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Notes to Accounts of Hindustan Construction Company Ltd.

Mar 31, 2016

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

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

3. Corporate Debt Restructuring (CDR) Package

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

4. Terms of repayment and details of security

I. Secured

(A) Debentures

i) Axis

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

ii) LIC

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

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

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

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

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

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

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

(E) Other Term Loans

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

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

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

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

(iii) Toronto Dominion LLC - ECB USD 9.36 million

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

(F) Funded Interest Term Loan (FITL)

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

(G) Rupee Term Loans (RTL-A)

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

II. Unsecured

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

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

B) FITL from Other Parties

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

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

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

Panvel Taluka described as the First Mortgaged Properties.

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

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

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

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

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

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

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

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

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

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

Collateral security pari-passu with all CDR lenders

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The above security having ranking as below:

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

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

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

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

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

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

Note 12.1 During the year ended 31 March 2016, the Company divested 26% equity stake in VCPPL for an aggregate consideration of Rs. 90.03 crore out of which the Company has received Rs. 77.03 crore resulting in gain of Rs. 72.16 crore. Balance Rs. 13 crore will be realised and accounted for on fulfilment of certain conditions.

Note 26.1 In respect of year ended 31 March 2014, the Company''s request for remuneration in excess of the limit prescribed and held in trust, to the Ministry of Corporate Affairs (the ''Ministry''), to reconsider their approval of Rs. 1.92 crore against the entire remuneration of Rs. 10.66 crore paid to the Chairman and Managing Director (CMD), is pending with the Ministry.

Note 26.2 In respect of year ended 31 March 2015, the Company has provided for remuneration for CMD of Rs. 10.66 crore. The Company has made an application to the Ministry seeking its approval for payment of Rs. 10.66 crore which is in excess of the limits specified under Schedule V to the Companies Act, 2013.

Note 26.3 In respect of year ended 31 March 2016, the Company''s application to the Ministry for approval of remuneration paid/ payable Rs. 10.66 crore to the CMD which is in excess of the limit prescribed and held in trust, is pending with the Ministry.

Note 26.4 The Draft Companies (Amendment) Act, 2016 proposes that waiver of the recovery of any excess amount of managerial remuneration can be approved by the Company by special resolution within specified period after obtaining approval of such waiver from secured creditors of the Company (till now permissible only with approval of Central Government). The Draft also proposes that any application made to the Central Government under section 197 and which is pending with the Government shall abate and the Company shall obtain the approval as per amended provision within one year of commencement of Companies (Amendment) Act, 2016.

Note 32(a) The Company, as at 31 March 2016, has (i) an investment amounting to Rs. 474.36 crore (31 March 2015: Rs. 474.36 crore), long term loans and advances Rs. 443.96 crore (31 March 2015: Rs. 404.06 crore), other non-current assets Rs. 19.43 crore (31 March 2015: Rs. 25.01 crore) and other current assets Rs. 5.07 crore (31 March 2015: Rs. 3.43 crore) in HCC Real Estate Limited (HREL) which is holding 68.70% share in Lavasa Corporation Limited (LCL) and (ii) an investment amounting to Rs. 0.01 crore (31 March 2015: Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (31 March 2015: Nil), other non-current assets Rs. 13.08 crore (31 March 2015: Rs. 14.30 crore) and other current assets Rs. 8.28 crore (31 March 2015: Rs. 77.24 crore) in LCL. While such entities have incurred losses during its initial years and consolidated net-worth of all these entities as at 31 March 2016 has been substantially/ fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values, hence net-worth of these subsidiaries does not represent its true market value. Therefore, the decline in the value of above investments is considered to be temporary in nature and the loans and advances, other non-current assets and other current assets together with the interest thereon are good and recoverable.

Note 32(b) The Company, as at 31 March 2016, has an investment amounting to Rs. 0.25 crore (31 March 2015: Rs. 0.25 crore), long term loans and advances Rs. 984.82 crore (31 March 2015: Rs. 634.81 crore), other non-current assets Rs. 127.48 crore (31 March 2015: Rs. 283.80 crore) and other current assets Rs. 18.31 crore (31 March 2015: Rs. 35.84 crore) in HCC Infrastructure Company Limited (HIL) which is holding 85.45% in HCC Concession Limited having various Build, Operate and Transfer (BOT) SPVs under its fold. While this entity has incurred losses during its initial years and consolidated net-worth as at 31 March 2016 has been fully eroded, the underlying projects are in the early stages of development and are expected to achieve adequate profitability on substantial completion, hence net-worth of this subsidiary does not represent its true market value. Therefore, the decline in the value of above investment is considered to be temporary in nature and the loans and advances, other non-current assets and other current assets together with the interest thereon are good and recoverable.

Note 33 Uncompleted Contracts and Value of Work Done (Inventories)'' and ''Long-Term Trade Receivables'' includes Rs. 978 crore (Previous year: Rs. 1,181 crore) and Rs. 206 crore (Previous year: Rs. 241 crore), respectively, outstanding as at 31 March 2016 representing various claims raised earlier, based on the terms and conditions implicit in the contracts and other receivables in respect of closed/suspended projects. These claims are mainly in respect of cost over-run arising due to client caused delays, suspension of projects, deviation in design and change in scope of work; for which Company is at various stages of negotiation/discussion with the clients or under arbitration. These receivables also includes Rs. 89 crore (Previous year: Rs. 149 crore) of arbitration awards received in favour of the Company, which have been subsequently set aside by District Court/ High Courts against which the Company has preferred appeals at High Courts/ Supreme Court and has been legally advised that it has good case on merits. Considering the contractual tenability, progress of negotiation/ discussion with the client, the management is confident of recovery of these receivables.

Note 34 The Company has a single segment namely "Engineering & Construction" Therefore, the Company''s business does not fall under different business segments as defined by Accounting Standard 17 - "Segmental Reporting" referred to in Section 133 of the Companies Act, 2013.

Note 40 Pursuant to Shareholders Agreement (SHA) executed on 9 August 2011, the Company is required to hold 100% equity stake in HCC Infrastructure Company Limited (HIL) until Private Equity Investor gets an exit from HCC Concessions Limited (HCL) through means as specified in the SHA and there are certain other customary restrictions on pledging / creation of any encumbrance over shares / assets of HIL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highways Limited, Farakka - Raiganj Highways Limited., Dhule Palesner Tollways Limited and Raiganj - Dalkhola Highways Limited to National Highways Authority of India (NHAI) that it will not transfer its shareholding till the commercial operation date. The Company has entered into sale agreement with HCL to sell these shares at book value at future dates on fulfilment of that obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs. 27.70 crore (Previous year: Rs. 45.58 crore) for transfer of the above shares at book value from HCL, subject to necessary approvals and consents to the extent required in the following BOT SPV''s. During the year ended 31 March 2016, the Company has transferred 17,882,700 equity shares in Dhule Palesner Tollways Limited to HCL at book value.

Note 41.2 The obligation for leave entitlement and compensated absences is recognized in the same manner as gratuity and provision of Rs. 14.67 crore (Previous year: Rs. 15.35 crore) has been made as on 31 March 2016.

Note 5. Information required for the current year and previous years as per Para 120(n) of AS15 (Revised)

Note 6. Trade Receivable includes Rs. 2,668.90 crore (Previous year: Rs. 1,772.16 crore) on account of claims awarded in arbitration in favour of the Company which has been challenged by the client in High Courts/ Supreme Court.

Note 7. *represents amount less than Rs. 1 lakh.

Note 8. Previous year figures have been regrouped or reclassified, to conform to the current year''s presentation wherever considered necessary.


Mar 31, 2014

1. The Company (Accounting Standards) Second Amendment Rules 2011 has amended the provision of AS-11 relating to "The Effects of the Changes in Foreign Exchange Rates" vide notification dated 29th December 2011. In terms of these amendments, the Company has carried over long term monetary exchange gain of Rs.4.29 crore (previous year Rs.0.31 crore) through "Foreign Currency Monetary Items Translation Difference Account", to be recognised over the balance period of such long term asset/ liability.

Note 4 Money received against share warrants

The Company has allotted 39,215,686 warrants convertible into 39,215,686 Equity Shares of Rs.1/- each at a price of Rs.16.32 per Equity Share to the Promoters of the Company (Hincon Holdings Ltd. & Hincon Finance Ltd.) on June 2 7, 2013 in compliance with Chap VII of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009. The warrant holders shall be entitled to exercise the option to apply for the Equity Shares against the warrants within a period of 18 months from the date of allotment of the said warrants. As per the terms, the company has appropriated 25% of the issue price aggregating to Rs.16 crore from the unsecured loan from promoters.

2. Additional Information to Secured/Unsecured Long Term Borrowings:

The long term portion of debentures and term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under the current liabilties as per the disclosure requirements of the Revised Schedule VI.

3. Details of Securities and Terms of repayment

The Company received Letter of Approval (LOA) on 29th June,2012 issued by Corporate Debt Restructuring Empowered Group (CDREG) approving CDR package. As on 31st March 2014, the package has been implemented. The CDR related documents have been executed and security creation stands completed.

I. Secured

(A) Debentures

1) Axis NCD

Security created by way of registered mortgage over 231.6628 acres of Lavasa land situated in 5 villages namely Village Admal, Bhode, Gadle, Padalghar and Ugavali in taluka Mulshi, District Pune, Maharashtra. On restructuring by CDR, above debentures are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization.

2) LIC NCD

On restructuring by CDR, above debentures are classified as RTL- 1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. LIC NCD''s are secured in form of :

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

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

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

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

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

The above security having ranking as below;

1. a first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties

2. a second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties"

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(B) Rupee Term Loans (RTL-1)

On restructuring by CDR, above loans are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

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

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

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

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

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

The above security having ranking as below;

1. a first ranking and pari passu Security Interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.

2. a second ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(C) Rupee Term Loans (RTL-2)

On restructuring by CDR, above loans classified as RTL-2 are repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-2 is secured in form of :

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

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

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

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

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

The above security having ranking as below;

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

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

On restructuring by CDR, Commercial Paper of Central Bank of India has been classified as WCTL-1 repayable in 16 quarterly installments commencing from April 15, 2014 and ending on January 15, 2018, having 11.75% p.a. linked to monitoring institution''s base rate. WCTL-1 is secured in form of;

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

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

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

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

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

The above security having ranking as below;

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

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

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

(D) (2) & (3) Working Capital Term Loan (WCTL-2)

On restructuring by CDR, Commercial Paper of NABARD & Federal Bank has been classified as WCTL-2 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having 11.75% p.a. .linked to monitoring institution''s base rate. WCTL-2 is secured in form of;

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

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

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

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

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

The above security having ranking as below;

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

4. Other Term Loans

Standard Chartered Bank- ECB USD 13.77 million

Outstanding ECB of USD 13.77 million has been restructured with repayment of 17 quarterly installments starting from 15th April 2014 till 15th March 2018 having interest rate of 3 months LIBOR plus 350 basis points. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation executed on 10th November 2009.

Development Bank of Singapore - ECB USD 10.38 million

Outstanding ECB of USD 10.38 million has been restructured with repayment of 17 quarterly installments starting from 5th October 2014 till 5th October 2018 having interest rate of 3 months LIBOR plus 385 basis points. The facility is secured by first charge by way of hypothecation of plant and machineries and heavy vehicles acquired under the facility described in the schedule I(2) to the deed of hypothecation executed on 29th April 2 010 .

Toronto Dominion LLC - USD 10.83 mn

The facility is secured by first priority mortgage and security interest to and in favor of Wilmington Trust Company (the security trustee) on one (1) Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause no.2.1 as per the Aircraft Charge Agreement executed on January 6, 2011. The FC loan is repayable in 22 equal quarterly installments of apprx. Rs.2.96 crore each having period of maturity w.r.t. the balance sheet date is 5.5 years. The loan has interest rate of 3 month Libor plus 120 basis points.

5. Funded Interest Term Loan

On restructuring by CDR, balance FITL of Rs.109.83 crore repayable in 6 equal quarterly installments from April 15, 2014 to July 15, 2015 having interest 11.25% p.a. .linked to monitoring institution''s base rate. FITL pertaining to RTL-1 and RTL-2 is secured as per security being offered to RTL-1 and RTL-2.

II. Unsecured

B) Term Loans from Other Party:

IFCI - Unsecured loan of Rs. 150 crore

The loan has been restructured, repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest rate of 11.5% p.a.

C) Funded Interest Term Loan

On restructuring, balance IFCI FITL of Rs.9.71 crore is repayable in 6 equal quarterly installments commencing from April 15, 2014 and ending on July 15, 2015 having interest of 11.5% p.a.

I. Secured

Loans repayable on demand

1. Cash Credit Limits

On restructuring by CDR, working capital (WC) facilities are chargeable at interest rate of 11.75% p.a. linked to monitoring institution''s base rate. WC is secured in form of;

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

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

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

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

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

The above security having ranking as below;

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

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

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

Standard Chartered Bank–WCDL of Rs. 50 crore

The facility carries interest rate of 11.5% p.a. secured in form of;

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

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

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

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

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

The above security having ranking as below;

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

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

Collateral security pari-passu with all CDR lenders

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs.9477.60 crore, against which outstanding amount is Rs.7895.55 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand

Yes bank is having subservient charge on identified receivables. Yes Bank issued NOC dated 4th Sept''12 for ceding first charge in favour of Working Capital Lenders and second charge in favour of Term Lenders.

6. Inter Corporate Deposits are repayable on demand and interest is charged at market rates except interest free loan to the tune of Rs.294.27 crore (Previous year Rs.309.40) to HCC Real Estate Ltd.

7. Loans and Advances include an amount due from an Officer of the Company Rs.NIL (previous year Rs.0.02 crore). Maximum amount outstanding for the period Rs.0.02 crore (previous year Rs.0.05 crore).

8. Sub-contract, transportation, hire etc. include insurance Rs.39.34 crore (previous year Rs.38.48 crore), rates and taxes Rs.204.36 crore (previous year Rs.168.59 crore ) and lease rent Rs.20.80 crore (previous year Rs.27.39 crore ).

9. Light vehicle expenses grouped under construction expenses include insurance Rs.1.51 crore (previous year Rs.1.91 crore) and taxes Rs.0.10 crore (previous year Rs.0.21 crore).

10. Remuneration paid to Chairman & Managing Director is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 by Rs.10.18 crore (previous year Rs.10.18 crore). The Company has made an application seeking approval from Central Government. Approval for both the years is awaited.

11. In accordance with Accounting Standard 11 (Revised) the net exchange Loss debited to Statement of Profit & Loss is Rs.13.85 crore (previous year Loss Rs.14.57 crore).

12. The Income-tax assessments of the Company have been completed upto the accounting year ended 31st March, 2010. Few appeals preferred by the Company are pending before appellate authorities.

13. Company has invested Rs.474.36 crore in HCC Real Estate Ltd. (HREL) and the outstanding balance of loans and advances as on 31st March 2014 amounts to Rs.391.77 crore. The consolidated networth of HREL as on 31st March, 2014 is Rs.(18.38) crore. Considering the intrinsic value of the assets of the business under the fold of HREL such as LAVASA etc, wherein, the potential of market appreciation over book value is substantially high, the net worth of HREL does not represent its true market value. The diminution is of temporary nature and the loans together with interest accrued thereon are good and recoverable.

14. Company has also invested in HCC Infrastructure Ltd. (HIL) Rs.0.25 crore and there are outstanding loans and advances of Rs.842.76 crore as of 31st March, 2014. The consolidated networth of HIL as on 31st March 2014 is Rs.(193.33) crore. HIL is engaged in the business of building infrastructure on BOT( Build, Operate and Transfer) basis through specific SPVs for each projects under HCC Concessions Ltd. These BOT projects do takes beyond 15 to 20 years to unlock its true potential. These businesses also generate captive construction contracts to the Parent company. Therefore the diminution in the value of HCC Infrastructure Ltd. is temporary in nature and the Loans given together with the interest thereon are good and recoverable.

15. Uncompleted Contracts and Value of Work Done, Long Term Trade Receivable and Short Term Loans and Advances as at 31st March, 2014 include claims of Rs.445.53 crore, Rs.34.33 crore and Rs.38.50 crore respectively .These claims and receivables are overdue for long period and mainly in respect of certified work done, cost over-run arising due to client caused delays, deviation in design and change in scope of work; for which Company is at various stages of negotiation/discussion with the clients or under arbitration on a continuing basis. Considering the contractual tenability, progress of negotiation/discussion with client and based on the past experience of the Company, the management is reasonably confident of the recovery of the same.

16. In compliance with the Accounting Standards as applicable to its nature of business, the company has been recognizing the Revenue, on receipt of favorable Arbitration Awards on its claims including interest as awarded from time to time. The aggregate amount outstanding in the books as of 31st March, 2014 is Rs.1299.68 crore (previous year Rs.737.05 crore). Five of such Arbitration Awards were set-aside by different courts, such as Dist Court/High Courts aggregating to Rs.105.44 crore (previous year Rs.105.44crore) (excluding interest of 12% from the date of 13th feb, 2004 on one of the award amounting to Rs.17.81 crore), on appeal by clients. On examining the merits of the claims/ Arbitration Awards/Court Judgments, the company has preferred Appeals at Higher Court/Supreme Court as the case may be. Under the circumstances, the company has been legally advised that it has good case on merits and therefore no provision considered necessary.

17. Trade Receivable and Uncompleted Contracts and Value of Work Done (net of client advances) as at 31st March, 2014 include Rs.17.55 crore and Rs.18.24 crore in respect of a project which has been handed over to the client and Rs.3.41 crore and Rs.29.95 crore in respect of two projects for which work has been suspended by client. The company is in continuous dialogue with the client and also contemplating appropriate legal action for realization of these dues. Management is reasonably confident of recovery of these amounts.

18. In respect of certain projects, client has recovered from work bills, Building and Labour cess as per the provisions of "Building and Other Construction Workers ( Regulation of Employment and Conditions of Service) Act, 1996". Company has claimed these amount from clients as per the provisions of the Contract, being levy made applicable subsequent to award of the contract as this incidence of expenditure was not part of tender/contract. Total amount outstanding on this account as of 31st March is Rs.33.14 crore (previous year Rs.32.99 crore). These amounts are under discussion/referred to Arbitration as the case may be, and based on legal opinion are considered as recoverable in due course of time.

19. The Company has a single segment namely "Engineering & Construction". Therefore, the Company''s business does not fall under different business segments as defined by Accounting Standard 17- "Segmental Reporting" referred to in subsection (3C) of section 211 of the Companies Act, 1956.

20. Disclosure in accordance with Accounting Standard - 7 ( Revised) - Amount due from / to customers on Construction Contracts.

21. Disclosure of derivative instruments and unheeded foreign currency exposure as at balance sheet date

(a) Derivatives outstanding as at the reporting date

22. Private Equity Investment and Consolidation of BOT SPVs

During the year 2011-12, HCC transferred it''s equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

Pursuant to Shareholders Agreement (SHA) executed on 9th August 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs.240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) In the event the entire shareholding of any of the Group Entities listed at Annexure 2.10 is not sold and transferred to the Company within the time periods set forth at Section 2.10, the Investor shall have the right to seek conversion of all or part of the CCPSs held by it into Equity Shares in accordance with the formula set forth at Annexure 2.14 to increase in the Shareholding of the Investor in the Company. The Investor may exercise its right to seek conversion under this sub-section, anytime within 2 (two) years from the Transfer Date..

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd., Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd., and Raiganj - Dalkhola Highway Ltd. to NHAI, it will not transfer its shareholding till the commercial operation date The company has entered into sales agreement with HCC Concession Ltd. to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The company has received advance consideration of Rs.42.64 crore for transfer of the above shares at book value from HCC Concession Ltd., subject to necessary approvals and consents to the extent required in the following BOT SPV''s:

23. Company has acquired 66% stake in Steiner AG on 5th May 2010 through HCC Mauritius Enterprises Ltd. During the year, the company has acquired balance stake of 34% in Steiner AG on 7th February 2014 through its wholly owned subsidiary HCC Mauritius Investment Ltd.

24. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD) convertible into ordinary shares. The particulars including the current status, terms of issue as at 31st March, 2014 are given below:

i) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") – Tranche

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 6th November, 2009.

ii) IndusInd Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date 10th July, 2009.

iii) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") – Tranche 1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 6 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 13th December, 2008.

iv) Bank of India has subscribed Rs.150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). In FY 2010-11 the Company had prepaid Rs.90 crore of subscribed value of DDCD. As on the date of the balance sheet, the Company has Rs.60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date 26th September, 2008. It was repaid during the year.

(b) Lavasa Corporation Limited a subsidiary, has issued Non Convertible Debentures (NCD). The particulars, terms of issue as at 31st March, 2014 are given below:

i) Jammu & Kashmir Bank Limited had subscribed Rs.100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On 3rd September 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs.1 0 0 crore for the tenor of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date 13th May, 2010.

ii) ICICI Bank has converted Rs.250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

iii) Bank of India has subscribed Rs.105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs.10,00,000 each on 19th November 2010 for the tenor of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date 19th November, 2010. It was repaid during the year.

iv) Axis Bank has converted Rs.225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. During the year Company had prepaid NCD having face value of Rs.100 crore. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013. It was repaid during the year.

25. Figures for the previous year have been regrouped/recast, wherever necessary.

26. represents amount less than Rs.100,000.


Mar 31, 2013

A Terms/rights attached to shares:

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

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

b Shares reserved for issue under options :

There are 6,154,080 (previous year 6,462,960) stock options outstanding convertible into 6,154,080 (previous year 6,462,960) equity shares of Rs. 1/- each, the same are convertible at an exercise price of Rs. 52.03 per share.

During the current year, none of the Options were exercised / converted into Equity Shares (previous year 77,500 at an exercise price of Rs. 21.70). There were 308,880 (previous year 557,040) stock options that got lapsed during the current year.

c. Employees Stock Option Scheme:

i. Options granted

a) The Company offered 4,458,800 Stock Options on April 25, 2008 (each option carrying entitlement for one equity share of the face value of Rs. 1/- each) at a price of Rs. 132.50 per equity share. Out of the total Stock Options offered, 898,180 have been lapsed on account of resignation / retirement by employees.

In accordance with the approval of the Board of Directors and shareholders of the Company, the ESOP compensation committee at its meeting held on July 20, 2009 had repriced 4,131,600 options at Rs. 104.05 per equity share.

b) The ESOP Compensation Committee at its meeting held on October 23, 2008 granted 193,750 options at an exercise price of Rs. 43.40 per equity share.

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

Accordingly, 3,553,760 employee stock options in-force granted by the Company on April 25, 2008 have been doubled i.e. 7,107,520 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 104.05 to Rs. 52.03 and 193,750 employee stock options granted by the Company on October 23, 2008 have been doubled i.e. 387,500 and the exercise price in respect of the same has been halved i.e. it has been reduced from Rs. 43.40 to Rs. 21.70.

f. Bonus Shares/ Buy Back/Shares for consideration other than cash issued during past five years:

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

Nil

(ii) Aggregate number and class of shares allotted as fully paid-up by way of Bonus Shares:

303,256,460 Equity Shares were issued as fully paid Bonus Shares by capitalisation of Securities Premium Reserve on August 12, 2010.

(iii) Aggregate number and class of shares bought back:

Nil

1.1 The Company(Accounting Standards) Second Amendment Rules 2011 has amended the provision of AS-11 relating to "The Effects of the Changes in Foreign Exchange Rates" vide notification dated December 29, 2011. In terms of these amendments, the Company has carried over long term monetary exchange gain of Rs. 0.31 crore (previous year loss of Rs. 5.32 crore) through "Foreign Currency Monetary Items Translation Difference Account", to be recognised over the balance period of such long term asset/ liability.

2.1 Additional Information to Secured/Unsecured Long Term Borrowings:

The long term portion of debentures and term loans are shown under long term borrowings and the current maturities of the long term borrowings are shown under the current liabilties as per the disclosure requirements of the Revised Schedule VI.

2.2 Detail of Securities andTerms of repayment

The Board of Directors of HCC in its meeting held on March 9, 2012 had accorded its approval for realignment of the debts of the Company under Corporate Debt Restructuring Mechanism of the Reserve Bank of India. CDR Empowered Group (CDREG) in its meeting held on March 29, 2012 has admitted the Company under CDR. CDREG issued Letter of Approval (LOA) on June 29, 2012. As on March 31, 2013, CDR package related documents have been executed and security creation stands completed.

I. Secured

(A) Debentures

On restructuring by CDR, above debentures are classified as RTL- 1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

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

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

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

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

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

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

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(B) Rupee Term Loans (RTL-1)

On restructuring by CDR, above loans are classified as RTL-1 repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

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

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

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

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

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

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

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(C) Rupee Term Loans (RTL-2)

On restructuring by CDR, above loans classified as RTL-1 are repayable in 31 quarterly installments commencing from April 15, 2014 and ending on October 15, 2021, having interest yield of 11.5% in yield equalization. RTL-1 is secured in form of :

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

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

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

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. A second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(D) (1) Working CapitalTerm Loan (WCTL-1)

On restructuring by CDR, Commercial Paper Loan of Central Bank of India has been classified as WCTL-1 repayable in 16 quarterly instalments commencing from April 15, 2014 and ending on January 15, 2018, having interest rate 11.5% p.a. linked to monitoring institution''s base rate. WCTL-1 is secured in form of:

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

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

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

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

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

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

Collateral security pari passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(D) (2) & (3) Working Capital Term Loan (WCTL-2)

On restructuring by CDR, Commercial Paper loan of NABARD & Federal Bank has been classified as WCTL-2 repayable in 31 quarterly instalments commencing from April 15, 2014 and ending on October 15, 2021, having 11.5% p.a. linked to monitoring institution''s base rate. WCTL-2 is secured in form of:

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

2. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

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

4. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

5. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

1. a second ranking and pari passu Security Interest by way of legal mortgage over the Mortgaged Properties.

Collateral security pari-passu with all CDR lenders:

1. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore.

2. Pledge of 200,703,600 equity shares (33.09%) of HCC Limited held by Hincon Holdings Ltd.

3. Personal guarantee of Mr. Ajit Gulabchand.

(E) Other Term Loans

Standard Chartered Bank- ECB USD 13.77 million Outstanding ECB of USD 13.77 million has been restructured with repayment of 18 quarterly installments starting from April 15, 2014 till March 15, 2018 having interest rate of 3 months LIBOR plus 350 basis points. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the First Schedule to the memorandum of hypothecation executed on November 10, 2009.

Development Bank of Singapore - ECB USD 10.34 million Outstanding ECB of USD 10.38 million has been restructured with repayment of 17 quarterly installments starting from October 5, 2014 till October 5, 2018 having interest rate of 3 months LIBOR plus 385 basis points. The facility is secured by first charge by way of hypothecation of plant and machineries and heavy vehicles acquired under the facility described in the schedule I(2) to the deed of hypothecation executed on April 29, 2010.

Toronto Dominion LLC - USD 12.80 mn

The facility is secured by first priority mortgage and security interest to and in favour of Wilmington Trust Company (the security trustee) on one (1) Hawker model 4000 airframe bearing manufacture''s serial number RC-26 together with two installed model PW208 engines more particularly described under Clause no.2.1 as per the Aircraft Charge Agreement executed on January 6, 2011. The Foreign currency loan is repayable in 26 equal quarterly instalments of apprx. Rs. 2.68 crore each, having period of maturity w.r.t the Balance Sheet date is 6.5 years. The loan has interest rate of 3 month LIBOR plus 120 basis points.

(F) Funded Interest Term Loan (FITL)

On restructuring by CDR, FITL of Rs. 156.38 crore repayable in 8 equal quarterly instalments commencing from October 15, 2013 and ending July 15, 2015 having interest rate 11% p.a. linked to monitoring institution''s base rate. FITL pertaining to RTL-1 and RTL-2 is secured as per security being offered to RTL-1 and RTL-2.

II. Unsecured

B) Term Loans from Other Party

IFCI - Unsecured loan of Rs. 150 crore

The loan has been restructured, repayable in 31 quarterly instalments commencing from April 15, 2014 and ending on October 15, 2021, having interest rate of 11.5% p.a.

C) Funded Interest Term Loan (FITL)

On restructuring, IFCI FITL of Rs. 12.95 crore is repayable in 8 equal quarterly instalments commencing from October 15, 2013 and ending on July 15, 2015 having interest of 11.5% p.a.

I. Secured

Loans repayble on demand

1. Cash Credit Limits

On restructuring by CDR, working capital (WC) facilities are chargeable at interest rate of 11.5% p.a. linked to monitoring institution''s base rate. WC is secured in form of:

i. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

ii. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

iii. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

iv. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

v. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

i. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

ii. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders:

i. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore

ii. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd

iii. Personal guarantee of Mr. Ajit Gulabchand

5. Standard Chartered Bank-WCDL of Rupees 50 crore

The facility carries interest rate of 11.5% p.a. secured in form of:

i. The parcel of immovable non- residential property admeasuring 22 acres and 24 gunthas located at Tara village, Panvel Taluka described as the First Mortgaged Properties.

ii. All the present and future movable assets of the Borrower (excluding current assets and the specified assets) as the Second Mortgaged Properties.

iii. All current assets of the Borrower (other than those forming part of additional assets) as the Third Mortgaged Properties.

iv. All of the additional assets collectively referred to as the Fourth Mortgaged Properties.

v. All of the specified assets collectively referred to as the Fifth Mortgaged Properties.

The above security having ranking as below:

i. A first ranking and pari passu Security Interest by way of legal mortgage over the Third Mortgaged Properties and Fourth Mortgaged Properties.

ii. In the form of a second ranking and pari passu Security Interest by way of a legal mortgage over the First Mortgaged Properties, the Second Mortgaged Properties and the Fifth Mortgaged Properties

Collateral security pari-passu with all CDR lenders:

i. Corporate guarantee of HCC Real Estate Limited (HREL) for Rs. 9,477.60 crore

ii. Pledge of 200,703,600 equity shares (33.09%) of HCC held by Hincon Holdings Ltd

Note : This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act 2006 and has been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by the auditors.

4.1 Company has invested Rs. 474.36 crore in HCC Real Estate Ltd. (HREL) and the outstanding balance of loans and advances as on March 31, 2013 amounts to Rs. 347.29 crore. The consolidated networth of HREL as on March 31, 2013 is Rs. 123.39 crore. Considering the intrinsic value of the assets of the business under the fold of HREL such as LAVASA etc, wherein, the potential of market appreciation over book value is substantially high, the networth of HREL does not represent its true market value. The diminution is of temporary nature and the loans together with interest accrued thereon are good and recoverable.

4.2 Company has also invested in HCC Infrastructure Ltd. (HIL) Rs. 0.25 crore and there are outstanding loans and advances of Rs. 736.08 crore as of March 31, 2013. The consolidated networth of HIL as on March 31, 2013 is Rs. (153.39) crore. HIL is engaged in the business of building infrastructure on BOT( Build, Operate and Transfer) basis through specific SPVs for each projects under HCC Concessions Ltd. These BOT projects do takes beyond 15 to 20 years to unlock its true potential. These businesses also generate captive construction contracts to the Parent Company. Therefore the diminution in the value of HCC Infrastructure Ltd. is temporary in nature and the Loans given together with the interest thereon are good and recoverable.

5.1 In compliance with the Accounting Standards as applicable to its nature of business, the Company has been recognizing the Revenue, on receipt of favourable Arbitration Awards on its claims including interest as awarded from time to time. The aggregate amount outstanding in the books as of March 31, 2013 is Rs. 737.05 crore. Five of such Arbitration Awards were set-aside by different courts, such as Dist Court/High Courts aggregating to Rs. 105.44 crore(previous year Rs. 35.50 crore) (excluding interest of 12% from the date of February 13, 2004 on one of the award amounting to Rs. 17.81 crore), on appeal by clients. On examining the merits of the claims/Arbitration Awards/ Court Judgments, the Company has preferred Appeals at Higher Court/ Supreme Court as the case may be. Under the circumstances, the Company has been legally advised that it has good case on merits and therefore no provision considered necessary.

6.1 In respect of certain projects, client has recovered from work bills, Building and Labour cess as per the provisions of "Building and Other Construction Workers ( Regulation of Employment and Conditions of Service) Act, 1996" Company has claimed these amount from clients as per the provisions of the Contract, being levy made applicable subsequent to award of the contract as this incidence of expenditure was not part of tender/contract. Total amount outstanding on this account as of March 31, 2013 is Rs. 32.99 crore. These amounts are under discussion/referred to Arbitration as the case may be, and based on legal opinion are considered as recoverable in due course of time.

6.2 Inter Corporate Deposits are repayable on demand and interest is charged at market rates except interest free loan to the tune of Rs. 309.40 crore (Previous year Rs. 309.40) to HCC Real Estate Ltd w.e.f. 2012.

6.3 Loans and Advances include an amount due from an Officer of the Company Rs. 0.02 crore (previous year Rs. 0.05 crore). Maximum amount outstanding for the period Rs. 0.05 crore (previous year Rs. 0.07 crore).

7.1 Sub-contract, transportation, hire etc. include insurance Rs. 38.48 crore (previous year Rs. 36.24 crore), rates and taxes Rs. 210.82 crore (previous year Rs. 168.59 crore ) and lease rent Rs. 27.16 crore (previous year Rs. 27.39 crore).

7.2 Light vehicle expenses grouped under construction expenses include insurance Rs. 1.14 crore (previous year Rs. 1.91 crore) and taxes Rs. 0.21 crore (previous year Rs. 0.17 crore).

7.3 The Company has taken various construction equipments and vehicles under non cancellable operating leases. The future minimum lease payments in respect of these as at March 31, 2013 are as follows.

8.1 Remuneration paid to Chairman & Managing Director is in excess of the limits specified in Schedule XIII of the Companies Act, 1956 by Rs. 10.18 crore (previous year Rs. 7.63 crore). The Company has made an application seeking approval from Central Government. Approval for both the years is awaited.

9.1 In accordance with Accounting Standard 11 (Revised) the net exchange Loss debited to Profit & Loss Account is Rs. 14.57 crore (previous year Loss Rs. 9.53 crore).

10. Private Equity Investment and Consolidation of BOT SPVs

During the year 2011-12, HCC transferred it''s equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

Pursuant to Shareholders Agreement (SHA) executed on August 9, 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs. 240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) in the event if the entire shareholding of all the group entities i.e Barahpore Farakka Highway Ltd, Farakka Raiganj Highway Ltd, Raiganj Dhalkola Highway Ltd. and Dhule Palesner Tollway Ltd. has not been sold and transferred by HCC to HCC Concession Ltd within the period of 20 months from the date of transfer date.

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd, Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd, and Raiganj - Dalkhola Highway Ltd. to NHAI till the commercial operation date The Company has entered into sales agreement with HCC Concession Ltd. to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs. 38.00 crore for transfer of the above shares from HCC Concession Ltd.

11. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD) convertible into ordinary shares. The particulars including the current status, terms of issue as at March 31, 2013 are given below:

i) Allahabad Bank has subscribed Rs.50 crore in the form of

Deep Discount Convertible Debentures ("DDCD") - Tranche

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

ii) IndusInd Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iii) Allahabad Bank has subscribed Rs.50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Tranche 1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

iv) Bank of India has subscribed Rs.150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). During the previous year the Company had prepaid Rs.90 crore of subscribed value of DDCD. As on the date of the balance sheet, the Company has Rs.60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenure of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs.10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

(b) Lavasa Corporation Limited a subsidiary, has issued Non Convertible Debentures (NCD). The particulars, terms of issue as at March 31, 2013 are given below

i) Jammu & Kashmir Bank Limited had subscribed Rs.100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On September 3, 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs. 100 crore for the tenure of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date.

ii) ICICI Bank has converted Rs.250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

iii) Bank of India has subscribed Rs.105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs.1,000,000 each on November 91, 2010 for the tenure of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date.

iv) Axis Bank has converted Rs.225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013.

12. Figures for the previous year have been regrouped/recast, wherever necessary.

13. '' * '' represents amount less than Rs. 100,000.


Mar 31, 2012

I) Rs 68 crore provisions made for future losses in respect of projects.

ii) Rs 64.87 crore pertains to an additional provision in respect of ongoing projects arising out of substantial delays in approval of claims, increase in estimated costs and delays in execution.

iii) Rs 33.69 crore being provision made in respect of closed projects.

1. Contingent Liabilities As at As at 31.03.2012 31.03.2011 Rs Crore Rs Crore (i) Counter Indemnities given to Banks, in respect of contracts

(a) For works in India (Secured on all the assets) 647.44 735.58

(b) *For works abroad (secured by ECGC counter guarantees) 271.28 225.77

*(Converted in rupees at the rate fixed by the Bank)

(ii) Claims not acknowledged as debts by the Company. 2.82 2.57

(iii) Income Tax Liability (AY 2008-09) that may arise in respect of which Company is in appeal 12.18 163.80

(The first appellate authority has decided almost all matters except one in favour of the Company resulting in substantial reduction in the tax liability provided last year. Now Company is in appeal before Income tax Appellate Tribunal for entitlement of actual loss claimed for the project instead of estimated loss)

(iv) Sales Tax liability / Works Contract Tax 34.93 18.71 liability / Customs Liability that may arise in respect of matters in appeal (Net of an amount of Rs 0.53 crore (previous year Rs 0.53 crore) Recoverable from Clients as per the terms of contract)

(v) Bills discounted and Retention 4.69 107.27 receivable with banks

(vi) Corporate Guarantees:

The Company has provided an undertaking to pay in the event of default on loan given by a bank to subsidiary, fellow subsidiary and Joint Ventures.

a) Pune Paud Toll Road Company - 9.77 Limited

b) Lavasa Corporation Limited 688.69 606.55

c) HCC Real Estate Limited - 65.00

d) HCC Mauritius Enterprises Ltd 156.52 156.52

e) Charosa Wineries Limited - 50.00

f) HCC Concessions Limited 28.26 100.00

g) HCC Infrastrucutre Limited 300.00 -

2. The Income-tax assessments of the Company have been completed upto the accounting year ended March 31, 2009. Few appeals preferred by the Company are pending before appellate authorities.

3. The Company has a single segment namely "Engineering & Construction". Therefore, the Company's business does not fall under different business segments as defined by AS 17- "Segmental Reporting" issued by ICAI.

4. Private Equity Investment and Consolidation of BOT SPVs

a) During the year HCC transferred it's equity shareholding in HCC Concessions Ltd. (HCL) to HCC Infrastructure Company Ltd.(HIL) to consolidate BOT businesses, rendering HCL 100% subsidiary of HIL.

b) During the year, pursuant to Shareholders Agreement (SHA) executed on August 9, 2011, Xander Investment Holding XXVI Limited (Xander), has acquire 14.55% equity stake in the HCC Concessions Ltd., by subscribing to equity shares and Compulsorily Convertible Cumulative Preference Shares (CCCPS) for a total consideration of Rs 240 crore. The CCCPS shall be compulsorily convertible at the earlier of (a) a Qualified IPO (b) 10 years from the date of their issuance (c) in the event if the entire shareholding of all the group entities i.e Bara pore Farakka Highway Ltd, Farakka Raiganj Highway Ltd, Raiganj Dhalkola Highway Ltd and Dhule Palesner Tollway Ltd has not been sold and transferred by HCC to HCC Concession Ltd within the period of 20 months from the date of transfer date.

As per SHA and SSA, HCC is required to hold 100% equity stake in HIL until Private Equity Investor gets an exit from HCL through an IPO or otherwise and there are certain customary restrictions on pledging / creation of any encumbrance over shares / assets of HCL/ BOT SPVs.

The Company has given inter alia an undertaking in respect of investment in Baharampore - Farakka Highway Ltd, Farakka - Raiganj Highway Ltd., Dhule Palesner Tollway Ltd, and Raiganj - Dalkhola Highway Ltd. to NHAI till the commercial operation date. The Company has entered into sales agreement with HCC Concession Ltd to sell these shares at book value at future date on fulfillment of obligation as per undertaking given to NHAI. The Company has received advance consideration of Rs 26.14 crore for transfer of the above shares from HCC Concession Ltd.

5. Disclosure in accordance with Accounting Standard-18 Related Party Transactions

A. Names of Related Parties & Nature of Relationship

a) Subsidiaries & its Subsidiaries:

1) Hincon Technoconsult Ltd.

2) Western Securities Ltd.

3) HCC Real Estate Ltd.

4) Panchkutir Developers Ltd.

5) HCC Singapore Enterprises Pte Ltd.

6) HCC Mauritius Enterprises Ltd.

7) HCC Construction Ltd.

8) Highbar Technologies Ltd.

9) HCC Infrastructure Company Ltd.

10) Baharampore-Farakka Highways Ltd.

11) Farakka-Raiganj Highways Ltd.

12) Raiganj-Dalkhola Highways Ltd.

13) Pune Paud Toll Road Company Ltd.

14) HCC Aviation Ltd.

15) HRL Township Developers Ltd.

16) HRL (Thane) Real Estate Ltd.

17) Nashik Township Developers Ltd.

18) Maan Township Developers Ltd.

(Previously Hinjewadi Township Ltd.)

19) Charosa Wineries Ltd.

20) Powai Real Estate Developers Ltd.

21) HCC Realty Ltd.

22) Lavasa Corporation Ltd.

23) Klemanor Investments Ltd.

24) Highbar Technologies FZLLC

25) Dhule Palesner Operations & Maintenance Ltd

26) HCC Power Limited

27) HCC Concessions Ltd (Previously HCC Infrastructure Ltd.)

28) Badarpur Faridabad Tollways Ltd.

29) Nirmal BOT Ltd.

30) Steiner AG, Switzerland

31) Steiner Promotions et Participations SA

32) Eurohotel SA

33) VM ST AG

34) Steiner (Deutschland) GmbH

35) Steiner Leman SAS

36) SNC Valleiry Route de Bloux

6. Disclosure in accordance with Accounting Standard -18 Related Party Transactions

37) Lavasa Hotels Ltd.

38) Apollo Lavasa Health Corporation Ltd

39) Dasve Business Hotels Ltd.

40) Dasve Convention Centre Ltd.

41) Lakeshore Watersport Company Ltd.

42) Dasve Hospitality Institutes Ltd.

43) Lakeview Clubs Ltd.

44) Dasve Retails Ltd.

45) Full Spectrum Adventure Ltd.

46) Spotless Laundry Services Ltd

47) Lavasa Bamboocraft Ltd.

48) Green Hill Residences Ltd.

49) My City Technology Ltd.

50) Reasonable Housing Ltd.

51) Future City Multiservices SEZ Ltd.

(Previously Minfur Interior Technologies Ltd.)

52) Rhapsody Commercial Space Ltd.

(Previously Rhapsody Hospitality Ltd.)

53) Sirrah Palace Hotels Ltd.

54) Andromeda Hotels Ltd.

55) Valley View Entertainment Ltd.

56) Whistling Thrush Facilities Services Ltd.

57) Warasgaon Power Supply Ltd.

58) Sahyadri City Management Ltd.

59) Warasgaon Tourism Ltd.

60) Our Home Services Apartments Ltd.

61) Hill City Service Apartments Ltd.

62) Warasgaon Infrastructure Providers Ltd.

63) Kart Racers Ltd.

64) Nature Lovers Retail Limited

65) Osprey Hospitality Limited

66) Mugaon Luxury Hotels Limited

67) Starlit Resort Limited

68) Rosebay Hotels Limited

69) Warasgaon Valley Hotels Limited

70) Steiner India Ltd

71) Warasgaon Assets Maintenance Limited

72) Hill View Parking Services Limited

b) Integrated Joint Ventures:

1) Nathpa Jhakri Joint Venture

2) HCC-Pati Joint Venture

3) Kumagai-Skanska-HCC-Itochu Group

4) HCC-L & T Purulia Joint Venture

5) Alpine - Samsung - HCC Joint Venture

6) Alpine - HCC Joint Venture

7) Dhule Palesner Tollway Ltd.

8) ARGE Prime Tower, Zurich

c) Associates

1) Warasgaon Lake View Hotels Limited (Previously known as Lavasa Star Hotel Limited)

2) Verzon Hospitality Ltd.

3) Palmetto Hospitality Limited

4) Ecomotel Hotel Limited

5) Bona Sera Hotels Limited

6) SOL Hospitality Limited

7) Evostate AG

8) MCR Managing Corp. Real Estate

9) Projektentwicklungsges. Parking Kunstmuseum AG

10) Vikhroli Corporate Park Pvt. Ltd.

11) Knowledge Vistas Limited

d) Other Related Parties:

1) Gulabchand Foundation (formed under section 25 of Companies' Act, 1956)

2) Hincon Holdings Ltd.

3) Hincon Finance Ltd.

7. (a) Lavasa Corporation Limited a subsidiary, has issued Deep Discount Convertible Debentures (DDCD). Compulsory Convertible Preference Shares (CCPS) conververtible into ordinary shares and Non Convertible Debentures(NCD). The particulars, terms of issue as at March 31, 2012 are given below:

i) Bank of India has subscribed Rs150 crore in the form of Deep Discount Convertible Debentures ("DDCD"). During the previous year the Company had prepaid Rs 90 crore of DDCD. As on the date of the balance sheet, the Company has Rs 60 crore of DDCD which carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

ii) Allahabad Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Trenche

1. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. The Bank has decided to exercise put option as per the terms. The Company is in discussion with the Bank to arrive at mutually accepatable proposition.

iii) IndusInd Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD"). This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date atan equity valuation of Rs 10,000 crore. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iv) Allahabad Bank has subscribed Rs 50 crore in the form of Deep Discount Convertible Debentures ("DDCD") - Trenched

2. This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crore or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crore. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

v) Jammu & Kashmir Bank Limited had subscribed Rs 100 crore in the form of Deep Discount Convertible Debentures ("DDCD"). On September 3, 2010, vide supplementary agreement, bank has converted the existing DDCD into 1 (one) Non Convertible Debenture ("NCD") aggregating Rs 100 crore for the tenor of 5 years. This NCD carry a coupon rate of 10.75% per annum, payable quarterly on subscription amount. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 39th, 48th and 60th month from the closing date.

vi) Bank of India has subscribed Rs 105 crore in the form of 1050 Non Convertible Debentures ("NCD") of face value Rs 10,00,000 each on November 19, 2010 for the tenor of 3 years. During the year, the coupon rate has been realigned to 6% per annum payable quarterly with a YTM of 12.50% per annum. The investor and HCC have a put/call option respectively to sell/ purchase the NCD at the end of 15th, 24th and 36th month from the closing date.

vii) Axis Bank has converted Rs 225 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from December 30, 2011. These NCD carry a coupon of 9% per annum payable monthly on the subscription value of NCD with a YTM of 17.50% per annum and are to be redeemed on June 24, 2013. These NCD have a put/call option available on June 24, 2013.

viii) ICICI Bank has converted Rs 250 crore of Deep Discount Convertible Debentures ("DDCD") into Non Convertible Debentures ("NCD") with effect from January 6, 2012. These NCD carry a coupon of 9% per annum on the subscription value of NCD with a YTM of 16% per annum and are to be redeemed on January 6, 2015. These NCD carry a put/call option which can be exercisable on January 6, 2013, January 6, 2014 and January 6, 2015.

8. Figures for the previous year have been regrouped/recast, wherever necessary.

9. ' * ' represents amount less than Rs 1,00,000.


Mar 31, 2010

I. Contingent Liabilitiea Aa at As at 31.03.2010 31.03.2009 Rs. Crore Rs. Crore

(i) Counter Indemnities given to : Banks, in respect of contracts

(a) For works in India (Secured on all the assets) 1,619.53 1,741.86

(b) *For works abroad (secured by ECGC counter guarantees) 202.93 32.30

(Converted in rupees at the rate fixed by the Bank)

(ii) Claims not acknowledged as debts by the Company. 2.69 0.40

(iii) Sales Tax liability / Works Contract Tax liability that may arise in respect of matters in appeal 14.26 7.56

(Net of an amount of Rs.0.53 Crore (previous year Rs.12.06 crore)) recoverable from Clients as per the terms of contract )

(iv) Bills discounted with banks 165.98 241.39

(v) Corporate Guarantees:

The Company has provided an undertaking to pay in the event of default on loan given by a bank to subsidiary.Joint Ventures.

a) Pune Paud Toll Road Company Limited 14.36 18.48

b) Lavasa Corporation Limited 555.44 185.43

c) HCC Real Estate Limited 423.93 410.00

d) Nirmal BOT Limited 6.18 26.78

e) Charosa Wineries Limited 22.00 17.00

vi) A client has encashed Performance Bank Guarantee amounting to Rs. 27.40 Crore in the year 2007-08 which is disputed by the Company. The Company has been legally advised that it has a good case on merits and therefore has invoked arbitration provisions of the contract. During the year issues to be decided by the Arbitral Tribunal have been framed by the Tribunal. Pending resolution of the dispute the encashed Bank Gurantee is considered as a current asset.

III. Notes :

1. Advances from contractees of Rs.736.28 Crore (previous year Rs.502.90 Crore) have been guaranteed by Companys bankers to the extent of Rs.692.85 Crore (previous year Rs.473.42 Crore).

2 Commitment for capital expenditure is Rs.74.28 Crore (previous year Rs. 130.09 Crore).

3. (a) Sub-contract, transportation, hire etc. include insurance

Rs.31.05 Crore ( previous year Rs. 24.87 Crore), rates and taxes Rs. 130.06 Crore (previous year Rs. 127.20 Crore ) and lease rent Rs.7.02 Crore (previous year Rs.6.83 Crore ). (b) Light vehicle expenses grouped under construction expenses include insurarce Rs.2.15 Crore (previous year Rs.0.86 Crore) and taxes Rs.0.10 Crore (previous year Rs. 0.11 Crore). No allocation is made to it for petrol and maintenance at the sites.

4. Loans and Advances include an amount due from an Officer of the Company Rs.0.09 Crore (previous year Rs.0.12 Crore). Maximum amount outstanding during the year Rs.0.12 Crore (previous year Rs.0.14 Crore).

7. The Income-tax assessments of the Company have been completed upto the accounting year ended 31st March, 2006. Several appeals preferred by the Company are pending before appellate authorities.

Deferred Tax liability for the year ended 31st March, 2010 has been provided on the estimated tax computation for the year.

9. The Company has a single segment namely "Engineering & Construction". Therefore, the Companys business does not fall under different business segments as defined by AS 17- "Segmental Reporting" issued by ICAI.

11. (a) Contracts executed by the following Joint Ventures are accounted for as per accounting policy No. 12 (a). i) HCC-Van Oord Joint Venture ix) HCC-MEIL - CBE Joint Venture ii) Samsung-HCC Joint Venture xl HCC-MEIL - BHEL Joint Venture iii) L & T-HCC Joint Venture xi) HCC-MEIL - SEW- AAG Joint Venture

iv) HCC-KBL Joint Venture xii) HCC-MEIL - SEW Joint Venture

v) HCC-NCC Joint Venture xiii) HCC-Halcrow Joint Venture

vi) HCC-CEC Joint Venture xiv) HCC-Laing-Sadbhav

vii) HCC-NOVA Joint Venture xv) HCC-MEIL- NCC- WPIL Joint Venture viiil HCC-CPPL Joint Venture xvi) MEIL-IVRCL- HCC - WPIL Joint Venture

14. In accordance with Accounting Standard 11 (Revised) the net exchange loss debited to profit & loss account is Rs.1.35 Crore (previous year Rs.12.26 Crore).

The Companies (Accounting Standards) Amendment Rules 2009 has amended the provisions of AS-11 relating to "The Effects of the changes in Foreign Exchange Rates" vide notification dated 31st March, 2009. In terms of these amendments, the Company has carried over long term monetary exchange loss of Rs. 2.17 Crore through "Foreign Currency Monetory Items Translation Difference Account" (previous year Rs.19.33 Crore), to be amortised over the balance period of such long term asset/ liability but not beyond 31st March 2011. Further foreign exchange difference (net) of Rs.62.89 Crore (Previous year Rs.99.64 Crore) on capital account has been taken to the cost of respective fixed assets.

15. During the year, Company claimed Cenvat Credit of Rs.49.84 Crore on capital and non-capital goods from 2004-05 to 2006-07 in terms of Circular dated 01.10.2007. As a result the gross block of fixed assets is reduced by Rs.48.25 Crore, accumulated depreciation is reduced by Rs.9.99 Crore with corresponding effect on inventory except for an amount of Rs.2.63 Crore relating to closed projects credited to the Profit and Loss Account.

16. Value of assets taken on lease NIL (previous year NIL). Future obligation on account of lease rentals Rs.9.03 Crore (previous year Rs. 17.93 Crore).

17. Intangible assets (ERP) includes compatible software Rs.0.94 Crore (previous year Rs.3.15 Crore).

19. The Company issued at par 1,000 Zero Coupon Convertible Bonds due 2011 of US$1,00,000 each and 2,69,54,200 Global Depository Shares (GDSs) for an issue price of US $ 3.71 each aggregating to US $ 200 million. (INR 891.60 Crore as on the date of issue) in the year 2005-06 to finance capital expenditure, acquisitions, investment in Companys real estate subsidiary and any other use as may be permitted under applicable law or by relevant regulatory bodies from time to time . The Bondholders have an option of converting these Bonds into shares at an initial conversion price of Rs. 248.08 per share with a fixed rate of conversion of Rs.44.58 = US$1 at any time on or after 11th May, 2006 up to 18th February, 2011. The Bonds are also redeemable at the option of the Company at least at 130% of the early redemption amount at any time on or after 14th April, 2009 upto 18th February, 2011. Unless previously redeemed , converted or purchased and cancelled , the Bonds will be redeemed on 1st April, 2011 at 137.7139 % of their principal amount.

The Offering Circular provides for an adjustment to the conversion price of the FCCBs in the event the Company making a fresh issue of its equity shares for a consideration that is less than the Current Market Value of the equity shares as on the date on which the Company fixes the consideration.

Pursuant to the issuance of fresh equity shares to QIBs, the Company has revised the conversion price of the FCCBs from Rs. 248.08 to Rs. 246.02.

Premium payable on redemption of FCCBs till 31st March, 2010 has been adjusted net of tax in the Securities Premium Account.

20. In the year 2005-06 pending utilization of the issue proceeds of Zero Coupon Foreign currency convertible bonds (FCCB) and Global Depositary Shares (GDS) an amount of Rs.869.54 Crore had been kept in Foreign Currency Current and Deposit Accounts. During the current year out of issue proceeds, Rs.NIL (previous year Rs. 14.42 Crore) has been utilized for meeting working capital requirements in terms of the objects of the issue.

21. During the year ended 31st March, 2010, 34 FCCBs of the face value of USD 100,000 each were bought back by the Company aggregating to USD 0.34 crore.

Further, provision made for premium on redemption of FCCBs by debiting Securities Premium in the previous year has been reversed to the extent it pertains to the FCCBs buyback.

22. The Company vide its Qualified Institutional Placement Document dated 30th June, 2009 has placed 4,70,00,000 fully paid equity shares of Re 1/- each at an issue price of Rs 102.15 per equity share (including a premium of Rs 101.15 per equity share), aggregating to Rs 480.11 Crore to Qualified Institutional Buyers. These equity shares have been subsequently issued and alloted at its Board meeting held on 4th July, 2009.

24. The Company issued 75,00,000 Warrants of Re.1/- each at a premium of Rs. 202.50 per warrant on preferential basis to promoters on 20th December, 2007. The Warrant holders were entitled to apply for and be allotted, in one or more tranches, one equity share of Re. V- each of the Company per warrant, anytime after the date of allotment of Warrant but before the expiry of 18 months from the date of allotment of such Warrants. Upon exercise of the right to apply for equity shares, the Warrant holders were liable to make the payment of 90% of the issue price. The Board upon receipt of the entire amount was to allot one equity share per Warrant.

However, upon not exercising the option, an amount of Rs.15.19 Crore equivalent to 10% of the issue price of 75,00,000 warrants received during the previous year have been forfeited.

E. Accumulated compensated absences (non vesting)

Actuarial valuation of sick leave has been made on 31.03.2010. Provision in respect of this benefit amounts to Rs.1.54 crore for the financial year ending 31.03.2010 (previous year Rs.1.49 Crore).

27. Disclosure in accordance with Accounting Standard -18

Related Party Transactions

A. Names of Related Parties & Nature of Relationship

a) Subsidiaries & its Subsidiaries:

1) Hincon Technoconsult Ltd.

2) Western Securities Ltd.

3) Pune Paud Toll Road Company Ltd.

4) HCC Real Estate Ltd.

5) HCC Singapore Enterprises Pte Ltd.

6) HCC Mauritius Enterprises Ltd.

7) Nirmal BOT Ltd.

8) HCC Aviation Ltd.

9) Badarpur Faridabad Tollways Ltd.

10) HCC Infrastructure Ltd.

11) HCC Construction Ltd.

12) Panchkutir Developers Ltd.

13) Highbar Technologies Ltd.

14) Baharampore-Farakka Highways Ltd.

15) Farakka-Raiganj Highways Ltd.

16) Raiganj-Dalkhola Highways Ltd.

17) HREL Township Developers Ltd.

18) HREL (Thane) Real Estate Ltd.

19) Maan Township Developers Ltd. (Previously Hinjewadi Township Ltd.)

20) Nashik Township Developers Ltd. 21)Charosa Wineries Ltd.

22) Powai Real Estate Developers Ltd.

23) Lavasa Corporation Ltd.

24) HCC Realty Ltd.

25) Lavasa Hotels Ltd.

26) Warasgaon Lake View Hotels Ltd. (Previously Lavasa Star Hotel Ltd.)

27) Appolo Lavasa Health Corporation Ltd.

28) Ecomotel Hotels Ltd.

29) Dasve Business Hotels Ltd.

30) Dasve Convention Centre Ltd.

31) Lakeshore Watersport Company Ltd.

32) Lakeview Clubs Ltd.

33) Dasve Hospitality Institutes Ltd.

34) Dasve Retails Ltd.

35) Spotless Laundry Services Ltd.

36) SOL Hospitality Ltd. *

37) Lavasa Bamboocraft Ltd.

38) Green Hill Residences Ltd.

39) Knowledge Vista Ltd.

(Previously GDXT Oxford International School Ltd.)

40) Full Spectrum Adventure Ltd.

41) Space Theme Park India Ltd. **

42) My City Technology Ltd.

43) Reasonable Housing Ltd.

44) Minfur Interior Technologies Ltd.

45) Verzon Hospitality Ltd.

46) Rhapsody Hospitality Ltd.

47) Sirrah Palace Hotels Ltd.

48) Andromeda Hotels Limited (100%)

49) Valley View Entertainment Ltd.

50) Whistling Thrush Facilities Services Ltd.

51) Warasgaon Power Supply Ltd.

52) Sahyadri City Management Ltd.

53) Warasgaon Tourism Ltd.

* - Ceased to be subsidiary from May09 ** - Ceased to be subsidiary from April09

b) Integrated Joint Ventures:

i) Nathpa Jhakri Joint Venture

ii) HCC-Pati Joint Venture

iii) Kumagai-Skanska-HCC-ltochu Group

iv) HCC-L & T Purulia Joint Venture

v) Alpine - Samsung - HCC Joint Venture

vi) Alpine - HCC Joint Venture

vii) Dhule Palesner Tollway Ltd.

c) Other Related Parties:

1) Hincon Holdings Ltd.

2) Vikhroli Corporate Park

3) Bon Sera Hotels Ltd.

4) Palmetto Hospitality Ltd.

5) Gulabchand Foundation (formed under section 25 of Companies Act, 1956)

B. Key Management Personnel

i) Shri Ajit Gulabchand Chairman & Managing Director

ii) Shri K.G. Tendulkar Director (Deputy Managing Director upto 7th November, 2009)

iii) Shri Vinayak Deshpande President & COO (EPC & Construction)

iv) Shri Praveen Sood Group Chief Financial Officer

v) Shri V. P. Kulkarni Company Secretary

28. Employees Stock Option Scheme:

a) Options granted

i) The Company offered 44,58,800 Stock Options on April 25, 2008 (each option carrying entitlement for one equity share of the face value of Re.1/- each) at a price of Rs.132.50 per equity share.Out of the total Stock Options offered, 3,27,200 have been lapsed on account of resignation by employees.

In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOP Compensation Committee at its meeting held on July 20, 2009 has repriced the above 41,31,600 options at Rs. 104.05 per equity share

ii) The ESOP Compensation committee at its meeting held on 23rd October, 2008 granted 1,93,750 options at an exercise price of Rs. 43.40 per equity share.

31. (A) Lavasa Corporation Ltd., a subsidary has issued Deep Discount Convertible Debentures (DDCD) & Compulsory Convertible Preference Shares (CCPS) convertible into ordinary shares. The particulars, terms of issue and the status of conversion as at March 31, 2010 is given below.

i) Bank of India has subscribed Rs. 150 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCDs at the end of 39th, 48th and 60th month from the closing date.

ii) Allahabad Bank has subscribed Rs. 50 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

iii) Axis Bank has subscribed Rs 225 Crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 3.52% per annum on the face value of DDCD and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares of the Company at anytime within 5 years at an equity valuation of Rs. 10,000 crores from the closing date or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 36th, 48th and 60th month from the closing date.

iv) Axis Bank has subscribed Rs 25 Crores in the form of Compulsory Convertible Preference Shares ("CCPS").

This CCPS carry a coupon of 0.001% per annum on the subscripton amount of CCPS. The CCPS have a maximum tenor of 5 years. The Investor has an option to convert the CCPS into equity shares of the Company at any time within 5 years from the Closing Date. Axis Bank and HCC have the put /call option respectively to sell / purchase the CCPS at the end of 36th, 48th and 60th month from the closing date.

v) Andhra Bank has subscribed Rs 25 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

vi) Indusind Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company at anytime within 5 years from the closing date at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put/call option respectively to sell / purchase the DDCD at the end of 3rd, 4th and 5th year from the closing date.

vii) United Bank of India has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

viii)Allahabad Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date. date. The said DDCD is secured by way of 1 Acre of Land at Mulshi, Pune

ix) ICICI Bank has subscribed Rs 250 crores in the form of Deep Discount Convertible Debentures ("DDCD").

This DDCD carry a coupon of 6% per annum on the subscription amount and have a maximum tenor of 5 years. The investor has an option to convert DDCDs into equity shares at anytime within 5 years from the closing date at an equity valuation of Rs. 10,000 crores or at the time of Initial Public Offer (IPO) whichever is earlier. DDCDs are compulsorily convertible at the end of 5 years at an equity valuation of Rs 10,000 crores. The Investor and HCC have a put /call option respectively to sell / purchase the DDCD at the end of 39th, 48th and 60th month from the closing date.

x) Induslnd Bank has subscribed Rs 50 crores in the form of Deep Discount Convertible Debentures ("DDCD").

The DDCD carry a coupon of 6% per annum on the face value of Rs 74.94 crores of DDCD and have a maximum tenor of 5 years. The investor has an option to convert DDCD into equity shares of the Company within 5 years from the closing date i.e 9th July, 2009 subject to investors stake is not less than 0.5% of Companys equity capital. The conversion amount is to be calculated based on the YTM of 13% / 13.6% based on the equity valuation of Rs. 10,000 crores. The Bank and Promoters have a put/call option respectively to sell / purchase the DDCD at the end of 3rd, 4th and 5th year from the closing date.

(B) Bennett Coleman & Co. Limited., has invested an amount of Rs. 81.25 crores into the Company against issuance of one Warrant on preferential basis, giving a right to Bennett, Coleman & Co. Limited to subscribe to 0.8125%of the fully diluted equity share capital of the Company as on the date of exercise of the warrant. BCCL has paid Rs 8,12,50,000/- being 10% of the exercise amount against the allotment of warrant. BCCL can exercise the right of conversion at any time during the 5 years from the date of agreement or shall exercise in whole at the end of 5th year or at the time of IPO. In the event BCCL does not exercise its option to acquire all the shares within 5 years the Company shall forfeit the proportionate warrant subscription price to the extent not exercised and warrant shall lapse.

33. i) Pune Paud Toll Road Company Ltd. a subsidiary has an accumulated loss of Rs.21.65 crore as on 31st March, 2010. The toll road operated by the Company is expected to generate manifold increase in the traffic plying on the road during balance part of the concession period due to large scale hill station township development namely LAVASA taking place in the project vicinity and also the planned ring road development extending the municipal limits of Pune city beyond present toll plaza location.

ii) HCC Aviation Limited, a wholly owned subsidiary, has an accumulated loss of Rs.8.55 crore as at 31st March, 2010. The Company has long term business outlook and future growth plans hence, the going concern nature of the business is not adversely affected.

In the opinion of the management since the losses in both the Companies are temporary in nature, no diminution in value of investment is required.

34. Figures for the previous year have been regrouped/recast, wherever necessary.

35. Represents amount less than Rs. 100000.

 
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