Rights, Preferences and Restrictions Attaching to Equity Shares
The Company is having one Class of Equity Shares having a Par Value of
Rs 5 each. Each Shareholder is eligible for one vote per Share held. The
Dividend proposed by Board of Directors is subject to the approval of
Shareholders in the ensuing Annual General Meeting except in case of
Interim Dividend. In the event of Liquidation, Equity Shareholders are
eligible to receive the remaining assets of the Company after
distribution of all Preferential amount in proportion to their
Other Member Companies are: Bharat Petroleum Corporation Ltd, Hindustan
Petroleum Corporation Limited, Indian Oil Corporation Limited, Indian
Petrochemical Corporation Limited, Chennai Petroleum Corporation
Limited and Oil India Limited
Oil and Natural Gas Corporation of India Limited was member till June,
Total Capital of Petroleum India International is Rs 5500.00 Lakhs and
EIL''s share in Capital of AOP is Rs 500.00 Lakhs.
Details of share in accumulated surplus for investment in Petroleum
India International, an association of person in which the Company is a
member, based on last available annual audited accounts for the
financial year 2010-11 and amount received during the current year is
* Includes Bank deposits having more than twelve months original
maturity of Rs 31694.66 lakhs ( Rs 56488.00 Lakhs)
* Includes Bank deposits Rs 49.56 Lakhs ( Rs 42.11 Lakhs) held as margin
Money/Security against Bank Guarantees.
* Includes Rs 133.77 Lakhs ( Rs 124.38 Lakhs ) in currencies which are
1.1 CONTINGENT LIABILITIES AND COMMITMENTS
i) 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 2092.40 Lakhs (Rs 205.18 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
b) Income Tax/Fringe Benefit Tax assessments have been completed upto
the assessment year 2009-10. Income Tax liability, if any, in respect
of pending assessments for the assessment years 2010-11 and 2011-12
cannot be ascertained although tax as per return/revised return has
been paid in full.
Wealth Tax Assessments have been completed upto the Assessment Year
2009-10. Wealth Tax liability, if any, in respect of pending
assessments for the Assessment Years 2010-11 and 2011-12 cannot be
ascertained although tax on returned wealth has been paid in full.
The Company has filed an application for rectification (u/s 154) of
short credit given for Tax Deducted at Source (TDS) and other
processing mistakes amounting to Rs 664.36 lakhs for Assessment year
Income Tax Department is in appeal for an amount of Rs 632.54 lakhs with
Income Tax Appellate Tribunal against the Commissioner of Income Tax
(Appeals) Orders in Company''s favour u/s 250 for the Assessment Years
2002-03, 2004-05 and 2008-09.
The Company has filed an appeal with Commissioner of Income Tax
(Appeal) for an amount of Rs 11.61 Lakhs against the order of Assessing
Officer u/s 143(3) for the Assessment Year 2009-10.
The Company has filed an appeal with Commissioner of Income Tax
(Appeals) for an amount of Rs 2.55 Lakhs (Rs 2.55 Lakhs) against the
order of Assistant Commissioner of Income Tax (TDS) u/s 201(1) for the
Assessment Year 2009-10.
Company has filed an appeal against demand of service tax (inclusive of
penalty of Rs 31.44 Lakhs) for Rs 62.87 lakhs (Rs 62.87 lakhs) and
interest thereon by Commissioner of Central Excise (Appeals) for the
period 01.4.2002 to 17.4.2006 before Customs, Excise and Service Tax
Appellate Tribunal (CESTAT).
Sales Tax Department is in appeal against the order of Joint
Commissioner (Appeals) in Company''s favour for an amount of Rs 132.53
Lakhs for assessment year 1999-2000 and Rs 116.12 Lakhs for assessment
year 2000-01 respectively before Sales Tax Tribunal, Agra.
The Company is in appeal before Sales Tax Tribunal, Agra against the
demand of Sales Tax Department for Rs 20.05 Lakhs on account of entry
tax for the year 1999-2000 against which company has deposited an
amount of Rs 5.01 Lakhs.
The Company is in appeal before the Appellate Dy. Commissioner,
Visakhapatnam against the demand of Assistant Commissioner, Kakinada
amounting to Rs 28.62 Lakhs on account of VAT for the period March, 11
to June, 11 against which company has deposited an amount of Rs 3.58
Lakhs. After the close of financial year, the Appellate Dy.
Commissioner, Visakhapatnam has allowed the appeal in the Company''s
In respect of above contingent liabilities, it is not probable to
estimate the timing of cash flow, if any, pending the resolution of
Arbitration/Appellate/Court/ assessment proceedings.
a) Estimated amount of contracts remaining to be executed on capital
account (net of advances) and not provided for Rs 6318.34 Lakhs (Rs
b) Uncalled liability on partly paid equity shares of TEIL Projects
Ltd., a joint venture company - Rs Nil (Rs 200.00 Lakhs)
1.2 a) Guarantees issued by the banks and outstanding as on 31st
March, 2012 Rs 30883.13 Lakhs (Rs 33166.77 Lakhs), against
which a provision of Rs 14059.91 Lakhs (Rs 12157.65 Lakhs ) has been made
in the books towards liability for performance guarantees/warranties.
b) Letter of credit outstanding as on 31st March, 2012 Rs 25403.92 Lakhs
(Rs 23031.68 Lakhs).
c) Corporate Guarantees issued by the Company on its behalf for
contractual performance and outstanding as on 31st March, 2012 Rs
19132.50 Lakhs (Rs 7216.00 Lakhs)
1.3 The profit & loss account includes Research & Development
expenditure of Rs 1546.30 Lakhs (Rs 1540.92 Lakhs).
1.4 Land & Buildings include Rs 0.07 Lakhs (Rs 0.07 Lakhs) being amount
invested as share money in Cooperative Housing Societies as detailed
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
1.5 As per guidelines on Corporate Social Responsibility for Central
Public Sector Enterprises issued by Department of Public Enterprises
vide its office memorandum dated 9th April, 2010, the CSR budget by
Central Public Sector Enterprises should be fixed for each financial
year based on Net Profit for previous financial year, and shall not
The Company is fixing the CSR budget each year from Financial Year
2009-10 onwards based on its profit in previous financial year. Till
financial year 2010-11, the company has accounted for CSR expenditure
in books of accounts on the basis of its actual incurrence. To comply
the CSR guidelines which require mandatorily to fix CSR budget each
year based on profits for previous financial year, provision amounting
to Rs 1536.25 Lakhs created till the year 2011-12 which consist
provision for earlier years of Rs 656.19 Lakhs and Rs 880.06 Lakhs for
the year 2011-12.
1.6 The Working Capital facilities from Banks are secured by
hypothecation of stocks, book debts and other current assets of the
Company, both present and future.
1.7 In terms of provision of Accounting Standard (AS -7)
Construction Contracts'', the information in respect of Lumpsum
services/ Turnkey Projects for contract in progress as on 31.03.2012:
a. The aggregate amount of Cost incurred and recognized Profit up to
31.03.2012 Rs 803713.62 lakhs (Rs 599116.47 Lakhs).
b. The amount of advances received Rs 1739.90 lakhs (Rs 1587.06 Lakhs).
c. The amount of retention - Rs 1102.77 Lakhs (Rs 893.48 Lakhs)
1.8 In terms of Accounting Standard 27, Financial Reporting of
Interest in Joint Ventures of the Company'', a brief description of
joint ventures of the Company is:
a) TEIL Projects Limited
A joint venture with Tata Projects Limited was formed in the Financial
Year 2008-09 for pursuing projects on engineering procurement and
construction basis (EPC Projects) in selected sectors such as oil &
gas, fertilizers, steel, railways, power and infrastructure.
The Joint Venture Company formed in this regard having its Registered
Office at New Delhi has an Authorized capital of Rs 1500 Lakhs & Issued,
Subscribed & Paid-up capital of Rs 1000 lakhs.
Of the issued, subscribed and paid-up capital, 4,999,997 shares of Rs
10/- each fully paid-up (24,997 equity shares of Rs 10/- each fully
paid-up and 49,75,000 equity shares of Rs 10/- each, Rs 5.979899 per
share called and paid up) amounting to Rs 500.00 lakhs (Rs 300.00 Lakhs)
are held by the Company, being 50% of paid-up capital of joint venture
Till 31st March, 2011, the joint venture company had accumulated losses
to the tune of Rs 539.05 Lakhs and the company had provided a diminution
in value of investment to the tune of Rs 269.53 Lakhs for its share of
loss in the financial statements for year ending March 31, 2011. During
the current financial year 2011-12, the Joint Venture Company had a net
loss of Rs 213.52 Lakhs and the company has provided a further
diminution in value of its investment to the extent of Rs 106.76 Lakhs
for its share of loss in the financial statements for the year ending
31st March, 2012.
b) Tecnimont EIL Emirates Consultores E Servicos LDA
A joint venture with Tecnimont SPA, Italy was formed for pursuing EPC
Projects in UAE and registered with the Commercial Registry of Maderia
Trade Zone, Portugal during the Financial Year 2008-09.
The company had invested Euro 151620 (Euro 151620) (equivalent to
Indian Rs 100.62 lakhs) being 30% quota amounting to 150000 Euro, out of
total quota of 500000 Euro. The 70% quota amounting to 350000 Euro
(Euro 350000) was invested by other joint venture partner Tecnimont,
The joint venture was formally liquidated & registration cancelled on
4th April, 2011 and proceeds amounting to Rs 74.10 Lakhs net of expenses
were received during the current financial year.
c) labal EILIOT Co. Ltd.
A joint venture with Jabal Dhahran Company Limited Saudi Arabia and IOT
Infrastructure & Engineering Services Limited, Mumbai was formed during
the current financial year for execution of contracts in Saudi Arabia
in the field of oil & gas, non ferrous metallurgy, infrastructure
The joint venture company namely Jabal EILIOT Co. Ltd. was
registered with Dammam Commercial registry, Kingdom of Saudi Arabia.
The Joint Venture Company formed for pursuing its business interests
has an initial capital of SR. 15000000, out of which one third i.e.
5000000 SR. (Equivalent Indian Rs 599.00 Lakhs) was contributed by the
company as its share.
The Company''s share in Assets and Liabilities and Income and
Expenditure related to its interest in TEIL Projects Limited and Jabal
Eiliot Co. Ltd based on their audited financial statements for the year
ended 31st March, 2012 and 31st December, 2011 respectively was as
In respect of Provident Fund the company has a separate irrevocable PF
Trust managing the Provident Fund accumulation of employees. The
Guidance on implementing AS15, Employee Benefits (revised 2005) issued
by Accounting Standards Board (ASB) of ICAI states that benefits
involving employer established provident funds, which require interest
shortfalls to be re-compensated by the employer are to be considered as
defined benefit plans. In this regard, Actuarial valuation as on 31st
March, 2012 was carried out by the Actuary to find out value of
Projected Benefit Obligation arising due to Interest Rate Guarantee by
the company towards Provident Fund. In terms of said valuation the
Company has no liability towards interest rate guarantee as on 31st
Defined Benefit Plan
The company is having the following Defined Benefit Plans:
- Gratuity (Funded)
- Leave Encashment (Funded)
- Post Retirement Medical Benefits (Funded)
- Long Service Awards (Unfunded)
- Other benefits on Retirement (Unfunded)
1.9 In line with Accounting Standard (AS-17) Segment Reporting'',
the Company has (segmented) identified its business activity into two
business segment i.e. Consultancy & Engineering Projects and Turnkey
Projects, taking into account the organizational structure and internal
reporting system as well as different risk and rewards of these
segment. Segment results are given below:-
1.10 The Board of Directors at their meeting held on 28th May, 2012 has
proposed a final dividend of Rs 4 per share for financial year 2011-12
(Rs 4/- per share) subject to approval of shareholders in annual general
meeting. The above is in addition to an interim dividend of Rs 2/- per
share for financial year 2011-12 (Rs 1/- per share) declared and already
1.11 The interest expense includes Rs 116.00 Lakhs (Rs 146.00 Lakhs) on
account of interest on shortfall in advance tax paid computed as per
provisions of Income Tax Act.
ii) Nature of provisions:
a) Contractual obligations represent provision for estimated
liabilities on account of guarantees and warranties etc. in respect of
consultancy & engineering services and turnkey contracts executed by
the Company. The said obligation covers performance as well as defect
liability period defined in the respective contracts.
For turnkey contracts, the estimated liability on account of
contractual obligations is provided at 1% of revenue recognized based
on risk assessment made by the management. For consultancy &
engineering services contracts the estimated liability on account of
contractual obligations is provided as per assessment of probable
liability made by the management based on liability clauses in
b) Corporate Social Responsibility represent provision for estimated
liability on account of amount set aside as a percent of profit earned
in the past year for meeting social obligations as per Department of
Public Enterprise guidelines for Corporate Social Responsibility. The
timing of outflows depends on the progress of various CSR projects
awarded by the Company.
iii) The disclosures in respect of contingent liabilities are given as
per Note No. 2.17.
1.12 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.
1.13 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 of1000
kms per month.
1.14 Pursuant to notification of Revised Schedule VI under the
Companies Act, 1956, the financial statements for the year ended 31st
March, 2012 are prepared as per Revised Schedule VI. Accordingly, the
previous year''s figures are reclassified to make it comparable with the
current year''s classification. Further, Previous year''s figures have
been re-casted and/or regrouped wherever necessary to make them
comparable with the current year''s figures. Figures shown within
brackets in Notes represent previous year''s figures.