Engineers India

1.  Contingent Liabilities
 
 A) Claims against the Company not acknowledged as debt.
 
 i) Commercial claims pending in the Courts or lying with Arbitrators
 amounting to Rs.  720.42 Lakhs (Rs. 597.91 Lakhs).
 
 ii) Few cases relating to the employees/others are pending in the Court
 against the Company, in respect of which the liability is not
 ascertainable.
 
 B) Estimated amount of contracts remaining to be executed on capital
 account (net of advances) and not provided for Rs 352.87 Lakhs (Rs
 285.33 Lakhs).
 
 C) Income Tax assessments have been completed up to the assessment year
 2005-2006. Income Tax liability, if any, in respect of pending
 assessments for the assessment years 2006-2007 and 2007-2008 cannot be
 ascertained although tax as per return/revised return has been paid in
 full.
 
 Income Tax Department is in Appeal for an amount of Rs.526.51 Lakhs
 with Income tax Appellate Tribunal against the CIT (Appeals) order in
 EILs favour u/s 148/143(3) for the Assessment year(s) 1996-97 and u/s
 143(3) for assessment year 2003-2004.
 
 Wealth Tax assessments have been completed up to the assessment year
 2005-2006. Wealth tax liability, if any, in respect of pending
 assessments for the assessment years 2006-2007 & 2007-2008 cannot be
 ascertained although tax on returned wealth has been paid in full.
 
 Company has filed an appeal against demand of Service Tax for Rs.5.97
 Lakhs and interest/penalty thereon by Commissioner, Service Tax, Delhi
 in the Financial Year 2004-05 before the Customs, Excise and Service
 Tax Tribunal (CESTAT). In this regard, company has approached the
 Committee on Disputes for permission to pursue the matter under dispute
 before the. Customs, Excise and Service Tax Tribunal (CESTAT).
 
 D) Guarantees issued by the banks and outstanding as on 31st March,
 2008 Rs.49423.06 Lakhs (Rs.48654.21 Lakhs) against which a provision of
 Rs. 8232.47 Lakhs (Rs. 5285.85 Lakhs) has been made in the books
 towards liability for performance guarantees /warranties.
 
 E) Letter of credit outstanding as on 31st March, 2008 Rs 733.42 Lakhs
 (Rs. 43.64 lakhs).
 
 Other Member Companies are: Bharat Petroleum Corporation Ltd,
 Bongaigaon Refinery and Petrochem Limited, Kochi Refineries Limited,
 Hindustan Petroleum Corporation Limited, IBP Co. Ltd, Indian Oil
 Corporation Limited, Indian Petrochemical Corporation Limited, Chennai
 Petroleum Corporation Limited and Oil and Natural Gas Corporation
 Limited.
 
 (*) The amount is on account of adjustment of members surplus as
 agreed by member due to induction of Indian Oil Corporation Limited.
 
 2(i) Jobs in respect of which terms have not been settled and/or scope,
 of work has not been clearly defined, direct cost incurred thereon
 amounting to Rs.6.98 Lakhs (Rs.7.71 Lakhs) have been carried forward as
 Work in Progress (Refer item 3 (A) (a) of Accounting Policies).
 
 (ii) Jobs with lumpsum price, where the physical progress of work is
 less than 25 per cent, the direct cost incurred thereon amounting to
 Rs. 3101.90 Lakhs (Rs. 1512.57 Lakhs) have been carried forward as Work
 in Progress.  (Referitem 3 (A) (b) of Accounting Policies).
 
 3.  The Balances of certain parties account under Sundry Debtors, Loans
 & Advances, Security Deposits and Sundry Creditors are subject to
 confirmation.
 
 4.  In opinion of management, current assets, loans and advances shall
 have a value on realization in the ordinary course of business at least
 equal to the amount at which they are stated in the Balance Sheet and
 provision for all known liabilities have been made and contingent
 liabilities disclosed properly.
 
 5.  Pursuant to Show Cause Notice received from Custom authorities on
 account of imports of equipments for the Project of N11 & N12 Oil Well
 Platform of ONGC, the Company had approached Custom and Central Excise
 Settlement Commission in the previous year admitting part liability to
 the tune of Rs.2309.81 Lakhs. The same along with interest thereon was
 duly provided for in the previous year pending order of Settlement
 Commission.
 
 During the year, Custom and Central Excise Settlement Commission has
 passed Order determining the additional Custom Duty liability at Rs.
 4277.21 Lakhs with interest@ 10% per annum thereon and penalty of Rs.
 10.00 Lakhs on the Company. The same has been deposited and additional
 impact on account of Custom Duty of Rs. 1967.40 Lakhs along with
 interest and penalty has been charged to Profit & Loss Account during
 the year.
 
 In terms of agreement entered into by the Company with its
 sub-contractors, all Custom Duty liabilities etc., as determined by the
 Custom authorities are recoverable from such sub-contractors and
 accordingly, the Company has lodged its claim on the sub-contractors.
 The Company has withheld the balance dues to the sub-contractors
 amounting to Rs. 4048.08 lakhs. The sub-contractors have raised
 disputes on their obligations on this account and have invoked
 arbitration clause under the sub-contract with them. Pending the
 outcome of arbitration proceedings, the Company has not accounted for
 the amount of its claim lodged on the sub-contactors on this account.
 
 6.  The Freehold land at Gurgaon costing Rs. 245.47 lakhs (245.47
 Lakhs) is not registered in the name of the company as the conveyance
 deed in respect thereof have not been executed in favour of the
 company. The registration charges in respect of same are not provided
 for being unascertainable.
 
 7.  The profit & loss account include Research & Development
 expenditure of Rs.680.19 Lakhs (Rs.  653.97 Lakhs).
 
 8.  The pay revision for employees is due w.e.f 01/01/2007. Necessary
 impact for current financial year on this account as estimated has been
 considered in the books of accounts.
 
 9.(i)During the year, in terms of Accounting Standard 15 Revised
 AS-15 on Employee Benefits, company has provided actuarial
 liability of Rs. 363.51 Lakhs for Long Service Award, a defined benefit
 plan. In terms of provisions of AS-15, transitional liability till
 31.03.2007 of Rs. 199.47 Lakhs (net of deferred tax of Rs. 102.71
 lakhs) has been adjusted against General Reserve. Due to adoption of
 AS-15, profit for the year is lower by Rs. 61.33 lakhs, (ii)Due to
 adoption of AS-1 5 (Revised) voluntary retirement expenses incurred
 have been amortized over a period of five years or over a period till
 31st March, 2010 whichever is shorter, instead of over a period of five
 years as was being done till last year.
 
 This has resulted in profit for the year and Miscellaneous expenditure
 (to the extent not written off or adjusted) being lower by Rs. 0.56
 lakhs.
 
 (iii) Company during the year has provided liability for certain
 retirement benefits based upon actuarial liability which was not being
 provided for till last year. This has resulted in profit for the year
 being lower by Rs. 135.20.  Lakhs (Rs. 127.05 Lakhs pertaining to prior
 period and Rs. 8.15 Lakhs for the year.)
 
 10.  Land & Buildings include Rs.0.07 Lakhs (Rs.0.03 Lakhs) being
 amount invested as Share Money in Cooperative Housing Societies as
 detailed below:
 
 Twintowers Premises Cooperative Society Ltd., Mumbai
 
 10 ordinary shares of Rs.50/- each fully paid.
 
 Gardenview Premises Cooperative Society Ltd., Mumbai
 
 10 ordinary shares of Rs.50/- each fully paid.
 
 Heera Panna Towers Cooperative Housing Society Ltd., Vadodara
 
 10 ordinary shares of Rs.50/- each fully paid.
 
 Suflam Cooperative Housing Society. Ltd., Ahmedabad
 
 8 ordinary shares of Rs.250/- each fully paid.
 
 Darshan Co-operative Society Ltd., Vadodara
 
 80 ordinary shares of Rs. 50/- each fully paid
 
 11.  There is no impairment of cash generating assets during the year
 in terms of Accounting Standard (AS-28) Impairment of Assets.
 
 12.  Provisions no longer required written back for Rs. 1144.47 Lakhs
 (Rs.2551.39 lakhs) under head Other Income represents contractual
 obligations written back in respect of contracts for which obligation
 under respective contracts is completed.
 
 13.  Advances under Current Liabilities include adjustment in turnover
 amounting to Rs.  36175.49 Lakhs (Rs. 17638.69 lakhs) in terms of
 Accounting Policy 2 & 3 of Schedule- I.
 
 14.  Information regarding imports and foreign exchange earnings,
 expenditures, etc.  (Excluding exchange difference on conversion of
 foreign currency).
 
 15.  Aggregate value including,reserves of unquoted investment in
 subsidiaries is as under: EIL ASIA PACIFIC SDN BHD, AS ON 31/12/2007-
 Rs44.22 LAKHS CERTIFICATION ENGINEERS INTERNATIONAL LIMITED, AS ON
 31/03/2008 Rs.  2755.74 LAKHS.
 
 16.  For Lumpsum/Lumpsum Turnkey Projects, balance efforts / cost
 required to complete the jobs are as assessed by the management.
 
 (Information furnished in Note No.  17, 18, 19 and 20 above is as
 certified by Management and relied upon by Auditors).
 
 17.  Provision for tax on proposed dividend has been made after
 adjusting tax of Rs.21.24 lakhs on proposed dividend by Certification
 Engineers International Limited, a wholly owned subsidiary of the
 Company.
 
 18.  In terms of provision of Accounting Standard (AS-7) Construction
 Contracts, for Lumpsum / Lumpsum Trunkey Projects for contract in
 progress as on 31.03.2008:
 
 a.  The aggregate amount of cost incurred and recognized Profit up to
 31.03.2008 Rs. 295101.41 Lakhs (Rs. 251 061.76 Lakhs).
 
 b.  The amount of advances received Rs. 11814.23 Lakhs (Rs. 9777.36
 Lakhs).
 
 c.  The amount of retention Rs. Nil (Rs. 42.47 Lakhs)
 
 19.  Company has not received any information from any of its suppliers
 of their being a small-scale industrial unit. Based on this
 information, there are no amounts due to small-scale industrial
 undertaking, which are outstanding for more than 30 days as on 31st
 March, 2008 (Rs. NIL).
 
 20.  In terms of Section 22 of the Micro, Small and Medium Enterprises
 Development Act 2006, the outstanding to these enterprises are required
 to be disclosed. However, these enterprises are required to be
 registered under the Act. In the absence of the information about
 registration of the Enterprises under the above Act, the required
 information could not be furnished.
 
 21.  Remuneration to Chairman & Managing Director and full time
 Directors are as per their appointment letters from the Ministry of
 Petroleum & Natural Gas, Government of India, New Delhi. They are also
 allowed to use the staff car for private journeys upto a ceiling of
 1000 kms per month.
 
 22.  Previous years figures have been recasted and/or regrouped
 wherever necessary to make them comparable with the current years
 figures. Figures shown within brackets in Schedule J represent
 previous years figures.