| Note | Particulars | | |
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| 1 | Significant accounting policies | | |
| 1.1 | Principles of Consolidation: | | |
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| | The Consolidated Financial Statements relate to Afcons Infrastructure Limited (the Company), its subsidiaries and jointly controlled entities (the Company, its subsidiaries and jointly controlled entities constitute the Group) which have been brpared in accordance with the Accounting Standards on Consolidated Financial Statements (AS) 21 and Financial Reporting of Interests in Joint Ventures (AS) 27 brscribed under section 211(3C) of the Companies Act, 1956. Further the Consolidated Financial Statements include investments in associates accounted for using equity method in accordance with the Accounting Standard on Accounting for Investments in Associates in Consolidated Financial Statements (AS) 23 brscribed under section 211 (3C) of the Companies Act, 1956. The consolidated financial statements have been brpared on the following basis : | | |
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| 1.1.1 | The financial statements of the Company and its subsidiaries are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses in accordance with Accounting Standard (AS- 21) Consolidated Financial Statements notified under the Companies (Accounting Standards) Rules, 2006. | | |
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| 1.1.2 | The difference between the costs of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital Reserve as the case may be. | | |
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| 1.1.3 | The difference between the proceeds from disposal of investment in a subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognized in the consolidated statement of Profit and Loss as the profit or loss on sale of investment in subsidiary. | | |
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| 1.1.4 | Minority Interests share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Company. | | |
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| 1.1.5 | Minority Interests share of net assets of consolidated subsidiaries is identified and brsented in the consolidated balance sheet separate from liabilities and the equity of the Companys shareholders. | | |
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| 1.1.6 | In case of associates, where the Company directly or indirectly through subsidiaries holds more than 20% of equity or exercises significant influence over the investee, investments are accounted for using equity method in accordance with Accounting Standard (AS-23) Accounting for Investments in Associates in consolidated financial statements notified under the Companies (Accounting Standards) Rules, 2006. | | |
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| 1.1.7 | The difference between the cost of investment in the associate and the share of net assets at the time of acquisition of shares in the associate is recognised in the financial statements as Goodwill or Capital Reserve as the case may be. | | |
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| 1.1.8 | The Companys interest in Jointly Controlled Entities are consolidated on a proportionate consolidation basis by adding together the proportionate book values of assets, liabilities, income and expenses and eliminating the unrealised profits/losses on intra-group transactions. | | |
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| 1.1.9 | As far as possible, the consolidated financial statements are brpared using uniform accounting policies for like transactions and other events in similar circumstances and appropriate adjustments are made to the financial statements of subsidiaries when they are used in brparing the consolidated financial statements that are brsented in the same manner as the Companys separate financial statements. | | |
| 1.1.10 | The accounts of the Indian subsidiaries have been brpared in compliance with the Accounting Standards referred to in Section 211(3C) and other requirements of the Companies Act, 1956 and those of the foreign subsidiaries have been brpared in compliance with the local laws and applicable Accounting Standards. In the opinion of the Management, based on the analysis of the significant transactions of those subsidiaries, no material adjustments are required to be made to comply with group accounting policies / Indian GAAP. | | |
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| 1.2 | As required by Accounting Standard (AS-23) Accounting for Investments in Associates on consolidated financial statements notified under the Companies (Accounting Standards) Rules, 2006, the carrying amounts of investments in Associates is adjusted for post acquisition change in the Companys share in the net assets of the associates after eliminating unrealised profits or losses, if any. | | |
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| 1.3 | The list of the subsidiaries of the Company which are included in the consolidation and the Groups holding therein are as under: | | |
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| | Name of Subsidiary | Country of Incorporation | Percentage Holding-Share |
| | Hazarat and Company Private Limited. | India | 100% |
| | Afcons Corrosion Protection Pvt. Ltd (Formerly SSS Electricals (India) Private Limited). | India | 100% |
| | Afcons Offshore and Marine Services Pvt. Limited. | India | 100% |
| | Afcons Infrastructures Kuwait for Building, Road and Marine Contracting WLL* (w.e.f 11/09/2011) | Kuwait | 49% |
| | Afcons Construction Mideast LLC* | U.A.E | 49% |
| | Afcons Overseas Construction LLC* (wef 03/09/2012) | Qatar | 49% |
| | Afcons Infrastructure International Limited | Mauritius | 100% |
| | Afcons Madagascar Overseas SARL # | Madagascar | 100% |
| | Afcons Gulf International Projects Services FZE # | U.A.E. | 100% |
| | Afcons Pauling Joint Venture | India | 95% |
| | Afcons Gunanusa Joint Venture (a Jointly Controlled Entity) | India | 80% |
| | Transtonnelstroy Afcons Joint Venture (a Jointly Controlled Entity) | India | 99% |
| | Dahej Standby Jetty Project Undertaking (a Jointly Controlled Entity) | India | 100% |
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| | * It is accounted based on control exercised by the Company on the composition of Board of Directors. | | |
| | # Step down subsidiaries of Afcons Infrastructure International Limited. | | |
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| 1.4 | The associate of the Group which is included in the consolidation and the Groups holdings therein is as under: | | |
| | Name of the Associate | Country of Incorporation | Percentage Holding-Share |
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| | Afcons (Mideast) Construction and Investments Private Limited * | India | Less than 1% |
| | * It is accounted based on significant influence by the Company on the composition of Board of Directors. | | |
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| 1.5 | The list of the joint ventures of the group that are included in the consolidation and the Groups holding therein are as under: | | |
| | Name of the Joint Ventures | Percentage Holding Share | |
| | Strabag AG Afcons Joint Venture, India | 40% | |
| | Saipem Afcons Joint Venture, Oman | 50% | |
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| 2 | Basis of Accounting | | |
| 2.1 | The Accounts are brpared on accrual basis under the historical cost convention and to comply in all material aspects with generally accepted accounting principles (GAAP) in India, the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 as amended from time to time. | | |
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| 2.2 | Use of Estimates | | |
| | The brparation of financial statements in conformity with GAAP requires that the management of the company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon Management's evaluation of the relevant facts and circumstances as on the date of financial statements. All information on key policies and the basis of the estimates and the major sources of uncertainties have been disclosed along with the respective note. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts / advances, future obligations in respect of retirement benefit plans, etc. Difference between actual results and estimates are recognised in the period in which the results are known / materialise. | | |
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| 2.3 | Cash flow statement | | |
| | Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. | | |
| | Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition) highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. | | |
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| 2.4 | Tangible Fixed Assets | | |
| | Tangible Fixed assets are stated at cost of acquisition/construction; inclusive of inward freight, duties, taxes, installation expenses and any expenses directly attributable to the assets to bring them to site and in working condition for its intended use; or book value and include amounts added on revaluation less accumulated debrciation (refer note 13(2)) and impairment loss, if any. The Company has adopted the provisions of para 46 / 46A of AS 11 The Effects of Changes in Foreign Exchange Rates, accordingly, exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of debrciable fixed assets are adjusted to the cost of the respective assets and debrciated over the remaining useful life of such assets. | | |
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| | Leasehold improvements have been capitalized and are written off over the primary lease term not exceeding five years. | | |
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| 2.5 | Intangible Fixed Assets | | |
| | Intangible assets are recognized as per the criteria specified in Accounting Standard (AS) 26 Intangible Assets. | | |
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| 2.6 | Debrciation | | |
| | Debrciation on fixed assets (including revalued assets) is provided on the straight-line basis in accordance with the provisions of the Companies Act, 1956, at the rates and in the manner specified in schedule XIV to the Act except in case of Tunnel Boring Machines, which are amortised on the basis of the length of the tunnel bored over the life of the construction project for which it is used. | | |
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| | Capital spares consumed are capitalized and amortized over a period of four years. | | |
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| | The difference between debrciation on revalued cost and original cost has been withdrawn from Revaluation Reserve and credited to the Statement of Profit and Loss. | | |
| | Cost of the Intangible Assets viz computer software is amortized over a period of five years. | | |
| 2.7 | Impairment | | |
| | An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Profit & Loss in the year in which an asset is identified as impaired. The impaired loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value. | | |
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| 2.8 | Investments | | |
| | Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost. However, when there is a decline, other than temporary in the value of the long term investment, the carrying amount is reduced to recognize the decline. | | |
| | Investment in shares of the subsidiaries registered outside India, are stated at cost by converting at the rate of exchange brvalent at the time of acquisition thereof. | | |
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| 2.9 | Inventories | | |
| | a) Construction materials, stores and spare parts are valued at lower of cost and net realizable value. Cost is determined on the basis of weighted average method. Cost of shuttering materials (included in construction materials), issued to jobs, is charged off equally over a period of four years. | | |
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| | b) Work done remaining to be certified / billed is treated as Construction Work in Progress in the accounts. The same is valued at the realizable value. | | |
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| 2.10 | Retention monies | | |
| | Amounts retained by the clients until satisfactory completion of the contract(s) are recognised in the financial statements as receivables. Where such retention monies have been released by the clients against submission of bank guarantees, the amounts so released are adjusted against receivables from these clients. | | |
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| 2.11 | Foreign currency transactions | | |
| | (i) Company: Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss. | | |
| | (ii) Integral foreign operations: Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Companys integral foreign operations are recognised as income or expense in the Statement of Profit and Loss. | | |
| | (iii) Net investment in non-integral foreign operations: The exchange differences on restatement of long-term receivables / payables from / to non-integral foreign operations that are considered as net investment in such operations are accumulated in a "Foreign currency translation reserve" until disposal / recovery of the net investment, in which case the accumulated balance in "Foreign currency translation reserve" is recognised as income / expense in the same period in which the gain or loss on disposal / recovery is recognised. | | |
| | (iv) Exchange difference on long-term foreign currency monetary items: The exchange differences arising on settlement / restatement of long-term foreign currency monetary items are capitalised as part of the debrciable fixed assets to which the monetary item relates and debrciated over the remaining useful life of such assets. If such monetary items do not relate to acquisition of debrciable fixed assets, the exchange difference is amortised over the maturity period / upto the date of settlement of such monetary items, whichever is earlier, and charged to the Statement of Profit and Loss except in case of exchange differences arising on net investment in non-integral foreign operations, where such amortisation is taken to "Foreign currency translation reserve" until disposal / recovery of the net investment. The unamortised exchange difference is carried in the Balance Sheet as Foreign currency monetary item translation difference account net of the tax effect thereon, where applicable. | | |
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| 2.12 | Revenue recognition on contracts | | |
| | a) Contract revenue and expenses are recognized, when outcome can be estimated reliably, on the basis of percentage completion method. Percentage of completion is determined based on the nature of contracts, either in proportion of contract costs incurred upto the reporting date to the estimated total cost or on the basis of physical proportion of the contract work completed. | | |
| | b) Contract revenue in case of Cost Plus contracts is determined by adding the aggregate cost plus proportionate margin as agreed with the customer. | | |
| | c) Variations (in contracts) and amounts in respect thereof are recognized only when it is probable that the customer(s) will approve them and amounts can be measured reliably. | | |
| | d) Claims and amounts in respect thereof are recognized only when negotiations have advanced to a stage where it is probable that the customer(s) will accept them and amounts can be reliably measured. In the case of Arbitration Awards (the Awards) which are granted unanimously in favor of the Company, the claims awarded, are accounted in the year the Awards are received. The interest granted on such claims is recognised as per terms of the Awards. | | |
| | e) Revenue is recognised only when no significant uncertainties exist regarding its measurement and collectability. | | |
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| 2.13 | Export Benefits | | |
| | Export benefits in the form of duty credit entitlement licenses granted by the Government of India under the Served from India scheme, on the basis of export realizations made are recognised on the basis and to the extent of actual utilisation and managements estimate of their likely utilisation. | | |
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| 2.14 | Government grants /subsidies | | |
| | Benefit under Deemed Export scheme are recognised when there is a reasonable assurance that the Benefit will be received and all attaching conditions will be complied with. | | |
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| 2.15 | Provision for Estimated Losses | | |
| | Estimated losses, if any, in respect of contracts in progress are provided for based upon current estimates of cost to completion. | | |
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| 2.16 | Employee benefits | | |
| | i) Gratuity | | |
| | Companys liability towards gratuity is determined by actuarial valuation carried out by the independent actuary as at each balance sheet date. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. | | |
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| | ii) Superannuation | | |
| | The trustees of Afcons Infrastructure Limited Superannuation Scheme Trust have taken a Group Superannuation policy from the LIC. Provision for superannuation is made on the basis of brmium payable in respect of the aforesaid policy. | | |
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| | iii) Provident fund | | |
| | Contribution as required under the statute/ rules is made to the Government Provident Fund. | | |
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| | iv) Compensated absences | | |
| | The liability for compensated absences is determined by actuarial valuation carried out by the independent actuary as at each balance sheet date and provided for as incurred in the period in which services are rendered by employees. The actuarial valuation method used for measuring the liability is the Projected Unit Credit method. | | |
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| | v) Other Benefits | | |
| | The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders the service. | | |
| | vi) Actuarial gains and losses | | |
| | The actuarial gains and losses are recognised immediately in the statement of Profit and Loss. | | |
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| 2.17 | Borrowing costs | | |
| | Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue. | | |
| 2.18 | Segment Reporting: | | |
| | The following accounting policies have been followed for segment reporting: | | |
| | i) Segment Revenue includes income directly identifiable with / allocable to the segment. | | |
| | ii) Expenses that are directly identifiable with / allocable to segments are considered for determining the Segment Results. The expenses which relate to the Group as a whole and not allocable to segments are included under Unallocable expenses. | | |
| | iii) Segment assets and liabilities include those directly identifiable with the respective segments. | | |
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| 2.19 | Leases | | |
| | Assets leased out under operating leases are capitalised. Rental Income is recognised on straight line basis over the lease term. | | |
| | Assets acquired on lease where significant portions of the risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Lease rentals are charged to Statement of Profit & Loss on straight line basis over the lease term. | | |
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| 2.20 | Doubtful debts and advances | | |
| | Provision is made in the accounts for debts and advances which in the opinion of the management are considered doubtful of recovery. | | |
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| 2.21 | Taxation | | |
| | Income taxes are accounted for in accordance with Accounting Standard (AS-22) Accounting for taxes on income, notified under the Companies ( Accounting Standards) Rules, 2006. Income tax comprises both current and deferred tax. | | |
| | Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. | | |
| | The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date. | | |
| | Deferred tax assets arising mainly on account of brought forward losses and unabsorbed debrciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realisation. | | |
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| 2.22 | Interest Income | | |
| | Interest income is recognised on time proportion basis taking into account the amount outstanding and the applicable interest rates. | | |
| 2.23 | Accounting for joint ventures: | | |
| | Accounting for joint ventures has been done as follows :- | | |
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| | Type of Joint Venture : Jointly Controlled Entity | | |
| | Accounting treatment : | | |
| | Interests in jointly controlled entities comprise of the share of the Groups interest in a company in which the Group has acquired joint control over its economic activities by contractual agreement. | | |
| | Interests in jointly controlled entities are included in the consolidated financial statements of the Group from the point in time at which the joint control is transferred to the Group and are no longer included in the consolidated financial statements from the point in time at which the joint control ceases. Interests in joint ventures are aggregated in the consolidated financial statements by using the proportionate consolidation method, which means that the Groups share in book values of like items of assets, liabilities, income and expenses are aggregated after eliminating the intra-Group balances and transactions to the extent of the proportionate share of the Group in the joint venture. | | |
| 2.24 | Provisions, Contingent Liabilities and Contingent Assets | | |
| | Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed when the Company has a possible or brsent obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed. | | |