1 Basis of Consolidation
 
 1.  The Consolidated Financial Statements comprise the individual
 financial statements of Infrastructure Development Finance Company
 Limited (‘the Holding Company), its subsidiaries and associate as on
 March 31, 2011 and for the period ended on that date. The Consolidated
 Financial Statements have been prepared on the following basis:
 
 i.  The financial statements of the Holding Company and its
 subsidiaries have been consolidated on a line by line basis by adding
 together the book values of like items of assets, liabilities, income
 and expenses, after eliminating intra-group balances and intra-group
 transactions resulting in unrealised profits or losses as per
 Accounting Standard 21 on ‘Consolidated Financial Statements as
 notified by the Companies (Accounting Standards) Rules, 2006.
 
 ii.  The financial statements of the jointly controlled entities have
 been consolidated on a line by line basis by adding together the book
 values of like items of assets, liabilities, income and expenses, after
 eliminating intra-group balances and intra-group transactions resulting
 in unrealised profits or losses as per Accounting Standard 27 on
 ‘Financial Reporting of Interests in Joint Ventures as notified by the
 Companies (Accounting Standards) Rules, 2006 using the proportionate
 consolidation method.
 
 iii. The Holding Companys investments in associates are accounted
 under the equity method and its share of pre-acquisition profits/losses
 is reflected as Capital Reserve/Goodwill in the carrying value of
 investments in accordance with Accounting Standard 23 on ‘Accounting
 for Investments in Associates in Consolidated Financial Statements as
 notified by the Companies (Accounting Standards) Rules, 2006.
 
 iv.  The financial statements of the subsidiaries and the associate
 used in the consolidation are drawn up to the same reporting date as
 that of the Holding Company, i.e. March 31, 2011.
 
 v.  The excess of the cost to the Holding Company of its investment in
 the subsidiaries, the jointly controlled entities and the associates
 over the Holding Companys portion of equity is recognised in the
 financial statements as Goodwill and is tested for impairment on an
 annual basis.
 
 vi.  The excess of the Holding Companys portion of equity of the
 subsidiaries, the jointly controlled entities and the associates on the
 acquisition date over its cost of investment is treated as Capital
 Reserve.
 
 vii. Minority interest in the net assets of the subsidiaries consists
 of the amount of equity attributable to minorities at the date on which
 investment in a subsidiary is made. Net Profit for the year of the
 subsidiaries attributable to minorities is identified and adjusted
 against the Profit After Tax of the Group.
 
 viii. In case of foreign subsidiaries, being non-integral operations,
 revenue items are consolidated at the average rate prevailing during
 the year.  All assets and liabilities are converted at the rates
 prevailing at the end of the year. Any exchange difference arising on
 consolidation is recognised in the Foreign Currency Translation
 Reserve.
 
 3 During the year,
 
 (a) the Holding Company subscribed 64,000 equity shares of IDFC Asset
 Management Company Limited.
 
 (b) IDFC Asset Management Company Limited has subscribed 100% equity
 shares of IDFC Investment Managers (Mauritius) Limited.
 
 (c) IDFC Securities Limited has subscribed 100% equity shares of IDFC
 Capital (USA) Inc.
 
 (d) the Holding Company sold its holding in Delhi Integrated
 Multi-Modal Transit System Limited, Infrastructure Development
 Corporation (Karnataka) Limited and Uttarakhand Infrastructure
 Development Company Limited and transferred its beneficial interest in
 India PPP Capacity Building Trust and India Infrastructure Initiative
 Trust, to IDFC Foundation, a wholly owned subsidiary.
 
 (e) IDFC Projects Limited has subscribed 240,000 equity shares of
 Jetpur Somnath Highway Limited.
 
 (f) IDFC Projects Limited has subscribed 74% equity shares of Jetpur
 Somnath Tollways Limited.
 
 (g) the Holding Company purchased 10,000 shares of Uniquest Infra
 Ventures Private Limited.  (h) the Holding Company subscribed to 50,000
 shares of IDFC Foundation.
 
 4 On July 7, 2010 the Holding Company issued and allotted 157,752,090
 equity shares of Rs. 10 each at a premium of Rs. 158.25 per share pursuant
 to a Qualified Institutional Placement. Further, the Holding Company
 issued and allotted 84,000,000 Compulsorily Convertible Cumulative
 Preference Shares (CCCPS) of Rs. 100 each at par on August 11, 2010
 pursuant to a Qualified Institutional Placement. Additionally,
 2,583,065 equity shares of Rs. 10 each were allotted under the Employee
 Stock Option Scheme. Accordingly, the issued equity share capital has
 increased from Rs. 13,006,123,930 to Rs. 14,609,475,480 and an amount of Rs.
 25,101,204,403 has been credited to the Securities Premium Account. The
 proceeds of the issue have been utilised for general business purposes.
 
 5 The Holding Company had raised Rs. 8,400,000,000 through the issue of
 CCCPS. The preference shares are convertible at any time into equity
 shares of face value of Rs. 10 each until the date falling 18 months from
 the date of issuance of the Preference Shares, at the option of the
 holders, at Rs. 176 per equity share and carry dividend @ 6% p.a.
 
 7 Debenture Redemption Reserve has been created by the Holding Company
 in accordance with Section 117C of the Companies Act, 1956 in respect
 of public issue of long-term Infrastructure Bonds.
 
 8 Special Reserve has been created in terms of Section 36(1)(viii) of
 the Income-tax Act, 1961 out of the distributable profits of the
 Holding Company.
 
 9 In respect of equity shares issued pursuant to Employee Stock Option
 Scheme, the Holding Company paid dividend of Rs. 1,501,865 for the year
 2009-10 (Rs. 260,992 for the year 2008-09) and tax on dividend of Rs.
 249,441 (Previous Year Rs. 44,356) as approved by the shareholders at the
 Annual General Meeting held on June 28, 2010.
 
 10 (a) Secured Loans of Rs. 351,852,893,546 (Previous Year Rs. Nil) are
 secured by way of a first floating pari passu charge over investments,
 infrastructure loans, current assets and loans and advances excluding
 investments in and other receivables from subsidiaries and affiliates.
 
 (b) Secured Loans in the nature of borrowings under Collateralised
 Borrowing and Lending Obligation are secured against Investments in
 Government of India Loans.
 
 (c) Unsecured Loans – Debentures of Rs. Nil (Previous Year Rs.
 162,866,000,000) are secured by a mortgage on certain immovable
 properties up to a value of Rs. 1,000,000.
 
 11 Infrastructure loans to the extent of Rs. 374,409,924,820 (Previous
 Year Rs. 247,654,753,113) are secured by: i.  Hypothecation of assets
 and/or
 
 ii. Mortgage of property and/or
 
 iii. Trust and Retention Account and/or
 
 iv. Bank guarantees, company guarantee, sponsor guarantee or personal
 guarantee and/or
 
 v. Assignment of receivables or rights and/or
 
 vi. Pledge of shares and/or
 
 vii. Negative lien and/or
 
 viii. Undertaking to create a security.
 
 14 (a) Interest on Investments, Dividend on Investments and Profit on
 sale of Investments include Rs. 3,283,539,210 (Previous Year Rs.
 2,298,776,294), Rs. 323,935,995 (Previous Year Rs. 699,262,171) and Rs.
 484,288,186 (Previous Year Rs. 1,036,345,464) respectively, in respect of
 Current Investments. Provision for diminution in value of Investments
 includes amortised premium of Rs. 30,068,206 (Previous Year Rs. 13,487,870)
 on purchase of Long-Term Investments.
 
 (b) Interest on Infrastructure Loans includes exchange gain of Rs.
 484,052,986 (Previous Year Rs. 56,879,384).
 
 (c) Miscellaneous income includes exchange gain of Rs. 520,767 (Previous
 Year Rs. 28,532,594).
 
 (d) Interest – Other Charges includes exchange loss of Rs. 315,806,898
 (Previous Year Rs. 61,320,748).
 
 16 Tax on proposed dividend for the year 2010-11 is net of dividend
 distribution tax of Rs. 75,985,031 (Previous Year Rs. 101,970,000) paid by
 Subsidiary Companies on interim dividend of Rs. 457,500,000 (Previous
 Year Rs. 600,000,000) under Section 115-O of the Income-tax Act, 1961.
 
 17 In accordance with Accounting Standard 15 on ‘Employee Benefits as
 notified by the Companies (Accounting Standards) Rules, 2006, the
 following disclosures have been made:
 
 19 As per Accounting Standard 18 on ‘Related Party Disclosures as
 notified by the Companies (Accounting Standards) Rules, 2006, the
 related parties of the Group are as follows:
 
 - RELATIONSHIPS:
 
 I.  ASSOCIATE
 
 Feedback Ventures Private Limited
 
 II.  KEY MANAGEMENT PERSONNEL [of the Holding Company]
 
 Dr. Rajiv B. Lall – Managing Director and CEO Mr. Vikram Limaye –
 Whole-time Director
 
 20 In accordance with Accounting Standard 19 on ‘Leases as notified by
 the Companies (Accounting Standards) Rules, 2006, the following
 disclosures in respect of Operating Leases are made.
 
 23 Contingent liabilities not provided for in respect of:
 
 PARTICULARS                       CURRENT YEAR     PREVIOUS YEAR
 
 
 (a) Capital Commitments          7,288,887,415     6,896,557,752
 
 (b) Estimated amount of contracts 
 remaining to be executed on
  capital account (net of advances)
 [including Rs. 54,881,304 (Previous 
 Year Rs. 1,255,133) on account of 
 proportionate share in an
 associate company and Rs. Nil 
 (Previous Year Rs. 661,800) on 
 account of proportionate share in a
 jointly controlled entity]          75,070,174        42,750,088
 
 (c)  Claims not acknowledged as
  debts in respect of
 Income-tax demands under appeal 
 amount to [including Rs. Nil 
 (Previous Year Rs. 12,193,292) on
 account of proportionate share 
 in jointly controlled entities]  1,184,774,318       723,667,359
 
 (d) Guarantees issued by
  Holding Company                (Rs in crore)      (Rs in crore)
 
 1.  Financial Guarantees              1,234.45           280.12
 
 2.  Performance Guarantees              259.00            40.30
 
 3.  Risk Participation Facility           5.31            29.39
 
 24 The Holding Company has entered into Interest Rate Swaps in the
 nature of fixed/floating or floating/fixed for notional principal
 of Rs. 2,391 crore outstanding as on March 31, 2011 (Previous Year Rs.
 1,660 crore) for varying maturities linked to various benchmarks for
 asset liability management and hedging.
 
 The Holding Company has foreign currency borrowings of USD 62.56 crore
 (Previous Year USD 48.83 crore), against which the Company has
 undertaken currency interest rate swaps and forward contracts of USD
 60.91 crore (Previous Year USD 38.32 crore) to hedge foreign currency
 risk.  One of the subsidiaries has USD 0.08 crore (Previous Year USD
 0.49 crore) of unhedged foreign currency exposure as on the Balance
 Sheet date.
 
 The Holding Company has also entered in to coupon only currency swaps
 for notional principal of USD 11.11 crore (Previous Year USD 15.61
 crore) to hedge the foreign currency risk towards interest on the
 foreign currency borrowings.
 
 25 Consequent to the change in the control in some entities, certain
 opening balances have been considered based on current ownership and
 accordingly the differences are reflected as ‘Opening Adjustment.
 
 27 Previous years figures have been regrouped/rearranged wherever
 necessary to conform to the current years classification.