Annual Report 2010-2011 - Gammon India

144
Sr.
No.
Particulars As at
31 st March, 2011
A NNUAL R EPORT I 2010/11
As at
31 st March, 2010
(viii) Disputed Customs Duty liability 0.32 0.32
(ix) Disputed Service Tax Liability 18.61 29.21
(x) Disputed Income Tax – Demand for which the Company Appeals are pending before
Appellant Authority — 3.22
(xi) Counter claims in arbitration matter referred by the Company – liability unascertainable
(xii) There is a disputed demand of UCO Bank pending since 1986, of US$ 436251 i.e. ` 1.72
Crores. Against this, UCO Bank has unilaterally adjusted the Company’s Fixed Deposit of
US$ 30584 i.e. ` 0.12 Crores which adjustment has not been accepted by the Company
(xiii) In respect of Joint Venture and operations in Oman, Gammon India Limited – AL Matar JV,
refer note no. 30
(a) The Contingent Liability detailed hereinabove includes the Group’s share of contingent liability in the joint venture companies amounting
to ` 2.40 Crores (Previous year ` Nil).
(b) Claims against the Company not acknowledged as debt includes:
(i) As per the intimation received u/s Section 143(1) of the Income Tax Act, 1961 for the Assessment year 2007-08, from the Income-tax
department, ` 0.73 Crores is payable by AEL, a subsidiary of the Company. However, the assessing officer has not given credit for
the TDS certificates amounting to ` 1.81 Crores while assessing the tax payable. The original copies of the said TDS certificates were
submitted to the assessing officer on 4th February, 2010 for which acknowledgement from the department has been received. AEL is
of the view that the said order will be rectified after accounting the TDS certificates, hence the liability of ` 0.73 Crores has not been
provided for in their books of accounts.
(ii) An amount of ` 17.77 Crores claimed by the Collector and District Registrar, Rajahmundry, pursuant to the Order dated 15th March,
2005, as deficit stamp duty payable on the Concession Agreement entered into between REL, a subsidiary of the Company and NHAI,
classifying the Concession Agreement as a ‘lease’ under Article 31(d) of the Indian Stamp Act. REL has impugned the Order by way
of a writ petition before the High Court of Andhra Pradesh at Hyderabad. No provision is considered necessary in respect of the said
demand, as the management believes that there is no contravention of the Indian Stamp Act.
(iii) A winding up petition against GLL, a subsidiary of the Company has been filed by a creditor for recovery of ` 1.41 Crores. GLL is
disputing the said amount and has recognised ` 0.17 Crores payable as there are claims and counter claims by both parties. Pending
the final outcome of such proceeding, the claim from the creditor is disclosed as a contingent liability. The management is of the view
that the same would be settled and does not expect any additional liabilities towards the same.
(iv) Demand draft deposited with the Honorable Delhi High Court, for ` 0.70 Crores (Previous year ` Nil) towards 5% of the bid security
for a project of NHAI.
(v) Under the License Agreement (LA), Mumbai Port Trust (‘MbPt’), is entitled to recover electricity charges from ICTPL (a 50% joint
venture of the Company), against the existing Ballard Pier Station (‘BPS’) terminal. Out of the total amount claimed by MbPT, ` 0.19
Crores is disputed by the ICTPL. The matter requires resolution through an expert as per the LA. Management believes that no part
of this ` 0.19 Crores will need to be paid by ICTPL. The share in the contingent liability of the Company stands at ` 0.10 Crores.
(vi) The penalty for non-achievement of Minimum Guaranteed Throughput of approximately ` 4.60 Crores payable to the MbPT as per
the License Agreement has not been provided for by ICTPL in their financial statements because under an arrangement this penalty
would be borne by one of the shareholders in case this amount is ultimately determined to be payable to MbPT. The Company’s share
stands at ` 2.30 Crores.
(vii) Export Commitment in Joint Venture VSPL:
(` in Crores)
Particulars As at
31 st March, 2011
(` in Crores)
As at
31 st March, 2010
Under EPCG Scheme 20.90 18.54
27. Balances in Foreign Bank Accounts are as per ledger and are subject to reconciliation. Cash and Bank Balances include an amount of ` 74.92
Crores (Previous year ` 195.02 Crores) kept as a margin for the guarantees/Bid Bonds issued by overseas subsidiary and joint ventures. Cash &
Bank balances include ` 2.00 Crores (Previous year ` 2.13 Crores) with bank branches in foreign countries relating to certain foreign projects which
are not readily available for use by the Company and are subject to exchange control regulation of the respective countries. The Fixed Deposit
related interest and principal account as at the year-end are as per ledger and are subject to reconciliation, which is under progress.
28. During the F.Y. 2010-2011, search action was initiated against the Company u/s 132 of the Income Tax Act, on a prudent basis an additional tax
provision of ` 17 Crores have been made in accounts of F.Y. 2009-2010.
29. Disclosure under Accounting Standard-19 “Leases”, issued by the Institute of Chartered Accountants of India.
The Company has taken various residential/godowns/office premises (including Furniture and Fittings if any) under leave and license agreements
for periods which generally range between 11 months to 3 years. These arrangements are renewable by mutual consent on mutually agreed
terms. Under some of these arrangements the Company has given refundable security deposits. The lease payments are recognized in Profit and
Loss Account under Rent, Rates and Taxes.