AMBIENCE LIMITED - Cmlinks.com

epayment of the unsecured loans, may materially and adversely affect our business, results of operations and
financial condition. For further details see “Financial Indebtedness” on page 281.
Further, under current external commercial borrowing guidelines of the Reserve Bank of India, until December
31, 2009, external commercial borrowings cannot be utilised for investment in real estate, except by
corporations engaged in the development of integrated townships with prior approval of the Reserve Bank of
India. Changes in the global and Indian credit and financial markets have recently significantly diminished the
availability of credit and led to an increase in the cost of financing. If we do not have access to additional funds,
we may be required to delay or abandon some or all of our Planned Projects or to reduce capital expenditures,
advances to obtain land development rights and the scale of our operations. In the event that we are unable to
raise additional capital as a result of the conditions set forth above or other restrictions, it could materially and
adversely affect our business, financial condition and results of operation.
4. We have entered into agreements for the acquisition of land. There is no assurance that we will be
able to acquire these lands. We also undertake projects on land owned by third parties pursuant to
development agreements, which entail certain risks.
As part of our land acquisition process, we have entered into agreements to purchase land prior to the transfer of
interest or the conveyance of title of the land. We propose to acquire 143.66 acres or approximately 17.59% of
our Land Reserves, pursuant to these agreements. See “Our Business - Our Land Reserves” on page 100. Since
we do not acquire ownership with respect to such land upon the execution of such agreements, transfer of title
with respect to such land is subject to, among other things, completion of satisfactory due diligence by us and
payment of the balance of the consideration owed for such land. As a result, we are subject to the risk that
pending such payment of consideration or our due diligence, sellers may transfer the land to other purchasers or
that we may never acquire title with respect to such land, which could have an adverse impact on our business.
Further, we have entered into these agreements after paying certain advance payments to ensure that the sellers
of the land satisfy certain conditions stipulated under these agreements. There can be no assurance that these
sellers will be able to satisfy the stipulated conditions in a timely manner or at all.
In the event that we are not able to acquire this land, we may not be able to recover all or part of the advance
monies paid by us to these third parties, which amounts to approximately Rs. 67.64 million as of July 31, 2009.
Further, in the event that these agreements are either invalid or have expired, we may lose the right to acquire
these lands and also may not be able to recover the advances made in relation to such lands. Any failure to
complete the purchases of land, renew the agreements relating to such land purchases on terms acceptable to us
or recover the advance monies from the relevant counterparties could adversely affect our business, financial
condition and results of operations.
We have also entered, either directly or through our Subsidiaries, into development agreements with third
parties in respect of some of our projects. In these projects, the title to the land is owned by one or more of these
third parties and we or our Subsidiaries acquire the sole development rights to the land.These development
agreements confer to us the rights to construct, develop, market and sell the built-up area on the land to buyers.
Such projects involve working together with several third parties and our relationships with these third parties
are governed by the development agreements. Though we are generally empowered to make all operating
decisions for the development of these projects, we may be required to make certain decisions in consultation
with such third parties. Further, these development agreements are terminable by either party upon the
occurrence of a breach of the terms of the development agreements. If any sole development agreement that we
enter into with third party in respect of a parcel of land is terminated upon the occurrence of a breach, we may
not be able to carry on any developments on such land.
5. Land allotted to us by government authorities is subject to certain conditions. Failure to comply with
these conditions may result in imposition of penalties or in us being unable to develop such land.
Of our Land Reserves, 99.49 acres or 12.18%, comprise land that has been allotted (provisionally and finally) by
government authorities. We are subject to continuing conditions in respect of such land which, among other
things, include making installment payments within a stipulated timeframe and completing the construction
within a specified schedule.
We have received provisional allotment of 44.25 acres from the Visakhapatnam Urban Development Authority
(“VUDA”) in respect of our “Ambience City” Planned Project, located in Vishakhapatnam. The transfer and
possession of the land is subject to making timely payments of amounts outstanding, failure of which could
12