Notes to Accounts of Ircon International Ltd.

Mar 31, 2025

2.2.16 Provisions, contingent assets and contingent
liabilities
Provisions

Provisions are recognised when the Company has
a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation.

Provisions recognised by the Company include
provisions for Maintenance, Demobilisation, Legal
Cases, Corporate Social Responsibility (CSR),
Onerous Contracts and others.

If the effect of the time value of money is material,
provisions are discounted using a current preÂ¬
tax rate that reflects, when appropriate, the risks
specific to the liability. When discounting is used,
the increase in the provision due to the passage of
time is recognised as a finance cost.

These provisions are reviewed at each reporting
date and adjusted to reflect the current best
estimates.

Onerous contracts

If the Company has a contract that is onerous,
the present obligation under the contract is
recognised and measured as a provision. However,
before a separate provision for an onerous
contract is established, the Company recognises
any impairment loss that has occurred on assets
dedicated to that contract.

These estimates are reviewed at each reporting
date and adjusted to reflect the current best
estimates.

Contingent liabilities

Contingent liabilities are disclosed when there is
a possible obligation or present obligations that
may but probably will not, require an outflow of
resources embodying economic benefits or the
amount of such obligation cannot be measured
reliably. When there is possible obligation or a
present obligation in respect of which likelihood of
outflow of resources embodying economic benefits
is remote, no provision or disclosure is made.

These are reviewed at each balance sheet date and
adjusted to reflect the current best estimates.
Contingent assets

Contingent assets are not recognised though are
disclosed, where an inflow of economic benefits is
probable.

2.2.17 Leases

If the contract conveys the right to control the use
of an identified asset for a period in exchange for
consideration, it is treated as lease.
a) Company as a lessee

The Company recognises a right-of-use asset
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except
for leases with a term of twelve months or less
(short-term leases) and leases for low value
underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment
losses, and adjusted for any re-measurement
of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities
recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the
lease term and the estimated useful lives of
the assets.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.

The right-of-use assets are also subject to
impairment.

ii) Lease liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to
be made over the lease term. The lease
payments include fixed payments (including
in substance fixed payments) less any lease
incentives receivable, variable lease payments
that depend on an index or a rate, and
amounts expected to be paid under residual
value guarantees.

In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of
lease liabilities is re-measured if there is a
modification, a change in the lease term, a
change in the lease payments (e.g., changes
to future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of an
option to purchase the underlying asset.

The Company''s lease liabilities are included in
financial liabilities.

iii) Short term lease and leases of low value
assets

The Company applies the short-term lease
recognition exemption to its short-term
leases contracts including lease of residential
premises and offices (i.e., those leases that
have a lease term of 12 months or less from
the commencement date and do not contain
a purchase option). It also applies the lease
of low-value assets recognition exemption to
leases of office equipment that are considered
to be low value. Lease payments on shortÂ¬
term leases and leases of low-value assets are
recognised as expense on a straight-line basis
over the lease term.

b) Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards incidental
to ownership of an asset are classified as
operating leases. Rental income arising is
accounted for on a straight-line basis over
the lease terms and is included in revenue
in the statement of profit or loss due to its
operating nature. Initial direct costs incurred in
negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on
the same basis as rental income.

2.2.18 Financial instruments

The Company recognises financial assets and
financial liabilities when it becomes a party to the
contractual provisions of the instrument.

a) Financial assets

Initial recognition and measurement
All financial assets (excluding trade receivables
which do not contain a significant financing
component, being measured at transaction
price) are recognised initially at fair value plus
transaction costs that are directly attributable
to the acquisition of financial asset. Transaction
costs directly attributable to the acquisition of
financial assets carried at fair value through
profit or loss (FVTPL) are expensed in statement
of profit and loss.

Subsequent measurement

For purposes of subsequent measurement,

financial assets are classified in below

categories based on the Company''s business

model and the cash flow characteristics of the

asset:

â¢ Financial assets at amortised cost

After initial measurement, the financial assets

that are held for collection of contractual
cash flows where those cash flow represent
solely payments of principal and interest
(SPPI) on the principal amount outstanding
are measured at amortised cost using
the effective interest rate (EIR) method.
Interest income from these financial assets is
included in other income.

â¢ Financial assets at fair value through other
comprehensive income (FVTOCI):

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business model
whose objective is achieved by both
collecting contractual cashflows and selling
financial assets and the contractual terms
of the financial asset give rise on specified
dates to cashflows that are solely payments
of principal and interest on the principal
amount outstanding.

â¢ Financial assets at fair value through profit
or loss (FVTPL):

Assets that do not meet the criteria for
amortised cost or FVTOCI are measured
at fair value through profit or loss (FVTPL).
Debt instruments included within the FVTPL
category are measured at fair value with
all changes recognised in the statement of
profit and loss.

Impairment of financial assets

The Company applies the expected credit loss
(ECL) model for recognising impairment loss on
financial assets measured at amortised cost or
financial assets measured at FVTOCI.

The Company follows ''simplified approach'' for
recognition of impairment loss allowance on:

â¢ Trade receivables or contract revenue
receivables; and

â¢ All lease receivables resulting from
transactions within the scope of Ind AS 116

Under simplified approach, impairment loss
allowance is recognised based on lifetime ECLs
at each reporting date.

For recognition of impairment loss on other
financial assets and risk exposure, the Company
determines that whether there has been a
significant increase in the credit risk since initial
recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide
for impairment loss.

Lifetime ECL are the expected credit losses
resulting from all possible default events over

the expected life of a financial asset. The
12-month ECL is a portion of the lifetime ECL
which results from default events that are
possible within 12 months after the reporting
date.

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income/ expense in the statement of profit and
loss.

The balance sheet presentation of impairment
for various financial instruments is described
below:

â¢ Financial assets measured as at amortised
cost, contractual revenue receivables and
lease receivables: ECL is presented as
an allowance. The impairment allowance
reduces the net carrying amount. Until the
asset meets write-off criteria, the Company
does not reduce impairment allowance
from the gross carrying amount.

â¢ Loan commitments and financial guarantee
contracts: ECL is presented as a provision in
the balance sheet i.e., as a liability.

â¢ Debt instruments measured at FVTOCI:
For debt instruments measured at FVTOCI,
the expected credit losses do not reduce
the carrying amount in the balance sheet,
which remains at fair value. Instead,
an amount equal to the allowance is
recognised in other comprehensive income
as the ''accumulated impairment amount''.

Derecognition of financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the financial asset expire or it transfers
the financial asset and the transfer qualifies for
derecognition under Ind AS 109.

The difference between the carrying amount
and the amount of consideration received /
receivable is recognised in the statement of
profit and loss.

b) Financial liabilities

Initial recognition and measurement
All financial liabilities are recognised initially
at fair value and, in the case of borrowings
and payables, net of directly attributable
transaction costs.

The Company''s financial liabilities includes
trade payables, borrowings and other financial
liabilities etc.

Subsequent measurement

The measurement of financial liabilities depends

on their classification, as described below:

â¢ Financial liabilities at fair value through
profit or loss.

The company has not designated any
financial liabilities at FVTPL.

â¢ Financial liabilities at amortised cost
Borrowings, trade payables and other
financial liabilities

After initial recognition, borrowings, trade
payables and other financial liabilities are
subsequently measured at amortised cost
using the EIR method. Amortised cost
is calculated by taking into account any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR.
The EIR amortisation is included as finance
costs in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability (or a part of a financial
liability) is derecognised from the Company''s
Balance Sheet when the obligation specified
in the contract is discharged or cancelled
or expires. The difference in the respective
carrying amounts is recognised in the
statement of profit and loss.

c) Financial guarantee contracts

Financial guarantee contracts issued by the
Company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified debtor
fails to make a payment when due in accordance
with the terms of a debt instrument. Financial
guarantee contracts are recognised initially as
a liability at fair value, adjusted for transaction
costs that are directly attributable to the
issuance of the guarantee. Subsequently, the
liability is measured at the higher of the amount
of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount
recognised less cumulative amortisation.

d) Offsetting of financial instruments

Financial assets and financial liabilities are
offset, and the net amount is reported in the
balance sheet if there is a currently enforceable
contractual legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle the
liabilities simultaneously.

2.2.19 Fair value measurement

The Company measures financial instruments at fair
value at each reporting period.

The fair value of an asset or a liability is measured
using the assumptions that market participants
would use when pricing the asset or liability,
assuming that market participants act in their
economic best interest.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements
are categorised within the fair value hierarchy
and are disclosed accordingly in the financial
statements.

External valuers are involved for valuation of
significant assets and liabilities, if any. At each
reporting date, the Company analyses the
movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company''s accounting policies.

2.2.20 Earnings per Share

In determining basic earnings per share, the
company considers the net profit attributable to
equity shareholders. The number of shares used in
computing basic earnings per share is the weighted
average number of shares outstanding during the
period.

In determining diluted earnings per share, the
net profit attributable to equity shareholders and
weighted average number of shares outstanding
during the period are adjusted for the effect of all
dilutive potential equity shares. The Company does
not have any dilutive potential equity shares.

2.2.21 Non - current asset held for sale
Non-current assets (or disposal groups) are
classified as assets held for sale when their carrying
amount is to be recovered principally through a
sale transaction and a sale is considered highly
probable. The sale is considered highly probable
only when the asset or disposal group is available
for immediate sale in its present condition, it is
unlikely that the sale will be withdrawn, and sale
is expected within one year from the date of the
classification. Disposal groups classified as held
for sale are stated at the lower of carrying amount
and fair value less costs to sell. Property, plant and
equipment, investment property and intangible
assets are not depreciated or amortised once
classified as held for sale. Assets classified as held
for sale/distribution are presented separately in the
balance sheet.

If the criteria stated by IND AS 105 "Non-current
Assets Held for Sale" are no longer met, the

disposal group ceases to be classified as held for
sale. Non-current asset that ceases to be classified
as held for sale are measured at the lower of (i) its
carrying amount before the asset was classified as
held for sale, adjusted for depreciation that would
have been recognised had that asset not been
classified as held for sale, and (ii) its recoverable
amount at the date when the disposal group ceases
to be classified as held for sale. The depreciation
reversal adjustment related property, plant and
equipment, investment property and intangible
assets is charged to statement of profit and loss in
the period when non-current assets held for sale
criteria are no longer met.

2.2.22 Prior Period Adjustment

Errors/omissions discovered in the current year
relating to prior periods are treated as immaterial
and adjusted during the current year, if all such
errors and omissions in aggregate does not exceed
0.50% of total operating revenue as per last audited
financial statement of the Company.

2.2.23 Significant accounting estimates and judgments

The preparation of Standalone Financial Statements
requires the management to make judgements,
accounting estimates and assumptions that affect
the reported amounts of revenues, expenses,
assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent
liabilities. Uncertainty about these assumptions
and estimates could result in outcomes that require
a material adjustment to the carrying amount of
assets or liabilities affected in future periods.

This policy provides an overview of the areas
that involved a higher degree of judgement or
complexity, and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than those
originally assessed.

Significant areas of estimation and judgements as
stated in the respective accounting policies that
have the most significant effect on the financial
statements are as follows:

Allowances for uncollected trade receivables
Trade receivables do not carry interest and are
stated at their nominal values as reduced by
appropriate allowances for estimated irrecoverable
amount are based on ageing of the receivables
balances and historical experiences. Individual
trade receivables are written off when management
deems not be collectible.

Defined benefit plans

The costs of post-retirement benefit obligation are
determined using actuarial valuations. An actuarial

valuation involves making various assumptions that
may differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases, mortality rates and
future pension increases. Due to the complexities
involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to
changes in these assumptions. All assumptions are
reviewed at each reporting date.

Contingencies

In the normal course of business, contingent
liabilities may arise from litigation and other claims
against the Company. There are certain obligations
which managements have concluded based on all
available facts and circumstances are not probable
of payment or difficult to quantify reliably and such
obligations are treated as contingent liabilities and
disclosed in notes.

Impairment of financial assets
The impairment provision for financial assets is
based on assumptions about risk of default and
expected loss rates. The company uses judgement
in making these assumptions and selecting the
inputs to the impairment calculation, based on the
Company''s past history, existing market conditions
as well as forward looking estimates at the end of
each reporting period.

Taxes

Uncertainties exist with respect to the interpretation
of complex tax regulations, changes in tax laws, and
the amount and timing of future taxable income.
Given the nature of business differences arising
between the actual results and the assumptions
made, or future changes to such assumptions,
could necessitate future adjustments to tax income
and expense already recorded. The Company
establishes provisions, based on reasonable
estimates. The amount of such provisions is based
on various factors, such as experience of previous
tax audits and differing interpretations of tax
regulations by the taxable entity and the responsible
tax authority. Such differences of interpretation
may arise on a wide variety of issues depending on
the conditions prevailing in the respective domicile
of the companies.

Deferred tax assets are recognised for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can
be utilised. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognised, based upon the
likely timing and the level of future taxable profits
together with future tax planning strategies.

Impairment of non-financial assets

The entity assesses at each reporting date
whether there is an indication that an asset may
be impaired. Determining the recoverable amount
of the assets is judgmental and involves the use
of significant estimates and assumptions. The
estimates are based upon assumptions believed to
be reasonable, but which are inherently uncertain
and unpredictable and do not reflect unanticipated
events and circumstances that may occur.
Non-current asset held for sale
Non-current assets (or disposal groups) are
classified as assets held for sale when their carrying
amount is to be recovered principally through a
sale transaction and a sale is considered highly
probable. The sale is considered highly probable
only when the asset or disposal group is available
for immediate sale in its present condition, it is
unlikely that the sale will be withdrawn, and sale
is expected within one year from the date of the
classification.

Leases - Estimating the incremental borrowing
rate

The Company cannot readily determine the
interest rate implicit in the lease, therefore, it uses
its incremental borrowing rate (IBR) to measure
lease liabilities. The IBR is the rate of interest that
the Company would have to pay to borrow over a
similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value
to the right-of-use asset in a similar economic
environment.

Determining the lease term of contracts with
renewal and termination options - Company as
lessee

The Company determines the lease term as the
non-cancellable term of the lease, together with
any periods covered by an option to extend the
lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Company applies judgement in evaluating
whether it is reasonably certain whether or not
to exercise the option to renew or terminate the
lease. After the commencement date, the Company
reassesses the lease term if there is a significant
event or change in circumstances that is within
its control and affects its ability to exercise or not
to exercise the option to renew or to terminate
(e.g., construction of significant leasehold
improvements or significant customisation to the
leased asset).

Revenue recognition

The Company''s revenue recognition policy is
central to how the Company values the work it has
carried out in each financial year.

These policies require forecasts to be made of the
outcomes of Contracts, which require, assessments
and judgements to be made on changes in scope of
work and claims and variations.

There are several long term and complex projects
where the Company has incorporated significant
judgements over contractual entitlements. The
range of potential outcomes could result in a

materially positive or negative change to underlying
profitability and cash flow.

Estimates are also required with respect to the
below mentioned aspects of the contract:

â¢ Determination of stage of completion

â¢ Estimation of project completion date

â¢ Provisions for foreseeable losses

â¢ Estimated total revenues and estimated total
costs to completion, including claims and
variations.

These are reviewed at each reporting date and
adjust to reflect the current best estimates.

Note:

(i) These valuations are based on valuations performed by a registered valuer as defined under rule 2 of Companies
(Registered Valuers and Valuation) Rules, 2017 applying valuation model acceptable internationally. Fair Values are
based on income/cost/market value approach.

(ii) The fair value measurement is categorised in Level 3 of fair value hierarchy.

(iii) The investment property in Noida comprises three locations, having lease term of 90 years. Additionally, the
properties in Gurugram and Bangalore are located at single location and are freehold.

(iv) Other provisions amounting to ?0.57 crore has been created towards capital work in progress in FY 2023-24 for
the Sector 125, Noida property due to pending resolution of the dispute with the Noida Authority.

Note:

(i) (a) The Company vide board approval dated 12th August, 2021 has waived interest on its loan given to IRCON
PB Tollway Limited for the period 1st October, 2019 till 31st March, 2024 and deferment of balance interest
till repayment of principal. The said waiver has been considered as Investment in subsidiary by the Company
in accordance with provision of Ind AS. Accordingly ^62.60 crore (31st March, 2024: ?60.75 crore) has been
included in above.

(b) Includes fair value of the financial guarantee of ?0.19 crore (31st March, 2024 ?0.19 crore) issued by Ircon to State
Bank of India on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway Limited
(ISGTL).

(c) BoD has approved the Equity participation (committed), not exceeding ?10.00 crore in Wholly Owned Subsidiary,
Ircon Vadodara Kim Expressway limited (IVKEL) Further, BoD has approved interest free loan not exceeding
?195.74 crore for IVKEL which has been paid. Further, this includes fair value of the financial guarantee of ?0.24
crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IVKEL.

(d) Includes fair value of the financial guarantee of ?0.83 crore (as on 31st March, 2024 ?0.83 crore) issued by IRCON
to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangere Haveri
Highway Limited ( IDHHL), Wholly Owned Subsidiary. Further, BoD has approved interest free loan not exceeding
?13.86 crore for IDHHL which has been paid.

(e) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh in Wholly Owned Subsidiary, Ircon
Gurgaon Rewari Highway Limited(IGRHL). Further, BoD has approved interest free loan not exceeding ?103.18 crore
for IGRHL out of which ^88.35 crore (31st March, 2024: 88.35 crore) has been paid. Additionally, this includes fair
value of the financial guarantee of ?0.18 crore issued by IRCON to Indian Overseas Bank on behalf of and in respect
of term loan facility availed by IGRHL.

(f) BoD has approved the Equity participation (committed), not exceeding ?17.16 crore, out of which 4.34 crore has been
paid to Ircon Akloli-Shirsad Expressway Limited (IASEL). Further, BoD has approved interest free loan not exceeding
?171.54 crore for IASEL out of which ?104.98 crore (31st March, 2024 ?51.54 crore) has been paid. Additionally, this
includes fair value of the financial guarantee of ?0.19 crore issued by IRCON to Bank of Baroda on behalf of and in
respect of term loan facility availed by IASEL.

(g) BoD has approved the Equity participation (committed), not exceeding ?14.27 crore, out of which 11.11 crore has
been paid to Ircon Ludhiana Rupnagar Highway Limited (ILRHL). Further, BoD has approved interest free loan
not exceeding ?128.43 crore for ILRHL out of which ?99.97 crore (31st March, 2024 ?54.42 crore) has been paid.
Additionally, this includes fair value of the financial guarantee of ?0.19 crore issued by IRCON to Bank of Baroda on
behalf of and in respect of term loan facility availed by ILRHL.

(h) BoD has approved the Equity participation (committed), not exceeding ?20.58 crore, out of which 10.60 crore has
been paid Ircon Bhoj Morbe Expressway Limited (IBMEL). Further, BoD has approved interest free loan not exceeding
?185.27 crore for IBMEL out of which ?81.42 crore (31st March, 2024 ?51.42 crore) has been paid. Additionally, this
includes fair value of the financial guarantee of ?0.14 crore issued by IRCON to Bank of Baroda on behalf of and in
respect of term loan facility availed by IBMEL.

(i) BoD has approved the Equity participation (committed), not exceeding ?5 lakh for WOS, Ircon Haridwar Byepass
Limited (IHBL). Further, BoD has approved interest free loan not exceeding ?111.85 crore for IHBL out of which
?82.37 crore (31st March, 2024 ?82.37 crore) has been paid. Additionally, this includes fair value of the financial
guarantee of ?0.24 crore issued by IRCON to State Bank of India on behalf of and in respect of term loan facility
availed by IHBL.

(j) BoD has approved the Equity participation (committed), not exceeding ?3.80 crore in Ircon

Renewal Power Limited (IRPL). Further, BoD has approved interest free loan not exceeding
?108.03 crore in IRPL, out of which ?108.03 crore (31st March, 2024: ?88.24 crore) has been paid.
Additionally, BoD has approved the interest-bearing Optionally Convertible Debentures (OCDs) of ?88.89 crore, out
of which ?66.00 crore (31st March,2024 : Nil) has been paid.

(ii) (a) Includes fair value of the financial guarantee for ?0.28 crore issued by IRCON to Punjab National Bank on behalf of
and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31st March, 2025 is Nil (as on 31st March,
2024 Nil).

(b) "Ministry of Railways" (MoR) vide its letter No. 2011/LMB/22/1/39 dated 18.10.2021 had communicated

''in-principle'' approval for the closure of Indian Railway Station Development Corporation

Limited (IRSDC), a Joint Venture Company and transfer/handover of its business to RLDA/MoR.
During the financial year 2024-25, with the consent of all joint venture partners i.e. IRCON, RITES & RLDA, it has
been decided to transfer the assets and liabilities of IRDSC (except investments in SITCO and GARUD/Station
Facility Management (SFM)) to RLDA on a slump sale basis at book value as on 31.12.2024 (i.e. approx. ?39.89
crores based on detailed working /- 5%). Subsequently, the Business Transfer Agreement was signed on 09
April 2025, and the consideration was received by IRSDC from RLDA on 11 April 2025 of ?39.89 crores. Further,
consideration against SITCO has also been received from RLDA against their share of ?6.30 crore in FY 2023-24.
As at the balance sheet date i.e. 31 March 2025, closure related activities initiated in FY 2021-22 are yet to be
completed and the Liquidation process shall commence upon completion of these activities and handing over
of assets and liabilities to RLDA/MoR. Financial statement of IRSDC has been prepared on liquidation basis and
the distribution of the slump sale proceeds and settlement of liabilities will be done after appointment of the
liquidator and completion of the liquidation process under voluntary winding up. The Group continues to monitor
the developments closely and does not foresee any impairment in the value of investment as at the reporting date
as the Group''s share in the reported net worth of IRSDC is ?61.76 crore i.e. 26% of ?237.52 crore.

(c) Ministry of Railway (MoR) has granted in-principle approval for closure of Bastar Railway Private Limited, a joint
venture company and transfer of its assets and liabilities to MoR. The legal formalities, pricing and related modalities
are in process and the Company does not foresee any impairment in the value of investment at this stage.

(d) Board of Directors have approved Interest free loan of ?114.11 crore in favour of Jharkhand Central Railway Limited
(JCRL), out of which ?114.11 crore (31st March, 2024: ?114.11 crore) has been paid.

(e) Board of Directors have approved Interest free loan, of ?84.50 crores (31st March, 2024 ?84.50 crore) in favour of
Mahanadi Coal Railway Limited (MCRL) which has been paid. Further, It has been decided to handover Phase- I
(Angul - Balram, 14 KM already operational) and Phase- II (Balram-Putgadia-Tentuloi,54 KM under construction)of
MCRL Project to Ministry of Railways (MoR). The legal formalities, pricing and related modalities are in process and
the Company does not foresee any impairment in the value of investment at this stage.

(f) BoD has approved interest free loan of ?64.27 crore in favour of Chhattisgarh East Railway Limited (CERL), out of
which ^46.20 crore (31st March, 2024 30.60 crore) has been paid.

(g) BoD has approved interest free loan of ?193.36 crore in favour of Chhattisgarh East-West Railway Limited (CEWRL),
out of which ?64.48 crore (?16.12 crore) has been paid.

(iii) The Interest free loan as per above will be repaid only on winding up of the SPVs/JV or end of concession period
which ever is later.

(d) Terms / Rights attached to Equity Shares :

(i) Voting

The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity share is
entitled to one vote per share.

(ii) Liquidation

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 the shareholders

(iii) Dividend

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual
General Meeting

19.2 Other Provisions :

Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows :

a) Demobilisation Provisions

The Company has made provision for demobilisation to meet the expenditure towards demobilisation of manpower
and plant & equipment in respect of foreign projects.

b) Maintenance Provisions

- In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

- Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company''s liability
during defect liability period keeping into consideration the contractual obligations, obligations of the subÂ¬
contractor, operating turnover and other relevant factors

c) Onerous Contracts

The Company has a contract where total contract cost exceeds the total contract revenue. In such situation as
per Ind AS 115 and Ind AS 37 the Company has to provide for these losses. The provision is based on the estimate
made by the management.

d) Legal Cases

Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts,
arbitrations and appeal.

e) Provisions for Other Expenses

Provision for other expenses represents expected liabilities in respect of indirect taxes and Others

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and
other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these
instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties. The following methods and assumptions were used to estimate the
fair values:

i) The fair value of investments in mutual fund units is based on the Net Asset Value (''NAV'') as stated by the issuers of
these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which
the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the
investors

ii) Investment in subsidiaries and joint ventures are classified as equity investments have been accounted at historical
cost. since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed
in the tables above.

* During the financial year 2024-25 and 2023-24, there were no transfer between Level 1, Level 2 and Level 3 fair value
measurements.

31 B. Financial Risk Management

The Company''s principal financial liabilities comprise borrowings, trade, lease liability and other payables. The
Company''s principal financial assets include loans to related parties, trade and other receivables, and cash and
4 short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds,
tax free bonds and Government securities. The Company''s activities expose it to some of the financial risks:

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of
changes in market prices. Market risk comprises Foreign currency risk and Interest rate risk. Financial instruments
affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial
instruments.

(i) Foreign Currency Risk

As of March 31, 2025 and March 31, 2024, every 5% increase or decrease of the respective foreign currency
would impact our profit before tax by approximately ?28.96 crore and ?2.45 crore respectively.

The Company''s significant exposure to foreign currency risk at the end of reporting period are as follows:

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of
change in market interest rate. The company manages its interest risk in accordance with the companies policies
and risk objective. Financial instruments affected by interest rate risk includes tax free bonds, Govt. Securities
and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is fixed for
the period of financial instruments. Also, the Company does not have any interest risk on loans / borrowings as it
bears fixed rate of interest.

b) Credit Risk

The Company''s customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies
in India and abroad. Accordingly, the Company''s customer credit risk is low. The Company''s average project
execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly
progress payments with a credit period ranging from 45 to 60 days and certain retention money to be released at
the end of the project. In some cases retentions are substituted with bank / corporate guarantees. The Company
has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure
proper attention and focus for realisation.

The Company is exposed to credit risk for guarantees given. The Company''s maximum exposure in this respect
is the maximum amount the Company may have to pay if the guarantee is called on (see Note 37). Based on
expectations at the end of the reporting period, the Company considers that it is more likely that such an amount
will not be payable under the arrangement.

Trade and other receivable

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The
demographics of the customer, including the default risk of the industry and country in which the customer operates,
also has an influence on credit risk assessment.

c) Liquidity risk

The Company''s investment policy and strategy are focused on preservation of capital and supporting the
Company''s liquidity requirements. The senior Management of the Company oversees its investment strategy and
achieve its investment objectives. The Company typically invests in government of India debt bonds and mutual
funds. The policy requires investments generally to be investment grade, with the primary objective of minimising
the potential risk of principal loss.

The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the
mutual funds are highly liquid assets which are paid out monthly and re-invested.

The table below provides details regarding the significant financial liabilities as at 31st March, 2025 and 31st March,
2024

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities
in the same geographical region, or have economic features that would cause their ability to meet contractual
obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate
the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific
guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are
controlled and managed accordingly.

The BoD has recommended a final Dividend of ?1 per equity share on face value of ?2/- for the financial year 2024-25,
subject to the approval of the shareholders at the AGM. This is in addition to Interim Dividend paid @ 1.65 per equity
share on face value of ?2/-.

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions
and the requirements of the financial covenants.

32. Employee Benefits

Disclosures in compliance with Ind AS 19 "Employee Benefits" are as under:

(a) Defined Contribution Plans - General Description

(i) Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01, 2009,
for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees
who joined before January 01, 2017 but would superannuate/resign after January 01, 2017, before completing 15 years
of service, in such case Employer contribution towards pension would be effective from January 01, 2017 only. The
scheme was managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income
Tax Authorities.

In FY 2023-24, the Board of Directors in its 286^th meeting held on 11th May, 2023 has approved for shifting of IRCON
Defined Contribution Superannuation Pension Scheme, 2009 maintained with LIC to National Pension System (NPS).

Company''s share of contribution to NPS during the FY 2024-25 amounts to ?9.44 crore (?4.72 crore to NPS & ?4.63
crore to Pension Trust) .

(ii) Post Retirement Medical Benefit (PRMB)

The Company had established an irrevocable trust by initial one-time contribution of ?12.00 crore during the year
2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as a voluntary
welfare measure for which the Company is not liable for providing such benefit to its employees. Further, the Company
provides medical benefits to its employees (and spouse) who superannuate from the Company. The Company has
contributed ?5.02 crore (?5.17 crore) based on DPE guidelines on Superannuation Benefits.

(b) Defined Benefit Plans - General Description

(i) Provident fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust ( IRCON
Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay
a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax
Authorities. The Company has an obligation to make good the shortfall, if any, between the return form the investment
of the trust and the interest payment based on the notified interest rate.

During the period, the Company has contributed ?19.86 crore (?15.78 crore) to the trust towards employer''s contribution
for provident fund which includes ?6.58 Cr. towards reimbursement on account of loss on investment.

(ii) Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the
employees of the Company as a social security measure on the termination of their employment due to superannuation,
retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the
year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of
India. As at March 31, 2025 a liability of ?4.64 crore (?3.81 crore) has been provided in the books of accounts based on
the actuarial valuation.

(iii) Other Retirement Benefits - General Description

Other retirement benefits include settlement at home-town or to the place where he/she or his/her family intends
to settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial
valuation.

The summarised position of various employee benefits recognised in the statement of profit and loss and balance
sheet as on March 31, 2025 is as under:

1. Shri Brijesh Kumar Gupta (DIN: 10092756), has relinquished the additional charge of the post of Chairman &
Managing Director (CMD) w.e.f. April 29, 2024 hence he ceased to be CMD and CEO of the Company.

2. Shri Ashish Bansal, IRSE, PED/Tr. (M&MC), Railway Board [DIN:10328174] has relinquished the additional charge of
post of Chairman & Managing Director (CMD) with effect from July 01, 2024 hence he ceased to be CMD and CEO
of the Company.

3. Shri Hari Mohan Gupta [DIN:08453476] has assumed the charge of Chairman & Managing Director on the Board of
the Company with effect from July 01, 2024, till the date of superannuation, i.e. 30.06.2026 or until further orders,
whichever is earlier.

4. Shri Naresh Chandra Karmali (DIN: 09103211), IRSE, PED/GS, Railway Board, was entrusted with additional

charge of Director (Works), IRCON,w.e.f. 09.05.2025 (AN) until further orders of the Ministry of Railways.
Shri Naresh Chandra Karmali has relinquished the additional charge of post of Director (Works), IRCON (additional
charge) w.e.f. 15.05.2025 (FN), hence he is ceased to be Director (Works) of the company.

5. Shri Ajit Kumar Mishra (DIN:11108237) has been appointed as Director (Works) w.e.f. 15.05.2025 (AN), for a period
of 5 years or until further orders of the Ministry of Railways, whichever is earlier.

36. Impairment of Assets

During the year, Company has carried out assessment on impairment of individual assets by working out the recoverÂ¬
able amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, "Impairment of Assets"
notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil
(Nil) has been provided for.

37. Provisions, Contingencies and Commitments

(i) Provisions

The nature of provisions provided and movement in provisions during the year as per Ind AS 37 ''Provisions,
Contingent Liabilities and Contingent Assets'' are disclosed in Note 19.

(ii) Contingent Liabilities

Disclosure of Contingent Liabilities as per Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets''
are as under:

Foot Note:

1 The Income Tax Authority have raised demands on account of various disallowances pertaining to different
assessment years. Many of these matters were adjudicated in favour of Company but are disputed before higher
authorities by the concerned departments. The Company is contesting these demands, which are pending at
various appellate levels. Based on the advice from the independent tax experts and the developments on the
appeals, the management is confident that additional tax so demanded will not be sustained on completion of the
appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been
made in these financial statements.

j Based on the grounds of appeal and advice of the independent legel experts, the management believes that

there is reasonable strong likelihood of succeeding before the various authorities. Pending the final decisions on
the above, no adjustment has been made in these financial statements. The above disputed indirect tax demands
includes ?144.85 Crore which is reimbursable from clients.

3 In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand
pending with the sales tax authorities amounting to ?3.07 Crore (?3.07 crore) on account of disallowance of labour
expenses. The joint operation had filed appeals before the appropriate appellate authorities against the demand.
The decision is pending before the appellate authorities and therefore, no provision has been made in the financial
statements.

4 The Company is a party to several legal suits on construction contract terms related disputes, pending before
various courts and arbitration proceedings in India and aboard. Some of the contractors have lodged claims
on the company seeking enhancement of the contract price, revision of work schedule with price escalation,
compensation for the extended period of work, idle charges etc. These claims are being contested by the company
as being not admissible in terms of provisions of the respected contracts. Against a total claim of ?592.33 crore
(?613.53 crore), provision of ^64.30 crore (?60.99 crore) has been made and balance ^528.02 crore (?552.54
crore) is shown as contingent liability. The Company has also made counter claims on the contractors admissible
as per the terms of the contract of ^255.02 crore (?222.44 crore). Interest on claims is not considered, being
unascertainable.

5 One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of
?0.02 Crore (?0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities
and therefore, no provision has been made in the financial statements.

6 There are some cases relating to employees/others are pending in the Courts against the Company in respect of
which the liability is not ascertainable.

7 (i) The Company has given letter of comfort on behalf of its subsidiary company, Ircon Infrastructure and Services

Limited for an amount of ?2.05 crore (?2.05 crore) for performance guarantee submitted to client.

(ii) The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility
for its subsidiary companies for an amount of ?3,841.63 crore (?3,841.63 crore). The term loan availed (net of
repayment) by the subsidiary companies as on 31.03.2025 is ^2258.15 crore (?1575.27 crore).

(iii) Contingent Assets

Disclosure of Contingent Assets as per Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets'' is as
under:

a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against
which clients have gone to court not accounted for as receivables are ^454.60 crore (?461.40 crore) including
interest calculated up to 31.03.2025 as per arbitration award.

b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company
against which sub-contractors have gone to court, not accounted for as receivables are ?15.36 crore (?14.16
crore).

c) Insurance Claim of USD 0.95 Mn (USD 0.95 Mn) and Ethiopian Birr 1.34 Mn (Birr 1.34 Mn) equivalent to ?8.16
crore (?8.03 crore) including interest calculated upto 31.03.2025 awarded by Honourable Supreme Court of
Ethiopia in favour of company has not been accounted for, pending execution order by High Court of Ethiopia.

4 Company''s Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts to
?747.95 crore (?747.95 crore). Out of the said limit, bank guarantees to the extent of ^245.62 crore (?461.07 crore)
has been utilised as on 31.03.2025.Therefore, the balance limit for issuance of bank guarantee is ?502.33 crore
(?286.88 crore).

5 The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for
its subsidiary companies for an amount of ^3841.63 crore (?3841.63 crore). The subsidiary companies have availed
term loan of ^2388.66 crore (?1655.52 crore) till 31.0

Mar 31, 2024

2.2.16 Provisions, contingent assets and contingent liabilities Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Provisions recognised by the Company include provisions for Maintenance, Demobilisation, Legal Cases, Corporate Social Responsibility (CSR), Onerous Contracts and others.

If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

These provisions are reviewed at each reporting date and adjusted to reflect the current best estimates.

Onerous contracts

If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.

These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities

Contingent liabilities are disclosed when there is a possible obligation or present obligations that may but probably will not, require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.

These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent assets

Contingent assets are not recognised though are disclosed, where an inflow of economic benefits is probable.

2.2.17 Leases

If the contract conveys the right to control the use of an identified asset for a period in exchange for consideration, it is treated as lease.

a) Company as a lessee

The Company recognises a right-of-use asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and leases for low value underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.

The right-of-use assets are also subject to impairment.

ii) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.

In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

The Company''s lease liabilities are included in financial liabilities.

iii) Short term lease and leases of low value assets

The Company applies the short-term lease recognition exemption to its shortterm leases contracts including lease of residential premises and offices (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.

b) Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit or loss due to its operating nature. Initial direct costs incurred in negotiating and arranging an operating

lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.

2.2.18 Financial instruments

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument.

a) Financial assets

Initial recognition and measurement

All financial assets (excluding trade receivables which do not contain a significant financing component, being measured at transaction price) are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of financial asset. Transaction costs directly attributable to the acquisition of financial assets carried at fair value through profit or loss (FVTPL) are expensed in statement of profit and loss.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in below categories based on the Company''s business model and the cash flow characteristics of the asset:

â¢ Financial assets at amortised cost

â¢ After initial measurement, the financial assets that are held for collection of contractual cash flows where those cash flow represent solely payments of principal and interest (SPPI) on the principal amount outstanding are measured at amortised cost using the effective interest rate (EIR) method. Interest income from these financial assets is included in other income.

â¢ Financial assets at fair value through other comprehensive income (FVTOCI):

â¢ A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cashflows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cashflows that are solely payments of principal and interest on the principal amount outstanding.

â¢ Financial assets at fair value through profit or loss (FVTPL):

Assets that do not meet the criteria for amortised cost or FVTOCI are measured at fair value through profit or loss (FVTPL). Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.

Impairment of financial assets

The Company applies the expected credit loss (ECL) model for recognising impairment loss on financial assets measured at amortised cost or financial assets measured at FVTOCI.

The Company follows âsimplified approach'' for recognition of impairment loss allowance on:

â¢ Trade receivables or contract revenue receivables; and

â¢ All lease receivables resulting from transactions within the scope of Ind AS 116

Under simplified approach, impairment loss allowance is recognised based on lifetime ECLs at each reporting date.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial asset. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense in the statement of profit and loss.

The balance sheet presentation of impairment for various financial instruments is described below:

â¢ Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL is presented as an allowance. The impairment allowance reduces the net carrying amount. Until the asset meets writeoff criteria, the Company does not reduce impairment allowance from the gross carrying amount.

â¢ Loan commitments and financial guarantee contracts: ECL is presented as a provision in the balance sheet i.e., as a liability.

â¢ Debt instruments measured at FVTOCI: For debt instruments measured at FVTOCI, the expected credit losses do not reduce the carrying amount in the balance sheet, which remains at fair value. Instead, an amount equal to the allowance is recognised in other comprehensive income as the ''accumulated impairment amount''.

Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109.

The difference between the carrying amount and the amount of consideration received / receivable is recognised in the statement of profit and loss.

b) Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value and, in the case of borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities includes trade payables, borrowings and other financial liabilities etc.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

â¢ Financial liabilities at fair value through profit or loss.

The company has not designated any financial liabilities at FVTPL.

â¢ Financial liabilities at amortised cost

Borrowings, trade payables and other financial liabilities

After initial recognition, borrowings, trade payables and other financial liabilities are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition of financial liabilities

A financial liability (or a part of a financial liability) is derecognised from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires. The difference in the respective carrying amounts is recognised in the statement of profit and loss.

c) Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

d) Offsetting of financial instruments

Financial assets and financial liabilities are offset, and the net amount is reported in the balance sheet if there is a currently enforceable contractual legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.2.19 Fair value measurement

The Company measures financial instruments at fair value at each reporting period.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy and are disclosed accordingly in the financial statements.

External valuers are involved for valuation of significant assets and liabilities, if any. At each reporting date, the Company analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Company''s accounting policies.

9-9-20 Earnings per Share

In determining basic earnings per share, the company considers the net profit attributable to equity shareholders. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.

In determining diluted earnings per share, the net profit attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares. The Company does not have any dilutive potential equity shares.

2.2.21 Non - current asset held for sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. The sale is considered highly probable only when the asset or disposal group is available for immediate sale in its present condition, it is unlikely that the sale will be withdrawn, and sale is expected within one year from the date of the classification. Disposal groups classified as held for sale are stated at the lower of carrying amount and fair value less costs to sell. Property, plant and equipment, investment property and intangible assets are not depreciated or amortised once classified as held for sale. Assets classified as held for sale/distribution are presented separately in the balance sheet.

If the criteria stated by IND AS 105 âNon-current Assets Held for Sale" are no longer met, the disposal group ceases to be classified as held for sale. Non-current asset that ceases to be classified as held for sale are measured at the lower of (i) its carrying amount before the asset was classified as held for sale, adjusted for depreciation that would have been recognised had that asset not been classified as held for sale, and (ii) its recoverable amount at the date when the disposal group ceases

to be classified as held for sale. The depreciation reversal adjustment related property, plant and equipment, investment property and intangible assets is charged to statement of profit and loss in the period when non-current assets held for sale criteria are no longer met.

2.2.22 Prior Period Adjustment

Errors/omissions discovered in the current year relating to prior periods are treated as immaterial and adjusted during the current year, if all such errors and omissions in aggregate does not exceed 0.50% of total operating revenue as per last audited financial statement of the Company.

2.2.23 Significant accounting estimates and judgments

The preparation of Standalone Financial Statements requires the management to make judgements, accounting estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

This policy provides an overview of the areas that involved a higher degree of judgement or complexity, and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed.

Significant areas of estimation and judgements as stated in the respective accounting policies that have the most significant effect on the financial statements are as follows:

Allowances for uncollected trade receivables

Trade receivables do not carry interest and are stated at their nominal values as reduced by appropriate allowances for estimated irrecoverable amount are based on ageing of the receivables balances and historical experiences. Individual trade receivables are written off when management deems not be collectible.

Defined benefit plans

The costs of post-retirement benefit obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Contingencies

In the normal course of business, contingent liabilities may arise from litigation and other claims

against the Company. There are certain obligations which managements have concluded based on all available facts and circumstances are not probable of payment or difficult to quantify reliably and such obligations are treated as contingent liabilities and disclosed in notes.

Impairment of financial assets

The impairment provision for financial assets is based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the nature of business differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective domicile of the companies.

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Impairment of non-financial assets

Non-current asset held for sale

for immediate sale in its present condition, it is unlikely that the sale will be withdrawn, and sale is expected within one year from the date of the classification.

Leases - Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment.

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Revenue recognition

The Company''s revenue recognition policy is central to how the Company values the work it has carried out in each financial year.

These policies require forecasts to be made of the outcomes of Contracts, which require, assessments and judgements to be made on changes in scope of work and claims and variations.

There are several long term and complex projects where the Company has incorporated significant judgements over contractual entitlements. The range of potential outcomes could result in a materially positive or negative change to underlying profitability and cash flow.

Estimates are also required with respect to the below mentioned aspects of the contract:

â¢ Determination of stage of completion

â¢ Estimation of project completion date

â¢ Provisions for foreseeable losses

â¢ Estimated total revenues and estimated total costs to completion, including claims and variations.

These are reviewed at each reporting date and adjust to reflect the current best estimates.

(i) (a) BoD has approved the Equity participation (committed), not exceeding ? 10.00 crore in Wholly Onwned

Subsidiary, Ircon Vadodara Kim Expressway limited (IVKEL) Further, BoD has approved interest free loan not exceeding ? 195.74 crore for IVKEL which has been paid. Further, this includes fair value of the financial guarantee of ?0.24 crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IVKEL.

(b) Board of Directors have approved Interest free loan, of ? 114.11 crore (31st March, 2023: ? 114.11 crore) in favour of Jharkhand Central Railway Limited (JCRL).

(c) Includes fair value of the financial guarantee of ?0.83 crore (as on 31st March, 2023 ? 0.83 crore) issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangere Haveri Highway Limited ( IDHHL), Wholly Owned Subsidiary. Further, BoD has approved interest free loan not exceeding ? 13.86 crore for IDHHL which has been paid.

(d) BoD has approved the Equity participation (committed), not exceeding ? 5 Lakh in Wholly Owned Subsidiary, Ircon Gurgaon Rewari Highway Limited(IGRHL). Further, BoD has approved interest free loan not exceeding ? 103.18 crore for IGRHL out of which ? 88.35 crore (31st March, 2023: 71.35 crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.07 crore issued by IRCON to Indian Overseas Bank on behalf of and in respect of term loan facility availed by IGRHL.

(e) BoD has approved interest free loan not exceeding ? 30.60 crore (31st March, 2023 15.60 crore) for Chhattisgarh East Railway Limited (CERL) which has been paid accordingly.

(f) BoD has approved the Equity participation (committed), not exceeding ? 3.80 crore in Ircon Renewal Power Limited (IRPL). Further, BoD has approved interest free loan not exceeding ? 108.03 crore in IRPL out of which ? 88.24 crore (31st March, 2023: ? 38 crore) has been paid.

(g) Includes fair value of the financial guarantee of ? 0.19 crore (31st March, 2023 ? 019 crore) issued by Ircon to State Bank of India on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway Limited (ISGTL).

(h) The Company vide board approval dated 12th August, 2021 has waived interest on its loan given to IRCON PB Tollway Limited for the period 1st October, 2019 till 31st March, 2024 and deferment of balance interest till repayment of principal. The said waiver has been considered as Investment in subsidiary by the Company in accordance with provision of Ind AS. Accordingly ? 60.75 crore (31st March, 2023: ? 65.62 crore) has been included in above.

(i) BoD has approved the Equity participation (committed), not exceeding ? 17.16 crore, out of which 4.34 crore has been paid to Ircon Akloli-Shirsad Expressway Limited (IASEL). Further, BoD has approved interest free loan not exceeding ? 154.43 crore for IASEL out of which ?51.54 crore (31st March, 2023 ? 51.44 crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.18 crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IASEL.

(j) BoD has approved the Equity participation (committed), not exceeding ? 14.27 crore, out of which 3.62 crore has been paid to Ircon Ludhiana Rupnagar Highway Limited (ILRHL). Further, BoD has approved interest free

loan not exceeding ? 128.43 crore for ILRHL out of which ? 54.42 crore (31st March, 2023 ? 0.89 crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.18 crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by ILRHL.

(k) BoD has approved the Equity participation (committed), not exceeding ? 20.58 crore, out of which 5.20 crore has been paid Ircon Bhoj Morbe Expressway Limited (IBMEL). Further, BoD has approved interest free loan not exceeding ? 185.27 crore for IBMEL out of which ? 51.42 crore (31st March, 2023 ? 6.73 crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.13 crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IBMEL.

(l) BoD has approved the Equity participation (committed), not exceeding ? 5 lakh for WOS, Ircon Haridwar Byepass Limited (IHBL). Further, BoD has approved interest free loan not exceeding ? 111.85 crore for IHBL out of which ? 82.37 crore (31st March, 2023 ? 82.17 crore) has been paid. Additionally, this includes fair value of the financial guarantee of ? 0.23 crore issued by IRCON to State Bank of India on behalf of and in respect of term loan facility availed by IHBL.

(m) Board of Directors have approved Interest free loan, of ? 84.50 crores (31st March, 2023 ? 52 crore) in favour of Mahanadi Coal Railway Limited (MCRL) which has been paid. Further, It has been decided to handover Phase- I (Angul - Balram, 14 KM already operational) and Phase- II (Balram-Putgadia-Tentuloi,54 KM under construction)of MCRL Project to Ministry of Railways (MoR). The legal formalities, pricing and related modalities are in process and the Company does not foresee any impairment in the value of investment at this stage.

(n) BoD has approved interest free loan not exceeding ? 16.12 crore for Chhattisgarh East-West Railway Limited (CEWRL) which has been paid accordingly.

(o) The Interest free loan as per "(i) a to n" above will be repaid only on winding up of the SPVs/JV or end of concession period which ever is later.

(ii) Includes fair value of the financial guarantee for ? 0.28 crore issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31st March, 2024 is Nil (as on 31st March, 2023 Nil).

(iii) "Ministry of Railways" (MoR) vide its letter No. 2011/LMB/22/1/39 dated 18.10.2021 had communicated âinprinciple'' decision for closure of Indian Railway Station Development Corporation Limited (IRSDC) and transfer/ handover of its business to RLDA/MoR. Accordingly, as part of the closure activities, all assets and liabilities (except investments in SITCO and GARUD) are to be transferred to RLDA/MoR on slump sale basis for a consideration not less than the book value as on the cutoff date to be mutually agreed upon as approved in the 59th BoD meeting held on 07.11.2022 of IRSDC. Closure related activities initiated in FY 2021-22 are yet to be completed. The Liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/MoR. Financial statement of IRSDC has been prepared on liquidation basis and the Company does not foresee any impairment in the value of investment at this stage.

(iv) Ministry of Railway (MoR) has granted in-principle approval for closure of Bastar Railway Private Limited, a joint venture company and transfer of its assets and liabilities to MoR. The legal formalities, pricing and related modalities are in process and the Company does not foresee any impairment in the value of investment at this stage.

(ii) Nature and Purpose of Other Reserves:

(a) Retained Earnings

Retained Earnings represents the undistributed profits of the Company.

(b) General Reserve

General Reserve represents the statutory reserves, this is in accordance with Corporate Law wherein a portion of profit is apportioned to General Reserve. Under Companies Act, 2013, the transfer of any amount to General Reserve is at the discretion of the Company.

The Company has created Capital Redemption Reserve out of the profits after Buy Back of shares on 26th December 2017.

(d) Items of Other Comprehensive Income

Other Comprehensive Income represents balance arising on account of exchange difference on translation of foreign operations.

19.2 Other Provisions :

Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows :

a) Demobilisation Provisions

The Company has made provision for demobilisation to meet the expenditure towards demobilisation of manpowerand plant & equipment in respect of foreign projects.

b) Maintenance Provisions

- In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

- Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company''s liability during defect liability period keeping into consideration the contractual obligations, obligations of the subcontractor, operating turnover and other relevant factors

c) Onerous Contracts

The Company has a contract where total contract cost exceeds the total contract revenue. In such situation as per Ind AS 115 and Ind AS 37 the Company has to provide for these losses. The provision is based on the estimate made by the management.

d) Legal Cases

Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts, arbitrations and appeal.

e) Provisions for Other Expenses

Provision for other expenses represents expected liabilities in respect of indirect taxes and Others

(i) (a) Terms and Conditions of the unsecured Loan :

The Company has raised a loan from Indian Railway Finance Corporation ("IRFC") of ? 3200 crore as on 28th March 2018 which in turn have been paid to Railway Land Development Authority ("RLDA") in terms of lease agreement. As per the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company. The repayment of principal of the Loan Amount shall be made in 5 (five) equal instalments commencing from April 15, 2019. [Refer note 8.3 (Foot note (ii)].Companies Act has been complied with for such transactions and the transactions are not violative of any applicable Act.

(b) Rate of Interest :

applicable interest tax, service tax and / or any such other taxes / levies / duties). Such taxes / levies / duties, if any, applicable, shall be payable (in the same manner and time as the principal and interest) by the Borrower to the Lender over and above the rates specified above.

(ii) The Applicable Interest Rate shall be fixed for currency of loan term.

Upon the occurrence of certain identified events the MOU would stand terminated, whereupon Ircon would be substituted by such entity as agreed to between IRFC, IRCON, RLDA & Ministry of Railways (MoR). MoR would be entitled to pre pay the entire outstanding under the Loan Agreement on termination of this agreement.

(d) Offsetting the Loan from IRFC and Recoverable from RLDA :

As per para 2.4 of the Memorandum of understanding (âMOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company.

Company has a legally enforceable right to set off the loan liability regarding IRFC and recoverable from RLDA as per MOU and have the financial arrangement to settle the loan from IRFC with the proceeds realised from RLDA simultaneously. Accordingly, as per provision of IND AS-32 amount recoverable from RLDA and loan from IRFC has been offset and the net amount presented in the balance sheet.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties. The following methods and assumptions were used to estimate the fair values:

i) The fair value of investments in mutual fund units is based on the Net Asset Value (âNAV'') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors

ii) Investment in subsidiaries and joint ventures are classified as equity investments have been accounted at historical cost. since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed in the tables above.

* During the financial year 2023-24 and 2022-23, there were no transfer between Level 1, Level 2 and Level 3 fair value measurements.

31 B. Financial Risk Management

The Company''s principal financial liabilities comprise borrowings, trade, lease liability and other payables. The Company''s principal financial assets include loans to related parties, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds, tax free bonds and Government securities. The Company''s activities expose it to some of the financial risks: market risk, credit risk and liquidity risk.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises Foreign currency risk and Interest rate risk. Financial instruments affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial instruments.

(i) Foreign Currency Risk

As of March 31, 2024 and March 31, 2023, every 5% increase or decrease of the respective foreign currency would impact our profit before tax by approximately ? 2.45 crore and ? 5.67 crore respectively.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of change in market interest rate. The company manages its interest risk in accordance with the companies policies and risk objective. Financial instruments affected by interest rate risk includes tax free bonds, Govt. Securities and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is fixed for the period of financial instruments. Also, the Company does not have any interest risk on loans / borrowings as it bears fixed rate of interest.

b) Credit Risk

The Company''s customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. Accordingly, the Company''s customer credit risk is low. The Company''s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank / corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation.

c) Liquidity risk

The Company''s investment policy and strategy are focused on preservation of capital and supporting the Company''s liquidity requirements. The senior Management of the Company oversees its investment strategy and achieve its investment objectives. The Company typically invests in government of India debt bonds and mutual funds. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss.

The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the mutual funds are highly liquid assets which are paid out monthly and re-invested.

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

31 C. Capital Management

The Company objective to manage its capital in a manner to ensure and safeguard their ability to continue as a going concern so that the Company can continue to provide maximum returns to shareholders and benefit to other stakeholders. The Company has paid dividend as per the guidelines issued by Department of Investment and Public Asset Management (DIPAM) as follows :-

The BoD has recommended a final Dividend of ? 1.30 per equity share on face value of ?2/- for the financial year 202324, subject to the approval of the shareholders at the AGM. This is in addition to Interim Dividend paid @ 1.80 per equity share on face value of ? 2/-.

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants.

32. Employee Benefits

Disclosures in compliance with Ind AS 19 âEmployee Benefits" are as under:

(a) Defined Contribution Plans - General Description

Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01, 2009, for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees who joined before January 01, 2017 but would superannuate/resign after January 01, 2017, before completing 15 years of service, in such case Employer contribution towards pension would be effective from January 01, 2017 only. The scheme was managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities.

In FY 2023-24, the Board of Directors in its 286th meeting held on 11th May, 2023 has approved for shifting of IRCON Defined Contribution Superannuation Pension Scheme, 2009 maintained with LIC to National Pension Scheme (NPS).

Company''s share of contribution amounting to ? 9.35 crore (? 9.17 crore) has been paid and accounted for during the FY 2023-24 out of which ? 4.72 crore for the period from October 1st ,2023 to March 31st, 2024 has been paid to NPS.

(b) Defined Benefit Plans - General Description

Provident fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust ( IRCON Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax Authorities. The Company has an obligation to make good the shortfall, if any, between the return form the investment of the trust and the interest payment based on the notified interest rate.

During the period, the Company has contributed ? 15.78 crore (? 13.64 crore) to the trust towards employer''s contribution for providend fund.

Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the employees of the Company as a social security measure on the termination of their employment due to superannuation, retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of India. As at March 31, 2024 a liability of ? 3.81 crore (? 7.17 crore) has been booked in the books of accounts based on the actuarial valuation.

Post Retirement Medical Benefit (PRMB)

The Company had established an irrevocable trust by initial one-time contribution of ? 12.00 crore during the year 2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as a voluntary welfare measure for which the Company is not liable for providing such benefit to its employees. Further, the Company provides medical benefits to its emolpyees (and spouse) who superannuate from the Company. The Company has contributed ? 5.17 crore (? 5.26 crore) based on DPE guidelines on Superannuation Benefits.

Other Retirement Benefits - General Description

Other retirement benefits include settlement at home-town or to the place where he/she or his/her family intends to settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial valuation.

The summarised position of various employee benefits recognised in the statement of profit and loss and balance sheet as on March 31, 2024 is as under:

Risk analysis

Company is exposed to a number of risks in the defined benefit plan. Most significant risks pertaining to defined benefits plan, and management''s estimation of the impact of these risks are as follows:

a) Interest risk

A decrease in the interest rate on plan assets will increase the plan liability.

b) Longevity risk/ Life expectancy

The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan liability.

c) Salary growth risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

(vi) Government Related Entities:

The Company is a Central Public Sector Enterprise (CPSE) under the Ministry of Railways. The Company is controlled by Government of India (GOI), by holding 65.17 % of equity shares in the name of President of India as at 31st March, 2024. Pursuant to Para 25 and 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms at arm length basis. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements.

35. Earnings Per Share

Disclosure as per Ind AS 33 âEarnings per share''

Basic EPS is calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS is calculated by dividing the profit for the year attributable to the equity holders after considering the effect of dilution by weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

36. Impairment of Assets

During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, âImpairment of Assets" notified under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil (Nil) has been provided for."

37. Provisions, Contingencies and Commitments

(i) Provisions

The nature of provisions provided and movement in provisions during the year as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assets'' are disclosed in Note 19.

(ii) Contingent Liabilities

Disclosure of Contingent Liabilities as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assets'' are as under:

Foot Note:

1. The Income Tax Authority have raised demands on account of various disallowances pertaining to different assessment years. Many of these matters were adjudicated in favour of Company but are disputed before higher authorities by the concerned departments. The Company is contesting these demands, which are pending at various appellate levels. Based on the advice from the independent tax experts and the developments on the appeals, the management is confident that additional tax so demanded will not be sustained on completion of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been made in these financial statements.

2. There are various disputes pending with authorities of excise, customs, service tax, sales tax, VAT etc. The Company is contesting these demands raised by concerned authorities and are pending at various appellate authorities. Based on the grounds of appeal and advice of the independent legel experts, the management believes that there is reasonable strong likelihood of succeeding before the various authorities. Pending the final decisions on the above, no adjustment has been made in these financial statements. The above disputed indirect tax demands includes ? 181.90 crore which is reimbursable from clients.

3. In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand pending with the sales tax authorities amounting to ? 3.07 crore (? 3.33 crore) on account of disallowance of labour expenses. The joint operation had filed appeals before the appropriate appellate authorities against the demand. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

4. The Company is a party to several legal suits on construction contract terms related disputes, pending before various courts and arbitration proceedings in India and aboard. Some of the contractors have lodged claims on the company seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the company as being not admissible in terms of provisions of the respected contracts. Against a total claim of ? 613.53 crore (? 701.86 crore), provision of ? 60.99 crore (? 77.35 crore) has been made and balance ? 552.54 crore (? 624.50 crore) is shown as contingent liability. The Company has also made counter claims on the contractors admissible as per the terms of the contract of ? 222.44 crore (? 333.31 crore). Interest on claims is not considered, being unascertainable.

5. One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of ? 0.02 crore (? 0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

6. There are some cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

7. (i) The Company has given letter of comfort on behalf of its subsidiary company, Ircon Infrastructure and

Services Limited for an amount of ? 2.05 crore (? 11.39 crore) for performance guarantee submitted to client. (ii) The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ? 3,841.87 crore (? 4,565.99 crore). The term loan availed (net of repayment) by the subsidiary companies as on 31.03.2024 is ? 1,575.27 crore (?1,464.21 crore).

(iii) Contingent Assets

Disclosure of Contingent Assets as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assets'' is as under:

(a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against which clients have gone to court not accounted for as receivables are ? 461.40 crore (? 461.17 crore) including interest calculated up to 31.03.2024 as per arbitration award.

(b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company against which sub-contractors have gone to court, not accounted for as receivables are ? 14.16 crore (? 22.48 crore).

(c) Insurance Claim of USD 0.95 Mn (USD 0.93 Mn) and Ethiopian Birr 1.34 Mn (Birr 1.28 Mn) equivalent to ? 8.03 crore (? 7.79 crore) including interest calculated upto 31.03.2024 awarded by Honourable Supreme Court of Ethiopia in favour of company has not been accounted for, pending execution order by High Court of Ethiopia.

* The Company''s Board of Directors (BoD) has approved a resolution on 11th May, 2023 to increase the loan commitment

in three Joint Venture Companies. Accordingly, the changes in the commitment has been disclosed.

4. Company''s Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts to ? 747.95 crore (? 738.61 crore). Out of the s

Mar 31, 2023

(i) (a) BoD has approved the Equity participation (committed), not exceeding ? 10.00 crore in WOS, Ircon Vadodara Kim Expressway limited (IVKEL) Further, BoD has approved interest free loan not exceeding ? 195.74 crore for IVKEL which has been paid, Further includes fair value of the financial guarantee of ?0.24 Crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IVKEL.

(b) Board of Directors have approved Interest free loan, of ?114.11 crores (March,31st 2022: ?50 crores) in favour of Jharkhand Central Railway Limited (JCRL).

(c) Includes fair value of the financial guarantee of ?0.83 Crore (as on 31.03.2022 ? 0.83 Crore) issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangere Haveri Highway Limited ( IDHHL),WOS.Further, BoD has approved interest free loan not exceeding ? 13.86 crore for IDHHL which has been paid.

(d) BoD has approved the Equity participation (committed), not exceeding ? 5 Lakh for WOS, Ircon Gurgaon Rewari Highway Limited(IGRHL).

Further, BoD has approved interest free loan not exceeding ? 103.18 crore for IGRHL out of which ?71.35 Crore (March 31st ,2022:18.35 crore) has been paid.

(e) BoD has approved interest free loan not exceeding ?15.60 crore for Chhattisgarh East Railway Limited (CERL) which has been paid accordingly.

"(f) BoD has approved the Equity participation (committed), not exceeding ?3.80 crore in Ircon Renewal Power Limited (IRPL)

Further, BoD has approved interest free loan not exceeding ?108.03 crore in IRPL out of which ?38.00 crore (March 31st, 2022: 1.40 crore) has been paid."

(g) Includes fair value of the financial guarantee of ?0.19 Crore (March 31,2022 ?0.19 Crore) issued by Ircon to State Bank on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway Limited (ISGTL).

(h) The Company vide board approval dated August 12,2021 has waived interest on its loan given to IRCON PB Tollway Limited for the period October 01,2019 till March 31, 2024 and deferment of balance interest till repayment of principal. The said waiver has been considered as Investment in subsidiary by the Company in accordance with provision of Ind AS. Accordingly ?65.62 (March 2022: ?65.79 Crore) crore has been included in above.

(i) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS, Ircon Akloli-Shirsad Expressway Limited (IASEL).

Further, BoD has approved interest free loan not exceeding ?171.54 crore for IASEL out of which ?51.44 Crore has been paid and Includes fair value of the financial guarantee of ?106/- (as on 31.03.2022 ?Nil) issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by Ircon Akloli-Shirsad Expressway Limited (IASEL)."

(j) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Ludhiana Rupnagar Highway Limited (ILRHL).Further, BoD has approved interest free loan not exceeding ?142.65 crore for ILRHL out of which ?0.89 Crore (March 31, 2022 ?Nil) has been paid.

(k) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Bhoj Morbe Expressway Limited (IBMEL).

Further, BoD has approved interest free loan not exceeding ?205.80 crore for IBMEL out of which ?6.73 Crore (March 31, 2022 ?Nil) has been paid."

(l) BoD has approved the Equity participation (committed), not exceeding ?5 Lakh for WOS,Ircon Haridwar Byepass Limited (IHBL).

Further, BoD has approved interest free loan not exceeding ?111.85 crore for IHBL out of which ?82.17 Crore (March 31, 2022 ?Nil) has been paid."

(m) Board of Directors have approved Interest free loan, of ?52 crores (March 31, 2022 ?Nil) in favour of Mahanadi Coal Railway Limited (MCRL) which has been paid.

(n) The Interest free loan as per "(i) a to m" above will be repaid only on winding up of the SPVs/JV or end of conecession period which ever is later.

(ii) Includes fair value of the financial guarantee for ?0.28 crore issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31.03.2023 is ?Nil (as on 31.03.2022 ?Nil).

(iii) "Ministry of Railways" (MoR) vide its letter No. 2011/LMB/22/1/39 dated 18.10.2021 had communicated ''in-principle'' decision for closure of Indian Railway Station Development Corporation Limited (IRSDC) and transfer/handover of its business to RLDA/MoR. Accordingly, as part of the closure activities, all assets and liabilities (except investments in SITCO and GARUD) are to be transferred to RLDA/MoR on slump sale basis for a consideration not less than the book value as on the cutoff date to be mutually agreed upon as approved in the 59th BoD meeting held on 07.11.2022 of IRSDC. Closure related activities initiated in FY 2021-22 are yet to be completed. The Liquidation process shall commence on completion of these activities and handing over of assets and liabilities to RLDA/ MoR.Financial statement of IRSDC has been prepared on liquidation basis. The Company does not foresee any impairment in the value of its investment as the Company''s share in the reported Net Worth of IRSDC is ?58.50 Crore i.e.26% of ?225 Crore.

(i) Includes FDRs under Lien for ?0.01 crore (as on 31 March 2022 : ?0.01 crore).

(ii) The Company has raised a loan from Indian Railway Finance Corporation ("IRFC") (Refer note 18.1) which in turn have been paid to Railway Land Development Authority ("RLDA") in terms of lease agreement. As per the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company, at least five (5) days prior to their respective due date under the Loan Agreement, into such account as maybe designated by IRFC. RLDA and Ministry of railways ("MoR") shall mutually enter into appropriate arrangements for corresponding disbursement of funds from MoR to RLDA. The terms and conditions of this recoverable amount is same as in the case of the said loan.

The Company shall be entitled to appoint appropriate developer(s) through open, competitive and transparent bid process for the purposes of undertaking the commercial development of the Project Site, and for the purposes thereof further sublease the Project Site (together with all associated Development Rights) to the developers so identified by the Company.

In FY 2017-18, Department of Investment and Public Asset Management (DIPAM) had instructed the Company to buy back shares to the extent of 5% of paid up capital. Total shares proposed to be bought back was 49,41,818 in numbers at book value of these shares. Board of Directors at its 236th meeting dated 21.09.2017 approved proposal to buy back by the company of its fully paid up equity shares of ?10 each not exceeding 49,41,818 shares from the existing shareholders. As on the closing date of submission of offer i.e. 04.12.2017 offer for 49,28,426 shares held by Govt. of India was received.

(d) Terms / Rights attached to Equity Shares :

(i) Voting

The Company has only one class of equity shares having a par value of ?2 per share. Each holder of equity share is entitled to one vote per share.

(ii) Liquidation

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 the shareholders.

(iii) Dividend

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting

(f) The Board of Directors of IRCON in its 268th meeting held on 5th April, 2021 had approved the proposal for issuance of 47,02,57,870 fully paid-up Bonus Shares of ?2/- each in the ratio of 1:1, (i.e. issue of 1 (one) equity share for every existing 1 (one) equity share with 21st May, 2021 as the Record Date for the purpose of ascertaining the eligibility of Shareholders. The Final Listing and Trading Approvals from NSE and BSE have been received on 31st May, 2021. Post Bonus, the Paid-up Share Capital of the Company is ?188,10,31,480 divided into 94,05,15,740 equity shares of ?2/- each.

(a) Terms and Conditions of the unsecured Loan :

The Company has raised a loan from Indian Railway Finance Corporation ("IRFC") of ?3200 crore as on 28th March 2018 which in turn have been paid to Railway Land Development Authority ("RLDA") in terms of lease agreement. As per the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company. The repayment of principal of the Loan Amount shall be made in 5 (five) equal instalments commencing from April 15, 2019. [Refer note 8.3 (Foot note (ii)].Companies Act has been complied with for such transactions and the transactions are not violative of any applicable Act.

(b) Rate of Interest :

(i) The Company will pay interest on the principal amount of the Loan advanced and outstanding from time to time, at the rate of 8.77% (Eight point seven seven percent) per annum ("Applicable Interest rate") (exclusive of applicable interest tax, service tax and / or any such other taxes / levies / duties). Such taxes / levies / duties, if any, applicable, shall be payable (in the same manner and time as the principal and interest) by the Borrower to the Lender over and above the rates specified above.

(ii) The Applicable Interest Rate shall be fixed for currency of loan term.

(d) Offsetting the Loan from IRFC and Recoverable from RLDA

As per para 2.4 of the Memorandum of understanding ("MOU") entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company.

19.2 Other Provisions :

Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows :

a) Demobilisation Provisions

The Company has made provision for demobilisation to meet the expenditure towards Demobilisation of Manpower and Plant & Equipment in respect of foreign projects.

b) Maintenance Provisions

In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company''s liability during defect liability period keeping into consideration the contractual obligations, obligations of the sub-contractor, operating turnover and other relevant factors.

c) Legal Cases

Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts, arbitrations and appeal.

d) Provisions for Other Expenses

Provision for other expenses represents expected liabilities in respect of indirect taxes and others.

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties.The following methods and assumptions were used to estimate the fair values:

i) The fair value of investments in mutual fund units is based on the Net Asset Value (''NAV'') as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

ii) Investment in subsidiaries and joint ventures are classified as equity investments have been accounted at historical cost. since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed in the tables above.

* During the financial year 2022-23 and 2021-22, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements.

B. Financial Risk Management

The Company''s principal financial liabilities comprise borrowings, trade, lease liability and other payables. The Company''s principal financial assets include loans to related parties, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds and tax free bonds. The Company''s activities expose it to some of the financial risks: market risk, credit risk and liquidity risk.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises Foreign currency risk and Interest rate risk. Financial instruments affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial instruments.

(i) Foreign Currency Risk

As of March 31, 2023 and March 31, 2022, every 5% increase or decrease of the respective foreign currency would impact our profit before tax by approximately ?5.67 crore and ?16.98 crore respectively.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of change in market interest rate. The company manages its interest risk in accordance with the companies policies and risk objective. Financial instruments affected by interest rate risk includes tax free bonds and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is fixed for the period of financial instruments. Also, the Company does not have any interest risk on loans / borrowings as it bears fixed rate of interest. b) Credit Risk

The Company''s customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. Accordingly, the Company''s customer credit risk is low. The Company''s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank / corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation.

The Company is exposed to credit risk for guarantees given. The Company''s maximum exposure in this respect is the maximum amount the Company may have to pay if the guarantee is called on (see Note 37). Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

funds. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss.

The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the mutual funds are highly liquid assets which are paid out monthly and re-invested.

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company''s performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Company''s policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

No significant changes in estimation techniques or assumptions were made during the reporting period.

During the year, the Company has recognised loss allowance of ?20.00 (31 March, 2022 : ?2.26 ). c) Liquidity risk

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants.

32. Employee Benefits

Disclosures in compliance with Ind AS 19 "Employee Benefits" are as under:

(a) Defined Contribution Plans - General Description

Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01, 2009, for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees who joined before January 01, 2017 but would superannuate/resign after January 01, 2017, before completing 15 years of service, in such case Employer contribution towards pension would be effective from January 01, 2017 only. The scheme is managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Company''s share of contribution amounting to ?9.17 crore (? 8.93 crore) for the period from April 01, 2022 to March 31, 2023 has been paid and accounted for during the period 2022-23.

Subsequent to closure of FY 2022-23, the Board of Directors in its 286th meeting held on 11th May, 2023 has approved for shifting of IRCON Defined Contribution Superannuation Pension Scheme, 2009 maintained with Life Insurance Corporation (LIC) to National Pension Scheme (NPS).

(b) Defined Benefit Plans - General Description

Provident fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust ( IRCON Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax Authorities. The Company has an obligation to make good the shortfall, if any, between the return from the investment of the trust and the interest payment based on the notified interest rate.

During the period, the Company has contributed ?13.64 crore (? 13.43 crore) to the trust towards employer''s contribution for providend fund.

Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the employees of the Company as a social security measure on the termination of their employment due to superannuation, retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of India. As at March 31, 2023 a liability of ?7.17 crore (? 4.68 crore) has been booked in the books of accounts based on the actuarial valuation.

Post retirement medical facility (PRMF)

The Company had established an irrevocable trust by initial one-time contribution of ?12.00 crore during the year 2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as a voluntary welfare measure for which the Company is not liable for providing such benefit to its employees. Further, the Company provides medical benefits to its emolpyees (and spouse) who superannuate from the Company. The Company has contributed ?5.26 crore (? 4.64 crore) based on DPE guidelines on Superannuation Benefits.

Other Retirement benefits - General Description

Other retirement benefits include settlement at home-town or to the place where he/she or his/her family intends to settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial valuation.

The summarised position of various employee benefits recognised in the statement of profit and loss and balance sheet as on March 31, 2023 is as under:

reporting period.

Sensitivities due to mortality and withdrawals are insignificant and hence ignored.

Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.

ix) Expected contribution for next annual reporting period

The expected contribution to the defined benefit plan for next annual reporting period is ?23.07 Crore.

Risk analysis

a) Interest risk

A decrease in the interest rate on plan assets will increase the plan liability.

b) Longevity risk/ Life expectancy

c) Salary growth risk

(vi) Government Related Entities:

The Company is a Central Public Sector Enterprise (CPSE) under the Ministry of Railways. The Company is controlled by Government of India (GOI), by holding 73.18 % of equity shares in the name of President of India as at 31st March, 2023. Pursuant to Para 25 and 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. Transactions with these parties are carried out at market terms at arm length basis. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements.

	Particulars	Foot Note	As at 31st March 2022	Addition during the year	Claims settled / Paid during the year	As at 31st March 2023
b)	Guarantees (excluding financial guarantees) issued by the company on behalf of Subsidiaries Companies	7 (i) (ii)	1,067.41	668.32	(260.13)	1,475.60
c)	Other money for which company is contingent liable Liquidated damages pending disposal of application for extension of time by clients		9.27	-	-	9.27
	Total		2,080.03	893.54	(579.76)	2,393.81

36. Impairment of Assets

During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, "Impairment of Assets" notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil (Nil) has been provided for."

37. Provisions, Contingencies and Commitments

(i) Provisions

The nature of provisions provided and movement in provisions during the year as per Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets'' are disclosed in Note 19.

(ii) Contingent Liabilities

Disclosure of Contingent Liabilities as per Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets'' are as under:

(? in crore)
	Particulars	Foot Note	As at 31st March 2022	Addition during the year	Claims settled / Paid during the year	As at 31st March 2023
a)	Claims against the Company not acknowledged as debts :
	Disputed Direct tax demands (i) in respect of the Company Disputed Indirect tax demands	1	199.03	24.44	(183.54)	39.93
	(i) in respect of the Company	2	263.66	27.47	(49.97)	241.16
	(ii) in respect of the Joint Operations	3	3.33	-	-	3.33
	Legal Cases
	(i) in respect of the Company	4	537.31	173.31	(86.12)	624.50
	(ii) in respect of the Joint Operations	5	0.02		-	0.02
	Claims by Employees	6	-		-	-

Foot Note:

3. In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand pending with the sales tax authorities amounting to ?3.33 crore (? 3.33 crore) on account of disallowance of labour expenses. The joint operation had filed appeals before the appropriate appellate authorities against the demand. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

4. The Company is a party to several legal suits on construction contract terms related disputes, pending before various courts and arbitration proceedings in India and aboard. Some of the contractors have lodged claims on the company seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the company as being not admissible in terms of provisions of the respected contracts. Against a total claim of ?701.86 crore (? 638.79 crore), provision of ?77.35 crore (? 101.48 crore) has been made and balance t624.51 crore (? 537.31 crore) is shown as contingent liability. The Company has also made counter claims on the contractors admissible as per the terms of the contract of ?333.31 crore (? 238.82 crore). Interest on claims is not considered, being unascertainable.

5. One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of ?0.02 crore (? 0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

6. There are some cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

7 (i) The Company has given letter of comfort on behalf of its subsidiary company, Ircon Infrastructure and Services Limited for an amount of ?11.39 crore (? 11.39 crore) for performance guarantee submitted to client.

(ii) The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ?4,565.99 crore (? 1,534.80 crore). The term loan availed (net of repayment) by the subsidiary companies as on 31.03.2023 is t1,464.21 crore (? 1,056.02 crore).

(iii) Contingent Assets

Disclosure of Contingent Assets as per Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets'' is as under:

a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against which clients have gone to court not accounted for as receivables are ?461.17 crore (? 425.76 crore) including interest calculated up to 31.03.2023 as per arbitration award.

b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company against which subcontractors have gone to court, not accounted for as receivables are ^22.48 crore (? 25.42 crore).

c) Insurance Claim of USD 0.93 Mn (USD 0.91 Mn) and Ethiopian Birr 1.28 Mn (Birr 1.22 Mn) equivalent to ?7.79 crore (? 7.05 crore) including interest calculated upto 31.03.2023 awarded by Honourable Supreme Court of Ethiopia in favour of company has not been accounted for, pending execution order by High Court of Ethiopia.

(iv) Commitments										(? in crore)
	Particulars			Foot			As at 31st			As at 31st
				Note			March 2023			March 2022
a)	Capital Commitments
	Estimated amount of contracts remaining to be executed on capital			1				16.19		16.37
	account (net of advance) and not provided for:
b)	Other Commitments
(i)	Funding committed by way of equity and loans in		Subsidiary	2				640.85		837.95
	Companies
(ii)	Funding committed by way of equity and loans in Joint Venture			3				177.60		75.42
	Companies
(iii)	Counter Bank Guarantee for Subsidiary Companies			4				291.58		258.28
(iv)	Corporate Guarantee for Subsidiary Companies			5				2807.17		444.30
(v)	Sponsor''s Support Agreement on behalf of Joint Venture			6 (i) (ii)				1361.36		1,033.76
(vi)	Loan commitment for Subsidiary Companies			7				500.00		500.00
	Total						5,794.75		3,166.08
Foot Note:
										(? in crore)
1.	S.No	Capital Commitments					As at 31st			As at 31st
1							March 2023		M	arch 2022
	1	Estimated amount of contracts remaining to be executed on Property,						1.72		-
		Plant and Equipments
	2	Estimated amount of contracts remaining to be executed on Investment						-		-
		Property
	3	Estimated amount of contracts remaining to be executed on Intangible						14.47		16.37
		Assets under development
		Total				16.19			16.37
(? in crore)
2.	S. No	Name of the Subsidiary	As at 31st March 2023					As at 31st March 2022
			Equity	Loans				Equity		Loans
	1	Ircon PB Tollway Limited	-				-		-	-
	2	Ircon ShivpuriGuna Tollway Limited	-				-		-	-
	3	Ircon Davanagere Haveri Highway Limited	44.05			4.33		44.05		12.70
	4	Ircon Vadodara Kim Expressway Limited	-						-	26.56
Â£	5	Ircon Gurgaon Rewari Highway Limited	-		31.83				-	84.83

2.	S. No	Name of the Subsidiary		As at 31st March 2023				As at 31st March 2022
				Equity		Loans		Equity			Loans
6		Ircon Akoli-Shirsad Expressway Limited *		17.11		102.99			-		144.39
7		Ircon Ludhiana Rupnagar Highway Limited *		14.22		127.54			-		129.62
8		Ircon Bhoj Morbe Expressway Limited *		20.53		178.54			-		183.02
9		Ircon Haridwar Bypass Limited			-	29.68			-		106.15
10		Ircon Renewable Power Limited			-	70.03			-		106.63
		Total		95.91		544.94		44.05		793.90
* The Company''s Board of Directors (BoD) has approved a resolution on 6th April, 2023 to modify the capital structure of
three Subsidiary Companies. The modification involved changing the nature of the equity commitment from											interest-free
loan to purely equity share capital. Accordingly, the changes in the commitment has been disclosed.
3.	S.No		Name of the Joint Venture Company			As at 31st			As at 31st
						March 2023			March 2022
						quity	Loans		Equity		Loans
1			Chhattisgarh East Railway Limited *			-	33.14			-	-
2			Chhattisgarh East-West Railway Limited *			0.01	64.48		36.83		-
3			Ircon Soma Tollway Pvt Ltd			-				-	-
4			Mahanadi Coal Railway Limited *			-	54.63			-	-
5			Bastar Railway Private Limited			0.01	25.33			-	25.33
6			Jharkhand Central Railway Limited						13.26		-
			Total		0.02		177.58		50.09		25.33

* The Company''s Board of Directors (BoD) has approved a resolution on 11th May, 2023 to increase the loan commitment in three Joint Venture Companies. Accordingly, the changes in the commitment has been disclosed.

4. Company''s Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts to ?738.61 crore (? 488.61 crore). Out of the said limit, bank guarantees to the extent of ?447.03 crore (? 230.33 crore) has been utilised as on 31.03.2023. Therefore, the balance limit for issuance of bank guarantee is ?291.58 crore (? 258.28 crore).

5. The Company has given corporate guarantee to various Banks on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ?4,565.99 crore (? 1534.80 crore). The subsidiary companies have availed term loan of ?1758.82 crore (? 1090.50 crore) till 31.03.2023. During the year, the subsidiary companies have repaid an amount of ?294.61 crore (? 34.48 crore) against these term loans and the term loan balance as on 31.03.2023 is ^1,464.21 crore (? 1056.02 crore).

6. (i) The Company along with SECL (Sponsors) have executed Sponsor''s Support Agreement on behalf of its Joint Venture, Chhattisgarh East West Railway Ltd.(CEWRL), wherein it has been stated that in case of termination of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCON''s share as per the given amount of Rupee Term Loan is ?1,033.76 (26% of total loan of ?3976 Crore) as on 31st March 2023 (31st March, 2022: ?1033.76 Crore).

(ii) The Company along with CCL (Sponsors) have executed Sponsor''s Support Agreement on behalf of its Joint Venture, Jharkhand Central Railway Ltd. (JCRL), wherein it has been stated that in case of termination of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCON''s share as per the given amount of Rupee Term Loan is ?327.60 (26% of total loan of ?1259.75 crore) as on 31st March 2023.

7. The Company has committed to grant loan (Unsecured interest free/ Unsecured interest-bearing) upto an aggregate amount of ?500 crore at any time to Special Purpose Vehicles (SPVs) formed as wholly owned subsidiary (WOS) companies in India for executing road/ highway project of NHAI, in addition to limits already approved BoD.

38. Segment Reporting

Disclosure as per Ind AS 108 " Operating Segmentâ is given as under:

A. General information

Operating segments are defined as components of an enterprise for which discrete financial information is available which is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing performance. The Board of Directors of the Company is the Chief Operating Decision Maker (CODM). The operating segments have been reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) for review of performance and allocating resources.

The Company has determined reportable operating segments from geographical perspective.

(i) Trade receivables are non-interest bearing and the customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. The Company''s average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days.

(ii) Contract Assets are recognised over the period in which services are performed to represent the Company''s right to consideration in exchange for goods or services transferred to the customer. It includes balances due from customers under construction contracts that arise when the Company receives payments from customers as per terms of the contracts however the revenue is recognised over the period under input method. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone.

For the year 2022 - 23 and 2021-22 - There has been a net increase of ?332.45 crore and ?134.78 crore respectively as compared to previous year mainly due to recognition of Revenue based on input method whereas bills for work done are certified based on contract condition.

During the year ended March 31st, 2023, ?807.48 crore and March 31st 2022, ?272.11 crore of contract assets as of April 1st, 2022 and April 1st 2021 respectively has been reclassified to trade receivables upon billing to customers on completion of milestones.

iii. Contract liabilities relating to construction contracts are balances due to customers, these arise when a particular milestone payment exceeds the revenue recognised to date under the input method and advance received in long term construction contracts. The amount of Advance received gets adjusted over the construction period as and when invoicing is made to the customer.

D. Cost to obtain the contract

Amount recognised as asset as at 31st March, 2023 is Nil (As at 31st March, 2022: Nil)

Amount of amortisation recognised in the statement of profit and loss during the year is Nil (FY 2021-22: Nil)

E. Performance obligation

Information about the Company''s performance obligations are summarised below:

The transaction price allocated to the remaining performance obligations (uns

Mar 31, 2022

(i) These valuations are based on valuations performed by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 applying valuation model acceptable internationally. Fair Values are based on cost & income/cost/market value approach. As per assumption made by valuer GST has not been considered for valuation purpose

(ii) The fair value measurement is categorised in Level 3 of fair value hierarchy.

(iii) Investment property in Noida is at three locations having lease term of 90 years, Properties in Gurugram and Bangalore are at one location only which are freehold.

(iv) Property situated at Noida Sector-1 transferred from PPE to Investment Property

i) Includes lease hold building on Railways land for 30 years lease at San Martin Marg, New Delhi; Pali Hill, Mumbai & Metro Railway Service Building, Kolkata for which agreement is yet to be finalised.

ii) Lease hold land includes land at Greater Noida Industrial Development Authority (GNIDA) for construction of proposed Central Inspection Cell (CIC) by the Company (Gross value '' 0.76 crore). The request for time extension for construction of Building has been submitted to the appropriate authority.

(i) (a) BoD has approved the Equity participation (committed), not exceeding ''10.00 crore in WOS, Ircon Vadodara

Kim Expressway limited (IVKEL) Further, BoD has approved interest free advance not exceeding ''195.71 crore for IVKEL out of which ''169.18 crore has been paid, Further includes fair value of the financial guarantee of ''0.24 Crore issued by IRCON to Bank of Baroda on behalf of and in respect of term loan facility availed by IVKEL.

(b) Board of Directors have approved Interest free advance, of ''50 crores in favour of Jharkhand Central Railway Limited (JCRL). The loan will be repaid only on winding up of the Project or end of conecession period which ever is later.

(c) Includes fair value of the financial guarantee of ''0.83 Crore (as on 31.03.2021 ''5.00 Crore) issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by Ircon Davangeeri Haveri Highway Limited (IDHHL), WOS. Further, BoD has approved interest free advance not exceeding ''13.86 crore for IDHHL which has been paid

(d) BoD has approved the Equity participation (committed), not exceeding ''5 Lakh for WOS, Ircon Gurgaon Rewari Highway Limited (IGRHL).Further, BoD has approved interest free advance not exceeding ''103.18 crore for IGRHL out of which ''18.35 crore has been paid

(e) BoD has approved interest free advance not exceeding ''15.60 crore for Chhattisgarh East Railway Limited (CERL) which has been paid.

(f) BoD has approved the Equity participation (committed), not exceeding ''3.80 crore in Ircon Renewal Power Limited (IRPL) Further, BoD has approved interest free advance not exceeding ''108.03 crore in IRPL out of which ''1.40 crore has been paid.

(g) Includes fair value of the financial guarantee of ''0.19 Crore issued by Ircon to State Bank on behalf of and in respect of term loan facility availed by Ircon Shivpuri Guna Tollway Limited (ISGTL).

(h) The Company vide board approval dated August 12, 2021 has waived interest on its Loan given to IRCON PB Tollway Limited for the period October 01,2019 till March 31, 2024 and deferment of balance interest till repayment of principal. The said waiver has been considered as Investment in subsidiary by the Company in accordance with provision of Ind AS. Accordingly ''65.79 crore has been included in above.

(ii) (a) As per Articles of Association (Article V) of Ircon Soma Tollway Private Limited (ISTPL), shareholders can transfer

their shareholding subject to Concession Agreement dated 28^th September 2005 signed with NHAI which provides for equity holding of not less than 51% by Consortium members in ISTPL during the construction period and three years following Commercial Operation Date, which was achieved on 19.04.2010. Thereafter, the aforesaid shareholding can be diluted to 26% subject to the pre-emption right of the other shareholders.

(b) Includes fair value of the financial guarantee for ''0.28 crore issued by IRCON to Punjab National Bank on behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31.03.2022 is ''Nil (as on

31.03.2021 ''Nil).

(iii) (a) The Board of Directors of Indian Railway Stations Development Corporation Limited, a Joint Venture Company, in

its meeting held on 29^th September, 2020 has approved participation of Rites limited as third strategic partner / shareholder with consequent revision in the shareholding pattern among RLDA, IRCON and RITES in the ratio of 50:26:24 respectively.

(b) Indian Railway Station Development Corporation Limited (IRSDC) has received a letter from Ministry of Railway dated

18.10.2021 for closure of business and transfer/hand over of its business/assets to RLDA/MoR. Accordingly, all assets and liabilities as on 31.03.2022 are to be transferred to RLDA/MoR on slump sale basis other than investment in GARUD & SITCO for a consideration not less than the book value as approved in the 55^th BOD meeting held on

05.05.2022 of IRSDC. Till such time the slump sale is approved by competent authority i.e. IRSDC/RLDA/MoR the investment is carried at cost.

(i) The Company vide board approval dated August 12,2021 has waived interest on its Loan given to IRCON PB Tollway Limited for the period October 01,2019 till March 31,2024. The said waiver has been considered as Investment in subsidiary by the Company in accordance with provision of Ind AS. {Refer Note 8.1 (i) (h)}

(i) Includes FDRs under Lien for ''0.01 crore (as on 31 March 2021 : ''0.01 crore).

(ii) The Company has raised a loan from Indian Railway Finance Corporation (âIRFCâ) (Refer note 18.1) which in turn have been paid to Railway Land Development Authority (âRLDAâ) in terms of lease agreement. As per the Memorandum of understanding (âMOUâ) entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company, at least five (5) days prior to their respective due date under the Loan Agreement, into such account as maybe designated by IRFC. RLDA and Ministry of railways (âMoRâ) shall mutually enter into appropriate arrangements for corresponding disbursement of funds from MoR to RLDA. The terms and conditions of this recoverable amount is same as in the case of the said loan. The Company shall be entitled to appoint appropriate developer(s) through open, competitive and transparent bid process for the purposes of undertaking the commercial development of the Project Site, and for the purposes thereof further sub-lease the Project Site (together with all associated Development Rights) to the developers so identified by the Company.

buy back shares to the extent of 5% of paid up capital. Total shares proposed to be bought back was 49,41,818 in numbers at book value of these shares. Board of Directors at its 236th meeting dated 21.09.2017 approved proposal to buy back by the company of its fully paid up equity shares of Rs. 10 each not exceeding 49,41,818 shares from the existing shareholders. As on the closing date of submission of offer i.e. 04.12.2017 offer for 49,28,426 shares held by Govt. of India was received.

(d) Terms / Rights attached to Equity Shares :

(i) Voting

The Company has only one class of equity shares having a par value of Rs.2 per share. Each holder of equity share is entitled to one vote per share.

(ii) Liquidation

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 the shareholders.

(iii) Dividend

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

(f) The shareholders of Company through postal Ballot on 22nd March, 2020 have approved:

(i) Split the face value of one equity share from Rs. 10/- each into five equity shares of Rs. 2/- each which have been reflected at Stock exchanges w.e.f. 3rd April, 2020

(ii) Amended the Capital Clause in the Memorandum of Association of the Company.

(g) The Board of Directors of IRCON in its 268th meeting held on 5th April, 2021 had approved the proposal for issuance of 47,02,57,870 fully paid-up Bonus Shares of Rs.2/- each in the ratio of 1:1, (i.e. issue of 1 (one) equity share for every existing 1 (one) equity share with 21st May, 2021 as the Record Date for the purpose of ascertaining the eligibility of Shareholders. The Final Listing and Trading Approvals from NSE and BSE have been received on 31st May, 2021. Post Bonus, the Paid-up Share Capital of the Company is Rs.188,10,31,480 divided into 94,05,15,740 equity shares of Rs.2/- each.

ii) Nature and Purpose of Other Reserves:

(a) Retained Earnings

Retained Earnings represents the undistributed profits of the Company.

(b) General Reserve

The Company has created Capital Redemption Reserve out of the profits after Buy Back of shares on 26th December 2017.

(a) Terms and Conditions of the unsecured Loan:

The Company has raised a loan from Indian Railway Finance Corporation (âIRFCâ) of ''3200 crore as on 28^th March 2018 which in turn have been paid to Railway Land Development Authority (âRLDAâ) in terms of lease agreement. As per the Memorandum of understanding (âMOUâ entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company. The repayment of principal of the Loan Amount shall be made in 5 (five) equal instalments commencing from April 15, 2019. [Refer note 8.3 (Foot note (ii)]. Companies Acthas been complied with for such transactions and the transactions are not violative of any applicable Act.

(b) Rate of Interest;

(i) The Company will pay interest on the principal amount of the Loan advanced and outstanding from time to time, at the rate of 8.77% (Eight point seven seven percent) per annum (âApplicable Interest rateâ) (exclusive of applicable interest tax, service tax and / or any such other taxes / levies / duties). Such taxes / levies / duties, if any, applicable, shall be payable (in the same manner and time as the principal and interest) by the Borrower to the Lender over and above the rates specified above.

(ii) The Applicable Interest Rate shall be fixed for currency of loan term.

(d) Offsetting the Loan from IRFC and Recoverable from RLDA:

As per para 2.4 of the Memorandum of understanding (âMOUâ) entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company. Company has a legally enforceable right to set off the loan liability regarding IRFC and recoverable from RLDA as per MOU and have the financial arrangement to settle the loan from IRFC with the proceeds realised from RLDA simultaneously. Accordingly, as per provision of IND AS-32 amount recoverable from RLDA and loan from IRFC has been offset and the net amount presented in the balance sheet.

(e) The Company has not defaulted on any loans payable

a) Disclosures as required under Companies Act, 2013 / Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) are provided in Note 43.

b) Terms and Conditions and other balances with related parties are disclosed in Note 33.

19.2 Other Provisions:

Disclosures as per Ind AS 37 regarding nature of provisions and movements in provisions are as follows:

a) Demobilisation Provisions

The Company has made provision for demobilisation to meet the expenditure towards Demobilisation of Manpower and Plant & Equipment in respect of foreign projects.

b) Maintenance Provisions

In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover companyâs liability during defect liability period keeping into consideration the contractual obligations, obligations of the subcontractor, operating turnover and other relevant factors.

c) Legal Cases

Provision for legal cases represents liabilities that are expected to materialise in respect of matters in courts, arbitrations and appeal.

d) Provisions for Other Expenses

Provision for other expenses represents expected liabilities in respect of indirect taxes and others.

A. Fair Value Measurements(i) Category wise classification of Financial Instruments

Financial assets and financial liabilities are measured at fair value in these financial statement and are grouped into three levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3: Unobservable inputs for the asset or liability

The management assessed that cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties.The following methods and assumptions were used to estimate the fair values:

i) The fair value of investments in mutual fund units is based on the Net Asset Value (âNAVâ) as stated by the issuers of these mutual fund units in the published statements as at Balance Sheet date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

ii) Investment in subsidiaries and joint ventures are classified as equity investments have been accounted at historical cost. since these are scope out of Ind AS 109 for the purposes of measurement, the same have not been disclosed in the tables above.

* During the financial year 2021-22 and 2020-21, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements.

B. Financial Risk Management

The Companyâs principal financial liabilities comprise borrowings, trade, lease liability and other payables. The Companyâs principal financial assets include loans to related parties, trade and other receivables, and cash and shortterm deposits that derive directly from its operations. The Company also holds investment in mutual funds and tax free bonds. The Companyâs activities expose it to some of the financial risks: market risk, credit risk and liquidity risk.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises Foreign currency risk and Interest rate risk. Financial instruments affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial instruments.

(i) Foreign Currency Risk

The Company operates internationally and is exposed to insignificant foreign currency risk (since receipts & payments in foreign currency are generally matched) arising from foreign currency transactions, primarily with respect to the USD, EURO, BDT, DZD, LKR, JPY and ZAR. Significant foreign currency risk of group are naturally hedged. As of March 31,2022 and March 31,2021, every 5% increase or decrease of the respective foreign currency would impact our profit before tax by approximately ''16.98 crore and ''16.88 crore respectively.

The Companyâs significant exposure to foreign currency risk at the end of reporting period are as follows:

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of change in market interest rate. The company manages its interest risk in accordance with the companies policies and risk objective. Financial instruments affected by interest rate risk includes tax free bonds and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is fixed for the period of financial instruments. Also, the Company does not have any interest risk on loans / borrowings as it bears fixed rate of interest.

b) Credit Risk

The Companyâs customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. Accordingly, the Companyâs customer credit risk is low. The Companyâs average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank / corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation.

The Company is exposed to credit risk for guarantees given. The Companyâs maximum exposure in this respect is the maximum amount the Company may have to pay if the guarantee is called on (see Note 37). Based on expectations at the end of the reporting period, the Company considers that it is more likely that such an amount will not be payable under the arrangement.

Trade and other receivable

The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment.

During the year, the Company has recognised loss allowance of ''2.26 (31 March, 2021 : ''Nil).

c) Liquidity risk

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. The treasury department regularly monitors the position of Cash and Cash Equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and financial liabilities and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position. The Companyâs investment policy and strategy are focused on preservation of capital and supporting the Companyâs liquidity requirements. The senior Management of the Company oversees its investment strategy and achieve its investment objectives. The Company typically invests in government of India debt bonds and mutual funds. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss. The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the mutual funds are highly liquid assets which are paid out monthly and re-invested.

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk, the Companyâs policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

The BoD has recommended a final Dividend of ''0.65 per equity share on face value of ''2/- per equity share for the financial year 2021-22, subject to the approval of the shareholders at the AGM. This is in addition to Interim Dividend paid @ ''1.85 per Share on face value of ''2/- per equity share.

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants.

32 Employee Benefits

Disclosures in compliance with Ind AS 19 âEmployee Benefitsâ are as under:

(i) Defined Contribution Plans - General Description Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. April 01,2009, for all regular employees drawing pay in IDA scale irrespective of their length of service except for those employees who joined before January 01,2017 but would superannuate/resign after January 01,2017, before completing 15 years of service, in such case Employer contribution towards pension would be effective from January 01,2017 only. The scheme is managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Companyâs share of contribution amounting to ''8.93 crore (''9.02 crore) for the period from April 01,2021 to March 31, 2022 has been paid and accounted for during the period 2021-22.

(ii) Defined Benefit Plans - General Description Provident fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a separate trust (IRCON Contributory Provident Fund Trust), which invests the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The trust is approved by the Income Tax Authorities. The amount available in the fund including the returns on investment is greater than the obligation of the company. During the period, the Company has contributed ''13.43 crore (''13.14 crore) to the trust.

Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the employees of the Company as a social security measure on the termination of their employment due to superannuation, retirement, resignation, physical incapacitation or death. The scheme is managed by a separate trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of India. As at March 31, 2022 a liability of ''4.68 crore (''4.72 crore) has been booked in the books of accounts based on the actuarial valuation.

Post retirement medical facility (PRMF)

The Company had established an irrevocable trust by initial one-time contribution of ''12.00 crore during the year 200001 for providing annuity, medical and other benefits to the spouse of employees who die in harness as also the medical

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions shown above occurring at the end of the reporting period.

Sensitivities due to mortality and withdrawals are insignificant and hence ignored.

ix) Expected contribution for next annual reporting period

The expected contribution to the defined benefit plan for next annual reporting period is ''26.17 Crore.

Terms and conditions of transactions with related parties

(i) Transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.

(ii) Outstanding balances of related parties at the year-end are unsecured and settlement occurs through banking transactions. These balances other than loans and interest bearing advances are interest free.

(iii) The loans to key management personnel are on the same terms and conditions as applicable to all other employees.

Interest in Subsidiaries, Joint Ventures and Joint OperationsDisclosures in compliance with Ind AS 27 âSeparate Financial Statements" are as under:

Investment in following subsidiary companies, joint venture companies and joint operations is accounted at cost

35 Earnings Per Share

Disclosure as per Ind AS 33 âEarnings per shareâ

Basic EPS is calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

* The Board of Directors of IRCON in its 268^th meeting held on 5^th April, 2021 had approved the proposal for issuance of 47,02,57,870 fully paid-up Bonus Shares of ''2/- each in the ratio of 1:1, (i.e. issue of 1 (one) equity share for every existing 1 (one) equity share with 21^st May, 2021 as the Record Date for the purpose of ascertaining the eligibility of Shareholders. The Final Listing and Trading Approvals from NSE and BSE have been received on 31^st May, 2021. Post Bonus, the Paid-up Share Capital of the Company is ''188,10,31,480 divided into 94,05,15,740 equity shares of ''2/- each.

36 Impairment of Assets

During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, âImpairment of Assetsâ notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Nil (Nil) has been provided for.â

Provisions, Contingencies and Commitments(i) Provisions

The nature of provisions provided and movement in provisions during the year as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assetsâ are disclosed in Note 19.

(ii) Contingent Liabilities

Disclosure of Contingent Liabilities as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assetsâ are as under:

('' in crore)
	Particulars	Foot	As at	Addition	Claims settled	As at
		Note	31^st March 2021	during the	/ Paid during	31^st March 2022
				year	the year
a)	Claims against the Company not acknowledged as debts : Disputed Direct tax demands (i) in respect of the Company Disputed Indirect tax demands	1	308.06	22.77	(131.80)	199.03
	(i) in respect of the Company	2	256.59	10.59	(3.52)	263.66
	(ii) in respect of the Joint	3	4.25	-	(0.92)	3.33
	Operations Legal Cases (i) in respect of the Company	4	474.72	137.00	(74.41)	537.31
	(ii) in respect of the Joint	5	0.02	-	-	0.02
	Operations Claims by Employees	6	-	-	-	.
b)	Guarantees (excluding financial guarantees) issued by the company on behalf of Subsidiaries Companies	7 (i) (ii)	337.92	1,067.41	(326.27)	1,079.06
c)	Other money for which company is contingent liable Liquidated damages pending disposal of application for extension of time by clients		9.27	-	-	9.27
	Total		1,390.83	1,237.77	(536.92)	2,091.68

Foot Note:

1 The Income Tax Authority have raised demands on account of various disallowances pertaining to different assessment years. Many of these matters were adjudicated in favour of Company but are disputed before higher authorities by the concerned departments. The Company is contesting these demands, which are pending at various appellate levels. Based on the advice from the independent tax experts and the developments on the appeals, the management is confident that additional tax so demanded will not be sustained on completion of the appellate proceedings and accordingly, pending the decision by the appellate authorities, no provision has been made in these financial statements.

2 There are various disputes pending with authorities of excise, customs, service tax, sales tax, VAT etc. The Company is contesting these demands raised by concerned authorities and are pending at various appellate authorities. Based on the grounds of appeal and advice of the independent legel experts, the management believes that there is reasonable strong likelihood of succeeding before the various authorities. Pending the final decisions on the above, no adjustment has been made in these financial statements. The above disputed indirect tax demands includes '' 176.60 crore which is reimbursable from clients.

3 In case of International Metro Civil Contractor, a Joint Operation of the Company, there is disputed demand pending with the sales tax authorities amounting to ''3.33 crore (''4.25 crore) on account of disallowance of labour expenses. The joint operation had filed appeals before the appropriate appellate authorities against the demand. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

4 The Company is a party to several legal suits on construction contract terms related disputes, pending before various courts and arbitration proceedings in India and aboard. Some of the contractors have lodged claims on the company seeking enhancement of the contract price, revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. These claims are being contested by the company as being not admissible in terms of provisions of the respected contracts. Against a total claim of ''638.79 crore (''557.26 crore), provision of ''101.48 crore (''82.54 crore) has been made and balance ''537.31 crore (''474.72 crore) is shown as contingent liability. The Company has also made counter claims on the contractors admissible as per the terms of the contract of ''238.82 crore (''134.94 crore). Interest on claims is not considered, being unascertainable.

5 One of the contractor, M/s Sai Engineers has filed suit against International Metro Civil Contractor for an amount of ''0.02 crore (''0.02 crore) for dispute on contract terms. The decision is pending before the appellate authorities and therefore, no provision has been made in the financial statements.

6 There are some cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

7 (i) The Company has given letter of comfort on behalf of its subsidiary company, Ircon Infrastructure and Services

Limited for an amount of ''11.39 crore (''11.65 crore) for performance guarantee submitted to client.

(ii) The Company has given corporate guarantee to Indian Overseas Bank, Bank of Baroda and State Bank of India on behalf of and in respect of term loan facility for its subsidiary companies for an amount of ''1534.80 crore (''1536.56 crore). The term loan availed (net of repayment) by the subsidiary companies as on 31.03.2022 is ''1056.02 crore (''326.27 crore).

(iii) Contingent Assets

Disclosure of Contingent Assets as per Ind AS 37 âProvisions, Contingent Liabilities and Contingent Assetsâ is as under:

a) Claims raised by company on some of its clients and awarded by arbitrators in favour of company against which clients have gone to court not accounted for as receivables are ''425.76 crore (''395.43 crore) including interest calculated up to 31.03.2022 as per arbitration award.

b) Counter Claims raised by company on sub-contractors and awarded by arbitrators in favour of company against which sub-contractors have gone to court, not accounted for as receivables are ''25.42 crore (''24.12 crore).

c) Insurance Claim of USD 0.91 (USD 0.89 Mn) and Ethiopian Birr 1.22 Mn (Birr 1.16 Mn) equivalent to ''7.05

crore (''6.74 crore) including interest calculated upto 31.03.2022 awarded by Honourable Supreme Court of Ethiopia in favour of company has not been accounted for, pending execution order by High Court of Ethiopia.

4 Companyâs Non Fund based limits earmarked for issuance of bank guarantee to subsidiary companies amounts to ''488.61 crore (''488.35 crore). Out of the said limit, bank guarantees to the extent of ''230.33 crore (''92.28 crore) has been utilised as on 31.03.2022.Therefore, the balance limit for issuance of bank guarantee is ''258.28 crore (''396.07 crore).

5 The Company has given corporate guarantee to Indian Overseas Bank, Bank of Baroda and State Bank of India on

behalf of and in respect of term loan facility for its subsidiary companies for an amount of ''1534.80 crore (''1536.56 crore). The subsidiary companies have availed term loan of ''1090.50 crore (''326.27 crore) till 31.03.2022. During the year, the subsidiary companies have repaid an amount of ''34.48 crore (Nil) against these term loans and the term loan balance as on 31.03.2022 is ''1056.02 crore (''326.27 crore).

6 The Company along with SECL (Sponsors) have executed Sponsorâs Support Agreement on behalf of its Joint

Venture, Chhattisgarh East West Railway Ltd. (CEWRL), wherein it has been stated that in case of termination

of the Concession Agreement due to an event of default by the Borrower prior to the achievement of the Commercial Operation Date the Sponsors shall meet any shortfall in the Debt Service obligations of the Borrower, to the satisfaction of the Lenders, without recourse to the Borrower and/or the Project. IRCONâs share as per the given amount of Rupee Term Loan is ''1033.76 (26% of total loan of ''3976 Crore) as on 31^st March 2022 (31^st March, 2021: ''1033.76 Crore).

7 The Company has committed to grant loan (Unsecured interest free/ Unsecured interest-bearing) upto an aggregate amount of ''500 crore at any time to Special Purpose Vehicles (SPVs) formed as wholly owned subsidiary (WOS) companies in India for executing road/ highway project of NHAI, in addition to limits already approved BoD.

38 Segment Reporting

Disclosure as per Ind AS 108 âOperating Segmentâ is given as under:

A. General information

(i) Trade receivables are non-interest bearing and the customer profile include Ministry of Railways, Public Sector Enterprises, State Owned Companies in India and abroad. The Companyâs average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days.

(ii) Contract Assets are recognised over the period in which services are performed to represent the Companyâs right to consideration in exchange for goods or services transferred to the customer. It includes balances due from customers under construction contracts that arise when the Company receives payments from customers as per terms of the contracts however the revenue is recognised over the period under input method. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone.

For the year 2021-22 and 2020-21 - There has been a net increase of ''134.78 crore and ''88.23 crore respectively as compared to previous year mainly due to recognition of Revenue based on input method whereas bills for work done are certified based on contract condition. During the year ended March 31^st, 2022, ''272.11 crore and March 31^st 2021, ''408.39 crore of contract assets as of April 1^st, 2021 and April 1^st 2020 respectively has been reclassified to trade receivables upon billing to customers on completion of milestones.

(iii) Contract liabilities relating to construction contracts are balances due to customers, these arise when a particular milestone payment exceeds the revenue recognised to date under the input method and advance received in long term construction contracts. The amount of Advance received gets adjusted over the construction period as and when invoicing is made to the customer.

40 Leases

a) Company as a Lessee

The Company as a lessee has entered into various lease contracts, which includes lease of land, office space, guest house and vehicles. The Company also has certain leases of offices and guest house with lease terms of 12 months or less. The Company applies the âshort-term leaseâ recognition exemptions for these leases.

Right of Use Assets

The carrying amounts of right-of-use assets recognised and the movements during the year are disclosed in Note 7.

45 Covid -19 Disclosure

The Company has considered the possible effects that may result from Covid-19 in the preparation of its financial results including the recoverability of carrying amounts of financial and non-financial assets. ln developing the assumptions relating to the possible future uncertainties in the global economic conditions because of Covid-19, the Company has used internal and external sources of information and expects that the carrying amount of the assets will be recovered. The actual impact of this global health pandemic may be different from that which has been estimated, as the Covid-19 situation evolves in India and globally. However, the Company will continue to closely monitor any material changes to future economic conditions.

Comments:-

(i) The movement is primarily on account of incremental income generated via Contract Revenue and dividend from JVs. etc.

(ii) The movement is only on account of increase in working capital.

(iii) Average inventory has decreased in comparison to previous year.

(iv) The movement is on account of increase in revenue from operation.

(v) The movement is on account of increase in dividend from JVs.

(vi) Investment in Bonds, Mutual funds and Joints Ventures has been considered for Ratio calculation.

(vii) Increase in operating expenditures due to corresponding increase in operating revenue.

(viii) The ratio is not applicable due to offsetting of loan from Indian Railway Finance Corporation with amount recoverable from Rail Land Development Authority. Only minor impact of lease liability considered.

(ix) Cost of goods sold includes project expenditures.

(b) The Company do not have any transactions with companies struck off.

period.

(d) The Company have not traded or invested in crypto currency or virtual currency during the financial year.

(e) The Company have not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign

entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(f) The Company have not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(g) The Company does not have any transaction which is not recorded in the books of accounts that has been subsequently surrendered or disclosed as income during the year as part of the on going tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(h) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(i) The Company has not been declared as wilful defaulter by any bank or financial institution or government or any government authority.

(j) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

47 Disclosure as required by Ind AS 8 âAccounting Policies, Changes in Accounting Estimates and Errors

During the year the Company has changed the accounting policy related to âDividendâ. There is no impact on the profitability of the Company, and the revised accounting policy is as below and amendments are highlighted in Bold. Dividend

Annual Dividend distribution to the Companyâs equity shareholders is recognized as liability in the period in which dividend is approved by the shareholders. Any interim dividend is recognized as liability on approval by the Board of Directors. Dividend payable and corresponding tax on dividend distribution if any, is recognized directly in equity.

48 Recent pronouncement

Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below. Ind AS 16 - Property Plant and equipment - The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2022. The Company has evaluated the amendment and the impact is not expected to be material.

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets - The amendment specifies that the âcost of fulfillingâ a contract comprises the âcosts that relate directly to the contractâ. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after April 1,2022, although early adoption is permitted. The Company has evaluated the amendment and the impact is not expected to be material.

Ind AS 109 - Financial Instruments - 10 per cent test for derecognition of financial liabilities. The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the otherâs behalf. The Company has evaluated the amendment and the impact is not expected to be material.

49 Other disclosures

a) The company has been claiming deduction under section 80 IA from AY 2000-01 to AY 2019-20. The deduction under section 80 IA has been allowed by Income Tax appellate Tribunal (ITAT) upto AY 2013-14. However, Income Tax Department has filled appeal before High Court against order of ITAT for the AY 2000-01. Upto AY 2019-20 company was offering global income for tax in India after excluding the income in accordance with DTAA agreements where income earned from foreign countries are excluded from global income offered for taxation. The company was allowed exclusion method upto AY 2005-06, thereafter credit against taxes paid in foreign countries have been allowed from taxes computed on global income by department. After paying the due tax the issue has been contested by filing appeals. This issue has been allowed in favour of Ircon by ITAT upto AY 2013-14.

b) There are certain other matters pending in litigations against the Company before various courts and appellate authorities on account of claims by some contractors in cost plus projects. In such cases, the Company envisages reimbursement from the Clients in full as per the terms of contract and expects no economic outflow of resources. In this respect, a total claim of ''1432.67 crore (''2134.49 crore) is under litigation, for which provision of ''3.93 crore (''6.19 crore) has been made and reimbursed by the client. The Company has also made counter claims on the contractors of ''615.65 crore (''1048.42 crore). Interest on claims is not considered, being unascertainable.

c) Honâble High Court has permitted to release an arbitration award, amounting to ''97.96 Crore against NHAI for UP-05, Orai Highway Project against submission of bank guarantee of equivalent amount. The company has provided liability of equivalent amount till final decision of the Court.

d) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters were sent to the parties. Balances of some of the Trade Receivables, Other Assets, Trade and Other Payables are subject to confirmations/reconciliations and consequential adjustment, if any. Reconciliations are carried out on on-going basis. However, management does not expect to have any material financial impact of such pending confirmations / reconciliations.

e) Certain reclassifications and recasting have been made to the comparative periodâs financial statements to enhance comparability with the current yearâs financial statements. These reclassifications have no effect on the reported results of operations.

f) Previous year figures are shown under bracket () to differentiate from current year figures.

g) In the opinion of the management, the value of assets, other than property, plant and equipment and noncurrent investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

Mar 31, 2018

1. Corporate Information

Ircon International Limited is a public sector construction company domiciled in India (CIN :U45203DL1976GOI008171) and is incorporated under the provisions of the Companies Act applicable in India with specialization in execution of Railway projects on turnkey basis and otherwise. After commencing business as a railway construction company it diversified progressively to roads, buildings, electrical substation and distribution, airport construction, commercial complexes, as well as metro rail works. The Company caters to both domestic and international markets. The Company is an ISO certified Company for Quality, Environment and Occupational Health and Safety Management systems; a Schedule âAâ public sector company and a Mini Ratna-Category I. The registered office of the company is located at C-4, District Centre, Saket, New Delhi- 110017.

i) Includes lease hold building on Railways land for 30 years lease (Gross value Rs. 5.30 crore) for which agreement is yet to be finalised.

ii) Lease hold land includes land at Greater Noida Industrial Development Authority (GNIDA) for construction of proposed Central Inspection Cell (CIC) by the Company (Gross value Rs.0.82 crore). The request for time extension for construction of Building has been submitted to the appropriate authority.

iii) Furniture & Fixtures includes Furnishings also.

ivi Depreciation and impairment : Includes Foreign Exchange Loss as on 31^st March 2018 for Rs. 15.36 crore (as on 31^st March 2017 : Rs. 0.47 crore).

Description of valuation techniques used by valuer:

Cost Approach:

Under this approach, market value of the land has been estimated using Direct Comparison Approach (Market Approach). The building value has been estimated used Depreciated Replacement Cost (as if new). Within the Cost Approach, the land value is being estimated on the assumption that it is vacant and free of all encumbrances. It is added to the cost of the improvements derived by using the depreciated Replacement Cost method. Replacement cost implies âThe current cost of replacement of an asset with a similar utility as if new.â Building costs would include the cost of the building components and other improvements. Appropriate depreciation is being applied to the same to estimate the value.

Income Approach (DCF):

DCF analysis is the process of valuing an investment property or asset by undertaking an estimation of future cash flows and taking into account the time value of money. Under this technique, the income is projected over the investment cycle and the net income is calculated after the deduction of capital, operating, and other necessary expenses.

Foot Note (i) :

(a) Out of 6,38,70,000 equity shares of ISTPL held by the company, 30 % shares (1,91,61,000 numbers) were pledged with Punjab National Bank against the loan drawn by ISTPL outstanding as on 31.03.2018 is Rs. Nil (as on 31.03.2017 Rs. 126.78 crores).

(b) As per Articles of Association (Article V) of ISTPL, shareholders can transfer their shareholding subject to Concession Agreement dated 28^th September 2005 signed with NHAI which provides for equity holding of not less than 51% by Consortium members in ISTPL during the construction period and three years following Commercial Operation Date, which was achieved on 19.04.2010. Thereafter, the aforesaid shareholding can be diluted to 26% subject to the pre-emption right of the other shareholders.

(c ) Includes fair value of the financial guarantee for Rs. 0.28 crore issued by Ircon to Punjab National Bank on behalf of and in respect of term loan facility availed by ISTPL. Loan outstanding as on 31.03.2018 is Nil.

# IRSDC - Indian Railway Stations Development Corporation Limited, a Subsidiary with equity participation of 51% from IRCON : Ministry of Railways vide letter dated 10.04.2017 has decided to transfer 1% equity to RLDA from IRCON, thereby revising the ownership and noncontrolling interest to 50:50. The composition of IRSDC was converted to Joint venture with 1% share transferred by Ircon to RLDA at a value of Rs. 0.40 crore.

Foot Note :-

(i) Includes FDRs under Lien for Rs. 0.41 crore (Rs. 0.41 crore)

(ii) Fixed Deposits received from Contractors are realisable, if the contractor fails to fulfil its obligations as per the terms and conditions of the contract agreement.

(iii) (a) The Company has raised a loan from Indian Railway Finance Corporation (âIRFCâ) (Refer note 15.1) which in turn have been paid to Railway Land Development Authority (âRLDAâ) in terms of lease agreement. As per the Memorandum of understanding (âMOUâ) entered between RLDA and the Company, all instalments of principal and interest, as also any default or additional interest, and other costs, expenses and charges associated with the loan (or otherwise payable under or pursuant to the Loan Agreement), shall be paid by RLDA to the Company, at least five (5) days prior to their respective due date under the Loan Agreement, into such account as maybe designated by IRFC. RLDA and Ministry of Railways (âMoRâ) shall mutually enter into appropriate arrangements for corresponding disbursement of funds from MoR to RLDA. The terms and conditions of this recoverable amount is same as in the case of the said loan.

Further under MOU, RLDA has transferred the leasehold rights in the Project site at Bandra East in favour of the Company, together with the rights to undertake commercial development thereon. The Company shall be entitled to appoint appropriate developer(s) through open, competitive and transparent bid process for the purposes of undertaking the commercial development of the Project Site, and for the purposes thereof further sub-lease the Project Site (together with all associated Development Rights) to the developers so identified by the Company.

(b) Includes advance paid to RLDA for an amount of Rs.15 crore as per Memorandum of Understanding (MOU) dated 3 ^d August 2017 for redevelopment of Safdarjung Railway Station.

Foot Notes : -

(i) Includes Clients Fund of Rs. 2,884.78 crore (Rs. 3,141.33 crore) on which interest is passed on to them.

(ii) Fixed Deposits received from Contractors are realisable, if the contractor fails to fulfil its obligations as per the terms and conditions of the contract agreement.

(iii) Includes Rs. 593.55 crore earmarked for expenses for project site at Bandra (East).

Debts due by officers of the company, firms in which any director is a partner or private company in which any director is a member except JVs and Subsidiaries are Rs. Nil (Rs. Nil).

(a) Includes Value of work amounting to Rs. 7.99 crore (Rs. 1.61 crore) certified by client, but not billed by reporting date.

(b) Includes Rs. 8.50 crore (Rs. 2.48 crore) from Chhattisgarh East Railway Limited, a Joint Venture Company.

Terms / Rights attached to Equity Shares :

(a) Voting

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share.

(b) Liquidation

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 the shareholders.

(i) Increase in Authorised Share Capital to Rs. 400 crore was approved in the Extra Ordinary General Meeting held on 22.05.2017

(ii) Department of Investment and Public Asset Management (DIPAM) had instructed the Company to buy back shares to the extent of 5% of paid up capital. Total shares proposed to be bought back was 49,41,818 in numbers at book value of these shares. Board of Directors at its 236^th meeting dated 21.09.2017 approved proposal to buy back by the company of its fully paid up equity shares of Rs. 10 each not exceeding 49,41,818 shares from the existing shareholders. As on the closing date of submission of offer i.e. 04.12.2017 offer for 49,28,426 shares held by Govt. of India was received.

Notes :

(a) Terms and Conditions of the unsecured Loan :

The repayment of principal of the Loan Amount shall be made in 5 (five) equal instalments commencing from April 15, 2019.

(b) Rate of Interest :

(i) The Company will pay interest on the principal amount of the Loan advanced and outstanding from time to time, at the rate of 8.77% (Eight point seven seven percent) per annum (âApplicable Interest rateâ) (exclusive of applicable interest tax, service tax and / or any such other taxes / levies / duties). such taxes / levies / duties, if any, applicable, shall be payable (in the same manner and time as the principal and interest) by the Borrower to the Lender over and above the rates specified above.

(ii) The Applicable Interest Rate shall be fixed for currency of loan term.

Upon the occurrence of certain identified events the MOU would stand terminated, whereupon Ircon would be substituted by such entity as agreed to between IRFC, Ircon, RLDA & Ministry of Railways (MoR). MoR would the entitled to pre pay the entire outstanding under the Loan Agreement on termination of this agreement.

(ii) Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical financial instruments that the entity can access at measurement date.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

The following table presents the fair value measurement hierarchy of financial assets and liabilities measured at fair value on recurring basis and at amortised cost (ii) (a) Assets and liabilities which are measured at amortized cost for which fair values are disclosed.

i) The carrying amounts of current trade receivables, trade payables, security deposits and retention money, cash and cash equivalents, bank balances and other financial assets and liabilities are considered to be the same at their fair values, due to their short term nature.

ii) The fair value of long term security deposits, retention money and long term trade payables were calculated based on cash flows discounted using current market rate. They are classified as level 3 fair values hierarchy due to inclusion of unobservable inputs.

iii) Investment in unquoted equity of subsidiaries and joint ventures are stated at carrying value as per Indian GAAP as on 31-3-2015 as per exemption provided by Para 10 of IND AS 27.

iv) Loans and Advances given to related parties are at market rate, therefore the carrying amount of such loans and advances are equal to their fair value.

v) Financial assets are recognised at transaction price, as the effect of measuring these at fair value is immaterial.

(iii) Financial risk management

The Companyâs principal financial liabilities comprise borrowings, trade and other payables. The Companyâs principal financial assets include loans to related parties, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also holds investment in mutual funds and tax free bonds. The Companyâs activities expose it to some of the financial risks: market risk, credit risk and liquidity risk.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market prices. Market risk comprises Foreign Currency Risk and Interest rate risk. Financial instruments affected by market risk includes borrowings, trade receivables, trade payable and other non derivative financial instruments.

(i) Foreign Currency Risk

The company operates internationally and is exposed to insignificant foreign currency risk (since receipts & payments in foreign currency are generally matched) arising from foreign currency transactions, primarily with respect to the US $, EURO, YEN, BDT, DZD, LKR, MZN, BTN, ZAR, NPR amd MYR. Significant foreign currency risk of company are naturally hedged.As of March 31, 2018 and March 31, 2017, every 1% increase or decrease of the respective foreign currency would impact our profit before tax by approximately Rs. 0.70 crore and Rs. 2.63 crore respectively.

ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of change in market interest rate. The company manages its interest risk in accordance with the companies policies and risk objective. Financial instruments affected by interest rate risk includes tax free bonds and deposits with banks. Interest rate risk on these financial instruments are very low as interest rate is fixed for the period of financial instruments. Also, the Company does not have any interest risk on loans / borrowings as it bears fixed rate of interest.

b) Credit risk

The Groupâs customer profile include Ministry of Railways, public sector enterprises, state owned companies in India and abroad. Accordingly, the Groupâs customer credit risk is low. The Groupâs average project execution cycle is around 24 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period ranging from 45 to 60 days and certain retention money to be released at the end of the project. In some cases retentions are substituted with bank / corporate guarantees. The Group has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation.

Trade and other receivables

c) Liquidity risk

The Companyâs investment policy and strategy are focused on preservation of capital and supporting the Companyâs liquidity requirements. The senior Management of the Company oversees its investment strategy and achieve its investment objectives. The Company typically invests in government of India debt bonds and mutual funds. The policy requires investments generally to be investment grade, with the primary objective of minimising the potential risk of principal loss.

The NHAI bonds bear a fixed rate of interest thus they are not affected by the change in bond yield rates and the mutual funds are highly liquid assets which are paid out monthly and re-invested.

d) Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry.

(iv) Capital Management

Further, the Company manages its capital structure to make adjustments in light of changes in economic conditions and the requirements of the financial covenants. During the year, the Company has gone for buy back of 4,928,426 shares held by the Government of India through Ministry of Railways.

Loan raised by the Company from IRFC during the year which in turn has been given to RLDA will be repaid from the amount received from RLDA.

2. Contingent liabilities and Contingent Assets

(I) Contingent Liabilities:

(a) Claims against the company not acknowledge as debt;

i. Rs. 421.08 crore (Rs.418.82 crore) net of provision of Rs. 69.38 crore (Rs.56.44 crore). Against this the Company has counter claims of Rs. 258.41 crore (Rs. 278.24 crore). Interest on claims is not considered, being unascertainable.

ii. There are some cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

iii. Rs. 292.35 crore (Rs.136.52 crore) relating to Direct tax which includes Rs. 197.23 crore (Rs.64.95 crore) on account of appeal filed by Income tax department before Income Tax appellate tribunal (ITAT) & High Court against order passed by Commissioner of Income Tax (Appeals) & ITAT in favour of company.

iv. Indirect tax disputed demands under appeal Rs. 327.43 crore (Rs.266.27 crore) of which Rs. 110.44 crore (Nil) has been reimbursed by the client and Rs. 43.89 crore (Rs. 61.35 crore) are reimbursable from the clients.

(b) Guarantees excluding financial guarantee

In respect of Joint arrangements:

i. Sales-tax liability of International Metro Civil Contractor of Rs. 4.25 crore (Rs. 4.25 crore) and Service Tax Rs. 1.01 crore (Rs. 1.01 crore).

ii. Bank guarantee in case of Ircon-RCS-PFLEIDERER of Rs. 1.40 crore (Rs. 1.40 crore).

iii. Income Tax liability in the case of Metro Tunnelling Group of Rs. 0.01 crore (Rs.0.96 crore). Regular assessment for FY 2010-11, 2012-13 & 2013-14 has resulted in a demand of Rs. 0.24 crore as on 31.03.2018. The JV is disputing the assessment and has filed appeals against the orders

iv. Recovery suit against the International Metro Civil Contractor by M/s Sai Engineers is Rs. 0.02 crore (Rs. 0.02 crore).

v. Bank Guarantee in case of Ircon-Afcon JV for Rs. 14.28 crore (Rs. 25.72 crore) for Bhairab Railway Bridge Project, Bangladesh.

c) Other money for which company is contingent liable

(II) Contingent Assets:

i) Claims raised by Ircon on some of its clients and awarded by arbitrators in favour of Ircon against which clients have gone to court not accounted for as receivables are Rs. 178.79 crore (Rs. 179.06 crore) including interest calculated up to 31.03.2018 as per arbitration award.

ii) Counter Claims raised by Ircon on sub-contractors and awarded by arbitrators in favour of Ircon against which sub-contractors have gone to court, not accounted for as receivables are Rs. 13.80 crore (Rs. 8.92 crore).

iii) Insurance Claim of USD 0.84 Mn (USD 0.82 Mn) and Ethiopian Birr 1.0 Mn (ETB 0.95 Mn) equivalent to Rs. 5.66 crore (Rs. 5.50 crore) including interest calculated upto 31.03.2018 awarded by Honourable Supreme Court of Ethiopia in favour of Ircon has not been accounted for, pending execution order by High Court of Ethiopia.

3. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) is Rs. 85.91 crore (Rs.76.68 crore).

b) Other Commitments:

Commitments for fund/providing guarantee to/on behalf of subsidiaries/ joint arrangements:

i) Counter guarantee to Indian Overseas Bank & ICICI Bank for issuance of bank guarantee to subsidiary companies amounting to Rs. 150.00 crore (Rs. 150.00 crore). Out of the total limit of Rs. 150 crore, Indian Overseas Bank & ICICI Bank have issued bank guarantees to the extent of Rs. 104.39 crore (Rs. 41.52 crore). Therefore, the balance limit for issuance of bank guarantees is Rs. 45.61 crore (Rs.108.48 crore).

ii) For subscribing towards balance share of equity of Rs. 293.82 crore (Rs. 54.06 crore) to subsidiary and joint venture company.

iii) For release of balance shareholderâs loan of Rs. 979.44 crore (Rs. 883.46 crore) to subsidiary companies.

iv) Counter guarantee to State bank of India for issuance of letter of credit to Joint operation, Ircon Afcons JV, amounting to Rs. 30.93 crore (Rs. 2.26 crore).

v) An undertaking to Punjab National Bank for non-disposal of 21% of present holding of the company (1,34,12,700 shares of Rs. 10 each) in Joint Venture Company, Ircon-Soma Tollway Private Limited, amounting to Rs. Nil (Rs. 13.41 crore).

4 . There are certain claims against the Company not acknowledged as debt Rs. 1,098.26 crore (Rs. 860.98 crore) net of provisions of Rs. 1.13 crore (Rs. 1.13 crore). In case, such claims against the Company do materialize, it will be reimbursable from the clients. Against this, the company has counter claims of Rs. 1,062.59 crore (Rs. 950.94 crore).

Interest on claims not considered, being unascertainable but would also be reimbursable.

5. The Company is liable to pay Rs.0.04 crore (Rs.0.70 crore) on account of taxes on construction profits of Sri Lanka projects which shall be directly reimbursed by Sri Lankan Railway to Sri Lankan Inland Revenue Department. Therefore, the same has not been provided in the books of accounts.

6. (a) The company has made a provision for tax without considering the deduction under section 80IA of Income Tax Act 1961. For the period commencing from AY 2000-01 to 2017-18, deduction u/s 80-IA was allowed to company by CIT (A) for six different years (AY 2004-05, 2005-06, 2007-08, 2012-13, 2013-14 and 2014-15) and for AY 20002001 it was allowed by ITAT. For these seven years provision has not been written back. Company has decided to carry this provision having conservative approach considering appeals filed by department against company for these years.

b) The company is offering global income for tax in India after excluding the income in accordance with DTAA agreements where income earned from foreign country are excluded from global income offered for taxation. The company was allowed exclusion method upto AY 2005-06, thereafter credit against taxes paid in foreign countries have been allowed from taxes computed on global income by department. After paying the due tax the issue has been contested by filing appeals which are pending for disposal before ITAT.

7. (a) The Company had 25% equity stake in Comphanhia Dos Caminhos De Ferro Da Beira SARL Mozambique (CCFB), a Joint Venture Company incorporated as per Mozambican laws in the year 2004 to execute a railway project awarded by the Government of Mozambique (GOM) on BOT basis and had paid USD 1.25 Mn (Rs. 5.53 Crores). Other shareholders were RITES & CFM, Mozambique with 26% & 49% share respectively.

(b) On 8^th December 2011, Government of Mozambique (GoM) unilaterally terminated the concession agreement and took over the project which in the opinion of company was unlawful and against the provision of agreement. Consequently, CCFB initiated arbitration against the said decision of GoM. Dispute has now been amicably settled with Government of Mozambique on 21^st October 2015 through settlement agreement. As per the settlement agreement, IRCON will get in installments an amount of USD 40.31 Million and out of this 23.525 USD (equivalent to INR 158.98 crore) was received up to 31.03.2017 and third installment of Rs 5.595 Mn ( equivalent to INR 36.40 crore) has received in October 2017. Balance two installments of USD 5.595 Mn each are due on 18.10.2018 & 18.10.2019 which will be received through the confirmed Letter of Credit opened by Government of Mozambique.

8. (a) Some of the balances shown under debtors, advances and creditors are subject to confirmation / reconciliation/ adjustment, if any. The company has been sending letters for confirmation to parties. However, the Company does not expect any material dispute w.r.t. the recoverability/payment of the same.

(b) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.

The unhedged foreign currency exposures are naturally hedged.

DZD- Algerian Dinar, ZAR-South African Rand, LKR-Sri Lankan Rupee, ETB-Ethiopian Birr, MYR-Malaysian Ringgit, NPR-Nepalese Rupee, MZN-Mozambican Metical, BTN-Bhutanese Ngultrum, BDT-Bangladeshi Taka, AUD-Australian Dollar, JPY-Japanese Yen

9.Disclosure regarding Leases:

I. Assets taken on operating lease:

The Companyâs leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guesthouses and transit camps. Most of the leasing arrangements are cancellable and are usually renewable on mutually agreed terms. The amounts of lease payments during the year are as under:

(a) Lease payments (net of recoveries) in respect of premises for residential use of employees -Rs. 3.55 crore (Rs.3.73 crore) (included in salaries and wages note 23).

(b) Lease payments in respect of office premises, guesthouses and transit camps - Rs. 6.41 crore (Rs. 6.29 crore) (included in operating & administrative expenses note 22.).

II. Assets given on operating lease:

(a) The Company has given certain commercial/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements.

(b) The Company has also provided Plant & Machinery (Locomotives) on wet lease basis to a foreign client till 31.12.2015.

1. Lease rent in respect of non-residential premises - Rs.7.89 crore (Rs. 8.01 crore) (included in miscellaneous income note 21.)

2. Lease rent in respect of locomotives - Rs. Nil (Rs.0.88 crore) (included in loco lease note 20)

(d) Future minimum lease rental receivable as on 31.03.2018 in respect of non - cancellable operating lease for each of the following period is as under:

10.Segment Reporting:

A. General Information:

(i) The Company has determined reportable operating segments from geographical perspective.

(ii) The Companyâs source of risk and rewards are derived from the units spread across the globe and hence, International projects and Domestic projects are considered as individual operating segments.

(iii) The operating segments have been reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM).

(iv) These operating segments are monitored by companyâs Chief Operating Decision Maker (CODM) and strategic decisions are made on the basis of segments results. Segment performance is evaluated based on the profit of each segment.

D. Information about major Customers:

During the period ended March 31, 2018, Operating Revenue of approximately 50.90 % (38.70%) derived from a single external customer in Domestic Segment.

11.Interest in other Entities

A- Disclosure in respect of Joint arrangements

(a) Unincorporated Joint operations:

i) For projects in operation:

ii) For projects which have been completed:

* PPE figures include capital work in progress, wherever applicable.

** IRSDC has became joint venture company w.e.f 19.09.2017, hence, share of income, expenses, assets and liabilities have been considered proportionately.

$ Net of PPE.

(d) Contingent Liabilities of the Joint arrangements are disclosed in note 29 (b).

12.Related Party disclosures: Related party to be identified as per IND AS

a) Enterprises where control exists:

(i) Subsidiary Companies: -

- Ircon Infrastructure and Services Limited. (IISL)

- IrconPB Tollway Limited. (IPBTL)

- IrconShivpuriGuna Tollway Limited (ISGTL)

- Devangare Haveri Highway Limited (IDHHL)

- Indian Railway Station Development Corporation Limited till September 18, 2017

(ii) Joint arrangements: -

- Unincorporated Joint operations - As per Note no. 39 (a) above

- Joint Venture Companies - As per Note no. 39 (b) above.

b) Key management personnel:

(i) Whole time Directors: -S/Shri S.K. Chaudhary, M.K.Singh, Deepak Sabhlok and Hitesh Khanna till March 28, 2018.

(ii) Directors (Official Government nominated): - S/Shri Rajiv Chaudhary, S/Shri S.C. Jain w.e.f. 3^rdJanuary, 2017 to 17^thNovember, 2017, S/Shri Ved Pal w.e.f. 22^nd November, 2017.

(iii) Independent Directors: - S/Shri Avineesh Matta, Ms. Vasudha V. Kamat, Dr. C.B Venkataramana w.e.f 29^th Sept 2017, Dr. Narendra Singh Raina, w.e.f 17^th Oct 2017, and Sh. Ashok Kumar Ganju w.e.f. March 8, 2018 and S/Shri Sanjay Kumar Singh till 02^nd July 2018

Company Secretary: - Smt. Sumita Sharma till 27^thOctober, 2017

Smt. Iti Matta w.e.f.1^st November, 2017 to 4^th January, 2018

Smt. Ritu Arora w.e.f 4^th January, 2018

D) Transaction with the Related Government entities

Apart from transactions reported above, the company has transactions with related Government entities which includes but not limited to the following:

Name of Government: Ministry of Railways, Government of India (Significant control over company)

Outstanding loan to Shri M K Singh as on 31.03.2018 is Rs.1.16 Lakh (Rs. 1.64 Lakh ).

*Figures of FY 2017-18 include PRP of Rs. 0.13 crore paid during the year for the FY 2015-16.

Recovery as applicable has been made from Directors who have been provided with Company accommodation and car.

13. During the year, Company has carried out assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realizable value and carrying cost in terms of Ind AS 36, âImpairment of Assetsâ notified under section 133 of the companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian accounting standards) Amendment Rules 2016. Accordingly, impairment loss of Rs. Nil (Rs. 1.26 crore) has been provided for.â

14. Disclosure under Ind AS-19 on Employee benefits Provident Fund

The Company pays fixed contribution of Provident Fund at a pre-determined rate to a Separate trust, which invests the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The amount available in the fund including the returns on investment is greater than the obligation of the company. During the year, the Company has contributed Rs. 11.81 crore (Rs.10.84 crore) to the trust.

Gratuity

The Company has implemented IRCON Employees Group Gratuity Scheme to provide financial assistance to the employees of the Company as a social security measure on the termination of their employment due to superannuation, retirement, resignation, physical incapacitation or death. The scheme is managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Funds of the Trust are managed by LIC of India. As at 31.03.2018, a liability of Rs. 14.34 crore has been booked in the books of accounts based on the actuarial valuation.

Pension

The Company has implemented IRCON Defined Contribution Superannuation Pension Scheme, 2009 i.e. 01.04.2009, for all regular employees drawing pay in IDA scale who would complete 15 years of service in the Company (including service in other CPSEs) upto normal retirement date. The scheme is managed by a Separate Trust formed in the year 2015-16 for this purpose and approved by the Income Tax Authorities. Companyâs share of contribution amounting to Rs. 6.32 crore for the period from 01.04.2017 to 28.02.2018 has been paid and accounted for during the year 2017-18.Liability for the month of March 2018 of Rs. 0.77 crore (Rs.0.51 crore) has been provided in the books of accounts.

Post-Retirement Medical Facility (PRMF)

The Company had established an irrevocable trust by initial one-time contribution of Rs. 12 crore during the year 2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as also the medical benefits to the employees (and spouse) who superannuate from the Company. This being a voluntary welfare measure, the Company is not liable for providing such benefits to its employees. However, Company has also kept provision of Rs. 12.81 crore (Rs.8.32 crore), based on the decision of management.

Leave Encashment

The liability towards encashment of leave as per rules of the Company is recognised on the basis of actuarial valuation except for employees posted in foreign projects. Since, the foreign assignments are treated as dies - non, liability for those employees is provided in the books on accrual basis as the amount is payable to employee on repatriation.

Leave Travel Concession (LTC)

The company has made a provision in respect of leave travel concession (LTC) on the basis of actuarial valuation in accordance with IND AS-19.

Other Retirement Benefits

Other retirement benefits include settlement at home-town or to the place where he or his family intends to settle in India including Baggage Allowance. The liability on this account is recognized on the basis of actuarial valuation.

The summarised position of various employee benefits recognised in the statement of profit and loss and balance sheet as on 31.03.2018 is as under:

* Except employees posted on Foreign Projects

** The unrecognized actuarial loss (OCI) of Rs. 7.46 crore (Rs. 2.81 crore) consisting of loss of Rs.7.65 crore (Rs. 2.97 crore) in respect of liability towards Post-Retirement Medical Benefits (PRMB) and gain of Rs.0.19 crore (Rs. 0.16 crore) in respect of liability towards Settlement allowance. Since the liability in respect of PRMB has not been provided as per Actuarial valuation and has been restricted as per DPE guidelines, therefore, the OCI in respect of PRMB, as per Actuarial valuation, has not been considered.

* Except employees posted on Foreign Projects

(Previous year figures are shown under bracket () to differentiate from current year figures.)

Sensitivity due to mortality & withdrawals are not material & hence impact of change not calculated.

Sensitiveness as to rate of inflation, rate of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.

15. Disclosure under IndAS-11 on Revenue from contracts for contracts in progress

a. Method Used to determine Contract Revenue: - Percentage of completion.

b. Method Used to determine the Stage of completion of Contract in progress: - Proportion of cost incurred of work certified up to the reporting date to the total estimated cost of the contract.

c. Other details:

16. The Company has received information from few of its suppliers of their being covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Based on this information, there are Rs.5.67 crore (Rs. Nil) amounts due to Micro, Small and Medium Enterprises as at 31^st March 2018.

17. (i) Gross amount required to be spent on Corporate Social Responsibility (CSR) by the Company during the year is Rs. 7.67 crore (Rs.6.80 crore).

(ii)During the year, company has spent Rs. 8.73 crore (Rs.5.90 crore) as against required amount of Rs. 7.67 crore (Rs.6.80 crore) on Corporate Social Responsibility (CSR) activities. Break up of expenditure incurred is as follows

*Assets purchased and handed over to respective organisation and are not being held by the Company.

(iv) CSR expenditure yet to be incurred is Rs. Nil (Rs. 0.91 crore).

18. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the weighted average number of Equity shares outstanding during the year.

*Diluted EPS amounts are also same as basic EPS because company has no dilutive potential Equity shares. The following reflects the income and share data used in the basic EPS computations: -

The following reflects the weighted average number of shares used in calculating basic EPS.

*The weighted average number of shares takes into account the weighted average effect of changes in treasury share transactions during the year. There have been no other transactions involving equity shares or potential equity shares between the reporting date and the date of authorization of these financial statements.

19 . The Company has engaged agents/consultants to secure contracts and provide other services for foreign projects, being implemented in three countries. Pending assessment of services provided by the agent/consultants, the company has not accounted for expenses aggregating to Rs. 4.96 crore (Rs 3.80 crore), comprising of Rs 1.16 crore (Rs 1.36 crore) during financial year 2017-18.

20. Financial Guarantee

The Company has issued financial guarantee (undertaking) to Punjab National Bank on behalf of and in respect of term loan facility availed by joint venture company, Ircon Soma Tollway Private Limited (ISTPL), to make good 50% of total shortfall in the dues, if any, in the event of termination of the concession agreement. Loan outstanding as on 31.03.2018 is Nil (Rs.63.07 crore). The said financial guarantee has been recognised as per Ind-As 109. The ISTPL has repaid the loan amount during the current period.

21. In one of the projects under Northern Region, provision in respect of legal expenses amounting to Rs 11.52 crore has not been provided in the accounts based on legal opinion that the liability is primarily not of the company.

22. During the financial year 2017-18, based on Expert opinion taken by management it was decided that the effects of discounting security deposit with client and contractor, Retention money with client and contractor and money withheld with client and contractor was not material for the preparation and presentation of financial statements. Ind AS 8- âAccounting Policies, Changes in Accounting Estimates and errorsâ allows that the policies specified by Ind AS need not to be applied when the effect of applying them is immaterial. Hence, it has been decided to discontinue discounting the same, consequently in the current year the carrying value of the financial liabilities have been increased by Rs. 48.70 crore, financial assets have been increased by Rs. 6.45 crore, non-financial liabilities have been decreased by Rs. 42.70 crore and non-financial assets have been decreased by Rs. 6.24 crore. The resultant net impact on current yearâs Profit and Loss is amounting to Rs. 0.80 crore, which is not considered as material for the preparation and presentation of financial statements.

23. Events occurring after Reporting period

Refer to Note 14 for the final dividend recommended by the directors which is subject to the approval of shareholders in the ensuing meeting.

24. Standards issued but not effective for the financial year 2017-18 IND AS 115 Revenue from Contracts with Customers:

The Ministry of Corporate Affairs notified IND AS -115 âRevenue from contracts with Customersâ in respect of accounting periods commencing on or after 1 April 2018, superseding IND AS - 11 âConstruction Contractsâ and IND AS -18 â Revenueâ.

The companyâs current revenue recognition policy is broadly aligned to the principles enunciated in IND AS -115 and does not require any material change. The management is in the process of evaluating IND AS -115 and does not expect any material impact on the companyâs financial position as at 31 March 2018 and on the financial results of the company in the first year of implementation viz. financial year commencing on 1 April 2018.

25. Certain prior periods amounts have been reclassified for consistency with the current period presentations. These reclassifications have no effect on the reported results of operations.

Mar 31, 2011

1) Contingent liabilities consist of:

a) Claims against the Company not acknowledged as debt Rs 349.18 crores ( 7 273.65 crores), Against this the Company has counter claims of Rs 61.79 crores (Rs 101.42 crores). In case claims against the Company do materialise, claims for Rs 143.24 crores (Rs 102.89 Crores) will be reimbursable from the clients. Interest on claims is not considered, being unascertainable.

b) Few cases relating to employees / others are pending in the courts against the company in respect of which the liability is not ascertainable.

c) Direct and Indirect disputed tax demands under appeal Rs 114.27 crores (Rs 132.03 crores) of which Rs 29.31 crores (Rs 31.44 crores) are reimbursable from the clients.

d) Pending disposal of application for extension of time by clients, Company is contingently liable to pay liquidated damages to the extent of Rs 0.03 crore (Rs 6.11 crores)

e) Outstanding Bank Guarantee of Rs 0.15 crore (Rs 0.15 crore) to CIDCO towards flats.

f) Claims of Provident Fund Commissioner, J & K for Rs 1.75 crores (Rs 1.75 crores).

2) A demand of Rs 55.23 crores has been raised by the J&K sales tax department as tax liability and interest thereon arising under J & K General Sates tax act 1962 on account of service provided by the Company in the shape of works contract to Railways for the period from financial year 2001-02 to 2006-07. However, art amount of Rs lG.67crores {Rs 12.58 crores) on account of demanded Sale tax has been paid under protest to the department. This has been charged as expense and billed to the client The Company has filed an appeal in respect of completed assessment With the Dy. Commissioner Sales-tax (Appeal) and the matter is pending. The Company is of the opinion that there will not be any additional liability on this account; therefore, no provision has been made in the books of account. However the balance amount has been considered as contingent liability- No assessment has been framed by the department for financial year 2007-08 to 2010-11,

3) Estimated amount of contracts remaining to be executed on capital account [net of Advances) is Rs 0.22 crore {Rs 0.57 crore),

4) (a) Some of the balances shown under debtors, advances, creditors and material lying with Third parties are subject to confirmation / reconciliation/ adjustment, if arty, The Company has been sending letters for confirmation to parties included in the above.

(b) Sales-Tax (including TDS). Value added tax (VAT) and Income Tax (including TDS) shown under advances are subject to confirmation / reconciliation / adjustment, if any.

(c) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

5) Disclosure regarding Leases:

III. Operating Lease for Premises

The Company''s leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guesthouses and transit camps. These leasing arrangements, which are not non cancellable, are mostly for one year, and are usually renewable on mutually agreed terms. The Expenses Schedule (Sch O) under Employee Remuneration and Benefits includes Rs 5.15 crores (Rs 6.31 crores) towards lease payments, net of recoveries in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guesthouse and transit comps aggregate to Rs 3.99 crores (Rs 3.29 crores) shown as rent in schedule O.

@ w.e.f 01.05.2008, the JV partners have changed the nature of operation of JV as per which the balance scope of work has been bifurcated amongst them as against joint control followed earlier. As a result the nature of JV has changed from jointly controlled Entity (JCE) to Jointly Controlled Operation (JCO). Proportionate Consolidation method has been followed till 30.4.2008 as per Accounting policy No.10 (ii) and thereafter accounted for as independent contracts as per the Accounting policy No.10 (i) of schedule- Q of the company in respect of JCO.

d) Contingent liability towards the Company''s share of indemnity bond in case of IMCC as on 31.03.2011 is Rs 1.24 crapes (Rs 1.24 crores).

e) Proportionate share of sales-tax liability in cased IMCC as on 31.03.2011 Rs 4.25 crores (Rs 4.25 crores) (Rs 4.25 crores) and in respect of Service Tax is Rs 1.01 crores (Rs 1.01 crores).

f) Contingent Liability towards the company''s share of bank guarantee in case of MTG as on 31.03.2011 is Rs 2.36 crores (Rs 4.69 crores) crores)

g) Contingent liability towards the Company''s share of corporate guarantee to Central Excise in case of MTG as on 31.03.2011 is Rs 1.54 crores (Rs 1.54 crores)

h) Contingent liability towards the Company''s share of bank guarantee in case of Ircon-RCS-PFLEIDERER as on 31.03.2011 is Rs 0.91 crore (Rs 0.91 crores)

i) The Company has extended Corporate Guarantee to the tune of Rs 30 crores being 50% of the Short Term Loan availed by ISTPL during the year.

j) Contingent liability towards the Company''s share in case of IMCC (Joint Venture) in respect of Income Tax Liability as on 31.03-2011 is Rs 5.29 crores ( Rs 3.25 crores).

6) Related Party disclosures:

a) Enterprises where control exists:

Unincorporated Joint Ventures - Same as list at serial no. 8(a) above.

Joint Venture Companies-Same as list at serial no. 8(b) above,

Wholly Owned Subsidiary - Ircon Infrastructure & Services limited (IrconISL).

b) Key management personnel:

Directors: -S/Shri Mohan Tiwari, K K Garg, Deepak Sabhlok (appointed w.e.f. 16.04.2010), Madan Lal (retired on 31.12,2010), and Hitesh Khanna (appointed w.e.f. 07.03.2011).

7) The Company has carried out the assessment on impairment of individual assets by working out the recoverable amount based On lower of the net realisable value and carrying cost during the Year in terms of AS 23 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. There is no impairment loss (Rs Nil).

8) a) Due to gulf war when payments from clients (including for Samawa and Al-muthana Projects executed in Iraq) were not forthcoming, Govt, of India (GOT) bailed out project exporters in Iraq including Ircon under Deferred Payment Agreement Protocol (DPA).

Under DPA, the outstanding balances dues as certified by Central Bank of Iraq (CBI) to Exim Bank upto Sept. 1395 were settled by GOI by issuing bonds in two phases, Subsequent to 2nd phase, CBf had further certified (confirmed by Exim Bank in May, 2000) an amount of USD 0.B9 crore (equivalent to Â¥ 31,32 era res converted at the last settlement rate of 1 USD - { 35.802) to Exim Bank, awaiting settlement by GO!, for which t he Co m pan y h a d conveyed its consent to Ministry of Railways vide its letter dt .26.05.2005 the settlement is yet to be approved by GOL Corresponding to these dues, interest payable to sub-contractors on back-to-back basis amounting to USD 0.42 Crore [equivalent to Rs 15,04 crates converted at the last settlement rate of 1 USD = 135.802) has been provided in the books of accounts.

b) The accrued interest on deferred Iraqi dues and provision for interest to sub-contractors {under Deferred Payment Agreement Protocol) on back-to-back basis have been translated at the last settlement rate fi e. 1 USD - Rs 35.802) with the Government of India, based on prudence as in previous year. Had the dues been translated at the dosing exchange rate as on 31,03,2011 as per AS-11, Other Current Assets would have been Rs 85.S3 crores {higher by Rs 7.49 crores), Provisions would have been Rs 1004.52 crores [higher by Rs 3.54 crores) and Profit Before Tax would have been Rs 405.20 crores (higher by Rs 3.95 crores).

9) The lease agreement for Locos given on hire to a foreign client is being renewed on year-to-year basis. The renewal of agreement, however, remains always uncertain, In the event of such non-renewal. the left-over spares meant for maintenance of the locos will become redundant and fetch insignificant value as it may be too expensive to ship them back to India. Keeping in view sound accounting practices, cost of such spares is expensed in the year of purchase and this practice is being followed consistently.

10) The company had taken a policy from Life Insurance Corporation of India (LIC) under Group Gratuity Scheme. The contributions to LIC were mad up to FY 2003-04, subsequent contributions could not be made as the demand from LIC was not crystallized. Accumulated balance including interest as on 31.03.2011 in the fund maintained by LIC amounting to Rs 4.07 crores (Rs 4.11 crores) shown as a deduction from provision towards company''s liability for gratuity made as per actuarial valuation in terms of Accounting policy no. 17(i) (schedule L). Amount of Rs 4.07 crores has been received from LIC during the year 2011-12.

11) The Company in its Income-Tax returns is claiming deduction under Section-80 1A of Income- Tax Act, 1961, in respect of eligible construction projects w.e.f. Assessment year 2000-01. The deduction has been disallowed by the CIT(A) in some of the Assessment Years, Although, the CIT(A) has considered our claim for the Assessment year 2004-05, but the Income tax Department has moved to the Tribunal against the order of CTT(A). Accordingly, the tax is being provided without considering the deduction under section- 30IA, The amount of such deduction upto AY 2010-11 is Rs 509.50 crores (Rs 443.44 crores). The matter is pending before the Tribunal.

12) Disclosure under AS-15

Provident Fund

The Company pays fixed contribution of Provident Fund at a pre determined rate to a separate trust which invests the funds in permitted securities, The trust is required to pay a minimum rate of interest on contribution to the members of the trust The amount available in the fund including the return on investments is greater than the obligation of the Company as per actuarial valuation, hence no further provision is considered necessary.

Gratuity

The liability towards gratuity as per rules of the Company is recognised on the basis of actuarial valuation.

Post-Retirement Medical Facility (PRMF)

The Company had established an irrevocable trust by initial one-time contribution of Rs 12 CroreS during the year 2000-01 for providing annuity, medical and other benefits to the spouse of employees who die in harness as also the medical benefits to the employees (and spouse} who superannuate from the Company. This being a voluntary welfare measure, the Company is not liable for providing such benefits to its employees. However the amount available in the fund including the return on investments is more than the amount required for such benefits as

Leave Encashment

The liability towards encashment of leave as per rules of the Company is recognised on the basis of actuarial valuation.

The summarised position of various employee benefit recognised in the profit and loss account, balance sheet areas under-

13 i) The Company has not received any information from any of its suppliers of their being covered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). Based on this information, there are no amounts due to Micro, Small and Medium Enterprises as on 31st March 2011.

ii) The Company has not received any information from any of its suppliers of their being a small scale industrial unit. Based on this information, amounts due to small scale industrial undertaking, which are outstanding for more than 30 days as On 31st March 2011 is Rs Nil (Rs Nil),

14) The accounting policy relating to prior period / prepaid items has been changed by increasing the amount from Rs 5000 to Rs 50000. Due to this change, the net effect of the same is not material.

15) As per existing policy, for Design guarantee after the maintenance period, a token provision of Rs 10 lakhs is kept for each such project. This policy has been changed during the year for making provision for unforeseen expenditure during design guarantee period based on risk perception of management in each contract Subject to a mini mum amount of Rs 50 lakhs and maximum amount of Design guarantee specified in contract agreement with the client. Due to this change in policy, a sum of Rs 129.69 crores has been provided in Malaysia project. Because of this change, profit for the year is lower by Rs 129.69 crores.

16) During the year, the Company has changed accounting procedure relating to expenditure on "Design, Drawing, Business Development and Consultancy Charges". This is now based on receipt of services; earlier this expenditure was accounted for based on contract revenue recognition. Due to this change, the turnover is higher by Rs 116 crore, PBT is higher by Rs 34.94 trores, Current Liabilities ace reduced by Rs 47.73 crores and Current Assets are reduced by Rs 12,79 crores.

17) Basic earnings per share are computed by dividing net profit after tax Rs 240.51 crores {Rs 182.18 crores) by (9,898,000) fully paid equity shares of Rs 10 each, Diluted Earnings per share is not applicable, as there is no dilution involved.

18) Previous year''s figures in brackets have been regrouped, rearranged and recast wherever necessary to make it comparable to the current year''s classification.

Mar 31, 2010

1) Contingent liabilities consist of:

a) Claims against the Company not acknowledged as debt Rs. 2736.49 million (Rs. 4603.43 million). Against this the Company has counter claims of Rs. 1014.16 million (Rs. 889.64 million). In case claims against the Company do materialise, claims for Rs. 1028.93 million (Rs.3224.66 million) will be reimbursable from the clients. Interest on claims is not considered, being unascertainable.

b) Few cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

c) Direct and Indirect disputed tax demands under appeal Rs. 1320.26 million (Rs.937.04 million) of which Rs.314.44 million (Rs. 252.40 million) are reimbursable from the clients and Rs. Nil (Rs. Nil) from the sub- contractors.

d) Pending disposal of application for extension of time by clients, Company is contingently liable to pay liquidated damages to the extent of Rs.61.10 million (Rs. 8.81 million)

e) Outstanding Bank Guarantee of Rs.1.45 million (Rs.1.45 million ) to CIDCO towards flats.

f) Claims of Provident Fund Commissioner, J & K for Rs.17.55 million ( Rs. 17.55 million )..

g) Ircon International Limited (the Company) and Soma Enterprises Limited (Soma) incorporated a joint venture Company called Ircon-Soma Tollway Private Limited (ISTPL) on 19.4.2005 with 50% shareholding each, for execution of a highway project awarded by NHAI to ISTPL (after its incorporation) in terms of the concession agreement between NHAI and ISTPL dated 28th September 2005 for Improvement, Operation and Maintenance, Rehabilitation and Strengthening of Existing 2-lane Road and its widening to a 4- lane divided Highway on NH-3 (Pimpalgaon- Dhule Section ) in the State of Maharashtra on Build, Operate and Transfer (BOT) basis , for a period of 20 years ( 3 years for construction and 17 years for toll collection) at an approximate cost of Rs. 6060.40 million (Rs. 6060.40 million).

The Companys equity investment in the ISTPL is Rs 638.70 million (Rs.638.70 million). To finance the debt portion of the project, ISTPL has arranged a term loan of Rs. 4500 million from a consortium of eight banks, lead by State Bank of India. To secure this term loan the Company along with Soma has by way of promoters support executed a "Sponsor Support Undertaking" and a "Consent and agreement" on 7th August 2006 , in favour of State Bank of India (Security trustee and Lenders agent), wherein both the Company & Soma have jointly and severally undertaken to extend additional equity/provide loans for meeting any cost overrun , shortfall in the agreed debt-service ratio, temporary shortfall on account of delay in receipt of grant and termination payment from NHAI. In the current year the Company & Soma have contributed Rs 100 million each as loan to meet the cost overrun. On 25th October 2009 the toll plaza for 99km stretch, located at Chandwad has become operational and toll collection started. The balance stretch of 19.158 km has been provisionally declared complete on 03rd March 2010 and toll collection at Dhule Plaza has also commenced from 19th April 2010.

2) Estimated amount of contracts remaining to be executed on capital account (net of advances) is Rs. 5.66 million (Rs 254.70 million)

3) Basic earnings per share are computed by dividing net profit after tax Rs.1821.83 million (Rs.1401.82 million) by (9,898,000) fully paid equity shares of Rs.10 each. Diluted Earnings per share is not applicable, as there is no dilution involved.

4) (a) Some of the balances shown under debtors, advances, creditors and material lying with third parties are subject to confirmation / reconciliation. The Company has been sending letters for confirmation to parties included in the above.

(b)ln the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

5) Disclosure regarding Leases:

I. Operating Leases for Locos

a) The Company is also engaged in leasing of locomotives. Total 25 locomotives are on lease to foreign client as on 31.03.2010. The validity of lease has been extended upto 31.12.2010. ^=~=^

II Operating Lease for Premises

The Companys leasing arrangements are in respect of operating leases of premises for residential use of employees, offices, guesthouses and transit camps. These leasing arrangements, which are not non cancellable, are mostly for one year, and are usually renewable on mutually agreed terms. The Expenses Schedule (Sch O) under Employee Remuneration and Benefits includes Rs. 63.10 million (Rs. 77.60 million) towards lease payments, net of recoveries in respect of premises for residential use of employees. Lease payments in respect of premises for offices, guesthouses and transit camps aggregate to Rs. 32.93 million (Rs.38.75 million) shown as rent in Schedule O.

6) Related Party disclosures:

Joint venture Companies-Company named as CCFB ( Compahnia Dos Caminhos De Ferro Da Beira SARL) of Ircon, RITES & CFM ( Mozambique Railways), and a JV Company named as Ircon Soma Tollway Private Limited.

b) Key management personnel:

Directors: - S/Shri Mohan Tiwari, Madan Lal.K K Garg and Deepak Sabhlok.

7) Disclosures in respect of Joint-Ventures

# Work completed on 15.6.2007

# # Project closed, payment yet to be received

# # # Work completed on 5.3.2006

@ Project closed, final settlement yet to be made

@@ w.e.f 01.05.2008, the JV partners have changed the nature of operation of JV as per which the balance scope of work has been bifurcated amongst them as against Joint Control followed earlier. As a result the nature of JV has changed from Jointly Controlled Entity (JCE) to Jointly Controlled Operation (JCO).Proportionate Consolidation method has been followed till 30.4.2008 as per Accounting policy No.10(ii) and thereafter accounted for as independent contracts as per the Accounting policy No.10(i) of Schedule-Q of the Company in respect of JCO.

@@@ On direction of the client Ircon has expelled the other two partners Sari Aska Algeria (15%) and Aska Turkey (15%) from the consortium. The Client later issued order to stop the work followed by communication to close the contract. The contract closure order has since been revoked by the Client and the project restarted in the name of IRCON on 23.05.2010,

d) Contingent liability towards the Companys share of bank guarantee in case of IMCC as on 31.03.2010 is Rs. Nil million (Rs. 21.18 million).

e) Proportionate share of sales-tax liability in case of IMCC as on 31.03.2010 Rs. 42.52 million (Rs.42.52 million).

f) Contingent liability towards the Companys share of bank guarantee in case of MTG as on 31.03.2010 is Rs. 46.91 million (Rs. 46.71 million )

g) Contingent liability towards the Companys share of corporate guarantee to Central Excise in case of MTG as on 31.03.2010 is Rs.15.36 million (Rs.15.36 million)

h) Contingent liability towards the Companys share of bank guarantee in case of Ircon-RCS-PFLEIDERERason 31.03.2010 is Rs. 9.10 million (Rs.9.10 million )

finance but shareholders agreement was signed for USD 7.5 million only. Out of USD 7.5 million, Company had paid USD 1 million during 2008-09 and USD 1 million during 2009-10. Company had received back entire USD 2.00 million from CCFB on 29.01.2010. However, interest on loan on USD 2 million amounting to USD 0.17million still to be received from CCFB.

j) The Company has extended a loan of Rs 100 million to ISTPL JV during the year.

k) Commissioner of Service Tax has served a show cause during the year raising a demand of Rs 0.98 million (Nil) IMCC has disputed the demand and same is pending for adjudication.

I) The assessment by revenue authority for the financial year 2003-04, 04-05 and 05-06 has resulted into a demand aggregating to Rs 32.49 million (Nil) as on 31.03.2010 . The IMCC has disputed the assessment and have filed appeal at various level, which are pending for adjudication.

II) The Company has carried out the assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realisable value and carrying cost during the year in terms of AS 28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. There is no impairment loss (Rs. Nil).

8) a) Due to gulf war when payments from clients (including for Samawa and Al-muthana Projects executed in Iraq) were not forthcoming. Govt, of India (GOI) bailed-out project exporters in Iraq including Ircon under Deferred Payment Agreement Protocol (DPA).

Under DPA, the outstanding balances dues as certified by Central Bank of Iraq(CBI) to Exim Bank upto Sept. 1995 were settled by GOI by issuing bonds in two phases. Subsequent to 2nd phase, CBI had further certified (confirmed by Exim Bank in May, 2000) an amount of USD 8.89 million (equivalent to Rs. 318.21 millions converted at the last settlement rate of 1 USD = Rs. 35.802) to Exim Bank, awaiting settlement by GOI, for which the Company had conveyed its consent to Ministry of Railways vide its letter dt. 26.05.2005 the settlement is yet to be approved by GOI. Corresponding to these dues, interest payable to sub-contractors on back-to-back basis amounting to USD 4.20 Million (equivalent to Rs. 150.37 million converted at the last settlement rate of 1 USD = Rs. 35.802) has been provided in the books of accounts.

b) The accrued interest ,on deferred Iraqi dues and provision for interest to sub-contractors (under Deferred Payment Agreement Protocol) on back-to-back basis have been translated at the last settlement rate (i.e. 1 USD = Rs. 35.802) with the Government of India, based on prudence as in previous year. Had the dues been translated at the closing exchange rate as on 31.03.2010 as per AS-11, Other Current Assets would have been Rs. 954.64 million (increased by Rs. 80.86 million), Provisions would have been Rs. 6014.58 million (increased by Rs. 38.21 million), Profit Before Tax would have been Rs.2682.74 million (increased by Rs. 42.65 million).

9) The Company, as a voluntary welfare measure, has established an irrevocable Trust for providing medical and other benefits to the eligible employees who superannuate from the Company/die in harness and had contributed Rs. 120 million to the corpus of the Trust during financial year 2000-01. The Trust is registered under the provision of the Income Tax Act, 1961. The income of the Trust is considered sufficient to provide the benefits enumerated in the Trust Deed. The Company, however, is not liable for providing such benefits to its employees.

10) The Company had taken a policy from Life Insurance Corporation of India (LIC) under Group Gratuity Scheme and set up a Gratuity Trust. The contributions to LIC were made up to FY 2003-04. Subsequent contributions could not be made as the demand from LIC was not crystallized. The Gratuity Trust has been dissolved. Accumulated balance including interest as on 31.03.2010 in the fund maintained by LIC amounting to Rs. 41.07 million (Rs.37.77 million) has been shown as a deduction from provision towards Companys liability for gratuity made as per actuarial valuation in terms of Accounting Policyno. 17( i) ( Schedule L).

11 a) The Company in its Income-Tax returns is claiming deduction under Section-80 IA of Income- Tax Act, 1961, in respect of eligible construction projects w.e.f. Assessment year 2000-01. Since some of the claims have been rejected upto to level of CIT (Appeals), Tax is provided without considering the deduction. However CIT(A) has considered our claim for the Assessment Year 2004-05, but the department has moved to Tribunal against the order of CIT(A). The deduction upto AY 2009-10 is Rs. 4434.44 million.( Rs. 3220.53 million) The matter is pending before the Tribunal.

b) The Company in its Income-Tax returns is claiming deduction under Section-80 IB of Income-Tax Act, 1961, in respect Of housing projects w.e.f. Assessment year 2007-08, Tax is provided without considering this deduction. The estimated deduction upto AY 2009-10 is Rs. 13.28 million (Rs. 68.46 million).

12. Disclosure under AS-15

Provident Fund

The Company pays fixed contribution of Provident Fund at a pre determined rates to a separate trust, which invest the funds in permitted securities; The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The amount available in the fund including the return on investments is greater than the obligation of the Company as per actuarial valuation, hence no further provision is considered necessary.

Gratuity

Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary for each completed year of service subject to a maximum of Rs. 10 lakhs on superannuation, resignation, termination, disablement or on death.

The liability is provided on the basis of actuarial valuation.

Post-Retirement Medical Facility (PRMF)

The Company has post retirement medical facility under which medical treatment is provided for retired employees and for those who die in service (including spouse) for which the Company has created a Medical Trust Fund. The amount available in the fund including the return on investments is greater than the obligation of the Company as per actuarial valuation,

hence no further provision is considered necessary

Leave Encashment

The Company allows earned leave and half pay leave to the employees equal to 30 days and 20 days per annum respectively. 50% of the earned leave is encashable while in service and maximum of 300 days on superannuation. Half pay leave is encashable only on superannuation subject to a maximum of 240 days as per the rules of the Company. The liability is recognised on the basis of actuarial valuation.

The summarised position of various employee benefit recognised in the profit and loss account, balance sheet are as under:

13 i) Amounts due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31.03.2010 is Rs. Nil ( Nil)

ii) The Company has not received any information from any of its suppliers of their being a small scale industrial unit. Based on this information, there are no amounts due to small-scale industrial undertaking, which are outstanding for more than 30 days as on 31st March 2010 is Rs. Nil (Nil).

14) Figures in the Balance Sheet, Profit & Loss Account and other Schedules are shown in Rupees in million in accordance with the approval of the Department of Company Affairs letter No.46/298/2001-CL- II dated 13.03.2002.

15) During the year, the Company has changed its Accounting Policy on translation of foreign currency of revenue items from yearly average to monthly average. Due to this change, foreign exchange loss (net) has increased by Rs.52.98 million, other income has decreased by Rs 1.78 million, operating income has decreased by Rs. 73.03 million and total expenditure (excluding foreign exchange gain/loss) has decreased by Rs 127.79 million. However, net impact on Profit/Loss of the company is NIL.

16) The company has formed a wholly owned subsidiary company on 30th September, 2009 namely Ircon Infrastructure & Services Limited (IISL) and has invested Rs. 4million (including Rs.0.006 million through IRCONs nominees) towards shareholders equity with the approval of 184th BOD held on 30th July, 2009. The certificate of commencement of business was issued by ROC on 10th November 2009.

17) During the year Company has changed the accounting treatment of loan given to CCFB Mozambique treating it as an Integral Foreign Operation instead of Non-Integral Operation. Due to that foreign exchange fluctuation reserve created in earlier year has been adjusted. This has resulted in net increase in exchange fluctuation gain by Rs.35.08 million. Consequently, profit for the year is higher by Rs. 35.08 million.

18) Previous years figures have been regrouped, rearranged and recast wherever necessary to make it comparable to the current years classification.

19) Balance Sheet Abstract and Company Business Profile:

V Generic names of three principal products of the Company (as per monetary terms) Product Description Other Projects: Turnkey Construction

Mar 31, 2009

(i) In Cost Plus contracts, the cost of all materials, spares (other than capitalised) and stores procured is charged to the project irrespective of actual use to the extent reimbursable by client.

(ii) In Item Rate and Lump Sum Turnkey contracts, the cost of all materials, spares (other than capitalised) and stores are charged to Profit and Loss Account in the year of use.

(iv) Inventories are valued at lower of the cost arrived at on First In First Out (FIFO) basis and net realisable value.

(v) Loose tools are expensed in the year of purchase.

1. Cash and Cash Equivalents

Cash and bank balances in the Balance Sheet comprise of cash at banks, in hand and demand deposits.

For the purpose of cash flow statement, cash and cash equivalents consist of cash and bank balances as defined above, net of bank overdrafts.

2. Provisions

(a) Provision for maintenance

(i) In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

(ii) In Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover companys liability during defect liability period keeping into consideration the contractual obligations, the obligations of the sub-contractors, operating turnoverand other relevantfactors.

(iii) For design guarantees after the maintenance period, a token provision of Rs. 10 lakhs is keptforeach such contract.

(b) Provision for Demobilisation

Provision for demobilisation to meet the expenditure towards demobilisation of Manpower and Plant & Equipment is made in foreign projects.

(c) Provision for Doubtful Debts/Advances

Provision for Doubtful Debts /Advances is made when there is uncertainty of realisation irrespective of the period of its dues. For outstanding over 3 years full provision is made unless the amount is considered recoverable. Debts/Advances are written off when unrealisibility is almost established

(d) Others

Provision is recognised when:

i) the Company has a present obligation as a result of a past event, ii) a probable outflow of resources is expected to settle the obligation and iii) a reliable estimate of the amount of the obligation can be made.

Reimbursement, of the expenditure required to settle a provision is recognised as per contract provisions or when it is virtually certain that reimbursement will be received.

Provisions are reviewed at each Balance Sheet date.

3. Contract Revenue Recognition

Contract Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Depending on the nature of contract, revenue is recognised as under-

(a) In cost plus contracts, revenue is worked out by including eligible items of expenditure in the bills raised on the clients and charging specified margin thereon.

(b) In fixed price contracts, revenue is recognized by adding the aggregate cost of work certified and proportionate margin using the percentage of completion method. The percentage of completion is determined as a proportion of cost incurred to date to the total estimated cost of the contract.

Full provision is made for any loss in the period in which it is foreseen.

Receipts are inclusive of sales tax etc., as applicable.

4. Contracts executed under Joint Venture (JV)

Contracts executed under Joint Venture (JV)

(i) in jointly controlled operations, are accounted as independent contracts;

(ii) in respect of contracts executed by a jointly controlled entity, the profit / loss from the Joint Venture is accounted for in the year when determined.

5. Leases

(i) Lease income from assets given on operating lease are recognized as income in the statement of Profit & Loss account on straight-line basis overthe lease term.

(ii) Lease payments for assets taken on operating lease are recognized as expense in the statement of Profit & Loss account on straight-line basis over the lease term.

6. Liquidated Damages and Escalations

(i) Liquidated damages actually paid/recovered are adjustment against Contract Revenue/Contract Cost. Liquidated damages arising from contractual obligation but under negotiation and not considered payable and not recovered by the client are treated as contingent liability.

(ii) Escalation receivable / payable is accounted for as per the provisions of the contract. Escalation receivable but not certified before close of project accounts is included in work- in- progress.

7. Research & Development Expenses

Expenses on research & development are charged to revenue.

8. Mobilisation Expenses

The initial contract expenses on new projects for mobilisation will be recognised as construction work in progress in the year of incidence, which will be pro rata charged off to the project over the years at the same percentage as the stage of completion of the contract as at the end of financial year.

(ii) Depreciation on fixed assets in foreign countries is provided on straight-line method taking into consideration the commercial life of that asset and/or duration of the project. However, the rates adopted for depreciation are not lower than those specified in Schedule XIV for fixed assets in India (as stated in Para 15 (i) above). On closure of the project, assets are reduced to residual value of 5% and balance is expensed in the year of closure &/or transferred to other project) Plants Machinery Division.

(iii) Software cost exceeding Rs. 25 lakh each is amortised over a period of 36 months on straight line basis from the date of successful commissioning of the software subject to review at each financial yearend.

(iv) In case of leasehold land (other than perpetual lease) and leasehold property, depreciation is provided proportionately over the period of lease.

(v) Assets costing up to Rs. 5000/- or having written down value up to Rs. 5000/- at the beginning of the year,or camps/ caravans / temporary sheds/furnishings acquired during the year are fully depreciated in the year.

9. Borrowing Cost

(i) Borrowing cost in ordinary course of business are recognised as an expense in the period in which they are incurred.

(ii) Borrowing cost that are directly attributable to acquisition, construction or production of a qualifying asset is capitalized as part of the cost of the asset.

10. Retirement Benefits

(i) Provision for Leave Encashment, Gratuity & other retirement benefits is made based on actuarial valuation at the yearend.

(ii) Provident Fund contribution is made to PF Trust on accrual basis.

11. Prior period adjustment and extraordinary items

(i) Income/expenditure relating to prior period and prepaid expenses not exceeding Rs. 5000/- in each case are treated as income/expenditure of the current year.

(ii) Voluntary Retirement Scheme expenses are charged off in the year of incidence of expense.

12. Taxes

(i) Taxes including current income-tax are computed using the applicable tax rates and tax laws. Liability for additional taxes, if any, is provided / paid as and when assessments are completed.

(ii) Deferred income- tax is computed using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

13. Segment Reporting

The Company has identified two primary reporting segments based on geographic location of the project viz. Domestic & International and two secondary reporting segments based on business of construction and Leasing of Assets & its operation (Leasing & Operation).

14. Contingent Liabilities and Contingent Assets

(a) Contingent Liability is disclosed in either of the following cases:

i) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation; or

ii) a reliable estimate of the present obligation cannot be made; or

iii) a possible obligation, unless if the probability of outflow of resources is remote.

(b) ContingentAssetsareneitherrecognised.nordisclosed.

(c) Contingent Liability and Provisions needed against Contingent Liability and Contingent Assets are reviewed at each Balance Sheet date.

(d) Contingent Liability is net of estimated provisions considering possible outflow on settlement.

Notes forming part of the Accounts including Disclosures

1) Contingent liabilities consist of amounts not provided for:

a) Claims against the Company not acknowledged as debt Rs.4603.43 million (Rs. 4368.57 million) excluding the amount of provision for contingent liabilities legal cases for Rs.188.07 million (Rs.171.71 million)( Schedule-L). Against this the Company has counter claims of Rs.889.64 million (Rs. 822.27 million). In case claims against the Company do materialise, claims for Rs.324.66 million (Rs.2823.70 million) will be reimbursable from the clients. Interest on claims is not considered, being unascertainable.

b) Few cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

c) Direct and Indirect disputed tax demands under appeal Rs.937.04 million (Rs.883.59 million) of which Rs.252.40 million (Rs 338.93 million) are reimbursable from the clients and Rs. Nil (Rs. Nil) from the sub- contractors.

d) Pending disposal of application for extension of time by clients, company is contingently liable to pay liquidated damages to the extent of Rs.8.81 million (Rs. 37.54 million).

e) Outstanding Bank Guarantee of Rs. 1.45 million (Rs. 3.54 million) to CIDCO towards flats.

f) Claims from Provident Fund Commisisoner, J & K for Rs. 17.55 million (Rs. Nil) has not been acknowledged as liability.

g) Ircon International Limited (the Company) and Soma Enterprises Limited (JV Partner) incorporated a joint venture company called Ircon-Soma Tollway Private Limited (ISTPL) on 19.4.2005 for execution of a highway project awarded by NHAI to ISTPL (after its incorporation) in terms of the concession agreement between NHAI and ISTPL dated 28th September 2005 for Improvement, Operation and Maintenance, Rehabilitation and Strengthening of Existing 2-lane Road and its widening to a 4- lane divided Highway on NH-3 (Pimpalgaon- Dhule Section) in the State of Maharashtra on Build, Operate and Transfer (BOT) basis, at an approximate cost of Rs.6060.40 million (Rs. 6044.20 million).

The proposed equity investment in the JV Company from both JV partners is Rs. 1280 million (Rs.640 million each) out of which each JV partner has paid Rs.638.70 million (Rs.511 million). To finance the debt portion of the project, the JV Company has arranged a term loan of Rs. 4500 million from a consortium of eight banks, State Bank of India being the lead bank lender. To secure this term loan the company along with its joint venture partner has by way of promoters support executed a "Sponsor Support Undertaking" and a" Consent and agreement" on 7th August 2006, in favour of State Bank of India (Security trustee and Lenders agent), wherein both the partners have jointly and severally undertaken to extend additional equity/provide subordinated loans for meeting any cost overrun , shortfall in the agreed debt-service ratio, temporary shortfall on account of delay in receipt of grant and termination paymentfrom NHAI.

2) Estimated amount of contracts remaining to be executed for on capital account (net of advances) is Rs.254.70 million (Rs 34.46 million).

3) Basic earnings per share are computed by dividing net profit after tax Rs. 1401.82 million (Rs. 1137.98 million) by (9,898,000) fully paid equity shares of Rs.10 each. Diluted Earnings per share is not applicable, as there is no dilution involved.

4) (a) Some of the balances shown under debtors, advances, creditors and material lying with third parties are subject to confirmation/ reconciliation. The Company has been sending letters for confirmation to parties included in the above.

(b) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

5) Related Party disclosures:

a) Enterprises where control exists:

Unincorporated Joint Ventures: - Ircon- COBRA-ELIOP, Ircon-LION PACIFIC SDN, BHD, Ircon- Sree Bhawani Builders, Ircon-GANNON Dunkerly, Ircon-RCS-PFLEIDERER, Ircon-SMJ Project, SMJ- Ircon, International Metro Civil Contractor (IMCC), Metro Tunneling Group (MTG), RICON (Consortium between Ircon and RITES), RICON-CETA SARL, Ircon-ASKA Consortium.

Joint venture Companies-Company named as CCFB (Compahnia Dos Caminhos De Ferro Da Beira SARL) of Ircon, RITES & CFM (Mozambique Railways), and a JV Company named as Ircon Soma Tollway Private Limited.

b) Key management personnel:

Directors: - S/Shri Mohan Tiwari, Ankush Krishan, Sudhir Mathur, Madan Lai.

b) List of Joint-Venture Companies:

@@ w.e.f 01.05.2008, the JV partners have changed the nature of operation of JV as per which the balance scope of work has been bifurcated amongst them as against Joint Control followed earlier. As a result the nature of JV has changed from Jointly Controlled Entity (JCE) to Jointly Controlled Operation (JCO). Proportionate Consolidation method has been followed till 30.4.2008 as per Accounting policy No. 10(ii) and thereafter accounted for as independent contracts as per the Accounting policy No.10(i) of Schedule-Q of the company in respect of JCO.

@@@ On direction of client Ircon has expelled the other two partners Sari Aska and Aska from the consortium and 100% work is being taken up by Ircon. Official communication in this regard is awaited from the client.

c) Contingent liability towards the Companys share of bank guarantee in case of IMCC as on 31.03.2009 is Rs.21.18 million (Rs. 19.29 million).

d) Proportionate share of sales-tax liability in case of IMCC ason 31.03.2009 Rs.42.52 million (Rs.51.34 million).

e) Contingent liability towards the Companys share of bank guarantee in case of MTG as on 31.03.2009 is Rs.46.71 million (Rs. 115.00 million).

f) Contingent liability towards the Companys share of corporate guarantee to Central Excise in case of MTG as on 31.03.2009 is Rs.15.36 million (Rs.11.40 million).

g) Contingent liability towards the Companys share of bank guarantee in case of Ircon-RCS- PFLEIDERER as on 31.03.2009 is Rs.9.10 million (Rs.9.10 million).

h) Contingent Liability towards proportionate share of liquidated damages to the extent of Rs.104 million (Rs. 62.52 million ) in M/sRICON-CETASARL.

i) The company has committed shareholders loan of USD 10 million in CCFB out of which USD 1 million has been remitted during the year balance of USD 9 million is yet to be disbursed.

j) The company has committed conditional advance of Rs. 56.10 million to ISTPLJV during the year.

6) The Sixth Pay Commission recommendation for CDA employees and Second Pay Committee recommendations for IDA employees have been implemented during the year and impact thereof has been accounted for in the books of accounts.

7) The company had purchased a freehold land at Bangalore in January 2001 from Bangalore Development Authority (BDA) which was registered in the Companys name during the year 2005-06 at a capitalised cost of Rs. 11.24 million. The land was the property of BDA. A third party is claiming ownership of the plot. The matter is sub judiced before the Honourable City Civil Court.

8) The Company has carried out the assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realisable value and carrying cost during the year in terms of AS 28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Accordingly, impairment loss of Rs.Nil (Rs. Nil) has been recognised in respect of assets during the year.

9) a) Due to gulf war when payments from clients (including for Samawa and Al-muthana Projects executed in Iraq) were not forthcoming. Govt, of India (GOI) bailed-out projects exporters in Iraq including Ircon under Deferred Payment Agreement Protocol (DPA).

Under DPA, the outstanding balances dues as certified by Central Bank of Iraq (CBI) to Exim Bank upto Sept. 1995 were settled by GOI by issuing bonds in two phases. Subsequent to 2nd phase, CBI had further certified (confirmed by Exim Bank in May, 2000) an amount of USD 8.89 million (equivalent to Rs. 318.21 millions converted at the last settlement rate of 1 USD = Rs. 35.802) to Exim Bank, awaiting settlement by GOI, for which company had conveyed its consent to Ministry of Railways vide its letter dt. 26.05.2005. Corresponding to these dues, interest payable to sub-contractors on back-to-back basis amounting to USD 4.20 Million (equivalent to Rs. 150.37 million converted at the last settlement rate of 1 USD = Rs. 35.802) has been provided in the books of account.

In August, 1989, company was awarded Baiji Project in Iraq. At the time of last two settlements, outstanding dues of this project were not considered as the project was not covered by DPA. Under Non-DPA, the outstanding dues of USD 3.356 million are converted at the last settlement rate of 1 USD = Rs. 35.802.During the year company has received an amount of Rs. 227.20 million towards the settlement of dues which includes payment of Rs.66.60 million towards interest.

b) The accrued interest on deferred Iraqi dues and provision for interest to sub-contractors on back-to-back basis have been translated at the last settlement rate (i.e. 1 USD = Rs. 35.802) with the Government of India, based on prudence as in previous year. Had the dues been translated at the closing exchange rate as on 31.03.2009 as per AS-11, Other Current Assets would have been Rs.839.05 million (increased by Rs.130.90 million), Provisions would have been Rs.4254.89 (increased by Rs.61.86 million) Profit Before Tax would have been Rs. 1945.70 million (increased by Rs.69.04 million).

10) The Company, as a voluntary welfare measure, has established an irrevocable Trust for providing medical and other benefits to the eligible employees who superannuate from the Company/die in harness and had contributed Rs. 120 million to the corpus of the Trust during financial year 2000-01. The Trust is registered under the provision of the Income Tax Act, 1961. The income of the Trust is considered sufficient to provide the benefits enumerated in the Trust Deed. The Company, however, is not liable for providing such benefits to its employees.

11) The Company had taken a policy from Life Insurance Corporation of India (LIC) under Group Gratuity Scheme and set up a Gratuity Trust. The contributions to LIC were made up to FY 2003-04. Subsequent contributions could not be made as the demand from LIC was not crystallized. The Gratuity Trust has been dissolved during the year. Accumulated balance including interest as on 31.03.2009 in the fund maintained by LIC amounting to Rs.37.77 million (Rs.35.17 million)has been shown as a deduction from provision towards companys liability for gratuity made as per actuarial valuation in terms of Accounting Policy no. 17( i) (Schedule Q).

12) (a) The Company in its Income-Tax returns is claiming deduction under Section-80 lAof Income-Tax Act, 1961, in respect of eligible construction projects w.e.f. Assessment year 2000-01. Since some of the claims have been rejected upto to level of CIT (Appeals), Tax is provided without considering the deduction. The deduction upto AY 2008-09 is Rs.3220.53 million.The matter is pending before the Tribunal.

(b) The Company in its Income-Tax returns is claiming deduction under Section-80 IB of Income-Tax Act, 1961, in respect of housing projects w.e.f. Assessment year 2007-08, Tax is provided without considering this deduction. The estimated deduction upto AY 2008-09 is Rs. 68.46 million.

13) Disclosure under AS-15

Provident Fund

The Company pays fixed contribution of Provident Fund at a pre determined rates to a separate trust, which invest the funds in permitted securities. The trust is required to pay a minimum rate of interest on contribution to the members of the trust. The amount available in the fund including the return on investments is greater than the obligation of the company hence no further provision is considered necessary.

Gratuity

Every employee who has rendered continuous service of five years or more is entitled to get gratuity at 15 days salary for each completed year of service subject to a maximum of Rs. 10 lakhs on superannuation, resignation, termination, disablement oron death.

The liability is provided on the basis of actuarial valuation.

Post-Retirement Medical Facility (PRMF)

The Company has post retirement medical facility under which medical treatment is provided for retired employees and for those who die in service (including spouse).

Leave Encashment

The company provides for earned leave benefit and half pay leave to the employees which accrue annually at 30 days and 20 days respectively. 50% of the earned leave is encashable while in service and maximum of 300 days on superannuation. Half pay leave is only on superannuation subject to a maximum of 240 days as per the rules of the company. The liability is recognised on the basis of actuarial valuation.

The summarised position of various employee benefit recognised in the profit and loss account, balance sheet are as under-

14) i) The Company does not have amounts due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31.03.2009 (previous year nil).

ii) The Company has not received any information from any of its suppliers of their being a small scale industrial unit. Based on this information, there are no amounts due to small-scale industrial undertaking, which are outstanding for more than 30 days as on 31stMarch 2009(previousyearnil).

15) Figures in the Balance Sheet, Profit & Loss Account and other Schedules are shown in Rupees in million in accordance with the approval of the Department of Company Affairs letter No.46/298/2001-CL- III dated 13.03.2002.

16) Previous years figures in bracket have been regrouped, rearranged and recast wherever necessary to make it comparable to the current years classification.

Mar 31, 2008

1) Contingent liabilities consist of amounts not provided for:

a) Claims against the Company not acknowledged as debt Rs. 4368.57 million (Rs. 3921.42 million) excluding the amount of provision for contingent liabilities legal cases for Rs. 171.71 million (Rs. 169.29 million) (Schedule-L). Against this the Company has counter claims of Rs. 822.27 million (Rs. 1092.42 million). In case claims against the Company do materialise, claims for Rs. 2823.70 million (Rs. 2303.16 million) will be reimbursable from the clients. Interest on claims is not considered, being unascertainable.

b) Few cases relating to employees/others are pending in the Courts against the Company in respect of which the liability is not ascertainable.

c) Direct and Indirect disputed tax demands under appeal Rs.883.59 million (Rs. 875.76 million) of which Rs.338.93 million (Rs. 199.21 million) are reimbursable from the clients and Rs. Nil (Rs. Nil) from the sub- contractors.

d) Pending disposal of application for extension of time by clients, company is contingently liable to pay liquidated damages to the extent of Rs.37.54 million (Rs. 13.05 million)

e) Outstanding Bank Guarantee of Rs. 3.54 million (Rs. 1.45 million ) to CIDCO and MSRDC towards flats.

f) Ircon International Limited (the Company) and Soma Enterprises Limited (JV Partner) incorporated a joint venture company called Ircon-Soma Tollway Private Limited (ISTPL) on 19.4.2005 for execution of a highway project awarded by NHAI to ISTPL (after its incorporation) in terms of the concession agreement between NHAI and ISTPL dated 28th September 2005 for Improvement, Operation and Maintenance, Rehabilitation and Strengthening of Existing 2-lane Road and its widening to a 4- lane divided Highway on NH-3 (Pimpalgaon- Dhule Section ) in the State of Maharashtra on Build, Operate and Transfer (BOT) basis , at an approximate cost of Rs. 6044.20 million.

The proposed equity investment in the JV Company from both JV partners is Rs. 1280 million (Rs.640 million each) out of which each JV partner has paid Rs.511 million (Rs.380 million). To finance the debt portion of the project, the JV Company has arranged a term loan of Rs. 4500 million from a consortium of eight banks, State Bank of India being the lead bank lender. To secure this term loan the company along with its joint venture partner has by way of promoters support executed a "Sponsor Support Undertaking" and a " Consent and agreement" on 7th August 2006 , in favour of State Bank of India (Security trustee and Lenders agent), wherein both the partners have jointly and severally undertaken to extend additional equity/provide subordinated loans for meeting any cost overrun , shortfall in the agreed debt-service ratio, temporary shortfall on account of delay in receipt of grant and termination payment from NHAI.

2) Estimated amount of contracts remaining to be accounted for on capital account net of advances is Rs. 34.46 million (Rs 368.09 million).

3) Basic earnings per share are computed by dividing net profit after tax Rs. 1137.98 million (Rs. 756.93 million) by (9,898,000) fully paid equity shares of Rs.10 each. Diluted Earnings per share is not applicable, as there is no dilution involved.

4) (a) Some of the balances shown under debtors, advances, creditors and material lying with third parties are subject to confirmation / reconciliation. The Company has been sending letters for confirmation to parties included in the above.

(b) In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

5) The Company has purchased an office building in Malaysia at a total purchase consideration of Rs. 65.20 million during the year. Necessary statutory approvals have duly been received, however, the registration of the building in the name of the Company is in process.

6) The Pay revision for employees is due for Central Dearness Allowance pattern w.e.f 1.1.06 and for Industrial Deamess Allowance (IDA) pattern w.e.f 1.1.07. Impact thereof as estimated has been accounted for in the books of accounts.

7) The company had purchased a freehold land at Bangalore in January 2001 from Bangalore Development Authority (BDA) which was registered in the Companys name during the year 2005-06 at a capitalised cost of Rs.11.24 million. The land was the property of BDA. A third party is claiming ownership of the plot. The matter is sub judiced before the Honourable City Civil Court.

8) The Company has carried out the assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realisable value and carrying cost during the year in terms of AS 28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Accordingly, impairment loss of Rs. Nil (Rs. Nil) has been recognised in respect of Plant & Machinery in domestic segment during the year.

9) Due to gulf war when payments from clients (including for Samawa and Al-muthana Projects executed in Iraq) were not forthcoming. Govt. of India (GOI) bailed-out projects exporters in Iraq including Ircon under Deferred Payment Agreement Protocol (DPA).

Under DPA, the outstanding balances dues as certified by Central Bank of Iraq (CBI) to Exim Bank upto Sept.1995 were settled by GOI by issuing bonds in two phases. Subsequent to 2nd phase, CBI had further certified (confirmed by Exim Bank in May, 2000) an amount of USD 8.89 million (equivalent to Rs. 318.21 millions converted at the last settlement rate of 1 USD = Rs. 35.803) to Exim Bank, awaiting settlement by GOI, for which company had conveyed its consent to Ministry of Railways vide its letter dt. 26.05.2005. Corresponding to these dues, interest payable to sub-contractors on back-to-back basis amounting to USD 4.20 Million (equivalent to Rs. 150.37 Million converted at the last settlement rate of 1 USD = Rs. 35.802) has been provided in the books of account.

In August, 1989, company was awarded Baiji Project in Iraq. At the time of last two settlements, outstanding dues of this project were not considered as the project was not covered by DPA. Under Non-DPA, the outstanding dues of USD 3.356 Million are converted at the last settlement rate of 1 USD = Rs. 35.802.

The deferred Iraqi dues, interest receivable thereon and provision for interest to sub-contractors on back-to-back basis have been translated at the last settlement rate (I.e. 1 USD = Rs. 35.802) with the Government of India, based on prudence as in previous year. Had the dues been translated at the closing exchange rate as on 31.03.2008 as per AS-11, the Sundry Debtors would have been Rs. 4119.65 million (increased by Rs. 29.91 million), Profit Before Tax would have been Rs. 1634.55 million (increased by Rs.29.91 million).

10) The Company, as a voluntary welfare measure, has established an irrevocable Trust for providing medical and other benefits to the eligible employees who superannuate from the Company/die in harness and had contributed Rs. 120 million to the corpus of the Trust during financial year 2000-01. The Trust is registered under the provision of the Income Tax Act, 1961. The income of the Trust is considered sufficient to provide the benefits enumerated in the Trust Deed. The Company, however, is not liable for providing such benefits to its employees.

11) During the financial year 1992-93, the Company had taken a policy from Life Insurance Corporation of India (LIC) under Group Gratuity Scheme and set up a Gratuity Trust. The contributions to LIC were made up to FY 2003-04. Subsequent contributions could not be made as the demand from LIC was not crystallized. Accumulated balance including interest as on 31.03.2008 in the fund maintained by LIC amounting to Rs. 35.17 million (Rs.38.52 million) has been shown as a deduction from provision towards companys liability for gratuity made as per actuarial valuation in terms of Accounting Policy no. 17( i) (Schedule Q).

12) a) The Company in its Income-Tax returns is claiming deduction under Section-80 lA of Income-Tax Act, 1961, in respect of eligible construction projects w.e.f. Assessment year 2000-01. Since some of the claims have been rejected upto to level of CIT (Appeals), Tax is provided without considering the deduction. The deduction upto AY 2007-08 is Rs.2281.31 Million. The matter is pending before the Tribunal.

b) The Company in its Income-Tax returns is claiming deduction under Section-80 IB of Income-Tax Act, 1961, in respect of housing projects w.e.f. Assessment year 2007-08, Tax is provided without considering this deduction. The estimated deduction upto AY 2007-08 is Rs. 56.38 million.

13) The Company has changed its Accounting Policy on method of revenue recognition (Accounting Policy No.9) in case of Fixed Price Contracts (earlier classified separately as Item rate and Lump sum contracts) to Percentage Completion method in accordance with Accounting Standard-7 "Construction Contracts" issued by Institute of Chartered Accountants of India. Due to the change in policy, revenue of the Company has increased by Rs. 315.87 million and the Profit Before Tax of the Company has increased by Rs. 315.87 million.

14) The Company has changed its Accounting Policy on Provision for Contingency. The opening balance as on 01.04.2007 of Provision for Contingency Rs. 200.70 million has been written back, resulting in the increase of profit of Rs. 200.70 million.

15) The Company has changed its Accounting Policy of charging off of initial mobilisation expenses (Accounting Policy No.14) in the year of expense to charging off initial mobilisation expenses on pro rata basis on the basis of percentage of completion. As a result of the change in Accounting Policy mobilisation expenses to the extent not written off i.e. Construction Work in progress is Rs.32.47million. Due to change in Accounting policy profit for the year is increased by Rs.32.47 million.

16) i) During the year the company has changed its (Accounting Policy No. 12) on accountal of Liquidated Damages.

Liquidated Damages are adjusted against the Contract Revenue as against earlier policy of charging off as expense in the year of incidence. As a result of the change, Contract Revenue has decreased by Rs.1.03 million and expense of liquidated damages has decreased by Rs.1.03 million.

ii) Further according to the same clause of Accounting policy the liquidated damages actually recovered from the sub contractor are adjusted from the Contract cost rather than taking the same in the other income. As a result of the change, the contract cost has been decreased by Rs. 0.26 million and other income has decreased by Rs.0.26 million.

17) i) The Company does not have amounts due to suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31.03.2008.

ii) The Company has not received any information from any of its suppliers of their being a small scale industrial unit. Based on this information, there are no amounts due to small-scale industrial undertaking, which are outstanding for more than 30 days as on 31st March 2008 (previous year nil).

18) Figures in the Balance Sheet, Profit & Loss Account and other Schedules are shown in Rupees in million in accordance with the approval of the Department of Company Affairs letter No. 46/298/2001-CL-lll dated 13.03.2002.

19) Previous years figures have been regrouped, rearranged and recast wherever necessary to make it comparable to the current years classification.

Mar 31, 2006

ANNUAL REPORT 2005-2006

NOTES ON ACCOUNTS

Significant Accounting Policies

1. Basis of Preparation

a) The financial statements are prepared according to the historical cost convention on accrual basis and in line with the fundamental accounting principles of prudence, consistency and materiality.

b) The financial statements are reported in Indian rupees and all values arc rounded to the nearest million except when otherwise stated.

2. Statement of Compliance

The financial statements are prepared on the basis of generally accepted accounting principles in India and the provisions of the Companies Act, 1956.

3. Foreign Currency Transactions

a) Transactions within the Country:

Foreign Currency transactions within the Country are translated in the following manner :

i) All foreign currency transactions are translated into Indian Currency at the Telegraphic Transfer (TT) buying rate prevalent on the date of transaction.

ii) Depreciation is translated at the rates used for translation of the value of the assets on which depreciation is calculated.

iii) Monetary items and contingent liabilities denominated in foreign currency are translated at the prevailing closing TT buying rate.

iv) Fixed assets and non-monetary items are translated using the TT buying rate on the date of transaction.

b) Transactions of Integral Foreign Operations

Financial statements of Foreign Operations are translated in the following manner:

i) Revenue items are translated into Indian currency at the average of opening and closing TT buying rates.

ii) Opening and closing inventories are translated at the TT buying rates prevalent at the commencement and close respectively of the accounting period.

iii) Depreciation is translated at the rates used for the translation of the value of the assets on which depreciation is calculated.

iv) Monetary items and contingent liabilities are translated at the prevailing closing TT buying rate.

v) Fixed assets and non-monetary items are translated at the TT buying rate at the date of transaction.

vi) Deferred Iraqi dues and interest receivable thereon and the provision for interest to sub-contractors on back to back basis is translated at the last settlement rate with the Government of India.

c) The net exchange differences resulting from the above translations are recognised as income or expense for the year.

d) Transactions of Non-Integral Foreign Operations

Financial statements of Non-Integral Foreign Operations are translated in the following manner :-

i) The assets and liabilities, both monetary and non-monetary are translated at the closing TT buying rate.

ii) Income and expense items are translated at the average of opening and closing TT buying rates.

iii) All resulting exchange difference is accumulated in foreign currency translation reserve until disposal of the net investment and is recognised as income or as expense in the same period in which gain or loss on disposal is recognised.

4. Fixed assets

a) Fixed assets are stated at historical cost less accumulated depreciation and any impairment in value.

b) Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized.

c) Incidental expenditure during construction period incurred up to the date of commissioning is capitalized.

5. Investments

a) Long-Term Investments are valued at cost less provision for permanent diminution in value.

b) Current Investments are valued at lower of cost and fair value.

6. Inventories

A) Construction Work in Progress

(i) Construction work-in-progress is valued at lower of the cost and net realisable value.

B) Others

(ii) In Cost Plus contracts, the cost of all materials, spares (other than capitalised) and stores procured is charged to the project irrespective of actual use to the extent reimbursable by client.

(iii) In Item Rate and Lump Sum Turnkey contracts, the cost of all materials, spares (other than capitalised) and stores are charged to Profit and Loss Account in the year of use.

(iv) Inventories are valued at lower of the cost arrived at on First In First Out (FIFO) basis and net realisable value.

(v) Loose tools are expensed in the year of purchase.

7. Cash and Cash Equivalents

Cash and bank balances in the Balance Sheet comprise of cash at banks, in hand and demand deposits.

For the purpose of cash flow statement, cash and cash equivalents consist of cash and bank balances as defined above, net of bank overdrafts.

8. Provisions

i) Provision for maintenance

i) In Cost Plus contract, no provision for maintenance is required to be made where cost is reimbursable.

ii) In Item Rate and Lump Sum turnkey contracts, provision is made for maintenance to cover company's liability during defect liability period keeping into consideration the contractual obligations, the obligations of the sub-contractors, operating turnover and other relevant factors.

iii) For design guarantees after the maintenance period, a token provision of Rs.10 lakhs is kept for each such contract.

b) Provision for contingencies

i) Profit from Operations in Item Rate and Lump Sum turnkey projects is recognised based on stage of completion as under:

Stage of completion % age of recognition

Below 25% Nil 25% to less than 50% 33.33 50% to less than 95% 66.67 95% and above % age of work done to contract value

Profit earned but not recognised is transferred to Provision for Contingencies to cover any unforeseen eventualities.

ii) Loss, if any, is charged-off immediately and full provision is made for foreseeable losses.

c) Provision for Demobilisation

Provision for demobilisation to meet the expenditure towards demobilisation of Manpower and Plant & Equipment is made in foreign projects.

d) Provision for Doubtful Debts /Advances

Provision for Doubtful Debts /Advances is made when there is uncertainty of realisation irrespective of the period of its dues. For outstanding over 3 years full provision is made unless the amount is considered recoverable. Debts/Advances are written off when unrealisibility is almost established.

e) Others

Provision is recognised when:

i) the Company has a present obligation as a result of a past event,

ii) a probable outflow of resources is expected to settle the obligation; and

iii) a reliable estimate of the amount of the obligation can be made.

Reimbursement, of the expenditure required to settle a provision is recognised as per contract provisions or when it is virtually certain that reimbursement will be received.

Provisions are reviewed at each Balance Sheet date.

9. Revenue Recognition

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Depending on the nature of contract, revenue is recognised as under:-

a) In cost plus Contracts, revenue is worked out by including eligible items of expenditure in the bills raised on the clients and charging specified margin thereon.

b) In item rate contracts, revenue is recognized according to the method of billing provided in agreement with the clients. The work done up to 31st March and certified by the client before finalisation of project accounts is considered as revenue.

c) In lump sum turnkey contracts, revenue is recognized on the basis of percentage of completion method in proportion of cost incurred to date to the estimated total cost of the contract or the value of interim certification to date, whichever is less.

Receipts are inclusive of sales-tax etc., as applicable.

10. Contracts executed under Joint Venture (JV)

Contracts executed under Joint Venture (JV)

i) in jointly controlled operations, are accounted as independent contracts;

ii) in respect of contracts executed by a jointly controlled entity, the profit / loss from the Joint Venture is accounted for as and when determined.

11. Leases

(i) Lease income from assets given on operating lease are recognized as income in the statement of Profit & Loss account on straight-line basis over the lease term.

(ii) Lease payments for assets taken on operating lease are recognized as expense in the statement of Profit & Loss account on straight-line basis over the lease term. 12. Liquidated Damages and Escalations

i) Liquidated damages actually paid / recovered are booked to final head. Liquidated damages arising from contractual obligation but under negotiation and not considered payable and not recovered by the client are treated as contingent liability.

ii) Escalation receivable / payable is accounted for as per the provisions of the contract. Escalation receivable but not certified before close of project accounts is included in work-in-progress.

13. Research & Development Expenses

Expenses on research & development are charged to revenue.

14. Mobilisation Expenses

The initial expenses on new projects for mobilisation are charged off in the year of incidence of the expense.

15. Depreciation

(i) Depreciation on fixed assets in India is provided oil Straight Line basis (SLM) in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956, except in following cases where it is provided at the rates higher than prescribed in the said Schedule :

(a) General Construction Equipment 19.00% (b) Office Equipment 19.00% (c) Computer including UPS & Inverters 31.67% (d) Vehicles (including heavy Vehicles) 23.75% (e) Furniture & Fixtures 23.75% (f) Speed Boats 19.00%

(ii) Depreciation on fixed assets in foreign countries is provided on Straight Line method taking into consideration the commercial life of that asset and/or duration of the project. However, the rates adopted for depreciation are not lower than specified in Schedule-XIV of the Companies Act, 1956. On closure of the project, assets are reduced to residual value of 5% and balance is expensed in the year of closure & / or transferred to other project/ Plant & Machinery Division.

(iii) Software cost exceeding Rs. 25 lakh each is amortised over a period of 36 months on straight line basis from the date of successful commissioning of the software subject to review at each financial year end.

(iv) In case of leasehold land, depreciation is provided proportionately over the period of lease.

(v) Assets costing Lip to Rs. 5000/- or having written down value tip to Rs. 5000/- at the beginning of the year, or camps/caravans/temporary sheds/furnishings acquired during the year are fully depreciated in the year.

16. Borrowing Cost

(i) Borrowing cost in ordinary course of business are recognised as an expense in the period in which they are incurred.

(ii) Borrowing cost that are directly attributable to acquisition, construction or production of a qualifying asset is capitalized as part of the cost of the asset.

17. Retirement Benefits

i) Provision for Leave Encashment, Gratuity & other retirement benefits is made based on actuarial valuation at the year end.

(ii) Provident Fund contribution is made to PF Trust on accrual basis.

18. Prior period adjustment and extraordinary items

(i) Income / expenditure relating to prior period and prepaid expenses not exceeding Rs. 5000/- in each case are treated as income / expenditure of the current year.

(ii) Voluntary Retirement Scheme expenses are charged off in the year of incidence of expense.

19. Taxes

i) Taxes including current income-tax are computed using the applicable tax rates and tax laws. Liability for additional taxes, if any, is provided / paid as and when assessments are completed.

ii) Deferred income-tax is computed using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

20. Segment Reporting

The Company has identified two primary reporting segments based on geographic location of the project viz. Domestic & International and two secondary reporting segments based on business of construction and Leasing of Assets & its operation (Leasing & Operation).

21. Contingent Liabilities and Contingent Assets

a) Contingent Liability is disclosed in either of the following cases:

i) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation; or

ii) a reliable estimate of the present obligation cannot be made; or

iii) a possible obligation, unless the probability of outflow of resources is remote.

b) Contingent Assets are neither recognised, nor disclosed. c) Contingent Liability and Contingent Assets are reviewed at each Balance Sheet date.

1) Contingent liabilities consist of amounts not provided for :

i) Claims against tile, Company not acknowledged as debt Rs 4870.16 million (Rs. 4000.62 million), against which the Company's counter claims are Rs.463.12 million (Rs.929.12 million). In case claims against the Company do materialise, claims for Rs. 2337.87 million (Rs.2430.69 million) will be reimbursable from the clients. Further, there are some disputes in the courts, the amount for which is unascertainable.

b) Direct and Indirect disputed tax demands tinder appeal Rs.385.15 million (Rs. 456.46 million) of which Rs.184.21 million (Rs. 137.90 million) are reimbursable from the clients and Rs.22.50 million (Rs. 20.36 million) from the sub-contractors.

c) The co-obligation of the Company under a tripartite agreement amongst the Company, bank and client (MSRDC) amounting to Rs.153.62 million (Rs.176.33 million) in a bank loan with accrued interest thereon is secured by hypothecation of revenue earned by the client under the project to be paid back by them with interest.

d) Pending disposal of application for extension of time by clients, company is contingently liable to pay liquidated damages to the extent of Rs.36.10 million (Rs. Nil).

c) Outstanding letters of credit Rs.16.48 million (Rs 49.86 million) other than capital expenditure.

2) Estimated amount of contracts remaining to be accounted for on capital account net of advances is Rs.339.68 million (Rs 136.78 million).

3) a) The company in its income tax returns is claiming deduction under Section 80 IA of income Tax Act, 1961, in respect of eligible construction projects w.e.f. Assessment year 2000-01. Since some of the claims have beers rejected up to the level of CIT (Appeals), Tax is provided without considering the deduction. The estimated deduction claimed upto 31.03.2006 is Rs 1639.78 million. The matter is pending before ITAT.

b) Interest allowed on refund of Income Tax u/s 143(1) of Income Tax Act, 1961 Rs.7.98 million (Rs. Nil) has been taken into income.

4) Basic earnings per share are computed by dividing net profit after tax Rs.806.62 million (Rs.888.31 million) by 9,898,000 (4,949,000) fully paid equity shares of Rs.10 each. Diluted Earnings per share is not applicable, as there is no dilution involved.

Company has issued bonus shares on 01.04.05 in the ratio of 1:1. Therefore, the paid-up share capital of the Company has increased from Rs. 49.49 million to Rs. 98.98 million.

5) (a) Balances shown under debtors, advances, creditors and material lying with third parties are subject to confirmation / reconciliation and consequential adjustments, if any. Despite the Company having sent letters for confirmation to the parties, the response was poor.

(b) In the opinion of the management, the value of current assets, loans and advances on realization in ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

6)(a) Earnings in foreign currency: (Rupees million)

Particulars 2005-06 2004-05

Work Receipts, Loco lease & Consultancy fees 1004.19 1473.39

Bank Interest 63.15 33.32

Other Interest 10.78 17.45

Foreign Exchange Fluctuation Gain 15.14 55.95

Others 10.00 20.74 TOTAL 1103.26 1600.84

(b) Expenditure in foreign currency (Rupees Million)

Particulars 2005-06 2004-05

Operational Expenses 478.68 828.57 Consultancy charges 1.97 1.29

Foreign Exchange Fluctuation Loss 56.62 20.22

Administrative & Other Expenses 6.31 22.89

TOTAL 543.58 872.97

7) Disclosure regarding Leases:

Operating Leases

a) The Company is engaged in leasing of locomotives. Out of 25 locomotives purchased from Indian Railways in earlier years, the lease agreement for 15 locomotives with a foreign client has been extended up to 31.12.06 and for 3 locomotives to another foreign client for the period 07.09.05 to 31.12.2006.

b) Future minimum lease rental payable / receivable under operating lease for each of the following period is as under:

(Rupees million)

Lease Rent Not later than 1 Later than 1 year Later than 5 yea to 5 years years

Receivable 114.94 (79.38) Nil (6.37) Nil (Nil) Payable Nil (Nil) Nil (Nil) Nil (Nil)

c) Disclosure of depreciation on lease business assets including stand by locos during the year:

(Rs. in million)

Particulars of assets As on 31.03.2006 As on 31.03.2005

Gross carrying amount of assets 163.20 163.20 Accumulated depreciation 28.35 18.16

Particulars

Depreciation for the year 10.17 10.17

8) Segment Reporting:

Prima Segment information Geographic) : (Rupees million)

International Domestic

05-06 04-05 05-06 04-05

A. Turnover

Operating Income 982.18 1003.63 9598.68 8720.86

Other Income 67.54 53.26 84.82 100.29 Inter-segment Nil Nil Nil Nil

Total Revenue 1049.72 1056.89 9683.50 8821.15

B. Result Profit before Provision, Depreciation, Interest 239.92 392.79 991.42 831.77 and Tax. ** **

Less: Provision & 30.17 write backs Net (96.76) (104.87) 93.02 Depreciation for the years. 80.86 39.40 109.07 90.92

Interest Nil Nil Nil Nil

Profit Before Tax 128.898 450.15 987.23 647.83

Provision for Tax 38.95 29.00 265.18 165.50

Profit After Tax 89.93 421.15 722.05 482.33

C. Other Information Assets 1611.33 3291.10 8577.14 7132.16

Include Fixed Assets 757.41

Net Block 429.21 362.25 576.19

Liabilities 916.45 1539.45 9233.38 5385.11

Capital Expenditure:

Additions to Fixed 234.10 97.58 125.96 152.46 Assets

Others* Total

05-06 04-05 05-06 04-05 A. Turnover

Operating Income Nil Nil 10580.86 9724.49

Other Income 394.68 265.94 547.04 419.49 Inter-segment Nil Nil Nil Nil

Total Revenue 394.68 265.94 11127.90 10143.98

B. Result Profit before Provision, Depreciation, Interest 22.02 (18.85) 1253.36 1205.71 and Tax.

Less: Provision & write backs Net 18.71 (9.58) (55.99) (13.32) Depreciation for the years. 10.57 11.13 200.50 141.45

Interest Nil Nil Nil Nil

Profit Before Tax (7.26) (20.40) 1108.865 1077.58

Provision for Tax (1.90) (5.23) 302.23 189.27

Profit After Tax (5.36) (15.17) 806.62 888.31

C. Other Information Assets 8422.84 5123.49 18611.31 15546.75

Include Fixed Assets

Net Block 414.20 421.19 1601.02 1359.63

Liabilities 128.88 758.64 10278.71 7683.20

Capital Expenditure: 364.34

Additions to Fixed 4.28 5.61 255.65 Assets

* Others include unallocated revenue, expenses, assets and liabilities.

** Impairment loss of Rs.0.51 million (Rs.1.51 million) considered on Plant & machinery

Secondary Segment information (Business): (Rupees mullion)

Operating Income Segment Assets

2005-06 2004-05 2005-06 2004-05

Construction, etc. 10481.44 9502.83 18319.66 14959.38 Leasing & operation 98.56 221.66 291.65 587.37 Total 10580.86 9724.49 18611.31 15546.75

Secondary Segment information (Business): (Rupees mullion)

Additions to Fixed Assets

2005-06 2004-05

Construction, etc. 364.17 255.58 Leasing & operation 0.17 0.07 Total 364.34 255.65

9) Related Party disclosures:

a) Enterprises where control exists:

Joint Ventures:- IRCON- Cobra-Eliop, IRCON- Islam Trading Consortium, IRCON-Sykt Majutani Kida, IRCON- Sree Bhawani Builders, IRCON-ABB, IRCON- SMJ Project, SMJ-IRCON, RICON (Consortium between IRCON and RITES), JV Company named as CCFB (Compahnia Dos Caminhos De Ferro Da Beira SARL) of IRCON, RITES & CFM (Mozambique Railways), and a JV Company named as IRCON Soma Tollway Private Limited.

b) Key management personnel:

Directors: - S/Shri B.S. Kapur, Sudhir Mathur, Ankush Krishan, and Mohan Tiwari.

c) Disclosure of transactions with related parties:

(Rupees million)

Particulars Transactions Outstanding Amount

2005-06 2004-05 As on As on 31-3-2006 31-3-2005

Remuneration to key As per Note No. 11 Nil Nil management personnel above

Services from enterprises Nil Nil Nil Nil where directors' interest exist

Investment in CCFB/ISTPL 150.00 54.54 205.34 54.54

Loan to CCFB/RICON 46.02 163.93 209.95 163.93

Advance recoverable from 15.50 1.77 17.27 1.77 CCFB/RICON/ISTPL

Income from 9.69 2.29 11.98 2.29 CCFB/RICON/ISTPL

10) Remuneration to Directors are as under:

(Rupees million)

Sr. Particulars 2005-06 2004-05

I Salary & Allowances 1.98 1.87

II Contribution to Provident Fund 0.21 0.22

III Reimbursement of Medical expenses 0.18 0.20

IV Sitting Fee 0.05 0.24 V Other benefits 0.06 0.46 TOTAL 2.48 2.99

Recovery as applicable has been made from Directors who have been provided with Company accommodation and/or car.

11) Disclosures in respect of Joint-Ventures

a) List of unincorporated Joint-Ventures:

Name of the JV Partner(s) and Country of Participating Interest Origin as on 31st March (%)

2006 2005

IRCON-Cobra-Eliop. IRCON, India 61.22 53.70 COBRA, Spain 34.35 42.72 ELIOP, Spain 4.43 3.58

IRCON-Islam Trading IRCON, India 50.00 50.00 Consortium Islam Trading Consortium Ltd., 50.00 50.00 Bangladesh

IRCON-Sykt Majutani IRCON, India - 65.96 Kida @ Sykt Majutani Kida, Malaysia 34.04

IRCON-Sree Bhawani IRCON, India 24.21 24.21 Builders@@ Sree Bhawani Builders, India 75.79 75.79

International Metro Dywideg, Germany 29.00 29.00 Civil Contractor. Larsen & Tubro Ltd., 26.00 26.00 (IMCC) India Samsung Corp., Korea 26.00 26.00 Shimizu Corp., Japan 9.50 9.50 IRCON, India 9.50 9.50

IRCON - ABB IRCON, India 39.26 39.26 ABB Limited, India 60.74 60.74

RICON IRCON, India 49.00 49.00 RITES, India 51.00 51.00

SMJ - IRCON IRCON, India 25.00 25.00

Sumber Mitra Jaya, Indonesia 75.00 75.00

IRCON-SMJ Project IRCON, India 55.00 55.00 JV Sumber Mitra Jaya, Indonesia 45.00 45.00

b) List of Joint-Venture Companies:

Name of JV Company Shareholders and country of Percentage of Origin Ownership

2006 2005

CCFB - (Companhia IRCON, India 25.00 25.00 Dos Caminhos De RITES, India 26.00 26.00 Ferro Da Beira SARL) CFM, Mozambique 49.00 49.00 Mozambique

IRCON-Soma Tollway IRCON, India 50.00 49.00 Private Limited. Soma Enterprise Limited, India 50.00 49.00 Lalitha Gupta, Individual, India - 2.00

@ Termination Agreement signed on 03-11-2004 @@ Project closed, payment yet to be received.

c) Contingent liability towards the Company's share of bank guarantee in case of IMCC as on 31.03.2006 is Rs.238.22 million (Rs.254.25 million).

d) Proportionate share of sales-tax liability in case of IMCC as on 31.03.2006 Rs.65.10 million (Rs.52.33 million).

e) Proportionate share of claims submitted by the sub-contractors in case of IMCC Rs. Nil million (Rs.17.63 million).

f) Capital commitment in case of IMCC as on 31.03.2006 Rs.3.56 million (Rs.3.49 million).

12) The company had purchased a freehold land at Bangalore in January 2001 from Bangalore Development Authority (BDA) which was registered in the Company's name during the year at a capitalised cost of Rs. 11.24 million. The land was the property of BDA. A third party is claiming ownership of the plot. The case is being contested in the court.

13) The Company has carried out the assessment on impairment of individual assets by working out the recoverable amount based on lower of the net realisable value and carrying cost during the year in terms of AS 28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India. Accordingly, impairment loss of Rs.0.51 million (Rs. 1.51 million) has been recognised in respect of Plant & Machinery in domestic segment during the year.

14) The deferred Iraqi dues, interest receivables thereon and provision for interest to sub-contractors on back to back basis have been translated at the last settlement rate (i.e. 1 USD = Rs.35.802) with the Government of India, based on prudence as in previous year. Had the dues been translated at the closing exchange rate as on 31-03-2006 as per AS-11, the Sundry Debtors would have been Rs. 1665.00 million (Rs 2480.45 million), Profit Before Tax would have been Rs. 1102.25 million (Rs. 1075.73 million) and General Reserve would have been Rs.7746.70 million (Rs. 7274.42 million).

15) The Company, as a voluntary welfare measure, has established an irrevocable Trust for providing medical and other benefits to the eligible employees who superannuate from the Company/die in harness and had contributed Rs. 120 million to the corpus of the Trust during financial year 2000-01. The Trust is registered under the provision of the Income Tax Act. The income of the Trust is considered sufficient to provide the benefits enumerated in the Trust Deed. The Company, however, is not liable for providing such benefits to its employees.

16) The company has allowed encashment of unavailed Leave on Half Pay (LHP) at the time of superannuation. This has resulted in an additional provision of Rs 34.35 million during the year based on actuarial valuation.

17) During the financial year 1992-93, the Company had taken a policy from Life Insurance Corporation of India (LIC) under Group Gratuity Scheme and set up a Gratuity Trust. The contributions to LIC were made up to FY 2003-04. Subsequent contributions could not be made as the demand from LIC was not crystallized. Accumulated balance including interest as on 31-03-2006 in the fund maintained by LIC amounting to Rs 67.77 million has been shown under current assets as recoverable from LIC. Full provision towards company's liability for gratuity is made as per actuarial valuation in terms of Accounting Policy no. 17(i) (Schedule Q). Interest of Rs.4.85 million credited to the fund is accounted as company's income.

18) Figures in the Balance Sheet, Profit & loss Account and other Schedules are shown in Rupees in million in accordance with the approval of the Department of Company Affairs letter No.46/298/2001-CL-III dated 13.03.2002.

19) Previous year's figures have been regrouped, rearranged and recast wherever necessary to make it comparable to the current year's classification.

For Gupta & Gupta For and on behalf of the Board of Directors Chartered Accountants

S.B. Gupta Sudhir Mathur B.S. Kapur Partner Director Finance Managing Director

Lalitha Gupta Secretary Secretary

Place : New Delhi Date : 27th July, 2006

Mar 31, 2003

1) Contingent liabilities not provided for :

a) Claims against the Company not acknowledged as debt Rs.809.94 million (Rs.543.85 million), out of which claims amounting to Rs. 60.66 million (Rs.118.81 million) are reimbursable by clients.

Against above, company has raised counter claims aggregating to Rs. 281.07 million (Rs.123.67 million) which are pending with arbitrator.

b) Indirect Taxes demands disputed and under appeal amounting to Rs.154.73 million (Rs. 36.40 million) out of which claims amounting to Rs. 2.32 million (Rs. 0.02 million) are reimbursable from clients and Rs. 17.00 million (Rs. 6.00 million) is recoverable from sub-contractors.

c) Co-obligation of the company amounting to Rs.595.39 million (Rs.667.55 million) against a bank loan alongwith interest accrued thereon in terms of tripartite agreement between the Company, Bank and the client (MSRDC). The loan is secured by hypothecation of the revenue earned by the client against the project and is to be paid back by the client along with interest.

d) Pending disposal of application for extension of time by clients, company is contingently liable to pay liquidated damages to the extent of Rs.242.02 million (Rs. 261.52 million).

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. Nil (Rs.8.28 million).

3) The Company has complied with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

4) NBCC refunded advance paid by IRCON for purchase of office space alongwith interest Rs.121.95 million. Company has disputed the interest rate, which is not in accordance with Arbitration Award and has referred the matter to the Committee on Dispute. Pending final settlement, the unrealized interest of Rs.34.62 million is not accounted for in terms of accounting policy No. 1(v).

5) Pending final assessments u/ s 143 (3) of the Income Tax Act 1961 interest on Income Tax refunds on provisional assessments u/s 143 (1) Rs. 20.59 million (Rs.0.20 million) has not been considered as income.

6) The company executed Optical Fiber Cable based Telcom Project between Mumbai & Delhi and incurred expenditure of Rs.123.38 million (Rs.l23.38million).The project was discontinued and assets were handed over to the Rail Tel Corporation of India Ltd. (RCIL) as directed by the Ministry of Railways for which compensation of Rs. 104.60 million (Rs. Nil million ) was received during the year. Pending final settlement, the difference of Rs.18.78 million has been provided for in earlier years.

7) Pending approval from the Government of India regarding waiver of penal interest and confirmation of guarantee charges, the provision of Rs.55.76 million (Rs.55.76 million) made in earlier years has been continued.

8) The Company constructed 12 (twelve) flats on the land belonging to Indian Railways at a cost of Rs.33.60 million out of which 6 (six) flats were handed over to Railways as per policy of Indian Railways and the balance 6 (six) flats were leased for 30 years from Railways to IRCON. The cost of construction has been shown as Advance Lease Rent. During the year, 2 (two) flats (out of six of IRCON) have been handed over to Container Corporation of India Ltd. at a cost of Rs. 17.20 million which has been reduced from Advance Lease Rent. Rs.16.40 million is being amortized during the Lease period. Lease agreement for the remaining 4 (four) flats is to be executed.

9) Basic Earnings Per Share is computed by dividing Profit after Tax Rs.870.55 million (Rs.1036.97 million) by 4,949,000 (4,949,000) equity shares of Rs.10 each fully paid outstanding for the period. Diluted Earnings per Share is not applicable, as there is no dilution involved.

10) Due to change in assumption adopted in actuarial valuation, the liability for retirement benefits has increased by Rs.58.96 million (Rs. Nil million) and profit for the year is decreased by Rs.58.96 million (Rs. Nil million).

11) Reconciliation of materials with client and sub - contractors are pending in some of the cases. The liability, if any, arising from reconciliation of materials will be accounted for in the year of settlement.

12) Provision has been made for all known liabilities including demobilization existing on the date of Balance Sheet. Liabilities not yet crystallized or liabilities whose amount can not be determined with any reasonable degree of accuracy are not provided.

13) Previous year's figures shown in bracket have been regrouped, rearranged and recast wherever necessary to conform to current year's classification.

14) The Company has taken 30 Locomotives from Indian Railways on operating lease and given on sub lease. The sub lease agreement is expiring for 10 locomotive on 31.12.2003 and for balance 20 locomotive on 25.05.2004. The future minimum basic lease rent receivable and payable.

Mar 31, 2002

1) Contingent liabilities not provided for:

a) Claims against the Company not acknowledged as debt Rs.543.85 million (Rs.779.12 million), out of which claims amounting to Rs.118.81 million (Rs.274.76 million) are reimbursable by clients. Against above, company has raised counter claims aggregating to Rs.123.67 million (Rs.199.30 million) which are pending with arbitrator.

b) Sales Tax demands disputed and under appeal amounting to Rs. 19.55 million (Rs. 5.31 million) out of which claims amounting to Rs.0.02 million (Rs. Nil) are reimbursable from clients; Customs Duty demand disputed and under appeal amounting to Rs.16.85 million (Rs. Nil) out of which Rs.6.00 million (Rs. Nil) is recoverable from sub-contractors and Foreign income tax demands disputed and under appeal aggregating to Rs. Nil (Rs.23.59 million).

c) Co-obligation of the company amounting to Rs.555.50million (Rs.493.60million) against a bank loan along with interest accrued thereon in terms of tripartite agreement between the Company, Bank and a client. The loan is secured by hypothecation charge over the revenue earned by the client against the projects being executed by the company and is to be paid back by the client along with interest. The loan drawn (net of amount billed to the client) has been shown as advance from the client.

d) Pending disposal of application for extension of time by client. Company is contingently liable to pay liquidated damages to the extent of Rs. 261.52 million (Rs. 65.97 million) in respect of certain projects.

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 8.28 million (Rs.130.59 million).

3) The Company has complied with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India except:

Deferred Iraqi dues, interest receivable thereon and provision for interest to sub-contractors on back to back basis have been translated at the last settlement rate with Government of India as against closing TT Buying rate (AS-11) due to uncertainty of the timing of realization and exchange rate. This has resulted in understatement of profit by Rs.16.65 million (Rs.23.89 million) for the year and net deferred dues by Rs.102.15million (Rs.85.50 million). (Refer Accounting Policy no. 9(b)(vi))

4) Interest accrued and receivable for the year Rs.16.03 million (Rs.20.03 million) cumulative Rs.36.06 million (Rs.20.03 million) on delayed refund of advance payment from NBCC to the Company in a case relating to office accommodation has not been accounted for in accordance with Accounting Policy no. 1(v).

5) Pending final assessments u/s 143 (3) of the Income Tax Act 1961 interest on Income Tax refunds on provisional assessments u/s 143 (1) Rs.0.20 million (Rs.2.56 million) has not been considered as income.

6) The Company executed Optical Fibre cable based telecom Project between Mumbai-Delhi and incurred an expenditure of Rs.123.38 million (Rs. 118.71 million). The assets have been handed over to Rail Tel Corporation of India Ltd. (RCGL) as directed by Ministry of Railways for which against our claim of Rs. 162.60 million compensation offered (since been received in 2002-03) is at Rs.104.60 million. Pending final settlement, the difference of Rs.18.78 million has been provided as doubtful receivables.

7) Pending approval from the Government of India regarding waiver of penal interest and confirmation of guarantee charges, the provision of Rs.55.76 million (Rs.55.76 million) made in earlier years has been continued.

8) The Company has constructed 12 (twelve) flats at Mumbai on the land belonging to Indian Railways. The construction cost of the flats will be borne by IRCON and 6 (six) flats will be leased to IRCON for a period of 30 years. The expenditure on construction of flats Rs.32.43 million (Rs.30.44 million) has been shown as Advance Lease Rent. Lease agreement with Railways is yet to be executed.

9) The Company has changed the Accounting Policy relating to loco spares to comply with the Accounting Standard-2 Valuation of Inventories. The closing inventory At these spares is taken at net realisable value at Rs. Nil in view of no market of such inventory in Malaysia & it being uneconomical to take them back to India. There is no impact on profit due to this change, (refer Accounting Policy No.8(ii))

10) The Company has changed the Accounting Policy relating to `Retirement benefits and has made the provision for leave encashment on `actuarial basis instead of `accrual basis due to which the profit for the year is higher by Rs. 39.99 million, (refer Accounting Policy No. 14)

11) The Company has changed the Depreciation Policy for assets in India by revising the rates on account of review of technology evaluated estimated useful life and computed depreciation on Straight Line Method on all assets against Written Down Method in some of the cases up to last year. Due to the change in the policy the depreciation charged for the year is higher and profit is lower by Rs.16.67 million, (refer Accounting Policy No.5(i))

12) Basic Earnings Per Share is computed by dividing Profit after Tax Rs. 1036.97 million (Rs.656.05 million) by 4,949,000 (4.949,000) equity shares of Rs.10 each fully paid outstanding for the period. Diluted Earnings per Share is not applicable, as there is no dilution involved in the above Share Capital.

13) Reconciliation of materials with clients and Sub Contractors are pending in some of the cases. The liability if any arising from the reconciliation of materials will be accounted for in the year of settlement.

14) Provision has been made for all known liabilities including demobilisation existing on the date of Balance sheet. Liabilities not yet crystallised or liabilities whose amount cannot be determined with any reasonable degree of accuracy are not provided.

15) Investments in Unit Trust of India, G.Sec Fund had been sold at Rs. 615.23 million on 7/6/2002 against purchase cost of Rs. 700 million. The loss of Rs. 84.77 million has been considered during the year as permanent diminution in value of the "investments" (refer Accounting Policy No.7).

16) Previous years figures are shown in bracket and have been regrouped, rearranged and recast wherever necessary to conform to current years classification.

17) (a) Earnings in Foreign currency

(Rs. in million) 2001-02 2000-01

Work Receipts & Loco lease 5487.45 3618.26

Bank Interest 66.76 87.59

Other Interest 43.87 30.73

Foreign Exchange Fluctuation Gain 296.84 186.90

Others 6.84 28.26

TOTAL 5901.76 3951.74

b) Expenditure in Foreign currency: (Rs. in million) 2001-02 2000-01

Operational Expenses 2848.79 2305.34

Interest 2.93 4.81

Consultancy charges 35.93 0.05

Administrative & Other Expenses 174.08 102.35

TOTAL 3061.73 2412.55

20) The Company has taken 30 Locomotives from Indian Railways on operating lease and given on sub lease. The period of lease/sub lease is up to May 2003. The future minimum basic lease rent receivable and payable are as under:

(Rs. In million) Lease Rent Not later Later that 1 year Later than 5 years than 1 year to 5 years

Receivable 148.41 2.36 Nil

Payable 72.32 11.00 Nil

Upon the expiry of the agreement, the hirer have option to purchase any or all the Locomotives upon the terms and conditions to be mutually agreed upon between the parties.

21) List and transactions of related parties as per Accounting Standard 18 `Related Party Disclosure issued by Institute of Chartered Accountants of India is `Nil.

Mar 31, 2001

1. Contingent liabilities not provided for :

a) Claims against the Company not acknowledged as debts Rs. 779.121 million (Rs. 603.971 million), out of which claims amounting to Rs. 274.767 million (Rs. 119.554 million) are reimbursable by clients. Against above, company has raised counter claims aggregating to Rs. 199.301 million (Rs. 197.930 million) which are pending with arbitrator.

b) Sales Tax demands disputed and under appeal amounting to Rs. 5.314 million (Rs. 5.806 million) and Foreign income tax demands disputed and under appeal aggregating to Rs. 23.59 million (Rs. 23.46 million).

c) Co-obligation of the company amornting to Rs. 493.60 million ( Rs. 407.743 million) against a bank loan in terms of tripartite agreement between the Company, a Bank and a Client ( refer to note No.7).

d) Pending disposal of application for extension of time by client. Company is contingently liable to pay liquidated damages to the extent of Rs. 65.968 million (Rs. 1.141 million) in respect of certain projects.

2) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 130.587 million ( Rs. 17.422 million).

3) The Company lias complied with the mandatory Accounting standards issued by the Institute of Chartered Accountants of India except as under:

i) Accounting of transactions listed in Accounting Policy No-1 continued to be made on cash basis as the same cannot reasonably be quantified. The said policy is being followed consistently and does not have material effect.

ii) In view of the ongoing separation of employees scheme, provision for leave encashment is continued to be made on accrual basis as per Accounting Policy No. 12 (ii) of the Company.

iii) Due to prevailing uncertainty as to the timing of realization and exchange rate for conversion of dues into Rupees, deferred Iraqi dues and interest receivable thereon and also the provision for interest to sub - contractors on back to back basis are translated at the last settlement rate with Government of India as against at closing TT Buying rate.

iv) The cost of spares for loco maintenance is expensed in the year of purchase as per accounting policy No. 6 ( ii) of the Company in view of it becomes uneconomical to export back these unused spares.

v) In view of the change in Company's accounting policy No.3(i) regarding Machinery spares w.e.f. 01-04-2000, all the Machinery spares existing on that date have been fully charged off during the year under the head "Repair and Maintenance to Plant and Machinery". Due to this profit and inventory for the year is'lower by Rs. 9.765 million (Rs. NIL).

4) In terms of the Accounting Standard-10 , the company has , during the year, changed its Accounting Policy No. 3(i) relating to Machinery Spares which can be used only in connection with an item of Fixed Assets and whose use is expected to be irregular. These Machinery Spares shall now be capitalized which were hitherto treated as Inventory. Due to this change profit for the year is lower by Rs. 0.003 million (Rs. NIL).

5) As part settlement of deferred dues of Iraq project, the Company holds Government of India Compensation ( Project Exports to Iraq) Bonds aggregating Rs. 1492.78 million (Rs. 1492.78 million). As these bonds are unquoted and the Company intends to hold the same till maturity, these investments have been valued at cost. Out of these bonds of Rs. 1452.23 million have matured on 01.04.2001 and thereafter encashed and amount realised have been further invested in Bank Deposit and UTI G-Sec Fund.

6) Pending determination of final premium payable to the Life Insurance Corporation of India in terms of Accounting Policy No. 12(i) provision for gratuity during the year has been made based on actuarial valuation made by an independent actuary.

7) The Company is co-obligant in respect of a Bank loan in its name (including interest accrued thereon) of Rs. 493.60 million (Rs. 407.743 million) which is being utilised for financing the cost of certain projects being executed by the company for a client. The loan is to be secured by hypothecation of the revenue to be earned by the client against these projects and is to be guaranteed by State Government. It is to be paid back by the client along with interest. The loan drawn ( net of amount billed to the client) has been shown as advance from the client and tlie full amount of loan along with interest accrued thereon has been shown as contingent liability.

8) Provision in respect of likely expenses on demobilization of Rs. 78.042 million as on 31.3.2001 ( Rs. 35.612 million) and various claims of the contractors under dispute Rs. 205.293 million as on 31.03.2001 (Rs. 181.575 million) has been made on best estimate basis as ascertained by the management and is on the same basis as in previous year.

9) The Company was executing optical fibre based tclccom project between Mumbai and Delhi. Further, work on the project has been stopped as per directive of Ministry of Railways. Pending decision in this regard the expenditure on the project Rs. 118.710 million ( Rs. 111.247 million) has been shown as Capital Work in progress.

10) The Company is constructing certain flats on the land belonging to Indian Railways. The entire construction, cost of the flats will be borne by IRCON and half of the flats will be released to IRCON for a period of 30 years at a token rent. Pending completion, the expenditure on construction of flats Rs. 30.435 million (Rs. 19.578 million) has been shown as Capital Work-in Progress.

11) Pending approval from the Government of India regarding waiver of penal interest and confirmation of guarantee charges, the provision of Rs. 55.76 million (Rs. 55.76 million) made in earlier years has been continued.

12) Pending final assessments u/s 143 (3) of the Income Tax Act 1961 interest on Income Tax refunds on provisional assessments u/s 143(1) Rs. 2.557 million (Rs. 4.725) has not been considered as income.

13) Interest accrued and receivable by IRCON Rs.20.030 million (Rs. Nil) on delayed refund of advance payment by NBCC to the Company in a dispute relating to office accommodation has not been accounted for in terms of Company's Accounting Policy No. 1(v), as the dispute has not yet been fully resolved.

14) 'Operating Expenses' under the head 'Contribution to Provident Fund and other Funds' includes an amount ofRs. 120 million (Rs. Nil) contributed by the Company as a corpus to a newly constituted 'IRCON Medical Trust'.

15) The reconciliation of the materials with the clients and sub-contractors is pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

16) Debit and credit balances of parties are subject to confirmation from them.

17) Considering the nature of the business of the Company the management is of the opinion that provision relating to disclosure of information required by clause 3(ii) of part II to Schedule VI to the Companies Act, 1956 are not applicable.

18) Previous year's figures have been regrouped, rearranged and recast wherever necessary to conform to current year's classification.

19) Figures in brackets represent previous year's figures.

Mar 31, 2000

1. Contingent Liabilities not provided for

a) Claims against the Company not acknowledge as debts Rs.572.643 million (Rs.293.534 million), out of which claims amounting to Rs.119.554 million (Rs. 29.969 million) are reimbursable by clients.

b) In addition to (a) above, the claims against the Company amounting to Rs. 31.328 million (Rs.30.583 million) and counter claims of the company aggregating to Rs.1.467 million (Rs.1.432 million) are pending with arbitrator/courts.

c) Sales-tax demands disputed and under appeal amounting to Rs.5.806 million (Rs.61.572 million), out of which Rs. NIL (Rs.23.307 million) are reimbursable by clients. Foreign income tax demands disputed and under appeal aggregate to Rs. 23.46 million (Rs. 23.68 million).

d) Co-obligation of the company amounting to Rs.407.743 million (Rs.1078.684 million) against a bank loan in terms of tripartite agreement between the Company, a Bank and a Client (refer to note No.8).

e) Pending disposal of application for extension of time by client, Company is contingently liable to pay liquidated damages to the extent of Rs.1.141 million (Rs. NIL) in respect of certain projects.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.17.422 million (Rs.51.328 million).

3. The Company has complied with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India except as under :-

i) Accounting of transactions listed in Accounting Policy No.1 continued to be made on cash basis as the same cannot reasonably be quantified. The said policy is being followed consistently and does not have material effect.

ii) In view of the on-going separation of employees' scheme, provision for leave encashment is continued to be made on accrual basis as per Accounting Policy No.12(ii) of the Company.

iii) Due to prevailing uncertainty as to the timing of realisation and exchange rate for conversion of dues into Rupees, deferred Iraqi dues and interest receivable thereon and also the provision for interest to sub-contractors on back to back basis are translated at the last settlement rate with Government of India as against at closing TT Buying Rate.

4. In compliance with Accounting Standard No.2, the Company has, during the year, changed its Accounting Policy relating to inventories as per which stock of materials, stores and spares are valued at lower of cost arrived on FIFO basis and net realizable value as against at cost in earlier years. Due to this change, profit for the year is lower by Rs. 13.12 million. Accounting Policy has also been changed relating to spares for locos maintenance which are expenses in the year of purchase as against on consumption basis in earlier years. Due to this change, profit for the year is lower by Rs. 17.134 million.

5. The Accounting Policy relating to translation of foreign currency transactions has been changed during the year as per which deferred Iraqi dues and interest receivable thereon and also the provision for interest to sub-contractors on back to back basis is translated at the last settlement rate with Government of India as against at closing TT buying rate in earlier years. Due to this change, the profit for the year is lower by Rs.27.331 million.

6. As part settlement of deferred dues of Iraq project, the Company holds Government of India Compensation (Project Exports to Iraq) Bonds aggregating Rs.1492.78 million (Rs.1584.38 million). As these bonds are unquoted and the Company intends to hold the same till maturity, these investments have been valued at cost.

7. Pending determination of final premium payable to the Life Insurance Corporation of India in terms of Accounting Policy No.12(i), provision for gratuity during the year has been made based on actuarial valuation made by an independent actuary.

8. The Company is co-obligate is respect of a bank loan in its name (including interest accrued thereon) of Rs.407.743 million (Rs.107.684 million) which is being utilised for financing the cost of certain projects being executed by the company for a client. The loan is to be secured by hypothecation charge over the revenue to be earned by the client against these projects and is to be guaranteed by State Government and is to be paid back by the client along with interest. The loan down (net of amount to be billed to the client) has been shown as advance from the client and the full amount of loan along with interest accrued thereon has been shown as contingent liability.

9. Provision is made in the accounts for all known liabilities existing on the date of Balance Sheet. Liabilities not yet crystalized or liabilities whose amount cannot be determined with any reasonable degree of accuracy are not provided.

10. Provision in respect of likely expenses on demobilisation Rs.35.612 million as on 31.3.2000 (Rs.20.010 million) and various claims of the contractors under dispute Rs.181.575 million as on 31.3.2000 (Rs.215.786 million) has been made on best estimate basis as ascertained by the management and is on the same basis as in previous year.

11. In terms of `Right of Way' granted by the Government of India, Ministry of Railways, the Company is executing optical fibre based telecom project between Mumbai and Delhi. Further work on the project has been stopped as per Ministry's directive. Pending decision in this regard, the expenditure on the project Rs.111.247 million (Rs.30.498 million) has been shown as Capital Work-in-Progress.

12. The Company is constructing certain flats on the land belonging to Indian Railways. The entire construction cost of the flats will be borne by IRCON and half of the flats will be leased to IRCON for a period of 30 years at a token rent. Pending completion, the expenditure on construction of flats Rs.19.578 million (Rs. 0.430 million) has been shown as Capital Work-in-Progress.

13. Pending approval from Government of India regarding waiver of penal interest and confirmation of guarantee charges, the provision of Rs.55.76 million (Rs.55.76 million) made in earlier years has been continued.

14. Pending final assessments u/s 143 (3) of the Income Tax Act 1961, interest received on income tax refunds on provisional assessments u/s 143 (1) Rs.4.725 million (Rs.NIL) has not been considered as income.

15. Provision for other contingencies includes Rs.8.10 million (Rs.45.87 million) against claims of various contractors in respect of closed projects at Iraq. Pending settlement of such claims, no statutory deductions are considered necessary.

16. The reconciliation of the material with the clients and sub-contractors is pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

17. The Company's hardware/software systems are y2k compliant.

18. Debit and credit balances of parties are subject to confirmation from them.

19. Considering the nature of the business of the Company, the management is of the Opinion that provision relating to disclosure of information required by clause 3(ii) of Part II to Schedule VI to the Companies Act, 1956 are not applicable.

Mar 31, 1999

1. Contingent Liabilities not provided for

a) Claims against the Company not acknowledged as debts Rs.293.534 million (Rs.517.708 million), out of which claims amounting to Rs.29.969 million (Rs.311.746 million) are reimbursable by clients.

b) In addition to (a) above, the claims against the Company amounting to Rs.30.583 million (Rs.41.967 million) and counter claims of the company aggregating to Rs.1.432 million (Rs.125.014 million) are pending with arbitrator/courts.

c) Indian income tax and sales-tax demands disputed and under appeal amounting to Rs.61.572 million (Rs.312.025 million), out of which Rs.23.307 million (Rs.19.313 million) are reimbursable by clients. Foreign income tax demands disputed and under appeal aggregate to Rs.23.68 million (Rs.36.99 million).

d) Co-obligation of the company amounting to Rs.107.684 million (Rs.42.6 million) against a bank loan in terms of tripartite agreement between the Company, a Bank and a Client (refer to note No.7).

e) Pending disposal of application for extension of time by client, Company is contingently liable to pay liquidated damages to the extent of Rs. NIL (Rs.5.480 million) in respect of certain projects.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.51.328 million (Rs.13.662 million).

3. The company has complied with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India except as under :-

(i) Accounting of transactions listed in Accounting Policy No.1 continued to be made on cash basis as the same cannot reasonably be quantified. The said policy is being followed consistently and does not have material effect.

(ii) In view of the on-going separation of employees' scheme, provision for leave encashment is continued to be made on accrual basis as per Accounting Policy No.12(ii) of the Company.

4. During the year, the Company has changed its Accounting Policy relating to loose tools as per which full value of loose tools purchased during the year are charged to consumption account which hitherto were being depreciated at appropriate rates under Companies Act, 1956. As such, balance of Rs.0.566 million in loose tools as on 1.4.1998 has also been written off during the year. The effect of this change in the policy has not been ascertained, amount being not material.

5. Pending determination of Final premium payable to, the Life Insurance Corporation of India Limited in terms of Accounting Policy No.12(i), provision for gratuity during the year has been made based on actuarial valuation made by an independent actuary.

6. As part settlement of deferred dues of Iraq project, the Company holds Government of India Compensation (Project Exports to Iraq) Bonds aggregating Rs.1584.38 million (Rs.1656.03 million). As these bonds are unquoted and the Company intends to hold the same till maturity, these investments have been valued at cost.

7. The Company is co-obligant in respect of a bank loan in its name (including interest accrued thereon) of Rs.107.684 million (Rs.42.6 million) which is being utilised for financing the cost of certain projects being executed by the company for a client. The loan is to be secured by hypothecation charge over the revenue to be earned by the client against these projects and is to be guaranteed by State Government and is to be paid back by the client along with interest. The loan drawn (net of amount to be billed to the client) has been shown as advance from the client and the full amount of loan along with interest accrued thereon has been shown as contingent liability.

8. Provision is made in the accounts for all known liabilities existing on the date of Balance Sheet. Liabilities not yet crystalized or liabilities whose amount cannot be determined with any reasonable degree of accuracy are not provided.

9. Debit and credit balances of parties are subject to confirmation from them.

10. The reconciliation of the material with the clients and sub-contractors is pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

11. The Company's hardware/software systems are y2k compliant. The software in computer system of the aircraft owned by the Company will require minor changes, the cost of which is estimated to be Rs.0.040 million for which necessary provision has been made. This change is likely to be effected by 30.11.1999. No contingency plan is required.

12. The Company has paid an advance of Rs.159.300 million to National Buildings Construction Corporation Limited for the purchase of office accommodation. Due to certain disputes, the matter was referred to the arbitration. The arbitration award has been received against which Company has filed an appeal. Pending disposal of the appeal, provision has been made in terms of the award.

13. The Company has made short term deposits in non scheduled banks in the foreign countries where long term projects are under implementation. The accounts have been opened with the permission of Reserve Bank of India. The Company has brought out this fact to the notice of Department of Public Enterprises vide letter No.IRCON/DF/Misc./8459 dated 3.1.1995, which has issued guidelines for investment of surplus funds by the Public Sector Enterprises.

14. Provision for other contingencies include Rs.45.87 million against claims of various contractors in respect of closed projects at Iraq. Pending settlement of such claims, no statutory deductions are considered necessary.

15. Considering the nature of the business of the Company, the management is of the Opinion that provision relating to disclosure of information required by clause 3 (ii) of Part II to Schedule VI to the Companies Act,1956 are not applicable.

1998-99 1997-98 (RUPEES) (RUPEES)

17. a) Expenditure in foreign currency (accrual basis)

Operational expenses 163,816,794 237,808,452

Interest - 202,493

Consultancy 306,430 1,521,008

Others 86,355,436 244,798,164

250,478,660 484,330,117

b) Earnings in foreign currency (accrual basis)

Work receipts 501,115,671 913,741,776

Bank interest 58,333,579 29,655,641

Other interest 2,630,239 2,479,882

Foreign exchange fluctuation gain/(loss)-net 120,897,244 (45,438,096)

Others 6,809,591 18,528,976

689,786,324 918,968,179

Mar 31, 1998

1. The Company has formulated an accounting policy during the year relating to provision for maintenance to cover company's liability towards defect rectification as per which provision is made annually as against only on substantial completion of the projects during the previous year. The effect of this change has not been ascertained, amount being not material.

2. During the year, the company has changed its accounting policy relating to charge of depreciation as per which assets with written down value upto Rs. 5000/- each at the beginning of the year are fully depreciated during the year, token value of Rs. 1/- is no longer retained in books and further depreciation on office equipments, furniture & fixture, Light vehicles, Computers and loose tools purchased on or after 1.4.97 is charged on written down value method as against straight line method at the rates specified in Schedule XIV of the Companies Act, 1956. The effect of this change in the policy has not been ascertained, amount being not material.

3. A provision of R. 17.100 million has been made against pay revision of employees covered under IDA scales of pay which are due for revision with effect from 1st January 1997.

4. As part settlement of deferred dues of Iraq project, the company holds Government of India Compensation (Project Exports to Iraq) Bonds aggregating Rs. 1653.03 million (Rs. 1650.78 million). As these bonds are unquoted and the company intends to hold the same till maturity, these investments have been valued at cost.

5. The Company is co-obligant in respect of a bank loan in its name (including interest accrued thereon) of Rs. 42.6 million (Rs. Nil) which is being utilised for financing the cost of certain projects being executed by the company for a client. The loan is to be secured by hypothecation charge over the revenue to be earned by the client against these projects and is to be guaranteed by State Government and is to be paid back by the client alongwith interest. The loan drawn (net of amount to be billed to the client) has been shown as advance from the client and the full amount of loan alongwith interest accrued thereon has been shown as contingent liability.

6. The Company has paid an advance of Rs. 159.300 million to National Buildings Construction Corporation Limited for the purchase of office accommodation. Due to certain disputes, the matter has been referred to the permanent Machinery of Arbitration, Department of Public Enterprises which is pending.

7. The reconciliation of the material with the clients and sub-contractors is pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

8. The Company has taken a policy under the Group Gratuity Scheme from Life Insurance Corporation of India under which it continues to pay adhoc premium of Rs. 1.113 million annually pending determination of final value of the premium by LIC. Adjustment, if any, shall be done on receipt of final amount of premium as determined by LIC.

9. The Company has made short term deposits in non scheduled banks in the foreign countries where long term projects are under implementation. The accounts have been opened with the permission of Reserve Bank of India. The Company has brought out this fact to the notice of Department of Public Enterprises vide letter No. IRCON/DF/Misc/8459 dated 3.1.95, which has issued guidelines for investment of surplus funds by the Public Sector Enterprise.

10. Provision is made in the accounts for all known liabilities existing on the date of Balance Sheet. Liabilities not yet crystallized or liabilities whose amount cannot be determined with any reasonable degree of accuracy are not provided.

Mar 31, 1997

1. Fixed Assets A) Title deeds in respect of flats acquired from DDA are pending registration.

B) Plant & Machinery having Book Value of Rs. 1137200 (Previous Year Rs. 1360573) are lying with third parties in the ordinary course of Business.

C) Due to Political situation in Iraq, Client has taken in his possession assets costing Rs. 99475 (Net Block Rs. 1,687) (Previous year Rs. 99475 Net Block Rs. 1,687)

Bonds worth Rs. 200 million (150 MILLION) pledged with the bank for issue of bank guarantees and Rs. 116 Million endorsed to sub contractors in partial settlement of their outstandings.

2. In terms of Accounting Standard-11 `Accounting for the effects of changes in foreign exchange rates', net gains of Rs. 137.141 million (including Rs. 51.586 million arising due to Foreign Exchange Fluctuation in respect of rupee advances outstanding in the books of Iraq project for which adequate provision has been made) arising on account of fluctuation in foreign exchange rates at the time of transaction of unit balances/transactions have been accounted for in the Profit & Loss Account which gains hitherto in earlier years was credited to reserve under `Foreign Exchange Fluctuation Reserve Account', resulting in net additional gain of Rs. 85.555 million credited to Profit & Loss Account.

3. In accordance with the Accounting Standard No. 7 - `Accounting for construction contracts',the Company has retrieved provision for contingencies amounting to Rs. 17.870 million (Rs. 13.861 million) and made provision for forseeable losses which amounts to Rs. 79.557 million (Rs. 299.10 million), based on evaluation made by the mangement.

4. A provision of Rs. 53.130 million has been made based on the recommendations of Fifth Pay Commission for payment of arrears of salary from January '96 to March '97 to the employees covered under CDA pattern. Also an additional provision of Rs. 4.974 million has been made for the Group C and B employees covered under IDA pattern pending finalisation of their scales from January '92 to March '97.

5. An additional provision of Rs. 32.162 million (Cumulative Rs. 92.337 million as on 31.3.97) has been made on account of custom duty pertaining to machinery imported from foreign projects in the earlier years pending settlement of dispute with the Custom Department.

6. During the year the Company has made a provision of Rs. 24.477 million (Rs. 21.920 million) for maintenance of the projects based on evaluation made by the Mangement on substantial completion of the projects.

7. As part settlement of the deferred dues of Iraq Project, the Company received 12.08% Government of India Compensation (Project Exports to Iraq) Bonds 2001 and 12% Export Credit Guarantee Corporation of India Limited Bonds in the year 1994-95. As these bonds are unquoted and also as the Company intends to hold the same till maturity, these investments have been valued at cost i.e., the historical cost has been considered as carrying cost.

8. Sundry debtors include interest receivable cumulative upto 31.3.1997 of Rs. 423.135 million (Rs. 400.111 million), for the year Rs. 3.18 million (Rs. 3.84 million) on the deferred dues for the Iraq projects provided on the LIBOR rate on the bases of the agreement between the Government of India and Iraq which is pending renewal after January, 1991. It also includes interest cumulative upto 31.3.97 Rs. 32.696 million (Rs. 25.306 million) and for the year Rs. 6.135 million (Rs. 7.416 million) for other Iraq projects, based on agreements with clients. Of the above interest recoverable, Company has to pay to its sub-contractors interest on back to back basis cumulative upto 31.3.1997 of Rs. 212.907 million (Rs. 361.452 million), for the year Rs. 20.247 million (Rs. 43.604 million), which is shown under the head "Current Liabilities". Further, of the total amount of Rs. 685.683 million (Rs. 703.328 million), against deferred dues, an amount of Rs. 481.054 million (Rs. 455.293 million) pertains to Iraq Projects, for which the confirmation from Exim Bank is pending because of UN sanctions.

9. The Company has paid Rs. 159.300 million to National Buildings Construction Corporation Limited for the purchase of office accommodation. Due to certain disputes, the matter has been referred to arbitration with the permanent Machinery of Arbitration, Department of Public Enterprises on 12th June, 1996.

10. The income tax pertaining to foreign projects amounting to Rs. 123.890 million (Rs. 369.777 million) is eligible for relief in Indian Income-tax in pursuance of the Income tax Act, 1961, under Double Taxation Avoidance Agreements between the Government of India and the Governments of respective foreign countries.

11. The reconciliation of the material with the clients and sub-contractors is pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

12. In case of NTPC Project at Kahalgaon claim in respect of Rs. 111,458.14 for theft of stores is disputed with the client.

13. The Company as a main contractor had entrusted sub-contracting work in consultation with the client (M/s CIDCO) to M/S National Buildings Construction Corporation Limited, a Public Sector Undertaking. As the contract was terminated on account of slow progress in consultation with the client, various advances granted to the sub-contractor on behalf of the client have remained outstanding amounting to Rs. 103.472 million (Rs. 94.450 million) including interest where applicable. The advances are given against valid bank guarantees. The client has withheld an amount of Rs. 98.328 million as the guarantees could not be encashed due to embargo imposed by the Cabinet Secretariat, Government of India. On representation, the embargo has been lifted vide letter No. COD/12/1997-66 dated 28.7.97 and claims have been lodged with the banks for the encashment of the Bank Guarantee valuing Rs. 60.983 million. The petition filed by NBCC in this regard in the Hon'ble Delhi High Court has been dismissed. A provision for the Balance amount of Rs. 37.345 million has been made in the books during the year.

14. The Company has taken a policy under the Group Gratuity Scheme from Life Insurance Corporation of India. It has paid adhoc premium of Rs. 1.113 million during the year pending determination of final value of the premium by LIC. Adjustment, if any, shall be done on receipt of final amount of premium as determined by LIC.

15. The Company has made short term deposits in non scheduled banks in the foreign countries where long term projects are under implementation. The accounts have been opened with the permission of Reserve Bank of India. The Company has brought out this fact to the notice of Department of Public Enterprises vide letter No. IRCON/DF/Misc/8459 dated 3.1.95, which has issued guidelines for investment of surplus funds by the Public Sector Enterprises.

16. In the case of Aircraft, MOU for the year 1996-97 has not been signed with the Ministry of Railways, Any adjustment accruing in the revenue, which is not likely to be material, upon signing of the MOU will be carried out in due course.

17. Provision is made in the accounts for all known liabilities existing on the date of Balance Sheet. Liabilities not yet crystalized or liabilities whose amount cannot be determined with any reasonable degree of accuracy are not provided for.

18. Debit and Credit balances of parties are subject to confirmation from them.

19. Considering the nature of the business of the Company, the management is of the opinion that provision relating to disclosure of information required by clause 3(ii) of Part II to Schedule VI to the Companies Act, 1956 are not applicable.

20. Previous year's figures have been regrouped, rearranged and recast wherever necessary to conform to current year's classification.

21. Figure in brackets represent previous year's figures.

Mar 31, 1996

1. (i) The translations of the foreign currency accounts have been carried out as per the Company's Accounting Policy No. 2 which is not in line with Accounting Standards-11, as prescribed by the Institute of Chartered Accountants of India. As per Company's Accounting Policy No. 2, the transactions of foreign currency accounts have been converted into Indian currency at the T.T. buying rate prevailing on the last working day of the financial year and surplus from fluctuation in foreign currency treated as reserve (FEFR) during the current financial year also. However, the Institute of Chartered Accountants of India has prescribed the accounting standard, whereby different rates are prescribed for revenue items, valuation of inventories, valuation of fixed assets and fluctuation in foreign currency to be reflexed in Profit and Loss Account.

(ii) The Company proposes to bring its Accounting Policy in line with the Accounting Standard from the Financial Year 1996-97. However, the effect of variations in the Accounting Standard and the Accounting Policy No.2 of the Company is not considered to be significant.

2. (i) The sale/adjustment column of Schedule D is decreased by Rs. 36.88 million (Rs. 492.875 million) in gross block and Rs. 35.128 million (Rs. 490.310 million) in depreciation block on account of translation of foreign exchange rates adopted as on 31.03.1996.

(ii) Variations in previous year's closing balance and current year's opening balance of stocks and work in progress are due to change in translation rates of foreign currency as the opening stock and opening work-in-progress amounting to Rs. 5.67 million and Rs. 15.947 million respectively have been increased.

3. (i) In accordance with the Accounting Standard (AS 7) prescribed by the Institute of Chartered Accountants of India, the Company has changed the Accounting Policy by making provision for contingency including for earlier years in place of transfer to contingency reserve as being followed by the Company earlier. This has resulted in (a) creation of provision for contingency of Rs. 152.337 million for earlier years under prior period adjustments and (b) retrieval of Rs. 13.861 million relating to earlier years with corresponding increase in profit for the year to that extent.

(ii) In compliance with Accounting Standard 4 (AS 4) on contingencies and events occurring after the Balance Sheet date and Accounting Standard 7 (AS 7) on accounting for construction contracts as prescribed by the Institute of Chartered Accountants of India, the Company has made provision of Rs. 299.10 million during the year (last year nil) for foreseeable losses wherever required, based on evaluation made by the Management.

4. During the year, the Company has revised its Accounting Policy towards treatment of Leave Travel Concession. Leave Travel Concession has now been provided on cash basis as against on accrual basis in the previous year. It has resulted in reduction of expenditure by Rs. 3.516 million).

5. During the year the Company has made a provision of Rs. 21.92 million (Rs. 62.511 million) for maintenance of the projects based on evaluation made by the Management on substantial completion of the projects.

6. As per Schedule XIV of the Companies Act, 1956, depreciation in respect of aircraft has been prescribed at 5.6 percent per annum on straightline basis. However, based on the useful economic life of the aircraft, the Management has revised the depreciation rate to 9.5 percent per annum on straightline basis from the current year. As a result, profit for the year has been understated by Rs. 5.503 million and net block by Rs. 10.403 million.

7. As part settlement of the deferred dues of Iraq project, the Company has received 12.08% Government of India compensation (project exports to Iraq) bonds 2001 and 12% Export Credit Guarantee Corporation of India Limited bonds in the year 1994-95. As per Accounting Standard 13 (AS 13) prescribed by the Institute of Chartered Accountants of India, the carrying amount of long term investments is to be reduced o recognise the decline. As there is no market quotations available for these bonds and also as the Company intends to hold the same till maturity, these investments have been valued at cost i.e., the historical cost has been considered as carrying cost.

8. Sundry debtors include interest receivable cumulative upto 31.3.1996 Rs. 400.111 million (Rs.364.868 million), for the year Rs. 3.84 million (Rs. 33.494 million) on the deferred dues for the Iraq projects provided on the LIBOR rate on the basis of the agreement between the Government of India and Iraq which is pending renewal after January, 1991. It also includes interest cumulative upto 31.3.96 Rs. 25.306 million (Rs. 16.472 million) and for the year Rs. 7.416 million (Rs. 4.074 million) for other Iraq projects, based on agreements with clients. Of the above interest recoverable, Company has to pay to its sub-contractors interest on back to back basis cumulative upto 31.3.96 Rs. 361.452 million (Rs. 317.545 million), for the year Rs. 43.604 million (Rs. 95.755 million), which is shown under the head "Current Liabilities". Further of the total amount of Rs. 703.528 million (Rs. 726.084 million), against deferred dues, an amount of Rs. 455.293 million (Rs. 415.676 million) pertains to Iraq Projects, for which the confirmation from Exim Bank is pending because of UN sanctions.

9. (a) As per the Accounting Policy of the Company, on completion of a foreign project, the balance lying in Foreign Exchange Fluctuation Reserve account (FEFR) relating to that project is to be transferred to Profit & Loss account. However, in the case of Iraq projects, due to non payment of dues by the Govt. of Iraq, the FEFR pertaining to these projects could not be transferred to Profit & Loss account in the earlier years. During the year 1994-95, Govt. of India took over the deferred Iraq dues based on the amounts outstanding on 17.11.93 as per books of Exim Bank and settled these dues on 31.3.95 by issue of 12.08% Govt. of India compensation (project exports to Iraq) bonds 2001 and 12% bonds of Export Credit and Guarantee Corporation of India Ltd. In view of the special circumstances, the Board of Directors took decision during 1994-95 that the retrieval of FEFR pertaining to Iraq projects be linked with the realisation of bonds. In response to Company's petition to Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, CBDT vide its circular No. F. 225/16/95/ITA. II dated 7.5.96 decided that the foreign exchange fluctuation gain included in the value of bonds is assessable in the hands of the company in the financial year 1994-95. Since, the accounts for the year 1994-95 were already closed by this date, the above gain of Rs. 1,234.279 million has been accounted for in the year 1995-96 as per prior period income along with corresponding income-tax provision. CBDT vide its circular No.F275/144/96 IT (B) dated 26.6.96 has further clarified that the interest leviable under section 234B & 234C due to delayed payment of the taxes on the above sum could be waived by the Chief Commissioner of Income-tax. Accordingly, Company has been advised to apply for waiver of interest In view of this, no provision of interest on delayed payment of taxes has been made and an application for waiver of interest is made by the Company.

(b) The amounts payable to sub-contractors on account of Iraqi projects are on back to back basis with the amount receivable by the Company from the client. To the extent the amount receivables were settled during the year 1994- 95, the corresponding amounts payable to sub-contractors also crystalised on the same terms. Accordingly the amount receivable, payable and corresponding foreign exchange fluctuation reserve existing as on March 31, 1995 are translated into Indian rupee at the T.T. buying rate prevailing as on March 31, 1995.

10. The income-tax pertaining to foreign projects amounting to Rs. 47.315 million (Rs. 23.543 million) is eligible for relief in Indian Income-tax in pursuance of the Income tax Act, 1961, under double taxation avoidance agreements between the Government of India and the Governments of respective foreign countries.

11. The Company has paid Rs. 159.300 million to National Building Construction Corporation Limited for the purchase of office accommodation. Due to certain disputes, the matter has been referred to arbitration with the Permanent Machinery of Arbitration, Department of Public Enterprises on 12th June, 1996.

12. The reconciliation of the material with the clients and sub-contractors are pending in some of the cases. The liability, if any, arising from the reconciliation of materials, will be accounted for in the year of settlement.

13. Debit and credit balances of parties are subject to confirmation.

14. Considering the nature of the business of the Company, the management is of the opinion that provision relating to disclosure of information required by clause 3 (ii) of Part II to Schedule VI to the Companies Act, 1956 are not applicable.

Mar 31, 1995

The Directors have also been provided with Company's accommodation/leased accommodation/House Rent Allowance and use of car, for which recoveries, as applicable, have been made. The value of perquisites as per income-tax Rules is Rs. 1520 (Rs. Nil).

6. The tax paid in foreign countries amounting to Rs. 235.43 Iakhs (Rs. 466.50 lakhs) is eligible for relief in Indian Income-tax in pursuance of the Income tax Act, 1961, under Double Taxation Avoidance Agreements between the Government of India and the Governments of respective foreign countries.

7. Sundry debtors includes amounts aggregating Rs. 763.69 Iakhs (Rs. 674.30 Iakhs) being the contract addition on the material supplied by the client and other items which have been disputed by the client. As the matter is still being negotiated with the client a total provision of Rs. 355 Iakhs (Rs. 320 lakhs) has been kept as the Company considers available provisions sufficient for meeting liability, if any, on the final settlement.

8. The adjustment column of Schedule D is decreased by Rs. 4928.75 Iakhs (Rs. 86.04 lakhs) in gross block and Rs. 4903.10 Iakhs (Rs. 58.81 Iakhs) in depreciation block on account of translation of foreign exchange rates adopted as on 31.3.1995.

9. Sundry debtors include interest receivable cumulative up to 31.3.1995 Rs. 2,740.30 Iakhs (Rs. 3,001.33 lakhs), for the year Rs. 25.23 Iakhs (Rs. 793.33 Iakhs), on the deferred dues for the Iraq projects provided on the LIBOR rate on the basis of the agreement between the Governments of India and Iraq which is pending renewal after January, 1991. Of the above interest recoverable, Company has to pay to its sub-contractors interest on back to back basis cumulative upto 31.3.1995 Rs. 1,071.12 lakhs (Rs. 1,071 lakhs), for the year Rs. Nil Iakhs (Rs. 258.90 Iakhs), which is shown under the head "Current Liabilities". Further, of the total amount of Rs. 7260.89 lakhs appearing under deferred dues an amount of Rs. 4156.08 lakhs represents dues against IRAQ Project which is pending confirmation by EXIM Bank.

10. On completion of a project, the balance lying in Foreign Exchange Fluctuation Reserve (FEFR) Account pertaining to that project is transferred to Profit and Loss account. However, in case of Iraq projects, the deferred dues recoverable against contracts could not be repatriated to India due to imposition of UN sanctions against Iraq, so the FEFR pertaining to Iraq projects was not transferred to Profit and Loss account in the earlier years. However, now the Government of India has taken over all liabilities pertaining to deferred dues against construction contracts, based on amounts outstanding as on 17.11.1993 as per books of EXIM Bank, and these dues have since been settled by issue of 12.08% Government of India compensation (Project Exports to Iraq) Bonds 2001 by Reserve Bank of India and 12% Bonds of Export Credit & Guarantee Corporation of India Ltd. In view of special circumstances of the case, the Directors have taken a conscious decision to defer retrieval of the Foreign Exchange Fluctuation Reserves amounting is Rs. 12612.52 lakhs pertaining to Iraq Projects to a future date linked with the realisation of deferred dues and Bonds.

11. In view of special circumstances, the amount of non-repatriable portion of work receipt of Iraqi Dinar (ID) 2,09,457 (equivalent to Rs. 10,473) cumulative ID 5,75,329 (equivalent to Rs. 28,766) on account of reparation work has not been considered in one of the foreign projects.

12. During the year, the company has revised its Accounting Policy towards treatment of Leave Encashment and Leave Travel Concession. Leave Encashment and Leave Travel Concession have now been provided on accrual basis as against on cash basis in earlier years. It has resulted in additional expenditure of Rs. 101.17 Iakhs.

13. The Company has revised its Accounting Policy towards Foreign Exchange Fluctuation Reserve (FEFR) during the year. Accordingly debit balance due to exchange difference during and upto the year 1994-95 is debited to Profit & Loss account. Further on completion of projects, the credit balance lying in FEFR account pertaining to those projects has also been transferred to Profit and Loss account to the extent it exceeds the Foreign Exchange Fluctuation Reserve amount pertaining to receivables from the' client. This has resulted in reduction of profit by Rs. 610.26 lakhs during the year.

14. In consonance with the revision in Accounting Policy relating to translation of Foreign Exchange transaction for Iraq Projects, expenditure and non-repatriable portion of Iraqi Dinar are translated on the market rate prevalent at the end of financial year as against agreement rates followed in the earlier years. It has resulted in the reduction of Foreign Exchange Fluctuation Reserve by an amount of Rs. 1367.78 lakhs.

15. During the year the Company has made a provision of Rs. 625.11 lakhs for maintenance of the projects based on evaluation made by the project incharges on substantial completion of the projects.

16. Debit and Credit balances of parties are subject to confirmation.

17. a) Final bills for Railway Electrification project amounting to Rs. 73.38 lakhs (Rs. 73.38 lakhs) have not been certified by the clients.

b) The reconciliation of the material with the clients and sub-contractors are pending in some of the cases.

The liability, if any, arising from the certification of bills and reconciliation of materials, will be accounted for in the year of settlement.

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