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Notes to Accounts of John Cockerill India Ltd.

Mar 31, 2022

Trade receivables include retention monies of '' 10,402.77 lakhs (As at March 31, 2021: '' 7,820.59 lakhs).

Trade receivables have been hypothecated as security for fund based and non-fund based credit facilities from banks.

Trade receivables are non-interest bearing. Trade receivable other than retention are generally on terms of 30 to 360 days credit and certain retention monies to be released towards the end of the project based on the terms of the contracts.

In determining the allowance for doubtful trade receivable, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The expected credit loss allowance is based on the ageing of days receivables (including retention) are due and the rates used in the provision matrix including specific provision.

Terms/rights attached to equity shares:

The Company has only one class of equity shares having par value of '' 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend, if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2022, the amount of dividend recognised as distribution to equity shareholders was '' Nil per share (March 31, 2021: '' 5/- per share).

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion of the paid up share capital held by the shareholders.

(a) Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(b) General reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to the Statement of Profit and Loss.

(c) Retained earnings are the profits that the Company has earned till date, less any transfers to General reserve, dividends or other distributions paid to shareholders.

(d) The effective portion of cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of âEffective portion of cash flow hedges'' will be reclassified to profit or loss only when the hedged transaction affects the profit or loss.

Provision for warranties

The Company gives warranties on certain products, undertaking to repair or replace the items that fail to comply with agreed upon specification during the warranty period. Provision made as at March 31, 2022 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of one to three years from the date of Balance Sheet.

Provision for estimated losses on contracts

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately in the Statement of Profit and Loss and provision for estimated loss is recognised in the Balance Sheet.

Since the Company is in the business of executing projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Ind AS 115 Revenue from Contracts with Customers under which project stock, manufactured items and other direct costs are considered as project cost incurred till date. Purchases figure is derived figure. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, itemwise break-up for cost of materials consumed is not available in the system.

*Matters relating to:

During the period April 2010 to December 2014, the Company had paid service tax for services rendered and paid excise duty on dispatch of goods considering contracts as divisible contracts. Service tax department issued Show cause Notice dated October 21,2015 for demanding service tax of '' 4,817.55 lakhs categorised as "works contractâ service by the Department on which excise duty of '' 10,510.51 lakhs had been paid. The Company had replied to Show cause notice and personal hearing had also been held. The Commissioner of Central Excise & Service Tax, Large Taxpayer Unit vide their order dated November 30, 2016 upheld the service tax liability of '' 4,817.55 lakhs, penalty of '' 4,817.65 lakhs and interest, as applicable, estimated to be '' 7,965.10 lakhs. An appeal had been filed by the Company before CESTAT, Mumbai dated March 20, 2017. The Company had paid appropriate excise duty on goods manufactured and service tax on service rendered. The order is seen by the Company as change of opinion by the department after higher bench judgement in one of the recent case. The Company had predeposited '' 361.32 lakhs.

In continuation to the above matter, the Company had further received show cause notice dated December 22, 2017 for the period January 2015 to March 2015 demanding service tax of '' 175.46 lakhs categorised as "works contractâ service on which excise duty of '' 377.56 lakhs had been paid and show cause notice dated March 19, 2018 for the period April 2015 to June 2017 demanding service tax of '' 759.27 lakhs categorised as "works contractâ service on which excise duty of '' 1,670.08 lakhs had been paid. The Company had replied to Show cause notice and personal hearing had also been held. The Commissioner of Central Excise & Service Tax, Large Taxpayer Unit vide their order dated February 14, 2019 upheld the service tax liability of '' 175.46 lakhs and '' 759.27 lakhs respectively and penalty of '' 175.56 lakhs and '' 759.37 lakhs respectively and interest, as applicable, '' 201.31 lakhs and '' 703.30 lakhs respectively. An appeal had been filed by the Company before CESTAT, Mumbai dated May 06, 2019. The Company had paid appropriate excise duty on goods manufactured and service tax on service rendered. The order is seen by the Company as change of opinion by the Department after higher bench judgement in one of the recent case. The Company had pre-deposited '' 13.16 lakhs and '' 56.94 lakhs respectively.

"Matter relating to Panvel Municipal Corporation had raised Local Body Tax demand for the period from 01.01.2017 to 31.03.2017 and from 01.04.2017 to 30.06.2017 under rule 33 of Panvel Municipal Corporation Act vide order dated November 13, 2018 & March 14, 2019 respectively. Total demand was of '' 186.97 lakhs consisting LBT Tax of '' 117.80 lakhs, interest of '' 12.92 lakhs and penalty of '' 56.25 lakhs. Of which Tax had been paid and interest is provided in the books. Penalty is not provided in the books. Appeals were filed by the Company in PMC Appellate Authority dated November 29, 2018 and March 27, 2019 respectively against demand of interest and penalty.

Note 34 Disclosure of Lease as per Ind AS 116Lessee

The following is the summary of practical expedients elected on application:

â¢ Used a single discount rate to a portfolio of leases with reasonably similar characteristics.

â¢ Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date of initial application.

â¢ Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

The Company has lease contracts for various items of Plant and machinery, land, flat, vehicles and other equipment used in its operations. Leases of land generally have lease terms between 49 and 66 years, while flat generally have lease terms between 1 and 3 years. Generally, the Company is restricted from assigning and subleasing the leased assets.

The Company also has certain leases of Plant and machinery and vehicles with lease terms of 12 months or less and leases of office equipment with low value. The Company applies the ''short-term lease'' and ''lease of low-value assets'' recognition exemptions for these leases.

The Company had total cash outflows for leases of '' 16.69 lakhs during the year ended March 31,2022 (For the year ended March 31, 2021: ''24.96 lakhs).

Refer Note 4 for additions to right-of-use assets and the carrying amount of right-of-use assets as at March 31,2022.

The effective interest rate for lease liabilities is 10.70%,

The maturity analysis of lease liabilities are disclosed in Note 36.13.

Note 35 Employee benefitsa) Defined contribution plan:Superannuation

All eligible employees are entitled to benefits under superannuation, a defined contribution plan. The Company makes quarterly contributions until retirement or resignation of the employee. The Company recognises such contributions as an expense when incurred. The Company has no further obligation beyond its quarterly contribution.

Company''s contribution to superannuation recognised in Statement of Profit and Loss of '' 33.31 lakhs (for the year ended March 31, 2021 '' 41.72 lakhs) (included in Note 26).

Provident fund

All eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employees and employer (at a determined rate) contribute monthly. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulation. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

Company''s contribution to provident fund recognised in Statement of Profit and Loss of '' 183.21 lakhs (for the year ended March 31,2021 '' 202.90 lakhs) (included in Note 26).

b) Defined benefit plans:Gratuity (funded)

The Company sponsors funded defined benefit plans for all eligible employees. The defined benefit plan is administered by a separate fund that is legally separated from the entity.

Under the gratuity plan, the eligible employees are entitled to post-retirement benefit at the rate of 15 days salary for each year of service until the retirement age of 60 years, without any payment ceiling. The vesting period for gratuity as payable under The payment of Gratuity Act is 5 years.

The plans in India typically expose the Company to actuarial risks such as investment risk, interest rate risk, liquidity risk and salary risk.

a) Investment risk

The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

b) Interest rate risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

c) Liquidity risk

This is the risk that the Company is not able to meet the short-term gratuity pay outs. This may arise due to non availability of enough cash / cash equivalents to meet the liabilities or holding of liquid assets not being sold in time.

d) Salary escalation risk

The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan''s liability.

No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31,2022 by M/s. KP Actuaries and Consultants. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

The discount rate is based on the prevailing market yields of Government of India securities as at the balance sheet date for the estimated term of the obligations.

Interest income on plan asset is a component of the return on plan asset and is determined by multiplying the fair value of the plan assets by the discount rate, both as determined at the start of the annual reporting period, taking account of any changes in the plan assets held during the period as a result of contributions and benefit payments.

The estimate of future salary increase, considered in actuarial valuation, take into account the inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market.

Due to absence of data provided by Life Insurance Corporation of India, break-up of plan assets (asset allocation) in insurer managed funds have not been furnished.

G. Sensitivity Analysis

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The results of sensitivity analysis is given below.

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is same as that applied in calculating the defined benefit obligation recognised in the Balance Sheet.

Note 36 Financial Instruments 36.1 Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to stakeholders through the optimisation of the debt and equity balance. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders. The Company is a debt free company and cash required for operation is managed through internal accruals.

36.3 Financial risk management objective

The Company has a Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Company''s risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk threshold, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Company''s activities to provide reliable information to the management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risk arising from the financial instruments:

- Market risk (includes foreign currency risk and price risk)

- Credit risk and

- Liquidity risk

36.4 Market risk

Market risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in the market prices. The Company in the ordinary course of its business is exposed to risks related to changes in foreign currency exchange rates.

The Company seeks to minimise the effect of these risks by using derivative financial instruments to hedge risk exposures. The Company does not enter into or trade financial instruments, including derivatives for speculation purposes.

36.5 Foreign Currency risk management

The Company''s functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Company''s revenue from export markets and the costs of imports, primarily in relation to raw materials. The Company is exposed to exchange rate risk under its trade portfolio.

Favourable movements in the exchange rates will conversely result in reduction in the Company''s receivables in foreign currency In order to hedge exchange rate risk, the Company hedges cash flows up to a specific tenure using forward exchange contracts in respect of exports, imports, other receivables and payables. The Company uses forward foreign exchange contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecast transactions.

36.6 Foreign Currency risk sensitivity

The following table details the Company''s sensitivity to a 1% increase and decrease in the INR against the relevant major foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the relevant currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity and the balances below would be negative.

36.8 Commodity price risk

The Company is exposed to movement in metal commodity price of steel. Our sales contracts are on fixed price basis. Profitability in case of firm price orders is impacted by movement in the prices of steel. The Company primarily purchases its raw materials in the open market from third parties. The Company either places long term firm price order with the suppliers or builds stock on need basis to mitigate the risk.

36.9 Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instruments will fluctuate because of changes in market interest rates. The Company is debt free Company and has not borrowed fund during the year from banks, therefore, the Company is not exposed to interest rate risk.

36.10 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk for trade receivables, contract assets, deposits with banks, derivative financial instruments and other financial instruments.

36.11 Trade receivables

Customer credit risk is managed centrally by the Company. The Company evaluates the creditworthiness based on publicly available financial information and the Company''s historical experiences. Further, majority of the Company''s customers are Companies with strong financial stability. Credit risk on receivables is also mitigated by securing the same against letters of credit of reputed banks. Trade receivables spread across diverse geographical areas with no significant concentration of credit risk. Outstanding trade receivables are regularly monitored and appropriate actions are taken for collection of overdue receivables. The Company''s exposure to counterparties are continuously reviewed and monitored by the management. Credit period varies as per the contractual terms with the customers. No interest is generally charged on overdue trade receivables.

The Company has used practical expedient by computing expected credit loss allowance for trade receivables by taking into consideration historic credit loss experience and adjusted for forward looking information. The expected credit loss is based on the ageing of the days and the expected credit loss rate.

Apart from the major customers of the Company in India, Spain and Belgium (where the parent company is based), the Company does not have significant credit risk exposure to any single customer. Concentration of credit risk related to the customer in India, Belgium accounts for 51%, 18% respectively of the trade receivables of the Company as at March 31, 2022 (As at March 31, 2021: India, Spain, Belgium accounts for 42%, 24% and 20% respectively). Concentration of credit risk to any other customer did not exceed 10% of the trade receivables of the Company at reporting date.

As at March 31, 2022 the Company had contract assets amounting to '' 2,668.88 lakhs (As at March 31, 2021: '' 14,788.66 lakhs). At March 31, 2022 the Company had 1 customer (As at March 31, 2021: 2 customers) that owed the Company more than '' 1,000 lakhs each and accounted for approximately 38% (As at March 31, 2021: 84%) of all the contract assets outstanding.

The history of trade receivables shows a negligible impairment allowance.

36.12 Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks, and derivative instruments. The Company attempts to limit the credit risk by only dealing with reputable banks having high-credit ratings assigned by credit-rating agencies. The Company''s maximum exposure to the credit risk for the component of Balance Sheet as at March 31, 2022 and March 31, 2021 is the carrying amounts of each class of financial assets.

36.13 Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing. The Company requires fund both for short-term operational needs as well as for long-term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short-term investments provide liquidity in the short-term and long-term. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flow and by matching the maturity profiles of the financial assets and liabilities.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in bank fixed deposits to optimise the returns on cash and cash equivalents while ensuring sufficient liquidity to meet its liabilities.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments.

The derivative assets and liabilities (Refer Notes 7 and 18) are having maturity within one year of the Balance Sheet date.

36.14 Collateral

Property, plant and equipment, right-of-use asset with a carrying amount of '' 3,206.24 lakhs (As at March 31, 2021: '' 3,412.90 lakhs), have been mortgaged as security for fund based and non-fund based credit facilities from banks.

The Company has access to various fund and non-fund based bank facilities. The amount of unused borrowing facilities (fund and non fund based) available for future operating activities and to settle commitments as at March 31, 2022''10,337.65 lakhs (As at March 31, 2021 '' 14,712.57 lakhs). The returns/statements filed by the Company with such banks are in agreement with the books of accounts of the Company.

36.15 Fair value measurement Calculation of fair values

The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended March 31, 2021.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair value.

Financial assets and liabilities measured at fair value as at Balance Sheet date:

1. The fair values of the forward contracts used for expected future sale has been determined using forward pricing, based on present value calculations.

2. The Company has disclosed financial instruments such as trade receivables (current), cash and cash equivalents, other bank balances, loans to employees, other current financial assets, trade payables (current) and other current financial liabilities at carrying value, because, their carrying amounts are a reasonable approximation of the fair values due to their short-term nature.

Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required):

The carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

Note 37 Segment information

The principal activities of the Company comprise customised manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet flux line and pickling lines ("the projectsâ) for ferrous and non-ferrous industries world wide.

For management purpose, the Company comprise of only one reportable segment - Original equipment manufacturer and project management. Information is reported to and evaluated regularly by the Chief Operational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation and assessing the performance of the business as a whole. The CODM reviews the Company''s performance on the analysis of profit before tax at an overall entity level. Accordingly there is no other separate reportable segment as defined by Ind AS 108 "Operating Segmentsâ.

Revenue from operations have been allocated on the basis of location of customers.

'' 11,240.81 lakhs, '' 9,300.22 lakhs and '' 8,909.60 lakhs (For year ended March 2021: '' 7,203.26 lakhs, '' 4,469.22 lakhs and '' 2,737.94 lakhs) is derived as revenue from each of the Company''s three major customers.

b) Non-current operating assets

All Non-current assets other than financial instruments, deferred tax assets of the Company are located in India.

(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

â¢ provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(vi) The Company has not received any fund from any person or entity including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

â¢ provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(f) Brand and technical royalty fees

The Company has entered into an agreement with John Cockerill SA for rights to use the John Cockerill Brand name. The Company pays 0.6% of net external sales. The agreement has now been renewed with effect from January 1, 2022 for the tenure of 5 years.

(g) Estimation uncertainty relating to the global health pandemic on COVID-19

The Company has considered the impacts that may result from the COVID-19 pandemic, including the recoverability of carrying amounts of its assets and estimates of project costs. Impact assessment of the pandemic is a continuing process given the inherent uncertainties associated with it. The Company will continue to monitor material changes to future economic conditions.

Explanations given where the change in the ratio is more than 25% as compared to the preceding year.

Note 1 - The Company has earned profit in the current year as against loss in the previous year.

Note 2 - The Company''s operations have increased significantly in the current year as compared to previous year which was impacted by COVID-19 pandemic. Note 40 Event occurring after the Balance Sheet date

The Board of Directors recommended Equity dividend of '' 2/- per share (previous year '' Nil per share) for the financial year 2021-22, which is subject to the approval of shareholders at the ensuing Annual General Meeting.

Note 41 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosure.

Mar 31, 2018

1 General information:

CMI FPE Limited (âthe Companyâ) is a subsidiary of Cockerill Maintenance and Ingenierie SA and a public limited Company incorporated and domiciled in India. The registered office of the Company is located at Mehta House, Plot No. 64, Road No. 13, MIDC, Andheri (East), Mumbai - 400 093. The Company is listed on the BSE Limited.

The principal activities of the Company comprise customised design, engineering, and installation, and manufacturing components of Cold Rolling Mill Complexes, Processing Lines, Chemical equipment, industrial furnaces and auxiliary equipment for the world-wide steel industry.

* Trade receivables include retention monies of Rs. 2,714.21 lakhs (As at March 31, 2017: Rs. 864.50 lakhs, As at April 01, 2016: Rs. 3,552.33 lakhs)

Trade receivables have been hypothecated as security for bank loans and non-fund based limits.

The cost of inventories recognised as an expense during the year was Rs. 30.77 lakhs (for the year ended March 31, 2017: Rs. 201.81 lakhs).

The above inventories have been hypothecated as security for bank loans and non-fund based limits.

Management of the Company had made a decision to sell a vacated flat owned by the Company and was actively looking for the buyer. Considering sales being highly probable, the carrying amount of the flat was expected to be recovered principally through a sale rather than continuing use therefore it had been classified as asset held for sale as at April 01, 2016. It had been sold during the previous year ended March 31, 2017. Company had recognised a gain of Rs. 63.70 lakhs on derecognition of the asset held for sale.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.

Note: The unrecognised MAT credit of Rs. 4.09 lakhs will expire in Assessment Year (AY) 2028-29, Rs. 148.85 lakhs in AY 2030-31, Rs. 22.79 lakhs in AY 2031-32, Rs. 78.35 lakhs in AY 2032-33 and Rs. 201.63 lakhs in AY 2033-34.

Unused MAT credit as on March 31, 2016 and March 31, 2017 are as per Income-tax returns filed by the Company for the respective financial years. Unused MAT credit as on March 31, 2018 is as per tax computation done by the Company.

(ii) Terms/rights attached to equity shares:

The Company is having only one class of equity shares having par value of Rs. 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend, if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(a) Security premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

(c) Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.

(d) The effective portion of cash flow hedges represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of âEffective portion of cash flow hedgesâ will be reclassified to profit or loss only when the hedged transaction affects the profit or loss.

Credit period varies as per the contractual terms of various suppliers/vendors. No interest is generally charged by the suppliers/vendors. The Company has appropriate policy in place to ensure that all dues are paid within the credit terms agreed with the parties.

Provision for warranties

The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2018 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of one to three years from the date of Balance Sheet.

Provision for estimated losses on contracts

In line with requirements of Ind AS 11 - Construction Contracts, when it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately in the Statement of Profit and Loss and provision for estimated loss is recognised in the Financial Statement.

* Construction material consumed Closing stock - Opening stock

# Purchases include Rs. 5,967.18 lakhs (Year ended March 31, 2017: Rs. 1,769.25 lakhs) being cost of equipments bought and supplied directly to customerâs site as a part of construction contracts.

Note:

Since the Company is a project management company and engaged in the business of putting up projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Ind AS-11 Construction contracts under which project stock, manufactured items and other direct costs are considered as project cost incurred till date. Purchases figure is derived figure. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, itemwise break-up for cost of materials consumed is not available in the system.

a.2 Terms and Conditions

i) All outstanding balances are unsecured and are repayable as per terms of credit and settlement occurs in cash.

ii) All related party transactions entered during the year were in ordinary course of business and on arms length basis.

iii) The Company has not recorded any impairment of receivables related to amounts owed by related parties.

*Matters relating to:

(i) During the period April 2009 to July 2014, the Company had paid service tax on the commission charged by their non-resident commission agents for the services rendered in connection with sales of the Companyâs finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause notice dated September 26, 2014 for denial of wrongly availed Cenvat Credit of Rs. 184.63 lakhs (excluding interest, as applicable) of service tax paid as input service. The Company has replied to show cause notice.

(ii) During the period April 2010 to December 2014, the Company had paid service tax for services rendered and excise duty on dispatch of goods considering contracts as divisible contracts. Service tax department issued show cause notice dated October 21, 2015 for demanding service tax of Rs. 4,817.55 lakhs on contracts categorised as âWorks contractsâ by the department on which excise duty of Rs. 10,510.51 lakhs had been paid. The Commissioner of Central Excise & Service Tax, Large Taxpayers Unit - Audit vide their order dated November 30, 2016 upheld the service tax liability of Rs. 4,817.55 lakhs, penalty of Rs. 4,817.65 lakhs and interest, as applicable, estimated to be Rs. 4,571.52 lakhs. An appeal has been filed by the Company before CESTAT, Mumbai vide appeal dated March 20, 2017. The Company has paid appropriate excise duty on goods manufactured and service tax on services rendered. The order is seen by the Company as a change of opinion by the department after higher bench judgement in one of the recent case. In continuance of the above matter, the Company has further received show cause notice dated December 22, 2017 for period January 2015 to March 2015 demanding service tax of Rs. 175.46 lakhs on which excise duty of Rs. 377.56 lakhs had been paid and show cause notice dated March 19, 2018 for the period April 2015 to June 2017 demanding service tax of Rs. 759.27 lakhs on which excise duty of Rs. 1,670.08 lakhs had been paid. The estimated penalty amount of Rs. 175.46 lakhs and Rs. 759.27 lakhs and interest, as applicable, of Rs. 86.83 lakhs and Rs. 239.58 lakhs respectively, will be applicable, in case the service tax demand is upheld by the department. The Company has duly replied to show cause notices received.

**Matters relating to (i) detention of goods despatched by vendor of the Company at site of customer without valid TIN/CST mentioned on the said invoice on 19.02.2013 and (ii) omission of trading purchases and adoption of wrong output tax on lubricants noticed during Value Added Tax Audit for the year 2012-13. The Company has filed the petition before Joint Commissioner (Vellore) and appeal before Appellate Deputy Commissioner III Chennai respectively.

***Matter relating to non-reversal of proportionate Cenvat Credit on inventory shortages identified during the course of EA 2000 audit conducted for the period from April 2009 to March 2011 .The Central Excise department had issued a show cause notice dated January 6, 2014 for Rs. 88.33 lakhs (excluding interest and penalty, as applicable). The Joint Commissioner of Central Excise & Service Tax, Large Taxpayer Unit - Audit vide their order dated January 31, 2017 upheld the excise duty liability of Rs. 88.33 lakhs, penalty of Rs. 88.33 lakhs and interest, as applicable, estimated to be Rs. 128.70 lakhs. An appeal has been filed by the Company before the Commissioner of Central Excise & Service Tax, Large Taxpayer Unit - Audit, Mumbai.

Note 3 Operating lease:

The Company has entered into operating lease or leave and licence arrangements for residential premises/godowns (including furniture and fittings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

Note 4 Employee benefits

a) Defined contribution plan Superannuation

All eligible employees are entitled to benefits under superannuation, a defined contribution plan. The Company makes quarterly contributions until retirement or resignation of the employee. The Company recognises such contributions as an expense when incurred. The company has no further obligation beyond its quarterly contribution.

Companyâs contribution to superannuation recognised in statement of profit and loss of Rs. 40.56 lakhs (for the year ended March 31, 2017 Rs. 36.89 lakhs) (included in Note 27).

Provident fund

Companyâs contribution to provident fund recognised in statement of profit and loss of Rs. 200.97 lakhs (for the year ended March 31, 2017 Rs. 179.04 lakhs) (included in Note 27).

b) Defined benefit plans:

Gratuity (funded)

The Company sponsors funded defined benefit plans for all eligible employees. The defined benefit plan is administered by a separate fund that is legally separated from the entity.

Under the gratuity plan, the eligible employees are entitled to post-retirement benefit at the rate of 1 5 days salary for each year of service until the retirement age of 60 years, without any payment ceiling. The vesting period for gratuity as payable under The payment of Gratuity Act is 5 years.

Compensated absences

Under the compensated absences plan, leave encashment is payable to all eligible employees on separation from the Company due to death, retirement, superannuation, or resignation, at the rate of daily salary, as per current accumulation of leave days restricted to maximum 60 days.

The plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, liquidity risk and salary escalation risk.

a) Investment risk

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan asset is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in insurer managed funds.

b) Interest rate risk

c) Liquidity risk

d) Salary escalation risk

No other post-retirement benefits are provided to these employees.

The most recent actuarial valuation of the plan assets and the present value of the defined benefit obligation were carried out at March 31, 2018 by M/s. KP Actuaries and Consultants. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.

E. Principal Actuarial assumptions

With the objective of presenting the plan assets and plan obligations of the defined benefits plans at their fair value on the Balance Sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

Interest income on plan asset is a component of the return on plan asset and is determined by multiplying the fair value of the plan assets by the discount rate specified in para 83, both as determined at the start of the annual reporting period, taking account of any changes in the plan assets held during the period as a result of contributions and benefit payments.

The estimate of future salary increase, considered in actuarial valuation, takes into acount the inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Due to absence of data provided by Life Insurance Corporation of India, break-up of plan assets (asset allocation) in insurer managed funds have not been furnished.

G. Sensitivity analysis

H. The Average Duration of the defined benefit obligation at the end of reporting period is 9 years.

Note 5 Financial Instruments

5.1 Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the returns to stakeholders through the optimisation of the debt and equity balance. For the purpose of the Companyâs capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Companyâs capital management is to maximise the shareholder value.

5.2 Financial risk management objective

The Company has a Risk Management Committee established by its Board of Directors for overseeing the Risk Management Framework and developing and monitoring the Companyâs risk management policies. The risk management policies are established to ensure timely identification and evaluation of risks, setting acceptable risk threshold, identifying and mapping controls against these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Companyâs activities to provide reliable information to the management and the Board to evaluate the adequacy of the risk management framework in relation to the risk faced by the Company.

The risk management policies aims to mitigate the following risk arising from the financial instruments:

- Market risk (includes foreign currency risk and price risk)

- Credit risk and

- Liquidity risk

5.3 Market risk

5.4 Foreign currency risk management

The Companyâs functional currency is Indian Rupees (INR). The Company undertakes transactions denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise. Volatility in exchange rates affects the Companyâs revenue from export markets and the costs of imports, primarily in relation to raw materials. The Company is exposed to exchange rate risk under its trade portfolio.

Favourable movements in the exchange rates will conversely result in reduction in the Companyâs receivables in foreign currency. In order to hedge exchange rate risk, the Company hedge cash flows up to a specific tenure using forward exchange contracts in respect of imports and other payables, mostly, it covered by natural hedge. The Company uses forward foreign exchange contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecast transactions.

The carrying amounts of the Companyâs foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as under:

5.5 Foreign currency risk sensitivity

The following table details the Companyâs sensitivity to a 1% increase and decrease in the INR against the relevant major foreign currencies. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 1% change in foreign currency rates, with all other variables held constant. A positive number below indicates an increase in profit or equity where INR strengthens 1% against the relevant currency. For a 1% weakening of INR against the relevant currency, there would be a comparable impact on profit or equity and the balances below would be negative.

5.6 Forward foreign exchange contracts

The Company has adopted a Risk Management Policy approved by the Board of Directors for managing foreign currency exposure. The policy has approved use of forward contracts to manage the foreign currency risk.

The following table details the forward foreign currency (FC) contracts outstanding at the end of the reporting period.

5.7 Commodity price risk

5.8 Interest rate risk

5.9 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

5.10 Trade receivables

Customer credit risk is managed centrally by the Company. The Company evaluates the creditworthiness based on publicly available financial information and the Companyâs historical experiences. Further, majority of the Companyâs customers are Companies with strong financial stability. Credit risk on receivables is also mitigated by securing the same against letters of credit of reputed banks. Trade receivables spread across diverse geographical areas with no significant concentration of credit risk. Outstanding trade receivables are regularly monitored and appropriate actions are taken for collection of overdue receivables. The Companyâs exposure to counterparties are continuously reviewed and monitored by the management. Credit period varies as per the contractual terms with the customers. No interest is generally charged on overdue trade receivables.

The Company directly reduces the gross carrying amount of financial assets when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The amount of financial assets are net of allowance for doubtful accounts, estimated by the Company and based, in part, on the age of specific receivable balance and the current and expected collection trends. The Company has used practical expedient by computing expected credit loss allowance for trade receivables by taking into consideration historic credit loss experience and adjusted for forward looking information. The expected credit loss is based on the ageing of the days and the expected credit loss rate.

Apart from the largest customer of the Company in Belgium (which is the parent company) and 3 major customers in India (which are Limited Companies), the Company does not have significant credit risk exposure to any single customer. Concentration of credit risk related to the customer in Belguim exceed 15% of the trade receivables of the Company and credit risk related to the 3 major customers exceeds 38%, 19% and 17% of the trade receivables of the Company. Concentration of credit risk to any other customer did not exceed 10% of the trade receivables of the Company at reporting date.

The history of trade receivables shows a negligible allowance for bad and doubtful debts.

5.11 Other financial assets

The Company maintains exposure in cash and cash equivalents, term deposits with banks, and derivative instruments. The Company attempts to limit the credit risk by only dealing with reputable banks having high-credit ratings assigned by credit-rating agencies. The Companyâs maximum exposure to the credit risk for the component of Balance Sheet as at March 31, 2018, March 31, 2017 and April 1, 2016 is the carrying amounts of each class of financial assets.

5.12 Liquidity risk management

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires fund both for short-term operational needs as well as for long-term capital expenditure growth projects. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents and short-term investments provide liquidity in the short-term and long-term. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flow and by matching the maturity profiles of the financial assets and liabilities.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short-term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in bank fixed deposits to optimise the cash returns on cash and cash equivalents while ensuring sufficient liquidity to meet its liabilities.

The following table gives details of the Companyâs remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The table below has been drawn up based on the undiscounted cash flows of financial liabilities on the earliest date on which the Company can be required to pay. The table include both interest and principal cash flows.

The derivative assets and liabilities (refer notes 8 and 19) are having maturity within one year of the Balance Sheet date.

5.13 Collateral

Property, plant and equipment with a carrying amount of Rs. 3,856.69 lakhs (As at March 31, 2017: Rs. 4,247.97 lakhs, As at April 01, 2016: Rs. 4,586.46 lakhs), have been mortgaged as collateral security for bank loans and non-fund based limits.

The Company has access to various fund and non-fund based bank facilities. The amount of unused borrowing facilities (fund and non fund based) available for future operating activities and to settle commitments as at March 31, 2018 Rs. 14,738.96 lakhs (As at March 31, 2017 Rs. 13,347.90 lakhs, As at April 01, 2016 Rs. 16,757.43 lakhs).

5.14 Fair value measurement Calculation of fair values

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair value.

Financial assets and liabilities measured at fair value as at Balance Sheet date:

1. The fair values of the forward contracts used for expected future sale has been determined using forward pricing, based on present value calculations.

2. The Company has disclosed financial instruments such as trade receivables, cash and cash equivalents, other bank balances, loans to employees, other current financial assets, trade payables and other current financial liabilities at carrying value, because, their carrying amounts are a reasonable approximation of the fair values due to their short-term nature.

Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required):

The carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.

Note 6 Segment information:

The principal activities of the Company comprise customised manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet flux line and pickling lines (âthe projectsâ) for ferrous and non-ferrous industries world wide.

For management purpose, the Company comprise of only one reportable segment - Original equipment manufacturer and project management. Information is reported to and evaluated regularly by the Chief Operational Decision Maker (CODM) i.e. Managing Director for the purpose of resource allocation and assessing the performance of the business as a whole. The CODM reviews the Companyâs performance on the analysis of profit before tax at an overall entity level. Accordingly there is no other separate reportable segment as defined by Ind AS 108 âOperating Segmentsâ.

The information relating to revenue from external customers and location of non-current assets of the single reportable segment has been disclosed as follows:

Revenue from operations have been allocated on the basis of location of customers.

Rs. 10,666.94 lakhs, Rs. 7,904.11 lakhs and Rs. 6,137.61 lakhs is derived as revenue from each of the Companyâs three major customer.

b) Non-current operating assets

All Non-current assets other than financial instruments, deferred tax assets of the Company are located in India.

Note 7 Ind AS adoption:

The below notes explains the material adjustments made while transition from previous Accounting Standards to Ind AS

1 To Comply with the Companies (Accounting Standard) Rules, 2006, certain account balances have been regrouped as per the format prescribed under Division II of Schedule III to the Companies Act, 2013.

2 Operating lease arrangements

Under previous GAAP, the long term operating lease for leasehold land were considered under Property, plant and equipment. Under Ind AS, it is treated as part of prepaid expenses and amortised over the lease term.

3 Other comprehensive income (OCI)

Under Ind AS, all items of income and expense recognized in the period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Under Ind AS items of income and expense that are not recognised in profit or loss but are shown in the Statement of Profit and Loss as âOther comprehensive incomeâ includes remeasurements of defined benefit plans, effective portion of gains and losses on cash flow hedging instruments. The concept of other comprehensive income did not exist under previous GAAP.

Remeasurements of post employment benefit obligation

Under previous GAAP, remeasurement of defined benefit plans (gratuity) arising primarily due to change in actuarial assumptions was recognised as employee benefit expenses in the Statement of Profit and Loss. Under Ind AS, such remeasurements changes relating to defined benefit plan is recognised in the OCI. This change does not affect equity but there is increase in profit before tax for the year ended March 31, 2017 by Rs. 115.01 lakhs and corresponding decrease in OCI along with the related tax charge of Rs. 38.03 lakhs.

Under previous GAAP, for designated hedging relationships, the Company has recognised mark to market gain on derivative and non-derivative instruments which are designated in hedging relationship under the Effective portion of cash flow hedges. Under Ind AS, movement in this reserve during the year ended March 31, 2017 of Rs. 46.39 lakhs (net of deferred tax of Rs. 13.48 lakhs) is shown under OCI.

4 Financial assets/financial liabilities at amortised cost

Certain financial assets held on with an object to collect contractual cash flows in the nature of principal and interest have been recognised at amortised cost on transition date as against historical cost under the previous GAAP with the difference being adjusted to the opening retained earnings. Interest income/expense is recognised during financial year March 31, 2017, using effective interest method.

5 Deferred tax as per Balance Sheet approach

Under previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profit for the period. Under Ind AS, deferred tax is recognised following Balance Sheet approach on the temporary differences between the carrying amount of asset or liability in the Balance Sheet and its tax base. In addition, various transitional adjustments has also led to recognition of deferred taxes on new temporary differences.

6 Excise duty

Under the previous GAAP, excise duty on sale of goods was reduced from sales to present the revenue from operations. Whereas, under Ind AS, this excise duty is included in the revenue from operations and the corresponding expense is included as part of total expenses. The change does not affect total equity as at April 01, 2016 and profit for the year ended March 31, 2017.

7 Provision for doubtful debts

Under previous GAAP, the Company has created provision for doubtful debts on receivables on the basis of incurred loss. Under Ind AS, loss allowance on financial assets has been determined on the basis of Expected Credit Loss (ECL). Consequently, the Company has recognised ECL on its financial assets as at March 31, 2017 aggregating Rs. 374.01 lakhs (As at April 01, 2016 by Rs. 600.43 lakhs). The above has resulted in decrease in equity and financial assets as at March 31, 2017 by Rs. 374.01 lakhs (As at April 01, 2016 by Rs. 600.43 lakhs) and increase in profit before tax for the year ended March 31, 2017 by Rs. 226.42 lakhs.

8 Retained earnings

Retained earnings as at April 01, 2016 has been adjusted consequent to the above Ind AS transition adjustments.

9 Current tax

Tax component on actuarial gains and losses which is transferred to other comprehensive income under Ind AS has been debited to the Statement of Profit and Loss.

10 The Ind AS adjustments are either non-cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended March 31, 2017 as compared with the previous GAAP.

Note 8 Disclosure of additional information

(a) Corporate Social Responsibility (CSR) expenditure:

As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least 2% of itâs average net profit for the immediately preceding three financial year on corporate social responsibility (CSR) activities. A CSR committee has been formed by the Company as per the Act. The expenditure has been incurred on activities specified in Schedule VII of the Companies Act, 2013.

(i) Gross amount required to be spend during the year is â Nil (Year ended March 31, 2017: Rs. 0.99 lakhs).

(ii) Amount spent during the year on:

(b) Disclosure required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006

Total outstanding dues of Micro and Small Enterprises, which are outstanding for more than the stipulated period are given below:

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. Due dates with regards to payments to be made to Micro and Small Enterprises have been determined with reference to Micro, Small and Medium Enterprises Development Act, 2006, considering criteria of quality of goods and related incidental services provided by the vendors. This has been relied upon by the auditors.

(e) Brand and Technology fees:

The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc.

The Company has entered into an agreement with CMI SA for rights to use the CMI brand name. The Company pays 0.6% of net sales. The agreement is originally effective from January 1, 2010 for the tenure of 5 years and revised for another 5 years with effect from January 1, 2015.

Note: Sales on CFR/CIF/CIP/CPT/DAP basis has been converted into FOB.

(i) Previous yearâs figures have been regrouped/reclassified wherever necessary to correspond with the current yearâs classification/disclosure.

Mar 31, 2017

Note:

Since the Company is a project management company and engaged in the business of putting up projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Accounting Standard-7 Construction contracts under which project stock, manufactured items and other direct costs are considered as project cost incurred till date. Purchases figure is derived figure. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, item wise break-up for cost of materials consumed is not available in the system.

(i) During the period April 2009 to July 2014, the Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company''s finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause Notice bearing No. SCN NO.5/COMMR/GLT-1/CMI/CEN-D/NON-CERA/2014-15 dated 26.09.2014 for denial of wrongly availed Cenvat Credit of Rs, 184.63 lacs (excluding interest, as applicable) of service tax paid as input service. The Company has replied to show cause notice.

(ii) During the period April 2010 to December 2014, the Company had paid service tax for services rendered and excise duty on dispatch of goods considering contracts as divisible contracts. Service tax department issued Show cause notice bearing no. SCN F.NO.LTU/ MUM/CX/AUDIT/GR-IV/CMI/176/13-14 dated 21.10.2015 for demanding service tax of Rs, 4,817.55 lacs under the taxable services of works contract service on supply of goods on which excise duty of Rs, 10,510.51 lacs had been paid. The Company has replied to Show cause notice and personal hearing has also been held. The Commissioner of Central Excise & Service Tax, LTU vide their order No. 87/COMMR(RS)LTU-M/ST/2016 dated 30.11.2016 upheld the service tax liability of Rs, 4,817.55 lacs, penalty of Rs, 4,817.65 lacs and interest, where applicable, estimated to be Rs, 3,848.88 lacs. An appeal has been filed by the Company before CESTAT, Mumbai vide appeal No. ST/85405/17-MUM dated 20.03.2017. The Company has paid appropriate excise duty on goods manufactured. The order is clearly a change of opinion by the department after higher bench judgement of Kone Elevator case.

** Matters relating to (i) detention of goods despatched by vendor of the Company at site of customer without valid TIN/CST mentioned on the invoice on 19.02.2013; (ii) omission of trading purchases and adoption of wrong output tax on lubricants noticed during VAT Audit for the year 2012-13 against which the Company has filed the petition before Joint Commissioner (Vellore) and appeal before Appellate Deputy Commissioner III Chennai respectively.

*** Matter relating to non-reversal of proportionate Cenvat Credit on inventory shortages identified during the course of EA2000 audit conducted for the period from April 2009 to March 2011, the Central Excise department had issued a show case Notice bearing No.SCN NO.LTU/MUM/ CX/GLT-1/CMI/SCN/248/2013/16388 dated 06.01.2014 for Rs, 88.33 lacs (excluding interest, as applicable). The Commissioner of Central Excise & Service Tax, LTU vide their order No.29/Joint commissioner(SK)/LTU-A/CX/2016-17 dated 31.01.2017 upheld the excise duty liability of Rs, 88.33 lacs, penalty of Rs, 88.33 lacs and interest, where applicable, estimated to be Rs, 121.77 lacs. An appeal has been filed by the Company before The Commissioner of Central Excise and Service Tax LTU, Mumbai.

Note: The Company''s records do not distinguish between raw materials, components and stores and spares. Therefore, separate figures for each category of imported items have not been given. The above amounts have been computed based on the purchase bills to the extent identified by the Company, for imported items.

1 During the previous year ended March 31, 2016, the Company had disposed of the assets relating to Silvassa plant. On this sale, the Company had earned profit of Rs, 1,433.93 lacs, which had been shown as an âExceptional items'' in the Statement of Profit and Loss.

2 Corporate Social Responsibility (CSR) Expenditure:

As per Section 135 of the Companies Act, 2013, a company meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. A CSR Committee has been formed by the Company as per the Act. The expenditure has been incurred on activities specified in Schedule VII of the Companies Act, 2013.

(a) Gross amount required to be spend during the year is Rs, 0.99 lacs (Year ended March 31, 2016: Rs, Nil).

(b) Amount spent during the year on:

Note3 Disclosures under accounting standards (contd.)

4 Segment information

Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identified two geographical segments which comprises of Overseas and India. The segments have been identified taking into account the differing risks and returns relating to these geographical areas.

Secondary Segments:

As the Company''s business activity falls within a single business segment i.e. Original Equipments Manufacturer and Project Management, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

5 Related party transactions 27.4.a Details of related parties:

Description of relationship__Names of related parties_

Holding Company Cockerill Maintenance & Ingenierie SA

Fellow Subsidiaries (with whom Company has CMI Industry Automation Private Limited

made transactions during the year)

CMI UVK GmbH

CMI M W Engineering GmbH CMI Tech5i Pastor SAS CMI Brasil Servicos CMI India Engineering Private Limited CMI Engineering (Beijing) Co. Ltd Key Management Personnel (KMP) Mr. Raman Madhok - Managing Director

Enterprises over which Key Managerial Personnel Indo-Belgian Luxembourg Chamber of Commerce and are able to exercise significant influence (with Industry whom Company has made transactions during the year)

Note: Related parties have been identified by the Management.

6 Operating Lease:

The Company has entered into operating lease or leave and license arrangements for residential premises/ god owns (including furniture and fittings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

There are no contingent rents and any purchase option; however, there are clauses on renewal and escalation.

* Restricted to the extent of deferred tax liability on depreciation on account of virtual certainty

7 The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc.

The Company has entered into an agreement with CMI SA for rights to use the CMI Brand name. The Company pays 0.6% of net sales. The agreement is originally effective from January 1, 2010 for the tenure of 5 years and revised for another 5 years with effect from January 1, 2015.

* Includes '' Nil (As at March 31, 2016: Rs, 0.01 lac being the cost of 10 shares of Rs, 50 each in Highland Park Co-operative Housing Society Limited).

8 Trade receivables of Rs, 2,091.81 lacs (net of advances and subsequent receipts) from a customer are overdue for a considerable time. In response to a notice under Insolvency and Bankruptcy (Application of Adjudicating Authority) Rules, 2016, the customer had requested to withdraw the notice, and has paid Rs, 202.98 lacs pursuant to its commitment to make payments gradually so that the dues are cleared by March 31, 2018. Having regard to the above and assessment of the financial ability of the customer, the Management believes that the aforesaid dues will be recovered, and no provision is currently considered necessary against the same.

9 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2016

Income from services

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Revenue from construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs associated with the construction contract are recognized as revenue and expenses respectively by reference to the percentage of completion of the contract activity at the reporting date. The percentage of completion of a contract is determined considering the proportion that contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs.

For the purposes of recognizing revenue, contract revenue comprises the initial amount of revenue agreed in the contract, the variations in contract work, claims and incentive payments to the extent that it is probable that they will result in revenue and they are capable of being reliably measured.

The percentage of completion method is applied on a cumulative basis in each accounting period to the current estimates of contract revenue and contract costs. The effect of a change in the estimate of contract revenue or contract costs, or the effect of a change in the estimate of the outcome of a contract, is accounted for as a change in accounting estimate and the effect of which are recognized in the Statement of Profit and Loss in the period in which the change is made and in subsequent periods.

When the outcome of a construction contract cannot be estimated reliably, revenue is recognized only to the extent of contract costs incurred of which recovery is probable and the related contract costs are recognized as an expense in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense in the Statement of Profit and Loss in the period in which such probability occurs.

At each reporting date, the contracts in progress (Progress work) are valued and carried in the Balance Sheet under Other current assets. Advance and progress payments received from customers during the course to completion are carried under Other long-term liabilities and Other current liabilities.

The Cenvat Credit is accounted by crediting the amount to cost of purchases on receipt of goods and is utilized on clearance of finished goods by debiting Excise duty account.

Income from services is recognized as and when the services are rendered.

Interest Revenue is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.

Dividend income is recognized when the right to receive dividend is established.

Eligible export benefits, if any, are recognized in the Statement of Profit and Loss when the right to receive credit as per the terms of the entitlement and reasonable certainty of collection/utilization is established in respect of exports made/to be made.

1. Fixed Assets:

i Tangible Assets:

Tangible assets are stated at their original cost of acquisition or construction less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and attributable cost if any, of bringing the asset to its working condition for its intended use. Capital work-in-progress is valued at cost.

ii Intangible Assets:

Intangible assets are stated at their cost of acquisition less accumulated amortization and impairment losses, if any. An intangible asset is recognized when it is probable that the future economic benefits attributable to the asset will flow to the enterprise and where its cost can be reliably measured. The cost of an intangible asset is allocated over the best estimate of its useful life on a straight line basis, a basis that reflects the pattern in which the asset''s economic benefits are consumed.

iii Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.

2. Foreign Currency Transactions:

i Initial recognition:

Foreign currency transactions are recorded in the reporting currency by applying the Monthly/ Weekly average exchange rate.

ii Translation:

Foreign currency monetary assets and liabilities reported at the Balance Sheet date are translated using the prevailing exchange rate on the Balance Sheet date. Non-monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate on date of transaction.

iii Exchange differences:

Exchange differences arising on settlement/restatement of short-term foreign currency monetary assets and liabilities of the Company are recognized as income or expense in the Statement of Profit and Loss.

iv Forward exchange contracts are entered into for minimizing risks (not intended for trading and speculative purposes). Any profit and loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.

v The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to highly probable forecast transactions. The Company designates such forward contracts in a cash flow hedging relationship by applying the hedge accounting principles set out in "Accounting Standard 30 Financial Instruments: Recognition and Measurement" issued by the ICAI. These forward contracts are stated at fair value at each reporting date. Changes in the fair value of these forward contracts that are designated and effective as hedges of future cash flows are recognized directly in "Hedging reserve account" under Reserves and surplus, net of applicable deferred income taxes and the ineffective portion is recognized immediately in the Statement of Profit and Loss. Amounts accumulated in the "Hedging reserve account" are reclassified to the Statement of Profit and Loss in the same periods during which the forecasted transaction affects profit or loss. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. For forecasted transactions, any cumulative gain or loss on the hedging instrument recognized in "Hedging reserve account" is retained until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the net cumulative gain or loss recognized in "Hedging reserve account" is immediately transferred to the Statement of Profit and Loss.

3. Investments:

Investments classified as long-term investments are stated at cost of acquisition. However, provision for diminution in value is made to recognize a decline, other than temporary, in its value. Investments classified as current investments are stated at lower of cost and fair value determined either on an individual basis or by category of investment, but not an overall (or global) basis.

4. Employee Benefits:

i Defined Contribution Plan:

The Company''s contribution to provident fund, superannuation fund and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.

ii Defined Benefit Plan/Long-term compensated absences:

The Companyâs liabilities towards gratuity and compensated absences are determined as at the end of the reporting date by an independent actuary using the Projected Unit Credit method. Past services are recognized on a straight line basis over the average period until the benefits become vested. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimated terms of the defined benefit obligation.

5. Borrowing costs:

Borrowing costs include interest and ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets.

6. Segment Reporting:

The accounting policies used in the preparation of the financial statements of the Company are also applied for Segment Reporting. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated income/expenses".

7. Leases: Operating Lease:

Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased asset, are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

Finance Lease:

Leases that transfer substantially all the risks and rewards incidental to ownership of the assets are classified as Finance Leases. Assets procured under finance lease are recognized as Leased Assets and depreciation charged with the same rate used for charging depreciation on the depreciable assets of same kind owned by the Company.

8. Earnings per Share:

Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating the diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

9. Income Taxes:

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their reliability.

At each Balance Sheet date, the Company assesses unrecognized deferred tax assets to the extent that it is reasonably certain or virtually certain supported by convincing evidence as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax is reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain and supported by convincing evidence, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

10. Impairment of Assets:

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists.

If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset.

The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.

When there is indication that an impairment loss recognized for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognized.

11. Provisions and Contingent Liabilities:

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable (more likely than not) that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the flow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability. A disclosure for a contingent liability is to be made when there is possible obligation that arises from past events and the existence of which will be confirmed only by occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that may, but probably will not require an outflow of resources or in respect of which the likelihood of outflow of resources is remote.

12. Provision for Doubtful Trade Receivables:

Specific provision for doubtful trade receivables is made where collection of trade receivables is uncertain.

13. Post-Sales Warranties and Liquidated Damages:

The Company provides its clients with a fixed-period warranty on all Contracts as per stipulated terms. Costs associated with such contracts are accrued at the time related revenues are recorded and included in cost of sales. The Company estimates such costs based on historical experience and the estimates are reviewed annually for any material changes in assumption. Liquidated damages are provided as per Management''s estimates on case to case basis.

14. Central Excise Duty:

Excise duty liability is accounted for as and when goods are produced as per consistent practice, in pursuance to the accepted practice of excise authorities.

15. Service tax input credit:

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilizing the credits.

16. Operating Cycle:

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

17. Technology Fees:

Technology fees is computed under an agreement effective from January 1, 2010 for the tenure of 5 years and revised for another 5 years with effect from January 1, 2015 on value addition basis on the equipment manufactured with the help of new technology provided by CMI SA. Technology fees are being fully charged off at the time of incurrence, and is included under Project related expenses under head Other expenses.

18. Brand Fees:

Brand fees charged by CMI SA, under an agreement effective from January 1, 2010 for the tenure of 5 years and revised for another 5 years with effect from January 1, 2015 is being charged off at the time of incurrence and is included in Other expenses.

(ii) Terms/rights attached to equity shares:

The Company is having only one class of equity shares having par value of '' 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend, if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

Note:

The above borrowings from bank were secured by first pari passu charge over land and building of the Company located at Andheri and plot nos. A-84/2 and A-84/3 at Taloja, plant and machinery at Taloja factory, hypothecation of stock and book debts. The Company continues to avail non-fund based limits and the charge continues.

* Cost of material consumed Closing stock - Opening stock Note:

Since the Company is a project management company and engaged in the business of putting up projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Accounting Standard-7 Construction contracts under which project stock, manufactured items and other direct costs are considered as project cost incurred till date. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, item wise break-up for cost of materials consumed is not available in the system.

*Matters relating to:

(i) During the period October 2007 to February 2008, the Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company''s finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause Notice No. F.No.V(CH84)3-06/Dem./2009-10, dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs. 140.41 lacs (excluding interest and penalty, as applicable) of service tax paid as input service during the period October 2007 to February 2008. An appeal has been filed by the Company before CESTAT, Ahmedabad vide appeal No.STS/326/2010. The appeal is allowed by The Honorable CESTAT, Ahmedabad, and the demand with interest and penalty is set aside as time barred. At present, there is no demand and the CESTAT order is in operation.

(ii) During the period April 2009 to July 2014, the Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company''s finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause Notice No. SCN NO.5/COMMR/GLT-1/CMI/CEN-D/ NON-CERA/2014-15 Dated 26.09.2014 for denial of wrongly availed Cenvat Credit of '' 184.63 lacs (excluding interest, as applicable) of service tax paid as input service. The Company has replied to show cause notice.

** Matters relating to (i) detention of goods dispatched by vendor of the Company at site of customer without valid TIN/ CST mentioned on the invoice on 19.02.2013; (ii) omission of trading purchases and adoption of wrong output tax on lubricants noticed during VAT Audit for the year 2012-13 against which the Company has filed the petition before Joint Commissioner (Vellore) and appeal before Appellate Deputy Commissioner III Chennai respectively.

*** Matter relating to non-reversal of proportionate Cenvat Credit on inventory shortages of Rs. 88.33 lacs (excluding interest, as applicable) identified during the course of EA2000 audit conducted for the period from April 2009 to March 2011 against which the Company has filed the appeal.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

19. Details on derivatives instruments and unhedged foreign currency exposures

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecast transactions. The information on Derivative Instruments is as follows:

Note: The Companyâs records do not distinguish between raw materials, components and stores and spares. Therefore, separate figures for each category of imported items have not been given. The above amounts have been computed based on the purchase bills to the extent identified by the Company, for imported items. The total import purchases of Rs. 1,468.16 lacs (Year ended March 31, 2015: Rs. 4,853.07 lacs) comprise of purchases of goods amounting to Rs. 952.40 lacs (Year ended March 31, 2015: Rs. 1,633.24 lacs) on CFR/CPT/EXW/FCA/FOB/FOT basis.

20. The Company which had earlier relocated operations of Silvassa unit, has disposed of the related assets including land and buildings on January 19, 2016. On this sale, the Company has earned profit of Rs. 1,433.93 Lacs (net of expenses directly attributable Rs.15.08 Lacs) which has been shown as an ''Exceptional items'' in the Statement of Profit and Loss.

Note 21 Additional information to the financial statements (contd.)

22. The Company had revisited and changed the method of depreciation of fixed assets in 2014-15 from written down value (WDV) method to straight line method (SLM) as on 1 April, 2014, because the Management believed that change would result in a more appropriate presentation of the financial statements of the enterprise. Accordingly, all assets are now being depreciated under SLM. Pursuant to the notification of Schedule II to the Act, the Company also revised the estimated useful life of some of its assets to align the useful life with those specified in Schedule II. The details of previously applied depreciation method, rates/useful life are as follows:

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company had fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014. As a result of these changes, the depreciation charge for the year ended March 31, 2015 was lower by Rs. 107.39 lacs and the effect relating to the period prior to April 1, 2014 was net credit of Rs.556.48 lacs (excluding deferred tax of Rs. 286.54 lacs) which had been shown as an âExceptional items'' in the Statement of Profit and Loss for the year ended March 31, 2015.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.

*Due to absence of data provided by Life Insurance Corporation of India, break-up of plan assets (asset allocation) in insurer managed funds have not been furnished.

The above information has been certified by the actuary and relied upon by the auditors.

23. Segment information

Geographical Segments:

Secondary Segments:

24. Operating Lease:

The Company has entered into operating lease or leave and license arrangements for residential premises/ godowns (including furniture and fittings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

25. The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc.

26. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2015

Corporate Information:

The principal activities of the Company comprise manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet flux line and pickling lines for ferrous and non-ferrous industries world wide.

1. Terms/rights attached to equity shares:

The Company is having only one class of equity shares having par value of Rs. 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend, if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion of the paid up share capital held by the shareholders.

2. Since the Company is a project management company and engaged in the business of putting up projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Accounting Standard-7 Construction contracts under which project stock, manufactured items and other direct cost are considered as project cost incurred till date. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, itemwise break-up for cost of materials consumed is not available in the system.

(Rs. in lacs) Note Particulars As at As at March 31,2015 March 31,2014

3. Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt

Service tax* 733.83 413.08

Sales tax** 16.33 16.33

Excise duty*** 180.93 88.33

Labour matter - 5.00

Taxation matters:

against the Company not acknowledged as debt and not provided for, relating to issues of deductibility and taxability in respect of which the Company is in appeal and exclusive of effect of similar matters in respect of assessments remaining to be completed:

- Income Tax 448.37 437.19

2) Items in respect of which the company has succeeded in appeal, but the Income-tax Department is pursuing appeal and exclusive of effect of similar matters in respect of assessments remaining to be completed:

- Income Tax 30.67 30.67

(b) Other matters for which the Company is contingently liable

Advance licence - custom duty elements 38.31 1,087.12

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for

Tangible assets 110.66 113.58

4. Additional information to the financial statements (contd.)

* Matters relating to:

(i) During the period October 2007 to February 2008, the Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company's finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause Notice No. F.No.V(CH84)3-06/Dem./2009-10, dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs. 140.41 lacs of service tax paid as input service during the period October 2007 to February 2008. The Commissioner of Central Excise, Customs and Service tax vide their order No.14/ Dem./Vapi/2010, dated 12.04.2010 upheld the service tax liability of Rs. 300.51 lacs (As at March 31,2014: Rs. 272.67 lacs) including interest of Rs. 160.08 lacs (As at March 31,2014: Rs. 132.24 lacs) with additional penalty of Rs. 140.43 lacs (As at March 31, 2014: Rs. 140.43 lacs). An appeal has been filed by the Company before CESTAT, Ahmedabad vide appeal No.STS/326/2010. The Honorable CESTAT, Ahmedabad, has passed a stay order in favour of the Company and dispensed with the condition of pre-deposit of the duty and penalty amount to the tune of Rs. 440.92 lacs (As at March 31, 2014: Rs. 413.08 lacs) vide order No. 5/570/WZB/ AHD/2011, dated 05.04.2011;

(ii) During the period April 2009 to July 2014, tthe Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company's finished goods in overseas market and availed Cenvat Credit. The Central Excise department had issue a show cause Notice No. SCN NO.05/COMMR/GLT-1/CMI/CEN-D/NON-CERA/2014-15 Dated 26.09.2014 for denial of wrongly availed Cenvat credit of Rs. 184.64 lacs of service tax paid as input service. The Commissioner of Central Excise and Service tax LTU upheld the service tax liability of Rs. 292.91 lacs (As at March 31,2014: Rs. Nil) including interest of Rs. 108.27 lacs (As at March 31,2014: Rs. Nil). The Company has replied to show cause notice.

** Matters relating to (i) detention of goods despatched by vendor of the Company at site of customer without valid TIN/CST mentioned on the invoice on 19.02.2013; (ii) omission of trading purchases and adoption of wrong output tax on lubricants noticed during VAT Audit for the year 2012-13 against which the Company has filed the petition before Joint Commissioner (Vellore) and appeal before Appellate Deputy Commissioner III Chennai respectively.

*** Matter relating to non-reversal of proportionate Cenvat Credit on inventory shortages identified during the course of EA2000 audit conducted for the period from April 2009 to March 2011 against which the Company has filed the appeal. The Commissioner of Central Excise LTU, upheld the excise duty liability of Rs. 180.93 lacs (As at March 31,2014: Rs. 88.33 lacs) including interest of Rs. 92.60 lacs (As at March 31,2014: Rs. Nil).

5. Additional information to the financial statements (contd.)

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

6. Disclosures under Accounting Standards (Contd.)

Segment information

Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identified two geographical segments which comprises of Overseas and India. The segments have been identified taking into account the differing risks and returns relating to these geographical areas.

7. Related party transactions

a Details of related parties:

Description of relationship Names of related parties

Holding Company Cockerill Maintenance & Ingenierie SA

Fellow Subsidiaries (with whomCMI Industry Automation Private Company has Limited made transactions during the year) CMI UVK GmbH CMI M W Engineering GmbH CMI Tech5i Pastor SAS

Key Management Personnel (KMP) Mr. Raman Madhok - Managing Director (w.e.f. October 9, 2013) Mr. Sanjoy Kumar Das - Managing Director (from April 15, 2013 upto October 8, 2013) Mr. Jean Gourp - Managing Director (upto April 15, 2013 and thereafter Executive Director till April 30, 2013)

Note: Related parties have been identified by the Management.

8. Operating Lease:

The Company has entered into operating lease or leave and licence arrangements for residential premises/ godowns (including furniture and fittings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

9. The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc.

10. Due to stress in the steel industry, one of the major customers to whom the net exposure of the Company is Rs. 1,943.76 lacs has been experiencing cash flow problems during the year. However, the management is confident of receiving the amount and believes that no provision is necessary.

11. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification /disclosure.

Mar 31, 2014

(Rs in lacs) Note Particulars As at As at March March 31-2014 31-2013 1.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt Service tax* 413.08 387.81

Sales tax** 16.33 -

Excise duty*** 88.33 -

Labour matter 5.00 5.00

Taxation matters:

1) Demands against the Company not acknowledged as debt and not provided for, relating to issues of deductibil- liy and taxability in respect of which the Company is in appeal and exclusive of the effect of similar matters in respect of assessments remaining to be completed:

- Income Tax 437.19 57.95

2) Items in respect of which the company has succeeded in appeal, but the Income-tax Department is pursuing appeal and exclusive of effect of similar matters in respect of assessments remaining to be completed:

- Income Tax 30.67 30.67

(b) Other matters for which the Company is conting- ently liable Advance licence - custom duty elements 1,087.12 1,346.13

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for

Tangible assets 113.58 229.40

Notes forming part of the financial statements

Note 2 Additional information to the financial statements (contd.)

* During the period October 2007 to February 2008, the Company had paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the Company''s fnished goods in overseas market and availed Cenvat Credit. The Central Excise department had issued a show cause Notice No. F.No.V(CH84)3-06/Dem./2009-10, dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs. 140.41 lacs of service tax paid as input service during the period October 2007 to February 2008. The Commissioner of Central Excise, Customs and Service tax vide their order No.14/Dem./Vapi/2010, dated 12.04.2010 upheld the service tax liability of Rs. 272.67 lacs (As at March 31, 2013: Rs. 247.40 lacs) including interest of Rs. 132.24 lacs (As at March 31, 2013: Rs. 106.97 lacs) with additional penalty of Rs. 140.43 lacs (As at March 31, 2013: Rs. 140.43 lacs). An appeal has been fled by the Company before CESTAT, Ahmedabad vide appeal No.STS/326/2010. The Honorable CESTAT, Ahmedabad, has passed a stay order in favour of the Company and dispensed with the condition of pre-deposit of the duty and penalty amount to the tune of Rs. 413.08 lacs (As at March 31, 2013: Rs. 387.81 lacs) vide order No. 5/570/WZB/AHD/2011, dated 05.04.2011.

** Matters relating to (i) detention of goods despatched by vendor of the Company at site of customer without valid TIN/CST mentioned on the invoice on 19.02.2013; (ii) omission of trading purchases and adoption of wrong output tax on lubricants noticed during VAT Audit for the year 2012-13 against which the Company has fled the appeal/is in process of fling of appeal respectively.

*** Matter relating to non-reversal of proportionate Cenvat Credit on inventory shortages identified during the course of EA2000 audit conducted for the period from April 2009 to March 2011 against which the Company has fled the appeal.

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

Notes forming part of the financial statements

Note 3 Additional information to the financial statements (contd.)

3.1 Details on derivatives instruments and unhedged foreign currency exposures

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecast transactions. The information on Derivative Instruments is as follows:

Details of Forward contracts outstanding in respect of recognised assets, firm commitments and highly probable forecast transactions are as below:

Note: The Company''s records do not distinguish between raw materials, components and stores and spares. Therefore, separate figures for each category of imported items have not been given. The above amounts have been computed based on the purchase bills to the extent identified by the Company, for imported items. The total import purchases of Rs. 6,666.86 lacs (Year ended March 31, 2013: Rs. 8,228.55 lacs) comprise of purchases of goods amounting to Rs. 1,926.42 lacs (Year ended March 31, 2013: Rs. 1,540.73 lacs) on CFR/CPT/ EXW/FCA/FOB/FOT basis.

Note: The total export sales (made under long-term contracts) of Rs. 20,135.92 lacs (Year ended March 31, 2013: Rs. 20,067.83 lacs) comprise of sale of goods amounting to Rs. 9,900.26 lacs (Year ended March 31, 2013: Rs. 7,052.19 lacs) on FOB basis, to the extent identified from the records maintained in the ordinary course of business as above and balance sales on CFR/CIF/DAP/DDP basis.

The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations.

The estimate of future salary increases considered, takes into account the infation, seniority, promotion, increments and other relevant factors.

*Due to absence of data provided by Life Insurance Corporation of India, break-up of plan assets (asset allocation) in insurer managed funds have not been furnished.

The above information has been certifed by the actuary and relied upon by the auditors.

3.4 Segment information

Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identified two geographical segments which comprises of Overseas and India. The segments have been identified taking into account the differing risks and returns relating to these geographical areas.

Secondary Segments:

As the Company''s business activity falls within a single business segment i.e. Original Equipments Manufacturer and Project Management, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

3.5 a Details of related parties:

Description of relationship Names of related parties

Holding Company : Cockerill Maintenance & Ingenierie SA Fellow Subsidiaries (with whom Company has : CMI Industry Automation Private Limited made transactions during CMI UVK GmbH the year) CMI M W Engineering GmbH

Key Management Personnel : Mr. Raman Madhok - Managing Director (KMP) (w.e.f. October 9, 2013) Mr. Sanjoy Kumar Das - Managing Director (from April 15, 2013 upto October 8, 2013) Mr. Jean Gourp - Managing Director (upto April 15, 2013 and thereafter Executive Director till April 30, 2013)

Note: Related parties have been identified by the Management.

3.6 Operating Lease:

The Company has entered into operating lease or leave and licence arrangements for residential premises/ godowns (including furniture and fttings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

With regard to other non-cancellable operating lease for residential premises/godown, the future minimum rentals are as follows: (Rs. in lacs)

3.7 Details of provisions

The Company has made provision for various contractual obligations based on its assessment of the amount it estimates to incur to meet such obligations, details of which are given below:

3.8 The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc. The agreement is effective from January 1, 2010.

The Company has entered into an agreement with CMI SA for rights to use the CMI Brand name. The Company pays 0.6% of net sales. The agreement is effective from January 1, 2010 and the tenure of the agreement is 5 years.

Notes forming part of the financial statements

Note 4 Disclosures under Accounting Standards (Contd.)

4.1 The expenses disclosed under the Statement of profit and Loss are net of the following amounts as stated below which have been capitalised under fixed assets:

4.2 In view of the uncertainty resulting from the protracted negotiation that are ongoing, the Company has made an additional provision of Rs. 1,950.94 lacs during the year in respect of the receivable from a foreign customer that has remained outstanding for over three years. With this, the receivable is fully provided for.

4.3 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classifcation/disclosure.

Mar 31, 2013

1 Corporate Information:

The principal activities of the Company comprise manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet flux line and pickling lines for ferrous and non-ferrous industries world wide.

2.1 Details on derivatives instruments and unhedged foreign currency exposures

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecasted transactions. The information on Derivative Instruments is as follows:

Details of Forward contracts outstanding in respect of recognised assets, firm commitments and highly probable forecasted transactions are as below:

(i) Outstanding forward exchange contracts entered into by the Company as on March 31, 2013:

2.2 Segment information

Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identified two geographical segments which comprises of Overseas and India. The segments have been identified taking into account the differing risks and returns relating to these geographical areas.

Secondary Segments:

As the Company''s business activity falls within a single business segment i.e. Original Equipments Manufacturer and project management, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

2.3 Operating Lease:

The Company has entered into operating lease or leave and licence arrangements for residential premises/ godowns (including furniture and fittings therein as applicable). These leasing arrangements which are not non-cancellable range between 11 months to 36 months.

2.4 The Company has also entered into an agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc. The agreement is effective from January 1, 2010.

The Company has entered into an agreement with CMI SA for rights to use the CMI Brand name. The Company pays 0.6% of net sales. The agreement is effective from January 1, 2010 and the tenure of the agreement is 5 years.

2.5 The expenses disclosed under the Statement of Profit and Loss are net of the following amounts as stated below which have been capitalised under fixed assets:

2.6 The Company has been taking active steps and is hopeful of recovery of an amount of Rs. 2,788.61 lacs (As at March 31, 2012: Rs. 2,447.01 lacs) receivable from a foreign customer which has remained outstanding for over three years for several reasons. By way of abundant caution, it has also made adequate provision therefor in the books of account.

2.7 Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.

Mar 31, 2012

1 Corporate Information:

The principal activities of the Company comprise manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet flux line and pickling lines for ferrous and non-ferrous industries world wide.

(i) Terms/rights attached to equity shares:

The Company is having only one class of equity shares having par value of Rs 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2012, the amount of per share dividend recognised as distribution to equity shareholders was Rs 5/- (March 31, 2011: Rs 20/-)

In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(ii) Long term borrowings from banks towards cash credit are secured by hypothecation of stocks and book debts and by first pari passu charge on the fixed assets of the Company and equitable mortgage of land at Taloja, Silvassa and Andheri. The Company continues to avail non-fund based limits and the charge continues.

Note:

Since the Company is a project management company and engaged in the business of putting up projects for its clients on turnkey basis, the Company is following percentage of completion method as prescribed under Accounting Standard-7 Construction contracts under which project stock, manufactured items and other direct cost are considered as project cost incurred till date. Purchases figure is derived figure. Inventory procured for a specific project is immediately booked to the project as consumed and is not considered as inventory. In view of the above, itemwise break-up for cost of materials consumed is not available in the system.

Note 1 Additional information to the financial statements

(Rs in lacs)

Note Particulars As at As at March 31, 2012 March 31, 2011

1.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

(a) Claims against the Company not acknowledged as debt Service tax* 362.53 337.19

Labour matter 5.00 5.00

Income tax 88.62 -

(b) Other money for which the Company is contingently liable

Advance licence - custom duty elements 432.95 246.67

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets 349.18 76.40

*During the period October 2007 to February 2008, the Company has paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the assessee's finished goods in overseas market and availed Cenvat Credit. The Central Excise department has issued a show cause Notice No. F.No.V(CH84)3-06/Dem./2009-10, dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs 140.41 lacs of service tax paid as input service during the period October 2007 to February 2008. The Commissioner of Central Excise, Customs and Service tax vide their order No.14/ Dem./Vapi/2010, dated 12.04.2010 upheld the service tax liability of Rs 222.12 lacs (As at March 31, 2011: Rs 196.78 lacs) including interest of Rs 81.69 lacs (As at March 31, 2011: Rs 56.35 lacs) with additional penalty of Rs 140.43 lacs (As at March 31, 2011: Rs 140.43 lacs). An appeal has been filed by the Company before CESTAT, Ahmedabad vide appeal No.STS/326/2010. The Honorable CESTAT, Ahmedabad, has passed a stay order in favour of the Company and dispensed with the condition of pre-deposit of the duty and penalty amount to the tune of Rs 362.53 lacs (As at March 31, 2011: Rs 337.19 lacs) vide order No. 5/570/ WZB/AHD/2011, dated 05-04-2011.

1.2 Details on derivatives instruments and unhedged foreign currency exposures

The Company uses Forward Exchange Contracts to hedge its exposure in foreign currency related to firm commitments and highly probable forecasted transactions. The information on Derivative Instruments is as follows:

Details of Forward contracts outstanding in respect of recognised assets, firm commitments and highly probable forecasted transactions are as below:

Note: The Company's records do not distinguish between raw materials, components and stores and spares. Therefore, separate figures for each category of imported items have not been given. The above amounts have been computed based on the purchase bills to the extent identified by the Company, for imported items.

Note: The total export sales (made under long-term contracts) of Rs 9,490.38 lacs (Year ended March 31, 2011: Rs 11,779.94 lacs) comprises of sale of goods amounting to Rs 7,524.45 lacs (Year ended March 31, 2011: Rs 3,920.10 lacs) on FOB basis, to the extent identified from the records maintained in the ordinary course of business as above and balance sales on CFR/CIF basis.

2.1 Segment information

Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identified two geographical segments which comprises of Overseas and India. The segments have been identified taking into account the differing risks and returns relating to these geographical areas.

Secondary Segments:

As the Company's business activity falls within a single business segment i.e. Original Equipments Manufacturer and project management company, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

2.2 Operating Lease:

The Company has entered into operating lease or leave and licence arrangements for residential premises/godowns (including furniture and fittings therein as applicable). The leases are generally non-cancellable and are for a period of 11 months to 2 years under leave and licence.

2.3 The Company has also entered into an agreement with CMI S.A. for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities, etc. The agreement is effective from January 1, 2010.

The Company has entered into an agreement with CMI S.A. for rights to use the CMI Brand name. The Company pays 0.6% of net sales. The agreement is effective from January 1, 2010 and the tenure of the agreement is 5 years.

2.4 The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.

Mar 31, 2011

1. nature of operations:

The principal activities of the Company comprise manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants, wet fux line and pickling lines for ferrous and non- ferrous industries world wide.

2. Contingent liabilities:

(Rs in lacs) sr. no. Particulars 2010-2011 2009-2010

1. Bank Guarantees 3,803.39 10,035.85

2. Letter of Credit to suppliers 1,870.45 1,115.38

3. Advance Licence Ã customs duty element 246.67 49.16

4. Claims against the Company not acknowledged as debts

(a) Excise duty (including interest and penalty) - 193.17

(b) Service Tax* 337.19 280.84

(c) Income Tax - 33.67

(d) Labour Matter 5.00 5.00

* During the period October 2007 to February 2008, the Company has paid service tax on the Commission charged by their non-resident commission agents for the services rendered in connection with sales of the assessees fnished goods in overseas market and availed Cenvat Credit. The Central Excise department has issued a show cause Notice No. F.No.V(CH84)3-06/ Dem./2009-10,dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs140.41 lacs of service tax paid as input service during the period October 2007 to February 2008. The Commissioner of Central Excise, Customs and Service tax vide their order No.14/Dem./Vapi/2010 dated 12.04.2010 upheld the service tax liability of Rs196.76 lacs including interest of Rs56.35 lacs with additional penalty of Rs140.43 lacs. An appeal has been fled by the company before CESTAT, Ahmedabad vide appeal No.STS/326/2010. The Honorable CESTAT, Ahmedabad, has passed a stay order in favour of the company and dispensed with the condition of pre-deposit of the duty and penalty amount to the tune of Rs337.19 lacs vide order No. 5/570/WZB/AHD/2011 dated 05-04-2011.

Tax relating to earlier years (net credit) Rs101.21 lacs [2009-2010: (net debit) Rs38.66 lacs] as disclosed in the Profit and Loss Account, is afiter adjusting Rs9.34 lacs - debit (2009-2010: Rs7.05 lacs - credit) based on assessment orders / judgments received by the Company during the year in respect of earlier years for matters relating to Income tax and Fringe Benefit tax, as the case may be.

Note: Previous years fgures have been given in brackets above.

Disclosures pursuant to AS-29 on Provisions, Contingent Liabilities and Contingent Assets Ã Recognition Criteria:

(a) Expected timing of any resulting outfow of economic benefits Ã over the next 2-3 years.

(b) Indication of uncertainty of these outfows Ã due to estimates and depending on the actual claims for warranties that may be received in future or circumstances that may arise in future concerning provisioning for estimated loss on contracts.

(c) There is no amount of any expected reimbursement in respect of these provisions.

The Company expects to contribute Rs50.00 lacs (2009-2010: Rs50.00 lacs) to its Gratuity plan.

The estimates of future salary increases considered takes into account the infation, seniority, promotion and other relevant factors.

In assessing the Companys employees benefits Liabilities the actuary monitors mortality assumptions and uses up-to-date mortality tables, the base being the LIC 1994-96 ultimate tables.

* Due to absence of data provided by LIC, break-up of plan assets (asset allocation) in insurer managed funds have not been furnished.

The above information has been certified by the actuary and relied upon by the auditors.

*Includes revenue from services rendered in the form of supervision and erection and sale of spares on composite longÃterm contracts. See break-up of income from services rendered below.

note:

Since the Company is a Project Management Company and engaged in the business of putting up Projects for its clients on turnkey basis, the Company is following Percentage of Completion Method as prescribed under Accounting Standard-7 - Construction Contracts under which project stock, manufactured items, bought out items and other direct costs are considered as Project Costs incurred till date. In view of the above, it is not possible to give the details of manufactured items in terms of its quantity and corresponding values. The same is the case with trading items as well. The nature of these items is totally dissimilar. Therefore, it is not possible to split and disclose the quantitative information as required by Schedule VI to the Companies Act, 1956.

notes:

(a) The appointments of the current Managing Director and Deputy Managing Director were approved in the Annual General Meeting held on July 31, 2010.

(b) The excess managerial remuneration amounting to Rs406.26 lacs paid to two former whole-time directors (one of whom has since deceased) in an earlier year was in excess over the limit, specifed under the relevant provisions of the Companies Act, 1956.

(c) The Companys three cars have been retained by the two former directors, namely, Late Mr.T.R.Mehta and Mrs. Nishi T. Mehta when they ceased to be the whole time directors of the Company on June 25, 2008.The book written down value of the cars was Rs16.02 lacs, whilst this is not an allowable item for managerial remuneration under the Companies Act, 1956.

(d) The approvals for waiver from the Central Government have been received on May 16, 2011.

3. segment information:

(1) Geographical segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identifed two geographical segments which comprises of Overseas and India. The segments have been identifed taking into account the differing risks and returns relating to these geographical areas.

(2) secondary segments:

As the Companys business activity falls within a single business segment i.e. OEM manufacturer and project management company in the steel sector, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

During the previous year, the Company has entered into agreement with CMI SA for providing knowhow, access to various industrial processes, development and implementation of strategy, access to best practices for business operations, exploitation of knowledge for new business initiatives, access to new global business opportunities etc. The agreement is effective from January 1, 2010.

The Company has also entered into an agreement with CMI SA for rights to use the CMI Brand name. The Company will pay 0.6% of net sales. The agreement is effective from January 1, 2010 and the tenure of the agreement is 5 years.

operating leases:

The Company has taken residential premises/godowns (including furniture and fittings therein as applicable) under operating lease or leave and license agreements. These are generally non-cancellable and range between 11 months and 3 years under leave and license. Amount debited to rent account under "Manufacturing and Other Expenses" amount to Rs109.60 lacs (2009-10: Rs Rs. 118.41 lacs). Future minimum lease obligations for aforesaid leave and license covenants are detailed below:

The figures for the previous year have been regrouped wherever necessary to conform to the current years classification.

Mar 31, 2010

1. Nature of Operations:

The principal activities of the Company comprise manufacturing and installation of cold rolling mills, galvanizing lines, colour coating lines, tension levelling lines, skin pass mills, acid regeneration plants and pickling lines for ferrous and non-ferrous industries world wide.

2. Contingent liabilities: (Rs. in lacs)

Sr. Particulars 2009-2010 2008-2009 No. 1. Bank Guarantees 10,035.85 8,956.82 2. Letter of Credit to suppliers 1,115.38 125.81 3. Claims against the Company not acknowledged as debts (a) Excise duty (including interest and penalty)* 193.17 183.94 (b) Provident Fund - 15.45 (c) Service Tax** 280.84 - (d) Income Tax - 32.17 (e) Income Tax*** 33.67 - (f) Labour Matter 5.00 -

* During the year 2007-2008, Central Excise Department had rejected the CompanyÃs rebate claim and Cenvat credit aggregating

Rs.141.74 lacs (2008-2009: Rs.141.74 lacs). On appeal, rebate claim of Rs.70.87 lacs was allowed. However, on receipt of fi rst appellate order, the Central Excise department has issued during 2008-2009 a demand notice for Rs.141.74 lacs (2008- 2009: Rs.141.74 lacs) comprising Cenvat Credit disallowance of Rs.70.87 lacs and penalty of Rs.70.87 lacs. The penal interest approximating Rs. 51.43 lacs (2008-2009:Rs.42.20 lacs) is contingent in nature. The demand notice has been appealed before CESTAT against order.

** During the period October 2007 to February 2008, the Company has paid service tax on the Commission charged by their non-resident commission Agents for the services rendered in connection with sales of the assesseeÃs fi nished goods in overseas market and availed Cenvat Credit. The Central Excise department has issued a show cause Notice No.F.No.V(CH84)3-06/ Dem./2009-10, dated 29.10.2009 for denial of wrongly availed Cenvat Credit of Rs.140.41 lacs of service tax paid as input service during the period October 2007 to February 2008.The Commissioner of Central Excise, Customs and Service tax vide their order No.14/Dem./Vapi/2010 dated 12.04.2010 uphold the service tax liability of Rs. 140.41 lacs with additional penalty of Rs 140.43 lacs.The Company has decided to appeal before the CESTAT against order.

*** Favorable decision received in favour of the Company from the Income Tax Appellate Tribunal in respect of which the department has gone in appeal before the Honorable Bombay High Court on November 12, 2009 for Assessment Year 2003- 2004 concerning the matter relating to computing of deduction under Section 80HHC and under Section 80IB of Income Tax Act, 1961 and establishing nexus between interest received and interest paid. Amount involved is Rs.33.67 lacs (2008-2009: Rs. Nil). This matter is pending in the High Court.

Based upon the legal opinion obtained by the Company and further discussions with the Solicitors, the Company believes that there is a fair chance of decision in its favour in respect of details listed in items 3(a), (c), (e) and (f) above and accordingly no provision has been considered necessary.

3. (a) The Income Tax Department had conducted a survey u/s 133A of the Income Tax Act, 1961 at the CompanyÃs premises on January 16, 2009 for matters relating to accounting year 2006-2007 and 2007-2008 (Assessment years 2007-2008 and 2008- 2009). As a result, the Company had revised its income tax returns for those two years and had paid additional Income tax of Rs.631 lacs during 2008-2009 owing to disallowable expense and the same amount had been expensed in 2008-2009 in the Profit and Loss Account on prudence. However, during the year 2009-2010, the Income Tax Department has issued notice of demand aggregating Rs.16.41 lacs (2008-2009:Rs. Nil) under Sectsion 156 of the Income Tax Act, 1961 and the said amount has also been paid during the year by charging it off fully to the Profit and Loss Account and is included in Tax relating to earlier years.

(b) Further, provision for tax relating to earlier years includes Rs. 22.25 lacs (2008-2009: Rs.122.95 lacs) based on assessment orders / judgments received by the Company during the year in respect of earlier years for matters relating to Income tax and Fringe Benefit tax.

4. Provision for commission on Sales aggregating Rs. 91.41 lacs (2008-2009: Rs.949.68 lacs) on certain contracts [including Rs. Nil (2008-2009: Rs.443.21 lacs) provided during the current year] has been reversed during the year in the Profit and Loss Account [Rs. 91.41 lacs (2008-2009: Rs.71.32 lacs) reversal included in Other Income and Rs. Nil (2008-2009: Rs.435.15 lacs) reversal set- off against receivable balance outstanding on certain contracts], on the basis of mutual agreement between the Company and the agents. Accordingly, profit before tax for the year is higher by Rs. 91.41 lacs (2008-2009: Rs.949.68 lacs) than what those would have been had the provision for commission not been reversed.

5. Information in respect of Related Parties:

1. Enterprises controlling the Company:

Cockerill Maintenance & Ingenierie S.A. (Holding Company)

2. Other Related Parties with whom transactions have taken place: a) Fellow Subsidiaries:

1. CMI Industry Automation Private Limited (formerly NT Strips and Automation Private Limited) (w.e.f. June 26, 2008)

2. CMI EFCO Inc.

3. CMI Thermline SAS.

4. CMI UVK GmbH

5. CMI Engineering (Beijing) Co.

6. CMI India Engineering Private Limited

(b) Key Managerial Personnel:

1. Mr. Rob Johnson Ã Managing Director (w.e.f. June 26, 2008)

2. Late Mr. Tilak Raj Mehta Ã Chairman and Managing Director (upto June 25, 2008 and ceased to be Director from November 10, 2008)

3. Mrs. Nishi T. Mehta Ã Whole time Director (upto June 25, 2008 and ceased to be director thereafter)

(c) Enterprises over which Key Managerial personnel are able to exercise significant influence:

1. CMI Industry Automation Private Limited (up to June 25, 2008) (formerly NT Strips and Automation Private Limited)

2. Niraj Metals and Alloys Private Limited (up to November 10, 2008)

3. R. S. Global Shipping (I) Limited (up to November 10, 2008)

Disclosures pursuant to AS-29 on Provisions, Contingent Liabilities and Contingent Assets Ã Recognition Criteria:

a) Expected timing of any resulting outflow of economic benefits Ã over the next 2-3 years.

b) Indication of uncertainty of these outflows Ã due to estimates and depending on the actual claims for warranties that may be received in future or circumstances that may arise in future concerning provisioning for estimated loss on contracts.

c) There is no amount of any expected reimbursement in respect of these provisions.

Note:

Since the Company is a Project Management Company and engaged in the business of putting up Projects for its clients on turnkey basis, the Company is following Percentage of Completion Method as prescribed under Accounting Standard-7 Ã Construction Contracts under which project stock, manufactured items, bought out items and other direct costs are considered as Project Costs incurred till date. In view of the above, it is not possible to give the details of manufactured items in terms of its quantity and corresponding values. The same is the case with trading items as well. The nature of these items is totally dissimilar. Therefore, it is not possible to split and disclose the quantitative information as required by Schedule VI to the Companies Act, 1956.

Notes:

(a) The appointment of the current Managing Director was approved in the Annual General Meeting held on September 19, 2008. An application has been made to the Central Government pursuant to the provisions of sections 198, 269, 309 read with Schedule XIII to the Companies Act, 1956, for which approval is awaited.

(b) The excess managerial remuneration amounting to Rs. 406.26 lacs paid to two former whole-time directors (one of whom has since deceased) in the previous year was in excess over the limit, specified under the relevant provisions of the Companies Act, 1956 and subject to approval of the Central Government, for waiver of recovery. The required documents have been submitted during the year to the Central Government for the waiver of recovery.

(c) The CompanyÃs three cars have been retained by the two former directors, namely, Late Mr.T.R. Mehta and Mrs. Nishi T. Mehta when they ceased to be the whole-time directors of the Company on June 25, 2008.The book written down value of the cars was Rs.16.02 lacs, whilst this is not an allowable item for managerial remuneration under the Companies Act, 1956, this is subject to approval of the Central Government, for waiver. The required documents have been submitted during the year to the Central Government for the waiver of recovery.

6. Segment Information:

(1) Geographical Segments:

The Company has considered geographical segments as the primary segment for disclosure. For the purpose of Segment reporting, the Company has identifi ed two geographical segments which comprises of Overseas and India. The segments have been identifi ed taking into account the differing risks and returns relating to these geographical areas.

(2) Secondary Segments:

As the CompanyÃs business activity falls within a single business segment, i.e., OEM manufacturer and project management company in the steel sector, the disclosure requirement of Accounting Standard (AS-17) for secondary segment reporting is not applicable.

7. The Sales tax department conducted a survey u/s 64 of Maharashtra Value Added Tax Act, 2002 on January 4, 2010 for the matter relating to accounting years 2006-2007 and 2007-2008. As a result, the Company has revised its Sales Tax returns for these two years and paid interest and penal interest amounting to Rs. 13.13 lacs and 48.13 lacs respectively for these two years and the same has been charged to the Profi t and Loss Account for the year.

8. The figures for the previous year have been regrouped wherever necessary to conform to the current yearÃs classifi cation.

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