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Notes to Accounts of Ashoka Buildcon Ltd.

Mar 31, 2016

COMPANY OVERVIEW:

The Company was incorporated in 1993. It is presently in the business construction of infrastructure facilities on Engineering, Procurement and Construction Basis (EPC) and Built, Operate and Transfer (BOT) Basis and Sale of Ready Mix Concrete and Bitumen. The Company has promoted Special Purpose Vehicles (SPVs) for some of its projects, wherein ''Toll Collection Rights'' are received in exchange of the Construction Cost. For this, the SPVs significantly engage the services of the Company for contract related activities due to inherent execution capabilities / expertise and experience of the Company.

(I) AS - 17 - Segment Reporting

The Company has identified three reportable segments i.e. Construction & Contract related activities, BOT Projects and Sales of Goods. Segments have been identified taking in to account the nature of activities of the Company, differing risks and returns and internal reporting systems.

(II) AS - 18 Related Party Transactions

(A) List of Related Parties

(a) Parties where control exists

(i) Ashoka-DSC Katni Bypass Road Ltd.

(ii) Ashoka Highways (Bhandara) Ltd.

(iii) Ashoka Highways (Durg) Ltd.

(iv) Ashoka Infrastructure Ltd.

(v) Ashoka Infraways Ltd.

(vi) Viva Highways Ltd.

(vii) Ashoka Pre - Con Pvt Ltd.

(viii) Ashoka Technologies Pvt. Ltd.

(ix) Ashoka Sambalpur Bargarh Tollway Ltd.

(x) Ashoka Belgaum Dharwad Tollway Ltd.

(xi) Ashoka Dhankuni Kharagpur Tollway Ltd.

(xii) Ashoka Concessions Ltd.

(xiii) Ashoka Cuttak Angul Tollway Ltd

(xiv) Viva Infrastructure Ltd.

(xv) Ashoka GVR Mudhol Nipani Roads Ltd.

Enterprises in which Key Management Personnel / Directors have significant influence (Only with whom there have been transaction during the year / there was balance outstanding at the year end)

(i) Ashoka Education Foundation

(ii) Ashoka Township (AOP)

(iii) Hotel Evening Inn Pvt. Ltd.

(iv) Ashoka Institute of Medical Sciences & Research

(v) Ashoka Highways Reseach Centre Pvt Ltd.

(vi) Ashoka Bagewadi Saundatti Road Ltd.

(vii) Ashoka Hungund Talikot Road Ltd.

(viii) Ashoka Path Nirman (Nasik) Pvt.Ltd.

(ix) Unison Enviro Pvt. Ltd.

(c) Key Management Personnel

(i) Ashok M Katariya

(ii) Satish D Parakh

(iii) Sanjay P Londhe

(iv) Milapraj Bhansali

(v) Paresh C Mehta

(vi) Manoj A Kulkarni

(d) Directors and their relatives

(i) Asha A. Katariya

(ii) Ashish A. Katariya

(iii) Astha A. Katariya

(iv) Satish D Parakh (HUF)

(v) Aditya S. Parakh

(vi) Shewta A Katariya

(e) Associates & Joint Ventures

(i) Ashoka Bridgeways

(ii) Ashoka Highway AD.

(iii) Ashoka Infrastructures

(iv) Jaora Nayagaon Toll Road Co. PvtLtd.

(v) Ashoka Valecha JV

(vi) Abhijeet Ashoka Infrastructures Pvt. Ltd.

(vii) Cube Ashoka Joint Venture

(viii) PNG Tollway Ltd.

(ix) GVR Ashoka Chennai ORR Limited

(x) Mohan Mutha Ashoka Buildcon LLP

(xi) ABL BIPL Joint Venture

(III) AS - 19 - Accounting for Operating Leases

The Company has various operating leases for equipments and premises, the leases are renewable on periodic basis and cancellable in nature.

(IV) PNG Tollways Limited (''PNG''), an associate of the Company, had entered into a service concession agreement with National Highways Authority of India (''NHAI'') for construction, operation and maintenance of six laning of Pimpalgaon – Nashik – Gonde on built operate and transfer model basis. PNG has terminated the said service concession agreement after giving notice to NHAI in accordance with the termination clauses of the service concession agreement and claimed compensation from NHAI. The company has also been involved in executing the said project.

The Company based on its legal and commercial evaluation has assessed the probable amount of claims to be received from NHAI by PNG and PNG''s obligation towards its lenders and other creditors. On the basis of the said evaluation, the management has also assessed the recoverability of its exposure to PNG in the form of, project receivables, interest receivable and construction work in progress. Accordingly, the management has recognised following provisions/write off in the statement of profit and loss and disclosed as an "Exceptional Items".

(V) The company has registered under Employees Provident Fund Act for employees of the company as well as employees of certain group companies.

(VI) Balance of Debtors, Creditors, Advances, Deposits, Unsecured Loan etc. are subject to confirmation and reconciliation if any.

(VII) The company was subject to a search under Section 132 of The Income Tax Act, 1961 in the month of April 2016. The Income Tax Department is in the process of assessing the final amount of tax payable by the Company, if any, and has not raised any demand on the company till date. Consequently, no impact for the same has been given in the financial statements for the F.Y. 2015-16.

(VIII) Corresponding figures of previous year have been regrouped / rearranged wherever necessary


Mar 31, 2015

Note 1.

(i) Controlled special purpose entities are subsidiary companies incroporated to execute the specific project on Build Operate Transfer / Design Build Finance Operate Transfer

(ii) In one of the subsidiary companies, viz. Ashoka Infrastructure Limited toll collection has been discontinued at the directive of the Employer, The subsidiary Company has initiated arbitration proceeding towards such discontinuance. The subsidiary is confident of receiving additional compensation from the employer. Consequently the value of investment of the Company in the subsidiary continues to be at its full value.

(iii) The Company has entered into Joint Venture in the nature of Jointly Controlled Operations, wherein there is no capital contribution with Valecha Engineering Ltd for execution of the construction of Chittorgarh Bypass. The work is to be executed separately as per agreed terms and conditions and the obligations and fortunes of the respective works is being accounted individually of the Venturers.

(iv) The Company has also entered into a Joint Venture with Ashoka Buildwell & Developers Pvt. Ltd. by the name of Ashoka Infrastructures, to implement the Dhule Project on BOT basis with a sharing of 99.99% and 0.01% in favour of the company and Ashoka Buildwell & Developers Pvt. Ltd. respectively. The said AOP has applied to PWD Maharashtra for a further increase in toll period. However, approval for the same has not been received till the date of adoption of the financial statements resulting in a material uncertainty of future toll collections and operations of the enterprise. Proportionate interest of the company in the said Joint venture.

Note 2. * Advance recoverable in cash or kind or for value to be received includes Rs. 1,433 Lacs against a contract awarded by Kalyan Dombivili Municipal Corporation (KDMC) for Commercial Development on a PPP basis. The cost includes upfront fees paid to KDMC. The management have initiated arbitration proceedings with KDMC. Pending this provision for doubtful advance has been considered.

Note 3.

Contingent Liabilities (Rs. in Lacs)

Sr. Particulars As at 31-Mar-15 Asat31-Mar-14 No.

(a) Bank Guarantees issued by bankers in favour of third parties 85,066.79 70,856,94

(b) Corporate Guarantee issued by the Company infavour of Banks/Financial 111,142.20 117,000.00 Institutions for finance raised by Companies under the same management and against mobilisation advance.

(c) Claims against the Company not acknowledged as debts 350.65 23.90

(d) Liability against capital commitments outstanding (Net of Advances) 13.18 40.86

(e) Liability of Duty against Export Obligations 39.18 39.18

(f) Disputed Duties / Tax Demands (net of taxes paid) 4,538.50 1,259.14

(g) Resurfacing obligation as per concession agreement 237.06 709.77

Note 4.

The company has registered under Employees Provident Fund Act for employees of the company as well as employees of certain group companies.

Note 5.

Balance of Debtors, Creditors, Advances, Deposits, Unsecured Loan etc. are subject to confirmation and reconciliation if any.

Note 6.

Corresponding figures of previous period have been regrouped / rearranged wherever necessary

Note 7.

AS - 18 Related Party Transactions

(A) List of Related Parties

(a) Parties where control exists

(i) Ashoka-DSC Katni Bypass Road Ltd.

(ii) Ashoka Highways (Bhandara) Ltd.

(iii) Ashoka Highways (Durg)Ltd.

(iv) Ashoka Infrastructure Ltd.

(v) Ashoka Infraways Ltd.

(vi) Viva Highways Ltd.

(vii) Ashoka Precon P. Ltd.

(ix) Ashoka Sambalpur Bargarh Tollway Ltd.

(x) Ashoka Belgaum Dharwad Tollway Ltd.

(xi) Ashoka Dhankuni Kharagpur Tollway Ltd.

(xii) Ashoka Concessions Ltd

(xiii) Ashoka Cuttak Angul Tollway Limited

(xiv) Viva Infrastructure Ltd.

(b) Enterprises in which Key Management Personnel / Directors have significant influence

(i) Ashoka Buildwell & Developers P. Ltd.

(ii) Ashoka Builders (Nasik) P. Ltd.

(iii) Ashoka Engineering Co.

(iv) Ashoka Vastuvaibhav

(v) Ashoka E-Tech

(vi) Shweta Agro Farm

(vii) Ashoka Construwell P. Ltd.

(ix) Ashoka Biogreen Pvt Ltd

(x) Ashoka City Tower construction

(xi) Ashoka Shilp Akruti Pvt Ltd

(xii) Ashoka Vastukala Nirman Pvt Ltd

(xiii) Ashoka Housing Construction Pvt Ltd

(xiv) Ashoka Township (AOP)

Hotel Evening Inn Pvt Ltd

(c) Key Management Personnel

(i) Ashok M Katariya

(ii) Satish D Parakh

(iii) Sanjay P Londhe

(iv) Milapraj Bhansali

(d) Directors and their relatives

(i) Asha A. Katariya

(ii) Ashish A. Katariya

(iii) Astha A. Katariya

(iv) S D Parakh HUF

(v) Aditya Parakh

(vi) Shewta A Katariya

(e) Associates & Joint Ventures

(i) Ashoka Bridgeways

(ii) Ashoka Highway AD.

(iii) Ashoka Infrastructures

(iv) Jaora Nayagaon Toll Road Co. P.Ltd.

(v) Ashoka Valecha JV

(vi) Abhijeet Ashoka Infrastructures Pvt. Ltd.

(vii) Cube Ashoka Joint Venture

(viii) PNG Tollways Ltd.

(ix) GVR Ashoka Chennai ORR Limited


Mar 31, 2014

Not Available


Mar 31, 2013

(i) Controlled special purpose entities are subsidiary companies incroporated to execute the specific project on Build Operate Transfer / Design Build Finance Operate Transfer

(ii) In one of the subsidiary company, viz. Ashoka Infrastructure Limited toll collection has been discontinued at one out of the two toll plazas at the directive of the Employer, the loss of which the subsidiary expects to be compensated by the Employer. Based on additional directives of the employer, major maintenance work was carried out during the F.Y 2010-11. Both these factors have led to decline of the net worth of the company. However, the subsidiary is confident of receiving additional compensation from the employer. Consequently the value of investment of the Company in the subsidiary continues to be at its full value.

(iii) The Company has entered into Joint Venture in the nature of Jointly Controlled Operations, wherein there is no capital contribution with Valecha Engineering Ltd for execution of the construction of Chittorgarh Bypass. The work is to be executed separately as per agreed terms and conditions and the obligations and fortunes of the respective works is being accounted individually of the Venturers.

(iv) The Company, Ashoka Concessions Limited (ACL), a subsidiary and Macquarie SBI Infrastructure Investments Pte Limited, Singapore (MSIIPL) and SBI Macquarie Infrastructure Trust, Mumbai (SMIT) [MSIIPPL & SMIT have been referred to as Investors) have entered into a multi party agreement. Pursuant to this agreement the Company and Investors have to subscribe to the equity shares of ACL in a manner to have the inter-se holding in the ratio of 66:34.

Pursuant to this agreement the investments of ABL in following subsidiaries have been transferred to ACL during the year:-

1. Ashoka Highways (Bhandara) Limited

2. Ashoka HIghways (Durg) Limited

3. Ashoka Belgaum Dharwad Tollway Limited

4. Ashoka Sambalpur Bargarh Tollway Limited

5. Ashoka Dhankuni Kharagpur Tollway Limited

6. PNG Tollways Limited

7. Jarora Nayagaon Toll Road Co. Pvt Limited

(v) The Company has also entered into a Joint Venture with Ashoka Buildwell & Developers Pvt. Ltd. by the name of Ashoka Infrastructures, to implement the Dhule Project on BOT basis with a sharing of 99.99% and 0.01% in favour of the company and Ashoka Buildwell & Developers Pvt. Ltd. respectively.The said AOP has applied to PWD Maharashtra for a further increase in toll period. However, approval for the same has not been received till the date of adoption of the financial statements resulting in a material uncertainty of future toll collections and operations of the enterprise Proportionate interest of the company in the said Joint venture is as under:

(vi) Further to the Search u/s 132 of the Income Tax Act, 1961 in the month of April, 2010 the Company, with a view to avoid acrimonious and long drawn litigation, has preffered to file an application u/s 245C(1) to the Income Tax Settlement Commission, in pursuance of which the company has provided and paid as of 31.12.2012 a sum of Rs. 1081 Lac. The same has been provided as Tax for earlier years

(a) PWD Maharashtra vide its Notification dated November 14, 2012 directed the Company to stop collection of toll of the Ahmednagar (Nagar Karmala) Project. The Company has challenged this order and the matter is under arbitration. The company is confident that the arbitration award will be in its favour and it will be permitted to restart collection of toll. However, on a prudent basis the Company estimated the value in use of the intangible asset, Right to collect Toll and has impaired fifty percent of the written down value of Rs. 3137.70 which is presented as Exceptional item in the Profit & Loss account. The balance value of the asset of Rs. 1568.85 lakhs is classified as OtherNon-Current Assets.

Percentage completion method for income recognition on long term contracts involves technical estimates by engineers/ technical officials, of percentage of completion and costs to completion of each project/contract on the basis of which profit/ loss is allocated.

(b) PWD Maharashtra vide its Notification dated November 14, 2012 directed the Company to stop collection of toll of the Ahmednagar (Nagar Karmala) Project, Consequently the Company no longer retains the right to collect toll on the project, the written down value of the the project aggregating to Rs. 3137.70 lakhs has been fully amortised during the year. The Company has initiation aribitration proceedings on PWD against the said stoppage.

i) Contribution to Provident Fund is charged to accounts on accrual basis. The Company operates a defined contribution scheme with recognized provident fund. For this Scheme, contributions are made by the company, based on current salaries, to recognized Fund maintained by the company. In case of Provident Fund scheme, contributions are also made by the employees. An amount of Rs. 89.29 Lacs (Previous Period Rs. 81.20 Lacs) has been charged to the Profit & Loss Account on account of this defined contribution scheme.

(ii) The Gratuity benefit is funded through a defined benefit plan. For this purpose the Company has obtained a qualifying insurance policy from Life Insurance Corporation ofIndia.

(iii) The Company provides benefits to its employees under the Leave Encashment pay plan which is a non-contributory defined benefit plan. The employees of the Company are entitled to receive certain benefits in lieu of the annual leave not availed of during service, at the time of leaving the services of the Company. The benefits payable are expressed by means of formulae which takes into account the Salary and the leave balance to the credit of the employees on the date of exit.

(II) AS - 18 Related Party Transactions (A) List of Related Parties

(a) Parties where control exists

(i) Ashoka-DSC Katni Bypass Road Ltd.

(ii) Ashoka Highways (Bhandara) Ltd.

(iii) Ashoka Highways (Durg)Ltd.

(iv) Ashoka Infrastructure Ltd.

(v) Ashoka Infraways Ltd.

(vi) Viva Highways Ltd.

(vii) Ashoka Precon P. Ltd.

(viii) Ashoka Technologies P. Ltd.

(ix) Ashoka High-Way Ad.

(x) Ashoka Infrastructures

(xi) Ashoka Sambalpur Bargarh Tollway Ltd.

(xii) Ashoka Belgaum Dharwad Tollway Ltd.

(xiii) Ashoka Dhankuni Kharagpur Tollway Ltd.

(xiv) Ashoka Concessions Ltd

(xv) Ashoka Cuttak Angul Tollway Limited

(xvi) Viva Infrastructure Ltd.

(d) Directors and their relatives

(i) Asha A. Katariya

(ii) Ashish A. Katariya

(iii) Astha A. Katariya

(iv) S D Parakh HUF

(v) Aditya Parakh

(vi) Shewta V Kasera

(b) Enterprises in which Key Management Personnel / Directors have significant influence

(i) Ashoka Buildwell & Developers P. Ltd.

(ii) Ashoka Builders (Nasik) P. Ltd.

(iii) Jaora Nayagaon Toll Road Co. P.Ltd.

(iv) Ashoka Engineering Co.

(v) Ashoka Vastuvaibhav

(vi) Ashoka E-Tech

(vii) Shweta Agro Farm

(viii) Ashoka Construwell P. Ltd.

(ix) Ashoka Education Foundation

(x) Ashoka Biogreen Pvt Ltd

(xi) Ashoka City Tower construction

(xii) Ashoka Shilp Akruti Pvt Ltd

(xiii) Ashoka Vastukala Nirman Pvt Ltd

(xiv) Ashoka Housing Construction Pvt Ltd

(xv) Ashoka Township (AOP)

(c) Key Management Personnel

(i) Ashoka M Katariya

(ii) Satish D. Parakh

(iii) Sanjay P Londhe

(e) Associates & Joint Ventures

(i) Ashoka Bridgeways

(ii) Ashoka Highway AD.

(iii) Ashoka Infrastructures

(iv) Ashoka Valecha JV

(v) Abhijeet Ashoka Infrastructures Pvt. Ltd.

(vi) Cube Ashoka Joint Venture

(vii) PNG Tollways Ltd.

Note: Figures in brackets denote figures of previous period ended March 31,2012

(b) The Company has provided Rs. 3233.49 Lacs (Previous Period Rs. 667.00 Lacs) for Maintenance work arising out of Contractual Obligations during the defect liability period of the contracts, which is charged to the Profit & Loss Account.

(c) The Company has contractual obligation to periodically maintain, replace or restore infrastructure as per the terms of the concession agreement. The Company has recongnied the provision ofRs. 709.76 (Previous YearRs. Nil) in accordance with Account Standard - 29 ''Provision, Contingent Liabilities and Contingent Assets'' i.e., at the best estimate of the expenditure required to settle the present obligation at the balance sheet date.

(vii) The company has registered under Employees Provident Fund Act for employees of the company as well as employees of certain group companies.

(viii) Balance ofDebtors, Creditors, Advances, Deposits, Unsecured Loan etc. are subject to confirmation and reconciliation if any.

(ix) As per the requirement of Revised Schedule VI, the company has re-classified its assets and liabilities into current and non-current, based on the normal operating cycle, as determined by the management. Previous years figures have been accordingly re-grouped and re-classifed.


Mar 31, 2012

(i) Controlled special purpose entities are subsidiary companies incroporated to execute the specifc project on Build Operate Transfer

(ii) In one of the subsidiary company, viz. Ashoka Infrastructure Limited toll collection has been discontinued at one out of the two toll plazas at the directive of the Employer, the loss of which the subsidiary expects to be compensated by the Employer. Based on additional directives of the employer, major maintenance work was carried out during the F.Y. 2010-11. Both these factors have led to decline of the net worth of the company. However, the subsidiary is confdent of receiving additional compensation from the employer. Consequently the value of investment of the Company in the subsidiary continues to be at its full value.

(iii) The Company has entered into Joint Venture in the nature of Jointly Controlled Operations, wherein there is no capital contribution with Valecha Engineering Ltd for execution of the construction of Chittorgarh Bypass. The work is to be executed separately as per agreed terms and conditions and the obligations and fortunes of the respective works is being accounted individually of the Venturers.

(iv) The Company is in process of trasfeering some of its existing Investments into an another subsidiary company.

(v) The Company has also entered into a Joint Venture with Ashoka Buildwell & Developers Pvt. Ltd. by the name of Ashoka Infrastructures, to implement the Dhule Project on BOT basis with a sharing of 99.99% and 0.01% in favour of the company and Ashoka Buildwell & Developers Pvt. Ltd. respectively. The said AOP has applied to PWD Maharashtra for a further increase in toll period. However, approval for the same has not been received till the date of adoption of the fnancial statements resulting in a material uncertainty of future toll collections and operations of the enterprise Proportionate interest of the company in the said Joint venture is as under:

(vii) Out of the Investments of the Company following investments are pledged with the Financial Institutions /Banks for security against the fnancial assistance extended to the companies under the same management:

(a) Equity Shares of Rs.10 each of:

(i) 4,000,000 Jayaswals Ashoka Infrastructure Pvt. Ltd.

(ii) 7,257,864 Viva Highways Pvt. Ltd.

(iii) 295,000 Ashoka Infraways Pvt. Ltd.

(iv) 1,530,000 Ashoka-DSC Katni Bypass Road Pvt. Ltd.

(v) 13,317,658 Ashoka Highways (Bhandara) Ltd.

(vi) 15,154,734 Ashoka Highways (Durg) Ltd.

(vii) 142,841 Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.

(viii) 327,664 Ashoka Belgaum Dharwad Tollway Pvt. Ltd.

(ix) 666,000 Ashoka Dhankuni Kharagpur Tollway Ltd.

(x) 11,211,330 PNG Tollways Limited

(b) Preference Shares of Rs.100 each :

(i) 32,383 Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.-1% Convertible

(ii) 21,136 Ashoka Belgaum Dharwad Tollway Pvt. Ltd.-1% Convertible

28 ADDITIONAL NOTES

(I) During the year the Company has changed the method of amortisation in respect of Intangible Assets i.e. Right to Collect Toll from the projected traffc volumes over the toll period to the amortisation method prescribed in Schedule XIV to The Companies Act, 1956. Amortisation has been recalculated in accordance with new method from the date of toll commencement of respective BOT project. This change has resulted into a reduction of accumulated Amortisation by Rs. 1327.00 lakhs upto March 31, 2012 with a increase in the Written Down Value of Intangible Assets. Had the earlier accounting policy of amortisation of projected traffc volumes being followed, the Amortisation for the year would have been lower by Rs. 24.08 lakhs with a corresponding impact on the net results and reserves

(III) AS – 18 Related Party Transactions

(A) List of Related Parties

(a) Parties where control exists

(i) Ashoka-DSC Katni Bypass Road P. Ltd.

(ii) Ashoka Highways (Bhandara) Ltd.

(iii) Ashoka Highways (Durg)Ltd.

(iv) Ashoka Infrastructure Ltd.

(v) Ashoka Infraways P. Ltd.

(vi) Viva Highways P. Ltd.

(vii) Ashoka Precon P. Ltd.

(viii) Ashoka Technologies P. Ltd.

(ix) Ashoka High-Way Ad.

(x) Ashoka Infrastructures

(xi) Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.

(xii) Ashoka Belgaum Dharwad Tollway Pvt. Ltd.

(xiii) Ashoka Dhankuni Kharagpur Tollway Ltd.

(xiv) Ashoka Concessions Pvt Ltd

(xv) Ashoka Cuttak Angul Tollway Limited

(xvi) Viva Infrastructure Pvt. Ltd.

(d) Directors and their relatives

(i) Asha A. Katariya

(ii) Ashish A. Katariya

(iii) Astha A. Katariya

(iv) S D Parakh HUF

(v) Shubham Agencies

(vi) Aditya Parakh

(vii) Shewta V Kasera

(b) Enterprises in which Key Management Personnel / Directors have Significant infuence

(i) Ashoka Buildwell & Developers P. Ltd.

(ii) Ashoka Builders (Nasik) P. Ltd.

(iii) Jaora Nayagaon Toll Road Co. P.Ltd.

(iv) Ashoka Engineering Co.

(v) Ashoka Vastuvaibhav

(vi) Ashoka E-Tech

(vii) Shweta Agro Farm

(viii) Ashoka Construwell P. Ltd.

(ix) Ashoka Education Foundation

(x) Ashoka Biogreen Pvt Ltd

(xi) Ashoka City Tower construction

(xii) Ashoka Shilp Akruti Pvt Ltd

(xiii) Ashoka Vastukala Nirman Pvt Ltd

(xiv) Ashoka Housing Construction Pvt Ltd

(xv) Ashoka Township (AOP)

(c) Key Management Personnel

(i) Ashoka M Katariya (ii) Satish D. Parakh

(e) Associates & Joint Ventures

(i) Ashoka Bridgeways

(ii) Ashoka Highway AD.

(iii) Ashoka Infrastructures

(iv) Ashoka Valecha JV

(v) Jayswals Ashoka Infrastructures Pvt. Ltd.

(vi) Cube Ashoka Joint Venture

(vii) PNG Tollways Ltd.

(IV) AS - 19 – Accounting for Operating Leases

The Company has various operating leases for equipments and premises, the leases are renewable on periodic basis and cancellable in nature.

(X) Contingent Liabilities (Rs. in Lacs)

Sr. Particulars As at 31-Mar-12 As at 31-Mar-11 No.

(a) Bank Guarantees and Letters of Credit issued by bankers in favour of third 73,835.12 47,985.91 parties

(b) Corporate Guarantee issued by the Company in favour of Banks/ Financial 117,623.70 170,363.00 Institutions for finance raised by Companies under the same management

[Including Guarantees given against shortfall in termination payment by customer to lenders of Rs. 1,14,760.56 Lacs (Previous Period Rs. 1,38,400 Lacs)]

(c) Claims against the Company not acknowledged as debts 23.90 23.90

(d) Liability against capital commitments outstanding (Net of Advances) 69.32 4,522.21

(e) Liability of Duty against Export Obligations 39.18 39.18

(f) Disputed Duties / Tax Demands (net of taxes paid) 1,455.69 1,234.02

(XII) The company has registered under Employees Provident Fund Act for employees of the company as well as employees of certain group companies.

(XIII) Balance of Debtors, Creditors, Advances, Deposits, Unsecured Loan etc. are subject to confrmation and reconciliation if any.

(XIV) As per the requirement of Revised Schedule VI, the company has re-classifed its assets and liabilities into current and non-current, based on the normal operating cycle, as determined by the management. Previous years fgures have been accordingly re-grouped and re-classifed.


Mar 31, 2011

COMPANY OVER VIEW :

The Company is incorporated in 1993. It is presently in the business construction of infrastructure facilities on Engineering, Procurement and Construction Basis (EPC) and Build, Operate and Transfer (BOT) Basis and Sale of Ready Mix Concrete and Bitumen. The Company has promoted Special Purpose Vehicles (SPVs) for some of its projects, wherein 'Toll Collection Rights' are received in exchange of the Construction Cost. For this, the SPVs significantly engage the services of the Company for contract related activities due to inherent execution capabilities / expertise and experience of the Company.

1 "The Company has changed the method of amortisation in respect of Intangible Assets i.e. Right to collect Toll and is now charging depreciation based on the proportion of traffic volume for a particular period to the projected traffic volumes over the toll period instead of straight line method used earlier. Amortisation has been recalculated in accordance with new method from the date of toll commencement of respective BOT project by the company. Change in Amortisation policy has resulted into reduction of accumulated Amortisation by R s9. 62.67 Lacs upto March 31, 2011 with a credit to the Profit & Loss Account and a corresponding increase in the Written Down Value of Intangible Assets. Had the earlier accounting policy of amortisation of straight line basis being followed, the Amortisation for the year would have been higherR b 2sy.49.57 Lacs and profit after tax lower by the same amount."

2 Balance of Untilised Monies raised by Issue amounting to Rs. 1,088.43 Lacs is lying in the Current account with the Scheduled Baks as at march 31, 2011.

3 AS 7 - Accounting for Construction Contracts

(a) Revenue from fixed price construction contracts are recognized on the percentage of completion method, measured by reference to the percentage of cost incurred up to the year end to estimated total cost for each contract. For the purpose of determining percentage of work completed, estimates of contract cost and contract revenue are used.

Percentage completion method for income recognition on long term contracts involves technical estimates by engineers/technical officials, of percentage of completion and costs to completion of each project/contract on the basis of which profit/loss is allocated.

(b) The company has been awarded a contract for Commercial Development on a PPP basis by Kalyan Dombivili Municipal Corporation (KDMC). The work is yet to be started due to pendign approval of plan by the KDMC since 2008-09. The company has incurred a cost of Rs.1465.10 Lacs till date as upfront fees paid to KDMC and others. The management is confident of resuming operations on this project and hence, in the opinion of the management the amount is not impaired. Consequently, no provision for the same has been made in the accounts.

In accordance with the accounting policy of the Company, Profit on Mark to Market aggregating Rs.50.65 (P.Y. Rs.59.32) Lacs has been recongnised as and when realised.

4 Employee Stock Options

The Board of Directors of the company has approved creation of an Employee Stock Option on December 13, 2007. The company has granted stock options for 7,80,050 shares on December 15, 2007 at an exercise price of Rs.190 per share. Options granted will be vested over a period of five years, first such vesting occured on december 15, 2010. The details of the stock option plan are as under:

Guidance Note on ‘Accounting for employee share based payments' issued by the Institute of Chartered Accountants of India establishes financial accounting and reporting principles for employee share based payment plans.

The Company has applied Intrinsic Value Method of Accounting. The difference between the Fair Value of the Equity Share as at March 31, 2008 (as determined by the Category I Merchant banker) and the exercise price is Rs.Nil. Accordingly no Compensation Cost needs to be amortised over the vesting period.

Had the Compensation Cost for the plan applied in a manner consistent with the fair value approach described in the guidance note, the Company's Net Income and Basic and Diluted Earnings Per Share as reported would have reduced to the pro forma amounts as under:

5 Employee Benefit-Gratuity & Leave Encashment

(a) Contribution to Provident Fund is charged to accounts on accrual basis. The Company operates a defined contribution scheme with recognized provident fund. For this Scheme, contributions are made by the company, based on current salaries, to recognized Fund maintained by the company. In case of Provident Fund scheme, contributions are also made by the employees. An amount of Rs.84.61 Lacs (P.Y. Rs.69.73 Lacs) has been charged to the Profit & Loss Account on account of this defined contribution scheme.

(b) The Gratuity benefit is funded through a defined benefit plan. For this purpose the Company has obtained a qualifying insurance policy from Life Insurance Corporation of India.

(c) The Company provides benefits to its employees under the Leave Encashment pay plan which is a non- contributory defined benefit plan. The employees of the Company are entitled to receive certain benefits in lieu of the annual leave not availed of during service, at the time of leaving the services of the Company. The benefits payable are expressed by means of formulae which takes into account the Salary and the leave balance to the credit of the employees on the date of exit.

(d) Details Gratuity and Leave Encashment disclosure as required by AS-15 (Revised) are detailed hereunder:

8 AS - 17 - Segment Reporting

The Company has identified three reportable segments i.e. Construction & Contract related activities, BOT Projects and Sales of Goods. Segments have been identified taking in to account the nature of activities of the Company, differing risks and returns and internal reporting systems.

Note:

1 Construction & Contracting Activity comprises execution of engineering and construction projects to provide solutions in civil and electrical engineering (on turnkey basis or otherwise) to core / infrastructure sectors.

2 BOT Activity relates to execution of the projects on long term basis comprising developing, operating and maintaing the Infrastructure facility.

3 Sale of Goods comprises the activity of selling of Ready Mix Concrete (RMC) and Bitumen.

9 AS - 18

Related Party T ransactions

I List of Related Parties

(a) Parties where control exists

(i) Ashoka-DSC Katni Bypass Road P. Ltd.

(ii) Ashoka Highways (Bhandara) Ltd.

(iii) Ashoka Highways (Durg)Ltd.

(iv) Ashoka Infrastructure Ltd.

(v) Ashoka Infraways P. Ltd.

(vi) Viva Highways P. Ltd.

(vii) Ashoka Precon P. Ltd.

(viii) Ashoka Technologies P. Ltd.

(ix) Ashoka High-Way Ad.

(x) Ashoka Infrastructures

(xi) Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.

(xii) Ashoka Belgam Dharwad Tollway Pvt. Ltd.

(xiii) Ashoka Dhankuni Kharagpur Tollway Ltd.

(d) Directors and their relatives

(i) Asha A. Katariya

(ii) Ashish A. Katariya

(iii) Astha A. Katariya

(iv) S D Parakh HUF

(v) Shubham Agencies

(b) Enterprises in which Key Management Personnel / Directors have significant influence

(i) Ashoka Buildwell & Developers P. Ltd.

(ii) Ashoka Builders (Nasik) P. Ltd.

(iii) Jaora Nayagaon Toll Road Co. P.Ltd.

(iv) Ashoka Engineering Co.

(v) Ashoka Vastuvaibhav

(vi) Ashoka E-Tech

(vii) Shweta Agro Farm

(viii) Ashoka Construwell P. Ltd.

(ix) Ashoka Education Foundation

(c) Key Management Personnel (i) Ashok M. Katariya

(ii) Satish D. Parakh

(iii) Sunil B. Raisoni(Upto March 14, 2011)

(e) Associates & Joint V entures

(i) Ashoka Bridgeways

(ii) Ashoka Highway AD.

(iii) Ashoka Infrastructures

(iv) Ashoka Valecha JV

(v) Jayswals Ashoka Infrastructures Pvt. Ltd.

(vi) Viva Infrastructure Pvt. Ltd.

(vii) PNG Tollways Ltd.

10 AS - 19 – Accounting for Operating Leases

The Company has various operating leases for equipments and premises, the leases are renewable on periodic basis and cancellable in nature.

The Company is claiming deduction u/s 80-IA of The Income Tax Act, 1961 for certain projects. Accordingly, no provision for deferred tax assets/liabilities on timing differences originating and reversing during tax holiday period has been made.

13 The Company was subject to search u/s 132 of The Income Tax Act, 1961 in the month of April 2010. The tax department is in the process of assessing the impact of the said search and has not raised any demand on the company till date.

(b) The Company has provided Rs.1556.00 Lacs for Maintenance work arising out of Contractual Obligations during the defect liability period of the contracts, which is charged to the Profit & Loss Account.

Further, the Company has incurred expenditure aggregating Rs.985.52 Lacs towards periodic maintenance during the year, which is also charged to the Profit & Loss Account.

6 Contingent Liabilities

(Rs. in Lacs)

Sr. Particulars As at As at

No 31-Mar-11 31-Mar-10

(a) Bank Guarantees and Letters of Credit issued by bankers in favour of third parties 47,985.91 35,325.21

(b) Corporate Guarantee issued by the Company in favour of Banks/ Financial Institutions for finance raised by Companies under the same management [Including Guarantees given against shortfall in termination payment by customer to lenders of Rs.1,38,400 Lacs (P.Y. Rs.78,500 Lacs)] 170,363.00 121,063.00

(c) Claims against the Company not acknowledged as debts 23.90 6.71

(d) Liability against capital commitments outstanding (Net of Advances) 4,522.21 21.91

(e) Liability of Duty against Export Obligations 39.18 39.18

(f) Disputed Duties / Tax Demands (net of taxes paid) 1,234.02 645.57

7 (a) The Company has entered into Joint Venture in the nature of Jointly Controlled Operations, wherein there is no capital contribution with Valecha Engineering Ltd for execution of the construction of Chittorgarh Bypass, the work is to be executed separately as per agreed terms and conditions and the obligations and fortunes of the respective works is being accounted individually of the Venturers.

(b) The Company has also entered into a Joint Venture with Ashoka Buildwell & Developers Pvt. Ltd. by the name of Ashoka Infrastructures, to implement the Dhule Project on BOT basis with a sharing of 99.99% and 0.01% in favour of the company and Ashoka Buildwell & Developers Pvt. Ltd. respectively. Proportionate interest of the company in the said Joint venture is as under:

8 Suppliers/Service providers covered under Micro, Small Medium Enterprises Development Act, 2006 have not furnished the information regarding filing of necessary memorandum with the appropriate authority. In view of this, information required to be disclosed u/s 22 of the said Act is not given.

9 Out of the Investments of the Company following investments are pledged with the Financial Institutions /Banks for security against the financial assistance extended to the companies under the same management:

(a) Equity Shares of Rs.10 each of:

(I) 4,000,000 Jayaswals Ashoka Infrastructure Pvt. Ltd.

(ii) 7,257,864 Viva Highways Pvt. Ltd.

(iii) 1,530,000 Ashoka DSC Katni Byapss Road Pvt. Ltd.

(iv) 13,317,658 Ashoka Highways (Bhandara) Ltd.

(v) 15,154,734 Ashoka Highways (Durg) Ltd.

(vi) 86,792 Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.

(Vii) 295,000 Ashoka Infraways Pvt. Ltd.

(b) Preference Shares of:

(i) 27,502 Ashoka Sambalpur Bargarh Tollway Pvt. Ltd.-1% Convertible of Rs.100 each

10 The company has registered under Employees Provident Fund Act for employees of the company as well as employees of certain group companies.

11 Balance of Debtors, Creditors, Advances, Deposits, etc. are subject to confirmation and reconciliation if any.

12 Previous year figures have been regrouped/ rearranged wherever necessary, to make them comparable with current year figures.

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