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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Hindustan Construction Company Ltd.-இன் இயக்குநர் அறிக்கை

Mar 31, 2018

BOARD''S REPORT

To,

The Members of Hindustan Construction Co. Ltd.

1. Report

Your Directors have presented the 92nd Annual Report together with the Audited Financial Statements for the year ended March 31,

2018.

2. Financial Highlights

(As per IND AS)

Standalone (Rs, in crore)

Particulars

Year ended March 31, 2018

Year ended March 31, 2017

Income from Operations

4,575.08

4,195.94

Profit before Interest, Depreciation, Exceptional Items, Other Income and Tax

654.39

753.63

Less: Finance Costs

659.97

772.37

Depreciation

122.94

125.28

Exceptional Item

-

21.22

782.91

918.87

Add: Other Income

251.00

250.44

Add/Less: Exchange Gain/(Loss)

(10.51)

11.76

Profit before Tax

111.97

96.96

Less: Tax Expense

34.44

37.55

Profit/(Loss) after Tax

77.53

59.41

Add: Other Comprehensive Income / Loss

(11.64)

21.51

Total Comprehensive income carried to Other Equity

65.89

80.92

3. Dividend

As your Company has restructured its debts under the S4A Scheme it is necessary to conserve and optimise use of resources to promote the growth of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2018.

4. Allotment of Equity Shares & Optionally Convertible Debentures

During the year under review, the Company has allotted 47,59,291 Equity Shares of the Company of face value Rs,1/- each at an issue price of Rs, 41.61 per equity share (including premium of Rs, 40.61 per Equity Share) for an amount of Rs, 19.80 crore and 2,56,716 Optionally Convertible Debentures (OCDs) of face value Rs, 1000/- each for an amount of Rs, 25.67 crore to one Lender as per the terms of the S4A Scheme.

The present paid-up Equity Share Capital of the Company is

1,01,54,62,926 which comprises 1,01,54,62,926 Equity Shares of face value Rs, 1/- each.

5. Operations

The Income from Operations of the Company in the year is Rs, 4,575.08 crore as compared to Rs, 4,195.94 crore in the previous year. The profit before tax is Rs, 111.97 crore as compared to Rs, 96.96 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:

- Parwan Dam & Tunnel, Rajasthan Contract Value Rs, 673 crore

- Bangalore Metro Reach 5, Package 3, Karnataka Contract Value Rs, 797 crore

- Fast Reactor Fuel Cycle Facility, Kalpakkam, Tamil Nadu Contract Value Rs, 764 crore

- Pune Metro Corridor 1, Maharashtra Contract Value Rs, 497 crore

- Pune Metro Corridor 2, Maharashtra Contract Value Rs, 485 crore

The total balance value of works on hand as on March 31, 2018 is Rs, 19,188 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 4 bids amounting to approx. Rs, 6,052 crore (HCC share Rs, 3,257 crore). Tenders for 13 projects worth Rs, 16,297 crore (HCC share Rs, 13,437 crore) are expected to be submitted in the near future. The Company has also submitted a prequalification bid for 1 project worth over Rs, 1,200 crore which is under evaluation.

Operations of Subsidiaries i) HCC Infrastructure Company Ltd

HCC''s Infrastructure business develops and operates Road BOT assets. HCC Concessions Ltd. (HCON) is the holding company of all the SPVs, which has developed 6 projects over last decade, of which 2 have been divested since. Last year HCC Concessions'' two operational projects in the state of West Bengal, Baharampore-Farakka Highways Ltd (BFHL) and Farakka-Raiganj Highways Ltd (FRHL) earned operational revenue of '' 158 crore and '' 151 crore respectively on the backdrop of healthy traffic growth of around 13% each. Both projects have huge potential for growth considering further development of West Bengal and North-East India. The balance construction work in these two projects is being taken up and it is planned to complete FRHL in this fiscal and BFHL next year. Upon full completion, substantial revenue growth is expected due to enhancement of toll rates. The Elevated Highway project from Badarpur to Faridabad (BFTL) was terminated by the Company on September 1, 2017 due to Force Majeure event. In case of Raiganj-Dalkhola Highways (RDHL), due to lack of support from NHAI in confirming the related land delay cost overrun to the lenders, the project was terminated on March 31, 2017. For both BFTL and RDHL, with support from HCC Concessions, the said SPVs are pursuing the legitimate termination payment including the lenders'' dues along with other claims through arbitration.

The claims related to Narmada Bridge (NBTL) rehabilitation works, a closed project, is in advanced stage.

HCON has channelized its resources to rigorously follow up with NHAI for its legitimate rights and managing claims. Claims of various SPVs towards delay and cost escalations, force majeure events, change of scope and termination are under advanced stages of arbitration. In BFHL, an Arbitration Award of Rs, 448 crores was received in favour of SPV as compensation for delays in respect of land acquisition, utility shifting, increase in interest cost (IDC), loss of revenue and increase in other incidental costs for the delays occurred due to Authority''s default till August, 2015. Subsequent period claims for BFHL and other SPVs are being pursued. HCON is also evaluating offers from potential investors for buying majority stake in its Road Assets which will help in unlocking the value of investments as well as the money realized from such stake sale can be channelized in more productive use.

ii) Steiner AG, Switzerland

Steiner AG, one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the field of new construction, refurbishment and real estate development. Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.

Steiner AG has registered a revenue of CHF 806.4 million (Rs, 5,395 crore) in the financial year 2017-18 compared to CHF 820.6 million (Rs, 5.580 crore) in the previous year and a net profit of CHF 9.5 million (Rs, 64 crore) compared to a net profit of CHF 3.2 million (Rs, 21.7 crore) in the previous year. The Company secured fresh orders worth CHF 890 million (Rs, 6,011 crore). The order backlog is CHF 1.37 billion (Rs, 9,260 crore) at the end of the year. In addition to this, the Company has secured orders for CHF 394 million (Rs, 2,660.3 crore), where the contracts are yet to be signed. The closing cash balance of the Company was CHF 107 million (Rs, 737 crore) reflecting the Company''s steady financial performance and strong liquidity position.

Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs, 51.64 crore and Profit after tax of Rs, 0.27 crore in financial year 2017-2018. Please refer to Page 17 in the Management Discussion and Analysis Report for an overview of Steiner AG & Steiner India businesses.

iii) Lavasa Corporation Ltd. - Integrated Urban Development & Management

In 2017-18, Lavasa and its SPVs managed to sustain operations in the absence of any external financial aid. Operations were cut down to sustainable levels and focus was laid on cost and resource optimization and boosting revenue streams.

The Company''s persistent efforts for finding a solution for revival of the project involved project lenders involving Strategic Debt Restructuring (SDR) in September 2017. However, in view of RBI circular on ''Resolution of Stressed Assets - Revised Framework'', issued in the month of February 2018, Company and lenders were compelled to alter the plan of action. Company has been actively working on finding an investor / partner, with whom a resolution to debt, and project funding happens, and is under active discussion with credible third parties in this space. In the interim, city''s businesses continue to play their role in maximizing the value of Lavasa''s assets.

The city continues to be known as one of the favorite tourist destinations in Maharashtra with various attractions. Lavasa received over a million tourists in FY 2017-18. In the hospitality space, the four hotels operating within the city i.e. Mercure, Fortune, Waterfront Shaw and Ekaant Retreat continued to attract tourists and business guests and reported healthy average occupancies. The 1500 plenary capacity Lavasa International Convention Centre (LICC) hosted some grand conventions and conferences during the year serving clients like Forbes, Deloitte etc. Augmentation of room inventory in the city is expected to benefit both the hospitality and retail operators.

On the retail front, a significant area has already been leased to various outlets mainly in the F&B segment. The Dasve Public School, Ecole Hoteliere Lavasa (tie up with Ecole hoteliere de Lausanne, Switzerland) and Christ College are fully operational educational institutions.

Lavasa has initiated a number of development and empowerment programs for the local community like provision of treated drinking water to 18 villages, calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children, medical facilities to villagers and so on.

Lavasa''s first town Dasve is ready with all basic infrastructure. The Environment Management Plan (EMP) continues to be implemented as per our Environment Impact Assessment (EIA) Report submitted to Ministry of Environment, Forests & Climate Change (MoEF & CC), New Delhi. The preparation of thirteenth sixth-monthly Environmental Compliance Report for the period November 2017 to May 2018 and extension of Environment Clearance from MoEF is in progress. The Company had 10,514 acres of land including 455 acres of land on lease as of the end of the previous financial year ended March 31, 2017.

6. Subsidiaries and Associate Companies

During the year under review, the following changes have taken place with respect to Subsidiary and Associate Companies:

1) On January 22, 2018, Manufakt8048AG was incorporated as a wholly owned subsidiary of Steiner Promotions et Participations SA, which is a wholly owned subsidiary of Steiner AG.

2) Pune-Paud Toll Road Company Limited has been amalgamated/ merged with HCC Infrastructure Company Limited w.e.f. March 15, 2018.

3) Green Hills Residences Limited, a subsidiary of Lavasa Corporation Ltd (LCL) became a wholly owned subsidiary of LCL w.e.f. May 26, 2017.

4) Warasgaon Lakeview Hotels Limited, wherein LCLs shareholding was 19.2%, became an Associate Company of LCL w.e.f. June 9, 2017 and shareholding of LCL has increased to 24.56% on account of release of pledged shares.

5) Ecomotel Hotel Limited has ceased to be a subsidiary of LCL w.e.f. March 27, 2018. It has become an Associate Company of LCL and the consequent shareholding of LCL in the said Company has reduced to 40.04%.

The list of Subsidiaries and Associates of your Company as on March 31, 2018, forms a part of Form No. MGT-9, Extract of the Annual Return, which is annexed at Annexure VII to the Board''s Report.

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Ventures of the Company is provided in Form AOC-1 which forms a part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2018.

The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company

i.e. www.hccindia.com and can be accessed at http://www. hccindia.com/pdf/HCCPolicyfordeterminingMaterialSubsidiaries.pdf

7. Public Deposits

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

8. Particulars of Loans, Guarantees or Investments

Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 (''Act'') are given in the notes to the Financial Statements.

Also, pursuant to Paragraph 2 of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

9. Employee Stock Option Scheme (ESOP)

The ESOP Compensation Committee has granted 3,00,000 stock options during the year at an exercise price of '' 31.15 per stock option, subject to approval of the Members for amendment of the existing Employee Stock Option Scheme, in line with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014('' SEBI Regulations'').

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value '' 1 each.

During the year under review, no options got vested in the employees of the Company and 1,20,180 stock options got lapsed.

The particulars with regard to ESOP as on March 31, 2018 as required to be disclosed pursuant to the provisions of Companies (Share Capital and Debentures) Rules, 2014 read with SEBI Regulations, is set out at Annexure I to this Report.

10. Consolidated Financial Statements

In accordance with the Companies Act, 2013 and implementation requirements of Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 on accounting and disclosure requirements, and as prescribed by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiaries, Associates and Joint ventures of the Company in the prescribed form AOC-1 is annexed to this report.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the Members at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.

11. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI).

The report on Corporate Governance as prescribed in SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance alongwith a declaration signed by Group CEO & Whole-time Director stating that the members of the Board of Directors and Senior Management personnel have affirmed the compliance with code of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.

12. Directors

As per the provisions of Section 152 of the Companies Act,

2013, Mr. N. R. Acharyulu, Non Executive Director of the Company, is due to retire by rotation and, being eligible, has offered himself for re-appointment.

In accordance with Section 196, 197 read with Schedule V of the Companies Act, 2013, Mr. Arjun Dhawan was appointed as Group CEO & Whole-time Director of the Company for a period of 5 years w.e.f. April 1, 2017 (including terms of remuneration for 3 years) and the Members have approved his appointment and remuneration as stated above, at the 91st Annual General Meeting of the Company held on July 6, 2017.

Based on the approval of the Nomination and Remuneration Committee and the Board of Directors of the Company at their meetings held on January 31, 2018, Mr. Ajit Gulabchand who will be attaining the age of 70 years on June 28, 2018 was re-appointed as the Managing Director designated as Chairman & Managing Director of the Company, for a period of 5 years with effect from April 1, 2018 (including terms of remuneration for a period of one year i.e. April 1, 2018 to March 31, 2019 in accordance with Schedule V of the Companies Act, 2013) and approval is being sought from the Members vide special resolution at the ensuing Annual General Meeting.

The Independent Directors of the Company viz., Mr. Rajas R, Doshi, Mr. Ram P Gandhi, Mr. Sharad M. Kulkarni, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company confirming that they meet the criteria of Independence as prescribed under Section 49 of the Act and SEBI Listing Regulations.

The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014. Brief Profile of the Directors seeking appointment/re-appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

13. Key Managerial Personnel

Following persons are the Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

1. Mr. Ajit Gulabchand, Chairman and Managing Director;

2. Mr. Arjun Dhawan, Group Chief Executive Officer and Whole-time Director;

3. Mr. Amit Uplenchwar, Chief Executive Officer - HCC E & C, w.e.f. January 31, 2018;

4. Mr. Arun V. Karambelkar, President & Chief Executive Officer - HCC E&C, upto January 31, 2018;

5. Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO;

6. Mr. Venkatesan Arunachalam, Company Secretary w.e.f.

May 9, 2017;

7. Mr. Sangameshwar Iyer, Company Secretary upto May 8, 2017''.

The Board placed on record its appreciation for the services rendered by Mr. Arun V Karambelkar, during his tenure as CEO (E&C) of the Company.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2018 are provided in Form No. MGT-9, Extract of the Annual Return which is set out at Annexure VII to the Board''s Report.

14. Board Committees

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz.

Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.

During financial year 2014-15, in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at these meetings, are provided in the Corporate Governance Section of the Annual Report.

15. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company. The Board of Directors of your Company met 4 times during 2017-18. The meetings were held on May 4, 2017, August 3, 2017, November 2, 2017 and January 31, 2018.The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

16. Familiarization Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.

The details of the familiarization programme are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia.com/pdf/familiarisation_program_for_ independent_directors.pdf

17. Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, Annual Performance Evaluation of the Board, the Directors as well as of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Executive Committee of Board, Corporate Social Responsibility Committee and Employee Stock Option Compensation Committee has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

18. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 22, 2018, inter-alia, for:

i. Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii. Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.

iii. Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:

The Nomination and Remuneration Committee has laid down a well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2014, extract of which is attached to the Board''s Report, set out at Annexure II. The same is also available on the Company website and can be accessed by weblink http://www. hccindia.com/pdf/Nomination-and-Remuneration-Policy.pdf

20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees:

The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2014, extract of which is attached to Board''s Report set out at Annexure II. The same is also available on the Company website and can be accessed by weblink http://www.hccindia.com/pdf/Nomination-and-Remuneration-Policy.pdf

21. CSR Policy:

A brief outline of the Corporate Social Responsibility (CSR)

Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company in May 2014 and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure III of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The said CSR policy is also available on the Company website and can be accessed by weblink http://www.hccindia.com/pdf/HCC_Corporate_Social_ Responsibility_Policy.pdf

22. Related Party Transactions:

All the related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis. The related party transactions attracting the compliance under Section 177 of the Companies Act, 2013 and / or SEBI Listing Regulations were placed before the Audit Committee for necessary approval/review.

The routine related party transactions was placed before the Audit Committee for their omnibus approval. A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.

There are no transactions to be reported in Form AOC-2 in terms of Section 134 of the Act read with Companies (Accounts) Rules, 2014. Further the details of the transactions with related parties are provided in the Company''s financial statements in accordance with the Indian Accounting Standards.

The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http://www.hccindia.com/pdf/HCC_Policy_ for_Related_Party_Transactions.pdf

23. Business Responsibility Statement

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report, prepared on a voluntary basis covering the principle wise performance of the Company on the nine principles as per National Voluntary Guidelines (NVGs) is attached to this Annual Report.

24. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

(b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit of the Company for the year ended on that date.

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

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

(e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.

Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.

The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.

However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively. This response by Directors is based on the management note given under Para 30 of this report.

25. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

26. Transfer of Unclaimed Dividend and Equity Shares to Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to IEPF after the completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to IEPF Accordingly during the year under review, the Company has transferred the unclaimed dividend for the financial year 2009 10 of Rs, 16,04,376 to IEPF and 10,30,389 corresponding equity Shares of face value Rs, 1/- for a total face value of Rs, 10,30,389/-, as per the IEPF Rules to the IEPF account.

27. Particulars of Employees and other additional information.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been set out at Annexure IV to this Report.

The information as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)

Rules, 2014 will be provided upon request by any Member of the Company. In terms of Section 136 of the Companies Act, 2013, the Annual Report including the Board''s Report and the Audited Accounts are being sent to the Members excluding the same. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure V forming part of this Report.

29. Secretarial Standards

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

30. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter.

As per the existing appointment of M/s. Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, their remainder audit period covers the fifth and last year of their appointment up to the conclusion of the next Annual General Meeting to be held in the financial year 2019-20.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to their continued appointment and also a certificate from them to the effect that their existing appointment is in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under.

30. Statutory Auditors'' Remarks

a. Statutory Auditor''s Qualification :

The Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2018 contains the following qualification(s) :

As stated in Note 33(a) to the standalone financial statements, the Company''s non-current investments as at March 31 2018 include investments aggregating Rs, 630.83 crore in two of its subsidiaries; and non-current loans, other non-current financial assets and other current financial assets as at that date include dues from such subsidiaries aggregating Rs, 580.75 crore,

Rs, 43.42 crore and Rs, 6.63 crore, respectively, being considered good and recoverable by the management considering the factors stated in the aforesaid note including valuation report from an independent valuer. However, these subsidiaries have accumulated losses and their consolidated net worth is fully eroded. Further, these subsidiaries are facing liquidity constraints due to which they may not be able to realize projections made as per their respective business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these non-current investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements. Our audit opinion on the standalone financial statements for the year ended March 31, 2017 was also qualified in respect of this matter.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter

In our opinion, according to the information and explanations given to us and based on our audit procedure performed, the following material weakness has been identified in the operating effectiveness of the Company''s IFCoFR as at March 31, 2018:

The Company''s internal financial controls in respect of supervisory and review controls over process of determining of (a) carrying value of the Company''s non-current investments in its subsidiaries; and (b) recoverability of non-current loans, other non-current financial assets and other current financial assets due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the profit (financial performance including other comprehensive income) after tax.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the Company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2018, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI and the Company''s IFCoFR were operating effectively as at March 31, 2018.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended March 31, 2018, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

Management Note:

The Company, as at March 31, 2018, has (i) a non-current investment amounting to Rs, 612.40 crore (March 31, 2017: Rs, 612.40 crore), non-current loans amounting to Rs, 428.19 crore (March 31, 2017: Rs, 380.86 crore) and other non-current financial assets amounting to Rs, 24.35 crore (March 31, 2017: Rs, 21.72 crore) in HREL, a subsidiary, which is holding 68.70% share in Lavasa Corporation Limited (LCL), a step down subsidiary, and

(ii) a non-current investment amounting to Rs, 18.43 crore (March 31, 2017: Rs, 18.43 crore), non-current loans amounting to Rs, 152.56 crore (March 31, 2017: Rs, 131.56 crore), other noncurrent financial assets amounting to Rs, 19.07 crore (March 31, 2017: Rs, 16.45 crore) and other current financial assets amounting to Rs, 6.63 crore (March 31, 2017: Rs, 4.77 crore) in LCL. While such entities have incurred losses during their initial years and consolidated net-worth of both entities as at March

31, 2018 has been fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The net-worth of these subsidiaries does not represent their true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of these subsidiaries is substantially higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.

Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investments, recoverability of non-current loans, other non-current financial assets and other current financial assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.

31. Secretarial Audit:

Secretarial Audit for the financial year 2017-18 was conducted by M/s. BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report at Annexure VI wherein the following observation has been made by the Secretarial Auditor.

In respect of its Non- Convertible Debentures, for which listing got revived on July 7, 2017, the respective compliances under Regulation 50(1) and 60 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 were complied by the Company only from November 2, 2017.

Management Note:

The S4A Scheme was implemented for the Company in January 2017 and related formalities were under completion by few Lenders. In view of the same, respective debt compliances under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were reported/disclosed to the Stock Exchanges and the Debenture Trustees, as applicable, from November 2, 2017, which was the date of publication of the limited reviewed results for the quarter ended 30thSeptember 2017, during which quarter the NCDs listing got revived. Thereafter the Company has continued to comply with the debt related provisions of the said regulations in a timely manner.

32. Cost Audit :

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on August 3, 2017 had appointed M/s. Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2017-18. In terms of the provisions of Section 148 of the Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the Members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2017-18.

33. Risk Management:

The Company has established a well-documented and robust risk management framework under the provisions of Companies Act, 2013. The Company has constituted Risk Management Committee in place, which has been delegated with the authority by the Board to review and monitor the implementation of the Risk Management Policy of the Company.

Under this framework, risks are identified across all business processes of the Company on a continuous basis. Once identified, these risks are managed systematically by categorizing them into Enterprise Level Risk & Project Level Risk. These risks are further broken down into various subcategories of risks such as operational, financial, contractual, order book, project cost & time overrun etc. and proper documentation is maintained in the form of activity log registers, mitigation, reports; and monitored by respective functional heads. Review of these risk and documentation is undertaken by Risk Review Committee regularly at agreed intervals but at least once in a quarter and mainly during Quarterly project reviews

Risk Review Committee was successful in early identification of financial risk related to borrowing structure & cash flow mismatch due to late realization of claims lodged with clients. These risk were materially mitigated during the last year by implementing financial restructuring scheme introduced by Reserve Bank of India known as ''Scheme for Sustainable Structuring of Stressed Assets (S4A)'' with lenders successfully and issue of guidelines by Cabinet Committee of Economic Affairs (CCEA) for release of 75% of arbitration awards in favour of infrastructure companies, respectively. Company has been able to realize substantial monies under CCEA guidelines from its clients. Monies received have been used towards payments to lender thereby reducing lenders dues.

On introduction & implementation of Accounting Standard Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 which is applicable from last year, Company in its Notes to Accounts have disclosed risk management objectives and policies for managing financial and reporting risk. (Refer Note 40 to Accounts)

34. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

35. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act, 2013.

36. Vigil Mechanism Policy:

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccinida.com

37. Sexual Harassment:

HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. During the year 2017-18, no case of Sexual Harassment was reported.

38. Reporting of Frauds :

There have been no instances of fraud reported by the Statutory Auditors under Section 143 of the Act read with relevant Rules framed there under either to the Company or to the Central Government.

39. Significant and material Orders passed by the Regulators/Courts, if any:

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.

40. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report:

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.

41. Extract of Annual Return:

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is set out as Annexure VII and forms a part of this Report.

42. Acknowledgements:

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders, clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.

For and on behalf of Board of Directors,

Ajit Gulabchand

Chairman & Managing Director

Registered Office:

Hincon House, Lal Bahadur Shastri Marg Vikhroli (West),

Mumbai 400 083

Place : Mumbai

Date : May 3, 2018


Mar 31, 2017

1. Report

The Directors have presented the 91st Annual Report together with the Audited Financial Statements for the year ended March 31, 2017.

2. Financial Highlights (As per IND AS)

Standalone (Rs. In Crore)

Particulars

Year ended

Year ended

March 31, 2017

March 31, 2016

Income from Operations

4195.94

4190.89

Profit before Interest, Depreciation, Exceptional Items, Other Income and Tax

753.63

810.50

Less: Finance Costs

772.37

701.71

Depreciation

125.28

152.47

Exceptional Item

21.22

918.87

28.03

882.21

Add: Other Income

250.44

214.24

Add/Less: Exchange Gain/(Loss)

11.76

(2.11)

Profit before Tax

96.96

140.42

Less: Tax Expense

37.55

45.66

Profit/(Loss) after Tax

59.41

94.76

Add: Other Comprehensive Income

21.51

(9.04)

Total Comprehensive income carried to Other Equity

80.92

85.72

3. Dividend

Your Company has restructured its debts under the Scheme for Sustainable Structuring of Stressed Assets ("S4A Scheme") and therefore, it is necessary to conserve and optimize use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2017.

4. Operations

The Income from Operations of the Company in the year is Rs. 4195.94 crore as compared to Rs.4190.89 crore in the previous year. The profit before tax is Rs.96.96 crore as compared to Rs.140.42 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:

- Mumbai Metro Line 3, Package 2, Mumbai Contract Value: Rs.2523 crore,

- Railway Tunnel T-13 & Part T-14, Jammu & Kashmir Contract Value: Rs. 1750 crore,

- Bistan Lift Irrigation Scheme, Madhya Pradesh Contract Value: Rs.375 crore,

- Anji Khad Cable Stayed Bridge, Jammu & Kashmir Contract Value: Rs.369 crore,

- Parallel Safety Tunnel ofT 12, Jiribam Imphal Railway line, Manipur Contract Value: Rs. 368 crore,

- Residential Buildings, DAE Township, Anupuram, Kalpakkam, Tamil Nadu Contract Value: Rs.182 crore,

- Residential Buildings, DAE Township, Anushaktinagar, Mumbai Contract Value: Rs.159 crore

The total balance value of works on hand as on March 31, 2017 is Rs. 20,390 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 11 bids amounting to approx. Rs. 10,230 crore (HCC share Rs. 9,002 crore). Tenders for various packages for 28 projects worth Rs. 39,218 crore (HCC share Rs.26,661 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 16 projects worth over Rs.21,198 crore (HCC share Rs. 17,053 crore) which are under evaluation.

Operations of Subsidiaries

i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC).

As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its ninth year of successful operations with occupancy at 63%, while Accor''s Mercure is in its eighth year of successful operation with occupancy at 56%. In the tourism space, Lakeshore Water sports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Lavasa has tied up with former Indian cricketer and former chief of the BCCI Selection Committee, Mr. Sandeep Patil for building a Sports complex including a cricket stadium for corporate tournaments.

On the retail front, Restaurants like Smokin Joe''s, Venkys Xpress, Subway, Cafe Coffee Day, Baskin Robbins, All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchy and Indulge have commenced operations. Many other non F&B outlets such as Mapro and Charosa Wine Boutique have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.

Christel House Lavasa (renamed as Dasve Public School), EHL and Christ College are fully operational. KnowledgeVistas Limited (KVL), a K-12 school, is actively looking for JV partner to commence operation. Abhinav Shiksha Sansthan, New Delhi bought 1,25,000 sq.ft of land in Mugaon and is expected to build a 62,500 sq.ft school for academic year 20192020.

Women''s special weekend at Lavasa saw a good participation on International Women''s Day. There was a performance by mentalist Akshay Lakshmanan with his mind reading session, Mukund Seshadri with his session on financial planning, Dr. Shishir Shetty session on breast cancer awareness, Zumba sessions etc. Party night was hosted by RJ Urmin of Fever 104 FM.

Lavasa hosts glamour night for film actors, directors and producers from Marathi film industry with musical & dance performance by Ajit Parab, Pushkar Shrotri, Deepali Sayed, Manasi Naik & Nirmiti Sawant. Flea market; music & performance were organized at Dasve promenade for Christmas and New Year celebrations.

Lavasa has been an ideal location for ad & movie shoots, following are the brands which were shot at Lavasa for their TV commercial or still shoot: Skoda Rapid, Mercedes Benz, Blackberry Clothing, Brand Factory Clothing, Hero Bikes, Beat Car & Lotus Sun Cream.

Lavasa continued its focus on promoting tourism; we participated to showcase tourism at Lavasa in India International Travel &Tourism & Global Panorama Showcase. Over 1000 bikers braved the rain and travelled to Lavasa in June to celebrate World Motorcycle Day. Motoring World magazine conducted the jury round of their annual car and bike awards at Lavasa resulted in a six page story all of them featuring cars and bikes shot at Lavasa. Celebrations at Lavasa on Maharashtra Day, Independence Day weekend and initiative like the Dreamcatchers Summer camp were covered by all major publications and online portals. Launch of Jetovator, Segway and news about Lavasa bagging the PATWA Award were widely publicized.

Lavasa city now has a full-fledged operational Farmer''s market known as ''Hara Bazar''; a two screen Movie theatre; it has a fully operating Post office, courier service & a Hospital with pharmacy. Lavasa has a Petrol Pump, two bank branches along with ATMs, a Public Safety Centre with Fire Engine & crew, Police outpost, Tourist Information Center with Bus facility; Multilevel Car parking facility, Nature trail, rental housing for low income groups, simulated Golf Course facilities; Water Sports facility with latest "Jetovator", Adventure Sports facility, a modern Club with gym, Sports and Spa facilities and Public Transport system for citizens.

Infrastructure is a key to ensuring long-term livability; drinking water at Lavasa is fit for consumption without the need for additional filtration. Sewage is treated and is subsequently reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives.

Around the clock Lavasa Citizen Contact Centre has been operational since 2009 and is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customers'' needs and visitors'' requests. The CMS department meets on a monthly basis with a committee of villagers throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

Lavasa had 10,574 acres of land including 455 acres of land on lease by the end of last financial year i.e. March 31, 2016. This is reduced to 10,515 acres because 59 acres of land in Mugaon was restored to tribals by SDO, Maval during the year.

The Environment Management Plan is being implemented regularly. Regular monitoring of environmental aspects such as air & noise quality, water quality, soil & sediment quality, DG stack & noise quality and ecological monitoring of Dasve, Mugaon and Gadle Bandhara is being carried out by MoEF approved and NABL accredited laboratory.

All reports were found to be within the consent / prescribed limits of Maharashtra Pollution Control Board (MPCB).

As per the environment clearance requirement, the Environmental Compliance Report is being submitted to MoEF once in six months. A yearly environment statement, a requirement as per the consent document of Maharashtra Pollution Control Board (MPCB), is being submitted everyyear.

Application of Geo-mat & Coir-mat with pegging of bamboo nails is being done to control soil erosion due to heavy rainfall. Stump & shrub plantation activity has been undertaken and have planted 0.10 lakhs live stumps during the first spell of rains (June 2016).

Lavasa first town, Dasve, is ready with all basic infrastructures such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services. Till date 1250 properties are handed over to the City Management Services department for handing over to customers. The hostel block at Tower A is operational. The restoration works on major landslide affected area is in progress. Work on infrastructure & buildings for the second town of Mugaon are on hold.

Lavasa has also initiated a number of development and empowerment programs for the local community like provision of treated drinking water to 18 villages in the project area at 72 locations on a daily basis; calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.

ii) HCC Infrastructure Company Ltd

HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, is actively engaged in the development & operations of road transport through its subsidiaries, namely HCC Concessions Ltd (HCON) and HCC Operations & Maintenance Ltd (HOML), respectively. HCON is focused on developing and managing BOT road assets, primarily National Highway Projects under Public Private Partnership (PPP) and HOML operates and maintains the operational assets. Another subsidiary, HCC Power Ltd, has mandate to explore opportunities in the power sector to leverage HCC''s capabilities.

HCON has developed six NHAI road assets since its inception and the current portfolio consists of four NHAI road concessions constituting an asset base of Rs. 4,900 crore. The Company has been evaluating NHAI projects under Hybrid Annuity Model (HAM), a low risk model, for future investments, besides evaluating the opportunities to engage with potential players for offering end to end services for Toll, Operate & Transfer (TOT) model.

During the last fiscal year, the management team has been meticulously working towards achieving timely commissioning of one of its road project, arranging cost overrun financing, smooth operations and maintenance of existing assets and exploring raising of capital to meet the future needs.

Current Road Portfolio

HCON''s current portfolio comprises of four toll based projects, of which 3 projects together form a contiguous stretch of 250 km on NH-34 in the state of West Bengal and the 4th project is located on NH-2 in the National Capital Region of Delhi.

HCC''s development of NH-34 is among the largest PPP highway undertakings in the country. NH-34 is the backbone of the transport system in Bengal, which is the fourth most populous state in India and home to 90 million citizens.

NH-34 provides north-south connectivity between the capital region / ports of Kolkata & Haldia to north Bengal & north eastern states of India. The west side of the highway borders Bihar and Jharkhand and the eastern side run parallel to the Bangladesh border, where considerable import and export of goods occur. NH-34 is the only viable route for commercial traffic over major rivers such as Bhagirathi, Ganga, Mahananda and Nagri in the region. Furthermore, it forms part of the critical route to neighbouring Bhutan, Bangladesh and Nepal.

Baharampore-Farakka Highways Ltd (BFHL)

The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka Barrage) at Km 294.680.

The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,424 crore.

The project has witnessed traffic growth of 6.2% in the last fiscal year and the turnover for the year was Rs. 136 crore, an increase of 21% compared to the previous year.

As per the gazette notification for overloaded vehicles, BFHL has implemented the 10x tolling for overloaded vehicles on this project since August 2014 to mitigate additional maintenance costs required to be incurred due to plying of overloaded vehicles.

After demonetization of currency notes of Rs. 500 and Rs. 1,000, based on directive from Government of India, the toll collection of the project stopped from November 8, till December 2, 2016. A claim for recovery of Rs.9.35 crore on this account has been submitted to NHAI.

The final completion of the project is expected by Q2/ Q3 of financial year 2018-2019, largely due to material defaults by NHAI in providing land on a timely basis. The work on the Baharampore bypass is underway and the company is working with the authority and district administration to resolve all encumbrances along the right of way.

Farakka-Raiaani Highways Ltd (FRHL)

The Company commenced commercial operations of its Rs.1,720 crore Farakka Raiganj Highways Ltd (FRHL) in October 2016. FRHL covers the busiest section of NH-34 and passes through major towns such as Farakka, Kaliachawk, Malda, and Gajol, besides being the only link over the river Ganges in the region. The project has a concession period of 30 years, including construction period of 30 months.

The commercial operations of this project commenced on 19th Oct 2016 for 80 Km. Post that travel time for commuters in FRHL has been reduced significantly, by approximately 5-6 hours during peak hours. The construction of FRHL has involved over 130 structures including 9 Major Bridges, 22 Minor Bridges, 5 Underpasses and 2 Toll Plazas, with material coordination alongside NHAI and numerous State agencies.

The average daily toll collection has been Rs.47 lakh since start of toll collection.

After demonetization of currency notes of Rs. 500 and Rs.1,000, based on directive from Government of India, the toll collection of the project stopped from 8th Nov till 2nd Dec 2016. A claim for recovery of Rs.9.82 crore on this account has been submitted to NHAI.

The final completion of the project is expected by Q2/ Q3 of FY18. Entire land has been made available by NHAI and the work is progressing well.

Raiaani-Dalkhola Highway Ltd (RDHL)

This is the north-most section of NH-34 and connects to NH-31 at Dalkhola.

Land acquisition delay of about 6 years led to substantial increase of project cost. RDHL has filed its claims of Rs.615 crore against NHAI The Company made its best efforts to arrange cost overrun financing in order to restart the project. In spite of prolonged delay in land acquisition and defaulting on crucial requirements of Concession Agreement, NHAI was not ready to acknowledge the increase in project cost for termination benefits due to which lenders consortium has expressed their inability to fund the cost overrun. NHAI took a stand of terminating the project and has issued notice on March 31, 2017.

The Company is evaluating all options either to revive the project or to recover its dues from NHAI either through Arbitration or amicable settlement.

Delhi Faridabad Elevated Expressway (dfskvwav™)

The Delhi Faridabad Elevated Expressway (dfskyway™) is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur.

The Company''s revenues have been falling short of its projections due to the existence of toll free local road, which is being used by the long distance commercial vehicles to escape paying toll charges and violates the spirit of the Concession Agreement.

BFTL also suffered a material impact due to a Supreme Court order for collecting Environmental Compensation Charge (ECC) from commercial vehicles entering New Delhi (thereby discouraging their entry into the capital), resulting in a substantial dip of ~40% in commercial vehicles. This has unfortunately caused a devastating impact and political event by permanently curtailing revenues.

In parallel, BFTL had discussions with its lenders to find a long term sustainable solution to the cash flow issues of the project. Consortium of Lenders invoked Strategic Debt Restructuring ("SDR") in the project. However, the SDR process could not be completed due to pending final approvals from a couple of Banks and NOC from NHAI.

After demonetization of currency notes of '' 500 and '' 1,000, based on directive from Government of India the toll collection of the project stopped from November 8, 2016 till December 2, 2016. A claim of Rs.4.21 crore has been submitted to NHAI for the same.

To bring long lasting solution to the project, the Company, after seeking consensus from lenders, is ready for going ahead with option of either terminating the project and pursue claims through Arbitration or mutually foreclose the project in discussion with NHAI.

iii) Steiner AG, Switzerland

Steiner AG (Steiner), one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the fields of new constructions, refurbishment and real estate development. Since 2010, Steiner has been part of the your Company. HCC owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.

Steiner, established in 1915, has completed more than 1,500 residential construction projects, and have built nearly 600 commercial properties, over 45 hotels, around 200 infrastructure facilities, among them universities, schools, hospitals, nursing homes, rehabilitation facilities, retirement homes and prisons. Steiner ranks among the market leaders in Switzerland and aims for excellence in its environmental, health and safety performance. Its client and process orientation is driven by the focus on quality and on providing cost-effective solutions. Steiner fulfils current quality management criteria and is certified as confirming to ISO 9001, ISO 14001 and OHSAS 18001. Steiner''s head office is in Zurich and it has branches in Basel, Berne, Geneva, Tolochenaz, Lucerne and St. Gall.

Its subsidiary, Steiner India Ltd, markets Swiss knowhow for the emerging real estate market from its base in Mumbai.

Steiner AG has registered a revenue of CHF 820.6 million (Rs. 5,580 crore) compared to CHF 636.8 million (Rs. 4255 crore) in the previous year and a net profit of CHF 3.2 million (Rs. 21.7 crore) compared to a loss of CHF 4.9 million (Rs. 33 crore) in the previous year. The Company secured fresh orders worth CHF 927 million (Rs. 5,977 crore). The order backlog was CHF 1.43 billion (Rs. 9,200 crore) at the end of the year. In addition to this, the company has secured orders for CHF 700.0 million (Rs. 4,515.7 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 95.6 million (Rs. 617 crore) reflecting the company''s steady financial performance and strong liquidity position.

Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs.51 crore and loss of Rs.2.9 crore in financial year 2016-2017

5. Subsidiaries and Associate Companies

During the year under review, the following changes have taken place with respect to Subsidiary Companies and Associate Companies, as the case may be applicable :

a) Kart Racers Limited, a step-down subsidiary Company, has ceased to be a wholly owned subsidiary of Lavasa Corporation Limited w.e.f. June 3, 2016 and continues to be a subsidiary of Lavasa Corporation Limited.

b) Highbar Technologies FZ LLC, a step-down subsidiary Company, was de-registered w.e.f. July 31, 2016.

c) HighbarTechnocrat Limited (previously known as Osprey Hospitality Limited),a step-down subsidiary of the Company, has ceased to be subsidiary of Lavasa Corporation Limited with effect from August 8, 2016. It has become an Associate Company of Highbar Technologies Limited w.e.f. December 12, 2016 wherein 49% of its shareholding is held by Highbar Technologies Ltd.

d) Warasgaon Lakeview Hotels Limited, a step-down subsidiary Company, has ceased to be an Associate Company of Lavasa Corporation Limited w.e.f. March 14, 2017 and the consequent shareholding of Lavasa Corporation Limited in the said Company has reduced to 19.2%.

e) During the year under review SNC Valleiry Route de Bloux. wholly owned subsidiary of Steiner Leman SAS, got merged with Steiner Leman SAS, a step-down subsidiary of the Company, as part of restructuring process.

As on March 31, 2017, the list of Subsidiaries and Associate Companies of your Company is as follows:-

Subsidiary Companies

1. Western Securities Ltd

2. HCC Aviation Ltd

3. HCC Construction Ltd

4. Highbar Technologies Ltd

5. HCC Mauritius Enterprises Limited

6. HCC Mauritius Investment Limited

7. Steiner AG

8. Steiner Promotions et Participations SA

9. VM ST AG

10. Eurohotel SA

11. Steiner (Deutschland) GmbH

12. Steiner Leman SAS

13. Steiner India Ltd

14. HCC Infrastructure Company Ltd

15. Dhule Palesner Operations & Maintenance Ltd

16. HCCPowerLtd

17. HCC Energy Ltd

18. HCCOperations&MaintenanceLtd

19. HCC Real Estate Ltd

20. HRL Township Developers Ltd

21. HRL (Thane) Real Estate Ltd

22. NashikTownshipDevelopersLtd

23. Maan Township Developers Ltd

24. Charosa Wineries Ltd

25. Powai Real Estate Developers Ltd

26. HCC Realty Ltd

27. *Pune-Paud Toll Road Company Ltd

28. Panchkutir Developers Ltd

29. Lavasa Corporation Ltd

30. Lavasa Hotel Ltd

31. Lakeshore Watersports Company Ltd

32. Dasve Convention Centre Ltd

33. Dasve Business Hotel Ltd

34. Dasve Hospitality Institutes Ltd

35. LakeviewClubsLtd

36. Dasve Retail Ltd

37. Full Spectrum Adventure Ltd

38. Lavasa Bamboocrafts Ltd

39. My City Technology Ltd

40. Reasonable Housing Ltd

41. Future City Multiservices SEZ Ltd

42. Rhapsody Commercial Space Ltd

43. Valley View Entertainment Ltd

44. Warasgaon Tourism Ltd

45. Our Home Service Apartments Ltd

46. Warasgaon Power Supply Ltd

47. Sahyadri City Management Ltd

48. Hill City Service Apartments Ltd

49. Warasgaon Infrastructure Providers Ltd

50. Nature Lovers Retail Ltd

51. Warasgaon Valley Hotels Ltd

52. Rosebay Hotels Ltd

53. Mugaon Luxury Hotels Ltd

54. Warasgaon Assets Maintenance Ltd

55. Hill View Parking Services Ltd

56. Verzon Hospitality Ltd

57. Kart Racers Limited

58. HCC Concessions Ltd

59. Narmada Bridge Tollway Ltd

60. Badarpur Faridabad Tollway Ltd

61. Baharampore - Farakka Highways Ltd

62. Farakka - Raiganj Highways Ltd

63. Raiganj - Dalkhola Highways Ltd

64. Spotless Laundry Services Ltd

65. Green Hill Residences Ltd

66. Whistling Thrush Facilities Services Ltd

67. Ecomotel Hotel Limited

Associate Companies

1. Knowledge Vistas Limited

2. Evostate AG

3. Projektentwicklungsges, Parking KunstmuseumAG.

4. MCR Managing Corp. Real Estate AG

5. Highbar Technocrat Limited

6. Nirmal BOT Limited

7. Andromeda Hotels Limited

8. Bona Sera Hotels Limited

9. Apollo Lavasa Health Corporation Ltd

10. Starlit Resort Ltd

* A scheme of Amalgamation has been filed jointly by HCC Infrastructure Co. Ltd and Pune-Paud Toll Road CompanyLtd (PPTRCL) foramalgamation ofPPTRCL with HCC Infrastructure Co. Ltd, before the National Company Law Tribunal at Mumbai, vide Company Application on March 31, 2017 as per Section 230 to Section 232 of the Companies Act, 2013 and the same is pending for admission.

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company forms part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2017.

The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/HCC_Policy_for_ determining_Material_Subsidiaries.pdf

6. S4A Scheme Implementation /Increase in Share Capital

The Company had availed certain financial facilities ("Facilities") under the Reserve Bank of India Corporate Debt Restructuring ("CDR") mechanism whereby the debt obligations of the Company were restructured on the terms and conditions set out in the Master Restructuring Agreement dated June 29, 2012 executed amongst the ICICI Bank (as the Monitoring Institution), the Lenders and the Company ("CDR MRA").

Despite availing the restructuring of the Facilities under the CDR mechanism, the Company was facing liquidity issues and challenges in debt servicing due to inter alia slower than envisaged recovery in the economy and infrastructure sector and increased interest cost for the Company due to increase in the working capital requirement and non-realization of claims / receivables. This has resulted in a gap of cash flow timing mismatch between claims realization (including interest) and debt servicing. If such cash gap is left unaddressed, the Company will face challenges in the execution of its order book and also in servicing of its debt.

Accordingly, in order to bridge the aforementioned cash flow timing mismatch, the Lenders deliberated various solutions to address the aforementioned liquidity issues and recommended the Scheme for Sustainable Structuring of Stressed Assets ("S4A Scheme") introduced by the Reserve Bank of India ("RBI") pursuant to its circulars dated June 13, 2016 and as amended further on November 10, 2016 ("S4A Circulars").

The Lenders in their Joint Lender''s Forum meeting ("JLF") held on July 8, 2016 deliberated on the various options and agreed to explore the recommendation of the Monitoring Committee for implementing the S4A Scheme for the Company. Pursuant to the JLF held on July 12, 2016, the Lenders decided to adopt the S4A Scheme with the Reference Date as July 12, 2016 and at the JLF held on September 7, 2016 they agreed to convert part of their entire debt exposure ("Part B Debt of HCC S4A Scheme") to Equity shares and Optionally Convertible Debentures (OCDs) ("S4A Securities") towards implementation of the S4A Scheme and the same was approved by Overseeing Committee constituted by RBI (OC) on November4, 2016 ("HCC S4A Scheme/Scheme").

Pursuant to the implementation of the S4A Scheme and in accordance with and as specified in the financing documents executed by the Company with, inter alia, the Lenders (hereinafter referred to as the "S4A Agreements/ S4A Documents"), the shareholders at the Extraordinary General Meeting (EGM) of the Company held on January 5, 2017 approved the offer and issue of Equity Shares representing 24.44% in aggregate of the expanded share capital of the Company and Optionally Convertible Debentures (OCDs) of face value Rs.1000 each on Preferential Basis, to the Lenders as per applicable laws and extant regulations, based on the respective Lender''s subscription for the Securities of the Company.

During the year under review, for the purpose of allotment of S4A Securities and in accordance with the shareholders approval at the EGM of the Company held on January 5, 2017, the Authorized Share Capital of the Company was increased to Rs.135,00,00,000 (Rupees One Hundred Thirty Five Crore Only) divided into 125,00,00,000 (One Hundred Twenty Five Crore) Equity Shares of Rs.1 each (Rupee One Only) and 1,00,00,000 (One Crore) Redeemable Preference Shares of Rs.10 each (Rupees Ten only),

As per the terms of the S4A Agreements executed between Company and the Lenders, in respect of Lenders who had completed the process of conversion of debt into Equity Shares and/or OCDs of the Company under the HCC S4A Scheme, and in accordance with the shareholders approval at the EGM of the Company held on January 5, 2017, the Company has issued and allotted 23,15,44,729 Equity shares of Rs.1 each, in aggregate, representing 22.91% of the Expanded Share Capital of the Company, at an issue price of Rs.34.92 per Equity Share (including premium of Rs.33.92 per Equity Share) for an amount aggregating Rs.809 crore and 1,44,14,874 Optionally Convertible Debentures (OCDs) of face value Rs.1000 each, in aggregate, for an amount aggregating Rs.1441 crore to 27 Lenders under the HCC S4A Scheme, in two tranches, on January 6 and 19, 2017, in accordance with Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (''SEBI ICDR Regulations") and Section 42, 62 of the Companies Act, 2013 and the rules made there under.

The S4A Scheme was successfully implemented for the Company as more than 50% of lenders by number holding more than 75% by value, participated in the Scheme and thereupon Company has made the allotment of S4A securities to the respective Lenders.

Post S4A Scheme implementation, the present paid up Equity Share Capital of the Company is Rs.101,07,03,635 which comprises 101,07,03,635 Equity shares of face value Rs.1 each.

Out of the total 30 lenders under S4A Scheme, some of the remaining Lenders who had not participated in the S4A Scheme so far, have thereafter agreed to subscribe to the S4A securities under the Scheme and accordingly with necessary shareholders approval at the forthcoming Annual General Meeting of the Company, the Company will proceed to issue and allot the corresponding S4A securities to the respective Lenders as per extant regulations in force.

7. Public Deposits

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

8. Particulars of Loans, Guarantees or Investments

Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Also, pursuant to Paragraph 2 of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

9. Employee Stock Option Scheme (ESOP)

As on March 31, 2017, 1,20,180 stock options are outstanding, in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, no options got vested in the employees of the Company. 15,34,450 stock options got lapsed between April 1, 2016 and March 31, 2017.

The particulars with regard to the ESOP as on March 31, 2017 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.

10. Consolidated Financial Statements

In accordance with the Companies Act, 2013 and implementation requirements of Indian Accounting Standards (''IND-AS'') Rules on accounting and disclosure requirements, which is applicable from current year, and as prescribed by Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiary and joint venture in the prescribed form AOC-1 is annexed to this annual report.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the shareholders at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.

11. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India (SEBI).

The report on Corporate Governance as prescribed in Schedule V(C) of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance along with a declaration signed by the Chairman and Managing Director stating that the members of the Board of Directors and Senior Management personnel have affirmed the compliance with code of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.

12. Directors

As per the provisions of Section 152 of the Companies Act, 2013, Mr. N. R. Acharyulu (DIN 02010249), Non Executive & Non Independent Director of the Company, is due to retire by rotation. Mr. N. R. Acharyulu, being eligible, offers himself for re-appointment.

Mr. Bhalchandra R. Sule, ex-Director passed away on January 31, 2017. The Board of Directors has expressed its deep regret and offered condolences on the sad demise of Mr. Sule.

Mr. Bhalchandra R. Sule was a Director in the Company for a long time from 1993 to 2006. The Board also placed on record the invaluable contribution of Late Mr. B. R. Sule, to the Board and the Company during his tenure of Directorship with the Company.

Mr. Rajgopal Nogja was the Group COO and Whole-time Director up to May 2, 2016 and thereafter was the Group CEO of the Company from May 3, 2016 to March 31, 2017.

The Board placed on record its appreciation for the valuable contribution of Mr. Rajgopal Nogja during his tenure with the Company.

Pursuant to the resignation of Mr. Rajgopal Nogja as the Group CEO with effect from March 31, 2017 and based on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on February 2, 2017, appointed Mr. Arjun Dhawan (DIN : 1778379) as Group Chief Executive Officer (CEO) & Additional Director of the Company w.e.f. April 1, 2017 in accordance with Section 203 and Section 161 of the Companies Act, 2013 read with Article 88 of the Articles of Association of the Company respectively.

Subject to Members approval, the Board also appointed Mr. Arjun Dhawan as Group CEO & Whole-time Director of the Company for a period of 5 years w.e.f. April 1, 2017, In accordance with Section 196 of the Companies Act, 2013.

Prior to this appointment, Mr. Arjun Dhawan was the President & CEO of HCC Infrastructure since November 2009.

As an Additional Director, Mr. Arjun Dhawan shall hold office up to the date of the ensuing Annual General Meeting.

The Company has received a Notice under Section 160 of the Companies Act, 2013, from a member signifying an intention to propose Mr. Arjun Dhawan, as a candidate for the office of Director at the forthcoming Annual General Meeting.

The term of appointment of the Independent Directors of the Company viz., Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, is uptil the ensuing Annual General Meeting of the Company. Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that, they meet the criteria of Independence as prescribed for continuing as Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.

Based on the performance evaluation of these Directors and after reviewing the declarations submitted by Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, the Board of Directors were of the opinion that Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, both continue to meet with the criteria of independence as per the provisions of Section 149(6) of the Companies Act, 2013 and rules made there under and also meet with the requirements of Regulation 16(b) of the SEBI Listing Regulations and are also independent of the management and accordingly have proposed their re-appointment as Independent Directors of the Company, for a term of three consecutive years each, up to the conclusion of the 94th Annual General meeting of the Company in the calendar year 2020, subject to the Members approval.

The Company has received a Notice under Section 160 of the Companies Act, 2013, from member(s) signifying the intention to propose Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni respectively, as candidate(s) for the office of Director at the forthcoming Annual General Meeting.

The other Independent Directors of the Company viz., Mr. Rajas R, Doshi, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that they meet the criteria of Independence as prescribed for Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.

The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

Brief Profile of the Directors seeking appointment/ re-appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

13. Key Managerial Personnel

Following persons are the Key Managerial Personnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed there under:

i) Mr. Ajit Gulabchand, Chairman and Managing Director.

ii) Mr. Rajgopal Nogja, resigned as Group CEO of the Company w.e.f. March 31, 2017.

iii) Mr. Arjun Dhawan, was appointed as the Group Chief Executive Officer and Whole-time Director of the Company with effect from April 1, 2017 and therefore he is a KMP w.e.f April 1, 2017.

iv) Mr. Arun V. Karambelkar, President & Chief Executive Officer.

v) Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office.

vi) After the end of the financial year under review, the contract of appointment of

Mr. Sangameshwar Iyer, Company Secretary is getting concluded and therefore he will be a KMP uptil May 8, 2017.

The Board placed on record its appreciation for the services rendered by Mr. Sangameshwar Iyer during his tenure as Company Secretary of the Company.

vii) Mr. Venkatesan Arunachalam was appointed as Company Secretary w.e.f. May 9, 2017 in place of Mr. Sangameshwar Iyer and therefore he is a KMP with effect from the said date.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2017 are mentioned in Form MGT-9, Extract of the Annual Return which is attached as Annexure VIII to the Board''s Report.

14. Board Committees

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Corporate Social Responsibility (CSR) Committee.

In accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.

15. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.

The Board of Directors of your Company met 6 times during 2016-2017. The meetings were held on April 28, 2016, June 3, 2016, July 28, 2016, October 27, 2016, December 2, 2016 and February 2, 2017. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

16. Familiarization Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization programme for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.

The details of the familiarization programme are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia. com/pdf/familiarisation_program_for_independent_ directors.pdf

17. Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, annual performance evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Executive Committee of the Board and Corporate Social Responsibility (CSR) Committee has been carried out.

The performance evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

18. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 22, 2017, inter-alia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

i) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel:

The Nomination and Remuneration Committee has laid down a well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors in May 2, 2014, which is attached to the Board''s Report as Annexure II.

20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees:

The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors on May 2, 2014, which is attached to the Board''s Report as Annexure II.

21. CSR Policy:

The brief outline of the Corporate Social Responsibility (CSR) Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is attached to this Report as Annexure III and is available on the website of the Company i.e. www.hccindia.com

22. Related Party Transactions:

All the related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis.

The related party transactions attracting the compliance under Section 177 of the Companies Act, 2013 and / or SEBI Listing Regulations were placed before the Audit Committee for necessary approval/ review.

The routine related party transactions was placed before the Audit Committee for their omnibus approval.

A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.

There are no transactions to be reported in Form AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

Further the details of the transactions with Related parties are provided in the Company''s financial statements in accordance with the Accounting Standards read with IND AS Rules.

The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http://www.hccindia.com/pdf/HCC_Policy_for_Related_Party_Transactions.pdf

23. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit of the Company for the year ended on that date.

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

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

e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.

Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.

The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.

However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively.

This response by Directors is based on the management note given under Para 29 of this report.

24. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

25. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has, during the year under review, transferred a sum of '' 17,86,342 to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount represents dividend for the year 2008-09 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

26. Particulars of Employees and other additional information.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure V to this Report.

The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.

28. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the above said AGM).

Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.

At the 90th AGM held on July 14, 2016, the shareholders had ratified the appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai for the period covering their third year of appointment viz., from the conclusion of the last AGM held on July 14, 2016 until the conclusion of the Annual General Meeting to be held in the financial year 2017-2018.

The said existing appointment of Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai covering their fourth year of appointment viz, from the conclusion of the ensuing AGM in financial year 2017-2018 until the conclusion of the next Annual General Meeting to the held in the financial year 2018-2019, has to be ratified by Members at the forthcoming AGM and accordingly the said proposal is being placed for members'' ratification.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made there under, as may be applicable.

29. Statutory Auditors'' Remarks

a. Statutory Auditor''s Qualification :

The Statutory Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2017 contains the following qualification(s) :

As stated in Note 33 to the standalone financial statements, the Company''s non-current investments as at March 31, 2017 include investments aggregating Rs. 630.83 crore in two of its subsidiaries; and non-current loans, other non-current financial assets and other current financial assets as at that date include dues from such subsidiaries aggregating Rs. 512.42 crore, Rs. 38.17 crore and Rs. 4.77 crore, respectively, being considered good and recoverable by the management considering the factors stated in the aforesaid note including valuation report from an independent valuer. However, these subsidiaries have accumulated losses and their net worth is fully / substantially eroded. Further, these subsidiaries are facing liquidity constraints due to which it may not be possible to realize projections made as per business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements. Our audit opinion on the standalone financial statements for the year ended March 31, 2016 was also qualified in respect of this matter.

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at March 31, 2017, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter:

In our opinion, according to the information and explanations given to us and based on our audit procedure performed, the following material weakness has been identified in the operating effectiveness of the Company''s IFCoFR as at March 31, 2017:

The Company''s internal financial controls in respect of supervisory and review controls over process of determining of (a) carrying value of the Company''s non-current investments in its subsidiaries; and (b) recoverability of non-current loans, other non-current financial assets and other current financial assets due from such subsidiaries were not operating effectively. Absence of aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investments in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, could also impact the profit (financial performance including other comprehensive income) after tax.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in IFCoFR, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2017, based on internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI and the Company''s IFCoFR were operating effectively as at March 31, 2017.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the standalone financial statements of the Company as at and for the year ended March 31, 2017, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

Management Note:

The Company, as at March 31, 2017, has (i) a noncurrent investment amounting to Rs.612.40 crore (March 31, 2016: Rs.612.40 crore; April 1, 2015: Rs.612.40 crore), non-current loans amounting to Rs.380.86 crore (March 31, 2016: Rs.327.01 crore; April 1, 2015: Rs.266.02 crore), other non-current financial assets amounting to Rs.21.72 crore (March 31, 2016: Rs.19.43 crore; April 1, 2015: Rs.25.01 crore) and other current financial assets amounting to Rs.Nil (March 31, 2016: Rs.5.07 crore; April 1, 2015: Rs.3.43 crore) in HREL, a subsidiary, which is holding 68.70% share in Lavasa Corporation Limited (LCL), a step down subsidiary, and (ii) a non-current investment amounting to Rs.18.43 crore (March 31, 2016: Rs.18.43 crore; April 1, 2015: Rs.18.43 crore), noncurrent loans amounting to Rs.131.56 crore (March 31, 2016: Rs.110.21 crore; April 1, 2015: Rs.Nil), other non-current financial assets amounting to Rs.16.45 crore (March 31, 2016: Rs.13.08 crore; April 1, 2015: Rs.14.30 crore) and other current financial assets amounting to Rs.4.77 crore (March 31, 2016: Rs.1.28 crore; April 1,2015: Rs.77.24 crore) in LCL. While such entities have incurred losses during their initial years and consolidated net-worth of both entities as at March 31, 2017 has been fully eroded, the underlying projects in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The net-worth of these subsidiaries does not represent their true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of these subsidiaries is substantially higher than the carrying value of the investments, non-current loans, other non-current financial assets and other current financial assets due to which these are considered as good and recoverable.

Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investment, recoverability of loans and advances, current and non-current assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.

30. Secretarial Audit:

Secretarial Audit for the financial year 2016-2017 was conducted by M/s. BNP &Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII wherein the following observation has been made by the Secretarial Auditor:

In respect of the Listed Non - Convertible Debentures (NCDs), although the terms got restructured in accordance with the CDR package approved for the Company in 2012 whereby, inter alia, the maturity dates were rescheduled to a later date and the same was intimated to the BSE, to extend the listing for the said NCDs, there was no advise from BSE and the said NCDs got delisted on the expiry of the respective original maturity dates. In view of the delisting, respective compliances under Regulations 50 to 52 and 54 to 62 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 have not been carried out by the Company during the delisted period.

Management Note :

In respect of the Listed Non-Convertible Debentures (NCD) issued to Life Insurance Corporation of India & Axis Bank Limited in 2008 and 2011 respectively, the Company had complied with the provisions of the erstwhile Listing Agreement provisions for debt segment with BSE. The said NCDs were restructured, by extending the tenure of repayment in accordance with CDR Package dated June 29, 2012 and the same was intimated to BSE but was not recorded by them and therefore the listing of these NCDs got expired on the original maturity dates in 2014 & 2015 respectively.

The Company had taken up the matter with BSE to revive the NCDs up to the extended tenure and the same is under their due consideration.

As the NCDs got technically delisted due to reasons cited above and beyond the control of management, respective compliances under Regulations 50 to 52 and 54 to 62 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were not applicable for the Company during the delisted period. As soon as the listing of these NCDs are revived by BSE, the Company shall carry out the compliances as required under SEBI Listing Regulations.

31. Cost Audit :

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on July 28, 2016 had appointed M/s. Joshi Apte & Associates, Cost Accountants bearing (Firm Registration No. 00240). as Cost Auditors of the Company for the financial year 2016-2017. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2016-2017.

32. Risk Management:

The Company has established a well-documented and robust risk management framework under the provisions of Companies Act, 2013. The Company has constituted Risk Management Committee in place, which has been delegated with the authority by the Board to review and monitor the implementation of the Risk Management Policy of the Company.

Under this framework, risks are identified across all business processes of the Company on a continuous basis. Once identified, these risks are managed systematically by categorizing them into Enterprise Level Risk & Project Level Risk. These risks are further broken down into various sub-categories of risks such as operational, financials, contractual, order book, project cost & time overrun etc. and proper documentation is maintained in the form of activity log registers, mitigation, reports; and monitored by respective functional heads. Review of these risk and documentation is undertaken by Risk Review Committee of the management, held at agreed intervals but at-least once in quarter and mainly during Quarterly project reviews.

Risk Review Committee was successful in early identification of financial risk related to borrowing structure & cash flow mismatch due to late realization of claims lodged with clients. These risk were materially mitigated during the year by implementing new financial restructuring scheme introduced by Reserve Bank of India known as ''Scheme for Sustainable Structuring of Stressed Assets (S4A)'' with lenders and issue of guidelines by Cabinet Committee of Economic Affairs (CCEA) for release of 75% of arbitration awards in favour of infrastructure companies, respectively.

On introduction & implementation of new Accounting Standard Indian Accounting Standards (''IND-AS'') under Companies Act, 2013 which is applicable from current year, company in its Notes to Accounts have disclosed risk management objectives and policies for managing financial and reporting risk. (Refer Note 40 of Standalone Financial Statements).

33. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

34. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act 2013.

35. Vigil Mechanism Policy:

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccinida.com

36. Sexual Harassment:

HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee. During the year 2016-2017, no case of Sexual Harassment was reported.

37. Reporting of Frauds :

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.

38. Significant and material Orders passed by the Regulators/Courts, if any:

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.

39. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

40. Extract of Annual Return:

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.

41. Acknowledgements:

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued cooperation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJIT GULABCHAND

Chairman & Managing Director

Registered Office:

Hincon House, Lai BahadurShastri Marg

Vikhroli (West), Mumbai 400 083

Place : Mumbai

Date : May 4, 2017


Mar 31, 2016

1. Report

The Directors are pleased to present the 90th Annual Report together with the Audited Financial Statements for the year ended March 31, 2016.

2. Financial Highlights

(Rs. Crore)

Particulars Year ended Year ended March 31, 2016 March 31, 2015

Turnover 4190.90 4,301.14

Profit before Interest, Depreciation, Exceptional 798.74 781.43

Items, Other Income and Tax

Less: Finance Costs 689.88 651.13

135.85 150.30

Depreciation

Exceptional Item 26.48 -

852.21 801.43

Add: Other Income 187.76 134.87

Add/Less: Exchange Gain/(Loss) (1.22) 12.45

Profit before Tax 133.07 127.32

Less: Tax Expense 48.10 45.67

Profit/(Loss) after Tax 84.97 81.65

Add: Balance brought forward from last year 147.92 69.00

Less: Transferred to Debenture Redemption

20.00 - Reserve

Less: Impact of depreciation/ amortisation - 2.73

(Refer Note 3.2 of the Financial Statements)

Balance carried to Balance Sheet 212.89 147.92

3. Dividend

As your Company is under CDR, it is necessary to conserve and optimise use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2016.

4. Operations

The turnover of the Company in the year is Rs. 4,190.90 crore as compared to Rs. 4,301.14 crore in the previous year. The profit before tax is Rs. 133.07 crore (including exceptional item) as compared to Rs. 127.32 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts:

- Ramban to Banihal Section of NH 44, Jammu & Kashmir

Contract Value: Rs. 1783 crore

- Integrated Nuclear Recycle Plant, Maharashtra Contract Value: Rs. 942 crore

- Imphal Kangchup Tamenglong Road, Manipur Contract Value: Rs. 1114 crore

- Tapovan Vishnugad Hydroelectric Project, Uttarakhand

Contract Value: Rs. 634 crore

- Nikachhu Hydropower Plant, Bhutan Contract Value: Rs. 457 crore

- Tunnel No. 12, New Railway line Project Jiribam - Tupul, Manipur Contract Value: Rs. 784 crore

The total balance value of works on hand as on March 31, 2016 is Rs. 18,123 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 13 packages amounting to about Rs. 10,334 crore (HCC share Rs. 9301 crore). Tenders for various packages for 29 projects worth Over Rs. 22,214 crore (HCC share Rs. 19,843 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 12 projects worth over Rs. 24,082 crore (HCC share Rs. 22,053 crore) which are under evaluation.

Operations of Subsidiaries

i) Lavasa Corporation Ltd - Integrated Urban Development and Management

Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for opening in April 2017. Projects with renowned hospitality players like Formule 1, Holiday Inn, Langham and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its eighth year of successful operations with occupancy at 66%, while Accor''s Mercure is in its seventh year of successful operation with occupancy at 56%. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Lavasa has tied up with former Indian cricketer and chief of the BCCI Selection Committee, Mr. Sandeep Patil for building a Sports complex including a cricket stadium for corporate tournaments. There have been talks to set up sports academies for hockey, football, badminton, etc. at Lavasa. Other tie-ups include advance discussions on building a Hollywood & Bollywood Theme Park in Mugaon.

On the retail front, a significant area has already been leased. Restaurants like Smokin Joes, Venkys Xpress, Subway, Cafe Coffee Day, Baskin Robbins,

All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchyand Indulge have commenced operations. Many other non F&B outlets such as Mapro and Charosa Wine Boutique have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.

Significant progress was made in the education space. Christel House Lavasa is into its seventh year of operations with 432 students. 2015-16 also saw launch of Phase 2 of Christel House till grade VIII. Corporate entities such as EduSports, Yoga Blessing and Linguaphone showed keen interest to contribute towards Christel House Lavasa School by way of sports programmes, educational and Yoga workshops.

Ecole Hoteliere Lavasa started its seventh batch in June 2015-16. The operation of Ecole Hoteliere was taken over by Expat Properties in May 2015. Ecole Hoteliere will start its eighth batch from July 25, 2016.

Christ University offering courses like Post Graduate Diploma in Management (PGDM) program with specialization in Finance and Marketing started operations two years ago, with a total of 102 students now in its third batch, with a target of 60 students for the 2016-17 academic program.

Knowledge Vistas Limited (KVL) is already running Little Millennium, pre-primary school at Lavasa for last five years. It is also likely to start the K12 School from academic year 2017-18. Abhinav Shiksha Sansthan, New Delhi will start from the academic year 2018-19 across the area of 62,500 sq. ft. Other educational partners like Symbiosis Institute (Pune) are also in the process of launching their programs.

Residential sales have been sluggish in tune with the overall market sentiment. Institutional Sales team is on the anvil of closing transactions which would herald the entry of reputed corporations into Lavasa city.

One such deal is with ''All that Jazz'', a leading retailer who will bring reputed retail brands to make Lavasa an ideal shopping destination. This deal will boost retail businesses at Lavasa and make the promenade area more vibrant.

We are in advanced discussions with multiple educational institutes keen to set up residential schools at Lavasa. Sanjeevani Institute intends to bring in Kindergarten to Post Graduate courses. Likewise, vocational training institute from Germany, ''Kosbe'' has been approached and they are keen to start courses. Lavasa being a smart city offers students ready on site learning of various subjects like waste management and functioning of water treatment plants. Symbiosis Institute has begun construction of a higher secondary education facility.

Lavasa continued its focus on branding and communication activities in 2015-16. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages. Positioning Lavasa city as India''s first smart city, building preference and restoring customer confidence in the project were the key goals.

The central government initiative to build smart cities across India generated a great deal of excitement among Indian and foreign stakeholders. The growing interest in smart cities augurs well for Lavasa. We played host to a number of government, business and student delegations keen on studying the Lavasa model of development.

As a proactive step to reach out to a wider audience, Lavasa was presented as a ready Smart City model at various platforms, the most prominent one being the Smart Cities India Exhibition at Delhi and the 13th Municipalika Smart Cities Exhibition at Jaipur.

Our spokespeople also participated in various other seminars and discussions on Smart Cities.

Lavasa continued with the strategy of creating large events at Lavasa to attract good tourists.

A four day festival of adventure, music, dance and entertainment was organized as a lead up to the Republic Day on January 26, 2016. For the first time, a hot air balloon took flight over the Dasve town, Mentalist, Akshay Lakshmanan captivated audiences with his mind reading session and wall painting activity by the students of Christel House were the highlights of the Republic Day weekend festivities.

On May 1, 2015, Maharashtra Day was also celebrated with art & culture, music & dance programmes highlighting the rich cultural heritage of Maharashtra, along with a display of historic ancient Maratha arms & weapons livened up the Dasve Promenade.

The second edition of Freedom, a festival of music, food and entertainment saw 35,000 tourists enjoying good music, delectable cuisines and great entertainment.

Christmas and New Year celebrations started with live musical and dance performance at the Dasve promenade and Fortune Lawns. Renowned artist Sharon Prabhakar along with DJ Rayjack, DJ-Cyborg,

DJ Sazz & DJ Shriki entertained the visitors.

Focus of the Public Relations campaign in 2015 was on building profile of Lavasa as India''s first smart city and promoting the city as an ideal tourist destination. Feature stories in print media and TV channels, automobile magazines, national and international news portals resulted in good visibility for Lavasa.

Lavasa was prominently featured as a Smart City in a number of media reports. Trade magazine ''Realty'' featured Lavasa as one of India''s premier Smart Cities, while Hindustan Times, the Pioneer, Deccan Herald and Indiainfoline carried similar stories. Other trade supplements like Times Property and multiple regional publications also featured Lavasa as a Smart City.

CMD''s comment was widely circulated to media post launch of AMRUT in Delhi, positioning him as the thought leader on Smart Cities. ''The Property Guide'' guide show on leading business news channel ET Now did a report on residential properties at Lavasa and also carried an interview with the CEO.

Lavasa as a tourist destination was promoted through stories in relevant travel and lifestyle media and through tie ups with TV channels for shows that were shot at Lavasa. ELLE magazine did a 14 page photo shoot including the cover page at various scenic locations in the city. Lavasa was covered extensively in ''Man Chimb Pavasan'' a travel based programme on Saam Marathi channel. A photo-feature on tourist options at Lavasa was also carried by leading news portals like rediff.com and indiatoday.in.

Auto-trade media was specifically engaged to promote Lavasa among bikers and adventure enthusiasts. Over 1000 bikers braved the rain and travelled to Lavasa in June to celebrate World Motorcycle Day. This activity garnered coverage in all media including mainline publications, print and online auto media as well as regional publications. Motoring World magazine conducted the jury round of their annual car and bike awards at Lavasa which resulted in a six page story all of them featuring cars and bikes shot at Lavasa.

Lavasa viewpoint on the SDO order on restoring tribal lands was prominently reproduced by all print and TV media. Pune media was engaged extensively during the summer season to sensitise them on the water scarcity issue. Meetings with senior editors and the constant engagement with beat reporters in Mumbai and Pune has also helped in creating greater awareness of company''s stand on various crucial issues.

Special Initiatives and events were highlighted regularly in mainstream and trade media to build preference and recall. Celebrations at Lavasa on Maharashtra Day, Independence Day weekend and initiative like the Dreamcatchers Summer camp were covered by all major publications and online portals. Launch of Jetovator, Segway and news about Lavasa bagging the PATWAAward were widely publicized.

Each month, Lavasa looks, feels and acts more like a city. Lavasa city now has a full-fledged operational Farmer''s market known as ''Hara Bazar''; a two screen Movie theatre for visitors and residents; it has a fully operating Post office, DTDC - courier service, a Hospital with pharmacy and several new food and beverage establishments open for business. It also has four operating hotels. Four additional hotels will be opening soon which collectively will take the total number of hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two bank branches along with ATMs, a state-of-art Convention Centre, a Public Safety Centre with Fire Engine & crew,

Police outpost to be upgraded to a full-fledged Police station, Tourist Information Center with a ''Hop On - Hop Off'' Bus facility; Multilevel Car parking facility, Nature trail, Citizen Contact Center with 24x7 support to citizens through emergency and non-emergency contact numbers, Rental housing for low income groups, simulated Golf Course facilities; Water Sports facility with latest "Jetovator", Adventure Sports facility, a modern Club with gym, Sports and Spa facilities, Public Transport system for citizens, Schools for local population and two operational College campuses. Additional Hotels, Retail shops and Family Entertainment Centre facilities for tourists will be opened shortly.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. Drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration. Sewage is treated in a manner that exceeds government requirements and is subsequently reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99.90% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50 kilometers of well-maintained motorable roads are operational and more are being constructed,

Lavasa has already opened parks and play areas to the public. The e-governance portal Lavasa App, and Security Command Centre will play a major role in communicating with citizens and providing services 24x7.

A round the clock Lavasa Citizen Contact Centre has been operational since 2009 and envisions making the lives of citizens and visitors easy and convenient. The Lavasa Citizen Contact Centre is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customers'' needs and visitors'' requests; is involved in proactive information distribution, data collection and Property management services; Customer Satisfaction Surveys and Customer handovers and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting. It is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, PublicWorks, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The CMS department will slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. Lavasa aims to create this, so that the goals of the Master Plan can be realized and sustained and the various public - private partnerships can operate in a more consistent and predictable environment.

The CMS department meets on a monthly basis with a committee of villagers throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

The Company had 10,574 acres of land including 455 acres of land on lease by the end of last financial year i.e. March 31, 2015. This has reduced to 10,515 acres as 59 acres of land in Mugaon was restored to tribals by SDO, Maval during the year.

The Environment Management Plan (EMP) continues to be implemented as per our Environment Impact Assessment (EIA) Report submitted to Ministry of Environment, Forests & Climate Change (MoEF & CC), New Delhi. Regular monitoring of environmental aspects such as air & noise quality, water & sediment quality, soil quality, DG stack & noise quality and biodiversity is being carried out by MoEF approved and NABL accredited laboratory as per the conditions mentioned in the Environment Clearance by MoEF & CC. All reports were found to be within the prescribed limit of MPCB. The six-monthly Environmental Compliance Report is being submitted to MoEF since 2012. The 7th compliance report was submitted in June 2015 and the 8th compliance report was submitted in December 2015 to MoEF, its Regional Office at Nagpur and Maharashtra Pollution Control Board (MPCB) at Pune. Yearly Environment Statement, a requirement as per the consent document of Maharashtra Pollution Control Board (MPCB), is being submitted in the month of September every year and the last report was submitted on September 30, 2015.

First town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. Till date around 1,200 properties are ready for hand over to customers. Of these, around 972 units have already been handed over to customers. Work on rest of properties - Lake View apartments, Club View apartments, Delfino apartments, Valley View apartments, Brook View apartments, Rental housing, Retail and hostel tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in progress.

Work on infrastructure for the second town of Mugaon has been accelerated. Work on utilities is in progress. Work on 37 buildings at Mugaon has commenced.

The improvement to the existing Mugaon-Tamhini Zilla Major District road excluding the stretch crossing through Forest Land is completed. A portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. Work on the inter village road from Mugaon to Dhamanohol is completed (6 kms). Rehabilitation work on new gaothans has commenced. This rehabilitation will also help augment the construction of the first phase of the apartments in Mugaon.

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 18 villages in the project area at 72 locations on a daily basis. Calligraphy workshops, aptitude tests and counseling for students of Zilla Panshad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.

ii) HCC Real Estate Ltd

HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company is into the business of building residential and office complexes in real estate sector.

HRL (Thane) Real Estate Limited

Your Company initiated the acquisition of 183 acres of land at Ghodbunder Road, Thane for Integrated Township Development. Till date the Development Agreement and Power of Attorney for 32 acres have been executed in favour of Company. The Company continued its activity of securing its position for land title and other documentation.

The Company has filed criminal case against Mr. Atul Sonawala and 8 other Directors of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is in process for the said case.

HRL Township Developers Limited

No activities were carried out during the year. Your Company continued its search process for joint development opportunities.

Nashik Township Developers Limited

During the year, the Company sold its land and completed all the land related transactions. Further the Company is looking for joint development opportunities in residential sectors since Nashik city is growing industrially as well as economically.

Maan Township Developers Limited

The Company has acquired approx. 28 acres of land and the Development Agreement and Power of Attorney have been executed in favour of the Company. The Company in this year has decided to sell the land in piece parcels. MOU has been signed with a Real Estate Company for sale of 5 Acres of land and has executed sale deed for 4 Acres.

Powai Real Estate Developers Limited

No activities were carried out during the year though the Company continued to look for an opportunity to find ideal land parcels for joint development in residential sectors

HCC Realty Limited

No activities were carried out during the year.

Panchkutir Developers Limited

During the year, your Company continued its efforts on the following projects in residential sector:

Development of Vikhroli (E) land parcel: Out of the total land holding of around 32 acres by the Panchkutir Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-I of 14.5 acres of land to ascertain the development potential of the free sale component is completed. Out of the 1960 slum residents, consent of about 1400 residents representing more than 70% has already been obtained and the process for forming the society is in progress. Proposal has been submitted to SRA for Phase-I comprising of 750 tenants of 4 Societies.

Slum declaration of Phase-I land was challenged and the same has been dismissed by the Special Slum Tribunal. Subsequently the litigant filed Writ Petition challenging the above said Order of the Slum Tribunal in High Court. High Court interalia asked tribunal for actual verification of slum. But the litigant filed an appeal challenging the above said Order of the Single Judge of High Court before the Divisional Bench.

Development of Powai land: MOU-cum- Development Agreement and Power of Attorney were executed by land owner in favor of the SPV, Panchkutir Developers Ltd a subsidiary of HCC for 12 acres of land. Due to non performance by the land owner of the various obligations under the MOU- cum-Development Agreement in spite of repeated reminders, we have been advised by our solicitor to invoke the Arbitration clause forming part of the MOU-cum-Development Agreement. Accordingly, Arbitration proceedings have been initiated and till date evidence of Claimant''s witnesses is completed and matter is now fixed for evidence of Respondent.

During the pendency of the proceedings, Smt. Nayak, litigant has submitted a proposal to settle the matter by making lump sum payment which was accepted by the Company. Accordingly Consent Terms were executed on November 16, 2015 and the Learned Arbitrator has passed an award on December 15, 2015 in terms thereof. The Company has received full payment by banker''s cheque and has executed cancellation Deeds of MOU and lease deed.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned subsidiary of your Company, operates its business through its subsidiaries HCC Concessions Ltd. (HCON), HCC Power Ltd., and HCC Operations & Maintenance Ltd (HOML). HCON develops and manages road assets, HOML operates commissioned assets and HCC Power is exploring opportunities in the power sector to leverage HCC''s capabilities. HCON has developed 6 NHAI road concessions over the last 9 years. In the past financial year, after the sale of two of its de-risked operational projects i.e. Nirmal BOT Ltd and Dhule Palesner Tollway Ltd, the current portfolio has four National Highway concessions with Rs. 5,000 crore asset base.

In line with your Company''s plan, the focus over the last fiscal year has been on strong construction management, efficient operations and raising capital. The management team at the Company has been continuously working to achieve quality and timely execution to create value for all its stakeholders with complete focus on financial discipline. The Company continues to provide reliable, safe and world class services to the country''s end users.

In 2011, the Xander group, a global investment firm, had acquired a 14.5% stake in HCON for Rs. 240 crore.

Current Road Portfolio:

HCON''s current portfolio comprises of four toll based projects: the Delhi Faridabad Elevated Expressway (dfskyway™) on NH2, and three contiguous sections of 250 km in West Bengal on NH34. Of these, Delhi Faridabad Expressway and the first leg of NH34 development i.e. the Baharampore Farakka Highways are operational. These two projects have been operational for five and two years, respectively.

In the last financial year, your Company completed the stake sale of two assets. The transaction for Nirmal BOT Ltd, the annuity project in Telengana (erstwhile Andhra Pradesh) was completed in December 2015 and the sale of Dhule Palesner Tollway, the 89 km highway on NH3 connecting Agra and Mumbai, was consummated in October 2015.

Farakka Raiganj Highway, the second and largest leg of NH-34 development in West Bengal, achieved significant progress in the last fiscal year. The project is expected to be commissioned in the next few months while final completion is expected by the end of next fiscal year. The last leg of NH34, Raiganj Dalkhola, which has been delayed nearly 6 years due to delays in land acquisition, has seen significant improvement in availability of Right of Way (ROW), and your Company has approached the lenders consortium and NHAI for support in restarting the project. While the NHAI has acknowledged the sizeable cost increase, they remain reluctant on supporting the project with funds including additional grant. In the interest of all stakeholders and being prod by NHAI, the concessionaire has started basic earthworks, but full scale mobilization will depend on appropriate support from NHAI and lenders.

Material defaults by NHAI, largely due to delayed handing over of land for all three NH-34 packages have resulted in the Concessionaire''s filing of a claim of Rs. 1,528 crore as damages. Of these the Company has started the arbitration proceedings for the Baharampore-Farakka and Farakka-Raiganj projects. After muted growth due to the recent economic slowdown, the traffic growth on Baharampore-Farakka has been strong in the last financial year and NH-34 projects continue to be a substantial source of value creation for your Company.

In the last financial year, ~1,600 km of highways were awarded on BOT basis. The Ministry of Road Transport and Highways (MoRTH) and NHAI have introduced a new Hybrid Annuity model for development of road assets on PPP mode. Your Company is evaluating bidding for select Hybrid Annuity projects, potentially in partnership with third parties.

Status of Operational Assets: Baharampore Farakka Highway (NH-34)

This is the first section of HCON''s Rs. 4,300 crore development of NH-34 (West Bengal) from Baharampore to Dalkhola. The project stretch is the arterial connectivity between North and South Bengal providing nearest access to Kolkata and Haldia ports for the north eastern states of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises 85-90% commercial traffic, carrying a diversified mix of manufactured goods, sand, quarry stones, building materials, steel, jute, food grains and tea.

The concession period for the project is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,424 crore. The project achieved commercial operations in May 2014 for partial length of the highway while land was being acquired for the remaining portion. The total revenue for the last fiscal year was Rs. 112 crore, an increase of 37% over the previous financial year. The operations and maintenance is being managed by HOML.

The Company has successfully implemented the 10x tolling for overloaded vehicles since August 2014 as per NHAI circular, to prevent the economic deterioration of the asset and to meet the increased costs due to overloading.

The balance land for the Baharampore bypass was handed over in the second quarter of last fiscal. The completion of the project is delayed by 34 months as of March 2016, largely due to material defaults by NHAI in providing land on a timely basis. The Final Completion (FCOD) is expected to be completed after a delay of 56 months due to delayed handover of ROW, tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. The Concessionaire has filed Rs. 578 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs and arbitration proceedings are underway. The Company has filed the Statement of Claim before the arbitration tribunal.

The Company has also achieved the sanctions from the lenders consortium for cost overrun in the last fiscal to complete the project in the absence of timely realization of claim from NHAI.

Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™, awarded in 2008, is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur, developed by HCON with an investment of nearly Rs. 600 crore. The dfskyway™ reduced travel time by over 40 minutes through an extremely congested corridor that benefits residents and inter- state traffic alike.

The project has a concession period of 20 years, including construction period of 2 years. In the last fiscal year the Company suffered a material impact due to a Supreme Court order for collecting Environmental Compensation Charge from commercial vehicles entering New Delhi (thereby discouraging their entry into the capital), resulting in a substantial dip of ~40% in commercial vehicles. It is clear that the Apex Court and the Delhi government are working hard to prevent commercial vehicles using Delhi as a thoroughfare (admittedly for good reason to check pollution), but which has unfortunately caused a devastating impact and potential political event by permanently curtailing revenues.

The Company is evaluating several options with the lenders including restructuring options as per RBI guidelines and potential termination with NHAI due to

Force Majeure event.

In order to enhance the revenue on this project and reduce maintenance costs, the Company is also in the process of implementing 10x tolling for overloaded vehicles in accordance with NHAI Fee Rules.

The Company has also submitted its proposal for deferment of premium payments to improve liquidity, as well as a comprehensive proposal for advertising along the project highway. The project is a signature project in Delhi having very high visibility and the Company is expecting significant revenues from the latter sources.

Status of Assets under Construction:

Farakka Raiganj Highway (NH-34)

Farakka Raiganj is the middle and largest section of the 250 km development. This section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,720 crore.

A substantial stretch of roads and structures of this second and largest leg of NH-34 development has been completed and toll collection is expected to commence by Q1 of financial year 2017. In the last year, almost the entire land has been made available for construction after a substantial delay of ~4 yrs by NHAI. The Provisional Completion (PCOD) is estimated to be achieved 35 months after SFLD (Scheduled Four-laning Date) while Final Completion (FCOD) will be delayed by a total of 44 months due to delayed handover of ROW, tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. As of June 30, 2015, the Concessionaire has filed Rs. 681 crore of claims from the NHAI for the damages suffered due to NHAI defaults. The arbitration proceedings are underway and the Company has filed its Statement of Claim and Rejoinder to the Statement of Defense filed by the NHAI. The Concessionaire will submit further claims for increased costs beyond June 30, 2015.

The Company has also achieved the sanctions from the lenders consortium for cost overrun in the last fiscal to complete the project in the absence of timely realization of claim from Authority.

Raiganj Dalkhola Highway

This is the smallest northern section of the NH-34 development which has suffered the worst delay of nearly 6 years due to non-acquisition of land. The project stretch starts at Raiganj (Km 398.000) and terminates at the town of Dalkhola (Km 452.750).

The 50 km project stretch traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years which includes a construction period of 30 months. The project cost has increased to Rs. 1,204 crore and progress is contingent on appropriate support from NHAI and Lenders.

In the last 1.5 years, a significant portion of land has been made available for construction after a delay of nearly 6 years; Pre-construction activities such as clearing & grubbing and earthwork has started in the interest of all stakeholders.

As of June 30, 2014, the Concessionaire has filed Rs. 269 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile had approached its Lenders to assist in funding the large cost overrun and has received sanction from the lead bank for additional funding. Once the financing arrangement is in place with adequate support from NHAI, the Company will start full-fledged construction work with an aim to complete within next 30 months.

iv) Steiner AG, Switzerland

Steiner AG, one of the leading project developers, total and general contractors (TC/GC) in Switzerland, offers comprehensive services in the fields of new constructions, refurbishment and Real Estate Development.

Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, wholly owned subsidiaries.

As per IGAAP Accounting Standards, Steiner AG has registered a revenue of CHF 636.8 million (Rs. 4255.3 crore) compared to CHF 853.9 million (Rs. 5604.9 crore) in the previous year with a loss of CHF 0.98 million (Rs. 6.5 crore) compared to a net profit of CHF 1.7 million (Rs. 10.8 crore) in the previous year. While as per Swiss GAAP Accounting Standards, Steiner AG has registered a revenue of CHF 649.7 million (Rs. 4341.8 crore) compared to CHF 854.1 million (Rs. 5605.8 crore) in the previous year with a net profit of CHF 1.9 million (Rs. 12.7 crore) compared to CHF 2.0 million (Rs. 13.1 crore) in the previous year.

The Company secured fresh orders worth CHF 850 million (Rs. 5843.6 crore). The order backlog was CHF 1.32 billion (Rs. 9074.8 crore) at the end of the year. In addition to this, the company has secured orders for more than CHF 700 million (Rs. 4812.4 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 87.1 million (Rs. 598.7 crore)as per Swiss GAAP while as per IGAAP closing cash balance was CHF 85.4 million (Rs. 587.1 crore), reflecting the companys steady financial performance and strong liquidity position.

Steiner India Ltd, 100% subsidiary of Steiner AG, had a revenue of Rs. 75.5 crore and loss of Rs. 5.9 crore in FY 2015-16.

v) Highbar Technologies Ltd

Highbar Technologies Ltd (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company with the vision of providing end-to-end IT solutions to Infrastructure industry.

In the financial year 2015-16, which is just the sixth year of operations, Highbar has been able to cross the total number of customers beyond 100. This has been achieved when Highbar''s primary customer segment, the infrastructure industry, is dealing with slowdown.

Highbar is now providing SAP related services and IT infrastructure services across multiple sectors like Manufacturing, BPO, Agro-Chemicals in addition to Infrastructure, Real Estate, Retail, Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron & Steel etc. It has developed capabilities to successfully concurrently execute large sized projects. Highbar has already started expanding its reach in government sector by exploring opportunities with dedicated team working on it. This year Highbar''s services for Government sector made one of its prominent government customers go paperless.

Apart from this, Highbar has been honoured with two prominent industry recognitions. First one is SAP Partner Awards in the category of ''Best Pre-sales Customer Engagements'' for effectively engaging customers through appropriate solutions across industries. Second one is ''ChannelWorld Premier 100 awards''. This award was given to the IT players for being agile and adapting rapidly to the changing technology and business landscape. Highbar has been recognised as one of the 100 agile IT players. This is the 2nd time that Highbar has been recognised with Premier 100 awards. Agility is one of Highbar''s nine brand drivers. With speed, agility and hunger for success. Highbar Technologies has already created a niche for itself in infrastructure and real estate industry by dominating ''IT for Infrastructure market'' with 100 customers in a short span of 6 years.

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence and dashboards, cloud offerings through Highbar Cloud Connect, Employee Portals, CRM (Customer Relationship Management), DMS (Document Management System), BPC (Business Planning & Consolidation), Treasury Management, FLM (File Lifecycle Management). It has also ventured into new areas like SAP HANA, S/4 HANA, Simple Finance, SAP Fiori, Screen Persona, Mobility Solutions, e-procurement etc. The business has now established and is ready to expand in multiple industries and geographies like India, Middle East, Europe and Africa. Highbar''s first customer in Switzerland has already gone live on SAP system and started garnering benefits of SAP.

Services provided by Highbar have gone much beyond SAP into process consulting and IT infrastructure support such as data-centre and networking. Solutions like Highbar RapidStart and Highbar RapidStart Analytics are based on templatised approach to ERP and Business Intelligence respectively and are intellectual properties (IP) assets of Highbar. Highbar remains as preferred partner for SAP implementation and re-implementation for the infrastructure industry. Eleven numbers of Highbar''s implementations have now become global case studies, published on SAP''s website as reference cases.

Highbar continues to support your Company''s group companies including your Company, HCC Infrastructure, HCC Real Estate, Lavasa and Steiner India across the IT value chain. Your Company''s SAP Customer Centre of Expertise (CCOE) was certified by SAP this year and benchmarked amongst top 1% out of 2,93,000 SAP customers globally. With a view to be at the forefront of IT, entire SAP systems at your Company viz. ERP, CRM, DMS etc were upgraded to the latest versions, thereby ensuring SAP support for at least the next ten years i.e. till 2025 along with access to new business functionalities which were hitherto not available. The underlying hardware, Operating systems and Database were also upgraded and is now scalable for SAP usage at much higher levels and at better speed. The drive undertaken for last few years to harness IT for bringing about operational efficiency and cost controls continues with the same vigour through further business process automations, process refinements and tighter controls supported by intelligent reporting and alert mechanisms.

Highbar, the successful spin-off from your Company''s internal IT function, has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

5. Subsidiaries, Joint Ventures and Associate Companies

During the year under review, the following changes have taken place with respect to subsidiaries, joint Ventures and Associate Companies:

a) HCC Power Ltd (the wholly owned step-down subsidiary company) has incorporated HCC Energy Ltd, a wholly owned subsidiary company on August 11, 2015, making it a subsidiary of your Company from the date of its incorporation.

b) Ecomotel Hotel Ltd (Associate Company) has become a subsidiary (step-down subsidiary Company) of your Company w.e.f. July 15, 2015.

c) Apollo Lavasa Health Corporation Ltd (step-down subsidiary Company) and Starlit Resort Ltd (step- down subsidiary Company) have become an Associate Company w.e.f. November 16, 2015 and May 14, 2015 respectively.

d) HCC Concessions Ltd (the step-down subsidiary company) has transferred its 74% stake in Nirmal BOT Ltd on December 23, 2015; accordingly Nirmal BOT Ltd ceases to be a subsidiary of your Company w.e.f. December 23, 2015.

e) HCC Concessions Ltd (the step-down subsidiary company) has transferred its equity stake in Dhule Palesner Tollway Ltd, a joint venture company on 29.10.2015; accordingly HCC ceases to hold any share in the said joint venture Company w.e.f. from 29.10.2015.

f) Sirrah Palace Hotels Ltd (step-down subsidiary Company) has ceased to be a subsidiary of your Company w.e.f. November 6, 2015.

Subsidiary Companies

1. Western Securities Ltd

2. HCC Aviation Ltd

3. HCC Construction Ltd

4. Highbar Technologies Ltd

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited

7. HCC Mauritius Investment Limited

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM ST AG

11. Eurohotel SA

12. Steiner (Deutschland) GmbH

13. Steiner Leman SAS

14. SNC Valleiry Route De Bloux

15. Steiner India Ltd

16. HCC Infrastructure Company Ltd

17. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

18. Badarpur Faridabad Tollway Ltd

19. Baharampore - Farakka Highways Ltd

20. Farakka - Raiganj Highways Ltd

21. Raiganj - Dalkhola Highways Ltd

22. Dhule Palesner Operations & Maintenance Ltd

23. HCC Power Ltd

24. HCC Energy Ltd

25. HCC Operations & Maintenance Ltd

26. Narmada Bridge Tollway Ltd

27. HCC Real Estate Ltd

28. HRL Township Developers Ltd

29. HRL (Thane) Real Estate Ltd

30. Nashik Township Developers Ltd

31. Maan Township Developers Ltd

32. Charosa Wineries Ltd

33. Powai Real Estate Developers Ltd

34. HCC Realty Ltd

35. Pune-Paud Toll Road Company Ltd

36. Panchkutir Developers Ltd

37. Lavasa Corporation Ltd

38. Lavasa Hotel Ltd

39. Lakeshore Watersports Company Ltd

40. Dasve Convention Centre Ltd

41. Dasve Business Hotel Ltd

42. Dasve Hospitality Institutes Ltd

43. Lakeview Clubs Ltd

44. Dasve Retail Ltd

45. Full Spectrum Adventure Ltd

46. Spotless Laundry Services Ltd

47. Lavasa Bamboocrafts Ltd

48. Green Hill Residences Ltd

49. My City Technology Ltd

50. Reasonable Housing Ltd

51. Future City Multiservices SEZ Ltd

52. Rhapsody Commercial Space Ltd

53. Valley View Entertainment Ltd

54. Warasgaon Tourism Ltd

55. Our Home Service Apartments Ltd

56. Warasgaon Power Supply Ltd

57. Sahyadri City Management Ltd

58. Hill City Service Apartments Ltd

59. Kart Racers Ltd

60. Warasgaon Infrastructure Providers Ltd

61. Nature Lovers Retail Ltd

62. Osprey Hospitality Ltd

63. Warasgaon Valley Hotels Ltd

64. Rosebay Hotels Ltd

65. Mugaon Luxury Hotels Ltd

66. Warasgaon Assets Maintenance Ltd

67. Hill View Parking Services Ltd

68. Whistling Thrush Facilities Services Ltd

69. Verzon Hospitality Ltd

70. Ecomotel Hotel Limited Integrated Joint Ventures

1. HCC-L&T Purulia Joint Venture

2. HCC Samsung Joint Venture CC-34

3. Alpine Samsung HCC Joint Venture

4. Alpine HCC Joint Venture

5. Nathpa Jhakri Joint Venture

6. Kumagai -Skanska-HCC Itochu Group

7. ARGE Prime Tower, Zurich Associate Companies

1. Nirmal BOT Limited

2. Warasgoan Lake View Hotels Limited

3. Andromeda Hotels Limited

4. Knowledge Vistas Limited

5. Bona Sera Hotels Limited

6. Apollo Lavasa Health Corporation Ltd

7. Starlit Resort Ltd

8. Evostate AG

9. Projektentwicklungsges,

Parking Kunstmuseum AG.

10. MCR Managing Corp. Real Estate AG

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company forms part of the Consolidated Financial Statements of the Company for the financial year ended March 31, 2016.

The Company has formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/ HCC Policy for determining Material Subsidiaries. pdf

6. Qualified Institutions Placement of Equity Shares (QIP) / Change in Share Capital

During the year under review, your Company''s Authorised Share Capital has remained unchanged at Rs. 100,00,00,000 (Rupees One hundred crore) comprising 90,00,00,000 Equity Shares of Rs. 1 each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10 each.

On April 10, 2015, your Company has issued and allotted 13,33,32,800 Equity Shares of Rs. 1 each at an issue price of Rs. 30 per Equity Share (including premium of Rs. 29 per equity share) for an amount aggregating Rs. 399,99,84,000 to Qualified Institutional Buyers in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Section 42 of the Companies Act, 2013 and the Rules made thereunder.

Post the QIP Issue, the present paid up Equity Share Capital of the Company is Rs. 77,91,58,906 which comprises 77,91,58,906 Equity Shares of Rs. 1 each.

7. Public Deposits

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

8. Particulars of Loans, Guarantees & Investments

Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Companies Act, 2013 (Hereinafter "The Act") are given in the notes to the Standalone Financial Statements.

Also, pursuant to Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement) Regulations, 2015, particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Standalone Financial Statements.

9. Employee Stock Option Scheme (ESOP)

As on March 31, 2016, 16,54,630 stock options are outstanding, in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, no options got vested in the employees of the Company. 15,84,700 stock options got lapsed between April 1, 2015 and March 31, 2016.

The particulars with regard to the ESOPs as on March 31, 2016 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.

10. Consolidated Financial Statements

In accordance with the Companies Act, 2013, Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures and as prescribed by Regulation 33 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), the Audited Consolidated Financial Statements are provided in this Annual Report.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of each of the subsidiary and joint venture in the prescribed form AOC-1 is annexed to the Annual Report.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the subsidiaries are kept for inspection by the shareholders at the Registered Office of the Company. The said financial statements of the subsidiaries are also available on the website of the Company www.hccindia.com under the Investors Section.

11. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India(SEBI).

The report on Corporate Governance as prescribed in Schedule V (C) of the SEBI Listing Regulations forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance alongwith a declaration signed by the Chairman & Managing Director stating that the members of the Board of Directors and Senior Management personnel have affirmed compliance with the respective codes of conduct of the Board of Directors and Senior Management is attached to the report on Corporate Governance.

12. Directors

Mr. D. M. Popat, Director of the Company, who was liable to retire by rotation at the 89th Annual General Meeting of the Company held last year had expressed his intention not to seek re-election as a Director of the Company and accordingly had retired from his directorship on July 14, 2015.

After a prolonged illness, Mr. Popat passed away on December 23, 2015. The Board of Directors has expressed its deep regret and offered condolences on the sad demise of Mr. Popat.

Mr. Popat was a Senior partner at M/s Mulla & Mulla & Craigie Blunt & Caroe, Solicitors & Advocates since 1969 and was one of the most eminent solicitors of the country. He was associated with our Company for a very long time.

The Board has also placed on record the invaluable contribution of Late Mr. D. M. Popat to the Board and the Company.

The Board of Directors of the Company at its meeting held on May 2, 2016 has appointed Mr. Rajgopal Nogja as the Group Chief Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016.

Pursuant to his appointment, Mr. Nogja has stepped down from the Board as Group COO & Whole-time Director w.e.f. May 2, 2016.

The Board placed on record its appreciation for the valuable services rendered and contribution made by Mr. Rajgopal Nogja during his tenure as Whole-time Director (prior to his appointment as Group CEO) of the Company.

Mr. N. R. Acharyulu was employed with our Company as Chief Business Development Officer and on conclusion of his contract period, the Board of Directors has appointed Mr. N. R. Acharyulu (DIN: 02010249) as an Additional Director on the Board of the Company in the category of Non-Executive Director, who is liable to retire by rotation, with effect from May 2, 2016, in accordance with Section 161 of the Companies Act, 2013 read with Article 88 of the Articles of Association of the Company.

The Company has received a Notice under Section 160 of the Companies Act, 2013, from a member signifying an intention to propose Mr. N. R. Acharyulu as a candidate for the office of Director at the forthcoming Annual General Meeting.

Brief Profile of the Director seeking appointment has been given in the Explanatory Statement to the Notice of the ensuing Annual General Meeting.

The Company has received Form DIR-8 from all Directors pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

The Independent Directors of the Company viz.,

Mr. Rajas R, Doshi, Mr. Ram P. Gandhi, Mr. Sharad M. Kulkarni, Mr. Anil C. Singhvi and Dr. Omkar Goswami have furnished necessary declarations to the Company under Section 149(7) of the Act, confirming that they meet with the criteria of Independence as prescribed for Independent Directors under Section 149(6) of the Act and Regulation 16(b) of the SEBI Listing Regulations.

13. Key Managerial Personnel

Following persons are the Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

i) Mr. Ajit Gulabchand, Chairman and Managing Director

ii) Mr. Rajgopal Nogja, Group Chief Executive Officer

iii) Mr. Arun V. Karambelkar, President & CEO - E&C

iv) Mr. Praveen Sood, Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office

v) During the year under review, Mr. V. P. Kulkarni, resigned as Company Secretary with effect from July 30, 2015 and therefore he was a Key Managerial Personnel till July 30, 2015

The Board placed on record its appreciation for the valuable services rendered and contribution made by Mr. Vithal P. Kulkarni during his long tenure as Company Secretary of the Company.

vi) Mr. Sangameshwar Iyer was appointed by the Board of Directors, in place of Mr. V. P. Kulkarni, as the Company Secretary of the Company with effect from July 31, 2015 and thereby is designated as Key Managerial Personnel with effect from the said date.

vii) Mr. Rajgopal Nogja was appointed by the Board of Directors of the Company at its meeting held on May 2, 2016, as the Group Chief Executive Officer (Group CEO) of the Company w.e.f. May 3, 2016. Pursuant to his appointment, Mr. Nogja has stepped down from the Board as Group COO & Whole-time Director w.e.f. May 2, 2016.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2016 are mentioned in the Extract of the Annual Return which is attached to the Board''s Report.

14. Board Committees

The Board of Directors of your Company had already constituted various Committees and approved their terms of reference/role in compliance with the provisions of the Companies Act, 2013 and Listing Agreement (applicable uptil November 30, 2015)/ SEBI Listing Regulations (applicable from December 1, 2015) viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and CSR Committee.

During the financial year 2014-15, in accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, the Board had voluntarily constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Report on Corporate Governance in the Annual Report.

15. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.

The Board of Directors of your Company met 4 times during 2015-16. The meetings were held on April 30, 2015, July 30, 2015, October 29, 2015 and January 28, 2016. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

16. Familiarisation Programme of Independent Directors

In compliance with the requirements of SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.

The details of the familiarization program are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by web link http://www.hccindia. com/pdf/familiarisation_program_for_independent_ directors.pdf

17. Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p), 149(8) and Schedule IV of the Companies Act, 2013 and Regulation 17 of the SEBI Listing Regulations, Annual Performance Evaluation of the Directors as well as that of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

18. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 29, 2016, inter-alia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

19. Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel

The Nomination and Remuneration Committee has laid down well-defined criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by them and approved by the Board of Directors, which is attached to the Board''s Report as Annexure II.

20. Remuneration Policy for Directors, Key Managerial Personnel and Senior Management Employees

The Nomination and Remuneration Committee has laid down the policy for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by it and approved by the Board of Directors, which is attached to the Board''s Report as Annexure II.

21. CSR Policy

The brief outline of the Corporate Social Responsibility (CSR) Policy as recommended by the CSR Committee of the Directors and approved by the Board of Directors of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure IV of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR policy is attached to this Report as Annexure III and is available on the website of the Company i.e. www.hccindia.com

22. Related Party Transactions

All related party transactions entered during the year were in the ordinary course of business and on an arm''s length basis.

The related party transactions attracting compliance under Section 177 of the Companies Act, 2013 and / or erstwhile Clause 49 of the Listing Agreement / Regulation 23 of the SEBI Listing Regulations were placed before the Audit Committee for approval.

There are no transactions to be reported in Form AOC-

2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014.

There were no related party transactions which were placed for prior omnibus approval of the Audit Committee.

A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.

Further the details of the transactions with Related parties are provided in the Company''s financial statements in accordance with the Accounting Standards.

The Related Party Transactions Policy as approved by the Board of Directors of the Company has been uploaded on the website of the Company at http:// www.hccindia.com/pdf/HCC_Policy_for_Related_ Party_Transactions.pdf

23. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date.

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

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

e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are generally operated effectively during the year.

Internal financial control over carrying cost of investment in subsidiaries and recoverability of dues from subsidiaries, is covered under internal financial control.

The management is of the view that diminution in the carrying cost of investment in subsidiaries, if any, is temporary in nature and recoverability of dues from subsidiaries are good. The view of the management is also supported by a third party expert report.

However, in view of the uncertainties involved, your Auditors have given a qualified opinion in their report in this regard, without quantifying the impact. Other than this, your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting (IFCoFR) and that they were operating effectively.

This response by Directors is based on the management note given under Para 29 of this report.

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

24. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

25. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has, during the year under review, transferred a sum of Rs. 11,95,382 to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount represents dividend for the year 2007-08 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

26. Particulars of Employees and other additional information.

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of Companies Act, 2013 and Rule 5 (1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure V to this Report.

The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the said Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.

28. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai, bearing Firm Registration No. 001076N as the Statutory Auditors of the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the above said AGM).

Rule 3(7) of Companies (Audit and Auditors) Rules, 2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.

At the 89th AGM held on July 14, 2015, the shareholders had ratified the appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai for the period covering their second year of appointment viz., from the conclusion of the last AGM held on July 14, 2015 until the conclusion of the Annual General Meeting to be held in the financial year 2016-17.

The said appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants, Mumbai covering their third year of appointment viz, from the conclusion of the ensuing AGM in financial year 2016-17 until the conclusion of the next Annual General Meeting to the held in the financial year 2017-18, has to be ratified by Members at the forthcoming AGM and accordingly the said proposal is being placed for members'' ratification.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the Rules made thereunder, as may be applicable.

29. Statutory Auditors'' Remarks

a. Statutory Auditors Qualification:

The Auditors'' Report to the Members on the Audited Financial Results of the Company for the financial year ended March 31, 2016 contains the following qualification(s):

As stated in Note 32 to the Standalone financial statements, the Company''s long term investments as at March 31, 2016 include investments aggregating Rs. 474.37 crore in its subsidiaries, namely, HCC Real Estate Limited and Lavasa Corporation Limited; and the long term loans and advances, non-current assets and other current assets as on that date include dues from such subsidiaries aggregating Rs. 554.17 crore, Rs. 32.51 crore and Rs. 13.35 crore, respectively, being considered good and recoverable by the management. However, these subsidiaries have accumulated operational losses and their net worth is fully/ substantially eroded as at March 31, 2016. Further, such subsidiaries are facing liquidity constraints due to which they may not be able to realize projections made as per their business plans. In the absence of sufficient appropriate evidence, we are unable to comment upon the carrying value of these investments and recoverability of the aforesaid dues and the consequential impact, if any, on the accompanying standalone financial statements.

b. Statutory Auditor''s Qualification on the Internal Financial Controls relating to the above matter

The Auditors'' Report to the Members on the Internal Financial Controls over financial reporting (IFCoFR) with respect to the Audited Financial Results of the Company for the financial year ended March 31, 2016 contains the following qualification(s):

In our opinion, according to the information and explanations given to us and based on our audit procedures performed, the following material weakness has been identified in the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2016:

The Company did not have appropriate internal financial controls over financial reporting in respect of its assessment of (a) ''other-than- temporary'' diminution in the carrying value of the Company''s long-term investments in its subsidiaries and (b) recoverability of long-term loans and advances, non-current assets and other current assets due from such subsidiaries. The inadequate supervisory and review controls over Company''s process in respect of its aforesaid assessment in accordance with the accounting principles generally accepted in India could potentially result in a material misstatement in the carrying value of investment in such subsidiaries and the aforesaid dues from such subsidiaries and consequently, also impact the profit after tax.

In our opinion, except for the effects of the material weakness described above in the Basis for Qualified Opinion paragraph, the Company has, in all material respects, maintained adequate IFCoFR as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance note and were operating effectively as at March 31, 2016.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company, and the material weakness has affected our opinion on the standalone financial statements of the Company and we have issued a qualified opinion on the standalone financial statements.

Management Note

The Company, as at March 31, 2016, has (i) an investment amounting to Rs. 474.36 crore (31 March 2015: Rs. 474.36 crore), long term loans and advances Rs. 443.96 crore (31 March 2015:

Rs. 404.06 crore), other non-current assets Rs. 19.43 crore (31 March 2015: Rs. 25.01 crore) and other current assets Rs. 5.07 crore (31 March 2015: Rs. 3.43 crore) in HCC Real Estate Limited (HREL) which is holding 68.70% share in Lavasa Corporation Limited (LCL) and (ii) an investment amounting to Rs. 0.01 crore (March 31, 2015:

Rs. 0.01 crore), long term loans and advances Rs. 110.21 crore (March 31, 2015:Nil), other non- current assets Rs. 13.08 crore (March 31, 2015:

Rs. 14.30 crore) and other current assets Rs. 8.28 crore (31 March 2015: Rs. 77.24 crore) in LCL. While such entities have incurred losses during its initial years and consolidated net-worth of all these entities as at March 31, 2016 has been substantially/fully eroded, the underlying project in such entities are in the early stages of development and are expected to achieve adequate profitability on substantial completion and / or have current market value of certain properties which are in excess of the carrying values, hence net-worth of these subsidiaries does not represent its true market value. Therefore, the decline in the value of above investments is considered to be temporary in nature and the loans and advances, non-current assets and other current assets together with the interest thereon are good and recoverable.

Based on the above, management believes that the Company''s internal financial control in respect of assessment of the carrying value of investment, recoverability of loans and advances, current and non-current assets in subsidiaries were operating effectively and there is no material weakness in such controls and procedures.

30. Secretarial Audit

Secretarial Audit for the financial year 2015-16 was conducted by M/s BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

31. Cost Audit

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on July 30, 2015 had appointed M/s Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the financial year 2015-16. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for financial year 2015-16.

32. Risk Management

Pursuant to the requirement of Section 134 (3)(n)of the Companies Act, 2013, the Company has already in place a Risk Management Policy.

The Company has a robust Business Risk Management (BRM) framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance your Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level.

In accordance with the provisions of the erstwhile Clause 49 of the Listing Agreement, during the financial year 2014-15, the Board had voluntarily constituted the Risk Management Committee.

33. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

34. Internal Financial Controls and their adequacy

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Companies Act 2013.

35. Vigil Mechanism Policy

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company at www.hccindia.com

36. Sexual Harassment

HCC has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. HCC has a well formulated Policy on Prevention & Redress of Sexual Harassment. The objective of the policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The policy covers all employees, irrespective of their nature of employment and also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.

During the year 2015-16, one case of Sexual Harassment was reported which was investigated by a committee (including an external member) as defined under the Policy of Prevention & Redress of Sexual Harassment and appropriate action was taken in the said case.

37. Reporting of Frauds:

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.

38. Significant and Material Orders passed by the Regulators/Courts, if any

There are no significant or material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of your Company and its future operations.

39. Material changes & commitment if any, affecting financial position of the Company from the end of financial year till the date of the report.

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

40. Extract of Annual Return

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.

41. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all Stakeholders Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued Investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJIT GULABCHAND

Chairman & Managing Director



Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083

Place: Mumbai

Date: June 3, 2016


Mar 31, 2015

The Members of Hindustan Construction Co. Ltd.

1. Report

The Directors are pleased to present the 89th Annual Report together with the Audited Financial Statements for the year ended March 31,2015.

2. Financial Highlights

Particulars Year ended Year ended March 31,2015 March 31,2014 Rs crore Rs crore

Turnover 4,301.14 4,113.49

Profit before Interest, Depreciation, Exceptional Items, 781.77 643.76 Other Income andTax

Less: Finance Costs 651.13 607.94

Depreciation 150.30 144.61

801.43 752.55

Add: Other Income 134.53 213.59

Add/Less: Exchange Gain/(Loss) 12.45 (13.85)

Profit before Tax 127.32 90.95

Less: Tax Expense 45.67 10.31

Profit/(Loss) after Tax 81.65 80.64

Add: Balance brought forward from last year 69.00 (11.64)

Less: Impact of depreciation/amortisation 2.73 - (Refer Note 3.2 of the Financial Statements)

Balance carried to Balance Sheet 147.92 69.00

3. Dividend

As your Company is under CDR, it is necessary to conserve and optimise use of resources to improve the health of the Company. Hence, your Directors have not recommended any dividend for the financial year ended March 31, 2015.

4. Operations

The turnover of the Company at Rs. 4,301 crore has shown an increase of 4.6% as compared to Rs. 4,113 crore for the previous year. The profit before tax is Rs. 1273 crore (including exceptional item) as compared to Rs. 90.9 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

- Numaligarh to Jorhat Section of NH 37, Assam Contract Value: Rs. 455 crore,

- Indo Nepal Borderto Rudhauli Section of NH-233, Uttar Pradesh Contract Value: Rs. 393 crore

- Jamugurihat-Biswanath Chariali Bypass NH-52, Contract Value: Rs. 392 crore,

- Delhi Metro Tunnel Package CC-66, NCR Contract Value: Rs. 300 crore

- Munirka Flyover, New Delhi Contract Value: Rs. 278 crore,

- Kolkata Elevated Road Contract Value: Rs. 257 crore

- Sawra Kuddu Hydroelectric Project, Himachal Pradesh Contract Value: Rs.180 crore

- Bhandup Complex Pipeline IV, Mumbai Contract Value: Rs.120 crore

- RIL Civil Works, Gujarat Contract Value: Rs. 88 crore

The total balance value of works on hand as on March 31,2015 is Rs.14,451 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 22 packages amounting to around Rs. 13,987 crore (HCC share Rs. 13,673 crore). Tenders for various packages for 45 projects worth over Rs. 36,766 crore (HCC share Rs. 28,583 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 24 projects worth over Rs. 15,606 crore (HCC share Rs. 13,454 crore) which are under evaluation.

Operations of Subsidiaries

i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

Lavasa has kept its rationale of developing a smart city for all and is tailoring partnerships and tie ups with global leaders. Partnerships are well in place and many of these projects are moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for opening in April 2016. Projects with renowned hospitality players like Formule One, Holiday Inn, Langham and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant -The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its seventh year of successful operations with an occupancy of 66%. Accor Mercure is in its sixth year of successful operation with an occupancy at 56%. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Additionally agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf Academy and Sir Steve Redgrave Rowing Academy.

On the retail front, a significant area has already been leased. Restaurants like Smokin Joe''s, VenkysXpress, Subway, Cafe Coffee Day, Baskin Robbins, All American Diner, Granma''s Homemade Patisserie, Chor Bizarre, Oriental Eight, Past Times Pub, Tabakh, Pizzavala, Naashta Paani, Paanchi Krunchyand Indulge have commenced operations. Many other non F&B outlets such as Mapro, Charosa Wine Boutique and Health First Organic store have successfully started operations including Lavasa''s first miniplex- Fun Square Digital Cinema.

Significant progress was made in the education space. Christel House Lavasa is into its sixth year of operations with 445 students. 2014-15 also saw launch of Phase 2 of Christel House till grade 6th. Corporate entities such as EduSports, Yoga Blessing and Linguaphone showed keen interest to contribute towards Christel House Lavasa School by way of sports programmes, educational and Yoga workshops.,

Ecole Hoteliere Lavasa started its sixth batch in 2014- 15. The seventh batch will commence from 28th July 2015. In May 2015, the third batch of the institute graduated and received their certification from Ecole Hoteliere de Lausanne. Christ University started its first batch with 14 students in 2014-15 & is commencing its second batch for the academic year 2015-16 with the target batch size of 60 students for PGDM program with specialization in Finance and Marketing.

Knowledge Vistas Limited (KVL) is already running Little Millennium, pre primary school at Lavasa for last five years. It is also likely to start the k12 school from academic year 2016-17 Abhinav Shiksha Sansthan, New Delhi will start from the academic year 2017-18 across the area of 62,500 sq. ft. Other educational partners like Symbiosis Institute (Pune) are also in the process of launching their programs.

Lavasa continued to enjoy healthy sales in residential and commercial space. In institutional sales, the company closed the transaction with Hindustan Times Media Limited, the premier media establishment which has acquired over 6 acres of land. The media house proposes to establish a state-of-art training centre for its executive staff. A proposal has also been submitted to The Times Group to start a premier management training institute on land it has acquired in Mugaon.

The Doon Public School has acquired a 10 acre plot in Mugaon to start its brand of school. Till the project is completed the school would operate out of an incubation space in Dasve.

Hazel Hotels that had acquired 2 plots of land aggregating to 2.1 acres with BUA of 40,000 sft has been granted building plan approval by SPA and proposes to commence construction of a Ramada Encore branded hotel. J Vora Hospitality is all set for a soft launch of its 80 keys vegetarian hotel in Dasve by December 2015. SOSFIPL, an NGO has obtained SPA approval for a bakery with a BUA of 20,000 sq.ft in Bhoini and will commence construction activity this year.

Symbiosis Institute has already been granted building plan approval and will commence construction of its large campus post monsoon.

Lavasa continued its focus on branding and communication activities in 2014 - 15. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages. Positioning Lavasa city as India''s first smart city, building preference and restoring customer confidence in the project were the key goals.

A new advertisement campaign was launched in May 2014- Unlocking India''s Potential to capitalize on the cause of 100 smart cities. Primary thought behind the campaign that ran from May to June 2014 was that if India needs to grow, infrastructure needs to grow in sync. India needs ''New cities'' and Lavasa is one such new city which can serve as a prototype for creating new cities. This campaign was followed by a Smart City Campaign that positioned Lavasa as India''s First Smart city. The campaign highlighted the various ''smart'' aspects of Lavasa through a nationwide advertising campaign using the Times of India and Hindustan Times group publications. Simultaneously magazines such as Forbes were used to spread this message. The print campaign was ably supported by outdoor, on-site media, digital and social media. Media coverage of the event and interviews with spokespersons resulted in the news being carried by both print and electronic media.

Lavasa continued with its strategy of creating large events at Lavasa to attract the right footfalls. Events held during the year were Martial Arts Festival,

Marathi Box Cricket League, FAME 2014, Freedom 2014, Mirchi Queen Bee, The Lost Party and Gladrags Mrs. India. Digital and social media channels were leveraged primarily for engagement and for information dissemination. The new mobile-friendly website was launched in April 2014 with a contemporary look & feel. Lavasa also initiated e-mailer campaigns to selected databases of Times of India and Hindustan Times and tied up with Google to create ''Google Street view'' for our first town, Dasve

In 2014-15, the Public Relations campaign focused on positioning Lavasa city as India''s first smart city with focused efforts towards building preference and restoring customer confidence in the project. To enable this, a number of site visits were organized

for media, the primary influencers and other key influencers of public opinion. Through the year over 75 journalists from print, TV, news wires and web media from Mumbai, Pune and Lavasa region visited Lavasa. Meetings with senior editors and constant engagement with beat reporters led to better appreciation of company''s stand on issues and presentation of a balanced perspective on most issues. Stories in leading magazines, newspapers and international publications were initiated to convey that development work at Lavasa has commenced with right earnest and that the company is committed to developing the city. Tourism stories in travel and trade media were initiated to promote Lavasa city as a premier tourist destination. Lavasa as a cultural hub was promoted by leveraging travel and lifestyle media to publicize the city''s initiatives like the World Fest 2014, Freedom 2014 and FAME 2014 festival.

Promotional initiatives of various Special Purpose Vehicles like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town & Country Club, Mercure Lavasa Fortune Select Dasve, Lakeshore Watersports and X Thrill were publicized through news stories, editorial feature stories and photo features.

Lavasa city now has a full-fledged operational Farmer''s market known as Hara Bazaar; a two screen movie theatre for visitors and residents; It has a fully operational post office, a hospital with pharmacy and several new food and beverage establishments open for business. It also has four operating hotels and four additional hotels will be opening soon which collectively will take the total number of hotel rooms in Lavasa to more than 600. Lavasa has a Petrol Pump, two Bank branches along with ATMs, a Convention Centre, a public safety centre with Fire engine, Police outpost to be upgraded to a full-fledged police station, Tourist information center with a Hop On - Hop Off Bus facility, Multilevel Car parking facilities, Nature trail, Citizen contact center with 24x7 support to citizens through emergency and non-emergency contact numbers, rental housing for low income groups, simulated golf course facilities; water sports facility with latest "Jetovator'',''adventure sports facility, a modern club with gym, sports and spa facilities, public transport system for citizens, Schools for local population and two operational College campuses.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. The drinking water at Lavasa is fit for

consumption, straight from the tap, without the need for additional filtration. The sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50km. of well maintained motor able roads are operational and more being constructed, Lavasa has already opened parks and play areas to the public.The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

Around the clock Lavasa Citizen Call Centre has been operational since 2009-2010. The Call Centre is a one-stop information source for non emergency and emergency related services. It provides a single window resolution for all customer needs and visitor requests, be involved in proactive information distribution, data collection and management services, customer satisfaction surveys and customer handover and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting. It is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, Public Works, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The City Management Services Department envisions to slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. It meets on a monthly basis with a committee of villagers from throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

Lavasa Corporation has 10574 acres of land including 455 acres of land on lease.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. The Environmental Compliance Report is being submitted to MoEF once in six months. The last report was submitted in December 2014 and work of Biodiversity conservation and enhancement continues at the

required pace. Lavasa Sustainability report for the period 2010-13 was prepared and accorded highest rating application level A as per GRI guidelines.

Lavasa also became a member of Cll-Western Region Sub-Committee for Environmental Business and has contributed its learning and experience within the region.

First town, Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services which are operational. Till date more than 801 residential units have been handed over to CMS department and over 677 residential units have been handed over to customers. Work on rest of few properties - Lake View apartments, Club View apartments, Delfino apartments, Valley View apartments, BrookViewapartments, Rental housing, Retail and hostel tower B, Christel House Phase II, Novotel Hotel and Holiday Inn is in progress.

Work on the infrastructure for the second town of Mugaon has been accelerated. Work on utilities like water, sewer, power, data lines and on the approach road is in progress. Work on 29 buildings at Mugaon has commenced. The improvement to the existing Mugaon-Tamhini Zilla Parishad road is complete. The portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. Work on the inter village road from Mugaon to Dhamanohol is complete (6 kms).

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 62 locations on a daily basis. Calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, creche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/ AIDS, malaria, nutrition, and water borne diseases. Employment and self employment opportunities to the locals have also been provided.

Ministry of Environment and Forests (MOEF) Issue

As you are aware that Lavasa was issued a show cause Notice by Ministry of Environment & Forests (MoEF), Government of India (GOI) regarding violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). The Company made various representations as per the directions given by the authorities and after complying the conditions stipulated, MOEF GOI was pleased to accord the Environmental Clearance to the Company. Herein below given are the updates in the matter during the Financial Year 2014 - 2015:-

1. Transfer Petition (C) No. 1326 of 2012 filed by your Company for transferring the National Green Tribunal (NGT) Appeal No. 9 of 2012 filed by Dyaneshwar Shedge was listed before the Registrar for completing the pleadings. Earlier, the Hon''ble Supreme Court, vide its order dated October 19, 2012, stayed the proceeding before NGT The Transfer Petition was listed before Hon''ble Supreme Court on August 04, 2014, wherein after hearing the parties in the matter, the Hon''ble Supreme Court was pleased to pass the following order:-

"Looking at the facts of the cases, we are of the view that these petitions should be heard either by the Green Bench or by another appropriate Bench. The Registry to place the matters before the Hon''ble the ChiefJustice oflndia so that appropriate orders may be passed."

The Company''sTransferPetition (C) No. 1326 of

2012 along with Civil Appeal being No. 4280 of

2013 and Contempt Petition being No. 203 of 2013 filed against Dyaneshwar Shedge are pending before the Hon''ble Supreme Court for disposal.

2. NGT Appeal No. 36 of 2011 filed by the Company was listed on October 16, 2014 and the Hon''ble Tribunal was pleased to adjourn the matter sine-die till decision of Apex Court.

3. The record and proceedings in NGT Appeal No. 9 of 2012 filed by Dyaneshwar Shedge have been transferred to Hon''ble Supreme Court in view of the stay granted by Apex Court.

4. Public Interest Litigation (PIL) No. 129 of 2014 filed by Suniti S R and others (Petitioners), wherein the Company is Respondent No 12, was listed before the Hon''ble Bombay High Court on August 11, 2014, wherein the Hon''ble Court issued "Rule"

in the matter without passing any adverse order against the Company. The Company has filed further Affidavit in Reply in the matter on October 01,2014.

The Petitioners have on December 10, 2014 filed a Civil Application being No. 186 of 2014 for amending the PIL interalia to challenge Environmental Clearance grated to your Company. On December 16, 2014 PIL No. 129 of 2014 was tagged with Writ Petition No. 3836 of 2014 and the same stands adjourned. Meanwhile the Company is in the process of filing reply to the Civil Application No. 186 of 2014, and the matter is currently pending.

Further, the Company is regularly filing six monthly compliance report as per the Environmental Clearance order.

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into the business of building residential & office complexes in real estate sector.

HRL (Thane) Real Estate Limited

HRL (Thane) Real Estate Ltd. a subsidiary of HREL initiated the acquisition of 183 acres of land at Ghodbunder Road, Thane for Integrated Township Development. Till date, the Development Agreement and Power of Attorney for 32 acres have been executed in favour of the Company. The Company continued its activity of securing its position for land title and other documentation.

The Company has filed a criminal case against Mr. Atul Sonawala and 8 others, Director of Om Gurukripa Realtors Pvt. Ltd. Police enquiry is under process for the said case.

HRL Township Developers Limited

No activities were carried out during the year. Company continued its search process for joint development opportunities

NashikTownship Developers Limited

During the year, the Company has sold its land and completed all the land related transactions. For further opportunities, the Company is looking for joint development opportunities in residential sectors since Nashik city is growing industrially as well as economically.

Maan Township Developers Limited

Maan Township Developers Ltd a subsidiary of HREL has acquired approximately. 28 acres of land by way of purchase and the Development Agreement and Power of Attorney have been executed in favor of the Company.

The company has now decided to sell the land in piece parcels. Powai Real Estate Developers Limited

No activities were carried out during the year. However, the company continued to look for an opportunity to find ideal land parcels for joint development in residential sectors.

HCC Realty Limited

No activities were carried out during the year. Panchkutir Developers Limited

During the year, your Company continued its efforts on the following projects in the residential sector.

Development of Vikhroli (E) land parcel: Out of the total land holding of around 32 acres by Panchkutir Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-1 of 14.5 acres of land to ascertain the development potential of the free sale component is completed. Out of the 1960 slum residents, consent of about 1400 residents representing more than 70% has already been obtained and the process for forming the society is in progress.

Slum declaration of Phase-1 land was challenged and the same has been set aside by the Special Slum Tribunal. Subsequently, the litigant filed a Writ Petition challenging the above said Order of the Slum Tribunal in Bombay High Court . The High Court upheld the 3C order and asked the Tribunal for actual verification of slum details. Against this order, the litigant has filed an appeal challenging the above said Order of the Slum Tribunal on divisional board in High Court.

Development of Powai land: MOU-cum-Development Agreement and Power of Attorney were executed by the land owner in favour of the Special Purpose Vehicle , Panchkutir Developers Ltd., a subsidiary of HCC for 12 acres of land. Due to non performance by the land owner of the various obligations under the MOU- cum-Development Agreement in spite of repeated reminders, the company has been legally advised to invoke the Arbitration clause forming part of the MOU- cum-Development Agreement. Accordingly, Arbitration proceedings have been initiated and till date recording of the evidence of Claimant''s witnesses has been completed and the matter is now stated for hearing in July 2015 for evidence of Respondent.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned

subsidiary of your Company, develops and operates infrastructure concessions in transportation, power and water sector through its subsidiaries, viz.

HCC Concessions Ltd., HCC Power Ltd., and HCC Operations & Maintenance Ltd. The current portfolio has six NHAI road concessions, totaling about Rs.5,500 crore, housed under HCC Concessions.

Your Company''s focus on sustainable and responsible development through the Public Private Partnership results from expertise in concept innovation, risk analytics, construction management and operations. The strong management team at the Company follows a strict investment discipline to create value for its members. Along with a focus on financial discipline, quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

In 2011, the Xander group, a global investment firm, valued HCC Concessions Limited at Rs.1,650 crore and had acquired a 14.5% stake therein.

Current Road Portfolio:

HCC Concessions has a current portfolio of Rs. 5,500 crore which includes six NHAI road concessions. These include one annuity and five toll based projects: Nirmal (annuity) in Telangana (erstwhile Andhra Pradesh) on NH7, the Delhi Faridabad Elevated Expressway (dfskyway™) on NH2, Dhule Palesner Highway in Maharashtra on NH3 and three contiguous sections of 250 km in West Bengal on NH34. Of these, Nirmal Annuity, diskyway™, Dhule Palesner Highway and the first leg of NH34''s development, the Baharampore Farakka Highway are operational.

The four operational projects have been operational for between one and five years and are running smoothly. Farakka Raiganj Highway, the second leg of NH-34 development in West Bengal is expected to be operational later this year while the last leg, Raiganj Dalkhola has seen significant improvement in terms of land acquisition and work is expected to start shortly. Material defaults by NHAI, largely due to delayed handing over of land for all three NH-34 packages have resulted in the Concessionaire''s filing of a claim of Rs. 883 crore as damages from NHAI as on June 30, 2014. Despite the aforementioned delays and a recessionary environment in the past few years, the NH-34 projects continue to be a substantial source of value creation for the portfolio.

During the past year, there was very limited opportunity for new projects since only about 740 km were awarded by NHAI. HCC Concessions has chosen to focus on the execution of its under construction projects and also raise capital through stake sale at attractive valuations.

The Company will evaluate NHAI projects in the next financial year, albeit conservatively, while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH-3)

The project road is part of NH-3, commonly referred to as the Agra-Mumbai road, originating from Agra and ending at Mumbai. It is a primary conduit for transportation of passengers as well as freight traffic from the state of Uttar Pradesh to major towns in the states of Madhya Pradesh and Maharashtra. In FY09, NHAI awarded a contract for the development of a four lane highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to an HCC led consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months. The project was operational in February 2012, about 4 months ahead of its scheduled completion. The project has been developed at a total investment of Rs. 1,420 crore.

The operation of project road is running smoothly. During the year, the Company implemented the 10x tolling for Overloaded vehicles in line with the NHAI Fee Rules. NHAI also handed over the land for the Developed Section from Km 219.7 to Km 233.0 after a delay of 1.5 years. The contractor has started the mobilization and is expected to finish the work on the remaining 2 lanes within six months. The daily toll revenue is expected to increase by about Rs. 2-3 lakhs after this development. The remaining concession period for the project is about 13 years.

Pursuant to the interest expressed by the Sadbhav Group to acquire the Company''s stake in the SPVs, the Company has also entered into definitive agreements with the Sadbhav Group for the sale of its entire economic stake in Dhule PalesnerTollway Ltd. The transaction is subject to receipt of necessary approvals.

Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™ )

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway

connecting Delhi and Haryana at Badarpur. This award winning engineering marvel designed and developed by HCC Concessions Ltd with an investment of nearly Rs. 600 crore boasts 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. The dfskywa/M contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor that benefits residents and inter-state traffic alike.

The project''s concession period is 20 years, including construction period of 24 months. Of the three satellite cities, Faridabad is under-developed and under-priced relative to other parts of NCR. However, since the development of this asset, there has been a 30-40% increase in property prices (2008-10).

Besides, Faridabad has been ranked as the 8th fastest developing city by The City Mayors Foundation. This asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBC TV18.

In February 2013, this SPV has undergone restructuring of its debt due to revenues falling short of projections which is mainly attributed to the prolonged economic slowdown in the country (coinciding with COD) and the existence of toll free local road, which is being used by the long distance vehicles to escape paying toll charges.

In order to enhance the revenue on this project and reduce maintenance costs, the Company is in the process of implementing 10x tolling for overloaded vehicles in accordance with NHAI Fee Rules. The Company has also submitted a comprehensive proposal for advertising along the project highway. The project is a signature project in Delhi having very high visibility and the Company is expecting significant revenues from the latter sources.

Nirmal Annuity (NH-7)

This project road from Kadtal to Armur inTelengana (erstwhile Andhra Pradesh) is a part of the Nagpur- Hyderabad section of NH-7 In FY07, NHAI awarded the development of four-laning of 30 km long Kadtal Armur Section of NH-7 on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore. This project was operational in July 2009, 100 days ahead of the scheduled completion

date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for a 17 year tenure.

As part of the capital raising activity, the Company has signed definitive agreements for the 100% sale of this project to Highway Concessions One Pvt Ltd (an entity majorly held by IDFC Alternatives managed India Infrastructure Fund). Highway Concessions One will acquire a 74% equity stake upfront, while the remaining 26% shall be acquired upon receipt of an approval from NHAl.The Company is working towards the fulfillment of conditions precedent and the transaction is expected to close shortly.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed efficiently by HCC Operations and Maintenance Ltd.

Baharampore Farakka Highway (NH-34)

This 101 km project is the first section of 250 km contiguous section on NH-34 (West Bengal) from Baharampore to Dalkhola and was awarded to the Company in 2010.

NH34 provides nearest access to Kolkata and Haldia ports for the north eastern states of India and neighbouring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises 85-90% commercial traffic, carrying a diversified mix of manufactured goods, building materials, steel, jute, food grains and tea.

The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680.

The project achieved commercial operations in May 2014 and has been tolling smoothly. The operations and maintenance is being managed by HCC O&M Ltd. The Company implemented the 10x tolling for overloaded vehicles on this project in August 2014 to enhance revenue and reduce maintenance costs and was amongst the first few in the country to implement the same.

The completion of the project is delayed by 22 months as of March 2015, largely due to material defaults by NHAI in providing land on a timely basis. Provisional Completion (PCOD) was achieved 9 months after SFLD (Scheduled Four-laning Date) and Final Completion (FCOD) will be delayed by a total of 35 months due to delayed handover of Right of Way (ROW), tardy design clearances for major bridges and structures, removal

of various hindrances, utilities shifting, etc. As of June 30, 2014, the Concessionaire has filed Rs. 290.85 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority will be a lengthy process, the SPV meanwhile approached its Lenders in August 2014 to assist in funding the delays and has subsequently received support from its Lenders.

The concession period for the project is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,169 crore.

As part of its capital raising activity, the Company has entered into a non-binding Term Sheet for the sale of 100% stake in the project, subject to requisite clearances and approvals. The proposed transaction is expected to close by the end of Q1FY16 after the diligence process and documentation is completed.

Status of Assets under Development:

Farakka Raiganj Highway (NH-34)

The project road starts from Farakka at Km 294.680 and ends at Raiganj at Km 398.000. The Farakka Raiganj section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,378 crore.

A substantial stretch (79%) of roads and structures of this second and largest leg of NH-34 development has been completed and toll collection is expected to commence by the year end. In the last year, almost the entire land has been made available for construction after a long delay. The completion of the project is delayed by 22 months as of March 2015, largely due to material defaults by NHAI in providing land on a timely basis. The Provisional Completion (PCOD) is estimated to be achieved 29 months after SFLD (Scheduled Four-laning Date) while Final Completion (FCOD) will be delayed by a total of 37 months due to delayed handover of Right of Way (ROW), tardy design clearances for major bridges and structures, removal of various hindrances, utilities shifting, etc. As of June 30, 2014, the Concessionaire has filed Rs. 322.72 crore of

claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims tor increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile approached its Lenders in August 2014 to assist in funding the delays and has subsequently received support from its Lenders.

Raiganj Dalkhola Highway

This is the northern section of the NH-34 development, starting at Raiganj (Km 398.000) and terminating at the town of Dalkhola (Km 452.750). The 50 km project stretch traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years which includes a construction period of 30 months. The project is being implemented with an investment of Rs. 684 crore.

The project progress has been very slow due to the non-availability of land. In the year 2014-15, a significant portion of land has been made available for construction after a delay of over 4 years. The Company expects to receive 80% of unencumbered vacant land in the coming months when execution will restart. As of June 30, 2014, the Concessionaire has filed Rs. 269.31 crore worth of claims from the NHAI for the damages suffered due to NHAI defaults. The Concessionaire will submit further claims for increased costs beyond June 30, 2014. Since the realization of claim from the Authority is a lengthy process, the SPV meanwhile has approached its Lenders in February 2015 to assist in funding the delays and has subsequently received positive indications from its Lenders.

iv) Steiner AG, Switzerland

Steiner AG is a leading total and general contracting company in Switzerland, specialized in turnkey building construction including refurbishments and real estate development.

Your Company owns 100% stake in Steiner AG through HCC Mauritius Enterprises Limited and HCC Mauritius Investment Limited, Wholly Owned Subsidiaries.

In FY2014-15, Steiner AG has registered a revenue of CHF 853.9 million (Rs. 5604.2 crore) compared to CHF 796.7 million (Rs. 5,228.7 crore) in the previous year.

The net profit stood at CHF 1.7 million (Rs. 11.2 crore) compared to CHF 8.15 million (Rs. 53.4 crore). The company secured fresh orders worth CHF 796 million

(Rs. 5,106 crore). The order backlog was CHF 1.12 billion (Rs. 7195 crore) at the end of the year. In addition to this, the company has secured orders for more than CHF 192 million (Rs. 1,232 crore), where the contracts are yet to be signed. The closing cash balance of the company was CHF 103 million (Rs. 658.5 crore) reflecting company''s steady financial performance and strong liquidity position.

v) HighbarTechnologies Ltd

HighbarTechnologies Ltd (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

Highbar was able to service 16 new customers including 6 new customers from Middle East, Africa and Switzerland taking the total tally of clients to 94. This has been achieved at a time when the primary customer segment, the construction industry, is facing multiple challenges. Despite this, in a short span of time, Highbar has started dominating the ''IT for Infrastructure'' market. Your Company''s group legacy has enabled Highbar to understand and service these industries effectively. The orders won by Highbar have contributed highest value through net new customers in SAP Ecosystem for infrastructure sector in calendar year 2014. Highbar has started providing SAP related services in multiple sectors like Manufacturing, BPO, Agro-Chemicals in addition to Infrastructure, Real Estate, Retail, Telecom, Consumer Products, PEB (Pre-engineered Buildings), Iron & Steel etc. It has developed capabilities to execute successfully very large size projects concurrently. Customers have demonstrated their faith in Highbar for a long term association by awarding 5 years support deal in addition to implementation.

After securing first order in last year, Highbar has started expanding its reach in government sector by exploring opportunities. Its Dubai subsidiary, Highbar Technologies FZ-LLC, has now started strengthening its presence counting ten major customers in the Middle- East in a short span of time. Highbar now operates not only in India and Middle-East but also in Africa (Nigeria) and Europe (Switzerland).

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence and dashboards, cloud offerings through Highbar CloudConnect,

Employee Portals, CRM (Customer Relationship Management), DMS (Document Management System) and others. Highbar has also ventured into SAP HANA implementation thisyear. Newofferings like SAP Fiori, Screen Persona, Mobility solutions, e-procurement through Ariba sourcing solutions have increased the breadth of the offerings for the customers. The stack of services provided by Highbar has gone much beyond SAP into process consulting and IT Infrastructure support (data-centre, networking etc.) Solutions like Highbar RapidStart and Highbar RapidStart Analytics are based on the templatised approach for ERP and Business Intelligence respectively and are intellectual properties (IP) assets of Highbar. Highbar has maintained a strategic alliance with SAP at the level of ''Gold Partnership'' and it''s a preferred partner for SAP implementation and even reimplementation for the infrastructure industry. More than ten of Highbar''s implementation have now become global case studies, published on SAP''s website as reference implementations.

Highbar, the spin-off from your Company''s internal IT function, has succeeded, when the success rate of such experiments is just 5% globally & in India. Highbar has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

5. Subsidiaries, Joint Ventures and Associate Companies

As of 31st March 2015, the list of Subsidiaries, Joint Ventures and Associate Companies of your Company is as follows:-

Subsidiary Companies

1. Western Securities Ltd

2. HCC Aviation Ltd

3. HCC Construction Ltd

4. Highbar Technologies Ltd

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited 7 HCC Mauritius Investment Limited

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM ST AG

11. Eurohotel SA

12. Steiner (Germany) GmbH

13. Steiner Leman SAS

14. SNC Valleiry Route De Bloux

15. Steiner India Ltd

16. HCC Infrastructure Company Ltd

17 HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

18. Nirmal BOT Ltd

19. Badarpur Faridabad Tollway Ltd

20. Baharampore - Farakka Highways Ltd

21. Farakka-RaiganjHighwaysLtd

22. Raiganj - Dalkhola Highways Ltd

23. Dhule Palesner Operations & Maintenance Ltd

24. HCC Power Ltd

25. HCC Operations & Maintenance Ltd

26. Narmada Bridge Tollway Ltd 27 HCC Real Estate Ltd

28. HRL Township Developers Ltd

29. HRL (Thane) Real Estate Ltd

30. NashikTownship Developers Ltd

31. Maan Township Developers Ltd

32. CharosaWineriesLtd

33. Powai Real Estate Developers Ltd

34. HCC Realty Ltd

35. Pune-Paud Toll Road Company Ltd

36. Panchkutir Developers Ltd 37 Lavasa Corporation Ltd

38. Lavasa Hotel Ltd

39. Apollo Lavasa Health Corporation Ltd

40. Lakeshore Watersports Company Ltd

41. Dasve Convention Centre Ltd

42. Dasve Business Hotel Ltd

43. Dasve Hospitality Institutes Ltd

44. LakeviewClubsLtd

45. Dasve Retail Ltd

46. Full Spectrum Adventure Ltd 47 Spotless Laundry Services Ltd

48. Lavasa Bamboocrafts Ltd

49. Green Hill Residences Ltd

50. My City Technology Ltd

51. Reasonable Housing Ltd

52. Future City Multiservices SEZ Ltd

53. Rhapsody Commercial Space Ltd

54. Valley View Entertainment Ltd

55. Sirrah Palace Hotels Ltd

56. Warasgaon Tourism Ltd

57 Our Home Service Apartments Ltd

58. Warasgaon Power Supply Ltd

59. Sahyadri City Management Ltd

60. Hill City Service Apartments Ltd

61. Kart Racers Ltd

62. Warasgaon Infrastructure Providers Ltd

63. Nature Lovers Retail Ltd

64. Osprey Hospitality Ltd

65. Starlit Resort Ltd

66. Warasgaon ValleyHotelsLtd 67 Rosebay Hotels Ltd

68. Mugaon Luxury Hotels Ltd

69. Warasgaon Assets Maintenance Ltd

70. Hill ViewParkingServicesLtd

71. Whistling Thrush FacilitiesServices Ltd

72. Verzon Hospitality Ltd Joint Ventures

1. HCC-L&TPuruliaJoint Venture

2. HCCSamsungJoint Venture

3. AlpineSamsungHCCJoint Venture

4. AlpineHCCJoint Venture

5. NathpaJhakriJoint Venture

6. Kumagai -Skanska-HCC Itochu Group

7. Dhule Palesner Tollway Limited

8. AGRE Prime Tower Associate Companies

1. Vikhroli Corporate Park Pvt Ltd

2. Warasgoan Lake View Hotels Limited

3. Andromeda Hotels Limited

4. Ecomotel Hotel Limited

5. Knowledge Vistas Limited

6. Bona Sera Hotels Limited

7. Evostate AG

8. Projektentwicklungsges Parking AG.

9. MCR Corporation Real Estate AG

The details as required under Rule 8 of the Companies (Accounts) Rules, 2014 regarding the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies of the Company form part of the Consolidated Financial Statements of the Company for the financial year ended 31st March 2015 and hence are not repeated here for the sake of brevity.

The Company has also formulated a Policy for determining material subsidiaries, which is uploaded on the website of the Company i.e. www.hccindia.com and can be accessed at http://www.hccindia.com/pdf/ HCC Policy for determining Material Subsidiaries.pdf

6. Qualified Institutions Placement of Equity Shares (QIP) / Change in Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

Pursuant to the conversion of 3,92,15,686 warrants by the Promoter Companies i.e. Hincon Holdings Ltd and Hincon Finance Ltd , 3,92,15,686 equity shares of Rs. 1/- each, in aggregate, was alloted by your Company to the aforementioned Promoter Companies, at a conversion price of Rs. 16.32/- per equity share (including premium of Rs. 15.32/- per equity share) the Company''s paid up Equity Share Capital increased from Rs. 60,66,10,420/- comprising 60,66,10,420 Equity Shares of Rs.1/- each to Rs. 64,58,26,106/- comprising 64,58,26,106 equity shares of Rs. 1/- each.

After the close of the financial year under review, on April 10, 2015, your Company has issued and allotted 13,33,32,800 Equity Shares of Rs.1/- each at an issue price of Rs. 30/- per Equity Share (including premium of Rs. 29/- per equity share) for an amount aggregating Rs. 399,99,84,000/-to Qualified Institutional Buyers in accordance with Chapter VIII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended and Section 42 of the Companies Act, 2013 and the rules made thereunder.

Post the QIP Issue, the paid up Equity Share Capital of the Company is Rs. 77,91,58,906/- which comprises 77,91,58,906 Equity Shares of Rs. 1/- each.

7 Public Deposits

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

8. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Also, pursuant to Clause 32 of the Listing Agreement, the particulars of Loans/Advances given to Subsidiaries have been disclosed in the notes to the Financial Statements.

9. Employee Stock Option Scheme (ESOP)

As on March 31,2015, 32,39,330 stock options are outstanding , in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, no options got vested in the employees of the Company. 14,55,470 stock options got lapsed between April 1,2014 and March 31,2015.

The particulars with regard to the ESOP as on March 31,2015 as required to be disclosed pursuant to the provisions of Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, are set out in Annexure I to this Report.

10. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31,2015, 17,300 GDSs have remained outstanding which forms part of the existing paid up Equity Share Capital of the Company.

11. Consolidated Financial Statements

In accordance with the Companies Act, 2013 and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited Consolidated Financial Statements are provided in this Annual Report.

12. Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by Securities and Exchange Board of India(SEBI).

The report on Corporate Governance as per the requirement of the Listing Agreement forms an integral part of this Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

13. Directors

As per the provisions of Section 152 of the Companies Act, 2013, Mr. D. M. Popat, Director of the Company retires by rotation at the ensuing Annual General Meeting. However, Mr. D. M. Popat has expressed his intention not to seek re-election as a Director of the Company.

During the year under review, the Board of Directors of the Company at its Meeting held on July 31,2014, appointed Ms. Harsha Bangari as Nominee Director (Nominee of Exim Bank) w.e.f. July 31,2014.

Based on the recommendation of the Nomination and Remuneration Committee and after reviewing the declarations submitted by Mr. Rajas R. Doshi and Mr. Anil C. Singhvi, Independent Directors, the Board of Directors of the Company by way of resolution dated March 17, 2015 passed by circulation, formed an opinion that the said Directors meet with the criteria of Independence as per Section 149(6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meet with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, for being appointed as the Independent Directors on the Board of the Company.

Mr. Rajas R. Doshi and Mr. Anil C. Singhvi, who were appointed as "Directors liable to retire by rotation" under the provisions of the erstwhile Companies Act, 1956 and who qualify for being appointed as Independent Directors of the Company are proposed to be appointed at the ensuing Annual General Meeting as Independent Directors of the Company under section 149 of the Companies Act, 2013 for the period w.e.f. March 17, 2015 upto the conclusion of the 93rd Annual General Meeting of the Company to be held in the calendar year 2019.

On the recommendation of the Nomination and

Remuneration Committee and after reviewing the declaration submitted by Dr. Omkar Goswami, Independent Director, the Board of Directors of the Company at its Meeting held on April 30, 2015 formed an opinion that the said Director meets with the criteria of Independence as per Section 149(6) of the Companies Act, 2013 ("the Act") and the rules made thereunder and also meets with the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges and accordingly appointed Dr. Omkar Goswami as an Additional Director to hold office as an Independent Director of the Company w.e.f. April 30, 2015 upto the conclusion of the 93rd Annual General Meeting of the Company to be held in the calendar year 2019.

The Board of Directors at its Meeting held on April 30, 2015, on the recommendation of the Nomination and Remuneration Committee, appointed Ms. Shalaka Gulabchand Dhawan as Additional Director and also as Whole-time Director of the Company for a period of five years w.e.f. April 30, 2015, subject to the approval of the Members of the Company.

Your Company has received the requisite disclosures / declarations from Mr. Rajas R. Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms. Shalaka Gulabchand Dhawan as required under the relevant provisions of the Companies Act, 2013.

Your Company has also received Notices under Section 160 (1) of the Companies Act, 2013 from members signifying their intention to propose Mr. Rajas R.

Doshi, Mr. Anil C. Singhvi, Dr. Omkar Goswami and Ms. Shalaka Gulabchand Dhawan as candidates for the office of Independent Director / Director at the ensuing Annual General Meeting.

Further, your Company has also received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of Independence as prescribed under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges.

Profiles of the Directors seeking appointment have been given in the Notice of the ensuing Annual General Meeting of the Company.

14. Key Managerial Personnel

During the year under review, in addition to Mr. Ajit Gulabchand, Chairman and Managing Director and Mr. Rajgopal Nogja, Group COO & Whole-time Director of the Company, the following three Senior Executives of the Company were formally appointed as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013

i) Mr. Arun V. Karambelkar was appointed as President & Chief Executive Officer - E&C w.e.f. April 29, 2014

ii) Mr. Praveen Sood was appointed as Chief Financial Officer of the Company designated as Group CFO & EVP - HCC Group Office w.e.f. April 29, 2014

Hi) Mr. Vithal P Kulkarni to continue to act as Company Secretary of the Company.

Remuneration and other details of the said Key Managerial Personnel for the financial year ended March 31, 2015 are mentioned in the Extract of the Annual Return which is attached to the Board''s Report.

15. Board Committees

The Board of Directors of your Company had already constituted various Committees in compliance with the provisions of the Companies Act, 2013 /Listing Agreementviz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, CSR Committee and ESOP Compensation Committee.

During the year under review, in compliance with the provisions of Clause 49 of the Listing Agreement, the Board had also constituted the Risk Management Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of reference / role of the Committees are taken by the Board of Directors.

Details of the role and composition of these Committees, including the number of meetings held during the financial year and attendance at meetings, are provided in the Corporate Governance Section of the Annual Report.

16. Nomination and Remuneration Policy

The Nomination and Remuneration Policy recommended by the Nomination and Remuneration Committee is duly approved by the Board of Directors of the Company and the Remuneration Policy of the Company is attached to the Board''s Report as Annexure II.

17 CSR Policy

The Corporate Social Responsibility Policy recommended by the CSR Committee of the Directors has been approved by the Board of Directors of the Company. The same is available on the website of the Company i.e. www.hccindia.com and is also attached to this Report as Annexure III.

The disclosure relating to the amount spent on Corporate Social Responsibility activities of the Company for the financial year ended 31st March 2015 is attached to this Report as Annexure IV.

18. Meetings

A calendar of Board Meetings, Annual General Meetings and Committee Meetings is prepared and circulated in advance to the Directors of your Company.

The Board of Directors of your Company met 4 times during 2014-15. The meetings were held on May 2, 2014, July 31,2014, October 30, 2014 and January 29, 2015. The maximum time gap between any two consecutive meetings did not exceed one hundred and twenty days.

19. Directors'' Responsibility Statement

In accordance with the provisions of Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any ;

b) the selected accounting policies were applied consistently and the Directors made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the year ended on that date.

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

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

e) the internal financial controls have been laid down to be followed by the Company and such controls are adequate and are operating effectively

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

20. Industrial Relations

The industrial relations continued to be generally peaceful and cordial during the year.

21. Transfer to Investor Education and Protection Fund (IEPF)

Your Company has, during the year under review, transferred a sum of Rs. 9,17,451/- to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2005-06 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

22. Particulars of Employees and other additional information.

The information required under Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as Annexure V. The information as required under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request by any member of the Company. In terms of Section 136 (1) of the Companies Act, 2013, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure.

Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

The information relating to the Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required to be disclosed under the Companies (Accounts) Rules, 2014, is given in Annexure VI forming part of this Report.

24. Statutory Auditors

The Members of the Company had, at the 88th Annual General Meeting ("AGM") held on June 20, 2014, approved the appointment of M/s Walker Chandiok & Co. LLP Chartered Accountants, Mumbai, bearing ICAI Registration No. 001076N as the Statutory Auditors of

the Company, to hold office from the conclusion of that AGM until the conclusion of the 6th AGM held thereafter (subject to ratification of the appointment by the Members at every AGM held after the abovesaid AGM).

Rule 3(7) of Companies (Audit and Auditors) Rules,

2014, states that appointment of the Auditor shall be subject to ratification by the members at every Annual General Meeting till the expiry of the term of the Auditor.

In view of the above, the existing appointment of M/s Walker Chandiok & Co. LLR Chartered Accountants, Mumbai covering the period from the conclusion of this ensuing AGM until the conclusion of the next Annual General Meeting to the held in the FY 2016-17, is being placed for members'' ratification.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Companies Act, 2013 and the rules made thereunder, as may be applicable.

25. Auditors'' Report

The Auditors'' Report to the Members on the Accounts of the Company for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

26. Secretarial Audit

Secretarial Audit for the FY 2014-15 was conducted by M/s BNP Associates, Company Secretaries in Practice in accordance with the provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor''s Report is attached to this Report as Annexure VII. There are no qualifications or observations or remarks made by the Secretarial Auditor in his Report.

27. Cost Audit

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on 31st July 2014 had appointed M/s Joshi Apte & Associates, Cost Accountants as Cost Auditors of the Company for the FY 2014-15.ln terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of The Companies (Audit and Auditors) Rules, 2014, the

remuneration of the Cost Auditors has to be ratified by the members. Acordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for FY 2014-15.

28. Risk Management

Pursuant to the requirement of Section 134 of the Companies Act, 2013, the Company has already in place a Risk Management Plan.

The Company has a robust Business Risk Management (BRM) framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on the business objectives and enhance your Company''s competitive advantage.

The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level.

In accordance with the provisions of Clause 49 of the Listing Agreement, your Company has also constituted a Risk Management Committee.

29. Significant and material Orders passed by the Regulators/Courts, if any

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations.

30. Internal Control Systems and their adequacy

The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies within the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant observations and corrective actions thereon are presented to the Audit Committee from time to time.

31. Vigil Mechanism Policy

The Company has a vigil mechanism policy to deal with instances of fraud and mismanagement, if any. The vigil mechanism policy is uploaded on the website of the Company.

32. Performance Evaluation

Pursuant to the provisions of Section 134 (3) (p),

149(8) and Schedule IV of the Companies Act, 2013 and Clause 49 of the Listing Agreement, annual Performance Evaluation of the Directors as well as of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee has been carried out.

The Performance Evaluation of the Independent Directors was carried out by the entire Board and the Performance Evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

33. Independent Directors Meeting

During the year under review, the Independent Directors of the Company met on March 18, 2015, inter- alia, to discuss:

i) Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

ii) Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non- Executive Directors.

iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

34. Related PartyTransactions

All related party transactions attracting compliance under Section 188 and / or Clause 49 of the Listing Agreement are placed before the Audit Committee as also before the Board for approval.

Prior omnibus approval of the Audit Committee is also sought for transactions which are of a foreseen and repetitive nature.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors of the Company is uploaded on the website of the Company i.e. www.hccindia.com

Pursuant to the approval vide Board Resolution dated May 2, 2014 and Special Resolution passed by the Members of the Company at the 88th Annual General

Meeting of the Company held on June 20, 2014, the remuneration payable to Mr. Arjun Dhawan, President & CEO - Infrastructure Business relative of Mr. Ajit Gulabchand, Chairman and Managing Director of the Company, who is holding office or place of profit in the Company, was revised w.e.f. November 1, 2014. During the year under review, the remuneration paid to Mr. Arjun Dhawan, President & CEO - Infrastructure Business of the Company was Rs. 2.92 crore.

The disclosures on related party transactions are made in the Financial Statements of the Company.

35. Extract of Annual Return

The details forming part of the extract of Annual Return in prescribed Form MGT 9 is annexed hereto as Annexure VIII and forms the part of this Report.

36. Sexual Harassment

During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

37 Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJIT GULABCHAND Chairman & Managing Director

Registered Office:

Hincon House, 11th Floor, 247Park, Lai Bahadur Shastri Marg Vikhroli (West) Mumbai 400 083

Place : Mumbai Date : April 30, 2015


Mar 31, 2014

The Directors are pleased to present the 88th Annual Report together with the Audited Financial Statements for the year ended March 31, 2014.

2. Financial Highlights

Year ended Year ended Particulars March 31, 2014 March 31, 2013 Rs. crore Rs. crore

Turnover 4,113.49 3,837.29

Profit before Interest, Depreciation, Exceptional Items, Other 643.76 378.57

Income and Tax

Less: Interest 607.94 544.10

Depreciation 144.61 163.40

Exceptional Items - 752.55 (15.58) 691.92

Add: Other Income 213.59 134.34

Add/Less: Exchange Gain/(Loss) (13.85) (14.57)

Profit/(Loss) before Tax 90.95 (193.58)

Less: Deferred Tax Charge/(Credit) 10.31 (55.94)

Profit/(Loss) after Tax 80.64 (137.64)

Add: Balance brought forward from previous year (11.64) 126.00

Balance carried to Balance Sheet 69.00 (11.64)

3. Dividend

As the Company is under Corporate Debt Restructuring (CDR), your Directors have not recommended any dividend for the financial year ended March 31, 2014, although the Company has earned profits in the year under review.

4. Operations

The turnover of the Company at Rs. 4,113 crore has shown an increase of 72% as compared to Rs. 3,837 crore for the corresponding period in the previous year. The profit before tax is Rs. 90.9 crore (including exceptional item) as compared to loss of Rs. 193.6 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

- Vishnugad-Pipalkoti Hydroelectric Project, Uttarakhand

Contract Value: Rs. 1597 crore

- Railway LinkTunnel T49 A, Jammu and Kashmir Contract Value: Rs.442 crore

- Bridge across River Sone, Bihar Contract Value: Rs.432 crore

- Yettinahole Project, Package IV

Contract Value: Rs. 904 crore, HCC share 50%

The total balance value of works on hand as on March 31, 2014 is Rs. 14,249 crore.

Decisions are awaited from various clients for tenders submitted by the Company for 13 packages amounting to about Rs. 7,038 crore (HCC share Rs. 6,054 crore). Tenders for various packages for 29 projects worth over Rs. 18,972 crore (HCC share Rs. 13,696 crore) are expected to be submitted in the near future. The Company has also submitted prequalification bids for 26 projects worth over Rs. 20,439 crore (HCC share Rs. 17,747 crore) which are under evaluation. Operations of Subsidiaries

i) Lavasa Corporation Ltd. (''Lavasa'') has kept its rationale of developing an inclusive city for all and is tailoring partnerships and tie ups with global leaders in their respective sectors. Tie-ups continued strongly at Lavasa through 2013-14. Partnerships are well in place and many of these projects are fast moving towards completion.

In the hospitality space, the Accor group is successfully running its operation with the two brands - Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Another brand of the Accor group - Novotel is scheduled for completion by 2015. Projects with renowned hospitality players like Pullman, Hyatt, Formule One, Holiday Inn, Holiday Inn Express, Langham Place and Eaton amongst others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant -The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve is in its fifth year of successful operations. Dasvino Town & Country Club, which had a grand launch in early 2010 is growing steadily with growing number of membership. In the tourism space, Lakeshore Water sports, Neo Spark Games Arcade and Xth rill Adventure Sports & Academy are also functioning successfully. Agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf and Sir Steve Redgrave Rowing Academy.

On the retail front, a significant area has already been leased.

In addition to F&B outlets, many other tie-ups have been finalized in the retail segment which include Bata Showroom, Charosa Wine Boutique, Fun Square Digital Cinema, Venkys Express and Keppys.

There were other tie-ups in the tourism space. Lavasa is in advance stage of discussion with Paramount & Redbull to create Edutainment theme park in Dasve & Mugaon. Along with this stimulator Golf & Robotic park for edutainment is started in Family Entertainment Center (FEC).

A significant progress was also made in the education space. Christel House Lavasa is into its fourth year of operations with 329 students. 2013-14 also saw launch of Phase 2 of Christel House till grade 5th.

Ecole Hoteliere Lavasa started its fifth batch in 2013- 14. The second batch will receive academic certification from Ecole hotèlierè dè Lausanne this year.

Doon Public School has signed a MOU to operate K12 school in Knowledge Vistas Limited (KVL) from FY 2014-15. KVL is already running Roots to wings, pre primary school at Lavasa for last three years. PACE academy will also start IIT training program from KVL this year. GREAT (INDIA) in collaboration with Australian Retail College, which is a leader in retail training in Australia is planning to open a retail college at Lavasa. Other educational partners like Symbiosis Institute (Pune) and Christ University (Bangalore) are also in the process of launching their programs. Discussions are on to establish North Hampton University at Lavasa by 2014-15 as well as preparation course school under Ideal classes from 5th to 12th standard.

Lavasa continued to enjoy healthy sales in residential and commercial space. Positive sales trend continued throughout the year, with the Company giving possession to 250 plus residential units in Dasve. Construction activity on various properties at Dasve and the second town of Mugaon is progressing at a fast pace.

In institutional sales, L&T Infra Finance has entered into an understanding to buy 40 acres of land in Dasve and Mugaon. This heralds the entry of big time corporations into Lavasa and would surely prove as an impetus for others. Similarly, Hindustan Times, the premier media establishment is in advanced negotiations to acquire over 6 acres of land. The media house proposes to establish a state-of-art training centre for its executive staff. A proposal has also been submitted to The Times Group to start a premier management training institute on land it has acquired in Mugaon a few years ago. The Doon Public School has acquired a 10 acre plot in Mugaon to start its brand of school. Till the project is completed the school would operate out of an incubation space in Dasve.

Symbiosis Institute has already been granted building plan approval and will commence construction of its large campus post monsoon.

Lavasa continued its focus on branding and communication activities in 2013-14. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages.

The focus of the exercise was on building preference and restoring customer confidence in the project. To enable this, a number of site visits were organized for media, the primary influencers and other key influencers of public opinion.

A new advertisement campaign was launched in September 2013 to promote the second town Mugaon as a residential and edutainment hub. The print campaign positioning Mugaon as the entertainment hub was ably supported by outdoor, on-site media, digital and social media. The comprehensive campaign helped generate awareness for the launch and resulted in a good number of customer enquiries.

A new format of Brand Induction was implemented where all new employees were exposed to an interactive workshop on KNOWYOUR CITY To promote tourism and drive footfalls, attractive day and stay packages and activities were offered to visitors through the Lavasa Holidays Summer Special (April to June 2013), Mesmerizing Monsoon (July to September 2013) and Lavasa Holidays Festive Fiesta (October to December 2013) packages. The focused campaign resulted in tourist traffic surging to all time high. At the onset of monsoon in June, Lavasa witnessed the highest footfall with nearly 1 lakh tourists enjoying the serene landscape. Total footfalls in the calendar year were 7,74,300.

Lavasa won the ''Most promising new Destination'' and the ''Best Print Promotional Material'' awards at the premiere industry event, Travel and Tourism Fair held in Mumbai and Pune.

Strategic and design support to Special Purpose Vehicles (''''SPVs'''') was provided on a need basis.

The sixth edition of the signature brand event Lavasa Women''s Drive set a Guinness World Records TM for- Most Female Participants in a Motor Sport Event. To achieve this global recognition 934 participants in 467 cars drove from Mumbai and Pune to picturesque Lavasa on February 22, 2014.

Other events that were held during the year include Lavasa Hill Run (Positioned as first health run of the year, January 2014), Pune Bicycle championship (October 2013), Diwali Dhamaka (November 2013) and Vintage Car Show (December 2013).

Digital and social media channels were leveraged primarily for engagement and for information dissemination. The channels were extensively used to promote events, respond to queries and initiate conversations on platforms like travel, tourism and discussion forums on urbanization. Innovative approaches like road block on www.economictimes. com made sure the visitors to the website had to mandatorily view the Lavasa banner, introduction of interest - a virtual pinboard to share pictures and an integral application which allowed users to upload pictures through integral using #capturinglavasa were activated during the course of the year.

In 2013-14, the Public Relations campaign focused on building preference and restoring customer confidence in the project. Meetings with senior editors in Mumbai and Pune and the constant engagement with beat reporters in Mumbai and Pune led to better appreciation of Company''s stand on issues. This resulted in them presenting a balanced perspective on most issues.

Promotional initiatives of various SPVs were publicized through news stories, editorial feature stories and photo features.

The city of Lavasa now has a new post office, a new school, a hospital and more than a dozen food and beverage establishments open for business. It also has four operating hotels with three more under construction, a Petrol Pump , two bank branches along with ATMs, a convention centre, a public safety centre with Fire engine, Police outpost, Tourist information center, Multilevel Car parking facilities, Nature trials, Citizen contact centre, State of the art Hospital with pharmacy, rental housing for low income groups , games arcades, water sports facility, adventure sports facility , a modern club with gym, sports and Spa facilities , public transport system for citizens , Schools for local population etc.

Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability The drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration. The sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. Over 50km. of well maintained motor able roads are operational and more being constructed, Lavasa has already opened parks and play areas to the public. The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

A round the clock Lavasa Citizen Contact Centre that has been set up this year, envisions to make the lives of the citizens and visitors easy and convenient. The Lavasa Citizen Contact Centre will be a one-stop information source for non emergency and emergency related services. It will provide a single window resolution for all customer needs and visitor requests, be involved in proactive information distribution, data collection and management services, Customer

Satisfaction Surveys and Customer handover and possession.

The City Management Services (CMS) Department is equally dynamic in seeking to coordinate services in this rapidly changing setting.

CMS is currently divided into seven specialist divisions including Customer Services, Public Safety & Security, Enterprise Utilities, Public Works, Administration & Finance, Community Development and Geographic Information Systems & Management Information Systems.

The City Management Services Department will slowly evolve into a new governance entity that will, at some point, be the core of a new replicable governance model. The City Management Services Department meets on a monthly basis with a committee of villagers from throughout the project area. The Village Committee is the first of several such citizen advisory groups that will together form a key component of the Lavasa citizen and stakeholder engagement mechanisms.

Lavasa has completed purchase of 10477 acres of land and is processing completion of another 2133 acres, for which agreements were signed in the past. Steps to reach an overall land purchase target of 18000 acres are in progress.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. The Environmental Compliance Report is being submitted to MoEF once in six months and the June 2013 and December 2013 reports have already been submitted.

The work of Biodiversity conservation and enhancement continues at the required pace. In the case of flora, around 130 trees have been transplanted with a survival rate of 70%. The maintenance of around 45,000 trees which were planted in Mugaon in the year 2012 has been rigorously carried out with full survival. In case of aquatic fauna, the resultant growth of 28,000 fish seeds which were released in Dasve Lake in year 2012 has been found to be satisfactory and this has been verified in the presence of Fisheries officer, Govt. of Maharashtra.

For slope protection and enhancing the greenery within the region, soil bioengineering (biodegradable coir mats have been applied over the slopes) and plantation of stumps has been done. Hydro-seeding & manual seeding was also carried out for slope protection and to re-establish vegetation over an area covering around 70 acres in this season and the total area that has been so treated is more than 700 acres till date. Tree plantation of around 1,25,000 tree saplings was carried out in Mugaon and Bhoini. New Plantation in the nursery at Bhoini continues and there is adequate plant stock as it is a feeder for mass plantation and other internal landscaping requirements. Both the nursery and mass plantation have been organically certified.

Techno-commercial evaluation of renewable sources of energy feasible at Lavasa has been completed by TERI (Tata Energy Resources Institute). Lavasa is also exploring possibilities for green certification of its total city development.

First Town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. As on date more than 120 contractors with a work force of about 4500 workers have been mobilized at site for different works.

Till date more than 600 residential units have been handed over to CMS department and over 500 residential units have been handed over to customers. Out of these 600 units. 319 Villas were given to the CMS department for hand over to customers. Of these 319 villas, 212 Villas have already been handed over to the customers. Work on another 284 villas of different types, with built- up area ranging from 2000 sq. ft. to 4000 sq. ft. is in progress.

Work on the infrastructure for the second town of Mugaon has been accelerated. Work on utilities like water, sewer, power, data lines and on the approach road is in progress. The improvement to the existing Mugaon-Tamhini Zilla Parishad road is complete. The portion of this road will also form a part of the approach road for the proposed tunnel between Tamhini and Mugaon. The work on the inter village road from Mugaon to Gadle (6 kms) is completed

To facilitate the provision of water required during construction at Mugaon, the construction of Gadle Dam and a reservoir in Mugaon (Capacity – 1.00 Lakh cubic metre) is 90% complete. A bridge over the dam intake well and allied works are scheduled to be completed in 2014-15.

Rehabilitation work on new gaothans has commenced and by the end of the year, 50 units will be ready to accommodate villagers, along with other city infrastructure like school and community centre. This rehabilitation will also help augment the construction of the first phase of the apartments in Mugaon.

Work on 29 buildings comprising of 0.9 million square feet of salable area at Mugaon is on. It is expected to be completed in next 18 months

Lavasa has also initiated a number of development and empowerment programs for the local community. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 62 locations on a daily basis, helping villages avail benefits of Government drinking water scheme, Calligraphy workshops, aptitude tests and counseling for students of Zilla Parishad (ZP) schools, crèche for labor children; starting the Apollo Lavasa Primary Health Centre at Bhoini and provision of free health check up, medicines and ambulance service to villagers; monthly health and awareness camps for HIV/AIDS, malaria, nutrition, water borne diseases, Hepatitis B vaccination and de- worming medicines. Employment and self employment opportunities to the locals have also been provided.

Status update on Environment Clearance from Ministry of Environment and Forests (MoEF)

As you are aware that Lavasa was issued Show Cause Notice by Ministry of Environment & Forest (MoEF), Government of India (GOI) regarding violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). Lavasa made various representations as per the directions given by the authorities and after complying with the conditions stipulated, MoEF GOI was pleased to accord the Environmental Clearance to Lavasa,

Herein below given are the updates in the matter during the Financial Year 2013 - 2014 :-

1. On April 23, 2013, Appeals filed by Lavasa and Shedge before National Green Tribunal (NGT) were listed on board. The Hon''ble NGT (despite stay of further proceedings by Hon''ble Supreme Court) fixed the matter on May 14, 2013 for hearing of the application for interim reliefs and interim orders.

2. On May 1, 2013, Lavasa filed Civil Appeal bearing No. 4280 of 2013 before Hon''ble Supreme Court against the order dated April 23, 2013 of NGT The said matter was listed on May 10, 2013. Upon hearing the Counsel for Lavasa, the Hon''ble Supreme Court was pleased to issue Notice in the matter. Thereafter, on November 27, 2013, the said matter was listed before the Ld. Registrar, Supreme Court and the Ld. Registrar ordered for original records in NGT Appeal No. 9 of 2012. On the basis of the order, the records are transferred to Supreme court Registry.

3. On May 2, 2013, Lavasa filed Contempt Petition being No. 203 of 2013 before Hon''ble Supreme Court against Dyaneshwar Shedge. The said matter was listed before Hon''ble Supreme Court on July 2, 2013, and upon hearing the Counsel for Lavasa, the Hon''ble Supreme Court was pleased to list the said matter with main matter i.e. Transfer Petition.

4. On October 10, 2013, Lavasa''sWrit Petitions filed against MoEF & Ors. and other PILs filed against State of Maharashtra (wherein Lavasa is one of the Respondent party) were listed before Hon''ble Bombay High Court for transfer of the same to NGT After hearing the parties, the Hon''ble Bombay High Court said that they would peruse each petition and accordingly decide the issue of transfer to NGT

5. Lavasa''s NGT Appeal No. 36 of 2011 was listed on board before NGT from time to time and the next date of hearing is May 5, 2014.

Further, Lavasa is regularly filing six monthly compliance report as per the EC order.

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into the business of building residential & office complexes in real estate sector.

- New Real Estate Projects under bidding

HREL has procured the bidding documents for re development of Parleshwar CHS at Vile Parle (East), Mumbai.

HREL is also exploring on outright purchase of various independent plots on L.B.S. Marg at Vikhroli (W) as well as at Bhand up (W) for re-development.

- Other Projects

Other projects of HCC Real Estate Ltd. and its subsidiaries are progressing well as explained in Management Discussion and Analysis Report.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd., a wholly owned subsidiary of your Company, has six National Highways Authority of India (NHAI) road concessions in its portfolio totaling about Rs. 5,500 crore.

The Company, through its subsidiaries HCC Concessions, HCC Power and HCC Operations & Maintenance, has an infrastructure development focus through Public Private Partnership, largely in the roads, hydro power and water sectors. Your Company has a strong focus on value creation through a stringent investment discipline. The expertise of the management team extends from concept innovation and evaluation of risk & return, to construction management and operations. Along with a focus on quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

Current Road Portfolio:

The three operational projects Nirmal Annuity, Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have been operational for more than four, three and two years respectively and are running smoothly. The three under construction highway projects in West Bengal (NH34) have achieved significant progress and one of the larger projects is on the anvil of achieving the provisional completion date, while the other is expected to be operational in the first half of this year.

During the year, HCC Concessions submitted 6 Request for Qualification (RFQs). HCC Concessions partnered with other infrastructure players for certain bids to diversify risk, efficiently manage equity and increase competitiveness. The slowdown witnessed in FY13 continued in FY14 with only about 370 km road projects being awarded by NHAI on BOT mode in the current year. The Company will continue to bid for NHAI projects in the next financial year, albeit conservatively, while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH3)

The project road is section of National Highway No. 3 commonly known as Agra - Bombay road which starts at Agra, and ends at Bombay (now Mumbai). The NH 3 forms an important part in Indian National Highway network and passes through rich belts of Madhya Pradesh and Maharashtra. This road caters to the traffic of various parts of India as it connects financial capital (Mumbai) of India to the National Capital (Delhi) of India. In FY09, NHAI awarded the development of four lane highway of project road starting from Maharashtra/ Madhya Pradesh Border at Km 168.500 and ending at Dhule at Km 265.000 to an HCC led consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months. The HCC led consortium completed the project 4 months ahead of schedule and the project road was operational on February 11, 2012.

The operation of project road is running smoothly. Due to persistent efforts by Company we have received the tolling rights for part of Phase II work including Nardana bypass section two years ahead of schedule resulting in improved revenue in spite of a stagnant economy. Considering the significance of the project road in the Indian road network, it is expected to yield high returns for the remaining concession period of about 14 years. The highway has been developed in partnership with Sadbhav Engineering Ltd. and John Laing Investments Ltd. (UK) with an investment of Rs. 1,420 crore.

Delhi Faridabad Elevated Expressway (NH2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. It connects National Capital of India, Delhi and fastest growing city of India, Faridabad. The dfskyway™ has been designed to provide uninterrupted travel past the four major crossings of MB Road, Jethpur, Sarai Bypass and Sector 37 HCC Concessions Ltd. developed this engineering marvel with an investment of nearly Rs. 600 crore. The expressway has 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. HCC Concessions was awarded a 20 year concession in 2008 to develop, construct and operate this asset by the National Highways Authority of India (NHAI). The dfskyway™ contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor, that benefits residents and inter-state traffic alike. It is one of Delhi''s major radial roads and caters to very high traffic volume of over 100,000 PCUs per day. HCC Concessions'' parent, Hindustan Construction Company (HCC), has designed, engineered and constructed the dfskyway™.

The Delhi Faridabad Elevated Expressway was formally inaugurated on November 29, 2010 significantly ahead of its scheduled completion date, by the Chief Ministers of both Delhi and Haryana, along with the Minister of Road Transport & Highways. The asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBCTV18.

Nirmal Annuity (NH7)

The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000) on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the development of four lining of this 30 km long stretch on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore. This project became operational in July 2009, 100 days ahead of the scheduled completion date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for 17 year tenure.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed effciently by HCC Operations and Maintenance Ltd.

Status of Assets under Development:

West Bengal (NH34) Highway Project

This project being developed by HCC Concessions Ltd. on a Design, Finance, Build, Operate and Transfer (DFBOT) basis, is the largest and among the most ambitious PPP highway projects being executed in West Bengal (WB). The National Highway No.34 commonly referred to as NH34 is an important connector to north eastern states with Kolkata in West Bengal. NH34 originates from Dum Dum in north Kolkata and ends at Dalkhola in West Bengal. It is about 443.5 km long road along international border and is a primary conduit for transportation of passenger as well as freight traffic from the South Bengal, South- East states and Central states of India to major towns and districts in the North Bengal and to all Eastern and North East states of India. The development of this stretch will improve connectivity to the East-West Corridor, which has already been four-laned. West Bengal is strategically located to play a pivotal and catalytic role in promoting economic cooperation in the sub region (Bangladesh, Bhutan, North Eastern states and West Bengal).

The project road development is divided into three contiguous sections Baharampore - Farakka (101 km), Farakka - Raiganj (102 km) & Raiganj - Dalkhola (55 km). The concession period for the different segments totaling about 256 km range from 25 to 30 years, including a construction period of 30 months and an investment of over Rs. 3,200 crore. The Company has achieved significant progress in the two larger sections and is expecting to start operations for one project very soon and the other one in first half of this financial year.

NH34 provides nearest access to Kolkata and Haldia ports for the north eastern states of India and neighboring Bangladesh, Bhutan and Nepal. The traffic on NH34 comprises of 85~90% commercial traffic, carrying a diversified mix of manufacturing goods, building materials, steel, jute, food grains and tea. The four-laning of two projects between Kolkata and Baharampore is progressing in significant pace in spite of clearance issues of state. This will further increase the throughput and improve traffc on this stretch.

Baharampore Farakka Highway

The project road starts from north of Kolkata at Km 191.420 near Baharampore and ends at Farakka (before Farakka barrage) at Km 294.680. The Baharampore Farakka section is about 101 km in length and traverses through Baharampore, Raghunathganj and Farakka towns in Murshidabad and Malda districts of West Bengal. It also passes through various small villages like Shibpur, Palsanda, Morgram, Chandermore, Basudebpur and Dhulian. The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,169 crore.

The construction work has progressed significantly in the last year in spite of execution challenges due to delays in handover of land and 75.45 km of project length has been completed by the end of the year. The Company has completed all requisite parameters for Provisional COD and is awaiting approval from NHAI, HO. The Company expects to start operation very soon.

Farakka Raiganj Highway

The project road starts from Farakka at Km 294.680 (before Farakka barrage) and ends at Raiganj at Km 398.000. The Farakka Raiganj section is about 102 km in length and traverses through Farakka barrage, Kalia Chawk Bazaar and Malda city in Malda and North Dinjapur districts of West Bengal. It also passes through various small villages like Sujapur, Gazole, Stalkuri, Itahar and ends before Raiganj town. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs. 1,378 crore.

The Company has completed substantial stretch of roads and structures of 102 km in the last year. The building and tunnel work for both toll plazas has also been completed. The Company expects to start operation by end of Q2 of this financial year.

Raiganj Dalkhola Highway

The project road starts from Raiganj at Km 398.000 and ends at Dalkhola at Km 452.730. The Raiganj Dalkhola section is about 55 km in length and traverses through Raiganj and Dalkhola towns in North Dinjapur district of West Bengal. It also passes through various small villages like Soharai, Karandighi, Maheshbathna and ends at the intersection of NH31. The concession period is 30 years and includes a construction period of 30 months. The project is being implemented with an investment of Rs. 684 crore. The project progress has been very slow due to the non-availability of land for over 2 years. The Company expects a major portion of the land for this section to be handed over by Q1 of this financial year.

iv) Steiner AG, Switzerland

Your Company holds through its wholly owned subsidiaries HCC Mauritius Enterprises Ltd. and HCC Mauritius Investment Ltd. 100% stake in Steiner AG, with the acquisition of remaining 34% of shares, as pre-agreed, during this year. Steiner AG is a leading total and general contracting Company in Switzerland, specialized in turnkey building construction including refurbishments and real estate development.

Steiner AG had a consolidated revenue of Rs. 5380.9 crore and a consolidated profit of Rs. 55.0 crore in the financial year 2013-14.

Steiner AG handed over part of the project "House of Peace in Geneva" to the client in the financial year 2013-14. It forms the heart of the Campus de la Paid at the headquarters of the University Institute of International and Development Studies (IHEID). Steiner has been working on this significant architectural project as a general contractor since September 2013. The extraordinary building form made up of four petals and the twin-sided glazed facade make the House of Peace a real architectural highlight and an attraction for international visitors.

Löwenbräu, a total contracting project of the Company, received the Leed Gold certification for its office building by the Green Building Council Environment Design in May 2013. This adds to the portfolio of environmentally sensitive buildings constructed by the Company.

Steiner AG signed many important contracts in 2013-14. At year end, the order backlog was CHF 1,181 million. This is lower than the CHF 1,210 million order backlog as of March 31, 2013. The Company has also secured projects worth more than CHF 250 million, which are yet to be formally contracted and therefore have not yet been included in the order book.

The Board of Directors of Steiner AG comprises six members: Mr. Ajit Gulabchand, who also acts as Chairman, Mr. Rajgopal Nogja, who also acts as Managing Director / Delegate of the Board of Directors, Mr. Anil Singhvi, Mr. Peter Steiner, Mr. Andreas Schmid and Dr. Peter Huggler.

v) Highbar Technologies Ltd.

Highbar Technologies Ltd. (''Highbar''), a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

In the financial year 2013-14, Highbar was able to serve 14 new customers taking the total tally of customers to 78. This is achieved while the key customer segment i.e. Infrastructure industry is passing through challenging times. Highbar Technologies is dominating ''IT for Infrastructure'' market in short span. Your Company''s group legacy has enabled Highbar to understand & service these industries effectively. Highbar is now also servicing Telecom, PEB (Pre- engineered Buildings), Manufacturing, Retail, Agro- chemicals, Iron & Steel, Media etc. Industries.

Highbar has grown its IT capabilities and the expertise in various areas including ERP (Enterprise Resource Planning), Business Intelligence, cloud offerings through High bar Cloud Connect, Employee portal, CRM (Customer Relationship Management) from SAP & Microsoft, Line of business solutions, etc. High bar Rapid Start and High bar Rapid Start Analytics solutions are based on the templates approach for ERP and Business Intelligence respectively and are intellectual properties (IP) assets of High bar Technologies. High bar has maintained the strategic alliance with SAP at ''Gold partnership level'' and is preferred partner of SAP for infrastructure industry.

High bar’s Dubai subsidiary, High bar Technologies FZ-LLC is now fully operational and has started increasing its presence counting six major customers in Middle-East. High bar has also started pursuing opportunities in government sector & secured the first government order. When the macroeconomic scenario in the country improves, High bar will be in a better position to leverage the situation to its advantage.

High bar, the spin-off from your Company''s internal IT function, has succeeded, when the success rate of such experiments is just 5% globally & in India. High bar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It is on the course towards accomplishing its vision of being ''the most preferred end-to-end IT solution provider'' for infrastructure industry.

In accordance with the Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956, approved by the Honorable High Court of Judicature at Bombay vide Order dated April 4, 2014, Hinson Techno consult Ltd, wholly owned subsidiary of HCC, has been amalgamated with High bar.

5. Subsidiary Companies

At the beginning of the year, the Company had 74 Subsidiary Companies.

During the year under review, the following changes have taken place.

i) Your Company has incorporated a Wholly Owned

Subsidiary in Mauritius i.e. HCC Mauritius Investment Limited w.e.f. October 4, 2013

ii) Hincon Techno consult Limited, Wholly Owned

Subsidiary of your Company has been amalgamated into Highbar Technologies Limited, Wholly Owned Subsidiary of your Company vide Scheme of Amalgamation under Section 391 to 394 of the Companies Act, 1956. The said Scheme of Amalgamation has been duly approved by the Hon''ble High Court of judicature at Bombay vide Order dated April 4, 2014.

iii) Klemanor Investments Limited has ceased to be your subsidiary company w.e.f. March 12, 2014.

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India - Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report of the subsidiary companies for the year/period ended December 31, 2013/March 31, 2014 are not attached to the Balance Sheet of the Company as the Company has fulfilled/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated May 2, 2014 consented for not attaching the balance sheet(s) of the concerned subsidiary(ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following formation in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The financial statements and other related detailed information of the following subsidiaries shall be made available to members of the holding Company and subsidiary companies seeking such information at any point of time:

1. Western Securities Ltd.

2. HCC Aviation Ltd.

3. HCC Construction Ltd.

4. Highbar Technologies Ltd.

5. Highbar Technologies FZ LLC

6. HCC Mauritius Enterprises Limited

7 HCC Mauritius Investment Limited (w.e.f. October 4, 2013)

8. Steiner AG (Formerly known as Karl Steiner AG)

9. Steiner Promotions et Participations SA

10. VM STAG

11. Eurohotel SA

12. Steiner (Germany) GmbH

13. Steiner Leman SAS

14. SNCValleiry Route De Bloux

15. Steiner India Ltd.

16. HCC Infrastructure Company Ltd. 17 HCC Concessions Ltd.

18. Nirmal BOT Ltd.

19. Badarpur Faridabad Tollway Ltd.

20. Baharampore - Farakka Highways Ltd.

21. Farakka - Raiganj Highways Ltd.

22. Raiganj - Dalkhola Highways Ltd.

23. Dhule Palesner Operations & Maintenance Ltd.

24. HCC Power Ltd.

25. HCC Operations & Maintenance Ltd.

26. Narmada Bridge Tollway Ltd. 27 HCC Real Estate Ltd.

28. HRL Township Developers Ltd.

29. HRL (Thane) Real Estate Ltd.

30. Nashik Township Developers Ltd.

31. Maan Township Developers Ltd.

32. Charosa Wineries Ltd.

33. Powai Real Estate Developers Ltd.

34. HCC Realty Ltd.

35. Pune-PaudToll Road Company Ltd.

36. Panchkutir Developers Ltd. 37 Lavasa Corporation Ltd.

38. Lavasa Hotel Ltd.

39. Apollo Lavasa Health Corporation Ltd.

40. Lakeshore Watersports Company Ltd.

41. Dasve Convention Centre Ltd.

42. Dasve Business Hotel Ltd.

43. Dasve Hospitality Institutes Ltd.

44. Lakeview Clubs Ltd.

45. Dasve Retail Ltd.

46. Full Spectrum Adventure Ltd. 47 Spotless Laundry Services Ltd.

48. Lavasa Bamboocrafts Ltd.

49. Green Hill Residences Ltd.

50. My City Technology Ltd.

51. Reasonable Housing Ltd.

52. Future City Multiservices SEZ Ltd. (Formerly known as Minfur Interior Technologies Ltd.)

53. Rhapsody Commercial Space Ltd.

54. Valley View Entertainment Ltd.

55. Andromeda Hotels Ltd.

56. Sirrah Palace Hotels Ltd. 57 Warasgaon Tourism Ltd.

58. Our Home Service Apartments Ltd.

59. Warasgaon Power Supply Ltd.

60. Sahyadri City Management Ltd.

61. Hill City Service Apartments Ltd.

62. Kart Racers Ltd.

63. Warasgaon Infrastructure Providers Ltd.

64. Nature Lovers Retail Ltd.

65. Osprey Hospitality Ltd.

66. Starlit Resort Ltd.

67 Warasgaon Valley Hotels Ltd.

68. Rosebay Hotels Ltd.

69. Mugaon Luxury Hotels Ltd.

70. Warasgaon Assets Maintenance Ltd.

71. Hill View Parking Services Ltd.

72. Whistling Thrush Facilities Services Ltd.

73. Verzon Hospitality Ltd.

(vi) Further, the financial statements of the subsidiary companies shall also be kept for inspection by any member at the registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any member on demand;

(vii) The holding as well as subsidiary companies in question shall regularly flew such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

6. Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

During the year under review, your Company''s paid up equity share capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising 60,66,10,420 Equity Shares of Rs. 1/- each.

Share Warrants

During the year under review, in accordance with the approval of the Members, the Company had issued and allotted 3,92,15,686 Warrants convertible into 3,92,15,686 Equity Shares of Rs. 1/- each at a conversion price of Rs. 16.32/- per equity share (including premium of Rs. 15.32/- per equity share), on a preferential basis, convertible within a period of 18 months from the date of allotment of Warrants, aggregating Rs. 64 crore to the Promoter Companies (Hincon Holdings Limited and Hincon Finance Limited). The said warrants were issued and allotted to these companies at the price as determined through SEBI prescribed formula.

7. Public Deposits and Loans/Advances

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

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

8. Employee Stock Option Scheme (ESOP)

During the year under review, 1,20,180 options got vested to the employees of the Company.

As on March 31, 2014, 46,94,800 stock options are outstanding (comprising vested after adjustment for lapsed and exercised options), in aggregate, for exercise and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

The particulars with regard to the Employee Stock Options as on March 31, 2014 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2014, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Company''s Auditors confirming compliance forms part of this Report.

12. Directors

Mr. K. G. Tendulkar has resigned as a Director of the Company w.e.f. August 2, 2013 and Mr. Nirmal P Bhogilal has resigned as a Director of the Company w.e.f. October 23, 2013.

Mr. ArunV. Karambelkar has resigned as Whole-time Director of the Company w.e.f. April 29, 2014 and Dr. Ila Patnaik has resigned as a Director of the Company w.e.f. April 30, 2014.

The Board places on record their appreciation for the valuable guidance and services rendered by these Directors/ Whole-time Director of the Company.

In accordance with the provisions of Section 149 of the Companies Act, 2013, your Board of Directors are seeking the appointment of Mr. Ram P. Gandhi and Mr. Sharad M. Kulkarni, who are retiring by rotation at the ensuing Annual General Meeting under the erstwhile applicable provisions of Companies Act, 1956, as Independent Directors for 3 (three) consecutive years for a term up to the conclusion of the 91st Annual General Meeting of the Company in the calendar year 2017

The Company has received Notices under Section 160 of the Companies Act, 2013 from members signifying their intention to propose Mr. Ram P Gandhi and Mr. Sharad M. Kulkarni as a candidate for the offce of Independent Director at the ensuing Annual General Meeting.

The Company has also received the requisite disclosures/declarations from Mr. Ram P Gandhi and Mr. Sharad M. Kulkarni as required under Section 149 and other applicable provisions of the Companies Act, 2013.

As per the provisions of Section 152 of the Companies Act, 2013, Prof. Fred Moavenzadeh, Director of the Company retires by rotation at the ensuing Annual General Meeting. Prof. Fred Moavenzadeh has expressed his intention not to seek re-election as a Director of the Company.

Profile of all these Directors has been given in the Report on the Corporate Governance as well as in the Explanatory Statement to the Notice of the ensuing Annual General Meeting of the Company.

13. Directors'' Responsibility Statement

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

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

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

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

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

14. Industrial Relations

The industrial relations continued to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 9,17,451/- to Investor Education and Protection Fund, in compliance with the provisions of erstwhile Section 205C of the Companies Act, 1956. The said amount represents dividend for the financial year 2005-06 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the aforesaid Annexure. Any member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

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

18. Auditors

M/s Walker Chandiok & Co.LLP Chartered Accountants, Mumbai bearing ICAI Registration No. 001076N are proposed to be appointed as Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the sixth Annual General Meeting of the Company held thereafter, subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

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

19. Auditors'' Report

The Auditors'' Report to the members on the Accounts of the Company for the financial year ended March 31, 2014 does not contain any qualification.

20. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its growth.



For and on behalf of Board of Directors,

AJIT GULABCHAND

Chairman & Managing Director



Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083



Place: Mumbai

Date: May 2, 2014


Mar 31, 2013

To, The Members of Hindustan Construction Co. Ltd.

1. Report

The Directors are pleased to present the 87th Annual Report together with the Audited Accounts for the year ended March 31, 2013.

2. Financial Highlights

Year ended Year ended Particulars March 31, 2013 March 31, 2012 Rs. crore Rs. crore Turnover 3,837.29 4002.76

Profit before Interest, Depreciation, Exceptional Items and Tax 378.57 439.80

Less: Interest 529.67 543.16

Depreciation 163.40 162.10

Exceptional Items (15.58) 677.49 166.32 871.58

Add: Other Income 119.91 122.83

Add/Less: Exchange Gain/(Loss) (14.57) (9.53)

Profit/(Loss) before Tax (193.58) (318.48)

Less: Deferred Tax Charge/(Credit) (55.94) (96.23)

Profit/(Loss) after Tax (137.64) (222.25)

Add: Balance brought forward from last year 126.00 347.83

Transfer from Debenture Redemption Reserve - 16.67

Amount available for Appropriation (11.64) 142.25

Less: Appropriations

Dividend - -

Tax on Dividend - -

Debenture Redemption Reserve - 16.25

Transfer to General Reserve - - 16.25

Balance carried to Balance Sheet (11.64) 126.00

3. Dividend

In view of the losses incurred by the Company, your Directors have not recommended any dividend for the financial year ended March 31, 2013.

4. Operations

The turnover of the Company at Rs. 3,837 crore has shown a decrease of 4.1 % as compared to Rs. 4,003 crore for the previous year. The loss before tax is Rs. 193.6 crore (including exceptional item) as compared to Rs. 318.5 crore for the previous year.

As your Company was growing at CAGR of over 20% during 2002 to 2011, it had considerably grown its balance sheet, including debt. In the present phase of economic slowdown, it became difficult to service this debt and hence it was imperative to restructure the Company''s debt. Therefore the Company opted for a formal method of loan restructuring and referred the total debt of around Rs. 3,300 crore along with working capital fund based and non-fund based limits of Rs. 6800 crore to the Corporate Debt Restructuring (CDR) Cell under the regulatory framework of the Reserve Bank of India in March 2012. The financial restructuring package for your Company was approved by the CDR Cell in June 2012 and since then the implementation of the package has commenced.

The salient features of the CDR package are:

- Re-schedulement of Term loan and short term loans so as to be repayable in 2 years moratorium and 8 years of repayment

- Interest rate has been reduced to 11% per annum yield equalisation over 10 year tenure

- Funded interest for nine months period from January 2012 to September 2012

- Additional working capital borrowing as per requirement has been sanctioned

- Waiver of penal charges from the cut off date to the date of implementation of the package

The CDR gives your Company critical support to tide over the present difficult business environment. The decision of the banks to consider and approve CDR also reflects the faith these institutions have in the long term business model of the Company.

Your Directors are pleased to inform that during the year under report, the Company secured the following major contracts.

- Tunnel T48 of Udhampur Srinagar Baramulla New BG railway line, J&K Contract Value: Rs. 884 crore

- Narmada Extra dosed bridge, Gujarat Contract Value: Rs. 650 crore

- Delhi MRTS Phase III, Janakpuri West to Palam, New Delhi Contract Value: Rs. 866 crore

- Delhi MRTS Phase III, Shalimar Bagh to Netaji Subhash Place New Delhi Contract Value: Rs. 373 crore

The total balance value of works on hand as on March 31, 2013 is Rs. 14,935 crore.

Decisions are awaited from various clients for tenders submitted by the Company (Directly or in JV) for 10 projects amounting to about Rs. 3,558 crore. Tenders for various packages for 19 projects worth about Rs. 12,883 crore are expected to be submitted in the near future. The Company has also submitted prequalification bids for 17 projects worth over Rs. 13,427 crore, which are currently under evaluation. The Company is confident of securing a sizeable share of these new projects.

Operations of Subsidiaries

i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

a) Operations

Lavasa has kept its rationale of developing an inclusive city for all and is tailoring partnerships and tie ups with global leaders. Tie-ups continued strongly at Lavasa through 2012-13 and many of these projects are fast moving towards completion.

In the hospitality space, the Accor group is successfully running Mercure Lavasa and the 1500 plenary capacity Lavasa International Convention Centre (LICC). Novotel, a new brand from the Accor group - is scheduled for completion by April 2014. Projects with renowned hospitality players like Pullman, Hilton, Taj Vivanta, Holiday Inn, Holiday Inn Express, Oakwood, Langham Place and Eaton among others are slated to follow in quick succession.

As for the existing hospitality projects, Ekaant - The Retreat and Waterfront Shaw Apartment Hotel continue to flourish. Fortune Select Dasve in its fifth year of successful operations will soon open one more hotel in Lavasa. Dasvino Town & Country Club, launched in early 2010 is growing steadily. In the tourism space, Lakeshore Watersports, Neo Spark Games Arcade and Xthrill Adventure Sports & Academy are also functioning successfully. Site preparatory work for Space World, Asia''s first space edutainment centre is well underway and is on course for opening in 2015. MoU''s have been signed with Tennis Australia and Manchester City Football Club. Additionally agreements have also been signed to set up training facilities with Hockey Australia, Sir Nick Faldo for Golf and Sir Steve Redgrave for a Rowing Academy.

On the retail front, a significant area has already been leased. Restaurants like Subway, Cafe Coffee Day, Baskin Robin, All American Diner and others have already commenced operations. In addition to F&B outlets, many other tie-ups that have been finalized in the retail segment include The Orange Ox (handicrafts), Cinnamon Crocodile (bath and spa products), Fun Square Digital Cinema, Smokin Joe''s Pizza, Adidas Store and Kareems Restaurant.

Lavasa is in advance stage of discussion with iDream to create an all Lavasa tourism plan including a historical theme park. Significant progress was also made in the education space. Christel House Lavasa is into its second year of operations with 269 students and in 2012-13 Phase 2 of Christel House Lavasa was launched.

Ecole Hoteliere Lavasa started its fourth batch in 2013-14. The first batch will receive academic certification from Ecole hoteliere de Lausanne this year. Educomp has signed MOU with infinity group of Kolkata and is proposing to bring Duhrum school of UK as k12 school or will start millennium international school by 2014-15 in Knowledge Vistas Limited. GREAT (INDIA) in collaboration with Australian Retail College, which is a leader in retail training in Australia is planning to open a retail college at Lavasa. Other educational partners like Symbiosis Institute (Pune) and Christ University (Bangalore) are also in the process of launching their programs. Discussions are on to establish North Hampton University at Lavasa by 2014-15.

Lavasa has continued to enjoy healthy sales in residential and commercial space. Positive sales trend continued through the year and possession was given to 250 plus residential units in Dasve. In institutional sales the prime focus for the year has been on collections and activation of sites. Symbiosis Institute, State Bank of India and the proposed Ramada Hotel have submitted their plans for approval.

For the year ahead a new concept ''built- to-suit'' that offers a seamless service to institutions right from purchasing land to executing the project has been conceptualized. On the retail front revenue collections have seen a phenomenal 56% increase YoY. Endeavor to boost the work economy at Lavasa will gain momentum in the next year.

Lavasa has continued its focus on branding and communication activities in 2012 -13. Emphasis through the year was on communicating that development work at Lavasa has commenced with right earnest, raise awareness about the planned city and its advantages.

Through the year over 250 journalists from print, TV, news wires and web media from Mumbai, Pune and Lavasa region visited Lavasa. A new advertisement campaign was launched in May 2012 to promote the second town Mugaon as a residential and edutainment hub. In August 2012 a new brand campaign capturing different facets of ''Life in Lavasa'' was launched. The next phase of brand campaign was launched on October 28, 2012. Over a three month period, the series of advertisements communicated city positioning and scale and also talked about advantages of Lavasa city.

To promote tourism, the Lavasa Holidays Summer Special (April to June 2012), Mesmerizing Monsoon (July to Sept 2012) and Lavasa Holidays Festive Fiesta (Oct to Dec 2012) tour packages were conceptualized and offered to tourists.

On an average close to 80,000 tourists visited Lavasa every month from July to September 2012. The footfall in August at 94,143 tourists was the highest ever in Lavasa''s history.

Lavasa won the ''Most promising new Destination'' and the ''Best Print Promotional Material'' awards at the premiere industry event Travel and Tourism Fair held in Mumbai and Pune.

Strategic and design support to SPVs was provided on a need basis. The fifth edition of the signature brand event Lavasa Women''s Drive was held on February 24, 2013. This year the ''Lavasa Women''s Drive - Women with a drive awards'' were presented to Dr. Anagha Amte (health care), Kanan Dhru (governance), Hina Shah (women welfare), Sabbah Haji (education) and Sakshi Kumar (women''s empowerment). Social worker and activist, Sindhutai Sapkal was felicitated with a special recognition award for her exemplary work.

Digital and social media channels were leveraged primarily for engagement and for information dissemination. The channels were extensively used to promote events, respond to queries and initiate conversations on platforms like travel, tourism and discussion forums on urbanization.

In 2012-13, the Public Relations campaign focused on building preference and restoring customer confidence in the project. Meetings with senior editors in Mumbai and Pune and the constant engagement with beat reporters in Mumbai and Pune led to better appreciation of Company''s stand on issues. Visits of eminent personalities like Chief Ministers of Gujarat and Punjab and promotional initiatives of various SPVs like Christel House Lavasa, Ecole Hoteliere Lavasa, Dasvino Town & Country Club and X Thrill were publicized through news stories, editorial feature stories and photo features.

Each month Lavasa looks, feels and acts more like a city. The city of Lavasa now has a new post office, a new school, a hospital and more than a dozen food and beverage establishments open for business. It also has four operating hotels with three more under construction, a fuel station, two banks, a convention centre, a public safety centre with a citizen call centre, pharmacy, rental housing, games arcade, watersports facility, a club, public transport system. Building the infrastructure right, from the beginning, is a key strategy to ensuring long-term livability. The drinking water at Lavasa is fit for consumption, straight from the tap, without the need for additional filtration and the sewage is treated as per required standards before being reused for irrigation and other non-potable uses. Lavasa''s power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. The e-governance portal will play a major role in communicating with citizens and providing round the clock services.

A round the clock Lavasa Citizen Call Centre set up this year, envisions to make the lives of the citizens and visitors easy and convenient.

Lavasa has completed the purchase of 10423.50 acres of land and is in the process of concluding the sale deed in 2184 acres for which agreements were signed. Steps to reach an overall land purchase target of 18000 acres are in progress.

Lavasa continues to regularly monitor environmental aspects such as air quality, water quality and soil quality are being carried out as per MoEF guidelines. For slope protection and enhancing the greenery within the region, soil bioengineering (biodegradable coir mats have been applied over the slopes) and plantation of stumps has been done. Hydroseeding & manual seeding was also carried out for slope maintenance and a total area of more than 500 acres has been covered to date. Indigenous Tree plantation of around 47,500 tree saplings was carried out in Mugaon and Bohini.

Techno-commercial evaluation of renewable sources of energy feasible at Lavasa is being carried out by TERI (The Energy and Resources Institute). Sustainable reporting under GRI guidelines is underway. Lavasa is also undergoing the process for Green Certification of its development under IGBC (Indian Green Building Council) - Green Township program.

First Town Dasve is ready with all basic infrastructure, such as access roads, internal roads, water treatment plant, water distribution network, sewage network, sewage treatment plant, telecom network and services is operational. Work of the Commercial Business Park, retail and hostel building, Novotel Hotel, LEH campus, Phase II of the Christel House Lavasa and Christ University is progressing well.

Work on the infrastructure for the second town of Mugaon has been accelerated.

Work on utilities like water, sewer, power, data lines and on the approach road is in progress. Work on 16 buildings comprising of 462 apartments at Mugaon has commenced using a new technology - Formblock, and is expected to be completed in next 18 months. Work on another 9 buildings consisting of 268 apartments will be started by May 2013.

Lavasa has also initiated a number of development and empowerment programs were initiated for the local community by Lavasa. Some of the key initiatives include provision of treated drinking water to 12 villages in the project area at 65 locations on a daily basis, helping villages avail benefits of Government drinking water scheme, teacher training workshops, aptitude tests and counseling for SSC students; building of school buildings and sanitation blocks at village schools and starting the Apollo Lavasa Primary Health Centre at Bhoini.

b) Status update on Environment Clearance from Ministry of Environment and Forests (MoEF)

On November 25, 2010 Ministry of Environment & Forests ("MoEF"), had issued Show Cause Notice (SCN) to Lavasa, under Section 5 of the Environment (Protection) Act, 1986 (EP Act) alleging violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications") and directed your Company to show cause within 15 days as to why the alleged unauthorized structures at Lavasa site be not removed in entirety and pending the decision by MoEF, it directed Lavasa to maintain status-quo ante for construction and/or development.

Lavasa replied to MoEF and then filed a Writ Petition (WP) being No. 9448 of 2010 in the Bombay High Court seeking inter alia quashing of the said SCN. Vide its order dated December 22, 2010, the Hon''ble Court admitted WP and directed MoEF to visit Lavasa''s project and pass an order.

The MoEF team visited Lavasa Site and has given hearings. On January 17, 2011 MoEF passed order and observed that Lavasa is in violation of EIA Notifications. By the said order status quo on construction was continued. However, MoEF stated that it is prepared to consider the project on merits.

On January 24, 2011, Lavasa filed another WP being No. 811 of 2011 in Bombay High Court challenging the aforesaid impugned order dated January 17, 2011.

Lavasa as per the MoEF''s order submitted various documents to MoEF, from time to time. In addition, Lavasa submitted applications for grant of Environment Clearance (EC) for Phase I and Phase II.

Representatives of Lavasa have from time to time attended total five (5) meetings of the Expert Appraisal Committee (''EAC'') at New Delhi. As per the Minutes of the 101st meeting held on May 31, 2011, the EAC recommended the proposal for EC for the 1st Phase (2000 ha) with the conditions mentioned therein.

On June 10, 2011 MoEF directed to the Government of Maharashtra to initiate necessary legal action under EP Act against Lavasa.

As the MoEF did not passed the EC order till 30th August, 2011, Lavasa fled another WP being No. 7276 of 2011 in the Hon''ble Bombay High Court seeking directions interaliathat (a) it be declared that Lavasa has been granted / deemed to have been granted EC for Phase I of the project.

On November 4, 2011, Maharashtra Pollution Control Board (MPCB) fled a criminal complaint against Lavasa & 14 others before the Chief Judicial Magistrate (CJM), Pune under the EP Act and thereafter on November 9, 2011, MoEF passed an order and pursuant to same accorded EC to the 1st phase of Lavasa''s project subject to certain conditions as mentioned therein.

On November 24, 2011 the CJM passed an order of issuance of process in the Criminal matter and thereafter from time to time the matter is adjourned and now the next date is June 21, 2013.

With regards to the Corporate Social Responsibility (CSR) and the penalty as mentioned in the EC order, Lavasa vide its without prejudice letters addressed to MoEF requested for exclusion of the K T Ravindran committee report from the EC order and also requested for the hearing and informed that there are certain discrepancies and contradictions in the EC order and requested for reconsidering the condition no (iv) and also requested for withdrawal of the same.

Lavasa fled Appeal being no. 36 of 2011, u/s 16(h) of the NGT Act against The Union of India, MoEF & Anr, before the National Green Tribunal (NGT) at Delhi, challenging part of the EC order more particularly about the Prof. K T Ravindran Committee Report and the conditions imposed by it. The Tribunal has passed order "Notice before Admission''.''The matter has thereafter from time to time come up on board now the next date is May 14,2013.

One Mr. Dyneshwar Shegde has fled Appeal (being No. 9 of 2012) before NGT challenging the EC order. Lavasa and the other respective Parties in the matter have fled their respective affidavits in reply. Further, to support Lavasa''s project, Mose Khore Nagrik Vikas Sangh and Sarpanch, Mugoan have fled Intervention Applications in the Appeal since villagers have benefited under Lavasa''s project.

On October 05, 2012 Lavasa fled Transfer Petition being (C) No. 1326 of 2012 before Hon''ble Supreme Court for transfer of Appeal of Dyaneshwar Shedge and be heard along with Civil Appeal No.6025 of 2012 titled M/s Scania Steel & Power Ltd v/s Jan Chetna & Ors for determination of the question of "Person Aggrieved"

In the Transfer Petition, the Hon''ble Supreme Court has stayed the proceeding of Dyaneshwar Shedge Appeal before NGT and issued notice in the matter. The matter is currently pending.

With regards to the WP''s fled by Lavasa in the Hon''ble Bombay High Court and the other PILs fled against your Company, the matters were listed on the board from time to time but the judges recused to hear the matter. But on August 29, 2012 one of the PIL being (L) 90 of 2010 fled by Ms. Suniti S R & Ors was on board before Registrar (OS) / Prothonotary & Senior Master for rejection of Petition since the objections had not been removed by the Petitioners and for jurisdiction. The Registrar passed conditional order directing Petitioners to remove objections within 4 weeks and transferred the PIL to the Appellate side. Thereafter on 7th November, 2012 the PIL (L) 90 of 2010 was transferred to the Appellate side of Hon''ble Bombay High Court and its'' now numbered as PIL (ST) No 31736 of 2012.

With regards to the compliance of the EC order, Lavasa is complying the same and from time to time is informing to the MoEF

ii) HCC Real Estate Ltd.

HREL, a wholly owned subsidiary of your Company is into building residential & office complexes in real estate sector.

Commercial Projects under execution by HREL and its subsidiaries :

- Lavasa Corporation Ltd. (Lavasa)

Construction work at Lavasa is progressing well. Lavasa has started handing over the possessions of villa and apartments to Customers in Dasve Village. Construction at Mugaon, Lavasa''s second town, has also commenced during the year. The response from buyers for sale of apartments in Mugaon is positive. Also, the City Management of Lavasa is moving in the direction of e-governance in future.

The current developments in Lavasa are detailed out in Management Discussion and Analysis Report.

- Other Projects

Other projects of HCC Real Estate Ltd and its subsidiaries are progressing well as explained in Management Discussion and Analysis Report.

- New Real Estate Projects under bidding

During the year, HREL has made serious efforts in obtaining real estate projects on joint development basis. It has also acquired the bid documents for development of integrated township at Atali Kaladara near Bharuch in Gujarat for PCPIR and is negotiating on certain projects in Bhutan.

iii) HCC Infrastructure

HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, has grown its portfolio to about Rs.7,000 crore, which includes seven National Highways Authority of India (NHAI) road concessions.

The Company, through its subsidiaries HCC Concessions and HCC Power, has a development focus in the roads, water and power sectors.

Your Company has developed a strong team, which follows a stringent investment discipline to create value for its shareholder. The expertise of the management team extends from concept innovation and evaluation of risk & return, to construction management and operations. Along with a focus on quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country''s end users.

Current Road Portfolio:

Your directors are pleased to inform you that during the course of the year, HCC Concessions was awarded the Narmada Bridge Project (NH8) in the state of Gujarat by the National Highways Authority of India in April 2012.

The three operational projects Nirmal Annuity,

Delhi Faridabad Elevated Expressway and Dhule Palesner Highway have been operational for more than three, two and one year respectively and are running smoothly. The three under construction highway projects in West Bengal (NH34) have achieved significant progress and the two larger projects amongst the three are expected to be operational later this year.

During the year, HCC Concessions submitted 3 NHAI bids and 16 Request for Qualification (RFQs). HCC Concessions partnered with other infrastructure players for certain large bids to diversify risk and increase competitiveness. The current year has witnessed a slowdown in the awards of new projects. NHAI has awarded only about 750km compared to about 6,500km last year. The Company will continue to bid for NHAI projects in the next financial year while also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH3)

The project road is part of NH3, commonly referred to as the Mumbai-Agra road, originating from Mumbai and ending at Agra. It is a primary conduit for transportation of passengers as well as freight traffic from the state of Uttar Pradesh to major towns in the states of Madhya Pradesh and Maharashtra. In FY09, NHAI awarded the development of four lane highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to an HCC led (60%) consortium on a BOT (toll) basis. The concession period is 18 years, including a construction period of 30 months.

The project was operational on Feb 11, 2012, four months ahead of schedule, showcasing our execution expertise.

The project is being operated by an in-house operations and maintenance team. The remaining concession period is about 15 years. The highway has been developed in partnership with Sadbhav Engineering Ltd and John Laing Investments Ltd (UK) with an investment of Rs. 1,420 crore.

Delhi Faridabad Elevated Expressway (NH2) (dfskyway™)

The Delhi Faridabad Elevated Expressway or dfskyway™ is a six lane 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. This award winning engineering marvel developed by HCC Concessions Ltd with an investment of nearly Rs.600 crore boasts 20 exits, 10 underpasses and is the first of its kind spaghetti structure in India. HCC Concessions was awarded a 20 year concession in 2008 to develop, construct and operate this asset by the National Highways Authority of India (NHAI). The dfskyway™ contributes significantly to Delhi''s rapidly expanding infrastructure by reducing travel time by over 40 minutes through an extremely congested corridor, that benefits residents and inter-state traffic alike. It is one of Delhi''s major radial roads and caters to very high traffic volume of over 100,000 vehicles per day. HCC Concessions'' parent, Hindustan Construction Company (HCC), has designed, engineered and constructed the dfskyway™

The Delhi-Faridabad Elevated Expressway was formally inaugurated on November 29, 2010 significantly ahead of its scheduled completion date, by the Chief Ministers of both Delhi and Haryana, along with the Minister of Road Transport & Highways. The asset has been awarded the Best Project Award by Construction Industry Development Council 2011 and the Infrastructure Excellence Award 2011 by CNBC TV18.

Nirmal Annuity (NH7)

The project stretch is from Kadtal (Km 175.000) to Armur (Km 308.000) on the Hyderabad - Nagpur section of NH7 In FY07, NHAI awarded the development of four-laning of this 33 km long stretch on a BOT basis under the Annuity scheme to HCC. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment by HCC of Rs. 315 crore This project became operational in July 2009, 100 days ahead of the scheduled completion date. The debt at Nirmal has since been refinanced through a structured bond at 9.38% fixed rate of interest for 17 year tenure.

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed efficiently by our in house team.

Status of Assets under Development:

West Bengal (NH34) Highway Project

This project being developed by HCC Concessions Ltd on a Design, Finance, Build, Operate and Transfer (DFBOT) basis, is the largest PPP highway model in West Bengal (WB). The project road is the major North-South artery (N-34) which originates at the capital and port city of Kolkata, and ends at Dalkhola in the state of WB, covering a total distance of 443.5 km. It is the spine of the transport system in the region and provides nearest access to ports (Kolkata and Haldia) for the north eastern states of India and neighbouring Bhutan and Nepal. The development of this stretch will improve connectivity to the East-West Corridor, which has already been four-laned. West Bengal is strategically located to play a pivotal and catalytic role in promoting economic cooperation in the sub region (Bangladesh, Bhutan, North Eastern states and West Bengal).

The highway development is divided into three contiguous sections covers Baharampore and Farakka (103 km), Farakka and Raiganj (103 km) & Raiganj and Dalkhola (50 km). The concession lengths for the different segments totaling 256 km range from 25 to 30 years, including a construction period of 30 months and an investment of over Rs.3,200 crore. The Company has achieved significant progress in the two larger sections and is expecting to start operations later this year.

WB is the fourth most populous state in the country and is the sixth largest contributor to India''s GDP The traffic on NH34 comprises of 90% commercial traffic, carrying a diversified mix of manufacturing goods, building materials, steel, jute, food grains and tea.

Baharampore Farakka Highway

The construction work has progressed significantly in the last year on this stretch of 103 km. The Company expects to start operation later this year.

This stretch originates at Baharampore, about 190 km from Kolkata and terminates at Farakka. Baharampore, Nabagram, Farakka and Jangipur are the major passenger traffic generators for this stretch. The four-laning of two projects between Kolkata and Baharampore will further increase the throughput and improve traffic on this stretch. The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs.1,169 crore.

Farakka Raiganj Highway

The construction work has progressed significantly in the last year on this stretch of 103 km. The Company expects to start operation later this year.

This is a 103 km stretch originating at Farakka and terminating at Raiganj. Malda, Farakka and Gajol are the major passenger traffic generators for this stretch. The Malda industrial region is expected to lead the growth in this region. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs.1,378 crore.

Raiganj Dalkhola Highway

The progress on this stretch has been slow compared to the other two stretches due to certain execution challenges. This is a 50km stretch which comprises of 3 bypasses. Dalkhola, Raiganj and Islampur are the major passenger traffic generators for this stretch.

This is a 50 km stretch starting at Raiganj and terminating at the town of Dalkhola. The concession period is 30 years and includes a construction period of 30 months. The project is being implemented with an investment of Rs.684 crore.

iv) Steiner AG,Switzerland

Your Company holds through its wholly owned HCC Mauritius Enterprises Ltd. a controlling equity stake of 66% in Steiner AG. Steiner AG is a leading general contracting Company in Switzerland, specialized in turnkey development of new buildings and refurbishments, and offers services in all facets of real estate development and construction.

Steiner AG had a consolidated revenue of Rs. 4368.2 crore and a consolidated profit of Rs. 47.3 crore in the financial year 2012-13.

After two years of construction Steiner AG completed the project Andreaspark G3, a large apartment building in one of Zurich''s fastest growing residential areas. With a height of 42 meters the building offers 90 new apartments.

In March 2010 the Company handed over the new premises to the International Union for Conservation of Nature in Gland, which is a perfect example for the new era of eco-building techniques. This year, the Company achieved a milestone with this work, as it was awarded the first ever LEED Platinum certificate by the Green Building Council Environment Design in Switzerland. In Glattpark, one of Switzerland''s biggest residential and commercial development areas, Steiner AG is building the project Lindbergh- Allee. The property lies close to Zurich International Airport and will offer around 30''000 sqm of office and living space.

In the business year 2012-13 Steiner AG signed many important contracts. At year end, the order backlog of Steiner AG was CHF 1,210 million compared to CHF 1,512 million as of March 31, 2012. Steiner AG has also secured projects worth more than CHF 200 million in this year which are yet to be signed.

The Board of Directors of Steiner AG comprises six members. Your Company is represented by four nominees: Mr. Ajit Gulabchand, who also acts as Chairman, Mr. K.G. Tendulkar, Mr. Anil Singhvi and Dr. Peter Huggler.

v) Highbar Technologies Ltd

Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

Despite tough economic conditions, Highbar won 14 new customers in the financial year against stiff competition by established large IT players to take the total tally of its customers to 64. Long list of reference customers and high quantum of repeat business indicates maturity and scalability of Highbar''s delivery capabilities.

Highbar''s Dubai subsidiary, Highbar Technologies FZ-LLC is now fully operational and has secured Highbar''s largest contract till date with Oman based Company and also won customer in Saudi Arabia.

Highbar Technologies has taken strategic alliance with SAP to next level with ''GOLD Partnership'' and is preferred partner of SAP for infrastructure industry.

Infrastructure industry is going beyond ERP to new business critical IT systems. Highbar has been at forefront of this with solutions like maximum number of SAP BOBJ (business intelligence & dashboard) and SAP CRM (customer relationship management) implementations for Infrastructure industry, business process consolidation (BPC) and employee portal (ESS). The Company launched new solutions - Highbar RapidStart and Highbar RapidStart Analytics. These solutions are based on the templatised approach for ERP and Business Intelligence respectively and are Intellectual Property (IP) assets for Highbar Technologies.

Highbar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth.

Highbar Technologies is on the course towards accomplishing its vision of being ''the most preferred end to end IT solution provider'' for infrastructure industry.

5. Subsidiary Companies

At the beginning of the year, the Company had 72

Subsidiary Companies.

During the year under review, the following changes have taken place.

a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

HCC Operations & 07.11.2012 Maintenance Ltd

b) HCC Concessions Ltd (a subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

Narmada Bridge Tollway 18.06.2012 Ltd

(c) During the year under review w.e.f 18.02.2013, Lavasa Corporation Ltd, a subsidiary Company of your Company has acquired remaining 74% stake (previously 26% stake) in Verzon Hospitality Ltd, making it a subsidiary of your Company from the date of acquisition of the said stake.

d) HCC Singapore Enterprises Pte. Ltd has ceased to be your subsidiary w.e.f 11th April 2012.

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India - Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report of the subsidiary companies for the year/period ended December 31, 2012/March 31, 2013 are not attached to the Balance Sheet of the Company as the Company has/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated May 3, 2013 consented for not attaching the balance sheet(s) of the concerned subsidiary (ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following formation in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The annual accounts and other related detailed information of the following subsidiaries shall be made available to shareholders of the holding Company and subsidiary companies seeking such information at any point of time:

1. Hincon Technoconsult Ltd

2. Western Securities Ltd

3. Pune-Paud Toll Road Company Ltd

4. Nirmal BOT Ltd

5. Panchkutir Developers Ltd

6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

7 HCC Infrastructure Company Ltd

8. HCC Aviation Ltd

9. Badarpur Faridabad Tollway Ltd

10. Baharampore - Farakka Highways Ltd

11. Farakka - Raiganj Highways Ltd

12. Raiganj - Dalkhola Highways Ltd

13. Dhule Palesner Operations & Maintenance Ltd

14. HCC Power Ltd

15. HCC Operations & Maintenance Ltd

16. Narmada Bridge Tollway Ltd

17. HCC Construction Ltd

18. Highbar Technologies Ltd

19. Highbar Technologies FZ LLC

20. HCC Mauritius Enterprises Ltd

21. Klemanor Investments Ltd

22. Steiner AG (Formerly known as Karl Steiner AG)

23. Steiner Promotions et Participations SA

24. VM ST AG

25. Eurohotel SA

26. Steiner (Germany) GmbH

27. Steiner Leman SAS

28. SNC Valleiry Route De Bloux

29. Steiner India Ltd

30. HCC Real Estate Ltd

31. HRL Township Developers Ltd

32. HRL (Thane) Real Estate Ltd

33. Nashik Township Developers Ltd

34. Maan Township Developers Ltd

35. Charosa Wineries Ltd

36. Powai Real Estate Developers Ltd

37. HCC Realty Ltd

38. Lavasa Corporation Ltd

39. Lavasa Hotel Ltd

40. Apollo Lavasa Health Corporation Ltd

41. Lakeshore Watersports Company Ltd

42. Dasve Convention Centre Ltd

43. Dasve Business Hotel Ltd

44. Dasve Hospitality Institutes Ltd

45. Lakeview Clubs Ltd

46. Dasve Retail Ltd

47. Full Spectrum Adventure Ltd

48. Spotless Laundry Services Ltd

49. Lavasa Bamboocrafts Ltd

50. Green Hill Residences Ltd

51. My City Technology Ltd

52. Reasonable Housing Ltd

53. Future City Multiservices SEZ Ltd (Formerly known as Minfur Interior Technologies Ltd)

54. Rhapsody Commercial Space Ltd

55. Valley View Entertainment Ltd

56. Andromeda Hotels Ltd

57. Sirrah Palace Hotels Ltd

58. Warasgaon Tourism Ltd

59. Our Home Service Apartments Ltd

60. Warasgaon Power Supply Ltd

61. Sahyadri City Management Ltd

62. Hill City Service Apartments Ltd

63. Kart Racers Ltd

64. Warasgaon Infrastructure Providers Ltd

65. Nature Lovers Retail Ltd

66. Osprey Hospitality Ltd

67. Starlit Resort Ltd

68. Warasgaon Valley Hotels Ltd

69. Rosebay Hotels Ltd

70. Mugaon Luxury Hotels Ltd

71. Warasgaon Assets Maintenance Ltd

72. Hill View Parking Services Ltd

73. Whistling Thrush Facilities Services Ltd

74. Verzon Hospitality Ltd

(vi) Further, the annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder at the head office/registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any shareholder on demand;

(vii) The holding as well as subsidiary companies in question shall regularly file such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

6. Share Capital

During the year under review, your Company''s Authorised Share Capital has remain unchanged at Rs. 100,00,00,000 (Rupees One hundred Crore) comprising 90,00,00,000 Equity Shares of Rs. 1/- each and 1,00,00,000 Redeemable Cumulative Preference Shares of Rs. 10/- each.

During the year under review, your Company''s paid up equity share capital has also remained unchanged at Rs. 60,66,10,420 (Rupees Sixty Crore Sixty Six Lacs Ten Thousand Four Hundred Twenty) comprising 60,66,10,420 Equity Shares of Rs. 1/- each.

7. Public Deposits and Loans/Advances

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

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

8. Employee Stock Option Scheme (ESOP)

As on March 31, 2013, 61,54,080 stock options are outstanding (comprising vested and unvested, after adjustment for lapsed and exercised options), in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs. 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1 each.

During the year under review, 18,36,310 options got vested to the employees of the Company and in aggregate, 67,01,040 options stands vested with the employees as on March 31, 2013.

The particulars with regard to the Employee Stock Options as on March 31, 2013 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2013, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Company''s Auditors confirming compliance forms part of this Report.

12. Directors

In accordance with Article 186A of the Articles of Association of the Company, the Board of Directors of your Company, at their meeting held on March 28, 2013, has re-appointed Mr. Ajit Gulabchand as Managing Director, designated as Chairman & Managing Director of the Company for a period of 5 years with effect from April 1, 2013, subject to the approval of the Shareholders of the Company at the ensuing Annual General Meeting.

In accordance with Article 135 and Article 186A of the Articles of Association of the Company, on May 3, 2013, the Board of Directors of your Company appointed Mr. Rajgopal Nogja as Additional Director and Whole-time Director of the Company designated as Group Chief Operating Officer & Whole-time Director for a period of 5 years subject to the approval of Shareholders of the Company at the ensuing Annual General Meeting.

The Company has received Notice under Section 257 of the Companies Act, 1956 from a member signifying his intention to propose Mr. Rajgopal Nogja as a candidate for the office of Director at the ensuing Annual General Meeting.

As per the provisions of the Companies Act, 1956 read with Article 152 of the Articles of Association of the Company, Mr. Y. H. Malegam, Mr. K. G. Tendulkar and Mr. Anil C. Singhvi are the Directors of the Company who are due to retire by rotation. Mr. K. G. Tendulkar and Mr. Anil C. Singhvi being eligible, offer themselves for re-appointment. Mr. Y H. Malegam has expressed his intention not to seek re-appointment as a Director of the Company.

The Board of Directors records its appreciation & recognition of the valuable contribution and services rendered by Mr. Y. H. Malegam during his long association for the last four decades as a Director of your Company.

The Company has received Form DD-A from all these Directors as required under the Companies (Disqualification of Directors under Section 274 (1) (g) of the Companies Act, 1956) Rules, 2003.

Profile of all these Directors has been given in the Report on the Corporate Governance as well as in the Notice of the ensuing Annual General Meeting of the Company.

13. Directors'' Responsibility Statement

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

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

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

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

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

14. Industrial Relations

The industrial relations continued to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 8,19,180 to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2004-05 which remained unclaimed by the shareholders of the Company for a period exceeding 7 years from its due date of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 219(1) (b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

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

18. Auditors

M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the Company, bearing ICAI Registration No. 100186W retire at the ensuing Annual General Meeting and are eligible for re-appointment.

As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the Auditors to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

19. Auditors'' Report

The Auditors'' Report to the shareholders on the Accounts of the Company for the financial year ended March 31, 2013 does not contain any qualification.

20. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders - Clients, Financial Institutions, Banks, Central and State Governments, the Company''s valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors,

AJITGULABCHAND

Chairman & Managing Director

Registered Office:

Hincon House, 11th Floor,

247Park, Lal Bahadur Shastri Marg

Vikhroli (West)

Mumbai 400 083

Place: Mumbai

Date: May 3, 2013


Mar 31, 2012

To The Members of Hindustan Construction Co. Ltd.

1. Report

The Directors are pleased to present the 86th Annual Report together with the Audited Accounts for the year ended March 31, 2012.

2. Financial Highlights

Particulars Year ended Year ended March 31, 2012 March 31, 2011 crore crore

Turnover 4002.75 4143.97

Profit before Interest, Depreciation,

Exceptional 439.80 540.89 Items and Tax

Less: Interest 543.16 329.04

Depreciation 162.10 152.69

Exceptional Items 166.32 871.58 - 481.73

Add: Other Income 122.83 43.91

Add/Less: Exchange Gain/(Loss) (9.53) 8.60

Profit/(Loss) before Tax (318.48) 111.67

Less: Deferred Tax Charge/(Credit) (96.23) 40.67

Profit/(Loss) after Tax (222.25) 71.00

Add: Balance brought forward from last year 347.83 319.62 Transfer from Debenture Redemption 16.67 4.16

Reserve

Amount available for Appropriation 142.25 394.78

Less: Appropriations

Dividend - 24.26 Tax on Dividend - 3.94 Debenture Redemption Reserve 16.25 8.75

Transfer to General Reserve 16.25 10.00 46.95

Balance carried to Balance Sheet 126.00 347.83



3. Dividend

In view of the losses incurred by the Company, your Directors have not recommended any dividend for the financial year ended March 31, 2012.

4. Operations

The turnover of the Company at Rs 4003 crore has shown a decrease of 3.4% as compared to Rs 4144 crore for the previous year. The loss before tax is Rs 318.5 crore (including exceptional item of Rs 166.32 crore) as compared to a profit of Rs 111.7 crore for the previous year.

The lower turnover and operating margins in an environment of high interest costs has put severe pressure on the Company's profitability. Non payments of awarded claims in arbitrations added to the liquidity problem and debt servicing ability and increased interest costs further. The Company approached lender Bankers with a refinancing proposal for bilateral refinancing of the loans with larger tenure. However consensus among Bankers could not be reached. Consequently, the Company approached the leading bankers and they have referred their total debt to the Company of around Rs 3300 crore to the Corporate Debt Restructuring (CDR) Cell. The CDR Empowered Group has formally admitted the proposal for restructuring on March 29, 2012 by a super majority of lenders.

Under the regulatory frame work of the Reserve Bank of India (RBI), the CDR forum caters to an official platform for both the creditors and borrowers to amicably and collectively evolve policies for working out debt restructuring plans. The broad contours of this restructuring exercise involves restructuring of debt in terms of payback period, deferring certain interests on term loans, concessional rate of interest and provision of further need based working capital and loans for capex. This debt restructuring will provide the Company with breathing space to work on improving operational margins and securing a larger order book to improve turnover in future years. Apart from focusing on cost cutting measures and cost effective execution, the Company will also focus on sale of non-core assets to improve its balance sheet position.

Your Directors are pleased to inform that during the year under review, the Company has secured the following major contracts.

- Limbdi Branch Canal Project, Gujarat Contract Value: Rs 299 crore

- Tehri Pumped Storage Project, Uttarakhand Contract Value: Rs 1843 crore

- Superstructure of Bogibeel Rail-cum-Road Bridge, Assam Contract Value: Rs 987 crore

- Swarnim Gujarat Saurashtra-Kutch Water Grid Programme. Package NC 31, Gujarat Contract Value: Rs 289 crore

- Single Line Tunnel No. 10 between Jiribam and Tupul, Manipur Contract Value: Rs 162 crore The total balance value of works on hand as on March 31, 2012 is Rs 15,336 crore.

Decisions are awaited from various clients for tenders submitted by the Company (directly or in JV) for 15 projects amounting to about Rs 7,745 crore. Tenders for various packages for 32 projects worth about Rs 27,485 crore are expected to be submitted in the near future. The Company has also submitted prequalification bids for 12 projects worth over Rs 7,588 crore, which are currently under evaluation. The Company is confident of securing a sizeable share of these new projects. Operations of Subsidiaries

(i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

a) Operations

Lavasa is a planned hill city being developed by Lavasa Corporation Ltd., a subsidiary Company. Located in the western region of India, the city is an hour drive from Pune and three hours drive from Mumbai. It is one fifth the size of Greater Mumbai Municipal limits.

The master plan of Lavasa is developed by internationally renowned design consultant HOK, USA. The master plan, recipient of many international awards, is based on the principles of New Urbanism that brings together all the components essential to daily life in a more organized manner. Lavasa has many pioneering initiatives to its credit - technology leadership, e-Governance, city developed using Geographical Information System (GIS), etc.

Lavasa is planned for a permanent population of around 3 lakh residents and a tourist inflow that is envisaged at 20 lakh per annum. It aims to provide a perfect work-life balance with an unique combination of technology and infrastructure advancements. The city will have a 365 day economy with a host of non polluting industries being the main economic driver which includes R&D and training centers, IT and biotech industry, KPOs and those related to art, fashion and animation.

In terms of awards and accolades, the thought leadership platform Lavasa Future Cities won the Silver Medal at the Olive Crown Awards for creative excellence in 'Green' communication.

This award recognizes pioneering work in communicating sustainability and has been instituted by the Indian chapter of the International Advertising Association (IAA) with Knowledge Partner TERI (The Energy Resource Institute). The Limca Book of Records also acknowledged the Lavasa Women's Drive 2011 (and 2010) as 'India's Biggest All-Women Car Drive'.

On the hospitality front, the hospitality units which are already operational are: Lavasa International Convention Centre managed by ACCOR, Mercure Lavasa, Fortune Select Dasve, Ekaant - The Retreat, Dasvino Town and Country Club and Waterfront Shaw Serviced Apartments. Other than this, Radisson, ITC Luxury Collection, Choice Hotel, J. Vohra Hospitality, Novotel by Accor, Pullamn by Accor, Hilton, Ramada, Oakwood, Two Langham properties, Holiday Inn, Days Inn Hotel are already tied up and many more are to follow in quick succession giving Lavasa a new hotel property every 6 months.

An equal amount of progress has been made in the education space. 'Christel House School, Lavasa' entered into its second year of operations with 209 students. After the success of the first year, in the year 2011-12, the phase - II of 'Christel House Lavasa' was launched. 'Ecole Hotelier Lavasa' started its third batch and received academic certification from Ecole hoteliere de Lausanne to conduct the Masters Programmers and for offering and conducting degrees from IGNOU. Next on the agenda this year, is Lavasa Masonries International School powered by Educomp.Other than this, Ryan International for performing arts, Birla Edutech (by Yash Birla) IB school, Gems International IB school, Management Institute by Bodhi Education, Euro Kids with a primary and pre-primary school, The Institute of International Business Relations Germany, NSHM Knowledge Campus of Kolkata, Symbiosis-Pune and Christ University-Bangalore are also tied up for setting up their campuses.

Professional and Executive Education has also taken off in Lavasa in a big way with Car Design Workshop by Chris Bangle (Scoular Polytechnic di Design) the world renowned school of design and communication based in Milan, Security Awareness Workshop by Max Security (Israeli Security experts) and Massachusetts Institute of Technology who have conducted their pilot program based on Airport and Airline Systems, Planning and Management. This has prepared a platform for them to conduct similar programmers at Lavasa in the future.

On the retail front, American Diner, Granma's Bakery, Brew berry's Cafe Memories, Baskin & Robbins Kiosk, Tabatha, Oriental Octopus, Amul Dairy, Chor Bizarre, Subway, Hungry hippo, Crazy Koala Kiosk, Twisted Turkey Kiosk, Fruity bat, Pizzavala, Natural Ice Cream, Bizarre Barracuda, Design & Build Store - Home Town are already operational.

Positive sales trend continued throughout the year, with the Company giving possession to 150 residential units in Dasve. Residential sales of the first town Dasve have almost been completed. There have also been many enquiries for further residential units in Lavasa. Sales for the second town Muggon was launched on the occasion of Gudi Padwa in March 2012. Almost 75% of the inventory has been sold out within just a fortnight of the launch. It is also heartening to know that there has been less than 1% cancellation requests from customers inspire of the Ministry of Environment and Forest (MoEF) status quo.

The current database of enquiries for the purchase of apartments and villas exceeded almost eighty thousand which indicates a healthy demand.

Institutional sales and commercial tie ups have also made progress with a number of MoUs being signed. Land sale has been made to State Bank of India who plan to set up a retail bank and a training centre cum guest house at Dasve. Development of an integrated Corporate Training Centre with a residential component at Mugaon is also being planned by a consortium led by the Giria Investment Corporation, Bengaluru.

The Art of Living centre is also slated to open at Mugaon. Sales are also fast picking up in our commercial office spaces ventures - 247 Business Square and 247 Business Avenue at Lavasa.

These are just initial steps towards a 365 day - 247 economy that Lavasa is planning to accomplish. In the next year, the target is for many such industries including IT&ITES, Biotechnology, Knowledge Parks, R&D centers and Corporate Training centers to enable permanent residents to move in.

On the tourism front, X-Thrill adventure academy, Water Sports, Noes park (games Arcade), Nature trail, Train on wheels, Kids play Area, movies, parks & gardens are already operational. Other than this, Space theme park (edutainment), Tennis Australia, Manchester City Football Club are also already tied up.

Lavasa is also tying up with I Dream to create all Lavasa tourism plan including a Historical theme park. This project is being spearheaded by Mr. Shirpal Morakhia, businessman who created Share khan. Lavasa is also tying up with Engage Plus, a New Zealand Company, for adventure sports activities, to give adventure experience at Dave and nearby areas.

Events continued to be a key focal point and the

year saw a multitude of events that increased the salience of the brand and helped engage with the consumer on-ground. The fourth edition of the signature brand event Lavasa Women's Drive was held on February 26, 2012. The event which captures multiple aspects - fun, adventure and spirit of the Indian woman combined with her passion for social causes was flagged off from Mumbai and Pune. This year, Lavasa Women's Drive also launched the 'Women in the Driving Seat' awards where women achievers who had made an impact and created a benchmark were applauded in various fields. These included Vidya Balan (Cinema), Dr. Swati Piramal (Corporate),

Dr. Firuza Parekh (Healthcare), EktaKapoor (Television), Tina Tahiliani (Fashion), Shaheen Mistry (Education), Abha Narain Lambah (Community Development), Neela Satyanarayan (Administration) and Devieka Bhojwani (Cancer Awareness).

Lavasa was the destination partner for the Pantaloons Famine Miss India (PFMI) pageant for the fourth year in succession. Residential sales of the second town at Muggon was launched in the presence of the PFMI finalists. On this occasion, handover of possession of the residences built at the first town Dasve to the 100th and 101st apartment owner has also been accomplished.

Lavasa has collaborated with technology leaders like Wipro Limited and Cisco Systems to plan, implement and manage Information and Communication Technology (ICT) services across Lavasa Hill City. The strategic partnership is intended to focus on providing integrated and effective solutions for enhancing technology leadership within the hill city. The Company founded as a result of this venture is named as 'My City Technology Limited'. This venture is currently deploying a futuristic telecom network infrastructure to offer its residents and visitors a life changing technology experience.

Lavasa now has a new post office, police station, a public safety centre, citizen call centre, a hospital managed by Apollo, banks (Union Bank of India, State Bank of India), a petrol station, pharmacy,

STP WTP rental housing, an arcade and transit system. In the months ahead it will open grocery and additional retail shops.

The city's drinking water is fit for consumption straight from the tap without the need for filtration; its sewerage is treated to almost drinking water standards before being reused for irrigation and other non-potable purposes; its power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. The Company plans to have its e-Governance portal and a citizen call centre to maintain its focus on the needs of residents and visitors, and it has already opened parks and play areas to the public.

Lavasa continued its focus on branding and communication activities through 2011-12.

Importantly,Lavasa was granted Environmental Clearance by the Ministry of Environment & Forests (MoEF) for the first phase of 2000 hectares (Ha) in November 2011. A large scale PR exercise across media, i.e., print, TV and online was undertaken welcoming the news. Social Media and the Lavasa website disseminate related information and for addressing queries as a part of the exercise. Media engagement and relationship building exercise continued throughout the pre- clearance to post-clearance period. A new brand campaign 'At Work" was released in 2012. This was to reassure the general public at large that developmental work has begun at Lavasa.

Lavasa City Guide - a one - stop source on all information on Lavasa and a new 3D walkthrough film - 'Muggon - A Virtual Tour' was created. A new property 'Lavasa Holidays', to promote tourism at Lavasa was launched. An engagement program called Brand Conversations was conceptualized which will comprise of informal conversations with the employees across the various departments on how brand principles should be applied to day-to- day functioning.

Digital and social media was being extensively used for information dissemination and creating conversations on a number of platforms on the web including travel, tourism and urban management portals. These engagement initiatives saw an increase in the fan base of the Lavasa Community page on Face book to almost 90,000 fans.

b) Status update on Environment Clearance from Ministry of Environment and Forests (MoEF)

On November 25, 2010, Ministry of Environment & Forests ("MoEF"), Government of India issued show cause notice under Section 5 of the Environment Protection Act, 1986 to Lavasa Corporation Limited ("LCL') alleging violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). The said notice directed LCL to show cause within 15 days of the receipt of the said notice as to why the alleged unauthorized structures at Lavasa site be not removed in entirety and pending the decision on show cause notice by MoEF, it directed LCL to maintain status-quo ante for construction and/or development.

LCL has filed Writ Petition No. 9448 of 2010 against the impugned show cause notice in the Bombay High Court seeking inter alia, quashing of the said show cause notice and stay on status quo pending the decision on the Writ Petition. On December 7, 2010, the Counsel for MoEF made a statement in the Bombay High Court that the words "status quo ante" in the MoEF's show cause notice dated November 25, 2010 may be read as "status quo" as the word "ante" is a mistake. Further, vide its order dated December 22, 2010, the Hon'ble Court while admitting the Writ Petition directed MoEF and Central and/or State level Environment Impact Assessment Authority to visit LCLs project at Lavasa and inspect it thoroughly for at least three days to undertake the survey / inspection and pass an order by January 10, 2011. In the same order dated December 22, 2010, the Hon'ble High Court clubbed together 4 public interest litigations filed against LCL ('other PILs') inter alia in respect of lease of land by Maharashtra Krishna Valley Development Corporation to LCL, alleged violations by LCL of the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961 and the Environment (Protection) Act, 1986.

The members of MoEF committee along with officials of Government of Maharashtra visited Lavasa site on 5th, 6th and 7th of January, 2011.

Vide its order dated January 17, 2011, MoEF observed that LCL is in violation of EIA Notifications and the construction activity undertaken thereon is unauthorized, in violation of the above notifications and is environmentally damaging. However, taking into account the submissions made by LCL, employment generated, investments already made and third party rights already accrued, MoEF stated that it is prepared to consider the project on merits with terms and conditions.

On January 24, 2011, LCL filed another Writ Petition being No. 811 of 2011 in Bombay High Court challenging the aforesaid impugned order dated January 17, 2011 passed by MoEF

On January 27, 2011, Writ Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 along with other PILs were listed in Hon'ble High Court. However, the Hon'ble High Court, upon LCLs plea was pleased to adjourn the matters for 45 days in view of the ongoing discussions with MoEF on amicable settlement and posted all LCL connected matters on March 10, 2011.

LCL on February 7, 2011 submitted a "without prejudice" application to MoEF for Environment Clearance (EC) and submitted various documents to MoEF, from time to time, for its consideration.

LCL attended & presented at the 97th & 98th meeting of the Expert Appraisal Committee ('EAC') on CRZ, Infrastructure & Miscellaneous Projects and New Construction and Industrial Estates Projects scheduled on 14th & 15th February, 2011 & 3th & 4th March, 2011 respectively at New Delhi and submitted various supporting documents and also made oral representation.

The minutes of the 98th meeting of EAC held on 3rd & 4th March, 2011 at New Delhi inter alia state that, the EAC recommends that in view of the investments made by the third parties, infrastructure already created in the Dasve village and taking note of the reported hardships highlighted repeatedly by LCL of the construction workers, pending construction work of 257 residential buildings, which are above plinth level, may be allowed subject to certain conditions such as (i) no hill cutting, digging, excavation, etc, (ii) the above constructions shall only be limited to the area for which permission was granted by the Collector, Pune, (iii) a high level Verification and Monitoring Committee shall be constituted,

(iv) commitment from LCL to earmark necessary / adequate funds as per report to be submitted shortly regarding the quantum of penalty/ re- compense and creation of Environmental Restoration Fund and (v) other conditions as stipulated by MoEF / other State agencies of State Government shall also be complied with.

In view of the above stipulations, the Committee recommended to MoEF to permit LCL to complete 257 units subject to the acceptance of the five conditions listed above and also subject to submission of information / documents as per the above observations.

Further EAC also stated that consideration of the proposal would depend on submission of the requisite information as detailed above.

On March 30, 2011, LCL filed an application to withdraw the Writ Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 with a liberty to file a fresh one as and when need arises. On hearing all the parties including PIL litigants, the Hon'ble High Court suggested that in order to take care of the apprehensions of the PIL litigants, LCLs counsel and MoEF counsel should make a statement that status quo order dated January 17, 2011 passed by MoEF should continue to operate till show cause notice is decided by MoEF LCL was of the view that its writ petitions should not be withdrawn with such an adverse order and hence decided not to withdraw its writ petitions and matter was then adjourned to June 15, 2011.

On April 6, 2011 LCL attended the 99th meeting of EAC and made presentation before members of EAC and replied to the queries raised by the EAC in relation to the vacation of status quo on the construction work in area admeasuring 681.27 hectares, pending consideration of its 1st phase Environment Clearance (EC) of 2000 Hectares. As per the Minutes of the 99th Meeting of EAC, EAC decided that proposal of the Company for 681.27 hectares be deferred and be considered along with the whole proposal of 2000 hectares.

LCL vide its letter dated April 30, 2011 submitted para wise reply to the points raised by the EAC in its 99th Meeting & requested to grant EC to 681.27 Hectares.

On April 12, 2011, LCL as per the directions of the EAC, submitted revised Environment Impact Assessment report and baseline data / maps etc. The 100th meeting of the EAC took place on May 12, 2011. LCL made presentation in relation to the queries raised in the previous meeting with respect to the application for EC for 1st Phase (2000 hectares). On May 21, 2011, LCL submitted para wise reply to the points raised in the EAC's 100th meeting dated May 12, 2011.

On May 31, 2011 the senior officials of LCL along with consultants attended the 101st meeting of EAC and made presentation in relation to the queries raised in the previous meeting. As per the Minutes of the 101st meeting the EAC recommended the proposal for Environment Clearance for the 1st Phase (2000 hectares) with the conditions mentioned therein.

On June 10, 2011 MoEF directed to the Government of Maharashtra to initiate necessary legal action under Environment (Protection), Act 1986 against LCL.

On June 15, 2011 LCLs Writ Petition No. 811 of 2011 and Writ Petition No. 9448 of 2010, were listed on board in the Bombay High Court. The MoEF filed an Affidavit in the Company's Writ Petitions stating that ministry has accepted the recommendations of EAC subject to preconditions. The learned Additional Solicitor General appearing for MoEF stated that the MoEF will be passing an order within a reasonable time. The matter was then adjourned to July 12, 2011.

On June 27, 2011 MoEF, Government of India addressed a letter to LCL thereby enclosing the Minutes of the 101st Meeting held on May 31, 2011 and also informed the five pre-conditions. It further requested LCL to submit all the documents as per the pre-conditions. The five pre-conditions, reproduced verbatim, are:-

i) The constructions / development carried out till now are in violation of Environment

(Protection), Act 1986. The violation has to be dealt as per OM No. No.J-11013/41/2006-IA.

II (I) dated November 16, 2010. As per 4(ii) of the above OM, LCL shall submit a written commitment within 90 days, in the form of a formal resolution from Board of Directors of the Company for consideration of its environment related policy / plan of action to the Ministry to ensure that violation of the Environment (Protection), Act etc. shall not be repeated.

ii) The scale and intensity of development of the hill town shall be as per Hill Station Regulations and shall be revised based on developable / buildable area. A clear demarcation of "no development / construction zone / area" shall be identified comprising of (a) all water bodies (b) forest lands / forest like lands and (c) areas steeper than 1:3. The developable / buildable areas shall be verified through State Government / Director Town Planning and the calculation of FSI shall be made accordingly. No development shall be taken up in areas steeper than or equal to 1:3.

iii) The FSI calculation shall be worked out separately based on the land uses and shall not be averaged for the calculation of FSI.

iv) At least 5 % of the total cost of the project shall be earmarked towards the Corporate Social Responsibility (CSR) and item-wise details alongwith time bound action plan shall be prepared and submitted to the Ministry's Regional Office at Bhopal. Implementation of such program shall be ensured accordingly in a time bound manner.

v) LCL shall submit an undertaking / commitment to earmark necessary / adequate funds as per report to be submitted shortly regarding the quantum of penalty / re-compose and creation of Environment Restoration Fund.

On July 12, 2011 LCL sent an e-mail and a letter to the Director, MoEF, requesting for hearing on the pre-conditions mentioned in the letter dated June 27, 2011 as the same were unreasonable.

On July 27, 2011 LCL vide its letter submitted to MoEF its case in respect of the pre-conditions and also requested that the case of LCL may be processed further for appropriate decision without waiting for the date of hearing which was scheduled for August 5, 2011.

Further, on August 5, 2011 the officials of LCL appeared before the panel and made written submission along with the Board Resolution in respect of the pre-conditions as stated in MoEF's letter dated June 27, 2011. Thus, LCL complied with the pre-conditions as stated by MoEF.

Considering the delay by MoEF in issuing EC, LCL filed another Writ Petition on August 30, 2011 in the Hon'ble Bombay High Court seeking directions interlaid that (a) it be declared that LCL has been granted / deemed to have been granted environmental clearance for Phase I of the project or in the alternative (b) the Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction commanding the MoEF, to grant environmental clearance to Phase I.

On September 5, 2011 LCLs Writ Petitions along with other PILs were listed on board. The counsel for MoEF submitted that they will pass final order by September 23, 2011.

On September 23, 2011 all related matters were listed on board. After hearing the parties, Hon'ble High Court granted three weeks time as prayed for by the Ld Additional Solicitor General appearing for MoEF for passing the final order. The Hon'ble High Court made clear that this three weeks time is granted by way of a last chance for passing final order. The matters were adjourned to October 18, 2011.

On October 13, 2011, MoEF passed an order thereby communicating that "As the pre-conditions on the credible action on violation of EIA Notification 2006 has not been complied with, the Ministry is unable to issue the EC to the 1st phase of Hill City project (2000 hectares) of Lavasa. The final decision on the EC cannot be taken till all the pre-conditions are met including credible action by the State Government of Maharashtra and subject to final orders of the Hon'ble High Court of Bombay as the matter is sub-judice"

On October 20, 2011 all LCL matters were listed on board of Hon'ble Bombay High Court. LCLs Counsel also pointed out that time and again the MoEF has sought for adjournments but failed to pass the final order and the inaction on the part of MoEF in not passing final order would virtually amount to misleading the Court. The Ld. Special Counsel for the State made statement that the State Government will initiate necessary action in accordance with the law, against LCL within two weeks. Thereafter MoEF Counsel made a statement that MoEF will pass final order within one week thereafter. In view of the statements made by the respective counsels for State Government and MoEF, the Hon'ble court gave three weeks time to MoEF to pass final order as prayed for and observed that this three weeks time shall not be extended in any circumstances. The matters were adjourned to November 16, 2011.

On November 4, 2011, Maharashtra Pollution Control Board (MPCB) filed a criminal complaint against LCL & 14 Others before the Chief Judicial Magistrate, Pune under Section 15 and 16 of the Environment Protection Act, 1986 (EP Act) for alleged violations of the EP Act read with EIA Notification 2006.

On November 9, 2011, MoEF passed an order and pursuant to the same accorded Environment Clearance to the 1st phase of the LCL project subject to certain conditions as mentioned therein.

On November 16, 2011 all LCL matters were listed on board. MoEF filed its affidavit in reply to LCL Writ Petition no. 7276 of 2011. Matters were adjourned to December 12, 2011.

On November 17, 2011 LCL submitted certain documents to The Deputy Director (I.A), in compliance of Condition No. ii Part A - Specific Conditions, Construction Phase.

On November 24, 2011 the Chief Judicial Magistrate, Pune passed an order of issuance of process in the Criminal matter and the matter was then adjourned to January 30, 2012.

On December 6, 2011 LCL vide its without prejudice letter addressed to The Advisor, I A Division of MoEF requested for exclusion of the K T Ravindran committee report from the EC order dated November 9, 2011 and also requested for a hearing. On December 7, 2011 LCL vide its without prejudice letter addressed to The Advisor, I A Division of MoEF, informed that there are certain discrepancies and contradictions in the EC dated November 9, 2011 and requested for reconsidering the pre-condition no (iv) and also requested to withdraw the same. LCL also addressed a letter to The Advisor, I A Division of MoEF, and requested to furnish papers i.e. Terms of Reference (TOR) of Prof K T Ravindran Committee, interim report dated March 7, 2011 presented by expert committee to MoEF, notings made by each of the members of the K T Ravindran committee, etc.

On December 9, 2011 LCL filed Appeal being no. 36 of 2011, u/s 16(h) of the National Green Tribunal Act against The Union of India, MoEF & Anr, before the National Green Tribunal (NGT) at Delhi, for challenging part of the EC order dated November 9, 2011 more particularly about the Prof. K T Ravindran Committee Report and the conditions imposed by it.

On December 12, 2011 all LCL matters along with other connected matters were listed on board before Hon'ble Bombay High Court. The matters were adjourned to January 31, 2012.

On January 10, 2012 LCLs Appeal No. 36 of 2011 filed before NGT was on board and the Tribunal was pleased to pass order "Notice before Admission" and the matter was adjourned to February 17, 2012.

On January 30, 2012 Criminal Complaint filed by MPCB was on board of Chief Judicial Magistrate, Pune and the same was adjourned to March 17, 2012.

On January 31, 2012 all LCL matters along with other connected matters were listed on board before Hon'ble Bombay High Court, Division Bench of Justice Bobde & Justice Dhanuka. The Bench recsued to hear the LCL matters.

On February 6, 2012 one of the villager Shri Dyneshwar Shegde filed Appeal (being No. 9 of 2012) before Hon'ble National Green Tribunal challenging the EC order dated November 9, 2011 passed by MoEF in favour of LCL.

On February 17, 2012 NGT Appeal filed by LCL was listed on board of Hon'ble Tribunal at Pune and the same was adjourned to April 16, 2012.

On February 21, 2012 all LCL matters along with other connected matters (except PIL (L) 90 of 2010 & WP 2737 of 2011) were listed on board before Hon'ble Bombay High Court Division Bench of Justice Khanvilkar & Justice N Jamdar. The Bench recsued to hear LCL matters as Justice Jamdar had appeared for MoEF

On February 22, 2012 Shri Dynes war Sedge's Appeal was on board before Hon'ble NGT, Delhi. LCL intervened in the matter & opposed the application for condo nation of delay filed by the Appellant. The matter was adjourned to March 20, 2012.

On March 17, 2012 Criminal Complaint filed by MPCB was on board before Chief Judicial Magistrate, Pune and the same was adjourned to April 20, 2012.

On March 20, 2012 Shri Dynes war Sedge's Appeal was on board before Hon'ble NGT, Delhi. LCL filed its affidavit in reply opposing the application for condo nation of delay filed by the Appellant. The matter was adjourned to April12, 2012.

On April 12, 2012 Shri Dynes war Sedge's Appeal was on board before Hon'ble NGT New Delhi. Submissions were made by the parties on the application for condo nation of delay in which the parties apprised the NGT on the facts of the appeal. Advocate for Dynes war Shedge prayed for time to file rejoinder. The Hon'ble NGT directed him to file rejoinder before April 18, 2012. The matter was adjourned to April 24, 2012.

On April 16, 2012 NGT Appeal filed by LCL was listed on board of Hon'ble NGT at New Delhi. The Hon'ble NGT directed MoEF and MPCB to file their affidavits before July 2, 2012. The matter was adjourned to July 19, 2012.

On April 20, 2012 Criminal Complaint filed by MPCB was on board before Chief Judicial Magistrate, Pune and the same was adjourned to May 14, 2012.

On April 24, 2012 Dyneshwar Shegde's Appeal was on board before Hon'ble NGT, New Delhi. The Advocate for Appellant filed rejoinder. Arguments by all the parties got concluded. The Hon'ble NGT has reserved the Order. No further date is fixed.

ii) HCC Real Estate Ltd.

HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company, has inherent skills and resources to develop and deliver high-value real-estate projects that helps in building sustained communities across India. The focus is to develop 'state-of-the-art' projects which would provide world class quality, engineering and technology and create a unique value proposition for the customers.

Project Management Services

With successful and timely completion of 247Park, the Project Management department of the Company was entrusted with the responsibility of providing Project Management Consultancy (PMC) for various projects for our associate companies such as Charosa Wineries Ltd., Panchkutir Developers Ltd. The scope of the work included project management, health-safety and environment management.

After completing these projects, the project management team is hopeful of getting some projects from external clients. In the present trying circumstances, income from the project management consultancy business is expected to add to the revenue of the Company by utilizing the technical skills available within the Company.

Projects under execution

1. 247Park Phase II

The Company has initiated the regulatory process for obtaining the approval for development of commercial office building with approx. 400,000 sq ft of saleable area and approx. 800,000 sq ft total construction area. The project is based on the "Public- Parking Policy," finalized by Municipal Corporation of Greater Mumbai (MCGM) for which the Company has submitted the application. The Company has received preliminary approvals from Jt. Commissioner- Traffic for 520 car parks on the basis of extensive traffic surveys conducted by traffic consultants. Subsequently the architects, structural engineers and traffic consultants have prepared the reports for submission to the Parking committee constituted by MCGM which has approved location and detailed building drawings of the scheme after extensive reviews. The Company has also commenced work on acquiring various other NOC's including from Fire Department of MCGM.

During the year, the project team has conducted prequalification exercise for the civil and other contractors for the construction. The Company envisages completion of the construction of the project by 2014.

The marketing and sales department of the Company has submitted Request for Proposals (RFP) for built-to-suit (BTS) commercial office space requirement and the Company is hopeful of receiving good response riding on the success of 247Park Phase I.

2. Urban Renewal (Slum Re-development Project), Poway

MOU-cum-Development Agreement and Power of Attorney were executed by land owner in favor of the SPV, Panchkutir Developers Ltd , a subsidiary of HCC for 12 acres of land. Due to non performance by the land owner of the various obligations under the MOU-cum-Development Agreement inspire of repeated reminders, we have been advised by our solicitor to invoke the Arbitration clause forming part of the MOU- cum-Development Agreement. Accordingly, Arbitration proceedings have been initiated and we have obtained interim orders.

3. Urban Renewal (Slum Re-development Project), Vikhroli (E)

Out of the total land holding of around 32 acres by the Panchkutir Developers Ltd. in Vikhroli (E), the survey of tenements on Phase-I of 14.5 acres of land to ascertain the development potential of the free sale component is completed. Out of the 1960 slum residents, consent of about 1400 residents representing more than 70% has already been obtained and the process for forming the society is in progress. Out of the proposal submitted to Slum Redevelopment Authority (SRA) for Phase-I of about 2000 slums, Annexure II has been displayed for 750 tenants of 4 Societies & for the balance the work is in progress. Slum declaration of Phase-I land is challenged which has been set aside by the Special Slum Tribunal. Subsequently the litigant filed Writ Petition challenging the above said Order of the Slum Tribunal in High court. Hearings from both the sides are completed and the judgment is awaited.

4. Integrated Township Development, Thane

HRL (Thane) Real Estate Ltd. a subsidiary of HREL initiated the acquisition of land at Ghod bunder Road, Thane for Integrated Township Development. Till date the Development Agreement and Power of Attorney for 32 acres have been executed in favour of the Company. The Company continued its activity of securing its position for land title and other documentation.

5. Integrated Township Development ,Pune near Hinjewadi IT Park (Phase1)

Maan Township Developers Ltd, a subsidiary of HREL has acquired approx. 28 acres of land and the Development Agreement and Power of Attorney have been executed in favour of Company. The Company continued its activity of securing its position for land title and other documentation.

6. Integrated Township Development Land, Wadiwarhe, Nashik

Nashik Township Developers Ltd a subsidiary of HREL has acquired 62 acres of land for which Development Agreement and Power of Attorney have been executed in favour of Company. The Company is exploring sale option as well as various development options with education service providers in view of improved connectivity to the region.

7 Water Front City at Cholera ,Gujarat

HCC signed MOU with Government of Gujarat for setting up of proposed Water Front City covering 4000 acres and Renewable Energy Park covering 1500 acres at Cholera SIR with total proposed investment of Rs 52,000 crore. The Company finalized the "Vision Statement," for development of "Water Front City" after discussion and meetings with Gujarat Government Officials and Ministers. The Company is exploring joint development opportunities with Samsung C & T Corporation and other reputed developers. Concept Development Report on proposed City has been submitted to Gujarat Infrastructure Development Board (GIDB). Proposal of allotment of 1900 acres of land in Bavliyari Village has been received from Govt. of Gujarat. Letter requesting land in Zone 1 (TP1) & Zone 2 (TP2) closer to Ahmedabad & payment terms has been sent to Dholera Special Investment Regional Development Authority (DSIRDA). The discussion on the subject is in progress.

8. Charosa Wineries Limited, Dindori, Nashik

Till date purchase of total 211 acres of land has been completed. Purchase of another 27 acres of land is in progress as on date. Total land area under cultivation is 81 acres. During the year, the Company signed a PMC agreement with the Project Management Team of HREL for providing project management, health-safety and environment management. Construction of Winery Building is at an advanced stage. The Company has received approval to procure land under Section 63-1A of Bombay Tenancy and Agricultural Lands Act (BTAL) for Wine Tourism Project. The Company has also been accredited under "Mahabhraman" scheme of Maharashtra Tourism Development Corporation (MTDC) to operate tour packages within the state of Maharashtra. Further the Company has obtained registration from MTDC as a service provider for tourism.

Internationally renowned Master Planners and Architects, HOK have done master planning for setting up wine tourism project consisting of tourist resorts, cellar-doors, wine bars, restaurant, theme park, adventure sports, amphitheater, Wine spa etc. Harvesting and crushing of nearly 200 MT grapes has been completed during the year. During the year Company fully repaid the loan taken from the bankers.

(iii) HCC Infrastructure

HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, has in its Rs 5,500 crore portfolio, six National Highways Authority of India (NHAI) road concessions.

The Company, through its subsidiaries HCC Concessions and HCC Power, has a development focus primarily in the roads, water and power sectors. Your Company follows a disciplined investment strategy that maximizes shareholder value by generating stable and rapidly growing streams of cash flow over concession periods ranging from 15 to 30 years. Besides obtaining a construction edge provided by HCC's E&C division, HCC Infrastructure has developed a strong management team whose expertise extends from concept innovation and evaluation of risk & return, to construction management and operations. Along with a focus on quality and timely execution, the Company is committed to provide reliable, safe and world class operations and maintenance services to the country's end users.

Fund Raising Initiative:

Your directors are pleased to inform you that in September 2011, HCC Infrastructure Co. Ltd, wholly owned subsidiary Company raised Rs 240 crore by diluting 14.5% equity stake in HCC Concessions to the Xander Group at an equity valuation of Rs 1,650 crore. This equity placement was completed during challenging market conditions and showcases both the quality of the HCC Infrastructure's portfolio and the conviction in their management team. The Xander Group Inc. is a global investment firm focused on the infrastructure, hospitality, retail and real estate sectors. Since 2005, the firm has committed over US$1.8 billion of equity capital to the Indian market across five dedicated India funds. Your Company remains committed to capital raising at attractive valuations to meet its equity requirements for future growth.

Current Road Portfolio:

Your directors are pleased to inform you that during the course of the year, the Company successfully achieved the provisional completion of Dhulia Pilsner Highway project and started toll collection on February 11, 2012, four months ahead of schedule. This is the third such consecutive early completion, showcasing our project management and construction expertise. Toll collection is significantly ahead of estimates and is expected to grow strongly.

The three highway projects in West Bengal (NH34) are under construction and traffic growth on the road over the past two years has significantly exceeded expectations.

During the year, HCC Concessions submitted 9 NHAI bids and 28 Request for Qualification (RFQs). HCC Concessions partnered with VINCI Concessions for certain large bids to diversify risk and increase competitiveness. While your Company was unsuccessful in procuring a new project this year, it maintained its investment discipline while observing that several competitors were aggressively obtaining projects at detrimental or unsustainable values. The Company will continue to bid for NHAI projects in the next financial year, where approx. 8,000 km of roads is expected to be awarded. Your Company is also evaluating state road opportunities.

Status of Operational Assets:

Dhule Palesner Highway Project (NH3)

The project started user fee collection in February 2012, four months ahead of schedule. In FY09, NHAI awarded the development of four lane highway from Km 168.500 to Km 265.000 on the Maharashtra/MP border to the consortium led by HCC Concessions on BOT (toll) basis.

The project road (89 km) starts at Dhulia in Maharashtra and ends at Pilsner on the border of Maharashtra and MP on National Highway 3.

The project is being operated by an in-house operations and maintenance team. The concession period is 18 years, including a construction period of 30 months. The highway is being developed in partnership with Sadbhav Engineering Ltd and John Laing Investments Ltd (UK) with an investment of Rs 1,420 crore.

Delhi Faridabad Elevated Expressway (NH2) (dfskyway™)

The dfskyway™ started user fee collection in November 2010. This project was also completed ahead of schedule. The project road is a 4.4 km elevated highway connecting Delhi and Faridabad, Haryana and serves inter-state and local traffic. With immediate connectivity for Faridabad to the heart of Delhi due to dfskyway™, one expects much higher growth for Faridabad, which has recently been cited as the 8th fastest developing city by The City Mayors Foundation, UK.

The project has remaining concession period of approximately 17 years. HCC was awarded a 20- year concession in 2008 to design, construct and operate this asset by the NHAI.

Nirmal (NBL) Annuity (NH7)

The SPV has received timely annuity payments over the last year and the operations and maintenance are being managed efficiently by our in house team.

The project stretch extends from the Maharashtra- Andhra Pradesh Border to Armur in Andhra Pradesh, which forms a part of the Nagpur- Hyderabad section of NH7 This is the sole Annuity project in our portfolio. This 33 km project was completed about 100 days ahead of scheduled completion. The remaining concession period for the project is 15.5 years. The project was developed by HCC with an investment of Rs 315 crore.

Status of Assets under Development:

West Bengal (NH34) Highway Project

This highway project includes three contiguous sections (256 km) on National Highway 34, starting from Baharampore and ending at Dalkhola. The construction of this highway project is underway and your Company has achieved considerable progress over the last year. Though NHAI has found the land acquisition process along the project stretch challenging and final completion is likely to be delayed by a few months due to this, we expect that the project would start tolling by originally scheduled completion date (on 75% completion). The project is being solely developed by HCC with an investment of Rs 3,232 crore.

Baharampore Farakka Highway

This section, awarded in FY10, is a 103 km stretch originating at Baharampore and terminating at Farakka. The concession period is 25 years, including a construction period of 30 months. The project is being implemented with an investment of Rs 1,169 crore.

Farakka Raiganj Highway

This is a 103 km stretch originating at Farakka and terminating at Raiganj. The concession period is 30 years, including a construction period of 30 months. The project is being implemented with an investment of Rs 1,378 crore.

Raiganj Dalkhola Highway

This is a 50 km stretch starting at Raiganj and terminating at the town of Dalkhola. The concession period is 30 years and includes a construction period of 30 months. The project is being implemented with an investment of Rs 684 crore.

(iv) Steiner AG, Switzerland

Your Company holds through its wholly owned HCC Mauritius Enterprises Ltd. a controlling equity stake of 66% in Steiner AG (formerly Karl Steiner AG). Steiner AG is a leading general contracting Company in Switzerland, specialized in turnkey development of new buildings and refurbishments, and offers services in all facets of real estate development and construction.

Steiner AG had a consolidated revenue of Rs 3996.2 crore and a consolidated profit before tax of Rs 20.8 crore in the period from April 1, 2011 to March 31, 2012.

After three years of construction, Steiner AG completed the Prime Tower, Switzerland's highest building (126 meters high), in collaboration with a partner. With 36 floors, usable surface of 40,000 sqm and space for 2,000 work places, the Prime Tower is a landmark for the whole region.

In the business year 2011-12 Steiner AG signed many important contracts, which include the project Neue Schanzenpost/Postmark in Berne, a total services contract of around CHF 160 million with Swiss Post as client, a general contract for the project Mohr ales When in Zurich, consisting of 13 apartment buildings and a range of office spaces and business premises, for a total volume of around CHF 145 million and a total services contract for project Lindbergh in Zurich, a large- scale building for mixed use with Credit Suisse as investor with a total volume of around CHF 100 million.

At year end, the order backlog of Steiner AG was CHF 1512 million compared to CHF 1018 million as of March 31, 2011. Steiner AG has also secured projects worth CHF 135 million which are yet to be signed.

By the end of July 2011, Steiner AG relocated into its new headquarters, which is located in Andréa spark Business Centre in Zurich and was developed and realized by Steiner AG. Steiner AG also changed its corporate name from "Karl Steiner AG (Karl Steiner SA) (Karl Steiner Ltd)" to "Steiner AG (Steiner SA) (Steiner Ltd)". The new name became official with the relocation of Steiner AG to its new headquarters.

To help achieve your Company's goal of extending its footprint in India's growing residential and commercial construction market, Steiner AG incorporated a wholly owned subsidiary in Mumbai under the name of Steiner India Limited. The new entity will undertake construction of real estate projects in India.

The board of directors of Steiner AG comprises five members. Your Company is represented by three nominees: Mr. Ajit Gulabchand, who also acts as Chairman, Mr. K.G. Tendulkar and Mr. Anil Singhvi.

v) Highbar Technologies Ltd

Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is an Information Technology Company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry.

Highbar Technologies' core team comprises of IT and Infrastructure professionals who have amalgamated the legacy of domain knowledge in the infrastructure business with Information technology. Highbar focuses on IT implementation initiatives from business transformation perspective rather than technology implementation perspective.

This year, Gartner- one of the world's most renowned IT research agency, has published case study on managing successful IT spin-off with Highbar as an example. After a long time they could locate a successful spin-off worth writing case study on it. Industry experts have recognised it as 'Asia's 1st IT Company for Infrastructure industry' and have shown faith in its capabilities as against big established IT players.

In the last financial year, Highbar Technologies was able to serve 10 new customers, taking the total tally of its customers to 50. Long list of reference customers and high quantum of repeat business indicates maturity of Highbar's delivery capabilities.

In order to serve Infrastructure industry in Middle East more effectively, Highbar Technologies Ltd, has incorporated a subsidiary in Dubai, named 'Highbar Technologies FZ-LLC' which is now fully operational and has bagged customers in Middle East.

IT adoption in Infrastructure industry has gathered pace. Highbar sees the business going places and will expand beyond India and Middle East.

This year the Company has developed a very strong strategic alliance with SAP who considers Highbar as a preferred partner for infrastructure industry. The Company launched new solutions - Highbar Rapid Start and Highbar Cloud Connect- which provide preconfigured SAP ERP solutions on-premise and on-cloud respectively. These solutions are based on the templates approach and are Intellectual Property (IP) assets for Highbar Technologies. Highbar Technologies has strategically entered into a tie-up with SAP to launch Highbar Cloud Connect, which offers 1st of its kind SAP ERP solution for infrastructure, real estate and ready mix concrete industry on pay-per-user-per-month basis. This has provided SMEs a level playing field by getting access to world-class IT solutions and industry best practices in an investment friendly model. The cloud based offerings have helped Highbar Technologies to penetrate the industry further to next level by reaching to the masses.

Highbar also successfully implemented first comprehensive SAP CRM implementation for Indian construction industry which won SAP ACE Award. Highbar continues to compete consistently with the big names in IT industry. It has created niche for itself in the market with a firmly established grounds. It has started contributing to the industry to grow 'IT for infrastructure market'.

Highbar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth.

Highbar Technologies is on the course towards accomplishing its vision of being 'the most preferred end to end IT solution provider' for infrastructure industry.

5. Subsidiary Companies

At the beginning of the year, the Company had 67 Subsidiary Companies.

During the year under review, the following changes have taken place.

a) HCC Infrastructure Co. Ltd (the wholly owned subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

Dhule Palesner Operations & 18.05.2011 Maintenance Limited

HCC Power Limited 03.06.2011

b) Steiner AG (a subsidiary Company) has promoted the following wholly owned subsidiary Company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

Steiner India Limited 17.08.2011

(c) Lavasa Corporation Limited (a subsidiary Company) has promoted the following companies making them subsidiaries of your Company from the day of their incorporation.

Name of the Company Date of Incorporation

Warasgaon Assets 24.06.2011 Maintenance Limited

Hill View Parking Services 24.06.2011 Limited

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India - Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report of the subsidiary companies for the year/period ended December 31, 2011/March 31, 2012 are not attached to the Balance Sheet of the Company as the Company has/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated April 27, 2012 consented for not attaching the balance sheet(s) of the concerned subsidiary(ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following formation in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b)reserves (c) total assets

(d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The annual accounts and other related detailed information of the following subsidiaries shall be made available to shareholders of the holding Company and subsidiary companies seeking such information at any point of time :

1. Hincon Techno consult Ltd

2. Western Securities Ltd

3. Pune-Paud Toll Road Company Ltd

4. Nirmal BOT Ltd

5. Panchkutir Developers Ltd

6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

7. HCC Infrastructure Company Ltd

8. HCC Aviation Ltd

9. Badarpur Faridabad Tollway Ltd

10. Baharampore - Farakka Highways Ltd

11. Farakka - Raiganj Highways Ltd

12. Raiganj - Dalkhola Highways Ltd

13. Dhule Palesner Operations & Maintenance Ltd

14. HCC Power Ltd

15. HCC Construction Ltd

16. Highbar Technologies Ltd

16. Highbar Technologies FZ LLC

17. HCC Mauritius Enterprises Ltd

18. Klemanor Investments Ltd

19. Steiner AG (Formerly known as Karl Steiner AG)

20. Steiner Promotions et Participations SA

21. VM ST AG

22. Eurohotel SA

23. Steiner (Germany) GmbH

24. Steiner Leman SAS

25. SNC Valleiry Route De Bloux

26. Steiner India Ltd

27. HCC Singapore Enterprises Pte. Ltd

28. HCC Real Estate Ltd

29. HRL Township Developers Ltd

30. HRL (Thane) Real Estate Ltd

31. Nashik Township Developers Ltd

32. Maan Township Developers Ltd

33. Charosa Wineries Ltd

34. Powai Real Estate Developers Ltd

35. HCC Realty Ltd

36. Lavasa Corporation Ltd

37. Lavasa Hotel Ltd

38. Apollo Lavasa Health Corporation Ltd

39. Lakeshore Watersports Company Ltd

40. Dasve Convention Centre Ltd

41. Dasve Business Hotel Ltd

42. Dasve Hospitality Institutes Ltd

44. Lakeview Clubs Ltd

45. Dasve Retail Ltd

46. Full Spectrum Adventure Ltd 47 Spotless Laundry Services Ltd

48. Lavasa Bamboocrafts Ltd

49. Green Hill Residences Ltd

50. My City Technology Ltd

51. Reasonable Housing Ltd

52. Future City Multiservices SEZ Ltd (Formerly known as Minfur Interior Technologies Ltd)

53. Rhapsody Commercial Space Ltd

54. Valley View Entertainment Ltd

55. Andromeda Hotels Ltd

56. Sirrah Palace Hotels Ltd 57 Warasgaon Tourism Ltd

58. Our Home Service Apartments Ltd

59. Warasgaon Power Supply Ltd

60. Sahyadri City Management Ltd

61. Hill City Service Apartments Ltd

62. Kart Racers Ltd

63. Warasgaon Infrastructure Providers Ltd

64. Nature Lovers Retail Ltd

65. Osprey Hospitality Ltd

66. Starlit Resort Ltd

67. Warasgaon Valley Hotels Ltd

68. Rosebay Hotels Ltd

69. Mugaon Luxury Hotels Ltd

70. Warasgaon Assets Maintenance Ltd

71. Hill View Parking Services Ltd

72. Whistling Thrush Facilities Services Ltd

(vi) Further, the annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder at the head office/registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any shareholder on demand;

(vii) The holding as well as subsidiary companies in question shall regularly file such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

6. Share Capital

Increase in Paid up Share Capital - Issue of Equity Shares on exercise of Employee Stock Options

During the year under review, upon exercise of Stock Options by the eligible employees under the Employee Stock Option Scheme, the Company has allotted 77,500 Equity Shares of Rs 1 each at an exercise price of Rs 21.70 per Equity Share.

Consequent to the allotment of Equity Shares upon exercise of stock options, the Paid up Share Capital of the Company has increased from 60,65,32,920 Equity Shares of Rs 1 each aggregating Rs 60,65,32,920 (Rupees Sixty Crore Sixty Five Lakhs Thirty Two Thousand Nine Hundred Twenty Only) to 60,66,10,420 Equity Shares of Rs 1 each aggregating Rs 60,66,10,420 (Rupees Sixty Crore Sixty Six Lakhs Ten Thousand Four Hundred Twenty Only).

7. Public Deposits and Loans/Advances

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

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

8 Employee Stock Option Scheme (ESOP)

As on March 31, 2012, 64,62,960 stock options are outstanding (comprising vested and unvested, after adjustment for lapsed and exercised options), in aggregate, for exercise as per the exercise schedule and are exercisable at a price of Rs 52.03 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs 1 each.

During the year under review, 15,46,950 options got vested to the employees of the Company and in aggregate, 48,64,730 options stands vested with the employees as on March 31, 2012. Further during the year, 77,500 options, were exercised by the optioned at an exercise price of Rs 21.70 and accordingly the Company has allotted 77,500 Equity Shares, in aggregate, of face value Rs 1 each to the respective employees.

The particulars with regard to the Employee Stock Options as on March 31, 2012 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9. Status of GDSs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2012, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Company's Auditors confirming compliance forms part of this Report.

12. Directors

In accordance with Article 135 and Article 186A of the Articles of Association, on October 21, 2011, the Board of Directors appointed Dr. Ila Patnaik as an Additional Director of the Company.

The Company has received a Notice under Section 257 of the Companies Act, 1956 from a member signifying his intention to propose Dr. Ila Pataki as a candidate for the office of Director at the forthcoming Annual General Meeting.

As per the provisions of the Companies Act, 1956 read with Article 152 of the Articles of Association of the Company, Prof. Fred Moavenzadeh, Mr. Rajas R. Doshi and Mr. D. M. Pop at are the Directors of the Company who retire by rotation and being eligible, offer themselves for re-appointment.

The Company has received Form DD-A from all these Directors as required under the Companies (Disqualification of Directors under Section 274 (1) (g) of the Companies Act, 1956) Rules, 2003.

A brief profile of all these Directors containi


Mar 31, 2011

The Directors are pleased to present the 85th Annual Report together with the Audited Accounts for the year ended March 31, 2011.

2. Financial Highlights

Particulars Year ended Year ended March 31, 2011 March 31, 2010 Rs. Crore Rs. Crore

Turnover 4143.97 3862.97

Profit before Interest, Depreciation and Tax 554.26 440.89

Less: Interest 289.90 205.15

Depreciation 152.69 442.59 113.90 319.05

Profit before Tax 111.67 121.84

Less: Provision for Current Tax 24.40 20.96

Provision for Deferred Tax 40.45 40.15

MAT Credit Entitlement (24.18) 40.67 (20.71) 40.40

Profit after Tax 71.00 81.44

Add: Balance brought forward from last year 319.62 279.90

Transferred from Debenture Redemption Reserve 4.16 5.41

Amount available for Appropriation 394.78 366.75

Less: Appropriations

Proposed Dividend 24.26 24.26

Tax on Proposed Dividend 3.94 4.12

Debenture Redemption Reserve 8.75 8.75

Transfer to General Reserve 10.00 46.95 10.00 47.13

Balance carried to Balance Sheet 347.83 319.62

3. Dividend

Your Directors are pleased to recommend a dividend of Rs. 0.40 per Equity Share of Rs. 1/- each for the financial year ended March 31, 2011 on the enhanced Share Capital of the Company (post Bonus Issue of Equity Shares in the ratio 1:1) aggregating to Rs. 24.26 crore thereby maintaining the dividend payout at the previous years level. (Previous year Rs. 0.80 per Equity Share of Rs. 1/- each).

Equity Shares that may be allotted by the Company before the Book Closure will rank pari passu with the existing Shares and be entitled to receive dividend.

4. Operations

The turnover of the Company at Rs. 4,143.97 crore has shown an increase of 7.27% as compared to Rs. 3,862.97 crore in the previous year. The profit before tax is ` 111.67 crore as compared to Rs. 121.84 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

- Rajasthan Atomic Power Project – Unit 7 & 8, 2 x 700 MW, Rajasthan Contract Value: Rs. 888 crore

- Mumbai Metro – Versova Andheri Ghatkopar Corridor Contract Value: Rs. 145 crore

- Sainj Hydro Electric Project, 100 MW, Himachal Pradesh Contract Value: Rs. 431 crore

- Aditya Aluminium project, Orissa Contract Value: Rs. 451 crore

- Single Line Tunnel No.12 between Jiribam and Tupul, Assam Contract Value: Rs. 313 crore

- Alaknanda HEP 3 x 100 MW, Uttarakhand Contract Value: Rs. 660 crore

- Kachchh Branch Canal, Gujarat Contract Value: Rs. 345 crore

- Muzaffarpur Thermal power plant, 2 x 195 MW, Bihar Contract Value: Rs. 232 crore

The total balance value of works on hand as on March 31, 2011 is Rs. 18,127 crore including Companys share in integrated joint venture projects and Sawalkot project.

Decisions are awaited from various clients for tenders submitted by the Company (directly or in JV) for 32 projects amounting to about Rs. 24,040 crore. Tenders for various packages for 31 projects worth about Rs. 27,710 crore are expected to be submitted in the near future. The Company has also submitted prequalification bids for 14 projects worth over Rs. 24,480 crore, which are currently under evaluation. The company is confident of securing a sizeable share of these new projects.

Operations of Subsidiaries

(i) Lavasa Corporation Ltd. - Integrated Urban Development & Management

a) Operations

Lavasa is a planned hill city being developed by Lavasa Corporation Ltd., a subsidiary company. Located in the Western region of India the city is an hours drive away from Pune and three hours drive from Mumbai. It is one fifth the size of Greater Mumbai Municipal limits.

The master plan of Lavasa is developed by internationally renowned design consultant HOK, USA. The master plan, recipient of many international awards, is based on the principles of New Urbanism that brings together all the components essential to daily life in a more organized manner. Lavasa has many pioneering initiatives to its credit - technology leadership, e-Governance, city developed using Geographical Information System (GIS), etc.

Lavasa is planned for a permanent population of around 3 lakh residents and a tourist inflow that is envisaged at 20 lakh per annum. It aims to provide a perfect work-life balance with an unique combination of technology and infrastructure advancements. The city will have a 365 day economy with a host of non polluting industries being the main economic driver; these include R&D and training centres, IT and biotech industry, KPOs and those related to art, fashion and animation.

On the hospitality front, the hospitality units which are already operational are: Lavasa International Convention Centre managed by ACCOR, Mercure Lavasa, Fortune Select Dasve, Ekaant – The Retreat, Dasvino Town and Country Club, Waterfront Shaw Serviced Apartments. Other than this, Radisson, ITC Luxury Collection, Choice Hotel, J.Vohra Hospitality, Novotel by Accor, Pullamn by Accor, Hilton, Ramada, Oakwood, Two Langham properties, Holiday Inn, Days Inn Hotel are already tied up and many more are to follow in quick succession giving Lavasa a new hotel property every 6 months.

An equal amount of progress has been made in the education space where the Ecole Hotelier Lavasa has commissioned its second batch & Christel House Lavasa is already operational. Le Mont by Educomp-an IB school is also starting their 1st batch from July 2011.

Other than this, Ryan International for performing arts, Birla Edutech by Yash Birla for an IB school, Gems International an IB school, Management Institute by Bodhi Education, Euro Kids with a primary and pre-primary school, The Institute of International Business Relations Germany, NSHM Knowledge Campus of Kolkata, Symbiosis of Pune and Christ University of Bangalore are also tied up for setting up their Campuses.

Professional and Executive Education has also taken off in Lavasa in a big way with Car Design Workshop by Chris Bangle (Scuola Politecnica di Design) the world renowned school of design and communication based in Milan, Security Awareness Workshop by Max Security (Israeli Security experts) and Massachusetts Institute of Technology who have conducted their pilot program based on Airport and Airline Systems, Planning and Management. This has prepared a platform for them to conduct similar programmes at Lavasa in the future.

On the retail front, American Diner, Granmas Bakery, Brewberrys Café ,Memories, Baskin & Robbins Kiosk, Tabakh, Oriental Octopus, Amul Dairy, Chor Bizarre , Subway, Hungry hippo, Krazy Koala Kiosk, Twisted Turkey Kiosk, Fruity bat, Pizzavala, Natural Ice Cream, Bizarre Baracuda, Design & Build Store – Home Town are already operational.

On the tourism front, X-Thrill adventure academy, Water Sports, Noes park (games Arcade), Nature trail, Train on wheels, Kids play Area, movies, parks & gardens are already operational. Other than this, Space theme park (edutainment), MGM Hollywood based theme park, Tennis Australia, Manchester City Football Club are also already tied up.

Events continued to be a key focal point and the year saw a multitude of events that increased the salience of the brand and helped engage with the consumer on-ground. These included Rock and Hills music festival, Wildlife Week celebrations, Lavasa Utsav, Literature Live, Lavasa Mifta Awards, Lavasa Womens Car Drive, and sponsorship of Pantaloons Femina Miss India along with events like the New Year celebrations and Italian food festival. The 3rd Lavasa Womens Car Drive was held for the first time both from

Mumbai and Pune. Over 750,000 women from 78 odd countries voted for the 2011 participants making it Indias largest Womens Car Drive which found a place in Limca book of records as well.

Lavasa has collaborated with technology leaders like Wipro Limited and Cisco Systems to plan, implement and manage Information and Communication Technology (ICT) services across Lavasa Hill City. The strategic partnership is intended to focus on providing integrated and effective solutions for enhancing technology leadership within the hill city. The Company founded as a result of this venture is named as My City Technology Limited. This venture is currently deploying a futuristic telecom network infrastructure to offer its residents and visitors a life changing technology experience.

Lavasa now has a new post office, police station, a public safety centre, a hospital managed by Apollo, banks (Union bank of India, State bank of India), a petrol station, pharmacy, STP, WTP, rental housing, an arcade and transit system. In the months ahead it will open grocery and additional retail shops. The citys drinking water is fit for consumption straight from the tap without the need for filtration; its sewerage is treated to almost drinking water standards before being reused for irrigation and other non-potable purposes; its power distribution grid is nearly 99% reliable and the young city is already on the cutting edge of urban environmental sustainability initiatives. The Company plans to have its e-Governance portal and a citizen call centre to maintain its focus on the needs of residents and visitors, and it has already opened parks and play areas to the public.

Lavasa continued its focus on branding and communication activities through 2010-11.

A thought leadership platform – Lavasa Future Cities was launched in association with the Times of India group. The key objective was to trigger a thought process amongst public as well as key decision makers on the need for new urban centres for the rapidly growing urban Indian population. A television series Urban Longings was aired to highlight the need for planned new cities. The 6 episode TV series had eminent personalities like Mr. Narayan Murthy, Dr. Abad Ahmed, Ms. Kiran Bedi, Mr. Arun Shourie, sharing their vision for building, managing and governing future cities. The article series by the same name Urban Longings was published in Times of India & Maharashtra Times and had prominent personalities like Dr. APJ Abdul Kalam, and 13 others, echoing their idea of a future

city. In the quest for making Indian cities more liveable and creating better future cities, a City Planning and Governance Summit was also organized.

During the year, Lavasa Corporation Ltd. has registered an impressive performance with a turnover of Rs. 540.96 crores as compared to Rs. 481.56 crores in the previous year. The profit before tax is at Rs. 163.39 crores as compared to Rs. 209.46 crores in the previous year.

b) Status on Ministry of Environment and Forests Issue

On November 25, 2010, Ministry of Environment & Forests ("MoEF"), Government of India issued show cause notice under Section 5 of the Environment Protection Act, 1986 to Lavasa Corporation Limited ("LCL") alleging violations of the Environmental Impact Assessment notifications of 1994 as amended in 2004 and superseded in 2006 ("EIA Notifications"). The said notice directed LCL to show cause within 15 days of the receipt of the said notice as to why the alleged unauthorized structures at Lavasa site be not removed in entirety and pending the decision on show cause notice by MoEF, it directed LCL to maintain status-quo ante for construction and/or development.

Upon receipt of the said show cause notice, LCL immediately replied to MoEF in respect of the said show cause notice and then filed a Writ Petition against the impugned show cause notice in the Bombay High Court seeking prayer, inter alia, quashing of the said show cause notice, stay on status quo pending the decision on the Writ Petition. The Honble High Court vide its order dated December 7, 2010 has admitted the Writ Petition filed by LCL. The Counsel for MoEF made a statement that the words "status quo ante" in the MoEFs show cause notice dated November 25, 2010 may be read as "status quo", as the word "ante" is a mistake. The Honble Court also directed MoEF to give hearing to LCL. Further, vide its order dated December 22, 2010, the Honble Court while issuing the Rule directed MoEF to give hearing to LCL and also directed MoEF and Central and/or State level Environment Impact Assessment Authority to visit LCLs project at Lavasa and inspect it thoroughly for at least three days to undertake the survey / inspection and pass an order by January 10, 2011. In the same order dated December 22, 2010, the Honble High Court has clubbed together 4 public interest litigations filed against LCL (other PILs) inter alia in respect of lease of land by Maharashtra Krishna Valley Development Corporation to LCL,

alleged violations by LCL of the Maharashtra Agricultural (Ceiling on Holdings) Act, 1961 and the Environment Protection Act, 1986.

The members of MoEF committee along with officials of Government of Maharashtra visited Lavasa site on 5th, 6th and 7th of January, 2011.

Vide its order dated January 1 7, 2011, MoEF has observed that LCL is in violation of EIA Notifications and the construction activity undertaken thereon is unauthorized, in violation of the above notifications and is environmentally damaging. However, taking into account the submissions made by LCL, employment generated, investments already made and third party rights already accrued, MoEF stated that it is prepared to consider the project on merits with various terms and conditions including (i) payment of substantial penalty (ii) creation of Environmental Restoration Fund (ERF) by LCL and (iii) imposition of stringent terms and conditions to ensure no further environmental degradation takes place and degradation that has occurred would be rectified within a time bound schedule. Further, under the said order, the MoEF had directed LCL that in view of the alleged violations of EIA Notifications and the unauthorized construction activity undertaken and the occurrence of environment degradation, the order of status quo be continued and reiterated that no construction activity be undertaken.

On January 24, 2011, LCL filed another Writ Petition being No. 811 of 2011 in Bombay High Court challenging the aforesaid impugned order dated January 1 7, 2011 passed by MoEF.

Thereafter, on January 25, 2011, LCL addressed a letter to MoEF for finding an amicable solution and offered without prejudice suggestions for MoEFs consideration, in a bid to set to rest the controversy surrounding the Project.

On January 2 7, 2011, Writ Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 along with other PILs were listed in Honble High Court. However, the Honble High Court, upon LCLs plea was pleased to adjourn the matters for 45 days in view of the ongoing discussions with MoEF on amicable settlement and posted all LCL connected matters on March 10, 2011.

MoEF vide its letter dated January 28, 2011, in response to LCLs letter dated January 25, 2011, had informed that MoEF is prepared to consider the matter of giving environmental clearance to Phase I. (2000 Ha). Thereafter, pursuant to discussions, LCL by a "without prejudice"

application to MoEF complied with the directions issued by MoEF in its order dated January 1 7, 2011, and LCL submitted various documents to MoEF, from time to time, for its consideration.

LCL has also attended & presented at the 97th, 98th and 99th meeting of the Expert Appraisal Committee (EAC) on CRZ, Infrastructure & Miscellaneous Projects and New Construction and Industrial Estates Projects scheduled on 14th & 15th February, 2011, 3rd & 4th March, 2011 and 5th & 6th April, 2011 respectively at New Delhi and LCL submitted various supporting documents and has also made oral representation.

On March 10, 2011 Writ Petitions of LCL along with other PILs were listed before Honble High Court, however, MoEF sought time to file its affidavit-in-reply and therefore all the connected matters were adjourned to March 25, 2011.

On March 17, 2011, the MoEF uploaded the minutes of the 98th meeting of EAC held on 3rd & 4th March, 2011 at New Delhi. The Salient aspects of the minutes is that, the EAC recommends that in view of the investments made by the third parties, infrastructure already created in the Dasve village and taking note of the reported hardships highlighted repeatedly by LCL of the construction workers, pending construction work of 257 residential buildings, which are above plinth level, may be allowed subject to the certain conditions such as (i) no hill cutting, digging, excavation, etc, (ii) the above constructions shall only be limited to the area for which permission was granted by the Collector, Pune, (iii) a high level Verification and Monitoring Committee shall be constituted, (iv) commitment from LCL to earmark necessary / adequate funds as per report to be submitted shortly regarding the quantum of penalty/ re- compense and creation of Environmental Restoration Fund and (v) other conditions as stipulated by MoEF / other State agencies of State Government shall also be complied with.

In view of the above stipulations, the Committee recommended to MoEF to permit LCL to complete 257 units subject to the acceptance of the five conditions listed above and also subject to submission of information / documents as per the above observations.

Further EAC also stated that consideration of the proposal would depend on submission of the requisite information as detailed above.

On March 25, 2011, MoEF filed affidavit in reply to LCLs Writ Petition no. 811 of 2011, by which

LCL had challenged the aforesaid impugned order dated January 1 7, 2011 passed by MoEF.

On March 2 7, 2011, LCL responded to queries in detail raised by EAC in its minutes of the 98th EAC meeting held on 3rd & 4th March, 2011 at New Delhi. Also on March 29, 2011, LCL issued 2 letters to MoEF (i) clarifying the validity of the Special Planning Authority status granted to LCL and the development of land leased from MKVDC and (ii) requesting the MoEF to consider the Lavasa project in the next EAC meeting to be held on 5th & 6th April 2011.

On March 30, 2011, LCL filed an application to withdraw the Writ Petition no. 811 of 2011 and Writ Petition no. 9448 of 2010 with a liberty to file a fresh one as and when need arises. It was brought to the notice of the Honble High Court by LCLs counsel and also by MoEFs counsel that on the recommendation of EAC, MoEF is inclined to permit LCL to carry out construction work of 257 residential units subject to conditions laid down by EAC. On hearing all the parties including PIL litigants, the Honble High Court suggested that in order to take care of the apprehensions of the PIL litigants, LCLs counsel and MoEF counsel should make a statement that status quo order dated January 1 7, 2011 passed by MoEF should continue to operate till show cause notice is decided by MoEF. LCL was of the view that its writ petitions should not be withdrawn with such an adverse order and hence decided not to withdraw its writ petitions, which are now adjourned to June 15, 2011. In the circumstances MoEF is free to appraise the Environment Clearance application of LCL.

On April 6, 2011 the Senior Officials of LCL along with the expert advising LCL in the matter attended the 99th meeting of EAC and made presentation before members of EAC and replied to the queries raised by the EAC in relation to the vacation of status quo on the construction work in area admeasuring 681.27 Ha, pending consideration of its 1st phase Environment Clearance of 2000 Ha. The Minutes of the EAC are awaited.

(ii) HCC Real Estate Ltd.

HCC Real Estate Ltd (HREL), a wholly owned subsidiary of your Company, has inherent skills and resources to develop and deliver high-value real-estate projects that helps in building sustained communities across India. The focus is to develop state-of-the-art projects which would provide world class quality, engineering and technology and create a unique value proposition for the customers.

247 Park

During the year under review, Vikhroli Corporate Park, a Partnership Firm was converted into a private limited company under the name Vikhroli Corporate Park Pvt. Ltd. (VCPPL).

247 Park, building owned by VCPPL, is a new age destination and Indias largest stand-alone LEED Gold certified green building with a built- up area of 1.8 million square feet and leasable area of 1.1. million square feet, strategically located at the heart of the business corridor at Vikhroli(West) in Mumbai.

During July 2010, VCPPL issued further shares to IL&FS Milestone Fund and thereby HREL and your Companys share holding in VCPPL got diluted to 20.8% and 5.2% respectively which, in aggregate, constitutes 26% stake of the HCC group, in VCPPL. Thus, VCPPL has ceased to be subsidiary of your Company.

Following are the key awards, recognitions and accomplishments of 247 Park during the year:

- The world-class safety standards of 247 Park were recognized at Asias largest exhibition on Architecture, Design and Construction.

- Was awarded Excellence in Commercial Segment in the Safety Norms category by The Economic Times ACETECH.

- Has been selected as a chosen participant for the Royal Institute of Chartered Surveyors (RICS) – Vestian study titled Sustainable IT Workplaces of India and an Occupiers Preference and Satisfaction Survey is underway.

During the year, 247 Park has achieved more than 90% occupancy and positive cash flows are expected from the forthcoming year.

247 Business Park

HREL has also executed an agreement with Lavasa Corporation Limited for purchase of retail area at Lavasa, to be christened as "247 Business Park".

Charosa Wineries Ltd.

During this year, HRELs wholly owned subsidiary, Charosa Wineries Limited, has achieved a milestone towards its objective of setting up a world-class vineyard and ultra-modern winery by commissioning the winery at Nashik in March 2011. The wine grapes are produced at the own vineyard for captive use and further produce is selectively purchased from farmers.

Dholera City Project

The work in respect of the Memorandum of Understanding (MoU) executed by your Company with the Government of Gujarat for the development of a proposed Water Front City at Dholera Special Investment Region (SIR) near Ahmedabad, Gujarat, in the influence area of the Delhi-Mumbai Industrial Corridor (DMIC) project is progressing satisfactorily. The Government of Gujarat has released the master plan and draft development plan for this project and the Company has surveyed the proposed earmarked site and suggested certain changes. The Company has also submitted its Concept Development Report to the Government of Gujarat.

Dholera Renewable Energy Park Project

During this year, your Company has signed a Memorandum of Understanding (MoU) with the Government of Gujarat for developing a renewable energy park at its proposed Water Front City at Dholera Special Investment Region in Ahmedabad district. This is the maiden venture of the company into the renewable energy space with an estimated investment of Rs. 12,000 Crore. The MoU was signed at the Vibrant Gujarat Summit in Gandhinagar held in January 2011. It is proposed to set up the renewable energy park on approximately 600 acres within the land parcel offered for the proposed water-front city at Dholera. The Rs. 12,000 crore investment towards the development of renewable energy park is over and above the Rs. 40,000 crore already committed towards the proposed water front city development in Dholera.

Urban Development and Management Projects

HREL has been short listed for the development of an Integrated Township within the proposed Petroleum, Chemical and Petrochemical Investment Region (PCPIR) near Bharuch, Gujarat spread over 600 acres of land.

Other Projects

HREL has also been selected by Bangalore Metropolitan Regional Development Authority (BMRDA) for the development of a township at Bidadi near Bangalore which would be spread over 9000 acres of land.

(iii) HCC Infrastructure

HCC Infrastructure Company Ltd, a wholly owned subsidiary of your Company, is shaping into a leading infrastructure developer engaged in the creation and management of assets in the areas

of Transportation, Energy and Urban Infrastructure.

The Company remains committed to developing a premium portfolio of assets that will serve Indias needs for sustainable infrastructure development, while creating shareholder value for the Company by generating stable, diversified and growing cash flow streams over the long term.

The Company has submitted bids for City Gas Distribution concessions in Ludhiana and Jalandhar and is evaluating opportunities in Power & Water projects.

The Company shall act as an umbrella company under which all infrastructure projects are proposed to be undertaken. HCC Concessions Ltd, which is the holding company for Road SPVs, and future Transport concessions, is being realigned as a subsidiary of HCC Infrastructure Company Ltd.

Road Infrastructure projects:

Since its inception in 2007-08, HCC Concessions Ltd has grown its development portfolio to Rs. 5,539 crore.

During the course of the year, the Company successfully achieved the following:

- Started commercial operations for the Delhi Faridabad Elevated Expressway (dfsk ywayTM)

- Financial closure and commencement of construction of its West Bengal Project (NH- 34)

During the year, the Company submitted two NHAI bids and 29 Request for Qualification (RFQs). The equity holding in various road concession Special Purpose Vehicles was consolidated into a single holding company, HCC Concessions Ltd. Nirmal BOT Ltd and Badarpur Faridabad Tollway Ltd have since become subsidiaries of HCC Concessions Ltd.

A slowdown in the award of infrastructure projects, an inflationary environment and highly aggressive bidding witnessed during the past year has caused the Company to adopt a cautious and disciplined strategy in expanding its portfolio.

The assets under management include six National Highways Authority of India (NHAI) road concessions, of which two are operational.

Status of Operational Assets:

Delhi Faridabad Elevated Expressway (NH-2) (dfskyway™ )

The Delhi Faridabad Elevated Expressway (dfskyway™ ) is a 4.4 km elevated highway connecting Delhi and Haryana at Badarpur. This engineering marvel has been developed by HCC Concessions Ltd with an investment of Rs. 572 crore. The Company was awarded a 20 year concession in 2008 to develop, construct and operate this asset by NHAI. The elevated expressway was operational significantly ahead of schedule and was inaugurated by the Chief Ministers of both Delhi and Haryana in November 2010.

Your Directors are pleased to inform that your Company has been awarded with the prestigious CNBC TV18 Infrastructure Excellence Award 2011 in the Main Awards Category - Highways & Flyovers, and the Achievement Award for Best Project in the Roads category by the Board of Governors of the Construction Industry Development Council (CIDC).

Nirmal (NBL) Annuity (NH-7)

The road from Kadtal to Armur is part of the project involving four-laning of the road section from Maharashtra - Andhra Pradesh Border to Armur in Andhra Pradesh, which forms a part of the Nagpur - Hyderabad section of NH-7. The concession period for the project is 20 years, including a construction period of 24 months. The project was developed with an investment of Rs. 315 crore and became operational in July 2009, over 3 months ahead of the scheduled completion date.

Status of Assets under Development:

Dhule Palesner (DPTL) Highway Project (NH-3)

The project road is a part of NH-3, commonly referred to as the Agra–Mumbai road, originating from Agra and ending at Mumbai in Maharashtra. It is a primary conduit for transportation of passengers and freight traffic between the state of Uttar Pradesh and major towns in the states of Madhya Pradesh and Maharashtra. The concession period is 18 years, including a construction period of 30 months. The project has already achieved 55% completion by March 2011 and is expected to be operational later this year, over 6 months ahead of schedule. The highway is being developed in partnership with an investment of Rs. 1,420 crore with HCC Concessions Ltd as the lead partner along with

Sadbhav Engineering Ltd and John Laing Investments Ltd (UK).

West Bengal (NH-34) Highway Project

This development is the largest PPP highway project in West Bengal (WB) and is the major north-south artery (NH-34) in the State, besides providing connectivity to the North Eastern States and neighbouring countries. It originates at the capital and port city of Kolkata, and ends at Dalkhola in the state of WB, covering a total distance of 443.5 km. The concession lengths for the different segments totalling 256 km range from 25 to 30 years, including a construction period of 30 months and an investment of over Rs. 3,231 crore. The highway development, divided into three contiguous sections, covers Baharampore and Farakka (103 km), Farakka and Raiganj (103 km) and Raiganj and Dalkhola (50 km). In October 2010, the Union Finance Minister, Mr. Pranab Mukherjee, laid the foundation stone for this 256 km development.

(iv) Karl Steiner AG, Switzerland

In May 2010, your Company made its first international acquisition by acquiring a controlling equity stake (66% equity stake) in Karl Steiner AG, Switzerland (KSAG), the second largest total services contractor in the Swiss Real Estate market. Your Company acquired the controlling stake in KSAG through its wholly owned subsidiary, HCC Mauritius Enterprises Ltd, by subscribing to the newly issued shares of KSAG for a CHF 35 million cash investment. The said funds are proposed to be primarily used to grow KSAGs Swiss core operations.

KSAG is a leading general contracting company in Switzerland, specialized in turnkey development of new buildings and refurbishments, and offers services in all facets of real estate development and construction. KSAG was founded in 1915 and during its rich history, KSAG has constructed over 1,200 residential projects, 540 office buildings, 45 hotels and 150 social infrastructure buildings, which include universities, schools, hospitals, prisons and nursing homes. Among KSAGs many clients are Nestlé, Helvetia, Merck-Serono, Sanofi - Pasteur and the World Economic Forum. KSAG has also built laboratories for companies like IBM and the Federal Institute of Technology. In Zurich, KSAG has constructed/renovated the Park Hyatt, Radisson Blu, and The Savoy hotels. Other significant accomplishments include Sihlcity (a CHF 500 million integrated development including a hotel, shopping centre, offices and a

residential complex), Terminal A of the Zurich Airport, portions of the Geneva airport, the Swiss Re Convention Centre and the home of Google Europe. In the past ten years, KSAG has completed nearly CHF 10 billion worth of real estate construction, which translates to approximately 32 million square feet of development.

The board of directors of KSAG comprises five members. Your Company is represented by three nominees viz., Mr. Ajit Gulabchand, who also acts as Chairman of KSAG, Mr. K. G. Tendulkar and Mr. Anil Singhvi.

As per the acquisition agreement signed with KSAG, in 2014, KSAGs sole minority shareholder, Mr. Peter Steiner, will sell his remaining shares to your Company at a pre-agreed price based on KSAGs earnings achieved between 2010 and 2013.

The acquisition of KSAG is expected to help your Company to extend its footprint in Indias growing residential and commercial construction market. This deal is poised to bring in sharing of rich experiences of KSAG in construction of world class integrated buildings, ability to foray into state-of-the art residential and commercial spaces on a turnkey basis and integrated building construction market in India, act as a single source provider for total solutions for any facility, capability for implementation of new technologies to support sustainable and green developments and access to globally benchmarked construction processes.

Besides, this will also serve to further augment EPC offerings in India and other markets and provides your Company with a presence for European expansion. It also opens the Swiss and European market to HCCs Engineering and Construction (E&C) business and will enable to procure greater access to world class cutting edge European technologies and EPC capability.

Pursuant to the consolidated IGAAP financial statement of KSAG, the revenue of KSAG amounted to Rs. 2,719.85 crore and the profit before tax was Rs. 10.31 crore in the period from May 5, 2010 (date of acquisition of KSAG) to March 31, 2011 (11 months).

At year end, the order backlog of KSAG amounted to CHF 1,018 million. In addition, KSAG has been awarded 6 contracts with a value of CHF 410 million, for which contracts are yet to be signed. These contracts are expected to be signed during the financial year 2011-12.

(v) Highbar Technologies Ltd

Highbar Technologies Ltd, a wholly owned subsidiary of your Company, is an Information Technology company formed by your Company, with the vision of providing end-to-end IT solutions to Infrastructure industry which started its independent operations on April 1, 2010.

Highbar Technologies core team comprises of IT and Infrastructure professionals who have amalgamated the legacy of domain knowledge in the infrastructure business with Information technology. Highbar focuses on IT implementation initiatives from business transformation perspective rather than technology implementation perspective.

Infrastructure industry experts have recognised Highbar Technologies as Asias 1st IT Company for Infrastructure industry and have shown faith in its capabilities as against big established IT players.

In the last financial year Highbar Technologies was able to serve 17 new customers, taking the total tally of its customers to 43. Most of Highbar Technologies customers are reference customers who have provided repeat business to Highbar Technologies, which is also an indication of the maturity of Highbars delivery capabilities.

In order to serve Infrastructure industry in Middle East more effectively, Highbar Technologies Ltd, has incorporated a subsidiary in Dubai, named Highbar Technologies FZ-LLC. Highbar has also bagged its 1st customer in Middle East.

The Company has also developed strategic alliance with SAP as Service Partner. Gartner, the worlds leading IT research and advisory company, recognises Highbar as vendors to watch in Indian ERP space and attributes its rapid growth to domain capability and knowledge.

The Indian infrastructure sector is poised to have an exponential growth in the near future. With the rapid adoption of IT by the Infrastructure industry, there will be significant opportunity for IT business from the Indian infrastructure sector. Besides, there is a sizeable market in Middle- East, Far East and European countries. Highbar Technologies with its niche focus on Infrastructure industry is optimistic about its business potential over coming years.

Highbar Technologies has established a proper scalable organization structure with all the functions in place to facilitate and sustain future growth. It will be able to service Infrastructure

industry in many more ways through addition of new IT services over a short to medium period. This is a step towards infrastructure industry choosing Highbar Technologies as the most preferred IT solution provider for providing end- to-end IT solutions for Roads, Ports, Real-Estate, Airports, Railways, Energy, Irrigation & Water supply, Urban infrastructure and Industrial infrastructure (telecom, mining etc.). It is expected to strive and grow through a judicious mix of internal competency development and strategic alliances with IT industry partners.

5. Subsidiary Companies

At the beginning of the year, the Company had 53 Subsidiary Companies.

During the year under review, the following changes have taken place.

a) Your Company has promoted the following wholly owned subsidiary company for promoting Companys Infrastructure Projects.

Name of the Company Date of Incorporation

HCC Infrastructure Company Ltd 13.12.2010

b) Highbar Technologies Limited (the wholly owned subsidiary company) has promoted the following wholly owned subsidiary company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation Highbar Technologies FZ LLC 20.09.2010

(c) Lavasa Corporation Limited (a subsidiary company) has promoted the following companies making them subsidiaries of your Company from the day of their incorporation.

Name of the Company Date of Incorporation

Kart Racers Limited 01.04.2010

Warasgaon Infrastructure Providers Limited 05.04.2010

Nature Lovers Retail Limited 30.04.2010

Osprey Hospitality Limited 15.11.2010

Starlit Resort Limited 16.11.2010

Warasgaon Valley Hotels Limited 16.11.2010

Rosebay Hotels Limited 24.11.2010

Mugaon Luxury Hotels Limited 29.11.2010

d) During the year under review i.e. on April 19, 2010, HCC Mauritius Enterprises Ltd, a wholly owned subsidiary of your Company has acquired 100% equity stake in Klemanor Investments Limited, a Company incorporated in Cyprus, making it a subsidiary of your Company from the date of the acquisition of the said stake.

e) During the year under review i.e. on May 5, 2010, the Company through HCC Mauritius Enterprises Ltd, wholly owned subsidiary of the Company had acquired a controlling equity stake of 66% in Karl Steiner AG, a company incorporated in Switzerland, thereby making it a subsidiary of the Company.

Further, there are 6 subsidiary companies of Karl Steiner AG, which are as follows:-

1. Steiner Promotions et Participations SA

2. Steiner (Germany) GmbH

3. VM + ST AG

4. Steiner Leman SAS

5. SNC Valleiry Route De Bloux

6. Eurohotel SA

By virtue of acquisition of equity stake in Karl Steiner AG (Holding Company of these six subsidiaries), these six Companies have also become subsidiary Companies of your Company.

f) The following companies have ceased to be subsidiaries of the Company during the FY 2010-11 as per details provided below:

1. Ecomotel Hotel Limited w.e.f. September 2, 2010

2. Knowledge Vistas Limited (Formerly known as GDST-Oxford International School Ltd) w.e.f. April 23, 2010

3. Warasgaon Lake View Hotels Limited (Formerly known as Lavasa Star Hotel Ltd) w.e.f. December 31, 2010

4. Verzon Hospitality Limited w.e.f. December 31, 2010

In terms of the General Circular No. 2/2011 dated February 8, 2011 read together with General Circular No. 3/2011 dated February 21, 2011, issued by the Government of India – Ministry of Corporate Affairs under Section 212(8) of the Companies Act, 1956, granting general exemption to companies from attaching financial statements of subsidiaries, subject to fulfillment of conditions stated in the circular, copies of the Balance Sheet, Profit and Loss Account, Report of the Board of Directors and Auditors Report

of the subsidiary companies for the year/period ended December 31, 2010/March 31, 2011 are not attached to the Balance Sheet of the Company as the Company has/shall fulfill the following conditions:

(i) The Board of Directors of the Company has vide resolution dated April 29, 2011 consented for not attaching the balance sheet(s) of the concerned subsidiary(ies);

(ii) The Company has presented in its Annual Report, the consolidated financial statements of holding Company and all of its subsidiaries duly audited by its statutory auditors;

(iii) The Consolidated financial statement has been prepared in strict compliance with applicable Accounting Standards and where applicable, Listing Agreement as prescribed by the Securities and Exchange Board of India;

(iv) The Company has disclosed in the consolidated balance sheet the following information in aggregate for each subsidiary including subsidiaries of subsidiaries:- (a) Capital (b) reserves (c) total assets (d) total liabilities (e) details of investment (except in case of investment in subsidiaries) (f) turnover (g) profit before taxation (h) provision for taxation (i) profit after taxation (j) proposed dividend, as applicable;

(v) The annual accounts and other related detailed information of the following subsidiaries shall be made available to shareholders of the holding company and subsidiary companies seeking such information at any point of time :

1. Hincon Technoconsult Ltd

2. Western Securities Ltd

3. Pune-Paud Toll Road Company Ltd

4. Nirmal BOT Ltd

5. Panchkutir Developers Ltd

6. HCC Concessions Ltd (Formerly known as HCC Infrastructure Ltd)

7. HCC Infrastructure Company Ltd

8. HCC Aviation Ltd

9. Badarpur Faridabad Tollway Ltd

10. Baharampore – Farakka Highways Ltd

11. Farakka – Raiganj Highways Ltd

12. Raiganj – Dalkhola Highways Ltd

13. HCC Construction Ltd

14. Highbar Technologies Ltd

15. Highbar Technologies FZ LLC

16. HCC Mauritius Enterprises Ltd

17. Klemanor Investments Ltd

18. Karl Steiner AG

19. Steiner Promotions et Participations SA

20. VM + ST AG

21. Eurohotel SA

22. Steiner (Germany) GmbH

23. Steiner Leman SAS

24. SNC Valleiry Route De Bloux

25. HCC Singapore Enterprises Pte. Ltd

26. HCC Real Estate Ltd

27. HRL Township Developers Ltd

28. HRL (Thane) Real Estate Ltd

29. Nashik Township Developers Ltd

30. Maan Township Developers Ltd

31. Charosa Wineries Ltd

32. Powai Real Estate Developers Ltd

33. HCC Realty Ltd

34. Lavasa Corporation Ltd

35. Lavasa Hotel Ltd

36. Apollo Lavasa Health Corporation Ltd

37. Lakeshore Watersports Company Ltd

38. Dasve Convention Centre Ltd

39. Dasve Business Hotel Ltd

40. Dasve Hospitality Institutes Ltd

41. Lakeview Clubs Ltd

42. Dasve Retail Ltd

43. Full Spectrum Adventure Ltd

44. Spotless Laundry Services Ltd

45. Lavasa Bamboocrafts Ltd

46. Green Hill Residences Ltd

47. My City Technology Ltd

48. Reasonable Housing Ltd

49. Future City Multiservices SEZ Ltd (Formerly known as Minfur Interior Technologies Ltd)

50. Rhapsody Commercial Space Ltd

51. Valley View Entertainment Ltd

52. Andromeda Hotels Ltd

53. Sirrah Palace Hotels Ltd

54. Whistling Thrush Facilities Services Ltd

55. Warasgaon Tourism Ltd

56. Our Home Service Apartments Ltd

57. Warasgaon Power Supply Ltd

58. Sahyadri City Management Ltd

59. Hill City Service Apartments Ltd

60. Kart Racers Ltd

61. Warasgaon Infrastructure Providers Ltd

62. Nature Lovers Retail Ltd

63. Osprey Hospitality Ltd

64. Starlit Resort Ltd

65. Warasgaon Valley Hotels Ltd

66. Rosebay Hotels Ltd

67. Mugaon Luxury Hotels Ltd

(vi) Further, the annual accounts of the subsidiary companies shall also be kept for inspection by any shareholder at the head office/registered office of the Company and of the subsidiary companies concerned and the Company shall furnish a hard copy of the details of accounts of subsidiaries to any shareholder on demand;

(vii) The holding as well as subsidiary companies in question shall regularly file such data to the various regulatory and Government authorities as may be required by them;

(viii) The Company has given Indian rupee equivalent of the figures given in foreign currency appearing in the accounts of the subsidiary companies along with the exchange rate as on closing day of the financial year;

As a measure of Corporate Governance, a Statement pursuant to Sections 212(3) and 212(5) of the Companies Act, 1956 containing the details of subsidiaries of the Company, forms part of the Annual Accounts of the Company.

6. Share Capital

I) Increase in Authorised Share Capital

During the year under review, the Authorised Share Capital of the Company was increased from Rs. 50,00,00,000 (Rupees Fifty Crores Only) to Rs. 100,00,00,000 (Rupees One Hundred Crore Only) divided into 90,00,00,000 Equity Shares of Rs. 1/- (Rupee One only) each and 1,00,00,000 Redeemable Preference Shares of Rs. 10/- (Rupees Ten Only) each.

II) Increase in Paid up Share Capital

a) Issue of Bonus Equity Shares

In accordance with Article 201 of the Articles of Association of the Company and pursuant to the resolution passed by the Board of Directors of the Company at its Meeting held on July 30, 2010, your Company has on August 12, 2010 issued and allotted 30,32,56,460 Equity Shares of Rs. 1/- each as fully paid Bonus Shares in the ratio of one fully paid-up equity share of Rs. 1/- each for every existing one fully-paid equity share of Rs. 1/- each of the Company held by the Shareholders as on the Record Date i.e. August 11, 2010, by capitalization of a sum of Rs. 30,32,56,460/- from the Companys Securities Premium Account.

b) Issue of Equity Shares on exercise of Employee Stock Options

During the year under review, upon exercise of Stock Options by the eligible employees under the Employee Stock Option Scheme, the Company has allotted 6,860 Equity Shares of Rs. 1/- each at an exercise price of Rs. 104.05 per Equity Share (prior to adjustment for Bonus Issue) and 20,000 Equity Shares of Rs. 1/- each at an exercise price of Rs. 52.03 per Equity Share (post adjustment for Bonus Issue).

Consequent to the allotment of Bonus Equity Shares and Equity Shares upon exercise of stock options, the Paid up Share Capital of the Company has increased from 30,32,49,600 Equity Shares of Rs. 1/- each aggregating Rs. 30,32,49,600/- (Rupees Thirty Crore Thirty Two Lakhs Forty Nine Thousand Six Hundred Only) to 60,65,32,920 Equity Shares of Rs. 1/- each aggregating Rs. 60,65,32,920/- (Rupees Sixty Crore Sixty Five Lakhs Thirty Two Thousand Nine Hundred Twenty Only).

7. Public Deposits and Loans/Advances

Your Company has not accepted any deposits from the public, or its employees and, as such, the question of repayment of any amount of principal or interest does not arise.

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

8. Employee Stock Option Scheme (ESOP)

Consequent to the Companys Bonus Issue in the ratio of 1:1 in August 2010, the number of employee stock options in-force got doubled and the exercise price was halved and as a result as on March 31, 2011, 70,97,500 stock options are outstanding (comprising vested and unvested after adjustment

for lapsed and exercised options), in aggregate, for exercise as per the exercise schedule, of which 67,10,000 stock options are exercisable at a price of Rs. 52.03 per stock option and 3,87,500 stock options are exercisable at a price of Rs. 21.70 per stock option.

Each option, when exercised, as per the exercise schedule, would entitle the holder to subscribe for one equity share of the Company of face value Rs. 1/- each.

During the year under review, 9,26,760 options got vested to the employees of the Company and in aggregate, 33,17,780 options stands vested with the employees as on March 31, 2011.

Further during the year, 26,860 options, in aggregate, were exercised by the eligible employees of which 6,860 options were exercised at an exercise price of Rs. 104.05 (prior to adjustment for Bonus Issue of Equity Shares) and 20,000 options were exercised at an exercise price of Rs. 52.03 (post adjustment for Bonus Issue of Equity Shares) and accordingly the Company has allotted 26,860 Equity Shares, in aggregate, of face value Rs. 1/- each to the respective shareholders.

The particulars with regard to the Employee Stock Options as on March 31, 2011 as required to be disclosed pursuant to the provisions of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended, are set out in Annexure I to this Report.

9.a)Status of GDSs /FCCBs

During the financial year 2005-06, the Company had issued Global Depository Shares (GDSs) and the underlying shares against each of the GDSs were issued in the name of the Depository, Citi Bank N.A.

As on March 31, 2011, 1,20,720 GDSs have remained outstanding which forms part of the existing paid up capital of the Company.

b) Redemption of FCCBs on maturity

During the financial year 2005-06, the Company had made an offering of Zero Coupon Foreign Currency Convertible Bonds (FCCBs) for an aggregate amount of USD 100 million and accordingly 1000 FCCBs of the nominal value of USD 1,00,000/- each were issued for a tenure of 5 years with the Maturity Date as April 1, 2011.

During 2009-10, the Company had re-purchased and cancelled 3.4% of the outstanding FCCBs aggregating to USD 3.4 million (nominal value) in accordance with the Guidelines prescribed by Reserve Bank of India and thereupon, 966 FCCBs were outstanding.

During 2010-11, none of the FCCB holders had exercised their option for conversion of FCCBs into Equity Shares.

In terms of the agreement with the Principal Agent, the Company has unconditionally remitted the amount of USD 133.03 million equivalent to Rs. 598.50 Crores (comprising principal amount and accumulated premium on redemption of FCCBs) to the Principal Agent on March 31, 2011, to discharge the entire FCCBs maturing on April 1, 2011. The Companys liability as on March 31, 2011, has accordingly been extinguished on remittance. The Principal Agent has confirmed discharge of the payment to the Bond Holders and therefore, 966 outstanding FCCBs of Nominal Value USD 96.6 million stands redeemed at the redemption price of 137.7139% of its principal amount, as per the terms and conditions of the FCCB Issue, aggregating to an amount of USD 133.03 million consisting of payment of the principal amount of USD 96.6 million and accumulated premium on redemption of the FCCBs of USD 36.43 million.

Pursuant to this, all the FCCBs issued by the Company have been extinguished and there are no outstanding FCCBs as on the date of this Report.

10. Consolidated Financial Statements

The Consolidated Financial Statements of the Company prepared in accordance with applicable Accounting Standards forms a part of this Annual Report.

11. Corporate Governance

As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate Chapter on Corporate Governance practices followed by the Company together with a Certificate from the Companys Auditors confirming compliance forms part of this Report.

12. Directors

In accordance with Article 135 and Article 186A of the Articles of Association, on April 29, 2011, the Board of Directors appointed Mr. Arun V. Karambelkar as an Additional Director and Whole-time Director of the Company for a period of 5 years subject to approval of the shareholders of the Company at the ensuing Annual General Meeting.

The Company has received a Notice under Section 257 of the Companies Act, 1956 from a member signifying his intention to propose Mr. Arun V. Karambelkar as a candidate for the office of Director at the forthcoming Annual General Meeting.

As per the provisions of the Companies Act, 1956 read with Article 152 of the Articles of Association of the Company, Mr. Ram P. Gandhi, Mr. Sharad M. Kulkarni and Mr. Nirmal P. Bhogilal are the Directors of the Company who retire by rotation and being eligible, offer themselves for re-appointment.

The Company has received Form DD-A from all these Directors as required under the Companies (Disqualification of Directors under Section 274 (1) (g) of the Companies Act, 1956) Rules, 2003.

A brief profile of all these Directors containing details of their qualifications, expertise, other directorships, committee memberships etc. has been given in the Report on the Corporate Governance as well as in the Notice of the ensuing Annual General Meeting of the Company.

13. Directors Responsibility Statement

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

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

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

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

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

14. Industrial Relations

The industrial relations continued to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs. 6,66,860/- to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend for the year 2002-03 which remained unclaimed by the shareholders of the Company for a period exceeding 7 years from its due date of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

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

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

18. Auditors

M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the Company, bearing ICAI Registration No. 100186W retire at the ensuing Annual General Meeting and are eligible for re-appointment.

As required under the provisions of section 224(1B) of the Companies Act, 1956, the Company has obtained a written certificate from the Auditors to the effect that their re-appointment, if made, would be in conformity with the limits specified in the said section.

19. Auditors Report

The Auditors Report to the shareholders on the Accounts of the Company for the financial year ended March 31, 2011 does not contain any qualification.

20. Acknowledgements

Your Directors would like to acknowledge and place on record their sincere appreciation to all stakeholders – Clients, Financial Institutions, Banks, Central and State Governments, the Companys valued investors and all other business partners for their continued co-operation and excellent support received during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of the Board of Directors

AJIT GULABCHAND Chairman & Managing Director

Registered Office:

Hincon House Lal Bahadur Shastri Marg Vikhroli (West) Mumbai-400 083

Place: Mumbai Dated: April 29, 2011


Mar 31, 2010

1. Report

The Directors are pleased to present the 84th Annual Report together with the Audited Accounts for the year ended March 31, 2010

2. Financial Highlights

Particulars Year ended Year ended March 31, 2010 March 31, 2009 Rs. Crore Rs. Crore

Turnover 3862.97 3518.32

Profit before Interest, Depreciation and Tax 440.89 490.27

Less: i) Interest 205.15 210.50

ii) Depreciation 113.90 319.05 115.22 325.72

Profit before Tax 121.84 164.55

Less: Provision for Current Tax 20.96 18.61

Provision for Deferred Tax 40.15 36.51

Provision for Fringe Benefit Tax -- 2.40

MAT- Credit Entitlement (20.71) 4.40 (18.32) 39.20

Profit after Tax 81.44 125.35

Add: Balance brought forward from last year 279.90 207.95

Add: Transferred from Debenture Redemption Reserve 5.41 8.50

Amount available for Appropriation 366.75 341.80

Less: Appropriations

a) Proposed Dividend 24.26 20.50

b) Tax on Proposed Dividend 4.12 3.48

c) Debenture Redemption Reserve 8.75 12.92

d) Transferred to General Reserve 10.00 25.00

47.13 61.90

Balance Carried to Balance Sheet 319.62 279.90

3. Dividend

Your Directors are pleased to recommend a dividend of Re.0.80 per Equity Share of Re.1/- each for the financial year ended March 31, 2010 (Previous year - Re.0.80 per Equity Share of Re.1/-each) aggregating to Rs. 24.26 crore.

4. Operations

The turnover of the Company at Rs. 3862.97 crore has shown an increase of 9.8% as compared to Rs. 3518.32 crore for the previous year. The profit before tax is Rs. 121.84 crore as compared to Rs. 164.55 crore for the previous year.

Your Directors are pleased to inform that during the year under report, the Company has secured the following major contracts.

Dagachhu Hydro Power Plant (Civil Works), 114

MW, Bhutan

Contract Value: 388 crore

• Gosikhurd Hydel Scheme, 24 MW, Maharashtra Contract Value: 229 crore

• Pare Hydro Electric Project,110 MW, Arunachal Pradesh

Contract Value: 276 crore

• Pumped Water Supply scheme from Kesaria to Sonaria, Gujarat (NC-25)

Contract Value: 168 crore

• Elevated Road Corridor from Park Circus to E.M. Bypass, Kolkata

Contract Value: 318 crore

• Cavern for Crude oil storage, Padur, Karnataka Contract Value: 375 crore

POT Shell fabrication works for Aditya Aluminium project, Orissa Contract Value: 109 crore

• Four-laning of Bahrampore-Farraka section of NH-34 in West Bengal on Design, Build, Finance, Operate and Transfer Toll basis under NHDP- IIKPackage No.NHDP-lll/BOT/WB/03)

Four-laning of Farraka-Raiganj section of NH-34 in West Bengal on Design, Build, Finance, Operate and Transfer Toll basis under NHDP- IIKPackage No.NHDP-lll/BOT/WB/04)

• Four-laning of Raiganj-Dalkhola section of NH- 34 in West Bengal on Design, Build, Finance, Operate and Transfer Toll basis under NHDP- IIKPackage No.NHDP-lll/BOT/WB/05)

• POT Superstructure fabrication works for Aditya Aluminium project, Orissa Contract Value: 100 crore

• Civil and Piling works for Aditya Aluminium Project, Orissa

Contract Value: 199 crore

Single Line Tunnel No.1 between Dholakal and

Kalmai, Assam

Contract Value: 118 crore

• Reconstruction of Dry Dock at Naval Dockyard, Mumbai

Contract Value: 608 crore

The total balance value of works on hand as on March 31, 2010 is Rs.18,810 crore including Companys share in integrated joint venture projects and Sawalkot project.

Decisions are awaited from various clients for tenders submitted by the Company (Directly or in JV) for 24 projects amounting to about Rs.9,520 crore. Tenders for various packages for 23 projects worth about Rs.14,630 crore are expected to be submitted in the near future. The Company has also submitted prequalification bids for 11 projects worth over Rs.6,170 crore, which are currently under evaluation. The Company is confident of securing a sizeable share of these new projects.

Subsidiaries Operations

(i) Lavasa Corporation Ltd. - integrated Urban Development & Management

Lavasa is free Indias first planned hill city being developed by Lavasa Corporation Ltd., subsidiary company of HCC. Located in the Western region of India in the picturesque landscape of the Sahayadri Mountains, it is set amidst 7 hills and 60 km. of lakefront. A three hour drive from Mumbai and an hours drive from Pune, the city is one fourth of the size of Mumbai.

The master plan of Lavasa (current development plan-18,000 acres) is developed by internationally renowned design consultant HOK, USA. The master plan, recipient of many international awards, is based on the principles of New Urbanism that brings together all the components essential to daily life in a more organized manner. Lavasa has many firsts to its credit - technology leadership, e-Governance, Indias first e-city, the first Indian city developed using Geographical Information System (GIS), etc. In association with The Biomimicry Guild (USA), the science of Biomimicry is used at Lavasa where learnings from nature are seamlessly integrated in the master planning of Lavasa.

Lavasa is planned for a permanent population of around 3 lakh residents and a tourist inflow that is envisaged at 20 lakh per annum. It aims to provide a perfect work - life balance with an unique combination of technology and infrastructure advancements. The city will have a 365 day economy with a host of non polluting industries being the main economic driver; these include R&D and training centres, IT and biotech industry, KPOs and those related to art, fashion and animation.

The tie ups continued though 2009 - 10. In the hospitality space partners such as Accor Hospitality with three brands - Mercure, Novotel and Pullman are all getting ready to launch in the next 12 months with Mercure opening first in April 2010. Accor Hospitality is also managing the Lavasa International Convention Centre which opened its doors in March 2010. Hilton, Ramada, Velvett Country, Oakwood, two Langham properties, Holiday Inn and many more are to follow in quick succession giving Lavasa a new hotel property every 6 months.

An equal amount of progress has been made in the education space with the Ecole Hoteliere Lavasa opening in July 2009 followed by Educomp with an IB school and Euro kids with a primary and pre-primary school.

The Institute of International Business Relations Germany is ready to launch their programs in the next 12 months. NSHM Knowledge Campus of Kolkata, Symbiosis of Pune and Christ University of Bangalore are also to follow with their campuses over the next 18 months.

Professional and Executive Education has also taken off in Lavasa in a big way with MIT having conducted their pilot program based on Airport and Airline Systems, Planning and Management. This has prepared a platform for them to conduct similar programmes at Lavasa in the future. In addition, The Biomimicry Guild, USA also held its first executive education at Lavasa.

The focus on branding and communication activities at the consumer continued with momentum through 2009-10. The communication activities were targeted at the various stakeholders and clearly positioned Lavasa as a future city in the making. A thought leadership platform -Lavasa Future Cities was launched in association with the Times of India group. The key objective was to trigger a thought process amongst public as well as key decision makers on not only the need to push for creation of more urban centres for the rapidly migrating Indian populace but also to push forth the need for better and more workable governance structures. This intensive 5 month campaign was planned and executed across various media (print, radio, internet, on- ground events) and included a Citizen Connect initiative.

During the year, Lavasa Corporation Ltd. has registered impressive performance with turnover of Rs. 481.60 crore as compared to Rs. 212 crore in the previous year. The profit before tax is at Rs. 209.50 crore as compared to Rs. 135.10 crore in the previous year.

(ii) HCC Real Estate Ltd.

HCC is developing its real estate business through its wholly owned subsidiary HCC Real Estate Ltd. (HREL). The focus of HREL has been on acquiring and developing real-estate assets that provide unique value propositions to customers. Consequently, instead of building large land banks, HREL has been focusing on developing projects that are "one of a kind" in India.

During the financial year 2009-10, 247 Park at Vikhroli (West) was completed. Inspite of recessionary period, 247 Park has got good response from the various clients and is now leased to the extent of more than 75% of the overall leasable area. Considering the interest expressed by potential clients, we are confident of leasing out the balance area during the 1st quarter.

247 Park was awarded the prestigious "LEED" certification for Green Building. It was also awarded by CNBC Awaaz-CRISIL as "The Best Commercial Building in Western Region of India".

For the Township projects in the areas of Thane, Pune & Nashik, the Company is consolidating its position in respect of land titles and other documentation. The progress on this front is satisfactory.

Charosa Wineries Ltd., a 100% subsidiary of HREL, established in 2008-09 for setting up world-class vineyard and ultra-modern winery in Nashik district has already acquired more than 200 acres of land. All the infrastructural work for vineyard is already completed. The first crop of wine grapes has already been cultivated for captive use. Company plans to complete the construction and commission the winery during the year 2010-11. Company has also plans to promote wine tourism considering the increasing wine consumption in the region.

During the year, HREL formed a 100% subsidiary under the name HCC Realty Limited to undertake certain projects.

Dholera Project

The Company has received an extension of two years to the MOU with Gujarat Government to develop a Water Front City at Dholera on 4,000 acres as the master plan for the same is being finalized by the Consultants appointed by the Government. The Water Front City will be developed with proposed total investment of Rs. 40,000 crore in Dholera Special Investment Region (SIR) located at the Gulf of Cambay about 130 km from Ahmadabad. Dholera is in the influence area of the Delhi-Mumbai Industrial Corridor (DMIC) project which has witnessed substantial progress in the last one year. Company has continued with the next steps of preparation of concept development report and is expected to receive the site options from Gujarat Infrastructure Development Board (GIDB), the nodal agency for Dholera SIR by June 2010.

(iii) HCC Infrastructure Ltd.

HCC Infrastructure Ltd., the company formed as a separate wholly owned subsidiary in the financial year 2007-08 to develop infrastructure projects has during the year under review gathered rapid momentum and grown its portfolio from Rs. 2307 crore in last fiscal to Rs. 5539 crore in 2009-10.

During the year HCC Infrastructure concentrated mainly on National Highways Authority of India (NHAI) projects on a public private partnership basis with the support of an excellent team that has special DNA that leverages its in - house construction expertise and quality, while opportunistically defining its own legacy as an asset manager.

During the year under review, HCC Infrastructure qualified for 27 road projects, and focused its bids only for three projects with 100% success. That expressed discipline, creativity and highly patient investment strategy. In February 2010, the NHAI awarded three contiguous sections of approximately 256 km. for the development of existing two lanes to four lanes between Baharampore to Dalkhola on NH-34 in the state of West Bengal.These concessions were awarded on a Design, Build, Finance, Operate, and Transfer (DBFOT) Toll basis with a cumulative grant of Rs. 1033 crore. The first section is from Baharampore to Farakka (103 km), the second is from Farakka to Raiganj (103 km) and the third is between Raiganj and Dalkhola (50 km). These projects are proposed to be implemented by three separate special purpose vehicles (SPVs) viz. Baharampore- Farakka Highways Ltd. (BFHL), Farakka-Raiganj Highways Ltd. (FRHL) and Raiganj-Dalkhola Highways Limited (RDHL) respectively.

The 4 lane Dhule-Palasner Road project on NH-3 from 168.500 km. to 265.000 km. in the State of

Maharashtra under DBFOT basis won last year in a consortium with two other partners namely John Laing, (U.K.) and Sadbhav Engineering, (India) has achieved Financial Closure within the minimum possible time frame and also has reached to 10% physical completion. This project is being implemented by a special purpose vehicle (SPV), Dhule- Palesner Tollway Ltd. (DPTL).

The prestigious ongoing 6 lane Badarpur- Faridabad Elevated Highway project from 16.100 km. to 20.500 km. on Delhi-Agra Section of NH-2 has also reached to 67% completion within 15 months and expected to be commercially operational in next year. This project is being implemented by a special purpose vehicle (SPV), Badarpur-Faridabad Tollway Ltd. (BFTL) Also during the year under review, Nirmal BOT Road project of 278.000 km. (Kadthal) to 308.000 km. (Armur) of NH-7 in the State of Andhra Pradesh under North-South Corridor (NHDP Phase-ll) on BOT (Annuity) Basis is now fully operational with in-house O&M team and has achieved Commercial Operation Date 100 days ahead of schedule which entitles an early project completion bonus of Rs.13.22 crore. This project is being implemented by a special purpose vehicle (SPV), Nirmal BOT Ltd. (NBL). 5. Subsidiary Companies

At the beginning of the year, the Company had 36 subsidiary companies. During the year the following changes have taken place.

a) Your Company has promoted following wholly owned subsidiary/subsidiary companies for promoting Companys other businesses at opportune times and for specific infrastructure development projects.

Name of the Company Date of Incorporation

Highbar Technologies Limited 25.11.2009

Baharampore-Farakka Highways Limited 11.03.2010

Farakka-Raiganj Highways Limited 11.03.2010

Raiganj-Dalkhola Highways Limited 11.03.2010

b) HCC Real Estate Limited (the wholly owned subsidiary) has promoted the following wholly owned subsidiary company, making it a subsidiary of your Company from the date of its incorporation.

Name of the Company Date of Incorporation

HCC Realty Limited 18.02.2010

c) Lavasa Corporation Limited has promoted the following companies making them subsidiaries of your Company from the day of their incorporation.

Name of the Company Date of Incorporation

Green Hills Residences Limited 06.05.2009

My City Technology Limited 04.08.2009

Reasonable Housing Limited 23.09.2009

Minfur Interior Technologies Limited 30.11.2009

Verzon Hospitality Limited 08.01.2010

Rhapsody Hospitality Limited 14.01.2010

Valley View Entertainment Limited 20.01.2010

Andromeda Hotels Limited 22.01.2010

Sirrah Palace Hotels Limited 25.01.2010

Whistling Thrush Facilities Services Limited 27.01.2010

Warasgaon Tourism Limited 25.02.2010

Our Home Service Apartments Limited 10.03.2010

Sahyadri City Management Limited 12.03.2010

Warasgaon Power Supply Limited 12.03.2010

Hill City Service Apartments Limited 26.03.2010

Baharampore-Farakka Highways Limited, Farakka- Raiganj Highways Limited, Raiganj-Dalkhola Highways Limited the direct subsidiaries of the Company shall close their first financial year on March 31, 2011 and therefore no accounts have been prepared by these companies for the period ended March 31, 2010.

HCC Realty Limited subsidiary of HCC Real Estate Limited shall close its first financial year on March 31, 2011 and therefore no accounts have been prepared by this company for the period ended March 31, 2010.

Verzon Hospitality Limited, Rhapsody Hospitality Limited, Valley View Entertainment Limited, Andromeda Hotels Limited, Sirrah Palace Hotels Limited, Whistling Thrush Facilities Services Limited, Warasgaon Tourism Limited, Our Home Service Apartments Limited, Sahyadri City Management Limited, Warasgaon Power Supply Limited, Hill City Service Apartments Limited which are the direct subsidiaries of Lavasa Corporation Limited shall close their first financial year on March 31, 2011 and therefore no accounts have been prepared by these companies for the period ended March 31, 2010.

A Statement pursuant to Section 212 of the Companies Act, 1956 containing the details of subsidiaries of the Company, forms part of the Annual Report.

In terms of the approval granted by the Central Government under Section 212(8) of the Companies Act, 1956, vide its letter bearing number 47/156/2010- CL-III dated March 19, 2010 the copies of the Balance Sheet, Profit and Loss Account, Reports of the Board of Directors and the Auditors of the Subsidiary Companies for the year ended March 31, 2010 are not attached to the Balance Sheet of the Company. The Company will make available the annual accounts and other related detailed information of the following subsidiaries upon request by any member / investor of the Company / Subsidiary Companies:

1. Hincon Technoconsult Ltd

2. Western Securities Ltd

3. Pune Paud Toll Road Company Ltd 4 Nirmal BOT Ltd

5. Badarpur Faridabad Toll way Ltd

6. HCC Infrastructure Ltd

7. HCC Aviation Ltd

8. Panchkutir Developers Ltd

9. Highbar Technologies Ltd

10. HCC Construction Ltd

11. HCC Mauritius Enterprises Ltd

12. HCC Singapore Enterprises Pte. Ltd

13. HCC Real Estate Ltd

14. HRL Township Developers Ltd

15. HRL (Thane) Real Estate Ltd

16. Nashik Township Developers Ltd

17. Maan Township Developers Ltd

18. Charosa Wineries Ltd

19. Powai Real Estate Developers Ltd

20. Lavasa Corporation Ltd

21. Lavasa Hotel Ltd

22. Warasgaon Lake View Hotels Ltd (formerly known as Lavasa Star Hotel Ltd)

23. Apollo Lavasa Health Corporation Ltd

24. Lakeshore Watersports Company Ltd

25. Dasve Convention Centre Ltd

26. Dasve Business Hotel Ltd 27 Ecomotel Hotel Ltd

28. Dasve Hospitality Institutes Ltd

29. Lakeview Clubs Ltd

30. Dasve Retail Ltd

31. Full Spectrum Adventure Ltd

32. Spotless Laundry Services Ltd

33. Lavasa Bamboocrafts Ltd

34. Knowledge Vistas Ltd

35. Green Hill Residences Ltd

36. My City Technology Ltd

37. Reasonable Housing Ltd

38. Minfur Interior Technologies Ltd

Further, the annual accounts of the subsidiary companies will also be kept for inspection by any member / investor at the Companys Registered Office. The Company has presented the Audited Consolidated Financial Statements and the same have been prepared in compliance with the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India (ICAI).

6. Acquisition of Controlling Stake in Karl Steiner AG, Switzerland

In March 2010, your Company agreed to acquire controlling stake i.e. 66% equity stake in Karl Steiner AG, Switzerland (KSAG), the second largest total services contractor in the Swiss Real Estate market. This is the Companys first international acquisition. KSAG specialises in turnkey development of new buildings and refurbishments and offers services in all facets of real estate construction.

KSAG was founded in 1915 and during its rich history, KSAG has constructed over 1,200 residential projects, 540 office buildings, 45 hotels and 150 social infrastructure buildings which include universities, schools, hospitals, prisons and nursing homes. Among KSAGs many clients, for which the company has realized or renovated headquarters are Nestle, Helvetia, Merck-Serono, Sanofi - Pasteur and the World Economic Forum. KSAG has also built laboratories for companies like IBM and the Federal Institute of Technology. In Zurich, KSAG has constructed/renovated the Park Hyatt, Radisson Blu, and The Savoy Hotels. Other significant accomplishments for the company include Sihl City (a CHF 500 million integrated development including a hotel, shopping center, offices and a residential complex). Terminal A of the Zurich Airport, portions of the Geneva airport, the Swiss Re convention center and the home of Google Europe. In the past ten years, KSAG has completed nearly CHF 10 billion worth of real estate construction, which translates to approximately 32 million square feet of development.

Your Company agreed to acquire 66% stake by way of issuance of new shares in consideration for CHF 35 million cash investment in KSAG. KSAG shall use the funds raised by the capital increase for its Swiss operations and the growth of the Companys core business in Indias growing residential and commercial construction market

In 2014, in line with the envisaged succession process, KSAGs sole owner Mr. Peter Steiner will sell his remaining shares to the Company. The shares will be sold at a pre-agreed price based on KSAGs earnings achieved between 2010 and 2013.

The acquisition of KSAG shall bring a rich experience of constructing world class integrated buildings to your company.

Apart from this, the acquisition of KSAG shall bring the following benefits to HCC: -

• Entry into the lucrative integrated building construction market in India, which is estimated at Rs.65, 000 to Rs.75, 000 crores annually.

Total solutions ability for a facility at a single source.

Implementation of new technologies to support sustainable and green development.

• Safe and fast construction processes.

• Access to many world class, cutting edge European technologies that will augment EPC offerings in India and other markets.

The transaction is subject to regulatory approvals in Switzerland and India and shall close in the first quarter of the FY 2010 -2011.

7. Employee Stock Option Scheme (ESOP)

In accordance with the approval of the Board of Directors and the Shareholders of the Company, the ESOP Compensation Committee at its Meeting held on July 20, 2009 re-priced the 41,31,600 number of Options (after adjusting for Options lapsed) already granted by the Company on April 25, 2008 under HCC Employee Stock Option Scheme at Rs.104.05 per Option (earlier Rs.132.50 per Option).

Further, out of total 43,25,350 Options granted (in force) 7,70,880 number of Options have been vested with the employees during the year.

The particulars with regard to the Stock Options as required to be disclosed pursuant to the provision of Clause 12 of SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, as amended as on March 31, 2010 are set out in the Annexure I to this Report.

8. a) Raising of Funds through Qualified Institutional

Placement and Increase in Paid-up Equity Share Capital

During the year under review, your Company successfully raised funds aggregating Rs. 4,80,10,50,000/- (Rupees four hundred eighty crore ten lakhs fifty thousand only) through Qualified Institutional Placement of 4,70,00,000 Equity Shares of nominal / face value Re. 1/- each at an issue price of Rs. 102.15 per Equity Share (inclusive of premium of Rs. 101.15 per Equity Share).

This has resulted in increasing the Paid up Equity Share Capital of the Company from 25,62,49,600 Equity Shares of Re. 1/- each aggregating Rs. 25,62,49,600/- (Rupees twenty five crore sixty two lakhs forty nine thousand six hundred only) to 30,32,49,600 Equity Shares of Re. 1/- each aggregating Rs. 30,32,49,600/- (Rupees thirty crore thirty two lakhs forty nine thousand six hundred only).

The entire issue proceeds aggregating Rs.480.11 crore have been utilized by the Company towards financing of capital expenditure, meeting the working capital requirements of the Company and repayment of loans in terms of the objects of the issue. b) Status of GDSs / FCCBs & Utilisation of Proceeds During the financial year 2005-06, the Company had made a combined offering of Global Depository Shares (GDSs) and Foreign Convertible Bonds (FCCBs) for an aggregate amount of USD 200 million. The FCCBs and underlying equity shares of GDSs have been allotted on March 29, 2006. As at March 31, 2010, out of 2,69,54,200 underlying equity shares of GDSs, 1,40,146 GDSs have remained outstanding which forms part of the existing paid up capital of the Company. During the year under review, none of the bond holders have exercised their option for conversion of FCCBs into equity shares. However, the Company had re-purchased and cancelled 3.4% of its outstanding Zero Coupon Foreign Currency Convertible Bonds (FCCBs) due 2011 of USD 1,00,000 each aggregating to USD 3.4 million (Nominal Value) in accordance with the Guidelines prescribed by Reserve Bank of India. As at March 31, 2010, 966 FCCBs of the nominal value of USD 1,00,000/- each aggregating to USD 96.60 million have remained outstanding. The entire issue proceeds from aforesaid issue of GDSs & FCCB aggregating to Rs.869.54 crore have been utilized by the Company towards financing of capital expenditure and for meeting the working capital requirements of the Company in terms of the objects of the issue. 9. Constitution of Selection Committee

The Company formed a Selection committee during the financial year 2009-10 as per the requirements of Directors Relatives (Office or Place of Profit) Rules, 2003 to deal with matters concerning the appointment and remuneration of relatives of Director for holding office or place of profit in the Company. The Committee comprises of three Directors; namely, Mr. Nirmal P. Bhogilal, Chairman and Independent Director, Mr. Ram P. Gandhi, Independent Director, Mr. Anil Singhvi, Independent Director and one Mr. Ashish Singh, an expert who is MBA (Harvard Business School) & B.A. Economics (Harvard College), the Managing Director of Bain & Co., India with significant experience in organization redesign, across multiple industries.

Pursuant to the provisions of Section 314(IB) of the Companies Act, 1956 and rules made thereon, the Selection Committee & the Board of Directors in its meeting held on October 23, 2009 and Shareholders of the Company through Postal Ballot had approved the appointment and remuneration of Mr. Arjun Dhawan, a relative (son-in-law) of Mr. Ajit Gulabchand, Chairman & Managing Director of the Company, to hold and continue to hold an office or Place of Profit as a President-HCC Infrastructure Business of the Company with effect from November 01,2009, remuneration being subject to the approval of the Central Government.

10. Consolidated Financial Statements

As stipulated by Clause 32 of the Listing Agreement with the Stock Exchanges, the attached consolidated financial statements have been prepared in accordance with the Accounting Standard AS-21 & AS-27 read with Accounting Standard AS-23 on Accounting for Investments in Associates.

11. Corporate Governance

A separate section titled "Corporate Governance" including a certificate from the Auditors of the Company confirming compliance of the conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed hereto and forms part of the Report.

12. Directors Retirement by rotation

As per the provisions of the Companies Act, 1956 read with Article 152 of the Articles of Association of the Company Mr. D.M. Popat and Mr. Y.H. Malegam are the Directors of the Company to retire by rotation and being eligible, offer themselves for re-appointment. Appointment of the Directors of the Company Mr. K. G. Tendulkar

The tenure of Mr. K. G. Tendulkar as Deputy Managing Director of the Company expired on November 7, 2009. The Board of Directors place on record its appreciation of the contributions made and the valuable services rendered by him during his tenure as Executive Director (Operations) and Deputy Managing Director of the Company.

The Board of Director of the Company at its Meeting held on October 23, 2009 appointed Mr. K. G. Tendulkar as an Additional Director of the Company with effect from November 8, 2009, who holds office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as a Director of the Company.

Mr. Anil C. Singhvi

Mr. Anil C. Singhvi, was appointed as a Director of the Company by the Board of Directors at its Meeting held on July 27, 2007 to fill in the casual vacancy caused in the Board due to the resignation by Mr. R. G. Vartak, who holds office upto the date of the forthcoming Annual General Meeting and is eligible for appointment as a Director of the Company.

All these directors have filed Form DD-A with the Company as required under the Companies

(Disqualification of Directors under Section 274(1) (g) of the Companies Act, 1956) Rules, 2003.

Brief particulars and expertise of these Directors and their other directorship and committee membership have been given in the Report on the Corporate Governance and in the Notice of the ensuing Annual General Meeting of the Company.

13. Directors Responsibility Statement

In accordance with the provisions of Section 217(2AA) of the Companies Act, 1956, with regard to the Directors responsibility statement, the Board of Directors confirms that:

a) in the preparation of the annuaf accounts, the applicable accounting standards have been followed and there has been no material departure;

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

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

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

14. Industrial Relations

The industrial relations continue to be generally peaceful and cordial.

15. Transfer to Investor Education and Protection Fund (IEPF)

The Company has, during the year under review, transferred a sum of Rs.7.94 lacs to Investor Education and Protection Fund, in compliance with the provisions of Section 205C of the Companies Act, 1956. The said amount represents dividend, debentures and interest on debentures which remained unclaimed by the shareholders / debenture holders of the Company for a period exceeding 7 years from their respective due dates of payment.

16. Particulars of Employees and other additional information.

The information required under Section 217 (2A) of the Companies Act, 1956 and the Rules made there under is given in the Annexure to this Report and forms part of the Report. However, in terms of Section 219(1) (b) (iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary at the Registered Office of the Company.

17. Conservation of Energy, technology absorption and foreign exchange earnings and outgo.

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

18. Auditors

M/s K. S. Aiyar & Co., Chartered Accountants, Mumbai, Auditors of the Company, bearing ICAI Registration No. 100186W retire at the ensuing Annual General Meeting and are eligible for re- appointment. They have furnished a certificate to the effect that their proposed appointment, if made will be in accordance with the limits specified under section 2240-B) of the Companies Act, 1956.

19. Auditors Report

The Auditors Report to the shareholders does not contain any qualification.

20. Acknowledgements

Your Directors would like to express their sincere appreciation to the Financial Institutions, Banks, Central and State Governments and the Companys valued investors for their continued co-operation and support.

Your Directors also take this opportunity to acknowledge the dedicated efforts made by workers, staff, and officers at all level for their contribution to the success achieved by the Company.

For and on behalf of the Board of Directors

AJIT GULABCHAND Chairman & Managing Director

Registered Office:

Hincon House Lai Bahadur Shastri Marg Vikhroli (West) Mumbai-400 083

Place: Mumbai Dated: April 30, 2010

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