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Notes to Accounts of Dredging Corporation Of India Ltd.

Mar 31, 2017

1. ACCOUNTING ESTIMATES:

The preparation of the financial statements in conformity with IndAS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

2. OPERATIONAL INCOME- REVENUE RECOGNITION:

a. Revenue is measured at the fair value of the consideration received or receivable and is reduced for allowances wherever applicable as per the contract.

b. Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. The stage of completion of the contract is determined based on internal assessment/survey.

c. Claims preferred on customers for works/items not contemplated are considered as income on their acceptance.

3. OTHER INCOME:

a. Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the entity and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

b. Interest on Tax refunds are accounted on receipt basis.

4. OPERATIONAL EXPENSES:

a. All operational expenses are charged to revenue under accrual basis.

b. Insurance:

i. Final adjustments to insurance premium paid are considered in accounts on the basis of demands received

ii. Expenses on account of general average claims/damages to ships are written off in the year in which they are incurred.

iii. In respect of hull and machinery insurance claims, the claim is accounted as claims recoverable from underwriters on submission of average adjuster report to the underwriter under operational income. Necessary

adjustments are made to the claims recoverable account as and when the actual claims are received from the underwriters. In respect of other claims, the same are accounted for on realization /settlement of the same by the underwriters and is accounted under operational income.

5. DEPRECIATION:

a. Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method.

b. Freehold land is not depreciated.

c. Dry Dock Expenses:

i. Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is completed is charged to the statement of Profit and Loss.

ii. Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is not completed is capitalized to property plant and Equipment and depreciated as a separate component over its estimated useful life of 2.5 years.

d. The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method as per the useful life prescribed in schedule II of the Companies Act, 2013 except for the following categories of assets in which case the estimated useful life has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support.

e. An item of property, plant and equipment is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

f. Items of Fixed Assets whose cost does not exceed ''5000/- (Rupees five thousand) are capitalized and depreciated 100% during the year.

6. PROPERTY, PLANT & EQUIPMENT:

a. Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Entity’s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.

b. Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.

c. Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss.

d. Dry Dock Expenses: Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is not completed is capitalized to property plant and Equipment.

e. Items of Fixed Assets whose cost does not exceed ''5,000/- (Rupees five thousand) are capitalized and depreciated 100% during the year.

f. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the balance sheet and transferred to profit or loss on systematic and rational basis over the useful lives of the related assets.

7. BORROWING COSTS:

a. As per the transitional provisions given in the notification issued by the Ministry of Corporate Affairs, Government of India dated 31st Mar, 2009 read with the notification dated 9th August,2012, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items.

b. Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset, till the time the asset is put to use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

8. FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currency are recorded at exchange rates prevailing at the dates of the transactions. As per the notification issued by the Ministry of Corporate Affairs dated 31st Mar, 2009, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items. The Company has accordingly aligned its accounting policy based on the above notification. Exchange differences arising out of fluctuation in exchange rates on settlement/restatement at the period end are accounted based on the nature of transaction as under:

i. Short term foreign currency monetary assets and liabilities recognized in the profit and loss account.

ii. Long term foreign currency monetary liabilities used for acquisition of fixed assets: adjusted to the cost of the fixed assets and amortized over the remaining useful life of the asset.

9. INVENTORIES:

a. Stock of spares and stores is valued at lower of weighted average cost and net realizable value.

b. Spares are accounted for as per respective delivery/ shipment terms as material-in transit/ stock accounts, valued as per (a) above and are charged to revenue as and when consumed.

c. Stores and lubricants delivered to crafts during the year are charged to revenue.

10. FINANCIAL INSTRUMENTS:

Financial assets and financial liabilities are recognized when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

11 Initial Recognition:

The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

12. EMPLOYEE BENEFITS:

a. All short-term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.

b. Employee benefits under defined contribution plans comprising of Provident fund, post-retirement medical benefits (wef 01.01.2007) and pension contribution are recognized based on the undiscounted amount of obligations of the company to contribute to the plan.

c. Employee benefits under defined benefit plans comprising of gratuity, leave salary benefits are recognized based on the present value of defined benefit obligation which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognized during the year. Actuarial gains and losses are recognized in the statement of Profit & Loss during the period in which they occur.

d. For defined retirement gratuity benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.

e. Provision for Gratuity, Provident Fund, Post retirement Medical and Pension benefits is funded with separate Trusts formed for the purpose.

13. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:

a. Provisions are recognized when the entity has a present obligation (legal or constructive) as a result of a past event, it is probable that the Entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

b. Contingent Assets and Contingent Liabilities are disclosed by way of notes.

14. TAX EXPENSES:

Provisions for income tax liability is made on operational income as per special provisions relating to shipping companies under the Income Tax Act,1961 on the basis of deemed tonnage income of the company. Provision for Income tax on non-operational income is made as per the provisions of the Income Tax Act 1961._


Mar 31, 2016

1. Buildings include Rs.3.37 lakh (previous year Rs.3.37 lakh) being the cost of two residential flats at Mumbai which are yet to be registered in the name of the Company.

2. As per the requirement of Schedule II to the Companies Act,2013, where cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately for depreciation purpose. Pursuant to this, the company changed its accounting policy during the QE 30/ 06/2015 broadly categorizing the component parts of dredgers into three items i.e.,, 1.Keel and Hull (60% of vessel ’s cost), 2.Plant and Machinery in salt and sea water environment (35% of vessel’s cost), 3.Elecrical /Electronic Equipment (5% of vessel’s cost).However , this was only a broad categorization but could not be componentized. After careful examination , the company is of the view that none of the component part of the fixed asset is considered to be significant as compared to total cost of the asset. Consequently , the charging of depreciation for component parts was not required. Accordingly, restored the last year’s accounting policy for charging depreciation for FY 2015-16 in the last quarter ending 31/03/2016.

3. CSD Dr XVIII had some inherent manufacturing defects and the production/output of the vessel was below the designed output. In view of the under performance of the vessel, the company invoked the performance guarantee for an amount of Rs.27.37Crs given by the builder and the company has taken action to remedy the defects at a cost of Rs.32 Crs. The vessel is expected to be back into operations by June,2016. The management has carried out the impairment test and noted that the value in use is in excess of the carrying cost and hence does not require any impairment provision.

As regards equity investment made in Sethusamudram Corporation Ltd (SCL) amounting to Rs. 3000 lakhs. The Management does not consider any diminution for the value of the investment and the same has been carried as at the end of 31st March, 2016 as the investee company’s (SCL) net worth is more than the equity capity as under:

National stock Exchange of India vide its letter no.NSE/LIST/8500 dated 26/12/2014 advised the company to restate the financial statements for FY 2012-13 suitably on the qualification raised by then statutory auditors of the Company. Aggrieved by the said directions, the Company filed review petition before SEBI vide Lr no.DCI/CS/E.1/2015 requesting to review and reconsider its directions in its letter . SEBI vide its dated 05/11/2015 has decided that the instant qualification has been addressed by the Company in the subsequent financial years and ensured that it is free from such qualification and accordingly it will be treated as adequate compliance with the requirement of SEBI’s directions in their letter dated 26/12/2014

5. 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) Commissioner (Appeals) Vide order no.S.N.P-5-360/CUS/ (ARS)/KPL (port)/2013 dated 30/06/2015 stated that the company is entitled to refund of the entire amount of Rs.1132.81 lakhs custom duty paid by the company. Aggrieved by this order, Assistant commissioner approached the CESTAT, Kolkata for stay of the commissioner orders dated 30/06/2015. CESTAT dismissed the stay petition filed by the department in favour of the company. The company has submitted all the documents for obtaining refund of the amount. This amount has been considered and shown under exceptional items in profit and loss account amounting to Rs.1110.15 lakhs and reduced residual value of Dr-Aquarius by Rs.22.66 lakhs.

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.8755.24 lakhs towards irregular Cenvat credit availed during the period from June, 2005 to March, 2014 and imposing a penalty/interest of Rs.5421.87 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 2009-10 to 2014-15 before the Income Tax Authorities.

f) Physical verification of inventory on board dredger has been carried out in respect of eight dredgers and the same is pending for verification in respect of eight dredgers. Necessary adjustments for surplus /deficit of the items will be made in the accounts soon after completion of physical verification of all the dredgers.

g) 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: 2015-16 2014-15

Employer’s Contribution to Provident Fund (inclusive of Contribution to Pension Fund) 412.83 312

The contributions to employee’s 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 Gol. 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.


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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