| 1 Contingent Liabilities :
(a) Claims not acknowledged as debts :
31st March 31st March
2015 2014
(Rs.) (Rs.)
(i) Disputed Sales Tax * 1,26,78,467 41,89,047
(ii) Disputed Income Tax 6,51,42,191 5,99,80,121
(iii) Disputed Wealth Tax 3,16,688 3,16,688
(iv) Disputed Service Tax 1,67,51,790 1,67,51,790
* On account of certain reliefs claimed which are under dispute and
pending sales tax declaration forms.
(b) The Company has completed all the four contracts at IOCL-Bongaigaon
(IOCL-BGR) and has submitted its final bills and other claims etc.
during the financial year 2012-13, to IOCL-BGR, who is deriving
commercial benefit out of the same. IOCL-BGR without settling the said
final bills and other claims, has unilaterally encashed five bank
guarantees agregating to Rs. 9.42 Crores (previous year: Rs.5.80
Crores) which the Company has considered as recoverables in the books,
in respect of these four contracts, towards their alleged recovery.
Being aggrieved, the Company has initiated the arbitration proceedings
at Indian Council of Arbitration(ICA), New Delhi, in respect of three
contracts, as per terms of the relevant General Conditions of Contract
(GCC) to adjudicate the case and the same is pending settlement.
(c) The Company had exported rubber lined pipes to Konkola Copper
Mines, Zambia (KCM) during 2007 and 2008. The KCM went into
International Arbitration Proceedings claiming damages for the alleged
defects in the supplied rubber lined pipes and the Company was awarded
to pay US $ 3.36 Million plus running interest @1.5% p.a. (total
equivalent to INR 22.92 Crores) approximately based on alleged seven
years guarantee which the Company had never given. Being aggrieved, the
Company has filed an appropriate application at the Competent Court
challenging the award and the same is pending for hearing.
(d) The Company had initiated Arbitrational Proceedings against three
customers for recovery of an amount of Rs.17.91 crores (included in
Trade Rceivables - refer Note No. 13) and also for other damages and
claims. The Company has received favourable order against one customer
(Receivable amount being Rs. 0.12 crores) who has preferred appeal in
Hon'ble High Court at Madras against the said order. The recoverability
of the total amount is subject to the outcome of the
Arbitrational/Court proceedings.
(e) There are few litigations initiated by some sub-contractors
involving Rs. 4.61 crores which have not been acknowledged by the
Company as debts. However, Company had also initiated its counter claim
amounting to Rs. 1.66 crores against some of said sub-contractors which
are pending before various Courts.
(f) There is a demand from Kolkata Port Trust towards alleged interest
on unpaid lease rent for Rs. 3.19 crores which the Company has
disputed in the absence of proper basis for such demand and the same
has not been acknowledged as a debt.
2 (a) Outstanding Bank Guarantees NIL (Previous Year: Rs.
4,81,31,616) were secured by a charge created on assets as recited
under Short-term borrowings (Refer Note 5 to Balance Sheet)
(b) In the opinion of the Board, all assets other than fixed assets and
non current investments, have a value on realisation in the ordinary
course of business at least equal to the amount at which they are
stated.
(c) Pursuant to the eviction order of The Estate Officer, Kolkata Port
Trust, the Company has relocated its facilities from Jhinjhirapole,
Kolkata and Hide Road, Kolkata to Oregram, Burdwan in the State of West
Bengal. However, the asset item of building (Net Block - Rs. 1.24
lakhs) in the said abandoned facilities are now in the category of
disused assets as the same cannot be sold off or otherwise acted upon
due to order of the Hon'ble High Court at Bombay. No impairment has
been considered in respect of these asset as the same has been valued
at a higher figure by a certified engineer.
3 Auditor's Remuneration
Note: Fees for other services do not include Rs. 2,00,000/-(previous
year: Rs. 2,00,000/-) being fees for certification job debited to
parent company, M/s. IOT Infrastructure and Energy Services Ltd.
4 Employees Benefits :
Post Employment Defined Contribution Plans :
During the year an amount of Rs.8,23,565 (2013-2014 : Rs.10,70,986) has
been recognised as expenditure towards Defined Contribution plans of
the Company.
Post Employment Defined Benefit Plans :
Gratuity (Funded)
The Company's Gratuity Scheme, a defined benefit plan, covers the
eligible employees and is administered through a trust fund under group
administration plan. Such gratuity fund, whose investments are managed
by insurance companies/trustees themselves, make payments to vested
employees or their nominees upon retirement, death, incapacitation or
cessation of employment, of an amount based on the respective
employee's eligible salary and tenure of employment as per the
provision of "The Payment of Gratuity Act, 1972". Liabilities with
regard to Gratuity Plan are determined by actuarial valuation as set
out in Note 24.1.g.(iii) above based upon which the Company makes
contribution to Gratuity Fund.
The following Table sets forth the particulars in respect of Post
Employment and other Defined Benefit Plans of the Company for the year
ended 31st March, 2015 and corresponding figures for the previous year:
Net Asset / (Liability) recognised in Balance Sheet including
experience adjustment impact :
The estimates of future salary increases, considered in actuarial
valuations, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The expected return on plan assets is based on actuarial expectation of
the average long term rate of return expected on investment of funds
during the estimated term of the obligation.
5 Related Party Disclosures In accordance with Accounting Standard
18:
List of Related Parties
(i) Parties where control exists :
IOT Infrastructure & Energy Services Ltd.,
(Formerly Indian Oiltanking Ltd.) - Holding Company
IOT Engineering Projects Limited - Fellow Subsidiary
IOT Design & Engineering Ltd. - Fellow Subsidiary
IOT Anwesha Engineering & Construction Limited - Fellow Subsidiary
(ii) Key Managerial Personnel :
Mr. Prabir Kumar Nag - Chief Executive Officer
Mr. Dipankar Banerjee - Chief Financial Officer
Mr. Samir Bhadra - Company Secretary
6 The Company has accumulated losses of Rs.48.20 Crores as at 31st
March, 2015 and its net worth as at that date is negative by Rs. 36.22
Crores. All the cash credit accounts had become non-performing assets.
The Company with the help of its parent company has entered into
compromised settlement with its bankers and the compromised amount have
been duly discharged during the year. These events or condition cast
significant doubt on the company's ability to continue as a going
concern. However, the management is making a detailed evaluation of the
current situation, including assessment of potential reschedulement /
renegotiations with creditors. Accordingly, the Financial Statements
have been prepared on the basis that the Company is a going concern and
that no adjustments are required to the carrying value of assets and
liabilities. However, on the basis of the audited accounts as on 31st
March 2014, the Company has been referred to the Board for Industrial
and Financial Reconstruction (BIFR) by the management on 1st October,
2014 and the same has been duly registered on 24th February, 2015.
7 Liability no longer required under Other Income (Note no. 18)
includes reversal of prior period interest of Rs. 359.42 lacs (previous
year: Nil) in view of compromise settlement with all the lending banks.
8 During the year 2014-15 depreciation has been provided in the
accounts as per Schedule II of the Companies Act, 2013 which has been
made effective from 1st April 2014. Accordingly, on transition,
i) When the remaining useful life of an asset is nil, the carrying
amount less residual value of the asset is depreciated in full and
adjusted against opening balance of retained earnings to the extent of
Rs. 5.03 lacs.
ii) For other assets, the carrying amount less residual value is
depreciated over remaining useful life of the assets. Consequently,
depreciation for the year ended 31st March 2015 is increased by
Rs.27.65 lacs.
9 The Company is primarily engaged in execution of erection
projects, which, in most cases involve supply of materials (procured or
manufactured). Manufactured items are also supplied for servicing of
refurbishment projects of clients and in a few cases to other
customers. The management considers the entire activity process to be
an integrated one. Further, the Company is managed organisationally as
a single unit. Therefore, according to the management, the Company's
operations are carried out in a single segment.
10 Previous year's figures have been re-arranged / re-grouped, where
necessary to make the same comparable with the current year's figures.
| 