Notes to Accounts of Hindustan Construction Company Ltd.

Mar 31, 2025

Note 6.3: Non-current trade receivables and current trade receivables as at March 31,2025 includes ''646.52 crore (March 31, 2024: ''654.99 crore) and ''1,004.65 crore (March 31,2024: ''596.53 crore) respectively, representing claims awarded in arbitration in favour of the Company and which have been challenged by the customers in courts.

Note 6.4: There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms or private companies in which any director is a partner, a director or a member.

Note 6.5: Trade receivables (other than receivables on account of claims awarded in arbitration in favour of the Company) are noninterest bearing and are generally on terms of 30 to 90 days except retention deposits, which are due after completion of the defect liability period of the respective projects.

Note 9.6: During the year, the Company has exercised the option to adopt the new tax regime for previous year 2023-24 (Assessment Year: 2024-2025) onwards, while filing income tax return, which provides an option for paying corporate tax at reduced rates as per provisions/conditions of Section 115BAA of the Income Tax Act, 1961. Pursuant to the adoption of the new tax regime, current tax expenses recognised in previous year ''54.74 crore have been reversed during the year ended March 31,2025. Further as a result of adoption of the new tax regime, the unused tax credits recognised are no longer utilizable and the net deferred tax assets on temporary taxable differences have been recognised using lower tax rate resulting in reversal of deferred tax assets aggregating ''301.22 crore. As at March 31, 2025, the Company has net deferred tax assets amounting to ''204.90 crore (March 31, 2024: ''613.09 crore), which mainly represents deferred tax assets on carried forward unused tax losses and other taxable temporary differences. The Company is confident of generating sufficient taxable profits from the unexecuted orders on hand/future projects and expected realisation of claims/arbitration awards against which such deferred tax assets can be utilised and therefore considered good and recoverable.

Note 15.2 - Terms / rights attached to equity shares:

The Company has only one class of equity shares having a par value of ''1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend, if any.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Note 15.3 - Shares held by subsidiary company:

Western Securities Limited, a erstwhile subsidiary company, holds Nil (March 31, 2024: 52,000) equity shares in the Company.

As per the records of the Company, including its register of shareholders/members the above shareholding represents both legal and beneficial ownership of shares.

Note 15.5 - Bonus shares/buy back/shares for consideration other than cash issued during past five years:

(i) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash - Nil

(ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil

(iii) Aggregate number and class of shares bought back- Nil

Note 15.6 - Option outstanding for issue under Employee Stock Options Scheme (ESOS):

As at March 31,2025, the Company has 185,874 (March 31, 2024; 371,748) employee stock option issued under ESOP for its employees.

During the year, the Company had issued and allotted 166,666,666 equity shares of ''1 each at a price of ''21 per equity share (including a premium of ''20 per equity share) aggregating ''350.00 crore to the eligible equity shareholders on rights basis in the ratio of 13 equity shares for every 118 equity shares held. Pursuant to the aforesaid, basic and diluted earnings per share for the year ended March 31, 2024 have been retrospectively adjusted for effect of rights issue.

Note 15.9 - Qualified Institutions Placement (QIP)

During the year, the Company has issued and allotted 139,502,441 equity shares of face value of ''1 each at a price of ''43.01 per Equity Share, including a premium of ''42.01 per Equity Share, aggregating ''600 crore to 41 qualified institutional investors. The QIP issue proceeds are utilised in accordance with the objects of the issue as stated in the placement document.

For Listed Company creation of Debenture redemption reserve (DRR) is dispensed with, as a result, during the current year the Company has transferred debenture redemption reserve to general reserve.

Nature and purpose of reserves

i) Capital reserve

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own equity instruments to capital reserve.

ii) Forfeited debentures account

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own debentures to forfeited debentures account.

iii) Securities premium

Securities premium is used to record the premium received on issue of shares. This account is utilised in accordance with the provisions of the Companies Act, 2013.

iv) Debenture redemption reserve

The Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of the debentures issued, either by a public issue or a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures. Consequent to the amendment in the provision of Act, requirement to create reserve in respect of certain debenture have been withdrawn.

v) General reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn.

vi) Share option outstanding account

The share option outstanding account represents reserve in respect of equity settled share options granted to the Company''s employees in pursuance of the Employee Stock Option Scheme.

vii) Retained earnings

Retained earnings represents the profits/ losses that the Company has earned/incurred till date including gain/(loss) on remeasurement of defined benefits plans as adjusted for distributions to owners, transfer to other reserves, etc.

viii) Equity instruments at fair value through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity securities are disposed off.

17.1 Details of security and terms of repayment

I. Secured

(a) Optionally Convertible Debentures (OCDs)

OCDs issued to the lenders with a tenure of 10 years and carry a coupon of 0.01% with an interest yield of 11.50% p.a. in yield equalization compounded on a quarterly basis. The lenders have an option to convert the OCDs into equity shares of the Company, in accordance with the terms thereof including in case of any event of default or default in payment during the 10 years from the date of issuance of respective OCDs. In accordance with the resolution plan implemented in FY 2022-2023, the repayment tenure of OCDs has been extended and the revised repayment of the OCDs commenced from March 31,2023.

Note: Optionally Convertible Debentures (OCDs) are secured in the form of:

1. A land parcel admeasuring to 100 sqm as First Mortgage and all the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

2. All the present and future current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

3. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Financing Document.

The above security having ranking in respect to OCD are as below:

1. Pari Passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. Pari Passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

(b) Non-Convertible Debentures - LIC

These NCDs carry an interest yield of 11.50% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 7 structured annual instalments commencing March 31, 2023 and ending on March 31, 2029. Refer note below for security details.

Note: Non-Convertible Debentures - LIC

1. A land parcel admeasuring to 100 sqm as First Mortgage and all the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

2. All the present and future current assets of the Borrower (other than those forming part of Additional Assets'') as the Third Mortgaged Properties.

3. All of the Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Financing Document.

The above security having ranking in respect to LIC -NCD are as below:

1. A first ranking and pari passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with lenders for LIC-NCD and OCD

1. HREL Real Estate Limited, an erstwhile subsidiary, has provided Corporate guarantee for the above outstanding facilities of the Company.

2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. First Pari passu charge over Prolific Shares of 50,000 of HCC Holding.

4. Personal guarantee of Chairman and Non-Executive Director of the Company.

(c) Foreign Currency Term Loan (''FCTL'')

During the earlier year, the Company has implemented debt resolution plan pursuant to which the FCTL has been restructured and is payable in 7 structured annual instalments commencing from March 31, 2023. The FCTL carries a floating interest rate equal to 3 Month SOFR plus 350 basis point. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation.

(d) Non Convertible Debentures - Karnataka Bank

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable on March 31,2026 and are secured by exclusive charge upto 0.19% on specific claims of the Company.

(e) Non Convertible Debentures - ACRE

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 2 structured instalments on March 31,2026 and June 30, 2029 and are secured by exclusive charge upto 49.53% on specific claims of the Company.

II. Unsecured

(A) Foreign Currency Term Loan from Bank

During the earlier years, the Company has entered into an amendment agreement with the lender wherein the parties have agreed to restructure the outstanding amounts for USD 6.89 Million with fixed interest rate of 1.91% compounded annually, repayable in 3 structured instalments commencing from December 31, 2028 and ending on December 31, 2030.

(B) Non Convertible Debentures - ARCIL

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable in 7 structured annual instalments commencing March 31,2023 and ending on March 31, 2029. The Company has paid its March 2023, March 2024 and March 2025 instalment on time.

(C) Non Convertible Debentures - Others

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. and are repayable in 3 structured instalments commencing on June 30, 2029 and ending on June 30, 2031.

(D) Loan from related parties / others

Loan from Steiner India Limited (step down subsidiary till December 20, 2024), repayable on demand is interest free. (Refer note 373)

(E) Other bank loan

Overdraft facility availed by HCC-HDC Joint Venture carry an interest rate of 8.71% p.a. (March 31,2024: 8.71%) which was repayable on demand, paid during the current year.

Note 17.2 Right to Recompense:

In accordance with the provisions of existing financing document executed between the Company and its lenders, as amended from time to time and pursuant to deliberations between the parties, lenders have agreed for the recompense amount to be settled by the Company in the form of equity shares to be issued at a future date, which is inter-alia dependent upon various factors including improved financial performance of the Company and other conditions, and which would be restricted to a maximum of 2.87% of equity share capital of the Company on the date of issue of such equity shares. This is valid as on the Balance Sheet date under MRA dated July 20, 2022.

Note 22.1 During the previous year, the Company has recognized interest income on arbitration awards of ''7749 crore. This has been presented net of reversal of interest in respect of a project, where Supreme Court while upholding the award, has modified the interest. This resulted in a cumulative interest reversal of ''83.23 crore. The net charge of ''5.74 crore has been grouped in "Miscellaneous expenses" under the head "Other expenses''.''

Note 22.2 Disclosure in accordance with Ind AS 115 - Revenue from Contracts with Customers

Note 22.2.1 Disaggregation of revenue - Company''s entire business falls under one operational segment of ''Engineering and Construction''. Contract revenue represents revenue from Engineering and Construction contracts wherein the performance obligation is satisfied over a period of time. Further, the management believes that the nature, amount, timing and uncertainty of revenue and cash flows from all its contracts are similar. Accordingly, disclosure of revenue recognised from contracts disaggregated into categories has not been made.

Note 22.2.2 Performance obligations - The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is ''11,852.00 crore (March 31,2024: ''10,475 crore). Most of Company''s contracts have a life cycle of three to five years. Management expects that around 40%- 50% of the transaction price allocated to unsatisfied contracts as of March 31, 2025 will be recognised as revenue during next reporting period depending upon the progress on each contracts. The remaining amounts are expected to be recognised over the next two years. The amount disclosed above does not include variable consideration.

Note 22.2.3 (a) I ncrease in contract assets is primarily due to lesser certification of progress bills as compared to revenue for the year. Further, contract liability has decreased due to higher recognition of revenue as compared to progress bills raised during the year.

Note 22.2.3 (b) Revenue recognised during the year from opening balance of contract liability (i.e. due to customers) amounts to ''16.82 crore (March 31, 2024: ''1.27 crore).

Note 22.2.3 (c) Revenue recognised during the year from the performance obligation satisfied upto previous year amounts to ''21723 crore (March 31, 2024: Nil).

Note 22.2.4 Out of the total revenue recognised during the year, ''4,793.31 crore (March 31, 2024: ''4,988.03 crore) is recognised over a period of time and ''774 crore (March 31, 2024: ''54.75 crore) is recognised at a point in time.

Note 22.2.5 There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.

Note 22.2.6 Cost to obtain or fulfil the contract:

a) Amount of amortisation recognised in Statement of Profit and Loss during the year : Nil

b) Amount recognised as contract assets as at March 31,2025 : Nil

Note 23.1 During the previous year, the Company entered into a revised sanction letter with a holder of Optionally Convertible Debentures (''OCD'') which provides for a waiver on the interest accrued on prepayment of OCD''s. The Company made prepayments towards outstanding OCD''s during the previous year which resulted in gains on settlement of debt, representing waiver of interest (net of processing charges), amounting to ''46.16 crore.

Note 29.1 During the previous year, the Company sold a land parcel situated in Village Karnala (Tara), Panvel, Maharashtra along with the structures standing thereon for a consideration of ''95.00 crore. The resultant gain of ''8793 crore has been presented as an exceptional item.

Note 29.2 During the previous year, the Company has entered into a Share Purchase Agreement (''SPA'') with HREL Real Estate Limited (''HREL) for acquisition of HRL Thane Real Estate Limited (''HRL Thane''), wholly owned subsidiary of HREL. Pursuant to the SPA, HRL Thane has become a direct subsidiary of the Company. Further, HREL has assigned certain inter corporate deposits (''ICD'') receivable from HRL Thane in favor of HCC. As per the terms of the agreement between the parties, the considerations in respect of the above have been adjusted against the Company''s receivable from HREL, which were written off in the earlier years. The effect of these transactions has resulted in a net gain of ''80.63 crore, which has been presented as an exceptional item.

NOTE 31 CONTINGENT LIABILITIES AND COMMITMENTS A. Contingent liabilities
	As at March 31, 2025	As at March 31, 2024
(i) Claims against the company not acknowledged as debts	3.65	741
(ii) Income tax liability that may arise in respect of matters in which the Company is in appeals	11.45	51.93
(iii) Indirect tax liability that may arise in respect of matters in which the Company is in appeals	159.38	179.35

Note 31.1 It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities. Future cash outflows in respect of the above are determinable only on receipt of judgments/decisions pending with various forums/authorities. The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.

B. Commitments
	As at March 31, 2025	As at March 31, 2024
Capital commitments (net of advances)	14.41	4.43

NOTE 32 As at March 31,2025, the Company has investments (including deemed investments) in its wholly owned subsidiary HCC Infrastructure Company Limited (''HICL) aggregating ''1,294.33 crore (March 31, 2024: ''1,294.45 crore) classified as non-current investment ''1,159.48 crore (March 31, 2024: ''1,294.45 crore) and current investment of ''134.85 crore (March 31, 2024: Nil). While the consolidated net worth of HICL as at March 31,2025 has been substantially eroded, the management has assessed the fair value of HICL based on a valuation report from an independent valuation expert. The valuation includes significant judgements and estimates in respect of future business plans, expected share of future revenues of subsidiaries sold and outcome of litigations for favourable arbitration awards in a step-down subsidiary. Accordingly, based on aforementioned valuation report and future business plan, the management believes that the recoverable amount of investment in HICL is higher than its carrying value.

NOTE 33 Unbilled work-in-progress (contract assets), current trade receivables and non-current trade receivable includes ''308.59 crore, ''214.27 crore and ''5752 crore, respectively, outstanding as at March 31, 2025, representing receivables from customers based on the terms and conditions implicit in the contracts and other receivables in respect of closed/substantially closed/suspended projects. These aforementioned receivables are mainly in respect of cost over-run arising due to client caused delays, deviation in design and change in scope of work, for which Company is at various stages of negotiation/ discussion with the clients or under arbitration/litigation. Considering the contractual tenability, progress of negotiations/discussions/arbitration/litigations and as legally advised in certain contentious matters, the Company is confident that these receivables are good and fully recoverable.

Note 34.1 Classification of joint arrangements

The aforementioned entities are joint arrangements whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Company (i.e. Joint Operator) recognises its direct right to assets, liabilities, revenue and expenses of Joint Operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses and are incorporated in the standalone financial statements under the respective financial statement line item.

e) Quantities sensitivity analysis for significant assumption is as below:

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation, keeping all other actuarial assumptions constant. The significant actuarial assumptions are discount rate, salary escalation rate, and attrition rate.

Sensitivities due to mortality are not material and hence the impact of change due to these are not calculated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting year) has been applied when calculating the provision for defined benefit plan recognised in the Balance Sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it provides an approximation of the sensitivity of the assumptions shown.

Risk exposure:

The defined plan is exposed to a number of risks, the most significant of which are detailed below:

i. Salary increases - Actual salary increases will increase the plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

ii. Discount rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

iii. Mortality and disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

II Provident fund

In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee.

In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

NOTE 36 FAIR VALUE

The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.

(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

37.1 Including through subsidiary companies.

372 During the current year, the Company has sold its entire shareholding in Western Securities Limited (''WSL), a subsidiary of the Company. Consequently, WSL has ceased to be a subsidiary of the Company w.e.f. August 14, 2024. The Company has recognised a gain of ''5.62 crore on this transaction which has been presented under the head "other income."

373 During the current year, pursuant to moratorium, the Zurich District Court has passed an Order approving a scheme of arrangement in respect of Steiner AG (''SAG''), Switzerland, (including its subsidiaries, joint ventures and associates), a material step down wholly owned subsidiary of the Company. This scheme which is approved by the Court based on recommendation of administrator covers a) Divestment of entire shareholding of SAG held by HCC Mauritius Investment Limited and HCC Mauritius Enterprises Limited, (collectively, ''HMILEL), the wholly owned subsidiaries of the Company to Uniresolv SA, an affiliate of m3 Geneva (''Uniresolv SA) and, b) Divestment of entire shareholding of Steiner Development AG (''SDAG'') by SAG to m3 Steiner Development SA, an affiliate of m3 Geneva (''m3SD'') c) Divestment of Steiner India Limited (''SIL), by SAG to Uniresolv SA, d) Asset transfer (receivables) to SAG''s wholly owned subsidiary, Steiner Eagle AG (''SEAG'') and the immediate subsequent sale of SEAG to Uniresolv SA. Further, pursuant to the aforesaid Court Order, HMILEL has acquired the entire equity shareholding in SEAG from Uniresolv SA, against a swap of SAG shares and deferred payment of 5 million CHF Accordingly, SAG along with its subsidiaries, joint ventures and associates ceased to be part of the Company and SEAG became direct subsidiary of HMILEL w.e.f. December 20, 2024. Further, pending transfer of shares of SIL by Uniresolv SA to HMILEL, SIL is not related party as on March 31, 2025.

374 During the current year, pursuant to Scheme of Amalgamation, the National Company Law Tribunal, Mumbai has approved the merger of Raiganj-Dalkhola Highways Limited (RDHL), a step-down subsidiary of the Company with HCC Infrastructure Company Limited (HICL), a subsidiary of the Company with the appointed date as January 1, 2024. As a result RDHL is ceased to be step-down subsidiary of the Company w.e.f. February 14, 2025 and merged with the HICL, a subsidiary of the Company.

375 Pursuant to the Share Purchase Agreement dated March 31 2024, HREL Real Estate Limited alongwith its subsidiaries i.e. Nashik Township Developers Limited, Powai Real Estate Developers Limited, HCC Aviation LImited and HCC Reality Limited have ceased to be subsidiaries of Hindustan Construction Company Limited (w.e.f. March 31,2024). Further, during the previous year, the Company has entered into a Share Purchase Agreement (''SPA'') with HREL Real Estate Limited (''HREL) for acquisition of HRL Thane Real Estate Limited (''HRL Thane''), wholly owned subsidiary of HREL. Pursuant to the SPA, HRL Thane has become a direct subsidiary of the Company.

376 During the previous year, Prolific Resolution Private Limited (''PRPL) issued 52,040 equity shares to Jadeja Investments Management Private Limited (''JIPL) on preferential basis for a consideration of ''25 crore. Pursuant to aforementioned issue of equity shares, JIPL holds 51% of equity share capital of PRPL. Consequently, w.e.f. September 30, 2023, PRPL ceases to be a subsidiary of the Company and based on the terms of the Investment Agreement and Service Agreement, JIPL and HCC have joint control over the relevant activities of PRPL.

NOTE 38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk includes loans and borrowings.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s total debt obligations with floating interest rates.

The Company''s total debt obligation with floating interest rate as on March 31, 2025 is ''52.87 crore (March 31, 2024; ''63.38 crore)

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit/ (loss) before tax is affected through the impact on floating rate borrowings, as follows:

b) Foreign currency risk

Although, the exchange rate between the rupee and foreign currencies has changed in recent years, it has not materially affected the results of the Company. The Company evaluates exchange rate exposure arising from foreign currency transaction and follows established risk management policies.

c) Equity price risk

The Company''s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors review and approve all equity investment decisions.

Exposure to:

i) unlisted equity securities at fair value through other comprehensive income is ''25.47 crore (March 31, 2024:

''33.38 crore).

ii) unlisted equity in subsidiaries at cost of ''1,588.65 crore (March 31, 2024: ''1,594.15 crore).

Exposure to listed equity securities at fair value:

As at March 31,2025, the exposure to listed equity securities at fair value is ''5.60 crore (March 31, 2024: ''4.53 crore).

A movement (decrease /increase) of 10% in the value of listed securities could have an impact of approximately ''0.56 crore (March 31, 2024: ''0.45 crore) on the Other Comprehensive Income.

ii Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, financial assets. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

Expected credit loss

In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.

b) Financial assets other than trade receivables

Financial assets other than trade receivables mainly comprise of cash and cash equivalents, bank balances other than cash and cash equivalents, loan to subsidiaries and other financial assets. The Company monitors the credit exposure on these financial assets on a case-to-case basis. Loans to subsidiaries are assessed for credit risk based on the underlying valuation of the entity and their ability to repay within the contractual repayment terms. Cash and cash equivalents and bank balances other than cash and cash equivalents are held with bank and financial institutions with good credit rating. Based on the Company''s historical experience, the credit risk on other financial assets is also extremely low.

iii Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

NOTE 39 CAPITAL MANAGEMENT

The primary objective of the Company''s capital management is to maximise the shareholder''s wealth. The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the level of dividend to shareholders.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a debt equity ratio, which is total debt divided by total capital.

Note 39.2 In the long run, the Company''s strategy is to maintain the gearing ratio of less than 1. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.

NOTE 40 LEASES - IND AS 116

a) Right-of-use Assets:

The net carrying value of right-of-use assets as at March 31, 2025 amounts to Nil (March 31, 2024:Nil). (Refer Note 3B).

b) Lease liabilities:

(i) As at March 31,2025, the obligations under finance leases amounts to Nil (March 31, 2024:Nil), which have been disclosed as lease liabilities on the face of the balance sheet.

NOTE 42 DISCLOSURES REQUIRED PURSUANT TO IND AS 102 SHARE BASED PAYMENT

The Company has granted stock options under the HCC Employees Stock Option Scheme (''ESOS''). These options would vest based on the vesting conditions as per letter of grant executed between the Company and its employees. Each option when exercised would be converted into one fully paid up equity share of ''1 each of the Company. The relevant details of the scheme, grant and activity under ESOS are summarised below:

NOTE 43 OTHER STATUTORY INFORMATION

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company & its joint operations for holding any Benami property.

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

c) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

g) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

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

i) The Company has not entered into any scheme of arrangement which has an accounting impact on the standalone financial statements for the current or previous year.

NOTE 44: DETAILS OF LOAN GIVEN TO ULTIMATE BENEFICIARY THROUGH FUNDING PARTY

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, except the below transaction during the previous year ended March 31, 2024 :

Note 44.1 The Company has compiled with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act, 2013, for above transactions and are not in violation of the Prevention of Money-Laundering Act, 2002 (15 of 2003).

Note 45 The Company is principally engaged in a single business segment viz. "Engineering and Construction" Also, refer note 38 (ii) b for information on revenue from major customers.

Note 46 Figures for the previous year have been regrouped/rearranged, wherever considered necessary, to confirm to current period''s classification. The impact of such reclassification/ regrouping is not material to the standalone financial statements.

This is a summary of material accounting policies and other explanatory information referred to in our audit report of even date

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Mar 31, 2024

xxxi) Provisions, contingent liabilities, contingent assets and commitments

A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management''s estimate required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably.

Contingent assets are disclosed where an inflow of economic benefits is probable.

Commitments are future liabilities for contractual expenditure, classified and disclosed as estimated amount of contracts remaining to be executed on capital account and not provided for.

xxxii) Share based payments

Share based compensated benefits are provided to certain grades of employees in consideration of the services rendered. Under the equity settled share based payment, the fair value on the grant date of the instrument given to employees is recognised as ''employee benefits expenses'' with a corresponding increase in equity over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. The fair value of the options at the grant date is calculated by an independent valuer basis Black Scholes model. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as share premium.

xxxiii) Exceptional items

When items of income and expense within statement of profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.

xxxiv) RECENT ACCOUNTING PRONOUNCEMENTS

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March, 2024, MCA amended

the Companies (Indian Accounting standards) Amendment Rules, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2023. The Company does not expect any significant impact of the amendment on its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

This amendment has introduced a definition of ''accounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption or this amendment is annual periods beginning on or after 1 April 2023. The Company does not expect any significant impact of the amendment on its financial statements.

Ind AS 109 - Financial Instruments

The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. These fees include only those paid or received between the borrower and the lender, including fees paid or received by either the borrower or lender on the other''s behalf.

In accordance with the transitional provisions, the Company applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in which the entity first applies the amendment (the date of initial application). The Company does not expect any significant impact of the amendment on its financial statements.

Ind AS 12 - Income Taxes

This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2023. The Company does not expect any significant impact of the amendment on its financial statements.

Nature and purpose of reserves

i. Capital reserve

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own equity instruments to capital reserve.

ii. Forfeited debentures account

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own debentures to forfeited debentures account.

iii. Securities premium

Securities premium is used to record the premium received on issue of shares. This account is utilised in accordance with the provisions of the Companies Act, 2013.

iv. Debenture redemption reserve

The Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of the debentures issued, either by a public issue or a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures. Consequent to the amendment in the provision of Act, requirement to create reserve in respect of certain debenture have been withdrawn.

v. General reserve

Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn.

vi. Share option outstanding account

The share option outstanding reserve represents reserve in respect of equity settled share options granted to the Company''s employees in pursuance of the Employee Stock Option Plans.

vii. Retained earnings

Retained earnings represents the profits/ losses that the Company has earned/ incurred till date including gain/ (loss) on remeasurement of defined benefits plans as adjusted for distirbutions to owners, transfer to other reserves, etc.

viii. Equity instruments at fair value through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity securities are disposed off.

NOTE 18 BORROWINGS....Contd.

(b) Non-Convertible Debentures - LIC

These NCDs carry an interest yield of 11.50% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 7 structured annual instalments commencing 31 March 2023 and ending on 31 March 2029. Refer note 18.1.2 for security details.

(c) Non Convertible Debentures - Karnataka Bank

These debentures are issued to one of the lender of erstwhile subsidiary, which carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable on 31 March 2026 and are secured by exclusive charge upto 0.19% on specific claims of the Company.

(d) Non Convertible Debentures - ACRE

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 2 structured instalments on 31 March 2026 and 30 June 2029 and are secured by exclusive charge upto 49.53% on specific claims of the Company.

(e) Foreign Currency Term Loan (''FCTL'')

During the previous year, the Company has implemented debt resolution plan pursuant to which the FCTL has been restructured and is payable in 7 structured annual instalments commencing from 31 March 2023. The FCTL carries a floating interest rate equal to 3 Month SOFR plus 350 basis point. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation.

Note 18.1.1: Optionally Convertible Debentures (OCDs) are secured in the form of:

1. First ranking pari-passu charge on all of the Company''s Property, plant and equipment (immovable and movable) [excluding the Specified Assets and Excluded Assets]; and

2. Second ranking and pari-passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties as specified in the mortgage deed. The security perfection has been completed on the OCD facilities issued as part of the S4A scheme.

Note 18.1.2: Non-Convertible Debentures - LIC

1. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

2. All the present and future current assets of the Borrower (other than those forming part of Additional Assets'') as the Third Mortgaged Properties.

3. All of the Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Master Restructuring Agreement (MRA).

The above security having ranking in respect to LIC -NCD are as below:

1. A first ranking and pari-passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari-passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with lenders for LIC-NCD and OCD

1. HREL Real Estate Limited, an erstwhile subsidiary, has provided Corporate guarantee for the above outstanding facilities of the Company.

2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. First pari-passu charge over Prolific Shares of 50,000 of HCC Holding

4. Personal guarantee of Chairman and Non-Executive Director of the Company.

II. Unsecured

(A) Non Convertible Debentures - ARCIL

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable in 7 structured annual instalments commencing 31 March 2023 and ending on 31 March 2029. The Company has paid its March 2023 and March 2024 instalment on time.

(B) Non Convertible Debentures - Others

These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. and are repayable in 3 structured instalments commencing on 30 June 2029 and ending on 30 June 2031.

(C) Foreign Currency Term Loan from Bank

During the earlier years, the Company has entered into an amendment agreement with the lender wherein the parties have agreed to restructure the outstanding amounts for USD 6.89 Million with fixed interest rate of 1.91% compounded annually, repayable in 3 structured instalments commencing from 31 December 2028 and ending on 31 December 2030.

(D) Loan from related parties

Loans from Western Securities Limited carried an interest rate of 12.50% p.a. (31 March 2023: 12.50% p.a.) which were repayable on demand. This loan has been repaid during the current year.

Loan from Steiner India Limited is interest free and is repayable in 365 days.

(E) Other bank loan

Overdraft facility availed by HCC-HDC a joint operations carries interest rate of 8.71% p.a. (31 March 2023: 8.71%) are repayable on demand.

Note 18.2 : Right to Recompense:

In accordance with the provisions of Master Restructuring Agreement (MRA) dated 29 June 2012 executed between the Company and its lenders, as amended from time to time and pursuant to deliberations between the parties, lenders have agreed for the recompense amount to be settled by the Company in the form of equity shares to be issued at a future date, which is irter-alia dependent upon various factors including improved financial performance of the Company and other conditions, and which would be restricted to a maximum of 2.87% of equity share capital of the Company on the date of issue of such equity shares. This is valid as on balance sheet date under MRA dated 20 July 2022.

(a) Disaggregation of revenue

Company''s entire business falls under one operational segment of ''Engineering and Construction''. Contract revenue represents revenue from Engineering and Construction contracts wherein the performance obligation is satisfied over a period of time. Further, the management believes that the nature, amount, timing and uncertainty of revenue and cash flows from all its contracts are similar. Accordingly, disclosure of revenue recognised from contracts disaggregated into categories has not been made.

(b) Unsatisfied performance obligations

The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is '' 10,475 crore (31 March 2023: '' 14,772 crore). Most of Company''s contracts have a life cycle of three to five years. Management expects that around 40%- 50% of the transaction price allocated to unsatisfied contracts as of 31 March 2024 will be recognised as revenue during next reporting period depending upon the progress on each contracts. The remaining amounts are expected to be recognised over the next two years. The amount disclosed above does not include variable consideration.

Note 30.1 : During the previous year, the Company successfully novated specified debt of lenders aggregating '' 2,855.69 crore to Prolific Resolution Private Limited (''PRPL), a wholly owned subsidiary upto 30 September 2023 and joint venture thereafter, with the consideration being the assignment of beneficial interest in the specified arbitration awards and claims with a carrying value of '' 2,894.11 crore in favor of PRPL. The Company continues to furnish Corporate Guarantees in favor of the PRPLs lenders for debt novated. Further, the revision in terms of facilities with respect to repayment terms, rate of interest and waiver of penal interest by lenders resulted in a gain of '' 223.30 crore.

Note 30.2 : During the current year, the Company sold a land parcel situated in Village Karnala (Tara), Panvel, Maharashtra along with the structures standing thereon for a consideration of '' 95 crore. The resultant gain of '' 8793 crore has been presented as an exceptional item.

Note 30.3 : During the current year, the Company has entered into a Share Purchase Agreement (''SPA'') with HREL Real Estate Limited (''HREL) for acquisition of HRL Thane Real Estate Limited (''HRL Thane''), a wholly owned subsidiary of HREL. Pursuant to the SPA, HRL Thane has become a direct subsidiary of the Company.

Further, HREL has assigned certain inter corporate deposits (''ICD'') receivable from HRL Thane in favor of HCC. As per the terms of the agreement between the parties, the considerations in respect of the above have been adjusted against the Company''s receivable from HREL, which were written off in the earlier years. The effect of these transactions has resulted in a net gain of '' 80.63 crore, which has been presented as an exceptional item.

II Provident fund

In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee.

In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

NOTE 37 FAIR VALUE

The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.

(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

NOTE 39 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk includes loans and borrowings.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s total debt obligations with floating interest rates.

NOTE 39 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES....Contd.

Considering the Company''s total debt obligation with floating interest rate as at 31 March 2024 is '' 63.38 crore

(31 March 2023: '' 70.60 crore), the impact on Statement of Profit and Loss due to fluctuation in exchange rates would be

immaterial. Therefore the disclosure for sensibility analysis has not been included.

b) Foreign currency risk

Although, the exchange rate between the rupee and foreign currencies has changed in recent years, it has not materially affected the results of the Company. The Company evaluates exchange rate exposure arising from foreign currency transaction and follows established risk management policies.

Foreign currency risk from financial instruments

Sensitivity analysis

Considering the Company''s exposure of foreign currency financial instruments as at respective reporting dates'' the impact on Statement of Profit and Loss due to fluctuation in exchange rates would be immaterial. Therefore, the disclosure for sensitivity analysis not been included in the standalone financial statements.

c) Equity price risk

The Company''s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors review and approve all equity investment decisions.

Exposure to:

i) unlisted equity securities at fair value through other comprehensive income is '' 33.38 crore (31 March 2023:

'' 13.65 crore).

ii) unlisted equity in subsidiaries at cost of '' 1,594.15 crore (31 March 2023: '' 1,573.50 crore).

Exposure to listed equity securities at fair value:

As at 31 March 2024, the exposure to listed equity securities at fair value is '' 4.53 crore (31 March 2023: '' 4.82 crore). Changes in this exposure would not have a material effect on the profit and loss of the Company.

ii Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, financial assets. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

a) Trade receivables (gross of provision)

Trade receivables are typically unsecured and are derived from revenue earned from two main classes of trade receivables i.e. receivables from Government promoted agencies and receivables from private third parties. A substantial portion of the Group''s trade receivables are from Government promoted agencies having strong credit worthiness. For ageing analysis of the trade receivable, refer note 6. .

The primary objective of the Company''s capital management is to maximise the shareholder''s wealth. The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the level of dividend to shareholders.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a debt equity ratio, which is total debt divided by total capital.

a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

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

c) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the

statutory period.

d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

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

(Intermediaries) with the understanding that the Intermediary shall:

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

ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

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

g) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

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

i) The Company has not entered into any scheme of arrangement which has an accounting impact on the standalone financial statements for the current or previous year.

NOTE 45 DETAILS OF LOAN GIVEN TO ULTIMATE BENEFICIARY THROUGH FUNDING PARTY

The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, except the below transaction:

The Ministry of Corporate Affairs (MCA) vide notification dated 24 March 2021 has issued the "Companies (Audit and Auditors) Amendment Rules, 2021. As per proviso to Rule 3(1), applicable for financial years commencing on or after the 1 April, 2022, every company which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

As required under above rules, the Company has used SAP application as accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all transactions recorded and the audit trail feature has not been tampered with.

The audit trail feature at database level was enabled subsequent to balance sheet date. However, the Company believes that no instances of changes in database found as the Company has all other necessary controls in place which are operating effectively

NOTE 47 The Company is principally engaged in a single business segment viz. "Engineering and Construction" Also, refer note 39 (ii) b for information on revenue from major customers.

NOTE 48 Figures for the previous year have been regrouped/ rearranged, wherever considered necessary, to confirm to current period''s classification. The impact of such reclassification/ regrouping is not material to the standalone financial statements.

For Walker Chandiok & Co LLP For and on behalf of the Board of Directors

Chartered Accountants

Firm Registration No. 001076N/ N500013 Ajit Gulabchand DIN : 00010827 Chairman

Arjun Dhawan DIN : 01778379 Executive Vice Chairman

Jaspreet Bhullar DIN : 03644691 Managing Director & Chief Executive Officer

Mahendra Singh Mehta DIN : 00019566 Director

Girish Gangal Chief Financial Officer

Shashi Tadwalkar Nitesh Jha FCS No. 8436 Company Secretary

Partner

Membership No.: 101797

Place: Mumbai Place: Mumbai

Date : 24 May 2024 Date : 24 May 2024

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Mar 31, 2023

Note 5.2 The Company has given a ''Non Disposal Undertaking'' to the lenders of Highbar Technologies Limited to the extent of 3,074,940 (31 March 2022: 3,074,940) equity shares.

Note 5.3 The Company has given an undertaking to National Highways Authority of India (''NHAI'') that it will not transfer its shareholding in Raiganj-Dalkhola Highways Limited till the commercial operation date. The Company has entered into sale agreement with HICL to sell these shares at book value at future dates. Consequently, in respect of RDHL, the Company has received full consideration of '' 3.00 crore (31 March 2022: '' 3.00 crore) from HICL for transfer of the shares at book value, subject to necessary approvals and consents to the extent required. (Refer note 22)

NOTE 5A.1 : The National Company Law Tribunal, Mumbai (NCLT) vide Order dated 30 August 2018, admitted an application filed against Lavasa Corporation Limited (''LCL) by an operational creditor and initiated the Corporate insolvency Resolution Process (''CIRP'') under the insolvency and Bankruptcy Code 2016 (''IBC''). In accordance with the provisions of IBC, the powers of the Board of Directors of LCL have been suspended and the management of LCL presently vests with the Resolution Professional (''RP'') appointed under the provisions of IBC. HREL Real Estate Limited (''HREL), a wholly owned subsidiary of the Company, presently holds 68.70% equity stake in LCL. In view of uncertainties associated with the outcome of CIRP and as a matter of prudence, the Company impaired its investment in both these entities during the year ended 31 March 2019. Since the Company has lost control over LCL, it ceases to be a subsidiary under Ind AS. However, LCL continues to be a subsidiary under the Act.

Note 6.1 Non-current trade receivables and current trade receivables as at 31 March 2023 includes '' 62196 crore (31 March 2022:

'' 18759 crore) and '' 452.13 crore (31 March 2022: '' 2,770.14 crore) respectively, representing claims awarded in arbitration in favour of the Company and which have been challenged by the customers in courts. Out of the above, net arbitration award as at 31 March 2022 amounting to '' 2,283.06 crore was reclassified as assets of a disposal group held for sale, which has been derecognised during the current year (Refer note 15.3 and 31).

Note 6.2 There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms or private companies in which any director is a partner, a director or a member.

Note 6.3 Trade receivables (other than receivables on account of claims awarded in arbitration in favour of the Company) are noninterest bearing and are generally on terms of 30 to 90 days except retention deposits, which are due after completion of the defect liability period of the respective projects.

Note 9.1 As at 31 March 2023, the Company has recognised net deferred tax assets amounting to '' 74193 crore (31 March 2022: '' 741.74 crore), which includes deferred tax assets on carried forward unused tax losses, unused tax credits and other taxable temporary differences. The Company is confident of generating taxable profits from the unexecuted orders on hand/ future projects and expected realisation of claims/ arbitration awards. Accordingly, the management believes it is probable that sufficient future taxable profits will be available against which such deferred tax assets can be utilised.

Note 9.2 In the absence of convinving evidence of future taxable profits against which unused tax losses can be utilised, the Company has not recognised deferred tax assets in respect of below mentioned temporary differences.

Note 15.1 : During the current year, the Company has entered into an agreement to sell a freehold land situated at village Karnala (Tara) for an aggregate consideration of '' 95 crore. Pursuant to the agreement, the Company has received an advance of '' 5 crore, which has been presented under other current liabilities. The above sale is subject to approval from lenders of the Company. The Company expects the sale to be completed by 30 September 2023.

Note 15.2 : During the earlier years, the Company had entered into an agreement with a subsidiary company to develop a parcel of freehold land situated at Vikhroli, Mumbai pursuant to which an advance of '' 20.20 crore was received. However, as at 31 March 2022, considering the market conditions, the Company did not foresee to complete the transaction and therefore the sale no longer classified as ''highly probable'' in accordance with Ind AS 105 - Non-current Assets Held for Sale and Discontinued Operations. Accordingly, the same was re-classified as "Property, plant and equipment.

Note 15.3 : As detailed in note 31.1, pursuant to implementation of the resolution plan in the current year, assets representing specified arbitration awards and claims and liabilities representing specified debt and accrued interest /charges have been derecognised effective 1 July 2022.

As at 31 March 2022, the resolution plan with lenders had become binding due to receipt of requisite majority approvals. In accordance with Ind AS 105- Non-current Assets Held for Sale and Discontinued Operations, the assets (represented by arbitration award and claims) and liabilities (represented by debt and accrued interest / charges) qualified as assets and liabilities of a disposal group held for sale. Consequently, as at 31 March 2022, trade receivables and unbilled work-in-progress (contract assets) was classified as assets of a disposal group held for sale. Similarly, as at 31 March 2022, current borrowings, trade payables and other current financial liabilities was classified as liabilities of a disposal group held for sale.

b. Terms/ rights attached to equity shares:

The Company has only one class of equity shares having a par value of '' 1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend, if any.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of reserves

i. Capital reserve

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own equity instruments to capital reserve.

ii. Forfeited debentures account

The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own debentures to forfeited debentures account.

iii. Securities premium

Securities premium is used to record the premium received on issue of shares. This account is utilised in accordance with the provisions of the Companies Act, 2013.

iv. Debenture redemption reserve

The Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of the debentures issued, either by a public issue or a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures. Consequent to the amendment in the provision of Act, requirement to create reserve in respect of certain debenture have been withdrawn.

v. Foreign currency monetary translation reserve

Exchange difference arising on translation of the long term monetary item is accumulated in separate reserve within equity. The cumulative amount is reclassified to the Statement of Profit and Loss over the life of the monetary asset/ liability on a straight line basis.

vi. General reserve

Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn.

vii. Share option outstanding account

The share option outstanding reserve represents reserve in respect of equity settled share options granted to the Company''s employees in pursuance of the Employee Stock Option Plans.

viii. Retained earnings

Retained earnings represents the profits/ losses that the Company has earned/ incurred till date including gain/ (loss) on remeasurement of defined benefits plans as adjusted for distributions to owners, transfer to other reserves, etc.

ix. Equity instruments at fair value through other comprehensive income

The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity securities are disposed off.

18.1 Details of security and terms of repayment

I. Secured

(a) Optionally Convertible Debentures (OCDs)

OCDs have been issued to the lenders as part of the S4A Scheme with a tenor of 10 years and a coupon of 0.01% with an interest yield of 11.50% p.a. in yield equalization compounded on a quarterly basis. After the expiry of eighteen months from the issuance, the OCDs were to be converted into non-convertible debentures in case of non-occurrence of event of default as per the guidelines of the S4A Scheme. Pursuant to the exemption provided by the Securities and Exchange Board of India (''SEBI'') from the application of Regulation 75 of SEBI ICDR regulations to the Company, the tenure of OCDs has been extended for a further 2.5 years beyond the statutorily prescribed period of 18 months. The lenders have an option to convert the OCDs into equity shares of the Company, in accordance with the terms thereof including in case of any event of default or default in payment during the 10 years from the date of issuance of respective OCDs. However, further lenders have extended the repayment period till 31 March 2029. The repayment tenure has been approved by SEBI. Accordingly, The revised repayment of the OCD commenced from 31 March 2023. Details of principal maturity have been provided below. Also refer note 18.1.1 for security details.

(b) Foreign Currency Term Loan from others (''FCTL'')

The FCTL carried a floating interest rate equal to 3 month LIBOR plus 350 basis points and were repayable in 3 quarterly instalments commencing from 31 December 2019.

During the current year, the Company implemented debt resolution plan pursuant to which the same has been restructures and are payable in 7 structured annual instalments commencing from 31 March 2023. The FCTL carries a floating interest rate equal to LIBOR plus 350 basis points. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation.

(c) Non-Convertible Debentures - LIC

These debentures were classified as RTL-1 and RTL -A as on 31 March 2022. These debentures carried an interest yield of 11.50% p.a. and were repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021.

During the current year, the Company implemented its debt resolution plan with lenders pursuant to which principal outstanding of RTL-1 as at 1 July 2022 have been settled by issuing fresh NCDs. These NCDs carry an interest yield of 11.50% p.a. quarterly compounding and a coupon of 0.01% p.a. and are repayable in 7 structured annual instalments commencing 31 March 2023 and ending on 31 March 2029. Refer note 18.1.2 for security details.

(d) Non Convertible Debentures - Karnataka Bank

These debentures are issued to one of the lender of erstwhile subsidiary, which carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable on 31 March 2026. These NCDs are secured by exclusive charge upto 0.19% on specific claims of the Company.

(e) Non Convertible Debentures - ACRE

These debentures have been issued during the current year. These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 2 structured instalments on 31 March 2026 and 30 June 2029. These NCDs are secured by exclusive charge upto 49.53% on specific claims of the Company.

(f) Rupee Term Loans (RTL-A)

RTLA carried an interest rate of 11.75% p.a., payable monthly, to be reset annually with a two years moratorium and repayment terms of five years commencing 25 May 2017 During the current year, the Company implemented debt resolution plan pursuant to which the same have been transferred to SPV Refer note 18.1.3 for security details.

(g) Rupee Term Loans 1 (RTL-1) and Rupee Term Loans 2 (RTL-2)

RTL- 1 and RTL- 2 carried an interest yield of 11.50% p.a. and are repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. During the current year, the Company implemented debt resolution plan pursuant to which the same have been transferred to SPV Refer note 18.1.3 for security details.

(h) Working Capital Term Loan (WCTL-2)

Working Capital Term Loan (WCTL-2) carried an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These were repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. During the current year, the Company implemented debt resolution plan pursuant to which the same have been transferred to SPV Refer note 18.1.3 for security details.

(i) Cash credit facilities

Cash credit facilities carried a floating interest rate equal to 6 month ICICI MCLR plus 285 basis points and were repayable on demand.

During the current year, the Company implemented debt resolution plan pursuant to which the same have been transferred to SPV Refer note 18.1.4 for security details.

(j) Working capital loan

Working Capital Loans carried a floating interest rate equal to 6 month ICICI MCLR plus 285 basis points.

During the current year, the Company implemented debt resolution plan pursuant to which the same have been transferred to SPV Refer note 18.1.4 for security details.

Note 18.1.1: Optionally Convertible Debentures (OCDs) are secured in the form of:

1. First ranking pari-passu charge on all of the Company''s Property, plant and equipment (immovable and movable) [excluding the Specified Assets and Excluded Assets]; and

2. Second ranking and pari-passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties as specified in the mortgage deed. The security perfection has been completed on the OCD facilities issued as part of the S4A scheme.

Note 18.1.2: Non-Convertible Debentures - LIC

1. The parcel of land (immovable non-residential property) admeasuring 21.9 hectare at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All the present and future current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

4. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Master Restructuring Agreement

(MRA).

The above security having ranking in respect to LIC -NCD are as below:

1 A first ranking and pari-passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari-passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with lenders for LIC-NCD and OCD

1 HREL Real Estate Limited has provided Corporate guarantee for the above outstanding facilities of the Company.

2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. First Pari-passu charge over Prolific Shares of 50,000 of HCC Holding

4. Personal guarantee of Chairman and Non-Executive Director of the Company.

Note 18.1.3: RTL-A, RTL-1, RTL-2 and WCTL-2 are secured in the form of:

1. The parcel of land (immovable non-residential property) admeasuring 21.9 hectare at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All the present and future current assets of the Borrower (other than those forming part of Additional Assets'') as the Third Mortgaged Properties.

4. All of the Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

5. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Master Restructuring Agreement

(MRA).

The above security having ranking in respect to RTL1 and RTL-A are as below:

1. A first ranking and pari-passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari-passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

The above security having ranking in respect to RTL2 and WCTL2 are as below:

A second ranking and pari-passu security interest by way of legal mortgage over all the Mortgaged Properties.

Collateral security pari-passu with lenders defined in MRA:

1. HREL Real Estate Limited has provided Corporate guarantee for the above outstanding facilities of the Company.

2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. First pari-passu charge over Prolific Shares of 50,000 of HCC Holding

4. Personal guarantee of Chairman and Non-Executive Director of the Company.

Note 18.1.4: Security and terms for Cash Credit Facilities and Other Working Capital Demand Loan:

1. The parcel of land (immovable non-residential property) admeasuring 21.9 hectare at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All the present and future current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

4. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

5. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A first ranking and pari-passu security interest by way of legal mortgage over the Third and Fourth Mortgaged Properties.

2. In the form of a second ranking and pari-passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties.

Collateral security pari-passu with lenders defined in MRA are same as indicated in note 171.1.

The securities towards working capital facilities also extend to guarantees given by the banks on behalf of the Company.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the MRA.

II. Unsecured

(A) Foreign Currency Term Loan from Bank

During the previous year, the Company has entered into an amendment agreement with the lender wherein the parties have agreed to restructure the outstanding amounts for USD 6.89 Million with fixed interest rate of 1.91% compounded annually, repayable in 3 structured instalments commencing from 31 December 2028 and ending on 31 December 2030.

(B) Non Convertible Debentures - ARCIL

These debentures have been issued during the current year. These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable in 7 structured annual instalments commencing 31 March 2023 and ending on 31 March 2029.

(C) Non Convertible Debentures - Others

These debentures are classified as NCDs and carry an interest yield of 9.5% p.a. quarterly compounding and a coupon of 0.01% p.a. and are repayable in 3 structured instalments on 30 June 2029 and on 30 June 2031.

(D) Loan from related parties

Loans from related parties carry an interest rate of 12.50% p.a. (31 March 2022: 12.50% p.a.) which are repayable on demand.

Note 18.2 Right to Recompense:

In accordance with the provisions of Master Restructuring Agreement (MRA) dated 29 June 2012 executed between the Company and its lenders, as amended from time to time and pursuant to deliberations between the parties, lenders have agreed for the recompense amount to be settled by the Company in the form of equity shares to be issued at a future date, which is inter-alia dependent upon various factors including improved financial performance of the Company and other conditions, and which would be restricted to a maximum of 2.87% of equity share capital of the Company on the date of issue of such equity shares.

Note 19.1 Liability towards invocation of put options and corporate guarantees by lenders of Lavasa Corporation Limited (''LCL'')

In view of the invocation of put options by lenders of LCL and pursuant to sanction letters entered with lenders of LCL during earlier years, LCL liabilities aggregating '' 865.23 crore were taken over by the Company at '' 515 crore. As per the sanction letters, these liabilities carried an interest of 9.50% p.a. compounded quarterly with effect from 1 October 2018. Further, certain lenders of LCL had invoked corporate guarantees of the Company during earlier years and consequently, liabilities of '' 232.20 crore were recognised by the Company.

Pursuant to default in the terms of the sanction letter, in earlier years, one of the lender issued a letter to the Company for revocation of the settlement. Based on the negotiations and discussion by the management, the lender had agreed to continuing with similar settlement terms in the restructuring plan. Pending the final approvals, the differential between the liability pursuant to the put option agreement and the liability as per sanction letter was reported as Contingent Liability in the financial statements until period ended 31 March 2022.

During the current year, pursuant to implementation of debt resolution plan as detailed in note 31, the aforementioned liabilities have been extinguished by issuance of 7226 NCD of face value of '' 10,00,000 each to the lenders of LCL. Refer note 18.1 for details of security and terms of repayment.

Note: 19.2 Includes '' 353.60 crore (31 March 2022: '' 178.56 crore) and '' 13.04 crore (31 March 2022: '' 204.62 crore) in respect of non-current interest accrued but not due and current interest accrued but not due respectively, towards financial liabilities of LCL assumed as mentioned in note 19.1 above.

Disclosure in accordance with Ind AS 115 - Revenue from Contracts with Customers

(a) Disaggregation of revenue

Company''s entire business falls under one operational segment of ''Engineering and Construction''. Contract revenue represents revenue from Engineering and Construction contracts wherein the performance obligation is satisfied over a period of time. Further, the management believes that the nature, amount, timing and uncertainty of revenue and cash flows from all its contracts are similar. Accordingly, disclosure of revenue recognised from contracts disaggregated into categories has not been made.

(b) Unsatisfied performance obligations

The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is '' 14,772 crore (31 March 2022: '' 15,967 crore). Most of Company''s contracts have a life cycle of three to five years. Management expects that around 25%- 30% of the transaction price allocated to unsatisfied contracts as of 31 March 2023 will be recognised as revenue during next reporting period depending upon the progress on each contracts. The remaining amounts are expected to be recognised over the next three to four years. The amount disclosed above does not include variable consideration.

(ii) Revenue recognised during the year from opening balance of contract liability (i.e. due to customers) amounts to '' 111.93 crore (31 March 2022: '' 82.01 crore)

(iii) Revenue recognised during the year from the performance obligation satisfied upto previous year amounts to '' 61.58 crore (31 March 2022: '' 479.01 crore)

(d) Out of the total revenue recognised during the year, '' 5,172.74 crore (31 March 2022: '' 4,659.95 crore) is recognised over a period of time and '' 49.27 crore (31 March 2022: '' 6.33 crore) is recognised at a point in time.

(e) There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.

(f) Cost to obtain or fulfil the contract:

i. Amount of amortisation recognised in Statement of Profit and Loss during the year : Nil

ii. Amount recognised as contract assets as at 31 March 2023 : Nil

Note 27.1 On 29 September 2022, the Company has obtained approval from shareholders by way of a special resolution in the Annual General Meeting for payment of managerial remuneration to Whole Time Directors (''WTDs'') aggregating '' 10.50 crore for the financial year ending 31 March 2023. Consequent to the successful implementation of the resolution plan by the Company effective 26 September 2022, the Company was no longer required to obtain the prior approval from lenders.

Further, the managerial remuneration to WTDs for the period 1 April 2019 to 31 March 2022 aggregating '' 41.65 crore was accrued, of which '' 6.41 crore was paid, for which the approval from shareholders were obtained but the requisite approval from lenders were awaited. In the absence of the specific approval from lenders, the Company has decided to reverse / adjust the aforementioned managerial remuneration from WTDs. However, in view of the successful implementation of the resolution plan with lenders, the Company has also decided to make payment of a consolidated amount in lieu of the remuneration (accrued, but not paid) to WTDs for the period 01 April 2019 to 31 March 2022 and shareholders approval in the Annual General Meeting held on 29 September 2022 by way of a special resolution has been obtained by the Company.

The aforementioned payments are in accordance with section 197 of the Act and no further approvals are required to be obtained by the Company.

Note 31.1 During the current year, the Company has successfully implemented its debt resolution plan in relation to its Facilities,

Guarantees and Put Obligations in accordance with the Reserve Bank of India (Prudential Framework for Resolution of Stressed

Assets) Directions, 2019 dated 7 June 2019 and pursuant to the approval granted by the Members in their Extra-Ordinary General

Meetings held on 29 June 2021 and 23 March 2022. The key highlights of the Debt Resolution Plan are as follows:

a) Effective 1 July 2022, the Company has novated specified debt of lenders aggregating '' 2,855.69 crore to Prolific Resolution Private Limited (''PRPL), a wholly owned subsidiary of the Company, with the consideration being the assignment of beneficial interest in the specified arbitration awards and claims of '' 6,508.44 crore with a carrying value of '' 2,894.11 crore in favor of PRPL;

b) PRPL has issued and allotted 28,544 non-convertible debentures (''NCD'') having a face value of '' 1,000,000 each at par aggregating '' 2,854.40 crore, for consideration other than cash representing the debt novated to PRPL by the Company and thi balance amounting to '' 1.29 crore has been paid upfront to the lenders;

c) The Company has also furnished Corporate Guarantees in favor of the PRPLs lenders for debt novated to PRPL as well as pledge of shares held by the Company in PRPL to secure the above NCD''s;

d) The specified terms of facilities have been revised with respect to the repayment terms, rates of interest and waiver of penal interest by lenders, including lenders of Lavasa Corporation Limited (''LCL), an erstwhile subsidiary of the Company, whose liabilities were taken over in earlier years by the Company pursuant to exercise/ invocation of Put options and Corporate Guarantees issued by the Company to LCL lenders. The liability towards LCL lenders has been extinguished by issuance of NCD; and

e) Upon the repayment of PRPLs liabilities, the beneficial interest of the PRPLs assets yet to be recovered or outstanding shall be assigned/ transferred and distributed between HCC and lenders of PRPL as per agreed terms and conditions.

Consequent to the above, assets and liabilities of a disposal group held for sale aggregating '' 2,894.11 crore and '' 2,855.69 crore, respectively, have been derecognised effective 1 July 2022. The net assets transferred to PRPL represents Company''s investment in PRPL and consequently the resultant net difference between assets and liabilities has been recognised as Deemed Investment in PRPL. In addition, the revision in the specified term of facilities resulted in reduction of liabilities to lenders and a resultant gain of '' 223.30 crore, has been recognised in Statement of Profit and Loss and has been presented as an exceptional item.

NOTE 33 CONTINGENT LIABILITIES AND COMMITMENTS A. Contingent liabilities
		As at 31 March 2023	As at 31 March 2022
(i) Claims against the company not acknowledged as debts		9.21	8.85
(ii) Income tax liability that may arise in respect of which the Company is in appeals		45.35	6773
(iii) Sales tax liability / Works Contract Tax liability / Service Tax / GST/ Entry Tax liability that may arise in respect of matters in appeal		158.98	191.35
(iv) Put option given to lenders of Lavasa Corporation Limited to sell debentures to the company in the event of default (including interest and penal charges thereon) [Also refer note 19.1]		-	976.60
Note : It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities except in respect of matters stated in (iv) above. Future cash outflows in respect of the above are determinable only on receipt of judgments / decisions pending with various forums / authorities. The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.
B.	Commitments
		As at 31 March 2023	As at 31 March 2022
(i) Capital commitments (net of advances)		1.29	23.22
(ii) The company has given an underlying for non-disposal of investments in subsidiaries (Refer note 5.4)

Note 34 As at 31 March 2023, the Company has investments in its wholly owned subsidiary HCC Infrastructure Company Limited (''HICL) aggregating '' 1,434.65 crore classified as non-current investment '' 1,214.65 crore and current investment of '' 220 crore. The consolidated net worth of HICL as at 31 March 2023 has been substantially eroded. The management has obtained valuation report of HICL from an independent valuation expert. The valuation report includes significant judgements and estimates relating to underlying assumptions in respect of future business plans, cash flows from earn-out considerations, expected share of future revenues of subsidiaries sold and favourable arbitration awards in a subsidiary. Accordingly, based on aforementioned valuation report, the management believes that the recoverable amount of investment in HICL is higher than its carrying value as at 31 March 2023.

Note 35 Unbilled work-in-progress (contract assets), current trade receivables and non current trade receivable includes '' 602.33 crore, '' 255.69 crore and '' 5752 crore, respectively, outstanding as at 31 March 2023, representing receivables from customers based on the terms and conditions implicit in the contracts and other receivables in respect of closed/ substantially closed/ suspended/ terminated projects. These aforementioned receivables are mainly in respect of cost over-run arising due to client caused delays, deviation in design and change in scope of work; for which Company is at various stages of negotiation/ discussion with the clients or under arbitration/ litigation. Considering the contractual tenability, progress of negotiations/ discussions/ arbitration/ litigations and as legally advised in certain contentious matters, the management is confident of recovery of these receivables.

i) Classification of joint arrangements

The aforementioned entities are joint arrangements whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Company (i.e. Joint Operator) recognises its direct right to assets, liabilities, revenue and expenses of Joint Operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses and are incorporated in the standalone financial statements under the respective financial statement line item.

The estimates of future salary increases, considered in actuarial valuation, is on account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

e) Quantities sensitivity analysis for significant assumption is as below:

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation, keeping all other actuarial assumptions constant. The significant actuarial assumptions are discount rate and salary escalation rate.

The methods and type of assumptions used in preparing the sensitivity analysis did not change compared to the

Sensitivities due to mortality are not material and hence the impact of change due to these are not calculated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting year) has been applied when calculating the provision for defined benefit plan recognised in the Balance Sheet.

The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it provides an approximation of the sensitivity of the assumptions shown.

Risk exposure:

The defined plan is exposed to a number of risks, the most significant of which are detailed below:

i. Salary increases - Actual salary increases will increase the plan''s liability. Increase in salary increase rate assumption in future valuations will also increase the liability.

ii. Discount rate - Reduction in discount rate in subsequent valuations can increase the plan''s liability.

iii. Mortality and disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.

II Provident fund

In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee.

In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.

NOTE 38 FAIR VALUE

The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.

(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

NOTE 40 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk includes loans and borrowings.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s total debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company''s profit/ (loss) before tax is affected through

Sensitivity analysis

Considering the Company''s exposure of foreign currency financial instruments as at respective reporting dates'' the impact on Statement of Profit and Loss due to fluctuation in exchange rates would be immaterial. Therefore, the disclosure for sensitivity analysis not been included in the standalone financial statements.

c) Equity price risk

The Company''s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors review and approve all equity investment decisions.

At the reporting date, the exposure to:

- unlisted equity securities at fair value through other comprehensive income is '' 13.65 crore (31 March 2022:

'' 15.29 crore).

- unlisted equity in subsidiaries at cost of '' 1,573.50 crore (31 March 2022: '' 1,665.03 crore).

Sensitivity analysis

As at 31 March 2023, the exposure to listed equity securities at fair value was '' 4.82 crore (31 March 2022: '' 4.38 crore). Changes in this exposure would not have a material effect on the material effect on the profit or loss and total equity of the Company.

ii Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, financial assets. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.

a) Trade receivables (gross of provision)

Trade receivables are typically unsecured and are derived from revenue earned from two main classes of trade receivables i.e. receivables from government promoted agencies and receivables from private third parties. A substantial portion of the Group''s trade receivables are from government promoted agencies having strong credit worthiness. For ageing analysis of the receivable - Refer note 6.

Expected credit loss

In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.

b) Financial assets other than trade receivables

Financial assets other than trade receivables mainly comprise of cash and cash equivalents, Bank balances other than cash and cash equivalents, loan to subsidiaries and other financial assets. The Company monitors the credit exposure on these financial assets on a case-to-case basis. Loans to subsidiaries are assessed for credit risk based on the underlying valuation of the entity and their ability to repay within the contractual repayment terms. Cash and cash equivalents and bank balances other than cash and cash equivalents are held with bank and financial institutions with good credit rating. Based on the Company''s historical experience, the credit risk on other financial assets is also extremely low.

iii Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

NOTE 41 CAPITAL MANAGEMENT

The primary objective of the Company''s capital management is to maximise the shareholder''s wealth. The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the level of dividend to shareholders.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a debt equity ratio, which is total debt divided by total capital.

NOTE 45 OTHER STATUTORY INFORMATION:

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

(ii) The Company does not have any transactions with struck off companies.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

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

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

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

(x) The Company has not entered into any scheme of arrangement which has an accounting impact on the standalone financial statements for the current or previous year.

Note 46 The Company is principally engaged in a single business segment viz. "Engineering and Construction. Also, refer note 40(ii)b for information on revenue from major customers.

Note 47 Figures for the previous year have been regrouped/ rearranged, wherever considered necessary, to confirm to current period''s classification. The impact of such reclassification/ regrouping is not material to the standaone financial statements.

This is a summary of significant accounting policies and other explanatory information referred to in our audit report of even date.

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Mar 31, 2018

NOTE 1 CORPORATE INFORMATION

Hindustan Construction Company Limited ("the Company" or "HCC") is a public limited company incorporated and domiciled in India. The Company having CIN L45200MH1926PLC001228, is principally engaged in the business of providing engineering and construction services. Its shares are listed on two recognized stock exchanges in India- the Bombay Stock Exchange and the National Stock Exchange. The registered office of the Company is located at Hincon House, LBS Marg, Vikhroli (West), Mumbai

- 400 083, India.

The standalone financial statements ("the financial statements") of the Company for the year ended 31 March 2018 were authorized for issue in accordance with resolution of the Board of Directors on May 3, 2018.

NOTE 2.1 SIGNIFICANT ACCOUNTING POLICIES

i. Basis of Preparation

The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards ("Ind AS") notified under the Companies (Accounting Standards) Rules, 2015.

The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities and share based payments which have been measured at fair value, on an accrual basis of accounting.

The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency, and all values are rounded to the nearest crores (INR 0,000,000), except when otherwise indicated. Amount presented as "0.00* " are non zero numbers rounded off in crore.

ii. Operating cycle for current and non-current classification:

All the assets and liabilities have been classified as current or non-current, wherever applicable, as per the operating cycle of the Company as per the guidance set out in Schedule III to the Act. Operating cycle for the business activities of the Company covers the duration of the project/ contract/ service including the defect liability period, wherever applicable, and extends up to the realization of receivables (including retention monies) within the credit period normally applicable to the respective project.

iii. Accounting Estimates

The preparation of the financial statements, in conformity with the recognition and measurement principles of Ind AS, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognized in the period in which they are determined.

iv. Key estimates and assumptions

The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

a) Contract estimates

The Company, being a part of construction industry, prepares budgets in respect of each project to compute project profitability. The two major components of contract estimate are ''claims arising during construction period'' (described below) and ''budgeted costs to complete the contract''. While estimating these components various assumptions are considered by the management such as (i) Work will be executed in the manner expected so that the project is completed timely (ii) consumption norms will remain same (iii) Assets will operate at the same level of productivity as determined (iv) Wastage will not exceed the normal % as determined etc. (v) Estimates for contingencies (vi) There will be no change in design and the geological factors will be same as communicated and (vii) price escalations etc. Due to such complexities involved in the budgeting process, contract estimates are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

b) Recoverability of claims

The Company has claims in respect of cost over-run arising due to client caused delays, suspension of projects, deviation in design and change in scope of work etc., which are at various stages of negotiation/discussion with the clients or under arbitration. The reliability of these claims are estimated based on contractual terms, historical experience with similar claims as well as legal opinion obtained from internal and external experts, wherever necessary. Changes in facts of the case or the legal framework may impact reliability of these claims.

c) Valuation of investment in/ loans to subsidiaries/joint ventures

The Company has performed valuation for its investments in equity of certain subsidiaries and joint ventures for assessing whether there is any impairment in the fair value.

When the fair value of investments in subsidiaries cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the discounted cash flow model. Similar assessment is carried for exposure of the nature of loans and interest receivable thereon. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as expected earnings in future years, liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of these investments.

d) Deferred tax assets

In assessing the reliability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the Company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

e) Defined benefit plans

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

v. Fair value measurement

The Company measures financial instruments, at fair value at each balance sheet date. (Refer Note 38)

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, In the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

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

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

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

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

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

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be premeasured or re-assessed as per the Company''s accounting policies. For this analysis, the Management verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

The Management also compares the change in the fair value of each asset and liability with relevant external sources to determine whether the change is reasonable.

vi. Property, Plant and Equipment (Tangible Assets)

Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and accumulated impairment losses, if any.

Subsequent expenditure relating to Property, Plant and Equipment is capitalized only when it is probable that future economic benefits associated with the item will flow to

the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognized in the Statement of Profit and Loss.

Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.

vii. Intangible Assets

Intangible assets are stated at cost, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably, less accumulated amortisation and accumulated impairment losses, if any.

Intangible assets mainly comprise of license fees and implementation cost for software and other application software acquired / developed for in-house use.

viii. Depreciation and amortisation

Depreciation and amortisation is provided as follows:

a) In respect of buildings and sheds, on the written down value basis considering the useful lives prescribed in Schedule II to the Act.

b) In respect of furniture and fixtures, office equipment, computers, plant and equipment, heavy vehicles, light vehicles and speed boat on straight line basis at rates determined on the basis of useful lives prescribed in Schedule II to the Act, on a pro-rata basis. However, certain class of plant and machinery used in construction projects are depreciated on a straight line basis considering the useful life determined based on the technical evaluation and the management''s experience of use of the assets, that is a period of two to twelve years, as against the period of nine to twenty years as prescribed in Schedule II to the Act.

c) In respect of helicopter and aircraft, on straight line basis considering the useful life, that is a period of eighteen years and fourteen years, respectively, determined based on the technical evaluation and the management''s experience of use of the assets, as against the period of twenty years as prescribed in Schedule II to the Act.

d) Leasehold improvements are amortized over the useful lives prescribed in Schedule II to the Act or the period of lease, whichever is lower.

e) Software and implementation costs including users license fees and other application software costs are amortized on a straight line basis, from the date they are available for use, over their estimated useful lives that is a period of three to five years.

The useful lives have been determined based on technical evaluation carried out by the management''s expert, in order to reflect the actual usage of the assets. The estimated useful life and residual values are reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis.

An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.

ix. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

a) Financial Assets

i. Initial Recognition

In the case of financial assets, not recorded at fair value through profit or loss (FVPL), financial assets are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

ii. Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in following categories:

Financial Assets at Amortized Cost

Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognized in the Statement of Profit and Loss.

Financial Assets Measured at Fair Value

Financial assets are measured at fair value through Other Comprehensive Income (''OCI'') if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in the Statement of Profit and Loss.

In respect of equity investments (other than for investment in subsidiaries and associates) which are not held for trading, the Company has made an irrevocable election to present subsequent changes in the fair value of such instruments in OCI. Such an election is made by the Company on an instrument by instrument basis at the time of transition for existing equity instruments/ initial recognition for new equity instruments.

Financial asset not measured at amortized cost or at fair value through OCI is carried at FVPL.

iii. Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL'') model for measurement and recognition of impairment loss on financial assets and credit risk exposures.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the Statement of Profit and Loss.

iv. De-recognition of Financial Assets

The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.

If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.

If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

b) Equity Instruments and Financial Liabilities

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

i. Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument

ii. Financial Liabilities Initial Recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

Subsequent Measurement

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

Financial liabilities at FVPL

Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognized in the Statement of Profit and Loss.

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

Financial liabilities at amortized cost

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognized over the term of the borrowings in the Statement of Profit and Loss.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Where the Company issues optionally convertible debenture, the fair value of the liability portion of such debentures is determined using a market interest rate for an equivalent non-convertible debenture. This value is recorded as a liability on an amortized cost basis until extinguished on conversion or redemption of the debentures. The remainder of the proceeds is attributable to the equity portion of the instrument. This is recognized and included in shareholders'' equity (net of income tax) and are not subsequently re-measured.

Where the terms of a financial liability is re-negotiated and the Company issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognized in the Statement of Profit and Loss; measured as a difference between the carrying amount of the financial liability and the fair value of equity instrument issued.

De-recognition of Financial Liabilities

Financial liabilities are de-recognized when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

c) Offsetting Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis to realize the assets and settle the liabilities simultaneously.

x. Employee Benefits

a) Defined Contribution Plan

Contributions to defined contribution schemes such as provident fund, employees'' state insurance, labour welfare fund and superannuation scheme are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Company''s provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further obligations beyond the monthly contributions.

b) Defined Benefit Plan

In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognized as an expense in the period in which services are rendered by the employee.

The Company also provides for gratuity which is a defined benefit plan the liabilities of which is determined based on valuations, as at the balance sheet date, made by an independent actuary using the projected unit credit method. Re-measurement, comprising of actuarial gains and losses, in respect of gratuity are recognized in the OCI, in the period in which they occur and is not eligible to be reclassified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognized in the Statement of Profit and Loss in the year of plan amendment or curtailment. The classification of the Company''s obligation into current and non-current is as per the actuarial valuation report.

c) Leave entitlement and compensated absences

Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit. Leave entitlement, other than short term compensated absences, are provided based on a actuarial valuation, similar to that of gratuity benefit. Remeasurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognized in the Statement of Profit and Loss in the period in which they occur.

d) Short-term Benefits

Short-term employee benefits such as salaries, wages, performance incentives etc. are recognized as expenses at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on non-accumulating compensated absences is recognized in the period in which the absences occur.

xi. Inventories

The stock of construction materials, stores, spares and embedded goods and fuel is valued at cost or net realizable value, whichever is lower. Cost is determined on weighted average basis and includes all applicable cost of bringing the goods to their present location and condition. Net realizable value is estimated selling price in ordinary course of business less the estimated cost necessary to make the sale.

xii. Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand and short-term deposits with an original maturity of three month or less, which are subject to an insignificant risk of changes in value.

xiii. Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker regularly monitors and reviews the operating result of the whole Company as one segment of "Engineering and Construction. Thus, as defined in Ind AS 108 "Operating Segments'','' the Company''s entire business falls under this one operational segment and hence the necessary information has already been disclosed in the Balance Sheet and the Statement of Profit and Loss.

xiv. Borrowing Costs

Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Also, the EIR amortisation is included in finance costs.

Borrowing costs relating to acquisition, construction or production of a qualifying asset which takes substantial period of time to get ready for its intended use are added to the cost of such asset to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are expensed in the Statement of Profit and Loss in the period in which they occur.

xv. Foreign Exchange Translation of Foreign Projects and Accounting of Foreign Exchange Transaction

a) Initial Recognition

Foreign currency transactions are initially recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. However, for practical reasons, the Company uses a monthly average rate if the average rate approximate the actual rate at the date of the transactions.

b) Conversion

Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate at the reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

c) Treatment of Exchange Difference

Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and depreciated over the remaining useful life of the asset and exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Translation Reserve" and amortized over the remaining life of the concerned monetary item.

xvi. Revenue Recognition Revenue from operations

a) Revevnue from Construction Contracts

The Company follows the percentage completion method, based on the stage of completion at the Balance Sheet date, taking into account the contractual price and revision thereto by estimating total revenue including claims/variations as per Ind AS 11, Construction Contracts, and total cost till completion of the contract and the profit so determined proportionate to the percentage of the actual work done.

Revenue is recognized as follows:

- In case of item rate contracts on the basis of physical measurement of work actually completed, at the Balance Sheet date.

- In case of Lump sum contracts, revenue is recognized on the completion of milestones as specified in the contract or as identified by the management. Foreseeable losses are accounted for as and when they are determined except to the extent they are expected to be recovered through claims presented or to be presented to the customer or in arbitration.

Advance payments received from contracted for which no services are rendered are presented as ''Advance from contracted''.

b) Accounting of Supply Contracts-Sale of Goods

Revenue from supply contract is recognized when the substantial risk and rewards of ownership is transferred to the buyer, which is generally on dispatch, and the collectability is reasonably measured. Revenue from product sales are shown as net of all applicable taxes and discounts.

c) Accounting for Claims

Claims are accounted as income in the period of receipt of arbitration award or acceptance by client or evidence of acceptance received. Interest awarded, being in the nature of additional compensation under the terms of

the contract, is accounted as other operating revenue on receipt of favorable arbitration award.

Other Income a) Interest Income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the applicable Effective Interest Rate (EIR).

b) Dividend Income

Dividend is recognized when the right to receive the payment is established, which is generally when shareholders approve the dividend.

c) Other Income

Other items of income are accounted as and when the right to receive such income arises and it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably.

xvii. Interest in Joint Arrangements

As per Ind AS 111 - Joint Arrangements, investment in Joint Arrangement is classified as either Joint Operation or Joint Venture. The classification depends on the contractual rights and obligations of each investor rather than legal structure of the Joint Arrangement. The Company classifies its Joint Arrangements as Joint Operations.

The Company recognizes its direct right to assets, liabilities, revenue and expenses of Joint Operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the financial statements under the appropriate headings.

xviii. Income Tax

Income tax comprises of current and deferred income tax. Income tax is recognized as an expense or income in the Statement of Profit and Loss, except to the extent it relates to items directly recognized in equity or in OCI.

a) Current Income Tax

Current income tax is recognized based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

b) Deferred Income Tax

Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognized for all deductible temporary differences between the financial statements'' carrying amount of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. Deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized. Such assets are reviewed at each Balance Sheet date to reassess realization.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Minimum Alternative Tax ("MAT") credit is recognized as an asset only when and to the extent it is probable that the Company will pay normal income tax during the specified period.

xix. Leases

Leases, where the less or effectively retains substantially all the risks and benefits of ownership over the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term except where the lease payments are structured to increase in line with expected general inflation. Assets acquired on finance lease are capitalized at fair value or present value of minimum lease payment at the inception of the lease, whichever is lower.

xx. Impairment of Non-Financial Assets

As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial asset may be impaired and also whether there is an indication of reversal of impairment loss recognized in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and

- In case of cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of cash generating unit''s fair value less cost to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset.

In determining fair value less cost to sell, recent market transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the Statement of Profit and Loss, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognized in OCI up to the amount of any previous revaluation.

When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through the Statement of Profit and Loss.

xxi. Trade receivables

A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business.

Trade receivables are recognized initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment.

xxii. Trade payables

A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the EIR method.

xxiii. Earnings Per Share

Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.

Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company and weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares).

xxiv. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management''s estimate required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognized because it cannot be measured reliably.

Contingent assets are disclosed where an inflow of economic benefits is probable.

xxv. Share Issue Expenses

Share issue expenses are charged off against available balance in the Securities premium reserve.

xxvi. Share Based Payments

Certain employees of the Company are entitled to remuneration in the form of equity settled instruments, for rendering services over a defined vesting period. Equity instruments granted are measured by reference to the fair value of the instrument at the date of grant. The fair value determined at the grant date is expensed over the vesting period of the respective tranches of such grants.

The stock compensation expense is determined based on the Company''s estimate of equity instruments that will eventually vest using fair value in accordance with Ind-AS 102, Share based payment.

xxvii. Exceptional Items

When items of income and expense within profit or loss from ordinary activities are of such size, nature or incidence that their disclosure is relevant to explain the performance of the enterprise for the period, the nature and amount of such material items are disclosed separately as exceptional items.

NOTE 2.2 RECENT ACCOUNTING PRONOUNCEMENTS

1. Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.

2. Ind AS 115, Revenue from Contract with Customers:

In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 ("amended rules"). As per the amended rules, Ind AS 115 "Revenue from contracts with customers" supersedes Ind AS 11, "Construction contracts" and Ind AS 18, "Revenue" and is applicable for all accounting periods commencing on or after 1 April 2018.

Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies

that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.

The new revenue standard is applicable to the Company from 1 April 2018.

The standard permits two possible methods of transition:

i. Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8

- Accounting Policies, Changes in Accounting Estimates and Errors

ii. Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch - up approach)

The Company is evaluating the requirement of the amendment and the impact on the financial statements.

The effect on adoption of Ind AS 115 is expected to be insignificant.

^A Net off advance received against work bill / claims '' 200.02 crore (31 March 2017: '' 68.14 crore)

^AA Net off advance received against work bill Rs, 1,509.30 crore (31 March 2017: Rs, 375.58 crore) aaa Net off advance received against work bill Rs, 439.85 crore (31 March 2017: Rs, 460.98 crore)

Note 3 Non-current trade receivables, current trade receivables and other financial assets as at 31 March 2018 include Rs, 1,375.13 crore, Rs, 1,431.49 crore (net of advances Rs,1,709.31 crore) and Rs, Nil respectively [31 March 2017 : Rs, 1,429.09 crore, Rs, 1,439.38 crore (net of advances Rs, 443.64crore) and Rs, 79.85 crore] representing claims awarded in arbitration in favour of the Company and which have been challenged by the customers in High Courts/ Supreme Court. Current trade receivables include Rs,221.51 crore of claims awarded in arbitration which are unchallenged as at 31 March 2018.

As decided by the Cabinet Committee on Economic Affairs (CCEA) (Government of India) during the previous year, in respect of claims where arbitration awards have been decided in favour of the Company but further challenged by clients, the clients shall pay 75% of the arbitral award amount to the Company, in an escrow account, against a bank guarantee (BG). As at 31 March 2018, the Company has received letters from its customers conveying release of 75% of the arbitral award amount resulting in a payout aggregating Rs, 2,046.03 crore (31 March 2017: Rs, 1,882 crore), of which the Company has realised Rs, 1,416.10 crore (31 March 2017:

Rs, 148.39 crore). The balance amount is presently pending on account of completion of certain formalities by the Company. The Company is also pursuing with customers for issuance of similar payout letters for the balance amounts.

Note 4 There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms or private companies in which any director is a partner, a director or a member.

Note 5 Trade receivables, except receivables on account of claims awarded in arbitration in favour of the Company, are non-interest bearing and are generally on terms of 30 to 90 days.

NOTE 6 EQUITY SHARE CAPITAL...contd.

i. Options granted

a) The Company offered 4,458,800 Stock Options on 25 April 2008 (each option carrying entitlement for one equity share of the face value of Rs, 1 each) at a price of Rs,132.50 per equity share.

In accordance with the approval of the board of directors and shareholders of the Company, the ESOP Compensation Committee at its meeting held on 20 July 2009 repriced 4,131,600 options at Rs, 104.05 per equity share.

b) The ESOP Compensation Committee of the Company at its Meeting held on 12 August 2010 decided to double the number of employee stock options (vested and unvested), not exercised and in-force, as on the Record Date i.e.

11 August 2010 and halved the exercise price on account of issuance and allotment of Bonus Equity Shares in the proportion of 1:1.

Accordingly, 3,553,760 employee stock options in-force granted by the Company on 25 April 2008 were doubled i.e. 7,107,520 and the exercise price in respect of the same was reduced from Rs,104.05 to Rs, 52.03 per equity share and none of the options are outstanding as at 31 March 2018.

c) The ESOP Compensation Committee of the Company at its Meeting held on 20 March 2018 has approved a grant of

300,000 options, in accordance with the terms and conditions contained in the existing HCC Employee Stock Option Scheme of the Company (''Scheme'') (each option carrying entitlement for one equity share of the face value of '' 1 each) at an exercise price of '' 31.15 per equity share, subject to approval of the shareholders for amendment of the existing Scheme, in line with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 ("SEBI Regulations").

ii. Settlement Through Equity Shares

iii. Options vested Nil options (31 March 2017: Nil) remain vested and outstanding as at 31 March 2018

f. Bonus shares/ buy back/shares for consideration other than cash issued during past five years:

(i) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash - Nil

(ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares- Nil

(iii) Aggregate number and class of shares bought back - Nil

g. Pursuant to the approval of the shareholders at the Extra Ordinary General Meeting held on 5 January 2017, the allotment committee of the Board of Directors at its meetings held on 6 January 2017 and 19 January 2017 alloted collectively to the lenders 231,544,729 equity shares of face value of Rs, 1 each at a premium of Rs, 33.92 per share aggregating Rs, 808.55 crore and 14,414,874 optionally convertible debentures (OCDs) of face value of Rs, 1,000 each at par (carrying coupon rate of 0.01% p.a.) aggregating Rs, 1,441.49 crore. Further, pursuant to the approval of the shareholders at the Annual General Meeting held on 6 July 2017, the allotment committee of the Board of Directors at its meeting held on 17 July 2017 allotted to a lender 4,759,291 equity shares of face value of Rs, 1 each at a premium of Rs, 40.61 per share aggregating Rs, 19.80 crore and 256,716 OCDs of face value of Rs, 1,000 each at par (carrying coupon rate of 0.01% p.a.) aggregating Rs, 25.67 crore on preferential basis as part of the Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme). The implementation of the S4A Scheme and the consequent allotment of equity shares/ OCDs have been made in respect of all the lenders except for few lenders who will be alloted equity shares and OCDs once they exercise their option. Number of equity shares/OCDs to be alloted will be determined based on the share price prevailing at the time of such allotment. (Also refer Note 16.1)

Restructuring of borrowings under Corporate Debt Restructuring Scheme (CDR Scheme) and Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme):

The Company received Letter of Approval (LOA) on 29 June 2012 issued by the Corporate Debt Restructuring Empowered Group (CDREG) approving the CDR Scheme. The CDR related documents had been executed and creation of security was completed. During the previous year, the Company has implemented the S4A Scheme. The Joint Lender''s Forum (JLF) adopted the S4A Scheme with reference date as 12 July 2016. The S4A Scheme was duly approved by the Reserve Bank of India''s mandated Overseeing Committee (OC) on 4 November 2016. Under the S4A Scheme, the Company''s total debts amounting to '' 5,107 crores as at 1 October 2016 have been bifurcated into sustainable debt, to be serviced as per existing terms and conditions of those debts, and remainder debts (to the extent of 47.5% of the fund based exposure of the Company) have been converted into fully paid up equity shares in favour of the lenders by following principle of proportionate loss and balance in OCDs collectively in favour of the lenders. [Also refer note 15 (g)]

Note 8 Details of security and terms of repayment I. Secured

(A) Non-convertible debentures

i) Axis

These debentures are classified as RTL-1. These debentures carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. These are secured by way of registered mortgage over 231.66 acres of Lavasa land situated in 5 villages namely Village Admal, Bhode, Gadle, Padalghar and Ugavali in taluka Mulshi, District Pune, Maharashtra.

ii) LIC

These debentures are classified as RTL-1. These debentures carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(B) Rupee Term Loans (RTL-A)

RTL-A carries interest rate of 11.75% p.a. (Individual Bank''s Base Rate Applicable Spread), payable monthly, to be reset annually with a two years moratorium and repayment terms of five years starting from financial year 2017-18. The said facility is having same security as RTL-1 lenders under the CDR Scheme.

(C) Rupee Term Loans 1 (RTL-1) and Rupee Term Loans 2 (RTL-2)

RTL - 1 and RTL- 2 carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(D) Working Capital Term Loan (WCTL-1)

Working Capital Term Loan (WCTL-1) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 16 quarterly installments commencing 15 April 2014 and ending on 15 January 2018. Refer note 16.2.1 for security details.

(E) Working Capital Term Loan (WCTL-2)

Working Capital Term Loan (WCTL-2) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(F) Foreign Currency Term Loan from banks

i) Standard Chartered Bank - External Commercial Borrowings (ECB) USD 13.36 million

As at 31 March 2018, the ECB loan from Standard Chartered Bank carries an interest rate of 5.81% p.a. (3 month LIBOR plus 350 basis points). This loan is repayable in 17 quarterly installments commencing 15 April 2014 and ending on 15 March 2018. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation executed on 10 November 2009.

ii) Development Bank of Singapore - ECB USD 10.18 million

As at 31 March 2018, the ECB loan from Development Bank of Singapore carries an interest rate of 6.16% p.a. (3 month LIBOR plus 385 basis points). This loan is repayable in 17 quarterly installments commencing 5 October 2014 and ending on

5 October 2018. The facility is secured by first charge by way of hypothecation of plant and machinery and heavy vehicles acquired under the facility described in the schedule I (2) to the deed of hypothecation executed on 29 April 2010.

iii) Export Import Bank of United States - ECB USD 9.36 million

As at 31 March 2018, the ECB loan from Export Import Bank of United Sates carries an interest rate of 3.51% (3 month LIBOR plus 120 basis points). This loan is repayable in 35 equal quarterly installments commencing 16 March 2011 and ending on 16 September 2019. The facility is secured by first priority mortgage and security interest to and in favour of Wilmington Trust Company (the security trustee) on one Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause 2.1 as per the Aircraft Charge Agreement executed on 6 January 2011.

(G) Optionally Convertible Debentures (OCDs)

OCDs have been issued to the lenders as part of the S4A Scheme with a tenor of 10 years and a coupon of 0.01% with an interest yield of 11.50% p.a. in yield equalization compounded on a quarterly basis. After the expiry of eighteen months from the date of issuance, the OCDs will be converted into non-convertible debentures in case of non occurrence of event of default as per the guidelines of the S4A Scheme. The repayment of the OCD commences from the 6^th anniversary of the allotment date. Details of maturity have been provided below. Also refer note 16.2.2 for security details.

Note 9 RTL-1, RTL-2, WCTL-1 and WCTL-2 are secured in the form of:

1. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets'') as the Third Mortgaged Properties.

4. All of the Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

5. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and Additional Assets'' have been defined in the Master Restructuring Agreement

(MRA).

The above security having ranking in respect to RTL1, WCTL1 and RTL-A are as below:

1. A first ranking and pari passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

The above security having ranking in respect to RTL2 and WCTL2 are as below:

A second ranking and pari passu security interest by way of legal mortgage over all the Mortgaged Properties.

Collateral security pari-passu with lenders defined in MRA:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for '' 9,477.60 crore, against which HRELs outstanding amount is '' 7,616.59 crore (31 March 2017: '' 8,496.48 crore).

2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. Personal guarantee of the Chairman and Managing Director of the Company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION AS AT AND FOR THE YEAR ENDED MARCH 31, 2018

Note 10 Optionally Convertible Debentures (OCDs) are secured in the form of:

1. First ranking pari passu charge on all of the Company''s Property, plant and equipment (immovable and movable) [excluding the Specified Assets and Excluded Assets]; and

2. Second ranking and pari passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties as specified in the mortgage deed.

Collateral security pari-passu with all S4A lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for '' 9,477.60 crore, against which HRELs outstanding amount is '' 7,616.59 crore (31 March 2017: '' 8,496.48 crore).

2. First pari-passu charge on Pledge of 85,767,617 equity shares of the Company and second charge on 154,151,669 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

3. Personal guarantee of the Chairman and Managing Director of the Company

Note 11 As at 31 March 2018, in relation to Term Loans, contractual loan principal amounting to Rs, 90.15 crore (31 March 2017: Rs, 70.12 crore) and contractual interest amounting to Rs, 6.16 crore (31 March 2017: Rs, 66.77 crore) are due and outstanding pertaining to the period 1 April 2017 to 31 March 2018. Subsequent to the year end, the Company has paid Rs, Nil (31 March 2017: Rs, 234.55 crore) to various lenders which is pending appropriation between principal and interest.

Note 12 Master Restructuring Agreement (MRA) as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, provide a right to the CDR lenders to get a recompense of their waiver and sacrifices made as part of the CDR proposal. The recompense payable by the Company depends on various factors including improved performance of the Company and other conditions. In view of subsequent implementation of S4A scheme, wherein total debts of the Company as of

1 October 2016 have been bifurcated into sustainable debt, to be serviced as per existing terms and conditions of those debts, and remainder converted into fully paid up equity shares and OCDs, the aggregate present value of the recompense amount payable to erstwhile CDR lenders as per the MRA is likely to undergo major changes and would be ascertained post completion of discussions with the Monitoring Institution.

Note 19.1 Security for Cash Credit Facilities, Working Capital Demand Loan and Buyer''s Credit:

1. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrowe

---

Mar 31, 2017

Explanation for reconciliation

1. Investment

Under Ind AS, investments in debentures and certain equity instruments (other than of subsidiaries, associates and joint ventures) are carried at fair value through OCI as compared to being carried at cost under previous GAAP The adjustment represents the difference in the fair value and the cost of investments in debenture/ equity instruments.

2. Loans

Under Ind AS, loans are valued at present value as compared to being carried at cost in the previous GAAP This adjustment includes the difference between the book value and the present value of an interest free loan or loan below market rate given to a subsidiary, which is treated as investment in that subsidiary. The interest on the present value of this loan is recognized over the tenure of the loan using the EIR method.

3. Other financial assets - Security deposits

Under Ind AS, interest free lease deposits are valued at present value as compared to being carried at transaction value in the previous GAAP The adjustment includes the difference between the book value and present value of interest free security deposits which has been recognized as deferred rent expense. This amount is subsequently charged to the Statement of Profit and Loss on a straight line basis as an interest expense. Further, interest income computed on the present value of the security deposit is recognized over the tenure of the security deposit using the EIR method.

4. Other financial assets - Financial guarantees

Under Ind AS, the financial guarantee given by a subsidiary company to the lender of the Company for its borrowings are recognized initially as an asset at fair value which is subsequently amortized as an interest expense to the Statement of Profit and Loss. This transaction was not recorded under the previous GAAP

5. Borrowings

Ind AS 109 requires transaction cost incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the EIR method.

As stated in note 16, the Company had restructured its debt in 2012 which was determined to be a substantial modification. This resulted into extinguishment of the old liabilities and recognition of new liabilities as on the transition date. For the loans which were not substantially modified, the loans were carried at book value less transaction costs, if any. Under Ind AS, loans are valued at present value as against cost in the previous GAAP The difference between the present value and cost is recognized in the opening retained earnings.

6. Other financial liabilities - Financial guarantees

Under Ind AS, financial guarantees given by the Company for its subsidiaries are initially recognized as a liability at fair value which is subsequently amortized as an interest income to the Statement of Profit and Loss. This transaction was not recorded under the previous GAAP

7. Defined benefits obligations

Under Ind AS, actuarial gains and losses are recognized in the OCI as compared to being recognized in the Statement of Profit and Loss under the previous GAAP

8. Provisions

Under the previous GAAP discounting of provisions was not permitted. Under Ind AS, provisions are measured at discounted amounts if the effect of time value is material. As the effect of time value is not material, provisions have not been discounted.

9. Income tax

Current income tax

Tax component on the gain/ (loss) on fair value of defined benefit plans and equity instruments have been transferred to the OCI under Ind AS.

Deferred income tax (including MAT)

Deferred tax have been recognized on the adjustments made on transition to Ind AS.

10. Other comprehensive income

Under the previous GAAP the Company has not presented OCI separately. Hence, it has reconciled previous GAAP profit or loss to profit or loss as per Ind AS. Further, previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

11. Other equity

Adjustments to retained earnings and OCI have been made in accordance with Ind AS, for the above mentioned transition items.

12. Jointly controlled entities

Under Ind-AS, the Company recognizes its direct right to assets, liabilities, revenue and expenses and its share of any jointly held or incurred assets, liabilities, revenues and expenses in relation to joint operations which require unanimous consent from all the parties for all relevant activities.

iv Statement of cash flows

There were no significant reconciliation items between cash flows prepared under previous GAAP and those prepared under Ind AS.

Note 13 During the year ended 31 March 2016, the Company divested 26% equity stake in VCPPL for an aggregate consideration of Rs.90.03 crore out of which the Company received Rs.7703 crore resulting in gain of Rs.70.61 crore. Balance Rs.13 crore will be realized and accounted for on fulfillment of certain conditions.

Note 14 The Company has pledged the following shares in favour of the lenders as a part of the financing agreements for facilities taken by subsidiary companies as indicated below:

Note 15 The Company has given a "Non Disposal Undertaking" to the lenders of Highbar Technologies Limited to the extent of 3,074,940 (31 March 2016: 3,074,940) equity shares.

Note 16 Movement in investments as at 31 March 2017 and 31 March 2016

Note 17. Trade receivable includes Rs.2,948.32 crore (31 March 2016: Rs.2,553.25 crore; 1 April 2015: Rs.1,772.17 crore) on account of claims awarded in arbitration in favour of the Company which have been challenged by the client in High Courts/ Supreme Court.

Note 18. There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms or private companies in which any director is a partner, a director or a member.

Note 19. Trade receivables, except receivables on account of claims awarded in arbitration in favour of the Company, are non-interest bearing and are generally on terms of 30 to 90 days.

Note 20. As decided by the Cabinet Committee on Economic Affairs (CCEA) (Government of India), in respect of claims where arbitration awards have been decided in favour of the Company but further challenged by customers, the customers shall pay 75% of the arbitral award amount to the Company, in an escrow account, against a bank guarantee (BG). As at 31 March 2017, the Company''s receivables include Rs.2,948.32 crore (net of advances of Rs.443.64 crore) on account of such awards.

The Company has received letters from its customers conveying release of 75% of the arbitral award amount resulting in a payout aggregating Rs.1,882 crore, of which the Company has realized Rs.380.19 crore till date (including Rs.148.39 crore realized during the year ended 31 March 2017). The balance amount is presently pending on account of completion of certain formalities by the Company. The Company is pursuing with customers for issuance of similar payout letters for the balance amounts.

Note 21. The Company has received Rs. 10 crore (31 March 2016: Rs.10 crore, 1 April 2015: Rs.10 crore) as advance towards sale of investment in Panchkutir Developers Limited

Note 22. Pursuant to Shareholders Agreement (SHA) executed on 9 August 2011, the Company is required to hold 100% equity stake in HCC Infrastructure Company Limited (HIL) until Private Equity Investor gets an exit from HCC Concessions Limited (HCL) through means as specified in the SHA and there are certain other customary restrictions on pledging / creation of any encumbrance over shares / assets of HIL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highways Limited, Farakka - Raiganj Highways Limited., Dhule Palesner Tollways Limited and Raiganj - Dalkhola Highways Limited to National Highways Authority of India (NHAI) that it will not transfer its shareholding till the commercial operation date. The Company has entered into sale agreement with HCL to sell these shares at book value at future dates on fulfillment of that obligation as per undertaking given to NHAI. The Company has received full consideration of Rs.2770 crore (31 March 2016: Rs.2770 crore; 1 April 2015: Rs.45.58 crore) for transfer of the above shares at book value from HCL, subject to necessary approvals and consents to the extent required in the following BOT SPV''s. During the year ended 31 March 2016, the Company has transferred 17,882,700 equity shares in Dhule Palesner Tollways Limited to HCL at book value.

b. Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs.1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend, if any.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c. Shares held by subsidiary company:

Western Securities Limited, a subsidiary company, holds 52,000 equity shares (31 March 2016: 52,000 equity shares, 1 April 2015: 52,000 equity shares) in the Company.

e. Shares reserved for issue under Employee Stock Options Scheme (ESOP):

As at 31 March 2017, there are 120,180 (31 March 2016: 1,654,630; 1 April 2015: 3,239,330) stock options outstanding convertible into equal number of equity shares of '' 1 each convertible at an exercise price of Rs.52.03 per share.

During the year ended 31 March 2017, none of the options were exercised / converted into equity shares and 1,534,450 (31 March 2016: 1,584,700; 1 April 2015: 1,455,470) stock options got lapsed.

i. Options granted

a) The Company offered 4,458,800 Stock Options on 25 April 2008 (each option carrying entitlement for one equity share of the face value of Rs.1 each) at a price of Rs.132.50 per equity share.

In accordance with the approval of the board of directors and shareholders of the Company, the ESOP compensation committee at its meeting held on 20 July 2009 re priced 4,131,600 options at Rs.104.05 per equity share.

b) The ESOP Compensation Committee of the Company at its Meeting held on 12 August 2010 decided to double the number of employee stock options (vested and unvested), not exercised and in-force, as on the Record Date i.e. 11 August 2010 and halved the exercise price on account of issuance and allotment of Bonus Equity Shares in the proportion of 1:1.

Accordingly, 3,553,760 employee stock options in-force granted by the Company on 25 April 2008 were doubled i.e. 7,107,520 and the exercise price in respect of the same was reduced from Rs.104.05 to Rs. 52.03 per equity share.

ii. Settlement Through Equity Shares

iii. Options vested 120,180 number of options remain vested and outstanding as at 31 March 2017

f. Bonus shares/ buy back/shares for consideration other than cash issued during past five years:

(i) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash - Nil

(ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil

(iii) Aggregate number and class of shares bought back - Nil

g. Pursuant to bonus issue of equity shares in the proportion of 1:1, outstanding 95,146 Global Depository Shares (outstanding as of Record Date i.e. 11 August 2010) increased to 190,292. Out of the total Global Depository Shares (GDR) issued, Nil (31 March 2016: Nil, 1 April 2015: 17,300) GDR''s are outstanding as at 31 March 2017

h. (i) On 5 January 2017, the shareholders of the Company at its Extra-ordinary General Meeting approved the increase in authorized equity share capital from 900,000,000 equity shares of Rs.1 each to 1,250,000,000 equity shares of Rs.1 each.

(ii) Pursuant to the approval of the Qualified Institutional Placement Committee constituted by the Board of Directors on 10 April 2015, the Company issued 133,332,800 equity shares of Rs.1 each, at an issue price of Rs.30 per equity share (including Rs.29 per share is towards securities premium) aggregating Rs.399.99 crore to Qualified Institutional Buyers in accordance with Chapter VIII of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended and Section 42 of the Companies Act, 2013 and the rules made there under.

(iii) Pursuant to the approval of the shareholders at the Extra Ordinary General Meeting held on 5 January 2017, the allotment committee of the Board of Directors at its meetings held on 6 January 2017/ 19 January 2017 allotted collectively to the lenders 231,544,729 equity shares of face value of Rs.1 at a premium of Rs.33.92 per share aggregating Rs.808.55 crore and 14,414,874 OCDs of face value of Rs.1,000 each at par (carrying coupon rate of 0.01 % p.a.) aggregating Rs.1,441.49 crore on preferential basis as part of the S4A Scheme. The implementation of S4A Scheme and consequent allotment of equity shares/ OCDs have been made in respect of all the lenders except for few lenders who will be alloted equity shares and OCDs based on the share price prevailing at the time of such allotment.

Note 23.

Restructuring of borrowings under Corporate Debt Restructuring Scheme (CDR Scheme) and Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme):

The Company received Letter of Approval (LOA) on 29 June 2012 issued by the Corporate Debt Restructuring Empowered Group (CDREG) approving the CDR Scheme. The CDR related documents had been executed and creation of security was completed. During the current year, the Company has implemented the S4A Scheme. The Joint Lender''s Forum (JLF) adopted the S4A Scheme with reference date as 12 July 2016. The S4A Scheme was duly approved by the Reserve Bank of India''s mandated Overseeing Committee (OC) on 4 November 2016. Under the S4A Scheme, the Company''s total debts amounting to Rs.5,107 crore as at 1 October 2016 have been bifurcated into sustainable debt, to be serviced as per existing terms and conditions of those debts, and remainder debts (to the extent of 475% of the fund based exposure of the Company) have been converted into fully paid up equity shares in favour of the lenders by following principle of proportionate loss and balance in OCDs collectively in favour of the lenders.

24. Details of security and terms of repayment

I. Secured

(A) Non-convertible debentures

i) Axis

These debentures are classified as RTL-1. These debentures carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. These are secured by way of registered mortgage over 231.66 acres of Lavasa land situated in 5 villages namely Village Admal, Bhode, Gadle, Padalghar and Ugavali in taluka Mulshi, District Pune, Maharashtra.

ii) LIC

These debentures are classified as RTL-1. These debentures carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(B) RupeeTerm Loans 1 (RTL-1) and RupeeTerm Loans 2 (RTL-2)

RTL - 1 and RTL - 2 carry an interest yield of 11.50% p.a. and are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(C) Working Capital Term Loan (WCTL-1)

Working Capital Term Loan (WCTL -1) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 16 quarterly installments commencing 15 April 2014 and ending on 15 January 2018. Refer note 16.2.1 for security details.

(D) Working Capital Term Loan (WCTL-2)

Working Capital Term Loan (WCTL-2) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 31 quarterly installments commencing 15 April 2014 and ending on 15 October 2021. Refer note 16.2.1 for security details.

(E) Other Term Loans

(i) Standard Chartered Bank - External Commercial Borrowings (ECB) USD 13.36 million

As at 31 March 2017, the ECB loan from Standard Chartered Bank carries an interest rate of 4.65% p.a. (3 month LIBOR plus 350 basis points). This loan is repayable in 17 quarterly installments commencing 15 April 2014 and ending on 15 March 2018. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation executed on 10 November 2009.

(ii) Development Bank of Singapore - ECB USD 10.18 million

As at 31 March 2017, the ECB loan from Development Bank of Singapore carries an interest rate of 5% p.a. (3 month LIBOR plus 385 basis points). This loan is repayable in 17 quarterly installments commencing 5 October 2014 and ending on 5 October 2018. The facility is secured by first charge by way of hypothecation of plant and machinery and heavy vehicles acquired under the facility described in the schedule I (2) to the deed of hypothecation executed on 29 April 2010.

(iii) Export Import Bank of United States - ECB USD 9.36 million

As at 31 March 2017, the ECB loan from Export Import Bank of United Sates carries an interest rate of 2.35% (3 month LIBOR plus 120 basis points). This loan is repayable in 35 equal quarterly installments commencing 16 March 2011 and ending on 16 September 2019. The facility is secured by first priority mortgage and security interest to and in favour of Wilmington Trust Company (the security trustee) on one Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause 2.1 as per the Aircraft Charge Agreement executed on 6 January 2011.

(F) Funded Interest Term Loan (FITL)

FITL, carried an interest rate of 11.50% p.a., and was fully repaid during the year ended 31 March 2016.

(G) Rupee Term Loans (RTL-A)

RTL-A carries interest rate of 11.75% p.a. (Individual Bank''s Base Rate Applicable Spread), payable monthly, to be reset annually with a two years moratorium and repayment terms of five years starting from financial year 2017-18. The said facility is having same security as RTL-1 lenders under the CDR Scheme.

(H) Optionally Convertible Debentures (OCDs)

OCDs have been issued to the lenders as part of the S4A Scheme with a tenor of 10 years and a coupon of 0.01% with an interest yield of 11.50% p.a. in yield equalization compounded on a quarterly basis. After the expiry of eighteen months from the date of issuance, the OCDs will be converted into non-convertible debentures in case of non occurrence of event of default as per the guidelines of S4A Scheme. The repayment of the OCD commences from the 6th anniversary of the allotment date. Refer note 16.2.2 for security details.

II. Unsecured

A) Term Loan - other than Banks

The loan carried an interest rate of 11.50% p.a. and was fully repaid during the year ended 31 March 2016.

B) FITL from Other Parties

FITL, carried an interest rate of 11.50% p.a. and was fully repaid during the year ended 31 March 2016.

Note 25. RTL-1, RTL-2, WCTL-1 and WCTL-2 are secured in the form of:

26. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

27. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

28. All current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

29. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

30. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and ''Additional Assets'' have been defined in the Master Restructuring Agreement (MRA).

The above security having ranking in respect to RTL1, WCTL1 and RTL-A are as below:

31. A first ranking and pari passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

32. A second ranking and pari passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

The above security having ranking in respect to RTL2 and WCTL2 are as below:

A second ranking and pari passu security interest by way of legal mortgage over all the Mortgaged Properties.

Collateral security pari-passu with lenders defined in MRA:

33. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9,47760 crore, against which HRELs outstanding amount is Rs.8,496.48 crore (31 March 2016: Rs.8,929.32 crore, 1 April 2015: Rs.8,714.11 crore).

34. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

35. Personal guarantee of the Chairman and Managing Director of the Company.

Note 36. Optionally Convertible Debentures (OCDs) are secured in the form of:

37. First ranking pari passu charge on all of the Company''s Property, plant and equipment (both immovable and movable) [excluding the Specified Assets and Excluded Assets]; and

38. Second ranking and pari passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties as specified in the mortgage deed. The security creation would be done as per stipulated time frame.

Collateral security pari-passu with all S4A lenders:

39. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9,47760 crore, against which HRELs outstanding amount is Rs.8,496.48 crore (31 March 2016: Rs.8,929.32 crore, 1 April 2015: Rs.8,714.11 crore).

40. First par-passu charge on Pledge of 85,767,617 equity shares of the Company and second charge on 154,151,669 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.

41. Personal guarantee of the Chairman and Managing Director of the Company

Note 42. As at 31 March 2017, contractual loan principal amounting to Rs.70.12 crore (31 March 2016: Rs.34.11 crore, 31 March 2015: Rs.66.38 crore) and contractual interest amounting to Rs.66.77 crore (31 March 2016: Rs.36.48 crore, 31 March 2015: Rs.66.83 crore) are due and outstanding pertaining to the period 1 October 2016 to 31 March 2017 Subsequent to the year end, the Company has paid Rs.234.55 crore to various lenders which is pending appropriation between principal and interest.

Note 43. Master Restructuring Agreement (MRA) as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, provide a right to the CDR lenders to get a recompense of their waiver and sacrifices made as part of the CDR proposal. The recompense payable by the Company depends on various factors including improved performance of the Company and other conditions. In view of subsequent implementation of S4A scheme, wherein total debts of the Company as of 1 October 2016 have been bifurcated into sustainable debt, to be serviced as per existing terms and conditions of those debts, and remainder converted into fully paid up equity shares and OCDs, the aggregate present value of the recompense amount payable to erstwhile CDR lenders as per the MRA is likely to undergo major changes and would be ascertained post completion of discussions with the Monitoring Institution.

Note 44. Security for Cash Credit Facilities, Working Capital Demand Loan and Buyer''s Credit:

45. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

46. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

47. All current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

48. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

49. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and ''Additional Assets'' have been defined in the MRA.

The above security having ranking as below:

50. A first ranking and pari passu security interest by way of legal mortgage over the Third and Fourth Mortgaged Properties.

51. In the form of a second ranking and pari passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties.

Collateral security pari-passu with lenders defined in MRA are same as indicated in note 16.2.1.

The Company has provided first charge over specific property, plant and equipment (having WDV of Rs.50 crore) of the Company for the loan extended by Export Import Bank of India (EXIM Bank) to HCC Mauritius Enterprise Limited through Loan Agreement dated 27 September 2010. The same security has also been extended for the loan of USD 25 million given by EXIM Bank to HCC Mauritius Investment Limited.

YES Bank, the lender of HCC Infrastructure Company Limited, a subsidiary company is having subservient charge on identified receivables of the Company. YES Bank issued NOC on 4 September 2012 for ceding first charge in favour of working capital lenders and second charge in favour of term lenders.

The securities towards working capital facilities also extend to guarantees given by the banks on behalf of the Company.

The lease agreement provides for an option to the Company to renew the lease period at the end of the non-cancellable period. There are no exceptional/ restrictive covenants in the lease agreements.

Further, the Company has entered into cancellable operating lease for office premises and employee accommodation. Tenure of leases generally vary between one year to four years. Terms of the lease include operating terms for renewal, terms of cancellation etc.

Lease payments in respect of the above leases are recognized in the Statement of Profit and Loss under the heads "Construction expenses" and "Other expenses" (Refer notes 25 and 29 respectively).

Note 52 In respect of year ended 31 March 2014, the Company''s request for remuneration in excess of the limit prescribed and held in trust, to the Ministry of Corporate Affairs (the ''Ministry''), to reconsider their approval of Rs.1.92 crore against the entire remuneration of Rs.10.66 crore paid to the Chairman and Managing Director (CMD), is pending with the Ministry.

Note 53. In respect of year ended 31 March 2015, the Company has provided for remuneration for CMD of Rs.10.66 crore. The Company has made an application to the Ministry seeking its approval for payment of Rs.10.66 crore which is in excess of the limits specified under Schedule V to the Companies Act, 2013.

Note 54. In respect of year ended 31 March 2016, the Company''s application to the Ministry for approval of remuneration paid/ payable Rs.10.66 crore to the CMD which is in excess of the limit prescribed and held in trust, is pending with the Ministry.

Note 55. In respect of year ended 31 March 2017, the Company has paid the remuneration of Rs.2.19 crore to the CMD in accordance with shareholders'' approval obtained in the annual general meeting held on 14 July 2016. The Company has also made an additional provision for increase in remuneration of Rs.1.38 crore, which is within the limits specified under Schedule V to the Companies Act, 2013, for which shareholders'' approval will be sought in the ensuing shareholders'' meeting.

Note 56 (a) The Company, as at 31 March 2017, has (i) a non-current investment amounting to Rs.612.40 crore (31 March 2016: Rs.612.40 crore; 1 April 2015: Rs.612.40 crore), non-current loans amounting to Rs.380.86 crore (31 March 2016: Rs.32701 crore; 1 April 2015: Rs.266.02 crore), other non-current financial assets amounting to Rs.21.72 crore (31 March 2016: Rs.19.43 crore; 1 April 2015: Rs.25.01 crore) and other current financial assets amounting to Rs. Nil (31 March 2016: Rs.5.07 crore; 1 April 2015: Rs.3.43 crore) in HREL, a subsidiary, which is holding 68.70% share in Lavasa Corporation Limited (LCL), a step down subsidiary, and (ii) a non-current investment amounting to Rs.18.43 crore (31 March 2016: Rs.18.43 crore; 1 April 2015: Rs.18.43 crore), non-current loans amounting to Rs.131.56 crore (31 March 2016: Rs.110.21 crore; 1 April 2015: Rs.Nil), other non-current financial assets amounting to Rs.16.45 crore (31 March 2016: Rs.13.08 crore; 1 April 2015: Rs.14.30 crore) and other current financial assets amounting to Rs.4.77 crore (31 March 2016: Rs.1.28 crore; 1 April 2015: Rs.7724 crore) in LCL. While such entities have incurred losses during their initial years and consolidated net-worth of both entities as at 31 March 2017 has been fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The net-worth of these subsidiaries does not represent their true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of these subsidiaries is substantially higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.

Note 57 (b) The Company, as at 31 March 2017, has a non-current investment amounting to Rs.2.24 crore (31 March 2016: Rs.2.24 crore;1 April 2015: Rs.2.24 crore), non-current loans amounting to Rs.1,124.36 crore (31 March 2016: Rs.984.82 crore; 1 April 2015: Rs.634.81 crore), other non-current financial assets amounting to Rs.141.14 crore (31 March 2016: Rs.12748 crore; 1 April 2015: Rs.283.80 crore) and other current financial assets amounting to Rs.2.47 crore (31 March 2016: Rs.18.31 crore; 1 April 2015: Rs.35.84 crore) in HCC Infrastructure Company Limited (HIL), a subsidiary, which is holding 85.45% in HCC Concessions Limited (HCL), having various Build, Operate and Transfer (BOT) SPVs under its fold. While HCL has incurred losses during its initial years and consolidated net-worth as at 31 March 2017 has been fully eroded, the underlying projects are expected to achieve adequate profitability on substantial completion. The net-worth of this subsidiary does not represent its true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of the subsidiary is higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.

Note 58. ''Unbilled work-in-progress (Other current financial assets)'', ''Non-current trade receivables'' and ''Current trade receivables'' include Rs.911.80 crore (31 March 2016: Rs.97757 crore; 1 April 2015: Rs.1,181.29 crore), Rs.123.39 crore (31 March 2016: Rs.89.14 crore; 1 April 2015: Rs.149.00 crore) and Rs.90.30 crore (31 March 2016: Rs.116.94 crore; 1 April 2015: Rs.92.44 crore), respectively, outstanding as at 31 March 2017 represent various claims raised earlier, based on the terms and conditions implicit in the contracts and other receivables in respect of closed/suspended projects. These claims are mainly in respect of cost over-run arising due to client caused delays, suspension of projects, deviation in design and change in scope of work; for which Company is at various stages of negotiation/discussion with the clients or under arbitration. Noncurrent trade receivables also include arbitration awards received in favour of the Company, which have been subsequently set aside by District Court/ High Courts against which the Company has preferred appeals at High Courts/ Supreme Court and has been legally advised that it has good case on merits. Considering the contractual tenability, progress of negotiation/ discussion with the client, the management is confident of recovery of these receivables.

i) Classification of joint arrangements

The joint venture agreements in relation to the above mentioned joint operations require unanimous consent from all the parties for all relevant activities. All co-venturers have direct rights to the assets of the joint venture and are also jointly and severally liable for the liabilities incurred by the joint venture. These joint ventures are therefore classified as a joint operation and the Company recognizes its direct right to the jointly held assets, liabilities, revenue and expenses. In respect of these contracts (assessed as AOP under the Income tax laws), the services rendered to the joint ventures are accounted as income on accrual basis.

b) Joint operations on work sharing basis

Contracts executed in joint venture under work sharing arrangement (consortium) is set out below. The principal place of business of all these joint operations is in India The principal place of business of all these arrangements is in India and are engaged in construction business.

Classification of work executed on sharing basis

Contracts executed in joint venture under work sharing arrangement (consortium) is accounted to the extent work executed by the Company as that of an independent contract.

c) Jointly controlled entity (joint venture)

The Compan''s joint venture as at 31 March 2017 is set out below. It has share capital consisting solely of equity shares and the proportion of ownership interests held equals the voting rights held by the Company. The principal place of business of this joint venture is in India and is engaged in tolling operations.

Note 59 Disclosure relating to employee benefits as per Ind AS 19 ''Employee Benefits''

A Defined benefit obligations - Gratuity (unfunded)

The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the member''s length of service and salary at retirement age.

b) The expenses for leave entitlement and compensated absences is recognized in the same manner as gratuity and provision of Rs.15.31 crore (31 March 2016: Rs.14.68 crore; 1 April 2015: Rs.15.35 crore) has been made as at 31 March 2017

Note 60 Financial instruments

The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.

b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

Note 61 Financial risk management objectives and policies

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i Market risk

Market risk is the risk that the fair value of future cash flows of a financial Instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: Interest rate risk, currency risk and other price risk, such as equity price risk. Major financial Instruments affected by market risk Includes loans and borrowings.

a Interest rate risk

Majority of the long-term borrowings of the Company bear fixed Interest rate, thus Interest rate risk is limited for the Company.

b Foreign currency risk

The Company has several balances in foreign currency and consequently the Company is exposed to foreign exchange risk. The exchange rate between the rupee and foreign currencies has changed substantially in recent years, which has affected the results of the Company, and may fluctuate substantially in the future. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Sensitivity analysis

The Company''s exposure in foreign currency is not material and hence the impact of any significant fluctuation in the exchange rates is not expected to have a material impact of the operating profits of the Company.

c Equity price risk

The Company''s listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company''s senior management on a regular basis. The Company''s Board of Directors reviews and approves all equity investment decisions.

As at 31 March 2017, the exposure to listed equity securities at fair value was Rs.2.65 crore. A decrease of 10% on the NSE market index could have an impact of approximately Rs.0.27 crore on the OCI or equity attributable to the Company. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes would not have a material effect on the profit or loss of the Company.

ii Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure of the financial assets are contributed by trade receivables, unbilled work-in-progress, cash and cash equivalents and receivable from group companies.

a Credit risk on trade receivables and unbilled work-in-progress is limited as the customers of the Company mainly consists of the government promoted entities having a strong credit worthiness. For other customers, the Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled work-in-progress. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts receivable and the Company''s historical experience for customers.

The following table gives details in respect of percentage of revenues generated from government promoted agencies and others

Note 62 Financial risk management objectives and policies (Contd.)

For the year ended 31 March 2017, four (31 March 2016: three) customers, individually, accounted for more than 10% of the revenue.

The movement of the allowance for lifetime expected credit loss is stated below: ^A

Balance at the beginning of the year - -

Balance at the end of the year - -

^{^} The Company has written off Rs.35.97 crore and Rs.98.64 crore towards amounts not recoverable during the years ended 31 March 2017 and 31 March 2016, respectively.

b Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings.

iii Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.

Note 63 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so that they can maximize returns for the shareholders and benefits for other stake holders. The aim to maintain an optimal capital structure and minimize cost of capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with others in the industry, the Company monitors its capital using the gearing ratio which is total debt divided by total capital plus total debt.

In the long run, the Company''s strategy is to maintain a gearing ratio of less than 1.25.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements. Breaches in meeting the financial covenants would permit the lenders to immediately call loans and borrowings. Subsequent to restructuring of the borrowings as stated in note 16, there have been no communications from the banks in this regard which might have a negative impact on the gearing ratio.

Note 64 The Company is principally engaged in a single business segment viz. "Engineering and Construction" Also, refer note 40(ii) for information on revenue from major customers.

Note 65 Disclosure of unhedged foreign currency exposure as at 31 March 2017

Note 66* represents amount less than Rs.1 lakh.

---

Mar 31, 2016

1. The Company (Accounting Standards) Second Amendment Rules 2011 has amended the provision of Accounting Standard 11 relating to "The Effects of the Changes in Foreign Exchange Rates" vide notification dated 29 December 2011. In terms of these amendments, the Company has carried over long term monetary exchange gain of Rs. 4.19 crore (previous year Rs. 4.06 crore) through "Foreign Currency Monetary Translation Account", to be recognised over the balance period of such long term asset/ liability.

2. During the previous year ended 31 March 2015, consequent to the introduction of Schedule II to the Companies Act, 2013, the useful lives of certain fixed assets had been revised. Accordingly, Rs. 2.73 crore (net of deferred tax Rs. 1.31 crore) representing carrying value of the fixed assets with revised useful life as NIL were adjusted against opening balance of Statement of Profit and Loss as of 1 April 2014.

3. Corporate Debt Restructuring (CDR) Package

The Company received Letter of Approval (LOA) on 29 June 2012 issued by the Corporate Debt Restructuring Empowered Group (CDREG) approving the CDR package. The CDR related documents have been executed and creation of security stands completed.

4. Terms of repayment and details of security

I. Secured

(A) Debentures

i) Axis

On restructuring by the CDREG, these debentures are classified as RTL - 1. These debentures carry an interest yield of 11.50% p.a. in yield equalization and are repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. These are secured by way of registered mortgage over 231.66 acres of Lavasa land situated in 5 villages namely Village Admal, Bhode, Gadle, Padalghar and Ugavali in taluka Mulshi, District Pune, Maharashtra.

ii) LIC

On restructuring by CDREG, these debentures are classified as RTL-1. These debentures carry an interest yield of 11.50% p.a. in yield equalization and are repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. Refer Note 4.2.1 for security details.

(B) Rupee Term Loans 1 (RTL - 1) and RupeeTerm Loans 2 (RTL - 2)

RTL - 1 and RTL - 2 carry an interest yield of 11.50% p.a. in yield equalization and are repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. Refer Note 4.2.1 for security details.

(C) Working Capital Term Loan (WCTL - 1)

Working Capital Term Loan (WCTL - 1) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 16 quarterly instalments commencing 15 April 2014 and ending on 15 January 2018. Refer Note 4.2.1 for security details.

(D) Working Capital Term Loan (WCTL - 2)

Working Capital Term Loan (WCTL - 2) carries an interest rate ranging from 11.10% p.a. to 11.75% p.a. (floating) linked to Monitoring Institution''s base rate. These are repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. Refer Note 4.2.1 for security details.

(E) Other Term Loans

(i) Standard Chartered Bank - External Commercial Borrowings (ECB) USD 13.36 million

As at 31 March 2016, the ECB loan from Standard Chartered Bank carries an interest rate of 4.13% p.a. % (3 month LIBOR plus 350 basis points). This loan is repayable in 17 quarterly instalments commencing 15 April 2014 and ending on 15 March 2018. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation executed on 10 November 2009.

(ii) Development Bank of Singapore - ECB USD 10.18 million

As at 31 March 2016, the ECB loan from Development Bank of Singapore carries an interest rate of 4.48% p.a. (3 month LIBOR plus 385 basis points). This loan is repayable in 17 quarterly instalments commencing 5 October 2014 and ending on 5 October 2018. The facility is secured by first charge by way of hypothecation of plant and machinery and heavy vehicles acquired under the facility described in the schedule I (2) to the deed of hypothecation executed on 29 April 2010.

(iii) Toronto Dominion LLC - ECB USD 9.36 million

As at 31 March 2016, the ECB loan from The Toronto Domino Bank LLC carries an interest rate of 1.83% (3 month LIBOR plus 120 basis points). This loan is repayable in 35 equal quarterly instalments commencing 16 March 2011 and ending on 16 September 2019. The facility is secured by first priority mortgage and security interest to and in favour of Wilmington Trust Company (the security trustee) on one Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause 2.1 as per the Aircraft Charge Agreement executed on 6 January 2011.

(F) Funded Interest Term Loan (FITL)

FITL, carried an interest rate of 11.50% p.a., has been fully repaid during the year.

(G) Rupee Term Loans (RTL-A)

During the year ended 31 March 2016, the Company has received approval under Joint Lenders Forum mechanism to avail Rs. 350 crore term loan. The said facility carries interest rate of 11.75% p.a. (Individual Bank''s Base Rate Applicable Spread), payable monthly, to be reset annually with a two years moratorium and repayment terms of five years starting from financial year 2017-18. The said facility is having same security as RTL - 1 lenders under the CDR Loan. The security creation would be done as per stipulated time frame.

II. Unsecured

A) Term Loan from Industrial Finance Corporation of India Limited (IFCI)

The loan carries an interest rate of 11.50% p.a. This loan is repayable in 31 quarterly instalments commencing 15 April 2014 and ending on 15 October 2021. IFCI has joined CDR package by signing Deed of Accession on 8 March 2016 and have right to security that is same as RTL-2 lenders.

B) FITL from Other Parties

FITL, carried an interest rate of 11.50% p.a. and has been fully repaid during the year.

3.3.1 RTL - 1, RTL - 2, WCTL - 1 and WCTL - 2 are secured in the form of:

1. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village,

Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

4. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

5. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and ''Additional Assets'' have been defined in the Master Restructuring Agreement (MRA).

The above security having ranking in respect to RTL - 1, WCTL - 1 and RTL - A are as below:

1. A first ranking and pari passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

The above security having ranking in respect to RTL - 2 and WCTL - 2 are as below:

A second ranking and pari passu security interest by way of legal mortgage over all the Mortgaged Properties.

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore, against which HRELs outstanding amount is Rs. 8,800.11 crore (Previous year: Rs. 8,464.98 crore).

2. Pledge of 200,703,600 equity shares of the Company held by Hincon Holdings Limited.

3. Personal guarantee of Mr. Ajit Gulabchand, Chairman and Managing Director

3.3.2 Loan principal amounting to Rs. 34.11 crore (Previous year:

Rs. 66.38 crore) and the interest amount of Rs. 28.20 crore (Previous year: Rs. 58.24 crore) which is due and outstanding to be paid as at 31 March 2016 pertains to the period from October 2015 to March 2016. Out of this, principal amounting to Rs. 21.87 crore and interest amounting to Rs. 1.35 crore have been subsequently paid.

3.4 MRA as well as the provisions of the Master Circular on

Corporate Debt Restructuring issued by the Reserve Bank of India, give a right to the CDR Lenders to get a recompense of their waivers and sacrifices made as part of the CDR Proposal. The recompense payable by the borrowers depends on various factors including improved performance of the borrowers and other conditions. The aggregate present value of the sacrifice made/ to be made by CDR Lenders as per the MRA is Rs. 209.76 crore (Previous year: Rs. 205.66 crore) as at 31 March 2016.

Note 7.1 Security for Cash Credit Facilities, Working Capital Demand Loan and Buyer''s Credit:

1. The parcel of land (immovable non-residential property) admeasuring 22 acres and 24 gunthas at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding ''Current Assets'' and ''Specified Assets'') as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of ''Additional Assets'') as the Third Mortgaged Properties.

4. All of the ''Additional Assets'' collectively referred to as the Fourth Mortgaged Properties.

5. All of the ''Specified Assets'' collectively referred to as the Fifth Mortgaged Properties.

The terms ''Current Assets'', ''Specified Assets'' and ''Additional Assets'' have been defined in the MRA.

The above security having ranking as below:

1. A first ranking and pari passu security interest by way of legal mortgage over the Third and Fourth Mortgaged Properties.

2. In the form of a second ranking and pari passu security interest by way of a legal mortgage over the First, Second and the Fifth Mortgaged Properties.

Collateral security pari-passu with all CDR lenders are same as indicated in Note 4.2.1

The Company has provided first charge over specific fixed assets (having WDV of Rs. 50 crore) of the Company for the loan extended by Export Import Bank of India (EXIM Bank) to HCC Mauritius Enterprise Limited through Loan Agreement dated 27 September 2010. The same security has also been extended for the loan of USD 25 million given by EXIM Bank to HCC Mauritius Investment Limited.

YES Bank, the lender of HCC Infrastructure Company Limited, a subsidiary company is having subservient charge on identified receivables of the Company. YES Bank issued NOC on 4 September 2012 for ceding first charge in favour of working capital lenders and second charge in favour of term lenders.

The securities towards working capital facilities also extend to guarantees given by the banks on behalf of the Company.

Note 12.1 During the year ended 31 March 2016, the Company divested 26% equity stake in VCPPL for an aggregate consideration of Rs. 90.03 crore out of which the Company has received Rs. 77.03 crore resulting in gain of Rs. 72.16 crore. Balance Rs. 13 crore will be realised and accounted for on fulfilment of certain conditions.

Note 26.1 In respect of year ended 31 March 2014, the Company''s request for remuneration in excess of the limit prescribed and held in trust, to the Ministry of Corporate Affairs (the ''Ministry''), to reconsider their approval of Rs. 1.92 crore against the entire remuneration of Rs. 10.66 crore paid to the Chairman and Managing Director (CMD), is pending with the Ministry.

Note 26.2 In respect of year ended 31 March 2015, the Company has provided for remuneration for CMD of Rs. 10.66 crore. The Company has made an application to the Ministry seeking its approval for payment of Rs. 10.66 crore which is in excess of the limits specified under Schedule V to the Companies Act, 2013.

Note 26.3 In respect of year ended 31 March 2016, the Company''s application to the Ministry for approval of remuneration paid/ payable Rs. 10.66 crore to the CMD which is in excess of the limit prescribed and held in trust, is pending with the Ministry.

Note 26.4 The Draft Companies (Amendment) Act, 2016 proposes that waiver of the recovery of any excess amount of managerial remuneration can be approved by the Company by special resolution within specified period after obtaining approval of such waiver from secured creditors of the Company (till now permissible only with approval of Central Government). The Draft also proposes that any application made to the Central Government under section 197 and which is pending with the Government shall abate and the Company shall obtain the approval as per amended provision within one year of commencement of Companies (Amendment) Act, 2016.

Note 32(a) The Company, as at 31 March 2016, has (i) an investment amounting to Rs. 474.36 crore (31 March 2015: Rs. 474.36 crore), long term loans and advances Rs. 443.96 crore (31 March 2015: Rs. 404.06 crore), other non-current assets Rs. 19.43 crore (31 March 2015: Rs. 25.01 crore) and other current assets Rs. 5.07 crore (31 March 2015: Rs. 3.43 crore) in HCC Real Estate Limited (HREL) which is holding 68.70% share in Lavasa Corporation Limited (LCL) and (ii) an investment amounting to Rs. 0.01 crore (31 March 2015: Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (31 March 2015: Nil), other non-current assets Rs. 13.08 crore (31 March 2015: Rs. 14.30 crore) and other current assets Rs. 8.28 crore (31 March 2015: Rs. 77.24 crore) in LCL. While such entities have incurred losses during its initial years and consolidated net-worth of all these entities as at 31 March 2016 has been substantially/ fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values, hence net-worth of these subsidiaries does not represent its true market value. Therefore, the decline in the value of above investments is considered to be temporary in nature and the loans and advances, other non-current assets and other current assets together with the interest thereon are good and recoverable.

Note 32(b) The Company, as at 31 March 2016, has an investment amounting to Rs. 0.25 crore (31 March 2015: Rs. 0.25 crore), long term loans and advances Rs. 984.82 crore (31 March 2015: Rs. 634.81 crore), other non-current assets Rs. 127.48 crore (31 March 2015: Rs. 283.80 crore) and other current assets Rs. 18.31 crore (31 March 2015: Rs. 35.84 crore) in HCC Infrastructure Company Limited (HIL) which is holding 85.45% in HCC Concession Limited having various Build, Operate and Transfer (BOT) SPVs under its fold. While this entity has incurred losses during its initial years and consolidated net-worth as at 31 March 2016 has been fully eroded, the underlying projects are in the early stages of development and are expected to achieve adequate profitability on substantial completion, hence net-worth of this subsidiary does not represent its true market value. Therefore, the decline in the value of above investment is considered to be temporary in nature and the loans and advances, other non-current assets and other current assets together with the interest thereon are good and recoverable.

Note 33 Uncompleted Contracts and Value of Work Done (Inventories)'' and ''Long-Term Trade Receivables'' includes Rs. 978 crore (Previous year: Rs. 1,181 crore) and Rs. 206 crore (Previous year: Rs. 241 crore), respectively, outstanding as at 31 March 2016 representing various claims raised earlier, based on the terms and conditions implicit in the contracts and other receivables in respect of closed/suspended projects. These claims are mainly in respect of cost over-run arising due to client caused delays, suspension of projects, deviation in design and change in scope of work; for which Company is at various stages of negotiation/discussion with the clients or under arbitration. These receivables also includes Rs. 89 crore (Previous year: Rs. 149 crore) of arbitration awards received in favour of the Company, which have been subsequently set aside by District Court/ High Courts against which the Company has preferred appeals at High Courts/ Supreme Court and has been legally advised that it has good case on merits. Considering the contractual tenability, progress of negotiation/ discussion with the client, the management is confident of recovery of these receivables.

Note 34 The Company has a single segment namely "Engineering & Construction" Therefore, the Company''s business does not fall under different business segments as defined by Accounting Standard 17 - "Segmental Reporting" referred to in Section 133 of the Companies Act, 2013.

Note 40 Pursuant to Shareholders Agreement (SHA) executed on 9 August 2011, the Company is required to hold 100% equity stake in HCC Infrastructure Company Limited (HIL) until Private Equity Investor gets an exit from HCC Concessions Limited (HCL) through means as specified in the SHA and there are certain other customary restrictions on pledging / creation of any encumbrance over shares / assets of HIL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highways Limited, Farakka - Raiganj Highways Limited., Dhule Palesner Tollways Limited and Raiganj - Dalkhola Highways Limited to National Highways Authority of India (NHAI) that it will not transfer its shareholding till the commercial operation date. The Company has entered into sale agreement with HCL to sell these shares at book value at future dates on fulfilment of that obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs. 27.70 crore (Previous year: Rs. 45.58 crore) for transfer of the above shares at book value from HCL, subject to necessary approvals and consents to the extent required in the following BOT SPV''s. During the year ended 31 March 2016, the Company has transferred 17,882,700 equity shares in Dhule Palesner Tollways Limited to HCL at book value.

Note 41.2 The obligation for leave entitlement and compensated absences is recognized in the same manner as gratuity and provision of Rs. 14.67 crore (Previous year: Rs. 15.35 crore) has been made as on 31 March 2016.

Note 5. Information required for the current year and previous years as per Para 120(n) of AS15 (Revised)

Note 6. Trade Receivable includes Rs. 2,668.90 crore (Previous year: Rs. 1,772.16 crore) on account of claims awarded in arbitration in favour of the Company which has been challenged by the client in High Courts/ Supreme Court.

Note 7. *represents amount less than Rs. 1 lakh.

Note 8. Previous year figures have been regrouped or reclassified, to conform to the current year''s presentation wherever considered necessary.

---

Mar 31, 2014

1. The Company (Accounting Standards) Second Amendment Rules 2011 has amended the provision of AS-11 relating to "The Effects of the Changes in Foreign Exchange Rates" vide notification dated 29th December 2011. In terms of these amendments, the Company has carried over long term monetary exchange gain of Rs.4.29 crore (previous year Rs.0.31 crore) through "Foreign Currency Monetary Items Translation Difference Account", to be recognised over the balance period of such long term asset/ liability.

Note 4 Money received against share warrants

The Company has allotted 39,215,686 warrants convertible into 39,215,686 Equity Shares of Rs.1/- each at a price of Rs.16.32 per Equity Share to the Promoters of the Company (Hincon Holdings Ltd. & Hincon Finance Ltd.) on June 2 7, 2013 in compliance with Chap VII of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009. The warrant holders shall be entitled to exercise the option to apply for the Equity Shares against the warrants within a period of 18 months from the date of allotment of the said warrants. As per the terms, the company has appropriated 25% of the issue price aggregating to Rs.16 crore from the unsecured loan from promoters.

2. Additional Information to Secured/Unsecured Long Term Borrowings:

The long term portion of debentures and term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under the current liabilties as per the disclosure requirements of the Revised Schedule VI.

3. Details of Securities and Terms of repayment

The Company received Letter of Approval (LOA) on 29th June,2012 issued by Corporate Debt Restructuring Empowered Group (CDREG) approving CDR package. As on 31st March 2014, the package has been implemented. The CDR related documents have been executed and security creation stands completed.

I. Secured

(A) Debentures

1) Axis NCD

Security created by way of registered mortgage over 231.6628 acres of Lavasa land situated in 5 villages namely Village Admal, Bhode, Gadle, Padalghar and Ugavali in taluka Mulshi, District Pune, Maharashtra. On restructuring by CDR, above debentures are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization.

2) LIC NCD

On restructuring by CDR, above debentures are classified as RTL- 1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. LIC NCD''s are secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties.

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below;

1. a first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties

2. a second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties"

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(B) Rupee Term Loans (RTL-1)

On restructuring by CDR, above loans are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties."

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties

The above security having ranking as below;

1. a first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. a second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(C) Rupee Term Loans (RTL-2)

On restructuring by CDR, above loans classified as RTL-2 are repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-2 is secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties

The above security having ranking as below;

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(D) (1) Working Capital Term Loan (WCTL-1)

On restructuring by CDR, Commercial Paper of Central Bank of India has been classified as WCTL-1 repayable in 16 quarterly installments commencing from April 15, 2014 and ending on January 15, 2018, having 11.75% p.a. linked to monitoring institution''s base rate. WCTL-1 is secured in form of;

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties

The above security having ranking as below;

1. A first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties

2. A second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(D) (2) & (3) Working Capital Term Loan (WCTL-2)

On restructuring by CDR, Commercial Paper of NABARD & Federal Bank has been classified as WCTL-2 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having 11.75% p.a. .linked to monitoring institution''s base rate. WCTL-2 is secured in form of;

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties

The above security having ranking as below;

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

4. Other Term Loans

Standard Chartered Bank- ECB USD 13.77 million

Outstanding ECB of USD 13.77 million has been restructured with repayment of 17 quarterly installments starting from 15th April 2014 till 15th March 2018 having interest rate of 3 months LIBOR plus 350 basis points. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation executed on 10th November 2009.

Development Bank of Singapore - ECB USD 10.38 million

Outstanding ECB of USD 10.38 million has been restructured with repayment of 17 quarterly installments starting from 5th October 2014 till 5th October 2018 having interest rate of 3 months LIBOR plus 385 basis points. The facility is secured by first charge by way of hypothecation of plant and machineries and heavy vehicles acquired under the facility described in the schedule I(2) to the deed of hypothecation executed on 29th April 2 010 .

Toronto Dominion LLC - USD 10.83 mn

The facility is secured by first priority mortgage and security interest to and in favor of Wilmington Trust Company (the security trustee) on one (1) Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause no.2.1 as per the Aircraft Charge Agreement executed on January 6, 2011. The FC loan is repayable in 22 equal quarterly installments of apprx. Rs.2.96 crore each having period of maturity w.r.t. the balance sheet date is 5.5 years. The loan has interest rate of 3 month Libor plus 120 basis points.

5. Funded Interest Term Loan

On restructuring by CDR, balance FITL of Rs.109.83 crore repayable in 6 equal quarterly installments from April 15, 2014 to July 15, 2015 having interest 11.25% p.a. .linked to monitoring institution''s base rate. FITL pertaining to RTL-1 and RTL-2 is secured as per security being offered to RTL-1 and RTL-2.

II. Unsecured

B) Term Loans from Other Party:

IFCI - Unsecured loan of Rs. 150 crore

The loan has been restructured, repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest rate of 11.5% p.a.

C) Funded Interest Term Loan

On restructuring, balance IFCI FITL of Rs.9.71 crore is repayable in 6 equal quarterly installments commencing from April 15, 2014 and ending on July 15, 2015 having interest of 11.5% p.a.

I. Secured

Loans repayable on demand

1. Cash Credit Limits

On restructuring by CDR, working capital (WC) facilities are chargeable at interest rate of 11.75% p.a. linked to monitoring institution''s base rate. WC is secured in form of;

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties.

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below;

1. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

2. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties"

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

Standard Chartered Bank–WCDL of Rs. 50 crore

The facility carries interest rate of 11.5% p.a. secured in form of;

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara Village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the Specified Assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of Additional Assets) as the Third Mortgaged Properties.

4. All of the Additional Assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the Specified Assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below;

1. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

2. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

Yes bank is having subservient charge on identified receivables. Yes Bank issued NOC dated 4th Sept''12 for ceding first charge in favour of Working Capital Lenders and second charge in favour of Term Lenders.

6. Inter Corporate Deposits are repayable on demand and interest is charged at market rates except interest free loan to the tune of Rs.294.27 crore (Previous year Rs.309.40) to HCC Real Estate Ltd.

7. Loans and Advances include an amount due from an Officer of the Company Rs.NIL (previous year Rs.0.02 crore). Maximum amount outstanding for the period Rs.0.02 crore (previous year Rs.0.05 crore).

8. Sub-contract, transportation, hire etc. include insurance Rs.39.34 crore (previous year Rs.38.48 crore), rates and taxes Rs.204.36 crore (previous year Rs.168.59 crore ) and lease rent Rs.20.80 crore (previous year Rs.27.39 crore ).

9. Light vehicle expenses grouped under construction expenses include insurance Rs.1.51 crore (previous year Rs.1.91 crore) and taxes Rs.0.10 crore (previous year Rs.0.21 crore).

10. Remuneration paid to Chairman & Managing Director is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 by Rs.10.18 crore (previous year Rs.10.18 crore). The Company has made an application seeking approval from Central Government. Approval for both the years is awaited.

11. In accordance with Accounting Standard 11 (Revised) the net exchange Loss debited to Statement of Profit & Loss is Rs.13.85 crore (previous year Loss Rs.14.57 crore).

12. The Income-tax assessments of the Company have been completed upto the accounting year ended 31st March, 2010. Few appeals preferred by the Company are pending before appellate authorities.

13. Company has invested Rs.474.36 crore in HCC Real Estate Ltd. (HREL) and the outstanding balance of loans and advances as on 31st March 2014 amounts to Rs.391.77 crore. The consolidated networth of HREL as on 31st March, 2014 is Rs.(18.38) crore. Considering the intrinsic value of the assets of the business under the fold of HREL such as LAVASA etc, wherein, the potential of market appreciation over book value is substantially high, the net worth of HREL does not represent its true market value. The diminution is of temporary nature and the loans together with interest accrued thereon are good and recoverable.

14. Company has also invested in HCC Infrastructure Ltd. (HIL) Rs.0.25 crore and there are outstanding loans and advances of Rs.842.76 crore as of 31st March, 2014. The consolidated networth of HIL as on 31st March 2014 is Rs.(193.33) crore. HIL is engaged in the business of building infrastructure on BOT( Build, Operate and Transfer) basis through specific SPVs for each projects under HCC Concessions Ltd. These BOT projects do takes beyond 15 to 20 years to unlock its true potential. These businesses also generate captive construction contracts to the Parent company. Therefore the diminution in the value of HCC Infrastructure Ltd. is temporary in nature and the Loans given together with the interest thereon are good and recoverable.

15. Uncompleted Contracts and Value of Work Done, Long Term Trade Receivable and Short Term Loans and Advances as at 31st March, 2014 include claims of Rs.445.53 crore, Rs.34.33 crore and Rs.38.50 crore respectively .These claims and receivables are overdue for long period and mainly in respect of certified work done, cost over-run arising due to client caused delays, deviation in design and change in scope of work; for which Company is at various stages of negotiation/discussion with the clients or under arbitration on a continuing basis. Considering the contractual tenability, progress of negotiation/discussion with client and based on the past experience of the Company, the management is reasonably confident of the recovery of the same.

16. In compliance with the Accounting Standards as applicable to its nature of business, the company has been recognizing the Revenue, on receipt of favorable Arbitration Awards on its claims including interest as awarded from time to time. The aggregate amount outstanding in the books as of 31st March, 2014 is Rs.1299.68 crore (previous year Rs.737.05 crore). Five of such Arbitration Awards were set-aside by different courts, such as Dist Court/High Courts aggregating to Rs.105.44 crore (previous year Rs.105.44crore) (excluding interest of 12% from the date of 13th feb, 2004 on one of the award amounting to Rs.17.81 crore), on appeal by clients. On examining the merits of the claims/ Arbitration Awards/Court Judgments, the company has preferred Appeals at Higher Court/Supreme Court as the case may be. Under the circumstances, the company has been legally advised that it has good case on merits and therefore no provision considered necessary.

17. Trade Receivable and Uncompleted Contracts and Value of Work Done (net of client advances) as at 31st March, 2014 include Rs.17.55 crore and Rs.18.24 crore in respect of a project which has been handed over to the client and Rs.3.41 crore and Rs.29.95 crore in respect of two projects for which work has been suspended by client. The company is in continuous dialogue with the client and also contemplating appropriate legal action for realization of these dues. Management is reasonably confident of recovery of these amounts.

18. In respect of certain projects, client has recovered from work bills, Building and Labour cess as per the provisions of "Building and Other Construction Workers ( Regulation of Employment and Conditions of Service) Act, 1996". Company has claimed these amount from clients as per the provisions of the Contract, being levy made applicable subsequent to award of the contract as this incidence of expenditure was not part of tender/contract. Total amount outstanding on this account as of 31st March is Rs.33.14 crore (previous year Rs.32.99 crore). These amounts are under discussion/referred to Arbitration as the case may be, and based on legal opinion are considered as recoverable in due course of time.

19. The Company has a single segment namely "Engineering & Construction". Therefore, the Company''s business does not fall under different business segments as defined by Accounting Standard 17- "Segmental Reporting" referred to in subsection (3C) of section 211 of the Companies Act, 1956.

20. Disclosure in accordance with Accounting Standard - 7 ( Revised) - Amount due from / to customers on Construction Contracts.

21. Disclosure of derivative instruments and unheeded foreign currency exposure as at balance sheet date

(a) Derivatives outstanding as at the reporting date

22. Private Equity Investment and Consolidation of BOT SPVs

During the year 2011-12, HCC transferred it''s equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

Pursuant to Shareholders Agreement (SHA) executed on 9th August 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs.240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) In the event the entire shareholding of any of the Group Entities listed at Annexure 2.10 is not sold and transferred to the Company within the time periods set forth at Section 2.10, the Investor shall have the right to seek conversion of all or part of the CCPSs held by it into Equity Shares in accordance with the formula set forth at Annexure 2.14 to increase in the Shareholding of the Investor in the Company. The Investor may exercise its right to seek conversion under this sub-section, anytime within 2 (two) years from the Transfer Date..

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd., Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd., and Raiganj - Dalkhola Highway Ltd. to NHAI, it will not transfer its shareholding till the commercial operation date The company has entered into sales agreement with HCC Concession Ltd. to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The company has received advance consideration of Rs.42.64 crore for transfer of the above shares at book value from HCC Concession Ltd., subject to necessary approvals and consents to the extent required in the following BOT SPV''s:

23. Company has acquired 66% stake in Steiner AG on 5th May 2010 through HCC Mauritius Enterprises Ltd. During the year, the company has acquired balance stake of 34% in Steiner AG on 7th February 2014 through its wholly owned subsidiary HCC Mauritius Investment Ltd.

24. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD) convertible into ordinary shares. The particulars including the current status, terms of issue as at 31st March, 2014 are given below:

i) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") – Tranche

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 6th November, 2009.

ii) IndusInd Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date 10th July, 2009.

iii) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") – Tranche 1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 6 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 13th December, 2008.

iv) Bank of India has subscribed Rs.150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). In FY 2010-11 the Company had prepaid Rs.90 crore of subscribed value of DDCD. As on the date of the balance sheet, the Company has Rs.60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 26th September, 2008. It was repaid during the year.

(b) Lavasa Corporation Limited a subsidiary, has issued Non Convertible Debentures (NCD). The particulars, terms of issue as at 31st March, 2014 are given below:

i) Jammu & Kashmir Bank Limited had subscribed Rs.100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On 3rd September 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs.1 0 0 crore for the tenor of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date 13th May, 2010.

ii) ICICI Bank has converted Rs.250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

iii) Bank of India has subscribed Rs.105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs.10,00,000 each on 19th November 2010 for the tenor of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date 19th November, 2010. It was repaid during the year.

iv) Axis Bank has converted Rs.225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. During the year Company had prepaid NCD having face value of Rs.100 crore. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013. It was repaid during the year.

25. Figures for the previous year have been regrouped/recast, wherever necessary.

26. represents amount less than Rs.100,000.

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Mar 31, 2013

A Terms/rights attached to shares:

The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.

b Shares reserved for issue under options :

There are 6,154,080 (previous year 6,462,960) stock options outstanding convertible into 6,154,080 (previous year 6,462,960) equity shares of Rs. 1/- each, the same are convertible at an exercise price of Rs. 52.03 per share.

During the current year, none of the Options were exercised / converted into Equity Shares (previous year 77,500 at an exercise price of Rs. 21.70). There were 308,880 (previous year 557,040) stock options that got lapsed during the current year.

c. Employees Stock Option Scheme:

i. Options granted

a) The Company offered 4,458,800 Stock Options on April 25, 2008 (each option carrying entitlement for one equity share of the face value of Rs. 1/- each) at a price of Rs. 132.50 per equity share. Out of the total Stock Options offered, 898,180 have been lapsed on account of resignation / retirement by employees.

In accordance with the approval of the Board of Directors and shareholders of the Company, the ESOP compensation committee at its meeting held on July 20, 2009 had repriced 4,131,600 options at Rs. 104.05 per equity share.

b) The ESOP Compensation Committee at its meeting held on October 23, 2008 granted 193,750 options at an exercise price of Rs. 43.40 per equity share.

The ESOP Compensation Committee of the Company at its meeting held on August 12, 2010 has decided to double the number of employee stock options (vested and unvested but not exercised and in-force as on the Record Date i.e. August 11, 2010) and halved the exercise price on account of issuance and allotment of Bonus Equity Shares in the proportion of 1:1.

Accordingly, 3,553,760 employee stock options in-force granted by the Company on April 25, 2008 have been doubled i.e. 7,107,520 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 104.05 to Rs. 52.03 and 193,750 employee stock options granted by the Company on October 23, 2008 have been doubled i.e. 387,500 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 43.40 to Rs. 21.70.

f. Bonus Shares/ Buy Back/Shares for consideration other than cash issued during past five years:

(i) Aggregate number and class of shares allotted as fully paid-up pursuant to contracts without payment being received in cash:

Nil

(ii) Aggregate number and class of shares allotted as fully paid-up by way of Bonus Shares:

303,256,460 Equity Shares were issued as fully paid Bonus Shares by capitalisation of Securities Premium Reserve on August 12, 2010.

(iii) Aggregate number and class of shares bought back:

Nil

1.1 The Company(Accounting Standards) Second Amendment Rules 2011 has amended the provision of AS-11 relating to "The Effects of the Changes in Foreign Exchange Rates" vide notification dated December 29, 2011. In terms of these amendments, the Company has carried over long term monetary exchange gain of Rs. 0.31 crore (previous year loss of Rs. 5.32 crore) through "Foreign Currency Monetary Items Translation Difference Account", to be recognised over the balance period of such long term asset/ liability.

2.1 Additional Information to Secured/Unsecured Long Term Borrowings:

The long term portion of debentures and term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under the current liabilties as per the disclosure requirements of the Revised Schedule VI.

2.2 Detail of Securities andTerms of repayment

The Board of Directors of HCC in its meeting held on March 9, 2012 had accorded its approval for realignment of the debts of the Company under Corporate Debt Restructuring Mechanism of the Reserve Bank of India. CDR Empowered Group (CDREG) in its meeting held on March 29, 2012 has admitted the Company under CDR. CDREG issued Letter of Approval (LOA) on June 29, 2012. As on March 31, 2013, CDR package related documents have been executed and security creation stands completed.

I. Secured

(A) Debentures

On restructuring by CDR, above debentures are classified as RTL- 1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(B) Rupee Term Loans (RTL-1)

On restructuring by CDR, above loans are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(C) Rupee Term Loans (RTL-2)

On restructuring by CDR, above loans classified as RTL-1 are repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(D) (1) Working CapitalTerm Loan (WCTL-1)

On restructuring by CDR, Commercial Paper Loan of Central Bank of India has been classified as WCTL-1 repayable in 16 quarterly instalments commencing from April 15, 2014 and ending on January 15, 2018, having interest rate 11.5% p.a. linked to monitoring institution''s base rate. WCTL-1 is secured in form of:

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. A second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(D) (2) & (3) Working Capital Term Loan (WCTL-2)

On restructuring by CDR, Commercial Paper loan of NABARD & Federal Bank has been classified as WCTL-2 repayable in 31 quarterly instalments commencing from April 15, 2014 and ending on October 15, 2021, having 11.5% p.a. linked to monitoring institution''s base rate. WCTL-2 is secured in form of:

1. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

3. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(E) Other Term Loans

Standard Chartered Bank- ECB USD 13.77 million Outstanding ECB of USD 13.77 million has been restructured with repayment of 18 quarterly installments starting from April 15, 2014 till March 15, 2018 having interest rate of 3 months LIBOR plus 350 basis points. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the First Schedule to the memorandum of hypothecation executed on November 10, 2009.

Development Bank of Singapore - ECB USD 10.34 million Outstanding ECB of USD 10.38 million has been restructured with repayment of 17 quarterly installments starting from October 5, 2014 till October 5, 2018 having interest rate of 3 months LIBOR plus 385 basis points. The facility is secured by first charge by way of hypothecation of plant and machineries and heavy vehicles acquired under the facility described in the schedule I(2) to the deed of hypothecation executed on April 29, 2010.

Toronto Dominion LLC - USD 12.80 mn

The facility is secured by first priority mortgage and security interest to and in favour of Wilmington Trust Company (the security trustee) on one (1) Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause no.2.1 as per the Aircraft Charge Agreement executed on January 6, 2011. The Foreign currency loan is repayable in 26 equal quarterly instalments of apprx. Rs. 2.68 crore each, having period of maturity w.r.t the Balance Sheet date is 6.5 years. The loan has interest rate of 3 month LIBOR plus 120 basis points.

(F) Funded Interest Term Loan (FITL)

On restructuring by CDR, FITL of Rs. 156.38 crore repayable in 8 equal quarterly instalments commencing from October 15, 2013 and ending July 15, 2015 having interest rate 11% p.a. linked to monitoring institution''s base rate. FITL pertaining to RTL-1 and RTL-2 is secured as per security being offered to RTL-1 and RTL-2.

II. Unsecured

B) Term Loans from Other Party

IFCI - Unsecured loan of Rs. 150 crore

The loan has been restructured, repayable in 31 quarterly instalments commencing from April 15, 2014 and ending on October 15, 2021, having interest rate of 11.5% p.a.

C) Funded Interest Term Loan (FITL)

On restructuring, IFCI FITL of Rs. 12.95 crore is repayable in 8 equal quarterly instalments commencing from October 15, 2013 and ending on July 15, 2015 having interest of 11.5% p.a.

I. Secured

Loans repayble on demand

1. Cash Credit Limits

On restructuring by CDR, working capital (WC) facilities are chargeable at interest rate of 11.5% p.a. linked to monitoring institution''s base rate. WC is secured in form of:

i. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

ii. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

iii. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

iv. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

v. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

i. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

ii. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders:

i. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore

ii. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd

iii. Personal guarantee of Mr. Ajit Gulabchand

5. Standard Chartered Bank-WCDL of Rupees 50 crore

The facility carries interest rate of 11.5% p.a. secured in form of:

i. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

ii. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

iii. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

iv. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

v. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

i. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

ii. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders:

i. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore

ii. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd

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

4.1 Company has invested Rs. 474.36 crore in HCC Real Estate Ltd. (HREL) and the outstanding balance of loans and advances as on March 31, 2013 amounts to Rs. 347.29 crore. The consolidated networth of HREL as on March 31, 2013 is Rs. 123.39 crore. Considering the intrinsic value of the assets of the business under the fold of HREL such as LAVASA etc, wherein, the potential of market appreciation over book value is substantially high, the networth of HREL does not represent its true market value. The diminution is of temporary nature and the loans together with interest accrued thereon are good and recoverable.

4.2 Company has also invested in HCC Infrastructure Ltd. (HIL) Rs. 0.25 crore and there are outstanding loans and advances of Rs. 736.08 crore as of March 31, 2013. The consolidated networth of HIL as on March 31, 2013 is Rs. (153.39) crore. HIL is engaged in the business of building infrastructure on BOT( Build, Operate and Transfer) basis through specific SPVs for each projects under HCC Concessions Ltd. These BOT projects do takes beyond 15 to 20 years to unlock its true potential. These businesses also generate captive construction contracts to the Parent Company. Therefore the diminution in the value of HCC Infrastructure Ltd. is temporary in nature and the Loans given together with the interest thereon are good and recoverable.

5.1 In compliance with the Accounting Standards as applicable to its nature of business, the Company has been recognizing the Revenue, on receipt of favourable Arbitration Awards on its claims including interest as awarded from time to time. The aggregate amount outstanding in the books as of March 31, 2013 is Rs. 737.05 crore. Five of such Arbitration Awards were set-aside by different courts, such as Dist Court/High Courts aggregating to Rs. 105.44 crore(previous year Rs. 35.50 crore) (excluding interest of 12% from the date of February 13, 2004 on one of the award amounting to Rs. 17.81 crore), on appeal by clients. On examining the merits of the claims/Arbitration Awards/ Court Judgments, the Company has preferred Appeals at Higher Court/ Supreme Court as the case may be. Under the circumstances, the Company has been legally advised that it has good case on merits and therefore no provision considered necessary.

6.1 In respect of certain projects, client has recovered from work bills, Building and Labour cess as per the provisions of "Building and Other Construction Workers ( Regulation of Employment and Conditions of Service) Act, 1996" Company has claimed these amount from clients as per the provisions of the Contract, being levy made applicable subsequent to award of the contract as this incidence of expenditure was not part of tender/contract. Total amount outstanding on this account as of March 31, 2013 is Rs. 32.99 crore. These amounts are under discussion/referred to Arbitration as the case may be, and based on legal opinion are considered as recoverable in due course of time.

6.2 Inter Corporate Deposits are repayable on demand and interest is charged at market rates except interest free loan to the tune of Rs. 309.40 crore (Previous year Rs. 309.40) to HCC Real Estate Ltd w.e.f. 2012.

6.3 Loans and Advances include an amount due from an Officer of the Company Rs. 0.02 crore (previous year Rs. 0.05 crore). Maximum amount outstanding for the period Rs. 0.05 crore (previous year Rs. 0.07 crore).

7.1 Sub-contract, transportation, hire etc. include insurance Rs. 38.48 crore (previous year Rs. 36.24 crore), rates and taxes Rs. 210.82 crore (previous year Rs. 168.59 crore ) and lease rent Rs. 27.16 crore (previous year Rs. 27.39 crore).

7.2 Light vehicle expenses grouped under construction expenses include insurance Rs. 1.14 crore (previous year Rs. 1.91 crore) and taxes Rs. 0.21 crore (previous year Rs. 0.17 crore).

7.3 The Company has taken various construction equipments and vehicles under non cancellable operating leases. The future minimum lease payments in respect of these as at March 31, 2013 are as follows.

8.1 Remuneration paid to Chairman & Managing Director is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 by Rs. 10.18 crore (previous year Rs. 7.63 crore). The Company has made an application seeking approval from Central Government. Approval for both the years is awaited.

9.1 In accordance with Accounting Standard 11 (Revised) the net exchange Loss debited to Profit & Loss Account is Rs. 14.57 crore (previous year Loss Rs. 9.53 crore).

10. Private Equity Investment and Consolidation of BOT SPVs

During the year 2011-12, HCC transferred it''s equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

Pursuant to Shareholders Agreement (SHA) executed on August 9, 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs. 240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) in the event if the entire shareholding of all the group entities i.e Barahpore Farakka Highway Ltd, Farakka Raiganj Highway Ltd, Raiganj Dhalkola Highway Ltd. and Dhule Palesner Tollway Ltd. has not been sold and transferred by HCC to HCC Concession Ltd within the period of 20 months from the date of transfer date.

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd, Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd, and Raiganj - Dalkhola Highway Ltd. to NHAI till the commercial operation date The Company has entered into sales agreement with HCC Concession Ltd. to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs. 38.00 crore for transfer of the above shares from HCC Concession Ltd.

11. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD) convertible into ordinary shares. The particulars including the current status, terms of issue as at March 31, 2013 are given below:

i) Allahabad Bank has subscribed Rs.50 crore in the form of

Deep Discount Convertible Debentures ("DDCD") - Tranche

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

ii) IndusInd Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iii) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Tranche 1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

iv) Bank of India has subscribed Rs.150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). During the previous year the Company had prepaid Rs.90 crore of subscribed value of DDCD. As on the date of the balance sheet, the Company has Rs.60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

(b) Lavasa Corporation Limited a subsidiary, has issued Non Convertible Debentures (NCD). The particulars, terms of issue as at March 31, 2013 are given below

i) Jammu & Kashmir Bank Limited had subscribed Rs.100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On September 3, 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs. 100 crore for the tenure of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date.

ii) ICICI Bank has converted Rs.250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

iii) Bank of India has subscribed Rs.105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs.1,000,000 each on November 91, 2010 for the tenure of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date.

iv) Axis Bank has converted Rs.225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013.

12. Figures for the previous year have been regrouped/recast, wherever necessary.

13. '' * '' represents amount less than Rs. 100,000.

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Mar 31, 2012

I) Rs 68 crore provisions made for future losses in respect of projects.

ii) Rs 64.87 crore pertains to an additional provision in respect of ongoing projects arising out of substantial delays in approval of claims, increase in estimated costs and delays in execution.

iii) Rs 33.69 crore being provision made in respect of closed projects.

1. Contingent Liabilities As at As at 31.03.2012 31.03.2011 Rs Crore Rs Crore (i) Counter Indemnities given to Banks, in respect of contracts

(a) For works in India (Secured on all the assets) 647.44 735.58

(b) *For works abroad (secured by ECGC counter guarantees) 271.28 225.77

*(Converted in rupees at the rate fixed by the Bank)

(ii) Claims not acknowledged as debts by the Company. 2.82 2.57

(iii) Income Tax Liability (AY 2008-09) that may arise in respect of which Company is in appeal 12.18 163.80

(The first appellate authority has decided almost all matters except one in favour of the Company resulting in substantial reduction in the tax liability provided last year. Now Company is in appeal before Income tax Appellate Tribunal for entitlement of actual loss claimed for the project instead of estimated loss)

(iv) Sales Tax liability / Works Contract Tax 34.93 18.71 liability / Customs Liability that may arise in respect of matters in appeal (Net of an amount of Rs 0.53 crore (previous year Rs 0.53 crore) Recoverable from Clients as per the terms of contract)

(v) Bills discounted and Retention 4.69 107.27 receivable with banks

(vi) Corporate Guarantees:

The Company has provided an undertaking to pay in the event of default on loan given by a bank to subsidiary, fellow subsidiary and Joint Ventures.

a) Pune Paud Toll Road Company - 9.77 Limited

b) Lavasa Corporation Limited 688.69 606.55

c) HCC Real Estate Limited - 65.00

d) HCC Mauritius Enterprises Ltd 156.52 156.52

e) Charosa Wineries Limited - 50.00

f) HCC Concessions Limited 28.26 100.00

g) HCC Infrastrucutre Limited 300.00 -

2. The Income-tax assessments of the Company have been completed upto the accounting year ended March 31, 2009. Few appeals preferred by the Company are pending before appellate authorities.

3. The Company has a single segment namely "Engineering & Construction". Therefore, the Company's business does not fall under different business segments as defined by AS 17- "Segmental Reporting" issued by ICAI.

4. Private Equity Investment and Consolidation of BOT SPVs

a) During the year HCC transferred it's equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

b) During the year, pursuant to Shareholders Agreement (SHA) executed on August 9, 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs 240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) in the event if the entire shareholding of all the group entities i.e Bara pore Farakka Highway Ltd, Farakka Raiganj Highway Ltd, Raiganj Dhalkola Highway Ltd and Dhule Palesner Tollway Ltd has not been sold and transferred by HCC to HCC Concession Ltd within the period of 20 months from the date of transfer date.

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd, Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd, and Raiganj - Dalkhola Highway Ltd. to NHAI till the commercial operation date. The Company has entered into sales agreement with HCC Concession Ltd to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs 26.14 crore for transfer of the above shares from HCC Concession Ltd.

5. Disclosure in accordance with Accounting Standard-18 Related Party Transactions

A. Names of Related Parties & Nature of Relationship

a) Subsidiaries & its Subsidiaries:

1) Hincon Technoconsult Ltd.

2) Western Securities Ltd.

3) HCC Real Estate Ltd.

4) Panchkutir Developers Ltd.

5) HCC Singapore Enterprises Pte Ltd.

6) HCC Mauritius Enterprises Ltd.

7) HCC Construction Ltd.

8) Highbar Technologies Ltd.

9) HCC Infrastructure Company Ltd.

10) Baharampore-Farakka Highways Ltd.

11) Farakka-Raiganj Highways Ltd.

12) Raiganj-Dalkhola Highways Ltd.

13) Pune Paud Toll Road Company Ltd.

14) HCC Aviation Ltd.

15) HRL Township Developers Ltd.

16) HRL (Thane) Real Estate Ltd.

17) Nashik Township Developers Ltd.

18) Maan Township Developers Ltd.

(Previously Hinjewadi Township Ltd.)

19) Charosa Wineries Ltd.

20) Powai Real Estate Developers Ltd.

21) HCC Realty Ltd.

22) Lavasa Corporation Ltd.

23) Klemanor Investments Ltd.

24) Highbar Technologies FZLLC

25) Dhule Palesner Operations & Maintenance Ltd

26) HCC Power Limited

27) HCC Concessions Ltd (Previously HCC Infrastructure Ltd.)

28) Badarpur Faridabad Tollways Ltd.

29) Nirmal BOT Ltd.

30) Steiner AG, Switzerland

31) Steiner Promotions et Participations SA

32) Eurohotel SA

33) VM ST AG

34) Steiner (Deutschland) GmbH

35) Steiner Leman SAS

36) SNC Valleiry Route de Bloux

6. Disclosure in accordance with Accounting Standard -18 Related Party Transactions

37) Lavasa Hotels Ltd.

38) Apollo Lavasa Health Corporation Ltd

39) Dasve Business Hotels Ltd.

40) Dasve Convention Centre Ltd.

41) Lakeshore Watersport Company Ltd.

42) Dasve Hospitality Institutes Ltd.

43) Lakeview Clubs Ltd.

44) Dasve Retails Ltd.

45) Full Spectrum Adventure Ltd.

46) Spotless Laundry Services Ltd

47) Lavasa Bamboocraft Ltd.

48) Green Hill Residences Ltd.

49) My City Technology Ltd.

50) Reasonable Housing Ltd.

51) Future City Multiservices SEZ Ltd.

(Previously Minfur Interior Technologies Ltd.)

52) Rhapsody Commercial Space Ltd.

(Previously Rhapsody Hospitality Ltd.)

53) Sirrah Palace Hotels Ltd.

54) Andromeda Hotels Ltd.

55) Valley View Entertainment Ltd.

56) Whistling Thrush Facilities Services Ltd.

57) Warasgaon Power Supply Ltd.

58) Sahyadri City Management Ltd.

59) Warasgaon Tourism Ltd.

60) Our Home Services Apartments Ltd.

61) Hill City Service Apartments Ltd.

62) Warasgaon Infrastructure Providers Ltd.

63) Kart Racers Ltd.

64) Nature Lovers Retail Limited

65) Osprey Hospitality Limited

66) Mugaon Luxury Hotels Limited

67) Starlit Resort Limited

68) Rosebay Hotels Limited

69) Warasgaon Valley Hotels Limited

70) Steiner India Ltd

71) Warasgaon Assets Maintenance Limited

72) Hill View Parking Services Limited

b) Integrated Joint Ventures:

1) Nathpa Jhakri Joint Venture

2) HCC-Pati Joint Venture

3) Kumagai-Skanska-HCC-Itochu Group

4) HCC-L & T Purulia Joint Venture

5) Alpine - Samsung - HCC Joint Venture

6) Alpine - HCC Joint Venture

7) Dhule Palesner Tollway Ltd.

8) ARGE Prime Tower, Zurich

c) Associates

1) Warasgaon Lake View Hotels Limited (Previously known as Lavasa Star Hotel Limited)

2) Verzon Hospitality Ltd.

3) Palmetto Hospitality Limited

4) Ecomotel Hotel Limited

5) Bona Sera Hotels Limited

6) SOL Hospitality Limited

7) Evostate AG

8) MCR Managing Corp. Real Estate

9) Projektentwicklungsges. Parking Kunstmuseum AG

10) Vikhroli Corporate Park Pvt. Ltd.

11) Knowledge Vistas Limited

d) Other Related Parties:

1) Gulabchand Foundation (formed under section 25 of Companies' Act, 1956)

2) Hincon Holdings Ltd.

3) Hincon Finance Ltd.

7. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD). Compulsory Convertible Preference Shares (CCPS) conververtible into ordinary shares and Non Convertible Debentures(NCD). The particulars, terms of issue as at March 31, 2012 are given below:

i) Bank of India has subscribed Rs150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). During the previous year the Company had prepaid Rs 90 crore of DDCD. As on the date of the balance sheet, the Company has Rs 60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

ii) Allahabad Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Trenche

1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. The Bank has decided to exercise put option as per the terms. The Company is in discussion with the Bank to arrive at mutually accepatable proposition.

iii) IndusInd Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date atan equity valuation of Rs 10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iv) Allahabad Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Trenched

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

v) Jammu & Kashmir Bank Limited had subscribed Rs 100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On September 3, 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs 100 crore for the tenor of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date.

vi) Bank of India has subscribed Rs 105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs 10,00,000 each on November 19, 2010 for the tenor of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date.

vii) Axis Bank has converted Rs 225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013.

viii) ICICI Bank has converted Rs 250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

8. Figures for the previous year have been regrouped/recast, wherever necessary.

9. ' * ' represents amount less than Rs 1,00,000.

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Mar 31, 2011

I. Contingent Liabilities As at As at 31.03.2011 31.03.2010 Rs. Crore Rs. Crore

(i) Counter Indemnities given to Banks, in respect of contracts

(a) For works in India (Secured on all the assets) 2,058.31 1,619.53

(b) *For works abroad (secured by ECGC counter guarantees) 225.77 202.93

*(Converted in rupees at the rate fixed by the Bank)

(ii) Claims not acknowledged as debts by the Company. 2.57 2.69

(iii) Income Tax Liability (AY 2008-09) that may arise in respect of which Company is in appeal 163.80 —

(The Income Tax Officer has raised the demand which is mainly on claims raised in subsequent year which are yet to be approved by the client. As this is contrary to Income Tax Appellate Tribunals decision in favour of the Company on similar grounds, the Company has contested the matter in the appeal & is confident of reversal of demand.)

(iv) Sales Tax liability / Works Contract Tax liability that may arise in respect of matters in appeal 18.71 14.26 (Net of an amount of Rs. 0.53 Crore (previous year Rs. 0.53 crore) recoverable from Clients as per the terms of contract)

(v) Bills discounted and Retention receivable with banks 107.27 165.98

(vi) Corporate Guarantees:

The Company has provided an undertaking to pay in the event of default on loan given by a bank to subsidiary, fellow subsidiary and Joint Ventures.

a) Pune Paud Toll Road Company Limited 9.77 14.36

b) Lavasa Corporation Limited 606.55 555.44

c) HCC Real Estate Limited 65.00 423.93

d) Nirmal BOT Limited — 6.18

e) Charosa Wineries Limited 50.00 22.00

f) HCC Concessions Limited (Formerly HCC Infrastructure Limited) 100.00 —

vii) A client, New Tirupur Area Development Corporation Limited has wrongfully encashed performance Bank Guarantee amounting to Rs. 27.40 crore in the year 2007-08 which is disputed by the Company. The Company has been legally advised that it has a good case on merits and therefore has invoked arbitration provisions of the contract. Pending resolution of the dispute the encashed Bank Guarantee is considered as a current asset.

II. Notes :

1. Advances from contractees of Rs. 1538.65 Crore (previous year Rs. 736.28 Crore) have been guaranteed by Companys bankers to the extent of Rs. 1069.49 Crore (previous year Rs. 692.85 Crore).

2. Commitment for capital expenditure is Rs. 65.16 Crore (previous year Rs. 74.28 Crore).

3. (a) Sub-contract, transportation, hire etc. include insurance Rs. 36.36 Crore (previous year Rs. 31.05 Crore), rates and taxes Rs. 165.31 Crore (previous year Rs. 130.06 Crore) and lease rent Rs. 17.23 Crore (previous year Rs. 7.02 Crore).

(b) Light vehicle expenses grouped under construction expenses include insurance Rs. 1.74 Crore (previous year Rs. 2.15 Crore) and taxes Rs. 0.12 Crore (previous year Rs. 0.10 Crore). No allocation is made to it for petrol and maintenance at the sites.

4. Loans and Advances include an amount due from an Officer of the Company Rs. 0.07 Crore (previous year Rs. 0.09 Crore). Maximum amount outstanding during the year Rs. 0.09 Crore (previous year Rs. 0.12 Crore).

5. i) The Company has taken various construction equipments and vehicles under non cancelable operating leases.

ii) The lease agreement provides for an option to the Company to renew the lease period at the end of the non cancelable period. There are no exceptional/restrictive covenants in the lease agreements.

6. The Income-tax assessments of the Company have been completed upto the accounting year ended 31st March, 2008. Several appeals preferred by the Company are pending before appellate authorities. Deferred Tax liability for the year ended 31st March, 2011 has been provided on the estimated tax computation for the year.

7. The Company has a single segment namely "Engineering & Construction". Therefore, the Companys business does not fall under different business segments as defined by AS 17- "Segmental Reporting" issued by ICAI.

8. (a) Contracts executed by the following Joint Ventures are accounted for as per accounting policy No. 12(a).

i) HCC-Van Oord Joint Venture ix) HCC - MEIL - CBE Joint Venture

ii) Samsung - HCC Joint Venture x) HCC - MEIL - BHEL Joint Venture

iii) L & T - HCC Joint Venture xi) HCC - MEIL - SEW - AAG Joint Venture

iv) HCC - KBL Joint Venture xii) HCC - MEIL - SEW Joint Venture v) HCC - NCC Joint Venture xiii) HCC - Halcrow Joint Venture

vi) HCC - CEC Joint Venture xiv) HCC - Laing-Sadbhav

vii) HCC - NOVA Joint Venture xv) HCC - MEIL - NCC- WPIL Joint Venture

viii) HCC - CPPL Joint Venture xvi) MEIL - IVRCL - HCC - WPIL Joint Venture

9. In accordance with Accounting Standard 11 (Revised) the net exchange Gain credited to profit & loss account is Rs. 8.60 crore (previous year Loss Rs. 1.35 Crore).

The Company had created "Foreign Currency Monetary Items Translation Difference" in (FCMT) account for accounting of long term monetary exchange fluctuations in terms of the Companies Accounting Standards Ammendment Rules 2009. During the current year the Company has fully charged off the balance lying in FCMT account of Rs. 2.17 crores in terms of these rules.

10. The Company issued at par 1,000 Zero Coupon Convertible Bonds due 2011 of US $1,00,000 each and 2,69,54,200 Global Depository Shares (GDSs) for an issue price of US $ 3.71 each aggregating to US $ 200 million. (Rs. 891.60 Crore as on the date of issue) in the year 2005-06 to finance capital expenditure, acquisitions, investment in Companys real estate subsidiary and any other use as may be permitted under applicable law or by relevant regulatory bodies from time to time . The Bondholders had an option of converting these Bonds into shares at an initial conversion price of Rs. 248.08 per share with a fixed rate of conversion of Rs. 44.58 = US $1 at any time on or after 11th May, 2006 up to 18th February, 2011. The Bonds were also redeemable at the option of the Company at least at 130% of the early redemption amount at any time on or after 14th April, 2009 upto 18th February, 2011. Unless previously redeemed, converted or purchased and cancelled , the Bonds were to be redeemed on 1st April, 2011 at 137.7139% of their principal amount.

The Offering Circular provided for an adjustment to the conversion price of the FCCBs in the event of the Company making a fresh issue of its equity shares for a consideration that is less than the Current Market Value of the equity shares as on the date on which the Company fixes the consideration or in the event the Company makes bonus issue of its equity shares.

Pursuant to the issuance of fresh equity shares to QIBs, the Company had revised the conversion price of the FCCBs from Rs. 248.08 to Rs. 246.02 in July 2009. Further, pursuant to the issuance of bonus equity shares on 12th August, 2010 the Company revised the conversion price of the FCCBs from Rs. 246.02 to Rs. 123.01.

In terms of the agreement with principal agent; the Company has unconditionally remitted the amount of Rs. 598.50 crores (including premium on redemption of the FCCB) to the Principal Agent on 31 March, 2011, to discharge the FCCB maturing on April 1, 2011. The Companys Liability has accordingly been extinguished on remittance. The Principal Agent has confirmed discharge of the payment to the Bond Holders. Premium payable on redemption of FCCBs till 31st March, 2011 has been adjusted net of tax to the Securities Premium Account. Tax Payable @ 12.4512% is proportionately adjusted against securities premium.

11. Intangible assets (ERP) includes compatible software Rs. 6.22 Crore (previous year Rs. 0.94 Crore).

12. Disclosure as per Clause 32 of the Listing agreement and as per Schedule VI of the Companies Act, 1956.

i) Inter Corporate Deposits are repayable on demand and interest is charged at market rates except interest free loan to the tune of Rs. 25.50 crores to Pune Paud Toll Road Company Limited with effect from 1st October, 2010.

E. Accumulated compensated absences (non vesting)

Actuarial valuation of sick leave has been made on 31.03.2011. Provision in respect of this benefit amounts to Rs. 2.17 crore for the financial year ending 31.03.2011 (previous year Rs. 1.54 Crore).

13. Disclosure in accordance with Accounting Standard -18 Related Party Transactions

A. Names of Related Parties & Nature of Relationship a) Subsidiaries & its Subsidiaries:

1) Hincon Technoconsult Ltd.

2) Western Securities Ltd.

3) Pune Paud Toll Road Company Ltd.

4) HCC Real Estate Ltd.

5) HCC Singapore Enterprises Pte Ltd.

6) HCC Mauritius Enterprises Ltd.

7) Nirmal BOT Ltd.

8) HCC Aviation Ltd.

9) Badarpur Faridabad Tollways Ltd.

10) HCC Concessions Ltd. (Previously HCC Infrastructure Ltd.)

11) HCC Infrastructure Company Ltd.

12) HCC Construction Ltd.

13) Panchkutir Developers Ltd.

14) Highbar Technologies Ltd.

15) Baharampore-Farakka Highways Ltd.

16) Farakka-Raiganj Highways Ltd.

17) Raiganj-Dalkhola Highways Ltd.

18) HRL Township Developers Ltd.

19) HRL (Thane) Real Estate Ltd.

20) Maan Township Developers Ltd. (Previously Hinjewadi Township Ltd.)

21) Nashik Township Developers Ltd.

22) Charosa Wineries Ltd.

23) Powai Real Estate Developers Ltd.

24) Lavasa Corporation Ltd.

25) HCC Realty Ltd.

26) Lavasa Hotels Ltd.

27) Osprey Hospitality Ltd.

28) Mugaon Luxury Hotels Ltd.

29) Appolo Lavasa Health Corporation Ltd.

30) Our Home Services Apartments Ltd.

31) Hill City Service Apartments Ltd.

32) Kart Racers Ltd.

33) Rosebay Hotels Limited

34) Warasgaon Valley Hotels Limited

35) Dasve Business Hotels Ltd.

36) Dasve Convention Centre Ltd.

37) Lakeshore Watersport Company Ltd.

38) Lakeview Clubs Ltd.

39) Dasve Hospitality Institutes Ltd.

40) Dasve Retails Ltd.

41) Spotless Laundry Services Ltd

42) Lavasa Bamboocraft Ltd.

43) Green Hill Residences Ltd.

44) Future City Multiservices SEZ Ltd. (Previously Minfur Interior Technologies Ltd.)

45) Full Spectrum Adventure Ltd.

46) My City Technology Ltd.

47) Reasonable Housing Ltd.

48) Starlit Resort Limited

49) Rhapsody Commercial Space Ltd. (Previously Rhapsody Hospitality Ltd.)

50) Sirrah Palace Hotels Ltd.

51) Andromeda Hotels Ltd.

52) Valley View Entertainment Ltd.

53) Whistling Thrush Facilities Services Ltd.

54) Warasgaon Power Supply Ltd.

55) Sahyadri City Management Ltd.

56) Warasgaon Tourism Ltd.

57) Klemanor Investments Ltd. (w.e.f. 24.3.2010)

58) Karl Steiner AG, Switzerland

59) Warasgaon Infrastructure Providers Ltd.

60) Nature Lovers Retail Limited

61) Steiner Promotions et Paricipations SA

62) Eurohotel SA

63) VM+ST AG

64) Steiner (Deutschland) GmbH

65) Steiner Léman SAS

66) SNC Valleiry Route de Bloux

67) Highbar Technologies FZLLC

b) Integrated Joint Ventures:

i) Nathpa Jhakri Joint Venture

ii) HCC-Pati Joint Venture

iii) Kumagai-Skanska-HCC-Itochu Group

iv) HCC-L & T Purulia Joint Venture

v) Alpine - Samsung - HCC Joint Venture

vi) Alpine - HCC Joint Venture

vii) Dhule Palesner Tollway Ltd.

viii) ARGE Prime Tower, Zürich

c) Other Related Parties:

1) Hincon Holdings Ltd.

2) Vikhroli Corporate Park (ceased to exist with effect from 28.06.2010)

3) Vikhroli Corporate Park Pvt. Ltd.(with effect from 22.7.2010)

4) Knowledge Vista Ltd. (Previously GDXT Oxford International School Ltd.) (ceased to be subsidiary with effect from 23.04.2010)

5) Gulabchand Foundation (formed under section 25 of Companies Act, 1956)

6) Hincon Finance Ltd.

7) Warasgaon Lake View Hotels Limited (Previously known as Lavasa Star Hotel Limited)

8) Verzon Hospitality Ltd.

9) Evostate AG, Zürich

10) MCR Managing Corp. Real Estate, Zürich

11) Projektentwicklungsges. Parking Kunstmuseum AG, Basel

B. Key Management Personnel

i) Shri Ajit Gulabchand Chairman & Managing Director

ii) Shri Vinayak Deshpande President (EPC & Construction) iii) Shri Praveen Sood Group Chief Financial Officer

iv) Shri V. P. Kulkarni Company Secretary

22. Employees Stock Option Scheme:

a. Options granted

i) The Company offered 44,58,800 Stock

Options on April 25, 2008 (each option carrying entitlement for one equity share of the face value of Re.1/- each) at a price of Rs.132.50 per equity share. Out of the total Stock Options offered, 8,98,180 have been lapsed on account of resignation / retirement by employees. In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOP Compensation Committee at its meeting held on July 20, 2009 had repriced 41,31,600 options at Rs. 104.05 per equity share ii) The ESOP Compensation committee at its meeting held on 23rd October 2008 granted 1,93,750 options at an exercise price of Rs. 43.40 per equity share. The ESOP Compensation Committee of the Company at its Meeting held on August 12, 2010 has decided to double the number of employee stock options (vested and unvested but not exercised and in-force as on the Record Date i.e. August 11, 2010) and halved the exercise price on account of issuance and allotment of Bonus Equity Shares in the proportion of 1:1

Accordingly, 35,53,760 employee stock options in–force granted by the Company on April 25, 2008 have been doubled i.e. 71,07,520 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 104.05 to Rs. 52.03 and 1,93,750 employee stock options granted by the Company on October 23, 2008 have been doubled i.e. 3,87,500 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 43.40 to Rs. 21.70.

b. Settlement Through Equity Shares.

25. During the year, the Company has acquired 66% stake in Zurich- based Karl Steiner AG, which is engaged in the business of building construction after obtaining all regulatory approvals in India and in Switzerland, for a total consideration of Rs. 142.66 Crores, through its wholly owned subsidiary HCC Mauritius Enterprises Ltd.

26. (a) Lavasa Corporation Ltd., a subsidiary has issued Deep Discount

Convertible Debentures (DDCD) & Compulsory Convertible Preference Shares (CCPS) convertible into ordinary shares. The particulars, terms of issue and the status of conversion as at March 31, 2011 are as under:

i) Axis Bank has subscribed Rs. 225 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 3.52% per annum on the face value of DDCD and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years at an equity valuation of Rs. 10,000 crores from the closing date or at the time of Initial Public Offer (IPO) whichever is earlier. This DDCD is compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put/call option respectively to sell / purchase the DDCD from 36th months upto 60th months from the closing date. During the year, the above DDCD is sub-divided into 225 DDCDs of a face value of Rs. 1,72,17,777.78 each.

ii) Bank of India has subscribed Rs. 150 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. During the year, the above DDCD is sub-divided into 15 DDCDs of a face value of Rs. 15,66,10,153 each. on 15th November, 2010 the Company has pre-paid 9 DDCDs.

iii) Allahabad Bank has subscribed Rs. 50 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

iv) IndusInd Bank has subscribed Rs. 50 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

v) Andhra Bank had subscribed Rs. 25 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carried a coupon of 6% per annum on the subscription amount and had a maximum tenor of 5 years. The investor had an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. This DDCD was compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. had a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. On 3rd September, 2010 the Company has pre-paid the full outstanding amount of the said DDCD.

vi) United Bank of India had subscribed Rs. 50 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carried a coupon of 6% per annum on the subscription amount and had a maximum tenor of 5 years. The investor had an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. This DDCD was compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. had a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. On 23rd November, 2010

the Company has pre-paid the full outstanding amount of the said DDCD.

vii) Allahabad Bank has subscribed Rs. 50 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

viii) ICICI Bank Limited has subscribed Rs. 250 crores in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs. 10,000 crores. The Investor and HCC Ltd. have a put /call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

ix) Axis Bank has subscribed Rs. 25 crores in the form of Compulsory Convertible Preference Shares ("CCPS"). This CCPS carry a coupon of 0.001% per annum on the subscription amount of CCPS. The CCPS have a maximum tenor of 5 years. The Investor has an option to convert the CCPS into equity shares of the Company at any time within 5 years from the Closing Date. Axis Bank and HCC Ltd. have the put /call option respectively to sell / purchase the CCPS at the end of 36th, 48th and 60th month from the closing date.

(b) Lavasa Corporation Ltd., a subsidiary has issued Non Convertible Debentures (NCD). The particulars, terms of issue as at March 31, 2011 are given below:

i) Jammu & Kashmir Bank Limited had subscribed Rs. 100 crores in the form of Deep Discount Convertible Debentures ("DDCD"). On 3rd September 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs. 100 crores for the tenor of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC Ltd. have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date.

ii) Bank of India has subscribed Rs. 105 crores in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs. 10,00,000 each on 19th November 2010 for the tenor of 3 years. These NCD carry a coupon rate of 12.50% per annum, payable yearly on subscription amount. The investor and HCC Ltd. have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date. The said NCD are listed on Bombay Stock Exchange (BSE) on 13th January 2011.

27. (i) The Company has invested Rs. 5.44 Crore in Pune Paud Toll Road Company Ltd. (PPTRCL), a subsidiary and has also given interest free loan of Rs. 25.5 Crore. The Networth of PPTRCL is negative as on 31st March 2011 as the accumulated losses of the Company at Rs. 29.75 crores have exceeded the paid up

share capital of the Company amounting to Rs. 6.06 Crores by Rs. 23.70 Crores. Following are the positive developments:- a) Management is expecting that the toll collection would accelerate during the balance tenure part of the Concessions period due to the economic development of the area and in particular due to the large scale township development namely," LAVASA" and the planned ring road development extending the municipal limits of city of Pune beyond present toll plaza.

b) The Company has also taken up the matter with appropriate authorities, the issue of local peoples resistance to pay toll charges and frequent disturbance created including damage to the toll plaza resulting in significant impact on toll collection and requested them to arrive at remedial measures.

c) The PPTRCL has also started discussion with the appropriate authorities to restructure Concession terms to compensate for the lower revenue.

(ii) The Company has invested in HCC Aviation Limited (HAL), a wholely owned subsidiary Rs. 0.05 Crore and has given an advance of Rs. 11.29 Carore. The Networth of HAL is negative as on 31st March, 2011 as the accumulated losses of the Company of Rs. 8.55 Crores have exceeded the paid up share capital of the Company amounting to Rs. 0.05 Crores by Rs. 8.50 Crores.

On consideration of the long term business outlook and future growth plans, in the above subsidiaries, the management is of the opinion that losses in both the companies are temporary in nature and going concern nature of the business is not adversely affected. In view of the above, no diminution in the value of investment is required and the loans and advances given are fully recoverable.

28. Figures for the previous year have been regrouped/recast, wherever necessary.

29. * represent amount less than Rs. 1,00,000.

---

Mar 31, 2010

I. Contingent Liabilitiea Aa at As at 31.03.2010 31.03.2009 Rs. Crore Rs. Crore

(i) Counter Indemnities given to : Banks, in respect of contracts

(a) For works in India (Secured on all the assets) 1,619.53 1,741.86

(b) *For works abroad (secured by ECGC counter guarantees) 202.93 32.30

(Converted in rupees at the rate fixed by the Bank)

(ii) Claims not acknowledged as debts by the Company. 2.69 0.40

(iii) Sales Tax liability / Works Contract Tax liability that may arise in respect of matters in appeal 14.26 7.56

(Net of an amount of Rs.0.53 Crore (previous year Rs.12.06 crore)) recoverable from Clients as per the terms of contract )

(iv) Bills discounted with banks 165.98 241.39

(v) Corporate Guarantees:

The Company has provided an undertaking to pay in the event of default on loan given by a bank to subsidiary.Joint Ventures.

a) Pune Paud Toll Road Company Limited 14.36 18.48

b) Lavasa Corporation Limited 555.44 185.43

c) HCC Real Estate Limited 423.93 410.00

d) Nirmal BOT Limited 6.18 26.78

e) Charosa Wineries Limited 22.00 17.00

vi) A client has encashed Performance Bank Guarantee amounting to Rs. 27.40 Crore in the year 2007-08 which is disputed by the Company. The Company has been legally advised that it has a good case on merits and therefore has invoked arbitration provisions of the contract. During the year issues to be decided by the Arbitral Tribunal have been framed by the Tribunal. Pending resolution of the dispute the encashed Bank Gurantee is considered as a current asset.

III. Notes :

1. Advances from contractees of Rs.736.28 Crore (previous year Rs.502.90 Crore) have been guaranteed by Companys bankers to the extent of Rs.692.85 Crore (previous year Rs.473.42 Crore).

2 Commitment for capital expenditure is Rs.74.28 Crore (previous year Rs. 130.09 Crore).

3. (a) Sub-contract, transportation, hire etc. include insurance

Rs.31.05 Crore ( previous year Rs. 24.87 Crore), rates and taxes Rs. 130.06 Crore (previous year Rs. 127.20 Crore ) and lease rent Rs.7.02 Crore (previous year Rs.6.83 Crore ). (b) Light vehicle expenses grouped under construction expenses include insurarce Rs.2.15 Crore (previous year Rs.0.86 Crore) and taxes Rs.0.10 Crore (previous year Rs. 0.11 Crore). No allocation is made to it for petrol and maintenance at the sites.

4. Loans and Advances include an amount due from an Officer of the Company Rs.0.09 Crore (previous year Rs.0.12 Crore). Maximum amount outstanding during the year Rs.0.12 Crore (previous year Rs.0.14 Crore).

7. The Income-tax assessments of the Company have been completed upto the accounting year ended 31st March, 2006. Several appeals preferred by the Company are pending before appellate authorities.

Deferred Tax liability for the year ended 31st March, 2010 has been provided on the estimated tax computation for the year.

9. The Company has a single segment namely "Engineering & Construction". Therefore, the Companys business does not fall under different business segments as defined by AS 17- "Segmental Reporting" issued by ICAI.

11. (a) Contracts executed by the following Joint Ventures are accounted for as per accounting policy No. 12 (a). i) HCC-Van Oord Joint Venture ix) HCC-MEIL - CBE Joint Venture ii) Samsung-HCC Joint Venture xl HCC-MEIL - BHEL Joint Venture iii) L & T-HCC Joint Venture xi) HCC-MEIL - SEW- AAG Joint Venture

iv) HCC-KBL Joint Venture xii) HCC-MEIL - SEW Joint Venture

v) HCC-NCC Joint Venture xiii) HCC-Halcrow Joint Venture

vi) HCC-CEC Joint Venture xiv) HCC-Laing-Sadbhav

vii) HCC-NOVA Joint Venture xv) HCC-MEIL- NCC- WPIL Joint Venture viiil HCC-CPPL Joint Venture xvi) MEIL-IVRCL- HCC - WPIL Joint Venture

14. In accordance with Accounting Standard 11 (Revised) the net exchange loss debited to profit & loss account is Rs.1.35 Crore (previous year Rs.12.26 Crore).

The Companies (Accounting Standards) Amendment Rules 2009 has amended the provisions of AS-11 relating to "The Effects of the changes in Foreign Exchange Rates" vide notification dated 31st March, 2009. In terms of these amendments, the Company has carried over long term monetary exchange loss of Rs. 2.17 Crore through "Foreign Currency Monetory Items Translation Difference Account" (previous year Rs.19.33 Crore), to be amortised over the balance period of such long term asset/ liability but not beyond 31st March 2011. Further foreign exchange difference (net) of Rs.62.89 Crore (Previous year Rs.99.64 Crore) on capital account has been taken to the cost of respective fixed assets.

15. During the year, Company claimed Cenvat Credit of Rs.49.84 Crore on capital and non-capital goods from 2004-05 to 2006-07 in terms of Circular dated 01.10.2007. As a result the gross block of fixed assets is reduced by Rs.48.25 Crore, accumulated depreciation is reduced by Rs.9.99 Crore with corresponding effect on inventory except for an amount of Rs.2.63 Crore relating to closed projects credited to the Profit and Loss Account.

16. Value of assets taken on lease NIL (previous year NIL). Future obligation on account of lease rentals Rs.9.03 Crore (previous year Rs. 17.93 Crore).

17. Intangible assets (ERP) includes compatible software Rs.0.94 Crore (previous year Rs.3.15 Crore).

19. The Company issued at par 1,000 Zero Coupon Convertible Bonds due 2011 of US$1,00,000 each and 2,69,54,200 Global Depository Shares (GDSs) for an issue price of US $ 3.71 each aggregating to US $ 200 million. (INR 891.60 Crore as on the date of issue) in the year 2005-06 to finance capital expenditure, acquisitions, investment in Companys real estate subsidiary and any other use as may be permitted under applicable law or by relevant regulatory bodies from time to time . The Bondholders have an option of converting these Bonds into shares at an initial conversion price of Rs. 248.08 per share with a fixed rate of conversion of Rs.44.58 = US$1 at any time on or after 11th May, 2006 up to 18th February, 2011. The Bonds are also redeemable at the option of the Company at least at 130% of the early redemption amount at any time on or after 14th April, 2009 upto 18th February, 2011. Unless previously redeemed , converted or purchased and cancelled , the Bonds will be redeemed on 1st April, 2011 at 137.7139 % of their principal amount.

The Offering Circular provides for an adjustment to the conversion price of the FCCBs in the event the Company making a fresh issue of its equity shares for a consideration that is less than the Current Market Value of the equity shares as on the date on which the Company fixes the consideration.

Pursuant to the issuance of fresh equity shares to QIBs, the Company has revised the conversion price of the FCCBs from Rs. 248.08 to Rs. 246.02.

Premium payable on redemption of FCCBs till 31st March, 2010 has been adjusted net of tax in the Securities Premium Account.

20. In the year 2005-06 pending utilization of the issue proceeds of Zero Coupon Foreign currency convertible bonds (FCCB) and Global Depositary Shares (GDS) an amount of Rs.869.54 Crore had been kept in Foreign Currency Current and Deposit Accounts. During the current year out of issue proceeds, Rs.NIL (previous year Rs. 14.42 Crore) has been utilized for meeting working capital requirements in terms of the objects of the issue.

21. During the year ended 31st March, 2010, 34 FCCBs of the face value of USD 100,000 each were bought back by the Company aggregating to USD 0.34 crore.

Further, provision made for premium on redemption of FCCBs by debiting Securities Premium in the previous year has been reversed to the extent it pertains to the FCCBs buyback.

22. The Company vide its Qualified Institutional Placement Document dated 30th June, 2009 has placed 4,70,00,000 fully paid equity shares of Re 1/- each at an issue price of Rs 102.15 per equity share (including a premium of Rs 101.15 per equity share), aggregating to Rs 480.11 Crore to Qualified Institutional Buyers. These equity shares have been subsequently issued and alloted at its Board meeting held on 4th July, 2009.

24. The Company issued 75,00,000 Warrants of Re.1/- each at a premium of Rs. 202.50 per warrant on preferential basis to promoters on 20th December, 2007. The Warrant holders were entitled to apply for and be allotted, in one or more tranches, one equity share of Re. V- each of the Company per warrant, anytime after the date of allotment of Warrant but before the expiry of 18 months from the date of allotment of such Warrants. Upon exercise of the right to apply for equity shares, the Warrant holders were liable to make the payment of 90% of the issue price. The Board upon receipt of the entire amount was to allot one equity share per Warrant.

However, upon not exercising the option, an amount of Rs.15.19 Crore equivalent to 10% of the issue price of 75,00,000 warrants received during the previous year have been forfeited.

E. Accumulated compensated absences (non vesting)

Actuarial valuation of sick leave has been made on 31.03.2010. Provision in respect of this benefit amounts to Rs.1.54 crore for the financial year ending 31.03.2010 (previous year Rs.1.49 Crore).

27. Disclosure in accordance with Accounting Standard -18

Related Party Transactions

A. Names of Related Parties & Nature of Relationship

a) Subsidiaries & its Subsidiaries:

1) Hincon Technoconsult Ltd.

2) Western Securities Ltd.

3) Pune Paud Toll Road Company Ltd.

4) HCC Real Estate Ltd.

5) HCC Singapore Enterprises Pte Ltd.

6) HCC Mauritius Enterprises Ltd.

7) Nirmal BOT Ltd.

8) HCC Aviation Ltd.

9) Badarpur Faridabad Tollways Ltd.

10) HCC Infrastructure Ltd.

11) HCC Construction Ltd.

12) Panchkutir Developers Ltd.

13) Highbar Technologies Ltd.

14) Baharampore-Farakka Highways Ltd.

15) Farakka-Raiganj Highways Ltd.

16) Raiganj-Dalkhola Highways Ltd.

17) HREL Township Developers Ltd.

18) HREL (Thane) Real Estate Ltd.

19) Maan Township Developers Ltd. (Previously Hinjewadi Township Ltd.)

20) Nashik Township Developers Ltd. 21)Charosa Wineries Ltd.

22) Powai Real Estate Developers Ltd.

23) Lavasa Corporation Ltd.

24) HCC Realty Ltd.

25) Lavasa Hotels Ltd.

26) Warasgaon Lake View Hotels Ltd. (Previously Lavasa Star Hotel Ltd.)

27) Appolo Lavasa Health Corporation Ltd.

28) Ecomotel Hotels Ltd.

29) Dasve Business Hotels Ltd.

30) Dasve Convention Centre Ltd.

31) Lakeshore Watersport Company Ltd.

32) Lakeview Clubs Ltd.

33) Dasve Hospitality Institutes Ltd.

34) Dasve Retails Ltd.

35) Spotless Laundry Services Ltd.

36) SOL Hospitality Ltd. *

37) Lavasa Bamboocraft Ltd.

38) Green Hill Residences Ltd.

39) Knowledge Vista Ltd.

(Previously GDXT Oxford International School Ltd.)

40) Full Spectrum Adventure Ltd.

41) Space Theme Park India Ltd. **

42) My City Technology Ltd.

43) Reasonable Housing Ltd.

44) Minfur Interior Technologies Ltd.

45) Verzon Hospitality Ltd.

46) Rhapsody Hospitality Ltd.

47) Sirrah Palace Hotels Ltd.

48) Andromeda Hotels Limited (100%)

49) Valley View Entertainment Ltd.

50) Whistling Thrush Facilities Services Ltd.

51) Warasgaon Power Supply Ltd.

52) Sahyadri City Management Ltd.

53) Warasgaon Tourism Ltd.

* - Ceased to be subsidiary from May09 ** - Ceased to be subsidiary from April09

b) Integrated Joint Ventures:

i) Nathpa Jhakri Joint Venture

ii) HCC-Pati Joint Venture

iii) Kumagai-Skanska-HCC-ltochu Group

iv) HCC-L & T Purulia Joint Venture

v) Alpine - Samsung - HCC Joint Venture

vi) Alpine - HCC Joint Venture

vii) Dhule Palesner Tollway Ltd.

c) Other Related Parties:

1) Hincon Holdings Ltd.

2) Vikhroli Corporate Park

3) Bon Sera Hotels Ltd.

4) Palmetto Hospitality Ltd.

5) Gulabchand Foundation (formed under section 25 of Companies Act, 1956)

B. Key Management Personnel

i) Shri Ajit Gulabchand Chairman & Managing Director

ii) Shri K.G. Tendulkar Director (Deputy Managing Director upto 7th November, 2009)

iii) Shri Vinayak Deshpande President & COO (EPC & Construction)

iv) Shri Praveen Sood Group Chief Financial Officer

v) Shri V. P. Kulkarni Company Secretary

28. Employees Stock Option Scheme:

a) Options granted

i) The Company offered 44,58,800 Stock Options on April 25, 2008 (each option carrying entitlement for one equity share of the face value of Re.1/- each) at a price of Rs.132.50 per equity share.Out of the total Stock Options offered, 3,27,200 have been lapsed on account of resignation by employees.

In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOP Compensation Committee at its meeting held on July 20, 2009 has repriced the above 41,31,600 options at Rs. 104.05 per equity share

ii) The ESOP Compensation committee at its meeting held on 23rd October, 2008 granted 1,93,750 options at an exercise price of Rs. 43.40 per equity share.

31. (A) Lavasa Corporation Ltd., a subsidary has issued Deep Discount Convertible Debentures (DDCD) & Compulsory Convertible Preference Shares (CCPS) convertible into ordinary shares. The particulars, terms of issue and the status of conversion as at March 31, 2010 is given below.

i) Bank of India has subscribed Rs. 150 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCDs at the end of 39th, 48th and 60th month from the closing date.

ii) Allahabad Bank has subscribed Rs. 50 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

iii) Axis Bank has subscribed Rs 225 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 3.52% per annum on the face value of DDCD and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares of the Company at anytime within 5 years at an equity valuation of Rs. 10,000 crores from the closing date or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iv) Axis Bank has subscribed Rs 25 Crores in the form of Compulsory Convertible Preference Shares ("CCPS").

This CCPS carry a coupon of 0.001% per annum on the subscripton amount of CCPS. The CCPS have a maximum tenor of 5 years. The Investor has an option to convert the CCPS into equity shares of the Company at any time within 5 years from the Closing Date. Axis Bank and HCC have the put /call option respectively to sell / purchase the CCPS at the end of 36th, 48th and 60th month from the closing date.

v) Andhra Bank has subscribed Rs 25 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

vi) Indusind Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 3rd, 4th and 5th year from the closing date.

vii) United Bank of India has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

viii)Allahabad Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. date. The said DDCD is secured by way of 1 Acre of Land at Mulshi, Pune

ix) ICICI Bank has subscribed Rs 250 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

x) Induslnd Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

The DDCD carry a coupon of 6% per annum on the face value of Rs 74.94 crores of DDCD and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company within 5 years from the closing date i.e 9th July, 2009 subject to investors stake is not less than 0.5% of Companys equity capital. The conversion amount is to be calculated based on the YTM of 13% / 13.6% based on the equity valuation of Rs. 10,000 crores. The Bank and Promoters have a put/call option respectively to sell / purchase the DDCD at the end of 3rd, 4th and 5th year from the closing date.

(B) Bennett Coleman & Co. Limited., has invested an amount of Rs. 81.25 crores into the Company against issuance of one Warrant on preferential basis, giving a right to Bennett, Coleman & Co. Limited to subscribe to 0.8125%of the fully diluted equity share capital of the Company as on the date of exercise of the warrant. BCCL has paid Rs 8,12,50,000/- being 10% of the exercise amount against the allotment of warrant. BCCL can exercise the right of conversion at any time during the 5 years from the date of agreement or shall exercise in whole at the end of 5th year or at the time of IPO. In the event BCCL does not exercise its option to acquire all the shares within 5 years the Company shall forfeit the proportionate warrant subscription price to the extent not exercised and warrant shall lapse.

33. i) Pune Paud Toll Road Company Ltd. a subsidiary has an accumulated loss of Rs.21.65 crore as on 31st March, 2010. The toll road operated by the Company is expected to generate manifold increase in the traffic plying on the road during balance part of the concession period due to large scale hill station township development namely LAVASA taking place in the project vicinity and also the planned ring road development extending the municipal limits of Pune city beyond present toll plaza location.

ii) HCC Aviation Limited, a wholly owned subsidiary, has an accumulated loss of Rs.8.55 crore as at 31st March, 2010. The Company has long term business outlook and future growth plans hence, the going concern nature of the business is not adversely affected.

In the opinion of the management since the losses in both the Companies are temporary in nature, no diminution in value of investment is required.

34. Figures for the previous year have been regrouped/recast, wherever necessary.

35. Represents amount less than Rs. 100000.