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Directors Report of Vascon Engineers Ltd.

Mar 31, 2015

We have pleasure in presenting the 30th Annual Report on the business and operations of the Company together with the audited results for the financial year ended March 31, 2015.

1. FINANCIAL HIGHLIGHTS

CONSOLIDATED

PARTICULARS

FY 2015 FY 2014

Net Sales /Income from 6,226,653,209 6,238,773,486

Business Operations

Other Income 143,938,167 193,619,751

Total Income 6,370,591,376 6,432,393,237

Profit /(loss)before Interest and (844,050,994) 310,258,126

Depreciation

Less Interest 296,422,893 419,727,776

Profit /(loss)before Depreciation (1,140,473,887) (109,469,650)

Less Depreciation and

223,654,335 187,700,225

amortization

Profit / (loss) after (1,364,128,222) (297,169,875)

depreciation and Interest

Less Current Income Tax 64,957,313 138,636,793

Less Previous year adjustment 33,807,757 (429,707)

of Income Tax

Less Deferred Tax (15,126,963) (3,470,673)

Net Profit after Tax (1,447,766,329) (431,906,288)

Dividend (including Interim if Nil Nil any and final )

Net Profit after dividend and (1,447,766,329) (431,906,288)

Tax

Amount transferred to General Nil Nil

Reserve

Balance carried to Balance (1,447,766,329) (431,906,288)

Sheet

Earnings per share (Basic) (15.97) (4.87)

Earnings per Share(Diluted) (15.97) (4.87)



PARTICULARS STANDALONE

FY 2015 FY 2014

2,950,862,935 3,307,984,462 Net Sales /Income from Business Operations

Other Income 152,326,481 142,234,004

Total Income 3,103,189,416 3,450,218,466

Profit /(loss)before (1,038,836,434) 21,970,672 Interest and Depreciation

Less Interest 267,451,625 362,983,572

Profit /(loss)before (1,306,288,059) (341,012,900) Depreciation Less Depreciation and 109,764,361 107,742,189 amortization

Profit / (loss) after depreciation and Interest (1,416,052,420) (448,755,090)

Less Current Income Tax - -

Less Previous 30,863,929 - year adjustment of Income Tax

Less Deferred Tax - -

Net Profit after Tax (1,446,916,349) (448,755,090)

Dividend (including nil nil Interim if any and final )

Net Profit after (1,446,916,349) (448,755,090) dividend and Tax

Amount transferred to NIL NIL General Reserve

Balance carried to Balance (1,446,916,349) (448,755,090) Sheet

Earnings per share (Basic) (16.03) (4.98)

Earnings per Share(Diluted) (16.03) (4.98)

Notes: FY2015 represents fiscal year 2014–15, from 1 April 2014 to 31 March 2015, and analogously for FY2014 and other such labeled years.

2. BUSINESS PERFORMANCE

The company had a yet another challenging year. The difficult market conditions had contributed to the tough environment. Total Revenue for the year is at Rs. 3,10,31, 89,416 compared to Rs. 345,02,18,466 for the previous year. The company has incurred a net loss of Rs. 141, 60, 52,420 in the current year as against a net loss of Rs.44,87,55,090 in the previous year. The company has taken necessary steps to improve the performance in the next year.

3. CONSOLIDATED RESULTS

Due to the drop in profitability of the standalone accounts, the consolidated profit and loss account also shows a negative growth in profitability and revenue.

Consolidated Revenue of Vascon Group is Rs. 6,37,05,91,376 as compare to Rs.6,43,23,93,237 for the previous period of 12 months. Net Loss is Rs. 1,36,41,28,222 for the year. Diluted Earnings per Share (EPS) on consolidated basis is Rs. (15.97) for the year.

4. BUSINESS OPERATIONS & FUTURE OUTLOOK

Company has successfully concluded the rights issue for an amount of Rs. 100 Crores at a price of Rs. 15/- per equity share of Rs. 10/- paid up. This shall definitely improve the cash flow position of the company and shall enable to improve the speed of execution of the real estate projects and bidding for higher value EPC contracts. This shall bring a new era in the history of Company with next level of Growth.

Company has also established its presence in Qatar in the Gulf region and is expecting beginning of contract in the current financial year. Company is focused on acquisition of quality contracts with good margin and good clients. Company's strategy of focusing on full service contracts in select areas has started yielding results, recently the company has acquired an additional contact in Lucknow to the extent of Rs. 286 Crores and work is expected to begin shortly.

In the Real Estate segment company has total ongoing projects of 2.5 million sq. ft of which company has sold 1.84 million sq. ft amounting to Rs 972 Crores; company is also planning to launch new projects in current financial year.

5. TRANSFER TO RESERVES

The Company has not proposed to transfer any amount to the General Reserve.

6. DIVIDEND

In view of the losses incurred in the current year, we do not recommend any dividend for the year under review.

7. SHARE CAPITAL

The Company has allotted 2, 93,377 equity shares of Rs. 10/- each fully paid on December 30, 2014. Further, the Company's Rights Issue has been successful and it has allotted 6, 66, 66,666 equity shares of Rs. 10/- each fully paid on August 1, 2015.

Accordingly the total paid-up share of the Company has increased to 15,74,35,970 equity shares, amounting to 157, 43, 59,700/- as on the date of this Report.

Change in Capital

- Increase in Authorized Capital:

Pursuant to the provisions of Sections 13, 61 and 64 and any other applicable provisions, if any, of the Companies Act, 2013 (including any amendment thereto or re-enactment hereof ) and the rules framed there under as may be applicable and the Articles of Association of the Company, the existing Authorized Share Capital of the Company of Rs.150,00,00,000/- (Rupees One Hundred and Fifty Crore only) divided into 15,00,00,000 (Fifteen Crore) Equity Shares of Rs.10/- (Rupees Ten only) each, has been increased to Rs. 200,00,00,000/- (Rupees Two Hundred Crore only) divided into 20,00,00,000 (Twenty Crore) Equity Shares of Rs.10/- (Rupees Ten only) each by creation of 50,000,000 (Five Crore) Equity Shares of Rs. 10 (Rupees Ten Only) each ranking pari passu in all respects with the existing Equity Shares of the Company, vide Members resolution passed on September 15, 2014.

8. FIXED DEPOSITS

The details of deposits accepted/renewed during the year (FY 2014-15) under review are as below:

Amount Sr. Particulars (In Rs.) No

1. Am ount accepted during the 126,200,000 year

2. Am ount remained unpaid or unclaimed as at the end of No the year.

3. Whether there has been any default in repayment of deposits oR payment of interest thereon during the year and if so, number of such cases and the total amount involved. No

i) at the beginning of the year

ii) maximum during the year

iii) at the end of the year

9. CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year, there was no change in the nature of business of the Company or any of its subsidiaries.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company has procured an EPC contract from UP Housing and Development Board for an amount of Rs. 286 Crs, to build 13.50 lac sq. ft. consisting of 10 buildings.

The Company has concluded the Rights Issue of Equity Shares to an extent of Rs. 100 Crores to the existing shareholders of the company.

The company has filed a petition with the settlement commission for completing assessment of Income Tax for the Assessment years from 2007-2008 to 2014-2015.

11. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Board has adopted systems, policies and procedures for efficient conduct of business, operations, safeguarding its assets and prevention of frauds. This ensures accuracy and completeness of accounting records and its timely preparation.

12. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has 13 subsidiaries and 5 joint venture companies as on March 31, 2015. During FY 2016, i.e after April 1, 2015, Angelica Properties Private Limited has become Subsidiary of Vascon.

As per Section 129(3) of the Companies Act, 2013, where the Company has one or more subsidiaries, it shall, in addition to its financial statements, prepare a consolidated financial statement of the Company and of all subsidiaries in the same form and manner as that of its own and also attach along with its financial statement, a separate statement containing the salient features of the financial statement of its subsidiaries.

In accordance with the above, the consolidated financial statement of the Company and all its subsidiaries and joint ventures prepared in

accordance with Accounting Standards 21 and 27 as specified in the Companies (Accounts) Rules, 2014, form part of the annual report. Further, a statement containing the salient features of the financial statement of our subsidiaries and joint ventures in the prescribed Form AOC-1, is attached as Annexure I" to the Board's Report. This statement also provides the details of the performance and financial position of each subsidiary.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements and related information of the subsidiaries, where applicable, will be available for inspection during regular business hours at the Company's registered office in Mumbai, India. These will also be available on our website.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company makes investments or extends loans/guarantees to its wholly owned subsidiaries for their business purpose. Details of loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, along with the purpose for which such loan or guarantee is proposed to be utilized by the recipient, form part of the notes to the financial statements provided in this annual report.

14. CORPORATE GOVERNANCE AND ADDITIONAL SHAREHOLDERS' INFORMATION

A detailed report on the corporate governance systems and practices of the Company is given in a separately in this annual report.

A certificate from the Secretarial Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on corporate governance.

15. MANAGEMENT DISCUSSION AND ANALYSIS

A detailed report on the Management Discussion and Analysis is provided as a separate chapter in the annual report.

16. BOARD OF DIRECTORS AND KEY MANAGEMENT PERSONNEL

As per the provisions of Sections 149 and 152 of the Companies Act, 2013, the shareholders at their 29th Annual General Meeting held on September 15, 2014, had approved the re-appointment of all the existing Independent Directors of the Company for tenure of up to five consecutive years. None of the Independent Directors are liable to retire by rotation. In accordance with Section 149(7) of the Companies Act, 2013, each Independent Director has confirmed to the Company that he meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Further, in accordance with provisions of Section 152 of the Companies Act, 2013.

At the forthcoming Annual General Meeting scheduled on September 29, 2015, Mr. R. Vasudevan, Whole time Director of the Company, retires by rotation and being eligible, seeks re- appointment. A brief profile of Mr. R. Vasudevan is given in the Corporate Governance section of the annual report for reference of the shareholders.

Key Managerial Personnel (KMPs)

For the purposes of the provisions of section 203(1 )(i) of the Companies Act, 2013 read with Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 the following officers of the Company are hereby designated as the Key Managerial Personnel of the Company with effect from 1 April 2014:

Dr. Santosh Sunderarajan, Chief Executive Officer; Mr. D. Santhanam, Chief Financial Officer; and Mr. M. Krishnamurthi, Company Secretary.

These officers are in the service of the Company for more than a decade.

A. BOARD EVALUATION

As per provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, an evaluation of the performance of the Board of Directors and Members of the Committees was undertaken. Schedule IV of the Companies Act states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated.

Accordingly, the evaluation of all the Directors individually and the Board as a whole including members of Committees was conducted based on the criteria and framework adopted by the Board. The contribution and impact of individual Directors and Committee Members was reviewed through a peer evaluation, on parameters such as level of engagement and participation, flow of information, independence of judgment, conflicts resolution and their contribution in enhancing the Board's overall effectiveness.

None of the Independent Directors are due for reappointment.

17. APPOINTMENT OF DIRECTORS AND

REMUNERATION POLICY

The assessment and appointment of members to the Board is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise and specific qualification required for the position. The potential Board member is also assessed on the basis of independence criteria defined in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

In accordance with Section 178(3) of the

Companies Act, 2013, Clause 49(IV) (B) of the Listing Agreement and on recommendations of the Nomination and Remuneration Committee, the Board adopted a remuneration policy for Directors, Key Management Personnel and Senior Management. The policy is attached as an annexure to the Corporate Governance report.

B. NUMBER OF BOARD MEETINGS

The Board of Directors met nine times during the year, including a separate meeting of Independent Directors. Details of Board meetings are laid out in Corporate Governance report, which forms a part of this annual report.

18. AUDIT COMMITTEE

The Audit Committee of the Board of Directors consists of two Independent Directors and one Whole Time Director. Presently, the Committee comprises of Mr. V. Mohan, Chairman of the Committee and Independent Director, Mr. R. Kannan, Independent Director and Mr. R. Vasudevan, Managing Director

The Board has accepted all recommendations made by the Audit Committee during the year.

19. BUSINESS RISK MANAGEMENT

The Company has a Risk Management Committee of the Board, consisting of two Independent Directors and one Whole Time Director. The details of the Committee and its terms of reference are set out in the Corporate Governance section, which forms a part of this Report.

The Audit and Risk Management Committees review the key elements of the Company's business, finance, operations and compliance risk(s) and respective mitigation strategies. The Risk Management Committee review the risk identification and management process developed by management to confirm it is consistent with the Corporation's strategy and business plan.

During FY 2015, focus areas of the management and the Board included progress on strategy execution, quality and regulatory, while process safety and health continued to remain a priority for the Company.

20. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, your Directors state that:

1. applicable accounting standards have been followed in the preparation of the annual accounts;

2. accounting policies have been selected and applied consistently. Judgments and estimates made are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of FY 2015 and of the profit of the Company for that period;

3. proper and sufficient care has been taken to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. annual accounts have been prepared on a going concern basis;

5. adequate internal financial controls for the Company to follow have been laid down and these are operating effectively; and

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

21. RELATED PARTY TRANSACTIONS

In accordance with Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contract or arrangement entered into by the Company with related parties referred to in Section 188(1) in Form AOC-2 is attached as "Annexure II".

The details of related party disclosures form part of the notes to the financial statements provided in this annual report.

22. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has Whistle-Blower policy (Whistle- Blower/ Vigil Mechanism) to report concerns. Under this policy, provisions have been made to safeguard persons who use this mechanism from victimization.

An Independent member of Audit Committee is the Chief of Vigil Mechanism. The policy also provides access to the chairperson of the Audit Committee under certain circumstances. The details of the procedure are also available on the Company's website

23. AUDITORS

STATUTORY AUDITORS

The Members of the Company at their 29th Annual General Meeting (AGM) held on September 15, 2014, approved the appointment of M/s. Deloitte Haskins & Sells LLP, (Firm Registration no.

117366W/W-100018) Chartered Accountants, as statutory auditors of the Company, to hold office for five years, from the conclusion of the 29th AGM.

In terms of first proviso of Section 139 of the Companies Act, 2013, the appointment of the auditors is subject to ratification by the shareholders at every subsequent AGM. Accordingly, the statutory auditors, M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, have confirmed their eligibility under Section 141 of the Companies Act, 2013, Rule 4 of the Companies (Audit and Auditors) Rules, 2014 and Clause 41(I)(h) of the Listing Agreement.

The Audit Committee and the Board of Directors recommend the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, as statutory auditors of the Company from the conclusion of the 30th AGM till the conclusion of the 31st AGM, to the shareholders for ratification.

SECRETARIAL AUDITOR

Pursuant to Section 204 of the Companies Act, 2013 and the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, Dr. K R Chandratre, practicing Company Secretary was appointed to conduct the secretarial audit of the Company for FY 2015. The secretarial audit report for FY 2015 is attached as "Annexure III".

For FY 2016, based on the consent received from K.D. Rane & Associates, practicing Company Secretary and on the recommendations of the Audit Committee, the Board has appointed K D Rane & Associates, practicing Company Secretary, as secretarial auditor of the Company for FY 2016.

24. BOARD'S RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE

Information and explanation on remark in the Auditor's Report: if any:

Auditor's emphasis matters of the Report:

(i) Preparation of Accounts on Going Concern

Basis:

Reply: The Company has already taken steps to augment the long term resources by issue of Rights shares to the existing shareholders of the Company. The issue has been completed and the Company is in process of clearing liabilities.

(ii) Loans and Advances to Subsidiary

Reply: As mentioned in the note, the management is confident of recovering advances.

(ii)Auditor's comment on delay in payment of statutory dues and loans, in their Annexure to the Report

Reply: The Company has increased the long term resources by issuing rights shares to the members to an extent of Rs. 100 crores. These funds along with the realization of proceeds from noncore assets shall enable company to pay the dues on time.

Secretarial Auditors remarks in the Report:

- The notice of book closure was published in English newspaper in English instead of in vernacular.

Reply: The Board has noted this remark, and ensures Compliance in future.

- The notice of e-voting was published in English language in English instead of in vernacular. Reply: The Board has noted this remark, and ensures Compliance in future.

- The e-voting for the annual general meeting was not completed three days prior to the date of annual general meeting.

Reply: The Board has noted this remark, and ensures Compliance in future.

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE COURTS/REGULATORS

During FY 2015, there were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Company's operations in future.

26. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Vascon has been early adopter of Corporate Social Responsibility initiatives. The Company works with Vascon Moorthy Foundation ('VMF') towards improving healthcare, supporting child education and many such activities for the welfare of the Society.

As per Section 135 of the Companies Act, 2013, the Company has a Corporate Social Responsibility (CSR) Committee of its Board of Directors. Our Corporate Social Responsibility Committee comprises Mr. R. Vasudevan, Chairman of the Committee and Managing Director, Mr. V. Mohan, Independent Director, Mr. R Kannan, Independent Director.

During the year, the Committee formulated and recommended a CSR policy to the Board. Our CSR policy provides a constructive framework to review and organize our social outreach programs in the areas of health, livelihood and education. The policy enables a deeper understanding of outcome focused social development through diverse

collaborations.

The Report on CSR activities of the Company is attached as "Annexure IV"

27. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF

Pursuant to the provisions of Section 205A(5) of the Companies Act,1956, the declared dividends, which remained unpaid or unclaimed for a period of seven years, shall be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the said Act.

28. EMPLOYEES STOCK OPTION SCHEMES

The applicable disclosures as stipulated under SEBI guidelines with regard are attached as "Annexure V".

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are attached as "Annexure VI".

In terms of Section 197(12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of limits set out in said rules forms part of the annual report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company and others entitled thereto. The said information is available for inspection at the registered office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any shareholder interested in obtaining a copy thereof, may write to the Company Secretary in this regard.

29. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 our Company is not covered by the Schedule of Industries which are required to furnish the information in Form-A.

Our Company has not imported any technology or other items, or carried on the business of export or import. Therefore, the disclosure requirements against technology absorption are not applicable to the Company.

30. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Particulars 2013-2014 2013-2014

Foreign Exchange - -

Earning

Expenditure in - -

Foreign Exchange

31. EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the annual return in Form MGT-9 is attached as "Annexure VII".

32. ACKNOWLEDGEMENT

Your Directors place on record their sincere appreciation for the significant contribution made by our employees through their dedication, hard work and commitment, as also for the trust reposed on us by our clients. We also acknowledge the support extended to us by the analysts, bankers,

government agencies, media, customers, suppliers, shareholders and investors at large.

For and on behalf of the Board of Directors

V. Mohan

Chairman

Place: Mumbai

Date: August 11, 2015


Mar 31, 2014

Dear Members,

We are pleased to present this report with the Audited Annual Accounts of the Company for the year ended March 31,2014.

1. Financial Results:

Financial Highlights of the Company for the year are as follows:

Particulars 2013-2014 2012-2013

Total Revenue : 3407.42 4601.37

Profit before Interest and Depreciation & Taxes

Less: Interest 362.98 305.72

Depreciation 107.74 124.58 430.30

Profit Before Exceptional

Items, Prior Period (448.84) (254.43)

Expenses / Income (Net) and Tax

Prior Period Expenses / Income (Net) - (0.04)

Exceptional Items 0.08 (33.59) (33.63)

Profit Before Tax (448.76) (288.06)

Less: Provision for Tax

Current - -

MAT Credit Entitlement

Deferred Tax - (20.88)

Excess/Short provision for Tax - (20.88) of earlier years

Net Profit (448.76) (308.94)

2. Business Performance:

The company had a yet another challenging year. The difficult market conditions had contributed to the tough environment. Total Revenue for the year is at Rs. 3407.42 million compared to Rs. 4601.37 million for the previous year. The company has incurred a net loss of Rs. 448.76 million in the current year as against a net loss of Rs. 308.94 million in the previous year. The company has taken necessary steps to improve the performance in the next year.

3. Consolidated Results:

Due to the drop in profitability of the standalone accounts, the consolidated profit and loss account also shows a negative growth in profitability while its revenue growth is moderate.

Consolidated Revenue of Vascon Group is Rs. 6432.39 million as compare to Rs. 7363.11 for the previous period of 12 months.

Net Loss is Rs. 431.91 million for the year.

Diluted Earnings Per Share (EPS) on consolidated basis is Rs. (4.83) for the year.

4. Business Operations & Future Outlook:

The Real Estate business of the Company of the company has a land bank of 505 acres primarily in Maharashtra and Tamil Nadu. This land parcel shall enable the Company to make 43 million sq. ft of saleable area in the coming years with current FSI rules. Out of this area, Construction has commenced in 3.01 million sq. ft across 10 projects. From this area, the Company has sold 1.70 million sq. ft amounting to Rs 7592 million. The balance 1.31 million sq. ft is expected to be sold in next two years to fetch an amount of 7800 million. Presently the company is focusing all it efforts in three to four projects which has additional built up area of 2 million sq. ft to be started in the next 2 years.

Moreover, the Company is also planning to sell some of the non-core assets to generate immediate cash flow. This shall enable the Company to substantially reduce the existing debt, thereby improving the profitability.

5. Dividend:

In view of the losses incurred in the current year, we do not recommend any dividend for the year under review.

5. Change In Capital:

Increase in Authorised Capital:

Pursuant to the provisions of Section 192A of the Companies Act, 1956 read with Companies (passing of Resolution by Postal Ballot Rules), 2011, an Ordinary Resolution was passed by members of the Company on 4th March, 2014 to increase the Authorised Share Capital and Alteration of the Memorandum of Association of the Company. Accordingly, the Authorized Capital of the Company has been increased from Rs. 100, 00, 00,000 Crores (Rupees Hundred Crores only) divided into 10, 00, 00,000 (Ten Crore) equity shares of Rs. 10/- each to Rs.150, 00, 00,000/- (Rupees One Hundred and Fifty Crores only) divided into 15, 00, 00,000 (Fifteen Crore) equity shares of Rs.10/- (Rupee Ten only) each.

Equity Evolution during the year:

As on March 31,2014 the paid up Equity Share Capital of the Company was Rs. 90,18,25,500/- consisting of 9,01,82,550 equity shares of Rs.10/- each. The table below gives details of equity evolution of the Company during the year under review:

7. Utilisation of IPO Proceeds:

The proceeds of the IPO were to be used for Construction of our EPC contracts and Real Estate Development Projects, repayment of loans, and for general corporate purposes. The summary of utilisation of IPO proceeds are as follows:

8. Subsidiary Companies and Consolidated Financial Statement:

The Company has 14 subsidiaries as on March 31, 2014. We have pleasure in attaching the Consolidated Financial Statement pursuant to clause 32 of the listing agreement entered in to with the stock exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

By a general circular (No. 2/ 2011 dated February 8, 2011), the Ministry of Corporate Affairs, Government of India, under Section 212(8) of the Companies Act, 1956, has permitted companies not to attach copies of the Balance Sheets and Profit and Loss Accounts, Directors'' Reports, Auditors'' Reports and other documents of all their subsidiaries, to the Accounts. The company has acted accordingly.

However, annual accounts of the subsidiary companies and the related detailed information are available at any time to shareholders of the parent company and subsidiary companies and to statutory authorities. On request, these documents will be made available for inspection at the company''s corporate office. A statement containing information on the Company''s subsidiaries is included in this Annual Report.

9. Directors:

Sub-section (10) of Section 149 of the Companies Act, 2013 (effective 1 April 2014) provides that an Independent Director shall hold office for a term of up to five consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing of a special resolution by the shareholders of the Company. Sub-section (11) of the same section states that no Independent Director shall be eligible for more than two consecutive terms of up to five years each. In addition, sub-section 13 of Section 149 states that the provisions of retirement by rotation as defined in sub-sections (6) and (7) of Section 152 of the Act, shall not apply to such Independent Directors.

The new Clause 49 notified by the SEBI on April 17, 2014, most of which comes into effect from 1 October 2014, states in sub-clause II (B)(2) that any Independent Director "who has already served five years or more in a listed company as on 1 October 2014, shall be eligible for appointment, on completion of his present term, for one more term of up to five years only."

The appointment of Non-Executive Directors — whose sub-set comprise Independent Directors under the Companies Act, 1956 was a de facto term of three years because one third of such fiduciaries were eligible for retirement by rotation. Therefore, it stands to reason that those Independent Directors who would complete their present three-year term at the ensuing AGM of the Company in July 2014, and are eligible for re- appointment, may be considered by the shareholders for re-appointment for a term of up to fi ve years.

The Board recommends the appointment of Mr. V. Mohan and Mr. R. Kannan as Independent Directors under the provisions of the Companies Act, 2013 and Clause 49 of the Listing

Agreement, not liable to retire by rotation and to hold office for the period of Five years.

The brief profile of all the Independent Directors is given in the Corporate Governance section of the annual report for reference of the shareholders.

Further, pursuant to the provisions of Section 152 of the Companies Act, 2013 (effective 1 April 2014), one-third of the retiring Board members (other than Independent Directors), shall retire every year and if eligible, can be re-appointed, by the shareholders at their meeting.

The respective resolutions to the above referred matters are included in the notice convening the Annual General Meeting of the company scheduled on September 15, 2014.

Retirement by Rotation

Mr. K. G. Krishnamurthy, Non-Executive Director retires by rotation, and being eligible, has offered himself for reappointment. We propose at the ensuing Annual General Meeting, to reappoint Mr. K. G. Krishnamurthy as Independent Director not liable to retire by rotation and to hold office for the period of Five years.

10. Corporate Governance Report And Management Discussion And Analysis Statement:

A report on corporate governance is attached to this Report along with Management Discussion and Analysis Statement.

11. Fixed Deposit:

The Company has accepted deposits without invitation to Public under section 58A of the Companies Act, 1956. The statement in lieu of advertisement signed by the Directors of the Company was filed with the Registrar of Companies, Mumbai pursuant to rule 4A (1) of the Companies (Acceptance of Deposits) rule, 1975. Fixed deposits accepted from employees, shareholders and outsiders as on March 31, 2014 stood at Rs. 11,54,37,000/-.

None of the fixed deposits, matured during the year, remained unclaimed or unpaid.

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

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in Annexure forming part of the Report.

13. Particulars Regarding Employees:

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year.

The information required under section 217(2A) of the Companies Act, 1956 and the relevant provisions of Companies Act, 2013, read with the Companies (Particulars of Employees) Rule 1975 as amended, the names and other particulars of employees are required to be set out in the Annexure to the Directors Report. However in terms of section 219 (1)(b)(iv) of the Companies Act, 1956 and the relevant provisions of Companies Act, 2013, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining copy of the same may write to the Company Secretary.

14. Employee Stock Option Scheme:

During the year under review the Company implemented Employee Stock Option Scheme, 2007 ("the scheme"). The Board is please to inform you that, the said scheme is over now and ESOS, 2013 shall be implemented in the year 2014-15. Disclosures in respect of the scheme in compliance with Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 are set out in annexure to this report and forms part of this report

15. Directors'' Responsibility Statement Pursuant to Section 217(2AA) of the Companies Act, 1956:

a. The Company has followed all applicable accounting standards in the preparation of annual accounts as recommended by statutory auditors.

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year and of the Profit/Loss of the Company for that year.

c. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. The annual accounts are prepared on a going concern basis.

16. Auditors:

Anand Mehta & Associates, Auditors having a firm registration no. 127305W, retire at the forthcoming Annual General Meeting and Deloitte Haskins & Sells LLP having a firm registration no. 117366W/W-100018 have confirmed their eligibility and willingness to accept the offer to act as a Statutory Auditors of the Company and accordingly Board recommends their appointment as Statutory Auditors of the Company for a period of Five years.

17. Auditor''s Report:

Information and explanation on remark in the Auditor''s Report: if any:

(i) In respect of Auditor''s observation relating to improving the internal audit system, the management has taken necessary action to conduct the internal audit of the company.

(ii) In respect of Statutory Outstanding referred in the Auditor''s Report, we wish to clarify that all dues referred there in have been

paid except the Service Tax and TDS which are partially paid.

(iii) In respect to Auditors comments on the default in Term Loan from Banks, the management would like to clarify that the amounts have since been paid.

18. Acknowledgement:

We thank our bankers, customers and vendors for their continued support to our Company''s growth. We place on record their appreciation of the contributions made by Vascon''s employees at all levels. Their competence, hard work, solidarity, cooperation and support have enabled the Company to perform well in a competitive environment. For Vascon Engineers Limited

Mumbai: V. Mohan

August 12, 2014 Chairman & Director


Mar 31, 2013

Dear Members,

The are pleased to present our 28th Annual Report on the business and operations of the Company for the year ended 31st March, 2013.

1. Financial Results:

Financial Highlights of the Company for the year are as follows:

(Rs. in Million)

Particulars 2012-2013 2011-2012

Total Revenue : 4601.37 5115.86

Profit before Interest and 175.87 181.72

Depreciation & Taxes

Less: Interest 305.72 355.46

Depreciation 124.58 430.30 100.67 436.12

Profit before exceptional and extraordinary items Prior Period (254.43) (254.40)

Expenses / Income (Net) and Tax

Prior Period Expenses / (0.04) (1.50)

Income (Net)

Exceptional Items (33.59) (33.63) 366.03 364.53

Profit Before Tax (288.06) 110.13

Less: Provision for Tax

Current 6.64

MAT Credit Entitlement (6.64)

Deferred Tax (20.88) (9.72)

Excess / Short provision for (20.88) (9.72)

Tax of earlier years

Net Profit (308.94) 119.85

2. Business Performance:

The last two years have been challenging years with unprecedented economic uncertainty, which has resulted in moderating market demand and rising costs. The Company, as a part of its business strategy has taken a conscious decision to exit from some of its stalled, slow moving and non-proftable projects which were economically unviable to continue on same commercial terms. Due to this strategy, it has seen drop in Revenue and earnings of our Construction business. More over due to drop in turnover, the over head has not been fully absorbed, thereby pulling down the profts.

Total Revenue for the year is at Rs. 4601.37 million compared to Rs. 5,115.86 million for the previous period of 12 months.

Net loss for the year is at Rs. 308.94 million as compared to Net Proft of Rs. 119.85 million for the previous period of 12 months.

3. Consolidated Results:

Due to the drop in proftability of the standalone accounts, the consolidated proft and loss account also shows a negative growth in proftability while its revenue growth is moderate.

Consolidated Revenue of Vascon Group is Rs. 7,363.11 million as compare to Rs. 7,280.29 for the previous period of 12 months.

Net Loss is Rs. 170.47 million for the year.

4. Business Operations & Future Outlook:

The Company has two businesses viz. Real Estate and Construction.

The Company has consolidated its position in Construction business in the last year and is focusing on more remunerative contracts. The unique expertise of the company in executing full service contracts is thrust in bidding and acquiring new contracts. This shall not only improve the margins but also contribute to the image of the company.

The Company has increased its focus on development of our Real Estate projects. This has yielded results and Revenue in our Real Estate business has achieved signifcant growth despite challenging economic environment. It will continue this strategy of focusing on Real estate development projects. This will yield better margins and also help in generating steady cash fow in the future.

GMP Technical Solutions Pvt. Ltd., the Clean Room partition business has growth in revenue. The margins in this business have been stable and the Company expects to maintain growth in this segment. It is now exporting to six countries and plan to expand its footprints further. The global footprint shall not only grow the revenue but also regain proftability.

The Company has successfully reduced its Gross Debt by Rs. 740 million in last year. The Company is making an all out efforts to improve cash fow from monetization of unsold inventory and selective land parcels. We have already monetized commercial projects in Pune during last year. We will continue our efforts on other identifed projects in this year as well. Apart from this projects, the Company intends to exit from its investment in Hospitality projects at right prices.

5. Dividend:

In view of losses incurred in the current year, we do not recommend any dividend for the year under review.

6.Change in Capital:

Equity Evolution during the year

As on March 31, 2012 the paid up Equity Share Capital of the Company was Rs. 90,13,56,000/- consisting of 901,35,600 equity shares of Re.10/- each.

The table below gives details of equity evolution of the Company during the year under review:

Date Particulars No. of equity shares Post allotment Equity of Rs.10/- each Share Capital status Allotment pursuant Rs.901,507,500/- consisting May 21, to exercise of Stock 15,150 of 90,150,750 equity shares 2012 Options of Re.10/- each. Allotment pursuant Rs.901,801,500/- consisting Nov 8, to exercise of Stock 29,400 of 90,180,150 equity shares 2012 Options of Re.10/- each. 7. Utilisation of IPO Proceeds: The proceeds of the IPO were issued for procurement of land at various strategic places, repayment of loans, construction expenses of projects and for general corporate purposes. The summaries of utilisation of net IPO proceeds are as follows:

(Rs. in Million)

Particulars Amount to be Actual utilizations as utilized on 31.03.2013

a) Construction of our EPC 1,189.2 1,189.2 contracts and Real Estate

Development Projects

b) Repayment of debt 361.7 361.7

c) General Corporate purpose 103.4 103.4

d) Issue Expenses 127.7 127.7

8. Subsidiary Companies & Consolidated Financial Statement:

The Company has 11 subsidiaries as on March 31, 2013.We have pleasure in attaching the Consolidated Financial Statement pursuant to clause 32 of the listing agreement entered in to with the stock exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

By a general circular (No. 2/ 2011 dated February 8, 2011), the Ministry of Corporate Affairs, Government of India, under Section 212(8) of the Companies Act, 1956, has permitted companies to not attach copies of the Balance Sheets and Proft and Loss Accounts, Directors'' Reports, Auditors'' Reports and other documents of all their subsidiaries, to the Accounts. The company has acted accordingly.

However, annual accounts of the subsidiary companies and the related detailed information are available at any time to shareholders of the parent company and subsidiary companies and to statutory authorities. On request, these documents will be made available for inspection at the company''s corporate offce. A statement containing information on the Company''s subsidiaries is included in this Annual Report.

9. Directors:

Retirement by Rotation

Mr. V Mohan, Director retires by rotation and being eligible has offered himself for re-appointment. We propose to re-appoint Mr. V Mohan as director of the Company at the ensuing Annual General Meeting.

10. Corporate Governance Report And Management Discussion And Analysis Statement:

A report on corporate governance is attached to this Report along with Management Discussion and Analysis Statement.

11. Fixed Deposit:

The Company has accepted deposits without invitation to Public under section 58A of the Companies Act, 1956. The statement in lieu of advertisement signed by the Directors of the Company was fled with the Registrar of Companies, Mumbai pursuant to rule 4A(1) of the Companies (Acceptance of Deposits) rule, 1975. Fixed deposits accepted from employees, shareholders and outsiders as on March 31, 2013 stood at Rs. 89.30_ Millions. None of the fxed deposits which are matured during the year remained unclaimed and unpaid.

12. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo:

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in Annexure forming part of the Report.

13. Particulars Regarding Employees:

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year.

The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rule 1975 as amended, the names and other particulars of employees are required to be set out in the Annexure to the Directors Report. However in terms of section 219 (1)(b)(iv) of the Companies Act, 1956 the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining copy of the same may write to the Company Secretary.

14. Employee Stock Option Scheme:

During the year under review the Company implemented Employee Stock Option Scheme, 2007 ( "the scheme" ). Disclosures in respect of the scheme in compliance with Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 are set out in annexure to this report and forms part of this report.

15. Directors'' Responsibility Statement Pursuant to Section 217(2AA):

a) The Company has followed all applicable accounting standards in the preparation of annual accounts as recommended by statutory auditors.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year and of the Proft/Loss of the Company for that year.

c) The Directors have taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provision of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The annual accounts are prepared on a going concern basis.

16. Auditors:

Anand Mehta & Associates, auditors, retire at the forthcoming Annual General Meeting and have confrmed their eligibility and willingness to accept offer, if are re-appointed.

17. Auditor''s Report:

Information and explanation on remark in the Auditor''s Report: if any

(i) In respect of Auditor''s observation relating to improving the internal control systems and the scope and coverage of Internal Audit, the management has taken steps to strengthen the same.

(ii) In respect of outstanding referred in the Auditor''s Report, we wish to clarify that all dues referred there in have been paid.

18. Acknowledgment:

We thank our bankers, customers and vendors for their continued support to our Company''s growth. We place on record their appreciation of the contributions made by Vascon''s employees at all levels. Their competence, hard work, solidarity, cooperation and support have enabled the Company to perform well in a competitive environment.

For Vascon Engineers Limited

V. Mohan

Mumbai: 22nd July, 2013 Chairman


Mar 31, 2012

The are delighted to present our 27th Annual Report on the business and operations of the Company for the year ended 31st March, 2012.

01. FINANCIAL RESULTS:

Financial Highlights of the Company for the year are as follows:

(Rs. In Million)

Particulars 2011-2012 2010-2011

Total Revenue 5115.86 7870.79

Profit before Interest, 181.57 811.55

Depreciation & Taxes

Less: Interest 335.45 227.89

Depreciation 100.67 436.12 75.33 303.22

Profit Before Exceptional Items, Prior Period Expenses / Income (Net) and Tax (254.55) 508.33

Add: Prior Period Expenses /

Income (Net) (1.50) 5.01

Exceptional Items 366.18 364.68 212.51 217.52

Profit Before Tax 110.13 725.85

Less: Provision for Tax

Current 6.64 201

MAT Credit Entitlement (6.64) -

Deferred Tax (9.72) (2.61)

Excess / Short provision for Tax of earlier years - (9.72) (15.53) 182.86

Net Profit 119.85 542.99

02. BUSINESS PERFORMANCE:

Total Revenue for the year is at Rs. 5,115.86 million as compared to Rs. 7,870.79 million for the previous period of 12 months.

Net Profit for the year is at Rs. 119.85 million as compared to Rs. 542.99 million for the previous period of 12 months.

03. CONSOLIDATED RESULTS:

Consolidated Revenue of Vascon Group is Rs. 7,280.29 million as compared to Rs. 10,229.59 million for the previous period of 12 months.

Net Profit is Rs. 154.87 million for the year.

Diluted Earnings Per Share (EPS) on consolidated basis is Rs. 1.49 for the year.

04. BUSINESS OPERATIONS AND FUTURE OUTLOOK:

Our Company focuses on two businesses viz. Real Estate and Construction. Both the businesses have grown in the last several years together and have a very bright future. The EPC business has spread all over the country and include constructing factories, hospitals, hotels, offices, residential complexes, shopping malls etc. The Company intends to capitalize on the opportunity presented by the infrastructure sector also.

While the Company had a faster growth in the last five years it has faced a challenging situation in the last year. However, it has consolidated the position in the last two quarters, and is focusing on more remunerative projects.

In the Real Estate space, the Company is engaged in development of residential and office complexes, shopping malls, multiplexes, hotels, IT Parks, and other buildings. It concentrates on JDA model of business. However, in the areas where it has had successful launches in the past, it had acquired land parcels also. The Company has created iconic projects in Pune in the past and the buildings have won many awards for theire construction. While the Company has potential salable area of over 60 million sq. ft., it has recently started its magnum opus project at Pune with the name, Windermere. All the real estate projects of the Company are selling well and are expected to pick up momentum in the next few years.

As a part of backward integration the Company has purchased GMP Technical Solutions Private Limited in August, 2010. The company is working in two business areas. One is clean room partitions and the other one is HVAC design and integrated building management system. The busines is growing more than 20% CAGR and it has forayed into several overseas market.

Apart from this the Company has made strategic investments in hospitality business. It intends to exit the units at right prices. In the current year it has sold the hotel in Pune at a profit.

05. DIVIDEND:

In view of plough back of profit for future growth of the Company we do not recommend any dividend for the year under review .

06.CHANGE IN CAPITAL:

Equity Evolution during the year

As on March 31, 2011 the paid up Equity Share Capital of the Company was Rs. 90,01,60,500/- consisting of 900,16,050 equity shares of Re.10/- each.

The table below gives details of equity evolution of the Company during the year under review:

Table: Shares allotted during F.Y. 2011-2012

Date Particulars No. of equity Shares Post allotment Equity of Re.10/- each Share Capital status May 14, Allotment pursuant 90,000 Rs. 90,10,60,500/- consisting 2011 to exercise of of 901,06,050 equity shares Stock Options of Re.10/- each.

Feb 14, Allotment pursuant 29,550 Rs. 90,13,56,000/- consisting 2012 to exercise of of 901,35,600 equity shares Stock Options of Re.10/- each.

07. UTILISATION OF IPO PROCEEDS:

The proceeds of the IPO were issued for procurement of land at various strategic places, repayment of loans, construction expenses of projects and for general corporate purposes. The summaries of utilisation of net IPO proceeds are as follows:

(Rs. In Millions)

Sr. Particulars Amount Actual utilizations to be utilized as on 31.03.2012

a) Construction of our EPC contracts and Real Estate Development projects 1189.2 1189.2

b) Repayment of debt 361.7 361.7

c) General corporate purpose 103.4 103.4

d) Issue Expenses 127.7 127.7

Total 1,78.2 1,78.2

08. ACQUISITIONS:

During the year the Company has purchased the balance shares of Almet Corporation Limited and Marathwada Realtors Private Limited making these companies 99.92% and 100% subsidiaries.

09. SUBSIDIARY COMPANIES:

The Company had 9 subsidiaries at the beginning of the year. During the year the Company acquired two new companies which are Almet Corporation Limited and Marathwada Realtors Private Limited. Following this action, the Company has 11 subsidiaries as on March 31, 2012.

10. CONSOLIDATED FINANCIAL STATEMENT:

We have pleasure in attaching the Consolidated Financial Statement pursuant to clause 32 of the listing agreement entered in to with the stock exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

By a general circular (No. 2/2011 dated February 8, 2011), the Ministry of Corporate Affairs, Government of India, under Section 212(8) of the Companies Act, 1956, has permitted companies not to attach copies of the Balance Sheets and Profit and Loss Accounts, Directors' Reports, Auditor's Reports and other documents of all their subsidiaries, to the Accounts. The company has acted accordingly.

However, annual accounts of the subsidiary companies and the related detailed information are available at any time to shareholders of the parent company and subsidiary companies and to statutory authorities. On request, these documents will be made available for inspection at the Company's Corporate Office. A statement containing information on the Company's subsidiaries is included in this Annual Report.

11.DIRECTORS:

Retirement by Rotation

Mr. R. Kannan, Director retires by rotation and being eligible has offered himself for re-appointment. We proposed to re-appoint Mr. R. Kannan as director of the Company at the ensuing Annual General Meeting.

12.CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT:

A report on corporate governance is attached to this Report along with Management Discussion and Analysis Statement.

13.FIXED DEPOSIT:

The Company has accepted deposits without invitation to Public under section 58A of the Companies Act, 1956. The statement in lieu of advertisement signed by the Directors of the Company was filed with the Registrar of Companies, Mumbai pursuant to Rule 4A(1) of the Companies (Acceptance of Deposits) Rule, 1975. Fixed deposits accepted from employees, shareholders and outsiders as on March 31, 2012 stood at Rs. 84.05 Millions. None of the fixed deposits which are matured during the year remained unclaimed and unpaid.

14.CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in Annexure forming part of the Report.

15.PARTICULARS REGARDING EMPLOYEES:

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. The information required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rule 1975 as amended, the names and other particulars of employees are required to be set out in the Annexure to the Directors Report. However in terms of section 219 (1)(b)(iv) of the Companies Act, 1956 the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining copy of the same may write to the Company Secretary.

16.EMPL0YEE STOCK OPTION SCHEME:

During the year under review the Company implemented Employee Stock Option Scheme, 2007 ("the scheme"). Disclosures in respect of the scheme in compliance with Clause 12 of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guideline, 1999 are set out in annexure to this report and forms part of this report.

17.DIRECTORS' RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA):

a) The Company has followed all applicable accounting standards in the preparation of annual accounts as recommended by statutory auditors.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year and of the Profit/Loss of the Company for that year.

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

d) The annual accounts are prepared on a going concern basis.

18. AUDITORS:

Anand Mehta & Associates, auditors, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept offer, if are re-appointed.

19. AUDITOR'S REPORT:

Information and explanation on remark in the Auditor's Report:

(i) In respect of Auditor's observation relating to improving the internal control systems and the scope and coverage of Internal Audit, the management has taken steps to strengthen the same and correct the weaknesses observed in the system. Further, the scope of the Internal Auditor has also been increased to monitor the implementation of the same.

(ii) In respect of Auditor's observation relating to preparation of cost statement, we have to clarify that the same are being prepared by Cost Accountant and their report is awaited.

(iii) In respect of certain delays in payment of dues to the bank, financial institutions and statutory liabilities, we have to clarify that the same was on account of tight monetary conditions prevailing in the economy where payments from customers are also delayed. We are confident that the situation will improve in the ensuing year. The management has also initiated a process of liquidating certain non core real estate assets and vigorous follow up with customers for recovery of dues whereby the funds so generated can be used to repay the dues as per time lines stipulated.

(iv) As regards the Auditor's observation relating to the fraud detected in the Company, we invite your attention to note no. 46 to the Financial Statements, which is self explanatory.

20.ACKNOWLEDGEMENT:

We thank our bankers, customers and vendors for their continued support to our Company's growth. We place on record our appreciation of the contributions made by Vascon's employees at all levels. Their competence, hard work, solidarity, co-operation and support have enabled the Company to perform well in a competitive environment. For Vascon Engineers Limited Mumbai V. Mohan

21st May, 2012 Chairman


Mar 31, 2010

We are delighted to present our 25th Annual Report on the business and operations of the Company for the year ended 31s March, 2010.

01 FINANCIAL RESULTS

Financial Highlights of the Company for the year are as follows:

(Rs In Millions) 2009-2010 2008-2009 Gross Receipts: 7,147.72 5,305.09 Profit before Interest and Depreciation & Taxes 907.79 621.83

Less: Interest 214.26 253.50

Depreciation 64.11 57.26

Profit Before Tax and Prior Period

Adjustment 629.43 311.07

Less: Provision for Tax

Current : 197.20 96.32

Fringe Benefit Tax - 3.64 Deferred Tax Expense/(Gain) (4.39) 192.81 (1.68) 96.28

Profit After Tax and before Prior

Period Adjustment 436.62 212.79

Add/Less:

Excess/(Short) Provision Back/Off , 2.30 (5.91)

Prior Period Adjustment-

lncome/(Expenses) 3.34 5.64 (2.20) (8.11)

Net Profit : 442.26 204.67

02 BUSINESS PERFORMANCE

Sales for the year are Rs. 6,950.12 million compared to Rs. 5,240.03 million for the previous period of 12 months.

Profit after tax is at Rs. 442.26 million as compared to Rs. 204.67 million for the previous period of 12 months.

03 CONSOLIDATED RESULTS

Consolidated income of Vascon Group have gone up by 47.16% to Rs. 7,381.24 million.

Net Profit has increased 171.48% to Rs. 522.01 million.

Basic earnings Per Share (EPS) on consolidated basis Rs. 6.71 as compared to Rs. 2.49 in the previous year.

04 BUSINESS OPERATIONS & FUTURE OUTLOOK

The Companys EPC services include constructing factories, hospitals, hospitality properties, office and residential complexes, shopping malls, multiplexes, IT parks and other buildings. We intend to capitalize on the opportunity presented by the emphasis on the Infrastructure development by the Government of India.

Vascon also provides EPC services for its own projects as well as to third parties. EPC services involve various activities, depending on the scope of the engagement on a specific project. It encompasses undertaking projects as turnkey contractors for the entire project or as contractors responsible for a specific portion of a project.

Vascons strategy for the EPC segment will focus on optimizing its EPC services business and resources and entering into infrastructure development by participating in road development and other infrastructure related activities.

In the real estate space the Company is engaged in the development of residential and office complexes, shopping malls, multiplexes, hospitality properties, IT parks and other buildings. Vascon conducts its real estate development business directly or through its subsidiaries and also holds equity in other Development Entities, which in turn enter into joint development or other agreements to develop the properties.

The Company undertakes the entire spectrum of Real Estate Development activities including identification and acquisition of land to providing EPC services, and sales and marketing of projects to operation of the completed projects.

05 DIVIDEND

In view of ploughing back of profits for future growth of the Company we do not recommend any dividend for the year under review.

06 CHANGE IN CAPITAL: INITIAL PUBLIC OFFER (IPO)

During the year, the Company has successfully completed Initial Public Offering of 10,800,000 Equity Shares of Rs. 10/- each at a premium of Rs. 155/- per Equity Share aggregating to Rs. 165/- per Equity Share. The total issue size was Rs. 1782 million. The Initial Public Offer was over-subscribed to the extent of 1.22 times.

The Company has filled its Draft Red Herring Prospectus on September 29, 2009, Red Herring Prospectus on January 19, 2010 and Prospectus on February 02, 2010. The Initial Public Offer was open from January 27, 2010 to January 29, 2010. The Companys shares were listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited on February 15,2010.

07 UTILISATION OF IPO PROCEEDS

The proceeds of the IPO were utilised for repayment of loans, construction expenses of projects and for

General Corporate Purposes. The unutilised portion thereto has been invested into bank deposits, bank cash credit and mutual funds. The summary of utilisation of net IPO proceeds is as follows:

(Rs. In Millions)

Particulars Total Estimated Estimated Utilisation Utilisation as Utilisation as on given in Prospectus as on 31.03.2010

a) Construction of our EPCcontracts and real estate development projects , 1150.00 62.50 5.80

[b)Repayment ot debt 396.28 396.28 361.68

c) General corporate purpose 103.47 51.73 103.40

[djlssue Expenses 132.25 132.25 127.73

Total 1782.00 642.76 598.61

08 SUBSIDIARY COMPANIES

The Company had 9 subsidiaries at the beginning of the year. During the year Company set up/ acquired one new subsidiary Caspia Hotels Private Limited. Rose Premises Private Limited ceased to be a subsidiary of the Company due to sale of shares. Following this action, the Company has

9 subsidiaries as on 31st March,2010.

The Ministry of Company Affairs vide its letter No 47/161/2008-CL-lll dt. 15,h March, 2010 granted exemption to the Company from attaching copies of the Balance Sheet and Profit and Loss Account , Directors Report and Auditors Report of the subsidiary companies for the year 2009-10. However, on request by any member of the Company/ statutory authority interested in obtaining them, these documents will be made available for examination, at the corporate office. Pursuant to the approval, a statement of summarized financial of all the subsidiaries, joint ventures & associates is attached along with the Consolidated Financial Statement

09 CONSOLIDATED FINANCIAL STATEMENT

Your directors have pleasure in attaching the Consolidated Financial Statement pursuant to clause 32 of the listing agreement entered in to with the stock exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

10 DETAILS OF UNCLAIMED SHARES

Following are the unclaimed shares in demat suspense account of the company as at 31st March, 2010.

At the being of the year

Aggregate Outstanding number oi shares In the shareholders suspense

account lying at the

beginning of the year

NIL NIL During. the year

Number of dumber of shareholders shareholders approached to whom for transfer of shares are shares from transfer from suspense suspense account account

21 2520

At the end of the year

Aggregate Outstanding number of shares in the shareholders suspense account lying at the

end of the

year

5 805

At the being of the year During the year At the end of the year Aggregate Outstanding Number of number of Aggregate Outstanding number of shares in shareholders hareholders numbeT of shares in the shareholders suspense approached to whom shareholders suspense (account for transfer shares are account lying at the shares from transfer from lying at the beginning ot suspense suspense end of the the year account account year.

11 DIRECTORS

Retirement by Rotation

Mr. K G Krishnamurthy retires by rotation and being eligible has offered himself for re-appointment.We proposed to re-appoint Mr. K G Krishnamurthy as director of the Company at the ensuing Annual General Meeting.

The brief resume/details relating to director, who is to be appointed/re-appointed has been furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

12 CORPORATE GOVERNANCE REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT

A report on corporate governance is attached to this Report along with Management Discussion and Analysis Statement.

13 FIXED DEPOSIT

The Company has accepted deposits without invitation to public under section 58A of the Companies Act, 1956 pursuant to a resolution passed by the Board in their meeting held on December 9,2008. The statement in lieu of advertisement signed by all the Directors on the Board of the Company was filed with the Registrar of Companies, Mumbai pursuant to rule 4A(1) of the Companies (Acceptance of Deposits) Rule, 1975. Fixed deposits accepted from employees and outsiders as on 31st March,2010 stood at Rs.3.87crore.

14 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in Annexure forming part of the Report.

15 PARTICULARS REGARDING EMPLOYEES

The Board of Directors wishes to express their appreciation to all the employees for their outstanding contribution to the operations of the Company during the year. In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are required to be set out in the Annexure to the Directors Report. However, having regard to the provisions of Section

219 (1) (b) (iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the Members of the Company and others entitled thereto. Any member who is interested in obtaining such particulars may write to the Company Secretary, at the Registered Office of the Company.

16 EMPLOYEE STOCK OPTION SCHEME

Pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guideline ,1999 the details of stock option as on 31s March,2010 under the Employee Stock Option Scheme,2007 are set out in annexure forming part of the report.

17 DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA)

a) The Company has followed all applicable accounting standards in the preparation of annual accounts as recommended by statutory auditors.

b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year and of the Profit/Loss of the Company for that year.

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

d) The annual accounts are prepared on a going concern basis.

18 SOCIAL RESPONSIBILITY

Vascon Moorthy Foundation (VMF) was set up in February 2008 to handle the welfare initiatives of Vascon Engineers Limited. VMF was named after the late Shri N R Moorthy, Senior Mentor of Vascon. The first task was to look after the welfare of construction workers at Vascon project sites. Outside the industry, VMF is taking steps to promote education of deserving children, especially girls. Long-term plans include sponsoring or setting up an institute that can provide technical training in construction industryto the youth.

19 AUDITORS

Anand Mehta & Associates , auditors, retire at the forthcoming Annual General Meeting and have confirmed their eligibility and willingness to accept offer, if are re-appointed.

20 ACKNOWLEDGMENT

We thank our bankers, customers and vendors for their continued support to our Companys growth. We place on record their appreciation of the contributions made by Vascons employees at all levels. Their competence, hard work, solidarity, cooperation and support have enabled the company to perform consistently well in a competitive environment.

For VASCON ENGINEERS LIMITED V.MOHAN

CHAIRMAN




Mar 31, 2007

The Directors have pleasure in presenting their 22nd Annual Report on the business and operations of your Company for the year ended 31st March,2007.

Financial Results

Highlights of the performance of our Company for the year are as follows

March 2007 March 2006 Rs. million Rs. million

Gross Receipts: 3,820.75 1,491.73

Profit before Interest and Depreciation 747.31 289.23

Less : Interest 37.18 29.19

Depreciation 21.76 58.94 18.90 48.09

Profit Before Tax 688.37 241.14

Less : Provision for Tax

Current 192.53 88.59

Fringe Benefit Tax 1.38 1.10

Deferred Tax Expense /(Gain) 5.57 199.48 (2.07) 87.62

488.89 153.52

Add/Less:

Excess/(Short) Provision

W Back/Off 2.44 (0.37)

Net Surplus for the year 491.33 153.15

BUSINESS PROSPECTS

Your Directors are pleased to inform you that the Company has acheived an increase of 148% in sales and 218% in net profit during the year, as compared to the previous year. This jump was largely on account of the consolidation of various businesses of the Company. It was also thanks to the dynamic fine-tuning of the Companys collaboration strategies in keeping with the changing business environment and the Companys growing expertise in various fields. These moves put us in a better position to exploit the general buoyancy in the industry. Your directors are confident of keeping up this positive trend in the years to come.

The Construction industry is undergoing tremendous changes and has entered into the fast lane of growth. Your company has also embarked upon major expansion plans across the country.

Given the Companys rich experience, the focus is now on picking up projects where there is maximum synergy and greatest value addition. On the hospitality front, your Company is set to play an important role in bringing hotels of two international chains to Pune. The first chain of service apartments under the Vascon umbrella is also set to commence operations shortly.

While your Company owes its success to the consistent hard work put in by its team, it will be a challenge to recruit and retain skilled people in the days to come. Indian talent is now in great demand across a wide job spectrum in India and other countries. The Company is gearing up to cope with this by restructuring its personnel policies and ramping up its training programmes. Given the different areas that the Company is now active in and the tremendous growth opportunities, your Directors are confident that the Vascon team will continue to work together to power the Company ahead. On the whole, the next three to four years promise to be very exciting for the Company.

DIVIDEND

The Directors recommend no dividend as the profits are to be channelised to fund the growth of the Company.

PARTICULARS REGARDING EMPLOYEES

The particulars of employees drawing remuneration exceeding Rs. 24,00,000/- per annum or Rs. 2,00,000/-per month, as required under section 217 of the Companies Act, 1956 is given in the annexed statement.

ISSUE OF EQUITY SHARES

As already reported, during the financial year, the Company has issued 53,22,353 shares of Rs.10 each at a premium of Rs. 250.13 to HDFC India Real Estate Fund (Hi-REF Property Fund)

CONVERSION TO PUBLIC COMPANY

The Company has converted itself into a public limited company with effect from 20th December, 2006.

SUBSIDIARY COMPANIES

The Company has 8 subsidiaries as on March 31, 2007. These are: Marvel Housing Pvt. Ltd., IT Citi Info Park Pvt. Ltd., Vascon Dwellings Pvt. Ltd., Floriana Properties Pvt. Ltd., Wind Flower Properties Pvt. Ltd., Rose Premises Pvt. Ltd., Calypso Premises Pvt. Ltd. and Cosmos Premises Pvt. Ltd. The particulars of these subsidiaries as required under Section 212 of the Companies Act, 1956 are enclosed. Clover Resorts Pvt. Ltd., a subsdiary of the company was merged with the company vide the order of the High Court of Judicature at Bombay dated January 19, 2007.

DIRECTORS

During the year, Mr. Amar Lulla and Mr. V Mohan were appointed as directors . Mr. Amar Lulla is a Chartered Accountant and brings with him vast experience in finance and corporate affairs. Mr. V Mohan, also a Chartered Accountant, has more than 25 years of consulting experience with V. Shankar Aiyar & Co.

Mr. N. R. Moorthy and Mr. Kannan have resigned as directors during the year and the Board places on record its appreciation of the valuable guidance and services rendered by them.

THE DIRECTORS RESPONSIBILITY STATEMENT PURSUANT TO SECTION 217(2AA)

To the best of our information

(a) The Company has followed all applicable accounting standards in the preparation of annual accounts as recommended by statutory auditors

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the recommended by statutory auditors.

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year and of the profit/loss of the Company for that year.

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

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

As required under Section 217(1) (e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, your Company is not covered by the Schedule of Industries which are required to furnish the information in Form-A. Your Company has not imported any technology or other items nor carried on the business of export or import and therefore the disclosure requirements against technology absorption are not applicable.

Foreign Exchange Earnings and Outgo :

March 2007 March 2006 Rs. Rs.

Foreign Exchange Earnings - -

Foreign Exchange Expenditure 25,136,525 591,989

SOCIAL RESPONSIBILITY

Right from its inception, the Company has taken steps to preserve and enhance the natural wealth at its site and surroundings. All plans are driven by the goal to preserve existing trees and the natural lay of the land, so that projects cause minimum disturbance to the environment. Your Company was among the pioneers of environment-friendly measures like rainwater harvesting, water recycling, biogas plant etc.

The Company follows a policy of contributing to the beautification of its immediate community. In Pune, Vascon has already helped develop roads, traffic islands, etc. in Camp, Kalyaninagar and Yerwada areas. The Company is in the process of identifying the right social welfare organisations to work with in locations outside Pune.

Your Company has made substantial contributions to various charitable trusts for the care of poor patients. In addition to maintaining crèches at sites, your Company has invested in the medical care and education of the children. Vascon has also sponsored the formal education of needy children, through recognised organisations. This is in addition to scholarships offered to needy students selected from the College of Engineering, Pune.

Vascon has also promoted different cultural and sports activities.

AUDITORS

M/s. Kulin Mehta & Co., auditors, so far a proprietary firm,has now been converted into a partnership firm under the name and style of Anand Mehta & Associates. The auditors retire at the forthcoming Annual General Meeting and being eligible, seek re- appointment. The Directors recommend their re-appointment.

ACKNOWLEDGEMENT

The Directors thank the bankers, customers and vendors for their continued support to your Companys growth. Your Directors place on records their appreciation of the contribution made by Vascons employees at all levels. Their competence, hard work, solidarity, cooperation and support have enabled the company to perform consistently well in a competitive environment.

For and on Behalf of theBoard, Amar Lulla, Chairman

Mumbai, May 9, 2007

 
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