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Notes to Accounts of Stewarts & Lloyds of India Ltd.

Mar 31, 2015

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.


Mar 31, 2013

1.1 (a) 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 current financial year, 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 encased four bank guarantees aggregating to Rs. 5.80 Crores which the Company has not acknowledged in the books, in respect of three 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.

1.1 (b) 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 $ 3.58 Million (equivalent to INR 1 9.45 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.

1.2 (a) Outstanding Bank Guarantees Rs. 1 1,27,24,822 (Previous Year: Rs. 1 0,05,28,052) are 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 noncurrent investments, have a realizable value in the ordinary course of business which is not different from the amount at which it is stated.

(a) Above represents bought out items also which are ultimately used for erection services.

(b) Miscellaneous include items which individually do not constitute more than 1 0% of the total consumption.

The above information has been compiled in respect of parties to the extent to which they could be identified as Micro and Small Enterprises under Micro, Small and Medium Enterprise Development Act, 2006 on the basis of information available with the Company.

2.3 Employees Benefits : Post Employment Defined Contribution Plans :

During the year an amount of Rs. 5,09,025 (201 1 -201 2 : Rs. 8,56,637) has been recognized 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, 1 972". Liabilities with regard to Gratuity Plan are determined by actuarial valuation as set out in Note 23.1 .e.(iii) above based upon which the Company makes contribution to Gratuity Fund.

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.

1.4 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

Newsco International Energy Services Inc. - Fellow Subsidiary

ii) Key Managerial Personnel :

Mr. S P Saha - Chief Executive Officer from 01.04.2012 to 02.09.2012

Mr. S P Saha - Chief Executive Officer & Director from 03.09.2012 to 12.02.2013

Mr. Nilanjan Mukhopadhyay - Chief Executive Officer from 1 2.02.201 3 to 31.03.2013

1.5 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 organizationally as a single unit. Therefore, according to the management, the Company''s operations are carried out in a single segment.

1.6 Previous year''s figures have been re-arranged/re-grouped, where necessary to make the same comparable with the current year''s figures.

Notes : (i) The above Cash Flow Statement has been prepared under the ''Indirect Method'' as set out in the Accounting Standard-3 on Cash Flow Statement prescribed by the Companies Act, 1 956.

(ii) For the purpose of Cash Flow Statement, Cash and Cash Equivalents include Other Bank Balances.

(iii) The Schedule referred to above form an integral part of the Cash Flow Statement.

(iv) Previous year''s figures have been re-grouped/re-arranged wherever necessary.


Mar 31, 2012

1.1 Contingent Liabilities: 31st March 2012 31st March 2011 (Rs.) (Rs.)

Claims not acknowledged as debts:

(i) Disputed Sales Tax* 31,73,906 5,77,098

(ii) Disputed Income Tax 5,73,06,080 3,21,23,300 (iii) Disputed Wealth Tax 3,16,688 3,16,668

(iv) Disputed Service Tax 1,62,13,608 1,62,13,608

1.2 (a) Outstanding Bank Guarantees Rs. 10,05,28,052 (Previous Year: 20,75,18,752) are 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 realisable value in the ordinary course of business which is not different from the amount at which it is stated. 1.3 Consumption of Materials under broad heads :

(a) Above represents bought out items also which are ultimately used for erection services.

(b) Miscellaneous include items which individually do not constitute more than 10% of the total consumption.

1.4 Employees Benefits :

Post Employment Defined Contribution Plans :

During the year an amount of Rs. 8,56,637 (2010-2011 : Rs. 10,91,087) 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 23.1.e.(iii) above based upon which the Company makes contribution to Gratuity Fund.

1.5 In accordance with the transitional provisions of Accounting Standard 15 (Revised 2005), the additional liability arising on the first application of the Standard amounting to Rs. 13,68,549 on account of Leave Encashment is being charged off as an expense over a period of 5 years. The unamortised amount of Rs. Nil (Previous Year : Rs. 2,73,703) has been disclosed as Miscellaneous Expenditure to the extent not written-off (Refer Notes 15 to the Balance Sheet).

1.6 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

Newsco International Energy Services Inc. - Fellow Subsidiary

ii) Key Managerial Personnel :

Mr. S. P. Saha - Chief Executive Officer

1.7 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.

1.8 Previous year's figures have been re-arranged/re-grouped, where necessary to make the same comparable with the current year's figures.

Signatures to Notes 1 to 23.


Mar 31, 2011

1.1 Contingent Liabilities:

* On account of certain reliefs claimed which are under dispute and pending sales tax declaration forms.

** There is a litigation filed by a Sub-Contractor before the Civil Judge, Senior Division No. 3 at Guwahati. The Company has contested the same, inter alia, on the grounds as legally advised that the same is false and frivolous and filed an action for recovery against the same Sub-Contractor which is pending before the Calcutta High Court. Both the litigations are pending and aresub-judice.

1.2 (a) Outstanding Bank Guarantees Rs. 20,75,18,752 (Previous Year: Rs. 28,98,03,259) are secured by a charge created on assets as recited under Secured Loans (Refer Schedule 3).

(b) Tax payments and Tax deducted at source are net off provisions for taxation of Rs. 13,78,30,588 (Previous Year: Rs. 84,70,622).

1.3 (b)Quantitative information on Furnished Products:

* Total Licensed and Installed capacities are the same as in 2009-10.

* Installed capacities have been certified by the Management.

* As units shown in the sales bills relating to Engineering and Procurement are varied and heterogeneous, quantity of turnover in respect of this category has not been shown for which the Company has obtained necessary approval of the Central Government. Quantitative information for opening/closing stocks and purchases of these items also could not be furnished as it is not feasible for the reasons indicated above.

1.4 Details of Dues to Micro enterprises and Small enterprises :

The above information has been compiled in respect of parties to the extent to which they could be identified as Micro and Small Enterprises under Micro, Small and Medium Enterprise Development Act, 2006 on the basis of information available with the Company.

1.5 Employees Benefits:

Post Employment Defined Contribution Plans :

During the year an amount of Rs. 20,33,391 (2009-2010 : Rs. 24,53,1 19) 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 definded 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, moke 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 1 7.1 .e.(iii) above based upon which the Company makes contribution to Gratuity Fund.

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 emploment 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.

1.6 In accordance with the transitional provisions of Accounting Standard 15 (Revised 2005), the additional liability arising on the first application of the Standard amounting to Rs. 13,68,549 on account of Leave Encashment is being charged-off as an expense over a period of 5 years. The unamortised amount of Rs. 2,73,703 (Previous Year : Rs. 5,47,415 ) has been disclosed as Miscellaneous Expenditure to the extent not written-off (Refer Schedule 12 to the Balance Sheet).

1.7 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

ii) Key Managerial Personnel:

Mr. R. N. Basuray - Chief Executive Officer

1.8 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.

1 .9 Previous year's figures have been re-arranged/re-grouped, where necessary to make the same comparable with the current year's figures.


Mar 31, 2010

1. Contingent Liabilities : 31st March 2010 31st March 2009 (Rs.) (Rs.)

Claims not acknowledged as debts:

(i) Disputed Sales Tax* 5,77,098 9,51,543

(ii) Disputed Income Tax 1,79,24,920 63,81,257

(iii) Disputed Wealth Tax 3,16,688 --

(iv) Disputed Service Tax 1,62,13,608 3,10,15,077

(v) Sundry other matters for which court cases are pending** 12,34,000 12,34,000

* On account of certain reliefs claimed which are under dispute and pending sales tax declaration forms.

** There is a litigation filed by a Sub-Contractor before the Civil Judge, Senior Division No. 3 at Guwahati. The Company has contested the same, inter alia, on the grounds as legally advised that the same is false and frivolous and filed an action for recovery against the same Sub-Contractor which is pending before the Calcutta High Court. Both the litigations are pending and are sub-judice.

2. (a) Outstanding Bank Guarantees Rs. 28,98,03,259 (Previous Year: Rs. 31,84,37,792) are secured by a charge created on assets as recited under Secured Loans (Refer Schedule 3).

(b) Tax payments and Tax deducted at source are net off provisions for taxation of Rs. 84,70,622 (Previous Year : Rs. 12,20,00,000) and Fringe Benefit Tax of Rs. Nil (Previous Year: Rs. 52,22,135).

(c) Miscellaneous Expenses include Advances written off Rs. 56,24,004 (Previous Year: Rs. Nil).

3. Employees Benefits:

Post Employment Defined Contribution Plans :

During the year an amount of Rs. 24,53,1 1 9 (2008-2009 : Rs. 36,42,831) has been recognised as expenditure towards Defined Contribution plans of the Company.

Post Employment Defined Benefit Plans :

Gratuity (Funded)

The Companys Gratuity Scheme, a definded 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 employees eligible salary and tenure of employment subject to a maximum limit of Rs. 10,00,000 (Upto 31.03.2009 - Rs. 3,50,000). Vesting occurs upon completion of five years of services. Liabilities with regard to Gratuity Plan are determined by actuarial valuation as set out in Note 1 8.1 .e.(iii) above based upon which the Company makes contribution to Gratuity Fund.

4. In accordance with the transitional provisions of Accounting Standard 15 (Revised 2005), the additional liability arising on the first application of the Standard amounting to Rs. 13,68,549 on account of Leave Encashment is being charged-off as an expense over a period of 5 years. The unamortised amount of Rs. 5,47,415 (Previous Year : Rs. 8,21,127) has been disclosed as Miscellaneous Expenditure to the extent not written-off (Refer Schedule 13 to the Balance Sheet).

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

ii) Key Managerial Personnel:

Mr. R. K. Dutta, Chairman and Managing Director- upto 30th September 2009

Mr. R. N. Basuray-Chief Executive Officer (With effect from 01.10.2009)

6. 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 Companys operations are carried out in a single segment.

7. Previous years figures have been re-arranged/re-grouped, where necessary to make the same comparable with the current years figures.



 
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