Notes to financial statements for the year ended 31 st March 2015.

1. Corporate Information :

Tarmat Ltd. was established in the year 1986 by Mr. Jerry Varghese. The company is specialized in the construction of Airfield and National/State Highways all over India. The brsent works include construction of heavy duty parking bays at Bangalore International Airport, construction of airport runway, taxiway, apron, approach road, peripheral road etc. at Gulbarga & Shimoga, recarpeting of Main Runway at Gwalior and Awantipur Airports, four laning project of Napgur-Hyderabad National Highway, construction of internal roads for Sai Sansthan Trust, Shirdi etc.

The company had its IPO in 2007 and got listed in BSE and NSE. The brsent paid up capital of the company is Rs. 10.96Cr, of which 63% is held by the promoters.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 BASIS OF brPARATION OF FINANCIAL STATEMENTS -

(i) These financial statements have been brpared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards brscribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other accounting principles generally accepted in India, to the extent applicable. All assets and liabilities have been classified as current or noncurrent as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013.

(ii) Financial statements are based on historical cost and are brpared on accrual basis, except where impairment is made and revaluation is carried out.

(iii) Accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year.

2.2 Use of Estimate -

The brparation of financial statements requires estimates and assumptions to be made that affects the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

2.3 Revenue Recognition -

(i) Income from construction contracts is recognized on the basis of work certified in accordance with percentage completion method. All other income and expenditure are recognized and accounted for on an accrual basis. Losses on contracts are fully accounted for as and when incurred.

(ii) Hire Charges is accounted for as per terms of the lease agreement.

(iii) Dividend Income is accounted for when the right to receive is established.

(iv) Interest income on deposits is recognized on accrual basis.

2.4 Fixed Assets -

Fixed Assets are stated at cost net of tax/duty credits availed, wherever applicable less accumulated debrciation/ impairment losses, if any. The cost of an asset comprises of purchase price and any directly attributable cost of bringing the assets to its brsent condition for intended use and incremental amount of revaluation.

2.5 Debrciation -

Debrciation is charged as per Straight-line method at the rate and in the manner specified in Schedule II to the Companies Act, 2013. Debrciation on fixed assets sold or scrapped during the year is provided upto the date on which such fixed asset is sold or scrapped. Debrciation on addition to fixed assets is calculated on pro rata basis from the day of addition.

2.6 Inventories -

The stock of stores, spares and embedded goods and fuel is valued at cost (weighted average basis), or net realizable value whichever is lower.

Work in Progress is valued at the contract rates and site mobilization expenditure of incomplete contracts is stated at cost.

2.7 Investment -

Investments which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as Long Term Investments. Current Investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long Term Investments are measured at Cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.

2.8 Borrowing Costs -

Borrowing cost which are directly attributable to the acquisition/construction of Qualifying Assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost is charged to revenue.

2.9 Current Tax and Deferred Tax -

i. Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.

ii. Current Tax is calculated in accordance with the tax laws applicable to the current financial year.

iii. Deferred tax expense of benefit is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

iv. Advance tax and provision for current income are brsented in the balance sheet after setting off advance tax paid and income tax provision arising in the same tax jurisdiction.

2.10 Foreign Exchange Transaction -

(i) Transaction denominated in foreign currencies is normally recorded at the exchange rate brvailing at the time of the transaction.

(ii) Monetary items denominated in foreign currency as at the balance sheet date are translated at the year-end exchange rate.

(iii) Premium on forward cover contracts in respect of import of raw material is charged to profit & loss account over the period of contracts except in respect of liability for acquiring fixed assets, in which case the difference are adjusted in carrying cost of the same.

2.11 Employee Retirement Benefits -

The company provides for gratuity in accordance with the rules of the company based on an actuarial valuation carried out at the balance sheet date, by an independent actuary. Contribution payable to Employees benefits is charged to Profit & Loss Account as and when incurred. Leave wages is not applicable to this company. The Company has provided for gratuity during the current year as per the actuarial valuation of liability.

2.12 Impairment of Assets-

The company assesses at each balance sheet date whether there is any indication that an assets may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets Or the recoverable amount of the cash generating unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. If at the balance sheet date there is an indication that if a brviously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciated historical cost.

2.13 Earning per share -

Basic EPS is computed using the weighted average number of equity shares outstanding during the year.

2.14 Provision, Contingent Liabilities and contingent assets -

Provision involving substantial degree of estimation in measurement is recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

Note No.3 Additional Comments

1) On assessment of the impairment of fixed assets of the company as at the Balance Sheet date as required by Accounting Standard 28 "Impairment of Assets" issued by the ICAI, the company is of the view that no provision for impairment of fixed assets is required.

2) In accordance with Accounting Standard 11 (revised), the net exchange gain credited to profit & Loss account is Rs. Nil/- (Previous year debit Rs. Nil)

3) In the opinion of the Board the current assets and advances if realized in the ordinary course of business have value on realization at least to the amount at which these are stated in the Balance Sheet. The provision for all known liabilities are adequate and not in excess of the amount reasonable necessary.

4) The brvious year's figure have been reworked, regrouped, rearranged and reclassified wherever necessary.

As per our report of even date

For HEGDE & ASSOCIATES

CHARTERED ACCOUNTANTS

Registration No. 103610W

Sd/- MANOJ V SHETTY

(PARTNER)

Membership No. 138593

For and on behalf of the Board of Directors of Tarmat Ltd.

Sd/- JERRY VARGHESE MANAGING DIRECTOR

Sd/- SHIVATOSH CHAKRABORTY COMPANY SECRETARY

Sd/- DILIP VARGHESE EXECUTIVE DIRECTOR

Sd/- SHRIDHAR SHETTY CHIEF FINANCIAL OFFICER

Dated: 30.05.2015

Place: MUMBAI