a) Terms and rights attached to equity shares

The Company is having only one class of equity shares having par value of ' 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.

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.

(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) 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.

A. Lease

Company as a lessee

The Company's lease assets primarily consist of leases of lands, cars, office/residential premises and Computer Hardware. 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.

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 ' 545.36 Lakhs (Previous year : ' 573.07 Lakhs) towards short term leases for certain office/residential premises, cars and Computer Hardware.

Company as a lessor

The Company has given certain office/residential premises on operating lease. During the year an amount of ' 1819.96 Lakhs (including reimbursement of operating expenditure of ' 337.31 Lakhs)(Previous year: ' 1917.55 Lakhs (including reimbursement of operating expenditure of ' 400.68 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 ' 26,255.60 Lakhs (previous year 31 March 2022: ' 23,927.03 Lakhs).

- During the year an amount of ' 381.97 Lakhs (previous year: ' 8.27 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) (i) The Company has filed a Special Leave Petition (SLP) before Hon'ble Supreme Court against the dismissal of Writ appeal filed before Hon'ble Karnataka High Court against VAT Assessment Order of Deputy Commissioner of commercial Taxes dated 29th July 2016 levying tax of ' 4,540.02 Lakhs (including interest) (Previous year 31st March 2022: ' 4,302.29 Lakhs (including interest)) for the financial year 2009-10.

(ii) The Company has filed a Special Leave Petition (SLP) before Hon'ble Supreme Court against the dismissal of Writ appeal filed before Hon'ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of commercial Taxes dated 14th March 2017 levying tax of ' 36,492.56 Lakhs (including interest) (Previous year 31st March 2022: ' 34,512.56 Lakhs (including interest)) for the financial year 2010-11.

(iii) The Company has filed a Special Leave Petition (SLP) before Hon'ble Supreme Court against the dismissal of Writ appeal filed before Hon'ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of commercial Taxes dated 25th March 2019 levying tax of ' 790.48 Lakhs (including interest) (Previous year 31st March 2022: ' 739.08 lakhs(including interest)) for the financial year 2013-14

(iv) 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 ' 991.66 Lakhs (including interest) (Previous year 31 March 2022: ' 923.43 Lakhs (including interest)) on 2nd May 2019.

(v) 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 ' 717.55 Lakhs (including interest) (Previous year 31 March 2022 : ' 664.32 Lakhs(including interest)) for the financial year 2015-16.

(vi) The Company has filed writ petition before Hon'ble Karnataka High Court against the VAT Assessment Order of Deputy Commissioner of Commercial Taxes dated 27April 2021 levying tax of ' 60.39 Lakhs (including interest) (previous year 31 March 2022: ' 54.97 lakhs (including interest)) for the financial year 2016-17.

In terms of the contract(s) entered into with the client, the liability as referred to in S.no. (i) to (vi) above shall be reimbursed by the client whenever, it reaches to its finality.

vii) 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 ' 291.94 Lakhs (including interest)(previous year 31 March 2022: ' 273.93 Lakhs (including interest)) for the period April 2014 to June 2017.

viii) The Company has filed a writ petition before Hon'ble Andhra Pradesh High Court against the Penalty Notice of Assistant Commissioner (CT) dated 14th May 2019 levying penalty of ' 150.14 Lakhs (Previous year 31 March 2022: ' 150.14 Lakhs) for the period April 2014 to June 2017.

ix) The Company has filed appeal before Joint Commissioner (Appeals) against the VAT Assessment Order of Deputy Commissioner of commercial Taxes dated 30th July 2022 levying tax of ' 15.77 Lakhs (including interest) (previous year 31st March 2022: NIL) for the period April 2017 to June 2017.

x) The Company has filed appeal before CESTAT against the Service Tax demand order of Commissioner (Appeals-II) dated 22nd November 2022 levying tax of ' 3.71 Lakhs (including interest) (previous year 31st March 2022: ' 3.52 lakhs (including Interest)) for the financial year 2016-17 and ' 3.95 Lakhs (including interest) (previous year 31st March 2022: ' 3.75 lakhs (including interest)) 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 ' 4,141.41 Lakhs (inclusive of taxes wherever applicable) (previous year 31 March 2022: ' 4,343.66 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 2022 ; 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 2023 is ' 3,878.77 Lakhs (previous year 31 March 2022: ' 3,963.49 Lakhs).

d) The amount towards subscription of right issue of 1,25,73,627 equity shares in Numaligarh Refinery Limited of ' 10 per share at a price of ' 110 per equity share amounting of ' 13,830.99 lakhs as approved by the Board of Directors in the meeting held on 20.03.2023 (Previous Year 31 March 2022 : Nil).

a) Guarantees issued by the banks and outstanding as on 31 March, 2023: ' 58,567.38 Lakhs (previous year 31 March 2022: ' 60,770.48 Lakhs), against which a provision of ' 51,172.43 Lakhs (Previous year 31 March 2022: ' 46,658.52 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 31March, 2023: ' 617.19 Lakhs (previous year 31 March 2022: ' 6,263.25 Lakhs).

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 2023 and 31 March 2022, ' 21,607.98 Lakhs and ' 19,348.88 Lakhs of Contract assets (unbilled revenue) as of 1 April 2022 and 1 April 2021 respectively has been reclassified to Trade receivables upon billing to customers.

During the year ended 31 March 2023 and 31 March 2022, the company recognized revenue of ' 48,054.68 Lakhs and ' 60,393.94 Lakhs arising from opening Contract liabilities (Income Received in Advance) as of 1 April 2022 and 1 April 2021 respectively.

During the year ended March 31, 2023, 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 2023 is ' 7,69,455.91 Lakhs. Out of this, the Company expects to recognize revenue of around 46% 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 2022 was ' 7,65,496.53 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.

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 2022: ' 1,500 lakhs) and Issued, Subscribed and Paid-up capital of ' 1,100 lakhs (Previous year 31 March 2022: ' 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 2022'550.00 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 2022-23, 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 2022: ' 200,000 Lakhs) consisting 20,000 Lakhs (Previous year: 31 March 2022: 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.

Till financial year ended 31 March 2023, the Company had incurred losses to the tune of RU 1,15,82,000 (Previous year 31 March 2022 : RU 28,17,000) of which the, the Company's share is RU 23,16,400 (equivalent Indian ' 25.94 Lakhs) ((Previous Year 31 March 2022: RU 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 above includes ' 3,144.20 Lakhs (previous year ended 31 March 2022 :' 2,248.62 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, 2023 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 2023 and 31 March 2022.

Segment revenue with major customers

During the year 31 March 2023, ' 38,940.54 Lakhs (Previous year 31 March 2022: ' 73,741.02 Lakhs) of the Company's revenues, each individually exceeding 10% in the consultancy and engineering projects segment was generated from two (previous year 31 March 2022: four) customers.

During the year 31 March 2023, '1,76,269.16 Lakhs (Previous year 31 March 2022: ' 1,24,854.73 Lakhs) of the Company's revenues, each individually exceeding 10% in the turnkey projects segment was generated from two (Previous year 31 March 2022: 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 ' 6,848.03 lakhs (' 6,653.59 lakhs FY 2021-22).

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.

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.

Pursuant to settlement with Client in Consultancy & Engineering Project Segment, the contractual obligation in respect thereof amounting of ' 7,877.75 lakhs has been written back.

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.

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 ' 11,741.31 lakhs as at 31 March 2023 (previous years: 31 March 2022: ' 15,557.83 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 the provision of probable future principal defaults of the amortised value amounting to ' 9,841.09 lakhs (previous years: 31 March 2022: ' 12,446.27 lakhs).

D) Provision for Abandonment:

Provision for decommissioning cost/abandonment cost in respect of assets under Joint Operations is considered as per participating interest of the Company on the basis of estimates approved by the respective operating committee. Wherever the same are not approved by the respective operating committee, decommissioning cost/abandonment cost estimates provided by the operator of the Block are considered.

E) 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.

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 2023 based on actuarial valuation. To the extent of the impact of such an increase of ' 639.48 Lakhs (previous year 31 March 2022: ' 856.24 Lakhs), the corresponding Defined Contribution Superannuation Scheme to the employees has been reduced to meet 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 ' 2,266.14 Lakhs (previous year 31 March 2022: ' 2,093.56 Lakhs). The capital expenditure of research and development assets is ' 743.47 Lakhs (previous year 31 March 2022: ' 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 2023 is of ' 34.71 Lakhs (previous year 31 March 2022: ' 34.11 Lakhs). During the year, the Company has recognised ' 8.10 Lakhs (previous year: ' 11.68 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".

Note - 61

a) The company has not traded or invested in Crypto Currency or Virtual Currency during the financial year 2022-23.

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 2023 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.

The Company proposed to sale its old residential flats ('Assets') which is under the process of disposal and is expected to be completed in the financial year 2023-24 based on the fair value as determine as approved by the competent authority in this regard. 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.

Note - 65

Corporate social responsibility expenses

The requisite disclosure relating to CSR expenditure in terms on amended Schedule III of the Companies Act and Guidance Note on Corporate Social Responsibility (CSR) issued by the Institute of Chartered Accountants of India:

Note - 68

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