Notes to Accounts of SPML Infra Ltd.

Mar 31, 2023

6.1 An application for initiation of Corporate Insolvency Resolution Process (‘CIRP''), under Section 7 of the Insolvency and Bankruptcy Code, 2016 has been admitted against Luni Power Company Pvt. Ltd. (‘Luni''), a subsidiary of the Company, on December 23, 2019 by the Hon''ble NCLT, Chandigarh Bench has already been resolved and the same has been transferred to the Resolution Applicant vide NCLT Order dated 16.04.2022 in respect of IA No. 134/2021.. Since the entire investment value had already been impaired in the books of accounts, no financial impact is there in the current financial year 2022-23.

6.2 On Pledge of Investments as held by SPML Infra Ltd. in other Group Companies:

Investments of SPML Infra Ltd. i.e. 19,99,99,700 Equity Shares in SPML Utilities Limited (Subsidiary); 74,32,000 Equity Shares in SPML Infrastructure Limited (Subsidiary); 2,55,000 Equity Shares in Allahabad Waste Processing Company Limited (Subsidiary); 9,999 Equity Shares in Bhagalpur Electricity Distribution Company Private Limited (Subsidiary); 29,48,340 Equity Shares in Binwa Power Company Private Limited (Associates); 25,000 Equity Shares in Doon Valley Waste Management Private Limited (Subsidiary); 2,55,000 Equity Shares in Mathura Nagar Waste Processing Company Limited (Subsidiary); 2,24,700 Equity Shares in SPML Bhiwandi Water Supply Infra Limited (Associates); 2,49,700 Equity Shares in SPML Bhiwandi Water Supply Management Limited (Associates); 58,78,000 Equity Shares in Madurai Municipal Waste Processing Company Pvt. Ltd (Associates) has been pledged as on the Balance Sheet signing date in favour of the SBICAP Trustee/ S4A Lenders for securing the due repayment of the Debts as restructured under the “SPML S4A Scheme” as approved by the Overseeing Committee (governed under RBI) with the super majority of the Lenders Banks.

8.3. The company has not advanced or loaned or invested funds either borrowed funds or share premium or any other sources or kind of funds to any other person(s) or entity(ies),including foreign entities(intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall :

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

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

b. (i) During the year ended March 31, 2023, the Company has allotted, by way of preferential allotment, 32,54,930 equity shares of Rs. 2/- each fully paid-up, at an issue price of Rs. 50/- each (including a premium of Rs. 48/- per equity share) aggregating to Rs. 1627.46 Lakhs, to Promoter and Promoter Group, on conversion of 16,27,465 0% Compulsorily Convertible Preference Shares (''CCPS''). Accordingly, the balance CCPS as on March 31, 2023 is 17,77,465 having a face value of Rs.100/-each, at par, aggregating to Rs. 1,777.47 Lakhs. Each CCPS is convertible into 2 equity shares of face value of Rs. 2/- each at the conversion price of Rs. 50/- including premium of Rs. 48/- per share, in one or more tranches.

b (ii) During the year ended March 31, 2023, the Company has further allotted, by way of preferntial allotment, 27,42,790 equity shares of Rs. 2/- each fully paid-up, at an issue price of Rs. 57/- each (including a premium of Rs. 55/- per equity share) aggregating to Rs. 1563.39 Lakhs, to certain entities, on conversion of their existing unsecured loans to the Company.

c. (i) Terms/ rights attached to equity shares:

The Company has only one class of equity shares having par value of Rs. 2/- per share. Each holder of equity shares is entitled one vote per share. The Company declares and pays dividends in Indian Rupees. In the event of liquidation of the Company, the holders of the Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c. (ii) Terms and rights attached to 0% Compulsorily Convertible Preference Shares:

Each Compulsorily Convertible Preference Shares having par value of Rs. 100/- per share shall be compulsorily convertible into two equity share at any time within 18 months from the date of allotment. The Compulsorily Convertible Preference Shares shall have priority with respect to repayment of capital over equity shares of the company. The holders of CCPS would not participate in the surplus assets and profits on winding up which may remain after the entire capital has been repaid and shall not carry any voting right.

f. In pursuance of the implementation of “SPML S4A Scheme”,the Promoters of the Company had diluted their shareholding in the Company to the extent of “Principle of Proportionate loss sharing by Lenders (S4A Lenders)” in favour of the Lender Banks to entitle them to hold 21.44% stake in the Company. As on balance sheet dated March 31, 2023 Lenders are holding 2.52% shareholding in the Company.

g. In terms of the “SPML S4A Scheme” as approved by the Overseeing Committee (constituted under the aegis of Reserve Bank of India) the entire debt of the Company as bifurcated into Part A Debt and Part B Debt together with all interest thereon is also inter-alia secured by pledge of the Shares of the Company held by Promoters in favour of SBICAP Trustee Ltd. for the benefit of the Secured Parties. The Promoters & the Promoter Group of the Company as on the balance sheet dated March 31, 2023 had pledged 13.21% of the Shares as held by them in the Company in favour of the Security Trustee.

a. The Company had allotted Unlisted, Unrated, Redeemable 54,53,517 Optionally Convertible Debentures (OCDs) of Rs. 1000/- each (carrying coupon rate @0.01 % p.a. included within an YTM @8.15% p.a.redeemable after moratorium period of 5 years from the date of issue starting from quarter ending 31st December 2022 and ending on quarter ending 30th September, 2027)). OCDs carry Coupon Rate of 0.01% p.a. to be paid in the first instance from November 01, 2017 to March 31, 2018 and thereafter at the end of each financial quarter commencing from last coupon payment date and ending on the next coupon payment date. The Company acknowledges that the Lenders reserves a Right of Recompense (“RoR”) for Concessional Interest Rates. The recompense payable by the Company after the final redemption date depends on various factors such as improved performance of the Company, Cash Inflow & other conditions.Out of the above,2,14,450 OCDs relating to Series No. C,D, and F were redeemed till the year ended 31st March,2023. The aforesaid OCDs issued under various Series are as under:

b. The OCDs under series A, B, & H are secured by way of first ranking charge in favour of Security Trustee (appointed for the benefit of the Secured Parties/debenture holders on pari-passu basis) on Hypothecation of Stocks and Book Debts of the Company, both present and future and all other current assets and non-current receivable, Plant and

Machinery, Furniture and Fixture and office equipment. In addition to above these loans are secured by the Personal Guarantee of two Promoter Directors and others of the Company and Corporate Guarantee of one of the associates of the Company, except for OCDs issued to ICICI Bank under Series B which is secured by extension of exclusive securities with them.

c) . OCDs issued under Series E are secured by way of first ranking charge in favour of the Security Trustee (appointed for

the benefit of the Secured Parties/debenture holders on pari-passu basis) (i) on all the current and non-current assets of the Company (both present and future)(ii) Exclusive charge on two Immovable Properties situated at Sarita Vihar, New Delhi, (iii) Pledge of Shares of the Company held by Promoters/Associates (iv) Negative lien on one property at New Delhi owned by one of the Associates. In addition, these OCDs are also secured by Personal Guarantee of two property owners to the extent of the value of the properties as well as Personal Guarantee of Promoters

d) OCDs issued under Series G are secured by way of exclusive charge in favour of ICICI Bank Ltd. on the Immovable Property of the company situated in Gurugram.

e) The quarterly repayment of OCDs started from December, 2022, however the Company could not meet its'' payment obligations amounting to Rs. 6176 lakhs till the period ended on 31st March,2023.

16.2 Loans from Related Parties and Bodies Corporates carry interest @8.60%- 14.5% and are repayable within a maximum period of 10 years.

16.3 Loans from Bodies Corporates are repayable within a maximum period of 10 years.

16.4. The Company has been facing financial crisis since last few financial years due to various reasons as stated in Note no.16.5 below, because of that with effect from the financial year 2019-20, the Company is in default relating to payment of its dues to the financial creditors (mainly to banks, hereinafter referred to as “Lenders”) and accordingly, the borrowing facilities of the Company with the Lenders are irregular as on 31st March, 2023. The Company was in the process of formulating a resolution plan with Lenders and as per information available with the Company, the Lenders are proposing for assignment of the debt to eligible participant (amongst ARCs/Banks/NBFCs/FIs), through e-auction under the swiss challenge method, which was to be held on June 6, 2023. The Company is awaiting an official notification/communication in this regard from the Lenders and/or the eligible participant who ultimately prevailed in the said e-auction. The Company has been given to understand that the aforesaid e-auction is governed by the terms of Reserve Bank of India/ Bank''s policy (Transfer of Loan Exposures) and the acquisition by the eligible participant will be by way of an Assignment of debt by the Lenders.

Presently, the Company continues to disclose the outstanding loans, including interest recognized in the books of accounts, in the financial results as per balances appearing in it''s Books of Accounts as per agreements with the respective Lenders.

Considering the aforesaid positive developments and the favourable business environment in the sector in which the Company operates, the Company is quite hopeful that the lenders will implement the resolution plan. The Management is confident that with the support of the lenders and approval of the restructuring proposal, the Company shall be able to generate sufficient cash inflows through profitable operations to discharge its financial obligations. Accordingly, the Company''s Board of Directors considers it appropriate to prepare these financial results on a going concern basis.

16.5. The operations of the company have suffered in the last few years mainly due to general economic slowdown as well as various actions and inactions by various Government bodies / authorities, including factors beyond the control of the Company or its management. The major clients / customers of the Company are government bodies wherein the monies of the company are stuck since long and for which the claims of the Company are pending. The situation has been further aggravated with the non-release of sanctioned working capital credit facilities including Bank Guarantee limits, alongwith levy of excess margin & charges by some of the Lenders as against the agreed terms of sanction by them. Due to the mismatch in the cash flows, the Company has not been able to service its debts or meet the payment obligations to the Lenders. Hence, the accounts of the Company with the Banks have been classified as non-performing asset. Consequently, wef 1st November, 2019, majority of the Lenders ceased charging interest on loans to the Company, in their books of account, as per RBI''s prudential norms. Hence, with effect from 1st November, 2019, the company is not recognizing any interest liability on the fund based borrowing facilities from the Lenders in the books of accounts as the same was discussed to be waived in the Resolution Plan ( except for recognizing Rs. 3,419.41 lakhs during the quarter ended 31st March, 2023 towards part of interest charged by banks in the bank statements, from 1st November, 2019 onwards). Accordingly, post such partial recognition, interest expense of Rs.19,951.70 lakhs (Rs. 19,795.66 lakhs for the year ended March 31,2022 ) on the said borrowings have not been recognized for the year ended 31st March, 2023. Statutory Auditors report is modified in respect of the aforesaid non-recognition of interest liability, by way of a qualification. Further, on the aforesaid grounds, in respect of certain other borrowings including those from related parties (i.e. borrowing other than from ‘Lenders''), the company has not recognized interest expense of Rs.491.86 lakhs for the year ended 31st March, 2023 . Statutory Auditors report is modified in respect of the aforesaid non-recognition of interest liability, by way of a qualification.

16.6. As mentioned in Note 16.5 above, the accounts of the Company with the banks have been classified as Non Performing Assets. Hence, the Company has not filed any quarterly return or statement with the banks during the current financial year.

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

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

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

a. Corporate Loan of Rs. 2779.18 Lakhs (P.Y. Rs. 2,787.87 Lakhs) from Consortium Member-Banks carries regular interest @ 12.65% p.a.. The said loans are secured on pari-passu basis by (i) Extension on all the current and non-current assets of the Company (both present and future) (ii) Exclusive mortgage on two Immovable Properties situated at Sarita Vihar, New Delhi owned by relatives of the Promoters (iii) Negative lien on one property at New Delhi owned by one of the associates (iv) Pledged shares of the Company held by Promoters/Associates. In addition, these loans are also secured by Personal Guarantee of relatives of promoter and others to the extent of the value of their mortgaged properties as well as Personal Guarantees of the Promoters of the Company.

b) Cash Credit and Working Capital facilities in Indian rupees are secured by hypothecation of stocks and book debts of the Company, both present and future, hypothecation of certain specific plant and machinery, furniture/fixtures and office equipments as a pari passu charge with other consortium banks. These loans are additionally secured by the guarantees of two promoter directors of the Company and one relative of the promoter in addition to Corporate Guarantee of SPM Engineers Limited (related party). The Company has recognosed the Interest which has been recovered by the Lenders. These Cash Credit outstanding including the unaccounted interest are also included in the ongoing assignment of entire Banking Exposure including ODCs by all Lenders to the successful ARC.

The credit period towards trade receivables generally ranges between 30 to 60 days. Further the customer retains certain amounts as per the contractual terms which usually fall due on the completion of contract. These retentions are made to protect the customer from the Company failing to adequately complete all or some of its obligations under the contract.

Contract assets are initially recognised for revenue earned from transfer of goods and services but not billed to customer because the work completed has not met requirements of various milestones as set out in the contract with customers. Upon fulfilling the milestones and acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables. Contract liabilities include advances received from customers towards mobilisation of resources, purchase of materials and machineries.

Increase in the trade receivables, contract assets and contract liabilities as at March 31, 2023 from April 01, 2022 is on account of changes in operations of the Company. Impairment loss recognized on trade receivables have been disclosed in note 7. No Impairment loss has been recognised on contract assets since the management is of the opinion that the contract assets are fully recoverables.

NOTE 31: CONTINGENT LIABILITIES			'' In Lakhs
Particulars		As at March 31, 2023	As at March 31, 2022
A. Contingent Liabilities
i Claims against the Company not acknowledged as debts:
(a) Legal suits filed against the Company by third parties towards claims disputed by the Company relating to supply of goods and services		85.70	670.21
(b) Legal suites filed against the Company by ex-employees towards claims disputed by the Company relating to non-payment of their dues		0.26	0.26
		85.96	670.47
ii	Claims towards liquidated damages not acknowledged as debts by the Company (Against the above, debts of the like amounts are withheld by the customers. However, the Company expects no material liability to accrue on account of these claims)	18,194.18	19,953.36
iii	Disputed Demands:
(a) Excise / Service tax		23.13	23.13
(b) Sales tax / VAT		3,903.47	3,903.47
iv	Performance bank guarantees, given on behalf of a Joint Ventures
- MVV Water Utilities Private Limited		166.00	191.00
v	Corporate Financial Guarantees given to banks for financial assistance extended to subsidiaries and other body corporates	2,040.93	4,232.51

The Weighted Average duration of the defined benefit obligation as at March 31, 2023 is 60 years

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate Risk: The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non-availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

Asset Liability Mismatching or Market Risk: The duration of the liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

NOTE 36.2 FAIR VALUE HIERARCHY

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below:-Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at ammortized cost

The carrying amount of financial assets and financial 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 received or settled

(c) During the year there has been no transfer from one level to another

NOTE 37. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES:

The Company''s principal financial liabilities, comprise of Borrowings and Trade Payables. The main purpose of these financial liabilities is to finance the Company''s working capital requirements. The Company has various financial assets such as Trade Receivables, Loans, Investments, Short-term Deposits and Cash & Cash Equivalents which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s Board of Directors oversees the management of these risks and advises on financial risks and the appropriate financial risk governance framework for the Company. The Company''s Board of Directors assures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

The Board of Directors reviews and agrees policies for managing each risks, which are summarized below:

A. Credit Risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company.

The Company''s exposure to credit risk is influenced mainly by Cash and Cash Equivalents, Trade Receivables and financial assets measured at Amortised Cost.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortized cost includes Security deposits, Loans given and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

*Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its Financial Liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Maturities of Financial Liabilities

The table below analyse the Company''s Financial Liabilities into relevant maturity groupings based on their contractual maturities

b. Price Risk

The Company''s exposure to price risk arises from investments held and classified as FVTPL or FVOCI. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

NOTE 38. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued Equity Capital, Share Premium and all Other Equity Reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company''s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value . The Company''s overall strategy remains unchanged from previous year.The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirements are met through a mixture of equity ,internal fund generation and borrowed funds. The Company''s policy is to use short term and longterm borrowings to meet anticipated funding requirements. The Company monitors capital on the basis of the Net Debt to Equity Ratio. The Company is not subject to any externally imposed capital requirements. Net debt are long term and short term debts as reduced by Cash and Cash Equivalents (including restricted Cash and Cash Equivalents). Equity comprises share capital and free reserves (total reserves excluding OCI). The following table summarizes the capital of the Company:

NOTE 41. Other Income includes Rs.603.15 Lakhs (Rs. 727.96 Lakhs during the year ended March 31, 2022) consisting of certain credit balances of operational creditors either barred by the laws of limitation and not yet claimed by them or the dues are settled by mutual agreements.

NOTE 42. Interest on YTM basis amounting to Rs. 6,276.13 Lakhs for the year ended March 31, 2023 (Rs. 6,027.24 Lakhs as on March 31, 2022) has not been provided on Optionally Convertible Debentures (OCDs) issued to Lenders under S4A scheme, as the management believes that the same is not payable until maturity of such OCDs. However, the current resolution plan which is under consideration entails revision in the terms of these OCDs.

NOTE 43. Clients of the Company had foreclosed certain projects/contracts which are presently under arbitration/litigation proceedings. The management, based on the facts of the cases, is confident to recover / realise the trade receivables as at March 31, 2023 of Rs. 7,372.07 Lakhs (Rs.8,066.17 Lakhs as on March 31, 2022).

NOTE 44. The Company has certain Trade and Other Receivables of Rs. 43,521.90 Lakhs as at March 31, 2023 (Rs. 42,573.94 Lakhs as on March 31, 2022) backed by arbitration awards pronounced in its favour over the years. Further, the Company has recognised interest income of Rs. 2,852.63 Lakhs during year ended March 31, 2023 (Rs. 2,734.13 Lakhs during the year ended March 31, 2022) on such arbitration awards. Against these awards, the customers have preferred appeals in the jurisdictional courts and the legal proceedings are going on. Pending the outcome of the said legal proceedings, the above amounts are being treated as fully realisable as based on the facts of the respective case, the management is confident that the final outcome of the legal proceedings would be in its favour.

NOTE 45. Trade Receivables aggregating Rs.17,518.19 Lakhs (March 31, 2022 Rs.15,506.40 Lakhs) are under arbitration proceedings. The management is confident that based on the facts of the respective cases; there is no uncertainty as regards their realisation.

NOTE 47. The company has given unsecured loans to certain subsidiaries, joint ventures and associates for developing various projects. However, due to the current financial difficulties being faced by the Company, as detailed in Notes 16.4 and 16.5 hereinabove, it has not been able to continue providing required financial support which they have asked for subsequently for developing the projects. Consequently and coupled with various other reasons specific to each such subsidiary, joint venture and associate and the general economic conditions, their financials have been adversely impacted over a period of time. Based on the assessment of financials etc. of these companies and as per the provisions of Ind AS, the Company has been providing for expected credit losses in respect of the loans given to them alongwith accrued interest. In view of the aforesaid circumstances and considering the probability that the Company will collect the interest to which it is entitled to, the Company has, with effect from 1st April, 2021, postponed recognition of income from interest on such unsecured loans given to certain subsidiaries, joint ventures and associates which are impaired fully/partially by way of expected credit losses as per the provisions of Ind AS. The amount of such interest not recognized for the year ended March 31, 2023 is Rs.1,047.15 lakhs (Rs.1051.22 lakhs for the year ended March 31, 2022). The interest income would be considered as revenue, as per the provisions of Ind AS, in the period in which there is certainty of it''s collection/it is ultimately collected. Notwithstanding the aforesaid, the Company always has the right to recover the entire outstanding loan along with interest accrued thereon.

NOTE 50 SEGMENT REPORTING

The Company is operating in a single segment viz. EPC in accordance with IND AS -108 notified pursuant to Companies (Indian Accounting Standards) Rules, 2015 , (as amended). The Company is primarily operating in India which is considered as single geographical segment.

NOTE 51. The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the reporting period year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961). Further, their is no previously unrecorded income and related assets that have been recorded in the books of account during the operating period.

NOTE 52: The Company does not have any benami property, where any proceedings have been initiated or pending against the company for holding any benami property under Benami Transactions (Prohibitions) Act, 1988 (45 of 1988) and the rules made there under.

NOTE 53: The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

NOTE 54: There has not been any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

NOTE 55: The Company has not traded or invested in crypto currency or virtual currency during the reporting period.

NOTE 56: NOTE 56: The Company during the current year has not made any Loans or Advances in the nature of loans granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013), either severally or jointly with any other person.

NOTE 57: Previous year''s figures have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year.

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Mar 31, 2018

CORPORATE INFORMATION

SPML Infra Limited (the Company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its equity shares are listed on premier stock exchanges of India viz. BSE Limited and National Stock Exchange of India Limited. The Company is engaged in the business of infrastructure development which inter-alia includes water management, water infrastructure development, waste water treatment, power generation, transmission and distribution, solid waste management, and other civil infrastructures.

These standalone financial statements for the year ended 31 st March, 2018 have been approved by the Board of Directors on 23rd May, 2018.

Notes: 1. On Pledge of Investments as held by SPML Infra Limited in other Group Companies:

Investments of SPML Infra Limited i.e. 19,99,99,700 Equity Shares in SPML Utilities Limited; 49,64,500 Equity Shares in SPML Infrastructure Limited; 2,55,000 Equity Shares in Allahabad Waste Processing Company Limited; 9,999 Equity Shares in Bhagalpur Electricity Distribution Power Corporation Limited; 29,48,340 Equity Shares in Binwa Power Company Private Limited; 2,92,500 Equity Shares in Delhi Waste Management Limited; 25,000 Equity Shares in Doon Valley Waste Management Private Limited; 2,55,000 Equity Shares in Mathura Nagar Waste Processing Company Limited; 2,24,700 Equity Shares in SPML Bhiwandi Water Supply Infra Limited; 2,49,700 Equity Shares in SPML Bhiwandi Water Supply Management Limited has been pledged as on the Balance Sheet signing date in favour of the SBICAP Trustee/ S4A Lenders for securing the due repayment of the Debts as restructured under the “SPML S4A Scheme” as approved by the Overseeing Committee (governed under RBI) with the super majority of the Lenders Banks.

2. Change in number of shares held on account of merger of various investments held by SPML Infra Limited

SPML Infra Limited has filed the merger petition with the National Company Law Tribunal (NCLT) with the proposal to merge the ADD Urban Enviro Limited (“Transferor Company No 1”) and Jamshedpur Waste Processing Company Private Limited (“Transferor Company No 2”) with the Company. The scheme of amalgmation was approved by Hon.ble NCLT bench at Bangalore and accordingly the merger order was passed vide order dated 31 st January 2018 giving the effective date of 1 st April 2016. Accordingly SPML Infra Limited has adjusted the necessary investment entries in the books.

Note 6.2 : Trade receivables are non-interest bearing and the payment period generally varies from 30 days to 60 days. Note 6.3 : For terms and conditions relating to Related Party receivables, refer Note 36

*** There is no common directorship with Luni Power Company Private Limited, Neogal Power Company Private Limited.

Note 2.1. Loans and receivables are non- derivative financial assets which generate a fixed or variable interest income for the Company. The Carrying value may be affected by changes in the credit risk of the Counterparties.

** There is no common directorship with Binwa Power Company Private Limited, Luni Power Company Private Limited, Neogal Power Company Private Limited, Doon Valley Waste Managment Private Limited.

b. Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of XI per share. Each holder of equity shares is entitled one vote per share. The Company declares and pays dividends in Indian Rupees.

In the event of liquidation of the Company, the holders of the Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d. * In pursuance ot the implementation ot SPML S4A Scheme /the Promoters ot the Company had diluted their shareholding in the Company to the extent of “Principle of Proportionate loss sharing by Lenders (S4A Lenders)” in favour of the Lender Banks to entitle them to hold 21.44% stake in the Company.

e. In terms ofthe “SPML S4A Scheme” as approved by the Overseeing Committee (constituted under the aegis of Reserve Bank of India) the entire debt of the Company as bifurcated into Part A Debt and Part B Debt together with all interest thereon is also inter-alia secured by pledge of the Shares of the Company held by Promoters in favour of SBICAP Trustee Limited for the benefit of the Secured Parties. The Promoters & the Promoter Group of the Company as on the balance sheet dated 31.03.2018 had pledged 34.31 % ofthe Shares as held by them in the Company in favour ofthe Security Trustee. Further, the promoters had pledged 01.52 % additional Shares as on the Balance Sheet signing date in terms ofthe “SPMLS4A Scheme”.

f. No bonus shares or shares issued for consideration other than cash or shares bought back over the last five years immediately preceeding the reporting date.

3.1 Security and repayment terms in respect of term loans from banks

a. The entire Term Loan from ICICI Bank of Rs.937.50 lakhs (Rs.937.50 lakhs) has been converted during the year into OCD (Series G) pursuant to “SPML S4A Scheme” and secured by the securities mentioned there against (Refer Point No.e of Note No. 15.3.3).

b. Term loan of Rs.39.00 lakhs from Yes Bank carries (Rs.507.80 lakhs) interest @ 11.75 % p.a. (YBL 1.50% p.a.) and is repayable in 5 quarterly instalments of Rs.7.75 lakhs each along with interest thereon starting from February 2019 and ending by February 2020. The said loan is secured by way of Subservient charge on all movable fixed assets and current assets (both present and future) of the Company. Further, loan is backed by the personal guarantee of the Chairman of the Company and pledge of shares of the Company by the promoters/ associates.

c. Corporate Loan of Rs.4,983.47 lakhs (P.Y. Rs.5,800 lakhs) from Consortium Member-Banks carries interest ranging from @ 12.65% p.a. to 14.45% p.a. and are repayable in uneven quarterly instalments along with interest thereon by FY 2022-2023. The said loans are secured on pari-passu basis by (i) Extension on all the current and non-current assets of the Company (both present and future) (ii) Exclusive mortgage on two Immovable Properties situated at Sarita Vihar, New Delhi owned by relatives of the Promoters (iii) Negative lien on one property at New Delhi owned by one of the associates (iv) Pledged shares of the Company held by Promoters/Associates worth Rs.5,000 lakhs. In addition, these loans are also secured by Personal Guarantee of two property owners to the extent of the value of the properties as well as Personal Guarantees of the Promoters of the Company.

d. As at the year ended March 31, 2018, the Company has defaulted in repayment of dues upto 90 days amounting to Rs.527 lakhs and Rs.357.58 lakhs, respectively; the default for more than 90 days amounted to Rs.120.00 lakhs and Rs. NIL to banks and financial institutions.

3.2 Security and repayment terms in respect of term loans from financial Institutions

Term Loan of Rs.1029.40 lakhs (Rs.3306.06 lakhs) from a Financial Institution carries interest @ 13.00% p.a. (IBR 2.80% p.a.) and is repayable in twelve equated quarterly instalments by April 2021. The said loan is secured against an exclusive charge on (i) the Immovable Property situated at Faridabad owned by one of group entities (ii) Immovable Property of the Company situated at Sawai Madhopur in Rajasthan (iii) Pledge of shares of the Company held by Promoters/Group entities giving coverage of Ix of Loan amount. Further, the Loan is also backed by Personal Guarantee of Main Promoters, Corporate Guarantee & PDCs given by one of group entities.

3.3.1 Restructuring of entire Debts as availed from the Banks/Financial Institutions under Scheme for Sustainable Structuring of Stressed Assets (“SPML S4A Scheme”)

In terms of the Scheme for Sustainable Structuring of Stressed Assets (“SPML S4A Scheme”) as approved by the Super Majority of the Lender Banks with Reference Date as 22nd March, 2017 which was further agreed and approved by the Overseeing Committee (constituted under the aegis of the RBI) on 6th October, 2017 and by the Shareholders of the Company at their meeting held on 20th November, 2017, the entire crystalized fund-based debts of the Company had been bifurcated into “Part A” i.e. sustainable part of debt to be serviced as per existing terms and conditions of those debts and “Part B” i.e. non-sustainable part of debt, which has been adjusted against by virtue of transfer of 78,59,575 Equity Shares as held by Promoters and Promoters group in the Company to the extent of the principal of Proportionate loss sharing by Lenders in favour of the lender banks to entitle them to hold 21.44% stake in the Company & balance of Part B debt converted into unlisted, unrated, reedemable 54,53,517 Optionally Convertible Debentures (OCDs) of Rs.1000 each (carrying coupon rate @0.01 % p.a. with an YTM @8.15% p.a.) in favour of the lender Banks based on their subscription to the OCDs.

3.3.2 Note for Right of Re-compensation:

In the instant arrangement, the Company acknowledges that the S4A Lenders reserves a right of recompense (“RoR”) for Concessional Interest Rates. The recompense payable by the Company after the final redemption date depends on various factors such as improved performance of the Company, Cash Inflow & other conditions. Further the quantum of the recompense amount would be ascertained/determined by the Steering Committee of Lenders within a period of one Month from the Final Redemption Date. However, the same is adjustable with the Upside Gain in the event the Member Banks decide to sell the shares transferred/ sold by Promoters to Lenders pursuant to the SPML S4A Scheme at any time prior to the final settlement date.

3.3.3 Security and repayment terms in respect of Optionally Convertible Debentures (OCDs)

The Company had allotted Unlisted, Unrated, Redeemable, Optionally Convertible Debentures (OCDs) of the Rs.1000/- each under eight series to the Lender Banks in proportion to their participation in the S4A restructuring scheme against conversion of part of their dues. The said eight series of OCDs are secured by way of:

a. OCDs issued under Series A, B, C & H are secured byway of first ranking charge in favour of the Security Trustee (appointed for the benefit of the Secured Parties/debenture holders on pari-passu basis) on (i) Hypothecation of Stocks and Book Debts of the Company, both present and future and all other current assets and non-current receivable (ii) Hypothecation of Plant and Machinery, Furniture & Fixtures and office equipment (iii) Lien on Fixed Deposit having issue value of Rs.38 lakhs in favour of Lead Bank. These loans are additionally secured by the Personal Guarantee of three Promoter Directors of the Company and Corporate Guarantee of one of the associates of the Company, except for OCDs issued to ICICI Bank under Series B & under Series C to Yes Bank which are also secured by extension of exclusive securities with them.

b. OCDs issued under Series D are secured by way of exclusive charge in favour of Yes Bank Limited on Pledge of shares of the Company held by Promoters/ Associates as well as subservient charge on moveable fixed assets and all current assets of the Company, both present and future. Further, these OCDs are also backed by Personal Guarantee of one Promoter of the Company

c. OCDs issued under Series E are secured by way of first ranking charge in favour of the Security Trustee (appointed for the benefit of the Secured Parties/debenture holders on pari-passu basis) (i) on all the current and non-current assets of the Company (both present and future)(ii) Exclusive charge on two Immovable Properties situated at Sarita Vihar, New Delhi, (iii) Pledge of Shares of the Company held by Promoters/Associates having market value of Rs.50 crores (iv) Negative lien on one property at New Delhi owned by one of the Associates. In addition, these OCDs are also secured by Personal Guarantee of two property owners to the extent of the value of the properties as well as Personal Guarantee of Promoters.

d. OCDs issued under Series F are secured by way of exclusive charge in favour of IFCI Limited on (i) the Immovable Property owned by one of group entities situated in Faridabad (ii) Immovable Property owned by the Company situated in Sawai Madhopur, Rajasthan (iii) Pledge of shares of the Company held by Promoters/ Group entities giving coverage of Ix of Loan amount. Further, the Loan is also backed by Personal Guarantee of Main Promoters, Corporate Guarantee & PDCs given by one of Associates of the Company

e. OCDs issued under Series G are secured by way of exclusive charge in favour of ICICI Bank Limited on the Immovable Property of the Company situated in Gurugram.

f. OCDS carry Coupon Rate of 0.01 % p.a. to be paid in the first instance from November 1,2017 to March 31,2018 and thereafter at the end of each financial quarter commencing from last coupon payment date and ending on the next coupon payment date. OCDs also carry Yield-to-Maturity (YTM) of 8.15% p.a. are redeemable after a moratorium period of five years from the date of issue starting from quarter ending December, 2022 and ending on quarter ending September, 2027.

3.4. Deferred payment credits from banks and others are secured against hypothecation of vehicles/construction equipments purchased against such loans are repayable in equated monthly installments (ranging from 8 to! 2) carrying interest rates ranging from 9.60% to 11.46% p.a

3.5 Loans from related parties carry interest @12-14.5% and are repayable within a maximum period of 10 years.

3.6 Loans from body corporates are repayable within a maximum period of 10 years.

Note 4.1. Trade payables are non-interest bearing and are normally settled on 60-days terms. Note 16.2. For terms and conditions with Related Parties, refer to Note 36

5.1 Demand loan and working capital facilities in Indian rupees are secured by hypothecation of stocks and book debts of the Company both present and future, hypothecation of certain specific plant and machinery, furniture/fixtures and office equipments and also the lien on fixed deposit having value of Rs.38 lakhs in favour of lead banker as a pari passu charge with other consortium banks. These loans are additionally secured by the guarantees of three promoter directors ofthe Company and corporate guarantee of SPM Engineers Limited (related party). The demand loans and cash credit and working capital facilities carry interest @ 11.60% to 15.75% p.a.

5.2 Loan from related parties is repayable on demand and carry interest @ Nil to 14.5%.

5.3 Loans from bodies corporate carry interest @ 12% p.a to 14.5% p.a.

The estimates of future salary increases have been considered in actuarial valuation after taking into consideration the impact of inflation, seniority, promotion and other relevant factors such as supply and demand situation in the employment market.

Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, which is used for calculating returns over the entire life of the related obligation. The Gratuity Scheme is invested in group Gratuity-Cum-Life assurance cash accumulation policy offered by Life Insurance Corporation of India

The Weighted Average duration ofthe defined benefit obligation as at 31 st March 2018 is 58 years

Valuations are performed on certain basic set of pre-determined assumptions and other regulatory frame work which may vary over time. Thus, the Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest Rate risk: The plan exposes the Company to the risk off all in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non-availability of enough cash/cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Salary Escalation Risk: The present value ofthe defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts.

Asset Liability Mismatching or Market Risk: The duration ofthe liability is longer compared to duration of assets, exposing the Company to market risk for volatilities/fall in interest rate.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

NOTE 6: LEASES

Operating lease - Company as lessee

The Company’s leasing arrangement are in the nature of cancellable operating leases. The Company has taken various offices etc. on Operating Leases, which is renewable by mutual consent of concerned parties. No contingent rent is payable by the Company in respect of the above leases. There are no Price escalation clause in the Rent agreements. Related lease rentals have been disclosed under the head “Rent” in Note 28 of Statement of Profit and Loss. There are no restrictions placed upon the Company by such leases.

Notes:

Related party relationships as mentioned in the above list are determined by the management based on nature of ‘control’ that the Company exercises over the other companies.

*Two companies Add Urban Enviro Limited and Jamshedpur Waste Processing Company Private Limited merged with SPML Infrastructure Limited w.e.f 1 st April, 2016 wide court order dated 31 st Jan, 2018

# Ceased to be subsidiary w.e.f June 2017

Four subsidiary companies namely Tons Valley Power Company Private Limited, Rupin Tons Power Company Private Limited, Uttarkashi Tons Hydro Power Private Limited and SPML Infraprojects Limited have applied for striking off their names from the Register of Companies under the Companies Act, 2013. Considering the concept of materiality and the aforsesaid development that arose subsequent to 31.03.2018, the figures of these subsidiary companies have not been considered for the purpose of Disclosure under Related Parties.

Notes:

* Unsecured Loans taken from Bharat Hydro Power Company Limited and SPM Engineers Limited in earlier years have been settled during the year 2017-18 through sale of investments in equity shares held by the Company in group companies.

**Two companies, Add Urban Enviro Limited and Jamshedpur Waste Processing Company Private Limited merged with SPML Infra Limited w.e.f 1 st April, 2016 wide court order dated 31 st Jan, 2018. Hence the figures for the year 2017-18 are included in the figures disclosed against SPML Infra Limited in the above table.

Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and settlement occurs in cash except as otherwise mentioned.

-Carrying Value of assets / liabilities carried at amortized cost are reasonable approximation of its fair values.

The Company has disclosed financial instruments such as cash and cash equivalents, other bank balances, trade receivables and trade payables at carrying value because their carrying amounts are a reasonable approximation of the fair values due to their short term nature.

NOTE 7.1: FAIR VALUE HIERARCHY

The table shown below analyses financial instruments carried at fair value. The different levels have been defined below: -Level 1: Quoted Prices (unadjusted) in active markets for identical assets or liabilities

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices)

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

(b) Financial instruments at amortised cost

The carrying amount of financial assets and financial 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 received or settled

(c) During the year there has been no transfer from one level to another.

NOTE 8: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities, comprise of borrowings and trade payables. The main purpose of these financial liabilities is to finance the Company’s working capital requirements. The Company has various financial assets such as trade receivables, loans, investments,short-term deposits and cash & cash equivalents, which arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks and advises on financial risks and the appropriate financial risk governance framework for the Company. The Company’s Board of Directors assures that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

A. Credit Risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company.

The Company’s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost.

The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortized cost includes security deposits, Loans given and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.

a) Credit Risk Management

1. Credit Risk Rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A. Low Credit Risk

B. Moderate Credit risk

C. High credit risk

*Based on business environment in which the Company operates, a default on a financial asset is considered when the counterparty fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions. Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.

b) Credit Risk Exposure

Provision for Expected Credit Loss

The Company provides for expected credit loss based on 12 month and lifetime expected credit loss basis for following financial assets:

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts ofthe Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Maturities of Financial Liabilities

The table below analyse the Company’s Financial Liabilities into relevant maturity groupings based on their contractual maturities

C. Market Risk

a. Interest Rate Risk

The Company has taken debt to finance its working capital, which exposes it to interest rate risk. Borrowings issued at variable rates expose the Company to interest rate risk.

b. Price Risk

The Company’s exposure to price risk arises from investments held and classified as FVTPL or FVOCI. To manage the price risk arising from investments, the Company diversifies its portfolio of assets.

NOTE 9: CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company’s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company’s overall strategy remains unchanged from previous year. The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments. The funding requirements are met through a mixture of equity, internal fund generation and borrowed funds.. The Company’s policy is to use short term and long term borrowings to meet anticipated funding requirements. The Company monitors capital on the basis of the net debt to equity ratio. The Company is not subject to any externally imposed capital requirements. Net debt are long term and short term debts as reduced by cash and cash equivalents (including restricted cash and cash equivalents). Equity comprises share capital and free reserves (total reserves excluding OCI). The following table summarizes the capital ofthe Company:

NOTE 10. Sundry balances/liabilities written back aggregating Rs.1,245.08 lakhs (Rs.144.91 lakhs) consisting of numerous balances being unclaimed / unmoved since long (mostly more than three years) have been written back during the year as the management believes that these amounts are no longer payable.

Note 11. No provision for interest on account of YTM amounting to Rs.1842.68 lakhs has been made on Optionally Convertible Debentures (OCDs) issued to lenders under SPML S4A Scheme, as the management believes that the same is not payable until maturity of such OCD.

Note 12. Clients of the Company have foreclosed the certain contracts which are under arbitration / litigation proceedings. The management, based on the fact of the case is confident to recover the trade receivables of Rs.3,402.74 lakhs as on 31 st march 2018 (Rs.11,198.02 lakhs as on 31st March 2017 and Rs.4,829.10 lakhs as on 1st April 2016). Pursuant to adoption of IND AS following the expected credit loss model, Rs.7,795.28 lakhs have been provided out of the gross debtors of Rs.11,198.02 lakhs which are under arbitration/dispute and were a subject matter of the auditors’ qualification as at March 31, 2017.

Note 13. The Company has Trade and Other Receivables amounting Rs.25,460.41 lakhs as on March 31, 2018 (Rs.23,358.81 lakhs as on March 31, 2017, Rs.15,997.75 lakhs as on April 1, 2016) and has recognized interest of Rs.1,471.20 lakhs (Rs.6,603.68 lakhs as on March 31, 2017; Rs.796.68 lakhs as on April 1, 2016) during the year arising out of arbitration awards pronounced in favour of the Company. Against these awards, the customers have preferred appeals in the jurisdictional courts and the legal proceedings are going on. Pending the outcome of the said legal proceedings, the above amounts are being carried forward as receivable as the management believes that the final outcome of the appeals would be in favor of the Company based on the facts of the respective cases and is confident to recover the aforesaid claims in full.

Note 14. Trade receivables aggregating Rs.8,216.06 lakhs (31st March, 2017 Rs.9,842.77 lakhs; 1st April, 2016: Rs.2,135.12 lakhs) are under arbitration proceedings. The management is confident that based on the facts of the respective cases; there is no uncertainty as regards their realization.

Note 15. In accordance with the provisions of Section 135 of the Companies Act 2013, the Company was to spend a sum of Rs.28.10 lakhs towards the CSR activities during the year ended March 31, 2018. During the year, the Company has spent Nil for the aforesaid activities.

Note 16. Previous periods’s figures have been regrouped/rearranged wherever considered necessary to confirm to the figures presented in the current year. Certain balances of Trade Receivables, Loans, Unsecured Borrowings and Trade Payables are subject to confirmations and subequent reconciliations.

Note 17: FIRST TIME ADOPTION OF IND AS

These financial statements for the year ended 31 March 2018, are the first financial statements of the Company prepared in accordance with Ind AS.

Exemptions Applied:

Ind AS 101 allows certain exemptions from the retrospective application of certain requirements under Ind AS.

a. Estimates

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions as described below that affect the reported amounts and the accompanying disclosures. The Company based its assumptions and estimates on parameters available when the financial statements were prepared.Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

- Cost of Defined Benefit Plan and the Present Value of the defined benefit obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future.

- Impairment of financial assets based on Expected Credit Model

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1 April, 2016, the date of transition to Ind AS and as of 31 March 2017

b. Classification and measurement of Financial Assets

The Company has assessed the classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS in accordance with Ind AS 101.

Footnotes to Reconciliation a Impairment Loss as per Expected Credit loss

The Company has recognised impairment loss as per Expected Credit Loss on Trade Receivables and Loans as per Ind AS 109. As a result, the loss allowance on Trade Receivables as at March 31, 2017 increased by Rs.13,979.14 lakhs (April 1, 2016:Rs.11,121.73 lakhs) and Loans by Rs.1,273.28 lakhs (April!, 2016: Rs.! ,273.28 lakhs). Consequently, the total Equity as at March 31, 2017 decreased by Rs.15,252.42 lakhs (April 1, 2016: Rs.12,395.01 lakhs) and profit for the year ended March 31, 2017 reduced by Rs.2,338.62 lakhs (net of Interest unwinding)

b. Fair valuation of Investments

In the financial statements under the previous GAAR investments ofthe Company were classified as long-term investments or current investments based on the intended holding period and readability. Long-term investments were carried at cost less provision for other than temporary diminution in carrying amount of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, the Company has recognised such investments as follows:

- Investments in Subsidiaries, Joint Ventures, and Associates: At cost

- Investments in equity instruments: At FVOCI through an irrevocable election

- Investments in Mutual Funds: At FVTPL

The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognised in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31 st March, 2017. This has decreased the retained earnings by Rs.8,565.85 lakhs as at 31 st March, 2017 (1 st April, 2016: Rs.8,565.85 lakhs).

Fair value changes with respect to investments in equity shares designated as at FVOCI have been recognised in retained earnings as at the date of transition and subsequently in the other comprehensive income for the year ended 31 st March, 2017. This has increased other reserves by Rs.840.48 lakhs as at 31 st March, 2017 (and retained earnings by Rs.709.15 lakhs) as at 1st April, 2016. Correspondingly, other comprehensive income for the year ended March 31, 2017 increased by Rs.131.33 lakhs.

c. Fair valuation of Property, Plant and Equipment

The Company has fair valued its Investment in Land, which was carried at cost under Previous GAAP. The resulting fair value changes have been recognised in Retained Earnings as at the date of transition. This has increased the retained earnings by Rs.7,284.44 lakhs (1 st April, 2016: Rs.7,284.44 lakhs).

Also, the Company has written off Property, Plant and Equipment where the significant risks and rewards relating to such assets have been transferred. This has resulted in decrease in the retained earnings by Rs.558.22 lakhs as on March 31, 2017 (April 1, 2016: Rs.558.22 lakhs).

d Fair valuation of Loans to Related Party

Under Ind AS, all financial assets are required to be measured at fair value. Accordingly, the Company has fair valued these loans to Related Party under Ind AS. Difference between the fair value and transaction cost of the loan has been recognised as Investment. Consequent to this change, Loans decreased by Rs.2,024.25 lakhs as at 31 st March, 2017 (1 st April, 2016 : Rs.2,024.25 lakhs). The Investment increased by Rs.1,323.70 lakhs as at 31 st March, 2017 (1 st April, 2016 : Rs.1,323.70 lakhs). As a result, the Profit for the year ended March 31, 2017 has increased by Rs.148.12 lakhs due to notional interest income on Loans.

e Fair valuation of Financial Guarantee

Under Ind AS, Financial Guarantees are required to be measured at Fair value. Accordingly, the Company has fair valued these Corporate Guarantee given to Related Party. The resultant difference has been recognised as Investment. Consequent to this change, Profit for the year ended March 31, 2017 has increased by Rs.168.15 lakhs on account of notional interest income on such Financial Guarantee contracts.

f Deferred Tax

In the financial statements prepared under previous GAAP deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/liability on timing differences between taxable profit and accounting profit. Under Ind AS, deferred tax is accounted as per the balance sheet approach which requires creation of deferred tax asset/liability on temporary differences between the carrying amount of an asset/liability in the balance sheet and its corresponding tax base.

The above changes have resulted in creation of deferred tax assets (net) amounting to Rs.5,363.69 lakhs as at 31st March, 2017 (April 1, 2016: Rs.4,694.10 lakhs). For the year ended 31 st March, 2017, it has resulted in decrease in deferred tax expense by Rs.683.67 lakhs in the statement of profit and loss for the year ended 31 st March, 2017.

g Remeasurement of Post- employment Benefit obligation

“In the financial statements prepared under previous GAAP remeasurement benefit of defined plans, arising primarily due to change in actuarial assumptions was recognised as employee benefits expense in the statement of profit and loss. Under Ind AS, such remeasurement benefits relating to defined benefit plans is recognised in other comprehensive income as per the requirements of Ind AS 19 - Employee Benefits.

As a result of this change, the profit for the year ended 31 st March, 2017 increased by Rs.46.89 lakhs and other comprehensive income has decreased by the same amount. There is no impact on the total equity as at 31 st March, 2017.

NOTE 18. STANDARDS ISSUED BUT NOT YET EFFECTIVE

Ministry of Corporate Affairs (““MCA”“) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind AS’s which the Company has not applied as they are effective for annual periods beginning on or after April 1, 2018:

Ind AS 115 - Revenue from Contracts with Customers

The Company is currently evaluating the impact of implementation of Ind AS 115 “Revenue from Contracts with Customers” which is applicable to it w.e.f 01.04.2018. However, based on the evaluation done so far and based on the arrangement that the Company has with its customers for sale of its services, the implementation of Ind AS 115 will not have any significant recognition and measurement impact. However, there will be additional presentation and disclosure requirement, which will be provided in the next year’s financial statements.

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount. Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact. These amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not expected to have any impact on the Company as the Company has no deductible temporary differences or assets that are in the scope of the amendments.

Ind AS 28 - Investments in Associates and Joint ventures

Clarification that measuring investees at fair value through profit or loss is an investment-by investment choice :

i) An entity that is a venture capital organisation, or other qualifying entity, may elect, at initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss.

ii) If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which:

(a) the investment entity associate or joint venture is initially recognised;

(b) the associate or joint venture becomes an investment entity; and

(c) the investment entity associate or joint venture first becomes a parent.

Ind AS 40- Transfers of Investment Property - Amendments to Ind AS 40

The amendments clarify when an entity should transfer property, including property under construction or development into, or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A mere change in management’s intentions for the use of a property does not provide evidence of a change in use.

Entities should apply the amendments prospectivelyto changes in use that occur on or after the beginning of the annual reporting period in which the entity first applies the amendments. An entity should reassess the classification of property held at that date and, if applicable, reclassify property to reflect the conditions that exist at that date. Retrospective application in accordance with Ind AS 8 is only permitted if it is possible without the use of hindsight.

The amendments are effective for annual periods beginning on or after 1 April 2018. These amendments are not applicable to the Company.

Amendments to Ind 112 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in Ind AS 112

The amendments clarify that the disclosure requirements in Ind AS 112, other than those in paragraphs B10-B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale. Since the proposed amendments relate to relevant disclosures made in the financial statements, excepting those, entity does not expect any impact of the same.

* Represents joint ventures where the Company, through a supplementary agreement with the JV partner, has altered its risk and reward from 50% and 33% to a specific amount of the contract representing 50% and 99% respectively of the total contract value and for which “back to back” work contract has been awarded to the Company by the joint venture entity. Accordingly, the Company’s share of assets, liabilities, income and expense in respect of these JV entities has not been disclosed in the table given below since these figures have got incorporated directly through the contract accounting. However, joint venture partners are, jointly and severally, liable to clients for any claims in these projects as per the original terms ofthe contract.

* These financial statement have been accounted for based on the management certified financial statement.

The above table does not include the amount pertaining to joint ventures where the Company has renounced a major part of its risk and reward in the joint ventures through supplementary agreement in favour of the joint venturer partners for a specified consideration which was duly accounted for upfront as Company’s share of profit in the joint venture amounting to Rs.194.34 lakhs (Rs.194.34 lakhs).

NOTE 19: SEGMENT REPORTING

The Company is primarily engaged in the business of construction. In accordance with IND AS -108 notified pursuant to Companies (Indian Accounting Standards) Rules, 2015, (as amended), the Company has identified two reportable business segments viz. Constuction and Trading. The Company is primarily operating in India which is considered as single geographical segment.

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Mar 31, 2016

1. Related Party Disclosure

Disclosure in respect of Accounting standard - 18 ''Related Party Disclosures'', as specified under section 133 of Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rule, 2014 (as amended)

(A) NAME OF RELATED PARTY (i) Subsidiary companies

1 Subhash Kabini Power Corporation Limited

2 SPML Industries Limited (Ceased to be subsidiary w.e.f. January 4, 2016)

3 SPML Energy Limited

4 SPML Infrastructure Limited

5 SPM Holding Pte. Limited

6 Binwa Power Corporation Private Limited

7 Awa Power Company Private Limited

8 IQU Power Company Private Limited

9 Neogal Power Company Private Limited

10 Luni Power Company Private Limited

11 Tons Valley Power Company Private Limited

12 Rupin Tons Power Company Private Limited

13 Uttarkashi Tons Hydro Power Private Limited

14 Delhi Waste Management Limited

15 Add Urban Enviro Limited

16 Add Energy Management Co. Private Limited

17 Madurai Municipal Waste Processing Co. Private. Limited

18 SPML Utilities Limited

19 Allahabad Waste Processing Co. Limited

20 Mathura Nagar Waste Processing Co. Private Limited

21 Mizoram Power Development Corporation Limited

22 Bhilwara Jaipur Toll Road Private Limited #

23 PT Sanmati Natural Resources

24 Mizoram Infrastructure Development Co. Limited

25 SPML Infraprojects Limited

26 SPML Infra Developers Limited

27 Bhagalpur Electricity Distribution Com P Limited

28 Doon Valley Waste Management Private Limited

29 Jamshedpur Waste Processing Company Private Limited

30 SJA Developers Private Limited

31 Subhash Urja Private Limited

32 Synergy Promoters Private Limited

(ii) Associates

1 Hydro Comp Enterprises (India) Limited

2 Pondicherry Port Limited

3 Mizoram Mineral Development Corporation Limited

4 SPML Bhiwandi Water Supply Infra Limited

5 SPML Bhiwandi Water Supply Management Limited

6 Aurangabad Jal Supply Solution Private Limited

7 ADD Realty Limited

8 Aurangabad City Water Utility Co. Limited

(iii) Joint ventures

1 SPML-CISC JV

2 SPML - Simplex JV

3 SPML-HCIL JV

4 OM Metals Consortium JV

5 Siddharth- Mahaveer SPML -JV

6 KBL-SPML JV

7 SPML - OM Metals JV

8 Malviya Nagar Water Services Private Limited

9 MVV Water Utility Private Limited

10 Gurha Thermal Power Co. Ltd

11 M&P Subhash JV

12 SPML-SEW-AMR Joint Venture

13 SMS-SPML JV

14 SUEZ -SPML JV

(iv) Key Management Personnel (KMP)

1 Mr. Subhash Chand Sethi Chairman

2 Mr. Sushil Kumar Sethi Managing Director

Executive Director and son of

3 Mr. Rishabh Sethi

Managing Director

(v) Relatives of Key Management Personnel

1 Mr. Abhinandan Sethi Son of Chairman

(vi) Enterprises owned or significantly influenced by KMP or their relatives

1 Arihant Leasing & Holding Co. Limited

2 Rishabh Homes Private Limited

3 Subhash Systems Private Limited

4 International Construction Limited

5 SPM Engineers Limited

6 Zoom Industrial Services Limited

7 Meena Homes Limited

8 20Th Century Engineering Limited

₉ Subhash Power Company Limited (Ceased to be related w.e.f. March 25, 2016)

10 SPML India Limited

11 Sanmati Power Company Private Limited

12 Meena Holdings Limited

13 Add Technologies (India) Limited

14 Sushil Kumar Sethi & Sons (HUF)

15 Pondicherry Special Economic Zone Company Limited

16 Bharat Hydro Power Corporation

17 Om Metal - SPML Infra Project Private Limited

₁₈ Oxive Environmental Management Private Limited (Ceased to be related w.e.f. September 12, 2015)

19 Techno Mechanical Services Pvt Limited

20 Peacock Pearl Business Solution Pvt Limited

21 Sethi Infratech Private Limited

22 Dia Infarlog Limited (Ceased to be related w.e.f. September 1, 2015)

23 SPML Industries Limited ##

# w.e.f. October 1, 2015

## Ceased to be subsidiary w.e.f. January 4, 2016.

2. Clients of the Company have foreclosed the contracts in earlier year (one contract in previous year) which are under arbitration / litigation proceedings. The management, based on the fact of the case is confident to recover the receivables, net book value of fixed assets and inventories of Rs.4,829.10 (Rs 4,829.10 lakhs), Rs. 695.49 (Rs. 1,084.28 lakhs) and Rs.500.47 lakhs (Rs.557.74 lakhs) respectively.

3. Segment information

The Company is primarily engaged in the business of construction, which is as per Accounting Standard - 17 on "Segment Reporting" notified pursuant to Companies (Accounting Standard) Rules, 2006 (as amended) is considered to be the only reportable business segment. The Company is primarily operating in India which is considered as single geographical segment.

4. The Company has recognized income of Rs.15,997.75 lakhs up to March 31, 2016 (Rs. 19,823.46 lakhs up to March 31, 2015) including interest of Rs. 769.68 lakhs (Rs.1,377.11 lakhs) during the year arising out of arbitration awards pronounced in favour of the Company. Against these awards, the customers have preferred appeals in the jurisdictional courts and the legal proceedings are going on. Pending the outcome of the said legal proceedings, the above amounts are being carried forward as receivable as the management believes that the final outcome of the appeals would be in favor of the Company based on the facts of the respective cases and is confident to recover the aforesaid claims in full.

5. Trade receivables aggregating Rs. 2,135.12 lakhs (previous year Rs 2,135.12 lakhs) are under arbitration proceedings. The management is confident that based on the facts of the respective cases; there is no uncertainty as regards their realization.

6. In accordance with the provisions of Section 135 of the Companies Act 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the Act, the Company was to spend a sum of Rs. 24.92 lakhs towards the CSR activities during the year ended March 31, 2016. The CSR Committee has approved the deployment of such funds towards CSR initiatives of promoting health care through improved sanitation at various locations. During the year, the Company has allocated Rs. 24.92 lakhs for the aforesaid activities; however, the same shall be spent in subsequent year.

7. Figures in bracket represent the previous year numbers and have been regrouped / rearranged wherever considered necessary to confirm to the figures presented in the current year.

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Mar 31, 2015

1. The Company has operating leases that are renewable on a periodic basis and are cancellable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. The amount of rent expenses included in the Statement of Profit and Loss towards operating leases aggregate to Rs. 406.50 lakhs (previous year Rs. 293.17 lakhs).

2. The Company has a process whereby periodically all long term contracts are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under the law/ Accounting Standards for the material foreseeable losses on such long term contracts has been made in the books of accounts.

3. The following amount are due from subsidiaries, associates and companies in which directors are interested as on the balance sheet date:

4. (a) Gratuity plan (AS 15 Revised)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is non-funded.

5. The Company has claimed income tax benefits of Rs. 29,758.6 lakhs (Rs. 28,380.19 lakhs upto March 31, 2014) approx. having tax impact of Rs. 8,666.38 lakhs (Rs. 8,197.86 lakhs upto March 31, 2014) including Rs. 468.52 lakhs (March 31, 2014 : Rs 163.41 lakhs) for the year under Section 80IA of the Income Tax Act, 1961, on construction contracts for certain infrastructure projects executed on behalf of various departments / agencies of different State Governments during the financial years 2003-04 onwards. In the tax assessments for the financial years upto 2011-12 , the above claims were initially disallowed by the Tax Authorities, but the appellate authority during the previous year allowed the aforesaid claims for the years 2005-2006 to 2009-2010. Accordingly, the Company believe that all such claims under Section 80IA would be allowed for subsequent years also. The Company's writ with the Honourable Calcutta High Court, challenging the validity of the retrospective amendment in Section 80IA, which, as per legal opinion obtained by the Company, is ultra vires to the main Section of the Income Tax Act, 1961, however, remains pending disposal. In view of the above 80IA deductions , the Company is not carrying MAT credit in the books.

6. Sundry balances/liabilities written back aggregating Rs 2,471.56 lakhs (Rs. 2,622.40 lakhs) consisting of numerous balances being unclaimed / unmoved since long (mostly more than three years) have been writen back during the year as the management believes that these amounts are no longer payable.

7. During the previous year, one of the client of the Company has foreclosed the contract, which is under arbitration. The management, based on the fact of the case is confident to recover the receivables and net book value of fixed assets of Rs.2,768.24 (Rs 1,904.00 lakhs) and Rs. 1,084.28 (Rs. 1,608.00 lakhs) respectively.

8. During the year, one of the client of the Company has foreclosed the contract. Pending the settlement of dispute, the management, based on the fact of the case is confident to recover the receivables and inventories of Rs.2,060.86 and Rs.557.74 lakhs.

9. Segment information

The Company is primarily engaged in the business of construction, which is as per Accounting Standard - 17 on "Segment Reporting" notified pursuant to Companies (Accounting Standard) Rules, 2006 (as amended) is considered to be the only reportable business segment. The Company is primarily operating in India which is considered as single geographical segment.

10. The Company has recognised income of Rs.15,543.40 lakhs in earlier years and interest of Rs. 4,280.06 lakhs (including Rs.1,377.11 lakhs during the year) thereon arising out of arbitration awards pronounced in favour of the Company. Against these awards, the customers have preferred appeals in the jurisdictional courts and the legal proceedings are going on. Pending the outcome of the said legal proceedings, the above amounts are being carried forward as receivable as the management believes that the final outcome of the appeals would be in favor of the Company based on the facts of the respective cases and is confident to recover the aforesaid claims in full.

11. Trade receivables aggregating Rs. 2,135.12 lakhs (previous year Rs 2,135.12 lakhs) are under arbitration proceedings. The management is confident that based on the facts of the respective cases; there is no uncertainty as regards their realization.

12. In respect of a project, based on the representation made by the Company to its customer, it has considered additional price increase impact of Rs.5,072.00 lakhs (Rs.5,250.00 lakhs upto March 31, 2014) in the contract value for billing to be made subsequent to March 31, 2015, considering Extension of Time (EOT) for the entre contract. The management is confident that EOT for the entre contract will be granted by the customer based on similar decisions taken in some other contracts and also based on the merits of the case.

13. The company has entered into a transact on amounting Rs 35.55 lakhs in the previous years requiring Central Government prior approval under Section 297 of the Companies Act, 1956. During the current year Company has fled for compounding under the relevant provisions of the Companies Act, 1956

14. The Company has entered into an EPC Contract with a Joint Venture during the previous year, which requires prior approval of Central Government under Section 297 of the Companies Act,1956. During the current year Company has fled for compounding under the relevant provisions of the Companies Act, 1956. During the year, the Company has recognised revenue of Rs.1,271.42 (Rs.2,254.64 lakhs), having approximate profit of Rs.8.89 (Rs.247.40 lakhs) from this contract.

15. The Company has entered into an EPC contract with a Joint Venture during the previous year for which the company had applied for prior approval under Section 297 of the Companies Act, 1956. However, in view of non-approval of the application fled by the Company in this regard by the Central Government, the Company has fled for compounding during the current year under the relevant provisions of the Companies Act, 1956. During the year, the Company has recognised revenue of Rs. 1282.44 (Rs. 1,532.02 lakhs), having approximate profit of Rs. 205.43 (Rs. 146.47 lakhs) from this contract.

16. During the previous year, based on technical and legal evaluation, the Company has revised the contract value of a project to bring it in line with the agreement signed with the client, which was not considered earlier. Consequently, sales for the year 2013-14 include an amount of Rs. 4,198.00 lakhs on account of the aforesaid revision in the contract value.

17. In accordance with the provisions of Section 135 of the Companies Act 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee. In terms of the provisions of the Act, the Company was to spend a sum of Rs. 21.36 lakhs towards the CSR activities during the year ended March 31, 2015. The CSR Committee has approved the deployment of such funds towards CSR initiatives of promoting health care through improved sanitation at various locations. During the year ended March 31, 2015, out of total eligible amount to be spent under CSR activities, the Company has paid Rs. 16.07 lakhs during the year and the balance amount of Rs. 5.29 lakhs shall be spent in subsequent year in accordance with the progress of the project being undertaken by Company.

18. Figures in bracket represent the previous year numbers and have been regrouped / rearranged wherever considered necessary to confirm to the figures presented in the current period.

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Mar 31, 2014

1.1 Security and repayment terms in respect of term loans from banks

a. Term loan of Rs. 2,500 lakhs (Previous Year Rs. 3,750 lakhs) carries interest Rs.13.25 % p.a. and is repayable in eight quarterly instalments of Rs. 312.50 lakhs each along with interest thereon by March 2016. The said loan is secured against a subservient charge on all the fixed assets and current assets (both present and future) of the Company and also by the personal guarantee of a Promoter Director of the Company.

b. Term loan of Rs. 833.33 lakhs (Previous Year Rs. 2,500 lakhs) carries interest Rs.13.75 % p.a. and is repayable in two quarterly instalments of Rs. 416.67 lakhs each along with interest thereon by 27th August 2014.

c. Term loan of Rs. 3,000 lakhs (Previous Year Rs. 3,000 lakhs) carries interest Rs.13.75 % p.a. and is repayable in quarterly instalments of Rs. 187.50 lakhs each along with interest thereon by June 2018.

The loan referred in (b) and (c) are taken from same lender and are secured against an exclusive charge over the Company''s landed property located at Gurgaon.

d. Term loan of Rs. 1,500 lakhs taken during the year carries interest Rs.13.50 % p.a. (I - Base plus spread Rs.3.5% p.a) and is repayable in 3 monthly instalments of Rs. 50 lakhs each and 18 monthly instalments of Rs. 75 lakhs each along with interest thereon by January 2016. The said loan is secured against an exclusive charge over the Company''s landed property located at Gurgaon ranking pari passu with other term loan. Further, loan is backed by the personal guarantee of the Managing director and the Chairman of the Company.

e. Overdue interest of Rs. 77.33 lakhs on term loans (disclosed in Note. 10 "Other Current Liabilites") has been paid subsequently.

4.2 Security and repayment terms in respect of term loans from financial Insttutons

a. Loan of Rs. 172.07 lakhs taken during the year from a Financial Insttuton carries interest Rs.14.50% p.a. and is repayable in remaining 29 equated monthly instalments.

b. Interest free loan of Rs. 64.53 lakhs taken during the year from a Financial Insttuton is repayable in 3 monthly instalments of Rs. 18.18 lakhs each and 1 instalment of Rs. 9.98 lakhs.

The loans referred in (a) and (b) above are secured against hypothecaton of respectve constructon equipments.

2.1 Deferred payment credits from banks and others are secured against hypothecaton of Vehicles / Constructon equipments purchased against such loans and are repayable in equated monthly instalments (ranging from 32 to 56) carrying interest rates ranging from 8.50% to 10% p.a.

2.3 Loan from a Body Corporate carries interest Rs.12.50% p.a. and is repayable in 3 instalments of Rs. 553.50 lakhs, Rs. 1,616.40 lakhs and Rs. 1,329.98 lakhs in the month of April''14, June''14 and November''14 respectvely. The loan is secured against the Bank Guarantee which, in turn, is secured by the same securites as are available to the bank with respect to cash credit facilites.

3. DEFERRED TAX LIABILITY (NET)

In terms of Accountng Standard - 22, net deferred tax asset (DTA) of Rs. 79.65 lakhs (DTA of Rs.478.97 lakhs) has been recognized in the accounts during the year and consequently the net Deferred Tax Liability (DTL) as at 31st March, 2014 stands at Rs. 347.35 lakhs (Rs. 427 lakhs).

4. SHORT-TERM BORROWINGS

a. Buyer''s credit is secured by hypothecaton of stocks and book debts of the Company, both present and future, and also by hypothecaton of certain Specific plant and machinery, furniture/fixtures & ofce equipments. It carries interest in the range of Libor plus 0.65% to Libor plus 0.80%.

b. Overdue interest of Rs.36.27 lakhs on the aforesaid loan (disclosed in the note. 10 "other current liabilites") has been paid subsequently.

c. Demand loans and cash credit and working capital facilites in Indian rupees are secured by hypothecaton of stocks and book debts of the Company, both present and future, hypothecaton of certain Specific plant and machinery, furniture/ fixtures & ofce equipments and also the mortgage of Company''s land situated at Mouje Dhanot, Gujarat and Pirancheri Village, Tamil Nadu. These loans are additonally secured by the guarantees of three promoter directors of the Company and corporate guarantee of SPM Engineers Ltd. The demand loans and cash credit and working capital facilites carry interest Rs.13.50% to 16.25% p.a.

d. Loans from bodies corporate carry interest Rs.12%p.a to 18% p.a.



5. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF-

(Rs. In Lakhs)

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

Claims against the Company not acknowledged as debts 1,070.72 1,704.54

Claims towards liquidated damages not acknowledged as debts by the Company

Against the above, debts of the like amounts are withheld by the customers. 7,049.47 6,242.42

However, the Company expects no liability to accrue on account of these claims.

Disputed demands

(a) Income Tax # - -

(b) Excise/Service Tax* 75.77 75.77

(c) Sales Tax/VAT* 10,752.60 6,432.92

(d) Guarantees

Performance Guarantees, given on behalf of Subsidiaries & Joint Ventures 5,579.12 3,130.60

Corporate Guarantees given to Banks for financial assistance extended to Subsidiaries and other bodies corporate 42,420.00 34,840.00

* In respect of above cases, based on favourable decisions in similar cases/legal opinions taken by the Company /discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the acton will succeed and accordingly no provision for liability has been made in the financial statements.

# Refer Note no. 39.

6. The Company has operatng leases for ofce premises that are renewable on a periodic basis and are cancellable by giving a Notice period ranging from one month to three months. There is no escalaton clause in the lease agreements. There are no restrictons imposed by lease arrangements. There are no subleases. There are no contngent rents.

The amount of rent expenses included in the Statement of Profit and Loss towards operatng leases aggregate to Rs. 293.17 lakhs (previous year Rs. 397.40 lakhs).

7. RELATED PARTIES

(a) Partculars of related partes where control exists

Subsidiary Companies

Subhash Kabini Power Corporaton Limited

SPML Industries Limited

SPML Energy Limited

SPML Infrastructure Limited

SPM Holding Pte. Limited

Binwa Power Corporaton Private Ltd

Awa Power Company Private Limited

IQU Power Company Private Ltd

Neogal Power Company Private Ltd

Luni Power Company Private Limited

Tons Valley Power Company Private Limited

Rupin Tons Power Company Private Limited

Utarkashi Tons Hydro Power Private Limited

Delhi Waste Management Ltd

Add Urban Enviro Ltd

Add Energy Management Co. Private Limited (Formerly SPML Semitech India Private.

Limited) w.e.f March 31, 2014

Madurai Municipal Waste Processing Co. Private. Limited

SPML Utlites Limited

Allahabad Waste Processing Co. Limited

Mathura Nagar Waste Processing Co. Private Limited

Mizoram Power Development Corporaton Limited

Bhilwara Jaipur Toll Road Private Limited

PT Sanmat Natural Resources

Aurangabad City Water Utlity Co. Limited (became associate w.e.f December 31, 2013)

Mizoram Infrastructure Development Co. Limited (w.e.f 25th March, 2014)

SPML Infraprojects Limited (w.e.f 25th February, 2014)

SPML Infra Developers Limited (w.e.f 24th February, 2014)

Bhagalpur Electricity Distributon Com P Ltd (w.e.f 29th May, 2013)

SJA Developers Private Limited

Synergy Promoters Private Ltd

(b) Other Related Partes with whom transactons have taken place during the year

Associates Companies

HHydro Comp Enterprises (India) Limited

Doon Valley Waste Management Private Limited

Jamshedpur Waste Processing Company Private Limited

Pondicherry Port Limited

Mizoram Mineral Development Corporaton Limited

SPML Bhiwandi Water Supply Infra Limited

SPML Bhiwandi Water Supply Management Limited

Aurangabad Jal Supply Soluton Private Limited

ADD Realty Limited

Aurangabad City Water Utlity Co. Limited (w.e.f 31st December, 2013)

Central Zone Water Services Private Limited (w.e.f 23rd November, 2013)

Joint Ventures

SPML-CISC JV

SPML - Simplex JV

SPML-HCIL JV

OM Metals Consortum JV

Siddharth- Mahaveer SPML –JV

KBL-SPML JV

Malviya Nagar Water Services Private Limited

"MVV Water Utlity Private Limited

(Through a Subsidiary)"

Gurha Thermal Power Co. Ltd

SUEZ -SPML JV

Key Management Personnel (kMP)

Mr. Subhash Chand Sethi Mr. Sushil Kumar Sethi Mr. Deepak Sethi

(c) Relatves of key Management PersonneL

Mrs. Maina Devi Sethi Mother of Chairman and Managing Director

Mrs. Preet Devi Sethi Wife of Anil Kumar Sethi

Mrs. Suman Sethi Wife of Chairman

Mr. Abhinandan Sethi Son of Chairman

Mrs. Sandhya Rani Sethi Wife of Managing Director

Mr. Rishabh Sethi Son of Managing Director

Enterprises owned by kMP''s or their relatves or whether the kMP''s have significantly infuence

Arihant Leasing & Holding Co. Limited

Rishabh Commercial Private Limited

Risabh Fire Management Private Limited

Abhinandan Enterprise Private Limited

Subhash Systems Private Limited

Internatonal Constructon Limited

SPM Engineers Limited

Zoom Industrial Services Limited

Meena Homes Limited

20Th Century Engineering Limited

Subhash Power Company Limited

SPML India Limited

Subhash Internatonal Private Limited

Sonal Agencies Private Limited

Add Eco Enviro Limited

Sanmat Power Company Private Limited

Meena Holdings Limited

Vidya Edutech Private Limited

Add Technologies (India) Limited

Sushil Kumar Sethi & Sons (HUF)

Pondicherry Special Economic Zone Company Limited

Sanmat Corporate Investments Private Limited

Bharat Hydro Power Corporaton

Sanmat Infra Projects (P) Limited

Om Metal-SPML Infra Project Private Limited

Acropolis Propertes Private Limited

Oxive Environmental Management Private Limited

Dia Infarlog Ltd

8. According to the Company, constructon actvity is a service actvity and therefore, in terms of para 5(ii)(c) of General Instructons for Preparaton of Statement of Profit And Loss as per Revised Schedule VI to the Companies Act, 1956, the gross income determined from constructon actvity has been given in the Note No. 19.

9. The following amount are due from subsidiaries, associates and companies in which directors are interested as on the balance sheet date:

10. (a) Gratuity plan (AS 15 Revised)

The Company has a Defined benefit gratuity plan. Every employee who has completed five years or more of service is enttled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is unfunded. The following table summaries the components of net benefit expenses recognised in the Statement of Profit and Loss and amounts recognized in the balance sheet:

11. The Company has claimed income tax benefits of Rs. 28,380.19 lakhs (Rs. 27,894.44 lakhs upto March 31, 2013) approx. having tax impact of Rs. 8,197.86 lakhs (upto March 31, 2013: Rs. 8,034.45 lakhs) including Rs. 163.41 lakhs (March 31, 2013 : Rs 552.41 lakhs) for the year under secton 80IA of the Income Tax Act, 1961, on constructon contracts for certain infrastructure projects executed on behalf of various departments / agencies of diferent State Governments during the financial years 2003-04 onwards. In the tax assessments for the financial years upto 2010-11, the above claims were initally disallowed by the Tax Authorites, but the appellate authority during the previous year allowed the aforesaid claims for the years 2005-2006 to 2009-2010. Accordingly, the Company feels that all such claims under Secton 80IA would be allowed for subsequent years also. The Company''s writ with the Honourable Calcuta High Court, challenging the validity of the retrospectve amendment in Secton 80IA, which, as per legal opinion obtained by the Company, is ultra vires to the main secton of the Income Tax Act, 1961, however, remains pending disposal. In view of the above 80IA deductons, the Company is not carrying MAT credit in the books.

12. Trade payables aggregatng Rs 2,622.40 lakhs (previous year Rs. 2,390.15 lakhs) consistng of numerous balances being unclaimed/unmoved since long (mostly more than three years) have been writen back during the year as the management believes that these amounts are no longer payable.

13(a). During the year, one of the client of the Company has completely foreclosed the contract which was partally of added in previous financial year. Pending initaton of the arbitraton, the management, based on the fact of the case is confdent to recover the receivables and net book value of fixed assets of Rs 1,904 lakhs and Rs. 1,608 lakhs respectvely.

14(b). In respect of above Contract, the Company on a prudent basis, has writen of an amount of Rs 3035.48 lakhs during the year, representng unbilled work in progress and other receivables in view of uncertainty as regards to its ultmate collecton.

15. In respect of a project, during the year, the Company on a prudent basis, has writen-of an amount of Rs 1,283.76 lakhs representng work in progress in view of uncertainty as regards its ultmate collecton.

16. Segment informaton

The Company is engaged in constructon actvites in India. Consequently, it has one reportable business segment i.e. "Constructon" and one reportable geographical segment i.e. "India".

17. The Company has recognised income of Rs. 12,520.34 lakhs during the year arising out of arbitraton awards pronounced in favour of the Company (including Rs. 10,952.02 lakhs in respect of arbitraton awards pronounced in earlier years) and Rs.2,902.94 lakhs as interest thereon upto March 31,2014, and also the arbitraton award of Rs 3,028.30 lakhs recognized in the previous year, both remaining outstanding as on March 31, 2014. Against these awards, the customers have preferred appeals in the jurisdictonal courts and the legal proceedings are going on. Pending the outcome of the said legal proceedings, the above amounts are being carried forward as receivable as the management believes that the final outcome of the appeals would be in favour of the Company based on the facts of the respectve cases and it is confdent to recover the aforesaid claims in full.

18. Trade receivables aggregatng Rs. 2,135.12 lakhs (previous year Rs 2,601.13 lakhs) are under arbitraton proceedings. The management is confdent that based on the facts of the respectve cases; there is no uncertainty as regards their realizaton.

19(a). The Company has entered into certain transactons aggregatng Rs.35.55 lakhs in the previous year requiring Central Government prior approval under Secton 297 of the Companies Act, 1956. The Company is in the process of filling necessary applicatons for obtaining the said approval.

20(b). The Company has entered into an EPC contract with a Joint Venture during the year, which requires prior approval of Central Government under secton 297 of The Companies Act, 1956. The Company has applied with appropriate authority for obtaining the requisite approval.

21(c). The Company has entered into an EPC contract with a Joint Venture, which requires prior approval under secton 297 of the Companies Act, 1956. In view of non-approval of the applicaton fled by the Company in this regard by the Central Government, the Company is now in the process of fling for compounding of ofences under the relevant provisions of the Companies Act. During the year, the Company has recognised revenue of Rs. 1,532.02 lakhs, having approximate Profit of Rs. 146.47 lakhs, from this contract.

22. In respect of a project, based on the representaton made by the Company to its customer, it has considered additonal price increase impact of Rs.5,250 lakhs (Rs.4,816.61 lakhs upto March 31, 2013) in the contract value for billing to be made subsequent to March 31, 2014, considering Extension of Time (EOT) for the entre contract. The management is confdent that EOT for the entre contract will be granted by the customer based on similar decisions taken in some other contracts and also based on the merits of the case.

23. During the year, based on technical and legal evaluaton, the Company has revised the contract value of a project to bring it in line with the agreement signed with the client, which was not considered earlier. Consequently, sales for the year include an amount of Rs. 4,198 lakhs on account of the aforesaid revision in the contract value.

24. The Board of Directors of the Company has approved the transfer of Company''s investments of the carrying value of Rs.18,322.41 lakhs in certain subsidiaries, associates and a joint venture, pertaining to waste, energy and power to its wholly owned subsidiaries; SPML Infra Projects Ltd and SPML Infra Developers Ltd. respectvely, at their respectve carrying values as part of its strategy to focus on improving the performance of the aforesaid businesses.

25. The Company has received approval from the Central government dated June 2, 2013 for payment of remuneraton to managerial person, notwithstanding the limit laid down in sub-secton (3) of secton 309 and the overall limit of 11% of the net Profit as laid down in sub secton (1) of secton 198 of Companies Act 1956.

26. Figures in bracket represent the previous year numbers and have been regrouped / rearranged wherever considered necessary.

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Mar 31, 2013

1. RELATED PARTIES

(a) Particulars of related parties where control exist

Subsidiary Companies Subhash Kabini Power Corporation Limited

SPML Industries Limited

SPML Energy Limited

SPML Infrastructure Limited

SPM Holdings Pte. Ltd.

Binwa Power Corporation (P) Limited

Awa Power Company (P) Limited

IQU Power Company (P) Limited

Neogal Power Company (P) Limited.

Luni Power Company (P) Limited

Tons Valley Power Company (P) Limited

Rupin Tons Power Company (P) Limited

Uttarkashi Tons Hydro Power (P) Limited

Delhi Waste Management Limited

ADD Urban Enviro Ltd

Madurai Municipal Waste Processing Co. (P) Ltd.

SPML Utilities Ltd.

Allahabad Waste Processing Co. Ltd.

Mathura Nagar Waste Processing Co. Pvt. Ltd.

Mizoram Power Development Corporation Ltd.

Bhilwara Jaipur Toll Road Private Limited

PT Sanmati Natural Resources

Aurangabad City Water Utility Co. Ltd

SJA Developers Private Limited (w.e.f 1st September, 2012)

Synergy Promoters Private Limited (w.e.f 1st September, 2012)

SPML Bhiwandi Water Supply Infra Ltd. ( up to 25th March 2013)

SPML Bhiwandi Water Supply Management Ltd. (up to 25th March 2013)

(b) Other Related Parties with whom transactions have taken place during the year

Associate companies Pondicherry Port Limited

Hydrocomp Enterprises (India) Limited

Doon Valley Waste Management Private Limited

Jamshedpur Waste Processing Company Pvt. Ltd. (w.e.f 1st August, 2012)

Mizoram Mineral Development Corporation Ltd.

SPML Bhiwandi Water Supply Infra Ltd. (w.e.f 26th March 2013)

SPML Bhiwandi Water Supply Management Ltd. (w.e.f 26th March 2013)

Aurangabad Jal Supply Solution Pvt. Ltd. (w.e.f 1st January, 2013)

ADD Realty Ltd.

Insituform Pipelines Rehabilitation Private Limited (upto 31st December, 2012)

Joint Ventures SPML - CISC JV

SPML - Simplex JV

SPML - HCIL JV

Om Metal Consortium

SPML - Degroment JV

Siddartha - Mahavir - SPML JV

KBL - SPML JV

MVV Water Utility Pvt. Ltd (w.e.f 12th September, 2013) (through a subsidiary company)

Malviya Nagar Water Services Pvt. Ltd. (w.e.f 19th September, 2012)

Key Management

Personnel (KMP)

Mr. Anil Kumar Sethi - Chairman (upto 28th May, 2012)

Mr. Subhash Chand Sethi - Chairman (w.e.f. 29th May, 2012)

Mr. Sushil Kumar Sethi - Managing Director

Mr. Deepak Sethi - Director

Mr. P. C. Sethi Father of Chairman, Vice Chairman and Managing Director

Mrs. Maina Devi Sethi Mother of Chairman, Vice Chairman and Managing Director

Mrs. Preeti Devi Sethi Wife of Anil Kumar Sethi (Chairman till 28th May, 2012)

Mrs. Vineetha Sethi Wife of Director

Mrs. Suman Sethi Wife of Chairman

Mr. Harshavardhan Sethi Son of Chairman

Mr. Abhinandan Sethi Son of Chairman

Mrs. Sandhya Rani Sethi Wife of Managing Director

Mr. Rishabh Sethi Son of Managing Director

Enterprises owned by KMPs or their relatives or whether the KMP''s have significant influence

Arihant Leasing and Holdings Ltd.

Rishabh Commercial Pvt. Ltd.

Rishabh Fire Management Pvt. Ltd

Abhinandan Enterprise Pvt. Ltd.

Subhash Systems Pvt. Ltd.

International Constructions Ltd.

SPM Engineers Ltd.

Zoom Industrial Services Ltd.

20th Century Engineering Ltd.

Subhash Power Company Ltd.

SPML India Ltd.

SubhashYurim Textiles Ltd.

Subhash International Pvt. Ltd.

Sonal Agencies Pvt Ltd.

ADD Eco Enviro Ltd.

Sanmati Power Company Pvt. Ltd.

Meena Holdings Ltd.

SPML Semitech India Pvt. Ltd.

VidyaEdutech Pvt. Ltd.

ADD Technologies (India) Ltd.

Sushil Kumar Sethi & Sons (HUF)

Poonam Chand Sethi (HUF)

Subhash Chand Sethi (HUF)

Anil Kumar Sethi & Sons (HUF)

Breeze Commodeal (P) Ltd.

Pondicherry SEZ Company Pvt. Ltd.

Sanmati Corporate Investments Pvt. Ltd.

Sanmati Infra Projects (P) Ltd.

Om Metal SPML Infra Project Pvt Limited

Acropolis Properties (P) Ltd.

2. According to the Company, construction activity is a service activity and therefore, in terms of para 5(ii)(c) of General Instructions for Preparation of Statement of Profit and Loss as per Revised Schedule VI to the Companies Act, 1956, the gross income determined from construction activity has been given in the Note No. 19.

3. The Company has claimed income tax benefits of Rs. 27,894.44 lakhs (Rs. 26,191.83 lakhs upto March 31, 2012) approx. having tax impact of Rs. 8,034.45 lakhs (March 31, 2012: Rs. 7,482.04 lakhs) including Rs. 552.41 lakhs (March 31, 2012 : Rs 574.40 lakhs) for the year, approx. under section 80IA of the Income Tax Act, 1961, on construction contracts for certain infrastructure projects executed on behalf of various departments / agencies of different State Governments during the financial years 2003-04 onwards. In the tax assessments for the financial years upto 2008-09, the above claims were initially disallowed by the Tax Authorities, but the appellate authorities during the year have allowed the aforesaid claims for the years 2005-2006 to 2008-2009. Accordingly, the Company feels that all such claims under Section 80IA would be allowed for subsequent years also. The Company''s writ with the Honorable Calcutta High Court, challenging the validity of the retrospective amendment in Section 80IA, which, as per legal opinion obtained by the Company, is ultra vires to the main section of the Income Tax Act, 1961, however, remains pending disposal.

4. Minimum Alternate Tax entitlement aggregating Rs. 2,322.99 lakhs (Rs. 2,051.67 lakhs upto March 31, 2012) (including Rs. 271.32 lakhs (March 31, 2012: Rs. 286.56 lakhs) for the year) has not been recognized in these accounts since the Company does not have convincing evidence that it would have sufficient taxable profits within the specified period in future to claim the above entitlements.

5. Trade payables aggregating Rs. 2,390.15 lakhs (Rs. 412.73 lakhs) consisting of numerous balances being unclaimed / unmoved since long (mostly more than three years) have been written back during the year as the management believes that these amounts are no longer payable.

6. During an earlier year, one of the clients of the Company had partially terminated a part of the contract with consequential damages. The Company has challenged the said termination in the Hon''ble Supreme Court. However, as a matter of prudence, the Company has revised the contract value and contract cost, as per the management''s best estimate and the expected loss has been duly provided for in the accounts. The Company has also lodged counter claims on the client and it does not expect any further loss arising out of such termination.

7. SPML CISC JV, a joint venture entity (JV) has foreclosed its underlying project. The JV has receivable in its books towards claims against the client as awarded by the arbitrator. Although the said client has disputed the award, yet the Company is confident of recovery of its investment in the JV.

8. Segment information

The Company is engaged in construction activities in India. Consequently, it has one reportable business segment i.e. "Construction" and one reportable geographical segment i.e. "India".

9. Pursuant to a settlement reached with the Insituform group, the Company has exited during the year from the Insituform Joint Venture together with a commitment to sell its shares in the associate Company, namely, Insituform Pipeline Rehabilitation Private Limited (IPRPL) at a nominal value and remission of receivables from Insituform JV. As a result, the shares of IPRPL have been sold by the Company to Insituform group for Rs. 0.01 lakhs resulting into a loss of Rs. 1,098.67 lakhs and also the receivables of Rs. 1,173.46 lakhs from Insituform group have been written off in the accounts.

10. Arbitration claims of Rs. 6,624.71 lakhs awarded in two cases in favor of the Company (including Rs. 3,596.41 lakhs awarded in an earlier year) have been recognized as income in these accounts, as the management feels that these awards have reached their finality, and it is confident to recover these arbitration claims in full.

11. Trade receivables aggregating Rs. 2,601.13 lakhs (Rs. 3,562.48 lakhs) are under arbitration proceedings. The management is confident that based on the facts of the respective cases; there is no uncertainty as regards their realization.

12. Materials at site includes stock of trading goods aggregating Rs. 451 lakhs (Rs.Nil)

13. The Company has entered into certain transactions aggregating Rs. 35.55 lakhs during the year requiring Central Government prior approval under Section 297 of the Companies Act, 1956. The Company is in the process of filing necessary applications for obtaining the said approval.

14. Figures in bracket represent the previous year numbers and have been regrouped / rearranged wherever considered necessary

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Mar 31, 2012

A. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The amount of per share dividend recognised as distributions to equity shareholders was Rs. Nil ( Rs. 0.50)

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

1.1 Security and repayment terms in respect of term loans from banks

a. Term loan of Rs. 60.76 lacs carries interest @ 13.75 % p.a and is repayable by June 2012 along with interest thereon. The said loan is secured against hypothecation of construction equipments purchased against such loans and personal guarantees of three promoter directors of the Company .

b. Term loan of Rs. 5,000 lacs carries interest @ 11 % p.a. and is repayable in sixteen quarterly installments of Rs. 312.50 lakhs each along with interest thereon by March 2016. The said loan is secured against a subservient charge on all the fixed assets and current assets (both present and future) of the Company and also by the personal guarantee of a Promoter Director of the Company.

c. Term loan of Rs. 4,166.67 lacs carries interest @ 11.25 % p.a. and is repayable in ten quarterly installments of Rs. 416.67 lakhs each along with interest thereon by 27th August 2014. The said loan is secured against an exclusive charge over the Company's landed property located at Gurgaon.

1.2 Deferred payment credits from banks and other Financial Institutions are Secured against hypothecation of Vehicles/ Construction equipments purchased against such loans and are repayable in equated monthly installments carrying interest rate ranging from 10% to 12%.

2. DEFERRED TAX LIABILITIES ( NET)

In terms of Accounting Standard - 22, net deferred tax asset (DTA) of Rs. 119.18 lakhs (DTA of Rs.395.40 lakhs) has been recognized in the accounts during the year and consequently the net Deferred Tax Liabilities ( DTL) as at 31st March, 2012 stands at Rs. 905.91 lakhs (Rs. 1,025.15 lakhs).

3.1 Cash Credit in foreign currency and buyer's credit are secured by hypothecation of stocks and book debts of the Company, both present and future, and also by hypothecation of certain specific plant and machinery, furniture/fixtures & office equipments.

3.2 Demand loans and cash credit and working capital facilities in Indian rupees are secured by hypothecation of stocks and book debts of the Company, both present and future, and hypothecation of certain specific plant and machinery, furniture/ fixtures & office equipments and also the mortgage of Company's land situated at Mouje Dhanot, Gujarat and pirancheri village , Tamil Nadu. These loans are additionally secured by the guarantees of three promoter directors of the Company and corporate guarantee of SPM Engineers Ltd.

4. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

(Rs. In Lakhs)

Claims against the Company not acknowledged as debts 2,398.96 2,439.64

Claims towards liquidated damages not acknowledged as debts by the Company Against the above, debts of the like amount are withheld by the customers.

Particees 2011-12 2011-12

However, the Company expects no liability to accrue on account of these claims. 7,247.34 8,389.19

Outstanding bank guarantees and letters of credit (including Rs.3,178.81 lakhs (Rs. 3,104.39 lakhs)

for joint ventures) 119,505.56 118,987.16

Disputed demands*

(a) Income Tax 3,130.99 1,979.74

(b) Excise/ Service Tax 75.77 75.77

(c) Sales Tax / VAT 2,803.95 2,609.94

Corporate guarantees given for Subsidiaries and other body corporate** 42,593.00 27,069.00

** Includes Rs. 900.00 lakhs (Rs. 900.00 lakhs) in relation to which the original title deeds of the property situated at 8/2, Ulsoor Road, Bangalore are lying with

Guwahati High Court as security on behalf of Bharat Hydro Corporation Limited.

* In respect of above cases based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

5. The Company has operating leases for office premises that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. There are no contingent rents.

The amount of rent expenses included in the Statement of Profit and Loss towards operating Leases aggregate to Rs. 640.11 lakhs (Rs. 631.62 lakhs).

* Include losses pertaining to earlier years and considered as prior period items in the accounts. Refer note no.25.

** Based on provisional Balance Sheet as certified and furnished by the management.

Capital Expenditure Commitments and Contingent Liabilities of the Joint Ventures -Rs. 60.63 lakhs (Nil).

Note: The above table does not include the amounts pertaining to a joint venture where the Company has renounced its risk and reward in the joint venture through supplementary agreement in favour of the joint venture partner for a specified consideration which has been accounted for upfront as Company's share of profit in the joint venture. Total such consideration recognized during the year is Rs. 267.54 lakhs (Rs. Nil).

7. According to the Company, construction activity is a service activity and therefore, in terms of para 5(ii)(c) of General Instructions for Preparation of Statement Of Profit And Loss of Schedule VI to the Companies Act, 1956, the gross income determined from construction activity has been given in the notes no. 19.

8. During the year, the Company has accounted for arbitration awards in respect of two projects, which were although awarded in its favour in earlier years, yet the validity thereof was challenged by the client in the Hon'ble Supreme Court, which has been quashed by the apex court on the grounds of expiry of limitation period. In terms of the award ordered by the arbitrator, the Company has recognized a sum of Rs. 1,238.92 lakhs which includes Rs. 696.01 lakhs towards interest and Rs. 542.91 lakhs towards loss of profit and compensation for extra work carried out by the Company, included under interest and other operating revenue respectively in the Statement of Profit & Loss.

9. The following amounts are due from subsidiaries, associates and Companies in which directors are interested as on the balance sheet date:

10. (a) Gratuity plans (AS 15 Revised)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is unfunded.

The following table summaries the components of net benefit expenses recognized in the Statement of Profit & Loss and the amounts recognized in the balance sheet:

11. The Company has claimed income tax benefits of Rs. 26,191.83 lakhs (Rs. 24,421.43 lakhs upto March 31, 2011) approx. having tax impact of Rs. 1,482.04 lakhs including Rs. 514.40 lakhs for the year, approx. under section 80IA of the Income Tax Act, 1961, on construction contracts for certain infrastructure projects executed on behalf of various departments / agencies of different State Governments during the financial years 2003-04 onwards. The tax assessments for the financial years upto 2008-09 are completed and the above claims have been disallowed by the Tax Authorities, in view of the retrospective amendment in Section 80IA vide the Finance Act '2010, against which the Company has filed appeals with the appellate authority. The Company has filed a writ with the Honorable Calcutta High Court, which has been admitted as well, challenging the validity of above retrospective amendment, which, as per legal opinion obtained by the Company, is ultra vires to the main section of the Income Tax Act, 1961. Pending disposal of the above writ by the High Court, no provision for income tax and interest thereon, amounting to Rs. 3,130.99 lakhs as demanded by the tax authorities, in this regard, has been made in the accounts and the same has been disclosed as contingent liability vide note no.21.

12. During the previous year, one of the client of the Company had prematurely terminated a part of the contract with consequential damages. The Company has challenged the said termination in the Hon'ble Supreme Court. However, as a matter of prudence, the Company has revised the contract value and contract cost, as per the management's best estimate and the expected loss has been duly provided for in the accounts. The Company has also lodged counter claims on the client and it does not expect any further loss arising out of such termination.

13. SPML CISC JV, a joint venture entity (JV) has foreclosed its underlying project. The JV has receivable in its books towards claims against the client as awarded by the arbitrator. Although the said client has disputed the award, yet the Company is confident of recovery of its investment in the JV.

14. SEGMENT INFORMATION

Business Segment: The business segments have been identified on the basis of the activities undertaken by the Company. Accordingly, the Company has identified 'Construction', 'Trading' and 'Wind Power' as the business segments.

Construction - Consists of execution of turnkey projects Wind Power - Consists of electricity generated from wind farms Trading - Consists of sale of unused construction material

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

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Mar 31, 2011

1. Contingent liabilities not provided for in respect of (Rs in '000)

As at As at

31st March, 2011 31st March, 2010

Claims against the Company not acknowledged as debts 243,964 27,156

Claims towards liquidated damages not acknowledged as debts by the Company 838,919 725,199

Against the above, debts of the like amount are withheld by the customers. However, the Company expects no liability to accrue on account of these claims.

Outstanding bank guarantees and letters of credit (including Rs. 310,439 thousands (Rs. 437,589 thousands) for joint ventures) 11,898,716 11,948,213

Disputed demands

(a) Income Tax 197,974 34,348

(b) Excise/ Service Tax 7,577 -

(c) Sales Tax/ VAT 260,994 260,994

Corporate guarantees given for Subsidiaries and other body corporate*. 2,706,900 2,817,300

* Includes Rs. 90,000 thousands (Rs. 90,000 thousands) in relation to which the original title deeds of the property situated at 8/2, ulsoor Road, Bangalore are lying with Guahati High Court as security on behalf of Bharat Hydro Corporation Limited.

2. The Company has operating leases for office premises that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. There are no contingent rent.

The amount of rent expenses included in Profit and Loss Account towards operating Leases aggregate to Rs. 63,162 thousands (Rs. 80,307 thousands).

3. In terms of Accounting Standard - 22, net deferred tax asset (DTA) of Rs. 39,540 thousands (DTA of Rs. 35,400)has been recognized in the accounts up to 31st March 2011 and consequently the net Deferred Tax Liabilities (DTL) as at March 31, 2011 stands at Rs. 102,575 thousands (Rs. 142,115 thousands).

4. Segment information

Business Segment: The business segments have been identified on the basis of the activities undertaken by the Company. Accordingly, the Company has identified 'Construction', 'Trading' and 'Wind Power' as the business segments.

Construction – Consists of execution of turnkey projects

Wind Power – Consists of electricity generated from wind farms

Trading – Consists of sale of unused construction material

Geographical Segment: The Company primarily operates in India and therefore the Company has one reporting geographical segment i.e. India. The particulars of segment information are as follows:

5. Related Parties

(a) Particulars of related parties where control exists

Subsidiary Companies Subhash Kabini Power Corporation Limited

SPML Industries Limited

SPML Energy Limited

SPML Technologies Ltd (ceased to be a subsidiary company w.e.f.. 01.01.2011)

SPML Infrastructure Limited

SPM Holdings Pte. Ltd.

Binwa Power Corporation (P) Limited

Awa Power Company (P) Limited

IQU Power Company (P) Limited

Neogal Power Company (P) Limited.

Luni Power Company (P) Limited

Tons Valley Power Company (P) Limited

Rupin Tons Power Company (P) Limited

Uttarkashi Tons Hydro Power (P) Limited

Delhi Waste Management Limited

Madurai Municipal Waste Processing Co. (P) Ltd.

SPML Urban Enviro Ltd.

SPML Utilities Ltd.

SPML Bhiwandi Water Supply Infra Ltd.

SPML Bhiwandi Water Supply Management Ltd.

Allahabad Waste Processing Co. Pvt. Ltd.

Mathura Nagar Waste Processing Co. Pvt. Ltd.

Bhilwara Jaipur Toll Road Private Limited (w.e.f 01.04.2010)

PT Sanmati Natural Resources (w.e.f 26.11.2010)

(b) Other Related Parties with whom transactions have taken place during the year

Associate companies Pondicherry Port Limited

HYDRO Comp Enterprises (India) Limited

OM Metal SPML Infra Projects Pvt. Ltd. (w.ef 10.05.2010)

Insituform Pipeline Rehabilitation (P) Ltd. (IPRPL)

Doon Valley Waster Management Private Limited (w.e.f 15.02.2011)

Joint Ventures SPML – CISC JV

SPML – Simplex JV

SPML JV - Instituform

SPML – HCIL JV

Om Metal Consortium

SPML – Degroment JV

SiddharthMahavir SPML JV

KBL – SPML JV (w.e,f 1.04.2010)

Key Management Personnel (KMP)

Mr. Anil Kumar Sethi – Chairman,

Mr. Subhash Chand Sethi – Vice Chairman and Managing Director

Mr. Sushil Kumar Sethi – Managing Director,

Mr. Deepak Sethi – Director

Relatives of Key Management Personnel

Mr. P. C. Sethi Father of Chairman, Vice Chariman and Managing Director

Mrs. Maina Devi Sethi Mother of Chairman, Vice Chariman and Managing Director

Mrs. Preeti Devi Sethi Wife of Chairman

Mrs. SumanSethi Wife of Vice Chairman and Managing Director

Mr. HarshavardhanSethi Son of Vice Chairman and Managing Director

Mr. AbhinandanSethi Son of Vice Chairman and Managing Director

Mrs. Sandhya Rani Sethi Wife of Managing Director

Mr. RishabhSethi Son of Managing Director

Relatives of Key Management Personnel

Enterprises owned or significantly influenced by key management personnel or their relatives

Arihant Leasing and Holdings Ltd.

Rishabh Commercial Pvt. Ltd.

Rishabh Fire Management Pvt. Ltd

Abhinandan Enterprise Pvt. Ltd.

Subhash Systems Pvt. Ltd.

Bharat Hydro Power Corporation Ltd.

International Constructions Ltd.

SPM Engineers Ltd.

Zoom Industrial Services Ltd.

20th Century Engineering Ltd.

Subhash Power Company Ltd.

SPML India Ltd.

Subhash International Pvt. Ltd.

Sonal Agencies Pvt Ltd.

VidyaEdutech Pvt. Ltd.

Sanmati Power Co. Pvt. Ltd.

SPML Reality Ltd.

SPML Keerthi Hole Power Co. Ltd.

Sonal Agencies Pvt Ltd.

Sanmati Homes Ltd.

SPML Semitech India Pvt. Ltd.

VidyaEdutech Pvt. Ltd.

SPML Technologies Ltd (w.e.f.. 01.01.2011)

SPML Industrial Park (Tamilnadu) Limited

Sushil Kumar Sethi (HUF)

Poonam Chand Sethi (HUF)

Subhash Chand Sethi (HUF)

Anil Kumar Sethi (HUF)

6. Quantitative information in respect of installed capacity, licensed capacity and goods manufactured and sold in relation to wind power

7. According to the Company, construction activity is a service activity and therefore, in terms of para 3(ii)(c) of Part II of Schedule VI to the Companies Act, 1956, the gross income determined from construction activity has been given in the schedule.

8. The Company is in the process of obtaining confirmations with respect to creditors and loans and advances. Adjustments, if any, arising out of such confirmations will be considered in subsequent period.

9. (a) Gratuity plans (AS 15 Revised)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is unfunded.

10. The Company has claimed 80IA benefits of Rs. 2,442,143 thousands (Rs. 2,052,698 thousands) approx. having tax impact of Rs. 690,764 thousands including Rs. 129,364 thousands for the year, approx. under Income Tax Act, 1961 on construction contracts for certain infrastructure projects executed on behalf of various departments/ agencies of different State Governments during the financial years 2003-04 onwards. The tax assessments for the financial years upto 2007-08 are already completed and the above claims have been fully allowed by the Tax Authorities, but in the tax assessment for the financial year 2008-2009, such claims have been disallowed. However, in-view of the recent amendment in the Finance Act '2010, the company has filed a writ with the Honorable Calcutta High Court, which has been admitted as well, challenging the validity of above retrospective amendment which as per legal opinion obtained, is ultra vires to the main section of the Act. Pending disposal of the above writ by the High Court, no provision in this regard has been made in the accounts.

11. During the year, one of the clients of the Company has prematurely terminated a part of the contract with consequential damages. The Company has challenged the said termination in the Hon'ble Supreme Court. However, as a matter of prudence, the Company has revised the contract value and contract cost, as per the management's best estimate and the expected loss has been duly provided for in the accounts. The Company has also lodged counter claims on the client and it does not expect any further loss arising out of such termination.

12. SPML CISC JV, a joint venture entity (JV) has foreclosed its underlying project. The JV has raised several claims against the client and accordingly the Company is confident of recovery of its investment in the JV.

13. Previous year's figures including those given in brackets, have been regrouped/ rearranged wherever considered necessary.

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Mar 31, 2010

1. Contingent liabilities not provided for in respect of

(Rs. in 000)

As at As at 31st March, 2010 31st March, 2009

Claims against the Company not acknowledged as debts 27,156 11,887

Claims towards liquidated damages not acknowledged as debts by the Company*.

Against the above, debts of the like amount are withheld by the customers. However, the Company 725,199 580,647 expect no liability to accrue on account of these claims.

Outstanding bank guarantees and letters of credit (including Rs. 437,589 thousands (Rs.473,409 11,948,213 11,804,268 thousands) for joint ventures)

Disputed Income Tax, Service Tax and sales tax demands under appeal 295,341 129,741

Corporate guarantees given for Subsidiaries and other body corporate (including Rs. 80,000 2,727,300 2,035,800 thousands (Rs. 80,000 thousands) for joint ventures)

* Includes Rs, 90,000 thousands (Rs. 90,000 thousands) in relation to which the original title deeds of the property situated at 8/2, ulsoor Road, Bangalore is lying with Guahati High Court as security on behalf of Bharat Hydro Corporation Limited.

(Rs. in 000)

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for 579,176 16,823 [Net of Advances]

3. The Company has operating leases for office premises that are renewable on a periodic basis and are cancelable by giving a notice period ranging from one month to three months. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

The amount of rent expenses included in Profit and Loss Account towards operating Leases aggregate to Rs 80,307 thousands (Rs. 65,036 thousands).

4. Segment information

Business Segment: The business segments have been identified on the basis of the activities undertaken by the Company. Accordingly, the Company has identified ‘Construction and ‘Wind Power as the business segments.

Construction – Consists of execution of turnkey projects Wind Power – Consists of electricity generated from wind farms Others – includes immaterial operating segments of the company.

5. Related Parties

(a) Particulars of related parties where control exists

Subsidiary Companies

Subhash Kabini Power Corporation Limited

SPML Industries Limited

SPML Energy Limited

SPML Technologies Ltd

SPML Infrastructure Limited

SPM Holdings Pte. Ltd.

Binwa Power Corporation (P) Limited

Awa Power Company (P) Limited

IQU Power Company (P) Limited

Neogal Power Company (P) Limited.

Luni Power Company (P) Limited

Tons Valley Power Company (P) Limited

Rupin Tons Power Company (P) Limited

Uttarkashi Tons Hydro Power (P) Limited

Delhi Waste Management Limited

Madurai Municipal Waste Processing Co. (P) Ltd.

SPML Urban Enviro Ltd.

SPML Utilities Ltd.

SPML Bhiwandi Water Supply Infra Ltd.

SPML Bhiwandi Water Supply Management Ltd.

Allahabad Waste Processing Co. Pvt. Ltd. (w.e.f. Jan 21, 2010)

(b) Other Related Parties with whom transactions have taken place during the year

Associate companies

Pondicherry Port Limited

Pondicherry SEZ Limited

HYDRO Comp Enterprises (India) Limited

Instituform Pipeline Rehabilitation (P) Ltd. (IRPL) (w.e.f. Aug 9, 2009)

Joint Ventures

Om Metal Consortium SPML - CISC JV SPML - Simplex JV SPML - Degroment JV Insituform - SPML JV SPML - HCIL JV Siddharth Mahavir SPML JV

Key Management Personnel (KMP)

Mr. Anil Kumar Sethi - Chairman,

Mr. Subhash Chand Sethi - Vice Chairman and Managing Director

Mr. Sushil Kumar Sethi - Managing Director,

Mr. Deepak Sethi - Director

Relatives of Key Management Personnel

Mr. P. C. Sethi Father of Chairman, Vice Chariman and Managing Director

Mrs. Maina Devi Sethi Mother of Chairman, Vice Chariman and Managing Director

Mrs. Preeti Devi Sethi Wife of Chairman

Mrs. Vineetha Sethi Wife of Director

Mrs. Suman Sethi Wife of Vice Chairman and Managing Director

Mr. Harshavardhan Sethi Son of Vice Chairman and Managing Director

Mr. Abhinandan Sethi Son of Vice Chairman and Managing Director

Mrs. Sandhya Rani Sethi Wife of Managing Director

Mr. Rishabh Sethi Son of Managing Director

Enterprises owned by KMPs or their relatives

Arihant Leasing and Holdings Ltd.

Rishabh Commercial Pvt. Ltd.

Abhinandan Enterprise Pvt. Ltd.

Subhash Systems Pvt. Ltd.

Bharat Hydro Power Corporation Ltd.

International Constructions Ltd.

SPM Engineers Ltd.

Zoom Industrial Services Ltd.

20th Century Engineering Ltd.

Subhash Power Company Ltd.

SPML India Ltd.

Subhash International Pvt. Ltd.

Sanmati Power Co. Pvt. Ltd.

SPML Reality Ltd.

SPML Keerthi Hole Power Co. Ltd.

Sonal Agencies Pvt Ltd.

Sanmati Homes Ltd.

SPML Semitech India Pvt. Ltd.

Vidya Edutech Pvt. Ltd.

SPML Industrial Park (Tamilnadu) Limited

Sushil Kumar Sethi (HUF)

6. According to the Company, construction activity is a service activity and therefore, in terms of para 3(ii)(c) of Part II of Schedule VI to the Companies Act, 1956, the gross income determined from construction activity has been given in the schedule.

7. The Company is in the process of obtaining confirmations with respect to debtors, creditors, loans and advances. Adjustments, if any, arising out of such confirmations will be considered in subsequent period.

8. The Company had entered into an agreement in the past to sell 15nos. of Windmills and an advance of Rs.99000 thousands was received there against. Since the above assets are hypothecated with a nationalised bank against loans obtained from them, the Company could not transfer these assets to the buyer. Accordingly, no adjustment has been made in the accounts for the above sale of assets and the same would be carried out in due course. The income and expenses in relation to these assets continue to be accounted for in the Companys Books.

9. (a) Gratuity plans (AS 15 Revised)

The Company have a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972. The scheme is unfunded.

10. The Company has claimed 80IA benefits of Rs.2,052,698 thousands (Rs. 1,235,414 thousands) approx. having tax impact of Rs. 561,400 thousands including Rs.183,900 thousands for the year, approx. under Income Tax Act, 1961 on construction contracts for certain infrastructure projects executed on behalf of various departments / agencies of different State Governments during the financial years 2003-04 onwards. The tax assessments for the financial years upto 2007-08 are already completed and the above claims have been fully allowed by the Tax Authorities. However, in-view of the recent amendment in the Finance Act ‘2010, the company has filed a writ with the Honorable Calcutta High Court, which has been admitted as well, challenging the validity of above retrospective amendment which as per legal opinion obtained, is ultra vires to the main section of the Act. The Company does not expect any tax liability in this regard and thus no provision thereof, has been made in these accounts.

11. Previous years figures including those given in brackets, have been regrouped/ rearranged wherever considered necessary.