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Notes to Accounts of IVRCL Ltd.

Mar 31, 2015

1. Corporate Information

The Company is engaged in the business of development and execution of Engineering, Procurement, Construction and Commissioning (EPCC) and Lump Sum Turn Key (LSTK) facilities in various Infrastructure projects such as Water Supply, Roads and Bridges, Townships and Industrial Structures, Power Transmission, etc. for Central/State Governments, other Local Bodies and private sector.

1.2 Terms / Rights attached to Equity Shares

The Company has only one class of equity shares having a face value of Rs. 2 per share and each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation, the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholdings.

1.3 Aggregate number of Equity Shares alloted as fully paid-up for consideration other than cash during 5 years immediately preceding the date of Balance Sheet

The Company had allotted 133,504,929 shares of Rs. 2 each in the year 2009-10 as fully paid bonus shares in the ratio of 1:1 by utilizing Rs. 267.01 million from General Reserve.

1.4 Shareholders holding more than 5% shares of the Company

No shareholder is holding more than 5% shares of the Company during the current year and previous year.

1.5 Details of Shares Reserved for issue under Options

For details of shares reserved for issue under Employee Stock Options (ESOP) plan of the company, Refer Note 46.

As fully described in Note 42, during the year, pursuant to the Corporate Debt Restructuring Scheme (CDR) approved by Empowered Group (CDR EG) vide letter dated June 30, 2014, the CDR lenders have a right to convert restructured debt (including funded interest term loan) into equity shares at the sole discretion and on demand as per the agreed terms in the MRA. In relation to the loans restructured by the CDR lenders a total amount to Rs. 28,877.82 million would qualify for the conversion of 1,184,002,485 shares at the sole discretion of the CDR lenders.

2.1 12.15% Non-Convertible Debentures

2,000 Debentures of Rs. 1,000,000 each issued to Life Insurance Corporation of India during the year 2008-09. The debentures were due for redemption at the end of five years (i.e., December 19, 2013) from the date of allotment. The debentures are secured by way of first pari passu charge over certain specific fixed assets including immovable properties of the Company. IDBI Trusteeship Services Limited, Mumbai were the trustees for the debenture holders in respect of the below non-convertible debentures.

2.2 The Board of Directors of the Company in its meeting held on January 18, 2014 had accorded its approval for restructure of the debts of the Company under Corporate Debt Restructuring (CDR) Mechanism of the Reserve Bank of India. The proposal is only for the company and not for any of its subsidiaries and associates. CDR Empowered Group (CDR EG) in its meeting held on June 28, 2014 has approved the CDR scheme submitted by the Company and issued letter of approval on June 30, 2014. As on March 31, 2015 CDR related documents have been executed and creation of security is in the process. On restructuring, effect of CDR Scheme in the books of account has been given as follows.

2.3 Working Capital Term Loan - I

Irregularity in working capital limits, comprising devolved Letter of Credits (pre and post Cut-off Date {(COD) i.e November 30, 2013} upto December 31, 2014), invoked Bank Guarantees, interchangeability/other irregularity and shortfall in Drawing Power amounting to Rs. 13,175.01 million has been carved out as Working Capital Term Loan - I (WCTL - I). WCTL - I shall be repaid after a moratorium of 25 months from COD in 31 structured quarterly installments, commencing from quarter ending March 31, 2016. WCTL - I carries rate of interest, SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset.

WCTL - I is secured by first pari passu charge on fixed assets excluding the exclusive security given to various lenders (WCTL - I amounting to Rs. 1,946.10 million is further secured by first and exclusive charge on all present and future fixed assets and current assets, except lease rights of the lease hold land of IVRCL TLT Private Limited, a subsidiary of the Company), book debts beyond the cover period and non-current assets excluding retention money and investments. Second pari passu on entire stocks, book-debts upto cover period, unbilled revenue, retention money and any current assets as per audited balance sheet both present and future (also Refer Note 42).

2.4 Working Capital Term Loan - II

Invoked Bank Guarantees from COD to March 31, 2015 amounting to Rs. 3,091.43 million has been carved out as Working Capital Term Loan - II (WCTL - II). WCTL - II shall be repaid after a moratorium of 25 months from Cut-off date in 31 structured quarterly installments, commencing from quarter ending March 31, 2016. WCTL - II carries rate of interest SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset (also Refer Note 42)

WCTL - II is secured by first pari passu charge on entire stocks, book-debts upto cover period, unbilled revenue, retention money and any current assets as per audited balance sheet both present and future. second pari passu charge on fixed assets, book debts beyond the cover period and non-current assets excluding retention money and investments both present and future (also Refer Note No 42)

2.5 Priority Debt

Rs. 749.97 million has been availed out of Rs. 1,750.00 million Priority Debt sanctioned. Priority Debt shall be repaid in 21 structured quarterly installments, commencing from quarter ending March 31, 2016. Priority Debt carries rate of interest, SBI Base Rate plus 2.00% p.a. from cut-off date with annual reset.

Priority Debt is secured by first pari passu charge on fixed assets excluding the exclusive security given to various lenders, book debts beyond the cover period and non-current assets excluding retention money and investments. Second pari passu on entire stocks, book-debts upto cover period, unbilled revenue, retention money and any current assets as per audited balance sheet both present and future (also Refer Note 42)

2.6 Term Loans from Banks

(a) ICICI Bank

The loan amount of Rs. 1,783.68 million, is secured by first and exclusive hypothecation charge over specific fixed assets of the Company including freehold land. The rate of interest is SBI Base Rate plus 1.25% p.a. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

(b) IndusInd Bank

The loan amount of Rs. 696.99 million, is secured by equitable mortgage of land and pledge of certain equity shares held in subsidiaries, as per the terms of sanction letter. The rate of interest is SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

(c) Punjab & Sind Bank

Secured by first and exclusive hypothecation charge over specific fixed assets of the Company. The rate of interest is Base Rate plus 1.50% p.a. The balance outstanding as at March 31, 2015 is Rs. 50.55 million, which is overdue.

(d) AXIS Bank

The loan amount of Rs. 296.50 million carries rate of interest, SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset. Out of loan amount of Rs. 296.50 million, Rs. 46.50 million was secured by specific equipments. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

(e) Nova Scotia

The loan amount of Rs. 250.00 million carries rate of interest, SBI Base Rate plus 1.25% p.a.from cut-off date with annual reset and is secured by mortgage of freehold land. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

(g) Union Bank of India

Loan of amount of Rs. 1,000.00 million repayable after moratorium period of one year in 4 equal installments of Rs. 250.00 million each. The rate of interest is base rate plus 4% p.a. The loan amount of Rs. 400.00 million has been included under secured loans and is secured by first charge on the immovable properties of the Company and the remaining balance of Rs. 600.00 million is secured by land belonging to RIHIM Developers Private Limited, wholly owned subsidiary of the Company and has been included under unsecured loan.

2.7 Term Loans from Others

(a) TATA Capital Financial Services Limited

The loan is secured by mortgage of freehold non-agricultural land. The rate of interest is SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

(b) SREI Equipment Finance Private Limited

The loan is secured by first charge by way of hypothecation of specific movable assets and mortgage of freehold agricultural land. The rate of interest is SBI Base Rate plus 1.25% p.a. from cut-off date with annual reset. The loan is repayable after a moratorium of 28 months from cut-off date in 30 structured quarterly installments commencing from quarter ending June 30, 2016 (also Refer Note 42)

2.8 Equipment Loans from Banks and Non-Banking Financial Companies (NBFCs)

Equipment Loans are secured by first charge and hypothecation of specified machinery, equipment and vehicles. Such loans are repayable within one year and carry interest rate ranging from 8.50% to 13.50% p.a.

3.1 Cash Credits and Working Capital Demand Loan from Consortium Banks

Cash Credits and Working Capital Demand Loans are secured by hypothecation of book debts, inventories and other current assets (excluding those charged to lenders of specific-funding projects). Further these loans are secured by mortgage of property in Land and Buildings owned by the Company ranking pari passu among the consortium banks aggregating to Rs. 101.54 million and lien of the Fixed Deposit of Rs. 4.20 million. The borrowings carry interest rate ranging from 11.25% to 14.00% p.a.(also Refer Note 42).

3.2 Project Specific Working Capital Loan from Banks

Project Specific Working Capital Loan from Banks are secured by hypothecation of book debts and inventory and other current assets of respective projects.

Short-Term Loans

3.3 Secured

TATA Capital Financial Services Limited

Secured by pledge of shares of following subsidiaries and subservient charge on the current assets.

(i) 29.70% shares of Salem Tollways Limited

(ii) 29.70% stake in Kumarpalyam Tollways Limited.

The loan is rescheduled during the year and repayable in one installment. The rate of interest is 14.25% p.a. and the balance outstanding as at March 31, 2015 is Rs. 392.20 million.

4. Contingent Liabilities and Commitments (Rs.in million)

As at As at 31.03.2015 31.03.2014

(i) Contingent Liabilities:

(a) Bank Guarantees issued by the banks on behalf of the Company 13,517.49 20,030.56 and Letter of Credits

(b) Corporate Guarantees issued by the Company on behalf of its 37,015.59 39,812.93 subsidiaries, associates and others (Refer Note 1 below)

(c) Claims against the Company not acknowledged as debts 2,732.38 971.18

(d) Disputed Value Added Tax / Service Tax 3,490.89 6,385.28

(ii) Commitments:

(a) Estimated amount of contracts to be executed on capital account 67.22 79.86 (net of advances)

(b) Commitments towards investment in subsidiaries 973.71 1,283.64

(c) Other Commitments (Refer Note 2 below) - -

Notes:

1. The Company has given Corporate Guarantees aggregating to Rs. 36,870.59 million (As at 31.03.2014: Rs. 39,245.54 million), on behalf of certain subsidiaries to Banks and Financial Institutions. The loan amount and compulsorily convertible debentures outstanding as on March 31, 2015 are Rs. 24,690.74 million (As at 31.03.2014: Rs. 19,582.38 million) and Rs. 2,500.00 million (As at 31.03.2014: Rs. 2,367.30 million) respectively.

2. The Company enters into construction contracts with its vendors. The final amounts payable under such contracts will be based on actual measurements and negotiated rates, which are determinable as and when the work under the said contracts are completed.

3. As more fully described in Note 42, the Company and the CDR lenders executed a Master Restructuring Agreement (MRA) during the year. The MRA as well as the provisions of the master circular on corporate debt restructuring issued by the Reserve Bank of India, gives a right to the lenders to get a recompense of their waivers and sacrifices made as part of the CDR proposals . The recompense payable by the company is contingent on various factors including improved performance of the Company and many other conditions, as at March 31, 2015, the aggregate indicative recompense of the CDR lenders as per the MRA is Rs. 1,646.60 million.

4. Impact of pending legal cases: The Company is party to several cases with clients as well as contractors, pending before various forums/courts/arbitration proceedings. It is not possible to make a fair assessment of the likely financial impact of these pending disputes/litigations until the cases are decided by the appropriate authorities.

5. Related Party Disclosure

Information regarding Related Party Transactions as per Accounting Standard 18 is given below: 35.1 List of Related Parties and Relationships

Sl Name No.

A Subsidiaries {The ownership, directly or indirectly through subsidiary (ies)}

1 Hindustan Dorr-Oliver Limited

2 IVRCL PSC Pipes Private Limited

3 IVR Enviro Projects Private Limited

4 Chennai Water Desalination Limited

5 Salem Tollways Limited

6 Kumarapalyam Tollways Limited

7 IVRCL Steel Construction & Services Limited

8 Jalandhar Amritsar Tollways Limited

9 IVRCL Indore Gujarat Tollways Limited

10 IVRCL Chengapalli Tollways Limited

11 IVRCL Patalaganga Truck Terminals Pvt. Limited

12 IVRCL Goa Tollways Limited

13 IVRCL-Cadagua Hogenakkal Water Treatment Company Private Limited

14 Alkor Petroo Limited

15 IVRCL Building Products Limited

16 IVRCL Chandrapur Tollways Limited

17 Sapthashva Solar Limited

18 RIHIM Developers Private Limited

19 IVRCL TLT Private Limited

20 IVRCL Raipur Bilaspur Tollways Limited

21 IVRCL Narnual Bhiwani Tollways Limited

22 IVR Hotels and Resorts Limited

23 SPB Developers Private Limited

24 IVRCL Multilevel Car Parking Private Limited

25 IVRCL Lanka (Private) Limited

26 First STP Private Limited

27 IVRCL Gundugolanu Rajahmundry Tollways Limited

28 IVRCL Patiala Bathinda Tollways Limited

29 IVR Prime Developers (Tambaram) Private Limited

30 HDO Technologies Limited

31 HDO (UK) Limited

32 Davymarkham (India) Private Limited

33 HDO Zambia Limited

34 IVR Prime Developers (Palakkad) Private Limited

35 IVR Prime Developers (Guindy) Private Limited

36 IVRCL Mega Malls Limited

37 Agaram Developers Private Limited

38 Mummidi Developers Private Limited

45 Chodavaram Developers Private Limited

46 Simhachalam Prime Developers Private Limited

47 Siripuram Developers Private Limited

48 Bibinagar Developers Private Limited

49 IVR Prime Developers (Erode) Private Limited

50 IVR Prime Developers (Guntur) Private Limited

51 IVR Prime Developers (Kakinada) Private Limited1

52 IVR Prime Developers (Araku) Private Limited

53 IVR Prime Developers (Pudukkottai) Private Limited1

54 Absorption Aircon Engineer Private Limited

55 IVR Vaanaprastha Private Limited

56 IVR PUDL Resorts & Clubs Private Limited

57 IVR Prime Developers (Thandiarpet) Private Limited1

58 IVR Prime Developers (Gummidipundy) Private Limited1

59 IVR Prime Developers (Kodambakkam) Private Limited1

60 IVR Prime Developers (Arumbakkam) Private Limited1

61 IVR Prime Developers (Anna Nagar) Private Limited1

62 IVRCL Solar Energy Private Limited

63 IVR Prime Developers (Amalapuram) Private Limited

64 IVR Prime Developers (Anakapalle) Private Limited1

65 IVR Prime Developers (Rajampeta) Private Limited1

66 IVR Prime Developers (Tanuku) Private Limited1

67 IVR Prime Developers (Red Hills) Private Limited

68 IVR Prime Developers (Rajahmundry) Private Limited1

69 IVR Prime Developers (Tuni) Private Limited

70 IVR Prime Developers (Bobbilli) Private Limited

71 IVR Prime Developers (Bhimavaram) Private Limited

72 IVR Prime Developers (Adayar) Private Limited

73 IVR Prime Developers (Ananthapuram) Private Limited1

74 IVR Prime Developers (Perumbadur) Private Limited1

75 IVR Prime Developers (Egmore ) Private Limited

76 IVR Prime Developers (Ashram) Private Limited1

77 IVR Prime Developers (Retiral Homes) Private Limited1

78 Geo IVRCL Engineering Limited

79 Duvvda Developers Private Limited

80 Kunnam Developers Private Limited

81 Vedurwada Developers Private Limited

82 Rudravaram Developers Private Limited

39 Samatteri Developers Private Limited

40 Annupampattu Developers Private Limited

41 Tirumani Developers Private Limited

42 Ilavampedu Developers Private Limited

43 Gajuwaka Developers Private Limited

44 IVR Prime Developers (Mylapore) Private Limited1

83 Geo Prime Developers Private Limited

84 Theata Developers Private Limited

85 Kasibugga Developers Private Limited

86 Vijayawada Developers Private Limited

87 Eluru Developers Private Limited

1. Applications have been filed before the Registrar of Companies, Andhra Pradesh to 'strike off' of names under the "Fast Track Exit Scheme".

B Associate (Where the Company Exercises Significant influence)

1 Viva Infrastructure Pvt. Limited

2 Paresh Infrastructures Private Limited

3 IVRCL International Infrastructures & Projects LLC

4 Sushee - IVRCL Arunachal Highway Limited

C Joint Ventures

1 Bhanu - IVRCL Associates

2 IVRCL - Tantia (JV)

3 IVRCL, SEW & Prasad Hyderabad J.V

4 IVRCL, Navayuga & SEW Joint Venture

5 Navayuga, IVRCL & SEW Joint Venture

6 IVRCL - Harsha (JV)

7 SPCL- IVRCLJV

8 IVRCL - JL (JV)

9 UAN Raju IVRCL Construction JV

10 IVRCL - KBL (JV) Hyderabad

11 IVRCL - KBL - MEIL (JV) Hyderabad

12 IVRCL - CR18G (JV)

13 IVRCL - KMB - HDO Joint Venture

14 IVRCL-MEIL (NC-28) Joint Venture

15 IVRCL-MEIL (NC-33) Joint Venture

16 IVRCL - SUSHEE Consortium

17 IVRCL SEW & WPIL (JV) Hyderabad

18 IVRCL - MBL (JV) Hyderabad

19 IVRCL BATPASCO WPIL & MHI (JV) Hyderabad

20 IVRCL BATPASCO ABB & AAG (JV) Hyderabad

21 IVRCL - CR18G Consortium (J.V)

22 MEIL IVRCL HCC & WPIL (JV)

23 IVRCL - KIPL (JV)

24 IVRCL - RAJ (JV)

25 UNITY - IVRCL Joint Venture

26 IVRCL SAI SUDHIR (JV)

27 CR18G - IVRCL (JV)

28 IVRCL - SUSHEE JOINT VENTURE

29 IVRCL - RTE Joint Venture

30 KMB - IVRCL Joint Venture

31 IVRCL - BPL -UCC (JV)

32 IVRCL-MRT(JV)

33 SAPL & MBL - IVRCL (JV)

34 G.SHANKAR-IVRCL (J.V)

35 IVRCL-MEIL (J.V)

36 MEIL-IVRCL (J.V)

37 IVRCL-TAI INFRA (JV)

38 IVRCL LTD-AJAY PROTECH PVT.LTD.(JV)_

D Enterprises owned or significantly influenced by key management personnel or their relatives

1 S.V.Equities Limited

2 Palladium Infrastructures & Projects Limited

3 Soma Hotels & Resorts Limited

4 Eragam Holdings Limited

5 Eragam Finlease Limited

6 Indus Palms Hotels & Resorts Limited

7 A.P.Enercon Engineers Private Limited

E Key Management Personnel

1 Mr. E. Sudhir Reddy Chairman & Managing Director

2 Mr. K. Ashok Reddy Joint Managing Director

3 Mr. R. Balarami Reddy Joint Managing Director & CFO

4. Mr. B.Subrahmanyam Company Secretary

F Relatives of Key Management Personnel

1 Mr. E. Ella Reddy Relative of Chairman & Managing Director

2 Mrs. E. Sujatha Reddy

3 Mr. E. Sunil Reddy

b) In accordance with the payment of Gratuity Act, 1972 the Company provides for gratuity covering eligible employees. The liability on account of gratuity is covered partially through a recognized Gratuity Fund managed by Life Insurance Corporation of India and balance is provided on the basis of valuation of the liability by an independent actuary as at the period end. The invested return earned on the policy comprises bonus declared by LIC having regard to LIC's investment earnings. The information on the allocation of the fund into major asset classes and expected return on each major class are not available. The management understands that LIC's overall portfolio assets is well diversified and as such, the long-term return of the policy is expected to be higher than the rate of return on Central Government Bonds.

c) The expense pertaining to gratuity of Rs. 63.03 million (2013-14 : Rs. 8.16 million) has been considered in "Contribution to Provident and Other Funds" under Note 23.

e) The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 118.21 million (2013-14: Rs. 127.76 million) for Provident Fund contributions, Rs. 22.22 million (2013-14: Rs. 21.31 million) for Superannuation Fund contributions and Rs. 1.10 million (2013-14: Rs. 1.49 million) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

6. Segment Reporting

a) Business Segment

The Company has considered "Engineering & Construction" as one business segment for disclosure in the context of Accounting Standard 17. The Company is engaged in the business of Engineering & Construction segment only for the period under report.

b) Geographical Segment

During the period under report, the Company has engaged in its business primarily within India. The conditions prevailing in India being uniform, no separate geographical disclosure is considered necessary.

7. During the year ended March 31, 2015 managerial remuneration, amounting to Rs. 12.00 million in respect of an executive director is subject to Central Government approval and Rs. 9.41 million in respect of two executive directors for which the Company is in the process of making the application to the Central Government has been paid. Pending the approval from the Central Government the excess amount of Rs. 38.98 million (including Rs. 17.57 million for the earlier period) has been accounted as due from directors.

8. During the previous year exceptional item relates to Trade Receivables, which were qualified by the Statutory Auditors in their Independent auditorsRs. report in earlier periods. National Stock Exchange of India Limited vide letter dated March 24, 2014 has directed the company to rectify the qualification raised by the Statutory Auditors. Accordingly, provision has been made during the previous year ended March 31, 2014 for the same. However, the Board of Directors is of the view that these receivables are fully recoverable.

9. In respect of certain customers the Company has initiated legal / arbitration proceedings. The trade receivables and other current assets from such customers as at March 31, 2015 aggregates to Rs. 11,948.93million. The management is confident that the outcome of the legal proceedings will be favorable and no provision is considered necessary at this stage. The Board of Directors is of the view that, these receivables are good and fully recoverable.

10. Unbilled revenue includes Rs. 1,542.62million outstanding for a period of more than three years and not billed to the customers. The Company is in continuous engagement with the customers for billing and realization of the work done. The Board of Directors is of the view that, these will be billed and are good and fully recoverable.

11. The Company has executed the final Master Restructuring Agreement (MRA)/other definitive documents on June 30, 2014 with the majority of participating lenders banks, consequent to approval from Corporate Debt Restructuring Cell (CDR Cell). In accordance with the CDR scheme, the CDR lenders have waived the obligation of the Company to pay any liquidated damages, default or penal interest /interest/further interest charged by the Lenders in excess of the concessional rates approved under CDR scheme with effect from November 30, 2013 (the "cut-off date", the "COD").

Pursuant to CDR scheme, from COD the interest on the restructured debts has been recomputed and provided at the effective interest rates as per the CDR scheme on the balances of lender banks as appearing in the books of account. Accordingly, the interest payable to these banks has been recalculated in accordance with the CDR scheme. The Company has accounted for CDR scheme (reclassifications and interest calculations) in the books for the year ended March 31, 2015 as follows:

a. The rate of interest has been changed/ revised and reduced to State Bank of India (SBI) base rate plus 1.25 % (currently effective rate is 11.25% per annum with effect from the COD). Further, a sum of Rs. 568.15 million, which represents reduction in interest for the period from the COD to the date of giving effect of CDR scheme by the respective banks as adjusted for the interest payments made during the period to the lenders, has been recorded as exceptional item.

b. Conversion of Corporate Guarantees amounting to Rs. 924.28 million and Rs. 170.00 million to subsidiary companies namely Alkor Petroo Limited and IVRCL TLT Private Limited respectively, into Corporate Guarantee Term Loan.

c. The interest due and accrued with effect from the COD to December 31, 2014 on cash credit facilities and upto September 30, 2015 on other term borrowings shall be funded and converted into Funded Interest Term Loan (FITL) and lenders shall have the option to convert the same along with accrued interest thereon into equity at the end of each calendar quarters. Accordingly till March 31, 2015, Rs. 4,319.29 million has been converted into FITL and consequently lenders have exercised their conversion option and converted Rs. 3,713.43 million into equity upto March 31, 2015.

Further, CDR scheme envisage:

i. Additional security of surplus assets in the form of various land parcels in the name subsidiary companies by way of first and second parri passu charge on such assets.

ii. Pledge of 100% unencumbered (both present and future) shares held by the promoters in the Company.

iii. Corporate guarantee of all group companies where the issuance of the corporate guarantee is not barred by respective lenders.

iv. Pledge of unencumbered shares/investments of all major subsidiaries/group companies.

v. Personal guarantee of Chairman and Managing Director of the Company.

43. a) The company had entered into definitive sale agreement on March 30, 2013 with strategic investor for disinvestment in BOT projects relating to Salem Tollways Limited, Kumarapalyam Tollways Limited and IVRCL Chengapalli Tollways Limited, as a composite arrangement. The parties have during the year, agreed to extend and revise the key terms of the same. According to the revised letter of intent between the parties, the transaction will be subject to due diligence process in relation to the share purchase transaction and Commercial Operation Date (COD) timeline as agreed, before executing the revised definitive agreement. The Company has received an amount of Rs. 300.00 million (against furnishing of Bank Guarantee for equivalent amount) from strategic investor as part of advance towards the share purchase consideration, which is refundable in case strategic investor at its sole discretion decide not to proceed with share purchase transaction and does not execute the revised definitive agreement. Pending fulfillment of the condition precedent to the revised definitive agreement, the management believes that the investments are long-term and no material adjustment is considered necessary to the carrying value of the investments.

b) During the year, the Company has signed a binding agreement for divestment of investment in its subsidiary Chennai Water Desalination Limited. As at March 31, 2015, detailed underlying terms for such agreement including approval of project authorities and lenders are under discussion and accordingly the investment in this subsidiary is considered as long-term investment. Based on the expected cash flow, no material adjustment is considered necessary to the carrying value of the investment.

12. The accumulated losses of the subsidiary, Hindustan Dorr-Oliver Limited, as at March 31, 2015, have eroded its net worth. The management of the Company is confident of improvement in the company's future operations and the financial statements have prepared on going concern basis. The Company is of the view that the investment in the company amounting to Rs. 657.53 million is a long-term investment and no provision for diminution in the value of investment is necessary.

13. Short Term Loans & Advances to subsidiary companies include an amount of Rs. 1,094.28 million, being Corporate Guarantee Term Loan (Refer Note 42 b) and Rs. 300.00 million, being Working Capital Loan of two subsidiaries taken over by the Company. In the opinion of the Board of Directors, these advances are fully recoverable from subsidiaries.

14. Employee Share based Plan ESOP 2013 Scheme

The IVRCL - ESOP 2013 Scheme was approved by the shareholders in the 26th Annual General Meeting held on September 26, 2013 to grant 10,000,000 options, convertible in to 10,000,000 shares of Rs. 2 on exercise of options granted to the employees. The Company is yet to grant these options to the employees.

ESOP 2007 Scheme

The IVRCL - ESOP 2007 Scheme approved by the shareholders in the 20th Annual General Meeting held on September 7, 2007 to grant 4,200,000 options, convertible in to 4,200,000 shares of Rs. 2 on exercise of options granted to the employees was lapsed during the previous year.

15. Pursuant to Schedule II of the Companies Act, 2013, with effect from April 1, 2014, the Company has adopted revised useful life of the assets aligning the same with those specified in Schedule II. The Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014 and has adjusted an amount of Rs. 136.42 million from General Reserve under Reserves and Surplus.

16. Certain creditors have filed winding up petitions against the Company under section 433,434 and 439 of the Companies Act, 1956 before Hon'ble High Court of Telengana & Andhra Pradesh. The matter is presently subjudice and the company is taking appropriate steps to settle the matter.

17. Figures for the previous year have been regrouped /rearranged wherever considered necessary to conform to the figures presented in the current year.


Mar 31, 2014

1. Corporate Information

The Company is engaged in the business of development and execution of Engineering, Procurement, Construction and Commissioning (EPCC) and Lump Sum Turn Key (LSTK) facilities in various Infrastructure projects such as Water Supply, Roads and Bridges, Townships and Industrial Structures, Power Transmission, etc. for Central/State Governments, other Local Bodies and private sector.

2. Related Party Disclosure

Information regarding Related Party Transactions as per Accounting Standard 18 as notified in the Companies (Accounting Standards) Rules, 2006 is given below:

2.1 List of Related Parties and Relationships

Sl Name No.

A Subsidiaries {The ownership, directly or indirectly through subsidiary (ies)}

1 Hindustan Dorr-Oliver Limited

2 IVRCL PSC Pipes Private Limited

3 IVR Enviro Projects Private Limited

4 Chennai Water Desalination Limited

5 Salem Tollways Limited

6 Kumarapalyam Tollways Limited

7 IVRCL Steel Construction & Services Limited

8 Jalandhar Amritsar Tollways Limited

9 IVRCL Indore Gujarat Tollways Limited

10 IVRCL Chengapalli Tollways Limited

11 IVRCL Patalaganga Truck Terminals Pvt. Limited

12 IVRCL Goa Tollways Limited

13 IVRCL-Cadagua Hogenakkal WaterTreatment Company Private Limited

14 Alkor Petroo Limited

15 IVRCL Building Products Limited

16 IVRCL Chandrapur Tollways Limited

17 Sapthashva Solar Limited

18 RIHIM Developers Private Limited

19 IVRCL TLT Private Limited

20 IVRCL Raipur Bilaspur Tollways Limited

21 IVRCL Narnual Bhiwani Tollways Limited

22 IVR Hotels and Resorts Limited

23 SPB Developers Private Limited

24 IVRCL Multilevel Car Parking Private Limited

25 IVRCL Lanka (Private) Limited

26 First STP Private Limited

27 IVRCL Gundugolanu Rajahmundry Tollways Limited

28 IVRCL Patiala Bathinda Tollways Limited

29 IVR Prime Developers (Tambram) Private Limited

30 HDO Technologies Limited

31 HDO (UK) Limited

32 Davymarkham Limited

33 Davymarkham (India) Private Limited

34 HDO Zambia Limited

35 IVR Prime Developers (Palakkad) Private Limited

36 IVR Prime Developers (Guindy) Private Limited

37 IVRCL Mega Malls Limited

38 Agaram Developers Private Limited

39 Mummidi Developers Private Limited

40 Samatteri Developers Private Limited

41 Annupampattu Developers Private Limited

42 Tirumani Developers Private Limited

43 Ilavampedu Developers Private Limited

44 Gajuwaka Developers Private Limited

45 IVR Prime Developers (Mylapore) Private Limited1

46 Chodavaram Developers Private Limited

47 Simhachalam Prime Developers Private Limited

48 Siripuram Developers Private Limited

49 Bibinagar Developers Private Limited

50 IVR Prime Developers (Erode) Private Limited

51 IVR Prime Developers (Guntur) Private Limited

52 IVR Prime Developers (Kakinada) Private Limited1

53 IVR Prime Developers (Araku) Private Limited

54 IVR Prime Developers (Pudukkottai) Private Limited1

55 Absorption Aircon Engineer Private Limited

56 IVR Vaanaprastha Private Limited

57 IVR PUDL Resorts & Clubs Private Limited

58 IVR Prime Developers (Thandiarpet) Private Limited1

59 IVR Prime Developers (Gummidipundy) Private Limited1

60 IVR Prime Developers (Kodambakkam) Private Limited1

61 IVR Prime Developers (Arumbakkam) Private Limited1

62 IVR Prime Developers (Anna Nagar) Private Limited1

63 IVRCL Solar Energy Private Limited

64 IVR Prime Developers (Amalapuram) Private Limited

65 IVR Prime Developers (Anakapalle) Private Limited1

66 IVR Prime Developers (Rajampeta) Private Limited1

67 IVR Prime Developers (Tanuku) Private Limited1

68 IVR Prime Developers (Red Hills) Private Limited

69 IVR Prime Developers (Rajahmundry) Private Limited1 7Q IVR Prime Developers (Tuni) Private Limited

71 IVR Prime Developers (Bobbilli) Private Limited

72 IVR Prime Developers (Bhimavaram) Private Limited

73 IVR Prime Developers (Adayar) Private Limited

74 IVR Prime Developers (Ananthapuram) Private Limited1

75 IVR Prime Developers (Perumbadur) Private Limited1

76 IVR Prime Developers (Egmore ) Private Limited

77 IVR Prime Developers (Ashram) Private Limited1

78 IVR Prime Developers (Retiral Homes) Private Limited1

79 Geo IVRCL Engineering Limited

80 Duvvda Developers Private Limited

81 Kunnam Developers Private Limited

82 Vedurwada Developers Private Limited

83 Rudravaram Developers Private Limited

84 Geo Prime Developers Private Limited

85 Theata Developers Private Limited

86 Kasibugga Developers Private Limited

87 Vijayawada Developers Private Limited

88 Eluru Developers Private Limited

1. Applications have been filed before the Registrar of Companies, Andhra Pradesh to ''strike off'' of names under the "Fast Track Exit Scheme".

B Associate (Where the Company Exercises Significant influence)

1 Viva Infrastructure Pvt. Limited

2 Paresh Infrastructures Private Limited

3 IOT Utkal Energy Services Limited

4 IVRCL International Infrastructures & Projects LLC

5 Sushee - IVRCL Arunachal Highway Limited

C Joint Ventures

1 Bhanu - IVRCL Associates

2 IVRCL - Tantia (JV)

3 IVRCL, SEW & Prasad Hyderabad J.V

4 IVRCL, Navayuga & SEW Joint Venture

5 Navayuga, IVRCL & SEW Joint Venture

6 IVRCL - Harsha (JV)

7 SPCL - IVRCL JV

8 IVRCL - JL (JV)

9 UAN Raju IVRCL Construction JV

10 IVRCL - KBL (JV) Hyderabad

11 IVRCL - KBL - MEIL (JV) Hyderabad

12 IVRCL - CR18G (JV)

13 IVRCL - KMB - HDO Joint Venture

14 IVRCL-MEIL (NC-28) Joint Venture

15 IVRCL-MEIL (NC-33) Joint Venture

16 IVRCL - SUSHEE Consortium

17 IVRCL SEW & WPIL (JV) Hyderabad

18 IVRCL - MBL (JV) Hyderabad

19 IVRCL BATPASCO WPIL & MHI (JV) Hyderabad

20 IVRCL BATPASCO ABB & AAG (JV) Hyderabad

21 IVRCL - CR18G Consortium (J.V)

22 MEIL IVRCL HCC & WPIL (JV)

23 IVRCL - KIPL (JV)

24 IVRCL - RAJ (JV)

25 UNITY - IVRCL Joint Venture

26 IVRCL SAI SUDHIR (JV)

27 CR18G - IVRCL (JV)

28 IVRCL - SUSHEE JOINT VENTURE

29 IVRCL - RTE Joint Venture

30 KMB - IVRCL Joint Venture

31 IVRCL - BPL -UCC (JV)

32 IVRCL-MRT(JV)

33 SAPL & MBL - IVRCL (JV)

34 G.SHANKAR-IVRCL (J.V)

35 IVRCL-MEIL (J.V)

36 MEIL-IVRCL (J.V)

D Enterprises owned or significantly influenced by key management personnel or their relatives

1 S.V.Equities Limited

2 Palladium Infrastructures & Projects Limited

3 Soma Hotels & Resorts Limited

4 Eragam Holdings Limited

5 Eragam Finlease Limited

6 Indus Palms Hotels & Resorts Limited

7 A.P.Enercon Engineers Private Limited

E Key Management Personnel

1 Mr. E. Sudhir Reddy Chairman & Managing Director

2 Mr. K. Ashok Reddy Executive Director

3 Mr. R. Balarami Reddy Executive Director - Finance & Group CFO

F Relatives of Key Management Personnel

1 Mr. E. Ella Reddy

2 Mrs. E. Sujatha Reddy

3 Mr. E. Sunil Reddy

4 Mrs. E. Indira Reddy Relative of Chairman & Managing Director

5 Mr. E. Siddhanth Reddy

6 Mr. E. Sanjeeth Reddy

7 Ms.E.Suha Reddy

8 Ms.E. Soma Reddy } Relative of Director

b) In accordance with the payment of Gratuity Act, 1972 the Company provides for gratuity covering eligible employees. The liability on account of gratuity is covered partially through a recognized Gratuity Fund managed by LifeInsurance Corporation of India and balance is provided on the basis of valuation of the liability by an independent actuary as at the period end. The invested return earned on the policy comprises bonus declared by LIC having regard to LIC''s investment earnings. The information on the allocation of the fund into major asset classes and expected return on each major class are not available. The management understands that LIC''s overall portfolio assets is well diversified and as such, the long-term return of the policy is expected to be higher than the rate of return on Central Government Bonds.

c) The expense pertaining to gratuity of Rs.8.16 million (2012-13 : Rs.17.35 million) has been considered in "Contribution to Provident and Other Funds" under Note 23.

e) The Company makes Provident Fund, Superannuation Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs.127.76 million (2012-13: Rs. 110.32 million) for Provident Fund contributions, Rs. 21.31 million (2012-13: Rs. 17.24 million) for Superannuation Fund contributions and Rs. 1.49 million (2012-13: Rs. 2.21 million) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss. The contributions payable to these plan by the Company are at rates specified in the rules of the schemes.

3. Segment Reporting

a) Business Segment

The Company has considered "Engineering & Construction" as one business segment for disclosure in the context of Accounting Standard 17 as notified in the Companies (Accounting Standards) Rules, 2006. The Company is engaged in the business of Engineering & Construction segment only for the period under report.

b) Geographical Segment

During the period under report, the Company has engaged in its business primarily within India. The conditions prevailing in India being uniform, no separate geographical disclosure is considered necessary.

4. The Company had entered into definitive sale agreements on March 30, 2013, with the strategic partner for disinvestment of 74% holdings in BOT Projects relating to Salem Tollways Limited, Kumarapalayam Tollways Limited and IVRCL Chengapalli Tollways Limited, as a composite arrangement, subject to approvals for all the projects from National Highway Authority of India (NHAI) and the Lenders. Pending approval from the lenders the investments in these projects are considered as long-term investments. Based on the expected cash flows, no provision is considered necessary to the carrying value of the investments.

5. Exceptional Item relates to Trade Receivables, which were qualified by the Statutory Auditors in their Independent auditors'' report for the nine months period ended March 31, 2013, in their Independent auditors'' review report for the quarter ended June 30, 2013, the quarter and six months ended September 30, 2013, the quarter and nine months ended December 31,2013. National Stock Exchange of India Limited vide letter dated March 24, 2014 has directed the company to rectify the qualification raised by the Statutory Auditors. Accordingly, provision has been made during the year ended March 31,2014 for the same. However, the Board of Directors is of the view that these receivables are fully recoverable.

6. In respect of certain customers the Company has initiated legal / arbitration proceedings. The trade receivables and other current assets from such customers as at March 31, 2014 aggregates to Rs. 6,447.45 million. The management is confident that the outcome of the legal proceedings will be favorable and no provision is considered necessary at this stage.

7. Unbilled revenue includes Rs. 995.33 million outstanding for a period of more than three years and not billed to the customers. The Company is in continuous engagement with the customers for billing and realization of the work done.

8. During the year, subsequent to the Settlement Application made during the period ended March 31,2013 in respect of the search and seizure operations carried out by the Income Tax authorities, the Income Tax Settlement Commission has issued final order under Section 245(D)4 of the Income Tax Act, 1961 based on which the Company has accounted additional tax expense of Rs. 66.66 million and interest on deferred payment of tax amounting to Rs. 106.30 million included under "Tax expense" and "Finance Cost" respectively. The aforesaid amounts are gross of interest on tax refunds receivable amounting to Rs. 94.13 million and has been included under "Other Income". The Company has also accounted for tax expense of Rs.130.32 million relating to the previous year ended March 31, 2013.

9. The Company has on January 20, 2014 filed an application with Corporate Debt Restructuring (CDR) Cell as prescribed under the Reserve Bank of India (RBI) guidelines by way of reference to CDR Cell.

10. During the year ended March 31, 2014 managerial remuneration, amounting to Rs. 7.64 million in respect of an executive director is subject to Central Government approval and Rs. 4.55million in respect of two executive directors for which the Company is in the process of making the application to the Central Government, has been paid. Pending the approval from the Central Government the excess amount of Rs. 17.57million (including Rs. 5.38 million for the earlier period) has been accounted as due from directors.

During the current year, the Company has received Central Government approval in respect of excess remuneration paid during the period April 01, 2011 to June 30, 2012 amounting to Rs. 11.40 million which has been charged to "Employee Benefits Expense" for the year ended March 31, 2014.

11. The accumulated losses of the subsidiary, Hindustan Dorr-Oliver Limited, as at March 31,2014, have eroded its net worth. The management of the Company is confident of improvement in the company''s future operations and the financial statements have prepared on going concern basis. The Company is of the view that the investment in the company amounting to Rs. 657.53 million is a long-term investment and no provision for diminution in the value of investment is necessary.

12. Employee Share based Plan ESOP 2013 Scheme

The IVRCL - ESOP 2013 Scheme approved by the shareholders in the 26th Annual General Meeting held on September 26, 2013 to grant 10,000,000 options, convertible in to 10,000,000 shares of Rs. 2 on exercise of options granted to the employees. The Company is yet to grant these options to the employees.

ESOP 2007 Scheme

The IVRCL - ESOP 2007 Scheme approved by the shareholders in the 20th Annual General Meeting held on September 7, 2007 to grant 4,200,000 options, convertible in to 4,200,000 shares of Rs. 2 on exercise of options granted to the employees. The scheme is lapsed during the year.

13. Operating Lease

i. The Company has taken various plant and machinery including construction equipment under non-cancellable operating lease. The future minimum lease payments in respect of these as at March 31, 2014 are as follows:

ii. Lease payments in respect of obligation under non-cancellable operating lease of Rs. 177.87 million (2012-13 : Rs. 133.44 million) have been included under "Machinery Hire Charges".

14. Certain creditors have filed winding up petitions against the Company under section 433,434 and 439 of the Companies Act, 1956 before Hon''ble High Court of Andhra Pradesh. The matter is presently subjudice and the company is taking appropriate steps to settle the matter.

15. Figures for the previous period have been regrouped /rearranged wherever considered necessary to conform to the figures presented in the current period.


Mar 31, 2013

1. Corporate Information

The Company is engaged in the business of development and execution of Engineering, Procurement, Construction and Commissioning (EPCC) and Lump Sum Turn Key (LSTK) facilities in various Infrastructure projects such as Water Supply, Roads and Bridges, Townships and Industrial Structures, Power Transmission, etc. for Central/State Governments, other Local Bodies and private sector.

2.1 Cash Credits and Working Capital Demand Loan from Consortium Banks

Cash Credits and Working Capital Demand Loans are secured by hypothecation of book debts, inventories and other current assets (excluding those charged to lenders of specific-funding projects) and certain Plant & Machinery and equipment valuing Rs.137.32 million and Rs. 0.66 million not charged to other lenders. Further these loans are secured by mortgage of property in Land and Buildings owned by the Company ranking pari passu among the consortium banks aggregating to Rs. 133.71 million and lien of the Fixed Deposit of Rs.4.20 million. The loans are Second Charged on current assets of the specific-funding projects on reciprocal basis. The borrowings carry interest rate ranging from 10.20% to 14.00% p.a.

2.2 Project Specific Working Capital Loan from Banks

Project Specific Working Capital Loan from Banks are secured by hypothecation of book debts and inventory and other current assets of respective projects.

2.3 Short-Term Loans from Banks - Bank of Nova Scotia

Loan is repayable in 1 installment within 30 days (i.e., April 5, 2013) from the date of disbursement. The rate of interest is 12.75% p.a. and the balance outstanding as at March 31, 2013 is Rs. 250.00 million

2.4 Commercial Paper

The amount of Commercial Papers outstanding as at March 31, 2013 is Rs. Nil (2011-12 : Rs. 1,100.00 million). The maximum amount outstanding during the period was Rs. 1,100.00 million (2011-12 : Rs. 7,400.00 million).

3. Trade Receivables as at March 31, 2013 include amounts aggregating to:

a) Rs. 347.07 million relating to claims receivable from certain contractee clients. The claims are on account of deviation in design, additional overheads, interest due to overstay and idle cost. The claims are considered realizable based on favourable developments arising out of continuous contract management steps taken by the Company, and

b) Rs. 1,810.35 million (including Rs. 717.58 million which are under arbitration) outstanding for a period of more than three years. The Company is in continuous engagement with the customers for realisation of dues.

The Board of Directors is of the view that the receivables covered by (a) and (b) above are good and fully recoverable.

4. Based on the Term Sheet entered into by the Company with the strategic partner for disinvestment of 74% holdings in BOT Projects relating to Salem Tollways Limited, Kumarapalayam Tollways Limited and IVRCL Chengapalli Tollways Limited, as a composite arrangement, the Company entered into definitive sale agreements on March 30, 2013, subject to approvals for all the projects from National Highway Authority of India (NHAI) and the Lenders. The Company on May 7, 2013 received communication from NHAI, stating that, the disinvestment of the holdings for one of the project cannot be more than 49%, until the project is completed.

Consequent to the communication received from NHAI, the Company intends to continue with the projects and as such, the investments in these projects are considered as long-term investments. Based on the expected cash flows, no provision is considered necessary to the carrying value of the investments.

5. Composite Scheme of Arrangement

a) During the previous financial period, pursuant to the Composite Scheme of Arrangement under Section 391 to 394 of the Companies Act, 1956 between the Company, IVRCL Assets & Holdings Limited (IVRCL A&H), RIHIM Developers Private Limited (RDPL) and IVRCL TLT Private Limited (IVRCL TLT) and their respective shareholders, which was sanctioned by the Hon''ble High Court of Andhra Pradesh vide its order dated July 2, 2012, effective from April 1, 2011 (the appointed date):

(i) all the properties, assets and liabilities of the Real Estate Undertaking of IVRCL A&H have been transferred to and vested with RDPL; (ii) all the properties, assets and liabilities of Remaining Undertaking (primarily relating to Infrastructure Development Business) of IVRCL A&H have been transferred to and vested with the Company and accounted for under "Purchase Method" as prescribed by Accounting Standard 14 notified by the Companies (Accounting Standards) Rules, 2006. (iii) all the properties, assets and liabilities of Tower Manufacturing Undertaking of the Company have been transferred to and vested with IVRCL TLT transferred at values appearing in the books of accounts of the Company without consideration.

b) Pursuant to the Composite Scheme of Arrangement and after considering the cancellation of shares held by the Company, 39,876,790 equity shares of Rs. 2 each of the Company have been issued to the shareholders of IVRCL A&H in the ratio of 5 equity shares of Rs. 2 each of the Company for every 6 equity shares of Rs. 10 each held in IVRCL A&H.

6. Segment Reporting

a) Business Segment

The Company has considered "Engineering & Construction" as one business segment for disclosure in the context of Accounting Standard 17 as notified in the Companies (Accounting Standards) Rules, 2006. The Company is engaged in the business of Engineering & Construction segment only for the period under report.

b) Geographical Segment

During the period under report, the Company has engaged in its business primarily within India. The conditions prevailing in India being uniform, no separate geographical disclosure is considered necessary.

7. The Income-tax department had carried out search and seizure operations during 2009-10 and 2011-12 at the business premises of the Company located at various places in India and the residential premises of an employee. During the proceedings before the Income-tax Settlement Commission, it was brought to the notice that an employee had indulged in misappropriation of materials and certain expenditure on procurement of materials, contract / sub contract payments, labour, power and fuel, transportation and general administration could include possible diversion of funds for purposes other than business. During the current period, the Company filed a Settlement Application submitting additional income of Rs. 1,387.74 million (in respect of the aforesaid expenditure) and subsequently paid the tax of Rs. 426.21 million and interest on tax of Rs. 153.35 million through adjustment of refund, Tax deducted at Source etc. The aforesaid amounts have been included in the Statement of Profit and Loss under ''Current tax relating to prior years'' and ''Interest – Others'' under Finance Cost (Note 25) respectively.

8. The shareholders of the Company, through a special resolution, have approved the remuneration of executive directors in the Annual General Meeting held on December 24, 2012. Due to inadequate profits during the period, managerial remuneration paid to the executive directors aggregating to Rs. 15.19 million is in excess of the prescribed limits specified under Schedule XIII of the Companies Act, 1956, and is subject to the Central Government approval. Pending approval from the Central Government, the excess amount of Rs. 26.51 million (including Rs. 18.52 million relating to the previous period) has been included under due from directors in ''Short-term Loans and Advances'' (Note 18).

9. Employee Share based Plan – ESOP 2007 Scheme

The IVRCL – ESOP 2007 Scheme approved by the shareholders in the 20th Annual General Meeting held on September 7, 2007 to grant 4,200,000 options, convertible in to 4,200,000 shares of Rs. 2 on exercise of options granted to the employees. The Company is yet to grant these options to the employees.

10. Derivative Instruments

(a) The details of foreign currency exposures on account of External Commercial Borrowings that have been hedged by cross currency swap are given below.

11. Operating Lease

i. The Company has taken various plant and machinery including construction equipment under non-cancellable operating lease. The future minimum lease payments in respect of these as at March 31, 2013 are as follows:

ii. Lease payments in respect of obligation under non-cancellable operating lease of Rs. 133.44 million (2011-12 : Rs. 44.94 million) have been included under "Machinery Hire Charges".

12. Balances with statutory / government authorities include claims filed by the Company with Director General of Foreign Trade aggregating to Rs. 248.62 million (As at 30.06.2012: Rs. 415.19 million) towards reimbursement of duty paid under the Deemed Exports Scheme.

13. Figures for the previous period have been regrouped /rearranged wherever considered necessary to conform to the figures presented in the current period.


Mar 31, 2011

1. All amounts in the financial statements are presented in Rupees in million except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit and Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped /rearranged wherever considered necessary to conform to the figures presented in the current year.

2. The name of the Company has been changed to IVRCL Limited effective 18* March, 2011.

3. Debentures (Privately Placed)

a) Secured NonConvertible Debentures

2,000, 12.15% Secured NonConvertible Redeemable Debentures ® Rs. 1,000,000 each issued to Life Insurance Corporation of India during the year 200809. IDBI Trusteeship Services Ltd, Mumbai are the trustees for the debenture holders. The debentures shall be redeemed at the end of five years from the date of allotment i.e. December 19, 2013. The debentures are secured with asset cover of 1.25 times by way of first pari passu charge over certain specific fixed assets including immovable properties of the Company.

1,050, 8.85% Secured NonConvertible Redeemable Debentures ® Rs. 1,000,000 each were issued to the following banks during the year 200910. IDBI Trusteeship Services Ltd, Mumbai were the trustees for the debenture holders. The debentures shall be redeemed at the end of Seventeen months from the date of allotment i.e. April 27,2011. The debentures are secured with asset cover of 100% by way of first pari passu charge over certain specific fixed assets including immovable properties of the Company.

b) The debentures are listed on Wholesale Debt Market (WDM) segment of National Stock Exchange (NSE). 4. Secured Loans

a) Term Loans

Term loams are secured by way of first charge and hypothecation of specific machinery and equipment purchased.

Term Loans include External Commercial Borrowings from Standard Chartered Bank London of UJSD 12.50 million (equivalent toRs. 571.63 million) availed during the year. The principal and interest components of the ECB are hedged and duly covered against foreign exchange fluctuations.

b) Equipment Loam from Banks and Non Banking Financial Companies (NBFCs) Equipment Loans are secured by first charge and hypothecation of specified machinery, equipment and vehicles.

c) Working Capital Demand Loan from Consortium Banks

i. Working Capital Demand Loans are secured by hypothecation of book debts, inventories and other current assets (excluding those charged to lenders of specificfunding projects) and certain Plant & Machinery and equipment valuing Rs. 282.92 million and Rs. 39.85 million not charged to other lenders. Further these loans are secured by mortgage of property in Land and Buildings owned by the Company ranking pari passu among the consortium banks aggregating to Rs. 101.53 million and lien of the Fixed Deposit ofRs. 4.20 million.

ii. The amount of Commercial Papers outstanding as at March 31, 2011 is Rs. 3,250 million (Rs. 3,200 million). The maximum amount outstanding during the year was Rs. 7,000 million (Rs. 4,500 million).

d) Project Specific Working Capital Loan from Banks

Project Specific Working Capital Loans from Banks are secured by hypothecation of the assets mentioned below for respective projects.

4. Foreign Currency Convertible Bonds

During the year, the balance of unconverted portion of Foreign Currency Convertible Bonds aggregating to Rs. 341.62 million (equivalent to UJSD 7.60 million) were redeemed along with a redemption premium (including withholding tax) of Rs. 162.46 million (equivalent to UJSD 3.61 million) The above mentioned premium amount has been charged to Securities Premium Account.

5. Contingent Liabilities

(Rs. im milliom)

As at As at

31.03.2011 31.03.2010

a) Bank Guarantees / Letters of Credit issued by the banks on behalf of the Compaq 40,459.23 32,283.70

b) Corporate Guarantees issued by the Company on behalf of its subsidiaries 6,587.50 5,055.00

c) Claims against the Company not acknowledged as debts 474.07 563.92

d) Inctome Tax demand under appeal 28.22 28.22

e) Disputed Value Added Tax / Service Tax 3,302.92 1,738.94

Estimated amount of contracts to be executed on capital account Rs. 119.76 million (Rs. 193.18 million) net of advances of Rs. 80.11 millions 171.11 million)

6. The tax relief available to the Company under Section 80IA of the Income Tax Act had in earlier years upto FY 2009 been transferred to a Special Reserve account. This tax relief was withdrawn with retrospective effect In the Finance Bill (No.2) 2009 and hence provision has been made for additional tax aggregating to Rs. 1,409.30 million in the previous year 200910. An amount of Rs. 1,411.00 million previously appropriated to a Special Reserve Account created for the purpose has been re credited to the Profit and Loss account during the previous year i.e. 200910.

7. Related Party Disclosure

Information regarding Related Party Transactions a* per Accounting Standard 18 a* notified in the Compa nies (Accounting Standards) Rules, 2006 is given below:

7.1 List of Related Parties and Relationships:

A Subsidiary {The ownership, directly or indirectly through subsidiary (ies)}

SI No. Name

1 IVRCtL PSCC Pipss Private Limited

2 IVR Brwiro ProjScEtS Private Limited

3 IVRCtLAssstS& Holdings Limited

4 HimdiKthamDorrOlivsr Limited

5 Alkor Pstroo Limited

6 IVRCCL Steel CtomstriMtiorK & Servictss Limited

7 jalardhar Amritsar Tollways Limited

8 Salsm Tollways Limited

9 Kumarapalyam Toll ways Limited

10 Cthsrwai Water Dssalimatiom Limited

11 First $TP Private Limited

12 IVRCtL Building ProdiMtS Limited

13 HDO (UK) Limited

(formerly IMCO (22010) Limited)

14 Davymarkham Limited

15 IVRCCL Irdors ffiujarat Tollways Limited

16 IVRCCL Cthsmgapalli Tollways Limited

17 IVRCCL Holdings & Servictes Pte. Limited

18 $PB Dsvslopsrs Private Limited

19 Siom Pamvsl Tollways Private Limited

20 IVR Hotels amdRssorts Limited

21 ffiso IVRCCL Emgimssrimg Limited

22 IVRCCL Msga Malls Limited

23 HDO Tscthrtologiss Limited

24 IVRCCL Patalagamga Tructk Tsrmimals Pvt. Limited

25 IVRCtLCGoa Toll ways Limited

26 IVRCtLCtadagua Hogsmakkal Water Trsatmsmt CCompamy Private Limited

27 IVRCCL Cthamdrapur Tollways Limited

28 IVRCCL International FZE

29 Davymarkham (India) Private Limited

30 Agaram Dsvslopsrs Private Limited

31 PapamkiKhi Dsvslopsrs Private Limited

32 Mummidi Dsvslopsrs Private Limited

33 Samattsri Dsvslopsrs Private Limited

34 Duvvda Dsvslopsrs Private Limited

35 Amrwpampattu Dsvslopsrs Private Limited

36 Ko«am Dsvslopsrs Private Limited

37 Tirumami Dsvslopsrs Private Limited

38 llavampsdu Dsvslopsrs Private Limited

39 Haripuram Dsvslopsrs Private Limited

40 CChodavaram Dsvslopsrs Private Limited

41 Vsdurwada Dsvslopsrs Private Limited

42 Rudravaram Dsvslopsrs Private Limited

43 ffiajuwaka Dsvslopsrs Private Limited

44 CGso Prims Dsvslopsrs Private Limited

45 Thsata Dsvslopsrs Private Limited

46 IVR Prims Dsvslopsrs (Mylapors) Private Limited

47 IVR Prims Dsvslopsrs (Palakkad ) Private Limited

48 IVR Prims Dsvslopsrs ((Guimdy) Private Limited

49 ffiamaa Dsvslopsrs Private Limited

50 Simhacthalam Prims Dsvslopsrs Private Limited

51 Siripuram Dsvslopsrs Private Limited

52 Kasibugga Dsvslopsrs Private Limited

53 Vijayawada Dsvslopsrs Private Limited

54 Eluru Dsvslopsrs Private Limited

55 IVR Prims Dsvslopsrs ( Nsllors) Private Limited

56 IVR Prims Dsvslopsrs (Amalapuram ) Private Limited

57 IVR Prims Dsvslopsrs ( Erods ) Private Limited

58 IVR Prims Dsvslopsrs ((Guirtur) Private Limited

59 IVR Prims Dsvslopsrs ( Kakimada ) Private Limited

60 IVR Prims Dsvslopsrs (Araku ) Private Limited

61 IVR Prims Dsvslopsrs ( Pudukkottai) Private Limited

62 Absorption Airctom Emgimssr Private Limited

63 IVR Prims Dsvslopsrs (Vamaprastha) Private Limited

64 IVR PUDL Rssorts & Ctlubs Private Limited

65 IVR Prims Dsvslopsrs (Thamdiarpst) Private Limited

66 IVR Prims Dsvslopsrs (ffiummidipiwdy) Private Ltd.,

67 IVR Prims Dsvslopsrs (Kodambakkam) Private Limited

68 IVR Prims Dsvslopsrs (Arumbakkam ) Private Limited

69 IVR Prims Dsvslopsrs (Arwa Nagar) Private Limited

70 IVR Prims Dsvslopsrs (Pallavaram ) Private Limited

71 IVR Prims Dsvslopsrs (Wsst Mambalam ) Private Ltd.,

72 Bibimagar Dsvslopsrs Private Limited

73 IVR Prims Dsvslopsrs (Amakapalls) Private Limited

74 IVR Prims Dsvslopsrs (Rajampsta) Private Limited

75 IVR Prims Dsvslopsrs (Tarwku) Private Limited

76 IVR Prims Dsvslopsrs (Rsd Hills) Private Limited

77 IVR Prims Dsvslopsrs (Rajahmiwdry) Private Limited

78 IVR Prims Dsvslopsrs (Tumi) Private Limited

79 IVR Prims Dsvslopsrs (Bobbilli) Private Limited

80 IVR Prims Dsvslopsrs (Bhimavaram) Private Limited

81 CGSVK Mampowsr Supply & Servicers Private Limited (formerly IVR Prims Dsvslopsrs (Valasaravakkam) Private Ltd)

82 IVR Prims Dsvslopsrs (Adayar) Private Limited

83 IVR Prims Dsvslopsrs (Amamthapuram) Private Limited

84 IVR Prims Dsvslopsrs (Psrumbadur) Private Limited

85 IVR Prims Dsvslopsrs (Egmors) Private Limited

86 IVR Prims Dsvslopsrs (Tambram) Private Limited

87 IVR Prims Dsvslopsrs (Ashram) Private Limited

88 IVR Prims Dsvslopsrs (Rstiral Homss) Private Limited

89 IVR Prims Dsvslopsrs (Avadi) Private Limited

90 IVR Prims Dsvslopsrs (Alwarpst) Private Limited

91 IVRCtL Multilevel CCar Parking Private Limited

B Associates (where the Company Exercises Significant influence)

SI No. Name

1 Viva ImfrastriMturs Pvt. Limited

2 Parssh ImfrastriMturss Private Limited

3 IVR Prims IT SEZ Private Limited

4 IVRCtL International ImfrastriMturss & Projscts LLC

( joint ventures

SI No. Name

1 BharwIVRCtL Associates

2 IVRCtLTamtiaGV)

3 IVRCtL, SEW & Prasad Hydsrabad j.V

4 IVRCtL, Navayuga & SEW joint Vsmturs

5 Navayuga, IVRCtL & SEW joint Vsmturs

6 IVRCtLHarshaGV)

7 SPCCLIVRCtL jV

8 IVRCtLjLGV)

9 UJANRajii IVRCtL CtorMriMtiomjV

10 IVRCtL KBLGV) Hydsrabad

11 IVRCtL KBL MEILGV) Hydsrabad

12 IVRCtL CCR28CG GV)

13 IVRCtL SEW & WPIL (JV) Hydsrabad

14 IVRCtLMBLGV) Hydsrabad

15 IVRCtL BATPASCCO WPIL & MHI GV) Hydsrabad

16 IVRCtL BATPASCCO ABB & AACG GV) Hydsrabad

17 IVRCtLCCR18CG Consortium GV)

18 MEIL IVRCtL HCCCt & WPIL GV)

19 IVRCtLKIPLGV)

20 IVRCtLRAJGV)

21 WNITYIVRdLJoimtVemtUMt

22 IVRCELSAISUJDHIROV)

23 CER18GIVRCELGV)

24 IVRCEL SLUSHEE Joimt VemtUire

D Enterprises owned or significantly influenced by key management personnel or their relatives

SI No. Name

1 S.V.EqUities Limited

2 Palladium Infrastructures & Projects Limited

3 Soma Hotels & Resorts Limited

4 Eragam Holdings Limited

5 Eragam Fimlease Limited

6 Irdus Palms Hotels & Resorts Limited

7 A.P.Emercom Engineers Private Limited

iF Key Managment Personnel

1. Mr. E. Sudhir Reddy Chairman & Mamagimg Director

2. Mr. K. Ashok Reddy Executive Director

3. Mr. R. Balarami Reddy Executive Director Fima«e & Group CFO FF

Relatives of Key Management Personnel

1. Mr. E. Ella Reddy Relative of Chairman & Mamagimg Director

2. Mrs. E. Sujatha Reddy Relative of Chairman & Mamagimg Director

3. Mrs. E. Indira Reddy Relative of Chairman & Mamagimg Director

4. Mr. E. Siddhamth Reddy Relative of Chairman & Mamagimg Director

5. Mr. E. Samjeeth Reddy Relative of Chairman & Mamagimg Director

6. Mr. E. Sumil Reddy Relative of Chairman & Mamagimg Director

7. Ms. E. Suha Reddy Relative of Director

8. Ms. E. Soma Reddy Relative of Director

9. Mrs. R. Vami Relative of Executive Director Fima«e & _Group CFO_

b) The expense pertaimimg to gratuity of Rs. 20.90 million (Rs. 22.73 million) has been considered in "Contribution to Provident, Superannuation and Other Funds" under Schedule 1 7.

8. Segment Reporting

a) Busings Segment

The Company has considered "Engineering & Construction" as one business segment for disclosure in the context of Accounting Standard 1 7 as notified in the Companies (Accounting Standards) Rules, 2006. The Company is engaged in the business of Engineering & Construction segment only for the year under report.

b) Geographical Segment

During the year under report, the Company has engaged in its business primarily within India. The conditions prevailing in India being uniform, no separate geographical disclosure is considered necessary

9. Employee Share based Plan ESOP 2007 Scheme

The IVRCL ESOP 2007 Scheme approved by the shareholders in the 20th Annual General Meeting held or* September 7, 2007 to grant 4,200,000 option, convertible in to 4,200,000 shares of Rs. 2 on exercise of options granted to the employees. The Company is yet to grant these options to the employees.

10. The net loss from derivative transaction in steel and crude oil of Rs. Nil (Rs. 3.15 million) have been charged to the Profit and Loss Account under the head Administrative and Other Expenses.

11. Sundry Debtors includes claims aggregating to Rs. 347.02 million (Rs. 347.02 million) receivable from certain contractee clients. The claims are on account of deviation in design, additional overheads, interest due to overstay and idle cost. The claims are considered realisabl based on favorable developments arising out of continuous contract management steps taken by the Company.

Sundry Debtors considered good include claims aggregating to Rs. 285.08 million (Rs. 291.36 million) under arbitration relating to certain projects. The management is of the view that these claims are fully recoverable.

12. Capital WorkinProgress includes assets held for sale of Rs. Nil (Rs. 150.20 million). During the year, the Company has decided to utilize these assets for business purposes and accordingly capitalized the acquisition value of Rs. 150.20 million under buildings.

13. Sale of Products include Rs. Mil (Rs. 1,060.15 million) being sale of project stores and consumables to subcontractors.

14. The Company holds 240,000 equity shares of Rs. 100 each amounting to Rs. 24.00 million in Telcon Ecoroad Resurfaces Private Limited.

A scheme of arrangement has been entered into between Telcon Ecoroad Resurfaces Private Limited and Telco Construction Equipment Company Limited for transfer and vesting of 'Road Laying Business' operations across India of Telcon Ecoroad Resurfaces Private Limited to Telco Construction Equipment Company Limited pursuant to sections 391 to 394 of the Companies Act, 1956.

The scheme of arrangement has been filed with the Hon'ble High Court of Karnataka and the approval from the court is pending.

15. During the year, the Company has purchased equity shares of Alkor Petroo Limited and IVRCL Building Products Limited from its subsidiary, IVRCL Assets & Holdings Limited. As a result of which the above said Companies have become direct subsidiaries of the Company.

16. Other Current Assets include claim* filed by the Company with Director General of Foreign Trade aggregating to Rs. 283.73 million (Rs. 215.91 million) towards reimbursement of duty paid under the Deemed Exports Scheme.

 
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