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Notes to Accounts of Sadbhav Engineering Ltd.

Mar 31, 2023

(d) Rights of Shareholders and Repayment of Capital:

(i) The Company has only one class of shares referred to as equity shares having a par value of Re. 1/-.

(ii) Each holder of equity shares is entitled to one vote per share.

(iii) In the event of liquidation of the Company, the holders of equity shares shall be entitled to receive any of the residual assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders. There are no preferential amount as on balance sheet date .

The promoter of the company, to whom the company had alloted 6,00,000 warrants on July 31, 2007, did not excercise option to convert the said warrants into equity shares of the company before the due date January 31, 2009, and the right has since lapsed. As per the term of issue of warrants, the application money received at the time of subscribing the said warrants has been forfeited and the same has been transferred to the Capital Reserve. The same can not be used for distribution of profits to the share holders as a dividend.

The Company has issued redeemable non-convertible debentures. In respect thereof, the Companies (Share capital and Debentures) Rules 2014 (as amended), require the Company to create Debenture Redemption Reserve (DRR) out of profit of the company available for payment of dividend. DRR is required to be created to an amount equal to 25% of the value of debentures issued over the life of debenture. Upon redemption of debenture, DRR amount are transferred to general reserve.

As per Companies (Share Capital and Debentures) Amendment Rules, 2019 dated August 16, 2019, issued by the Ministry of Corporate Affairs, listed companies are exempt from creation of DRR. The company has carried forward opening balance of DRR which pertains to earlier reporting period.

Terms of Repayment

NCDs of Udhay Vij Reality Private Ltd, having yearly coupon rate of 12.50% are repayable in yearly unequated installments till June 2023.

NCDs of Centrum Credit Opportunities Trust, having yearly coupon rate of 11.50% are repayable in unequal quarterly installments till September 2024.

Details of Securities

a Mortgage of share in identified immovable property owned by one of the promoters.

b Pledge of 2,76,20,270 Fully Paid up unencumbered, freely transferable equity shares of the Company held by some of the promoters. c Hypothecation of specific machineries and equipments financed by the respective financial institution. d Personal Guarantee of one of the directors and chief executive officer.

Details of Securities

(a) Hypothecation of stock of construction materials lying at sites, books debts and other receivables

(b) First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj along with furnitures, fixtures etc. owned by company and All Fixed Assets (Movable & Immovable) of the company which are not hypothecated / Charged to other lenders. Second charge on machineries owned by the company.

Amount of interest paid by the Company in terms of section 16 of the MSMED Act, along with the amount of the payment made to the supplier beyond the appointed day during the year

Amount of interest due and payable for the year of delay in making payment [which have been paid but beyond the appointed day during the year] but without adding the interest specified under the MSMED Act

As per Section 135 of the Companies Act, 2013, Corporate Social Responsibility (CSR) committee has been formed by the Company. The Company is liable to incur CSR expense as per requirement of Section 135 of Companies Act, 2013. Accordingly, it has incurred expenses of Rs 67.28 (Rs. 269.71 Lakhs) on the activities which are specified in Schedule VII to the Companies Act, 2013.

(a) Gross amount as per the limits of Section 135 of the Companies Act, 2013 : Rs. 65.55 Lakhs ( Rs. 252.97 Lakhs)

The trustees are responsible for the governance of the plan. The day-to-day administration of the scheme is carried out by the trustees. It is the trustees'' duty to look after assets on behalf of employees who are entitled to benefit from those assets at some future date. Investment of assets of fund is key responsibility of the trustees. The trustees must review investment performance regularly.

Risk to the Plan

Following are the risk to which the plan exposes the entity :

Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption then the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

Investment Risk:

For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.

Liquidity Risk:

Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign / retire from the company there can be strain on the cash flows.

Market Risk:

Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate / government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.

Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation / regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

Limitation of method used for sensitivity analysis :

Sensitivity analysis produces the results by varying a single parameter & keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationship between underlying parameters. Hence, the results may vary if two or more variables are changed. There are no changes from the previous period in the methods and assumptions used in preparing the sensitivity analysis.

Details of Asset- Liability Matching Strategy

There are no minimum funding requirements for a Gratuity benefits plan in India and there is no compulsion on the part of the Company to fully or partially pre-fund the liabilities under the Plan. The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it may not be possible to explicitly follow an asset-liability matching strategy to manage risk actively in a conventional fund.

As a matter of Prudence, the Company has not recognised deferred tax assets on unused tax credits and carry forward losses.

Deferred tax asset include Rs. 6537.25 lakhs being amount of unused tax credit recognized in earlier years. Based on the projection of future profitability, management believes that the Company will have regular taxable income against which the unused tax credit will be realised.

37.3 Performance obligation

Information about the company''s performance obligations are summarised below:

(a) Construction services

The performance obligation is satisfied over time as the assets is under control of customer and they simultaneously receives and consumes the benefits provided by the Company. The Company receives progressive payment towards provision of construction services.

_(b) The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied) as at 31 March are, as follows:

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31,2023 is Rs. 131265.90 lacs. Out of this the Company expect to recognise revenue around Rs. 74270.43 lacs in next year and remaining thereafter. Remaining performance obligation estimates are subject to change and affected by several factors including terminations , change of scope of contracts, occurrence of same is expected to be remote.

37.4 Reconciliation of the amount of revenue recorded in Standalone statement of Profit and loss is not required as there are no adjustments to the contract price.

38 Contingent Liabilities and commitments A Contingent Liabilities		March 31, 2023	March 31, 2022
a i	Claims against the company not acknowledged as debt: Tax matters Income tax matters in dispute	(Rs. in Lakhs) 11776.88	(Rs. in Lakhs) 15113.97
ii	Service tax matters in dispute	612.34	612.34
iii	Value added tax matters in dispute	414.36	414.36
iv	Customs duty matters in dispute	237.89	237.89
v	Goods and Service tax	861.67	609.03

b Claims against the company not acknowledged as debt: other than tax matter

(i) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs.46.42 Lakhs (March 31, 2022: Rs. 46.42 Lakhs ) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs 46.42 Lakhs (March 31, 2022: Rs. 46.42 Lakhs) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court along with an application for stay of the Impugned Order. The Bombay High Court, Nagpur bench, through its interim order, granted a stay pending the decision of the appeal and directed the company to deposit 50% of the amount of the decree passed by the Civil Judge. The company has paid Rs. 21.020 Lakhs (March 31, 2022: Rs. 21.20 Lakhs ). The matter is pending before the high Court, Nagpur.

(ii) A case before Workmen Compensation Commissioner , Udaipur was filed for compensation of Rs. 11.69 Lakhs (March 31, 2022 : Rs. 11.69 Lakhs ) under Employees Compensation Act, 1923. The matter is currently pending.

(iii) A case before Labour Court at Ahmedabad, was filed for compensation against the company. The labour court has directed to pay compensation of Rs. 3.63 Lakhs (March 31, 2022 : Rs. 3.63 Lakhs). the company has filled appeal before the High court of Gujarat. The matter is currently pending.

(iv) SEL has moved to Nagpur High Court for release of penalty amount Rs. 113.45 Lakhs (March 31, 2022 : Rs. 113.45 Lakhs) against the services provided at Junad Mines of WCL. The case is pending.

(v) Retention of 226 workers at UCIL Site. The Company has received 3 legal notices from Ministry of Labour and Employment, out of which one Notice is from Deputy Labour Commissioner and two Notices are from Asst. labour commissioner regarding non implementation of award by tribunal cum labour court Dhanbad. The Labour Court, dhanbad has given the order in favour of the workers. The company has filed the appeal in Jharkhand High court at Ranchi. The Matter is pending.

(vi) The Directorate of Revenue Intelligence, Lucknow issued a show cause notice to the Company on 22/11/2017, seeking reasons for not demanding Rs. 187.89 Lakhs with respect to the customs duty on importing Electronic Sensor paver Finisher , which was valued at Rs. 726.77 Lakhs by SEL. The DRI contended that the Company wrongly claimed a Nil rate of customs duty as per Notification No. 12 / 2012, pertaining to exemption from payment of custom duty. Company has filed an appeal before the Commissioner of Customs Customs Comminnsinerate - II against the above aforesaid showcause notice and Commissioner had passed order and confirmed the demand and also imposed penalty of Rs. 50.00 lakhs. Company has filed appeal before Customs, Excise & Service Tax Appellate Tribunal, Chennai. The matter is pending.

(vii) Siddharth Infraprojects Private Limited (the âClaimantâ) has initiated an arbitration proceeding against the Company in relation to a sub-contract agreement dated October 31, 2007 between the Claimant and Company. Pursuant to the aforesaid sub-contract agreement, Company sub contracted the work under the main contract between Company and MPRDC for rehabilitation and upgradation of package 11 of Seoni Chiraidongri Road. The Claimant has alleged that Comapny had committed breaches of the terms of the sub-contract agreement by unilaterally reducing its scope of work covered under the sub-contract agreement without the permission of the MPRDC. The Claimant has claimed an aggregate amount of Rs. 8160.00 Lakhs (March 31, 2022: Rs. 8160.00 Lakhs ) on account of, inter alia: (i) amount not paid for the work done; (ii) overhead losses suffered by the Claimant; (iii) losses suffered on account of profit not earned at appropriate time; (iv) loss of productivity; (v) opportunity losses; (vi) compensation for interest charges paid to the bank; (vii) loss due to under utilized tools, plants and machineries. SEL has been submitted its statement of defense before the Arbitral Tribunal. The aggregate amount involved is Rs. 8160 Lakhs (March 31, 2022: Rs. 8160.00 Lakhs ). The matter is currently pending.

(viii) Some of the contractors and suppliers have filed cases before NCLT, Civil Courts and MSME Council claiming the payment of outstanding amount, claims and interest. The Company has made representation/submissions to the respective forums. Based on the legal advice and past out come management believes that in addition to be amount provided in the books of accounts no further amount in form of claims and interest will be payable.

Note- It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities. Future cash outflows in respect of the above are determinable only on receipt of judgments / decisions pending with various forums / authorities.

The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.

c Guarantees:

Company has given corporate guarantee to banks outstanding amount of which as on March 31, 2023 is Rs. 94545.96 Lakhs (March 31, 2022: Rs. 93913.59 Lakhs ) against the financial assistance given by the banks to subsidiary company and step down subsidiaries.

39.2 The Fair value of Investments in Bonds and Debentures, NSCs, Long term Loans and advances, Bank Deposits with more than 12 months maturities and earmarked balances approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

The Fair value of current financial assets and current trade and other payables measured at amortised cost are considered to be the same as their carrying amount because they are of short term nature.

The carrying amount of financial assets and financial liabilities (other than borrowed funds) measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.

The fair value of Borrowed Funds approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

39.3 Refer Note 43 for information on financial asset pledged as security.

40.2 There are no transfer between level 1 and level 2 during the year.

40.3 The company''s policy is to recognize transfers into and transfer out of fair values hierarchy levels as at the end of the reporting period.

40.4 Valuation technique and inputs used to determine fair value in level 2

The cost of investments in equity instruments approximates fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

41.1 Financial Instruments Risk management objectives and Policies

The Companyâs principal financial liabilities comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Companyâs operations and to support its operations. The Companyâs principal financial assets include Investments, trade & other receivables and cash and bank balance that derive directly from its operations.

The Company''s activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign currency option contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. Risk management systems are reviewed periodically to reflect changes in market conditions and the Companyâs activities. The Board of Directors oversee compliance with the Companyâs risk management policies and procedures, and reviews the risk management framework.

41.2 Market Risk

The market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. Financial instruments affected by market risk include borrowings, Investments, other receivables, trade and other payables and derivative financial instruments.

Within the various methodologies to analyse and manage risk, Company has implemented a system based on âsensitivity analysisâ on symmetric basis. This tool enables the risk managers to identify the risk position of the entities. Sensitivity analysis provides an approximate quantification of the exposure in the event that certain specified parameters were to be met under a specific set of assumptions. The risk estimates provided here assume:

- a parallel shift of 100-basis points of the interest rate yield curves in all currencies. The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and provisions.

- a simultaneous, parallel foreign exchange rates shift in which the INR appreciates / depreciates against all currencies by 2%

The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of profit & loss may differ materially from these estimates due to actual developments in the global financial markets.

The following assumption has been made in calculating the sensitivity analyses:

- The sensitivity of the relevant statement of profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

41.2.1 Interest Rate Risk

Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in market rates of interest. The Company seeks to mitigate such risk by entering into interest rate derivative financial instruments such as interest rate swaps. Interest rate swap agreements are used to adjust the proportion of total debt, that are subject to variable and fixed interest rates.

Under an interest rate swap agreement, the Company either agrees to pay an amount equal to a specified fixed-rate of interest times a notional principal amount, and to receive in return an amount equal to a specified variable-rate of interest times the same notional principal amount or, vice-versa, to receive a fixed-rate amount and to pay a variable-rate amount. The notional amounts of the contracts are not exchanged. No other cash payments are made unless the agreement is terminated prior to maturity, in which case the amount paid or received in settlement is established by agreement at the time of termination, and usually represents the net present value, at current rates of interest, of the remaining obligations to exchange payments under the terms of the contract.

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company''s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys cash management system. It maintains adequate sources of financing including debt at an optimized cost.

The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments:

41.4 Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.

Credit risk arises primarily from financial assets such as trade and other receivables, Loans and advances, cash and cash equivalent and other balances with banks.

Credit risk on cash and cash equivalents is limited as company deposits with the banks.

The company generally gives loans and advances to its subsidiaries and employees. Hence, the management believes that the company is not exposed to any credit risk in respect of such loans and advances.

In respect of trade receivables, credit risk is being managed by the company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the company grants credit terms in the normal course of business. All trade receivables are also reviewed and assessed for default on a regular basis. The Company has reviewed expected credit loss provision (ECL) on its trade receivables as per Ind AS provisions.

The maximum exposure to the credit risk at the reporting date is primarily from trade recievables as on March 31, 2023 Rs. 57269.68 Lakhs (as on March 31, 2022 Rs. 73156.91 Lakhs).

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

At the reporting date, the exposure to:

unlisted equity in subsidiaries at cost of Rs. 2,403.16 Lakhs (March 31, 2022: Rs. 2,403.16 Lakhs ). listed equity in subsidiaries at cost of Rs. 49,255.72 Lakhs (March 31, 2023: Rs. 49,255.72 Lakhs)

Sensitivity analysis

As at 31 March 2023, the exposure to listed equity securities at fair value was Rs. 7,371.64 Lakhs (31 March 2022: Rs 22,114.91 Lakhs).

Changes in this exposure would not have a material effect on the profit or loss and total equity of the Company.

42 Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders of the Company.

The Companyâs objective for capital management is to maximize shareholder value and safeguard business continuity.

The Company determines the capital requirement based on annual operating plans and other strategic plans. The funding requirements are met through equity and operating cash flows generated.

1 Remuneration expenses includes Rs. 53.90 lakhs (Rs. 84.00 lakhs) Paid to Nitin R. Patel,Executive Director & CFO up to up to November 21,2022, Rs. 4.81 lakhs paid to Dwigesh Joshi, Executive Director & CFO of the company , Rs. 24.51 lakhs (Rs. 16.36 lakhs) paid to Hardik Modi, Company Secretary and Compliance Officer.

2 The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.

3 Terms and conditions of the balance outstanding:

Outstanding balances at the year end are unsecured and interest free except short term loan and settlement occurs in cash as per the terms of agreement

Short term loans (unsecured) given to Sadbhav Infrastructure Projects Ltd (SIPL) carries interest rate @11% p.a. (March 31, 2021 : 11% )

The company has not provided any commitment to the related party As at March 31, 2023 except mentioned at Note No. 38B

Outstanding balances towards rent and reimbursement are unsecured and will be settled as per the terms ofthe agreement.

There is no guarantee given or received except mentioned at Note No. 56

47 The Company has initiated action for monetization of the assets and One Time Settlement (OTS) discussions with the Trade Creditors as a part of the deal, upon insistence of the buyers of assets. The Company has reviewed its outstanding payable and identified those debts that have been outstanding beyond limitation period and not payable. The management has evaluated the balances in all accounts of the creditors and determined to write back the outstanding payables considering factors such as the age of the outstanding and impairment in contract assets against such payables etc. The management is in discussion with the vendors and process of obtaining confirmation is initiated.

Considering the management assessment, the balances of Rs. 11066.47 lakhs in vendor accounts have been written back and included in miscellaneous income under the head other income in the financial results during the year ended March 31, 2023. Having regard to this the management believes that carrying amount of trade payables is fairly valued.

48 The Board of Directors in the meeting held on October 15, 2022 have resolved to withdraw Scheme of Amalgamation filed with Honâble National Company Law Tribunal Ahmedabad Bench (NCLT) with regard to amalgamation of Sadbhav Infrastructure Project Limited (Transferor Company) with Sadbhav Engineering Limited (Transferee Company) under sections 230 to 232 of the Companies Act, 2013. Consequently, on application made by the Company, the NCLT vide its order dated October 19, 2022 has allowed the withdrawal of the said application. Accordingly, the Scheme of merger stands cancelled.

49 The Company has outstanding loan and other receivable of Rs. 14865.38 lakhs given to Rohtak Panipat Tollway Private Limited (RPTPL), a step-down subsidiary company which is engaged in construction, operation and maintenance of road projects under concession agreement with National Highways Authorities of India (NHAI). The net worth of RPTPL has fully eroded.

Further, the toll collection by RPTPL was forcefully suspended due to agitation and protest held by farmers and other unions against agri-marketing laws from December 25, 2020. Accordingly, RPTPL could not collect toll user fees from December 25, 2020. RPTPL had sent various communications to NHAI for such forceful suspension oftoll. RPTPL has issued notice for termination of concession agreement on July 27, 2021 considering the above event as Force Majeure Event in terms of concession agreement. RPTPL has filed claim amounting to Rs. 395784.40 lakhs relating to termination payments, O&M cost due to force majeure, Covid claim & demonetization etc. with NHAI in terms of concession agreement. In respect of such claims, NHAI has approached to the RPTPL for settlement of all these claims by way of conciliation proceedings, which has been consented by it.

Considering the management assessment of probability and tenability of receiving above claims from NHAI as per the terms of concession agreement, which is backed by legal opinion and communications from NHAI for conciliation, the management has assessed that there is no impairment in the value of loan given to RPTPL and consequently no provision/adjustment to the carrying value of loan and other receivable as at March 31, 2023 is considered necessary.

The statutory auditors have expressed qualified opinion on financial statments in respect of above as regards

50 As per the consolidated financial statements of the Sadbhav Infrastructure Project Limited (SIPL) and its subsidiaries, there is negative networth of the Group of SIPL and its subsidaries. The Company has investment in and given loan to SIPL, the amount of which is Rs. 89721.04 lakhs as on March 31, 2023. The management has carried out impairement assessement of these assets and based on the assessement it is concluded that no impairement is required to the carrying value of investment in and loan to SIPL.

51 a. There was delay in physical work progress in case of Sadbhav Jodhpur Ring Road Private Limited (SJRRPL), a step-down subsidiary company which is engaged in construction, operation and maintenance of road project under concession agreement with National Highways Authorities of India (NHAI), due to delay in handing over the land from NHAI, delay in approval of Change of scope of work, non-funding by the lenders and nationwide lockdown due to Covid-19. Further the NHAI in the month of January 2022 at the request of the SJRRPL had given in principal approval for harmonious substitution of the concessionaire i.e. SJRRPL subject to various terms and conditions.

Pursuant to this, definitive agreement was entered into between The Company, SJRRPL, Sadbhav Infrastructure Project Limited (The subsidiary company) and Gawar Construction Limited (GCL) as on June 28, 2022 for substitution of the SJRRPL with the new SPV to be nominated by GCL and also executed endorsement agreement between the SJRRPL and JRR Highways Private Limited (new concessionaire) dated July 13, 2022 with the approval of NHAI for implementation of the project by new concessionaire in substitution of the SJRRPL.

Consequently, all the balances outstanding, pertaining to SJRRPL, in books of the Company have been adjusted and net debit balance of Rs. 2606.04 Lakhs has been transferred to statement of profit and loss and included in other expenses in financial statments during the year ended March 31, 2023.

b. In case of Sadbhav Bangalore Highway Private Limited (SBGHPL or concessionaire) which is engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI), the lenders of SBGHPL have notified to NHAI about exercise of their right of substitution of concessionaire in the month of January, 2022. Subsequently, the lenders have approved the anchor offer received from the Gawar Construction Limited in the month of October 2022 for the purpose of substitution of SBGHPL. Subsequently necessary documents have been executed in the month of February 2023.

Consequently, all the balances outstanding, pertaining to SBGHPL in books of the Company have been adjusted and amount of Rs. 4,082.80 Lakhs has been transferred to statement of profit and loss and included in other expenses and amount of Rs. 1,512.00 lakhs being loan outstanding is transferred to statement of profit and loss and included in exceptional items in financial statments for the year ended March 31, 2023.

c. In case of Sadbhav Bhavnagar Highway Limited (SBHL) and Sadbhav Una Highway Limited (SUHL) which are engaged in construction, operation and maintenance of infrastructure project under concession agreement with National Highways Authorities of India (NHAI), the holding company of SBHL and SUHL i.e. Sadbhav Infrastructure Project Limited (SIPL), subsidiary of the company has executed binding term sheet on January 27, 2023 towards stake sale of equity shares of SBHL and SUHL.

In accordance with term sheet, all the balances outstanding, pertaining to SBHL / Bhavnagar project and SUHL / Una project, in books of the Company have been adjusted during the year ended March 31,2023.

d. Company reviews its outstanding trade receivable, advance to vendor and loans given and identifies those debts that have been outstanding for an extended period and are unlikely to be received. The company applies the prudence concept and decides to write off/provide for the doubtful trade receivable, advance to vendor and loans given as expenses amounting to Rs. 26337.58 lakhs.

52 In terms of Ind AS - 115 - âRevenue from Contracts with the Customersâ, the Company recognises contract assets on the basis of actual cost incurred on contract till reporting date and estimated cost to complete (CTC) to the contract as per percentage of completion method. The CTC is reviewed at the balance sheet date and adjustments are affected to the carrying value of contract assets on the basis of such review. The certification of work completion and acceptance of final bill by the customers usually takes significant period of time and this period varies from contract to contract.

During last few years there has been substantial increase in the cost of construction. Further, there were delays in execution of the work due to resource constraints. To overcome this situation since last two year, the Company subcontracted or took exit from some of the works post final measurement of work done by the company. There is no pass through of higher cost over-run as the contracts are fixed price contracts.

In the light of the above situation, the management reviews the carrying value of contract assets as on the balance sheet date. Based on such review, the impairment to the carrying value of the contract assets is made in the financial statements in terms of Ind AS - 115 - âRevenue from Contracts with the Customersâ. The management is taking effective steps for realization of these assets.

The contract assets as on March 31, 2023 includes amount of Rs. 35021.63 lakhs in respect of which claim have

53 The Company finds difficulty in meeting obligation of payment to suppliers and statutory dues in normal course of business. There are defaults in repayment of dues to lenders. This is mainly an account of delay in execution of projects and resources constraint.

During the year ended March 31, 2023, the consortium lenders except one lender of the company have signed an Inter Creditor Agreement on December 26, 2022 due to defaults in the repayment of dues. The account of Company has been classified as Non Performing Assets. The Management is in the process of monetizing the existing -6- HAM Projects of group out of which binding term sheet has been signed with the buyer for -2- HAM projects and other -4- HAM Projects are expected to be monetized soon. Further, due to delay in completion of EPC works under execution on account of shortage of working capital, the Company has proactively taken decision to rearrange the EPC contract work. These factors raise concern about going concern assumptions adopted in the preparation of financial statements for the year ended March 31, 2023.

Based on this, the Company has submitted the Resolution Plan to the Consortium of lenders which is under active discussion with the lenders. The ingredients of Resolution Plan covers proceeds from monetization of HAM Assets & other Assets, infusion of funds from the promoters, receipt of claim amount / other receivables and refinance / stake sale of operational projects as well as of restructuring of dues of lenders. These activities will bring reduction of overall liabilities including reduction of debt and will also bring additional liquidity in the company to ramp up its execution.

Considering the above aspect in anticipation of approval from lenders of Resolution Plan, its implementation and infusion of funds from promoters of the Company, the management believes that Company will be able to generate an incremental operational cash flows.

54 Realisability of Non- Current Trade Receivables amounting to Rs. 2830.04 lakhs (Rs. 13236.35 lakhs) along with other incidental balances amounting to Rs. 8312.97 lakhs (Rs. 8312.97 lakhs) pertaining to completed projects as at balance sheet date in respect of which legal proceedings are in process. The management is hopeful that in view of the steps being taken for recovery, the dues will be realised and hence the same are considered as good and recoverable. Reference is invited to Note No. 6 and 8.

1 The Company has made provision for impairment in the carrying value of the trade receivable resulting into decrease in the retained earnings forming part of total equity; hence the debt equity ratio has impaired.

Principal repayment of the long term borrowings include prepayment of the borrowings which has been

2 repaid out of the repayment of loan from the related parties. This has resulted in to decrese in the debt service coverage ratio

3 The Company''s net loss was higher in the previous year due to provision for impairment to the carrying value of the contract assets compared to net loss in the current year resulting into increase in ratio.

4 The Company has made provision for impairment in the carrying value of the trade receivable resulting into decrease in the work capital hence the ratio increased.

5 The Company has made provision for impairment in the carrying value of the trade receivable resulting into net loss during the year hence the ratio decreased.

6 The Company''s net loss was higher in the previous year due to provision for impairment to the carrying value of the contract assets compared to net loss in the current year resulting into positive ratio.

57 The Company does not hold any benami property as defined under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder. No proceeding has been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

58 The Company is required to provide QIS to Banks on quarterly basis. The quarterly returns or statements of current assets filed by the Company with banks are in agreement with the books of accounts.

59 As on March 31, 2023 there is no unutilised amounts in respect of any issue of securities and long term borrowings from banks and financial institutions. The borrowed funds have been utilised for the specific purpose for which the funds were raised.

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

61 The Company has not traded or invested in crypto currency or virtual currency during the financial year.

62 The company does not have any charges or satisfaction, which is yet to be registered with ROC beyond the statutory period except in case of two lenders where charge satisfaction yet to be registered with ROC due to non receipt of no dues certificate.

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

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

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

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

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

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

66 The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act read with the Companies ( Restriction on number of Layers) Rules, 2017.

67 The Company is not decalred as wilful defaulter by any Bank or Financial Institution or Other lenders.

68 Figures relating to the previous periods/year have been regrouped / rearranged, wherever necessary, to make them comparable with those of the current periods/year.

69 All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated.

Mar 31, 2018

1. Company overview

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, irrigations projects, roads, bridge, mining activities on contract basis, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. The Company is engaged in carrying out the construction works as per EPC contract entered between the Company and its subsidiaries. Company is also engaged in business of energy generation through Wind Power Project.

2. Basis of preparation

2.1 Statement of compliance

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

2.2 Basis of measurement

The Financial Statements have been prepared on the historical cost basis except for the following items which are measured at fair values:

- certain financial assets and liabilities (including derivative instruments)

- defined benefit plans assets

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. 2.3 Functional and presentation currency

Indian rupee is the functional and presentation currency.

2.4 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions.

These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period.

Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements are:

- Revenue recognition of construction services based on percentage of completion method and Provision for estimated losses on construction contracts.

- Useful lives of Property, plant and equipment

- Valuation of financial instruments

- Provisions and contingencies

- Income tax and deferred tax

- Measurement of defined employee benefit obligations

3. Recent Accounting Pronouncements issued but not yet effective

On March 2018, Ministry of Corporate Affairs (MCA) has notified new standards and amendments to existing standards. These amendments are effective for annual periods beginning on or after April 1st, 2018.

Ind As 115 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaces existing revenue recognisation guidance, including Ind AS 18 Revenue and Ind AS 11 construction contracts. Core principle of the new standard that an entity should recognised revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further , the new standard requires enhances disclosures about the nature, amount timing and uncertainty or revenue and cash flows arising from the entityâs contract with customers.

This Standard permits two possible methods of transition. i.e. retrospective approach and modified retrospective method.

The Company is in the process of evaluating and identifying the key impacts along with transition options to be considered while transiting to Ind AS 115.

4. Transition to Ind AS

These standalone financial statements of The Company for the year ended March 31, 2018 and March 31, 2017 has been prepared in accordance with Ind AS.

(a) Hypothecation of stock of construction materials lying at sites, books debts and other receivables

(b) First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj along with furnitures, fixtures etc. owned by company and All Fixed Assets (Movable & Immovable) of the company which are not hypothecated/Charged to other lenders. Second charge on machineries owned by the company.

(c) Personal Guarantee of Shri Vishnubhai M. Patel, Shri Shashin V. Patel, Shri Vasisthakumar Patel , Shri Vikramkumar Patel and Smt. Shantaben V. Patel.

5. Employee Benefits Note

As per Ind AS - 19 - âEmployee Benefitsâ, the disclosures of Employee Benefits is given as below:-

5.1 The trustees are responsible for the governance of the plan. The day-to-day administration of the scheme is carried out by the trustees. It is the trusteesâ duty to look after assets on behalf of employees who are entitled to benefit from those assets at some future date. Investment of assets of fund is key responsibility of the trustees. The trustees must review investment performance regularly.

5.2 Risk to the Plan

Following are the risk to which the plan exposes the entity :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption then the Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate. Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption then the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

Limitation of method used for sensitivity analysis :

5.3 Details of Asset - Liability Matching Strategy

6. Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt:

(i) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs.46.42 Lakhs (March 31, 2017: Rs.46.42 Lakhs ) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs.46.42 Lakhs (March 31, 2017: Rs.46.42 Lakhs) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court along with an application for stay of the Impugned Order. The Bombay High Court, Nagpur bench, through its interim order, granted a stay pending the decision of the appeal and directed the company to deposit 50% of the amount of the decree passed by the Civil Judge. The company has paid Rs.21.020 Lakhs (March 31, 2017: Rs.21.20 Lakhs ). The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

(ii) Company has received order of the Commissioner of service tax on 1st April, 2013 wherein Commissioner upheld the demand of Rs.199.13 Lakhs (March 31, 2017: Rs.199.13 Lakhs ) and impose penalty of Rs.345.92 Lakhs (March 31, 2017: 345.92 Lakhs ). Company filed appeal before CESTAT and received unconditional stay order on order of Commissioner hence no provision has been made.

(iii) Demand under Service Tax Act, 1994 Rs.67.29 Lakh (March 31, 2017: Rs.67.29 Lakh). The Commissioner of Service Tax, Ahmedabad, filed an appeal before Supreme Court of India against the order of CESTAT passed in favor of the Company. The matter is currently pending.

(iv) The ACIT, Central Circle - 1(1), Ahmedabad served an assessment order to SEL in relation to adjustment of losses incurred by the undertaking of SEL against the eligible income of the undertakings while computing the deductions and other expenses for the assessment year 2005-06 ,2006-07 & 2007-08 (the âImpugned Orderâ). SEL preferred an appeal before the CIT (Appeals) - XIV (the âCIT Appealsâ) challenging the Impugned Order. The CIT Appeals, through its order, partly disallowed SELâs claim for deduction and other expenses under Section 80-IA of the IT Act and other expenses, (the âCIT(A) Orderâ) totaling to Rs.611.03 lakhs. Subsequently, SEL preferred an appeal before the ITAT challenging CIT (A) Order and the ACIT, Central Circle - 1(1), Ahmedabad also preferred an appeal before the ITAT against the CIT(A) Order. The ITAT, through its order, allowed deductions under Section 80-IA of the IT Act (the âITAT Orderâ). The CIT filed a review petition before the ITAT. Subsequently, the CIT preferred an appeal before the Gujarat High Court against the ITAT Order. The aggregate amount of Tax Liability for All the 3 Asst. Year involved is Rs.212.68 Lakhs . The matter is currently pending.

(v) The DCIT, Central Circle 1(1), Ahmedabad issued a show cause notice to SEL seeking reasons for not imposing a penalty under Section 271(1)(c) of the IT Act with respect to the alleged concealment of particulars of income and inaccurate particulars being furnished for assessment year AY 2008-09. SEL filed a reply to the show cause notice. The DCIT, Central Circle 1(1), Ahmedabad passed orders for AY 2008-09 imposing total penalty (the âPenalty Orderâ) of Rs.37.22 Lakhs. Subsequently, SEL has preferred an appeal before the CIT, Appeals- 11, Ahmedabad against the Penalty Orders. CIT Appeals-11 has passed the order and drop the penalty proceedings. The DCIT, Central Circle 1(1) filled the appeal with ITAT, Ahmedabad. The matters are currently pending.

(vi) The JCIT, Range 8, Ahmedabad served assessment orders to SEL in relation to the assessment years 2008-09 on account of disallowance of some expenditure and deductions under Section 80-IA of the IT Act aggregating to Rs.906.99 lakh. SEL preferred an appeal before the CIT (Appeals). The CIT Appeals, through its order, allowed the expenditure and deductions . Subsequently, the Ahmedabad & the company has preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.308.29 Lakhs . The matter is currently pending.

(vii) The ACIT, Central Circle 1(1), Ahmedabad served five assessment orders to SEL along with five demand notices for an aggregate amount of Rs.1277.00 Lakhs (March 31,2017: 1277.00 Lakhs ) in relation to the assessment years 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12 on account of disallowance of some expenditure and deductions under Section 80-IA of the IT Act. SEL preferred an appeal before the CIT (Appeals). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs.5746.80 Lakhs (March 31, 2017: 5746.80 Lakhs ). Subsequently, the ACIT, Central Circle 1(1), Ahmedabad & the company has preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.1953.30 Lakhs (March 31, 2017: 1953.30 lakhs ). The matter is currently pending.

(viii) The DCIT, Central Circle 1(1), Ahmedabad has reopened the case for AY 2011-12 and passed the order by disallowing the expenditure of Rs.378.99 Lakhs (March 31, 2017: 378.99). Subsequently, SEL has preferred an appeal before the CIT, Appeals- 11, Ahmedabad against the said Orders. The CIT Appeals, through its order partly allowed the expenditure and deductions. Subsequently, the DCIT, Central Circle -4(1)(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.244.64 Lakhs (March 31, 2017: 244.64 lakhs). The matter is currently pending.

(ix) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs.450.73 Lakhs (March 31, 2017: Rs.450.73 Lakhs) and disallow SELâs claim for deduction for a sum of Rs.379.47 Lakhs (March 31, 2017: Rs.379.47 Lakhs)under Section 80IA(4) of the IT Act for assessment years 2012-13 with respect to agreements entered with GoI and state governments for construction of highways and roads. The DCIT, Central Circle 1(1), Ahmedabad further held that SEL is a contractor who executed the work and was not eligible for such deductions. SEL preferred an appeal before the CIT, Central Circle-1(1). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs.829.90 Lakhs. Subsequently, the ACIT, Central Circle 1(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.269.36 Lakhs (March 31, 2017: Rs.269.36 Lakhs). The matter is currently pending.

(x) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs.377.87 Lakhs (March 31, 2017: Rs.377.87 Lakhs ) disallow SELâs claim for deduction for a sum of Rs.7716.78 Lakhs (March 31, 2017: Rs.7716.78 Lakhs ) under Section 80IA(4) of the IT Act for assessment years 2013-14 . SEL has preferred an appeal before the CIT(A),Ahmedabad. The CIT Appeals, through its order, allowed the expenditure and deductions amounting. Subsequently, the DCIT, Central Circle 4(1)(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.836.74 Lakhs (March 31, 2017: Rs.377.87 Lakhs ). The matter is currently pending.

(xi) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs.448.85 Lakhs (March 31, 2017: Rs.448.85 Lakhs) disallow SELâs claim for deduction for a sum of Rs.2993.28 Lakhs (March 31, 2017: Rs.2993.28 Lakhs ) under Section 80IA(4) of the IT Act for assessment years 2014-15 . SEL has preferred an appeal before the CIT(A), Ahmedabad. The CIT Appeals, through its order, allowed the expenditure and deductions amounting. Subsequently, the DCIT, Central Circle 4(1)(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs.1048.50 Lakhs (March 31, 2017: Rs.1048.50 Lakhs ). The matter is currently pending.

(xii) During the year, there was a search u/s 132 of income tax on the company. The company has received notice u/s 153A to file the income tax return for the FY 2011-12 to 2016-17 & notice u/s 148 for the AY 2010-11. The company has filled the return in response to notice u/s 153A & u/s 148. The proceedings are pending.

(xiii) 1. The Deputy Commercial Tax Commissioner, Audit Divison-1 Ahmedabad has passed order against âJilin Sadbhav JVâ for VAT demand of Rs.702.00 Lakhs (March 31, 2017: Rs.702.00 Lakhs inclusive of interest Rs.330.18 Lakhs (March 31, 2017: Rs.330.18 Lakhs ) and Penalty of Rs.74.36 Lakhs (March 31, 2017: Rs.74.36 Lakhs ). In Jilin-Sadbhav JV, Sadbhav Engineering Limited is having 48% share. Against this Order the Joint Venture has filed an appeal in the Gujarat Value Added Tax Tribunal at Ahmedabad. The Tribunal, through its order, granted a stay against the recovery of outstanding demand on payment of Rs.15 Lakhs (March 31, 2017: Rs.15.00 Lakhs ). As the company has paid Rs.15.00 Lakhs, no provision has been made.

(xiv) The Company has received a show cause notice from the office of Mining Engineer, Mines and Geology Department, Udaipur on 05/02/2014 imposing penalty of Rs.81.32 Lakhs (March 31, 2016: Rs.81.32 Lakhs and April 1, 2015: Rs.81.32 Lakhs) under rule 63, 37A (IX) of Rajasthan Minor Mineral Concession Rules, 1986. The Company has filed a Civil Writ Petition No.2635/2014 in The High Court of Rajasthan against the said notice. The Company has deposited Rs.81.32 Lakhs (March 31, 2017: Rs.30.00 Lakhs) with the Mining Engineer, Mines and Geology Department, Udaipur. Further proceeding is pending and amount is fully paid, hence no provision has been made.

(xv) The Deputy commissioner of Commercial Taxes, Jharkhand has passed an Assessment Order under Jharkhand Value Added Tax, 2005 for FY 2010-11 for demand of Rs.77.40 lakhs (March 31, 2017: Rs.77.40 Lakhs) and also has passed order for FY 2011-12 with demand of Rs.152.83 lakhs (March 31, 2017: Rs.152.83 Lakhs ). The company has filled Revision Application against both the orders to the âThe Commissioner, Commercial Taxes Department - Jharkhandâ therefore the same has not been provided in the Books of Accounts.

(xvi) The Deputy commissioner of Sales Tax, Maharashtra LTU Nashik has passed an Assessment Order under Maharashtra Value Added Tax, 2002 for FY 2010-11 for demand of Rs.13991.08 lakhs (March 31, 2017: Rs.13991.08 lakhs) which includes Interest of Rs.4593.08 Lakhs (March 31, 2017: Rs.4593.08 Lakhs) and Penalty of Rs.4699.00 Lakhs (March 31, 2017: Rs.4699.00 Lakhs). The company has filled Appeal against this order and also asked for stay on this demand.

(xvii) (i) A case before Workmen Compensation Commissioner , Udaipur was filed for compensation of Rs.11.69 Lakhs (March 31, 2017: Rs.11.69 Lakhs ) under Employees Compensation Act, 1923. The matter is currently pending.

(ii) A case before Labour Court at Ahmedabad, was filed for compensation against the company. The labour court has directed to pay compensation of Rs.3.63 Lakhs (March 31, 2017: Nil). The company is going to filled appeal before the High court of Gujarat. The matter is currently pending.

(iii) An employee has filed case before Labour court at Balaghat for compensation of Rs.13.20 Lakhs (March 31, 2017: Rs.13.20 Lakhs ) under Workmen Compensation Act, 1923. The matter is currently pending.

(xviii) SEL has moved to Nagpur High Court for release of penalty amount Rs.1,13,45265/- against the services provided at Junad Mines of WCL. The judge handling the case has retired and new appointed judge currently handling the case, stated that new hearing date will be issued after re-opening of Court. New hearing date awaited.

(xix) Retention of 226 workers at UCIL Site. SEL have received 3 legal notices from Ministry of Labour and Employment, out of which one Notice is from deputy labour commissioner and two Notices are from Asst. labour commissioner regarding Non implementation of award by tribunal cum labour court Dhanbad. Reply against the legal notices have already been sent. SEL is waiting for next hearing date from Ranchi Court.

(xx) Ex-party order passed on 18/05/2017 by the Labour Commissioner (Central), Kanpur (U.P) in the matter of an application filed by the Applicant Mohanlal Patel and 4 Others through Shri Arjun Prasad Gupta. In this regard in relation to the Khadiya: project of NCL. SEL had received two legal notices from Regional commissioner dated 21.06.2017 and 03.06.2017. The amount Rs.3,65,112,11/was withheld by NCL.

(xxi) The Directorate of Revenue Intelligence, Lucknow issued a show cause notice to SEL on dated 22/11/2017, seeking reasons for not demanding 1,87,88,756/- with respect to the customs duty on importing Electronic Sensor paver Finisher , which was valued at Rs.7,2676,802 by SEL. The DRI contended that SEL wrongly claimed a nil rate of customs duty as per Notification No. 12/ 2012, pertaining to exemption from payment of custom duty. The Additional Director General DRI, Zonal unit, Lucknow through its show cause notice. Subsequently, SEL preferred an appeal before the Commissioner of Customs Customs Comminnsinerate-II, Customs House, No.60, Rajaji Salai, Chennai-600001. SEL submitted its detailed reply on 23/03/2018 to justify nil custom duty against Import of paver. Thereafter not got any further date in the matter.

(b) Other Money for which the company is contingently liable:

(i) The Finance Act (2), 2009 has amended Section 80IA(4) of the Income Tax Act, 1961 by substituting an explanation to Section 80IA with retrospective effect from 01.04.2000. On the basis of legal opinion and decided cases, the Company has continued to claim deduction under section 80-IA(4) of the Act on eligible projects and consequently the Company considers it appropriate not to create a liability for provision of Income Tax. However an amount of Total income tax of Rs.20320.70 Lakhs (March 31, 2017: Rs.11563.41 Lakhs ) on claim of deduction/s 80IA for the AY 2015-16 to AY 2018-19 has been consider as contingent liability for which assessment is not completed.

(ii) Siddharth Infraprojects Pvt. Ltd. (the âClaimantâ) has initiated an arbitration proceeding against SEL in relation to a sub-contract agreement dated October 31, 2007 between the Claimant and SEL. Pursuant to the aforesaid sub-contract agreement, SEL sub contracted the work under the main contract between SEL and MPRDC for rehabilitation and upgradation of package 11 of Seoni Chiraidongri Road. The Claimant has alleged that SEL had committed breaches of the terms of the sub-contract agreement by unilaterally reducing its scope of work covered under the sub-contract agreement without the permission of the MPRDC. The Claimant has claimed an aggregate amount of Rs.8160.00 Lakhs (March 31, 2017: Rs.8160.00 Lakhs ) on account of, inter alia: (i) amount not paid for the work done; (ii) overhead losses suffered by the Claimant; (iii) losses suffered on account of profit not earned at appropriate time; (iv) loss of productivity; (v) opportunity losses; (vi) compensation for interest charges paid to the bank; (vii) loss due to under utilized tools, plants and machineries. SEL has been submitted its statement of defense before the Arbitral Tribunal. The aggregate amount involved is Rs.8160 Lakhs (March 31, 2017: Rs.8160.00 Lakhs ). The matter is currently pending.

Company has given corporate guarantee to banks for 82265.00 Lakhs (March 31, 2017: Rs.83652.50 Lakhs ) against the finance facility given by the banks to subsidiary companies.

(d) Pending Litigation with Minority Shareholders of Step down Subsidiary:

M/s. Monte Carlo Ltd., the minority Shareholder of Bijapur Hungud Tollway Pvt. Ltd. (âBHTPLâ) (a step down subsidiary of the Company), holding 23% of the total Paid Up Share Capital in the BHTPL, has filed Company Petition No. 78 of 2013 under sections 397 & 398 of the Companies Act,1956 before the Honâble Company Law Board (CLB), Mumbai Bench, alleging acts of oppression and mismanagement by the majority shareholders SlPL, SEL (Sadbhav Group) and the past and present Directors of the BHTPL appointed by the Sadbhav Group (hereinafter referred to as âRespondentsâ). SIPL had filed an Application to stay proceedings before the CLB and refer matters to arbitration on the ground that all disputes raised in the BHTPL Petition were arbitrable and should therefore be referred to arbitration under the arbitration clause contained in the Shareholders Agreement dated July 9, 2010 between Monte Carlo, Sadbhav & BHTPL. The said Application was dismissed by the CLB by Order dated January 8, 2014. SIPL then proceeded to file a Writ Petition before the Honâble Gujarat High Court challenging the January 8 Order. The Writ Petition was dismissed by single judge of Honorable High Court of Gujarat by Order dated August 14, 2014. SIPL has filed Letters Patent Appeal No.1070 of 2014 before the Division Bench of the Honâble Gujarat High Court against the August 14 Order. The Honâble Gujarat High Court has by Order dated November 24, 2014 continued the interim Orders passed during the pendency of the Writ Petition and further directed to stay proceedings before CLB till disposal of LPA. The LPA is, pending hearing before the Honâble Gujarat High Court. There is no financial impact on the BHTPL in relation to the said litigation.

7.1 The Fair value of Investments in Bonds and Debentures, NSCs, Long term Loans and advances, Bank Deposits with more than 12months maturities and earmarked balances approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

The fair value of Borrowed Funds approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

7.2 Refer Note 49 for information on financial asset pledged as security

8. Fair Value Measurement of Financial Assets and Liabilities

8.1 There are no transfer between level 1 and level 2 during the year.

8.2 The company policy is to recognize transfers into and transfer out of fair values hierarchy levels as at the end of the reporting period.

8.3 Valuation technique and inputs used to determine fair value in level 2

The Company enters into derivative financial instruments with Bank. Interest rate swaps, option contract are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques includes forward pricing and swap models, using present value calculations. The modes incorporate various inputs include currency spot rate, risk free interest rate of respective currency, currency volatility and interest rate curves. The derivative instrument fair value using marked-to-market valuation as at March 31, 2018.

The cost of investments in equity instruments approximates fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

9. Financial Risk Management

9.1 Financial Instruments Risk management objectives and Policies

The Companyâs activities expose it to market risk, credit risk and liquidity risk. In order to minimize any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign currency option contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. Risk management systems are reviewed periodically to reflect changes in market conditions and the Companyâs activities. The Board of Directors oversee compliance with the Companyâs risk management policies and procedures, and reviews the risk management framework.

9.2 Market Risk

- a simultaneous, parallel foreign exchange rates shift in which the INR appreciates / depreciates against all currencies by 2 %

The following assumption has been made in calculating the sensitivity analyses:

9.3 Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company transacts business in local currency and in foreign currency, primarily in USD. The Company has obtained foreign currency loans and is, therefore, exposed to foreign exchange risk. The Company may use foreign exchange options towards hedging risk resulting from changes and fluctuations in foreign currency exchange rate. These foreign exchange contracts, carried at fair value, may have varying maturities varying depending upon the primary host contract requirements and risk management strategy of the company.

The Company manages its foreign currency risk by hedging appropriate percentage of its foreign currency exposure, as approved by Board as per established risk management policy.

9.4 Interest Rate Risk

9.5 Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Companyâs objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and deploys cash management system. It maintains adequate sources of financing including debt at an optimized cost.

9.6 Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.

Credit risk arises primarily from financial assets such as trade and other receivables, Loans and advances, cash and cash equivalent and other balances with banks.

Credit risk on cash and cash equivalents is limited as company deposits with the banks.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables as on March 31, 2018 -Rs.162804.86 Lakhs, as on March 31, 2017 - Rs.170097.77 Lakhs .

10. Capital Management

For the purpose of the Companyâs capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders of the Company.

The Companyâs objective for capital management is to maximize shareholder value and safeguard business continuity.

The Company determines the capital requirement based on annual operating plans and other strategic plans. The funding requirements are met through equity and operating cash flows generated.

11.1 Sadbhav Infrastructure Project Ltd.. is the holding company of all the step down subsidiary companies.

11.2 Invesements in Subsidiaries, Associates and Joint Ventures are accounted at Cost

12. Segment Reporting

The Company is primarily engaged in the business of Engineering, Procurement and Construction (EPC) relating to infrastructure sector comprising of Roads, Bridges, Irrigation, Mining, Metro, Power etc. Information reported to and evaluated regularly by the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessing performance focuses on the business as a whole and accordingly, in the context of operating segment as defined under lnd AS 108 âOperating Segmentsâ there is a single reportable segment â EPC.â Hence no segment reporting is made.

13. List of Related Parties

(a) Related Party with whom Control Exists Subsidiary

Sadbhav Infrastructure Project Limited and Mysore-Bellary Highway Pvt. Ltd.

Step-down Subsidiaries:

Nagpur-Seoni Express Way Limited, Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Tollway Limited, Rohtak Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd, Hyderabad Yadgiri Tollway Pvt. Ltd. Maharashtra Border Check Post Network Ltd., Shreenathji Udaipur Tollway Pvt. Ltd, Bhilwara Rajsamand Tollway Pvt. Ltd., Dhule Palesner Tollway Ltd. and Rohtak-Hissar Tollway Pvt. Ltd., Sadbhav nainital Highway Pvt. Ltd., Sadbhav Rudrapur Highway Pvt. Ltd., Sadbhav Bhavnagar Highway Pvt. Ltd., Sadbhav Una Highway Pvt. Ltd., Sadbhav Bangalore Highway Pvt. Ltd., Sadbhav Vidarbha Highway Pvt. Ltd., Sadbhav Udaipur Highway Pvt. Ltd., Sadbhav Jodhpur Ring Road Pvt. Ltd., Sadbhav Tumkur Highway Pvt. Ltd.

Joint Ventures:

SEL-GKC JV, Sadbhav-Annapurna, Sadbhav-Vishnushiva, Sadbhav-Vaishnovi, Corsan Corviam Construction SA -Sadbhav and SEL-PIPL

(b) Related Party with whom transaction during the year Key Management Personnel (KMP):

Shri Vishnubhai M. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Shri Vasistha C. Patel, Shri Vikram R. Patel, Shri Tushar D. Shah, Shri Atul Ruparel, Shri Arun S. Patel, Shri Sandip A. Sheth, Shri Mirat N. Bhadlawala, Shri Sandip Patel, Smt. Purvi S. Parikh

Relatives of KMP:

Smt. Shantaben V. Patel

Entities in which KMP / relatives of KMP can exercise significant influence

Sarjan Infracon Pvt. Ltd., Veer Infracon Pvt. Ltd., Veer Procon Ltd., Sadbhav Finstock Pvt. Ltd., Sadbhav Realty

Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Bhavna Engineering Company Pvt. Ltd.

NOTE:

1 Sub-contracting income from subsidiaries includes Rs.24339.42 lakhs (1426.31 lakhs), Rs.22039.49 lakhs(Nil), Rs.24804.34 lakh (2488.66 lakhs), Rs.17807.04 lakhs (Nil), Rs.13076.58 lakhs (537.09 lakhs) from Sadbhav Bhavnagar Highway Pvt. Ltd., Sadbhav Banglore Highway Pvt. Ltd., Sadbhav Rudrapur Highway Pvt. Ltd., Sadbhav Udaipur Highway Pvt. Ltd. and Sadbhav Una Highway Pvt. Ltd. respectively.

2 Sub contracting expenditure of Relatives of Key Personnel and Enterprises over which Relatives of Key Managerial Persons have significant influence includes Rs.2440.26 Lakhs (Rs.2278.74 lakhs), Rs.767.14 lakhs (Rs.1627.65 lakhs), Rs.668.03 lakhs(Nil), Rs.578.72 lakhs (Rs.2859.67 lakhs) payable to Bhavna Engineering Co. Pvt. Ltd., Sarjan Infracon Pvt. Ltd., Veer Infracon Pvt. Ltd. and Veer Procon Pvt. Ltd. respectively.

3 Remuneration expenses includes Rs.84.00 lakhs (Rs.82.50 lakhs) paid to Nitin R. Patel, Executive Director & CFO of the company and Rs.17.49 lakhs (Rs.16.05 lakhs) paid to Tushar D. Shah Company Secretary of the company. Income from subsidiaries includes Rs.5375.14 lakhs(Rs.4662.74 Lakhs) receivable from SIPL.

4 The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.

5 Terms and conditions of the balance outstanding.

Outstanding balances at the year end are unsecured and interest free except short term loan and settlement occurs in cash as per the terms of agreement Short term loans (unsecured) in INR given to Sadbhav Infrastructure Projects Ltd (SIPL) carries interest rate @ 11% p.a. (March 31, 2017 : 11% ) The company has not provided any commitment to the related party as at March 31, 2018 except mentioned at Note No. 43. Outstanding balances towards rent and reimbursement are unsecured and will be settled as per the terms of the agreement.

There is no guarantee given or received except mentioned at Note No. 58.

14. AS per Ind AS - 17 - âLeasesâ, the disclosure of Operating Leases as defined in the accounting standard are as follows:

The total of future minimum lease payments under non-cancellable operating leases are for each of the following periods:

(b)The Company has recognised lease payment of Rs.657.68 Lakhs (March 31, 2017: Rs.492.89 Lakhs) in the statement of profit and loss under the head âMachinery Rentâ during the year.

At the conclusion of the Term, Lessee has right to exercise one or more of the following options.

(i) Request Lessor to agree to a renewal of Term or

(ii) Surrender the Equipment as provided. Upon receipt of the Equipment by Lessor or Lessorâs agent, the Rental Schedule shall terminate with no further obligation or liability on Lessee.

(iii) Purchase the Equipment at the Fair Market Value. In cases, wherever Minimum Value is specified in the applicable Rental Schedule, Lessee shall have the option to buy the Equipment at higher of the Minimum Value or Fair Market value.

15. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Ind AS - 36 - âImpairment of Assetsâ

16. Borrowing Cost:

During the Year, Company has capitalized borrowing cost of Rs.18.77 Lakhs (March 31, 2017 : Rs.10.57 lakhs) according to Ind AS-23 âBorrowing Costâ The capitalization rate used to determine the amount of borrowing cost to be capitalized is the interest rate applicable to the companyâs borrowing which 10% p.a.

17. DETAILS OF LOAN GIVEN, INVESTMENT MADE & GUARANTEE GIVEN COVERED U/s 186(4) OF THE COMPANIES ACT. 2013

Loans given and investment made are given under respective heads.

18. No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries

19. In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilities and doubtful assets have been made.

20. Pursuant to Share Purchase Agreement dated 16.01.2017 entered by the company with D. Thakkar Construction Pvt. Ltd. and DTC Toll Projects Pvt. Ltd. (collectively referred as DTC), Sadbhav Infrastructure Projects Limited (SIPL), a subsidiary company of the company, the company has Sold 3125 shares of Maharashtra Border Check post Network Ltd (MBCPNL) to DTC. However the said shares are pledged with the lenders of MBCPNL, hence Transfer formalities are pending.

In terms of Memorandum of understanding (MOU) dated 17/01/2017 between the company and Sadbhav Infrastructure Projects Limited (SIPL), a subsidiary company of the company, the company has sold 6,590 shares of of Maharashtra Border Check Post Network Ltd. (MBCPNL) to SIPL. MBCPNL has received approval from Government Maharashtra for transfer of shares from the company to SIPL. As at reporting date transfer formalities of 6,590 shares are in the process as shares held by the company are being pledged with lenders of MBCPNL.

21. All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated.

Mar 31, 2017

Under previous GAAP, foreign currency loan liability shown net off risk covered under derivative deal.

1. The Company had adopted an option under Para 46A of AS 11 under previous GAAP which the company has elected to continue as per para D13AA of Ind AS 101 ''First time adoption Indian Accounting Standard". Accordingly the exchange difference arising on reporting of long-term foreign currency monetary items, in so far as they relate to the acquisition of depreciable asset, is added or deducted from the cost of the asset and shall be amortised over the balance life of the asset. During the year company has added Rs, -148.49 Lakhs 637.07 Lakhs) to the capital asset towards such exchange differences. The unamortised amount of such exchange difference included into the carrying amount of asset is Rs 1687.82 Lakhs 1220.18 Lakhs).

2. The Company has applied the different estimated useful lives as specified in Schedule II in respect of certain assets as disclosed in accounting policy on depreciation on the basis of working of machineries in very tough condition at project sites. In support of that Company has also taken an opinion of Chartered Engineer & Valuer regarding the different useful life. Accordingly the unamortised carrying value of those assets is being depreciated over the remaining useful life as adopted by the Company instead of useful life specified in the Schedule II, resulting in a higher depreciation of Rs, 845.71 lakhs 784.99 lakhs) charged to profit and loss account.

3. Refer Note No. 49 for information on property, plant and equipment pledged as security.

(d) Rights of Shareholders and Repayment of Capital:

(i) The Company has only one class of shares referred to as equity shares having a par value of Re. 1/-

(ii) Each holder of equity shares is entitled to one vote per share.

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

The Employee stock option scheme ( ESOS ) 2008 was approved by the shareholder at their Annual General Meeting of the company held on September 27, 2008.

The employee option plan is designed to reward the employees for their past association and performance as well as to motivate them to contribute to the growth and profitability of the company.

All the permanent employees of the company and its subsidiaries excluding promoters of the company, as decided by the Remuneration committee, are entitled to be granted for ESOS 2008. Vesting of the option would be subject to continued employment with the company. Once vested, the option is remains exercisable for period of three years. Options when exercisable, each option is converted into one equity share.

Detail of Security

(a) ICICI Bank - 120 debentures of Rs, 1 Crore each

(i) Residual charge over all the movable assets of the company.

(ii) Exclusive charge over the secured Immovable Property i.e. piece of non agricultural freehold land situated at Maharajpura of Kadi Taluka, in favour of the Debenture Trustee (for the benefits of the secured parties)

(iii) Pledged in favour of ICICI Bank Ltd. 3,52,22,522 (March 31, 2016: 3,52,22,522 and April 1, 2015: 3,10,96,308) number of equity shares of Sadbhav Infrastructure Project Ltd.

Rate of Interest : Rate of interest of above NCD is ICICI Bank base rate plus spread of 1.75%.

(b) HDFC Asset Management Co. Ltd. - 1200 debentures of Rs, 10 Lakhs each

(i) Pledge of 62,58,060 (March 31, 2016: 62,58,060 and April 1, 2015: 62,58,060) shares of Sadbhav Engineering Ltd. by Sadbhav Finstock Pvt. Ltd.

(ii) NDU and negative lien to be provided by promoter on 3% equity shares of Sadbhav Engineering Ltd.

(iii) Agriculture Land Situated at Sonarda, Gandhinagar held by Bhavnaben Patel, Truptiben Patel, Dipakbhai Patel and Vishnubhai Patel.

Rate of Interest : Coupon rate of 9 % plus Redemption Premium resulting Effective rate of Interest (IRR) of 12.15 %, 12.15% & 14.19% p.a. at maturity.

Interest Payable on Rupee Term Loan from Banks & Financial Institutions is ranging from 7.90% to 12.25%. Interest payable on ECB are Linked to LIBOR which are 215 basis point and 250 basis point over LIBOR. The Repayment Schedule of ECB are included in above Maturity Profile of Term Loans.

Loan repayable during the year 2017-18 are shown under ''Current Maturity of Long Term Debts''(Note No 28 ''Other Financial Liabilities'')

Detail of Security

(a) Hypothecation of stock of construction materials lying at sites, books debts and other receivables.

(b) First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj along with furnitures, fixtures etc. owned by company and All Fixed Assets (Movable & Immovable) of the company which are not hypothecated/Charged to other lenders. Second charge on machineries owned by the company.

(c) Personal Guarantee of Shri Vishnubhai M Patel, Shri Vasisthakumar Patel, Shri Vikramkumar Patel and Smt. Shantaben V. Patel.

39.2 Information about the characteristics of its defined benefit plans - Gratuity benefit plan.

The benefit is governed by the Payment of Gratuity Act, 1972. The Key features are as under:

Features of the defined benefit plan Remarks

Benefit offered 15 / 26 x Salary x Duration of Service

Salary definition Basic Salary including Dearness Allowance (if any)

Benefit ceiling Benefit ceiling of Rs, 10,00,000 was applied

Vesting conditions 5 years of continuous service (Not applicable in case of death / disability)

Benefit eligibility Upon Death or Resignation / Withdrawal or Retirement

Retirement age 58 years

4 The trustees are responsible for the governance of the plan. The day-to-day administration of the scheme is carried out by the trustees. It is the trustee''s duty to look after assets on behalf of employees who are entitled to benefit from those assets at some future date. Investment of assets of fund is key responsibility of the trustees. The trustees must review investment performance regularly.

5 Risk to the Plan

Following are the risk to which the plan exposes the entity :

A Actuarial Risk:

It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:

Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.

B Investment Risk:

C Liquidity Risk:

D Market Risk:

E Legislative Risk:

Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/ regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.

Limitation of method used for sensitivity analysis :

6 Details of Asset- Liability Matching Strategy

7 Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt:-

(i) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs, 46.42 Lakhs (March 31, 2016: Rs, 46.42 Lakhs and April 1, 2015: 46.42 Lakhs) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs 46.42 Lakhs (March 31, 2016: Rs, 46.42 Lakhs and April 1, 2015: 46.42 Lakhs) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court along with an application for stay of the Impugned Order. The Bombay High Court, Nagpur bench, through its interim order, granted a stay pending the decision of the appeal and directed the company to deposit 50% of the amount of the decree passed by the Civil Judge. The company has paid Rs, 21.020 Lakhs (March 31, 2016: Rs, 21.20 Lakhs and April 1, 2015: 21.20 Lakhs). The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

(ii) Company has received order of the Commissioner of service tax on 1st April, 2013 wherein Commissioner upheld the demand of Rs, 199.13 Lakhs (March 31, 2016: Rs, 199.13 Lakhs and April 1, 2015: 199.93 Lakhs) and impose penalty of Rs, 345.92 Lakhs (March 31, 2016: 345.92 Lakhs and April 1, 2015:345.92 Lakhs). Company filed appeal before CESTAT and received unconditional stay order on order of Commissioner hence no provision has been made.

(iii) Demand under Service Tax Act, 1994 Rs, 67.29 Lakh (March 31, 2016: Rs, Nil and April 1, 2015: Nill). The Commissioner of Service Tax, Ahmedabad, filed an appeal before Supreme Court of India against the order of CESTAT passed in favor of the Company. The matter is currently pending.

(iv) The ACIT, Central Circle - 1(1), Ahmedabad served an assessment order to SEL in relation to adjustment of losses incurred by the undertaking of SEL against the eligible income of the undertakings while computing the deductions and other expenses for the assessment year 2005-06 ,2006-07 & 2007-08 (the "Impugned Order"). SEL preferred an appeal before the CIT (Appeals) - XIV (the "CIT Appeals") challenging the Impugned Order. The CIT Appeals, through its order, partly disallowed SEL''s claim for deduction and other expenses under Section 80-IA of the IT Act and other expenses, (the "CIT(A) Order"). Subsequently, SEL preferred an appeal before the ITAT challenging CIT (A) Order and the ACIT, Central Circle - 1(1), Ahmedabad also preferred an appeal before the ITAT against the CIT(A) Order. The ITAT, through its order, allowed deductions under Section 80-IA of the IT Act (the "ITAT Order"). The CIT filed a review petition before the ITAT. Subsequently, the CIT preferred an appeal before the Gujarat High Court against the ITAT Order. The aggregate amount of Tax Liability for All the 3 Asst. Year involved is Rs, 611.03 Lakhs (March 31, 2016: Rs, 611.03 Lakhs and April 1, 2015: 611.03 Lakhs). The matter is currently pending.

(v) The DCIT, Central Circle 1(1), Ahmedabad issued a show cause notice to SEL seeking reasons for not imposing a penalty under Section 271(1)(c) of the IT Act with respect to the alleged concealment of particulars of income and inaccurate particulars being furnished for assessment year AY 2011-12. SEL filed a reply to the show cause notice. The DCIT, Central Circle 1(1), Ahmedabad passed orders for AY 2011-12 imposing total penalty (the "Penalty Order") of Rs, 13.25 Lakhs (March 31, 2016: Rs, 13.25 Lakhs and April 1, 2015: Nil). Subsequently, SEL has preferred an appeal before the CIT, Appeals- 11, Ahmedabad against the Penalty Orders. CIT Appeals-11 has passed the order and drop the penalty proceedings. The DCIT, Central Cirle 1(1) filled the appeal with ITAT, Ahmedabad. The matters are currently pending.

(vi) The ACIT, Central Circle 1(1), Ahmedabad served five assessment orders to SEL along with five demand notices for an aggregate amount of Rs 1277.00 Lakhs (March 31,2016: 1277.00 Lakhs and April 1, 2015: 1277.00 Lakhs) in relation to the assessment years 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12 on account of disallowance of some expenditure and deductions under Section 80-IA of the IT Act. SEL preferred an appeal before the CIT (Appeals). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs, 5746.80 Lakhs (March 31, 2016: 5746.80 Lakhs and April 1, 2015: 5746.80 Lakhs). Subsequently, the ACIT, Central Circle 1(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount involved is Rs, 1953.30 Lakhs (March 31, 2016: 1953.30 lakhs and April 1, 2015: 1953.30 Lakhs). The matter is currently pending.

(vii) The DCIT, Central Circle 1(1), Ahmedabad has reopened the case for AY 2011-12 and passed the order by disallowing the expenditure of Rs, 378.99 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil). Subsequently, SEL has preferred an appeal before the CIT, Appeals-11, Ahmedabad against the said Orders. The CIT Appeals, through its order partly allowed the expenditure and deductions. Subsequently, the DCIT, Central Circle -4(1)(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs, 244.64 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil). The matter is currently pending.

(viii) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs, 450.73 Lakhs (March 31, 2016: Rs, 450.73 Lakhs and April 1, 2015: Nil) and disallow SEL''s claim for deduction for a sum of Rs, 379.47 Lakhs (March 31, 2016: Rs, 379.47 Lakhs and April 1, 2015: Nil) nder Section 80IA(4) of the IT Act for assessment years 2012-13 with respect to agreements entered with GoI and state governments for construction of highways and roads. The DCIT, Central Circle 1(1), Ahmedabad further held that SEL is a contractor who executed the work and was not eligible for such deductions. SEL preferred an appeal before the CIT, Central Circle- 1(1). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs, 829.90 Lakhs. Subsequently, the ACIT, Central Circle 1(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs, 269.36 Lakhs (March 31, 2016: Rs, 269.36 Lakhs and April 1, 2015: Nil). The matter is currently pending.

(ix) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs, 377.87 Lakhs (March 31, 2016: Rs, 377.87 Lakhs and April 1, 2015: Nil) disallow SEL''s claim for deduction for a sum of Rs, 7716.78 Lakhs (March 31, 2016: Rs, 7716.78 Lakhs and April 1, 2015: Nil) under Section 80IA(4) of the IT Act for assessment years 2013-14 . SEL has preferred an appeal before the CIT(A),Ahmedabad. The CIT Appeals, through its order, allowed the expenditure and deductions amounting. Subsequently, the DCIT, Central Circle 4(1)(1), Ahmedabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs, 836.74 Lakhs. The matter is currently pending.

(x) The DCIT, Central Circle 1(1), Ahmedabad, through its order, disallowed expenses of Rs, 448.85 Lakhs (March 31, 2016: Rs, 448.85 Lakhs and April 1, 2015: Nil) disallow SEL''s claim for deduction for a sum of Rs, 2993.28 Lakhs (March 31, 2016: Rs, 2993.28 Lakhs and April 1, 2015: Nil) under Section 80IA(4) of the IT Act for assessment years 2014-15 . SEL has preferred an appeal before the CIT(A), Ahmedabad. The CIT Appeals, through its order, allowed the expenditure and deductions amounting. Subsequently, the DCIT, Central Circle 4(1)(1), Ahmedabad preferred an appeal before the ITAT.The aggregate amount of tax involved is Rs, 1048.50 Lakhs (March 31, 2016: Rs, 1048.50 Lakhs and April 1, 2015: Nil). The matter is currently pending.

(xi) The Deputy Commercial Tax Commissioner, Audit Divison-1 Ahmedabad has passed order against "Jililn Sadbhav JV" for VAT demand of Rs, 702.00 Lakhs (March 31, 2016: Rs, 702.00 Lakhs and April 1, 2015: Rs, 702.00 Lakhs) inclusive of interest Rs, 330.18 Lakhs (March 31, 2016: Rs, 330.18 Lakhs and April 1, 2015: 330.18 Lakhs and Penalty of Rs, 74.36 Lakhs (March 31, 2016: Rs, 74.36 Lakhs and April 1, 2015: 74.36 Lakhs). In Jilin-Sadbhav JV, Sadbhav Engineering Limited is having 48% share. Against this Order the Joint Venture has filed an appeal in the Gujarat Value Added Tax Tribunal at Ahmedabad. The Tribunal, through its order, granted a stay against the recovery of outstanding demand on payment of Rs, 15 Lakhs (March 31, 2016: Rs, 15.00 Lakhs and April 1, 2015: Rs, 15.00 Lakhs). As the company has paid Rs, 15.00 Lakhs, no provision has been made.

(xii) The Company has received a show cause notice from the office of Mining Engineer, Mines and Geology Department, Udaipur on 05/02/2014 imposing penalty of Rs, 81.32 Lakhs (March 31, 2016: Rs, 81.32 Lakhs and April 1, 2015: Rs, 81.32 Lakhs) under rule 63, 37A (IX) of Rajasthan Minor Mineral Concession Rules, 1986. The Company has filed a Civil Writ Petition No.2635/2014 in The High Court of Rajasthan against the said notice. The Company has deposited Rs, 30.00 Lakhs (March 31, 2016: Rs, 30.00 Lakhs and April 1, 2015: Rs, 30.00 Lakhs) with the Mining Engineer, Mines and Geology Department, Udaipur as per stay order of the Honourable Court. Further proceeding is pending, hence no provision has been made.

(xiii) The Deputy commissioner of Commercial Taxes, Jharkhand has passed an Assessment Order under Jharkhand Value Added Tax, 2005 for FY 2010-11 for demand of Rs, 77.40 lakhs (March 31, 2016: Rs, 77.40 Lakhs and April 1, 2015: Rs; 77.40 Lakhs) and also has passed order for FY 2011-12 with demand of Rs, 152.83 lakhs (March 31,

2016: Rs, 152.83 Lakhs and April 1, 2015: Nil) . The company has filled Revision Application against both the orders to the "The Commissioner, Commercial Taxes Department - Jharkhand" therefore the same has not been provided in the Books of Accounts.

(xiv) The Dy. Excise & Taxation Commissioner cum Revisional Authority Sirsa has passed the Revised Order u/s 34(2) of Haryana Value Added Tax Act 2003 for FY 2010-11 with demand of Rs, 10.45 lakhs (March 31, 2016: Rs, 10.45 Lakhs and April 1, 2015: Nil) which includes Interest of Rs, 5.22 lakhs (March 31, 2016: Rs, 5.22 Lakhs and April 1, 2015: Nil). The same Authority has also passed the Revised Order for FY 2011-12 for demand of Rs, 149.40 lakhs ((March 31, 2016: 149.40 Lakhs and April 1, 2015: Nil) which includes the Interest of Rs, 67.31 lakhs (March 31, 2016: Rs, 67.31 Lakhs and April 1, 2015: Nil). The Company has filled the Appeal against the both these orders to the Honorable "VAT Tribunal, Haryana" therefore the same has not been provided in the Books of Accounts.

(xv) The Deputy commissioner of Sales Tax, Maharashtra LTU Nashik has passed an Assessment Order under Maharashtra Value Added Tax, 2002 for FY 2010-11 for demand of Rs, 13991.08 lakhs (March 31, 2016: Nil and April 1, 2015: Nil) which includes Interest of Rs, 4593.08 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil) and Penalty of Rs, 4699.00 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil). The company has filled Appeal against this order and also asked for stay on this demand.

(xvi) The Deputy commissioner of Sales Tax, Maharashtra LTU Nashik has passed an Assessment Order under Maharashtra Value Added Tax, 2002 for FY 2012-13 for demand of Rs, 4741.65 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil) which includes Interest of Rs, 1957.80 Lakhs (March 31, 2016: Nil and April 1, 2015: Nil). The company has filled Application for cancellation of this order.

(xvii) (i) A case before Workmen Compensation Commissioner, udaipur was filed for compensation of Rs, 11.69 Lakhs (March 31, 2016: Rs, 11.69 Lakhs and April 1, 2015: Nil) under Exployees Compensation Act, 1923. The matter is currently pending.

(ii) A case before Labour Court, Jabalpur was filed for compensation of Rs, 15.40 Lakhs (March 31, 2016: Rs, 15.40 Lakhs and April 1, 2015: Nil) under Industrial Dispute Act, 1947. The matter is currently pending.

(iii) An employee has filed case before Labour court at Balaghat for compensation of Rs, 13.20 Lakhs (March 31, 2016: Rs, 13.20 Lakhs and April 1, 2015: Nil) under Workmen Compensation Act, 1923. The matter is currently pending.

(b) Other Money for which the company is contingently liable:-

(i) The Finance Act (2), 2009 has amended Section 80IA(4) of the Income Tax Act, 1961 by substituting an explanation to Section 80IA with restrospective effect from 01.04.2000. On the basis of legal opinion and decided cases, the Company has continued to claim deduction under section 80-IA(4) of the Act on eligible projects and consequently the Company considers it appropriate not to create a liability for provision of Income Tax. However an amount of Total income tax of Rs, 13135.96 Lakhs (March 31, 2016: Rs, 5362.73 Lakhs and April 1, 2015: Rs, 3295.01 Lakhs) on claim of deduction/s 80IA for the AY 2013-14 to AY 2017-18 has been consider as contingent liability for which assessment is not completed.

(ii) Siddharth Infraprojects Private Limited (the "Claimant") has initiated an arbitration proceeding against SEL in relation to a sub-contract agreement dated October 31, 2007 between the Claimant and SEL. Pursuant to the aforesaid sub-contract agreement, SEL sub contracted the work under the main contract between SEL and MPRDC for rehabilitation and upgradation of package 11 of Seoni Chiraidongri Road. The Claimant has alleged that SEL had committed breaches of the terms of the sub-contract agreement by unilaterally reducing its scope of work covered under the sub-contract agreement without the permission of the MPRDC. The Claimant has claimed an aggregate amount of Rs, 8160.00 Lakhs (March 31, 2016: Rs, 8160.00 Lakhs and April 1, 2015: Rs, 8160.00 Lakhs) on account of, inter alia: (i) amount not paid for the work done; (ii) overhead losses suffered by the Claimant; (iii) losses suffered on account of profit not earned at appropriate time; (iv) loss of productivity; (v) opportunity losses;

(vi) compensation for interest charges paid to the bank; (vii) loss due to under utilised tools, plants and machineries. SEL has been submitted its statement of defence before the Arbitral Tribunal. The aggregate amount involved is Rs, 8160 Lakhs (March 31, 2016: Rs, 8160.00 Lakhs and April 1, 2015: Rs, 8160.00 Lakhs). The matter is currently pending

Company has given corporate guarantee to banks for 83652.50 Lakhs (March 31, 2016: Rs, 57757.00 Lakhs and April 1, 2015: Rs, 76136.00 Lakhs) against the finance facility given by the banks to subsidiary companies.

(d) During the FY 2013-14, minority shareholders of Bijapur Hungud Tollway Private Limited (''BHTPL'') (a step down subsidiary of the Company) has filed company petition no 78 of 2013 under section 347 and 398 of the Companies Act, 1956 with the Company Law Board - Mumbai Bench against Sadbhav Engineering Ltd a holding Company and its associates/affiliates wherein the company is also defendant. The Company Law Board (CLB) passed an order in favour of the minority shareholder although company pleaded that matter should be referred for arbitration as per shareholder agreement (SHA). Against the CLB order the company filled Special Civil Application (SCA) with Hon''ble High Court of Gujarat that matter of minority shareholder should be referred as per SHA. Hon''ble High Court accepted SCA of the company and granted interim relief where by further proceeding of CLB have been stayed. Currently the matter is pending before Hon''ble High Court of Gujarat. The management believes that, based on legal advice, the outcome of above contingencies will be favourable and that any loss is not probable. Accordingly, no amounts have been accrued or paid in regard to dispute.

9 The Fair value of Investments in Bonds and Debentures, NSCs, Long term Loans and advances, Bank Deposits with more than 12months maturities and earmarked balances approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

The fair value of Borrowed Funds approximate carrying value as the interest rate of the said instruments are at the prevailing market rate of interest.

10. Refer Note 49 for information on financial asset pledged as security.

11. There are no transfer between level 1 and level 2 during the year.

12 The company policy is to recognise transfers into and transfer out of fair values hierarchy levels as at the end of the reporting peroid.

13. Valuation technique and inputs used to determine fair value in level 2.

The cost of investments in equity instruments approximates fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

14. Financial Risk Management

15. Financial Instruments Risk management objectives and Policies

The Company''s principal financial liabilities comprise borrowings and trade & other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to support its operations. The Company''s principal financial assets include Investments, trade & other receivables and cash and bank balance that derive directly from its operations.

The Company''s activities expose it to market risk, credit risk and liquidity risk. In order to minimise any adverse effects on the financial performance of the company, derivative financial instruments, such as foreign currency option contracts are entered to hedge certain foreign currency exposures and interest rate swaps to hedge certain variable interest rate exposures. Derivatives are used exclusively for hedging purposes and not as trading / speculative instruments.

The Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. Risk management systems are reviewed periodically to reflect changes in market conditions and the Company''s activities. The Board of Directors oversee compliance with the Company''s risk management policies and procedures, and reviews the risk management framework.

16. Market Risk

Within the various methodologies to analyse and manage risk, Company has implemented a system based on "sensitivity analysis" on symmetric basis. This tool enables the risk managers to identify the risk position of the entities. Sensitivity analysis provides an approximate quantification of the exposure in the event that certain specified parameters were to be met under a specific set of assumptions. The risk estimates provided here assume:

- a simultaneous, parallel foreign exchange rates shift in which the INR appreciates / depreciates against all currencies by 2%

The following assumption has been made in calculating the sensitivity analyses:

17. Foreign Currency Risk

The Company manages its foreign currency risk by hedging appropriate percentage of its foreign currency exposure, as approved by Board as per established risk management policy.

8. Interest Rate Risk

19.Liquidity Risk

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted

20. Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation.

Credit risk encompasses both, the direct risk of default and the risk of deterioration of credit worthiness.

Credit risk arises primarily from financial assets such as trade and other receivables, Loans and advances, cash and cash equivalent and other balances with banks.

Credit risk on cash and cash equivalents is limited as company deposits with the banks.

The maximum exposure to the credit risk at the reporting date is primarily from trade receivables as on March 31, 2017 -Rs, 170097.77 Lakhs, as on March 31, 2016 - Rs, 103724.73 Lakhs and as on April 01, 2016 - Rs, 93601.59086 Lakhs.

21 Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other reserves attributable to the equity holders of the Company.

The Company''s objective for capital management is to maximize shareholder value and safeguard business continuity.

The Company determines the capital requirement based on annual operating plans and other strategic plans. The funding requirements are met through equity and operating cash flows generated.

22 Sadbhav Infrastrucure Project Ltd.. is the holding company of all the step down subsidiary companies.

23 Pursuant to Restated Share Purchase Agreement dated October 27, 2015 between Dhule Palesner Tollway Ltd. (DPTL), Sadbhav Infrastructure Projects Ltd.. (SIPL), a subsidiary company of SEL, Sadbhav Engineering Ltd.. (SEL), the SIPL has acquired 60% equity stake from HCC Group, JLL Group in Dhule Palesner Tollway Ltd.. (DPTL) . After acquiring the said shares DPTL become 100% subsidiary of SIPL.

24 For Kapurdi Project 75% upto 31/07/2015 and 98% from 01/08/2015. For Jalipa Project 75% during the FY 2015-16. Work order for Jalipa Project yet not received.

25 Investments in Subsidiaries, Associates and Joint ventures are accounted at Cost.

26 Segment Reporting

As permitted by Ind AS - 108 - " Operating Segments", if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

27 List of Related Parties

(a) Related Party with whom Control Exists Subsidiary

Sadbhav Infrastructure Project Limited and Mysore-Bellary Highway (P) Ltd.

Step-down Subsidiaries:-

Nagpur-Seoni Express Way Limited, Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Tollway Limited, Rohtak Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd., Hyderabad Yadgiri Tollway Pvt. Ltd. Maharashtra Border Check Post Network Ltd., Shreenathji Udaipur Tollway Pvt. Ltd., Bhilwara Rajsamand Tollway Pvt. Ltd.,Dhule Palesner Tollway Ltd. and Rohtak-Hissar Tollway (P) Ltd., Sadbhav Nainital Highway Pvt. Ltd., Sadbhav Rudrapur Highway Pvt. Ltd., Sadbhav Bhavnagar Highway Pvt. Ltd., Sadbhav Una Highway Pvt. Ltd., Sadbhav Bangalore Highway Pvt. Ltd.

Joint Ventures:

SEL-GKC JV, Sadbhav-Annapurna, Sadbhav-Vishnushiva, Sadbhav-Vaishnovi, Corsan Corviam Construction SA - Sadbhav and SEL-PIPL.

(b) Related Party with whom transaction during the year Key Management Personnel (KMP):

Shri Vishnubhai M. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Shri Vasistha C. Patel, Shri Vikram R. Patel, Shri Atul Ruparel, Shri Arun S. Patel, Shri Sandip A. Sheth, Shri Mirat N. Bhadlawala, Shri Sandip Patel, Smt. Purvi S Parikh, Shri Tushar D. Shah.

Relatives of KMP:

Smt. Shantaben V. Patel & V. M. Patel (HUF)

Entities in which KMP / relatives of KMP can exercise significant influence

Sarjan Infracon Pvt. Ltd., Veer Procon Ltd., Sadbhav Finstock Pvt. Ltd., Sadbhav Realty Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Bhavna Engineering Company Pvt. Ltd.

NOTE:-

1 The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions.

2 Terms and conditions of the balance outstanding.

Outstanding balances at the year end are unsecured and interest free except short term loan and settlement occurs in cash as per the terms of agreement. Short term loans (unsecured) in INR given to Sadbhav Infrastructure Projects Ltd (SIPL) carries interest rate @ 11% p.a. (March 31, 2016 : 11% and April 1, 2015: 11%)

The company has not provided any commitment to the related party as at March 31, 2017 except mentioned at Note No. 43. Outstanding balances towards rent and reimbursement are unsecured and will be settled as per the terms of the agreement.

There is no gurantee given or received except mentioned at Note No 58.

(b) The Company has recognised lease payment of Rs, 492.89 (March 31, 2016: Rs, 66.77 Lakhs and April 1, 2015: Nil) in the statement of profit and loss under the head "Machinery Rent" during the year.

At the conclusion of the Term, Lessee has right to exercise one or more of the following options.

(i) Request Lessor to agree to a renewal of Term or

(ii) Surrender the Equipment as provided. Upon receipt of the Equipment by Lessor or Lessor''s agent, the Rental Schedule shall terminate with no further obligation or liability on Lessee.

28There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Ind AS - 36 - "Impairment of Assets".

56 Borrowing Cost:

During the Year, Company has capitalized borrowing cost of Rs, 10.57 Lakhs (March 31, 2016 : Rs, Nil) according to Ind AS-23 "Borrowing Cost" The capitalization rate used to determine the amount of borrowing cost to be capitalized is the inter set rate applicable to the company''s borrowing which 10% p.a.

29 No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

30 In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilities and doubtful assets have been made.

31 Pursuant to Share Purchase Agreement dated 16.01.2017 entered by the company with D. Thakkar Construction Pvt. Ltd. and DTC Toll Projects Private Limited (collectively referred as DTC), Sadbhav Infrastructure Projects Limited (SIPL), a subsidiary company of the company, the company has Sold 3125 shares of Maharshtra Border Checkpost Network Ltd. (MBCPNL) to DTC. However the said shares are pledged with the lenders of MBCPNL, hence Transfer formalities are pending.

In terms of Memorandum of understanding (MOU) dated 17/01/2017 between the company and Sadbhav Infrastructure Projects Limited (SIPL), a subsidiary company of the company, the company has sold 6,590 shares of of Maharshtra Border Checkpost Network Ltd (MBCPNL) to SIPL. MBCPNL has received approval from Government Maharashtra for transfer of shares from the company to SIPL. As at reporting date transfer formalities of 6,590 shares are in the process as shares held by the company are being pledged with lenders of MBCPNL.

* For the purpose of this clause, the term "Specified Banks Notes" shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number SO 340E, dated 8th November, 2016.

32. All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated.

Mar 31, 2016

1. The company has adopted an option under para 46A of AS 11 - "The Effect of Changes in Foreign Exchange Rates", inserted by notification no G.S.R. 914(E) dated December 29, 2011 issued by Ministry of Corporate Affairs, and accordingly the exchange difference arising on reporting of long term foreign currency monitory items, in so far as they relate to the acquisition of depreciable asset, is added or deducted from the cost of the asset and shall be amortized over the balance life of asset. During the year company has added Rs. 637.07 Lakh (Rs. 445.97 Lakhs) to the capital asset towards such exchange differences. The unamortized amount of such exchange difference included into the carrying amount of asset is Rs. 1220.18 Lakhs (862.34 Lakhs).

2. The Company has applied the different estimated useful lives as specified in Schedule II in respect of certain assets as disclosed in accounting policy on depreciation on the basis of working of machineries in very tough condition at project sites. In support of that Company has also taken an opinion of Chartered Engineer & Value regarding the different useful life. Accordingly the unamortized carrying value of those assets is being depreciated over the remaining useful life as adopted by the Company instead of useful life specified in the Schedule II. This changes result in a higher depreciation of Rs. 784.99 lakhs (Rs. 537.89 lakhs) charged to profit and loss account.

3. Land purchase includes the amount of Rs. 618.06 Lakhs which was wrongly capitalized in Building during the year 2014-15 and depreciation of Rs. 8.17 Lakhs has been provided in last year on the same, was written back and adjusted from current year depreciation of building.

4. All property plant and equipments are pledged as security through first charge and/or second charges for liability of Rs. 97088.63 Lakhs (Rs. 100826.02 Lakhs).

5. Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt:-

(i) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs. 46.42 Lakhs (Rs. 46.42 Lakhs) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lakhs (Rs. 46.42 Lakhs) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court along with an application for stay of the Impugned Order. The Bombay High Court, Nagpur bench, through its interim order, granted a stay pending the decision of the appeal and directed the company to deposit 50% of the amount of the decree passed by the Civil Judge. The company has paid Rs. 21.20 Lakhs. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

(ii) Company has received order of the Commissioner of service tax on 1st April, 2013 wherein Commissioner upheld the demand of Rs. 199.13 Lakhs (Rs. 199.13 Lakhs) and imposed penalty of Rs. 345.92 Lakhs (345.92 Lakhs). Company filed appeal before CESTAT and received unconditional stay order on order of Commissioner; hence no provision has been made.

(iii) The ACIT, Central Circle - 1(1), Ahmadabad served an assessment order upon SEL in relation to adjustment of losses incurred by the undertaking of SEL against the eligible income of the undertakings while computing the deductions and other expenses for the assessment year 2005-06 ,2006 - 07 & 2007-08 (the "Impugned Order"). SEL preferred an appeal before the CIT (Appeals) - XIV (the "CIT Appeals") challenging the Impugned Order. The CIT Appeals, through its order, partly disallowed SEL''s claim for deduction and other expenses under Section 80-IA of the IT Act and other expenses, (the "CIT(A) Order"). Subsequently, SEL preferred an appeal before the ITAT challenging CIT (A) Order and the ACIT, Central Circle - 1(1), Ahmadabad also preferred an appeal before the ITAT against the CIT(A) Order. The ITAT, through its order, allowed deductions under Section 80-IA of the IT Act (the "ITAT Order"). The CIT filed a review petition before the ITAT. Subsequently, the CIT preferred an appeal before the Gujarat High Court against the ITAT Order. The aggregate amount of Tax Liability for all the 3 Asst. years involved is Rs. 611.03 Lakhs. The matter is currently pending.

(iv) The DCIT, Central Circle 1(1), Ahmadabad issued a show cause notice to SEL seeking reasons for not imposing a penalty under Section 271(1)(c) of the IT Act with respect to the alleged concealment of particulars of income and inaccurate particulars being furnished for assessment year AY 2011-12. SEL filed a reply to the show cause notice. The DCIT, Central Circle 1(1), Ahmadabad passed orders for AY 2011-12 imposing total penalty of Rs. 13.25 Lakhs (the "Penalty Order"). Subsequently, SEL has preferred an appeal before the CIT, Appeals-11, Ahmadabad against the Penalty Orders. CIT Appeals-11 has passed the order and drop the penalty proceedings. The DCIT, Central Circle 1(1) filled the appeal with ITAT, Ahmadabad. The matters are currently pending.

(v) The ACIT, Central Circle 1(1), Ahmadabad served five assessment orders to SEL along with five demand notices for an aggregate amount of Rs. 1277 Lakhs in relation to the assessment years 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12 on account of disallowance of some expenditure and deductions under Section 80-IA of the IT Act. SEL preferred an appeal before the CIT (Appeals). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs. 5746.80 Lakhs. Subsequently, the ACIT, Central Circle 1(1), Ahmadabad preferred an appeal before the ITAT. The aggregate amount involved is Rs. 1953.30 Lakhs. The matter is currently pending.

(vi) The DCIT, Central Circle 1(1), Ahmadabad has reopened the case for AY 2011-12 and passed the order by disallowing the expenditure of Rs. 378.99 Lakhs. Subsequently, SEL has preferred an appeal before the CIT, Appeals-11, Ahmadabad against the said Orders. The aggregate amount of tax involved is Rs. 244.64 Lakhs. The matter is currently pending.

(vii) The DCIT, Central Circle 1(1), Ahmadabad, through its order, disallowed expenses of Rs. 450.73 Lakhs and disallow SEL''s claim for deduction for a sum of Rs. 379.47 Lakhs under Section 80IA(4) of the IT Act for assessment years 201213 with respect to agreements entered with GoI and state governments for construction of highways and roads. The DCIT, Central Circle 1(1), Ahmadabad further held that SEL is a contractor who executed the work and was not eligible for such deductions. SEL preferred an appeal before the CIT, Central Circle- 1(1). The CIT Appeals, through its order, allowed the expenditure and deductions amounting to Rs. 829.90 Lakhs. Subsequently, the ACIT, Central Circle 1(1), Ahmadabad preferred an appeal before the ITAT. The aggregate amount of tax involved is Rs. 269.36 Lakhs. The matter is currently pending.

(viii) The DCIT, Central Circle 1(1), Ahmadabad, through its order, disallowed expenses of Rs. 377.87 Lakhs and disallow SEL''s claim for deduction for a sum of Rs. 7716.78 Lakhs under Section 80IA(4) of the IT Act for assessment year 2013-14. SEL has preferred an appeal before the CIT(A), Ahmadabad. The aggregate amount of tax involved is Rs. 836.74 Lakhs. The matter is currently pending.

(ix) The DCIT, Central Circle 1(1), Ahmadabad, through its order, disallowed expenses of Rs. 448.85 Lakhs and disallowed SEL''s claim for deduction for a sum of Rs. 2993.28 Lakhs under Section 80IA(4) of the IT Act for assessment year 2014-15. SEL has preferred an appeal before the CIT(A), Ahmadabad. The aggregate amount of tax involved is Rs. 1048.50 Lakhs. The matter is currently pending.

(x) The Deputy Commercial Tax Commissioner, Audit Divison-1 Ahmadabad has passed order against "Jilin Sadbhav JV" for VAT demand of Rs. 702.00 Lakhs inclusive of interest Rs. 330.18 Lakhs and Penalty of Rs. 74.36 Lakhs. In Jilin-Sadbhav JV, Sadbhav Engineering Limited is having 48% share. Against this Order the Joint Venture has filed an appeal in the Gujarat Value Added Tax Tribunal at Ahmadabad. The Tribunal, through its order, granted a stay against the recovery of outstanding demand on payment of Rs. 15 Lakhs. The company has paid Rs. 15.00 Lakhs. hence no provision has been made.

(xi) The Company has received a show cause notice from the office of Mining Engineer, Mines and Geology Department, Udaipur on 05/02/2014 imposing penalty of Rs. 81.32 Lakhs under rule 63, 37A (IX) of Rajasthan Minor Mineral Concession Rules, 1986. The Company has filed a Civil Writ Petition No.2635/2014 in The High Court of Rajasthan against the said notice. The Company has deposited Rs. 30.00 Lakhs with the Mining Engineer, Mines and Geology Department, Udaipur as per stay order of the Honorable Court. Further proceeding is pending, hence no provision has been made.

(xii) The Deputy commissioner of Commercial Taxes, Jharkhand has passed an Assessment Order under Jharkhand Value Added Tax, 2005 for FY 2010-11 for demand of Rs. 77,40,217 and also has passed order for FY 2011-12 with demand of Rs. 1,52,83,176/-. The company has filled Revision Application against both the orders to the "The Commissioner, Commercial Taxes Department - Jharkhand" therefore the same has not been provided in the Books of Accounts.

(xiii) The Dy. Excise & Taxation Commissioner cum Provisional Authority Sirsa has passed the Revised Order u/s 34(2) of Haryana Value Added Tax Act 2003 for FY 2010-11 with demand of Rs. 10,44,692 which includes Interest of Rs. 5,22,346/-. The same Authority has also passed the Revised Order for FY 2011-12 for demand of Rs. 1,49,40,414/which includes the Interest of Rs. 67,31,395/- The Company has filled the Appeal against these orders to the Honorable "VAT Tribunal, Haryana", therefore the same has not been provided in the Books of Accounts.

(xiv) The Assessing Authority, Sirsa (Haryana) has passed the Order u/s 15(2) of Haryana Value Added Tax Act, 2003 for the FY 2012-13 with demand of Rs. 1,43,50,963 which includes interest of Rs. 55,01,977. The Company has filed the Appeal against this order to The Appellate Authority Haryana other than Tribunal, u/s 33 of HVAT Act, 2003.

(xv) (i) A case before Workmen Compensation Commissioner, Udaipur was filled for compensation of Rs. 11.69 Lakhs under Employees Compensation Act, 1923. The matter is currently pending.

(ii) A case before Labor Court, Jabalpur was filed for compensation of Rs. 15.40 Lakhs under Industrial Dispute Act, 1947. The matter is currently pending.

(iii) An employee has filed case before Labor court at Balaghat for compensation of Rs. 13.20 Lakhs under Workmen Compensation Act, 1923. The matter is currently pending.

(b) Other Money for which the company is contingently liable:-

(i) The Finance Act (2), 2009 has amended Section 80IA(4) of the Income Tax Act, 1961 by substituting an explanation to Section 80IA with retrospective effect from 01.04.2000. On the basis of legal opinion and decided cases, the Company has continued to claim deduction under section 80-IA(4) of the Act on eligible projects and consequently the Company considers it appropriate not to create a liability for provision of Income Tax. However an amount of Total income tax of Rs. 5362.73 Lakhs on claim of deduction/s 80IA for the AY 2013-14 to AY 2016-17 has been consider as contingent liability for which assessment is not completed.

(ii) Siddhartha Infraprojects Private Limited (the "Claimant") has initiated an arbitration proceeding against SEL in relation to a sub-contract agreement dated October 31, 2007 between the Claimant and SEL. Pursuant to the aforesaid sub-contract agreement, SEL sub contracted the work under the main contract between SEL and MPRDC for rehabilitation and up gradation of package 11 of Seoni Chiraidongri Road. The Claimant has alleged that SEL had committed breaches of the terms of the sub-contract agreement by unilaterally reducing its scope of work covered under the sub-contract agreement without the permission of the MPRDC. The Claimant has claimed an aggregate amount of Rs. 8160 Lakhs on account of, inter alia: (i) amount not paid for the work done; (ii) overhead losses suffered by the Claimant; (iii) losses suffered on account of profit not earned at appropriate time; (iv) loss of productivity; (v) opportunity losses; (vi) compensation for interest charges paid to the bank; (vii) loss due to underutilized tools, plants and machineries. SEL has been submitted its statement of defense before the Arbitral Tribunal. The aggregate amount involved is Rs. 8160 Lakhs. The matter is currently pending.

Company has given corporate guarantee to banks for Rs. 57757.00 Lakhs (Rs. 76136.00 Lakhs) against the finance facility given by the banks to subsidiary companies.

Gujarat that matter of minority shareholder should be referred as per SHA. Hon''ble High Court accepted SCA of the company and granted interim relief where by further proceeding of CLB have been stayed. Currently the matter is pending before Hon''ble High Court of Gujarat. The management believes that, based on legal advice, the outcome of above contingencies will be favorable and that any loss is not probable. Accordingly, no amounts have been accrued or paid in regard to dispute.

6. As per the Accounting Standard 11, "The effect of Change in Foreign Exchange Rates", the required disclosure are given below:-

The company uses Interest Rate Swap and Currency Option to hedge the interest and currency related risks on its capital account. Such transactions are governed by the strategy approved by the board of directors which provide principles on the use of these instruments, consistent with the Company''s Risk Management Policy. The company does not use these contracts for speculative purposes. Outstanding Currency Option and Interest Swap to hedge against foreign currency exchange rates and fluctuations in interest rate changes are as under:

ECB from Standard Chartered Bank is hedged for currency movements from the range of Rs. 65.50 to Rs. 80/-, ECB of USD 15mn from DBS is hedged for currency movements from the range of Rs. 44.50 to Rs. 52/- and ECB from ICICI is hedged for currency movements from the range of Rs. 53.7125 to 61.7125.

7. Employee Benefits

As per Accounting Standard -15 "Employee Benefits", the disclosures of Employee Benefits as defined in the accounting Standard is given as below:-

(a) Defined Contribution Plan:-

8. Segment Reporting

As permitted by Paragraph 4 of Accounting Standard -17, "Segment Reporting ", notified pursuant to the Companies (Accounting Standard) Rules 2006, if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

9. List of Related Parties

(a) Related Party with whom Control Exists Subsidiary:

Sadbhav Infrastructure Project Limited and Mysore-Bellary Highway (P) Ltd.

Step-down Subsidiaries:

Joint Ventures:

SEL-GKC JV, Sadbhav-Annapurna, Sadbhav-Vishnushiva, Sadbhav-Vaishnovi, Corsan Corviam Construction SA - Sadbhav and SADBHAV-PIPL (JV).

(b) Related Party with whom transaction during the year Key Management Personnel (KMP):

Shri Vishnubhai M. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Shri Vasistha C. Patel, Shri Vikram R. Patel, Shri Tushar D. Shah.

Relatives of KMP:

Smt. Shantaben V. Patel, V. M. Patel (HUF), Alpa Dharmin Patel, Bhavna V. Patel, Rekhaben V. Patel, Truptiben V. Patel, Rajeshriben Patel, Girishbhai N. Patel.

Entities in which KMP / relatives of KMP can exercise significant influence:

Sarjan Infracon Pvt. Ltd., Veer Procon Ltd., Sadbhav Finstock Pvt.Ltd., Sadbhav Realty Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Sadbhav Public Charitable Trust, Bhavna Engineering Company Pvt. Ltd., Saakar Infra Nirman Pvt. Ltd.

(b) The Company has recognized lease payment of Rs. 66.77 lakhs (Rs. Nil) in the statement of profit and loss under the head "Machinery Rent" during the year.

At the conclusion of the Term, Lessee has right to exercise one or more of the following options.

(i) Request Lesser to agree to a renewal of Term or

(ii) Surrender the Equipment as provided. Upon receipt of the Equipment by lesser or Leaserâs agent, the Rental Schedule shall terminate with no further obligation or liability on Lessee.

10. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets "

11. Pursuant to Restated Share Purchase Agreement dated October 27, 2015 between Dhule Palesner Tollway Limited (DPTL), Sadbhav Infrastructure Projects Limited (SIPL), a subsidiary company of SEL, Sadbhav Engineering Limited (SEL), the SIPL has acquired 60% equity stake from HCC Group, JLL Group in Dhule Palesner Tollway Limited (DPTL). After acquiring the said shares DPTL become 100% subsidiary of SIPL.

Pursuant to the Binding Term Sheet dated January 22, 2015 between Company, SIPL and Gammon Infrastructure Projects Company has transferred 1,04,00,000 Shares of Mumbai Nasik Expressway Limited, held on behalf of SIPL, to BIF India Holdings Pte. Ltd for consideration of Rs. 7200.00 lakhs.

12. Details of Exceptional Items:

Income of Rs. 140.00 lakhs: Company and Reliance Industries Limited (Reliance) settled the dispute out of court in regards to civil application filed by Reliance in District Court against the Arbitration award, in favor of the Company. Reliance paid the amount of Rs. 140.00 lakhs as full and final settlement.

Excess Provision of Rs. 984.83 Lakhs has been written back during the year.

Expenses of Rs. 1178.20 lakhs: Osho Ventures FZE, Ocean Bright Corporation Limited and Sadbhav Engineering Limited (collectively referred as "parties") had entered in arbitration proceedings in accordance with Shareholder''s agreement dated 15/05/2008 to resolve certain dispute. Arbitral Tribunal has passed an award dated 10th March, 2015 and allowing partial claims of the parties. Thereafter parties desirous to settle the dispute mutually, entered into a Settlement agreement dated 14th July, 2015 and in accordance with it the Company has written off Rs. 1178.20 lakh due from Ocean Bright Corporation Limited against sale of assets.

The Company has written off advance outstanding Rs. 1891.25 Lakhs during the year.

13. No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

14. In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilities and doubtful assets have been made.

15. All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year.

Mar 31, 2014

Corporate Information:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, irrigations projects, roads, bridge, irrigations projects, roads, bridge, mining activities on contract basis, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOOT basis. Company is also engaged in business of energy generation through Wind Power Project.

1. Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt:-

(i) The Dy. Commissioner of Custom has passed the order for Demand of Custom duty towards import of Machineries Rs. 104.95 Lakh (Rs. 104.95 Lakh) & Interest of Rs. 174.05 Lakh (Rs. 174.05 Lakh). The Company has filled the Appeal to Commissioner of Customs against the said order, hence no provision is made in the books of accounts.

(ii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs. 46.42 Lakh (Rs. 46.42 Lakh) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lakh (Rs. 46.42 Lakh) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts

(b) Guarantees:-

Company has given corporate guarantee to banks for Rs. 29825.00 Lakh (Rs. 28850.00 Lakh) against the finance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contingently liable:-

(i) Demand under Service Tax Act, 1994 Rs. 67.29 Lakh (Rs. 67.29 Lakh)

(ii) Company has received order of the Commissioner of service tax on 01st April, 2013 wherein Commissioner upheld the demand of Rs. 199.13 Lakh (Rs. 199.13 Lakh) and impose penalty of Rs. 345.92 Lakh (Nil). Company filed appeal before CESTAT and received unconditional stay order on order of Commissioner hence no provision has been made.

(iii) The Company has received Show-Cause Notice on 13th April, 2013 for imposing penalty of Rs. 19.84 Lakh (Nil) under Rule 26 of the Central Excise Rules, 2002. Company filed appeal before appropriate authority hence no provision has been made.

(iv) Income Tax of Rs. 3566.92 Lakhs on the claim made of the deduction u/s 80IA (4) of the Income Tax Act, 1961. The Finance Act (2), 2009 has amended Section 80IA(4) of the Income Tax Act, 1961 by substituting an explanation to Section 80IA with restrospective effect from 01.04.2000. On the basis of legal opinion and decided cases, the Company has continued to claim deduction under section 80-IA(4) of the Act on eligible projects and consequently the Company considers it appropriate not to create a liaility for provision of Income Tax. However an amount of income tax of Rs. 858.40 Lakhs for the current year and of Rs. 2708.51 Lakhs for the earlier years since FY 2007-08 has been disclosed as contingent liability.

(v) The Deputy Commercial Tax Commissioner, Audit Divison-1 Ahmedabad has passed order against "Jililn Sadbhav JV" for VAT demand of Rs. 702.00 Lakh inclusive of interest Rs. 330.18 lakh and Penalty of Rs. 74.36 lakh. In Jilin-Sadbhav JV, Sadbhav Engineering Limited is having 48% share. Against this Order the Joint Venture has filed an appeal in the Gujarat Value Added Tax Tribunal at Ahmedabad, hence no provision has been made.

(vi) The Company has received a show cause notice from the office of Mining Engineer, Mines and Geology Department, Udaipur on 05/02/2014 imposing penalty of Rs. 81.32 Lakh under rule 63, 37A (IX) of Rajasthan Minor Mineral Concession Rules, 1986. The Company has filed a Civil Writ Petition No.2635/2014 in The High Court of Rajasthan against the said notice. The Company has deposited Rs. 30.00 Lakh with the Mining Engineer, Mines and Geology Department, Udaipur as per stay order of the Honourable Court. Further proceeding is pending, hence no provision has been made.

(d) During the year, minority shareholders of Bijapur Hungud Tollway Private Limited (''BHTPL'') (a subsidiary of the Company) has filed company petition under section 347 and 398 of the Companies Act, 1956 with the Company Law Board Mumbai Bench against Sadbhav Engineering Ltd a holding Company and its associates/affiliates wherein the company is also defendant. The Company Law Board (CLB) passed an order in favour of the minority shareholder although company pleaded that matter should be referred for arbitration as per shareholder agreement (SHA). Against the CLB order the company filled Special Civil Application (SCA) with Hon''ble High Court of Gujarat that matter of minority shareholder should be referred as per SHA. Hon''ble High Court accepted SCA of the company and granted interim relief where by further proceeding of CLB have been stayed. Currently the matter is pending before Hon''ble High Court of Gujarat. The management believes that, based on legal advice, the outcome of above contingencies will be favourable and that any loss is not probable. Accordingly, no amounts have been accrued or paid in regard to dispute.

B Capital & other Commitments

The followings are the estimated amount of contractual commitments of the company:-

(Rs. in Lakhs)

Particulars As at March As at March 31, 2014 31, 2013

(i) Loan Commitments 0.00 0.00

(ii) Sub Ordinate Debt/Equity Shares in Subsidiarieses 30774.37 83249.84

C During the year ended March 31, 2014 the amount of per share dividend recognised as distribution to equity share holders is Re 0.70 (0.60) which comes to Rs. 1061.64 Lakh (Rs. 905.67 Lakh)

2. Segment Reporting

As permitted by Paragraph 4 of Accounting Standard -17, "Segment Reporting ", notified persuant to the Companies (Accounting Standard) Rules 2006, if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

3. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets".

4. Borrowing Cost:

During the year, company has capitalized borrowing cost Rs. 290.22 (303.89) Lakh according to AS-16 Borrowing Cost.

5. Some of the Balances of Advance to Contractors, Debtors & Advance received from clients are subject to confirmatin from parties.

6. No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

7. In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilities and doubtful assets have been made.

8. All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year.

Mar 31, 2013

Corporate Informaton:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilites in areas of canals, irrigatons projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstructon, renovaton, demolitons and constructon of canals, irrigatons projects, roads, bridge, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilites on BOT, BOLT and BOOT basis. Company is also engaged in mining actvites on contract basis and business of energy generaton through Wind Power Project.

1.1 Contngent Liabilites and commitments

A Contngent Liabilites

(a) Claims against the company not acknowledge as debt

(i) The dy. Commissioner of Custom has passed the order for Demand of Custom duty towards import of Machineries Rs.104.95 (Rs.104.95) & Interest of Rs. 174.05 (Nil). The Company has flled the Appeal to Commissioner of Customs against the said order , hence no provision is made in the books of accounts

(ii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lakhs against the company and its directors and ofcers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the later claimed Rs. 46.42 Lakhs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdicton of the court. The mater is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts

(b) Guarantees

Company has given corporate guarantee to banks for Rs. 28850 Lakhs (Rs. 10500 Lakhs) against the fnance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contngently liable

(i) Demand under Service Tax Act, 1994 Rs.67.29 Lakhs (Rs. 67.29 Lakhs)

(ii) Company has received order of the Commissioner of service tax on 01st April, 2013 wherein Commissioner upheld the demand of Rs. 199.13 lakhs (Rs. 199.13 Lakhs) and impose penalty of Rs. 345.92 Lakhs (Nil). Company is in the process of fling of appeal before appropriate authority hence no provision has been made.

(iii) Company has received Show-Cause Notce on 13th April, 2013 for imposing penalty of Rs. 19.84 Lakhs (Nil) under Rule 26 of the Central Excise Rules, 2002. Company is in the process of fling of appeal before appropriate authority hence no provision has been made.

(iv) With regards to inserton of explanatons with retrospectve efect from 01-04-2000 in secton 80-IA (4) of the Income Tax Act, 1961 read with sub secton (13), the Company has received Notce under secton 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for re-opening of assessment from Assessment Year 2003-04 to 2007-08, against which Company has fled a Special Civil Applicatons in the High Court of Gujarat. High Court of Gujarat has quashed the Notce issued under secton 148 for the Assessment Year 2003-04 & 2004-05 and for remaining assessment years it has directed the department of Income Tax to complete the assessments without serving the notce of demand on the company. Accordingly Income Tax Department has completed the assessments from A.Y.2005-06 to 2007-08 and intmated to the company without serving notce of demand. Further, the company has fled writ petton with High Court of Gujarat for challenging consttutonal validity for inserton of explanatons with retrospectve efect and writ has been admited. At present the mater is sub judies, hence quantfcaton of liability cannot be ascertained.

(v) During the year Company has received Income Tax Assessment order u/s 143(3) r.w.s. 153A dated 28.03.2013 for the FY 2004-05 to FY 2009-10 and Income Tax Assessment order u/s 143(3) r.w.s. 153B(1)(b) for the FY 2010-11 dt. 28.03.2013. As per the Order additonal Income Tax liability including interest for all the seven fnancial years was Rs. 565.90 Lacs. The company has fled the appeal with higher authority. Hence no provision has been made in the books of accounts.

1.2 Segment Reportng

As permited by Paragraph 4 of Accountng Standard -17, "Segment Reportng ", notfed persuant to the Companies (Accountng Standard) Rules 2006, if a single fnancial report contains both consolidated fnancial statement and the separate fnancial statements of the parent, segment informaton need be presented only on the basis of the consolidated fnancial statements. This fnancial report contains both standalone & consolidated fnancial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated fnancial statements.

1.3 List of Related Partes

Subsidiaries :

Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way Limited,

Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way Limited, Rohtak-Panipat Tollway Ltd., Bijapur Hungund Tollway Pvt. Ltd., Hyderabad Yadgiri Toll Way Pvt. Ltd., Maharashtra Border Check Post Network Ltd., Shreenathji Udaipur Tollway Pvt. Ltd., Bhilwara Rajsamand Tollway Pvt. Ltd. and Solapur Bijapur Tollway Pvt. Ltd.

Associate Companies

Mumbai Nasik Expressway Ltd., Dhule Palesner Tollway Ltd.,

Joint Ventures:

SEL-GKC JV

Key Management Personnel (KMP):

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitn R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel, Shri Vasistha C. Patel, Shri Vikram R. Patel.

Relatves of KMP:

Smt. Shantaben V. Patel, V. M. Patel (HUF), Alpa Dharmin Patel, Bhavna V. Patel, Tosha Patel, Rekhaben V. Patel, Truptben V. Patel, Vipulbhai H. Patel.

1.4 Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. Nil (31.51 Lakh) according to AS-16 Borrowing Cost.

1.5 Exceptonal Item pertains to the Performance Bonus received on early executon of work contracts. Bonus Received/Income Rs. 10973.98 Lakh

Bonus Expenses Rs. 4880.00 Lakh

Net Bonus Income Rs. 6093.98 Lakh

1.6 Some of the Balances of Advance to Contractors, Debtors & Advance received from clients are subject to confrmatn from partes.

1.7 No Provision has been made for losses made by subsidiary companies as it is temporary diminuton in the value of investments in subsidiaries.

1.8 In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilites and doubtul assets have been made.

1.9 All amounts in the fnancial statements are presented in Rupees Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year fgures in respect of Proft & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confrm to the fgures presented in the current year.

Mar 31, 2012

Corporate information:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, Irrigation projects, roads, bridges, dams which include civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and Construction of canals, Irrigation projects, roads, bridges, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOOT basis. Company is also engaged in mining actives on contract basis and business of energy generation through Wind Power Project.

1.1 Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt

(i) Demand of Custom duty towards import of Machineries Rs. 104.95 (Rs. 104.95)

(ii) The Regional Transport officer, Surat (RTO) issued a Notice for payment of road tax and penalty under the Bombay Motor Vehicles Act, 1958 on forty (40) dumpers used by the Company at the excavation of mining sites around Surat. The Company fled a Special Civil application in the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court directed Company to deposit the road tax (without penalty). The Company has complied with the order and has deposited Rs. 49.20 Lakhs. The hearing of the mater has not yet commenced before authority. The Company has not made provision for penalty in its Books of Accounts.

(iii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lakhs against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the later claimed Rs. 46.42 Lakhs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jusdiction of the court. The mater is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

(b) Guarantees

Company has given corporate guarantee to banks for Rs. 10500 Lakhs (Rs. 21200 Lakhs) against the finance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contingently liable

(i) Demand under Service Tax Act,1994 Rs. 67.29 Lakhs (Rs. 67.29 Lakhs)

(ii) During the year Company has Received Show cause cum Demand Notice of Rs. 199.13 Lakhs under the Service Tax Act, 1994.

(iii) With regards to insertion of explanations with retrospective effect from 01-04-2000 in section 80-IA (4) of the Income Tax Act, 1961 read with sub section (13), the Company has received Notice under section 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for re-opening of assessment from Assessment Year 2003-04 to 2007-08, against which Company has fled a Special Civil Applications in the High Court of Gujarat. High Court of Gujarat has quashed the Notice issued under section 148 for the Assessment Year 2003-04 & 2004-05 and for remaining assessment years it has directed the department of Income Tax to complete the assessments without serving the Notice of demand on the company. Accordingly Income Tax Department has completed the assessments from A.Y. 2005-06 to 2007-08 and intimated to the company without serving Notice of demand. Further, the company has fled writ petting with High Court of Gujarat for challenging constitutional validity for insertion of explanations with retrospective effect and writ has been admitted. At present the mater is sub judies, hence quantification of liability cannot be ascertained.

1.2 Employee benefits

As per Accounting Standard-15 "Employee benefits", the disclosures of Employee benefits as defined in the Accounting Standard as given as below:

(b) defined benefit Plan:

The company made annual contributions to the employee's Group Gratuity cash accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees.

The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following tables sets out the funded status of the gratuity plan and the amount recognised by the company's financial statements as at March 31, 2012.

1.3 Segment Reporting

As permited by Paragraph 4 of Accounting Standard -17, "Segment Reporting ", notified pursuant to the Companies (Accounting Standard ) Rules 2006, if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

1.4 List of Related Parties

Subsidiaries & Fellow Subsidiaries:

Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way Limited,

Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way Limited, Rohtak-Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd, Hyderabad Yadgiri Tollway Pvt. Ltd., Maharashtra Border Check Post Network Ltd. and Shreenathji Udaipur Tollway Pvt. Ltd.

Associate Companies

Mumbai Nasik Expressway Ltd., Dhule Palesner Tollway Ltd.,

Joint Ventures:

SEL-GKC JV

Key Management Personnel:

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitn R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel

relatives of Key Management Personnel

Smt. Shantaben V. Patel, V. M. Patel (HUF), Shri Vikram R. Patel, Shri Vasistha C. Patel

1.5 There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets".

1.6 Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. 31.51 Lakhs (19.17 Lakhs) according to AS-16 Borrowing Cost.

1.7 No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

1.8 In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known Liabilities and doubtful assets have been made.

1.9 All amounts in the financial statements are presented in Rupees Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year.

1.10 Revised Schedule VI and Previous year figures

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to confirm to this year's classification. The adoption of the revised schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosure made in the financial statements, particularly presentation of Balance sheet.

Mar 31, 2011

Company Overview:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in the line of canals, irrigations projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establishes maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOTT basis. Company is also engaged in mining activities on contract basis.

1) All amounts in the financial statements are presented in Rupees Lacs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confrm to the figures presented in the current year.

2) As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, license capacity and installation capacity are not applicable.

3) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in ordinary course of business. Provision for known liabilities are adequate and not in excess of the amount reasonably necessary.

4) Details of Securities given in respect of Secured Loans

1. Redeemable Non Convertible Debentures

The debentures are secured by the frst legal Registered Mortgage and charge on the specific movable fixed assets of the Company and specific immovable properties i.e. Bunglow (Manorama Retreat) and Flat (Abhimanyu) belonging to the Company.

2. Term Loans From Banks & Financial Institutions

Secured by way of hypothecation of specific machineries and equipments purchased.

3. Working Capital From Banks

a. Secured by hypothecation of stock of construction materials lying at sites, books debts and other receivables

b. First charge by way of mortgage of immovable property (Sadbhav House) and immovable property situated at Village Ognaj alongwith furnitures, fixtures etc. owned by company and second charge on machineries owned by the company.

c. Freehold land admeasuring 1,15,556 Sq. mts. of Group company Sadbhav Quarry Works Pvt. Ltd. situated at Tulsigam, Tal. Savli, Dist. Baroda.

d. Corporate Guarantee of Group Company Sadbhav Quarry Works Pvt. Ltd.

e. All the limits are also secured by Personal Guarantee and certain properties of Promoter Directors.

6) Contingent Liability:

a) The Company has given counter guarantee to the Bank for Rs. 127024.82 Lacs (Rs. 85427.56 Lacs) against the guarantee given by the Bank.

b) Outstanding Balance of Letter of Credit is Rs. 477.67 Lacs (Rs. Nil).

c) Demand under Orissa Sales Tax Act Rs. 4.55 Lacs (Rs. 4.55 Lacs)

d) Demand under Orissa Sales Tax Act for Entry Tax Rs. 0.75 Lacs (Rs. 0.75 Lacs)

e) Demand of Custom duty towards import of Machineries Rs.104.95 Lacs (Rs.104.95 Lacs)

f) Demand under Income Tax Act,1961 Rs. 192.72 Lacs (Rs. 157.02 Lacs)

g) Demand under Service Tax Act,1994 Rs. 67.29 Lacs (Rs. 67.29 Lacs)

h) Company has given corporate guarantee to banks for Rs. 212 crores (Rs. 171 Crores) against the finance facility given by the banks to our subsidiary companies.

i) The Regional Transport Officer, Surat (RTO) issued a notice for payment of road tax and penalty under the Bombay Motor Vehicles Act, 1958 on forty (40) dumpers used by the Company at the excavation of mining sites around Surat. The Company fled a Special Civil application in the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court directed Company to deposit the road tax (without penalty). The Company has complied with the order and has deposited Rs. 49.20 Lacs. The hearing of the matter has not yet commenced before authority. The Company has not made provision for penalty in its Books of Accounts.

j) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lacs against the company and its directors and Officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lacs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

7) Company is purchasing its bulk construction material like steel, cement, diesel and bitumen etc. from big government undertaking companies and private sector companies and hence there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes any dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identifed on the basis of information available with the company. This has been relied upon by the auditors.

8) With regards to insertion of explanations with retrospective effect from 01-04-2000 in section 80-IA (4) of the Income Tax Act, 1961 read with sub section (13), the Company has received Notice under section 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for re-opening of assessment from Assessment Year 2003-04 to 2007-08, against which Company has fled a Special Civil Applications in the High Court of Gujarat. High Court of Gujarat has quashed the Notice issued under section 148 for the Assessment Year 2003-04 & 2004-05 and for remaining assessment years it has directed the department of Income Tax to complete the assessments without serving the notice of demand on the company. Accordingly Income Tax Department has completed the assessments from A.Y. 2005-06 to 2007-08 and intimated to the company without serving notice of demand. Further, the company has fled writ petition with High Court of Gujarat for challenging constitutional validity for insertion of explanations with retrospective effect and writ has been admitted. At present the matter is sub judies, hence quantification of liability cannot be ascertained.

9) As per the Accounting Standard 11, "The effect of Change in Foreign Exchange Rates", the required disclosure are given below:

The company uses Currency Option and interest rate swap to hedge the interest and currency related risks on its capital account. Such transactions are governed by the strategy approved by the board of directors which provide principles on the use of these instruments, consistent with the Company's Risk Management Policy. The company does not use these contracts for speculative purposes. Outstanding Currency Option and Interest Swap to hedge against foreign currency exchange rates and fuctuations in interest rate changes:

(b) Defined Beneft Plan:

The company made annual contributions to the employee's Group Gratuity cash accumulation Scheme of the Life Insurance Corporation of India, a funded beneft plan for qualifying employees.

The present value of the defined beneft obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following tables sets out the funded status of the gratuity plan and the amount recognised by the company's financial statements as at March 31, 2011.

11) As per Accounting Standard-17, "Segment Reporting, Company who is dealing in multiple products/service and operates in different geographical areas are required to report under this Accounting Standard, hence no disclosure is required as the company operates in a single primary business segment namely "Engineering, Construction & Infrastructure development" activities and at single geographical area namely India.

12) As per Accounting Standard 18, "Related Party Disclosure", the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below:

I. List of Related Parties

Associate Companies/Entities:

Sadbhav Finstock Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Sadbhav Public Charitable Trust, Santokba Trust, Mumbai Nasik Expressway Ltd., Dhule Palesner Tollway Ltd.

Subsidiary:

Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way Limited, Sadbhav Mining Limitada Mozambique.

Subsidiaries of Subsidiary:

Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way Limited, Rohtak-Panipat Tollway Pvt. Ltd, Bijapur- Hungund Tollway Pvt. Ltd, Hydrabad-Yadgiri Toll Way Pvt. Ltd. and Maharashtra Border Check Post Network Ltd.

Joint Ventures:

Sadbhav-Prakash JV and SEL-GKC JV

Key Management Personnel:

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel

Relatives of Key Management Personnel and Enterprises over which Relatives of Key Managerial Persons having significant infuence:

Smt. Shantaben V. Patel, Montecarlo Construction Ltd., V. M. Patel (HUF), Sarjan Infracon Pvt. Ltd., Shri Vikram R. Patel, Shri Vasistha C. Patel, Veer Trans, Veer Procon Ltd.

13) Disclosures as per Clause 32 of the Listing Agreements with the stock exchanges

b) Company has not given any loans and advances to any associates and frms/companies in which directors are interested.

c) None of the loanees have made investments in shares of the Company.

14) During the year, pursuant to the shareholders agreement and share subscription agreement dated 18th August, 2010, private equity investor's have acquired 36,21,004 equity shares on fully diluted basis & acquired 22,50,774 - 0.01% Compulsory Convertible Cumulative Preference Shares (CCCPS) by investing Rs. 400/- crores in Sadbhav Infrastructure Project Limited, a Company's subsidiary.

15) Investment:

i. During the year, as a part of group restructuring investment made in following project specific SPVs have been transferred to a company's subsidiary Sadbhav Infrastructure Project Limited.

Against aforesaid pending transfer of shares, amount received from Sadbhav Infrastructure Project Limited have been shown as "Advance Received from subsidiary against sale of shares in other subsidiaries" in ScheduleÃ12 under Current Liabilities.

ii. 96,00,000 Shares have been pledged out of 2,44,79,940 shares held in Nagpur-Seoni Express way Ltd. with their lenders

iii. Entire 1,04,00,000 shares held in Mumbai Nasik Expressway Ltd., are pledged with lenders of Mumbai Nasik Expressway Ltd.

iv. 68,850 Shares have been pledged out of 64,61,000 shares held in Dhule Palesner Tollway Ltd. with lenders.

17) Details of share of % holding in the Joint Venture Entities are as under.

(a) The audited/ provisional financial statements of the above entities are not available at time of finalisation of accounts, hence share in Assets, Liabilities, Income and expenditure of the Company in its Joint Venture Entity has not been given.

(b) In case of MNEL, commercial operations are started during the year. And in case of DTPL , the project is under construction and commercial activities are not started.

19) There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets"

24) Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. 19,16,720 (NIL) according to AS-16 Borrowing Cost.

25) Right Issue Expenses :

During the current year, company has allotted 62,50,000 Right Shares having face value of Re 1 each at Premium of Rs. 71.50 per shares and alloted 1,86,25,800 equity shares of Re 1 each at a premium of Rs. 41.50 per shares against the conversion of 1,86,25,800 warrants. The company has written off Right issue expenses aggregating Rs. 144.37 Lacs in Securities Premium Account.

26) Remuneration to Managing Director is paid on monthly basis and therefore statement showing computation of net Profit U/s 349 of the Companies Act, 1956 is not given.

Mar 31, 2010

Company Overview:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in the line of canals, irrigations projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establishes maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOTT basis. Company is also engaged in mining activities on contract basis.

1) All amounts in the financial statements are presented in Rupees Lacs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year.

2) As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, licence capacity and installation capacity are not applicable.

3) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in ordinary course of business. Provision for known liabilities are adequate and not in excess of the amount reasonably necessary.

4) Details of Securities given in respect of Secured Loans

1. Redeemable Non Convertible Debentures

The debentures are secured by the first legal Registered Mortgage and charge on the specific movable fixed assets of the Company and specific immovable properties i.e. Bunglow (Manorama Retreat) and Flat (Abhimanyu) belonging to the Company. The security has been created on the said assets on 29th May, 2009 and same has been registered with Registrar of Company on 2nd June, 2009.

2. Term Loans From Banks & Financial Institutions

Secured by way of hypothecation of specific machineries and equipments purchased.

3. Working Capital From Banks

a. Secured by hypothecation of stock of construction materials lying at sites, books debts and other receivables

b. First charge by way of mortgage of immovable property(Sadbhav House) and immovable property situated at Village Ognaj alongwith furnitures, fixtures etc. owned by company and second charge on machineries owned by the company.

c. Freehold land admeasuring 1,15,556 Sq. mts. of Group company Sadbhav Quarry Works Pvt. Ltd. situated at Tulsigam, Tal. Savli, Dist. Baroda.

d. Corporate Guarantee of Group Company Sadbhav Quarry Works Pvt. Ltd.

e. All the limits are also secured by Personal Guarantee and certain properties of Promoter Directors.

6) Contingent Liability:

a) The Company has given counter guarantee to the Bank for Rs. 85,427.56 Lacs (Rs. 45,012.06 Lacs) against the guarantee given by the Bank.

b) Demand under Orissa Sales Tax Act Rs. 4.55 Lacs (Rs. 4.55 Lacs).

c) Demand under Orissa Sales Tax Act for Entry Tax Rs. 0.75 Lacs (Rs. 0.75 Lacs).

d) Demand of Custom duty towards import of Machineries Rs.104.95 Lacs (Rs.104.95 Lacs).

e) Demand under Income Tax Act, 1961 Rs. 157.02 Lacs (Rs. 56.03 Lacs).

f) Demand under Service Tax Act, 1994 Rs. 67.29 Lacs (Rs. 67.29 Lacs).

g) Company has given corporate guarantee to HDFC bank against loan of Rs. 400 Lacs given by the bank to Seven Hills Construction and to ABN Amro bank against loan of Rs. 106.56 Lacs given to same party.

h) Company has given corporate guarantee to banks for Rs. 17,100 Lacs (Rs. 4,000 Lacs) against the finance facility given by the banks to our subsidiary companies.

i) The Regional Transport Officer, Surat (RTO) issued a notice for payment of road tax and penalty under the Bombay Motor Vehicles Act, 1958 on forty (40) dumpers used by the Company at the excavation of mining sites around Surat. The Company fled a Special Civil application in the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court directed Company to deposit the road tax (without penalty). The Company has complied with the order and has deposited Rs. 49.20 Lacs. The hearing of the matter has not yet commenced before authority. The Company has not made provision for penalty in its Books of Accounts.

j) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lacs against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lacs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

k) The Finance Act, 2009 has amended an explanation of section 80(1A) of the Income Tax Act, 1961 by giving retrospectively effect from 01-04-2000. Due to aforesaid retrospective amendment estimated Tax liability would be Rs. 7.30 cr. For the A.Y. 2003-04 to A.Y. 2007-08. However, no demand notice has been raised by the department. (Refer Note No. 8).

7) Company is purchasing its bulk construction material like steel, cement, diesel and bitumen etc. from big government undertaking companies and private sector companies and hence there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes any dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

8) The Finance Act, 2009 has amended an explanation of section 80(1A) of the Income Tax Act, 1961 by giving retrospectively effect from 01-04-2000. Assessment u/s 143(3) of the Income Tax Act for the A.Y. 2008-09 has been completed during the year and liability as per assessment order has been paid and provided in books of accounts by debiting Income Tax of earlier years. The Company has also provided liability of Income Tax for A.Y. 2009-10 by debiting Income Tax of earlier years. Tax liability for the current year has been provided as per the current tax provisions. The Company has received Notice u/s 148 of the Income Tax Act for re-opening of assessment for the A.Y. 2003-04 to A.Y. 2007-08, against which Company has fled a Special Civil Applications in the High Court of Gujarat and hence estimated tax liability of Rs. 7.30 Crores has not been provided in books of accounts.

9) As per Accounting Standard 18, "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below:

I. List of Related Parties

Associate Companies/Entities:

Sadbhav Finstock Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Sadbhav Public Charitable Trust, Santokba Trust, Dhule Palasner Tollway Limited.

Subsidiaries:

Ahmedabad Ring Road Infrastructure Limited, Sadbhav Infrastructure Project Limited, Aurnagabad-Jalna Tollway Limited, Nagpur-Seoni Express Way Limited, Maharashtra Border Check Post Network Ltd., Sadbhav Mining Limitada, Mozambique, Rohtak-Panipat Tollway Pvt. Ltd, Bijapur-Hungund Tollway Pvt. Ltd, and Hydrabad-Yadgiri Tollway Pvt. Ltd.

Joint Ventures:

Sadbhav-Prakash JV, HCC-SEL JV, Jilin-Sadbhav JV, JMC-Sadbhav JV & SEL-GKC JV

Key Management Personnel:

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel

NOTE:-

1. Sub - Contract Expenditure of relatives of Key Managerial Personnel includes Rs. 1737.77 Lacs (Rs. 135.23) payable to Sarjan Infracon. and Rs. 215.03 (NIL) to Veer Trans, at the year end Rs. 8.59 Lacs (Rs. 20.00 Lacs) and Rs. 51.83 (NIL) are outstanding respectively of the above parties.

10) Disclosures as per Clause 32 of the Listing Agreements with the stock exchanges

(Note :- Loans to Subsidiaries includes interest free loan to Aurangabad-Jalna Tollway Ltd. to the tune of Rs. 1419.70 Lacs).

b) Company has not given any loans and advances to any associates and frms/companies in which directors are interested.

c) None of the loanees have made investments in shares of the Company.

11) There was no impairment loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

12) Investment:

i) During the year Company invested unutilized Q.I.P. issue proceeds in high quality interest/dividend bearing liquid Quoted Money Market Mutual Funds till the date of full utilization of QIP Proceeds.

ii) Income earned from above investment is Rs. 46.88 Lacs (Rs. 116.99 Lacs.).

iii) 25,10,400 Shares has been pledged out of 83,67,940 shares held in Ahmedabad Ring Road Infrastucture Ltd. with their lenders.

iv) 5,14,496 Shares has been pledged out of 10,05,207 shares held in Aurangabda Jalna Tollway Ltd. with their lenders.

v) 96,00,000 Shares has been pledged out of 2,44,79,940 shares held in Nagpur Seoni Expressway Ltd. with their lenders.

vi) Entire 1,04,00,000 shares held in Mumbai Nasik Expressway Ltd., are pledged with lenders of Mumbai Nasik Expressway Ltd

vii) Movement in investments made by the Company during the year :

Note:- All above figures are provisional as the audited accounts of the above companies are not available at time of signing the annual accounts of the company.

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

13) Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. NIL (NIL) according to AS-16 Borrowing Cost.

14) As per Accounting Standard-17, "Segment Reporting" issued by The Institute of Chartered Accountants of India, Company who is dealing in multiple products/service and operates in different geographical areas are required to report under this Accounting Standard, hence no disclosure is required as the company operates in a single primary business segment namely "Engineering, Construction & Infrastructure development" activities and at single geographical area namely India.

15) Remuneration to Managing Director is paid on monthly basis and therefore statement showing computation of net profit U/s 349 of the Companies Act, 1956 is not given.

Notes :

1. Hyderabad-Yadgiri TollWay Pvt.Ltd., Rohtak-Panipat Tollway Pvt.Ltd. and Bijapur-Hungund Tollway Pvt. Ltd. was incorporated on 20th Janauary, 2010, 25th January, 2010 and 22nd February, 2010. Their first financial year would end on 31st March 2011.

2. All the Companies have face value of Rs. 10 each, save and except for Sadbhav Mining Limitada where the value is represented in amount only and no specific face value has been defined as per local laws, applicable to the Company.

3. Amount of investment made in Sadbhav Mining Limitada is Rs. 80,396 (50000 MTn @ Rs. 1.608 per MTn).

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