Construction of new terminal building at VARANASI

AIRPORT

This agreement is made and executed at New Delhi on this 23rd

day of August, 2007 between Airport Authority of India as a
statutory corporation incorporated under Airport Authority of India
Act, 1995 having its head office at Rajiv Gandhi Bhawan,
Safderjung Airport, and New Delhi-110003.

Airport Authority of India is desirous of getting the work

“Construction of New Terminal Building at Varanasi Airport” done
and invited tenders for that.

Lanco Infratech Ltd participated in the above mentioned bidding

on 29.06.2007 and that was accepted by AAI.

CONDITIONS OF CONVENANTS

• The scope of contract, consideration, terms of payment,

period of completion, defects liability period, Price
adjustment, taxes whichever applicable, Insurance,
Liquidated damages and all other terms and conditions are
contained in aforesaid contract documents. The contract
shall be duly performed by Contractor strictly and faithfully
in accordance with terms of Agreement.

• The agreement constitutes full & complete understanding

between parties and terms of presents. It shall supercede all
prior correspondence to the extent of inconsistency to the
terms and conditions contained in the Agreement. Any
modification of the agreement shall be effected only by a
swritten instrument signed by the authorized representatives
of both the parties.

Settlement of Disputes
It is agreed by both of the parties that all the difference or
disputes arising out of the Agreement of touching the subject
matter of the Agreement shall be decided by process of
settlement by Dispute Resolution Mechanism and Arbitration, as
specified in CLAUSE 57 of the General Condition of the Contract at
page GCC-43 & 44 and the provision of the India Arbitration
Act.1996 shall apply and Delhi Court alone shall have exclusive
jurisdiction over the same.

Scheduled “E”
Sl Description Applicable to this
No Contract
.
1. Name of Work “Construction of New
Terminal Building at
Varanasi Airport”
2. Estimated Cost Rs. 6498.00 lacs
3. Time allowed for execution of work 15 Months
4. Accepting Authority Chairman of AAI
5. Last Date of application 27-04-2007
6. Cost of tender documents 10000/-
7. Period of sale pf tender documents 29-05-07 to 31-05-07
8. Last date & time of receipt of tender 21-06-07 up to 15:00
documents hrs
9. Date and time of opening of tenders 21-06-07 at 15:30 hrs
10 Earnest Money Total Rs. 89,98,000/-
. only in the form of
DD/BG from any
Scheduled Banks but
not from any co
operative and Gramin
Bank in favour of
Airports Authority of
India.
11 Security deposit Shall be
. deducte@10% from
RA bills till it reaches
 5% of accepted
contact value of work.
Security deposit shall
be acceptable in the
form of BG issued by
Schedule Banks only if
the security deposit is
more than 5 lacs.
12 Market rate percentage addition to 10.00 percent
. cover overheads and profit.

13 Rates applicable CPWD, DSR-2002+

. 30.61% for Civil works
and Market rate for
Electrical works.
14 Permissible deviation limit for any 30%
. contract item, substituted item or
contract-cum-substituted item in
excess of the original value of
item(Applicable to Lumpsum
Contracts,Measurements
Contracts,based on item rates and
Percentage Rate Contracts)
15 Permissible deviation limit for items 30%
. of work not already included in the
Contract.
16 Deviation limit for item of work below 100%
. ground surface:
Permissible deviation limit for any
Contract item.
17 Percentage payable to cover NA
. contractor’s indirect expenses for
suspension exceeding thirty days
and not exceeding 3 months.
18 %age payable to cover contractor’s NA
. indirect expenses for suspension
exceeding 3 days
19 Authority competent to decide if MEMBER(P),AAI
. “any other cause” of delay is beyond
 contractor’s control.
20 Authority competent to grant MEMBER(P),AAIs
. exytension of time.

CPWD,DSR:
LIST OF MEMBER BANKS

1. State Bank of India

2. ABN AMRO BANK N.V
3. Bank of Baroda
4. Canara Bank
5. CITI Bank N.A
6. Corporation Bank
7. Deutsche Bank AG
8. HDFC Bank Ltd
9. HSBC
1 ICICI Bank Ltd
0.
1 IDBI Ltd
1.
1 Punjab National Bank
2.
1 Standard Chartered Bank
3.
1 State Bank of Travancore
4.
1 State Bank of Hyderabad
5.
1 Syndicate Bank
6.
1 Indian Bank
7.
1 Oriental Bank of Commerce
8.
1 Kotak Mahindra Bank Ltd
9.
Key Projects:
• LANCO has constructed roads and highways across India for the National Highways Authority
of India. LANCO has won the contract for construction and operation of two road projects in
Karnataka, the 81 km Bangalore-Hoskote-Mudbagal stretch on National Highway 4 and the 82
km Neelamangla - Devihalli stretch on National Highway 48 on Build, Operate and Transfer
(BOT) basis under the National Highways Development Project (NHDP) Phase III.

• The concession agreements for the projects have been signed with the National Highways
Authority Ltd. The total project cost is estimated at Rs 1300 crores and involves six laning of
16 km stretch and four laning of the remaining stretches. The concession periods are 20 and
25 years for the two projects respectively, including 30 months of construction period. The
contracts have been awarded through a competitive bidding process.s

• Lanco has also won a Rs 1,000 crore contract for constructing a portion of the Aligarh to
Kanpur section of the National Highway in Uttar Pradesh. Lanco had emerged as successful
bidder for two-laning of Aligarh to Kanpur section of NH 91 from 140 km to 418.16 km on toll
basis of National Highway Authorities of India (NHAI). The project involves two-laning with
paved shoulders of existing road, repair, widening and reconstruction of 3 major and 29 minor
bridges, construction of 5 new rail over-bridges, 4 toll plazas and other wayside amenities.
The concession period for the project is 12 years including a construction period of 18 months.

Order Book, Under Construction

• Construction of New Terminal Building at Biju Patnaik Airport, Bhubaneswar.

• 1015 MW Imported Coal –based Power Project of Udipi Power Corporation Ltd at Udupi
in Karnataka.

• 2 x 300 MW Coal-based Power Project of LANCO Amarkantak Power Ltd at Pathadi near
Korba in Chhattisgarh.

• 2 x 35 MW Hydropower Projects of LANCO Green Power Pvt Ltd in Himachal Pradesh.

• 2 x 5 MW Hydropower Projects of Vamshi Industrial Power Ltd.

• 4 X 125 MW Teesta VI Hydro Electric Project of LANCO Energy Pvt Ltd in Sikkim

• 2 X 600 MW Thermal Power Project of LANCO Anpara Power Ltd in Uttar Pradesh.

• 368 MW Kondapalli Gas Power Project

• 81 km Road connecting Bangalore –Hoskote–Mudbagal in Karnataka for NHAI.

• 82 km Road Connecting Neelamangla-Devihalli in Karnataka for NHAI.

• Construction Order for Lanco Hills.

 • Construction of New Terminal Building at Varanasi Airport for Airports Authority of India.

• Construction of Medical College at Srikakulam in Andhra Pradesh.

• Construction of Medical College at Ongole in Andhra Pradesh.

• Construction of Vedic University at Tirupati in Andhra Pradesh.

• Construction of Medical College at Belgaum in Karnataka.

• Lanco is executing the construction of New Terminal for Varanasi Airport for the Airports
Authority of India.

Orders Executed
• Rs 293 crore Veeranam water supply transmission pipeline work in Tamil Nadu, India in a
record time using 1.7 m to 1.8 m dia pipes covering a distance of 114 km. This project was
executed with Punchak as a Joint Venture Partner.

• Balance of Plant of 368 MW LANCO Kondapalli Power Project at Vijayawada in Andhra

Pradesh, India.

• Balance of 120 MW ABAN Power Project at Karuppur village in Thiruvidaimaruthur Taluk

of Tanjore District, Tamil Nadu.

• 825 bedded Asvini Hospital for Indian. Navy at Colaba, Mumbai.

• Four Laning of the National Highway 31 from Kishangunj to Islampur in West Bengal.

• Vamshi Hydro power project 10 MW

• Construction of 1st phase of 100 bed hospital, college and hostel complex etc at National
Institute of Unani Medicine Bangalore

• Construction of Railway Offices at Koparkhairane Railway Station

Projects Under Bidding

• 2640 MW (4x660 MW) Babandh Power Project Orissa

Property Development

Lanco's property development is all set to change the skyline of major metros with some of
the finest mixed property townships and realty projects incorporating state of the art features
and amenities.

Lanco's major property development projects are:

Lanco Hills
LANPRO

Lanco Ville in the IT corridor of Chennai is scheduled to commence shortly.

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Awards

EPC-World Awards 2010

for “Outstanding contribution in Power & Energy sector (Generation)”.

8th Construction World- Annual Awards 2010

for Fastest Growing Construction Company (Large Category)- 1st Rank

Lanco Infratech Ltd

 7th Construction World- Annual Awards 2009
for Fastest Growing Construction Company (Large Category)- 3rd Rank

Aban Power Company Ltd IKU II

TERI Corporate Award for "Environmental IEEMA award for "Excellence in Fast
Excellence and Corporate Social Track Commissioning of Small Hydro
Responsibility" June 2009. Projects" February 2009

PRSI Confers Golden Jubilee Award Clarion Power Corporation Ltd

for the “Most Impressive Public Relations FAPCCI Award for Excellence in
Initiatives” August 2008. Renewable Energy 2007.

Construction World NICMAR Awards2007 LANCO Institute of General

for the Second Fastest Growing Construction Humanitarian Trust (LIGHT)
Company (Medium Category) in India. TERI Award 2006-07 for Excellence in
Corporate Social Responsibility.
 PRSI National Award for House Journal PRSI Confers Golden Jubilee Award
(English) - First Prize for the “Most Impressive Public
Relations Initiatives”

LANCO Infratech Limited

Award for Excellence in Bridge Engineering 1999 from the Indian Institute of Bridge
Engineers.

LANCO Kondapalli Power Pvt Ltd

OHSAS 18001 :1999 Certification in respect of Environmental Management System by Lloyd's
Register Quality Assurance Ltd in 2005.

National Award for Excellence in Water Management 2005 by Cll - GBC Green Business
Centre.

Silver Award in Gas Power Sector for Outstanding Achievement in Environment Management
for 2003-04 from Greentech Foundation.

Leadership Efforts towards Environmental Management and Sustainable Initiative among

Corporates for 2002-03 by TERI.

Best Environment Improvement Activity Award 2002 - 03 from FAPCCI.

CM Leadership and Excellence Award in Safety, Health and Environment 2002.

ABAN Power Company Ltd

0HSAS 18001:1999 Certificate from TUV SUD Management Service GmbH Trading as TUV
South Asia Pvt Ltd.

LANCO Group Corporate Communications

2007
PRSI National Award for House Journal (English) - First Prize
PRSI National Award for Corporate Film in English - First Prize
PRSI National Award for Corporate Brochure - First Prize

2006
PRSI National Award for In- House Magazine (Content and Layout)–Second Prize
PRSI National Award for Corporate Campaign - Second Prize
PRSI National Award for Corporate Brochure - Second Prize

2005
PRSI National Award for In-House Magazine (Content and Layout)-Third Prize
PRSI State (Andhra Pradesh) Award for In- House Magazine (Content and Layout) - Second
Prize.

CSR
Objectives

• To align Lanco in all its

activities with Millenium
Development Goals and aims
and purposes of the UN
Global Compact.
•
• To improve human
development indices through
projects and programmes at
local, state and national
levels.
• •
• • To internalise the •
multifaceted responsibilities
at individual and
•
organisational levels in
addressing poverty, climate
change and social issues.
• • •
• • To partner with Indian and •
international organisations
and institutions to deliver
•
aid, assistance and
developmental resources
effectively.
• • •
• • To nuture all the elements of •
our CSR policy as a value •
system.
 Programmes:

The endeavor of LANCO Foundation in all its activities is to achieve tangible outcomes in every
sphere of Corporate Social Responsibility. The foundation has taken enlightened development
paradigms into consideration and is aligned with Millennium Development Goals and the UN Global
Compact Charter.

Lanco Foundation focuses its activities in seven sectors, including Education – Health – Livelihoods
– Environment - Neighbourhood Community Development - Relief & Rehabilitation, and - Sports &
Culture

Education Sector
In the Education sector - Lanco Foundation provides
scholarships on merit and means basis - to enrol and
complete the education at undergraduate and graduate levels.
These scholarships essentially intended to support merit
students in the neighbourhood communities of LANCO.

Lanco Foundation also conducts ‘English for Employability’

training programmes - in collaboration with the British
Council - to increase employability opportunities of
undergraduate students - through undergraduate colleges.

Health Sector:
In the Health sector, Lanco Foundation provides safe
drinking water - through tube wells - support urban health
initiatives - organise health awareness and screening camps -
including cancer awareness in rural areas in collaboration
with the Indo-American Cancer Institute & Research centre.

Livelihood Sector
In the livelihood sector, Lanco Foundation provides
employability training programmes in construction trades in
collaboration with the National Academy of Construction-
like rod fixing, shuttering carpentry, masonry for school
dropouts – and also conducts training programmes in other
areas like Information and Communication Technology -
bedside patient care - customer relations and sales –
hospitality - motor mechanics etc. in collaboration with Aide
et Action. An impressive number of over 1000
youth have so far been trained and gainfully employed. Lanco Foundation also provides
support to rural artisans - to improve their incomes through improvements in production –
marketing - and cooperative functioning.

Neighbourhood Community Development Programmes:

In the neighbourhood Community development programmes,
Lanco Foundation works in villages around project sites - to
improve the quality of basic education - health services - and
livelihood opportunities.

Environment Sector
In the Environment sector, Lanco Foundation encourages
planting of trees - and organises awareness building activities
in both rural and urban areas.

Relief & Rehabilitation sector

Under the Relief & Rehabilitation programme, Lanco
Foundation runs four Artificial Limb Fitting Centres in four
States - and provides free aids and appliances. Over 12,000
physically challenged people have so far been benefitted
from this programme. The Foundation also provides support
for economic rehabilitation of survivors of trafficking - in
collaboration with the International Organisation for
Migration

Sports & Culture

Encouraging sports and sports events like the Olympic run -
facilitating persons participating in the Olympics - providing
sports equipment to various sports academies - is another
activity of the Foundation.
Projects outlook
Contents
Chapter 1: Introduction
1.1. Preface
1.2. Acknowledgement
1.3. Meaning of Project
1.4. Executive Summary
1.5. Objectives of the Project
Chapter 2: Company Profile
2.1 History of ONGC
2.2 Profile of ONGC
2.3 Global Ranking
2.4 Vision and Mission of ONGC
2.5 Community Development of ONGC
2.6 Products of ONGC
2.7 Subsidiaries of ONGC
2.8 Research Methodology
Chapter 3: Working Capital Management
3.1 Meaning of Working Capital
3.2 Kinds of Working Capital
3.3 Need for Working Capital
3.4 Factors determining the Working Capital Requirements
3.5 Working Capital Cycle
3.6 Components of Working Capital
3.7 Working Capital Management in ONGC
3.8 Position of Current Assets and Current Liabilities in ONGC
3.9 Factors requiring consideration while estimating Working Capital
3.10 Swot Analysis
Chapter 4: Findings
Chapter 5: Suggestions
Chapter 6: Conclusions
Chapter 7: Bibliography

A model for working capital requirements and

corporate liquidity management
Abstract

A significant (and positive) development in corporate financial management over

recent years has been an increased emphasis on liquidity and the management of
operating cash flows. Reasons for this increased emphasis include economic
recession, corporate restructuring activities, and the need to increase and conserve
operating cash flaws to meet higher debt service requirements or finance more
modern facilities. In the academic, as well as the professional, world old tools are
being reassessed and new tools developed to aid the treasury professional in the
efficient management of corporate cash resources. The purpose of this paper is to
integrate two tools of liquidity management; the cash conversion period and the net
liquid balance.

The Cash Conversion Period

Initially presented by Richards and Laughlin ( 1980); the cash conversion period is
now routinely discussed in most corporate finance textbooks. (See for example,
Brigham and Gapenski (1997), Moyer, McGuigan, and Kretlow (1998), and Gitman
(1998.) The cash conversion period measures the number of days between the
actual expenditure of the firm's cash for the purchase of productive resources and
the ultimate collection of cash from product sales. Incorporated within the cash
conversion period model are management issues involving the control of
inventories, the collection of receivables, and the timing of payments for productive
resources such as materials and labor. In the cash conversion model, increases in
the number of days a product remains in inventory, increases in the number of days
required to collect receivables following the point of sale, and decreases in the
number of days a firm takes to meet its trade credit obligations will increase the
firm's cash conversion period. The increased cash conversion period reflects
additional resources required in the form of working capital to maintain the firm's
operations.

A weakness of the cash conversion period model is its inability to clearly convert the
number of days in the conversion period to a dollar amount of needed working
capital. Additionally, the model does not reflect the distinction between cash sales
and credit sales. For instance, two firms may have the same receivables conversion
period but have different credit sales/total sales ratios.

In the standard cash conversion period model (all else the same) both firms would
have the.same cash conversion period. However, the firm with the lower credit
sales/total sales ratio would clearly be in a better position to meet obligations as
they come due since a larger portion of its sales are collected sooner and with
greater certainty.

Further, the cash conversion period model does not reflect the effect of profitability
on liquidity. As the model focuses on the length of time between the expenditure of
resources to produce operating revenue and the actual receipt of the revenue, it
fails to recognize that the revenue received will exceed the expenditure by the
amount of profit earned. Since the profit represents additional resources available
to meet obligations, profitability is clearly a contributing factor to overall corporate
liquidity. As shown later, the gross profit margin and the credit sales/total sales ratio
can be incorporated into the cash conversion period model. The modified cash
conversion period can then be easily converted to dollar amount of working capital
needed to sustain the firm's operating cycle. This amount of net working capital
required for operations (NWCROP) would then serve as input in an assessment of
overall corporate liquidity.

Net Liquid Balance

Shulman and Cox (1985) and Shulman and Dambolena (1986) developed a useful
tool for liquidity analysis known as Net Liquid Balance (NLB). Essentially, the NLB
model recognizes that the firm's ability to meet its obligations as they come due is
not reflected by the firm's total working capital, but by the amount of working
capital remaining once the requirements of the firm's operating cycle are met.
Alternatively, the NLB is the difference between the firm's immediately available
cash resources and its non-operating, or negotiated, short-term debt. Empirical
tests conducted by Shulman and Dambolena indicate the NLB to be a superior
indicator of corporate liquidity when compared to more widely known indicators
such as the quick ratio. A problem with the NLB model is that the NLB is a residual
amount remaining after the working capital needed to sustain the firm's operating
cycle (NWCROP) is deducted from total working capital. Hence, a means of
estimating the amount of working capital needed to sustain the operating cycle is
needed to make liquidity analysis using NLB operational. As shown below, NWCROP
can be estimated using the modified cash conversion period model and then used
as an input to the NLB model thereby improving the effectiveness of the NLB model
in assessing corporate liquidity.

A Modified Cash Conversion Period

The traditional cash conversion period (CCP) and its components can be
presented as follows:
(1) CCP = ICP RCP - PDP

Where: CCP = cash conversion period

ICP = inventory conversion period

RCP = receivables conversion period

PDP = payables deferral period

The modified cash conversion period (MCCP) is obtained by modifying the inventory
conversion period to incorporate the gross profit margin and the receivables
conversion period to incorporate the credit sales/total sales ratio.

The Modified Inventory Conversion Period

The Modified Cash Conversion Period and Working Capital Requirements

The MCCP/NWCROP Model: A Numerical Illustration

Exhibit 1 provides a numerical example using the MCCP/NWCROP model. Assuming

hypothetical values for the components of the traditional cash conversion period,
annual sales, gross profit margin, and the ratios of purchases and credit sales to
total sales, the MCCP and NWCROP (using both the traditional CCP and the MCCP) is
determined. Performing a sensitivity analysis of the firm's sales, gross profit margin,
and credit sales/sales ratio shows some interesting results.

Sales and Working Capital Requirements

Financial professionals and educators routinely warn of the liquidity dangers

awaiting a firm that experiences rapid sales growth without proper financial
planning and controls. The rising level of sales requires additional funding to
support the inevitable increases in inventories and receivables that accompany
growth. The positive relationship between sales and working capital requirements is
shown in Figure 1. The slopes of the lines depicting the relationship are functions of
the components of the firm's cash conversion period and modified cash conversion
period. Figure 1 also shows the difference in working capital requirements for a
given level of sales when NWCROP is estimated using the MCCP as opposed to the
traditional CCP. Using the traditional CCP to estimate NWCROP results in the firm
overestimating its working capital requirements as sales grows. Using the data in
Exhibit l, we see that the modified CCP estimates of working capital requirements
are less than those indicated by the traditional CCP by almost 20%. Thus,
incorporating the effects of the gross profit margin and the CS/S ratio result in a
significant difference in the estimation of working capital requirements needed to
support sales growth. For a given level of total working capital, a firm may have
more resources available for non-operating purposes than is indicated by the
traditional CCP approach. Hence, the use of the traditional CCP as a liquidity
indicator may systematically underestimate the firm's true ability to meet its
obligations as they come due.

Working Capital Requirements and the CS/S Ratio

Figure 2 shows the relationship between NWCROP and the credit sales/total sales
ratio (CS/S). As the CS/S ratio increases, additional working capital is required. This
is intuitively obvious since a higher CS/S ratio results in more receivables for a given
sales level. Working Capital Requirements and Profitability

Figure 3 shows the relationship between NWCROP and the firm's gross profit
margin. As the gross profit margin increases the need for working capital to support
operations decreases. Incorporating profitability helps to make the cash conversion
period a better indicator of liquidity. The traditional CCP failed to recognize that the
cash inflow at the conclusion on the operating cycle is greater than the cash outflow
at the beginning of the cash conversion period. The incremental amount of cash
flow between the start and end of the cash conversion cycle is directly related to
profitability. The modified CCP incorporates the effect of the additional cash
resources made available by the generation of earnings from the firm's operating
cycle. Clearly, the more profitable the enterprise, the more cash resources
generated from soperations.

Corporate Liquidity, Working Capital Requirements and MCCP

The Net Liquid Balance approach to assessing corporate liquidity divides the firm's
total working capital into the portion required to sustain the firm's operations and
the firm's surplus cash resources or Net Liquid Balance (NLB). A positive value for
NLB indicates that the firm has sufficient cash resources to meet its short-term
obligations without reducing the resources allocated to the operating cycle. A
negative value for NLB indicates that the firm will have to acquire additional
working capital or reduce the resources committed to the operating cycle to meet
short-term obligations. If the components of the MCCP are considered to be at
optimal levels, reducing resources committed to the operating cycle may result in
lost sales, less operating efficiency, and/or a deterioration in relations with trade
creditors. All of these are symptoms of a firm with liquidity problems.
Financial managers and analysts can use the NLB as a measure of the firm's current
or expected future liquidity. The level of working capital necessary to support
operations (NWCROP) can be estimated for current or expected sales levels using
optimal values for the components of MCCP. The desired level of NWCROP can then
be compared to the firm's actual net working capital. If desired NWCROP exceeds
available working capital (NLB

Conclusion

The purpose of the paper is to integrate two tools of liquidity management; the cash
conversion period and the net liquid balance. The traditional cash conversion model
was modified to incorporate the effects of the firm's profitability and credit
sales/total sales ratio. The modified cash conversion period was then used to
estimate the working capital needed to support the firm's operating cycle
(NWCROP). The optimal level of NWCROP, when compared with available working
capital provides an indication of the surplus or deficit position of the firm with
respect to available resources not committed to the operating cycle. A surplus or
rising amount of available resources is an indicator of adequate or improving
liquidity for the firm.

• FINANCIAL STATEMENT AND THE ANALYSIS OF

RATIOES
• RECOMMENDATION ON THE BASIS OF THOSE
ANALYSIS

• BIBLIOGRAPHY