL and JRPICL of Rs. 293.29 crore with reversal of expected credit loss of Rs. 448.76 crore (refer Note 22). The impairment losses of CNTL and JSEL are included in Other Expenses (refer Note 28).

Key Assumptions Used:

Following are the key assumptions used for the purpose of calculation of value of investment in each SPV and thereby for testing impairment:

Revenue Growth

Operating Expenses

Interest Rate and Repayement Schedule

Discount Rate

Terminal growth Rate

Revenue Growth

The SPVs of the Company operate under the Build, Operate and Transfer (BOT) and Design, Build, Finance, Operate and Transfer (DBFOT) contracts with the government authorities (grantor). Under these Contracts SPVs gets toll collection rights (Toll Projects) or fixed annuity amount (Annuity Projects) from the grantors of Contracts against construction services rendered. For Toll Projects, the Company has considered recent available traffic study for estimating projected revenue growth. For Annuity Projects, the Company has considered the annuity schedules agreed with grantors.

Operating Expenses

The Company has operating and maintainance agreement with its SPVs for all the estimated maintainance expenses during concession period. The operating expenses of the SPVs has been considered basis these agreements.

Interest Rate and Repayement Schedule

The Company has projected Interest rate and repayment schedule of borrowings based on the existing loan agreements with various lenders of each SPV.

Discount Rates

Discount rates represent the current market assessment of the risks specific to each SPV, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates.

Terminal growth Rate

The Company has estimated Terminal growth rate based on the inflation of the markets where it is operating.

Sensitivity to changes in key assumption:

Implications of the key assumption for the recoverable amount is discussed below:

Discount rate

Change in market risks and global economic and political scenario may result into increase in the expected discount rate. In such scenario, the Company may have to provide for additional impairment.

a. In addition to above impairment loss of Rs. 363.56 crores, the Company has recognised impairment loss of Rs. 3.13 crores on it Investment Properties under development (refer Note 3)

b. During the year ended March 31, 2018, the Company has sold its investment of 2,000,000 equity share held in Rajasthan Land Holding Limited to Pario Developers Private Limited against consideration received by way of preference shares which is included as investment in above schedule.The profit on sale of Rs. 147.50 Crores is included under revenue from operations.

c. During the year ended March 31, 2018, the Company has sold its investment of 14,735,076 equity share held in Gujarat Road and Infrastructure Company Limited to Oriental Tollways Private Limited and IL&FS Financial Services Limited. The profit on sale of Rs. 214.13 Crores from this transaction is included under revenue from operations.

d. During the year ended March 31, 2018, the Company has sold its Investment of 32,140,691 in equity share held in Moradabad Bareilly Expressway Limited to Oriental Tollways Private Limited. The profit on sale of Rs. 48.21 Crores from this transaction is included under revenue from operations.

e. During the year ended March 31, 2018, the Company has sold its investment of 12,000,000 Pipavav Railway Corporation Limited to IL&FS Financial Services Limited. The profit on sale of Rs. 31.88 Crores from this transaction included under revenue from operations.

f. The Company had given sub-debt to its subsidiary, Hazaribagh Ranchi Expressway Limited of Rs. 175.11 crores, Jharkhand Road Projects Implementation Company Limited of Rs. 118.17 crores, Sikar Bikaner Highway Limited of Rs. 109.45 crores, Rapid Metro Rail Gurgaon Limited of Rs. 11.46 crores and Rapid MetroRail Gurgaon South Limited of Rs. 17.74 crores . During the year, the same has been converted into Investments.

g. The Company has pledged 14,300,000 equity shares aggregating Rs. 14.50 Crores (As at March 31, 2017 - 14,300,000 equity shares aggregating Rs. 14.50 Crores) of Vansh Nimay Infraprojects Limited (“Borrower”) with Vistra ITCL (India) Limited (formerly known as IL&FS Trust Company Limited) (“Security Trustee”) to secure the dues of the Borrower including without limitation all principal amounts, interest expenses, penalties, costs, fees, etc payable by the Borrower in relation to the facility extended by the Consortium of Financial Institutions and Banks under the Pooled Municipal Debt Obligation Facility (“PMDO”).

h. The Company’s investment in “Covered Warrants” aggregating to Rs. 177.30 Crores (As at March 31, 2017 Rs. 177.30 Crores) issued by Infrastructure Leasing & Financial Services Limited (“IL&FS”) are instruments under which the holder is entitled to a proportionate share of the dividend and the residual interest / economic benefit on the shares of the underlying investments. However, the rights available as equity shareholder are with IL&FS.

i. The Company’s investment in redeemable / optionally convertible cumulative preference shares of West Gujarat Expressway Limited (“WGEL”) are convertible, at the option of the Company, into 1 equity share and carry a coupon of 2% per annum upto the conversion, accrued annually in arrears (“Coupon”). An additional coupon consisting of 95% of the balance distributable profits, that may be available with WGEL after it has met all other obligations, would also accrue on the said preference shares (“Additional Coupon”).

j. Pursuant to the order of the Hon’ble High Court of Allahabad, the collection of toll at an associate company was suspended since October 26, 2016 and the matter is pending with the Arbitrator. Based on the provisions of the Concession agreement (relating to the Compensation and other recourses) supported by legal opinion, the Company is confident that the underlying value of the Intangible and other assets of associate are fully recoverable. Consequently the Company is of the view that it would be appropriate to carry its investment of the associate at Rs. 162.33 crores.

k. The Company has given non-disposal undertakings to the lenders and the grantors of the concession for its investment in infrastructure companies promoted by it with regard to its investments in the equity share capital of these companies as a part of promoter’s undertaking to such lenders, equity investors and the grantors of the concession, the carrying value of which is Rs. 1,893.30 Crores as at March 31, 2018. (Rs. 1,752.15 Crores as at March 31, 2017)

l. During the year the Company has purchased Elsamex Maintenance Services Limited ,Elsamex India Private Limited, Yala Contruction Company Liimited and Grusamar India Limited from Elsamex S.A.

As part of normal asset monetisation plan, the company had considered certain SPVs to be transferred to InvIT and fair valued the corresponsing financial asset. In view of invIT not being pursued, during the year the Company has reassessed its busniess plan for these subsidiaries and reversed the expected credit loss (net of impairment of Rs. 293.28 Crore) of Rs. 110.55 Crore recognised on its financial asset and included in other income. The Company has given loans to these InvIT subsidiaries i.e. Hazaribaug Ranchi Expressway Limited, Sikar Bikaner Highways Limited, Jharkhand Road Projects Implementation Company Limited @ zero percent as the Company has committed to senior lenders that it will provide financial support to its subsidiaries in case of cost over runs. Since loans to these subsidiaries are given at zero percent the Company has considered difference between 0% to 8.56%-10.85% as deemed cost of investments. Accordingly the company has recognised deemed equity contribution of Rs. 402.73 Crore. and reversed the expected credit loss of Rs. 403.84 Crore created in earlier years. Further the Company has also considered impairment on deemed equity contribution in Jharkhand Road Projects Implementation Company Limited and Hazaribagh Ranchi Expressway Limited of Rs. 293.29 Crore refer note 4(viii).

a. There are no receivables due from directors or other officers of the company either severally or jointly with any other person; and from firms or private companies respectively in which any director is a partner, a director or a member.

b. Trade receivables are generally on terms of 30 to 90 days and certain receivables carry interest for overdue period.

c. Expected credit loss (“ECL”) is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the weighted average cost of borrowings of the Company.

d. The estimated realization date of the receivables has been taken by considering the cash flow model of the respective project SPVs which in the view of the management is the most realistic and appropriate way for estimating the realization date of the receivables with respect to the project SPVs. In respect of other than project SPVs, the management has carried out its internal assessment procedures and accordingly the realization date has been estimated.

1. Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the balance sheet as follows:

a. Cash at Banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods between one day and three months, depending on the immediate cash requirements fo the Company, and earn interest at the respective short term deposits rates.

b. For the purpose of the statement of cash flows, cash and cash equivalents comprise following :

c. Non-cash transactions excluded from cash flow statement

i. Fixed deposit with IndusInd bank of Rs. 3.42 crore converted into Loan to Jharkhand Road Projects Implementation Company Limited.

ii. During the year , Interest accured from Karyavattom Sports Facilities Limited converted into Loan Rs. 3.32 crore.

iii. During the year , there has been conversion of receivable into loan of Rs. 17.93 crore.

iv. During the year, the short term loan given to certain Group Companies have been assigned to Certain existing lenders of the Company aggregating Rs. 3072.43 crore.

v. The Company had given sub-debt to its subsidiaries, Hazaribagh Ranchi Expressway Limited of Rs. 175.11 crore Jharkhand Road Projects Implementation Company Limited of Rs. 118.17 crore, Sikar Bikaner Highways Limited of Rs. 109.45 crore, Rapid Metro Gurgoan Limited of Rs. 11.46 crore and Rapid Metrorail Gurgoan South Limited of Rs. 17.74 crore. During the year, the same has been converted into Investment

For the above investments in subsidiaries, the Company has entered into letter of intent (LOI)/ Memorandom understanding (MOU) with customer for sale of such investments. The LOI/MOU has certain condition precedence which are outstanding as on March 31, 2018 and accordingly these investments are considered as held for sale and carried at cost or as per market value whichever is lower.

iv. The Company has one class of equity shares with face value of Rs. 10 each fully paid-up. Each shareholder has a voting right in proportion to his holding in the paid-up equity share capital of the Company.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive 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.

Where final dividend proposed by the Board of Directors, is subject to the approval of the shareholders in the Annual General Meeting.

Note 1: The Company has issued several series of Non Convertible Debentures (NCDs). In terms of Section 71(4) of the Companies Act, 2013 read with rule 18(7)(b)(iii) of the Companies (Share Capital and Debentures) Rules 2014, the Company being an Infrastructure Company is required to create Debenture Redemption Reserve to the extent of 25% of the value of privately placed NCDs until such NCDs are redeemed.

Note 2: The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Note 3: During the year ended March 31, 2018, the dividend of Rs. Nil per share (Rs. Nil including dividend distribution tax of Rs. Nil) was paid to holders of fully paid equity shares. During the year ended March 31, 2017, the dividend paid was Rs. 2 per share (Rs. 75.03 crore including dividend distribution tax of Rs. 9.29 crore).

f. Rights of CRPS and CNCRPS holders are as follows:

The holder(s) of CRPS and CNCRPS shall have no voting rights other than in respect of matters directly affecting the rights attached to the CRPS and CNCRPS. In the event of any due and payable dividends on the CRPS and CNCRPS remaining unpaid for a period of two years prior to the start of any General Meeting of the Equity Shareholders, the holder(s) of CRPS and CNCRPS shall gain voting rights in respect of all matters placed by the Company at a General Meeting of its Equity Shareholders in accordance with the provisions of the Companies Act and the Articles of Association of the Company. In the event of winding up or repayment of capital, the holder(s) of the CRPS and CNCRPS shall carry a preferential right vis-a-vis equity shareholders to be repaid the amount of paid up capital, unpaid dividends and fixed premium, in accordance with the provisions of the Companies Act and the Articles of Association of the Company. The claims of holder(s) of CRPS and CNCRPS shall be subordinated to the claims of all secured and unsecured creditors of the Company but senior to equity shareholders and pari passu amongst other preference shareholders.

During the current year, preference dividend of Rs. 84.72 Crore (previous year ended March 31, 2017: Rs. 78.86 Crore) was paid to holders of CRPS and CNCRPS.

1. In terms of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been formed by the Company. The areas for CSR activities as per the CSR policy are (i) Promotion of education, (ii) promoting gender equality and empowering women, (iii) reducing child mortality and improving maternal health, (iv) ensuring environmental sustainability, (v) employment enhancing vocational skills, (vi) social business projects, (vii) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socioeconomic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women and (viii) such other matters as may be prescribed.

In line with Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities, issued by the

Institute of Chartered Accountants of India, the disclosure of the CSR expenditure during the year, is as under:

(a) Gross amount required to be spent by the company during the year: Rs. 4.95 crore (previous year Rs. 5.89 Crore)

2. Financial instruments

2.1 Capital management

The Company endeavours to maintain sufficient levels of working capital, current assets and current liabilities which helps the company to meet its expense obligations while also maintaining sufficient cash flow.

The capital structure of the Company consists of net debt (borrowings as detailed in note 16 offset by cash and bank balances) and equity of the Company (comprising issued capital, reserves and retained earnings as detailed in note 14 and 15). The capital structure of the Company is reviewed by the management on a periodic basis.

2.1.1 Gearing ratio

The gearing ratio at end of the reporting period was as follows.

Formulae used for the computation of the Ratios:

a) Net Debt/Equity Ratio = Net Debt / (Equity Share Capital Other Equity)

Debt is defined as long-term borrowings(Including Preference share capital), current maturities of long-term borrowings, short-term borrowings and interest accrued thereon (excluding derivative, financial guarantee contracts), as described in note 16.

Equity includes equity share capital and reserves of the Company that are managed as capital.

In order to achieve its overall objective, the Company’s management, amongst other things, aims to ensure that it meets the financial covenants attached to the borrowings. Breaches in meeting the financial covenants would permit the bank to seek action as per terms of the agreement.

As at March 31, 2018 there are no significant concentrations of credit risk for financial assets designated as FVTPL. The carrying amount reflected above represents Company’s maximum exposure to credit risk for such financial assets.

2.3 Financial risk management objectives

The Company’s Corporate Treasury function monitors and manages the financial risks relating to the operations of the Company. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company’s policies approved by the Board of Directors. Compliance with policies and exposure limits is reviewed on a continuous basis. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes.

The Corporate Treasury function reports to the Company’s management, which monitors risks and policies implemented to mitigate risk exposures.

2.4 Market risk

The Company does not have activities that exposes it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured.

2.5 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising cross currency interest rate swaps.

The carrying amounts of the Company’s unhedged foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows.

2.6.1 Foreign currency sensitivity analysis

The Company is mainly exposed to the currency of United States and the currency of Eurozone.

The following table details the Company’s sensitivity to a 10% increase and decrease in the ‘ against the relevant foreign currencies. 10% sensitivity indicates management’s assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding unhedged foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

2.6.2 Cross currency interest rate swap contracts

Under these swap contracts, the Company agrees to exchange the difference between fixed interest amounts based on functional currency notional principal amounts and floating rate interest amounts calculated on agreed foreign currency notional principal amounts. Also the Company agrees to exchange difference between the functional currency notional principal amount and the amount calculated based on the spot exchange rates on the foreign currency notional principal amount on specified dates. Such contracts enable the Company to mitigate the risk of changing interest rates and foreign exchange rates on the cash flows of issued foreign currency variable rate debt. The fair value of these swaps at the end of the reporting period is determined by discounting the future cash flows using the foreign currency and interest rate curves at the end of the reporting period and the credit risk inherent in these contracts, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.

The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period.

The cross currency interest rate swap contracts are generally settled on a quarterly basis. The floating rate on the interest rate swaps is the 3 months LIBOR. The Company settles the difference between the fixed and floating interest rate on a net basis.

All cross currency interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Company’s cash flow exposure resulting from variable interest rates on borrowings. The cross currency interest rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt affect profit or loss.

2.7 Interest rate risk management

The Company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

The Company’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

2.7.1 Interest rate sensitivity analysis

The sensitivity analyse below have been determined based on the exposure to the interest rates for all non-derivative variable interest rate instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the impact of the same is given in below table which is mainly attributable to the Company’s exposure to interest rates on its variable rate borrowings.

The Company’s sensitivity to interest rates has decreased during the current year mainly due to the reduction in variable rate debt instruments and the increase in interest rate swaps to swap floating rate debt to fixed rate debt.

2.8 Commodity Price Risk

The Company requires construction materials for implementation (construction, operation and maintenance) of the projects, such as cement, bitumen, steel and others, for which, they have fixed price contract (with capped escalation charges) with the EPC contractor and Operation & Maintenance Contractor so as to manage the exposure to price increases in raw materials. Hence, the sensitivity analysis is not required.

2.9 Other price risks

The Company is exposed to equity price risks arising from equity investments which is not material.

2.10 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and its financing activities (primarily loans given).

The credit risk on derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

2.10.1 Trade receivables and loans given :

Customer credit risk is managed by Company’s accounts and treasury function. Outstanding receivables and loans are regularly monitored and provision is made for expected credit loss, if any. The trade receivables and loans given are unsecured. As at March 31, 2018, the Company had 9 customers (as at March 31, 2017: 9 customers) that owed the Company more than Rs. 100 crore each and accounted for approximately 92 %(as at March 31, 2017: 82%) of all the receivables outstanding. As at March 31, 2018, the Company had 12 loanees (as at March 31, 2017: 15 loanees) that owed the Company more than crore each and accounted for approximately 77.34% (as at March 31, 2017: 89%, ) of all the loans outstanding.

2.11 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The endeavour of the Company is to constantly improve the ratio of short term to long term maturity profile so as to minimise the risk of having to refinance the borrowing at regular short intervals.

2.11.1 Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

The following table details the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

The following table details the Company’s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

2.12 Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

2.12.1 Fair value of the Company’s material financial assets and financial liabilities that are measured at fair value on a recurring basis

Some of the Company’s financial assets and financial liabilities are measured at fair value at the end of each reporting period.

The following table gives information about how the fair values of these financial assets and financial liabilities are determined (in particular, the valuation technique(s) and inputs used).

The fair values of the financial assets and financial liabilities above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties.

3. Employee benefit plans

3.1 Defined contribution plans

The Company offers its employees defined contribution benefits in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the year into separate funds under certain statutory / fiduciary-type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, contributions to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee’s salary. The assets of the plans are held separately from those of the Company in funds under the control of Regional provident fund office and third party fund manager.

The total expense recognised in profit or loss of Rs. 5.95 crores (for the year ended March 31, 2017: Rs. 6.02 crore) represents contributions payable to these plans by the Company at rates specified in the rules of the plans.

3.2 Defined benefit plans

The Company offers its employees defined-benefit plans in the form of gratuity (a lump sum amount). Benefits under defined benefit plans are typically based on years of service rendered and the employee’s eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year end. Actuarial valuation is based on “Projected Unit Credit” method. The Company recognizes Actuarial Gain & Loss in the Other Comprehensive Income Account in the year in which they occur.

Under the plans, the employees are entitled to post-retirement lumpsum amounting to 30 days of final salary for each completed years of service. The eligible salary is Basic pay. Benefits are vested to employee on completion of 5 years.

Investment risk The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined based on the benchmark yields available on Government Bonds at the valuation date with terms matching that of the liabilities. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s investments.

Longevity risk The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

Salary increase rates take into account inflation, seniority, promotion and other relevant factors.

The actuarial calculations used to estimate defined benefit commitments and expenses are based on the following assumptions, which if changed, would affect the defined benefit commitment’s size, funding requirements and pension expense. The principal assumptions used for the purposes of the actuarial valuations were as follows.

All of the Plan Asset is entrusted to LIC of India under their Company Gratuity Scheme. The reimbursement is subject to LIC’s Surrender Policy. Since the scheme funds are invested with LIC of India Expected rate of return on Plan assets is based on rate of return declared by fund managers.

The actual return on plan assets was Rs. 1.07 crore (2017: Rs. 0.81 crore).

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

- If the discount rate is 100 basis points higher/(lower), the defined benefit obligation would decrease by Rs. 15.21 crore (decrease by Rs. 0.82 crore as at March 31, 2017) and increase by Rs. 17.08 crore (increase by Rs. 0.93 crore as at March 31, 2017)

- If the salary escalation rate increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 17.02 crore (increase by Rs. 0.90 crore as at March 31, 2017) and decrease by Rs. 15.24crore (decrease by Rs. 0.81 crore as at March 31, 2017)

- If the Attrition rate increases (decreases) by 1%, the defined benefit obligation would increase by Rs. 16.09 crore (increase by Rs. 0.07 crore as at March 31, 2017) and decrease by Rs. 16.09 crore (decrease by Rs. 0.08 crore as at March 31, 2017)

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

1. Analysis of Defined Benefit Obligation

The number of members under the scheme have increased by 6.60%. Similarly the total salary increased by 15.59% during the accounting period. The resultant liability at the end of the period over the beginning of the period has increased by 36.33%

2 Expected rate of return basis

Since the scheme funds are invested with LIC of India Expected rate of return on Plan assets is based on rate of return declared by fund managers.

3 Description of Plan Assets and Reimbursement Conditions

100% of the Plan Asset is entrusted to LIC of India under their Company Gratuity Scheme. The reimbursement is subject to LIC’s Surrender Policy

The average duration of the benefit obligation at March 31, 2018 is 7.18 years (as at March 31, 2017: 9.87 years)

The expected contributions to the defined benefit plan for the next annual reporting period as at March 31 2018 is Rs. 2.65 Crore (as at March 31 2017 is Rs. 1.64 Crore)

4. Letter of comfort, letter of awareness and letter of financial support or Guarentees

a. The Company has issued letter of comfort / letter of awareness to banks and a related party in respect of loans availed by a few of its subsidiaries aggregating to Rs. 2,654.51 Crore as at March 31, 2018 (as at March 31, 2017 Rs. 2,535 Crore)

b. Letter of financial support has been issued to ITNL Road Infrastructure Development Company Limited, West Gujarat Expressway Limited, Vansh Nimay Infraprojects Limited, ITNL International Pte. Ltd., Singapore, ITNL Offshore Pte. Ltd., Singapore, ITNL Africa Projects Ltd., Nigeria, ITNL International DMCC, Dubai, Sharjah General Services Company LLC, Dubai IIPL USA LLC, MP Border Checkposts Development Company Limited and Thiruvananthapuram Road Development Company Limited to enable them to continue their operations and meet their financial obligations as and when they fall due.

c. Guarantees or counter guarantees issued to outsider in respect of Group companies amounting to Rs. 1,500 Crore which is backed by Parent.

5. Lease

The Company holds certain properties under a non-cancellable operating lease. The Company’s future lease rentals under the operating lease arrangements as at the year ends are as under:

6. Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Indian Accounting Standard 108 on Operating Segment are not applicable.

7. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on May 29, 2018

8. IND-AS issued but not effective yet

On March 28, 2018,the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.

(a) Issue of Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.

The Compnay continue to evaluate the available transaction method and its contractual arrangments. The ultimate impact on revenue resulting from the application of IND-AS 115 will be subject to asseements that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The company considerations also include, but are not limited to, the comparability of its financials statements and the comparability within its industry from application of the new standard to its contractual arrangements. The company has established an implementation team to implement IND-AS 115 related to the recognition of revenue from contracts with customers and it continues to evaluate the changes to accounting system and proccess, and additional disclosure requirement that may be necessary.

(b) Amendment to Existing issued Ind AS

The MCA has also carried out amendments of the following accounting standards:

i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

ii. Ind AS 40 - Investment Property

iii. Ind AS 12 - Income Taxes

iv. Ind AS 28 - Investments in Associates and Joint Ventures and

v. Ind AS 112 - Disclosure of Interests in Other Entities Application of above standards are not expected to have any significant impact on the Company’s Financial Statements.

9. The figures for the year ended March 31, 2017 have been regrouped and / or re-arranged wherever necessary to conform to the classification adopted in the year ended March 31, 2018.

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Mar 31, 2017

Footnotes :

a. Investment property consists of 49,555 sq.ft. commercial property in Mumbai. The said property has been offered as a security given to one of the lenders of the Company.

For investment property existing as at April 1, 2015, i.e., its date of transition to Ind AS, the Company has used Indian GAAP carrying value as deemed costs.

The investment property is held under freehold interests.

b. Fair value measurement of the Company''s investment properties

Fair value of property is determined by using market comparable method. This means that valuations performed by the valuer are based on active market prices, significantly adjusted for difference in nature, location or condition of the specific property. As at March 31,2017, As at March 31,2016 and April 1,2015 ,the property is fair valued based on valuations performed by one of the independent valuer who has relevant valuation experience for similar properties in India.

Footnotes

a. The Company has given non-disposal undertakings to the lenders and the grantors of the Concession for its investment in infrastructure companies promoted by it with regard to its investments in the equity share capital of these companies as a part of promoter''s undertaking to such lenders, equity investors and the grantors of the Concession, the carrying value of which is Rs. 1,752.15 Crore as at March 31, 2017. (Rs. 1,590.01 Crore as at March 31, 2016, Rs.1,522.62 Crore as at April 1, 2015)

b. The Company has pledged 14,300,000 equity shares aggregating Rs.14.50 Crore (As at March 31, 2016 - 14,300,000 equity shares aggregating Rs.14.50 Crore, As at April 1, 2015 - 14,300,000 equity shares aggregating Rs.14.50 Crore) of Vansh Nimay Infraprojects Limited (“Borrower") with Vistra ITCL (India) Limited (formerly known as IL&FS Trust Company Limited) (“Security Trustee") to secure the dues of the Borrower including without limitation all principal amounts, interest expenses, penalties, costs, fees, etc payable by the Borrower in relation to the facility extended by the Consortium of Financial Institutions and Banks under the Pooled Municipal Debt Obligation Facility (“PMDO").

c. The Company''s investment in “Covered Warrants" aggregating to Rs.177.30 Crore (As at March 31, 2016 Rs.177.30 Crore; As at April 1, 2015 Rs.177.30 Crore) issued by Infrastructure Leasing & Financial Services Limited (“IL&FS") are instruments under which the holder is entitled to a proportionate share of the dividend and the residual interest / economic benefit on the shares of the underlying investments. However, the rights available as equity shareholder are with IL&FS.

d. The Company''s investment in redeemable / optionally convertible cumulative preference shares of West Gujarat Expressway Limited (“WGEL") are convertible, at the option of the Company, into 1 equity share and carry a coupon of 2% per annum upto the conversion, accrued annually in arrears (“Coupon"). An additional coupon consisting of 95% of the balance distributable profits, that may be available with WGEL after it has met all other obligations, would also accrue on the said preference shares (“Additional Coupon").

e. During the year ended March 31, 2016, the Company has sold its investment of 202,602,955 equity shares held in Rapid MetroRail Gurgaon Limited to Infrastructure Leasing & Financial Services Limited, its holding company. The profit on sale of Rs.141.82 crore from this transaction is included under Other income.

f. Pursuant to the order of Hon''ble High Court of Allahabad, the collection of toll at Noida Toll Bridge Company Limited has been suspended since October 26, 2016 and the matter is pending with the Hon''ble Supreme Court. Based on the provisions of the Concession agreement (relating to the Compensation and other recourses) supported by legal opinion, the Company is confident that the underlying value of the Intangible and other assets are fully recoverable. Consequently the Company is of the view that it would be appropriate to carry the investment at deemed cost of Rs.162.33 crore.

g. During the year ended March 31, 2017, the Company sold 260,949 equity shares (representing the Company''s entire shareholding of 77.39%) of Elsamex S.A., Spain, a subsidiary Company to its wholly owned subsidiary in Singapore, against issue of fresh equity shares. The said transaction is done pursuant to the disclosure made by the wholly owned subsidiary company in their International Bond offering document. The profit on sale of Rs.140.93 crore from this transaction is included under Other income.

h. During the year ended March 31, 2017, the Company sold 33,700,060 equity shares of Andhra Pradesh Expressway Limited, a subsidiary Company. The loss on sale of Rs.1.18 crore from this transaction is included under Other income.

i. During the year ended March 31, 2017, by order of High Court of Bombay out of total 220,000,000 preference shares of Andhra Pradesh Expressway Limited held by the Company; 83,000,000 preference shares were cancelled and balance 137,000,000 preference shares were converted into 0.0001% interest bearing unsecured loan of Rs.137 crore.

j. During the year ended March 31, 2017, the Company sold 8,313,800 equity shares (representing 15% shareholding) of Gujarat Road and Infrastructure Company Limited. The profit on sale of Rs.101.85 crore from this transaction is included under Other income.

k. The Company has formed IL&FS Transportation Investment Trust (“InvIT") and identified 4 SPVs i.e. North Karnataka Expressway Limited, Hazaribagh Ranchi Expressway Limited, Jharkhand Road Projects Implementation Company Limited and Sikar Bikaner Highway Limited which will be transferred to InvIT once the funds are raised by InvIT.

c. Non-cash transactions excluded from cash flow statement

i. During the current year, there is a sale of 260,949 equity shares (representing the Company''s entire shareholding of 77.39%) of Elsamex S.A., Spain, a subsidiary Company to ITNL International Pte. Ltd., Singapore (“IIPL") against issue of fresh equity shares of Rs.413.30 crore by IIPL.

ii. During the current year, there has been conversion of receivables into loans of Rs.303.88 crore.

iii. During the current year, the short term loans given to certain Group Companies have been assigned to certain existing lenders of the Company aggregating Rs.1,320.00 crore.

iv. During the current year, by order of High Court of Bombay out of total 220,000,000 preference shares of Andhra Pradesh Expressway Limited held by the Company; 83,000,000 preference shares were cancelled and balance 137,000,000 preference shares were converted into 0.0001% interest bearing unsecured loan of Rs.137 crore.

v. The Company had given sub-debt to its subsidiary, Khed Sinner Expressway Limited of Rs.144.10 crore. During the previous year, the same has been converted into 144,100,000 equity shares of Rs.10 each.

vi. During the previous year, the sale consideration of Rs.344.43 crore for sale of equity shares of Rapid MetroRail Gurgaon Limited to Infrastructure Leasing & Financial Services Limited (“IL&FS") has been adjusted against the outstanding borrowing from IL&FS.

iv. The Company has one class of equity shares with face value of Rs.10 each fully paid-up. Each shareholder has a voting right in proportion to his holding in the paid-up equity share capital of the Company.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive 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.

Where final dividend is proposed by the Board of Directors, it is subject to the approval of the shareholders in the Annual General Meeting.

During the FY 2015-16, the Company issued 82,240,007 equity shares on rights basis in the ratio of 1:3 at a price of Rs.90 per share having a face value of Rs.10 each aggregating Rs.82.24 Crore and premium of Rs.80 each aggregating to Rs.657.92 Crore. The loss per share has been accordingly adjusted for the effects of Rights Issue for the year ended March 31, 2016.

e. Authorized preference share capital of the Company is 1,000,000,000 shares of Rs.10 each aggregating Rs.1,000 crore (as at March 31, 2016 : 1,000,000,000 shares of Rs.10 each aggregating Rs.1,000 crore; as at April 1, 2015 : 1,000,000,000 shares of Rs.10 each aggregating Rs.1,000 crore)

f. Rights of CRPS and CNCRPS holders are as follows:

The holder(s) of CRPS and CNCRPS shall have no voting rights other than in respect of matters directly affecting the rights attached to the CRPS and CNCRPS. In the event of any due and payable dividends on the CRPS and CNCRPS remaining unpaid for a period of two years prior to the start of any General Meeting of the Equity Shareholders, the holder(s) of CRPS and CNCRPS shall gain voting rights in respect of all matters placed by the Company at a General Meeting of its Equity Shareholders in accordance with the provisions of the Companies Act and the Articles of Association of the Company. In the event of winding up or repayment of capital, the holder(s) of the CRPS and CNCRPS shall carry a preferential right vis-a-vis equity shareholders to be repaid the amount of paid up capital, unpaid dividends and fixed premium, in accordance with the provisions of the Companies Act and the Articles of Association of the Company. The claims of holder(s) of CRPS and CNCRPS shall be subordinated to the claims of all secured and unsecured creditors of the Company but senior to equity shareholders and pari passu amongst other preference shareholders.

During the current year, preference dividend of Rs.78.86 Crore (previous year ended March 31, 2016 : Rs.78.86 Crore) was paid to holders of CRPS and CNCRPS.

1 Financial instruments

1.1 Capital management

The Company endeavours to maintain sufficient levels of working capital, current assets, and current liabilities which helps the company to meet its expense obligations while also maintaining sufficient cash flow.

The capital structure of the Company consists of net debt (borrowings as detailed in note 15 offset by cash and bank balances) and equity of the Company (comprising issued capital, reserves and retained earnings as detailed in note 13 and 14). The capital structure of the Company is reviewed by the management on a periodic basis.

Debt is defined as long-term borrowings, current maturities of long-term borrowings, short-term borrowings and interest accrued thereon (excluding derivative, financial guarantee contracts), as described in note 15.

Equity includes all capital and reserves of the Company that are managed as capital.

In order to achieve its overall objective, the Company''s management amongst other things, aims to ensure that it meets the financial covenants attached to the borrowings. Breaches in meeting the financial covenants would permit the bank to seek action as per terms of the agreement.

1.2 Financial risk management objectives

The Company''s Corporate Treasury function monitors and manages the financial risks relating to the operations of the Company. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Company''s policies approved by the Board of Directors. Compliance with policies and exposure limits is reviewed on a continuous basis. The Company does not enter into or trade in financial instruments, including derivative financial instruments, for speculative purposes.

The Corporate Treasury function reports to the Company''s management, which monitors risks and policies implemented to mitigate risk exposures.

1.3 Market risk

The Company does not have activities that exposes it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

There has been no change to the Company''s exposure to market risks or the manner in which these risks are managed and measured.

1.4 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilizing cross currency interest rate swaps.

1.5 Foreign currency sensitivity analysis

The Company is mainly exposed to the currency of United States and the currency of Eurozone.

The following table details the Company''s sensitivity to a 10% increase and decrease in the '' against the relevant foreign currencies. 10% sensitivity indicates management''s assessment of the reasonable possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

1.6 Cross currency interest rate swap contracts

Under these swap contracts, the Company agrees to exchange the difference between fixed interest amounts based on functional currency notional principal amounts and floating rate interest amounts calculated on agreed foreign currency notional principal amounts. Also the Company agrees to exchange difference between the functional currency notional principal amount and the amount calculated based on the spot exchange rates on the foreign currency notional principal amount on specified dates. Such contracts enable the Company to mitigate the risk of changing interest rates and foreign exchange rates on the cash flows of issued foreign currency variable rate debt. The fair value of these swaps at the end of the reporting period is determined by discounting the future cash flows using the foreign currency and interest rate curves at the end of the reporting period and the credit risk inherent in these contracts, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the reporting period.

The following tables detail the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the end of the reporting period.

The cross currency interest rate swap contracts are generally settled on a quarterly basis. The floating rate on the interest rate swaps is the 3 months LIBOR. The Company settles the difference between the fixed and floating interest rate on a net basis.

All cross currency interest rate swap contracts exchanging floating rate interest amounts for fixed rate interest amounts are designated as cash flow hedges in order to reduce the Company''s cash flow exposure resulting from variable interest rates on borrowings. The cross currency interest rate swaps and the interest payments on the loan occur simultaneously and the amount accumulated in equity is reclassified to profit or loss over the period that the floating rate interest payments on debt affect profit or loss.

1.7 Interest rate risk management

The Company is exposed to interest rate risk as it borrows funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings,

The Company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

1.8 Interest rate sensitivity analysis

The sensitivity analyses below have been determined based on the exposure to the interest rates for all non-derivative variable interest rate instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease represents management''s assessment of the reasonably possible change in interest rates.

1.9 Commodity Price Risk

The Company requires construction materials for implementation (construction, operation and maintenance) of the projects, such as cement, bitumen, steel and others. For which, they have fixed price contract with the EPC contractor and Operation & Maintenance Contractor so as to manage the exposure to price increases in raw materials. Hence, the sensitivity analysis is not required.

1.10 Other price risks

The Company is exposed to equity price risks arising from equity investments which is not material.

1.11 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and its financing activities (primarily loans given).

The credit risk on derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

1.12 Trade receivables and loans given :

Customer credit risk is managed by Company''s accounts and treasury function. Outstanding receivables and loans are regularly monitored and provision is made for expected credit loss, if any. The trade receivables and loans given are unsecured. As at March 31, 2017, the Company had 9 customers (as at March 31, 2016: 12 customers, as at March 31, 2015: 8 customers) that owed the Company more than Rs.100 crore each and accounted for approximately 82% (as at March 31, 2016: 91%, as at March 31, 2015: 86%) of all the receivables outstanding. As at March 31, 2017, the Company had 15 loanees (as at March 31, 2016: 11 loanees, as at March 31, 2015: 12 loanees) that owed the Company more than crore each and accounted for approximately 89% (as at March 31, 2016: 79%, as at March 31, 2015: 83%) of all the loans outstanding.

1.13 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The endeavour of the Company is to constantly improve the ratio of short term to long term maturity profile so as to minimize the risk of having to refinance the borrowing at regular short intervals.

1.14 Liquidity and interest risk tables

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

The following table details the Company''s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Company''s liquidity risk management as the liquidity is managed on a net asset and liability basis.

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities is subject to change if changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period.

The following table details the Company''s liquidity analysis for its derivative financial instruments. The table has been drawn up based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis. When the amount payable or receivable is not fixed, the amount disclosed has been determined by reference to the projected interest rates as illustrated by the yield curves at the end of the reporting period.

1.15 Fair value measurements

This note provides information about how the Company determines fair values of various financial assets and financial liabilities.

2. Employee benefit plans

3. Defined contribution plans

The Company offers its employees defined contribution benefits in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the year into separate funds under certain statutory / fiduciary-type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, contributions to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. The assets of the plans are held separately from those of the Company in funds under the control of Regional provident fund office and third party fund manager.

The total expense recognized in profit or loss of Rs.6.02 crores (for the year ended March 31, 2016: Rs.7.29 crore) represents contributions payable to these plans by the Company at rates specified in the rules of the plans.

4. Defined benefit plans

The Company offers its employees defined-benefit plans in the form of gratuity (a lump sum amount). Benefits under defined benefit plans are typically based on years of service rendered and the employee''s eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year end. Actuarial valuation is based on “Projected Unit Credit" method. The Company recognizes Actuarial Gain & Loss in the Other Comprehensive Income Account in the year in which they occur.

Under the plans, the employees are entitled to post-retirement lumpsum amounting to 30 days of final salary for each completed years of service. The eligible salary is Basic pay. Benefits are vested to employee on completion of 5 years.

All of the Plan Asset is entrusted to LIC of India under their Company Gratuity Scheme. The reimbursement is subject to LIC''s Surrender Policy. Since the scheme funds are invested with LIC of India Expected rate of return on Plan assets is based on rate of return declared by fund managers.

The actual return on plan assets was Rs.0.81 crore (2016: Rs.0.48 crore).

Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

- If the discount rate is 100 basis points higher/(lower), the defined benefit obligation would decrease by Rs.0.82 crore (decrease by Rs.0.95 crore as at March 31, 2016) (decrease by Rs.0.65 crore as at April 1, 2015) and increase by Rs.0.93 crore (increase by Rs.1.11 crore as at March 31, 2016) (increase by Rs.0.76 crore as at April 1, 2015).

- If the salary escalation rate increases (decreases) by 1%, the defined benefit obligation would increase by Rs.0.90 crore (increase by Rs.1.10 crore as at March 31, 2016) (increase by Rs.0.75 crore as at April 1, 2015) and decrease by Rs.0.81 crore (decrease by Rs.0.96 crore as at March 31, 2016) (decrease by Rs.0.65 crore as at April 1, 2015).

- If the Attrition rate increases (decreases) by 1%, the defined benefit obligation would increase by Rs.0.07 crore (increase by Rs.0.09 crore as at March 31, 2016) (increase by Rs.0.04 crore as at April 1, 2015) and decrease by Rs.0.08 crore (decrease by Rs.0.07 crore as at March 31, 2016) (decrease by Rs.0.04 crore as at April 1, 2015).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

1. Analysis of Defined Benefit Obligation

The number of members under the scheme have increased by 7.07%. Similarly the total salary increased by 10.85% during the accounting period. The resultant liability at the end of the period over the beginning of the period has increased by 21.75%

2 Expected rate of return basis

Since the scheme funds are invested with LIC of India Expected rate of return on Plan assets is based on rate of return declared by fund managers.

3 Description of Plan Assets and Reimbursement Conditions

100% of the Plan Asset is entrusted to LIC of India under their Company Gratuity Scheme. The reimbursement is subject to LIC''s Surrender Policy

The average duration of the benefit obligation at March 31, 2017 is 9.87 years (as at March 31, 2016: 16 years, as at April 1, 2015: 16 years)

The expected contributions to the defined benefit plan for the next annual reporting period as at March 31 2017 is Rs.1.64 crore (as at March 31 2016 is Rs.1.41 Crore; as at April 1, 2015 is Rs.0.74 Crore)

5. Letter of comfort, letter of awareness and letter of financial support

a. The Company has issued letter of comfort / letter of awareness to banks and a related party in respect of loans availed by a few of its subsidiaries aggregating to Rs.2,535 Crore as at March 31, 2017 (as at March 31, 2016 Rs.1,920.79 Crore, as at April 1, 2015 Rs.685.50 Crore)

b. Letter of financial support has been issued to ITNL Road Infrastructure Development Company Limited, West Gujarat Expressway Limited, Vansh Nimay Infraprojects Limited, ITNL International Pte. Ltd., Singapore, ITNL Offshore Pte. Ltd., Singapore, ITNL Africa Projects Ltd., Nigeria, ITNL International DMCC, Dubai, Sharjah General Services Company LLC, Dubai IIPL USA LLC, MP Border Checkposts Development Company Limited and Thiruvananthapuram Road Development Company Limited to enable them to continue their operations and meet their financial obligations as and when they fall due.

Notes

1. Under the pervious GAAP, investment property of '' 115.31 crore was included under non-current investments. Under Ind AS, investment property is presented separately on the face of the balance sheet.

2. Under the previous GAAP, premium paid of Rs.100 crore to acquire the right to purchase investments in Srinagar Sonmarg Tunnelway Limited (SSTL) a tunnel project, was presented as Right under Intangible assets and was amortized over 20 years. Under Ind AS, the premium paid is considered and disclosed as Investments.

3. Under the previous GAAP, long term investments were measured at cost less diminution in value which is other than temporary. On the date of transition to Ind AS, certain investments in subsidiaries and associate have been measured at fair value and considered as deemed cost, which is lower than the cost resulting in decrease in carrying amount. The consequential tax effect has also been recognized Additionally, there are changes in classification of certain investment in associate and joint venture based on definition of control and significant influence under Ind AS as below :

- Srinagar Sonamarg Tunnelway Limited is classified as a subsidiary, which was considered as an Associate under previous GAAP.

- Thiruvananthapuram Road Development Company Limited & Warora Chandrapur Ballarpur Toll Road Limited are classified as joint ventures, which were considered as Associates under previous GAAP.

- Noida Toll Bridge Company Limited is classified as an associate, which was considered as a joint venture under previous GAAP.

4. Under the previous GAAP, trade receivable, loans granted, advances recoverable and advance towards capital were disclosed at contractual value after considering impairment loss, if any. Under Ind AS, these are carried at cost less impairment, wherein the impairment is determined based on expected credit loss, capturing both cash loss as well as loss on account of time value of money, as per Ind AS 109, Financial Instruments. The consequential tax effect has also been recognized.

5. Under the previous GAAP, borrowing costs were amortized using straight line method and the unamortized borrowing costs were disclosed as other assets. Under the Ind AS, unamortized borrowing costs has been disclosed net of borrowings after calculating based on effective interest rate. The consequential tax effect has also been recognized.

6. Under the previous GAAP, restricted bank balances were disclosed under cash and cash equivalent. Under Ind AS, the same is disclosed as a separate line on the face of the balance sheet.

7. Under the previous GAAP, cumulative non-convertible compulsorily redeemable preference shares (CCRPS) were classified as part of total equity. Dividends paid on these preference shares and accrued premium on redemption were adjusted against retained earnings. However, under Ind AS, CCRPS are classified as a financial liability (borrowing). The resultant dividend, dividend tax and accrued redemption premium determined using effective interest rate have been recognized as finance costs in statement of profit and loss.

8. Under the pervious GAAP, provision for tax was included under provisions. Under Ind AS, provision for tax has been reclassified and disclosed as a separate line item on the face of the balance sheet.

9. Under the previous GAAP, dividend on equity shares has been accrued in the financial year when the board has adopted the financial statements as an adjusting subsequent events after financials are prepared. Under Ind AS, these are accounted in the financial year when they are approved by the shareholders.

10. Under the previous GAAP, MAT credit entitlement is shown under loans and advances. Under Ind AS, the same is shown as net of deferred tax assets.

Notes:

a. Under the previous GAAP, cumulative non-convertible compulsorily redeemable preference shares (CCRPS) were classified as part of total equity. Dividends paid on these preference shares and accrued premium on redemption were adjusted against retained earnings. However, under Ind AS, CCRPS are classified as a financial liability (borrowing). The resultant dividend, dividend tax and accrued redemption premium determined using effective interest rate have been recognized as finance costs in statement of profit and loss.

b. The Company has measured its revenue at fair value of consideration receivable and discounted all future receipts where it is likely to be received beyond one year.

c. The Company has recorded expected credit losses (“ECL") arising out of time value of money on financial assets i.e. trade receivables, loans granted, advances recoverable and advance towards capital. As a result, ECL on the date of transition has been recognized in the opening reserves and changes thereafter have been recognized in the statement of profit and loss.

d. The Company has chosen to measure certain investments in subsidiaries and associate at fair value on the transition date and considered the same as deemed cost on the said date.

e. Others represents finance charges (EIR), reversal of amortization of intangible assets and unrealized gains and losses on investments (other than investment in group companies) classified at fair value through profit and loss (FVTPL).

f. The Company has computed deferred taxes on Ind AS adjustments, wherever applicable.

Notes :

A. Revenue from operations:

The Company has measured its revenue at fair value of consideration receivable and discounted all future receipts where it is likely to be received beyond one year. Accordingly revenue is reduced by Rs.216.11 Crore.

B. Other Income:

Changes in Other Income of Rs.5.60 crore represents impact of changes in the fair value of investments classified at fair value through profit and loss (FVTPL)

C. Finance Cost

I. As required under Ind AS, dividend on preference share capital of Rs.99.92 crore (including dividend distribution tax thereon and accrued redemption premium) has been considered as finance cost.

II. Under Ind AS, company has shown borrowing at amortized cost hence interest is calculated as per Effective interest rate (EIR) method accordingly there is an additional charge of Rs.9.67 crore reflected in finance cost

D. Depreciation and Amortization:

Under the previous GAAP, premium paid of Rs.100 crore to acquire the right to purchase investments in Srinagar Sonmarg Tunnelway Limited (SSTL) a tunnel project, was presented as Right under Intangible assets and was amortised over 20 years. Under Ind AS, the premium paid is considered and disclosed as Investments without amortization. Accordingly there is reversal of amortization of Rs.4.99 crore.

E. Other expenses:

Changes in Other expenses represent incremental impairment charge computed based on the expected credit losses on financial assets measured at amortized cost, as required under Ind AS.

F. Deferred tax:

The Company has computed deferred taxes on Ind AS adjustments, wherever applicable

6. Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Indian Accounting Standard 108 on Operating Segment are not applicable.

7. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on May 29, 2017

8 . Subsequent Events :

Subsequent Events : After the balance sheet date, the Company has received approvals from Concession granting authorities for transfer of its equity investments in 4 subsidiaries to IL&FS Transportation Investment Trust.

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Mar 31, 2016

Background :

IL&FS Transportation Networks Limited ("ITNL") is a surface transportation infrastructure company incorporated in the year 2000 under the provisions of the Companies Act, 1956, by Infrastructure Leasing & Financial Services Limited, a promoter company, in order to consolidate their existing road infrastructure projects and to pursue various new project initiatives in the area of surface transportation infrastructure

ITNL is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualisation through commissioningto operations and maintenance under public to private partnership on build-operate transfer ("BOT") basis in India

1. Letter of comfort, letter of awareness and letter of financial support

a. The Company has issued letter of comfort / letter of awareness to banks and a related party in respect of loans availed by a few of its subsidiaries aggregating to Rs. 1,920.79 Crore as on March 31, 2016 (as on March 31, 2015Rs. 685.50 Crore)

b. Letter of financial support has been issued to ITNL Road Infrastructure Development Company Limited, West Gujarat Expressway Limited, Vansh Nimay Infraprojects Limited, ITNL International Pte. Ltd., Singapore, ITNL Offshore Pte. Ltd., Singapore, ITNL Africa Projects Ltd., Nigeria, ITNL International DMCC, Dubai, Sharjah General Services Company LLC, Dubai, MP Border Checkposts Development Company Limited and Thiruvanthapuram Road Development Company Limited to enable them to continue their operations and meet their financial obligations as and when they fall due

2A.Provision for doubtful loans and receivables

Provision for doubtful loans and receivables for current year represents provisions made for doubtful loans of Rs. 47.90 crore (Previous yearRs. Nil) and doubtful receivables ofRs. 67.16 crore (Previous yearRs. Nil).

3. Jointly Controlled Entities

The Company has the following Jointly Controlled Entities as on March 31, 2016 and its proportionate share in the assets, liabilities, income and expenditure of the Jointly Controlled Entities on the basis of the financial statements as at / for the year ended of those entities is given below:

4A. Foreign currency Exposures

The period end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

5. Lease

The Company holds certain properties under a non-cancellable operating lease. The Company''s future lease rentals under the operating lease arrangements as at the year ends are as under:

6. Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Accounting Standard (AS) 17 on ''Segment Reporting'' are not applicable

7. Figures for the previous year have been regrouped and reclassified wherever considered necessary to conform to the classification for the current year

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Mar 31, 2015

1. Share capital

Rights of CNCRPS holders are as Follows:

The holder(s) of CNCRPS shall have no voting rights other than in respect of matters directly affecting the rights attached to the CNCRPS. In the event of any due and payable dividends on the CNCRPS remaining unpaid for a period of two years prior to the start of any General Meeting of the Equity Shareholders, the holder(s) of CNCRPS shall gain voting rights in respect of all matters placed by the Company at a General Meeting of its Equity Shareholders in accordance with the provisions of the Companies Act and the Articles of Association of the Company. In the event of winding up or repayment of capital, the holder(s) of the CNCRPS shall carry a preferential right vis-a-vis equity shareholders to be repaid the amount of paid up capital, unpaid dividends and fixed premium, in accordance with the provisions of the Companies Act and the Articles of Association of the Company. The claims of holder(s) of CNCRPS shall be subordinated to the claims of all secured and unsecured creditors of the Company but senior to equity shareholders and pari passu amongst other preference shareholders

2. Long-term Borrowings

# The Company has entered into cross currency interest rate swap on December 31,2014 for borrowing of Rs. 2,000 Million taken by the Company. The details of Swap are as under :

Swap Counter party Iiindusind Bank

Cross Currency interest rate SWAP 3 Month USD Libor 250 bps p.a. on US Rs. 31.72 Million against 10.80% p.a.on Rs. 2,000 Million

Interest payable Monthly

Maturity Date December 31, 2017

3. Trade Payables

Based on information received by the Company from its vendors, the amount of principal outstanding in respect of Micro and Small Enterprises as at Balance Sheet date covered under the Micro, Small and Medium Enterprises Development Act, 2006 is Rs. Nil. There were no delays in the payment of dues to Micro and Small Enterprises

4. Contingent Liabilities and Commitments

Rs. in Million

As at As at March March 31,2015 31,2014

(i) Contingent Liabilities (Refer footnote 1)

a) Claims against the Company not acknowledged as debts 81.20 538.90

Income tax demands contested by the Company

b) Guarantees (Refer footnote 2)

- Guarantees/counter guarantees issued to outsider in respect of group companies 16,880.72 21,531.58

- Guarantees/counter guarantees issued to outsider in respect of other than group 92.68 328.76 companies

c) During the year ended March 31,2015, the Company had assigned loans aggregating to Rs. Nil (March 31,2014 Rs. 4,507 Million ) at its book value, out of which in the case of loans aggregating Rs. Nil (March 31, 2014 Rs. 2,950 Million), the lender has a put option on the Company on specified future dates till the maturity of the loans assigned and having a recourse to the Company in case of default by the borrower on the due dates.

d) Put option on sale of investment Unascertainable Not applicable (ii) Commitments

Investment Commitments [net of advances of Rs. 356.45 Million, (As at March 31, 2014 : Rs. 890.57 Million)] 9,189.68 12,972.30

Foot Note:

1 The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.

2 Certain bankers have issued guarantees which have been shown under "Guarantees/counter guarantees issued in respect of group companies" aggregating Rs. 2,011.09 Million (as at March 31,2014 : Rs. 3,684.68 Million) against a first charge on the receivables (including loans and advances) of the Company.

5. Letter of comfort, letter of awareness and letter of financial support

a. The Company has issued letter of comfort / letter of awareness in respect of loans availed by a few of its subsidiaries aggregating to Rs. 6,855 Million (Previous year Rs. 1,557 Million)

b. Letter of financial support has been issued to ITNL Road Infrastructure Development Company Limited, West Gujarat Expressway Limited, Vansh Nimay Infraprojects Limited, ITNL International Pte. Ltd. Singapore, ITNL Offshore Ptd. Ltd. Singapore, ITNL Africa Projects Ltd. Nigeria, ITNL International DMCC, Dubai and Sharjah General Services Company LLC, Dubai to enable them to continue their operations and meet their financial obligations as and when they fall due

6. Employee Benefit Obligations

(a) Defined-Contribution Plans

The Company offers its employees defined contribution plans in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the period into separate funds under certain statutory/fiduciary-type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, the contribution to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary

A sum of Rs. 27.90 Million (for the year ended March 31, 2014 : Rs. 22.59 Million) has been charged to the Statement of Profit and Loss in this respect

(b) Defined-Benefits Plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service rendered and the employee's eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year-end. Actuarial valuation is based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of Profit and Loss

7. Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Accounting Standard (AS) 17 on 'Segment Reporting' are not applicable

8. During the year ended March 31, 2014, the Company had changed the estimates used to compute current tax, based on the recent High Court judgement relating to disallowance of expenses under section 14A of Income Tax Act, 1961 and accordingly arrived at the current tax as applicable to the year ended March 31,2012 and for the year ended March 31,2013 on the aforesaid basis. Consequently, Rs. 231.17 Million pertaining to the year ended March 31,2012 and Rs. 248.00 Million pertaining to year ended March 31,2013 are reversed in the current year and shown in Statement of Profit and Loss account as "Tax relating to earlier year". Accordingly, the profit after tax for the previous year is higher by Rs. 479.17 Million

9. Revenue from Operations for the year ended March 31,2015 includes an amount of Rs. 2,352.70 Million on account of compensation claimed by ITNL from two Special Purpose Vehicles ("SPVs") for the incremental work and related claims arising from delays due to handing over of the land for project execution. The compensation is based on the provisions in the Service Concession Agreements and is supported by the Extension of Time granted by the Independent Engineers. The claims made by ITNL on the SPV's have been based on the legal opinions obtained by the SPV's, that such claims are contractually admissible under the Service Concession Agreements entered into with Concession Granting Authorities. Costs in connection with the foregoing have been considered in recognising the above income

10. Figures for the previous years have been regrouped and reclassified wherever considered necessary to conform to the classification for the current year

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Mar 31, 2014

Background

"I L&FS Transportation Networks Limited ("ITNL") is a surface transportation infrastructure company incorporated in the year 2000 under the provisions of the Companies Act, 1956, by Infrastructure Leasing & Financial Services Limited, a promoter company, in order to consolidate their existing road infrastructure projects and to pursue various new project initiatives in the area of surface transportation infrastructure. ITNL is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualisation through commissioning to operations and maintenance under public to private partnership on build-operate transfer ("BOT") basis in India"

NOTE 1 : TRADE PAYABLES

Based on information received by the Company from its vendors, the amount of principal outstanding in respect of Micro and Small Enterprises as at Balance Sheet date covered under the Micro, Small and Medium Enterprises Development Act, 2006 is Rs. Nil. There were no delays in the payment of dues to Micro and Small Enterprises

NOTE 2 : CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in million)

Particulars As at As at March21, 2014 March 31,2013

(i) Contingent Liabilities (Refer footnote 1)

(a) Claims against the Company not acknowledged as debts 538.90 70.10 Income tax demands contested by the Company

(b) Guarantees (Refer footnote 2)

- Guarantees/counter guarantees issued to outsider in respect of 21,531.58 17,819.21 group companies

- Guarantees/counter guarantees issued to outsider in respect of 328.76 240.68 other than group companies

(c) Letter of financial support has been issued to ITNL Road Infrastructure Development Company Limited and to West Gujarat Expressway Limited to enable them to continue their operations and meet their financial obligation as an when they fall due

(d) During the year, the Company has assigned loans aggregating to Rs. 4,507 million at its book value, out of which in the case of loans of Rs. 2,000 million, the lender has a put option on the Company on specified future dates till the maturity of the loans assigned and in the case of loans of Rs. 2,950 million the lenders are having a recourse to the Company in case of default by the borrower on the due dates

During the previous year, the Company had assigned loans aggregating to Rs. 3,000 million at its book value, out of which in the case of loans of Rs. 1,000 million, the lender has a put option on the Company on specified future dates till the maturity of the loans assigned and in the case of loans of Rs. 2,000 million the lenders are having a recourse to the Company in case of default by the borrower on the due dates (ii) Commitments

Investment Commitments [net of advances of Rs. 890.57 million, 26,388.20 19,506.91

(As at March 31, 2013:Rs. 1,695.14 million)]

Foot Note

1. The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof

2. Certain bankers have issued guarantees which have been shown under "Guarantees/counter guarantees issued in respect of other companies" aggregating Rs. 3,684.68 million (as at March 31, 2013 : Rs. 1,516.02 million) against a first charge on the receivables (including loans and advances) of the Company

NOTE 3 : DERIVATIVES AND FOREIGN CURRENCY EXPOSURES

(a) The Company as a part of its strategic initiatives to consolidate/restructure its investments in surface transport sector, has made direct investments in certain special purpose entities ("SPE"s) engaged in that sector and also invested in units of a scheme of ITNL Road Investment Trust (the "Scheme") which in turn has made investments in such SPEs. Amounts invested include derivative instruments in the form of call options

Premium received by the Company towards call option sold by it had been aggregated under the head "Option Premium Liabilities" classified as a part of "Other Long Term Liabilities" and "Other Current Liabilities". Options in respect of "Option Premium Liabilities" amounting Rs. Nil (As at March 31, 2013 : Rs. 39.22 million) were to be exercised after a period of 12 months from the year end

On March 27, 2014 this call option was excercised by the holder and therefore nil liability is shown as at March 31, 2014

2. Employee Benefit Obligations

(a) Defined-Contribution Plans

The Company offers its employees defined contribution plans in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the period into separate funds under certain statutory/fiduciary- type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, the contribution to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary

A sum ofRs. 28.91 Million (for the year ended March 31, 2013 : Rs. 25.51 Million) has been charged to the Statement of Profit and Loss in this respect

(b) Defined-Benefits Plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service rendered and the employee''s eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year-end. Actuarial valuation is based on "Projected Unit Credit" method. Cains and losses of changed actuarial assumptions are charged to the Statement of Profit and Loss

The estimates of future salary increases considered in the actuarial valuation take into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market

The amounts of the present value of the obligation, fair value of the plan assets, surplus or deficit in the plan, experience adjustments arising on plan liabilities and plan assets for the current period and previous four annual periods are given below:

NOTE 4 Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Accounting Standard (AS) 17 on ''Segment Reporting'' are not applicable

NOTE 5

During the year ended March 31, 2014, the Company has changed the estimates used to compute current tax, based on the recent High Courtjudgement relating to disallowance of expenses under section 14A of Income TaxAct, 1961 and accordingly arrived at the current tax as applicable to the year ended March 31, 2012 and for the year ended March 31, 2013 on the aforesaid basis. Consequently, Rs. 231.17 million pertaining to the year ended March 31, 2012 andRs. 248.00 million pertaining to year ended March 31, 2013 are reversed in the current year and shown in Statement of Profit and Loss account as "Tax relating to earlier year". Accordingly, the profit after tax for the current year is higher byRs. 479.17 million

NOTE 6

Figures for the previous years have been regrouped and reclassified wherever considered necessary to conform to the classification for the current year

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Mar 31, 2013

NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES

Background :

IL&FS Transportation Networks Limited ("ITNL") is a surface transportation infrastructure company incorporated in the year 2000 under the provisions of the Companies Act, 1956, by Infrastructure Leasing & Financial Services Limited, a promoter company, in order to consolidate their existing road infrastructure projects and to pursue various new project initiatives in the area of surface transportation infrastructure. ITNL is a developer, operator and facilitator of surface transportation infrastructure projects, taking projects from conceptualisation through commissioning to operations and maintenance under public to private partnership on build- operate transfer ("BOT") basis in India

NOTE 2: TRADE PAYABLES

Based on information received by the Company from its vendors, the amount of principal outstanding in respect of Micro and Small Enterprises as at Balance Sheet date covered under the Micro, Small and Medium Enterprises Development Act, 2006 is Rs. Nil. There were no delays in the payment of dues to Micro and Small Enterprises

NOTE 3: DERIVATIVES AND FOREIGN CURRENCY EXPOSURES

a The Company as a part of its strategic initiatives to consolidate/restructure its investments in surface transport sector, has made direct investments in certain special purpose entities ("SPE"s) engaged in that sector and also invested in units of a scheme of ITNL Road Investment Trust (the "Scheme") which in turn has made investments in such SPEs. Amounts invested include deriv- ative instruments in the form of call options

Premium received by the Company towards call option sold by it have been aggregated under the head "Option Premium Liabilities" classified as a part of "Other Long Term Liabilities" and "Other Current Liabilities". Options in respect of "Option Premium Liabilities" amounting Rs. 39.22 million (As at March 31, 2012 : Rs. 39.22 million) are to be exercised after a period of 12 months from the year end

The underlying instruments in respect of the options are unquoted and the Company expects that the options shall be excercised, as these transactions have been entered into for strategic reasons. No losses have been identified in respect of the above derivatives necessitating a charge to the Statement of Profit and Loss

b Foreign currency exposures:

The period end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

NOTE 4: JOINTLY CONTROLLED ENTITIES

The Company has the following Jointly Controlled Entities as on March 31, 2013 and its proportionate share in the assets, liabilities, income and expenditure of the Jointly Controlled Entities on the basis of the financial statements as at / for the year ended of those entities is given below:

NOTE 5: LEASE

The Company holds certain properties under a non-cancellable operating lease. The Company''s future lease rentals under the operating lease arrangements as at the period ends are as under:

NOTE 6

Segment Disclosures: The Company operates in a single business segment viz. Surface Transportation Business. Also it operates in a single geographic segment. In the absence of separate reportable business or geographic segments the disclosures required under the Accounting Standard (AS) 17 on ''Segment Reporting'' are not applicable

NOTE 7

Figures for the previous year have been regrouped and reclassified wherever considered necessary to conform to the classification for the current year

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Mar 31, 2012

* the number of shares held by IL&FS Employees welfare trust as at March 31, 2012 do not represent 5% or more of the total holding and hence, the disclosure of number of shares and percentage of total holding as at March 31, 2012 have not been given thereof

iii) Of the above 135,000,000 (As at March 31, 2011 : 135,000,000) shares are held by the holding company viz. infrastructure Leasing & Financial Services Limited ("IL&FS") and 2,440,534 (As at March 31, 2011 : Nil) shares are held by a fellow subsidiary viz. IL&FS Financial Services Limited

FOOT NOTE:

1) the Company has not recognized any deferred tax asset against provision created for diminution in value of investments in absence of virtual certainty of future taxable capital gains against which the deferred tax asset could be offset

2) Deferred tax charge (net) during the year includes deferred tax charge of Rs 14.12 million on account of deferred tax liability created during the year which has been directly adjusted against Foreign Currency translation reserve recognized in respect of the foreign exchange translation differences on the Company's receivables which are regarded as an extension to the Company's net investments in a foreign entity and have not been included above

FOOT NOTE

Other payables includes deferred premium on forward contract of Rs 31.53 million (As at March 31, 2011 : Rs Nil) and statutory dues payable of Rs 300.83 million (As at March 31, 2011 : Rs 196.87 million)

NOTE 1 : TRADE PAYABLES

According to the records available with the company, there were no dues to Micro and Small Enterprises as defined under the Micro, Small and Medium Enterprises Development Act 2006. Hence, no disclosures are to be given in respect thereof

Foot Notes

1 The Company has given non-disposal undertakings to the lenders and / or equity investors of certain infrastructure companies promoted by it with regard to its investments in the equity share capital of these companies as a part of promoter's undertaking to such lenders and / or equity investors. Also, the Company has given non-disposal undertakings to the grantors of the Concession to certain infrastructure companies promoted by the Company with regard to its investments in the equity share capital of these companies

2 The Company has pledged 171,959 (As at March 31, 2011-171,959) equity shares representing 51% of the overall shareholding in Elsamex S.A., in favor of certain lenders for a Term Loan facility availed by Elsamex S.A.

3 The Company has pledged 14,300,000 (As at March 31, 2011-9,000,000) shares of Vansh Nimay infraprojects Limited ("Borrower") with IL&FS Trust Company Limited ("Security Trustee") to secure the dues of the Borrower including without limitation all principal amounts, interest expenses, penalties, costs, fees, etc payable by the Borrower in relation to the facility extended by the Consortium of Financial institutions and Banks under the Pooled Municipal Debt Obligation Facility ("PMDO")

4 The Company's investment in "Covered Warrants" aggregating to Rs 1,693.00 million (As at March 31, 2011 Rs 648.00 million) issued by infrastructure Leasing & Financial Services Limited ("IL&FS") are variable interest debt instruments under which the holder is entitled to a proportionate share of the dividend, if any, declared by Road infrastructure Development Company of Rajasthan Limited ("RIDCOR"), Jharkhand Accelerated Road Development Company Limited ("JARDCL"), Chhatisgarh Highways Development Company Limited ("CHDCL") and Jharkhand Road Projects implementation Company Limited ("JRPICL") on the equity shares held by IL&FS as well as the interest granted by RIDCOR on the Fully Convertible Debentures ("FCDs") held by IL&FS. However, the Company is not entitled to rights and privileges, which IL&FS enjoys as a shareholder / debenture holder. The instruments are unsecured

5 The Company's investment in redeemable / optionally convertible cumulative preference shares of West Gujarat Expressway Limited ("WGEL") are convertible, at the option of the Company, into 1 equity share and carry a coupon of 2% per annum, accrued annually in arrears ("Coupon"). An additional coupon consisting of 95% of the balance distributable profits, that may be available with WGEL after it has met all other obligations, would accrue on the said preference shares ("Additional Coupon")

6 The Company's investments in compulsorily convertible preference shares of Rapid Metrorail Gurgaon Limited are fully and compulsorily convertible into equity shares within 90 days from achieving the commercial operation date of the project

Foot Note

As required under the restructuring package of Gujarat Road and infrastructure company Limited ("GRICL"), approved by the corporate Debt Restructuring cell on June 17, 2004, the company as one of the promoters of GRICL advanced Rs 600.00 million towards Preference Share capital. Out of the above advance, Rs 150.00 million was to be applied against issue of 1% Non cumulative convertible Preference Shares and Rs 450.00 million against issue of 8% Redeemable convertible Preference Shares. GRICL proposes to convert this advance into subordinated debt. Pending completion of the process for the conversion, the company has classified the amount as "Advance towards Share Application Money"

NOTE 2 : CONTINGENT LIABILITIES AND COMMITMENTS

Rs.in million

As at As at

Particulars March 31, 2012 March 31, 2011

(i) Contingent Liabilities (refer foot note 1)

a) Claims against the Company not acknowledged as debts income tax 12.92 25.71 demands contested by the Company

b) Guarantees

Guarantees/counter guarantees issued in respect of borrowing facilities 12,321.95 4,888.63 of subsidiary companies (refer foot note no.2)

(ii) Commitments

a) Estimated amount of contracts remaining to be executed on capital - 2.13 account and not provided for (net of advances)

b) Exercise price payable in respect of call option contracts - 1.25 (refer note no. 22)

c) investment Commitments [net of advances of Rs 2,173.08 million, 11,757.95 6,963.12 (As at March 31, 2011 : Rs.2,321.96 million)]

Foot Note

1) The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof

2) Certain bankers have issued guarantees which have been shown under "Guarantees/counter guarantees issued in respect of borrowing facilities of subsidiary companies" aggregating Rs 1,480.05 million (as at March 31, 2011 : Rs 812.94 million) against a first charge on the receivables (including loans and advances) of the company

NOTE 3 : DERIVATIVES AND Foreign CURRENCY EXPOSURES

a) the Company as a part of its strategic initiatives to consolidate/restructure its investments in surface transport sector, has made direct investments in certain special purpose entities ("SPE"s) engaged in that sector and also invested in units of a scheme of ITNL Road investment Trust (the "Scheme") which in turn has made investments in such SPEs. Amounts invested include derivative instruments in the form of call options

Premium received by the company towards call option sold by it have been aggregated under the head "Option Premium Liabilities" classified as a part of "Other Long term Liabilities". conversely, premiums paid by the company towards call options purchased by it have been aggregated under the head "Option Premium" and classified as a part of "Short-term Loans and Advances". Options in respect of "Option Premium Liabilities" amounting Rs 39.22 million (As at March 31, 2011 : Rs 39.22 million) are to be exercised after a period of 12 months from the period end the underlying instruments in respect of the options are unquoted and the company intends to exercise the option, as these transactions have been entered into for strategic reasons. No losses have been identified in respect of the above derivatives necessitating a charge to the Statement of Profit and Loss. the aggregate exercise price payable is included as part of the company's commitments (Refer note no. 20)

Foot Note

1) Employee cost is net of salaries of Rs 16.73 million (previous year : Rs 20.40 million), and contribution to provident and other funds of Rs 1.50 million (previous year : Rs 1.15 million) towards amounts recovered / recoverable in respect of staff on deputation with other entities

2 Employee Benefit obligations

(a) Defined-Contribution Plans

The Company offers its employees defined contribution plans in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the period into separate funds under certain statutory/fiduciary-type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, the contribution to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary

A sum of Rs 23.84 million (previous year Rs 19.87 million) has been charged to the Statement of Profit and Loss in this respect

(b) Defined-Benefits Plans

The Company offers its employees defined-benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service rendered and the employee's eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. in the case of the gratuity scheme, the Company contributes funds to the Life insurance Corporation of india which administers the scheme on behalf of the Company. Commitments are actuarially determined at year-end. Actuarial valuation is based on "Projected Unit Credit" method. Gains and losses of changed actuarial assumptions are charged to the Statement of Profit and Loss

NOTE 4 :

consequent to the NOTIFICATION NO. S.O. 447(E), dated 28-2-2011 [AS AMENDED BYNOTIFICATION NO. F.NO. 2/6/2008-cL-V, DATED 30-3-2011 ] the above financial statements have been presented in accordance with the Revised Schedule Vi. As required under the said notification corresponding figures for the previous year have been reclassified and presented in accordance with the current year presentation

---

Mar 31, 2011

1. Public Issue of equity shares

During the financial year ended March 31, 2010, the Company had issued 22,852,938 equity shares having a face value of Rs. 10 per share at a price of Rs. 258 per share (including share premium of Rs. 248 per share) though an initial public offering ("IPO”)

Out of the proceeds aggregating Rs. 5,896.06 Million, a sum of Rs. 228.53 Million was credited to Share Capital and the balance amount of Rs. 5,667.53 Million was credited to Securities Premium Account. Share issue expenses aggregating Rs. 290.48 Million (excluding Rs. 48.66 Million incurred on behalf of a shareholder whose holdings were divested at the time of the IPO and which sum has been recovered from the shareholder) have been charged to the Securities Premium Account in accordance with the provisions of section 78(2) of the Companies Act, 1956

a. Hazaribagh Ranchi Expressway Limited – Contribution to Equity Share Capital of Rs. 1,269.03 Million (Previous year Rs. 969.40 Million) against which advances paid aggregate Rs. 724.50 Million (Previous year Rs. 654.50 Million)

b. NAM Expressway Limited – Contribution to Equity Share Capital of Rs. 832.20 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. Nil (Previous year Rs. Nil).

c. Jharkhand Road Projects Implementation Company Limited – Contribution to the Equity Share Capital of Rs. 18.35 Million (Previous year Rs. 150.85 Million) against which advances paid aggregate Rs. Nil (Previous year Rs. 62.50 Million)

d. Pune Sholapur Road Development Company Limited – Contribution to the Equity Share Capital of Rs. Nil (Previous year Rs. 1,599.50 Million) against which advances paid aggregate Rs. Nil (Previous year Rs. 1,599.50 Million)

e. Vansh Nimay Infraprojects Limited – Acquisition of additional Nil (previous year 10%) stake from existing shareholder at the price of Rs. Nil (previous year Rs. 12/–) per share aggregating to Rs. Nil (previous year Rs. 12 Million) against which advances paid aggregate Rs. Nil (previous year Rs. Nil)

Contribution to the Equity Share Capital of Rs. 75 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. 53 Million (previous year Rs. Nil)

f. Moradabad Bareilly Expressway Limited – Contribution to the Equity Share Capital of Rs. Nil (previous year Rs. 2,216.10 Million) against which advances paid aggregate Rs. Nil (previous year Rs. 2,216.10 Million)

g. Subscription to Covered Warrants to be issued by Infrastructure Leasing & Financial Services Limited equivalent to its investment at Nil (previous year 7,400,000) equity shares each held in Chhattisgarh Highway Development Company Limited and Jharkhand Accelerated Road Development Company Limited

h. Warora Chandrapur Ballarpur Toll Road Limited– Contribution to the Equity Share Capital of Rs. 619.83 Million (previous year Rs. Nil) against which advances paid aggregate Rs. 616.91 Million (previous year Rs. Nil)

i. Global Parking Plaza Limited– Contribution to the Equity Share Capital of Rs. 30 Million (previous year Rs. Nil) against which advances paid aggregate Rs. Nil (previous year Rs. Nil)

j. The Company to participate / acquire an equity stake to the extent of Rs. 70 Million (previous year Rs. Nil) in the Project Company to be incorporated by a consortium for undertaking the development of a fully automatic car and two wheeler parking complex

k. The Company has invested Rs. 0.27 Million in the equity and Rs. 287.00 Million in Compulsory Convertible Preference of Rapid Metrorail Gurgaon Limited ("RMGL”). In addition, the Company has along with ITNL Enso Rail Systems Limited agreed with the senior lenders of RMGL to make good shortfall arising out of the cash losses of RMGL during the moratorium period and arrange for cost overruns, if any

l. Chenani Nashri Tunnelway Limited – Contribution to the Equity Share Capital of Rs. 4,084.10 Million (previous year Rs. Nil) against which advances paid aggregate Rs. 244.10 Million (previous year Rs. Nil)

m. Jorabat Shillong Expressway Limited – Contribution to the Equity Share Capital of Rs. 460 Million (previous year Rs. Nil) against which advances paid aggregate Rs. 0.05 Million (previous year Rs. Nil)

n. Regional Airport Holdings International Limited – Contribution to the Equity Share Capital of Rs. 200 Million (previous year Rs. Nil) against which advances paid aggregate Rs. 80 Million (previous year Rs. Nil)

o. MP Border Checkpost Development Company Limited – Contribution to the Equity Share Capital of Rs. 1,019.75 Million (previous year Rs. Nil) against which advances paid aggregate Rs. 213.60 Million (previous year Rs. Nil)

p. Subscription to 11.5% Non Convertible Debentures (NCDs) of Rs. 520 Million of Road Infrastructure Development Company of Rajasthan Limited (RIDCOR) for a period of 5 years against which advances paid aggregate Rs. 320 Million (previous year Rs. Nil)

q. Subscription to Covered Warrants to be issued by Infrastructure Leasing & Financial Services Limited equivalent to its investment at 17,020,000 ( previous year Nil) equity shares each held in Jharkhand Road Projects Implementation Company limited

r. Hyderabad Expressway Limited – Contribution to the Equity Share capital of Rs. 69.80 Million (previous year Rs. 69.80 Million) against which advances paid aggregate Rs. 69.80 Million (previous year Rs. 69.80 Million)

3. Contingent liabilities

Rs. in Million

As at As at

Particulars March 31, March 31,

2011 2010

Income tax demand contested by the Company 25.71 27.53

Counter guarantee issued to holding company for guarantees furnished by it to – 1,457.08

the lenders of subsidiaries (Deposit received Rs. Nil, Previous Year Rs. 750 Million) Guarantees/counter guarantees issued in respect of borrowing facilities of a 4,075.69 3,508.01 foreign subsidiary company

Letter of financial support issued to Chhattisgarh Highway Development Company Limited to enable it to continue its operations and meet its financial obligation as an when they fall due, during the period October 1, 2009 to March 31, 2011

The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof

Certain bankers have issued guarantees aggregating Rs. 812.94 Million as at March 31, 2011 (Rs. 455.79 Million as at March 31, 2010) against a first charge on the receivables (including loan and advance) of the company

4. Joint ventures

a. The Company has the following Joint Ventures as on March 31, 2011 and its proportionate share in the assets, liabilities, income and expenditure of the joint venture entities on the basis of the financial statements as at / for the year ended of those entities is given below:

b. During the current year the Company entered into two new joint ventures viz Jorabat Shillong Expressway Limited and N.A.M Expressway Limited with equity participation to the extent of 50.00% and 50.00 % respectively

6. Intangible assets and amortisation

During the year 2006–07, the Company incurred a cost of Rs.60.00 Million for acquiring commercial rights under the "Operations and Maintenance” agreement ("O&M contract”) for one of the road projects from the erstwhile contractor. Under the terms of the O&M contract, the Company is entitled to routine maintenance price and the operation price for maintaining and operating the project. The Company expects benefits under the O&M contract to accrue until the end of the concession period which is not expected to be earlier than May,12th 2029. Accordingly, the expenditure incurred by the Company for acquisition of the rights is treated as an intangible asset and is being amortised on a straight line basis over the minimum balance period of the concession i.e. 22 years and 7 months (from the date of acquisition of the said commercial rights)

8. The Company has pledged 171,959 equity shares representing 51% of the overall shareholding in Elsamex S.A., in favour of certain lenders for a Term Loan facility availed by Elsamex S.A

9. The Company has deposited 8,000,000 shares of Vansh Nimay Infrastructure Limited ("Borrower”) with IL&FS Trust Company Limited ("Security Trustee”) to secure the dues of the Borrower including without limitation all principal amounts, interest expenses, penalties, costs, fees, etc payable by the borrower in relation to the facility extended by the Consortium of Financial Institutions and Banks under the Pooled Municipal Debt Obligation Facility ("PMDO”)

10. The Companys investment in "Covered Warrants” aggregating to Rs. 648 Million (previous year Rs. 500 Million) issued by Infrastructure Leasing & Financial Services ("IL&FS”) are variable interest debt instruments under which the holder is entitled to a proportionate share of the dividend, if any, declared by Road Infrastructure Development Company of Rajasthan Limited ("RIDCOR”), Jharkhand Accelerated Road Development Company Limited ("JARDCL”) and Chhatisgarh Highways Development Company Limited ("CHDCL”) on the equity shares. The details are as under:

However, the Company is not entitled to rights and privileges, which IL&FS enjoys as a shareholder. The instruments are unsecured. The Companys investment in the said "Covered Warrants” is included in the schedule of Investments

11 . The Companys investment in redeemable optionally convertible cumulative preference shares of West Gujarat Expressway Limited ("WGEL”) are convertible, at the option of the investor, into 1 equity share and carry a coupon of 2% per annum, accrued annually in arrears ("Coupon”). An additional coupon consisting of 95% of the balance distributable profits, that may be available with WGEL after it has met all other obligations, would accrue on the said preference shares ("Additional Coupon”)

The Coupon and the Additional Coupon are payable annually only if WGEL has surplus cash after servicing its lenders and meeting plough back requirements towards capital expenditure as may be decided by its board of directors The unpaid Coupon would annually be cumulated. The unpaid additional coupon would be accumulated in a year in which there are distributable profits, which are not distributed. The unpaid coupon and unpaid additional coupon carry a special coupon at 10% per annum compounded with annual rests and shall accrue as special coupon to the Investor in addition to the Coupon and Additional Coupon ("Special Coupon”)

12. The Companys investments in compulsorily convertible preference shares of Rapid Metrorail Gurgaon Limited are fully and compulsorily convertible into equity shares within 90 days from achieving the commercial operation date of the project

14. Derivatives and foreign currency exposures

a. The Company as a part of its strategic initiatives to consolidate/restructure its investments in surface transport sector, has made direct investments in certain special purpose entities ("SPE”s) engaged in that sector and also invested in units of a scheme of ITNL Road Investment Trust (the "Scheme”) which in turn has made investments in such SPEs. Amounts invested include derivative instruments in the form of call options

Premium received by the Company towards call option sold by it have been aggregated under the head "Option Premium Liabilities” classified as a part of "Current Liabilities”. Conversely, premiums paid by the Company towards call options purchased by it have been aggregated under the head "Option Premium Assets” and classified as a part of "Other Current Assets”. During the year, the Company exercised its rights under the call option in respect of equity share in an SPE, at an exercise price of Rs. Nil (in redeemable optionally convertible preference shares in an SPE, at an exercise price of Rs. 10.20 Million (see note no.7.d)). A party having call option sold by the Company has exercise its rights under the call option in respect of equity share in an SPE at an exercise price of Rs. 2.97 Million. Options in respect of "Option Premium Liabilities” amounting Rs. 39.22 Million and options in respect of "Option Premium Assets” amounting Rs. 1.25 Million (previous year Rs. 1.25 Million) are to be exercised after a period of 12 months from the period end

The underlying instruments in respect of the options are unquoted and the Company intends to exercise the option, as these transactions have been entered into for strategic reasons. No losses have been identified in respect of the above derivatives necessitating a charge to the Profit and Loss Account. The aggregate exercise price payable is included as part of the Companys capital commitments (Refer note no. 2)

15. As required under the restructuring package of Gujarat Road and Infrastructure Company Limited (GRICL), approved by the Corporate Debt Restructuring Cell on 17th June 2004, the Company as one of the promoters of GRICL advanced Rs. 600.00 Million towards Preference Share Capital. Out of the above advance, Rs. 150.00 Million was to be applied against issue of 1% Non Cumulative Convertible Preference Shares and Rs. 450.00 Million against issue of 8% Redeemable Convertible Preference Shares. GRICL proposes to convert this advance into subordinated debt. Pending completion of the process for the conversion, the Company has classified the amount as "Advance towards Share Application Money”

16. According to the records available with the Company, there were no dues to Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act 2006. Hence disclosures, if any, relating to amounts unpaid as at the period end together with the interest paid / payable as required under the said Act have not been given

18. Employee benefit obligations

Defined–Contribution Plans

The Company offers its employees defined contribution plans in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the year into separate funds under certain statutory/fiduciary– type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, the contribution to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employees salary

A sum of Rs. 19.87 Million (Previous year: Rs. 12.97 Million) has been charged to the Profit and Loss account in this respect

Defined–Benefits Plans

The Company offers its employees defined–benefit plans in the form of a gratuity scheme (a lump sum amount). Benefits under the defined benefit plans are typically based on years of service rendered and the employees eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year–end. Actuarial valuation is based on "Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Profit and Loss Account

Of the above, Rs. nil (Previous Year Rs. 2.62 Million) has been recovered from other entities. The managerial remuneration for the period does not include contribution to the gratuity fund as these amounts are actuarially determined for the Company as a whole and separate figure relating to the managerial personnel are not available

Computation of net profit in accordance with Section 349 of the Companies Act, 1956 in respect of remuneration payable to managerial personnel

The lease terms do not contain any exceptional / restrictive covenants nor are there any options given to Company to renew the lease or purchase the properties. The agreements provide for changes in the rentals if the taxes leviable on such rentals change

25. During the year, the advance towards capital amounting to Rs. Nil (previous year Rs. 450 Million) and Interest free deposit of Rs. 75 Million (previous year nil) received from North Karnataka Expressway Limited ("NKEL”) was converted into a short term loan. As this conversion did not involve any cash or cash equivalents, it has not been reflected in the Cash Flow Statement.

26. The sum of Rs. 236.18 Million payable to vendors of certain fixed assets as at March 31, 2009, was excluded from the Cash Flow Statement for the year ended March 31, 2009. This sum has been paid during the year 2009–10 and has been included as a part of "Cash Flows from Investing Activities” in the Cash Flow Statement for that year

28. Related Party Disclosures

Current Year

a. Name of the Related Parties and Description of Relationship

Nature of Name of the Entity Acronym Relation -ship used

Holding Company Infrastructure Leasing & Financial Services Limited ILFS

Subsidia -ries ITNL Road Infrastructure Development Company Limited IRIDCL

Gujarat Road and Infrastructure Company Limited GRICL

East Hyderabad Expressway Limited EHEL

ITNL International Pte Limited, Singapore IIPL

Elsamex SA, ELSA

Vansh Nimay Infraprojects Limited VNIL

Hazaribagh Ranchi Expressway Limited HREL

Pune Sholapur Road Development Company Limited PSRDCL

West Gujarat Expressway Limited WGEL

ITNL Enso Rail Systems Limited IERSL

Moradabad Bareilly Expressway Limited MBEL

Jharkhand Road Projects Implementation Company Limited JRPICL

Chenani Nashri Tunnelway Limited CNTL

MP Border Checkposts Development Company Limited MPCDCL

Badarpur Tollway Operations Management Limited BTOML

Subsidiaries – North Karnataka Expressway Limited NKEL

Indirect Elsamex Internacional, SL

Grusamar Ingenieria Y Consulting, SL

Sánchez Marcos Señalización e Imagen, S.A

Proyectos De Gestion Sistemas Calculo Y Analisis S.A

Elsamex India Private Limited EIPL

CIESM–INTEVIA S.A. Sociedad Unipersonal (formerly known as Centro De Investigacion Elpidio Sanchez Marcos S.A.)

Control 7, S. A

Geotecnia 7, S.A

Mantenimiento Y Conservacion De Vialidades, DE C.V

ESM Mantenimiento Integral DE S.A DE C.V

Elsamex Portugal S.A

Intevial–Gestao Integral Rodoviaria S.A

Grusamar Albania SHPK

Antenea Seguridad Y Medico Ambiente SA

Proyectos Y Promociones Inmobiliarias Sanchez Marcos SL

Senalizacion Viales E Imagen, SA

Yala Construction Company Private Limited YCCPL

Rapid Metro Rail Gurgaon Limited RMGL

Inversiones Tyndrum SA (upto September 16, 2010. Its now merged with Elsamex SA)

Area De Servicio Coiros S.L. (from May 31, 2010) Conservacion de Infraestructuras De Mexico SD DE CV (from September 1, 2010)

Alcantarilla Fotovoltaica SA, Sociedad Unipersonal (from December 17, 2010)

Area De Serviceo Punta Umbria SL. Sociedad Unipersonal (from December 17, 2010)

Fellow Subsidiaries IL&FS Financial Services Limited (Erst while IL&FS Finvest Ltd.) IFIN

IL&FS Education & Technology Services Limited IETS

IL&FS Energy Development Co Ltd (from December 3, 2010) IEDCL

IL&FS Environmental Infrastructure & Service Limited IEISL (formerly IL&FS Waste Management & Urban Services Limited)

IL&FS Infrastructure Development Corporation Limited IIDCL

IL&FS Maritime Infrastructure Company Limited IMICL

IL&FS Renewable Energy Limited IREL

Chattisgarh Highways Development Co Limited CHDCL

IL&FS Securities Services Limited ISSL

IL&FS Trust Company Limited ITCL

Jharkhand Accelerated Road Development Co Ltd JARDCL

IL&FS Cluster Development Initiative Limited ICDIL

IL&FS Global Financial Services (UK) Limited IGFSL(UK)

IL&FS Urban Infrastructure Managers Limited IUIML

IL&FS Urban Infrastructure Services Ltd (upto March 29, 2011) IUISL

Associates Andhra Pradesh Expressway Limited APEL

ITNL Toll Management Services Limited ITMSL

Thiruvananthpuram Road Development Company Limited TRDCL

Warora Chandrapur Ballarpur Toll Road Limited WCBTL

Co – Venture Noida Toll Bridge Company Limited NTBCL

Jorabat Shillong Expressway Limited JSEL

N.A.M. Expressway Limited NAMEL

Other Enterprises ITNL Road Investment Trust (IRIT) IRIT over which ITNL has Control

Key Management Mr. K Ramchand–Managing Director personnel Mr. Mukund Sapre–Executive Director

31. Figures for the previous year have been regrouped / reclassified, wherever necessary, to conform to the classification of the current year

---

Mar 31, 2010

1. Public issue of equity shares

During the year, the Company issued 22,852,938 equity shares having a face value of Rs. 10 per share at a price of Rs. 258 per share (including share premium of Rs. 248 per share) though an initial public offering (“IPO”) Out of the proceeds aggregating Rs. 5,896.06 Million, a sum of Rs. 228.53 Million was credited to Share Capital and the balance amount of Rs. 5,667.53 Million was credited to Securities Premium Account. Share issue expenses aggregating Rs. 290.48 Million (excluding Rs. 48.66 Million incurred on behalf of a shareholder whose holdings were divested at the time of the IPO and which sum is recoverable from the shareholder) have been charged to the Securities Premium Account in accordance with the provisions of section 78(2) of the Companies Act, 1956

Out of the share issue expenses, a sum of Rs. 201.14 Million payable to vendors as at March 31, 2010, towards share issue expenses has been offset against the total share issue expenses (as there was no outfow of cash or cash equivalents during the year) and the net sum of Rs. 138.00 Million, classifed under the head “Cash Flows from Financing Activities” in the Cash Flow Statement for the year ended March 31, 2010

2. capital commitments:

a) Hazaribagh Ranchi Expressway Limited – Contribution to Equity Share Capital of Rs. 969.40 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. 654.50 Million (Previous year Rs. Nil)

b) Narketpalli Addanki Expressway Limited – Contribution to Equity Share Capital of Rs. 1,199.75 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. Nil (Previous year Rs. Nil)

c) Jharkhand Road Projects Implementation Company Limited – Contribution to the Equity Share Capital of Rs. 150.85 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. 62.50 Million (Previous year Rs. Nil)

d) Pune Sholapur Road Development Company Limited – Contribution to the Equity Share Capital of Rs. 1,599.50 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. 1,599.50 Million (Previous year Rs. Nil)

e) Vansh Nimay Infraprojects Limited – Acquisition of additional 10% stake from existing shareholder at the price of Rs. 12/- per share aggregating to Rs. 12 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. Nil (Previous year Rs. Nil)

f) Moradabad Bareilly Expressway Limited – Contribution to the Equity Share Capital of Rs. 2,216.10 Million (Previous year Rs. Nil) against which advances paid aggregate Rs. 2,216.10 Million (Previous year Rs. Nil)

g) Subscription to Covered Warrants to be issued by Infrastructure Leasing & Financial Services Limited equivalent to its investment at 7,400,000 equity shares each held in Chhattisgarh Highways Development Company Limited and Jharkhand Accelerated Road Development Company Limited

h) The Company has entered into arrangements to make the following investments, which are subject to fulflment of certain precedent conditions:

i) Sociedad Operadora del Tren Rapido Interrubano de Guanajuato “SOTRIG” – Nil (Previous Year USD 60.00 Million)

ii) Manila North Tollways Corporation Ltd. – Nil ( Previous Year 67.10% of the equity stake, amount not quantifed)

3. Contingent liabilities

Rupees in Million

Particulars As at As at March 31, 2010 March 31, 2009

Income tax demand contested by the Company 27.53 7.84

Performance guarantees issued on behalf of Company by banks 3,743.99 623.79

Counter guarantee issued to holding company for guarantees 1,457.08 2,102.62 furnished by it to the lenders of subsidiaries (Deposit received Rs. 750 Million)

Guarantees/counter guarantees issued in respect of borrowing 4,113.61 603.02 facilities of a foreign subsidiary company

Letter of fnancial support issued to Chhattisgarh Highway Development Company Limited to enable it to continue its operations and meet its fnancial obligation as an when they fall due, during the period October 1, 2009 to March 31, 2011.

The Company does not expect any outfow of economic resources in respect of the above and therefore no provision is made in respect thereof

4. Intangible assets and amortisation

During the year 2006-07, the Company incurred a cost of Rs. 60.00 Million for acquiring commercial rights under the “Operations and Maintenance” agreement (“O&M contract”) for one of the road projects from the erstwhile contractor. Under the terms of the O&M contract, the Company is entitled to routine maintenance price and the operation price for maintaining and operating the project. The Company expects benefts under the O&M contract to accrue until the end of the concession period which is not expected to be earlier than 12th May, 2029. Accordingly, the expenditure incurred by the Company for acquisition of the rights is treated as an intangible asset and is being amortised on a straight line basis over the minimum balance period of the concession i.e. 22 years and 7 months (from the date of acquisition of the said commercial rights)

5. The Company has pledged 171,959 equity shares representing 51% of the overall shareholding in Elsamex S.A., in favour of certain lenders for a Term Loan facility availed by Elsamex S.A.

6. The Company’s investment in “Covered Warrants” aggregating to Rs. 500 Million (previous year Rs. 500 Million) issued by Infrastructure Leasing & Financial Services (“IL&FS”) are variable interest debt instruments under which the holder is entitled to a proportionate share of the dividend, if any, declared by Road Infrastructure Development Company of Rajasthan Limited (“RIDCOR”) on 50 Million (previous year Rs. 50 Million) equity shares of Rs. 10 each held by IL&FS and on any further rights, entitlements and bonus declarations in respect thereof. However, the Company is not entitled to rights and privileges, which IL&FS enjoys as a shareholder. The instrument is unsecured and the principal amount is redeemable at par not later than a period of 35 years from the date of issue (i.e. by March 15, 2042). The Company’s investment in the said “Covered Warrants” is included in the schedule of Investments

7. The Company’s investment in redeemable optionally convertible cumulative preference shares of West Gujarat Expressway Limited (“WGEL”) are convertible, at the option of the investor, into 1 equity share and carry a coupon of 2% per annum, accrued annually in arrears (“Coupon”). An additional coupon consisting of 95% of the balance distributable profts, that may be available with WGEL after it has met all other obligations, would accrue on the said preference shares (“Additional Coupon”)

The Coupon and the Additional Coupon are payable annually only if WGEL has surplus cash after servicing its lenders and meeting plough back requirements towards capital expenditure as may be decided by its board of directors. The unpaid Coupon would annually be cumulated. The unpaid additional coupon would be accumulated in a year in which there are distributable profts, which are not distributed. The unpaid coupon and unpaid additional coupon carry a special coupon at 10% per annum compounded with annual rests and shall accrue as special coupon to the Investor in addition to the Coupon and Additional Coupon (“Special Coupon”)

8. Derivatives and foreign currency exposures:

a. The Company as a part of its strategic initiatives to consolidate/restructure its investments in surface transport sector, has made direct investments in certain special purpose entities (“SPE”s) engaged in that sector and also invested in units of a scheme of ITNL Road Investment Trust (the “Scheme”) which in turn has made investments in such SPEs. Amounts invested include derivative instruments in the form of call options

9. As required under the restructuring package of Gujarat Road and Infrastructure Company Limited (GRICL), approved by the Corporate Debt Restructuring Cell on 17th June 2004, the Company as one of the promoters of GRICL advanced Rs. 600.00 Million towards Preference Share Capital. Out of the above advance, Rs. 150.00 Million was to be applied against issue of 1% Non Cumulative Convertible Preference Shares and Rs. 450.00 Million against issue of 8% Redeemable Convertible Preference Shares. GRICL proposes to convert this advance into subordinated debt. Pending completion of the process for the conversion, the Company has classifed the amount as “Advance towards Share Application Money”

10. According to the records available with the Company, there were no dues to Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act 2006. Hence disclosures, if any, relating to amounts unpaid as at the period end together with the interest paid / payable as required under the said Act have not been given

11. Employee beneft obligations

Defned-Contribution Plans

The Company offers its employees defned contribution plans in the form of provident fund, family pension fund and superannuation fund. Provident fund, family pension fund and superannuation fund cover substantially all regular employees. Contributions are paid during the year into separate funds under certain statutory/ fduciary-type arrangements. While both the employees and the Company pay predetermined contributions into the provident fund and pension fund, the contribution to superannuation fund are made only by the Company. The contributions are normally based on a certain proportion of the employee’s salary

A sum of Rs. 12.97 Million (Previous year: Rs. 9.86 Million) has been charged to the Proft and Loss account in this respect

Defned–Benefts Plans

The Company offers its employees defned-beneft plans in the form of a gratuity scheme (a lump sum amount). Benefts under the defned beneft plans are typically based on years of service rendered and the employee’s eligible compensation (immediately before retirement). The gratuity scheme covers substantially all regular employees. In the case of the gratuity scheme, the Company contributes funds to the Life Insurance Corporation of India which administers the scheme on behalf of the Company. Commitments are actuarially determined at year-end. Actuarial valuation is based on “Projected Unit Credit” method. Gains and losses of changed actuarial assumptions are charged to the Proft and Loss Account

12. During the year, North Karnataka Expressway Limited (“NKEL”) converted its advance towards capital amounting to Rs. 450 Million into a short term loan. As this conversion did not involve any cash or cash equivalents, it has not been refected in the Cash Flow Statement

13. The sum of Rs. 236.18 Million payable to vendors of certain fxed assets as at March 31, 2009, was excluded from the Cash Flow Statement for the year ended March 31, 2009. This sum has been paid during the year and has been included as a part of “Cash Flows from Investing Activities” in the Cash Flow Statement for the year

14. Related Party Disclosures

Current Year

(a) Name of Related Parties and Description of Relationship

Nature of Name of the Entity Acronym Relationship used Holding Company Infrastructure Leasing & Financial Services Limited IL&FS

Subsidiaries - Direct East Hyderabad Expressway limited EHEL

Elsamex S.A. ELSA

Gujarat Road and Infrastructure Company Limited GRICL

Hazaribagh Ranchi Expressway Limited HREL

ITNL Enso Rail Systems Limited IERSL

ITNL International Pte Limited, Singapore IIPL

ITNL Road Infrastructure Development Company Limited (erstwhile IRIDCL

ITNL Chhattisgarh Road Infrastructure Company Limited)

Jharkhand Road Projects Implementation Company Limited JRPICL

Moradabad Bareilly Expressway Limited MBEL

Pune Sholapur Road Development Company Limited PSRDCL

Vansh Nimay Infraprojects Limited VNIL

West Gujarat Expressway Limited WGEL

Subsidiaries - Indirect North Karnataka Expressway Limited NKEL

Elsamex Internacional, SRL EISRL

Grusamar Ingenieria Y Consulting, SL GIC

Sanchez Marcos Senalizacion Imagen, S.A SMIS

Proyectos De Gestion Sistemas Calculo Y Analisis S.A PDGSCA

Elsamex India Private Limited ELSAIND

Inversiones Tyndrum S.A ITSA

Centro De Investigacion Elpidio Sanchez Marcos S.A. CDIESM

Control 7, S. A Control 7

Geotecnia 7, S.A Geotecnia 7

Mantenimiento Y Conservacion De Vialidades, DE C.V MYCDV

ESM Mantenimiento Integral DE S.A DE C.V ESMMI

Elsamex Portugal S.A EPSA

Intevial-Gestao Integral Rodoviaria S.A IGIRSA

Grusamar Albania SHPK GASHPK

Atenea Seguridad Y Medico Ambiente SA ASYMASA

Ecoasphalt Construction Company Private Limited ECCPL

Proyectos Y Promociones Inmobiliarias Sanchez Marcos SL PYPISMSL

Instituto Tecnico De La Vialidad Y Del Transporte, S.A. ITDLVYDTSA

Senalizacion Viales E Imagen, SA SVEISA

Yala Construction Company Private Limited YCCL

Rapid Metro Rail Gurgaon Limited RMRGL



Fellow Subsidiaries IL&FS Financial Services Limited IFIN

IL&FS Infrastructure Development Corpn Limited IIDCL

IL&FS Maritime Infrastructure Co Limited IMICL

IL&FS Water Limited IWL

IL&FS Securities Services Limited ISSL

IL&FS Waste Management & Urban Service Limited IWMUSL

Chhattisgarh Highway Development Co Limited CHDCL

Jharkhand Accelerated Road Development Co Ltd JARDCL

IL&FS Property Management & Services Limited IPMSL

Tamil Nadu Water Investment Co Limited TWICL

IL&FS Renewable Energy Limited IREL

IL&FS Cluster Development Initiative Limited ICDIL

IL&FS Education & Technology Services Limited IETS

IL&FS Urban Infrastructure Services Ltd IUISL

Associate - Direct Andhra Pradesh Expressway Limited APEL

ITNL Toll Management Services Limited. ITMSL

Narketpally Addanki Expressway Limited NAEL

Thiruvananthapuram Road Development Company Limited TRDCL

Warora Chandrapur Ballarpur Tollroad Limited WCBTL

Joint Venture Noida Toll Bridge Company Limited NTBCL

Other Enterprise over ITNL Road Investment Trust IRIT which ITNL has control

Key Management Mr K Ramchand Managing Director Personnel

Mr Mukund Sapre Executive Director

Holding Company Infrastructure Leasing & Financial Services Limited IL & FS

Subsidiaries - Direct Gujarat Road and Infrastructure Company Limited GRICL

East Hyderabad Expressway Limited EHEL ITNL Road Infrastructure Development Company Limited ( IRIDCL erstwhile ITNL Chhattisgarh Road Infrastructure Company Limited)

Elsamex SA ELSA

Vansh Nirnay Infraprojects Private Limited VNIPL (from March 25, 2009)

ITNL International Pte Limited, Singapore IIPL

ITNL Enso Rail Systems Limited IERSL

IL&FS Maritime Offshore Pte Limited IMOPL (upto September 28, 2008)

Subsidiaries - Indirect North Karnataka Expressway Limited NKEL

Elsamex International, SRL

Grusamar Ingenieria Y Consulting, SL (Grusamar) Sanchez Marcos Senalizacion e Imagen, S.A Proyectos De Gestion Calculo Analysis Y Sistemas S.A Elsamex India Private Limited ELSAIND

Inversiones Tyndrum S.A

Centro De Investigacion Elipido Sanchez Marcos S.A. Control 7, S. A Geotecnia 7, S.A



Key Management

Mr K Ramchand-Managing Director (From August 13, personnel 2008)

Mr Mukund Sapre-Executive Director (From August 13, KMP 2008)

Mr Ajay Menon-Manager (Upto August 14, 2008)

15. Figures for the previous year have been regrouped / reclassifed, wherever necessary, to conform to the classifcation of the current year