(b) Securities for Term Loans and NCD : Rupee Term Loan (RTL) - 1 and FITL thereon -

1) 1^st pari-passu charge on the entire Fixed Assets (movable and immovable), both present and future of the Company, including the pari-passu security with Non Convertible Debenture but excluding the exclusive security for Non Convertible Debenture and the Gammon House.

2) 2^nd pari-passu charge on the Gammon House, entire Current Assets, Loans and Advances, Long Term Trade Receivables and Other Assets of the Company.

Rupee Term Loan (RTL) - 2 and FITL thereon -

1) 1^st pari-passu charge on Gammon House.

2) 2^nd pari-passu charge on the entire Fixed Assets (movable and immovable), both present and future of the Company, including the pari-passu security with Non Convertible Debenture but excluding the exclusive security for Non Convertible Debenture and the Gammon House.

3) 2^nd pari-passu charge on entire Current Assets, Loans and Advances, Long Term Trade Receivables and Other Assets of the Company.

Rupee Term Loan (RTL) - 3 and FITL thereon -

1) 3^rd pari-passu charge over the entire Fixed Assets (movable and immovable) and Current Assets of the Company excluding the Gammon House.

2) 3^rd pari-passu charge on the Gammon House.

Working Capital Term Loan (WCTL) -

1) 1^st pari-passu charge on the entire Fixed Assets (movable and immovable), both present and future of the Company, including the pari-passu security with Non Convertible Debenture but excluding the exclusive security for Non Convertible Debenture and the Gammon House.

2) 2^nd pari-passu charge on the Gammon House, entire Current Assets, Loans and Advances, Long Term Trade Receivables and Other Assets of the Company.

Priority Loan -

1) 1^st pari-passu charge on the entire Fixed Assets (movable and immovable), both present and future of the Company, including the pari-passu security with Non Convertible Debenture but excluding the exclusive security for Non Convertible Debenture and the Gammon House.

2) 2^nd pari-passu charge on the Gammon House, entire Current Assets, Loans and Advances, Long Term Trade Receivables and Other Assets of the Company.

Non Convertible Debentures (NCD) and FITL thereon -

1) 1^st pari-passu charge by mortgage of Gujarat Property and hypothecation over the pari-passu security with the Non Convertible Debentures.

2) 3^rd pari-passu charge over the entire Fixed Assets (movable and immovable) and Current Assets of the Company excluding the Gammon House.

3) 3^rd pari-passu charge on the Gammon House.

4) In case of 9.95% NCD of Rs. 50 Crore, being not part of CDR scheme, interest is not converted in to FITL. This redeemable NCD is secured by hypothecation of specific Plant and Machinery with pari-passu charge by mortgage of immovable property in Gujarat.

(c) Funded Interest Term Loan (FITL) -

The interest amount on RTL - 1, RTL - 2, RTL - 3 and NCDs for the initial period of 15 months i.e. from cutoff date till

31^st March, 2014 are converted to FITL.

(f) Collateral security pari-passu with all CDR lenders

a) Pledge of entire unencumbered Equity Shares (present and future) of GIL held by Promoters subject to section 19(2) and 19(3) of Banking Regulation Act including pledge of encumbered Equity Shares as and when such shares are released by the respective existing lenders.

b) Personal guarantee of Mr Abhijit Rajan, Chairman and Managing Director.

c) Undertaking to create pledge over the resultant shares of Metropolitan Infrahousing Private Limited (MIPL) after signing the JV agreement with developer.

d) Undertaking to create pledge over shares of Nikhita Estate Developers Private Limited (Promoter group company), as and when they are released in the future.

e) Corporate guarantee provided by Nikhita Estate Developers Private Limited ("Promoter entity")

f) Pledge over the following shares -

23% of Deepmala Infrastructure Private Limited 100% of SEZ Adityapur Limited 24% of Ansaldocaldaie Boilers India Private Limited 100% of Gactel Turnkey Projects Limited

100% of Transrail Lighting Limited (out of which currently only 25% pledged with the CDR Lenders)

(h) For details of continuing defaults as at 31^st March, 2016 and 30^th September, 2014, Refer Annexure 1.

(i) The Company had pursuant to the Shareholders approval in May, 2015, issued Unsecured Zero Coupon Compulsorily Convertible Debentures ("CCD's") of upto Rs. 100 Crore to the Promoters against their contribution made to the Company's Corporate Debt Restructuring ("CDR") package. However no allotment was made, since the in-principle approval for allotment was awaited from BSE Limited On 26^th April, 2016, BSE has directed the Company to modify the "relevant date" adopted by the Company for the pricing of the CCD's and seek shareholders approval afresh. The amount contributed by the Promoters continues to remain as debt in the Company.

(j) Transmission and Distribution (T&D) Business:

The Joint Lender's Forum ("JLF") meeting convened on 17^th November, 2015 and 16^th December, 2015 and CDR EG meeting held on 23^rd November, 2015 and 22^nd January, 2016 approved the adoption of the Strategic Debt Restructuring scheme of the Company which interalia entailed a carve out of Transmission and Distribution (T&D) Business with the entry of strategic investors. Pursuant to the same the Company, with effect from 1^st January 2016, through a business transfer agreement, as detailed in discontinuing Note, transferred borrowings aggregating to Rs. 200.13 Crore to Transrail Lighting Limited ("TLL"). The Company also proposes to file with the Hon'ble High Court of Bombay a scheme of arrangement for transfer of the retained T&D facility as detailed in Note 49 where under borrowings aggregating to Rs. 93.21 Crore would be transferred to TLL. Pending approval of the scheme of arrangement the borrowings are continued in the books of the Company.

1. The Company, as part of its restructuring scheme in which it is carving out the EPC and T&D Business into separate entities with residual non-core assets and some claims remaining in the main Company, had during the eighteen month period evaluated its existing claims in respect of on-going, completed and / or terminated contracts with the help of an independent expert in the field of claims and arbitration to assess the likely amount of claims being settled in favour of the Company. The expert had reviewed the claims and had opined that an amount aggregating to Rs. 1,657.22 will be reasonably certain to be settled in favour of the Company.

Based on the above opinion, the Company has during the year recognized claims of an aggregate amount of Rs. 1,343.97 Crore including a further claim of Rs. 300 Crore during the quarter ended 31^st March, 2016 excluding amounts recognized earlier of Rs. 313.25 Crore based on management estimates of reasonable realization. These claims have been accounted as unbilled revenue and the management expects 25% of such claims other than on terminated projects to be realized within the operating cycle. Accordingly unbilled revenue has been disclosed as current and non-current in the Balance Sheet. The effects in the Statement of Profit and Loss are dependent upon the percentage of completion of the project.

2. Foreign and Domestic Venture

(a) The Company through its Special Purpose Investment Vehicle holds the following stakes :

- Sofinter S.p.A, Italy

- Franco Tosi Mecannica S.p.A, Italy (FTM)

- Sadelmi S.p.A, Italy

- SAE Power Line S.r.l, Italy

(b) Pursuant to the put option exercised, one of the Subsidiaries of the Company had paid USD 32 Million for acquisition of further 35% stake in Sofinter Group. The transferor has created pledge in favour of the lenders of the transferee company. The process of transferring the ownership in favour of the transferee company is expected to be completed by 31^st July, 2016. Considering the proposed holding of 67.5% in Sofinter Group, the order book position, the valuation carried out of the said Sofinter Group by an independent valuer and the current financials of Sofinter, the Management is of the view that no impairment is required in the exposure of the Company towards its combined exposure of Rs. 887.82 Crore in Sofinter Group.

(c) The Company's funded and non-funded exposure towards Franco Tosi Mecannica S.p.A (FTM) group is Rs. 892.19 Crore (net of provisions already made) Crore as at 31^st March, 2016 including Investments and guarantees towards the acquisition loan taken by the SPV. This also includes the corporate guarantee given.

The Commissioner in charge of the Extraordinary Administration of Franco Tosi Meccanica S.p.A. has already concluded the sale of the operating business of FTM to the successful bidder and has commenced the disposal of the non-core assets (i.e. those assets which were not part of the sale of operating business), which includes 60 acres of land in Legnano, Italy. The Commissioner has not started the actual disposal of the property. The valuation pegged by the Commissioner is based on the valuation of land in adjoining premises which is also under administration. However the liabilities to be discharged against the surplus on disposal (net of tax) has not been made available by the Commissioner. Despite these factors the management expects that the surplus available to the equity shareholder will be adequate to cover the exposure of the Company towards FTM and no provision for impairment is accordingly made.

The Commissioner or the said FTM has not released any financials since 31^st December, 2011 and therefore no further effects have been taken in respect of the said FTM in these financials.

(d) The Company through its step down subsidiary P. Van Eerd Beheersmaatschappij B.V., Netherlands (PVAN) held a 50% shareholding in Sadelmi S.p.A for EUR 7.50 Million, Italy (Sadelmi) with the remaining 50% held by Busi Impianti S.p.A, Italy since April 2008. Due to the economic conditions prevailing in different parts of the world where Sadelmi was present some of the projects under execution encountered serious contractual problems. Sadelmi therefore sought creditors' protection through a Court in Italy and simultaneously, as part of scheme, applied for transferring the remaining projects and leased all references standing in its name since inception to a new company Busi Power S.r.l wholly held by Busi Group.

The above procedure however has not yet been completed as the decision in the Court is still awaited. The delay is on account of objections raised by some creditors among other reasons.

In view of the uncertainties prevailing in Europe and the delay in the outcome of the Court process in respect of the creditors' protection sought by M/s Sadelmi in its application in connection therewith, the Company has, on prudent basis, made full provision towards its funded exposures in connection with the Investment in Sadelmi of Rs. 25.72 Crore and has charged the same as an exceptional item. The Company has exposure in respect of Corporate Guarantee for acquisition loan by its SPV.

The Company has made provision as risks and contingencies aggregating to Rs. 77. 54 Crore towards the guarantees issued to the banker of its wholly owned SPV PVAN, in respect of loans taken by the said subsidiary for making investment into Sadelmi, in accordance with AS-29 Provisions, Contingent Liabilities and Contingent Assets considering the net worth and operations of the said Sadelmi.

(e) The exposure of the Branch in SAE Powerlines S.r.l, Italy ("SAE"), a subsidiary of the Company and ATSL BV, Netherlands, the holding company of SAE, towards investments, loans, including guarantees towards the acquisition loan taken by the SPV is Rs. 196.84 Crore. The Branch has made provision for impairment of investments and Loan aggregating to Rs. 62.52 Crore and provision of Rs. 88.29 Crore for risk and contingencies for Corporate Guarantees for acquisition loan of the SPV and thus, the net exposure of the Branch is Rs. 46.03 Crore. The Branch has a further exposure of Rs. 139.48 Crore net of provision of Rs. 65.57 Crore towards receivables due from SAE which are outstanding for a long time. The Company had carried out a valuation of the business of SAE by an independent valuer in September, 2014, who determined an enterprise value of Rs. 71.34 Crore, which however is not updated to cover the present financial position. The Management is of the opinion that considering the order book position and adequate references and strengths in international markets especially the African and European Markets, the provision made by it for impairment of its investment, loan and trade receivable is adequate.

(f) During the year, a further amount of Rs. 18.82 Crore has been debited to the said ACBI on account of the encashment of Bank Guarantee. Considering that the Company has initatited arbitration proceedings and based on legal advice that it has a sound case against the wrongful encashment and therefore no further provision is required against the increased exposure of Rs. 32.61 Crore as on 31^st March, 2016.

(g) The accounts of a subsidiary M/s Campo Puma Oriente S.A. have not been audited since December 2012, due to certain disputes with the partner in the project. The exposure of the Company in the said subsidiary is Rs. 411.67 Crore net of provisions made. The Company has received a valuation report for USD 60 Million approximately from an independent merchant banker for its share. Furthermore, the Company is in the process of enhancing its output of oil field from the current level, which is expected to further improve the value. Further the disputes between the partners are expected to be resolved within a short time after which the financial statements will be signed and released. In light of the same the management is confident that there will be no provision required for impairment.

3 ESOP Scheme

The erstwhile Associated Transrail Structures Limited("ATSL"), had instituted an ESOP Scheme during the Financial Year 2006-07 which was approved by the shareholders vide their resolution dated 27^th March, 2007. The Board of Directors of ATSL granted 1,06,300 stock options to its employees on 27^th March, 2007 pursuant to the ESOP Scheme. Each option entitled an Employee to subscribe to one equity share of ATSL at an exercise price of Rs. 80 per share.

The following options vest in a graded manner over a period of four years and are exercisable during a period of three years from the date of vesting thereof as described hereinafter :-

Options Granted on 27^th March, 2007 :

The Intrinsic value was determined by independent valuer by following price to Net Assets Value (NAV) method, The fair value of options has been determined, using the Black-Scholes Option Pricing Model, by independent valuer as on 31^st March, 2008.

Under this method, compensation expense, equivalent to the intrinsic value of the options granted, is amortized equally over the vesting period of the option following straight-line method. The intrinsic value is the excess of the value of the underlying stock as determined by the independent valuer over the exercise price at the measurement date, which typically is the grant date.

The fair value of 1,06,300 options, granted on 27^th March, 2007 was determined using the Black-Scholes Option Pricing Model with the following assumptions:

NIL (Previous Period NIL) options were exercised by the employees during the year. NIL (Previous Period 8,700) options were lapsed during the year on account of cessation of employment / lapse of exercise period of option. None of the options granted have been forfeited during the year.

All the above options have an exercise price of Rs. 80 per share and have a weighted average remaining contractual life of 4 years.

Pursuant to the amalgamation of Associated Transrail Structures Limited (ATSL) with the Company, the outstanding options of the employees of the erstwhile ATSL outstanding as on 1^st April, 2008,have been taken up as an obligation of the Company in accordance with the scheme approved by the Court, Accordingly, the Company has accounted for the grant of 1,06,300 options to such employees at an exercise price of Rs. 80 per share. The Company will issue two Equity Shares against each option in terms of the scheme of amalgamation approved by the Courts.

Since the assets and liabilities of the erstwhile ATSL have been accounted at the book value, the accounting effect in the accounts is continued at the same.

Had compensation cost been determined in accordance with the Fair Value Method described in the Guidance Note, the T&D Business net loss for the year ended 31^st March, 2016 as reported would have changed to amounts indicated below

4 In respect of the projects undertaken by the Company

i) The Company in evaluating its jobs has considered an amount of Rs.153.29 Crore arising out of claims for work done on account of cost overruns arising due to client delays, changes of scope, escalation claims, variation orders, deviation in design and other charges recoverable from the client which are pending acceptance or certification by the client or referred the matter to the dispute resolution board / arbitration panel.

ii) In furtherance to the recommendation of the Dispute Resolution Board (DRB) and Arbitration Awards in the Company's favour, the Company has recognized income to the extent of Rs. 135.75 Crore which is part of Long Term Trade Receivable. The Company contends that such awards have reached finality for the determination of the amounts of such claims and are reasonably confident of recovery of such claims although the client has moved the Court to set aside the awards. Considering the fact that the Company has received favourable awards from the DRB and the Arbitration Tribunal, the management is reasonably certain that the claims will get favourable verdict from the Courts.

iii) Trade Receivables includes Rs. 155.03 Crore in respect of two of its project based on advanced negotiation and discussion with the client and is confident of realising the same, pending the final revision in contract value.

iv) There are disputes in six projects of the Company. The total exposure against these projects is Rs. 355.56 Crore. The Company is pursuing legal recourse / negotiations for addressing the disputes in favour of the Company and is of the opinion that it has a good case in the matter hence does not require any provision considering the claims of the Company against the Clients.

v) The Company, as part of its restructuring scheme in which it is carving out the EPC and T&D Business into separate entities with residual non-core assets and some claims remaining in the main Company, had during the eighteen month period evaluated its existing claims in respect of on-going, completed and / or terminated contracts with the help of an independent expert in the field of claims and arbitration to assess the likely amount of claims being settled in favour of the Company. The expert had reviewed the claims and had opined that an amount aggregating to Rs. 1,657.22 will be reasonably certain to be settled in favour of the Company.

Based on the above opinion, the Company has during the year recognized claims of an aggregate amount of Rs. 1,343.97 Crore including a further claim of Rs. 300 Crore during the quarter ended 31^st March, 2016 excluding amounts recognized earlier of Rs. 313.25 Crore based on management estimates of reasonable realization. These claims have been accounted as unbilled revenue and the management expects 25% of such claims other than on terminated projects to be realized within the operating cycle. Accordingly unbilled revenue has been disclosed as current and non-current in the Balance Sheet. The effects in the Statement of Profit and Loss are dependent upon the percentage of completion of the project.

5 The Company's operating result have been affected in the last few years by various factors including liquidity crunch, unavailability of resources on timely basis, delays in execution of projects, delays in land acquisition, approval of design etc. by client, scarcity in availability of labour and materials, operational issues etc. Company's overseas operations are characterized due to weak order booking, paucity of working capital and uncertain business environment. This has also resulted in various winding up claims filed against the Company. The Company is exploring several options for overcoming the liquidity crisis. The Group is in the process of development of its land parcel as well as monetizing its overseas investments and to divest some of its businesses, recovery towards final bills, retention money, settlement of non-routine collection including claims, arbitration awards etc. to meet the working capital needs. The Company is also in discussion with client for overcoming bottlenecks in timely executing the existing projects and to increase the order book. The Company is having a good order book in hand as on March 2016 of Rs. 11,000 Crore.

The Company continues to negotiate with vendors for settlement, improved commercial terms and better credit facility and is in process of arranging additional working capital finance to improve short term liquidity position. The Company is evaluating and exploring various courses of action for raising funds for Company's operations, including options for strategic restructuring.

However due to the continuing stress and the inability of the Promoters to infuse fresh funds into the Company and the continuing losses, The Corporate Debt Restructuring Empowered Group in its meeting held on 23^rd November, 2015 has discussed and noted the proposal of the CDR Lenders for invocation of Strategic Debt Restructuring ("SDR") in the Company and carve out of the Civil Engineering, Procurement and Construction and the Transmission and Distribution Businesses with change of management. The "Reference date" for the purpose of the SDR is 17^th November, 2015. The lenders have invoked SDR and the requisite majority for approval of the SDR scheme in value and numbers had already been received and the CDR lenders have converted part of their loans and interest by taking a 62.65% stake in the Company up to the period ended 31^st March, 2016. The Company has also as part of the SDR formulated a detailed restructuring package, which is detailed in a later paragraph.

Based on various developments including SDR by lenders resulting in lenders having majority stake and restructuring of businesses, the management is of the view that the Company will remain as going concern for future on the basis of existing order book, restructuring proposal, monetization of the various non-core assets, future business potential, pre-qualifications for project bidding and previous track record

6 Strategic Debt Restructuring

The lenders invoked SDR with reference date of 17^th November, 2015. CDR EG noted the same in their meeting held on 23^rd November, 2015 and approved by Joint Lenders Forum in its meeting held on 23^rd November, 2015. As per the SDR proposal lenders can convert their debt into equity up to Rs. 300 Crore. As on date lenders have converted Rs. 272.22 Crore of the debt into equity representing 62.77 % of equity capital.

The Company as part of its revival plan has decided to carve out the Civil EPC and Transmission and Distribution (T&D) Businesses into separate companies through the process of BTA and Scheme of arrangement. This will help in getting new investors in the respective companies

T&D Business :

As part of the plan the Business Transfer Agreement (BTA) and the Court Scheme for transfer of the T&D Business in favour of Transrail Lighting Limited, a wholly owned subsidiary has been finalized. The BTA has been executed in October 2015 and the Court scheme is finalized and is pending approval of the Regulator. The Investor has been identified as Bilav Software Private Limited and the shareholder agreement is already signed with Bilav Software Private Limited for the T&D Businesses wherein they have acquired 75% stake in TLL at a cost of Rs. 2.33 Crore from GIL. They will also invest another Rs. 47.67 Crore approximately in TLL. As part of the carve out proposal of T&D Business Rs. 505 Crore funded and Rs. 3,350 Crore non-funded exposure will be transferred to TLL.

Civil EPC :

Company is in process of transfer its Civil EPC Business to its WOS through BTA and Scheme of arrangement. Company has signed BTA with its WOS. An investor GP Group of Thailand has given proposal to invest Rs. 250 Crore in Civil EPC Business.

Non-Core Assets:

Companies will develop / monetize its investments in India and also outside India in coming years to repay the loans remaining in the Company.

Conversion of Loan in to Equity:

Under SDR the lenders has converted overdue principal and interest of Rs. 272.22 Crore in to equity at Rs. 11.89 per share.

7 Disclosure of Discontinuing Operations as per AS 24

As part of its restructuring of its business in order to create sector focused companies and to invite investments by strategic investors the Company decided to carve out its Transmission and Distribution Business into Transrail Lighting Limited. The Company entered into shareholders agreement with M/s Bilav Software Private Limited to divest 75% of its stake in Transrail Lighting limited. The Restructuring plan contemplated carving out of a portion of business vide a Business Transfer Agreement and the balance portion of the T&D Business by way of a scheme of arrangement of the retained T&D Business in GIL through a Court process. Accordingly the businesses transferred under the BTA and proposed to be transferred under the Court scheme are treated as discontinuing operations.

Similarly, the EPC Business is proposed to be transferred out into a wholly owned subsidiary either through a BTA or a Scheme or a mix of both. The Board of Directors vide its meeting dated 12^th February, 2016 have approved the restructuring plan. Attention is invited to note no 37 where the identification of the investor and other terms of the same are detailed. The said EPC Business proposed to be carved out are also included in as discontinuing operations.

The Statements of Profit and Loss , Balance Sheet and Cashflow relating to the discontinuing operations is given in Annexure 3

8 Disclosure under Accounting Standard - 19 "Leases" of the Companies (Accounting Standards) Rule, 2006

The Company has taken various residential / godowns / offices premises (including Furniture and Fittings, if any) under lease and license agreements for periods which generally range between 11 months to 3 years. These arrangements are renewable by mutual consent on mutually agreed terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in Statement of Profit and Loss under Rent Expenses.

The Company has taken certain equipment on an operating lease and the future minimum committed lease rentals are given as follows on the basis of current usage -

9 Segment Reporting

The Company is engaged mainly in "Construction and Engineering" segment. During the previous year, the Company has started Real Estate Business which is a different segment of "Real Estate Development" and additionally the Company has revenue from Windmills. Revenue from such activities is not significant and accounts for less than 10% of the total revenue and total assets of the Company. Therefore no disclosure of separate segment reporting as required in terms of Accounting Standard AS -17 "Segment Reporting" is done. The Company also primarily operates under one geographical segment namely India.

10 Disclosure of transactions with Related Parties, as required by Accounting Standard - 18 "Related Party Disclosures" has been set out in a separate Annexure - 2.

11 The current period is from 1^st October, 2014 to 31^st March, 2016 . The comparative figures for the Previous period are for the period from 1^st January, 2014 to 30^th September, 2014. The figures for both these periods are therefore not strictly comparable.

12 I n the opinion of the Management, Current Assets and Non-Current Assets other than Fixed Assets and Non-Current Investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

13 The Company has during the year, with effect from 1^st January, 2015 has extended the terms of the supports by way of loans to the overseas Special Purpose Vehicles which hold the Company's equity investment in overseas subsidiaries and Joint Ventures by treating the loans as long term loan repayable at the end of 5 years. Since these SPV's are in the nature of non integral operation of the Company, exchange gain / loss on restatement of such loan are carried in the Foreign Exchange Translation Reserves in accordance with AS -11 "The Effects of changes in Foreign Exchange Rates" issued under the Companies (Accounting Standard) Rules, 2006.

14 Balances of Trade Receivables, Trade Payables, Loans and Advances are as per the Books of Accounts are subject to confirmation and reconciliation.

15 Previous period figures are regrouped and rearranged with those of the current period.

16 Details of Rounded Off Amounts

The Financial Statements are represented in Rupees Crore. Those items which were not represented in the financial statement due to rounding off to the nearest Rupees Crore are given below :