Evaluación de la competencia social.

The following description is a summary of the relevant regulations and policies as prescribed by the Government of India. The summary of regulations set out below is not exhaustive, and is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional legal advice.

There are no specific regulations in India governing the construction industry. Set forth below are however certain significant legislations and regulations that are generally adhered to by this industry in India:

General

Our Company is engaged in the business of infrastructure projects and is mainly into building of roads, bridges, construction and up-gradation of airports, highways and other civil construction. Contracts by our Company are executed in pursuance of tenders issued by the Government, Government agencies, Government companies, private companies, public companies and multinational companies or by orders placed by them. For the purpose of executing the work undertaken by the Company, we may be required to obtain licenses and approvals depending upon the prevailing laws and regulations applicable in the relevant State and depending on the project required to be executed. For details of such approvals please see section “Government Approvals” beginning on page 127 of this RHP/Prospectus.

Regulation for the road sector

The primary central legislations governing the road sector are the National Highway Act, 1956 and the National Highway Authority of India Act, 1988.

National Highways Act, 1956 (“NHA”)

Under NHA, the central government is vested with the power to declare a highway as a national highway and also to acquire land for this purpose. The Central Government may by notification, declare its intention to acquire any land when it is satisfied that for a public purpose such land is required for the building, maintenance, management or operation of a national highway. NHA prescribes the procedure for the same. Such procedure relates to declaration of an intention to acquire, entering and inspecting such land, hearing of objections, declaration required to be made for the acquisition and the mode of taking possession.

The Central Government is responsible for the development and maintenance of national highways. However, it may direct that State Governments may also exercise such functions. Further, the Central Government has the power to enter into an agreement with any person for the development and maintenance of a part or whole of the highway. Such person would have the right to collect and retain fees at such rates as may be notified by the Central Government.

The National Highways (Collection of Fees by any Person for the use of Section of National Highways / Permanent Bridge/ Temporary Bridge on National Highways) Rules, 1997 provides that the Central Government may enter into agreements with persons for development and maintenance of the whole or part of a national highway / permanent bridge / temporary bridge on national highway. Such person may invest his own funds for development or maintenance and is allowed to collect and retain the fees at agreed rates from different categories of vehicles for an agreed period for the use of the facilities created herein.

The rates of fees and the period of collection are decided by the Central Government and the factors taken into account to decide the same include expenditure involved in building; maintenance, management and operation of the whole or part of such section; interest on the capital invested; reasonable return, the volume of traffic; and the period of such agreement.

Once the period of collection of fees by the person is completed, all rights pertaining to the section, permanent bridge or the temporary bridge on the national highway would be deemed to have been taken over by the Central Government.

National Highways Authority of India (“NHAI Act”)

The NHAI Act provides for the constitution of an authority for the development, maintenance and management of national highways. Pursuant to the same the National Highways Authority of India (“NHAI”) was set up in 1995. Under the NHAI Act, the Central Government carries out development and maintenance of the national highway system through NHAI, an autonomous body. Pursuant to the same, NHAI has the power to enter into and perform any contract necessary for the discharge of its functions under the NHAI Act. The NHAI commenced the National Highway Development Project involving the conversion of 14,279 kilometers of national highways to 4/6-lanes, at a total estimated cost of Rs. 54,000 Crore. This development program is founded on a revenue model comprising tolls and a cess on fuel, to build roads which deliver sustained performance.

In an effort to provide for additional financing of its projects, the NHAI has taken measures to attract private sector participation in development of projects. The NHAI Act prescribes a limit in relation to the value of the contracts that may be entered into by NHAI. However, such contracts can exceed the value so specified with the prior approval of the Central Government. The NHAI provides that the contracts for acquisition, sale or lease of immovable property cannot exceed a term of thirty days.

The Government aims to attract both foreign and domestic private investments in construction and maintenance of National Highways. Projects may be offered on Build Own Transfer (“BOT”) basis to private agencies. The concession period can be unto a maximum of 30 years, after which the road is transferred back to NHAI by the concessionaries.

The bidding for the projects takes place in two stages as per the process provided below:

 In the pre-qualification stage, NHAI selects certain bidders on the basis of technical and financial expertise, prior experience in implementing similar projects and previous track record; and

 In the second stage, NHAI invites commercial bids from the pre-qualified bidders on the basis of which the right to develop the project is awarded.

Where projects are funded by multilateral funding agencies such as the World Bank or the Asian Development Bank, the selection takes place in consultation and concurrence with the funding organization. For other types of projects, selection is as per standards work procedures. Wide publicity is given to NHAI tenders so as to attract attention of leading contractors and consultants. Notice inviting tenders is posted on the web site of the NHAI and published in leading newspapers.

Private sector participation in the road sector is sought to be promoted through the following initiatives as well:  the Government ensures that all preparatory work including land acquisition and utility removal is completed

before awarding of the project;

 right of way is made available to the concessionaires free from all encumbrances;

 NHAI / Government may provide capital grant up to 40% of project cost to enhance viability on a case to case basis;

 100% tax exemption for 5 years and 30% relief for next 5 years, which may be availed of in 20 years; and  Duty free import of specified modern high capacity equipment for highway construction.

Joint Ventures between the public and private sectors

The Government is seeking greater private sector participation and financing in the modernization and upgrading of existing airport facilities including through BOT, Build Own Lease Transfer (BOLT), Build Own Operate Transfer (BOOT), Lease Develop Operate (LDO), Joint Ventures (JV) and management contracts. Besides the current proposals for Mumbai and Delhi airports, this also includes plans to modernize thirty non-metro airports by inviting private participation.

Environmental and Labour Regulations

Depending upon the nature of the projects undertaken by the Company, applicable environmental and labour laws and regulations include the following:

 Contract Labour (Regulation and Abolition) Act, 1970;

 Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996;

 Factories Act, 1948;

 Payment of Wages Act, 1936;  Payment of Bonus Act, 1965;

 Employees’ State Insurance Act, 1948;

 Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;  Payment of Gratuity Act, 1972;

 Shops and Commercial Establishments Acts, where applicable;  Environment Protection Act, 1986;

 Minimum Wages Act, 1948;

 Hazardous Waste (Management and Handling) Rules, 1989;  Workmen’s Compensation Act, 1923;

 Environment Protection Act, 1986;

 The Water (Prevention and Control of Pollution) Act, 1974; and  The Air (Prevention and Control of Pollution) Act, 1981.

 Inter State Migrant Workers Act, 1979.

The following paragraphs detail the major legislations applicable to our business.