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Directors Report of Hindustan Construction Company Ltd.

Mar 31, 2016

1. Report

The Directors are pleased to present the 90th Annual Report together with the Audited Financial Statements for the year ended March 31, 2016.

2. Financial Highlights

(Rs. Crore)

Particulars Year ended Year ended March 31, 2016 March 31, 2015

Turnover 4190.90 4,301.14

Profit before Interest, Depreciation, Exceptional 798.74 781.43

Items, Other Income and Tax

Less: Finance Costs 689.88 651.13

135.85 150.30

Depreciation

Exceptional Item 26.48 -

852.21 801.43

Add: Other Income 187.76 134.87

Add/Less: Exchange Gain/(Loss) (1.22) 12.45

Profit before Tax 133.07 127.32

Less: Tax Expense 48.10 45.67

Profit/(Loss) after Tax 84.97 81.65

Add: Balance brought forward from last year 147.92 69.00

Less: Transferred to Debenture Redemption

20.00 - Reserve

Less: Impact of depreciation/ amortisation - 2.73

(Refer Note 3.2 of the Financial Statements)

Balance carried to Balance Sheet 212.89 147.92

3. Dividend

As your Company is under CDR, it is necessary to conserve and optimise use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2016.

4. Operations

The turnover of the Company in the year is Rs. 4,190.90 crore as compared to Rs. 4,301.14 crore in the previous year. The profit before tax is Rs. 133.07 crore (including exceptional item) as compared to Rs. 127.32 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:

- Ramban to Banihal Section of NH 44, Jammu & Kashmir

Contract Value: Rs. 1783 crore

- Integrated Nuclear Recycle Plant, Maharashtra Contract Value: Rs. 942 crore

- Imphal Kangchup Tamenglong Road, Manipur Contract Value: Rs. 1114 crore

- Tapovan Vishnugad Hydroelectric Project, Uttarakhand

Contract Value: Rs. 634 crore

- Nikachhu Hydropower Plant, Bhutan Contract Value: Rs. 457 crore

- Tunnel No. 12, New Railway line Project Jiribam - Tupul, Manipur Contract Value: Rs. 784 crore

The total balance value of works on hand as on March 31, 2016 is Rs. 18,123 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 13 packages amounting to about Rs. 10,334 crore (HCC share Rs. 9301 crore). Tenders for various packages for 29 projects worth Over Rs. 22,214 crore (HCC share Rs. 19,843 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 12 projects worth over Rs. 24,082 crore (HCC share Rs. 22,053 crore) which are under evaluation.

Operations of Subsidiaries

i) Lavasa Corporation Ltd - Integrated Urban Development and Management

Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for opening in April 2017. Projects with renowned hospitality players like Formule 1, Holiday Inn, Langham and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its eighth year of successful operations with occupancy at 66%, while Accor''s Mercure is in its seventh year of successful operation with occupancy at 56%. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Lavasa has tied up with former Indian cricketer and chief of the BCCI Selection Committee, Mr. Sandeep Patil for building a Sports complex including a cricket stadium for corporate tournaments. There have been talks to set up sports academies for hockey, football, badminton, etc. at Lavasa. Other tie-ups include advance discussions on building a Hollywood & Bollywood Theme Park in Mugaon.

On the retail front, a significant area has already been leased. Restaurants like Smokin Joes, Venkys Xpress, Subway, Cafe Coffee Day, Baskin Robbins,

All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchyand Indulge have commenced operations. Many other non F&B outlets such as Mapro and Charosa Wine Boutique have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.

Significant progress was made in the education space. Christel House Lavasa is into its seventh year of operations with 432 students. 2015-16 also saw launch of Phase 2 of Christel House till grade VIII. Corporate entities such as EduSports, Yoga Blessing and Linguaphone showed keen interest to contribute towards Christel House Lavasa School by way of sports programmes, educational and Yoga workshops.

Ecole Hoteliere Lavasa started its seventh batch in June 2015-16. The operation of Ecole Hoteliere was taken over by Expat Properties in May 2015. Ecole Hoteliere will start its eighth batch from July 25, 2016.

Christ University offering courses like Post Graduate Diploma in Management (PGDM) program with specialization in Finance and Marketing started operations two years ago, with a total of 102 students now in its third batch, with a target of 60 students for the 2016-17 academic program.

Knowledge Vistas Limited (KVL) is already running Little Millennium, pre-primary school at Lavasa for last five years. It is also likely to start the K12 School from academic year 2017-18. Abhinav Shiksha Sansthan, New Delhi will start from the academic year 2018-19 across the area of 62,500 sq. ft. Other educational partners like Symbiosis Institute (Pune) are also in the process of launching their programs.

Residential sales have been sluggish in tune with the overall market sentiment. Institutional Sales team is on the anvil of closing transactions which would herald the entry of reputed corporations into Lavasa city.

One such deal is with ''All that Jazz'', a leading retailer who will bring reputed retail brands to make Lavasa an ideal shopping destination. This deal will boost retail businesses at Lavasa and make the promenade area more vibrant.

We are in advanced discussions with multiple educational institutes keen to set up residential schools at Lavasa. Sanjeevani Institute intends to bring in Kindergarten to Post Graduate courses. Likewise, vocational training institute from Germany, ''Kosbe'' has been approached and they are keen to start courses. Lavasa being a smart city offers students ready on site learning of various subjects like waste management and functioning of water treatment plants. Symbiosis Institute has begun construction of a higher secondary education facility.

Lavasa continued its focus on branding and communication activities in 2015-16. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages. Positioning Lavasa city as India''s first smart city, building preference and restoring customer confidence in the project were the key goals.

The central government initiative to build smart cities across India generated a great deal of excitement among Indian and foreign stakeholders. The growing interest in smart cities augurs well for Lavasa. We played host to a number of government, business and student delegations keen on studying the Lavasa model of development.

As a proactive step to reach out to a wider audience, Lavasa was presented as a ready Smart City model at various platforms, the most prominent one being the Smart Cities India Exhibition at Delhi and the 13th Municipalika Smart Cities Exhibition at Jaipur.

Our spokespeople also participated in various other seminars and discussions on Smart Cities.

Lavasa continued with the strategy of creating large events at Lavasa to attract good tourists.

A four day festival of adventure, music, dance and entertainment was organized as a lead up to the Republic Day on January 26, 2016. For the first time, a hot air balloon took flight over the Dasve town, Mentalist, Akshay Lakshmanan captivated audiences with his mind reading session and wall painting activity by the students of Christel House were the highlights of the Republic Day weekend festivities.

On May 1, 2015, Maharashtra Day was also celebrated with art & culture, music & dance programmes highlighting the rich cultural heritage of Maharashtra, along with a display of historic ancient Maratha arms & weapons livened up the Dasve Promenade.

The second edition of Freedom, a festival of music, food and entertainment saw 35,000 tourists enjoying good music, delectable cuisines and great entertainment.

Christmas and New Year celebrations started with live musical and dance performance at the Dasve promenade and Fortune Lawns. Renowned artist Sharon Prabhakar along with DJ Rayjack, DJ-Cyborg,

DJ Sazz & DJ Shriki entertained the visitors.

Focus of the Public Relations campaign in 2015 was on building profile of Lavasa as India''s first smart city and promoting the city as an ideal tourist destination. Feature stories in print media and TV channels, automobile magazines, national and international news portals resulted in good visibility for Lavasa.

Lavasa was prominently featured as a Smart City in a number of media reports. Trade magazine ''Realty'' featured Lavasa as one of India''s premier Smart Cities, while Hindustan Times, the Pioneer, Deccan Herald and Indiainfoline carried similar stories. Other trade supplements like Times Property and multiple regional publications also featured Lavasa as a Smart City.

CMD''s comment was widely circulated to media post launch of AMRUT in Delhi, positioning him as the thought leader on Smart Cities. ''The Property Guide'' guide show on leading business news channel ET Now did a report on residential properties at Lavasa and also carried an interview with the CEO.

Lavasa as a tourist destination was promoted through stories in relevant travel and lifestyle media and through tie ups with TV channels for shows that were shot at Lavasa. ELLE magazine did a 14 page photo shoot including the cover page at various scenic locations in the city. Lavasa was covered extensively in ''Man Chimb Pavasan'' a travel based programme on Saam Marathi channel. A photo-feature on tourist options at Lavasa was also carried by leading news portals like rediff.com and indiatoday.in.

Auto-trade media was specifically engaged to promote Lavasa among bikers and adventure enthusiasts. Over 1000 bikers braved the rain and travelled to Lavasa in June to celebrate World Motorcycle Day. This activity garnered coverage in all media including mainline publications, print and online auto media as well as regional publications. Motoring World magazine conducted the jury round of their annual car and bike awards at Lavasa which resulted in a six page story all of them featuring cars and bikes shot at Lavasa.

Lavasa viewpoint on the SDO order on restoring tribal lands was prominently reproduced by all print and TV media. Pune media was engaged extensively during the summer season to sensitise them on the water scarcity issue. Meetings with senior editors and the constant engagement with beat reporters in Mumbai and Pune has also helped in creating greater awareness of company''s stand on various crucial issues.

Special Initiatives and events were highlighted regularly in mainstream and trade media to build preference and recall. Celebrations at Lavasa on Maharashtra Day, Independence Day weekend and initiative like the Dreamcatchers Summer camp were covered by all major publications and online portals. Launch of Jetovator, Segway and news about Lavasa bagging the PATWAAward were widely publicized.

Each month, Lavasa looks, feels and acts more like a city. Lavasa city now has a full-fledged operational Farmer''s market known as ''Hara Bazar''; a two screen Movie theatre for visitors and residents; it has a fully operating Post office, DTDC - courier service, a Hospital with pharmacy and several new food and beverage establishments open for business. It also has four operating hotels. Four additional hotels will be opening soon which collectively will take the total number of hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two bank branches along with ATMs, a state-of-art Convention Centre, a Public Safety Centre with Fire Engine & crew,

Police outpost to be upgraded to a full-fledged Police station, Tourist Information Center with a ''Hop On - Hop Off'' Bus facility; Multilevel Car parking facility, Nature trail, Citizen Contact Center with 24x7 support to citizens through emergency and non-emergency contact numbers, Rental housing for low income groups, simulated Golf Course facilities; Water Sports facility with latest "Jetovator", Adventure Sports facility, a modern Club with gym, Sports and Spa facilities, Public Transport system for citizens, Schools for local population and two operational College campuses. Additional Hotels, Retail shops and Family Entertainment Centre facilities for tourists will be opened shortly.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. Drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration. Sewage is treated in a manner that exceeds government requirements and is subsequently reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99.90% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50 kilometers of well-maintained motorable roads are operational and more are being constructed,

Lavasa has already opened parks and play areas to the public. The e-governance portal Lavasa App, and Security Command Centre will play a major role in communicating with citizens and providing services 24x7.

A round the clock Lavasa Citizen Contact Centre has been operational since 2009 and envisions making the lives of citizens and visitors easy and convenient. The Lavasa Citizen Contact Centre is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customers'' needs and visitors'' requests; is involved in proactive information distribution, data collection and Property management services; Customer Satisfaction Surveys and Customer handovers and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting. It is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, PublicWorks, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The CMS department will slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. Lavasa aims to create this, so that the goals of the Master Plan can be realized and sustained and the various public - private partnerships can operate in a more consistent and predictable environment.

The CMS department meets on a monthly basis with a committee of villagers throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

The Company had 10,574 acres of land including 455 acres of land on lease by the end of last financial year i.e. March 31, 2015. This has reduced to 10,515 acres as 59 acres of land in Mugaon was restored to tribals by SDO, Maval during the year.

The Environment Management Plan (EMP) continues to be implemented as per our Environment Impact Assessment (EIA) Report submitted to Ministry of Environment, Forests & Climate Change (MoEF & CC), New Delhi. Regular monitoring of environmental aspects such as air & noise quality, water & sediment quality, soil quality, DG stack & noise quality and biodiversity is being carried out by MoEF approved and NABL accredited laboratory as per the conditions mentioned in the Environment Clearance by MoEF & CC. All reports were found to be within the prescribed limit of MPCB. The six-monthly Environmental Compliance Report is being submitted to MoEF since 2012. The 7th compliance report was submitted in June 2015 and the 8th compliance report was submitted in December 2015 to MoEF, its Regional Office at Nagpur and Maharashtra Pollution Control Board (MPCB) at Pune. Yearly Environment Statement, a requirement as per the consent document of Maharashtra Pollution Control Board (MPCB), is being submitted in the month of September every year and the last report was submitted on September 30, 2015.

First town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. Till date around 1,200 properties are ready for hand over to customers. Of these, around 972 units have already been handed over to customers. Work on rest of properties - Lake View apartments, Club View apartments, Delfino apartments, Valley View apartments, Brook View apartments, Rental housing, Retail and hostel tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in progress.

Work on infrastructure for the second town of Mugaon has been accelerated. Work on utilities is in progress. Work on 37 buildings at Mugaon has commenced.

The improvement to the existing Mugaon-Tamhini Zilla Major District road excluding the stretch crossing through Forest Land is completed. A portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. Work on the inter village road from Mugaon to Dhamanohol is completed (6 kms). Rehabilitation work on new gaothans has commenced. This rehabilitation will also help augment the construction of the first phase of the apartments in Mugaon.

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 18 villages in the project area at 72 locations on a daily basis. Calligraphy workshops, aptitude tests and counseling for students of Zilla Panshad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.

ii) HCC Real Estate Ltd

HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company is into the business of building residential and office complexes in real estate sector.

HRL (Thane) Real Estate Limited

Your Company initiated the acquisition of 183 acres of land at Ghodbunder Road, Thane for Integrated Township Development. Till date the Development Agreement and Power of Attorney for 32 acres have been executed in favour of Company. The Company continued its activity of securing its position for land title and other documentation.

The Company has filed criminal case against Mr. Atul Sonawala and 8 other Directors of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is in process for the said case.

HRL Township Developers Limited

No activities were carried out during the year. Your Company continued its search process for joint development opportunities.

Nashik Township Developers Limited

During the year, the Company sold its land and completed all the land related transactions. Further the Company is looking for joint development opportunities in residential sectors since Nashik city is growing industrially as well as economically.

Maan Township Developers Limited

The Company has acquired approx. 28 acres of land and the Development Agreement and Power of Attorney have been executed in favour of the Company. The Company in this year has decided to sell the land in piece parcels. MOU has been signed with a Real Estate Company for sale of 5 Acres of land and has executed sale deed for 4 Acres.

Powai Real Estate Developers Limited

No activities were carried out during the year though the Company continued to look for an opportunity to find ideal land parcels for joint development in residential sectors

HCC Realty Limited

No activities were carried out during the year.

Panchkutir Developers Limited

During the year, your Company continued its efforts on the following projects in residential sector:

Development of Vikhroli (E) land parcel: Out of the total land holding of around 32 acres by the Panchkutir Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-I of 14.5 acres of land to ascertain the development potential of the free sale component is completed. Out of the 1960 slum residents, consent of about 1400 residents representing more than 70% has already been obtained and the process for forming the society is in progress. Proposal has been submitted to SRA for Phase-I comprising of 750 tenants of 4 Societies.

Slum declaration of Phase-I land was challenged and the same has been dismissed by the Special Slum Tribunal. Subsequently the litigant filed Writ Petition challenging the above said Order of the Slum Tribunal in High Court. High Court interalia asked tribunal for actual verification of slum. But the litigant filed an appeal challenging the above said Order of the Single Judge of High Court before the Divisional Bench.

Development of Powai land: MOU-cum- Development Agreement and Power of Attorney were executed by land owner in favor of the SPV, Panchkutir Developers Ltd a subsidiary of HCC for 12 acres of land. Due to non performance by the land owner of the various obligations under the MOU- cum-Development Agreement in spite of repeated reminders, we have been advised by our solicitor to invoke the Arbitration clause forming part of the MOU-cum-Development Agreement. Accordingly, Arbitration proceedings have been initiated and till date evidence of Claimant''s witnesses is completed and matter is now fixed for evidence of Respondent.

During the pendency of the proceedings, Smt. Nayak, litigant has submitted a proposal to settle the matter by making lump sum payment which was accepted by the Company. Accordingly Consent Terms were executed on November 16, 2015 and the Learned Arbitrator has passed an award on December 15, 2015 in terms thereof. The Company has received full payment by banker''s cheque and has executed cancellation Deeds of MOU and lease deed.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned subsidiary of your Company, operates its business through its subsidiaries HCC Concessions Ltd. (HCON), HCC Power Ltd., and HCC Operations & Maintenance Ltd (HOML). HCON develops and manages road assets, HOML operates commissioned assets and HCC Power is exploring opportunities in the power sector to leverage HCC''s capabilities. HCON has developed 6 NHAI road concessions over the last 9 years. In the past financial year, after the sale of two of its de-risked operational projects i.e. Nirmal BOT Ltd and Dhule Palesner Tollway Ltd, the current portfolio has four National Highway concessions with Rs. 5,000 crore asset base.

In line with your Company''s plan, the focus over the last fiscal year has been on strong construction management, efficient operations and raising capital. The management team at the Company has been continuously working to achieve quality and timely execution to create value for all its stakeholders with complete focus on financial discipline. The Company continues to provide reliable, safe and world class services to the country''s end users.

In 2011, the Xander group, a global investment firm, had acquired a 14.5% stake in HCON for Rs. 240 crore.

Current Road Portfolio:

HCON''s current portfolio comprises of four toll based projects: the Delhi Faridabad Elevated Expressway (dfskyway™) on NH2, and three contiguous sections of 250 km in West Bengal on NH34. Of these, Delhi Faridabad Expressway and the first leg of NH34 development i.e. the Baharampore Farakka Highways are operational. These two projects have been operational for five and two years, respectively.

In the last financial year, your Company completed the stake sale of two assets. The transaction for Nirmal BOT Ltd, the annuity project in Telengana (erstwhile Andhra Pradesh) was completed in December 2015 and the sale of Dhule Palesner Tollway, the 89 km highway on NH3 connecting Agra and Mumbai, was consummated in October 2015.

Farakka Raiganj Highway, the second and largest leg of NH-34 development in West Bengal, achieved significant progress in the last fiscal year. The project is expected to be commissioned in the next few months while final completion is expected by the end of next fiscal year. The last leg of NH34, Raiganj Dalkhola, which has been delayed nearly 6 years due to delays in land acquisition, has seen significant improvement in availability of Right of Way (ROW), and your Company has approached the lenders consortium and NHAI for support in restarting the project. While the NHAI has acknowledged the sizeable cost increase, they remain reluctant on supporting the project with funds including additional grant. In the interest of all stakeholders and being prod by NHAI, the concessionaire has started basic earthworks, but full scale mobilization will depend on appropriate support from NHAI and lenders.

Material defaults by NHAI, largely due to delayed handing over of land for all three NH-34 packages have resulted in the Concessionaire''s filing of a claim of Rs. 1,528 crore as damages. Of these the Company has started the arbitration proceedings for the Baharampore-Farakka and Farakka-Raiganj projects. After muted growth due to the recent economic slowdown, the traffic growth on Baharampore-Farakka has been strong in the last financial year and NH-34 projects continue to be a substantial source of value creation for your Company.

In the last financial year, ~1,600 km of highways were awarded on BOT basis. The Ministry of Road Transport and Highways (MoRTH) and NHAI have introduced a new Hybrid Annuity model for development of road assets on PPP mode. Your Company is evaluating bidding for select Hybrid Annuity projects, potentially in partnership with third parties.

Status of Operational Assets: Baharampore Farakka Highway (NH-34)

This is the first section of HCON''s Rs. 4,300 crore development of NH-34 (West Bengal) from Baharampore to Dalkhola. The project stretch is the arterial connectivity between North and South Bengal providing nearest access to Kolkata and Haldia ports for the north eastern states of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises 85-90% commercial traffic, carrying a diversified mix of manufactured goods, sand, quarry stones, building materials, steel, jute, food grains and tea.

The concession period for the project is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,424 crore. The project achieved commercial operations in May 2014 for partial length of the highway while land was being acquired for the remaining portion. The total revenue for the last fiscal year was Rs. 112 crore, an increase of 37% over the previous financial year. The operations and maintenance is being managed by HOML.

The Company has successfully implemented the 10x tolling for overloaded vehicles since August 2014 as per NHAI circular, to prevent the economic deterioration of the asset and to meet the increased costs due to overloading.

The balance land for the Baharampore bypass was handed over in the second quarter of last fiscal. The completion of the project is delayed by 34 months as of March 2016, largely due to material defaults by NHAI in providing land on a timely basis. The Final Completion (FCOD) is expected to be completed after a delay of 56 months due to delayed handover of ROW, tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. The Concessionaire has filed Rs. 578 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs and arbitration proceedings are underway. The Company has filed the Statement of Claim before the arbitration tribunal.

The Company has also achieved the sanctions from the lenders consortium for cost overrun in the last fiscal to complete the project in the absence of timely realization of claim from NHAI.

Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™, awarded in 2008, is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur, developed by HCON with an investment of nearly Rs. 600 crore. The dfskyway™ reduced travel time by over 40 minutes through an extremely congested corridor that benefits residents and inter- state traffic alike.

The project has a concession period of 20 years, including construction period of 2 years. In the last fiscal year the Company suffered a material impact due to a Supreme Court order for collecting Environmental Compensation Charge from commercial vehicles entering New Delhi (thereby discouraging their entry into the capital), resulting in a substantial dip of ~40% in commercial vehicles. It is clear that the Apex Court and the Delhi government are working hard to prevent commercial vehicles using Delhi as a thoroughfare (admittedly for good reason to check pollution), but which has unfortunately caused a devastating impact and potential political event by permanently curtailing revenues.

The Company is evaluating several options with the lenders including restructuring options as per RBI guidelines and potential termination with NHAI due to

Force Majeure event.

In order to enhance the revenue on this project and reduce maintenance costs, the Company is also in the process of implementing 10x tolling for overloaded vehicles in accordance with NHAI Fee Rules.

The Company has also submitted its proposal for deferment of premium payments to improve liquidity, as well as a comprehensive proposal for advertising along the project highway. The project is a signature project in Delhi having very high visibility and the Company is expecting significant revenues from the latter sources.

Status of Assets under Construction:

Farakka Raiganj Highway (NH-34)

Farakka Raiganj is the middle and largest section of the 250 km development. This section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,720 crore.

A substantial stretch of roads and structures of this second and largest leg of NH-34 development has been completed and toll collection is expected to commence by Q1 of financial year 2017. In the last year, almost the entire land has been made available for construction after a substantial delay of ~4 yrs by NHAI. The Provisional Completion (PCOD) is estimated to be achieved 35 months after SFLD (Scheduled Four-laning Date) while Final Completion (FCOD) will be delayed by a total of 44 months due to delayed handover of ROW, tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. As of June 30, 2015, the Concessionaire has filed Rs. 681 crore of claims from the NHAI for the damages suffered due to NHAI defaults. The arbitration proceedings are underway and the Company has filed its Statement of Claim and Rejoinder to the Statement of Defense filed by the NHAI. The Concessionaire will submit further claims for increased costs beyond June 30, 2015.

The Company has also achieved the sanctions from the lenders consortium for cost overrun in the last fiscal to complete the project in the absence of timely realization of claim from Authority.

Raiganj Dalkhola Highway

This is the smallest northern section of the NH-34 development which has suffered the worst delay of nearly 6 years due to non-acquisition of land. The project stretch starts at Raiganj (Km 398.000) and terminates at the town of Dalkhola (Km 452.750).

The 50 km project stretch traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years which includes a construction period of 30 months. The project cost has increased to Rs. 1,204 crore and progress is contingent on appropriate support from NHAI and Lenders.

In the last 1.5 years, a significant portion of land has been made available for construction after a delay of nearly 6 years; Pre-construction activities such as clearing & grubbing and earthwork has started in the interest of all stakeholders.

As of June 30, 2014, the Concessionaire has filed Rs. 269 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile had approached its Lenders to assist in funding the large cost overrun and has received sanction from the lead bank for additional funding. Once the financing arrangement is in place with adequate support from NHAI, the Company will start full-fledged construction work with an aim to complete within next 30 months.

iv) Steiner AG, Switzerland

Steiner AG, one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the fields of new constructions, refurbishment and Real Estate Development.

Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, wholly owned subsidiaries.

As per IGAAP Accounting Standards, Steiner AG has registered a revenue of CHF 636.8 million (Rs. 4255.3 crore) compared to CHF 853.9 million (Rs. 5604.9 crore) in the previous year with a loss of CHF 0.98 million (Rs. 6.5 crore) compared to a net profit of CHF 1.7 million (Rs. 10.8 crore) in the previous year. While as per Swiss GAAP Accounting Standards, Steiner AG has registered a revenue of CHF 649.7 million (Rs. 4341.8 crore) compared to CHF 854.1 million (Rs. 5605.8 crore) in the previous year with a net profit of CHF 1.9 million (Rs. 12.7 crore) compared to CHF 2.0 million (Rs. 13.1 crore) in the previous year.

The Company secured fresh orders worth CHF 850 million (Rs. 5843.6 crore). The order backlog was CHF 1.32 billion (Rs. 9074.8 crore) at the end of the year. In addition to this, the company has secured orders for more than CHF 700 million (Rs. 4812.4 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 87.1 million (Rs. 598.7 crore)as per Swiss GAAP while as per IGAAP closing cash balance was CHF 85.4 million (Rs. 587.1 crore), reflecting the companys steady financial performance and strong liquidity position.

Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs. 75.5 crore and loss of Rs. 5.9 crore in FY 2015-16.

v) Highbar Technologies Ltd

Highbar Technologies Ltd (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company with the vision of providing end-to-end IT solutions to Infrastructure industry.

In the financial year 2015-16, which is just the sixth year of operations, Highbar has been able to cross the total number of customers beyond 100. This has been achieved when Highbar''s primary customer segment, the infrastructure industry, is dealing with slowdown.

Highbar is now providing SAP related services and IT infrastructure services across multiple sectors like Manufacturing, BPO, Agro-Chemicals in addition to Infrastructure, Real Estate, Retail, Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron & Steel etc. It has developed capabilities to successfully concurrently execute large sized projects. Highbar has already started expanding its reach in government sector by exploring opportunities with dedicated team working on it. This year Highbar''s services for Government sector made one of its prominent government customers go paperless.

Apart from this, Highbar has been honoured with two prominent industry recognitions. First one is SAP Partner Awards in the category of ''Best Pre-sales Customer Engagements'' for effectively engaging customers through appropriate solutions across industries. Second one is ''ChannelWorld Premier 100 awards''. This award was given to the IT players for being agile and adapting rapidly to the changing technology and business landscape. Highbar has been recognised as one of the 100 agile IT players. This is the 2nd time that Highbar has been recognised with Premier 100 awards. Agility is one of Highbar''s nine brand drivers. With speed, agility and hunger for success. Highbar Technologies has already created a niche for itself in infrastructure and real estate industry by dominating ''IT for Infrastructure market'' with 100 customers in a short span of 6 years.

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence and dashboards, cloud offerings through Highbar Cloud Connect, Employee Portals, CRM (Customer Relationship Management), DMS (Document Management System), BPC (Business Planning & Consolidation), Treasury Management, FLM (File Lifecycle Management). It has also ventured into new areas like SAP HANA, S/4 HANA, Simple Finance, SAP Fiori, Screen Persona, Mobility Solutions, e-procurement etc. The business has now established and is ready to expand in multiple industries and geographies like India, Middle East, Europe and Africa. Highbar''s first customer in Switzerland has already gone live on SAP system and started garnering benefits of SAP.

Services provided by Highbar have gone much beyond SAP into process consulting and IT infrastructure support such as data-centre and networking. Solutions like Highbar RapidStart and Highbar RapidStart Analytics are based on templatised approach to ERP and Business Intelligence respectively and are intellectual properties (IP) assets of Highbar. Highbar remains as preferred partner for SAP implementation and re-implementation for the infrastructure industry. Eleven numbers of Highbar''s implementations have now become global case studies, published on SAP''s website as reference cases.

Highbar continues to support your Company''s group companies including your Company, HCC Infrastructure, HCC Real Estate, Lavasa and Steiner India across the IT value chain. Your Company''s SAP Customer Centre of Expertise (CCOE) was certified by SAP this year and benchmarked amongst top 1% out of 2,93,000 SAP customers globally. With a view to be at the forefront of IT, entire SAP systems at your Company viz. ERP, CRM, DMS etc were upgraded to the latest versions, thereby ensuring SAP support for at least the next ten years i.e. till 2025 along with access to new business functionalities which were hitherto not available. The underlying hardware, Operating systems and Database were also upgraded and is now scalable for SAP usage at much higher levels and at better speed. The drive undertaken for last few years to harness IT for bringing about operational efficiency and cost controls continues with the same vigour through further business process automations, process refinements and tighter controls supported by intelligent reporting and alert mechanisms.

Highbar, the successful spin-off from your Company''s internal IT function, has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

5. Subsidiaries, Joint Ventures and Associate Companies

During the year under review, the following changes have taken place with respect to subsidiaries, joint Ventures and Associate Companies:

a) HCC Power Ltd (the wholly owned step-down subsidiary company) has incorporated HCC Energy Ltd, a wholly owned subsidiary company on August 11, 2015, making it a subsidiary of your Company from the date of its incorporation.

b) Ecomotel Hotel Ltd (Associate Company) has become a subsidiary (step-down subsidiary Company) of your Company w.e.f. July 15, 2015.

c) Apollo Lavasa Health Corporation Ltd (step-down subsidiary Company) and Starlit Resort Ltd (step- down subsidiary Company) have become an Associate Company w.e.f. November 16, 2015 and May 14, 2015 respectively.

d) HCC Concessions Ltd (the step-down subsidiary company) has transferred its 74% stake in Nirmal BOT Ltd on December 23, 2015; accordingly Nirmal BOT Ltd ceases to be a subsidiary of your Company w.e.f. December 23, 2015.

e) HCC Concessions Ltd (the step-down subsidiary company) has transferred its equity stake in Dhule Palesner Tollway Ltd, a joint venture company on 29.10.2015; accordingly HCC ceases to hold any share in the said joint venture Company w.e.f. from 29.10.2015.

f) Sirrah Palace Hotels Ltd (step-down subsidiary Company) has ceased to be a subsidiary of your Company w.e.f. November 6, 2015.

Subsidiary Companies

1. Western Securities Ltd

2. HCC Aviation Ltd

3. HCC Construction Ltd

4. Highbar Technologies Ltd

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited

7. HCC Mauritius Investment Limited

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM ST AG

11. Eurohotel SA

12. Steiner (Deutschland) GmbH

13. Steiner Leman SAS

14. SNC Valleiry Route De Bloux

15. Steiner India Ltd

16. HCC Infrastructure Company Ltd

17. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

18. Badarpur Faridabad Tollway Ltd

19. Baharampore - Farakka Highways Ltd

20. Farakka - Raiganj Highways Ltd

21. Raiganj - Dalkhola Highways Ltd

22. Dhule Palesner Operations & Maintenance Ltd

23. HCC Power Ltd

24. HCC Energy Ltd

25. HCC Operations & Maintenance Ltd

26. Narmada Bridge Tollway Ltd

27. HCC Real Estate Ltd

28. HRL Township Developers Ltd

29. HRL (Thane) Real Estate Ltd

30. Nashik Township Developers Ltd

31. Maan Township Developers Ltd

32. Charosa Wineries Ltd

33. Powai Real Estate Developers Ltd

34. HCC Realty Ltd

35. Pune-Paud Toll Road Company Ltd

36. Panchkutir Developers Ltd

37. Lavasa Corporation Ltd

38. Lavasa Hotel Ltd

39. Lakeshore Watersports Company Ltd

40. Dasve Convention Centre Ltd

41. Dasve Business Hotel Ltd

42. Dasve Hospitality Institutes Ltd

43. Lakeview Clubs Ltd

44. Dasve Retail Ltd

45. Full Spectrum Adventure Ltd

46. Spotless Laundry Services Ltd

47. Lavasa Bamboocrafts Ltd

48. Green Hill Residences Ltd

49. My City Technology Ltd

50. Reasonable Housing Ltd

51. Future City Multiservices SEZ Ltd

52. Rhapsody Commercial Space Ltd

53. Valley View Entertainment Ltd

54. Warasgaon Tourism Ltd

55. Our Home Service Apartments Ltd

56. Warasgaon Power Supply Ltd

57. Sahyadri City Management Ltd

58. Hill City Service Apartments Ltd

59. Kart Racers Ltd

60. Warasgaon Infrastructure Providers Ltd

61. Nature Lovers Retail Ltd

62. Osprey Hospitality Ltd

63. Warasgaon Valley Hotels Ltd

64. Rosebay Hotels Ltd

65. Mugaon Luxury Hotels Ltd

66. Warasgaon Assets Maintenance Ltd

67. Hill View Parking Services Ltd

68. Whistling Thrush Facilities Services Ltd

69. Verzon Hospitality Ltd

70. Ecomotel Hotel Limited Integrated Joint Ventures

1. HCC-L&T Purulia Joint Venture

2. HCC Samsung Joint Venture CC-34

3. Alpine Samsung HCC Joint Venture

4. Alpine HCC Joint Venture

5. Nathpa Jhakri Joint Venture

6. Kumagai -Skanska-HCC Itochu Group

7. ARGE Prime Tower, Zurich Associate Companies

1. Nirmal BOT Limited

2. Warasgoan Lake View Hotels Limited

3. Andromeda Hotels Limited

4. Knowledge Vistas Limited

5. Bona Sera Hotels Limited

6. Apollo Lavasa Health Corporation Ltd

7. Starlit Resort Ltd

8. Evostate AG

9. Projektentwicklungsges,

Parking Kunstmuseum AG.

10. MCR Managing Corp. Real Estate AG

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company forms part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2016.

The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/ HCC Policy for determining Material Subsidiaries. pdf

6. Qualified Institutions Placement of Equity Shares (QIP) / Change in Share Capital

During the year under review, your Company''s Authorised Share Capital has remained unchanged at Rs. 100,00,00,000 (Rupees One hundred crore) comprising 90,00,00,000 Equity Shares of Rs. 1 each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10 each.

On April 10, 2015, your Company has issued and allotted 13,33,32,800 Equity Shares of Rs. 1 each at an issue price of Rs. 30 per Equity Share (including premium of Rs. 29 per equity share) for an amount aggregating Rs. 399,99,84,000 to Qualified Institutional Buyers in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Section 42 of the Companies Act, 2013 and the Rules made thereunder.

Post the QIP Issue, the present paid up Equity Share Capital of the Company is Rs. 77,91,58,906 which comprises 77,91,58,906 Equity Shares of Rs. 1 each.

7. Public Deposits

Your Company has not accepted any deposits from the public, or its employees during the year under review.

8. Particulars of Loans, Guarantees & Investments

Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 (Hereinafter "The Act") are given in the notes to the Standalone Financial Statements.

Also, pursuant to Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Standalone Financial Statements.

9. Employee Stock Option Scheme (ESOP)

As on March 31, 2016, 16,54,630 stock options are outstanding, in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, no options got vested in the employees of the Company. 15,84,700 stock options got lapsed between April 1, 2015 and March 31, 2016.

The particulars with regard to the ESOPs as on March 31, 2016 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.

10. Consolidated Financial Statements

In accordance with the Companies Act, 2013, Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures and as prescribed by Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiary and joint venture in the prescribed form AOC-1 is annexed to the Annual Report.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the shareholders at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.

11. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India(SEBI).

The report on Corporate Governance as prescribed in Schedule V (C) of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance alongwith a declaration signed by the Chairman & Managing Director stating that the members of the Board of Directors and Senior Management personnel have affirmed compliance with the respective codes of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.

12. Directors

Mr. D. M. Popat, Director of the Company, who was liable to retire by rotation at the 89th Annual General Meeting of the Company held last year had expressed his intention not to seek re-election as a Director of the Company and accordingly had retired from his directorship on July 14, 2015.

After a prolonged illness, Mr. Popat passed away on December 23, 2015. The Board of Directors has expressed its deep regret and offered condolences on the sad demise of Mr. Popat.

Mr. Popat was a Senior partner at M/s Mulla & Mulla & Craigie Blunt & Caroe, Solicitors & Advocates since 1969 and was one of the most eminent solicitors of the country. He was associated with our Company for a very long time.

The Board has also placed on record the invaluable contribution of Late Mr. D. M. Popat to the Board and the Company.

The Board of Directors of the Company at its meeting held on May 2, 2016 has appointed Mr. Rajgopal Nogja as the Group Chief Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016.

Pursuant to his appointment, Mr. Nogja has stepped down from the Board as Group COO & Whole-time Director w.e.f. May 2, 2016.

The Board placed on record its appreciation for the valuable services rendered and contribution made by Mr. Rajgopal Nogja during his tenure as Whole-time Director (prior to his appointment as Group CEO) of the Company.

Mr. N. R. Acharyulu was employed with our Company as Chief Business Development Officer and on conclusion of his contract period, the Board of Directors has appointed Mr. N. R. Acharyulu (DIN: 02010249) as an Additional Director on the Board of the Company in the category of Non-Executive Director, who is liable to retire by rotation, with effect from May 2, 2016, in accordance with Section 161 of the Companies Act, 2013 read with Article 88 of the Articles of Association of the Company.

The Company has received a Notice under Section 160 of the Companies Act, 2013, from a member signifying an intention to propose Mr. N. R. Acharyulu as a candidate for the office of Director at the forthcoming Annual General Meeting.

Brief Profile of the Director seeking appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

The Independent Directors of the Company viz.,

Mr. Rajas R, Doshi, Mr. Ram P. Gandhi, Mr. Sharad M. Kulkarni, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that they meet with the criteria of Independence as prescribed for Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.

13. Key Managerial Personnel

Following persons are the Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

i) Mr. Ajit Gulabchand, Chairman and Managing Director

ii) Mr. Rajgopal Nogja, Group Chief Executive Officer

iii) Mr. Arun V. Karambelkar, President & CEO - E&C

iv) Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office

v) During the year under review, Mr. V. P. Kulkarni, resigned as Company Secretary with effect from July 30, 2015 and therefore he was a Key Managerial Personnel till July 30, 2015

The Board placed on record its appreciation for the valuable services rendered and contribution made by Mr. Vithal P. Kulkarni during his long tenure as Company Secretary of the Company.

vi) Mr. Sangameshwar Iyer was appointed by the Board of Directors, in place of Mr. V. P. Kulkarni, as the Company Secretary of the Company with effect from July 31, 2015 and thereby is designated as Key Managerial Personnel with effect from the said date.

vii) Mr. Rajgopal Nogja was appointed by the Board of Directors of the Company at its meeting held on May 2, 2016, as the Group Chief Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016. Pursuant to his appointment, Mr. Nogja has stepped down from the Board as Group COO & Whole-time Director w.e.f. May 2, 2016.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2016 are mentioned in the Extract of the Annual Return which is attached to the Board''s Report.

14. Board Committees

The Board of Directors of your Company had already constituted various Committees and approved their terms of reference/role in compliance with the provisions of the Companies Act, 2013 and Listing Agreement (applicable uptil November 30, 2015)/ SEBI Listing Regulations (applicable from December 1, 2015) viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.

During the financial year 2014-15, in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Report on Corporate Governance in the Annual Report.

15. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.

The Board of Directors of your Company met 4 times during 2015-16. The meetings were held on April 30, 2015, July 30, 2015, October 29, 2015 and January 28, 2016. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

16. Familiarisation Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.

The details of the familiarization program are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia. com/pdf/familiarisation_program_for_independent_ directors.pdf

17. Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, Annual Performance Evaluation of the Directors as well as that of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

18. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 29, 2016, inter-alia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel

The Nomination and Remuneration Committee has laid down well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors, which is attached to the Board''s Report as Annexure II.

20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees

The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by it and approved by the Board of Directors, which is attached to the Board''s Report as Annexure II.

21. CSR Policy

The brief outline of the Corporate Social Responsibility (CSR) Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is attached to this Report as Annexure III and is available on the website of the Company i.e. www.hccindia.com

22. Related Party Transactions

All related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis.

The related party transactions attracting compliance under Section 177 of the Companies Act, 2013 and / or erstwhile Clause 49 of the Listing Agreement / Regulation 23 of the SEBI Listing Regulations were placed before the Audit Committee for approval.

There are no transactions to be reported in Form AOC-

2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

There were no related party transactions which were placed for prior omnibus approval of the Audit Committee.

A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.

Further the details of the transactions with Related parties are provided in the Company''s financial statements in accordance with the Accounting Standards.

The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http:// www.hccindia.com/pdf/HCC_Policy_for_Related_ Party_Transactions.pdf

23. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.

Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.

The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.

However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively.

This response by Directors is based on the management note given under Para 29 of this report.

f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating effectively.

24. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

25. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has, during the year under review, transferred a sum of Rs. 11,95,382 to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount represents dividend for the year 2007-08 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

26. Particulars of Employees and other additional information.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure V to this Report.

The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

27. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.

28. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing Firm Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the above said AGM).

Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.

At the 89th AGM held on July 14, 2015, the shareholders had ratified the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai for the period covering their second year of appointment viz., from the conclusion of the last AGM held on July 14, 2015 until the conclusion of the Annual General Meeting to be held in the financial year 2016-17.

The said appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai covering their third year of appointment viz, from the conclusion of the ensuing AGM in financial year 2016-17 until the conclusion of the next Annual General Meeting to the held in the financial year 2017-18, has to be ratified by Members at the forthcoming AGM and accordingly the said proposal is being placed for members'' ratification.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the Rules made thereunder, as may be applicable.

29. Statutory Auditors'' Remarks

a. Statutory Auditors Qualification:

The Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2016 contains the following qualification(s):

As stated in Note 32 to the Standalone financial statements, the Company''s long term investments as at March 31, 2016 include investments aggregating Rs. 474.37 crore in its subsidiaries, namely, HCC Real Estate Limited and Lavasa Corporation Limited; and the long term loans and advances, non-current assets and other current assets as on that date include dues from such subsidiaries aggregating Rs. 554.17 crore, Rs. 32.51 crore and Rs. 13.35 crore, respectively, being considered good and recoverable by the management. However, these subsidiaries have accumulated operational losses and their net worth is fully/ substantially eroded as at March 31, 2016. Further, such subsidiaries are facing liquidity constraints due to which they may not be able to realize projections made as per their business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements.

b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter

The Auditors'' Report to the Members on the Internal Financial Controls over financial reporting (IFCoFR) with respect to the Audited Financial Results of the Company for the financial year ended March 31, 2016 contains the following qualification(s):

In our opinion, according to the information and explanations given to us and based on our audit procedures performed, the following material weakness has been identified in the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2016:

The Company did not have appropriate internal financial controls over financial reporting in respect of its assessment of (a) ''other-than- temporary'' diminution in the carrying value of the Company''s long-term investments in its subsidiaries and (b) recoverability of long-term loans and advances, non-current assets and other current assets due from such subsidiaries. The inadequate supervisory and review controls over Company''s process in respect of its aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investment in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, also impact the profit after tax.

In our opinion, except for the effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance note and were operating effectively as at March 31, 2016.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

Management Note

The Company, as at March 31, 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 (March 31, 2015:

Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (March 31, 2015:Nil), other non- current assets Rs. 13.08 crore (March 31, 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 March 31, 2016 has been substantially/fully eroded, the underlying project 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 value 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, non-current assets and other current assets together with the interest thereon are good and recoverable.

Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investment, recoverability of loans and advances, current and non-current assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.

30. Secretarial Audit

Secretarial Audit for the financial year 2015-16 was conducted by M/s BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

31. Cost Audit

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on July 30, 2015 had appointed M/s Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2015-16. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2015-16.

32. Risk Management

Pursuant to the requirement of Section 134 (3)(n)of the Companies Act, 2013, the Company has already in place a Risk Management Policy.

The Company has a robust Business Risk Management (BRM) framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance your Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level.

In accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, during the financial year 2014-15, the Board had voluntarily constituted the Risk Management Committee.

33. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

34. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act 2013.

35. Vigil Mechanism Policy

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccindia.com

36. Sexual Harassment

HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.

During the year 2015-16, one case of Sexual Harassment was reported which was investigated by a committee (including an external member) as defined under the Policy of Prevention & Redress of Sexual Harassment and appropriate action was taken in the said case.

37. Reporting of Frauds:

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.

38. Significant and Material Orders passed by the Regulators/Courts, if any

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.

39. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report.

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

40. Extract of Annual Return

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.

41. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all Stakeholders Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued Investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJIT GULABCHAND

Chairman & Managing Director



Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083

Place: Mumbai

Date: June 3, 2016


Mar 31, 2015

The Members of Hindustan Construction Co. Ltd.

1. Report

The Directors are pleased to present the 89th Annual Report together with the Audited Financial Statements for the year ended March 31,2015.

2. Financial Highlights

Particulars Year ended Year ended March 31,2015 March 31,2014 Rs crore Rs crore

Turnover 4,301.14 4,113.49

Profit before Interest, Depreciation, Exceptional Items, 781.77 643.76 Other Income andTax

Less: Finance Costs 651.13 607.94

Depreciation 150.30 144.61

801.43 752.55

Add: Other Income 134.53 213.59

Add/Less: Exchange Gain/(Loss) 12.45 (13.85)

Profit before Tax 127.32 90.95

Less: Tax Expense 45.67 10.31

Profit/(Loss) after Tax 81.65 80.64

Add: Balance brought forward from last year 69.00 (11.64)

Less: Impact of depreciation/amortisation 2.73 - (Refer Note 3.2 of the Financial Statements)

Balance carried to Balance Sheet 147.92 69.00

3. Dividend

As your Company is under CDR, it is necessary to conserve and optimise use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2015.

4. Operations

The turnover of the Company at Rs. 4,301 crore has shown an increase of 4.6% as compared to Rs. 4,113 crore for the previous year. The profit before tax is Rs. 1273 crore (including exceptional item) as compared to Rs. 90.9 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

- Numaligarh to Jorhat Section of NH 37, Assam Contract Value: Rs. 455 crore,

- Indo Nepal Borderto Rudhauli Section of NH-233, Uttar Pradesh Contract Value: Rs. 393 crore

- Jamugurihat-Biswanath Chariali Bypass NH-52, Contract Value: Rs. 392 crore,

- Delhi Metro Tunnel Package CC-66, NCR Contract Value: Rs. 300 crore

- Munirka Flyover, New Delhi Contract Value: Rs. 278 crore,

- Kolkata Elevated Road Contract Value: Rs. 257 crore

- Sawra Kuddu Hydroelectric Project, Himachal Pradesh Contract Value: Rs.180 crore

- Bhandup Complex Pipeline IV, Mumbai Contract Value: Rs.120 crore

- RIL Civil Works, Gujarat Contract Value: Rs. 88 crore

The total balance value of works on hand as on March 31,2015 is Rs.14,451 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 22 packages amounting to around Rs. 13,987 crore (HCC share Rs. 13,673 crore). Tenders for various packages for 45 projects worth over Rs. 36,766 crore (HCC share Rs. 28,583 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 24 projects worth over Rs. 15,606 crore (HCC share Rs. 13,454 crore) which are under evaluation.

Operations of Subsidiaries

i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for opening in April 2016. Projects with renowned hospitality players like Formule One, Holiday Inn, Langham and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant -The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its seventh year of successful operations with an occupancy of 66%. Accor Mercure is in its sixth year of successful operation with an occupancy at 56%. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Additionally agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf Academy and Sir Steve Redgrave Rowing Academy.

On the retail front, a significant area has already been leased. Restaurants like Smokin Joe''s, VenkysXpress, Subway, Cafe Coffee Day, Baskin Robbins, All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchyand Indulge have commenced operations. Many other non F&B outlets such as Mapro, Charosa Wine Boutique and Health First Organic store have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.

Significant progress was made in the education space. Christel House Lavasa is into its sixth year of operations with 445 students. 2014-15 also saw launch of Phase 2 of Christel House till grade 6th. Corporate entities such as EduSports, Yoga Blessing and Linguaphone showed keen interest to contribute towards Christel House Lavasa School by way of sports programmes, educational and Yoga workshops.,

Ecole Hoteliere Lavasa started its sixth batch in 2014- 15. The seventh batch will commence from 28th July 2015. In May 2015, the third batch of the institute graduated and received their certification from Ecole Hoteliere de Lausanne. Christ University started its first batch with 14 students in 2014-15 & is commencing its second batch for the academic year 2015-16 with the target batch size of 60 students for PGDM program with specialization in Finance and Marketing.

Knowledge Vistas Limited (KVL) is already running Little Millennium, pre primary school at Lavasa for last five years. It is also likely to start the k12 school from academic year 2016-17 Abhinav Shiksha Sansthan, New Delhi will start from the academic year 2017-18 across the area of 62,500 sq. ft. Other educational partners like Symbiosis Institute (Pune) are also in the process of launching their programs.

Lavasa continued to enjoy healthy sales in residential and commercial space. In institutional sales, the company closed the transaction with Hindustan Times Media Limited, the premier media establishment which has acquired over 6 acres of land. The media house proposes to establish a state-of-art training centre for its executive staff. A proposal has also been submitted to The Times Group to start a premier management training institute on land it has acquired in Mugaon.

The Doon Public School has acquired a 10 acre plot in Mugaon to start its brand of school. Till the project is completed the school would operate out of an incubation space in Dasve.

Hazel Hotels that had acquired 2 plots of land aggregating to 2.1 acres with BUA of 40,000 sft has been granted building plan approval by SPA and proposes to commence construction of a Ramada Encore branded hotel. J Vora Hospitality is all set for a soft launch of its 80 keys vegetarian hotel in Dasve by December 2015. SOSFIPL, an NGO has obtained SPA approval for a bakery with a BUA of 20,000 sq.ft in Bhoini and will commence construction activity this year.

Symbiosis Institute has already been granted building plan approval and will commence construction of its large campus post monsoon.

Lavasa continued its focus on branding and communication activities in 2014 - 15. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages. Positioning Lavasa city as India''s first smart city, building preference and restoring customer confidence in the project were the key goals.

A new advertisement campaign was launched in May 2014- Unlocking India''s Potential to capitalize on the cause of 100 smart cities. Primary thought behind the campaign that ran from May to June 2014 was that if India needs to grow, infrastructure needs to grow in sync. India needs ''New cities'' and Lavasa is one such new city which can serve as a prototype for creating new cities. This campaign was followed by a Smart City Campaign that positioned Lavasa as India''s First Smart city. The campaign highlighted the various ''smart'' aspects of Lavasa through a nationwide advertising campaign using the Times of India and Hindustan Times group publications. Simultaneously magazines such as Forbes were used to spread this message. The print campaign was ably supported by outdoor, on-site media, digital and social media. Media coverage of the event and interviews with spokespersons resulted in the news being carried by both print and electronic media.

Lavasa continued with its strategy of creating large events at Lavasa to attract the right footfalls. Events held during the year were Martial Arts Festival,

Marathi Box Cricket League, FAME 2014, Freedom 2014, Mirchi Queen Bee, The Lost Party and Gladrags Mrs. India. Digital and social media channels were leveraged primarily for engagement and for information dissemination. The new mobile-friendly website was launched in April 2014 with a contemporary look & feel. Lavasa also initiated e-mailer campaigns to selected databases of Times of India and Hindustan Times and tied up with Google to create ''Google Street view'' for our first town, Dasve

In 2014-15, the Public Relations campaign focused on positioning Lavasa city as India''s first smart city with focused efforts towards building preference and restoring customer confidence in the project. To enable this, a number of site visits were organized

for media, the primary influencers and other key influencers of public opinion. Through the year over 75 journalists from print, TV, news wires and web media from Mumbai, Pune and Lavasa region visited Lavasa. Meetings with senior editors and constant engagement with beat reporters led to better appreciation of company''s stand on issues and presentation of a balanced perspective on most issues. Stories in leading magazines, newspapers and international publications were initiated to convey that development work at Lavasa has commenced with right earnest and that the company is committed to developing the city. Tourism stories in travel and trade media were initiated to promote Lavasa city as a premier tourist destination. Lavasa as a cultural hub was promoted by leveraging travel and lifestyle media to publicize the city''s initiatives like the World Fest 2014, Freedom 2014 and FAME 2014 festival.

Promotional initiatives of various Special Purpose Vehicles like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town & Country Club, Mercure Lavasa Fortune Select Dasve, Lakeshore Watersports and X Thrill were publicized through news stories, editorial feature stories and photo features.

Lavasa city now has a full-fledged operational Farmer''s market known as Hara Bazaar; a two screen movie theatre for visitors and residents; It has a fully operational post office, a hospital with pharmacy and several new food and beverage establishments open for business. It also has four operating hotels and four additional hotels will be opening soon which collectively will take the total number of hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two Bank branches along with ATMs, a Convention Centre, a public safety centre with Fire engine, Police outpost to be upgraded to a full-fledged police station, Tourist information center with a Hop On - Hop Off Bus facility, Multilevel Car parking facilities, Nature trail, Citizen contact center with 24x7 support to citizens through emergency and non-emergency contact numbers, rental housing for low income groups, simulated golf course facilities; water sports facility with latest "Jetovator'',''adventure sports facility, a modern club with gym, sports and spa facilities, public transport system for citizens, Schools for local population and two operational College campuses.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. The drinking water at Lavasa is fit for

consumption, straight from the tap, without the need for additional filtration. The sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50km. of well maintained motor able roads are operational and more being constructed, Lavasa has already opened parks and play areas to the public.The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

Around the clock Lavasa Citizen Call Centre has been operational since 2009-2010. The Call Centre is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customer needs and visitor requests, be involved in proactive information distribution, data collection and management services, customer satisfaction surveys and customer handover and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting. It is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, Public Works, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The City Management Services Department envisions to slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. It meets on a monthly basis with a committee of villagers from throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

Lavasa Corporation has 10574 acres of land including 455 acres of land on lease.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. The Environmental Compliance Report is being submitted to MoEF once in six months. The last report was submitted in December 2014 and work of Biodiversity conservation and enhancement continues at the

required pace. Lavasa Sustainability report for the period 2010-13 was prepared and accorded highest rating application level A as per GRI guidelines.

Lavasa also became a member of Cll-Western Region Sub-Committee for Environmental Business and has contributed its learning and experience within the region.

First town, Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services which are operational. Till date more than 801 residential units have been handed over to CMS department and over 677 residential units have been handed over to customers. Work on rest of few properties - Lake View apartments, Club View apartments, Delfino apartments, Valley View apartments, BrookViewapartments, Rental housing, Retail and hostel tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in progress.

Work on the infrastructure for the second town of Mugaon has been accelerated. Work on utilities like water, sewer, power, data lines and on the approach road is in progress. Work on 29 buildings at Mugaon has commenced. The improvement to the existing Mugaon-Tamhini Zilla Parishad road is complete. The portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. Work on the inter village road from Mugaon to Dhamanohol is complete (6 kms).

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 62 locations on a daily basis. Calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.

Ministry of Environment and Forests (MOEF) Issue

As you are aware that Lavasa was issued a show cause Notice by Ministry of Environment & Forests (MoEF), Government of India (GOI) regarding violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). The Company made various representations as per the directions given by the authorities and after complying the conditions stipulated, MOEF GOI was pleased to accord the Environmental Clearance to the Company. Herein below given are the updates in the matter during the Financial Year 2014 - 2015:-

1. Transfer Petition (C) No. 1326 of 2012 filed by your Company for transferring the National Green Tribunal (NGT) Appeal No. 9 of 2012 filed by Dyaneshwar Shedge was listed before the Registrar for completing the pleadings. Earlier, the Hon''ble Supreme Court, vide its order dated October 19, 2012, stayed the proceeding before NGT The Transfer Petition was listed before Hon''ble Supreme Court on August 04, 2014, wherein after hearing the parties in the matter, the Hon''ble Supreme Court was pleased to pass the following order:-

"Looking at the facts of the cases, we are of the view that these petitions should be heard either by the Green Bench or by another appropriate Bench. The Registry to place the matters before the Hon''ble the ChiefJustice oflndia so that appropriate orders may be passed."

The Company''sTransferPetition (C) No. 1326 of

2012 along with Civil Appeal being No. 4280 of

2013 and Contempt Petition being No. 203 of 2013 filed against Dyaneshwar Shedge are pending before the Hon''ble Supreme Court for disposal.

2. NGT Appeal No. 36 of 2011 filed by the Company was listed on October 16, 2014 and the Hon''ble Tribunal was pleased to adjourn the matter sine-die till decision of Apex Court.

3. The record and proceedings in NGT Appeal No. 9 of 2012 filed by Dyaneshwar Shedge have been transferred to Hon''ble Supreme Court in view of the stay granted by Apex Court.

4. Public Interest Litigation (PIL) No. 129 of 2014 filed by Suniti S R and others (Petitioners), wherein the Company is Respondent No 12, was listed before the Hon''ble Bombay High Court on August 11, 2014, wherein the Hon''ble Court issued "Rule"

in the matter without passing any adverse order against the Company. The Company has filed further Affidavit in Reply in the matter on October 01,2014.

The Petitioners have on December 10, 2014 filed a Civil Application being No. 186 of 2014 for amending the PIL interalia to challenge Environmental Clearance grated to your Company. On December 16, 2014 PIL No. 129 of 2014 was tagged with Writ Petition No. 3836 of 2014 and the same stands adjourned. Meanwhile the Company is in the process of filing reply to the Civil Application No. 186 of 2014, and the matter is currently pending.

Further, the Company is regularly filing six monthly compliance report as per the Environmental Clearance order.

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into the business of building residential & office complexes in real estate sector.

HRL (Thane) Real Estate Limited

HRL (Thane) Real Estate Ltd. a subsidiary of HREL initiated the acquisition of 183 acres of land at Ghodbunder Road, Thane for Integrated Township Development. Till date, the Development Agreement and Power of Attorney for 32 acres have been executed in favour of the Company. The Company continued its activity of securing its position for land title and other documentation.

The Company has filed a criminal case against Mr. Atul Sonawala and 8 others, Director of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is under process for the said case.

HRL Township Developers Limited

No activities were carried out during the year. Company continued its search process for joint development opportunities

NashikTownship Developers Limited

During the year, the Company has sold its land and completed all the land related transactions. For further opportunities, the Company is looking for joint development opportunities in residential sectors since Nashik city is growing industrially as well as economically.

Maan Township Developers Limited

Maan Township Developers Ltd a subsidiary of HREL has acquired approximately. 28 acres of land by way of purchase and the Development Agreement and Power of Attorney have been executed in favor of the Company.

The company has now decided to sell the land in piece parcels. Powai Real Estate Developers Limited

No activities were carried out during the year. However, the company continued to look for an opportunity to find ideal land parcels for joint development in residential sectors.

HCC Realty Limited

No activities were carried out during the year. Panchkutir Developers Limited

During the year, your Company continued its efforts on the following projects in the residential sector.

Development of Vikhroli (E) land parcel: Out of the total land holding of around 32 acres by Panchkutir Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-1 of 14.5 acres of land to ascertain the development potential of the free sale component is completed. Out of the 1960 slum residents, consent of about 1400 residents representing more than 70% has already been obtained and the process for forming the society is in progress.

Slum declaration of Phase-1 land was challenged and the same has been set aside by the Special Slum Tribunal. Subsequently, the litigant filed a Writ Petition challenging the above said Order of the Slum Tribunal in Bombay High Court . The High Court upheld the 3C order and asked the Tribunal for actual verification of slum details. Against this order, the litigant has filed an appeal challenging the above said Order of the Slum Tribunal on divisional board in High Court.

Development of Powai land: MOU-cum-Development Agreement and Power of Attorney were executed by the land owner in favour of the Special Purpose Vehicle , Panchkutir Developers Ltd., a subsidiary of HCC for 12 acres of land. Due to non performance by the land owner of the various obligations under the MOU- cum-Development Agreement in spite of repeated reminders, the company has been legally advised to invoke the Arbitration clause forming part of the MOU- cum-Development Agreement. Accordingly, Arbitration proceedings have been initiated and till date recording of the evidence of Claimant''s witnesses has been completed and the matter is now stated for hearing in July 2015 for evidence of Respondent.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned

subsidiary of your Company, develops and operates infrastructure concessions in transportation, power and water sector through its subsidiaries, viz.

HCC Concessions Ltd., HCC Power Ltd., and HCC Operations & Maintenance Ltd. The current portfolio has six NHAI road concessions, totaling about Rs.5,500 crore, housed under HCC Concessions.

Your Company''s focus on sustainable and responsible development through the Public Private Partnership results from expertise in concept innovation, risk analytics, construction management and operations. The strong management team at the Company follows a strict investment discipline to create value for its members. Along with a focus on financial discipline, quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

In 2011, the Xander group, a global investment firm, valued HCC Concessions Limited at Rs.1,650 crore and had acquired a 14.5% stake therein.

Current Road Portfolio:

HCC Concessions has a current portfolio of Rs. 5,500 crore which includes six NHAI road concessions. These include one annuity and five toll based projects: Nirmal (annuity) in Telangana (erstwhile Andhra Pradesh) on NH7, the Delhi Faridabad Elevated Expressway (dfskyway™) on NH2, Dhule Palesner Highway in Maharashtra on NH3 and three contiguous sections of 250 km in West Bengal on NH34. Of these, Nirmal Annuity, diskyway™, Dhule Palesner Highway and the first leg of NH34''s development, the Baharampore Farakka Highway are operational.

The four operational projects have been operational for between one and five years and are running smoothly. Farakka Raiganj Highway, the second leg of NH-34 development in West Bengal is expected to be operational later this year while the last leg, Raiganj Dalkhola has seen significant improvement in terms of land acquisition and work is expected to start shortly. Material defaults by NHAI, largely due to delayed handing over of land for all three NH-34 packages have resulted in the Concessionaire''s filing of a claim of Rs. 883 crore as damages from NHAI as on June 30, 2014. Despite the aforementioned delays and a recessionary environment in the past few years, the NH-34 projects continue to be a substantial source of value creation for the portfolio.

During the past year, there was very limited opportunity for new projects since only about 740 km were awarded by NHAI. HCC Concessions has chosen to focus on the execution of its under construction projects and also raise capital through stake sale at attractive valuations.

The Company will evaluate NHAI projects in the next financial year, albeit conservatively, while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH-3)

The project road is part of NH-3, commonly referred to as the Agra-Mumbai road, originating from Agra and ending at Mumbai. It is a primary conduit for transportation of passengers as well as freight traffic from the state of Uttar Pradesh to major towns in the states of Madhya Pradesh and Maharashtra. In FY09, NHAI awarded a contract for the development of a four lane highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to an HCC led consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months. The project was operational in February 2012, about 4 months ahead of its scheduled completion. The project has been developed at a total investment of Rs. 1,420 crore.

The operation of project road is running smoothly. During the year, the Company implemented the 10x tolling for Overloaded vehicles in line with the NHAI Fee Rules. NHAI also handed over the land for the Developed Section from Km 219.7 to Km 233.0 after a delay of 1.5 years. The contractor has started the mobilization and is expected to finish the work on the remaining 2 lanes within six months. The daily toll revenue is expected to increase by about Rs. 2-3 lakhs after this development. The remaining concession period for the project is about 13 years.

Pursuant to the interest expressed by the Sadbhav Group to acquire the Company''s stake in the SPVs, the Company has also entered into definitive agreements with the Sadbhav Group for the sale of its entire economic stake in Dhule PalesnerTollway Ltd. The transaction is subject to receipt of necessary approvals.

Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™ )

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway

connecting Delhi and Haryana at Badarpur. This award winning engineering marvel designed and developed by HCC Concessions Ltd with an investment of nearly Rs. 600 crore boasts 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. The dfskywa/M contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor that benefits residents and inter-state traffic alike.

The project''s concession period is 20 years, including construction period of 24 months. Of the three satellite cities, Faridabad is under-developed and under-priced relative to other parts of NCR. However, since the development of this asset, there has been a 30-40% increase in property prices (2008-10).

Besides, Faridabad has been ranked as the 8th fastest developing city by The City Mayors Foundation. This asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBC TV18.

In February 2013, this SPV has undergone restructuring of its debt due to revenues falling short of projections which is mainly attributed to the prolonged economic slowdown in the country (coinciding with COD) and the existence of toll free local road, which is being used by the long distance vehicles to escape paying toll charges.

In order to enhance the revenue on this project and reduce maintenance costs, the Company is in the process of implementing 10x tolling for overloaded vehicles in accordance with NHAI Fee Rules. The Company has also submitted a comprehensive proposal for advertising along the project highway. The project is a signature project in Delhi having very high visibility and the Company is expecting significant revenues from the latter sources.

Nirmal Annuity (NH-7)

This project road from Kadtal to Armur inTelengana (erstwhile Andhra Pradesh) is a part of the Nagpur- Hyderabad section of NH-7 In FY07, NHAI awarded the development of four-laning of 30 km long Kadtal Armur Section of NH-7 on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore. This project was operational in July 2009, 100 days ahead of the scheduled completion

date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for a 17 year tenure.

As part of the capital raising activity, the Company has signed definitive agreements for the 100% sale of this project to Highway Concessions One Pvt Ltd (an entity majorly held by IDFC Alternatives managed India Infrastructure Fund). Highway Concessions One will acquire a 74% equity stake upfront, while the remaining 26% shall be acquired upon receipt of an approval from NHAl.The Company is working towards the fulfillment of conditions precedent and the transaction is expected to close shortly.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed efficiently by HCC Operations and Maintenance Ltd.

Baharampore Farakka Highway (NH-34)

This 101 km project is the first section of 250 km contiguous section on NH-34 (West Bengal) from Baharampore to Dalkhola and was awarded to the Company in 2010.

NH34 provides nearest access to Kolkata and Haldia ports for the north eastern states of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises 85-90% commercial traffic, carrying a diversified mix of manufactured goods, building materials, steel, jute, food grains and tea.

The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680.

The project achieved commercial operations in May 2014 and has been tolling smoothly. The operations and maintenance is being managed by HCC O&M Ltd. The Company implemented the 10x tolling for overloaded vehicles on this project in August 2014 to enhance revenue and reduce maintenance costs and was amongst the first few in the country to implement the same.

The completion of the project is delayed by 22 months as of March 2015, largely due to material defaults by NHAI in providing land on a timely basis. Provisional Completion (PCOD) was achieved 9 months after SFLD (Scheduled Four-laning Date) and Final Completion (FCOD) will be delayed by a total of 35 months due to delayed handover of Right of Way (ROW), tardy design clearances for major bridges and structures, removal

of various hindrances, utilities shifting, etc. As of June 30, 2014, the Concessionaire has filed Rs. 290.85 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority will be a lengthy process, the SPV meanwhile approached its Lenders in August 2014 to assist in funding the delays and has subsequently received support from its Lenders.

The concession period for the project is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,169 crore.

As part of its capital raising activity, the Company has entered into a non-binding Term Sheet for the sale of 100% stake in the project, subject to requisite clearances and approvals. The proposed transaction is expected to close by the end of Q1FY16 after the diligence process and documentation is completed.

Status of Assets under Development:

Farakka Raiganj Highway (NH-34)

The project road starts from Farakka at Km 294.680 and ends at Raiganj at Km 398.000. The Farakka Raiganj section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,378 crore.

A substantial stretch (79%) of roads and structures of this second and largest leg of NH-34 development has been completed and toll collection is expected to commence by the year end. In the last year, almost the entire land has been made available for construction after a long delay. The completion of the project is delayed by 22 months as of March 2015, largely due to material defaults by NHAI in providing land on a timely basis. The Provisional Completion (PCOD) is estimated to be achieved 29 months after SFLD (Scheduled Four-laning Date) while Final Completion (FCOD) will be delayed by a total of 37 months due to delayed handover of Right of Way (ROW), tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. As of June 30, 2014, the Concessionaire has filed Rs. 322.72 crore of

claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims tor increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile approached its Lenders in August 2014 to assist in funding the delays and has subsequently received support from its Lenders.

Raiganj Dalkhola Highway

This is the northern section of the NH-34 development, starting at Raiganj (Km 398.000) and terminating at the town of Dalkhola (Km 452.750). The 50 km project stretch traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years which includes a construction period of 30 months. The project is being implemented with an investment of Rs. 684 crore.

The project progress has been very slow due to the non-availability of land. In the year 2014-15, a significant portion of land has been made available for construction after a delay of over 4 years. The Company expects to receive 80% of unencumbered vacant land in the coming months when execution will restart. As of June 30, 2014, the Concessionaire has filed Rs. 269.31 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile has approached its Lenders in February 2015 to assist in funding the delays and has subsequently received positive indications from its Lenders.

iv) Steiner AG, Switzerland

Steiner AG is a leading total and general contracting company in Switzerland, specialized in turnkey building construction including refurbishments and real estate development.

Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.

In FY2014-15, Steiner AG has registered a revenue of CHF 853.9 million (Rs. 5604.2 crore) compared to CHF 796.7 million (Rs. 5,228.7 crore) in the previous year.

The net profit stood at CHF 1.7 million (Rs. 11.2 crore) compared to CHF 8.15 million (Rs. 53.4 crore). The company secured fresh orders worth CHF 796 million

(Rs. 5,106 crore). The order backlog was CHF 1.12 billion (Rs. 7195 crore) at the end of the year. In addition to this, the company has secured orders for more than CHF 192 million (Rs. 1,232 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 103 million (Rs. 658.5 crore) reflecting company''s steady financial performance and strong liquidity position.

v) HighbarTechnologies Ltd

HighbarTechnologies Ltd (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

Highbar was able to service 16 new customers including 6 new customers from Middle East, Africa and Switzerland taking the total tally of clients to 94. This has been achieved at a time when the primary customer segment, the construction industry, is facing multiple challenges. Despite this, in a short span of time, Highbar has started dominating the ''IT for Infrastructure'' market. Your Company''s group legacy has enabled Highbar to understand and service these industries effectively. The orders won by Highbar have contributed highest value through net new customers in SAP Ecosystem for infrastructure sector in calendar year 2014. Highbar has started providing SAP related services in multiple sectors like Manufacturing, BPO, Agro-Chemicals in addition to Infrastructure, Real Estate, Retail, Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron & Steel etc. It has developed capabilities to execute successfully very large size projects concurrently. Customers have demonstrated their faith in Highbar for a long term association by awarding 5 years support deal in addition to implementation.

After securing first order in last year, Highbar has started expanding its reach in government sector by exploring opportunities. Its Dubai subsidiary, Highbar Technologies FZ-LLC, has now started strengthening its presence counting ten major customers in the Middle- East in a short span of time. Highbar now operates not only in India and Middle-East but also in Africa (Nigeria) and Europe (Switzerland).

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence and dashboards, cloud offerings through Highbar CloudConnect,

Employee Portals, CRM (Customer Relationship Management), DMS (Document Management System) and others. Highbar has also ventured into SAP HANA implementation thisyear. Newofferings like SAP Fiori, Screen Persona, Mobility solutions, e-procurement through Ariba sourcing solutions have increased the breadth of the offerings for the customers. The stack of services provided by Highbar has gone much beyond SAP into process consulting and IT Infrastructure support (data-centre, networking etc.) Solutions like Highbar RapidStart and Highbar RapidStart Analytics are based on the templatised approach for ERP and Business Intelligence respectively and are intellectual properties (IP) assets of Highbar. Highbar has maintained a strategic alliance with SAP at the level of ''Gold Partnership'' and it''s a preferred partner for SAP implementation and even reimplementation for the infrastructure industry. More than ten of Highbar''s implementation have now become global case studies, published on SAP''s website as reference implementations.

Highbar, the spin-off from your Company''s internal IT function, has succeeded, when the success rate of such experiments is just 5% globally & in India. Highbar has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

5. Subsidiaries, Joint Ventures and Associate Companies

As of 31st March 2015, the list of Subsidiaries, Joint Ventures and Associate Companies of your Company is as follows:-

Subsidiary Companies

1. Western Securities Ltd

2. HCC Aviation Ltd

3. HCC Construction Ltd

4. Highbar Technologies Ltd

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited 7 HCC Mauritius Investment Limited

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM ST AG

11. Eurohotel SA

12. Steiner (Germany) GmbH

13. Steiner Leman SAS

14. SNC Valleiry Route De Bloux

15. Steiner India Ltd

16. HCC Infrastructure Company Ltd

17 HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

18. Nirmal BOT Ltd

19. Badarpur Faridabad Tollway Ltd

20. Baharampore - Farakka Highways Ltd

21. Farakka-RaiganjHighwaysLtd

22. Raiganj - Dalkhola Highways Ltd

23. Dhule Palesner Operations & Maintenance Ltd

24. HCC Power Ltd

25. HCC Operations & Maintenance Ltd

26. Narmada Bridge Tollway Ltd 27 HCC Real Estate Ltd

28. HRL Township Developers Ltd

29. HRL (Thane) Real Estate Ltd

30. NashikTownship Developers Ltd

31. Maan Township Developers Ltd

32. CharosaWineriesLtd

33. Powai Real Estate Developers Ltd

34. HCC Realty Ltd

35. Pune-Paud Toll Road Company Ltd

36. Panchkutir Developers Ltd 37 Lavasa Corporation Ltd

38. Lavasa Hotel Ltd

39. Apollo Lavasa Health Corporation Ltd

40. Lakeshore Watersports Company Ltd

41. Dasve Convention Centre Ltd

42. Dasve Business Hotel Ltd

43. Dasve Hospitality Institutes Ltd

44. LakeviewClubsLtd

45. Dasve Retail Ltd

46. Full Spectrum Adventure Ltd 47 Spotless Laundry Services Ltd

48. Lavasa Bamboocrafts Ltd

49. Green Hill Residences Ltd

50. My City Technology Ltd

51. Reasonable Housing Ltd

52. Future City Multiservices SEZ Ltd

53. Rhapsody Commercial Space Ltd

54. Valley View Entertainment Ltd

55. Sirrah Palace Hotels Ltd

56. Warasgaon Tourism Ltd

57 Our Home Service Apartments Ltd

58. Warasgaon Power Supply Ltd

59. Sahyadri City Management Ltd

60. Hill City Service Apartments Ltd

61. Kart Racers Ltd

62. Warasgaon Infrastructure Providers Ltd

63. Nature Lovers Retail Ltd

64. Osprey Hospitality Ltd

65. Starlit Resort Ltd

66. Warasgaon ValleyHotelsLtd 67 Rosebay Hotels Ltd

68. Mugaon Luxury Hotels Ltd

69. Warasgaon Assets Maintenance Ltd

70. Hill ViewParkingServicesLtd

71. Whistling Thrush FacilitiesServices Ltd

72. Verzon Hospitality Ltd Joint Ventures

1. HCC-L&TPuruliaJoint Venture

2. HCCSamsungJoint Venture

3. AlpineSamsungHCCJoint Venture

4. AlpineHCCJoint Venture

5. NathpaJhakriJoint Venture

6. Kumagai -Skanska-HCC Itochu Group

7. Dhule Palesner Tollway Limited

8. AGRE Prime Tower Associate Companies

1. Vikhroli Corporate Park Pvt Ltd

2. Warasgoan Lake View Hotels Limited

3. Andromeda Hotels Limited

4. Ecomotel Hotel Limited

5. Knowledge Vistas Limited

6. Bona Sera Hotels Limited

7. Evostate AG

8. Projektentwicklungsges Parking AG.

9. MCR Corporation Real Estate AG

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company form part of the Consolidated Financial Statements of the Company for the financial year ended 31st March 2015 and hence are not repeated here for the sake of brevity.

The Company has also formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/ HCC Policy for determining Material Subsidiaries.pdf

6. Qualified Institutions Placement of Equity Shares (QIP) / Change in Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

Pursuant to the conversion of 3,92,15,686 warrants by the Promoter Companies i.e. Hincon Holdings Ltd and Hincon Finance Ltd , 3,92,15,686 equity shares of Rs. 1/- each, in aggregate, was alloted by your Company to the aforementioned Promoter Companies, at a conversion price of Rs. 16.32/- per equity share (including premium of Rs. 15.32/- per equity share) the Company''s paid up Equity Share Capital increased from Rs. 60,66,10,420/- comprising 60,66,10,420 Equity Shares of Rs.1/- each to Rs. 64,58,26,106/- comprising 64,58,26,106 equity shares of Rs. 1/- each.

After the close of the financial year under review, on April 10, 2015, your Company has issued and allotted 13,33,32,800 Equity Shares of Rs.1/- each at an issue price of Rs. 30/- per Equity Share (including premium of Rs. 29/- per equity share) for an amount aggregating Rs. 399,99,84,000/-to Qualified Institutional Buyers in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended and Section 42 of the Companies Act, 2013 and the rules made thereunder.

Post the QIP Issue, the paid up Equity Share Capital of the Company is Rs. 77,91,58,906/- which comprises 77,91,58,906 Equity Shares of Rs. 1/- each.

7 Public Deposits

Your Company has not accepted any deposits from the public, or its employees during the year under review.

8. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Also, pursuant to Clause 32 of the Listing Agreement, the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

9. Employee Stock Option Scheme (ESOP)

As on March 31,2015, 32,39,330 stock options are outstanding , in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, no options got vested in the employees of the Company. 14,55,470 stock options got lapsed between April 1,2014 and March 31,2015.

The particulars with regard to the ESOP as on March 31,2015 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.

10. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31,2015, 17,300 GDSs have remained outstanding which forms part of the existing paid up Equity Share Capital of the Company.

11. Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in this Annual Report.

12. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India(SEBI).

The report on Corporate Governance as per the requirement of the Listing Agreement forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

13. Directors

As per the provisions of Section 152 of the Companies Act, 2013, Mr. D. M. Popat, Director of the Company retires by rotation at the ensuing Annual General Meeting. However, Mr. D. M. Popat has expressed his intention not to seek re-election as a Director of the Company.

During the year under review, the Board of Directors of the Company at its Meeting held on July 31,2014, appointed Ms. Harsha Bangari as Nominee Director (Nominee of Exim Bank) w.e.f. July 31,2014.

Based on the recommendation of the Nomination and Remuneration Committee and after reviewing the declarations submitted by Mr. Rajas R. Doshi and Mr. Anil C. Singhvi, Independent Directors, the Board of Directors of the Company by way of resolution dated March 17, 2015 passed by circulation, formed an opinion that the said Directors meet with the criteria of Independence as per Section 149(6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meet with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, for being appointed as the Independent Directors on the Board of the Company.

Mr. Rajas R. Doshi and Mr. Anil C. Singhvi, who were appointed as "Directors liable to retire by rotation" under the provisions of the erstwhile Companies Act, 1956 and who qualify for being appointed as Independent Directors of the Company are proposed to be appointed at the ensuing Annual General Meeting as Independent Directors of the Company under section 149 of the Companies Act, 2013 for the period w.e.f. March 17, 2015 upto the conclusion of the 93rd Annual General Meeting of the Company to be held in the calendar year 2019.

On the recommendation of the Nomination and

Remuneration Committee and after reviewing the declaration submitted by Dr. Omkar Goswami, Independent Director, the Board of Directors of the Company at its Meeting held on April 30, 2015 formed an opinion that the said Director meets with the criteria of Independence as per Section 149(6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meets with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges and accordingly appointed Dr. Omkar Goswami as an Additional Director to hold office as an Independent Director of the Company w.e.f. April 30, 2015 upto the conclusion of the 93rd Annual General Meeting of the Company to be held in the calendar year 2019.

The Board of Directors at its Meeting held on April 30, 2015, on the recommendation of the Nomination and Remuneration Committee, appointed Ms. Shalaka Gulabchand Dhawan as Additional Director and also as Whole-time Director of the Company for a period of five years w.e.f. April 30, 2015, subject to the approval of the Members of the Company.

Your Company has received the requisite disclosures / declarations from Mr. Rajas R. Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms. Shalaka Gulabchand Dhawan as required under the relevant provisions of the Companies Act, 2013.

Your Company has also received Notices under Section 160 (1) of the Companies Act, 2013 from members signifying their intention to propose Mr. Rajas R.

Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms. Shalaka Gulabchand Dhawan as candidates for the office of Independent Director / Director at the ensuing Annual General Meeting.

Further, your Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

Profiles of the Directors seeking appointment have been given in the Notice of the ensuing Annual General Meeting of the Company.

14. Key Managerial Personnel

During the year under review, in addition to Mr. Ajit Gulabchand, Chairman and Managing Director and Mr. Rajgopal Nogja, Group COO & Whole-time Director of the Company, the following three Senior Executives of the Company were formally appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013

i) Mr. Arun V. Karambelkar was appointed as President & Chief Executive Officer - E&C w.e.f. April 29, 2014

ii) Mr. Praveen Sood was appointed as Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office w.e.f. April 29, 2014

Hi) Mr. Vithal P Kulkarni to continue to act as Company Secretary of the Company.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2015 are mentioned in the Extract of the Annual Return which is attached to the Board''s Report.

15. Board Committees

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 /Listing Agreementviz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, CSR Committee and ESOP Compensation Committee.

During the year under review, in compliance with the provisions of Clause 49 of the Listing Agreement, the Board had also constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.

16. Nomination and Remuneration Policy

The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and the Remuneration Policy of the Company is attached to the Board''s Report as Annexure II.

17 CSR Policy

The Corporate Social Responsibility Policy recommended by the CSR Committee of the Directors has been approved by the Board of Directors of the Company. The same is available on the website of the Company i.e. www.hccindia.com and is also attached to this Report as Annexure III.

The disclosure relating to the amount spent on Corporate Social Responsibility activities of the Company for the financial year ended 31st March 2015 is attached to this Report as Annexure IV.

18. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.

The Board of Directors of your Company met 4 times during 2014-15. The meetings were held on May 2, 2014, July 31,2014, October 30, 2014 and January 29, 2015. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

19. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any ;

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended on that date.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are operating effectively

f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and are operating effectively.

20. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

21. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has, during the year under review, transferred a sum of Rs. 9,17,451/- to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2005-06 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

22. Particulars of Employees and other additional information.

The information required under Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as Annexure V. The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure.

Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

23. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.

24. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of

the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the abovesaid AGM).

Rule 3(7) of Companies (Audit and Auditors) Rules,

2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.

In view of the above, the existing appointment of M/s Walker Chandiok & Co. LLR Chartered Accountants, Mumbai covering the period from the conclusion of this ensuing AGM until the conclusion of the next Annual General Meeting to the held in the FY 2016-17, is being placed for members'' ratification.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made thereunder, as may be applicable.

25. Auditors'' Report

The Auditors'' Report to the Members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

26. Secretarial Audit

Secretarial Audit for the FY 2014-15 was conducted by M/s BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

27. Cost Audit

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on 31st July 2014 had appointed M/s Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the FY 2014-15.ln terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the

remuneration of the Cost Auditors has to be ratified by the members. Acordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for FY 2014-15.

28. Risk Management

Pursuant to the requirement of Section 134 of the Companies Act, 2013, the Company has already in place a Risk Management Plan.

The Company has a robust Business Risk Management (BRM) framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance your Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level.

In accordance with the provisions of Clause 49 of the Listing Agreement, your Company has also constituted a Risk Management Committee.

29. Significant and material Orders passed by the Regulators/Courts, if any

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations.

30. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

31. Vigil Mechanism Policy

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company.

32. Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p),

149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual Performance Evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

33. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 18, 2015, inter- alia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non- Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

34. Related PartyTransactions

All related party transactions attracting compliance under Section 188 and / or Clause 49 of the Listing Agreement are placed before the Audit Committee as also before the Board for approval.

Prior omnibus approval of the Audit Committee is also sought for transactions which are of a foreseen and repetitive nature.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company i.e. www.hccindia.com

Pursuant to the approval vide Board Resolution dated May 2, 2014 and Special Resolution passed by the Members of the Company at the 88th Annual General

Meeting of the Company held on June 20, 2014, the remuneration payable to Mr. Arjun Dhawan, President & CEO - Infrastructure Business relative of Mr. Ajit Gulabchand, Chairman and Managing Director of the Company, who is holding office or place of profit in the Company, was revised w.e.f. November 1, 2014. During the year under review, the remuneration paid to Mr. Arjun Dhawan, President & CEO - Infrastructure Business of the Company was Rs. 2.92 crore.

The disclosures on related party transactions are made in the Financial Statements of the Company.

35. Extract of Annual Return

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.

36. Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

37 Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJIT GULABCHAND Chairman & Managing Director

Registered Office:

Hincon House, 11th Floor, 247Park, Lai Bahadur Shastri Marg Vikhroli (West) Mumbai 400 083

Place : Mumbai Date : April 30, 2015


Mar 31, 2014

The Directors are pleased to present the 88th Annual Report together with the Audited Financial Statements for the year ended March 31, 2014.

2. Financial Highlights

Year ended Year ended Particulars March 31, 2014 March 31, 2013 Rs. crore Rs. crore

Turnover 4,113.49 3,837.29

Profit before Interest, Depreciation, Exceptional Items, Other 643.76 378.57

Income and Tax

Less: Interest 607.94 544.10

Depreciation 144.61 163.40

Exceptional Items - 752.55 (15.58) 691.92

Add: Other Income 213.59 134.34

Add/Less: Exchange Gain/(Loss) (13.85) (14.57)

Profit/(Loss) before Tax 90.95 (193.58)

Less: Deferred Tax Charge/(Credit) 10.31 (55.94)

Profit/(Loss) after Tax 80.64 (137.64)

Add: Balance brought forward from previous year (11.64) 126.00

Balance carried to Balance Sheet 69.00 (11.64)

3. Dividend

As the Company is under Corporate Debt Restructuring (CDR), your Directors have not recommended any dividend for the financial year ended March 31, 2014, although the Company has earned profits in the year under review.

4. Operations

The turnover of the Company at Rs. 4,113 crore has shown an increase of 72% as compared to Rs. 3,837 crore for the corresponding period in the previous year. The profit before tax is Rs. 90.9 crore (including exceptional item) as compared to loss of Rs. 193.6 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

- Vishnugad-Pipalkoti Hydroelectric Project, Uttarakhand

Contract Value: Rs. 1597 crore

- Railway LinkTunnel T49 A, Jammu and Kashmir Contract Value: Rs.442 crore

- Bridge across River Sone, Bihar Contract Value: Rs.432 crore

- Yettinahole Project, Package IV

Contract Value: Rs. 904 crore, HCC share 50%

The total balance value of works on hand as on March 31, 2014 is Rs. 14,249 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 13 packages amounting to about Rs. 7,038 crore (HCC share Rs. 6,054 crore). Tenders for various packages for 29 projects worth over Rs. 18,972 crore (HCC share Rs. 13,696 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 26 projects worth over Rs. 20,439 crore (HCC share Rs. 17,747 crore) which are under evaluation. Operations of Subsidiaries

i) Lavasa Corporation Ltd. (''Lavasa'') has kept its rationale of developing an inclusive city for all and is tailoring partnerships and tie ups with global leaders in their respective sectors. Tie-ups continued strongly at Lavasa through 2013-14. Partnerships are well in place and many of these projects are fast moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for completion by 2015. Projects with renowned hospitality players like Pullman, Hyatt, Formule One, Holiday Inn, Holiday Inn Express, Langham Place and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant -The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its fifth year of successful operations. Dasvino Town & Country Club, which had a grand launch in early 2010 is growing steadily with growing number of membership. In the tourism space, Lakeshore Water sports, Neo Spark Games Arcade and Xth rill Adventure Sports & Academy are also functioning successfully. Agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf and Sir Steve Redgrave Rowing Academy.

On the retail front, a significant area has already been leased.

In addition to F&B outlets, many other tie-ups have been finalized in the retail segment which include Bata Showroom, Charosa Wine Boutique, Fun Square Digital Cinema, Venkys Express and Keppys.

There were other tie-ups in the tourism space. Lavasa is in advance stage of discussion with Paramount & Redbull to create Edutainment theme park in Dasve & Mugaon. Along with this stimulator Golf & Robotic park for edutainment is started in Family Entertainment Center (FEC).

A significant progress was also made in the education space. Christel House Lavasa is into its fourth year of operations with 329 students. 2013-14 also saw launch of Phase 2 of Christel House till grade 5th.

Ecole Hoteliere Lavasa started its fifth batch in 2013- 14. The second batch will receive academic certification from Ecole hotèlierè dè Lausanne this year.

Doon Public School has signed a MOU to operate K12 school in Knowledge Vistas Limited (KVL) from FY 2014-15. KVL is already running Roots to wings, pre primary school at Lavasa for last three years. PACE academy will also start IIT training program from KVL this year. GREAT (INDIA) in collaboration with Australian Retail College, which is a leader in retail training in Australia is planning to open a retail college at Lavasa. Other educational partners like Symbiosis Institute (Pune) and Christ University (Bangalore) are also in the process of launching their programs. Discussions are on to establish North Hampton University at Lavasa by 2014-15 as well as preparation course school under Ideal classes from 5th to 12th standard.

Lavasa continued to enjoy healthy sales in residential and commercial space. Positive sales trend continued throughout the year, with the Company giving possession to 250 plus residential units in Dasve. Construction activity on various properties at Dasve and the second town of Mugaon is progressing at a fast pace.

In institutional sales, L&T Infra Finance has entered into an understanding to buy 40 acres of land in Dasve and Mugaon. This heralds the entry of big time corporations into Lavasa and would surely prove as an impetus for others. Similarly, Hindustan Times, the premier media establishment is in advanced negotiations to acquire over 6 acres of land. The media house proposes to establish a state-of-art training centre for its executive staff. A proposal has also been submitted to The Times Group to start a premier management training institute on land it has acquired in Mugaon a few years ago. The Doon Public School has acquired a 10 acre plot in Mugaon to start its brand of school. Till the project is completed the school would operate out of an incubation space in Dasve.

Symbiosis Institute has already been granted building plan approval and will commence construction of its large campus post monsoon.

Lavasa continued its focus on branding and communication activities in 2013-14. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages.

The focus of the exercise was on building preference and restoring customer confidence in the project. To enable this, a number of site visits were organized for media, the primary influencers and other key influencers of public opinion.

A new advertisement campaign was launched in September 2013 to promote the second town Mugaon as a residential and edutainment hub. The print campaign positioning Mugaon as the entertainment hub was ably supported by outdoor, on-site media, digital and social media. The comprehensive campaign helped generate awareness for the launch and resulted in a good number of customer enquiries.

A new format of Brand Induction was implemented where all new employees were exposed to an interactive workshop on KNOWYOUR CITY To promote tourism and drive footfalls, attractive day and stay packages and activities were offered to visitors through the Lavasa Holidays Summer Special (April to June 2013), Mesmerizing Monsoon (July to September 2013) and Lavasa Holidays Festive Fiesta (October to December 2013) packages. The focused campaign resulted in tourist traffic surging to all time high. At the onset of monsoon in June, Lavasa witnessed the highest footfall with nearly 1 lakh tourists enjoying the serene landscape. Total footfalls in the calendar year were 7,74,300.

Lavasa won the ''Most promising new Destination'' and the ''Best Print Promotional Material'' awards at the premiere industry event, Travel and Tourism Fair held in Mumbai and Pune.

Strategic and design support to Special Purpose Vehicles (''''SPVs'''') was provided on a need basis.

The sixth edition of the signature brand event Lavasa Women''s Drive set a Guinness World Records TM for- Most Female Participants in a Motor Sport Event. To achieve this global recognition 934 participants in 467 cars drove from Mumbai and Pune to picturesque Lavasa on February 22, 2014.

Other events that were held during the year include Lavasa Hill Run (Positioned as first health run of the year, January 2014), Pune Bicycle championship (October 2013), Diwali Dhamaka (November 2013) and Vintage Car Show (December 2013).

Digital and social media channels were leveraged primarily for engagement and for information dissemination. The channels were extensively used to promote events, respond to queries and initiate conversations on platforms like travel, tourism and discussion forums on urbanization. Innovative approaches like road block on www.economictimes. com made sure the visitors to the website had to mandatorily view the Lavasa banner, introduction of interest - a virtual pinboard to share pictures and an integral application which allowed users to upload pictures through integral using #capturinglavasa were activated during the course of the year.

In 2013-14, the Public Relations campaign focused on building preference and restoring customer confidence in the project. Meetings with senior editors in Mumbai and Pune and the constant engagement with beat reporters in Mumbai and Pune led to better appreciation of Company''s stand on issues. This resulted in them presenting a balanced perspective on most issues.

Promotional initiatives of various SPVs were publicized through news stories, editorial feature stories and photo features.

The city of Lavasa now has a new post office, a new school, a hospital and more than a dozen food and beverage establishments open for business. It also has four operating hotels with three more under construction, a Petrol Pump , two bank branches along with ATMs, a convention centre, a public safety centre with Fire engine, Police outpost, Tourist information center, Multilevel Car parking facilities, Nature trials, Citizen contact centre, State of the art Hospital with pharmacy, rental housing for low income groups , games arcades, water sports facility, adventure sports facility , a modern club with gym, sports and Spa facilities , public transport system for citizens , Schools for local population etc.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability The drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration. The sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50km. of well maintained motor able roads are operational and more being constructed, Lavasa has already opened parks and play areas to the public. The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

A round the clock Lavasa Citizen Contact Centre that has been set up this year, envisions to make the lives of the citizens and visitors easy and convenient. The Lavasa Citizen Contact Centre will be a one-stop information source for non emergency and emergency related services. It will provide a single window resolution for all customer needs and visitor requests, be involved in proactive information distribution, data collection and management services, Customer

Satisfaction Surveys and Customer handover and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting.

CMS is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, Public Works, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The City Management Services Department will slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. The City Management Services Department meets on a monthly basis with a committee of villagers from throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

Lavasa has completed purchase of 10477 acres of land and is processing completion of another 2133 acres, for which agreements were signed in the past. Steps to reach an overall land purchase target of 18000 acres are in progress.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. The Environmental Compliance Report is being submitted to MoEF once in six months and the June 2013 and December 2013 reports have already been submitted.

The work of Biodiversity conservation and enhancement continues at the required pace. In the case of flora, around 130 trees have been transplanted with a survival rate of 70%. The maintenance of around 45,000 trees which were planted in Mugaon in the year 2012 has been rigorously carried out with full survival. In case of aquatic fauna, the resultant growth of 28,000 fish seeds which were released in Dasve Lake in year 2012 has been found to be satisfactory and this has been verified in the presence of Fisheries officer, Govt. of Maharashtra.

For slope protection and enhancing the greenery within the region, soil bioengineering (biodegradable coir mats have been applied over the slopes) and plantation of stumps has been done. Hydro-seeding & manual seeding was also carried out for slope protection and to re-establish vegetation over an area covering around 70 acres in this season and the total area that has been so treated is more than 700 acres till date. Tree plantation of around 1,25,000 tree saplings was carried out in Mugaon and Bhoini. New Plantation in the nursery at Bhoini continues and there is adequate plant stock as it is a feeder for mass plantation and other internal landscaping requirements. Both the nursery and mass plantation have been organically certified.

Techno-commercial evaluation of renewable sources of energy feasible at Lavasa has been completed by TERI (Tata Energy Resources Institute). Lavasa is also exploring possibilities for green certification of its total city development.

First Town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. As on date more than 120 contractors with a work force of about 4500 workers have been mobilized at site for different works.

Till date more than 600 residential units have been handed over to CMS department and over 500 residential units have been handed over to customers. Out of these 600 units. 319 Villas were given to the CMS department for hand over to customers. Of these 319 villas, 212 Villas have already been handed over to the customers. Work on another 284 villas of different types, with built- up area ranging from 2000 sq. ft. to 4000 sq. ft. is in progress.

Work on the infrastructure for the second town of Mugaon has been accelerated. Work on utilities like water, sewer, power, data lines and on the approach road is in progress. The improvement to the existing Mugaon-Tamhini Zilla Parishad road is complete. The portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. The work on the inter village road from Mugaon to Gadle (6 kms) is completed

To facilitate the provision of water required during construction at Mugaon, the construction of Gadle Dam and a reservoir in Mugaon (Capacity – 1.00 Lakh cubic metre) is 90% complete. A bridge over the dam intake well and allied works are scheduled to be completed in 2014-15.

Rehabilitation work on new gaothans has commenced and by the end of the year, 50 units will be ready to accommodate villagers, along with other city infrastructure like school and community centre. This rehabilitation will also help augment the construction of the first phase of the apartments in Mugaon.

Work on 29 buildings comprising of 0.9 million square feet of salable area at Mugaon is on. It is expected to be completed in next 18 months

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 62 locations on a daily basis, helping villages avail benefits of Government drinking water scheme, Calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, crèche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/AIDS, malaria, nutrition, water borne diseases, Hepatitis B vaccination and de- worming medicines. Employment and self employment opportunities to the locals have also been provided.

Status update on Environment Clearance from Ministry of Environment and Forests (MoEF)

As you are aware that Lavasa was issued Show Cause Notice by Ministry of Environment & Forest (MoEF), Government of India (GOI) regarding violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). Lavasa made various representations as per the directions given by the authorities and after complying with the conditions stipulated, MoEF GOI was pleased to accord the Environmental Clearance to Lavasa,

Herein below given are the updates in the matter during the Financial Year 2013 - 2014 :-

1. On April 23, 2013, Appeals filed by Lavasa and Shedge before National Green Tribunal (NGT) were listed on board. The Hon''ble NGT (despite stay of further proceedings by Hon''ble Supreme Court) fixed the matter on May 14, 2013 for hearing of the application for interim reliefs and interim orders.

2. On May 1, 2013, Lavasa filed Civil Appeal bearing No. 4280 of 2013 before Hon''ble Supreme Court against the order dated April 23, 2013 of NGT The said matter was listed on May 10, 2013. Upon hearing the Counsel for Lavasa, the Hon''ble Supreme Court was pleased to issue Notice in the matter. Thereafter, on November 27, 2013, the said matter was listed before the Ld. Registrar, Supreme Court and the Ld. Registrar ordered for original records in NGT Appeal No. 9 of 2012. On the basis of the order, the records are transferred to Supreme court Registry.

3. On May 2, 2013, Lavasa filed Contempt Petition being No. 203 of 2013 before Hon''ble Supreme Court against Dyaneshwar Shedge. The said matter was listed before Hon''ble Supreme Court on July 2, 2013, and upon hearing the Counsel for Lavasa, the Hon''ble Supreme Court was pleased to list the said matter with main matter i.e. Transfer Petition.

4. On October 10, 2013, Lavasa''sWrit Petitions filed against MoEF & Ors. and other PILs filed against State of Maharashtra (wherein Lavasa is one of the Respondent party) were listed before Hon''ble Bombay High Court for transfer of the same to NGT After hearing the parties, the Hon''ble Bombay High Court said that they would peruse each petition and accordingly decide the issue of transfer to NGT

5. Lavasa''s NGT Appeal No. 36 of 2011 was listed on board before NGT from time to time and the next date of hearing is May 5, 2014.

Further, Lavasa is regularly filing six monthly compliance report as per the EC order.

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into the business of building residential & office complexes in real estate sector.

- New Real Estate Projects under bidding

HREL has procured the bidding documents for re development of Parleshwar CHS at Vile Parle (East), Mumbai.

HREL is also exploring on outright purchase of various independent plots on L.B.S. Marg at Vikhroli (W) as well as at Bhand up (W) for re-development.

- Other Projects

Other projects of HCC Real Estate Ltd. and its subsidiaries are progressing well as explained in Management Discussion and Analysis Report.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned subsidiary of your Company, has six National Highways Authority of India (NHAI) road concessions in its portfolio totaling about Rs. 5,500 crore.

The Company, through its subsidiaries HCC Concessions, HCC Power and HCC Operations & Maintenance, has an infrastructure development focus through Public Private Partnership, largely in the roads, hydro power and water sectors. Your Company has a strong focus on value creation through a stringent investment discipline. The expertise of the management team extends from concept innovation and evaluation of risk & return, to construction management and operations. Along with a focus on quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

Current Road Portfolio:

The three operational projects Nirmal Annuity, Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have been operational for more than four, three and two years respectively and are running smoothly. The three under construction highway projects in West Bengal (NH34) have achieved significant progress and one of the larger projects is on the anvil of achieving the provisional completion date, while the other is expected to be operational in the first half of this year.

During the year, HCC Concessions submitted 6 Request for Qualification (RFQs). HCC Concessions partnered with other infrastructure players for certain bids to diversify risk, efficiently manage equity and increase competitiveness. The slowdown witnessed in FY13 continued in FY14 with only about 370 km road projects being awarded by NHAI on BOT mode in the current year. The Company will continue to bid for NHAI projects in the next financial year, albeit conservatively, while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH3)

The project road is section of National Highway No. 3 commonly known as Agra - Bombay road which starts at Agra, and ends at Bombay (now Mumbai). The NH 3 forms an important part in Indian National Highway network and passes through rich belts of Madhya Pradesh and Maharashtra. This road caters to the traffic of various parts of India as it connects financial capital (Mumbai) of India to the National Capital (Delhi) of India. In FY09, NHAI awarded the development of four lane highway of project road starting from Maharashtra/ Madhya Pradesh Border at Km 168.500 and ending at Dhule at Km 265.000 to an HCC led consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months. The HCC led consortium completed the project 4 months ahead of schedule and the project road was operational on February 11, 2012.

The operation of project road is running smoothly. Due to persistent efforts by Company we have received the tolling rights for part of Phase II work including Nardana bypass section two years ahead of schedule resulting in improved revenue in spite of a stagnant economy. Considering the significance of the project road in the Indian road network, it is expected to yield high returns for the remaining concession period of about 14 years. The highway has been developed in partnership with Sadbhav Engineering Ltd. and John Laing Investments Ltd. (UK) with an investment of Rs. 1,420 crore.

Delhi Faridabad Elevated Expressway (NH2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. It connects National Capital of India, Delhi and fastest growing city of India, Faridabad. The dfskyway™ has been designed to provide uninterrupted travel past the four major crossings of MB Road, Jethpur, Sarai Bypass and Sector 37 HCC Concessions Ltd. developed this engineering marvel with an investment of nearly Rs. 600 crore. The expressway has 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. HCC Concessions was awarded a 20 year concession in 2008 to develop, construct and operate this asset by the National Highways Authority of India (NHAI). The dfskyway™ contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor, that benefits residents and inter-state traffic alike. It is one of Delhi''s major radial roads and caters to very high traffic volume of over 100,000 PCUs per day. HCC Concessions'' parent, Hindustan Construction Company (HCC), has designed, engineered and constructed the dfskyway™.

The Delhi Faridabad Elevated Expressway was formally inaugurated on November 29, 2010 significantly ahead of its scheduled completion date, by the Chief Ministers of both Delhi and Haryana, along with the Minister of Road Transport & Highways. The asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBCTV18.

Nirmal Annuity (NH7)

The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000) on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the development of four lining of this 30 km long stretch on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore. This project became operational in July 2009, 100 days ahead of the scheduled completion date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for 17 year tenure.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed effciently by HCC Operations and Maintenance Ltd.

Status of Assets under Development:

West Bengal (NH34) Highway Project

This project being developed by HCC Concessions Ltd. on a Design, Finance, Build, Operate and Transfer (DFBOT) basis, is the largest and among the most ambitious PPP highway projects being executed in West Bengal (WB). The National Highway No.34 commonly referred to as NH34 is an important connector to north eastern states with Kolkata in West Bengal. NH34 originates from Dum Dum in north Kolkata and ends at Dalkhola in West Bengal. It is about 443.5 km long road along international border and is a primary conduit for transportation of passenger as well as freight traffic from the South Bengal, South- East states and Central states of India to major towns and districts in the North Bengal and to all Eastern and North East states of India. The development of this stretch will improve connectivity to the East-West Corridor, which has already been four-laned. West Bengal is strategically located to play a pivotal and catalytic role in promoting economic cooperation in the sub region (Bangladesh, Bhutan, North Eastern states and West Bengal).

The project road development is divided into three contiguous sections Baharampore - Farakka (101 km), Farakka - Raiganj (102 km) & Raiganj - Dalkhola (55 km). The concession period for the different segments totaling about 256 km range from 25 to 30 years, including a construction period of 30 months and an investment of over Rs. 3,200 crore. The Company has achieved significant progress in the two larger sections and is expecting to start operations for one project very soon and the other one in first half of this financial year.

NH34 provides nearest access to Kolkata and Haldia ports for the north eastern states of India and neighboring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises of 85~90% commercial traffic, carrying a diversified mix of manufacturing goods, building materials, steel, jute, food grains and tea. The four-laning of two projects between Kolkata and Baharampore is progressing in significant pace in spite of clearance issues of state. This will further increase the throughput and improve traffc on this stretch.

Baharampore Farakka Highway

The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680. The Baharampore Farakka section is about 101 km in length and traverses through Baharampore, Raghunathganj and Farakka towns in Murshidabad and Malda districts of West Bengal. It also passes through various small villages like Shibpur, Palsanda, Morgram, Chandermore, Basudebpur and Dhulian. The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,169 crore.

The construction work has progressed significantly in the last year in spite of execution challenges due to delays in handover of land and 75.45 km of project length has been completed by the end of the year. The Company has completed all requisite parameters for Provisional COD and is awaiting approval from NHAI, HO. The Company expects to start operation very soon.

Farakka Raiganj Highway

The project road starts from Farakka at Km 294.680 (before Farakka barrage) and ends at Raiganj at Km 398.000. The Farakka Raiganj section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,378 crore.

The Company has completed substantial stretch of roads and structures of 102 km in the last year. The building and tunnel work for both toll plazas has also been completed. The Company expects to start operation by end of Q2 of this financial year.

Raiganj Dalkhola Highway

The project road starts from Raiganj at Km 398.000 and ends at Dalkhola at Km 452.730. The Raiganj Dalkhola section is about 55 km in length and traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years and includes a construction period of 30 months. The project is being implemented with an investment of Rs. 684 crore. The project progress has been very slow due to the non-availability of land for over 2 years. The Company expects a major portion of the land for this section to be handed over by Q1 of this financial year.

iv) Steiner AG, Switzerland

Your Company holds through its wholly owned subsidiaries HCC Mauritius Enterprises Ltd. and HCC Mauritius Investment Ltd. 100% stake in Steiner AG, with the acquisition of remaining 34% of shares, as pre-agreed, during this year. Steiner AG is a leading total and general contracting Company in Switzerland, specialized in turnkey building construction including refurbishments and real estate development.

Steiner AG had a consolidated revenue of Rs. 5380.9 crore and a consolidated profit of Rs. 55.0 crore in the financial year 2013-14.

Steiner AG handed over part of the project "House of Peace in Geneva" to the client in the financial year 2013-14. It forms the heart of the Campus de la Paid at the headquarters of the University Institute of International and Development Studies (IHEID). Steiner has been working on this significant architectural project as a general contractor since September 2013. The extraordinary building form made up of four petals and the twin-sided glazed facade make the House of Peace a real architectural highlight and an attraction for international visitors.

Löwenbräu, a total contracting project of the Company, received the Leed Gold certification for its office building by the Green Building Council Environment Design in May 2013. This adds to the portfolio of environmentally sensitive buildings constructed by the Company.

Steiner AG signed many important contracts in 2013-14. At year end, the order backlog was CHF 1,181 million. This is lower than the CHF 1,210 million order backlog as of March 31, 2013. The Company has also secured projects worth more than CHF 250 million, which are yet to be formally contracted and therefore have not yet been included in the order book.

The Board of Directors of Steiner AG comprises six members: Mr. Ajit Gulabchand, who also acts as Chairman, Mr. Rajgopal Nogja, who also acts as Managing Director / Delegate of the Board of Directors, Mr. Anil Singhvi, Mr. Peter Steiner, Mr. Andreas Schmid and Dr. Peter Huggler.

v) Highbar Technologies Ltd.

Highbar Technologies Ltd. (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

In the financial year 2013-14, Highbar was able to serve 14 new customers taking the total tally of customers to 78. This is achieved while the key customer segment i.e. Infrastructure industry is passing through challenging times. Highbar Technologies is dominating ''IT for Infrastructure'' market in short span. Your Company''s group legacy has enabled Highbar to understand & service these industries effectively. Highbar is now also servicing Telecom, PEB (Pre- engineered Buildings), Manufacturing, Retail, Agro- chemicals, Iron & Steel, Media etc. Industries.

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence, cloud offerings through High bar Cloud Connect, Employee portal, CRM (Customer Relationship Management) from SAP & Microsoft, Line of business solutions, etc. High bar Rapid Start and High bar Rapid Start Analytics solutions are based on the templates approach for ERP and Business Intelligence respectively and are intellectual properties (IP) assets of High bar Technologies. High bar has maintained the strategic alliance with SAP at ''Gold partnership level'' and is preferred partner of SAP for infrastructure industry.

High bar’s Dubai subsidiary, High bar Technologies FZ-LLC is now fully operational and has started increasing its presence counting six major customers in Middle-East. High bar has also started pursuing opportunities in government sector & secured the first government order. When the macroeconomic scenario in the country improves, High bar will be in a better position to leverage the situation to its advantage.

High bar, the spin-off from your Company''s internal IT function, has succeeded, when the success rate of such experiments is just 5% globally & in India. High bar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

In accordance with the Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956, approved by the Honorable High Court of Judicature at Bombay vide Order dated April 4, 2014, Hinson Techno consult Ltd, wholly owned subsidiary of HCC, has been amalgamated with High bar.

5. Subsidiary Companies

At the beginning of the year, the Company had 74 Subsidiary Companies.

During the year under review, the following changes have taken place.

i) Your Company has incorporated a Wholly Owned

Subsidiary in Mauritius i.e. HCC Mauritius Investment Limited w.e.f. October 4, 2013

ii) Hincon Techno consult Limited, Wholly Owned

Subsidiary of your Company has been amalgamated into Highbar Technologies Limited, Wholly Owned Subsidiary of your Company vide Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956. The said Scheme of Amalgamation has been duly approved by the Hon''ble High Court of judicature at Bombay vide Order dated April 4, 2014.

iii) Klemanor Investments Limited has ceased to be your subsidiary company w.e.f. March 12, 2014.

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India - Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report of the subsidiary companies for the year/period ended December 31, 2013/March 31, 2014 are not attached to the Balance Sheet of the Company as the Company has fulfilled/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated May 2, 2014 consented for not attaching the balance sheet(s) of the concerned subsidiary(ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following formation in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The financial statements and other related detailed information of the following subsidiaries shall be made available to members of the holding Company and subsidiary companies seeking such information at any point of time:

1. Western Securities Ltd.

2. HCC Aviation Ltd.

3. HCC Construction Ltd.

4. Highbar Technologies Ltd.

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited

7 HCC Mauritius Investment Limited (w.e.f. October 4, 2013)

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM STAG

11. Eurohotel SA

12. Steiner (Germany) GmbH

13. Steiner Leman SAS

14. SNCValleiry Route De Bloux

15. Steiner India Ltd.

16. HCC Infrastructure Company Ltd. 17 HCC Concessions Ltd.

18. Nirmal BOT Ltd.

19. Badarpur Faridabad Tollway Ltd.

20. Baharampore - Farakka Highways Ltd.

21. Farakka - Raiganj Highways Ltd.

22. Raiganj - Dalkhola Highways Ltd.

23. Dhule Palesner Operations & Maintenance Ltd.

24. HCC Power Ltd.

25. HCC Operations & Maintenance Ltd.

26. Narmada Bridge Tollway Ltd. 27 HCC Real Estate Ltd.

28. HRL Township Developers Ltd.

29. HRL (Thane) Real Estate Ltd.

30. Nashik Township Developers Ltd.

31. Maan Township Developers Ltd.

32. Charosa Wineries Ltd.

33. Powai Real Estate Developers Ltd.

34. HCC Realty Ltd.

35. Pune-PaudToll Road Company Ltd.

36. Panchkutir Developers Ltd. 37 Lavasa Corporation Ltd.

38. Lavasa Hotel Ltd.

39. Apollo Lavasa Health Corporation Ltd.

40. Lakeshore Watersports Company Ltd.

41. Dasve Convention Centre Ltd.

42. Dasve Business Hotel Ltd.

43. Dasve Hospitality Institutes Ltd.

44. Lakeview Clubs Ltd.

45. Dasve Retail Ltd.

46. Full Spectrum Adventure Ltd. 47 Spotless Laundry Services Ltd.

48. Lavasa Bamboocrafts Ltd.

49. Green Hill Residences Ltd.

50. My City Technology Ltd.

51. Reasonable Housing Ltd.

52. Future City Multiservices SEZ Ltd. (Formerly known as Minfur Interior Technologies Ltd.)

53. Rhapsody Commercial Space Ltd.

54. Valley View Entertainment Ltd.

55. Andromeda Hotels Ltd.

56. Sirrah Palace Hotels Ltd. 57 Warasgaon Tourism Ltd.

58. Our Home Service Apartments Ltd.

59. Warasgaon Power Supply Ltd.

60. Sahyadri City Management Ltd.

61. Hill City Service Apartments Ltd.

62. Kart Racers Ltd.

63. Warasgaon Infrastructure Providers Ltd.

64. Nature Lovers Retail Ltd.

65. Osprey Hospitality Ltd.

66. Starlit Resort Ltd.

67 Warasgaon Valley Hotels Ltd.

68. Rosebay Hotels Ltd.

69. Mugaon Luxury Hotels Ltd.

70. Warasgaon Assets Maintenance Ltd.

71. Hill View Parking Services Ltd.

72. Whistling Thrush Facilities Services Ltd.

73. Verzon Hospitality Ltd.

(vi) Further, the financial statements of the subsidiary companies shall also be kept for inspection by any member at the registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any member on demand;

(vii) The holding as well as subsidiary companies in question shall regularly flew such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

6. Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

During the year under review, your Company''s paid up equity share capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising 60,66,10,420 Equity Shares of Rs. 1/- each.

Share Warrants

During the year under review, in accordance with the approval of the Members, the Company had issued and allotted 3,92,15,686 Warrants convertible into 3,92,15,686 Equity Shares of Rs. 1/- each at a conversion price of Rs. 16.32/- per equity share (including premium of Rs. 15.32/- per equity share), on a preferential basis, convertible within a period of 18 months from the date of allotment of Warrants, aggregating Rs. 64 crore to the Promoter Companies (Hincon Holdings Limited and Hincon Finance Limited). The said warrants were issued and allotted to these companies at the price as determined through SEBI prescribed formula.

7. Public Deposits and Loans/Advances

Your Company has not accepted any deposits from the public, or its employees during the year under review.

Pursuant to Clause 32 of the Listing Agreement, the particulars of loans/advances given to subsidiaries have been disclosed in the Annual Accounts of the Company.

8. Employee Stock Option Scheme (ESOP)

During the year under review, 1,20,180 options got vested to the employees of the Company.

As on March 31, 2014, 46,94,800 stock options are outstanding (comprising vested after adjustment for lapsed and exercised options), in aggregate, for exercise and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

The particulars with regard to the Employee Stock Options as on March 31, 2014 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2014, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Company''s Auditors confirming compliance forms part of this Report.

12. Directors

Mr. K. G. Tendulkar has resigned as a Director of the Company w.e.f. August 2, 2013 and Mr. Nirmal P Bhogilal has resigned as a Director of the Company w.e.f. October 23, 2013.

Mr. ArunV. Karambelkar has resigned as Whole-time Director of the Company w.e.f. April 29, 2014 and Dr. Ila Patnaik has resigned as a Director of the Company w.e.f. April 30, 2014.

The Board places on record their appreciation for the valuable guidance and services rendered by these Directors/ Whole-time Director of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, your Board of Directors are seeking the appointment of Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, who are retiring by rotation at the ensuing Annual General Meeting under the erstwhile applicable provisions of Companies Act, 1956, as Independent Directors for 3 (three) consecutive years for a term up to the conclusion of the 91st Annual General Meeting of the Company in the calendar year 2017

The Company has received Notices under Section 160 of the Companies Act, 2013 from members signifying their intention to propose Mr. Ram P Gandhi and Mr. Sharad M. Kulkarni as a candidate for the offce of Independent Director at the ensuing Annual General Meeting.

The Company has also received the requisite disclosures/declarations from Mr. Ram P Gandhi and Mr. Sharad M. Kulkarni as required under Section 149 and other applicable provisions of the Companies Act, 2013.

As per the provisions of Section 152 of the Companies Act, 2013, Prof. Fred Moavenzadeh, Director of the Company retires by rotation at the ensuing Annual General Meeting. Prof. Fred Moavenzadeh has expressed his intention not to seek re-election as a Director of the Company.

Profile of all these Directors has been given in the Report on the Corporate Governance as well as in the Explanatory Statement to the Notice of the ensuing Annual General Meeting of the Company.

13. Directors'' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confrm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

14. Industrial Relations

The industrial relations continued to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 9,17,451/- to Investor Education and Protection Fund, in compliance with the provisions of erstwhile Section 205C of the Companies Act, 1956. The said amount represents dividend for the financial year 2005-06 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

17. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

The information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, is given in Annexure II forming part of this Report.

18. Auditors

M/s Walker Chandiok & Co.LLP Chartered Accountants, Mumbai bearing ICAI Registration No. 001076N are proposed to be appointed as Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the sixth Annual General Meeting of the Company held thereafter, subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s Walker Chandiok & Co.LLP to such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable.

19. Auditors'' Report

The Auditors'' Report to the members on the Accounts of the Company for the financial year ended March 31, 2014 does not contain any qualification.

20. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its growth.



For and on behalf of Board of Directors,

AJIT GULABCHAND

Chairman & Managing Director



Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083



Place: Mumbai

Date: May 2, 2014


Mar 31, 2013

To, The Members of Hindustan Construction Co. Ltd.

1. Report

The Directors are pleased to present the 87th Annual Report together with the Audited Accounts for the year ended March 31, 2013.

2. Financial Highlights

Year ended Year ended Particulars March 31, 2013 March 31, 2012 Rs. crore Rs. crore Turnover 3,837.29 4002.76

Profit before Interest, Depreciation, Exceptional Items and Tax 378.57 439.80

Less: Interest 529.67 543.16

Depreciation 163.40 162.10

Exceptional Items (15.58) 677.49 166.32 871.58

Add: Other Income 119.91 122.83

Add/Less: Exchange Gain/(Loss) (14.57) (9.53)

Profit/(Loss) before Tax (193.58) (318.48)

Less: Deferred Tax Charge/(Credit) (55.94) (96.23)

Profit/(Loss) after Tax (137.64) (222.25)

Add: Balance brought forward from last year 126.00 347.83

Transfer from Debenture Redemption Reserve - 16.67

Amount available for Appropriation (11.64) 142.25

Less: Appropriations

Dividend - -

Tax on Dividend - -

Debenture Redemption Reserve - 16.25

Transfer to General Reserve - - 16.25

Balance carried to Balance Sheet (11.64) 126.00

3. Dividend

In view of the losses incurred by the Company, your Directors have not recommended any dividend for the financial year ended March 31, 2013.

4. Operations

The turnover of the Company at Rs. 3,837 crore has shown a decrease of 4.1 % as compared to Rs. 4,003 crore for the previous year. The loss before tax is Rs. 193.6 crore (including exceptional item) as compared to Rs. 318.5 crore for the previous year.

As your Company was growing at CAGR of over 20% during 2002 to 2011, it had considerably grown its balance sheet, including debt. In the present phase of economic slowdown, it became difficult to service this debt and hence it was imperative to restructure the Company''s debt. Therefore the Company opted for a formal method of loan restructuring and referred the total debt of around Rs. 3,300 crore along with working capital fund based and non-fund based limits of Rs. 6800 crore to the Corporate Debt Restructuring (CDR) Cell under the regulatory framework of the Reserve Bank of India in March 2012. The financial restructuring package for your Company was approved by the CDR Cell in June 2012 and since then the implementation of the package has commenced.

The salient features of the CDR package are:

- Re-schedulement of Term loan and short term loans so as to be repayable in 2 years moratorium and 8 years of repayment

- Interest rate has been reduced to 11% per annum yield equalisation over 10 year tenure

- Funded interest for nine months period from January 2012 to September 2012

- Additional working capital borrowing as per requirement has been sanctioned

- Waiver of penal charges from the cut off date to the date of implementation of the package

The CDR gives your Company critical support to tide over the present difficult business environment. The decision of the banks to consider and approve CDR also reflects the faith these institutions have in the long term business model of the Company.

Your Directors are pleased to inform that during the year under report, the Company secured the following major contracts.

- Tunnel T48 of Udhampur Srinagar Baramulla New BG railway line, J&K Contract Value: Rs. 884 crore

- Narmada Extra dosed bridge, Gujarat Contract Value: Rs. 650 crore

- Delhi MRTS Phase III, Janakpuri West to Palam, New Delhi Contract Value: Rs. 866 crore

- Delhi MRTS Phase III, Shalimar Bagh to Netaji Subhash Place New Delhi Contract Value: Rs. 373 crore

The total balance value of works on hand as on March 31, 2013 is Rs. 14,935 crore.

Decisions are awaited from various clients for tenders submitted by the Company (Directly or in JV) for 10 projects amounting to about Rs. 3,558 crore. Tenders for various packages for 19 projects worth about Rs. 12,883 crore are expected to be submitted in the near future. The Company has also submitted prequalification bids for 17 projects worth over Rs. 13,427 crore, which are currently under evaluation. The Company is confident of securing a sizeable share of these new projects.

Operations of Subsidiaries

i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

a) Operations

Lavasa has kept its rationale of developing an inclusive city for all and is tailoring partnerships and tie ups with global leaders. Tie-ups continued strongly at Lavasa through 2012-13 and many of these projects are fast moving towards completion.

In the hospitality space, the Accor group is successfully running Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Novotel, a new brand from the Accor group - is scheduled for completion by April 2014. Projects with renowned hospitality players like Pullman, Hilton, Taj Vivanta, Holiday Inn, Holiday Inn Express, Oakwood, Langham Place and Eaton among others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve in its fifth year of successful operations will soon open one more hotel in Lavasa. Dasvino Town & Country Club, launched in early 2010 is growing steadily. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Site preparatory work for Space World, Asia''s first space edutainment centre is well underway and is on course for opening in 2015. MoU''s have been signed with Tennis Australia and Manchester City Football Club. Additionally agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf and Sir Steve Redgrave for a Rowing Academy.

On the retail front, a significant area has already been leased. Restaurants like Subway, Cafe Coffee Day, Baskin Robin, All American Diner and others have already commenced operations. In addition to F&B outlets, many other tie-ups that have been finalized in the retail segment include The Orange Ox (handicrafts), Cinnamon Crocodile (bath and spa products), Fun Square Digital Cinema, Smokin Joe''s Pizza, Adidas Store and Kareems Restaurant.

Lavasa is in advance stage of discussion with iDream to create an all Lavasa tourism plan including a historical theme park. Significant progress was also made in the education space. Christel House Lavasa is into its second year of operations with 269 students and in 2012-13 Phase 2 of Christel House Lavasa was launched.

Ecole Hoteliere Lavasa started its fourth batch in 2013-14. The first batch will receive academic certification from Ecole hoteliere de Lausanne this year. Educomp has signed MOU with infinity group of Kolkata and is proposing to bring Duhrum school of UK as k12 school or will start millennium international school by 2014-15 in Knowledge Vistas Limited. GREAT (INDIA) in collaboration with Australian Retail College, which is a leader in retail training in Australia is planning to open a retail college at Lavasa. Other educational partners like Symbiosis Institute (Pune) and Christ University (Bangalore) are also in the process of launching their programs. Discussions are on to establish North Hampton University at Lavasa by 2014-15.

Lavasa has continued to enjoy healthy sales in residential and commercial space. Positive sales trend continued through the year and possession was given to 250 plus residential units in Dasve. In institutional sales the prime focus for the year has been on collections and activation of sites. Symbiosis Institute, State Bank of India and the proposed Ramada Hotel have submitted their plans for approval.

For the year ahead a new concept ''built- to-suit'' that offers a seamless service to institutions right from purchasing land to executing the project has been conceptualized. On the retail front revenue collections have seen a phenomenal 56% increase YoY. Endeavor to boost the work economy at Lavasa will gain momentum in the next year.

Lavasa has continued its focus on branding and communication activities in 2012 -13. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages.

Through the year over 250 journalists from print, TV, news wires and web media from Mumbai, Pune and Lavasa region visited Lavasa. A new advertisement campaign was launched in May 2012 to promote the second town Mugaon as a residential and edutainment hub. In August 2012 a new brand campaign capturing different facets of ''Life in Lavasa'' was launched. The next phase of brand campaign was launched on October 28, 2012. Over a three month period, the series of advertisements communicated city positioning and scale and also talked about advantages of Lavasa city.

To promote tourism, the Lavasa Holidays Summer Special (April to June 2012), Mesmerizing Monsoon (July to Sept 2012) and Lavasa Holidays Festive Fiesta (Oct to Dec 2012) tour packages were conceptualized and offered to tourists.

On an average close to 80,000 tourists visited Lavasa every month from July to September 2012. The footfall in August at 94,143 tourists was the highest ever in Lavasa''s history.

Lavasa won the ''Most promising new Destination'' and the ''Best Print Promotional Material'' awards at the premiere industry event Travel and Tourism Fair held in Mumbai and Pune.

Strategic and design support to SPVs was provided on a need basis. The fifth edition of the signature brand event Lavasa Women''s Drive was held on February 24, 2013. This year the ''Lavasa Women''s Drive - Women with a drive awards'' were presented to Dr. Anagha Amte (health care), Kanan Dhru (governance), Hina Shah (women welfare), Sabbah Haji (education) and Sakshi Kumar (women''s empowerment). Social worker and activist, Sindhutai Sapkal was felicitated with a special recognition award for her exemplary work.

Digital and social media channels were leveraged primarily for engagement and for information dissemination. The channels were extensively used to promote events, respond to queries and initiate conversations on platforms like travel, tourism and discussion forums on urbanization.

In 2012-13, the Public Relations campaign focused on building preference and restoring customer confidence in the project. Meetings with senior editors in Mumbai and Pune and the constant engagement with beat reporters in Mumbai and Pune led to better appreciation of Company''s stand on issues. Visits of eminent personalities like Chief Ministers of Gujarat and Punjab and promotional initiatives of various SPVs like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town & Country Club and X Thrill were publicized through news stories, editorial feature stories and photo features.

Each month Lavasa looks, feels and acts more like a city. The city of Lavasa now has a new post office, a new school, a hospital and more than a dozen food and beverage establishments open for business. It also has four operating hotels with three more under construction, a fuel station, two banks, a convention centre, a public safety centre with a citizen call centre, pharmacy, rental housing, games arcade, watersports facility, a club, public transport system. Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. The drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration and the sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

A round the clock Lavasa Citizen Call Centre set up this year, envisions to make the lives of the citizens and visitors easy and convenient.

Lavasa has completed the purchase of 10423.50 acres of land and is in the process of concluding the sale deed in 2184 acres for which agreements were signed. Steps to reach an overall land purchase target of 18000 acres are in progress.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. For slope protection and enhancing the greenery within the region, soil bioengineering (biodegradable coir mats have been applied over the slopes) and plantation of stumps has been done. Hydroseeding & manual seeding was also carried out for slope maintenance and a total area of more than 500 acres has been covered to date. Indigenous Tree plantation of around 47,500 tree saplings was carried out in Mugaon and Bohini.

Techno-commercial evaluation of renewable sources of energy feasible at Lavasa is being carried out by TERI (The Energy and Resources Institute). Sustainable reporting under GRI guidelines is underway. Lavasa is also undergoing the process for Green Certification of its development under IGBC (Indian Green Building Council) - Green Township program.

First Town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. Work of the Commercial Business Park, retail and hostel building, Novotel Hotel, LEH campus, Phase II of the Christel House Lavasa and Christ University is progressing well.

Work on the infrastructure for the second town of Mugaon has been accelerated.

Work on utilities like water, sewer, power, data lines and on the approach road is in progress. Work on 16 buildings comprising of 462 apartments at Mugaon has commenced using a new technology - Formblock, and is expected to be completed in next 18 months. Work on another 9 buildings consisting of 268 apartments will be started by May 2013.

Lavasa has also initiated a number of development and empowerment programs were initiated for the local community by Lavasa. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 65 locations on a daily basis, helping villages avail benefits of Government drinking water scheme, teacher training workshops, aptitude tests and counseling for SSC students; building of school buildings and sanitation blocks at village schools and starting the Apollo Lavasa Primary Health Centre at Bhoini.

b) Status update on Environment Clearance from Ministry of Environment and Forests (MoEF)

On November 25, 2010 Ministry of Environment & Forests ("MoEF"), had issued Show Cause Notice (SCN) to Lavasa, under Section 5 of the Environment (Protection) Act, 1986 (EP Act) alleging violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications") and directed your Company to show cause within 15 days as to why the alleged unauthorized structures at Lavasa site be not removed in entirety and pending the decision by MoEF, it directed Lavasa to maintain status-quo ante for construction and/or development.

Lavasa replied to MoEF and then filed a Writ Petition (WP) being No. 9448 of 2010 in the Bombay High Court seeking inter alia quashing of the said SCN. Vide its order dated December 22, 2010, the Hon''ble Court admitted WP and directed MoEF to visit Lavasa''s project and pass an order.

The MoEF team visited Lavasa Site and has given hearings. On January 17, 2011 MoEF passed order and observed that Lavasa is in violation of EIA Notifications. By the said order status quo on construction was continued. However, MoEF stated that it is prepared to consider the project on merits.

On January 24, 2011, Lavasa filed another WP being No. 811 of 2011 in Bombay High Court challenging the aforesaid impugned order dated January 17, 2011.

Lavasa as per the MoEF''s order submitted various documents to MoEF, from time to time. In addition, Lavasa submitted applications for grant of Environment Clearance (EC) for Phase I and Phase II.

Representatives of Lavasa have from time to time attended total five (5) meetings of the Expert Appraisal Committee (''EAC'') at New Delhi. As per the Minutes of the 101st meeting held on May 31, 2011, the EAC recommended the proposal for EC for the 1st Phase (2000 ha) with the conditions mentioned therein.

On June 10, 2011 MoEF directed to the Government of Maharashtra to initiate necessary legal action under EP Act against Lavasa.

As the MoEF did not passed the EC order till 30th August, 2011, Lavasa fled another WP being No. 7276 of 2011 in the Hon''ble Bombay High Court seeking directions interaliathat (a) it be declared that Lavasa has been granted / deemed to have been granted EC for Phase I of the project.

On November 4, 2011, Maharashtra Pollution Control Board (MPCB) fled a criminal complaint against Lavasa & 14 others before the Chief Judicial Magistrate (CJM), Pune under the EP Act and thereafter on November 9, 2011, MoEF passed an order and pursuant to same accorded EC to the 1st phase of Lavasa''s project subject to certain conditions as mentioned therein.

On November 24, 2011 the CJM passed an order of issuance of process in the Criminal matter and thereafter from time to time the matter is adjourned and now the next date is June 21, 2013.

With regards to the Corporate Social Responsibility (CSR) and the penalty as mentioned in the EC order, Lavasa vide its without prejudice letters addressed to MoEF requested for exclusion of the K T Ravindran committee report from the EC order and also requested for the hearing and informed that there are certain discrepancies and contradictions in the EC order and requested for reconsidering the condition no (iv) and also requested for withdrawal of the same.

Lavasa fled Appeal being no. 36 of 2011, u/s 16(h) of the NGT Act against The Union of India, MoEF & Anr, before the National Green Tribunal (NGT) at Delhi, challenging part of the EC order more particularly about the Prof. K T Ravindran Committee Report and the conditions imposed by it. The Tribunal has passed order "Notice before Admission''.''The matter has thereafter from time to time come up on board now the next date is May 14,2013.

One Mr. Dyneshwar Shegde has fled Appeal (being No. 9 of 2012) before NGT challenging the EC order. Lavasa and the other respective Parties in the matter have fled their respective affidavits in reply. Further, to support Lavasa''s project, Mose Khore Nagrik Vikas Sangh and Sarpanch, Mugoan have fled Intervention Applications in the Appeal since villagers have benefited under Lavasa''s project.

On October 05, 2012 Lavasa fled Transfer Petition being (C) No. 1326 of 2012 before Hon''ble Supreme Court for transfer of Appeal of Dyaneshwar Shedge and be heard along with Civil Appeal No.6025 of 2012 titled M/s Scania Steel & Power Ltd v/s Jan Chetna & Ors for determination of the question of "Person Aggrieved"

In the Transfer Petition, the Hon''ble Supreme Court has stayed the proceeding of Dyaneshwar Shedge Appeal before NGT and issued notice in the matter. The matter is currently pending.

With regards to the WP''s fled by Lavasa in the Hon''ble Bombay High Court and the other PILs fled against your Company, the matters were listed on the board from time to time but the judges recused to hear the matter. But on August 29, 2012 one of the PIL being (L) 90 of 2010 fled by Ms. Suniti S R & Ors was on board before Registrar (OS) / Prothonotary & Senior Master for rejection of Petition since the objections had not been removed by the Petitioners and for jurisdiction. The Registrar passed conditional order directing Petitioners to remove objections within 4 weeks and transferred the PIL to the Appellate side. Thereafter on 7th November, 2012 the PIL (L) 90 of 2010 was transferred to the Appellate side of Hon''ble Bombay High Court and its'' now numbered as PIL (ST) No 31736 of 2012.

With regards to the compliance of the EC order, Lavasa is complying the same and from time to time is informing to the MoEF

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into building residential & office complexes in real estate sector.

Commercial Projects under execution by HREL and its subsidiaries :

- Lavasa Corporation Ltd. (Lavasa)

Construction work at Lavasa is progressing well. Lavasa has started handing over the possessions of villa and apartments to Customers in Dasve Village. Construction at Mugaon, Lavasa''s second town, has also commenced during the year. The response from buyers for sale of apartments in Mugaon is positive. Also, the City Management of Lavasa is moving in the direction of e-governance in future.

The current developments in Lavasa are detailed out in Management Discussion and Analysis Report.

- Other Projects

Other projects of HCC Real Estate Ltd and its subsidiaries are progressing well as explained in Management Discussion and Analysis Report.

- New Real Estate Projects under bidding

During the year, HREL has made serious efforts in obtaining real estate projects on joint development basis. It has also acquired the bid documents for development of integrated township at Atali Kaladara near Bharuch in Gujarat for PCPIR and is negotiating on certain projects in Bhutan.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, has grown its portfolio to about Rs.7,000 crore, which includes seven National Highways Authority of India (NHAI) road concessions.

The Company, through its subsidiaries HCC Concessions and HCC Power, has a development focus in the roads, water and power sectors.

Your Company has developed a strong team, which follows a stringent investment discipline to create value for its shareholder. The expertise of the management team extends from concept innovation and evaluation of risk & return, to construction management and operations. Along with a focus on quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

Current Road Portfolio:

Your directors are pleased to inform you that during the course of the year, HCC Concessions was awarded the Narmada Bridge Project (NH8) in the state of Gujarat by the National Highways Authority of India in April 2012.

The three operational projects Nirmal Annuity,

Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have been operational for more than three, two and one year respectively and are running smoothly. The three under construction highway projects in West Bengal (NH34) have achieved significant progress and the two larger projects amongst the three are expected to be operational later this year.

During the year, HCC Concessions submitted 3 NHAI bids and 16 Request for Qualification (RFQs). HCC Concessions partnered with other infrastructure players for certain large bids to diversify risk and increase competitiveness. The current year has witnessed a slowdown in the awards of new projects. NHAI has awarded only about 750km compared to about 6,500km last year. The Company will continue to bid for NHAI projects in the next financial year while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH3)

The project road is part of NH3, commonly referred to as the Mumbai-Agra road, originating from Mumbai and ending at Agra. It is a primary conduit for transportation of passengers as well as freight traffic from the state of Uttar Pradesh to major towns in the states of Madhya Pradesh and Maharashtra. In FY09, NHAI awarded the development of four lane highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to an HCC led (60%) consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months.

The project was operational on Feb 11, 2012, four months ahead of schedule, showcasing our execution expertise.

The project is being operated by an in-house operations and maintenance team. The remaining concession period is about 15 years. The highway has been developed in partnership with Sadbhav Engineering Ltd and John Laing Investments Ltd (UK) with an investment of Rs. 1,420 crore.

Delhi Faridabad Elevated Expressway (NH2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. This award winning engineering marvel developed by HCC Concessions Ltd with an investment of nearly Rs.600 crore boasts 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. HCC Concessions was awarded a 20 year concession in 2008 to develop, construct and operate this asset by the National Highways Authority of India (NHAI). The dfskyway™ contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor, that benefits residents and inter-state traffic alike. It is one of Delhi''s major radial roads and caters to very high traffic volume of over 100,000 vehicles per day. HCC Concessions'' parent, Hindustan Construction Company (HCC), has designed, engineered and constructed the dfskyway™

The Delhi-Faridabad Elevated Expressway was formally inaugurated on November 29, 2010 significantly ahead of its scheduled completion date, by the Chief Ministers of both Delhi and Haryana, along with the Minister of Road Transport & Highways. The asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBC TV18.

Nirmal Annuity (NH7)

The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000) on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the development of four-laning of this 33 km long stretch on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore This project became operational in July 2009, 100 days ahead of the scheduled completion date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for 17 year tenure.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed efficiently by our in house team.

Status of Assets under Development:

West Bengal (NH34) Highway Project

This project being developed by HCC Concessions Ltd on a Design, Finance, Build, Operate and Transfer (DFBOT) basis, is the largest PPP highway model in West Bengal (WB). The project road is the major North-South artery (N-34) which originates at the capital and port city of Kolkata, and ends at Dalkhola in the state of WB, covering a total distance of 443.5 km. It is the spine of the transport system in the region and provides nearest access to ports (Kolkata and Haldia) for the north eastern states of India and neighbouring Bhutan and Nepal. The development of this stretch will improve connectivity to the East-West Corridor, which has already been four-laned. West Bengal is strategically located to play a pivotal and catalytic role in promoting economic cooperation in the sub region (Bangladesh, Bhutan, North Eastern states and West Bengal).

The highway development is divided into three contiguous sections covers Baharampore and Farakka (103 km), Farakka and Raiganj (103 km) & Raiganj and Dalkhola (50 km). The concession lengths for the different segments totaling 256 km range from 25 to 30 years, including a construction period of 30 months and an investment of over Rs.3,200 crore. The Company has achieved significant progress in the two larger sections and is expecting to start operations later this year.

WB is the fourth most populous state in the country and is the sixth largest contributor to India''s GDP The traffic on NH34 comprises of 90% commercial traffic, carrying a diversified mix of manufacturing goods, building materials, steel, jute, food grains and tea.

Baharampore Farakka Highway

The construction work has progressed significantly in the last year on this stretch of 103 km. The Company expects to start operation later this year.

This stretch originates at Baharampore, about 190 km from Kolkata and terminates at Farakka. Baharampore, Nabagram, Farakka and Jangipur are the major passenger traffic generators for this stretch. The four-laning of two projects between Kolkata and Baharampore will further increase the throughput and improve traffic on this stretch. The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs.1,169 crore.

Farakka Raiganj Highway

The construction work has progressed significantly in the last year on this stretch of 103 km. The Company expects to start operation later this year.

This is a 103 km stretch originating at Farakka and terminating at Raiganj. Malda, Farakka and Gajol are the major passenger traffic generators for this stretch. The Malda industrial region is expected to lead the growth in this region. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs.1,378 crore.

Raiganj Dalkhola Highway

The progress on this stretch has been slow compared to the other two stretches due to certain execution challenges. This is a 50km stretch which comprises of 3 bypasses. Dalkhola, Raiganj and Islampur are the major passenger traffic generators for this stretch.

This is a 50 km stretch starting at Raiganj and terminating at the town of Dalkhola. The concession period is 30 years and includes a construction period of 30 months. The project is being implemented with an investment of Rs.684 crore.

iv) Steiner AG,Switzerland

Your Company holds through its wholly owned HCC Mauritius Enterprises Ltd. a controlling equity stake of 66% in Steiner AG. Steiner AG is a leading general contracting Company in Switzerland, specialized in turnkey development of new buildings and refurbishments, and offers services in all facets of real estate development and construction.

Steiner AG had a consolidated revenue of Rs. 4368.2 crore and a consolidated profit of Rs. 47.3 crore in the financial year 2012-13.

After two years of construction Steiner AG completed the project Andreaspark G3, a large apartment building in one of Zurich''s fastest growing residential areas. With a height of 42 meters the building offers 90 new apartments.

In March 2010 the Company handed over the new premises to the International Union for Conservation of Nature in Gland, which is a perfect example for the new era of eco-building techniques. This year, the Company achieved a milestone with this work, as it was awarded the first ever LEED Platinum certificate by the Green Building Council Environment Design in Switzerland. In Glattpark, one of Switzerland''s biggest residential and commercial development areas, Steiner AG is building the project Lindbergh- Allee. The property lies close to Zurich International Airport and will offer around 30''000 sqm of office and living space.

In the business year 2012-13 Steiner AG signed many important contracts. At year end, the order backlog of Steiner AG was CHF 1,210 million compared to CHF 1,512 million as of March 31, 2012. Steiner AG has also secured projects worth more than CHF 200 million in this year which are yet to be signed.

The Board of Directors of Steiner AG comprises six members. Your Company is represented by four nominees: Mr. Ajit Gulabchand, who also acts as Chairman, Mr. K.G. Tendulkar, Mr. Anil Singhvi and Dr. Peter Huggler.

v) Highbar Technologies Ltd

Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

Despite tough economic conditions, Highbar won 14 new customers in the financial year against stiff competition by established large IT players to take the total tally of its customers to 64. Long list of reference customers and high quantum of repeat business indicates maturity and scalability of Highbar''s delivery capabilities.

Highbar''s Dubai subsidiary, Highbar Technologies FZ-LLC is now fully operational and has secured Highbar''s largest contract till date with Oman based Company and also won customer in Saudi Arabia.

Highbar Technologies has taken strategic alliance with SAP to next level with ''GOLD Partnership'' and is preferred partner of SAP for infrastructure industry.

Infrastructure industry is going beyond ERP to new business critical IT systems. Highbar has been at forefront of this with solutions like maximum number of SAP BOBJ (business intelligence & dashboard) and SAP CRM (customer relationship management) implementations for Infrastructure industry, business process consolidation (BPC) and employee portal (ESS). The Company launched new solutions - Highbar RapidStart and Highbar RapidStart Analytics. These solutions are based on the templatised approach for ERP and Business Intelligence respectively and are Intellectual Property (IP) assets for Highbar Technologies.

Highbar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth.

Highbar Technologies is on the course towards accomplishing its vision of being ''the most preferred end to end IT solution provider'' for infrastructure industry.

5. Subsidiary Companies

At the beginning of the year, the Company had 72

Subsidiary Companies.

During the year under review, the following changes have taken place.

a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

HCC Operations & 07.11.2012 Maintenance Ltd

b) HCC Concessions Ltd (a subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

Narmada Bridge Tollway 18.06.2012 Ltd

(c) During the year under review w.e.f 18.02.2013, Lavasa Corporation Ltd, a subsidiary Company of your Company has acquired remaining 74% stake (previously 26% stake) in Verzon Hospitality Ltd, making it a subsidiary of your Company from the date of acquisition of the said stake.

d) HCC Singapore Enterprises Pte. Ltd has ceased to be your subsidiary w.e.f 11th April 2012.

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India - Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report of the subsidiary companies for the year/period ended December 31, 2012/March 31, 2013 are not attached to the Balance Sheet of the Company as the Company has/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated May 3, 2013 consented for not attaching the balance sheet(s) of the concerned subsidiary (ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following formation in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The annual accounts and other related detailed information of the following subsidiaries shall be made available to shareholders of the holding Company and subsidiary companies seeking such information at any point of time:

1. Hincon Technoconsult Ltd

2. Western Securities Ltd

3. Pune-Paud Toll Road Company Ltd

4. Nirmal BOT Ltd

5. Panchkutir Developers Ltd

6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

7 HCC Infrastructure Company Ltd

8. HCC Aviation Ltd

9. Badarpur Faridabad Tollway Ltd

10. Baharampore - Farakka Highways Ltd

11. Farakka - Raiganj Highways Ltd

12. Raiganj - Dalkhola Highways Ltd

13. Dhule Palesner Operations & Maintenance Ltd

14. HCC Power Ltd

15. HCC Operations & Maintenance Ltd

16. Narmada Bridge Tollway Ltd

17. HCC Construction Ltd

18. Highbar Technologies Ltd

19. Highbar Technologies FZ LLC

20. HCC Mauritius Enterprises Ltd

21. Klemanor Investments Ltd

22. Steiner AG (Formerly known as Karl Steiner AG)

23. Steiner Promotions et Participations SA

24. VM ST AG

25. Eurohotel SA

26. Steiner (Germany) GmbH

27. Steiner Leman SAS

28. SNC Valleiry Route De Bloux

29. Steiner India Ltd

30. HCC Real Estate Ltd

31. HRL Township Developers Ltd

32. HRL (Thane) Real Estate Ltd

33. Nashik Township Developers Ltd

34. Maan Township Developers Ltd

35. Charosa Wineries Ltd

36. Powai Real Estate Developers Ltd

37. HCC Realty Ltd

38. Lavasa Corporation Ltd

39. Lavasa Hotel Ltd

40. Apollo Lavasa Health Corporation Ltd

41. Lakeshore Watersports Company Ltd

42. Dasve Convention Centre Ltd

43. Dasve Business Hotel Ltd

44. Dasve Hospitality Institutes Ltd

45. Lakeview Clubs Ltd

46. Dasve Retail Ltd

47. Full Spectrum Adventure Ltd

48. Spotless Laundry Services Ltd

49. Lavasa Bamboocrafts Ltd

50. Green Hill Residences Ltd

51. My City Technology Ltd

52. Reasonable Housing Ltd

53. Future City Multiservices SEZ Ltd (Formerly known as Minfur Interior Technologies Ltd)

54. Rhapsody Commercial Space Ltd

55. Valley View Entertainment Ltd

56. Andromeda Hotels Ltd

57. Sirrah Palace Hotels Ltd

58. Warasgaon Tourism Ltd

59. Our Home Service Apartments Ltd

60. Warasgaon Power Supply Ltd

61. Sahyadri City Management Ltd

62. Hill City Service Apartments Ltd

63. Kart Racers Ltd

64. Warasgaon Infrastructure Providers Ltd

65. Nature Lovers Retail Ltd

66. Osprey Hospitality Ltd

67. Starlit Resort Ltd

68. Warasgaon Valley Hotels Ltd

69. Rosebay Hotels Ltd

70. Mugaon Luxury Hotels Ltd

71. Warasgaon Assets Maintenance Ltd

72. Hill View Parking Services Ltd

73. Whistling Thrush Facilities Services Ltd

74. Verzon Hospitality Ltd

(vi) Further, the annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder at the head office/registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any shareholder on demand;

(vii) The holding as well as subsidiary companies in question shall regularly file such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

6. Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

During the year under review, your Company''s paid up equity share capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising 60,66,10,420 Equity Shares of Rs. 1/- each.

7. Public Deposits and Loans/Advances

Your Company has not accepted any deposits from the public, or its employees during the year under review.

Pursuant to Clause 32 of the Listing Agreement, the particulars of loans/advances given to subsidiaries have been disclosed in the Annual Accounts of the Company.

8. Employee Stock Option Scheme (ESOP)

As on March 31, 2013, 61,54,080 stock options are outstanding (comprising vested and unvested, after adjustment for lapsed and exercised options), in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, 18,36,310 options got vested to the employees of the Company and in aggregate, 67,01,040 options stands vested with the employees as on March 31, 2013.

The particulars with regard to the Employee Stock Options as on March 31, 2013 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2013, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Company''s Auditors confirming compliance forms part of this Report.

12. Directors

In accordance with Article 186A of the Articles of Association of the Company, the Board of Directors of your Company, at their meeting held on March 28, 2013, has re-appointed Mr. Ajit Gulabchand as Managing Director, designated as Chairman & Managing Director of the Company for a period of 5 years with effect from April 1, 2013, subject to the approval of the Shareholders of the Company at the ensuing Annual General Meeting.

In accordance with Article 135 and Article 186A of the Articles of Association of the Company, on May 3, 2013, the Board of Directors of your Company appointed Mr. Rajgopal Nogja as Additional Director and Whole-time Director of the Company designated as Group Chief Operating Officer & Whole-time Director for a period of 5 years subject to the approval of Shareholders of the Company at the ensuing Annual General Meeting.

The Company has received Notice under Section 257 of the Companies Act, 1956 from a member signifying his intention to propose Mr. Rajgopal Nogja as a candidate for the office of Director at the ensuing Annual General Meeting.

As per the provisions of the Companies Act, 1956 read with Article 152 of the Articles of Association of the Company, Mr. Y. H. Malegam, Mr. K. G. Tendulkar and Mr. Anil C. Singhvi are the Directors of the Company who are due to retire by rotation. Mr. K. G. Tendulkar and Mr. Anil C. Singhvi being eligible, offer themselves for re-appointment. Mr. Y H. Malegam has expressed his intention not to seek re-appointment as a Director of the Company.

The Board of Directors records its appreciation & recognition of the valuable contribution and services rendered by Mr. Y. H. Malegam during his long association for the last four decades as a Director of your Company.

The Company has received Form DD-A from all these Directors as required under the Companies (Disqualification of Directors under Section 274 (1) (g) of the Companies Act, 1956) Rules, 2003.

Profile of all these Directors has been given in the Report on the Corporate Governance as well as in the Notice of the ensuing Annual General Meeting of the Company.

13. Directors'' Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the loss of the Company for the year ended on that date.

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) the annual accounts have been prepared on a going concern basis.

14. Industrial Relations

The industrial relations continued to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 8,19,180 to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2004-05 which remained unclaimed by the shareholders of the Company for a period exceeding 7 years from its due date of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

17. Conservation of Energy,Technology Absorption and Foreign Exchange Earnings and Outgo.

The information relating to the conservation of energy, technology absorption and foreign exchange earnings and outgo as required to be disclosed under the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules 1988, is given in Annexure II forming part of this Report.

18. Auditors

M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the Company, bearing ICAI Registration No. 100186W retire at the ensuing Annual General Meeting and are eligible for re-appointment.

As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the Auditors to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

19. Auditors'' Report

The Auditors'' Report to the shareholders on the Accounts of the Company for the financial year ended March 31, 2013 does not contain any qualification.

20. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJITGULABCHAND

Chairman & Managing Director

Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083

Place: Mumbai

Date: May 3, 2013

 
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