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Notes to Accounts of Dredging Corporation Of India Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES:

a . Letters of Credit 3.64 40.85

b. Claims made against the Company not acknowledged as debts 36712.58 18989.13

c . Estimated amount of contracts remaining to be executed on capital account and not provided for 7983.95 1960.51

d. Income Tax Demands received but disputed by the Company 5296.63 3587.00

e . Service Tax Demands received but disputed by the Company 3702.02 7517.12

2. GENERAL

a ) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.

b) The CEGAT issued orders during the year 2001-02 setting aside the earlier orders of the customs Department levying duty of Rs.1132.81 lakhs on the accessories and spares of Dr- Aquarius. The Department while accepting CEGAT order sanctioned the refund of Rs.1132.81 lakhs under section 27 (2) of Customs Act 1962, but ordered to credit the same to consumer welfare Fund. Aggrieved by this order DCI filed an appeal before CESTAT, Kolkata for issuance of necessary directions to the Department for refunding the Customs Duty. Necessary adjustments to capital cost of the dredger will be made on receipt of the refund. c ) The company filed an appeal and an application for stay before the customs, Excise and service Tax Appellate Tribunal against Commission rate's Orders confirming recovery of Rs.4127.51 lakhs towards irregular Cenvat credit availed during the period from june,2005 to March,2013 and imposing a penalty / interest of Rs. 3702.02 lakhs. No provision has been made as the matter is pending before the tribunal.

d) Escalation Claims (Labour / Material) have been preferred on the basis of latest available indices.

e ) Income Tax appeals are pending for the Assessment years 2006-07 to 2012-13 before the Income Tax Authorities. The disputed tax under protest is Rs.134.28 lakhs (Net) has not been paid since the company has given a request for adjustment with the refunds.

f ) During the year the Company received arbitration awards in its favour in respect of the following:

i) Disputes pertaining to capital dredging works in Paradeep Port and the net effect of the decision resulted in income of Rs.566.55 lakhs. ii) Disputes in the matter of capital dredging of flood channel (NDV) resulted in income of Rs.114.10 lakhs.

g) During the year, physical verification of inventory on board dredger have been carried out by the management and noticed surplus items of stock as compared to book value. Pending further analysis for quantifying the value of stock, the same have not been adjusted in the books of accounts.

h) During the year certain changes have been made in the accounting policies in respect of operational income, operational expenses, and inventories for the purpose of better clarity. These changes have no impact on the profit for the year.

i) Disclosure requirements under AS 15 on Employee benefits are given hereunder.

Defined Contribution Plan (Rs,in lakhs)

Contribution to Defined Contribution Plan, recognized as expense for the year, is under: 2014-15 2013-14

Employer's Contribution to Provident Fund (inclusive of Contribution to Pension Fund) 312 322

The contributions to employees provident fund benefits are made to a separate trust. The trust is exempted u/s 17 of the Employees Provident Fund and Miscellaneous Provisions Act, 1952. As per the conditions for grant of exemption, the Company shall make good the deficiency if any, in the interest rate declared by the trust as against the statutory rate declared by GoI.

The provident fund contributions are accounted for on accrual basis.

The Company offers to its employees defined benefit plans in the form of Gratuity, Leave Encashment and Post- retirement Medical Benefits as given under.

Gratuity: This benefit accrues to employee on retirement/ resignation and is based on the number of years of service rendered by the employee. A separate trust is formed for gratuity, which is funded by the Company. Leave Encashment: This benefit represents un-availed leave accruing to the credit of the employees accumulated and paid to shore and floating employees as per respective rules.

Post retirement Medical benefits: The Company is obtaining Medi-Claim Policy for an insurance coverage at the rate of Rs.one lakh per individual per annum. The medi-claim policy covers hospitalization, medical treatment and domiciliary medical treatment. The retired employees and his/her spouse are entitled to this policy subject to an annual payment of Rs.100 per head per annum. The balance annual premium payable towards the medi-claim policies is met by the Company.


Mar 31, 2014

Vide Notification No.46/2012.F.No.178/60/2012-(ITA.1)dated 6th Nov, 2012 Ministry of Finance , Govt.of India, authorised the Company to issue tax-free, seured, redeemable, non convertible bonds to an extent of Rs. 50000 lakhs. The company raised an amount of Rs. 5887.80 lakhs and the same has been utilized for second stage payment of Dr.XXI constructed by IHC Dredgers B.V, Netherlands during the year 2012-13 and commissioned during Feb,2014. The tenure of the bonds is 10 years. The coupon rate for category I, II, III and IV is 6.97% p.a and aditional coupon rate of 0.5% p.a for original allottees under category IV. The Bonds are fully secured by way of charge on DCI Back-hoe dredger.

Sethusamudram Corporation Ltd.(SCL), a Special Purpose Vehicle was incorporated on 06.12.2004 for developing the Sethusamudram Ship Channel Project with Government of India, Tuticorin Port Trust, Ennore Port Ltd., Visakhapatnam Port Trust, Chennai Port Trust, Dredging Corporation of India Ltd., Shipping Corporation of India Ltd and Paradip Port Trust as the shareholders. DCI invested in Equity share capital Rs. 3000 lakh (previous year Rs. 3000 lakh). The dredging work at Palk Strait was suspended from 16-07-2009. The Management does not consider any diminution in the value of the investment and the same has been carried at cost.

Pursuant to the company''s claims for woks executed in sethu project vide its letter No. DCI/LEGAL/SSCP/ARBITRATION/2012 dated 06/06/ 2012, the Ministry constituted a committee vide its letter no.PD/26014/2006-sethu Vol-IV dated 25/09/2013 to assess the actual amount due to DCI. As per the report the amount payble to DCI worked out to Rs. 30897 lakhs(Including installation of BLS on DrAquarius Rs. 3069 lakhs) and the matter is pending in the Ministry. In view of this, provision for doubtful debts has not been made in respect of receivables from SCL amounting to Rs. 8413.91 lakhs.

1. CONTINGENT LIABILITIES:

a. Letters of Credit 40.85 36.02

b. Claims made against the Company not 18989.13 5471.90 acknowledged as debts

c. Estimated amount of contracts remaining 1960.51 59068.58 to be executed on capital account and not provided for

d. Income Tax Demands received but disputed 3587.00 2871.85 by the Company

e. Service Tax Demands received but 7517.12 7310.17 disputed by the Company

2. GENERAL

a) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.

b) The CEGAT issued orders duing the year 2001-02 setting aside the earlier ordes of the customs Department levying duty of Rs. 1132.81 lakhs on the accessories and spares of Dr- Aquarius. The Department while accepting CEGAT order sanctioned the refund of Rs. 1132.81 lakhs under the section 27 (2) of customs Act 1962, but ordered to credit the same to consumer welfare Fund. Aggrieved by this orde DCI filed an appeal before CESTAT, Kolkata for issuance of necessary directions to the Department for refunding the Customs Duty. Necessay adjustments to capital cost of the dredger will be made on receipt of the refund.

c) The company filed an appeal and an application for stay before the customs, Excise and service Tax Appellate Tribunal against Commission rate''s Orders confirming recovery of Rs. 3835.10lakhs towards irregular Cenvat credit availed during the period from june,2005 to March,2010 and imposing a penalty / interest of Rs. 3682.02 lakhs. No provision has been made as the matter is pending before the tribunal.

d) Escalation Claims (Labour and Material) have been preferred on the basis of latest available indices.

e) Income Tax appeals are pending for the Assessment years 2006-07 to 2011-12 before the Income Tax Authorities. The disputed tax paid under protest is Rs. 1365.34lakhs (Net) has not been paid since the company has given a request for adjustment with the refunds.

f) Disclosure requirements under AS 15 on Employee benefits are given hereunder.

Defined Contribution Plan (Rs. in lakhs)

Contribution to Defined Contribution Plan, recognized as expense for the year, is under: 2013-14 2012-13 Employer''s Contribution to Provident Fund (inclusive of Contribution to Pension Fund) 322 348 The Company offers to its employees defined benefit plans in the form of Gratuity, Leave Encashment and Post-retirement Medical Benefits as given under.

Gratuity: This benefit accrues to employee on retirement/ resignation and is based on the number of years of service rendered by the employee. A separate trust is formed for gratuity, which is funded by the Company.

Leave Encashment: This benefit represents un-availed leave accruing to the credit of the employees accumulated and paid to shore and floating employees as per respective rules.

Post retirement Medical benefits: The Company is obtaining Medi-Claim Policy for an insurance coverage at the rate of ''one lakh per individual per annum. The medi-claim policy covers hospitalization, medical treatment and domiciliary medical treatment. The retired employees and his/her spouse are entitled to this policy subject to an annual payment of Rs. 100 per head per annum. The balance annual premium payable towards the medi-claim policies is met by the Company. During the year the Company paid a Premium of Rs. 17.53 lakh (inclusive of member''s contribution) (Rs. in Lakh)


Mar 31, 2012

Sethusamudram Corporation Ltd.(SCL), a Special Purpose Vehicle was incorporated on 06.1.2004 for developing the Sethusamudram Chaneel Project with Tuticorin Port Trust, Ennore Port Ltd., Visakhapatnam Port Trust, Chennai Port Trust, Dredging Corporation of India Ltd., Shipping Corporation of India Ltd., and Paradip Port Trust as the shareholders. DCI invested in Equity share capital Rs.3000 lakh (previous year Rs.3000 lakh). The dredging work at Palk Strait was suspended from 16-07-2009. The Management does not consider any dimunition in the value of the investment and the same has been carried at cost.

a) Trade receivables include Service Tax and education cess thereon amounting to Rs.5674 lakhs. The provision for bad debts is on net dredging charges (Rs.40819 lakh but not on entire Trade Receivables)

b) The Company vide its Letter No. DCI/Legal/SSCP/Arbitration/2012 dt. 06-06-2012 requested Ministry of Shipping (GOI), to appoint a sole Arbitrator under Clause 22 of the contract of realisation of its outstanding dues payable by Sethusamudram Corporation Ltd.

1. CONTINGENT LIABILITIES:

a. Letters of Credit 55.49 145.31

b. Claims made against the Company not acknowledged as debts 5300.15 4272.50

c. Estimated amount of contracts remaining to be executed on capital account and not provided for 107377.19 136854.18

d. IncomeTax Demands received but disputed by the Company 1577.10 1098.12

2. GENERAL

a) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.

b) The CEGAT issued orders during the year 2001-02 setting aside the earlier orders of the Customs Department levying duty of Rs.1132.81 lakhs on the accessories and spares of Dr-Aquarius. The Department while accepting CEGAT order sanctioned the refund of Rs.1132.81 Lakhs under 27 (2) of Customs Act 1962, but ordered to credit the same to Consumer Welfare Fund. Aggrieved by this order DCI filed an appeal before CESTAT, Kolkata for issuance of necessary directions to the Department for refunding the Customs Duty. Necessary adjustments to capital cost of the dredger will be made on receipt of the refund.

c) Escalation Claims for Labour and Material have been preferred on the basis of latest available indices.

d) The Company has suspended the works at Sethusamudram Project w.e.f 16-07-2009. The Company incurred an expenditure of Rs.92823 lakh in execution of Sethusamudram Project and in consideration received Rs.59270 lakh. The Company approached the Ministry for revision of price on the cost plus basis and the same is pending with the Ministry of Shipping (MoS).

e) Income Tax appeals are pending for the Assessment years 2006-07 to 2008-09 before the Income Tax Authorities. The disputed tax paid under protest is Rs.1577 lakhs as per the orders of Assessing Authority.

The Company offers to its employees defined benefit plans in the form of Gratuity, Leave Encashment and Post-retirement Medical Benefits as given under.

Gratuity: This benefit accrues to employee on retirement/ resignation and is based on the number of years of service rendered by the employee. A separate trust is formed for gratuity, which is funded by the Company.

Leave Encashment: This benefit represents un-availed leave accruing to the credit of the employees accumulated and paid to shore and floating employees as per respective rules.

Post retirement Medical benefits: The Company is obtaining Medi-Claim Policy for an insurance coverage at the rate of Rs.one lakh per individual per annum. The medi-claim policy covers hospitalization, medical treatment and domiciliary medical treatment. The retired employees and his/her spouse are entitled to this policy subject to an annual payment of Rs.100 per head per annum. The balance annual premium payable towards the medi-claim policies is met by the Company. During the year the Company paid a Premium of Rs.14.54 lakh (inclusive of member's contribution) (Rs.in Lakh)

f) Due to change in the Accounting Policy - Note XVII- 4(d) in respect of Insurance Claims, there is decrease in profit by Rs.29.33 lakh and due to change in accounting policy - Note -XVII 9 in respect of investments, there is no effect on profit.

g) Figures have been rounded off to decimals of lakh.

h) Figures for the previous year have been re-grouped/re-classified wherever necessary to conform to current year groupings.

 
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