Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws. The company offsets advance payments and provisions for current tax and discloses the net amount it intends to settle and where it has a legally enforceable right to set off the recognized amount.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax assets or a deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations.

The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonable certain that sufficient future taxable income will be available against which the deferred tax assets can be realized.

The Company has only one class of Equity Shares having a par value of Rs. 10/- Per Share. Each Shareholder is eligible for one vote per share. In the event of liquidation, the Equity Shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

*The Shares held by Mr. Ashok Punj, Arjun A Punj and Keshav A Punj are pledged with Bank.

During the financial year 2014-15 the Company has alloted 45638441 equity shares on preferential basis to various lenders of the Company pursuant to CDR Scheme on 31^st December, 2014 out of them 1046150 equity shares were allotted to Edelweiss Assets Reconstruction Company Ltd.. The said shares were locked in from 31^st December, 2014 to 5^th February, 2016. These shares are now further locked-in from 5^th April, 2016 to 31^st December, 2016.

All the bank loans are secured by first charge on the specific immovable property, entire moveable assets and the entire Current assets of the company on pari passu basis except for a bank which has the first exclusive charge on the specific noncore assets of the company namely land at pipava , Mahudi and Panipat.

The company had filed the flash report on 6^th March 2013 before Corporate Restructuring (CDR) cell at Mumbai. The restructuring package was approved by CDR Cell , effective date being 24^th August 2013 .The outstanding loan balance is worked out on the basis of the approved packaged and it is accounted. The Interest payable on this entire restructured loan as per the approved interest rate for Twevele months period (1^st April 15 to 31^st March 2016) is not accounted. (Previous year 1^st April 2014 to 31^st December, 2014 not accounted).

The repayment of loan starts from 1^st January 2015 and the repayment completes in the third quarter of F.Y. 2023. The principal amount due for repayment amounting to Rs. 223.07 Crores for this year was not repaid. (Previous Year Rs. 92.27 Crores).

Fixed assets were physically verified by the management during the year. Pending completion of reconciliation which has not been completed, discrepancies, if any, cannot be ascertained,

a. A charge has been created in favour of ICICI by depositing, the Title Deeds of Chennai Factory (acting as the agent of IDBI Trusteeship Services Ltd.) In order to secure outstanding dues of CDR lenders and JSW Steel Ltd on pari passu basis.

k* The Company has also created pari passu charge with respect to immoveable property at Jaipur in favour of JSW and CDR lenders by way of mortgage by deposit of Title Deed in favour of IDBI Trusteeship Services Ltd.

The Company has purchased 39.345 Acres of land from “Broken Hills International Private Limited for a consideration of Rs 31,55,00,020/- (Rupees Thirty One Crores Fifty Five Lacs Twenty Only). The vendor has prior to execution of the sale deed, obtained the No Objection Certificate dated 20.03.2014 from ICICI Bank Limited (Acting as the Monitoring Institution in terms of the Master Restructuring Agreement dated 19.11.2013) under which ICICI Bank Limited has permited the vendor to convey, transfer and assure the Scheduled land to the Purchasers subject to such conveyance transfer and assurance being subject to the mortagage subsisting in favour of the Martagagee for the benefit of the lenders to the purchaser under the Master Restructuring Agreement dated 13.11.2013 and also on the condition that the after the sale of the scheduled land in favour of the purchaser, the purchaser shall forwith mortgage the scheduled land in favour of the security trustee for the benefit of the lenders to the purchaser under the Master Restructuring Agreement dated 13.11.2013

a. Trade Payables includes Rs. Nil (Previous Year Rs. Nil) Due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs.288.68 Crores (Previous Year Rs.314.86 Crores) due to other parties

b. No interest is paid/payable during the year to any enterprise registered under the MSME.

c. The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of Suppliers under the MSME.

NOTE “1” - DERIVATIVE INSTRUMENTS

I. The Company has entered into the following derivative instruments.

a. Forward Exchange contracts (being a derivative instrument), which are not intended for trading or speculative purposes, but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

Forward Exchange Contracts entered into by the Company as on March 31,2016 .(payable): USD NIL

b. Interest Rate Swaps to hedge against fluctuations in interest rate changes :

No of Contracts N I L

Notional Principal N I L

c. Currency Swaps (other than forward exchange contracts stated above) to hedge against fluctuations in changes in exchange rate.

No of Contracts NIL

Notional Principal NIL

Foreign exchange exposure of ECB Term Loan of USD 50 mio not included in the above as this ECB Loan will be converted as per CDR package into Rupee Term Loan.

III. Derivative Instruments (causing an unheeded foreign currency exposure): NIL

1. Relationships

a) Subsidiary Companies

PSL Corrosion Control Services Ltd. 100% Subsidiary Company

Pipeline Systems Ltd., Mauritius 100% Subsidiary Company

PSL USA INC. , Delaware , USA 100% Subsidiary Company

PSL Gas Distribution Pvt.Ltd. 100% Subsidiary Company

PSL Infrastructure and Ports Pvt.Ltd. 100% Subsidiary Company

PSL FZE, Sharjah. 100% Subsidiary Company of Pipeline Systems Ltd., Mauritius

PSL North America LLC. JV Company of PSL USA INC., Delware, USA (80% holding)

(PSL North America LLC and PSL USA Inc. have filed insolvency petition under Chaper 11 under the US regulation. Currently under judicial process)

b) Associate BHI Ltd.

Broken Hills International Ltd.

Eurocoustic Products Ltd.

Punj International Pvt. Ltd.

Punj Investments Pvt. Ltd.

Punj Corporation Private Limited Rosoboronterra India Pvt.Ltd.

(Subsidiary of Punj Corporation Private Limited)

c) Key Management Personnel

Ashok Punj : Managing Director

R. K . Bahri : Whole Time Director

C K Goel : Whole Time Director

II) Others

a) Inventory

During the year some old and non-moving stock was sold as a distress sale and having realized Rs.25.78 Crores. The Company has provided for resultant loss on sale of old and non-moving stock and also made provision for remaining stock/non-moving stock totaling to Rs.1006.48 Crores during the year. As certified by the management balance stock is Rs.156.38 Crores valued at cost as on 31^st March, 2016.

b) Foreign Subsidiaries

i) The net worth of Pipeline Systems Limited (100% subsidiary of Company) is negative as on 31-3-2016 on account of accumulated losses.

ii) The net worth of PSL USA is negative as on 31-3-2016 on account of accumulated losses and the company has filed a petition under Chapter 11 under Bankruptcy in USA.

II. Income Tax Assessment Completed upto AY 2013-14 (March’2013), with Nil Demand

III. Gujarat Water Supply & Sewerage Board (GWSSB) , a Government of Gujarat Undertaking and a regular customer of the Company has made a reference to “Gujarat Public Works Contracts Disputes Arbitration Tribunal” for settlement of some Disputes, including a claim against the Company arising out of a routine contract awarded earlier to the Company the performance of which was hit by force majure conditions. As Company has since challenged the jurisdiction of aforesaid tribunal, the matter is pending. Hence at this stage no provision has been made in the attached accounts towards any possible liability on this account.

IV. The Estate Office Kandla Port Trust under Public Premises (Evocation of unauthorized) passed order on 27/3/14 for the evocation of Kandla PCD-I premises because lease period was over. The Company is taking suitable legal action against above order. Since the lease amount is under dispute, the lease payment have not been made and not provided in accounts.

V. In the opinion of the Board the Current Assets are approximately of the value, if realised, in the ordinary course of the business. The Provision for Depreciation and for all known Liabilities are adequate and not in excess of the amount reasonably considered necessary . All the income accrued has been accounted for in the books.

VI. Sundry Debtors, Sundry Creditors and other advances are subject to confirmation.

NOTE “2”

In terms of the approval (LOA) of CDR cell interest on the bank loans of CDR member banks and non CDR member banks shall be funded for a period of 2 years i.e. from 1/1/2013 to 31/12/2014 as a fresh term loan namely FITL. Interest as per the approved rate based on the restructuring package was worked out, however not charged to interest account. Also the Company has not provided regular interest on loan outstanding Rs. 364.66 Crore for the period from 1/4/15 to 31/3/16. Interest payable as per this calculation for the loan outstanding as on date amounting to Rs.627.21 Crores.

NOTE “3”

The previous period figures have also been reclassified regrouped to confirm to this period’s classification

NOTE “4”

Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as Note No 1.