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Notes to Accounts of ITD Cementation India Ltd.

Dec 31, 2014

1. CORPORATE INFORMATION

ITD Cementation India Limited (''ITD Cem'' or ''the Company'') was incorporated in 1978 and is engaged in construction of a wide variety of structures like maritime structures, mass rapid transport systems (MRTS), dams & tunnels, airports, highways, bridges & flyovers, buildings and other foundations and specialist engineering work. The activities of the Company comprise only one business segment viz Construction.

2. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed, if any by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend.

During the year; Rs. Nil (31 December 2013 : Rs. 1.00) per share dividend recognised as distributions to equity share holders.

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, if any The distribution will be in proportion to the number of equity shares held by the shareholders.

3. a) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding 31 December 2014

The Company has not issued any bonus shares nor has there been any buy back of shares during five years immediately preceding 31 December 2014.

b) Out of the total issued capital, 2,526 (31 December 2013 : 2,526) equity shares of Rs. 10 each have been kept in abeyance pending final settlement of rights issues.

c) The Company has issued and allotted 4,000,000 equity shares of Rs. 10 each fully paid for cash at a premium of Rs. 350 per equity share to Qualified Institutions Buyers ("QIB") aggregating to Rs. 14,400 lakhs.

Expenses in relation to shares issued to QIB aggregating to Rs. 400.94 lakhs debited to Securities premium account.

4. Long-term borrowings

Rupee term loan - from bank (secured)

Term loan obtained from Vijaya Bank carries interest rate of 12.25 percent per annum and repayable in 3 monthly installments of starting from November 2015. This loan is secured by hypothecation of Kolkata area depot land.

Rupee term loans from others (secured)

Loan obtained from Indiabulls Housing Finance Limited for purchase of office premises (Kolkata) carries an interest rate of 13.50 percent per annum and is repayable in 84 monthly installments commenced from April 2013. This loan is secured by hypothecation of the office purchased out of this loan.

Loan obtained from Tata Capital Financial Services Limited carries an interest rate of 13 percent per annum and is repayable in 24 monthly installments commenced from April 2014. This loan is secured by first and exclusive charge on specific equipments financed by the institution.

Plant loans from financial institution (secured)

Loans obtained from Tata Capital Limited for purchase of construction equipment carry interest rate ranging between 13.01 to 13.25 percent per annum and are repayable in 57 to 84 monthly installments. These loans are secured by first and exclusive charge on specific equipments financed by the institution.

Vehicle loans from bank (secured)

Loan obtained from AXIS Bank for purchase of vehicles carry interest rate ranging between 10 to 10.5 percent per annum and are repayable in 60 monthly installments. These loans are secured by hypothecation of the vehicles purchased out of these loans.

Term loan - from financial institution (unsecured)

Term loan obtained from SREI Equipment Finance Private Limited carries interest rate of 11.56 percent per annum. These loans are repayable in 29 monthly installments commenced from September 2012.

5. Working capital loan from banks

Working capital loans availed from consortium bankers carries interest rates ranging between 11.7 to 15.7 percent per annum and are secured by first pari passu charge on the current assets and movable plant and machinery other than those charged in favour of Tata Capital Limited. These facilities are repayable on demand.

Buyer''s credit

Buyer credit loans obtained from bankers carries interest of LIBOR plus 1.5 to 3.5 percent per annum (quarterly rests). These loans are secured by first pari passu charge on the current assets and movable plant and machinery other than those charged in favour ofTata Capital Limited.

* Face value of Rs. 10 each, unless otherwise stated

** The Company has 80% share in ITD Cemindia JV, 49% share in ITD-ITDCem JV 40% share in ITD-ITDCem JV (Consortium of ITD-ITD Cementation) and 95% share in ITD Cem-Maytas Consortium. These joint ventures are jointly controlled entities formed in India. The extent of investment in these unincorporated joint ventures represents entirely the Company''s share of profits /(losses) after tax in the joint ventures from inception to date, as reduced by the distribution of profit by the joint ventures, if any

6. Contingent Liabilities

Year ended Year ended 31st December 31st December 2014 2013 a) Guarantees given by banks in respect of contracting commitments in the normal course 23,503.42 27,117.78

of business

b) Corporate Guarantee given to bank on behalf of Joint Ventures 51,000.00 51,000.00

c) The Company has a number of claims on customers for price escalation and / or variation in contract work. 12,016.77 12,244.58 In certain cases which are currently under arbitration, the customers have raised counter-claims. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly no provision is considered necessary in respect of these counter claims.

d) Sales Tax matters pending in appeals 2,721.46 3,469.69

e) Income Tax matters pending in appeal 1,165.44 970.68

f) Excise matter pending in appeal 52.00 52.00

Future cash outflows in respect of above matters are determinable only on receipt ofjudgments/decisions pending at various forums/authorities. The management does not expect these claims to succeed and accordingly, no provision for the contingent liability has been recognized in the financial statements.

7. The gratuity fund is invested in a Group Gratuity policy invested with the Life Insurance Corporation of India and Birla Sunlife Insurance. The fair value of plan assets with Life Insurance Corporation of India and Birla Sunlife Insurance as at 31 December 2014 are Rs. 0.15 lakhs (31 December 2013 - Rs. 0.13 lakhs) and Rs. 1,367.06 lakhs (31 December 2013 - Rs. 1,225.54 lakhs) respectively The management understands that the assets in these portfolios are well diversified and as such the long term return thereon is expected to be higher than the rate of return on Government Bonds.

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

The Guidance Note on implementing AS I 5,"Employee Benefits", issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India states that Provident Fund set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be Defined Benefit Plan in accordance with the requirements of paragraph 26(b) of AS 15. Pursuant to the Guidance Note, the liability in respect of the shortfall of interest earnings of the fund is Nil as determined on the basis of an actuarial valuation carried out as at 31 December 2014. As per the actuarial valuation report, the interest shortfall liability being "Other Long-term Employee Benefit", detailed disclosures are not required The Company''s expense for the superannuation, a defined contribution plan aggregates Rs. 337.36 lakhs during the year (31 December 2013 - Rs. 3I5.90 lakhs).

The Company''s expense for the provident fund aggregates Rs. 798.78 lakhs during the year ended (31 December 2013 - Rs. 760.93 lakhs)

The liability for leave entitlement and compensated absences as at year end is Rs. 670.I5 lakhs (31 December 2013 : Rs. 513.I0 lakhs).

8. Segment reporting

The activities of the Company comprises of only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence the Company''s financial statements also represents the segmental information.

9. Trade receivables and Unbilled Work-in-progress as at December 31,2014 include amounts aggregating Rs. 2,655 Lakhs and Rs. 1,584 Lakhs respectively which have been outstanding for a substantial period of time. The Company has been actively negotiating for speedy recovery of the balance receivables. In view thereof, management is reasonably confident of their recovery

10. (a) Trade receivables as at 31 December 2014 representing variation claims and interim work bills recognized by the Company aggregating Rs. 6,842 lakhs (31 December 2013 : Rs. 6,849 lakhs). These claims are presently under various stage of litigations. Considering favorable arbitration awards, claims under consideration at various forums, past experience of the Company and based on the legal opinion received, the management is reasonably confident of recovery of these amounts and are expected to be realised within next twelve months..

(b) Trade receivables as at 31 December 2014 include Rs. 696 lakhs (31 December 2013 : Rs. 1,140 lakhs) relating to price escalation claims which are disputed by the customer. The Company has received an arbitration award in its favour which has subsequently been upheld by the High Court. The customer has challenged this High Court order However, based on the above arbitration award, High Court order and legal opinion, management is reasonably confident of recovery of these amounts and are expected to be realised within next twelve months.

(c) Long term trade receivables as at 31 December 2014 include variation claims of Rs. 309 lakhs (Trade receivables as at 31 December 2013 : Rs. 309 lakhs) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the District Court. The customer has challenged this Court Order However based on the above arbitration award, Court Order and legal opinion, management is reasonably confident of recovery of these amounts.

(d) Long term trade receivables and unbilled work-in-progress as at 31 December 2014 include Rs. 1,140 lakhs (Trade receivables as at 31 December 2013 - Rs. 1,140 lakhs ) and Rs. 2,756 lakhs (31 December 2013 - Rs. 2,756 lakhs) respectively in respect of a contract which has been rescinded by the Company and long term trade receivable and unbilled work-in-progress as at 31 December 2014 include Rs. 1,414 lakhs (Trade receivables as at 31 December 2013 : Rs. 689 lakhs) and Rs. 5,922 lakhs (31 December 2013 - Rs. 5,922 lakhs) respectively in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; for which the Company has also issued guarantees aggregating Rs. 1,497 lakhs (31 December 2013 - Rs. 2,227 lakhs). The Company has made claims against the customer to recover these amounts and has initiated legal action. Based upon legal opinion received, management is reasonably confident of recovery of these amounts of long term trade receivable and unbilled work-in-progress and consequently no changes have been made to the values and classification of these amounts in the financial statements.

(e) Trade receivables and unbilled work in progress as at 31 December 2014 includes Rs. 983 lakhs (31 December 2013 - Rs. 972 lakhs) and Rs. 16,789 lakhs (31 December 2013 - Rs. 16,829 lakhs) respectively in respect of certain road contracts which are executed by the Company The Company has made claims on the customer for recovery of these amounts. Based on the contract terms and legal opinion obtained, the management is reasonably confident of recovery of these amounts and are expected to be realised within next twelve months.

11. Short term Loans and advances as at 31 December 2014 include Rs. 6,819 lakhs on account of advances to ITD Cemindia JV Company''s joint venture. These amounts will be refunded by the joint venture on receipt of money from its customerThe joint venture had recognized various claims during earlier period based on the terms and conditions implicit in the contract, which are presently under various stage of litigations. Considering favorable arbitration award, pending claims at various forums and based on independent legal opinion, management is reasonably confident of recovery of these advances.

12. Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31 December 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company There is no interest paid or payable during the year

13. Operating lease

a) The Company has taken various residential/commercial premises and construction equipment on cancellable operating lease.These lease agreements are normally renewed on expiry Rental expenses in the statement of profit and loss for the year includes lease payments towards premises Rs. 1,472.70 lakhs (31 December 2013 - Rs. 1,346.31 lakhs).

These leases have no escalation clauses.

Rental expenses in the statement of profit and loss for the year includes Rs. 640.89 lakhs (31 December 2013 - Rs. 627.90 lakhs) towards such non-cancellable leases.

b) General descriptions of non-cancellable lease terms :

* Lease rentals are charged on the basis of agreed terms.

* Assets are taken on lease over a period of 3-5 years.

* The Company did not sublease any of its assets and hence did not receive any sub lease payments during the current or previous year.

14. Company has unabsorbed depreciation and business loss during the year which is available for set off against future taxable income under the Income Tax Act. The Company has recognized deferred tax asset on such unabsorbed depreciation and business loss amounting Rs. 6,029 lakhs on the basis of profitable non-cancellable binding contracts in hand. Management believes that the profitable non-cancellable binding contracts in hand satisfies the test of virtual certainty with convincing evidence as required by Accounting Standard (AS) - 22 on Accounting for taxes on income.

15. The tax year for the Company being the year ending 31 March, the provision for taxation for the year is the aggregate of the provision made for the three months ended 31 March 2014 and the provision based on the figures for the remaining nine months up to 31 December 2014, the ultimate tax liability of which will be determined on the basis of the figures for the period 1 April 2014 to 31 March 2015.

16. Previous year figures have been regrouped or reclassified, to conform to the current year''s presentation wherever considered necessary


Dec 31, 2013

I. Nature of Operations

ITD Cementation India Limited (''ITD Cem'' or ''the Company'') was incorporated in 1978 and is engaged in construction of a wide variety of structures like maritime structures, mass rapid transport systems (MRTS), dams & tunnels, airports, highways, bridges & flyovers and other foundations and specialist engineering work. The activities of the Company comprise only one business segment viz Construction.

External commercial borrowings (Buyer''s credit) :

Buyer credit loans obtained from bankers carries interest of LIBOR plus 1.5 to 3.5 percent per annum (quarterly rests). These loans are secured by first pari passu charge on the current assets and movable plant and machinery other than those charged in favor of Tata Capital Limited.

Year ended Year ended Particulars 31st December 31st December

2013 2012

1 Contingent Liabilities

a) Guarantees given by banks in respect of contracting commitments

in the normal course of business 27,117.78 31,985.67

b) Corporate Guarantee given to bank on behalf of Joint Ventures 51,000.00 44,800.00

c) The Company has a number of claims on customers for price escalation and / or variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly no provision is considered necessary in respect of these counter claims. 12,244.58 21,044.14

d) Sales Tax matters pending in appeals 3,469.69 2,090.95

e) Income Tax matters pending in appeal 970.68 1,152.39

f) Excise matter pending in appeal 52.00 52.00

g) Subsequent to the year end, a Client of the Company has, pursuant to its contract with the Company for execution of work, invoked Bank Guarantees provided to the Client by the Company''s banks. Banks have made payments to the Client aggregating to Rs. 9,200 lakh. The Company is currently in dialogue with the Client to resolve the matter amicably and the Company has reasons to believe that the matter will be favourably resolved.

The gratuity fund is invested in a Group Gratuity policy invested with the Life Insurance Corporation and Birla Sunlife Insurance. The fair value of plan assets with Life Insurance Corporation and Birla Sunlife Insurance as at 31st December 2013 are Rs. 0.13 lakh (31st December 2012 - Rs. 0.13 lakh) and Rs. 1,225.54 lakh (31st December 2012 - Rs. 1,216.71 lakh) respectively. The management understands that the assets in these portfolios are well diversified and as such the long term return thereon is expected to be higher than the rate of return on Government Bonds.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

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

The Guidance Note on implementing AS 15,"Employee Benefits", issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India states that Provident Fund set up by employers that guarantee a specified rate of return and which require interest shortfall to be met by the employer would be Defined Benefit Plan in accordance with the requirements of paragraph 26(b) of AS 15. Pursuant to the Guidance Note, the liability in respect of the shortfall of interest earnings of the fund is Nil as determined on the basis of an actuarial valuation carried out as at 31st December, 2013. As per the actuarial valuation report, the interest shortfall liability being "Other Long-term Employee Benefit", detailed disclosures are not required.

The Company''s expense for the superannuation, a defined contribution plan aggregates Rs. 315.90 lakh during the year (31st December 2012 - Rs. 287.24 lakh) .

The Company''s expense for the provident fund aggregates Rs. 760.93 lakh during the year ended (31st December 2012 - Rs. 687.17 lakh)

The liability for leave entitlement and compensated absences as at year end is Rs. 513.10 lakh (31st December 2012 : Rs. 601.42 lakh).

2 Segment reporting

The activities of the Company comprises of only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence the Company''s financial statements also represents the segmental information.

3. Related Party Disclosures :

a. Names of related parties and description of relationship

A. Enterprise where control exists i) Holding Company

Italian-Thai Development Public Company Limited ii) Subsidiary Company

ITD Cementation Projects India Limited

B. Other related parties i) Associate

AVR Infra Private Limited ii) Joint Ventures (unincorporated) ITD Cemindia JV ITD - ITD Cem JV

ITD - ITDCem JV (Consortium of ITD - ITD Cementation) ITD-Cem Maytas Consortium

iii) Fellow subsidiary

Aquathai Co., Ltd. iv) Key management personnel (KMP)

Mr. Adun Saraban – Managing Director

Mr. S. Ramnath – Chief Financial Officer

Mr. R C. Daga - Company Secretary

4 a. Trade receivables as at 31st December 2013 include variation claims recognised by the Company aggregating Rs. 2,769 lakh (31st December 2012 : Rs. 3,278 lakh) which are disputed by the customer. Out of this claims amounting to Rs. 2,258 lakh (31st December 2012: Rs. 2,346 lakh) are a subject matter of arbitration. The Company has received arbitration award in its favor in respect of the balance amount of Rs. 511 lakh (31st December 2012 : Rs. 932 lakh) which have since been challenged by the customer. Based on the legal opinion from Company''s counsel in the matter, the management is reasonably confident of recovery of these amounts.

b. Trade receivables as at 31st December 2013 include Rs. 4,080 lakh (31st December 2012 : Rs. 3,384 lakh) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification. The management is reasonably confident of the certification and recovery of the same progressively on these contracts based on past experience of the Company, assessment of work done and the fact that these amounts are not disputed by the customer and based on the legal opinion received on this matter.

c. Trade receivables as at 31st December 2013 include Rs. 1,140 lakh (31st December 2012 : Rs. 1,140 lakh) relating to price escalation claims which are disputed by the customer. The Company has received an arbitration award in its favour which has subsequently been upheld by the High Court. The customer has challenged this High Court order. However, based on the above arbitration award, High Court order and legal opinion, management is reasonably confident of recovery of these amounts.

d. Trade receivables as at 31st December 2013 include variation claims of Rs. 309 lakh (31st December 2012 : Rs. 309 lakh) for which the Company had received an arbitration award in its favor which has subsequently been upheld by the District Court. The customer has challenged this Court Order. However, based on the above arbitration award, Court Order and legal opinion, management is reasonably confident of recovery of these amounts.

e. Trade receivables and unbilled work-in-progress as at 31st December 2013 include Rs. 1,140 lakh (31st December 2012 - Rs. 616 lakh ) and Rs. 2,756 lakh (31st December 2012 - Rs. 2,757 lakh) respectively, in respect of a contract which has been rescinded by the Company and trade receivable and unbilled work-in-progress as at 31st December 2013 include Rs. 689 lakh (31st December 2012 : Nil) and Rs. 5,922 lakh (31st December 2012 - Rs. 5,929 lakh) respectively, in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; for which the Company has also issued guarantees aggregating Rs. 2,227 lakh (31st December 2012 - Rs. 2,227 lakh). The Company has made claims against the customer to recover these amounts and has initiated legal action. Based upon legal opinion received, management is reasonably confident of recovery of these amounts of trade receivable and unbilled work-in-progress and consequently no changes have been made to the values and classification of these amounts in the financial statements.

f. Trade receivables and unbilled work in progress as at 31st December 2013 includes Rs. 972 lakh (31st December 2012 - Rs. 1,004 lakh) and Rs. 16,829 lakh (31st December 2012 - Rs. 17,222 lakh) respectively in respect of certain road contracts which are currently being executed by the Company. The customer has already granted two extensions of time and the Company''s request for further extension is under consideration. The Company has made claims on the customer for recovery of these amounts. Based on the contract terms and legal opinion obtained, the management is reasonably confident of recovery of these amounts.

5 Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st December 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the statutory auditors.

6 Operating lease

a. The Company has taken various residential/commercial premises and construction equipment on cancellable operating lease. These lease agreements are normally renewed on expiry. Rental expenses in the statement of profit and loss for the year includes lease payments towards premises Rs. 1,778.31 lakh (31st December 2012 - Rs. 1,765.63 lakh). Plant hire expense relates to the lease payment for construction equipment.

These leases have no escalation clauses.

Rental expenses in the statement of profit and loss for the year includes Rs. 195.90 lakh (31st December 2012 -,Rs. 129.09 lakh) towards such non-cancellable leases.

c. General descriptions of non-cancellable lease terms :

- Lease rentals are charged on the basis of agreed terms.

- Assets are taken on lease over a period of 3-5 years.

- The Company did not sublease any of its assets and hence did not receive any sub lease payments during the current or previous year.

7. Previous year figures have been regrouped or reclassified, to conform to the current year''s presentation wherever considered necessary.


Dec 31, 2012

I. Nature of Operations

ITD Cementation India Limited (''ITD Cem'' or ''the Company'') was incorporated in 1978 and is engaged in construction of a wide variety of structures like maritime structures, mass rapid transport systems (MRTS), dams & tunnels, airports, highways, bridges & flyovers and other foundations and specialist engineering work. The activities of the Company comprise only one business segment viz Construction.

a) Terms/rights attached to equity shares

The Company has only one class of equity shares having at par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend.

During the year, the amount of per share dividend recognised as distributions to equity share holders was Rs.2.00 (31 December 2011 : Rs.2.00)

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, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.

b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceeding 31 December 2012

The Company has not issued any bonus shares nor has there been any buy back of shares during five years immediately preceeding 31 December 2012.

c) Out of the total issued capital, 2,526 (31 December 2011 : 2,526) equity shares of Rs.10 each have been kept in abeyance pending final settlement of rights issues.

Plant loan from financial institution (Secured)

Loan obtained from Tata Capital Limited for purchase of vehicles and construction equipment which carries interest rate ranging between 12.75 to 13.75 percent per annum and are repayble in 36 to 60 monthly installments. These loans are secured by first and exclusive charge on vehicles and specific equipment financed by the Institution. Vehicle loan from bank (Secured)

Loan obtained from HDFC Bank for purchase of vehicles which carries interest rate 12 percent approx per annum and are repayble in 60 monthly installments. These loans are secured by hypothecation of the vehicle purchased out of this loan.

Term loan - from bank (Unsecured)

Term loan obtained from Vijaya Bank carries interest rate of base rate plus 2.50 percent per annum. These loans are repayable in six equal monthly installments commencing from January 2013.

Term loan - from financial institution (Unsecured)

Term loan obtained from SREI Equipment Finance Private Limited carries interest rate of 11.56 percent per annum. These loans are repayable in 29 monthly installments commencing from September 15, 2012.

The information on the allocation of the gratuity fund into major asset classes and the expected return on each major class is not readily available. However, the gratuity fund is invested in a Group Gratuity policy invested with the Life Insurance Corporation and Birla Sunlife Insurance. The fair value of plan assets with Life Insurance Corporation and Birla Sunlife Insurance at 31 December 2012 areRs.0.13 lakhs (31 December 2011 :Rs.0.06 lakhs) and Rs.1,216.71 lakhs (31 December 2011 :Rs.1,081.08 lakhs) respectively. The management understands that the assets in these portfolios are well diversified and as such the long term return thereon is expected to be higher than the rate of return on Government Bonds.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

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

In respect of provident funds, the Guidance issued by the Accounting Standards Board (''ASB'') of ICAI on implementing AS 15 states that provident funds trust is set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as a defined benefit plan. The Company''s provident fund does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of the Guidance Note from the Actuarial Society of India, the Company''s actuary has expressed his inability to reliably measure the same.

The Company''s expense for the superannuation, a defined contribution plan aggregates Rs.287.24 lakhs during the year ended 31 December 2012 (31 December 2011 :Rs.233.43 lakhs)

The Company''s expense for the provident fund aggregates Rs.687.17 lakhs during the year ended 31 December 2012 (31 December 2011 :Rs.593.95 lakhs)

1 Segment reporting

The activities of the Company comprises of only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence the Company''s financial statements also represents the segmental information.

2 Related Party Disclosures :

a) Names of related parties and description of relationship A Enterprise where control exists

i) Holding Company

Italian-Thai Development Public Company Limited

ii) Subsidiary Company

ITD Cementation Projects India Limited

B Other related parties

i) Associate

AVR Infra Private Limited

ii) Joint Ventures (unincorporated)

ITD Cemindia JV

ITD - ITD Cem JV

ITD - ITDCem JV (Consortium of ITD - ITD Cementation)

iii) Key management personnel (KMP)

Mr. Adun Saraban - Managing Director

Mr. S. Ramnath - Chief Financial Officer

Mr. P. B. Patwardhan - Chief Financial Officer (resigned on 30 April 2011)

3 Trade receivables at 31 December 2012 include variation claims recognised by the Company aggregating Rs.3,278 lakhs (31 December 2011 : Rs.3,455 lakhs) which are disputed by the customer. Out of this claims amounting to Rs.2,346 lakhs (31 December 2011 : Rs.2,346 lakhs) are a subject matter of arbitration. The Company has received arbitration award in its favour in respect of the balance amount ofRs.932 lakhs (31 December 2011 : Rs.1,109 lakhs) which have since been challenged by the customer. Considering the legal opinion from Company''s counsel in the matter, the management is reasonably confident of recovery of these amounts.

4 Trade receivables as at 31 December 2012 include Rs. 3,384 lakhs (31 December 2011 : Rs.3,384 lakhs) representing interim work bills for work carried out by the Company which have not been certified by customers beyond normal periods of certification. The management is reasonably confident of the certification and recovery of the same progressively on these contracts based on past experience of the Company, assessment of work done and the fact that these amounts are not disputed by the customer and based on the legal opinion received on this matter.

5 Trade receivables at 31 December 2012 include Rs.1,140 lakhs (31 December 2011 : Rs.1,140 lakhs) relating to price escalation claims which are disputed by the customer. The Company has received favourable verdict from Dispute Redressal Board and also thereafter in Arbitration in respect of these claims. The Customer has appealed against the Arbitration Award. Management is reasonably confident of recovery of this amount based on the above and independent legal opinion from eminent legal counsel in the matter.

6 Trade receivables at 31 December 2012 include variation claims of Rs.309 lakhs (31 December 2011 : Rs.309 lakhs) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the District Court. The customer has challenged this Court Order. However, based on the above arbitration award, Court Order and legal opinion, management is reasonably confident of recovery of these amounts.

7 Trade receivables and Unbilled work-in-progress at 31 December 2012 include Rs.616 lakhs (31 December 2011 : Nil ) and Rs.2,757 lakhs (31 December 2011 : Rs.2,757 lakhs), in respect of a contract which has been rescinded by the Company and Rs.5,929 lakhs (31 December 2011 : Rs.5,929 lakhs) in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs.2,227 lakhs (31 December 2011 : Rs.2,227 lakhs). The Company has made claims against the customer to recover these amounts and has initiated legal action. Based upon legal opinion received, management is reasonably confident of recovery of these amounts of work in progress and consequently no changes have been made to the values and classification of these amounts in the financial statements.

8 Trade receivables and Unbilled work in progress as at 31 December 2012 includes Rs.1,004 lakhs and Rs.17,222 lakhs, respectively in respect of certain road contracts which are currently being executed by the Company. The customer has already granted two extensions of time and the Company''s request for further extension is under consideration. These projects are yet to be taken over by the customer. The Company has made claims on the customer for recovery of these amounts. Considering the contractual tenability and legal opinion obtained, the management is reasonably confident of recovery of these amounts.

9 Micro, Small and Medium Enterprises

There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at December 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the statutory auditors.

10 Operating lease

a) The Company has taken various residential/commercial premises and construction equipment on cancellable operating lease. These lease agreements are normally renewed on expiry. Rental expenses in the statement of profit and loss for the year includes lease payments towards premises Rs.1,765.63 lakhs (31 December 2011 -Rs.1,596.14 lakhs). Plant hire expense relates to the lease payment for construction equipments.

b) The Company, in addition to above, has taken construction equipments on leases (non-cancellable operating leases). The future minimum lease payments in respect of which as at 31 December 2012 are as follows:

These leases have no escalation clauses.

Rental expenses in the statement of profit and loss for the year includes Rs.129.09 lakhs (31 December 2011 : Rs.499.09 lakhs) towards such non-cancellable leases.

c) General descriptions of non-cancellable lease terms :

Lease rentals are charged on the basis of agreed terms.

Assets are taken on lease over a period of 3-5 years.

The Company did not sublease any of its assets and hence did not receive any sub lease payments during the current or previous year.

11 The Company has changed the basis of measurement of percentage of completion from ''physical proportion of the contract work'' to ''proportion of contract costs incurred for the work performed to date to the estimated total contract costs''. Consequent to the change in method, turnover is lower by Rs.713 lakhs and profit before tax is higher by Rs.80 lakhs for the year ended 31 December 2012.

12 Further in respect of existing contracts, the Company has adopted a policy of recording trade receivables only to the extent these are certified by the customer. Consequent to this change, uncertified receivables as of December 31, 2011 amounting toRs.25,391 lakhs have been reclassified from trade receivables to unbilled work in progress with respect to running contracts.

13 During the year cheque was stolen and fraudulently encashed from Company''s bank account for a sum of Rs.54.24 lakhs and the same was subsequently recovered by the Company. Investigation to apprehend the culprits involved in the incident is in process.

14 Prior year comparatives

The financial statements for the year ended 31 December 2011 has been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 December 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year''s classification.


Dec 31, 2011

(i) SEGMENT REPORTING

The activities of the Company comprise only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence the Company's financial statements also represents the segmental information

(ii) RELATED PARTY TRANSACTIONS

(a) Name of related parties where control exists irrespective of whether transactions have occurred or not.

Italian-Thai Development Public Company Limited - Holding Company

ITD Cementation Projects India Limited - Wholly Owned Subsidiary Company

(iii) (a) Sundry debtors at December 31, 2011 include Rs. 1,140 lakhs (December 31, 2010 - Rs. 1,140 lakhs) relating to price escalation claims which are disputed by the customer. The Company has received favourable verdict from Dispute Redressal Board and also thereafter in Arbitration in respect of these claims. The Customer has appealed against the Arbitration Award. Management is reasonably confident of recovery of this amount based on the above and independent legal advice from eminent legal counsel in the matter. These contracts have been completed and hence during the year ended December 31, 2011, the Company has not recognised any turnover or escalation claims on these road contracts.

(b) Sundry debtors at December 31, 2011 include variation claims of Rs. 309 lakhs (December 31, 2010 - Rs. 309 lakhs) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court. The Customer has challenged this Court Order. However on the basis of above arbitration award and Court Order management is reasonably confident of recovering of these amounts.

(iv) Work-in-progress at December 31, 2011 include Rs. 2,757 lakhs (December 31, 2010 - Rs. 2,757 lakhs), in respect of a contract which has been rescinded by the Company and Rs. 5,929 lakhs (Decemebr 31, 2010 - Rs. 5,929 lakhs) in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs (Decemebr 31, 2010 - Rs. 616 lakhs) and Rs. 2,227 lakhs (Decemebr 31, 2010 - Rs. 2,227 lakhs) for these contracts respectively. The Company has made claims against the customer to recover these amounts and intends to pursue these matters, if necessary, through legal action. Based upon legal advice received, management is reasonably confident of recovery of these amounts of work in progress and consequently no changes have been made to the values and classification of these amounts in the financial statements.

(v) Sundry debtors at December 31, 2011 include variation claims of Rs. 3,455 lakhs (December 31, 2010 - Rs. 3,910 lakhs) recognised up to December 31, 2011, which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (December 31, 2010 - Rs. 2,346 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,109 lakhs (December 31, 2010 - Rs. 1,564 lakhs) which have since been challenged by the customer (December 31, 2010 - Rs. 1,109 lakhs). During the year ended December 31, 2011, no variation claim was recognised by the Company. Considering the contractual tenability and legal advice from Company's counsel in the matter, the management is reasonably confident of recovery of the same.

(vi) Sundry debtors at December 31, 2011 include Rs. 3,384 lakhs (December 31, 2010 - Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods Offi certification provided in the respective contracts. The management is reasonably confident of the certification and recovery of the same progressively on these contracts based on past experience of the Company, assessment of work done and the fact that these amounts are not disputed by the customer.

(vii) As per the information available with the Company, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal or interest.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(viii) OPERATING LEASES

a. The Company has taken various residential/commercial premises and construction equipments on cancelable operating leases. These lease agreements are normally renewed on expiry. Rental expenses in the profit and loss account for the year includes lease payments towards premises of Rs. 1,596.13 lakhs (2010 - Rs. 1,077.54 lakhs). Plant hire expense relates to the lease payments for construction equipments.

b. The Company, in addition to the above, has taken construction equipments on lease (non-cancelable operating leases), the future minimum lease payments in respect of which at 31 December 2011 are as follows:

These leases have no escalation clauses.

Rental expenses in the statement of profit and loss for the year includes Rs. 499.09 lakhs (2010 - Rs. 1,027.04 lakhs) towards such leases.

c. General descriptions of non-cancelable lease terms :

i. Lease rentals are charged on the basis of agreed terms.

ii. Assets are taken on lease over a period of 3-5 years.

iii The Company did not sublease any of its assets and hence did not receive any sub lease payments during the current or previous year.


Dec 31, 2010

2010 2009

(i) CONTINGENT LIABILITIES

a) Guarantees given by banks in respect of normal contracting commitments given in the normal course of business. 17,767.28 17,230.27

b) Corporate Guarantee given to bank on behalf of Joint Venture. - 1,500.00

c) The Company has a number of claims on customers for price escalation and / or variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly no provision is considered necessary in respect of these counterclaims. 21,058.14 21,074.14

d) Sales tax matters pending in appeals 505.05 310.74

e) Income tax matters pending in appeals 2,262.89 2,276.48

f) Excise matter pending in appeal 52.00 52.00

(ii) SEGMENT REPORTING

The activities of the Company comprise only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence the Companys financial statements also represents the segmental information.

(iii) RELATED PARTYTRANSACTIONS

(a) Name of related parties where control exists irrespective of whether transactions have occurred or not.

Italian-Thai Development Public Company Limited - Holding Company

ITD Cementation Projects India Limited - Wholly Owned Subsidiary Company

(b) Other entities with whom transactions have taken place

Nameof Related Parties Nature of Relationship

ITD Cemindia JV Joint Venture

ITD - ITDCem JV Joint Venture

ITD - ITDCem JV (Consortium of ITD - ITD Cementation) Joint Venture

AVR Infra Pvt. Ltd. Associate

(iv) (a) Sundry debtors at December 31, 2010 include Rs. 1,140 lakhs (December 31, 2009 - Rs. 1,140 lakhs) relating to price escalation claims which are disputed by the customer. The Company has received favourable verdict from Dispute Redressal Board and also thereafter in Arbitration in respect of these claims. The Customer has appealed against the Arbitration Award. Management is reasonably confident of recovery of this amount based on the above and independent legal advice from eminent legal counsel in the matter. These contracts have been completed and hence during the year ended December 31, 2010, the Company has not recognised any turnover or escalation claims on these road contracts.

(b) Sundry debtors at December 31, 2010 include variation claims of Rs. 1,515 lakhs (December 31, 2009 - Rs. 1,515 lakhs) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court.The Customer has challenged this Court Order. However on the basis of above arbitration award and Court Order management is reasonably confident of recovering of these amounts.

(c) Sundry debtors at December 31,2010 include variation claims of Rs. 309 lakhs (December 31,2009 - Rs. 309 lakhs) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court. The Customer has challenged this Court Order. However on the basis of above arbitration award and Court Order management is reasonably confident of recovering of these amounts.

(v) Work-in-progress at December 31, 2010 include Rs. 1,812 lakhs, in respect of a contract which has been rescinded by the Company and Rs. 2,174 lakhs in respect of another contract where the Company has received a notice from the customer withdrawing from the Company the balance works to be executed under the contract; besides the Company has also issued guarantees aggregating Rs. 616 lakhs and Rs. 2,227 lakhs. The Company intends to pursue these matters, if necessary, through legal action. Based upon legal/expert advice received, management is reasonably confident of recovery of these amounts of work in progress.

(vi) Sundry debtors at December 31, 2010 include variation claims of Rs. 3,910 lakhs (December 31, 2009 - Rs. 5,042 lakhs) recognised upto December 31,2010, which are disputed by the customer. Out of this, claims amounting to Rs. 2,346 lakhs (December 31, 2009 - Rs. 2,801 lakhs) are a subject matter of arbitration. The Company has received arbitration awards in its favour in respect of the balance amount of Rs. 1,564 lakhs (December 31, 2009 - Rs. 2,241 lakhs) of which, an amount of Rs. 1,109 lakhs (December 31, 2009- Rs. 2,241 lakhs) have since been challenged by the customer. During the year ended December 31, 2010, no variation claim was recognised by the Company. Considering the contractual tenability and legal advice from Companys counsel in the matter, the management is reasonably confident of recovery of the same.

(vii) Sundry debtors at December 31, 2010 include Rs 3,384 lakhs (December 31, 2009 - Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification provided in the respective contracts. The management is reasonably confident of the certification and recovery of the same progressively on these contracts based on past experience of the Company, assessment of work done and the fact that these amounts are not disputed by the customer.

(viii) As per the information available with the Company, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal or interest.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.This has been relied upon by the auditors.

(ix) OPERATING LEASES

a The Company has taken various residential/commercial premises and construction equipments on cancellable operating lease. These lease agreements are normally renewed on expiry. Rental expenses in the profit and loss account for the year includes lease payments towards premises of Rs. 1,077.54 lakhs (2009 - Rs. 938.00 lakhs). Plant hire expense relates to the lease payment for construction equipments.

c. General descriptions of non-cancellable lease terms

i Lease rentals are charged on the basis of agreed terms.

ii. Assets are taken on lease over a period of 3-5 years.

iii. The Company did not sub lease any of its assets and hence did not receive any sub leases payments during the current or previous year.

(x) Prior year figures have been reclassed wherever necessary to confirm to the current years presentation.


Dec 31, 2009

2009 2008

1. CONTINGENT LIABILITIES

(a) Guarantees given by banks in respect of normal contracting commitments given in the normal course of business 23,580.90 20,277.26

(b) Corporate Guarantee given to bank on behalf of Joint Venture 1,500.00 11,000.00

(c) The Company has a number of claims on customers for price escalation and/or variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly no provision is considered necessary in respect of these counter claims 21,074.14 15,816.22

(d) Sales tax matters pending in appeals 310.74 138.50

(e) Service tax matters under dispute -- 173.50

(f) Income tax matters pending in appeal 2,276.48 2,273.81

(g) Excise matter pending in appeal 52.00 52.00

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

In respect of provident funds, the Guidance issued by the Accounting Standards Board (ASB) on implementing AS 15 states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as a defined benefit plan. The Companys provident fund does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of the Guidance Note from the Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the same.

The companys expense for the superannuation, a defined contribution plan aggregates Rs. 141.75 lakhs during the year ended December 31, 2009 (2008 - Rs.105.63 lakhs).

The companys expense for the provident fund aggregates Rs.439.25 lakhs during the year ended December 31, 2009 (2008 - Rs. 386.25 lakhs).

2. SEGMENT REPORTING

The activities of the Company comprises of only one business segment viz Construction. The Company operates in only one geographical segment viz India. Hence, the Companys financial statements also represent the segmental information.

3. RELATED PARTY TRANSACTIONS

(a) Name of related parties where control exists irrespective of whether transactions have occurred or not.

Italian-Thai Development Public Company Limited - Holding Company.

ITD Cementation Projects India Limited - Wholly Owned Subsidiary Company.

(b) Other entities with whom transactions have taken place

Name of Related Parties Nature of Relationship

ITD Cemindia JV Joint Venture

ITD - ITDCem JV Joint Venture

ITD - ITDCem JV (Consortium of ITD - ITD Cementation) Joint Venture

4. The Company has recognised escalation on two road contracts till December 31, 2009 aggregating to Rs. 2,028 lakhs (December 31, 2008 - Rs.2,028 lakhs). Sundry Debtors at December 31, 2009 include Rs. 1,140 lakhs (December 31, 2008-Rs. 1,140 lakhs) out of this amount. These escalation claims were disputed by the customer and the Company has received favourable verdict from Dispute Redressal Board and also thereafter in Arbitration in respect of these claims. The Customer has appealed against the Arbitration Award. As at December 31, 2009 an amount of Rs.1,140 lakhs (December 31, 2008 - Rs. 1,140 lakhs) is still receivable from customer. Management is reasonably confident of recovery of this amount based on the above and independent legal advice from eminent legal counsel in the matter. These contracts have been completed and hence during the year ended December 31, 2009, the Company has not recognised any turnover or escalation claims on these road contracts.

5. The Company has recognized variation claims of Rs. 5,042 lakhs (December 31, 2008 - Rs. 4,182 lakhs) [including Rs. 2,801 lakhs till December 31, 2009 (December 31, 2008 - Rs. 4,026 lakhs) under arbitration], which are also included in the balance of sundry debtors at December 31, 2009. These claims are disputed by the customer. Of these, the Company has received arbitration awards of Rs. 2,241 lakhs (December 31, 2008 - Rs.2,610 lakhs) in its favour which have been challenged by the customer. During the year ended December 31, 2009, no variation claim was recognised by the Company. Considering the contractual tenability and legal advice from Companys counsel in the matter, the management is reasonably confident of recovery of the same.

6. Sundry Debtors as at December 31, 2009 include Rs 3,384 lakhs (December 31, 2008 - Rs. 3,384 lakhs) representing interim work bills for work done which have not been certified by customers beyond normal periods of certification provided in the respective contracts. The management is reasonably confident of the certification and recovery of the same progressively on these contracts based on past experience of the Company, assessment of work done and the fact that these amounts are not disputed by the customer.

7. Sundry Debtors at December 31, 2009, include an amount of Rs. 1,225 lakhs (December 31, 2008 - Rs. 1,225 lakhs) recognized as income in the earlier years. Based on the payment schedule originally agreed with the customer, the above mentioned claim was expected to be received by the Company over a period of time commencing from financial year 2008/2009. No amounts have been received by the Company till date and further rescheduling of the payment which was in progress at December 31, 2008 has not yet been finalised. The readability of this amount of Rs. 1,225 lakhs is dependent upon finalization of the rescheduled payment plan and the customer adhering to the same. The management is in advanced stage of discussion with the client and confident of recovering the amount due.

8. Debtors at December 31,2009 include variation claims of Rs. 1,515 lakhs (including Rs. 554 lakhs recognised as revenue and Rs. 525 lakhs recognised as interest income during the year ended December 31, 2009) for which the Company had received an arbitration award in its favour which has subsequently been upheld by the district court.

9. As per the information available with the Company, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

10. OPERATING LEASES

(a) The Company has taken various residential/commercial premises on cancellable operating lease. These lease agreements are normally renewed on expiry. The cancellable lease payments in the profit and loss account for the year is Rs. 938.00 lakhs (2008 - Rs.821.90 lakhs).

(c) Non-cancellable lease payments recognised in the profit and loss account for the year is Rs.1,034.82 lakhs (2008 -Rs.1,01 3.97 lakhs)

(d) General descriptions of lease terms

(i) Lease rentals are charged on the basis of agreed terms. (ii) Assets are taken on lease over a period of 3-5 years.

11. Remuneration to Auditor does not include Rs. Nil (including Service Tax) (2008 - Rs. 9.04 lakhs) paid to statutory auditors towards fees paid in connection with Rights Issue, which is debited to securities premium account.

12. Prior year figures have been reclassed wherever necessary to confirm to the current years presentation.

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