Policy No. Date W.E.F. Revision Pages Contract Policy INDEX Sr. No.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 Particular Introduction Major Works Covered under Contract System Input of the Contract Lead Time for Awarding Contract Contract Intimation Note Criteria for contractor selection Procedure of selecting a contractor Criteria for Issue of Repeat Contracts Standard Contracts Issue of Work Order Authority Level to Finalise and issue work order Termination of a Contract (work order) Statutory Monitoring of Contracts Approved formats

04 1 June 2008 Fourth 3/36

st

Page No 1 to 2 3 4 5 6 7 to 8 9 10 11 12 to 13 14 15 16 17 18 19 20 21 to 22 23 to 25 26 to 29 30 to 32

a. Contract Intimation Note b. Comparative Statement c. Proposal of Contract Award d. Work Order e. Indemnity Bond f. Bank Guarantee for Mobilisation Advance g. Bank Guarantee in lieu of Initial Security
Deposit h. Bank Guarantee for conversion of cash amount of Security deposit in form of Retention Money

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages 1. Introduction

04 1 June 2008 Fourth 3/36

st

Objective: To provide competent, quality conscious contractors, as per budget and scheduling guidelines, to the Project Management department for execution of planned works. The objective can be further detailed as under: 1. Providing capable, skilled and efficient contractors on scheduled dates, taking care that work is not delayed. 2. Structuring contracts so as to create incentives for timely completion of quality work and enabling reasonable profit for contractors adhering to agreed performance criteria. 3. Selecting the best permutation combination for the type of contract (FLO, PML, FML) keeping in mind the economics and the skillset of the contractor, combined with the prevailing best practices. 4. Constantly learning from local and international best practices in contracting policy, contract terms, implementation technologies and selection of competent contractors and implementing the same / engaging them in our organization. The Group is committed to having a sound Contract Policy that will develop along with the organic growth of operations thus continuously harnessing latest available technology, expertise and skills in the process, developing a pool of contractors who shall grow with the group. The Groups standing Contract Policy is aimed at fulfilling the following key objectives among others geared to meet time-cost-quality effectiveness in the execution of Projects and the product delivery system oriented to total customer satisfaction. What activity forms a contract? Both materials and services are needed to successfully execute a project. Hence, the Purchase department and Contract cell form an interlinked group fulfilling the Procurement function. Any activity which only involves the delivery of a material to a location will be handled by Purchase viz. any activity on which only VAT / Sales Tax is chargeable. Any activity which involves the usage of labour at site shall be treated as a contract viz. any activity on which service tax is chargeable. Structure of Contacts Department The Contracts cell is a part of the the Planning department. The Contracts cell will be headed by a Level 1 (General Manager) associate who will be reporting the Level 0 (VP) head of the Planning department. The Contracts cell also has Budgeting and Estimation sub-cell headed by a Level 2 associate, who reports to the Level 1 associate heading the Contracts cell. This policy only deals with the Contracts cells functions, excluding the functions of the Budgeting and Estimation sub-cell, which are dealt with separately.

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

The working of the Contracts cell will be handled on the basis of contract groups, with the contracts split into 3 groups (categories): No . 1 Group Preconstruction works, Civil works and miscellaneous works Finishing Works Contracts Handled (eg.) Appointment of Consultants, Demolition, Survey, Soil Investigation, Barricading, Excavation, RCC, Masonary, Plaster, Road, Compound Wall MasterFormat 2004 Divisions 02, 03, 04, 11, 13, 31, 32, 35, 41 (and any other divisions not covered by the other groups)

Services Works

Carpentary, Gypsum, False 05, 06, 07, 08, 09, 10, 12 Ceiling, Internal Painting, External Painting, Flooring, Tiling, Waterproofing, Kitchen Works, Windows, Fabrication, Plumbing, Electrical, HVAC, 14, 21, 22, 23, 25, 26, 27, Automation / Security, 28, 33, 34, 44, 48 Power Backup, Sewage Treatment, Water Treatment, Vertical Transportation, Mechanical Works

All composite contracts will be handled by the group which has the highest % value of the composite contract. In addition, there will be a separate Contract Administration group. This group will have the responsibility of handling the contract once the contract is awarded and the contractor has mobilized at site. All activities thereafter, including dispute resolution, claims, changes, final bill, contractor rating etc. will be handled by the Contracts Administration group. Each of the groups shall be handled by an associate of Level 2 (Manager). Each Manager shall have atleast 2 Level Sr. Engineers working under him / her. Each group will also have a common pool of Engineers (0.25-0.5 Engineers for each Sr. Engineer or Engineer) who will assist the Sr. Engineer in the various processes described below on an as needed basis. All associates and managers would be rotated from one group to another on annual basis by VP Planning (in month of April of each FY). No associate will continue in any one group for a period of more than 36 months. Types of Contracts: Each contract shall be of one out of the following three categories:
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

1. Full Material and Labour (FML) Where the company provides no material or labour required for execution of the project. 2. Part Material and Full Labour (PMFL) Where the company provides part of the material required for execution of the project. 3. Full Labour Only (FLO) Where the company provides all the material required for execution of the project. Contract Code Each contract shall also be given a 13-digit code based on the following system: LXXXXXXCCCCCC Where L Local Municipal Authority XXXXXX Project Code CCCCCC Code identifying type of Contract (numerals) based on the Master Format 2004 system. Types of Projects Projects of the company primarily fall into one of the following types: Residential Office Retail Luxury Corporate Mall High end Quality Shopping Centre Aspirational Other The different types of projects require different levels of finishes, workmanship and infrastructure. Process: The contracts team will be responsible for the following outputs for each project: The key responsibility of the contracts team is to ensure the selection and mobilization of quality contractors within the specified parameters of budget and schedule. In addition, the administration of the contract will also be handled by the Contracts cell. Other outputs: No . 1 Output Compre hensive List of Activitie s Contract s Tracker Responsi bility Manager of the 3 contracts groups Sr. Engineer from the 3 contracts group Recipient Scheduling; Project Management; Estimation GM Contracts (monthly), VP Planning (quarterly) Timeline Within 7 days of the end of Design Development Initiate within 15 days of receipt of final DD Package; Update each month by each Inputs required Design Developm ent details. Estimated Budget, Contracts Schedule, Input From Architect

Budgeting & Estimation Scheduling

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages 3 Contract or Databas e Manager of the 3 contracts groups Internal group Ongoing

04 1 June 2008 Fourth 3/36

st

New Contract Assessme nt Form; Contracto r Appraisal form

Project Management ; Administrati ve Services (as applicable)

Selection of Contractors Based on the type of project and the type of contract, the appropriate selection of contractors will be made on the basis of cost-value analysis and to this end the prospective Contractors will be subjected to a careful evaluation process as to their qualifications, resourcefulness, technological capacity both in terms of men and machines, experience and demonstrated professionalism. Formulation of the terms of Contract Whilst Contracts will be varying in nature according to the peculiarities of the project, design, technology selected and the accepted terms of the contractor the peculiarities will normally be compiled into a condensed code of special conditions for each contract. All other contractual terms meeting the strict requirements of the company as per standard policies in practice shall be codified into a uniform General Conditions of Contract, which will remain standard terms for every contract the company enters into with various vendors, barring nominal variations here and there. Central to every contract however will be the legal framework in which a contract has to be drawn in, therefore it is essential that every contract meets the legal criteria compulsorily. For every PMFL or FML contract, it shall be assessed as to what is the quantum of material value vis--vis the total contract value. If the same is estimated to be at 70% or higher, then the process of award of contract will be as follows: 1. Finalization of Specifications Contracts, in consultation with Purchase w.r.t. materials to be procured by company / contractor. 2. Float of Tender Contracts 3. Technical Evaluation Contracts 4. Shorlisting of 3 top bidders, after Technical Evaluation and forwarding same to Purchase for Commercial Negotiation Contracts 5. Commercial Negotiation and recommendation of contractor to be selected Purchase 6. Award of Contract and Contract Administration - Contracts

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages 2. Major Works Covered under Contract System Contracts

04 1 June 2008 Fourth 3/36

st

Consultants ~ Architect ~ RCC Consultant ~ Prestress Consultant ~ Landscape Architect ~ Land Survey ~ Geotechnical Consultant ~ Hydrographic Survey ~ Service Consultant Carpentry work work & False ceiling Sauna Bath External Faade Consultant Building Illumination Environmental Consultant LEED Consultant Building Graphic Consultant

Contractors ~ Demolition ~ Bore well ~ Soil Investigation ~ Excavation ~ Piling (Foundation/Shore) ~ Pile breaking ~ Anti-termite treatment ~ Civil work RCC masonry, Plastering etc Electrical ~ Electrical work Plumbing Fire Fighting HVAC BMS Chillers ~ Flooring ~Aluminium Windows ~ Fire Fighting work ~ Fabrication ~ Waterproofing ~

STP ~ Plumbing work Rain water Harvesting Solar Energy

~ Security system ~ POP

Acoustic ~ Painting work Swimming Pool, Steam Bath,

~ ~ ~ ~ ~

~ Elevators, Air Conditioner etc. ~ Furniture ~ Swimming pool, Gymnasium ~ Decorative items (FRP, Mirrors etc) ~ STP ~ D. G. Set ~ Infra structure works ~ Dry Cladding ~ Structural Glazing ~ Roofing (FRP etc)
PLANNING DEPT. POLICIES

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages ~ BMS ~ Chillers ~ Tree cutting ~ China Mosaic work

04 1 June 2008 Fourth 3/36

st

3. Input of the Contract Various inputs required from Architect Cell, Project Co-ordinating cell & Estimation cell to finalise any contract as tabulated below : Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 Responsible form Planning Dept. Architect / Project coordinator Project coordinator /Q.S. Architect Project coordinator Project coordinator Project coordinator /Q.S. Project coordinator / Schedule Engineer Architects Architects Project management Purchase Taxation Structural consultants

Description Specification of work Bill Of Quantities Advance Copy of preliminary drawings Tender document (Services) Tender drawings (Services) Estimates or Budget / rate analysis Construction schedule of the Project Working drawings Changes in drawing/specification s Changes modifications done at site Rates of materials Changes in Taxation rules Structural drawings/ consumption limits

External Agency Architect / Consultant Architect / Consultant Architect Service Consultant Service Consultant Consultant -

4. Lead Time for Awarding Contract

LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

Sr . N o. 1

Type of Contr act Petty Contra cts

Type of work

Work order Limit

Minor Contra cts

Temporary Godown Temporary Gate Barricadin g Supply of water Borewell Soil Investigation Carting of debris Departmen tal Labour supply Carpentry work POP & Gypsum work M.S. Grill & Railing work Compound wall Gate Waterproof ing work Infrastruct ure work CCTV & Security system Intercom System -

Minimum Lead time from date of Activity Initiation Certificate Start T N of Issue Contra Tender of ct E Flow E work proces order s N G D E - 30 days R P R N.A. O T I A T - 55 days I O N S -3 days

Upto Rs. 1 Lacs (Contract beyond Rs.1 lac will be treated as minor contract)

Rs. Lacs

1-10

- 60 days

E P A R A

-15 days

(Contract beyond Rs.10 lac will be treated as major contract.)

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages 3 Major Contra cts Piling work Mass Excavation Flooring work Internal painting work External Painting work Aluminium window work Electrical work Plumbing work Fire Fighting work Civil work (Labour) Civil work (with material) Structural Glazing work STP Chillers HVAC Swimming Pool BMS D.G.Set Lifts

04 1 June 2008 Fourth 3/36

st

- 60 days

- 55 days

-15 days

Above 10 lacs

- 90 days T I - 90 days - 90 days - 240 days O N

- 80 days

-21 days

Special Contra cts

- 85 days

- 21 days

- 85 days - 235 days

- 60 days - 150 days

5. Contract Intimation Note (CIN) (For Contracts not in Contract Schedule) During the progress of work at project site, new activities may arrive which are not included in Construction Schedule and so in contract schedule. In such cases the Project in-charge should inform to the contract department well in advance. The Project in-charge will prepare a contract intimation note (CIN) as per approved format with brief specifications of work, quantum of work, nature of contract (i.e. labour contract or labour cum material contract etc) etc. and forward it to Planning/Contract department. On receipt of CIN, the contract
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

department will select a contractor by following standard procedure for awarding of contract. The contract intimation should be submitted well in time so that proper analysis of work/rates and negotiation could be done with the potential contractors. The contract department needs enough time for the exercise. It is required to intimate the contract department in time after considering the lead time required for the activity so that the work could be commenced without any delay. 6. Criteria for contractor selection Quality Schedule Capacity of Contractor Cost Quality The quality of work is one of the important factors while selecting a contractor and hence it should be given proper weightage. We can not select a contractor only on the basis of rate but also consider his quality of work executed in recent past. Therefore, before going for rate comparison we should approve the quality of work of the contractor. This can be done by visiting his ongoing/completed work. The quality factor plays an important role in selection of contractor for high end projects. Schedule Meeting schedule and completing project in time is very important not only to stay in the business but also to increase our reputation, market premium and save indirect cost. We should keep this issue in mind while selecting a contractor if contractor completes his job in time then only we can complete our project as per schedule. Time over run will not only spoil our name in the market but also end up with higher project cost. Meeting schedule is more important in high end project because time over run is more expensive in these projects. Therefore, while selecting we should analyse the contractor commitment and his ability to meet the schedule. Capacity The capacity of contractor can be judged by his background, past experience, financial strength, technical competency, availability of machine, equipment
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

and manpower etc. The background and experience of the contractor can be analyse from the size and type of project handled in the past, technical background of his employees etc. The other major factor, which decides the contractor ability to deliver is the present quantum of work in hand. There may be case that the contractor is competent to handle the job but he is over burdened with quantum of jobs in hand. In those cases we should be extra careful in awarding jobs to such contractor. The contractor financial strength is the other major issue to be considered in rating. Though the financial strength of a contractor is an indirect issue it is very important to complete the job on time. The financially weak contractor can not have control over the progress of work rather it will be dependent on availability of finance. Such contractors will ask for payment every now and then without much progress in work. Therefore, it is necessary to check the financial strength of a contractor, it can be done by obtaining income tax clearance certificate, solvency certificate etc. All these factors should be duly considered at the time of rating the contractor. Though the contractor promises to complete the work in given schedule we should analyse his ability to complete the work as per schedule. Cost Cost efficiency is the common objective in the current competitive environment. Therefore, cost is one of the most important parameter for contractor analysis. However, we can not take cost in isolation rather we should compare the rates of different contractors for given quality of work, execution schedule etc. The objective is to go for most competitive rate and not the cheapest rate. However, the parameter for contractor selection may differ from project to project. If the rate is the deciding factor for mass construction projects, it is the work speed, work quality, contractor reliability, etc for premium projects. The contractor credentials and his ability to deliver work are important issues for premium projects. If a tried and tested contractor is marginally expensive as compared to new one, we should go for tried contractor provided he has proven his commitment to timely completion and quality of work in previous projects. It does not mean that we are not cost conscious in premium projects but we try to achieve cost efficiency by meeting quality standard and project completion in time. Therefore, our objective is to achieve overall cost benefit and efficiency, balancing quality, schedule and cost depending on the type of project. Criteria for contractar Selection for major contracts
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Capacity Strength Past Experience Testimonials Completion certificates, certified final bills, due diligence.

04 1 June 2008 Fourth 3/36

st

Size and nature of projects completed and ongoing works

Financials

Organizationa l strength Quality Quality of work of past and ongoing projects Completion on time Record of past projects

Machinery, Staff and workmen

Income tax, sales tax clearance certificates, Bank solvency, PF, ESIC registration and receipts. Machinery list and organizational chart

Due diligence and certificates of past clients, repute of present and past clients.

Workorders, final bill certificates of previous clients

Economy How he fares with other with other competitors 7. Procedure of selecting a contractor Preparation of Tender document including specification of work, Bill of Quantities Terms and conditions as per standard contracts (described under Standard Contract), tender drawings etc. For services, arrange the tender document from the Service Consultants. Study the tender document received from Consultants to ensure the Specification, Bill of Quantities, Terms & Conditions, tender drawings etc. along with estimate.
PLANNING DEPT. POLICIES

Comparison statement / Rate Analysis

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

Invite quotation from at least 5-6 potential contractors of which 4 should be from an approved list of contractors. All the quotations should be received in writing. Prepare comparative statement to compare quotations in approved standard format. All agencies should be called for negotiation. All quotes to be treated confidentially before rival/competing contractors. If any contractor agrees for a change in quoted rate during the meeting, collect a revised quotation from him or make a note on the original quotation and get it signed by him as acceptance of negotiated rates. Visit potential contractor place to check their capability to handle the work and also visit some of their previous work to check work quality, speed of work, general performance, co-operation and attitude etc. Take references. Shortlist contractor / contractors at best possible rates after bringing all contractors at par as to terms and conditions. Prepare a proposal of Bids as per the approved standard format with recommendations/rankings and submit it to Head of Planning department for interview of the contractor/Final negotiations/approval if decided by the Authority. Prepare work order in quadruplicate and distribute one each to (1) contractor (2) Accounts dept. (3) Contracts dept. (4) Site.

8. Criteria for Issue of Repeat Contracts An existing Contractor can be considered for a similar job in the same or another project without calling for competitive quotations on the satisfaction of the following criteria : Has demonstrated adequate financial resources and his history should show that at no stage of his prior execution, the work had suffered for want of a reasonable requirement of finance. He should have demonstrated reasonable conduct in abiding by the payment cycles administrated by the Company for his progressive / final payments. Has adequate experienced staff / skilled workmen strength deployed at work site. Contractor should have demonstrated sound organization at all times during the course of his prior execution. Has adequate and modern fleet of equipment necessary and deployed for performing the given work. Has ability to augment additional resources in terms of finance, manpower, and equipment/tools/tackle/machinery at any time during the progress of work, on exigency.
PLANNING DEPT. POLICIES

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages Is not a habitual claims maker.

04 1 June 2008 Fourth 3/36

st

Does not have a history of serious or unresolved dispute and is amenable to settlements enforced by the Authority. Is willing to work at the same item rates that have applied in his prior/existing contract while taking up the new job for similar or identical items. The new job has all or most items of work similar or identical to the prior or existing execution the Contractor has been/is involved in. The new site conditions are similar or identical to the prior/existing site where the Contractor has worked/is working. Is willing and able to mobilize for the new job immediately without loss of time with men and machinery. The existing Contractor, so nominated for the new Contract, will not claim any fresh mobilization advance unless warranted and allowed by the Owner. He will abide by the same terms and conditions that have applied to his previous Contract to the extent the new Contract is similar or identical in nature. Feed back from Project Manager for satisfactory performance of contractor for work executed/executing.

In the event the Contractor prefers to apply different or new rates to the items in the new Contract, or is unable to mobilize men and machinery within the required time, or is lacking financially to take up the job immediately, or the proposed site/work is largely dissimilar in nature or conditions, then it would be pragmatic to call for competitive offers for the work. 9. Standard Contracts These are the standard formats of each type of contract include standard specifications of work, scope of work, standard conditions, special conditions, standard modes of measurements, payment terms and all other aspects required to form a complete contract document. These will be used as a reference document before going for any contract. All tender documents should be made as per these standard formats. Terms & Conditions mutually agreed in the negotiations at variance with the stipulations of the standard document shall be incorporated in work orders. Standard Rates These are commonly accepted rates by all agencies working with organization or any new agency. These can be derived for items such as Tiling, Painting, POP, Carpentry, civil works related to infrastructure etc. Rates for such items can be finalized by inviting quotations from at least 6-8 potential contractors
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

out of which 4 should be from the approved list of contractors. Common rates should be derived for all items by comparing quotes in standard format. The rates derived should be accepted by all the agencies called. These rates will be applicable to all projects and will be used as reference before awarding new contracts. Petty works (below 1 lac) at sites can be certified at these rates. The rates will be reviewed twice in a year. 10. Issue of Work Order Construction is a complex job it needs quite a long time to complete and many agencies would involve in the process. Therefore, it is essential to document the terms and conditions of agreements with the outside agencies failing to which may lead to a dispute between owner and contractor. It is essential to issue a work order / enter into an agreement with the contractor once all terms and conditions of the contract are finalized. The payment schedule should be clearly mentioned in work order. The details like advance money to be paid, deduction of advance paid in the form of cash, material, machine, amount and period of retention money to be held by the company, etc should be spelt out in work order. Payment of Advance : To pay only against Bank Guarantee of equivalent amount from Scheduled / Nationalised Banks. B. G. should be in prescribed format of the Owner. Mode of recovery of advances to be mentioned. Retention Money : Standard percentage of retention will be 5% for the period of 12 months after completion of Job. No retention will be kept under aggregate value of Rs. 5000/-. Retention can be kept in cash through R.A.bills or in form of Bank Guarantee kept valid upto completion date and it should be in prescribed format of the Owner. Work order should be self explanatory in terms of labour contract or labour and materials contract, details of activities, specification of work, rate, work order value, terms of payment, retention , taxes etc. Send original copy of work order to the selected contractor to whom the work is being awarded and obtain his acceptance in the form of acceptance letter and also by signing the work order. When there is a possibility of exceeding work order quantity or contractor bill exceeding work order limit, in such cases amendment / variation to the work order should be done and approved by the competent authority before accounting or making payments for such an exceeding work. The contract department should maintain a contractors register containing contractor wise details of work awarded (i.e. ref. work order no, type of contract, work order amount etc.)
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

Following points should be considered in the work order / agreement in detail. Scope of work Progress of work Quality of work Schedule of work Rejection of work Defects, improper work and substandard materials Lead of material Additions and alterations Temporary labour hutments Supervision of work Salary and wages of labour Subletting Damage done Contractor Default Termination of work Payment terms Advance payment Retention amount Penalty/Bonus Final bill Escalation Arbitration Workmens compensation Insurance of material against fire, theft etc. Defects liability period Liquidity damages Mode of measurements(including area norms) Advance recovery Wastage and reconciliation norms Taxes and duties Free supply of materials (in case of part material contract) Water and electricity
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Risk and purchase clause Safety measures Co-ordination with other agencies Extra items Delay/stoppage of work Drawings Specifications of materials brought by contractor General conditions of contract Special conditions of contract.

04 1 June 2008 Fourth 3/36

st

The work order should be serially numbered and specific to each company / project / Building no. / Year. All future correspondence / transactions relating to a work order should have work order number reference. Copy of work orders will be distributed by planning dept. one each to (1) contractor (2) Accounts dept. (3) Contracts dept. (4) Site. It is recommended to have work order issue record which will provide information about all work orders issued for various activities under given project. The work order register will act as a reference document for control. 11. Authority Level to Finalise and Issue Work Order Type of Contrac t Petty Contract Type of work Temp. Godown Temp. Gate Soil Investigation Water resource survey Carting of debris Supply of water Temp. Fencing Work Order Limit Upto Lacs Rs. Committe e Final Authorit y Signing Authorit y

1 Proj. charge

In- Proj. In- Proj. Incharge charge

(Contract beyond Rs.1 lac will be treated as minor contract)

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Minor Contract Major Contract Dept. Labour Supply Woodwor k Provide & Fixing Glass Mass excavation Compoun d Gates Window grills P.O.P. work & False ceiling Staircase & Balcony railing C.C.T.V. Security system EPABX, Telephones Rs. Lacs 1-10 Sr.Engg Manager DGM (Contract beyond Rs.10 lac will be treated as major contract.) DGM

04 1 June 2008 Fourth 3/36

st

V.P.

Piling work Civil work (Labour) FireFighting system Alu. Windows Flooring & Tiling Internal Painting External Painting Plumbing work Electrical work Waterproofi ng work

Rs.10-25 lacs

Sr.Enginee r Manager DGM GM Sr.Engg Manager AGM DGM GM/VP

GM

Rs.25-50 lacs

V.P. V.P.

Rs.50 lacs-10 Cr Above 10 Cr

V.P. -doV.P. -doDirector

Special

- Civil work (with materials) Structural

PLANNING DEPT. POLICIES

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages Contract s Glazing Lifts HVAC Chiller Swimming Pool STP D.G.Set Manager AGM DGM GM/VP V.P.

04 1 June 2008 Fourth 3/36

st

V.P.

Note : 1. For contract below Rs.1.0 lac the Project in-charge will finalize contract and issue work order to contractor and send one copy to contract/planning department for record through I.O.M. 12. Termination of a Contract (Work Order) Termination Guidelines Contract shall be terminated in case of one or more of the following items. Not starting the work on schedule date even after signing the workorder/commintment. Failing to give relative progress according to the schedule. Work carried out by the contractor not in accordance with the specifications of the work order. Quality of work not upto the required standards. Not adhering to the terms and conditions of the workorder. The Employer is entitled to determine and terminate the contract at any time should, in the opinion of the Employer, the cessation of work becomes necessary for any reason whatsoever like paucity of funds, or breaches committed by the Contractor, faulty workmanship or etc. However, termination in all cases has to be legal and therefore lawfully carried out. That means lawful termination requires the principles of natural justice to be followed. An illegal termination can lead to dispute and claims, which might affect the Company adversely. For lawful termination the following procedure is to be followed:1) The contractor should be given a Notice in writing shall be given in advance according to the case, stating reasons and after expiry of the Notice the Contract can be forthwith determined but without prejudice to the claims of either party in respect of any antecedent breach thereof in which case the value of approved materials at site and of work done to date by the Contractor (and accepted) will be settled in full at the rates specified in the Contract. Notice in writing from the Employer of such determination and the reason therefore shall be conclusive evidence thereof.
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

2) The termination clause included in the contract should therefore also stipulate the mode of settlement of all accounts with the Contractor and allocate a specific time period for such settlement. 3) The Contractor shall have no claim to any payment of compensation or otherwise on account of any profit or advantage which he might have derived from the execution of the contract in full but which he did not derive in consequence of determination of the contract. Cost of completing remaining work to be worked out before finalizing the bill of the terminated contractor In the normal course, it is not advisable to terminate the contract in the middle because it normally end up with higher cost and time over run. Therefore, it is necessary to appraise the contractor in detail before placing a work order to avoid such strapped situation. In case of termination of contract it should be clearly studied the implication on the project in terms of cost, execution schedule, legal hazards, etc. 13. Statutory Monitoring of Contracts All contracts entered into shall be dept./Contract cell through fixed periods for the following :continuously monitored by Planning

1) Bank Guarantees : Requirement as per contract. - Stage wise submissions as indicated in the contract. - Expiry dates - Renewal alerts 2) Labour licenses/Registration of the Contractor/Migrant labor Registration/ESIC Registration /Workmens compensation policy etc. wherever applicable. 3) Indemnity Bonds as prescribed under the Contract 4) Contractors All Risk Policy as prescribed under the Contract. 5) The Project Manager as the nominated representative of the Owner for Administration of the Contract shall carry out all routine correspondence with the Contract. However, all issues pertaining to the Contractors performance, Contractors request for Time Extensions, Extra Items, Variation of Quantities, Purchase of material, selection of material (wherever required), Contractual conditions and their interpretation, scope of an item (if disputed by the Contractor), etc. shall be escalated by the Project Manager to the Planning
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

Dept. for redressal or resolution and therefore all assistance required thus by the Project Manager shall be rendered by the Planning Dept. 6) Changes in laws of Govt. rules, taxes, duties etc. 14. Standard penalty and bonus clause Time shall be the essence of all the contracts issued by the group. Timely completion of Projects shall be given utmost important and therefore the company shall levy Penalty and bonus clauses to ensure the same. Penalty and bonus clause should be related to value of the contract Scheduled Contract Duration (Days) 0-92 93-183 183 365 366 + Penalty / Bonus as % of Contract Value Maximum Penalty / Bonus (excludin g Damages) 5% 6% 6% 6% Damages (for penalty only)

0.33% per day 1.5% per week .75% per week .5% per week

.66% per day for all delays beyond 15 days 3% per week for all delays beyond 4 weeks. 2% per week for all delays beyond 8 weeks 1% per week for all delays beyond 12 weeks

15. Attribution of delays Providing of the following on time shall be in companies scope, and any delay occurring other than the following list shall be in contractors scope: Type of Contract Drawings & Permissions Agreed Material Specifications FML Yes Yes No PMFL Yes Yes Yes FLO Yes Yes Yes Delay shall be noted by the Contractor, along with the Project Management team, on the contract document each month. Such a tracking sheet will be inserted in each Work Order. Any delays, other than as recorded in the said sheet, shall be deemed to be to the Contractors account / scope. Format Delay Tracking Sheet:
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

Following delays are attributable to the Employer / Contract giver (no. of days): Month Drawings & Permission Agreed Total Contrac PMs Specification s Material Delay tors Sign & s for Sign & Date Month* Date April 08

* This is the total delay for the month on account attributable to Lodha and not the sum of the 3 individual delay components. 16. Payment Period It shall be assured that Payment terms mentioned in Work orders are adhered to. No. of days required for processing of bill to payment shall be fixed for each department processing the bills. Preparation and checking on site --------------------Accounts dept. ---------------------Cheque signing -------------------Issue to the contractor ---------------------17. Linkage of quality and time to payment A percentage of the total value of contract 2% shall be kept for quality of work.

18. Approved Formats

Contract Intimation Note Comparative Statement Proposal of Contract Award Work order Indemnity Bond Bank Guarantee For Mobilisation Advance Bank Guarantee For Security Deposit Bank Guarantee For conversion of cash amount of Security Deposit in form of Retention Money.

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages CONTRACT INTIMATION NOTE

04 1 June 2008 Fourth 3/36

st

Intimation No : Project Name / Code Building Name / No Work Details Type of Contract Sr. No . Activit y details Brief Specificatio n Qty. of Quantu Materia m of l labour involve work d involved Dat e of Star t

Date :

Date of Completio n

Remark (Numb er & date of work order

Prepared by : Site Engg.

Checked by : Site in-charge Contract Dept.

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages COMPARATIVE STATEMENT OF QUOTATIONS Date : Name of Project Name of work Type of Contract : . : . : . : . : . Contractor I Contractor II

04 1 June 2008 Fourth 3/36

st

No. of quotations called for No. of quotations received Sr Description of items U Quantit n y i t

Contractor III

Rat e 1 2 3 Total Vat Service tax Other taxes Total with tax Advance required Payment terms Remarks Break up

Amount

Rat e

Amount

Rat e

Amount

Prepared By : Contract Dept.

Authorised By : (DGM/GM/VP)

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages PROPOSAL FOR AWARD OF CONTRACT

04 1 June 2008 Fourth 3/36

st

Date :Name of Project :Paying Company :Subcontract Estimated Cost ::-

Following are the Agencies who were invited to Quote : Sr. N o . Name of Subcontractor Original Quote Final Quote Remarks

Recommendation Of Contract Manager / Engineer

S ignature/Date Recommendation Supported By V.P Comments:

S
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages ignature/Date

04 1 June 2008 Fourth 3/36

st

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Work Order To, Date : Contractor Name & Address Name of Project : :

04 1 June 2008 Fourth 3/36

st

Work order Ref. No. Subject Reference Dear Sir, : :

_____________________ work. (Labour/with material work) Your quotation ref. no. dated subsequent discussions at our H.O. and our

We are pleased to issue you the work order for above mentioned work. Your Scope of work, Bill Of Quantities and Terms & conditions are as stipulated below : A. B.

Scope of work : Terms and Conditions : Progress of work Quality of work Schedule of work Rejection of work Defects, improper work and substandard materials Lead of material Additions and alterations Temporary labour hutments Supervision of work Salary and wages of labour Subletting Damage done Contractor Default Termination of work Payment terms Escalation Penalty/Bonus Arbitration Workmens compensation Insurance of material against fire, theft etc. Contract Authority ISO requirement

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages C. Yours For Authorised Signatory accept & Confirm Encl- Schedule of work FORMAT OF INDEMNITY BOND Bill Of Quantities Truly,

04 1 June 2008 Fourth 3/36

st

We

THIS DEED OF INDEMNITY made on this the _________ day of ________ Two thousand by ____________ having its office at ________hereinafter referred to as Contractors (which term or expression shall unless excluded by or repugnant to the subject or context be assigns) IN FAVOUR OF CLIENT NAME/COMPANY NAME AND ADDRESS a Company having its registered office at CLIENT Address hereinafter referred to as CLIENT NAME (which term or expression shall unless excluded by or repugnant to the subject or context to be deemed to mean & include its legal representatives, executors, administrators and assigns). WHEREAS: CLIENT NAME is desirous of __________________________________________________________ __________________________________________ (hereinafter referred to as the Site). AND WHEREAS CLIENT NAME of desirous of executing___________________________________ __________________________ (hereinafter referred to as the Works) at the Site and has invited tenders for the same. AND WHEREAS CLIENT NAME after considering the tenders received pursuant thereto by its letter No. _______________ dated ______________________ accepted the tender given by ____________ a registered __________________ having its place of business at _____________________(hereinafter referred to as the Contractor which expression shall unless repugnant to the context or meaning thereof deemed to include his/its heirs, legal representative, executors, administrators and assigns). AND WHEREAS it is one of the terms of the said Tender/Contract that the contractors shall give an indemnity in the manner hereinafter. NOW THIS DEED OF INDEMNITY WITNESSETH AS FOLLOWS:
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

In pursuance of the said Tender/Contract and for the consideration aforesaid we the Contractor hereby do indemnify and keep harmless CLIENT NAME against and from all claims, demands, actions, proceedings, losses, damages, recoveries, judgements, costs, charges and expenses which may be made or brought or commenced against the CLIENT NAME or which the CLIENT NAME may or may have to bear or pay or suffer directly or indirectly: 1. In respect of all claims, civil or criminal complaints/liabilities, site mishaps, fire hazards and other accidents including injury or damage whatsoever to any property real or personal or death of any person/s or disputes and/or damages occurring, or arising out of any mishaps at the site due to faulty work, negligence, faulty and unsound construction and/or for violating any laws, rules and regulations in force for the time being while executing/executed the said Works by us. As result of our non payment of any statutory duties levied/leveiable on us or we committing breach of any of the rules, regulations, orders, directives, instructions that may be issued by any authority under the Central Excise Act, 1944, Central Sales Tax Act, 1956, or any other statute or law for the time being in force. Resulting from any willful default or negligence or breach of duty on our part or any sub-contractor/s if any, servants or agents. By our employee or of sub contractor/s, if any, under the Workmen compensation Act and Employees liability Act, 1939 or any other law, rules and regulations in force for the time being and any acts replacing and/or amending the same or any of the same as may be in force at the time and under any law in respect of injuries to persons or property arising out of and in the course of the execution of the contract work and/or arising out of and in the course of employment of any workmen/employee. Any non-compliance or improper compliance of statues, rules and regulations which are applicable to us and/or our employees, in respect of (a) Employee provident fund act, 1952, b) Employees State Insurance Act, 1948, c) Contract Labour (R&A) Act, 1971, d) Minimum Wages Act, e) Shops and Establishment Act, f) Payment of wages Act, g) Bonus Act, h) the Bombay Municipal Corporation Act and any other law which may become applicable in respect of the Tender/Contract work. Any act or omission or default by us or our sub-contractor/s if any, our/their servants or agents or of any person employed or engaged upon or in connection with the Works or any part thereof which may involve any loss, damage, liability, civil or criminal action.

2.

3. 4.

5.

6.

IN WITNESS WHEREOF THE PARTIES HAVE HERETO SET THEIR RESPECTIVE HANDS ON THIS _________ DAY OF _________ MONTH OF 2002.
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Signed & Delivered by

04 1 June 2008 Fourth 3/36

st

Contractor/s In the presence of __________________ BANK GUARANTEE FOR MOBILISATION ADVANCE This deed of guarantee executed at Mumbai on this _________ day of ________ 2002 by the ____________ Bank, a Schedule/Nationalized Bank registered under the registered under the _______________________ Act ___________having their Branch office at ___________________ to as the Guarantor, which expression shall unless repugnant to the context or meaning thereof includes its successors and assigns) IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated under the companies Act 1956, having its registered office at CLIENT ADDRESS (hereafter referred to as CLIENT NAME which expression shall unless repugnant to the context or meaning thereof include its successors and assigns). WHEREAS: CLIENT NAME is desirous of getting (hereinafter referred to as the Site). ______________________________________ of

AND WHEREAS CLIENT NAME of desirous executing___________________________________ __________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuant thereto by its letter No. _______________ dated ______________________ accepted the tender given by ____________ a registered __________________ having its place of business at _____________________(hereinafter referred to as the Contractor which expression shall unless repugnant to the context or meaning thereof deemed to include his/its heirs, legal representative, executors, administrators and assigns). AND WHEREAS pursuant to acceptance of the Tender of the said Contractor, CLIENT NAME and the said Contractors have entered into an Agreement on______________ along with Annexures and schedules thereto (hereinafter referred to as Tender/Contract). AND WHEREAS it is one of the Tender/Contract that CLIENT NAME may on application by Contractor and in its sole discretion advance to the Contractor to the extent of ___% of contract amount as and by way of mobilization advance
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

against the bank guarantee to secure the repayment of the same and for use by the Contractor for the purpose of the said works and for no other purpose. AND WHEREAS the Contractor have requested CLIENT NAME to grant to them the said mobilization advance of Rs. _________which CLIENT NAME has agreed to grant on the Contractor furnishing guarantee for Rs. __________. NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT: I) In consideration of CLIENT NAME agreeing to advance to the Contractor the said sum of Rs. ___________ (Rupees________________________) as and by way of mobilization advance subject to the terms and conditions as set out in the aforesaid Tender/Contract executed by the Contractor, we the ______________________bank, the said Guarantor hereinabove mentioned hereby unconditionally and irrevocably guarantee unto CLIENT NAME that the said Contractor will diligently, efficiently and satisfactorily perform all their obligations under the various terms and conditions of the said contract and the tender conditions within the time stipulated therein to the full satisfaction of CLIENT NAME and its Architects failing which Guarantor shall on demand by CLIENT NAME without demur or protest and without recourse to the Contractor or anybody else pay unto CLIENT NAME the sum of Rs.________________(Rupees ____________________ Only) at the registered office of CLIENT NAME at Mumbai. It is agreed that notwithstanding what is contained hereinabove CLIENT NAME shall be entitled to invoke this guarantee if the contract with the Contractor is terminated either by CLIENT NAME as provided in the contract/Tender conditions, and certificate issued by CLIENT NAME to the effect that contract is so terminated shall be conclusive and binding upon the Guarantor and shall not be called in question either inside or outside the court, arbitration, tribunal or any other authority. The guarantor hereby further covenants that1) The Guarantor shall pay the aforesaid sum on demand made in writing by CLIENT NAME without any demur or without any recourse to Contractor or anybody else and not withstanding any dispute or difference that may exist or arise between CLIENT NAME and the Contractor. This guarantee shall be a continuing guarantee and shall not be revoked by the guarantor without prior consent in writing of CLIENT NAME. The notice of demand in writing issued by CLIENT NAME shall be conclusive proof as regards the amount due and payable to CLIENT
PLANNING DEPT. POLICIES

II)

III)

2)

3)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

NAME under this guarantee and it shall not be disputed by the Guarantor either inside or outside the court, tribunal or arbitration or other authority. 4) The decision of CLIENT NAME on the breach of the terms and conditions of the said Contract/Tender by the Contractor of their failure to perform obligations or discharge their duties under the said Tender/Contract shall be final and binding on the Guarantor and shall not be disputed by the Guarantor inside or outside the court, tribunal, arbitration or other authority. The Guarantor shall also indemnify and keep CLIENT NAME indemnifies from and against all losses, damages, costs, claims, actions, proceedings, recoveries, judgement and expenses whatsoever which CLIENT NAME may suffer, pay or incur by reason of or in connection with any such default on the part of the Contractor in their performance, obligations including cost of any legal proceedings if any, which may be initiated against CLIENT NAME. Any neglect or forbearance on the part of CLIENT NAME in enforcing any of the terms and conditions of the said Tender/Contract or any indulgence shown by CLIENT NAME to the Contractor or any variation in the said Tender/Contract made by mutual agreement between CLIENT NAME and Contractor or any other act or deed on the part of CLIENT NAME which but for this clause may have the effect of discharging the Guarantor under the law relating to the guarantees shall not discharge the Guarantor from its obligations herein and the Guarantor shall be discharged only by compliance by the Contractor of all their obligations, duties under the said Tender/Contract and recovery/repayment in full to CLIENT NAME. 7) This guarantee shall not be affected by any infirmity or absence or irregularity in the exercise of the powers by or on behalf of the Contractor to submit the said tender and enter into the said Contract or any change in the constitution or dissolution of the Contractor or change in the name of the said Contractor. We, as guarantors hereby agree that without our concurrence or notice to us, the contractors, CLIENT NAME shall be at liberty to vary alter or modify the terms and conditions of the said Tender/Contract and in particular to defer, postpone or revise the payments on such terms and conditions as may be considered necessary by CLIENT NAME and the Contractor. We as guarantors agree that a liability under this guarantee shall be in no manner be affected by any such, variations, alterations, modifications, waiver, dispensation with or release of security and that no further consent of us as Guarantors is
PLANNING DEPT. POLICIES

5)

6)

8)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

required for giving effect to any such variations, alterations, modifications, waiver, dispensation with or release of security liability. 9) It shall not be necessary for CLIENT NAME to exhaust its remedies against the Contractor before invoking this guarantee and the guarantee herein contained shall be enforceable against the Guarantor not withstanding any other security which CLIENT NAME may have obtained or may obtain from the Contractor or may, at the time when this guarantee is invoked, be outstanding and unrealized. To give effect to this guarantee, CLIENT NAME may act as though we the Guarantors are the principal Debtors to CLIENT NAME. The Guarantor undertakes to pay to CLIENT NAME, the amount hereby guaranteed within 24 hours of being served with a written notice requiring the payment of the amount either by hand delivery or by Registered Post or by Speed Post. The Guarantor hereby agrees that this guarantee shall be valid and be in force for a period of __________months i.e. upto _____________(Date). Notwithstanding anything to contrary contained hereinabove our liability under this guarantee is restricted to Rs. _____________/(Rupees _________________ Only) and any claim arising under this guarantee shall be preferred by CLIENT NAME within a period of six months from the aforesaid date of expiry of this guarantee.

10) 11)

12) 13)

IN WITNESS WHEREOF THE WITHIN NAMED GUARANTOR HAS CAUSE THESE PRESENTS TO BE EXECUTED ON ITS BEHALF BY THE HAND OF ITS DULY AUTHORISED OFFICIAL ON THE DATE AND AT THE PLACE FIRST HEREINABOVE WRITTEN. Signed and delivered for And on behalf of ______________ (Bank) The guarantor Shri______________its duly authorized official BANK GUARANTEE IN LIEU OF INITIAL SECURITY DEPOSIT This deed of guarantee executed at Mumbai on this _________ day of ________ 2002 by the ____________ Bank, a Schedule/Nationalized Bank registered under the registered under the _______________________ Act ___________having their Branch office at ___________________ to as the Guarantor, which expression shall unless repugnant to the context or meaning thereof includes its successors and
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

assigns) IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated under the companies Act 1956, having its registered office at CLIENT ADDRESS (hereafter referred to as CLIENT NAME which expression shall unless repugnant to the context or meaning thereof include its successors and assigns). WHEREAS: CLIENT NAME is desirous of getting (hereinafter referred to as the Site). ______________________________________ of

AND WHEREAS CLIENT NAME of desirous executing___________________________________ __________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuant thereto by its letter No. _______________ dated ______________________ accepted the tender given by ____________ a registered __________________ having its place of business at _____________________(hereinafter referred to as the Contractor which expression shall unless repugnant to the context or meaning thereof deemed to include his/its heirs, legal representative, executors, administrators and assigns). AND WHEREAS pursuant to acceptance of the Tender of the said Contractor, CLIENT NAME and the said Contractors have entered into an Agreement on______________ along with Annexures and schedules thereto (hereinafter referred to as Tender/Contract). AND WHEREAS it is one of the terms of the said Tender/Contract that the contractor shall deposit with CLIENT NAME Rs. ___________being the _______% of the accepted Tender/Contract value agreed by the Contractor at the time of submitting the Tender which shall not bear any interest and which shall be liable for forfeiture in the event of Contractor failing to observe any terms of Tender/Contract or non complying which the conditions of the Tender/Contract. AND WHEREAS at the request of Contractor, CLIENT NAME has agreed not to insist for the initial security Deposit and accept a bank guarantee from the Guarantor in lieu thereof as hereafter contained. NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT: I) In consideration of CLIENT NAME agreeing not to insist upon the initial security Deposit and accepting this Guarantee in lieu thereof from the Contractor for the sum of Rs. _________ (Rupees_____________________________), we the ______________________bank, the said Guarantor hereinabove mentioned hereby unconditionally and irrevocably guarantee unto CLIENT NAME that the said Contractor will diligently, efficiently and satisfactorily perform all their obligations under the various terms and conditions of the said contract and the tender conditions within the time stipulated therein to the full satisfaction of
PLANNING DEPT. POLICIES

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

CLIENT NAME and its Engineers/Architects failing which Guarantor shall on demand by CLIENT NAME without demur or protest and without recourse to the Contractor or anybody else pay unto CLIENT NAME the sum of Rs.________________(Rupees ____________________ Only) at the registered office of CLIENT NAME at Mumbai. II) It is agreed that notwithstanding what is contained hereinabove CLIENT NAME shall be entitled to invoke this guarantee if the contract with the Contractor is terminated either by CLIENT NAME as provided in the contract/Tender conditions, and certificate issued by CLIENT NAME to the effect that contract is so terminated shall be conclusive and binding upon the Guarantor and shall not be called in question either inside or outside the court, arbitration, tribunal or any other authority. The guarantor hereby further covenants that1) The Guarantor shall pay the aforesaid sum on demand made in writing by CLIENT NAME without any demur or without any recourse to Contractor or anybody else and not withstanding any dispute or difference that may exist or arise between CLIENT NAME and the Contractor. This guarantee shall be a continuing guarantee and shall not be revoked by the guarantor without prior consent in writing of CLIENT NAME. The notice of demand in writing issued by CLIENT NAME shall be conclusive proof as regards the amount due and payable to CLIENT NAME under this guarantee and it shall not be disputed by the Guarantor either inside or outside the court, tribunal or arbitration or other authority. The decision of CLIENT NAME on the breach of the terms and conditions of the said Contract/Tender by the Contractor of their failure to perform obligations or discharge their duties under the said Tender/Contract shall be final and binding on the Guarantor and shall not be disputed by the Guarantor inside or outside the court, tribunal, arbitration or other authority. The Guarantor shall also indemnify and keep CLIENT NAME indemnifies from and against all losses, damages, costs, claims, actions, proceedings, recoveries, judgement and expenses whatsoever which CLIENT NAME may be made or brought or commenced against CLIENT NAME or which CLIENT NAME may suffer, pay or incur directly or indirectly by reason of or in connection with any such default on the part of the Contractor in their performance,
PLANNING DEPT. POLICIES

III)

2)

3)

4)

5)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

obligations including cost of any legal proceedings if any, which may be initiated against CLIENT NAME. 6) Any neglect or forbearance on the part of CLIENT NAME in enforcing any of the terms and conditions of the said Tender/Contract or any indulgence shown by CLIENT NAME to the Contractor or any variation in the said Tender/Contract made by mutual agreement between CLIENT NAME and Contractor or any other act or deed on the part of CLIENT NAME which but for this clause may have the effect of discharging the Guarantor under the law relating to the guarantees shall not discharge the Guarantor from its obligations herein and the Guarantor shall be discharged only by compliance by the Contractor of all their obligations, duties under the said Tender/Contract and recovery/repayment in full to CLIENT NAME. That this guarantee shall not be affected by any infirmity or absence or irregularity in the exercise of the powers by or on behalf of the Contractor to submit the said tender and enter into the said contract or any change in the constitution or dissolution of the Contractor or change in the name of the said Contractor or change in the constitution of the Company/CLIENT NAME. We, as guarantors hereby agree that without our concurrence or notice to us, the contractors, CLIENT NAME shall be at liberty to vary alter or modify the terms and conditions of the said Tender/Contract and in particular to defer, postpone or revise the payments on such terms and conditions as may be considered necessary by CLIENT NAME and the Contractor. We as guarantors agree that a liability under this guarantee shall be in no manner be affected by any such, variations, alterations, modifications, waiver, dispensation with or release of security and that no further consent of us as Guarantors is required for giving effect to any such variations, alterations, modifications, waiver, dispensation with or release of security liability. It shall not be necessary for CLIENT NAME to exhaust its remedies against the Contractor before invoking this guarantee and the guarantee herein contained shall be enforceable against the Guarantor not withstanding any other security which CLIENT NAME may have obtained or may obtain from the Contractor or may, at the time when this guarantee is invoked, be outstanding and unrealized. To give effect to this guarantee, CLIENT NAME may act as though we the Guarantors are the principal Debtors to CLIENT NAME. The Guarantor undertakes to pay to CLIENT NAME, the amount hereby guaranteed within 24 hours of being served with a written notice requiring the payment of the amount either by hand delivery
PLANNING DEPT. POLICIES

7)

8)

9)

10) 11)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

or by Registered Post or by Speed Post without demur and objections and without reference to the Contractor and without questioning the right of CLIENT NAME to make such demand or the propriety or legality of the demand. 12) The Guarantor hereby agrees that his guarantee shall be valid and be in force for a period of __________months i.e. upto _____________(Date). If it becomes necessary to extend this guarantee beyond the aforesaid date on account of any reason whatsoever, we undertake to extend the validity period of this guarantee on CLIENT NAME request until such time as requested by CLIENT NAME. CLIENT NAME decision in this respect shall be final and binding. Notwithstanding anything to contrary contained hereinabove our liability under this guarantee is restricted to Rs. _____________/(Rupees _________________ Only) and any claim arising under this guarantee shall be preferred by CLIENT NAME within a period of six months from the aforesaid date of expiry of this guarantee. The guarantee shall be in addition to and not in substitution for or derogation of any other security held by the CLIENT NAME and shall not merge with or otherwise prejudice or affect or be prejudiced or affected by such other security, right, remedy, guarantee or indemnity and may be enforced without first having recourse to such other security remedy, guarantee or indemnity.

13)

14)

IN WITNESS WHEREOF THE WITHIN NAMED GUARANTOR HAS CAUSE THESE PRESENTS TO BE EXECUTED ON ITS BEHALF BY THE HAND OF ITS DULY AUTHORISED OFFICIAL ON THE DATE AND AT THE PLACE FIRST HEREINABOVE WRITTEN.

Signed and delivered for And on behalf of ______________ (Bank) The guarantor Shri______________its duly authorized official

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

03 07/09/07 Third 33/36

BANK GUARANTEE FOR CONVERSION OF CASH AMOUNT OF SECURITY DEPOSIT IN THE FORM OF RETENTION MONEY This deed of guarantee executed at Mumbai on this _________ day of ________ 2002 by the ____________ Bank, a Schedule/Nationalized Bank registered under the registered under the _______________________ Act ___________having their Branch office at ___________________ to as the Guarantor, which expression shall unless repugnant to the context or meaning thereof includes its successors and assigns) IN FAVOUR OF The CLIENT NAME\COMPANY NAME incorporated under the companies Act 1956, having its registered office at CLIENT ADDRESS (hereafter referred to as CLIENT NAME which expression shall unless repugnant to the context or meaning thereof include its successors and assigns). WHEREAS: CLIENT NAME is desirous of getting (hereinafter referred to as the Site). ______________________________________ of

AND WHEREAS CLIENT NAME of desirous executing___________________________________ __________________________ at the Site and has invited tenders for the same.

AND WHEREAS CLIENT NAME after considering the tenders received pursuant thereto by its letter No. _______________ dated ______________________ accepted the tender given by ____________ a registered __________________ having its place of business at _____________________(hereinafter referred to as the Contractor which expression shall unless repugnant to the context or meaning thereof deemed to include his/its heirs, legal representative, executors, administrators and assigns). AND WHEREAS pursuant to acceptance of the Tender of the said Contractor, CLIENT NAME and the said Contractors have entered into an Agreement on______________ along with Annexures and schedules thereto (hereinafter referred to as Tender/Contract). AND WHEREAS it is one of the terms of the said Tender/Contract that the contractor shall deposit cash amount of Security Deposit in the form of Retention Money with CLIENT NAME made by the Contractor at the time of submitting the Tender which shall not bear any interest and which shall be liable for forfeiture in the event of the Contractor failing to observe any terms of the Tender/Contract or non complying with the conditions of the Tender/Contract.
LODHA GROUP OF COMPANIES PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

AND WHEREAS at the request of Contractor, CLIENT NAME has agreed not to insist for the cash amount of security deposit in the form of Retention Money and accept a bank guarantee from the Guarantor in lieu thereof as hereafter contained.

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

NOW THEREFORE THIS DEED OF GUARANTEE WITNESSETH THAT: I) In consideration of CLIENT NAME agreeing not to insist upon the cash amount of Security Deposit in the form of Retention Money and accepting this Guarantee in lieu thereof from the Contractor for the sum of Rs. _________ (Rupees_____________________________), we the ______________________bank, the said Guarantor hereinabove mentioned hereby unconditionally and irrevocably guarantee unto CLIENT NAME that the said Contractor will diligently, efficiently and satisfactorily perform all their obligations under the various terms and conditions of the said contract and the tender conditions within the time stipulated therein to the full satisfaction of CLIENT NAME and its Architects failing which Guarantor shall on demand by CLIENT NAME without demur or protest and without recourse to the Contractor or anybody else pay unto CLIENT NAME the sum of Rs.________________(Rupees ____________________ Only) at the registered office of CLIENT NAME at Mumbai. It is agreed that notwithstanding what is contained hereinabove CLIENT NAME shall be entitled to invoke this guarantee if the contract with the Contractor is terminated either by CLIENT NAME as provided in the contract/Tender conditions, and certificate issued by CLIENT NAME to the effect that contract is so terminated shall be conclusive and binding upon the Guarantor and shall not be called in question either inside or outside the court, arbitration, tribunal or any other authority. The guarantor hereby further covenants that1) The Guarantor shall pay the aforesaid sum on demand made in writing by CLIENT NAME without any demur or without any recourse to Contractor or anybody else and not withstanding any dispute or difference that may exist or arise between CLIENT NAME and the Contractor. This guarantee shall be a continuing guarantee and shall not be revoked by the guarantor without prior consent in writing of CLIENT NAME. The notice of demand in writing issued by CLIENT NAME shall be conclusive proof as regards the amount due and payable to CLIENT NAME under this guarantee and it shall not be disputed by the Guarantor either inside or outside the court, tribunal or arbitration or other authority. The decision of CLIENT NAME on the breach of the terms and conditions of the said Contract/Tender by the Contractor of their
PLANNING DEPT. POLICIES

II)

III)

2)

3)

4)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

5)

failure to perform obligations or discharge their duties under the said Tender/Contract shall be final and binding on the Guarantor and shall not be disputed by the Guarantor inside or outside the court, tribunal, arbitration or other authority. The Guarantor shall also indemnify and keep CLIENT NAME indemnifies from and against all losses, damages, costs, claims, actions, proceedings, recoveries, judgement and expenses whatsoever which CLIENT NAME may suffer, pay or incur by reason of or in connection with any such default on the part of the Contractor in their performance, obligations including cost of any legal proceedings if any, which may be initiated against CLIENT NAME. Any neglect or forbearance on the part of CLIENT NAME in enforcing any of the terms and conditions of the said Tender/Contract or any indulgence shown by CLIENT NAME to the Contractor or any variation in the said Tender/Contract made by mutual agreement between CLIENT NAME and Contractor or any other act or deed on the part of CLIENT NAME which but for this clause may have the effect of discharging the Guarantor under the law relating to the guarantees shall not discharge the Guarantor from its obligations herein and the Guarantor shall be discharged only by compliance by the Contractor of all their obligations, duties under the said Tender/Contract and recovery/repayment in full to CLIENT NAME. This guarantee shall not be affected by any infirmity or absence or irregularity in the exercise of the powers by or on behalf of the Contractor to submit the said tender and enter into the said contract or any change in the constitution or dissolution of the Contractor or change in the name of the said Contractor. We, as guarantors hereby agree that without our concurrence or notice to us, the contractors, CLIENT NAME shall be at liberty to vary alter or modify the terms and conditions of the said Tender/Contract and in particular to defer, postpone or revise the payments on such terms and conditions as may be considered necessary by CLIENT NAME and the Contractor. We as guarantors agree that a liability under this guarantee shall be in no manner be affected by any such, variations, alterations, modifications, waiver, dispensation with or release of security and that no further consent of us as Guarantors is required for giving effect to any such variations, alterations, modifications, waiver, dispensation with or release of security liability. It shall not be necessary for CLIENT NAME to exhaust its remedies against the Contractor before invoking this guarantee and the guarantee herein contained shall be enforceable against the Guarantor not withstanding any other security which CLIENT NAME
PLANNING DEPT. POLICIES

6)

7)

8)

9)

LODHA GROUP OF COMPANIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

may have obtained or may obtain from the Contractor or may, at the time when this guarantee is invoked, be outstanding and unrealized. 10) 11) To give effect to this guarantee, CLIENT NAME may act as though we the Guarantors are the principal Debtors to CLIENT NAME. The Guarantor undertakes to pay to CLIENT NAME, the amount hereby guaranteed within 24 hours of being served with a written notice requiring the payment of the amount either by hand delivery or by Registered Post or by Speed Post. The Guarantor hereby agrees that his guarantee shall be valid and be in force for a period of __________months i.e. upto _____________(Date). Notwithstanding anything to contrary contained hereinabove our liability under this guarantee is restricted to Rs. _____________/(Rupees _________________ Only) and any claim arising under this guarantee shall be preferred by CLIENT NAME within a period of six months from the aforesaid date of expiry of this guarantee.

12) 13)

IN WITNESS WHEREOF THE WITHIN NAMED GUARANTOR HAS CAUSE THESE PRESENTS TO BE EXECUTED ON ITS BEHALF BY THE HAND OF ITS DULY AUTHORISED OFFICIAL ON THE DATE AND AT THE PLACE FIRST HEREINABOVE WRITTEN. Signed and delivered for And on behalf of ______________ (Bank) The guarantor Shri______________its duly authorized official

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES

Policy No. Date W.E.F. Revision Pages

04 1 June 2008 Fourth 3/36

st

LODHA GROUP OF COMPANIES

PLANNING DEPT. POLICIES