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Directors Report of Patel Engineering Ltd.

Mar 31, 2015

To the Members of Patel Engineering Ltd.,

The Directors have pleasure in presenting their 66th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2015.

Standalone and Consolidated Financial Performance of Patel Engineering Ltd.

(Rs. in Million)

Consolidated Standalone

2014-15 2013-14 2014-15 2013-14

Total Income 35,313.09 38,165.10 26,682.25 28,518.67

Profit before depreciation, prior period and 961.15 1,357.41 737.86 904.73 exceptional items

Less: Depreciation 797.78 819.77 519.18 542.29

Less : Prior Period Item* - 77.67 - -

Add : Exceptional Item# 153.31 - - -

Profit before tax 316.88 459.97 218.68 362.44

Tax & Minority Interest 232.19 296.28 99.83 112.46

Net Profit 84.69 163.69 118.85 249.98

Add: Opening Balance in Profit & Loss A/c 5,770.36 4,759.61 5,219.52 4,096.98

Add: Reversal of Prudent Provision for Tax ** 600.64 981.31 600.64 981.31

Amount available for appropriation 6,850.83 5,904.61 5,939.01 5,328.27

Appropriations:

a. Proposed Dividend - - - -

b. Tax on Dividend - - - -

c. General Reserve - 25.50 - -

d. Debenture Redemption Reserve - 108.75 - 108.75

e. Depreciation impact as per schedule II 4.92 - 4.92 -

Surplus carried to the Balance sheet 6,845.91 5,770.36 5,934.09 5,219.52

Earnings per equity shares (face value Rs. 1)

- Basic (Rs.) 1.10 2.15 1.55 3.28

- Diluted (Rs.) 1.10 2.13 1.55 3.25

* for Prior Period Item, refer to note no. 39 of Notes to Consolidated Financial Statement.

# for Exceptional Item, refer to note no. 50 of Notes to Consolidated Financial Statement.

** for reversal of Prudent Provision for Tax refer to note no. 25(ii) of notes to Standalone Financial Statement.

Consolidated

The Consolidated total income which stood at Rs. 35,313.09 million lower by 7.47 % as against Rs. 38,165.10 million for the previous year. The profit before depreciation was lower by 29.19% at Rs. 961.15 million as against Rs. 1,357.41 million for the previous year. The net profit was lower by 48.14% at Rs. 84.69 million as against Rs. 163.69 million for the previous year.

Standalone

On Standalone basis, the total income was lower at Rs. 26,682.25 million as against Rs. 28,518.67 million for the previous year. The profit before depreciation was lower by 18.44% at Rs. 737.86 million as against Rs. 904.73 million for the previous year. The net Profit was lower by 52.46% at Rs. 118.85 million as against Rs. 249.98 million for the previous year.

Dividend

To conserve funds, the Board of Directors has not recommended any dividend for the financial year 2014-15.

Information on state of affairs of the Company

Information on the operational and financial performance, among others, is given in the Management Discussion and Analysis Report which is forming part of the Annual Report and is in accordance with Clause 49 of the Listing Agreement.

Share Capital

During the year, 5,61,957 Optional Convertible Preference Shares (OCPS) aggregating to Rs. 5,61,957which were outstanding as on March 31, 2014 were converted on April 15, 2014 and the Company issued and allotted 5,61,957 equity shares to the promoter entities at a price of Rs. 57.50 per share (including premium of Rs. 56.50 per share).

Subsequent to the allotment, the Issued, Subscribed &Paid up Equity Share Capital of the Company increased from 6,98,27,151 Equity Shares of Rs. 1 each to 7,68,06,282 Equity Shares of Rs. 1 each.

Finance

Pursuant to Section 180(1)(c) of the Companies Act, 2013, members vide resolution dated September 9, 2014 passed by Postal Ballot, approved increase in the borrowing powers of the Board of Directors of the Company from Rs. 75,000 million to Rs. 90,000 million, to meet Company's growing business needs.

As on March 31, 2015, the Company on Standalone basis has Rs. 3,650 million outstanding NCDs repayable over period of 3 to 10 years. The NCDs are listed on National Stock Exchange of India Limited.

In addition, the Company from time to time has raised money through borrowings (long and short terms) and the total amount outstanding on standalone basis as on March 31, 2015 is Rs. 37,157.49 million.

Subsidiaries

The Company at present has 84 subsidiaries, 2 joint ventures and 6 associate companies.

During the year ended March 31, 2015, Patel Engineering Inc, the wholly owned subsidiary of the Company in USA acquired 100% stake in ASI Global LLC, USA. The Company also increased its holding in Shreeanant Construction Pvt. Ltd from 51% to 100%. The Company's holding in Pan Realtors Private Ltd. (PAN) got reduced from 51% to 36.43 % on account of non-subscription to the Rights Issue offered by PAN.

In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, a separate statement containing the salient features of the financial statement of the subsidiaries, associates and joint ventures is enclosed as Annexure I of the Boards' Report.

Key Subsidiary / Associate updates

The Company is developing the real estate projects through a wholly owned subsidiary Patel Realty (India) Ltd (PRIL) and its subsidiaries which exclusively focus on the real estate business of the company. Some of the projects which have been launched by PRIL include:

- Development of integrated township named as Neotown on 103 acres in Bangalore. The subsidiary is currently developing residential project (over 24 acres of land consisting of over 2,300 apartments) and a Mall (over 12 acres of land comprising of 2 million sq feet of built up area). The subsidiary has successfully handed over 1,800 apartments of the aforesaid development. The subsidiary got further approval for three residential projects totalling to 2.5 million sq ft. to be monetized shortly in the current financial year. The mall structure is 80% completed.

- Development of Residential Project at Gachibowli, Hyderabad named as Smondo Gachibowli on 4 acres of land comprising of 2 residential tower and a service apartment being developed by PBSR Developers Pvt. Ltd. (100% subsidiary of PRIL). The project is meticulously crafted and offers a unique blend of smart design and superior quality. The Project has commenced construction activity.

- Company's Mauritius subsidiary Les Salines Development Ltd. has received termination notice from the government of Mauritius terminating the Land lease agreement for developing integrated waterfront project namely Neotown Port Louis. In terms of this agreement, the Company is eligible for compensation for all improvement made on the land. The lease of land was granted to the Mauritian subsidiary in the year 2009 and the Company has been carrying on the development of land as per the master plan approved by the Government. The details of compensation are being worked for submission.

ASI Constructors Inc, one of the key subsidiary based in USA has orders in hand of approx Rs. 10,743.90 million as on March 31, 2015. During FY 15, the revenues of this company has increased by 35% in USD terms and 48% in INR terms to Rs. 7,466.40 million as compared to Rs. 5,142 million in the previous year.

Michigan Engineers Pvt. Ltd. wherein the Company has 51% stake, having presence in urban infrastructure Projects, have during financial year 2014-15 been awarded Microtunnelling contract for total 6,165 meter by MCGM, Mumbai. Michigan has also bagged subcontract for Design, Planning & Construction including supply, delivery, Erection, Commissioning of Mechanical Instrumentation and Automation works of Storm Water Pumping station at Britannia outfall, Reti Bunder Bay, Reay Road, Mumbai from Unity-M&P-WPK Consortium and a subcontract from Pratibha Industries Ltd. for the work related to stabilization and dredging of required area near existing plug-in location at Modak Sagar Lake for increased hydraulic flow.

The Company through its wholly owned subsidiary Patel Energy Resources Ltd. (PERL) intended to build a thermal coastal power plant project of 1,050 MW at Nagapattinam, Tamil Nadu. All the statutory clearances required are in place except Consent For Establishment (CFE) that is mandatory for taking up Project construction works is still pending with Government of Tamil Nadu. Pending this, the Company has kept the project currently on hold.

Company's Hydro power project is through the 100% subsidiary Dirang Energy Pvt. Ltd. The said subsidiary has achieved financial closure of this project. The debt for the project amounting to Rs. 9.00 billion has been tied up from consortium of banks led by IDBI Bank. The contract for execution of all the civil, HM, EM works has been awarded; contractor has mobilized man & machinery and execution of the project is in progress.

Company's wholly owned subsidiary Patel Engineering Lanka Pvt. Ltd. in Srilanka has in joint venture with Squanda Prefab World Pvt. Ltd has incorporated a Company in Colombo viz Patel Lanka Squanda Private Ltd. for executing the construction of 1500 dwelling Units at Colombo under the contract signed with Urban Development Authority, Govt. of Sri Lanka. The Client increased the Unit Size from 400 Sft to 500 Sft and the No. of Units from 1500 to 1672 with consequential increase in total contract price. The project work is in progress.

Company's joint venture (JV) with Simplex Infrastructures Ltd. and BS Ltd. (Raichur-Sholapur Transmission Company Pvt. Ltd.) for construction of 765kV S/C Quad Transmission Line from Raichur to Sholapur (approximate route Length is 208 km) on Build, Own, Operate and Maintain (BOOM) basis for a period of 35 years has been successfully commissioned in June 2014. Company's share in the JV is 33.34% with the other two JV partners share being 33.33% each.

The Company along with other JV partners had bagged a BOT project from Uttar Pradesh State Highways Authority (UPSHA)in the name of ACP Tollways Pvt. Ltd. for construction of four-lane highway project in Varanasi- Shaktinagar Road, an entire length of 117.65 km at a project cost of Rs. 17.50 billion. Financial closure for the project has been achieved in June 2012 and the construction work started in February 2013. The SPV has so far completed around 91% of work. The balance work expected to be completed and toll collection to start in December 2015.

Pan Oasis - Noida, residential project of approx 3 million sqft) is being developed by PAN Realtors Pvt. Ltd., werein company holds 36.43%. The project is presently in a advanced stage of completion and expects handover of possession in a phased manner, PAN started the process of first phase of handover and expects completion by March 2016 and for Tower T, the completion by October 2017. Approx 87% of the area has been sold.

Terra Land Developers Ltd., an associate of the Company has sold the development rights of a plot in Bandra Kurla Complex for Rs. 2272.50 million to retire its Non Convertible Debentures.

In terms of Clause 49 V D of the Equity listing Agreement, the Company has formulated a policy for determining 'material' subsidiaries and the same has been disclosed on Company's website at the link: http://tinyurl.com/nqb2o56.

Related Party Transactions

All the transactions entered by the Company with Related Parties were in the ordinary course of Business and at arm's length basis. The Audit Committee granted omnibus approval for the transactions(which are repetitive in nature) and the same was reviewed by the Audit Committee and the Board of Directors.

There were no materially significant transactions with related parties during the financial year 2014-15 which were in conflict with the interest of the Company. All the Related Party Transactions as required under AS-18 are reported in the Notes to the financial statements.

In accordance with the provisions of Clause 49 of the Listing Agreement, the Company has formulated the Related Party Transactions policy and the same is uploaded on Company's website at the link:http://tinyurl.com/nrqnhhs

Particulars of Loans given, Investment made, Guarantees given and Securities provided

The members may note that the Company is engaged in providing infrastructural facilities and hence, as per Section 186(11) of Companies Act, 2013, nothing in Section 186 shall apply to the Company except sub-section (1) of Section 186. Accordingly, a separate disclosure has not been given in the financial statements as required under Section 186(4) with regard to particulars of loan given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security.

Internal Financial Controls

The Management continuously reviews the internal control systems and procedures for the efficient conduct of the Company's business. The Internal Auditor of the Company conducts the audit on regular basis and the Audit Committee reviews internal audit reports and effectiveness of internal control system.

Directors and Key Managerial Persons

i. Independent Director

Mr. Kannan, the independent Director of the Company passed away in December 2014. The Board placed on records its deep appreciation for the valuable contribution made by him during his tenure as a Director of the Company.

Mr. K. Ramasubramanian and Ms. Geetha Sitaraman were appointed as Additional Directors (independent) with effect from November 10, 2014 and March 26, 2015 respectively. We seek members confirmation for appointment of Mr. K. Ramasubramanian and Ms. Geetha Sitaraman as independent Directors for a term upto five consecutive years for a term up to the conclusion of the 71st Annual General Meeting of the Company in the calendar year 2020.

Further, the Company has received the declarations from all the Independent Directors confirming that they meet the criterial of independence as prescribed in terms of Section 149(6) of the Companies Act 2013 and that there is no change in the status of independence.

ii. Retirement by Rotation of the Directors

Mr. Pravin Patel retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. Rs.

iii. Resignation of Director

Mr. Nimish Patel, Whole time Director of the Company has tendered his resignation w.e.f. July 16, 2015 and the Board has accepted it and placed on record its appreciation for the valuable contribution made by him during his tenure as Director of the Company.

iv. Key Managerial Personnel

The following persons are the Key Managerial Personnel (KMPs) of the Company as per the provisions of the Companies Act, 2013 (the Act) and were already in office before the commencement of the Act.

Mr. Pravin Patel Whole time Director & Chairman

Mr. Rupen Patel Managing Director

Ms. Silloo Patel Whole time Director & CFO

Ms. Shobha Shetty Company Secretary

Mr. Ashwin Parmar was appointed as Whole time Director w.e.f April 1, 2014 by the members at their Extra-ordinary General Meeting held on March 19, 2014.

Ms. Kavita Shirvaikar was appointed as Joint Chief Financial Officer of the Company by the Board of Directors at their meeting held on February 13, 2015.

(Mr. Nimish Patel, Whole time Director (KMP) has resigned w.e.f July 16, 2015.)

Number of Board Meetings held

During the year ended March 31, 2015, the Board met 9 times. The details of the Board meetings and the attendance of the Directors at the meeting are provided in the Corporate Governance Report, which forms part of this Annual Report.

Remuneration Policy

The Company has framed a Remuneration Policy pursuant to Clause 49 of the Listing Agreement and Section 178 of the Companies Act, 2013. This Policy is enclosed as Annexure II to the Boards' Report.

Evaluation of Board

The Board has carried out an annual performance evaluation of its own performance, and of the directors individually, as well as the evaluation of all the committees i.e. Audit, Nomination and Remuneration, Stakeholders Relationship, Committee of Directors and CSR Committee.

The Board adopted a formal evaluation mechanism for evaluating its performance and as well as that of its Committees and individual directors, including the Chairman of the Board the exercise was carried out by feedback survey from each directors covering Board functioning such as composition of Board and its Committees, experience and competencies, governance issues etc. Separate Exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board who were evaluated on parameters such as attendance, contribution at the meeting etc.

Directors' Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, the Directors confirm that:

i. in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable Accounting standards had been followed along with proper explanation relating to material departures.

ii. for the financial year ended March 31, 2015, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended March 31, 2015.

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

iv. the annual financial statements have been prepared on a going concern basis.

v. that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi. that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

Audit Committee

The Audit Committee of the Board of Directors of the Company comprised of the following members:

Mr. Khizer Ahmed - Independent Director & Chairman

Mr. Pravin Patel - Executive Director

Mr. K. Ramasubramanian - Independent Director

Mr. S. Jambunathan - Independent Director

Corporate Social Responsibility Committee

In accordance with the provisions of Section 135 of the Companies Act, 2013 (the Act), the Board of Directors of the Company have constituted the Corporate Social Responsibility Committee (CSR Committee) comprising of the following Directors as it members:

Mr. Pravin Patel - Executive Director

Mr. K. Ramasubramanian - Independent Director

Mr. Ashwin Parmar - Executive Director

The terms of reference of the CSR Committee include the matters specified in Section 135 of the Act.

The CSR Policy of the Company is uploaded on the Company's website at the link http://tinyurl.com/o6yczkx

The average net profit of the company for last three financial years is Rs. 446.57 million and the prescribed CSR expenditure required to be spend is Rs. 8.93 million. During the year ended March 31, 2015, the Company has not initiated any CSR activities on account of financial constraints. However, the Company has initiated the CSR activities in the current financial year 15-16.

The implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the company.

Auditors

M/s. Vatsaraj & Co. Chartered Accountants, Mumbai bearing ICAI Registration No. 111327W who retires at the ensuing Annual General Meeting of the Company are eligible for reappointment. They have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder for reappointment as Auditors of the Company.

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

Secretarial Audit Report

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company engaged the services of Dr. K. R. Chandratre, Practising Company Secretary to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2015.

The Secretarial Audit Report (in Form MR-3) is enclosed as Annexure III to the Boards' Report. This report contain observation on not filing the Consolidated Financial Statement for the Year ending March 31, 2014 within 60 days from the end of the financial year to BSE/ NSE and delay in filing Annual Performance Report (APR) of few subsidiaries. The above delays were on account of delay in receipt of audited/unaudited financials of foreign subsidiaries.

Cost Auditor

In terms of the provision of 148 of the Companies Act, 2013, read with the Companies (cost records and audit) Rules, 2014, M/s. D. Radhakrishnan & Co, a firm of Cost Accountants in practice (FRN: 000018) having their office at 11 A, Doverlane flat B1/34 Calcutta 700029 was appointed as Cost Auditor of the Company for the financial year 2014-15 by the Board of Directors of the Company at a remuneration of Rs. 3,50,000(excluding service tax) as recommended by the Audit Committee and approved by the Board subject to ratification by the shareholders at the ensuing Annual General Meeting of the Company.

Sexual harassment of Women at workplace

The Company has framed a Policy on Prevention of Sexual harassment at workplace. There were no cases reported during the year ended March 31, 2015 under this policy.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings / Outgo

The particulars prescribed under Section 134 of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, relating to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings/ Outgo is enclosed as Annexure IV to the Boards' Report.

Extract of the Annual Return

In accordance with the provisions of Section 92 of the Companies Act, 2013 and the Rules framed thereunder, the extract of Annual Return in the prescribed Form MGT -9 is enclosed as Annexure V to the Boards' Report.

Risk Management

The Risk Management Committee of the Board of Directors of the Company has framed and implemented a Risk Management Policy.

Whistle Blower Policy / Vigil Mechanism

The Company has a Vigil Mechanism Policy for the employee to report genuine concerns/grievances. The Policy is uploaded on the Company's website at the link http://tinyurl.com/pvenjtk. The policy provides for adequate safeguards against the victimization of the employees who use the vigil mechanism. The vigil mechanism is overseen by the Audit Committee. There are no complaints / grievances received from any Directors or employees of the Company under this policy.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure VI to the Boards' Report

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, the report on Corporate Governance together with the certificate issued by M/s Vatsaraj and Co, the Auditors of the Company, on compliance in this regard forms part of the Annual Report.

Employee Stock Option Scheme (ESOP)

During the year ended March 31, 2015, the Company had granted 22,400 options on May 23, 2014 to eligible employees of the Company in terms of ESOP Plan 2007 out of the outstanding Stock options of 60,45,000 options with Patel Engineering Employee Welfare Trust. The vesting of the Stock Options was on May 24, 2015 ie one year period from the date of grant. The said Options was to be exercised within 2 months from the date of vesting which was further extended by the Board of Directors for another 4 months ie options to be exercised on or before November 24, 2015. No options have been exercised during the year ended March 31, 2015.

The disclosure in compliance with Regulation 14 of SEBI (Share Based Employees Benefits) Regulation, 2014 is available on company's website at the link: http://tinyurl.com/nkarjsm.

The Patel Engineering Employee welfare Trust, ("the Trust") has provided loans and grants to eligible employees for healthcare, education and other benefits. The total amount spent during the year for the welfare of the employee in form of loan is Rs. 0.55 million and grant is Rs. 0.15 million . The said benefits given to the employees are now required to be covered in the form of a scheme as required by SEBI (Share Based Employees Benefits) Regulation, 2014. As such Company proposes to introduce Patel Engineering General Employee Benefits Scheme, 2015 in terms of the SEBI's new regulation to provide welfare benefits to the employees such as medical, education related assistance and other benefits out of the income derived by the Trust. The said scheme is subject to approval of members and therefore the Board propose to place the Scheme for approval of members at the forthcoming Annual General Meeting.

General

i) There are no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the Boards' report.

ii) No orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future.

iii) The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the said Act or the details of deposits which are not in compliance with the Chapter V of the said Act is not applicable

Acknowledgements

The Board of Directors wish to place on record their appreciation for their continued support and co-operation by Shareholders, Financial Institutions, Banks, Government Authorities and other Stakeholders.

The Board of Directors also acknowledges and appreciates the support extended by all the employees of the Company and for their dedicated service.

On behalf of the Board of Directors,

Pravin Patel

Executive Chairman

(DIN:00029453)

Registered Office: Patel Estate Road,

August 14, 2015 Jogeshwari (W),

Mumbai Mumbai 400 102


Mar 31, 2014

Dear Members,

The Directors hereby present the 65th Annual Report of the Company along with the audited financial statement for the year ended March 31, 2014.

Financial Highlights

(Rs. in Million) Consolidated Standalone 2013-l4 2012-l3 2013-l4 2012-13

Total Income 38,165.10 41,966.21 28,518.67 32,111.84

Profit before depreciation & Prior period items 1,357.41 2,033.45 904.73 1,292.74

Less: Depreciation 819.77 774.61 542.29 525.48

Less : Prior Period Item* 77.67 - - -

Profit before tax 459.97 1,258.84 362.44 767.26

Tax & Minority Interest 296.28 608.81 112.46 275.07

Net Profit 163.69 650.03 249.98 492.19

Add: Opening Balance in Profit & Loss A/c 4,759.61 4,206.33 4,096.98 3,601.04

Add: Reversal of Prudent Provision for Tax ** 981.31 - 981.31 -

Amount available for appropriation 5,904.61 4,856.36 5,328.27 4,093.23

Appropriations:

a. Proposed Dividend - - - -

b. Tax on Dividend - - - -

c. General Reserve 25.50 100.50 - -

d. Debenture Redemption Reserve 108.75 (3.75) 108.75 (3.75)

Surplus carried to the Balance sheet 5,770.36 4759.61 5,219.52 4,096.98

Earnings per equity shares (face value Rs. 1)

- Basic (Rs.) 2.15 9.31 3.28 7.05

- Diluted (Rs.) 2.13 9.31 3.25 7.05

* for Prior Period Item, refer to note no. 37 of Notes to Consolidated Financial Statement.

** for Reversal of Prudent Provision for Tax refer to note no. 25(ii) of Notes to Standalone Financial Statement.

Consolidated

The Consolidated total income which stood at Rs. 38,165.10 Million lower by 9.06 % as against Rs. 41,966.21 Million for the previous year. The profit before depreciation was lower by 33.25% at Rs. 1,357.41 Million as against Rs. 2033.45 Million for the previous year. The net profit was lower by 74.82 % at Rs. 163.69 Million as against Rs. 650.03 Million for the previous year.

Standalone

On Standalone basis, the total income was lower at Rs. 28,518.67 Million as against Rs. 32,111.84 Million for the previous year. The profit before depreciation was lower by 30.00 % at Rs. 904.73 Million as against Rs. 1,292.74 Million for the previous year. The net profit was lower by 49.21% at Rs. 249.98 Million as against Rs. 492.19 Million for the previous year. Members are requested to refer to “Management Discussion and Analysis” forming part of this Report for further details on operations of the Company.

Dividend

To conserve funds, the Board of Directors has not recommended any dividend for the financial year 2013-14.

Increase in borrowing powers and borrowings

Pursuant to Section 180(1)(c) of the Companies Act, 2013, members at the Extra Ordinary General Meeting of March 19, 2014 approved increase in the borrowing powers of the Board of Directors of the Company from Rs. 50 billion to Rs. 75 billion, to meet Company’s growing business needs.

During FY 2014, the Company has Rs. 4,500 Million outstanding NCDs repayable over period of 3 to 10 years. The NCDs are listed on National Stock Exchange of India Ltd. In addition, the Company from time to time has raised money through bank borrowings (long and short terms) and the total amount outstanding as on March 31, 2014 is Rs. 34,713 Million.

The credit ratings from Credit Analysis & Research Ltd are CARE A3 and CARE BBB for short term and long term borrowings respectively.

Key Subsidiary/Associate updates

The Company is developing the real estate projects through a wholly owned subsidiary Patel Realty India Ltd (PRIL) and its subsidiaries which exclusively focus on the real estate business of the company. Some of the projects which have been launched by PRIL include:

- Development of integrated township named as Neotown on 103 acres in Bangalore. The subsidiary is currently developing residential project (over 24 acres of land consisting of over 2,300 apartments) and a Mall (over 12 acres of land comprising of 2 Million sq. ft. of built up area). The subsidiary has successfully handover about 1,250 apartments of the aforesaid development.

- Development of Residential Project at Gachibowli, Hyderabad named as Smondo Gachibowli on 4 acres of land consisting of about 525 apartment being developed by PBSR Developers Pvt. Ltd (100% subsidiary of PRIL). The Project has commenced construction activity.

- Company''s Mauritius subsidiary Les Salines Development Ltd is developing integrated waterfront development namely Noetown Port Louis is in advance stage of developing all the requisite infrastructure at site and the process of obtaining the statutory approval for construction is under progress.

Pan Oasis - Noida, residential project of approx 3 Million sq. ft is being developed by PAN Realtors Pvt Ltd, a 51% subsidiary of the Company. The project is presently in a advanced stage of completion and expects handover of possession in a phased manner starting from September 2014 and completion by March 2015. Approx 83% of the area has been sold.

Michigan Engineers Pvt. Ltd (Michigan) wherein the Company has 51% stake having presence in urban infrastructure Projects, have during FY 2013-14 captured highly specialized underwater trenching and laying of HDPE discharge pipeline of 5.4 kms including outfall for MIDC in Kundalani River, Roha, Maharashtra. Michigan has also bagged special method of pilot boring micro tunneling technique including small diameter RCC pipeline for sewage network development in Cuttack city, Odisha. The Board congratulate the CO-Chairman and Whole time director of Michigan Dr. Manubai Patel who has been recognized by Builders Association of India (BAI) by "Navratna of Indian construction Industry" award. Dr. Manubhai is the first recipient of such award initiated by BAI.

The Company has forayed into the power generation segment through its wholly owned subsidiary Patel Energy Resources Ltd (PERL). The Company intended to build a thermal coastal power plant project of 1,050 MW at Nagapattinam, Tamil Nadu. Pending clarity on the policy and regulations on the imported coal and pass through of the same in power tariffs, the Company has kept the project currently on hold.

Company''s Hydro power project is through the 100% subsidiary Dirang Energy Pvt. Ltd. The said subsidiary has achieved financial closure for this project. The debt for the project amounting to Rs. 9.00 billion has been tied up from consortium of banks led by IDBI Bank and Axis Bank. The company is also executing a 45 MW hydro electric power project through its step down subsidiary Saskang Rong Energy Pvt. Ltd in Arunachal Pradesh. Financial closure for this project is yet to be achieved and Saskang is in discussion with REC for the same. Estimated cost for the project is Rs. 3.60 billion.

ASI Constructors Inc., the US subsidiary along with its affiliates have closed the year with revenue in excess of USD 90 Million with net profit at USD 2 Million. The Company has order backlog of around USD 75 Million.

Company''s wholly owned subsidiary Patel Engineering Lanka Pvt. Ltd. Srilanka has joint venture with Squanda Prefab World Pvt. Ltd have incorporate a Company in Colombo viz Patel Squanda Private Ltd for executing the construction of 1500 dwelling Units at Colombo under the contract signed with Urban Development Authority, Govt. of SriLanka. The project work is in progress.

Company''s joint venture (JV) with Simplex Infrastructures Ltd and BS Ltd (Raichur-Sholapur Transmission Company Ltd) for construction of 765kV S/C Quad Transmission Line from Raichur to Sholapur (approximate route Length is 208 km) on Build, Own, Operate and Maintain (BOOM) basis for a period of 35 years has been successfully commissioned in June 2014. Company''s share in the JV is 33.34% with the other two JV partners share being 33.33% each.

The Company along with other JV partners had bagged a BOT project from Uttar Pradesh State Highways Authority (UPSHA) in the name of ACP Tollways Pvt. Ltd for construction of four-lane highway project in Varanasi- Shaktinagar Road, an entire length of 117.65 km at a project cost of Rs. 17.50 billion. Financial closure for the project has been achieved in June 2012 and the construction work started in February 2013. The SPV has so far completed around 48% of work. The balance work is in progress.

Financial Statement of Subsidiaries

The Ministry of Corporate Affairs (MCA) vide its circular No. 2/2011 dated February 8, 2011, has granted general exemption under Section 212(8) of the Companies Act, 1956,subject to certain conditions being fulfilled by the Company. As required by the circular, the Board of Directors of the Company has passed a resolution giving consent for not attaching the Balance Sheet of the subsidiary companies.

Pursuant to the said circular, a statement containing brief financial details of subsidiary companies is included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information will be made available to the members of the company on written request and also for inspection at the registered office of the Company, on any working day during business hours.

Share Capital

- Authorised Capital

During FY 2014, pursuant to Section 31 of the Companies Act, 1956 and approval of members at the general meeting dated March 19, 2014, the Authorised Share Capital of the Company of Rs.25,00,00,000 was divided into 23,00,00,000 Equity shares of Rs. 1 each aggregating to Rs.23,00,00,000 and 2,00,00,000 Redeemable Preference Shares of Rs. 1 each aggregating to ''2,00,00,000.

- Issued, Subscribed and Paid up Capital

The Promoters have infused from time to time interest free unsecured loan to the extent of '' 40.13 crores.

As a part of current borrowing arrangement with the Consoritum of Banks, the unsecured loan was required to be subordinated to the borrowing arrangement with the Consortium for the next 7 years. In order to improve the financial position of the Company, the Board proposed to issue Zero Coupon Optionally Convertible Preference Shares to the Promoters and the same was approved by the member at the EGM dated March 19, 2014.

During the year, the Company issued and allotted 69,79,131 Optional Convertible Preference Shares(OCPS) aggregating to Rs. 69,79,131 to the promoters entities with the option to convert into Equity at a price of Rs. 57.50 per shares in terms of SeEBIguidelines. The said OCPS were converted on March 31, 2014 and April 15, 2014 and the Company allotted 64,17,174 equity shares and 5,61,957 equity shares respectively to the promoter entities at a price of Rs. 57.50 per share (including premium of Rs. 56.50 per share).

Upon allotment, the Issued, Subscribed & Paid up Equity Share Capital of the Company increased from 6,98,27,151 Equity Shares of Rs. 1 each to 7,68,06,282 Equity Shares of Rs. 1 each as on April 15, 2014.

Public Deposits and Loans/Advances

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

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

Employee Stock Option Scheme (ESOP)

The disclosure in compliance with Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 is not applicable as no Stock Option has been granted, vested or exercised during FY 2013-14.

The Patel Engineering Employee Welfare Trust, ("the Trust") holds 60,45,000 shares of the Company and administers Company''s Employee Stock Option Schemes 2007 on behalf of the Company. The Trust comprising of Independent Trustees have on May 23, 2014 granted 22,400 options to 159 eligible employees of the Company and the subsidiaries as well. The said options shall be vested after completion of 1 year period from the date of grant and exercised within 2 months from the date of vesting at a exercise price of Rs. 1 per share.

During FY 2013-14, the Trust conducted wellness program for the employees of the Company which included routine health checkup, medical test for employees at registered office of the Company. The Trust also provided loans/grants to 159 eligible employees for purposes such as house repairs, children''s higher education, and serious ailments. The total amount spent during the year for the welfare of the employees is Rs. 25.91 lakhs.

Directors

During the year, Ms. Silloo Patel, Director of the Company retire by rotation at the ensuing Annual General Meeting. Ms. Silloo Patel has offered herself for re-appointment. Further, approval of Members is sought at the ensuing Annual General Meeting re-appointing Ms. Silloo Patel as Whole time Director of the Company for a period of 3 years w.e.f September 1, 2014.

The Members at the Extra Ordinary General Meeting held on March 19, 2014 appointed Mr. Ashwin Parmar as Whole time Director of the Company for a period of 3 years with effect from April 1, 2014.

In accordance with the provisions of Section 149 of the Companies Act, 2013, the Board of Directors are seeking the appointment of Mr. K. Kannan, Mr. Khizer Ahmed, Mr. S. Jambunathan and Mr. Sharad Zalawadia as Independent Directors for 5 (five) consecutive years for a term up to the conclusion of the 70th Annual General Meeting of the Company in the calendar year 2019.

The Company has received the requisite disclosures/ declarations from the said Independent Directors in terms of the applicable provision of Companies Act, 2013.

Directors'' Responsibility Statement

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

a. in the preparation of Annual Accounts, the applicable accounting standards have been followed and that there are no material departures;

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

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

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

Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 2,19,103 and Rs. 1,11,841 to IEPF, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the financial year 2005-06 and which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

The Company has also transferred a sum of Rs. 4,51,953 to IEPF, being the amount received as application money by the Company during Follow on Public Issue (FPO) in year 2006 and which remained unclaimed by the investors for a period exceeding 7 years from its due date of payment.

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

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

The information on foreign Exchange Earnings and outgo is as follows

Foreign Exchange Earned - Rs. 93.62

Million Foreign Exchange used - Rs. 121.16 Million

Particulars of Employees

The information as per Section 217(2A) of the Companies, 1956 and the Rules made there under is given in the Annexure B forming part of this Report.

Auditors

M/s. Vatsaraj & Co. Chartered Accountants, Mumbai bearing ICAI Registration No. 111327W are proposed to be appointed as Auditors of the Company, from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting of the Company.

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

Secretarial Audit Report

As a measure of good corporate governance practice, Dr. K. R. Chandatre, Practising Company Secretary was appointed to conduct the Secretarial Audit. The Secretarial Audit Report for the financial year ended March 31, 2014, is provided in the Annual report.

As stated in the Secretarial Audit Report on compliance on investment of the Company''s funds including inter corporate loans and investments and loans to others except requirement of charging interest on loans provided to its one, non-wholly owned subsidiary Terra Land Developers Pvt. Ltd. Terra is developing a real estate project in Mumbai and is in process of changing the purpose of project from commercial to residential. Pending final approvals from concerned authority for change of use, the project work in on hold. Hence the Company has waived charging of interest on amounts advance to Terra pending re-commencement of the project.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement, the report of Corporate Governance together with the Auditors'' Certificate on compliance form part of this Report.

For Disclosure in terms of Part II of Section II (A) (IV) of Schedule V of the Companies Act, 2013, refer to Corporate Governance Report forming part of the Annual Report.

Corporate Social Responsibility

Corporate Social Responsibility (CSR) has been the Company''s priority. The main focus of the Company in areas such as Education, Support for the Women,Elderly, and Children, and Social Inclusion. To support these causes the Company extended its support to Rajiv Gandhi Foundation. Some notable events organized by the Foundation include scholarship support for adolescents, girl child, and child survivors of violence and natural calamities; and a library initiative that provides learning spaces for rural and urban communities across several states in the country.

The foundation has also built extensive water harvesting structures in the dry and backward regions of Rajasthan, and supported the entrepreneurship of rural women through skill development and income generation activities.

The Board of Directors of the Company has constituted the Corporate Social Responsibility Committee comprising of

Mr. Pravin Patel as Chairman and Mr. K. Kannan and Mr. Nimish Patel as other members. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a CSR Policy indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR policy and recommending the amount to be spent on CSR activities

Acknowledgements

The Directors wish to place on record their appreciation for their continued support and co-operation by Members, Financial Institutions, Banks, Government Authorities and other Stakeholders.

The Directors also acknowledge and appreciate the support extended by all the employees of the Company for their dedicated service.

On behalf of the Board of Directors,

Mumbai Pravin Patel July 23, 2014 Executive Chairman

Registered Office:

Patel Estate Road, Jogeshwari (W), Mumbai 400 102.


Mar 31, 2013

To the Members of Patel Engineering Limited,

The Directors hereby present the 64th Annual Report of the Company along with the audited financial statements for the year ended March 31, 2013.

FINANCIAL HIGHLIGHTS

(Rs.million) Consolidated Standalone 2012-13 2011-12 2012-13 2011-12

Total Income 41,966.21 36,831.83 32,111.84 26434.75

Profit before depreciation 2,033.45 2,191.63 1,292.74 1,483.87

Less: Depreciation 774.61 892.25 525.48 528.21

Profit before tax 1,258.84 1,299.38 767.26 955.61

Tax & minority interest 608.81 633.50 275.07 351.31

Net Profit 650.03 665.88 492.19 604.30

Add: Opening Balance in Profit & Loss A/c 4,206.33 4,201.68 3,601.04 3,381.09

Amount available for appropriation 4,856.36 4,867.56 4,093.23 3,985.39

APPROPRIATIONS:

a. Proposed Dividend 20.95 20.95

b. Tax on Dividend 3.40 3.40

c. General Reserve 100.50 351.88 75.00

d. Debenture Redemption Reserve (3.75) 285.00 (3.75) 285.00

Surplus carried to the Balance sheet 4,759.61 4,206.33 4,096.98 3,676.04

Earnings per equity shares (face value Rs. 1)

Basic (Rs.) 9.31 9.54 7.05 8.65

Diluted (Rs.) 9.31 9.54 7.05 8.65

The consolidated total income which stood at Rs. 41,966.21 million grew by 14.02 % as against Rs. 36,831.83 million for the previous year. The profit before depreciation was lower by 7.22% at Rs. 2,033.45 million as against Rs. 2,191.63 million for the previous year. The net profit was lower by 2.38% at Rs. 650.03 million as against Rs. 665.88 million for the previous year.

On standalone basis, the total income was higher at Rs. 32,111.84 million as against Rs. 26,434.75 million for the previous year, thereby recording a growth of 21.47 %. The profit before depreciation was lower by 12.89% at Rs. 1,292.74 million as against Rs. 1,483.87 million for the previous year. The net profit was lower by 18.55% at Rs. 492.19 million as against Rs. 604.31 million for the previous year.

Members are requested to refer to "Management Discussion and Analysis" forming part of this Report for further details concerning the operations of the Company.

DIVIDEND

To conserve funds, the Board of Directors has not recommended any dividend for the financial year 2012-13.

PUBLIC DEPOSITS

The Company has not accepted any public deposits.

FINANCE

During the year under review, Company issued 11.30% Non Convertible Redeemable Secured Debentures (NCD) aggregating Rs. 1,500 million on private placement basis.

The Company has Rs. 5,450 million outstanding NCDs repayable over period of 3 to 10 years. The NCDs are listed on National Stock Exchange of India Limited.

The Company had raised money through bank borrowings (long and short terms) from time to time, and the total amount outstanding as on March 31, 2013 is Rs. 27,353.52 million.

The credit ratings from Credit Analysis & Research Ltd are CARE Al and CARE A for short term and long term borrowings respectively.

AUDITORS'' REPORT

With respect to point no. IX of the Annexure to Auditors'' Report pertaining to delay in payment of statutory dues amounting to Rs. 86.78 million, the members are requested to refer to note no. 26 of Notes to standalone Financial Statement for the year ended March 31, 2013.

SUBSIDIARIES

As on March 31, 2013, the Company had 87 subsidiaries.

The following companies became subsidiary/step down subsidiary companies during the year 2012- 2013.

No Name of Subsidiary Date of % of Description

becoming holding

subsidiary

1 PBSR Developers Pvt. Ltd, March 30, 2013 100 Acquired as a subsidiary of Patel Realty Hyderabad, Andhra Pradesh. (India) Ltd (PRIL).

The Company holds 100% stake in PRIL.

2 Capacite Infraprojects Pvt. Ltd, November 6, 51 Acquired as a subsidiary of Patel Realty Mumbai, Maharashtra. 2012 (India) Ltd (PRIL).

The Company holds 100% stake in PRIL.

3 Capacite Engineering Pvt. Ltd, November 12, 61.90 Acquired as a subsidiary of Capacite Mumbai, Maharashtra. 2012 Infraprojects Pvt. Ltd. (CIPL).

Patel Realty (India) Ltd (PRIL) holds 51%

stake in CIPL.

The Company holds 100% stake in PRIL.

4 Nirmal Capacite Construction November 6, 74 Incorporated on June 11, 2012, as a Pvt. Ltd, Mumbai, Maharashtra. 2012 subsidiary of Capacite Infraprojects Pvt.

Ltd. (CIPL).

Patel Realty (India) Ltd (PRIL) holds 51% stake in CIPL, w.e.f November 6, 2012.

The Company holds 100% stake in PRIL.

5 Saskang Rong Energy Pvt. Ltd., July 27, 2012 100 Acquired as a subsidiary of Patel Hydro Mumbai, Maharashtra. Power Pvt. Ltd. (PHPPL).

Patel Energy Resources Ltd.(PERL) holds 100% stake in PHPPL.

The Company holds 100% stake in PERL.

6 Patel Urjaa Vyapaar Pvt. Ltd, June 26, 2012 100 Incorporated as a subsidiary of Patel Energy Noida, Uttar Pradesh. Resources Ltd.(PERL). The Company holds

100% stake in PERL.

The following Companies ceased to be subsidiary/step down subsidiary of the Company during the year 2012-13

No Name of Subsidiary Date of ceasing to % of holding Description

be subsidiary

1 Shreeanant Construction Pvt. Ltd, March 12, 2013 49 Ceased to be a subsidiary of the Mumbai, Maharashtra. Company.

2 Patel Energy Trading Pvt. Ltd, Mumbai, March 28, 2013 100 Ceased to be a subsidiary of Patel Maharashtra. Energy Resources Ltd (PERL).

(Under process of strike off from Register of Companies.) The Company holds 100% stake in PERL.

The Ministry of Corporate Affairs (MCA) vide its circular No. 2/2011 dated February 8, 2011, has granted general exemption under Section 212(8) of the Companies Act, 1956,subject to certain conditions being fulfilled by the Company. As required by the circular, the Board of Directors of the Company has passed a resolution giving consent for not attaching the Balance Sheet of the subsidiary companies.

Pursuant to the said circular, a statement containing brief financial details of subsidiary companies is included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information will be made available to the members of the Company on written request and is also available for inspection at the registered office of the Company, on any working day during business hours.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company pursuant to Clause 32 of the Listing Agreement entered into with Stock Exchanges is attached and prepared in accordance with Accounting Standards prescribed by Institute of Chartered Accountants of India.

DIRECTORS

During the year under review, Mr. Pravin Patel and Mr. Bhaskar Mehta, Directors of the Company retire by rotation at the ensuing Annual General Meeting.

Mr. Pravin Patel has offered himself for re-appointment. The Board in the interest of the Company recommended appointment of Mr. Pravin Patel as a Whole-time Director (Executive Chairman), subject to the approval of members at the ensuing Annual General Meeting.

Mr. Bhaskar Mehta has expressed the desire to retire at the ensuing Annual General Meeting. The Board places on record its sincere appreciation of the services rendered by Mr. Mehta.

Mr. Sharad Zalawadia was appointed as an Additional Director with effect from August 14, 2013. Mr. Zalawadia holds offce up to the date of the ensuing Annual General Meeting and is eligible for appointment.

The notice convening the Annual General Meeting includes the proposal for the above.

As a good governance principle, Mr. Rupen Patel, Managing Director, Ms. Silloo Patel and Mr. Nimish Patel, Whole-time Directors of the Company have decided not to avail any increment in remuneration for the fnancial year 2013-14.

EMPLOYEES STOCk OPTION

The disclosure in compliance with Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 is not applicable as no Stock Options has been granted, vested or exercised during the year 2012-13.

The Patel Engineering Employees Welfare Trust, ("the Trust") holds 60,45,000 shares of the Company and issues stock options to employees on behalf of the Company.

In addition to this, the Trust conducted various programs for the welfare of the employees of the Company viz. physical training and yoga at head offce, routine health check up for employees beneftting about 865 employees. The Trust installed Reverse Osmosis Plants at Tuirial site in Mizoram to provide safe drinking water for employees and their family members residing at the site, improved hygienic conditions of kitchen and mess area at Tuirial site.The Trust also provided loans/grants to employees for purposes such as house repairs, children''s higher education, and serious ailments. The total amount spent during the year for the welfare of the employees is Rs. 35.50 lacs.

The Trustees are in the process of formulating further scheme under ESOP for the beneft of eligible employees of the Company and the subsidiaries as well

AUDITORS

M/s. Vatsaraj & Co., Chartered Accountants (FRN no. 111327W), who are the statutory auditors of the Company, hold offce, in accordance with the provisions of the Act up to the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment.

CONSERvATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN ExCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1)(e) of the Act, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in Annexure A to this report.

The information on foreign Exchange Earnings and outgo is as follows:

Foreign Exchange Earned - Rs. 156.99 million.

Foreign Exchange used - Rs. 138.89 million.

PARTICULARS OF EMPLOYEES

The information as per Section 217(2A) of the Companies Act, 1956 and the Rules made there under, is provided in Annexure B forming part of this report.

SECRETARIAL AUDIT REPORT

As a measure of good governance practice, the Company has appointed Dr. K. R. Chandratre, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit Report for the fnancial year ended March 31, 2013 form part of this report.

CORPORATE GOvERNANCE

Pursuant to Clause 49 of the Listing Agreement, the report of Corporate Governance together with the Auditors'' Certifcate on compliance form part of this report.

CORPORATE SOCIAL RESPONSIBILITY

In addition to the regular ongoing charitable donations as the need arises, the Company focus on three main key areas to make a positive impact on the communities through the support of select programs, outreach efforts and initiatives that improve and enhance the quality of life. This year the Company selected the following three key areas: Education, Support for the Women, Elderly, and Children, and fnally Social Inclusion.

To support these causes the Company extended its support to Magic Bus, Kripa foundation and St. Catherine''s Home. Magic Bus is a non-proft organization that works towards creating equal opportunities for children and youth from vulnerable sectors of the society. Over the past 12 years, Magic Bus has used its unique "sport for development" approach to empower children and youth in making effective life choices in the areas of education, livelihood and leadership, health, and gender equality. Kripa foundation is a Non–Governmental Organization affliated with the Union Ministry of Social Justice & Empowerment, working among people afficted with chemical dependency & HIV Infection. St. Catherine''s Home provides a home to helpless, abandoned / relinquished babies, toddlers, orphans, children with HIV; girls are placed with the home for protection from abuse, children from abusive unsafe life situations, abused minor girls, unmarried mothers and adivasi girls. Presently there are around 400 residents. The home provides education, rehabilitation and training for young girls to be confdent, qualifed, responsible, value based citizens of our country.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with regard to Directors'' Responsibility Statement, the Board of Directors confrms that :- a. In the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures.

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

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

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

ACkNOwLEDGEMENTS

The Directors wish to place on record their appreciation for their continued support and co-operation by Shareholders, Financial Institutions, Banks, Government Authorities and other Stakeholders.

The Directors also acknowledge and appreciate the support extended by all the employees of the Company for their dedicated services.

On behalf of the Board of Directors, Mumbai Pravin Patel

August 14, 2013 Chairman


Mar 31, 2012

To the Members of Patel Engineering Ltd.,

The Directors hereby present the 63rd Annual Report of the Company along with the audited financial statements for the year ended March 31, 2012.

FINANCIAL HIGHLIGHTS

(Rs. in millions)

Consolidated Standalone

2011-12 2010-11 2011-12 2010-11

Total Income 36,831.83 35,648.24 26,434.75 26,177.26

Profit before depreciation 2,191.63 2,667.58 1,483.87 1,882.91

Less: Depreciation 892.25 820.41 528.21 527.76

Profit before tax 1,299.38 1,847.17 955.61 1,355.15

Tax & other adjustments 633.50 621.12 351.31 333.04

Net Profit 665.88 1,226.05 604.31 1,022.11

Add: Opening Balance in Profit & Loss A/c 4,201.68 3,442.29 3,381.09 2,800.14

Amount available for appropriation 4,867.56 4,668.34 3,985.39 3,822.25

APPROPRIATIONS:

a. Proposed Dividend 20.95 69.83 20.95 69.83

b. Tax on Dividend 3.40 11.33 3.40 11.33

c. General Reserve 351.88 175.50 75.00 150.00

d. Debenture Redemption Reserve 285.00 210.00 285.00 210.00

Surplus carried to the Balance sheet 4,206.33 4,201.68 3,676.04 3,381.09

Earnings per equity share (face value Rs. 1)

Basic (Rs. ) 9.54 17.56 8.65 14.64

Diluted (Rs.) 9.54 17.56 8.65 14.64

The Consolidated Total Income which stood at Rs. 36,831.83 million grew by 3.32 % as against Rs. 35,648.24 million for the previous year. The Profit before Depreciation was lower at Rs. 2,191.63 million as against Rs. 2,667.58 million for the previous year. The Net Profit is Rs. 665.88 million, as against Rs. 1,226.05 million for the previous year.

On Standalone Basis, the Company reported a Profit after Tax of Rs. 604.31 million, as against Rs. 1022.10 million for the previous year. The Profit before Depreciation was lower at Rs. 1,483.87 million as against Rs. 1,882.91 million for the previous year. The Total Income was higher at Rs. 26,434.75 million as against Rs. 26,177.26 million for the previous year, thereby recording a growth of 0.98%.

Members are requested to refer to "Management Discussion and Analysis" forming part of this Report for further details on operations of the Company.

DIVIDEND

During the year under review, the Directors have recommended a final dividend of Rs. 0.30 per share (on face value of Rs. 1 each) aggregating to Rs. 24.35 million (including dividend tax).

The payment of the final dividend is subject to approval of members to be obtained at the ensuring Annual General Meeting and shall be paid to those members whose name appear in the register of members as on the book closure date. The Register of Members and share transfer book will remain closed from October 4, 2012 to October 12, 2012, both days inclusive.

SHARE CAPITAL

Pursuant to the approval of the members obtained at the 62nd Annual General Meeting of the Company held on October 17, 2011, the authorized capital of the Company stands increased from Rs. 15 crores to Rs. 25 crores. There is no change in the paid up capital.

PUBLIC DEPOSITS

The Company has not accepted any public deposits during the year under review.

FINANCE

During the year under review, Company issued 11.40% Non Convertible Redeemable Secured Debentures (NCD) aggregating Rs. 1500 million on private placement basis.

9.5% NCD of Rs. 1050 million was redeemed on June 1, 2012 and payments were made to the beneficiary owners on due date.

The Company has Rs. 3950 million outstanding NCDs repayable over period of 3 to 5 years. The NCDs are listed on National Stock Exchange of India Limited.

The Company had raised money through bank borrowings (long and short terms) from time to time and the total amount outstanding as on March 31, 2012 is Rs. 20,797.99 milion, within the limit of Rs. 50,000 milion approved by the members of the Company vide resolution dated September 29, 2005.

The company has obtained credit rating of CARE A1 and CARE A for short term and long term borrowings respectively.

SUBSIDIARIES

As on March 31, 2012, the Company has 83 subsidiaries.

The following Companies became subsidiary during the year 2011- 2012.

No. Name of subsidiary Date of becoming % of Description subsidiary holding

DIRECT

1 Patel Engineering Lanka Pvt. 16.01.2012 100 Incorporated as a Wholly owned Subsidiary of the Company in Ltd., Srilanka Srilanka.

STEP DOWN

2 PT Surya Geo Minerals, 23.05.2011 60 Acquired as a subsidiary of Patel Surya (Singapore) Pte Ltd. Indonesia Patel Engineering Singapore Pte. Ltd. (PESPL) holds 60% in Patel Surya (Singapore) Pte Ltd.; the Company holds 100% in PESPL)

3 PT Patel Engineering 23.05.2011 100 Acquired as a subsidiary of PT PEL Mineral Resources. Indonesia, Indonesia Patel Engineering Singapore Pte. Ltd. (PESPL) holds 100% in PT PEL Mineral Resources; the Company holds 100% in PESPL.

4 PT Surpat Geo Minerals, 07.04.2011 60 Acquired as a subsidiary of Patel Param Natural Resources Pte Indonesia Ltd.Patel Engineering Singapore Pte. Ltd (PESPL) holds 60% in Patel Param Natural Resources Pte Ltd.; the Company holds 100% in PESPL)

5 Patel Energy Trading Pvt. 01.04.2011 100 Acquired as a subsidiary of Patel Hydro Power Pvt. Ltd. Ltd., India (PHPPL). Patel Energy Resources Ltd.(PERL) holds 100% stake in PHPPL; the Company holds 100% stake in PERL]

The following Companies ceased to be step-down subsidiaries of the Company during the year 2011-2012:

No. Name of Subsidiary Date of ceasing to be % of holding Description a subsidiary

1 Shree Balaji Power Services Pvt. Ltd. 09.11.2011 80 Ceased to be subsidiary of Patel Energy Resources Ltd.

2 Terminus Realcon Pvt. Ltd. 01.12.2011* 100 Ceased to be subsidiary of Patel Realty (India) Ltd.

3 Ares Infra developers Pvt. Ltd. 01.12.2011* 100 Ceased to be subsidiary of Patel Realty (India) Ltd.

*date of struck off from Registrar of Companies: 30.04.2012

In terms of the General Circular No. 2/2011 dated February 8, 2011 issued by the Central Government under Section 212 of the Companies Act, 1956, the Board of Directors of the Company has accorded their consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company.

Pursuant to the said circular, a statement containing brief financial details of subsidiaries is included in this Annual Report.

The annual accounts of the subsidiary companies and the related detailed information will be made available to the members of the Company on request and also for inspection at the registered office of the Company.

The Consolidated Financial Statements of the Company have been prepared in accordance with the Accounting Standards AS- 21, AS-23 and AS-27 of the Institute of Chartered Accountants of India.

DIRECTORS

In accordance with the requirement of the Companies Act, 1956, Mr. K. Kannan and Mr. P.C. Purohit, Directors of the Company retire by rotation at the ensuing Annual General Meeting.

Mr. Kannan has offered himself for re-appointment.

Mr. P. C. Purohit has expressed his desire to retire at the ensuing Annual General Meeting. The Board places on record its sincere appreciation of the service rendered by Mr. Purohit during the tenure of directorship.

EMPLOYEES STOCK OPTION

In terms of Patel Engineering ESOP Plan 2007 and SEBI ESOP Guidelines, the terms and conditions of the vesting can be altered by the Trustees of Patel Engineering Employees Welfare Trust, ("the Trust"). As such, the Trust approved pre-poning the vesting of shares under ESOP Plan 2007 from October 1, 2011 to April 1, 2011. During the year under review, 1,10,000 Stock Options were vested to the eligible employees / Directors of the Company on April 1, 2011 and the same was exercised by the said employees / Directors on April 4, 2011.

Details of the Stock Option under ESOP Plan 2007 are disclosed in compliance with Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 and set out in annexure A to this report.

The Patel Engineering Employees Welfare Trust, ("the Trust") holds and issues stock options to employees on behalf of the Company. In addition to this, the Trust conducted various programs for the welfare of the employees of the Company viz physical training, yoga, seminars on heart ailments, routine health check up for employees at head office benefitting about 100 employees. The Trust installed Reverse Osmosis plants at three sites to provide clean drinking water for employees and their family members residing at sites, improved hygienic conditions of kitchen and mess area at sites, set up of educational facilities to wards of employees at a site. The Trust also provided loans / grants to employees for purposes such as house repairs, children's higher education, serious ailments. The total amount spent during the year for the welfare of the employees is Rs. 16,32,080.

The present Trustees are in the process of formulating further scheme under ESOP for the benefit of eligible employees of the Company and the subsidiaries as well.

AUDITORS

M/s. Vatsaraj & Co. Chartered Accountants, who are the statutory auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming Annual General Meeting and are eligible for re- appointment.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN ExCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 217(1) (e) of the Act, read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are set out in annexure B to this report.

PARTICULARS OF EMPLOYEES

The information as per Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder, is provided in annexure C forming part of this report.

SECRETARIAL AUDIT REPORT

As a measure of good governance practice, the Company has appointed Dr. K. R. Chandratre, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended March 31, 2012 form part of this report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the report of Corporate Governance together with the Auditor's Certificate on compliance form part of this report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR is bolted into the Company. The Company's rigorous and deliberate engagement with humanitarian and charitable causes is almost a defining feature of the Company. The Company focuses on areas where difference can be made through broader influence in society. The idea is not only to support the organizations but partner with them. The support efforts extended to St. Jude India Child Care Centers, Gurukul Trust, and other educational trusts. In the current year in addition to supporting the various organizations and causes in areas of need, we have designed a program titled "Hold More Hands". The focus of this program is Children and the Aged; to support and engage through active employee participation and Community Partnering Programs. The Company is very excited about this program.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with regard to Directors' Responsibility Statement, the Board of Directors confirms that:-

a. In the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures.

b. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit and loss account of the Company for the year ended on that date.

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

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

EQUITY SHARES IN THE SUSPENSE ACCOUNT

As per clause 5A of the Listing Agreement, the Company reports the following details on claim / unclaimed shares during the year 11-12 relating to follow on Public Offer (FPO) of 2006:

Particulars

1 Aggregate no. of shareholders at the beginning of 58 the year

2 Outstanding shares in the suspense account lying 1305 at the beginning of the year

3 No. of shareholders who approached the company 0 for transfer of shares from suspense account during the year;

4 No. of shareholders to whom shares were 0 transferred from the suspense account during the year

5 Aggregate no. of shareholders at the end of the 58 year

6 Outstanding shares in the suspense account at the 1305 end of the year

The voting rights on the outstanding shares shall remain frozen till the rightful owner of such shares claims the shares.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for their continued support and co-operation by Shareholders, Financial Institutions, Banks, Government authorities and other stakeholders.

The Directors also acknowledge and appreciate the support extended by all the employees for their dedicated service.

On behalf of the Board of Directors,

Mumbai Pravin Patel

September 4, 2012 Chairman


Mar 31, 2011

The Members of Patel Engineering Ltd,

The Directors are pleased to present the 62nd Annual Report together with the Audited Accounts for the year ended March 31, 2011.

FINANCIAL HIGHLIGHTS

(Rsin million)

Consolidated Standalone 2010-11 2009-10 2010-11 2009-10

Total Income 34,988.84 32,539.45 25,446.99 24,350.15

Profit before depreciation 2,667.58 4,140.06 1,884.39 2,520.07

Less: Depreciation 820.41 1,090.16 527.76 501.73

Profit before tax 1,847.17 3,049.90 1,356.63 2,018.34

Tax & other adjustments 621.12 1,068.29 334.53 709.80

Profit after tax 1,226.05 1,981.61 1,022.10 1,308.54

Add: Balance in Profit & Loss A/c 3,442.29 3,846.96 2,800.14 3,825.53

Amount available for appropriation 4,668.34 5,828.57 3,822.24 5,134.07

APPROPRIATION:

a. Interim Dividend _ 140.09 - 140.09

b. Final Dividend 69.83 - 69.83 -

c. Tax on Dividend 11.33 23.73 11.33 23.73

d. General Reserve 175.50 125.50 150.00 100.00

e. Debenture Redemption Reserve 210.00 135.00 210.00 135.00

Balance carried forward 4,201.68 3,892.56 3,381.08 3,250.14

OPERATIONAL HIGHLIGHTS

The turnover of the Company for the year ended March 31, 2011 on consolidated basis stood at Rs 34759.09 as against Rs 31,909.33 million for the previous year ended March 31, 2010, thereby recording a growth of 8.93%. The operating profit for the year is Rs 4,619.75 million as compared to Rs 5,085.64 million for the previous year. The Profit after tax is Rs 1226.05 million as compared to Rs 1,981.61 million for the previous year.

On standalone basis, the turnover of the Company stood at Rs 25,194.31 million for the year ended March 31, 2011 as against Rs 24,098.92 million for the previous year ended March 31, 2010, thereby recording a growth of 4.55%. The operating profit for the year is Rs 3,548.89 million as compared to Rs 3,798.07 million for the previous year. The Profit after tax is Rs 1022.10 million as compared to Rs 1,308.54 million for the previous year.

Rising Interest rate and increase in borrowing has led to higher interest cost and hence reduction in profit.

Members are requested to refer to "Management Discussion and Analysis" forming part of the Annual Report for further details on operations of the Company.

DIVIDEND

During the year under review, the Directors have recommended a dividend of Rs 1/- per Equity Shares (100%), aggregating to Rs 81.1 million (including dividend tax).

The payment of the aforesaid dividend is subject to approval of Members to be obtained at the ensuing

Annual General Meeting and shall be paid to those members whose name appear in the register of members as on the book closure date.

The Register of members and share transfer book will remain closed from October 11, 2011 to October 17, 2011.

PUBLIC DEPOSITS

The Company did not invite or accept deposits from public during the year under review.

FINANCE

During the year, the Company tied up Long terms debt (5 years) by way of issue of Non Convertible Redeemable

Secured Debentures on private placement basis for Rs 1000 million and Rs 500 million, carrying an interest rate of 9.55% and 10.75% respectively. The total amount of outstanding Non Convertible Redeemable Secured Debentures as on date is Rs 5000 million repayable over period of 3 to 5 years.

The Company has raised money through bank borrowings (long and short terms) from time to time and the total amount outstanding as on March 31, 2011 is Rs 18,957.21 million. The borrowings are within the limit of Rs 50,000 million approved by the Members of the Company vide resolution dated September 29, 2005.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Company has 15 direct subsidiaries and 66 step-down subsidiaries totaling to 81 subsidiaries as on March 31, 2011. The following Companies became subsidiaries during the year 2010- 2011.

No. Name of Subsidiary Date of % of Remarks becoming holding subsidiary

DIRECT SUBSIDIARIES

1 Patel Lands Ltd, India 25.08.2010 60%

STEP DOWN SUBSIDIARIES

2 Mineral Resources Holding 27.07.2010 100% Incorporated as subsidiary of Patel Param Minerals Pte Ltd, Ltd, UAE (Patel Engineering Singapore Pte.Ltd (PESPL) holds 60% in Patel Param Minerals Pte Ltd Company holds 100% in PESPL).

3 HCPInc, USA 01.10.2010 100% Acquired as a subsidiary of ASI Inc, USA (Company holds 66.46% stake in ASI Inc).

4 Eng & Const Inc, USA 01.10.2010 100% Acquired as a subsidiary of ASI Inc, USA (Company holds 66.46% stake in ASI Inc).

5 Patel Hydro Power Pvt Ltd, 29.11.2010 100% Incorporated as subsidiary of Patel Energy Resources Ltd India (Company holds 100% stake in Patel Energy Resources Ltd).

6 Jayshe Gas Power Pvt Ltd, 24.12.2010 100% Incorporated as subsidiary of Patel Energy Resources Ltd India (Company holds 100% stake in Patel Energy Resources Ltd).

7 Patel Thermal Energy Pvt 18.02.2011 100% Incorporated as subsidiary of Patel Energy Resources Ltd, India Ltd (Company holds 100% stake in Patel Energy Resources Ltd).

In terms of the General Circular No. 2/2011 dated February 8, 2011 issued by the Central Government under Section 212 of the Companies Act, 1956, the Board of Directors of the Company has accorded their consent for not attaching the balance sheet of the subsidiaries with the accounts of the Company. Pursuant to the said circular, a statement containing brief financial details of Subsidiaries is included in this Annual Report. The annual accounts of the subsidiary companies and the related detailed information will be made available to the members of the company on request and also for inspection at the registered office of the Company.

The Consolidated Financial Statements of the Company have been prepared in accordance with the Accounting Standards AS-21, AS-23 and AS-27 of the Institute of Chartered Accountants of India.

DIRECTORS

In accordance with the provisions of the Companies Act, 1956, Mr. Khizer Ahmed and Mr. Jambunathan, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for re-appointment.

Ms. Sonal Patel, Mr. Ajay Tuli and Mr. Danish Merchant resigned from the Board of the Company w.e.f March 16, 2011, March 28, 2011 and September 2, 2011 respectively. The Board wishes to place on record its appreciation for the valuable contribution made by Ms. Sonal Patel, Mr. Ajay Tuli and Mr. Danish Merchant during their tenure as a member of the Board.

EMPLOYEES STOCK OPTION

During the year under review, out of 90,000 Stock Options vested to the eligible employees/Directors of the Company on August 31, 2010, 82,500 options were vested and exercised.

Details of the stock option under ESOP plan 2007 are disclosed in complience with Clause 12 of the SEBI (Employee Stock Option Scheme & Employee Stock Purchase Scheme) Guidelines, 1999 & set out in Annexure 'A' of this report.

The Patel Engineering Employees Welfare Trust, ("the Trust") holds and issues stock options to employees on behalf of the Company.

In addition to this, the Trust conducted various programs for the welfare of the employees of the Company viz seminar on cancer awareness, heart ailments, comprehensive free health check up for employees. These programs benefited about 600 employees at various offices/sites. The Trust also provided loans/ grants to employees for purposes such as house repairs, children's higher education, serious ailments. The Trust has also organized social events viz craft and painting competition for the children of employees. The Trust proposes to continue such activities at an enlarged scale. The total amount spent during the year for the welfare of the employees is Rs 27,50,354.

The present Trustees are in the process of formulating further scheme under ESOP for the benefit of eligible employees of the company and the subsidiaries as well.

AUDITORS

M/s. Vatsaraj & Co. Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The members are requested to consider their appointment and authorize the Board of Directors to fix their remuneration. The retiring auditors have, under Section 224(1B) of the Companies Act, 1956, furnished certificates of their eligibility for the appointment.

PARTICULARS OF EMPLOYEES

The information as per Section 217(2A) of the Companies, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended forms part of this Report and is set out in Annexure 'C of this report.

SECRETARIAL AUDIT REPORT

As a measure of good governance practice, the Company has appointed Dr. K. R. Chandratre, Practicing Company Secretary, to conduct Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended March 31, 2011 forms part of this Annual Report.

CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, the report of Corporate Governance together with the Auditors' Certificate on compliance form part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility has been the company's priority. The Company donated to social care centers and its contribution to social activities, awareness campaign, education and cultural events and sport activities viz Childlink India Foundation, Yashwantrao Chavan Shikshan Prasarak Mandal, Kamakhya Education Society, Maruti Education Trust, Universal Sports & Art Foundation, ISKCON etc.

DONATIONS

The donations made by the Company during 2010 -11 is Rs 55.83 million which is within the limit Rs 100 million approved by the Members of the Company vide meeting dated July 31, 2009.

During the year under review, the Company made political donation of an amount of Rs 0.2 million.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with regard to Directors' Responsibility Statement, the Board of Directors confirms that:-

a. In the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures.

b. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2011 and of the profit and loss account of the Company for the year ended on that date.

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

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

EQUITY SHARES IN THE SUSPENSE ACCOUNT

As per clause 5A of the Listing Agreement, the Company reports the following details on claim/unclaimed shares during the year 10-11 relating to Follow on Public Issue (FPO) of 2006:

Particulars

1. Aggregate number of shareholders at the 59 beginning of the year

2. Outstanding shares in the suspense account 1327 lying at the beginning of the year

3. No of shareholders who approached the 1 company for transfer of shares from suspense account during the year

4. Number of shareholders to whom shares 1 were transferred from the suspense account during the year

5. Aggregate number of shareholders at the 58 end of the year

6. Outstanding shares in the suspense account 1305 at the end of the year

The voting rights on the outstanding shares shall remain frozen till the rightful owner of such shares claims the shares.

ACKNOWLEDGEMENTS

The Directors wish to place on record their appreciation for their continued support and co-operation by Shareholders, Financial Institutions, Banks, Government authorities and other stakeholders.

Your Directors also acknowledge and appreciate the support extended by all the employees for their dedicated service.

On behalf of the Board of Directors,

Pravin Patel Chairman

September 10, 2011


Mar 31, 2010

The Directors are pleased to present the 61st Annual Report together with the Audited Accounts for the year ended March 31, 2010.

Financial Highlights

(Rs. in million)

Consolidated Standalone

2009-10 2008-09 2009-10 2008-09

Total Income 32,539.45 24,743.04 24,350.15 17,963.22

Profit before depreciation 4,140.06 3,565.91 2,520.07 2,417.11

Less: Depreciation 1,090.16 1,195.61 501.73 440.72

Profit before tax 3,049.90 2,370.30 2,018.34 1,976.39

Tax & other adjustments 1,068.29 (a) 565.52 709.80 (b) 233.02

Net Profit 1,981.61 1,804.78 1,308.54 1,743.37

Add: Balance in Profit & Loss A/c 3,846.96 2,389.83 3,825.53 2,404.31

Less: Provision for tax of earlier years 1,511.69 - 1,485.11 -

Amount available for appropriation 4,316.88 4,194.61 3,648.96 4,147.68

Appropriation:

a. Interim Dividend 140.09 47.73 140.09 47.73

b. Final Dividend - 56.68 - 56.68

c. Tax on Dividend 23.73 17.74 23.73 17.74

d. General Reserve 125.50 225.50 100.00 200.00

e. Debenture Redemption Reserve 135.00 - 135.00 -

Balance carried forward 3,892.56 3,846.96 3,250.14 3,825.53

(a) Previous year tax would have been Rs. 877.53 million on account of amendment to Section 80IA by Finance Act, 2009.

(b) Previous year tax would have been Rs. 671.77 million on account of amendment to Section 80IA by Finance Act, 2009.

Operational Highlights

The turnover of the Company for the year ended March 31, 2010 on consolidated basis stood at Rs. 32,539.45 million as against Rs. 24,743.04 million for the previous year ended March 31, 2009, thereby recording a growth of 31.51 %. The EBDITA (excluding other income) for the year is Rs. 5,086.64 million as compared to Rs. 3,896.53 million for the previous year. The Net Profit is Rs. 1,981.61 million as compared to Rs. 1,804.78 million for the previous year.

On standalone basis, the turnover of the Company stood at Rs. 24,350.15 million for the year ended March 31, 2010 as against Rs. 17,963.22 million for the previous year ended March 31, 2009, thereby recording a growth of 35.55%. The EBDITA (excluding other income) for the year is Rs. 3,798.07 million as compared to Rs. 2,641.52 million for the previous year. The Net Profit is Rs. 1,308.54 million as compared to Rs. 1,743.37 million for the previous year.

The order book position of the Company as on March 31, 2010 was approx Rs. 1,00,000 million.

Dividend

During the year under review, the Directors have declared interim dividend of Rs. 2 per share (200%) on the equity shares of the Company aggregating to Rs. 163.38 million (including dividend tax) and the same was paid. The interim dividend declared be treated as dividend for the year 2009-10.

Deposits

The Company has not invited or accepted deposit.

Share capital

During the year, the Company issued 7,218,061 equity shares of Re.1 each to Qualified Institutional Buyers at a price of Rs.477.03 per share (including a premium of Rs. 476.03 per share) fully paid up aggregating to Rs. 3,443.23 million.

The Company further issued 29,50,000 fully paid up equity shares of Re.1 each to Patel Engineering

Employees Welfare Trust (ESOP) at a price of Re.1 per share, a trust operated by trustees (majority trustees being Independent directors of the company) to decide on grants of options to employees of the company and conduct various employee welfare programs, Consequent to the issue of additional shares, the paid up equity share capital of the company stands increased to Rs. 69,827,151 consisting of 69,827,151 equity shares of Re. 1 each. the related detailed information will be made available to the members of the company seeking such information.

Debentures

During the year, the Company has raised long term loans in the form of 9.50% and 9.80%, Non- Convertible Redeemable Secured Debentures for Rs. 1050 million and Rs. 950 million respectively.

The said Debentures are listed and traded at NSE.

Subsidiary Companies and Consolidated Financial Statements

The Company has 74 subsidiaries as on March 31, 2010. The following Companies became subsidiaries during the year 2009-2010.

No. Name of Subsidiary Date of % of Remarks

becoming holding

subsidiary

1 Zeus Land Projects Pvt. Ltd., India 01.04.2009 100 Acquired by the Company.

2 ASI Australia Pty. Ltd., 01.04.2009 100 Incorporated as subsidiary of Australia ASI Inc.

3 Energy Design Pvt. Ltd., India 22.06.2009 90 Incorporated by the Company

4 Shree Balaji Power Services Pvt. Ltd., 25.08.2009 80 Acquired by the subsidiary India Patel Energy Resources Ltd.

5 PAN Realtors Pvt. Ltd., India 26.08.2009 51 Incorporated by the Company.

The following Companies ceased to be subsidiary of the Company during the year 2009-2010:

No. Name of Subsidiary Date of ceasing to Remarks be a subsidiary

1. ASI Civil Constructor Inc., USA 01.04.2009 Wound up

2. Patel PCPL Singapore Pte. Ltd., Singapore 03.06.2009 Disinvested

3. PT Nagarta Coal Fields Ltd., Indonesia , 03.06.2009 Disinvested

The Consolidated Financial Statements of the Company have been prepared in accordance with the Accounting Standards AS-21, AS-23 and AS-27 of the Institute of Chartered Accountants of India.

The Company has made application to the Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956 for exempting the Company from attaching to its Annual Report, the copies of the Balance Sheets, Profit & Loss Accounts, Directors Reports and Auditors Reports and other documents required to be attached under Section 212(1) of the Act, of all its subsidiary companies.

A statement containing brief financial details of Subsidiaries is included in this Annual Report. The annual accounts of the subsidiary companies and

Directors

Ms. Sonal Patel and Mr. Nimish Patel, Directors of the Company retire by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

Mr. Danish Merchant and Mr. Bhasker Mehta were appointed on the Board of the Company with effect from August 3, 2009 and September 22, 2009 respectively.

In accordance with the provisions of the Companies Act, 1956, resolutions seeking approval of the members for appointment of Mr. Merchant and Mr. Mehta has been incorporated in the Notice of the ensuing Annual General Meeting along with the explanatory statement.

Employees Stock Option

The disclosures required to be made under the Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is provided in Annexure A and is a part of this report.

The ESOP Trust, which issues stock options to employees has also conducted various programs for the welfare of the employees of the company , viz seminar on cancer awareness, heart ailments, comprehensive health check up for employees. These programs benefited about 600 employees at various offices/sites. The Trust also provided loans/grants to employees for purposes such as house repairs/childrens higher educations/serious aliments. The trust has also organized social events viz craft and painting competition for the children of employees. The Trust proposes to continue such activities at an enlarged scale.

Auditors

M/s. Vatsaraj & Co. Chartered Accountants, Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The members are requested to consider their re-appointment for the current financial year 2010-11 and authorize the Board of Directors to fix their remuneration. The retiring auditors have, under Section 224(1B) of the Companies Act, 1956, furnished certificates of their eligibility for the appointment.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to Conservation of Energy, Technology Absorption is provided in Annexure B and is part of this Report.

The information on Foreign Exchange Earnings and Outgo is as follows:

Foreign exchange earnings Rs. 947.34 million Foreign exchange outgo Rs. 249.57 million

Corporate Governance

The Ministry of Corporate Affairs has issued Corporate Governance Voluntary Guidelines 2009. The Board has taken note of the same. However, the Corporate Governance as required in Clause 49 of the Listing Agreement has been complied with. A separate Report on Governance along with the Auditors Certificate is provided in Annexure C of this Report.

Corporate Social Responsibility (CSR)

CSR pertains to companys interaction with the society and its responsibility to contribute and give back to the society. Corporate Social Responsibility has been the companys priority. The Company donated to social care centers and its contribution to social activities, awareness campaign, education and cultural events and sport activities viz Blind organization of India, National Addiction Research Centre, Cancer Patients Aids Association, Patel Engineering Co. Charity Trust (the trust which provides education assistance to poor and needy people). The donations made by the Company during the financial year 2009-10 are Rs. 46.90 million.

Directors Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with regard to Directors Responsibility Statement, the Board of Directors confirms that :-

a. In the preparation of annual accounts, the applicable accounting standards have been followed and that there are no material departures.

b. The selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit and loss account of the Company for the year ended on that date.

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

d. The annual accounts have been prepared on a going concern basis. Transfer to Investor Education and Protection Fund (IEPF) During the year under review, the company credited Rs. 0.12 million to Investor Education and Protection Fund in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount being the dividend unclaimed by the shareholders of the Company for a period of 7 years from the due date of payment.

Equity Shares in the Suspense Account

As per clause 5A of the Listing Agreement, the Company reports the following details on claim/unclaimed shares during the year 2009-10 relating to follow on Public Issue of 2006:

No. Particulars

1 Aggregate no. of shareholders at 60 the beginning of the year

2 Outstanding shares in the suspense 1,349 account lying at the beginning of the year

3 No. of shareholders who approached 1 the company for transfer of shares from suspense account during the year

4 No. of shareholders to whom shares 1 were transferred from the suspense account during the year

5 Aggregate no. of shareholders at the 59 end of the year

6 Outstanding shares in the suspense 1,327 account at the end of the year

The voting rights on the outstanding shares shall remain frozen till the rightful owner of such shares claims the shares.

Particulars of Employees

The information as per Section 217(2A) of the Companies, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended forms part of this Report. However, as per the provisions of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and the Accounts are being sent to all shareholders, excluding the Statement of Particulars under Section 217(2A). Any shareholder interested in obtaining a copy of this statement may write to the Company Secretary at the registered office of the Company.

Acknowledgements

The Directors wish to place on record their appreciation for the continued support and co- operation by Shareholders, Financial Institutions, Banks, Government authorities and other stake- holders. Your Directors also acknowledge and appreciate the support extended by all the employees for their dedicated service.

On behalf of the Board of Directors,

Sd/-

July8, 2010 Pravin Patel

Mumbai Chairman

 
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