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Notes to Accounts of Lanco Infratech Ltd.

Mar 31, 2016

* 1. During the Year, 2.17 ( March 31, 2015 :5.46) Crores Equity Shares of Rs, 1/- each were allotted to ICICI Bank Limited at a Price of Rs, 6.23/- per Equity Share (premium of Rs, 5.23/- per share), by conversion of Rs, 13.56 (March 31, 2015 : Rs, 34) Crores Funded Interest Term Loan into Equity Share Capital of the Company.

2. During the Year, 26.52 (March 31, 2015 :NIL) Crores Equity Shares of Rs, 1/- each were allotted to Lanco Group Limited at a Price of Rs, 6.30/- per Equity Share (premium of Rs, 5.30/- per share), by conversion of Rs, 167.06 (March 31, 2015 : NIL) Crores Inter Corporate Loan into Equity Share Capital of the Company

3. Terms / Rights attached to Equity Shares

The company has only one class of equity shares having a par value of Rs, 1/- Per share. Each Holder of equity shares is entitled to one vote per share.

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 in the proportion to the number of equity shares held by the shareholders.

The above information is as per register of share holders / members.

4. Details of Shares Reserved for issue under Options

For details of shares reserved for issue under Employee Stock Options (ESOP) plan of the Company, refer note 36.

During the year ended March 31, 2014 the Company''s proposal to restructure the debt has been approved by the Corporate Debt Restructuring Empowered Group (CDR EG) vide letter of approval dated December 20, 2013. The company executed Master Restructuring Agreement (MRA) on December 27, 2013. As a result of this the lenders of CDR have a right to convert restructured debt into equity shares at the sole discretion and on demand as per the agreed terms in the MRA.

In relation to the loans restructured by the CDR lenders a total amount to Rs, 3,431.45 (March 31, 2015 : Rs, 2,894.41) Crores would qualify for the conversion of 563.60 (March 31, 2015 : 473.29) Crores shares at the sole discretion and on demand of the CDR lenders.

In relation to the promoters contribution a total amount to Rs, NIL( March 31, 2015 : Rs, 167.06) Crores would qualify for the conversion of NIL(March 31, 2015 :26.82) Crores shares at the sole discretion of the promoters.

During the year, Debentures of Rs, 321.45 ( March 31, 2015 : NIL) Crores have been alloted to Non-CDR lender after conversion of term Loan and interest payable on term loan up to March 10, 2016 and would qualify for the conversion into equity shares at the end of 12 months ( i.e. March 14, 2017) from the date of allotment along with outstanding interest at the SEBI determined price or price applicable to CDR lenders whichever is higher.

The Board of Directors of LITL in its meeting held on July 27, 2013 had accorded its approval for restructure of the debts of the Company under Corporate Debt Restructuring (CDR) Mechanism of the Reserve Bank of India. CDR Empowered Group ( CDR EG) in its meeting held on December 11, 2013 has approved the CDR scheme submitted by the Company and issued letter of approval on December 20, 2013.

The details of securities and terms of repayment are as follows: a) Debentures

32.15 Crores 10.5% cumulative compulsory convertible debentures of Rs, 10 each, Rs, 321.45 ( March 31, 2015 : Rs, Nil) Crores have been alloted to Non-CDR lender after conversion of term Loan and interest payable on term loan up to March 10, 2016. These debentures are unsecured. However, collateral securities have been provided by way of pledge of shares of a subsidiary held by another subsidiary and also by pledge of shares of the Company held by one of the Promoters. Debentures are convertible into equity shares at the end of 12 months ( i.e. March 14, 2017) from the date of allotment along with outstanding interest at the SEBI determined price or price applicable to CDR lenders whichever is higher.

b) Rupee Term Loans from Banks*

1. Term Loan of Rs, 657.68 (March 31, 2015 : Rs, 666.45) Crores out of which Rs, 104.34 (March 31, 2015 : Rs, 13.33) Crores is current, WCTL- I of Rs, 985.62 ( March 31, 2015 : Rs, 998.01) Crores out of which Rs, 157.28 (March 31, 2015 :Rs, 19.96) Crores is current, WCTL- II of Rs, 552.28 ( March 31, 2015 : Rs, 556.56) Crores out of which Rs, 90.33 (March 31, 2015: Rs, 11.13) Crores is current, FITL of Rs, 517.15 ( March 31, 2015 : Rs, 532.16) Crores out of which Rs, 81.92 (March 31, 2015 : Rs, 10.64) Crores is current as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters , subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015. Further Land admeasuring 924 acres (approx.) held by one of the step down subsidiary is offered as collateral security for Rs, 394.00 Crores of the Term Loan and shares of subsidiary held by another subsidiary are offered as collateral security for Rs, 213.43 Crores of the Term Loan.

2. Priority Loan of Rs, 2284.14 (March 31, 2015 : Rs, 1,678.17) Crores out of which Rs, 625.16 (March 31, 2015: Rs, 33.94) Crores is current classified as long term borrowings as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having priority charge on the Trust and Retention Account (TRA) of the company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 18 quarterly installments starting from June 30, 2015.

3. Long Term Working Capital Loan of Rs, 432.16 (March 31, 2015 : NIL) Crores, All Non - Current classified as long term borrowings as per proposal appraised by the lead bank, IDBI and respective sanctions of the banks. These loans are having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2015 and are repayable in 24 quarterly installments starting from June 30, 2017 to March 31,2023.

4. Rs, 35.41 (March 31, 2015 : Rs, 40.76) Crores, Term Loan availed from Non-CDR lender, out of which Rs, 5.35 (March 31, 2015: Rs, 5.36) Crores is Current is secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the solar project of company on first charge basis and is being repaid in 48 quarterly installments ending on September 30, 2023.

5. Rs, 400.35 (March 31, 2015 : Rs, Nil) Crores, Term Loan availed from Non-CDR lender, out of which Rs, 30.81 (March 31, 2015 : Rs, Nil) Crores is Current are secured by way of first Charge on the cash flows, project documents pertaining to the solar projects and all accounts including TRA, DSRA for the solar projects, mortgage on the immovable assets pertaining to the solar power projects and hypothecation of movable assets both present & future of those projects on first charge basis and is being repaid in 82 structured quarterly installments starting from October 1, 2015 and ending on March 31, 2036. Further Land admeasuring 572.29 acres held by one of the associate company and personal guarantee of promoter of the company are offered as collateral security for this Term Loan.

6. Rs, Nil (March 31, 2015 : Rs, 255.39) Crores, Term Loan availed from Non-CDR lender, out of which Rs, Nil (March 31, 2015 : Rs, 22.17) Crores is Current are secured by way of mortgage on the immovable assets pertaining to the solar power projects and hypothecation of movable assets both present & future of those projects on first charge basis.

c) Rupee Term Loans from Financial Institutions4

1. Rs, 63.32 (March 31, 2015 : Rs, 64.29) Crores, out of which Rs, 9.96 (March 31, 2015 : Rs, 1.29) Crores is current, This Loan is having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. This loan is having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and is repayable in 30 structured quarterly installments starting from June 30, 2015.

2. Rs, NIL ( March 31, 2015 : Rs, 283.45) Crores, term Loan availed from Non-CDR lender, out of which Rs, NIL (March 31, 2015: Rs, 84.16) Crores is Current were unsecured. However, collateral securities have been provided by way of pledge of shares of a subsidiary held by another subsidiary and also by pledge of shares of the Company held by one of the Promoters.

d) Foreign Currency Term Loans*

1. Foreign Currency Non - Resident (FCNR) Loan from banks of Rs, 432.61 (March 31, 2015: Rs, 416.52) Crores out of which Rs, 66.22 (March 31, 2015 :Rs, 8.33) Crores is current is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015.

e) Other loans and advances are Inter Corporate Loans, Interest free unsecured loan of Rs, NIL (March 31, 2015 : Rs, 152.00) Crores

received from Promoter Company as Promoter''s contribution as per terms and conditions of CDR package with conversion option into equity and repayable at the end of 10 years after approval of the CDR lenders.

a) Cash Credits and Working Capital Demand Loans from Banks*:Rs, 1,116.34 (March 31, 2015: Rs, 1,071.97) Crores is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge as per the CDR scheme approved by CDR EG. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.

b)* Rs, 127.31 (March 31, 2015: 1.04) Crores, Foreign Currency Term Loans (Buyers Credit) from banks is secured by hypothecation of movable assets both present and future of the project were having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge along with pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoters, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, company and its step down subsidiaries and associates.

c) Unsecured Loans and Advances includes:-

i. Rs, 15.00 (March 31, 2015 : Rs, 67.11) Crores, Inter Corporate Loans from one subsidiary bearing interest rate of 13% p.a. to be repayable on or before March 31, 2017. (March 31, 2015 : Rs, 67.11 Crores, Inter Corporate Loans from two subsidiaries bearing interest rate of 13% p.a. and 12% p.a. to be repayable on or before March 31, 2016).

ii. Interest free unsecured loan of Rs, NIL (March 31, 2015 : Rs, 15.06) Crores from holding company is repayable on or before March 31, 2016 and having an option to lenders to convert in to equity at price to be arrived as per SEBI guidelines.

* Rate of interest on the above borrowings is as per the agreement with the respective banks i.e. bank rate ( /-) spread as applicable

#Includes amount of Rs, NIL (March 31, 2015 : Rs, 438.00) Crores payable to one of its subsidiaries pursuant to novation of EPC agreement.

Defined Contribution Plans

In respect of the defined contribution plan (Provident Fund), an amount of Rs, 6.85 (March 31, 2015: Rs, 5.65) Crores has been recognized as expenditure in the Statement of Profit and Loss.

In respect of the State Plans (Employee State Insurance), an amount of Rs, NIL (March 31, 2015: Rs, 0.00078) Crores has been recognized as expenditure in the Statement of Profit and Loss.

Other Employee Benefits

During the year the Company has provided / (reversed) retention bonus of Rs, (1.73) (March 31, 2015: Rs, 0.30) Crores.

The provision for compensated absences as per actuarial valuation as at March 31, 2016 is Rs, 31.03 (March 31, 2015 is Rs, 28.41) Crores.

7 Employee Stock Option Scheme

The Company has till March 31, 2016 allotted 1.11 (March 31, 2015: 1.11) Crores equity shares of Rs, 10 each to LCL Foundation (ESOP -Trust) towards the Employee Stock Option Plan 2006 (The plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of ten years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the Company at an exercise price, which is approved by the compensation committee.

The plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs, 10 each into 10 equity shares of '' 1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at '' 1 each.

The Company has calculated the compensation cost based on the intrinsic value method i.e. the excess of previous closing price of underlying equity shares on the date of the grant of options over the exercise price of the options given to employees under the employee stock option schemes of the Company and is recognized as deferred stock compensation cost and is amortised on a straight line basis over the vesting period of the options. Company is using Black Sholes Model for calculating fair values of ESOP granted for determining impact of the fair value method of accounting of employee compensation in financial statement, the impact on net income and earnings per share is provided below:

8 Segment Reporting

Segment information under Accounting Standard- 17 " Segment Reporting" has not been presented in these financial statements as the same has been presented in the Consolidated Financial Statements of the Company.

9 Related Party Transactions

a) Names of Related Parties and description of relationship.

i. Names of related parties by or over which control exists S.No Holding Company

1 Lanco Group Limited (LGL)

S. No. Subsidiary Companies

1 Amrutha Power Private Limited (APPL) 24 Lanco Holding Netherlands B.V

2 Arneb Power Private Limited (ArPPL) 25 Lanco Hoskote Highway Limited (LHHL)

3 Bhanu Solar Projects Private Limited (BSPPL) 26 Lanco Hydro Power Limited (LHPL)

4 Bhola Electricity (Pvt) Limited (BEPL) 27 Lanco Infratech (Mauritius) Limited (LIML)

5 Carpenter Mine Management PTY Ltd 28 Lanco Infratech Nepal Private Limited

6 Coral Orchids Private Limited (COPL) 29 Lanco International Pte Limited (LInPL)

7 Cordelia Properties Private Limited 30 Lanco IT P. V. Investments B. V.

8 Cressida Properties Private Limited 31 Lanco Kanpur Highways Limited (LKHL)

9 Deimos Properties Private Limited (DPPL) 32 Lanco Kanpur Power Limited (LKaPL)

10 Dione Properties Private Limited 33 Lanco Kondapalli Power Limited (LKPL)

11 Diwakar Solar Projects Limited (DSPL) 34 Lanco Mandakini Hydro Energy Private Limited

(LMHEPL)

12 Emerald Orchids Private Limited 35 Lanco Power International Pte. Limited (LPIPL)

13 Green Solar SRL 36 Lanco Power Limited (LPL)

14 Helene Power Private Limited 37 Lanco Rambara Hydro Power Private Limited

15 JH Patel Power Project Private Limited (JhPL) 38 Lanco Resources Australia Pty. Limited (LRAPL)

16 Jupiter Infratech Private Limited (JIPL) 39 Lanco Resources International Pte. Limited (LRIPL)

17 Khaya Solar Projects Private Limited (KSPPL) 40 Lanco Solar Energy Private Limited (LSEPL)

18 Lanco Amarkantak Power Limited (LAPL) 41 Lanco Property Management Company Pvt. Ltd.

(LPMCPL) (from 30.05.2015)

19 Lanco Anpara Power Limited (LAnPL) 42 Lanco Solar Holding Netherlands B.V.

20 Lanco Babandh Power Limited (LBPL) (from 43 Lanco Solar International Limited (LSIL)

03.06.2015)

21 Lanco Devihalli Highways Limited (LDHL) 44 Lanco Solar International Pte Limited (LSIPL)

22 Lanco Enterprise Pte. Ltd, China (LEPL) 45 Lanco Solar International USA Inc.

23 Lanco Hills Technology Park Private Limited (LHTPPL) 46 Lanco Solar Power Projects Private Limited (LSPPPL)

S. No. Subsidiary Companies

47 Lanco Solar Private Limited (LSPL) 65 Orion Solar Projects Private Limited

48 Lanco Solar Services Private Limited (LSSPL) 66 P. T Lanco Indonesia Energy (LInE)

49 Lanco SP P.V. Investments B.V. (till 25.11.2014) 67 Pasiphae Power Private Limited

50 Lanco Tanjore Power Company Limited (LTPCL) 68 Pearl Farms Private Limited (PFPL)

51 Lanco Teesta Hydro Power Limited (LTHPL) (till 69 Portia Properties Private Limited (PPPL)

19.10.2015)

52 Lanco Thermal Power Limited (LTPL) 70 Sabitha Solar Projects Private Limited

53 Lanco US P. V. Investments B. V. (till 09.01.2015) 71 Sirajganj Electric (Pvt.) Limited (SEPL)

54 Lanco Vidarbha Thermal Power Limited (LVTPL) (from 72 Spire Rotor Private Limited (SRPL)

06.06.2015)

55 Lanco Wind Power Private Limited (LWPPL) 73 Tasra Mining & Energy Company Private Limited

(TMECPL)

56 LE New York - LLC 74 Telesto Properties Private Limited (TePPL)

57 Leda Properties Private Limited (LPPL) 75 The Griffin Coal Mining Company Pty Ltd (GCMCPL)

58 Mahatamil Mining and Thermal Energy Limited 76 Thebe Properties Private Limited (ThPPL)

(MMTEL)

59 Mercury Projects Private Limited (MPPL) 77 Udupi Power Corporation Limited (UPCL) (till 20th

April 2015)

60 National Energy Trading and Services Limited (NETS) 78 Uranus Infratech Private Limited (UIPL)

61 Neptune Projects Private Limited (NPPL) 79 Uranus Projects Private Limited (UPPL)

62 Newton Solar Private Limited (NSPL) (from 28.03.2016) 80 Western Australia Coal Terminal Pty. Ltd

63 Nix Properties Private Limited 81 Lanco Energy Private Limited(LEPL) (from 24.10.2015)

64 Omega Solar Projects Private Limited (till 14.03.2016)__

ii. Name of other related parties with whom transactions were carried out

S.No. Fellow Subsidiary

1 Lanco Babandh Power Limited (LBPL) ( till 02.06.2015)

S.No. Enterprises where Singnificant Influence Exists

1 Ananke Properties Private Limited (AnPPL) 14 Lanco Vidarbha Thermal Power Limited (LVTPL) (till

05.06.2015)

2 Avior Power Private Limited (AvPPL) 15 Mimas Trading Private Limited (MTPL)

3 Basava Power Private Limited (BPPL) 16 Mirach Power Limited (MiPL)

4 Bay of Bengal Gateway Terminal Private Limited 17 Newton Solar Private Limited (NSPL) (till 27.03.2016) (BBGTPL)

5 Belinda Properties Private Limited (BePPL) 18 Phoebe Trading Private Limited (PTPL)

6 Bianca Properties Private Limited (BiPPL) 19 Pragdisa Power Private Limited (PrPPL)

7 Charon Trading Private Limited (CTPL) 20 Regulus Power Private Limited (RPPL)

8 DDE Renewable Energy Private Limited (DREPL) 21 Saidham Overseas Private Limited (SOPL)

9 Electromech Maritech Private Limited (EMPL) 22 Siddheswara Power Private Limited

10 Finehope Allied Engg. Private Limited (FAEPL) 23 Tethys Properties Private Limited (TPPL)

11 Genting Lanco Power (India) Limited 24 Vainateya Power Private Limited (VPPL)

12 Himavat Power Limited (HPL) 25 Vasavi Solar Power Private Limited (VSPPL)

13 KVK Energy Ventures Private Limited (KEVPL) 26 Lanco Teesta Hydro Power Limited (LTHPL) (from

20.10.2015)

S.No Key Management Personnel

1 Sri L. Madhusudhan Rao (Chairman) (LMR) 3 Mr. S. C. Manocha (Whole Time Director) (SCM) (till

15.03.2016)

2 Sri G. Bhaskara Rao (Vice Chairman) (GBR) 4 Sri G. Venkatesh Babu (Managing Director) (GVB)

S.No Relatives of Key Management Personnel

1 Sri L. Sridhar (Brother of LMR) (LS) 4 Smt. L. Sirisha (Spouse of LS) (LSi)

2 Smt L. Rajya Lakshmi (Spouse of LMR) (LRL) 5 Sri G. Avinash (Son of GBR) (GA)

3 Smt. G. Padmavathi (Spouse of GBR) (GP)

S.No Enterprises owned or significantly influenced by Key Management Personnel or their relatives

1 Chatari Hydro Power Private Limited (CaPTL) 7 Lanco Foundation (LF)

2 Cygnus Solar Projects Private Limited (Csppl) 8 Lanco Horizon Properties Private Limited (LHrPPL)

3 Himachal Hydro Power Private Limited (HHPPL) 9 Lanco Rani Joint Venture (LR)

4 Lanco Bay Technology Park Private Limited (LBTPL) 10 LCL Foundation (LCL)

5 Lanco Kerala Seaports Private Limited (LKSPL) 11 Ravi Hydro Electric Private Limited (RHEPL)

6 Lanco Transport Network Company Private Limited 12 Nekkar Power Private Limited (NePPL)

(LTNCPL)_|__|_

10 Deferral/capitalization of Exchange Difference

The company has selected the option given in paragraph 46A of the Accounting Standard - 11,"The Effects of Changes in Foreign Exchange Rates" with effect from April 1, 2011. The foreign exchange (gain) / loss arising on revaluation of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets to be depreciated over the balance life of such assets and in other cases the foreign exchange (gain) / loss to be amortized over the balance period of such long term foreign currency monetary items. On a ailment of option under this notification, foreign exchange difference remains unamortized is Rs, 79.39 Crores (March 31 2015: Rs, 75.67) Crores.

11 ''As at March 31, 2016 the Company has not paid principal amount of Rs, 42.33 (March 31, 2015 : Rs, 0.49) Crores and interest amount of Rs, 251.21 (March 31, 2015 : Rs, 52.22) Crores and LC Devolved Amount Rs, 23.17 ((March 31, 2015 : NIL) Crores.

12 (a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited(LTPL) and Lanco Hydro Power Limited (LHPL) as thermal power holding company and hydro power holding company respectively.

(b) As approved by the members vide their resolution dated March 19, 2010 the Company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as Rs ,related entities'') to its wholly owned step down subsidiaries i.e. Lanco Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regulus Power Private Limited (an erstwhile subsidiary) on March 30, 2012 for total cash consideration amounting to Rs, 6,815.51 Crores. As of March 31, 2016 Rs, 1,161.52 (March 31, 2015 Rs, 1,385.07) Crores representing the balance amount of consideration for sale of shares is receivable from the above entities and it includes further sale of shares of some of its subsidiaries to LTPL and LHPL .

(c) As a result of the above change, one of the associate company on March 30, 2012 namely Lanco Babandh Power Limited, consequent to the sale of its equity shares to an associate i.e. Regulus Power Private Limited, has become an associate of an associate. During the year on further infusion of equity by step down subsidiary in LBPL, LBPL became step down subsidiary to the company.

(d) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt of approvals, the Company has recorded the sale of investments in related entities in the financial statements. Up to the year ended March 31, 2016, the management has obtained approvals from the most of the lenders and the management is confident of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by the lenders to the respective related entities may become due if the Company still wants to pursue transfer of shares, or the sold investments will be purchased back by the company. Based on legal advice, the management is of the opinion that the company complied with relevant laws and regulations.

13 As on March 31, 2016, the Company has loans aggregating Rs, 1,172.26 Crores which includes unpaid principal amount of Rs, 42.33 (March 31, 2015 Rs, 215.41) Crores falling due over next twelve months period and also unpaid interest & devolved letter of credits dues of Rs, 274.38 (March 31, 2015 Rs, 52.22) Crores of the company as at March 31, 2016. Apart from this, the Company has commitments to support the subsidiaries and associates for their various ongoing projects. These matters require the Company to garner such additional cash flows to fund the operations as well as investment obligations to ongoing projects. The management is actively considering the aspects like dilution of stake in subsidiary companies, disposal of non-core assets, additional funding from the lenders and exercising the conversion options available in the loan documents, would reduce the obligations and/or bring in the additional cash flows into the system to meet its obligations.

14 Mahatamil Mining and Thermal Energy Limited (MMTEL), a subsidiary of the company had entered into Coal Mining Services (CMS) agreement with Mahatamil Collieries Limited (MCL) for developing and mining of Gare pelma II Coal block located in the state of Chhattisgarh, the said coal block was cancelled by the Hon''ble Supreme Court''s order dated September 24, 2014. As per CMSA, MMTEL has incurred an amount of '' 204.66 Crores till March 31, 2015 towards exploration, infrastructure and earnest money deposit. The amount incurred has been claimed by MMTEL as per terms of CMSA and the provisions of the Coal Mines (Special Provisions) Ordinance, 2014 and the management is confident on recoverability of the claim.

15 Lanco Resources International Pte Limited (LRIPL) along with its subsidiary companies (Griffin Coal Mine Operations, Australia), a subsidiary of the company has en incurring losses from acquisition onwards. The management is taking necessary steps to optimize its mining cost and to improve the coal mining capacity by expanding the associated infrastructure including development of port to scale up the export sales. Upon implementation of long term initiatives, the management is confident of improving the profitability of the business in long period and carrying value of the assets are realizable at the value stated in the books.

16 Lanco Kanpur Highways Limited (LKHL), a subsidiary of the company had entered into concession agreement with NHAI for developing a road project in Uttar Pradesh state under BOOT mechanism. The construction work is delayed due to pending approvals and right of way to be arranged by NHAI. During the previous year LKHL had received notice of termination of concession agreement from NHAI and issued a notice of termination of concession agreement to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. Based on the expert legal opinion, the management is confident on the recoverability of its claims submitted and is not expecting any liability on counter claims filed by NHAI.

17 Previous year figures have been regrouped / reclassified where ever necessary, to conform to those of the current year.

18 On exercising of the option available under Schedule III to prepare the financials in Crores rounded off to two decimals, the amounts / numbers below fifty thousands in the financials are appearing


Mar 31, 2015

1. Corporate Information

Lanco Infratech Limited is an integrated infrastructure developing company. The company provides engineering, procurement, construction, commissioning and project management services on a turnkey basis to the power Sector for thermal (coal fired and gas fired) and hydro power plants as well and also construction of highways, power plants, water supply and irrigation projects including dam, tunnels etc. The Company is also into generation of energy from wind and solar power plants.

2. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013('Act'), read with Rule 7 of the Companies(Accounts) Rules,2014 and the relevant provisions of the Act(to the extent notified). The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the company and are consistent with those used in the previous year.

3 Exceptional Items

Exceptional item of Rs. 99.75 Crores for the year ended March 31, 2015 includes profit on sale of external long term investments Rs. 73.30 Crores and reversal of excess provisions made in previous years for Rs. 26.45 Crores.

Exceptional item of Rs. (0.90) Crores for the year ended March 31, 2014 includes reversal of promoter directors salary and the sacrifice towards reduction in interest for the six months period ended September 30, 2013 as adjusted for the interest payments made during the period to the lenders and expenditure incurred relating to CDR scheme approved by CDR EG on December 20, 2013 by considering cut of date of April 1, 2013.

4 Cost Estimates

Due to delays in execution of contracts the cost associated with price escalations, claims of the service providers, subcontractors and upward revision of estimated cost, comprising of provision for expected loses on some ongoing projects and additional costs in recently completed / discontinued projects has resulted in losses for the year. The Company continues to pursue certain entitlements from the clients for suitable compensation.

5 Employee Benefits Defend Benefit Plans

The company has a defend benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary for each completed year of service subject to a maximum of Rs. 0.15 Crores. The plan for the same is unfunded.

Other Employee Benefits

During the year the Company has provided / (reversed) retention bonus of Rs. 0.30 (March 31, 2014: Rs. (10.73)) Crores. The provision for compensated absences as per actuarial valuation as at March 31, 2015 is Rs. 28.41 (March 31, 2014 is Rs. 23.70) Crores.

6 Employee Stock Option Scheme

The Company has till March 31, 2015 allotted 1.11 (March 31, 2014: 1.11) Crores equity shares of Rs.10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock Option Plan 2006 (The plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of ten years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the Company at an exercise price, which is approved by the compensation committee.

The plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs.10 each into 10 equity shares of Rs.1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at Rs.1 each.

7 Leases

Operating Lease : Company as lessee

The Company has entered into certain cancellable and non-cancellable operating lease agreements mainly for office premises. The lease rentals charged during the year and maximum obligations on long term non-cancellable operating lease payable as per the agreements are as follows :

8 Segment Reporting

Segment information under Accounting Standard- 17 " Segment Reporting" has not been presented in these financial statements as the same has been presented in the Consolidated Financial Statements of the Company.

9 Contingent Liabilities - Not probable and therefore not provided for

(Rs. Crores)

Particulars March 31, 2015 March 31, 2014

A. Claims disputed by the company

Income Tax Demands disputed by the Company relating to disallowances made in various 264.41 10.15 assessment proceedings, under appeal

Claims against the Company not acknowledged as debt 325.04 15.61

Sales Tax / Entry Tax Demands disputed by the Company, under appeal 200.46 8.37

Service Tax demands disputed by the Company relating to applicability of service tax to 140.21 116.18 various services, under appeal

B. Outstanding Corporate Guarantees

Given to Financial Institutions, Banks on behalf of other group companies 16,823.79 16,412.09

10 Deferral/capitalisation of Exchange Difference

The company has selected the option given in paragraph 46A of the Accounting Standard – 11,"The Effects of Changes in Foreign Exchange Rates" with effect from April 1, 2011. The foreign exchange (gain) / loss arising on revaluation of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets to be depreciated over the balance life of such assets and in other cases the foreign exchange (gain) / loss to be amortised over the balance period of such long term foreign currency monetary items. On a ailment of option under this notification, foreign exchange difference remains unamortized is Rs. 75.67 (March 31 2014: Rs.75.17) Crores.

11 During the year, the company along with its step down subsidiaries had entered into a definitive Share Purchase Agreement (SPA) on August 13, 2014 with the Adani Power Limited (APL) for sale of 100% stake in Udupi Power Corporation Limited (UPCL) – 1200 MW (a step down subsidiary of the company) imported coal based thermal power plant situated in Karnataka, India (effective date August 18, 2014) and the said SPA terms were amended and restated on February 6, 2015. As the receipt of full share sale consideration and transfer of shares to APL was effected post March 31, 2015 i.e. on April 20, 2015, the effects of this transaction is not considered for the year ended March 31, 2015.

12 As at March 31, 2015 the Company has not paid principal amount of Rs. 0.49 (March 31, 2014 : Rs. 96.89) Crores and interest amount of Rs. 52.22 (March 31, 2014 : Rs. 50.99) Crores.

13 (a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited(LTPL) and Lanco Hydro Power Limited (LHPL) as thermal power holding company and hydro power holding company respectively.

(b) As approved by the members vide their resolution dated March 19, 2010 the Company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as 'related entities') to its wholly owned step down subsidiaries i.e. Lanco Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regales Power Private Limited (an erstwhile subsidiary) on March 30, 2012 for total cash consideration amounting to Rs. 6,815.51 Crores. As of March 31, 2015 Rs. 1,385.07 (March 31, 2014 Rs. 2,644.22) Crores representing the balance amount of consideration for sale of shares is receivable from the above entities.

(c) As a result of the above change, one of the associate company namely Lanco Babandh Power Limited, consequent to the sale of its equity shares to an associate i.e. Regales Power Private Limited, has become an associate of an associate.

(d) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt of approvals, the Company has recorded the sale of investments in related entities in the financial statements. Up to the year ended March 31, 2015, the management has obtained approvals from the most of the lenders and the management is confident of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by the lenders to the respective related entities may become due if the Company still wants to pursue transfer of shares, or the sold investments will be purchased back by the company. Based on legal advice, the management is of the opinion that they have complied with relevant laws and regulations.

14 The Company has entered into transactions with related parties, including some of its associates namely Lanco Vidarbha Thermal Power Limited (LVTPL), Himavat Power Limited (HPL), Vainateya Power Private Limited (VPPL) and Lanco Babandh Power Limited (LBPL) (fellow Subsidiary) whose details are shown in summary of the transactions with related parties, under note 38. The Company along with Lanco Group Limited (Holding Company) and through various intermediate companies holds the remainder of shares in these associates and LBPL. In case of LVTPL, LBPL and HPL, the Group holds cumulative compulsorily convertible preference shares which when exercised for conversion as per the terms of these shares would result in these companies becoming subsidiaries of the Company or its step down subsidiaries.

15 As on March 31, 2015, the Company has loans aggregating Rs. 215.41 (March 31, 2014 Rs. 40.81) Crores falling due over next twelve months period and also unpaid dues of Rs. 52.71 (March 31, 2014 Rs. 147.88) Crores of the company as at March 31, 2015. Apart from this, the Company has commitments to support its various ongoing projects. These matters require the Company to garner such additional cash flows to fund the operations as well as investment obligations to ongoing projects. The management is actively considering the aspects like dilution of stake in subsidiary companies, disposal of non-core assets for which necessary steps have already been taken along with CDR scheme approved by CDR EG would bring in additional cash flows into the system to meet its obligations.

16 Lanco Anpara Power Limited - 1200 MW (LAnPL) one of the step down subsidiary of the company, had been operating at sub optimal levels during the stabilization phase and on account of coal & infrastructure constraints. The LAnPL has taken necessary steps and confident of improving the operating levels of the plant in future and would meet the financial obligations as and when they arise. Due to non fulfilment of certain obligations by buyers i.e. Uttar Pradesh State Power Distribution Companies under the PPA with the LAnPL for sale of 1,100 MW power, LAnPL has terminated the PPA and exercised the option available under PPA. The LAnPL fled petition before UPERC for resolution of options. UPERC had appointed independent committee to give the recommendation on the amount of compensatory tariff to enable the plant operation to be viable. The committee has already submitted its report to UPERC in March,2015. The Management is taking constructive and necessary steps to improve the operating levels of the plant in future and of the view that the carrying value of the investments of LAnPL are realizable at the value stated therein.

17 Mahatamil Mining and Thermal Energy Limited (MMTEL), a subsidiary of the company had entered into Coal Mining Services (CMS) agreement with Mahatamil Collieries Limited (MCL) for developing and mining of Gare pelma II Coal block located in the state of Chhattisgarh, the said coal block was cancelled by the Hon'ble Supreme Court. As per CMS agreement MMTEL has incurred an amount of Rs. 204.66 Crores till March 31, 2015 towards exploration, infrastructure and earnest money deposit. The amount incurred has been claimed by MMTEL as per terms of the Coal Mines (Special Provisions) Ordinance, 2014 and the management is confdent on recoverability of the claim.

18 Lanco Resources International Pte Limited (LRIPL) along with its subsidiary companies (Grifn Coal Mine Operations, Australia), a subsidiary of the company have been incurring losses from acquisition onwards. The management is taking necessary steps to optimise its mining cost and to improve the coal mining capacity. Upon implementation of short term initiatives, the management is confident of improving the profitability of the business in short period and carrying value of the assets are realizable at the value stated in the books.

19 Lanco Kanpur Highways Limited (LKHL), a subsidiary of the company had entered into concession agreement with NHAI for developing a road project in Uttar Pradesh state under BOOT mechanism. The construction work is delayed due to pending approvals and right of way to be arranged by NHAI. During the year LKHL has received notice of termination of concession agreement from NHAI and issued a notice of termination of concession agreement to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. Based on the expert legal opinion, the management is confident on the recoverability of its claims submitted and is not expecting any liability on counter claims filed by NHAI.

20 Managerial remuneration paid during the year aggregating to Rs.1.69 Crores is in excess of the permissible limits of remuneration payable under the provisions of the Companies Act, 2013 read with rules notified thereon. The company approached the Central Government seeking its approval for payment of such remuneration in excess of limits and the Central Government in this regard directed the company to obtain a no objection from the CDR lenders for granting required approval. The Company is in the process of seeking the required no objection from lenders.

21 The company has revised depreciation as per the provisions of Schedule – II of the Companies Act 2013 which is effective from April, 2014. Consequently, the depreciation for the current year is higher by Rs.25.07 Crores. As per the transitional provision, depreciation of Rs. 8.25 Crores (Net of deferred tax Rs. Nil) has been adjusted against the retained earnings.

22 Previous year figures have been regrouped / reclassified where ever necessary, to conform to those of the current year.

23 On exercising of the option available under Schedule III to prepare the financials in Crores rounded off to two decimals, the amounts / numbers below fifty thousands in the financials are appearing as zero.


Mar 31, 2014

1. Corporate Information

Lanco Infratech Limited is an integrated infrastructure developing company. The company provides engineering, procurement, construction, commissioning and project management services on a turnkey basis to the power Sector for thermal (coal fred and gas fred) and hydro power plants as well and also construction of highways, power plants, water supply and irrigation projects including dam, tunnels etc. The Company is also into generation of energy from wind and solar power plants.

2. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards notifed by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the company are consistent with those used in the previous year.

3 Exceptional Items

(Note No 30 of Financial Statements)

During the year an exceptional items of Rs. (0.90) Crores includes reversal of promoter directors salary and the sacrifce towards reduction in interest for the six months period ended September 30, 2013 as adjusted for the interest payments made during the period to the lenders and expenditure incurred relating to CDR scheme approved by CDR EG on December 20, 2013 by considering cutof date of April 1, 2013. The future sacrifce envisaged under the scheme is not determinable as the Company''s obligation to compensate such sacrifce to the lenders is contingent upon fulfilling of various future conditions whose outcome is currently uncertain.

4 Cost Estimates

(Note No 33 of Financial Statements)

Due to delays in execution of contracts the cost associated with price escalations, claims of the service providers, subcontractors and upward revision of estimated cost, comprising of provision for expected losses on some ongoing projects and additional costs in recently completed / discontinued projects has resulted in losses for the year. The Company continues to pursue certain entitlements from the clients for suitable compensation.

5 Employee benefits

(Note No 34 of Financial Statements)

Defined benefit Plans

The Company has a Defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary for each completed year of service subject to a maximum of Rs. 0.15 Crores. The plan for the same is unfunded.

Defined Contribution Plans

In respect of the Defined contribution plan (Provident Fund), an amount of Rs. 6.02 Crores (Previous year : Rs.10.50 Crores) has been recognized as expenditure in the Statement of Profit and Loss.

In respect of the State Plans (Employee State Insurance), an amount of Rs. 0.0029 Crores (Previous year : Rs.0.01 Crores) has been recognized as expenditure in the Statement of Profit and Loss.

Other Employee benefits

During the year the Company has (reversed)/provided retention bonus of Rs. (10.73) Crores (Previous Year: Rs. 8.00 Crores). The provision for compensated absences as per actuarial valuation as at March 31, 2014 is Rs. 23.70 Crores (March 31, 2013 is Rs. 27.18 Crores).

6 Employee Stock Option Scheme

(Note No 35 of Financial Statements)

The Company has till March 31, 2014 allotted 1.11 Crores (March 31, 2013: 1.11 Crores) equity shares of Rs. 10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock Option Plan 2006 (The plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of ten years from the date of frst annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the Company at an exercise price, which is approved by the compensation committee.

The plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs. 10 each into 10 equity shares of Rs. 1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at Rs. 1 each.

The Company has calculated the compensation cost based on the intrinsic value method i.e. the excess of previous closing price of underlying equity shares on the date of the grant of options over the exercise price of the options given to employees under the employee stock option schemes of the Company and is recognised as deferred stock compensation cost and is amortised on a straight line basis over the vesting period of the options. The Company is using Black Sholes Model for calculating fair values of ESOP granted for determining impact of the fair value method of accounting of employee compensation in financial statement, the impact on net income and earnings per share is provided below:

7 Leases

(Note No 36 of Financial Statements)

Operating Lease : Company as lessee

The Company has entered into certain cancellable and non-cancellable operating lease agreements mainly for office premises. The lease rentals charged during the year and maximum obligations on long term non-cancellable operating lease payable as per the agreements are as follows :

8 Related Party Transactions

(Note No 37 of Financial Statements)

a) Names of Related Parties and description of relationship.

i. Names of related parties over which control exists S.No Holding Company

1 Lanco Group Limited (LGL)

S.No Subsidiary Companies

1 Amrutha Power Private Limited (APPL)

2 Arneb Power Private Limited(ArPPL)

3 Bhanu Solar Projects Private Limited (BSPPL)

4 Bhola Electricity (Pvt) Limited (BEPL)

5 Carpenter Mine Management PTY Ltd

6 Coral Orchids Private Limited (COPL)

7 Cordelia Properties Private Limited

8 Cressida Properties Private Limited

9 Deimos Properties Private Limited

10 Dione Properties Private Limited

11 Diwakar Solar Projects Limited (DSPL)

12 Emerald Orchids Private Limited

13 Green Solar SRL

14 Helene Power Private Limited

15 JH Patel Power Project Private Limited (JhPL)

16 Jupiter Infratech Private Limited (JIPL)

17 Khaya Solar Projects Private Limited(KSPPL)

18 Lanco Amarkantak Power Limited (LAPL)

19 Lanco Anpara Power Limited (LAnPL)

20 Lanco Budhil Hydro Power Private Limited (LBHPPL)

21 Lanco Enterprise Pte. Ltd, China(LEPL)

22 Lanco Hills Technology Park Private Limited (LHTPPL)

23 Lanco Holding Netherlands B.V

24 Lanco Hydro Power Limited (Formerly known as Lanco Hydro Power Private Limited)(LHPL)

25 Lanco Infratech (Mauritius) Limited (LIML)

26 Lanco Infratech Nepal Private Limited

27 Lanco International Pte Limited(LInPL)

28 Lanco IT P.V. Investments B.V.

29 Lanco Kanpur Highways Limited (LKHL)

30 Lanco Kondapalli Power Limited (LKPL)

31 Lanco Mandakini Hydro Energy Private Limited (LMHEPL)

32 Lanco Power International Pte. Limited(LPIPL)

33 Lanco Power Limited (LPL)

34 Lanco Rambara Hydro Power Private Limited

35 Lanco Resources Australia Pty. Limited (LRAPL)

36 Lanco Resources International Pte Limited (LRIPL)

37 Lanco Solar Energy Private Limited (LSEPL)

38 Lanco Solar Holding Netherlands B.V.

39 Lanco Solar Holdings LLC

40 Lanco Solar International GMBH

41 Lanco Solar International Limited (LSIL)

42 Lanco Solar International Pte Limited(LSIPL)

43 Lanco Solar International USA Inc.

44 Lanco Solar Power Projects Private Limited (LSPPPL)

45 Lanco Solar Private Limited (LSPL)

46 Lanco Solar Services Private Limited(LSSPL)

47 Lanco SP P.V. Investments B.V.

48 Lanco Tanjore Power Company Limited (LTPCL)

49 Lanco Teesta Hydro Power Limited (LTHPL)

50 Lanco Thermal Power Limited (LTPL)

51 Lanco US P.V. Investments B.V.

52 Lanco Virgin Islands I, LLC

53 Lanco Wind Power Private Limited (LWPPL)

54 LE New York - LLC

55 Leda Properties Private Limited (LPPL)

56 Mahatamil Mining and Thermal Energy Limited (MMTEL)

57 Mercury Projects Private Limited (MPPL)

58 National Energy Trading and Services Limited (NETS)

59 Neptune Projects Private Limited (NPPL)

60 Nix Properties Private Limited.

61 Omega Solar Projects Private Limited

62 Orion Solar Projects Private Limited

63 P.T Lanco Indonesia Energy (LInE)

64 Pasiphae Power Private Limited

65 Pearl Farms Private Limited (PFPL)

66 Portia Properties Private Limited (PPPL)

67 Sabitha Solar Projects Private Limited

68 Sirajganj Electric (Pvt.) Limited(SEPL)

69 Solarf SP06

70 Solarf SP07

71 Spire Rotor Private Limited (SRPL)

72 Tasra Mining & Energy Company Private Limited(TMECPL)

73 Telesto Properties Private Limited (TePPL)

74 The Grifn Coal Mining Company Pty Ltd(GCMCPL)

75 Thebe Properties Private Limited (ThPPL)

76 Udupi Power Corporation Limited (UPCL)

77 Uranus Infratech Private Limited (UIPL)

78 Uranus Projects Private Limited (UPPL)

79 Western Australia Coal Terminal Pty Ltd

ii. Name of other related parties with whom transactions were carried out S.No Fellow Subsidiary

1 Lanco Babandh Power Limited (LBPL)

S.No Enterprises where Singnifcant Infuence Exists

1 Ananke Properties Private Limited (AnPPL)

2 Avior Power Private Limited (AvPPL)

3 Basava Power Private Limited (BPPL)

4 Bay of Bengal Gateway Terminal Private Limited (BBGTPL)

5 Belinda Properties Private Limited (BePPL)

6 Bianca Properties Private Limited (BiPPL)

7 Charon Trading Private Limited (CTPL)

8 Genting Lanco Power (India) Limited

9 Himavat Power Limited (HPL)

10 KVK Energy Ventures Private Limited(KEVPL)

11 Lanco Devihalli Highways Limited(LDHL)

12 Lanco Hoskote Highway Limited(LHHL)

13 Lanco Vidarbha Thermal Power Limited (LVTPL)

14 Mimas Trading Private Limited (MTPL)

15 Mirach Power Limited (MiPL)

16 Phoebe Trading Private Limited (PTPL)

17 Pragdisa Power Private Limited (PrPPL)

18 Regulus Power Private Limited (RPPL)

19 Siddheswara Power Private Limited

20 Tethys Properties Private Limited (TPPL)

21 Vainateya Power Private Limited (VPPL)

22 Vasavi Solar Power Private Limited (VSPPL)

S.No Key Management Personnel

1 Sri L.Madhusudhan Rao (Chairman) (LMR) 3 Sri G.Venkatesh Babu (Managing Director) (GVB)

2 Sri G.Bhaskara Rao (Vice Chairman) (GBR) 4 Mr. S.C. Manocha (Whole Time Director) (SCM)

S.No Relatives of Key Management Personnel

1 Sri L.Sridhar (Brother of LMR) (LS)

S.No Enterprises owned or significantly infuenced by Key Management Personnel or their relatives

1 Chatari Hydro Power Private Limited (CaPTL)

2 Cygnus Solar Projects Private Limited (Formerly Callisto Trading Private Limited.)(Csppl)

3 Himachal Hydro Power Private Limited (HHPPL)

4 Lanco Bay Technology Park Private Limited (LBTPL)

5 Lanco Enterprise Private Limited(LEnt PL)

6 Lanco Foundation (LF)

7 Lanco Horizon Properties Private Limited (LHrPPL)

8 Lanco Kerala Seaports Private Limited (LKSPL)

9 Lanco Transport Network Company Private Limited (LTNCPL)

10 LCL Foundation (LCL)

11 Nekkar Power Private Limited (NePPL)

12 Ravi Hydro Electric Private Limited (RHEPL)

13 Lanco Rani Joint Venture (LR)

9 Segment Reporting

(Note No 38 of Financial Statements)

Segment information under Accounting Standard- 17 " Segment Reporting" has not been presented in these financial statements as the same has been presented in the Consolidated Financial Statements of the Company.

10 Contingent Liabilities - Not probable and therefore not provided for

(Note No 40 of Financial Statements)

(Rs. Crores) March 31, 2014 March 31, 2013

Corporate guarantees given to Financial Institutions, Banks on behalf of other group companies 13,618.21 15,249.17

Income Tax Demands disputed by the Company relating to disallowances made in various 10.15 3.84 assessment proceedings, under appeal

Claims against the Company not acknowledged as debt 15.61 11.00

Sales Tax/Entry Tax Demands disputed by the Company, under appeal 8.37 0.44

Service Tax demands disputed by the Company relating to applicability of service tax to 116.18 113.02 various services, under appeal

11 Deferral/capitalisation of Exchange Diference

(Note No 42 of Financial Statements)

In line with the Notifcation dated December 29, 2011 issued by the Ministry of Corporate Afairs, The Company has selected the option given in Paragraph 46A of the Accounting Standard – 11, "The Efects of Changes in Foreign Exchange Rates", the foreign exchange (gain) / loss arising on revaluation of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets to be depreciated over the balance life of such assets and in other cases the foreign exchange (gain) / loss to be amortised over the balance period of such long term foreign currency monetary items. On availment of option under this notifcation, foreign exchange diference remains unamortized is Rs. 75.17 Crores (March 31, 2013 : Rs. 35.46 Crores).

12 (Note No 49 of Financial Statements)

(a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited(LTPL) and Lanco Hydro Power Limited (LHPL)as thermal power holding company and hydro power holding company respectively.

(b) As approved by the members vide their resolution dated March 19, 2010 the Company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as ''related entities'') to its wholly owned step down subsidiaries i.e. Lanco Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regulus Power Private Limited (an erstwhile subsidiary) on March 30, 2012 for total cash consideration amounting to Rs. 6,815.51 Crores. As of March 31, 2014 Rs. 2,644.22 Crores (March 31, 2013 Rs. 2,701.35 Crores) representing the balance amount of consideration for sale of shares is receivable from the above entities subject to realisation.

(c) As a result of the above change, one of the associate company namely Lanco Babandh Power Limited, consequent to the sale of its equity shares to an associate i.e. Regulus Power Private Limited, has become an associate of an associate.

(d) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt of approvals, the Company has recorded the sale of investments in related entities in the financial statements. During the year, the management has obtained approvals from the most of the lenders and the management is confdent of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by the lenders to the respective related entities may become due if the Company still wants to pursue transfer of shares, or the sold investments will be purchased back by the company. Based on legal advice, the management is of the opinion that they have complied with relevant laws and regulations.

13 (Note No 50 of Financial Statements)

The Company has entered into transactions with related parties, including some of its associates namely Lanco Vidarbha Thermal Power Limited (LVTPL), Himavat Power Limited (HPL), Lanco Hoskote Highway Limited (LHHL), Lanco Devihalli Highways Limited (LDHL), Vainateya Power Private Limited (VPPL) and Lanco Babandh Power Limited (LBPL) (fellow Subsidiary) whose details are shown in summary of the transactions with related parties, under note no. 37. The Company along with Lanco Group Limited (Holding Company) and through various intermediate companies holds the remainder of shares in these associates and LBPL. In case of LVPTL, LBPL and HPL, the Group holds cumulative compulsorily convertible preference shares which when exercised for conversion as per the terms of these shares would result in these companies becoming subsidiaries of the Company or its step down subsidiaries.

14 (Note No 51 of Financial Statements)

The Company has commitments to support its various ongoing projects. These commitments require the Company to garner such additional cash flows to fund the operations as well as investment obligations to ongoing projects. The management is actively considering the aspects like dilution of stake in subsidiary companies, disposal of non-core assets for which necessary steps have already been taken which alongwith CDR scheme approved by CDR EG would bring in additional cash fow into the system to meet the obligations.

15 (Note No 52 of Financial Statements)

One of the Company''s step down subsidiary Lanco Anpara Power Limited (LAnPL) has been incurring losses ever since the commencement of commercial operations and accumulated losses incurred so far eroded the net worth significantly, taking into consideration LAnPL management''s assessment of the situation including eforts towards seeking revision in the tarif etc. pending before the regulators, the management of the Company is of the view that the carrying value of Assets of LAnPL is realizable at the value stated therein.

16 (Note No 53 of Financial Statements)

The Company has not paid principal amount of Rs. 96.89 Crores (March 31, 2013 : Rs. 572.42 Crores) and interest amount of Rs. 50.99 Crores (March 31, 2013 : Rs. 43.50 Crores) as at March 31, 2014.

17 (Note No 54 of Financial Statements)

No Duty Drawback claims recognised during the year (March 31, 2013: Rs. 0.70 Crores) as deduction from the construction materials consumed.

18 (Note No 55 of Financial Statements)

Previous year figures have been regrouped/reclassified where ever necessary, to conform to those of the current year.

19 (Note No 56 of Financial Statements)

On excersing of the option available under Revised Schedule VI to prepare the financials in Crores rounded of to two decimals, the amounts / numbers below fifty thousands in the financials are appearing as zero.


Mar 31, 2013

1. Corporate Information

Lanco Infratech Limited is an integrated infrastructure developing company. The company provides engineering, procurement, construction, commissioning and project management services on a turnkey basis to the power Sector for thermal (coal fired and gas fired) and hydro power plants as well and also construction of highways, power plants, water supply and irrigation projects including dam, tunnels etc. The Company is also into generation of energy from wind and solar power plants.

2. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the company are consistent with those used in the previous year.

3. Employee Stock Option Scheme

The Company has till March 31, 2013 allotted 111.18 lakhs (March 31, 2012: 111.18 lakhs ) equity shares of Rs. 10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock option plan 2006 (The Plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or Group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of six years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the company at an exercise price, which is approved by the compensation committee.

The Plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs.10 each into 10 equity shares of Rs.1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at Rs.1 each.

4. Segment Reporting

Segment information under Accounting Standard- 17 " Segment Reporting" has not been presented in these financial statements as the same has been presented in the Consolidated Financial Statements of the Company.

5. Deferral/capitalisation of Exchange Difference

In line with the Notification dated December 29, 2011 issued by the Ministry of Corporate Affairs, The Company has selected the option given in Paragraph 46A of the Accounting Standard – 11, "The Effects of Changes in Foreign Exchange Rates", the foreign exchange (gain) / loss arising on revaluation of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets to be depreciated over the balance life of such assets and in other cases the foreign exchange (gain) / loss to be amortised over the balance period of such long term foreign currency monetary items. On availment of option under this notification, foreign exchange difference remains unamortized is Rs. 3,545.58 Lakhs (March 31 2012 : Nil).

6. (a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited and Lanco Hydro Power Limited (formerly Lanco Hydro Power Private Limited) as thermal power holding company and hydro power holding company respectively.

(b) As approved by the members vide their resolution dated March 19, 2010 the company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as ‘related entities'') to its wholly owned step down subsidiaries i.e. Lanco Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regulus Power Private Limited (an erstwhile subsidiary) on March 30, 2012 for total cash consideration amounting to Rs. 6,81,550.87 lakhs. As of March 31, 2013 Rs. 2,70,134.90 lakhs, (March 31, 2012 Rs. 2,70,135.16 lakhs) representing the balance amount of consideration for sale of shares is receivable from the above entities.

(c) As a result of the above change, one of the associate namely Lanco Babandh Power Limited, consequent to the sale of its equity shares to an associate i.e. Regulus Power Private Limited, has become an associate of an associate.

(d) During the previous year, the Company has entered into novation agreement with Lanco Power Limited and related entities forming part of power holding company structure, for transfer of loans receivables amounting to Rs. 1,35,486.50 lakhs outstanding in the books of the Company and in the current year an amount of Rs. 61,586.50 lakhs is outstanding with regard to the said transactions in the books of the company.

(e) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt of approvals, the Company has recorded the sale of investments in related entities in the financial statements. During the year, the Management has obtained approvals from the most of the lenders and the management is confident of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by the lenders to the respective related entities may become due if the company still wants to pursue transfer of shares, or the sold investments will be purchased back by the company. Based on legal advice, the management is of the opinion that they have complied with relevant laws and regulations.

7. The Company has entered into transactions with related parties, including some of its associates namely Lanco Vidarbha Thermal Power Limited (LVTPL), Himavat Power Private Limited (HPPL), Lanco Hoskote Highway Limited (LHHL), Lanco Devihalli Highways Limited (LDHL), Vainateya Power Private Limited (VPPL) and Lanco Babandh Power Limited (LBPL) (fellow Subsidiary) whose details are shown in summary of the transactions with related parties, under note no. 35. The Company along with Lanco Group Limited (Holding Company) and through various intermediate companies holds the remainder of shares in these associates and LBPL. In case of LVPTL, LBPL and

HPPL, the Group holds cumulative compulsorily convertible preference shares which when exercised for conversion as per the terms of these shares would result in these companies becoming subsidiaries of the Company or its step down subsidiaries.

8. As on March 31, 2013, the Company has loans aggregating Rs. 33,361.92 Lakhs falling due over next twelve months period and also unpaid dues of Rs. 61,591.44 Lakhs of the company as at March 31, 2013. This apart the Company has commitments to support its various ongoing projects. These matters require the Company to garner such additional cash flows to fund the operations as well as investment obligations to ongoing projects. The management is actively considering the aspects like dilution of stake in subsidiary companies, disposal of non-core assets for which necessary steps have already been taken which would bring in additional cash flows into the system to meet its obligations.

9. One of the company''s step down subsidiary Lanco Anpara Power Limited (LAnPL) has been incurring losses ever since the commencement of commercial operations and accumulated losses incurred so far eroded the net worth significantly, taking into consideration LAnPL management''s assessment of the situation including efforts towards seeking revision in the tariff etc pending before the regulators, the management of the Company is of the view that the carrying value of Assets of LAnPL is realizable at the value stated therein.

10. Due to lower profits in the Company the remuneration of Directors as fixed by the members for the financial year 2012-13 is exceeding the permissible remuneration under the Companies Act, 1956 by Rs. 1,506.30 Lakhs. The Company is taking necessary steps for obtaining the approval of the Central Government and approval of members for such remuneration.

11. The company has not paid principal amount of Rs. 57,241.82 Lakhs (March 31, 2012 : Nil) and interest amount of Rs. 4,349.62 Lakhs (March 31, 2012 : Nil) as at March 31, 2013.

12. Duty Drawback claims recognised during the year Rs. 70.36 Lakhs (March 31, 2012: Rs. 23,331.69 Lakhs) as deduction from the construction materials consumed.

13. Previous year figures have been regrouped/reclassified where ever necessary, to confirm to those of the current year.


Mar 31, 2012

1. CORPORATE INFORMATION

Lanco Infratech Limited is an integrated infrastructure developing Company. The Company provides engineering, procurement, construction, Commissioning and project management services on a turnkey basis to the Power Sector for thermal (coal fired and gas fired) and hydro power Plants as well and also construction of highways, power plants, water Supply and irrigation projects including dam, tunnels etc. The Company Is also into generation of energy from wind and solar power plants.

2. BASIS OF PREPARATION

The financial statements have been prepared to comply in all material Respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant Provisions of the Companies Act, 1956. The financial statements have Been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the Company And except for the changes in accounting policy discussed below, are Consistent with those used in the previous year.

3. EMPLOYEE STOCK OPTION SCHEME

The Company has till March 31, 2012 allotted 111.18 lakhs (March 31, 2011: 111.18 lakhs) equity shares of Rs. 10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock option plan 2006 (The Plan) which Was formulated by the Company. The plan provides for grant of stock Options of equity shares of the Company to employees of the Company and Its subsidiaries subject to continued employment with the Company or Group.

Each option comprises of one equity share which will vest on annual Basis at 20% each over five years and shall be capable of being Exercised within a period of six years from the date of first annual Vesting.

Each option granted under the above plans entitles the holder to one Equity share of the Company at an exercise price, which is approved by The compensation committee.

The Plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

4. SEGMENT REPORTING

Segment information under Accounting Standard- 17 " Segment Reporting" Has not been presented in these financial statements as the same has Been presented in the Consolidated Financial Statements of the Company.

5. RELATED PARTY TRANSACTIONS

A) Names of Related Parties and description of relationship

I. Names of related parties over which control exists S.No. Holding Company

1 Lanco Group Limited (LGL) (From October 25, 2011)

S.No. Subsidiary Companies

1 Amrutha Power Private Limited (APPL)

2 apricuss.R.L

3 Arneb Power Private Limited(arppl)

4 Bhanu Solar Projects Private Limited (BSPPL)

5 Carpenter Mine management Pty ltd

6 Coral Orchids Private Limited (COPL)

7 Cordelia Properties Private Limited (CPCL)

8 Cressida Properties Private Limited (crppl)

9 Deimos Properties Private Limited (deppl)

10 Dione Properties Private Limited (DPPL)

11 Diwakar Solar Projects Limited (DSPL) (Formerly Diwakar Solar Projects Private Limited)

12 Emerald Orchids Private Limited

13 Green Solar SRL

14 Helene Power Private Limited

15 JH Patel Power Project Private Limited (jhpl)

16 Jupiter Infratech Private Limited (JIPL)

17 Khaya Solar Projects Private Limited(KSPPL)

18 Lanco Amarkantak Power Limited ( Formerly Lanco Power Limited ) (LAPL)

19 Lanco Anpara Power Limited (lanpl) (From 28 March, 2012)

20 Lanco Budhil Hydro Power Private Limited (LBHPPL)

21 Lanco Energy Africa (Proprietary) Limited (LEAL)

22 Lanco Enterprise Pte. Limited China(LEPL)

23 Lanco Hills Technology Park Private Limited (LHTPPL)

24 Lanco Holding Netherlands BV

25 Lanco Infratech (Mauritius) Limited (LIML)

26 Lanco Infratech Nepal Private Limited

27 Lanco International Pte Limited (llnpl)

28 Lanco IT P.V Investments B.V(Formerly Lanco Italy PV1 Investment B.V Utrecht)

29 Lanco Kanpur Highways Limited (LKHL)

30 Lanco Kondapalli Power Limited (Formerly Lanco Kondapalli Power Private Limited) (LKPL)

31 Lanco Mandakini Hydro Energy Private Limited (LMHEPL)

32 Lanco Power International Pte. Limited

33 Lanco Power Limited(LPL) (Formerly Lanco Hydro Power Ventures Pvt. Limited)

34 Lanco Resources Australia PTY Ltd(LRAPL)

35 Lanco Resources International Pte Limited (LRIPL)

36 Lanco Rocky Face Land Holding LLC

37 Lanco Solar Canada Limited

38 Lanco Solar Energy Private Limited (LSEPL)

39 Lanco Solar Holding Netherland B.V Utrecht

40 Lanco Solar Holdings, Newly Incorporated LLC (USA) (Formerly Lanco North Park Land Holding two LLC)

41 Lanco Solar International GMBH

42 Lanco Solar International Limited (LSIL)

43 Lanco Solar International Pte Limited

44 Lanco Solar International US Inc.

45 Lanco Solar Power Projects Private Limited (Formerly Caliban Trading Private Limited)(Lspppl)

46 Lanco Solar Private Limited (LSPL)

47 Lanco Solar Project Development S.L.U, Spain

48 Lanco Solar Services Private Limited(LSSPL)

49 Lanco SP PV 1 Investments B.V (Formerly Lanco Spain PV1 Investment B.V Utrecht)

50 Lanco Tanjore Power Company Limited (LTPCL) (Formerly Aban Power Company Limited)

51 Lanco Teesta Hydro Power Private Limited (LTHPPL)

52 Lanco Tracy City Land Holdings LLC

53 Lanco US EPC Branch LLC (Formerly Lanco North Park Land Holdings One LLC)

54 Lanco US PV Investments B.V(Formerly Lanco Italy PV2 Investments B.V.)

55 Lanco Wind Power Private Limited (LWPPL)

56 lenewyork-LLC

57 Leda Properties Private Limited (LPPL)

58 Mahatamil Mining and Thermal Energy Limited

(Formerly Lanco Mining and Thermal Energy Limited) (MMTEL)

59 Mercury Projects Private Limited (MPPL)

60 National Energy Trading and Services Limited (NETS)

61 Neptune Projects Private Limited (NPPL)

62 Nix Properties Private Limited

63 Omega Solar Projects Private Limited

64 Orion Solar Projects Private Limited

65 Pasiphae Power Private Limited

66 Pearl Farms Private Limited (PFPL)

67 PT Lanco Indonesia Energy (llne)

68 Sabitha Solar Projects Private Limited

69 solarfi SP06

70 solarfi SP07

71 Spire Rotor Private Ltd (SRPL)

72 Telesto Properties Private Limited (teppl)

73 The Griffin Coal Mining Company Pty Ltd(GCMCPL)

74 Thebe Properties Private Limited (tHPPL)

75 Udupi Power Corporation Limited (UPCL) (From March 29, 2012)

76 Uranus Infratech Private Limited (UIPL)

77 Uranus Projects Private Limited (UPPL)

78 Lanco Hydro Power Private Limited (LHPPL) (Formerly Vamshi Hydro Energies Private Limited )

79 Lanco Thermal Power Limited (LTPL) (Formerly Vamshi Industrial Power Limited )

80 Approve Choice Investments (Pty.) Limited

81 Bar Mount Trading (Pty.) Limited

82 Barrelake Investments (Pty.) Limited

83 Belara Trading (Pty.) Limited

84 Caelamen (Pty.) Limited

85 Dupondius (Pty.) Limited

86 Filten Trading (Pty.) Limited

87 Gamblegreat Trading (Pty.) Limited

88 K2011103835 (Pty.) Limited

89 Lexton Trading (Pty.) Limited

90 TIPERSOLAIRESAS

91 Himavat Power Private Limited (HPPL) (Upto December 1, 2011)

92 Regulus Power Private Limited(RPPL) (Upto March 29, 2012)

93 Lanco Vidarbha Thermal Power Limited (LVTPL) (Upto September 20, 2011)

ii. Name of other related parties with whom transactions were carried Out

S.No. Fellow Subsidiary

1 Lanco Babandh Power Limited (LBPL) (From March 31, 2012) (Also, refer Note No. 38)

S.No. Enterprises where Singnificant Influence Exists

1 Ananke Properties Private Limited (anppl)

2 Avior Power Private Limited (avppl)

3 Basava Power Private Limited (BPPL)

4 Bay of Bengal Gateway Terminal Private Limited (BBGTPL)

5 Belinda Properties Private Limited (beppl)

6 Bianca Properties Private Limited (bippl)

7 Charon Trading Private Limited (CTPL)

8 Genting Lanco Power (India) Limited(GLPIL)

(Formerly Genting Lanco Power (India) Private Limited(GLPIPL))

9 Himavat Power Private Limited (HPPL) (From December 2, 2011)

10 KVK Energy Ventures Private Limited(KEVPL)

11 Lanco devihalli Highways Limited(LDHL) (Formerly Lanco Devihali Highways Private Limited)

12 Lanco Hoskote Highway Limited(LHHL) (Formerly Lanco Hoskote Highway Private Limited)

13 Lanco Vidarbha Thermal Power Limited (LVTPL) (From September 21, 2011)

14 Mimas Trading Private Limited (MTPL)

15 Mirach Power Limited (mipl) (Formerly Mirach Power Private Limited)

16 Phoebe Trading Private Limited (PTPL)

17 Portia Properties Private Limited (PPPL)

18 Pragdisa Power Private Limited (prppl)

19 Regulus Power Private Limited(RPPL) (From March 30, 2012)

20 Siddheswara Power Private Limited (sippl)

21 Tethys Properties Private Limited (TPPL)

22 Vainateya Power Private Limited (VPPL)

23 Lanco Babandh Power Limited (LBPL) (Upto March 30, 2012) (Also, Refer Note No. 38)

24 Lanco Anpara Power Limited (lanpl) (Upto March 27, 2012)

25 Udupi Power Corporation Limited (UPCL) (Upto March 28, 2012)

S.No. Key Management Personnel and their relatives

1 Sri L.Madhusudhan Rao (Chairman) (LMR)

2 Sri G.Bhaskara Rao (Vice Chairman) (GBR)

3 Sri G.Venkatesh Babu (Managing Director) (GVB)

4 Mr. S.C. Manocha (Whole Time Director) (SCM)

S.No. Relatives of key management personnel

1 Smt L.Rajya Lakshmi (Spouse of LMR) (LRL)

2 Smt. G.Padmavathi (Spouse of GBR) (GP)

3 Sri G.Avinash (Son of GBR) (SGA)

4 Sri lsridhar (Brother of LMR) (LS)

5 Smt. L.Sirisha (Spouse of LS) (lsi)

S.No. Enterprises owned or significantly influenced by key management Personnel or their relatives

1 Chatari Hydro Power Private Limited (captl)

2 Cygnus Solar Projects Private Limited (Formerly Callisto Trading Private Limited.)(Csppl)

3 Himachal Hydro Power Private Limited (HHPPL)

4 Infra India Ventures Private Limited(IIVPL) (Formerly Lanfin Ventures Private Limited)

5 Lanco Bay Technology Park Private Limited (LBTPL)

6 Lanco Foundation (LF)

7 Lanco Horizon Properties Private Limited (lhrppl)

8 Lanco Kerala Seaports Private Limited (LKSPL)

9 Lanco Transport Network Company Private Limited (LTNCPL)

10 LCL Foundation (LCL)

11 Nekkar Power Private Limited (neppl)

12 Ravi Hydro Electric Private Limited (RHEPL)

13 S.V Contractors (SVC)

14 Lanco Rani Joint Venture (LR)

15 Lanco Property Management Company Private Limited (LPMCPL)

6. During the year, the following significant changes in the investment Status of the Company in its subsidiaries and associates have taken Place. The Company executes EPC contracts for construction of power Plants for these subsidiaries and associates.

A) Two of the subsidiaries namely Lanco Vidharba Thermal Power Limited (LVTPL) and Himavat Power Private Limited (HPPL) got converted into Associates upon Company not fully exercising its right of pre-emption For making additional investment in the equity shares of both these Entities.

B) Two of the erstwhile associates of the Group namely Lanco Anpara Power Limited (lanpl) and Udupi Power Corporation Limited (UPCL) got Converted into subsidiaries during the year post commencement of Operations. Lanpl got converted into subsidiary of the Company upon Subscription of further equity shares issued at par by lanpl and UPCL Got converted into subsidiary of the Company upon conversion of 1% Cumulative Compulsory Convertible Preference Shares of UPCL held by the Company.

7. On March 30, 2012, the Company has put in place two level power Holding Company structure wherein Lanco Power Limited (formerly Lanco Hydro Power Ventures Private Limited) (LPL) a wholly owned subsidiary Of the Company as the power holding vehicle for the Company. LPL has Further two wholly owned subsidiaries namely Lanco Thermal Power Limited (formerly Vamshi Industrial Power Ltd) and Lanco Hydro Power Private Limited (formerly Vamshi Hydro Energies Private Limited) as Thermal power holding Company and hydro power holding Company Respectively.

As approved by the members vide their resolution dated March 19, 2010 The Company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as 'related entities') to its Wholly owned step down subsidiaries i.e. Lanco Thermal Power Limited (LTPL), Lanco Hydro Power Private Limited (LHPPL) and to an associate, Regulus Power Private Limited (an erstwhile subsidiary) on March 30, 2012 for total cash consideration amounting to ' 6,81,550.87 lakhs. As Of March 31, 2012, ' 2,70,135.16 lakhs representing the balance amount Of consideration for sale of shares is receivable from the above Entities.

As a result of the above change, one of the associate namely Lanco Babandh Power Limited, consequent to the sale of its equity shares to An associate, Regulus Power Private Limited, has become as associate of An associate.

The Company has entered into novation agreement with Lanco Power Limited (LPL) and related entities forming part of power holding Company structure, for transfer of loans receivables amounting to Rs. 1,35,486.50 lakhs outstanding in the books of the Company, from the Company to LPL.

The aforesaid transfer of shares in various subsidiaries and associates Requires lenders/customer approvals. Management has initiated the Process of seeking approvals from respective lenders for transfer of Shares in these related entities and pending the receipt of approvals, The Company has recorded the sale of investments in related entities in These financial statements. Out of five lead lenders, four lead lenders Have given the approval, the other lead lender and other participating Lender's approval is in progress. In case such approvals are not Received, the loans given by the lenders to the respective related Entities may become due if the Company still wants to pursue transfer Of shares, or the sold investments will be purchased back by the Company. Management is confident of receiving the requisite approvals From other lenders and customer in due course of time and has Accordingly affected the sale and recorded the transaction in the books Of the Company.

Based on legal advice, the management is of the opinion that they have Complied with relevant laws and regulations and there are no tax Implications arising out of the above transactions either on the Company or the related entities.

8. The Company has entered into transactions with related parties, Including some of its associates namely Lanco Vidarb- hath ermal Power Limited (LVTPL), Himavat Power Private Limited (HPPL), Lanco Hoskote Highway Limited (LHHL), Lanco Devihalli Highways Limited (LDHL), Vainateya Power Private Limited (VPPL) and Lanco Babandh Power Limited (LBPL) (fellow Subsidiary) whose details are shown in summary of the Transactions with related parties, under note no. 36. The Company along With Lanco Group Limited (Holding Company) and through various Intermediate companies holds the remainder of shares in these Associates and LBPL. In case of LVPTL, LBPL and HPPL, the Group holds Cu- mulative compulsorily convertible preference shares which when Exercised for conversion as per the terms of these shares would result In these companies becoming subsidiaries of the Company or its step Down subsidiaries.

9. As at the year-end, the Company has borrowings aggregating Rs. 4,22,126.50 lakhs against net worth of Rs. 3,59,549.66 lakhs. The Company Has put in place power holding Company structure during the year as Detailed in note no. 38 for mobilising the equity funds at appropriate Level depending on the requirement to the advantage of the investors.

Management is confident that the Company's requirement for funding all Ongoing projects would be comfortably met from the Company's internal Cash generations and mobilisation of other funds as envisaged.

10. DEFERRAL/CAPITALISATION OF EXCHANGE DIFFERENCE

The Ministry of Corporate Affairs (MCA) has issued the amendment dated December 29, 2011 to AS 11 The Effects of Changes in Foreign Exchange Rates, to allow companies deferral/capitalisation of exchange Differences arising on long-term foreign currency monetary items. In Accordance with the amendment/ earlier amendment to AS-11, the compnay Has capitalised exchange loss, arising on long term foreign currency Loan, amounting to Rs. Nil (March 31, 2011- Rs. Nil) to the cost of plant And equipments.

11. Duty Drawback claims recognised during the yearRs. 23,331.69 lakhs (Previous Year: Rs. 21,445.19 lakhs) as deduction from the construction Materials consumed.

12. PREVIOUS YEAR FIGURES

Till the year ended March 31, 2011, the Company was using pre- revised Schedule VI to the Companies Act 1956, for preparation and presentation Of its financial statements. During the year ended March 31, 2012, the Revised schedule VI notified under the Companies Act 1956, has become Applicable to the Company. The Company has reclassified previous year Figures to conform to this year's classification.


Mar 31, 2011

I. Nature of Operations

Lanco Infratech Limited is an integrated infrastructure developing company. The company provides engineering, procurement, construction, commissioning and project management services on a turnkey basis to the power Sector for thermal (coal fired and gas fired) and hydro power plants as well and also construction of highways, power plants, water supply and irrigation projects including dam, tunnels etc.

1. (A) Secured Loans

(Note No. 1 (A) of Schedule 20 (III) of Financial Statements)

a) Rupee term loan from financial institution

1. of Rs. 10,714.29 Lakhs (Previous Year: Rs. 12,857.14 Lakhs) is secured by way of hypothecation of certain plant and machinery amounting to Rs. 5,003.60 Lakhs on first charge basis and collateral security of land belonging to and some of its subsidiaries.

2. of Rs. 30,000 Lakhs (Previous Year: Rs. 30,000 Lakhs) is secured by way of pledge of shares of a subsidiary held by the Company and also by pledge of shares of the Company held by one of the promoters and another loan of Rs. Nil Lakhs (2010: Rs. 20,000 Lakhs) from a financial institution is secured by way of pledge of mutual fund units of equivalent amount.

b) Rupee term loan from banks

1. of Rs. 1,816.08 Lakhs (Previous Year : Rs. 2,137.36 Lakhs) is secured by way of mortgage on the immovable assets pertaining to the wind turbine generator project and hypothecation of movable assets both present and future of the company on first charge basis.

2. of Rs. 3,066.47 Lakhs(Previous Year : Rs. Nil Lakhs) is secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the company on first charge basis.

3. of Rs. 50,516.82 Lakhs (Previous Year : Rs. 45,101.10 Lakhs) are secured by way of pledge of shares of a subsidiary held by the Company and also by pledge of shares of the Company held by the promoters.

4. of Rs. 10,000 Lakhs (Previous Year : Rs. 19,998.30 Lakhs) are secured by a first charge on entire current assets of the Company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements.

c) Foreign currency loans (Buyers Credit) from banks of Rs. 47,266.54 Lakhs (Previous Year : Rs. 806.36 Lakhs) are secured as part of working capital limits from banks by way of first charge of hypothecation of stock/work in progress and entire current assets of the company both present and future, on pari passu basis, with a term loan lender of Rs. 10,000 Lakhs and other working capital lenders, under multiple banking arrangements

d) Hypothecation Loans of Rs. 6,495.03 Lakhs (Previous Year : Rs. 7,116.43 Lakhs) are secured by hypothecation of specific construction equipment/ vehicles acquired out of such loans.

e) Cash Credit and working capital loans from banks

1. of Rs. 1,54,885.79 Lakhs (Previous Year: Rs. 47,725.76 Lakhs) from Banks are secured by a first charge by way of hypothecation of stock / work-in-progress and entire current assets of the company both present and future, on pari passu basis with a term loan lender of Rs.10,000 Lakhs and other working capital lenders under multiple banking arrangement.

2. of Rs. Nil Lakhs (Previous Year : Rs. 3,191.00 Lakhs) are secured by a second charge on entire current assets of the Company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements.

(B) Unsecured Loans

(Note No. 1 (B) of Schedule 20 (III) of Financial Statements)

All the unsecured loans from banks are guaranteed by way of pledge of shares of the company held by the promoters.

2. Contingent Liabilities – Not provided for

(Note No. 2 of Schedule 20 (III) of Financial Statements)

a) Sales Tax/Entry Tax Demands disputed by the Company, under appeal Rs. 434.03 Lakhs (Previous Year : Rs. 29.40 Lakhs).

b) Income Tax Demands disputed by the Company relating to disallowances made in various assessment proceedings, under appeal Rs. 61.26 Lakhs (Previous Year : Rs. 422.20 Lakhs).

c) Service Tax demands disputed by the Company relating to applicability of service tax to various services, under appeal works out to Rs. 5,116.09 Lakhs (Previous Year : Rs. 3,560.50 Lakhs )

d) Corporate guarantees given to Financial Institutions, Banks on behalf of other group companies Rs. 10,29,530.86 Lakhs (Previous Year : Rs. 3,87,578.20 Lakhs).

4. Capital Commitments

(Note No. 4 of Schedule 20 (III) of Financial Statements)

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 6,349.31 Lakhs (Previous Year : Rs. 1,187.00 Lakhs)

6. (Note No. 6 of Schedule 20 (III) of Financial Statements)

Amounts paid to subsidiaries, associates and other companies, towards share application money, to the extent not refunded/allotted, have been considered as advances, pending allotment and will be adjusted on allotment .

7. (Note No. 7 of Schedule 20 (III) of Financial Statements)

The Company has entered into transactions with related parties including some of its associates namely UPCL,

LAnPL, LBPL, LHHPL and LDHPL, whose details are shown in the summary of the transactions with the related parties, under note no. 18 of schedule 20(III) of financial statements.The Company along with Lanco Group Limited (one of its promoters) holds the remainder of shares in associates through various intermediate companies. In case of UPCL, LAnPL and LBPL, the company holds cumulative compulsory convertible preference shares which when exercised for conversion as per the terms of these shares would result in these companies becoming subsidiaries of the company.

10. Employee Benefits

(Note No. 12 of Schedule 20 (III) of Financial Statements)

(i) Defined Benefit Plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

(ii) Defined Contribution Plans:

In respect of the defined contribution plan (Provident Fund), an amount of Rs. 1,042.26 Lakhs (Previous Year : Rs. 691.90 lakhs) has been recognized as expenditure in the Profit and Loss Account.

In respect of State Plans (Employee State Insurance) an amount of Rs. 3.35 Lakhs (Previous Year : Rs. 3.20 Lakhs) has been recognized as expenditure in the Profit and Loss Account.

In case of assets given on lease

The company has leased out building, furniture & fixtures on operating lease. The lease term is for 11 months and thereafter renewable. There are no restrictions imposed by lease arrangements.

Segment information under Accounting Standard-17 “Segment Reporting” has not been presented in the stand alone financials as the same has been presented in the Consolidated Financial Statements of the Company.

16. Employee Stock Option Scheme:

(Note No. 20 of Schedule 20 (III) of Financial Statements)

The Company has thus far allotted 1,11,18,096 (previous year 1,11,18,096 ) equity shares of Rs. 10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock option plan 2006 (The Plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or Group. Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of six years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the company at an exercise price, which is approved by the compensation committee.

The Plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs. 10 each into 10 equity shares of Rs. 1 each in the previous year, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at Rs. 1 each.


Mar 31, 2010

1. (Note No. 1 of Schedule 18 (II) of Financial Statements)

During the year, the Company has split its Equity Shares of Rs.10 each into 10 Equity shares of Re.1/- each and completed the process on January 5, 2010.

2. (Note No. 2 of Schedule 18 (II) of Financial Statements)

The Company has on August 7, 2009 allotted 1,84,18,587 equity shares of Rs.10/- each fully paid up at the issue price of Rs.394.90/-(including premium of Rs.384.90/-) per equity share aggregating to an issue size of Rs.7,273.50 Millions in favour of Qualified Institutional Buyers (QIB) in terms of Chapter-XIII-A of Securities and Exchange Board of India (Disclosure and Investor Protection) guidelines, 2000 as amended. The purpose of the issue is to use the net proceeds received from the issue for general corporate purposes and for funding our projects and future growth. Accordingly, the net proceeds of Rs. 7,131.05 Millions (Net of issue expenses of Rs. 142.45 Millions) were utilized for the intended purposes.

3. (A) Secured Loans

(Note No. 3 (A) of Schedule 18 (II) of Financial Statements)

a) Rupee term loan from a bank of Rs.213.74 Millions (2009: Rs.251.92 Millions) is secured by way of mortgage on the immovable assets pertaining to the wind turbine generator project and hypothecation of movable assets both present and future of the company on first charge basis.

Rupee term loans from other banks of Rs. 4,510.11 Millions (2009: Rs. Nil Millions) are secured by way of pledge of shares of the Company held by the promoters and also by pledge of shares of a subsidiary held by the Company and balance rupee term loans from banks of Rs.1,999.83 Millions (2009: Rs.Nil Millions) are secured by a second charge on entire current assets of the Company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements.

b) Rupee term loan from a financial institution of Rs.1,285.71 Millions (2009: Rs.1,500 Millions) is secured by way of hypothecation of certain plant and machinery amounting to Rs.500.36 millions on first charge basis and collateral security of land belonging to the Company and some of its subsidiaries.

Rupee term loan from another financial institution of Rs.3,000 Millions (2009: Rs.Nil Millions) is secured by way of pledge of shares of the Company held by one of the promoters and also by pledge of shares of a subsidiary held by the Company and another loan of Rs. 2,000 Millions (2009: Rs. Nil Millions) from a financial institution is secured by way of pledge mutual fund units of equivalent amount.

c) Cash Credit and Working Capital Loans from Banks of Rs.4,772.58 Millions (2009: Rs.5,306.63 Millions) are secured by a first charge by way of hypothecation of stock/work in progress and entire current assets of the company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements and Rs.Nil Millions (2009: Rs.0.01 Million) from a bank is also guaranteed by certain Directors of the Company in their personal capacity.

Balance Rs. 319.10 Millions (2009: Rs. Nil Millions) are secured by a second charge on entire current assets of the Company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements.

d) Foreign currency loans (Buyers Credit) from banks of Rs. 80.64 Millions (2009: 1,814.21 Millions) are secured as part of working capital limits from banks by way of first charge of hypothecation of stock/ work-in-progress and entire current assets of the company both present and future, on pari passu basis, with other working capital lenders, under multiple banking arrangements

e) Hypothecation Loans of Rs.711.64 Millions (2009: Rs.861.63) are secured by hypothecation of specific construction equipment/vehicles acquired out of such loans.

(B) Unsecured Loans

(Note No. 3 (B) of Schedule 18 (II) of Financial Statements)

All the unsecured loans from banks are guaranteed by way of pledge of shares of the Company held by one of the shareholders of the Company.

4. Contingent Liabilities

(Note No. 4 of Schedule 18(II) of Financial Statements)

a) Sales Tax/Entry Tax Demands disputed by the Company, under appeal Rs.2.94 Millions (2009: Rs. 2.94 Millions).

b) Income Tax Demands disputed by the Company relating to disallowances made in various assessment proceedings, under appeal Rs. 42.22 Millions (2009: Rs. 42.22 Millions).

c) Service Tax demands disputed by the Company relating to applicability of service tax to various services, under appeal works out to Rs. 356.05 Millions (2009: Rs. 197.38 Millions).

d) Corporate guarantees given to Financial Institutions, Banks on behalf of other group companies Rs.38,757.82 Millions (2009: Rs. 21,807.76 Millions).

5. Forward Contracts

(Note No. 5 of Schedule 18 (II) of Financial Statements)

a) Forward cover for foreign currency creditors outstanding as of balance sheet date is Rs 40.21 Millions (2009: Rs. 146.32 Millions).

b) Forward cover for firm commitments or highly probable forecast transaction as of balance sheet date is Rs.2,031.30 Millions (2009: Rs. Nil Millions).

c) Foreign currency exposure (net) that are not hedged by derivative instruments or otherwise is Rs.4,592.61 Millions (2009: Rs.1,964.15 Millions).

6. Capital Commitments

(Note No. 6 of Schedule 18 (II) of Financial Statements)

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs.118.70 Millions (2009: Rs. 142.90 Millions).

b) Towards Investment in equity and preference shares of subsidiary and associate companies – Rs.24,923.76 Millions (2009: Rs. 13,316.87 Millions).

7. (Note No. 7 of Schedule 18 (II) of Financial Statements)

The long-term unquoted investments in equity shares and preference shares of subsidiary companies and associates as given hereunder and included in Schedule 6 are pledged with banks and financial institutions who have extended loan facilities to the respective investee companies.

*Subsidiaries of Lanco Hydro Power Ventures Private Limited

# Out of total 127,577,300 Equity Shares of Lanco Kondapalli Power Private Limited, 1,23,17,300 shares (2009: Nil) were pledged for the purpose of availing loan facilities by Lanco Infratech Ltd.

8. (Note No. 8 of Schedule 18 (II) of Financial Statements)

During the year the Company has changed its accounting policy with respect to valuation of inventory from FIFO method to Weighted Average method. Consequent to the change, the inventory value stated is lower by Rs. 3.94 Millions when compared to FIFO method. The change has resulted in reduction of profit by Rs. 3.94 Millions for the year ended March 31, 2010.

9. (Note No. 9 of Schedule 18 (II) of Financial Statements)

Amounts paid to subsidiary companies and others, towards share application money, to the extent not refunded, have been considered as advances, pending allotment and will be adjusted on allotment (Schedule 11 to Financial Statements).

Share application money paid out of issue proceeds of earlier year and pending allotment has been shown under investment (Schedule 6 to Financial Statements).

ii) Defined Contribution Plans:

In respect of the defined contribution plan (Provident Fund), an amount of Rs.69.19 Millions (2009: Rs.53.11 Millions) has been recognized as expenditure in the Profit and Loss Account.

In respect of State Plans (Employee State Insurance) an amount of Rs.0.32 Million (2009: Rs.0.72 Million) has been recognized as expenditure in the Profit and Loss Account.

10. (Note No.16 of Schedule 18 (II) of Financial Statements)

The Company has entered into certain cancellable and non-cancellable operating lease agreements mainly for office premises. The lease rentals charged during the year and maximum obligations on long-term non-cancellable operating leases payable as per the agreements are as follows:

11. (Note No. 17 of Schedule 18 (II) of Financial Statements)

Disclosure relating to suppliers covered by the Micro Small and Medium Enterprises Act, 2006 (MSME Act) as required under Companies Act, 1956 has been made based on responses received from suppliers against request for confrmation sent out by the Company.

12. (Note No. 18 of Schedule 18 (II) of Financial Statements)

Segment information under Accounting Standard-17 "Segment Reporting" has not been presented in the stand alone financials as the same has been presented in the Consolidated Financial Statements of the Company.

13. (Note No. 19 of Schedule 18 (II) of Financial Statements)

Disclosure of Loans and Advances to Subsidiaries, Associates, Joint Ventures and Others (Pursuant to Clause 32 of the Listing Agreement):

14. Employee Stock Option Scheme:

(Note No. 22 of Schedule 18 (II) of Financial Statements)

The Company has thus far allotted 11,118,096 equity shares of Rs. 10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock option plan 2006 (The Plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or Group. Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of six years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the company at an exercise price, which is approved by the compensation committee.

The Plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of Rs.10 each into 10 equity shares of Re.1 each, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at Re.1 each.

The Company has calculated the compensation cost based on the intrinsic value method i.e. the excess of previous closing price of underlying equity shares on the date of the grant of options over the exercise price of the options given to employees under the employee stock option schemes of the Company is recognised as deferred stock compensation cost and is amortised on a straight line basis over the vesting period of the options. Had the Company applied the fair value (as per Black Scholes Method) for determining compensation cost, the impact on net income and earnings per share is provided below:

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