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Notes to Accounts of Ramky Infrastructure Ltd.

Mar 31, 2016

Deferred tax

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and is written-down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

Minimum Alternate Tax (MAT) Credit entitlement

Minimum Alternative Tax (’MAT’) under the provisions of the Income Tax Act, 1961 is recognized as current tax in the statement of profit and loss. The credit available under the Act in respect of MAT paid is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each balance sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

1. Impairment of assets

The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of amortized historical cost.

2. Accounting for interest in joint ventures

In respect of work sharing joint venture arrangements revenues, expenses, assets, liabilities and contingent liabilities are accounted for in the Company’s books to the extent work is executed by the Company.

In respect of jointly controlled entities, the share of profits or losses is accounted as and when dividend/share of profit or loss is declared by the entities.

3. Provisions and contingent liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognized when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event, based on a reliable estimate of such obligation.

3b. Rights, preferences and restrictions attached to the equity shares:

The Company has only one class of equity shares having par value of '' 10 each. Each shareholder is eligible for one vote per share held. The dividend, if proposed by the Board of Directors, is subject to the approval of the shareholders in the ensuing general meeting. 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. The distribution will be in proportion to the number of equity shares held by equity shareholders.

4. Terms of security

a) Working capital limits (Cash credit/LC/BG) are secured first pari-passu charge on entire (both present and future) current assets and non-current assets of the Company and second pari-passu charge on unencumbered (both present and future) fixed assets of the Company.

b) Term Loan, Short Term Loans, Priority Debt, FITL and WCTL are secured by first pari-passu charge on unencumbered (both present and future) fixed assets of the company and second pari-passu charge on entire (both present and future) current assets and non-current assets of the company.

c) Entire term loans, short terms loans, HP Loans (Axis Bank and ICICI Bank), Priority Debt, FITL, WCTL, fund based and non-fund based working capital limits are further secured by personal guarantee of Promoter (i.e. A Ayodhya Rami Reddy). Further, working capital loans and term loans from State Bank of India (SBI) are further secured by personal guarantee of M Venu Gopal Reddy (Relative of promoter) and personal guarantee of Promoter of the Company (i.e. A Ayodhya Rami Reddy) and corporate guarantee of certain subsidiary companies (refer note 39)

5. Terms of interest and repayment

As more fully described in note 41, the Board of Directors of the Company in its meeting held on February 13, 2015 had accorded its approval for restructure of the debts of the Company under Joint lender Forum (JLF). The proposal is only for the company and not for any of its subsidiaries and associates. JLF in its meeting held on June 12, 2015 has approved the scheme submitted by the Company. Effect of debt restructuring scheme in the books of account has been given as follows.

a) Working Capital Term Loan - I

Overdrawn in working capital limits, comprising devolved Letter of Credits (pre and post Cut-off Date {(COD) i.e October 1, 2014} upto June 12, 2015), invoked Bank Guarantees, interchangeability/other irregularity and shortfall in Drawing Power amounting to Rs, 453.76 Crore has been carved out as Working Capital Term Loan - I (WCTL - I). WCTL - I shall be repaid after a moratorium of 8 Quarters from COD in 30 structured quarterly installments, commencing from quarter ending December 31, 2016. WCTL - I carries rate of interest, SBI Base Rate plus 100 basis points p.a. from cut-off date with annual reset.

b) Working Capital Term Loan - II

Invoked Bank Guarantees from COD to March 31, 2015 amounting to Rs, 37.34 Crore (Rs, 8.31 Crore upto June 12, 2015) has been carved out as Working Capital Term Loan - II (WCTL - II). WCTL - II shall be repaid after a moratorium of 8 Quarters from COD in 30 structured quarterly instalments, commencing from quarter ending December 31, 2016. WCTL - II carries rate of interest SBI Base Rate plus 100 basis points p.a. from cut-off date with annual reset).

c) Priority Debt

Rs, 128.94 Crore has been availed out of Rs, 250 Crore Priority Debt sanctioned. Priority Debt shall be repaid after a moratorium of 8 Quarters from the date of disbursement, in 6 structured quarterly instalments, commencing from quarter ending December 31, 2016. Priority Debt carries rate of interest, SBI Base Rate plus 100 basis points from cut-off date with annual reset.

d) Funded Interest term Loan

Rs, 167.58 Crore have been availed out of Rs, 288.03 Crore. FITL shall be repaid after a moratorium of 8 Quarters from COD in 6 structured quarterly instalments, commencing from quarter ending December 31, 2016.

e) Other term loans

Term loan of Rs, 76.90 Crore has been availed out of Rs, 199.13 Crore. Other term loan shall be repaid after a moratorium of 8 Quarters from COD in 2 structured annual installments, commencing from quarter ending December 31, 2016. TL carries rate of interest SBI Base Rate plus 100 basis points p.a. from cut-off date with annual reset. Further, Term loan of Rs, 44.78 Crore has been availed out of Rs, 80 Crore and it shall be repaid after a moratorium of 8 Quarters from COD in 16 structured Quarterly installments, commencing from quarter ending December 31, 2016.

f) Equipment and vehicle loans

These loans are repayable in equated monthly installments (i.e. 30 to 60 EMIs) beginning along the month subsequent to the receipt of the loan along with interest in the range of 8.85% p.a. to 13.06% p.a. against loans taken from others. Equipment and vehicle Loan from others are secured by way of hypothecation of respective equipment/vehicle.

g) Unsecured from related parties

In respect of unsecured loans from related parties, loan aggregating to Rs, 84.35 Crore (interest rate 14% per annum) is payable within 36 months or at the earliest convenience of the borrower after a moratorium of 2 years from the date of first disbursement (i.e. April 30, 2015). Further, as agreed with lender of term loan aggregating to Rs, 55 Crore (interest rate 14% per annum), and Rs, 18.59 Crore (interest rate 18% per annum), it shall not be repayable within 12 months from balance sheet date.

h) Cash Credit

Rs, 532.11 Crore stands outstanding as on March 31, 2016. CC shall be repaid (i.e. March 31, 2016) after a moratorium of 6 Quarters from COD. TL carries rate of interest SBI Base Rate plus 100 basis points p.a. from cut-off date with annual reset.

Notes :

a) 9,660,009 (previous year: 9,660,009) equity shares have been pledged in favour of Infrastructure Development Finance Company Limited for the loan availed by MDDA-Ramky IS Bus Terminal Limited.

b) 14,800,000 (previous year: 14,800,000) equity shares and 2,950,000 (previous year : 2,950,000) preference shares have been pledged in favour of IDBI Trusteeship Services Limited for loans availed by Ramky Elsamex Hyderabad Ring Road Limited.

c) 9,129,000 (previous year: 9,129,000) equity shares have been pledged in favour of Infrastructure Development Finance Company Limited for loan availed by Ramky Pharma City (India) Limited.

d) 15,766 (previous year: 15,766) equity shares of Srinagar Banihal Expressway Limited pledged in favour of ICICI bank Limited for the loan availed by Srinagar Banihal Expressway Limited.

e) 13,005 (previous year: 13,005) equity shares have been pledged in favour of Infrastructure Development Finance Company for loan availed by Gwalior Bypass Project Limited.

f) 6,130,200 (previous year: 6,130,200) equity shares have been pledged in favour of IDBI Trusteeship Services Limited for the loan availed by Sehore Kosmi Tollways Limited. 61,30,200 (previous year: Nil) equity shares have been pledged in favour of IDBI Trusteeship Services Limited for the loan availed by Sehore Kosmi Tollways Limited.

61,30,200 (previous year: Nil) equity shares have been pledged in favour of IDBI Trusteeship Services Limited for the loan availed by Sehore Kosmi Tollways Limited.61,30,200 (previous year: Nil) equity shares have been pledged in favour of IDBI Trusteeship Services Limited for the loan availed by Sehore Kosmi Tollways Limited.61,30,200 (previous year: Nil) equity shares have been pledged in favour of IDBI Trusteeship Services Limited for the loan availed by Sehore Kosmi Tollways Limited.

g) 25,500 (previous year: 25,500) equity shares have been pledged in favour of Oriental Bank of Commerce for the loan availed by Agra Etawah Tollways Limited.

h) 8,681,220 (previous year: 8,681,220) equity shares have been pledged in favour of Axis Bank Limited for the loan availed by Hospet Chitradurga Tollways Limited.

i) Preference shares of these companies have been pledged in favour of State Bank of India for the loan availed by the Company. j) The following equity shares have been pledged in favour of State Bank of India for the loan availed by the Company:

k) Became an associate effective from 31 March 2014 due to further investment by other shareholders.

l) In the previous year, 46,701,998 equity shares have been pledged in favour of SBICAP trustee company ltd, 7,005,300 equity shares have been pledged in favour of ICICI bank for the loan availled by NAM Expressway Ltd.

m) In the previous year 39,000,000 equity shares have been pledged in favour of SBICAP trustee company ltd

(c) Impact of pending legal cases

The Company is party to several legal suits on construction contract terms related disputes with vendors and contracted/clients, pending before various courts in India as well as 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.

6. Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense for the period under cancellable leases was Rs, 4.65 crore (previous year: Rs, 5.90 crore) has been disclosed as ’Rent’ in the statement of profit and loss.

*The Company has no dilutive instruments during the year ended March 31, 2016. As such Diluted Earnings per share equals to Basic Earnings per share.

7. As at March 31, 2016, the Company has recognized deferred tax asset aggregating to Rs, 396.02 Crore including an amount of (Rs,13.07) crore recognized during the year on account of timing differences on unabsorbed depreciation, business losses and other timing differences incurred by the Company during the year. Based on unexecuted orders on hand, which in the opinion of the management does meet the criteria of establishing the virtual certainty of sufficient future taxable income for realization of deferred tax assets as enunciated in Accounting Standard 22 "Accounting for Taxes on Income" (AS 22). (refer note 14).

8. As at March 31 2016, certain Trade Receivable, retention money, withheld money, security deposit, non-moving inventory/ work in progress and various loans & advances aggregating to Rs, 508.49 Crore are outstanding which are subject matters of arbitration procedures/negotiations with the customers and contractors due to foreclosure of contracts and other disputes . The management of the Company is in continuous engagement/ negotiation with the respective contracted / clients to recover such amounts, in opinion of the management such receivables are good and no material adjustments would be required against this in future.

9. During the year, the Company has recognized a claim of Rs, 225.04 Crore on account of cost overrun and additional quantities executed in respect of a contract. The Company has revised EPC contract entered into with the concessionaire in respect of such overrun and additional quantities. The claim is assessed by the lenders’ independent engineer and the concessionaire is in the process of availing additional funding/refinance from the lenders and to comply with such other conditions precedent to no objection given by the employer.

10. During the year the Company has recognized insurance claim Income aggregating to Rs, 62.94 Crore to the extent measured reliably and accounted/ charged off related additional costs incurred towards damage by floods in respect of insurance claim lodged by concessionaire of the Project, a subsidiary Company due to flood on Company’s road project, at Srinagar in Jammu and Kashmir. The management of the company does not expect any material adjustment in this respect in future.

11.. Liabilities no longer required written back

a. During the year the management has written back liabilities no longer required aggregating to Rs, 164.95 Crore which were outstanding for a long period of time and being carried by the management as a measure of prudence. Such written back liabilities include trade payables, security deposits, retention money and withheld moneys which were outstanding against the projects related work could not be certified by the contracted/customer. The management is confident that the no material adjustment will be required in future.

b. During the year the Company has entered into a settlement agreement with one of the lender which has resulted into write back of loan liability aggregating to Rs, 58.59 Crore over and above the settlement amount. This has been disclosed as exception items.

12. During the year ended March 31, 2016 the Company has a Net profit of Rs, 12.36 Crore and accumulated losses of Rs, 264.46 Crore (Rs, 276.72 Crore as March 31, 2015). To meet out its cash flow requirement and reduce its finance and other cost, the company has plans to sale/divest its stake in certain subsidiaries and confident of achieving profitable operations and meet its obligation.

13. Prior period income aggregating to Rs, 6.16 Crore represents interest charged on the loans and advances given in earlier years (Refer Note 26).

14. Segment information

a) Business Segment:

The services rendered by the Company primarily consist of execution of civil contracts on turnkey basis. The Company is managed organizationally as a unified entity and not along product lines and accordingly, there is only one business segment.

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.

15. Related party disclosures

a) List of related parties:

i) Subsidiary Companies including a step down subsidiary Company

Name of the related party Name of the related party

1 Ramky Pharma City (India) Limited 13 Ramky Multi Product Industrial Park Limited

2 MDDA-Ramky IS Bus Terminal Limited 14 Ramky Food Park (Karnataka) Limited

3 Ramky Food Park (Chattisgarh) Limited 15 SehoreKosmiTollways Limited

4 Naya Raipur Gems and Jewellery SEZ Limited 16 Agra EtawahTollways Limited

5 Ramky Herbal and Medicinal Park (Chattisgarh) Limited 17 Hospet Chitradurga Tollways Limited

6 Ramky - MIDC Agro Processing Park Limited 18 Frank Lloyd Tech Management Services Limited

7 Ramky Engineering and Consulting Services (FZC) 19 Jabalpur Patan Shahpura Tollways Limited

8 Ramky Elsamex Hyderabad Ring Road Limited 20 Ramky Infrastructure SociedadAnonimaCerradda (Step-

9 Ramky Towers Limited down subsidiary company)

10 Ramky Enclave Limited 21 JNPC Pharma Innovation Limited

(Step-down subsidiary company)

11 Ramky Esco Limited v H J H

_ ,. . 22 Ramky Engineering and Consulting Services Gabon SA

12 Srinagar Banihal Expressway Limited ,

(Step-down subsidiary company)

ii) Key management personnel (KMP)

S.No. Name of the KMP Designation

1 A Ayodhya Rami Reddy Executive Chairman (Joined on June 20, 2014)

2 Y R Nagaraja Managing Director

iii) Enterprise where KMP have significant influence

S.No. Name of the related party S.No. Name of the related party

1 Ramky Enviro Engineers Limited 7 Ramky Wavoo Developers Private Limited

2 Ramky Estates and Farms Limited 8 Delhi MSW Solutions Limited

3 Mumbai Waste Management Limited 9 Smilax Laboratories Limited

4 West Bengal Waste Management Limited 10 Ramky Foundation

5 Ramky Energy & Environment Limited 11 Hyderabad Integrated MSW Limited

6 Ramky Advisory Services Limited 12 Chhattisgarh Energy Consortium (India) Private Limited

iv) Enterprises where significant influence exists (Associates)

S. No. Name of the related party

1 Ramky Integrated Township Limited

2 Gwalior Bypass Project Limited

V) Enterprises where joint control exists (jointly controlled entities)

S. No. Name of the related party

1 N.A.M. Expressway Limited

2 Jorabat Shillong Expressway Limited

3 Ramky - SMC JV

4 Bilil-RIL JV

5 Ramky-Barbrik JV

vi) Joint ventures (JV)

S. No. Name of the related party

1 Ramky - Elsamex JV

2 Ramky-VSM JV

3 Srishti -Ramky JV

4 Ramky -WPIL JV

5 Somdutt Builders-Ramky JV

6 ZVS Ramky Progressive

7 Ramky ECAIPL JV

* Provision made during the year amounting to NIL (previous year: Rs, 0.02 crore)

“Interest free loan.

16. The Company has executed the final debt restructuring under Joint lender forum/other definitive documents on June 12, 2015 with the majority of participating lenders banks, consequent to approval from Joint lender forum. In accordance with the debt restructuring scheme, the 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 debt restructuring scheme with effect from October 1, 2014 (the "cut-off date", the "COD").

Pursuant to debt restructuring scheme, from COD the interest on the restructured debts has been recomputed and provided at the effective interest rates as per the debt restructuring 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 debt restructuring scheme. The Company has accounted for debt restructuring scheme (reclassifications and interest calculations) in the books for the year ended March 31, 2016 as follows:

a. The rate of interest has been changed/ revised and reduced to State Bank of India (SBI) base rate plus 100 Basis points (currently effective rate is 11% per annum with effect from the COD). Further, a sum of Rs, 27.69 crore, which represents reduction in interest for the period from the COD to the date of giving effect of debt restructuring 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. The interest due and accrued with effect from the COD to March 31, 2016 on cash credit facilities and up to September 30, 2016 on other term borrowings shall be funded and converted into Funded Interest Term Loan (FITL),accordingly till March 31, 2016, Rs, 167.58 crore has been converted into FITL. Further, the lenders shall have the option to convert 25% of FITL into equity in March 2016 but the same has not been exercised by the Lenders. Further the State Bank of India (SBI) has approved the waiver of conversion of FITL into equity subject to certain conditions and the company is in process of complying with such conditions.

Further debt restructuring scheme envisage:

Cash credit/LC/BG;

a. First pari-passu charge on entire (both present and future) current assets and non-current assets of the company.

b. Second pari-passu charge on unencumbered (both present and future) Fixed assets of the company.

Term Loans, Priority debt, FITL and WCTL;

a. Firstpari-passu charge on unencumbered (both present and future) Fixed assets of the company.

c. Second pari-passu charge on entire (both present and future) current assets and non-current assets of the company.

Promoter contribution:

Promoter contribution and additional funds bought by them should be higher of 25 % of lenders sacrifice or 2% of restructured debt which is Rs, 53.96 crore. Additional promoter contribution should be brought from the net proceeds of the five major operating subsidiaries.

17. There is no micro or small enterprises, under the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues, which are outstanding as at March 31, 2016 (FY 14-15: Rs, NIL).The Company has not received any claim for interest from any supplier under the said Act.

18. Disclosures pursuant to Accounting Standard (AS) 7 - Construction Contracts:

In terms of the disclosures required to be made under the Accounting Standard 7 for ’Construction Contracts’ as notified in the Companies (Accounting Standards) Rules, 2006, the amounts considered in the financial statements up to the Balance Sheet date are as follows:

19. Contract revenue earned in foreign currency on accrual basis during the year is Nil.

20. Value of imports on C.I.F. basis (on accrual basis) in respect of Plant & equipment for current is Nil.

21. Additional information as required under paragraph 5 of the part II of the Schedule III to the Act to the extent either "Nil" or "Not Applicable" has not been furnished.

22. Comparative figures

Previous year’s figures have been regrouped/reclassified, where necessary, to confirm to current year’s classification.


Mar 31, 2015

1. Company overview

Ramky Infrastructure Limited ("the Company") is an integrated construction, infrastructure development and management company headquartered in Hyderabad, India. The Company diversified in a range of construction and infrastructure projects in various sectors such as water and waste water, transportation, irrigation, industrial construction and parks (including SEZs), power transmission and distribution, and residential, commercial and retail property. A majority of the development projects of the Company are based on Public-Private Partnerships (PPP) and are operated by separate Special Purpose Vehicles (SPV) promoted by RIL, joint venture partners and respective Governments.

2. Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense for the period under cancellable leases was Rs. 5.90crores(previous year: Rs. 8.26crores) has been disclosed as 'Rent' in the statement of profit and loss.

3. As at March 31, 2015, the Company has recognized deferred tax asset aggregating to Rs. 409.08 Crore including an amount of Rs. 209.88 crore recognized during the year on account of timing differences on unabsorbed depreciation,business losses and other timing differences incurred by the Company during the year. Based on unexecuted orders on hand, which in the opinion of the management does meet the criteria of establishing the virtual certainty of sufficient future taxable income for realisation of deferred tax assets as enunciated in Accounting Standard 22 "Accounting for Taxes on Income" (AS 22). (refer note 14)

4. During the year, Company's road project, at Srinagar in Jammu and Kashmir, has impacted due to the floods. The insured concessionaire of the Project, a subsidiary Company, has lodged a claim of Rs. 141.51Crore for the damage to the project materials and assets located at the site with the insurers. After an initial assessment/survey, an amount of Rs. 14.99Crore was released by the insurer on provisional basis and the same was received by the company being a principal contractor. Pending final settlement of claim, no adjustment has been made in the financial statements for the year. The management of the company does not expect any material adjustment for loss to be provided for in this respect.

5. During the year ended 31 March 2015, an amount of Rs. 580.78 crores (including amount pertaining to advances, retention money, contract work-in- progress and performance bank guarantees invoked) is receivable from customers against the contracts not been pursued on account of foreclosure by the Company/disputes with customers. The Management of the Company, keeping in view the long term nature of the contracts, terms and condition implicit in these contracts and the ongoing discussion based on which steps to recover are currently in process, is confident of recovering the amount as they are contractually tenable.

6. During the year the Company has incurred a Net Loss of Rs. 445.48 Crore resulting into accumulated losses of Rs. 276.72 Crore and erosion of its reserves. The Company has obligations towards borrowings aggregating to Rs. 1,565.13 Crore including an amount of Rs. 1383.61 crore falling due over next twelve months period, obligations pertaining to operations including unpaid creditors and statutory dues as at March 31, 2015. These matters require the Company to generate additional cash flows to fund the operations as well as other statutory obligations notwithstanding the current level of low operating activities. The Company has plans to divest its stake in certain subsidiaries undertaking BOT projects for generation of cash flows and during the year, approached lender Bankers with a scheme seeking certain reliefs in relation to repayment timelines of loans and accumulated unpaid interest which was approved by the Bankers with certain conditions. The Company is confident of implementing the divestment and approved restructuring scheme with lenders and meeting its obligations in due course of time.

7. During an earlier year ended March 31, 2013 a search and seizure operation under section 132 of the Income Tax Act, 1961 was carried out by the Income Tax Authority on the Company's premises. The Company had accepted for additional disallowances and filed revised returns for the respective previous year and accounted respective tax expenses of Rs.10.78 Crore. Further, the Company made a provision for income tax aggregating to Rs. 66.56 crore during financial year ended March 31, 2012, on account of disallowance of the deductions claimed by the Company under Section 80-IA (4) of the Income Tax Act, 1961 relating to assessment years 2003-04 to 2013-14. During the year, based on the centralized assessment for the financial years upto 2011-12, a refund of Rs. 51.89 crores (including Rs. 11.99 crores for interest) as ascertained by department, has been accounted for during the year ended March 31, 2015. This has resulted into reversal of provision of income tax amounting to Rs. 74.62 crores, including Rs. 62.47 Crore directly credited to the surplus in statement of profit and loss account balance under "Reserve and Surplus" for the year ended March 31, 2015. (Refer Note 4)

8. Prior period expenses' aggregating to Rs. 33.64 Crore represents charge of depreciation on shuttering material amounting to Rs. 15.80 Crore and unrealizable VAT receivable recognized in earlier years amounting to Rs. 17.84 Crore. (Refer Note 26)

9. In accordance with the Companies Act, 2013, the Company has revised the useful life of its fixed assets to comply with the useful life as mentioned in the schedule - II of the said Act. As per the transitional provisions, the Company has adjusted Rs. 3.41 Crore (net of deferred tax of Rs. 1.31 crore) from the opening balance of retained earnings. (Refer Note 4)

10. Segment information

a) Business Segment:

The services rendered by the Company primarily consist of execution of civil contracts on turnkey basis. The Company is managed organizationally as a unified entity and not along product lines and accordingly, there is only one business segment.

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.

11. Related party disclosures a) List of related parties:

i) Subsidiary Companies including a step down subsidiary Company Name of the related party

1 Ramky Pharma City (India) Limited

2 MDDA-Ramky IS Bus Terminal Limited

3 Ramky Food Park (Chattisgarh) Limited

4 Naya Raipur Gems and Jewellery SEZ Limited

5 Ramky Herbal and Medicinal Park (Chattisgarh) Limited

6 Ramky - MIDC Agro Processing Park Limited

7 Ramky Engineering and Consulting Services (FZC)

8 Ramky Elsamex Hyderabad Ring Road Limited

9 Ramky Towers Limited

10 Ramky Enclave Limited

11 Ramky Esco Limited

12 Srinagar Banihal Expressway Limited

13 Ramky Multi Product Industrial Park Limited

14 Ramky Food Park (Karnataka) Limited

15 Sehore Kosmi Tollways Limited

16 Agra Etawah Tollways Limited

17 Hospet Chitradurga Tollways Limited

18 Frank Lloyd Tech Management Services Limited

19 Jabalpur Patan Shahpura Tollways Limited

20 Ramky Infrastructure Sociedad Anonima Cerradda (Step-down subsidiary company)

21 JNPC Pharma Innovation Limited (Step-down subsidiary company)

22 Ramky Engineering and Consulting Services Gabon SA (Step-down subsidiary company)

12. There is no micro or small enterprises, under the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues, which are outstanding as at March 31, 2015 (FY 13-14: NIL).The Company has not received any claim for interest from any supplier under the said Act.

13. Disclosures pursuant to Accounting Standard (AS) 7 - Construction Contracts:

In terms of the disclosures required to be made under the Accounting Standard 7 for 'Construction Contracts' as notified in the Companies (Accounting Standards) Rules, 2006, the amounts considered in the financial statements up to the Balance Sheet date are as follows:

14. Contract revenue earned in foreign currency On accrual basis during the year is Rs. Nil and for the previous year ended March 31, 2014 is Rs. 0.82 Crore.

15. Value of imports on C.I.F. basis (on accrual basis) in respect of Plant & equipment for current year is Rs. Nil and previous year ended March 31, 2014 is Rs. 6.74 Crore.

16. Additional information as required under paragraph 5 of the part II of the Schedule III to the Act to the extent either "Nil" or "Not Applicable" has not been furnished.

17. Comparative figures Previous year's figures have been regrouped/reclassified, where necessary, to confirm to current year's classification.


Mar 31, 2013

Company overview

Ramky Infrastructure Limited (RIL) is an integrated construction, infrastructure development and management company headquartered in Hyderabad, India. The Company diversified in a range of construction and infrastructure projects in various sectors such as water and waste water, transportation, irrigation, industrial construction and parks (including SEZs), power transmission and distribution, and residential, commercial and retail property. A majority of the development projects of the Company are based on Public-Private partnerships (PPP) and are operated by separate Special Purpose Vehicles (SPV) promoted by RIL, joint venture partners and respective Governments.

1.1 Commitments and contingent liabilities: (Rs. in Crores)

As at As at 31 March 2013 31 March 2012

i) Commitments:

(a) Equity commitments towards subsidiaries and jointly controlled entities 825.92 882.85

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 20.10 6.49

ii) Contingent liabilities:

(a) Performance Guarantees issued by banks: On behalf of the subsidiaries associate and other 205.44 111.19

(b) Corporate guarantees to banks and financial institutions against credit facilities extended to: Subsidiaries, step-down subsidiary and jointly controlled entity 280.44 303.73

iii) Claims against the Company not acknowledged as debts in respect of:

(a) Indirect tax and other matters 213.01 140.76

(b) Disputed claims from customers and vendors 32.58 1.77

1.2 Nature, terms of repayment and delays in repayment of borrowings are as follows: Secured borrowings:

a. Term loan from bank amounting to Rs. 150 crores (previous year Rs. 75 crores) are secured by way of residual charge over moveable fixed and current assets (both present and future) ranking subsequent to prior charge created in favour of other lenders and first and exclusive ranking charge over all the receivables both present and future arising out of debt infused in the infrastructure project companies and by way of first and exclusive ranking charge over Debt Service Reserve Account (DSRA). This loan is repayable in 24 equal quarterly instalments starting at the end of 15 months from the first draw down date (i.e. 8 February 2012) along with interest of 10% p.a plus spread payable on monthly basis.

b. Term loan from bank amounting to Rs. Nil (previous year Rs. 45 crores) was secured by pari-passu charge on the entire project specific current assets. Loan amount was repaid by the Company during the current year. Interest rate was applicable at 11.75% p.a to 12.00% p.a. paid on monthly basis.

c. Equipment and vehicle loans from banks amounting to Rs. 28.29 crores (previous year: Rs. 36.75 crores) and from others amounting to Rs. 81.23 crores (previous year: Rs. 95.35 crores) are secured by way of hypothecation of the respective equipment/ vehicles. These loans are repayable in monthly payment of equated monthly instalments beginning along the month subsequent to the loan along with interest in the range of 7.05% p.a. to 12.00% p.a. and 6.55% p.a. to 13.50% p.a. against loans taken from banks and others respectively.

d. Buyers credit from banks amounting to Rs. 24.14 crores (previous year: Rs. 24.63 crores) are secured by way of first pari-passu charge on the current assets of the Company namely raw materials, contract work-in-progress, bills receivable and book debts and all other movables both present and future of the Company and exclusive charge on the capital equipment imported with loan proceeds. Buyers credit are obtained on short-term basis and repayable within 360 days from the date of drawdown along with the interest in the range of 1.94% p.a. to 3.30% p.a

e. Cash credits from banks amounting to Rs. 582.49 crores (previous year: Rs. 242.22 crores) and working capital loans from banks amounting to Rs. 230.00 crores (previous year Rs. 409.25 crores) are secured by way of:

(i) first pari-passu charge on the current assets of the Company namely raw materials, contract work-in-progress, bills receivable and book debts and all other movables both present and future of the Company along with other working capital lenders; and

(ii) first charge on the entire unencumbered fixed assets of the company ranking pari-passu basis to all the working capital lenders.

Cash credits are repayable on demand along with interest in the range of 10.20% p.a. to 14.50% p.a. (previous year: 12.50% p.a. to 14.45% p.a.) payable on monthly basis. Working capital loans are repayable within 90 to 180 days from the date of drawdown along with the interest in the range of 11.50% p.a. to 13.50% p.a. (previous year: 11.75% p.a. to 12.50% p.a.) payable on monthly basis.

f. Loan outstanding for repayment represent working capital loan from a bank amounting to Rs. 24.96 crores were secured by way of post-dated cheques submitted by the Company. The Company has defaulted in the repayment of the working capital loan which was due on 2 March 2013. The default is continuing at the balance sheet date. The said loan carries interest rate in the range of 12.50 % p.a. to 12.60% p.a. payable on monthly basis.

Unsecured borrowings:

Unsecured loans from corporate are repayable on demand and along with the interest rate applicable at 12.50% p.a.

1.3 Segment information

a) Business Segment:

The services rendered by the Company primarily consist of execution of civil contracts on turnkey basis. The Company is managed organizationally as a unified entity and not along product lines and accordingly, there is only one business segment.

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.

1.4 During the year a search and seizure operation under Section 132 of the Income Tax Act, 1961 was carried out by the Income Tax Authorities on the Company''s premises. The Management has agreed to cooperate and provide clarifications on the information collected and further information as and when sought for by the Income Tax Authorities. The Company has till date not been served with a show cause notice/demand arising from the search operations and consequently there is an uncertainty on the final outcome. The Company believes that it has complied with all applicable rules and regulations.

1.5 Related party disclosures

Enterprise where control exists (Subsidiaries and step-down subsidiary)

l Ramky Pharma City (India) Limited

l MDDA-Ramky IS Bus Terminal Limited

l Ramky Food Park (Chattisgarh) Limited

l Naya Raipur Gems and Jewellery SEZ Limited

l Ramky Herbal and Medicinal Park (Chattisgarh) Limited

l Ramky - MIDC Agro Processing Park Limited

l Ramky Engineering and Consulting Services (FZC)

l Gwalior Bypass Project Limited

l Ramky Elsamex Hyderabad Ring Road Limited

l Ramky Towers Limited

l Ramky Enclave Limited

l Srinagar Banihal Expressway Limited

l Ramky Multi Product Industrial Park Limited

l Ramky Food Park (Karnataka) Limited

l Sehore Kosmi Tollways Limited

l Agra Etawah Tollways Limited

l Hospet Chitradurga Tollways Limited

l Frank Lloyd Tech Management Services Limited

l Ramky Infrastructure Sociedad Anonima Cerradda

l Jabalpur Patan Shahpura Tollways Limited

l Ramky Esco Limited

l JNPC Pharma Innovation Limited

l Ramky Engineering and Consulting Services Gabon SA

Enterprises where joint control exists (Jointly controlled entities)

l N.A.M.Expressway Limited

l Jorabat Shillong Expressway Limited

Enterprises where significant influence exists (Associates)

l Ramky Integrated Township Limited

l JNPC Pharma Innovation Limited (upto 22 November 2012)

Enterprises where Key Management Personnel have significant influence (Significant interest entities) (SIE)

l Ramky Enviro Engineers Limited

l Ramky Estates and Farms Limited

l Mumbai Waste Management Limited

l Ramky Finance & Investment Private Limited

l SembRamky Environmental Management Private Limited

l Ramky Global Solutions Private Limited

l Tamil Nadu Waste Management Limited

l West Bengal Waste Management Limited

l Ramky Energy & Environment Limited

l RVAC Facilities Management (India) Limited

l Ramky Villas Limited

l Ramky Advisory Services Limited

l Delhi MSW Solutions Limited

l Smilax Laboratories Limited

l Tridax Laboratories Limited

l Ramky Foundation

l Ramky Academy of Culture & Education

l Dakshayani Academy

l Hyderabad Integrated MSW Limited

l Chhattisgarh Energy Consortium (India) Private Limited

l Ramky Wavoo Developers Private Limited

Key Management Personnel (KMP) l A Ayodhya Rami Reddy

l Y R Nagaraja

1.6 Employee benefit plans

a) Liability for retiring gratuity benefit obligation as on 31 March 2013 is Rs. 1.89 crores (previous year: Rs. 2.43 crores) of which Rs. 0.39 crores (previous year: Rs. 0.56 crores) is funded with the Life Insurance Corporation of India. The balance of Rs. 1.50 crores (previous year: Rs. 1.87 crores) is included in provision for gratuity. The expected contribution is based on the same assumptions used to measure the Company''s gratuity obligations as of 31 March 2013.

b) Liability for cost of compensated absence as on 31 March 2013 is Rs. 3.67 crores (previous year: Rs. 3.80 crores). Cost of compensated liability is a non funded liability.

c) Contribution towards employee provident fund for the year ended 31 March 2013 is Rs. 6.23 crores (previous year: Rs. 5.87 crores).

d) The liability for gratuity and cost of compensated absences has been actuarially determined and provided for in the books.

e) Employee benefit plans The following tables set out the status of the gratuity plan as required under AS 15

1.7 The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2013 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Note: This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 and has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.8 The Company has claimed deduction under Section 80-IA (4) of the Income Tax Act, 1961 in its returns of income relating to assessment years 2003-04 to 2011-12. However, the Department contested the same on the grounds that the Company was not "developing" the infrastructure facility and disallowed the deduction for assessment years 2003-04 to 2009-10. The Company filed appeal against these orders with CIT (Appeals), of which the appeals with respect to assessment years 2003-04 to 2008-09 were dismissed. The Company has filed an appeal with Income Tax Appellate Tribunal (ITAT) for these assessment years, which is currently pending.

The Company is contending its case before the appropriate appellate authorities, however the Company not, withstanding the fact that its position in the matter is strong on merits has based on an internal assessment and various factors such as industry practice, legal counsel advice etc. decided to make a provision for the total deductions under the said Sections and for the assessment years 2003-04 to 2011-12 amounting to Rs. 66.56 crores. As this provision related to taxes for earlier years the same had been directly debited to the surplus in statement of profit and loss account balance under "Reserves and Surplus" for the year ended 31 March 2012.

1.9 IPO proceeds utilization:

During the year 2010-11, the Company had issued 7,777,777 equity shares having a face value of Rs. 10 per share at a price of Rs. 450 per share (including a premium of Rs. 440 per share) through IPO. The amount raised Rs. 350 crores has been utilised in the following manner:

1.10 Trade receivables as at 31 March 2013 include Rs. 42.08 crores relating to receivables long outstanding from Government and private parties, Rs. 0.90 crores relating to retention money outstanding beyond the defect liability period, Rs. 13.81 crores relating to amounts withheld by the client outstanding for more than 3 years. Management has evaluated recoverability keeping in view the long term nature of the contracts, terms and conditions implicit in the contract and the ongoing discussions based on which steps to recover are currently in process. Management believes that though these amounts are long outstanding, these are good and recoverable as they pertain to delays attributable to the customers for work carried out on customer work orders, claims for amounts pertaining to changes in scope/work order variations, claims for amounts withheld on beyond the normal credit terms. Management also believes that the delay in collections is a temporary phenomenon on account of the overall macroeconomic environment and the consequent slowdown in the infrastructure sector. Further, based on the ongoing discussions with the customers it is confident of fully recovering its debts as these are contractually tenable and accordingly, no further provision is required.

Advances recoverable in cash or in kind or for value to be received as at 31 March 2013 include amount aggregating to Rs. 24.96 crores relating to advances to suppliers and sub-contractors which are long pending due to factors attributable to the overall environment and its customers. The Management is of the view that these advances are fully recoverable in cash or in kind for value to be received in due course as it is in constant engagement with suppliers and sub-contractors.

Inventories as at 31 March 2013 include amount aggregating to Rs. 45.75 crores relating contract work-in-progress which has not been billed for more than one year. The Management is of the view that this contract work-in-progress is entirely billable. The Company is in constant engagement with the clients to get the works certified and bill the same.

1.11 Comparative figures:

Previous year''s figures have been regrouped/reclassified, where necessary, to conform to current year''s classification.


Mar 31, 2012

Company overview

Ramky Infrastructure Limited (RIL) is an integrated construction, infrastructure development and management company headquartered in Hyderabad, India. The Company diversified in a range of construction and infrastructure projects in various sectors such as water and waste water, transportation, irrigation, industrial construction and parks (including SEZs), power transmission and distribution, and residential, commercial and retail property. A majority of the development projects of the Company are based on Public-Private partnerships (PPP) and are operated by separate Special Purpose Vehicles (SPV) promoted by RIL, joint venture partners and respective Governments.

i) Rights, preferences and restrictions attached to the equity shares:

(a) The Company has only one class of equity shares having par value of Rs 10 each. Each shareholder is eligible for one vote per share held.

(b) The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing general meeting.

(c) 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. The distribution will be in proportion to the number of equity shares held by equity shareholders.

Notes :

a) 9,750,000 (previous year: 9,750,000) equity shares have been pledged in favour of Infrastructure Development Finance Company Limited for the loan availed by MDDA-Ramky IS Bus Terminal Limited.

b) 14,800,000 (previous year: 14,800,000) equity shares and 2,950,000 (previous year : 25,000,000) preference shares have been pledged in favour of IDBI Trusteeship Services Limited for loan availed by Ramky Elsamex Hyderabad Ring Road Limited.

c) 9,129,000 (previous year: 8,942,000) equity shares have been pledged in favour of Infrastructure Development Finance Company Limited (previous year pledged with Axis Bank Limited) for loan availed by Ramky Pharma City (India) Limited.

d) 15,766 (previous year: Nil) equity shares of Srinagar Banihal Expressway Limited pledged in favour of ICICI bank Limited for the loan availed by Srinagar Banihal Expressway Limited.

e) 13,005 (previous year: 13,005) equity shares have been pledged in favour of Punjab National Bank for loan availed by Gwalior Bypass Project Limited.

* Other services includes professional charges of Nil (previous year: Rs 0.56 crores) paid in connection with issue of equity shares through its initial public offer are treated as share issue expenses and adjusted to securities premium account.

1.1 Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense for the period under cancellable leases was Rs 9.84 crores (previous year: Rs 5.25 crores) has been disclosed as 'Rent' in the statement of profit and loss.

1.2 Nature and terms of repayment for secured and unsecured borrowings are as follows:

Secured borrowings:

a. Term loan from bank amounting to Rs 75 crores (previous year Nil) are secured by way of residual charge over moveable fixed and current assets (both present and future) ranking subsequent to prior charge created in favour of other lenders and first and exclusive ranking charge over all the receivables both present and future arising out of debt infused in the infrastructure project companies and by way of first and exclusive ranking charge over Debt Service Reserve Account (DSRA). This loan is repayable in 24 monthly installments starting at the end of 15 months from the first draw down date (i.e. 8 February 2012) along with interest of 12.75% p.a. payable on monthly basis.

b. Term loan from bank amounting to Rs 45 crores (previous year Rs 55 crores) are secured by pari-passu charge on the entire project specific current assets. These loans are repayable on 25 May 2012 (previous year: 15 December 2011) along with interest of 11.75% p.a. payable on monthly basis.

c. Term loan from bank amounting to Nil (previous year Rs 5 crores) are secured by way of post-dated cheques given by the Company. Loan was repaid by the on 2 February 2012 along with interest of 11.50% p.a. payable on monthly basis.

d. Equipment and vehicle loans from banks amounting to Rs 36.75 crores (previous year: Rs 47.82 crores) and from others amounting to Rs 95.35 crores (previous year: Rs 86.28 crores) are secured by way of hypothecation of the respective equipment/ vehicles. These loans are repayable in monthly payment of equated monthly installments beginning along the month subsequent to the loan along with interest in the range of 7.05% p.a. to 14.20% p.a. and 6.55% p.a. to 12.15% p.a. against loans taken from banks and others respectively.

e. Cash credits from banks from banks amounting to Rs 242.22 crores (previous year: Rs 267.26 crores) and working capital loans from banks amounting to Rs 409.25 crores (previous year Rs 179 crores) are secured by way of:

(i) first pari-passu charge on the current assets of the Company namely raw materials, contract work-in-progress, bills receivable and book debts and all other movables both present and future of the Company along with other working capital lenders.

(ii) first charge on the entire unencumbered fixed assets of the company ranking pari-passu basis to all the working capital lenders and

(iii) loans during the previous year were also secured by way of personal guarantees of Chairman of the Company and Managing Director of the Company.

Cash credits are repayable on demand along with interest in the range of 12.50% p.a. to 14.45% p.a. (previous year: 13.25% p.a. to 14.45% p.a.) payable on monthly basis. Working capital loans are repayable within 90 to 180 days from the date of drawdown along with the interest in the range of 11.75% p.a. to 12.50% p.a. (previous year: 10.65% p.a. to 13% p.a.) payable on monthly basis.

f. Working capital loan from bank amounting to Rs 25 crores (previous year: Nil) are secured by way of post-dated cheques submitted by the Company. Loan is repayable on 2 June 2012 along with the interest of 12.50% p.a.

g. Buyers credit from banks amounting to Rs 24.63 crores (previous year: Nil) are secured by way of first pari-passu charge on the current assets of the Company namely raw materials, contract work-in-progress, bills receivable and book debts and all other movables both present and future of the Company and exclusive charge on the capital equipment imported with loan proceeds. Buyers credit are obtained on short-term basis and repayable within 360 days from the date of drawdown along with the interest in the range of 1.94% p.a. to 3.30% p.a.

Unsecured borrowings:

Unsecured loan from corporate was repaid on 30 August 2011 and interest rate applicable was 14% p.a.

1.3 Segment information

a) Business Segment:

The services rendered by the Company primarily consist of execution of civil contracts on turnkey basis. The Company is managed organizationally as a unified entity and not along product lines and accordingly, there is only one business segment.

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.

1.4 Employee benefit plans

a) Liability for retiring gratuity as on 31 March 2012 is Rs 2.43 crores (previous year: Rs 1.46 crores) of which Rs 0.56 crores (previous year: Rs 0.45 crores) is funded with the Life Insurance Corporation of India. The balance of Rs 1.87 crores (previous year: Rs 1.01 crores) is included in provision for gratuity. The expected contribution is based on the same assumptions used to measure the Company's gratuity obligations as of 31 March 2012.

b) Liability for cost of compensated absence as on 31 March 2012 is Rs 3.80 crores (previous year: Rs 3.62 crores). Cost of compensated liability is a non funded liability.

c) Contribution towards employee provident fund for the year ended 31 March 2012 is Rs 5.87 crores (previous year: Rs 3.93 crores).

d) The liability for gratuity and cost of compensated absences has been actuarially determined and provided for in the books.

e) Employee benefit plans

The following tables set out the status of the gratuity plan as required under AS 15

Discount rate: The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet date for the estimated term of the obligations.

Expected rate of return on plan assets: This is based on the expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations.

Salary escalation rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other relevant factors.

1.5 The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financial statements based on information received and available with the Company. Further in view of the Management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Note: This information is required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 and has been determined to the extent such parties have been identified on the basis of information available with the Company.

1.6 The Company has claimed deduction under Section 80-IA (4) of the Income Tax Act, 1961 in its returns of income relating to assessment years 2003-04 to 2011-12. However, the Department contested the same on the grounds that the Company was not "developing" the infrastructure facility and disallowed the deduction for assessment years 2003-04 to 2009-10. The Company filed appeal against these orders with CIT (Appeals), of which the appeals with respect to assessment years 2003-04 to 2008-09 were dismissed. The Company has filed an appeal with Income Tax Appellate Tribunal (ITAT) for these assessment years, which is currently pending.

The Company is contending its case before the appropriate appellate authorities, however the Company notwithstanding the fact that its position in the matter is strong on merits has based on an internal assessment and various factors such as industry practice, legal counsel advice etc. decided to make a provision for the total deductions under the said Sections and for the assessment years 2003-04 to 2011-12 amounting to Rs 66.56 crores. As this provision relates to taxes for earlier years the same has been directly debited to the surplus in statement of profit and loss account balance under "Reserves and Surplus" for the year ended 31 March 2012. Further no deduction has been claimed on account of the aforesaid Section in the current year.

1.7 IPO proceeds utilization:

During the previous year the Company had issued 7,777,777 equity shares having a face value of Rs 10 per share at a price of Rs 450 per share (including a premium of Rs 440 per share) through IPO. Out of the proceeds aggregating Rs 350 crores, a sum of Rs 7.78 crores was credited to the share capital and the balance amount of Rs 342.22 crores is credited to the securities premium account. Share issue expenses aggregating Rs 14.70 crores (excluding Rs 7.56 crores incurred on behalf of shareholders whose holdings were divested at the time of the IPO and which were recovered from the shareholders) have been charged to the securities premium account in accordance with the provisions of Section 78(2) of the Companies Act, 1956.

1.8 Comparative figures

On applicability of revised Schedule VI from current year, the Company has reclassified previous year figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2011

1. Commitments and contingent liabilities

(All amounts in Indian Rupees crore, except share data and where otherwise stated)

As at As at

Particulars March 31, 2011 March 31, 2010

i. Commitments:

a. Equity commitments towards subsidiaries and joint ventures 249.39 61.99

b. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 6.62 0.22

ii. Contingent liabilities:

a. Guarantees issued by banks 1,162.88 843.71

b. Guarantees issued by the Company on behalf of subsidiaries, joint ventures and group companies 470.32 425.16

c. Letters of credit outstanding 54.06 95.46 iii. Claims against the Company not acknowledged as debts (including interest and penalty demanded) in respect of:

a. Sales tax/VAT matters, under dispute 20.91 18.94

b. Income tax matters 66.16 50.05

c. Service tax matters, under dispute 89.61 25.81

d. Disputed claims from customers and vendors 5.90 6.77

The Company has claimed deduction under Section 80-IA (4) in its returns of income relating to assessment years 2003-04 to 2011-12. The Income Tax Department is contesting the same on the grounds that the Company was not developing the infrastructure facility and disallowed the deduction for assessment years 2003-04 to 2008-09. The Company appealed against these orders with CIT (Appeals), of which assessment years 2003-04 to 2006-07 were dismissed. The Company has preferred an appeal with Income Tax Appellate Tribunal (ITAT) for these years, which is currently pending.

The Company has evaluated various judicial pronouncements on this matter and also the facts of this case. Based on such evaluation and in the pendency of an ITAT ruling in its own case, no provision is made in the financial statements for such amounts for the assessment years 2003-04 to 2011-12.

2. Public issue of equity shares

During the year, the Company issued 77,77,777 equity shares having a face value of Rs.10 per share at a price of Rs.450 per share (including share premium of Rs.440 per share) though an initial public offering (IPO). Out of the proceeds aggregating Rs.350 crore, a sum of Rs.7.78 crore is credited to Share Capital and the balance amount of Rs.342.22 crore is credited to Securities Premium Account. Share issue expenses aggregating Rs.14.70 crore (excluding Rs.7.56 crore incurred on behalf of shareholders whose holdings were divested at the time of the IPO and which were recovered from the shareholders) have been charged to the Securities Premium Account in accordance with the provisions of Section 78(2) of the Companies Act, 1956.

3. Leases

The Company is obligated under cancellable operating lease agreements. Total rental expense for the period under cancellable leases was Rs.5.25 crore (previous year: Rs.4.17 crore) has been disclosed as ‘rent in the Profit and Loss Account.

4. Related party disclosures a. List of related parties

Enterprise where control exists (Subsidiaries)

- Ramky Pharma City (India) Limited

- MDDA - Ramky IS Bus Terminal Limited

- Ramky Food Park (Chhattisgarh) Limited

- Naya Raipur Gems and Jewellery SEZ Limited

- Ramky Herbal and Medicinal Park (Chhattisgarh) Limited

- Ramky - MIDC Agro Processing Park Limited

- Ramky Engineering and Consulting Services (FZC)

- Gwalior Bypass Project Limited

- Ramky Elsamex Hyderabad Ring Road Limited

- Ramky Towers Limited

- Ramky Enclave Limited

- Srinagar Banihal Expressway Limited

- Ramky Multi Product Industrial Park Limited

- Ramky Food Park (Karnataka) Limited

Enterprises where joint control exists (Joint controlled entities)

- NAM Expressway Limited

- Jorabat Shillong Expressway Limited

Enterprises where significant influence exists (Associates)

- Ramky Integrated Township Limited

- Narketpally Addanki Expressway Limited

Enterprises where key management personnel have significant influence (Significant interest entities)

- Ramky Enviro Engineers Limited

- Ramky Estates and Farms Limited

- Mumbai Waste Management Limited

- Ramky Finance & Investment (Private) Limited

- Semb Ramky Environmental Management Private Limited

- Ramky Global Solutions Private Limited

- Tamil Nadu Waste Management Limited

- West Bengal Waste Management Limited

- Ramky Energy & Environment Limited

- Ramky Villas Limited

- Ramky Advisory Services Limited

- Delhi MSW Solutions Limited

- Smilax Laboratories Limited

- Ramky Foundation

- NR Environmental Engineers Inc

- Ramky Academy of Culture & Education

- Dakshayani Academy

Key Management Personnel (KMP) and their relatives

- Mr. A. Ayodhya Rami Reddy

- Mr. Y. R. Nagaraja

11. Segment information

a. Business Segment

The services rendered by the Company primarily include civil contracts, turnkey execution of effluent treatment plant (ETP) & sewerage treatment plant (STP) and related contract consultancy services. The Company is managed organizationally as a unified entity and not along product lines and accordingly, there is only one business segment.

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.

5. Employee benefit plans

a. Liability for retiring gratuity as on March 31, 2011 is Rs.1.46 crore (March 31, 2010: Rs.0.45 crore) of which Rs.0.45 crore (March 31, 2010: Rs.0.39 crore) is funded with the Life Insurance Corporation of India. The balance of Rs.1.01 crore (March 31, 2010: Rs.0.06 crore) is included in Provision for Gratuity.

b. Liability for cost of compensated absence as on March 31, 2011 is Rs.3.62 crore (March 31, 2010: Rs.0.18 crore). Cost of compensated liability is a non-funded liability.

c. The liability for gratuity and cost of compensated absences has been actuarially determined and provided for in the books.

d. The following tables set out the status of the gratuity plan as required under AS 15:

6. Quantitative details

The Company is engaged in the business of providing contractual services, operating and maintenance services. The activities are not capable of being expressed in any generic unit. Accordingly, it is not possible to give the quantitative details of such services and certain information as required under paragraphs 3, 4C and 4D of Part II of Schedule VI of Companies Act, 1956.

7. Previous years figures

Previous years figures have been regrouped/reclassified, where necessary, to conform to current years classification.

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