Hyderabad, India, August 29, 2009: IL&FS Engineering and Construction Company Limited [Maytas] has reported a turnover of Rs.1335 crores for the year ended March 31, 2009 as against Rs.1637 Crores for the previous year, a reduction of 19 %. The Company has reported a net loss of Rs.489.79 Crores as against net profit of Rs.99.64 crores of the previous year.

There is an increase in personnel cost by Rs.55 crores which is 8% of the revenue as against 4% of previous year. The interest cost and depreciation cost increased by Rs.141 Crores and Rs.35 crores respectively over previous year. The total of these increases is Rs. 231 crores and is on account of under absorption of fixed cost due to reporting lower level of operation as against planned for the year.

In addition to the fixed expenses there is a Notional loss of Rs. 38 crores on account of restatement of foreign currency loans, and Rs. 57 crores on account of various provisions created and writing offs against advances. During the current year under review, there are share of losses to the extent of Rs.18 crores from Joint venture contracts where Maytas Infra is partner as against profits of Rs.13 crores of previous year. There are losses on account of variations in the work done and client not certifying the work done by Maytas Infra and some Liquidated Damages imposed by clients.

The losses for the year are broadly on account of un-absorbed fixed expenses like personnel cost, interest, depreciation and administrative costs. This is on account of reporting lower level of operations as against planned for the year. During the year, the Company has also provided a notional loss on account of restatement of foreign currency loans and various provisions created and writing off provided against advances. The Company has recorded the share of loss from joint venture contracts as against profits of previous year. There are losses on account of variations in the work done and client not certifying the work done by Maytas Infra and some Liquidated Damages imposed by clients.

Financial Results for the First Quarter Ending June 30th 2009

Maytas Infra has reported a turnover of Rs. 208 crores for the first quarter ended June 30, 2009 as against Rs. 384 crores, of the corresponding period of the previous year, a reduction of 46 %. The Company has reported a net loss of Rs. 16.28 crores for the first quarter ending 30th June 2009 as against net profit of Rs. 20.05 crores for the corresponding period of the previous year. There is an overall improvement in the operations of the Company. The Company has reported a cash profit of Rs.2.50 crores for the first quarter.

CONSOLIDATED RESULTS

IL&FS Engineering and Construction Company Limited on a consolidated basis has achieved a turnover of Rs. 1645 crores (Consolidated) for the year ended 31st March 2009 as against the turnover of Rs.1874 crores in the previous year, reduction of 12% over the previous year. The Company has reported a net loss of Rs. 473.56 crores for the year as against a net profit of Rs. 90.75 crores in the previous year.

The order book of the Company stood at Rs.7332 crores as on 31st July 2009.

Commenting on the results, Mr. Ved Jain, Honourable Director nominated by Government of India, said, “The unprecedented events that occurred in the Company have seriously affected its business operations during the financial year ended 31st March, 2009 to a larger extent. The substantial operational loss is primarily due to low level of operations, project cancellations and project cost escalations.” He also added, “That the operations of the Company have been brought to revival path due to proactive steps taken by the Government nominee Directors. The Board is happy to note that the Company is slowly but surely emerging out of the turbulent times and inching towards its goal of being player to reckon with in the infra domain. The Board is working closely with the management team to strengthen the processes in the Company for improving its financial health and cash flow.”