l. Trust information and nature of Operations

Indinfravit Trust (“Trust” or “InvIT”) is as irrevocable trust registered under the provisions of the Indian Trusts Act, 1882 on March 07, 2018. It is registered under the Securities and Exchange Board of India (Infrastructure Investment Trust) Regulations, 2014 on March 15, 2018 having registration number IN/InvIT/17-18/0007. The Trust is settled by L&T Infrastructure Development Project Limited (“L&T IDPL” or the “Sponsor”), an infrastructure development company in India. The Trustee to the Trust is IDBI Trusteeship Services Limited (the “Trustee”) and Investment Manager for the Trust is LTIDPL IndvIT Services Limited (“Investment Manager”). The Trust has been formed to invest in infrastructure assets primarily being in the road sector in India. All of the Trust’s road projects are implemented and held through special purpose vehicles (“Project SPVs” / “Subsidiaries”). The units of the Trust were listed in Bombay Stock Exchange and National Stock Exchange on May 09, 2018.

During the period ended March 31, 2019, the Trust acquired 100% equity control in the following Project SPVs from the Sponsor with effect from May 04, 2018. These Project SPVs are developed on Build, Operate and Transfer (‘BOT’) and Develop, Build, Operate, Finance and Transfer (‘DBFOT’) basis.

The registered office of the Investment Manager is Post Box No. 979, TCTC Building, 1st Floor, Mount Poonamallee Road, Manapakkam, Chennai - 600089, Tamil Nadu

The financial statements were authorised for issue in accordance with resolution passed by the board of directors of the Investment Manager on May 16, 2019.

Terms / rights attached to units

(i) Rights of Unitholders

The Trust has only one class of units. Each Unit represents an undivided beneficial interest in the Trust. Each holder of unit is entitled to one vote per unit. The Unitholders have the right to receive at least 90% of the Net Distributable Cash Flows of the Trust at least once in every six months in each financial year in accordance with the InvIT Regulations. The Investment Manager approves dividend distributions. The distribution will be in proportion to the number of units held by the unitholders. The Trust declares and pays dividends in Indian rupees.

A Unitholder has no equitable or proprietary interest in the projects of the Trust and is not entitled to any share in the transfer of the projects (or any part thereof) or any interest in the projects (or any part thereof) of the Trust. A Unitholder’s right is limited to the right to require due administration of the Trust in accordance with the provisions of the Trust Deed and the Investment Management Agreement.

* The distribution relates to the distributions during the period and does not include the distribution relating to the period October 01, 2018 to March 31, 2019 which will be paid after March 31, 2019. The distributions by the Trust to its unitholders are based on the Net Distributable Cash Flows of the Trust under the SEBI InvIT Regulations and hence part of the same includes repayment of capital as well.

The loans are secured by first charge on escrow accounts and on receivables of the Trust arising out of principal and interest payment of the loans given by the Trust to its subsidiaries.

Interest rates on the term loan from bank is Marginal Cost of fund based lending rate (MCLR) applicable on such anniversary date i.e., 8.30% p.a.. The loans are repayable in unstructured quarterly instalment as per the repayment schedule specified in loan agreement with the lender.

2. Contingent liabilities

There are no contingent liabilities as on March 31, 2019

3. Capital and other commitments

There are no capital and other commitments as on March 31, 201 9

4. Disclosure of segment information pursuant to Ind AS 108 “Operating Segments”

The activities of the Trust mainly include investing in infrastructure assets primarily in the SPVs operating in the road sector to generate cash flows for distribution to unit holders. Based on the guiding principles given in Ind AS - 108 “Operating Segments”, this activity falls within a single operating segment. Further, the entire operations of the Trust are only in India and hence, disclosure of secondary / geographical segment information does not arise. Accordingly, giving disclosures under Ind AS 108 does not arise.

5. Disclosure pursuant to Ind AS 33 “Earnings per Share”

Basic and Diluted Earnings per Unit (EPU) computed in accordance with Ind AS 33 “Earnings per Share”.

6. Details of dues to micro and small enterprises as per MSMED Act, 2006

There are no Micro and Small Enterprises as defined in the Micro and Small Enterprises Development Act, 2006 to whom the Trust owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro and Small Enterprises has been determined to the extent such parties has been identified on the basis of information available with the Trust.

7. Related Party Disclosures

I List of related parties as per the requirements of Ind AS 24 - “Related Party Disclosures”

A Related parties where control exists

Subsidiaries

Krishnagiri Thopur Toll Road Limited (KTTL)

Krishnagiri Walajahpet Tollway Limited (KWTL)

Western Andhra Tollways Limited (WATL)

Beawar Pali Pindwara Tollway Limited (BPPTL)

Devihalli Hassan Tollway Limited (DHTL)

II List of additional related parties as per Regulation 2(1)(zv) of the SEBI InvIT Regulations

A Parties to IndInfravit

L& T Infrastructure Development Projects Limited (L&T IDPL) - Project Manager &

Sponsor of the IndInfravit

LTIDPL IndvIT Services Limited (LTIDPL IndvIT) - Investment Manager (IM) of the IndInfravit

IDBI Trusteeship Services Limited (ITSL) - Trustee of IndInfravit

B Promoters of the parties to the Trust specified in II(A) above

Larsen & Toubro Limited (L&T) - Promoter of L&T IDPL

L&T Infrastructure Development Projects Limited (L&T IDPL) - Promoter of LTIDPL

IndvIT IDBI Bank Limited (IDBI Bank) - Promoter of ITSL

C Directors of the parties to the Trust specified in II(A) above

(i) Directors of L&T IDPL

Mr. R. Shankar Raman

Mr. Shailesh K. Pathak

Mr. Sudhakar Rao

Mr. Vinayak Laxman Patankar

Mr. Vikram S Gandhi

Mr. T.S.Venkatesan

Mrs. Vijayalakshmi Rajaram Iyer

(ii) Directors of LTIDPL IndvIT

Mr. Nasim Zaidi

Mr. Mohanraj Narendranathan Nair

Mr.Chandra Shekhar Rajan (till January 16, 2019)

Mr. Ashwin Mahalingam

Mrs .Samyuktha Surendaran

Mrs.Monisha Prabhu Macedo

Mr. T.S.Venkatesan

Mr.Vipul Chandra (till February 26, 2019)

Mr. Pushkar Vijay Kulkarni

Mr. Igor Emil Lukin

(iii) Directors of ITSL

Mr. Gurudeo Madhukar Yadwadkar

Mr. Ravishankar G Shinde

Ms. Madhuri J Kulkarni

Ms. Sashikala Muralidharan

Mr. Saurabh Chandra

Mr. Swapan Kumar Bagchi

Mr. K R Vishwanath

Default and breaches

There are no defaults during the period with respect to repayment of principal and payment of interest and no breaches of the terms and conditions of the borrowings.

There are no breaches during the period which permitted lender to demand accelerated payment

The carrying amount of current financial assets and other financial liabilities measured at amortised cost are considered to be the same as their fair values, due to their short term nature.

The carrying value of borrowings approximates the fair value as the instruments are at prevailing market rate.

The policy of the Trust is to recognise transfers into and transfer out of fair values hierarchy levels as at the end of the reporting period.

8. Financial Risk Management

The Trust’s risk management policies are established to identify and analyse the risks faced by the Trust, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Trust’s activities.

The Board of Directors of Investment Manager has overall responsibility for the establishment and oversight of the Trust’s risk management framework.

In performing its operating , investing and financing activities, the Trust is exposed to the Credit risk, Liquidity risk and Market risk.

A) Market risk

The market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

(i) Foreign Currency Risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate.

The Trust is not exposed to foreign currency risk as it has no borrowings or payables or any other significant transactions in foreign currency

(ii) Interest rate risk

Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Trust’s exposure to the risk of changes in market interest rates relates primarily to the Trust’s long-term debt obligations with floating interest rates.

(iii) Price risk

Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk).

The Trust is exposed to price risk due to investments in mutual funds and classified as fair value through profit and loss

The Trust measures risk through sensitivity analysis.

The Trust’s risk management policy is to mitigate the risk by investments in diversified mutual funds.

B) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets.

The Trust is exposed to liquidity risk due to bank borrowings and trade and other payables.

The Trust measures risk by forecasting cash flows.

The Trust’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due without incurring unacceptable losses or risking damage to the Trust’s reputation. The Trust ensures that it has sufficient funds to meet expected operational expenses, servicing of financial obligations.

C) Credit risk

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Trust is exposed to credit risk from its investing activities including loans to subsidiaries, deposits with banks and other financial instruments. As at March 31, 2019, the credit risk is considered low since substantial transactions of the Trust are with its subsidiaries.

9. Capital management

For the purpose of the Trust’s capital management, capital includes issued unit capital and all other reserves attributable to the unit holders of the Trust. The primary objective of the Trust’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise unit holder value

The Trust manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Trust may adjust the dividend payment / income distribution to unit holders (subject to the provisions of SEBI InvIT Regulations which require distribution of at least 90%of the net distributable cash flows of the Trust to unit holders), return capital to unit holders or issue new units. The Trust monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Trust’s policy is to keep the gearing ratio optimum.

10. Significant accounting judgement, estimates and assumptions

The preparation of the Trust’s financial statements requires Investment Manager to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in out comes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

(a) Judgement

In the process of applying the Trust’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements.

(b) Classification of unit holders Funds

Under the provisions of the SEBI InvIT Regulations, the Trust is required to distribute to its Unit holders not less than ninety percent of the net distributable cash flows of the Trust for each financial year. Accordingly, a portion of the unit holders’ funds contain a contractual obligation of the Trust to pay to its Unit holders cash distributions. The Unit holder’s funds could therefore have been classified as compound financial instrument which contain both equity and debt components in accordance with Ind AS 32 ‘Financial Instruments: Presentation’. However, in accordance with SEBI Circulars (Circular no..CIR/IMD/DF/114/2016 dated October 20, 201 6 and No. CIR/IMD/DF/1 27/201 6 dated November 29, 2016) issued under the SEBI InvIT Regulations, the unit holders’ funds have been classified as equity in order to comply with the mandatory requirements of Section H of Annexure A to the SEBI Circular dated October 20, 2016 dealing with the minimum disclosures for key financial statements. In line with the above, the income distribution payable to unit holders is recognized as liability when the same is approved by Board of Directors of the Investment Manager.

(c) Fair valuation and disclosures

SEBI Circulars issued under the SEBI InvIT Regulations requires disclosures relating to net assets at fair value and total returns at fair value. In estimating the fair value of investments in subsidiaries (which constitute substantial portion of the net assets), the Trust engages independent qualified external valuers to perform the valuation. The Investment Manager works closely with the valuers to establish the appropriate valuation techniques and inputs to the model. The valuation report and findings are discussed at the meeting of the Board of Directors on yearly basis to understand the changes in the fair value of the subsidiaries. The inputs to the valuation models are taken from observable markets, where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as weighted average cost of capital, tax rates, inflation rates, etc. Changes in assumptions about these factors could affect the fair value.

(d) Taxes

In accordance with section 10 (23FC) of the Income Tax Act, 1961 the income of business trusts in the form of interest received or receivable from subsidiaries is exempt from tax. Accordingly, the Trust is not required to provide any current tax liability. Further, deferred tax asset on carry forward losses is not created since there is no reasonable certainty of reversal of the same in the near future.

(e) Expected Credit Loss on financial assets

As per Ind AS 109, Financial Assets that are measured at amortised cost are required to compute the Expected Credit Loss (ECL). As at the reporting period, Investment manager of the Trust assessed the credit risk of the financial assets and concluded that are no provision for ECL is required.

11. Previous period figures

The Trust was registered as an irrevocable Trust under the Indian Trusts Act, 1882 on March 07, 2018 and registered as an Infrastructure Investment Trust under the Securities and Exchange Board of India (Infrastructure Investment Groups) Regulations, 2014 on March 15, 2018. The financial statements of the Trust has been drawn for the period March 07, 2018 to March 31, 2019 and hence giving corresponding figures for previous period does not arise.

12. Subsequent event

On May 16, 201 9 , the Board of Directors of the Investment Manager approved distribution of Rs. 4.73 per unit (Return on capital of Rs. 2.99 per unit and return of capital of Rs. 1.74 per unit) for the period October 01, 2018 to March 31, 2019 to be paid on or before 15 days from the date of declaration.