Board of Directors

Compiled by : Asian CERC Informtion Technology Ltd.
BOARD OF DIRECTORS
E.Sudhir Reddy Chairman & Managing Director
R.Balarami Reddy Director Finance & Group CFO
K.Ashok Reddy Director Resources
E.Ella Reddy Director
E.Sunil Reddy Director
T.N.Chaturvedi Director
T.R.C.Bose Director
S.K.Gupta Director
P.R.Tripathi Director
Company Secretary Bankers

G.Ramakrishna Rao
ABN AMRO Bank
Statutory Auditors Andhra Bank
Canara Bank
M/s. Chaturvedi & Partners Centurion Bank of Punjab Limited
Chartered Accountants Citi Bank N.A
203, Kushal Bazar Corporation Bank
32-33, Nehru Place Export-Import Bank of India
New Delhi 100 019 ICICI Bank Ltd.
IDBI Bank Limited
M/s. Deloitte Haskins & Sells Indian Overseas Bank
Chartered Accountants ING Vysya Bank Ltd.
Coromandel House Karnataka Bank Ltd.
1-2-10, Sardar Patel Road Lakshmi Vilas Bank Ltd.
Secunderabad 500 003 Lord Krishna Bank Ltd.
Oriental Bank of Commerce
Standard Chartered Bank
Internal Auditors State Bank of India
State Bank of Indore
T.Vijay Kumar State Bank of Hyderabad
Chartered Accountant State Bank of Mysore
Plot # 101, Jyothi Pride Apts. Syndicate Bank
P.S.Nagar, Masab Tank Tamilnad Mercantile Bank Ltd.
Hyderabad 500 028 Union Bank of India
United Bank of India
Registered Office United Western bank Limited
UTI Bank Limited
M-22/3RT, Vijaynagar Colony YES Bank Limited
Hyderabad 500 057
Ph : 91-40-2334 3678 / 3550 / 8467 / 5130
Fax : 91-40-2334 5004
Registrars and Transfer Agents
M/s. KARVY Computershare Private Ltd.

Karvy House, 46, Avenue 4, Street No.1
Banjara Hills, Hyderabad 500 034
1
CONTENTS
Board of Directors One
Performance at a glance Three
Notice Four
Directors' Report Nine
Management Discussion & Analysis Twenty Two
Report on Corporate Governance Forty Nine
Auditors' Report Sixty Two
Balance Sheet Sixty Seven
Profit and Loss Account Sixty Eight
Cash Flow Statement Sixty Nine
Schedules Seventy One
Consolidated Financial Statements Ninety Five
Accounts of Subsidiary Companies :
Hindustan Dorr-Oliver Limited One Hundred and Twenty Three
IVR Prime Urban Developers Limited One Hundred and Sixty
FORWARD LOOKING STATEMENTS

This communication contains statements that constitute "forward looking statements" including, without limita-
tion, statements relating to the implementation of strategic initiatives, and other statements relating to our future
business developments and economic performance.
While these forward looking statements represent our judgements and future expectations concerning the
development of our business, a number of risks, uncertainties and other important factors could cause actual
developments and results to differ materially from our expectations.
These factors including but are not limited to, general market, macro-economic, governmental and regulatory
trends, movements in currency exchange and interest rates, competitive pressures, technological develop-
ments, changes in the financial conditions of third parties dealing with us, legislative developments, and other
key factors that have been indicated could adversely affect our business and financial performance.
IVRCL undertakes no obligation to publicly revise any forward looking statments to reflect future events or
circumstances.
2
PERFORMANCE AT A GLANCE
(Rs. in Million)
Particulars 2005-06 2004-05 2003-04 2002-03 2001-02 2000-01 1999-00 1998-99 1997-98
Turnover 15214.23 10547.33 7734.53 4403.49 3919.96 2671.93 2116.40 1094.80 762.90
Profit Before Tax 1037.25 594.67 427.12 240.06 199.22 153.79 138.84 74.38 60.36
Profit After Tax 929.55 567.08 391.81 155.09 130.94 128.06 90.55 54.01 43.25
Equity Capital 213.88 169.80 106.19 105.06 104.44 104.44 61.44 30.48 30.47
Reserves & Surplus 4556.25 2406.58 1247.87 913.82 796.05 750.71 265.24 218.72 175.74
Net Worth 4770.13 2576.38 1354.06 1018.88 900.49 855.15 326.68 249.20 206.21
Gross Block 1580.10 1107.10 964.34 898.60 755.18 496.44 333.74 279.58 223.41
Net Block 1107.35 741.03 672.97 703.94 644.74 404.02 250.85 219.66 182.61
Book Value (Rs.) 44.61 151.74 127.50 96.98 86.22 81.88 53.17 81.76 67.68
per share
EPS (Rs.) Basic 8.84 33.56 37.04 14.85 12.54 12.26 14.73 17.72 14.19
Dividend 50% 30% 30% 30% 30% 30% 30% 30% 30%
The Book Value and EPS are per share of Rs.2/-, for the year 2005-2006 while the previous years figures indicate per share of
Rs.10/-. Each equity share of Rs. 10/- was sub-divided into five equity shares of Rs. 2/- each with effect from 4th March, 2006.
3
NOTICE TO SHAREHOLDERS
Notice is hereby given that the Nineteenth Annual SPECIAL BUSINESS:
General Meeting of the Members of IVRCL
Infrastructures & Projects Ltd., will be held at Hotel 7. To appoint Mr. S.K. Gupta as a Director of the
Fortune Katriya, Somajiguda, Raj Bhavan Road, Company.
Hyderabad, at 4.00 PM on Friday the 29th day of
September, 2006 to transact the following business: To Consider, and if thought fit, to pass with or
without modifications the following resolution
ORDINARY BUSINESS: as an Ordinary Resolution:
1. To receive, consider and adopt the Profit & Loss Resolved that Mr. S.K. Gupta be and is hereby
Account for the year ended March 31, 2006, the appointed Director of the Company liable to retire
Balance Sheet as at that date and the Reports of by rotation.
the Board of Directors and the Auditors attached
thereto. 8. To appoint Mr. P.R. Tripathi as a Director of the
Company.
2. To declare dividend.
To Consider, and if thought fit, to pass with or
3. To appoint a Director in place of Mr.E.Sunil Reddy, without modifications the following resolution
who retires by rotation under Art. 121 of the as an Ordinary Resolution:
Articles of Association of the Company and being
eligible offers himself for reappointment. Resolved that Mr. P.R.Tripathi be and is hereby
appointed Director of the Company liable to retire
4. To appoint a Director in the place of Mr. T.N. by rotation.
Chaturvedi, who retires by rotation under Art.121
of the Articles of Association of the Company and 9. To confirm the remuneration paid to Mr. R.
being eligible offers himself for re-appointment. Balarami Reddy, Director-Finance & Group CFO.
5. To appoint a Director in the place of Mr. E. Ella To Consider, and if thought fit, to pass with or
Reddy, who retires by rotation under Art.121 of without modifications the following resolution
the Articles of Association of the Company and as a Special Resolution:
being eligible, offers himself for reappointment.
RESOLVED that the remuneration paid to Mr. R.
6. To appoint Auditors and fix their remuneration. Balarami Reddy, Director- Finance& Group CFO
for the period 01.04.2006 to 30.06.2006 as
To consider and pass the following resolution with detailed hereunder be and is hereby confirmed.
or without modifications as an Ordinary
Resolution: 1. Salary Rs. 1,47,850/- p.m.
2. Leave Travel Assistance at the rate of one months
Resolved that M/s Deloitte Haskins & Sells,
basic salary per annum.
Chartered Accountants, and M/s Chaturvedi &
Partners, Chartered Accountants, the retiring 3. Reimbursement of Medical expenses at the rate
Auditors be and are hereby reappointed as of one months basic salary per annum.
Statutory Auditors of the Company to jointly hold
4. Exgratia of one and half times the monthly gross
office till the conclusion of next annual general
salary per annum at the discretion of the
meeting and that the Board of Directors of the
Compensation Committee / Board.
Company be and is hereby authorised to fix the
remuneration payable to them. 5. Provident Fund at the rate of 12% of basic salary
per annum.
4
6. Super-annuation benefits equivalent to one 1. Salary Rs. 1,46,300/- p.m.

months basic salary per annum at the discretion
of the Compensation Committee of the Board of
Directors.
3. Reimbursement of Medical expenses at the rate
7. Provision of Car in accordance with the Employee
of one months basic salary per annum.
Car Scheme formulated by the Compensation
Committee and as amended from time to time. 4. Exgratia of one and half times the monthly gross
FURTHER RESOLVED that Mr. R Balarami Reddy, Compensation Committee / Board.
Director Finance & Group CFO be paid the following 5. Provident Fund at the rate of 12% of basic salary
remuneration for the period from 01.07.2006 to per annum.
31.03.2007 and that his remuneration be increased
from 01.04.2007 till such time as he continues to be a 6. Super-annuation benefits equivalent to one
Director liable to retire by rotation as may be decided months basic salary per annum at the discretion
by the Compensation Committee subject to the of the Compensation Committee of the Board of
confirmation of the Members at the immediately Directors.
following general Meeting. 7. Car facility in accordance with the Employee Car
Scheme formulated by the Compensation
1. Salary Rs. 147,850/- p.m. Committee and as amended from time to time.
basic salary per annum. FURTHER RESOLVED that Mr. K Ashok Reddy,
Director Resources be paid the following
3. Reimbursement of Medical expenses at the rate remuneration for the period from 01.07.2006 to
of one months basic salary per annum. 31.03.2007 and that his remuneration be increased
4. Exgratia of one and half times the monthly gross from 01.04.2007 till such time as he continues to be a
salary per annum at the discretion of the Director liable to retire by rotation as may be decided
Compensation Committee / Board. by the Compensation Committee subject to the
confirmation of the Members at the immediately
5. Provident Fund at the rate of 12% of basic salary
following general Meeting.
per annum.
6. Super-annuation benefits equivalent to one 1. Salary Rs. 1,46,300/- p.m.
months basic salary per annum at the discretion
Directors.
3. Reimbursement of Medical expenses at the rate
7. Car facility in accordance with the Employee Car
of one months basic salary per annum.
Scheme formulated by the Compensation
Committee and as amended from time to time. 4. Exgratia of one and half times the monthly gross
10. To confirm the remuneration paid to Mr. K. Compensation Committee / Board.
Ashok Reddy as Director- Resources. 5. Provident Fund at the rate of 12% of basic salary
per annum.
To Consider, and if thought fit, to pass with or
without modifications the following resolution as 6. Super-annuation benefits equivalent to one
a Special Resolution: months basic salary per annum at the discretion
RESOLVED that the remuneration paid to Mr. Directors.
K.Ashok Reddy, Director- Resources for the period 7. Car facility in accordance with the Employee Car
01.04.2006 to 30.06.2006 as detailed hereunder Scheme formulated by the Compensation
be and is hereby confirmed. Committee and as amended from time to time.
5
11. To amend Clause V of the Memorandum of 4. Members, who hold shares in dematerialized
Association of the Company. form, are requested to bring their depository
account number (Client ID No) for easier
To Consider, and if thought fit, to pass with or identification and recording of attendance at the
without modifications the following as Special meeting.
Resolution:
5. The Register of Members and Share Transfer
RESOLVED THAT the following words and clauses Books of the Company shall be closed from
be added to the existing Capital clause V of the 26.09.2006 to 29.09.2006, both days inclusive.
Memorandum of Association of the Company:
6.(a) After declaration of dividend at the Annual
with a right to increase and reduce the capital General Meeting, the Dividend Warrants / Pay
and divide the shares in the capital for the time Orders/ Drafts for the dividend amount are
being into several classes subdivide the face value scheduled to be posted October 15, 2006
of the shares, issue warrants entitling the holders onwards to the members, whose names appear
for shares and to attach thereto respectively such on the Register of Members on close of business
preferential, deferred, qualified or special rights, hours on 25th September, 2006. In respect of
privileges or conditions as may be determined shares held in electronic form, the dividend will
under the provisions of the Companies Act, 1956. be paid on the basis of beneficial ownership, as
per details to be furnished for this purpose by
By order of the Board of Directors National Securities Depository Limited and
Central Depository Services (India) Limited. Any
Registered Office : (G. Rama Krishna Rao) change in details of Bank Account may be
M-22/3RT, COMPANY SECRETARY provided directly to the depositories and the
Vijaynagar Colony, Company will not entertain such requests.
Hyderabad:500057
Date: July 31, 2006. 6(b) The dividend declared for the earlier years and
outstanding in the unpaid / unclaimed dividend
NOTES: account will be transferred to the Investor
Education & Protection Fund Account. The
1. A member entitled to attend and vote at the shareholder not claimed earlier may claim the
above meeting is entitled to appoint one or more same.
proxies to attend and vote instead of himself and
the proxy need not be a member of the Company. 7. The dividend will be paid through ECS in respect
The proxy forms should be deposited at the of share holders having demat accounts, to the
Registered Office of the Company at least 48 credit of relative bank accounts as furnished by
hours before the commencement of the meeting the depositories.
to be valid.
8. Members who desire the amounts to be credited
2. The Explanatory statement pursuant to Section by way of dividend warrants and would like to
173(2) of the Companies Act, 1956, setting out have their bank account details incorporated in
all material facts in respect of Items 7 to 11 of their dividend warrants may please furnish the
the Notice is attached and the Statement of (i) Folio Nos. (ii) Name and address of sole/first
particulars of Directors seeking reappointment shareholder (iii) Bank Account No. (with prefix
under Cl.49 of the listing agreement is enclosed. SB/CA etc) (iv) Name of the bank and branch (iv)
Full address of the Bank with Pin Code.
3. Members may please bring the Admission Slip
duly filled in and may hand over the same at the
entrance to the Meeting Hall.
6
Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956,
ITEM NO. 3, 4, 5, 7&8. Memorandum of Interest: None of the Directors

In compliance with corporate governance except Mr. R.Balarami Reddy is interested in the
regulations, the particulars of the Directors being above resolution.
appointed and/ or reappointed are furnished in
Annexure- A and the attendance of the retiring ITEM NO: 10
Directors at the Board Meetings and the Confirmation of the remuneration paid /payable
Committees thereof held during the financial year to Mr. K. Ashok Reddy as Director- Resources.
ending 31st March, 2006, is given in Annexure B. At the meeting of the Compensation Committee
of the Board of Directors held on 2nd June, 2006
ITEM NO: 7 the remuneration payable to Mr.K. Ashok Reddy
Mr. S.K.Gupta was co-opted as an Additional was increased and fixed as stated in the
Director of the Company on 07.07.2006 and he resolution. Hence, Item No. 10 is proposed for
will hold the office until the conclusion of this consideration of Members.
Annual General Meeting. The Company has
received individual notices along with requisite The Board recommends the above resolution for
deposits proposing him for being elected as adoption by the Members.
Director liable to retire by rotation. Memorandum of Interest: None of the Directors
Hence, Item No. 7 is proposed for consideration except Mr. K. Ashok Reddy is interested in the
of Members. above resolution.
Memorandum of Interest: None of the Directors ITEM NO: 11

except Mr. S.K.Gupta is interested in the above Amendment of Clause V of the Memorandum of
resolution. Association of the Company.
ITEM NO: 8
Mr. P.R.Tripati was co-opted as an Additional The Capital clause of the Memorandum of
Director of the Company on 07.07.2006 and he Association was altered sub dividing the face
will hold the office until the conclusion of this value of each equity and preference share from
Annual General Meeting. The Company has Rs. 10/- to five shares of Rs. 2/- each. However,
received individual notices along with requisite the Memorandum of Association of a Company
deposits proposing him for being elected as should contain a provision to increase and/or
Director liable to retire by rotation. reduce the Capital and divide the shares in the
capital for the time being into several classes,
Hence, Item No. 8 is proposed for consideration subdivide the face value of the shares, issue
of Members. warrants entitling the holders for shares and to
Memorandum of Interest: None of the Directors attach thereto respectively such preferential,
except Mr. P.R.Tripathi is interested in the above deferred, qualified or special rights, privileges
resolution. or conditions as may be determined under the
provisions of the Companies Act, 1956.
ITEM NO: 9
Confirmation of the remuneration paid /payable Hence, the Board of Directors commends the above
to Mr. R.Balarami Reddy as Director- Finance. resolution for adoption by the members.
At the meeting of the Compensation Committee
of the Board of Directors held on 2nd June, 2006 Memorandum of Interest: None of the Directors is
the remuneration payable to Mr. R.Balarami interested in the above resolution.
Reddy was increased and fixed as stated in the
resolution. Hence, Item No. 9 is proposed for
consideration of Members. Regd. Office: By order of the Board of Directors
M-22/3RT,
The Board recommends the above resolution for Vijayanagar Colony, (G. RAMA KRISHNA RAO)
adoption by the Members. Hyderabad: 500 057. COMPANY SECRETARY
Dated: July 31, 2006
7
A nnexure- A
D etails of the D irectors Seeking appointm ent / re-appointm ent at the forthcom ing A nnual G eneral M eeting.
(Pursuant of C lause 49 of the Listing A greem ent)
N am e of D irector M r. E.Sunil R eddy M r.T.N .C haturvedi M r.E.Ella R eddy M r.S.K .G upta M r. P.R .Tripati
D ate of B irth 21.07.1961 15.01.1959 18.08.1933 18.08.1938 24.06.1943
D ate of A ppointm ent 04.04.1990 16.06.2000 15.09.1999 02.06.2006 as 02.06.2006 as
A dditional D irector A dditional D irector
Expertise in Specific H e has rich experience H e has nearly tw enty A dvocate w ith 28 years D irectorate in Expert in M ining
functional areas in legal and litigation years of experience in of standing experience. M etallurgical planning, O peration and
m atters. the field of auditing Engineering held various C om plete m anagem ent
corporate and financial M anagem ent positions of m inera l project in
restructuring, Public in A cadem ic and Iron O re, D iam ond,
issues, M ergers, taxation Industrial Institutions Lim estone etc.
and other legal issues. and is an U N ESC O
Fellow .
Q ualifications B .C om , B L. B .C om , FC A B A , B L. B .Sc (M at. Eng), B .Sc.(H on.), A .I.S.M
Ph.D .(Tech.), (M ining), F.C .C .(C oal&
D .Sc(Tech.) M etal)
List of Public C om panies 1. H industan D orr- 1. Perfect Pack Ltd., 1. JSW Steel Ltd 1. H industan D orr-
in w hich O liver Ltd N il- 2. Jindal Saw Ltd O liver Ltd
outside/D irectorship 2. IV R Prim e U rban 2. O rient A brasives Ltd 3. Jindal South w est 2. R aipur A lloys &
held as on 31.07.2006 D evelopers Ltd., 3. U niversal C ylinders holdings ltd Steel Ltd
3. Palladium Ltd. 4. V esuvius India Ltd. 3. Jhagadia C opper
Infrastructures 4. A B C orp. Ltd 5. H M T Ltd. Ltd.
& Projects Lim ited 5. H industan D orr- 6. Encore Softw are Ltd. 4. K rishnapatnam Port
4.Indus Palm s H otels& O liver Ltd 7. B huw alka Steel C om pany Ltd
8
R esorts Ltd 6. IV R C L R oad Toll Industries Ltd.
H oldings Ltd. 8. IV R C L Steel
C onstruction &
Services Ltd
C hairm an / M em ber of 1. H industan D orr 1. O rient A brasives Ltd 1. H industan D orr
the C om m ittees of the O liver Lim ited C hairm an: N il- N il- O liver Lim ited
B oard of the Public A udit C om m ittee C hairm an:
C om panies on w hich he M em ber: C om pensation R em uneration
is a D irector as on R em uneration C om m ittee C om m ittee
31.07.2006. C om m ittee M em ber: M em ber:
Share Transfer A udit C om m ittee
C om m ittee
2. H industan D orr-
O liver Lim ited
C hairm an:
A udit C om m ittee
Annexure- B
Sl. No. Name of the Director Board Meetings

Held Attended
1. Mr. E.Sunil Reddy 9 9
2. Mr. T.N.Chaturvedi 9 9
3. Mr. E.Ella Reddy 9 Nil
DIRECTORS REPORT
To
The Members
The Directors have pleasure in presenting the 19th Annual Report and Audited Accounts for the financial year
ended 31st March 2006.
The performance of the Company for the financial year ended 31st March, 2006, is summarized below:
1. FINANCIAL RESULTS
Rs. in million
Year ended Year ended

31.03.2006 31.03.2005
Gross Turnover 15214.23 10547.33

Profit before Interest, Depreciation, 1400.35 889.00
Extraordinary items & Tax
Less : Interest & Finance Charges 253.13 214.10
Less : Depreciation 109.97 80.23
Profit before tax 1037.25 594.67
Provision for tax 107.70 27.59
Profit after tax (PAT) 929.55 567.08
Balance brought forward from previous year 419.73 324.44
Profit availble for appropriation 1349.28 891.52
Appropriations :
Transfer to General Reserve 500.00 400.00
Proposed Dividend on existing shares 108.82
Short provision of previous year 1.20 110.02 62.96
Corporate Dividend Tax :
Current year 15.26
Short provision for previous year 0.17 15.43 8.83
Total 625.45 471.79
Balance carried to Balance Sheet 723.83 419.73
9
2. DIVIDEND Sl.No. Name of the Orders on %

Division hand
Your Directors have pleasure in recommending a (Rs. in million)
dividend of 50% i.e. Re.1/- per share of Rs.2/- each
(last year Rs.3/- per share of Rs.10/- each) on 1 Water Division 35,035.50 52.40
108,818,245 equity shares of Rs.2/- each for the 2 Roads & Bridges 17,986.20 26.90
financial year ended 31st March, 2006, which if
approved at the ensuing Annual General Meeting, will 3 Building Division 9648.80 14.43
be paid to all those members whose names appear in
the Register of members as on the close of business 4 Power 4195.10 6.27
hours on 25 th September, 2006 and to all those
TOTAL 66865.60 100.00
shareholders whose names appear on that date as
beneficial owners in the list furnished by National
Water related projects continue to be the core
Securities Depository Limited and Central Depository
competence of the Company accounting for 52.40%
Services Limited. The dividend payable will result in
of the total works. In addition to this, the Power
an outgo of Rs.124.08 million including the corporate
Division has substantially improved its performance
dividend tax of Rs.15.26 million.
during the period under review. Further, setting up of
a unit for manufacturing transmission tower parts is
The dividend pay out for the year under review is in
under progress and is scheduled to go into production
accordance with the Companys policy of consistent
during the last quarter of the current financial year
dividend keeping in view the Companys need for
adding value to the operations of Power Division.
capital, its growth plans and the intent to finance such
plans through internal accruals to the maximum.
The strong order book position coupled with thrust
given by the Government for Infrastructure sector
3. RESERVES
augurs a bright future for your Company as one of the
top engineering companies involved in the
It is proposed to transfer Rs.500.00 million to the infrastructure development.
General Reserves of the Company.
6. JOINT VENTURES :
4. REVIEW OF PERFORMANCE: YET ANOTHER
SIGNIFICANT YEAR OF GROWTH Your company is presently engaged as a partner in
the following joint ventures in execution of the works
Your Company achieved a gross turnover of awarded to respective joint ventures as detailed
Rs.15,214.23 million for the year ended 31st March, hereunder:
2006 as against Rs.10,547.33 million for the previous
financial year registering an incremental turnover of 6.1 SPCL-IVRCL (JV)
Rs.4,666.9 million and recording a growth rate of
44.25% over the previous year. This joint venture was formed for road widening and
strengthening NH-5 from Srikakulam to Palasa A.P.II
The Earnings Before Interest Depreciation, Taxes and Package in Andhra Pradesh as part of Prime Ministers
Amortisation (EBIDTA) at Rs. 1,400.35 million are Golden Quadrilateral Project of the National
9.2% of the Gross Turnover for the year under review Highways Authority of India (NHAI). The project was
as against 8.43% for the previous financial year and completed and the defect liability period was also over.
this rate of profit compares well with those of the peers The company acquired the requisite qualification for
in the industry. quoting for roads independently as a result of this joint
venture.
5. ORDER BOOK POSITION:
6.2 UAN Raju IVRCL Construction (JV)
The Companys order book shows works on hand
amounting to Rs.66865.60 million as on 31st May, The company has entered into joint venture with M/s.
2006 as detailed hereunder: UAN Raju Construction Company Ltd., who are well
10
experienced in railway tunneling works, for execution b) NAVAYUGA, IVRCL & SEW (JV)
of the Tunnels work for laying broad gage line for
Konkan Railway in the State of Jammu & Kashmir. This Joint Venture was formed by your company along
The joint venture executed works of the value of with M/s. Navayuga Engineering Company Ltd. (Lead
Rs.389.50 million having completed 24% of the total Partner) and M/s. Sew Constructions Limited with a
work during the year ended 31st March 2006. profit or loss/work-sharing ratio of 35.75%, 35.75%
and 28.5% respectively for quoting and execution of
6.3 IVRCL HARSHA (JV) project works of Kalvakurthi Lift Irrigation Scheme viz.,
Stage-2 Pumping Station (5x30MW) of Kalwakurthy
The Joint Venture has been formed between IVRCL Lift Irrigation Scheme at Jonnalaboguda Balancing
and Sri Harsha Constructions to bid for and execute Reservoir near Khanpur Village, Koderu Mandal,
the work of construction of MGR Link Line and earth Mahaboobnagar District of Andhra Pradesh, India on
works in the formation of railway, road and bridge EPC Basis. The work is being executed sharing the
work and permanent way work for National Thermal entire scope as per the agreed percentages. The joint
Power Corporation Ltd, SIPAT Package3. Your venture has completed works of the value of Rs.115.60
companys share in this joint venture is 80%. The million as against Rs.5850 million which works out to
Joint Venture has executed works of the value of Rs.196 1.98% of the total work.
million having completed 53% of the work.
c) IVRCL, NAVAYUGA & SEW (JV)
6.4 Joint Ventures for Irrigation works
This joint venture has been formed by your company
Your Company is one of the engineering construction as the Lead Partner along with M/s. Navayuga
majors who are involved in the irrigation projects of Engineering Company Ltd. and M/s. Sew Constructions
Government of Andhra Pradesh in a big way. The Limited for quoting and execution of Sripada Sagar
company has joined with other construction Lift Irrigation Project of the value of Rs.17370 million
companies for getting pre-qualified and execution of in the proportion of 35.75%, 35.75% and 28.5%
irrigation works as detailed hereunder: respectively. The joint venture has completed works
of the value of Rs.2207.70 million, which works out
a) IVRCL, SEW & PRASAD (JV) to 12.71% of the total work.
The company has entered into joint venture 7. SUBSIDIARIES

arrangements with M/s. Sew Constructions Limited and
M/s. Prasad & Company (Project Works) Limited for The concept of Public Private Partnership (PPP) has
Quoting and execution of the following irrigation gained momentum with the Government realising that
works under the name and style of IVRCL, SEW & the private sector has a greater role to play in the
PRASAD (JV). IVRCL is the Lead Partner in this Joint infrastructure development of the country. As a
Venture with a profit or loss/work-sharing ratio of consequence, many of the projects have been drafted
50:25:25. The total value of the works awarded is as BOOT or BOT projects resulting in private sector
Rs.18460 million. Of this, the joint venture has already seeking additional resources for investment. To meet
executed works of the value of Rs.4837.90 million, the challenges in evolving scenario, the following
which works out to about 26.21% of the total works investment subsidiaries were formed separately while
awarded. IVR Prime Urban Developers Limited is being utilised
for investments in buildings and real estate projects.
S.No Name of the Project Investments into the related SPVs incorporated for
1 Telugu Ganga Project - III executing each BOOT project are routed through these
2 Telugu Ganga Project - II investment subsidiaries. The state of projects being
3 Sriram Sagar, Jagityal FFC executed by these subsidiaries is discussed hereunder.
4 NKILS Package 28
5 NKILS Package 30
6 Polavaram (Indraprastha)
7 Polavaram Package 8
8 Koil Sagar Lift Irrigation Scheme Stage I
9 Koilsagar II
11
Name of the Division Name of Investment construct, develop, finance, operate and maintain 53
Subsidiary kilometers section of National Highways 47 from
Salem to Kumarapalayam in the state of Tamilnadu
Transport IVRCL Road Toll Holdings pursuant to the concession agreement dated
Limited 20.01.2006 between the company and National
Highways Authority of India (NHAI) at an estimated
Water IVRCL Water Infrastructures cost of Rs.5011.30 million to be financed by way of
Limited equity of Rs.800.00 million, grant from NHAI of
Rs.1290.00 million and term loans of Rs.2921.30
7.1 HINDUSTAN DORR-OLIVER LIMITED million. The company is in the final stages of achieving
financial closure. The project execution has just
Your company successfully acquired HINDUSTAN commenced.
DORR-OLIVER LIMITED (HDO) a listed company by
acquiring 70% of the shareholding of HDO. 7.4 KUMARAPALAYAM TOLLWAYS LTD.
Subsequent to your companys acquisition, HDO
made a private placement of 15,70,000 equity shares Kumarapalayam Tollways Limited was incorporated
mopping up Rs.502.40 million @ Rs.320/- per share. to design, construct, develop, finance, operate and
As a result, your companys holding in HDO was maintain 47 kilometers section of National Highways
diluted by 19% and now it stands at 51.15%. HDOs 47 from Kumarapalayam to Chengapalli in the state
technical capabilities and the manufacturing facilities of Tamilnadu pursuant to the concession agreement
at Ahmedabad are being dovetailed with those of your dated 20.01.2006 between the company and National
companys technical and project execution skills so Highways Authority of India (NHAI) at an estimated
as to result in value addition to both the companies. cost of Rs.4214.40 million to be financed by way of
The Rs.10/- share of HDO is proposed to be sub- equity of Rs.650.50 million, grant from NHAI of
divided into five shares of Rs.2/- each with effect from Rs.175.00 million and term loan of Rs.3388.90 million.
June 2, 2006. The company is in the final stages of achieving
financial closure. The project execution has just
The company achieved a turnover of Rs.1456.49 commenced.
million during the year with a profit (PBT) of Rs.73.83
million and net profit (PAT) of Rs.64.74 million 7.5 JALANDHAR AMRITSAR TOLLWAYS LTD.
resulting in an EPS of Rs.13.06.
Jalandhar Amritsar Tollways Limited was incorporated
7.2 IVR PRIME URBAN DEVELOPERS LTD. for execution of widening and strengthening of
Jalandhar-Amritsar road and the concession agreement
The Company constructed 594 residential apartments signed with National Highways Authority of India
complex by name Hill Ridge Springs and 124 (NHAI). The estimated cost of the project is Rs.2377.50
independent houses by name Hill Ridge Villas. During milllion financed by way of debt to the extent of
the year, the company achieved a turnover of Rs.1570.00 million (financed by Canara Bank,
Rs.1364.25 million and a profit (PAT) of Rs.117.80 Allahabad Bank and State Bank of Bikaner and Jaipur
million. The company is developing a state of art mall to the extent of Rs.600.00 million, Rs.500.00 million
of about 0.7 million square feet of area and an I.T and Rs.470.00 million respectively) and equity of
Park of 0.7 million square feet on a plot of 0.348 Rs.413.00 million and grant from NHAI to the extent
million square feet in Gachibowli at a cost of about of Rs.394.50 million. The project execution has
Rs.3750 million excluding land cost. The company commenced having achieved financial closure.
proposes to raise capital through an Initial Public Offer,
not only for this project but also for executing various 7.6 FIRST STP PRIVATE LTD., is a Joint Venture
real estate development projects in or nereby Chennai, between your Company and VA Tech Wabag Limited
Pune, Bangalore, Delhi, besides Hyderabad. (erstwhile, Balcko Duo and Wabag Technologies Ltd.,
- BDWT), a wholly owned subsidiary of VA Tech AG,
7.3 SALEM TOLLWAYS LTD. - one the largest engineering groups of Austria with
global leadership in water treatment technologies in
Salem Tollways Limited was incorporated to design, the ratio of 95:5. The Company executed sewerage
12
treatment plant of 12 million litres per day capacity to particulars as advised by the Department of Company
treat the sewage from residential units of Alandur Affairs to be included in the annual report of holding
municipality, a suburb of Chennai. The Company has company are provided, in Annexure - 'B'.
made a turnover of Rs.18.48 million and profit (PAT)
of Rs.8.18 million for the year ended 31st March, 2006. 8. CONSOLIDATION OF ACCOUNTS
7.7 IVR ENVIRO PROJECTS PRIVATE LTD. In accordance with the Accounting Standard AS-21
on Consolidated Financial Statements read with
The Municipal Solid Waste Treatment Plant set up by Accounting Standard AS-27 on Financial Reporting
the Company for Tirupur Municipality in Tamilnadu of Interests in Joint Ventures, your Directors have
is under operation. This is an eco friendly project pleasure in attaching the Consolidated Financial
undertaken by your Company. The plant operation Statements presented by your Company which form
taking into account the limited quantity of segregated part of the Annual Report and Accounts.
waste has stabilized. The relations with the clients
have stabilized however the disputes with the clients Profit after tax and minority interest as per the
with reference to the contractual obligations are being consolidated accounts is Rs.1078.07 million
sought to be resolved through arbitration. The considering the combined profits net of losses of all
company made a turnover of Rs.1.16 million for the the subsidiaries, joint ventures and after eliminating
year ending 31st March, 2006. unrealized profits from intra-group transactions to the
tune of Rs.19.69 million.
7.8 IVRCL PSC PIPES PRIVATE LTD., manufactures
and undertakes laying of PSC pipes. The subsidiary 9. SUB DIVISION OF SHARES
has leased out its manufacturing facilities so as to
improve its financials, and gained an income of As approved by the members at the Extraordinary
Rs.1.70 million. General Meeting held on March 4, 2006, the share
capital of the company consisting of equity shares of
7.9 GEO IVRCL ENGINEERING LIMITED Rs.10/- each was sub-divided into shares of Rs.2/- each
and accordingly the share capital of Rs.213,875,800/
M/s. Geo IVRCL Engineering Limited was incorporated - (prior to allotment of shares arising out of conversion
as a Special Purpose Vehicle with a view to undertake of Foreign Currency Convertible Bonds was consisting
engineering and construction works in Oil and Gas of 106,937,900 equity shares of Rs.2/- each.
Sectors jointly with M/s. GEO ENGINEERING LIMITED of
Russia. The company is yet to commence commercial 10. ISSUE OF FOREIGN CURRENCY CONVERTIBLE
operations. BONDS
7.10 IVRCL STEEL CONSTRUCTION & SERVICES During the period under review covered by this report
LIMITED the company raised US $ 65.00 million through issue
of Foreign Currency Convertible Bonds viz., Zero
IVRCL STEEL CONSTRUCTION & SERVICES LIMITED is incorporated
Coupon Convertible Bonds due 2010 (ZCCB due 2010)
for the purpose of executing works connected with and listed the bonds on Singapore Stock Exchange.
the steel industry, and the company is yet to The bonds are convertible into companys equity
commence commercial operations. shares at an agreed exercise price of Rs.234.03 per
share of Rs.2/- each considering an exchange rate of
A statement under Section 212 of the Companies Act, Rs.45.84 per dollar. The increase in the market price
1956, in respect of all subsidiary companies is annexed of the companys equity during the months of March
as Annexure-A with this report for information of the and April has resulted in some of the holders of the
Members. bonds of the value of US $ 9.6 million seeking
conversion into shares numbering 18,80,345. As a
Your company has received exemption from including result of this conversion, the reserves of the company
certain particulars as required under Section 212 of have increased by Rs. 436.30 million. The share
the Companies Act, 1956. However, certain other capital of the company post conversion increased to
13
Rs.217,636,490/- comprising of 108,818,245 equity During the year under review Mr.Ashish Dhawan
shares of Rs.2/- each. resigned from the Board. The Board places on record
its appreciation of the services rendered by him during
11. EMPLOYEE STOCK OPTION SCHEMES: his tenure as Director.
a) IVRCL ESOP 2000 Mr.E.Sunil Reddy who was designated as Director

Legal with salary and perquisites as approved by the
Against 3,00,000 options granted to permanent members at the last Annual General Meeting has
employees as approved by the shareholders on 17th chosen to continue only as a Director with effect from
March, 2000 the company allotted @ Rs.10/- per share March 1, 2006 without any remuneration.
2,97,000 shares while 3000 options lapsed due to
resignations and are to be granted again to the 14. CORPORATE GOVERNANCE
employees at an exercise price of Rs.10/- each.
Your Directors are happy to report that your Company
b) IVRCL ESOP 2004 is compliant with the Corporate Governance
requirements as per Clause 49 of the listing agreement
Against 4,00,000 options approved by the shareholders with the Stock Exchanges. The Statutory Auditors
at the Extraordinary General Meeting held on 5th Certificate along with the report on Corporate
January, 2004, 338040 options were converted into Governance is included in the Annual Report. The
shares, 5800 grants are still running the vesting period Management Discussion and Analysis of the previous
and the balance 56160 options are yet to be granted. years performance is also provided in the Annual
Each option is liable to be converted into five equity Report.
shares of Rs.2/- each.
15. DIRECTORS' RESPONSIBILITY STATEMENT
The options have been accounted for in the books in
accordance with the SEBI guidelines and the necessary Pursuant to the requirement under section 217 (2AA)
particulars are provided in Annexure-'C'. of the Companies Act, 1956, with respect to Directors
Responsibility Statement, it is hereby confirmed that :
12. PUBLIC DEPOSITS
i. in the preparation of the annual accounts the
The public deposits outstanding as on 31st March, 2006 applicable accounting standards have been
amount to Rs. 1,31,11,000. There are no over due or followed along with proper explanations relating
unclaimed deposits. The Company has not been to material departures ;
accepting fresh deposits from 1st April, 2004.
ii. the Directors have selected such accounting policies
13. DIRECTORS and applied them consistently and made judgment
and estimates that are reasonable and prudent so
Mr.Arvind Pande, Chairman of the company submitted as to give a true and fair view of the state of affairs
his resignation due to pre-occupation with various of the Company as at 31st March, 2006 and of the
other corporate bodies at New Delhi. The Board profit of the Company for the financial year ended
places on record its immense appreciation of the on that date.
services rendered by Mr.Arvind Pande during his
tenure as the Chairman of the Board of Directors of iii. the Directors have taken proper and sufficient care
the Company. for the maintenance of adequate accounting records
in accordance with the provisions of the Companies
Mr.E.Sunil Reddy, Mr.T.N.Chaturvedi and Mr.E.Ella Act, 1956, for safeguarding the assets of the
Reddy being longest in office are liable to retire at the Company and for preventing and detecting fraud
forthcoming Annual General Meeting and they offered and other irregularities; and
themselves for the reappointment.
iv. the Directors have prepared the annual accounts
of the Company on a going concern basis.
14
16. AUDITORS Innovation is a culture in the Company to achieve

cost efficiency in the construction activity to be more
M/s. Chaturvedi & Partners and M/s. Deloitte Haskins and more competitive in the prevailing environment
& Sells the Statutory Auditors, retire at the ensuing that cannot be quantified.
annual general meeting and are eligible for The particulars of expenditure in Foreign currency is
reappointment. The Company received confirmation furnished in item No. B12 Notes to Accounts in
that their appointment, if made, would be within the Schedule 19. There are no foreign exchange earnings
limits prescribed under Sec.224(1B) of the Companies in the year under review.
Act, 1956.
18. INDUSTRIAL RELATIONS
17. STATUTORY INFORMATION
The Company enjoyed cordial relations with the
Particulars of employees who were in receipt of employees during the year under review and the
remuneration of Rs.24,00,000 or more per annum or Management appreciates the employees of all cadres
Rs.2,00,000 or more per month are furnished in for their dedicated services to the Company, and
Annexure D. expects continued support, higher level of productivity
for achieving the targets set for the future.
Particulars regarding Conservation of Energy,
Technology Absorption and Foreign Exchange ACKNOWLEDGMENTS
Earnings and Expenditure: Conservation of Energy,
which is an on going process in the Companys The Directors wish to express their appreciation of
construction activities, is not furnished as the relative the support and co-operation of the Central and the
Rule is not applicable to your Company. State Government, bankers, financial institutions,
suppliers, associates and subcontractors, and expects
There is no information to be furnished regarding the same in future as well for sustaining the growth
Technology Absorption as your Company has not rates achieved in the past.
undertaken any research and development activity in
any manufacturing activity nor any specific technology
is obtained from any external sources which needs to For and on behalf of the Board
be absorbed or adapted.
E.Sudhir Reddy
Chairman & Managing Director
Place : Hyderabad
Date : June 2, 2006
15
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES Annexure - A
Name of the Subsidiary Company Hindustan Ivr Prime Urban IVRCL PSC IVR Enviro First STP IVRCL Road Kumarapalayam
Dorr Oliver Developers Pipes Private Projects Private Toll Holdings Tollways Ltd
Limited Limited Limited Private Limited Ltd.
Limited
Number of shares held and extent of

holding therof by the holding company,
IVRCL Infrastructures & Projects Ltd as at
the above date:
a ) The number of equity shares of Rs.

10/- each fully paid 2,966,913 39,999,500 167,000 674,550 2,850,000 39,063,000 26,050,000
b) Extent of holdings in percentage terms 51.15 99.99 66.43 89.94 95.00 100.00 100.00
The net aggregate profits or (losses) of the

subsidiary company of the current
16
financial year so far as it concerns the
members of the holding company
a) dealt with or provided in the accounts

of the holding company - - - - - - -
b) Not dealt with or provided in the

accounts of the holding company (Rs.) 26,898,727 117,046,686 64,524 (1,077,029) 7,770,111 (2,741,741) -

subsidiary company for the previous
financial years so far as it concerns the


accounts of the holding company (Rs.) - 6,870,449 1,155,402 (750,878) 3,087,330 - -
Annexure - A - Contd..
Name of the Subsidiary Company IVRCL Water Salem Tollways GEO IVRCL Chennai Jalandhar IVRCL Steel IVR Hotels &
Infrastructures Ltd. Engineering Water Amritsar Construction Resorts
Ltd. Ltd. Desalination Tollways Ltd. & Ltd.
Ltd. Services Ltd.
Number of shares held and extent of

holding therof by the holding company,
IVRCL Infrastructures & Projects Ltd as at
the above date:
a ) The number of equity shares of Rs.

10/- each fully paid 11,940,000 22,050,000 49,400 2,050,000 19,500,000 49,000 50,000
b) Extent of holdings in percentage terms 100.00 100.00 98.80 100.00 100.00 98.80 93.98

subsidiary company of the current
17
financial year so far as it concerns the


accounts of the holding company (Rs.) (1,315,566) - - - - - -

subsidiary company for the previous
financial years so far as it concerns the


accounts of the holding company (Rs.) - - - - - - -
Annex
In fo rm a tio n re g a rd in g su b sid ia ry c o m p a n ie s in re sp e c t o f w h ic h th e c o m p a n y h a s b e e n e x e m p te d fro m th e p ro v isio n s c o n ta in e d in su b -se c tio n (1 ) o f S e c tio n 2 1 2 o f th e C o m p a n ie s A c t, 1 9 5 6 v id e

N o .4 7 /1 2 3 /2 0 0 6 -C L -III d a te d 3 0 .5 .2 0 0 6 o f th e M in istry o f C o m p a n y A ffa irs, G o v e rn m e n t o f In d ia , N e w D e lh i.
(R u
S l. N a m e o f th e IV R P rim e IV R E n v iro IV R C L P S C F irst S T P IV R C L W a te r C h e n n a i W a te r IV R C L R o a d Ja la n d h a r IV R C L S te e l S a le m K u m a ra p a la y a m G e o IV
N o. Com pany U rb a n P ro je c ts P v t. P ip e s P v t. P v t. L td . In fra stru c tu re s D e sa lin a tio n T o ll H o ld in g s A m ritsa r C o n stru c tio n T o llw a y s L td . T o llw a y s ltd . E n g in e e
D e v e lo p e rs L td . L td . L td . L im ite d L td . L im ite d T o llw a y s L td . & S e rv ic e s L td .
L td .
1 C a p ita l 4 0 0 ,0 0 0 ,0 0 0 7 ,5 0 0 ,0 0 0 2 ,5 1 4 ,0 0 0 3 0 ,0 0 0 ,0 0 0 1 1 9 ,4 0 0 ,0 0 0 2 0 ,5 0 0 ,0 0 0 3 9 0 ,6 3 0 ,0 0 0 1 9 5 ,0 0 0 ,0 0 0 5 0 0 ,0 0 0 2 2 0 ,5 0 0 ,0 0 0 2 6 0 ,5 0 0 ,0 0 0 500
2 R e se rv e s 1 0 7 ,3 1 1 ,4 2 6 - 5 1 3 ,8 9 7 1 2 ,9 3 5 ,8 5 2 - - 1 2 7 3 ,6 1 6 ,5 6 9 1 3 2 ,0 0 0 ,0 0 0 - 3 3 0 ,0 0 0 ,0 0 0 3 9 0 ,0 0 0 ,0 0 0 -
3 T o ta l a sse ts 1 1 9 2 ,5 8 2 ,2 2 6 2 6 ,4 4 4 ,5 6 6 1 3 ,9 1 4 ,8 9 7 6 3 ,8 4 9 ,4 0 6 1 5 6 ,8 6 5 ,5 1 4 1 2 8 ,8 8 5 ,0 0 0 1 6 6 4 ,2 4 6 ,5 6 9 3 2 7 ,3 6 0 ,0 0 0 5 0 0 ,0 0 0 6 6 8 ,2 5 0 ,0 0 0 6 6 8 ,3 5 0 ,0 0 0 50
4 T o ta l L ia b ilitie s 1 1 9 2 ,5 8 2 ,2 2 6 2 6 ,4 4 4 ,5 6 6 1 3 ,9 1 4 ,8 9 7 6 3 ,8 4 9 ,4 0 6 1 5 6 ,8 6 5 ,5 1 4 1 2 8 ,8 8 5 ,0 0 0 1 6 6 4 ,2 4 6 ,5 6 9 3 2 7 ,3 6 0 ,0 0 0 5 0 0 ,0 0 0 6 6 8 ,2 5 0 ,0 0 0 6 6 8 ,3 5 0 ,0 0 0 50
D e ta ils o f in v e stm e n t
5 (e x c e p t in c a se o f - - - - - - - - - - - -
18
in v e stm e n t in
su b sid ia rie s)
6 T u rn o v e r 1 3 6 4 ,2 4 9 ,3 8 1 1 ,2 6 0 ,0 3 4 1 ,6 9 8 ,8 2 0 1 8 ,4 7 8 ,3 0 1 - - 3 ,4 6 6 - - - - -
7 P ro fit b e fo re ta x a tio n 1 3 5 ,9 3 5 ,2 8 6 (1 ,8 0 5 ,0 9 2 ) 1 6 7 ,6 9 2 5 ,9 5 4 ,1 4 6 (1 ,2 9 4 ,4 8 6 ) - (2 ,7 1 8 ,4 3 1 ) - - - - -
8 P ro v isio n fo r ta x a tio n 1 8 ,8 8 7 ,1 2 8 6 0 7 ,5 9 4 7 0 ,5 5 9 (2 ,2 2 4 ,9 1 8 ) - - - - - - - -
9 P ro fit a fte r ta x a tio n 1 1 7 ,0 4 8 ,1 5 8 (1 ,1 9 7 ,4 9 8 ) 9 7 ,1 3 3 8 ,1 7 9 ,0 6 4 (1 ,2 9 4 ,4 8 6 ) - (2 ,7 1 8 ,4 3 1 ) - - - - -
10 P ro p o se d d iv id e n d - - - - - - - - - - - -
W e M /s. IV R C L In fra stru c tu re s & P ro je c ts L im ite d , d o h e re b y u n d e rta k e th a t a n n u a l a c c o u n ts o f th e a b o v e su b sid ia ry c o m p a n ie s a n d th e re la te d d e ta ile d in fo rm a tio n w ill b e m a d e a v a ila b le to th e in v e s
h o ld in g a n d su b sid ia ry c o m p a n ie s se e k in g su c h in fo rm a tio n a t a n y p o in t o f tim e . T h e a n n u a l a c c o u n ts o f th e su b sid ia ry c o m p a n ie s w ill a lso b e k e p t fo r in sp e c tio n b y a n y in v e sto r in its H e a d O ffic e a n
o f th e su b sid ia ry c o m p a n y c o n c e rn e d .
G .R a m a k rish n
C om pany Sec
ANNEXURE-C
A. The following table sets forth the particulars of the options under both the schemes as
on 2nd June, 2006 :
Particulars First Scheme Second Scheme TOTAL

ESOP 2000 ESOP - 2004
Options approved by Members 3,00,000 4,00,000 7,00,000
Of which:
a. Options Granted 3,00,000 3,70,200 6,70,200
b. The Pricing Formula Rs.10/- Rs.100/- -
c. Options vested 3,00,000 3,70,200 6,70,200
d. Options exercised 2,97,000 3,38,040 6,35,040
e. The total no. of shares arising as a
result of exercise of options. 3,00,000 4,00,000 7,00,000
f. Options lapsed 42,310 32,160 74,470
g. Options re-issued 39,310 - 39,310
Variation of terms of options; (Note 1) Nil Nil Nil
h. Money realised by exercise of options Rs.29,70,000 3,38,04,000 367,74,000
i. Total no. of options in force 3,000 61,960 64,960
Of which:
Options granted NIL 5800 5800
To be granted (inclusive of f) 3000 56,160 59,160
j. Employee wise details of options
granted to:
(i) Senior Managerial Personnel:
Mr. D.Devaraja Rao 4000 12000 16000
Mr. R.Balarami Reddy 6500 8000 14500
Mr. K.Ashok Reddy 6500 5600 12100
Mr. KHK Prasad 4000 7200 11200
Mr. Raj Kumar Singh 4000 8400 12400
Mr. A.Krishna Reddy 4000 9000 13000
Mr. M.Nagireddy 4000 4800 8800
Mr. J.L.Vidya Sagar 4000 4800 8800
Mr. S.Ramachandran 4000 3000 7000
Mr. Sanjay moharir 4000 3600 7600
Mr. G.Rama Krishna Rao 4000 2400 6400
19
Mr. G.Seetharam 4000 1800 5800

Mr. N.P.Haran 2000 3000 5000
Mr. R.Venkatraghavan 4000 1800 5800
Mr. M.Srinivasa Rao 1500 2100 3600
Mr. K.Pandu Ranga Rao - 450 450
Mr. S.C.Sekharan - 750 750
(ii) Any other employee who receives
grants in any one year of option Nil Nil Nil
amounting to 5% or more of options
granted during that year.
(iii) Identified employee who were
granted options during any one year Nil Nil Nil
equal to or exceeding 1% of the issued
capital (excluding outstanding warrants/
conversions) of the Company at the
time of grant
k. Diluted earnings per share (EPS)
pursuant to issue of shares on exercise Rs. 8.63 per share of Rs. 2/- each
of options calculated in accordance for 2005-06
with the International Accounting
Standard (IAS) 33.
l. Employees Compensation Cost as per Intrinsic Value Rs. 9,12,337
Employees Compensation Cost as per Fair Value Rs. 9,15,885
Impact on Profits Rs. 3,548
Impact on EPS. Negligible
m. Weighted average exercise price Rs. 100.00
Weighted average fair value. Rs.522.35
Exercise Price is less than the Market Price
for all options.
n. Assumptions used during the year to 1. Risk-free interest rate - 6.01%
estimate the Fair values of options. 2. Expected life - 1 Year
3. Expected volatility - +49.60%
4. Expected dividends - 30% p.a
5. The price of the underlying share in market
at the time of option grant - Rs.620.15
Note 1: As a consequence of sub-division of the equity share of Rs.10/- each into five equity shares of Rs.2/-
each with effect from 4th March, 2006 (the date of Extraordinary General Meeting passing the resolution), the
underlying shares for each option stands increased from one share of Rs.10/- each to five shares of Rs.2/- each
and accordingly the future conversions of options shall be accounted for.
20
ANNEXURE D
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of
Employees0 Rules, 1975 and forming part of the Directors Report for the year ended March 31, 2006
1 Name E. Sudhir Reddy
2 Age (Years) 46
3 Designation / Nature of Duties Chairman & Managing Director Overall control

of the affairs of the Company
4 Gross Remuneration Rs.5,49,29,356/-
5 Qualifications B.Com
6 Total Experience (Years) 26
7 Date of Commencement of Employment March 25, 1990
8 Last Employment Not under employment earlier
Notes:
1. The appointment is contractual. Other terms and conditions are as per Company Rules.
2. Gross remuneration includes Monthly Salary P.F. Leave encashment, taxable value of perquisite and
commission on profits in terms of Schedule XIII to the Companies Act, 1956.
3. The Vice Chairman & Managing Director is related to Mr. E. Ella Reddy,, Director and Mr. E. Sunil
Reddy, Director of the Company.
For and on behalf of the Board
E. SUDHIR REDDY
Chairman & Managing Director
Place: Hyderabad
Date : June 02, 2006
21
MANAGEMENT DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION
Over View: new highways, dams, power plants, pipelines, etc.

Construction activity accounts for 42% of the total
The financial statements have been prepared in investment in the countrys infrastructure.
compliance with the requirements of the Companies
Act, 1956, and Generally Accepted Accounting Infrastructure development across sectors such as
Principles (GAAP) in India. The management of IVRCL power, oil and gas, ports, roads, railways, airports and
accepts responsibility for the integrity and objectivity urban infrastructure contributes over 50 per cent of
of these financial statements, as well as for various the revenues of the construction business in India.
estimates and judgments used therein. Given high GDP growth and sound economic
fundamentals, several infrastructure sectors are poised
The estimates and judgments relating to the financial for a big leap forward.
statements have been made on a prudent and
reasonable basis, in order that the financial statements Sectoral Overview
reflect in a true and fair manner the form and substance
of transactions, and reasonably present the state of Water-Unquenchable Opportunities
affairs on the Balance Sheet date and profits of the
Company for the year ended on that date. Water is often called the lowest cost utility, because
it only consumes about 1% of household income and
Fiscal 2006 was another record year for us. Our total has always been taken for granted by man. But as
revenue increased to 15014 million i.e. increased by environmental experts warn about the pitfalls of global
43.5% over fiscal 2005 and Net Profit (PAT) to 930 warming and the water crisis having already become
million, increased by 63.9% over fiscal 2005. a reality, it is hard to ignore what the future holds for
us. The per capita water availability in India was 3,450
Our revenues have grown on average over 40% per cu m in 1951. By 2025, the annual per capita
year in the last five years. We have funded this growth availability of water may dip drastically from the
through debt, equity and reinvestment of retained current 1,800 cu m per person to 1,200-1,500 cu m.
profits. It is time for a pragmatic approach to rejuvenate our
scarce water resources.
INFRASTRUCTURE INDUSTRY OVERVIEW
Global success stories of private participation in the
The importance of infrastructure to the economic water sector in Poland, Guinea, France, Australia and
development of a nation is undeniable. More so for a the UK have inspired attempts by the Government of
country like India, which is at the cusp of a quantum India to attract private investment into the water sector.
jump in growth through the enactment of policies that One such policy initiative was the granting of
encourage private and foreign investments. The infrastructure status to water supply, sewerage and
infrastructure construction industry came into sanitation. The National Water Policy, 2002 also
limelight in 2002-03, with the governments increased encourages private participation in the sector. It gives
focus on infrastructure sector. In India, construction is top priority to drinking water in the planning and
the second largest economic activity after agriculture. operation of water systems and urges to create their
Indias economy has exhibited an unprecedented own water policy. States like Andhra Pradesh,
macroeconomic performance during the triennium Karnataka and Maharashtra have framed their own
ending 2005-06. The Economic Survey 2005-06 notes state water policies and started giving priority to the
some significant dimensions of the dynamic growth private sector.
in recent years including a new industrial resurgence;
a pick up in investment. The construction industry is The Indian government has taken a firm stand to
witnessing a growth wave powered by large spends reduce the water crisis by commercializing the water
on the ongoing infrastructure programs in the form of sector. According to the National Water Summit,
22
2005: Private-sector participation should be district roads (470,000 km) and rural roads and other
encouraged in planning, development and district roads (2.65 million km) and this sector is seeing
management of water resources projects for diverse a lot of construction activity. A new project, the
uses, wherever feasible. This has opened a goldmine Special Accelerated Road Development Programme,
for construction companies. In October, 2005, the spanning 7,639 km has been approved for the
World Bank announced it would lend nearly $ 4 billion northeastern region in the Union Budget 2006-07.
for water-related projects in the next four years.
Over the next decade, roads are going to be the key
Water-related projects Allotment of funds driver of construction investments among the
Irrigation $ 1,400 million infrastructure sectors, contributing nearly 34 percent
Rural water sanitation $ 700 million share in infrastructure investments. The government
Hydro projects $ 600 million has initiated a massive facelift plan for the entire road
Water resource management $ 400 million network in the country over the next 10 years in this
Watershed management $ 200 million sector. The road programmes such as National
Urban water sanitation $ 100 million Highway Development Programme (NHDP) and
Pradhan Mantri Gram Sadak Yojana (PMGSY) together
The World Economic Forum Water Initiative and the with the state level projects will provide a fillip to the
Confederation of Indian Industry (CII) have launched construction industry. To expedite its implementation,
a new alliance of Indian and multinational businesses the project has been restructured and involves seven
to improve the availability and quality of water for phases (entailing the building, upgrading and
businesses, communities and the environment in India. maintenance of 51,411 km of roads) at a cost of Rs
In partnership with the United Nations Development 1,871 billion. The Rs 600 billion Pradhan Mantri Gram
Programme and the US Agency for International Sadak Yojana seeking to connect habitations with
Development, the new Indian Business Alliance on populations of more than 500 is also in full swing.
Water (IBAW) will facilitate public-private partnerships Investments in roads sector are likely to increase from
to expand the business communitys engagement in Rs 550 billion in the past 3 years to about Rs 800 billion
water management projects. Through the partners in the next 3 years. The development of state roads
extensive networks, the alliance will promote has been concentrated in only certain states. NHDP
corporate best practices in water management, and PMGSY are expected to constitute more than 60
broaden business engagement in community water percent of total planned activities in the sector over
projects and facilitate discussion among businesses, the next 3 years. The government has approved
governments, communities and NGOs to build investments to the tune of Rs 1,466 billion in NHDP
common approaches to Indias water management (up to Phase IIIA) and PMGSY. Of this, Rs 300 billion
challenges. has already been spent on NHDP and Rs 183 billion
on PMGSY. Over the next 5 years, Rs 511 billion will
The Tenth Plan has also targeted 100 percent coverage be spent on NHDP Phase I, Phase II and Phase IIIA.
of urban population with water supply facilities along
with 75 percent coverage in terms of sewerage and Projects under Phase IIIB to Phase VII (cumulatively
sanitation by 2007. This will cost over Rs 530 billion. over 30,000 km) are still in the conceptualization stage,
A few domestic financial institutions such as HUDCO though in some cases certain stretches have been
and IL&FS are active in the sector. Multilateral identified. NHAI has planned to complete all of them
agencies like the World Bank, Asian Development on BOT-toll or BOT-annuity basis. Within NHDP, with
Bank and Japan Bank for International Cooperation the golden Quadrilateral (GQ) project nearing
have promoted water projects under integrated urban completion, the implementation focus has shifted to
development schemes. NSEW and Phase IIIA and these two programmes are
currently being implemented simultaneously. Phase
Transportation on a Roll Roads, Railways, Bridges, III, which involves upgradation of 10,000 km of
Tunnels, Expressways, Growth Corridors, Metro rails national highways, is scheduled for completion by
Endless Opportunities: December 2009. Further, the scope of the NHDP has
been enhanced to include four additional phases
India has one of the largest road networks in the world covering over 27,500 km.
(3.3 million km), comprising national highways
(65,569 km), state highways (128,000 km), major
23
Railways towards 50%. The speed of urbanization and

phenomenal growth of the IT/BPO industry in India
The demand for rail services has grown in tandem have further fuelled the growth of this sector. After IT/
with economic expansion, quickly out-stripping the ITES, the biggest driver of Indian commercial property
capacity. As a result, important infrastructure deficits market is the hotel and hospitality industry. In the
have appeared. Therefore, the Indian Railways is past one year, aided by better destination marketing,
implementing priority projects such as the GQ, port India emerged as one of the major destinations for
connectivity, corridor hinterland projects and leisure tourism. It is estimated that the number of
construction of four major bridges under the National shopping malls alone will increase beyond to 600 by
Rail Vikas Yojana. Works for all the sanctioned 2010 from the current 220 giving a major boost to this
projects have been handed over to Rail Vikas Nigam sector.
Limited, a special purpose vehicle. The prestigious
Delhi Metro Rail Transport Service has also been The government had in April 2000 announced the
extended while metro projects are under way in introduction of Special Economic Zones policy in the
Hyderabad, Mumbai, Bangalore and other cities. The country, deemed to be foreign territory for the purposes
Union Budget 2006-07 approved the construction of of trade operations, duties and tariffs. SEZs when
a freight corridor at a cost of Rs 220 billion. operational are expected to offer high quality
infrastructure facilities and support services, besides
Buildings, Urban & Commercial Infrastructure On allowing for the duty free import of capital goods and
a High Rise! raw materials. Setting up of SEZs is also treated as an
infrastructure development activity and offered same
The urban infrastructure sector includes urban housing, incentives.
sanitation, water supply and waste management. It
also covers special economic zones and software / Irrigation, Water Supply and Sanitation (WSS) and
biotech / pharma and such other dedicated parks. The Environmental Sector Pure, Refreshing, Defensive
housing sector boom continues due to easily available Growth
housing finance and the urban reform process.
Irrigation and WSS projects based on the nature of
This sector is at an inflection point, with changing civil construction activity and usage include dam
demographics driving the growth of housing, urban, projects, water reservoirs, water treatment plants, small
commercial infrastructure. Various structural (social hydropower projects, lift and gravity technology to
and demographic) and macro economic factors are create water distribution network, desalination plants,
fuelling demand for urban infrastructure in the country. industrial water supply projects, solid waste
The entry of MNCs and the outsourcing wave has led management, sewage and effluent treatment plants.
to greater employment opportunities being created,
not only in metros, but also surrounding suburbs and Irrigation and WSS projects are funded mainly by the
towns. Availability of business support elements, state government allocations. Over the next 5 years,
physical environment and business potential of a city around Rs 400 billion worth irrigation projects have
have also catalyzed growth. This has led to rapid been envisaged by the State of Andhra Pradesh alone,
urbanization, propelling demand for residential, and therefore, it will be the key focus area of
commercial and urban infrastructure providing a huge implementation of irrigation projects. Central
impetus for the development of building sector. assistance, though very minimal, is largely routed
through the accelerated Irrigation Benefit Programme,
With changing demographic and economic profile of under which the funds are allocated to help the states
the Indian population, the country is experiencing an to fund the uncompleted irrigation projects.
unprecedented boom currently, which will increase
manifold over the next few years. Dependency ratio, WSS projects are state-driven projects, but the
a proportion of non-working population, is set to implementation focus remains restricted mainly to
decline in the coming few years; and a large cities. The key states to have witnessed substantial
population will be joining the ranks of the consuming investments in the last 3 years in the implementation
age class of 15-64. A third of the population is already of the WSS projects are Gujarat, Delhi, Maharashtra,
residing in the urban areas and the ratio is fast moving Karnataka, Kerala, Tamilnadu and Uttar Pradesh. Over
24
the next 3 years, besides the above states, Rajasthan of power from surplus to deficient states. The Center
and Madhya Pradesh are expected to witness has recently announced the setting up of five ultra
substantial part of the total WSS investments. Water mega power projects of 4,000 MW each to meet the
supply and sanitation (WSS) is part of urban ambitious generation targets.
infrastructure and contributes more than 40 percent
of the investments represented by urban infrastructure. Transmission Superhighways - The countrys power
transmission programme for both the 10th and 11th
Power Generation, Distribution & Transmission A Plans focuses on the creation of a National Grid in a
Renaissance in Power Sector phased manner by adding over 60,000 ckm of
transmission network by 2012. Such an integrated
The Indian power sector has grown manifold since grid shall enable the government to evacuate
independence, making India the third largest producer additional 1,00,000 MW by the year 2012 and carry
of electricity in Asia with an installed capacity of 60 per cent of the power generated in the country.
1,24,000 MW against 1,362 MW in 1947. The The existing inter-regional power transfer capacity is
government has recognized the importance of 9,500 MW by 2012 through creation of Transmission
transmission and distribution and has provided Super Highways. The Ministry of Power has entrusted
substantial investment in the 10th and 11th Plans and Power Grid to take initiatives to facilitate private sector
stepping up its efforts for power generation and participation in setting up of transmission lines. Power
distribution in its mission of Power for all by 2012. Grid has invited bids to establish transmission lines
The government is also undertaking steps to bring through formation of project specific Independent
reforms in power generation, transmission and Power Transmission Company (IPTC) by way of 100
distribution sectors. The government has laid down per cent private sector participation for Western Region
three main missions: power availability for all by 2012, (WR) Strengthening Scheme II in the states of
electrification of all villages by 2010 and access to Maharashtra, Gujarat and Madhya Pradesh for two
electricity for all households by 2010. This entails projects valued at approximately Rs.15 billion. The
integrating the regional grids into the national grid with projects shall be established on build, own operate
30,000 MW of interregional transfer capacity, and and transfer (BOOT basis) for a license period of 25
access to electricity for 56 per cent of the remaining years.
rural households.
Rural Electrification - The Government of India has
The installed capacity by the end of the Tenth Plan is taken initiatives to assist state electricity boards in
likely to be 137,000 MW. The capacity addition target strengthening their distribution network through
for the Eleventh Plan is an even more ambitious 67,500 Accelerated Power Development and Reforms
MW. The IPPs are back in business. Thirteen IPPs Programme (APDRP). The power transmission sector,
worth more than 6,777 MW have achieved financial particularly in India, is witnessing a strong growth
closure since January 2004. As for interregional which is likely to sustain over the next 5-7 years given
transmission capacity, this is targeted to increase to the large incremental generation capacities coming
37,150 MW by the end of 2012 from 9,500 MW in on stream to bridge the growing demand-supply gap
March 2005. The project is being spear headed by of power in India and the consequent necessity to
Power Grid Corporation of India under its National transmit power, both intra-as well as inter-regionally
Grid programme. It is estimated that total investments in India.
worth around $180 billion will be required till 2012.
Half of this would be for generation while the other The government also plans to provide electricity to
half would be for Transmission and Distribution and all villages for which it has undertaken a Rural
rural electrification. Of an estimated 586,000 villages Electrification Programme. Under the Rajiv Gandhi
about 150,000 remain to be electrified and of the Gramin Vidyuktikaran Yojana, all states have signed
138.27million households about 78.09 million are still memoranda of understanding (MoU) under which,
to be electrified. This mission will require increasing close to 10,000 villages are to be provided with
the installed generating capacity by nearly 1,00,000 electricity during the current year. This would be
MW by 2012 and the focus is on efficient distribution expanded to 40,000 villages by FY07 as per the
current budget.
25
IVRCL - We Make It Happen! Hyderabad Metro Water Supply & Sewerage

IVRCL today is strongly entrenched with proven Board.
domain knowledge, experience and credentials and
stands apart as one of the leading players in the v River Water Intake & Piping System at Jindal
following infrastructure sectors :- Super Thermal Power Plant (4x250 MW)
Jindal Power Limited, Raigarh.
Ø Water Supply & Environment Projects.
Ø Transportation Roads, Bridges & Railways. v Tirupur Textile Effluent Management Project
Ø Buildings & Industrial Structures. Raw Effluent Conveyance System and the
Ø Power Transmission, Distribution & Rural Recovered Water Transmission System.
Electrification
Chennai Water Desalination Project - The Sea Water
At IVRCL, we recognize the tremendous potential of Desalination Plant Project of 100 MLD capacity in
each of the above sectors, especially given the high Joint Venture into BEFESA CTA of Abengoa Group,
importance and impetus attached to the rapid pace of Spain awarded by the Chennai Metropolitan Water
development set by the Government of India to rapidly Supply & Sewarage Board, Government of Tamilnadu
make up the deficits in infrastructure.. This gives to the Company under on DBOOT (Design, Build,
IVRCL the access to continued growth opportunities Own, Operate and Transfer) basis at an estimated cost
in the above four sectors. of Rs 5 billion will be executed under an SPV in the
name of Chennai Water Desalination Limited.
Water & Environment
For IVRCL, Water Infrastructure construction is its main The immense potential of a desalination drive in the
forte developed over a decade and half of dedicated country in the government, municipal bodies and
work. Water related projects continue to provide the industrial sectors is further opening up new avenues
base with 56 % of the total works. The Company, by for the company with a large number of enquiries
leveraging on its existing capabilities and encouraging us to aggressively pursue desalination
qualifications, shall continue to forge ahead projects as a key business activity on EPC / BOT basis,
aggressively and bid for projects in this sector and given our prime mover advantage of being the first
continue to remain at the forefront as a market leader company in the country to embark on this desalination
in water projects. drive with a plant of such large capacity as 100 million
liters per day.
Some of the significant water projects currently under
execution are: - Our Companys acquisition of Hindustan Dorr Oliver
(HDO) has given a tremendous boost to the capabilities
v Kalwakurthy Lift Irrigation Scheme Irrigation and pre-qualifications to IVRCL in the domain of water
Department, Government of Andhra Pradesh and environment sectors. Given that IVRCLs core
strength lies in water projects, the deal makes for an
v Khorsam (Sujalam Suflam) EPC Pipeline & excellent fit, going forward.
Pumping Station Project Gujarat Water
Resources Development Corporation Limited. Transportation
v Koilsagar Lift Irrigation Scheme Irrigation IVRCL is moving full throttle ahead to capture the
Department, Government of Andhra Pradesh momentum in road BOT projects and has incorporated
a wholly owned subsidiary IVRCL Road Toll
v Barsingsar Thermal Power Project (2 x 125 MW) Holdings Limited to invest in BOT Projects. Thus by
Water Carrier System Neyveli Lignite rapidly adopting to the emerging new business models
Corporation Limited. of BOT (Build Operate Transfer) system, IVRCL
has entered into the asset acquisition domain in the
v Bisalpur Dudu Water Supply & Transmission roads sector and targeting railways as well, to take up
Project PHED, Jaipur, Rajasthan. viable projects on BOT basis. The key projects bagged
v Kondapur Narsapally (Nagarjunasagar to by the Division are:
Hyderabad) MS Pipeline Water Supply Project
26
v National Highway Project (NH7) from Madurai v Academy Main Building, Married
to Kanyakumari NS 40 & NS 41 Packages Accommodation and Information Complex at
National Highways Authority of India. Ezhimala, Kerala Naval Housing Board.
v National Highway Project (NH 1) from v Construction of Seawoods Estate, Phase II

Jalandhar to Amrissar Km.407.100 to Km Housing at Nerul, Navi Mumbai CIDCO.
456.100 in State of Punjab on BOT Basis
National Highways Authority of India. v Construction of Building on Jalandhar
Kapurthala Highway Punjab Technical
v Road Projects in Rajasthan Pachpadra to Ram University.
Ji Ki Gol Road (PR2) and Alwar to Sikandra Road
(AS) RIDCOR, Rajasthan. v Construction of Residential Apartment
Concorde Mid-way City, Bangalore
v Major Bridges on Katra Laole section fo the Concorde Hitech City Pvt. Limited.
Udhampur Srinagar Baramulla Rail Link
Project Konkan Railway Corporation Limited. v Construction of Subji Mandi cum Parking
Complex and Pedestrian Walkway at Gangtok,
v Doubling of Mohol Solapur B.G.Line Project Sikkim.
on Chennai Mumbai Trunk Route Rail Vikas
Nigam Limited. v New Government Medical College and Hostel
Building at Bidar Government of Karnataka.
The company is also foraying into niche transportation
segments as elevated express ways, dedicated freight In the buildings sector, the company is actively bidding
corridors, growth corridors, metro and mono rail for Integrated Townships, SEZs, IT Parks, Biotech Parks,
projects, ring roads projects of major cities and metros. Automatic Parking lots and other such commercial
urban projects in several states, The company is
Hot in place Recycling Technology IVRCL is indeed strongly focusing on urban infrastructure and real estate
proud to be a part the of HITACHI GREEN ARM projects, the growth engines of urban construction
TELCON IVRCL CONSORTIUM to bring to India, activity all set to boom across length and breadth of
for the first time, the state-of-the-art Hot-in-Place Road the country.
Recycling Technology. This unique technology relays
existing road surfaces in a manner that not only After successfully completing two of the most
enhances the life of wearing course, but also makes prestigious residential projects, IVRCL is now focusing
roads more users friendly while achieving substantial on diversifying its project portfolio into real estate and
cost and timesavings. Your company is happy to retail sector with the construction of commercial malls,
announce that the first road project using this I.T. Parks, hotels and other edifices of tourist attractions
technology is nearing successful completion and in Hyderabad and other Tier I & Tier II cities of India.
several more enquiries are in the pipeline. IVR Prime Urban Developers Ltd., a 100 % subsidiary
of IVRCL shall be the niche player in the business of
Buildings & Industrial Structures real estate development, with the primary focus in the
areas of integrated townships, commercial complexes,
Like its other business divisions, the Buildings and SEZs, IT/ITES Parks, hotels, highway amenities and
Industrial Structures division of IVRCL stands out for other theme based architectural buildings.
its uniqueness in project versatility ranging from
industrial building projects to high rise apartment Power
complexes, government and non-governmental The Power Division has been at the forefront of
offices, airport terminals etc. The Company is playing business acquisition and has made vast strides and
a key role in executing a large number of married tremendous progress in acquiring and executing
accommodation projects for the defense personnel. projects. This division has grown by leaps and bounds
The Division has bagged some very prestigious orders, and is far ahead of its competitors and large players in
some of which are: rural electrification projects and those of the
Accelerated Power Development and Reform Program
27
(APDRP) and Rural Electrification works. The division Transmission Tower Manufacturing Facility - Not
is benchmarking itself with the best in the industry by content with its accolades in the power transmission
self-innovation to take on more complex projects projects in the hugely promising power sector, IVRCL
besides power transmission distribution, substations has taken up an inevitable, but a strategic backward
and HVDC projects in the power sector. Taking a cue integration measure to compliment its power business.
from the emerging opportunities in rural electrification, The company is setting up a transmission tower
IVRCL secured orders for supply and construction of manufacturing facility at Nagpur in Maharashtra on a
power distribution infrastructure in Uttar Pradesh from fast track basis and is all set to complete the project,
UPPCL (Uttar Pradesh Power Corporation Lt d.) under start to finish.
the Rajiv Gandhi Gramin Vidyutikarn Yojana. Funded
by the Rural Electrification Corporation, these projects Asset Acquisition
involved electrification of 1967 villages, with service The Indian Government is increasingly encouraging
connections for 17,935 BPL households. Public-Private-Partnership in social infrastructure
development through the Build-Own-Transfer model.
The current projects of the Power Division are : - The stupendous success of the BOT model in the roads
sector has led the Government to offer substantial road
v Rural Electrification works under Rajiv Gandhi lengths in the National Highways for construction via
Gramin Vidyutkaran Yojana on Turnkey Basis this route.
in Various Districts of Uttar Pradesh
Madhyanchal Vidyut Vitran Nigam Limited. IVRCL is best set to take advantage of the infrastructure
spread momentum of the central and state
v Rural Electrification works under Accelerated governments through the Public-Private Participation
Rural Electrification Programme (AREP) on (PPP) route and is leveraging its project expertise and
Turnkey Basis in Various Districts of Uttar management capabilities by actively foraying into
Pradesh Dakshinanchal Vidyut Vitran Nigam Asset Ownership involving projects on BOT / BOOT
Limited. / DBOOT models. Thus IVRCL is consciously working
towards moving up the value chain from the Cash
v Rural Electrification works on Turnkey Basis in Contracting to higher value-added Build-Own-
Bhagalpur District, Bihar Power Grid Operate-Transfer (BOOT) projects. In addition to
Corporation of India Limited. having successfully implemented projects in sewage
treatment, the Company now has a portfolio of over
v Construction of new & reconductoring of 33 Rs. 16 billion comprising three National Highway
KV, 11 KV & LT Lines of Mainpuri District under projects and a Seawater Desalination project. Hill
APDRP Scheme - Dakshinanchal Vidyut Vitran Ridge Springs, a fully integrated, multistoried, eco-
Nigam Limited. friendly residential complex spread over 50 acres with
a total built up area of 20 lakhs sft is a shining example
v 765 KV Sub-station Project at Sipat (Civil works) of IVRCLs confident step in the direction of asset
Alstom Distribution & Transmission Systems. acquisition.
v Rural Electrification works under on Turnkey

Basis in Purulia District of West Bengal
National Hydroelectric Power Corporation
Limited.
28
GROUP CORPORATE STRUCTURE
IV RCL INFRAS TRUCTURES & P ROJECTS LIM ITED
IVR P R IME IVR CL R OAD

GE O IVR CL HINDUS T AN IVR CL WAT E R IVR CL S T E E L IVR CL P S C IVR E NVIR O
UR B AN T OLL
E NGINE E R ING DOR R -OLIVE R INF R AS T R UCT UR E S CONS T R UCT ION & P IP E S P R OJE CT S
DE VE LOP E R S HOLDINGS
LT D. LT D. LT D. S E R VICE S LT D. P VT . LT D. P VT . LT D.
LT D. LT D.
JALANDHAR CHE NNAI

IVR HOT E LS S ALE M KUMAR A
WAT E R F IR S T S T P
SPVs j
AMR IT S AR
& R E S OR T S T OLLWAYS P ALAYAM
T OLLWAYS DE S ALINAT ION P VT . LT D.
LT D. LT D. T OLLWAYS LT D.
LT D. LT D.
Investments in the respective Project Specific Special Having firmly established in the major infrastructure
Purpose Vehicles are being effected through the sector sectors, namely water, roads, buildings and power,
holding companies as represented in group corporate your Company is briskly foraying into these emerging
structure above. The Company is actively engaged in sectors by leveraging its core competencies as a value
the envisioning and concretion of more such value- addition to its existing business areas.
intensive projects in the years to come.
Ø Sea Water Desalination EPCM / BOT
IVRCL has been upgrading itself at a feverish pace by
adding skills sets through Value Accretive Acquisitions Ø Hydro Power EPCM / BOT
such as Hindustan-Dorr-Oliver Ltd, a company with
proven expertise in the design and manufacture of a Ø Oil & Gas Pipelines &,
wide variety of process equipments for a cross-section Exploration
of industries including Paper and Pulp, Chemicals,
Pharmaceuticals, Mineral Beneficiation, Oil and Ø Mining Coal, Ferrous &
Petroleum Refineries. Non ferrous,
Hard Rock
IVRCL foray into BOT projects in the road, port, Metals & Minerals
railways and power sector carries a double-edged
benefit to execute the embedded construction contract Ø Railway Infrastructure Track works,
as well as capture the potentially huge upside from Signaling &
operating the running asset. We believe that the recent Telecom,
fund raising activities has been a preparatory step Electrification,
towards meeting financial pre qualification criteria Stations and
for participating in these BOT projects. Utilities.
Leveraging Core Competencies in Emerging Sectors Ø Highway Amenities Truck Terminals,

Infrastructure development across specific sectors such LPG Stations &
as sea water desalination, hydropower, oil and gas, Amenities.
ports, mining, railways freight corridors, highways
amenities and real estate and retail infrastructure Ø International Opportunities EPCM and
construction are some of the key sectors contributing O&M in Water
over 50 per cent of the revenues of the construction Sector
business in India. Given high GDP growth and sound
economic fundamentals, these sectors are poised for
a big leap forward.
29
A brief overview of IVRCLs entry into these sectors is would cover 276 port projects at an investment of Rs
given below: 600 billion by 2012. Further, 111 shipping and inland
water transport projects entailing an investment of Rs
Hydro Power 400 billion are expected to be completed by 2025.
The hydel - thermal power mix in India currently stands Also, in the Union Budget 2006-07 the government
in favour of thermal power at 25:75 as against the has proposed a study to identify a suitable location for
global mix of 40:60. However, the governments thrust a deep draught port in West Bengal.
on hydel power can be gauged from the fact that 36
percent of the planned capacity addition during the Also, states are increasingly seeking private
Tenth and Eleventh Plan is in hydel power. Under the participation for the development of minor ports. The
50,000 MW Hydro Initiative by 2012, which aims at Maharashtra Maritime Board has identified three minor
developing 162 schemes, the preliminary feasibility ports of Rewas, Dighi and Redi for development on
reports have been completed. Hydro projects, the basis of private participation. The Gujarat Maritime
especially dam-based projects, require a lot of Board is inviting proposals for seven intermediate ports.
construction activity as it involves rock blasting, The Orissa government plans to develop the ports of
tunneling and dam-related works. This translates into Dharma and Gopalpur while the Andhra Pradesh
a sharp increase in construction activity. IVRCL is government is in the process of developing the ports
executing the civil works for the Bhilangana Hydel of Gangavaram, Krishnapatnam and Machilipatnam.
Project in Uttaranchal and also bidding for EPCM With such tremendous potential in this sector, IVRCL
works of hydro projects and on BOT on a selective is venturing into on- shore and off- shore port works
basis. on EPCM basis and is also looking at viable BOT
projects in this sector
Oil and Gas
The deregulation of the oil and gas sector has opened Mining
up new investments across the upstream and India is endowed with significant mineral resources.
downstream segments. Exploration and production India produces 89 minerals out of which four are fuel
activity is on the rise with the government awarding minerals, 11 metallic and 52 non-metallic and 22
more blocks under successive rounds of the New minor minerals. The public sector contributes over 85
Exploration Licensing Policy (NELP) and increasing percent of the total value of mineral production.
foreign and private participation. The government has However, the government is committed to withdraw
offered 55 blocks under the sixth round of the NELP. from non-strategic sectors and accordingly, the public
The oil companies have set aside funds to redevelop sector undertakings are being privatized in a phased
and upgrade existing producing oil wells and gas fields manner.
for the next three to four years in order to boost the oil
recovery rates. In the coal-mining sector, presently, under the new
policy, captive mining of coal is allowed to companies
The construction of pipelines for gas is also proceeding engaged in the production of iron and steel, the
at a fast clip. GAIL and GSPL are setting up generation of power and the manufacture of cement.
infrastructure for gas transmission and distribution. A total of 143 captive coal blocks have been identified
Indraprastha Gas Limited Mahanagar Gas Limited are for allocation. These include 136 blocks of Coal India
also expanding their gas distribution networks in the Limited and seven of SCCL. Of these, 64 blocks have
surrounding areas of Delhi and Mumbai respectively. been allocated, and decisions on allotment have been
GAIL is also undertaking city gas distribution network taken with respect to another 22. The coal sector is
in 22 cities. focusing on greater liberalization allowing higher level
of private investments in coal mining. The passage of
Ports the Coal Mines (Nationalization) Amendment Bill,
Six major ports the Jawaharlal Nehru Port Trust, 2000 into law would allow the private sector to
Mumbai Port Trust, Cochin Port Trust, Kandla Port produce and sell coal freely. The Department of
Trust, Chennai Port Trust and Tuticorin Port Trust Industrial Policy and Planning is also mooting a
have drawn up plans to add a container terminal each. proposal to raise the FDI ceiling to 100 per cent for all
The government launched the National Maritime permissible activities in the coal sector through the
Development Programme in December 2005. This automatic route.
30
In view of the immense potential offered by the mining Our Niche Projects Under Execution
sector, the Company is actively venturing into this
sector leveraging on its existing experience and Ø Kalwakurthy Lift Irrigation Scheme
resources. The Company has executed a mining Irrigation & CAD Department, Government of
project in the over burden of over 2 million tons for Andhra Pradesh
Singareni Collieries Company Limited. It possesses
heavy earth moving equipment and trained Lift Irrigation scheme involving Detailed Investigation,
manpower. Besides, IVRCL has within its fold Soil exploration, Design, Supply, Testing and
Hindustan Dorr Oliver with proven abilities in mineral commissioning of pumping machineries, transformers,
beneficiation including design and fabrication of coal substations, rising main including construction of pump
washeries / beneficiation plants. The Company has house all civil & structural works, CM & CD works,
eminent mining experts as Consultants to advise on channels, delivery system, Excavation, Embankment,
mining projects. The company has submitted with and without lining etc. on Turnkey basis.
expression of interest in joint venture with reputed
overseas companies for some noteworthy coal and
mineral mining projects in the country.
Strategic Alliances to Strengthen Pre Qualifications
IVRCL has entered into Joint Venture Agreements and

project Specific Consortium Agreements and MOUs
for Strategic Alliances with several reputed Indian and
foreign partners with proven track record and
credentials of technical expertise in the emerging
sectors to keep it in a vantage point as a Lump Sum
Turn Key (LSTK) Infrastructure Development
Company to add value to our capabilities and
expertise in Front End Engineering and Design (FEED)
capabilities in the new and emerging niche areas of
infrastructure business sectors.
The company shall actively pursue options in the
Operations and Maintenance projects in water, Kalwakurthy Lift Irrigation System
environment and all our targeted businesses
independently or with joint venture partnership of Ø Barsingsar Thermal Power Project (2 x 125 MW)
international companies with relevant experience. Water Carrier System Neyveli Lignite
Your Company has presently entered into the following Corporation Limited.
business tie-ups with:
q BEFESA, SPAIN - Sea Water

Desalination
q CHINA RAILWAY
SHISIJU GROUP - Railways
q DRAGADOS GROUP,
SPAIN - Transmission Lines
q TELCON,INDIA-HITACHI-
GREEN ARM, JAPAN - Hot In Place
Recycling
Barsingsar Water Carrier System
q DUMAS MINING, A Water Carrier System Package from Indira Gandhi
CANADA - Mining Nahar Pariyojana Canal of Neyveli Lignite Corporation
31
Limited, Thermal Power Project at Barsingsar, Internet, Intercom, Telecom, TV and Mechanical
Rajasthan (2 x 125MW units) - Designing of Civil works etc. Underground water tank, pumps, pump
Structures like intake channels, Settling Tanks, Fore house ,Roads, paving, storm water drains Fire fighting
bay, Raw Water Intake Sump, Raw Water Pump system Transformers, Sub-stations, D.G. sets, Area
House, Designing of suitable Heads as per Hydraulics lighting, Lifts. Hard scaping, Land Scaping etc.
for Vertical Turbine Pumps. Laying, Jointing, Hydro-
testing and commissioning of GRP pipeline. Designing Rural Electrification Projects
of PLC /SCADA based controlled systems. Design,
Erection, Testing & Commissioning of approx.60 Kms Ø Rural Electrification works - Rajiv Gandhi Gramin
33 KV Transmission Lines Vidyutkaran Yojana on Turnkey Basis in Various
Districts of Uttar Pradesh Madhyanchal Vidyut
Ø Doubling of Mohol Solapur B.G.Line Project on Vitran Nigam
Chennai Mumbai Trunk Route Rail Vikas Limited.
Nigam Limited.
Ø Accelerated
Supply and Installation R u r a l
of Road Bed, Facilities, Electrification
Bridges, Track Programme
(Excluding Supply of (AREP) on
Rails, Tracks & Turnkey Basis
Sleepers) Signaling in Various
and General Electric Districts of Uttar
works in connection Pradesh
with Doubling of Dakshinanchal
Mohol Solapur Vidyut Vitran
B.G.Line (33.16 Kms.) Nigam Limited.
on Chennai Mumbai
Trunk Route of Maharashtra State. Rural Electrification
CIDCO Seawoods Estate Project Ø Construction of 11KV Over Headlines on AAAC

Weasel Conductor equivalent to ACSR Weasel.
Ø Construction of Seawoods Estate, Phase II
Housing at Nerul, Navi Mumbai CIDCO. Laying of Arial Bunch Conductor new LT Lines on
XLPE insulated conductor.
Business Operatives
Your Company is committed to continuous
improvement of its business operating practices in the
face of the ever-changing business scenario and
constantly expanding geographical locations and
spread of work sites across the country. The Company
has put in place a unique business matrix of a
combination of Business Divisions and Business
Regions to focus on each of the construction divisions
and geographic regions as Strategic Business Units and
Seawoods Estate Profit Centers. The four divisions - water and
environment, buildings and industrial structures,
Construction of Seawoods Estate Phase II in Sector transportation and power each headed by a Divisional
54, 56 & 58 (Part) at Nerul, Navi Mumbai. Housing Head designated as Chief Operating Officer (COO)
project comprising of C1, C2 & C3 type Buildings (Stilt and supported by a professional team of senior, middle
+ 18 Floors) with Internal & External Sanitary & Water and junior management staff at the strategic planning
Supply System and Electrical works Cabling for level, regions and work sites. The COO provides
32
strategy, leadership and guidance and is responsible decisions on corrective/preventive action are taken
for evolving the business plans and in decision making for immediate implementation, so as to ensure that
to achieve the said objectives. timely execution of the projects are achieved. IVRCL
has in place methods and systems to identify, evaluate
In addition to the divisions, there are 10 regional offices select and control our subcontractors, suppliers and
across the country representing the company in vendors. We look up on them as our Partners in
different parts of the country. A Regional In-charge is Progress and duly value their contribution in
Management Structure
responsible for generating business and to implement successful project execution and at the same time
projects in their respective regions. monitor the quality of their products and services to
match our internal quality standards.
Such an internal organizational matrix of divisions and
regions has enabled your company to become more Alignment of strategies to absorb changes, overcome
project focused at all levels and thereby ensure that challenges and to successfully grow:
all works are executed on schedule and as per
customers needs. Your Companys credibility in The Infrastructure Industry is transforming itself as seen
timely execution of projects within the given budgetary in detail in the discussion above. The financial markets
limits and contractual terms is a measure of its ability have also been transforming in this decade from a
to manage projects at all work sites and in all regions dominant debt market to become predominantly an
across the country. Your Company has in place a equity market.
Project Management Cell to closely monitor the status
and review the projects on the basis of a prescribed There have been changes in the components like, HR,
MIS system. There are scheduled monthly project Risk Profiles, Redefined Roles, etc of the Company,
review meetings chaired by the Chairman of Chief its subsidiaries and joint ventures from 2004-05 to
Operating Committee and attended by COOs of the 2005-06 and in the coming years more such changes
businesses, project managers and heads of regions and in line with the changing imperatives in this industry
departments, including business development, and the market discussed above loom large on the
finance, secretarial, legal, commercial, etc., during radar. The competition, responding to these changes
which each of the projects is reviewed in detail and and transformation, is also adopting new strategies,
and practices to manage growth.
33
IVRCL, to be ready to meet growth challenges and to Developing optimal solutions and implementing
adapt to inevitable changes in the industry technologies for safe environments are a firm must
environment, has engaged one of the leading global across all divisions, regions and work sites at IVRCL.
business strategy consultants, M/s Deloitte Touche The Company has in place technologies with low
Tohmatsu India, who are continually guiding the senior emissions, noise reduction and safe working conditions
management team at IVRCL, to align its strategic for the employees besides ensuring an intrusion free
business design performance drivers at all its main environment for people inhabiting the surrounding
offices and, align its execution performance drivers at areas. IVRCL has always been appreciated across the
all the project activity sites with those imperceptibly industry for its exemplary vision in mitigating the
creeping changes and transformation having undesirable consequences of building activities on the
perceptible impact on our business. The company is environment. Having committed that there is no
making good progress in its strategic business planning holiday for safety, your Company has been receiving
endeavors and by the turn of this year 2006, these awards and appreciation for longest accident-free man
endeavors are expected to bear fruit. hours from prestigious clients like NPCL, NTPC,
CIDCO, RUIDP among several others.
Our Human Resource Pool
The Companys talent base is drawn from premier M/S International Standards Pty ltd., Australia has
organizations across the country and spans various recommended IVRCL for the following ISO
industries- Construction, Finance, Human Resources, Certifications:
information Technology. IVRCLs people have a wide
range of skill sets spanning project, corporate and ü ISO : 9001 2000 Quality Management System
general management. The company has also Recertification
embarked on campus recruitments and employment ü ISO : 14001 2004 EMS for Water division
drives to bring fresh graduates and diploma holders ü ISO : 18001 1999 OHSAS for Water division
into its fold and provide a platform for an in-house
on- the- job training to make men out of boys. Strong Conclusion
and committed in house HRD policies and actions For India, it is the best of times and a new beginning
provide a highly stimulating and motivating has just begun - the dawn of the Infrastructure Era,
environment for each IVRite. the kind of economic growth holding out new promise,
hope and challenges - unimagined and undreamt,
Health Safety Environment Quality (HSEQ) unfolding before us in all its hugeness, magnificence
These four factors form the cornerstones of our blemish and grandeur. We, at IVRCL are indeed very excited
less track record in project execution and to belong to these times to make it happen and
management. "Every day" is Earth Day at IVRCL, for become one of the chapters of this great story called
the Company believes, that we have not inherited the infrastructure development. Our people and our
Earth from our ancestors, but have merely borrowed values are our two key scalable prepositions, which
it from our children. To leave it intact, therefore tops shall continue to drive us further on in our quest to
the agenda of the achievable responsibilities of the blaze new trails and share our success and joy with
Company. our customers, investors, employees and the nation at
large.
34
RISK MANAGEMENT
The Engineering and Construction business is not bereft including various risks that impact our business and
of several risks. The company recognized these risks the effectiveness of the mitigation measures, while
which impact its business. The company constituted insurance is adequately used for transfer of risks. The
the Project Monitoring Cell, which reports to the Chief concept of Risk Management is approached from the
Operating Committee (COC). The COC meets every point of view of Continuity of Business in any
month and reviews the progress of project executions eventuality.
The major risks associated with our business and the mitigative steps evolved by the company are tabulated
below:
Sl. Type of Risk Nature of Risk Measures adopted for

No. mitigation (De-risking strategy)
1 Environmental Risks - Handing and storage of a. Strict adherence to maintenance/

hazardous materials like detonators inspection schedule, training and
- Pollution of environment emergency/disaster management
where crushers operate plans
b Implementation of Process Safety
Management System, ISO-14001
(environmental management
system) for Head Office, Regional
Offices and Water Division and its
related sites and ISO-18001:1999
(for Occupation, Health and Safety
Management (OHSAS) for Head
Office, Regional Offices and Water
Division and its related sites being
extended to buildings, sites.
2 Regulatory Risks - Uncertainties with respect to Seek opportunities for better

government policies affecting control on costs and reduce the
our business area of uncertainty, so that
impact of adverse changes in
policies is limited
- Compliance with legal, taxation, a. Training and Audit of Statutory
corporate and other regulations compliances.
b. Enforcement of Code of Conduct.
c. Declaration/certifications by Man-
agement Team on compliances.
d. Transfering obligations to sub-con-
tractors.
3 Economic Risks - Increased number of players To enter into high value projects
(Business Related affecting competition and where small players are eliminated
Risks) profitability
- Inadequacy of Pre-qualification a. Joining hands with others having
necessary technical qualifications
to fill up gap in pre-qualifications.
35
b. Promotion of specialties and cre-

ation of brand image and tie-ups
with technically competent compa-
nies/ firms/ persons.
4 Operational Risks - Equipment breakdowns a. Regular preventive maintenance
and Onsite emergency plans;
b. Improved training for compliance
with operating procedures
- Non-availability of critical raw a. Long-term strategic alliances/
materials like steel and cement supply contracts for all critical raw
materials.
b. Developing alternative sources of
raw materials and flexibility for us-
age of raw materials from different
sources
- Volatility in the prices of key a. Increased raw material storage
raw materials facilities and long-term contracts
b. Linking the prices to the wholesale
price index wherever possible so
long as the contract permits
c. Careful advance procurement
planning for raw materials
d. Regular augmentation of storage fa-
cilities
- Time over runs in execution Close monitoring of project execu-
tion for achieving set milestones
and alerting the clients for delays
on their part.
- Loss/damage due to natural Ensuring adequate insurance cover
calamities for transfer of such risks.
5 Financial Risks - Credit risks impacting working a. Close monitoring of receivables
capital and translating into bad
debts b. Ensuring Strong cash generation
from operations
c. Pre credit analysis of the parties.
- Exchange fluctuation risks Prudent forex management
practices to hedge the foreign
currency exposures
- Interest rate/currency risk resulting a. The company has a relatively low
in increase in cost of borrowing gearing with healthy debt equity
ratio and interest cover ratio,
reflecting strong debt servicing
capability
b. Healthy credit rating facilitating
borrowings at relatively lower rate
of interest
36
c. Where market trend of increasing

interest rates is expected the risk is
hedged by taking higher interest
rate into consideration at the time
of tendering for new projects
- Liquidity risk resulting from a. Close follow-up with government
delayed receivables departments
b. Adequate working capital facili-
ties from banks to bridge tempo-
rary fund requirements
c. Elongating the credit period from
creditors.
6 Legal and Statutory - Contractual liabilities risks a. Review of all material contracts
Risks that may impose onerous by the Project Monitoring Cell
responsibility and in-house legal team
- risk of non-compliances of b. Advice from reputed independent
statutory obligations for Legal Counsel in respect of
reasons beyond control. important contracts
c. Coverage through Insurance
wherever possible.
In addition to the risks detailed above, there are also risks etc. These are mitigated through back-up
other risks including those related to people, I.T mechanism for I.T., authorization verification, regular
systems which can result in loss to the company, loss training programmes, cross-verifications, succession
of data leading to disruption in operations, political planning and other ameliorative measures.
FINANCIAL PERFORMANCE:
The state of the financial position, presented in the During the year, the Companys equity share capital
Balance Sheet as at March 31, 2006 are discussed increased by Rs 44.08 million. The paid up share
below: capital as at March 31, 2006 stood at Rs 213.88
1. SHARE CAPITAL million.
In terms of the Guidance note issued by the ICAI, the
During the year, each equity share of the face value Option outstanding under ESOP 2000 and ESOP
of Rs. 10/- was subdivided into five equity shares of scheme 2004 have been shown at the exercise price
Rs. 2/-, effective from 4th March 2006. fixed by the compensation committee. Amount Rs.1.26
The authorized share capital of the Company consists million representing 5800 No. of Options outstanding
of 175,000,000 equity shares of Rs 2/- each amounting to be exercised for conversion to equity in 1:5 ratio as
to Rs 350,000,000 and 25,000,000 preference shares a consequence subdivision of shares of Rs 10/- in to
of Rs 2/- each amounting to Rs 50,000,000. five shares of Rs 2/- each.
37
A statement showing movement of share capital is given below:
2006 2005
Equity Rs. million Equity Rs. million

Shares(No.) Shares(No.)
Face value(Rs 2) Face value(Rs 2)
Balance at the beginning 84,898,500 169.80 53,094,500 106.19

of the year
Shares issued- Public issue 18,341,700 36.68 31,200,000 62.40
Private Placement
Shares issued upon conversion 2,000,000 4.00 - -
of warrants
Shares issued upon conversion
of options granted under:
ESOP: 2000 plan 7,500 0.02 604,000 1.21
ESOP: 2004 plan 1,690,200 3.38 -
Balance at the end 106,937,900 213.88 84,898,500 169.80

of the year
2. RESERVES AND SURPLUS As reduced by:

Depreciation on the revalued portion of these assets
Security Premium Account: till March 31, 2006 is Rs 0.18 million.
The addition to the security premium account of Rs General Reserve:

1,367.27 million during the year is due to the premium
received on issue of 18,341,700 shares by way of Out of the profits for the year Rs 500 million has been
public offer, 2,000,000 shares on conversion of share transferred to general reserve and balance of Rs 304.10
warrants and 1,697,700 shares on exercise of options million (after providing for dividend) has been retained
under the ESOP 2000 & 2004 Scheme, as reduced by in the profit and loss account.
the expenses of Rs 142.15 million incurred on issue
of Shares, Foreign Currency Convertible Bonds and The total Shareholder funds of the Company stood at
redemption premium. Rs 4,769 million net of stock options as on March 31,
2006 as compared to Rs 2,553 million (net of share
Revaluation Reserve: application) as on March 31, 2005. The book value
per share, having face value of Rs.2/-per share,
The revaluation reserve amount of Rs 28.57 million increased to Rs 44.61 as of the current year end
as on March 31, 2006 represents: compared to Rs. 30.08 as of the previous year end
Revaluation of some Freehold lands carried out during registering an increase of 48.30%.
1994 by a certified valuer giving rise to an addition of
Rs 7.76 million.
Revaluation of additions to freehold land, carried out
during 2001-02 giving rise to an addition of Rs 18.79
million.
Revaluation of buildings carried out during 2001-02
giving rise to an addition of Rs 2.20 million aggregating
in all to Rs 28.75 million.
38
3. SECURED LOAN
The details of Secured Loans are discussed below:
March 31, 2006 March 31, 2005

(Rs. million) (Rs. million)
Term Loan(Project Specific) 712.50 676.37

Term Loan 317.28 218.99
Working Capital Loans:
Project-specific 601.98 363.66
From consortium banks 1,008.80 595.69
--- ------
Total 2,640.56 1,854.71
---
The Company has taken term loans to finance requirements of high value projects separately so as
purchase of plant, machinery, equipment and vehicles to ensure financial discipline on repayment of the
specific to certain projects and for the Company as a loans.
whole. The amount of loan availed as on March 31,
2006 increased by Rs.134.42 million i.e.15% as The Company has also availed working capital loans
compared to the amount of loan availed as on March from a nine-member consortium banks to finance
31, 2005. infrastructure projects where no project-specific
funding have been done. The limits are optimally
The Company has availed Project-specific working operated with all the member banks in the consortium
capital loans for certain major projects to meet the duly meeting the requirements of these banks in
working capital requirements of those specific projects. compliance with the terms of the loan agreements with
The Companys policy is to finance the working capital them.
4. UNSECURED LOAN
The details of Unsecured Loans are discussed below:
March 31, 2006 March 31, 2005

(Rs. million) (Rs. million)
Public Deposits 13.11 37.01

Banks & others 1,231.65 580.00
Foreign Currency Convertible Bonds 2,900.95 -

Total 4,145.71 617.01

The Company has repaid Rs 23.90 million towards course of business. All these loans are due for
public deposit during the year. No fresh deposits were repayment within the current financial year ending
accepted during the year as per the decision of the March 2007.
Company not to accept any public deposit.
During the year the Company has issued at par, 5 years
The Company has availed short term unsecured loan and 1 day zero coupon US $ denominated Foreign
of Rs 1,231.65 million (Rs 500 million during previous Currency Convertible Bonds (FCCB) aggregating to US
year) from some banks and financial institutions during $ 65.00 million (INR 2,980 million as on the date of
the year to bridge temporary needs in the ordinary issue) at an YTM of 7.25% to finance capital
39
expenditure and investment in BOOT/BOT projects The bonds worth US $ 9.60 million have been
including import of capital goods and direct investment surrendered after March 31, 2006 till the close of the
in joint ventures or subsidiaries related thereto. The business hours of the Company on June 01, 2006 duly
bonds are bearer bonds redeemable with an option exercising the option for conversion into equity shares.
to convert at a conversion price of Rs 1,170.17 per
share on or before November 29, 2010.
5. FIXED ASSETS
(Rs million)
March 31, 2006 March 31, 2005 Growth(%)
Gross book value 1,580.10 1,107.10 42.7%

Less: Accumulated depreciation 472.75 366.07 29.1%
& amortisation
Net block 1,107.35 741.03 49.4%
Add: Capital work-in-progress 266.10 215.80 23.3%

Net fixed assets 1,373.45 956.83 43.5%

Depreciation
as a % of revenue 0.7% 0.8%
as a % of gross block 7.0% 7.3%
Accumulated depreciation 29.9% 33.1%
as a % of gross block
During the year, the Company has invested Rs.523.30 7. INVESTMENTS

million (net of deletion) towards the addition to fixed
assets including capital work in progress. The additions The Infrastructure projects in the country is moving
are mainly in plant and machinery Rs. 114.49 million, towards PPP / BOT /BOOT projects. The company
Centring equipment Rs.163.98 million, vehicles has created holding companies which would
Rs.75.54 million and earth moving equipment undertake and invest in specific sectors, like Water,
Rs.53.16 million and 50.30 million in the form of Transportation and Urban Infrastructure, apart from
Capital work in progress. The Company has taken up strategic investment in Hindustan Dorr-Oliver Ltd.
more projects in the roads & transportation and Total investment in these subsidiaries as at March 31,
buildings sectors, where the requirement of machinery 2006 is Rs 2,737.74 million as against investments as
and equipment is higher. The Company has at March 31, 2005 of Rs. 313.65 million.
improved its prequalification in terms of equipment
base, this also reduces the hire charges in some 1. IVR Prime Urban Developers Limited To
projects. undertake and invest in projects relating to
townships, mega malls, real estate property
6. DEFERRED TAX ASSETS & LIABILITIES development, etc.
The Company accounts for deferred tax in compliance 2. IVRCL Road Toll Holdings Limited To
with the Accounting Standard 22 issued by the Institute undertake development and invest in projects
of Chartered Accountants of India. The Company has relating to state/national highways, Roads and
recognised deferred tax expenses of Rs 10.59 million bridges, transportation facilities etc. on BOT/
during the year. Net deferred tax liability represents BOOT basis.
timing differences in the financial and tax books arising
mainly from deprecation on assets, provision for 3. IVRCL Water Infrastructures Limited To
doubtful debts / advances and for public issue undertake and invest in projects relating to
expenses. development of infrastructure facilities for
water treatment, water desalination etc. on
BOT/BOOT basis.
40
IVR Prime Urban Developers Ltd. 1 (Jalandhar-Amritsar Section) in the state of

Punjab on BOT basis. The total project cost has
IVRCL has made equity investment of Rs 400 million been estimated at Rs 2,962.5 million.
which has developed premier deluxe apartments and
villas in a prime location in Hyderabad. It is also 2. Salem Tollways Limited To undertake the work
developing mega malls, hotels etc. in cities like of Designing, Construction, Development,
Chennai, Bangalore, Pune, Hyderabad and NCR. Finance, Operation and Maintenance of KM 0.00
(Salem) to KM 53.00 (Kumarapalayam) on NH-
The subsidiary has achieved a turnover of Rs 1,364.25 47, in the state of Tamilnadu on BOT basis. The
million and PAT of Rs 117.80 million for the year total project cost has been estimated at Rs 4,698.
ended March 31, 2006 as compared to turnover of Rs million.
218.49 million and PAT of Rs 6.87 million during the
previous year. 3. Kumarapalayam Tollways Limited- To undertake
the work of Designing, Construction,
To capitalise on the opportunities arising from rapid Development, Finance, Operation and
urbanization, demand-supply gaps and the increasing Maintenance of KM 53.00 (Kumarapalayam) to
trend towards organized retailing in Hyderabad, the KM 100.00 (After Chengapalli) on NH-47, in the
Company is setting up a destination state of Tamilnadu on BOT basis. The total project
Shoppertainment mall in the Cyberabad region of cost has been estimated at Rs 3,798.30 million.
the city. The proposed site is located within a distance
of 0.5 km. from the old Bombay Highway(NH-9) and IVRCL Water Infrastructures Limited.
is connected by a 4-lane road. The site is adjacent to
National games village and Indian School of Business. The Company has made equity investment of Rs
With a gross built-up area of 12,00,000 sft., the state- 119.40 million and is a subsidiary, formed with the
of-the-art Rockridge Mall will cover 5,50,000sft, and main object to invest in water related BOT/BOOT
the balance 6,50,000sft. will be provided for the new projects. The subsidiary has already formed a wholly
software corporate offices. There will be an extensive owned subsidiary named Chennai Water Desalination
and safe parking facility for nearly 4000 cars in the Limited to undertake desalination of sea water in
basements and on-site. 9-lac sft. of parking area is Chennai. The contract is on BOOT basis with the Govt.
distributed over 3 basements. The Rockridge mall will of Tamil Nadu. The total cost of the project is Rs 473.00
boast of a gamut of entertainment options, ranging million.
from food courts, entertainment plaza, science centre,
to a multiplex of 7 cinema theatres. The world The subsidiary has also purchased the equity holding
renowned Bentel Associates are the Architectural in First STP Private Limited from IVRCL. First STP
Consultants for this prestigious project. Private Limited has set up a sewerage treatment plant
in Alandur, Chennai for treating 12 MLD of urban
IVRCL Road Toll Holdings Limited. liquid effluent from residential units of the
Municipality.
IVRCL has made equity investment of Rs 1,666.97
million. The subsidiary has been formed with the main Hindustan Dorr-Oliver Limited
object to invest in BOT/BOOT projects relating to the
roads and transportation sector. The Company has IVRCL has acquired over 70% shares for Rs 539.96
invested in three Special Purpose Vehicles (SPV) to million of the Company from the Jumbo group on
Build Operate and Transfer Roads projects through a September 09, 2003. IVRCL holds 51.15% on issue
concession agreement with National Highways of preferential equity by the subsidiary during October
Authorities of India (NHAI). 2005.
1. Jalandhar Amritsar Tollways Limited - To The subsidiary is engaged in the business of providing
undertake the work of Improvement, Operation Engineering & Turnkey solutions, Technology and EPC
and Maintenance including strengthening and installations in liquid solid separation applications in
widening of existing 2- lane road to 4-lane duel various industries like mineral processing and
carriageway from KM 407.1 to KM 456.1 of NH- benefication, Pulp and paper processing, fertiliser &
41
chemical and environmental management. The 31, 2006 as compared with amount of Rs 3,065.69
subsidiary is one of the major players in the industry million as at March 31, 2005. These debtors are
and has achieved a turnover of Rs. 1,438.77 million considered good and realisable.
and PAT of Rs. 64.74 million for the year ended March
31, 2006. Debtors are at 31.2% of revenues for the year ended
March 31, 2006, as compared to 29% for the previous
Other investments of Rs 27.04 million made, also on year, representing an outstanding of 114 days and 106
long term basis, mostly in Shares of Joint ventures/ days of revenues for the respective years. The higher
associates and others such as bonds etc. debtors number of days outstanding in 2006 is mainly
due to the higher percentage of turnover achieved by
8. SUNDRY DEBTORS the Company in the last quarter i.e. 39.6% of the total
turnover for the year in 2006 as compared to 33.1%
Sundry debtors amount to Rs 4,765.33 million (as in 2005.
reduced by provision for doubtful debts) as at March
9. CASH & CASH EQUIVALENTS

(Rs. million)
March 31, 2006 March 31, 2005
Cash/Cheques on hand 29.76 13.91

Bank balances:
Current Accounts 417.15 499.90
Escrow Account-Public issue - 3,629.84
Fixed Deposit - Margin 157.76 217.15
Fixed Deposit - others 790.00 165.96
Fixed Deposit-Foreign currency 1,048.81 -

2,443.48 4,526.76

Cash on hand Rs 29.76 million is considered adequate This mainly consists of deposit lying with Government
in meeting day to day needs of the growing business departments like Sales tax, Electricity Board,
and balances in bank current accounts Rs 417.15 Telephones etc and EMD with the clients. The steep
million are spread over project sites at various locations increase over the previous year is mainly due higher
to meet day to day requirements of the project volume of project bids participated and business done
management and includes client bill proceeds during the current year.
received and deposited at the year end but realised
subsequent to the balance sheet date. 10. OTHER CURRENT ASSETS
The margin money kept with banks as FDRs relate to The amount under this heading mainly consist of:
guarantees and letters of credit issued by banks on Unbilled Revenue Rs 2,603.22 million (Rs 2,345.34
behalf of the Company in favour of various clients and million)
material suppliers respectively. Fixed deposits-others
include Rs 400.00 million, being money retained out This represents amounts to be billed to some of the
of the public issue of equity shares to be utilised for contractee clients in respect of revenue earned under
the objects of the issue. the percentage completion method, followed by the
Company, as reduced by that portion of such revenue
Fixed Deposit-Foreign currency represents the balance already billed and receivable from those clients.
amount of US $ 23.50 million kept as fixed deposit in
ICICI Bank, Baharain out of the total Foreign Currency This unbilled revenue recoverable is a dynamic figure
Convertible Bonds of Rs 65.00 million issued during every quarter in as much as the revenue earned is
the year. arrived at every quarter under the same method duly
42
adjusting in those quarters the billed revenue as well corresponding previous quarter.
as the unbilled revenue carried over from the
(Rs in millions)
Status of Unbilled Revenue For the Year For the Year Growth
Ending Ending in %
March 31, 2006 March 31, 2005
Billed Revenue 14,921.04 9,340.37 59.75

Unbilled Revenue
Closing Unbilled Rrevenue 2,603.22 2,345.34
Less Opening Unbilled Revenue 2,345.34 257.88 1,157.78 1,187.56 -78.28
15,178.92 10,527.93 44.18
Retention Money Rs 1,068.45 million (Rs 496.52 11. LOANS AND ADVANCES
million)
Tax deducted at source and advance tax net of
This account represents the amounts retained by the provisions Rs 444.47 million (Rs 295.83 million)
clients towards performance security as a guarantee
for satisfactory performance of the infrastructure This mainly consists of tax deducted at source from
projects executed by the Company. The Company contract revenue by the clients as per the provisions
has not received any demand for claim from any of of the Income Tax Act, 1961 as reduced by the income
the clients and hence all these amounts are treated as tax provisions made and assessed (undisputed). All
good for recovery except an amount of Rs 4.09 million undisputed liabilities have been fully adjusted against
considered doubtful of recovery for which provision this account.
has already been made. The increase over previous
year correspond with turnover growth in current year. Loans to Subsidiaries Rs 128.64 million (Rs 315.23
Other deposits Rs 650.69 million (Rs 207.73 million) million)
This mainly consists of deposit lying with Government These amounts as loans have been provided to the
departments like Sales tax, Electricity Board, subsidiaries for their strategic business ventures which
Telephones etc and EMD with the clients. The steep has already started giving fair returns. The subsidiaries
increase over the previous year is mainly due higher have also been able to repay substantial portion of
volume of project bids participated and business done the loans. The subsidiary wise details of loans are as
during the current year. follows:
Sl No Particulars of Subsidiary Amount (Rs in millions)

As on 31.03.06 As on 31.03.05
1. IVR Prime Urban Developers Ltd 15.51 237.59

2. IVRCL PSC Pipes Pvt. Ltd. 10.21 11.05
3. IVR Enviro Projects Pvt. Ltd 26.56 26.01
4. FIRST STP Pvt. Ltd. 20.08 40.58
5. IVRCL Water Infrastructures Ltd (new) 38.80 -
6. Other Subsidiaries (new) 17.48 -
Advances recoverable in cash or in kind or for value suppliers, sub-contractors, labour contractors etc.,
to be received (Secured & Unsecured) Rs 442.17 which are partly adjusted in the subsequent periods
million (Rs 182.98 million) and the balance would also be recovered from their
bill of services or otherwise. Hence all these amounts
The account represents advances paid to various outstanding are considered realisable.
43
12. CURRENT LIABILITIES
Amount (Rs in millions)

As on 31.03.06 As on 31.03.05
Advances received from 1,421.34 487.50
contractee clients
Trade deposits 87.19 70.07
Sundry Creditors 3,817.80 3,491.73
Other liabilities-Share application to - 2,180.85
be refunded
Other liabilities-Others 64.87 52.50
-
5,391.20 6,282.65

Advances received from Contractee-clients are the has remitted the statutory liabilities on or before the
advances provided to the Company in the nature of respective due dates.
short-term liabilities, which are recovered by the client 13. PROVISIONS
from bills. 42 % of the advances bear an interest cost
at an average rate of 9% p.a and others are interest Proposed dividend of Rs 108.82 million (62.96 million)
free. The Company has also provided bank guarantees represents the dividend recommended to the
for almost all of these advances. shareholders by the Board of Directors. This will be
paid after the Annual General Meeting, upon approval
Sundry Creditors represent amount due to suppliers, by the shareholders. Shares allotted on conversion of
sub-contractors, labour contractors and other service FCCB worth US $ 9.60 million have also been
providers. Through confirmation of account balances considered for the payment of dividend.
and a system of reconciliation of supplies and services
to the Company, all known liabilities incurred to earn Provision for tax on dividend Rs 15.26 million (Rs 8.83
the gross revenue have been fully captured and million) denotes taxes payable on dividends declared
accounted for during the year under discussion. for the year ended March 31, 2006.
Gratuity and Leave encashment provisions have been
Other liabilities represent all statutory dues such as
made as per the actuarial estimation and certification
PF, ESI, TDS, Sales Tax etc payable by the Company
by an independent Actuary as per the relevant
relating to the month of March 2006. The Company
accounting standard requirement.
Operational Performance:
14. INCOME RECOGNISED

As on 31.03.06 As on 31.03.05 % Growth
Income from Operations:
Gross work bills 15,178.92 10,527.93 44.2%
Other income from operations 35.31 19.40 82.0%
Other Income 57.47 24.11 138.4%

15,271.70 10,571.44 44.5%
Less: Indirect Tax 257.25 109.36 135.2%

15,014.45 10,462.08 43.5%

44
Gross work bills represent revenue earned till end Where the estimated total expenses of any contract/s
March 2006, on long term construction contracts, exceed the contract revenue, resulting in an estimated
where revenue is recognisable over time as the work loss, such loss, to the extent expected to be certain, is
progresses rather than at the completion of such provided for and charged to profit and loss account,
contracts. In most long term construction contracts, it in the year when loss is estimated Price escalation
is an established principle that the contractee client claims and claims for cost incurred by the Company
has the legal right to require specific performance from for variations/deviations to the terms, conditions and
the contractor to the effect the client acquire ownership period mentioned in the contract revenue only when
claim to the contractors work-in-progress. In turn, the negotiations have reached such advanced stage to
contractor acquires legally enforceable rights to conclude that it is probable that the customer will
require the client to make payments progressively accept the claim.
against the work executed/ costs incurred in due The Company continues to earn its major contract
performance of those contracts. Hence, the substance revenue from water and water related projects, which
of the construction business activity is that revenue is account for 56.6 % of the total revenue. The other
earned continuously as the project progresses. This projects such as building and industrial structures
principle is well established in the accounting accounted for 17.6 %, transport infrastructures like
standard, AS 7 (revised 2002) issued by the Institute of roads, rail tracks and bridges 6.2 % and power
Chartered Accountants of India. infrastructures like transmission lines, substations etc.
19.6 %.
15. PROFITABILITY & GROWTH
As on 31.03.06 As on 31.03.05 % Growth
Net Income 15,014.45 10,462.08 43.5%

Expenditure:
Construction expenses 12,963.80 9,138.58 41.9%
Administration & other expenses 650.30 434.50 49.7%
-
Operating Profit (PBIDTA) 1,400.35 889.00 57.5%
Interest & finance charges 253.13 214.10 18.2%
Depreciation/Amortisation 109.97 80.23 37.1%

Profit before Tax (PBT) 1,037.25 594.67 74.4%
Provision for Tax 107.70 27.59 290.4%

Profit after Tax (PAT) 929.55 567.08 63.9%

PBIDTA as a % to Net Income 9.3% 8.5%
PBT as a % to Net Income 6.9% 5.7%
PAT as a % to Net Income 6.2% 5.4%
Construction Expenses:
As on 31.03.06 As on 31.03.05 % Increase
Construction & other materials 6,681.43 3,987.18 67.6%
Sub-contractors work bills 3,240.32 2,370.20 36.7%
Masonry & other works 2,690.58 2,513.28 7.1%
-
12,612.33 8,870.66 42.2%
Repairs & Maintenance 145.92 87.04 67.6%
Machinery hire charges 167.62 151.12 10.9%
Other construction expenses 37.93 29.76 27.5%
-
Total 12,963.80 9,138.58 41.9%

45
The increase in the prime cost i.e. construction The increase in the repairs and maintenance expenses
materials, sub-contracts and masonry & other works is relatable to increase in the fixed asset base.
are in line with the increase in gross work bills. The
major items of construction materials are steel, cement, The increase in other construction expenses such as
pipes, oil and fuel etc. The margin expansion is on Electricity charges, Laboratory testing charges etc. are
account of the Company being selective in bidding marginal.
for higher margin projects. Majority of the contracts
of the Company are covered by Price Escalation
Clause.
Administration and other Expenses: Amount (Rs in millions)

Payment to employees 440.62 269.84 63.3%

& employees related payments
Travelling & conveyance 28.72 19.35 48.4%
Printing & stationery 15.61 7.49 108.4%
Communication expenses 21.04 13.81 52.4%
Rent 16.72 7.70 117.1%
Legal & professional charges 30.44 16.78 81.4%
Insurance 26.81 12.61 112.6%
Other expenses/provisions 70.34 86.92 (19.1%)
-
Total 650.30 434.50 49.7%
-
Employee cost The increase in the employee cost Legal & professional charges Increase under this head
by 63.3% is due to increase in the employee strength is due to engaging consultants in areas such as OHSAS,
to around 2300 employees in year 2006 from 1350 HR and strategic business planning which has become
employees in 2005 in view of the increased operations necessary because of the growing business size and
and annual incremental salaries. The Company is in dimensions.
the process of recruiting additional man power at
different levels in view of the substantial growth in Increase in other heads of expenditure such as
the volume of operations. Travelling & conveyance, Printing & stationery,
Communication, Business promotion, Office
Insurance The increase is due to providing adequate maintenance and Rent are because of the increase in
insurance coverage for the existing sites and increase the number of project sites during the year. The above
in the number of new sites during the financial year. expenses are also semi-variable in nature and hence
the increase is partly in proportion to the increase in
the turnover.
Interest and Finance charges:
Interest on fixed loans 32.40 10.54 207.4%
Interest on other credit facilities 268.30 210.26 27.6%
Bank & financing charges 62.75 58.26 7.7%

Total 363.45 279.06 30.2%
Less: Interest received from banks 110.32 64.96 69.8%
& others

Net Interest & finance charges 253.13 214.10 18.2%

46
The increase in the total Interest & finance charges by income as compared to Rs. 889.00 million,
30.2% is in line with turnover growth. representing 8.5% of Net income during the previous
year.
Interest income represents interest earned on the
deposits kept with banks towards margins against Bank Profit before extraordinary item and tax as a
Guarantees and Letters of Credit and interest on percentage to Net Income works out to 6.9% for the
unutilised portion of the Public issue kept as fixed year when compared to 5.7% for the previous year.
deposit with banks, adjusted against the Interest and The increase in the PBT is mainly because of savings
Financial costs. This also includes sizable interest in the operating cost. There has also been a marginal
earned on fixed deposit in foreign currency made out saving in the finance cost.
of the unutilised portion of the FCCB issue. Profit for the year after tax (PAT) as a percentage to
Net Income works out to 6.2% when compared to
Depreciation and Amortisation Rs 109.97 million 5.4% for the previous year.
(Rs 80.23 million)
Depreciation on all assets have been provided at the The Company has made provision for current income
rates and method as adopted in the previous year. tax for the year Rs. 89.16 million as against Rs 46.63
There is no change in the accounting policy as regards million during the previous year and Fringe benefit
charge of depreciation and the same is in compliance tax Rs 7.95 million. The Company has continued to
with the provisions of the Companies Act, 1956 and claim deduction under Section 80 IA of the Income
the relevant accounting standards. The increase in Tax Act, 1961 on the basis of professional advice
depreciation is in line with the additions to the gross obtained by the Company and favourable case laws
block of fixed assets. already available in similar cases on the applicability
of the exemptions under Section 80 IA.
16. OPERATING PROFIT & TAXATION
The Company has arrived at deferred tax assets and
The Company earned an operating profit (PBITDA) of liabilities in compliance with the Accounting standard,
Rs. 1400.35 million, representing 9.3% of the Net AS-22 and debited an amount of Rs 10.59 million to
the profit and loss account for the year.
47
Annexure B to Directors' Report Report on Corporate Governance

1. IVRCL PHILOSOPHY ON CORPORATE GOVERNANCE
The Company believes in transparency, empowerment, accountability and integrity in its operations having
duly delegated authority to the various functional heads who are responsible for attaining the corporate plans
with the ultimate purpose of enhancement of stake holder value.
This philosophy has guided the operations and the functioning of the Company. In the process of achieving
corporate goals, the Company has always been taking the spirit of various legislations as guiding principles and
has gone well beyond simple statutory compliance by instituting such systems and procedures as are required
to make the management completely transparent and institutionally sound. This is a continuous process in the
Company, to improve upon the past experience.
The Company has professionals on its Board of Directors who are actively involved in the deliberations of the
Board on all important policy matters.
2. BOARD OF DIRECTORS
i) The Company has a Non-Executive Chairman during the financial year and the number of Independent
Directors at 44.44% is more than one-third of the total number of Directors. The number of Non-
Executive Directors at 66.67% is more than 50% of the total number of Directors. Thus, the
composition of the Board is in conformity with Clause 49 of the Listing Agreement entered into with
the Stock Exchanges.
ii) None of the Directors on the Board is a Member of more than 10 Committees or Chairman of more
than 5 Committees as specified in Clause 49, across all the companies in which he is a Director.
Necessary disclosures regarding Committee positions in other public companies as at March 31,
2006 have been made by the Directors.
iii) The names and categories of the Directors on the Board, their attendance at Board Meetings held
during the year and the number of Directorships and Committee Chairmanships / Memberships held
by them in other companies is given below. Other directorships do not include alternate directorships,
directorships of private limited companies and of companies incorporated outside India.
Chairmanship / Membership of Board Committees include only Audit and Shareholders / Investors
Grievance Committees.
a. The Board of Directors of the Company as on March 31, 2006 consisted of:
i. Non executive Directors
A. Independent Mr. Arvind Pande, Chairman

Mr. T.N. Chaturvedi
Mr. R.C. Sinha
Mr. T.R.C. Bose
B. Non-independent Mr. E. Ella Reddy (Relative of Promoter Directors)
Mr. E. Sunil Reddy (Promoter)
ii. Executive Directors
i. Vice-Chairman & Mr. E. Sudhir Reddy (Promoter)

Managing Director
Whole-time Directors Mr. R. Balarami Reddy
Mr. K. Ashok Reddy
48
b. Attendance at Board Meetings and last Annual General Meeting and details of memberships of
Directors in other Boards and Board Committees.
Seven meetings of the Board of Directors were held during the financial year 2005 - 06 on:
27th April, 2005 , 18th June, 2005 , 27th July, 2005 , 26th August, 2005 , 29th October, 2005 ,
12th December, 2005 and 28th January, 2006.
The last Annual General Meeting was held on Friday the 30th September 2005.
Name of the Director No. of Board and Whether attended Memberships as on

Committee meetings last AGM 31.3.2006 in
attended (Note 1)
Other Other
Boards Committees
(Excludes (Excludes
IVRCL) IVRCL)
(Note 1)
Mr. Arvind Pande
(Resigned effective
from 25.05. 2006) 11 Yes 4 Nil
Mr. E. Ella Reddy Nil No Nil Nil
Mr. E. Sudhir Reddy 7 Yes 8 Nil
Mr. E. Sunil Reddy 7 Yes 4 1
Mr. T. N. Chaturvedi 13 No 6 3
Mr. R. Balarami Reddy 7 Yes 9 2
Mr. K. Ashok Reddy 7 Yes 1 Nil
Mr. R. C. Sinha 6 No 4 Nil
Mr. Ashish Dhawan 1 No 11 Nil
(Resigned from the
Board on 27.02.2006)
Mr. T.R. C. Bose 5 No 4 3
Note 1: Only Audit Committee and Compensation/ Remuneration Committee are reckoned for this purpose.
3. AUDIT COMMITTEE
A. Constitution: The Audit Committee comprising of independent and non-executive directorswas

constituted by the Board of Directors in accordance with the requirement of Section 292A of the
Companies Act, 1956 and four meetings of the committee were held during the financial year 2005-
06. The role of the Committee is as conceived under Clause 49 of the Listing Agreement as amended
from time to time.
B. Composition, names of members and Chairperson:
The composition of the Audit Committee is as follows:
Chairman Mr. Arvind Pande(resigned w.e.f 25.5.2006)
Members Mr. T. N. Chaturvedi
Mr. R. C. Sinha
Mr. TRC.Bose (Co-opted on 26.08.2005)
49
C. Meetings and Attendance:
Four meetings of the Audit Committee meetings were held on 18th June, 27th July, 29th October,
2005 and 28th January 2006.
Name of the Director No. of meetings attended

Mr. Arvind Pande, Chairman 3
Mr.. T. N. Chaturvedi, 4
Mr. R.C. Sinha 2
Mr. T.R.C.Bose 1
Secretary to the Committee: Mr. G. Rama Krishna Rao, Company Secretary
The Statutory Auditors and Internal Auditors of the Company were invited to jointhe Audit Committee
Meetings for discussions on issues relevant to them. Mr. N.P. Haran, Executive Vice President, (Finance),
attended the meetings of the Committee as and when invited.
4. COMPENSATION COMMITTEE:
A. The Composition of the Compensation Committee is as follows:
Chairman : Mr. Arvind Pande(resigned w.e.f 25.5.2006)

Members : Mr. T.N. Chaturvedi
: Mr. R.C. Sinha
: Mr. TRC.Bose (Co-opted on 26.08.2005)
Secretary to the Committee : Mr. G. Rama Krishna Rao, Company Secretary.
B. Meetings and Attendance:
Four meetings of the Compensation Committee meetings were held on 18th June, 27th July, 29th
October 2005 and 28th January, 2006.
Name of the Director No. of meetings attended

Mr. Arvind Pande, Chairman 3
Mr. T. N. Chaturvedi, 4
Mr. R.C. Sinha 2
Mr. TRC.Bose 1
C Remuneration Policy:
i) The Companys remuneration policy is driven by the success and performance of the individual
employee and the Company. Through its compensation programme, the Company endeavors
to attract, retain, develop and motivate a high performance workforce. The Company follows a
compensation mix of fixed pay, benefits and perquisites besides Employee Stock Options.
Individual performance is measured through the annual appraisal process and plans are afoot
for going in for half-yearly appraisal process.
ii) The Company pays remuneration by way of salary, benefits, perquisites and allowances (fixed
component) and commission (variable component) to its Managing Director. The other Executive
Directors are compensated by way of salary, benefits, perquisites and allowances (fixed
component) as decided by the Remuneration Committee and approved by the members from
time-to-time.
50
iii) Sitting fees at the rate of Rs.5,000/- per meeting for attendance at the meetings of the Board or
any committee thereof for non-executive directors as per the Articles of Association of the
Company is paid. Further, reimbursement of actual travel and out of pocket expenses incurred
for attending such meetings was made.
iv) There is at present no other component of remuneration to non-executive directors.
D. The details of remuneration paid / payable to all the Directors for the year 2005-06 are as follows:
i Non Executive Directors (Sitting fee only) (in Rs.)
Mr. Arvind Pande 55000
Mr. T.N. Chaturvedi 65000
Mr. R.C. Sinha 30000
Mr. T. R. C. Bose 25000
Mr. Ashish Dhavan 5000
Total: 180,000
ii Managing / Whole-time Director(s) (No Sitting Fees)

Name and Designation Fixed Component Variable Component Total
Salary Rs. Commission Rs. Rs.
Mr. E. Sudhir Reddy, VC &
Managing Director 27,61,000 5,21,68,356 5,49,29,356
Mr. E. Sunil Reddy,
Director-Legal 19,98,900 - 19,98,900
Mr. R. Balarami Reddy,
Director-Finance 14,84,160 - 14,84,160
Mr. K. Ashok Reddy,
Director-Resources 14,67,807 - 14,67,807
TOTAL 77,11,867 5,21,68,356 5,98,80,223
5. SHAREHOLDERS / INVESTOR GRIEVANCES COMMITTEE
A The Invester Grievences Committee consists of Mr. T.N. Chaturvedi, Chairman, Mr. E. Sudhir Reddy
and Mr. R. Balarami Reddy. The committee looks into the investor grievances and coordinates with
the Registrars & Transfer Agents, M/s. Karvy Computershare Private Ltd., for redressal of grievances,
through its Secretary Mr. G.Rama Krishna Rao.
B Mr. G. Rama Krishna Rao, Company Secretary is the Compliance Officer nominated for this purpose
under Clause No. 47(a) of the Listing Agreement.
During the year, the Company received 377 complaints and all the complaints were resolved to the
satisfaction of the Investors.
6. EXECUTIVE COMMITTEE:
The Board has constituted the Executive Committee to consider and approve borrowings up to certain
limits, as delegated from time to time; to approve joint ventures, to delegate authority to the functionaries
as the business of the Company warrants; besides exercising such other power as are delegated from time
to time.
51
The Committee consists of the following Directors
i) Mr. E. Sudhir Reddy

ii) Mr. K. Ashok Reddy
iii) Mr. R. Balarami Reddy
7 GENERAL BODY MEETINGS
A Details of location and time of holding the last three AGMs.

Year Location Date & Time
16th AGM 2003 Hotel Golkonda, Masab Tank, Hyderabad At 4.00 pm on September 29, 2003.
17th AGM 2004 Hotel Golkonda, Masab Tank, Hyderabad At 4.00 pm on September 17, 2004.
18th AGM 2005 Hotel Green Park, Ameerpet, Hyderabad. At 4.00 pm on September 30, 2005.
The following special resolutions were passed at the 16th Annual General Meeting of the Members of the
company held on 29th September, 2003:
a) To issue further shares by way of GDRs and/or Foreign Currency Convertible Bonds etc. upto USD 30
Million.
b) To delist the Companys shares from Coimbattore and Hyderabad Stock Exchanges
a) To reappoint Sri E.Sunil Reddy as wholetime Director and designate him as Director-Legal
b) To issue further shares under Sec.81(1A) of the Companies Act, 1956
c) To substitute the existing articles with a new set of Articles
a) To re-appoint Mr.R.Balarami Reddy as wholetime Director and fix his remuneration

b) To re-appoint Mr.K.Ashok Reddy as whole time Director and fix his remuneration
c) To amend the Articles of Association of the Company consequent on cession of the share holders'
agreement entered into with M/s. Chryscapital and M/s. Citicorp, deleting the clauses relevant to the
agreement.
d) To consider increase in the borrowing powers of the Company from Rs.12,000 millions to 37,500
million
e) To issue further shares by way of GDRs and/or Foreign Currency Convertible Bonds etc., upto USD
140 million.
B Extraordinary General Meeting was held on March 4, 2006 where a Special Resolution for sub-division of
each equity/preference share of Rs. 10/- each into five equity/preference share of Rs. 2/- each.
C Postal Ballot
No Postal Ballot was conducted during the year.
52
8 DISCLOSURES:
(i) There has been no materially significant related party transactions with the Company Promoters,
Directors, the Management, the Subsidiaries or relatives of the Directors which may have potential
conflict with the interests of the Company at large. Whatever such minor transactions are there were
disclosed in the accounts along with the financial impact of the same.
(ii) There have been no major instances of non-compliance by the Company on any matters related to
the Capital markets, nor have any penalty / strictures been imposed on the Company by the Stock
Exchanges or SEBI or any other statutory authority on such matters.
(iii) The company's financial statements are prepared as per Accounting Standard and the accounting
principles generally accepted in India.
(iv) There is no pecuniary relationship or transaction with the Non-executive directors.
(v) Secretarial Audit:

A qualified practicing Company Secretary carried out a secretarial audit to reconcile the total admitted
capital with National Securities Depository Limited (NSDL) and Central Depository Services Limited
(CDSL) and the total issued and listed capital. The Secretarial Audit report confirms that the total
issued / paid up capital is in agreement with the total number of shares in physical form and the total
number of dematerialized shares held with NSDL and CDSL.
(vi) Risk Management :

The Board members are informed about the risk assessment procedures and these procedures are
reviewed every month by the Chief Operating Committee which controls risk as detailed in the
Management Discussion and Analysis which forms part of this Annual Report.
9. MEANS OF COMMUNICATION:
a The quarterly results are being published in English Newspapers like Economic Times, Business
Standard and/or Financial Express having all India circulation and one in Vernacular language i.e. in
Telugu mostly Eenadu. The quarterly results are also displayed on the Companys website
www.ivrcl.com
b The gist of presentations made to the institutional investors or to analysts are also published on the
Companys website. The Management Discussion and Analysis report is made a part of this annual
report.
10 GENERAL SHAREHOLDER INFORMATION
a. 19th Annual General Meeting

Ø Date and Time September 29, 2006 at 4.00 PM
Ø Venue Hotel Fortune Katriya
Somajiguda, Hyderabad
b. Financial Calendar:
Un-audited financial results for the quarter ending Will be published on August 01, 2006
June 30, 2006
Un-audited results for the quarter / half-year ending
September 30, 2006 Will be published in October, 2006
Un-audited results for the quarter ending
December 31, 2006 Will be published in January, 2007
53
Audited results for the year ending

March 31, 2007 Will be published in June, 2007
c. Book Closure: From 26th September to 29th September 2006

(Both days inclusive)
d. Record Date (for dividend) 25th September, 2006

(Close of business hours)
e. Dividend payment date Will commence after October 16, 2006
f. The equity shares of the Company are listed on (i) Bombay Stock Exchange(BSE)
Scrip Code : 530773
(ii) National Stock Exchange of India
Limited (NSE)
Scrip Code : IVRCL INFRA
g. Stock Code:
a) Trading Symbol at The Stock Exchange, Mumbai
Scrip Code: 530773
National Stock Exchange
IVRCLINFRA EQ
b) Demat ISIN Numbers in NSDL & CDSL Equity Shares INE875A01025
h. Stock Market Data:

The Stock Exchange, Mumbai National Stock Exchange
Share Price Sensex Share Price S&P CNX Nifty
Month High Low High Low High Low High Low
(Rs.) (Rs.) (Rs.) (Rs.)
April 05 499.85 405.00 6649.42 6118.42 499.90 390.00 2084.90 1896.30
May 05 526.50 420.00 6772.74 6140.97 527.40 420.00 2099.35 1898.15
June 05 530.90 479.00 7228.21 6447.36 530.95 468.10 2226.15 2061.35
July 05 635.00 487.00 7708.59 7123.11 640.00 460.30 2332.55 2171.25
Aug 05 859.90 610.10 7921.39 7537.50 857.30 613.00 2426.65 2294.25
Sep 05 855.00 765.00 8772.17 7818.90 854.00 712.70 2633.90 2382.90
Oct 05 838.00 615.00 8821.84 7656.15 839.00 605.00 2355.15 2307.45
Nov 05 798.40 627.10 9033.99 7891.23 798.80 628.15 2727.05 2366.80
Dec 05 777.95 680.00 9442.98 8769.56 779.00 670.00 2857.00 2641.95
Jan 06 984.00 742.50 9945.19 9158.44 984.20 740.10 3005.10 2783.85
Feb 06 1096.30 905.00 10422.65 9713.51 1058.00 905.10 3090.30 2928.10
Mar 06 1589.00 269.00 11356.95 10344.26 1585.00 269.00 3433.85 3064.00
Source: BSE Website. Source: NSE website.
54
Share price movement on IVRCL visa-a-vis SENSEX
1400.00 12000.00
1200.00 10000.00
1000.00
8000.00
SENSEX
800.00
IVRCL
SENSEX
6000.00
600.00
4000.00
400.00
200.00 2000.00
0.00 0.00
15-Jul-05
29-Jul-05
15-Feb-06
28-Feb-06
14-Mar-06
15-Jun-05
30-Jun-05
13-Jan-06
31-Jan-06
16-May-05
31-May-05
15-Sep-05
30-Sep-05
14-Nov-05
30-Nov-05
15-Dec-05
30-Dec-05
14-Oct-05
31-Oct-05
16-Aug-05
31-Aug-05
15-Apr-05
29-Apr-05
1-Apr-05
IVRCL SENSEX
Share price movement on IVRCL visa-a-vis NIFTY

1400 3500
1200 3000
1000 2500
800 2000
IVRCL
NIFTY
600 1500
400 1000
200 500
0 0
15-Jul-05
29-Jul-05
15-Feb-06
28-Feb-06
14-Mar-06
15-Jun-05
30-Jun-05
13-Jan-06
31-Jan-06
16-May-05
31-May-05
15-Sep-05
30-Sep-05
14-Nov-05
30-Nov-05
15-Dec-05
30-Dec-05
14-Oct-05
31-Oct-05
16-Aug-05
31-Aug-05
15-Apr-05
29-Apr-05
1-Apr-05
IVRCL NIFTY
i Registrar and Transfer Agents :

M/s Karvy Computershare Private Limited
Karvy House, 46, Avenue 4,
Street No.1, Banjara Hills, HYDERABAD- 500 034.
j. ii. Distribution of Shareholding as on 31.03.2006

Share holding Share/Debenture Holders Equity
Number % to Total No. of Shares % to Total
Upto 500 38541 97.14 1627601 7.61%

501 - 1000 496 1.25 396638 1.85%
1001 2000 229 0.58 343480 1.61%
2001 3000 93 0.23 237875 1.11%
3001 4000 51 0.13 183125 0.86%
4001 5000 42 0.11 194417 0.91%
5001 10000 65 0.16 493210 2.31%
10001 and above 159 0.40 17911234 83.75%
TOTAL 39676 100.00 21387580 100%
55
ii. Capital Build Up during the financial year
Allotments made on Nature of allotment No. of shares Aggregating Date of the

of Rs. 10/- to Rs. listing and trading
each permissions
Capital at the
beginning of the year 16979700 16,97,97,000
05.04.2005 Public issue 3189870 31898700 NSE 11.04.2005

BSE 11.04.2005
11.05.2005 Public issue 478470 4784700 NSE 26.06.2005
Green shoe option BSE 21.06.2005
18.06.2005 ESOP: 2004 336500 3365000 NSE 22.07.2005
BSE 18.07.2005
27.07.2005 ESOP: 2004 1420 14200 NSE 09.12.2005
BSE 09.01.2006
20.09.2005 On conversion of 400000 4000000 NSE 22.05.2006
warrents BSE 23.06.2006
23.09.2005 ESOP: 2000 1500 15000 NSE 24.05.2006
BSE 08.06.2006
29.10.2005 ESOP: 2004 120 1200 NSE 24.05.2006
BSE 08.06.2006
Capital at the end

of the year 21387580 21,38,75,800
Note: The shares of Rs. 10/- each were subdivided in to five shares of Rs. 2/- each with effect from
March 04, 2006.
iii. Shareholding Pattern as on 31.03.2006
a b Category Equity Shares % of Col.2

(1) (2) (3)
A 1 Promoters holding
Indian Promoters 2615103 12.23
Foreign Promoters NIL NIL
2 Persons acting in concert 139985 0.65
Sub Total 2755088 12.88
B Non-Promoters Holding
3 Institutional Investors
a) Mutual Funds 5825930 27.24
b) Banks, Financial Institutions, Insurance Companies
(Central / State Govt. Institutions / Non-government
Institutions 34543 0.16
c) Foreign Institutional Investors 8105370 37.90
Sub Total 13965843 65.30
56
4 Others
a) Other Bodies Corp. 1466709 6.86
b) Indian Public 2988367 13.97
c) NRIs/OCBs 116663 0.55
d) Any other
Clearing members 84680 0.40
Trusts 10230 0.05
Sub Total 4666649 21.82
Grand Total 21387580 100.00
iv. Change in Capital structure:
Each equity share of the company of Rs.10/- each was sub-divided into five equity shares of
Rs.2/- each with effect from 4th March, 2006.
v. Instruments outstanding as on 31 March, 2006 and are liable for conversion into shares:
i FCCB issue :
During the year, the Company has issued at par, 5 years and 1 day Zero Coupon US $ denominated
Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 65.00 million (INR 2980 million
as on the date of issue) comprising 650 bonds of US $ 100,000 each to finance capital expenditure
and investment in BOOT/BOT projects inculding import of capital goods and direct investment in
joint ventures or subsidiaries related thereto. The bond-holders have an optionof converting these
bonds into equity shares at an initial conversion price of Rs. 1170.17 per share (Face value Rs. 10)
with a fixed rate of exchange on conversion of Rs. 45.84 = US $ 1.00 at any time on or after January
18, 2006 and prior to close of business on November 29, 2010, unless redeemed or repurchased
and cancelled.
Subsequent to the date of Balance Sheet, some of the bond-holders have exercised their option of
converting their bonds into Equity Shares. Till the close of business hours of the Company on June
1, 2006 amounts aggregating to $ 9.60 million worth of bonds were converted into 1,880.345
equity shares of the face value of Rs. 2 each. These converted shares are entitled to dividends.
These FCCBs are listed and traded at the Singapore Stock Exchange Limited, Singapore.
ii ESOP-2004 :
There are 5800 ESOPs outstanding as on 31st March, 2006 which would result in allotment of
29000 shares of Rs.2/- each on exercise of options by the employees.
k Dematerialization of shares and liquidity:
Shares of the Company can be held and traded only in Electronic form on Stock Exchanges. SEBI
has stipulated the shares of the Company for compulsory delivery in dematerialized form only, by
all investors from 26th June 2000.
99.16 percent of the shareholdings have been dematerialized as on 31.03.2006. Shares of the
Company are actively traded in The Bombay Stock Exchange Limited, Mumbai and National Stock
Exchange of India Limited, and hence have good liquidity.
l Code of Conduct for Directors and Senior Management:
The Board at its meeting held on January 28, 2006 has adopted the Code of Conduct for Directors
and Senior Management (the Code). This Code is a comprehensive Code applicable to all Directors,
Executives as well as Non-Executive and Senior Management in G1, G2 and G3 grades. The Code
while laying down, in detail, the standards of business conduct, ethics and governance, centers
57
around the following theme

The Companys Board of Directors and Senior Management are responsible for and are committed
to setting the standards of conduct contained in this Code and for updating these standards as
appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of
local and international investors and all other stakeholders as also to reflect corporate, legal and
regulatory developments. This Code should be adhered to in letter and in spirit.
A copy of the Code has been put on the Companys website www.ivrcl.com and also forms part of
this Annual Report, vide Annexure - A to the report.
The Code has been circulated to all the members of the Board and Senior Management and the
compliance of the same has been affirmed by them. A declaration signed by the Vice-Chairman
and Managing Director is given below:
DECLARATION
I hereby confirm that :
The Company has obtained from all the members of the Board and Senior Management affirmation
that they have complied with the Code of Business Conduct and Ethics for Directors and Senior
Management in respect of the financial year 2005-06.
m Address for Correspondence:
For all matters relating to Shares, Annual Reports G. Rama Krishna Rao
Company Secretary
IVRCL Infrastructures & Projects Limited
Naim Chambers, 8-2-608-1-6, Road No: 10,
Banjara Hills, Hyderabad 500 034.
n The Company is operating from various work sites spread throughout the country and the operations
are controlled by the Regd. Office at M-22/3RT, Vijayanagar Colony, Hyderabad-57 and through
various Regional Offices at :
(i) Ahmedabad : (vi) Kolkatta:

A-11, Sahajahanand Towers, Flat No.4F, 4th Floor,
Near Maharaja Agrasan Vidhalaya, Neelambar Building, 28 B,
Gurukul Road, Memnagar, Shakespeare Sarani,
AHMEDABAD 52 KOLKATTA: 700 017
(ii) Bangalore: (vii) Pune :

No. 73/C, 17th E-main, Flat No. A 7, 324,
Opp. Koramangala Club, North Main Road,
6th Block, Koramangala, Swan Lake Building,
BANGALORE: 560 001 Koregaon Park, PUNE 411 001.
(iii) Chennai : (viii) Raipur:

D.9, Plot No.16, Mancholai, C-170, Sailendra Nagar,
1st Main Road, Kalaimagal Nagar, Opp:Ratan Palace, Kolkatta Talab,
Ekkadduthangal, CHENNAI: 600097 RAIPUR (Chattisgarh)
(iv) Delhi : (ix) Bhopal:

P2, 1st Floor, Bungalow No. 12, C.I. Vilas,
Green Park Ext., Kolar Road, Chuna Bhatti,
NEW DELHI-110 016, BHOPAL - 426 016
(v) Jaipur: (x) Cochin:

Shefali, No. 24, Gulmohar Lane H.No. 160-A, V.K.V. Lane 1
Hanuman Nagar, Sirsi Road Chembu Mukku, Kakkanada West (P.O.)
JAIPUR - 302 012 COCHIN - 682 030
58
CODE OF CONDUCT PRESCRIBED FOR THE DIRECTORS (Annexure - A)

The premises on which the code is laid for the Directors are :
The Board is collectively responsible for all the decisions taken at the Board while every director contributes his
views and partakes in the discussions on every issue placed before the board such that the differences of
opinions are ventilated with a view to achieve unaninimity in the decisions taken as far as possible.
Each and every Director shall:
Objectively think and act independently at the Board Meetings
Not have any pecuniary interest except to the extent consented to by the Members of the Company
while appointing each of them;
Disclose the pecuniary interests, if any, from time to time either by himself or through the related
parties [whether they are relatives or not as defined under the Companies Act (Section 6)] and also
those transactions of himself which are likely to have a conflict with the corporate interests;
Bear the corporate objectives and goals as of most importance in the process of decision making so as
to cater to enhancement of shareholder value of all shareholders and not any particular group of
shareholders;
Scrupulously comply with the spirit and letter of various obligations cast on the Directors under the
Companies Act, 1956, the listing agreement entered into by the Company with the Stock Exchanges
and the securities legislations including Insider Trading Regulations.
Not make any gain with the information about the Company and its operations to which each one is
privy.
Exhibit highest degree of integrity and honesty
CODE OF CONDUCT FOR THE SENIOR MANAGEMENT PERSONNEL
All the employees of the company in the Grades of G1, G2, G3 are considered Senior Managerial Personnel for
the purposes of this Code and they shall scrupulously observe in thought and action this code while discharging
their duties assigned to each one of them by the Board of Directors and other Directors.
Each individual managerial personnel shall:
Exhibit highest degree of integrity and honesty in discharging his duties:
Keep the interests of the company paramount to those of any individual employee or group;
Keep the corporate objectives as the goals for achievement;
Try to update himself with latest information and techniques such that he can contribute his best to the
Company;
Maintain the decorum and decency of the position he is occupying in the Company and particularly
while dealing with outsiders so as to keep up the corporate image;
Respect the hierarchy in the organization;
Exercise such powers only as are delegated to him;
Achieve the highest co-ordination and integration of action so as to attain the best of results.
Disclose the pecuniary interests, if any, from time to time either by himself or through the related
parties whether they are relatives or not as defined under the Companies Act (Section 6); and such
transactions entered into him with the Company which have a conflict of interest with that of the
Company.
Bear the corporate objectives and goals as of most importance in the process of decision making so as
to cater to enhancement of shareholder value of all shareholders and not any particular group of
shareholders;
Scrupulously comply with the spirit and letter of various obligations cast on the Directors under the
Companies Act, 1956, the listing agreement entered into by the company with the Stock Exchanges
and the securities legislations including Insider Trading Regulations.
Not make any gain with the information about the Company and its operations to which each one is
privy.
Exhibit highest degree of integrity and honesty
59
AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCE

TO THE MEMBERS OF IVRCL INFRASTRUCTURES & PROJECTS LIMITED
We have examined the compliance of conditions of Corporate Governance by IVRCL Infrastructures & Projects
limited, for the year ended on March 31, 2006 as stipulated in clause 49 of the Listing Agreement of the said
company with the stock exchanges.
The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination
was limited to procedures and implementations thereof, adopted by the company for ensuring compliance with
the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial
statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that
the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49of the
abovementioned Listing Agreement.
We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency
or effectiveness with which the management has conducted the affairs of the Company.
For CHATURVEDI & PARTNERS

Chartered Accountants
R N CHATURVEDI
Hyderabad Partner
June 2, 2006 Membership No.92087
CEO/CFO CERTIFICATION
We, E.Sudhir Reddy, Chairman & Managing Director and R.Balarami Reddy, Director-Finance & Group CFO,
responsible for the financial function certify that:
a) We have reviewed the financial statements and cash flow statement for the year ended 31st March,
2006 and to the best of our knowledge and belief:
(i) these statements do not contain any materially untrue statement or omit any material fact or
statements that might be misleading ;
(ii) these statements together present a true and fair view of the Companys affairs and are in
compliance with existing Accounting Standards, applicable laws and regulations.
(b) To the best of our knowledge and belief, no transactions entered into by the Company during the
year ended 31st March, 2006 are fraudulent, illegal or violative of the Companys code of conduct.
(c) We accept responsibility for establishing and maintaining internal controls for financial reporting
and we have evaluated the effectiveness of internal control systems of the Company pertaining to
financial reporting. Deficiencies in the design or operation of such internal controls, if any, of which
we are aware have been disclosed to the Auditors and the Audit Committee and steps have been
taken to rectify these deficiencies.
(d) i) There has not been any significant change in internal control over financial reporting;
ii) There has not been any significant change in accounting policies during the year requiring
disclosure in the notes to the financial statements; and
iii) We are not aware of any instance during the year of significant fraud with involvement therein
of the management or any employee having a significant role in the Companys internal control
system over financial reporting.
Hyderabad, E.SUDHIR REDDY R.BALARAMI REDDY
June 2, 2006 Chairman & Managing Director Director-Finance & Group CFO
60
AUDITORS REPORT
To the Members of
IVRCL Infrastructures & Projects Limited
1. We have audited the attached Balance Sheet of IVRCL Infrastructures & Projects Limited as at 31st
March, 2006, the Profit and Loss Account for the year ended on that date and the Cash Flow Statement
for the year ended on that date, both annexed thereto. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India.
Those Standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by the
management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent
applicable.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:
a. we have obtained all the information and explanations, which to the best of our knowledge and
belief were necessary for the purposes of our audit;
b. in our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books;
c. the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report
are in agreement with the books of account;
d. in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with
by this report comply with the Accounting Standards referred to in sub-section (3C) of section
211 of the Companies Act, 1956;
e. in our opinion and to the best of our information and according to the explanations given to us,
the said accounts give the information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the accounting principles generally
accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,
2006;
(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
61
5. On the basis of written representations received from the directors as on 31st March, 2006 and taken
on record by the Board of Directors, we report that none of the directors is disqualified as on 31st
March, 2006 from being appointed as a director in terms of clause (g) of sub-section (1) of section
274 of the Companies Act, 1956;
For Chaturvedi & Partners For Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants
R.N.Chaturvedi P.R.Ramesh
Partner Partner
Membership No. 092087 Membership No. 70928
Place : Hyderabad,
Date : June 2, 2006
62
ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date)
The nature of the Companys business/activities during the year was such that clauses (viii), (xii), (xiii),
(xiv), (xviii) and (xix) of paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to
the Company.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details
and situation of its fixed assets.
(b) A major portion of the fixed assets has been physically verified during the year by the management
in accordance with a programme of verification which, in our opinion, provides for physical verification
of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature
of its assets. According to the information and explanations given to us, no material discrepancies
were noticed on such verification.
(c) The fixed assets disposed off during the year, in our opinion, do not constitute substantial part of the
fixed assets of the Company and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) In respect of its inventories;
(a) As explained to us, the inventories of project stores and spares and construction materials were
physically verified during the year by the Management. In our opinion, having regard to the nature
and location of stocks, the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us, the procedures of
physical verification of inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has
maintained proper records of its inventories. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) According to the information and explanations given to us, the Company has neither granted nor taken
loans to / from companies, firms or other parties covered in the register maintained under section 301 of
the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations given to us, there are adequate internal
control systems commensurate with the size of the Company and the nature of its business for the purchase
of inventory and fixed assets and for the sale of goods and services and we have not observed any continuing
failure to correct major weaknesses in such internal controls.
(v) To the best of our knowledge and belief and according to the information and explanations given to us, in
our opinion there were no contracts or arrangements that need to be entered in the register maintained in
pursuance of section 301 of the Companies Act 1956.
63
(vi) In our opinion and according to the information and explanations given to us, the Company has generally
complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act,
1956, and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from
the public.
(vii) In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants
appointed by the management have been commensurate with the size of the Company and the nature of
its business.
(viii) In respect of Statutory dues:
(a) According to the information and explanations given to us, except for the delays in deposit of service
tax, the Company has been regular in depositing undisputed statutory dues, including Provident
Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax,
Wealth Tax, Custom Duty, Excise Duty, cess and any other material statutory dues applicable to it
with the appropriate authorities during the year.
(b) According to the information and explanations given to us, there were no disputed custom duty,
wealth tax, service tax, excise duty and cess as on March 31, 2006. The details of disputed income
tax, sales tax and entry tax which have not been deposited as on March 31, 2006 are given below:
Name of statute Nature of dues Amount Period to Forum where

(Rs. million) which the dispute is
amount relates pending
Income Tax Act, 1961 Tax deducted at 83.96 2005-06 The Commissioner
source (Sec 195(2)) of Income Tax
(Appeals)
APGST Act, 1957 Turnover Tax 2.04 1997-98 Sales Tax Appellate
1998-99 Tribunal
A.P. Tax on Entry of Entry Tax 0.83 2001-02 Appellate Tribunal of
Motor Vehicles Act, 1996 Commercial Taxes
A.P. Tax on Entry of Entry Tax 0.59 2001-02 Appellate Deputy
Motor Vehicles Act, 1996 Commissioner of
Commercial Taxes
(ix) The Company does not have accumulated losses and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(x) In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of dues to financial institutions and banks.
(xi) In our opinion and according to the information and explanations given to us, the terms and conditions of
the guarantees given by the Company for loans taken by others from banks and financial institutions are
not prima facie prejudicial to the interests of the Company.
(xii) To the best of our knowledge and belief and according to the information and explanations given to us, in
our opinion, term loans availed by the Company were, prima facie, applied by the Company during the
year for the purposes for which the loans were obtained, other than temporary deployment pending
application.
64
(xiii) According to the information and explanations given to us, and on an overall examination of the balance
sheet of the Company, funds raised on short-term basis have, prima facie, not been used for long-term
investment.
(xiv) We have verified the end use of funds raised by public issue with the prospectus filed with SEBI and as
disclosed in Note 20 of Schedule 19-B to the financial statements.
(xv) To the best of our knowledge and belief and according to the information and explanations given to us, no
fraud on or by the Company was noticed or reported during the year.
For Chaturvedi & Partners For Deloitte Haskins & Sells

R.N.Chaturvedi P.R.Ramesh
Partner Partner
Membership No. 092087 Membership No. 70928
Place : Hyderabad,
Date : June 2, 2006
65
BALANCE SHEET AS AT MARCH 31, 2006

Rs. in Million
SCHEDULES/ As At As At
NOTES 31.03.2006 31.03. 2005
SOURCES OF FUNDS
SHARE HOLDERS FUNDS
Share Capital 1 213.88 169.80
Note-B-18
Stock Options of sch-19 1.26 22.91
Share Application Money - 1,453.99
Pending Allotment
Reserves and Surplus 2 4,554.99 2,383.66
4,770.13 4,030.36
LOAN FUNDS
Secured Loans 3 2,640.56 1,854.71
Unsecured Loans 4 4,145.71 617.01
6,786.27 2,471.72
Note-B-3
Deferred Tax Liability (Net) of sch-19 41.44 30.85
11,597.84 6,532.93
APPLICATION OF FUNDS
FIXED ASSETS: 5
Gross block 1,580.10 1,107.10
Less: Depreciation 472.75 366.07
Net block 1,107.35 741.03
Capital work-in-progress
{Including Capital Advances
aggregating to Rs. 150 Million
(Rs. 150 Million)} 266.10 215.80
1,373.45 956.83
INVESTMENTS 6 2,764.78 316.35
CURRENT ASSETS, LOANS AND ADVANCES:
Inventories 7 285.53 178.18
Sundry Debtors 8 4,765.33 3,065.69
Cash and Bank Balances 9 2,443.48 4,526.76
Other Current Assets 10 4,352.29 3,049.55
Loans and Advances 11 1,156.26 809.25
13,002.89 11,629.43
Less: CURRENT LIABILITIES AND PROVISIONS:
Current Liabilities 12 5,391.20 6,282.65
Provisions 13 152.08 87.03
5,543.28 6,369.68
NET CURRENT ASSETS 7,459.61 5,259.75
TOTAL 11,597.84 6,532.93
SIGNIFICANT ACCOUNTING POLICIES
AND NOTES ON ACCOUNTS 19
The schedules referred to above form an integral part of the Balance Sheet.
As per our report of even date attached

For Chaturvedi & Partners For Deloitte Haskins & Sells FOR AND ON BEHALF OF THE BOARD
R.N CHATURVEDI P. R . RAMESH E.SUDHIR REDDY R.BALARAMI REDDY G. RAMAKRISHNA RAO

Partner Partner Chairman & Director Finance & Company Secretary
Managing Director Group CFO
Place : Hyderabad
66
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED MARCH 31, 2006
Rs. in Million
SCHEDULES/ For the Year For the Year
NOTES ended ended
31.03.2006 31.03.2005
INCOME
Income from Operations 14 15,214.23 10,547.33
Less : Indirect Tax 257.25 109.36
Net Income from Operations 14,956.98 10,437.97
Other income 15 57.47 24.11
15,014.45 10,462.08
EXPENDITURE
Construction expenses 16 12,963.80 9,138.58
Administration and other expenses 17 650.30 434.50
Interest and Financial Charges 18 253.13 214.10
Depreciation / Amortisation 110.01 80.27
Less : Transferred to Revaluation Reserve 0.04 109.97 0.04 80.23
13,977.20 9,867.41
Profit Before Tax 1,037.25 594.67
Provisions for taxation:
Current Tax 89.16 46.63
Deferred Tax 10.59 99.75 (19.04) 27.59
Fringe Benefit Tax 7.95 -
Profit After Tax 929.55 567.08
Balance brought forward from previous year 419.73 324.44
Available for appropriation 1,349.28 891.52
APPROPRIATIONS:
Proposed dividend 110.02 62.96
Corporate Dividend Tax 15.43 8.83
Transfer to General Reserve 500.00 400.00
Balance carried to Balance Sheet 723.83 419.73
Earnings per share of face value Rs.2 ( 10) each
- Basic (Rs.) 8.84 33.56
- Diluted (Rs.) 8.63 33.27
Number of shares used in computing
earnings per share:
Weighted average number of equity shares
outstanding Note-B-7
of Sch-19
- Basic 105,188,095 16,896,812
- Diluted 107,723,835 17,043,343
SIGNIFICANT ACCOUNTING POLICIES AND
NOTES ON ACCOUNTS 19
The schedules referred to above form an integral part of the Profit and Loss account
As per our report of even date attached


Place : Hyderabad
67
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2006
Rs. In Million
For the year ended For the year ended
31.03.2006 31.03.2005
A. CASHFLOW FROM OPERATING ACTIVITIES
NET PROFIT BEFORE TAX AND
EXTRAORDINARY ITEMS 1,037.25 594.67
Adjustment for:
Depreciation 109.97 80.23
Dividend received on investments (3.56) (0.01)
(Profit)/Loss on sale of fixed assets 1.43 (3.34)
Employees Compensation under ESOP 1.38 23.24
Provision for diminution in value of investment - 0.50
Provision for doubtful Amounts & Bad debts Written Off - 33.75
(Profit)/ Loss on sale of Investments (0.17) (0.15)
(Gain)/ Loss on Foreign exchnage translation (1.68) -
Interest paid (net) 254.81 362.18 214.10 348.32
OPERATING PROFIT BEFORE WORKING
CAPITAL CHANGES 1,399.43 942.99
(Increase)/ Decrease in Inventories (107.35) 6.60
(Increase)/ Decrease in Debtors (1,699.64) (1,557.08)
(Increase)/ Decrease in Other Current Assets (1,278.32) (1,356.97)
(Increase)/ Decrease in Loans and Advances (198.37) 195.25
Increase/ (Decrease) in Current Liablities 1,300.54 (1,983.14) 1,928.49 (783.71)
CASH GENERATED FROM OPERATIONS (583.71) 159.28
Direct taxes paid (254.75) (171.44)
NET CASH GENERATED FROM OPERATIONS (838.46) (12.16)
B. CASHFLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (530.85) (368.92)
Sale of Fixed Assets 2.79 15.75
Purchase of Investments (1,937.42) (222.49)
Purchase of Investments in Subsidiaries (539.96) -
Sale of Investments 29.12 1.65
Interest Received 85.91 64.96
Dividend received on long tem Investments 3.56 0.01
NET CASH USED IN INVESTING ACTIVITIES (2,886.85) (509.04)
C. CASHFLOW FROM FINANCING ACTIVITIES
Proceeds from issue of Share Capital 44.08 63.61
Proceeds from/ (refund of excess) Share Application
Money pending Allotment (1,453.99) 668.98
Share Application Money (refunded towards
over subscription) (2,180.85) 2,180.85
Proceeds from Security Premium 1,344.24 640.20
Proceeds from Long Term Borrowings
(net of repayments) 110.52 152.72
Proceeds from ShortTerm Borrowings
(net of repayments) 1,303.08 429.07
Proceeds from Foreign Currency Convertible Bonds 2,900.95 -
Interest and Finance Charges Paid (362.21) (271.35)
Dividends paid (63.79) (50.11)
NET CASH FROM FINANCING ACTIVITIES 1,642.03 3,813.97
NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS (2,083.28) 3,292.77
CASH AND CASH EQUIVALENTS AS AT
1-4-2005 (Opening Balance) 4,526.76 1,233.99
CASH AND CASH EQUIVALENTS AS AT
31-03-2006 (Closing Balance) 2,443.48 4,526.76
68
CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2006 (Contd...)
Notes:
1. Cash and Cash equivalents includes:
a. Rs. 1,048.81 Million (Nil) being fixed deposits in foreign currency made out of proceeds received
from the issue of Foreign Currency Convertible Bonds.
b. Rs. 157.76 Million (Rs. 217.15 Million) margin money in fixed deposits account. Refer Schedule 9
c. Restricted bank balances includes Rs. 0.94 Million (Rs. 0.57 Million) towards unclaimed dividend.
2. Investments in subsidiaries represents purchase consideration paid in cash during the year in consideration
for acquisition of 2,966,833 shares in Hindustan Dorr Oliver Limited.
3. The Cash flow statement is prepared under indirect method as set out in Accounting Standard - 3 on
Cash Flow Statements issued by the Institute of Chartered Accountants of India.
4. Previous years figures have been regrouped, wherever necessary.
This is the Cash Flow Statement referred to in our report of even date.

Place : Hyderabad
69
SCHEDULES forming part of the Balance Sheet

Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE - 1
SHARE CAPITAL
AUTHORISED
175,000,000 (35,000,000 of Rs. 10 each)
Equity shares of Rs. 2 each 350.00 350.00
25,000,000 (5,000,000 of Rs. 10 each)
Preference shares of Rs. 2 each 50.00 50.00
400.00 400.00
ISSUED, SUBSCRIBED AND PAID UP
106,937,900 (16,979,700 of Rs. 10 each)
Equity shares of Rs. 2 each - Refer
Note - B 2(f) of Schedule - 19 213.88 169.80
18,660,500 shares of Rs. 2 each represents
after sub-division of 3,732,100 shares of the
face value of Rs. 10 each which were issued
as fully paid bonus shares by utilisation of
Rs. 37.32 million from General Reserve
213.88 169.80
SCHEDULE - 2
RESERVES & SURPLUS

Capital Reserve 0.09 0.09
Securities Premium Account At the
Commencement of the year 1,120.98 472.18
Add : Additions during the year on account of
Public Issue ,exercise of options and conversion
of warrants 1,509.42 726.20
Less: Share Issue Expenses (net of deferred tax
Rs. Nil (Rs. 24.41 million)), expenses relating to
issue of Foreign Currency
Convertible Bonds and redemption premium 142.15 2,488.25 77.40 1,120.98
Revaluation Reserve At the Commencement
of the year 28.61 28.65
Less:Depreciation on revalued portion of assets 0.04 28.57 0.04 28.61
General Reserve At the Commencement of
the year 814.25 363.71
Add : Transfer from Profit and Loss Account 500.00 400.00
Add : Transferred from Contingency Reserve - 1,314.25 50.54 814.25
Profit and Loss Account 723.83 419.73
4,554.99 2,383.66
70

Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE - 3
SECURED LOANS
TERM LOANS
From Banks 13.83 54.14
From Financial Institutions 29.49 47.37
Project - Specific Term Loans from Banks 712.50 676.37
Earth Moving Equipment and Vehicle Loans from Banks 116.42 64.88
Earth Moving Equipment and Vehicle Loans from
Financial Institutions 157.54 52.60
1,029.78 895.36
WORKING CAPITAL LOANS
Working Capital Demand Loans from
consortium of Banks 1,008.80 595.69
Project - Specific Working Capital Loans from Banks 601.98 363.66
1,610.78 959.35
2,640.56 1,854.71
NOTES
1. TERM LOANS - FROM BANKS & FINANCIAL INSTITUTIONS
Secured by way of first charge and hypothecation of specific machinery and Equipment Purchased.
Repayable within twelve months Rs.32.79 Million (Rs.57.39 Million).
2. PROJECT-SPECIFIC TERM LOANS

a) Secured by hypothecation of book-debts and inventory relating to Konkan Railways Corporation
Limited, Tunnel Project, Jammu for the loan of Rs.65.00 Million (Rs.65.00 Million) financed by
United Bank of India, payable within a year Rs.65.00 Million (Rs.Nil).
b) Secured by hypothecation of book-debts and inventory relating to Karnataka Housing Board Project,
for the loan of Rs.80.00 Million (Rs.90.00 Million) financed by Karnataka Bank Limited, payable
within a year Rs.80.00 Million (Rs.40.00 Million).
c) Secured by hypothecation of book-debts and inventory relating to SSW SK-1 Project & Jalundra
(Himatnagar) for the loan of Rs.120.00 Million (Rs.235.00 Million), financed by Syndicate Bank,
payable within a year Rs.120.00 Million (Rs.100.00 Million).
d) Secured by hypothecation of book-debts and inventory relating to Telugu Ganga Project III, Badvel,
for the loan of Rs.165.00 Million (Rs.Nil) financed by Indian Overseas Bank, payable within a year
Rs.165.00 Million (Rs.Nil).
e) Secured by hypothecation of book-debts and inventory relating to NHAI-NS-40/TN Project, for a
loan of Rs.110.00 Million (Rs.Nil) financed by Standard Chartered Bank, payable within a year
Rs.55.00 Million (Rs.Nil).
f) Secured by hypothecation of book-debts and inventory relating to NTPC-SIPAT project for a loan of
Rs.37.50 Million (Rs.37.50 Million) financed by Indian Overseas Bank, payable within a year Rs.37.50
Million. (Rs Nil)
71
g) Secured by hypothecation of book-debts, inventory relating to Vedaranyam project for a loan of

Rs.135.00 Million (Rs.Nil) financed by Standard Chartered Bank payable within a year Rs.135.00
Million (Rs Nil)
3. EQUIPMENT LOANS FROM BANKS AND NON-BANKING FINANCIAL COMPANIES (NBFCS)

Secured by first charge and hypothecation of specified machinery, equipment and vehicles. Repayable
within one year Rs.125.42 Million (Rs.63.81 Million).
4. WORKING CAPITAL DEMAND LOAN FROM CONSORTIUM OF BANKS

Secured by hypothecation of book debts, inventories and other current assets, excluding those charged to
the lenders of specific-funding projects and certain fixed assets not charged to other lenders, ranking pari-
passu among the consortium banks and further secured by a second charge on machinery and equipments
hypothecated to L & T Finance and Citi Bank.
5. PROJECT-SPECIFIC WORKING CAPITAL LOAN FROM FINANCIAL INSTITUTIONS AND BANKS

a) Secured by hypothecation of book-debts, inventory and other current assets relating to SSW A-4
Project financed by State Bank of Indore for a sum of Rs.108.91 Million.
b) Secured by hypothecation of book-debts, inventory and other current assets relating to SSW A-3
Project financed by State Bank of Hyderabad for a sum of Rs.85.74 Million.
c) Secured by hypothecation of book-debts, inventory and other current assets relating to SSW P-1
Project financed by State Bank of Hyderabad for a sum of Rs.57.15 Million.
d) Secured by hypothecation of book-debts, inventory and other current assets relating to MVVNL
Transmission Line Project financed by ICICI Bank Limited for a sum of Rs.62.47 Million.
e) Secured by hypothecation of book-debts, inventory and other current assets relating to CIDCO Project
financed by Centurion Bank Limited & UTI Bank Limited for a sum of Rs.53.73 Million & Rs.53.73
Million.
f) Secured by hypothecation of book-debts, inventory and other current assets relating to Khorsam
project financed by Citi Bank for a sum of Rs.100.00 Million.
g) Secured by hypothecation of book-debts and inventory and other current assets relating to DVVNL
project financed by Canara Bank for a sum of Rs.80.25 Million.
Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE - 4
UNSECURED LOANS
FIXED DEPOSITS
- From Directors - 17.50
- From Others 13.11 19.51
SHORT TERM LOANS AND ADVANCES
- From Banks 1,231.65 500.00
- From Others - 80.00
Foreign Currency Convertible Bonds 2,900.95 -
4,145.71 617.01
Note: Amounts repayable within one year Rs. 1,244.76 Million (Rs. 603.76 Million)
72
SCHEDULE -5
Schedule of Fixed Assets
Rs. in Million
Gross Block at Cost Depreciation Net Block
Name of the Asset As at Additions Adjust- As at Up to For the Adjust- Up to As at As at
01.04.2005 ments 31.03.2006 01.04.2005 Year ments 31.03.2006 31.03.2006 31.03.2005
Land-Freehold 42.44 1.96 - 44.40 - - - - 44.40 42.44
Land - Leasehold 0.78 9.32 - 10.10 0.78 0.01 - 0.79 9.31 -
Buildings 55.23 24.92 1.55 78.60 20.89 7.19 0.19 27.89 50.71 34.34
Plant & Machinery 730.45 335.30 0.18 1,065.57 227.96 66.10 0.01 294.05 771.52 502.49
Motor Vehicles 199.42 75.54 5.70 269.26 81.07 22.88 3.11 100.84 168.42 118.35
73
Furniture 18.57 4.04 - 22.61 8.62 4.10 - 12.72 9.89 9.95
Office Equipment 60.21 29.47 0.12 89.56 26.75 9.73 0.02 36.46 53.10 33.46
TOTAL 1,107.10 480.55 7.55 1,580.10 366.07 110.01 3.33 472.75 1,107.35 741.03
(964.34) (160.73) (17.97) (1,107.10) (291.37) (80.27) (5.57) (366.07) (741.03) (672.97)
NOTE:
1. Land-Freehold includes Rs.18.79 Million towards revaluation made in the year 2001-02 on current cost basis carried out by an independent valuer.
2. Buildings include Rs. 2.20 Million towards revaluation made in the year 2001-02 on current cost basis carried out by an independent valuer.

Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE - 6
INVESTMENTS :
LONG TERM INVESTMENTS Nature of Number Share/Instrument

Instrument Face Value (Rs.)
A. TRADE INVESTMENTS
IN SUBSIDIARY COMPANIES - QUOTED
Hindustan Dorr -Oliver Limited
(Purchased during the year) Equity Shares 2,966,833 10 539.96 -
UNQUOTED
IVRCL PSC Pipes Ltd. Equity Shares 167,000 10 1.67 1.67
IVR Enviro Projects Ltd. Equity Shares 674,550 10 6.75 6.74
First STP Ltd (Sold during the year) Equity Shares 475,000 10 - 4.75
IVR-Prime Urban Developers Ltd. Equity Shares 3,999,500 10 400.00 300.00
GEO IVRCL Engineering Ltd. Equity Shares 49,500 10 0.49 0.49
Chennai Water Desalination Ltd.
(Subscribed during the year ) Equity Shares 50, 000 10 0.50 -
IVRCL Water Infrastructure Ltd.
(Subscribed during the year) Equity Shares 11,940,000 10 119.40 -
Salem Tollways Ltd.
(Subscribed during the year) Equity Shares 50, 000 10 0.50 -
Kumarpalyam Tollways Ltd.
IVRCL Steel Constructions &
Services Ltd (Subscribed
during the year) Equity Shares 50, 000 10 0.50 -
IVRCL Road Toll Holdings Ltd.
(Subscribed during the year) Equity Shares 39,063,000 10 1,666.97 -
Jalandhar Amritsar Tollways Ltd.
IN PARTNERSHIP FIRMS
Bhanu IVRCL Associates 50:50 Share between the Company and
Bhanu Construction Co Ltd respectively
(Total capital-Rs 20,000) 0.01 0.01
IVRCL -Tantia Joint Venture(AOP) 50:50 Share between the Company and
Tantia Construction Co. Ltd Total capital-
Rs 398,050 (Rs. 398,050) 0.20 0.20
IN ASSOCIATE BODIES CORPORATE
Viva Infrastructures (P) Ltd. Equity Shares 50, 000 10 0.50 0.50
Paresh Infrastructure Private Ltd.
(Subscribed during the year) Equity Shares 4,900 10 0.05 -
Telcon Ecoroad Resurfaces Private
Limited (Subscribed during
the year) Equity Shares 240,000 100 24.00 -
74

Rs. in Million
As At As At
31.03.2006 31.03. 2005
B. OTHER INVESTMENTS:
QUOTED
Ballarpur Industries Ltd. Equity Shares 1200 10 0.15 0.15
Indian Overseas Bank
(Sold during the year) Equity Shares 900 10 - 0.02
UNQUOTED
Industrial Development
Bank of India Flexi Bonds 400 5,000 2.00 2.00
MKVDC Bonds
(sold during the year) Bonds 2 100,000 - 0.20
Tamil Nad Mercantile Bank Ltd. Equity Shares 25 10 0.21 0.21
Less : Provision for dimunition in Value of Investment (0.59) (0.59)
2,764.27 316.35
CURRENT INVESTMENTS
Andhra Bank (Subscribed
during the year) Equity Shares 5631 10 0.51 -
TOTAL INVESTMENTS 2,764.78 316.35
Aggregate amount of book value of quoted investment Rs 540.62 Million (Rs. 0.17 Million)
Aggregate market value thereof Rs 2,528.93 Million (Rs 0.18 Million)
Aggregate amount of book value of unquoted investment Rs. 2,224.16 Million (Rs. 316.18 Million)
Aggregate amount of short term investments subsrcibed and sold during the year Rs. 0.2 Million (Nil)
SCHEDULE - 7
INVENTORIES- AT COST
Project stores and spares 285.53 178.18
285.53 178.18
SCHEDULE - 8
SUNDRY DEBTORS ( Unsecured)

Debts outstanding for a period exceeding six months 770.55 431.98
Other debts 3,997.16 2,664.77
4,767.71 3,096.75
Less: Provision for doubtful debts 2.38 31.06
4,765.33 3,065.69
Of the above
Considered good 4,765.33 3,065.69
Considered doubtful 2.38 31.06
4,767.71 3,096.75
75

Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE -9
CASH & BANK BALANCES

a) Cash and cheques on hand 29.76 13.91
b) Balances with Scheduled Banks
1. In Current Accounts 417.15 499.90
2. In Public Issue Escrow Accounts - 3,629.84
3. In Fixed Deposit Accounts
- Margin Money 157.76 217.15
- Fixed Deposit in Foreign Currency 1,048.81 -
- Others 790.00 165.96
2,443.48 4,526.76
SCHEDULE -10
OTHER CURRENT ASSETS (Unsecured)

Interest accrued other than on Investments 34.02 9.61
Retention Money 1,068.45 496.52
Other Deposits 650.69 207.73
Unbilled Revenue 2,603.22 2,345.34
4,356.38 3,059.20
Less: Provision for Doubtful Deposits 4.09 9.65
4,352.29 3,049.55
Of the above
Considered good 4,352.29 3,049.55
4,356.38 3,059.20
SCHEDULE -11
LOANS AND ADVANCES

(Unsecured, unless otherwise stated)
Loans to subsidiaries 128.64 315.23
Advances to Joint Venture partnership firms in which the company is a partner 213.34 77.44
Advances recoverable in cash or in kind or for value to be received:-
- Secured 15.85 18.85
- Unsecured 426.32 164.13
Tax deducted at source and advance tax net of provisions
{Rs. 241.65 million (Rs. 150.74 million)} 444.47 295.83
Balance with Post Office( held in the names of employees) 0.34 1.56
Balances with Central Excise Department 0.13 1.00
1,229.09 874.04
Less: Provision for doubtful advances 72.83 64.79
1,156.26 809.25
Of the above
Considered good 1,156.26 809.25
1,229.09 874.04
76

Rs. in Million
As At As At
31.03.2006 31.03. 2005
SCHEDULE -12
CURRENT LIABILITIES
Advances received from contractee-clients 1,421.34 487.50
Trade deposits 87.19 70.07
Sundry creditors :
Dues to Small Scale Industrial undertakings
(Refer Note No. B - 14 of Schedule 19) 13.26 0.49
Others 3,804.54 3,491.24
Other Liabilities (Includes excess Share Application Money to be refunded Nil
(Rs.2180.85 Million) 51.25 2,221.34
Interest accrued but not due on loans 12.68 11.44
Liability towards Investors Education & Protection Fund
under Section 205C of the Companies Act, 1956
Unclaimed Dividends 0.94 0.57
5,391.20 6,282.65
SCHEDULE -13
PROVISIONS
Proposed Dividend 108.82 62.96
Tax on Proposed Dividend 15.26 8.83
Provision for Gratuity 16.06 9.64
Provision for Leave Encashment 11.94 5.60
152.08 87.03
77

Rs. in Million
For the Year For the Year
ended ended
31.03.2006 31.03.2005
SCHEDULE - 14
INCOME FROM OPERATIONS

Gross Work Bills 15,178.92 10,527.93
Technical Services Fees - 6.96
Share of profit from Joint Ventures 35.31 12.44
15,214.23 10,547.33
SCHEDULE -15
OTHER INCOME
Miscellaneous Income 51.85 18.82
Dividend Income on long term Investments 3.56 0.01
Profit on sale of long term Investments 0.17 0.15
Liabilities no longer required written back 1.89 5.13
57.47 24.11
SCHEDULE -16
CONSTRUCTION EXPENSES
Opening stock of project stores 178.18 182.80
Add: Purchase of construction and other materials 6,788.78 3,982.56
Less:Closing stock of project Stores 285.53 178.18
Construction and other materials 6,681.43 3,987.18
Sub-contractors work bills 3,240.32 2,370.20
Masonry and other works 2,690.58 2,513.28
Repairs and maintenance:
Construction machinery 85.95 50.99
Others 59.97 145.92 36.05 87.04
Electricity and water charges 18.22 13.92
Machinery hire charges 167.62 151.12
Royalty 9.45 9.68
Laboratory testing charges 10.26 6.16
12,963.80 9,138.58
78

Rs. in Million
For the Year For the Year
ended ended
31.03.2006 31.03.2005
SCHEDULE -17
ADMINISTRATION AND OTHER EXPENSES

Salaries, wages and bonus 270.72 143.01
Contribution to provident, super annuation and other funds 24.12 12.45
Staff welfare expenses including gratuity accruals 84.52 54.50
Employee compensation expense under ESOP 1.38 23.24
Managerial remuneration 59.88 36.64
Travelling and conveyance 28.72 19.35
Printing and stationery 15.61 7.49
Communication expenses 21.04 13.81
Rates and taxes 10.39 4.66
Tender expenses 7.24 7.51
Business promotion 5.96 3.72
Office maintenance 19.50 12.89
Rent 16.72 7.70
Advertisement and publicity 5.80 7.96
Auditors remuneration
Audit Fees 4.90 2.90
Tax Audit Fee 0.30 0.25
Other Service 0.32 0.02
Reimbursement of expenses 0.36 0.21
5.88 3.38
Directors sitting fees 0.18 0.11
Legal and Professional charges 30.44 16.78
Insurance 26.81 12.61
Miscellaneous expenses 13.93 6.22
Loss on Assets sold / discarded 1.46 1.02
Provision for diminution in value of long term Investments - 0.50
Bad debts / Advances written off - 5.20
Provision for doubtful debts, advances and deposits - 33.75
650.30 434.50
SCHEDULE -18
FINANCIAL CHARGES
Interest on fixed loans 32.40 10.54
(includes interest paid of Rs. 2.04 Million
(Rs. 2.25 Million) on unsecured loans from
Managing Director)
Other Interest
Interest on other credit facilities 268.30 210.26
Bank and Financing Charges 62.75 363.45 58.26 279.06
Less: Interest received from banks and others - Gross 110.32 64.96
Tax deducted at source Rs.11.51 Million (Rs.11.39 Million)
253.13 214.10
79
Notes on Balance Sheet and Profit and Loss Account
SCHEDULE - 19
Significant accounting policies and Notes
Company overview
The Company, IVRCL Infrastructures & Projects Ltd,. 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.
A. Significant accounting policies
1. Method of Accounting
The financial statements are based on historical cost convention (except for revaluation of certain Fixed
Assets) and prepared in accordance with Generally Accepted Accounting Principles (Indian GAAP)
comprising the mandatory accounting standards issued by the Institute of Chartered Accountants of India
and the provisions of the Companies Act, 1956.
2. Use of Accounting Estimates
The preparation of the financial statements in conformity with Indian GAAP requires management to
make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to
contingent liabilities as at the reporting date of the financial statements and amounts of income and
expenses during the year of account. Examples of such estimates include contract costs expected to be
incurred to complete construction contracts, provision for doubtful debts, income taxes and future obligations
under employee retirement benefit plans. Management periodically assesses whether there is an indication
that an asset may be impaired and makes provision in the accounts for any impairment losses estimated.
Contingencies are recorded when it is probable that a liability will be incurred, and the amount can be
reasonably estimated. Actual results could differ from those estimates.
3. Fixed Assets
Fixed Assets are stated at cost/valuation less accumulated depreciation and amortisation. Direct costs
inclusive of inward freight, duties and taxes, incidental expenses including interest relating to acquisition
and cost of improvements thereon are capitalised until fixed assets are ready for use. Capital Work in
Progress comprises advances paid to acquire fixed assets and the cost of fixed assets not ready for their
intended use as at the reporting date of the financial statements.
4. Investments
Current investments are carried at lower of cost and fair value. Long term investments are carried at cost
less provision for permanent diminution in value of such investments. Dividend Income is accounted
when the right to receive dividend is established.
80
5. Depreciation and amortisation
5.1. Depreciation on fixed assets is provided on the straight-line method as per rates prescribed in Schedule
XIV to the Companies Act, 1956 except the following which are depreciated based on useful life determined
by the Company.
- Steel Shuttering 10%

- Wood Shuttering 33 1/3 %
5.2. Pucca sheds and land acquired for quarrying are amortised over the period of the project on project-to-
project basis.
6. Recognition of contract revenue and expenses
6.1 Contract Revenue is recognised by reference to the stage of completion of the contract activity at the
reporting date of the financial statements on the basis of percentage of completion method.
6.2 The stage of completion of contracts is measured by reference to the proportion that contract costs incurred
for work performed up to the reporting date bear to the estimated total contract costs for each contract.
6.3 An expected loss on construction contract is recognised as an expense immediately when it is certain that
the total contract costs will exceed the total contract revenue.
6.4 Price escalation and other claims and /or variation in the contract work are included in contract revenue
only when:
(a) Negotiations have reached at an advanced stage such that it is probable that customer will accept
the claim; and
(b) The amount that is probable will be accepted by the customer can be measured reliably.
6.5 Incentive payments, as per customer-specified performance standards, are included in contract revenue
only when:
(a) The contract is sufficiently advanced that it is probable that the specified performance standards will
be met; and
(b) The amount of the incentive payment can be measured reliably.
7. Revenue receipts on joint venture contracts
7.1 In work sharing Joint Venture arrangements, revenues, expenses, assets and liabilities are accounted for
in the Companys books to the extent work is executed by the Company.
7.2 In jointly controlled entities, the share of profits or losses are accounted as and when dividend/share of
profit or loss are declared by the entities.
81
8. Inventories
Inventories are valued at cost. Cost is determined on first-in-first-out method.
9. Retirement benefits to employees
9.1 Gratuity
In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity covering eligible
employees on the basis of actuarial valuation carried out by an Actuary. The liability is unfunded.
9.2 Leave encashment

Leave encashment liability is provided on the basis of actuarial valuation carried out by an Actuary.
9.3 Superannuation
In terms of the Superannuation Scheme of the Company, certain employees of the Company are covered
in the defined contribution plan. Under this plan, the Company makes annual contributions, to an approved
Superannuation Fund under a policy with Life Insurance Corporation of India. The Company has no
further obligations on this account beyond its yearly contributions.
9.4 Provident Fund

Provident fund contributions are made to the Government administered provident fund. The Company
has no further obligations beyond these contributions charged in the financial statements.
10. Foreign currency transactions
Current assets and current liabilities are translated at the exchange rate prevailing on the Balance Sheet
date. Gains/Losses arising out of fluctuations in the exchange rates are recognised in Profit and Loss
Account in the period in which they arise. Exchange fluctuations relating to liabilities incurred for acquiring
fixed assets from outside India are added to the cost of fixed assets.
11. Borrowing costs
Borrowing costs that are attributable to the acquisition and construction of qualifying assets are capitalised
as part of cost of such assets till such time the asset is ready for its intended use. A qualifying asset is one
that requires substantial period of time to get ready for its intended use. All other borrowing costs are
charged to the Profit & Loss Account as period costs.
12. Income tax
Current tax is determined as the amount of tax payable in respect of taxable income for the year. A
provision is made for income tax annually based on the tax liability computed, after considering tax
allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances
or other matters is probable.
Deferred tax assets and liabilities are recognised, subject to prudence, on timing differences, being the
difference between taxable income and accounting income, that originate in one period and are capable
of reversal in one or more subsequent periods and quantified using the tax rates and laws enacted or
substantively enacted by the reporting date. Deferred tax assets are recognised only if there is reasonable
certainty that they will be realised and are reviewed for the appropriateness of their respective carrying
values at each balance sheet date.
82
13. Earnings Per Share (EPS)
In arriving at the EPS, the Companys net profit after tax, computed in terms of the Indian GAAP, is divided
by the weighted average number of equity shares outstanding on the last day of the reporting period. The
EPS thus arrived at is known as Basic EPS. To arrive at the diluted EPS the net profit after tax, referred
above, is divided by the weighted average number of equity shares, as computed above and the weighted
average number of equity shares that could have been issued on conversion of shares having potential
dilutive effect subject to the terms of issue of those potential shares. The date/s of issue of such potential
shares determine the amount of the weighted average number potential equity shares.
B. NOTES ON ACCOUNTS
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 &
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 at par, 5 years and 1 day Zero Coupon US $ denominated
Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 65.00 million (INR 2980 million as
on the date of issue) comprising 650 bonds of US $ 100,000 each to finance capital expenditure and
investment in BOOT/BOT projects including import of capital goods and direct investment in joint
ventures or subsidiaries related thereto. The bond-holders have an option of converting these bonds
into equity shares at an initial conversion price of Rs. 1170.17 per share (Face value Rs 10) with a
fixed rate of exchange on conversion of Rs. 45.84 = US $ 1.00, at any time on or after January 18,
2006 and prior to close of business on November 29, 2010, unless redeemed or repurchased and
cancelled.
b) Expenses incurred in connection with the issue of FCCBs totaling Rs 64.63 million and the redemption
premium of Rs 66.35 million, being the prorata charge for the year have been adjusted against
Securities Premium Account.
c) Rs. 1.68 million has been credited to the Profit and Loss account during the year towards foreign
exchange translation difference on Foreign Currency Convertible Bonds and deposits in foreign
currency.
d) Expenses incurred in connection with the issue of FCCBs include Rs. 2.50 million paid to the auditors
towards professional fees and debited to Securities Premium account.
e) Subsequent to the date of Balance Sheet, some of the bond-holders have exercised their option of
converting their bonds into Equity Shares. Till the close of business hours of the Company on June 1,
2006 amounts aggregating to US $ 9.60 million worth of bonds were converted into 1,880,345
equity shares of the face value of Rs 2 each. These converted shares are entitled to dividends.
f) During the year, the Company sub-divided the shares of the face value of Rs 10 each into five shares
of Rs. 2 each in such a manner that while the face value of the total subscribed capital remains the
same on the date of sub-division i.e. March 4, 2006.
83
3. Components of Deferred Tax Assets and Liabilities:

Rs.in million
As at As at
31-03-2006 31-03-2005
DEFERRED TAX LIABILITY:

Difference between book and tax depreciation 102.15 101.40
TOTAL DEFERRED TAX LIABILITY 102.15 101.40
DEFERRED TAX ASSET:
Provision for gratuity (5.41) (3.24)
Provision for Leave encashment (4.02) (1.89)
Provision for doubtful debts, advances, deposits and bonus (33.43) (40.84)
Public Issue Expenses (17.85) (24.41)
Others - (0.17)
TOTAL DEFERRED TAX ASSETS (60.71) (70.55)
NET DEFERRED TAX LIABILITY 41.44 30.85
4. Retention money (SCHEDULE 10) include dues from subsidiary companies of Rs. 2.07 Million (Rs. 2.07
Million)
5. In terms of the disclosures required to be made under the accounting standard (AS) 7 (revised2002) issued
by the Institute of Chartered Accountants of India for Construction Contracts, the amounts considered in
the financial statements up to the Balance Sheet date are as follows:
Rs. in million
31-03-2006 31-03-2005
Contract Revenue recognised as revenue during the year 15,178.92 10,527.93

Contract costs incurred and recognised profits, less losses 15,086.14 10,484.42
Advances received, net of recoveries from progressive bills 1,421.34 487.50
Gross amount due from customers for contract works 4,765.33 3,065.69
Gross amounts due to customers for contract work NIL NIL
6. The Company has claimed deduction under Section 80 IA of the Income Tax Act, 1961 in respect of the
Profits and gains derived from the development of infrastructure facilities. The claim of the Company has
been disputed by the Tax Authorities and the matter is pending before Income Tax Appellate Tribunal. The
company has been advised that based on judicial pronouncements, the Company is entitled to the said
claim under Section 80IA. Accordingly the tax provision for the year has been done on the basis that the
claim under Section 80IA of the Act is available to the Company.
84
7. Reconciliation of Basic and Diluted shares used in computing Earnings Per Share:-
As at As at
31-03-2006 31-03-2005
Face value(Rs. 2) Face value(Rs. 10)
Number of shares considered as weighted average
shares for calculation of Basic Earnings Per Share(EPS) 105,188,095 16,896,812
Add: Dilutive effect of potential shares out of stock
Options / FCCB etc., outstanding 2,535,740 146,531
Number of shares considered as weighted average shares
and potential shares outstanding for calculation of
diluted EPS 107,723,835 17,043,343
8. Contingent Liabilities: (not provided for)

As at As at
31-03-2006 31-03-2005
Rs. in million Rs. in million
8.1 Bank Guarantees/ Letters of Credit issued by the banks

on behalf of the company, Net of margin money 10,121.53 6,849.55
aggregating to Rs 157.76 Million (Rs. 217.15 Million)
Corporate Guarantees issued by the company

on behalf of its subsidiaries 675.55 865.28
Claims against the company not acknowledged as debts 18.50 18.50
Income Tax demand contested in appeal filed with ITAT 93.77 -
Disputed Sales tax (on appeal) Gross 8.02 3.87
8.2 The Companys claims for deductions under Chapter VI A(section 80 IA) of the Income Tax Act has been
disallowed by the Income Tax Authorities in respect of the Assessment years 2001-02, 2002-03, 2003-04
and 2004-05 and in respect of which the Company has preferred appeals. Based on professional advice,
management is of the view that the provisions made for taxation are adequate. Hence the tax effect
amounting to Rs. 579.06 Million (Rs. 360.74 Million upto 31.03.2005) in respect of those disallowances
upto March 31, 2006 have not been provided.
8.3 Estimated amount of contracts to be executed on capital account Rs. 193.28 Million (Previous year NIL).
9. Computation of Net Profits in accordance with Sec.309(5) of the Companies Act, 1956
9.1 Managerial Remuneration:

(Rs. in million)
2005-06 2004-05
Salary and allowances 6.95 5.61
Commission 52.17 30.61
Contribution to Provident and other Funds 0.76 0.42
Sitting Fees 0.18 0.11
Total 60.06 36.75
85
9.2 Computation of Net Profit in accordance with Section 309(5) of the Companies Act, 1956.
(Rs. in million)
PARTICULARS 2005-06 2004-05
Profit before tax 1,037.25 594.67
ADD: 1. Commission to Managing Director 52.17 30.61
2. Sitting Fees 0.18 0.11
3. Salary and allowances to Directors 6.95 5.61
4. Contribution to Provident and other Fund to Directors 0.76 0.42
5. Provision for diminution in the value of Investments - 0.50
6. Provision For Doubtful Debts, Advances & Other Deposits - 33.75
7. Loss On Sale Of Assets 1.46 1.02
Sub Total 1,098.77 666.69
LESS: Profit on sale of Investment 0.17 0.15
LESS: Capital Profit on sale of assets 0.02 2.84
Sub Total 0.19 2.99
Net Profit as per Sec. 309(5) for the year 1,098.58 663.70
Maximum Commission/Remuneration payable to Managing Director 54.93 33.19
Less: Remuneration paid to Managing Director 2.76 2.58
Commission payable to Managing Director 52.17 30.61
(Rs in million)
10. CIF Value of imports:
Capital Goods 3.83 0.63
Construction Material 27.45 -
11. Expenditure in foreign currency:

Traveling Expenses 0.21 0.18
Interest on Loan 6.72 1.13
Listing fees 0.14 -
FCCB issue expenses 60.94 -
Consultancy Charges 0.04 -
12. Remittance in foreign currencies for dividend:
The Company has not remitted any amount in foreign currencies on account of dividends during the year.
The particulars of dividends for the year 2004-05 paid to non-resident shareholders are as under:
2005-06 2004-05
Number of non-resident shareholders - 2

Number of equity shares held by them - 6,240,000
Gross amount of dividends (Rs. in Million) - 18.72
86
13. Construction material and stores consumed:

Rs. in million
2005-06 2004-05
Value % Value %
Indigenous 6653.98 99.59 3987.18 100
Imported 27.45 0.41 - -
Total 6681.43 100 3987.18 100
14. Dues to Small Scale Industrial Units: As per the records available with the Company, the following are
due to Small Scale Industrial Units (SSI) which has been outstanding as at March 31, 2006 for more than
30 days.
Name of the SSI unit Amount due (Rs.)

Jupitter Engg Co. 689,500
Jai Ganesh Scaff Industries 6,223,549
Ramjilal & Sons 1,458,344
Construction Equipment Corpn 46,500
J.B.Form Work System 660,286
Shilpa Industries 164,642
Durga Scaff 1,098,400
TOTAL 10,341,221
15. RELATED PARTY DISCLOSURE
Information regarding Related Party Transactions as per Accounting Standard 18 issued by the Institute of
Chartered Accountants of India, is given below:
15.1 List of Related Parties and Relationships:
Party Relationship
IVRCL PSC Pipes Private Limited Subsidiary

IVR Enviro Projects Private Limited Subsidiary
IVR Prime Urban Developers Limited Subsidiary
Hindustan Dorr-Oliver Limited Subsidiary
IVRCL Road Toll Holdings Limited Subsidiary
IVRCL Water Infrastructures Limited Subsidiary
IVRCL Steel Constructions & Services Limited Subsidiary
Geo-IVRCL Engineering Limited Subsidiary
Jalandhar Amritsar Tollways Limited Subsidiary of Subsidiary

Salem Tollways Limited Subsidiary of Subsidiary
Kumarapalayam Tollways Limited Subsidiary of Subsidiary
Chennai Water Desalination Limited Subsidiary of Subsidiary
First STP Private Limited Subsidiary of Subsidiary
IVR Hotels & Resorts Limited Subsidiary of Subsidiary
87
Viva Infrastructure Pvt. Limited Associate

Telcon Ecoroad Resurfaces Limited Associate
Paresh Infrastructures Private Limited Associate
Bhanu-IVRCL Associates Joint Venture

SPCL-IVRCL JV Joint Venture
IVRCL-Tantia JV Joint Venture
UAN Raju-IVRCL JV Joint Venture
IVRCL, SEW & PRASAD JV Joint Venture
IVRCL NAVYUGA SEW Joint Venture
IVRCL NAGARJUNA SMC Joint Venture
IVRCL HARSHA Joint Venture
NAVAYUGA IVRCL SEW Joint Venture
Key Management Personnel

Mr.E.Sudhir Reddy Chairman & Managing Director
Mr.E.Sunil Reddy * Director
Mr.R.Balarami Reddy Director - Finance & Group CFO
Mr.K.Ashok Reddy Director - Resources
* Ceased to be a whole time director w.e.f March 1, 2006.
Relatives of Key Management Personnel

Mr. E. Ella Reddy
Mrs. E. Sujatha Reddy
Mrs. E. Indira Reddy
Mr. E. Siddhanth Reddy
Mr. E. Sanjeeth Reddy
Ms. E. Suha Reddy
Ms. E. Soma Reddy
Mrs. R. Vani
15.2 DISCLOSURE OF TRANSACTIONS BETWEEN THE COMPANY AND RELATED PARTIES AND THE
STATUS OF OUTSTANDING BALANCES AS ON 31st March 2006. (Previous year figures are given in
brackets below the current year figures)
(Rs. in million)
Subsidiary Joint Associate
companies Venture companies
Income
IVR Prime Urban Developers Ltd 372.67 - -
(70.31) (-) (-)
SPCL IVRCL JV - - -
(-) (917.20) (-)
IVRCL Sew & Prasad JV - 1725.68 -
(-) (-) (-)
IVRCL Navayuga Sew - 253.78 -
(-) (-) (-)
88

Paresh Infrastructures (P) Ltd - - 13.80
(-) (-) (-)
Others 3.55 481.05 -
(-) (67.38) (-)
Total 376.22 2460.51 13.80
(70.31) (984.58) (-)
Interest Received
(40.69) (-) (-)
Hindustan Dorr Oliver Limited 1.82 - -
(-) (-) (-)
Others 1.65 - -
(1.01) (-) (-)
Total 17.54 - -
(41.70) (-) (-)
Sale of Fixed Assets
UAN Raju IVRCL JV - - -
(-) (15.33) (-)
Total - - -
(-) (15.33) (-)
Purchase of Fixed Assets
IVR Prime Urban Developers Ltd - - -
(64.12) (-) (-)
Total - - -
(64.12) (-) (-)
Advances
IVR Enviro Projects (P) Ltd 26.56 - -
(26.01) (-) (-)
(237.59) (-) (-)
First STP (P) Ltd 20.08 - -
(40.58) (-) (-)
IVRCL Water Infrastructures Ltd 38.80 - -
(-) (-) (-)
Bhanu IVRCL Associates - 35.87 -
(-) (36.72) (-)
SPCL IVRCL JV - 23.31 -
(-) (21.97) (-)
UAN Raju- IVRCL JV - 42.75 -
(-) (11.73) (-)
IVRCL, Sew & Prasad JV - 48.81 -
(-) (-) (-)
IVRCL Harsha JV - 60.10 -
(-) (-) (-)
Others 27.69 2.50 -
(11.05) (7.02) (-)
Total 128.64 213.34 -
(315.23) (77.44) (-)
89

Provision for advance
Bhanu IVRCL Associates - 35.87 -
- (33.44) (-)
Total - 35.87 -
(-) (33.44) (-)
Receivables as at March 31, 2006
(-) (-) (-)
Paresh Infrastructures (P) Ltd - - 13.55
(-) (-) (-)
SPCL- IVRCL JV - 113.77 -
(-) (318.46) (-)
IVRCL, Sew & Prasad JV - 47.82 -
(-) (-) (-)
Navayuga IVRCL Sew - 27.18 -
(-) (-) (-)
Others - 21.26 -
(-) (-) (-)
Total 156.50 210.03 13.55
(-) (318.46) (-)
Retention Money
IVR Enviro Projects (P) Ltd 2.07 - -
(2.07) (-) (-)
SPCL IVRCL JV - - -
(-) (0.27) (-)
Total 2.07 - -
(2.07) (0.27) (-)
Corporate guarantee
(857.78) (-) (-)
Others 0.59 - -
(7.62) (-) (-)
Total 675.72 - -
(865.40) (-) (-)
Capital Work in Progress
(150.00) (-) (-)
90
Key Management Designation Remuneration Dividend Office Interest

Personal/Relatives rent paid
i) Mr. E. Sudhir Reddy Chairman and Managing 54.93 2.52 - 2.04
Director (33.19) (1.05) (-) (2.25)
ii) Mr. E. Sunil Reddy Director Legal 2.00 0.76 - -
(1.44) (0.47) (-) (0.63)
iii) Mr. R. Balarami Reddy Director 1.48 0.07 - -
Finance & Group CFO (1.01) (0.04) (-) (-)
iv) Mr. K. Ashok Reddy Director Resources 1.47 0.03 - -
(1.00) (0.01) (-) (-)
v) Mr. Ella Ready Director - - 0.49 -
(-) (-) (-) (-)
v) Relatives - 0.73 0.64 -
(-) (2.38) (0.30) (-)
Total 59.88 4.11 1.13 2.04
(36.64) (3.95) (0.30) (2.88)
16. Disclosure as per clause 32 of the Listing Agreement

Loans and Advances in the nature of Loans given to Subsidiaries and Joint Ventures:
Rs. in million
Name of the Relationship Amount outstanding Maximum balance
Company as on 31.03.2006 outstanding during
the year
IVRCL PSC Pipes Private Limited Subsidiary 10.21 10.96
IVR Enviro Projects Private Limited Subsidiary 28.63 35.66
IVR Prime Urban Developers Limited Subsidiary 15.51 246.25
First STP Private Limited Subsidiary 20.08 45.62
Geo IVRCL Engineering Limited Subsidiary 0.17 0.17
Hindustan Dorr Oliver Limited Subsidiary 9.23 14.22
IVRCL Road Toll Holdings Limited Subsidiary 0.16 0.53
IVRCL Water Infrastructures Limited Subsidiary 38.80 38.80
IVRCL Steel Constructions &
Services Limited Subsidiary 0.03 0.53
Jalandhar Amritsar Tollways Limited Subsidiary 2.74 6.16
Salem Tollways Limited Subsidiary 1.95 2.45
Kumarapalayam Tollways Limited Subsidiary 1.68 2.18
Chennai Water Desalination Limited Subsidiary - 26.99
IVR Hotels & Resorts Limited Subsidiary 0.03 0.03
Bhanu-IVRCL Associates Joint Venture 35.87 37.51
SPCL IVRCL JV Joint Venture 23.31 25.95
IVRCL Tantia JV Joint Venture 0.62 0.62
UAN Raju IVRCL Construction JV Joint Venture 42.75 62.29
IVRCL, SEW & Prasad JV Joint Venture 48.81 181.72
IVRCL NAVAYUGA SEW Joint Venture 1.88 6.29
IVRCL HARSHA Joint Venture 60.10 76.96
91
17. SEGMENTAL REPORTING: Business Segment: The Company has considered Engineering & Construction
as one business segment for disclosure in the context of Accounting Standard 17 issued by the Institute of
Chartered Accountants of India. 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.
18. 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. The Company has granted:
a) Under ESOP 2000 Scheme 300,000 options to permanent employees of the Company and its
subsidiaries. Of the above, all the options were exercised except for 3,000 options which were
forfeited and cancelled during the year.
b) Under ESOP 2004 Scheme 370,200 options to the permanent employees of the Company and its
subsidiaries, and all the options were exercised except 32,160 options which were forfeited on
account of resignations. 5,800 fresh options were granted during the year as welcome offer to certain
employees of the Company at a single exercise price of Rs. 100.00 per stock option with a vesting
period of 1 year.
An amount of Rs.1.38 Million (Rs. 23.24 Million) is charged as Employee compensation expense.
3. Movement in the options during the year;
ESOP 2000 Scheme
Particulars ESOP Weighted average exercise

2000 Scheme price per stock option (Rs.)
Options outstanding at the beginning of the year 4,500 10.00
Granted during the year - -
Exercised during the year 1,500 10.00
Lapsed during the year 3,000 10.00
Options outstanding during the year - -
Options exercisable at the end of the year - -
92
ESOP 2004 Scheme

Particulars ESOP Weighted average exercise
2004 Scheme price per stock option (Rs.)
Options outstanding at the beginning of the year 370,200 100.00
Granted during the year 5,800 100.00
Exercised during the year 338,040 100.00
Lapsed during the year 32,160 100.00
Options outstanding during the year 5,800 100.00
Options exercisable at the end of the year - -
4. Fair value Methodology:
The fair value of options used to compute pro forma net income and earnings per equity share have been
estimated on the date of granting using Black-Scholes model. The key assumptions used in Black-Scholes
model for computing the fair value are; (a) Risk free interest rate of 6.01% p.a. (b) Expected life of 1 year
and (c) Expected volatility of share price of 49.60%. The weighted average fair value of the option works
out to Rs. 522.35.
Had compensation cost for the stock options granted under ESOP 2004 been determined based on fair
value approach, the Companys net profit and earning per share would have been as per the pro forma
amounts indicated below:
Particulars Rs. in Million

Net Profit (as reported) 929.55
Add: Employee compensation expense included
in net income, based on intrinsic value (Gross Rs. 1.38 million) 0.92
Less: Employee compensation expense determined
under fair value based method (Gross Rs. 1.38 million) 0.92
Net profit ( pro forma) 929.55
(Rs.)
Basic Earnings per share (as reported) 8.84
Basic Earnings per share (pro forma) 8.84
Diluted Earnings per share (as reported) 8.63
Diluted Earnings per share (pro forma) 8.63
19. Derivative Instruments:
The year end foreign exposures that have not been hedged by a derivative instrument or otherwise are
given below:
Particulars US Dollar Equivalent (Million) INR Equivalent (Million)

Amount receivable in foreign currency:
Deposits with Bank 23.50 1,048.81
Balance with Bank 0.15 6.65
Amount payable in foreign currency:
Foreign Currency Convertible Bonds 65.00 2,900.95
93
The above disclosures have been made consequent to an announcement by the Institute of Chartered
Accountants of India in December, 2005, which is applicable to the financial periods ending on or after
31st March, 2006. Therefore, figures for the previous year have not been disclosed.
20. During April 2005, the Company had issued and allotted 3,189,870 fully paid up equity shares of Rs.10
each for cash at a premium of Rs. 385 per equity share at an issue price of Rs. 395 per equity share
aggregating to Rs. 1,260 million and during May 2005 on green shoe option basis 478,470 equity shares
of Rs. 10 each at a premium of Rs. 385 per share aggregating to Rs. 189 Million. The utilisation of the fund
raised through the public issue up to March 31, 2006 is as under:
(Rs. in million)
Particulars Actual utilisation
up to March 31, 2006
Investment in BOT/BOOT projects 121.90
Purchase of Capital Equipment 339.38
Repayment of Debt/Loan 499.60
Issue Expenses 88.12
Total 1049.00
Balance with Banks in FDRs 400.00

1449.00

Note: The utilization of fund for the above purpose includes amount utilized out of the fund raised through
green shoe option for which no specific schedule for utilization of issue proceeds had been disclosed in
the prospectus filed with Securities and Exchange Board of India.
21. Information required under 4C, of Part-II of Schedule VI to the Companies Act, 1956 relating to licensed
capacity, installed capacity and actual production is not applicable.
Signatures to Schedules 1 to 19 forming part of the financial statements.
FOR AND ON BEHALF OF THE BOARD
E.SUDHIR REDDY R.BALARAMI REDDY G.RAMA KRISHNA RAO

Chairman & Director Finance Company Secretary
Managing Director. & Group CFO
Place : Hyderabad
94

Board of Directors

Uploaded by

Document Informationclick to expand document information

Copyright:

Available Formats

Board of Directors

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Board of Directors

Uploaded by

Copyright:

Available Formats

Compiled by : Asian CERC Informtion Technology Ltd.

Company Secretary Bankers

Registrars and Transfer Agents

M/s. KARVY Computershare Private Ltd.

Performance at a glance Three

Directors' Report Nine

Management Discussion & Analysis Twenty Two

Report on Corporate Governance Forty Nine

Auditors' Report Sixty Two

Balance Sheet Sixty Seven

Profit and Loss Account Sixty Eight

Cash Flow Statement Sixty Nine

Schedules Seventy One

Consolidated Financial Statements Ninety Five

Accounts of Subsidiary Companies :

Hindustan Dorr-Oliver Limited One Hundred and Twenty Three

IVR Prime Urban Developers Limited One Hundred and Sixty

FORWARD LOOKING STATEMENTS

6. Super-annuation benefits equivalent to one 1. Salary Rs. 1,46,300/- p.m.

Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956,

ITEM NO. 3, 4, 5, 7&8. Memorandum of Interest: None of the Directors

Memorandum of Interest: None of the Directors ITEM NO: 11

Sl. No. Name of the Director Board Meetings

Year ended Year ended

Gross Turnover 15214.23 10547.33

2. DIVIDEND Sl.No. Name of the Orders on %

The company has entered into joint venture 7. SUBSIDIARIES

a) IVRCL ESOP 2000 Mr.E.Sunil Reddy who was designated as Director 

16. AUDITORS Innovation is a culture in the Company to achieve

Number of shares held and extent of

a ) The number of equity shares of Rs.

The net aggregate profits or (losses) of the

a) dealt with or provided in the accounts

b) Not dealt with or provided in the

The net aggregate profits or (losses) of the

a) dealt with or provided in the accounts

b) Not dealt with or provided in the

Number of shares held and extent of

a ) The number of equity shares of Rs.

The net aggregate profits or (losses) of the

a) dealt with or provided in the accounts

b) Not dealt with or provided in the

The net aggregate profits or (losses) of the

a) dealt with or provided in the accounts

b) Not dealt with or provided in the

In fo rm a tio n re g a rd in g su b sid ia ry c o m p a n ie s in re sp e c t o f w h ic h th e c o m p a n y h a s b e e n e x e m p te d fro m th e p ro v isio n s c o n ta in e d in su b -se c tio n (1 ) o f S e c tio n 2 1 2 o f th e C o m p a n ie s A c t, 1 9 5 6 v id e

9 P ro fit a fte r ta x a tio n 1 1 7 ,0 4 8 ,1 5 8 (1 ,1 9 7 ,4 9 8 ) 9 7 ,1 3 3 8 ,1 7 9 ,0 6 4 (1 ,2 9 4 ,4 8 6 ) - (2 ,7 1 8 ,4 3 1 ) - - - - -

Particulars First Scheme Second Scheme TOTAL

Mr. G.Seetharam 4000 1800 5800

1 Name E. Sudhir Reddy

3 Designation / Nature of Duties Chairman & Managing Director Overall control

4 Gross Remuneration Rs.5,49,29,356/-

6 Total Experience (Years) 26

7 Date of Commencement of Employment March 25, 1990

8 Last Employment Not under employment earlier

For and on behalf of the Board

MANAGEMENT DISCUSSION AND ANALYSIS OF

Over View: new highways, dams, power plants, pipelines, etc.

a) IVRCL ESOP 2000 Mr.E.Sunil Reddy who was designated as Director

IVRCL - We Make It Happen! Hyderabad Metro Water Supply & Sewerage

v National Highway Project (NH 1) from v Construction of Seawoods Estate, Phase II

Leveraging Core Competencies in Emerging Sectors Ø Highway Amenities Truck Terminals,

Annexure B to Directors' Report Report on Corporate Governance

i. Non executive Directors