IVRCL Infrastructure and Projects

Company overview
 
 The Company, IVRCL Infrastructures & Projects Limited, is engaged in
 the business of development and execution of Engineering Procurement,
 Construction and Commissioning (EPCC) and Lump Sum Turn Key (LSTK)
 facilities in various Infrastructure projects like Water Supply, Roads
 and Bridges, Townships and Industrial Structures, Power Transmission,
 etc for Central/State Governments, other local bodies and private
 sector in the country.
 
 1. All amounts in the financial statements are presented in Rupees in
 million except per share data and as other wise stated. Figures in
 brackets represent corresponding previous year figures in respect of
 Profit and Loss items, and in respect of Balance Sheet items as on the
 Balance Sheet date of the previous year. Figures for the previous year
 have been regrouped /rearranged wherever considered necessary to
 conform to the figures presented in the current year.
 
 2.  a) During the year, the Company has issued 2,000, 12.15% Secured
 Non Convertible Redeemable
 
 Debentures @ Rs.10,00,000 each to Life Insurance Corporation of India.
 IDBI Trusteeship Services Ltd, Mumbai are the trustees forthe debenture
 holders. The debentures shall be redeemed at the end of five years from
 the date of allotment. The debentures are secured with asset cover of
 1.25 times by way of first pari passu charge over certain specificfixed
 assets including immovable properties of the Company.
 
 The debentures are listed on Wholesale Debt Market (WDM) segment of
 National Stock Exchange (NSE).
 
 b) Rs.100 million has been set aside towards redemption of these
 debentures and is carried as part of Reserves & Surplus.
 
 3.  No option for conversion of bonds into equity shares has been
 exercised by any Foreign Currency Convertible Bond holders during the
 year. Rs.80.72 million has been debited to the Profit and Loss account
 during the year towards foreign exchange translation difference on
 Foreign Currency Convertible Bonds.
 
 4.  Contigent Liabilities:
 
 						       (Rs. in million)
 
 					    As at               As at 
 					March 31, 2009   March 31, 2008
 
 4.1 Bank Guarantees/Letters of Credit 
 		 issued by the banks        23,159.17      16,999.23 
 on behalf of the company
 
 Corporate Guarantees issued by the 
  Company on behalf of its                    2,055.00       2,087.44 
  subsidiaries and others
 
 Claims against the Company not 
 	acknowledged as debts                   73.46          18.50
 
 Income Tax demand contested in appeal           14.13          14.13
 
 Disputed Sales Tax/Service Tax 
 (on appeal) Gross                              152.58           8.30
 
 4.2 The Company has claimed deduction under Section 80 IA of the Income
 Tax Act, 1961 in respect of profits and gains derived from the
 development of infrastructure facilities. The claims of the Company
 have been disputed by the Tax Authorities and the matters are pending
 before different forums including Income Tax Appellate Tribunal (ITAT).
 Further, the Honorable Special Bench of ITAT vide its order dated
 25.04.2008 had remanded back the case for the AY 2001-02 to the
 Assessing Officer with a direction to consider the allowability of the
 deduction under section 80 IA of the Act on the basis of material
 information already on record and additional evidences submitted/to be
 submitted by the Company. The matter is pending before the Assessing
 Officer. The Company, being a developer of infrastructure facilities,
 has been advised that its claims are tenable. Accordingly the tax
 provision for the year has been determined on the basis that the claim
 under Section 80 IA of the Act is available to the Company and the tax
 effect amounting to Rs.1,409.03 million (Rs.1,035.52 million up to
 31.03.2008) in respect of claim of the Company (including
 disallowances) up to March 31, 2009 has not been provided. However, the
 Company, as a measure of abundant precaution has appropriated and set
 aside an amount of Rs.1,411 million (Rs.1,036 million) including Rs.375
 million for the year to a Special Reserve.
 
 4.3 Estimated amount of contracts to be executed on capital account
 Rs.65.70 million (Rs.352.63 million).
 
 5.  Segment Reporting:
 
 Business Segment: The Company has considered Engineering &
 Construction as one business segment for disclosure in the context of
 Accounting Standard 17 notified in Section 211 (3C) of the Companies
 Act, 1956. The Company is engaged in the business of Engineering &
 Construction segment only for the year under report.
 
 Geographical Segment:
 
 During the year under report, the Company has engaged in its business
 only within India and not in any other Country. The conditions
 prevailing in India being uniform, no separate geographical disclosure
 is considered necessary.
 
 6.  Employee Share based Plan
 
 1.  Method used for accounting for share based plan:
 
 The Company has used intrinsic value method to account for the
 compensation cost of stock option to employees of the Company.
 Intrinsic value is the amount by which the quoted market price of the
 underlying stock exceeds the exercise price of the option. The total
 intrinsic value of the options granted during the year is recognised as
 deferred compensation expense with a corresponding liability as Stock
 Options.
 
 Deferred employee compensation expense is amortised on a straight line
 basis over a vesting period of the option granted.
 
 2.  ESOP 2000 Scheme
 
 During the previous year, 15,000 option relating to ESOP 2000 Scheme
 were granted to certain executives of the company at a single exercise
 price of Rs.2 per stock option with a vesting period of one year. The
 said option holders exercised their options during the year and
 consequently 15,000 equity shares were allotted to them.
 
 An amount of Rs.1.11 million (Rs.85.37 million) is charged as Employee
 compensation expense.
 
 7.  During the year, the Company entered into certain derivative
 transaction in steel and crude oil. The net loss from the transactions
 of Rs.2.36 million have been charged to the Profit and Loss account
 under the head Administrative and Other Expenses.
 
 8.  Sundry Debtors includes claims to the tune of Rs.506.13 million
 receivable from certain contractee clients. The claims are on account
 of deviation in design, additional overheads, interest due to overstay
 and idle cost. The claims are considered realisable based on subsequent
 favorable developments arising out of continuous contract management
 steps taken by the Company.
 
 9.  Sundry Debtors are stated net of mobilisation advance amounting to
 Rs.1,999.90 million (Rs.1,754.90 million).