Notes to Accounts of Patel Engineering Ltd.

Mar 31, 2023

Provisions, contingent liabilities and contingent assets

The Group recognizes a provision when there is a
present obligation as a result of a past event that
probably requires an outflow of resources and a
reliable estimate can be made of the amount of the
obligation.

A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but probably will not, require an outflow of
resources. Where there is a possible obligation or a
present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are disclosed where an inflow of
economic benefits is probable.

s) Employees stock option plan

Compensation expenses under "employee stock option
plan" representing excess of fair price of the shares on
the date of grant of option over the exercise price of
option is amortized on a straight-line basis over the
vesting period.

t) Borrowing cost

Borrowing costs directly attributable and identifiable
to the acquisition or construction of qualifying assets
are capitalized till the date such qualifying assets are
ready to be put to use. A qualifying asset is one that
necessarily takes substantial period of time to get
ready for its intended use. Other borrowing costs are
charged to consolidated statement of profit and loss
as incurred.

u) Leases

As per IND AS 116

As a lessee

The Group recognises a right-of-use asset and a
lease liability at the lease commencement date. The

right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability
adjusted for any lease payments made at or before
the commencement date, plus any initial direct
costs incurred and an estimate of costs to dismantle
and remove the underlying asset or to restore the
underlying asset or the site on which it is located,
less any lease incentives received.

The right-of-use asset is subsequently depreciated
using the straight-line method from the
commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the
lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of
property and equipment. In addition, the right-of-use
asset is periodically reduced by impairment losses, if
any, and adjusted for certain re-measurements of the
lease liability.

The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date, discounted using the interest
rate implicit in the lease or, if that rate cannot be
readily determined, group''s incremental borrowing
rate. Generally, the company uses its incremental
borrowing rate as the discount rate.

The lease liability is measured at amortised cost using
the effective interest method. It is remeasured when
there is a change in future lease payments arising
from a change in an index or rate, if there is a change
in the group''s estimate of the amount expected
to be payable under a residual value guarantee, or
if group changes its assessment of whether it will
exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way,
a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in
profit or loss if the carrying amount of the right-
of-use asset has been reduced to zero. The Group
presents right-of-use assets that do not meet the
definition of investment property in ''property, plant
and equipment'' and lease liabilities in ''loans and
borrowings'' in the statement of financial position.

Short-term leases and leases of low-value assets

The Group has elected not to recognise right-of-use
assets and lease liabilities for short term leases of real
estate properties that have a lease term of 12 months.
The Group recognises the lease payments associated
with these leases as an expense on a straight-line
basis over the lease term.

v) Business combinations

Business combinations have been accounted for using
the acquisition method as per Ind AS 103.

The cost of an acquisition is measured at the fair
value of the asset transferred, equity instruments
issued and liabilities incurred or assumed at the date
of acquisition, which is the date on which control is
transferred.

Business combinations between entities under
common control are accounted for at carrying value.

Transaction costs that the Group incurs in connection
with a business combination are expensed as incurred.

w) Earning per share

The Group presents basic and diluted earnings per
share ("EPS") data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable
to ordinary shareholders of the Group by the weighted
average number of ordinary shares outstanding during
the period. Diluted EPS is determined by adjusting
the profit or loss attributable to ordinary shareholders
and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential
ordinary shares, which includes all stock options
granted to employees.

x) Preliminary and preoperative expenses

In respect of certain subsidiaries preliminary and
preoperative expenses are written off commencement
of operation.

y) Non-current assets held for sale and discontinued
operation

Non-current assets and disposal groups are classified
as held for sale if their carrying amount is intended to
be recovered principally through a sale (rather than
through continuing use) when the asset (or disposal
group) is available for immediate sale in its present
condition subject only to terms that are usual and
customary for sale of such asset (or disposal group)
and the sale is highly probable and is expected to
qualify for recognition as a completed sale within one
year from the date of classification.

Non-current assets and disposal groups classified as
held for sale are measured at lower of their carrying
amount and fair value less costs to sell.

z) Standards issued but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new
standard or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. On March 31, 2023,

MCA amended the Companies (Indian Accounting
Standards) Rules, 2015 by issuing the Companies
(Indian Accounting Standards) Amendment Rules,
2023, applicable from April 1, 2023, as below:

Ind AS 1 - Presentation of financial statements

The amendments require companies to disclose
their material accounting policies rather than their
significant accounting policies. Accounting policy
information, together with other information, is
material when it can reasonably be expected to
influence decisions of primary users of general
purpose financial statements. The Group does not
expect this amendment to have any significant impact
in its financial statements.

Ind AS 12 - Income taxes

The amendments clarify how companies account
for deferred tax on transactions such as leases and
decommissioning obligations. The amendments
narrowed the scope of the recognition exemption
in paragraphs 15 and 24 of Ind AS 12 (recognition
exemption) so that it no longer applies to transactions
that, on initial recognition, give rise to equal taxable
and deductible temporary differences. The Group
is evaluating the impact, if any, in its financial
statements.

Ind AS 8 - Accounting policies, changes in
accounting estimates and errors

The amendments will help entities to distinguish
between accounting policies and accounting
estimates. The definition of a change in accounting
estimates has been replaced with a definition of
accounting estimates. Under the new definition,
accounting estimates are "monetary amounts in
financial statements that are subject to measurement
uncertainty". Entities develop accounting estimates
if accounting policies require items in financial
statements to be measured in a way that involves
measurement uncertainty. The Group does not expect
this amendment to have any significant impact in its
financial statements.

---

Mar 31, 2017

1.1 First time adoption of Ind AS

These financial statements, for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, the company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 01, 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 01, 2015 and the financial statements as at and for the year ended March 31, 2016.

In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, as explained below.

A. Mandatory exceptions from retrospective application Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after accounting policies), unless there is an objective evidence that those estimates were in error.

Ind AS estimates as at April 01, 2015 are consistent with the estimates as at same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

- Investments in equity instruments carried at FVTPL or FVTOCI

- Investments in debt instruments carried at FVTPL

- Impairment of financial assets based on expected credit loss model.

Classification and measurement of financial assets:

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

B. Optional Exemptions from retrospective application

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

Deemed cost :

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

This exemption can also be used for intangible assets covered by Ind AS 38 - Intangible Assets and investment property covered by Ind AS 40 -Investment properties.

Accordingly, the company has elected to measure all of its property, plant and equipment, intangible assets and investment property at their previous GAAP carrying value.

Investment in subsidiaries, associates and joint ventures :

When an entity prepares Separate Financial Statements, Ind AS 27 requires it to account for its investments in subsidiaries, joint ventures and associate either at cost or in accordance with Ind AS 109.

The Company has elected to measure investment in subsidiaries, joint venture and associate at cost.

Share based payment transactions:

The Company has elected not to apply Ind AS 102 Share-Based Payment, to equity instruments that vested prior to the date of transition to Ind AS.

C. Transition to Ind AS - reconciliations

The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101

1. Reconciliation of Equity as at April 01, 2015

2. (A) Reconciliation of equity as at March 31, 2016

(B) Reconciliation of statement of profit and loss for the year ended March 31, 2016

3. Reconciliation of statement of cash flows for the year ended March 31, 2016

Reconciliation statement of cash flows is not provided since there are no material items of reconciliation.

Footnotes for reconciliations.

Borrowings/finance cost

Under Ind AS, financial liabilities are subsequently measured at amortised cost using the efffective interest rate (EIR) method. Borrowings are reflected net off transaction cost which is amortized as per EIR method.

Deferred tax

Under previous GAAP, deferred taxes were recognised for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognised using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences and deferred tax has been recognised on the same.

Corporate guarantee liability/ corporate guarantee income

Financial guarantee contracts have been recognized at fair value at the inception in accordance with Ind AS 109 along with accrued guarantee charges. Under IGAAP financial guarantee given was disclosed as contingent liability and commitments.

Employee benefit expenses/actuarial gain or loss

Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under Ind AS, measurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

Loan to subsidiary/finance income

Under Ind AS, financial assets and liabilities are measured fair value at the inception and subsequently at amortised cost or at fair value based on their classification. Under IGAAP, the financial assets and liabilities were measured at cost.

Revenue

Under Ind AS, revenue is recognized at the fair value of consideration. Fair value is arrived at by reducing the financing element from the amount of revenue where the contract is on deferred payment terms.

Other equity

Adjustments to retained earnings have been made in accordance with Ind AS for the above mentioned line items.

The previous IGAAP figures have been reclassified/regrouped to make them comparable with Ind AS presentation.

I. Aggregated amount of unquoted investments as at March 31, 2017 Rs.5,100.39 million (P.Y. Rs.5,117.70 million)

II. Aggregated amount of quoted investments as at March 31, 2017 Rs. Nil, Market value Rs.0.09 million (P.Y. Rs. Nil, Market value Rs.0.09 million)

III. Includes investment in national saving certificates, in the name of directors, lodged with project authorities

IV. A firm AHCL - PEL having fixed capital of Rs.75,000 (P.Y. Rs.75,000), had profit sharing as follows :- the company 20% (P.Y. 20%), Ace Housing & Const. Ltd. 1% (P.Y. 1%) & Pravin Patel 79% (P.Y. 79%). The company and another partner have given a notice of dissolution to the remaining partner of the firm final outcome of which is awaited.

A firm Patel Advance JV having nil fixed capital, partnership sharing has been as follows : the Company 26% (P.Y.26%), Advance Const. Co. Pvt. Ltd. 25% (P.Y. 25%), Apollo Buildwell Pvt. Ltd. 25% (P.Y. 25%) & Advance Equipment Finance Pvt. Ltd. 24% (P.Y. 24%).

1 Debentures

a) 11.30% secured redeemable non convertible debentures was allotted on September 17, 2012 for a period of 10 years. These debentures have a face value of Rs.1.0 million each aggregating to Rs.1,500.00 million (P.Y. Rs.1,500.00 million) and are to be redeemed in Septmeber 17, 2022. The same is secured against charge on land held on stock in trade of the Company and its subsidiaries.

b) 9.80% secured redeemable non convertible debentures was allotted on July 20, 2009 for a period of 7 years. These debentures have a face value of Rs.1.0 million each aggregating to Rs.550 million (P.Y. Rs.550 million) repayable in a single installment, with a put / call option available and exercisable at par at the end of 5^th year from the date of allotment. The same is secured against charge on land held on stock in trade of the Company and its subsidiaries. Interest rate has been revised to 9.80% p.a. (P.Y. 13.16% p.a.) for Syndicate bank w.e.f April 16, interest rate for IDBI bank has been changed at 13.32% p.a.(P.Y.13.32% p.a.) and in case of others it is 13.16% p.a. (P.Y. 13.16% p.a.). The same is disclosed under the head “Other financial liabiltiies” in note no 19. The company has requested its lenders to reduce the rate of interest to 9.80% p.a. as per minutes of meeting held on August 29, 2016.

NCD holders have approved strategic debt restructuring (SDR) invocation by lenders with reference date as May 26, 2016.

c) 11.40% secured redeemable non convertible debentures was allotted on July 11, 2011 for a period of 5 years. These debentures have a face value of Rs.0.10 million each aggregating to Rs.500 million (P.Y. Rs.1,000 million). These debentures were to be redeemed on July 11, 2016 - Rs.500 million. The same is secured against charge on land held on stock in trade of the Company and its subsidiaries. Interest rates has reamined uncahnged at 13% p.a.(P.Y. 13% p.a.).The same is disclosed under the head “Other financial liabiltiies” in note no 19.

NCD holders have approved strategic debt Restructuring (SDR) invocation by lenders with reference date as May 26, 2016, which allows lenders to keep account under “Stand-Still Clause” for 18 months from the reference date.

d) 10.75% secured redeemable non convertible debentures was allotted on March 3, 2011 for a period of 5 years. These debentures have a face value of Rs.0.10 million each aggregating to Rs.100 million (P.Y. Rs.250 million). These debentures were to be redeemed on March 3, 2016 - Rs.100 million. Interest rate on the same has remained unchanged at 10.75% p.a.(P.Y. 10.75 % p.a.).The same is secured against charge on land held on stock in trade of the Company and subservient charge on all the property, plant and equipment of the Company. The same is disclosed under the head “Other financial liabiltiies” in note no 19. NCD holders have approved strategic debt restructuring (SDR) invocation by lenders with reference date as May 26, 2016, which allows lenders to keep account under “Stand-Still Clause” for 18 months from the reference date.

The above debentures are listed on The National Stock Exchange of India.

As per Section 71 of the Companies Act, 2013 the Company has created adequate debenture redemption reserve for the above series of secured redeemable non convertible debenture. Further, in terms section 71 read with Rule 18(7)(c) of Companies Share Capital and Debentures Rules, 2014, the Company has failed to deposit/invest funds a sum of Rs.157.5 million Before April 30, 2016 to secure the repayments of debentures maturing during the year 2016-17. the debenture due to mature during the financial year 2016-17 amounted to Rs.1050 million including debenture stated at point no 1(b) and 1(c) and said were not repaid. The interest on NCD due and outstanding with in 0-30 days Rs.62.74 million, 61-90 days 15.36 million & >90 days is Rs.271.10 million.

2 Term Loan Banks

a) Term loans also includes the loans taken from Standard Chartered Bank in form of FCNR Loan outstanding amount out of the same is Rs.93.04 million (P.Y. Rs.95.01 million) which was due in January 2016 and rate of interest on the same has been LIBOR 400 i.e. 4.23% p.a.ECB loan has matured (and remains unpaid)

b) The Term loans are secured by first charge on the specific assets acquired out of the term loan alongwith specifically identified unencumbered assets and guarantees. The rates of interest for these loans vary between 10%- 13% (floating) linked to monitoring institution’s base rate, with a repayment period of 5-7 years respectively. Term loan includes working capital term loan (WCTL) secured by a first pari passu charge on the receivables more than 180 days, retention deposit, stock of land, immovable property and mortgage over certain lands owned by subsidiary companies, corporate guarantee and pledge of 30% shareholding of subsidiaries owning real estate lands. Negative lien on shareholding (up to 30% shares) of Patel Engineering Limited held by Promoters. The promoters - Mr. Pravin Patel and Mr. Rupen Patel in their personal capacity and Ms. Sonal Patel, Mr. Bhimsen Batra and Mr. Muthu Raj to the extent of the value of the property owned by them, has provided personal guarantees for WCTL. Also there is a charge on escrow accounts of Company, wherein cashflows will be deposited from real estate projects to be developed by respective companies.

Term loan amounting to Rs.2337.46 million were due and outstanding as on March 31, 2017 comprises of Rs.381.84 million due within 0-30 days, Rs.179.88 million due within 30-60 days,Rs.792.50 million and due within more then 90 days is Rs.983.24 million. Interest on the term loans outstanding of Rs.884.19 million as on March 31, 2017 comprises of Rs.207.44 million due within 0-30 days, Rs.228.92 million due within 30-60 days, Rs.126.33 million and due within more then 90 days is Rs.321.50 million.

Term lenders have approved strategic debt restructuring (SDR) invocation by lenders with reference date as May 26, 2016, which allows lenders to keep account under “Stand-Still Clause” for 18 months from the reference date.

3 From Others

Includes funds from financial institutions on equipments, secured against the said equipments. These loans carry an interest rate of average between 13%-14% on an average, with a repayment period of 3-5 years respectively. This term loan also includes inter corporate deposits with an average rate of interest of 14%-15% with maturity period of 1-3 yrs. Principal due and outstanding on equipment loan of Rs.33.44 million as on March 31, 2017 comprises of Rs.4.90 million due within 0-30 days, Rs.4.86 million due within 30-60 days, Rs.4.82 million and due within more then 90 days is Rs.18.86 million and interest due and outstanding on equipment loan of Rs.5.08 million as on March 31, 2017 comprises of Rs.0.96 million due within 0-30 days, Rs.0.58 million due within 30-60 days, Rs.0.63 million and due within more then 90 days is Rs.2.91 million. Interest due and outstanding on inter corporate deposits of Rs.3.60 million as on March 31, 2017 which is due within 0-30 days category.

1 Short Term Loan

Includes loans by earmarking from bank gurantee limits and short term loans from various banks against various immovable properties of company at interest rate of 12-13% (PY 12-13%) payable within a year. Principal amount due of Rs.2794.32 million as on March 31, 2017 comprises of Rs.1366.15 million due within 30-60 days, Rs.60.39 million and due within more then 90 days is Rs.1367.78 million and interest outstanding on short term loans of Rs.1127.51 million as on March 31, 2017 comprises of Rs.211.89 million due within 0-30 days, Rs.280.16 million due within 30-60 days, Rs.133.69 million due within 60-90 days and due within more then 90 days is Rs.501.76 million.

2 Loans Repayable on Demand

Includes cash credit and working capital demand loan from various banks. These loans have been given against hypothecation of stocks, spare parts, book debts, work in progress and guarantees;

Terms of Repayment:

Cash credit- yearly renewal, rate of interest ranges between 11.50%-15% p.a. (PY 12.50%-15% p.a.)

3 Unsecured Loan

It includes short term loans from banks of Rs.1134.02 million as on March 31, 2017 comprises of Rs.424.95 million due within 61-90 days and due more then 90 days is Rs.709.06 million.

Note on strategic debt restructuring (SDR)

The lenders to the company have invoked SDR with May 26, 2016 as the reference date. Consequently, the lenders have been allotted equity shares of company aggregating to 51.08% of the total equity share capital of company, by converting certain part of outstanding debt to equity as per SDR Scheme. SDR was invoked so that a new investor can be sought who can bring in additional capital for the revival of the full/part business segment with a long term persepective and allows lenders to effect stand-still clause which may be applicable for 18 months from reference date.

1 The Company has Rs.6.93 million (PY Rs.4.66 million) due to suppliers under the Micro Small and Medium Enterprise Development Act, 2006, as at March 31, 2017. Principal amount due to suppliers under the Act is Rs.5.81 million (P.Y. Rs.2.07 million). Interest accrued and due to the suppliers on the above amount is Rs.0.85 million (PY Rs.0.02 million). Payment made to the suppliers (other than interest) beyond appointed day during the year is Rs.4.99 million (PY Rs.4.45 million). Interest paid to the suppliers under the Act is Rs.1.68 million (PY Rs.0.57 million). Interest due and payable to the suppliers under the Act towards payments already made is Rs.0.26 million (PY Rs.2.57 million). Interest accrued and remaining unpaid at the end of the accounting year is Rs.1.12 million (PY Rs.1.47 million). The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure u/s 23 of the MSMED Act, 2006 is Rs.1.12 million (P.Y. Rs.1.12 million).

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

Provision made for impairment based on indication of diminution in value of the investment in / advance to a subsidiary, Patel Engineering Singapore Pte Ltd.

* The Company has an outstanding loan balance of Rs.1,173.62 million due from BEDL as on March 31, 2016. Now that BEDL is under SDR and majority of shareholding is held by the bankers, the loss of BEDL amounting of Rs.620.40 million is not likely to be recoverable by the Co., hence it has written off the said loss of Rs.620.40 million against the loan in the books of account of the company as on March 31, 2016. Further interest accrued but not received of Rs.79.25 million from another subsidiary is also written off as on March 31, 2016.

During the year, company has written off the balance loan of BEDL after adjusting its advances and debtors balance along with 49% investment in associates.

2 EMPLOYEE BENEFITS

I Brief description of the Plans

The Company provides long-term benefits in the nature of provident fund and gratuity to its employees. In case of funded schemes, the funds are recognized by the income tax authorities and administered through appropriate authorities/insurers. The Company’s defined contribution plans are provident fund, employee state insurance and employees’ pension scheme (under the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company’s defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company’s policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest obligation is recognised immediately in the statement of profit and loss as actuarial loss. Any loss/gain arising out of the investment with the plan is also recognised as expense or income in the period in which such loss/gain occurs.

3 In view of the amendment in the Service Tax Act, certain projects which were hitherto not liable for service tax became liable to tax by virtue of the said amendment effective July 1, 2012. The amount of service tax payable on such projects is reimbursable by the client as per the contract conditions and the same has been reflected as receivables. However in few cases where the client has not accepted this liability, the same has been debited to the statement of profit and loss.

4 LEASE

The Company has taken various construction equipments under non cancellable operating leases. The future minimum lease payment in respect of these as at March 31, 2017 are as follows:

5 On November 25, 2016, the allotment committee of the Company has approved the allotment of 8,01,88,409 equity shares of face value Rs.1 each at a price of Rs.52.20 per share, which is price for conversion of debt into equity determined as per RBI circular dated June 8, 2015, to the lenders on preferential basis as per strategic debt restructuring scheme (SDR).

6 BUSINESS COMBINATIONS

a) Patel Realty (I) Ltd. (PRIL) is engaged in construction of commercial and residential buildings; primarily know as real estate business. The company holds 100% of the voting power of PRIL.

b) PRIL has been amalgamated with the company with effect from April 1, 2016 (‘appointed date’) pursuant to the approval of the Hon’ble National Company Law Tribunal in it’s order dated of July 6, 2017 as per pooling of interest method in terms of the Scheme. Consequently, the Company has merged the financials of the said subsidiary with its financials as per IND AS 103.

c) The amalgamation has been accounted for under the ‘pooling of interests’ method as prescribed by Ind AS 103. Accordingly, the assets, liabilities and reserves of PRIL as at April 1, 2016 have been taken over at their book values and in the same form.

d) There is no difference between the amounts recoreded as investment of the company and the of share capital of PRIL.

7 In terms of Provisions of Section 135 of the companies Act 2013 and rules thereunder, the company is required to spend an amount of ‘8.02 million (P.Y. Rs.6.87 millions) during the financial year on corporate social responsibility (CSR). However, the company has not spent the requisite amount during this financial year.

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

9 Confirmation letters have been sent in respect of sundry debtors / loans and advances / sundry creditors of which certain confirmations have been received which are accordingly accounted and reconciled. The remaining balances have been shown as per books of accounts and are subject to reconciliation adjustments, if any. In the opinion of the Management, the realizable value of the current assets, loans and advances in the ordinary course of business will not be less than the value at which they are stated in the balance sheet.

10 Disclosure required in accordance with Ind AS - 11 “Constructions Contracts”. In respect of contracts entered into on or after April 1, 2003, contract revenue recognized as gross construction Rs.23,066.98 million (P.Y. Rs.25,322.52 million) contract costs incurred and recognized profit (less recognized losses) Rs.154,973.69 million (P.Y. Rs.135,971.41 million) advance received Rs.594.46 million (P.Y. Rs.925.33 million) retention deposit Rs.2,145.86 million (P.Y. Rs.1822.44 million) and gross amount due from clients for contract works included under current assets Rs.29,465.86 million (P.Y. Rs.27,088.09 million).

11 a) Unbilled work in progress includes stock of land under development (including held in the name of directors/relatives of directors/employees, as nominees of the company).

b) Turnover includes construction of multi purpose projects, water supply projects, irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights (net of rebate / cancellation of Rs. Nil (P.Y. Rs.2000 million)). It also includes duty drawback and entitlement etc but excludes VAT, service tax etc.

c) During the financial year 2010-11, two of Company’s hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors/vendors for further submission to the Government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2017 ‘1,849.70 million (P.Y. ‘1,849.70 million) (including hedging cost of ‘458.71 million (P.Y. Rs.458.71 million) are considered recoverable and billable to the client and hence included under work in progress.

d) Arbitration awards received in favour of the Company amounting to Rs.855.95 million (P.Y. Rs.492.24 million) is accounted for as construction Receipts.

12 Derivative transactions :

Foreign currency exposure that are not hedged by derivative instruments as on March 31, 2017 amounting to Rs.615.13 million (P.Y Rs.624.89 million).

13 The Company’s pending litigations comprise of claims by or against the Company primarily by the customers / contractors/ suppliers, etc. and proceedings pending with tax and other government authorities. The Company has reviewed its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed the contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. In respect of litigations, where the management assessment of a financial outflow is probable, the Company has made adequate provision of Rs.1,20,05,193/- and appropriate disclosure for contingent liabilities is given.

14 In one of the subsidiary company namely Bellona Estate Developers Limited (i.e. BEDL), the lender Banks of the BEDL (Union Bank of India, Vijaya Bank and Syndicate Bank) formed the Joint Lenders Forum (‘JLF’) as per circular DBR.BP.BC.No. 101/21.04.132/2014-15 of Reserve Bank of India (‘RBI’). In the meeting of JLF held on October 29,2015, it was decided to invoke the option of strategic debt restructuring (‘SDR’) under which the lenders converted part of their loans and interest outstanding into equity shares of the company so as to hold 51% shareholding in the BEDL.

The board of directors (the Board) of the BEDL approved SDR in its meeting held on January 12,2016 as also agreed to allot 2,60,205 equity shares in the Company to JLF. For this purpose, authorised capital of the BEDL was increased from present Rs.25,00,000 to Rs.52,00,000 vide a resolution passed by members of the BEDL in the extra ordinary general meeting held on January 13, 2016. Accordingly, shareholders agreement was executed between the BEDL and JLF member Banks on March 30,2016 and upon allotment of shares to member banks of JLF, BEDL has ceased to be subsidiary of the Company from March 30, 2016.

15 The Company has 100% investment in Waterfront Developers Ltd (Waterfront) and has granted loans and advances amounting to Rs.84,21,71,807/- (P.Y. Rs.74,71,70,424/-) till March 31, 2017. Waterfront has invested in step down subsidiary, Le Salines Development Ltd (“LSDL”). LSDL has undertaken a construction project in Mauritius in the year 2009-10. LSDL had received a notice dated June 4, 2015 from the Government of Mauritius for the termination of lease agreement entered on December 11, 2009. Management is of the view that as per the lease agreement lease cannot be terminated on the grounds of clause 14(c) as mentioned in the termination letter. In this regard a notice has been sent to MOHL,Government of Mauritius on July 1, 2016 by LSDL contesting wrongful termination and further PEL and LSDL are exploring the various possibilities to seek compensation from Government of Mauritius. In this case the process of arbitration has been initiated with the Government of Mauritius & PEL/LSDL is confident to get the such compensation.

16 Contingent Liabilities

(a) Commitment for capital expenditure is Rs.294.35 million (P.Y. ‘125.51 million), advance paid Rs.43.78 million (P.Y. Rs.29.26 million). The company is under commitment to construct specific area for land owner.

(b) Counter indemnities given to banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs.12,076.30 million (P.Y. Rs.14,057.00 million) (including Customs Rs.109.17 million (P.Y.’109.17 million) Entry Tax Rs.37.57 million (P.Y. Rs.37.57 million) for the current year includes guarantees given in US$ Nil (P.Y. US$ 10.00 million). Corporate guarantees / letter of credit on behalf of subsidiaries and others is Rs.9889.50 million (P.Y. Rs.12,500.16 million).

(c) The Company has received an amount of Rs.12.74 million in 1997 against arbitration award in its favour. The client has preferred an appeal against above award claiming an amount of ‘213.32 million (P.Y. Rs.213.32 million) before the Hon’ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Service tax liability that may arise on matters in appeal Rs.2,321.78 million (P.Y. Rs.1,085.92 million) and advance paid Rs.82.92 million (P.Y. Rs.20.00 million). Out of the above, Rs.1810.02 million (P.Y. Rs.1,085.92 million) is contractually recoverable from the Clients.

(e) Sales tax Rs.105.29 million (P.Y. ‘105.95 million) (Advance paid Rs.18.57 million (P.Y. Rs.18.68 million)), Cess Rs.110.42 million (P.Y. Rs.107.81 million), Custom Duty Rs.17.62 million (P.Y. Rs.17.62 million) (Advance paid ‘ Rs.8.46 million (P.Y. Rs.8.46 million)).

(f) Income tax liability that may arise on matters in appeal Rs.1,511.19 million (P.Y. Rs.3671.77 million).

(g) Provident fund liability that may arise on matter in appeal Rs.9.52 million (P.Y. Rs.9.52 million) and advance Paid Rs.2.38 million (P.Y. 2.38 million)

(h) The Company is subject to legal proceeding and claims, which have arisen in the ordinary course of business, including certain litigation for land acquired by it for construction purpose, the impact of which is not quantifiable. These case are pending with various courts and are scheduled for hearings. After considering the circumstances, manangement believes that these case will not adversely effect its financial statement.

(i) A part of the immovable property belonging to the company shown under inventories has been offered as security in favour of a bank against credit facilities availed by a JDA partner.

(j) The Company has provided a “cost overrun undertaking” for its associates (BEDP) to a lender.

(k) Proceedings u/s 271 (1) (c) of the Income Tax Act, 1961 for the past assesment years initiated quantum currently not ascertainable, are being contested by the Company.

(l) Entry Tax liabilities on purchase of goods of Rs.7.45 million (P.Y. Rs.11.35 million), against which amount of Rs.0.50 million (P.Y. Rs.5.78 million and bank guarantee for balance amount) have been paid.

17 Information pertaining to loans given to subsidiaries (information pursuant to regulation 34(3) of SEBI (Listing Obligation And Disclosure Requirements) Regulations, 2015:

i) Financial instrument measured at amortised cost

The carrying amount of financial assets and liabilities 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 recieved or settled.

Note : 18

Financial risk management

The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company’s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, loans, trade receivables and other receivables.

The Company is exposed to market risk, credit risk and liquidity risk. The board of directors (‘Board’) oversee the management of these financial risks through its risk management committee. The risk management policy of the Company formulated by the risk management committee and approved by the Board, states the Company’s approach to address uncertainties in its endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company’s management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company’s financial performance.

The following disclosures summarize the Company’s exposure to financial risks and information regarding use of derivatives employed to manage exposures to such risks. Quantitative sensitivity analysis have been provided to reflect the impact of reasonably possible changes in market rates on the financial results, cash flows and financial position of the Company.

1) Market risk

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

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the Company has fixed interest bearing borrowings, the exposure to risk of changes in market interest rates is minimal. The Company has not used any interest rate derivatives.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company does not enter into any derivative instruments for trading or speculative purposes.

The above table represents total exposure of the Company towards foreign exchange denominated liabilities (net). The details of unhedged exposures are given as part of Note no. 42

Sensitivity analysis

The Company is mainly exposed to changes in EURO, as NPR is to be repaid at fixed rate; hence the Company is not exposed to any exchange rate fluctuation. The below table demonstrates the sensitivity to a 5% increase or decrease in the EURO against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management’s assessment of reasonably possible change in foreign exchange rate.

c) Equity price risk

The Company’s 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 Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

As at March 31, 2017, the exposure to listed equity securities at fair value was Nil. Since none of the investments are measured at FVTPL, there is no price risk, hence no impact on profit /loss.

2) Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure of the financial assets are contributed by trade receivables, unbilled work-in-progress, cash and cash equivalents and receivable from group companies.

Credit risk on trade receivables and unbilled work-in-progress is limited as the customers of the Company mainly consists of the government promoted entities having a strong credit worthiness. Whenever required, the Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled work-in-progress. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, third party report, financial condition, ageing of accounts receivable and the Company’s historical experience for customers.

3) Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

Note : 19

Capital Management

For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

As at March 31, 2017, the Company has only one class of equity shares and has moderate debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans. Consistent with others in the industry, the Company monitors its capital using the gearing ratio which is total debt divided by total capital.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.

20 Previous year’s figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2016

NOTE : 1.

EMPLOYEE BENEFITS

I Brief description of the plans

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Company''s defined contribution plans are provident fund, employee state insurance and employees'' pension scheme (under the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company''s policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest obligation is recognized immediately in the statement of profit and loss as actuarial loss. Any loss/gain arising out of the investment with the plan is also recognized as expense or income in the period in which such loss/gain occurs.

2. (i) Income-tax assessments are completed up to A.Y. 2013-2014. Several appeals for the earlier assessment years are pending before the Appellate Authorities and out of the aggregate demand of '' 3,404.43 Million, Rs. 1,050.69 Million (P.Y. Rs. 1,050.69 Million) has been already adjusted / paid. The Company has made a provision for tax of Rs. 6.46 Million (P.Y. Rs. 171.18 Million) under all proceeding under the Income Tax Act, 1961, and increment of Deferred Tax Assets by Rs. 156.04 Million (P.Y. Rs. 72.23 Million).

(ii) The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available. The company has filed a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted. Recently the Hon''ble Income Tax Appellate Tribunal, Mumbai vide its order dated 30.9.2015 has held that the Assessed is eligible for the deduction u/s 80IA(4) on all the projects claimed by it including the projects contract which have been entered into with Government Corporations. However, out of abundant caution the provisions made with respect to the deduction claimed on Government Corporations is not written back. Excess provision for the tax of '' Nill (P.Y. '' 600.64 Million) has been adjusted and credited to Reserves.

3. In view of the amendment in the Service Tax Act, certain projects which were hitherto not liable for service tax became liable to tax by virtue of the said amendment effective 1st July 2012. The amount of service tax payable on such projects is reimbursable by the client as per the contract conditions and the same has been reflected as receivables. However in few cases where the client has not accepted this liability, the same has been debited to the statement of profit and loss.

4. LEASE

The Company has taken various construction equipments under non cancellable operating leases. The future minimum lease payment in respect of these as at March 31, 2016 are as follows:

5. The Company has main reportable business segment namely “Civil Construction “.

6. Income consisting of construction income of Rs.109.60 Million (P.Y. Rs. Nil) and other income of Rs.12.10 Million (P.Y. Rs. 60.66 Million) and expenses consisting of piece rate expenses Rs. 68.34 Million (P.Y. Rs. 33.38 Million), store material purchases Rs. 0.09 Million (P.Y. Rs. 14.67 Million) and other expenses Rs.126.62 Million (P.Y. Rs. 189.58 Million) pertaining to prior period credited and debited respectively to the Statement of Profit and Loss under various heads of accounts.

7. In accordance with “The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to “The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011 and on December 29, 2011, the Company has carried over exchange (gain)/loss of Rs. Nil (P.Y. Rs. 3.89 million) through “Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2020. Further exchange loss (net) of Rs.(-) 0.12 Million (P.Y. Rs. Nil) has been added/ (reduced) to the cost of the respective fixed asset.

8. In terms of provisions of Section 135 of the Companies Act 2013 and rules there under, the Company is required to spend an amount of Rs. 6.87 Million (P.Y. Rs. 8.90 Millions) during the financial year on Corporate Social Responsibility (CSR). However, the Company has not spent the requisite amount during this financial year.

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

10. Confirmation letters have been sent in respect of sundry debtors / loans and advances / sundry creditors of which certain confirmations have been received which are accordingly accounted and reconciled. The remaining balances have been shown as per books of accounts and are subject to reconciliation adjustments, if any. In the opinion of the management, the realizable value of the current assets, loans and advances in the ordinary course of business will not be less than the value at which they are stated in the balance sheet.

11. Additional information pursuant to the provision of sub - clause (ii) of clause (40) of section 2 (5) of part II of Schedule III to the Companies Act, (wherever applicable).

12. Disclosure required in accordance with Accounting Standard - 7 (Revised). In respect of contracts entered into on or after 1st April 2003, contract revenue recognized as gross construction Rs. 24,986.33 Million (P.Y. Rs. 21,581.62 Million) contract costs incurred and recognized profit (less recognized losses) Rs. 129,834.23 Million (P.Y. Rs. 111,450.01 Million) advance received Rs. 535.70 Million (P.Y. Rs. 838.63 Million) retention deposit Rs. 1,822.44 million (P.Y. Rs. 2,026.18 Million) and gross amount due from clients for contract works included under current assets Rs. 26,552.47 Million (P.Y. Rs. 19,950.36 Million).

13. a Unbilled work in progress includes stock of land under development (including held in the name of directors/relatives of directors/employees, as nominees of the Company).

b Turnover includes construction of multipurpose projects, water supply projects, irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights (net of rebate / cancellation of Rs. 2,000 Million (P.Y. Rs. 1068 Million)). It also includes duty drawback and entitlement etc but excludes VAT, Service Tax etc.

c. During the Financial year 2010-11, two of Company''s hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors / vendors for further submission to the Government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2016 Rs.1,849.70 Million (P.Y. Rs. 1,849.70 Million) (including hedging cost of Rs. 458.71 Million (P.Y. Rs. 458.71 Million) are considered recoverable and billable to the client and hence included under work in progress.

d. Arbitration awards received in favor of the Company amounting to Rs. 492.24 Million (P.Y. Rs. 783.56 Million) is accounted for as construction receipts.

14. Derivative transactions:

a. For Interest Rate Related Risks:

Nominal amounts of interest rate swaps entered into by the company and outstanding as on 31st March, 2016 amounts to Rs. Nil (P.Y. Nil).

b. Foreign Currency Exposure that are not hedged by derivative instruments as on March 31, 2016 amounting to Rs. -181.75 Million (P.Y Rs.-330.54 Million).

15. Contingent Liabilities

a Commitment for capital expenditure is Rs. 125.51 Million (P.Y. Rs. 169.72 Million), advance paid Rs. 29.26 Million (P.Y. Rs. 36.47 Million).

b Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs. 14,057.00 Million (P.Y. Rs. 13,115.98 Million) (including Customs Rs. 109.17 Million (P.Y. Rs. 120.64 Million) Entry Tax Rs. 37.57 Million ( P.Y. Rs. 67.57 Million) for the current year includes guarantees given in US$ 10 Million (P.Y. US$ 10.00 Million). Corporate guarantees / Letter of Credit on behalf of subsidiaries and others is Rs. 12,500.16 Million (P.Y. Rs. 11,135.34 Million) (against which the Company has obtained counter indemnities for Rs. Nil (P.Y. Rs 4,821.06 Million) and towards Custom Duty Rs. Nil (P.Y. Rs. 71.62 Million).

c The Company has received an amount of Rs. 12.74 Million in 1997 against arbitration award in its favor. The client has preferred an appeal against above award claiming an amount of Rs 213.32 Million (P.Y. Rs. 213.32 Million) before the Hon''ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

d Service tax liability that may arise on matters in appeal Rs. 1,085.92 Million (P.Y. Rs. 1,085.92 Million) and advance paid Rs. 20.00 Million (P.Y. Rs. 20.00 Million). However, this amount is contractually recoverable from the Clients.

e Sales tax Rs. 105.95 Million (P.Y. Rs 99.56 Million) (Advance paid Rs. 18.68 Million (P.Y. Rs. 17.09 Million)), Cess Rs. 107.81 Million (P.Y. Rs. 78.55 Million), Custom Duty Rs. 17.62 Million (P.Y. Rs. 17.62 Million) (Advance paid Rs. Rs. 8.46 Million (P.Y. Rs. 8.46 Million)).

f Income tax liability that may arise on matters in appeal Rs. 3,671.77 Million (P.Y. Rs. 2,819.73 Million).

g Trade Receivables/ Client Retention to the extent of Rs. Nil (P.Y. Rs. 179.47 Million) have been discounted with Bank on Recourse Basis.

h Allowances due to employees in remote areas (North East) may accrue in future maximum to the extent of Rs. Nil (P.Y. Rs. 0.37 Million). The same will be paid to the employees who were on the payrolls upto July 1, 2014.

i Provident Fund liability that may arise on matter in appeal Rs. 9.52 Million ( P.Y. Rs. 9.52 Million) and advance Paid Rs. 2.38 Million (P.Y. 2.38 Million)

j Claims not acknowledged as debt Rs. Nil (P.Y. Rs. 485 Million) (any liability herein shall be borne by the Principal Contractor).

k Entry Tax liabilities on purchase of goods of Rs. 11.35 Million (against which amount of Rs. 3.78 Million have been paid and for the balance amount of Rs. 7.60 Million bank guarantee has been furnished) for assessment of F.Y. 2010 - 11 which has been stayed by Hon''ble High Court of H.P. The Company has not provided any further liability for assessment of the relevant financial year as the amount for same is not ascertainable.

16. Information pertaining to loans given to subsidiaries (information pursuant to regulation 34(3) of SEBI (Listing Obligation And

Disclosure Requirements) Regulations, 2015:

Loans and Advances in the nature of loans given to Subsidiaries and Associates:

for reversal of Prudent Provision for Tax refer to note no. 25(ii) of notes to Standalone Financial Statement. And note no. 24(ii) of Notes to Consolidated Financial Statements

Consolidated

The Consolidated total income which stood at '' 41,932.57 million increased by 18.75% as against '' 35,313.09 million for the previous year. The profit before depreciation was lower by 137.52% at Rs. (360.64) million as against Rs. 961.15 million for the previous year. The net loss is at Rs. 1,866.57 million as against profit of Rs. 84.69 million for the previous year.

Standalone

On Standalone basis, the total income stood at Rs. 28,444.66 million as against Rs. 26,682.25 million for the previous year. The profit before depreciation was lower at Rs. 300.84 million as against Rs. 737.86 million for the previous year. The Company has incurred Net Loss of Rs. 186.91 million as against the profit of Rs. 118.86 million for the previous year.

Dividend

Due to operating losses, your Directors have not recommended payment of dividend for the financial year 2015-16.

Information on state of affairs of the Company

Information on the operational and financial performance, among others, is given in the Management Discussion and Analysis Report which is forming part of the Annual Report and is in accordance with Regulation 34 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

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Mar 31, 2015

1 EMPLOYEE BENEFITS

I Brief description of the Plans

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Company's defined contribution plans are provident fund, employee state insurance and employees' pension scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company's defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company's policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest obligation is recognised immediately in the statement of profit & loss as actuarial loss. Any loss/gain arising out of the investment with the plan is also recognised as expense or income in the period in which such loss/gain occurs.

2 (i) Income-tax assessments are completed up to A.Y. 2012-2013. Several appeals for the earlier assessment years are pending before the Appellate Authorities and out of the aggregate demand of Rs. 3256.18 Million, Rs. 1,050.69 Million (P.Y. Rs. 1,584.95 Million) has been already adjusted / paid. The Company has made a provision for tax of Rs. 171.18 Million (P.Y. Rs. 149.63 Million) (net of Rs. Nil. (P.Y. Rs. 7.07 Million) reversal of excess liability of earlier years) under all proceeding under the Income Tax Act, 1961 , and Deferred Tax Assets of Rs. 72.23 Million (P.Y. Rs. 40.64 Million). The Company has been advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly, Wealth Tax of Rs. 0.89 Million (P.Y. Rs. 3.37 Million) has been provided including liability of Rs. Nil ( P.Y. Rs. 2.27 Millions ) of previous years under all proceeding under the act.

(ii) The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available. The company has fled a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted. Recently the appellate authority held that the company is eligible for the said deduction on certain projects. Accordingly, the corresponding excess provision for the tax of Rs. 600.64 Million (P.Y. Rs. 981.31 Million) has been adjusted and credited to Reserves.

3 In view of the amendment in the Service Tax Act, certain projects which were hitherto not liable for service tax became liable to tax by virtue of the said amendment effective 1st July 2012. The amount of service tax payable on such projects is reimbursable by the client as per the contract conditions and the same has been reflected as receivables. However in few cases where the client has not accepted this liability, the same has been debited to the profit & loss account.

4 LEASE

The Company has taken various construction equipments under non cancellable operating leases. The future minimum lease payment in respect of these as at March 31, 2015 are as follows:

5 The Company has main reportable business segment namely "Civil Construction".

6 Income consisting of Construction income of Rs. Nil (P.Y. Rs. 50.69 Million) and Other Income of Rs.60.66 Million (P.Y. Rs. 13.35 Million) and Expenses consisting of Piece Rate Expenses Rs.33.38 millions (P.Y. Rs. 10.37 Million), Store material purchases Rs. 14.67 millions and Other Expenses Rs. 189.58 Million (P.Y. Rs. 213.80 Million) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

7 In accordance with "The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011 and further amended on December 29, 2011, the Company has carried over exchange (gain)/loss of Rs. 3.89 million (P.Y. Rs. 104.73 million) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2020. Further exchange loss (net) of Rs. Nil (P.Y. Rs. 22.38 million) has been added to the cost of the respective fixed asset.

8 In terms of Provisions of Section 135 of the companies Act 2013 and rules thereunder, the company is required to spend an amount of Rs. 8.90 Million during the financial year on Corporate Social Responsibility (CSR). However, the company has not spent the requisite amount during this financial year.

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

10 Confirmation letters have been sent in respect of Sundry Debtors / Loans and Advances / Sundry Creditors of which certain confirmations have been received which are accordingly accounted and reconciled. The remaining balances have been shown as per books of accounts and are subject to reconciliation adjustments, if any. In the opinion of the Management, the realizable value of the current assets, loans and advances in the ordinary course of business will not be less than the value at which they are stated in the Balance Sheet.

11 Additional information pursuant to the provision of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, (wherever applicable).

12 Disclosure required in accordance with Accounting Standard – 7 (Revised). In respect of contracts entered into on or after 1st April 2003, contract revenue recognized as gross construction Rs. 21,581.62 Million (P.Y. Rs. 24,724.63 Million) contract costs incurred and recognized profit (less recognized losses) Rs. 111,450.01 Million (P.Y. Rs. 109,818.75 Million) advance received Rs. 838.63 Million (P.Y. Rs. 1373.33 Million) retention deposit Rs. 2,026.18 million (P.Y. Rs. 2,005.99 Million) and gross amount due from clients for contract works included under current assets Rs. 19,950.36 Million (P.Y. Rs. 14,246.76 Million).

13 a) Unbilled Work in Progress includes stock of land under development (including held in the name of directors/relatives of directors/employees, as nominees of the company).

b) Turnover includes, construction of multi purpose projects, water supply projects, Irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights (net of rebate / cancellation of Rs. 1068.00 Million). It also includes duty drawback and entitlement etc but excludes VAT, Service Tax etc.

c) During the Financial year 2010-11, two of Company's hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors / vendors for further submission to the government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2015 Rs. 1849.70 Million (P.Y. Rs. 1,865.38 Million) (including hedging cost of Rs. 458.71 millions (P.Y. Rs. 458.71 Millions)) are considered recoverable and billable to the client and hence included under work in progress.

d) Arbitration awards received in favour of the Company amounting to Rs. 783.56 million ( P.Y. Rs. 61.71 million) is accounted for as construction Receipts.

14 Derivative transactions :

a. For Interest Rate Related Risks:

Nominal amounts of interest rate swaps entered into by the company and outstanding as on 31st March 2015 amounts to Rs. Nil ( P.Y. Rs.554.24 Million).

b. Foreign Currency Exposure that are not hedged by derivative instruments as on March 31, 2015 amounting to Rs. -330.54 Million (P.Y Rs. 1,160.83 Million).

15 Contingent Liabilities

(a) Commitment for capital expenditure is Rs. 169.72 Million (P.Y. Rs. 204.21 Million), advance paid Rs. 36.47 Million (P.Y. Rs. 7.81 Million).

(b) Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs. 6,670.47 Million (P.Y. Rs. 7,203.70 Million) including Customs Rs. 120.64 Million (P.Y. Rs. 305.81 Million) Entry Tax Rs. 67.57 Million ( P.Y. Rs. 37.57 Million) for the current year includes guarantees given in US$ 10 Million ( P.Y. US$ 10.00 Million). Corporate guarantees / Letter of Credit on behalf of subsidiaries and others is Rs. 11,135.34 Million ( P.Y. Rs. 14,034.69 Million) against which the Company has obtained counter indemnities for Rs. 4,821.06 Million (P.Y. Rs. 4802.69 Million) and towards Custom Duty Rs. 71.62 Million (P.Y. Rs. 71.62 Million).

(c) The Company has received an amount of Rs. 12.74 Million in 1997 against arbitration award in its favour. The client has preferred an appeal against above award claiming an amount of Rs. 213.32 Million (P.Y. Rs. 213.32 Million) before the Hon'ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Service tax liability that may arise on matters in appeal Rs. 1085.92 Million (P.Y. Rs. 654.55 Million) and advance paid Rs. 20.00 Million (P.Y. Rs. 2.68 Million). However, this amount is contractually recoverable from the Clients.

(e) Sales tax Rs. 99.56 Million (P.Y. Rs. 88.00 Million) (Advance paid Rs. 17.09 Million (P.Y. Rs. 18.51 Million)), Cess Rs. 78.55 Million (P.Y. Rs. 53.70 Million), Custom Duty Rs. 17.62 Million (P.Y. Nil) (Advance paid Rs. 8.46 Million (P.Y. Nil)).

(f) Income tax liability that may arise on matters in appeal Rs. 2,819.73 Million (P.Y. Rs. 981.31 Million).

(g) Trade Receivables/ Client Retention to the extent of Rs. 179.47 Million (P.Y. Rs. Nil) have been discounted with Bank on Recourse Basis.

(h) Allowances due to employees in remote areas (North East) may accrue in future maximum to the extent of Rs.0.37 million (Rs. 4.56 Million). The same will be paid to the employees who continue to be on the payrolls upto July 1, 2014 (previously October, 1).

(i) Provident Fund liability that may arise on matter in appeal Rs. 9.52 Million ( P.Y. Rs. 9.52 Million) and advance Paid Rs. 2.38 Millions (P.Y. 2.38 Millions)

(j) Claims not acknowledged as debt Rs. 485 Million (any liability herein shall be borne by the Principal Contractor).

(k) Entry Tax liabilities on purchase of goods of Rs. 11.35 Millions (against which amount of Rs. 3.78 Millions have been paid and for the balance amount of Rs. 7.60 Millions bank guarantee has been furnished) for A.Y. 2010 - 11 which has been stayed by Hon'ble High Court of H.P. The Company has not provided any further liability from the relevant assessment year as the amount for same is not ascertainable.

16 Disclosures as required under Clause 32 of listing agreements:

Loans and Advances in the nature of loans given to Subsidiaries and Associates:

17 Previous year's figures have been regrouped, rearranged and reclassified wherever necessary.

---

Mar 31, 2014

1 BASIS OF PREPARATION

The financial statements are prepared under historical cost convention, on accrual basis of accounting, to comply in all material aspects with all the applicable Accounting Principles in India, the applicable Accounting Standards notified U/S 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

LONG TERM BORROWINGS

1 Debentures

a) 9.8% Secured Redeemable Non Convertible Debentures was allotted on July 20, 2009 for a period of 7 years. These debentures have a face value of Rs. 1.0 Million each aggregating to Rs. 900 Million (P.Y. Rs. 900 Million) and are to be redeemed on July 20, 2016 in a single instalment, with a put / call option available and exercisable at par at the end of 5th year from the date of allotment i.e. July 20, 2014. The same is secured against immovable property of the Company.

b) 9.55% Secured Redeemable Non Convertible Debentures was allotted on April 26, 2010 for a period of 5 years. These debentures have a face value of Rs. 1.0 Million each aggregating to Rs. 700.00 Million(P.Y. Rs. 1,000 Million). These Debentures will be redeemed as follows - April 26, 2014- Rs. 300 Million, and April 26, 2015 - Rs. 400 Million. The same is secured against immovable property and subservient charge on all the Fixed assets of the Company.

c) 10.75% Secured Redeemable Non Convertible Debentures was allotted on March 3, 2011 for a period of 5 years.

These debentures have a face value of Rs. 0.10 Million each aggregating to Rs. 350.00 Million(P.Y. Rs. 500 Million). These Debentures will be redeemed as follows- March 3, 2015 - Rs. 150 Million and March 3, 2016 - Rs. 200 Million. The same is secured against immovable property and subservient charge on all the Fixed asset of the Company. Interest rate has been revised to 13% (P.Y. 12%) w.e.f. 18th Oct. 2013.

d) 11.40% Secured Redeemable Non Convertible Debentures was allotted on July 11, 2011 for a period of 5 years.

These debentures have a face value of Rs. 0.10 Million each aggregating to Rs. 1,500.00 Million. These Debentures will be redeemed as follows- July 11, 2014 - Rs. 500 million, July 11, 2015 Rs. 500 million and July 11, 2016 Rs. 500 million. The same is secured against immovable property of the Company and its subsidiaries. Interest rates revised to 13% w.e.f. October 2013.

e) 11.30% Secured Redeemable Non Convertible Debentures was allotted on September 17, 2012 for a period of 10 years. These debentures have a face value of Rs. 1.0 Million each aggregating to Rs. 1,500.00 Million and are to be redeemed in September 17, 2022. The same is secured against charge on immovable assets of the Company and of its subsidiaries.

The above debentures are listed on The National Stock Exchange of India.

As per Section 117C of the Companies Act, 1956 the Company has created adequate Debenture Redemption Reserve for both the above series of Secured Redeemable Non Convertible Debenture issued during the year. Further, in terms of clarification vide circular no. 04/2013 dated 11.2.2013 issued by the Ministry of Corporate Affairs, Government of India, the Company had not made the required deposit/ investment to secure the repayment of debentures maturing during 2013-14. However, the Company has redeemed/paid all its debentures maturing in 2013-14 in time.

2 Term Loan From Banks

a) The Term loans are secured by first charge on the specific assets acquired out of the term loan along with unencumbered assets & guarantees. The rate of Interest for these loans vary between 10% - 14% on an average, with a repayment period of 3-5 years respectively. Term Loan includes Working Capital Term Loan secured by a First Pari-passu charge on the receivables and WIP, mortgage over certain Lands owned by Subsidiary companies and pledge of 30% shareholding of subsidiaries owning real estate Lands.

The Promoters Mr. Pravin Patel and Mr. Rupen Patel has provided personal guarantees for the above loan. Subsequently, the Company has counter indemnified the guarantees provided by the Promoters.

3 Term Loan From Others

a) Includes funds from Financial Institutions on Equipments, secured against the said Equipments. These loans carry an interest rate of average between 10%- 13% on an average, with a repayment period of 3-5 years respectively.

4 Unsecured Loans -From Bank

Includes Rs. NIL Millions (P.Y. 1,000 Millions) Loans repayable within a period of 2 years carrying an average Interest rate of 11-13% p.a.

Short Term Loan

1 Includes Loans against Equipments Financed and by earmarking from bank Guarantee limits, at Interest rate of 12.25% -12.75% (P.Y. 12.25%) payable within a year.

2 Loans Repayable on Demand

Includes Cash Credit and Working Capital Demand Loan from various Banks. These loans have been given against hypothecation of stocks, spare parts, book debts, work in progress & guarantees;

Terms of Repayment :

Cash Credit- Yearly Renewal , except for a Cash Credit taken from IDBI Bank Short Term Loan - EARMARK CC" which is payable within 90 days. Rate of Interest-Ranges between 11% to 14%. (P.Y. 9.75% to 13.75%)

3 Unsecured Loan

a Includes loans from Banks which are payable at yearly rests with an average Interest cost ranging between 12.60% to 13.75% (P.Y. 11% - 12%)

b Includes loans from related parties carrying nil Interest rates, which are payable on demand. Such loan amount to be appropriated upon exercise of the option of conversion of Optional Covertible Preference Shares into Equity Shares (refer note # 39).

OTHER CURRENT LIABILITIES

1 a) The Company has no amounts due to suppliers under the Micro Small and Medium Enterprise Development Act, 2006, as at March 31, 2014.

Note: The above information has been determined to the extent such parties had been identified on the basis of information available with the Company.

b) Other Liabilities includes statutory dues and advances received against sale of assets.

c) Includes Rs. Nil (P.Y. Rs. 87.13 Million) against lease of office premises.

OTHER INVESTEMENTS :

Aggregated amount of Unquoted Investments as at 31st March 2014 Rs. 5,586.07 Million (Rs. 5,381.46 Million)

II Aggregated amount of Quoted Investments as at 31st March 2014 Rs. 310.31 Million, Market value Rs. 151.20 Million (P.Y. Rs. 330.24 Million, Market value Rs. 177.30 Million)

III Includes Investment in National Saving Certificates, in the name of Directors , lodged with Project Authorities

IV A firm AHCL - PEL having fixed capital of Rs. 75,000 (P.Y. Rs. 75,000), profit sharing is as follows :- the company 5% (P.Y. 5%), Ace Housing & Const. Ltd. 45% (P.Y. 45%) & P.Patel 50% (P.Y. 50%).

A firm Patel Advance JV having nil fixed capital, profit sharing is as follows : the Company 27% (P.Y.27%), Advance Const. Co. Pvt. Ltd. 26% (P.Y. 26%) Patel Realty (I) Ltd. 26% (P.Y. 26%) & Apollo Buildwell Pvt. Ltd. 21% (P.Y. 21%)

LOANS AND ADVANCES

a) Advances Recoverable in Cash or in kind or for value to be received includes Rs. 13.88 Million (P.Y. Rs. 7.73Million) due from officers of the Company and Rs. 0.13 Million (P.Y. Rs. 164.52 million) due from company in which Directors are Directors.

b) Includes secured advance to piece workers Rs. 91.39 Million (P.Y. Rs. 18.43 Million)

c) includes share application Money in Raichur Sholapur Transmission Company Ltd. Rs. 26.67 Million - Pending allotment

TANGIBLE ASSETS

1 Land includes Rs. 9.04 Million (P.Y. Rs. 9.04 Million) held in the name of Directors, relatives of Directors and employees for and on behalf of the Company

2 a) Building includes Building [Gross Block - Rs. 133.06 million (P.Y. Rs. 210.07 Million), Accumulated Depreciation Rs. 19.93 Million (P.Y. Rs. 28.42 Million)] and Factory Building [ Gross Block - Rs. 156.01 million (Rs. 142.13 Million), Accumulated Depreciation Rs. 29.31 million (P.Y. Rs. 23.77 Million)]

b) Includes Rs. 0.02Million (P.Y. Rs. 0.02 Million) being the value of 30 shares and share deposits in Co - operative Societies 24 EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

I Brief description of the Plans

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Company''s defined contribution plans are provident fund, employee state insurance and employees'' pension scheme (under the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company''s policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest obligation is recognised immediately in the statement of profit & loss as actuarial loss. Any loss/gain arising out of the investment with the plan is also recognised as expense or income in the period in which such loss/gain occurs.

(i) Income-tax assessments are completed up to A.Y. 2011-2012. Several appeals for the earlier assessment years are pending before the Appellate Authorities and the aggregate demand for the same amounting to Rs. 1,584.95 Million (P.Y. Rs. 692.49 Million) has been already adjusted / paid. The Company has made a provision for tax of Rs. 149.63 Million net of Rs. 7.07 million reversal of excess liability of earlier years (P.Y. Rs. 330.50 Million including liability for earlier years of Rs. 100.50 Million) under all proceeding under the Income Tax Act, 1961 , and Deferred Tax Liability (Assets) of Rs. (40.64) Million (P.Y. Rs. 56.28 Million). The Company has been advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly, Wealth Tax of Rs. 3.37 Million (P.Y. Rs. 1.15 Million) has been provided including liability of Rs. 2.27 Million (P.Y. Rs. Nil) of pervious years under all proceeding under the act.

(ii) The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available. The impact of Rs. 1,485.11 Million upto March 31, 2009 due to the above amendment, though being subjudice, has been provided and adjusted out of the Surplus in Profit and Loss Account in earlier years. Interest liability of Rs. 935.06 million has not been provided considering the Company has legally contested the validity of the above amendment and intention of the said section. Recently the appellate authority held that company is eligible for the said deduction on certain projects. Accordingly, the corresponding excess provision for the tax of Rs. 981.31 Million has been adjusted and credited to Reserves. Further, the company has filed a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted.

* In view of the amendment in the Service Tax Act, certain projects which were hitherto not liable for service tax became liable to tax by virtue of the said amendment effective 1st July 2012. The amount of service tax on such projects is reimbursable by the client as per the contract conditions and the same has been reflected as Trade Receivables. However in few cases where the client has not accepted this liability, the same has been debited to the profit & loss account.

DEFFERED TAX

The Company is entitled to deductions under the Income Tax Act, which are in nature of permanent benefits. However, deferred tax adjustments on account of timing differences as described in Accounting Standard - 22 ''Accounting for Taxes on Income'' issued by the Institute of Chartered Accountants of India, is made.

* The Company has main reportable business segment namely "Civil Construction ".

* Income consisting of Construction income of Rs. 50.69 Million ( P.Y. Rs. 3.43 Million) and Other Income of Rs. 13.35 Million (P.Y. Rs. 14.10 Million) and Expenses consisting of Piece Rate Expenses Rs. 10.37 (P.Y. Rs. Nil) and Other Expenses Rs. 213.80 Million (P.Y. Rs. 49.47 Million) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

* In accordance with "The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011 and further amended on December 29, 2011, the Company has carried over exchange (gain)/loss of Rs. 104.73 million (P.Y. Rs. 65.27 million) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2020. Further exchange loss (net) of Rs. 22.38 million (P.Y. Rs. 1.69 million) has been added to the cost of the respective fixed asset.

* Debit and Credit Balances are subject to confirmation from creditors, debtors and sub contractors. The management does not expect any material difference affecting the financial statements for the year.

* Disclosure required in accordance with Accounting Standard - 7 (Revised). In respect of contracts entered into on or after 1st April 2003, contract revenue recognized as gross construction Rs. 24,724.63 Million contract costs incurred and recognized profit (less recognized losses) Rs. 109,818.75 Million advance received Rs.Rs. 1,373.33 Million retention deposit Rs. 2,005.99 million and gross amount due from clients for contract works included under current assets Rs. 14,246.76 Million.

a) Unbilled Work in Progress includes stock of land under development (including held in the name of directors/relatives of directors/employees, as nominees of the company).

b) Turnover includes, construction of multi purpose projects, water supply projects, Irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights (net of rebate). It also includes duty drawback and entitlement etc but excludes VAT, Service Tax etc.

c) During the Financial year 2010-11, two of Company''s hydropower projects in Loharina gpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors / vendors for further submission to the government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2014 Rs. 1865.38 Million (P.Y. Rs. 1,865.38 Million) (including hedging cost of Rs. 458.71 million (P.Y. Rs. 458.71 Million) are considered recoverable and billable to the client and hence included under work in progress.

d) Arbitration awards received in favour of the Company amounting to Rs. 61.71 million (P.Y. Rs. 778.52 million) is accounted for as construction Receipts.

e) The company is executing a contract for development of real-estate project for the Client viz Terra Land Developers Pvt. Ltd. The Client is in process of changing purpose of project from commercial to residential project, as a result of this cost incurred of Rs. 285.13 million (P.Y. Rs. 231.32 million), pending achievement of milestone as per the contract, is included in closing Work-in-Progress.

* The Allotment Committee of Directors of the Company at their meeting held on March 21, 2014 has converted unsecured loan from the Promoters entities by allotment of 69,79,131 Zero Coupon Optional Convertible Preference shares(OCPS) of Re. 1 each fully paid up aggregating to Rs. 69,79,131 to the Promoter entities of the Company on Preferential basis with an option to convert into Equity shares, partially or fully, in one or more trenches, in one or more financial year at price of Rs. 57.50 per share (including premium of Rs. 56.50 per share). The Promoter entities have exercised their option and the Committee on March 31, 2014 has allotted 64,17,174 shares and the balance 5,61,957 shares has been allotted on April 15, 2014.

Derivative transactions :

a. For Interest Rate Related Risks:

Nominal amounts of interest rate swaps entered into by the Company and outstanding as on 31st March 2014 amounts to Rs. 554.24 Million (P.Y. Rs. 505.75 Million).

Contingent Liabilities

(a) Commitment for capital expenditure is Rs. 204.21 Million (P.Y. Rs. 442.06 Million), advance paid Rs. 7.81 Million (P.Y. Rs. 17.59 Million)

(b) Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs. 7,203.70 million ( P.Y. Rs. 7,502.76 million) (including Customs Rs. 305.81 million (P.Y. Rs. 285.75 million) Entry Tax Rs. 37.57 Million (P.Y. Rs. 37.57 Million) for the current year includes guarantees given in US$ 10 Million (P.Y. US$ 10.00 million). Corporate guarantees on behalf of subsidiaries and others is Rs. 14,034.69 million (P.Y. Rs. 10,397.29 million) (against which the Company has obtained counter indemnities for Rs. 4,802.69 million (P.Y. Rs. 3,002.69 Million) and towards Custom Duty Rs. 71.62 million (P.Y. Rs. 71.62 million).

(c) The Company has received an amount of Rs. 12.74 Million in 1997 against arbitration award in its favour. The client has preferred an appeal against above award claiming an amount of Rs. 213.32 ('' 213.32 Million) before the hobble appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Service tax liability that may arise on matters in appeal Rs. 654.55 Million and advance paid Rs. 2.68 Million. However, this amount is contractually recoverable from the Clients.

(e) Sales tax Rs. 88.00 Million (P.Y. Rs. 33.51 Million (Advance paid Rs. 18.51 Million(P.Y. Rs. 18.51 million). Cess Rs. 53.70 Million (P.Y. Rs. 7.46 Million).

(f) Income tax liability that may arise on matters in appeal Rs. 981.31 Million (P.Y. Rs. Nil) refer note # 25 (ii).

(g) Trade Receivables/ Client Retention to the extent of Rs. Nil (P.Y. Rs. 475.00 Million) have been discounted with Bank on Recourse Basis.

(h) Allowances due to employees in remote areas (North East) may accrue in future maximum to the extent of Rs. 4.56 Million (Rs. 2.30 Million).

The same will be paid to the employees who continue to be on the payrolls upto July 1, 2014 (previously October, 1).

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Mar 31, 2013

1 BASIS OF PREPERATION

The financial statements are prepared under historical cost convention, on accrual basis of accounting, to comply in all material aspects with all the applicable Accounting Principles in India, the applicable Accounting Standards notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

2 EMPLOYEE BENEFITS

I Brief description of the Plans

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Company''s defined contribution plans are provident fund, employee state insurance and employees'' pension scheme (under the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company''s defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company''s policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest oligation is recognised immediately in the statement of profit & loass as acturial loss. Any loss/gain arising out of the investment with the plan is also recognised as expense or income in the period in which such loss/gain occurs.

3 (i) Income-tax assessments are completed up to assessment year 2011-2012. Several appeals for the earlier assessment years are pending before the Appellate Authorities and the aggregate demand for the same amounting to Rs. 692.49 million has been already adjusted / paid. The Company has made a provision for tax of Rs. 330.50 million (P.Y. Rs. 320.00 million) including liability of Rs. 100.50 million (P.Y. Rs. Nil) of previous years under all proceeding under the Income Tax Act, 1961 , and Deferred Tax Liability (Assets) of

Rs. (56.58) million (P.Y. 31.31 million). The Company has been advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly, Wealth Tax ofRs. 1.15 million (P.Y. Rs. 1.50 million) has been provided.

(ii) The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available. The impact ofRs. 1,485.11 million upto March 31, 2009 due to the above amendment, though being subjudice, has been provided and adjusted out of the Surplus in Profit and Loss Account. Interest liability of Rs. 732 million has not been provided considering the Company has legally contested the validity of the above amendment and intention of the said section. Further, the Company has filed a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted.

4 In view of the amendment in the Service Tax act with effect from July 1, 2012, company is in the process of obtaining an expert opinion with respect to its liability thereunder. The same is contracutally recoverable from the Clients, however, out of prudence the Company has made a provision of Rs. 280.11 million (net of input tax credit) towards this liability. Based upon the expert opinion the Company will discharge its liability, if required.

5 DEFFERED TAX

The Company is entitled to deductions under the Income Tax Act, which are in nature of permanent benefits. However, deferred tax adjustments on account of timing differences as described in Accounting Standard - 22 ''Accounting for Taxes on Income'' issued by the Institute of Chartered Accountants of India, is made.

6 LEASE

The Company has taken various construction equipements under non cancelable operating leases. The future minimum lease payament in respect of these as at March 31, 2013 are as follows:

The operating lease arrangement, are renewable on a periodic basis and it provides for an option to the Company to renew the lease at the end of the non cancellable period. There is no exceptional / restrictive covenants under the lease arrangment.

7 RELATED PARTY DISCLOSURE

Related party disclosures, as required by Accounting Standard 18, ''Related Party Disclosures'', are given below: A. Name of Related Parties and nature of relationship :- Direct Subsidiaries

1 Patel Realty (India) Ltd

2 Patel Energy Resources Ltd

3 Michigan Engineers Pvt. Ltd

4 Pan Realtors Pvt. Ltd

5 Energy Design Pvt. Ltd

6 Patel Lands Ltd

7 Patel Patron Pvt. Ltd

8 Patel Engineers Pvt. Ltd

9 Pandora Infra Pvt. Ltd

10 Shashvat Land Projects Pvt. Ltd

11 Patel Engineering Lanka Pvt. Ltd

12 Shreeanant Construction Pvt. Ltd1

13 Vismaya Constructions Pvt. Ltd

14 Bhooma Realties Pvt. Ltd

15 Friends Niraman Pvt. Ltd

16 Patel Concrete and Quarries Pvt. Ltd

17 ASI Constructors Inc

18 Patel Engineering Infrastructure Ltd

19 Patel Engineering (Mauritius) Ltd

20 Patel Engineering (Singapore) Pte. Ltd

21 Patel Engineering Inc

22 Zeus Minerals Trading Pvt. Ltd

(earlier known as Zeus Land Projects Pvt. Ltd)

"ceases to be subsidiary w.e.f March 12, 2013 Subsidiaries of Patel Realty (India) Limited

1 Bellona Estate Developers Pvt. Ltd

2 Hebe Infracon Pvt. Ltd

3 Hera Realcon Pvt. Ltd

4 Lucina Realtors Pvt. Ltd

5 Apollo Buildwell Pvt. Ltd

6 Arsen Infra Pvt. Ltd

7 Praval Developers Pvt. Ltd

8 Nirman Constructions Pvt. Ltd

9 Azra Land Projects Pvt. Ltd

10 Waterfront Developers Ltd

11 Les Salines Development Ltd

12 La Bourade Development Ltd

13 Ville Magnifique Development Ltd

14 Sur La Plage Development Ltd

15 Capacit''e Infraprojects Pvt. Ltd.

16 Capacit''e Engineering Pvt. Ltd.

17 Nirmal Capacite Construction Pvt. Ltd.

Subsidiaries of Patel Engineers Private Limited

1 Phedra Projects Pvt. Ltd

Subsidiaries of Patel Energy Resources Limited

1 Patel Hydro Power Pvt. Ltd

2 PEL Power Ltd

3 Patel Energy Assignment Pvt. Ltd

4 Patel Energy Projects Pvt. Ltd

5 Patel Energy Operations Pvt. Ltd

6 Patel Thermal Energy Pvt. Ltd

7 Dirang Energy Pvt. Ltd

8 West Kameng Energy Pvt. Ltd

9 Digin Hydro Power Pvt. Ltd

10 PEL Port Private Ltd

11 Patel Energy Ltd

12 Laksha Infra Projects Pvt. Ltd

13 Jayshe Gas Power Pvt. Ltd

14 Patel Energy Trading Pvt. Ltd.(upto 28 Mar. ''13)

15 Naulo Nepal Hydro Electric Pvt. Ltd

16 Meyong Hydro Power Pvt. Ltd

17 Saskang Rong Energy Pvt. Ltd

Subsidiaries of ASI Constructors Inc

1 ASI Constructors Australia Pty Ltd

2 Engineering & Construction Innovations Inc.

3 HCP Constructors Inc.

Subsidiaries of Patel Engineering (Singapore) Pte Ltd

1 Patel Surya (Singapore) Pte. Ltd

2 PT PEL Minerals Resources

3 Patel Param Minerals Pte Ltd

4 PT Patel Surya Minerals,Pte,Ltd

5 PT Surya Geo Minerals

6 PT Surpat Geo Minerals

7 Patel Param Energy Pte Ltd

8 PT Patel Surya Jaya

9 Patel Param Natural Resources Pte Ltd

10 Mineral Resources Holding Ltd

11 PT Patel Engineering Indonesia, Pte ltd

Subsidiaries of Patel Engineering Inc

1 ASI RCC Inc

2 ASI RCC India Ltd

3 Westcon Microtunelling Inc

Subsidiaries of Patel Engineering (Mauritius) Ltd

1 Patel Mining (Mauritius) Ltd

2 Enrich Mining Vision Lda

3 Patel Mining Privledge, Lda

4 Patel Infrastructure, Lda

5 Trend Mining Projects, Lda

6 Accord Mines Venture, Lda

7 Netcore Mining Operations, Lda

8 Metalline Mine Works, Lda

9 Patel Mining Assignments, Lda

10 Chivarro Mines Mozambique, Lda

11 Fortune Mines Concession, Lda

12 Omini Mines Enterprises, Lda

13 Quest Mining Activities, Lda

Associates:

1 En pro Ltd

2 Patel KNR Infrastructure Ltd

3 ACP Tollways Pvt. Ltd.

4 Patel KNR Heavy Infrastructure Ltd

5 Raichur Sholapur Transmission Company Ltd

6 Terra Land Developers Ltd.

Joint Ventures: Refer Note (36)

Partnership

1. AHCLPEL

2. Patel Advance JV

Others

1 Patel Corporation LLP

2 Praham India LLP

Key Management Personnel (KMP)

Mr. Pravin A Patel Non-Executive Chairman

Mr. Rupen Patel Managing Director

Ms. Silloo Patel Whole Time Director

Mr. Nimish Patel Whole Time Director

Ms. Sonal Patel

Mr. Shiraz Patel J Relatives of KMP

Mr. Bhim Batra J

8 The Company has main reportable business segment namely "Civil Construction ".

9 Income consisting of Construction income of

Rs. 3.43 million (P.Y. Rs. 153.69 million) and Other Income ofRs. 14.10 million (P.Y. Rs. 65.92 million) and Expenses consisting of Piece Rate Expenses Rs. Nil (P.Y. Rs. 72.36 million) and Other Expenses Rs. 49.47 million (P.Y. Rs. 8.83 million) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

10 In accordance with "The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011, the Company has carried over exchange (gain)/loss of Rs. 2.95 million (P.Y. Rs. 5.90 million) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2020. Further exchange loss (net) of Rs. 1.69 million (P.Y. Rs. 1.59 million) has been added to the cost of the respective fixed asset.

11 Debit and Credit Balances are subject to confirmation from creditors, debtors and sub contractors. The management does not expect any material difference affecting the financial statements for the year.

12 Additional information pursuant to the provision of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, (wherever applicable).

13 Disclosure required in accordance with Accounting Standard - 7 (Revised). In respect of contracts entered into on or after April 1, 2003, contract revenue recognized as construction Rs. 26,426.36 million contract costs incurred and recognized profit (less recognized losses) Rs. 128,168.20 million advance received Rs. 1,449.79 million retention deposit Rs. 1,040.23 million and gross amount due from clients for contract works included under current assets Rs. 11,112.02 million.

14 a) Unbilled Work in Progress includes stock of

land under development (including held in the name of directors/relatives of directors/ employees, as nominees of the Company)

b) Turnover includes, construction of multi purpose projects, water supply projects,Irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights (net of rebate). It also includes duty drawback and entitlement etc but excludes VAT, Service Tax etc.

c) During the Financial year 2010-11, two of Company''s hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors / vendors for further submission to the government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2013 Rs. 1,865.38 million (P.Y. Rs. 1,965.63 million) (including hedging cost of Rs. 458.71 million (P.Y. Rs. 458.71 million)) are considered recoverable and billable to the client and hence included under Work-in- Progress.

d) Arbitration awards received in favour of the Company amounting to Rs. 778.52 million (P.Y. Rs. 2514.76 million) is accounted for as Construction Receipts.

15 The Company and Patel Realty (India) Ltd. (PRIL), a subsidiary, have entered into definitive agreements with a foreign investor and the promoters of the Company for investment in shares of PRIL. The investments are subject to certain conditions precedent and required consents to be complied by the promoters and PRIL. The promoters have fulfilled their obligation. Presently, the foreign investor is expected to invest Rs. 800 million including Rs. 300 million in the Company as initial advance towards purchase 30 million shares of PRIL. The remaining consideration by the foreign investor will be based on the future performance of PRIL.

16 During the current year, Company has changed the method of valuation of Stores, embedded goods and spares parts using weighted average method from erstwhile FIFO method. Due to this changes, consumption of stores and spares is lower by

Rs. 8.13 million and the profit for the current year and closing value of Stores and Spares inventory is higher by Rs. 8.13 million.

17 CONTINGENT LIABILITIES

(a) Commitment for capital expenditure is Rs. 442.06 million (P.Y. Rs. 54.81 million), advance paid Rs. 17.59 million (P.Y. Rs. 12.59 million)

(b) Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is

Rs. 7,502.76 million (P.Y. Rs. 7,722.54 million) (including Customs Rs. 285.75 million (P.Y. Rs. 286.02 million) for the current year includes guarantees given in US$ 10.00 million (P.Y. US$ 12 million) . Corporate guarantees on behalf of subsidiaries and others is Rs. 10,397.29 million (P.Y. Rs. 9,552,09 million) (against which the Company has obtained counter indemnities for Rs. 3,002.69 million (P.Y. Rs. Nil) and towards Custom Duty Rs. 71.62 million (P.Y. Rs. 71.62 million).

(c) The Company has received an amount of Rs. 12.74 million in 1997 against arbitration award in its favor. The client has preferred an appeal against above award claiming an amount ofRs. 213.32 (Rs. 213.32 million) before the Hon''ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Outstanding Letter of Credit amounts to Rs. 1029.08 million (P.Y. Rs. 251.11 million)

(e) Sales tax Rs. 33.51 million (P.Y. Rs. 33.51 million (Advance paid Rs. 18.51 million (P.Y. Rs. 18.51 million)). Cess Rs. 7.46 million (P.Y. Rs. 7.46 million).

(f) Trade Receivables/ Client Retention to the extent of Rs. 475.00 million (P.Y. Rs. 1,568.39 million) have been discounted with bank on Recourse Basis.

(g) Allowances due to employees in remote areas (Arunachal Pradesh) may accrue in future maximum to the extent of Rs. 2.30 million

(Rs. 2.66 million). The same will be paid to the employees who continue to be on the payrolls upto October 1, 2013.

(h) Provident Fund liablity that may arise on matter in appeal Rs. 9.52 million (P.Y. Rs. 9.52 million) and advance Paid Rs. 2.38 million (P.Y. Nil)

18 Previous year''s figures have been regrouped, rearranged and reclassified wherever necessary.

---

Mar 31, 2012

1 BASIS OF PREPARATION

The financial statements are prepared under historical cost convention, on accrual basis of accounting, to comply in all material aspects with all the applicable Accounting Principles in India, the applicable Accounting Standards notified u/s 211(3C) of the Companies Act, 1956 and the relevant provisions of the Companies Act, 1956.

The Revised Schedule VI notified under the Companies Act, 1956, for preparation and presentation of financial statements has become applicable to the Company effective from April 1, 2011. The adoption of revised Schedule VI does not impact recognition and measurement principles, however, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable for the current year.

1 Debentures

a) 9.8% Secured Redeemable Non Convertible Debentures was allotted on July 20, 2009 for a period of 7 year These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 950 mn and are to be redeemed on July 20, 2016 in a single installment, with a put / call option available and exercisable at par at the end of 5th year from the date of allotment i.e. July 20, 2014. The same is secured against immovable property and third party security.

b) 10.75% Secured Redeemable Non Convertible Debentures was allotted on March 3, 2011 for a period of 3 year These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 500.00 mn. These Debentures will be redeemed as follows- March 3, 2016 - Rs. 200 mn, March 3, 2015-Rs. 150 mn and March 3, 2014-Rs. 150 mn. The same is secured against immovable property and subservient charge on asset.

c) 9.55% Secured Redeemable Non Convertible Debentures was allotted on April 26, 2010 for a period of 3 year These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 1,000.00 mn. These Debentures will be redeemed as follows -April 26, 2015 - Rs. 400 mn, April 26, 2014- Rs. 300 mn, and April 26, 2013- Rs. 300 mn. The same is secured against immovable property and subsiervient charge on assets.

d) 9.5% Secured Redeemable Non Convertible Debentures was allotted on June 01, 2009 for a period of 3 year These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 1,050.0 mn and are to be redeemed on June 1, 2012. The same is secured against immovable property and third party security.

e) 11.40% Secured Redeemable Non Convertible Debentures was allotted on July 7, 2011 for a period of 5 year These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 1,500.0 mn and are to be redeemed in three installments of 30 : 30 : 40 every year starting from July 11, 2014. The same is secured against charge on movable and immovable asset of the company.

The above debentures are listed on The National Stock Exchange of India.

As per Section 117C of the Companies Act, 1956 the Company has created adequate Debenture Redemption Reserve for both the above series of Secured Redeemable Non Convertible Debenture issued during the year.

2 Term Loan Banks

The Term loans are secured by first charge on the specific assets acquired out of the term loan alongwith unencumbered assets & guarantees. The rate of Interest for these loans vary between 10%-14% on an average, with a repayment period of 3-5 years respectively.

3 From Others

Includes funds from Financial Institutions on Equipments, secured against the said Equipments. These loans carry an interest rate of average between 10%-12% with a repayment period of 3-5 years respectively.

4 Unsecured Loans -From Bank

Includes Loans repayable over a period of 2-3 years carrying an Interest rate of 10%

* includes Provision for Tax which is Net of Advance Tax and TDS - Rs. Nil (P.Y. Rs. 416.54 mn). Balance pertains to Proposed Dividend Rs. 20.95mn (P.Y. Rs. 69.83 mn) and Corporate Dividend Tax - Rs. 3.40mn (P.Y. Rs. 11.33 mn)

1 Short term loan - From Bank

Includes Loans against Equipments financed and by earmarking from Bank Guarantee limits, at an average Interest rate ranging between 9.50%-10.50% p.a. payable within a year.

2 commercial Paper- From Others

Includes Commercial Paper of Rs. Nil (P.Y.r Rs. 495.48 mn from LIC Mutual Fund which carries interest @ 6.50% p.a., with a 364 days maturity payable on May 25, 2011). The Loan was secured against immovable properties

3 loans Repayable on Demand

"Cash Credit and Working Capital Demand Loan from various Banks. These loans have been given against hypothecation of stocks, spare parts,book debts,work in progress & guarantees; Terms of Repayment : Cash Credit- Yearly Renewal, except for Cash Credit taken from IDBI Bank Short Term Loan - EARMARK CC" which is payable within 90 days. Rate of Interest-ranges between 9.75% to 13.75% p.a."

4 Unsecured loan - From Bank

Includes Loans which are payable at yearly rests with an average Interest cost ranging between 8.50%- 10.25% p.a.

5 commercial Paper

a) Includes Commercial Papers from Banks with a maturity period of 364 days with an average Interest rate ranging between 7.60% and 10.15 % p.a.

b) Includes Commercial Paper from various Financial Institutions with a maturity period of 364 days with an average interest rate between 7.60% and 10.15 % p.a.

c) Maximum amount outstanding for Commercial papers during the year was Rs. 2,957.20 mn.

1 trade Payable

a) On the basis of information compiled to the extent that they could be identified as Small Scale and Ancillary Industrial Undertaking, the Company has no such amounts payable in excess of Rs. 0.10 mn and outstanding for a period of more than 30 days.

b) The Company has no amounts due to suppliers under the Micro Small and Medium Enterprise Development Act, 2006, as at March 31, 2012.

Note: The above information has been determined to the extent such parties had been identified on the basis of information available with the Company.

2 Other liabilities

Includes Rs. 87.13 mn (P.Y. Rs. 11.83 mn ) against lease of office premises.

I Aggregated amount of Quoted Investments as at March 31, 2012 Rs. 340.10 mn, Market value 238.87 mn (P.Y. Rs. 340.10 mn, Market Value- Rs. 227.41 mn)

II Aggregated amount of Unquoted Investments as at March 31, 2012 Rs. 5,198.54 mn (P.Y. Rs. 4460.38 mn)

III Includes Investment in National Saving Certificates, in the name of Directors , lodged with Project Authorities.

IV. The Company had entered into a partnership with ACE Housing and Construction Ltd in name of M/s AHCL - PEL for development and construction of residential buildings. The Company's Share of Profit and loss is 55%. Both the partners has eqully contributed Rs. 0.025 mn towards the Captial.

# Pending for transfer

1 Advances Recoverable in Cash or in kind or for value to be received.

a) includes Rs. 13.84 mn (P.Y. Rs. 7.67 mn) due from officers of the Company and Rs. 264.95 mn (P.Y. Rs. 169.24 mn) due from company in which Directors are Director

b) includes secured advance to piece workers Rs. 26.774 mn (P.Y. Rs. 10.32 mn)

1 Land includes ? 15.68 (P.Y. ? 19.45 mn) held in the name of Directors,relatives of Directors and employees for and on behalf of the Company

2 a) Building includes Building [ Gross Block 228.77 mn (P.Y. ? 223.94 mn),Accumulated Depreciation ? 26.66 (P.Y. ? 25.21 mn)] and Factory Building [ Gross Block 142.13 (P.Y. ? 142.13 mn), Accumulated Depreciation ? 18.69 (P.Y. ? 13.62 mn)]

b) Includes ? 0.02 (P.Y. ? 0.02 mn) being the value of 30 shares and share deposits in Co - operative Societies.

1 Includes Miscellaneous expenses which includes Other Repairs- Rs. 27.34 mn (P.Y. Rs. 57.92 mn), Tender fees, office and General Charges, Entertainment and rebate to clients, and Donation to CPI (M) is Rs. 0.65 mn (P.Y. Rs. 0.20 mn).

1 employee Benefits

I Brief description of the Plans

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income Tax authorities and administered through appropriate authorities/ insurers. The Company's defined contribution plans are provident fund, employee state insurance and employees' pension scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company's defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company's policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, any shortfall in the interest income over the interest obligation is recognised immediately in the statement of profit & loss as acturial loss. Any loss/gain arising out of the investment with the plan is also recognised as expense or income in the period in which such loss/gain occurs.

2 (i) Income-tax assessments are completed up to A.Y. 2007-2008. Several appeals for the earlier assessment years are pending before the Appellate Authorities. The aggregate demand for the same amounting to Rs. 692.49 mn has been already adjusted / paid. The Company has made a provision for tax of Rs. 320.00 mn (P.Y. Rs. 363.50 mn), and Deferred Tax Liability of Rs. 31.31 mn (P.Y. reversed 30.46 mn). The Company has been advised that it is not liable to Wealth-Tax except on Motor Car Accordingly, Wealth Tax of Rs. 1.50 mn (P.Y. Rs. 1.50 mn) has been provided.

(ii) During the previous year ended March 31, 2011, out of prudence the company has made a provision for Rs. 450 mn, on account of the liability that may arise under the proceedings under Section 132 of the Income Tax Act, 1961 out of the Surplus in Profit & Loss Account.

(iii) The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available. The impact of Rs. 1,485.11 mn upto March 31, 2009 due to the above amendment, though being subjudice, has been provided and adjusted out of the Surplus in Profit and Loss Account. The Company has legally contested the validity of the above amendment and intention of the said section. Further, the company has filed a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted.

3 DEFFERED Tax

The Company is entitled to deductions under the Income Tax Act, which are in nature of permanent benefits. However, deferred tax adjustments on account of timing differences as described in Accounting Standard - 22 'Accounting for Taxes on Income' issued by the Institute of Chartered Accountants of India, is made.

4 The Company has main reportable business segment namely "Civil Construction

5 Income consisting of Construction income of Rs. 153.69 mn (P.Y. Rs. 35.66 mn) and other income of Rs. 65.92 mn (P.Y. Rs. Nil) and Expenses consisting of Piece Rate Expenses Rs. 72.36 mn (P.Y. Rs. 24.93 mn) and other expenses Rs. 8.83 mn (P.Y. Rs. 7.19 mn) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

6 The Company has some contract revenues receivable in foreign currency. To reduce various financial risks the Company has entered into hedging transactions. Due to delay in payments, changes in drawings, changes in design all on account of the client, the hedging position got exposed incurring loss on such transactions. The said hedging loss of Rs. Nil (P.Y. Rs. 493.04 mn) has been debited to profit and loss account as interest expense, as a prudent and conservative accounting policy. The aforementioned is claimable from the clients and are carried in work - in - progress.

7 In accordance with "The Companies (Accounting Standards) Amendment Rules, 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011, the Company has carried over exchange (gain)/loss of Rs. 5.90 mn (P.Y. Rs. 8.50 mn) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2012. Further exchange loss (net) of Rs. 1.59 mn (P.Y. Rs. Nil) has been added to the cost of the respective fixed asset.

8 Debit and Credit Balances are subject to confirmation from creditors, debtors and sub contractors. The management does not expect any material difference affecting the financial statements for the year.

9 Additional information pursuant to the provision of paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, (wherever applicable).

10 Disclosure required in accordance with Accounting Standard - 7 (Revised). In respect of contracts entered into on or after April 1, 2003, contract revenue recognized as construction Rs. 19,638.22 mn contract costs incurred and recognized profit (less recognized losses) Rs. 102,053.87 mn advance received Rs. 431.78 mn retention deposit Rs. 1297.69 mn and gross amount due from clients for contract works included under current assets Rs. 8,980 mn.

11 a) Unbilled Work in Progress includes stock of land under development (including held in the name of directors relatives of directors/employees, as nominees of the company).

b) Turnover includes, construction of multi purpose projects, water supply projects,Irrigation projects, building projects, road and railway projects, on item rate or EPC basis and sale of development rights. It also includes duty drawback and entitlement etc but excludes VAT, Service Tax etc.

c) During the Financial year 2010-11, two of Company's hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors / vendors for further submission to the government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2012 Rs. 1,965.63 mn (P.Y. Rs. 1,892.22 mn) are considered recoverable and billable to the client and hence included under work in progress.

d) Arbitration awards received in favour of the Company amounting to Rs. 2,514.76 mn (P.Y. Rs. 2,330.36 mn) hitherto shown as Working-in-progress is now accounted for as Construction Receipts.

12 contingent Liabilities

(a) Commitment for capital expenditure is Rs. 54.81 mn (P.Y. Rs. 480.89 mn) , advance paid Rs. 12.59 mn (P.Y. Rs. 15.74 mn)

(b) Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs. 5,187.62 mn (P.Y. Rs. 6,420.35 mn) (including Customs Rs. 204.52 mn (P.Y. Rs. 347.57 mn) for the current year includes guarantees given in US$ 12mn (P.Y. US$ 7.50 mn). Corporate guarantees on behalf of subsidiaries and others is Rs. 9,552.09 mn (P.Y. Rs. 8,079.52 mn) (against which the Company has obtained counter indemnities for Rs. Nil (P.Y. Rs. 105.00 mn) and towards Custom Duty Rs. 71.62 mn (P.Y. Rs. 71.62 mn).

(c) The Company has received an amount of Rs. 12.74 mn in 1997 against arbitration award in its favour. The client has preferred an appeal against above award claiming an amount of Rs. 213.32 mn (P.Y. Rs. 213.32 mn) before the Hon'ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Outstanding Letter of Credit amounts to Rs. 251.11 mn (P.Y. Rs. 50.25 mn)

(e) Sales tax Rs. 37.26 mn (P.Y. Rs. 33.51 mn (Advance paid Rs. 18.52 mn (P.Y. Rs. 18.52 mn). Cess Rs. 7.46 mn (P.Y. Rs. 7.46 mn).

(f) Custom liability that may arise on matter in appeal Rs. 7.61 mn (P.Y Rs. 7.61 mn).

(g) Trade Receivables to the extent of Rs. 1,568.39 mn (P.Y. Rs. 1,565.90 mn) have been discounted with Bank on Recourse Basis.

(h) Allowances due to employees in remote areas (Arunachal Pradesh) may accrue in future maximum to the extent of Rs. 2.66 mn (P.Y. Rs. 1.86 mn). The same will be paid to the employees who continue to be on the payrolls upto October 1, 2012.

(i) Provident Fund liablity that may arise on matter in appeal Rs. 9.2 mn ( P.Y. Rs. Nil)

13 Previous year's figures have been regrouped, rearranged and reclassified wherever necessary.

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Mar 31, 2011

1. Contingent Liabilities:

a. Commitment for capital expenditure is Rs 480.89 mn (P.Y. Rs 320.74 mn), advance paid Rs 15.74 mn (P.Y. Rs8.95 mn).

b. Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business is Rs 6,420.35 mn (P.Y. Rs 3,875.15 mn) (including Customs Rs 347.57 mn (P.Y. Rs 248.71 mn) for the current year includes guarantees given in USD 7.50 mn (P.Y. US$ 7.50 mn). Corporate guarantees on behalf of subsidiaries and others is Rs 8,079.52 mn (P.Y. Rs 7,799.52 mn) (against which the Company has obtained counter guarantee forRs 105.00 mn (P.Y. 1,760 mn)) and towards Custom DutyRs 71.62 mn (P.Y. Rs 71.62 mn).

c. The Company has received an amount of Rs 12.74 mn in 1997 against arbitration award in its favor. The client has preferred an appeal against above award claiming an amount ofRs 213.32 mn (P.Y. Rs 213.32 mn) before the Hon'ble appeal court. However the management feels that the likelihood of outflow of resources is remote.

d. Outstanding Letter of Credit amounts to Rs 50.25 mn (P.Y. Rs 189.94 mn).

e. Sales tax Rs 33.51 mn (P.Y. Rs 20.18 mn) (Advance paid Rs 18.52 mn (P.Y. Rs 10.51 mn)). Cess Rs 7.46 mn (P.Y. Rs 16.17 mn).

f. Custom liability that may arise on matter in appeal Rs 7.61 mn (P.Y. Rs 7.61 mn).

g. Client withheld to the extent of Rs 1,565.90 mn (P.Y. Rs Nil) have been discounted with Bank on Recourse Basis.

h. Allowances due to employees in remote areas (Arunachal Pradesh) may accrue in future maximum to the extent of Rs 1.86 mn (P.Y. Rs Nil). The same will be paid to the employees who continue to be on the payrolls upto October 1, 2011.

2. i. Turnover includes, construction of multi purpose projects, water supply projects, Irrigation projects, building projects, road and railway projects, on item rate and EPC basis. It also includes duty drawback and entitlement etc but excludes vat, service tax etc.

ii. Stores, embedded goods and Spares etc., consumed include materials issued to Sub Contractors.

iii. Auditors Remuneration comprises of Statutory Audit Fees (including Consolidation) Rs 3.27 mn (P.Y. Rs 3.27 mn); Tax Audit Fees Rs 0.87 mn (P.Y. Rs 0.88 mn); Taxation Matters Rs 3.39 mn (P.Y. Rs 1.65 mn); Other Capacity Rs 1.10 mn (P.Y. Rs 1.10 mn); Certification Rs 1.10 mn (P.Y. Rs 1.10 mn) and out of pocket expenses Rs 0.12 mn (P.Y. Rs 0.06 mn).

iv. Miscellaneous expenses includes Other Repairs Rs 57.92 mn (P.Y. Rs 46.96 mn), Tender fees, office and General Charges, Entertainment and rebate to clients, Bank charges and Bank Guarantee Charges (Net) etc., Donation of Rs Nil (P.Y. 2.50 mn) to trusts in which Director is trustee and Donation to CPI (M) is Rs 0.20 mn (P.Y.Nil) and to BJP Rs Nil (P.Y. Rs 0.25 mn).

v. Stores, embedded goods and Spare Parts include Rs 67.87 mn (P.Y. Rs 17.14 mn) in transit.

vi. Maximum Balance held in current account with non-scheduled banks viz. 1. Key Bank (USA) Rs 15.73 mn (P.Y. Rs 15.50 mn) 2. Barclays Bank (Mauritius) Rs 159.45 mn (P.Y. Rs 121.10 mn) 3. Balances with Scheduled banks in current account include Rs 31.76 mn in transit/in hand (P.Y. Rs 48.16 mn). Balances with Scheduled Banks in Fixed Deposits Account include Rs 14.53 mn, lying with various government authorities/banks (P.Y. Rs 16.65 mn).

vii. Advances Recoverable in Cash or in kind or for value to be received includes Rs 7.67 mn (P.Y. Rs 25.75 mn) due from officers of the Company. Maximum amount due during the yearRs 26.65 mn (P.Y. Rs 33.88 mn). Also includes secured advance to piece workers Rs 10.32 mn (P.Y. Rs 10.34 mn).

viii. Sundry Creditors includes Rs Nil book over draft in current account with bank (P.Y. Rs 4.08 mn), Includes Rs 11.83 mn against lease of office premises (P.Y. Rs 125.08 mn).

3. i. Income-tax assessments are completed up to A.Y. 2007-2008. Several appeals for the earlier assessment years are pending before the Appellate Authorities. The aggregate demand for the same amounting to Rs 692.49 mn has been already adjusted/paid.

The Company has made a provision for tax ofRs 363.50 mn (P.Y. Rs 740.00 mn), and reversed Deferred Tax Liability ofRs 30.46 mn (P.Y. reversed Rs 31.40 mn). The Company has been advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly, Wealth Tax of Rs 1.50 mn (P.Y. Rs 1.20 mn) has been provided.

ii. Out of prudence, the company has made a provision for Rs 450 mn, on account of the liability that may arise under the proceedings under section 132 of the Income Tax Act, 1961 out of the Surplus in Profit & Loss Account.

iii. The Finance Act, 2009 has amended Section 80IA (4) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available.

The impact ofRs 1,485.11 mn upto March 31, 2009 due to the above amendment, though being subjudice, has been provided and adjusted out of the Surplus in Profit and Loss Account. The Company has legally contested the validity of the above amendment and intention of the said section.

Further, the company has filed a writ petition with High Court of Mumbai for challenging constitutional validity for insertion of explanation with retrospective effect and writ has been admitted.

iv. The Company is entitled to deductions under the Income Tax Act, which are in nature of permanent

benefits. However, deferred tax adjustments on account of timing differences as described in Accounting Standard - 22 'Accounting for Taxes on Income' issued by the Institute of Chartered Accountants of India, is made.

4. Income consisting of Construction income of Rs 35.66 mn (P.Y. Rs Nil) and other income of Rs Nil (P.Y. Rs 3.40 mn) and Expenses consisting of Piece Rate Expenses Rs 24.93 mn (P.Y. Rs 24.12 mn) and other expenses Rs 7.19 mn (P.Y. Rs 12.68 mn) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

5. The Company has some contract revenues receivable in foreign currency. To reduce various financial risks the Company has entered into hedging transactions. Due to delay in payments, changes in drawings, changes in design all on account of the client, the hedging position got exposed incurring loss on such transactions. The said hedging loss ofRs 493.04 mn (P.Y. Rs 258.37 mn) has been debited to profit and loss account as interest expense, as a prudent and conservative accounting policy. The aforementioned is claimable from the clients and are carried in work-in-progress.

6. In accordance with "The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009 and further amended on May 13, 2011, the Company has carried over exchange (gain)/loss of Rs 8.50 mn (P.Y. Rs 30.55 mn) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2012. Further exchange loss (net) ofRs Nil (P.Y.

Rs 16.34 mn) has been added to the cost of the respective fixed asset.

7. Unbilled Work in Progress includes stock of land under development (including held in the name of directors/ relatives of directors/employees, as nominees of the company).

8. In accordance with AS 16 - "Borrowing Costs", Rs 197.08 mn (P.Y. Rs 202.02 mn) interest has been capitalized on project development cost incurred.

9. Debit and Credit Balances are subject to confirmation from creditors, debtors and sub contractors.

14. Disclosure required in accordance with Accounting Standard - 7 (Revised). In respect of contracts entered into on or after 1st April 2003, contract revenue recognized as construction Rs 22,089.94 mn contract costs incurred and recognized profit (less recognized losses) Rs 82,293.59 mn advance received Rs 428.52 mn retention deposit Rs 965.21 mn and gross amount due from clients for contract works included under current assets Rs 10,329.66 mn.

15. During the year, two of Company's hydropower projects in Loharinagpala, in the state of Uttarakhand, awarded by NTPC, were prematurely terminated by Government of India. NTPC has sought details of expenditure incurred, committed costs, anticipated expenditure on safety and stabilization measures, other recurring site expenses and interest costs, as well as other claims of various packages of contractors/ vendors for further submission to the government after compiling all the details of expenses incurred by various contractors working for the project. Management expects that all these cost as well as claims will be recovered in full and hence the cost incurred on the project up to March 31, 2011 are considered recoverable and billable to the client and hence included under work in progress.

Arbitration award in case of four projects amounting to Rs 2,330.36 mn (P.Y. Rs 2,296.91 mn) represented as work in progress will be accounted for as contruction receipts as and when received.

16. The Company has following outstanding Debentures as on March 31, 2011:

a. 9.5% Secured Redeemable Non Convertible Debentures was allotted on June 01, 2009 for a period of 3 years. These debentures have a face value ofRs 1.0 mn each aggregating to Rs 1,050.0 mn and are to be redeemed on June 1, 2012.

b. 9.8% Secured Redeemable Non Convertible Debentures was allotted on July 20, 2009 for a period of 7 years. These debentures have a face value ofRs 1.0 mn each and are to be redeemed on July 20, 2016 in a single installment, with a put/call option available and exercisable at par at the end of 5th year from the date of allotment i.e. July 20, 2014.

c. 9.55% Secured Redeemable Non Convertible Debentures was allotted on April 26, 2010 for a period of 3 years. These debentures have a face value ofRs 1.0 mn each aggregating to Rs 1,000.00 mn. Out of which Rs 300 mn, Rs 300 mn and Rs 400 mn are to be redeemed on April 26, 2013, April 26, 2014 and April 26, 2015 respectively.

d. 10.75% Secured Redeemable Non Convertible Debentures was allotted on March 3, 2011 for a period of 3 years. These debentures have a face value of Rs 1.0 mn each aggregating to Rs 500.00 mn Out of which Rs 150 mn, Rs 150 mn and Rs 200 mn are to be redeemed on March 3, 2014, March 3, 2015 and March 3, 2016 respectively.

18. Employee Benefits:

I. Brief description of the Plans:

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Company's defined contribution plans are provident fund, employee state insurance and employees' pension scheme (under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions. The Company's defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Company's policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, for which shortfall has been provided for as at the Balance Sheet date.

19. On the basis of information compiled to the extent that they could be identified as Small Scale and Ancillary Industrial Undertaking, the Company has no such amounts payable in excess of Rs 0.10 mn and outstanding for a period of more than 30 days.

20. The Company has no amounts due to suppliers under the Micro Small and Medium Enterprise Development Act, 2006, as at March 31, 2011.

Note: The above information has been determined to the extent such parties had been identified on the basis of information available with the Company.

21. The Company has main reportable business segment namely "Civil Construction".

---

Mar 31, 2010

1. Contingent Liabilities

(a) Commitment for capital expenditure is Rs. 320.74 mn (P.Y. Rs. 181.68 mn), advance paid Rs. 8.95 mn (P.Y. Rs. 16.14 mn).

(b) Counter indemnities given to Banks and others in respect of secured guarantees, etc. on behalf of subsidiaries and others given by them in respect of contractual commitments in the ordinary course of business Rs. 3,875.15 mn (P.Y. Rs. 2,655.25 mn) (including Customs Rs. 248.71 mn (P.Y. Rs. 248.71 mn) for the current year includes guarantees given in USD 7.50 mn (P.Y. USD 18.85 mn). Corporate guarantees for third parties Rs. 7,799.52 mn (P.Y. Rs. 6,494.73 mn) (against which the Company has obtained counter guarantee for Rs. 1,760 mn (P.Y. 1,760 mn)) and towards Custom Duty Rs. 71.62 mn (P.Y. Rs. 71.62 mn).

(c) The Company has received an amount of Rs. 12.74 mn in 1997 against arbitration award in its favor. The client has preferred an appeal against above award claiming an amount of Rs. 213.32 mn (P.Y. Rs. 213.32 mn) before the Honorable appeal court. However the management feels that the likelihood of outflow of resources is remote.

(d) Outstanding Letter of Credit amounts to Rs. 189.94 mn (P.Y. Rs. 61.07 mn).

(c) Sales tax Rs. 20.18 mn (P.Y. Rs. 181.97 mn) (Advance paid Rs. 10.51 mn (P.Y. Rs. 90.98 mn)). Cess Rs. 16.17 mn (P.Y Rs. 41.48 mn)

(d) Entry Tax Rs. Nil (P.Y. Rs. 40.11 mn).

(e) Custom liability that may arise on matter in appeal Rs. 7.61 mn (P.Y. Rs. 7.61 mn).

2. (i) Turnover includes construction of multi purpose projects, water supply projects, irrigation projects, building projects construction, road and railway projects on item rate and EPC basis, duty drawback and entitlement etc. and excludes vat, service tax etc.

(ii) Stores, embedded goods and spares etc., consumed includes materials issued to sub contractors.

(iii) Auditors Remuneration comprises of

Statutory Audit Fees Rs. 3.27 mn (P.Y. Rs. 2.76 mn); Tax Audit Fees Rs. 0.88 mn (P.Y. Rs. 0.77 mn ); Taxation Matters Rs. 1.65 mn (P.Y. Rs. 1.44 mn); Other Capacity Rs. 1.10 mn (P.Y. Rs. 1.10 mn); Certification Rs. 1.10 mn (P.Y. Rs. 1.10 mn) and out of pocket expenses Rs. 0.06 mn (P.Y. Rs. 0.16 mn).

(iv) Miscellaneous expenses includes Other Repairs Rs. 46.96 mn (P.Y Rs. 41.08 mn), Tender fees, office and General Charges, Entertainment and rebate to clients, Bank charges and Bank Guarantee Charges (Net) etc., Donation of Rs. 2.50 mn (P.Y. 12.30 mn) to trusts in which the director is trustee, Donation to CPI (M) Rs. Nil (P.Y. Rs. 0.50 mn) and to BJP Rs. 0.25 mn (P.Y Rs. 0.20 mn).

(v) Stores, embedded goods and Spare Parts include Rs. 17.14 mn (P.Y. Rs. 9.23 mn) in transit.

(vi) Maximum Balance held in current account with non-scheduled banks viz.

1. Thane District Co. Op. Bank Ltd. Rs. Nil (P.Y Rs. 0.03 mn)

2. Key Bank Rs. 15.50 mn (P.Y Rs. 3.16 mn)

3. Barclays Bank Rs. 121.10 mn (P.Y. Rs. 74.08 mn)

Balances with Scheduled banks in current account include Rs. 48.16 mn in transit /in hand (P.Y. Rs. 126.35 mn). Balances with Scheduled Banks in Fixed Deposits Account include Rs. 16.65 mn, lying with various government authorities/banks (P.Y. Rs. 1.62 mn).

(vii) Advances Recoverable in Cash or in kind or for value to be received includes Rs. 25.75 mn (P.Y. Rs. 20.98 mn) due from officers of the Company. Maximum amount due during the year Rs. 33.88 mn (P.Y. Rs. 26.35 mn). Also includes secured advance to piece workers Rs. 96.95 mn (P.Y. Rs. 56.22 mn).

(viii) Sundry Creditors includes Rs. 4.08 mn book over draft in current account with bank (P.Y Rs. 7.46 mn), includes Rs. 125.08 mn against lease of office premises (P.Y. Rs. 125.15 mn).

3. (i) Income-tax assessments are completed up to A.Y. 2007-2008. Several appeals for the earlier assessment years are pending before the Appellate Authorities. The aggregate demand for the same amounting to Rs. 524.15 mn has been already adjusted/paid.

The Company has made a provision for tax of Rs. 740.00 mn (P.Y. Rs. 225.00 mn), Fringe Benefit Tax of Rs. Nil (P.Y Rs. 9.00 mn) and reversed excess Deferred Tax Liability of Rs. 31.40 mn (P.Y created Rs. 7.66 mn), short provision of tax of earlier years Rs. Nil (P.Y Rs. 5.18 mn). The Company has been advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly, Wealth Tax of Rs. 1.20 mn (P.Y. Rs. 1.50 mn) has been provided.

(ii) The Finance Act, 2009 has amended Section 80(IA) of the Income Tax Act, 1961 by inserting an explanation to the said section retrospectively from April 1, 2000 purporting to withdraw the benefit hitherto available.

The Company has legally contested the validity of the above amendment and intention of the said section. The impact of Rs. 1,485.11 mn upto March 31, 2009 due to the above amendment, though being subjudice, has been provided and adjusted out of the Surplus in Profit and Loss Account.

(iii)The Company is entitled to deductions under the Income Tax Act, which are in nature of permanent benefits. However, deferred tax adjustments as described in Accounting Standard 22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, is made.

4. Income consisting of Construction income of Rs. Nil (P.Y. Rs. 9.70 mn) and other income of Rs. 3.40 inn and Expenses consisting of P/W wages Rs. 24.12 (P.Y. Rs. 9.49 mn) and other expenses Rs. 12.68 mn (P.Y. Rs. 23.32 mn) pertaining to prior periods credited and debited respectively to Profit and Loss Accounts under various heads of accounts.

5. The Company has some contract revenues receivable in foreign currency. To reduce various financial risks the Company entered into hedging transactions. Due to delay in payments, changes in drawings, changes in design all on account of the client, the hedging position got exposed incurring loss on such transactions. The said hedging loss of Rs. 258.37 mn (P.Y. Rs. 521.23 mn after utilizing Rs. 325.00 mn from contingency reserve) has been debited to profit and loss account as interest expense, as a prudent and conservative accounting policy. The aforementioned is claimable from the client.

6. In accordance with "The Companies (Accounting Standards) Amendment Rules 2009, where in the provisions pertaining to AS-11 relating to "The Effects of the changes in Foreign Exchange Rates", vide notification dated March 31, 2009, the Company has carried over exchange gain/loss of Rs. 30.55 mn (P.Y. Rs. 126.31 mn) through "Foreign Currency Monetary Items Translation Difference Account", to be amortized over the balance period of the long term asset/liability, in respect of which such exchange gain/loss has arisen, but not beyond March 31, 2011. Further exchange loss (net) of Rs. 16.34 mn (P.Y. Rs. 50.53 mn) has been added to the cost of the respective fixed asset.

7. Work in Progress includes stock of land under development.

8. In accordance with AS 16 "Borrowing Costs", Rs. 202.02 mn (P.Y. Rs. 289.40 mn) interest has been capitalized on project development cost incurred.

9. Debit and Credit Balances are subject to confirmation from third parties.

10. From the current year, the Company has discontinued the accounting for the effect of Market Value of materials/resources supplied by its client at fixed cost or no cost to the Company as cost of construction and as construction revenue. This has no impact on the profit of the Company.

11. Disclosure required in accordance with Accounting Standard 7 (Revised). In respect of contracts entered into on or after 1st April 2003, contract revenue recognized as construction Rs. 21,803.04 mn contract costs incurred and recognized profit (less recognized losses) Rs. 61,351.22 mn advance received Rs. 1,520.10 mn retention deposit Rs. 738.82 mn and gross amount due from clients for contract works included under current assets Rs. 7,389.84 mn.

12. During the year, the Company has privately placed:

a) 9.5% Secured Redeemable Non Convertible Debentures was allotted on June 01, 2009 for a period of 3 years. These debentures have a face value of Rs. 1.0 mn each aggregating to Rs. 1,050.0 mn and are to be redeemed on June 1, 2012.

b) 9.8% Secured Redeemable Non Convertible Debentures was allotted on July 20, 2009 for a period of 7 years. These debentures have a face value of Rs. 1.0 mn each and are to be redeemed on July 20, 2016 in a single installment, with a put/call option available and exercisable at par at the end of 5th year from the date of allotment i.e. July 20, 2014.

The above debentures are listed on The National Stock Exchange of India. As per Section 117C of the Companies Act, 1956 the Company has created adequate Debenture Redemption Reserve for both the above series of Secured Redeemable Non Convertible Debenture issued during the year.

13. Related Party Disclosures: Related party disclosures, as required by Accounting Standard 18, Related Party Disclosures, are given below:

A. Name of Related Parties and nature of relationship:

No. Name of the Related Party Direct Subsidiaries

1 Patel Realty(IndiaYLTxL

2 Patel Energy Resources Ltd.

3 Michigan Engineers Pvt. Ltd. 4 ASIInc.

5 Patel Engineering (Singapore) Pte. Ltd.

6 Shreeanant Construction Pvt. Ltd.

7 Pan Realtors Pvt. Ltd.

8 Patel Engineering Inc.

9 Patel Engineering (Mauritius) Ltd.

10 Patel Engineering Infrastructure Pvt. Ltd.

11 Zeus Land Projects Pvt. Ltd.

12 Patel Concrete and Quarries Pvt. Ltd.

13 Friends Nirman Pvt. Ltd.

14 Energy Design Pvt. Ltd.

Subsidiaries of Patel Realty (India) Ltd.

1 Bellona Estate Developers Pvt. Ltd.

2 Hebe Infracon Pvt. Ltd.

3 Hera Realcon Pvt. Ltd.

4 Terminus Realcon Pvt. Ltd.

5 Ares Infradevelopers Pvt. Ltd.

6 Lucina Realtors Pvt. Ltd.

7 Apollo Buildwell Pvt. Ltd.

8 Arsen Infra Pvt. Ltd.

9 Praval Developers Pvt. Ltd.

10 Pandora Infra Pvt. Ltd.

11 Patel Engineers Pvt. Ltd.

12 Phedra Projects Pvt. Ltd.

13 Patel Patron Pvt. Ltd.

14 Vismaya Constructions Pvt. Ltd.

15 Nirman Constructions Pvt. Ltd.

16 Azra Land Projects Pvt. Ltd.

17 Bhooma Realties Pvt. Ltd.

18 Shashvat Land Projects Pvt. Ltd.

19 Waterfront Developers Ltd.

20 Les Salines Development Ltd.

21 La Bourade Development Ltd.

22 Ville Magnifique Development Ltd.

23 Sur La Plage Development Ltd.

Subsidiaries of Patel Energy Resources Limited

1 Dirang Energy Pvt. Ltd.

2 West Kameng Energy Pvt. Ltd.

3 Patel Energy Assignment Pvt. Ltd.

4 Patel Energy Projects Pvt. Ltd.

5 Patel Energy Operations Pvt. Ltd. 6 Patel Energy Works Pvt Ltd.

7 Patel Energy Ventures Pvt. Ltd.

No.; Name of the Related Party

8 Shree Balaji Power Services Pvt. Ltd.9 Naulo Nepal Hydro Electric Pvt. Ltd.

10 PEL Power Ltd.

11 PEL Port Private Ltd.

12 Patel Energy Ltd.

13 Laksha Infra Projects Pvt. Ltd.

Subsidiaries of AS! Inc.

1 ASI Australia Pty. Ltd.

Subsidiaries of Patel Engineering (Singapore) Pte. Ltd.

1 Patel Surya (Singapore) Pte. Ltd.

2 PT PEL Minerals Resources

3 Patel Param Minerals Pte. Ltd.

4 PT Patel Surya Minerals

5 Patel Param Energy Pte. Ltd.

6 PT Patel Surya Jaya

7 Patel Param Natural Resources Pte. Ltd.

Associates

1 Praharn India Pvt. Ltd.

2 Patel Realtors Pvt. Ltd.

3 Enpro Ltd.

4 Patel KNR Infrastructure Ltd.

5 Patel KNR Heavy Infrastructure Pvt. Ltd.

No. Name of the Related Party

Subsidiaries of Patel Engineering Inc.

1 ASI RCC Inc.

2 ASI RCC India Ltd.

3 Westcon Microtunelling Inc.

Subsidiaries of Patel Engineering (Mauritius) Ltd.

1 Pate! Mining (Mauritius) Ltd.

2 Patel Mining Vision, Ida

3 Patel Mining Division, Ida

4 Patel Mining Privilege, Ida

5 Patel Mining Projects, Ida

6 Patel Mining Ventures, Ida

7 Patel Mining Operations, Ida

8 Patel Mining Works, Ida

9 Patel Mining Assignments, Ida

10 Patel Mining Mozambique, Ida

11 Patel Mining Concession, Ida

12 Patel Mining Enterprise, Ida

13 Patel Mining Activities, Ida

18. Employee Benefits:

I. Brief description of the Plans:

The Company provides long-term benefits in the nature of Provident fund and Gratuity to its employees. In case of funded schemes, the funds are recognized by the Income tax authorities and administered through appropriate authorities/insurers. The Companys defined contribution plans are provident fund, employee state insurance and employees pension scheme (under the provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952) since the Company has no further obligation beyond making the contributions.

The Companys defined benefit plans include gratuity benefit to its employees, which is funded through the Life Insurance Corporation of India. The employees of the Company are also entitled to leave encashment and compensated absences as per the Companys policy. The Provident fund scheme additionally requires the Company to guarantee payment of specified interest rates, for which shortfall has been provided for as at the Balance Sheet date.

8. On the basis of information compiled to the extent that they could be identified as Smail Scale and Ancillary Industrial Undertaking, the Company has no such amounts payable in excess of Rs. 0.10 mn and outstanding for a period of more than 30 days.

9. The Company has no amounts due to suppliers under the Micro Small and Medium Enterprise Development Act, 2006, as at March 31, 2010.

Note: The above information has been determined to the extent such parties had been identified on the basis of information available with the Company.

10. The Company has a single segment namely "Civil Construction ". Therefore, the Companys business does not fall under different segment as defined under AS 17- Segmental Reporting" issued by institute of Chartered Accountants of India.

11. The Company has issued 7,218,061 fully paid up equity shares of Re. 1 each on October 26, 2009 to Qualified Institutional Buyers at a price of Rs. 477.03 per equity share (including a premium of Rs. 476.03 per equity share). The said funds have been used for the purpose for which it was raised.

12. The Company issued 2,950,000 fully paid up equity shares of Re. 1 each on October 29, 2009 to Patel Engineering Employee Welfare Trust (ESOP Trust) at a price of Re. 1 per equity share for issue of stock options to eligible employees.

Shares for ESOP have been already allotted to the trust and therefore there is no effect on EPS. However, as and when the options are given by the trust to the employees, the necessary accounting for expense will be made.

13. Previous years figures have been regrouped, rearranged and reclassified wherever necessary.