lanco epc is one of india’s premier epc companies, with rich experience in executing large thermal...

LANCO INFRATECH LIMITED

ANNUAL REPORT 2014 - 15

Lanco EPC is one of India’s premier EPC

companies, with rich experience in executing large

thermal and hydro power projects, civil

construction projects and infrastructure projects

across the country. ISO 9001:2008 certified, this

division derives its strength from its experienced

team of professionals well versed in latest project

management techniques. Lanco EPC’s unique

'concept to commissioning' execution model that

considers time, cost and quality parameters

enables this division to surge ahead amidst

challenges.

With a current EPC order book of 28,063 Crores, we

are confident of executing most of the order book

over the next three years. This will significantly help

in increasing our standalone EPC and construction

revenues. We are also making continuous efforts in

securing new EPC orders from various external

clients.

EPC

Infusing new energy to surge ahead an inspirational philosophy –

'Recharge'. In the way we think, act and deliver. It has enabled us to look at

challenging times positively. Our expertise in the core verticals EPC, Power,

Solar, Natural Resources, Infrastructure and Property Development has

sharpened our acumen as we explore newer territories with a larger

business mandate. This helps us to reinvent, recast and recreate

opportunities in a manner that we bring in a world of difference to the

businesses we operate in.

Credited as one of the nation's leading power

producer, we have always elevated our goals and

set benchmarks in the power generation sector.

Consolidating our strengths and integrating our

presence across the value chain, has helped us in

capturing an elevated value addition across the

businesses.

We currently have an installed capacity of 3460

MW and a capacity under construction of 4636

MW. Lanco Kondapalli has recently emerged as a

successful bidder in the gas pooling bids called by

the Government of India.

POWERSolar energy is a renewable, free source of energy

that is sustainable and totally inexhaustible. This

alternative energy source helps us achieve our

goals of diversifying energy sources, improving

efficiency and reducing costs. We are focused on

commercializing technologies for green and

efficient energy generation systems such as solar

thermal and solar photovoltaic (PV).

Our presence in the Solar sector especially in the

EPC Domain has good growth potential, keeping in

view the Government's huge impetus for Solar

Energy in the country. We have recently bagged a

50MW solar PV EPC contract from NTPC for value of

more than `300 Crores and plan to be active

participants in the upcoming Solar EPC bids.

SOLAR

The Indian Resource Industry has been witnessing a

remarkable growth in the recent past. At Lanco, we

have gained significant momentum by building our

natural resources portfolio of operating and

under-development assets in India and across the

world. Our strategic move towards 'Project

Integration' has enabled us to extend our natural

resources' operating portfolio and under-

development assets in India and across the globe.

With around 1.5 billion tonnes of coal resources in

our business portfolio, we are reckoned as one of

the exclusive members among the mine

developers & operators in India.

The recent order form Steel Authority of India, for

the Tasra open cast project and its associated

captive power project has reiterated our strengths

in Natural Resources.

NATURAL RESOURCES INFRASTRUCTURE Our Infrastructure development business is focused

on executing large civil and urban projects such as

roads, highways, ports, airports, railway lines, etc.

The successful execution and completion of

impressive civil & urban projects has earned us our

prominent posit ion in the Infrastructure

development sector.

The projects currently under highway portfolio

include two major National Highway (NH) projects

in the State of Karnataka on BOT basis. Our current

portfolio consists of highway projects of about

163km length, for which the concession

agreements have been signed with the National

Highways Authority of India.

One of Hyderabad's most sort after uber

destination, the 'high life' stands redefined at Lanco

Hills. Spread over 100 acres, Lanco Hills is a unique

world within, with convenient access to homes,

premium office spaces, entertainment, leisure and

shopping at one place. This mega project owes its

magnificence to the meticulous detailing by

renowned architects & consultants.

RESIDENTIAL

l Towers under Phase I are ready and are being occupied

l In addition to high rise towers, 56 Villas are under construction and nearing completion.

OFFICE SPACE

l IT Tower: 0.59 mnsqft.

l SEZ: 0.056 mnsqft incubation space.

PROPERTY DEVELOPMENTWe approach Corporate Social Responsibility

professionally at Lanco, and our aim is to align our

efforts through internationally accepted

approaches. Social responsibility is integrated into

our core values and business strategy.

The Lanco Foundation is currently implementing

programmes in Education, Health, Safe Drinking

Water, Empowering the Physically Challenged,

Neighbourhood Community Development and

Environment.

l Member of the UN Global Compact

l Operating in 11 Indian States at 13 locations

l Covering 155 villages & 240,000 population

beneficiaries

LANCO FOUNDATION

Mr. R. KrishnamoorthyIndependent Director

Board of Directors

Mr. L. Madhusudhan RaoExecutive Chairman

Mr. G. Venkatesh BabuManaging Director

Mr. G. Bhaskara RaoExecutive Vice - Chairman

Mr. Pawan ChopraIndependent Director

Mr. L. SridharVice - Chairman

Mr. S. C. ManochaDeputy Managing Director

Dr. Uddesh Kumar KohliIndependent Director

Smt. L. RamalakshmammaDirector

Mr. Vijoy KumarIndependent Director

Mr. Yashpal GuptaNominee Director

Mr. R. M. PremkumarIndependent Director

Mr. D. L. RawalIndependent Director

Mr. Gurbir Singh Sandhu Independent Director

7

Contents Year at a Glance 9Boards’ Report 10Management Discussion and Analysis 15Report on Corporate Governance 44Standalone Financial Statements Auditors’ Report 63Balance Sheet 70Statement of Profit and Loss Account 71Cash Flow Statement 72Notes to Standalone Financial Statements 74Consolidated Financial Statements Auditors’ Report 111Balance Sheet 122Statement of Profit and Loss Account 123Cash Flow Statement 124Notes to Consolidated Financial Statements 125

Bankers and Financial Institution of the CompanyAllahabad Bank

Andhra Bank

Axis Bank Limited

Bank of Baroda

Bank of Maharashtra

Canara Bank

Central Bank of India

Corporation Bank

Dena Bank

ICICI Bank Limited

IDBI Bank Limited

Indian Overseas Bank

IDFC Limited

Kotak Mahindra Bank Limited

Life Insurance Corporation of India

Oriental Bank of Commerce

Punjab & Sind Bank

Punjab National Bank

State Bank of Bikaner & Jaipur

State Bank of Hyderabad

State Bank of India

State Bank of Mysore

State Bank of Patiala

The Jammu & Kashmir Bank

Union Bank of India

United Bank of India

Yes Bank Limited

Board of Directors

Mr. L. Madhusudhan Rao - Executive ChairmanMr. G. Bhaskara Rao - Executive Vice-ChairmanMr. L. Sridhar - Vice-ChairmanMr. G. Venkatesh Babu - Managing DirectorMr. S. C. Manocha - Deputy Managing DirectorSmt. L. Ramalakshmamma–DirectorDr. Uddesh Kumar Kohli - Independent DirectorMr. R. Krishnamoorthy–Independent DirectorMr. R. M. Premkumar– Independent DirectorMr. D. L. Rawal– Independent DirectorMr. Gurbir Singh Sandhu– Independent DirectorMr. Vijoy Kumar – Independent DirectorMr. Pawan Chopra– Independent DirectorMr. Yashpal Gupta – Nominee Director

Chief Financial Officer Mr. T. Adi Babu

Company Secretary and Compliance OfficerMr. A. Veerendra Kumar

Auditors Brahmayya & Co.,(Registration No. - 000511S)Chartered Accountants48, Masilamani Road, Balaji Nagar, RoyapettahChennai - 600 014Tamil Nadu, India

Registered Office Plot No.4, Software Units Layout, HITEC CityMadhapur, Hyderabad – 500 081, Telangana, IndiaPhone: +91-40-4009 0400, Fax: +91-40-2311 6127E-mail: [email protected]: www.lancogroup.comCorporate Identity Number: L45200TG1993PLC015545

Corporate OfficeLanco House, Plot No. 397, Udyog Vihar, Phase-3Gurgaon–122 016, Haryana, IndiaPhone: +91-124-474 1000, Fax: +91-124-474 1878

Registrar & Share Transfer AgentAarthi Consultants Private Limited1-2-285, Domalguda, Hyderabad – 500 029Telangana, IndiaPhone: +91-40-2763 8111, 2763 4445Fax: +91-40-2763 2184E-mail: [email protected]: www.aarthiconsultants.com

Corporate InformationAnnual Report 2014-2015

8

(` Crores) Change

PARTICULARS 2014-15 2013-2014 (%)

Profit and Loss AccountGross Revenue 9,681.42 10,875.27 (11)

Less: Elimination of Inter Segment Revenue 170.67 277.42 (38)

Net Revenue 9,510.75 10,597.85 (10)

Profit Before Depreciation, Interest and Taxation (PBITDA) 1,832.75 1,671.87 10

Depreciation and Amortisation 1,113.75 1,171.91 (5)

Profit Before Interest and Taxation 719.00 499.96 44

Eliminated Profit on transactions with Subsidiaries (18.56) (15.05) 23

Profit Before Interest and Taxation Plus Elimination 700.44 484.91 44

Interest and Finance Charges 3,060.21 2,762.12 11

Profit / (Loss) Before Taxation, Exceptional Item Plus Elimination (2,359.77) (2,277.21) 4

Exceptional Item 123.15 (179.26) 169

Profit / (Loss) Before Taxation Plus Elimination (2,236.62) (2,456.47) 9

Provision for Taxation (Including Deferred Tax and MAT Credit Entitlement) (117.05) (129.44) (10)

Profit / (Loss) After Tax (Before Minority Interest & Share of Profits from Associates) (2,119.57) (2,327.03) 9

Share of Minority Interest (100.32) (115.64) (13)

Share of Profits / (Loss) from Associates (3.29) (33.89) (90)

Profit / (Loss) After Tax (After Minority Interest and Share of Profits from Associates) Plus Elimination

(2,022.54) (2,245.28) 10

Prior Period Items 42.52 43.50 (2)

Elimination of Profit on Transactions with Subsidiaries and Associates (28.32) (14.90) 90

Profit / (Loss) After Tax (After Minority Interest and Share of Profits from Associates) (2,036.74) (2,273.88) 10

Cash Profit / (Loss) (505.64) (743.40) 32

Cash FlowCash from Operating Activities before Elimination 2,714.10 1,376.59 97

Balance SheetShare Capital 245.09 239.24 2

Reserves & Surplus (692.86) 1,218.30 (157)

Minority Interest 1,339.19 837.48 60

Net Worth Plus Minority 891.42 2,295.02 (61)

Eliminated Profit on Transactions with Subsidiaries and Associates (Cumulative) 1,472.84 1,501.17 (2)

Net Worth Plus Minority & Elimination 2,364.26 3,796.19 (38)

Non Current Liabilities 37,220.12 34,354.22 8

Current Liabilities 14,561.48 14,194.93 3

Total of Net Worth Plus Minority & Liabilities 52,673.02 50,844.17 4

Non Current Assets 42,211.95 40,253.03 5

Current Assets 10,461.07 10,591.14 (1)

Total of Assets 52,673.02 50,844.17 4

Key indicatorsEarning Per Share (In `)

Basic (8.58) (9.68) (11)

Diluted (8.58) (9.68) (11)

No. of Employees 3,163 4,000 (21)

Year at a glance - Consolidated

9

Dear Members,

Your Directors are pleased to present the Twenty Second Annual Report on the Business and Operations of the Company together with the Audited Accounts for the year ended March 31, 2015.

FINANCIAL RESULTS(` Crores)

PARTICULARSCONSOLIDATED STANDALONE

Year ended March 31 Year ended March 312015 2014 2015 2014

INCOMERevenue from operations and other income 9,510.75 10,597.85 1,530.71 2,339.37Profit Before Taxation (2,218.06) (2,441.42) (717.63) (959.99)Provision for Taxation (117.05) (129.44) (45.40) -Net Profit after Taxation (2,101.01) (2,311.98) (672.23) (959.99)Less: Prior period items 42.52 43.50 - -Add: Share of Profit/(Loss) of Associates (3.29) (33.89) - -Less: Elimination of Unrealized Profit on Transactions with

Associate Companies(9.76) 0.15 - -

Less: Share of Minority Interest (100.32) (115.64) - -Net Profit/ (Loss) after Taxation, Minority Interest and Share of Profit/ (Loss) of Associates (Balance Carried to Balance Sheet)

(2,036.74) (2,273.88) (672.23) (959.99)

Surplus brought forward (1,891.65) 382.23 519.11 1,479.10Depreciation Transitional Adjustment 10.05 - 8.25 -Balance carried to Balance Sheet (3,938.44) (1,891.65) (161.37) 519.11

BOARDS’ REPORT

FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANY’S AFFAIRS

On a Consolidated basis, your Company has reported Gross Revenues of `9,510.75 Crores as against `10,597.85 Crores of Revenues registered in the previous year. Total Expenditure for the Year was `11,851.96 Crores as against `12,860.01 Crores in the previous year. The Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to `1,832.75 Crores while the same was `1,671.87 Crores for the previous year i.e. a increase of 9.62%. The Profit before taxation stood at `(2,218.06) Crores, a increase of 9.15 % as compared to `(2,441.42) Crores in the previous year.

The Net Profit/(Loss) after Tax after adjustment of Minority Interest and Share of Profits of Associates was `(2,036.74) Crores as against `(2,273.88) Crores for the previous year.

Gross Interest and Finance charges on consolidated basis amounted to 3,060.21 Crores in comparison to 2,762.12 Crores due to increase in Loans and Working Capital requirements for Project Execution.

During the year, your Company sold 70 (2*35) MW Lanco Budhil Hydro Power Private Limited situated in Chamba District of Himachal Pradesh.

During the year, your Company along with other shareholders of Udupi Power Corporation Limited (UPCL) has entered into a definitive Share Purchase Agreement (SPA) on August 13, 2014 with Adani Power Limited (APL) for sale of 100% stake in UPCL. The receipt of full

share sale consideration and transfer of shares to APL was completed on April 20, 2015.

After the reporting period, an associate company i.e. Lanco Vidarbha Thermal Power Limited and a fellow subsidiary i.e. Lanco Babandh Power Limited became Subsidiary of the Company’s step down subsidiary i.e. Lanco Thermal Power Limited.

A detailed discussion on the results of the operations, financial condition and business review is included in the Management Discussion and Analysis section placed at Annexure-1 to this Report.

Except the above, there are no material changes and commitments, affecting the financial position of the Company which have occurred after March 31, 2015 till the date of this Report.

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

CDR PACKAGE:

Corporate Debt Restructuring Empowered Group (CDR EG) in its meeting held on December 11, 2013 has approved the CDR package submitted by the Company and issued letter of approval on December 20, 2013. As on March 31, 2015, CDR related documents have been executed and creation of security has been completed.

The approval of CDR Package is only for the Company and not for any of its subsidiaries and associates.

Annual Report 2014-2015

10

Terms of CDR

Re-schedule of Term loan and short term loans having moratorium period of 2 years from the cut off date of April 1, 2013 and are repayable in 30 quarterly instalments starting from June 30, 2015.

Portion of CDR Working Capital Loans on the cut off date i.e. April 01, 2013, has been carved out as Working Capital Term Loan - I (WCTL- I). LC/ BC/ BG devolved from cut off date till December 31, 2013 has been carved out as Working Capital Term Loan - II (WCTL-II).

Funded Interest on Term Loans, WCTL - I and WCTL - II are funded for a period of 2 years from cut off date i.e. April 1, 2013 to March 31, 2015 and on regular Cash Credit limit for an initial period of 6 months from cut off date to September 30, 2013 is converted into Funded Interest Term Loan (FITL). Interest on FITL is to be paid on monthly basis from April 30, 2013.

` 2,500 Crores Priority Loan sanctioned with a moratorium period of 2 years at an interest rate of 12.5% and is repayable in 18 quarterly instalments starting from June 30, 2015. As a part of the sanctioned Priority Loan, the Company has received an amount of `1,678.17 Crores as on March 31, 2015.

Rate of interest on restructured facilities being 11% p.a. to be increased in a stepped up manner up to 16% p.a. starting from financial year 2016-17.

Waiver of penal charges from the cut-off date to the date of implementation of the package.

The Company shall raise funds by sale of assets / divestment of shares in SPV’s / securitisation / QIP / IPO etc., to repay the above restructured facilities under CDR scheme.

In relation to the amount outstanding as at March 31, 2015 against the loans restructured by the CDR lenders, a total amount of `2,894.41 Crores would qualify for the conversion into 464.59 Crores shares at the sole discretion and on demand of the CDR lenders at a Price of ` 6.23 per equity share.

In terms of CDR scheme, the promoters brought into the company as unsecured loan a total amount to `167.06 Crores and the same would qualify for the conversion of shares at the sole discretion of the promoters.

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.

DIVIDEND

Your Directors have not recommended dividend for the year ended March 31, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement is enclosed as Annexure-1 to this Report.

SUBSIDIARY COMPANIES

During the reporting period, Lanco Hoskote Highway Limited and Lanco Devihalli Highways Limited had become subsidiaries of the Company. Further, Lanco Budhil Hydro Power Private Limited, SolarFi SP 07, SolarFi SP 06, Lanco Solar International Limited, Lanco Solar International GMBH, Lanco US PV Investments B.V., Lanco Solar Holdings LLC (USA), Lanco Virgin Islands- 1 LLC and Lanco SP PV 1 Investments B.V. had ceased to be Subsidiaries of the Company.

Policy for determining Material Subsidiaries of the Company has been provided in the following link:

http://www.lancogroup.com/pdf/Policy_on_Material_Subsidiaries.pdf

Report on the performance and financial position of each of the Subsidiaries, Associates and Joint Venture Companies has been provided in Form AOC-1.

INCREASE OF PAID-UP SHARE CAPITAL

On December 29, 2014, 5,45,74,639 (Five Crore Forty Five Lakhs Seventy Four Thousand Six Hundred and Thirty Nine only) Equity Shares of Face Value of `1/- each and on June 23, 2015, 2,17,72,493 (Two Crore Seventeen Lakhs Seventy Two Thousand Four Hundred and Ninety Three only) Equity Shares of Face Value of `1/- each were allotted at an Issue Price of `6.23 Per Equity Share (including `5.23 Per Equity Share towards Share Premium) to ICICI Bank Limited under the CDR Package approved for the Company.

In view of the above corporate actions, the Paid-up Capital of the Company increased from `240.78 Crores to `248.42 Crores as on June 30, 2015.

HEALTH, SAFETY AND ENVIRONMENT

Your Company has taken an integrated approach towards Health, Safety & Environment (HSE), based on various National & International standards. This helps us to achieve our goal of going beyond the legal compliance. We have implemented British 5 star Safety Programs. This has not only enhanced our reputation as a group but also set ourselves new standards in HSE. The entire leadership steadfastly supported this initiative and various sites personnel were instrumental in giving a perfect shape to this important initiative. We aim to be a global leader in environmental standards and practices.

All our Operational Power Plants, EPC Division, Lanco Hills and Lanco Solar are OHSAS-18001 & ISO-14001 certified.

Further details are provided in Management Discussion and Analysis section placed at Annexure-1 to this Report.

RISK MANAGEMENT POLICY

The Company had adopted the Standard Operating Procedures to standardise the Risk Management Process across all Business units in terms of process, formats, documentation, reporting, identification of elements of risk and monitoring Risk Mitigation plans, as part of the Risk Management Policy developed and implemented by the Company. Further details are provided in Management Discussion and Analysis section placed at Annexure-1 to this Report.

Boards’ Report

11

INTERNAL FINANCIAL CONTROLS

Your Company had put in place adequate Internal Financial Controls commensurate with the size of the Company with reference to the Financial Statements.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. L. Madhusudhan Rao and Mr. S. C. Manocha retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for appointment.

Mr. R. M. Premkumar and Mr. Prakash P. Mallya were appointed as Additional Directors in the Category of Independent Directors with effect from October 15, 2014.

Mr. Yashpal Gupta was appointed as Nominee Director of IDBI Bank Limited on behalf of the CDR Lenders, with effect from January 01, 2015.

Mr. D. L. Rawal and Mr. Gurbir Singh Sandhu were appointed as Additional Directors in the Category of Independent Directors and Smt. L. Ramalakshmamma was appointed as Additional Director in the category of Woman Director, with effect from March 28, 2015.

Mr. Vijoy Kumar and Mr. Pawan Chopra were appointed as Additional Directors in the Category of Independent Directors with effect from June 23, 2015.

The Independent Directors have given a declaration to the Company under Section 149(7) of the Companies Act, 2013 and Clause 49 of the Listing Agreement regarding meeting the criteria of independence prescribed under Section 149(6) of the Companies Act, 2013.

Mr. Prakash P. Mallya and Mr. P. Abraham resigned as Directors of the Company with effect from March 28, 2015 and April 01, 2015 respectively. Your Directors place on record their appreciations for the valuable contribution by Mr. Prakash P. Mallya and Mr. P. Abraham during their tenure as Directors.

During the reporting period, Mr. G. Venkatesh Babu, Managing Director, Mr. T. Adi Babu, Chief Financial Officer and Mr. A. Veerendra Kumar, Company Secretary were designated/appointed as Key Managerial Personnel (KMP) of your Company.

Your Company is awaiting approval from the Central Government regarding the payment of remuneration to Mr. L. Madhusudhan Rao, Executive Chairman and Mr. G. Bhaskara Rao, Executive Vice-Chairman, Promoter Directors of the Company from April 01, 2014 till March 31, 2016.

During the financial year 2014-15, 5 (five) Board Meetings were held. These meetings were held on May 23, 2014, August 14, 2014, September 26, 2014, November 14, 2014 and February 12, 2015.

The Nomination and Remuneration Committee had devised the criteria and the process for performance evaluation of the non-Independent Directors, the Board as a whole and its Committees.

A separate meeting of Independent Directors was held on February 12, 2015 without the presence of non-Independent Directors and members of the management.

The details of Familiarization Programme for Independent Directors of the Company is disclosed on the Company’s website. Members can access the details of Familiarization Programme on the website of the Company at

http://www.lancogroup.com/pdf/Familiarization_Programme_for_Independent_Directors.pdf

COMPANY’S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Committee had recommended to the Board a Policy relating to the Appointment and Remuneration of Directors, Key Managerial Personnel and other Employees. The Nomination and Remuneration Policy forms part of this Report as Annexure-2.

CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT PERSONNEL

The Board has laid down separate Code of Conduct for Directors and Senior Management Personnel of the Company and the same is posted on the Company’s Website. All Directors and Senior Management Personnel have affirmed compliance with the Code of Conduct. The Managing Director has also confirmed and certified the same. The certification forms part of the Report on Corporate Governance.

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of The Companies (Accounts) Rules, 2014, is as below:

Conservation of Energy and Technology Absorption

New technologies were planned and implemented with a two pronged strategy of achieving operational excellence and environment & energy conservation.

Some of the measures and technologies worth highlighting were:

(i) Selection of equipment that consume minimum energy and adoption of integrated energy management system to measure, monitor and take corrective action for minimizing auxiliary power consumption.

(ii) Adoption of suitable conveyor technologies for cross country coal conveying using pipe conveyor, combination of tripper conveyors & reclaim conveyor in stockyard and adoption of coal shed in the stockyard to avoid coal dust pollution.

(iii) Ash utilization in earth filling.

(iv) Adoption of sub-sea marine pipeline instead of overhead pipelines/ jetty structures, velocity caps for intake facility to avoid impact on marine environment.

(v) Adoption of best practices in project management with the help of reputed consultants for efficient project delivery.

(vi) Improved fire safety by adopting simple methods of increased gravel fill in oil collection pits in transformer yards and cables supported on isolated structures in coal handling plants.

(vii) Adoption of zero liquid discharge schemes to prevent water pollution.

(viii) Electro chlorination instead of gas chlorination to avoid hazards while handling chlorine containers.


12

Foreign Exchange Earnings and Outgo:

(` in Crores)

Particulars Year ended March 31, 2015

Foreign Exchange Earnings 18.28

Foreign Exchange outgo 15.73

DISCLOSURE ON COMPANY’S EMPLOYEES STOCK OPTION PLANS

The Employees Stock Option Plan - 2006 and the Employees Stock Option Plan–2010 were approved by members by passing Special Resolutions in the Extraordinary General Meeting held on June 07, 2006 and Annual General Meeting held on July 31, 2010, respectively.

There were no grants made under the Employees Stock Option Plans of the Company during the Financial Year 2014-15.

The required information pursuant to SEBI ESOP Guidelines is enclosed as Annexure-3 to this Report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

As required under Section 197 (12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of the remuneration drawn by the employees in excess of the limits prescribed, forms part of this report.

Pursuant to Section 136 of the Companies Act, 2013, the Annual Report is being sent to the members after excluding the aforesaid details. The same is available for inspection at the Registered Office of the Company during office hours and any member desirous of the said information may write to the Company Secretary at the Registered Office of the Company.

Disclosure of the information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report as Annexure-4.

RELATED PARTY TRANSACTIONS

In line with the requirements of the Companies Act, 2013 and the Listing Agreement, the Company has formulated a ‘Policy on Related Party Transactions’ and the same is uploaded on the Company’s website at http://www.lancogroup.com/pdf/Policy_on_Related_Party_Transactions.pdf

Details of Related Party Transactions as per Form AOC-2 is Nil for the Company during the reporting period.

DEPOSITS

During the year under review, your Company has not accepted deposits from Public.

LOANS, GUARANTEES, SECURITIES AND INVESTMENTS

The granting of loans and giving of guarantee and providing of security by your Company is exempted in terms of Section 186(11)(a) of the Companies Act, 2013, as the Company is providing infrastructural facilities specified in Schedule VI of the Companies Act, 2013. The details of Investments forms part of the Schedules to the Financial Statements.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 of the Companies Act, 2013 and Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in Form MGT-9, provided as Annexure-5 to this Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the reporting year, the Board had constituted the CSR Committee with Dr. Uddesh Kumar Kohli, Independent Director, Mr. R.M. Premkumar, Independent Director, Mr. G. Bhaskara Rao, Executive Vice-Chairman and Mr. G. Venkatesh Babu Managing Director as its Members. Dr. Uddesh Kumar Kohli, Independent Director is the Chairman of the CSR Committee.

Members can access the CSR Policy on the website of the Company at http://www.lancogroup.com/pdf/LITL_CSR_Policy.pdf.

There are no average net profits for the Company made during the previous three financial years. Hence, there is no requirement of spending specific funds towards CSR activities by the Company during the year under review.

Details of CSR activities by the group companies is included in Management Discussion and Analysis section as Annexure - 1 to this report.

AUDITORS

The Members are requested to ratify the appointment of Brahmayya & Co., Chartered Accountants, (Firm Registration No. 000511S) as Auditors of the Company for the Financial Year 2015-16 as per item No.4 of the Notice.

COST AUDITORS

DZR & Co., Cost and Management Accountants have been appointed as the Cost Auditors for the year ending March 31, 2014. The Cost Audit Report for the year ended March 31, 2014 was due for filing on September 30, 2014 and was filed on September 24, 2014.

DZR & Co., have been appointed as Cost Auditors of the Company for the Financial Year 2014-15 and Financial Year 2015-16, based on the recommendation of Audit Committee.

SECRETARIAL AUDIT REPORT

M/s. dvmgopal & associates, Company Secretaries, were appointed as Secretarial Auditors to conduct Secretarial Audit of records and documents of the Company for the Financial Year 2014-15. The Secretarial Audit Report is given as Annexure-6 to this Report.

Boards’ Report

13

CORPORATE GOVERNANCE

In compliance with the conditions of Corporate Governance, pursuant to Clause 49 of the Listing Agreements with Stock Exchanges, the Report on Corporate Governance with the Certificate from a Practicing Company Secretary certifying compliance in this regard forms part of this Report as Annexure-7.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

With a view to implement the highest ethical standards in the course of business, the Company has formed and adopted a whistle blower policy which provides a platform for reporting concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. Directors, employees, vendors or any person having dealings with the Company may report non-compliance to the Chairperson of Audit Committee, who reviews the report. Confidentiality is maintained of such reporting and it is ensured that the whistle blowers are not subjected to any discrimination.

POLICY ON PREVENTION OF SEXUAL HARASSMENT AGAINST WOMEN AT WORKPLACE OF THE COMPANY

Pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, your Company had adopted the “Policy on Prevention of Sexual Harassment against Women at workplace” inter alia to seek to protect women from sexual harassment at their place of work.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required by Section 134(5) of the Companies Act, 2013, your Directors hereby confirm that:

(a). In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed and that no material departures are made from the same;

(b). The Company have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2014-15 and of the profit and loss of the Company for that period;

(c). The Company have taken proper and sufficient care 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 Company had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively and

(f ). The Company have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INFORMATION ON AUDITORS’ QUALIFICATIONS:

The information and explanations of your Directors on the qualifications by the Auditors on the Consolidated Financial Statements are as follows:

• Qualification on Capitalization of Borrowing cost by step down subsidiary:

The step down subsidiary is implementing gas based power project expansion which is yet to complete commissioning activities due to non-availability of required resources and fuel which are beyond the control of Lanco Kondapalli Power Limited (LKPL). The activities are still not completed to test for capability and suitability of its intended use of the plant. Therefore the asset is eligible to capitalise its borrowing costs till the completion of required commissioning activities. The lenders of the project approved the above interest during construction as a part of the project cost. LKPL has re approached Ministry of Corporate Affairs (MCA) to seek clarification on the applicability of provisions of Accounting Standard 16 to continue the capitalisation of borrowing costs. The management is of the view that the interest capitalization is as per Accounting Standard 16.

• Qualification on Unaudited financials of SPV’s in Consolidation:

The qualification by the Auditor is not about deviation from the Accounting Standards but on the consolidation of the un-audited financials of some of the foreign subsidiary companies as on the reporting date. During the year ended March 31, 2015, some of the foreign subsidiaries could not complete the audit of their financial statements, on or before the reporting date, hence the financial statements prepared by the Management have been considered in consolidation.

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors take this opportunity to thank all the stakeholders including Shareholders, Financial Institutions, Banks, Customers, Suppliers, Service Providers and Regulatory and Governmental Authorities for their consistent co-operation. Your Directors also wish to place on record the sincere appreciation of the hard work, dedication and commitment of Employees at all levels. We look forward to your continued support in the future.

For and on behalf of the Board

L. Madhusudhan Rao G. Venkatesh BabuExecutive Chairman Managing DirectorDIN - 00074790 DIN - 00075079

Place: GurgaonDate: July 29, 2015


14

MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC REVIEW

Global: The world economic activity in 2014 continued to suffer from the after effects of the financial and euro area crises. The year also witnessed two other major phenomenon, namelya sharp decline in the price of crude oil and coal along with significant exchange rate movements. The Global economy is projected to grow at 3.5 percent in 2015 and 3.8 percent in 2016. World GDP grew at a pace of 3.4% in 2014. Growth in the Emerging Market and Developing Economies is expected to be at 4.3% in 2015 as against 4.6% in 2014. In advanced economies, growth is expected to increase to 2.4% vis-à-vis 1.8% in 2014.

GDP Growth Rates (%)

Country 2015 (E) 2014 2013USA 3.1 2.4 2.2UK 2.7 2.6 1.7China 6.8 7.4 7.8Japan 1.0 -0.1 1.6Euro Area 1.5 0.9 -0.5World 3.5 3.4 3.4

(Source: World Economic Outlook, IMF April 2015)

India:

India’s GDP grew at a rate of 7.3% during the year 2014-15, marginally higher that the 6.9% recorded in 2013-14. Real GDP for 2014-15 is estimated to be at ` 106.44 lakh Cr. Weak performance of the agriculture sector because of a poor monsoon affected the overall growth for the year. Agriculture, forestry and fishing sector grew at a pace of 0.2% for the year whilst ‘Mining and Quarring’ grew at 2.4%. Construction sector grew at pace of 4.8% in 2014-15 while Services grew at 10.1% for the year.

Annual Growth Rates (%) FY15 FY141. Agriculture, forestry and fishing 0.2 3.42. Mining and quarrying 2.4 5.43. Power, water etc. 7.9 4.84. Manufacturing 7.1 5.35. Construction 4.8 2.56. Services 10.1 9.1Gross Domestic Product 7.3 6.9

(Source: Central Statistical Organisation, India)

COMPANY REVIEW

Lanco Infratech Limited (Lanco) is amongst the leading private independent power producers in the country with an installed generating capacity of 4,660 MW with a diversified portfolio of assets. The company possessesmore than 25 yearsof experience in the fields of Engineering, Procurement and Construction (EPC), Power, Solar, Natural Resources and Infrastructure.

Installed Power Capacity

Power Capacities under Construction

Power Capacities under

Development4,660 MW* 4,636 MW 5,580 MW

*As at 31st March 2015, Including Udupi 1200 MW and Kondapalli III 742 MW getting ready for operations.

The infrastructure sector in the country has witnessed a continued slowdown and Lanco being amongst the country’sbiggest players in the infrastructure sector, too got affected by the declining level of activity in the sector. During the year 2013-14, Lanco Infratech Limitedhad initiated the process of Corporate Debt Restructuring (CDR) for the Standalone Company. In line with the company’s commitment of reducing consolidated debt and reviving the EPC activity, Lanco has concluded in April 2015 one of the biggest power sector transactions by divesting 100% stake in its 1200 MW Udupi thermal power project. The sale proceeds have helped in reducing company’s consolidated debt position and will help in infusing required equity for the company’s under construction projects. In addition, the company also sold its 70 MW Budhil project during FY15.

The company has successfully secured lender’s approval of cost overrun proposals of it’s under construction projects. With this, the company is confident of installing additional Coal fired generation capacity of 3,960 MW in near future. With improving macro-economic environment and Power sector in specific, the company is expected to have a consolidated operating power capacity of more than 8000 MW by FY 18.

Keeping in view the Government of India’s huge impetus for renewable energy and particularly Solar power in the country, Lanco’s presence in Solar sector especially in the EPC domain has good growth potential. The company plans to actively participate in the upcoming Solar EPC bids. Lanco is one of the large solar EPC players in the country.

Lanco’s Kondapalli gas fired project (1,108 MW) has been amongst the successful bidders in the gas pooling bids called by the Government for the first phase of the scheme of 4 months starting June 2015, Kondapalli will receive Power System Development Fund (PSDF) support to the extent of `1.42/unit, while operating at 35% PLF.

As of March 31, 2015, Lanco Infratech’s EPC order book including Solar EPC stood at a healthy `28,063 Cr. With cost overrun approvals in place and expediting project execution schedules, the company is confident of executing most of the order book over the next three years. This will significantly help in increasing the company’s standalone EPC and construction revenues. The company is also making continued efforts to secure new EPC orders from various external clients.

INDUSTRY REVIEW – DEVELOPMENTS AND OUTLOOK

POWER

The total installed generation capacity in India (not including captive generation) as of end FY15 stood at 267.64 GW. Out of the total installed generating capacity, 61.5% was coal based, 15.4% was hydro and 8.6% was gas based.

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15

Annexure – 1

All India Installed Generation Capacity (As on 31-03-2015)

Thermal Nuclear Hydro Res GrandCoal Gas Diesel Total Total

MW 1,64,636 23,062 1,200 1,88,898 5,780 41,267 31,692 2,67,637Percentage 61.5 8.6 0.4 70.6 2.2 15.4 11.8 100.0

(Source: CEA)

The total electricity generation in India during FY15 was at 1048.40 Billion Units (BUs) versus 966.38 BUs in FY14, an increase of 8.40% YoY.

Electricity Generation during April 2014 to March 2015 (BU)

Type FY 15 FY 14 % ChangeThermal 878 792 11Hydro 129 135 -4Nuclear 36 34 5Bhutan Import 5 6 -11All India 1048 967 8

(Source: CEA)

The generating capacity addition during 2014-15 stood at 22,566 MW as against 17,825 MW in 2013-14, anincrease of 27% YoY.

Generation Capacity Addition during FY15 (MW)

Type FY 15 FY 14 % ChangeThermal 20,830 16,767 24Hydro 736 1,058 -30Nuclear 1,000 0 NAAll India 22,566 17,825 27

(Source: CEA)

All India Installed Generation Capacity (MW) – Region Wise (As on 31-03-2015)Region Thermal Nuclear Hydro Resources Grand

Coal Gas Diesel Total Total Northern 39,844 5,331 13 45,188 1,620 17,067 5,936 69,810

Western 65,807 10,915 17 76,740 1,840 7,448 11,271 97,298

Southern 30,343 4,963 939 36,245 2,320 11,398 13,785 63,747

Eastern 28,583 190 17 28,790 0 4,113 433 33,336

North-East 60 1,663 143 1,865 0 1,242 257 3,364

Islands 0 0 70 70 0 0 11 81

All India 1,64,636 23,062 1,200 1,88,898 5,780 41,267 31,692 2,67,637

(Source: CEA)

The western region has the highest installed capacity with 36% of the nation’s total installed capacity followed by the northern region at 26% of the total installed capacity.

All India Installed Generation Capacity (MW) – Sector Wise (As on 31-03-2015)Sector Thermal Nuclear Hydro RES Grand

Coal Gas Diesel Total Total Central 48,130 7,520 0 55,650 5,780 11,091 0 72,521

State 58,101 6,974 603 65,678 27,482 3,804 96,963

Private 58,405 8,568 597 67,571 2,694 27,888 98,153

All India 1,64,636 23,062 1,200 1,88,898 5,780 41,267 31,692 2,67,637

(Source: CEA)

The share of the private sector in the total installed capacity is the highest at 37% followed by thestates at 36%.


16

Capacity Addition Targets in the 12th PlanMW

Type/Sector Central State Private TotalThermal 14,878 13,922 43,540 72,340

Hydro 6,004 1,608 3,285 10,897

Nuclear 5,300 0 0 5,300

Total 26,182 15,530 46,825 88,537

(Source: CEA)

The 12th plan targets a capacity addition of 88,537 MW with 53% of the capacity being added by the private sector.

Achievements up to March 2015 during the 12th PlanMW

Type/Sector Central State Private TotalThermal 9343 12,119 36,258 57,719

Hydro 2,024 102 169 2,295

Nuclear 1,000 0 0 1,000

Total 12,367 12,221 36,427 61,014

Achievement % 47 79 78 69

(Source: CEA)

All India yearly Coal Consumption for Power Generation (Utilities)

Year Coal Consumption MT2014-15 531

2013-14 489

2012-13 455

2011-12 418

2010-11 387

2009-10 367

(Source: CEA)

All India Annual per Capita consumption of Electricity

Year Per Capital consumption (kwh)2013-14 957

2012-13 914

2011-12 884

2010-11 819

2009-10 779

2008-09 734

(Source: CEA)

Transmission Lines added during April 2014to March 2015 (ckms)

Voltage Level FY15 FY14

+/- 500 KV HVDC 0 0

765 KV 7,548 4,637

400 KV 9,992 7,777

220 KV 4,561 4,334

All India 22,101 16,748

(Source: CEA)

All India Transformation Capacity Addition during April 2014to March 2015 (MVA)

Voltage Level FY 15 FY 14+/- 500 KV HVDC 0 0765 KV 38,500 34,000400 KV 14,970 9,630220 KV 12,084 13,700All India 65,554 57,330

(Source: CEA)

OUTLOOK

Out of the 12th plan target capacity addition of 88,537 MW, 53% of the capacity is estimated to be added by the private sector. As of March 2015, the share of the private sector in the total installed power generating capacity in the country is the highest at 37% followed by the states at 36%. Although the sector is going through challenging times, several measures such as structural reforms in domestic fuel availability have been taken by the Government to alleviate the concerns that are hampering the growth of the sector. The year ending March 2015 witnessed the highest ever generation capacity addition at 22,566 MW. Peak deficit was also reduced to the lowest ever level of 3.6%. The year also saw the highest ever increase in transmission lines at 22,100 ckm and the highest coal production growth in 23 years at 8.3%.

Some of the initiatives recently taken to address the issues hampering the sector are:

1. Coal E-Auction and Allotment- Following the cancellation of 204 coal blocks by the Supreme Court, the government implemented an e-auction process to award coal blocks. During the year 29 coal blocks were auctioned and 38 coal blocks were allotted to States/PSUs. The government aims to double coal production in the country to 100 Cr Tonnes by 2020.

2. Scheme for supply of imported RLNG for gas based plants- During the year the government also introduced a scheme to supply imported spot RLNG to the stranded gas based plants as well as plants receiving domestic gas upto a target PLF selected through a reverse e-bidding process. The scheme includes support from Power System Development Fund (PSDF). Lanco’s Kondapalli Gas fired project (1,108 MW) has been one among the successful bidders in the gas pooling bids called by the Government for the first phase of the scheme of 4 months starting June 2015. Kondapalli will receive PSDF support to the extent of `1.42/unit, while operating at 35% PLF. At the time when the scheme was introduced, 14,305 MW of gas based generating capacity was classified as Stranded gas based plants.

3. Reserves Bank of India’s 5/25 Scheme- The Central Bank has introduced a scheme for flexible refinancing of long term project loans to infrastructure and core industries. Infrastructure and core industry projects are characterised by large capital investments and long gestation periods. They face asset-liability mismatch issues as the repayment tenor

Boards’ Report

17

of their loans is much shorter than the period of cash flows that are generated by these assets over their economic life. To overcome this problem, the scheme has been introduced whereby banks can allow a longer amortisation period for loans to infrastructure projects (25 years) based on the remaining economic life of the asset.

Given the favourable demand supply dynamics, the outlook for the power sector is encouraging especially for the private developers.

SOLAR

The new government is providing additional thrust to the development of renewable energy in the country and India is currently running the largest renewable capacity expansion program in the world. The government plans to increase the overall renewable capacity target by more than 5 times from 32,000 MW to 1,75,000 MW by 2022, led by solar energy. By 2022, the government aims to have solar based capacity of ~1,00,000 MW. The year witnessed the highest ever increase in solar capacity of 1,112 MW translating to a 42% increase in solar capacity during 2014-15. The government is planning 25 solar parks each with a capacity of ~1,000 MW and 17 solar parks in 14 states have already been approved. Government owned NTPC has also come out with a tender to set up 2,170 MW of solar projects.

Program/Scheme wise progress in 2014-15

Sector Target AchievementGrid Interactive Power (Capacities in MW)Solar Power 1,100 1,112Wind Power 2,000 2,312Small Hydro Power 250 252Bagasse Cogeneration 300 360Biomass Power & Gasification 100 45

(Source: Government of India, Ministry of New and Renewable Energy)

RESOURCES

The year witnessed the highest coal production growth in 23 years at 8.3%. The government plans to double Coal India’s production to 100 Cr. Tonnes/year by 2020 by enhancing exploration activities and improving evacuation facilities by investing in railway rakes, expediting railway lines and mechanisation. Coal generated power will continue to be the major source of energy for the nation. India has total coal reserves of 3,01,564 million tonnes (MTs) with proved coal reserves of 1,25,909 (MTs)and indicated reserves of 142506 MTs.

Cumulative geological resources of coal

Proved (MT)

Indicated (MT)

Inferred (MT)

Total (MT)

All India 1,25,909 1,42,506 33,149 3,01,564

(Source: Government of India, Ministry of Coal)

INFRASTRUCTURE

During the year 2014-15, 4340 Km of highways were constructed and 122 MTs in port capacity was added in ports. Lack of environment clearances, land acquisition issues and budget constraints were the

major issues hampering the growth of the infrastructure sector in the country. In 2015-16, the government plans to increase investment in infrastructure by `70,000 Cr including `14,031 Cr. for roads and `10,050 Cr for railways. Further, the government plans to set up National Investment and Infrastructure Fund (NIIF) to enhance the flow of equity to infrastructure projects and also introduce tax free infrastructure bonds.

Company Review: Operations

BUSINESS REVIEW

EPC*` Cr

Order Book as of end of Revenues EBIDTAMarch 2015 March 2014 FY 15 FY 14 FY 15 FY 14

28,063 26,178 1,316 2,368 (119) (393)

* Including Solar EPC

Lanco offers Engineering, Procurement and Construction services in the infrastructure business segments of power projects, transmission, transportation, industry and large scale building projects. The total EPC order book (including Power and Solar Projects) as at end FY15 stood at `281 billion. The solar EPC order book was `28 bn. Internal projects constitute ~81% of the company order book excluding solar EPC order book and 46% of the solar order book respectively.

For the year 2014-15, revenue for the EPC division was ` 1,316 Cr and EBITDA was ` -119Cr. The revenue for the year was down 44% YoY primarily due to start up works and finishing works in the external projects which are normally less in value compared to the rest of the project period and lower execution of internal order book. Lower than optimal revenue led to lower recovery of fixed costs affecting the EBITDA margins.

MAJOR EPC PROJECTS UNDER EXECUTION

EXTERNAL

• EPC of 2x600 MW Annupur Thermal Power Project for Moser Baer

• BOP of 3x660 MW Koradi Thermal Power Project for Mahagenco

• EPC 1X660 MW Supercritical Ennore Thermal Power Station Expansion Project from TANGEDCO

INTERNAL

• 2x660 MW Amarkantak Thermal Power Project

• 2x660 MW Vidarbha Thermal Power Project

• 2x660 MW Babandh Thermal Power Project

• 500 MW of Teesta Hydro Power Project

• 76 MW MandakiniHydro Power Project

KEY DEVELOPMENTS IN 2014-15

Lanco successfully secured lender’s approval of cost overrun proposals of it’s under construction projects during the year. With this, the company is confident of reviving the EPC activity and installing additional Coal fired generation capacity of 3,960 MW in near future. With renewed commissioning schedule of the under


18

construction capacity, the company aims to have a consolidated operating capacity of more than 8000 MW by FY18.

POWER*

Lanco Infratech is one of the leading independent private producers in the country with an installed capacity 4,660 MW (including Udupi 1200 MW) and the capacity under construction of 4,636 MW. Lanco has concluded in April 2015 one of the biggest power sector transactions by divesting 100% stake in its 1200 MW Udupi thermal power project. In addition, the company also sold its 70 MW Budhil project during FY15.

Installed Power Capacity as of end

Revenues EBIDTA

March 2015

March 2014

FY 15 FY14 FY 15 FY14

3,918 MW**

3,988 MW

` 7,525 Cr

` 7,561 Cr

` 2,422 Cr

` 2,318 Cr

* Including Solar

**742 MW Kondapalli Phase 3 getting ready for operations. Includes Udupi 1200 MW

PERFORMANCE OF THE PROJECTS UNDER OPERATION

Kondapalli Phase-I – 368 MW

The gas based power station located in Andhra Pradesh with an installed capacity of 368MW has a long term Power Purchase Agreement(PPA) with Andhra Pradesh DISCOMS. Fixed charges are recoverable based on alternative fuel based availability under the PPA. The unit has tied up fuel supply arrangementswith GAIL. Performance of the plant during the year is as follows:

Gross generation (MUs) Plant Load Factor (PLF %)FY15 FY14 FY15 FY14577 1,441 18 45

Generation during the year compared to the previous year was lower by 60% due to non-supply of gas by GAIL because of fire incident in GAIL’s pipeline. The unit was however able to recover full fixed charge based on availability of natural gas and naphtha.

Kondapalli Phase-II – 366 MW

The gas based power station located in Andhra Pradesh has an installed capacity of 366MW and has tied up fuel supply with RIL (KG-D6). The generation for the year ended March 2015 was nil on account of non- supply of gas from KG-D6.

Kondapalli Phase-III- 742 MW

The 742 MW gas based unit could not get commissioned during the year due to non-supply of gas. However the phase II along with Phase III has been one amongst the successful bidders in the gas pooling bids called by the Government. For the first phase of the scheme for 4 months starting June 2015, Kondapalli II and III will receive Power System Development Fund (PSDF) support to the extent of ` 1.42/unit, while operating at 35% PLF.

Tanjore- 120 MW

Gas based power station located in Tamil Nadu with an installed capacity of 120MW. The plant has a long term PPA with Tamil Nadu with fuel supply arrangement with GAIL. Performance of the plant during the year is as follows-

Gross generation (MUs) Plant Load Factor (PLF %)FY15 FY14 FY 15 FY14

593 733 57 70

PLF is lower year on year due to short supply of gas by GAIL mainly due to pipeline repair activity.

Amarkantak Unit-I- 300 MW

Domestic coal based power station located in Chhattisgarh with an installed capacity of 300 MW. The unit supplies power under a long term PPA to Madhya Pradesh. The plant maintained an availability factor of 92% during the year. Performance of the plant during the year is as follows:

Gross generation (MUs) Plant Load Factor (PLF %)FY15 FY14 FY15 FY142,257 2,135 86 81

Amarkantak Unit-II- 300 MW

Domestic coal based power station unit located in Chhattisgarh withan installed capacity of 300MW. There was no generation during the year due to non-availability of linkage coal as well as regulatory issues. Unit-II PPA with PTC for supply of power to HPGCL (Haryana) was terminated for non-compliance of certain PPA covenants. The PPA is sub-judice and under litigation and the litigation hearings are currently being held.

Udupi- 1200 MW

Imported coal based power plant located in Karnataka having an installed capacity of 1200MW. The company has recently divested 100% stake in Udupi. Performance of the plant during the year is as follows-

Gross generation (MUs) Plant Load Factor (PLF%)FY15 FY14 FY15 FY146,417 6,806 61 65

PLF was lower year on year due to non-realisation of receivables in time and consequential delay in procurement of coal.

Anpara- 1200 MW

Located in Uttar Pradesh with an installed capacity of 1200MW, the unit has a long term PPA with Uttar Pradesh DISCOMS for 1100 MW of supply. During the year, the unit also supplied 100 MW of power to Tamil Nadu DISCOMS.Performance of the plant during the year is as follows:

Gross generation (MUs) Plant Load Factor (PLF %)FY15 FY14 FY15 FY148,341 6,919 79 66

The plant maintained an availability factor of 83% during the year. There has been improvement in PLF during the year 2014-15due to improvement in coal supplies and better operational performance.

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19

PROGRESS OF THE PROJECTS UNDER CONSTRUCTION (As at end March 2015)

Project Name Percentage Completion

(%)

Expected Commissioning

DateAmarkantak 3&4 (1320 MW) 67 FY17Vidarbha (1320 MW) 25 FY18Babandh (1320 MW) 33 FY18Kondapalli III (742 MW) 98 FY16Teesta (500 MW) 48 FY18PhataByung (76 MW) 47 FY18

SOLAR

Lanco Solarprovides solutions across the entire Solar Power Value Chain. The Company has knowledge and resources in managing theintegrated solar project development. As of end March 2015, the solar EPC order book was ₹ 2,791Cr with 54% of orders from external parties. The major solar plants under construction include Lanco’s 100 MW solar thermal power plant at Chinnu in Rajasthan. The order book also includes a 100 MW solar thermal power plant being developed by Lanco for KVK energy ventures private limited also at Chinnu in Rajasthan. The company is also setting up a fully-integrated manufacturing project for high-purity Polysilicon, silicon ingots/ wafers and modules in a SEZ facility at Chhattisgarh.

Performance of all solar generating capacity of 41 MW during the year is as follows:

Gross generation (MUs) Plant Load Factor (PLF %)FY15 FY14 FY15 FY14

64 60 18 17

RESOURCES

The Natural Resources business of the Lanco currently consists of the following assets:

1. Griffin Coal Mine

The Griffin Coal Mining Company Pty Ltd is based in Collie, Western Australia and is the largest individual supplier of coal to Western Australia’s industrial coal market.

Established in 1927, it is also Western Australia’s oldest coal company. Majority of the coal produced by Griffin is used as thermal coal, mostly in power stations. With coal resources of approximately 1.0billion tonnes, coal from Griffin caters to the export markets as well.Production at the mine during the year 2014-15 was2.39MT with sales of 2.44 MT. Production was less than optimal as the fall in international coal prices did not economically justify exporting a part of the production. Capacity enhancement program with capacity being raised from current to 15 MTPA is in the planning phase.

2. Tasra Open Cast Project

Tasra Opencast coal project (Tasra OCP) was awarded in a competitive bid to Lanco by Steel Authority of India Limited (SAIL) for Mine Development and Operations. The project includes setting up of 4 MTPA mine infrastructure, 3.5 MTPA

Washery and a captive power plant (CPP) of 300 MW capacity based on the secondary coal from the Washery. Tasra OCP was allocated to SAIL for captive use and detailed exploration of mine has been completed by MECL and CMPDI (Govt. of India enterprise) and estimated extractable coking coal reserves are around 100 million tons. The project is located in well-established Jharia coal-fields region of District Dhandbad, Jharkhand and has a life span of around 28 years. Captive Power Project of 300 MW capacity will be setup under a JV company between Lanco (74%) and SAIL (26%). With this project, Lanco as MDO will develop and operate 4 MTPA coal production capacity, 3.5 MTPA washery capacity, and add around 300 MW of coal based power capacity to its existing business portfolio.

INFRASTRUCTURE

ROADS:

The road portfolio of the company currently consists of the following assets:

Project Status82 km Neelamangla Junction (Bangalore) – Devihalli (NH-48)

Operational; Collected ₹ 47 Cr in toll revenue during the year FY15

81 Km of Mulbagal – Hoskote – Bangalore (NH-4)

Operational; Collected ₹ 58Cr in toll revenue during the year FY15

REAL ESTATE

Lanco Hills is the group’s lone foray into property development. Located in the Cyberabad area of Hyderabad, the project comprises of residential space, office space, IT SEZ, retail and hospitality space. Spread over a land parcel of 100 acres, it is one of the Country’s largest single phase development projects. During the year 2014-15, revenue from operations was ₹ 75Cr.

CONSOLIDATED FINANCIAL REVIEW

SEGMENT REVIEW

REVENUES

(₹ Cr)Segment Revenue

FY15 Contribution to Total

Revenues

FY14 Contribution to Total

Revenues

YoY growth

(%)(a) EPC &

Construction*1,316 14% 2,368 22% -44%

(b) Power* 7,525 78% 7,561 69% 0%(c) Property

Development79 1% 196 2% -60%

(d) Infrastructure 105 1% 0 0% 100%(e) Resources 566 6% 681 6% -17%(f ) Unallocated 47 0% 93 1% -49%Total 9,639 100% 10,899 100 -12%Less: Inter Segment Revenue

171 277 -38%

Net Sales/Income from Operations

9,468 10,622 -11%

* Including Solar


20

The macro-economic challenges for the power and infrastructure sectors at the Country level affected the consolidated performance of the company for the FY 2015 also. Lanco Infratech’s total segmental revenue (post elimination of inter-segment revenue) decreased by 11% during 2014-15. This was primarily due to fall in EPC and Construction revenues, resources revenue and property development revenue. The share of the power segment in the total revenue before inter segment revenue in FY15 was 78% vis-à-vis 69% in FY14. The share of EPC and Construction segment in the total revenue declined to 14% in FY15 against 22% in FY14. Prior to elimination, the revenue for 2013-14 decreased by 12%. The property development segment witnessed a 60% drop in revenue for 2014-15. Resources sector revenue witnessed a year on year decline of 17% for the year 2014-15.

SEGMENT PROFITS

(₹ Cr)

Segment Results (Profit(+) / Loss (-) before tax and interest from each segment)

FY15 FY14 YoY growth

(%)

(a) EPC & Construction* -227 -497 54%

(b) Power* 1,562 1,411 11%

(C) Property Development 12 16 -25%

(d) Infrastructure 22 0 100%

(e) Resources -692 -556 -24%

(f ) Unallocated -19 -44 56%

Total 658 330 100%

Less: Inter Segment Profit on transactions with

Subsidiaries -19 -15 -27%

Total 676 345 96%

* Including Solar

Consolidated segmental profit before interest and taxes and before elimination of inter-segment profit on transactions with subsidiaries increased by 100% in FY15 against FY14. The loss from the EPC & Construction segment decreased by 54% year on year and was the primary reason for the consolidated profit being higher. Power segment profit increased by 11% for the year. The segmental profit after elimination of inter segment profit on transactions with subsidiaries increased by 96% during the year.

FINANCIAL REVIEWPRINCIPLES OF CONSOLIDATION

The financial statements of the Company and its subsidiaries have been consolidated on a line by line basis. This is done by adding together the book values of like items of assets, liabilities, income and expenses and after eliminating intra-group balances, transactions and the unrealized profits/losses on intra-group transactions. Unrealised losses resulting from intragroup transactions are eliminated to the extent that cost can be recovered.

The consolidated financial statements are drawn up by using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible in the same manner as the Company’s individual financial statements.

The financial statements of the subsidiaries are consolidated from the date on which effective control is transferred to the company, till the date such control exists. The difference between the cost of investments in subsidiaries over the book value of subsidiaries’ net assets on the date of acquisition is recognized as goodwill or capital reserve in the consolidated financial statements.

Equity method of accounting is followed for investments in Associates in accordance with Accounting Standard (AS) 23 – Accounting for Investments in Associates in Consolidated Financial Statements, wherein goodwill / capital reserve arising at the time of acquisition and share of profit or losses after the date of acquisition are included in carrying amount of investment in associates.

Unrealized profits and losses resulting from transactions between the company and associates are also eliminated to the extent of company’s interest in the associate. Unrealised losses resulting from transactions between the company and its associates are also eliminated, unless the cost cannot be recovered. Investments in associates, made for temporary purposes, are not considered for consolidation and are accounted for as investments.

Putting it simply, while consolidating the subsidiary company, the elimination takes place at the top line where the entire amount of revenue and expenditure is eliminated. In the case of associate consolidation, the entire revenue is recognised. But the profit or loss earned from the associate is eliminated proportionately to the holding in the associate. This adjustment is for the profit and loss account. For adjustment to the balance sheet in case of subsidiaries, the amount equal to profit or loss eliminated will be net off against fixed assets. In the case of associates, it will be net off against investments. Essentially, it is an adjustment which does not impact the cash flow.

ANALYSIS OF PROFIT AND LOSS ACCOUNT

(₹Cr)

Particulars FY15 FY14 YoY growth %1 (a) Income from operations 9,094 10,103 -10%

(b) Income from power trading 391 539 -27%

(c) Other operating income 57 66 -13%

Total income from operations (Gross) 9,543 10,707 -11%

Less: Elimination of intersegment operating income 171 277 -38%

Total income from operations (Net) 9,372 10,430 -10%

Boards’ Report

21

(₹Cr)

Particulars FY15 FY14 YoY growth %2 Expenses (a) Cost of materials consumed 5,051 6,336 -20%

(b) Purchase of traded goods 385 530 -27%

(c) Subcontract cost 261 169 54%

(d) Construction, transmission, site and mining expenses 1,026 1,061 -3%

(e) Change in inventories of finished goods and work in progress -140 -151 8%

(f ) Employee benefits expense 351 385 -9%

(g) Depreciation & amortisation expenses 1,114 1,172 -5%

(h) Other expenses 263 225 17%

Total expenses 8,312 9,727 -15%

3 Profit / (loss) from operations before other income, foreign exchange fluctuations, finance costs, prior period items & exceptional items (1-2)

1,060 703 51%

4 Other income 139 168 -17%

5 Add: Eliminated profit on transactions with subsidiaries -19 -15 23%

6 Profit / (loss) from ordinary activities before foreign exchange fluctuations, finance costs, prior period items & exceptional items plus elimination (3+4+5)

1,180 856 38%

7 (Gain) / loss on foreign exchange fluctuations (Net) 480 371 29%

8 Finance costs 3,060 2,762 11%

9 Profit / (loss) from ordinary activities after finance costs but before prior period items & exceptional Items plus elimination (6-7-8)

-2,360 -2,277 4%

10 Exceptional items 123 -179 169%

11 Profit / (loss) from ordinary activities before tax, prior period items plus elimination (9+10)

-2,237 -2,456 9%

12 Tax expense -117 -129 -10%

13 Net profit / (loss) from ordinary activities after tax but before prior period items plus elimination (11-12)

-2,120 -2,327 9%

14 Extraordinary Item (net of tax expense) 0 0

15 Net profit / (loss) for the period before prior period items plus elimination (13+14) -2,120 -2,327 9%

Less : Prior Period Items 43 44 -2%

16 Net profit / (loss) for the period plus elimination -2,162 -2,371 9%

Less : Minority interest -100 -116 -13%

Add: Share of profit / (loss) of associates -3 -34 91%

17 Net profit / (loss) for the period plus elimination after Minority and share profit / (loss) of associates

-2,065 -2,289 10%

18 Less: elimination of profit on transactions with subsidiaries and associates -28 -15 -90%

19 Net profit / (loss) after taxes, minority interest and share of profits / (loss) of associates (17-18)

-2,037 -2,274 10%

20 Cash profit (17 + 2(g) + deferred tax – MAT credit + forex loss- forex gain) -506 -743 32%

21 Profit (+) / Loss (-) from ordinary activities before tax (11 – 5) -2,218 -2,441 9%

l Gross Revenue before eliminations (including other income) declined by 11% YoY to ₹ 9,682Cr in FY15 from ₹ 10,875Cr in FY14

l Reported loss of ₹ 2,037 Cr in FY15 vs. loss of ₹ 2,274 Cr in FY14

l Forex loss of ₹ 480Crin FY15 vs. Forex loss of ₹ 371Cr in FY14

On a consolidated basis the company incurred a loss of ₹ 2,037Cr and a cash loss ₹ 506 Cr for the year, due to continued macro-economic challenges on the power and infrastructure sectors. The performance of Lanco’s gas based power plant at Kondapalli was affected due to non-supply of gas. One unit of Lanco Amarkantak (300MW thermal plant) could not operate due to regulatory issues and coal supply issues. Griffin coal mine performance was affected due to higher costs and falling in international coal prices.


22

REVENUES FROM OPERATIONS

(₹ Cr)

FY15 FY14 YoY Growth %

Contract Operations 1,170 2,097 -44% Property Development 69 193 -64%Toll Collections 105 0 100% Management Consultancy 0 3 -100% Operations and Maintenance 8 5 60% Electrical Energy 7,433 7,405 0% Coal 546 679 -20% Other Goods 25 36 -31% Income from Lease Rentals 7 2 250% Other Operating Income 10 11 -9% Net Revenue from Operations 9,372 10,430 -10%

Other Income

Other income for FY15decreased by 17% over FY14 led primarily by adecrease in interest income.

(₹ Cr)


Interest Income 90 144 -38%Dividend Income 4 1 300%Net Gain on sale of investments 0 0 Other Non-Operating Income 45 22 105%Total 139 168 -17%

EXPENDITURE

There was a 16% decline in total expenditure for the year 2014-15.

(₹ Cr)

EXPENSES FY15 % of Total FY15

Expenses

FY14 % of Total FY14

Expenses

YoY Growth

%Cost of Materials Consumed

5,051 70% 6,336 74% -20%

Purchase of Traded Goods

385 5% 530 6% -27%

Subcontract Cost 261 4% 169 2% 54%Construction, Transmission, Site and Mining Expenses

1,026 14% 1,061 12% -3%

(Increase) / Decrease in Inventories of Finished Goods and Construction / Development Work in Progress

-140 -2% -151 -2% -8%

Sub-Total 6,583 7,945 -4%Employee Benefits Expenses

351 5% 385 5% -9%

Other Expenses 263 4% 225 3% 17%Total Expenses 7,198 8,555 -16%

COST OF MATERIAL CONSUMED

The total cost of material decreased by 20% during 2014 – 15.

EMPLOYEE BENEFITS EXPENSES

During the year 2014-15, employee benefits expenses decreased by 9% over the previous year on account of fall in the total number of employees in the group.

(₹ Cr)

FY15 % of Total

FY14 % of Total

YoY Growth

%Salaries, allowances and benefits to employees and ESOP

323 89% 359 90% -10%

Contribution to provident fund and other funds

17 5% 16 4% 6%

Recruitment, training and Staff welfare expenses

20 6% 24 6% -17%

360 399 -10% Less: Capitalized 9 14 -36% Total 351 385 -9%

OTHER EXPENSES

Other expenses increased by 25% compared with the previous year. Net loss on foreign exchange fluctuations for the year FY15 was ` 480 Cr compared with ` 371 Cr in FY14, an increase of 29%. Out of the total other expenses, net loss on foreign exchange fluctuations comprise 64% of the total. Consultancy and other professional charges increased by 59% year on year.

(₹ Cr)Particulars FY15 % of

TotalFY14 % of

TotalYoY

Growth %Rent 30 4% 43 7% -29%Rates and taxes 11 1% 15 2% -28%Donations 2 0% 3 1% -27%Corporate Social Responsibility Expenses

1 0% 0 0%

Repairs and Maintenance: Office Building 2 0% 0 0% Others 15 2% 5 1% 235%Marketing and selling expenses

3 0% 2 0% 30%

Office maintenance 8 1% 11 2% -24%Insurance 3 0% 6 1% -48%Printing and stationery 2 0% 3 0% -28%Consultancy and other professional charges

60 8% 38 6% 59%

Directors sitting fee 1 0% 1 0% 0%Electricity charges 4 1% 5 1% -7%Net Loss on Foreign Exchange Fluctuations

480 64% 371 61% 29%

Boards’ Report

23

(₹ Cr)Particulars FY15 % of

TotalFY14 % of

TotalYoY

Growth %Remuneration to auditors

4 0% 3 0% 30%

Travelling and conveyance

30 4% 37 6% -19%

Communication expenses

6 1% 7 1% -14%

Net Loss on Sale of fixed assets

31 4% 16 3% 100%

Provision for Advances / claims / debts

38 5% 15 2% 146%

Business Promotion & Advertisement

6 1% 5 1% 7%

Miscellaneous expenses 17 2% 23 4% -71%

754 100% 609 100% 26%

Less: Recovery of Common Expenses/Eliminations

10 12 -17%

Less: Transferred to Capitalised cost

1 2 -50%

Total 743 595 25%

FINANCE COST

Total Finance costs increased by 11% during the year due to higher financing and higher interest rate over previous year.

DEPRECIATION/AMORTISATION

Depreciation and amortisation expenses decreased by 5% for the year.

PROVISION FOR TAXATION

The overall tax reversal was less by 10% for the year compared to previous year due to lower differed tax reversed in the current year.

(₹ Cr)

FY15 FY14 YoY Growth

%Current Tax / Minimum Alternate Tax (MAT) Payable

16 38 -58%

Relating to Previous Years -46 9 -611%

Deferred Tax -87 -176 51%

Total Tax Expense -117 -129 -10%

SHARE OF PROFIT / LOSS OF ASSOCIATES

The share of loss of associates stood at ` 3 Cr against a loss of ` 34 Cr in the previous year.

SHARE OF MINORITY INTEREST

Share of minority interest represents the interest of minority shareholders in various companies. Share of minority interest in FY15 was a loss of ` 100 Cr against a loss of ` 116 Cr in FY14.

PROFIT AFTER TAX

Reported loss for the year 2014-15 was ` 2,037 Cr against a loss of ` 2,274 Cr in the previous year. Adjusted loss (Reported loss plus profit eliminated) for the year was ` 2,065 Cr against an adjusted loss of ` 2,289 Cr in the previous year.

CASH PROFIT

Cash profit is the profit the Company has earned after adjusting for non-cash expenditures like depreciation, forex gain/loss, deferred tax, MAT credit entitlement and adding eliminated profit. Cash loss for the year FY15 was ` 506 Cr versus a cash loss of ` 743 Cr in the previous year.

(₹ Cr)FY15 FY14 YoY

growth (%)

Reported PAT -2,037 -2,274 10%Add: Depreciation 1,114 1,172 -5%Add: Deferred Tax -87 -176 51%Add: Forex Loss / (Gain) 480 371 29%Add: Profit Eliminated -28 -15 87%Less: Exceptional item -52 -179 71%Cash Profit -506 -743 32%

ANALYSIS OF BALANCE SHEET

SOURCES OF FUND


Growth %

Shareholders' Funds Share Capital 245 239 2%Reserves and Surplus -693 1,218 -157%Minority Interest 1,339 837 60%Non–urrent Liabilities Long Term Borrowings 33,145 30,120 10%Deferred Tax Liabilities (net) 381 461 -17%Other Long Term Liabilities 2,987 3,071 -3%Long Term Provisions 707 703 1%Current Liabilities Short Term Borrowings 4,529 4,757 -5%Trade Payables 3,904 4,112 -5%Other Current Liabilities 6,045 5,130 18%Short Term Provisions 83 196 -58%TOTAL 52,673 50,844 4%

SHAREHOLDER’S FUND INCLUDING MINORITY INTEREST

Due to a reported loss for the full year, shareholders funds including minority interest for the year 2014-15 were ` 891 Cr against ` 2,295 Cr for the previous year.

NET WORTH

The net worth of the Company, as at March 31, 2015 and as at March 31, 2014, is as under:


24

(₹ Cr)FY 15 FY 14

1 Share Capital 245 2392 Reserves & Surplus -693 1,2183 Shareholders' Fund (1+2) -448 1,4584 Eliminated Profit on Transactions with

Subsidiaries and Associates 1,473 1,501

5 Shareholders' Fund plus Elimination (3+4) 1,025 2,9596 Minority Interest 1,339 8377 Networth plus Elimination (5+6) 2,364 3,796

BORROWINGSTotal Borrowings include Long Term, Short Term and Current Maturities of Long Term Borrowings. Total borrowings increased by 7% for the year while long term borrowings increased by 10%. There was a decrease of 5% in short term borrowings.


growth (%)

Long Term Borrowings 33,145 30,120 10%Current Maturities of Long Term Borrowings

1,517 1,828 -17%

Short Term Borrowings 4,529 4,757 -5%Total 39,191 36,705 7%

CURRENT LIABILITIES (EXCLUDING BORROWINGS)Current liabilities (excluding borrowings) increased by 12% during the year.


growth (%)

Current Liabilities as per Balance Sheet 14,561 14,195 3%Less: Short Term Borrowings 4,529 4,757 -5%Less: Current Maturities of Long Term Borrowings

1,517 1,828 -17%

Total 8,515 7,610 12%

APPLICATION OF FUNDS


Growth %Fixed Assets 37,252 35,789 4%Non-Current Investments 3,143 3,006 5%Deferred Tax Assets (net) 97 42 131%Long Term Loans and Advances 699 687 2%Other Non-Current Assets 1,021 842 21%Sub Total 42,212 40,366 5%Current Assets Current Investment 13 1 2,137%Inventories 3,320 3,121 6%Trade Receivables 3,354 3,959 -15%Cash and Bank Balances 808 579 40%Short Term Loans and Advances 2,360 2,474 -5%Other Current Assets 606 344 76%Sub Total 10,461 10,478 0%TOTAL 52,673 50,844 4%

FIXED ASSETS

Fixed assets of the company increased by 4% during the year.

INVESTMENTSTotal investments (current and non-current) increased by 5% during the year.


growth (%)

Non-Current Investments 3,145 3,006 5%Current Investment 13 1 1,200%Total 3,158 3,006 5%

CURRENT ASSETS (EXCLUDING INVESTMENTS)(₹ Cr)


Inventories 3,320 3,121 6%Trade Receivables 3,354 3,959 -15%Cash and Bank Balances 808 579 40%Short Term Loans and Advances 2,360 2,474 -5%Other Current Assets 606 344 76%Total 10,448 10,477 0%

Current assets (excluding current investments) remained at the same level at the end of the year. Trade receivables decreased by 15% during the year. As at March 31, 2015 the Group has receivables from various State Electricity Utility companies and other customers against sale of power aggregating to ` 2,627Cr (` 2,824Cr as at March 31, 2014). Cash and bank balance as at end FY15 was ` 808Cr compared to ` 579 Cr as at March 31, 2014.

LOANS AND ADVANCESLong term loans and advances increased by 2% during the year. Total advances declined by 3% during the year.


Growth %Long Term 699 687 2%Short Term 2,360 2,474 -5%Total 3,059 3,161 -3%

NET CURRENT ASSETS(₹ Cr)


Current Assets (excluding investments)

10,448 10,477 0%

Current Liabilities (excluding borrowings & current maturities)

8,515 7,610 12%

Net Current Assets 1,933 2,867 -33%Net Current Assets decreased by 33% compared to previous year due to increase of current creditors.

Boards’ Report

25

KEY FINANCIAL DATA OF MAJOR OPERATING COMPANIES

(₹ Cr)Particulars LITL Amarkantak Anpara Kondapalli Tanjore Udupi Griffin

ConsolHills NETS

Income Income 1,396 696 2,767 442 207 2,795 546 75 841Other Income 135 1 43 2 32 47 20 4 15Total 1,531 697 2,810 444 239 2,842 566 79 856Expenditure Construction/ Development/ Generation Expenses

1,329 433 1,929 395 176 1,649 657 48 837

Administrative and Other Expenses 126 36 26 11 4 32 481 15 6EBITDA 76 228 855 38 59 1,161 -572 16 13EBITDA to Total Income (%) 5 33 30 9 25 41 101 20 2Interest and Finance Charges 772 268 619 161 9 898 211 84 3Depreciation 121 151 246 67 22 325 119 3 0.34Exceptional item -100 -2 -1Profit before Tax -717 -171 -9 -188 28 -62 -902 -72 10Provision for Taxation - Current Tax - 6 - 2- Relating to piror year -45 -Minimum Alternate Tax Credit Entitlement - - - - - -0.37- Deferred Tax (Net) - -33 0.5 - - 0.43- Fringe Benefit Tax - - - - - - - - -Net Profit before prior period -672 -171 -9 -155 22 -62 -902 -72 8Prior period items -44 Net profit -672 -171 -9 -155 22 -62 -946 -72 8

RISKS AND MITIGATION

Lanco Infratech has significant presence in the verticals of Power, EPC, Natural Resources, Solar and Infrastructure. While operating such a large infrastructure business and operating at such a large scale, the company faces various macro-economic risks that are also dynamic in nature. The major risks that the company faces relate to interest rates, liquidity, inadequate fuel supply for operation of installed capacity, regulatory and statutory delays, lack of investor interest in the power sector for equity infusion into under construction projects,implementation delays foreign exchange fluctuation risks etc.,Risk mitigation and risk management practices are followed to overcome these risks. The areas of critical risks are regularly reviewed and monitored and necessary action is taken to mitigate their effect.

The following are the probable risks and the mitigation plan for each risk:

S. No.

Risk Description Mitigation Plan

1. Inadequate Fuel Supply

1. Regular meetings and close follow up for the agreed schedule

2. Ensuring deployment of required resources and supply materials as per the project schedule

3. Collection of adequate and accurate market data to ensure timely implementation

S. No.


2. Regulatory and legal issues affecting performance of installed capacity

1. Pursuing with procurers and regulatory authorities to resolve pending issues

2. Amicable settlements where ever possible to avoid the delay in the legal outcome

3. Delays in obtaining necessary clearances, land acquisition etc.,

1. Regular interaction with locals and employing confidence building measures through CSR

2. Regular follow up with concerned regulatory authorities for timely clearances

4. Lack of investor interest for infusion of equity into under construction projects

1. Divestment of stake in operational assets to raise the required equity for infusion into under construction assets

2. Structuring alternative funding patterns

3. Raising equity from the strategic investors

5. Tying up of long term PPAs

1. Participation in all biddings2. Regular follow up with authorities

to ensure signing of power purchase agreements post the bids


26

S. No.


6. Delay in approvals and disbursements from lenders

Regular follow up with lenders

7. Project Implementation Delays

1. Regular review and close follow up on the action plan and speeding up the critical path

2. Regular follow up with lenders for approvals and disbursements

8. Higher Interest Cost 1. Exploring and availing cheaper source of funds

2. Realization of outstanding dues from the debtors

3. Usage of non-fund based facility for cost optimization.

9. Loss on account of foreign exchange fluctuation

1. Review of forex exposure on a regular basis

2. Hedging as per the Forex Risk Management policy

3. Avoid foreign exchange transactions where ever possible

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Lanco Foundation is the CSR arm of the Lanco Group. The Foundation operates in 14 locations across 12 states in India. Its programmes range across various sections of the society. The foundation programs include providing free education, free medical support, free drinking water and free disability assistance. During the year 2014-15, Lanco group spent ` 264 lakhs on CSR related activities.

HEALTH, SAFETY AND ENVIRONMENT

Lanco Infratech Limited, takes an integrated approach towards Health, Safety & Environment (HSE) and follows, National &

International standards. The company through its subsidiaries implemented British 5 star Safety Programs. This has enhanced the reputation as a HSE conscious group. The company aim to be a national leader in environmental standards and practices.

All the Operational Power Plants, EPC Division, Lanco Hills and Lanco Solar are OHSAS-18001 & ISO-14001 certified.

Good work leads to worthy recognition. The renowned and prestigious “PrashanshaPatra” award was conferred by ‘National Safety Council of India’ to Amarkantak power project, Anpara power project & Anuppur EPC site. Additionally CII has conferred Tanjore power project a “5 Star Rating” as an appreciation of our HSE practices.

Other noteworthy appreciations include ‘Medium Scale Industries’ First Place Award for our Tanjore power project.

Bagging various HSE awards during the year make us proud. Details are as under:

Company Award

Lanco Infratech Limited Anuppur Site

l NSCI Safety Awards, “PrashanshaPatra”

Lanco Amarkantak Power Limited

l NSCI Safety Awards, “PrashanshaPatra”

l NSCI Safety Awards, “Safety Awards”

Lanco Anpara Power Limited

l The 15th Annual “Greentech Environment Award in Gold Category”

l The 13th Annual “Greentech Safety Award in Silver Category”

LANCO Tanjore Power Company Limited

l CII “5 Star Rating” & “Medium Scale Industries – First Place” awards

Udupi Power Corporation Limited

l Golden Peacock “Environment Management Award”

Boards’ Report

27

NOMINATION AND REMUNERATION POLICY

1.0 TITLE

Nomination and Remuneration Policy.

2.0 PURPOSE

Pursuant to Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors of every listed company shall constitute the Nomination and Remuneration Committee, to guide the Board on various issues on appointment, evaluate performance, remuneration of Directors, Key Managerial Personnel and Senior Management.

3.0 APPLICABILITY

This policy is applicable to all Directors, Key Managerial Personnel (KMP), and Senior Management team and other employees of Lanco Infratech Limited (“Company”).

4.0 OBJECTIVES

This policy is framed with the following objectives:

I. To guide the Board in relation to the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

II. To evaluate the performance of members of the Board and provide necessary report to the Board for further evaluation.

III. To attract, retain and motivate the Senior Management including its Key Managerial Personnel, evaluation of their performance and provide necessary report to the Board for further evaluation.

IV. The relationship of remuneration with performance is clear and meets appropriate performance benchmarks.

V. To recommend the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

VI. To promote and develop a high performance workforce in line with the Company strategy.

VII. To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Director (Executive & Non- Executive/ Independent/Nominee) and persons who may be appointed in Senior Management, Key Managerial Personnel and determine their remuneration.

VIII. To determine the remuneration based on the Company’s size and financial position and practices in the industry.

5.0 DEFINITIONS

I. “Act” means Companies Act, 2013 and rules framed thereunder as amended from time to time.

II. “Board of Directors” or Board, in relation to the company, means the collective body of the Directors of the Company.

III. “Committee” means Nomination and Remuneration Committee of the Company as constituted or reconstituted by the Board.

IV. “Company” means “Lanco Infratech Limited”.

V. “Managerial Personnel” means Managerial Personnel or Persons, applicable under Section 196 and other applicable provisions of the Companies Act, 2013.

VI. “Policy” or “This policy” means Nomination and Remuneration Policy.

VII. “Remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income Tax Act, 1961.

VIII. “Independent Director” means a Director referred to in Section 149 (6) of the Companies Act, 2013.

IX. “Key Managerial Personnel” (KMP) means

a. The Chief Executive Officer or the Managing Director or the Manager and in their absence the Whole-time Director;

b. The Company Secretary and

c. The Chief Financial Officer

X. “Senior Management” mean personnel of the company who are members of its core management team excluding Board of Directors.

Unless the context otherwise requires, words and expressions used in this policy and not defined herein but defined in the Companies Act, 2013 and the Listing Agreement as may be amended from time to time shall have the meaning respectively assigned to them therein.

6.0 POLICY6.1 CONSTITUTION OF NOMINATION AND REMUNERATION

COMMITTEE: This Policy envisages the role and responsibility of the

Independent Directors, Constitution of the Nomination and Remuneration Committee, term of appointment of Managerial Personnel, Directors, KMPs, Senior Management, remuneration of the Managerial Personnel, KMPs, Senior Management, Independent Directors, Stock Options to Managerial Personnel, KMPs, Senior Management, other employees, evaluation of Managerial Personnel, KMPs, Senior Management, Independent Directors, etc.

The Nomination and Remuneration Committee will consist of three or more non-executive directors, out of which at least one-half shall be independent director(s), provided that Chairperson of the Company may be appointed as a member of this Committee but shall not chair such Committee.

The Board shall reconstitute the Committee as and when required to comply with the provisions of the Companies Act, 2013 and applicable statutory requirements including the Listing Agreement.

The meeting of Committee shall be held at such regular intervals as may be required to carry out the objectives set out in the Policy.

The Committee members may attend the meeting physically or through Video conference or through permitted audio –visual mode, subject to the provisions of the applicable laws. The Committee shall have the authority to call such employee (s), senior official(s) and / or externals, as it deems fit. The Company Secretary shall act as Secretary to the Committee.

Annexure -2


28

6.2 ROLE AND POWERS OF THE COMMITTEE:

The Role and Powers of the Committee shall be as under:

a) To formulate a criteria for determining qualifications, positive attributes and independence of a Director.

b) To formulate criteria for evaluation of Independent Directors and the Board.

c) To identify persons who qualify to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down in this Policy.

d) To carry out evaluation of every Director’s performance.

e) To recommend to the Board the appointment and removal of Directors, Key Managerial Personnel and Senior Management.

f ) To recommend to the Board, policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management.

g) To ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meet appropriate performance benchmarks.

h) To carry out any other function as is mandated by the Board from time to time and /or enforced by the statutory notification, amendment or modification, as may be applicable.

i) To devise a policy on Board Diversity.

j) To formulate the Nomination and Remuneration policy of the Company and propose any amendments.

k) To assist the Board in ensuring that plans are in place for orderly succession for appointments to the Board, Key Managerial Personnel and to Senior Management.

The Chairperson of the Nomination and Remuneration Committee or, in his absence, any other member of the Committee authorised by him, shall be present at the General meetings of the Company, to answer the shareholders queries, if any.

The Nomination and Remuneration Committee shall set up a mechanism to carry out its functions and is further authorized to delegate any / all of its powers to any of the Directors and /or Officers of the Company, as deemed necessary for proper and expeditious execution.

6.3 APPOINTMENT OF MANAGERIAL PERSONNEL, DIRECTOR, KMP AND SENIOR MANAGEMENT:

a) The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Managerial Personnel, Director or KMP or Senior Management and recommend to the Board his /her appointment.

b) A person should possess adequate qualification, expertise and experience for the position he /she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient /satisfactory for the concerned position.

c) Appointment of Independent Directors is also subject to compliance of provisions of Section 149

of the Companies Act, 2013, read with Schedule IV and rules thereunder and the Listing Agreement.

6.4 TERM / TENURE

a. Managerial Personnel:

The Company shall appoint or re-appoint any person as its Managerial Personnel for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.

b. Independent Director:

An Independent Director shall hold office for a term up to five consecutive years on the Board of the Company and will be eligible for reappointment on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.

No Independent Director shall hold office for more than two consecutive terms, but such Independent Director shall be eligible for appointment after expiry of three years of ceasing to become an Independent Director.

Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any other capacity, either directly or indirectly. At the time of appointment of Independent Director, it should be ensured that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company.

The maximum tenure of Independent Directors shall also be in accordance with the Companies Act, 2013 and clarifications/ circulars issued by the Ministry of Corporate Affairs, in this regard, from time to time.

6.5 RETIREMENT:

Any Director other than the Independent Director, KMP and Senior Management shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

6.6 REMUNERATION OF MANAGERIAL PERSONNEL, KMP AND SENIOR MANAGEMENT:

a. The Remuneration / Compensation / Profit linked Incentive etc. to Managerial Personnel, KMP and Senior Management will be determined by the Committee and recommended to the Board for approval. The Remuneration / Compensation / Profit Linked Incentive etc. to be paid for Managerial Personnel shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.

b. The remuneration and commission to be paid to Managerial Personnel shall be as per the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

Boards’ Report

29

c. Managerial Personnel, KMP and Senior Management shall be eligible for a monthly remuneration as may be approved by the Board on the recommendation of the Committee in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force. The break-up of the pay scale and quantum of perquisites including, employer’s contribution to P.F, pension scheme, medical expenses, club fees etc. shall be decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government, wherever required.

d. If, in any financial year, the Company has no profits or its profits are inadequate, the Company shall pay remuneration to its Managerial Personnel in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions, with the prior approval of the Central Government.

e. If any Managerial Personnel draws or receives, directly or indirectly by way of remuneration any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company.

f. Increments if declared to the existing remuneration / compensation structure shall be recommended by the Committee to the Board which should be within the limits approved by the Shareholders in the case of Managerial Personnel.

g. Increments if declared will be effective from 1st April of each financial year in respect of Managerial Personnel, KMP, Senior Management subject to other necessary approvals from statutory authorities as may be required.

h. Where any insurance is taken by the Company on behalf of its Managerial Personnel, KMP and Senior Management for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.

i. Only such employees of the Company and its subsidiaries as approved by the Nomination and Remuneration Committee will be granted ESOPs.

6.7 REMUNERATION TO NON-EXECUTIVE / INDEPENDENT DIRECTORS:

a. Remuneration / Profit Linked Commission:

The remuneration / profit linked commission shall be in accordance with the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.

b. Sitting Fees:

The Non-Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof. Provided that the amount of such fees shall not exceed the

maximum amount as provided in the Companies Act, 2013, per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.

c. Limit of Remuneration /Profit Linked Commission:

Remuneration /profit linked Commission may be paid within the monetary limit approved by shareholders, subject to the limit not exceeding 1%/3% of the net profits of the Company respectively.

d. Stock Options:

Pursuant to the provisions of the Companies Act 2013, Managerial Personnel, KMP, Senior Management and an employee shall be entitled to any Employee Stock Options (ESOPs) of the Company.

6.8 FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

a) The Company shall familiarize the Independent Directors with the company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the company, etc., through various programs.

b) The details of such familiarization programs shall be disclosed on the Company’s website and a web link thereto shall also be given in the Annual Report.

7.0 MONITORING, EVALUATION AND REMOVAL:

I. Evaluation:

The Committee shall carry out evaluation of performance of every Managerial Personnel, Director, KMP and Senior Management on yearly basis.

II. Removal:

The Committee may recommend, to the Board with reasons recorded in writing, removal of a Managerial Personnel, Director, KMP or Senior Management subject to the provisions of Companies Act, 2013, and all other applicable Acts, Rules and Regulations, if any.

III. Minutes of Committee Meeting:

Proceedings of all meetings must be minuted and signed by the Chairperson of the said meeting or the Chairperson of the next succeeding meeting. Minutes of the Committee meeting will be circulated at the subsequent Board meeting for noting.

8.0 AMENDMENT TO THE POLICY:

The Board of Directors on its own and / or as per the recommendations of Nomination and Remuneration Committee can amend this Policy, as and when deemed fit.

In case of any amendment(s), clarification(s), circular(s) etc. issued by the relevant authorities, not being consistent with the provisions laid down under this Policy, then such amendment(s), clarification(s), circular(s) etc. shall prevail upon the provisions hereunder and this Policy shall stand amended accordingly from the effective date as laid down under such amendment(s), Clarification(s), circular(s) etc.

9.0 DISCLOSURE:

The details of this Policy and the evaluation criteria as applicable shall be disclosed in the Annual Report as part of Board’s Report.


30

Disclosure in compliance with Clause 12 of the SEBI (Employee Stock Option Scheme) and (Employee Stock Purchase Scheme) Guidelines, 1999, as amended

S. No. Description Employee Stock Options Plan 2006

1 Total Number of Options under the plan 11,11,80,960

2 Options granted during the year NIL

3 Pricing Formula The options issued by the ESOP Trust shall be at Par Value subject to the adjustments for corporate actions such as Bonus, Consolidation and Split.

4 Options vested as of March 31, 2015 7,13,60,307

5 Options Exercised during the year 8,25,656

6 The total number of shares arising as a result of exercise of option (As of March 31, 2015)

6,50,42,124

7 Options lapsed during the year 6,16,073

8 Variation of Terms of options upto March 31, 2015 NIL

9 Money realised by exercise of Options during the year (in `) 2,00,634

10 Total Number of options in force as on March 31, 2015 5,01,01,650

11 Employee wise details of options granted to

(i) Senior Management during the Year NIL

(ii) Employees holding 5% or more of the total number of options granted during the year

NIL

(iii) Identified employees who were granted option during any one year, equal to or exceeding 1% of the issued capital (excluding warrants and conversions) of the Company at the time of grant.

NIL

12 Diluted Earnings Per Share pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20

(2.83)

13 Where the Company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation cost that shall have been recognised if it had used the fair value of the options. The impact of the difference on profits and on EPS of the Company.

Since these options were granted at a nominal exercise price, intrinsic value on the date of grant approximates the fair value of options.

14 Weighted average exercise prices and weighted average fair values of options separately for options whose exercise price either equals or exceeds or is less than the market price of the stock.

Exercise Price ` 0.243 Per Option. No new options were granted during the year.

15 A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted average information:

(a) risk free interest rate

(b) expected life

(c) expected volatility

(d) Expected dividends, and

(e) the price of the underlying share in market at the time of option grant.

NA

Annexure -3

Boards’ Report

31

Annexure – 4

Disclosure of the information pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

(i) The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name of the Director Ratio of the remuneration to the median remuneration of the employees of the Company for the financial year

Mr. L. Madhusudan Rao 4:1 Mr. G. Bhaskara Rao 5:1 Mr. L. Sridhar Not ApplicableMr. G. Venkatesh Babu 53:1Mr. S. C. Manocha 37:1Dr. Uddesh Kumar Kohli Not ApplicableMr. R. Krishnamoorthy Not ApplicableMr. R. M. Premkumar Not ApplicableMr. Dariyai Lal Rawal Not ApplicableMr. Gurbir Singh Sandhu Not ApplicableSmt. L. Ramalakshmamma Not ApplicableMr. Yashpal Gupta Not Applicable

* Mr. Vijoy Kumar and Mr. Pawan Chopra were appointed as Independent Directors with effect from June 23, 2015.

(ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name of the Director and Key Managerial Personnel Percentage increase in remuneration in the financial yearDirectors No increaseMr.T. AdiBabu, Chief Financial Officer 13%Mr.A. Veerendra Kumar, Company Secretary 8.5%

(iii) The percentage increase in the median remuneration of employees in the financial year:10.40%

(iv) The number of permanent employees on the rolls of Company:1,289

(v) The explanation on the relationship between average increase in remuneration and Company performance: The Organisation is going through Consolidation stage. To retain the talented resources in the Organisation and to keep the employees motivated, salary increment has been announced.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: Not Applicable.

(vii) Variations in the market capitalisation of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase or decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer:

S. No. Particulars As at March 31, 2015 As at March 31, 20141. Market Capitalisation NSE `1,340 Crores NSE `1,728 Crores

22.45% decrease in market capitalisation.2. Price Earnings Ratio Not Applicable as the Company incurred losses.

Market quotations of the equity shares of the Company in comparison to the rate at which the Company came out with the last publicoffer:

The Company made an Initial Public Offer in the year 2006 at a price of `240/- per equity share comprising of premium of `230/- per equity share on the face value of `10/- per equity share. The closing price of the equity shares of `1/- each as on March 31, 2015 on NSE was `5.45 and on BSE was `5.44.

(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: 10.35%. There wasn’t any increase in the managerial remuneration during the financial year 2014-15.

(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company: Not Applicable

(x) The key parameters for any variable component of remuneration availed by the Directors :NIL

(xi) The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: Not Applicable.

(xii) Affirmation that the remuneration is as per the remuneration policy of the Company: It is affirmed that the remuneration is as per the ‘Remuneration Policy for Directors, Key Managerial Personnel and other Employees’ adopted by the Company.


32

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN AS ON FINANCIAL YEAR ENDED ON 31.03.2015

[PURSUANT TO SECTION 92 (3) OF THE COMPANIES ACT, 2013 AND RULE 12(1) OF THE COMPANIES (MANAGEMENT & ADMINISTRATION) RULES, 2014]

I. REGISTRATION AND OTHER DETAILS

i CIN L45200TG1993PLC015545ii Registration Date 26.03.1993iii Name of the Company Lanco Infratech Limitediv Category/Sub Category of the Company Company Limited by Shares / Indian Non-Government Companyv Address of the Registered office and contact details Plot No. 4, Software Units Layout, HITEC City, Madhapur, Hyderabad –

500 081, Telangana, India,Phone: +91-40-40090400, Fax: +91-40-23116127,Email: [email protected],Website: www.lancogroup.com

vi Whether Listed Company Yesvii Name, Address and Contact details of Registrar and

Transfer Agent, if anyM/s. Aarthi Consultants Private Limited, 1-2-285, Domalguda, Hyderabad – 500 029, Telangana, India,Phone: +91-40-2763 8111, 2763 4445, Fax : +91-40-27632184E-mail: [email protected],Website: www.aarthiconsultants.com

II. PRINCIPAL BUSINESS ACTIVITY OF THE COMPANY

S. No.

Name and Description of Main Products Name / Services

NIC CODE of the Product / Service % to total Turnover of the Company

1 EPC & Construction 43900 91.11%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

S. NO.

Name of the Company CIN/GLN Relationship Percentage of Ownership Interest

Applicable Section

1 Lanco Group Limited U74140HR2002PLC041507 Holding 54.49% Section 2 (69)2 Amrutha Power Private Limited U40106KA2004PTC035046 Subsidiary 100.00% Section 2 (87)3 Ananke Properties Private Limited U45200TG2008PTC057338 Subsidiary 100.00% Section 2 (87)4 Arneb Power Private Limited U40300TG2010PTC070839 Subsidiary 99.52% Section 2 (87)5 Avior Power Private Limited U40109TG2004PTC043439 Subsidiary 99.83% Section 2 (87)6 Banas Thermal Power Private

LimitedU40300TG2010PTC068848 Subsidiary 99.91% Section 2 (87)

7 Basava Power Private Limited U40109TG2004PTC043440 Subsidiary 91.78% Section 2 (87)8 Belinda Properties Private Limited U45200TG2008PTC057339 Subsidiary 100.00% Section 2 (87)9 Bhanu Solar Projects Private


10 Bianca Properties Private Limited U45200TG2008PTC057340 Subsidiary 100.00% Section 2 (87)11 Charon Trading Private Limited U52599TG2008PTC059252 Subsidiary 97.81% Section 2 (87)12 Coral Orchids Private Limited U01119TG2004PTC042613 Subsidiary 100.00% Section 2 (87)13 Cordelia Properties Private Limited U45400TG2004PTC042352 Subsidiary 99.98% Section 2 (87)14 Cressida Properties Private Limited U45200TG2008PTC057342 Subsidiary 100.00% Section 2 (87)15 Deimos Properties Private Limited U45400TG2004PTC042501 Subsidiary 99.99% Section 2 (87)16 Dione Properties Private Limited U45400TG2004PTC042503 Subsidiary 99.99% Section 2 (87)17 Diwakar Solar Projects Limited U40106TG2009PLC065865 Subsidiary 100.00% Section 2 (87)

Annexure - 5

Boards’ Report

33

S. NO.


Applicable Section

18 Emerald Orchids Private Limited U01119TG2004PTC042616 Subsidiary 86.11% Section 2 (87)19 Helene Power Private Limited U40300TG2008PTC061285 Subsidiary 100.00% Section 2 (87)20 Himavat Power Limited U40100TG2005PLC045449 Subsidiary 100.00% Section 2 (87)21 JH Patel Power Project Private

LimitedU74210KA2006PTC038219 Subsidiary 99.94% Section 2 (87)

22 Jupiter Infratech Private Limited U45200TG2004PTC042804 Subsidiary 100.00% Section 2 (87)23 Khaya Solar Projects Private


24 Lanco Amarkantak Power Limited U40109TG2001PLC036265 Subsidiary 79.89% Section 2 (87)25 Lanco Anpara Power Limited U31200UP2006PLC031982 Subsidiary 100.00% Section 2 (87)26 Lanco Babandh Power Limited U40104TG2007PLC054207 Subsidiary 99.96% Section 2 (87)27 Lanco Devihalli Highways Limited U45400TG2007PLC053957 Subsidiary 100.00% Section 2 (87)28 Lanco Hills Technology Park

Private LimitedU72200TG2004PTC044097 Subsidiary 87.83% Section 2 (87)

29 Lanco Horizon Properties Private Limited

U45200TG2004PTC042806 Subsidiary 99.99% Section 2 (87)

30 Lanco Hoskote Highway Limited U45200TG2007PLC053124 Subsidiary 100.00% Section 2 (87)31 Lanco Hydro Power Limited U01111TG1996PLC023347 Subsidiary 100.00% Section 2 (87)32 Lanco Kanpur Highways Limited U45400HR2011PLC041920 Subsidiary 100.00% Section 2 (87)33 Lanco Kondapalli Power Limited U40101TG1995PLC021459 Subsidiary 59.00% Section 2 (87)34 Lanco Mandakini Hydro Energy

Private LimitedU40106UR2006PTC032559 Subsidiary 100.00% Section 2 (87)

35 Lanco Operation and Maintenance Company Limited

U40300TG2009PLC065597 Subsidiary 99.88% Section 2 (87)

36 Lanco Power Limited U40109TG2005PLC045214 Subsidiary 100.00% Section 2 (87)37 Lanco Rambara Hydro Private

LimitedU40300UR2013PTC000532 Subsidiary 100.00% Section 2 (87)

38 Lanco Solar Energy Private Limited U40109TG2009PTC064018 Subsidiary 100.00% Section 2 (87)39 Lanco Solar Power Projects Private


40 Lanco Solar Private Limited U74900TG2008PTC060157 Subsidiary 100.00% Section 2 (87)41 Lanco Solar Services Private


42 Lanco Tanjore Power Company Limited

U40101TN1997PLC037663 Subsidiary 58.45% Section 2 (87)

43 Lanco Teesta Hydro Power Limited U40109TG2000PLC034758 Subsidiary 100.00% Section 2 (87)44 Lanco Thermal Power Limited U40109TG2002PLC038452 Subsidiary 100.00% Section 2 (87)45 Lanco Vidarbha Thermal Power

LimitedU40100TG2005PLC045445 Subsidiary 99.99% Section 2 (87)

46 Lanco Wind Power Private Limited U40108TG2007PTC052684 Subsidiary 100.00% Section 2 (87)47 Leda Properties Private Limited U45200TG2008PTC057343 Subsidiary 100.00% Section 2 (87)48 Mahatamil Mining and Thermal

Energy LimitedU10200HR2010PLC041280 Subsidiary 99.81% Section 2 (87)

49 Mercury Projects Private Limited U70102TG2004PTC042760 Subsidiary 100.00% Section 2 (87)50 Mimas Trading Private Limited U52190TG2008PTC059253 Subsidiary 86.33% Section 2 (87)51 Mirach Power Limited U40109TG2004PLC043236 Subsidiary 98.48% Section 2 (87)52 National Energy Trading and

Services LimitedU40109TG2000PLC033791 Subsidiary 99.83% Section 2 (87)

53 Nekkar Power Private Limited U40109TG2004PTC043237 Subsidiary 88.89% Section 2 (87)54 Neptune Projects Private Limited U70102TG2004PTC042761 Subsidiary 99.72% Section 2 (87)55 Nix Properties Private Limited U45200TG2008PTC057344 Subsidiary 100.00% Section 2 (87)


34

S. NO.


Applicable Section

56 Omega Solar Projects Private limited


57 Orion Solar Projects Private Limited


58 Pasiphae Power Private Limited U40108TG2008PTC061286 Subsidiary 100.00% Section 2 (87)59 Pearl Farms Private Limited U01119TG2004PTC042502 Subsidiary 99.99% Section 2 (87)60 Phoebe Trading Private Limited U74999TG2008PTC059254 Subsidiary 93.76% Section 2 (87)61 Portia Properties Private Limited U45400TG2004PTC042612 Subsidiary 99.99% Section 2 (87)62 Pragdisa Power Private Limited U40100TG2005PTC045442 Subsidiary 99.93% Section 2 (87)63 Regulus Power Private Limited U40109TG2004PTC043441 Subsidiary 100.00% Section 2 (87)64 Sabitha Solar Projects Private


65 Siddheswara Power Private Limited


66 Spica Thermal Power Private Limited


67 Spire Rotor Private Limited U74900TG2008PTC061527 Subsidiary 100.00% Section 2 (87)68 Tasra Mining & Energy Company

Private LimitedU40108TG2010PTC070744 Subsidiary 100.00% Section 2 (87)

69 Telesto Properties Private Limited U45200TG2003PTC042330 Subsidiary 99.99% Section 2 (87)70 Tethys Properties Private Limited U45200TG2008PTC057345 Subsidiary 100.00% Section 2 (87)71 Thebe Properties Private Limited U45200TG2008PTC057347 Subsidiary 100.00% Section 2 (87)72 Udupi Power Corporation Limited U31909KA1996PLC019918 Subsidiary 100.00% Section 2 (87)73 Uranus Infratech Private Limited U45200TG2004PTC042805 Subsidiary 100.00% Section 2 (87)74 Uranus Projects Private Limited U70102TG2004PTC042759 Subsidiary 99.99% Section 2 (87)75 Vainateya Power Private Limited U40100TG2005PTC045448 Subsidiary 100.00% Section 2 (87)76 Bhola Electricity Pvt Ltd Not Applicable Subsidiary 100.00% Section 2 (87)77 Carpenter Mine Management Pty

LimitedNot Applicable Subsidiary 100.00% Section 2 (87)

78 Green Solar SRL Not Applicable Subsidiary 100.00% Section 2 (87)79 Lanco Enterprise Pte Limited

(China)Not Applicable Subsidiary 100.00% Section 2 (87)

80 Lanco Holding Netherland B.V Not Applicable Subsidiary 100.00% Section 2 (87)81 Lanco Infratech (Mauritius)


82 Lanco Infratech Nepal Private Limited

Not Applicable Subsidiary 100.00% Section 2 (87)

83 Lanco International Pte Limited Not Applicable Subsidiary 100.00% Section 2 (87)84 Lanco IT PV Investments B.V. Not Applicable Subsidiary 100.00% Section 2 (87)85 Lanco Power International Pte


86 Lanco Resources Australia Pty. Limited


87 Lanco Resources International Pte Limited


88 Lanco Solar Holding Netherland B.V Utrecht


89 Lanco Solar International Pte Limited


90 Lanco Solar International US Inc. Not Applicable Subsidiary 100.00% Section 2 (87)91 LE New York - LLC Not Applicable Subsidiary 100.00% Section 2 (87)

Boards’ Report

35

S. NO.


Applicable Section

92 P.T Lanco Indonesia Energy Not Applicable Subsidiary 100.00% Section 2 (87)93 Sirajganj Electric Pvt Limited Not Applicable Subsidiary 100.00% Section 2 (87)94 The Griffin Coal Mining Company

Pty LimitedNot Applicable Subsidiary 100.00% Section 2 (87)

95 Western Australia Coal Terminal Pty Ltd


96 DDE Renewable Energy Private Limited

U40300RJ2009PTC047153 Associate 49.00% Section 2 (6)

97 Electromech Maritech Private Limited

U74140PN2008PTC131227 Associate 49.00% Section 2 (6)

98 Finehope Allied Engineering Private Limited

U29253DL2010PTC199330 Associate 49.00% Section 2 (6)

99 Genting Lanco Power (India) Private Limited

U40100AP1997PTC044831 Associate 26.00% Section 2 (6)

100 KVK Energy Ventures Private Limited

U40300TG2009PTC063658 Associate 49.00% Section 2 (6)

101 Newton Solar Private Limited U40106GJ2010PTC062281 Associate 49.00% Section 2 (6)102 Saidham Overseas Private Limited U40105DL2009PTC191346 Associate 49.00% Section 2 (6)103 Vasavi Solar Power Private Limited U40106AP2010PTC069210 Associate 49.00% Section 2 (6)

IV. SHAREHOLDING PATTERN

(Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Share Holding

Category of Shareholders No. of Shares held at the beginning of the year 01.04.2014 No. of Shares held at the end of the year 31.03.2015 % Change during the

yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

Shares

A. Promoter & Promoter Group

(1) Indiana) Individual/ HUF 21,95,19,903 21,95,19,903 9.12 20,68,01,820 - 20,68,01,820 8.40 (0.72)b) Central Government /

State Government(s)- - - - - - - - -

c) Bodies Corp. 1,35,37,12,439 - 1,35,37,12,439 56.22 1,35,37,12,439 - 1,35,37,12,439 54.98 (1.25)e) Banks / Financial

Institutions- - - - - - - - -

f ) Any other(i) Relatives of Promoters 6,85,15,537 - 6,85,15,537 2.85 6,85,15,537 - 6,85,15,537 2.78 (0.06)(ii) Other Bodies Corporate 6,10,415 - 6,10,415 0.03 6,10,415 - 6,10,415 0.02 (0.00)(iii) Trusts 4,69,64,489 - 4,69,64,489 1.95 4,61,39,466 - 4,61,39,466 1.87 (0.08)Sub Total (A) (1) 1,68,93,22,783 - 1,68,93,22,783 70.16 1,67,57,79,677 - 1,67,57,79,677 68.06 (2.10)(2) Foreigna) Individuals - (Non-

Resident Individuals / Foreign Individuals)

- - - - - - - - -

b) Bodies Corporate - - - - - - - - -c) Any other - - - - - - - - -Sub Total (A) (2) - - - - - - - - -Total Shareholding of Promoter & Promoter Group (A) = (A)(1)+(A)(2)

1,68,93,22,783 - 1,68,93,22,783 70.16 1,67,57,79,677 - 1,67,57,79,677 68.06 (2.10)


36

Category of Shareholders No. of Shares held at the beginning of the year 01.04.2014 No. of Shares held at the end of the year 31.03.2015 % Change during the

yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

Shares

B. Public Shareholding

1. Institutions

a) Mutual Funds 50,13,769 - 50,13,769 0.21 10,869 - 10,869 0.00 (0.21)

b) Banks / Financial Institutions

4,36,18,069 - 4,36,18,069 1.81 9,84,62,047 - 9,84,62,047 4.00 2.19

c) Central Govt / State Governments(s)

- - - - - - - - -

d) Venture Capital Funds - - - - - - - -

e) Insurance Companies - - - - - - - - -

f ) FIIs 8,63,78,894 - 8,63,78,894 3.59 3,73,09,868 - 3,73,09,868 1.52 (2.07)

g) Foreign Venture Capital Funds

- - - - - - - - -

h) Others (specify) - - - - - - - - -

Sub-total (B)(1):- 13,50,10,732 - 13,50,10,732 5.61 13,57,82,784 - 13,57,82,784 5.51 (0.09)

2. Non-Institutions

a) Bodies Corporate 10,88,10,072 500 10,88,10,572 4.52 7,90,51,670 500 7,90,52,170 3.21 (1.31)

b) Individuals

i) Individual shareholders holding nominal share capital upto `1 lakh

33,26,84,021 23,281 33,27,07,302 13.82 40,06,73,538 24,987 40,06,98,525 16.27 2.45

ii) Individual shareholders holding nominal share capital in excess of `1 lakh

10,71,78,667 - 10,71,78,667 4.45 10,29,14,201 - 10,29,14,201 4.18 (0.27)

c) Others (specify)

1 Trusts 38,310 - 38,310 0.00 26,310 - 26,310 0.00 (0.00)

2 Clearing Member 1,23,07,534 - 1,23,07,534 0.51 1,62,67,766 - 1,62,67,766 0.66 0.15

3 Foreign Nationals 2,400 - 2,400 0.00 2,400 - 2,400 0.00 (0.00)

4 Non Resident Indians (Repat)

1,96,03,205 - 1,96,03,205 0.81 1,32,51,754 - 1,32,51,754 0.54 (0.28)

5 Non Resident Indians (Non Repat)

21,52,505 - 21,52,505 0.09 35,04,803 - 35,04,803 0.14 0.05

6 Foreign Companies 6,69,910 - 6,69,910 0.03 6,69,910 - 6,69,910 0.03 (0.00)

7 Overseas Corporate Bodies

1,000 - 1,000 0.00 - - - - (0.00)

8 Foreign Portfolio Investor (Corporate)

- - - - 3,44,29,259 - 3,44,29,259 1.40 1.40

Sub-total (B)(2):- 58,34,47,624 23,781 58,34,71,405 1.00 65,07,91,611 25,487 65,08,17,098 26.43 25.43

Total Public Shareholding (B) = (B)(1)+(B)(2)

71,84,58,356 23,781 71,84,82,137 29.84 78,65,74,395 25,487 78,65,99,882 31.94 2.10

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) 2,40,77,81,139 23,781 2,40,78,04,920 100.00 2,46,23,54,072 25,487 2,46,23,79,559 100.00 -

Boards’ Report

37

(ii) Shareholding of Promoter and Promoter Group

S.No. Shareholder’s Name Shareholding at the beginning of the year 01.04.2014

Shareholding at the end of the year 31.03.2015

% change in shreholding during the

yearNo. of Shares % of total

Shares of the

Company

% of Shares Pledged/

encumbered to total shares

No. of Shares % of total Shares of the

Company

% of Shares Pledged /

encumbered to total shares

1 L. MADHUSUDHAN RAO 11,68,69,916 4.85 1.90 11,68,69,916 4.75 4.75 (0.11)

2 G. BHASKARA RAO 5,75,06,400 2.39 1.29 5,13,58,933 2.09 1.26 (0.30)

3 L. SRIDHAR 4,51,43,587 1.87 0.75 3,85,72,971 1.57 0.73 (0.31)

4 LANCO GROUP LIMITED 1,35,37,12,439 56.22 48.41 1,35,37,12,439 54.98 54.98 (1.25)

5 L. RAJAGOPAL 5,37,59,447 2.23 1.99 5,37,59,447 2.18 1.95 (0.05)

6 G. PADMAVATHI 54,45,380 0.23 - 54,45,380 0.22 - (0.01)

7 L. VENKATA RAMANAIDU 32,02,380 0.13 - 32,02,380 0.13 - -

8 L. RAMALAKSHMAMMA 29,18,880 0.12 - 29,18,880 0.12 - -

9 L. PADMA 31,500 0.00 - 31,500 0.00 - -

10 G. AVINASH 21,80,000 0.09 - 21,80,000 0.09 - -

11 L. SIRISHA 9,77,950 0.04 - 9,77,950 0.04 - -

12 GVRN GROVES PRIVATE LIMITED

2,00,000 0.01 - 2,00,000 0.01 - -

13 GVRN AGRO ESTATES PRIVATE LIMITED

25,000 0.00 - 25,000 0.00 - -

14 GVRN ORCHIDS PRIVATE LIMITED

40,000 0.00 - 40,000 0.00 - -

15 BHASKAR AGRO FARMS PRIVATE LIMITED

50,000 0.00 - 50,000 0.00 - -

16 BHASKAR ORCHIDS PRIVATE LIMITED

50,000 0.00 - 50,000 0.00 - -

17 VENU AGRO FARMS PRIVATE LIMITED

25,000 0.00 - 25,000 0.00 - -

18 VENU ORCHIDS PRIVATE LIMITED

25,000 0.00 - 25,000 0.00 - -

19 SIRI ORCHIDS PRIVATE LIMITED

20,000 0.00 - 20,000 0.00 - -

20 LARSCO ENTERTAINMENT PRIVATE LIMITED

1,75,415 0.01 - 1,75,415 0.01 - -

21 LCL FOUNDATION * 4,69,64,489 1.95 - 4,61,39,466 1.87 - (0.08)

Total 1,68,93,22,783 70.16 54.34 1,67,57,79,677 68.06 63.67 (2.10)

*ESOP Trust


38

(iii) Change in Promoter & Promoter Group Shareholding

S.No. Particulars Shareholding at the beginning of the year 01.04.2014


No. of Shares % of total shares of the Company

No. of Shares % of total shares of the Company

1 G. BHASKARA RAO 5,75,06,400 2.39 5,13,58,933 2.09

2 L. SRIDHAR 4,51,43,587 1.87 3,85,72,971 1.57

3 LCL FOUNDATION * 4,69,64,489 1.95 4,61,39,466 1.87

*ESOP Trust

(iv) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):

S.No. For each of the Top 10 shareholders Shareholding at the beginning of the year 01.04.2014


No. of shares % of total shares No. of shares % of total shares

1 LIFE INSURANCE CORPORATION OF INDIA 3,25,54,593 1.35 3,25,54,593 1.32

2 HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

3,10,98,819 1.29 - -

3 CREDIT SUISSE (SINGAPORE) LIMITED 2,62,84,175 1.09 3,37,68,507 1.37

4 HARMAN LAGADAPATI 2,40,78,049 1.00 2,40,78,049 0.98

5 IDFC LIMITED 1,22,00,000 0.51 - -

6 LATA BHANSHALI 1,04,21,000 0.43 - -

7 GENERAL INSURANCE CORPORATION OF INDIA

87,00,000 0.36 87,00,000 0.35

8 GOLDMAN SACHS INVESTMENTS (MAURITIUS) I LTD

72,38,896 0.30 72,38,896 0.29

9 MV SCIF MAURITIUS 69,06,338 0.29 80,62,455 0.33

10 DR. UPENDRANATH. N. 61,06,370 0.25 - -

(v) Shareholding of Directors and Key Managerial Personnel:

S.No. Shareholding of each Directors and each Key Managerial Personnel

Shareholding at the beginning of the year 01.04.2014


No. of shares % of total shares No. of shares % of total shares

1 L. MADHUSUDHAN RAO 11,68,69,916 4.85 11,68,69,916 4.75

2 G. BHASKARA RAO 5,75,06,400 2.39 5,13,58,933 2.09

3 L. SRIDHAR 4,51,43,587 1.87 3,85,72,971 1.57

4 G. VENKATESH BABU 97,35,929 0.40 97,35,929 0.40

5 S. C. MANOCHA 6,02,651 0.03 2,47,938 0.01

6 L. RAMALAKSHMAMMA 29,18,880 0.12 29,18,880 0.12

7 UDDESH KUMAR KOHLI 1,69,050 0.01 1,69,050 0.01

8 R. KRISHNAMOORTHY Nil Nil Nil Nil

9 R. M. PREMKUMAR Nil Nil Nil Nil

10 D. L. RAWAL Nil Nil Nil Nil

11 GURBIR SINGH SANDHU Nil Nil Nil Nil

12 VIJOY KUMAR Nil Nil Nil Nil

13 PAWAN CHOPRA 3,556 0.00 3,556 0.00

14 YASHPAL GUPTA Nil Nil Nil Nil

15 T. ADI BABU, CHIEF FINANCIAL OFFICER 2,32,404 0.01 2,32,404 0.01

16 A. VEERENDRA KUMAR, COMPANY SECRETARY 12,573 0.00 12,573 0.00

Boards’ Report

39

V. INDEBTEDNESS (`in Crores)Indebtedness of the Company including interest outstanding/accrued but not due for payment

Secured Loans excluding deposits

Unsecured Loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial year(i) Principal Amount 4,777.03 918.46 - 5,695.49

(ii) Interest due but not paid 8.69 66.50 - 75.19

(iii) Interest accrued but not due 2.98 - - 2.98

Total (i+ii+iii) 4,788.70 984.96 - 5,773.66

Change in Indebtedness during the financial year

• Addition 1,557.44 - - 1,557.44

• Reduction (17.87) (443.69) - (461.56)

Net Change 1,539.57 (443.69) - 1,095.88

Indebtedness at the end of the financial year

(i) Principal Amount 6,281.32 517.62 - 6,798.94

(ii) Interest due but not paid 41.85 23.65 - 65.50

(iii) Interest accrued but not due 5.10 - - 5.10

Total (i+ii+iii) 6,328.27 541.27 - 6,869.54

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

S. No.

Particulars of Remuneration Name of MD/WTD/ Manager Total Amount

(in `)Mr. L. Madhusudan

RaoMr. G. Bhaskara

RaoMr. G. Venkatesh

BabuMr. S. C.

Manocha1 Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961

- - 3,24,99,996 2,23,48,542 5,48,48,538

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

80,94,588 87,91,647 62,54,098 79,200 2,32,19,533

(c) Profits in lieu of salary under Section 17(3) Income- tax Act, 1961

- - - - -

2 Stock Option - - 69,14,881 57,00,163 1,26,15,044

3 Sweat Equity - - - - -

4 Commission

- as % of profit - - - - -

- others, specify - - - - -

5 Others - - - - -

Total (A) 80,94,588 87,91,647 4,56,68,975 2,81,27,905 9,06,83,115

Ceiling as per the Act Not Applicable


40

B. Remuneration to other Directors:

S. No.

Particulars of Remuneration

Name of Directors Total Amount

(in `)Dr. Uddesh

Kumar KohliMr. R.

KrishnamoorthyDr. Pamidi

KotaiahMr. L.

SridharMr. Prakash

P. MallyaMr. R. M.

PremkumarMr. P.

Abraham1. Independent Directors

• Fee for attending Board Committee Meetings

3,00,000 2,80,000 1,80,000 - 80,000 20,000 20,000 8,80,000

• Commission - - - - - - - -• Others, please specify - - - - - - - -

Total (1) 3,00,000 2,80,000 1,80,000 - 80,000 20,000 20,000 8,80,0002. Other Non-Executive Directors

• Fee for attending Board Committee Meetings

- - - 1,20,000 - - - 1,20,000

• Commission - - - - - - - -• Others, please specify - - - - - - - -

Total (2) - - - 1,20,000 - - - 1,20,000Total (B)=(1+2) 3,00,000 2,80,000 1,80,000 1,20,000 80,000 20,000 20,000 10,00,000Total Managerial Remuneration

9,06,83,115

Overall Ceiling as per the Act *

- - - - - - - -

* The Independent Directors and Non-Executive Directors are not paid any remuneration except sitting fees for attending the meetings of the Board and/or Committees thereof.

C. Remuneration to Key Managerial Personnel Other than MD / MANAGER / WTD:

S. No.

Particulars of Remuneration Key Managerial PersonnelChief Financial Officer –

Mr. T. Adi BabuCompany Secretary –

Mr. A. Veerendra KumarTotal Amount (in `)

1 Gross salary(a) Salary as per provisions contained in

Section 17(1) of the Income-tax Act, 19611,69,53,750 37,92,952 2,07,46,702

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

1,89,977 - 1,89,977

(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961

- - -

2 Stock Option 6,03,389 71,721 6,75,1113 Sweat Equity - - -4 Commission

- as % of profit - - -- others, specify - - -

5 Others, please specify - - -Total 1,77,47,116 38,64,673 2,16,11,790

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the Companies Act

Brief Description Details of Penalty / Punishment

Compounding fee imposed

Authority

(RD / NCLT / COURT)

Appeal made, if

any (give details)

COMPANY/ DIRECTORS/ OTHER OFFICERS IN DEFAULT

There were no penalties, punishment or compounding of offences during the reporting year ended March 31, 2015.

Penalty

Punishment

Compounding

Boards’ Report

41


42

FORM MR-3[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

SECRETARIAL AUDIT REPORT(For the Financial Year ending 31st March 2015)

To The Members of M/s. Lanco Infratech Limited, Hyderabad.

We have conducted the Secretarial Audit on the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s. Lanco Infratech Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon. Based on our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information and representations provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period ended on 31st March 2015, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

I. The Company is engaged in the business of Infrastructure and we have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the period ended on 31st March 2015 according to the provisions of:

1. The Companies Act, 2013 (the Act) and the Rules made there under;

2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the Rules made there under;

3. The Depositories Act, 1996 and the Regulations and Bye-laws framed there under;

4. Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) to the extent applicable to the Company :-

a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)Regulations, 2011;

b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

d. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

e. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999

f. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; and

g. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;

h. The Listing Agreements entered into by the Company with the BSE Limited, National Stock Exchange of India Limited.

6. The Memorandum and Articles of Association

7. The Secretarial Standards issued by The Institute of Company Secretaries of India.

8. Other laws applicable to the Company as per the representations made by the Company.

II. We further report that:

1. The Company has, in our opinion, generally complied with the provisions of the Companies Act, 1956, Companies Act, 2013 and the Rules made under that Act as notified by Ministry of Corporate Affairs and the Memorandum and Articles of Association of the Company.

2. The Company has complied with the provisions of the Securities Contracts (Regulation) Act, 1956 and the Rules made under that Act, with regard to maintenance of minimum public shareholding.

Annexure – 6

Boards’ Report

43

3. The Company has complied with the provisions of the Depositories Act, 1996 and the Byelaws framed there under by the Depositories with regard to dematerialization / rematerialisation of securities and Reconciliation of Records of Dematerialized Securities with all securities issued by the Company.

4. The Company has generally complied with the requirements under the Equity Listing Agreements entered with the Stock Exchanges.

5. The Company has complied with the provisions of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 including the provisions with regard to disclosures and maintenance of records required under the said Regulations;

6. The Company has complied with the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 including the provisions with regard to disclosures and maintenance of records required under the said Regulations;

7. The Company has complied with the provisions of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 including the provisions with regard to disclosures and maintenance of records required under the said Regulations;

8. There were no transactions attracting the provisions of the FEMA, 1999 and the Rules and Regulations during the Financial Year under review. However the Periodical Compliances as required under the said law have been complied with.

9. During the period under review and as per the explanations and clarifications given to us and the representations made by the management, the company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines etc mentioned above.

III. We further report that:

1. The Company has not bought back equity shares of the company, during the period; therefore, the compliance of the provisions of the Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; does not arise.

2. The Company has not delisted any of its securities, during the period, therefore, the compliance of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; does not arise.

3. The Secretarial Standards issued by Institute of Company Secretaries of India (ICSI) were not notified by the Ministry of Corporate Affairs during the Audit Period; therefore, the Secretarial Standards does not applicable.

IV. We further report that:

1. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors, Independent Directors and the Woman Director. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

2. Adequate Notice is given to all Directors to conduct the Meetings of Board and its committees. Agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting.

3. Majority decision is considered while the dissenting members’ views are captured and recorded, if any, as part of the minutes.

4. The Directors have complied with the disclosure requirements in respect of their eligibility of appointment, there being independent and compliance with the Code of Business Conduct & Ethics for Directors and Management Personnel;

V. Based on the information received and representation provided to us, there are adequate systems and processes in the Company that commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

VI. During the audit period, the Specific Events / actions / matters / Compliances having a major bearing on the company’s affairs, reference shall be taken to the Statutory Auditors Report issued for the Audit Period, in pursuance of the all applicable laws, rules, regulations, guidelines, standards, etc.

For dvmgopal & associates Company Secretaries

Place: Hyderabad Date : July 29, 2015

DVM Gopal Proprietor M No: F6280

CP No: 6798


44

The Company’s Report on Corporate Governance for the year ended March 31, 2015 is presented by the Directors:

I. MANDATORY REQUIREMENTS

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE

The Company has set for itself the-

Mission of “Development of Society through Leadership, Entrepreneurship and Ownership”

Vision of “Most Admired Integrated Infrastructure Enterprise”

The Company firmly believes that Mission and Vision can be realized only by adopting highest standards of Corporate Governance.

The Company is committed to conduct business in a manner which would result in enhancing value to all its Stakeholders. The Company believes that this value enhancement process is possible only by adhering to the principles of Corporate Governance. The Company has put in place systems and practices which enable it to conduct its business in line with the best practices elsewhere in the country and the world, but is also continuously striving to improve such systems and practices. The Company believes in the principles of transparency and disclosures to the extent these do not compromise on its competitiveness.

2. BOARD OF DIRECTORS (‘THE BOARD’)

(i) Composition of the Board

The Board of Directors has been constituted with an optimum mix of Executive, Non-Executive and Independent Directors to clearly demarcate functions of governance and management. As on date, the Board comprises of 14 (Fourteen) Directors out of which 4 (Four) are Executive Directors and 10 (Ten) are Non-Executive Directors. Out of the 10 (Ten) Non-Executive Directors, 7 (Seven) are Independent Directors making the current composition in conformity with the provisions of the Companies Act, 2013 and the Listing Agreements.

The Company has appointed Smt. L. Ramalakshmamma as Woman Director w.e.f March 28, 2015, as per the provisions of Companies Act, 2013 and the Listing Agreements.

None of the Non-Executive Directors has any pecuniary relationship or transaction with the Company, except to the extent of shareholding, if any in the Company.

All the Directors have made adequate disclosures regarding their Directorships, Chairmanships and Memberships on the Board/Committees of the Board of other Public Companies. By virtue of the disclosures made, none of the Directors hold Chairmanships of more than 5 (five) Committees and memberships of more than 10 (ten) Committees across all Public Companies.

(ii) Number of Memberships in Boards of other Public Companies and Chairmanships / Memberships in Committees of Boards of other Public Companies :

Name, Designation and Director Identification

Number (DIN)

Category of Directorship

Number of Memberships in Boards of other

Public Companies

Number of Chairmanships in

Committees of Boards of other Public Companies

Number of Memberships of


Mr. L. MadhusudhanRao Executive ChairmanDIN: 00074790

Executive 9 0 0

Mr. G. Bhaskara Rao Executive Vice-ChairmanDIN: 00075034

Executive 9 0 2

Mr. L. SridharVice-ChairmanDIN: 00075809

Non-Executive 9 0 4

Mr. G. Venkatesh Babu Managing DirectorDIN: 00075079

Executive 9 1 4

REPORT ON CORPORATE GOVERNANCE Annexure – 7

Boards’ Report

45

Name, Designation and Director Identification

Number (DIN)

Category of Directorship

Number of Memberships in Boards of other

Public Companies

Number of Chairmanships in


Number of Memberships of


Mr. S.C. ManochaDeputy Managing DirectorDIN: 00007645

Executive 2 0 0

Dr. Uddesh Kumar Kohli DirectorDIN: 00183409

Non-Executive & Independent

6 4 4

Mr. R. KrishnamoorthyDirectorDIN: 05292993


3 2 1

Mr. R. M. Premkumar#DirectorDIN: 00328942


5 2 1

Mr. Dariyai Lal Rawal* Director DIN: 00955797


2 1 1

Mr. Gurbir Singh Sandhu*Director DIN: 03148569


5 4 1

Smt. L. Ramalakshmamma*Director DIN: 07137124

Non-Executive 9 0 0

Mr. Yashpal Gupta^Nominee Director DIN: 00033484

Non-Executive 0 0 0

Mr. P. Abraham~DirectorDIN: 00280426


7 1 2

# Mr. R. M. Premkumar appointed as Independent Director with effect from October 15, 2014.

* Mr. Dariyai Lal Rawal, Mr. Gurbir Singh Sandhu and Smt. L. Ramalakshmamma were appointed as Directors with effect from March 28, 2015.

^ Mr. Yashpal Gupta was appointed as Nominee Director with effect from January 01, 2015.

~ Mr. P. Abraham resigned from Directorship of the Company on April 01, 2015.

(iii) Meetings and attendance during the year

The Board meets at least once in a quarter, inter alia, to review quarterly results. The notice and agenda of the Board Meetings are served well in advance.

During the financial year 2014-15, 5 (five) Board Meetings were held. These meetings were held on May 23, 2014, August 14, 2014, September 26, 2014, November 14, 2014 and February 12, 2015.


46

The attendance of each Director at the Board Meetings during the financial year 2014-15 as well as at last Annual General Meeting (AGM) is as under:

Name of the Director Number of Board Meetings held

Number of Board Meetings attended

Attendance at the last AGM held on September 26, 2014

Mr. L. Madhusudhan Rao 5 5 YesMr. G. Bhaskara Rao 5 5 YesMr. L. Sridhar 5 4 YesMr. G. Venkatesh Babu 5 4 YesMr. S.C. Manocha 5 5 YesDr. Uddesh Kumar Kohli 5 5 YesMr. R. Krishnamoorthy 5 4 YesMr. P. Abraham~ 5 1 YesMr. R. M. Premkumar# 5 1 N.A. Mr. Dariyai Lal Rawal* 5 0 N.A.Mr. Gurbir Singh Sandhu* 5 0 N.A.Smt. L. Ramalakshmamma* 5 0 N.AMr. Yashpal Gupta^ 5 1 N.A.Dr. Pamidi Kotaiah$ 5 3 N.A. Mr. Prakash P. Mallya@ 5 2 N.A.

# Mr. R. M. Premkumar appointed as Independent Director with effect from October 15, 2014.

* Mr. Dariyai Lal Rawal, Mr. Gurbir Singh Sandhu and Smt. L. Ramalakshmamma were appointed as Directors with effect from March 28, 2015.

^ Mr.Yashpal Gupta was appointed as Nominee Director with effect from January 01, 2015.

$ Dr. Pamidi Kotaiah retired as Director of the Company on September 26, 2014.

@ Mr. Prakash P. Mallya was appointed as Independent Director on October 15, 2014 and resigned later from Directorship on March 27, 2015.

~ Mr. P. Abraham resigned from Directorship of the Company on April 01, 2015.

3. COMMITTEES OF BOARD

In compliance with the provisions of the Companies Act, 2013 and Listing Agreements, the Board has set up the following Committees assigning specific roles and responsibilities to the said Committees:

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Stakeholders Relationship Committee and

(iv) Corporate Social Responsibility Committee

(i) Audit Committee

a. Brief description of Terms of Reference

The Terms of Reference of Audit Committee include the following scope and responsibilities:

1. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

2. Recommendation for appointment, remuneration and terms of appointment of auditors of the company;

3. Approval of payment to statutory auditors for any other services rendered by the statutory auditors;

4. Reviewing, with the management, the annual financial statements and auditor’s report thereon before submission to the board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment by management.

Boards’ Report

47

d. Significant adjustments made in the financial statements arising out of audit findings.

e. Compliance with listing and other legal requirements relating to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the draft audit report.

5. Reviewing, with the management, the quarterly financial statements before submission to the board for approval;

6. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

8. Approval or any subsequent modification of transactions of the company with related parties;

9. Scrutiny of inter-corporate loans and investments;

10. Valuation of undertakings or assets of the company, wherever it is necessary;

11. Evaluation of internal financial controls and risk management systems;

12. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

14. Discussion with internal auditors of any significant findings and follow up there on;

15. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;

16. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. To review and oversee the functioning of the Whistle Blower mechanism;

19. Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;

20. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

21. To review the following information:

i. Management discussion and analysis of financial condition and results of operations;

ii. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;

iii. Management letters / letters of internal control weaknesses issued by the statutory auditors;

iv. Internal audit reports relating to internal control weaknesses; and

v. The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee.

b. Composition

The Audit Committee comprises of 3 (three) Independent Directors and 1 (one) Executive Director, the Chairman being an Independent Director. The members of the Audit Committee as on date are below:

Dr. Uddesh Kumar Kohli Chairman

Mr. R. Krishnamoorthy Member

Mr. Dariyai Lal Rawal Member

Mr. G. Bhaskara Rao Member


48

c. Meetings and Attendance during the year

During the financial year 2014-15, 7 (seven) Meetings were held. These meetings were held on May 23, 2014,August 13, 2014, September 26, 2014, October 17, 2014, November 14, 2014, December 16, 2014 and February 12, 2015.

The attendance of the members during the financial year 2014-15 is given below:

Name of the Director Number of Meetings held Number of Meetings attendedDr. Uddesh Kumar Kohli 7 7

Mr. R. Krishnamoorthy 7 6

Mr. Dariyai Lal Rawal * 7 0

Mr. G. Bhaskara Rao 7 7

* Mr. Dariyai Lal Rawal was inducted to the Audit Committee on May 29, 2015.

(II) Nomination and Remuneration Committee


The terms of reference of the Nomination and Remuneration Committee inter-alia include the determination of remuneration packages for the Executive and Non-Executive Directors of the Company and include the following:

a) To identify persons who are qualified to become Director(s) and who may be appointed in Senior Management in accordance with the criteria laid down and recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance.

b) To formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a policy, relating to the remuneration for the directors, Key Managerial Personnel and other employees and review / modify the same from time to time.

c) To develop and recommend to the Board for its approval on annual evaluation process for Independent Directors.

d) To devise a Policy on Board diversity.

e) To consider and disclose information pertaining to Director/ Key Managerial Personnel, to Shareholders of the Company under the Companies Act, 2013.

The Nomination and Remuneration Committee shall ensure that –

a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;

b) the relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

c) remuneration to Directors, KMPs and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

b. Composition

The Nomination and Remuneration Committee comprises of 3 (three) Non-Executive Independent Directors as on date as below:

Mr. R. Krishnamoorthy Chairman

Dr. Uddesh Kumar Kohli Member

Mr. Gurbir Singh Sandhu Member


During the financial year 2014-15 2 (two) meetings were held on August 13, 2014 and November 14, 2014.

The attendance of the Members during the financial year 2014-15 is given below:

Name of the Director Number of Meetings held Number of Meetings attendedMr. R. Krishnamoorthy 2 2

Dr. Uddesh Kumar Kohli* 2 1

Mr. Gurbir Singh Sandhu ^ 2 0

* Dr. Uddesh Kumar Kohli was inducted to the Nomination and Remuneration Committee on August 14, 2014.

^ Mr. Gurbir Singh Sandhu was inducted to the Nomination and Remuneration Committee on May 29, 2015.

Boards’ Report

49

d. Details of Remuneration to all the Directors for the financial year 2014-15

(` in Lakhs)

Name of the Director Salary Perquisites and

Allowances

Commission/ Performance

Bonus

Sitting Fees

Number of Stock Options granted

Total

Mr. L. Madhusudhan Rao - 80.95 - - - 80.95

Mr. G. Bhaskara Rao - 87.92 - - - 87.92

Mr. G. Venkatesh Babu 250.00 100.04 37.50 - - 387.54*

Mr. S. C. Manocha 172.50 30.77 21.00 - - 224.27*

Mr. L. Sridhar - - - 1.20 - 1.20

Dr. Uddesh Kumar Kohli - - - 3.00 - 3.00

Mr. R. Krishnamoorthy - - - 2.80 - 2.80

Mr. Yashpal Gupta - - - - - -

Mr. R. M. Premkumar - - - 0.20 - 0.20

Smt. L. Ramalakshmamma - - - - - -

Dr. Pamidi Kotaiah - - - 1.80 - 1.80

Mr. P. Abraham - - - 0.20 - 0.20

Mr. Prakash P. Mallya - - - 0.80 - 0.80

*Excluding ESOP

e. Shareholding of Non-Executive Directors as on March 31, 2015

S. No. Name of Director Number of shares held

1. Mr. L. Sridhar 3,85,72,971

2. Dr. Uddesh Kumar Kohli 1,69,050

3. Mr. R. Krishnamoorthy Nil

4. Mr. R. M. Premkumar Nil

5. Mr. Dariyai Lal Rawal Nil

6. Mr. Gurbir Singh Sandhu Nil

7. Smt. L. Ramalakshmamma 29,18,880

8. Mr. Yashpal Gupta Nil

9. Mr. Vijoy Kumar Nil

10. Mr. Pawan Chopra 3,556

(III) Stakeholders Relationship Committee


The Committee is responsible, inter alia, to specifically look into the redressal of grievances of shareholders, debenture holders and other security holders including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends etc.,

b. Composition

The Committee comprises of 2 (two) Non-Executive Directors and 1 (one) Executive Director, the Chairman being a Non-Executive Independent Director. The members of the Committee are below:

Mr. R. M. Premkumar Chairman

Mr. L. Sridhar Member

Mr. G. Venkatesh Babu Member


50


During the financial year 2014-15, 2 (two) meetings were held. These meetings were held on May 23, 2014 and November 14, 2014.

The attendance of the Members during the financial year 2014-15 is given below:

Name of the Director Number of Meetings held Number of Meetings attendedMr. R. M. Premkumar* 2 0Mr. L. Sridhar 2 2Mr. G. Venkatesh Babu 2 2

* Mr. R. M. Premkumar was inducted to the Stakeholders Relationship Committee on November 14, 2014.

d. Name and Designation of Compliance Officer

Mr. A. Veerendra Kumar, Company Secretary is the Compliance Officer of the Company.

e. Details of Complaints/ Requests received, resolved and pending during the Financial Year 2014-15 :

During the Quarter Received Resolved Pending

01.04.2014 - 30.06.2014 1 1 0

01.07.2014 - 30.09.2014 2 2 0

01.10.2014 - 31.12.2014 1 1 0

01.01.2015 - 31.03.2015 1 1 0

Total 5 5 0

(IV) Corporate Social Responsibility Committee


The Committee is responsible, inter alia, to specifically look into following:

• To prepare the CSR Policy and to recommend the Board for its approval;

• To recommend the CSR activities to be undertaken by the Company as prescribed under Schedule VII of the Companies Act, 2013;

• To recommend on CSR activities to be undertaken by the Company on its own or in collaboration with Lanco Foundation or any registered trust / society / Company permitted under the law;

• To ensure that the activities as are included in CSR Policy of the Company are implemented by the Company with a transparent monitoring mechanism;

• To report periodically on the CSR activities of the Company to the Board and in the Board’s report;

• To seek expert advice on CSR activities of the Company that may be appropriate to discharge its responsibilities; and

• To take up any other roles and responsibilities delegated by the Board from time to time.

b. Composition

The Committee comprises of 2 (two) Non-Executive Independent Directors and 2 (two) Executive Directors, the Chairman being a Non-Executive Independent Director. The members of the Committee are below:

Dr. Uddesh Kumar Kohli Chairman

Mr. R. M. Premkumar Member

Mr. G. Bhaskara Rao Member

Mr. G. Venkatesh Babu Member

c. Meetings and Attendance during the Year: Nil

Boards’ Report

51

4. GENERAL BODY MEETINGS

(i) Location, Date and Time of Last three Annual General Meetings and Special Resolutions passed thereat:

Year Location Date & Time

2013-14 Marigold Hotel by Greenpark, Greenlands, Begumpet, Hyderabad – 500016, Telangana, India

September 26, 2014at 3.30 p.m.

Special Resolutions passed:

1. Approval for payment of remuneration to Mr. L. Madhusudhan Rao, Executive Chairman with effect from April 01, 2014 upto March 31, 2016.

2. Approval for payment of remuneration to Mr. G. Bhaskara Rao, Executive Vice-Chairman with effect from April 01, 2014 upto March 31, 2016.

3. Approval for Payment of remuneration to Mr. G. Venkatesh Babu, Managing Director with effect from April 01, 2014 upto June 23, 2016.

4. Approval for Payment of remuneration to Mr. S. C. Manocha, Deputy Managing Director with effect from April 01, 2014 up to August 13, 2015.

2012-13 Marigold Hotel by Greenpark, Greenlands, Begumpet, Hyderabad – 500016, Telangana, India


Special Resolutions passed, if any

1. Approval to waive the recovery of the amount paid for the financial year 2012-13 to Mr. L. Madhusudhan Rao, Executive Chairman in excess of remunerations limits prescribed in Section 309 read with Schedule XIII of the Companies Act, 1956.

2. Approval to waive the recovery of the amount paid for the financial year 2012-13 to Mr. G. Bhaskara Rao, Executive Vice-Chairman in excess of remunerations limits prescribed in Section 309 read with Schedule XIII of the Companies Act, 1956.

3. Approval to waive the recovery of the amount paid for the financial year 2012-13 to Mr. G. Venkatesh Babu, Managing Director in excess of remunerations limits prescribed in Section 309 read with Schedule XIII of the Companies Act, 1956.

4. Approval to waive the recovery of the amount paid for the financial year 2012-13 to Mr. S.C. Manocha, Deputy Managing Director in excess of remunerations limits prescribed in Section 309 read with Schedule XIII of the Companies Act, 1956.

5. Approval for payment of remuneration to Mr. L. MadhusudhanRao, Executive Chairman with effect from April 01, 2013 upto March 31, 2016.

6. Approval for payment of remuneration to Mr. G. Bhaskara Rao, Executive Vice-Chairman with effect from April 01, 2013 upto March 31, 2016.

7. Approval for payment of remuneration to Mr. G. Venkatesh Babu, Managing Director for a period of 3 (three) years with effect from April 01, 2013.

8. Approval for payment of remuneration to Mr. S.C. Manocha, Deputy Managing Director with effect from April 01, 2013 upto August 13, 2015.

2011-12 Green Park Hotel, Greenlands, Begumpet, Hyderabad – 500 016, Telangana, India.


Special Resolutions passed, if any

No Special Resolution passed

(ii) Special Resolution(s) passed through Postal Ballot:

No Special Resolution was passed by Postal Ballot during the financial year 2014-15. No special resolution is proposed to be conducted through Postal Ballot.

5. DISCLOSURES

(i) Materially Significant Related Party Transactions

There are no materially significant related party transactions having potential conflicts with the interests of the Company at large.

(ii) Compliances

The Company has duly complied with all rules, regulations, terms of the agreements prescribed/entered with Stock Exchange(s), SEBI or any other statutory authority on any matter related to capital markets, during the last three years.


52

(iii) Whistle Blower Mechanism

With a view to implement the highest ethical standards in the course of business, the Company has formed and adopted a whistle blower policy which provides a platform for reporting concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. Directors, employees, vendors or any person having dealings with the Company may report non-compliance to the Chairman of Audit Committee, who reviews the report. Confidentiality is maintained of such reporting and it is ensured that the whistle blowers are not subjected to any discrimination. No person was denied access to the Audit Committee.

(iv) Compliance with mandatory requirements and adoption of the non-mandatory requirements

There has been complete compliance with mandatory requirements and in respect of non-mondatory requirements, disclosures have been made to the extent of adoption.

6. MEANS OF COMMUNICATIONS

The Company’s quarterly, half-yearly and annual financial results are put on the Company’s website www.lancogroup.com. The results are also published in newspapers that include Financial Express and Vaartha. The official news releases and presentations made to investors and analysts are also made available on the website of the Company.

Green Initiative in Corporate Governance

In order to show its contribution to the “Green initiative in the Corporate Governance” taken by Ministry of Corporate Affairs, the Company has been sending all communications including annual reports through email to those shareholders, who have registered their e-mail id with their depository participant/Company’s Registrar and Share Transfer Agent other than those who have specifically chosen to receive documents in physical form.

Further, the members are requested to register and update their e-mail addresses with their Depository Participant to ensure that the Annual Report and other documents reach them on their preferred e-mail.

7. GENERAL SHAREHOLDERS INFORMATION

(i) Annual General Meeting

Date and Time September 28, 2015 at 3.30 p.m.

Venue Novotel Hyderabad Convention Centre, Novotel & HICC Complex (Adjacent to HITEC City), P.O. Bag 1101 Cyberabad Post Office, Hyderabad – 500 081, Telangana, India

(ii) Financial Calendar for the Year 2015-16 (Tentative)

Particulars Tentative Schedule

Financial reporting for the quarter ending June 30, 2015 On or before August 14, 2015

Financial reporting for the half-year ending September 30, 2015 On or before November 14, 2015

Financial reporting for the quarter ending December 31, 2015 On or before February 14, 2016

Financial reporting for the year ending March 31, 2016 On or before May 30, 2016

Annual General Meeting for the year ending March 31, 2016 Before September 30, 2016

(iii) Book Closure Dates : September 23, 2015 to September 28, 2015 (both days inclusive)

(iv) Dividend Payment Date : Not Applicable.

(v) Listing on Stock Exchanges

The Equity Shares of the Company are listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

The Company has paid the listing fees for the year 2015-16 to both the stock exchanges. There are no arrears of listing fees with any of the said stock exchanges till date.

(vi) Stock Code

Exchange CodeNational Stock Exchange of India Limited Stock Code: LITLBSE Limited Stock Code: LITL

Scrip Code: 532778Demat ISIN Number – for NSDL / CDSL INE785C01048

Boards’ Report

53

(vii) Stock Market Price Data relating to equity shares listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE).

The monthly high and low stock quotations of equity shares of the Company on NSE and BSE during the year 2014-15 was as under:

(In `)Month NSE BSE

HIGH LOW HIGH LOWApril, 2014 8.90 6.90 8.90 6.92May, 2014 14.85 6.85 14.94 6.86June, 2014 12.95 10.05 13.00 10.11July, 2014 13.40 8.95 13.32 8.96August, 2014 10.20 8.15 10.15 8.18September, 2014 9.10 6.70 9.07 6.71October, 2014 7.50 6.45 7.45 6.46November, 2014 8.10 6.35 8.07 6.40December, 2014 6.85 5.30 6.87 5.31January, 2015 6.55 5.75 6.50 5.77February, 2015 7.25 5.85 7.24 5.90March, 2015 6.95 4.45 6.95 4.45

(viii) Stock Performance in comparison to NSE S & P CNX NIFTY

50

40

30

20

10

05,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug-

14

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

S&P CNX NIFTY LITL

(ix) Stock Performance in comparison to BSE Sensex

50

40

30

20

10

0

Apr

-14

May

-14

Jun-

14

Jul-1

4

Aug-

14

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

15

Feb-

15

Mar

-15

16,000

18,000

20,000

22,000

24,000

26,000

28,000

30,000

SENSEX LITL

(x) Registrar & Share Transfer Agent

M/s. Aarthi Consultants Private Limited, 1-2-285, Domalguda, Hyderabad - 500 029 Telangana, India, Phone: +91-40-2763 8111, 2763 4445, Fax : +91-40-27632184; E-mail: [email protected], Website: www.aarthiconsultants.com

10,000


54

(xi) Share Transfer System

The shareholders are advised to contact the Registrar and Share Transfer Agent at their address for effecting transfer of shares.

(xii) Distribution of Shareholding as on March 31, 2015Nominal Value of Shareholding (in `) No. of Members Holders Percentage No. of Shares Percentage of totalUpto - 5,000 2,41,221 93.93 19,25,56,924 7.82 5,001 - 10,000 8,202 3.19 6,22,81,545 2.53 10,001 - 20,000 3,928 1.53 5,71,10,359 2.32 20,001 - 30,000 1,240 0.48 3,09,40,738 1.26 30,001 - 40,000 588 0.23 2,08,57,539 0.85 40,001 - 50,000 434 0.17 2,03,41,285 0.83 50,001 - 1,00,000 676 0.26 4,91,01,553 1.99 1,00,001 & Above 517 0.20 202,91,89,616 82.41 Total: 2,56,806 100.00 246,23,79,559 100.00

Shareholding Pattern of the Company as on March 31, 2015Category of Shareholder Number of Shares held Percentage of ShareholdingPromoter and Promoter Group 167,57,79,677 68.06Mutual Funds 10,869 0.00Financial Institutions(FIs)/Banks 9,84,62,047 4.00Bodies Corporate 7,90,52,170 3.21Foreign Institutional Investors(FIIs) 3,73,09,868 1.52Non-Resident Indians(NRIs)/Foreign Companies 1,74,26,467 0.71Foreign Portfolio Investor (Corporate) 3,44,29,259 1.40Others (Public) 51,99,09,202 21.10Total 246,23,79,559 100.00

(xiii) Dematerialisation of Shares and Liquidity

About 99.99% of the outstanding equity has been in dematerialised form as on March 31, 2015.

(xiv) Outstanding Convertible Instruments

As of March 31, 2015, there are no outstanding convertible instruments.

(xv) Equity Shares in Suspense Account

The disclosure as required under Clause 5A of the Listing Agreement is given below:

a. Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year: 42 shareholders and outstanding Equity Shares are 31,040.

b. Number of shareholders who approached issuer for transfer of shares from suspense account during the year: Nil

c. Number of shareholders to whom shares were transferred from suspense account during the year: Nil

d. Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year: 42 shareholders and outstanding Equity Shares are 31,040.

e. The voting rights on these equity shares shall remain frozen till the rightful owner of such shares claims the shares.

(xvi) Plant Locations of Lanco Infratech Limiteda. Wind Energy Project at Chikkasidavanahalli Village, Chitradurga District, Karnataka;

b. Solar Energy Project at Bhadrada Village, Tehsil Sami, Patan District, Gujarat;

c. Solar Energy Project at Chadiyana Village, Tehsil Sami, Patan District, Gujarat;

d. Solar Energy Project at Charanka Village, Tehsil Saltanpur, Patan District, Gujarat;

Plant Locations of Subsidiary Companiesa. Lanco Kondapalli Power Limited

Kondapalli IDA, Kondapalli – 521 228, IbrahimpatnamMandal, Krishna District Andhra Pradesh;

b. Lanco Tanjore Power Company Limited

Karuppur Village, ThiruvidaimaruthurTaluk, Tanjore District, Tamil Nadu;

Boards’ Report

55

c. Lanco Amarkantak Power Limited

Pathadi Village, P.O.-Tilkeja, Korba District, Chattisgarh - 495 667;

d. Lanco Mandakini Hydro Power Private Limited

Village & Post-Rampur, Rudraprayag District, Uttarakhand - 246471;

e. Lanco Teesta Hydro Power Limited

Teesta VI HEP, SubinKhor, South Sikkim;

f. Lanco Hydro Power Limited

IKU II :Saleg Village, Tehsil Dharamshala, Kangra District, Himachal Pradesh; BanerIII : Jai Village, Tehsil Palampur, Kangra District, Himachal Pradesh;

g. Lanco Thermal Power Limited

Upper Khauli :Salli Village, Tehsil Shahpur, Kangra District, Himachal Pradesh;

Drinidhar :Bhiora Village, Tehsil Sihunta, Chamba District, Himachal Pradesh;

h. Lanco Anpara Power Limited

Phase I :Anpara Village, Sonebhadra District, Uttar Pradesh;

Phase II :Bhognipur, Rambhai Nagar District, Uttar Pradesh;

i. Lanco Solar Private Limited

Solar Manufacturing Plant : Village - Mehrumkhurd, Chawardhal Dist Rajnandgaon, Chattisgarh;

Solar PV Project : Village Lathi, Tehsil – Pokaran, District Jaisalmer, Rajasthan;

j. Khaya Solar Projects Private Limited

Askandra Village, Nachna – II Tehsil Nachana, Jaisalmer District, Rajasthan;

k. Diwakar Solar Projects Limited

Askandra Village, Nachna – II Tehsil Nachana, Jaisalmer District, Rajasthan;

(xvi) Address for Correspondence

Registered Office:Plot No. 4, Software Units Layout, HITEC City, Madhapur, Hyderabad – 500 081, Telangana, India, Phone: +91-40-40090400, Fax: +91-40-23116127, Email:[email protected], Website: www.lancogroup.com

Corporate Office:

Lanco House, Plot No. 397, Udyog Vihar, Phase-3, Gurgaon – 122016, Haryana. Phone: +91-124-4741000-04, Fax: +91-124-4741878

Declaration by CEO Pursuant to Clause 49(II)(E)(2) of the Listing Agreement

As the Managing Director of LancoInfratech Limited, as required by Clause 49(II)(E)(2) of the Listing Agreement executed with the National Stock Exchange of India Limited and BSE Limited, I hereby declare that all the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Company’s Code of Conduct and Ethics for the Financial Year 2014-15.

For Lanco Infratech Limited

Place: Gurgaon G. Venkatesh BabuDate: July 29, 2015 Managing Director

II. NON-MANDATORY REQUIREMENTS

1. THE BOARD: The Chairman of the Board is an Executive Chairman of the Company.

2. SEPARATE POSTS OF CHAIRMAN AND CEO: The posts of Chairman and Managing Director are separate in the Company.

3. REPORTING OF INTERNAL AUDITOR: The Internal Auditor reports directly to the Audit Committee.

Chief Executive Officer (CEO) and Chief Financial Officer (CFO) Certification

ToThe Board of Directors ofLANCO INFRATECH LIMITEDWe, the undersigned, in our respective capacities as the Managing Director and Chief Financial Officer of Lanco Infratech Limited (“the Company”), to the best of our knowledge and belief certify that:a) We have reviewed Financial Statements and the Cash Flow Statements for the Year ended 31st March, 2015 and based on our knowledge

and belief:I. these statements do not contain any materially untrue statements or omit any material fact or contain statements that might be

misleading;II. these statements along with notes and disclosures together present a true and fair view of the Company’s affairs and are in

compliance with the existing Accounting Standards, applicable Laws and Regulations.b) We further state that to the best of our knowledge and belief, there are no transactions entered into by the Company during the year

which are fraudulent, illegal or violative of the Company’s Code of Conduct.c) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the same over the Financial

Reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of such internal controls, if any, of which they are aware and the steps we have taken and propose to take to rectify these deficiencies.

d) We have indicated, wherever applicable, to the Auditors and Audit Committee:I. significant changes, if any, in internal control over financial reporting during the year;II. significant changes, if any, in Accounting Policies made during the year and that the same have been disclosed in the notes to the

financial statements; andIII. instances of significant fraud of which we have become aware and the involvement therein, if any, of the Management or an

Employee having a significant role in the Company’s internal control system over financial reporting.

For Lanco Infratech Limited

T. Adi Babu G. Venkatesh Babu Chief Financial Officer Managing DirectorPlace: GurgaonDate : May 29, 2015


56

Corporate Governance Compliance CertificateTo the Members of M/s Lanco Infratech Limited

We have examined the relevant records of M/s. Lanco Infratech Limited for the purpose of certifying compliance of the conditions of the Corporate Governance under Clause 49 of the Listing Agreement with the Stock Exchanges for the financial year ended 31st March, 2015. We have obtained all the information and explanations which to the best of my knowledge and belief are necessary for the purposes of Certification.

The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to the procedure and implementation process adopted by the Company for ensuring the compliance of the Conditions of the Corporate Governance. This Certificate is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with all the mandatory conditions of Corporate Governance as stipulated in the said Listing Agreement(s).

For KBG Associates Company Secretaries

Srikrishna S ChintalapatiPlace: Hyderabad PartnerDate: July 14, 2015 C.P. No. 6262

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57

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69.9

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sub

sidi

ary

com

pani

es, h

ave

been

giv

en b

ased

on

the

exch

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rate

on

31.0

3.20

15.

INR

vs.

USD

GBP

EURO

CNY

ZAR

(Ran

d)A

UD

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NPR

IDR

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tate

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w IN

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ty th

ousa

nd a

re a

ppea

ring

as z

ero.

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# In

vest

men

ts e

xcep

t inv

estm

ent i

n su

bsid

iarie

s, jo

int v

entu

res

and

asso

ciat

es.

Boards’ Report

59

Names of Subsidiaries which are yet to commence operations -

Sl. No. Name of the Companies Sl. No. Name of the Companies1 Arneb Power Private Limited 17 Western Australia Coal Terminal Pty Ltd

2 Lanco Teesta Hydro Power Limited 18 Lanco Infratech Nepal Private Limited

3 Lanco Mandakini Hydro Energy Private Limited 19 Lanco Vidarbha Thermal Power Limited

4 Lanco Rambara Hydro Private Limited 20 Himavat Power Limited

5 Diwakar Solar Projects Limited 21 Regulus Power Private Limited

6 Helene Power Private Limited 22 Pragdisa Power Private Limited

7 Lanco Wind Power Private Limited 23 Vainateya Power Private Limited

8 Amrutha Power Private Limited 24 Avior Power Private Limited

9 Spire Rotor Private Limited 25 Mirach Power Limited

10 Emerald Orchids Private Limited 26 Basava Power Private Limited

11 JH Patel Power Project Private Limited 27 Siddheswara Power Private Limited

12 Mahatamil Mining and Thermal Energy Limited 28 Lanco Babandh Power Limited

13 Tasra Mining & Energy Company Private Limited 29 Banas Thermal Power Private Limited

14 Bhola Electricity Pvt Ltd 30 Spica Thermal Power Private Limited

15 Sirajganj Electric Pvt Limited 31 Nekkar Power Private Limited

16 Lanco Kanpur Highways Limited 32 Lanco Horizon Properties Private Limited

Names of Subsidiaries which have been liquidated or sold during the year -

Sl. No. Name of the Companies Sl. No. Name of the Companies Sl. No. Name of the Companies1 Lanco Budhil Hydro Power Private Limited 4 Lanco Solar International Limited 7 Lanco Solar Holdings LLC (USA)

2 SolarFi SP 07 5 Lanco Solar International GMBH 8 Lanco Virgin Islands- 1 LLC

3 SolarFi SP 06 6 Lanco US PV Investments B.V. 9 Lanco SP PV 1 Investments B.V.


60

PART

“B” :

ASS

OCI

ATES

Stat

emen

t pur

suan

t to

Sect

ion

129

(3) o

f the

Com

pani

es A

ct ,

2013

rela

ted

to A

ssoc

iate

Com

pani

es a

nd Jo

int V

entu

res

Sl.

No.

Nam

e o

f Ass

ocia

tes

#La

test

au

dite

d Ba

lanc

e Sh

eet D

ate

Shar

es o

f Ass

ocia

te/J

oint

Ven

ture

s he

ld

by th

e co

mpa

ny o

n th

e ye

ar e

ndN

etw

orth

at

trib

utab

le

to S

hare

hold

ing

as p

er la

test

au

dite

d Ba

lanc

e Sh

eet

(` in

cro

re)

Profi

t/Lo

ss fo

r the

yea

r

No.

Am

ount

of

Inve

stm

ent i

n A

ssoc

iate

s /

Join

t Ven

ture

(`

in c

rore

)

Exte

nt o

f H

oldi

ng %

*

Cons

ider

ed in

Co

nsol

idat

ion

(` in

cro

re)

Not

Co

nsid

ered

in

Cons

olid

atio

n

Des

crip

tion

of

how

ther

e is

si

gnifi

cant

in

fluen

ce

Reas

on w

hy th

e as

soci

ate/

join

t ve

ntur

e is

not

co

nsol

idat

ed1

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E Re

new

able

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rgy

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ate

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ited

31/3

/201

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900

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ting

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re is

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nific

ant i

nflue

nce

due

to p

erce

ntag

e(%

) of S

hare

Cap

ital

* Ba

sed

on E

quity

& C

onve

rtib

le P

refe

renc

e sh

are

hold

ing

# Ba

sed

on th

e un

audi

ted

finan

cial

sta

tem

ents

Nam

es o

f Ass

ocia

tes

/ Joi

nt V

entu

res

whi

ch a

re y

et to

com

men

ce o

pera

tion

s :-

Sl. N

o.

Nam

e of

the

Com

pani

es

1

KVK

Ener

gy V

entu

res

Priv

ate

Lim

ited

Nam

es o

f Ass

ocia

tes

/ Joi

nt V

entu

res

whi

ch h

ave

been

liqu

idat

ed o

r sol

d du

ring

the

year

-

Sl. N

o.

Nam

e of

the

Com

pani

es

Nil

Boards’ Report

61


Standalone Financial Statements

INDEPENDENT AUDITOR’S REPORTTo

The Members of Lanco Infratech Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Lanco Infratech Limited (‘‘the Company’’), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, the Cash flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at March 31, 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

Attention is invited to

a) Note No.43 to the financial statements, which explain the transaction entered by the Company along with its step down subsidiaries for sale of their 100% stake in Udupi Power Corporation Limited (UPCL), as per the agreed terms, with effect from August 18, 2014 on closure of the transaction, the result of operations of the UPCL, shall belong to the Buyers. The possible effects of this transaction is not considered in this financial statements.

b) Note No.51 to the financial statements, which explain the structuring undertaken by the management during the year ended March 31, 2012. The Company’s investment as of March 30, 2012 in various subsidiaries and associates was transferred to wholly owned step


63

down subsidiaries and to an associate of wholly owned step down subsidiary aggregating to ` 6,815.51 Crores that require lenders and customer approvals. Management has received many such approvals aggregating to 96% in value, of the lenders consenting to the restructuring, the management is confident of receiving balance approvals from lenders and customer in near future and has taken the effect of these transfers while preparing these financial statements. In case any of these residual approvals are not granted, the management will have to revisit the structure and the consequential impact would then be recorded in the financial statements.

c) Note No.53 to the financial statements, regarding the adequacy of disclosure concerning the Company’s ability to meet its financial obligations including loans, overdue loans, unpaid interest and ability to fund obligations pertaining to operations including unpaid creditors, repayment of advances for ensuring normal operations and investments in ongoing projects. During the year, the Company incurred a Net Loss of ` 672.23 Crores and has loans aggregating ` 267.63 Crores falling due over next twelve months period which also includes unpaid dues of the Company as at March 31, 2015. These matters essentially require the Company to garner such additional cash flows to fund the operations as well as for meeting the investment obligations towards various on-going projects comprising power and other infrastructure projects which are currently going through low level of implementation activities. In this regard the Company approached Corporate Debt Restructuring (CDR) Cell with a scheme seeking certain reliefs in relation to repayment timelines of loans and accumulated unpaid interest and additional funding for its operations. The restructuring envisages certain sacrifices from lenders and commitments from Company towards infusion of additional funds through divestment of existing assets or otherwise. In the financial year 2013-14, CDR Empowered Group approved the Debt Restructuring Scheme. The Company has completed the required obligations under the scheme to enable the infusion of additional funds from lenders and the lenders have disbursed partially. Notwithstanding certain variances in contracted terms under CDR scheme in relation to partial disbursements so far made and their utilization thereon, together with delay in implementation of CDR scheme did not still enable the Company to achieve the anticipated performance levels of operations at EPC and Project Companies which has consequential impact on financial statements in the form of incurrence of further losses and cost overruns due to delayed execution at the Project level which is currently not quantifiable and as explained by management steps have been initiated to recommence the EPC operations as well as the implementation of projects under construction. However, the financial statements have been prepared under the assumption, considering the management assessment to recover the balance dues from various State Electricity Boards including those of which under litigations and management plan to get requisite further funding from various other sources including the CDR scheme, cost overrun approvals by the lenders for the under construction projects and the Company’s efforts in disposing few more assets. These submissions and assertions by the management as evaluated by lenders envisage that the Company has the ability to garner the required cash flows, which have not been independently assessed by us. Relying on the above, no adjustments have been made in these financial statements towards any possible impact on account of low key operations and delayed execution of projects under implementation.

d) Note No.54 to the financial statements, in relation to the carrying value of the assets held by Lanco Anpara Power Limited (LAnPL), a step down subsidiary of the Company. Though LAnPL has been incurring losses ever since the commencement of commercial operation and accumulated losses incurred so far eroded the net worth significantly, taking into consideration LAnPL management’s assessment of the situation including efforts towards seeking revision in tariff pending before the regulator, the management of the Company is of the view that the carrying value of the asset of LAnPL is realizable at the value stated therein. Accordingly no adjustments have been made in these financial statements.

e) Note No.55 to the financial statements, dealing with cancellation of coal blocks by the Hon’ble Supreme Court, which included coal mine jointly allotted to Tamil Nadu Electricity Board and Maharashtra State Mining Corporation Limited, the Allottees. Mahatamil Mining and Thermal Energy Limited (MMTEL), a subsidiary of the Company, entered into Coal Mining Services Agreement with the Allottees of the mine, pursuant to which, the amount invested amounting to ` 170.94 Crores, the realizability of which is dependent on the compensation to be awarded under the Ordinance issued by Government of India. The Company obtained a legal opinion in this regard based on which, the investment is considered to be recoverable and, hence no adjustments have been made in these financial statements.

f ) Note No.56 to the financial statements, in relation to the carrying value of investment held by the Company in Lanco Resources International Pte Limited (LRIPL) a subsidiary of the Company, where the accumulated losses exceeded the net worth of LRIPL, taking into account the management’s assessment of the situation including short term initiatives to be implemented to significantly enhance the profitability in the medium to long run, the management of the Company is of the view that the carrying value of the assets are realizable at the value stated therein. Accordingly no adjustments have been made in these financial statements.

g) Note No.57 to the financial statements, in relation to Lanco Kanpur Highways Limited (LKHL), a subsidiary of the Company, has received a notice of termination to the Concession Agreement from National Highways Authority of India (NHAI) and LKHL has also issued a notice of termination to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. As on March 31, 2015 LKHL and its EPC contractor have incurred certain costs towards the project, the realizability of these amounts is dependent on the outcome of the arbitration proceedings.


64

h) Note No.58 to the financial statements, which explains the payment of managerial remuneration aggregating to ` 1.69 Crores which is in excess of the permissible limits of remuneration payable under the provisions of the Companies Act, 2013 read with rules notified thereon. The Company approached the Central Government seeking its approval for payment of such remuneration in excess of limits and the Central Government in this regard directed the Company to obtain a No Objection from the CDR lenders for granting required approval. The Company is in the process of seeking the required No Objection from lenders and accordingly no adjustments have been made in these financial statements.

Our opinion is not qualified in the respect of the above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2015 (“the Order”), issued by the Central Government of India in terms of Sub Section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in Paragraphs 3 and 4 of the Order.

2. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) rules, 2014.

e) The matters described in the Clause (c) and Clause (f ) of the Emphasis of Matter Paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f ) On the basis of written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note No.40 (A) to the financial statements.

ii. The Company has made provisions, as required under applicable laws or accounting standards in respect of the material foreseeable losses on the long term contract. The Company did not have any long term derivative contracts.

iii. There are no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

For Brahmayya & Co.Chartered AccountantsFirm registration Number: 000511S

Lokesh VasudevanPlace: Gurgaon PartnerDate: May 29, 2015 Membership Number: 222320


65

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORTThe Annexure referred to in Clause 1 of “Report on Other Legal and Regulatory Requirements” Paragraph of the Independent Auditor’s Report of even date to the members of Lanco Infratech Limited on the financial statements as of and for the year ended March 31, 2015

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year. In respect of inventories lying with third parties, thesehave substantially been confirmed by them.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification of inventory.

(iii) According to the information and explanations given to us, the Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintainedunder Sec 189 of the Companies Act, 2013. Accordingly,the provisions of clause (iii),(iii) (a) and (iii) (b) of Paragraph 3 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weakness in internal control system.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) The Company is regular in depositing the undisputed statutory dues including provident fund, employee’s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with the appropriate authorities though there have been delays in some instances.

According to the information and explanations given to us,no undisputed statutory dues payable in respect of provident fund, employee’s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with the appropriate authorities which were outstanding at the year end for a period of more than six months from the date they became payable except as follows:-

Name of the Statute Nature of the Dues Amount (` in Crores)

Due Date Date of Payment

The Building and Other Construction Workers Welfare Cess Act, 1996

Labour Building and Other Construction Workers Welfare Cess

0.25 FY 2012-13 to FY 2014-15

Yet to be remitted

The Income Tax Act, 1961 Interest on Tax Deducted at Source 0.00** 30th April 2014 Yet to be remitted

**Amount involved is ` 41,363.


66

(b) According to the records of the Company, the dues outstanding of income tax or sales tax or wealth tax or service tax or duty of custom or duty of excise or value added tax or cess, that have not been deposited, on account of dispute are as follows:

Name of the Statute Nature of the Dues

Amount (` in

Crores)

Amount paid under Protest

(` in Crores)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961 Income Tax 3.74 - Assessment year 2009-10

Commissioner of Income Tax (Appeals)





Income Tax Act, 1961 Income Tax 0.02 - Assessment Year 2012-13



Honorable High Court-Hyderabad






Dispute Resolution Panel-Hyderabad

Andhra Pradesh Tax on Entry of Goods Act 2001

Entry Tax 0.02 - Financial Year 2007-08

Commercial Tax Officer, Begumpet

Andhra Pradesh General Sales Tax Act 1956

Sales Tax 0.03 - Financial Year 2001-02

The Sales Tax Appellate Tribunal, Hyderabad

Andhra Pradesh Value added Tax Act 2005


The Appellate Deputy Commissioner, CT. Panjagutta-Hyderabad

Tamil Nadu Value Added Tax Act 2006

Sales Tax (Including Penalty)

0.38 - Financial Year 2007-08

The Appellate Deputy Commissioner, CT Chennai



Joint Commissioner (North) Chennai


Value Added Tax


Assistant Commissioner (CT), T. Nagar (East) Assessment Circle, Chennai


Value Added Tax




Value Added Tax



Tamil Nadu Value Added Tax Act, 2006

Value Added Tax




Value Added Tax




67


Amount (` in

Crores)


(` in Crores)




Value Added Tax



The Central Sales Tax Act, 1956

Central Sales Tax



Maharashtra Value Added Tax Act, 2002


Deputy Commissioner of Sales Tax, Mumbai

Bihar Value Added Tax Act, 2005


The Joint Commissioner of Commercial Taxes (Appeals) Central Division, Patna

Rajasthan Value Added Tax Act


Commercial Tax Officer, Chittorgarh

Andhra Pradesh Value added Tax Act, 2005

Penalty 0.06 - Financial Year 2011-12

ACTO, Begumpet Circle, Hyderabad

West Bengal Value Added Tax

Value Added Tax


Assistant Commissioner of Commercial Taxes, CTO, Raiganj


Value Added Tax


Assistant Commissioner, T. Nagar East Assessment Circle, Chennai


Value Added Tax


Assistant Commissioner, Audit Wing – 2



Assistant Commissioner, Audit Wing – 2

Andhra Pradesh Value added Tax Act, 2005



Gujarat Value Added Tax Act, 2003

Value Added Tax


ACCT, Vyara, Gujarat

Madhya Pradesh Value Added Tax Act, 2002

Value Added Tax


Deputy Commissioner of Commercial Taxes, Jabalpur, Division 1

Madhya Pradesh Value Added Tax Act, 2002



Madhya Pradesh Value Added Tax Act 2002



The Finance Act, 1994 Service Tax 0.14 - April 2005 - March 2008

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 0.16 - June 2005 - August 2008

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 15.58 2.66 June 2007- March 2008

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 3.86 - June 2007- July 2008 CESTAT, Bengaluru


CESTAT, Bengaluru


68


Amount (` in

Crores)


(` in Crores)



The Finance Act, 1994 Service Tax 0.01 0.01 April 2008 - March 2009

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 0.38 0.38 July 2008- September 2009

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 6.58 - April 2008 - June 2009

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 8.98 - July 2009- March 2010

CESTAT, Bengaluru

The Finance Act, 1994 Service Tax 0.11 - October 22, 2009 - February 28, 2011

CESTAT, Bengaluru


The Commissioner-Delhi

The Finance Act, 1994 Service Tax 0.48 - March 2011 - March 2012


The Finance Act, 1994 Service Tax 0.00** - April 2008 - March 2009






**Amount involved is ` 16,927.

(c) The Company is not required to transfer any amount to the Investor Education and Protection Fund.

(viii) The Company has no accumulated losses as at the end of the financial year and it has incurred cash losses during the current financial year and in the immediately preceding financial year.

(ix) According to the records of the Company examined by us and the information and explanations given to us, the Company has not paid principal and interest of ` 0.49 Crores and ` 52.22 Crores respectively to banks and financial institutions as at the balance sheet date.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the Company.

(xi) Based on the information and explanations given to us by the management, term loans disbursed, including Priority Loan under CDR scheme have been utilized for the purposes of CDR Scheme cash flows envisaged as approved by lenders under the CDR package.

(xii) Based on the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For Brahmayya & Co.Chartered AccountantsFirm registration Number: 000511S

Lokesh VasudevanPlace: Gurgaon PartnerDate: May 29, 2015 Membership Number: 222320


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Balance Sheet as at March 31, 2015(` Crores)

Notes March 31, 2015 March 31, 2014I EQUITY & LIABILITIES

Shareholders' FundsShare Capital 3 245.09 239.24 Reserves and Surplus 4 1,785.21 2,434.65

2,030.30 2,673.89 Non Current LiabilitiesLong Term Borrowings 5 5,433.45 4,011.50 Other Long Term Liabilities 7 4,032.10 4,760.92 Long Term Provisions 8 29.18 41.09

9,494.73 8,813.51 Current LiabilitiesShort Term Borrowings 9 1,155.18 1,646.16 Trade Payables 10 2,007.28 2,307.94 Other Current Liabilities 11 5,779.69 3,685.21 Short Term Provisions 8 23.34 54.86

8,965.49 7,694.17 TOTAL 20,490.52 19,181.57

II ASSETSNon Current AssetsFixed AssetsTangible Assets 12 895.85 1,028.47 Intangible Assets 13 3.10 4.78 Capital Work in Progress 14 1.73 3.76

900.68 1,037.01 Non Current Investments 15 9,708.29 8,295.61 Deferred Tax Assets (net) 6 17.75 17.75 Long Term Loans and Advances 16 1,409.91 1,698.82 Other Non Current Assets 17 718.68 543.73

12,755.31 11,592.92 Current AssetsCurrent Investments 18 1,253.76 - Inventories 19 1,426.64 1,422.44 Trade Receivables 17.1 1,445.53 1,700.87 Cash and Bank Balances 20 329.65 122.63 Short Term Loans and Advances 16 3,020.18 4,261.47 Other Current Assets 17.2 259.45 81.24

7,735.21 7,588.65 TOTAL 20,490.52 19,181.57 Summary of Significant Accounting Policies 2.1

The accompanying notes and other explanatory information are an integral part of the Financial Statements.As per our report of even date.

For and on behalf of the Board of Directors of Lanco Infratech Limited

For Brahmayya & Co L. Madhusudhan Rao G. Venkatesh BabuChartered Accountants Executive Chairman Managing DirectorFirm Registration No. 000511S DIN - 00074790 DIN - 00075079

Lokesh Vasudevan T. Adi Babu A. Veerendra KumarPartner Chief Financial Officer Company SecretaryMembership No. 222320

Place: Gurgaon Place: GurgaonDate: May 29, 2015 Date: May 29, 2015


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Statement of Profit and Loss for the year ended on March 31, 2015(` Crores)

Notes March 31, 2015 March 31, 2014I. INCOME

Revenue from Operations 21 1,395.52 2,236.40 Other Income 22 135.19 102.97 Total Revenue ( I ) 1,530.71 2,339.37

II. EXPENSES Cost of Materials Consumed 23 764.67 1,798.46 Subcontract Cost 308.28 363.39 Construction and Site Expenses 24 70.77 117.70 (Increase) / Decrease in Construction Work in Progress 25 3.65 (151.47)Employee Benefits Expenses 26 181.51 185.60 Other Expenses 27 125.62 239.81 Total Expenses ( II ) 1,454.50 2,553.49

III. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) (I-II) 76.21 (214.12)Finance Cost 28 772.31 627.73 Depreciation and Amortization Expense 29 121.28 117.24

IV. Profit / (Loss) before Exceptional Items and Tax (817.38) (959.09)V. Exceptional Items 30 99.75 (0.90)VI. Profit / (Loss) before Tax ( IV + V) (717.63) (959.99)VII. Tax Expense

Current Tax / Minimum Alternate Tax (MAT) Payable - - Less: MAT Credit Entitlement - - Net Current Tax - - Relating to Previous Periods (45.40) - Deferred Tax - - Total Tax Expense (45.40) -

VIII. Profit / (Loss) after Tax for the Period (VI - VII) (672.23) (959.99)(Balance Carried to Balance Sheet)

Earnings Per Equity Share - (Face value of share ` 1/-) : 31Basic (`) (2.83) (4.08)Diluted (`) (2.83) (4.08)

Summary of Significant Accounting Policies 2.1


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Cash Flow Statement for the year ended on March 31, 2015(` Crores)

March 31, 2015 March 31, 2014

A. CASH FLOW FROM OPERATING ACTIVITIESProfit / (Loss) before Tax (717.63) (959.99)Adjustments for:Depreciation and Amortization 121.28 117.24(Profit) / Loss on Sale of Non - Current Investments (73.30) -(Profit) / Loss on Sale of Fixed Assets 27.03 14.89Unrealised (Gain) / Loss on Foreign Exchange Fluctuations (Net) 19.05 97.42Provision for diminution in value of Investment in Subsidiary company 0.03 -Liabilities and Provisions no longer required written back (0.79) (0.47)Provision for Advances / Claims / Debts 18.51 32.59Employee Stock Option Charge during the period 3.33 4.50Interest Income (111.07) (85.18)Dividend Income (3.92) (0.84)Interest Expenses 772.31 627.73Cash Generated/(Used) Before Working Capital Changes 54.83 (152.11)Movement In Working CapitalIncrease / (Decrease) in Trade Payables (201.61) (96.09)Increase / (Decrease) in Provisions (Short Term & Long Term) (2.93) (19.51)Increase / (Decrease) in Other Liabilities (115.63) 486.88Increase / (Decrease) in Other Long Term Liabilities (0.01) (436.99)Increase / (Decrease) in Advance from Customers 459.77 (671.79)(Increase) / Decrease in Trade Receivables 114.99 643.69(Increase) / Decrease in Inventories (4.20) (111.04)(Increase) / Decrease in Long Term Loan and Advances (199.57) 111.86(Increase) / Decrease in Short Term Loan and Advances 96.22 (33.08)(Increase) / Decrease in Other current Assets (125.32) 0.89Cash Generated From/(Used in) Operations 76.54 (277.29)Direct Taxes (Paid) / Refunded (30.62) 94.61Net Cash Flow From / (Used in) Operating Activities 45.92 (182.68)

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIESPurchase of Fixed Assets (12.91) (9.65)Proceeds from Sale of Fixed Assets 4.44 59.98Proceeds from Sale of Non Current Investments - Subsidiaries 370.27 57.13Proceeds from Sale of Non Current Investments - Others 74.55 -Purchase of Non Current Investments - Subsidiaries (433.80) (752.60)Purchase of Non Current Investments- Others (169.22) (87.78)Advance received against proposed sale of Investments 517.00 -Maturities / (Purchase) of Long term FDs/MMDs (Net) (16.64) 8.48Inter Corporate Loans (Given) / Refunded (Net) (572.43) 169.72Advance for investment given to Subsidiaries (Net) - (6.21)Advance for investment Refunded / (given) to Others (Net) - 594.87Dividend Income Received from Subsidiary company - 0.03Dividend Income received from others 3.92 0.81Interest Income Received 21.32 26.02Net Cash Flow From / (Used in) Investing Activities (213.50) 60.80


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(` Crores)

March 31, 2015 March 31, 2014

C. CASH FLOW FROM / (USED IN) FINANCING ACTIVITIES(Repayment) /Proceeds of/from Short - Term Borrowings (Net) (134.75) (296.56)Proceeds from Foreign Currency Loan 119.09 102.66Repayment of Foreign Currency Loan (108.87) -Proceeds from Long Term Rupee Loan 1,438.36 463.75Repayment of Long Term Rupee Loan (83.38) (87.06)Proceeds on account of exercise of ESOP shares 0.39 -Inter Corporate Loans (Repaid)/Received (Net) (365.42) 185.39Interest Paid (507.46) (169.84)Net Cash Flow From / (Used in) Financing Activities 357.96 198.34Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 190.38 76.46Cash and Cash Equivalents at the beginning of the Period 113.30 36.84Cash and Cash Equivalents at the end of the Period 303.68 113.30Components of Cash and Cash EquivalentsCash and cheques on Hand 0.07 0.08Balances with Banks- On Current Accounts 298.71 113.22- On Deposit Accounts 4.90 -Cash and cash Equivalent as per Note 20 303.68 113.30

Notes:

1 The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard - 3 on Cash Flow Statements, specified under section 133 of the Companies Act, 2013.

2 Previous Year figures have been regrouped and reclassified to conform to those of the current year.







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reviewed periodically by management and the cumulative effect of any changes in estimates in proportion to the cumulative revenue is recognised in the period in which such changes are determined. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately.

Amounts due in respect of price escalation claims and/or variation in contract work are recognized as revenue only if the contract allows for such claims or variations and/or there is evidence that the customer has accepted it and are capable of being reliably measured.

Liquidated Damages / Penalty as per the contracts / Additional Contract Claims under the contract entered into with Vendors and Contractors are recognised at the end of the contract or as agreed upon.

Sale of Power

Revenue from sale of energy is recognized on the accrual basis in accordance with the provisions of Power Purchase Agreement. Claims for delayed payment charges and any other claims, which the company is entitled to under the Power Purchase Agreement, are accounted for in the year of acceptance.

Sale of Coal

Revenue from the sale of coal is recognized when the substantial risks and rewards of ownership are transferred to the buyer as per the respective agreements and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verified Emission Reductions (VERs) and Certified Emission Reductions (CERs) is recognized on sale of eligible credits.

Insurance Claims

Insurance claims are recognized on actual receipt / acceptance of the claim.

Management Consultancy

Income from project management / technical consultancy is recognized as per the terms of the agreement on the basis of services rendered.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders’ right to receive payment is established by the Balance sheet date.

iii. Tangible Fixed AssetsTangible assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of tangible assets which takes substantial period of time to get ready for its intended use are also included to the

1. Corporate InformationLanco Infratech Limited is an integrated infrastructure developing company. The company provides engineering, procurement, construction, commissioning and project management services on a turnkey basis to the power Sector for thermal (coal fired and gas fired) and hydro power plants as well and also construction of highways, power plants, water supply and irrigation projects including dam, tunnels etc. The Company is also into generation of energy from wind and solar power plants.

2. Basis of preparationThe financial statements have been prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013(‘Act’), read with Rule 7 of the Companies(Accounts) Rules,2014 and the relevant provisions of the Act(to the extent notified). The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the company and are consistent with those used in the previous year.

2.1 Summary of significant accounting policies

i. Use of EstimatesThe preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

ii. Revenue RecognitionRevenue is recognized based on the nature of activity to the extent it is probable that the economic benefits will flow to the Company and revenue can be reliably measured.

The company collects service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue.

The following specific recognition criteria must also be met before revenue is recognised.

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured on the basis of stage of completion which is as per joint surveys and work certified by the customers.

Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably.

The estimates of contract cost and the revenue thereon are

Notes to financial statements for the year ended March 31, 2015Annual Report 2014-2015

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extent they relate to the period till such assets are ready to be put to use. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

The company adjusts exchange differences arising on translation/settlement of long term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

iv. Intangible Fixed Assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

v. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

vi. Depreciation / Amortisation:

Tangible Assets:-

Depreciation is provided on Straight Line Method as per the provisions of schedule II of the Companies Act, 2013 or based on the useful life estimated on the technical assessment whichever has a lower life.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in “furniture and fixtures”` are amortized over the period of lease or estimated useful life whichever is shorter.

Certain project related assets including temporary structures are depreciated over the respective estimated project periods. Depreciation on ‘Wooden Scaffoldings’ and ‘Metal Scaffoldings’ is provided considering the useful life of 1 Years and 3 Years respectively, which are grouped under plant and machinery.

In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.

Intangible Assets:-

Computer Software is amortised over an estimated useful life of 4 years.

vii. InvestmentsInvestments,those are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

viii. InventoriesConstruction materials, raw materials, Consumables, Stores and Spares are valued at lower of cost and net realizable value. Cost is determined on weighted average cost method.

Construction Work-in-progress related to project works is valued at lower of cost or net realizable value, where the outcome of the related project is estimated reliably. Cost includes cost of materials, cost of borrowings and other related overheads.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

ix. Borrowing CostsBorrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.

x. ClaimsClaims for duty drawback are accounted for on accrual basis:

i. Where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

ii. Where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

xi. Employee Benefitsi. Retirement benefits in the form of Provident Fund are a

defined contribution scheme and the contributions are charged to the statement of profit and loss for the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

ii. Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.


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iii. Retention bonus liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iv. Compensated absences are provided for on the basis of an actuarial valuation on unit credit method at the end of each financial year.

v. Actuarial gains/losses are immediately taken to statement of profit and loss and are not deferred.

vi. The amount of Non-current and Current portions of gratuity and compensated absences is classified as per the actuarial valuation at the end of each financial year.

xii. Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items, or on reporting such monetary items of the company at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition/ construction of a depreciable capital asset, are capitalized and depreciated over the balance life of the asset and in other cases are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” in the company’s financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in each of such period. For this purpose, the company treats a foreign monetary item as “long term foreign currency monetary item”, if it has a term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation purposes

In case of forward exchange contracts or any other financial instruments that is in substance a forward exchange contract to hedge the foreign currency risks the premium or discount arising at the inception of the contract is amortised as expenses or income over the life of the contract. Exchange differences arising on such contracts are recognized in the period in which they arise.

Derivative Instruments

Losses(net of gains) on account of outstanding Forward exchange contracts which are on account of firm commitments and / or in respect of highly probable forecast transaction on balance sheet date are accounted on Mark to Market basis keeping in view of the principle of prudence. The same is as per ICAI announcement on derivatives.

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under (AS) - 11, Accounting for the Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio basis, and the net loss is charged to the income statement. Net gains are ignored.

xiii. LeasesOperating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are charged to the Statement of profit and loss on straight line basis over the lease term.

As Lessor

Assets given on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are recognised in the statement of profit and loss on accrual basis.

Finance Lease

Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as finance cost in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xiv. Earnings per ShareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.


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xv. Employee Stock Option SchemeThe Company has formulated an Employees Stock Option Scheme to be administered through a Trust. The scheme provides that subject to continued employment with the company, employees of the company and its subsidiaries are granted an option to acquire equity shares of the company that may be exercised within a specified period. The company follows the intrinsic value method for computing the compensation cost for all options granted which will be amortized over the vesting period. ESOP has been accounted as per the SEBI guidelines and guidance note issued by ICAI.

xvi. Taxes on IncomeTax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax laws. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each balance sheet date the company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

xvii. Minimum Alternative Tax (MAT)MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The

company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

xviii. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The company has a present obligation as a result of past event,

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

a) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) A present obligation arising from past events, when no reliable estimate is possible;

c) A possible obligation arising from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.


xix. Cash and Cash equivalents:

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

xx. Measurement of EBITDA

As permitted by the Schedule III to the Companies Act, 2013, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


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3 Share Capital(` Crores)

As at March 31, 2015


Authorised 12,000 (March 31, 2014: 500) Crores Equity Shares of `1/- each 12,000.00 500.00

12,000.00 500.00 Issued, Subscribed and Paid Up Equity Shares246.24 (March 31, 2014: 240.78) Crores Equity Shares of ` 1/- each, fully paid up 246.24 240.78 Less: Amount recoverable from LCL - Foundation (ESOP Trust) 1.15 1.54

245.09 239.24

3.1 Reconciliation of the shares outstanding at the beginning and at the end of the reporting periodParticulars As at March 31, 2015 As at March 31, 2014

No. Crores ` Crores No. Crores ` Crores Equity Shares of ` 1/- each, Fully paid upAt the Beginning 240.78 240.78 240.78 240.78 Issued during the year - Conversion* 5.46 5.46 - - At the end 246.24 246.24 240.78 240.78

*During the Year, 5.46 Crores Equity Shares of 1/- each were allotted to ICICI Bank Limited at a Price of 6.23/- per Equity Share (premium of ` 5.23/- per share), by conversion of ` 34 Crores Funded Interest Term Loan into Equity Share Capital of the Company.

3.2 Terms / Rights attached to Equity Shares

The company has only one class of equity shares having a par value of `1/- Per share. Each Holder of equity shares is entitled to one vote per share.

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

3.3 Shares held by holding / ultimate holding and / or their subsidiary / associates

Particulars As at March 31, 2015 As at March 31, 2014No. Crores ` Crores No. Crores ` Crores

Equity Shares of ` 1/- each fully paid up held byLanco Group Limited, the holding company 135.37 135.37 135.37 135.37

3.4 Details of Shareholder holding more than 5% shares of the company:

Particulars As at March 31, 2015 As at March 31, 2014No. Crores % Holding in the

Class No. Crores % Holding in the

Class Equity Shares of ` 1/- each fully paid up held byLanco Group Limited, the holding company 135.37 54.98 135.37 56.22

The above information is as per register of share holders / members.

3.5 Details of Shares Reserved for issue under OptionsFor details of shares reserved for issue under Employee Stock Options (ESOP) plan of the Company, refer note 35.

During the previous year the Company’s proposal to restructure the debt has been approved by the Corporate Debt Restructuring Empowered Group (CDR EG) vide letter of approval dated December 20, 2013. The company executed Master Restructuring Agreement (MRA) on December 27, 2013. As a result of this the lenders of CDR have a right to convert restructured debt into equity shares at the sole discretion and on demand as per the agreed terms in the MRA.

In relation to the loans restructured by the CDR lenders a total amount to ` 2,894.41 Crores would qualify for the conversion of 473.29 Crores shares at the sole discretion and on demand of the CDR lenders.

In relation to the promoters contribution a total amount to ` 167.06 Crores would qualify for the conversion of 26.82 Crores shares at the sole discretion of the promoters.


78

4 Reserves and Surplus(` Crores)



Capital ReserveAs at the commencement of the year 4.29 4.29

4.29 4.29 Securities Premium AccountAs at the commencement of the year 1,895.51 1,852.72 Add : Received during the year 28.54 - Add : Premium on account of ESOPs exercised 4.20 42.79

1,928.25 1,895.51 Share Option Outstanding AccountEmployee Stock Options (ESOP) Outstanding (net of ESOP Suspense) at the commencement of the year

19.33 55.43

Add: ESOP Costs recognised during the year (Refer Note 26) 3.33 4.50 Add: ESOP Costs recovered from subsidiaries 1.32 2.19 Less: Transfer to Security Premium on account of ESOPs exercised 4.20 42.79

19.78 19.33 General ReserveAs at the commencement of the year 1.46 1.46

1.46 1.46 Foreign Currency Monetary Item Translation Difference Account (Net)As at the commencement of the year (5.05) - Additions during the year (net) (2.64) (5.52)Less: Amortized during the year 0.49 0.47

(7.20) (5.05)Surplus / (deficit) in the Statement of Profit and LossAs at the commencement of the year 519.11 1,479.10 Add / Less:- Profit / ( Loss) for the year (672.23) (959.99)Less : Depreciation Transitional Adjustment (Refer Note 59) 8.25 - Net Surplus in the Statement of Profit and Loss (161.37) 519.11

1,785.21 2,434.65

5 Long Term Borrowings (` Crores)

Non Current Portion Current Maturities As at

March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014Rupee Term Loans Secured From Banks (Refer (a) below) 4,610.97 2,841.16 116.53 11.30 From Financial Institutions (Refer b (1) below) 63.00 64.29 1.29 - Unsecured From Financial Institutions (Refer b (2) below) 199.29 318.87 84.16 - Foreign Currency Term Loans - Secured From Banks (Refer (c) below) 408.19 525.74 8.33 - Hypothecation Loans - Secured From Banks (Refer (d) below) - - - 3.82 From Others (Refer (d) below) - - - 22.71 Loans and Advances from Related Parties Unsecured Other Loans and Advances (Refer (e) below) 152.00 261.44 - -

5,433.45 4,011.50 210.31 37.83 Amount disclosed under the head ""Other Current Liabilities"" (Note 11)

(210.31) (37.83)

Net Amount 5,433.45 4,011.50 - -


79

The Board of Directors of LITL in its meeting held on July 27, 2013 had accorded its approval for restructure of the debts of the Company under Corporate Debt Restructuring (CDR) Mechanism of the Reserve Bank of India. CDR Empowered Group ( CDR EG) in its meeting held on December 11, 2013 has approved the CDR scheme submitted by the Company and issued letter of approval on December 20, 2013. As on March 31, 2015 CDR related documents have been executed and creation of security stands completed.

The details of securities and terms of repayment are as follows:

a) Rupee Term Loans from Banks*

1. Term Loan of ` 666.45 Crores out of which `13.33 Crores is current (March 31, 2014 : ` 666.68 Crores, all Non-Current), WCTL- I of ` 998.01 Crores out of which `19.96 Crores is current (March 31, 2014 : ` 967.90 Crores, all Non-Current), WCTL- II of ` 556.56 Crores out of which `11.13 Crores is current (March 31,2014 : ` 553.46 Crores, all Non-Current), FITL of ` 532.16 Crores out of which `10.64 Crores is current (March 31, 2014 : ` 293.51 Crores, all Non-Current) as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015. Further Land admeasuring 924 acres (approx.) held by one of the step down subsidiary is offered as collateral security for ` 400.00 Crores of the Term Loan and / or shares of subsidiary held by another subsidiary are offered as collateral security for ` 216.68 Crores of the Term Loan.

2. Priority Loan of ` 1,678.17 Crores out of which ` 33.94 Crores is current (March 31, 2014 : ` 273.03 Crores, all Non-Current ) classified as long term borrowings as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having priority charge on the Trust and Retention Account (TRA) of the company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 18 quarterly installments starting from June 30, 2015.

3. ` 40.76 Crores, Term Loan availed from Non-CDR lender, out of which ` 5.36 Crores is Current (March 31, 2014: ` 46.62 Crores, out of which ` 4.89 Crores is Current) is secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the project on first charge basis and is being repaid in 48 quarterly installments ending on September 30, 2023.

4. ` 255.39 Crores, Term Loan availed from Non-CDR lender, out of which ` 22.17 Crores is Current (March 31, 2014: ` 51.26 Crores, out of which ` 6.41 Crores is current) are secured by way of mortgage on the immovable assets pertaining to the solar power projects and hypothecation of movable assets both present & future of those projects on first charge basis and is being repaid in 55 & 57 structured quarterly installments ending on March 20, 2025 & March 31, 2026.

b) Rupee Term Loans from Financial Institutions*

1. ` 64.29 Crores, out of which `1.29 Crores is Current (March 31, 2014: ` 64.29 Crores, all Non-Current) is having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. This loan is having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and is repayable in 30 structured quarterly installments starting from June 30, 2015.


80

2. ` 283.45 Crores, term Loan availed from Non-CDR lender, out of which ` 84.16 Crores is Current (March 31, 2014: ` 318.87 Crores, all Non-Current) is unsecured. However, collateral securities have been provided by way of pledge of shares of a subsidiary held by another subsidiary and also by pledge of shares of the Company held by one of the Promoters. Repayable in 8 quarterly installments starting from September 30, 2015.

c) Foreign Currency Term Loans*

1. Foreign Currency Term Loans (Buyers Credit) from banks out of ` NIL (March 31, 2014: ` 223.40 Crores, all Non-Current) were secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the solar project and ` NIL (March 31, 2014: `2.47 Crores, all Non-Current) were having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge along with pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, company and its step down subsidiaries and associates.

2. FCNR Loan from banks of ` 416.52 Crores out of which ` 8.33 Crores is current (March 31,2014 : `299.87 Crores, all Non-Current) is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015.

d)* Hypothecation Loans of ` NIL (March 31, 2014: ` 26.53 Crores, all Current) were secured by hypothecation of specific construction equipment / vehicles acquired out of such loans.

e) Other loans and advances are Inter Corporate Loans of ` NIL (March 31, 2014 : `109.44 Crores) bearing interest rate of 13% p.a. was received from one of the subsidiary company. Interest free unsecured loan of ` 152.00 (March 31, 2014 : `152.00) Crores received from Promoter Company as Promoter’s contribution as per terms and conditions of CDR package with conversion option into equity and repayable at the end of 10 years after approval of the CDR lenders

*Rate of interest on the above borrowings is as per the agreement with the respective banks i.e. bank rate (+/-) spread as applicable.

6 Deferred Tax Liability / (Asset) - Net

(` Crores)



Deferred Tax Liabilities

Differences in Written Down Value in Block of Fixed Assets as per Tax Books and Financial Books

75.01 75.01

Gross Deferred Tax Liabilities (A) 75.01 75.01

Deferred Tax Assets

Provision for Employee Benefits 22.28 22.28

Provision for Doubtful Debts 3.92 3.92

Provision for Lease Equalisation Reserve 1.80 1.80

Carry Forward Losses as per the Income Tax Act 1961* 64.76 64.76

Gross Deferred Tax Assets (B) 92.76 92.76

Deferred Tax Liability / (Asset) - Net (A) - (B) (17.75) (17.75)

* Based on the existing orders on hand, the Company has recognised Deferred Tax Asset on unabsorbed depreciation.


81

7 Other Long Term Liabilities

(` Crores)



Trade Payables (including acceptances) (Refer Note 45 for details of dues to Micro, Small and Medium Enterprises)

821.34 645.75

Others

Advance from Customers 3,209.72 4,114.12

Other Liabilities 1.04 1.05

4,032.10 4,760.92

8 Provisions

(` Crores)

Long Term Short Term





Provision for Compensated Absences 19.45 16.69 8.96 7.01

Provision for Gratuity 9.55 7.35 3.46 2.38

Provision for Bonus - - 0.11 0.22

Provision for Retention Bonus - 11.64 6.39 3.25

Provision for Taxation (Net of Advance taxes) - - 0.64 41.14

Provision for Lease Equalisation 0.18 5.41 3.78 0.86

29.18 41.09 23.34 54.86

9 Short Term Borrowings

(` Crores)



Cash Credits and Working Capital Demand Loan from Banks (Secured) (Refer (a) below) 1,071.97 1,206.72

Foreign Currency Loans and Advances

Secured

From Banks (Refer (b) below) 1.04 101.29

Loans and Advances from Related Parties

Unsecured

Rupee Loans and Advances (Refer (c) below) 82.17 338.15

1,155.18 1,646.16

a) Cash Credits and Working Capital Demand Loans from Banks:- *

` 1,071.97 (March 31,2014: `1,206.72) Crores is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge as per the CDR scheme approved by CDR EG. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.


82

b)* Foreign Currency Loans (Buyers Credit) from banks of `1.04 (March 31,2014: `101.29) Crores having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge along with pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.

c) Unsecured Loans and Advances includes :-

i. ` 67.11 Crores, Inter Corporate Loans from two subsidiaries bearing interest rate of 12% p.a, 13% p.a.to be repayable on or before March 31, 2016. (March 31, 2014 : ` 338.15 Crores, Inter Corporate Loans from four subsidiaries bearing interest rate of 15% p.a.,12% (from 2 subsidiaries) p.a. and 15.50% p.a. to be repayable on or before December 31, 2014, September 3, 2014, March 31, 2014 and March 31, 2015 respectively).

ii. Interest free unsecured loan of ` 15.06 Crores (March 31, 2014 : ` NIL) from holding company is repayable on or before March 31, 2016 and having an option to lenders to convert in to equity at price to be arrived as per SEBI guidelines.

*Rate of interest on the above borrowings is as per the agreement with the respective banks i.e. bank rate (+/-) spread as applicable

10 Trade Payables

(` Crores)



Trade Payables (including acceptances) (Refer Note 45 for details of dues to Micro, Small and Medium Enterprises)

2,007.28 2,307.94

2,007.28 2,307.94

11 Other Current Liabilities

(` Crores)



Current maturities of long term borrowings (Refer Note 5) 210.31 37.83

Interest accrued but not due on borrowings 5.10 2.98

Interest accrued and due on borrowings 65.50 75.19

Advance from Customers 4,259.77 2,895.60

Advance received against sale of Investments 517.00 -

Taxes Payable 22.33 37.38

Amount payable in respect of Purchase of Fixed Assets / EPC contracts - 13.19

Salaries and Other Employee benefits Payable 37.21 93.77

Other payables # 662.47 529.27

5,779.69 3,685.21

# Includes amount of ` 438.00 (Previous Year ` 438.00) Crores payable to one of its subsidiaries pursuant to novation of EPC agreement.


83

12

Tang

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Ass

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` Cr

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84

13 Intangible Assets

(` Crores)

Particulars Computer Software

Gross Block

As at April 01, 2013 28.46

Additions 2.88

Disposals 0.13

As at March 31, 2014 31.21

Additions 0.01

Disposals 0.02

As at March 31, 2015 31.20

Depreciation

As at April 01, 2013 21.00

For the Period 5.55

On Disposals 0.12

As at March 31, 2014 26.43

For the Period 1.69

On Disposals 0.02

- Adjustments

- Transferred to Retained Earnings 0.00

As at March 31, 2015 28.10

Net Block

As at March 31, 2014 4.78

As at March 31, 2015 3.10

14 Capital Work In Progress

(` Crores)

As at and Up to March 31, 2015

For the Year Ended March

31, 2015

As at and Up to March 31, 2014

Asset Under Construction 1.73 (2.03) 3.76

Less: Expenditure Apportioned over Cost of Fixed Assets - (2.03) -

Asset Under Construction 1.73 - 3.76

(` Crores)

As at and Up to March 31,

2014

For the Year Ended March 31,

2014

As at and Up to March 31,

2013

Asset Under Construction 3.76 (51.65) 55.41

Less: Expenditure Apportioned over Cost of Fixed Assets (51.65)

3.76 - 55.41


85

15 Non Current Investments(At cost unless otherwise stated)





No. Crores No. Crores ` Crores ` CroresI Investment in Subsidiary Companies (Unquoted)(a) Equity Shares of `10/- each, fully paid up

Bhola Electricity Private Limited $ 0.00 0.00 0.01 0.01 Diwakar Solar Projects Limited 23.83 23.83 238.33 238.33 Lanco Devihalli Highways Limited 13.19 - 131.94 - Lanco Hills Technology Park Private Limited 22.20 22.20 222.00 222.00 Lanco Hoskote Highway Limited 14.33 - 143.33 - Lanco International Pte Limited # 1.00 1.00 45.66 45.66 Lanco Kanpur Highways Limited 1.00 1.00 10.00 10.00 Lanco Mandakini Hydro Energy Private Limited 0.42 - 4.23 - Lanco Power Limited 564.27 557.47 5,645.43 5,577.47 Lanco Resources International Pte Limited # 10.00 10.00 534.16 534.16 Lanco Solar Energy Private Limited 32.12 31.73 321.23 317.33 Lanco Wind Power Private Limited 4.06 4.06 40.62 40.62 Mahatamil Mining and Thermal Energy Limited 0.05 0.05 0.50 0.50 Mercury Projects Private Limited 0.00 0.00 0.01 0.01 National Energy Trading and Services Limited 3.65 3.65 31.17 31.17 Sirajganj Electric (Pvt.) Limited $ 0.00 0.00 0.01 0.01 Tasra Mining & Energy Company Private Limited 0.51 0.04 5.10 0.35 Uranus Projects Private Limited 0.11 0.07 1.07 0.68

Sub Total 7,374.80 7,018.30 # Face Value of USD 1/-$ Face Value of Bangladesh Taka 1000/-

(b) Preference Shares 0.01% Redeemable Convertible Cumulative Preference Shares of ` 100/- each, fully paid up

Lanco Hills Technology Park Private Limited 2.00 2.00 200.00 200.00 0.001% Optionally Convertible Cumulative Redeemable Preference Shares of `10/- each, fully paid up

Arneb Power Private Limited 0.19 0.19 1.91 1.91 Coral Orchids Private Limited 0.04 0.04 0.41 0.41 Cordelia Properties Private Limited 0.01 0.01 0.14 0.14 Cressida Properties Private Limited 0.01 0.01 0.05 0.05 Deimos Properties Private Limited 0.00 0.00 0.01 0.01 Lanco Devihalli Highways Limited 1.40 - 14.03 - Mercury Projects Private Limited 20.84 20.84 208.42 208.42 Pearl Farms Private Limited 0.58 0.58 5.82 5.82 Telesto Properties Private Limited 0.40 0.40 3.95 3.95 Uranus Projects Private Limited 1.74 1.73 17.37 17.29

0.001% Cumulative Compulsory Convertible Preference Shares of `10/- each, fully paid up

Lanco Kanpur Highways Limited 18.65 18.65 186.50 186.50 0.1% Optionally Convertible Preference Shares of ` 10/- each, fully paid up

Mahatamil Mining and Thermal Energy Limited 8.98 7.80 89.80 77.98 0.01% Cumulative Redeemable Preference shares of ` 10/- each, fully paid up

Lanco Solar Energy Private Limited 16.00 16.00 160.00 160.00 Sub Total 888.41 862.48

(c) Debentures0% Convertible Debentures of `10 each/- each, fully paid up with redeemable option

Lanco Devihalli Highways Limited 8.16 - 81.64 - Lanco Hills Technology Park Private Limited 80.48 804.79 - Lanco Hoskote Highway Limited 22.59 - 225.88 -

1,112.31 - Total Investment in Subsidiary Companies 9,375.52 7,880.78


86





No. Crores No. Crores ` Crores ` CroresII Trade Investments (a) Investment in Equity Shares of ` 10/- each, fully paid up (i) Investment in Associate Company (Unquoted)

Ananke Properties Private Limited 0.10 0.10 1.04 1.04 Avior Power Private Limited 0.00 0.00 0.00 0.00 Bay of Bengal Gateway Terminal Private Limited 0.00 0.00 0.01 0.01 Belinda Properties Private Limited 0.10 0.10 1.04 1.04 Bianca Properties Private Limited 0.10 0.10 1.04 1.04 Genting Lanco Power (India) Private Limited 0.05 0.05 2.10 2.10 Lanco Devihalli Highways Limited - 4.59 - 45.91 Lanco Hoskote Highway Limited - 5.03 - 50.28 Mirach Power Private Limited 0.00 0.00 0.00 0.00 Pragdisa Power Private Limited 0.00 0.00 0.00 0.00 Tethys Properties Private Limited 0.10 0.10 1.04 1.04 Vainateya Power Private Limited 0.00 0.00 0.00 0.00

(ii) Investment in Other Company (Unquoted)Indian Energy Exchange - 0.13 - 1.25

Sub Total 6.27 103.71 (b) Investment in Preference Shares (i) Investment in Associate Company (Unquoted)

0.001% Cumulative Compulsory Convertible Preference Shares of ` 10/- each, fully paid up

Mirach Power Private Limited 0.03 0.03 0.30 0.30 Himavat Power Limited 0.19 0.05 1.88 0.54

0.001% Optionally Convertible Cumulative Redeemable Preference shares of `10/- each, fully paid up

Ananke Properties Private Limited 3.30 3.30 32.99 32.98 Avior Power Private Limited 0.02 - 0.18 - Basava Power Private Limited 0.01 - 0.08 - Belinda Properties Private Limited 3.30 3.30 32.98 32.98 Bianca Properties Private Limited 3.30 3.30 32.98 32.98 Lanco Devihalli Highways Limited - 1.40 - 14.03 Mirach Power Private Limited 0.02 - 0.18 - Mimas Trading Private Limited 0.00 0.00 0.01 0.01 Regulus Power Private Limited 0.02 0.02 0.22 0.22 Siddheswara Power Private Limited 0.02 - 0.15 - Tethys Properties Private Limited 3.30 3.30 32.98 32.98 Vainateya Power Private Limited 1.52 - 15.25 -

(ii) Investment in Other Company (Unquoted) 6% Optionally Convertible Redeemable Cumulative Preference Shares of ` 1/- each, fully paid up

Clarion Power Corporation Limited 0.25 0.25 0.25 0.25 Rithwik Energy Systems Limited 0.14 0.14 0.14 0.14

0.001% Cumulative Compulsory Convertible Preference Shares of ` 10/- each, fully paid up

Lanco Babandh Power Limited 6.48 6.78 64.85 67.85 0.01% Cumulative Compulsory Convertible Preference Shares of ` 10/- each, fully paid up

Lanco Vidarbha Thermal Power Limited 2.82 1.36 28.24 13.65 0.001% Optionally Convertible Cumulative Redeemable Preference shares of Rs.10/- each, fully paid up

Banas Thermal Power Private Limited 0.28 - 2.78 - Nekkar Power Private Limited 0.01 - 0.08 -

0.01% Redeemable Cumulative Convertible Preference Shares of ` 10/- each, fully paid up

Lanco Horizon Properties Private Limited 7.25 7.25 72.51 72.51 Sub Total 319.03 301.42 Total Trade Investments 325.30 405.13


87





No. Crores No. Crores ` Crores ` CroresllI Non Trade Investments (a) Investment in Equity Shares of ` 10/- each fully paid up

Investment in Other Company (Quoted) Andhra Bank 0.00 0.00 0.21 0.21 Bank of Baroda* 0.00 0.00 0.17 0.17 Central Bank of India 0.00 0.00 0.02 0.02 Indian Bank 0.00 0.00 0.06 0.06 Power Finance Corporation Limited 0.02 0.02 5.02 5.02 Rural Electrification Corporation Limited 0.00 0.00 0.99 0.99

Sub Total 6.47 6.47 * FV of equity shares ` 10 each (March 31, 2014) sub divided into ` 2 each (March 31, 2015)

(b) Investment in 9.2% Debentures of ` 0.10 Crores each fully paid up (Unquoted)

Central Bank of India 0.00 0.00 1.00 1.00 1.00 1.00

(C) Investment in Mutual Funds/ ULIPs/ Insurances (Unquoted)

Birla Sunlife Insurance Platinum Premier Plan 0.08 0.06 1.15 0.67 Canara HSBC OBC Insurance ISP 0.02 0.01 0.27 0.18 MetLife-Met Smart One 0.00 0.00 0.05 0.05 MetLife-Met Suvidha Non Par Single - - 0.30 0.30 Star Union Dai-Ichi Life Insurance - - 1.03 1.03

Sub Total 2.80 2.23

Total Non Trade investments 10.27 9.70

Total Non Current Investments 9,711.09 8,295.61

Provision for Diminution in Value of Investments - (Aggregate Value)

(2.80) -

Total Non Current Investments 9,708.29 8,295.61 Aggregate amount of Quoted Investments 6.47 6.47 Market Value of Quoted Investments 9.39 6.73 Aggregate amount of Non - Quoted Investments 9,701.82 8,289.14

Details of Shares pledged with Banks and Financial Institutions



No. Crores No. CroresNon Current Investments #

Lanco Hoskote Highways Private Limited - Equity Shares 14.33 5.03 Lanco Devihalli Highways Private Limited - Equity Shares 13.19 4.59 Lanco Hills Technology Park Private Limited - Equity Shares 22.20 - Lanco Hills Technology Park Private Limited - Preference Shares

2.00 -

Diwakar Solar Projects Limited - Equity Shares 18.83 7.15 Lanco Kanpur Highways Limited - Equity Shares 0.29 0.29 Lanco Kanpur Highways Limited - Preference Shares 5.41 5.41 Lanco Resources International PTE Ltd.- Equity Shares 10.00 - Lanco Mandakini Hydro Energy Private Limited - Equity Shares

0.42 -

Lanco Vidarbha Thermal Power Ltd - Preference Shares 2.82 -

# The above shares were pledged with banks and financial institutions who have extended loans and credit facilities to the respective investee companies.


88

16 Loans and Advances

(` Crores)Non- Current Current





Capital AdvancesUnsecured, Considered Good 0.08 0.08

0.08 0.08 Security DepositUnsecured, Considered Good 11.92 13.99 1.34 6.33 Doubtful - - 0.38 0.38

11.92 13.99 1.72 6.71 Less: Provision for Bad & doubtful Security Deposit - - 0.38 0.38

11.92 13.99 1.34 6.33 Loans & Advances to Related Party $ (Note No. 38)Unsecured, Considered GoodAdvances for Investment* - 22.13 - - Loans Receivable 484.31 837.29 686.44 609.01 Advances Recoverable in Cash or in kind #Unsecured, Considered Good 523.61 510.37 1,739.81 3,058.67 Doubtful - - 3.40 0.46

1,007.92 1,369.79 2,429.65 3,668.14 Less: Provision for doubtful Other Loans and Advances - - 3.40 0.46

1,007.92 1,369.79 2,426.25 3,667.68 Other Loans & Advances (Unsecured, Considered good otherwise stated)Advance Tax (Net of Provision for Tax) 121.00 85.48 - - Minimum Alternate Tax Credit Entitlement 23.13 23.13 - - Loans and Advances to Employees - - 1.24 4.05 Advances for Investment* - 0.10 - - Prepaid Expense - - 4.04 5.99 Cenvat / Vat / Service Tax Credit Receivable 31.44 39.19 163.24 151.21 Taxes Paid Under protest 2.89 4.53 - - Advances Recoverable in Cash or in kindUnsecured, Considered Good 211.53 162.53 424.07 426.21 Doubtful - - 16.14 6.01

389.99 314.96 608.73 593.47 Less: Provision for doubtful Other Loans and Advances - - 16.14 6.01

389.99 314.96 592.59 587.46 1,409.91 1,698.82 3,020.18 4,261.47

# Refer Note No. 51* Amounts paid to related parties and others, towards share application money, to the extent not refunded/allotted, have been considered as advances for investment and will be adjusted on allotment.$ Loans & Advances due by the Firms or Private Company in which any directors is director, Partner or Member

(` Crores)Non- Current Current





Himachal Hydro Power Private Limited - - - 0.12 Ravi Hydro Electric Private Limited - - - 0.34 Vainateya Power Private Limited - 15.21 1.34 1.34 Lanco Bay Technology Park Private Limited - - - 0.33 Cygnus Solar Projects Private Limited - - - 0.00 Lanco Kerala Seaports Private Limited - - 0.00 0.00 Lanco Transport Network Company Private Limited - - 0.00 0.00 Chatari Hydro Power Private Limited - 0.03 - - Lanco Horizon Properties Private Limited - - 0.02 0.02 Avior Power Private Limited - 0.18 - - Basava Power Private Limited - 0.08 - - Siddheswara Power Private Limited - 0.15 - - Nekkar Power Private Limited - 0.08 - -

- 15.73 1.36 2.15


89

17 Trade Receivables And Other Assets(` Crores)

Non- Current Current As at

March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 201417.1 Trade Receivables

Outstanding for a period exceeding six months from the date they are due for paymentUnsecured, Considered Good 324.71 420.69 Doubtful 10.29 9.47

335.00 430.16 Less : Allowance for Dad & Doubtful Debts 10.29 9.47

324.71 420.69 Other ReceivableUnsecured, Considered Good 712.57 541.45 1,120.82 1,280.18 Sub Total (A) 712.57 541.45 1,445.53 1,700.87

17.2 Other AssetsNon Current Bank Deposits (as per Note 20) 6.11 2.28 Unamortised Premium on Forward Contract - - - 0.34 Interest Accrued on Deposits / Inter Corporate Loans - - 132.79 79.90 Others (Including contract claims) - - 126.66 1.00 Sub Total (B) 6.11 2.28 259.45 81.24

Total ( A + B ) 718.68 543.73 1,704.98 1,782.11

18 Current Investments

(` Crores)

Non- Current Current As at

March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014

I Investment in Subsidiary Companies (Unquoted)(a) Equity Shares of `10/- each, fully paid up

Udupi Power Corporation Limited 2.25 - 19.61 -

Sub Total 19.61 -

(b) Preference Shares 1% Cumulative Compulsory Convertible Redeemable Preference Shares @ `10 each Udupi Power Corporation Limited 123.42 - 1,234.15 -

Sub Total 1,234.15 -

Total Current Investments 1,253.76 -

Aggregate amount of Quoted Investments - -

Market Value of Quoted Investments - -

Aggregate amount of Non - Quoted Investments 1,253.76 -

Details of Shares pledged with Banks and Financial Institutions



No. Crores No. Crores

Current Investments #Udupi Power Corporation Limited - Equity Shares 2.25 -

Udupi Power Corporation Limited - Preference Shares 123.42 -

# The above shares were pledged with banks and financial institutions who have extended loans and credit facilities to the respective investee companies.


90

19 Inventories(At lower of cost and net realisable value unless otherwise stated)

(` Crores)



Raw Materials 85.95 76.27

Construction Work In Progress (WIP) 1,327.38 1,331.03

Consumables, Stores and Spares 13.31 15.14

1,426.64 1,422.44

Details of Closing Inventory

Raw Materials

Steel 48.30 43.25

Materials 34.62 32.57

Semi Finished Goods 0.33 0.33

Others 2.70 0.12

85.95 76.27

20 Cash and Bank Balance

(` Crores)

Non- Current Current





Cash and Cash Equivalents

Balances with Banks

- On Current Accounts 298.71 113.22

- On Deposit Accounts (Having Maturity less than 3 Months from date of deposit)

4.90 -

Cash on Hand 0.07 0.08

303.68 113.30

Other Bank Balances

On Deposit Accounts

Having Maturity more than 3 Months but less than or equal to 12 months from date of deposit

3.52 3.30

Having Maturity more than 12 Months from date of deposit 2.46 2.28 - -

On Margin Money Deposit Accounts* 3.65 - 22.45 6.03

6.11 2.28 25.97 9.33

Amount disclosed under non Current assets (Note 17.2) (6.11) (2.28) - -

- - 329.65 122.63

*The Margin Money Deposits are towards Letter of Credit and Bank Guarantees given by the bankers on behalf of the Company.


91

21 Revenue From Operations (` Crores)

For the year ended March

31, 2015

For the year ended March 31,

2014Contract Operations (A) 1,253.22 2,096.39

Sale of Services Management Consultancy 47.03 54.89 (B) 47.03 54.89 Sale of Products Electrical Energy 77.08 74.47 Other Goods 11.50 4.15 (C) 88.58 78.62 Other Operating Revenue Revenue from Hiring of Equipment / Machinery 1.16 - Scrap Sales 5.53 6.50 (D) 6.69 6.50 Net Revenue from Operations (A+B+C+D) 1,395.52 2,236.40

22 Other Income (` Crores)


31, 2015


2014 Interest Income on Deposits and Margin money 2.91 1.46 Loans Receivable 110.98 85.18 Long Term Investments 0.09 - Others 6.59 4.19 Dividend Income on Dividend Income from Long Term Investments 3.92 0.84 Other Non-Operating Income Insurance Claims Received / Receivable 4.16 0.85 Liabilities and Provisions no longer required written back 0.79 0.47 Rental Income 0.73 1.02 Miscellaneous Income 5.02 8.96

135.19 102.97 23 Cost of Materials Consumed

(` Crores)For the year

ended March 31, 2015


2014 Construction Material Consumed 764.67 1,798.46

764.67 1,798.46

24 Construction and Site Expenses(` Crores)


31, 2015


2014 Equipment / Machinery Hire charges 9.65 17.25 Repairs, Operations and Maintenance 7.25 5.95 Consumption of Stores and Spares 3.94 6.44 Insurance 12.66 17.68 Electricity 10.13 10.76 Security Charges 8.87 16.33 Others 18.27 43.29

70.77 117.70


92

25 (Increase) / Decrease in Construction Work in Progress (WIP)(` Crores)


31, 2015


2014 Construction Work in Progress (WIP) WIP at the beginning of the period 1,331.03 1,179.56 Less : WIP at the end of the period 1,327.38 1,331.03 (Increase) / Decrease in WIP 3.65 (151.47)

26 Employee Benefits Expense (` Crores)


31, 2015


2014 Salaries, allowances and benefits to employees 159.94 161.32 Contribution to provident fund and other funds 8.82 7.76 Employee Stock Option Charge 3.33 4.50 Recruitment and training 1.21 1.26 Staff welfare expenses 8.21 10.76

181.51 185.60

27 Other Expenses (` Crores)


31, 2015


2014Rent 16.97 25.42 Rates and taxes 5.55 4.53 Donations - 0.64 Repairs and Maintenance: Office Building - 0.06 Others 1.77 1.84 Office maintenance 4.10 4.30 Insurance 0.11 0.09 Printing and stationery 0.80 1.10 Consultancy and other professional charges 10.47 8.72 Directors sitting fee 0.11 0.12 Tax audit fees 0.05 0.05 Electricity charges 4.12 4.30 Net Loss on Foreign Exchange Fluctuations 23.29 112.95 Remuneration to auditors (As Auditor) - Audit Fee 0.80 0.80 Remuneration to auditors (In other capacity) - (Certification) - 0.00 Reimbursement of expenses to Auditors 0.08 0.20 Travelling and conveyance 13.81 28.49 Communication expenses 2.88 4.03 Net Loss on Sale / Write off of fixed assets 27.03 14.89 Provision for Advances / claims / debts 18.51 32.59 Business Promotion and Advertisement 2.31 2.17 Miscellaneous expenses 0.55 2.39

133.31 249.68 Less: Recovery of Common Expenses 7.69 9.87

125.62 239.81


93

28 Finance Cost (` Crores)


31, 2015


2014Interest 705.15 601.12 Other Borrowing Cost 67.16 26.61

772.31 627.73

29 Depreciation And Amortisation Expense (` Crores)


31, 2015


2014Depreciation on Tangible Assets 119.59 111.68 Amortisation on Intangible Assets 1.69 5.56

121.28 117.24

30 Exceptional ItemsExceptional item of ` 99.75 Crores for the year ended March 31, 2015 includes profit on sale of external long term investments ` 73.30 Crores and reversal of excess provisions made in previous years for ` 26.45 Crores.

Exceptional item of ` (0.90) Crores for the year ended March 31, 2014 includes reversal of promoter directors salary and the sacrifice towards reduction in interest for the six months period ended September 30, 2013 as adjusted for the interest payments made during the period to the lenders and expenditure incurred relating to CDR scheme approved by CDR EG on December 20, 2013 by considering cutoff date of April 1, 2013.

31 Earning Per Share (EPS)(` Crores)

March 31, 2015 March 31, 2014Net Profit/(Loss) for calculation of basic EPS (A) (672.23) (959.99)

Net Profit as above (672.23) (959.99)Add : Interest on Loan convertible into equity shares 323.42 245.56 Net Profit / (Loss) for calculation of diluted EPS (B) (348.81) (714.43)

Weighted average number of Equity Shares for Basic EPS (C) 237.51 235.02 Effect of dilution :Stock options under ESOP* 0.19 - Convertible loan into equity shares* 500.10 378.90 Weighted Average number of Equity shares for Diluted EPS (D) 737.80 613.92

Basic EPS on the basis of Total Operations (A) / (C) (2.83) (4.08)Diluted EPS on the basis of Total Operations* (B) / (D) (2.83) (4.08)*Diluted EPS when anti dilutive is restricted to basic EPS.

32 Disclosure pursuant to Accounting Standard 7 (Revised) –“Construction Contracts”(` Crores)



Amount of contract revenue recognised as revenue during the period 1,216.56 2,091.98 The aggregate amount of costs incurred and recognised profits (less recognised losses) upto the reporting date (includes foreseeable losses)

30,093.35 29,394.63

Amount of customer advances outstanding for contracts in progress 6,554.21 6,452.95 Retention amount due from customers for contracts in progress 1,525.21 1,479.63 Gross amount due from customers for contract works as an asset 1,172.18 1,074.08 Gross amount due to customers for contract works as a liability 709.08 638.09

33 Cost EstimatesDue to delays in execution of contracts the cost associated with price escalations, claims of the service providers, subcontractors and upward revision of estimated cost, comprising of provision for expected loses on some ongoing projects and additional costs in recently completed / discontinued projects has resulted in losses for the year. The Company continues to pursue certain entitlements from the clients for suitable compensation.


94

34 Employee BenefitsDefined Benefit PlansThe company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary for each completed year of service subject to a maximum of 0.15 Crores. The plan for the same is unfunded.

(` Crores)Gratuity



Net Employee benefit expense recognized in the employee costCurrent service cost 2.01 1.74 Interest cost on benefit obligation 0.86 0.81 Expected return on plan assets - - Net actuarial (gain)/loss recognized in the year 0.22 (0.91)Net benefit expense 3.09 1.64 Balance SheetBenefit asset/liabilityPresent value of defined benefit obligation 13.01 9.73 Fair value of plan assets - - Plan asset / (liability) (13.01) (9.73)(Assets) / Liability recognized in the balance sheetChange in the present value of the defined benefit obligationOpening defined benefit obligation 9.73 9.96 Current service cost 2.01 1.74 Interest cost 0.86 0.81 Actuarial (gain) / loss on obligation 0.22 (0.91)Benefit transferred in 2.11 0.82 Benefit transferred Out (0.56) (0.54)Benefits paid (1.36) (2.15)Closing defined benefit obligation 13.01 9.73 AssumptionsDiscount Rate (%) 8.00 8.79 Attrition Rate 19.00 19.00 Expected rate of salary increase (%) 6.00 6.00 Expected Average Remaining Service (years) 22.02 23.11 Expected Average Remaining Service/ MW (years) 3.97 4.02

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

Amounts of Defined benefit plan for the current and previous four periods are as follows(` Crores)

Present value of Defined benefit

obligation

Surplus / (deficit) Experience adjustments on plan liabilities

Experience adjustments on

plan assets March 31, 2015 13.01 (13.01) 0.20 - March 31, 2014 9.73 (9.73) 0.62 - March 31, 2013 9.96 (9.96) 1.35 - March 31, 2012 11.95 (11.95) 1.11 - March 31, 2011 11.94 (11.94) 0.28 -

Defined Contribution PlansIn respect of the defined contribution plan (Provident Fund), an amount of ` 5.65 (March 31, 2014: ` 6.02) Crores has been recognized as expenditure in the Statement of Profit and Loss.

In respect of the State Plans (Employee State Insurance), an amount of ` 0.00078 (March 31, 2014: `0.0029) Crores has been recognized as expenditure in the Statement of Profit and Loss.


95

Other Employee BenefitsDuring the year the Company has provided / (reversed) retention bonus of ` 0.30 (March 31, 2014: ` (10.73)) Crores. The provision for compensated absences as per actuarial valuation as at March 31, 2015 is ` 28.41 (March 31, 2014 is ` 23.70) Crores.

35 Employee Stock Option SchemeThe Company has till March 31, 2015 allotted 1.11 (March 31, 2014: 1.11) Crores equity shares of `10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock Option Plan 2006 (The plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of ten years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the Company at an exercise price, which is approved by the compensation committee.

The plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of `10 each into 10 equity shares of `1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at `1 each.

A summary of the status of the Company’s plan is given below:

March 31, 2015 March 31, 2014No. Crores Weighted

Average Exercise Price

(` )

No. Crores Weighted Average Exercise

Price (` )

Outstanding at the beginning of the year 0.65 0.24 2.38 0.24Granted during the year - - - -Forfeited during the year (0.06) - (0.22) -Exercised during the year (0.08) 0.24 (1.50) 0.24Expired during the year - - - -Outstanding at the end of the year 0.51 0.24 0.65 0.24Exercisable at the end of the year 0.42 0.24 0.37 0.24

The weighted average share price for the period over which stock options were exercised was ` 6.26 (March 31, 2014 ` 6.74 )

The details of exercise price for stock options outstanding at the end of the year are:

Grant No. (Grant Date) March 31, 2015 Range of

Exercise Price (` )

Number of Options

outstanding (Crores)

Weighted average

remaining contractual life of options (in

years)

Weighted Average

Exercise Price (` )

Grant 1 (24.06.2006) 0.24 0.00 - 0.24 Grant 2 (02.07.2007) 0.24 0.10 - 0.24 Grant 3 (26.09.2007) 0.24 0.01 - 0.24 Grant 4 (24.04.2008) 0.24 0.04 - 0.24 Grant 5 (04.07.2008) 0.24 0.08 - 0.24 Grant 6 (01.11.2008) 0.24 0.00 - 0.24 Grant 7 (19.02.2009) 0.24 0.01 - 0.24 Grant 8 (29.07.2009) 0.24 0.07 0.33 0.24 Grant 9 (27.01.2010) 0.24 0.02 0.83 0.24 Grant 10 (30.04.2010) 0.24 0.02 1.08 0.24 Grant 11 (13.08.2010) 0.24 0.15 1.37 0.24 Grant 12 (12.11.2010) 0.24 0.01 1.62 0.24

0.51


96

Grant No. (Grant Date) March 31, 2014Range of Exercise

Price (` )Number

of Options outstanding

(Crores)

Weighted average

remaining contractual life of options (in years)

Weighted Average Exercise

Price (` )

Grant 1 (24.06.2006) 0.24 0.01 - 0.24 Grant 2 (02.07.2007) 0.24 0.10 - 0.24 Grant 3 (26.09.2007) 0.24 0.01 - 0.24 Grant 4 (24.04.2008) 0.24 0.04 0.07 0.24 Grant 5 (04.07.2008) 0.24 0.09 0.26 0.24 Grant 6 (01.11.2008) 0.24 0.01 0.59 0.24 Grant 7 (19.02.2009) 0.24 0.01 0.89 0.24 Grant 8 (29.07.2009) 0.24 0.11 1.33 0.24 Grant 9 (27.01.2010) 0.24 0.03 1.83 0.24 Grant 10 (30.04.2010) 0.24 0.02 2.08 0.24 Grant 11 (13.08.2010) 0.24 0.21 2.37 0.24 Grant 12 (12.11.2010) 0.24 0.01 2.62 0.24

0.65

The Company has calculated the compensation cost based on the intrinsic value method i.e. the excess of previous closing price of underlying equity shares on the date of the grant of options over the exercise price of the options given to employees under the employee stock option schemes of the Company and is recognised as deferred stock compensation cost and is amortised on a straight line basis over the vesting period of the options. Company is using Black Sholes Model for calculating fair values of ESOP granted for determining impact of the fair value method of accounting of employee compensation in financial statement, the impact on net income and earnings per share is provided below:

Particulars March 31, 2015 March 31, 2014

Net Income - As reported ` Crores (672.23) (959.99)

Add: ESOP Cost under Intrinsic Value Method ` Crores 3.33 4.50

Less : ESOP Cost under Fair Value Method (Block Sholes) ` Crores 3.34 4.41

Net Income – Proforma ` Crores (672.24) (959.90)

Basic Earnings per Share:As reported (2.83) (4.08)

Proforma (2.83) (4.08)

Diluted Earnings per Share:As reported (2.83) (4.08)

Proforma (2.83) (4.08)

The weighted average fair value of stock options granted during the year was N/A (Previous Year N/A) of share of `1 each.

Assumptions:-


Weighted average share price (in `) NA NA

Exercise Price (in `) NA NA

Expected Volatility NA NA

Historical Volatility NA NA

Life of the options granted (Vesting and exercise period) in years NA NA

Expected dividends (in `) NA NA

Average risk-free interest rate NA NA

Expected dividend rate NA NA


97

36 LeasesOperating Lease : Company as lesseeThe Company has entered into certain cancellable and non-cancellable operating lease agreements mainly for office premises. The lease rentals charged during the year and maximum obligations on long term non-cancellable operating lease payable as per the agreements are as follows :

(` Crores)Particulars March 31, 2015 March 31, 2014

Lease rentals charged during the year - Under Cancellable Leases 9.28 15.55 Lease rentals charged during the year - Under Non-Cancellable Leases - - Future minimum lease payments under Non Cancellable LeasesNot later than one year - -

37 Segment ReportingSegment information under Accounting Standard- 17 “ Segment Reporting” has not been presented in these financial statements as the same has been presented in the Consolidated Financial Statements of the Company.

38 Related Party Transactionsa) Names of Related Parties and description of relationship.

i. Names of related parties over which control exists

S. No Subsidiary Companies1 Amrutha Power Private Limited (APPL) 31 Lanco Mandakini Hydro Energy Private Limited

(LMHEPL)2 Arneb Power Private Limited (ArPPL) 32 Lanco Power International Pte. Limited (LPIPL)3 Bhanu Solar Projects Private Limited (BSPPL) 33 Lanco Power Limited (LPL)4 Bhola Electricity (Pvt) Limited (BEPL) 34 Lanco Rambara Hydro Power Private Limited 5 Carpenter Mine Management PTY Ltd 35 Lanco Resources Australia Pty. Limited (LRAPL)6 Coral Orchids Private Limited (COPL) 36 Lanco Resources International Pte. Limited (LRIPL)7 Cordelia Properties Private Limited 37 Lanco Devihalli Highways Limited (LDHL)8 Cressida Properties Private Limited 38 Lanco Hoskote Highway Limited (LHHL)9 Deimos Properties Private Limited 39 Lanco Solar Energy Private Limited (LSEPL)10 Dione Properties Private Limited 40 Lanco Solar Holding Netherlands B.V.11 Diwakar Solar Projects Limited (DSPL) 41 Lanco Solar International Limited (LSIL)12 Emerald Orchids Private Limited 42 Lanco Solar International Pte Limited (LSIPL)13 Green Solar SRL 43 Lanco Solar International USA Inc.14 Helene Power Private Limited 44 Lanco Solar International GMBH Till Sept 3, 201415 JH Patel Power Project Private Limited (JhPL) 45 Lanco Solar Holdings LLC (USA) Till May 15, 201416 Jupiter Infratech Private Limited (JIPL) 46 Lanco Solar Power Projects Private Limited (LSPPPL)17 Khaya Solar Projects Private Limited (KSPPL) 47 Lanco Solar Private Limited (LSPL)18 Lanco Amarkantak Power Limited (LAPL) 48 Lanco Solar Services Private Limited (LSSPL)19 Lanco Anpara Power Limited (LAnPL) 49 Lanco SP P.V. 1 Investments B.V. Till Nov 25, 201420 Lanco Budhil Hydro Power Private Limited (LBHPPL)

Till June 15,201450 Lanco Tanjore Power Company Limited (LTPCL)

21 Lanco Enterprise Pte. Ltd, China (LEPL) 51 Lanco Teesta Hydro Power Limited (LTHPL)22 Lanco Hills Technology Park Private Limited (LHTPPL) 52 Lanco Thermal Power Limited (LTPL)23 Lanco Holding Netherlands B.V 53 Lanco US P.V. Investments B.V. Till Jan 9, 201524 Lanco Hydro Power Limited (LHPL) 54 Lanco Virgin Islands- 1 LLC Till May 15, 201425 Lanco Infratech (Mauritius) Limited (LIML) 55 Lanco Wind Power Private Limited (LWPPL)26 Lanco Infratech Nepal Private Limited 56 LE New York - LLC27 Lanco International Pte Limited (LInPL) 57 Leda Properties Private Limited (LPPL)28 Lanco IT P.V. Investments B.V. 58 Mahatamil Mining and Thermal Energy Limited

(MMTEL)29 Lanco Kanpur Highways Limited (LKHL) 59 Mercury Projects Private Limited (MPPL)30 Lanco Kondapalli Power Limited (LKPL) 60 National Energy Trading and Services Limited (NETS)


98

S. No Subsidiary Companies61 Neptune Projects Private Limited (NPPL) 72 SolarFi SP 07 Till April 18, 201462 Nix Properties Private Limited 73 SolarFi SP 06 Till April 18, 201463 Omega Solar Projects Private Limited 74 Tasra Mining & Energy Company Private Limited

(TMECPL)64 Orion Solar Projects Private Limited 75 Telesto Properties Private Limited (TePPL)65 P.T Lanco Indonesia Energy (LInE) 76 The Griffin Coal Mining Company Pty Ltd (GCMCPL)66 Pasiphae Power Private Limited 77 Thebe Properties Private Limited (ThPPL)67 Pearl Farms Private Limited (PFPL) 78 Udupi Power Corporation Limited (UPCL)68 Portia Properties Private Limited (PPPL) 79 Uranus Infratech Private Limited (UIPL)69 Sabitha Solar Projects Private Limited 80 Uranus Projects Private Limited (UPPL)70 Sirajganj Electric (Pvt.) Limited (SEPL) 81 Western Australia Coal Terminal Pty. Ltd71 Spire Rotor Private Limited (SRPL)

ii. Name of other related parties with whom transactions were carried out

S.No Fellow Subsidiary1 Lanco Babandh Power Limited (LBPL)

S.No Enterprises where Singnificant Influence Exists1 Ananke Properties Private Limited (AnPPL) 14 Lanco Vidarbha Thermal Power Limited (LVTPL)

2 Avior Power Private Limited (AvPPL) 15 Mimas Trading Private Limited (MTPL)

3 Basava Power Private Limited (BPPL) 16 Mirach Power Limited (MiPL)

4 Bay of Bengal Gateway Terminal Private Limited (BBGTPL)

17 Newton Solar Private Limited (NSPL)

5 Belinda Properties Private Limited (BePPL) 18 Phoebe Trading Private Limited (PTPL)

6 Bianca Properties Private Limited (BiPPL) 19 Pragdisa Power Private Limited (PrPPL)

7 Charon Trading Private Limited (CTPL) 20 Regulus Power Private Limited (RPPL)

8 DDE Renewable Energy Private Limited (DREPL) 21 Saidham Overseas Private Limited (SOPL)

9 Electromech Maritech Private Limited (EMPL) 22 Siddheswara Power Private Limited

10 Finehope Allied Engg. Private Limited (FAEPL) 23 Tethys Properties Private Limited (TPPL)

11 Genting Lanco Power (India) Limited 24 Vainateya Power Private Limited (VPPL)

12 Himavat Power Limited (HPL) 25 Vasavi Solar Power Private Limited (VSPPL)

13 KVK Energy Ventures Private Limited (KEVPL)

S.No Key Management Personnel1 Sri L.Madhusudhan Rao (Chairman) (LMR) 3 Sri G.Venkatesh Babu (Managing Director) (GVB)

2 Sri G.Bhaskara Rao (Vice Chairman) (GBR) 4 Mr. S.C. Manocha (Whole Time Director) (SCM)

S.No Relatives of Key Management Personnel1 Sri L.Sridhar (Brother of LMR) (LS)

S.No Enterprises owned or significantly influenced by Key Management Personnel or their relatives1 Chatari Hydro Power Private Limited (CaPTL) 8 Lanco Kerala Seaports Private Limited (LKSPL)

2 Cygnus Solar Projects Private Limited (Formerly Callisto Trading Private Limited.) (Csppl)

9 Lanco Transport Network Company Private Limited (LTNCPL)

3 Himachal Hydro Power Private Limited (HHPPL) 10 LCL Foundation (LCL)

4 Lanco Bay Technology Park Private Limited (LBTPL) 11 Nekkar Power Private Limited (NePPL)

5 Lanco Enterprise Private Limited (LEntPL) 12 Ravi Hydro Electric Private Limited (RHEPL)

6 Lanco Foundation (LF) 13 Lanco Rani Joint Venture (LR)

7 Lanco Horizon Properties Private Limited (LHrPPL)


99

b) Summary of transactions with related parties are as follows:(` Crores)

Nature of Transaction For the Year Ended March 31, 2015Holding

Company Subsidiary Companies

Fellow Subsidiaries

Enterprise where Significant

Influence Exists

Key Management Personnel

Relatives of Key Management

Personnel

Enterprises owned or

significantly influenced by

key management personnel or their

relatives Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Rent Received LTPCL 0.20

Contract Services Rendered

UPCL 51.01 LF 0.46

LSEPL 42.66

LHTPPL 18.05

Others 47.68

159.40 0.46

Contract Services / Shared Services Provided/(Availed)

LAPL 1.10 LBPL 1.10 HPL 0.55

LAnPL 1.10

LPL 1.10

LTHPL 0.62

Others 2.12

6.04 1.10 0.55

Interest Paid/ (Received) UPCL 32.10

LHHL (11.34)LRIPL (16.21)

LHTPPL (78.51)

Others 7.80

(66.16)

Managerial Remuneration GVB 4.20

SCM 2.23

GBR 0.88

LMR 0.81

8.12

Sitting Fee LS 0.01

Purchase /(Sale) of Shares LTPL 1,050.07 AnPPL 46.85

LHPL (26.95) BiPPL 46.85

LSEPL (42.30) TPPL 46.85

BePPL 38.50

AvPPL 0.01

980.82 179.06

Share Application Money Paid during the year

LPL 67.96 LBPL 93.04 LVTPL 85.94

LAPL 48.00 Others 1.39

LSPL 42.30

LMHEPL 31.18

Others 17.23

206.67 93.04 87.33

Share Application Money Refunded during the year

TMECPL 2.50 LVTPL 11.72

Management Consultancy Fee Charged

LAnPL 14.40

UPCL 14.40

LAPL 7.20

Others 11.03

47.03

Work Contract Expenses LInPL 277.51

Operation & Maintenance Expenses

LSSPL 3.30


100

(` Crores)Nature of Transaction For the Year Ended March 31, 2015

Holding Company

Subsidiary Companies

Fellow Subsidiaries


Influence Exists



Personnel





Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Receipts/Payments/Adjustments (Net)+(-)

UPCL 1,163.80 LBPL (165.31) HPL 261.05 GVB (0.01) LF (0.60)LInPL 286.00 PTPL 0.05 SCM (0.01) LR (2.44)LHTPPL 187.38 LVTPL (72.83) Others (0.79)LHHL 114.85LDHL 93.28LMHEPL (90.47)LHPL (97.30)LSPL (107.71)LAPL (220.43)LAnPL (229.47)LTPL (274.39)Others 78.76

904.30 (165.31) 188.27 (0.02) (3.83)Loan and Advances given/(Taken) during the year

LRIPL 246.28Others 0.50

246.78Inter Corporate Loans given/(refunded)/(taken)/ Repaid during the year

LGL (15.06) UPCL 309.44LTPL 293.96LHTPPL 177.13LSEPL 115.65Others 24.78

(15.06) 920.96Purchase of Fixed Assets LPL 0.18 LBPL 0.01 HPL 0.01

LSSPL 0.16Others 0.02

0.36 0.01 0.01Sale of Fixed Assets LAnPL 0.08

LDHL 0.070.15

Corporate Guarantee Given to Bank/FI on Behalf of Related Parties

LRIPL 4,678.66 LBPL 4,064.65 HPL 262.50UPCL 3,944.77 Others 264.26Others 3,608.95

12,232.38 4,064.65 526.76Balance Receivable at the year end-Share Application Money

CaPTL 0.03

Balance Receivable at the year end-Inter Corporate Loans

LTPL 293.96LHPL 196.19LPL 112.08Others 99.83

702.06Balance Receivable at the year end-Loans&Advances

LRIPL 465.44LWPPL 3.25

468.69

Balance Receivable at the year end-OTHERS (Trade Receivables and Other Receivables)

LTPL 1,217.44 LBPL 208.95 LVTPL 53.30 LR 11.57LInPL 576.66 Others 3.91 Others 0.54LAPL 410.34Others 907.39

3,111.83 208.95 57.21 12.11


101


Holding Company


Fellow Subsidiaries


Influence Exists



Personnel





Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Balance Payable at the year end-Inter Corporate Loans

LGL 167.06 LAnPL 45.00NETS 22.11

167.06 67.11Balance Payable at the year end-OTHERS

LAPL 1,605.28 LBPL 1,599.84 LVTPL 930.58 SCM 0.01 LR 0.89UPCL 967.77 HPL 494.57 GVB 0.01 LF 0.17LInPL 837.12 Others 184.18 LCL 0.14Others 1,877.15 LHrPPL 0.07

5,287.32 1,599.84 1,609.33 0.02 1.27


Nature of Transaction For the Year Ended March 31, 2014

Holding Company


Fellow Subsidiaries


Influence Exists



Personnel




relativesParty Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Rent Received LTPCL 0.20


UPCL 40.44 LBPL 13.86 LHHL 18.76 LF 2.52

LAnPL 27.33

LMHEPL 17.88

LAPL 12.17

LHTPPL 10.77

OTHERS (5.02)

103.57 13.86 18.76 2.52

Contract Services/ Shared Services Provided/(Availed)

LSEPL 1.69 LBPL 1.04 HPL 0.52

LAPL 1.04

LAnPL 1.04

LPL 1.04

MMTEL 0.85

OTHERS 2.64

8.30 1.04 0.52

Interest Paid/ (Received) UPCL 43.02 LDHL (4.04) LEnt PL 3.21

LSEPL 14.31 LHHL (19.63)

NETS 4.61

LAnPL 0.93

LKHL (0.13)

LHPL (0.45)

LTPL (0.69)

LSPL (0.72)

LBHPPL (2.94)

LRIPL (10.75)

MPPL (10.78)

LHTPPL (35.05)

1.36 (23.67) 3.21Donations Paid LF 0.50


102


Holding Company


Fellow Subsidiaries


Influence Exists



Personnel




relativesParty Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Managerial Remuneration

GVB 4.09SCM 1.89GBR 0.86LMR 0.79

7.63Sitting Fee LS 0.02Purchase /(Sale) of Shares

GBR 0.01 LS 0.01

Share Application Money Paid during the year

LPL 390.77 LBPL 64.85 LVTPL 13.65LRIPL 273.66 LDHL 6.82OTHERS 94.28 OTHERS 1.36

758.71 64.85 21.83Share Application Money Refunded during the year

PrPPL 304.31VPPL 290.59

594.90Management Consultancy Fee Charged

LAnPL 14.40 LHHL 1.53UPCL 14.40 LDHL 1.28NETS 8.05LAPL 7.20OTHERS 8.03

52.08 2.81Work Contract Expenses LInPL 830.17Operation & Maintenance Expenses

LSSPL 3.14

Receipts/Payments/Adjustments(Net)+(-)

LPL 721.02 LBPL (59.63) PrPPL 304.31 GBR 0.01 LS 0.01 LEntPL 8.47LInPL 662.58 VPPL 290.59 GVB (0.00) LF (0.40)LHTPPL 309.36 OTHERS (3.61) LR (0.89)MPPL 111.37LKHL 108.10LSEPL (169.50)UPCL (572.28)OTHERS (167.85)

- 1,002.80 (59.63) 591.29 0.01 0.01 7.18Purchase/(Sale) of Goods MPPL 25.99 LEntPL 2.84Loan and Advances given/(Taken) during the year


143.67Inter Corporate Loans given/(refunded)/(taken)/Repaid during the year

LGL (152.00) LHTPPL 301.76 LHHL 135.72LHPL 196.19 LDHL 53.97LSEPL 85.46LAPL 59.26MPPL (238.56)UPCL (329.44)LPL (609.01)OTHERS (10.91)

(152.00) (545.25) 189.69 -Purchase of Fixed Assets LTHPL 0.17 LDHL 0.26

LBHPPL 0.09 LVTPL 0.04LKPL 0.07 HPL 0.00LAPL 0.01

0.34 0.30Sale of Fixed Assets LTHPL 0.56 LDHL 0.63

LAnPL 0.52 LHHL 0.44MMTEL 0.41 HPL 0.11LAPL 0.26 LVTPL 0.06OTHERS 0.41

2.16 1.24


103


Holding Company


Fellow Subsidiaries


Influence Exists



Personnel




relativesParty Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Corporate Guarantee Given to Bank/FI on Behalf of Related Parties

UPCL 4,837.35 LBPL 3,646.08 HPL 450.00LRIPL 2,891.16 LHHL 125.00OTHERS 4,067.32 LDHL 92.03

OTHERS 303.1411,795.83 3,646.08 970.17

Balance Receivable at the year end-Share Application Money

MMTEL 6.20 VPPL 15.21 NePPL 0.08PPPL 0.01 OTHERS 0.60 CaPTL 0.03

6.21 15.81 0.11Balance Receivable at the year end-Inter Corporate Loans

LHTPPL 627.66 LHHL 164.20LHPL 196.19 LDHL 53.97LPL 112.08OTHERS 82.93

1,018.86 218.17Balance Receivable at the year end-Loans&Advances


209.27Balance Receivable at the year end-OTHERS (Trade Receivables and Other Receivables)

LTPL 2,541.75 LBPL 202.23 LVTPL 69.07 LR 14.02LInPL 596.23 LHHL 68.69 OTHERS 1.51LAPL 458.54 OTHERS 12.32OTHERS 745.73

4,342.25 202.23 150.08 15.53Balance Payable at the year end-Inter Corporate Loans

LGL 152.00 UPCL 309.44LSEPL 68.88LAnPL 45.00NETS 24.27

152.00 447.59Balance Payable at the year end-OTHERS

LAPL 1,493.21 LBPL 1,524.95 LVTPL 933.15 SCM 0.00 LR 0.90UPCL 970.46 HPL 756.71 GVB 0.00 LF 0.22LInPL 865.18 OTHERS 5.16 LCL 0.14OTHERS 1,689.35 LHrPPL 0.07

5,018.20 1,524.95 1,695.02 0.00 1.33

39 Capital and Other Commitments(` Crores)

Particulars March 31, 2015 March 31, 2014a) Investment Commitment in Subsidiaries and Associates 5,989.47 4,919.69 b) Contractual obligations for purchase of fixed assets 15.29 - c) Company has a commitment to invest in two of its subsidiaries as promoter support. Since it is

need based, amount can’t be quantified.

40 Contingent Liabilities - Not probable and therefore not provided for(` Crores)

Particulars March 31, 2015 March 31, 2014A. Claims disputed by the company Income Tax Demands disputed by the Company relating to disallowances made in various

assessment proceedings, under appeal 264.41 10.15

Claims against the Company not acknowledged as debt 325.04 15.61 Sales Tax / Entry Tax Demands disputed by the Company, under appeal 200.46 8.37 Service Tax demands disputed by the Company relating to applicability of service tax to

various services, under appeal 140.21 116.18

B. Outstanding Corporate Guarantees Given to Financial Institutions, Banks on behalf of other group companies 16,823.79 16,412.09


104

41 Forward Contracts

(` Crores)


Details of Forward Cover for amount outstanding as on Balance sheet date

For Buy NIL (March 31, 2014 : USD 0.58 Crores) - 34.94

Details of Unhedged Foreign Currency Exposure

March 31, 2015

Currency Exchange Rate Amount in Foreign Currency (Crores)

Amount in INR (Crores)

Trade Receivables USD 62.59 12.66 792.45

Trade Payables USD 62.59 22.01 1,377.69

Trade Payables EURO 67.51 0.06 3.92

Advance to Suppliers USD 44.83 12.93 579.50

Advance from Customers USD 45.17 34.83 1,573.29

Loans Receivable USD 62.59 7.68 480.84

Foreign Currency Term Loan USD 62.59 6.67 417.58

March 31, 2014

Currency Exchange Rate Amount in Foreign Currency

(Crores)


Trade Receivables USD 60.10 14.59 876.97

Trade Receivables AUD 55.71 0.12 6.76

Trade Payables USD 60.10 23.02 1,383.61

Trade Payables EURO 82.58 0.07 5.43

Advance to Suppliers USD 44.94 13.27 596.15

Advance to Suppliers EURO 68.18 - 0.17

Advance to Suppliers GBP 86.45 - 0.05

Advance from Customers USD 45.15 34.65 1,564.60

Loans Receivable USD 60.10 3.59 215.52

Foreign Currency Term Loan USD 60.10 9.62 577.97

Foreign Currency Term Loan EURO 82.58 0.17 14.12

42 Deferral/capitalisation of Exchange Difference

The company has selected the option given in paragraph 46A of the Accounting Standard – 11,“The Effects of Changes in Foreign Exchange Rates” with effect from April 1, 2011. The foreign exchange (gain) / loss arising on revaluation of long term foreign currency monetary items in so far as they relate to the acquisition of depreciable capital assets to be depreciated over the balance life of such assets and in other cases the foreign exchange (gain) / loss to be amortised over the balance period of such long term foreign currency monetary items. On availment of option under this notification, foreign exchange difference remains unamortized is ` 75.67 (March 31 2014: `75.17) Crores.

43 During the year, the company along with its step down subsidiaries had entered into a definitive Share Purchase Agreement (SPA) on August 13, 2014 with the Adani Power Limited (APL) for sale of 100% stake in Udupi Power Corporation Limited (UPCL) – 1200 MW (a step down subsidiary of the company) imported coal based thermal power plant situated in Karnataka, India (effective date August 18, 2014) and the said SPA terms were amended and restated on February 6, 2015. As the receipt of full share sale consideration and transfer of shares to APL was effected post March 31, 2015 i.e. on April 20, 2015, the effects of this transaction is not considered for the year ended March 31, 2015.


105

44 Disclosure of Loans and Advances to Subsidiaries, Associates, Joint Ventures and Others (Pursuant to Clause 32 of the Listing Agreement)

(` Crores)

Amount outstanding as at Maximum amount outstanding during the year

March 31, 2015 March 31, 2014 March 31, 2015 March 31, 2014

Subsidiaries

Lanco Hydro Power Limited # 196.19 196.19 196.19 196.19

Lanco Thermal Power Limited 293.96 - 293.96 13.07

Lanco Amarkantak Power Limited # 48.55 78.43 287.79 99.63

Lanco Solar Energy Private Limited 46.77 - 57.00 -

Lanco Solar Private Limited 4.50 4.50 4.50 6.00

Mercury Projects Private Limited - - - 255.24

Lanco Power Limited - - - 109.90

Lanco Power Limited # 112.08 112.08 112.08 611.19

Lanco Hydro Power Limited - - - 6.77

Lanco Kanpur Highways Limited - - - 104.49

Lanco Resources International Pte Limited 465.44 206.52 468.23 369.75

Lanco Hills Technology Park Private Limited - 421.66 790.35 421.66

Lanco Hills Technology Park Private Limited # - 206.00 - 206.00

Udupi Power Corporation Limited # - - - 220.00

Lanco Wind Power Private Limited # 3.25 2.75 3.25 2.75

Lanco Budhil Hydro Power Private Limited - - - 344.45

Lanco Hoskote Highway Limited - 164.20 181.00 265.03

Lanco Devihalli Highways Limited - 53.97 70.67 87.80

# Lower than bank rate

45 Disclosures required under Section 22 of MSMED Act 2006 under the Chapter on Delayed Payments to Micro and Small Enterprises

(` Crores)


Principal amount remaining unpaid to any supplier as at the end of the year 2.50 2.05

Interest due on the above amount 0.41 0.07

Amount of Interest Paid in terms of section 16 of MSMED Act, 2006 - -

Amount of payments made to the suppliers beyond the appointed day during the year 0.02 0.05

Amount of interest due and payable for the delay in making the payment but without adding the interest specified under Act

- 0.00

Amount of interest accrued and remaining unpaid at the end of the year 0.41 0.07

46 CIF Value of Imports(` Crores)

Particulars March 31, 2015 March 31, 2014EPC, Construction goods and Traded goods 277.51 846.35 Capital Goods 0.17 -

277.68 846.35


106

47 Expenditure In Foreign Currency (Accrual Basis)

(` Crores)


Technical Consultation Fee 13.00 8.41

Contract Expenditure - 52.31

Travel 0.53 6.17

Interest on Foreign Currency Term Loan 0.93 9.56

Others 1.27 13.43

15.73 89.88

48 Imported and Indigenous raw materials, components and spare parts consumed

March 31, 2015 % of Total

Consumption

March 31, 2015` Crores

March 31, 2014 % of Total

Consumption

March 31, 2014 ` Crores

Raw Materials

Imported 37% 277.92 48% 850.62

Indigenous* 63% 481.51 52% 935.88

100% 759.43 100% 1,786.50

Components

Indigenous 100% 5.24 100% 11.96

100% 5.24 100% 11.96

Spare Parts

Indigenous 100% 3.94 100% 6.44

100% 3.94 100% 6.44

* Includes cost of provision for AS-7 ` 93.07 (March 31, 2014: ` 36.99) Crores.

49 Earnings In Foreign Exchange (Accrual Basis)

(` Crores)


Interest 16.21 10.75

Contract Receipts 1.13 85.31

Other Income 0.94 -

18.28 96.06

50 As at March 31, 2015 the Company has not paid principal amount of ` 0.49 (March 31, 2014 : ` 96.89) Crores and interest amount of ` 52.22 (March 31, 2014 : ` 50.99) Crores.

51 (a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited(LTPL) and Lanco Hydro Power Limited (LHPL) as thermal power holding company and hydro power holding company respectively.


107

(b) As approved by the members vide their resolution dated March 19, 2010 the Company has sold its shareholding in some of its

Subsidiaries and Associate Companies (hereinafter referred as ‘related entities’) to its wholly owned step down subsidiaries i.e. Lanco

Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regulus Power Private Limited (an erstwhile subsidiary)

on March 30, 2012 for total cash consideration amounting to ` 6,815.51 Crores. As of March 31, 2015 ` 1,385.07 (March 31, 2014 `

2,644.22) Crores representing the balance amount of consideration for sale of shares is receivable from the above entities.

(c) As a result of the above change, one of the associate company namely Lanco Babandh Power Limited, consequent to the sale of its

equity shares to an associate i.e. Regulus Power Private Limited, has become an associate of an associate.

(d) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt

of approvals, the Company has recorded the sale of investments in related entities in the financial statements. Up to the year

ended March 31, 2015, the management has obtained approvals from the most of the lenders and the management is confident

of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by

the lenders to the respective related entities may become due if the Company still wants to pursue transfer of shares, or the sold

investments will be purchased back by the company. Based on legal advice, the management is of the opinion that they have

complied with relevant laws and regulations.

52 The Company has entered into transactions with related parties, including some of its associates namely Lanco Vidarbha Thermal Power

Limited (LVTPL), Himavat Power Limited (HPL), Vainateya Power Private Limited (VPPL) and Lanco Babandh Power Limited (LBPL) (fellow

Subsidiary) whose details are shown in summary of the transactions with related parties, under note 38. The Company along with Lanco

Group Limited (Holding Company) and through various intermediate companies holds the remainder of shares in these associates and

LBPL. In case of LVTPL, LBPL and HPL, the Group holds cumulative compulsorily convertible preference shares which when exercised for

conversion as per the terms of these shares would result in these companies becoming subsidiaries of the Company or its step down

subsidiaries.

53 As on March 31, 2015, the Company has loans aggregating ` 215.41 (March 31, 2014 ` 40.81) Crores falling due over next twelve months

period and also unpaid dues of ` 52.71 (March 31, 2014 ` 147.88) Crores of the company as at March 31, 2015. Apart from this, the

Company has commitments to support its various ongoing projects. These matters require the Company to garner such additional cash

flows to fund the operations as well as investment obligations to ongoing projects. The management is actively considering the aspects

like dilution of stake in subsidiary companies, disposal of non-core assets for which necessary steps have already been taken along with

CDR scheme approved by CDR EG would bring in additional cash flows into the system to meet its obligations.

54 Lanco Anpara Power Limited - 1200 MW (LAnPL) one of the step down subsidiary of the company, had been operating at sub optimal

levels during the stabilization phase and on account of coal & infrastructure constraints. The LAnPL has taken necessary steps and

confident of improving the operating levels of the plant in future and would meet the financial obligations as and when they arise.

Due to non fulfilment of certain obligations by buyers i.e. Uttar Pradesh State Power Distribution Companies under the PPA with the

LAnPL for sale of 1,100 MW power, LAnPL has terminated the PPA and exercised the option available under PPA. The LAnPL filed petition

before UPERC for resolution of options. UPERC had appointed independent committee to give the recommendation on the amount of

compensatory tariff to enable the plant operation to be viable. The committee has already submitted its report to UPERC in March,2015.

The Management is taking constructive and necessary steps to improve the operating levels of the plant in future and of the view that

the carrying value of the investments of LAnPL are realizable at the value stated therein.

55 Mahatamil Mining and Thermal Energy Limited (MMTEL), a subsidiary of the company had entered into Coal Mining Services (CMS) agreement

with Mahatamil Collieries Limited (MCL) for developing and mining of Gare pelma II Coal block located in the state of Chhattisgarh, the said

coal block was cancelled by the Hon’ble Supreme Court. As per CMS agreement MMTEL has incurred an amount of ` 204.66 Crores till March

31, 2015 towards exploration, infrastructure and earnest money deposit. The amount incurred has been claimed by MMTEL as per terms of

the Coal Mines (Special Provisions) Ordinance, 2014 and the management is confident on recoverability of the claim.

56 Lanco Resources International Pte Limited (LRIPL) along with its subsidiary companies (Griffin Coal Mine Operations, Australia), a

subsidiary of the company have been incurring losses from acquisition onwards. The management is taking necessary steps to optimise

its mining cost and to improve the coal mining capacity. Upon implementation of short term initiatives, the management is confident of

improving the profitability of the business in short period and carrying value of the assets are realizable at the value stated in the books.


108

As per our report of even date.For and on behalf of the Board of Directors of Lanco Infratech Limited




57 Lanco Kanpur Highways Limited (LKHL), a subsidiary of the company had entered into concession agreement with NHAI for developing

a road project in Uttar Pradesh state under BOOT mechanism. The construction work is delayed due to pending approvals and right of way to be arranged by NHAI. During the year LKHL has received notice of termination of concession agreement from NHAI and issued a notice of termination of concession agreement to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. Based on the expert legal opinion, the management is confident on the recoverability of its claims submitted and is not expecting any liability on counter claims filed by NHAI.

58 Managerial remuneration paid during the year aggregating to 1.69 Crores is in excess of the permissible limits of remuneration payable under the provisions of the Companies Act, 2013 read with rules notified thereon. The company approached the Central Government seeking its approval for payment of such remuneration in excess of limits and the Central Government in this regard directed the company to obtain a no objection from the CDR lenders for granting required approval. The Company is in the process of seeking the required no objection from lenders.

59 The company has revised depreciation as per the provisions of Schedule – II of the Companies Act 2013 which is effective from April, 2014. Consequently, the depreciation for the current year is higher by `25.07 Crores. As per the transitional provision, depreciation of ` 8.25 Crores (Net of deferred tax ` Nil) has been adjusted against the retained earnings.

60 Previous year figures have been regrouped / reclassified where ever necessary, to conform to those of the current year.

61 On exercising of the option available under Schedule III to prepare the financials in Crores rounded off to two decimals, the amounts / numbers below fifty thousands in the financials are appearing as zero.


109


Consolidated Financial Statements

Independent Auditor’s ReportTo the Members of Lanco Infratech Limited

Report on the Consolidated Financial Statements

We have audited the accompanying Consolidated Financial Statements of Lanco Infratech Limited (“the Holding Company” or “the Company”), its subsidiaries (the Holding Company and its subsidiaries together referred to as “the Group”) and its associates, comprising of the Consolidated Balance Sheet as at March 31, 2015, the Consolidated Statement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as ‘the Consolidated Financial Statements’).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these Consolidated Financial Statements in terms with the requirement of the Companies Act, 2013 (“the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group including its associates in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of the Holding Company, as aforesaid.

Auditor’s’ Responsibility

Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under sub section (10) of Section 143 of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Consolidated Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Consolidated Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Consolidated Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the Consolidated Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Holding Company has an adequate internal financial control system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well as evaluating the overall presentation of the Consolidated Financial Statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in the Sub Paragraph (a), (b) and (c) of the Other Matters Paragraph below, is sufficient and appropriate to provide a basis for our qualified audit opinion on the Consolidated Financial Statements.

Basis for Qualified Opinion

Attention is invited to

a. Note 53(b) to the Consolidated Financial Statements, where Lanco Kondapalli Power Limited (LKPL), a step down subsidiary of the Company has capitalised borrowing costs amounting to `272.21 Crores and ` 441.73 Crores for the year ended and cumulatively up to March 31, 2015 (July 1, 2013 to March 31, 2015) respectively incurred on a plant which is substantially complete, notwithstanding the management’s view, pending commissioning in respect of which, LKPL has to secure the supply of requisite natural gas. However, in our opinion, the capitalization of such expenses is not in accordance with the relevant Accounting Standard. Had the aforesaid expenditure not been capitalised, loss of the Group (Net of Minority Interest) for the year ended March 31, 2015 and cumulatively up to March 31, 2015 would have been higher by `160.60 Crores and `260.62 Crores respectively.


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b. Note 38 to the Consolidated Financial Statements, include Financial Statements of Lanco Resources International Pte Limited (LRIPL) and its subsidiaries, whose consolidated Financial Statements reflect total assets of ` 6,874.58 Crores as at March 31, 2015, the total revenue of ` 565.81 Crores and total loss of ` 946.62 Crores for the year ended March 31, 2015. These financial statements and other financial information have been prepared by the management and which have not been audited and our opinion is based solely on the management accounts. We are unable to comment on adjustments that may have been required to these Consolidated Financial Statements, had such Consolidated Financial Statements been audited.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid Consolidated 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, of the state of affairs of the Group and its associates as at March 31, 2015 and their consolidated loss and its consolidated cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, your attention is invited to:

a. Note 37 to the Consolidated Financial Statements, which explain the structuring undertaken by the Groups’ management during the year ended March 31, 2012. The Company’s investment as of March 30, 2012 in various subsidiaries and associates was transferred to wholly owned step down subsidiaries and to an associate of wholly owned step down subsidiary aggregating to `6,815.51 Crores that require lenders and customer approvals. Management having received many such approvals aggregating to 96% in value of the lenders consenting to structuring, the management is confident of receiving the balance approvals from lenders and customer and has taken the effect of these transfers while preparing these Consolidated Financial Statements. In case any of these residual approvals are not granted, the management will have to revisit the structure and the consequential impact would then be recorded in these Consolidated Financial Statements.

b. Note 39 to the Consolidated Financial Statements, which explains the payment of managerial remuneration aggregating to 1.69 Crores which is in excess of the permissible limits of remuneration payable under the provisions of the Companies Act, 2013 read with rules notified thereon. The Company approached the Central Government seeking its approval for payment of such remuneration in excess of limits and the Central Government in this regard directed the Company to obtain a No objection from the CDR lenders for granting required approval. The Company is in the process of seeking the required No objection from lenders and accordingly no adjustments have been made in these consolidated financial statements.

c. Note 41 to the Consolidated Financial Statements, regarding the adequacy of disclosure concerning the Group’s ability to meet its financial obligations including loans, overdue loans, unpaid interest and ability to fund obligations pertaining to operations including unpaid creditors, repayment of advances for ensuring normal operations and investments in ongoing projects. During the year, the Group incurred a Net Loss of ` 2,036.74 Crores and have loans aggregating ` 2,502.87 Crores falling due over next twelve months period which also includes unpaid dues of the Group as at March 31, 2015. These matters essentially require the Company to garner such additional cash flows to fund the operations as well as for meeting the investment obligations towards various on-going projects comprising power and other infrastructure projects which are currently going through low level of implementation activities. In this regard the Company approached Corporate Debt Restructuring (CDR) Cell with a scheme seeking certain reliefs in relation to repayment timelines of loans and accumulated unpaid interest and additional funding for its operations. The restructuring envisages certain sacrifices from lenders and commitments from Company towards infusion of additional funds through divestment of existing assets or otherwise. In the financial year 2013-14, CDR Empowered Group approved the Debt Restructuring Scheme. The Company has completed the required obligations under the scheme to enable the infusion of additional funds from lenders and the lenders have disbursed partially. Notwithstanding certain variances in contracted terms under CDR scheme in relation to partial disbursements so far made and their utilization thereon, together with delay in implementation of CDR scheme did not still enable the Company to achieve the anticipated performance levels of operations at EPC and Project Companies which has consequential impact on Consolidated Financial Statements in the form of incurrence of further losses and cost overruns due to delayed execution at the Project level which is currently not quantifiable and as explained by management steps have been initiated to recommence the EPC operations as well as the implementation of projects under construction. However, the Consolidated Financial Statements have been prepared under the assumption, considering the management assessment to recover the balance dues from various State Electricity Boards including those of which under litigations and management plan to get requisite further funding from various other sources including the CDR scheme, cost overrun approvals by the lenders for the under construction projects and the Group’s efforts in disposing few more assets. These submissions and assertions by the management as evaluated by lenders envisage that the Company has the ability to garner the required cash flows, which have not been independently assessed by us. Relying on the above, no adjustments have been made in these Consolidated Financial Statements towards any possible impact on account of low key operations and delayed execution of projects under implementation.


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d. Note 53 (a) to the Consolidated Financial Statements, regarding the uncertainty of the availability of natural gas to operate Phase II and Phase III power plants of Lanco Kondapalli Power Limited (LKPL), a step down subsidiary of the Company. In view of the said uncertainty, LKPL has approached its lenders for approving the refinance proposal for Phase II debt and restructuring of Phase III debt. Pending availability of requisite gas required for commencing the operations no impact has been assessed on these Consolidated Financial Statements on the eventual availability of gas to operate the Phase II and Phase III power plants, which is indeterminable at this point of time.

e. Note 54 (b) to the Consolidated Financial Statements, which explains the management’s assessment with respect to the Order of Haryana Electricity Regulatory Commission (HERC) dated January 23, 2015, in regard to the litigation in respect of tariff determination in terms of the power purchase agreement relating to one of the power generating units of Lanco Amarkantak Power Limited (LAPL), a step down subsidiary of the Company. LAPL intends to seek further relief in the appropriate forum against the said order of HERC. Consequently, the revenue recognized in the previous year’s amounting to ` 195.24 Crores (` Nil during the period ended March 31, 2015), is treated as recoverable and no provision is considered necessary in these Consolidated Financial Statements based on the management’s assessment and legal advice obtained.

f. Note 55 to the Consolidated Financial Statements, in regard to one of the power generating units of Lanco Amarkantak Power Limited (LAPL), a step down subsidiary of the Company, revenue continues to be recognized by LAPL on provisional basis, based on the tariff order approved by Madhya Pradesh Electricity Regulatory Commission (MPERC) vide order dated December 01, 2012 which is applicable upto March 31, 2013. Pending the tariff determination, no adjustments have been made in these Consolidated Financial Statements.

g. Note 58 to the Consolidated Financial Statements, in relation to managerial remuneration paid by Udupi Power Corporation Limited (UPCL), a step down subsidiary of the Company, amounting to ` 1.48 Crores during the year. The payment of remuneration to the Director needs approval of Central Government. UPCL is in the process of making an application to the Central Government for approval of the same. Pending final outcome this matter, the statutory auditors of UPCL have drawn attention in their auditor’s report as an emphasis of matter on their inability to comment on the consequential adjustments.

h. Note 59 to the Consolidated Financial Statements, in relation to revenue recognition of Udupi Power Corporation Limited (UPCL), a step down subsidiary of the Company, on the basis of tariff as determined by the Central Electricity Regulatory Commission (CERC) by its final tariff order dated February 20, 2014 and consequent appeal of the tariff order by the Principal Buyers with the Appellate Tribunal for Electricity (APTEL) and accordingly the revenue recognized and non-confirmation of balances representing the trade receivables for which the statutory auditors of UPCL have drawn attention in their auditor’s report as an emphasis of matter.

i. Note 63 to the Consolidated Financial Statements, in relation to the carrying value of the assets held by Lanco Anpara Power Limited (LAnPL), a step down subsidiary of the Company. Though LAnPL has been incurring losses ever since the commencement of commercial operation and accumulated losses incurred so far eroded the net worth significantly, taking into consideration LAnPL management’s assessment of the situation including efforts towards seeking revision in tariff pending before the regulator, the management of the Company is of the view that the carrying value of the asset of LAnPL is realizable at the value stated therein. Accordingly no adjustments have been made in these Consolidated Financial Statements.

j. Note 76 to the Consolidated Financial Statements, which explains the matter regarding Lanco Teesta Hydro Power Limited (LTHPL), a step down subsidiary of the Company relating to termination of Long Term PPA with Maharashtra State Electricity Distribution Company Limited (MSEDCL) and the time and consequential cost overrun of the project and the management’s plans to meet the cost overrun of the project. There has been an extension of Commercial Operation Date (COD) due to the circumstances beyond the control of LTHPL resulting in extended execution of the Hydro Power project. In the opinion of management, the execution of the project with the increased cost and extended timelines for bringing the assets to its intended use is still viable even taking into account the current level of low implementation activities which does not amount to interruption thus continued to capitalise all the costs including interest. The management expects that suitable arrangements for power sale would be completed in the due course and therefore the carrying value of the project asset doesn’t warrant any adjustment.

k. Note 77 to the Consolidated Financial Statements, which explains the management’s view with respect to the impact of unprecedented flash floods in Uttarakhand that seriously affected Lanco Mandakini Hydro Energy Private Limited (LMHEPL), a step down subsidiary of the Company implementing a Hydro Power Project of 76 MW capacity. The insurance survey has been completed and the claims have been lodged with the insurer. LMHEPL has received an interim payment from the Insurer against the claim lodged. In the assessment of management, the potential damage to the carrying value of asset is unlikely to exceed the expected insurance claim. Relying on the assessment of the management of LMHEPL which have not been independently evaluated by us, no adjustments have been made in these Consolidated Financial Statements.

l. Note 78 to the Consolidated Financial Statements, which explain land dispute at Lanco Hills Technology Park Private Limited (LHTPPL), a subsidiary of the Company, the ultimate outcome of these matters cannot presently be determined. Management, based upon its assessment and legal advice obtained, is confident of the outcome of the matter in its favour.


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m. Note 82 to the Consolidated Financial Statements, in relation to Lanco Kanpur Highways Limited (LKHL), a subsidiary of the Company, has received a notice of termination to the Concession Agreement from National Highways Authority of India (NHAI) and LKHL has also issued a notice of termination to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. As on March 31, 2015, LKHL and its EPC contractor have incurred certain costs towards the project, the realizability of these amounts are dependent on the outcome of the arbitration proceedings.

n. Note 83 to the Consolidated Financial Statements, dealing with cancellation of coal blocks by the Hon’ble Supreme Court, which included coal mine jointly allotted to Tamil Nadu Electricity Board and Maharashtra State Mining Corporation Limited, the Allottees. Mahatamil Mining and Thermal Energy Limited (MMTEL), a subsidiary of the Company, entered into Coal Mining Services Agreement with the Allottees of the mine, pursuant to which, MMTEL incurred an amount of ` 204.79 Crores towards the Project, the realizability of which is dependent on the compensation to be awarded under the Ordinance issued by Government of India. The Company has obtained a legal opinion in this regard based on which, the amount incurred is considered to be recoverable and, hence no adjustments have been made in these Consolidated Financial Statements.

o. Note 90 to the Consolidated Financial Statements, which explain the transaction entered by the Company along with its step down subsidiaries for sale of their 100% stake in Udupi Power Corporation Limited (UPCL). As per the agreed terms, with effect from August 18, 2014, on closure of the transaction, the result of operations of the UPCL, shall belong to the Buyers. However, the current Consolidated Financial Statements include turnover of ` 1,711.09 Crores and Loss of ` 73.34 Crores related to the period August 18, 2014 to March 31, 2015, and will be dealt with appropriately on closure of the transaction.

p. Note 91 to the Consolidated Financial Statements, in relation to the carrying value of assets held by step down subsidiaries of Lanco Resources International Pte Limited (LRIPL), a subsidiary of the Company, where the accumulated losses exceeded the net worth of LRIPL, taking into account the management’s assessment of the situation including short term initiatives to be implemented to significantly enhance the profitability in the medium to long run, the management is of the view that the carrying value of the assets are realizable at the value stated therein. Accordingly no adjustments have been made in these Consolidated Financial Statements.

Our opinion is not qualified in respect of the above matters.

Other Matters

a. We did not audit the financial statements of certain subsidiaries whose financial statements reflect total assets of ` 10,590.65 Crores as at March 31, 2015 and total revenue of ` 2,949.54 Crores for the year ended March 31, 2015. These audited financial statements and other financial information for these subsidiaries have been audited by other auditors whose reports have been furnished to us, and our opinion on these consolidated financial statements is based solely on the reports of the other auditors.

b. We did not audit the financial statements of certain overseas subsidiaries whose financial statements, prepared under their respective accounting framework, in the aggregate, reflect total assets of ` 3,147.64 Crores as at March 31, 2015 and total revenue of ` 284.05 Crores for the year ended March 31, 2015. The audited financial statements of these subsidiaries have been prepared in accordance with the respective accounting framework and have been audited by other auditors who have submitted their opinions, prepared under generally accepted auditing standards of their respective countries, to the management of the respective overseas subsidiaries, copies of which have been provided to us by the Company. The Management of the Company has converted the financial statements of these overseas subsidiaries to accounting principles generally accepted in India, for the purpose of preparation of the Company’s consolidated financial statements. Our opinion, thus in sofar relates to amounts included in respect of these overseas subsidiaries, is based solely on the reports of the other auditors.

c. We did not audit the financial statements of certain associates, whose financial statements reflect the Group’s share of loss of ` 0.01 Crores for the year ended March 31, 2015. These financial statements and other financial information for these associates have been audited by the other auditors whose reports have been furnished to us, and our opinion on these consolidated financial statements is based solely on the reports of the other auditors.

d. We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets of ` 207.50 Crores as at March 31, 2015 and total revenue of ` 0.03 Crores for the year ended March 31, 2015. These financial statements and other financial information of these subsidiaries have been prepared by the management and our opinion on these consolidated financial statements is based solely on the management accounts.

e. We did not audit the financial statements of certain associates, whose financial statements reflect the Group’s share of Loss of ` 3.49 Crores. These financial statements and other financial information of the associates have been prepared by the management and our opinion on these consolidated financial statements is based solely on the management accounts.

Our opinion on the Consolidated Financial Statements, and our report on Other Legal and Regulatory Requirements below, is not qualified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.


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Report on Other Legal and Regulatory Requirements

1. As required by ‘the Companies (Auditor’s Report) Order 2015 (“the Order”), issued by the Central Government of India in terms of sub section (11) of Section 143 of the Act, based on the comments in the auditor’s report of the Holding company, its subsidiaries and associates incorporated in India, to whom the Order applies, we give in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, we report that:

a. We have sought and, except for the effect of the matter described in sub paragraph (b) of the Basis for Qualified Opinion paragraph above, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid Consolidated Financial Statements.

b. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our Opinion, proper books of account as required by law relating to preparation of the aforesaid Consolidated Financial Statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.

c. The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and the Consolidated Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the Consolidated Financial Statements.

d. Except for the effects of the matter described in sub paragraph (a) of the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid Consolidated Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The matter described in sub paragraphs (c), (d), (j), (l), (m), (n) and (p) to the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Group.

f. On the basis of the written representations received from the directors of the Holding Company as on 31st March, 2015 taken on record by the Board of Directors of the Holding Company and the reports of the other statutory auditors of its subsidiary companies and associate companies, none of the directors of the Group companies and its associate companies is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

g. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualification Opinion paragraph above.

h. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. Except for the effect of the matter described in sub paragraph (b) of the Basis for Qualified Opinion paragraph above, the Consolidated Financial Statements disclose the impact of pending litigations on its consolidated financial position of the Group and its associate companies

ii. Except for the effect of the matter described in sub paragraph (b) of the Basis for Qualified Opinion paragraph above, provision has been made in the Consolidated Financial Statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There are no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Group and its associate companies.

For Brahmayya & Co.Chartered Accountants

Firm’s Regn No. 000511S

Lokesh VasudevanPlace: Gurgaon PartnerDate: May 29, 2015 Membership No. 222320


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Annexure to the Independent Auditor’s Report on the Consolidated Financial StatementsThe annexure referred to in Clause (1) of “Report on Other Legal and Regulatory Requirements” Paragraph of the independent Auditor’s Report of even date to the members of Lanco Infratech Limited (“the Holding Company”) on the Consolidated Financial Statements as of and for the year ended March 31, 2015.

Our reporting on the Order includes 31 subsidiary companies and 13 associate companies incorporated in India, to which the Order is applicable, which have been audited by other auditors and our report in respect of these entities is based solely on the reports of the other auditors, to the extent considered applicable for reporting under the Order in the case of the Consolidated Financial Statements.

The Company has 1 subsidiary company and 9 associate companies incorporated in India, which have been included in the Consolidated Financial Statements based on unaudited financial statements of such companies, provided to us by the Management and hence no Report under the Order is available, and accordingly the possible effects on our reporting under the Order has not been considered.

i. In respect of the fixed assets of the Holding Company, subsidiary companies and associate companies:

(a) The respective companies have maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However in respect of a step down subsidiary, we are unable to comment about the situation of the assets due to flash floods occurred during June 2013 resulting in substantial damage and loss to various project components.

(b) The respective companies have a regular programme of verification of its fixed assets, by which, all the fixed assets are verified in a phased manner largely, over a period of three years. In our opinion and the opinion of the other auditors, this periodicity of physical verification is reasonable in regards to the size of the respective companies and the nature of its assets. In accordance with this programme, a portion of the fixed assets have been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

ii. In respect of the Inventories of the Holding Company, subsidiary companies and associate companies:

(a) The management of the respective companies, wherever applicable have conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of physical verification of inventory followed by the management of the respective companies are reasonable and adequate in relation to the size of the respective companies and the nature of their business.

(c) The respective companies are maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

iii. The Holding Company, subsidiary companies and associate companies have not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 by the respective entities, except for unsecured loans granted by certain subsidiary companies to others, where the receipts of principal and interests are as per the stipulations and there are overdue amounts in excess of Rupees One Lakh remaining outstanding as at the year end.

iv. In our opinion and opinion of the other auditors and according to the information and explanations given to us and the other auditors, there is generally an adequate internal control system commensurate with the size of the Holding Company, subsidiary companies and associate companies and the nature of its business, for the purchase of inventories and fixed assets and for sale of goods and services, where ever applicable to nature of the business. Further, during the course of our audit and other auditors’ audit, no major weakness have been noticed in the internal control system in respect of these areas. However, in case of one subsidiary company, the internal control system with regard to purchase of inventories needs to be further strengthened and in case of two subsidiary companies, there is no adequate internal control system commensurate with the size of the companies and the nature of its business for the purchase of fixed assets and capital work in progress.

v. According to the information and explanations given to us, the Holding Company, subsidiary companies and associate companies have not accepted deposits during the year in accordance with the provisions of Section 73 to 76 of the Act and the rules framed thereunder.

vi. According to the information and explanations given to us and the other auditors, in our opinion and the opinion of the other auditors, the Holding Company, subsidiary companies and associate companies, we and the other auditors have broadly reviewed the books of accounts maintained pursuant to the rules made by the Central Government for the maintenance of cost records under subsection (1) of Section 148 of the Companies Act, 2013 where ever applicable and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

vii. According to the information and explanations given to us, in respect of statutory dues of the Holding Company, subsidiary companies and associate companies:


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(a) The Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, except in case of six subsidiary companies, wherein there have been delays in large number of cases and delays in some instances in case of Holding Company, six subsidiary companies and two associate companies.

According to the information and explanations given to us and to the other auditors, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, wealth-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with appropriate authorities which were outstanding at the year end, for a period of more than six months from the date they became payable except as follows:

Name of the statue Nature of dues Amount (` in Crs)

Period to which amount relates

The Sikkim Ecology Fund and Environmental Cess

Ecology Fund and Environmental Cess*

4.72 Various dates between 1998 -2004

The Research and Development Cess Act, 1986

Research and Development Cess** 11.59 Various dates between 1998 -2004

The Income Tax Act, 1961 Income tax 0.004 F.Y 2012-13

0.56 F.Y2012-13

Tax Deducted at Source 1.12 April 2014 to August 2014

0.36 F.Y 2014-15

0.29 April 2014 to August 2014

2.27 30th April 2014

0.004 30th April 2014

0.12 F.Y 2013-14 & F.Y 2014-15

Commercial Taxes Department, Telangana

Work Contract Tax 0.01 August 2014

The Wealth Tax Act,1957 Wealth Tax 0.01 Financial Year 2013-14

Finance Act, 1994 Service Tax 0.02 F.Y 2012-13 & F.Y 2013-14

2.18 F.Y 2012-13, 2013-14 & 2014-15

Central and Local sales tax Acts VAT/Sales tax Acts 0.01 F.Y 2013-14 & F.Y 2014-15

Central Sales Tax Act,1956 Work Contract Tax 1.11 F.Y 2012-13 & F.Y 2013-14

The Building and Other Construction Workers Welfare Cess

Act, 1996

Labour Cess 0.25 FY 2012-13 to FY 2014-15

3.84 F.Y 2007-08 to F.Y 2012-13

4.78 F.Y 2007-08 to F.Y 2013-14

Karnataka Tax on Entry of Goods Act, 1979

Entry Tax 2.25 F.Y 2011-12 to F.Y 2012-13

2.38 F.Y 2011-12 to F.Y 2013-14

* The Subsidiary Company has represented to the government of Sikkim to waive the cess on the project and is awaiting the government’s direction/order in this regard.

** The payment of this due has been deferred on the basis of a stay order granted by the Hon’ble High Court in another case and the due date for the same is not prescribed.


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(b) The dues outstanding of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess that have not been deposited on account of any dispute, are as follows:

Name of the Statue

Nature of Dues Dispute Amount (` in Crs)

Amount paid under protest

(` in Crs)

Period to which the amount

relates

Forum where the dispute is pending

Building and Other Construction

Workers Act, 1996BOCW Cess

0.56 0.17 2006-09 High Court of H.P0.29 0.09 FY 2006-09 High Court0.43 - FY 2006-09 High Court

The Indian Customs Act, 1962

Customs Duty

243.00 - 2012-13 Customs, Excise and Service

tax Appellate Tribunal11.13 - 2012-13 Commissioner – Appeals

60.92 - Various years prior

to 2001Supreme Court

8.66 - Various years prior

to 2001Supreme Court

The Andhra Pradesh Value Added Tax Act,

2005

Value Added Tax5.25 -

From April, 2007 to March, 2010

High Court of AP

2.65 - From April, 2010 to

March, 2011High Court of AP

Sales Tax0.01 -

Financial Year 2009-10

The Appellate Deputy Commissioner, CT

-Hyderabad

0.17 - Financial Year

2010-11Commercial Tax Officer,

Begumpet

Penalty 0.06 - Financial Year

2011-12ACTO, Begumpet Circle,

Hyderabad

Income Tax Act, 1961

Income Tax

3.74 - Assessment year

2009-10Commissioner of Income Tax

(Appeals)



(Appeals)



(Appeals)

0.02 - Assessment Year


(Appeals)


2003-04Honorable High Court-

Hyderabad



Hyderabad



Hyderabad


2011-12Dispute Resolution Panel-

Hyderabad

0.04 - A.Y 2010-11 The Deputy Commissioner of

Income Tax

0.20 - A.Y 2011-12 Income Tax Officer Ward

16(1), Hyderabad

4.90 - AY 2012-13 Commissioner of Income Tax

(Appeals)

0.21 0.20 A.Y 2006-07 & A.Y


(TDS), Circle 1(1)

0.17 - A.Y 2007-08 The Income Tax Appellate

Tribunal, ‘C’ Bench

1.28 - A.Y 2008-09 The Income Tax Appellate

Tribunal, ‘C’ Bench


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Name of the Statue



(` in Crs)


relates


Income Tax Act, 1961

Income Tax

0.29 - A.Y 2012-13 Commissioner of Income Tax

(Appeals)

4.93 - A.Y. 2012-13 Commissioner of income tax

(Appeals)4.31 - 2011-12 Commissioner of Income Tax

TDS

0.003 - 2005-06 I.T.O0.11 - 2006-07 I.T.O0.01 - 2007-08 I.T.O0.01 - 2008-09 I.T.O

Tamil Nadu Value Added Tax Act,

2006

Sales Tax (Including

Penalty)0.38 -


The Appellate Deputy Commissioner, CT Chennai


2010-11Joint Commissioner (North)

Chennai

Value Added Tax 0.46 - Financial Year

2007-08Assistant Commissioner (CT),

T. Nagar (East) Assessment Circle, Chennai

















2013-14Assistant Commissioner, T.

Nagar (East) Assessment Circle, Chennai

Maharashtra Value Added Tax Act,

2002

Value Added Tax 0.12 - Financial Year

2010-11Assistant Commissioner,

Audit Wing – 2

Sales Tax 2.34 -


Deputy Commissioner of Sales Tax, Mumbai


2010-11Assistant Commissioner,

Audit Wing – 2Madhya Pradesh Value Added Tax

Act, 2002Value Added Tax 74.29 -


Deputy Commissioner of Commercial Taxes, Jabalpur,

Division 1

Madhya Pradesh Value Added Tax

Act, 2002

Sales Tax 13.41 - Financial Year

2012-13Deputy Commissioner of

Commercial Taxes, Jabalpur, Division 1

Entry Tax 11.95 - Financial Year

2012-13Deputy Commissioner of

Commercial Taxes, Jabalpur, Division 1


119

Name of the Statue



(` in Crs)


relates


The Finance Act, 1994

Service Tax

0.0004 - 2009-10 DCCEST

0.02 0.01 2010-11 DCCEST

0.001 - 2011-12 DCCEST

0.14 - April 2005 - March 2008

CESTAT, Bengaluru

0.16 - June 2005 - August 2008

CESTAT, Bengaluru

15.58 2.66 June 2007- March 2008

CESTAT, Bengaluru

3.86 - June 2007- July 2008

CESTAT, Bengaluru

15.47 - April 2005 - March 2008

CESTAT, Bengaluru

0.01 0.01 April 2008 - March 2009

CESTAT, Bengaluru

0.38 0.38 July 2008- September 2009

CESTAT, Bengaluru

6.58 - April 2008 - June 2009

CESTAT, Bengaluru

8.98 - July 2009- March 2010

CESTAT, Bengaluru

0.11 - October 22, 2009 - February 28, 2011

CESTAT, Bengaluru

64.42 - April 2010 - March 2011


0.48 - March 2011 - March 2012

Commissioner-Delhi

0.00 - April 2008 - March 2009

Commissioner-Delhi

18.02 - April 2011 - March 2012

Commissioner-Delhi

6.01 - April 2012 - March 2013

Commissioner-Delhi

Andhra Pradesh General Sales Tax

Act, 1956


The Sales Tax Appellate Tribunal, Hyderabad

Andhra Pradesh Minor Mineral

Concession Rules, 1996

Seigniorage Fee 19.29 - From 17th February 2006 to 6th January

2009

Minister for Mines and Geology, Government of AP

The Andhra Pradesh Tax on

Entry of Goods Act, 2001



The Central Sales Tax Act, 1956

Central Sales Tax 0.20 - Financial Year 2011-12

Assistant Commissioner (CT), T. Nagar (East) Assessment

Circle, Chennai

Bihar Value Added Tax Act, 2005


The Joint Commissioner of Commercial Taxes (Appeals)

Central Division, Patna


120

Name of the Statue



(` in Crs)


relates


Rajasthan Value Added Tax Act


Commercial Tax Officer, Chittorgarh

West Bengal Value Added Tax

Value Added Tax 0.10 - Financial Year 2010-11

Assistant Commissioner of Commercial Taxes, CTO,

RaiganjGujarat Value

Added Tax Act, 2003

Value Added Tax 1.06 - Financial Year 2010-11

ACCT, Vyara, Gujarat

(b) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Holding Company, subsidiary companies and associate companies in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. Without considering the consequential effects, if any, of the matters stated in Basis of Qualified Opinion Paragraph of our Auditor’s Report, the consolidated accumulated losses of the Holding Company, subsidiary companies and associate companies are in excess of fifty percent of the consolidated net worth and the Holding Company, the subsidiary companies and its associate companies have incurred cash losses on a consolidated basis during the financial year covered by our audit and in the immediately preceding financial year.

ix. According to the records of the Holding Company, subsidiary companies and associate companies as examined by us and the other auditors, in respect of dues to banks and financial institutions, the Group and the associate companies, wherever applicable, have defaulted in payment of interest amounting to `815.31 Crores and repayment of principal amounting to `219.91 Crores to various banks and financial institutions as at the balance sheet date. Further, the Holding Company, the subsidiary companies and associate companies did not have outstanding debentures during the year.

x. According to the information and explanations given to us, the Holding Company and two subsidiary companies have given guarantees for loan taken by others from banks and financial institutions, the terms and conditions whereof, in our opinion are not prima facie prejudicial to the interest of the Holding Company and two subsidiary companies.

xi. Based on information and explanations given to us and to the other auditors, in our opinion and the opinion of the other auditors, wherever applicable, the term loans availed were, prima facie, applied by the subsidiary companies and associate companies during the year for the purposes for which they were obtained. In respect of the Holding Company, based on the information and explanation given to us by the management, term loans including Priority Loan under the CDR Scheme have been utilized for the purposes of the CDR Scheme cash flows envisaged as approved by lenders under the CDR package.

xii. Based on the audit procedures performed for the purpose of reporting the true and fair view of the Consolidated Financial Statements and as per the information and explanations given by the management to us and report of other auditors, which we have relied upon, we report that no fraud on or by the Holding Company, subsidiary companies and associate companies have been noticed or reported during the year.

For Brahmayya & Co.Chartered Accountants

Firm’s Regn No: 000511S

Lokesh VasudevanPlace: Gurgaon PartnerDate: May 29, 2015 Membership No: 222320


121

Consolidated Balance Sheet as at March 31, 2015(` Crores)

Notes As at March 31, 2015


I. EQUITY & LIABILITIESShareholders' FundsShare Capital 3 245.09 239.24 Reserves and Surplus 4 (692.86) 1,218.30

(447.77) 1,457.54 Minority Interest 1,339.19 837.48 Non Current LiabilitiesLong Term Borrowings 5 33,145.02 30,120.19 Deferred Tax Liabilities (net) 6.1 381.12 460.63 Other Long Term Liabilities 7 2,986.52 3,070.79 Long Term Provisions 8 707.46 702.61

37,220.12 34,354.22 Current LiabilitiesShort Term Borrowings 9 4,528.64 4,756.66 Trade Payables 10 3,904.43 4,111.55 Other Current Liabilities 11 6,045.02 5,130.00 Short Term Provisions 8 83.39 196.72

14,561.48 14,194.93 TOTAL 52,673.02 50,844.17

II. ASSETSNon Current AssetsFixed Assets Tangible Assets 12 19,453.61 21,702.84 Intangible Assets 13 1,793.83 51.57 Capital Work in Progress 14 16,004.55 13,985.99 Intangible Assets under Development 15 - 48.91

37,251.99 35,789.31

Non Current Investments 16 3,142.87 3,005.52 Deferred Tax Assets (net) 6.2 96.92 41.91 Long Term Loans and Advances 18 698.97 687.08 Other Non Current Assets 19 1,021.20 842.35

42,211.95 40,366.17 Current AssetsCurrent Investment 17 12.68 0.57 Inventories 20 3,320.32 3,121.34 Trade Receivables 19.1 3,353.99 3,959.36 Cash and Bank Balances 21 808.26 579.34 Short Term Loans and Advances 18 2,359.69 2,473.68 Other Current Assets 19.2 606.13 343.71

10,461.07 10,478.00 TOTAL 52,673.02 50,844.17

Summary of Significant Accounting Policies 2.1


For and on behalf of the Board of Directors ofLanco Infratech Limited





122


For and on behalf of the Board of Directors ofLanco Infratech Limited




Consolidated Statement of Profit and Loss for the year ended March 31, 2015(` Crores)

Notes For the year ended

March 31, 2015

For the year ended

March 31, 2014I. INCOME

Revenue from Operations 22 9,371.91 10,430.03 Other Income 23 138.84 167.82 Total Revenue (I) 9,510.75 10,597.85

II. EXPENSES Cost of Materials Consumed 24 5,051.12 6,335.90 Purchase of Traded Goods 25 385.44 529.88 Subcontract Cost 261.05 169.16 Construction, Transmission, Plant / Site and Mining Expenses 26 1,025.91 1,061.47 (Increase) / Decrease in Inventories of Finished Goods and Construction / Development Work in Progress

27 (139.61) (151.11)

Employee Benefits Expenses 28 351.20 385.33 Other Expenses 29 742.89 595.35 Total Expenses (II) 7,678.00 8,925.98

III. Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) (I-II) 1,832.75 1,671.87 Finance Cost 30 3,060.21 2,762.12 Depreciation and Amortisation Expense 31 1,113.75 1,171.91

IV. Profit / (Loss) before Exceptional, Prior Period Items, Minority Interest, Share of Profit of Associates and Tax

(2,341.21) (2,262.16)

V. Exceptional Items 36 123.15 (179.26)VI. Profit / (Loss) before Prior Period Items, Minority Interest, Share of Profit of

Associates and Tax (IV+V) (2,218.06) (2,441.42)

VII. Tax Expense Current Tax / Minimum Alternative Tax (MAT) Payable 15.79 37.64 Relating to Previous Years (45.89) 9.39 Deferred Tax (86.95) (176.47)Total Tax Expense (VII) (117.05) (129.44)

VIII. Profit / (Loss) after Taxation but before Prior Period Items, Minority Interest and Share of Profit of Associates ( VI-VII)

(2,101.01) (2,311.98)

IX. Prior Period Items 35 42.52 43.50 X. Net Profit / (Loss) after Taxation, before Minority Interest and Share of Profit of

Associates (VIII-IX) (2,143.53) (2,355.48)

Add : Share of Profit / (Loss) of Associates (3.29) (33.89)Less: Elimination of Unrealised Profit on Transactions with Associate Companies (9.76) 0.15

XI. Net Profit / (Loss) after Taxation and Share of Profit of Associates before Minority Interest

(2,137.06) (2,389.52)

Less: Share of Minority Interest (100.32) (115.64)XII. Net Profit / (Loss) after Taxation, Minority Interest and Share of Profit of Associates

(Balance Carried to Balance Sheet) (2,036.74) (2,273.88)

XIII. Earnings Per Equity Share - (Face value of share ` 1/-) 32Basic (`) (8.58) (9.68)Diluted (`) (8.58) (9.68)Summary of Significant Accounting Policies 2.1


123

Consolidated Cash Flow Statement for the year ended March 31, 2015(` Crores)

For the Year Ended March 31, 2015

For the Year Ended March 31, 2014

A. CASH FLOW FROM / (USED IN) OPERATING ACTIVITIESProfit / (Loss) Before Exceptional, Prior Period Items, Minority Interest, Share of Profit of Associates and Tax

(2,341.21) (2,262.16)

Adjustments for:Depreciation and Amortisation 1,113.75 1,171.91 (Profit) / Loss on Sale of Investments (net) 10.17 (0.04)(Profit) / Loss on Sale of Fixed Assets (net) 31.15 15.61 Loss on Foreign Exchange Fluctuations (Net) 456.95 303.56 Liabilities and Provisions no longer required written back (1.43) (0.67)Provision for Advances / Claims / Debts 37.54 15.23 Employee Stock Option Charge during the year 4.37 6.35 Interest Income (90.08) (143.98)Dividend Income (4.05) (1.35)Interest Expenses 3,060.21 2,762.12 Cash Generated Before Working Capital Changes 2,277.37 1,866.58 Movement In Working Capital(Decrease) / Increase in Trade Payables 25.32 (694.70)(Decrease) / Increase in Provisions 41.02 (100.22)(Decrease) / Increase in Other Liabilities 333.47 (248.74)Decrease in Trade Receivables 379.18 668.77 (Increase) / Decrease in Inventories (58.60) 108.92 (Increase) in Loan and Advances (excluding Capital Advances) (78.12) (71.98)(Increase) in Other Assets (112.65) (146.70)Cash Generated From Operations 2,806.99 1,381.93 Direct Taxes Paid (74.33) 9.71 Net Cash Flow From Operating Activities 2,732.66 1,391.64

B. CASH FLOW FROM / (USED IN) INVESTING ACTIVITIESPurchase of Fixed Assets (including Capital Advances) (157.18) (156.08)Proceeds from Sale of Fixed Assets 5.77 65.07 Advance received against sale of Investments 743.00 - Cash and cash equivalents acquired pursuant to acquisition of subsidiaries 2.83 - Purchase of Non - Current Investments (507.43) (158.19)Proceeds from sale of Non - Current Investments 174.66 - Sale / (Purchase) of Current Investments (Net) (12.12) 4.98 Loans Recievable Received Back / (Given) (19.47) 27.11 Redemption of Bank Deposits 26.55 121.93 Advance for Investment Refunded - 594.88 Dividend Income Received 4.05 1.35 Interest Income Received 186.87 185.17 Net Cash Flow From/(Used) in Investing Activities 447.52 686.22

C. CASH FLOW FROM / (USED IN) FINANCING ACTIVITIESProceeds from Short - Term Borrowings (Net) 651.49 44.77 Proceeds from Long Term Loan 2,394.08 3,200.98 Repayment of Long Term Loan (1,645.93) (1,484.23)Proceeds / (Repayment) of Minority Interest 405.00 18.95 Interest Paid (4,754.23) (3,703.66)Net Cash Flow From / (Used in) Financing Activities (2,949.59) (1,923.19)Net Increase / (Decrease) in Cash and Cash Equivalents (A+B+C) 230.60 154.67 Cash and Cash Equivalents at the beginning of the year 386.57 231.90 Cash and Cash Equivalents at the end of the year 617.16 386.57 Components of Cash and Cash EquivalentsCash and cheques on Hand 1.12 0.45 Balances with Banks -On Current Accounts 584.30 383.21 -On Deposit Accounts 31.74 2.91 Cash and cash Equivalent as per Note 21 617.16 386.57

Notes:1 The above cash flow statement has been prepared under the ‘Indirect Method’ as set out in the Accounting Standard - 3 on Cash Flow

Statements, specified under section 133 of the Companies Act, 2013. 2 Previous year’s figures have been regrouped and reclassified to confirm to those of the current year.

As per our report of even date.For and on behalf of the Board of Directors ofLanco Infratech Limited





124

1. Corporate Information

Lanco Infratech Limited (‘LITL’ or ‘the Company’) and its subsidiaries (hereinafter collectively referred to as ‘Group’) are engaged in the business of Construction, Engineering, Procurement and Commissioning (EPC), Infrastructure Development, Power Generation, Power Trading, Property Development, Development of Expressways and Exploration, Mining & Marketing of Coal.

EPC and Construction Business

The Company and certain entities of the Group are involved in development of infrastructure facilities including Engineering, Procurement and Commissioning Services for Power Plants, Industrial Structures, Water supply, Mass housing, Institutional Buildings and Expressways.

Power Business

The Company and certain entities of the Group are involved in the generation of power. The entities are separate special purpose vehicles formed, which have entered into Power Purchase Agreements with electricity distribution companies of the respective state governments and power trading entities and other customers. National Energy Trading and Services Limited (NETS), is involved in the power trading activity.

Property Development Business

Lanco Hills Technology Park Private Limited (LHTPPL) is involved in the development of an integrated IT park named Lanco Hills in approximately 100 acres of land at Manikonda, Hyderabad part of an exclusive “Knowledge Corridor” being promoted by the Government of earlier United Andhra Pradesh, now Telangana State. The project consists of IT office space, residential buildings, luxury premier hotels, retail and commercial complex.

Resources (Coal) Business

Griffin Coal Mining Company Pty Ltd (GCM) and Carpenter Mine Management Pty Ltd (CMM) are incorporated and operating in Australia. These company’s principal activities are the exploration, mining and marketing of coal.

Solar PV Business

One of the entities in the group is with intent to establish its presence as an integrated player across the Solar PV value chain starting from manufacturing of polysilicon to development of solar farms.

2. Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013 (‘Act’), read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act (to the extent notified). The financial statements have been prepared under the historical cost convention on an accrual basis.

Notes and other explanatory information to Consolidated Financial Statements for the year ended March 31, 2015

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

Principles of Consolidation

The financial statements of the Company and its subsidiaries have been consolidated on a line by line basis by adding together the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances, transactions and the unrealized profits/losses on intra-group transactions. Unrealised losses resulting from intragroup transactions are eliminated to the extent cost can be recovered. The consolidated financial statements are drawn up by using uniform accounting policies for like transactions and other events in similar circumstances and are presented to the extent possible in the same manner as the Company’s individual financial statements.

The financial statements of the subsidiaries are consolidated from the date on which effective control is transferred to the company till the date such control exists. The difference between the cost of investments in subsidiaries over the book value of the subsidiaries net assets on the date of acquisition is recognized as goodwill or capital reserve in the consolidated financial statements.

Equity method of accounting is followed for investments in Associates in accordance with Accounting Standard (AS) 23 – Accounting for Investments in Associates in Consolidated Financial Statements, wherein goodwill / capital reserve arising at the time of acquisition and share of profit or losses after the date of acquisition are included in carrying amount of investment in associates. Unrealized profits and losses resulting from transactions between the Company and Associates are eliminated to the extent of the company’s interest in the associate. Unrealised losses resulting from transactions between the Company and Associates are also eliminated unless cost cannot be recovered. Investments in Associates, which are made for temporary purposes, are not considered for consolidation and accounted for as investments.

The financial statements of the group companies and associates used for the purpose of consolidation are drawn up to same reporting date as that of the Company i.e. year ended March 31, 2015.

Notes to the consolidated financial statements, represents notes involving items which are considered material and are accordingly duly disclosed. Materiality for this purpose is assessed in relation to the information contained in the consolidated financial statements. Further, additional statutory information disclosed in separate financial statements of the subsidiary and/or a parent having no bearing on the true and fair view of the consolidated financial statements need not be disclosed in the consolidated financial statements.


125

Entities considered for consolidation

The financial statements of the following subsidiaries (including the step down subsidiaries) and associates have been considered for consolidation:-

Sr. No. Name of company Country of

Incorporation

March 31, 2015 March 31, 2014

Relationship

Percentage of

Ownership Interest

Relationship

Percentage of

Ownership Interest

1 Lanco Power Limited (LPL) India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%2 Lanco Thermal Power Limited (LTPL) India Subsidiary of LPL 100.00% Subsidiary of LPL 100.00%3 Lanco Kondapalli Power Limited (LKPL) India Subsidiary of LTPL 59.00% Subsidiary of LTPL 59.00%4 Lanco Tanjore Power Company Limited (LTPCL) India Subsidiary of LTPL 58.45% Subsidiary of LTPL 58.45%5 Lanco Amarkantak Power Limited (LAPL) India Subsidiary of LTPL 79.89% Subsidiary of LTPL 100.00%6 Udupi Power Corporation Limited (UPCL) India Subsidiary of LTPL 100.00% Subsidiary of LTPL 100.00%7 Lanco Anpara Power Limited (LAnPL) India Subsidiary of LTPL 100.00% Subsidiary of LTPL 100.00%8 Arneb Power Private Limited (ArPPL) India Subsidiary of LPL 93.75% Subsidiary of LPL 93.75%9 Portia Properties Private Limited (PPPL) India Subsidiary of LTPL 99.99% Subsidiary of LTPL 99.99%10 Lanco Hydro Power Limited (LHPL) India Subsidiary of LPL 100.00% Subsidiary of LPL 100.00%11 Lanco Teesta Hydro Power Limited (LTHPL) India Subsidiary of LHPL 100.00% Subsidiary of LHPL 100.00%12 Lanco Budhil Hydro Power Private Limited (LBHPPL) India - - Subsidiary of LHPL 100.00%13 Lanco Mandakini Hydro Energy Private Limited (LMHEPL) India Subsidiary of LHPL 100.00% Subsidiary of LHPL 100.00%14 Lanco Rambara Hydro Private Limited ( LRHPL) India Subsidiary of LHPL 100.00% Subsidiary of LHPL 100.00%15 Diwakar Solar Projects Limited (DSPL) India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%16 Lanco Solar Energy Private Limited (LSEPL) India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%17 Lanco Solar Services Private Limited (LSSPL) India Subsidiary of LSEPL 100.00% Subsidiary of LSEPL 100.00%18 Lanco Solar Private Limited (LSPL) India Subsidiary of LSEPL 100.00% Subsidiary of LSEPL 100.00%19 Khaya Solar Projects Private Limited (KSPPL) India Subsidiary of LSEPL 100.00% Subsidiary of LSEPL 100.00%20 Bhanu Solar Projects Private Limited (BSPPL) India Subsidiary of LSPL 100.00% Subsidiary of LSEPL 100.00%21 Lanco Solar Power Projects Private Limited (LSPPPL) India Subsidiary of LSEPL 100.00% Subsidiary of LSEPL 100.00%22 Orion Solar Projects Private Limited (OSPPL) India Subsidiary of LSPPPL 100.00% Subsidiary of LSPPPL 100.00%23 Pasiphae Power Private Limited (PPPL) India Subsidiary of LSPPPL 100.00% Subsidiary of LSPPPL 100.00%24 Sabitha Solar Projects Private Limited (SSPPL) India Subsidiary of LSPPPL 100.00% Subsidiary of LSPPPL 100.00%25 Helene Power Private Limited (HPPL) India Subsidiary of LSPPPL 100.00% Subsidiary of LSPPPL 100.00%26 Omega Solar Projects Private limited (OSPPL) India Subsidiary of LSEPL 51.00% Subsidiary of LSEPL 51.00%27 Lanco Wind Power Private Limited (LWPPL) India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%28 Amrutha Power Private Limited (APPL) India Subsidiary of LWPPL 100.00% Subsidiary of LWPPL 100.00%29 Spire Rotor Private Limited (SRPL) India Subsidiary of LWPPL 100.00% Subsidiary of LWPPL 100.00%30 Emerald Orchids Private Limited (EOPL) India Subsidiary of LWPPL 86.11% Subsidiary of LWPPL 85.71%31 JH Patel Power Project Private Limited (JhPL) India Subsidiary of LWPPL 99.94% Subsidiary of LWPPL 99.94%32 National Energy Trading and Services Limited (NETS) India Subsidiary of LITL 99.83% Subsidiary of LITL 99.83%33 Mahatamil Mining and Thermal Energy Limited (MMTEL) India Subsidiary of LITL 73.90% Subsidiary of LITL 73.90%34 Mercury Projects Private Limited (MPPL) India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%35 Tasra Mining & Energy Company Private Limited India Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%36 Lanco Hills Technology Park Private Limited (LHTPPL) India Subsidiary of LITL 79.14% Subsidiary of LITL 79.14%37 Uranus Projects Private Limited (UPPL) India Subsidiary of LITL 99.97% Subsidiary of LITL 99.97%38 Jupiter Infratech Private Limited (JIPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%39 Uranus Infratech Private Limited (UIPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%40 Leda Properties Private Limited (LPPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%41 Coral Orchids Private Limited (COPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%42 Thebe Properties Private Limited (ThPPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%43 Cressida Properties Private Limited (CrPPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%44 Nix Properties Private Limited (NiPPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%45 Cordelia Properties Private Limited (CPPL) India Subsidiary of UPPL 99.98% Subsidiary of UPPL 99.98%46 Deimos Properties Private Limited (DePPL) India Subsidiary of UPPL 99.99% Subsidiary of UPPL 99.99%47 Dione Properties Private Limited (DPPL) India Subsidiary of UPPL 100.00% Subsidiary of UPPL 100.00%48 Neptune Projects Private Limited (NPPL) India Subsidiary of UPPL 99.72% Subsidiary of UPPL 99.72%49 Pearl Farms Private Limited (PFPL) India Subsidiary of UPPL 99.99% Subsidiary of UPPL 99.99%50 Telesto Properties Private Limited (TePPL) India Subsidiary of UPPL 99.98% Subsidiary of UPPL 99.98%51 Lanco International Pte Limited (LIPL) Singapore Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%52 Lanco Enterprise Pte Limited (China) China Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%


126

Sr. No. Name of company Country of

Incorporation

March 31, 2015 March 31, 2014

Relationship

Percentage of

Ownership Interest

Relationship

Percentage of

Ownership Interest

53 Lanco Infratech Nepal Private Limited (LINPL) Nepal Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%54 LE New York - LLC (LENY) New York Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%55 Lanco Power International Pte Limited (LPIPL) Singapore Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%56 Lanco Solar International Pte Limited (LSIPL) Singapore Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%57 Lanco Solar Holding Netherland B.V Utrecht (LSHNBV) Netherlands Subsidiary of LSIPL 100.00% Subsidiary of LSIPL 100.00%58 SolarFi SP 07 (SSP 07) France - - Subsidiary of LSHNBV 100.00%59 SolarFi SP 06 (SSP 06) France - - Subsidiary of LSHNBV 100.00%60 Lanco Solar International Limited (LSIL UK) United

Kingdom- - Subsidiary of LSHNBV 100.00%

61 Lanco Solar International GMBH (LSI GMBH) Germany - - Subsidiary of LSIL UK 100.00%62 Lanco Solar International US Inc. (LSI USA) USA Subsidiary of LSHNBV 100.00% Subsidiary of LSIL UK 100.00%63 Lanco IT PV Investments B.V. (LITPV) Netherlands Subsidiary of LSHNBV 100.00% Subsidiary of LSHNBV 100.00%64 Green Solar SRL (GSSRL) Italy Subsidiary of LITPV 100.00% Subsidiary of LITPV 100.00%65 Lanco US PV Investments B.V.(LUSPV) Netherlands - - Subsidiary of LSHNBV 100.00%66 Lanco Solar Holdings LLC (USA) (LSH USA) USA - - Subsidiary of LUSPV 100.00%67 Lanco Virgin Islands- 1 LLC (LVI) USA - - Subsidiary of LSH USA 100.00%68 Lanco SP PV 1 Investments B.V.(LSPPV) Netherlands - - Subsidiary of LSHNBV 100.00%69 Lanco Resources International Pte Limited (LRIPL) Singapore Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%70 Lanco Holding Netherland B.V (LHNBV) Netherlands Subsidiary of LRIPL 100.00% Subsidiary of LRIPL 100.00%71 P.T Lanco Indonesia Energy (LInE) Indonesia Subsidiary of LHNBV 100.00% Subsidiary of LHNBV 100.00%72 Lanco Resources Australia Pty. Limited (LRAPL) Australia Subsidiary of LRIPL 100.00% Subsidiary of LRIPL 100.00%73 The Griffin Coal Mining Company Pty Limited (GCM) Australia Subsidiary of LRAPL 100.00% Subsidiary of LRAPL 100.00%74 Carpenter Mine Management Pty Limited (CMM) Australia Subsidiary of LRAPL 100.00% Subsidiary of LRAPL 100.00%75 Western Australia Coal Terminal Pty Ltd( WAC) Australia Subsidiary of LRAPL 100.00% Subsidiary of LRAPL 100.00%76 Lanco Infratech (Mauritius) Limited (LIML) Mauritius Subsidiary of LIPL 100.00% Subsidiary of LIPL 100.00%77 Bhola Electricity Pvt Ltd (BEPL) Bangladesh Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%78 Sirajganj Electric Pvt Limited (SEPL) Bangladesh Subsidiary of LITL 100.00% Subsidiary of LITL 100.00%79 Lanco Kanpur Highways Limited (LKHL) India Subsidiary of LITL 99.99% Subsidiary of LITL 99.99%80 Lanco Hoskote Highway Limited (LHHL) India Subsidiary of LITL 75.32% Associate of LITL 26.42%81 Lanco Devihalli Highways Limited (LDHL) India Subsidiary of LITL 74.99% Associate of LITL 26.10%82 Lanco Vidarbha Thermal Power Limited (LVTPL) India Associate of LTPL 26.68% Associate of LTPL 26.68%83 Genting Lanco Power (India) Private Limited (GLPIPL) India Associate of LITL 26.00% Associate of LITL 26.00%84 Himavat Power Limited (HPL) India Associate of LTPL 26.67% Associate of LTPL 26.67%85 Pragdisa Power Private Limited (PrPPL) India Associate of LITL 26.00% Associate of LITL 26.00%86 Vainateya Power Private Limited (VPPL) India Associate of LITL 26.00% Associate of LITL 26.00%87 Avior Power Private Limited (AvPPL) India Associate of LITL 26.00% Associate of LITL 26.00%88 Mirach Power Private Limited (MiPL) India Associate of LITL 26.00% Associate of LITL 26.00%89 Bay of Bengal Gateway Terminal Private Limited

(BBGTPL)India Associate of LITL 26.00% Associate of LITL 26.00%

90 Charon Trading Private Limited (CTPL) India Associate of LTPL 34.33% Associate of LTPL 34.00%91 Mimas Trading Private Limited (MTPL) India Associate of LTPL 50.00% Associate of LTPL 50.00%92 Ananke Properties Private Limited (AnPPL) India Associate of LITL 26.03% Associate of LITL 26.03%93 Tethys Properties Private Limited (TPPL) India Associate of LITL 26.03% Associate of LITL 26.03%94 Bianca Properties Private Limited (BiPPL) India Associate of LITL 26.03% Associate of LITL 26.03%95 Belinda Properties Private Limited (BePPL) India Associate of LITL 26.03% Associate of LITL 26.03%96 Phoebe Trading Private Limited (PTPL) India Associate of LTPL 34.00% Associate of LTPL 34.00%97 Basava Power Private Limited (BPPL) India Associate of MPPL 26.00% Associate of MPPL 26.00%98 Siddheswara Power Private Limited (SiPPL) India Associate of MPPL 26.00% Associate of MPPL 26.00%99 Regulus Power Private Limited (RPPL) India Associate of LTPL 45.10% Associate of LTPL 45.10%100 DDE Renewable Energy Pvt. Ltd. (DREPL) India Associate of LSEPL 49.00% Associate of LSEPL 49.00%101 Electromech Maritech Pvt. Ltd. (EMPL) India Associate of LSEPL 49.00% Associate of LSEPL 49.00%102 Finehope Allied Engg. Pvt. Ltd. (FAPPL) India Associate of LSEPL 38.00% Associate of LSEPL 38.00%103 KVK Energy Ventures Pvt. Ltd. (KEVPL) India Associate of LSEPL 49.00% Associate of LSEPL 49.00%104 Newton Solar Private Limited (NSPL) India Associate of LSEPL 26.00% Associate of LSEPL 26.00%105 Saidham Overseas Pvt. Ltd (SOPL) India Associate of LSEPL 35.00% Associate of LSEPL 35.00%106 Vasavi Solar Power Pvt Ltd (VSPPL) India Associate of LSEPL 49.00% Associate of LSEPL 49.00%


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2.1 Summary of significant accounting policies

i. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in India (Indian GAAP) requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

ii. Revenue Recognition

Revenue is recognized based on the nature of activity to the extent it is probable that the economic benefits will flow to the group and revenue can be reliably measured.

The group collects service tax, sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the group. Hence, they are excluded from revenue. The following specific recognition criteria must also be met before revenue is recognized:

EPC and Construction Services

For EPC and construction contracts, contract prices are either fixed or subject to price escalation clauses.

Revenues are recognised on a percentage of completion method measured on the basis of stage of completion which is as per joint surveys and work certified by the customers.

Profit is recognised in proportion to the value of work done (measured by the stage of completion) when the outcome of the contract can be estimated reliably.

The estimates of contract cost and the revenue thereon are reviewed periodically by management and the cumulative effect of any changes in estimates in proportion to the cumulative revenue is recognised in the period in which such changes are determined. When the total contract cost is estimated to exceed total revenues from the contract, the loss is recognised immediately.

Amounts due in respect of price escalation claims and/or variation in contract work are recognized as revenue only if the contract allows for such claims or variations and/or there is evidence that the customer has accepted it and are capable of being reliably measured.


Sale of Power

Revenue from sale of energy is recognized on the accrual basis in accordance with the provisions of Power Purchase

Agreement. Claims for delayed payment charges and any other claims, which the entities in the group are entitled as per the Power Purchase Agreement, are accounted for in the year of acceptance.

Revenue from sale of infirm power is recognized on accrual basis as per the Central Electricity Regulatory Commission (CERC) norms.

In the case of LBHPPL the sale of energy by the plant is accounted net of 12% free power in the shape of royalty given to Government of Himachal Pradesh as per Implementation Agreement dated November 22, 2005.

Sale of Solar Modules

Revenue is recognized based on the sale of Module to the extent it is probable that the economic benefits will flow to the Group and revenue can be reliably measured.

Carbon Credits

Revenue from sale of Verified Emission Reductions (VERs) and Certified Emission Reductions (CERs) is recognized on sale of the eligible credits.

Property Development

Revenue from real estate under development is recognised upon transfer of significant risks and rewards of ownership of such real estate, as per the terms of the contracts entered into with buyers, which generally coincides with the firming of the agreement for sale and when the buyer’s investment is adequate enough to demonstrate a commitment to pay.

In accordance with the Guidance Note on Recognition of Revenue by Real Estate Developers issued by the Institute of Chartered Accountants of India (the “ICAI”) the Revenue from sale of residential and commercial properties is recognized on the “percentage of completion method”. Percentage of completion is determined on the basis of actual project cost (including cost of Land) incurred thereon to total estimated project cost, where the actual cost is 25 percent or more of the total estimated project cost. Where the total cost of a contract, based on technical and other estimates is expected to exceed the corresponding contract value, such expected loss is provided for.

In case it is unreasonable to expect ultimate collection from sale of residential units, the revenue recognition is postponed to the extent of uncertainty involved.

For determining whether it is unreasonable to expect ultimate collection, the entities in the group considers the evidence of the buyer’s commitment to make the complete payment. Where the ability to assess the ultimate collection with reasonable certainty is lacking at the time of all significant risks and rewards of ownership are transferred to the buyer, revenue recognition is postponed to the extent of uncertainty involved.


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Sale of Coal

Revenue from the sale of coal is recognized when the substantial risks and rewards of ownership are transferred to the buyer as per the respective agreements and revenue can be reliably measured.

Insurance Claims

Insurance claims are recognized on acceptance / actual receipt of the claim.

Management Consultancy

Income from project management / technical consultancy is recognized as per the terms of the agreement on the basis of services rendered.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders’ right to receive payment is established by the balance sheet date.

iii. Tangible Fixed Assets

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment losses if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of tangible fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work in Progress.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

The group adjusts exchange differences arising on translation/settlement of long term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

Capital subsidy which is in the nature of grant relating to specific fixed asset is reduced from the gross value of the asset concerned. The grant is thus recognized in the profit and loss statement over the useful life of a depreciable asset by way of a reduced depreciation charge.

iv. Mining Assets

Deferred overburden

During the commercial production stage of open pit operations, production stripping costs comprises the accumulation of expenses incurred to enable access to the coal seam, and includes direct removal costs (inclusive of an allocation of overhead expenditure) and machinery and plant running costs.

Production stripping costs are capitalised as part of an asset, if it can be demonstrated that it is probable that future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of the ore body for which access has been approved. The asset is called Capitalised Overburden.

The capitalised overburden asset is amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied for amortisation.

Production stripping costs that do not satisfy the asset recognition criteria are expensed.

Exploration and evaluation

Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and amortisation of assets used in exploration and evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs where they are related directly to the operational activities in a particular area of interest. Where a decision is made to proceed with development in respect of a particular area of interest, the relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.

Mine Development

Development expenditure is recognised at cost less accumulated amortisation and any impairment losses. Where commercial production in an area of interest has commenced, the associated costs are amortised over the estimated economic life of the mine on a units of production basis.

Changes in factors such as estimates of proved and probable reserves that affect unit of production calculations are dealt with on a prospective basis.

v. Intangible Fixed Assets

Intangible fixed assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably.

Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognized as an intangible fixed asset when the entities in the group can demonstrate:

- The technical feasibility of completing the intangible fixed asset so that it will be available for use or sale;

- Its intention to complete the asset and use or sell it;

- its ability to use or sell the asset;

- how the asset will generate probable future economic benefits;


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- the availability of adequate resources to complete the development and to use or sell the asset; and

- The ability to measure reliably the expenditure attributable to the intangible fixed asset during development.

Any expenditure so capitalized is amortised over the period of expected future sales from the related project.

The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

Intangible assets under installation or under construction as at the Balance Sheet date are shown as Intangible assets under development.

vi. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

vii. Depreciation / Amortisation:

Tangible Fixed Assets:-

Depreciation is provided on Straight Line Method except in case of certain assets which are under Units of Production method, as per the provisions of schedule II of the Companies Act, 2013 or based on useful life estimated on the technical assessment which ever has a lower life.

Leasehold land is amortised over the period of the lease.

Leasehold improvements included in “furniture and fixtures”` are amortized over the period of lease or estimated useful life whichever is shorter.

Certain project related assets including temporary structures are depreciated over the respective estimated project periods. Depreciation on ‘Wooden Scaffoldings’

and ‘Metal Scaffoldings’ is providing considering the useful life of 1 year and 3 years respectively, which are grouped under plant and machinery.

In case of LTPL and LHPL, Pursuant to order Nos. 45/3/2011-CL-III & 45/5/2010-CL-III, from the Ministry of Corporate Affairs, Government of India, LTPL and LHPL are depreciating Hydraulic Works and Plant & Machinery at 2.57% and 2.71% per annum respectively.

In respect of additions / deletions to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use / up to the date of deletion.

Depreciation on adjustments to the historical cost of the assets on account of reinstatement of long term borrowings in foreign currency, if any, is provided prospectively over the residual useful life of the asset.

Intangible Fixed Assets:-

Toll Collection rights in respect of BOOT based road projects are amortised from the date of Commencement of Operations to till the end of concession period in the manner as specified in the schedule – II of the Companies Act, 2013.

Computer Software is amortized over an estimated useful life of 4 years. Briquetting Technology Asset is amortized over an estimated useful life of 20 years. Third party contribution for port is amortized over an estimated useful life of 3 - 4 years.

viii. Investments

Investments, those are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

ix. Inventories

Construction materials, raw materials, Consumables, Stores and Spares and Finished Goods are valued at lower of cost and net realizable value. Cost is determined on weighted average cost method.

Construction Work-in-progress related to project works is valued at lower of cost or net realizable value, where the outcome of the related project is estimated reliably. Cost includes cost of materials, cost of borrowings and other related overheads.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.


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In case of LHTPPL, Development Work-in-progress related to project works is valued at cost or estimated net realizable value whichever is lower, till such time the outcome of the related project is ascertained reliably and at contractual rates thereafter. Cost includes cost of land, cost of materials, cost of borrowings to the extent it relates to specific project and other related project overheads.

x. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds.

xi. Duty Drawback Claims

Claims for duty drawback are accounted for on accrual basis.

- Where there is reasonable assurance that the enterprise will comply with the conditions attached to them; and

- Where such benefits have been earned by the enterprise and it is reasonably certain that the ultimate collection will be made.

xii. Employee Benefits

Employee benefits are charged to the statement of Profit and Loss for the year and for the projects under construction stage are capitalised as other direct cost in the Capital Work in Progress / Intangible asset under development

i. Retirement benefits in the form of Provident Fund are a defined contribution scheme and the contributions are recognised, when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.

ii. Gratuity liability is defined benefit obligations and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iii. Retention bonus liability is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

iv. Compensated absences are provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year.

v. Actuarial gains/losses are immediately taken to statement of profit and loss and are not deferred

or giving the effect in other direct cost in the Capital Work in Progress / Intangible asset under development.

vi. The amount of Non-current and Current portions of employee benefits is classified as per the actuarial valuation at the end of each financial year.

xiii. Foreign Currency Transactions

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

Exchange Differences

Exchange differences arising on the settlement of monetary items, or on reporting such monetary items of group at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise.

Exchange difference arising on reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to acquisition / construction of a depreciable capital asset, are capitalized and depreciated over the balance life of the asset and in other cases are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” in the group’s financial statements and amortised over the balance period of such long term asset or liability but not beyond accounting period ending on or before March 31, 2020, by recognition as income or expense in each of such period foreign currency monetary items. For this purpose, the group treats a foreign monetary item as “long term foreign currency monetary item”, if it has a term of 12 months or more at the date of its origination.

Forward Exchange Contracts not intended for trading or speculation purposes

Forward exchange contracts or any other financial instruments that is in substance a forward exchange contract to hedge the foreign currency risks the premium or discount arising at the inception of the contract is


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amortised as expenses or income over the life of the contract. Exchange differences arising on such contracts are recognized in the period in which they arise.

Derivative Instruments

As per the ICAI Announcement, accounting for derivative contracts, other than those covered under (AS) - 11, Accounting for the Effects of Changes in Foreign Exchange Rates are marked to market on a portfolio basis, and the loss is charged to the statement of profit and loss. Gains are ignored.

Translation of Non Integral Foreign Operations

Financial statements of non-integral foreign operations are translated as under:

i) Assets and Liabilities both monetary and non-monetary are translated at the rate prevailing at the end of the year.

ii) Income and expense items are translated at exchange rates at the dates of the transactions

Exchange differences arising on translation of non integral foreign operations are accumulated in the foreign currency translation reserve until the disposal of such operations.

xiv. Leases

Operating Lease

As Lessee

Assets acquired on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are arrived on straight line basis and charged to the Statement of profit and loss on accrual basis.

As Lessor

Assets given on leases where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Lease rentals are recognised in the statement of profit and loss on accrual basis.

Finance Lease

Finance leases, which effectively transfer to the group substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognised as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs are capitalised.

If there is no reasonable certainty that the group will obtain the ownership by the end of the lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.

xv. Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xvi. Employee Stock Option Scheme

The group has formulated an Employees Stock Option Scheme to be administered through a Trust. The scheme provides that subject to continued employment with the company or the group, employees of the company and its subsidiaries are granted an option to acquire equity shares of the company that may be exercised within a specified period. The group follows the intrinsic value method for computing the compensation cost for all options granted which will be amortized over the vesting period.

xvii. Taxes on Income

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax laws. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the entities in the group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

In the situations where the Group is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the Group’s


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gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However, the Group restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first. Deferred tax liability originated in as at the period end and reversing after the tax holiday period, falling within the tenure of Power Purchase Agreement and to the extent expected to be recovered through future tariff, has been disclosed as recoverable from beneficiaries (Power Buyers).

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The entities in the group writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

xviii. Minimum Alternative Tax (MAT)

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the entities in the group will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The entities in the group reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that entities in the group will pay normal Income Tax during the specified period.

xix. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) The entities in group have a present obligation as a result of past event,

b) A probable outflow of resources is expected to settle the obligation; and

c) The amount of the obligation can be reliably estimated

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in case of

a) A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation;

b) A present obligation arising from past events, when no reliable estimate is possible;

c) A possible obligation arising from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company where the probability of outflow of resources is not remote.

Contingent assets are neither recognized, nor disclosed.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.


xx. Warranty provisions

Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is based on Industry / historical experience. The estimate of such warranty-related costs is revised annually.

xxi. Operations and Maintenance

Certain power related subsidiaries of the group had entered into Long Term Maintenance Agreement (LTMA) for maintenance of the main plant and Long Term Assured Parts Supply Agreement (LTAPSA) for supply of parts for planned and unplanned maintenance over the term of the agreement. Based on the obligation, amounts payable under the agreements are charged to Statement of profit and loss considering the actual Factored Fired Hours of the Gas Turbines during the year on the basis of average factored hour cost including Customs Duty applicable at the current prevailing rate. Periodical minimum payments are accounted as and when due based on contractual obligations.

xxii. Cash and Cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

xxiii. Measurement of EBITDA

As permitted by the Schedule III to the Companies Act, 2013, the group has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The group measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expense.


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3 Share Capital

(` Crores)As at

March 31, 2015As at

March 31, 2014Authorised 12,000 (March 31, 2014: 500) Crores Equity Shares of `1/- each 12,000.00 500.00 Issued, Subscribed and Paid Up 246.24 (March 31, 2014: 240.78) Crores Equity Shares of ` 1/- each, fully paid up 246.24 240.78 Less: Amount recoverable from LCL - Foundation (ESOP Trust) 1.15 1.54

245.09 239.24

3.1 Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

As at March 31, 2015 As at March 31, 2014Equity Shares of ` 1/- Each, Fully paid up No. Crores ` Crores No. Crores ` Crores At the beginning of the year 240.78 240.78 240.78 240.78 Issued during the year - Conversion 5.46 5.46 - - At the end of the year 246.24 246.24 240.78 240.78

*During the Year, 5.46 Crores Equity Shares of 1/- each were allotted to ICICI Bank Limited at a Price of 6.23/- per Equity Share (premium of ` 5.23/- per share), by conversion of ` 34 Crores Funded Interest Term Loan into Equity Share Capital of the Company.

3.2 Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of `1/- Per share. Each Holder of equity shares is entitled to one vote per share.

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

3.3 Shares held by holding company

As at March 31, 2015 As at March 31, 2014 No. Crores ` Crores No. Crores ` Crores

Equity Shares of ` 1/- each fully paid up held byLanco Group Limited, the holding company 135.37 135.37 135.37 135.37

3.4 Details of Shareholder holding more than 5% shares of the Company

As at March 31, 2015 As at March 31, 2014 No. Crores % Holding in

the Class No. Crores % Holding in the

Class Equity Shares of ` 1/- each held byLanco Group Limited, the holding company 135.37 54.98 135.37 56.22

The above information represents ownership of shares as per register of share holders/members.

3.5 Details of Shares Reserved for issue under Options

For details of shares reserved for issue under Employee Stock Options (ESOP) plan of the Company, (Refer Note 43)

During the previous year the Company’s proposal to restructure the debt has been approved by the Corporate Debt Restructuring Empowered Group (CDR EG) vide letter of approval dated December 20, 2013.The company executed Master Restructuring Agreement (MRA) on December 27, 2013. As a result of this the lenders of CDR have a right to convert restructured debt into equity shares at the sole discretion and on demand as per the agreed terms in the MRA.

In relation to the loans restructured by the CDR lenders a total amount to ` 2,894.41 Crores would qualify for the conversion of 473.29 Crores shares at the sole discretion and on demand of the CDR lenders.

In relation to the promoters contribution a total amount to ` 167.06 Crores would qualify for the conversion of 26.82 Crores shares at the sole discretion of the promoters.


134

4 Reserves and Surplus #

(` Crores)As at

March 31, 2015As at

March 31, 2014Capital Reserve*As at the commencement of the year 731.26 754.48 Add / (less): Additions / Utilisations during the year 23.50 (23.22)

754.76 731.26 Capital Redemption ReserveAs at the commencement of the year 16.77 16.77

16.77 16.77 Securities Premium AccountAs at the commencement of the year 1,895.51 1,852.72 Add : Received during the year 28.54 - Add : Premium on account of ESOPs exercised 4.20 42.79

1,928.25 1,895.51 Foreign Currency Monetary Item Translation Difference (Net)As at the Commencement of the year - - Add: Additions during the year (13.10) -

(13.10) - Share Option Outstanding AccountEmployee Stock Options (ESOP) Outstanding (net of ESOP Suspense) at the commencement of the year

19.34 55.43

Add: ESOP Costs recognised during the year 4.65 6.70 Less: Transfer to Security Premium on account of ESOPs exercised 4.20 42.79

19.79 19.34 General ReserveAs at the commencement of the year 117.10 117.10

117.10 117.10 Foreign Currency Translation ReserveAs at the commencement of the year 329.97 254.49 Add: Addition during the year 92.04 75.48

422.01 329.97 Surplus in the Statement of Profit and LossAs at the commencement of the year (1,891.65) 382.23 Add / Less:- Profit / ( Loss) for the year (2,036.74) (2,273.88)Less : Depreciation Transitional Adjustment (Refer Note 93) 10.05 - Net Surplus in the Statement of Profit and Loss (3,938.44) (1,891.65)

(692.86) 1,218.30

* On consolidation - after netting off goodwill on consolidation of ` 351.08 (March 2014: `353.10) Crores. Additions / (Utilisations) includes ` 23.50 (March 2014 : (23.22)) Crores on conversion of the opening values with year end forex rates.

# Reserves & Surplus before intra group elimination ` 779.97 (March 2014 : ` 2,719.46) Crores. (Refer Note 33).


135

5 Long Term Borrowings

(` Crores)

Non Current Current Maturities





Rupee Term Loans

Secured

From Banks 17,510.63 13,631.49 781.46 962.80

From Financial Institutions 9,232.54 8,714.60 634.00 661.37

Unsecured

From Financial Institutions 199.29 318.87 84.16 -

Foreign Currency Term Loans

Secured

From Banks 5,334.59 6,463.49 8.96 133.42

From Financial Institutions - 5.80 6.04 11.60

Deferred Payment Liabilities - Secured # 715.97 832.20 - -

Finance Lease Obligations - Secured - 1.74 2.86 32.77

Hypothecation Loans - Secured

From Banks - - - 3.82

From Others - - - 22.71

Loans and Advances from Related Parties (Refer Note 46)

Unsecured - Other Loans and Advances 152.00 152.00 - -

33,145.02 30,120.19 1,517.48 1,828.49

Amount disclosed under the head “Other Current Liabilities” (Note 11)

(1,517.48) (1,828.49)

Net Amount 33,145.02 30,120.19 - -

# Represents future consideration payable in respect of acquisition of step down subsidiaries GCM & CMM.

The Board of Directors of the Company in its meeting held on July 27, 2013 had accorded its approval for restructure of the debts of the Company under Corporate Debt Restructuring (CDR) Mechanism of the Reserve Bank of India. CDR Empowered Group ( CDR EG) in its meeting held on December 11, 2013 has approved the CDR scheme submitted by the Company and issued letter of approval on December 20, 2013. As on March 31, 2015 CDR related documents have been executed and creation of security stands completed.


136

A. Rupee Term Loan from Banks & Financial Institutions

(` Crores)

S. No. Subsidiary/Company Name

Amount of Loan

From Banks* From Financial Institutions*

1 Lanco Infratech Limited (LITL) - the Company 4,727.50 (2,852.46)

347.74 (383.16)

Security & Terms and Conditions

a) from banks

1. Term Loan of ` 666.45 Crores out of which `13.33 Crores is current (March 31, 2014 : ` 666.68 Crores, all Non-Current), WCTL- I of ` 998.01 Crores out of which `19.96 Crores is current (March 31, 2014 : ` 967.90 Crores, all Non-Current), WCTL- II of ` 556.56 Crores out of which 11.13 Crores is current (March 31,2014 : 553.46 Crores, all Non-Current), FITL of 532.16 Crores out of which 10.64 Crores is current (March 31, 2014 : ` 293.51 Crores, all Non-Current) as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015. Further Land admeasuring 924 acres (approx.) held by one of the step down subsidiary is offered as collateral security for ` 400.00 Crores of the Term Loan and / or shares of subsidiary held by another subsidiary are offered as collateral security for ` 216.68 Crores of the Term Loan.

2. Priority Loan of 1,678.17 Crores out of which 33.94 Crores is current (March 31, 2014 : 273.03 Crores, all Non-Current ) classified as long term borrowings as per the CDR package approved by CDR EG and MRA dated December 27, 2013. These loans are having priority charge on the Trust and Retention Account (TRA) of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date of April 1, 2013 and are repayable in 18 quarterly installments starting from June 30, 2015.

3. ` 40.76 Crores, Term Loan availed from Non-CDR lender, out of which 5.36 Crores is Current (March 31, 2014: 46.62 Crores, out of which 4.89 Crores is Current) is secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the project on first charge basis and is being repaid in 48 quarterly installments ending on September 30, 2023.

4. ` 255.39 Crores, Term Loan availed from Non-CDR lender, out of which 22.17 Crores is Current (March 31, 2014: 51.26 Crores, out of which ` 6.41 Crores is current) are secured by way of mortgage on the immovable assets pertaining to the solar power projects and hypothecation of movable assets both present & future of those projects on first charge basis and is being repaid in 55 & 57 structured quarterly installments ending on March 20, 2025 & March 31, 2026.

b) from financial institutions

1. ` 64.29 Crores, out of which `1.29 Crores is Current (March 31, 2014: ` 64.29 Crores, all Non-Current) is having charge on the TRA of the Company and first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. This loan is having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and is repayable in 30 structured quarterly installments starting from June 30, 2015.

2. ` 283.45 Crores, term Loan availed from Non-CDR lender, out of which ` 84.16 Crores is Current (March 31, 2014: ` 318.87 Crores, all Non-Current) is unsecured. However, collateral securities have been provided by way of pledge of shares of a subsidiary held by another subsidiary and also by pledge of shares of the Company held by one of the Promoters. Repayable in 8 quarterly installments starting from September 30, 2015.

The Company has not paid principal amount of ` 0.49 Crores and interest amount of ` 52.22 Crores as at March 31, 2015.

The Company availed loans from multiple lenders which carry interest rate as per the respective loan agreements with the respective banks which are linked to Bank Rate +/- spread as applicable.


137

(` Crores)


Amount of Loan


2 Lanco Amarkantak Power Limited (LAPL) 3,481.26 (2,629.77)

3,998.05 (3,350.59)


Secured Rupee Term Loans from Banks and Financial Institutions represent the loans taken for all units which are secured by way of pari-passu first charge on all immovable properties and movable assets, both present and future and by pledge of equity shares held by promoters to the extent of 77% in case of Unit I&II and 60% in case of Unit III&IV. Further, some of the loans are covered by personal guarantees of promoter directors of the LAPL. The term loans of Unit I&II are repayable ranging from 28 to 53 quarterly installments. The term loans of Unit III&IV are repayable in 48 quarterly installments in term of the facility agreement.

Pursuant to the terms of Unit I&II Common Loan Agreement(s), Senior Debt “B “ Lenders shall at any time after the Commercial Operation Date have the right to convert their respective portion of outstanding Senior Rupee Debt B Facility into fully paid up equity share value of `10/- each. The outstanding amount of Senior Rupee Debt B facility as on March 31, 2015 is ` 171.92 Crores.

Secured Rupee Term Loans include IDFC’s term loan of ` 565.00 Crores (`162.81 Crores outstanding as on March 31, 2015 and ` 445.99 Crores as on March 31, 2014) for Unit V&VI which is secured by second charge by way of hypothecation of all movable properties of Unit I&II which shall be subordinate to Sr. Rupee Debt A & Sr. Rupee Debt B lenders of Unit I & II in addition to pledge of 10.93 Crore equity shares of the LAPL .

IDBI Term Loan of `170.00 Crores (`150.00 Crores disbursed till March 31, 2015) to Unit II is secured by subservient charge on fixed & current assets of Unit I&II and personal guarantee of promoter director.The principal over due of `15.00 Crores as on March 31, 2015 and ` 30.00 Crores due for repayment in FY 2015-16 to LIC of India have been classified under Non-current Liabilities pending approval of Repayment Date Extension. The LAPL is confident of receiving the said approval.The LAPL availed loans from multiple lenders carrying interest rate(s) as per the loan agreements with the respective banks which are linked to Bank’s Base Rate/BPLR+ weighted average spread of 2.96%.

The LAPL has not paid principal amount of ` 39.88 Crores and Interest amount of `261.04 Crores as at March 31, 2015.

3 Lanco Tanjore Power Company Limited (LTPCL) 9.68 (29.22)

-


Indian Rupee loan from banks carries interest at base rate -2.06% [ Weighted average spread ]. The Rupee Term Loans are repayable in 40 quarterly instalments of `4.90 Crores each along with interest, from the date of loan, viz July 2005. The loan is secured by way of First Charge on pari passu basis on all the immovable properties of the LTPCL, both present and future situated at Karuppur village, near Kuttalam in Thiruvidaimaruthur Taluk, Tanjore district, Tamil Nadu and by way of hypothecation of all the movable properties of the LTPCL including its movable plant and machinery ,spares, tools, accessories and other movables, both present and future including book debts and future secured by personal guarantees of certain Promoters of the LTPCL.

4 Lanco Kondapalli Power Limited (LKPL) 2,119.55 (1,695.74)

979.63 (908.48)


Indian Rupee Term Loans from Banks and Financial Institutions for Phase-II carries floating interest rates ranging from BPLR-1.25% to BPLR-2.25% and Base Rate +2.00% to Base Rate +4.00% (March 31, 2014: BPLR-2.25% to BPLR-3.75% and Base Rate +2.25% to Base Rate +3.25%). The loans are repayable in 48 equal quarterly instalments commencing after 6 months from project completion date. The LKPL has requested to the Project Lenders for the total existing facility to be repaid in 52 structured quarterly installments commencing from March 31, 2018 and end on December 31, 2030. The proposal has been approved in the consortium meeting held on February 12, 2015. As on the reporting date the LKPL has received 6 out of 10 approvals from the Banks/Financial Institutions. Pending the balance approvals from the 4 lenders, the LKPL has classified the current maturities of term loans as non-current liabilities. Indian Rupee Term Loans from Banks and Financial Institutions for Phase-III carries floating interest rates ranging from Base Rate +3.00% to Base Rate +3.55%. (March 31, 2014: Base Rate +2.75% to Base Rate +3.69% and BPLR -1.00%). The loans are repayable in 48 structured quarterly instalments commencing after 24 months from Scheduled Commercial Operations Date (SCOD). The LKPL is in the process of rescheduling term loan from Life Insurance Corporation of India (LIC), pending the same the principal repayment for the next 12 months to LIC has been classified as Current maturities of long term borrowings.


138

(` Crores)


Amount of Loan


Term Loans availed from Banks and Financial Institutions for Phase-II and Phase-III are secured by a pari passu first charge on all immovable properties of the LKPL both present and future, all the tangible moveable properties, including movable plant and machinery, machinery spares, equipments, tools and accessories both present and future relating to Phase-I, Phase-II and Phase-III projects, assignment by way of pari passu first charge on all the rights, title and interests to all the Receivables, commissions, revenues of whatsoever nature and whatever arising, intangibles, goodwill, uncalled capital, the accounts and book debts, both present and future, the rights, title and interest under the Project Documents duly acknowledged and consented to by the relevant counter parties to such Project Documents all as amended, varied or supplemented from time to time, all the rights, title, interest, benefits, claims and demands whatsoever in the Government approvals and clearances, all the rights, title interest, benefits, claims and demands of the borrower in any letter of credit, guarantee, performance bonds indemnities and securities that may be furnished by the various counter parties under such Project documents, all insurance contracts and insurance proceeds, the rights, title and interest on the Letter of Credit, if any / Escrow account, Retention Accounts including Debt Service accounts (2 quarters), other reserves and any other bank accounts of the Borrower wherever maintained subject to working capital loan, if any, floating charge on all other assets, present and future, of the Borrower including but not limited to goodwill and general undertaking of the Borrower in favour of the Lenders; Pledge of the shares held by Sponsors and Shareholder(s) representing 51% of the issued and paid up share capital of the Borrower. All the aforesaid mortgages, charges, assignments and pledges shall in all respects of Phase-II and Phase-III lenders along with Working Capital lenders.

Phase-II & III Term Loans are further secured by way of an unconditional and irrevocable corporate guarantee of the LTPL & the Company subject to approval from CDR EG and Personal Guarantees of Promoter Directors.

The LKPL has not paid principal amount of ` 49.27 Crores and Interest amount of `116.12 Crores as at March 31, 2015.

5 Lanco Anpara Power Limited (LAnPL) 1,456.42 (1,538.20)

2,196.46 (2,279.57)


The LAnPL availed loans from multiple lenders carrying interest rate as per loan agreements with the respective banks which are linked to the Bank’s Base Rate + weighted average spread of 3.60%. The repayment of Rupee term loan has been restructured by the consortium of lenders from 64 (Sixty four) equal quarterly instalments to 60 (Sixty) quarterly structured unequal instalments along with interest from June 30, 2012. The same has been done to match the cash flows according to the LAnPL. The above loan is secured as follows :1. A first mortgage / hypothecation and charge on all the immovable and movable properties (including all receivables, tangible and

intangible properties) of the project both present and future.2. A first charge / assignment/ security interest on rights, titles and interests of the LAnPL in respect of all assets of the project.3. A first charge/assignment/security interest on rights, titles and interests of the LAnPL in all project documents/ contracts/ licenses

including insurance contracts pertaining to the project.4. A first charge/assignment / security interest of contractor guarantee, performance bonds and any letter of credit that may be

provided by any party under the project.5. A first charge /assignment/security interest on the irrevocable, no lien Trust and Retention Accounts (TRA) into which all cash

inflows from the project.6. Pledge of 61% of the fully paid up share capital of the project (Phase-I), as appraised by the Lenders, as collateral security. 7. The LAnPL has not paid principal amount of `100.13 Crores and interest amount of `154.74 Crores as at March 31, 2015.

6 Udupi Power Corporation Limited (UPCL) 2,033.79 (2,316.22)

1,655.02 (1,841.13)


Pursuant to Common Loan Agreement dated October 17, 2006 in respect of Senior Rupee Debt B between UPCL and its Lenders, each of the Senior rupee Debt B Lenders shall at any time after the COD, have the right to convert at their sole option the whole of the outstanding amount or any part of their respective portion of the Senior Rupee Debt B Facility into fully paid-up equity shares of the Borrower at par. The Sr. Rupee Debt A & Sr. Rupee Debt B loans from the Financial Institutions and Banks are secured by first/second ranking pari-passu Security interest created by UPCL as below: (i) mortgage and charge on the UPCL immovable properties present and future; (ii) hypothecation of UPCL movable properties and assets present and future including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures and vehicles; (iii) charge on UPCL operating cash flows, book debts and all the receivables and revenues from the project, all current assets, commissions and any other revenues of what so ever nature and wherever arising, present and future; (iv) charge of all intangible assets including but not limited to goodwill and uncalled capital, present and future; (v) assignment of/charge on (a) all right, title, interest, benefits, claims and demands what so ever in the project documents, all as amended, varied or supplemented from time to time; (b) all the rights, title, interest, benefits, claims and demands


139

(` Crores)


Amount of Loan


what so ever in the clearances and uncalled capital; (c) all the right, title interest benefits, claims and demands what so ever of UPCL in any letter of credit, guarantee, performance bond provided by any party to the project documents;(d) all insurance contracts/insurance proceeds; (vi) charge on the letter of credit, escrow accounts, trust accounts and other reserves and any other bank account wherever maintained. The above Loans are also secured by a Corporate Guarantee from the UPCL. The Loans under Sr Debt B are also guaranteed by three of the persons of Promoter Group Company.

Rupee Loan from IDFC is Secured by i) Subservient Charges to Sr. Debt A, Sr. Debt B, Revenue Gap Funding & Working Capital Lenders on project assets (Movable & Immovable) including but not limited to current assets, receivables, cash flows etc; ii) Pledge of LAPL shares ; iii) Pledge of Company’s SharesThe UPCL has not paid Interest amount of `6.66 Crores as at March 31, 2015.

7 Lanco Thermal Power Limited (LTPL) 85.00(85.00)

-


(a) Indian Rupee Loan from Axis Bank of `85.00 Crores out of which 70% of the said loan is repayable in 62 balancing quarterly instalments along with interest (at the rate of 12.15%), from June 30, 2015 upto September 30, 2030. The balance 30% of the debt to be paid in a single installment on September 30, 2030, Further the loan has been guaranteed by the corporate guarantee of Lanco Power Limited. The loan is secured by hypothecation / Pledge / Mortgage / First Charge etc. on (i) First Charge on all immovable and movable assets of the Project.(ii) A First Charge on all book debts, operating cash flows, revenue and escrow of receivables of the project, present & future.(iii) a first charge on all intangible assets of the project including but not limited to goodwill, uncalled capital present & future.(iv) a first charge by way of assignments or creation of security interest of all the rights, title, interest, benefits, claims and demands whatsoever of the LTPL in project documents.(v) All the rights, title, interest, benefits, claims and demands whatsoever of the project in the permits, approvals and clearances pertaining to the project. (vi) All the rights, title, interest, benefits, claims and demands whatsoever of the project in letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party.(vii) All insurance contracts / insurance proceeds related to the project.(viii) First charge on the trust & retention account, debt service reserve account and other reserves and any other bank accounts of the project wherever mentioned. (b) The LTPL has not paid interest amount of ` 0.88 Crore as at March 31, 2015.

8 Lanco Hydro Power Limited (LHPL) 33.60 (38.00)

-


(a) Indian Rupee Loan from Axis Banks of `38.00 Crores, the said loan is repayable in 60 balooning quarterly instalments along with interest (at the rate of 12.15%) from June 30, 2014 upto March 31, 2029. The loan is secured by hypothecation / Pledge / Mortgage / First Charge etc. on (i) First Charge on all immovable and movable assets of the Project. (ii) First Charge on all book debts, operating cash flows, revenue and escrow of receivabls of the project, present & future.(iii) First charge on all intangible assets of the project including but not limited to goodwill, uncalled capital present & future.(iv) First charge by way of assignments or creation of security interest of all the rights, title, interest, benefits, claims and demands whatsoever of the LHPL in project documents. (v) All the rights, title, interest, benefits, claims and demands whatsoever of the project in the permits, approvals and clearances pertaining to the project.(vi) All the rights, title, interest, benefits, claims and demands whatsoever of the project in letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party.(vii) All insurance contracts / insurance proceeds related to the project.(viii) First charge on the trust & retention account, debt service reserve account and other reserves and any other bank accounts of the project wherever mentioned. (b) The LHPL has not paid principal amounting ` 0.38 Crores and Interest amount of ` 0.24 Crores as at March 31, 2015.

9 Lanco Mandakini Hydro Energies Private Limited (LMHEPL) 521.16 (456.18)

-


The sanctioned loan of ` 521.16 Crores as a part of costover run is repayable in 48 quarterly instalments along with interest, from December 2017 (including moratarium of 15 months). The loan is secured by Pledge / First pari passu Charge of all movable & immovable assets. The Loan is secured by pledge of the 76% of paid up Equity Share Capital of the LMHEPL, the total shares pledged as on March 31, 2015 is equivalent to 59.79%. The LMHEPL availed loans from multiple lenders which carry interest rate as per the respective loan agreements with the respective banks which are linked to Base Rate +/- spread as applicable. The LMHEPL has not paid the Interest amount of ` 13.37 Crores as at March 31, 2015.

10 Lanco Budhil Hydro Power Private Limited (LBHPPL) Nil (282.39)

Nil (102.73)


During the Year the entity got sold.


140

(` Crores)


Amount of Loan


11 Lanco Teesta Hydro Power Limited (LTHPL) 1,246.12 (1,091.63)

973.09 (829.18)


Indian Rupee Term Loan from Consortium of Lenders ( Six Banks & Three Financial Institutions) have the sanctioned loan of ` 2,400.00 Crores, repayable in 56 quarterly instalments, from August 2013. As per Rupee Facility Agreement, the instalments are due after 15 months of Scheduled Commercial Operation Date (COD), May 2012 i.e. from August 2013, repayable @ 1.50% of the disbursed amount in first eight quarterly instalments, at 1.625% of the disbursed amount in next eight quarterly instalments and the balance at 1.875% of disbursed amount in next forty quarterly instalments. Approval from all the lenders has been received, towards the extension of Scheduled COD, from May 2012 to May 2016, so their repayment instalments have been rescheduled and are not included in Current Maturities. In respect of approval towards cost overun of ` 1,800.00 Crores, all the lenders except REC and IIFCL has given their consent as on March 31, 2015. The Management is confident of obtaining approvals from REC and IIFCL during the current year.The loan is secured by First Charge on all movable/immovable assets of the LTHPL.

Loans from banks and financial institutions are secured / to be secured by first ranking charge/ mortgage /hypothecation on the following:

a) Immovable Properties (incl. 43.8551 Ha of Land) and movable properties including plant and machinery, machine spares, tools and accessories, furniture, fixtures, vehicle and other movable assets, both present and future;

b) All the Borrower’s tangible and intangible assets, including but not limited to its goodwill, undertaking and uncalled capital, both present and future;

c) Assignment of all insurance policies, including but not limited to the Insurance Contracts, performance bonds, contractors’ guarantees and any letter of credit provided by any person under the Project Documents;

d) Assignment of all of the Borrower’s rights, title and interest under each of the Project Documents and Contracts, all the Borrower’s rights under each letter of credit/guarantee or performance bond that may be posted by any party to a Project Documents for the Borrower’s benefit and all the Borrower’s rights under the Clearances (to the extent assignable under Applicable Law);

e) All the book debts, operating cash flows, receivables, all other current assets, commission, revenues of the Borrower, both present and future; and

f) All the Accounts and all other bank accounts of the Borrower (except the Distribution Account on which a floating charge shall be created which shall get converted to a fixed charge on the happening of an Event of Default);

g) Further the loan is secured by pledge of 30% of Paid up Equity Share capital of the LTHPL.The LTHPL availed loans from multiple lenders which carry interest rate as per the respective loan agreements with the respective banks which are linked to Bank Rate +/- spread as applicable.The LTHPL has not paid interest amount of ` 49.57 Crores as on March 31, 2015.

12 Lanco Hills Technology Parks Private Limited (LHTPPL) 748.10 (764.7)

-


(a ) Indian Rupee Loan from Banks (Phase I) carries floating interest rates ranging from BPLR (-1% to 2%) and base rate +(4.25% to 5.25%) (March 31, 2014 : BPLR (-1% to 2%) and base rate +(4.00% to 5.25%)) is repayable in 4 yearly instalments of ` 93.75 Crores each ,of which Punjab National Bank is on quarterly instalments of ` 3.75 Crores per quarter, from December 31, 2010. The loan is secured as first charge, ranking paripassu, by way of hypothecation of all receivables and movable assets, including plant, machinery equipment, machinery spares, tools,stores,furniture, fixtures, vehicles and other moveable assets, both present and future, and mortgage of 22.45 acres of Phase I land together with building superstructures, amenities, infrastructure and other immovable assets present and future to be constructed/ developed thereon, of the LHTPPL. Further part of the loan has been guaranteed by corporate guarantee of the Company. LHTPPL repaid the entire Indian Rupee Loan of Phase I and is in the process of getting the mortgage released from banks.

(b) Indian Rupee Loan from Banks (Phase II) carries floating interest rates from BPLR (-1%) and base rate+ (4.25% to 5.75%) (March 31, 2014 : BPLR (-1% to 1%) and base rate + (4.00% to 5.75%)) is repayable in 10 half-yearly instalments of 75 Crores each, from June 30, 2019 . The loan is Secured as first charge, ranking paripassu, by way of hypothecation of all receivables and movable assets including movable, plant, machinery, spares, tools, stores and accessories, furniture and fixtures, vehicles and building and other immovable assets both present and future of the Phase II of the project in 60.84 acres of land by way of equitable mortgage in Manikonda village with the development rights of LHTPPL. Further part of the loan is secured by way of a third party guarantee by way of an equitable mortgage of land admeasuring 26.39 acres at Siruseri village, Tamilnadu State as colletaral security pertaining to Lanco Horizon Pvt Ltd. Further part of the loan is secured by pledge of M/s. Lanco Hydro Power Ltd. shares held by M/s. Lanco Power Ltd. Further part of the loan has been guaranteed by corporate guarantee of the Company.

(c) The LHTPPL has not paid interest amount of ` 29.62 Crores as at March 31, 2015.


141

(` Crores)


Amount of Loan


13 Diwakar Solar Projects Limited (DSPL) 346.08 (301.17)

-


(a ) Indian Rupee Term Loan from Axis Bank carries interest at Base Rate Plus 3.75%. 80% of the loan is repayable in 48 quarterly unequal installments with a moratorium period of 12 months from the date of COD and balance 20% shall be paid in single installment The loan is secured by a way of pledge of 51% of total equity shares of DSPL held by the Company, Corporate Guarantee of the Company and by way of rank pari passu charge of project on all mortgages, charges, assignments and pledges as per the standard security package and is identified by and between consortium members and LC/Escrow accounts, including inter-alia: First charge by way of mortgage on immovable properties, present & future of DSPL. First charge by way of hypothecation on all movables including movable plant and machinery, machinery spaces, tools and accessories, furniture, fixtures, vehicles, present & future, of DSPL. First charge on all book debts, operating cash flows, recievables,commissions,revenues of whatsoever nature and wherever arising, of DSPL present & future, of the DSPL. A first charge on all intangible assets, if any, of the DSPL including but not limited to goodwill , uncalled capital, present & future.

(b) The DSPL has not paid interest amount of ` 4.09 Crores as at March 31, 2015.

14 Khaya Solar Projects Private Limited (KSPPL) 48.65 (50.69)

-


Indian Rupee Term Loan from AXIS Bank carries interest at Base Rate Plus 3.25%. The loan is repayable in 56 quarterly structured instalments with a moratorium period of 6 months from the Commercial Operation Date (COD). The repayment started from September 30, 2012. The loan is secured by way of pledge of shares of KSPPL held by the Lanco Solar Energy Private Limited, Corporate Guarantee of the Company and are secured by way of first charge by way of hypothecation of KSPPL movable assets, book debts, Intangible Assets, Letter of Credit /Escrow Account.

The KSPPL has not paid principal and interest amount of `0.52 Crores and ` 0.55 Crores respectively as at March 31, 2015.

15 Lanco Solar Private Limited (LSPL) 594.93 (262.92)

-


LSPL availed loans from multiple lenders carrying interest rate(s) as per the loan agreements with the respective banks which are linked to Bank’s Base Rate + weighted average spread of 4.50 %. The loan is repayable in 36 structured quarterly instalments along with interest, commencing from 12 month from the date of COD, repayment will start from December 31,2017. The loan is secured by way of pledge of shares of LSPL held by Lanco Solar Energy Private Limited , Corporate Guarantee of the Company and are secured by way of Hypothecation / Pledge / Mortgage / First Charge etc. of immovable properties both present and future, tangible movable properties including movable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles, equipment, and all other movable fixed assets, both present and future, all the rights, title and interests of the Borrower in and to all the receivables, accounts, other bank accounts, retention accounts, book debts, operating cash flows, commissions, other revenues of whatsoever nature and wherever arising, and all intangible assets including but not limited to goodwill, uncalled capital, both present and future of the LSPL pertaining to Poly-silicon, Wafer and Module manufacturing plant with capacity of 1800 TPA, 100 MW and 75 MW respectively at Villages Mehrumkhurd and Chhawardal, Tehsil Rajnandgaon, District Rajnandgaon in the state of Chhattisgarh.

The LSPL has not paid interest of `15.65 Crores as at March 31, 2015.

16 Omega Solar Projects Private Limited (OSPPL) 40.46 (Nil)

-


Indian Rupee Term Loan from Lakshmi Villas Bank and state Bank of India carries interest at Base Rate Plus 2.25%. The loan is repayable in 168 Monthly instalments from October 31, 2015. The loan is secured by way of pledge of shares of the OSPPL held by the Lanco Solar Energy Private Limited and Ursa Solar Projects Private Limited and are secured by way of paripassu first charge on the entire fixed assets of the OSPPL including equitably mortgaged of Lease hold rights of the project site.


142

(` Crores)


Amount of Loan


17 Udupi Power Corporation Limited (UPCL) Nil (200.00)

-


In case of UPCL, a loan of ` 200 Crores has been availed from banks as Mezzanine Debt for which the collateral security is given by the Company by way of corporate guarantee and pledge of 0.13 Crores (` 10 each) shares of the Company held by the promoters. None of the assets of UPCL is given as security for the said loan. During the year loan was repaid.

18 Lanco Devihalli Highways Limited (LDHL) 331.27 (Nil)

-

Security & Terms and ConditionsLoans are taken from Banks under common loan agreement dated January 30, 2008 and are secured by way of pari-passu first charge on all the assets, including both immovable (tangible and intangible) and movable assets of the LDHL, both present and future excluding Project assets as defined in Concession Agreement and pledge of equity shares held by the company aggregating to 51% paid-up and voting equity share capital of LDHL.Terms of Repayment Bank Loans:- During the year 2014-15 the term loans taken from banks were restructured and as per the revised terms, Loans are repayable in 59 unequal quarterly instalments beginning from June 30, 2014 to December 31, 2029 ranging from `0.06 Crores to `3.21 Crores per quarter.

Availed a loan of `90.00 Crores from ICICI Bank, the loan repayable in 44 unequal quarterly instalments beginning from June 30, 2013 to March 31, 2023 ranging from `0.56 Crores to ` 2.81 Cores per quarter. The Loan is secured by way of second charge by hypothecation of all tangible and intangible, movable assets (both present and future) of the LDHL. Charges yet to be created with the office of the Registrar of the Companies. NOC from Senior Lenders and NHAI is yet to be obtained for creation of charge.

The LDHL availed loans from multiple lenders which carry interest rate as per the respective loan agreements with the respective banks which are linked to Bank Rate +/- spread as applicable. The LDHL has not paid an amount of `3.60 Crores towards interest and `0.11 Crores towards principal instalment to the Banks as at March 31, 2015

19 Lanco Hoskote Highway Limited (LHHL) 468.52 (Nil)

-

Security & Terms and ConditionsLoans are taken from Banks under common loan agreement dated January 30, 2008 and are secured by way of pari-passu first charge on all the assets, including both immovable (tangible and intangible) and movable assets of the LHHL, both present and future excluding Project assets as defined in Concession Agreement and pledge of equity shares held by the Company aggregating to 51% paid-up and voting equity share capital of LHHL.Terms of Repayment Bank Loans:- During the year 2012-13 the term loans taken from banks were restructured and as per the revised terms, Loans are repayable in 52 unequal quarterly instalments beginning from June 30, 2013 to March 31, 2025 ranging from `0.11 Crores to `12.49 Crores per quarter.

During the year 2013 -14 the LHHL availed a loan of `125 Crores from ICICI Bank, the loan repayable in 84 unequal monthly instalments beginning from April 30, 2018 to March 31, 2025 ranging from `0.63 Crores to ` 2.29 Crores per month. The Loan is secured by way of second charge by hypothecation of all tangible and intangible, movable assets (both present and future) of the LHHL.

The LHHL availed loans from multiple lenders which carry interest rate as per the respective loan agreements with the respective banks which are linked to Bank Rate +/- spread as applicable. The LHHL has not paid an amount of `10.21 Crores towards interest and `0.89 Crores towards principal instalment to the Banks as at March 31, 2015.Total 18,292.09

(14,594.29)10,149.99 (9,694.84)

* Previous Year figures are mentioned within the brackets

B. Foreign Currency Loan from Banks and Financial Institutions #

(` Crores)

S. No. Subsidiary / Company Name

Amount of Loan


1 Lanco Infratech Limited (LITL) - the Company 416.52 (525.74)

-



143

(` Crores)


Amount of Loan


1. Foreign Currency Term Loans (Buyers Credit) from banks out of ` NIL (March 31, 2014: ` 223.40 Crores, all Non-Current) were secured by way of mortgage on immovable assets pertaining to solar projects and hypothecation of movable assets both present and future of the solar project and NIL (March 31, 2014: 2.47 Crores, all Non-Current) were having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge along with pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.

2. FCNR Loan from banks of ` 416.52 Crores out of which ` 8.33 Crores is current (March 31,2014 : `299.87 Crores, all Non-Current) is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates. These loans are having moratorium period of 2 years from the cutoff date i.e. April 1, 2013 and are repayable in 30 quarterly installments starting from June 30, 2015.

2 Lanco Amarkantak Power Limited (LAPL) 217.65 (1,347.46)

-

Security & Terms and ConditionsForeign Currency Buyer’s Credit Loans outstanding to the tune of ` 217.65 Crores ($ 34.77 Millions) as on March 31, 2015, is secured by Letters of Under Taking(LUT) issued by LC Issuing Banks in favour of Overseas Lenders against Letters of Comfort (LOCs) issued by other Lenders of the consortium in favour of LC Issuing Banks.

3 Lanco Kondapalli Power Limited (LKPL) Nil (202.78)

-

Security & Terms and ConditionsBuyers credit from Banks for Phase III are secured by a pari passu first charge on all immovable properties of the LKPL both present and future, all the tangible moveable properties, including moveable plant and machinery, machinery spares, equipments, tools and accessories both present and future relating to Phase - I, Phase - II and Phase - III projects, assignment by way of pari passu first charge on all the rights, title and interests to all the receivables, commissions, revenues of whatsoever nature and whatever arising, intangibles, goodwill, uncalled capital, the accounts and book debts, both present and future, the rights, title and interest under the Project Documents duly acknowledged and consented to by the relevant counter parties to such Project Documents all as amended, varied or supplemented from time to time, all the rights, title, interest, benefits, claims and demands whatsoever in the Government approvals and clearances, all the rights, title interest, benefits, claims and demands of the borrower in any letter of credit, guarantee, performance bonds indemnities and securities that may be furnished by the various counter parties under such Project documents, all insurance contracts and insurance proceeds, the rights, title and interest on the Letter of Credit, if any / Escrow account, Retention Accounts including Debt Service accounts (2 quarters), other reserves and any other bank accounts of the Borrower wherever maintained subject to working capital loan, if any, floating charge on all other assets, present and future, of the Borrower including but not limited to goodwill and general undertaking of the Borrower in favour of the Lenders; Pledge of the shares held by Sponsors and Shareholder(s) representing 51% of the issued and paid up share capital of the Borrower. All the aforesaid mortgages, charges, assignments and pledges shall in all respects of Phase II and Phase III lenders along with Working Capital lenders.


6.04 (17.40)

Security & Terms and ConditionsForeign currency loan from bank carries interest at 6 months LIBOR + 3.50%. The Foreign Currency Loan from Bank is repayable in 40 quarterly instalments of approximately `0.30 Crores ( equivalent to $ 0.005 Crores ) each along with interest, from the date of loan, viz July 2005. The loan is secured by way of First Charge on pari passu basis on all the immovable properties of the LTPCL, both present and future situated at Karuppur village, near Kuttalam in Thiruvidaimaruthur Taluk, Tanjore district, Tamil Nadu and by way of hypothecation of all the movable properties of the LTPCL including its movable plant and machinery, spares, tools, accessories and other movables, both present and future including book debts and future secured by personal guarantees of certain Promoters of the LTPCL. Foreign currency loan from Financial institution carries interest at 9.5% [Fixed Rate ]. The Foreign Currency Loan from Financial Institution is repayable in 40 quarterly instalments of approximately 2.90 Crores ( equivalent to $ 0.048 Crores ) each along with interest, from the date of loan, viz July 2005. The loan is secured by way of First Charge on pari passu basis on all the immovable properties of the LTPCL, both present and future situated at Karuppur village, near Kuttalam in Thiruvidaimaruthur Taluk, Tanjore district, Tamil Nadu and by way of hypothecation of all the movable properties of the LTPCL including its movable plant and machinery, spares, tools, accessories and other movables, both present and future including book debts and future secured by personal guarantees of certain Promoters of the LTPCL.

5 Lanco Hills Technology Park Private Limited (LHTPPL) Nil (132.22)

-



144

(` Crores)


Amount of Loan


Foreign Currency Loan from Banks carries interest at 9.3875%. The loan is repayable in 5 Half- yearly instalments of different amounts of USD 22 Million, USD 19.25 Million ,USD 19.25 Million , USD 27.50 Million and USD 22 Million, from March 29, 2012. The loan is secured by pledge of shares of the Company held by M/s. Lanco Group Limited. Further, the balance outstanding as on balance sheet date has been guaranteed by corporate guarantee of M/s. Lanco Hydro Power Limited. LHTPPL repaid the entire Foreign Currency Loan and is in the process of obtaining release of pledge of shares of the Company held by M/s.Lanco Group Limited and release of Corporate Guarantee of M/s.Lanco Hydro Power Limited.

6 Lanco Solar Private Limited (LSPL) 100.59 (318.71)

-

Security & Terms and Conditions(i)Buyers Credit availed by LSPL is Part of total Rupee Term Loan Sanctioned by the Banks and the loan is secured by way of pledge of shares of the LSPL held by the LSEPL, Corporate Guarantee of the Company and are secured by way of Hypothecation / Pledge / Mortgage / First Charge etc. of immovable properties both present and future, tangible moveable properties including moveable plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles, equipment, and all other movable fixed assets, both present and future, all the rights, title and interests of the Borrower in and to all the receivables, accounts, other bank accounts, retention accounts, book debts, operating cash-flows, commissions, other revenues of whatsoever nature and wherever arising, and (ii) all intangible assets including but not limited to goodwill, uncalled capital, both present and future of LSPL pertaining to poly-silicon and wafer manufacturing plant with capacity of 1800 TPA and 100 MW respectively at Villages Mehrumkhurd and Chhawardal, Tehsil Rajnandgaon, District Rajnandgaon in the state of Chhattisgarh.

7 Lanco Resource International Pte Limited (LRIPL) 4608.16 (2,807.45)

-

Security & Terms and ConditionsLoan is secured by pledge of equity shares and charge over all present and future assets of LRIPL and its subsidiaries. The obligations are further supported by an irrevocable and unconditional, joint and several guarantee from the LRIPL and its subsidiaries as the case may be and Corporate Guarantee directly or indirectly from the company. The security shall be shared on Pari -passu basis with the lenders of existing acquisition facility and other SBLC issuers.

8 Lanco Resource Australia Pty Limited (LRAPL) Nil (1,260.75)

-

Security & Terms and ConditionsRefer note 7 of Long - term Foreign Currency Loan from Banks and Financial Institutions above.Total 5,343.55

(6,596.91)6.04

(17.40)C. Deferred Payment Liability 715.97

(832.20)-

Security & Terms and ConditionsRefer Note 7 and 8 of Long - Term Foreign Currency Loans from Banks and Financial Institutions above.

D. Finance Lease Obligation - 2.86 (34.51)

Security & Terms and ConditionsSecured by the Plant and Machinery taken under Finance Lease Agreement.

E. Hypothecation Loans Nil (3.82)

Nil (22.71)

Security & Terms and ConditionsSecured by hypothecation of specific construction equipment/ vehicles acquired out of such loans. These loans are repayable on agreed monthly installments.

F. Unsecured Loans Nil (Nil)

283.45 (318.87)

Security & Terms and Conditionsa) During the year unsecured loan converted as secured loan as per the CDR Terms. b) Term Loan availed from Non-CDR lender, out of which ` 84.16 Crores is Current (March 31, 2014: ` 318.87 Crores, all Non-Current) is

unsecured. However, collateral securities have been provided by way of pledge of shares of a subsidiary held by another subsidiary and also by pledge of shares of the Company held by one of the Promoters. Repayable in 8 quarterly instalments starting from September 30, 2015.

G Other Loans & Advances 152.00 (152.00)

-

Security & Terms and ConditionsOther Loans and Advances is the Unsecured loan of `152.00 (March 31, 2014 : ` 152.00) Crores payable only after approval of CDR lenders received from promoter company as promoter’s contribution as per term and conditions of CDR package with conversion option into equity repayable at the end of 10 years after approval of the CDR lenders.


145

(` Crores)


Amount of Loan


# In the Company and at each SPV there are many loans and many lenders. The Carrying interest rate is as per the respective loan agreements entered at Company / SPV level which is linked to each of the Lender’s Bank Rate / LIBOR +/- Spread as applicable.

* Previous Year figures are mentioned within the brackets

6.1 Deferred Tax Liability (net)

(` Crores)



Deferred Tax Liability

Differences in Written Down Value in Block of Fixed Assets as per Tax & Financial Books 1,158.05 1,012.49

Recoverable from beneficiaries * (397.44) (354.78)

Gross Deferred Tax Liability 760.61 657.71

Deferred Tax Asset

Provision for Employee Benefits 2.51 4.26

Unabsorbed Depreciation-Carry forward losses as per Income Tax Act 1961 375.19 191.03

Provision for Other Disallowances 1.79 1.79

Gross Deferred Tax Asset 379.49 197.08

Deferred Tax Liability (net) 381.12 460.63

* In case of UPCL, Deferred tax liability originated in as at the period end and reversing after the tax holiday period, falling within the tenure of power purchase Agreement and to the extent expected to be recovered through future tariff, has been disclosed as recoverable from beneficiaries (Power Buyers).

6.2 Deferred Tax Asset (net)

(` Crores)As at

March 31, 2015As at

March 31, 2014Deferred Tax Liability Differences in Written Down Value in Block of Fixed Assets as per Tax & Financial Books 74.82 74.86 Gross Deferred Tax Liability 74.82 74.86 Deferred Tax Asset Provision for Employee Benefits 25.13 23.68 Provision for Doubtful Debts 4.90 4.90 Provision for Lease Equalisation Reserve - 1.80 Carry Forward Losses as per the Income Tax Act 1961 64.76 64.71 Provision for Other Disallowances 76.95 21.68 Gross Deferred Tax Asset 171.74 116.77 Deferred Tax Asset (net) 96.92 41.91

7 Other Long Term Liabilities

(` Crores)



Trade Payables (including acceptances) 366.70 222.30

Others Advances from Customers 2,362.11 2,719.77

Other Liabilities 257.71 128.72

2,986.52 3,070.79


146

8 Provisions

(` Crores)Long Term Short Term





Provision for Leave Encashment 30.06 28.40 16.45 13.08 Provision for Gratuity 16.54 13.56 5.72 4.09 Provision for Bonus 0.61 0.41 2.83 6.37 Provision for Retention Bonus 1.13 17.54 7.39 7.46 Provision for Other Employee Benefits - - 0.01 0.11 Provision for Taxation (Net of Advance taxes) 0.05 0.23 4.39 59.26 Provision for Operations and Maintenance 35.15 - 9.65 11.26 Provision for Lease Equalisation 0.18 5.40 3.78 0.87 Provision for Mine restoration 161.64 192.02 7.23 5.34 Provision for warranty 462.10 445.05 - - Other Provisions - - 25.94 88.88

707.46 702.61 83.39 196.72

9 Short Term Borrowings

(` Crores)



Cash Credits and Working Capital Demand Loan from Banks (Secured) 2,712.61 2,855.54

Other Loans repayable on demand Secured From Banks 225.09 -

Rupee Loans and Advances Secured From Banks 990.00 932.27

From Financial Institutions - 105.96

Unsecured From Banks - 1.36

From Others - 19.00

Foreign Currency Loans and Advances Secured - From Banks 577.73 837.31

Other Loans and Advances - Unsecured - From Others 2.93 -

Loans and Advances from Related Parties (Refer Note 46) Unsecured Rupee Loans and Advances 20.28 5.22

4,528.64 4,756.66

A. Cash Credits and Working Capital Demand Loan#

(` Crores)S.

No. Subsidiary / Company NameAmount of Loan

From Banks*1 Lanco Infratech Limited (LITL) - the Company 1,071.97

(1,206.72)Security & Terms and Conditions` 1,071.97 (March 31,2014: `1,206.72) Crores is having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge as per the CDR scheme approved by CDR EG. Further, this loan is secured by pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.


147

(` Crores)S.

No. Subsidiary / Company NameAmount of Loan

From Banks*2 Lanco Kondapalli Power Limited (LKPL) 28.63

(123.99)Security & Terms and ConditionsCash Credits and Working Capital demand loan from Banks secured by way of charge on LKPL’s inventories, consumable stores, book debts and all the movable properties of the LKPL including its movable plant and machinery, spares, tools, accessories and other movables both present and future and further secured by way of a equitable charge by deposit of title deeds of all the immovable properties of the LKPL situated at Krishna District in the State of Andhra Pradesh, both present and future ranking pari passu with charges created for securing term loans of the LKPL and secured on a pari passu basis by way of registered mortgage of the LKPL’s freehold properties in the State of Maharashtra and assignment of project contracts. Further secured by pledge of a portion of shares held by promoters. The Cash Credit is repayable on demand and carries interest @ Base Rate + 2.5% to Base Rate + 5.75%. (March 31, 2014: Base Rate + 2.5% to Base Rate + 3.00%).


Security & Terms and ConditionsCash Credits and Working Capital demand loan from Banks is secured by hypothecation of stocks/ Work in Progress and other current assets both present and future on parri passu basis on movable and immovable properties and also guaranteed by certain directors / others in their personal capacity and by issue of Letter of Comfort by the LTPCL. The Cash Credit is repayable on demand and carries interest @15.35 weighted Average rate .

4 Lanco Amarkantak Power Limited (LAPL) 282.61 (237.21)

Security & Terms and ConditionsWorking Capital Loans include Cash Credit (CC) availed from the consortium of Canara Bank and Allahabad Bank(Unit I) in respect of the sanctioned CC limit of ` 135.00 Crores and from IDBI Bank Ltd (Unit II) in respect of its sanctioned CC limit of ` 145.00 Crores. The entire Working Capital Fund Based CC Loans and Non Fund Based facilities to the extent of ` 144.00 Crores are secured by way of first charge on the project assets of Unit I & II ranking pari passu with the Term Lenders of Unit I & II. Non Fund Based facilities in excess of ` 144.00 Crores are secured by way of a Second Charge on the project Assets of Unit I & II .

5 Udupi Power Corporation Limited (UPCL) 665.72 (486.53)

Security & Terms and ConditionsCash Credit and Working Capital demand loan from Bank is Security given to Senior Rupee Debt A and Senior Rupee Debt B Lenders shall rank parri passu among the participating Senior Rupee Debt A and Senior Rupee Debt B Lenders and the Working Capital Lenders. The Security Interest in the context of Working Capital Lenders shall secure the working capital facility to a maximum extent of `690.00 Crores.

6 Lanco Anpara Power Limited (LAnPL) 491.60 (505.45)

Security & Terms and ConditionsCash Credits and Working Capital demand loan Secured as follows :1. First pari-passu charge by way of hypothecation of entire Current Assets, namely, raw-materials, stock-in-process, semi-finished goods,

and finished goods, stores and spares including relating to plant and machinery (Consumable Stores & Spares), Bills Receivable and Book Debts and operating cash flows, revenues and receivables of the Project and all other movables of the Borrower, both present and future;

2. First ranking pari-passu charge on project assets both present and future ranking pari-passu with other working capital lenders;3. First pari-passu charge by hypothecation on all the movable fixed assets of the LAnPL, both present & future;4. First pari-passu charge by way of equitable charge on all the immovable fixed assets of the LAnPL, both present & future;5. First pari-passu charge/assignment/security interest of contractor guarantees, performance bonds and any letter of credit that may be

provided by any party under the project;6. First pari-passu charge/assignment/security interest of rights, titles and interest of the LAnPL in all project documents/contracts/licenses

including insurance contracts pertaining to the project.7. The Cash Credit is repayable on demand and carries interest rate which are linked to Bank’s Base Rate + weighted average spread of 3.90%.

7 Lanco Solar Energy Private Limited (LSEPL) 161.81 (282.10)

Security & Terms and ConditionsCash Credit from banks are secured by first charge on current assets (present and future) of the LSEPL ranking pari passu with all member banks under multiple banking arrangements. The LSEPL has not repaid the loan amount of ` 13.24 Crores and interest amount of ` 6.62 Crores as at March 31, 2015. Total 2,712.61

(2,855.54)# In the Company and at each SPV there are many loans and many lenders. The Carrying interest rate is as per the respective loan

agreements entered at Company / SPV level which is linked to each of the Lender's Bank Rate +/- Spread as applicable.* Previous Year figures are mentioned within the brackets


148

B. Rupee Term Loan from Banks / Financial Institutions #(` Crores)


Amount of Loan



Nil (100.00)

Security & Terms and ConditionsIDBI Bank:1. First charge on all assets (movable & immovable) of UPCL, pari-passu with Sr.Debt A and Sr. Debt B lenders and fund based working capital lenders. Collateral : Exclusive charge on pledge of shares to the extent of 160.00 Crores (16 Crores share of 10 each) held by promoter / group companies and Third party Guarantee : Corporate Guarantee of Company.

Bank of India: 1. First paripassu charge on all the project assets. The security ranks pari passu amongst Sr. Debt A and fund based WC Lenders. 2. UPCL should give an undertaking to the effect that Lenders ( Sanctioning RTL for meeting Revenue GAP ) would have a pari passu charge on Differential arrears to be received from the ESCOM’s for the revised bills from November 2010 onwards the same would be utilised towards repayment of Lenders (Sanctioning RTL for meeting the revenue Gap ). 3. Corporate Guarantee of Company. 4. Collateral : Exclusive charge on pledge of shares of UPCL to the extent of `150.00 Crores. (15 Crores shares of `10/- each) held by promoter / group companies.

ICICI Bank Limited 1: 1. First paripassu charge on all the project assets. The security ranks pari passu amongst Sr. Debt A and fund based WC Lenders. 2. UPCL should give an undertaking to the effect that Lenders ( Sanctioning RTL for meeting Revenue GAP ) would have a pari passu charge on Differential arrears to be received from the ESCOM’s for the revised bills from November 2010 onwards and the same would be utilised towards repayment of Lenders (Sanctioning RTL for meeting the revenue Gap ). Exclusive charge on pledge of shares of UPCL to the extent of `31.90 Crores (3.19 Crores shares of `10/- each) held by promoter / group companies

Axis Bank: 1. Subservient charge to Sr Debt A , Sr Debt B, Revenue gap Funding & Working Capital Lenders on project assets (Movable & Immovable) including but not limited to current assets , receivables, cash flows etc. 2. Corporate Guarantee of Company.

ICICI Bank Limited 2: 1. Subservient charge to Sr Debt A, Sr Debt B, Revenue gap Funding & Working Capital Lenders on project assets (Movable & Immovable) including but not limited to current assets, receivables, cash flows etc. 2. Pledge of shares of UPCL to the extent of `31.90 Crores (3.19 Crores shares of `10/- each) held by promoter / group companies. During the year the loan taken from PFC for `100.00 Crores has been repaid.

2 Lanco Amarkantak Power Limited (LAPL) 250.00 (250.00)

-

Security & Terms and ConditionsDuring the year Andhra Bank Short Term Loan of ` 250.00 Crores of Unit V & VI was rolled over which is secured by Mortgage of 100.55 acres of LAPL’s Leasehold Land in addition to collateral security of free hold land and pledge of Equity shares of LTPCL, together with personal guarantees of promoter directors.

3 Lanco Anpara Power Limited (LAnPL) 225.09 (Nil)

-

Security & Terms and ConditionsDuring the Financial Year the LAnPL has taken short term loan of ` 225.09 Crores from Bank of India which is secured by: Subservient charge on the entire assets of the LAnPL and personal guarantee of promoter; which will be repaid as a bullet payment at the end of 6th month from the date of disbursement.

4 National Energy Trading and Services Limited (NETS) Nil (12.27)

-

Security & Terms and ConditionsLoans against fixed deposits is repayable on or before the maturity date of the fixed deposit and repaid during the year.

5 Mercury Projects Private Limited (MPPL) - (5.96)Security & Terms and ConditionsLoan from Financial Institution is repayable on demand. The loan is secured by collateral security of Equipment's given by the Company against the Agreements. Total 1,215.09

(932.27)Nil

(105.96)

# In the Company and at each SPV there are many loans and many lenders. The Carrying interest rate is as per the respective loan agreements entered at Company / SPV level which is linked to each of the Lender’s Bank Rate +/- Spread as applicable.* Previous Year figures are mentioned within the brackets


149

C. Foreign Currency Loan from Banks #(` Crores)


Amount of LoanFrom Banks*

1 Lanco Infratech Limited (LITL) - the Company 1.04 (101.29)

Security & Terms and ConditionsForeign Currency Loans (Buyers Credit) from banks of `1.04 (March 31,2014: `101.29) Crores having first pari passu charge on fixed assets and current assets (present and future) of the Company except assets with exclusive charge along with pledge of equity shares of the Company held by its Promoters, Corporate Guarantee given by Promoter Company, Personal Guarantee of Promoter Guarantors, subservient charge on the asset of 7 SPVs / Subsidiaries and unencumbered shares of 8 SPVs held by Promoters, Company and its step down subsidiaries and associates.


Security & Terms and ConditionsThe Security shall rank pari-passu amongst the lenders providing non-fund based facilities for the project upto a limit of `750.00 Crores, but shall, however, be second and subsequent to the first / second ranking pari-passu charges created thereon in favour of Sr. Debt A and Sr. Debt B lenders.

3 Lanco Solar Private Limited (LSPL) Nil (25.50)

Security & Terms and ConditionsForeign Currency Loan (Buyers Credit) from Banks is taken out from Company’s credit limits.

4 Lanco Solar Energy Private Limited (LSEPL) Nil (13.12)

Security & Terms and ConditionsBuyers Credit from Banks are secured as part of working capital limits from banks by way of first charge of hypothecation of stock/work in progress and entire current assets of the LSEPL both present and future, on pari passu basis and second charge on movable and immovable properties and also guaranteed (Corporate Guarantee) by Company as collateral security is held by Andhra Bank. Total 577.73

(837.31)# In the Company and at each SPV there are many loans and many lenders. The Carrying interest rate is as per the respective loan

agreements entered at Company / SPV level which is linked to each of the Lender's Bank Rate / LIBOR +/- Spread as applicable.* Previous Year figures are mentioned within the brackets

D Unsecured Rupee Loans and Advances 20.28 (5.22)

(i) Interest free unsecured loan of 15.06 Crores (March 31, 2014 : NIL) from holding company is repayable on or before March 31, 2016 and having an option to lenders to convert in to equity at price to be arrived as per SEBI guidelines.(ii) Unsecured Loan has been taken from the SOPL which carries interest @ 12.75 % p.a and loan is repayable within 12 months from the date of disbursement.

10 Trade Payables (` Crores)



Trade Payables (including acceptances) 3,904.43 4,111.55 3,904.43 4,111.55

11 Other Current Liabilities (` Crores)



Current maturities of long term borrowings (Refer Note 5) 1,517.48 1,828.49 Interest accrued but not due on borrowings 250.54 206.99 Interest accrued and due on borrowings 711.25 831.64 Advances received against sale of Investments 743.00 - Income received in advance 0.13 - Advances from Customers 1,969.67 1,552.14 Taxes Payable 99.25 81.54 Amount payable in respect of Purchase of Fixed Assets / EPC contracts 104.25 88.56 Salaries and Other Employee benefits Payable 78.19 163.03 Other Payables 571.26 377.61

6,045.02 5,130.00


150

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151

13 Intangible Assets

(` Crores)Particulars Computer

SoftwareToll Collection

RightsOther

Intangible Assets **

Total

Gross BlockAs at April 01, 2013 33.97 - 105.92 139.89Additions 2.91 - - 2.91Disposals 0.67 - - 0.67AdjustmentsExchange Difference 0.00 - (3.69) (3.69)- Others * 0.07 - - 0.07As at March 31, 2014 36.28 - 102.23 138.51Additions 0.04 3.84 - 3.88Additions on inclusion of new subsidiaries 0.17 1,831.54 - 1,831.71Disposals 0.10 - - 0.10Adjustments- Exchange Difference 0.00 - (18.80) (18.80)As at March 31, 2015 36.39 1,835.38 83.43 1,955.20DepreciationAs at April 01, 2013 23.96 - 37.86 61.82Charged For the Period 6.93 - 21.01 27.94On Disposals 0.66 - - 0.66Adjustments- Exchange Difference 0.00 - (2.22) (2.22)- Others * 0.06 - - 0.06As at March 31, 2014 30.29 - 56.65 86.94For the Period 2.53 40.51 20.84 63.88Additions on inclusion of new subsidiaries 0.12 22.96 - 23.08On Disposals 0.09 - - 0.09Adjustments- Exchange Difference 0.00 - (12.44) (12.44)- Others 0.00 - - 0.00As at March 31, 2015 32.85 63.47 65.05 161.37Net BlockAs at March 31, 2014 5.99 - 45.58 51.57As at March 31, 2015 3.54 1,771.91 18.38 1,793.83

* On reclassification of asset class.

** includes Briquetting technology asset & third party capital contribution for the port.

14 Capital Work In Progress

(` Crores)As at and Upto March 31, 2015

As at and Upto March 31, 2014

Asset Under Construction (Refer Note 57, 86 & 88) 9,799.06 9,250.14 Other Direct CostSalaries, Allowances and Benefits to Employees 229.35 205.42 Contribution to Provident Fund and Other Funds 12.85 9.68 Grid Connection Charges 2.00 2.00 Staff Welfare Expenses 4.72 4.11 Rent 13.21 11.37 Rates and Taxes 14.99 14.15


152



Socio Economic Development Expenses 42.93 42.57 Repairs and Maintenance - Others 3.37 3.22 Office Maintenance 6.64 5.33 Insurance 65.71 56.28 Printing and Stationery 1.63 1.53 Consultancy and Other Professional Charges 152.06 132.81 Electricity, Water and Fuel Charges 1.33 1.31 Travelling and Conveyance 30.04 28.05 Communication Expenses 3.63 3.37 Project Allotment Expenses 29.63 29.63 Interest 5,286.11 3,767.23 Loss / (Gain) on Foreign Exchange Fluctuation (net) 514.55 465.33 Bank and Other Finance Charges 142.29 110.41 Depreciation 17.35 14.46 Trial Run Cost - Finance Charges 0.99 0.99 Miscellaneous Expenses 30.77 25.84

16,405.21 14,185.23 Less: Other IncomeMiscellaneous Income 42.53 41.44 Insurance Claim Received 59.28 58.52 Transferred to Claims Receivables 164.64 - Interest Received (Gross) on Deposits and Others 128.41 93.48

16,010.35 13,991.79 Less: Expenditure Apportioned over Cost of Fixed Assets 3.67 3.67 Less: Charged to Profit and Loss Account 2.13 2.13

16,004.55 13,985.99

15 Intangible Asset Under Development



Other Direct CostSalaries, Allowances and Benefits to Employees 9.21 8.68 Contribution to Provident Fund and Other Funds 0.11 0.10 Staff Welfare Expenses 0.07 0.07 Rent 0.93 0.92 Rates and Taxes 1.02 1.01 Repairs and Maintenance - Others 0.04 0.04 Office Maintenance 1.00 0.99 Insurance 0.25 0.25 Printing and Stationery 0.07 0.07 Consultancy and Other Professional Charges 3.13 2.93 Travelling and Conveyance 1.11 1.07 Communication Expenses 0.15 0.14 Project Allotment Expenses 0.06 0.06 Interest 24.58 24.58 Bank and Other Finance Charges 8.64 8.34 Depreciation 0.14 0.11 Miscellaneous Expenses 0.54 0.16

51.05 49.52 Less: Other Income Miscellaneous Income 0.48 0.48 Transferred to Claims Receivables 50.44 - Interest Received (Gross) on Deposits and Others 0.13 0.13

0.00 48.91


153

16 Non Current Investments(At Cost unless otherwise stated)

No. Crores (` Crores) As at

March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014I Trade Investments(a) Investment in Equity Instruments(i) Investment in Associate Company (Unquoted)

(At cost plus share of profits / losses based on equity accounting)Equity Shares @ `10/- each fully paid upLanco Vidarbha Thermal Power Limited # (After elimination of profit / (loss) of ` 2.91 (March 31, 2014: ` 2.91) Crores)

0.29 0.29 - -

Genting Lanco Power (India) Private Limited (Including Share of profit / (loss) of ` 10.096 (March 31, 2014: ` 9.36) Crores)

0.05 0.05 12.19 11.47

Regulus Power private Limited (Including Share of profit / (loss) of ` (0.0055) (March 31, 2014: ` (0.0042)) Crores)

0.02 0.02 0.21 0.23

Himavat Power Limited (Including Share of profit / (loss) of ` (0.01) (March 31, 2014: (0.0027)) Crores & after elimination of profit / (loss) of ` 0.0073 (March 31, 2014: 0.0073) Crores)

0.00 0.00 - -

Pragdisa Power Private Limited (After elimination of profit / (loss) of ` 0.0026 (March 31, 2014: ` 0.0026) Crores)

0.00 0.00 - -

Vainateya Power Private Limited (After elimination of profit / (loss) of ` 0.0026 (March 31, 2014: ` 0.0026) Crores)

0.00 0.00 - -

Avior Power Private Limited (After elimination of profit / (loss) of ` 0.0026 (March 31, 2014: ` 0.0026) Crores)

0.00 0.00 - -

Mirach Power Private Limited (After elimination of profit / (loss) of ` 0.0026 (March 31, 2014: ` 0.0026) Crores)

0.00 0.00 - -

Lanco Hoskote Highway Limited * (Including Share of profit / (loss) of ` Nil (March 31, 2014: ` (7.19)) Crores & after elimination of profit / (loss) of ` Nil (March 31, 2014: ` 10.61 Crores)

- 5.03 - 32.48

Lanco Devihalli Highways Limited * (Including Share of profit / (loss) of ` Nil (March 31, 2014 : ` (17.41)) Crores & after elimination of profit / (loss) of ` Nil (March 31, 2014 : ` 2.23) Crores)

- 4.59 - 26.27

Bay of Bengal Gateway Terminal Private Limited (Including Share of profit / (loss) of ` (0.01) (March 31, 2014: ` (0.01)) Crores)

0.00 0.00 - -

Charon Trading Private Limited (Including Share of profit / (loss) of ` (0.0432) (March 31, 2014: ` (0.04)) Crores)

0.03 0.03 0.29 0.30

Mimas Trading Private Limited (Including Share of profit / (loss) of ` (0.03) (March 31, 2014: ` (0.03)) Crores)

0.05 0.05 0.47 0.47

Ananke Properties Private Limited (Including Share of profit / (loss) of ` (0.126) (March 31, 2014: ` (0.12)) Crores)

0.10 0.10 0.92 0.92


154


March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014 Tethys Properties Private Limited (Including Share of profit / (loss) of ` (0.1251) (March 31, 2014: ` (0.12)) Crores)

0.10 0.10 0.92 0.92

Bianca Properties Private Limited (Including Share of profit / (loss) of ` (0.1251) (March 31, 2014: ` (0.12)) Crores)

0.10 0.10 0.92 0.92

Belinda Properties Private Limited (Including Share of profit / (loss) of ` (0.12) (March 31, 2014: ` (0.12)) Crores)

0.10 0.10 0.92 0.92

Phoebe Trading Private Limited (Including Share of profit / (loss) of ` (0.0315) (March 31, 2014: ` (0.03)) Crores)

0.03 0.03 0.31 0.31

Basava Power Private Limited (After elimination of profit / (loss) of (0.0026) (March 31, 2014: (0.0026)) Crores)

0.00 0.00 - -

Siddheswara Power Private Limited (After elimination of profit / (loss) of (0.0026) (March 31, 2014: (0.0026)) Crores)

0.00 0.00 - -

DDE Renewable Energy Private Limited (After elimination of profit / (loss) of 0.31 (March 31, 2014: 0.31) Crores)

0.00 0.00 - -

Electromech Maritech Private Limited (After elimination of profit/loss) of ` 0.64 (March 31, 2014: ` 0.64) Crores)

0.00 0.00 - -

Finehope Allied Engg. Private Limited (After elimination of profit / (loss) of 0.0038 (March 31, 2014: 0.0038 ) Crores)

0.00 0.00 - -

KVK Energy Ventures Private Limited (Including Share of profit / (loss) of Nil (March 31, 2014:

Nil ) Crores & after elimination of profit / (loss) of Nil (March 31, 2014: Nil ) Crores)

0.49 0.49 4.88 4.88

Newton Solar Private Limited (After elimination of profit / (loss) of 0.0026 (March 31, 2014: 0.0026) Crores)

0.00 0.00 - -

Saidham Overseas Private Limited (After elimination of profit / (loss) of 0.0035 (March 31, 2014: 0.0035) Crores)

0.00 0.00 - -

Vasavi Solar Power Private Limited (After elimination of profit / (loss) of 0.05 (March 31, 2014: 0.05) Crores)

0.00 0.00 - -

ii Investment in Other Company (Unquoted) Unique Corporate Consultants Private Limited 0.15 0.15 1.50 1.50 Indian Energy Exchange - 0.13 - 1.25

Sub Total (a) 23.53 82.84(b) Investment in Preference Shares(i) Investment in Associate Company (Unquoted)

0.001% Cumulative Compulsory Convertible Preference Shares @ `10/- each fully paid up Himavat Power Limited (Including Share of profit / (loss) of ` (0.09) (March 31, 2014: `(0.08)) Crores)

55.27 55.09 552.61 550.88


155


March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014Mirach Power Private Limited (Including Share of profit / (loss) of ` (0.01) (March 31, 2014: ` (0.01)) Crores)

0.03 0.03 0.29 0.29

0.001% Optionally Convertible Cumulative Redeemable Preference shares @ `10/- each fully paid upPragdisa Power Private Limited 1.07 - 10.65 - Avior Power Private Limited (Including share of profit / (loss) of ` (0.0015) (March 31, 2014: ` (0.0015) Crores)

0.44 0.25 4.37 2.50

Ananke Properties Private Limited 3.30 3.30 66.13 66.12 Belinda Properties Private Limited 3.30 3.30 65.92 65.92 Bianca Properties Private Limited 3.30 3.30 65.92 65.92 Tethys Properties Private Limited 3.30 3.30 65.92 65.92 Charon Trading Private Limited 1.09 1.09 10.85 10.85 Mimas Trading Private Limited 0.27 0.27 2.66 2.66 Phoebe Trading Private Limited 0.27 0.27 3.16 3.15 Regulus Power Private Limited 0.22 0.22 2.21 2.21 Lanco Devihalli Highways Limited * - 1.40 - 14.03 16% Compulsory Covertible Preference shares @ `10 eachElectromech Maritech Private Limited (Including Share of profit / (loss) of ` (1.86) (March 31, 2014: ` (1.33)) Crores & after elimination of profit / (loss) of ` 0.04 (March 31, 2014: 0.01) Crores)

0.74 0.74 5.60 6.09

0.001% Compulsory Convertible Preference shares @ `10 eachDDE Renewable Energy Private Limited (Including Share of profit / (loss) of ` (2.61) (March 31, 2014: ` (1.43) ) Crores & after elimination of profit / (loss) of ` (0.04) (March 31, 2014: ` 0.07 ) Crores)

0.74 0.74 4.06 5.21

Finehope Allied Engineering Private Limited (Including Share of profit / (loss) of ` (2.08) (March 31, 2014: `(1.16)) Crores & after elimination of profit / (loss) of ` (0.03) (March 31, 2014: ` (0.33) Crores)

0.75 0.75 3.77 4.66

KVK Energy Ventures Private Limited 10.86 10.86 111.35 111.35Newton Solar Private Limited (Including Share of profit / (loss) of ` (1.77) (March 31, 2014: ` (1.38)) Crores & after elimination of profit / (loss) of ` 0.02 (March 31, 2014: 0.35) Crores)

0.75 0.75 5.56 5.93

Saidham Overseas Private Limited (Including Share of profit / (loss) of ` (0.97) (March 31, 2014: ` (0.68) ) Crores & after elimination of profit / (loss) of ` 0.03 (March 31, 2014: `0.03 ) Crores)

0.75 0.75 3.97 4.24

Vasavi Solar Power Private Limited (Including Share of profit / (loss) of `(2.77) ( (March 31, 2014: `(2.13)) Crores & after elimination of profit / (loss) of `0.04 (March 31, 2014: ` 0.07) Crores)

0.75 0.75 3.79 4.39

0.001% Optionally Convertible Cumulative Redeemable Preference shares @ `10/- each fully paid upVainateya Power Private Limited 1.52 - 15.25 -Mirach Power Private Limited 0.02 - 0.18 -Basava Power Private Limited 0.01 - 0.08 -


156


March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014Siddheswara Power Private Limited 0.02 - 0.15 -0.01% Cumulative Compulsory Convertible Preference Shares @ `10/- eachLanco Vidarbha Thermal Power Limited # (Including Share of profit / (loss) of ` (1.69) (March 31, 2014: ` (1.69) Crores & after elimination of profit / (loss) of `70.25 (March 31, 2014: ` 79.81) Crores)

79.25 71.83 709.84 626.07

(ii) Investment in Other Company (Unquoted)6% Optionally Convertible Redeemable Cumulative Preference shares @ Re.1/- each fully paid upClarion Power Corporation Limited 0.25 0.25 0.25 0.25Rithwik Energy Systems Limited 0.14 0.14 0.14 0.140.001% Cumulative Compulsory ConvertiblePreference Shares @ `10/- each fully paid upLanco Babandh Power Limited 132.18 122.17 1,321.82 1,221.700.001% Optionally Convertible Cumulative RedeemablePreference shares of `10/- each, fully paid upBanas Thermal Power Private Limited 0.28 - 2.78 -Nekkar Power Private Limited 0.01 - 0.08 -0.01% Redeemable Cumulative ConvertiblePreference Shares @ `10/- each fully paid upLanco Horizon Properties Private Limited 7.25 7.25 72.51 72.51

Sub Total (b) 3,111.87 2,912.99 Total Trade Investments (I) (a+b) 3,135.40 2,995.83

II Non Trade Investments(c) Investment in Equity Instruments

Investment in Other Company (Quoted)Equity Shares @ `10/- each fully paid upPower Finance Corporation Limited 0.02 0.02 5.02 5.02 Rural Electrification Corporation Limited 0.00 0.00 0.99 0.99 Indian Bank 0.00 0.00 0.06 0.06 Andhra Bank 0.00 0.00 0.21 0.21 Bank of Baroda^ 0.00 0.00 0.17 0.17 Central Bank of India 0.00 0.00 0.02 0.02

Sub Total (c) 6.47 6.47 ^ FV of equity shares ` 10 each (March 31, 2014) sub divided in to ` 2 /- each (March 31, 2015)

(d) Investment in Debentures or Bonds (Unquoted) of ` 10 lakhs each, fully paid upCentral Bank of India 0.00 0.00 1.00 1.00

Sub Total (d) 1.00 1.00 (e) Investment in Mutual Funds/ULIPs/Insurances

(Unquoted)Birla Sunlife Insurance Platinum Premier Plan 0.06 0.06 1.15 0.66 MetLife-Met Smart One 0.00 0.00 0.05 0.05 Star Union Dai-Ichi Life Insurance 1.03 1.03 Canara HSBC OBC Insurance ISP 0.01 0.01 0.26 0.18 MetLife-Met Suvidha Non Par Single 0.30 0.30

Sub Total (e) 2.79 2.22 Total Non Trade investment (II) (c+d+e) 10.26 9.69 Total Non Current Investments 3,145.66 3,005.52


157


March 31, 2015As at

March 31, 2014As at

March 31, 2015As at

March 31, 2014Provision for Diminution in Value of Investments - (Aggregate Value)

2.79 -

Total Non Current Investments (I + II) 3,142.87 3,005.52 Aggregate amount of Quoted Investments 6.47 6.47 Market Value of Quoted Investments 9.39 6.73 Aggregate amount of Non - Quoted Investments 3,136.40 2,999.05

* During the year these companies became subsidiaries

Details of Shares pledged with Banks and Financial InstitutionsNo. Crores



Non Current Investment *Lanco Vidarbha Thermal Power Limited - Equity Shares 0.29 0.10 Lanco Hoskote Highway Limited– Equity Shares - 5.03 Lanco Devihalli Highways Limited– Equity Shares - 4.59 DDE Renewable Energy Private Limited - Equity Shares 0.00 0.00 Electromech Maritech Private Limited - Equity Shares 0.00 0.00 Newton Solar Private Limited - Equity Shares 0.00 0.00 Saidham Overseas Private Limited - Equity Shares 0.00 0.00 Vasavi Solar Power Private Limited - Equity Shares 0.00 0.00 Himavat Power Limited – Equity Shares 0.00 - Himavat Power Limited – Preference Shares 28.16 26.90 DDE Renewable Energy Private Limited - Preference Shares 0.74 0.74 Electromech Maritech Private Limited - Preference Shares 0.14 0.14 Finehope Allied Engineering Private Limited - Preference Shares 0.14 0.14 Newton Solar Private Limited - Preference Shares 0.14 0.14 Vasavi Solar Power Private Limited - Preference Shares 0.14 0.14 Saidham Overseas Private Limited - Preference Shares 0.74 0.74 KVK Energy Ventures Private Limited - Preference Shares 6.65 6.65 Lanco Vidarbha Thermal Power Limited - Preference Shares 70.47 33.33 Lanco Babandh Power Limited - Preference Shares 83.68 70.62

* The above shares were pledged with Banks and Financial Institutions who have extended Loan & Credit Facilities to the respective investee companies.

# The Unencumbered shares in the investee company are being offered as collateral security to the CDR lenders of the company.

17 Current Investments(At lower of cost and fair value)Investment in Mutual Funds (Unquoted)


March 31, 2015As at

March 31, 2014As at

March 31, 2015 As at

March 31, 2014Birla Sunlife Cash Manager-Institutional Plan-Daily Dividend 0.00 0.00 0.01 0.01 Canara Robeco-Treasury Advantage Retail Dividend Fund 0.00 0.00 0.02 0.20 Canara Robeco Income Fund -regular growth 0.01 0.01 0.27 0.13 Canara Robeco Gold Saving Fund 0.03 0.00 0.22 0.20 HDFC Liquid Fund - Premium Plan Growth 0.00 0.00 0.01 0.01 HDFC Liquid Fund - Premium Plan Daily Dividend 0.00 0.00 0.02 0.02 Canara Robeco Treasury Advantage Retail Dividend Fund - ISIN 0.00 - 0.03 - Axis Liquid Fund - Growth - Mutual 0.01 - 12.10 - Total Current Investments 12.68 0.57


158

18 Loans and Advances

(` Crores)

Non Current Current

As atMarch 31, 2015




Capital Advances

Secured, Considered Good 0.50 0.50 - -

Unsecured, Considered Good (Refer Note 60 & 85) 74.66 75.59 - -

75.16 76.09 - -

Security Deposit

Unsecured, Considered Good 90.76 134.09 46.38 20.10

Doubtful 0.60 0.60 0.38 0.38

91.36 134.69 46.76 20.48

Less: Provision for doubtful Security Deposit 0.60 0.60 0.38 0.38

90.76 134.09 46.38 20.10

Loans & Advances to Related Party (Refer Note 46)

Unsecured, Considered Good

Advances for Investment 0.10 16.16 - 10.65

Loans Receivable 68.88 68.88 70.26 280.92

Advances Recoverable in Cash or in kind 0.00 - 56.82 65.80

68.98 85.04 127.08 357.37

Other Loans & Advances (Unsecured, Considered good otherwise stated)

Advance Tax (Net of Provision for Tax) 152.01 114.76 50.47 38.33

Minimum Alternative Tax Credit Entitlement 42.31 42.30 - 0.00

Loans and Advances to Employees - - 5.53 8.46

Advances for Investment 0.73 3.64 - -

Prepaid Expense 0.24 0.18 51.87 56.09

Cenvat / Vat / Service Tax Credit Receivable 35.49 44.49 188.10 174.58

Taxes Paid Under protest 3.09 4.73 - 0.00

Loans Receivable- Unsecured, Considered Good - - 14.33 2.38

Advances Recoverable in Cash or in kind

Unsecured, Considered Good 230.20 181.76 1,875.93 1,816.37

Doubtful - - 27.96 7.46

464.07 391.86 2,214.19 2,103.67

Less: Provision for doubtful Other Loans and Advances - - 27.96 7.46

464.07 391.86 2,186.23 2,096.21

698.97 687.08 2,359.69 2,473.68


159

19 Trade Receivables and Other Assets

(` Crores) Non Current Current

As atMarch 31, 2015




19.1 Trade ReceivablesOutstanding for a period exceeding six months from the date they are due for payment Secured, Considered Good 121.56 111.74 Unsecured, Considered Good 1,072.53 1,039.58 Doubtful 12.89 12.07

- - 1,206.98 1,163.39 Less : Allowance for bad & doubtful debts 12.89 12.07

- - 1,194.09 1,151.32 Other Receivable Unsecured, Considered Good 804.46 604.25 2,159.90 2,808.04 Doubtful 0.36 2.42 59.72 -

804.82 606.67 2,219.62 2,808.04 Less : Allowance for doubtful debts 0.36 2.42 59.72 -

804.46 604.25 2,159.90 2,808.04 Sub Total (A) 804.46 604.25 3,353.99 3,959.36

19.2 Other AssetsNon Current Bank Deposits (as per Note 21) 213.19 238.06 - - Unamortised Premium on Forward Contract - - 3.75 11.19 Unbilled Revenue - - 236.60 245.82 Interest Accrued on Deposits 0.13 0.04 23.75 85.70 Others (Includes Claims Receivables - Refer Note 82 & 83) 3.42 - 342.03 1.00

Sub Total (B) 216.74 238.10 606.13 343.71 Total (A + B) 1,021.20 842.35 3,960.12 4,303.07

20 Inventories

(At lower of cost and net realisable value unless otherwise stated)

(` Crores) As at


March 31, 2014 Raw Materials 311.77 258.14 Construction / Development Work In Progress 2,787.36 2,638.88 Finished Goods 3.18 12.05 Consumables, Stores and Spares (including Stock in transit ` 0.17 (March 31,2014 : ` 0.15 )) Crores 218.01 212.27

3,320.32 3,121.34 Details of Closing Inventory Raw Materials Naptha 23.96 40.98 Coal 173.44 105.97 Oil - (HFO, LDO & HSD) 12.68 13.29 Material in Transit & Under Inspection 0.05 32.62 Semi Finished Goods 0.33 0.33 Solar Cells & other Solar Equipments 1.92 4.85 Steel 49.52 45.51 Inventory Others 49.87 14.59

311.77 258.14 Finished Goods Solar Modules 0.67 1.38 Coal 2.51 10.67

3.18 12.05


160

21 Cash And Bank Balance

(` Crores)

Non Current Current As at

March 31, 2015As at

March 31, 2014As at


March 31, 2014Cash and Cash EquivalentsBalances with Banks

-On Current Accounts 584.30 383.21

-On Deposit Accounts (Having Maturity less than 3 Months from date of deposit)

31.74 2.91

Cash on Hand 1.12 0.45

617.16 386.57

Other Bank BalancesOn Deposit Accounts

Having Maturity more than 3 Months but less than or equal to 12 months from date of deposit

- - 15.11 24.96

Having Maturity more than 12 Months from date of deposit

206.61 236.16 50.53 62.59

On Margin Money Deposit Accounts * 6.58 1.90 125.46 105.22

213.19 238.06 191.10 192.77

Amount disclosed under other non Current assets (Note 19.2) (213.19) (238.06)

- - 808.26 579.34

* The Margin Money Deposits are towards Letters of Credit and Bank Guarantees

22 Revenue From Operations

(` Crores)

For the Year Ended

March 31, 2015 March 31, 2014

Contract Operations (A) 1,169.78 2,096.58

Property Development (B) 69.12 193.23

Sale of Services

Toll Collections 105.14 -

Management Consultancy - 2.81

Operations and Maintenance 7.64 4.80

(C) 112.78 7.61

Sale of Products

Electrical Energy 7,433.16 7,404.52

Coal 545.87 678.86

Other Goods 24.81 36.22

(D) 8,003.84 8,119.60

Other Operating Revenue

Income from Lease Rentals 6.62 2.27

Other Operating Income 9.77 10.74

(E) 16.39 13.01

Revenue from Operations (A+B+C+D+E) 9,371.91 10,430.03


161

23 Other Income

(` Crores)

For the Year EndedMarch 31, 2015 March 31, 2014

Interest Income on Deposits and Margin money 19.30 22.64 Loans Receivable 21.76 55.72 Long Term Investments 0.09 - Others 48.93 65.63 Dividend Income on Current Investments 0.13 0.51 Long Term Investments 3.92 0.84 Net gain on Sale of Long Term Investment - 0.04 Other Non-Operating Income (Net of expenses directly attributable to such Income)Insurance Claims Received / Receivable 14.80 3.32 Liabilities and Provisions no longer required written back 1.43 0.67 Net Profit / (Loss) on Sale of Assets - 0.01 Rental Income 0.53 - Miscellaneous Income 27.95 18.44

138.84 167.82

24 Cost of Materials Consumed (` Crores)

For the Year Ended March 31, 2015 March 31, 2014

Construction Material Consumed 627.88 1,919.11 Property Development Cost 204.63 207.99 Coal for Power Generation 3,614.94 3,315.67 Gas and Naphta for Power Generation 500.53 629.23 Oil (HFO, LDO and HSD) for Power Generation 23.09 32.93 Other Consumables for Power Generations 29.28 21.93 Consumables for Coal Mining 35.31 179.93 Materials Consumed for Solar Modules & Solar Equipments 15.46 29.11

5,051.12 6,335.90

25 Purchase of Traded Goods (` Crores)


Purchase of Electrical Energy 385.44 529.88 385.44 529.88

26 Construction, Transmission, Plant/Site and Mining Expenses (` Crores)


Equipment/Machinery Hire charges 81.50 199.67 Transmission Charges 17.11 30.58 Repairs, Operations and Maintenance 218.64 167.83 Consumption of Stores and Spares 61.49 53.91 Insurance 44.14 46.58 Electricity 13.98 11.89 Security Charges 16.50 23.93 Coal Mining and transportation Cost 536.46 472.53 Others 36.09 54.55

1,025.91 1,061.47


162

27 (Increase) / Decrease in Inventories of Finished Goods, Construction and Development Work in Progress

(` Crores) For the Year Ended

March 31, 2015 March 31, 2014 Finished Goods Inventories at the beginning of the year 12.05 45.60 Less : Inventories at the end of the year * 3.18 12.05

(A) 8.87 33.55 Construction and Development Work in Progress Inventories at the beginning of the year 2,638.88 2,575.96 Add : Other Adjustments - (1.67) Less: Transfer to Fixed Assets - 120.07

2,638.88 2,454.22 Less : Inventories at the end of the year * 2,787.36 2,638.88

(B) (148.48) (184.66) (Increase)/Decrease in inventories (A+B) (139.61) (151.11)

* For Details Note 20

28 Employee Benefits Expenses


March 31, 2015 March 31, 2014 Salaries, allowances and benefits to employees 318.91 352.52 Contribution to provident fund and other funds 17.34 16.42 Employee Stock Option Charge 4.37 6.35 Recruitment and training 2.18 2.47 Staff welfare expenses 17.83 20.97

360.63 398.73 Less: Transferred to Development cost 9.43 13.40

351.20 385.33

29 Other Expenses

(` Crores)For the Year Ended

March 31, 2015 March 31, 2014Rent 30.25 42.84 Rates and taxes 10.64 14.83 Donations 2.38 3.23 Corporate Social Responsibility Expenses 1.22 - Repairs and Maintenance: Office Building 1.74 - Others 15.37 4.58 Marketing and selling expenses 2.75 2.12 Office maintenance 8.02 10.56 Insurance 3.01 5.78 Printing and stationery 1.90 2.62 Consultancy and other professional charges 59.72 37.53 Directors sitting fee 0.51 0.66 Electricity charges 4.44 4.79 Net Loss on Foreign Exchange Fluctuations 479.52 370.67 Remuneration to auditors (As Auditor): Audit Fee 3.42 2.66 Tax audit fees 0.26 0.27


163

(` Crores)For the Year Ended

March 31, 2015 March 31, 2014Remuneration to auditors - Certification 0.11 0.03 Reimbursement of expenses to Auditors 0.11 0.23 Travelling and conveyance 30.22 37.19 Communication expenses 6.18 7.78 Net Loss on Sale of fixed assets and Assets write off 31.15 15.61 Provision for Advances / claims / debts 37.54 15.23 Business Promotion and Advertisement 5.68 5.32 Miscellaneous expenses 17.75 24.83

753.89 609.36 Less: Recovery of Common Expenses 7.69 9.87 Less: Transferred to Development cost 0.76 1.59 Less: Elimination of Cost on Intercompany Management Consultancy Income 2.55 2.55

742.89 595.35

30 Finance Cost

(` Crores)

For the Year EndedMarch 31, 2015 March 31, 2014

Interest 2,817.64 2,649.20

Other Borrowing Cost (Upfront Fees, Commitment Charges, LC commission etc.) 256.51 124.89

Exchange Difference to the extent considered as an adjustment to borrowing costs (13.94) (11.97)

3,060.21 2,762.12

31 Depreciation and Amortisation Expense

(` Crores)


Depreciation on Tangible Assets 1,050.58 1,144.07

Amortisation on Intangible Assets 63.17 27.84

1,113.75 1,171.91

32 Earning Per Share (EPS)


March 31, 2015 March 31, 2014Net Profit/(Loss) after Taxation, Minority Interest and Share of profit of Associates (2,036.74) (2,273.88)Net Profit/(Loss) for calculation of basic EPS (A) (2,036.74) (2,273.88)

Net Profit as above (2,036.74) (2,273.88)Add : Interest on Loan convertible into equity shares (Net of tax) 323.42 245.56 Net Profit/(Loss) for calculation of diluted EPS (B) (1,713.32) (2,028.32)

Weighted average number of Equity Shares for Basic EPS (C) 237.51 235.02 Effect of dilution : Stock options under ESOP * 0.19 - Convertible loan into equity shares* 500.10 378.90 Weighted Average number of Equity shares for Diluted EPS (D) 737.80 613.92

Basic EPS (in `) (A)/(C) (8.58) (9.68)Diluted EPS (in `) * (B)/(D) (8.58) (9.68)

*Diluted EPS is anti dilutive hence restricted to basic EPS.


164

33 Intra Group Turnover and Profits

The Group ‘Revenue from Operations’, ‘Net Profit after taxation, minority interest and share of profits of associates’, ‘Net Cash flow from Operating Activities’ and ‘Reserves and Surplus’ is after eliminating inter-company transactions as per Accounting Standard (AS) 21 “Consolidated Financial Statements” and Accounting Standard (AS) 23 “Accounting for Investments in Associates in Consolidated Financial Statements”. The impact of these eliminations on the said items is as under:

(` Crores)

For the Year Ended

March 31, 2015 March 31, 2014

Revenue from Operations

Before Elimination 9,542.58 10,707.45

Less : Elimination of Intersegment Operating Income 170.67 277.42

After Elimination (As per Note 22) 9,371.91 10,430.03

Net Profit / (Loss) after taxation, minority interest and share of profits of associates

Before Elimination (2,065.06) (2,288.78)

Less : Elimination for current year (28.32) (14.90)

After Elimination (2,036.74) (2,273.88)

Net Cash flow from Operating Activities

Before Elimination 2,714.10 1,376.59


After Elimination 2,732.66 1,391.64

(` Crores)



Reserves and Surplus

Before Elimination 779.97 2,719.46


Less : Elimination for previous years 1,501.16 1,516.06

After Elimination (As per Note 4) (692.86) 1,218.30

34 Effect of new subsidiaries acquired/disposed off subsidiaries on the Consolidated financial statementsThe effect of acquisition (including newly formed) of stake in subsidiaries on the consolidated financial statements is as under:-

(` Crores)

Name of Subsidiary company Effect on Group Profit/(Loss)

after Minority Interest for the

year ended March 31, 2015

Effect on Net Assets as at

March 31, 2015

Effect on Group Profit/(Loss) after Minority Interest

for the year ended March 31,

2014


March 31, 2014

Indian Subsidiaries

Lanco Hoskote Highway Limited (50.00) 286.94 - -

Lanco Devihalli Highways Limited (25.92) 261.57 - -

Tasra Mining & Energy Company Private Limited - - - 0.35

Foreign Subsidiaries

Sirajgunj Electric Private Limited - - - 0.01

(75.92) 548.51 - 0.36


165

The effect of disposal of stake in subsidiaries on the consolidated financial statements is as under:-

(` Crores)Name of Subsidiary company Effect on Group

Profit/(Loss) after Minority

Interest for the year ended

March 31, 2015


March 31, 2015

Effect on Group Profit/(Loss) after Minority Interest

for the year ended March 31,

2014


March 31, 2014

Indian Subsidiaries Lanco Budhil Hydro Power Private Limited (5.15) 173.80 - - Foreign Subsidiaries Solarfi SP 07 - - - - Solarfi SP 06 - - - - Lanco Solar International Ltd.(UK) 42.21 - - - Lanco Solar International GMBH - - - - Lanco US PV (Earlier Lanco Italy PV 2) - - - - Lanco Solar Holdings LLC (USA) - - - - Lanco Virgin Island 1 LLC (USA) - - - - Lanco SP PV (Earlier Lanco Spain PV1) - - - - Lexton Trading (Pty.) Ltd. - - (0.01) - Approve Choice Investments Ltd. - - - - Bar Mount Trading (Pty.) Ltd. - - - - Barrelake Investments (Pty.) Ltd. - - - - Belara Trading (Pty.) Ltd. - - - - Caelamen (Pty.) Ltd. - - - - Dupondius (Pty.) Ltd. - - - - Gamblegreat Trading (Pty.) Ltd. - - - - Lanco Rocky Face Land Holdings LLC - - (3.28) 3.29 Lanco Tracy City Land Holdings LLC - - (3.26) 3.27 Apricus S.R.L - - (0.27) (1.60)

37.06 173.80 (6.82) 4.97

35 Prior period item for the year ended March 31, 2015 is due to negative difference of ` 44.04 Crores between the management financials and audited financials of GCM, CMM and LRAPL financials under Australian GAAP for the year ended March 31,2014. Further on review of LSHNBV management accounts excess provision reversed amounting to ` 1.52 Crores. Net prior period item is ` 42.52 Crores.

Prior period item for the year ended March 31, 2014 is due to positive difference of ` 17.65 Crores between the management financials and audited financials of GCM, CMM and LRAPL financials under Australian GAAP for the year ended March 31,2013. Further on review of property, plant and equipment opening balances during the year there was a prior period expenditure of ` 61.15 Crores. Net prior period item is ` 43.50 Crores.

36 Exceptional item of ` 123.15 Crores for the year ended March 31, 2015 includes profit on sale of long term investments (Net) ` 34.40 Crores and reversal of excess provisions made in previous years for ` 88.75 Crores.

Exceptional item of ` (179.26) Crores for the year ended March 31, 2014 includes Provision for diminution in Investments value of certain subsidiaries of (86.65) Crores, Additional Transmission charges as per CERC order relating to one of the Subsidiary of (91.71) Crores and Borrowing cost reduction due to sacrifice by Bankers, Reversal of promoter directors salary and net of CDR expenses on implementation of CDR of ` (0.90) Crores.

37 (a) On March 30, 2012, the Company has put in place two level power holding company structure wherein Lanco Power Limited (LPL) a wholly owned subsidiary of the Company as the power holding vehicle for the Group. LPL has further two wholly owned subsidiaries namely Lanco Thermal Power Limited(LTPL) and Lanco Hydro Power Limited (LHPL) as thermal power holding company and hydro power holding company respectively.

(b) As approved by the members vide their resolution dated March 19, 2010 the Company has sold its shareholding in some of its Subsidiaries and Associate Companies (hereinafter referred as ‘related entities’) to its wholly owned step down subsidiaries i.e. Lanco


166

Thermal Power Limited, Lanco Hydro Power Limited and to an associate, Regulus Power Private Limited (an erstwhile subsidiary)

on March 30, 2012 for total cash consideration amounting to ` 6,815.51 Crores. As of March 31, 2015 ` 1,385.07 (March 31, 2014 `

2,644.22) Crores representing the balance amount of consideration for sale of shares is receivable from the above entities.

(c) As a result of the above change, one of the associate company namely Lanco Babandh Power Limited, consequent to the sale of its

equity shares to an associate i.e. Regulus Power Private Limited, has become an associate of an associate.

(d) The aforesaid transfer of shares in various subsidiaries and associates requires lenders / customer approvals. Pending the receipt

of approvals, the Company has recorded the sale of investments in related entities in the financial statements. Up to the year

ended March 31, 2015, the management has obtained approvals from the most of the lenders and the management is confident

of receiving the residual approvals and share transfer is in progress. In case such approvals are not received, the loans given by

the lenders to the respective related entities may become due if the Company still wants to pursue transfer of shares, or the sold

investments will be purchased back by the company. Based on legal advice, the management is of the opinion that they have

complied with relevant laws and regulations.

38 The audit for the current financial year ended March 31, 2015 pertaining to LRIPL & its subsidiaries is under progress. Accordingly total

assets of ` 6,874.58 Crores as at March 31, 2015, the total revenue of ` 565.81 Crores and net loss of ` 946.62 Crores for the year ended

March 31, 2015, have been taken from the financials prepared by the management under Indian GAAP.

39 Managerial remuneration paid during the year aggregating to `1.69 Crores is in excess of the permissible limits of remuneration payable

under the provisions of the Companies Act, 2013 read with rules notified thereon. The Company approached the Central Government

seeking its approval for payment of such remuneration in excess of limits and the Central Government in this regard directed the

company to obtain a no objection from the CDR lenders for granting required approval. The Company is in the process of seeking the

required no objection from lenders, pending the same no adjustments have been made in these consolidated financial statements.

40 The Group has selected the option given in paragraph 46A of the Accounting Standard – 11,The Effects of Changes in Foreign Exchange

Rates with effect from April 1, 2011. On availment of option, foreign exchange difference remains unamortized as on March 31, 2015 is

` 1,641.48 (March 31, 2014 : `1,036.84) Crores.

41 As at March 31, 2015 the Group has receivables from various State Electricity Utility companies and other customers for sale of power

aggregating to `2,626.77 Crores, net current liabilities of ` 2,582.93 Crores and current maturities of long term borrowings ` 1,517.48

Crores. Based on internal assessment and various discussions had with the customers, the management is confident of recovery of

receivables. At present the Group’s operating assets are not generating envisaged revenues on account of various factors beyond the

control of the company, such as short supply of coal, non availability of gas, pending tariff clarity and delayed payments from the

customers is posing challenges for meeting the cash flow needs. However the Group has actively engaged in resolving in each of the

aspects associated with the respective revenue generating units by effectively addressing the core issues which would enable a quick

turnaround in the situation and the management is confident that the efforts would result in the operating units generating positive

cash flows. The approved CDR scheme of the Company, the recent lenders approvals of the cost overrun proposals for the projects under

construction and the aspects like inviting strategic investors, disposal of assets would also bring in the additional cash flows into the

system. Cumulatively, the Group is confident that the initiatives narrated above would address the bottlenecks and make the operating

units viable, augmenting the construction and EPC activity to normal level and thus does not foresee any eventual cash flow mismatch

in terms of meeting its financial obligations including that of to the lenders, vendor and others and also will have adequate cash flows

to support the implementation of ongoing projects which are capitalising interest and expenses during the period of construction

including the current low level period of construction.

42 Employee Benefits

Defined Benefit Plans

The Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on

departure at 15 days salary (last drawn salary) for each completed year of service. In certain subsidiaries the scheme is funded with an

insurance company in the form of a qualifying insurance policy.


167

The following table summarizes the components of net benefit expense recognised in the Statement of Profit and Loss / Capital Work in Progress / Intangible Assets Under Development and amounts recognised in the Balance Sheet for the respective plans.

(` Crores)

Gratuity

March 31, 2015 March 31, 2014

Net Employee benefit expense recognized in the employee cost

Current service cost 3.99 3.51

Interest cost on benefit obligation 1.69 1.55

Expected return on plan assets (0.25) (0.24)

Net actuarial (gain)/loss recognized in the year 1.10 (1.43)

Net benefit expense 6.53 3.39

Actual Return on the plan assets

Balance Sheet

Benefit asset/liability

Present value of defined benefit obligation 25.02 19.43

Fair value of plan assets 3.15 2.84

Plan asset / (liability) (21.87) (16.59)

Change in the present value of the defined benefit obligation

Opening defined benefit obligation 19.43 19.17

Current service cost 3.99 3.51

Interest cost 1.69 1.55

Actuarial (gain) / loss on obligation 1.25 (1.61)

Benefits paid 0.73 (3.48)

Changes due to inclusion of subsidiaries 0.27 -

Changes due to disposal of subsidiaries (0.18) -

Benefit transferred in (0.37) 0.96

Benefit transferred Out (1.79) (0.67)

Closing defined benefit obligation 25.02 19.43

Change in the fair value of plan assets

Opening fair value of plan assets 2.84 2.57

Expected return 0.25 0.24

Contributions by employer 0.33 0.25

Benefits paid (0.42) (0.04)

Actuarial gain/(loss) 0.15 (0.18)

Closing fair value of plan assets 3.15 2.84

Investment details of the plan assets

Investment with Insurer 100% 100%

Assumptions

Discount Rate (%) 8.00 8.79

Estimated Rate of Return on Plan Assets 9.00 9.00

Attrition Rate 19.00 19.00

Expected rate of salary increase (%) 6.00 6.00

Expected Average Remaining Service (years) 17.74 to 28.94 18.00 to 30.56

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

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.


168

Amount of defined benefit plan for the current and previous four periods are as follows

(` Crores)

Present value of Defined benefit

obligation

Surplus/(deficit) Experience adjustments on plan liabilities

Experience adjustments on

plan assets

March 31, 2015 25.02 (21.87) (1.10) -

March 31, 2014 19.43 (16.59) 1.43 -

March 31, 2013 19.17 (16.60) 3.52 -

March 31, 2012 20.43 (17.98) 1.41 -

March 31, 2011 16.51 (15.60) 0.77 -

Defined Contribution PlansIn respect of the defined contribution plan (Provident fund), an amount of `11.92 Crores (March 31,2014 : ` 12.29 Crores ) has been recognized as expenditure in the Statement of Profit and Loss / Capital Work in Progress.

Other Employee Benefits

During the year the Group has reversed Retention Bonus of ` (1.07) (March 31, 2014 : `(6.47)) Crores .

The provision for compensated absences as per actuarial valuation as at March 31, 2015 is ` 46.50 (March 31, 2014 : ` 41.48) Crores

43 Employee Stock Option SchemeThe Company has till March 31, 2015 allotted 1.11 Crores (March 31, 2014: 1.11 Crores ) equity shares of `10 each to LCL Foundation (ESOP - Trust) towards the Employee Stock Option Plan 2006 (The plan) which was formulated by the Company. The plan provides for grant of stock options of equity shares of the Company to employees of the Company and its subsidiaries subject to continued employment with the Company or Group.

Each option comprises of one equity share which will vest on annual basis at 20% each over five years and shall be capable of being exercised within a period of ten years from the date of first annual vesting.

Each option granted under the above plans entitles the holder to one equity share of the Company at an exercise price, which is approved by the Compensation Committee.

The plan is in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Stock Purchase Scheme) Guidelines, 1999.

Consequent to the splitting of Equity Share of `10 each into 10 equity shares of `1 each in the year 2009-10, the number of shares allotted to the trust and the options granted, forfeited, exercised are disclosed at `1 each.

A summary of the status of the Company’s plan is given below:


No. Crores Weighted Average

Exercise Price (`)

No. Crores Weighted Average Exercise

Price (`)

Outstanding at the beginning of the year 0.65 0.24 2.37 0.24

Granted during the year - - - -

Forfeited during the year (0.06) - (0.22) -

Exercised during the year (0.08) 0.24 (1.50) 0.24

Expired during the year - - - -

Outstanding at the end of the year 0.51 0.24 0.65 0.24

Exercisable at the end of the year 0.42 0.24 0.37 0.24

The weighted average share price for the period over which stock options were exercised was ` 6.26 (March 31, 2014 ` 6.74)


169

The details of exercise price for stock options outstanding at the end of the year are:

March 31, 2015

Grant No. (Grant Date) Range of Exercise Price

Number of Options


Weighted average remaining

contractual life of options (in years)

Weighted average

exercise price

Grant 1 (24.06.2006) 0.24 0.00 - 0.24

Grant 2 (02.07.2007) 0.24 0.10 - 0.24

Grant 3 (26.09.2007) 0.24 0.01 - 0.24

Grant 4 (24.04.2008) 0.24 0.04 - 0.24

Grant 5 (04.07.2008) 0.24 0.08 - 0.24

Grant 6 (01.11.2008) 0.24 0.00 - 0.24

Grant 7 (19.02.2009) 0.24 0.01 - 0.24

Grant 8 (29.07.2009) 0.24 0.07 0.33 0.24

Grant 9 (27.01.2010) 0.24 0.02 0.83 0.24

Grant 10 (30.04.2010) 0.24 0.02 1.08 0.24

Grant 11 (13.08.2010) 0.24 0.15 1.37 0.24

Grant 12 (12.11.2010) 0.24 0.01 1.62 0.24

0.51

March 31, 2014

Grant No. (Grant Date) Range of Exercise Price

Number of Options


Weighted average remaining

contractual life of options (in years)

Weighted average

exercise price

Grant 1 (24.06.2006) 0.24 0.01 - 0.24

Grant 2 (02.07.2007) 0.24 0.10 - 0.24

Grant 3 (26.09.2007) 0.24 0.01 - 0.24

Grant 4 (24.04.2008) 0.24 0.04 0.07 0.24

Grant 5 (04.07.2008) 0.24 0.09 0.26 0.24

Grant 6 (01.11.2008) 0.24 0.01 0.59 0.24

Grant 7 (19.02.2009) 0.24 0.01 0.89 0.24

Grant 8 (29.07.2009) 0.24 0.11 1.33 0.24

Grant 9 (27.01.2010) 0.24 0.03 1.83 0.24

Grant 10 (30.04.2010) 0.24 0.02 2.08 0.24

Grant 11 (13.08.2010) 0.24 0.21 2.37 0.24

Grant 12 (12.11.2010) 0.24 0.01 2.62 0.24

0.65

The Group has calculated the compensation cost based on the intrinsic value method i.e. the excess of previous closing price of underlying equity shares on the date of the grant of options over the exercise price of the options given to employees under the employee stock option schemes of the Group and is recognised as deferred stock compensation cost and is amortised on a straight line basis over the vesting period of the options. The Group is using Black Sholes Model for calculating fair values of ESOP granted for determining impact of the fair value method of accounting of employee compensation in financial statement, the impact on net income and earnings per share is provided below:


170

March 31, 2015 March 31, 2014

Particulars

Net Income - As reported ` Crores (2,036.74) (2,273.88)

Add: ESOP Cost under Intrinsic Value Method ` Crores 4.37 6.35

Less : ESOP Cost under Fair Value Method (Black Sholes) ` Crores 4.47 7.03

Net Income – Proforma ` Crores (2,036.85) (2,274.56)

Basic Earnings per Share:

As reported (8.58) (9.68)

Proforma (8.58) (9.68)

Diluted Earnings per Share:

As reported (8.58) (9.68)

Proforma (8.58) (9.68)

The weighted average fair value of stock options granted during the year was N/A (Previous Year N/A) of share of Re.1 each.

Assumptions:- March 31, 2015 March 31, 2014

Weighted average share price (in `) NA NA

Exercise Price (in `) NA NA

Expected Volatility NA NA

Historical Volatility NA NA

Life of the options granted (Vesting and exercise period) in years NA NA

Expected dividends (in `) NA NA

Average risk-free interest rate NA NA

Expected dividend rate NA NA

44 Leases

Finance Lease : As lessee

Assets acquired on finance lease mainly comprise Plant & Machinery which are used specifically for mining activities. The leases are non cancellable and non renewable. There is no escalation clause and majority of the lease expires in next 12 months.

The minimum lease rentals payable for the assets acquired under Finance Lease agreement and the present value of these rentals are as under:-

(` Crores) March 31, 2015 March 31, 2014

Minimum Lease Payments

Present Value of MLP

Minimum Lease Payments

Present Value of MLP

Future minimum lease payments and their present valuesNot later than one year 2.86 2.65 32.77 30.39 Later than one year and not later than five years - - 1.74 1.60 Later than five years - - - -

2.86 2.65 34.51 31.99 Less : Future finance charges 0.21 - 2.52 - Present value of Minimum Lease Payments 2.65 2.65 31.99 31.99


171

Operating Lease : As lessee

The Group has entered into certain cancellable and non-cancellable operating lease agreements mainly for office premises. The lease rentals charged during the year and maximum obligations on long-term non-cancellable operating leases payable as per the agreements are as follows:-

(` Crores) March 31, 2015 March 31, 2014

Lease rentals charged during the year Under Cancellable Leases 16.35 22.53 Under Non-Cancellable Leases 5.98 9.07

Future minimum lease payments under Non Cancellable LeasesNot later than one year 4.61 3.97 Later than one year and not later than five years 4.11 2.01 Later than five years 0.40 0.28

There are no contingent rents in the lease agreement. The lease term is for 1 – 5 years and is renewable at the mutual agreement of both the parties. There is no escalation clause in the lease agreements (other than those disclosed above). There are no restrictions imposed by lease arrangements.

Operating Lease : As lessor

One of the entity in the group has given buildings on operating lease. The lease rentals receivables during the year and maximum outstandings on long term non- cancellable operating leases receivables as per the agreements are as follows :-

(` Crores)

March 31, 2015 March 31, 2014

Future minimum lease rentals receivable under Non Cancellable Leases

Not later than one year 4.40 0.22

Later than one year and not later than five years 9.66 5.35

45 Segment ReportingThe details of primary segment information for the year ended March 31, 2015 and March 31, 2014 are given below:

a) The segment report of LITL and its subsidiaries (the Group) has been prepared in accordance with Accounting Standard 17 ”Segment Reporting” as notified.

b) The Group is currently focused on five business segments: EPC and Construction, Power, Property Development, Infrastructure and Resources.

c) In respect of secondary segment information, the Group has identified its geographical segments as (i) India, (ii) Singapore, (iii) Australia & (iv) Others. The secondary segment information has been disclosed accordingly.

d) The business segments of the Group comprises of the following:

Segment Details of Business

EPC and Construction Construction of Industrial, Residential & Commercial Buildings and Roads etc., Engineering, Procurement and Commissioning (EPC)

Power Generation of power and trading in power

Property Development Development of integrated properties comprising of commercial and residential buildings

Infrastructure Development of roads on Build, Operate and Transfer basis and other infrastructure

Resources Exploration, mining and marketing of coal

Others Residual activities

e) For the purpose of reporting, business segments are primary segments and the geographic segment is a secondary segment.


172

f) Segment wise Name of Companies

1 EPC and Construction 1 Lanco Infratech Limited 4 Lanco Enterprise Pte Limited (China)2 Lanco Solar Energy Private Limited 5 Lanco Solar International Pte Limited3 Lanco International Pte Limited

2 Power1 Lanco Infratech Limited 25 Omega Solar Projects Private limited 2 Lanco Power Limited 26 Lanco Wind Power Private Limited 3 Lanco Thermal Power Limited 27 Amrutha Power Private Limited 4 Lanco Kondapalli Power Limited 28 Spire Rotor Private Limited 5 Lanco Tanjore Power Company Limited 29 Emerald Orchids Private Limited 6 Lanco Amarkantak Power Limited 30 JH Patel Power Project Private Limited 7 Arneb Power Private Limited 31 National Energy Trading and Services Limited 8 Udupi Power Corporation Limited 32 Portia Properties Private Limited9 Lanco Anpara Power Limited 33 Lanco Infratech Nepal Private Limited10 Lanco Hydro Power Limited 34 Lanco Power International Pte Limited11 Lanco Teesta Hydro Power Limited 35 Lanco Solar Holding Netherland B.V Utrecht12 Lanco Budhil Hydro Power Private Limited * 36 SolarFi SP 07*13 Lanco Mandakini Hydro Energy Private Limited 37 SolarFi SP 06*14 Lanco Rambara Hydro Power Private Limited 38 Lanco Solar International Limited *15 Diwakar Solar Projects Limited 39 Lanco Solar International GMBH*16 Lanco Solar Services Private Limited 40 Lanco Solar International US Inc.17 Lanco Solar Private Limited 41 Lanco IT PV Investments B.V.18 Khaya Solar Projects Private Limited 42 Green Solar SRL 19 Bhanu Solar Projects Private Limited 43 Lanco US PV Investments B.V.*20 Lanco Solar Power Projects Private Limited 44 Lanco Solar Holdings, LLC (USA)*21 Orion Solar Projects Private Limited 45 Lanco Virgin Islands- 1 LLC*22 Pasiphae Power Private Limited 46 Lanco SP PV 1 Investments B.V.*23 Sabitha Solar Projects Private Limited 47 Bhola Electricity Private Limited24 Helene Power Private Limited 48 Sirajganj Electric Private Limited

3. Property Development 1 Lanco Hills Technology Park Private Limited 9 Nix Properties Private Limited 2 Uranus Projects Private Limited 10 Cordelia Properties Private Limited 3 Jupiter Infratech Private Limited 11 Deimos Properties Private Limited 4 Uranus Infratech Private Limited 12 Dione Properties Private Limited 5 Leda Properties Private Limited 13 Neptune Projects Private Limited6 Coral Orchids Private Limited 14 Pearl Farms Private Limited 7 Thebe Properties Private Limited 15 Telesto Properties Private Limited 8 Cressida Properties Private Limited

4. Resources 1 Lanco Resources International Pte Limited 5 Western Australia Coal Terminal Pty Ltd2 Lanco Resources Australia Pty Limited 6 Mahatamil Mining and Thermal Energy Limited 3 The Griffin Coal Mining Company Pty Limited 7 Tasra Mining & Energy Company Private Limited4 Carpenter Mine management Pty Limited

5 Infrastructure 1 Lanco Infratech Limited 4 Mercury Projects Private Limited 2 Lanco Hoskote Highway Limited 5 Lanco Kanpur Highways Limited3 Lanco Devihalli Highways Limited

6 Others1 LE New York - LLC 3 P.T Lanco Indonesia Energy2 Lanco Holding Netherland B.V 4 Lanco Infratech (Mauritius) Limited

* During the year these companies had been sold / closed


173

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174

46 Related Party Transactions

a) Name of the related parties and description of relationship:Relation S. No. Related Party NameHolding Company 1 Lanco Group Limited (LGL) Fellow Subsidiary 1 Lanco Babandh Power Limited (LBPL) Enterprises where Significant Influence Exists

1 Ananke Properties Private Limited (AnPPL)2 Avior Power Private Limited (AvPPL)3 Basava Power Private Limited (BPPL)4 Bay of Bengal Gateway Terminal Private Limited (BBGTPL)5 Belinda Properties Private Limited (BePPL)6 Bianca Properties Private Limited (BiPPL)7 Charon Trading Private Limited (CTPL)8 DDE Renewable Energy Private Limited (DREPL)9 Electromech Maritech Private Limited (EMPL)10 Finehope Allied Engg. Private Limited (FAEPL)11 Genting Lanco Power (India) Private Limited (GLPIPL)12 Himavat Power Limited (HPL)13 KVK Energy Ventures Private Limited (KEVPL)14 Lanco Vidarbha Thermal Power Limited (LVTPL)15 Mimas Trading Private Limited (MTPL)16 Mirach Power Limited (MiPL)17 Newton Solar Private Limited (NSPL)18 Phoebe Trading Private Limited (PTPL)19 Pragdisa Power Private Limited (PrPPL)20 Regulus Power Private Limited (RPPL)21 Saidham Overseas Private Limited (SOPL)22 Siddheswara Power Private Limited (SPPL)23 Tethys Properties Private Limited (TPPL)24 Vainateya Power Private Limited (VPPL)25 Vasavi Solar Power Private Limited (VSPPL)26 Lanco Devihalli Highways Limited (LDHL) (upto March 31, 2014)27 Lanco Hoskote Highways Limited (LHHL) (upto March 31, 2014)

Key Management Personnel 1 Sri L. Madhusudhan Rao (Chairman) (LMR)2 Sri G. Bhaskara Rao (Vice Chairman) (GBR)3 Sri G. Venkatesh Babu (Managing Director) (GVB)4 Sri S.C. Manocha (Whole Time Director) (SCM)

Relatives of Key Management Personnel

1 Sri L.Sridhar (Brother of LMR) (LS)

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

1 Chatari Hydro Power Private Limited (CaPTL)2 Cygnus Solar Projects Private Limited (Formerly Callisto Trading Private Limited.) (Csppl)3 Himachal Hydro Power Private Limited (HHPPL)4 Lanco Bay Technology Park Private Limited (LBTPL)5 Lanco Enterprise Private Limited (LEntPL)6 Lanco Foundation (LF)7 Lanco Horizon Properties Private Limited (LHrPPL)8 Lanco Kerala Seaports Private Limited (LKSPL)9 Lanco Transport Network Company Private Limited (LTNCPL)10 LCL Foundation (LCL)11 Nekkar Power Private Limited (NePPL)12 Ravi Hydro Electric Private Limited (RHEPL)13 Lanco Rani Joint Venture (LR)


175


Nature of Transaction

March 31,2015Holding Company Fellow Subsidiary Enterprises

where Significant Influence Exists



Personnel

Enterprises owned or significantly influenced by



Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Contract Services / Shared Services Provided/(Availed)

LBPL 1.10 HPL 0.55 LF 0.46

Interest Paid/(Received)

DREPL (0.75)KEVPL (2.82)FAEPL (1.54)VSPPL (3.10) NSPL (1.36) EMPL (2.57)

SOPL 0.62 (11.52)

Donations Paid LF 2.10 Managerial Remuneration

GVB 4.20 SCM 2.23 GBR 0.88 LMR 0.81

8.12 Sitting Fee LMR 0.01 LS 0.02 Receipts/Payments/Adjustments (Net)+(-)

LBPL (165.31) HPL 261.05 GVB (0.01) HHPPL (0.12) PTPL 0.05 SCM (0.01) LR (2.44) LVTPL (72.83) RHEPL (0.34)

LF (0.60) LBTPL (0.33)

(165.31) 188.27 (0.02) (3.83)Purchase/(Sale) of Shares

AnPPL 46.85 BiPPL 46.85 TPPL 46.85 BePPL 38.50 PrPPL 10.65 AvPPL 0.01

- 189.71 Share Application Money Paid/Shares allotted during the year

LBPL 94.37 LVTPL 85.94 CaPTL 0.13 HPL 1.75 VPPL 0.04 AnPPL 0.01 CTPL 5.75

94.37 93.47 0.13 Share application money refunded during the year

LVTPL 11.72


176

(` Crores)Nature of

Transaction March 31,2015

Holding Company Fellow Subsidiary Enterprises where Significant

Influence Exists



Personnel




Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Operation & Maintenance Services Rendered / (Availed)

GLPIPL (15.42) DREPL 0.36 EMPL 0.36 FAEPL 0.36 NSPL 0.36 SOPL 0.36 VSPPL 0.36

(13.26)Other Expenses/(Incomes)/(Recoveries)

LBPL (0.16) LVTPL 0.02

Loan and Advances taken during the year

LGL 15.06

Purchase of Fixed Assets

LBPL 0.01 HPL 0.00

Corporate Guarantee given to Banks / Financial Institutions on behalf of Related Parties (balance as at the year end)

LBPL 4,064.65 HPL 262.50

SOPL 50.89 KEVPL 50.73 DREPL 42.38 FAEPL 31.69 VSPPL 31.69 NSPL 28.44 EMPL 28.44

4,064.65 526.76 Balance Receivable at the year end-Share Application Money

CaPTL 0.03

Balance Receivable at the year end - Loans

DREPL 5.48 LEntPL 70.26 EMPL 18.67 FAEPL 11.17 NSPL 9.87 VSPPL 23.69

68.88 70.26 Balance Receivable at the year end-Others (Trade Receivables, Interest receivable and Other Receivables)

LBPL 208.95 LVTPL 53.63 LR 11.57 HPL 2.77 LF 0.52 VPPL 1.34 LHrPPL 0.02

CTPL 0.01 CSPPL 0.00 KEVPL 60.27 LTNCPL 0.00 DREPL 1.64 LKSPL 0.00 EMPL 3.54 FAEPL 2.40 SOPL 0.43 VSPPL 4.85 NSPL 2.01

208.95 132.89 12.11


177

(` Crores)Nature of



Influence Exists



Personnel




Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Balance Payable at the year end-Loans LGL 167.06 SOPL 5.22 Balance Payable at the year end-Others (Trade Payables, Capital advances and Other Payables)

LBPL 1,599.92 LVTPL 930.58 SCM 0.01 LR 0.89 HPL 494.57 GVB 0.01 LF 0.17 KEVPL 239.18 LHrPPL 0.07 AnPPL 46.85 LCL 0.14 BiPPL 46.85 TPPL 46.85 BePPL 38.50 GLPIPL 14.76 PrPPL 4.21 PTPL 0.89 AvPPL 0.01 SOPL 0.74 NSPL 0.02 EMPL 0.06

1,599.92 1,864.07 0.02 1.27

(` Crores)Nature of



Influence Exists



Personnel




Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount


LBPL 13.86 LHHL 18.76 LF 2.52 KEVPL 14.74

13.86 33.50 2.52 Shared Services Provided

LBPL 1.04 HPL 0.52

Interest Paid/ (Received)

KEVPL (0.94) LEnt PL (3.60) NSPL (2.16) DREPL (2.33) FAEPL (2.60) EMPL (2.63) SOPL (2.86) VSPPL (3.26) LDHL (7.11) LHHL (26.41)

(50.30) (3.60)Donations Paid LF 2.44 Managerial Remuneration

GVB 4.09 SCM 1.89 GBR 0.86 LMR 0.79

7.63


178

(` Crores)Nature of



Influence Exists



Personnel




Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Sitting Fee LMR 0.01 LS 0.03 Receipts/Payments/Adjustments (Net)+(-)

LBPL (59.63) PrPPL 304.31 GBR 0.01 LEntPL 8.47 VPPL 290.59 LR (0.89) OTHERS (3.61) LF (0.40)

(59.63) 591.29 0.01 7.18 Purchase / (Sale) of Shares

HPL 12.04 GBR 0.01 LS 0.01 RPPL 0.86 LVTPL 0.02

12.92 0.01 0.01 Share Application Money Paid / (Received) during the year

LBPL 99.66 LVTPL 13.64 LDHL 6.82 OTHERS 1.37 SOPL (3.66) DREPL (10.40)

99.66 7.77 Share Application Money Refunded during the year

PrPPL 304.31 VPPL 290.59

594.90 Management Consultancy Services Rendered

LHHL 1.53 LDHL 1.28

2.81 Operation & Maintenance Services Rendered / (Availed)

DREPL 0.35 EMPL 0.35 FAEPL 0.35 NSPL 0.35 SOPL 0.35 VSPPL 0.35 GLPIPL (18.90)

(16.80)Other Expenses / (Incomes) / (Recoveries)

LBPL 0.09 LVTPL 0.11

Purchase of Goods LEntPL 2.84 Loans given / novated from (taken / refunded) during the year

LGL (152.00) LHHL 135.72 LEntPL 62.75 LDHL 53.97

(152.00) 189.69 62.75

Purchase of Fixed Assets

LBPL 0.01 LDHL 0.26 LVTPL 0.04 HPL 0.00

0.01 0.30 Sale of Fixed Assets LBPL 0.01 LDHL 0.63

LHHL 0.44 HPL 0.11 LVTPL 0.06

0.01 1.24


179

(` Crores)Nature of



Influence Exists



Personnel




Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount Party Name

Amount

Corporate Guarantee given to Banks / Financial Institutions on behalf of Related Parties (balance as at the year end)

LBPL 3,646.08 HPL 450.00 LHHL 125.00 LDHL 92.03 OTHERS 303.14

3,646.08 970.17

Balance Receivable at the year end-Share Application Money

VPPL 15.21 NePPL 0.08 PrPPL 10.65 CaPTL 0.16 OTHERS 0.60

26.46 0.24Balance Receivable at the year end - Loans

LHHL 164.20 LEntPL 62.75 LDHL 53.97 VSPPL 23.70 EMPL 18.66 FAPPL 11.17 NSPL 9.87 DREPL 5.48

287.05 62.75 Balance Receivable at the year end-Others (Trade Receivables, Interest receivable and Other Receivables)

LBPL 202.78 LVTPL 69.26 LR 14.02 LHHL 68.69 LEntPL 4.15 KEVPL 53.88 OTHERS 1.51 VSPPL 3.48 EMPL 1.35 DREPL 0.94 FAPPL 0.94 NSPL 0.68 SOPL 0.36 CTPL 0.02 OTHERS 12.32

202.78 211.92 19.68 Balance Payable at the year end - Loans

LGL 152.00 SOPL 5.22

Balance Payable at the year end-Others (Trade Payables, Capital advances and Other Payables)

LBPL 1,525.06 LVTPL 933.15 SCM 0.00 LR 0.90 HPL 756.71 GVB 0.00 LF 0.22 KEVPL 248.34 LCL 0.14 GLPIPL 14.79 LHrPPL 0.07 VSPPL 1.14 FAPPL 0.07 NSPL 0.07 EMPL 0.07 LDHL 0.05 LHHL 0.01 OTHERS 5.16

1,525.06 1,959.56 0.00 1.33


180

47 Forward Contracts

(` Crores) Particulars March 31, 2015 March 31, 2014

Details of Forward Cover for amount outstanding as on Balance sheet dateFor Buy (Hedge for foreign currency loan repayment) USD 405.40 571.03 Details of Forward Cover for Firm Commitments and highly probable forecast transactionFor Sale (Against AUD) USD - 856.61 Currency Swaps (Against CNY) USD - 55.83

Details of Unhedged Foreign Currency Exposure Currency March 31, 2015Exchange Rate Amount in

Foreign Currency (Crores)


Trade Payables EURO 67.51 0.08 5.19 Trade Payables USD 62.59 9.37 586.53 Secured foreign currency loans (Buyers Credit) USD 62.59 14.60 913.75 Secured foreign currency term loans including interest USD 62.59 85.06 5,324.15 Advance from Customers USD 45.17 23.26 1,050.76 Trade receivables USD 62.59 7.99 499.97 Advances Recoverable in Cash or in kind (Advance to Supplier)

USD 53.71 0.03 1.50

Advances Recoverable in Cash or in kind (Advance to Supplier) EURO 67.51 0.007 0.48 Net Exposure 7,378.43

Details of Unhedged Foreign Currency Exposure Currency March 31, 2014Exchange Rate Amount in

Foreign Currency (Crores)


Trade Payables EURO 82.58 0.08 6.71 Trade Payables USD 60.10 9.39 570.09 Secured foreign currency loans (Buyers Credit) EURO 82.58 0.19 15.73 Secured foreign currency loans (Buyers Credit) USD 60.10 44.33 2,664.43 Secured foreign currency term loans including interest USD 60.10 69.89 4,200.42 Advance from Customers USD 45.15 23.08 1,042.17 Trade receivables USD 60.10 10.57 635.50 Advances Recoverable in Cash or in kind (Advance to Supplier) USD 44.94 0.01 0.46 Advances Recoverable in Cash or in kind (Advance to Supplier) EURO 68.18 0.00 0.17 Advances Recoverable in Cash or in kind (Advance to Supplier) GBP 86.45 0.00 0.05 Net Exposure 7,863.37

48 Movement in Provisions

(` Crores) Particulars March 31, 2015

Mine Restoration

Operations & Maintenance

Warranties

(a) Balance as on 01.04.2014 197.36 11.26 445.05 (b) Additional Provision on account of new subsidiary /made during the year - 33.54 (1.38)(c) Provision reversed/used during the year (0.14) - - (d) Foreign exchange rate variation (28.63) - 18.43 (e) Balance as on 31.03.2015 (a+b-c+d) 168.87 44.80 462.10


181

(` Crores) Particulars March 31, 2014

Mine Restoration Operations & Maintenance

Warranties

(a) Balance as on 01.04.2013 290.67 23.83 351.60 (b) Additional Provision made during the year - - 56.54 (c) Provision reversed/used during the year 90.20 12.57 - (d) Foreign exchange rate variation (3.11) - 36.91 (e) Balance as on 31.03.2014 (a+b-c+d) 197.36 11.26 445.05

49 Capital and Other Commitments(` Crores)

March 31, 2015 March 31, 2014Estimated amount of contracts remaining to be executed on capital account and not provided for 14,892.07 21,015.46 Investment Commitment in Associates 2,425.28 2,327.34 Contractual obligations for purchase of coal under fuel supply agreement 117.10 117.10 Commitments under fuel supply agreement 41.74 41.74 Contractual obligation for Long Term Access for transmission of power 42.90 42.90 Deferred Purchase consideration payable 5.50 5.50

Capital commitments mentioned above is inclusive of Engineering, Procurement and Construction (EPC) Contracts which are under revision and this commitment may undergo change.

50 Contingent Liabilities - Not probable and therefore not provided for

(A) Claims disputed by Group * (` Crores) March 31, 2015 March 31, 2014

Duty Draw Back ^ - 7.28 Custom Duty 323.71 323.71 Sales tax Liability 208.35 8.37 Service tax Liability 140.23 121.45 Income tax Liability 280.22 11.50 Construction Cess under Building and Other Construction Workers Act, 1996 1.16 3.45 Claims against the Group not acknowledged as debt 1,273.17 190.07

^ It pertains to the LBHPPL which is sold during the year, Pursuant to the demand notices received on refund of excess duty draw back from the office of Director General of Foreign Trade (DGFT) dated May 26, 2011, August 04, 2011 and September 08, 2011. LBHPPL has made its representation on January 19, 2012 requesting to give opportunity of being heard. Pending the status of the same and based on the estimation of the management no provision is made in the books of account.

* The Group has internally assessed and / or been advised that the demands or claims are likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

(B) Company’s share of contingent liabilities of associate companies is `0.08 (March 31, 2014: `3.14) Crores.

(C) Bond for SEZ - In case of LSPL, Bond Cum Legal Undertaking for Special Economic Zone (SEZ) has been entered between LSPL and President of India acting through the Development Commissioner of Visakhapatnam SEZ and the Special Officer for `171.24 Crores. As per the terms and conditions of the Bond cum Legal Undertaking, LSPL shall be obligated to pay all duties chargeable on the goods imported if LSPL carries any operations other than authorized operations as per SEZ Act 2005. The amount of utilisation till March 31, 2015 is ` 119.25 Crores.

(D) Outstanding corporate guarantees - ` 4,591.41 (March 31, 2014: ` 4,616.25) Crores.

(E) Claims not acknowledged as debts - amounts not Quantifiable

(i) In case of LKPL, with respect to the Phase I is selling electric energy under a Power Purchase Agreement (PPA) with Andhra Pradesh Power Co-ordination Committee (APPCC), APPCC has raised certain disputes regarding the installed capacity and the reduction in tariff as per the PPA which are subjudice at present. As these matters are technical and interpretational in nature, the management


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contends that it is not practicable to estimate the overall financial impact, if any, at this stage. Pending such disputes, the LKPL has recognized revenue to the extent accepted by the APPCC as in earlier years. Further, the management, based on its internal assessment and legal opinion, is confident that the above matters will be decided in its favour.

(ii) In case of LKPL, on December 15, 2005, APPCC raised a claim of liquidated damages amounting to ` 95.16 Crores towards alleged delay in commissioning of the Phase I project as stipulated in PPA by the LKPL and has unilaterally adjusted dues to extent of `46.25 Crores from the monthly tariff bill dated December 12, 2005 against this claim. On June 13, 2011, APERC passed an order stating that there was a delay in the commissioning of the Phase I project and thus, the Liquidated damages amounted to `74.87 Crores. However, it is held that such claim by APPCC is barred by limitation. Whilst the matter stood thus, APPCC adjusted another ` 62.69 Crores against the tariff bill dated June 13, 2011 and informed the LKPL that an interest of `62.14 Crores accrued on their claim and demanded the balance amount of ` 28.07 Crores. The LKPL filed appeal with Appellate Tribunal for Electricity (APTEL) against the order dated June 13, 2011 and APTEL by its order dated January 12, 2015 allowed the appeal and directed APPCC to pay the adjusted amount with interest @ 12% per annum.

(iii) In case of LKPL, with respect to the Phase I, on September 23, 2004 the Andhra Pradesh Transmission Corporation (APTRANSCO) has informed the LKPL that by oversight or mutual mistake, wrongly calculated the tariff ignoring the stipulation imposed by Central Electricity Authority and claimed a refund of 224.00 Crores and bills will be paid at lower rate for future supplies. The LKPL has filed a petition in City Civil Court, Hyderabad for injunction orders. The Civil City Court allowed the petition by granting injunction on September 8, 2008 in favour of the LKPL. Later APTRANSCO filed an appeal in High Court of Andhra Pradesh against the injunction order of City Civil Court and the same is pending. Further, the management based on the legal opinion, is confident that the above matter will be decided in its favour.

(iv) In case of Griffin Coal Mining Company Pty Ltd (GCM), a claim by Griffin Windfarm Holdings Pty Ltd (Griffin Windfarm) against Griffin Coal for compensation for mining claimed to be occurring on a coal mining lease that overlays land owned by Griffin Windfarm. Griffin Windfarm used to be a related entity until Lanco Resources Australia acquired Griffin Coal. Griffin Coal maintains that any activity that may have occurred in the relevant area was done with the consent and agreement of Griffin Windfarm. Griffin Coal and the liquidators for Griffin Windfarm (Pricewaterhouse Coopers) have been engaged in discussions and subsequently are formalising an agreement with Griffin Windfarm which will result in this claim being dismissed permanently.

51 In case of LKPL, on March 13, 2012, APERC passed an order that the LKPL is entitled for reimbursements of Minimum Alternate Tax (MAT) for the periods April 2006 and onwards with consequential reliefs i.e. with interest at the rate prescribed in the PPA till the realization of the said amount. Pending acceptance by the Board, the revenue in respect of MAT reimbursements from April 2001 have been postponed. In respect of the claims prior to April 2006, the LKPL has filed an appeal before Appellate Tribunal for Electricity (APTEL) and the same was allowed in favour of LKPL. APPCC has filed an appeal before the Supreme Court and the Supreme Court has an interim arrangement as directed APPCC to pay 50% of the MAT computed by APERC for the period 2006 to 2009 directly to LKPL and remaining 50% to secure by way of Bank Guarantee. APERC also allowed the claim of the LKPL from 2009 onwards. However, the main case is pending.

52 In case of LKPL, with respect to the amounts billed by the LKPL, for sale of electrical energy and for other claims up to June 15, 2003, APTRANSCO has retained certain amounts. Recognition of this revenue has been postponed till acceptance by APTRANSCO. The LKPL has initiated proceedings in APERC for resolution of all such pending issues regarding outstanding amounts with APTRANSCO.

53 In case of LKPL,

a) Due to shortage of gas, the Phase III project could not complete the activities required for COD and operations of Phase II project are stalled. The Phase III lenders have approved the Cost Overrun funding and restructuring of the debt repayments and are in the process of approving refinance proposal for Phase II debt. The LKPL is one of the successful bidders in the recent e-Bid RLNG scheme of Ministry of Power, Government of India which enable the LKPL to operate part of its capacity.

b) During the financial year 2014-15, the LKPL has capitalised `272.21 Crores (March 31, 2014 : `169.52 Crores from 01 July, 2013 to March 31, 2014 ) of borrowing costs incurred on loans pertaining to Phase III project which is yet to complete the commissioning activities due to non-availability of required resources and fuel which are beyond the control of the LKPL. The LKPL is of the view that as the plant is not ready for commissioning, it is eligible to capitalise the borrowing cost till the completion of required commissioning activities. The Lenders of the project approved the above interest during construction as a part of the project cost. Besides this, the LKPL has also reapproached Ministry of Corporate Affairs (MCA) seeking relaxation from the applicability of provisions of Accounting Standard (AS) - 16 to continue the capitalisation of borrowing costs.

54 (a) In case of LAPL, It had entered into a Power Purchase Agreement (“PPA”) with PTC India Ltd. (PTC) for sale of power generated from its Unit II. PTC signed a Power Sale Agreement (“PSA”) with Haryana Power Generation Corporation Limited (“HPGCL”) for sale of power purchased from the LAPL. The LAPL terminated the aforesaid PPA, as PTC failed to fulfill certain conditions precedent in its


183

obligation under the PPA. PTC initiated arbitration proceedings against the aforesaid termination. PTC claimed a compensation of ` 162.55 Crores and any reimbursement towards any charge/ claim which HPGCL may claim from PTC. PTC also claimed damages from the LAPL for the loss of business due to termination of the PPA. The hearings in this matter have been completed and the award is reserved by the Arbitration Tribunal. The Management is confident of getting a favorable Arbitral Tribunal Order confirming the validity of termination of the PPA.

(b) The LAPL, thereafter, signed another PPA with Chhattisgarh State Power Trading Company Limited (“CSPTCL”) for sale of 35% of the capacity in accordance with the Implementation Agreement signed by the LAPL with the Government of Chhattisgarh. In an appeal against HERC order, APTEL vide its interim order dated March 23, 2011 directed that 35% of the power generated from LAPL’s Unit II should be sold to the state of Chhattisgarh and the balance power is to be sold to PTC.

The LAPL has been supplying power to PTC and CSPTCL w.e.f. May 07, 2011, as per interim order dated March 23, 2011 of APTEL. The LAPL filed a civil appeal along with an application for stay against APTEL final order dated November 04, 2011 in the Supreme Court. The Hon’ble Supreme Court in its order dated December 16, 2011 directed the LAPL to continue supplying electricity in terms of the APTEL interim order dated March 23, 2011. The said appeal is still pending for adjudication before the Hon’ble Supreme Court which has also stayed further proceedings of the petition filed by HPGCL before HERC challenging the termination of PPA. Further, the Hon’ble Supreme Court in its order dated December 16, 2011 also directed HERC to fix/ approve the tariff of sale and purchase of power for the period in dispute uninfluenced with any earlier orders. The LAPL had recognized revenue on the basis of CERC Tariff Regulations, 2009, whereas the payments were released by PTC (Haryana) on the basis of erstwhile PPA capped tariff rate resulting in closing receivables being higher by `195.24 Crores. APTEL in a judgement order dated January 03, 2014 directed the LAPL to file necessary details of project cost before HERC and directed it to re-determine the tariff dehorns the PPA in accordance with HERC Tariff Regulations 2008.

On January 23, 2015, HERC has re-determined the tariff as per HERC Tariff Regulations 2008 comprising of fixed charges and energy charges for FY 2011-12 to FY 2014-15. The LAPL has filed an appeal in APTEL challenging methodology followed by HERC in the computation of energy charges. The Management based upon its assessment and legal advice obtained, is confident of the outcome of the matter in its favour and recovery of the above said receivables.

(c) In terms of PPA dated January 12, 2011, the LAPL commenced supply of power to Chhattisgarh (CSPTCL) w.e.f. June 22, 2011. The said PPA with CSPTCL provides for 5% of the net power to be supplied at Energy Charges and 30% of the net power at full Tariff (Fixed Charges + Energy Charges) computed as per CERC Tariff Regulations, 2009. The LAPL had recognized revenue on the basis of CERC Tariff Regulations, 2009, whereas the payments were released by CSPTCL at an Adhoc rate resulting in closing receivables being higher by ` 20.25 Crores. The LAPL requested the Chhattisgarh State Electricity Regulatory Commission (CSERC) to adjudicate on its claim for recovery of tariff. CSERC vide its order dated December 30, 2014 has dismissed stating that the dispute between the parties could not be resolved without determination of tariff and has relied upon Section 64(5) of the Electricity Act to state that the State Commission would have the jurisdiction as power supplied by the LAPL has been utilized by the distribution licensee for meeting its requirements. The LAPL has requested CSPTCL to file a petition for determination of tariff before CSERC.

(d) South Eastern Coalfields Limited (SECL) terminated the FSA dated December 31, 2005 entered into between the LAPL and SECL and invoked the bank guarantee which has been challenged by the LAPL before the Arbitral Tribunal which held the termination and invocation as illegal & invalid. SECL challenged the order before the Hon’ble Court of District Judge Bilaspur its order dated March 11, 2013 allowed the application/objection filed by SECL & set aside the award of the Arbitral Tribunal. Being aggrieved by the order dated March 11, 2013 the LAPL filed an appeal before the Hon’ble High Court of Chattisgarh.at Bilaspur. The Hon’ble High Court vide its order dated April 25, 2013 admitted the appeal & issued notice to SECL. The appeal filed is pending for adjudication. Hearing held on May 05, 2014 & January 07, 2015. Based on the legal opinion obtained in the matter it is found that the order dated March 11, 2013 passed by the Hon’ble Court of District Judge, Bilaspur is beyond the scope of interference with an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996 as well as is contrary to the facts of the case at hand and thus is liable to be set aside. In view of the grounds raised in the appeal and the perversity of the order under challenge, the LAPL has reasonably fair chance of succeeding in the appeal.

55 The LAPL has filed writ prtition before the Hon’ble High Court of Delhi on applicability of certain norms of CERC Tariff Regulations, 2014 for Unit I. Pending disposal of the said writ petition by the Hon’ble High Court of Delhi, the LAPL continues to recognise Unit 1 revenue based on the approved tariff order dated December 01, 2012 of Madhya Pradesh Electricity Regulatory Commission (MPERC) .

56 In case of LAPL, South Eastern Coalfields Limited (SECL), in line with the policy guidelines of Ministry of Coal (MoC) that were revised from time to time, reduced the quantity of linkage coal due to which the operations of Unit II were significantly affected. The LAPL and SECL have signed FSA as per the Presidential Directive in August 2013, and thereafter linkage coal supply has been stopped stating that the PPA is sub-judice. Further, in the absence of linkage coal, the LAPL requested the Buyers to allow the power supply with alternate coal like e-auction/open market and has been declaring daily availability of the plant , however, PTC/Haryana is yet to schedule power citing higher cost of alternate coal. After HERC tariff order dated January 23, 2015, LAPL has taken up with PGCIL to provide un hindered


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transmission Access of Power on long term basis. LAPL requested PTC/Haryana to take up with Ministry of Power (MoP)/MoC/Coal India Limited (CIL) / SECL for restoration of Linkage Coal. Once Linkage Coal is restored, PTC will enable the Long Term Open Access. Meanwhile, LAPL is making efforts with MOP to get Linkage Coal supply. Management is confident of resuming Unit II operations soon.

57 In case of LAPL, the Government of India (Ministry of Power) issued a notification No.A-4/2011-IPC dated August 17, 2011 requiring all the existing eligible power projects, inter alia, to obtain Provisional Mega Project Status on satisfying certain conditions as stated in the said revised policy guideline for setting up of Mega Power Projects.

After obtaining the Provisional Mega Power Status for its under construction Units III & IV , the LAPL was required to furnish security in the form of Fixed Deposit Receipt (FDR) for an amount equal to the Customs Duty Payable on imports. As Unit III & IV original Project Cost was estimated on Mega Status basis, the LAPL approached Lenders for sanction of additional loan to meet this unexpected interim fund requirement which took quite some time and after receipt of loan sanction, the LAPL started clearing the import materials lying at port. Subsequently, the Government permitted Bank Guarantees (BG) also as a form of security and the LAPL, keeping in view the differential savings, desired to minimize the cost of Interest During Construction (IDC) by opting for furnishing of BG in the place of FDR. The imported materials reached the port and got accumulated for clearance (which carries an assessable value of `646.97 Crores as computed at current customs exchange rate) which are included under Asset Under Construction.

Further to the above, the project got delayed on account of delay in obtaining Forest Clearance for laying the Transmission Line, approval from Railways for Engineering Scale Plan (ESP) for railway siding which were beyond the control of the LAPL. The LAPL approached its Lead Lender for reappraising the project cost with cost overrun. The Lead Lender reappraised the project cost (including cost overrun ) at `10,815.24 Crores with revised SCOD of December 31, 2016. The LAPL has received the letters of sanction from all its lenders except LIC of India towards COR loan and BG facilities. The BGs sanctioned by member banks will be utilised for clearing the material lying at port & for replacement of the FDRs deposited with Customs & Excise Department and for providing guarantees required for FSA, PPA, BPTA etc. Even after considering the cost and time overrun as stated above, the project is viable keeping in view the increasing power tariffs with the ever increasing power demand.

58 In case of UPCL, Remuneration paid during the year ` 1.48 (March 31, 2014 ` 1.27) Crores to professional director needs the approval under the Companies Act. The UPCL has applied to the Central Government for the approval of such remuneration, pending the above no adjustments have been made to these financial statememts.

59 In case of UPCL, the final order for Tariff was issued by CERC on Feurary 20, 2014 applicable for the period till March 31, 2014. Appeals were filed by the Principal Buyers and the UPCL independently against the tariff order which is yet to be decided by the Appellate Tribunal.

Billing for the energy supplied during Financial Year 2014-15 is made at the tariff approved by the CERC and applicable as on March 31, 2014 for the period starting from April 01, 2014 in accordance with regulation 7(8)(i) of Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2014. The billing shall be revised as per the tariff being determined by the CERC for the period commencing from April 01, 2014 and necessary adjustments shall be made in the accounts upon the receipt of the order.

Balances representing Sundry Debtors and the amount of Sales revenue recognized are based on final tariff order issued by CERC on Feburary 20, 2014. Sundry Debtors also include as amount of ` 127.92 Crores receivable from Power Company of Karnataka Limited being the balance receivable against infirm power sales.

60 In case of LAnPL, Capital advance include an amount 8.13 Crores (Previous Year 8.13 Crores) paid to district land acquisition authorities in the state of Uttar Pradesh for acquiring land for implementation of the phase II project.

61 In case of LAnPL, Unscheduled Interchange charges has been accounted for on the estimate of the management which is amounting to ` 1.78 Crores relating to the period February & March 2015, pending invoicing of these charges from State Load Dispatch Center (SLDC). The management does not expect any material difference affecting the current year’s financial statement due to the same.

62 The LAnPL, is in the process of setting up a new project (Anpara phase-II) of 2x660 MW at Bhognipur, U.P. The land for setting up of the Plant has been acquired and most of the approvals have been received. Advance of 279.20 Crores has also been given to EPC contractor for procurement of BTG equipment. The same has been funded from equity. The approval for linkage Coal is yet to be obtained pending which the Financial Closure is yet to be completed.

63 In case of LAnPL, the plant had been operating at sub optimal levels during the stabilization phase and on account of coal & infrastructure constraints. The LAnPL has taken necessary steps and confident of improving the operating levels of the plant in future and would meet financial obligations as and when they arise. Due to non fulfillment of certain obligations by Uttar Pradesh State Power Distribution Companies (Buyers) under the PPA with the LAnPL for sale of 1,100 MW power, the LAnPL has terminated the PPA. The LAnPL exercised the option available under PPA. The LAnPL filed petition before Uttar Pradesh Electricity Regulatory Commission (UPERC) for resolution of options. UPERC had appointed independent committee to give the recommendation on the amount of compensatory tariff to enable the plant operation to be viable. The committee has already submitted its report to commission as on March, 2015. The management is confident of realising the carrying value of assets in the books.


185

64 In case of LAnPL, Management has evaluated impairment of assets as required by accounting standard – 28 Impairment of Assets issued by Institute of Chartered Accountants of India, which is made mandatory for the accounting period on or after April 01, 2004. On the basis of evaluation, Management is of the opinion that there is no impairment of the LAnPL’s assets as on March 31, 2015.

65 In case of LAnPL, the Deputy Labour Commissioner, Sonebhadra (U.P.) has sent notices to the LAnPL during year 2011 asking it to get registered under “Building & Other Construction Workers Act 1996” as well as submission of various documents. In response there of the LAnPL has filed a writ petition with the Allahabad High Court restraining the Government to do any assessment / raise any demand on the LAnPL in respect thereof. The Hon’ble High Court vide its order dated May 31, 2011 has allowed our application and has stayed issuance of any demand in the case concerned. Estimated liability on this account is expected to be ` 37.00 Crores.

66 (a) The LAnPL is in possession of 923.91 Acres of land for establishing of Anpara phase-II (660X2 MW TPP) at Tehsil Bhoginipur, District Kanpur Dehat (Ramabai Nagar). The LAnPL has provided security by way of mortgage of land measuring 314.36 Acres and 609.55 Acres to Canara Bank and Punjab National Bank for loan of `150.00 Crores and `250.00 Crores respectively, taken by the Company.

(b) The LAnPL has created subservient charge over the assets of the LAnPL in favour of CDR Lender of the Company.

(c) Pledge of 61% of the fully paid up share capital of the project (phase-I) ,as appraised by the Lenders, as collateral security. Balance share capital of the LAnPL is pledged in favour of CDR Lender of the Company i.e Holding Company of the LAnPL.

67 The LAnPL had filed a SLP before Hon’ble Supreme Court of India challenging the Order of High Court dated November 11, 2011 directing the LAnPL to deposit transit fee with State. The Hon’ble Supreme Court vide dated January 31, 2012 has stayed any demand and recovery of transit fee. Further, the Hon’ble Supreme Court vide dated October 29, 2013 has modified the stay order that the State shall be free to recover transit fee for forest produce and any such recovery shall remain subject to the ultimate outcome of present petitions pending in the Court. Any liability, if any accruing on this account is recoverable from our Procurer Uttar Pradesh Power Corporation Limited.

68 In case of LVTPL (associate of the Company), the Government of India (Ministry of Power) issued a notification No.A-4/2011-IPC dated August 17, 2011, requiring all the existing eligible power projects, inter alia, to obtain Provisional Mega Project Status on satisfying certain conditions as stated in the said revised policy guideline for setting up of Mega Power Projects. After obtaining the Provisional Mega Power Status, the LVTPL shall have to furnish security in the form of Fixed Deposit Receipt (FDR) for an amount equal to the Customs Duty payable on imports. Ministry of Power has Vide letter No. C-8/2011-IPC dated November 21, 2011 has granted Provisional Mega Power Project Status to our 1,320 MW (2 x 660) MW power project.

As original project cost was estimated on Mega Status basis, the LVTPL had approach lenders for sanction of additional loan of ` 549 .00 Crores to meet this unexpected interim fund requirement which took quite some time. After receipt of part loan sanction of ` 75.00 Crores, the LVTPL started clearing the import materials lying at port. Subsequently, the Government permitted Bank Guarantees (BG) also as a form of security and the LVTPL, keeping in view the differential savings, desired to minimize the cost of Interest During Construction (IDC) by opting for furnishing of BG in the place of FDR Accordingly, the LVTPL had again approached its lenders for sanction of BG limits and avails their sanction for this mid-way requirement.The LVTPL cleared some of the imports to the extent of FDs and BGs it could obtain from lenders. The LVTPL has provided FDs for ` 14.87 Crores and BGs of ` 8.63 Crores during previous years for clearance of goods from port.

Meanwhile imported consignments reached the port and were pending for clearance. Due to long pendency of clearance at the port, the Authorities initiated levy of demurrage charges and also initiated auction proceedings. The LVTPL represented the matter to the Port Authorities for waiver of the same due to reasons beyond the control of the LVTPL. Meanwhile due to place constraint at the port, the Authorities initiated the auction process which was incomplete due lack of response.

Due to the above reasons, as on March 31, 2015, equipment worth of 122.90 Crores, is awaiting clearance at Mumbai Port. The estimated demurrage charge on the said material is ` 208.50 Crores as on March 31, 2015. The LVTPL having requested the Mumbai Port Trust to reduce/waive the demurrage charges, has made an offer to pay a certain amount as full and final settlement equivalent to six months of demurrage. However no finality is reached on the present and possible obligation of the LVTPL as on date of the financial statements. Based on the discussions, the Management is confident of getting the equipment released without being auctioned and accordingly no adjustment has been considered in the carrying value of Capital Work in progress.

The LVTPL approached its Lenders for sanction of Additional Fund & Non-Fund based limits as part of the project cost in the CoR application and lenders have sanctioned additional limits.

69 In case of LVTPL (associate of the Company) , due to various factors beyond the control, which are effecting the implementation schedule of the project, the LVTPL, approached Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL), the power purchaser, to extend the CoD. In response to our request, MSEDCL requested for extension of Bank Guarantee (BG) and accordingly the LVTPL had extended the BG twice. During the month of March 2013, MSEDCL had encashed the Bank Guarantee of ` 51.00 Crores without prior notice. The related encashment of BG is specified as Bank Guarantee Expenses and classified under EDC. As per the terms of the PPA, the maximum liquidated damages payable works out to ` 351.90 Crores.

Based on the expert legal opinion obtained, the management is confident of getting the refund of enchashed Bank Guarantee amount of `51.00 Crores. Further, the management is confident there will not be any levy of Liquidated Damages (LDs) under Power Purchase Agreement (PPA). Hence no provision has been made in the books of accounts.


186

70 In case of LVTPL (associate of the Company) , due to various factors mentioned above which are beyond the control of the LVTPL, leading to substantial time and cost overrun the LVTPL, the LVTPL has approached lenders for funding the cost overrun and the lenders have sanctioned the limits for the increased cost thereby demonstrating the viability of the project and hence does not foresee any requirement for adjustment for carrying value in the financial statements. Based on the expert legal opinion obtained and given the fact that the project is unviable at the tariff under the PPA, the management has terminated the PPA in the month of September 2014.

71 In case of LVTPL (associate of the Company), Public Interest Litigation was filed by various parties which is pending at Nagpur Bench of Bombay High Court towards the Environmental Clearance granted by Ministry of Environment and Forest (MoEF) . Subsequently notice was issued by the Maharashtra Pollution Control Board for public hearing on the directions of High Court. Various petitioners challenged the location and time of the new public hearing, the management is confident that the outcome would be favorable to the LVTPL.

72 In case of HPL (associate of the Company) , it is in the process of setting up a Project of 2 X 660 MW at Bhognipur, U.P. Land required for setting up the Plant has been acquired and most of the approvals have been obtained. The lead Lender, IDBI, had sanctioned a Rupee Term Loan (RTL) of `1,500.00 Crores against which Interim Facility of ` 450.00 Crores had been received by the HPL periodically. This interim borrowing facility is repayable in 12 equal Monthly Instalments along with interest, commencing from November 01, 2014.

Accordingly, the HPL has paid `187.50 Crores upto March 31, 2015 as repayment of loan out of amount received from EPC Contractor (LITL) as refund of excess advance paid to them. Interest on the Interim Facility has been capitalised during the year.

Financial closure of the project is still pending primarily on account of coal linkage which has been delayed by the Govt. of India. Notwithstanding the refund of the excess EPC advances, the management is confident that the construction activities shall start in the due course once coal linkage is obtained and financial closure is achieved consequently.

The activities necessary to prepare an asset for its intended use or sale extend to more than just physical construction of the asset. It may also include technical (DPR, environmental clearance, planning, Land acquisition and geological study) and administrative work such as obtaining approvals before the commencement of physical construction.

73 The HPL (associate of the Company) , has entered in Power Purchase Agreements (PPA) with Power Procurer, consequent to which the power supply commitments starts at a certain specified date. Various factors as enumerated earlier have contributed to the delay in the financial closure, which has eventually resulted in the extension of the planned commercial operation date (COD). Based on the HPL’s request, the Power Procurer had provided extension towards supply commitment upto December 14, 2013, which was further extended to June 14, 2015. The power procurer has also conveyed that the additional Interest Costs incurred by the HPL after the extension period shall not be allowed for tariff determination.

Based on the current level of low key project activities, the Management is confident of obtaining further time extensions for the committed supplies. Based on Expert Legal advice obtained, the management is also confident that the Interest cost incurred, once the key project activities commence, after financial closure, will be allowed for tariff determination. The interest costs not being allowed during the interim period would not materially impact the recoverability of the Project cost. Considering the above factors no adjustments have been made to the financial statements.”

74 In case of the LTHPL has provided ` 4.72 (March 31, 2014: ` 4.72) Crores towards Environmental Cess in the books of accounts on import of goods from outside Sikkim as on Balance sheet date under the Sikkim Ecology Fund and Environmental Cess Act but the same has not been remitted to the Government of Sikkim as the LTHPL has represented to the Government of Sikkim to waive the Cess on the project and the LTHPL is awaiting the Government’s direction/order in this respect.

75 In case of the LTHPL, one Public Interest Litigation has been filed by a party against all hydro power developers located in the state of Sikkim which is pending in Sikkim High court. The LTHPL is the respondent in the said case and has not received any notice/communication from the petitioner as on reporting date.

Two cases have been filed against the LTHPL, which are pending at Lok Adalat, South Sikkim, Namchi, claiming damages to their residential properties due to tunneling activities done by the LTHPL. Based on the Expert Legal Opinion, the management is confident that the outcome would be favorable to the LTHPL.

76 In case of LTHPL, due to delay in diversion of forest land, poor geology and earthquake, leading to substantial time and cost overrun, the LTHPL had requested the customer to revise the PPA Tariff for viability of the project. As there was no positive response from the customer, the LTHPL filed petition seeking tariff revision before the regulatory commission. The Hon’ble Commission after hearing the matter for almost two years disposed it through final order dated August 20, 2014 stating that the LTHPL may approach the Hon’ble Commission once the Project is nearing COD. With no immediate relief available regarding tariff increase, the LTHPL terminated the PPA with effect from September 18, 2014 in line with the provisions of PPA. The LTHPL is exploring possible buyers for power sale tie up and PPA will be executed once the potential buyer is finalised. The LTHPL has also approached lenders for funding the cost overrun which is under consideration. The Management is confident of getting the revised funding from the lenders, complete the project as per the revised timelines and resolution of PPA issues. Even after considering the cost overruns and delays in execution there is viability in the project and hence the Management does not foresee any requirement for adjustment for carrying value of assets in the financial statements.


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77 In the case of LMHEPL, Considerable damage has been witnessed across the project site due to devastating flash floods occurred in the Rudraprayag district of Uttarakhand in the month of June, 2013. The LMHEPL Project is insured under CAR & ALOP policies to cover the damages including Act of God. Insurance Claims has been lodged with the insurer during the year 2013-14. Management is confident that the potential damage to the carrying value of asset is unlikely to exceed the expected insurance claim.

78 LHTPPL has obtained possession of land parcel of 100 acres at Manikonda, Hyderabad, as per the development agreement (‘the agreement’) dated November 6, 2006, entered into between Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and the LHTPPL. The land has been obtained for developing residential and commercial space and amenities. The transfer of ownership to the LHTPPL of such land is subject to the fulfillment of the commitment to develop the land as stipulated in the agreement. Accordingly to the extent of development commitment already executed by the LHTPPL, proportionate land admeasuring 26.97 Acres has been transferred in favour of the LHTPPL on June 22, 2010. The management is hopeful to get the balance land transferred in the favour of LHTPPL in due course by fulfilling the balance commitments within the extended period i.e. November 2016.

The ownership of the land obtained as above is disputed by various parties stating that the land belongs to Dargah and consequently being administered by the Wakf Board. The disputes are presently pending before at various levels of judiciary bodies. During the year 2010-11, The Andhra Pradesh Wakf Tribunal (‘the tribunal’) passed a temporary injunction against the LHTPPL and restrained the LHTPPL from alienating the land. The LHTPPL, in response to the temporary injunction, had filed review petitions in the High Court of Andhra Pradesh for setting aside the said injunction of the tribunal and the same was dismissed. Further the LHTPPL had appealed against the order of the High Court before the Hon’ble Supreme Court, which granted an interim stay against the orders of Honorable High Court of Andhra Pradesh and the WAKF Tribunal. Pending the final outcome of Appeal before the Supreme Court, the Management of the LHTPPL, on the basis of an expert legal opinion, is of the view that no adjustments are required in the financial statements in respect of such disputes.

79 In case of LHTPPL, Cash Flows from the operations have got affected due to ongoing legal matter regarding the title of the land which was sold by Government of Andhra Pradesh under Competitive bidding for cash consideration. Currently the short fall in cash flows are supported by the Company. Consequent to the interim order of the Hon’ble Supreme Court, the management is estimating that the cash flows required for the project implementation and business requirements would be met from the customer collections and if any short fall in the cash flows arises, will be supported by the Company. Based on the support from the Company the management is confident of executing the on going project in the revised timeline.

80 In case of LHTPPL, As per business plan, of the total 100 acres allotted, land admeasuring 13.56 acres had been earmarked for the development of residential properties, land admeasuring 6.00 acres had been embarked towards construction of Hanging Gardens, land admeasuring 29.08 acres has been earmarked for Special Economic Zone (SEZ) and land admeasuring 4.10 has been earmarked for Club house and shopping street. Out of the balance land admeasuring 47.26 acres, 1.6 acres has been converted into SEZ. The Balance 45.66 approximately will be classified under fixed assets, investment properties and inventories, as the case may be, based on ultimate end use pattern as per final business plan of the LHTPPL. Pending such reclassification the cost incurred on development of projects including the interest cost is included under the head “Development works in progress.”

81 Telangana State Industrial Infrastructure Corporation (TSIIC) which was formed in lieu of APIIC on formation of new state i.e. Telangana out of united Andhra Pradesh, has extended the timeline for implementation of the project under development agreement upto November 2016. The LHTPPL is confident of completing the committed development of One million sft (of which 0.65 million sft. Is already built) by November 2016.

82 In case of LKHL, it had entered into concession agreement with NHAI for developing a road project in Uttar Pradesh state under BOOT mechanism. The construction work is delayed due to pending approvals and right of way to be arranged by NHAI. During the year LKHL has received notice of termination of concession agreement from NHAI and issued a notice of termination of concession agreement to NHAI. Arbitration proceedings have been initiated to settle the claims and the counter claims associated with the termination as per the Concession Agreement. Based on the expert legal opinion, the management is confident on the recoverability of its claims submitted and is not expecting any liability on counter claims filed by NHAI.

83 In case of MMTEL, it had entered into Coal Mining Services (CMS) agreement with Mahatamil Collieries Limited (MCL) for developing and mining of Gare pelma II Coal block located in the state of Chhattisgarh, the said coal block was cancelled by the Hon’ble Supreme Court. As per CMS agreement MMTEL has incurred an amount of ` 204.66 Crores till March 31, 2015 towards exploration, infrastructure and earnest money deposit. The amount incurred has been claimed by MMTEL as per terms of the Coal Mines (Special Provisions) Ordinance, 2014 and the management is confident on recoverability of the claim.

84 In view of the growing solar power generation market in India and the favourable policy initiatives for the growth of the sector, the LSPL has approached the Consortium of Lenders for the change in scope and capacity of the Polysilicon, Wafer and Module Plants. In accordance with that Consortium of Lenders have sanctioned and documented the proposed change of scope and capacity. Thereby the revised capacity of Polysilicon Plant from 1250 TPA to 1800 TPA, Wafer Plant from 80 MW to 100 MW and added 75 MW of module line (in addition to the existing facility) respectively. Due to this change the project Scheduled Commercial Operation Date (COD) has also been revised from October 12, 2012 to October 12, 2014. After this change is taken place during the financial year 2014-15,LSPL has approached the Lenders for the revision of COD and increase of project cost due to increased Interest During Construction from October


188

2014 to October 2016 and from `1,698.00 Crores to `1,921.00 Crores respectively. Based on the revised envisaged Project cost and along with independent assessment done by ITCOT Consultancy and Service Ltd (ITCOT stands for Industrial and Technical Consultancy Organization of Tamilnadu), the Project has been assessed to be technically feasible and financially viable. After this assessment has taken place, the Lead Lender –Axis Bank Limited has issued Information Memorandum and sanctioned for revised COD from October12, 2014 to October 12, 2016, Cost Over Run (COR) funding, change of repayment start from December 2015 to December 2017 , accordingly out of the Consortium of Lenders of 12 , till date LSPL has received revised sanctions from 10 lenders and the rest of the sanctions are in the process of receiving. The management is confident of obtaining the sanctions from the rest of the lenders and accordingly execute the documentation and achieve the scheduled COD. Hence LSPL does not foresee any requirement for adjustment in carrying value of assets under construction as at March 31, 2015.

85 In case of LSPL, Capital advance includes an amount of ` 16.38 (March 31, 2014 ` 16.38) Crores paid to Chhattisgarh State Industrial Development Corporation Ltd (CSIDCL) for acquisition of Land for future expansion of poly -wafer-module project.

86 In the case of LSPL, Asset Under Construction includes Material lying at port pending Customs Clearance (which carries an assessable value of ` 6.93 Crores as computed at current customs exchange rate)

87 In case of DSPL, on account of various factors beyond the control of the DSPL (like non-availability of additional land, non-availability of Heat Transfer Fluid (HTF), re-designing of the Project, fluctuations in forex), the project has undergone substantial time and also cost overrun. The DSPL has filed petition with Central Electricity Regulatory Commission (CERC) for extension of Commercial Operation Date (COD) and to revise the Power Purchase Agreement (PPA) Tariff for viability of the project. As per the petition filed with the CERC, the DSPL requested CERC for revised COD of 18 clear months from the date of increased tariff approval received by the DSPL. The Management is confident of obtaining permissions/approval for the requests made in the petition filed before CERC and also raising fund for executing the project, hence the DSPL does not foresee any requirement for adjustment in carrying value of assets under construction as at March 31, 2015.

88 Incase of DSPL, Assets Under Construction includes Steam Turbine Generator amounting to `100.11 Crores, held as trust by the Original Equipment Manufacturer at warehouse outside India .

89 In case of LRAPL, Deferred consideration payable in relation to the acquisition of GCM &CMM in March 2011 is due in March 2015. As on March 31, 2015 the deferred consideration remains unpaid by the LRAPL and is the subject of a dispute in the Supreme Court of Western Australia. Payment of the remaining deferred consideration is dependent on the financial support of LRIPL.

90 During the year, the Company along with its step down subsidiaries had entered into a Share Purchase Agreement (SPA) on August 13, 2014 with the Adani Power Limited (APL) for sale of its 100% stake in UPCL. As the receipt of full share sale consideration and transfer of shares to APL was effected post March 31, 2015 i.e. on April 20, 2015, the effects of this transaction is not considered for the year ended March 31, 2015. However the financials of UPCL from August 18, 2014 to March 31, 2015 consisting of a total Income of ` 1,711.09 Crores and Loss of `73.34 Crores have been considered in the consolidated financials for the year ended March 31, 2015.

91 Lanco Resources International Pte Limited (LRIPL) along with its subsidiary companies (Griffin Coal Mine Operations, Australia) have been incurring losses from acquisition onwards. The management is taking necessary steps to optimise its mining cost and to improve the coal mining capacity. Upon implementation of short term initiatives, the management is confident of improving the profitability of the business in short period and carrying value of the assets are realizable at the value stated in the books. Accordingly, no adjustments have been made in these financials statements.

92 The Company has entered into transactions with related parties, including some of its associates namely LVTPL, HPL, VPPL and LBPL (fellow Subsidiary) whose details are shown in summary of the transactions with related parties, under note 46. The Company along with Lanco Group Limited (Holding Company) and through various intermediate companies holds the remaining shares in these associates and LBPL. In case of LVPTL, LBPL and HPL, the Group holds cumulative compulsorily convertible preference shares which when exercised for conversion as per the terms of these shares would result in these companies becoming subsidiaries of the Company or its step down subsidiaries. Regulus Power Private Limited (RPPL) and Ananke Properties Private Limited (APPL), associate of the step down subsidiary and associate of the Company respectively, which have the associates / subsidiaries, do not prepare consolidated financial statements. LBPL is an associate of RPPL and Banas Thermal Power Private Limited (BTPPL) is a subsidiary of APPL. Under Indian GAAP, the Company is not required to consolidate these associates and LBPL.

93 The group has revised depreciation as per the provisions of Schedule II of the companies Act, 2013, which is effective from April 01, 2014. Consequently depreciation for the year is higher by ` 9.82 Crores. As per the transitional provision depreciation of `10.05 Crores (net of deferred tax) has been adjusted against the retained earnings.


189

94 Additional information as required by Paragraph 2 of the General Instructions for Preparation of Consolidated Financial Statements to Schedule III to the Companies Act, 2013:

Net Assets, i.e., total assets minus total liabilities *

Share in profit / Loss

Name of the entity As % of consolidated

net assets

Amount As % of consolidated Profit / Loss

Amount

Parent Lanco Infratech Limited 227.76% 2,030.30 33.01% -672.23 Subsidiaries Indian

Lanco Power Limited 631.70% 5,631.17 -0.09% 1.83 Lanco Thermal Power Limited 533.22% 4,753.29 0.98% -19.86 Lanco Kondapalli Power Limited 123.42% 1,100.16 7.62% -155.25 Lanco Tanjore Power Company Limited 58.51% 521.59 -1.06% 21.55 Lanco Amarkantak Power Limited 254.35% 2,267.34 8.40% -171.07 Udupi Power Corporation Limited 216.23% 1,927.53 3.02% -61.43 Lanco Anpara Power Limited 50.01% 445.80 0.46% -9.40 Arneb Power Private Limited 0.23% 2.07 0.00% - Portia Properties Private Limited 7.76% 69.18 0.00% 0.01 Lanco Hydro Power Private Limited 46.93% 418.38 0.65% -13.21 Lanco Budhil Hydro Power Private Limited 0.00% - 0.04% -0.82 Lanco Teesta Hydro Power Limited 73.18% 652.33 0.00% - Lanco Mandakini Hydro Energy Private Limited 20.89% 186.24 0.00% - Lanco Rambara Hydro Private Limited 0.00% 0.00 0.00% - Diwakar Solar Projects Limited 26.74% 238.33 0.00% - Lanco Solar Energy Private Limited 44.23% 394.27 1.09% -22.26 Lanco Solar Services Private Limited 0.27% 2.39 -0.02% 0.35 Lanco Solar Private Limited 41.91% 373.63 0.30% -6.01 Khaya Solar Projects Private Limited 2.35% 20.98 0.04% -0.85 Bhanu Solar Projects Private Limited 0.00% -0.02 0.00% - Lanco Solar Power Projects Private Limited 0.15% 1.31 0.00% -0.01 Orion Solar Projects Private Limited 0.05% 0.47 0.00% -0.00 Pasiphae Power Private Limited 0.00% -0.00 0.00% -0.01 Sabitha Solar Projects Private Limited 0.03% 0.26 0.00% - Helene Power Private Limited 0.07% 0.60 0.00% - Omega Solar Projects Private limited 1.13% 10.07 0.00% 0.01 Lanco Wind Power Private Limited 4.56% 40.62 0.00% - Amrutha Power Private Limited 0.03% 0.31 0.00% - Spire Rotor Private Limited 0.00% 0.01 0.00% - Emerald Orchids Private Limited 0.01% 0.07 0.00% - JH Patel Power Project Private Limited 0.02% 0.16 0.00% - National Energy Trading and Services Limited 9.77% 87.09 -0.38% 7.71 Mahatamil Mining and Thermal Energy Limited 10.15% 90.47 0.00% - Mercury Projects Private Limited 23.68% 211.09 -0.01% 0.18 Tasra Mining & Energy Company Private Limited 0.57% 5.10 0.00% - Lanco Hills Technology Park Private Limited 35.61% 317.43 3.54% -72.02 Uranus Projects Private Limited 2.04% 18.20 0.00% - Jupiter Infratech Private Limited 0.16% 1.46 0.00% 0.00 Uranus Infratech Private Limited 0.14% 1.29 0.00% - Leda Properties Private Limited 0.75% 6.69 0.00% - Coral Orchids Private Limited 0.53% 4.69 0.00% -0.03 Thebe Properties Private Limited 1.49% 13.31 0.00% - Cressida Properties Private Limited 0.36% 3.23 0.00% - Nix Properties Private Limited 0.67% 6.00 0.00% -


190




net assets


Amount

Cordelia Properties Private Limited 0.20% 1.77 0.00% -0.03 Deimos Properties Private Limited 0.38% 3.42 0.00% -0.02 Dione Properties Private Limited 0.46% 4.11 0.00% -0.01 Neptune Projects Private Limited 0.21% 1.84 0.00% - Pearl Farms Private Limited 0.77% 6.82 0.00% - Telesto Properties Private Limited 0.61% 5.45 0.00% -0.04 Lanco Hoskote Highway Limited 32.19% 286.94 3.26% -66.39 Lanco Devihalli Highways Limited 29.34% 261.57 1.70% -34.56 Lanco Kanpur Highways Limited 22.04% 196.50 0.00% - ForeignLanco International Pte Limited 100.40% 894.96 -2.43% 49.46 Lanco Infratech (Mauritius) Limited 0.14% 1.25 0.00% -0.07 Lanco Enterprise Pte Limited 0.06% 0.50 0.04% -0.91 Lanco Infratech Nepal Private Limited 0.06% 0.54 0.00% - LE New York - LLC 0.16% 1.45 0.00% -0.04 Lanco Power International Pte Limited -1.21% -10.75 0.55% -11.19 Lanco Solar International Pte Limited -1.08% -9.65 -0.16% 3.21 Lanco Solar Holding Netherland B.V -1.84% -16.42 0.08% -1.65 Lanco Solar International USA Inc. 0.01% 0.07 2.41% -49.14 Lanco Solar International Limited 0.00% - 0.00% - Lanco IT PV Investments B.V. -0.02% -0.17 0.00% -0.07 Green Solar SRL 0.00% 0.03 0.00% -0.02 Lanco Resources International Pte Limited 45.90% 409.17 3.75% -76.36 Lanco Holding Netherland B.V 0.00% - 0.00% - P.T Lanco Indonesia Energy 0.00% - 0.00% - Lanco Resources Australia Pty. Limited 39.82% 355.01 51.60% -1,050.92 The Griffin Coal Mining Company Pty Limited -362.68% -3,233.00 9.48% -193.05 Carpenter Mine Management Pty Limited -0.38% -3.38 3.58% -72.82 Western Australia Coal Terminal Pty Ltd 0.00% - 0.00% - Bhola Electricity Pvt Ltd 0.00% 0.01 0.00% - Sirajganj Electric Pvt Limited 0.00% 0.01 0.00% -

Associates (Investment as per the equity method)Associates Indian

Lanco Vidarbha Thermal Power Limited 79.63% 709.84 0.00% - Genting Lanco Power (India) Private Limited 1.37% 12.19 -0.04% 0.72 Himavat Power Limited 61.99% 552.61 0.00% - Pragdisa Power Private Limited 0.00% - 0.00% - Vainateya Power Private Limited 1.71% 15.25 0.00% - Avior Power Private Limited 0.49% 4.37 0.00% - Mirach Power Limited 0.05% 0.47 0.00% - Bay of Bengal Gateway Terminal Private Limited 0.00% - 0.00% - Charon Trading Private Limited 1.25% 11.15 0.00% -0.00 Mimas Trading Private Limited 0.35% 3.13 0.00% -0.00 Ananke Properties Private Limited 7.52% 67.04 0.00% -0.00 Tethys Properties Private Limited 7.50% 66.84 0.00% -0.00 Bianca Properties Private Limited 7.50% 66.84 0.00% -0.00 Belinda Properties Private Limited 7.50% 66.84 0.00% -0.00


191




net assets


Amount

Phoebe Trading Private Limited 0.39% 3.47 0.00% -0.00 Basava Power Private Limited 0.01% 0.08 0.00% - Siddheswara Power Private Limited 0.02% 0.15 0.00% - Regulus Power Private Limited 0.27% 2.43 0.00% - DDE Renewable Energy Private Limited 0.46% 4.06 0.06% -1.19 Electromech Maritech Private Limited 0.77% 6.89 0.03% -0.53 Finehope Allied Engineering Private Limited 0.42% 3.77 0.05% -0.95 KVK Energy Ventures Private Limited 13.04% 116.22 0.00% - Newton Solar Private Limited 0.62% 5.56 0.02% -0.40 Saidham Overseas Private Limited 0.45% 3.97 0.02% -0.40 Vasavi Solar Power Private Limited 0.42% 3.79 0.03% -0.68 Less: Total Eliminations -2450.96% -21,848.49 -26.70% 543.80

100.00% 891.42 104.93% -2,137.06 Minority Interest in all subsidiaries 1,339.19 4.93% -100.32 Total -447.77 100% -2,036.74

* Includes Minority Interest in all Subsidiaries

95 As allowed under Schedule III of the Companies Act, 2013, financials are prepared in Crores and rounded off to two decimals. The amounts / numbers below fifty thousands are appearing as zero. Previous year figures have been regrouped / reclassified wherever necessary.

As per our report of even date.For and on behalf of the Board of Directors ofLanco Infratech Limited





192

To Aarthi Consultants Private Limited 1-2-285, Domalguda Hyderabad – 500 029 Telangana, India

Member Information-Update

I/We request you to record and update the following information against my/our Folio No.:

Folio No. / DP ID - Client ID

Name of the first named Member

PAN

CIN/ Registration No. (applicable to Corporate Members)

Tel No. With STD Code

Mobile No.

Email ID

I/We hereby declare that the information given above is correct. I/We undertake to intimate changes to the above information as and when changes take place. I/We understand that the above details shall be maintained by you till I/we hold the equity shares under the above mentioned Folio No / DP ID - Client ID.

Date:

Place: ……………………………….

Signature of sole/First holder

Notes:

1. Members holding equity shares in Physical form are requested to update the above information with the Registrar and Transfer Agent of the Company.

2. Members holding equity shares in demat mode are requested to update the above information with their respective Depository Participant.

Member Information

193

One of Hyderabad's most sort after uber

destination, the 'high life' stands redefined at Lanco

Hills. Spread over 100 acres, Lanco Hills is a unique

world within, with convenient access to homes,

premium office spaces, entertainment, leisure and

shopping at one place. This mega project owes its

magnificence to the meticulous detailing by

renowned architects & consultants.

RESIDENTIAL

l Towers under Phase I are ready and are being occupied

l In addition to high rise towers, 56 Villas are under construction and nearing completion.

OFFICE SPACE

l IT Tower: 0.59 mnsqft.

l SEZ: 0.056 mnsqft incubation space.

PROPERTY DEVELOPMENTWe approach Corporate Social Responsibility

professionally at Lanco, and our aim is to align our

efforts through internationally accepted

approaches. Social responsibility is integrated into

our core values and business strategy.

The Lanco Foundation is currently implementing

programmes in Education, Health, Safe Drinking

Water, Empowering the Physically Challenged,

Neighbourhood Community Development and

Environment.

l Member of the UN Global Compact

l Operating in 11 Indian States at 13 locations

l Covering 155 villages & 240,000 population

beneficiaries

LANCO FOUNDATION

LANCO INFRATECH LIMITED

Registered Office

Plot No.4, Software Units Layout, HITEC City,

Madhapur, Hyderabad - 500 081,

Telangana, India

Phone: +91-40-4009 0400

Fax: +91-40-2311 6127

Corporate Office:

Plot No. 397, Udyog Vihar, Phase-3,

Gurgaon, 122 016 New Delhi Region, India

Phone: +91-124-474 1000

Fax +91-124-474 1066

www.lancogroup.com

CIN No: L45200TG1993PLC015545