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Notes to Accounts of Engineers India Ltd.

Mar 31, 2022

Nature and purpose of other reserves General Reserve

General Reserve is created out of the accumulated profits of the Company as per the provisions of Companies Act.

Capital Redemption Reserve

The Company has Created Capital Redemption Reserve out of free reserves, a sum equal to the nominal value of the shares purchased transferred to the capital redemption reserve account.

Retained Earnings

All the profits made by the Company are transferred to retained earnings from statement of profit and loss.

CSR Activity Reserve

The Company is required to create the CSR Activity Reserve for the allocation of expenses in respect of CSR activities. CSR Activity Reserve 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 the Companies Act, 2013 and rules made thereunder.

Corpus for Medical Benefits for Employees retired prior to 01.01.2007

The Company has created separate corpus of medical benefits to retired employees who have retired prior to 01.01.2007 in terms of DPE guidelines.

Other Comprehensive Income (OCI)

Other comprehensive income represents balance arising on account of translation of foreign operation, gain/(loss) booked on re measurement of defined benefit plans and gains/(loss) from investments in equity instruments designated at fair value.

Earnings Per Share (EPS)

Earnings per Share ("EPS") is determined based on the net profit attributable to the shareholders'' of the Company. Basic earnings per share is computed using the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the year including share options, except where the result would be anti-dilutive.

During the financial year 2020-21, pursuant to Public Announcement dated December 21, 2020, published on December 22, 2020 and letter of offer dated January 13, 2021, the company has bought back its 6,98,69,047 number of Equity shares of Face value of '' 5 each fully paid up, at a buyback price of '' 84/- per share on a proportionate basis from the equity shareholders of the company, through tender offer route under Stock Exchange Mechanism and these shares extinguished on February 19, 2021. Post buyback the company''s equity share capital as on 31 March 2021 is '' 28,102.13 lakhs comprising of fully paid up 56,20,42,373 equity share having face value of ''5/- each .

Note : 34

(i) Fair value hierarchy

Financial assets and financial liabilities are measured at fair value in the financial statement and are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: unobservable inputs for the asset or liability.

(iii) Valuation technique used to determine fair value

Specific valuation techniques used to value Liquid plan of mutual funds include - the use of net asset value for mutual funds on the basis of the statement received from investee party.

Specific valuation techniques used to value Unquoted equity shares (Fair Value) through OCI include - income approach (DCF) and comparable companies approach

(ii) Risk management

The Company''s activities expose it to market risk, liquidity risk and credit risk. The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

(A) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company''s exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk on financial reporting date

B: Moderate credit risk

C: High credit risk

In respect of trade receivables, the company recognises a provision for lifetime expected credit loss.

Based on business environment in which the Company operates, a default on a financial asset is considered when the counter party fails to make payments within the agreed time period as per contract. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

(B) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts of the Company''s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

(C) Market Risk

(i) Foreign Exchange Risk

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company''s functional currency. The Company does not hedge its foreign exchange receivables/payables.

(D) Other risk - Impact of COVID-19

Financial assets carried at fair value as at 31 March 2022 is '' 8,516.40 Lakhs. These financial assets are classified as Level 1 having fair value of '' 8,516.40 Lakhs as at 31 March 2022. The fair value of these assets is marked to an active market which factors the uncertanities arising out of COVID-19.

Financial assets carried at amortised cost of '' 2,13,785.77 Lakhs, consisting of '' 1,32,023.17 Lakhs is in the form of cash and cash equivalents, bank deposits and other bank balances with Banks, where the Company does not expect increased credit risk and consequential default. Further, Trade receivables and other financial assets of '' 81,762.60 Lakhs as at March 31, 2022, part of the financial assets carried at amortised cost, is valued considering provision for allowance using expected credit loss method. The allowance for expected credit losses for trade receivables and other financial assets of '' 12,617.31 Lakhs as at 31 March 2022 is considered adequate as on date.

Note : 36

Capital management

The Company''s objectives when managing capital are:

â¢ To ensure Company''s ability to continue as a going concern, and

â¢ To provide adequate return to shareholders

The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.

A. Leases

Company as a Lessee

The Company''s lease assets primarily consist of leases of lands, cars and office/residential premises. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases.

The Company does not face a significantly liquidity risk with regard to its lease liabilities as the current assets (including cash and bank balances) are sufficient to meet the obligations related to lease liabilities as and when they fall due.

During the year Company recognise as operating expenses of '' 573.07 Lakhs (previous year: '' 716.25 Lakhs) towards short term leases for certain office/residential premises and cars.

Company as a lessor

The Company has given certain office/residential premises on operating lease. During the year an amount of '' 1,917.55 Lakhs (including reimbursement of operating expenditure of ''400.68 Lakhs) (previous year: '' 2,119.31 Lakhs (including reimbursement of operating expenditure of '' 416.86 Lakhs)) has been accounted for as rental income in respect of these operating leases.

A. 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 '' 23,927.03 Lakhs (previous year 31March 2021: '' 20,834.87 Lakhs).

During the year an amount of '' 8.27 Lakhs (previous year: '' 10.47 Lakhs) reduced from vendors invoices for ''delayed supply'' on account of PRS in terms of provision of contract, for which credit note is yet to be received.

b) The Company has filed a writ petition before Hon''ble Andhra Pradesh High Court against the VAT Assessment Order of Assistant Commissioner (CT) dated 26 June 2018 levying tax of '' 273.93 Lakhs (including interest) (previous year 31 March 2021: ''255.91 Lakhs (including interest)) for the period April 2014 to June 2017.

The Company has filed a writ petition before Hon''ble Andhra Pradesh High Court against the Penalty Notice of Assistant Commissioner (CT) dated 14 May 2019 levying penalty of '' 150.14 Lakhs (previous year 31 March 2021: '' 150.14 Lakhs) for the period April 2014 to June 2017.

The Company has filed a writ petition before Hon''ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 29 July 2016 levying tax of '' 4,302.29 Lakhs (including interest) (previous year 31 March 2021: ''4,064.57 Lakhs (including interest)) for the financial year 2009-10.

The Company has filed writ petition before Hon''ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 14 March 2017 levying tax of '' 34,512.56 Lakhs (including interest) (previous year 31 March 2021: '' 32,532.56 Lakhs (including interest)) for the financial year 2010-11.

The Company has filed writ petition before Hon''ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 25 March 2019 levying tax of '' 739.08 Lakhs (including interest) (previous year 31 March 2021: '' 687.68 Lakhs (including interest)) for the financial year 2013-14.

The Company has filed writ petition before Hon''ble Karnataka High Court against the Proposition Notice issued by Assistant Commissioner of Commercial Taxes dated 21 February 2019 for the financial year 2014-15. The Hon''ble Karnataka High Court vide order dated 25 April 2019 issued directions to commercial tax department not to enforce demand order without leave of the court. However the company received demand order dated 30 March 2019 levying tax of '' 923.43 Lakhs (including interest) (previous year 31 March 2021: '' 855.20 Lakhs (including interest)) on 2 May 2019.

The Company has filed writ petition before Hon''ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 30 September 2020 levying tax of '' 664.32 Lakhs (including interest) (previous year 31 March 2021: '' 611.09 Lakhs (including interest)) for the financial year 2015-16.

The Company has filed writ petition before Hon''ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 27 April 2021 levying tax of '' 54.97 Lakhs (including interest) (previous year 31 March 2021: Nil) for the financial year 2016-17.

The Company has filed appeal before Commissioner Appeals-II against the Service Tax demand order of Assistant Commissioner of CGST dated 24 February 2022 levying tax of '' 3.52 Lakhs (including interest) (previous year 31 March 2021: Nil) for the financial year 2016-17 and '' 3.75 Lakhs (including interest) (previous year 31 March 2021: Nil) for the period April 2017 to June 2017.

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.

B. Commitments:

a) Property, plant and equipment - estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for amount to '' 4,343.66 Lakhs (inclusive of taxes wherever applicable) (previous year 31 March 2021: '' 3,249.04 Lakhs (inclusive of taxes wherever applicable)).

b) Owned Investment property - estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for amount to Nil (previous year 31 March 2021: Nil).

c) The Company''s estimated share in work programmes committed under production sharing contract and Field development plan in respect of oil & gas exploration blocks as on 31 March 2022 is '' 3,963.49 Lakhs (previous year 31 March 2021: '' 4,096.66 Lakhs).

Note : 41

a) Guarantees issued by the banks and outstanding as on 31 March, 2022: '' 60,770.48 Lakhs (previous year 31 March 2021 : '' 71,753.66 Lakhs), against which a provision of '' 46,658.52 Lakhs (previous year 31 March 2021 : '' 40,149.82 Lakhs) has been made in the books towards liability for performance guarantees/warranties.

b) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31 March, 2022 : '' 6,263.25 Lakhs (previous year 31 March 2021: '' 15,773.52 Lakhs). It includes Corporate Guarantee amounting to '' 2,461.35 Lakhs (previous year 31 March 2021: Nil) which is under the process of renewal.

Land and Buildings

i) Land and Buildings includes '' 0.07 Lakhs (previous years: 31 March 2021: '' 0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

Twintowers Premises Cooperative Society Limited, Mumbai 10 ordinary shares of '' 50 each fully paid.

Gardenview Premises Cooperative Society Limited, Mumbai 10 ordinary shares of '' 50 each fully paid.

Heera Panna Towers Cooperative Housing Society Limited, Vadodara 10 ordinary shares of '' 50 each fully paid.

Suflam Cooperative Housing Society Limited, Ahmedabad 8 ordinary shares of '' 250 each fully paid

Darshan Co-operative Society Limited, Vadodara 80 ordinary shares of '' 50 each fully paid

Further, one of the properties consisting of plot measuring 6,826.95 square meters with three Buildings, comprising of 84 flats at Gokuldham, Goregaon (East), Mumbai. 4,297.34 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 related proceedings under MLRC are in progress. The said property is partially presented as property, plant and equipment and partially as investment property.

The company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue.

A receivable is a right to consideration that is unconditional upon passage of time. Trade receivable and unbilled revenue are presented net of impairment in the Balance Sheet.

Revenues in excess of Invoicing is recorded as unbilled revenue (contract assets) and is classified as a financial asset. Revenue recognition for Lump sum services and Turnkey contracts is based on percentage of completion method based on cost progress. Invoicing to the clients is based on milestones as defined in the contract. Revenue from Cost plus and rate plus jobs are recognized when the related services are performed and revenue from the end of the last invoicing to the reporting date is recognized as unbilled revenue.

Invoicing in excess of earnings are classified as Income received in advance (contract liabilities) and is classified as other current liabilities.

During the year ended 31 March 2022 and 31 March 2021, '' 19,348.88 Lakhs and '' 15,765.06 Lakhs of Contract assets (unbilled revenue) as of 1 April 2021 and 1 April 2020 respectively has been reclassified to Trade receivables upon billing to customers.

During the year ended 31 March 2022 and 31 March 2021, the company recognized revenue of '' 60,393.94 Lakhs and '' 92,008.39 Lakhs arising from opening Contract liabilities (Income Received in Advance) as of 1 April 2021 and 1 April 2020 respectively.

During the year ended March 31, 2022, the company recognized revenue of Nil (previous year : Nil) from obligations satisfied in previous periods.

Remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Performance obligation estimates are subject to change and are affected by several factors, including termination, changes in the scope of work, adjustment for revenue that has not materialized, and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2022 is ''7,65,496.53 Lakhs. Out of this, the Company expects to recognize revenue of around 48% within the next one year and the remaining thereafter. The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2021 was '' 7,98,194.05 Lakhs.

Types of warranties and related obligations

The company is executing consultancy and engineering services and turnkey contracts. The company is providing provision for estimated liabilities on account of guarantees and warranties etc. in respect of consultancy and 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 and 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.

Impact of COVID-19

The Company evaluated the impact of COVID-19 on recognition of revenue. Since the company follows percentage completion method for accounting of revenue, the impact on account of expected delay has already been considered in the recognition of revenue. Moving forward, management expects no significant impact on the continuity of operations of the business on long term basis.

Note : 47

Brief description of the Company''s joint ventures/Associates

a) TEIL Projects Limited (''TEIL'')

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 and gas, fertilizers, steel, railways, power and infrastructure.

TEIL has been formed in this regard having its Registered Office at New Delhi has an Authorized capital of '' 1,500 Lakhs (Previous year 31 March 2021: '' 1,500 lakhs) and Issued, Subscribed and Paid-up capital of '' 1,100 lakhs (Previous year 31 March 2021: '' 1,100 lakhs).

Of the issued, subscribed and paid-up capital, 5,500,000 shares of '' 10 each fully paid-up amounting '' 550.00 lakhs (previous year: 31 March 2021 '' 550.00 lakhs) are held by the Company, being 50% of paid-up capital of TEIL.

In the financial year 2015-16, it was decided to wind up TEIL and in this regard liquidator has already been appointed on 29 July 2016 and liquidation proceedings are in progress as per provisions of Companies Act.

Till 31 March 2021, the Company''s share of negative ''other equity'' of '' 541.61 Lakhs has been accounted for as impairment in value of investment.

During the current financial year 2021-22, TEIL had a net loss of Nil.

During the year 2020-21, '' 8.39 lakhs towards final distribution of remaining funds of TEIL on account of return of Share capital of company has been received by the company.

b) Ramagundam Fertilizers and Chemicals Limited (''RFCL'')

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 '' 200,000 Lakhs (previous year: 31 March 2021: '' 200,000 Lakhs) consisting 20,000 Lakhs (previous year: 31 March 2021: 20,000 Lakhs) equity shares of face value of '' 10 each.

The Shareholding of the RFCL, on the finalisation of project cost and requirement of equity for funding the project cost shall be in the following proportion:

Engineers India Limited (EIL): 26%

National Fertilizers Limited (NFL): 26%

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

State Government of Telangana: 11%

GAIL (India) Limited: 14.30%

HT Ramagundam A/s: 3.90%

Danish Agribusiness Fund IK/S: 3.90%

Investment Fund For Developing Countries: 3.90%

RFCL has entered into concession agreement with FCIL on 23 March 2016 towards award of rights and concession to the RFCL in regard to facility area (Lease hold land admeasuring approximately 1284 acre) for financing, designing, engineering, procurement, construction, development, operation and maintenance of the project.

In terms of Shareholders agreement (SHA), FCIL is to be issued equity shares equal to 11% of equity portion of the capital expenditure of the project. During the Financial year 2020-21 project cost estimate was revised to '' 6,33,816.00 Lakhs to be funded through equity of '' 1,89,025.00 Lakhs and accordingly total equity issuance to FCIL based on revised project cost is '' 20,793 Lakhs.

c) LLC Bharat Energy Office (''BEO'') -Associate Company

During the financial year 2021-22, the Company along with ONGC Videsh Singapore Pte. Ltd., GAIL (India) Limited, IOCL Singapore Pte. Ltd. and Oil India International Pte. Ltd. having participating interest of 20% each has incorporated a Limited Liability Company namely LLC Bharat Energy Office in Russia to facilitate liaising with the Russian petroleum industry and to monitor the existing investments.

During the financial year 2021-22, company has contributed its 20% contribution amounting to '' 75.97 Lakhs.

For financial year ended 31 March 2022, the Company had incurred losses to the tune of RU 28,17,000 of which the, the Company''s share is R 5,63,400 (equivalent Indian '' 5.58 Lakhs).

* The employee benefit of PF is administered through a separate EIL Employees Provident Fund Trust. Out of the investments made by PF Trust in the past, some issuers of securities have defaulted in interest payments and / or principal repayments. Company, as principal employer under the Provident fund regulations has to make good the loss in value of these investments. The cumulative interest and principal default upto 31 March 2022 has been of '' 8,654.10 Lakhs. The above includes '' 2,248.62 Lakhs (previous year ended 31 March 2021: '' 1,725.17 Lakhs) towards provident fund expenditure for impairment on account of Provident Fund Trust investment.

In respect of Provident Fund, the Company has a separate irrevocable PF Trust, managing the Provident Fund accumulation of employees. In this regard, Actuarial valuation as on 31 March, 2022 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 31 March 2022 and 31 March 2021.

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

There is no change in the method of the valuation for the prior period. For change in assumption please refer to table (f) above, where assumptions for prior period are given.

There is no change in the method of the valuation for the prior period. For change in assumption please refer to table (e) above, where assumptions for prior period, if applicable, are given.

* The original participating interest in production sharing contract of company in both blocks is 20% each. In Block No. CB-ONN-2010/08 and CB-ONN-2010/11 one of the consortium members has defaulted in its obligation towards cash calls. The Company along with other partners has acquired the share of defaulted partner in proportion to their original participating interest and the share of company is 22.22% and 23.53% in the blocks CB-ONN-2010/08 and CB-ONN-2010/11 respectively.

Segment revenue with major customers

During the year 31 March 2022, '' 73,741.02 Lakhs (previous year 31 March 2021: '' 57,316.46 Lakhs) of the Company''s revenues, each individually exceeding 10% in the consultancy and engineering projects segment was generated from four (previous year 31 March 2021: two) customers.

During the year 31 March 2022, '' 1,24,854.73 Lakhs (previous year 31 March 2021: '' 1,51,181.41 Lakhs) of the Company''s revenues, each individually exceeding 10% in the turnkey projects segment was generated from two (previous year 31 March 2021: two) customers.

Note - 51

The company in the month of April 2016 terminated a contract, consequent to receipt of findings of investigating agency that certificate submitted by the contractor for qualifying the contract was bogus. The facts in this regard including lodging of claim, subsequent to termination of contract had been disclosed in the annual account from financial year 2015-16.

Subsequent to the termination of contract, the company is completing the project at the risk and cost of contractor in terms of provisions of the contract. Contractor has gone into arbitration and had submitted arbitration notice and as such Arbitral Tribunal had been constituted. Contractor had filed its statement of claim amounting to '' 40,960.75 Lakhs. EIL had also filed its reply along with its counter claim for '' 12,907.15 Lakhs and application to implead the parent company of contractor, decision on which was pending with the Arbitral Tribunal. Meanwhile, a third party creditor of the contractor has filed an application with NCLT under Insolvency and Bankruptcy Code (IBC) and Insolvency Resolution Professional (IRP) has been appointed and arbitration proceedings have been stayed sine die. EIL has filed its claim against the contractor with the IRP. Hon''ble Supreme Court, on the application of contractor, has stayed the Resolution proceedings. The company has approached Arbitral Tribunal and NCLT for revival of its counter claims wherein company has been directed to approach the appropriate forum and accordingly company has filed an impleadment application before the Hon''ble Supreme Court. The management does not consider any possible obligation on this account requiring future probable outflow of resources of the company.

Note - 52

During the year 2001, one of Clients had invited bids for carrying out certain works at its Bombay High Off-shore Exploration Site. The entire work consisted of a number of activities, including survey, design, engineering, procurement, fabrication, transportation and commissioning of two well head platforms with associated equipment.

For submission of the said bid, the company had entered into Business Cooperation Agreement (BCA) with sub-contractor & Vendor (which are "Group Companies") and accordingly these Group Companies, in accordance with their respective scope of works, valued and classified the platforms and submitted the same to company for inclusion in its price bid to Client. The process of classification and valuation of platforms and calculation of corresponding customs duty were done by Group Companies as per their scope of work. Customs Duty element as submitted by the Group Companies, had simply been incorporated by the company in its price bid to Client.

During FY 2002-03, the Contract was awarded to the Company by the Client. Out of the entire scope of work under the above Project, the Company issued a Purchase Order for supply of the Platforms along with jackets, piles and other material , and sub-contracted transportation and installation works, on back to back basis, to vendor and sub-contractor respectively (above mentioned Group Companies) which constituted approximately 95% of the entire scope of work.The custom duty amount was included in the Sub-contract as also in the main contract with client as worked out by Group Companies themselves.

Group Companies represented to the company and persuaded that it was not possible for them to become the consignee for the subject materials and to avoid any delay in the execution of the project it would be prudent and expedient to mention the name of the company as the consignee for the subject material (Though as per the express contractual stipulation it was Group Companies who had to assume the role & responsibility of the consignee of the goods). Further they represented that they do not have IEC Code and hence, they could not have imported the goods and there would not be sufficient time for them to get such a code to enable imports. Believing the aforesaid advice to be bonafide and true and that company being the importer would aid speedy and prompt clearance of the Goods, Company agreed to become the Consignee.

A Show Cause Notice was issued by Custom authorities to the Group Companies and the Company on account of misclassification and undervaluation of equipment''s at the time of import for the above said Project of Oil Well Platform. On account of non-cooperation by the Group Companies, (who had actually carried out the classification and valuation), in replying to the Show Cause Notice, the Company was constrained to approach the Custom and Central Excise Settlement Commission in the FY 2006-07. During the Settlement Commission proceedings, which was also participated in by the Group Companies, on account of noncooperation of the latter, Company was constrained to admit the liabilities to the tune of '' 2,309.80 Lakhs. During the FY 2007-08, Custom and Central Excise Settlement Commission passed Final Order determining the total Differential Custom Duty liability at '' 4,277.21 Lakhs with Interest@ 10% per annum thereon and Penalty of '' 10 Lakhs. The total amount of '' 6,224.20 Lakhs ('' 4,277.21 Lakhs towards differential custom duty and '' 1,946.99 Lakhs towards Interest & Penalty) was deposited during the FY 2007-08 and accounted for during the FY 2006-07 & FY 2007-08.

In terms of agreements entered into by the Company with the Group Companies, Custom Duty was to be borne by the Group Companies and they were required to indemnify the Company for any liabilities in this respect and accordingly the Company invoked the indemnity clause

and paid the Differential Custom Duty from the retention monies of the Group Companies along with some additional amount from its own account. The Group Companies raised disputes on their obligations on this account and invoked arbitration clause under the sub-contract and Purchase Order. The Company has also lodged its Counter-Claim on the Group Companies for recovery of differential Custom Duty Liability as detailed above.

During the FY 2011-12, the Arbitral Tribunal awarded an amount of $1,26,47,033 plus applicable interest in favour of the Group Companies. The Company, aggrieved by the arbitral award and considering the legal opinion obtained in this respect, filed a challenge petition before the Hon''ble High Court of Delhi against the said arbitral award in its entirety.

In the financial year 2021-22, in the appeal filed by the Company, Hon''ble High Court of Delhi gave interim order directing the Company as follows:-

1. The Court gave interim direction to the Company to deposit the Awarded Amount with the Registrar General of the Court. Subject to the

said deposit being made by the Company, the enforcement of the award shall be stayed.

2. The Court further directed that if the award amount is deposited, the same shall be released to Group Companies against an unconditional Bank Guarantee equivalent to 105% of the amount, to the satisfaction of the Registrar General of the Court.

3. In the event the Company prevails in its challenge against the Arbitral Award which is currently sub-judice and being heard by the Court, any amount collected by the Group Companies from Registrar General of the Court shall be refunded to the Company along with interest at the rate of 10% per annum.

The interim order was challenged before Supreme Court by the Company, however the Supreme Court has not intervened. Therefore In compliance to the directive of Hon''ble High Court of Delhi, an amount of '' 16,476.20 Lakhs (awarded amount of $1,26,47,033 plus applicable interest) was deposited by the Company with the Registrar General of Hon''ble High Court of Delhi on 18th May 2022. However the main challenge petition filed by the Company against the arbitral award is subjudice and being heard by Hon''ble Court.

Pending final disposal of the challenge petition by the Hon''ble Court, considering the provisions of Ind AS 37 ''Provisions, Contingent Liabilities and Contingent Assets'' and Significant Accounting Policies of the Company, Arbitral Award Amount in excess of amount recognized in the book of accounts has been disclosed as contingent liability (Note No. 40) amounting to '' 6,653.59 lakhs ('' 6,081.53 lakhs FY 2020-21).

Nature of provision:

A) Contractual Obligations :

Contractual obligations represent provision for estimated liabilities on account of guarantees and warranties etc. in respect of consultancy and 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.

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 and accordingly no further impact is required due to COVID-19.

C) Impairment in PF Trust Investment :

The employee benefit of PF is administered through a separate EIL Employees Provident Fund Trust. Out of the investments made by PF Trust in the past, some issuers of securities have defaulted in interest payments and / or principal repayments. The amortised value of probable future principal defaults is '' 15,557.83 lakhs as at 31 March 2022 (previous years: 31 March 2021: '' 19,370.59 lakhs). Considering the Employers obligation to make good the loss in value of these investments under the Provident Fund regulations, the Company has kept in its books of account 80% of the amortised value (of probable future principal defaults) amounting to '' 12,446.27 lakhs (previous years: 31 March 2021: '' 15,496.48 lakhs). In financial year 2020-21, '' 15,496.48 lakhs has been disclosed as Exceptional item in the Statement of Profit & Loss of the Company.

D) The disclosure in respect of contingent liabilities is given as per note no. 40.

Note - 54

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

a) Loans given- Nil

b) Investments done are given in Note. No. 7.

Note - 56

In terms of DPE Guidelines, on increase of Dearness allowance to the tune of 50%, the gratuity ceiling shall enhance by 25%. Superannuation benefits which includes Gratuity, Post-Superannuation Medical Scheme, Provident Fund and Defined Contribution Superannuation Scheme are to be met from 30% of Basis pay plus Dearness allowance. The company has recognised the proportionate increase in gratuity ceiling corresponding to Dearness allowance as on 31 March 2022 based on actuarial valuation. To the extent of the impact of such an increase of '' 856.24 Lakhs (previous year 31 March 2021: '' 120.78 Lakhs), the corresponding Defined Contribution Superannuation Scheme to the employees has been reduced to met the Superannuation benefits within 30% of Basis Pay plus Dearness allowance as per DPE Guidelines.

Note - 57

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

Note - 58

The statement of profit and loss account includes research and development revenue expenditure of '' 2,093.56 Lakhs (previous year 31 March 2021: '' 2,636.15 Lakhs). The capital expenditure of research and development assets is ''511.65 Lakhs.

Note - 59

Capital Grant in respect of Research projects:

The Company has received capital grant from agency in respect of procurement/setting up of Capital assets for research project undertaken. The unamortized capital grant amount as on 31 March 2022 is of '' 34.11 Lakhs (previous year 31 March 2021: '' 45.79 Lakhs). During the year, the Company has recognised '' 11.68 Lakhs (previous year: '' 10.55 Lakhs) in the statement of profit and loss as amortisation of capital grants.

Note - 60

There is no impairment of cash generating assets during the year in terms of Indian Accounting Standard (Ind AS-36) "Impairment of Assets" including due to COVID-19.

Note - 61

a) The company has not traded or invested in Crypto Currency or Virtual Currency during the financial year 2021-22.

b) The company has not been declared wilful defaulter by any bank or financial institution.

c) 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. The company is availing non fund based facilities from the banks and furnishing statement of security as and when required by the bankers, more particularly at the time of renewal exercise i.e. on yearly basis. Statement of security filed by the company with banks is in agreement with the books of account.

d) There are no pending charges which is yet to be registered with Registrar of Companies (ROC) as on 31 March 2022 with respect to the Non fund based facilities availed by company.

Note - 62

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.

Note - 63

The balances of trade receivables, loans and advances, customer''s advances, retention money, security deposits receivable/payable and trade payables are subject to confirmation and reconciliation.

Note - 64

During the current year, the Company proposed to sale its old residential flats (''Assets'') which is under the process of disposal. These has been classified as Assets held for sale. The Company expects that the fair value less costs to sell is higher than the carrying amount.

(1) Net Profit after taxes Non-cash operating expenses (Depreciation) Interest other adjustments like loss on sale of Fixed assets etc.

(2) Tangible Net worth Lease liabilities deferred tax liabilities liabilities

* Increase in profit has resulted in increase in ratio.

# Decline in Revenue has impacted the ratio.

Note - 68

Previous year''s figures have been regrouped/reclassified wherever necessary to make them comparable to the figures of the current year.

Mar 31, 2018

1. NATURE OF PRINCIPAL ACTIVITIES

Engineers India Limited and (referred to as âEILâ or âthe Companyâ) is a Government of India Enterprise under Ministry of Petroleum and Natural Gas. The Company operates into two major segments namely Consultancy & engineering projects and Turnkey projects.

2. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE

The Company has its registered office situated at 1 Bhikaji Cama, New Delhi 110066, India. The shares of the Company are listed on the National Stock Exchange and the Bombay Stock Exchange.

The financial statements of the Company have been prepared in accordance with the Companies (Indian Accounting Standards) Rules 2015 (âInd ASâ) and relevant amended rules issued thereafter. These are Companyâs standalone financial statements. The Company also prepared consolidated financial statements separately.

Effective from 1 April 2016, the Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 âFirst time adoption of Indian Accounting Standardsâ, with 1 April 2015 as the transition date. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

The financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 25 May 2018.

d) Terms and rights attached to equity shares

The Company is having only one class of equity shares having 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.

Note : 3

Other equity

Nature and purpose of other reserves General Reserve

General Reserve is created out of the accumulated profits of the Company as per the provisions of Companies Act.

Capital Redemption Reserve

The Company has Created Capital Redemption Reserve out of free reserves, a sum equal to the nominal value of the shares purchased transferred to the capital redemption reserve account and details of such transfer disclosed in the balance sheet as per the provisions of Companies Act.

Retained Earnings

All the profits made by the Company are transferred to retained earnings from statement of profit and loss.

CSR Activity Reserve

Corpus for Medical Benefits for Employees retired prior to 01.01.2007

The Company has created separate corpus of medical benefits to retired employees who have retired prior to 01.01.2007 in terms of DPE guidelines

Other Comprehensive Income

Other comprehensive income represents balance arising on account of translation of foreign operation and gain/(loss) booked on re measurement of defined benefit plans.

Note : 4

Earnings per share (EPS)

Earnings per Share (âEPSâ) is determined based on the net profit attributable to the shareholdersâ of the Company. Basic earnings per share is computed using the weighted average number of shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the year including share options, except where the result would be anti-dilutive.

Pursuant to Public Announcement published on June 17, 2017 and letter of offer dated July 17, 2017, the company has bought back its 4,19,61,780 number of Equity shares of Face value of Rs.5 each fully paid up, at a buyback price of Rs.157/- per share through tender offer route under Stock Exchange Mechanism and extinguished these shares on August 16, 2017. Post buyback the companyâs equity share capital as on 31 March 2018 is Rs.31595.58 lakhs comprising of fully paid up 63,19,11,420 equity share having face value of Rs.5/- each .

Note : 5

(i) Fair value hierarchy

Level 1: quoted prices (unadjusted) in active markets for financial instruments.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly Level 3: unobservable inputs for the asset or liability.

(ii) Financial assets and liabilities measured at fair value - recurring fair value measurements

(iii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include - the use of net asset value for mutual funds on the basis of the statement received from investee party.

Note : 6

Financial instruments

(i) Financial instruments by category

Investment in subsidiaries, associate and joint venture are measured at cost as per Ind AS 27, âSeparate financial statementsâ.

The carrying value of the amortised financial assets and liabilities approximate to the fair value on the respective reporting dates.

(ii) Risk management

The Companyâs activities expose it to market risk, liquidity risk and credit risk. The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.

(A) Credit risk

Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Companyâs exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls.

a) Credit risk management

i) Credit risk rating

The Company assesses and manages credit risk of financial assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of financial assets.

A: Low credit risk on financial reporting date

B: Moderate credit risk

C: High credit risk

The Company provides for expected credit loss based on the following:

In respect of trade receivables, the company recognises a provision for lifetime expected credit loss.

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in statement of profit and loss.

ii) Concentration of trade receivables

The Companyâs exposure to credit risk for trade receivables is presented as below. Loans and other financial assets majorly represents loans to employees and deposits given for business purposes.

b) Credit risk exposure

(i) Provision for expected credit losses

The Company provides for 12 month expected credit losses for following financial assets -

(B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due.

Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.

Maturities of financial liabilities

The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities.

(C) Market risk

(i) Foreign exchange risk

The Company has international transactions and is exposed to foreign exchange risk arising from foreign currency transactions (imports and exports). Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the companyâs functional currency. The Company does not hedge its foreign exchange receivables/payables.

(ii) Price risk

The Companyâs exposure to price risk arises from investments held and classified as FVTPL. To manage the price risk arising from investments in mutual funds, the Company diversifies its portfolio of assets.

Sensitivity analysis

Profit or loss and equity is sensitive to higher/lower prices of instruments on the Companyâs profit for the periods -

Note : 7

Capital management

The Companyâs objectives when managing capital are:

- To ensure Companyâs ability to continue as a going concern, and

- To provide adequate return to shareholders

The amounts managed as capital by the Company are summarised as follows:

The Company has no outstanding debt as at the end of the respective years. Accordingly, the Company has nil capital gearing ratio as at 31 March 2018 and 31 March 2017.

A. Finance leases - lessee

The Company has taken certain lands on long-term leases ranging 60 to 99 years and certain lands on perpetual leases from government authorities. Such lands have been classified as leasehold land and are being depreciated over the tenure of the lease except for perpetual lease land.

B. Operating leases - lessee

(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.1,055.97 Lakhs (previous year 31 March 2017: Rs.1,092.96 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. The leases carry renewal option to renew lease on with escalation in rent in range of 5-15%. During the year an amount of Rs.386.46 Lakhs has been paid (previous year 31 March 2017: Rs.898.91 Lakhs) towards these non-cancellable operating leases. The future minimum lease payments in respect of these leases are as follows:

(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.2,102.31 Lakhs (previous year 31 March 2017: Rs.554.75 Lakhs) has been accounted for as rental income in respect of these cancellable operating leases.

Note : 8

A. Contingent Liabilities:

a) Claims against the Company not acknowledged as debt.

Commercial claims including employeeâs claims pending in the Courts or lying with Arbitrators amounting to Rs.22,794.93 lakhs (previous year 31 March 2017: Rs.11,778.07 lakhs).

b) Income tax/wealth tax assessments have been completed up to the assessment year 2015-16.

Income Tax Department is in appeal against tax demand of Rs.893.71 Lakhs (including interest) (previous year 31 March 2017: Rs.373.83 Lakhs) with Income Tax Appellate Tribunal, against the Commissioner of Income Tax (Appeals) Orders in Companyâs favour for various assessment years detailed below:

The Company has filed an appeal with Commissioner of Income Tax (Appeals) for an amount of â0.66 Lakhs (including interest) (previous year 31 March 2017 : Rs.0.32 Lakhs) against the order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the Assessment Year 2009-10.

The Company has filed an appeal against the order of Additional Commissioner (Appeal), Mathura before sales Tax Tribunal, Agra, which has been subsequently transferred to Sales Tax tribunal, Noida, for an amount of Rs.62.18 Lakhs (including interest) (previous year 31 March 2017: Rs.18.71 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 31 March 2017: Rs.5.01 Lakhs).

The Company has filed a writ petition before Honâble Andhra Pradesh High Court against the VAT Assessment Order of commercial Tax Officer dated 27 August 2016 levying tax of Rs.10,358.77 Lakhs (including interest) (previous year 31 March 2017: Rs.6,999.17 Lakhs) for the period July 2011 to March 2014.

The Company has filed a writ petition before Honâble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of commercial Tax dated 29 July 2016 levying tax of Rs.3,351.40 Lakhs (including interest) (previous year 31 March 2017: Rs.2,955.19 Lakhs) for the financial year 2009-10.

The Company has filed writ petition before Honâble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of commercial Tax dated 14 March 2017 levying tax of Rs.26,149.08 Lakhs (including interest) (previous year 31 March 2017: Rs.23,952.56 Lakhs) for the financial year 2010-11.

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.

B. Commitments:

a) Property, plant and equipment - estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for amount to Rs.1461.58 Lakhs (previous year 31 March 2017: Rs.1,692.70 Lakhs).

b) The Companyâs estimated share in work programmes committed under production sharing contract and Field development plan in respect of oil & gas exploration blocks as on 31 March 2018 is Rs.5,638.08 Lakhs (previous year 31 March 2017: Rs.1,150.49 Lakhs)

Note : 9

a) Guarantees issued by the banks and outstanding as on 31 March, 2018: Rs.88,033.98 Lakhs (previous year 31 March 2017: Rs.79,518.82 Lakhs), against which a provision of Rs.25,606.38 Lakhs (previous year 31 March 2017: Rs.27,191.43 Lakhs) has been made in the books towards liability for performance guarantees/warranties.

b) Letter of credit outstanding as on 31 March, 2018: Rs.1,296.85 Lakhs (previous year 31 March 2017: Nil).

c) Corporate Guarantees issued by the Company on its behalf for contractual performance and outstanding as on 31 March, 2018: Rs.15,009.04 Lakhs (previous year 31 March 2017: Rs.17,473.54 Lakhs).

Note : 10

Land and buildings

i) Land and Buildings includes Rs.0.07 Lakhs (previous years: 31 March 2017: Rs.0.07 Lakhs) being amount invested as share money in Cooperative Housing Societies as detailed below:

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

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

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

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

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

ii) For the following Land and Buildings, title deed/property card/mutuations etc is yet to be executed in the favour of the company:

The fees for property card/mutation etc. for above properties, being not ascertainable has not been provided for.

* Out of above properties, one of the properties, at S. No. ii (e) consisting of plot measuring 6,826.90 square meters with three Buildings, comprising of 84 flats at Gokuldham, Goregaon (East), Mumbai. Around 4,400 s-quare meter of area only is in the Companyâs possession. The Company has initiated action by filing an application for eviction under the Public Premises (Eviction of Unauthorised Occupants) Act 1971 and related proceedings under MLRC are in progress. The said property is partially presented as property, plant and equipment and partially as investment property.

The Company is primarily operating under two segments namely Consultancy and Engineering Projects and turnkey Projects. The broad heads under which income of the Company is accounted for as per provisions of Ind AS-11 (Construction Contracts) are as below:

Note : 11

Disclosure relating to construction contracts

In terms of provision of Indian Accounting Standard (Ind AS 11) âConstruction Contractsâ, the information in respect of Lump sum services/Turnkey Projects for contract in progress as on 31 March 2018:

a. The aggregate amount of cost incurred and recognized profit up to 31 March 2018: Rs.863,547.86 Lakhs (previous year 31 March 2017: Rs.756,339.98 Lakhs).

b. The amount of advances received Rs.2,900.81 Lakhs (previous year: 31 March 2017: Rs.4,410.71 Lakhs).

c. The amount of retention Rs.594.64 Lakhs (previous year: 31 March 2017: Rs.1,627.92 Lakhs).

d. Gross amount due to customers for contract work amounting to Rs.88,410.93 Lakhs (previous year: 31 March 2017: Rs.42,167.17 Lakhs)

e. Gross amount due from customers for contract work amounting to Rs.31,640.83 Lakhs (previous year: 31 March 2017: Rs.31,737.53 Lakhs).

f. 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 Indian Accounting Standard (Ind AS) -11 âConstruction Contractsâ. However, it is impracticable to quantify the impact of change in estimates.

Note : 12

Brief description of the Companyâs joint ventures a) TEIL Projects Limited (âTEILâ)

TEIL has been formed in this regard having its Registered Office at New Delhi has an Authorized capital of Rs.1,500 Lakhs and Issued, Subscribed and Paid-up capital of Rs.1,100 lakhs (Previous year 31 March 2017: Rs.1,100 lakhs).

Of the issued, subscribed and paid-up capital, 5,500,000 shares of Rs.10 each fully paid-up amounting Rs.550.00 lakhs (previous year: 31 March 2017 Rs.550.00 lakhs) are held by the Company, being 50% of paid-up capital of TEIL.

Till 31March 2017, the TEIL had negative âother equityâ to the tune of Rs.1,075.64 Lakhs. The Companyâs share of negative âother equityâ Rs.537.82 Lakhs has been accounted for as impairment in value of investment.

During the current financial year 2017-18, based on liquidator statement, TEIL had a net loss of Rs.4.46 Lakhs. The Companyâs share of loss of Rs.2.23 Lakhs has been recorded as impairment in value of investments.

b) Jabal Eiliot Company Limited (âJabalâ)

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

The joint venture company namely âJabal Eiliot Company Limitedâ was registered with Dammam Commercial registry, Kingdom of Saudi Arabia. Jabal was formed for pursuing its business interests has an initial capital of SR. 15,000,000, out of which one third i.e. SR. 5,000,000 (Equivalent Indian Rs.599.00 Lakhs) was contributed by the Company as its share.

Till 31 March, 2017, Jabal had incurred losses to the tune of SR 5,388,789, of which the Companyâs share of SR 1,669,470 (equivalent Indian Rs.202.62 Lakhs at historical conversion rate) which has been accounted for as impairment in value of investment in Companyâs financial statements till 31 March 2017.

Despite all around efforts, Jabal 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 Jabal and accordingly the Board of Directors of the Company in their meeting held on 30 January 2015 passed the resolution to initiate action for dissolution and liquidation of Jabal. The process of dissolution is underway.

In view of process of dissolution, the part capital of SR 3,308,713.33 (equivalent Rs.549.85 Lakhs) has already been repatriated.

c) Ramagundam Fertilizers and Chemicals Limited (âRFCLâ)

The Company has Authorized share capital of Rs.150,000 Lakhs consisting 15,000 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%

State Government of Telangana: 11%

Others: 26% (untied as on 31 March 2018)

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.

RFCL has entered into concession agreement with FCIL on 23 March 2016 towards award of rights and concession to the company in regard to facility area (land admeasuring approximately 1284 acre) for financing, designing, engineering, procurement, construction, development, operation and maintenance of the project. Shareholding of 11% to FCIL is in consideration of FCIL granting concession rights in the land, opportunity cost and value of the useable assets at Ramagundam to RFCL. However, pending compliance of conditions precedent of the Concession agreement, no shares were allotted to the FCIL in the previous year.

During the year, all the conditions precedent to the concession agreement has been completed. Pursuant to which, the company has received rights in leasehold land and certain other assets from the Fertilizer Corporation of India. As per terms of the concession agreement, the Company shall be issuing equity shares equal to 11% of the total equity portion of the capital expenditure of the project at the time of commencement of commercial production (presently Rs.14,449.27 Lakhs) in phased manner. The Company has allotted 9,25,16,291 share ( Rs.9,251.63 Lakhs) against leasehold land and other assets received. Remaining shares shall be issued to FCIL in a phased manner, in proportion to contribution to be received from NFL and EIL in future.

As per Cabinet Committee on Economic Affairs (CCEA) decision, the nominated PSU (Engineers India Limited) 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 Board for Industrial and Financial Reconstruction(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 other current financial assets and a corresponding liability has been disclosed as other current financial liabilities in the financial statements of the Company.

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 the Company namely Ramagundam Fertilizers and Chemicals Limited.

Note : 13

Employee benefits 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. In this regard, Actuarial valuation as on 31 March, 2018 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 31 March 2018 and 31 March 2017.

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)

Risks associated with plan provisions

Risks associated with the plan provisions are actuarial risks. These risks are: (i) Investment risk, (ii) interest risk (discount rate risk), (iii) mortality risk and (iv) salary risk.

*Changes in Defined benefit obligation due to 1 % Increase/Decrease in Mortality Rate, if all other assumptions remain constant is negligible.

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.

There is no change in the method of the valuation for the prior period. For change in assumption please refer to table (e) above, where assumptions for prior period, if applicable, are given.

Note : 14

The wage revision in respect of employees is due w.e.f. 01.01.2017. In terms of approval of Board of Directors of the company and Presidential Directive dated 01.02.2018 received from MoP&NG, the wage revision in respect of Board level and below Board level executives have been paid/provided for in the books of accounts. For unionized staff, wage revision liability has been provided for on estimated basis in the books of accounts.

Note : 15

The Company has entered into Production Sharing Contracts with Government of India along with other partners for Exploration and 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 the Companyâs interest in blocks is as under Based on audited financial statements of Block No. CB-ONN-2010/08 and unaudited available information for CB-ONN-2010/11 the revenue expenditure and capital expenditure has been accounted for in financial statements for year ended 31 March 2018 is as follows-:

In block No. CB-ONN-2010/08 one and CB-ONN-2010/11 two of the consortium members 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.791.40 Lakhs (previous year: 31 March 2017 : Rs.526.60 Lakhs) in respect of same has been paid and accounted for as other current asset.

Segment reporting

In line with Indian Accounting Standard (Ind AS108) âOperating Segmentsâ, the Company has (segmented) identified its business activity into two business segment i.e. Consultancy and 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:

* Financial year 2017-18 includes expenditure on Oil and Gas exploration blocks including dry well written off amounting to Rs.2,643.14 Lakhs ( previous year : Rs.449.47 Lakhs).

Financial year 2016-17 includes Rs.9062.88 Lakhs on account of provisions for increase in gratuity ceiling from Rs.10 Lakhs to Rs.20 Lakhs with effect from 01 January 2017.

** Property Plant and Equipment and other assets used in the Companyâs business or segment liabilities contracted have not been identified to any of the reportable segments, as these assets and support services are used interchangeably between segments. Accordingly, no disclosure relating to total segment assets and liabilities has been made and capital employed has been presented.

Segment revenue with major customers

During the year 31 March 2018, Rs.42,387.44 Lakhs (previous year 31 March 2017: Rs.38,754.01 Lakhs) of the Companyâs revenues, each individually exceeding 10% in the consultancy and engineering projects segment was generated from two (previous year 31 March 2017: two) customers.

During the year 31 March 2018, Rs.37,959.27 Lakhs (previous year 31 March 2017: Rs.28,109.56 Lakhs) of the Companyâs revenues, each individually exceeding 10% in the turnkey projects segment was generated from three (previous year 31 March 2017: four) customers.

(a) In one of the turnkey project executed by the company in previous years, the client had levied the price reduction due to delay in completion of the project and accordingly reduced contract price was recognized as revenue in terms of accounting principles. During the year, the settlement in respect of time extension has been completed with the client and accordingly revenue from operations, segment revenue from turnkey projects and profits includes an amount of Rs.3,756.98 lakhs towards settlement of price reduction.

(b) The company during the year has received change orders from two of its clients in Consultancy and engineering Projects. The cumulative impact of these change orders on turnover and operating profit during the year was Rs.7,002.66 lakhs and Rs.6,505.94 lakhs respectively.

Note : 16

The Company in the month of April 2016 terminated a contract; consequent to receipt of findings of investigating agency that certificate submitted by the contractor for qualifying the contract was bogus. The facts in this regard including lodging of claim, subsequent to termination of contract had been disclosed in the annual account of the last financial years 2015-16 and 2016-17.

Subsequent to termination of contract, the Company is completing the project at the risk and cost of contractor in terms of provisions of the contract. The contractor has gone into arbitration and has submitted its arbitration notice. Arbitral Tribunal has been constituted. Contractor has filed its statement of claim amounting to Rs.40,960.75 Lakhs. EIL has also filed its reply along with its counter claim and application to implead the parent company of contractor, arguments on which are being heard by arbitral tribunal. The Management does not consider any possible obligation on this account requiring future probable outflow of resources of the Company.

Note : 17

Disclosure relating to AOP

The 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.

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

Due to above decision, the Company has received till date an amount of Rs.1,350.00 Lakhs (Previous Year 31 March 2017: Rs.1,350.00 Lakhs) as its share out of total amount of Rs.14,136.00 Lakhs (Previous Year 31 March 2017: Rs.14,136.00 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.

Note : 18

In terms of Indian Accounting Standard (Ind AS 37) âProvisions, contingent liabilities and contingent assetsâ, the requisite disclosures are as under:

The movement in provisions are as under

Nature of provision

a) Contractual Obligations :

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 Indian Accounting Standard Ind AS -11 âConstruction Contractsâ.

c) The disclosure in respect of contingent liabilities is given as per note no. 40.

Note : 19

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

a) Loans given- Nil

b) Investments done are given in the joint venture note. No. 7.

Note : 20

The dues to Micro and Small Enterprises as required under the Micro, Small and Medium Enterprises Development Act 2006 to the extent information available with the company is given below:

Note : 21

Note - 22

The statement of profit and loss account includes research and development expenditure of Rs.1,323.22 Lakhs (previous year 31 March 2017: Rs.1,267.04 Lakhs).

Note - 23

There is no impairment of cash generating assets during the year in terms of Indian Accounting Standard (Ind AS-36) âImpairment of Assetsâ.

Note - 24

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.

Note - 25

The balances of trade receivables, loans and advances, customerâs advances, retention money, security deposits receivable/payable and trade payables are subject to confirmation and reconciliation.

Note - 26

Pursuant to Public Announcement published on June 17, 2017 and letter of offer dated July 17, 2017, the company has bought back its 41,961,780 number of Equity shares of Face value of Rs.5 each fully paid up, at a buyback price of Rs.157/- per share through tender offer route under Stock Exchange Mechanism and extinguished these shares on August 16, 2017.

Further, President of India, acting through DIPAM and Ministry of Petroleum and Natural Gas, Government of India, has sold 1,35,88,409 equity shares of the company to BHARAT 22 ETF through a New Fund Offer (NFO) in terms of Scheme framed in this regard. Pursuant to above, Government of India (Promoter) Shareholding was reduced from 57.02 % to 52.02%.

Note - 27

During the earlier years, the Company proposed to sale its old obsolete computers (âAssetsâ). Some of these Assets have been sold during the financial year 2016-17. The outstanding balance has been classified as Assets held for sale.

Note - 28

Previous yearâs figures have been regrouped/reclassified to make them comparable to the figures of the current year.

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 AssetsÂ.

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 Â7) "Construction ContractsÂ, 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 ContractsÂ. 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 CompanyÂ, 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.Â 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 BenefitsÂ 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 reliablyÂ 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%Â. 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 OfferÂ 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.

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