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Notes to Accounts of Engineers India Ltd.

Mar 31, 2016

1.1 Contingent Liabilities and Commitments

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

Commercial claims including employee''s claims pending in the Courts or lying with Arbitrators amounting to Rs.5509.03 Lakhs (Previous year: Rs.4518.75 Lakhs).

b) Income Tax/ Wealth Tax assessments have been completed upto the assessment year 2013-14.

Company has filed an application for rectification u/s 154 of short credit given for Advance tax, Tax Deducted at Source (TDS) and other processing mistakes amounting to Rs.1496.59 Lakhs for assessment year 2012-13 (Previous Year : Rs.348.86 Lakhs for assessment years 2010- 11 and 2011-12).

Income Tax Department is in appeal for an amount of Rs.363.37 Lakhs with Income Tax Appellate Tribunal against the Commissioner of Income Tax (Appeals) Orders in Company''s favour for the Assessment Years 2002-03, 2004-05 , 2010-11 and 2011-12 (Previous Year : '' 312.55 Lakhs for assessment years 2002-03, 2004-05 and 2010-11).

Company has filed an appeal with Commissioner of Income Tax (Appeal) for an amount of Rs.133.04 Lakhs against the order of Assessing Officer u/s 143(3) for the Assessment Year 2012-13 and 2013-14 ( Previous Year: Rs.43.48 Lakhs for assessment years 2012-13).

Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of Rs.0.32 Lakhs (Previous year: Rs.0.32 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

Company has filed a special leave petition (SLP) before the Supreme Court for an amount of Rs.105.37 Lakhs (Previous Year: Nil) against the order of Delhi High Court regarding interest u/s 244A for the assessment year 2006-07.

Company has filed an appeal against demand of service tax (inclusive of penalty of Rs.31.44 Lakhs) for Rs.62.87 Lakhs (Previous Year: Rs.62.87 lakhs) and interest thereon by Commissioner of Central Excise (Appeals) for the period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The Company has filed an appeal against the order of Additional Commissioner (Appeals), Mathura before Sales Tax Tribunal, Agra for an amount of Rs.132.53 Lakhs (Previous Year : Rs.132.53 Lakhs ) in respect of assessment year 1999-2000 and Rs.116.12 Lakhs (Previous Year : Rs. 116.12 lakhs ) for assessment year 2000-01 on account of sales tax.

The Company has filed an appeal against the order of Additional Commissioner (Appeals), Mathura before Sales Tax Tribunal, Agra for an amount of Rs.18.71 Lakhs (Previous Year : Rs.18.71 Lakhs ) on account of entry tax for the year 1999-2000 and against which an amount of Rs. 5.01 Lakhs (Previous Year : Rs.5.01 Lakhs ) had been deposited.

c) Corporate Guarantee given on behalf of Joint Venture Rs.1150.00 Lakhs (Previous year: Rs.200 Lakhs).

In respect of above contingent liabilities, it is not probable to estimate the timing of cash outflow, if any, pending the resolution of Arbitration/Appellate/Court/ assessment proceedings.

ii) Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs.778.01 Lakhs (Previous year Rs.2182.47 Lakhs).

Company''s estimated share in work programmes committed under production sharing contract in respect of oil & gas exploration blocks as on 31st March, 2016 is Rs.4499.07 Lakhs (Previous year: Rs.5121.53 Lakhs).

1.2 a) Guarantees issued by the banks and outstanding as on 31st March, 2016 Rs.67576.08 Lakhs (Previous year: Rs.74142.29 Lakhs), against which a provision of Rs.23337.63 Lakhs (Previous year: Rs.23079.59 Lakhs) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31st March, 2016 Rs.328.99 Lakhs (Previous year: Rs.3599.88 Lakhs).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31st March, 2016 Rs. 6027.00 Lakhs (Previous year: Rs.22471.50 Lakhs).

1.3 The profit & loss account includes Research & Development expenditure of Rs.1692.06 Lakhs (Previous year: Rs.1767.94 Lakhs).

1.4 i) Land & Buildings includes Rs.0.07 Lakhs (Previous year: Rs.0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

Twintowers Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs.50/- each fully paid.

Gardenview Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs.50/- each fully paid.

Heera Panna Towers Cooperative Housing Society Ltd., Vadodara 10 ordinary shares of Rs.50/- each fully paid.

Suflam Cooperative Housing Society Ltd., Ahmedabad 8 ordinary shares of Rs.250/- each fully paid.

Darshan Co-operative Society Ltd., Vadodara 80 ordinary shares of Rs.50/- each fully paid

ii) The Company is having a plot measuring 6826.90 square meters with three Buildings, comprising of 84 flats at GOKULDHAM, GOREGAON (EAST), MUMBAI. It was noticed that out of total area of 6826.90 square meter, around 4400 square meter of area only is in the Company''s possession.The Company has initiated action by filing an application for eviction under the Public Premises (Eviction Of Unauthorised Occupants) Act 1971 and proceeding thereunder are in progress.The Capitalized cost & Written down value of the above property as on 31st March, 2016 was Rs.238.19 Lakhs ( Previous Year : Rs.238.19 Lakhs) and Rs.49.53 Lakhs (Previous Year : Rs.55.24 Lakhs) respectively.

1.5 There is no impairment of cash generating assets during the year in terms of Accounting Standard (AS-28) "Impairment of Assets".

1.6 i) In terms of provision of Accounting Standard (AS -7) "Construction Contracts", the information in respect of Lumpsum services/ Trunkey Projects for contract in progress as on 31st March, 2016:

a. The aggregate amount of Cost incurred and recognized Profit up to 31st March, 2016 Rs.1151018.90 Lakhs (Previous Year: Rs.948988.09 Lakhs).

b. The amount of advances received Rs.3546.01 Lakhs (Previous Year: Rs.4788.97 Lakhs).

c. The amount of retention Rs.605.00 Lakhs (Previous Year: Rs.576.92 Lakhs)

ii) The estimates with respect total cost and total revenue in respect of construction contracts are reviewed and up dated periodically to ascertain the percentage completion for revenue recognition in accordance with Accounting Standard (AS) -7 "Construction Contracts". However, it is impracticable to quantify the impact of change in estimates.

1.7 The Working Capital and Non fund based facilities from Banks are secured by hypothecation of stocks, book debts and other current assets of the Company, both present and future.

1.8 (A) In terms of Accounting Standard 27, "Financial Reporting of Interest in Joint Ventures of the Company", a brief description of company''s

joint ventures is:

a) TEIL Projects Limited

A joint venture with Tata Projects Limited was formed in the financial year 2008-09 for pursuing projects on engineering procurement and construction basis (EPC Projects) in selected sectors such as oil & gas, fertilizers, steel, railways, power and infrastructure.

The Joint Venture Company formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs.1500 Lakhs & Issued, Subscribed & Paid-up capital of Rs.1000 lakhs.

Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs.10/- each fully paid-up amounting to Rs.500.00 lakhs (Previous year: Rs.500.00 Lakhs) are held by the Company, being 50% of paid-up capital of joint venture company.

Till 31st March, 2015, the joint venture company had accumulated losses to the tune of Rs.1093.30 Lakhs. The Company share of losses for Rs.546.65 Lakhs has been provided for in the financial statements for the year ending 31st March, 2015 as given below:

i) a diminution in value of its investment to the extent of Rs.500.00 Lakhs; and

ii) as additional provision of Rs.46.65 Lakhs for provision from losses of joint venture exceeding company''s investment of Rs.500.00 Lakhs.

During the current financial year 2015-16, the Joint Venture Company had a net profit of Rs.3.64 Lakhs. The company''s share of profit for Rs.1.82 Lakhs has been written back from provision from losses of joint venture exceeding company''s investment of Rs.500.00 Lakhs for the year ending 31st March, 2016.

TEIL Projects Limited Board in its meeting held on 7-10-2015 and 20-01-2016 has recommended that the Company be wound-up after completing the existing jobs by 31st December 2015. The promoter Companies i.e. Engineers India Limited and TATA Projects Limited accordingly have approved the winding up of the Company in their respective Board meetings.

b) Jabal Eiliot Co. Ltd.

A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT Infrastructure & Engineering Services Limited, Mumbai was formed during the financial year 2011-12 for execution of contracts in Saudi Arabia in the field of oil & gas, non ferrous metallurgy, infrastructure projects etc.

The joint venture company namely "Jabal Eiliot Co. Ltd." was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. The Joint Venture Company formed for pursuing its business interests has an initial capital of SR. 15000000, out of which one third i.e. 5000000 SR. (Equivalent Indian Rs.599.00 Lakhs) was contributed by the Company as its share.

Till 31st December, 2014, the Joint Venture Company had incurred losses to the tune of SR 4897181, of which the Company''s share of SR 1632394 (equivalent Indian Rs.195.56 Lakhs at historical conversion rate) which was provided for as diminution in value of investment in company''s financial statements till 31st March, 2015.

Based on unaudited financial statement for the period 1-1-2015 to 22-1-2016 the Joint Venture Company had a net loss of SR 491608 of which Company''s share is SR 37076 after adjustment of taxes between partners (equivalent Rs.4.44 Lakhs at historical conversion rate) which has been provided for as diminution in the value of investment in the financial statements of the Company for the year ended 31st March, 2016.

Despite all around efforts, the JV Company could not secure any EPC business (except one small order of engineering) due to extremely challenging environment coupled with the preconditions of deployment of large work force in KSA to secure business.

In the absence of any business and to arrest further losses of capital the JV partners decided to dissolve the Company and accordingly the Board of Directors of EIL in their meeting held on 30th January, 2015 passed the resolution to initiate action for dissolution and liquidation of JABAL EILIOT Company Limited. The process of dissolution is underway.

In view of process of dissolution, till date the part capital amounting to SR 3308713.33 (equivalent Rs.549.85 Lakhs) was repatriated. The prorata historical cost of SR 3308713.33 works out at Rs.396.38 Lakhs and as such Rs.153.47 Lakhs (Rs.549.85 lakhs - Rs.396.38 lakhs) is recognized as exchange gain on repatriation of part equity share capital of Joint Venture Company.

c) Ramagundam fertilizers and chemicals limited

The Company has, along with National Fertilizers Limited (NFL) and Fertilizer Corporation of India Limited (FCIL) incorporated a joint venture for setting up and operation of a gas based urea and ammonia complex in February, 2015 namely Ramagundam Fertilizers and Chemicals Limited (RFCL) having registered office in Delhi.

The Company has Authorized share capital of Rs.150000 Lakhs consisting 15000 Lakhs shares of face value of Rs.10/- each.

The Shareholding of the Company, on commencement of commercial production of the project shall be in the following proportion: National Fertilizers Limited (NFL): 26%

Engineers India Limited (EIL): 26%

The Fertilizer Corporation of India Limited (FCIL): 11%

Others: 37% (untied as on 31st March 2016)

Shareholding of 11% by FCIL is in consideration of FCIL granting concession rights in the land, opportunity cost and value of usable assets and other items on the land at Ramagundam to the Company.

FCIL shall be allocated shares on completion of compliance of the condition precedent of the Concession Agreement, which is in progress.

1.10 As per Cabinet Committee on Economic Affairs (CCEA) decision, the nominated PSU (EIL) was required to pay a commitment fee of Rs.833.00 Lakhs to Fertilizer Corporation of India (FCIL) for revival of RAMAGUNDAM fertilizer plant so that net worth of FCIL is made positive to enable it to deregister from BIFR. In terms of approval, post deregistration, based on sale of assets by FCIL, the amount can be returned/ adjusted, if necessary.

The approval of Board of EIL was accorded in the financial year 2013-14 for release of Rs.833.00 lakhs towards commitment fee to FCIL subject to refund/adjustment in due course. Till date no amount has been disbursed to FCIL. Pending disbursement, if any, to FCIL, the amount has been disclosed as short term loans & advances recoverable in cash or in kind or for value to be received as an asset and a corresponding liability has been disclosed as other current liabilities in the financial statements of the Company for current year.

Subsequent to deregistration of FCIL from BIFR, the Company along with National Fertilizers Limited (NFL) and Fertilizers Corporation of India (FCIL) has formed a joint venture for setting up and operation of gas based urea and ammonia complex by incorporating a company namely Ramagundam Fertilizers and Chemicals Limited.

1.11 Jointly Controlled Assets

Company has entered into Production Sharing Contracts with Government of India along with other partners for Exploration & Production of Oil and Gas. The Company is a non-operator and is having following participating interest in the ventures. The Company would share Expense/Income/Assets/Liabilities of the ventures on the basis of its percentage in the production sharing contracts. The detail of company''s interest in blocks is as under:

Block No. Participating Interest

CB-ONN-2010/11 20%

CB-ONN-2010/08 20%

Based on unaudited available information, revenue expenditure of Rs.172.08 Lakhs (Previous year: Rs.719.98 Lakhs) and capital expenditure of Rs.737.50 Lakhs (Previous year: Rs.4.77 Lakhs), being the Company''s share has been accounted for in the financial statements for the year ended 31st March, 2016.

In Block No. CB-ONN-2010/11, during current financial year one of the consortium member has defaulted in its obligation towards cash calls. In accordance with Joint operating agreement the lead operator has raised default cash calls and as such proportionate share amounting to Rs.74.82 Lakhs in respect of same has been paid and accounted for as Loans and Advances.

1.12 The disclosures in respect of employee benefits covered under Accounting Standard (AS-15) "Employee Benefits" are made as far as practicable.

In respect of Provident Fund, the Company has a separate irrevocable PF Trust, managing the Provident Fund accumulation of employees. The Guidance on implementing AS15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) of ICAI states that benefits involving employer established provident funds, which require interest shortfalls to be re-compensated by the employer are to be considered as defined benefit plans. In this regard, Actuarial valuation as on 31st March, 2016 was carried out by the Actuary to find out value of Projected Benefit Obligation arising due to interest rate guarantee by the Company towards Provident Fund. In terms of said valuation the Company has no liability towards interest rate guarantee as on 31st March, 2016.

Defined Benefit Plan

Company is having the following Defined Benefit Plans:

- Gratuity (Funded)

- Leave Encashment (Funded)

- Post Retirement Medical Benefits (Funded)

- Long Service Awards (Unfunded)

- Other benefits on Retirement (Unfunded)

1.13 The Board of Directors at their meeting held on 25th May, 2016 has proposed a final dividend of Rs.2/- per share for financial year 2015- 16 (Previous year: Rs.2/- per share) subject to approval of shareholders in annual general meeting. The above is in addition to an interim dividend of Rs.2.00 per share for financial year 2015-16 (Previous year: Rs.3.00 per share) declared and already paid.

1.14 "Offer for sale" of 33693660 equity shares of Rs.5/- each representing 10% of paid up equity share capital of the Company was made on 29th January, 2016 through a separate designated window of the BSE Limited and National Stock Exchange of India Limited by the President of India, acting through Ministry of Petroleum & Natural Gas, Government of India (Promoter). Further, 8388 equity shares of Rs.5/- each of the Company were sold during the year to Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) by the President of India, acting through Ministry of Petroleum & Natural Gas, Government of India. Due to above, shareholding of Government of India (Promoter) was reduced from 69.37% to 59.37%.

1.15 LEASES

a) The Company has taken certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs.1013.27 Lakhs (Previous year Rs.1021.80 Lakhs) has been charged towards these cancellable operating leases.

b) The Company has taken certain assets like car, commercial/residential premises etc. on non-cancellable operating leases. During the year an amount of Rs.950.40 Lakhs has been paid (Previous year Rs.643.73 Lakhs) towards these non-cancellable operating leases. The future minimum lease payments in respect of these leases are as follows:

i) Payable not later than 1 year Rs.681.56 Lakhs (Previous year: Rs.547.96 Lakhs)

ii) Payable later than 1 year and not later than 5 years Rs.78.95 Lakhs (Previous year:Rs.214.74 Lakhs)

iii) Payable later than 5 years Nil (Previous year:Nil).

c) The Company has given certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs.254.46Lakhs (Previous year: Rs.243.17 Lakhs) has been accounted for as rental income in respect of these cancellable operating leases.

1.16 Company is having investment in Petroleum India International (PII), an Association of Person (AOP). PII, since financial year 2010-11 has ceased its business activities and is in the process of dissolution.

The process of dissolution is not completed due to pending activity relating to

a) Income tax Assessment/ Appeals/ Refunds/ Rectification/ nullification of demands etc.

b) Service Tax Refunds.

c) Pending dispute with Bank of Baroda regarding FD of Rs.55.00 Lakhs (approx) on which lien has been marked towards demand that could arise from Saudi British Bank.

Since, the dissolution of PII is not completed due to above factors, Management Committee of PII in their 57th Meeting held on 18-02-2016 at BPCL, Mumbai decided to return all monies forthwith except for retaining some amount to the members of PII.

Due to above decision, Company has received an amount of Rs.1180.00 Lakhs as its share out of total amount of Rs.12354.00 Lakhs distributed to its members.

It was also decided that in case there is subsequent demand received, the members shall return the money in proportion to their share.

It was also decided that corpus fund of PII shall be restored to Rs.5.00 Lakhs per member being original seed capital at the time of formation of PII.

1.17 The balances of Trade receivables, Loans & Advances, Customer''s advances, retention money, Security deposits receivable/payable and Trade payables are subject to confirmation and reconciliation.

1.18 For Lump sum Services and Turnkey Contracts, balance efforts, cost and time to complete the contract including probability of levy for liquidated damages and price reduction schedules for delay as on reporting date are assessed by the management and relied upon by the auditors.

1.19 CSR Activity Reserve amounting to Rs.2753.05 Lakhs (Previous year : Rs.2800.15 Lakhs ) under head Reserves & Surplus (Note 2.2) represents unspent amount, out of amounts set aside of profit earned in the past years for meeting social obligations as per Department of Public Enterprise guidelines for Corporate Social Responsibility and provisions of Companies Act, 2013 and rules made thereunder.

The requisite disclosure relating to CSR expenditure in terms on guidance note on Corporate Social Responsibility (CSR) issued by Institute of Chartered Accountants of India:

(a) Gross amount required to be spent by the company during financial year ended 2015-16 - Rs.1363.01 Lakhs (Previous Year: Rs.1661.49 Lakhs)

(b) Amount spent during the financial year ended 2015-16 on:

1.20 M/s Fernas Construction India Pvt Limited (Contractor) was awarded two contracts in the year 2011 based on evaluation by EIL (Company). One of these orders valued at Rs.180000 Lakhs (approx.) was placed by the client on the basis of recommendations of the Company as a Project Management Consultant for that project and second order (valued at Rs.27200 Lakhs approx.) was placed by the Company being Cost Plus Contractor for the other Project. Based on pseudonymous complaint regarding authenticity of completion certificate submitted by the Contractor based on which the Contractor had qualified for both the contracts, the Company referred the matter to an Investigating Agency. During the year, the Investigating Agency in its report has concluded that completion certificate submitted by the Contractor was bogus.

a) In the case where the Company is the Project Management Consultant, besides findings of certificate submitted by Contractor being bogus, the investigation Agency also alleged connivance of a senior officer of the Company (since superannuated) in relaxing the qualification criteria which enabled the contractor to qualify for the tender for the contract awarded by its client based on recommendations of the Company as a Project Management Consultant.

The concerned officer of the Company as well as the officers of the Contractor have been charge sheeted, by the investigating Agency, for this criminal act and are being tried in a court.

Consequent to above, the Company has communicated the fact of certificate being bogus to the client for an appropriate action at their end. The Company does not envisage any liability in this regard.

b) In other case where order was placed by the Company on the Contractor, consequent upon receipt of findings of investigation agency of certificate submitted by Contractor being bogus, the contract has been terminated in April, 2016 and the Company has encashed performance guarantee of Rs.2719 Lakhs submitted by the Contractor. Balance activities for the contract are to be carried out at the risk and cost of the Contractor in terms of contractual provisions.

The Company has estimated the additional expenditure of Rs.3167 Lakhs to complete the Project and accounted for the same as per applicable Accounting Standard (AS-7).

The Contractor has lodged the claim subsequent to termination of the contract for net amount of Rs.38434 Lakhs. Management does not consider any possible obligation on this account requiring future probable outflow of resources.

1.21 Details of loans given, investment made and guarantee given covered U/S 186 (4) of the Companies Act, 2013

a) Loans given- Nil

b) Investment made are given under Note No. 2.6.

1.22 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

1.23 Remuneration to Chairman & Managing Director and full time Directors are as per their appointment letters from the Ministry of Petroleum & Natural Gas, Government of India, New Delhi. They are also allowed to use the staff car for private journeys upto a ceiling of 1000 kms per month.

1.24 Previous year''s figures have been re-casted and/or regrouped wherever necessary to ensure their presentation in line with the current year''s figures.


Mar 31, 2015

1. Rights, Preferences and Restrictions attaching to Equity Shares

The Company is having one Class of Equity Shares having a Par Value of Rs.5 each. Each Shareholder is eligible for one vote per Share held.

The Dividend proposed by Board of Directors is subject to the approval of Shareholders in the ensuing Annual General Meeting except in case of Interim Dividend. In the event of Liquidation , Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all Preferential amount in proportion to their Shareholding.

2. Contingent Liabilities and Commitments

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

Commercial claims including employee's claims pending in the Courts or lying with Arbitrators amounting to Rs.4518.75 Lakhs (Previous year: Rs.4130.28 Lakhs).

b) Income Tax/Fringe Benefit Tax assessments have been completed upto the assessment year 2012-13. Income Tax liability, if any, in respect of pending assessments for the assessment years 2013-14 and 2014-15 cannot be ascertained although tax as per return/revised return has been paid in full.

Wealth Tax Assessments have been completed upto the Assessment Year 2012-13. Wealth Tax liability, if any, in respect of pending assessments for the Assessment Years 2013-14 and 2014-15 cannot be ascertained although tax on returned wealth has been paid in full.

Company has filed an application for rectification (u/s 154) of short credit given for Tax Deducted at Source (TDS) and other processing mistakes amounting to Rs.348.86 lakhs for assessment years 2010-11 and 2011-12 (Previous Year : Rs.387.52 lakhs for assessment years 2007- 08, 2010-11 and 2011-12).

Income Tax Department is in appeal for an amount of Rs.312.55 lakhs with Income Tax Appellate Tribunal against the Commissioner of Income Tax (Appeals) Orders in Company's favour for the Assessment Years 2002-03,2004-05 and 2010-11 (Previous Year : Rs.608.44 lakhs for assessment years 2002-03 and 2004-05).

Company has filed an appeal with Commissioner of Income Tax (Appeal) for an amount of Rs.43.48 Lakhs against the order of Assessing Officer u/s 143(3) for the Assessment Year 2012-13.

Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of Rs.0.32 Lakhs (Previous year: Rs.0.32 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

Company has filed an appeal against demand of service tax (inclusive of penalty of Rs.31.44 Lakhs) for Rs.62.87 lakhs (Previous Year: Rs.62.87 lakhs) and interest thereon by Commissioner of Central Excise (Appeals) for the period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The Company has filed an appeal against the order of Additional Commissioner (Appeals), Mathura before Sales Tax Tribunal, Agra for an amount of Rs.132.53 Lakhs (Previous Year : Rs.132.53 lakhs ) in respect of assessment year 1999-2000 and Rs.116.12 Lakhs (Previous Year : Rs.116.12 lakhs ) for assessment year 2000-01 on account of sales tax.

The Company has filed an appeal against the order of Additional Commissioner (Appeals), Mathura before Sales Tax Tribunal, Agra for an amount of Rs.18.71 Lakhs (Previous Year : Rs.18.71 lakhs ) on account of entry tax for the year 1999-2000 and against which an amount of Rs.5.01 Lakhs (Previous Year : Rs.5.01 lakhs ) had been deposited.

c) Corporate Guarantee given on behalf of Joint Venture Rs.200 Lakhs (Previous year: Rs.200 Lakhs)

In respect of above contingent liabilities, it is not probable to estimate the timing of cash flow, if any, pending the resolution of Arbitration/ Appellate/Court/ assessment proceedings.

ii) Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for '2182.47 Lakhs (Previous year '5050.63 Lakhs).

Company's estimated share in work programmes committed under production sharing contract in respect of oil & gas exploration blocks as on 31st March, 2015 is Rs.5121.53 Lakhs ( Previous year: Rs.5583.75 Lakhs).

3. a) Guarantees issued by the banks and outstanding as on 31st March, 2015 Rs.73910.64 Lakhs (Previous year: Rs.44825.32 Lakhs), against

which a provision of Rs.23079.59 Lakhs (Previous year: Rs.19941.61 Lakhs) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31st March, 2015 Rs.3599.88 Lakhs (Previous year: Rs.419.98 Lakhs).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31st March, 2015 Rs.22471.50 Lakhs (Previous year: Rs.24300.50 Lakhs)

4. The profit & loss account includes Research & Development expenditure of Rs.1767.94 Lakhs (Previous year: Rs.2092.75 Lakhs).

5. i) Land & Buildings includes Rs.0.07 Lakhs (Previous year: Rs.0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

Twintowers Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs.50/- each fully paid.

Gardenview Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs.50/- each fully paid.

Heera Panna Towers Cooperative Housing Society Ltd., Vadodara 10 ordinary shares of Rs.50/- each fully paid.

Suflam Cooperative Housing Society Ltd., Ahmedabad 8 ordinary shares of Rs.250/- each fully paid.

Darshan Co-operative Society Ltd., Vadodara 80 ordinary shares of Rs.50/- each fully paid

ii) The Company is having a plot measuring 6826.90 square meters with three Buildings, comprising of 84 flats at GOKULDHAM, GOREGAON (EAST), MUMBAI. It was noticed that out of total area of 6826.90 square meter, around 4400 square meter of area only is in the Company's possession.The Company has initiated action by filing an application for eviction under the Public Premises (Eviction Of Unauthorised Occupants) Act 1971 and proceeding thereunder are in progress.The Capitalized cost & Written down value of the above property as on 31st March, 2015 was Rs.238.19 Lakhs ( Previous Year : Rs.238.19 Lakhs) and Rs.55.24 Lakhs (Previous Year : Rs.60.96 Lakhs) respectively.

6. There is no impairment of cash generating assets during the year in terms of Accounting Standard (AS-28) "Impairment of Assets".

7. The Working Capital facilities from Banks are secured by hypothecation of stocks, book debts and other current assets of the Company, both present and future.

8. i) In terms of provision of Accounting Standard (AS -7) "Construction Contracts", the information in respect of Lumpsum services/ Trunkey Projects for contract in progress as on 31st March, 2015:

a. The aggregate amount of Cost incurred and recognized Profit up to 31st March, 2015 Rs.948988.09 Lakhs (Previous Year: Rs. 942196.15 Lakhs).

b. The amount of advances received Rs.4788.97 Lakhs (Previous Year: Rs.1635.01 Lakhs).

c. The amount of retention Rs.576.92 Lakhs (Previous Year: Rs.573.57 Lakhs)

ii) The estimates with respect total cost and total revenue in respect of construction contracts are reviewed and up dated periodically to ascertain the percentage completion for revenue recognition in accordance with Accounting Standard (AS) -7 "Construction Contracts". However, it is impracticable to quantify the impact of change in estimates.

9. (A) In terms of Accounting Standard 27, "Financial Reporting of Interest in Joint Ventures of the Company", a brief description of company's joint ventures is:

a) TEIL Projects Limited

A joint venture with Tata Projects Limited was formed in the financial year 2008-09 for pursuing projects on engineering procurement and construction basis (EPC Projects) in selected sectors such as oil & gas, fertilizers, steel, railways, power and infrastructure.

The Joint Venture Company formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs.1500 Lakhs & Issued, Subscribed & Paid-up capital of Rs.1000 lakhs.

Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs.10/- each fully paid-up amounting to Rs.500.00 lakhs (Previous year: Rs.500.00 Lakhs) are held by the Company, being 50% of paid-up capital of joint venture company.

Till 31st March, 2014, the joint venture company had accumulated losses to the tune of Rs.962.25 Lakhs and the company had provided a diminution in value of investment to the tune of Rs.481.12 Lakhs for its share of loss in its financial statements till 31st March, 2014.

During the current financial year 2014-15, the Joint Venture Company had a net loss of Rs.131.05 Lakhs. The company's share of losses for Rs.65.53 Lakhs has been provided for in the financial statements for the year ending 31st March, 2015 as given below:

i) a further diminution in value of its investment to the extent of Rs.18.88 Lakhs; and

ii) as additional provision of Rs.46.65 Lakhs for cumulative losses of joint venture exceeding company's investment of Rs.500.00 Lakhs b) Jabal Eiliot Co. Ltd.

A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT Infrastructure & Engineering Services Limited, Mumbai was formed during the financial year 2011-12 for execution of contracts in Saudi Arabia in the field of oil & gas, non ferrous metallurgy, infrastructure projects etc.

The joint venture company namely "Jabal Eiliot Co. Ltd." was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. The Joint Venture Company formed for pursuing its business interests has an initial capital of SR. 15000000, out of which one third i.e. 5000000 SR. (Equivalent Indian Rs.599.00 Lakhs) was contributed by the company as its share.

Till 31st December, 2013, the Joint Venture Company had incurred losses to the tune of SR 3757593, of which the Company's share of SR 1252531(equivalent Indian Rs.150.06 Lakhs at historical conversion rate) which was provided for as diminution in value of investment in company's financial statements till 31st March, 2014.

During year ended 31st December, 2014, the Joint Venture Company had a net loss of SR 1139588 of which Company's share is SR 379863 (equivalent Rs.45.50 Lakhs at historical conversion rate) which has been provided for as diminution in the value of investment in the financial statements of the company for the year ended 31st March, 2015.

Despite all around efforts, the JV Company could not secure any EPC business (except one small order of engineering) due to extremely challenging environment coupled with the preconditions of deployment of large work force in KSA to secure business.

In the absence of any business and to arrest further losses of capital the JV partners decided to dissolve the company and accordingly the Board of Directors of EIL in their meeting held on 30th January, 2015 passed the resolution to initiate action for dissolution and liquidation of JABAL EILIOT Company Limited. The process of dissolution is underway.

In the meantime, part of capital amounting to SR 3000000 (equivalent Rs.495.35 lakhs at current conversion rate) was repatriated. The prorata historical cost of SR 3000000 works out at Rs.359.40 lakhs and as such Rs.135.95 lakh (Rs.495.35 lakhs- Rs.359.40 lakhs) is recognized as exchange gain on repatriation of part equity share capital of Joint Venture Company.

10. As per Cabinet Committee on Economic Affairs (CCEA) decision, the nominated PSU (EIL) was required to pay a commitment fee of Rs.833.00 lakhs to Fertilizer Corporation of India (FCIL) for revival of Ramagundam Fertilizer plant so that net worth of FCIL is made positive to enable it to deregister from BIFR. In terms of approval, post deregistration, based on sale of assets by FCIL, the amount can be returned/adjusted, if necessary.

The approval of Board of EIL was accorded in the financial year 2013-14 for release of Rs.833.00 lakhs towards commitment fee to FCIL subject to refund/adjustment in due course. Till date no amount has been disbursed to FCIL. Pending disbursement, if any, to FCIL, the amount has been disclosed as short term loans & advances recoverable in cash or in kind or for value to be received as an asset and a corresponding liability has been disclosed as other current liabilities in the financial statements of the company for current year.

Subsequent to deregistration of FCIL from BIFR, the company along with National Fertilizers Limited (NFL) and Fertilizers Corporation of India (FCIL) has formed a joint venture during the current year for setting up and operation of gas based urea and ammonia complex by incorporating a company namely Ramagundam Fertilizers and Chemicals Limited.

11. Defined Benefit Plan

Company is having the following Defined Benefit Plans:

* Gratuity (Funded)

* Leave Encashment (Funded)

* Post Retirement Medical Benefits (Funded)

* Long Service Awards (Unfunded)

* Other benefits on Retirement (Unfunded)

12. DISCLOSURE PURSUANT TO AS-18 "RELATED PARTY DISCLOSURES":- (A) RELATED PARTIES:

S. NAME OF THE RELATED PARTY NATURE OF RELATIONSHIP N0.

1. CERTIFICATION ENGINEERS INTERNATIONAL LIMITED WHOLLY OWNED SUBSIDIARY

2. EIL ASIA PACIFIC SDN BHD WHOLLY OWNED SUBSIDIARY

3. PETROLEUM INDIA INTERNATIONAL ASSOCIATION OF PERSON

4. TEIL PROJECTS LTD. JOINT VENTURE COMPANY

5. JABAL EILIOT CO. LTD. JOINT VENTURE COMPANY

6. RAMAGUNDAM FERTILIZERS AND CHEMICALS LIMITED JOINT VENTURE COMPANY

7. OIL AND GAS EXPLORATION AND UNINCORPORATED JOINT PRODUCTION BLOCK NO. VENTURE - NON OPERATOR CB-ONN-2010/8 WITH PARTICIPATING INTEREST 20%

8. OIL AND GAS EXPLORATION AND UNINCORPORATED JOINT PRODUCTION BLOCK NO. VENTURE - NON OPERATOR CB-ONN-2010/11 WITH PARTICIPATING INTEREST 20%

9. DIRECTORS/ KEY MANAGEMENT PERSONNEL

Mr. A. K. PURWAHA CHAIRMAN & MANAGING DIRECTOR

Dr. ARCHANA S. MATHUR DIRECTOR (GOVT. NOMINEE)

Mr. RAM SINGH DIRECTOR (FINANCE)

Mr. D. MOUDGIL DIRECTOR (PROJECTS)- upto 31st August, 2014

Mr. SANJAY GUPTA DIRECTOR (COMMERCIAL)

Ms. VEENA SWARUP DIRECTOR (HR)

Mr. AJAY N. DESHPANDE DIRECTOR (TECHNICAL)

Mr. ASHWANI SONI DIRECTOR (PROJECTS) - w.e.f. 1st September, 2014

Mr. ADIT JAIN NON-OFFICIAL INDEPENDENT DIRECTOR - upto 27th August, 2014

Mr. BIJOY CHATTERJEE NON-OFFICIAL INDEPENDENT DIRECTOR

Dr. J.P.GUPTA NON-OFFICIAL INDEPENDENT DIRECTOR

Dr. R.K.SHEVGAONKAR NON-OFFICIAL INDEPENDENT DIRECTOR

Mr. D. R. MEENA NON-OFFICIAL INDEPENDENT DIRECTOR - upto 27th August, 2014

Dr. V. VIZIA SARADHI NON-OFFICIAL INDEPENDENT DIRECTOR - upto 27th August, 2014

Mr. RAJAN KAPUR COMPANY SECRETARY

13. The Board of Directors at their meeting held on 27th May, 2015 has proposed a final dividend of Rs.2/- per share for financial year 2014- 15 (Previous year: Rs.3/- per share) subject to approval of shareholders in annual general meeting. The above is in addition to an interim dividend of Rs.3.00/- per share for financial year 2014-15 (Previous year: Rs.3.50 per share) declared and already paid.

14. LEASES

a) The Company has taken certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs.1021.80 Lakhs (Previous year Rs.1003.05 Lakhs) has been charged towards these cancellable operating leases.

b) The Company has taken certain assets like car, commercial/residential premises etc. on non-cancellable operating leases. During the year an amount of Rs.643.73 Lakhs has been paid (Previous year Rs.362.97 Lakhs) towards these non-cancellable operating leases. The future minimum lease payments in respect of these leases are as follows:

i) Payable not later than 1 year Rs.547.96 Lakhs (Previous year: Rs.393.94 Lakhs)

ii) Payable later than 1 year and not later than 5 years Rs.214.74 Lakhs (Previous year: Rs.343.92 Lakhs)

iii) Payable later than 5 years Nil (Previous year: Nil).

c) The Company has given certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs.243.17 Lakhs (Previous year: Rs.231.59 Lakhs) has been accounted for as rental income in respect of these cancellable operating leases.

15. (i) In one of the turnkey project executed by the company in previous years, the client had levied the price discount and accordingly reduced contract price was recognized as revenue in terms of accounting principles. During the year, the settlement in respect of the same has been completed with client and accordingly segment revenue and profits for turnkey projects includes an amount of Rs.7621.56 lakhs towards refund of price discount levied by the client.

(ii) In one of ongoing turnkey project the Company had in previous years reduced the contract price on account of liquidated damages for delays in the completion of the contract as per provision of AS 7 "Construction Contracts". During the year, the project was mechanically completed and in terms of contractual provisions, Management has estimated that no liquidated damages shall be incurred and as such adjustment in the contract price has been made, resulting into increase in revenue and profit from turnkey segment by Rs.4914.47 Lakhs and Rs.4865.32 Lakhs respectively.

16. The balances of Trade receivables, Loans & Advances, Customer's advances, retention money, Security deposits receivable/payable and Trade payables are subject to confirmation and reconciliation.

17. For Lump sum Services and Turnkey Contracts, balance efforts, cost and time to complete the contract including probability of levy for liquidated damages and price reduction schedules for delay as on reporting date are assessed by the management and relied upon by the auditors.

a) Contractual Obligations :

Contractual obligations represent provision for estimated liabilities on account of guarantees and warranties etc. in respect of consultancy & engineering services and turnkey contracts executed by the Company. The said obligation covers performance as well as defect liability period defined in the respective contracts.

For turnkey contracts, the estimated liability on account of contractual obligations is provided at 1% of revenue recognized based on risk assessment made by the management. For consultancy & engineering services contracts the estimated liability on account of contractual obligations is provided as per assessment of probable liability made by the management based on liability clauses in respective contracts.

b) Expected Losses :

For each contracts, at reporting date, total contract cost and total contract revenue are estimated. In respect of contracts, where it is probable that total estimated contract cost will exceed the estimated total contract revenue, the expected loss is recognised as an expense in the statement of Profit and Loss as per principles of Accounting Standard AS -7, "Construction Contracts".

iii) The disclosures in respect of contingent liabilities are given as per Note No. 2.17.

18. CSR Activity Reserve amounting to Rs.2800.15 Lakhs (Previous year : Rs.2820.56 Lakhs ) under head Reserves & Surplus (Note 2.2) represents unspent amount, out of amounts set aside of profit earned in the past years for meeting social obligations as per Department of Public Enterprise guidelines for Corporate Social Responsibility and provisions of Companies Act, 2013 and rules made thereunder.

The requisite disclosure relating to CSR expenditure in terms on guidance note on Corporate Social Responsibility (CSR) issued by Institute of Chartered Accountants of India:

(a) Gross amount required to be spent by the company during financial year ended 2014-15 - Rs.1661.49.

19. In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

20. Remuneration to Chairman & Managing Director and full time Directors are as per their appointment letters from the Ministry of Petroleum & Natural Gas, Government of India, New Delhi. They are also allowed to use the staff car for private journeys upto a ceiling of 1000 kms per month.

21. Previous year's figures have been re-casted and/or regrouped wherever necessary to ensure their presentation in line with the current year's figures.


Mar 31, 2014

1.1 Contingent Liabilities and Commitments

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

Commercial claims including employee''s claims pending in the Courts or lying with Arbitrators amounting to Rs. 4130.28 Lakhs (Previous year: Rs. 3532.45 Lakhs).

b) Income Tax/Fringe Benefit Tax assessments have been completed upto the assessment year 2011-12. Income Tax liability, if any, in respect of pending assessments for the assessment years 2012-13 and 2013-14 cannot be ascertained although tax as per return/revised return has been paid in full.

Wealth Tax Assessments have been completed upto the Assessment Year 2011-12. Wealth Tax liability, if any, in respect of pending assessments for the Assessment Years 2012-13 and 2013-14 cannot be ascertained although tax on returned wealth has been paid in full.

Company has filed an application for rectification (u/s 154) of short credit given for Tax Deducted at Source (TDS) and other processing mistakes amounting to Rs.387.52 lakhs for assessment years 2007-08, 2010-11 and 2011-12 (Previous Year : Rs.248.24 lakhs for assessment year 2010-11).

Income Tax Department is in appeal for an amount of Rs.608.44 lakhs (Previous Year : Rs.608.44 lakhs ) with Income Tax Appellate Tribunal against the Commissioner of Income Tax (Appeals) Orders in Company''s favour for the Assessment Years 2002-03 and 2004-05.

Income Tax Department is in appeal for an amount of Rs. 109.39 lakhs (Previous Year : Rs. 109.39 lakhs ) with Delhi High Court against the order of Income Tax Appellate Tribunal (ITAT) in Company''s favour for the Assessment Year 2006-07.

Company has filed an appeal with Commissioner of Income Tax (Appeal) for an amount of Rs. 50.82 Lakhs against the order of Assessing Officer u/s 143(3) for the Assessment Year 2011-12.

Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of Rs. 0.32 Lakhs (Previous year: Rs. 0.32 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

Company has filed an appeal against demand of service tax (inclusive of penalty of Rs. 31.44 Lakhs) for Rs. 62.87 lakhs (Previous Year: Rs. 62.87 lakhs) and interest thereon by Commissioner of Central Excise (Appeals) for the period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

The Company has filed an appeal against the order of Assessing Authority, Mathura before Commissioner (Appeals), Mathura for an amount of Rs. 132.53 Lakhs (Previous Year : Rs. 132.53 lakhs ) for assessment year 1999-2000 and Rs. 116.12 Lakhs (Previous Year : Rs. 116.12 lakhs ) for assessment year 2000-01 respectively on account of sales tax.

The Company has filed an appeal before Sales tax Tribunal, Agra against the order of Commissioner (Appeal), Mathura for an amount of Rs. 18.71 Lakhs (Previous Year : Rs. 20.05 lakhs ) on account of entry tax for the year 1999-2000 against which company has deposited an amount of Rs. 5.01 Lakhs (Previous Year : Rs. 5.01 lakhs ).

c) Corporate Guarantee given on behalf of Subsidiary Rs. 1000 Lakhs (Previous year: Rs. 1000 Lakhs)

d) Corporate Guarantee given on behalf of Joint Venture Rs. 200 Lakhs (Previous year: Nil)

In respect of above contingent liabilities, it is not probable to estimate the timing of cash flow, if any, pending the resolution of Arbitration/Appellate/Court/ assessment proceedings.

ii) Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 5050.63 Lakhs.( Previous year Rs. 6686.35 Lakhs) Company''s estimated share in work programmes committed under production sharing contract in respect of oil & gas exploration blocks as on 31st March, 2014 is Rs. 5583.75 Lakhs ( Previous year: Rs. 5540.28 Lakhs).

2.1 a) Guarantees issued by the banks and outstanding as on 31st March, 2014 Rs. 44825.32 Lakhs (Previous year: Rs. 30070.20 Lakhs), against which a provision of Rs. 19941.61 Lakhs (Previous year: Rs. 10984.74 Lakhs) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31st March, 2014 Rs. 419.98 Lakhs (Previous year: Rs. 2295.73Lakhs).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31st March, 2014 Rs. 24300.50 Lakhs (Previous year: Rs. 19047.00 Lakhs)

2.2 The profit & loss account includes Research & Development expenditure of Rs. 2092.75 Lakhs (Previous year: Rs. 1607.29 Lakhs).

2.3 i) Land & Buildings includes Rs. 0.07 Lakhs (Previous year: Rs. 0.07 Lakhs) being amount invested as share money in Cooperative Housing

Societies as detailed below:

Twintowers Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs. 50/- each fully paid. Gardenview Premises Cooperative Society Ltd., Mumbai

10 ordinary shares of Rs. 50/- each fully paid. Heera Panna Towers Cooperative Housing Society Ltd., Vadodara

10 ordinary shares of Rs. 50/- each fully paid. Suflam Cooperative Housing Society Ltd., Ahmedabad

8 ordinary shares of Rs. 250/- each fully paid. Darshan Co-operative Society Ltd., Vadodara

80 ordinary shares of Rs. 50/- each fully paid

ii) The Company is having a plot measuring 6826.90 square meters with three Buildings, comprising of 84 flats at GOKULDHAM, GOREGAON (EAST), MUMBAI. It was noticed during the current year that out of total area of 6826.90 square meter, around 4400 square meter of area is in the Company''s possession. The Company is in the process of initiating the action for reclaiming the remaining area. The Capitalized cost & Written down value of the above property as on 31st March, 2014 was Rs. 238.19 Lakhs and Rs.60.96 Lakhs respectively.

2.4 The Government Grant amounting to Rs.15.17 Lakhs (Previous year :Nil) received for setting up of Off Grid Solar Photovoltaic power plant has been deducted from the gross value of plant.

2.5 There is no impairment of cash generating assets during the year in terms of Accounting Standard (AS-28) "Impairment of Assets”.

2.6 The Working Capital facilities from Banks are secured by hypothecation of stocks, book debts and other current assets of the Company, both present and future.

2.7 i) In terms of provision of Accounting Standard (AS –7) "Construction Contracts”, the information in respect of Lumpsum services/ Turnkey Projects for contract in progress as on 31st March, 2014:

a. The aggregate amount of Cost incurred and recognized Profit up to 31st March, 2014 Rs. 942196.15 lakhs (Previous Year: Rs. 949093.43 Lakhs).

b. The amount of advances received Rs. 1635.01 lakhs (Previous Year: Rs. 3100.40 Lakhs).

c. The amount of retention Rs. 573.57 Lakhs (Previous Year: Rs. 573.57 Lakhs)

ii) The estimates with respect to total cost and total revenue in respect of construction contracts are reviewed and up dated periodically to ascertain the percentage completion for revenue recognition in accordance with Accounting Standard (AS) -7 "Construction Contracts”. However, it is impracticable to quantify the impact of change in estimates.

2.8 In terms of Accounting Standard 27, "Financial Reporting of Interest in Joint Ventures of the Company”, a brief description of joint ventures of the Company is:

a) TEIL Projects Limited

A joint venture with Tata Projects Limited was formed in the financial year 2008-09 for pursuing projects on engineering procurement and construction basis (EPC Projects) in selected sectors such as oil & gas, fertilizers, steel, railways, power and infrastructure.

The Joint Venture Company formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs. 1500 Lakhs & Issued, Subscribed & Paid-up capital of Rs. 1000 lakhs.

Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs. 10/- each fully paid-up amounting to Rs. 500.00 lakhs (Previous year: Rs. 500.00 Lakhs) are held by the Company, being 50% of paid-up capital of joint venture company.

Till 31st March, 2013, the joint venture company had accumulated losses to the tune of Rs. 870.69 Lakhs and the company had provided a diminution in value of investment to the tune of Rs. 435.34 Lakhs for its share of loss in its financial statements till 31st March, 2013. During the current financial year 2013-14, the Joint Venture Company had a net loss of Rs. 91.56 Lakhs and the company has provided a further diminution in value of its investment to the extent of Rs. 45.78 Lakhs for its share of loss in the financial statements for the year ending 31st March, 2014.

b) Jabal Eiliot Co. Ltd.

A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT Infrastructure & Engineering Services Limited, Mumbai was formed during the financial year 2011-12 for execution of contracts in Saudi Arabia in the field of oil & gas, non ferrous metallurgy, infrastructure projects etc.

The joint venture company namely "Jabal Eiliot Co. Ltd.” was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. The Joint Venture Company formed for pursuing its business interests has an initial capital of SR. 15000000, out of which one third i.e. 5000000 SR. (Equivalent Indian Rs. 599.00 Lakhs) was contributed by the company as its share.

Till 31st December, 2012, the Joint Venture Company had incurred losses to the tune of SR 2124126 of which the Company''s share was SR 708042 (equivalent Indian Rs. 84.83 Lakhs). The Company had provided Rs.84.83 Lakhs, its share of loss, as diminution in value of investment in its financial statements for the year ended 31st March, 2013. During the financial year ended 31st December, 2013, the Joint Venture Company had a net loss of SR 1633467 of which Company''s share is SR 544489 (equivalent Rs.65.23 Lakhs ) which has been provided as further diminution in value of its investment in the financial statements for the year ending 31st March, 2014.

2.9 The disclosures in respect of employee benefits covered under Accounting Standard (AS-15) "Employee Benefits” are made as far as practicable.

In respect of Provident Fund, the company has a separate irrevocable PF Trust, managing the Provident Fund accumulation of employees. The Guidance on implementing AS15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) of ICAI states that benefits involving employer established provident funds, which require interest shortfalls to be re-compensated by the employer are to be considered as defined benefit plans. In this regard, Actuarial valuation as on 31st March, 2014 was carried out by the Actuary to find out value of Projected Benefit Obligation arising due to interest rate guarantee by the Company towards Provident Fund. In terms of said valuation the Company has no liability towards interest rate guarantee as on 31st March, 2014.

Defined Benefit Plan

Company is having the following Defined Benefit Plans:

- Gratuity (Funded)

- Leave Encashment (Funded)

- Post Retirement Medical Benefits (Funded)

- Long Service Awards (Unfunded)

- Other benefits on Retirement (Unfunded)

2.10 The Board of Directors at their meeting held on 23rd May, 2014 has proposed a final dividend of Rs. 3/- per share for financial year 2013-14 (Previous year: Rs. 3/- per share) subject to approval of shareholders in annual general meeting. The above is in addition to an interim dividend of Rs. 3.50/- per share for financial year 2013-14 (Previous year: Rs. 3/- per share) declared and already paid.

2.11 LEASES

a) The Company has taken certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs. 1003.05 Lakhs (Previous year Rs. 861.07 Lakhs) has been charged towards these cancellable operating leases.

b) The Company has taken certain assets like car, commercial/residential premises etc. on non-cancellable operating leases. During the year an amount of Rs. 362.97 Lakhs has been paid (Previous year Rs.242.31 Lakhs) towards these non-cancellable operating leases. The future minimum lease payments in respect of these leases are as follows:

i) Payable not later than 1 year Rs. 393.94 Lakhs (Previous year: Rs. 191.80 Lakhs)

ii) Payable later than 1 year and not later than 5 years Rs. 343.92 Lakhs (Previous year: Nil)

iii)Payable later than 5 years Nil (Previous year: Nil).

c) The Company has given certain office/residential premises on operating lease which are cancellable by giving appropriate notices as per respective agreements. During the year an amount of Rs. 231.59 Lakhs (Previous year: Rs. 150.33 Lakhs) has been accounted for as rental income in respect of these cancellable operating leases.

2.12 The Accounting policy No.1.3 A (b) with respect to Turnover/Work in progress has been changed as "No income has been taken into account for jobs for which the terms have been agreed to at lumpsum services/turnkey contracts and outcome of job cannot be estimated reliably” against earlier policy of "No income has been taken into account for jobs for which the terms have been agreed to at lumpsum services/turnkey contracts and physical progress is less than 25%”. Due to above change, the revenue from operations and profit for the current year has been increased by Rs. 380.68 Lakhs and Rs. 292.68 Lakhs respectively.

2.13 The balances of Trade receivables, Loans & Advances, Customer''s advances, retention money, Security deposits receivable/payable and Trade payables are subject to confirmation and reconciliation.

2.14 For Lump sum Services and Turnkey Contracts, balance efforts, cost and time to complete the contract including probability for liquidated damages and price reduction schedules as on reporting date are assessed by the management and relied upon by the auditors.

ii) Nature of provision:

Contractual obligations represent provision for estimated liabilities on account of guarantees and warranties etc. in respect of consultancy & engineering services and turnkey contracts executed by the Company. The said obligation covers performance as well as defect liability period defined in the respective contracts.

For turnkey contracts, the estimated liability on account of contractual obligations is provided at 1% of revenue recognized based on risk assessment made by the management. For consultancy & engineering services contracts the estimated liability on account of contractual obligations is provided as per assessment of probable liability made by the management based on liability clauses in respective contracts.

iii) The disclosures in respect of contingent liabilities are given as per Note No. 2.17.

2.15 CSR Activity Reserve amounting to Rs. 2820.56 Lakhs (Previous year: Rs. 2211.90 Lakhs ) under head Reserves & Surplus (Note 2.2) represents unspent amount, out of amounts set aside as 2% of profit earned in the past years for meeting social obligations as per Department of Public Enterprise guidelines for Corporate Social Responsibility.

2.16 During the current financial year "Further Public Offer” of 33693660 equity shares of Rs.. 5/- each representing 10% of paid up equity share capital of the company was made through an offer for sale by the President of India, acting through Ministry of Petroleum & Natural Gas, Government of India via 100% book building process. Further, 3479581 equity shares of Rs. 5/- each representing 1.03% of equity share capital of the company were sold to Central Public Sector Enterprises Exchange Traded Fund (CPSE ETF) by the President of India, acting through Ministry of Petroleum & Natural Gas, Government of India. Due to above, shareholding of Government of India was reduced from 80.40% as on 31st March, 2013 to 69.37% as on 31st March, 2014.

2.17 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

2.18 Remuneration to Chairman & Managing Director and full time Directors are as per their appointment letters from the Ministry of Petroleum & Natural Gas, Government of India, New Delhi. They are also allowed to use the staff car for private journeys upto a ceiling of 1000 kms per month.

2.19 Previous year''s figures have been re-casted and/or regrouped wherever necessary to ensure their presentation in line with the current year''s figures.


Mar 31, 2013

1.1 CONTINGENT LIABILITIES AND COMMITMENTS

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

i) Commercial claims pending in the Courts or lying with Arbitrators amounting to Rs. 3532.45 Lakhs (Rs. 2092.40 Lakhs).

ii) Few cases relating to the employees/others are pending in the Court against the Company, in respect of which the liability is not ascertainable.

b) Income Tax/Fringe Benefit Tax assessments have been completed upto the assessment year 2010-11. Income Tax liability, if any, in respect of pending assessments for the assessment years 2011-12 and 2012-13 cannot be ascertained although tax as per return/revised return has been paid in full.

Wealth Tax Assessments have been completed upto the Assessment Year 2010-11. Wealth Tax liability, if any, in respect of pending assessments for the Assessment Years 2011-12 and 2012-13 cannot be ascertained although tax on returned wealth has been paid in full.

Company has filed an application for rectification (u/s 154) of short credit given for Tax Deducted at Source (TDS) and other processing mistakes amounting toRs. 248.24 lakhs for Assessment year 2010-11.

Income Tax Department is in appeal for an amount of Rs. 608.44 lakhs with Income Tax Appellate Tribunal against the Commissioner of Income Tax (Appeals) Orders in Company''s favour for the Assessment Years 2002-03 and 2004-05.

Income Tax Department is in appeal for an amount of Rs.109.39 lakhs with Delhi High Court against the order of Income Tax Appellate Tribunal (ITAT) in Company''s favour for the Assessment Year 2006-07.

Income Tax Department is in appeal for an amount of Rs. 52.84 lakhs with Supreme Court of India against the order of Delhi High Court in Company''s favour for the Assessment Years 2006-07 and 2007-08.

Company has filed an appeal with Commissioner of Income Tax (Appeal) for an amount of Rs. 32.26 Lakhs against the order of Assessing Officer u/s 143(3) for the Assessment Year 2010-11.

Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of Rs. 0.32 Lakhs ( Rs. 2.55 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

Company has filed an appeal against demand of service tax (inclusive of penalty of Rs. 31.44 Lakhs) for Rs. 62.87 lakhs (Rs. 62.87 lakhs) and interest thereon by Commissioner of Central Excise (Appeals) for the period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Sales Tax Department was in appeal against the order of Joint Commissioner (Appeals) in Company''s favour for an amount of Rs.132.53 Lakhs for assessment year 1999-2000 and Rs. 116.12 Lakhs for assessment year 2000-01 respectively before Sales Tax Tribunal, Agra which has since been referred back to the Assessing Authority, Mathura.

The Company was in appeal before Sales tax Tribunal, Agra against the demand of Sales Tax Department for Rs. 20.05 Lakhs on account of entry tax for the year 1999-2000 against which company has deposited an amount of Rs. 5.01 Lakhs.The matter has since been referred back to the Assessing Authority, Mathura.

c) Guarantees given on behalf of Subsidiary Rs. 1000 Lakhs (Nil)

In respect of above contingent liabilities, it is not probable to estimate the timing of cash flow, if any, pending the resolution of Arbitration/Appellate/Court/ assessment proceedings.

ii) Commitments:

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 6686.35 Lakhs (Rs.6318.34 Lakhs)

1.2 a) Guarantees issued by the banks and outstanding as on 31st March, 2013 Rs. 30070.20 Lakhs (Rs. 30883.13 Lakhs), against which a provision of Rs.10984.74 Lakhs (Rs.15082.73 Lakhs ) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31st March, 2013 Rs. 2295.73 Lakhs (Rs.25403.92 Lakhs).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31st March, 2013 Rs. 19047.00 Lakhs (Rs. 19132.50 Lakhs)

1.3 The profit & loss account includes Research & Development expenditure of Rs. 1607.29 Lakhs (Rs. 1546.30 Lakhs).

1.4 Land & Buildings includes Rs.0.07 Lakhs (Rs. 0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

Twintowers Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs. 50/- each fully paid.

Gardenview Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs. 50/- each fully paid.

Heera Panna Towers Cooperative Housing Society Ltd.,Vadodara 10 ordinary shares of Rs. 50/- each fully paid.

Suflam Cooperative Housing Society Ltd., Ahmedabad 8 ordinary shares of Rs. 250/- each fully paid.

Darshan Co-operative Society Ltd., Vadodara 80 ordinary shares of Rs. 50/- each fully paid

1.5 The title deed in respect of following buildings is pending execution in the favor of the Company since previous years. The amount of registration charges, if any, shall be deposited in due course.

1.6 There is no impairment of cash generating assets during the year in terms of Accounting Standard (AS-28)"Impairment of Assets''.

1.7 The movement in provision for doubtful debts and advances during the year is as follows:

1.8 Company is primarily operating under two segments namely Consultancy & Engineering Projects and turnkey Projects. The broad heads under which income of the company is accounted for as per provisions of AS-7 (Construction Contracts) are as under:

1.9 Information regarding imports and foreign exchange earnings, expenditures etc. (excluding exchange difference on conversion of foreign currency).

1.10 The Working Capital facilities from Banks are secured by hypothecation of stocks, book debts and other current assets of the Company, both present and future.

1.11 In terms of provision of Accounting Standard (AS -7) "Construction Contracts''" the information in respect of Lumpsum services/ Trunkey Projects for contract in progress as on 31.03.2013:

a. The aggregate amount of Cost incurred and recognized Profit up to 31.03.2013 Rs. 949093.43 lakhs (Rs. 803713.62 Lakhs).

b. The amount of advances received Rs. 3100.40 lakhs (Rs. 1739.90 Lakhs).

c. The amount of retention - Rs. 573.57 Lakhs (Rs. 1102.77 Lakhs)

1.12 In terms of Accounting Standard 27, "Financial Reporting of Interest in Joint Ventures of the Company''" a brief description of joint ventures of the Company is:

a) TEIL Projects Limited

A joint venture with Tata Projects Limited was formed in the financial year 2008-09 for pursuing projects on engineering procurement and construction basis (EPC Projects) in selected sectors such as oil & gas, fertilizers, steel, railways, power and infrastructure.

The Joint Venture Company formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs. 1500 Lakhs & Issued, Subscribed & Paid-up capital of Rs.1000 lakhs.

Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs.10/- each fully paid-up amounting to Rs. 500.00 lakhs (Rs. 500.00 Lakhs) are held by the Company, being 50% of paid-up capital of joint venture company.

Till 31st March, 2012, the joint venture company had accumulated losses to the tune of Rs. 752.57 Lakhs and the company had provided a diminution in value of investment to the tune of Rs. 376.29 Lakhs for its share of loss in the financial statements for year ending March 31, 2012. During the current financial year 2012-13, the Joint Venture Company had a net loss of Rs. 118.12 Lakhs and the company has provided a further diminution in value of its investment to the extent of Rs. 59.05 Lakhs for its share of loss in the financial statements for the year ending 31st March, 2013.

b) Jabal Eiliot Co. Ltd.

A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT Infrastructure & Engineering Services Limited, Mumbai was formed during the financial year 2011-12 for execution of contracts in Saudi Arabia in the field of oil & gas, non ferrous metallurgy, infrastructure projects etc.

The joint venture company namely "Jabal Eiliot Co. Ltd." was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. The Joint Venture Company formed for pursuing its business interests has an initial capital of SR. 15000000, out of which one third i.e.5000000 SR. (Equivalent Indian Rs. 599.00 Lakhs) was contributed by the company as its share.

Till 31st December, 2012, the Joint Venture Company had incurred losses to the tune of SR 2124126 of which the, the Company''s share is SR 708042 (equivalent Indian Rs. 84.83 Lakhs). During the current financial year 2012-13, Company has provided its share of loss amounting to Rs. 84.83 Lakhs as diminution in value of its investment in Joint Venture.

Company''s share in Assets and Liabilities and Income and Expenditure related to its interest in TEIL Projects Limited and Jabal Eiliot Co. Ltd based on their audited financial statements for the year ended 31st March, 2013 and 31st December, 2012 respectively are as under: .

1.13 Jointly Controlled Assets

Company has entered into Production Sharing Contracts with Government of India along with other partners for Exploration & Production of Oil and Gas. The Company is a non-operator and is having following participating interest in the ventures. The company would share Expense/Income/Assets/Liabilities of the ventures on the basis of its percentage in the production sharing contracts.The detail of company''s interest in blocks is as under:

Based on available information, revenue expenditure of Rs.30.58 Lakhs (Rs. 6.08 Lakhs) and capital expenditure of Rs. 0.47 Lakhs (Nil), being the company''s share has been accounted for in the financial statements of the year 2012-13.

Company''s estimated share in work programmes committed under production sharing contract in respect of above blocks as on 31st March, 2013 is Rs. 5540.28 Lakhs (Rs.2546.39 Lakhs).

1.14 The disclosures required under Accounting Standard (AS-15)"Employee Benefits"are given below:

Defined Contribution Plan

The amount recognized as an expense in defined contribution plan is as under:

In respect of Provident Fund, the company has a separate irrevocable PF Trust, managing the Provident Fund accumulation of employees.The Guidance on implementing AS15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) of ICAI states that benefits involving employer established provident funds, which require interest shortfalls to be re- compensated by the employer are to be considered as defined benefit plans. In this regard, Actuarial valuation as on 31st March, 2013 was carried out by the Actuary to find out value of Projected Benefit Obligation arising due to interest rate guarantee by the Company towards Provident Fund. In terms of said valuation the Company has no liability towards interest rate guarantee as on 31st March, 2013.

Defined Benefit Plan

Company is having the following Defined Benefit Plans:

- Gratuity (Funded)

- Leave Encashment (Funded)

- Post Retirement Medical Benefits (Funded)

- Long Service Awards (Unfunded)

- Other benefits on Retirement (Unfunded)

1.15 In line with Accounting Standard (AS-17)"Segment Reporting" the Company has (segmented) identified its business activity into two business segment i.e. Consultancy & Engineering Projects and Turnkey Projects, taking into account the organizational structure and internal reporting system as well as different risk and rewards of these segments. Segment results are given below:-

1.16 The Board of Directors at their meeting held on 28th May, 2013 has proposed a final dividend of Rs.3/- per share for financial year 2012-13 (Rs.4/- per share) subject to approval of shareholders in annual general meeting. The above is in addition to an interim dividend of Rs. 3/- per share for financial year 2012-13 (Rs. 2/- per share) declared and already paid.

1.17 The interest expense includes Rs.Nil (Rs.116.00 Lakhs) on account of interest on shortfall in advance tax paid computed as per provisions of Income Tax Act.

1.18 CSR Activity Reserve amounting to Rs. 2211.90 Lakhs under head Reserves & Surplus (Note 2.2) represents unspent amount, out of amounts set aside as 2% of profit earned in the past years for meeting social obligations as per Department of Public Enterprise guidelines for Corporate Social Responsibility. Till last year the unspent amount was being disclosed as provision for CSR under head short term provisions.

1.19 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

1.20 Remuneration to Chairman & Managing Director and full time Directors are as per their appointment letters from the Ministry of Petroleum & Natural Gas, Government of India, New Delhi.They are also allowed to use the staff car for private journeys upto a ceiling of 1000 kms per month.

1.21 Previous year''s figures have been re-casted and/or regrouped wherever necessary to make them comparable with the current year''s figures. Figures shown within brackets in Notes represent previous year''s figures.


Mar 31, 2012

Rights, Preferences and Restrictions Attaching to Equity Shares

The Company is having one Class of Equity Shares having a Par Value of Rs 5 each. Each Shareholder is eligible for one vote per Share held. The Dividend proposed by Board of Directors is subject to the approval of Shareholders in the ensuing Annual General Meeting except in case of Interim Dividend. In the event of Liquidation, Equity Shareholders are eligible to receive the remaining assets of the Company after distribution of all Preferential amount in proportion to their Shareholding.

Other Member Companies are: Bharat Petroleum Corporation Ltd, Hindustan Petroleum Corporation Limited, Indian Oil Corporation Limited, Indian Petrochemical Corporation Limited, Chennai Petroleum Corporation Limited and Oil India Limited

Oil and Natural Gas Corporation of India Limited was member till June, 2001.

Total Capital of Petroleum India International is Rs 5500.00 Lakhs and EIL's share in Capital of AOP is Rs 500.00 Lakhs.

Details of share in accumulated surplus for investment in Petroleum India International, an association of person in which the Company is a member, based on last available annual audited accounts for the financial year 2010-11 and amount received during the current year is as under

* Includes Bank deposits having more than twelve months original maturity of Rs 31694.66 lakhs ( Rs 56488.00 Lakhs)

* Includes Bank deposits Rs 49.56 Lakhs ( Rs 42.11 Lakhs) held as margin Money/Security against Bank Guarantees.

* Includes Rs 133.77 Lakhs ( Rs 124.38 Lakhs ) in currencies which are not repatriable.

1.1 CONTINGENT LIABILITIES AND COMMITMENTS

i) Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

i) Commercial claims pending in the Courts or lying with Arbitrators amounting to Rs 2092.40 Lakhs (Rs 205.18 Lakhs).

ii) Few cases relating to the employees/others are pending in the Court against the Company, in respect of which the liability is not ascertainable.

b) Income Tax/Fringe Benefit Tax assessments have been completed upto the assessment year 2009-10. Income Tax liability, if any, in respect of pending assessments for the assessment years 2010-11 and 2011-12 cannot be ascertained although tax as per return/revised return has been paid in full.

Wealth Tax Assessments have been completed upto the Assessment Year 2009-10. Wealth Tax liability, if any, in respect of pending assessments for the Assessment Years 2010-11 and 2011-12 cannot be ascertained although tax on returned wealth has been paid in full.

The Company has filed an application for rectification (u/s 154) of short credit given for Tax Deducted at Source (TDS) and other processing mistakes amounting to Rs 664.36 lakhs for Assessment year 2010-11.

Income Tax Department is in appeal for an amount of Rs 632.54 lakhs with Income Tax Appellate Tribunal against the Commissioner of Income Tax (Appeals) Orders in Company's favour u/s 250 for the Assessment Years 2002-03, 2004-05 and 2008-09.

The Company has filed an appeal with Commissioner of Income Tax (Appeal) for an amount of Rs 11.61 Lakhs against the order of Assessing Officer u/s 143(3) for the Assessment Year 2009-10.

The Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of Rs 2.55 Lakhs (Rs 2.55 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

Company has filed an appeal against demand of service tax (inclusive of penalty of Rs 31.44 Lakhs) for Rs 62.87 lakhs (Rs 62.87 lakhs) and interest thereon by Commissioner of Central Excise (Appeals) for the period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

Sales Tax Department is in appeal against the order of Joint Commissioner (Appeals) in Company's favour for an amount of Rs 132.53 Lakhs for assessment year 1999-2000 and Rs 116.12 Lakhs for assessment year 2000-01 respectively before Sales Tax Tribunal, Agra.

The Company is in appeal before Sales Tax Tribunal, Agra against the demand of Sales Tax Department for Rs 20.05 Lakhs on account of entry tax for the year 1999-2000 against which company has deposited an amount of Rs 5.01 Lakhs.

The Company is in appeal before the Appellate Dy. Commissioner, Visakhapatnam against the demand of Assistant Commissioner, Kakinada amounting to Rs 28.62 Lakhs on account of VAT for the period March, 11 to June, 11 against which company has deposited an amount of Rs 3.58 Lakhs. After the close of financial year, the Appellate Dy. Commissioner, Visakhapatnam has allowed the appeal in the Company's favour.

In respect of above contingent liabilities, it is not probable to estimate the timing of cash flow, if any, pending the resolution of Arbitration/Appellate/Court/ assessment proceedings.

ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs 6318.34 Lakhs (Rs 3883.26 Lakhs).

b) Uncalled liability on partly paid equity shares of TEIL Projects Ltd., a joint venture company - Rs Nil (Rs 200.00 Lakhs)

1.2 a) Guarantees issued by the banks and outstanding as on 31st March, 2012 Rs 30883.13 Lakhs (Rs 33166.77 Lakhs), against

which a provision of Rs 14059.91 Lakhs (Rs 12157.65 Lakhs ) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31st March, 2012 Rs 25403.92 Lakhs (Rs 23031.68 Lakhs).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31st March, 2012 Rs 19132.50 Lakhs (Rs 7216.00 Lakhs)

1.3 The profit & loss account includes Research & Development expenditure of Rs 1546.30 Lakhs (Rs 1540.92 Lakhs).

1.4 Land & Buildings include Rs 0.07 Lakhs (Rs 0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

Twintowers Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs 50/- each fully paid.

Gardenview Premises Cooperative Society Ltd., Mumbai 10 ordinary shares of Rs 50/- each fully paid.

Heera Panna Towers Cooperative Housing Society Ltd., Vadodara 10 ordinary shares of Rs 50/- each fully paid.

Suflam Cooperative Housing Society Ltd., Ahmedabad 8 ordinary shares of Rs 250/- each fully paid.

Darshan Co-operative Society Ltd., Vadodara 80 ordinary shares of Rs 50/- each fully paid

1.5 As per guidelines on Corporate Social Responsibility for Central Public Sector Enterprises issued by Department of Public Enterprises vide its office memorandum dated 9th April, 2010, the CSR budget by Central Public Sector Enterprises should be fixed for each financial year based on Net Profit for previous financial year, and shall not lapse.

The Company is fixing the CSR budget each year from Financial Year 2009-10 onwards based on its profit in previous financial year. Till financial year 2010-11, the company has accounted for CSR expenditure in books of accounts on the basis of its actual incurrence. To comply the CSR guidelines which require mandatorily to fix CSR budget each year based on profits for previous financial year, provision amounting to Rs 1536.25 Lakhs created till the year 2011-12 which consist provision for earlier years of Rs 656.19 Lakhs and Rs 880.06 Lakhs for the year 2011-12.

1.6 The Working Capital facilities from Banks are secured by hypothecation of stocks, book debts and other current assets of the Company, both present and future.

1.7 In terms of provision of Accounting Standard (AS -7) "Construction Contracts', the information in respect of Lumpsum services/ Turnkey Projects for contract in progress as on 31.03.2012:

a. The aggregate amount of Cost incurred and recognized Profit up to 31.03.2012 Rs 803713.62 lakhs (Rs 599116.47 Lakhs).

b. The amount of advances received Rs 1739.90 lakhs (Rs 1587.06 Lakhs).

c. The amount of retention - Rs 1102.77 Lakhs (Rs 893.48 Lakhs)

1.8 In terms of Accounting Standard 27, "Financial Reporting of Interest in Joint Ventures of the Company', a brief description of joint ventures of the Company is:

a) TEIL Projects Limited

A joint venture with Tata Projects Limited was formed in the Financial Year 2008-09 for pursuing projects on engineering procurement and construction basis (EPC Projects) in selected sectors such as oil & gas, fertilizers, steel, railways, power and infrastructure.

The Joint Venture Company formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs 1500 Lakhs & Issued, Subscribed & Paid-up capital of Rs 1000 lakhs.

Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs 10/- each fully paid-up (24,997 equity shares of Rs 10/- each fully paid-up and 49,75,000 equity shares of Rs 10/- each, Rs 5.979899 per share called and paid up) amounting to Rs 500.00 lakhs (Rs 300.00 Lakhs) are held by the Company, being 50% of paid-up capital of joint venture company.

Till 31st March, 2011, the joint venture company had accumulated losses to the tune of Rs 539.05 Lakhs and the company had provided a diminution in value of investment to the tune of Rs 269.53 Lakhs for its share of loss in the financial statements for year ending March 31, 2011. During the current financial year 2011-12, the Joint Venture Company had a net loss of Rs 213.52 Lakhs and the company has provided a further diminution in value of its investment to the extent of Rs 106.76 Lakhs for its share of loss in the financial statements for the year ending 31st March, 2012.

b) Tecnimont EIL Emirates Consultores E Servicos LDA

A joint venture with Tecnimont SPA, Italy was formed for pursuing EPC Projects in UAE and registered with the Commercial Registry of Maderia Trade Zone, Portugal during the Financial Year 2008-09.

The company had invested Euro 151620 (Euro 151620) (equivalent to Indian Rs 100.62 lakhs) being 30% quota amounting to 150000 Euro, out of total quota of 500000 Euro. The 70% quota amounting to 350000 Euro (Euro 350000) was invested by other joint venture partner Tecnimont, SPA, Italy.

The joint venture was formally liquidated & registration cancelled on 4th April, 2011 and proceeds amounting to Rs 74.10 Lakhs net of expenses were received during the current financial year.

c) labal EILIOT Co. Ltd.

A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT Infrastructure & Engineering Services Limited, Mumbai was formed during the current financial year for execution of contracts in Saudi Arabia in the field of oil & gas, non ferrous metallurgy, infrastructure projects etc.

The joint venture company namely "Jabal EILIOT Co. Ltd." was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. The Joint Venture Company formed for pursuing its business interests has an initial capital of SR. 15000000, out of which one third i.e. 5000000 SR. (Equivalent Indian Rs 599.00 Lakhs) was contributed by the company as its share.

The Company's share in Assets and Liabilities and Income and Expenditure related to its interest in TEIL Projects Limited and Jabal Eiliot Co. Ltd based on their audited financial statements for the year ended 31st March, 2012 and 31st December, 2011 respectively was as under: .

In respect of Provident Fund the company has a separate irrevocable PF Trust managing the Provident Fund accumulation of employees. The Guidance on implementing AS15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) of ICAI states that benefits involving employer established provident funds, which require interest shortfalls to be re-compensated by the employer are to be considered as defined benefit plans. In this regard, Actuarial valuation as on 31st March, 2012 was carried out by the Actuary to find out value of Projected Benefit Obligation arising due to Interest Rate Guarantee by the company towards Provident Fund. In terms of said valuation the Company has no liability towards interest rate guarantee as on 31st March, 2012.

Defined Benefit Plan

The company is having the following Defined Benefit Plans:

- Gratuity (Funded)

- Leave Encashment (Funded)

- Post Retirement Medical Benefits (Funded)

- Long Service Awards (Unfunded)

- Other benefits on Retirement (Unfunded)

1.9 In line with Accounting Standard (AS-17) "Segment Reporting', the Company has (segmented) identified its business activity into two business segment i.e. Consultancy & Engineering Projects and Turnkey Projects, taking into account the organizational structure and internal reporting system as well as different risk and rewards of these segment. Segment results are given below:-

1.10 The Board of Directors at their meeting held on 28th May, 2012 has proposed a final dividend of Rs 4 per share for financial year 2011-12 (Rs 4/- per share) subject to approval of shareholders in annual general meeting. The above is in addition to an interim dividend of Rs 2/- per share for financial year 2011-12 (Rs 1/- per share) declared and already paid.

1.11 The interest expense includes Rs 116.00 Lakhs (Rs 146.00 Lakhs) on account of interest on shortfall in advance tax paid computed as per provisions of Income Tax Act.

ii) Nature of provisions:

a) Contractual obligations represent provision for estimated liabilities on account of guarantees and warranties etc. in respect of consultancy & engineering services and turnkey contracts executed by the Company. The said obligation covers performance as well as defect liability period defined in the respective contracts.

For turnkey contracts, the estimated liability on account of contractual obligations is provided at 1% of revenue recognized based on risk assessment made by the management. For consultancy & engineering services contracts the estimated liability on account of contractual obligations is provided as per assessment of probable liability made by the management based on liability clauses in respective contracts.

b) Corporate Social Responsibility represent provision for estimated liability on account of amount set aside as a percent of profit earned in the past year for meeting social obligations as per Department of Public Enterprise guidelines for Corporate Social Responsibility. The timing of outflows depends on the progress of various CSR projects awarded by the Company.

iii) The disclosures in respect of contingent liabilities are given as per Note No. 2.17.

1.12 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

1.13 Remuneration to Chairman & Managing Director and full time Directors are as per their appointment letters from the Ministry of Petroleum & Natural Gas, Government of India, New Delhi. They are also allowed to use the staff car for private journeys upto a ceiling of1000 kms per month.

1.14 Pursuant to notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year's figures are reclassified to make it comparable with the current year's classification. Further, Previous year's figures have been re-casted and/or regrouped wherever necessary to make them comparable with the current year's figures. Figures shown within brackets in Notes represent previous year's figures.