1. BASIS OF PREPARATION AND MEASUREMENT

i. Statement of Compliance

The financial statements as at and for the year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

For all the periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with requirement of previous GAAP, which includes accounting standards notified under the section 133 of the Companies Act 2013 read together with Companies (Accounting Standards) Rules, 2006. The Date of transition to Ind AS is April 01, 2016. These financial statements for the year ended March 31, 2018 are Company’s first Ind AS financial statements. The disclosure relating to Ind AS 101, First-time adoption of Indian Accounting Standards have been given in Note no.3

ii. Accounting Convention and Basis of Measurement

The financial statements have been prepared on the historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:

i) Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments)

ii) Defined benefit and other long-term employee benefits.

iii. Functional and Presentation Currency

The financial statements are presented in Indian rupees, which is the functional currency of the company and the currency of the primary economic environment in which the company operates. All financial information presented in Indian rupees has been rounded to the nearest thousands except share and earning per share data.

iv. Use of Judgements, Estimates and Assumptions

The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosure of contingent liabilities and assets. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

Information about critical judgements in applying accounting policies, as well as estimates and assumptions in respect of the following areas, that have most significant effect to the carrying amounts within the next financial year are included in the relevant notes.

i) Useful lives of property, plant, equipment and intangibles

ii) Measurement of defined benefit obligations

iii) Measurement and likelihood of occurrence of provisions and contingencies

iv) Recognition of deferred tax assets.

v) Impairment of intangibles

vi) Expenditure relating to research and development activities.

v. Operating Cycle

Based on the nature of products/ activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

2. FIRST TIME ADOPTION OF IND AS

These financial statements of Oil country Tubular Limited, for the year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the company has followed the guidance prescribed in Ind AS 101 - first time adoption of Indian Accounting Standard, with effect from April 01, 2016 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The Accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ending March 31, 2018 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the company’s Balance sheet, statement of profit and loss, is set out in note 5. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101, have been set out in note 4.

3. EXEMPTIONS AVAILED ON FIRST TIME ADOPTION OF IND-AS 101

Ind-AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind-AS and exemptions from other Ind-AS. The company has accordingly applied the following exemptions.

Property, Plant and Equipment and Intangibles:

The Company may elect to use the previous GAAP carrying amount as the deemed cost for measurement of items of property, plant and equipment and intangibles assets at the date of transition to Ind- AS. Accordingly the company adopted the previous GAAP carrying amount that existed at the date of transition to Ind-AS.

4. Reconcilations

The following reconciliations provide the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101 A Equity as at April 1, 2016 and March 31,2017 B Net profit for the year ended March 31, 2017

5. Disclosure as per Ind AS - 12 Income tax

A. Income tax assessments:

The company’s income tax assessments were completed upto financial year 2013-14.

B. The tax effects of significant temporary differences that resulted in deferred income tax asset and liability are as follows:

6. Disclosure as per Ind AS-19 - Employee benefits

a. Defined Contribution Plan

Contribution to Defined Contribution Plan recognised as expenses for the year as under:

b. Defined Benefit Plan

I. Gratuity obligation of the company:

The employees’ gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognised each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit to build up the final obligation. The obligation for leave encashment is recognised in the books as per Actuarial Valuation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company’s policy for plan assets management.

7. Disclosure as per Ind AS-108 Operating segments:

The Segmental Reporting is given for Sales and Services since the Company is predominantly engaged in the manufacture and sale of Drill Pipe and Allied Products, Oil Country Tubular Goods (OCTG) and Services associated with the product.

8. Previous year figures as per previous GAAP have been regrouped / re arranged / reclassified wherever considered necessary to conform to the classifications / disclosures of the current year.