annual report 2008-09
TRANSCRIPT
Sarthak BehuriaChairman
A W Lokhorst
A Spaepen
M G Bhide
B N Bankapur
G C Daga
S C Jain
Jayanta BhuyanManaging Director
Board of Directors
President Finance & Company Secretary
Auditors
Jatin Mavani
Lodha & Co.
1
Thirteenth Annual Report 2008-09
IOT Terminalling, Construction and UpstreamBusiness Presence
Owned Terminals
BOOT Facilities
Build & Operate Terminals
O&M Terminals
EPC & Construction
Upstream Services
Overseas Offices
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Thirteenth Annual Report 2008-09
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2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
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Consolidated PBT (Rs. Crores)
Consolidated PAT
Consolidated Revenue
Consolidated Financials
Financial Ratios
Ratios 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09
Return on Equity % 10.71 9.01 2.62 9.30 11.42 13.52 12.21 13.93 25.93
Debt Equity Ratio Times 1.04 0.97 1.10 1.12 1.32 0.92 0.85 0.60 1.08
Current Ratio Times 0.70 0.99 1.23 1.76 1.88 1.98 1.05 1.41 1.73
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2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
Shareholder Funds Debt Funds (Rs. in Crores)
Revenue
Please see different scales for Revenue and PBT/PAT
PBT/PAT
Our Bankers
• State Bank of India • HDFC Bank Ltd. • Kotak Mahindra Bank Ltd. • Bank of Novascotia • DBS Bank Ltd. • Deutsche Bank • YES Bank Ltd. • ICICI Bank Ltd. • Allahabad Bank • Bank of Maharashtra • State Bank of Bikaner & Jaipur
4
DIRECTORS’ REPORT
The Directors take pleasure in presenting the Thirteenth Annual Report of the Company for the
financial year ended March 31, 2009.
Rs. in Crores
Consolidated Standalone
2008-09 2007-08 2008-09 2007-08
Income From Operations 1588.09 1,095.23 1040.60 843.34
Profit before tax 180.00 78.48 70.67 51.89
Provision for taxation:Current 53.42 22.99 26.02 18.20Deferred (4.14) (0.50) (1.33) (1.24)Fringe Benefit Tax(FBT) 1.05 0.88 0.60 0.63
______ ______Profit after tax 129.67 55.11 45.37 34.28
______ ______Balance brought forward from earlier years 83.03 52.74
Profit available for appropriation 128.40 87.03
Appropriations:
Transferred to Debt Redemption Reserve 4.00 4.00
Balance carried to Balance sheet 124.40 83.03
Less : Minority Shareholders Interest 33.23 7.62
Profit after Shareholders Interest 96.44 47.49
During the year IOT (Standalone) achieved an all time highest Revenue of Rs. 1040.60 crores and
profit before tax (PBT) of Rs. 70.67 crores as against Revenue and profit before tax (PBT) ofRs 843.34 crores and Rs. 51.89 crores achieved during the last financial year, thus recording
growth of around 23% and 36% in Revenue and PBT respectively.
The Company has opted to present Consolidated Financial Statements to reflect the consolidated
strength and growth as a group. These statements are prepared in line with the Accounting
Standards AS-21 and AS-27 of Institute of Chartered Accountants of India, and are based on
financial statements of the Company, its subsidiaries and joint ventures.
On a consolidated basis IOT group of companies achieved a Revenue of Rs. 1588.57 crores and PBT
of Rs. 180 crores reflecting magnificent growth of around 45% and 129% respectively.
The Company is on a fast and profitable growth path and needs substantive funds for timely
funding of its high potential growth plans, hence no dividend is recommended.
In order to embody and reflect the IOT's diversified portfolio consisting of Terminalling, Aviation
Logistics, Engineering Procurement and Construction (EPC), Design and Engineering and
Upstream Services and future plans in new sectors like Power and Bio-energy, the name of the
Company was changed from Indian Oiltanking Limited to IOT Infrastructure & Energy Services
Limited with effect from 1st December 2008 pursuant to the approval of shareholders and the
Registrar of Companies, Mumbai.
FINANCIAL RESULTS
DIVIDEND
CHANGE OF NAME
5
Thirteenth Annual Report 2008-09
OPERATIONS
SUBSIDIARY COMPANIES & JOINT VENTURES
Terminalling
The Terminalling business achieved a quantum jump with the
addition of five Terminals of HPC on the Mundra-Delhi pipeline, for
Operation and Maintenance. With this significant addition, IOT now
has 17 Terminals with a total capacity of 1.1 million cbm. The LPG
Terminal, at Chennai is successfully catering to the requirements of
Chennai Petroleum Corporation Ltd. (CPCL).
Engineering, Procurement and Construction Services (EPC)
During the year, IOT won the EPC contract for the Viramgam
Terminal in Gujarat from Cairn Energy India, a private
sector upstream major. With the volatile global economy,
unstable financial markets, spiralling interest rates,
liquidity crunch and escalating material costs collectively
affecting viability of major projects in the region, IOT is
simultaneously executing three major contracts collectively
valued over Rs. 2000 crores and has achieved significant
progress in all.
Balancing out predominance of PSU Contracts with more
orders from private sector and effective management of
EPC risks with strong systems, structures, practices and strategies will be the key challenges in the
time to come.
Upstream Services
Upstream Services business got its first major head-start with the
successful acquisition of Newsco Asia, a Canadian company with
strong domain expertise in Directional and Horizontal Drilling
Services, with all its Asia based assets and rights to existing and
future business in India, South East Asia and Middle East.
Newsco Asia stands at the threshold of a rapidly expanding
market. The marketing and business development strategy will
focus on the markets in India, Indonesia and the Middle East for
aggressively providing world class services at competitive costs
with a committed objective to achieve accelerated profitable
growth.
The Seismic Services business comprising of Data Acquisition, Processing and Interpretation is
being initially developed in an alliance with an Indonesian partner. IOT has already won the Oil
India Ltd. contract for acquisition of 2D Seismic Data at Karbi Anglong, Assam.
IOT's subsidiaries and joint ventures have been strategically positioned in the Terminalling, EPC
and Upstream Services segments. These companies have witnessed outstanding growth so far and
have drawn up ambitious plans in line with the strategic intent of IOT to grow both organically as
well as inorganically. In terms of Section 212 of the Companies Act 1956, the accounts together
with report of Directors' and the Auditor's Report of the company's subsidiaries form part of this
report.
6
The performance of IOT group companies is summarized below:
IOT Engineering Projects Ltd. (IOTEP)
IOTEP has successfully established an excellent and growing
reputation in the market in just over a year. As of March 2009, its
order book position reached Rs. 500 crores with orders from some of
the best known names in the Indian industry, both from private and
public sectors. During the year the Company achieved Revenue and
PBT of Rs. 146.89 crores and Rs. 9.68 crores respectively.
IOT Anwesha Engineering & Construction Ltd. (IOTAEC)
Post acquisition by IOT, during 2008-09 IOTAEC doubled its turnover
to reach Rs. 59.51 crores and registered more than 400% increase
in PBT to Rs. 10.18 crores and continues its strong growth with an
Order Book of Rs. 100.00 crores. IOTAEC has also won contracts for
Tankage and fabrication jobs at Oman, which are proposed to be
carried out through a subsidiary incorporated at Oman in
association with local partners.
Stewarts & Lloyds of India Ltd. (S&L)
During the year S&L achieved Revenue and PBT of Rs. 96.07 crores and Rs. 3.02 crores
respectively.
IOT Design & Engineering Ltd. (IOTDE)
IOTDE, promoted as a wholly owned subsidiary for the purpose of
developing and acquiring in-house design engineering capabilities is,
providing pre-bid and post-award design and engineering support to
IOT's EPC group and leveraging IOT's captive in-house business to gain
useful experience and cross the pre-qualification barriers to get outside
business in India and abroad.
During the year IOTDE achieved Revenue & PBT of Rs. 19.76 Crores and
Rs. 0.85 Crores respectively.
IOT Engineering & Construction Services LLC, Oman (IOTECS)
IOTECS completed the first phase of the project for construction of storage tanks and terminal
facilities at Sohar, Oman ahead of schedule and registered Revenue and PBT of Rs. 351.84 crores
and Rs. 116.65 crores respectively in the financial year 2008-09.
IOT Engineering and Construction Services Pte. Ltd., Singapore (IOTECS, Singapore)
IOTECS, Singapore, facilitated IOT's entry into the upstream sector through the acquisition of the
Asia Pacific business of Newsco Directional & Horizontal Drilling Services Inc. and was also
instrumental in winning of the seismic survey contract by IOT. IOTECS Singapore is playing a vital
role in setting up of IOT's Directional / Horizontal Drilling and EPC business services in Indonesia
through a subsidiary and is potentially leveraged for raising funds from the financial hub of
Singapore.
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Thirteenth Annual Report 2008-09
Newsco Directional & Horizontal Drilling (Asia) Inc. (Newsco Asia)
IOT currently holds 49% stake in Newsco Asia through IOT Canada, a 100% subsidiary of IOT
incorporated in Canada for the acquisition of Asia Pacific business of Newsco Directional &
Horizontal Drilling Services. IOT Canada will acquire the balance stake in phases over a period of
three years.
For the financial year ended on 31st March 2009, Newsco Asia registered Revenue and PBT of
Rs. 24.79 crores and Rs. 6.41 crores respectively.
Joint Ventures
Zuari Indian Oiltanking Ltd (ZIOTL)
The 50:50 joint venture company of IOT and Zuari
Industries is operating the 64,000 KL capacity
independent storage terminal at Goa to meet the
emerging market demands in the west coast of India.
During the year 2008-09, ZIOTL achieved a turnover of
Rs. 16.28 crores and profit before tax (PBT) of Rs. 5.96
crores.
IndianOil Skytanking Ltd (IOSL)
IOSL, the SPV formed under the joint venture with Indian Oil
Corporation and Skytanking GmbH for the construction of Open
Access Aviation Fueling facility for Bangalore International Airport
Ltd. (BIAL), successfully commenced operations achieving a
landmark entry of “open access” system in Aviation refuelling
business in India. IOSL is competently and cost effectively
meeting Aviation fuelling needs winning appreciation from
Airlines and customers
Efforts are continuing to identify opportunities for entry into the non-conventional energy and
power sector. New strategic acquisitions will be aggressively explored to gain pre-qualification and
capabilities and also for entering into new markets in Middle East, South East Asia and Africa.
Terminalling
Oil refining and Oil exploration companies in India have started
responding positively to the idea of outsourcing the Operation &
Maintenance of their existing and upcoming Terminals. IOT is
persistently working on these opportunities.
The key focus areas include expansion of existing capacities while
sustaining and improving profitability in the face of rising EPC and
Operating costs, developing innovative financial models to hedge the
risks of Capital and Operating cost escalations, funding of large
investment needs of new Projects and strategic focus towards
effectively countering emerging competition from traditional
(Terminalling) and non-traditional (EPC/ Infrastructure companies)
players for BOO/ BOOT/BO Terminalling projects.
STRATEGIC FOCUS
8
Engineering Procurement and Construction (EPC )
Intensified focus on Middle East market would be a most
important objective of the IOT EPC group in the near future,
specially in sectors like Terminals, Off-sites and Utilities, Cross
Country Pipe Lines, Oil Field Crude Gathering Stations and
Associated Facilities, Aviation Fuel Station and Cement, where
capabilities are clearly established and excellent PTR exists.
In India, in addition to targeting large jobs in the areas of
established core competence, IOT's strategic intent is to enter into
high potential new areas like Process Plants, Power Plants,
Petrochemicals, Offshore Fabrication, Water Treatment &
Desalination Plants with carefully identified and nurtured strategic
alliances.
Upstream Services
Expansion of Directional Drilling business with further growth in India and major participation in
Indonesia and Middle East, acquisition of new technologies and entry into the lucrative
conventional drilling business through Newsco Asia will be the key focus areas.
The Seismic Services business being initially developed in alliance with an Indonesian partner
offers attractive scope with enhanced operations in the oil sector. Seismic Data Processing and
Interpretation are also proposed to be added as ongoing services.
The financial year 2008-09 saw a spurt in interest rates, mainly on account of the Central Bank's
effort to absorb liquidity in order to contain the high inflation. The developments in USA and Europe
have also affected the domestic market, primarily due to withdrawal of funds by FIIs and
others.Despite the spurt in the interest rates, the average term loan rates availed by IOT is much
below the current market levels. Fitch ratings, an internationally accredited rating agency,
continued their rating of “F1+” (best in the category) for IOT for the short term papers. It has also
assigned a fresh rating “AA-” for the long term instruments (“AAA” is the highest in this category).
A number of leading banks, financial institutions and Private Equity funds are in continuing
dialogue with IOT, confirming keen interest to fund IOT's business expansion, including future
acquisitions.
The Company has well-established internal control systems in all functional areas, which are
reviewed periodically by the Internal Auditors. The ERP system for the functions of Finance and
Accounting, Contracting and Purchasing, Project Costing and Project Billing, Fixed Assets and
Inventory Management is fully stabilized.
The replacement of the existing Terminal Management System with the development and
implementation of new system is being progressed.
Recruitment, Retention and Training & Development (T&D)
continue to be a prime focus areas to successfully meet the
challenges of the economic slowdown and for achieving best
feasible retention of key employees. A comprehensive Training
Need Analysis was carried out as an intensive internal exercise,
with the help of a professional agency, which forms the basis for
the Training Calendar for 09-10.
FINANCIAL INITIATIVES
INTERNAL CONTROL SYSTEMS
HUMAN RESOURCES
9
Thirteenth Annual Report 2008-09
HR deployment rationalization by eliminating overlap and redundancies with special focus on
succession planning for key positions coupled with improved internal communication and brand
building would be most vital in addition to strengthening of various HR processes.
During the year the 97,480 shares were allotted under the Employee Stock Option Scheme of the
Company launched in 2007.
Achieving highest quality standards has been the objective of your
Company since inception. The Navghar terminal is ISO 9002
certified for Quality Management Systems. The Bulk LPG terminal
at Chennai also has ISO 9001:2000 and ISO 14001:1996
certifications for Quality and Environmental Management
Standards.
The EPC division of the Company is ISO-9001-2000 certified and
has also secured OHSAS (Operational Health & Safety Assessment
System) 18000-2007 certification from DNV International,
Norway, towards safety management system.
The nature of operations of the Company demand high standards of
safety, security and environment protection. Thus the Company has
documented and successfully implemented comprehensive Health,
Safety, Security and Environment (HSSE) Policy Manuals, which stress
the importance of safe practices and integration of safety, security,
occupational health and environment protection in day-to-day
operations. The Terminals posted zero reportable incidents. 25 new
Safety Health and Occupational Procedures (SHOP) were developed for
EPC and Terminals and revision of HSSE Plan was carried as per OHSAS
standards. The EPC sites continue to give an enhanced HSSE
performance with zero LTI's.
The change in accounting policy on account of notification relating to AS 11 (effects of changes in
foreign exchange rates) issued by the Central Government under the Companies (Accounting
Standard) Rules 2006 has been given effect in the financial statements for the year.
The Audit Committee of the Board consisting of four directors, Mr. A. W. Lokhorst, Mr. Jayanta
Bhuyan, Mr. G. C. Daga and Mr. S. C. Jain reviewed the critical aspects of Corporate Governance,
effectiveness of controls, compliance with statutes and necessary actions were initiated based on
need.
In the opinion of the Directors, the notes to accounts are self-explanatory and adequately explain
the matters which are dealt with in the Auditors’ Report.
ESOP SCHEME
QUALITY
HEALTH, SAFETY, SECURITY AND ENVIRONMENT (HSSE)
CONSOLIDATED FINANCIAL STATEMENTS
AUDIT COMMITTEE
AUDITORS’ REPORT
10
DIRECTORS
DIRECTORS RESPONSIBILITY STATEMENT
AUDITORS
FIXED DEPOSITS
PARTICULARS AS PER SECTION 217(2A) OF THE COMPANIES ACT, 1956
CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION
ACKNOWLEDGEMENT
Mr. G. C. Daga and Mr. August Spaepen retire from the Board by rotation and are eligible for re-
appointment.
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:
• In the preparation of the annual accounts, the applicable accounting standards have been
followed along with proper explanation relating to material departures;
• The Directors have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company at the end of the financial year and of the profit and loss of
the Company for that period;
• The Directors have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities;
• The Directors have prepared the annual accounts on going concern basis.
M/s. Lodha & Co. Chartered Accountants, the auditors of the Company, retire at the ensuing
Annual General Meeting and being eligible, offer themselves for re-appointment.
The Company has not accepted any deposits from the public.
Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies
(Particulars of Employees) Rules, 1975, forms part of this report.
The details as required under Companies (Disclosure of Particulars in Report of Board of Directors)
Rules, 1988 are given as Annexure to the Directors Report.
Your Directors wish to place on record their highest appreciation for the outstanding contribution
from the entire team of the Company.
For and on behalf of the Board
Sarthak BehuriaChairman
Date: 15th May 2009Place: London
Jayanta BhuyanManaging Director
11
AUDITORS’ REPORT
To
The Members of
IOT INFRASTRUCTURE & ENERGY SERVICES LIMITED (FORMERLY KNOWN AS INDIAN
OILTANKING LIMITED)
1. We have audited the attached Balance Sheet of IOT Infrastructure & Energy Services Limited
(formerly known as Indian Oiltanking Limited) as at 31st March, 2009 and also the Profit and
Loss Account & the Cash Flow Statement for the year ended on that date annexed thereto.
These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956
(hereinafter referred to as the “Act”), we annex hereto a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:
(a) We have obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company
so far as appears from our examination of those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this
report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt
with by this report comply with the Accounting Standards prescribed by Companies
(Accounting Standards) Rules, 2006, to the extent applicable;
(e) On the basis of written representations received from the directors as on 31st March, 2009
and taken on record by the Board of Directors, we report that, none of the directors is
disqualified as on 31st March, 2009 from being appointed as a director of the Company in
terms of clause (g) of sub-section (1) of Section 274 of the Act;
(f) In our opinion and to the best of our information and according to the explanations given to
us, the said accounts read together with Note no.20 in Schedule 20B of ‘Significant
Accounting Policies and Notes to Accounts’ regarding revenue of Rs.678,250,143
recognised in respect of additional claims for extra work/s carried out by the Company,
Note no. 6(a) in Schedule 20B regarding overdue debtors aggregating to Rs.262,494,866
(including dues from Associates Rs.111,863,902), Note no.10(b) of Schedule 20B
regarding remuneration (professional fees) of Rs.300,000 paid to a Director of the
Company for which necessary Central Government approval is pending and Note no.22 of
Schedule 20B regarding management’s perception that no provision for diminution is
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Thirteenth Annual Report 2008-09
required in the value of long term strategic investment (including advance against share
application money and other advances) in IOT Engineering and Construction Services Pte.
Limited of Rs.33,358,658 and that in IOT Cuddalore Construction & Terminalling Limited of
Rs.61,940,158; and other notes in the said Schedule and those appearing elsewhere in the
financial statements give the information required by the Act in the manner so required
and give true and fair view in conformity with the accounting principles generally accepted
in India:
i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,
2009;
ii) in the case of the Profit & Loss Account, of the profit of the Company for the year ended
on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year
ended on that date.
For LODHA & CO.Chartered Accountants
R. P. BARADIYAPartnerMembership No. 44101
Place: MumbaiDate: 16th May 2009
14
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS’ REPORT OF EVEN DATE ON
THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31st MARCH, 2009 OF
IOT INFRASTRUCTURE & ENERGY SERVICES LIMITED (formerly known as INDIAN
OILTANKING LIMITED)
On the basis of such checks as we considered appropriate and according to the information and
explanations given to us during the course of audit, we state that:
1. a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
b) As explained to us, the assets have been physically verified by the management at
reasonable intervals in accordance with the phased programme of verification which, in our
opinion, is reasonable considering the size of the Company and nature of its business.
According to the information and explanations given to us, no material discrepancies have
been noticed on such physical verification.
c) During the year, no substantial part of the fixed assets has been disposed off.
2. a) During the year, the management has physically verified the inventories of construction
material and stores & spares at reasonable intervals.
b) In our opinion and according to the information and explanations given to us, the
procedures of physical verification of inventories followed by the management are
reasonable and adequate in relation to the size of the Company and nature of its business.
c) The Company has generally maintained proper records in respect of inventories at various
locations.
3. a) The Company has not taken/granted any loans, secured or unsecured, from/to companies,
firms or other parties covered in the register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations given to us, having regard to
the explanation that purchase of certain items of inventory and fixed assets are of special
nature for which suitable alternative sources do not exist for obtaining comparative
quotations, there is an adequate internal control system commensurate with the size of the
Company and nature of its business for the purchase of inventory and fixed assets and for the
sale of services. Further, on the basis of our examination of the books and records of the
Company, and according to the information and explanations given to us, we have neither
come across nor have been informed of any continuing failure to correct major weaknesses in
the aforesaid internal control system.
5. a) According to the information and explanations given to us, we are of the opinion that the
particulars of contracts or arrangements referred to in Section 301 of the Act have been
entered in the register required to be maintained under that Section.
b) Having regards to what is stated in para 4 above, the aforesaid contracts or arrangements
aggregating during the year to Rs.500,000 or more in respect of each party, have been
made at prices which are reasonable considering, interalia, the report issued by an expert
under the Income-tax Act, 1961 according to which the prices for such transactions are at
arms length.
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Thirteenth Annual Report 2008-09
6. During the year, the Company has not accepted any deposits from the public within the
meaning of Sections 58A and 58AA or any other relevant provisions of the Act and rules framed
thereunder.
7. In our opinion, the Company has an internal audit system commensurate with size and nature
of its business.
8. According to the information and explanations given to us, the Central Government has not
prescribed the maintenance of cost records under clause (d) of sub section (1) of Section 209
of the Act for the services carried out by the Company.
9. a) The Company is generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and
other material statutory dues applicable to the Company with the appropriate authorities.
As explained to us, there are no undisputed statutory dues outstanding for more than six
months as at 31st March, 2009 from the date they became payable except stamp duty
liability estimated and provided at Rs.38,651,146 on leasehold land , the lease deed
whereof is yet to be executed pending issuance of occupancy certificate by CIDCO and
accordingly, the same has yet not been paid.
b) According to the records of the Company, there are no dues of Income Tax, Sales Tax,
Service tax, Customs Duty, Wealth Tax, Excise Duty, Cess, which have not been deposited
on account of any dispute except the following:
Particulars Forum where the dispute is pending Year Amount in Rs.
Sales tax Office of the Sales tax Commissioner, Rajasthan 2003-04 1,748,930
Sales tax Office of the Sales tax Commissioner, Chatthisgarh 2003-04 701,651
Service tax Office of the Commissioner of Service tax, Mumbai. 2006-08 128,121,387
10. The Company neither has any accumulated losses as at close of the year nor it has incurred any
cash losses during the financial year and in the immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to banks and financial institutions during
the year.
12. According to the information and explanations given to us and based on documents and
records produced to us, the Company has not granted any loans and advances on the basis of
security by way pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions
of clause 4(xiii) of the Order are not applicable to the Company.
14. The Company is not dealing in or trading in shares, securities, debentures, and other
investments. Therefore, the provisions of clause 4 (xiv) of the Order are not applicable to the
Company.
15. According to the information and explanations given to us, the Company has given a guarantee
for loans taken by a Subsidiary Company, the terms and conditions whereof are not prejudicial
to the interest of the Company.
16
16.According to the information and explanations given to us and on review of utilisation of term
loans on overall basis, the Company has applied the term loans for the purposes for which the
same were obtained.
17.According to the information and explanations given to us, the funds raised on short – term
basis have not been utilised for long term investments.
18. The Company has not made any preferential allotment of shares to parties and companies
covered in the register maintained under Section 301 of the Act.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during the year.
21.During the course of our examination of the books of account and records of the Company,
carried out in accordance with generally accepted practices in India, we have not come across
any instance of fraud on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
For LODHA & CO.Chartered Accountants
R. P. BARADIYAPartnerMembership No.44101
Place: MumbaiDate: 16th May 2009
17
Thirteenth Annual Report 2008-09
2009 2008Schedule Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders' FundsShare capital 1 2,323,831,900 2 ,322,857,100Reserves and Surplus 2 1,921,613,697 1 ,467,399,389
Share Application Money Pending allotment - 1 ,210,800
Loan FundsSecured Loans 3 3,104,067,238 1 ,711,225,267Unsecured Loans 4 958,113,122 157,030,124
Deferred Tax Liability (net) 374,229,183 387,490,836
8,681,855,140 6 ,047,213,516
APPLICATION OF FUNDS
Fixed AssetsGross Block 5 4,371,509,474 3 ,832,624,357Less : Depreciation 1,419,227,036 1 ,209,023,534
Net Block 2,952,282,438 2,623,600,823Capital work-in-progress 242,702,985 115,755,398
3,194,985,423 2 ,739,356,221
Investments 6 1,434,449,472 508,783,967
Current Assets, Loans & AdvancesInventories 7 47,727,495 8,631,368Sundry debtors 8 1,005,121,792 884,593,015Cash and bank balances 9 19,573,679 31,697,411Loans and advances 10 720,560,532 924,028,689Other current assets 11 5,637,837,444 4,109,282,480
7,430,820,942 5,958,232,963
Less : Current Liabilities and ProvisionsCurrent Liabilities 12 3,282,234,338 3,072,412,747Provisions 13 96,166,359 86,746,888
3,378,400,697 3,159,159,635
Net Current Assets 4,052,420,245 2,799,073,328
8,681,855,140 6,047,213,516Significant Accounting Policies and Notes to Accounts 20
SCHEDULES ANNEXED FORM PART OF THE FINANCIAL STATEMENTS
As per our attached report of even date For and on behalf of the Board of Directors
For Lodha & Co. S Behuria Jayanta BhuyanChartered Accountants Chairman Managing Director
R. P. Baradiya S C Jain Jatin MavaniPartner Director President - Finance & Company Secretary
Place: Mumbai Place: LondonDate : 16th May 2009 Date : 15th May 2009
BALANCE SHEET AS AT 31st MARCH, 2009
18
2009 2008Schedule Rupees Rupees
INCOME
Income from operations 14 9,997,232,564 8,361,317,803
Other income 15 408,747,639 7 2,098,801
10,405,980,203 8,433,416,604EXPENDITURE
Personnel 16 180,788,600 97,237,540
Cost of construction and engineering services 17 8,624,778,462 7,237,064,712
Operating and other expenses 18 338,989,371 211,669,375
Depreciation 5 212,316,247 180,703,100
Interest and finance charges 19 342,380,079 191,066,588
9,699,252,760 7,917,741,315
Less: Transferred to Capital Work-in-Progress (Refer note 7(b) in Schedule "20") - 3,219,307
9,699,252,760 7,914,522,008
Profit before Tax 706,727,444 518,894,597
Provision for taxation
Income Tax 260,240,000 182,000,000
Deferred Tax (net) (13,261,652) ( 12,389,216)
Fringe Benefit Tax 6,000,000 6,300,000
Tax provision short/(excess) earlier years 22,187 114,761
Profit for the year 453,726,909 342,869,052
Balance brought forward from earlier years 830,256,549 527,387,498
Transferred to Debt Redemption Reserve 40,000,000 40,000,000
Balance carried to the Balance Sheet 1,243,983,458 830,256,549
Basic and Diluted earnings per share (annualised) 1.95 2.11
Face Value of Equity Share 10 10
Significant Accounting Policies and Notes to Accounts 20
SCHEDULES ANNEXED FORM PART OF THE FINANCIAL STATEMENTS
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2009
As per our attached report of even date For and on behalf of the Board of Directors
For Lodha & Co. S Behuria Jayanta BhuyanChartered Accountants Chairman Managing Director
R. P. Baradiya S C Jain Jatin MavaniPartner Director President - Finance & Company Secretary
Place: Mumbai Place: LondonDate : 16th May 2009 Date : 15th May 2009
19
Thirteenth Annual Report 2008-09
2009 2008Rupees Rupees Rupees
A. Cash Flow from Operating ActivitiesProfit before taxation 706,727,444 518,894,596Adjustments for :
Depreciation 212,316,247 180,703,100Foreign Exchange Gain/Loss-Unrealised (net) 9,234,687 ( 2,689,568)(Gain) / loss on disposal of fixed assets 334,754 (21,425,578)Provision for Warranty Costs (3,260,480) 28,296,541Dividend Received (382,778,989) (12,506,262)Interest Received (42,799,697) (25,962,793)Income from Current Investments (37,273) (31,875,787)Interest and finance charges (Gross) 385,179,777 217,029,381
178,189,025 331,569,034Operating profit before working capital changes 884,916,469 850,463,630(Increase)/Decrease in
Inventories (39,096,128) 12,505,591Sundry debtors (120,528,777) 308,506,777Other receivables 166,243,956 (744,001,099)Other current assets (1,521,471,326) (3,369,506,335)
Increase/(Decrease) inCurrent liabilities and provisions 204,599,167 940,707,093
(1,310,253,109) (2,851,787,973)Cash generated from operations (425,336,640) (2,001,324,343)Income taxes and other taxes (Including FBT) paid (net of refunds) (229,037,985) (184,955,611)Net Cash used in Operating Activities - A (654,374,625) (2,186,279,954)
B. Cash Flow from Investing ActivitiesPurchase of fixed assets (669,275,233) (384,683,543)Sale proceeds from disposal of fixed assets 995,030 38,226,727Equity investment in Joint Venture/Subsidiary Companies (925,665,506) (278,857,685)Dividend Received from Joint Venture/Subsidiary Companies 382,778,989 12,506,262Income from Current Investments 37,273 31,875,787Interest received 35,716,060 25,681,116Net Cash used in Investing Activities - B (1,175,413,387) (555,251,336)
C. Cash Flow from Financing ActivitiesShare Application Money Received - 1,210,800Proceeds from issue of shares 251,400 1,599,999,940(Repayment)/ Receipt of long-term borrowings 1,392,841,972 387,882,658Increase / (decrease) in short-term bank borrowings 801,082,997 157,030,124Interest and finance charges paid (376,512,089) (218,181,592)Net Cash from Financing Activities - C 1,817,664,280 1,927,941,930Net increase/(decrease) in Cash and cash equivalents (A+B+C) (12,123,732) (813,589,359)
Cash and cash equivalents as on 1st April, 2008 31,697,411 845,286,770Cash and cash equivalents as on 31st March, 2009 19,573,679 31,697,411
Notes:1. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: "Cash Flow Statements" issued by the Institute of Chartered
Accountants of India.2. Cash and cash equivalents include cash on hand, balances with banks in current Funds.3. Previous year's figures have been regrouped/ reclassified wherever applicable.4. Figures in bracket indicate cash outflow.
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2009
As per our attached report of even date For and on behalf of the Board of Directors
For Lodha & Co. S Behuria Jayanta BhuyanChartered Accountants Chairman Managing Director
R. P. Baradiya S C Jain Jatin MavaniPartner Director President - Finance & Company Secretary
Place: Mumbai Place: LondonDate : 16th May 2009 Date : 15th May 2009
20
2009 2008Rupees Rupees
1. SHARE CAPITAL
Authorised
300,000,000 Equity shares of Rs. 10 each 3,000,000,000 3,000,000,000
Issued, Subscribed and Paid-up
232,383,190 Equity shares of Rs. 10 each, fully paid up 2,323,831,900 2,322,857,100
(2008 : 232,285,710 equity shares of Rs. 10 each fully paid up)
2,323,831,900 2,322,857,100
2. RESERVES AND SURPLUS
General reserve (as per last Balance Sheet) 20,000,000 20,000,000
Debt Redemption Reserve
As per last Balance Sheet 160,000,000 1 20,000,000
Add: Transferred from Profit & Loss Account 40,000,000 40,000,000
200,000,000 160,000,000
Securities Premium Account
As per last Balance Sheet 457,142,840 -
Add: Received on issue of shares during the year 487,400 457,142,840
457,630,240 457,142,840
Profit and loss account 1,243,983,457 830,256,549
(As per Annexed Account) 1,921,613,697 1,467,399,389
3. SECURED LOANS
From Banks :
Term loans
In Indian Currency 1,976,765,093 1,416,802,093
In Foreign Currency 80,118,450
Working capital facility 1,047,183,695 294,423,174
3,104,067,238 1,711,225,267
a. Term loans from banks of Rs.1,114,000,000 (2008: Rs.1,114,000,000)due for repayment in 2009, are secured by a first charge by way of equitable mortgage of the immovable property and by way of hypothecation of the movable assets relating to the Company's Navghar Terminal in Navi Mumbai.
b. Term loan from a bank of Rs.134,582,093(2008 : Rs.171,102,093) repayable in thirty six equal quarterly installments commencing from June 04, is secured by a first charge by way of hypothecation of the movable assets relating to the Company's LPG Terminal at Chennai, both present and future.
c. Term loan from a bank of Rs.131,983,000 (2008 : Rs.131,700,000) repayable in thirty six equal quarterly installments commencing from August 2008, is secured by a first charge by way of hypothecation of plant & machinery and assignment of project receivables relating to the Company's LPG Bottling plant, Chennai.
d. Term loan from a bank of Rs.596,200,000 (2008 : Rs.Nil) repayable in three annual installments after a initial moratorium of 15 months commencing from November 2008, is secured by a first charge by way of mortgage of specific Land and Buildings and second charge on the current assets of the company.
e. Buyers Credit from a bank of Rs.80,118,450 (2008 : Rs.Nil) repayable within a period of three years commencing from July 2008, is secured by a first charge by way of hypothecation of machinery/equipments acquired under the loan.
f. Working capital and non-fund based facilities to the tune of Rs. 4,189,293,438(2008: Rs. 2,248,260,657)from a bank is secured by way of hypothecation of all present and future inventories, book debts and all other current assets of the Company and second charge on the movable fixed assets.
4. UNSECURED LOANS
From Banks:
In Indian Currency 500,000,000 157,030,124
In Foreign Currency 458,113,122 -
Repayable within one year Rs. 500,000,000, (Previous Year: 157,030,124) 958,113,122 157,030,124
SCHEDULES TO THE FINANCIAL STATEMENTS
21
Thirteenth Annual Report 2008-09
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
SC
HED
ULE
5FI
XED
AS
SET
SA
mou
nt in
Rup
ee
Gro
ss B
lock
Dep
reci
atio
n
Net
Blo
ck
As
atA
s at
Up
toU
p to
As
atA
s at
Not
eA
pril
1,A
dditi
ons
Ded
uctio
ns/
Mar
ch 3
1,M
arch
31,
For
the
Ded
uctio
ns/
Mar
ch 3
1,M
arch
31,
Mar
ch 3
1,N
o.20
08A
djus
tmen
ts20
0920
08ye
arA
djus
tmen
ts20
0920
0920
08
Land Le
aseh
old
Land
144
1,20
6,71
0-
-44
1,20
6,71
077
,609
,801
7,36
8,13
584
,977
,936
356,
228,
773
363,
596,
909
Free
hold
Lan
d20
,582
,160
175,
245,
000
-19
5,82
7,16
0-
-19
5,82
7,16
020
,582
,160
Rig
ht o
f W
ay26
,653
,121
--
26,6
53,1
212,
872,
088
478,
521
3,35
0,60
923
,302
,513
23,7
81,0
33
Bui
ldin
gs
2,4
685,
666,
952
10,1
18,2
8169
5,78
5,23
313
9,03
4,25
436
,944
,758
175,
979,
012
519,
806,
221
546,
632,
698
Pla
nt a
nd m
achi
nery
2,33
1,27
3,28
933
0,43
6,56
424
,900
2,66
1,68
4,95
386
2,22
9,71
214
2,54
1,90
92,
874
1,00
4,76
8,74
71,
656,
916,
207
1,46
9,04
3,57
7
Rai
lway
sid
ing
317
9,43
5,08
617
9,43
5,08
675
,936
,604
7,99
5,36
383
,931
,967
95,5
03,1
1810
3,49
8,48
2
Furn
iture
, fix
ture
s an
d eq
uipm
ent
89,3
13,2
729,
369,
169
440,
900
98,2
41,5
4136
,062
,921
9,97
7,89
820
8,65
245
,832
,167
52,4
09,3
7353
,250
,351
Vehi
cles
43,9
79,5
2713
,278
,821
2,97
6,72
854
,281
,620
9,20
9,12
14,
870,
578
1,90
1,21
912
,178
,480
42,1
03,1
4034
,770
,406
Inta
ngib
le A
sset
s
Sof
twar
e14
,514
,240
3,87
9,81
0-
18,3
94,0
506,
069,
033
2,13
9,08
58,
208,
117
10,1
85,9
338,
445,
207
Tota
l3,
832,
624,
357
542,
327,
645
3,44
2,52
84,
371,
509,
474
1,20
9,02
3,53
421
2,31
6,24
72,
112,
745
1,41
9,22
7,03
62,
952,
282,
438
2,62
3,60
0,82
3
Pre
viou
s ye
ar3,
515,
462,
188
320,
534,
275
3,37
2,10
53,
832,
624,
357
1,03
0,03
1,98
918
0,70
3,10
01,
711,
556
1,20
9,02
3,53
42,
623,
600,
823
2,48
5,43
0,19
9
Cap
ital w
ork
in p
rogr
ess
- P
lant
& M
achi
nery
(In
clud
ing
adva
nces
Rs.
122
,319
,248
Pre
viou
s ye
ar :
Rs.
8,5
40,3
23)
242,
702,
985
115,
755,
398
Not
es :
1.Th
e Le
ase
Dee
d w
ith C
IDC
O in
res
pect
of
the
Leas
ehol
d La
nd is
pen
ding
exe
cutio
n. L
ease
is f
or f
or th
e pe
riod
of 6
0 ye
ars
com
men
cing
fro
m 1
4th
Aug
ust,
1997
2.B
uild
ings
incl
ude
Rs.
14,7
52,1
53 (
2008
: R
s.14
,752
,153
) be
ing
the
cost
of
imm
ovab
le a
sset
s co
nstr
ucte
d on
land
leas
ed to
Indi
an O
il C
orpo
ratio
n Li
mite
d by
Jaw
ahar
lal N
ehru
Por
t Tru
st (
JNP
T)3.
Rai
lway
sid
ings
incl
ude
Rs.
120,
406,
692
(200
8 : R
s.12
0,40
6,69
2) b
eing
the
cost
of
asse
ts c
onst
ruct
ed o
n la
nd le
ased
to R
ailw
ays
by J
NP
T. L
ease
is f
or th
e pe
riod
of 6
0 ye
ars
com
men
cing
fro
m 8
th J
uly,
199
8.4.
Bui
ldin
gs in
clud
e R
s.20
,386
,288
(20
08 :
Rs.
20,
386,
288)
bei
ng th
e co
st o
f of
fice
purc
hase
d at
Kol
kata
, in
reps
ect o
f w
hich
agr
eem
ent i
s pe
ndin
g fo
r ex
ecut
ion.
5.A
dditi
on to
Fix
ed a
sset
s in
clud
e R
s.16
,984
,113
(pr
evio
us y
ear
Rs.
Nil)
on
acco
unt o
f ex
chan
ge f
luct
uatio
ns.
Gro
ss B
lock
Dep
reci
atio
nN
et B
lock
Rup
ees
Rup
ees
Rup
ees
6.A
s at
the
end
of th
e ye
ar, f
ixed
ass
ets
incl
ude
for
CP
CL
LPG
Pla
ntA
sset
s co
nstr
ucte
d by
the
Com
pany
on
land
ow
ned
by C
henn
ai P
etro
leum
Cor
pora
tion
Lim
ited,
LP
G T
erm
inal
and
lice
nced
to th
e C
ompa
ny f
or a
per
iod
of 1
0 ye
ars
unde
r a
spec
ified
con
trac
t, in
ter-
alia
, for
ren
derin
g Te
rmin
allin
g S
ervi
ces
:B
uild
ings
172,
425,
374
90,9
58,4
6081
,466
,914
(172
,425
,374
)(7
3,59
5,92
3)(9
8,82
9,45
1)P
lant
and
mac
hine
ry30
1,61
0,36
515
9,69
7,98
914
1,91
2,37
6(3
01,6
10,3
64)
(129
,523
,094
)(1
72,0
87,2
70)
Furn
iture
, fix
ture
s an
d eq
uipm
ent
2,66
3,66
71,
853,
759
809,
908
(2,6
46,2
67)
(1,5
39,6
89)
(1,1
06,5
78)
Tota
l47
6,69
9,40
625
2,51
0,20
822
4,18
9,19
87.
As
at th
e en
d of
the
year
, fix
ed a
sset
s in
clud
e fo
r C
PC
L B
ottli
ng P
lant
Ass
ets
cons
truc
ted
by th
e C
ompa
ny o
n la
nd o
wne
d by
Che
nnai
Pet
role
um C
orpo
ratio
n Li
mite
d an
d lic
ence
d to
the
Com
pany
for
a p
erio
d of
10
year
s un
der
a sp
ecifi
ed c
ontr
act,
inte
r-al
ia, f
or L
PG
Bot
tling
pla
nt S
ervi
ces
:B
uild
ings
98,6
49,2
2111
,293
,126
87,3
56,0
95(9
5,04
0,54
5)(1
,428
,205
)(9
3,61
2,34
0)P
lant
and
mac
hine
ry13
3,04
5,14
514
,186
,916
118,
858,
229
(117
,363
,777
)(1
,773
,865
)(1
15,5
89,9
12)
Furn
iture
, fix
ture
s an
d eq
uipm
ent
754,
734
190,
232
564,
502
(409
,763
)(1
7,38
5)(3
92,3
78)
Tota
l23
2,44
9,10
025
,670
,274
206,
778,
826
*Fig
ures
in b
rack
et r
epre
sent
s P
revi
ous
year
22
2009 2008Rupees Rupees Rupees
6. INVESTMENTSLong Term and Trade(valued at cost)SubsidiariesQuoted Shares1,663,754 (2008: 1,663,754) equity shares of Rs 10 each,fully paid up in Stewarts and Lloyds of India Ltd. 41,777,882 41,777,882(Aggregate Market Value as at the close of the year Rs. 70,459,982Previous year: Rs.236,003,505)Unquoted Shares100,000 (2008 : 100,000) equity shares of Singapore Dollar 1 each, fully paid up inIOT Engineering and Construction Services Pte. Ltd. Singapore 2 ,948,000 2 ,948,000
243,240 (2008 : 243,240) equity shares of Rs.10 each, fully paid up in 234,900,000 233,950,000IOT Anwesha Enggineering Ltd.
2,000,000 (2008 : 65,000) equity shares of Rs.10 each, fully paid up in 149,299,199 6 50,000IOT Engineering Projects Ltd.
50,000 (2008 : 50,000) equity shares of Rs.10 each, fully paid up in 500,000 5 00,000IOT Design & Engineering Ltd
175,000 (2008 : 105,000) equity shares of Omanese Rial 1 each, fully paid up in 11,757,685 11,757,685IOT Engineering and Construction Services LLC. Oman
1001 (2008 : NIL) equity shares of Canadian Dollar 1 each, fully paid up in 29,754,659 -IOT Canada Limited
49,940 (2008 : NIL) equity shares of Rs. 1 each, fully paid up in 499,940 -IOT Cuddalore Construction and Terminalling Ltd.
18,625,750(2008 : NIL) Redeemable Preference shares of Canadian Dollar 1 each, 7 45,811,707 -fully paid up in IOT Canada Limited. (Carries coupon rate @ 3% p.a.)
Joint Ventures10,020,040 (2008 : 10,020,040) equity shares of Rs.10 each, fully paid up inZuari Indian Oiltanking Limited [Refer Note 5 in Schedule '20' (B)] 100,200,400 100,200,400
11,700,000 (2008 : 11,700,000) equity shares of Rs.10 each, fully paid up inIndian Oil Skytanking Ltd [Refer Note 5 in Schedule '20' (B)] 117,000,000 1 17,000,000
1,434,449,472 508,783,967
7. INVENTORIES(as verified, valued and certified by the management)(valued at lower of cost and net realisable value)Stores and spares 8,437,317 8,631,368Construction materials 39,290,178 -
47,727,495 8,631,368
8. SUNDRY DEBTORS(Unsecured)Outstanding over six months
Considered good 262,494,866 381,513,289Considered doubtful 51,686 -
262,546,552 381,513,289Other debts, considered good 742,626,926 503,079,726
1,005,173,478 884,593,015Less : Provision for doubtful debts 51,686 -
1,005,121,792 884,593,015
9. CASH AND BANK BALANCESCash on hand 910,553 1,794,249Balances with scheduled banks
In current accounts 18,663,126 29,903,16219,573,679 31,697,411
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
23
Thirteenth Annual Report 2008-09
2009 2008Rupees Rupees
10. LOANS AND ADVANCES(Unsecured)Advances recoverable in cash or in kind or for valueto be received (Refer Note 7(a) ( in Schedule '20' B)
Considered good 406,938,849 644,842,386Considered doubtful 3,553,648 3,553,648
410,492,497 648,396,034Less : Provision for doubtful advances 3,553,648 3,553,648
406,938,849 644,842,386Due from Subsidiary
IOT Design & Engineering Limited 56,847,212 60,132,579(Maximum balance outstanding during the year is Rs. 111,820,066(2008 : 60,132,579))
IOT Engineering Projects Ltd. 102,795,231(Maximum balance outstanding during the year isRs. 325,689,660 (2008 : 13,311,905 ))
IOT Cuddalore Construction and Terminals Ltd. 61,440,218 38,994,617(Maximum balance outstanding during the year is Rs.61,440,218(2008 : 38,994,617 ))
IOT Anwesha Engineering & Construction Ltd. 33,613,499(Maximum balance outstanding during the year is Rs.33,613,499(2008 : Nil ))
Advance Against equity - 100,000,000
Advance Against Share Application Money to a Subsidiary 30,410,658 19,086,841
Advance income tax and other taxes net of provision of Rs. Nil (2008 : Rs.311,699,886) ) - 37,224,202
Deposits with Government authorities and others 28,514,865 23,748,065
720,560,532 924,028,689
11.OTHER CURRENT ASSETSWork-in-progress : construction contracts:-Uncompleted work and value of work done(at estimated net realisable value)
21,278,248,121 13,071,057,949Less : Advances 5 21,488,541 713,877,232Less : Progress billings 15,860,597,948 8,649,156,612
4 ,896,161,632 3,708,024,105Add : Recoverable expenses 3 58,260,139 66,649,192Retention money receivable 3 71,643,007 68,814,048
5,626,064,778 3,843,487,345Others 2,874,821 263,980,927
5,628,939,599 4,107,468,272Interest receivable 8,897,845 1,814,208
5,637,837,444 4,109,282,48012.CURRENT LIABILITIES
Sundry creditors * Due to Micro, Small and Medium Enterprises (Refer Note No. 23 in Schedule 20 B) - - Others 2,893,017,152 2,638,741,820Interest accrued but not due 8,808,406 140,718Due to Subsidiary Companies 92,369,911 281,204,998Tax provisions net of Advance Tax (net of Advance Taxof Rs. 748,188,391) 15,602,810 -(2008 : Rs.Nil) )Other liabilities 272,436,059 152,325,211
3,282,234,338 3,072,412,747* includes Retention Money of Rs. 243,619,371 (2008: 186,649,765)payable to sub-contractorsupon successful completion of the jobs after the defect liability period
13.PROVISIONSFor Retirement Benefits 29,864,429 17,184,478For Warranty 66,301,930 69,562,410
96,166,359 86,746,888
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
24
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
2009 2008Rupees Rupees Rupees
14.INCOME FROM OPERATIONSTerminalling services 880,190,517 578,748,582Construction and Engineering services 9,117,042,047 7,782,569,221
9,997,232,564 8,361,317,803
15.OTHER INCOMEExchange gain/loss realised/unrealised 3,110,067 -Rent received 22,821,310 6,291,174Dividend received from Subsidiaries/Joint ventures 382,778,989 12,506,262Dividend from Current Investments 37,273 31,875,787
Profit on sale of Fixed Assets (Net) - 21,425,578
408,747,639 72,098,801
16.PERSONNELSalaries and allowances 163,083,119 85,650,973Contribution to provident and other funds 8,020,156 4,788,873Staff welfare expenses 9,685,325 6,797,694
180,788,600 97,237,54017. COST OF CONSTRUCTION AND ENGINEERING SERVICES
Construction materials 5,004,862,146 2,715,703,995Sub-contracting costs 3,087,186,960 4,093,903,736Salaries and allowances 225,020,271 181,509,725Contribution to provident and other funds 7,964,556 7,862,571Staff welfare expenses 10,532,099 10,870,136Rent 17,254,044 19,635,120Repairs and maintenance Buildings 186,571 352,751Plant and machinery 463,586 170,426Others 1,432,992 2,083,149 1,980,346Rates and taxes 21,479,115 45,299,010Insurance 6,247,909 6,417,164Communication expenses 7,138,238 9,081,077Legal and professional charges 126,870,137 12,515,692Travelling and conveyance 43,123,313 45,389,628General and administrative expenses 67,407,510 58,076,794Increase/(Decrease) in provision for warranty and other costs (2,390,985) 28,296,541
8,624,778,462 7,237,064,712
8,624,778,462 7,237,064,712
18.OPERATING AND OTHER EXPENSESPower and fuel 23,601,729 18,695,385Rent 8,105,651 5,966,832Rates and taxes 4,490,704 3,007,506Insurance 5,683,757 5,081,539Repairs and maintenanceBuildings 5,557,677 4,569,950Plant and machinery 9,139,558 9,292,340Others 30,469,669 14,300,788
45,166,904 28,163,078Communication expenses 7,129,053 5,423,735Wharfage charges 36,607,829 38,647,846Miscellaneous terminalling expenses 50,459,966 26,256,233Auditors' Remuneration 896,090 928,880Legal and professional charges 89,991,507 34,936,241Travelling and conveyance 42,838,722 28,134,094Provision for doubtful debt/advances 51,686 -General and administrative expenses [Refer Note 9 in Schedule '20' (B)] 23,631,019 16,428,006Loss on sale/discard of fixed assets (net) 334,754 -
338,989,371 211,669,37519.INTEREST AND FINANCE CHARGES
Interest on fixed loans 172,468,522 104,911,353Interest others 177,829,233 94,095,650Other finance charges 34,882,022 18,022,377LessInterest received ( TDS deducted Rs. 3,165,593 Previous year : 319,031) 42,799,698 25,962,793
342,380,079 191,066,588
25
Thirteenth Annual Report 2008-09
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS
A. Significant Accounting Policies
1. General
a. The Company was incorporated on 28 th August, 1996, under the Companies Act, 1956 as Indian Oiltanking Limited and as on 1st December, 2008 it has changed to IOT Infrastructure & Energy Services Ltd. with Corporate Identity Number (CIN) U23200MH1996PLC102222 and is a 50:50 joint venture between Indian Oil Corporation Limited and Oiltanking GmbH Germany. The Company is mainly engaged in the business of Engineering, Procurement and Construction in the field of Refineries, Petrochemicals, Power Plants, etc. , Seismic services and Terminalling services including Operation and maintenance contracts.
b. The financial statements are prepared on the historical cost convention and on the accounting principle of a going concern.
c. Accounting policies not specifically referred to otherwise are consistent and in consonance with the applicable accounting standards.
d. All expenses and income to the extent ascertainable with reasonable certainty are accounted for on accrual basis.
e. The preparation of the financial statements in conformity with generally accepted accounting practices and Accounting Standards as specified in the Companies (Accounting Standards) Rule 2006 prescribed by the Central Goverment requires management to make estimates, the actual results could differ. Any revision to accounting estimates is recognised prospectively and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of financial statement. The recognition, measurement, classification or disclosure of an item or information in the financial statement has been made relying on these estimates.
2. Revenue Recognition
Terminalling Services
Revenues from Terminalling Services are recognised as per contractual terms.
Construction Contracts
Revenues from construction contracts are recognised by reference to the overall estimated profitability of the contract under the percentage of completion method. Foreseeable losses in any contract is provided for irrespective of the stage of completion of the contract activity. The stage of completion of the contract is determined considering the nature of the contract, technical evaluation of work completed/measurement of physical progress and proportion of costs incurred (includes material fabricated/made especially for the contract/s, inspected and /or approved technically) to the estimated total costs.
Contract costs comprises of all costs that relate directly to the specific contract, incidental costs attributable to the contract including allocated overheads and warranty costs.
Engineering and Seismic Services
Revenues from Engineering and Seismic Services are recognised as per milestones defined in the contracts with clients.
3. Fixed Assets
Value of leasehold land is stated at the value of lease premium plus other incidental expenses incurred in relation to the acquisition of such land. Other fixed assets are stated at cost including taxes, duties, freight and other incidental expenses incurred in relation to acquisition and installation of the same. Pre-operative expenses incurred during the construction period upto the date the assets are put into use, are capitalised as cost of fixed assets.
4. Impairment of Assets
a. The Company assesses the carrying amount of assets at each Balance Sheet date to determine whether there is any indication of impairment. If such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount is estimated as the higher of the net realisable value and the value in use with an impairment loss being recognised whenever the carrying amount exceeds the recoverable amount.
b. A previously recognised impairment loss on assets is reversed if there has been a change in the estimates used to determine the recoverable amount, however not to the extent higher than the carrying amount that would have been determined had no impairment loss been recognised in prior years.
5. Depreciation/Amortisation
Value of leasehold land is amortised from the year of commencement of commercial operations of the respective projects over the remaining period of the lease. Cost of Right of Way is amortised over the period for which such Right of Way is granted.
Depreciation on fixed assets is provided in accordance with the rates as specified in schedule XIV of the Companies Act, 1956 on Straight Line Method. Depreciation in respect of the assets comprising of LPG Terminal & LPG Bottling Plant at Chennai are amortised over the period of ten years as per contractual terms with the client which is lower than the life determined under schedule XIV to the Companies Act, 1956.
6. Investments
All long term investments are valued at cost and provision for diminution in value thereof is made wherever such diminution is other than temporary.
All current investments are valued at lower of cost or net fair/market value.
7. Inventories
i. Inventories are valued at the lower of cost and net realisable value after providing for obsolescence and other anticipated losses, if any.
ii. Cost in respect of :
a. Stores and spares is determined on first in first out basis.
b. Construction materials are determined on first in first out basis.
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
26
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
8. Borrowing Costs
Interest and other borrowing costs incurred on funds borrowed which are attributable to the acquisition or construction of qualifying assets are capitalised as cost of assets, upto the date the asset is ready for its intended use. All other borrowing costs are recognised in the profit and loss account in the period in which they are incurred.
9. Foreign Exchange Transactions
Transactions in foreign currency are recorded at the rates of exchange prevailing on the date of the transactions. Foreign currency assets and liabilities are similarly translated at the rates prevalent on Balance Sheet date and the exchange differences are recognised in the profit and loss account. Exchange difference on long term foreign currency monetary items relating to acquisition of depreciable assets are adjusted to the carrying cost of the assets and depreciated over the balance life of assets.
10.Employee Benefits
a. Provident Fund and Pension Fund :
Retirement benefits in the form of Provident Fund / Pension Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.
b. Gratuity :
Gratuity liability is a defined benefit obligation. The company has taken an insurance policy under the Group Gratuity Scheme with the Insurers to cover the gratuity liability of the employees and the amount paid / payable in respect of the present value of liability of past services is charged to the Profit and Loss Account every year. The difference between the amount paid / payable to Insurers and the actuarial valuation made at the end of each financial year is also charged to Profit and Loss account.
c. Leave Entitlement :
Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation.
11.Leases
Assets acquired on leases where significant portions of the risks and rewards incidental to the ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit & Loss Account on accrual basis.
12 Taxation
a. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961.
b. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date.
c. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable/virtual certainty that these could be realised in future.
d. Provision for Fringe Benefit Tax has been made in respect of employee benefits and other specified expenses as determined under the Income-tax Act, 1961.
13 Provisions, contingent liabilities & contingent assets
(I) Provisions involving substantial degree of estimation in measurement are recognised when there is present obligation as a result of past events and it is probable that there will be outflow of resources.
(ii) Provision for warranty costs are made based on technical assessment considering the specific nature of each contract. Such assessments are reviewed periodically and revised considering past experience and actual incurrence. Unutilised provision is reversed on expiry of the warranty period.
(iii) Disclosures for a contingent liability is made, without a provision in books when there is an obligation that may, but probably will not, require outflow of resources.
(iv) Contingent assets are neither recognised, nor disclosed in the financial statements.
14 Debt Redemption Reserve
Debt Redemption Reserve is being created for long term borrowings taken from time to time for an amount as considered appropriate by the management.
15 Employee Stock Option Scheme
The Company follows the fair value per share for computing the compensation cost, for options granted under the scheme. The difference if any, between the fair value per share and grant price being the compensation cost is amortised over the vesting period of the options.
27
Thirteenth Annual Report 2008-09
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS (Contd.)
B. Notes to Accounts
1. Contingent Liabilities not provided for in respect of:
a. Right of way charges, rent and other matters Rs.15,069,138 (Previous Year : Rs.13,844,858).
b. Income tax matters Rs. 9,501,840 (Previous Year : Rs.17,973,631).
c. Sales Tax matters Rs. 2,450,581on accounts of Form E1 (Previous Year: 2,822,696)
d. Service tax matters Rs.128,121,387 (Previous Year : Rs.Nil).
e. Liquidated Damages, as may be levied for completion of certain contracts beyond stipulated time and other claims, for which negotiations on reasonable grounds are on - amount presently not ascertainable. In the opinion of the Management amount if any, payable would not be significant.
f. Bank guarantees given on behalf of subsidiary viz. IOT Engineering Projects Ltd amounting to Rs.227,083,309. (Previous Year : 106,914,629)
2. Disclosure of provisions as per AS-29 "Provisions, Contingent Liabilities and Contingent Assets" is as follows:
(Rupees)
Items Opening Balance Additional Provisions Amount used/ Amount reversed Closing Balance made during the year payments made
during the year
Provision Warranty and other costs 69,562,410 - 2,148,900 1,111,580.00 66,301,930
(41,265,868) (28,296,542) - - (69,562,410)
*Figures in bracket represents Previous year
3. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 278,776,963 (net of advances of Rs. 122,319,248) (Previous Year : Rs.342,679,900 (net of advances of Rs. 8,540,323 ) ).
4. According to the Employee Stock Option Plan (ESOP) 2007, an aggregate of 4,388,373 options representing 4,388,373 equity shares of face value of Rs. 10 each were made available for grant to eligible employees, managing director and non-executive directors except for promoter/director of the Company and its subsidiaries/holding company. These options are available for exercise over a period of 3 years.
Particulars Managing Director Others Total no of Options
Outstanding as at 1st April, 2008 (Nos.) 250,000 3,363,955 3,613,955
(250000) (4138373) (4388373)
Granted (Nos.) - 317,690 317,690
Forfeited (Nos.) - - -
Exercised (Nos.) - 16,760 16,760
(80720) (80,720)
Lapsed (Nos.) - 671,920 671,920
(693,698) (693,698)
Outstanding as at 31st March, 2009 (Nos.) 250,000 2,992,965 3,242,965
(250000) (3363955) (3613955)
The estimated fair value computed on the basis of Black Scholes pricing model, of each stock option granted for Performance ESOPs is within the range of Rs 5.18 to Rs. 8.40 per option. The key assumptions used to estimate the fair value of options are:
Risk Free Interest Rate 8.07%
Expected Life 4 years
Expected Volatility NIL
Expected dividend yield NIL
Previous year's figures are stated in brackets.
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
28
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
5.Details of Joint-Ventures :-
(Rupees)
Proportionate share of
S.No Name of the Joint Venture & Partner Proportionate Assets Liabilities Income Expensesshare
1 Zuari Indian Oiltanking Limited 50.00% 268,536,363 136,382,605 81,433,947 51,606,651Partner : Zuari Industries Limited ( 279,285,423) (157,573,225) (75,118,985) (53,416,541)
2 IndianOil Skytanking Limited 33.33% 350,053,805 245,200,176 114,503,878 131,858,703Partners: Indian Oil Corporation Ltd, (323,071,106) (207,121,106) ( -) (-)
(33.33%) and SkyTanking Ltd (33.33%)
Contingent liabilities, if any, in relation to interest in Joint ventures as on 31st March, 2009 Rs. 25,964 (Previous Year : 186,621)
*Figures in bracket represents Previous year
6. Sundry debtors include:
a. Overdues of Rs. 262,494,866 (Previous Year : Rs.302,913,289) including from Associates Rs.111,863,902 (Previous Year : Rs.172,689,254), which in the opinion of the management are fully realisable from the concerned parties in due course of time.
b. Amounts due from companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956
2009 2008
Rupees Rupees
Chennai Petroleum Corporation Limited 38,017,344 32,938,270
7. a. Advances recoverable in cash or in kind for value to be received include overdues of Rs. 2,949,084 (Previous Year : Rs. 3,377,084), relating to service tax, customs etc. which in the opinion of the management are fully realisable from the concerned parties.
b. Plant & Machinery, installed and commissioned on 6th February, 2008 in respect of LPG Bottling plant at Chennai (a BOOT project) includes Preoperative Expenditure being transferred from Profit & Loss Account as under :-
Head of Account 2009 2,008
Rupees Rupees
Salaries &Allowances - 2,113,222
Contribution to PF and other Funds - 47,178
Staff welfare Expenses - 91,483
Rates & taxes - 12,810
Insurance - 237,079
Travelling & Conveyance - 380,028
Communication Expenses - 45,020
Legal & Professional Charges - 500
General & Admn. Expenses - 291,986
Total - 3,219,307
8. a. In the opinion of the management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, atleast equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and not in excess of what is required.
b. The Accounts of certain debtors, loans and advances given/ received, creditors and bank accounts are, however, subject to confirmations and reconciliations, if any. The management is, however, confident that the impact for the year thereof on the financial statements will not be material.
9. (I) The net exchange fluctuations arising on foreign currency transactions other than in relation to forex liabilities in respect of fixed assets, amounting to Rs. 3,110,067 has been credited to other income under Schedule "14" (Previous Year: Rs. 1,002,216 has been debited to General and Administrative Expenses under Schedule"18".)
(ii) Pursuant to the retrospective amendment (w.e.f 7th December, 2006) to Accounting Standard (AS11) on affects of changes in foreign exchange rates vide GSR notification 225(E) dated 31st March, 2009, The Company has changed its accounting policy to charge the foreign currency exchange difference to Profit & loss account on amounts borrowed for acquisition of fixed assets to adjust the same to the carrying cost of fixed assets. Due to the change in the policy the profit for the year has increased by Rs. 16,984,113 and consequentially the fixed assets (net block ) has increased by the said amount. There was no such borrowings in the previous year
29
Thirteenth Annual Report 2008-09
10. a. Remuneration paid/payable to Managing Director during the year:
2009 2008
Rupees Rupees
Salaries and allowances 2,658,773 2,366,327
Company's contribution to provident fund 189,000 180,540
Gratuity and superannuation 265,545 265,243
Company Leased Accommodation 1,800,000 1,800,000
Perquisites and other benefits (Valued as per Income Tax Rules) * 189,591 162,757
Total 5,102,909 4,774,867
*Excludes premium paid for mediclaim / accident Insurance Policy for the Company as a whole
b. Remuneration paid/payable to a Director for professional services during the year
Professional Fees (excl. service tax) *780000 720,000
* Includes Rs. 300,000 for which the Central Government approval is required under Section 309
(1)(b) of the Companies Act, 1956.
11 Auditors' remuneration
2009 2008
Rupees Rupees
Audit Fees 500,000 500,000
Tax Audit Fees 50,000 50,000
Certification Fees 302,500 300,000
Reimbursement of expenses 43,590 78,880
Total 896,090 928,880
Auditors' remuneration excludes service tax of Rs. 94,039 (Previous Year : Rs.114,810)
12 a. Disclosure in respect of construction contracts in progress as at the end of the year pursuant to Accounting Standard '7':
2009 2008
Rupees Rupees
Contract Revenue Recognised 8,805,276,517 7,538,139,583
Aggregate amount of contract costs incurred and recognised profits 8,285,387,970 6,975,828,923
Amount of Customer advances Outstanding for contracts in progress 521,488,541 713,877,232
Retention amount due from Customers for contracts in progress 371,643,007 68,814,048
Gross amount due from customers (Unbilled revenue) 5,723,584,210 7,874,471,580
Gross amount due to customers (Advance billings) - 252,631,479
b. The completion of construction contracts and management's estimation of future costs to be incurred on construction contracts in progress for the purpose of calculating their net realisable value have been relied upon by the Auditors, these being matters of technical nature and owing to the uncertainties of the future.
13 The Company has taken/given certain premises along with furniture, fixtures & equipment on operating leases, the agreements whereof are mutually cancelable/renewable.
14 Disclosure in respect of Related Parties pursuant to Accounting Standard '18' :
a. List of Related Parties :
(i) Parties where control exists-Subsidiaries:-
(a) Stewarts and Lloyds of India Ltd (S&L)
(b) IOT Engineering and Construction Services Pte. Ltd. (IOTECS Singapore)
(c) IOT Engineering Projects Ltd (IOTEP)
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
30
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
(d) IOT Anwesha Engineering Ltd
(e) IOT Engineering and Construction Services LLC. (IOTECS Oman)
(f) IOT Design & Engineering Ltd. (IOTDE)
(g) IOT Canada Limited
(h) Newsco Directional and Horizontal Drilling Services(Asia) Inc. (step down Subsidiary)
(i) IOT Cuddalore Construction and Terminals Ltd.
(ii) Other Related Parties with whom the Company has entered into transactions during the year
(a) Associates
Indian Oil Corporation Limited(IOCL)
Oiltanking GmbH (OT)
IOT Engineering and Construction Services Pte. Ltd. (IOTECS Singapore)
(b) Joint Venture
Zuari Indian Oiltanking Limited (ZIOTL)
IndianOil Skytanking Ltd., (IOSL)
(c) Key Management Personnel
Mr. Jayanta Bhuyan, Managing Director
Note : Related Parties are as identified by the Company and relied upon by the Auditors.
2009 2008
Rupees Rupees
b. Details of transactions with the Related Parties in the ordinary course of business:
(i) Subsidiaries-Parties where control exists
S&L
Sub-contracting Expenses 44,138,879 398,176,709
Reimbursement of expenditure (paid) 73,479 1,807,238
Rent Paid 444,000
Dividend Received 4,991,262 4,991,262
Purchase of Fixed Assets 670,446
IOTECS Singapore
Investment in Equity -
Advance against Share Application Money 17,369,157 13,041,501
IOTEP
Construction and engineering services charges 606,538,339 217,633,346
Rent Income received 17,787,742 1,375,000
Reimbursement of capital expenditure (received) - 693,345
Interest received on advance given 8,051,357 -
Reimbursement of revenue expenditure (received) 19,902,906 881,579
Investment in Equity 17,500,000 650,000
Bank Guarantees given 120,168,680 106,914,629
IOTECS Oman
Consultancy Charges (received) 27,724,179 90,040,119
Sub-contracting Income (received) 44,936,392 -
Dividend Received (received) 370,272,727 -
Reimbursement of revenue expenditure (received) 33,396,314 12,022,948
IOTDE
Advances Given 135,411,902 58,583,886
Designing Consultancy charges paid 142,653,135 -
Rent Received 730,766 -
Interest received on advances given 6,510,467 1,548,693
31
Thirteenth Annual Report 2008-09
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
IOT Anwesha
Sub-contracting Expenses paid 274,272,577 34,176,553
Interest on advances received 3,122,156 -
Advance Received 150,000 -
Reimbursement of revenue expenditure (received) 3,268,102 493,724
IOT Canada Ltd
Investment in Equity Shares 39,625 -
Investment in Redeemable Preference Shares 741,410,374 -
Newsco Directional and Horizontal Drilling Services(Asia) Inc
Reimbursement of revenue expenditure (received) 1,267,458 -
Purchase of Fixed Asset 3,154,414 -
IOT Cuddalore
Equity Shares investment 499,940 -
Advances Given 61,440,218 -
(ii) Associates
(a) With IOCL
Terminalling services rendered 58,010,677 51,047,983
Construction and engineering services rendered 6,372,601,678 4,156,691,420
Recoverable expenditure 879,426,379 1,644,160
(b) With OT
Engineering Services rendered 408,814 -
Reimbursement of expenditure payable 6,843,781 2,646,515
( c) OT Singapore
O & M Services rendered 210,110 842,451
(iii) Joint Venture
(a) ZIOTL
Recoverable expenditure 3,835,795 2 ,944,748
Reimbursement of expenditure payable 47,828 250,417
Dividend Received 7,515,000 7,515,000
(b) IOSL
Construction and engineering services rendered 20,516,573 310,466,465
Recoverable expenditure 3,011,352 4,216,892
Equity Capital Subscribed 32,000,000
(iv) Key Management Personnel
Remuneration to Managing Director 5,102,909 4,774,867
c. Outstanding balances in respect of the Related Parties:
Subsidiaries
Stewarts and Lloyds of India Ltd.(S&L)
Payable including provisions 79,183,669 172,992,364
IOTDE
Loan Receivable 43,660,970 58,583,886
Interest Receivable 6,510,467 1,548,693
IOTEP
Payable 43,480,258 70,859,911
Advances Receivable 146,275,489 84,171,816
Recoverable Expenditure receivable 3,465,431 1,932,273
Bank Guarantees given 120,168,680 106,914,629
IOTECS Singapore
Advance against Share Application Money 30,410,658 -
32
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
IOTECS Oman
Receivable 3,907,767 97,938,245
IOT Anwesha
Payable 66,166,265 37,352,723
Advances Receivable 33,613,499 31,035,094
Expenses Recoverable 3,707,826 -
IOT Cuddalore
Advance Recoverable 61,440,218 -
Newsco Directional and Horizontal Drilling Services(Asia) Inc
Payable 3,154,414 -
(ii) Associates
Receivables( from IOCL) 5 66,112,911 405,955,558
Advance Received (from IOCL) 521,488,541 713,877,232
Payable to OT 5,902,828 2,073,194
Receivables( from OT Singapore) 55,414 94,309
(iii) Joint Venture
Receivables (from ZIOTL) 2,313,669 1,025,702
Receivables( from IOSL ) 676,979 13,561,306
d. Amounts pertaining to related parties written off/(Written Back)/Provided for (Net):
Indian Oil Corporation Ltd. 86,246 -
Notes :
a) During the year an amount of Rs. 34,560 receivable from one of the associates has been written off.
b) During the year an amount of Rs. 51,686 receivable from one of the associates has been provided for.
15 Segment Reporting
Primary segments (business segments)
The Company's operations comprise of (i) terminalling services from own terminals and operations and maintenance services in respect of clients' terminals and (ii) construction and engineering services. The revenues, expenses, assets and liabilities under the reportable segments are tabulated below. The figures for the previous year are given in italics below current year figures.
Rupees
ConstructionTerminalling & Engineering Total
a. Revenue from external customers 880,190,517 9,117,042,047 9,997,232,564
578,666,602 7,782,651,201 8,361,317,803
b. Segment results 394,948,724 416,171,162 811,118,885
232,286,777 513,630,250 745,917,027
Less : Unallocable expenses net of unallocable income 217,641,620
131,738,025
: Interest Paid (Gross) 385,179,777
200,427,004
Profit before tax 706,727,444
518,894,596
Provision for taxation (current, deferred and FBT) 253,000,535
176,025,545
Profit after tax 453,726,909
342,869,051
c. Carrying amount of Segment Assets 3,428,913,800 7,847,159,916 11,276,073,716
2,629,352,262 5,803,900,169 8,433,252,431
Unallocated Assets 3,239,181,602
773,120,720
Total Assets 14,515,255,318
9,206,373,151
33
Thirteenth Annual Report 2008-09
d. Carrying amount of Segment Liabilities 1,520,547,285 4,182,245,611 5,702,792,896
1,523,824,313 3,103,446,467 4,627,270,780
Unallocated Liabilities 3,147,800,632
863,779,684
Total Liabilities 8,774,448,926
5,414,905,862
e. Cost incurred to acquire Segment fixed assets during the year 401,041,459 135,955,041 536,996,500
216,170,247 77,714,446 293,884,693
Unallocated acquisitions 5,331,146
26,649,582
Total 542,327,645
320,534,275
f. Depreciation / Amortisation 184,194,025 20,773,873 204,967,897
159,925,569 14,501,357 174,426,926
Unallocable Depreciation / Amortisation 7,348,350
6,276,174
Total 212,316,247
180,703,100
g. Income received by the Company are mostly from Indian operations, hence no secondary Segment reporting.
16 Computation of Basic and Diluted Earnings Per Share: 2009 2008
a. Profit for the year after adjustment of taxation (Rupees) 453,726,909 342,869,052
b. Weighted average number of equity shares outstanding during the year (Nos.) 232,373,744 162,426,229
c. Basic and Diluted earnings per share (a) / (b) (Rupees) 1.95 2.11
d. Nominal value of the share (Rupees) 10 10
17 Deferred Taxation
2009 2008
The major components of deferred tax liability and assets as on 31st March, 2009 are as under: Rupees Rupees
Deferred tax liability on account of depreciation 390,194,359 394,539,724
Deferred tax assets on account of expenses/ provisions allowable in subsequent years 15,965,176 7,048,888
18 Leases 374,229,183 387,490,836
Non-cancelable operating lease
The details of future rental payable are given below
2009 2008
Rupees Rupees
Not later than 1 year 2,662,256 917,500
Later than 1 year not exceeding 5 years 1,135,925 -
In respect of other premises taken on operating lease, the lease agreements are generally mutually renewable or cancelable by the lessor or lessee.
19 Disclosure as required by Accounting Standard 15 (Revised) on Employee Benefits: -
i) In respect of gratuity and compensated absences, defined benefit schemes (based on Actuarial Valuation) -
Description Amt in Rs. Amt in Rs.
2009 2008
A. Expense recognised in the statement of Profit and Loss
Account for the year ended March 31, 2009
- Current Service Cost 2,109,039 801,820
- Interest Cost 510,726 232,506
- Expected return on plan assets (290,410) (290,410)
- Net actuarial (gain) / loss recognised during the year 1,407,252 1,411,033
Total Expense 3,736,607 2,328,622
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
34
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
B. Actual return on plan assets
- Expected return of plan assets 290,410 116,737
- Actuarial (gain) / loss on plan assets (584,325) 67,289
- Actual return of plan assets (293,915) 184,026
C. Net Asset / (Liability) recognised in the Balance Sheet
- Present value of obligation 4,561,104 4,617,147
- Fair value of plan assets 2,994,097 2,475,275
- Funded status (surplus / (deficit)) (1,567,007) (2,141,872)
- Net Asset / (Liability) recognised in the Balance Sheet (1,567,007) (2,141,872)
D. Change in Present value of Obligation during the ended March 31, 2009
- Present value of obligation as at April 1, 2008 4,617,147 2,104,499
- Current Service Cost 2,109,039 801,820
- Interest Cost 510,726 232,506
- Benefits paid (684,231) -
- actuarial (gain) / loss on obligation (1,991,577) 1,478,322
- Present value of obligation as at March 31, 2009 4,561,104 4,617,147
E. Change in Assets during the year ended March 31, 2009
- Fair value of plan assets as at April 1, 2008 2,472,775 1486429.00
- Expected return on plan assets 290,410 116737.00
- Contributions made 1,499,468 801820.00
- Benefits paid (684,231)
- actuarial (gains) / loss on plan assets (584,325) 67289.00
- Fair value of plan assets as at March 31, 2009 2,994,097 2,472,275
F. Major categories of plan assets as a percentage of total plan
G. Actuarial Assumptions
- Discount Rate 8.00% 8.00%
- Expected rate of return on assets 8.00% 8.00%
- Mortality Rate LIC (1994-96) Table LIC (1994-96) Table
- Future salary increases consider inflation, seniority, promotion and other relevant factors 4.00% 4.00%
20 The Company has recognised Rs. 678,250,143 including from Indian Oil Corporation an associate company Rs. 610,500,000 (Previous year Rs. 99,626,685) as revenues in respect of additional claims for extra work/s carried out, which was not included in the original contract entered by the company. In view of the past experience, the Management is confident of obtaining Change Orders in due course of time.
21 Additional information pursuant to Part II of Schedule VI to The Companies Act, 1956
2009 2008
Rupees Rupees
a. Earnings in foreign exchange
Construction and engineering services 261,399,263 102,224,783
261,399,263 102,224,783
b. CIF Value of imports - Capital Goods 200,436,309 45,524,679
- Construction materials & related expenses 863,423,267 348,201,588
c. Expenditure in foreign currency (on payment basis)
Professional fees 17,265,684 678,524
Interest and finance charges 900,441 2,895,582
Travelling & Others 25,066,242 5,559,444
43,232,366 9,133,550
d. Value of stores and spares consumed (indigenous) included under other heads of expenditure
8,380,071 1,807,897
35
Thirteenth Annual Report 2008-09
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
e. Aggregate of expenditure debited to Profit & Loss Account under the following heads:
Salaries and allowances 388,103,390 267,160,698
Contribution to provident and other funds 15,984,712 12,651,444
Staff welfare expenses 20,217,424 17,667,830
Rent 25,359,695 25,601,953
Rates and taxes 25,969,819 48,306,516
Insurance 11,931,666 11,498,703
The Company is primarily engaged in the business of providing Terminalling and Engineering Procurement Construction services. The production and sale of such services cannot be expressed in generic unit. Hence, it is not possible to give the quantitative details or sales and certain information as required under paragraph 2, 4C, 4D, part II of schedule VI of the companies act, 1956.
22 The Company has invested in it's subsidiary viz. IOT Engineering & Construction Services Pte. Ltd, Singapore, Rs. 30,410,658 (Previous Year : Rs. 13,041,501) towards development expenses. However, being a long term and strategic investment, there is a reasonable certainty that there would be no diminution in the value of this investment, no provisioning has been considered necessary.
23 The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act 2006, and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.
24 Previous year's figures have been regrouped/rearranged wherever considered necessary to conform to the current year's presentation.
Signature to Schedules 1 to 20 For and on behalf of the Board of Directors
S Behuria Jayanta BhuyanChairman Managing Director
S C Jain Jatin Mavani
Director President - Finance & Company Secretary
Place: LondonDate : 15th May 2009
36
AUDITORS’ REPORT
To,The Board of Directors of IOT Infrastructure & Energy Services Limited (formerly known as Indian Oiltanking Limited)
1. We have audited the attached Consolidated Balance Sheet of IOT Infrastructure & Energy Services Limited (the 'Parent Company') (formerly known as Indian Oiltanking Limited), its subsidiaries and Joint Ventures collectively referred to as the 'the IOT Group' as at March 31, 2009, the Consolidated Profit & Loss Account and also the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Parent Company’s management and have been prepared by them on the basis of separate financial statements and other financial information regarding components. Our responsibility is to express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. We have not audited the financial statements of the Subsidiaries and Joint Venture whose financial statements reflect the total assets of Rs.4,669,483,962 as at March 31, 2009 and total revenue of Rs.4,839,833,957 for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion is based solely on the report of other auditors.
4. We report that the consolidated financial statements have been prepared by the Parent Company’s management in accordance with the requirements of the Accounting Standards (AS) 21 - Consolidated Financial Statements and (AS)27 - Financial Reporting of Interests in Joint Ventures prescribed by Companies (Accounting Standards) Rules, 2006 as amended from time to time.
5. Based on our audit and on consideration of reports of other auditors on separate financial statements and on the other financial information of the components, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached consolidated financial statements, read together with Note no. 7(a) in Schedule 20B of ‘Significant Accounting Policies and Notes to Accounts’ regarding overdue debtors aggregating to Rs.262,494,866 (including dues from Associates Rs.111,863,902), Note no. 8 in Schedule 20B regarding revenue of Rs.678,250,143 recognised in respect of additional claims and other notes in the said Schedule, give a true and fair view in conformity with the accounting principles generally accepted in India:
(i) In the case of Consolidated Balance Sheet, of state of affairs of the IOT Group as at March 31, 2009;
(ii) In the case of Consolidated Profit and Loss account, of the profit of the IOT Group for the year ended on that date; and
(iii) In the case of Consolidated Cash Flow Statement, of cash flows of the IOT Group for the year ended on that date.
for LODHA & CO.Chartered Accountants
R.P. BaradiyaPlace: Mumbai PartnerDate : 16th May, 2009 Membership No. 44101
37
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2009
2009 2009 2009 2008Share in Joint
IOT & Subsidiaries Venture Consolidated ConsolidatedSchedule Rupees Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders' Funds
Share capital 1 2,323,831,900 - 2,323,831,900 2,322,857,100
Reserves and Surplus 2 2,656,566,774 19,806,986 2,676,373,760 1,634,314,591
Share Application Money Pending allotment - - 1,210,800
Minority interest 338,726,110 338,726,110 176,977,032
Loan Funds
Secured Loans 3 3,518,771,993 296,571,217 3,815,343,210 2,198,580,194
Unsecured Loans 4 1,604,034,852 - 1,604,034,852 157,030,125
Deferred Tax Liability 346,340,972 30,794,235 377,135,207 418,543,971
10,788,272,601 347,172,438 11,135,445,039 6,909,513,813
APPLICATION OF FUNDS
Fixed Assets
Gross Block 5 6,039,790,696 616,836,214 6,656,626,910 4,470,657,825
Less : Depreciation 1,648,373,706 84,069,979 1,732,443,685 1,366,547,491
Net Block 4,391,416,990 532,766,235 4,924,183,225 3,104,110,334
Capital work-in-progress 253,648,819 667,674 254,316,493 407,303,898
4,645,065,809 533,433,909 5,178,499,718 3,511,414,232
Goodwill arising on Consolidation 311,304,422 - 311,304,422 167,839,701
Investments 6 521,022,402 (217,200,400) 303,822,002 1,053,226
Current Assets, Loans & Advances
Inventories 7 154,191,861 772,638 154,964,499 227,040,640
Sundry debtors 8 2,776,539,984 15,783,212 2,792,323,196 1,915,512,398
Cash and bank balances 9 1,336,433,865 48,647,093 1,385,080,958 1,525,104,694
Loans and advances 10 666,539,795 14,133,558 680,673,353 820,256,182
Other current assets 11 5,713,495,517 457,116 5,713,952,633 2,946,803,482
10,647,201,022 79,793,617 10,726,994,639 7,434,717,396
Less : Current Liabilities and Provisions
Current Liabilities 12 5,007,667,474 39,964,032 5,047,631,506 4,065,687,230
Provisions 13 329,474,706 8,890,656 338,365,362 141,968,351
5,337,142,180 48,854,688 5,385,996,868 4,207,655,581
Net Current Assets / (Liabilities) 5,310,058,842 30,938,929 5,340,997,771 3,227,061,814
Misc. Expenditure (to the extent not written off or adjusted) 821,126 - 821,126 2,144,839
10,788,272,601 347,172,438 11,135,445,039 6,909,513,813
Significant Accounting Policies and Notes to Accounts onConsolidated Financials Statements
20
SCHEDULES ANNEXED FORM PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
For and on behalf of the Board of Directors
As per our attached report of even date
For Lodha & Company
Chartered Accountants S Behuria Jayanta Bhuyan
Chairman Managing Director
R.P. Baradiya S C Jain Jatin Mavani Partner Director President Finance & Co. Secretary
Mumbai, LondonDate : 16th May 2009 Date : 15th May 2009
Thirteenth Annual Report 2008-09
38
2009 2009 2009 2008Share in Joint
IOTL & Subsidiaries Venture Consolidated ConsolidatedSchedule Rupees Rupees Rupees Rupees
INCOMEIncome from operations 14 15,583,951,496 190,391,170 15,774,342,666 10,891,962,539
Other income 15 109,227,029 2,128,330 111,355,359 60,288,396
15,693,178,525 192,519,500 15,885,698,025 10,952,250,935
EXPENDITURE
Personnel 16 453,429,465 14,862,679 468,292,144 213,929,779
Cost of construction and engineering services 17 12,234,773,893 70,947,055 12,305,720,948 9,236,481,768
Operating and other expenses 18 515,758,669 32,223,203 547,981,872 298,519,710
Depreciation 335,230,427 32,127,932 367,358,358 214,251,911
Interest and finance charges 19 366,437,226 29,886,162 396,323,388 207,501,331
13,905,629,680 180,047,030 14,085,676,710 10,170,684,500
Less : Transferred to Capital Work in Progress - - - 3,219,307
(Refer Note 10 (a) in Schedule 20)
13,905,629,680 180,047,030 14,085,676,710 10,167,465,193
Profit before Tax 1,787,548,845 12,472,470 1,800,021,315 784,785,742
Provision for taxation
Current 530,354,047 3,400,333 533,754,380 230,273,183
Deferred (43,161,604) 1,752,839 (41,408,764) (5,038,117)
Fringe Benefit Tax 10,293,564 231,900 10,525,464 8,783,855
MAT Credit entitlement - - - (425,000)
Tax provision short/(excess) earlier years 447,187 - 447,187 114,761
Profit after Tax 1,289,615,651 7,087,397 1,296,703,047 551,191,821
Less: Minority Interest 332,296,655 - 332,296,655 76,197,269
Profit after Tax after Minority Shareholders Interest 957,318,995 7,087,397 964,406,392 474,994,553
Basic and diluted earnings per share 4.15 2.92
Face Value of Equity Share 10 10
Significant Accounting Policies and Notes to Accounts onConsolidated Financials Statements 20
SCHEDULES ANNEXED FORM PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2009
Signature to Schedules 1 to 20 For and on behalf of the Board of Directors
S Behuria Jayanta BhuyanChairman Managing Director
S C Jain Jatin Mavani
Director President - Finance & Company SecretaryPlace: LondonDate : 15th May 2009
39
CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2009
CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 20092009 2009 2008
Rupees Rupees RupeesA. Cash Flow from Operating Activities
Profit before taxation 1,800,021,315 784,785,743Adjustments for :
Depreciation 367,358,359 214,251,912Foreign Exchange Gain/Loss-Unrealised (net) 382,056,220 (7,198,095)(Gain) / loss on disposal of fixed assets 119,272 (21,430,044)Provision for Warranty Costs (net) (2,575,250) 28,946,541Contracts written back (1,111,983) (5,711,527)Interest income (48,134,635) (11,684,073)Profit on sale of current investments - (8,834)Interest and finance charges 532,595,256 226,357,726Income from Current Investments (37,273) (32,274,677)
1,230,269,966 391,248,930Operating profit before working capital changes 3,030,291,281 1,176,034,673(Increase)/Decrease in
Inventories 126,409,623 (186,177,175)Sundry debtors (432,786,818) (843,353,498)Other receivables 69,880,855 (768,355,716)Other current assets (1,708,576,507) (1,740,417,898)
Increase/(Decrease) inCurrent liabilities and provisions (780,466,559) 1,953,301,277
(2,725,539,405) (1,585,003,011)Cash generated from operations 304,751,877 (408,968,338)Income taxes (Including FBT) paid (net of refunds) (530,282,656) (218,768,944)Net Cash from Operating Activities - A (225,530,780) (627,737,282)B. Cash Flow from Investing Activities
Purchase of fixed assets (1,626,104,242) (791,224,299)Sale proceeds from disposal of fixed assets 2,266,837 38,247,172Purchase of Goodwill (125,699,553) (199,828,840)Equity investment in Joint Venture/Subsidiary Company -Investment in Mutual Funds 1,017,724 (907,724)Income from Current Investments 37,273 31,875,787Decrease/Increase in Deposit in Escrow A/c 10,582,526 (1,096,870)Interest received 41,476,432 28,492,530
Net Cash used in Investing Activities - B (1,696,423,002) (894,442,243)C. Cash Flow from Financing Activities
Share Application Money Received - 1210799.6Proceeds from issue of shares 251,400 1605590405Proceeds from long-term borrowings 1,516,888,657 637,889,289Increase / (decrease) in short-term bank borrowings 946,813,688 157,030,125Dividend Paid (incl Dividend tax) (165,422,243) (6,750,093)Interest and finance charges paid (506,018,930) (244,446,480)Net Cash from Financing Activities - C 1,792,512,573 2,150,524,045Net increase/(decrease) in Cash and cash equivalents (A+B+C) (129,441,209) 628,344,520Cash and cash equivalents as on April 1, 2008 1,508,428,386 880,083,866Cash and cash equivalents as on March 31, 2009 1,378,987,177 1,508,428,386Deposit in Escrow Account 6,093,782 16,676,307Cash & Bank Balances as per Balance Sheet 1,385,080,959 1,525,104,694
Notes:1. Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3: "Cash Flow Statements" issued by the Institute
of Chartered Accountants of India.2. Cash and cash equivalents include cash on hand, balances with banks in current and deposit accounts, and current investments in Liquid Mutual Funds, margin
money deposited with bank but excludes deposit in escrow account.3. Previous year's figures have been regrouped/ reclassified wherever applicable.4. Figures in bracket indicate cash outflow.
As per our attached report of even date For and on behalf of the Board of Directors
For Lodha & Co. S Behuria Jayanta BhuyanChartered Accountants Chairman Managing Director
R. P. Baradiya S C Jain Jatin MavaniPartner Director President - Finance & Company Secretary
Place: Mumbai Place: LondonDate : 16th May 2009 Date : 15th May 2009
Thirteenth Annual Report 2008-09
40
SCHEDULES TO THE FINANCIAL STATEMENTS
2009 2009 2009 2008Share in Joint
SCHEDULES TO THE ACCOUNTS IOTL & Subsidiaries Venture Consolidated ConsolidatedRupees Rupees Rupees Rupees
1. SHARE CAPITAL
Authorised
300,000,000 Equity shares of Rs. 10 each 3,000,000,000 - 3,000,000,000 3,000,000,000
Issued, Subscribed and Paid-up
232,383,190 Equity shares of Rs. 10 each fully paid up (2008: 232,285,710) 2,323,831,900 - 2,323,831,900 2,322,857,100
2,323,831,900 - 2,323,831,900 2,322,857,100
2. RESERVES AND SURPLUS
General reserve 104,660,643 3,357,430 108,018,073 133,735,506
Foreign Currency Translation Reserve Account 74,085,151 - 74,085,151 (4,233,660)
Share Premium 457,630,240 - 457,630,240 457,142,840
Debt Redemption Reserve 200,000,000 - 200,000,000 160,000,000
Profit and loss account 1,820,190,740 16,449,556 1,836,640,296 887,669,905
2,656,566,774 19,806,986 2,676,373,760 1,634,314,591
3. SECURED LOANS
From Banks :
Term loans 2,127,590,360 296,571,217 2,424,161,577 1,712,931,600
Interest Accrued and due - - - 1,255,006
Vehicle loans 8,516,319 - 8,516,319 10,196,961
Working capital facility 1,382,665,314 - 1,382,665,314 474,196,627
3,518,771,993 296,571,217 3,815,343,210 2,198,580,194
4. UNSECURED LOANS
Short Term Loans and Advances
From Banks 500,000,000 - 500,000,000 157,030,125
From Others 1,104,034,852 - 1,104,034,852
1,604,034,852 - 1,604,034,852 157,030,125
41
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
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1,01
4,28
8,89
084
,772
,779
34,3
6584
,807
,144
929,
396,
605
85,1
4192
9,48
1,74
6
Tota
l
6,03
9,79
0,69
661
6,83
6,21
46,
656,
626,
910
1,64
8,37
3,70
684
,069
,978
1,73
2,44
3,68
44,
391,
416,
990
532,
766,
235
4,92
4,18
3,22
5
Pre
viou
s ye
ar4,
178,
480,
344
292,
177,
481
4,47
0,65
7,82
51,
313,
496,
554
53,0
50,9
371,
366,
547,
491
2,86
4,98
3,79
023
9,12
6,54
43,
104,
110,
334
Cap
ital w
ork
in p
rogr
ess
- P
lant
& M
achi
nery
(In
clud
ing
adva
nces
Rs.
122
,319
,248
Pre
viou
s ye
ar :
Rs.
8,5
40,3
23)
254,
316,
493
Not
es :
1.Th
e Le
ase
Dee
d w
ith C
IDC
O in
res
pect
of
the
Leas
ehol
d La
nd is
pen
ding
exe
cutio
n. L
ease
is f
or f
or th
e pe
riod
of 6
0 ye
ars
com
men
cing
fro
m 1
4th
Aug
ust,
1997
.2.
Bui
ldin
gs in
clud
e R
s.14
,752
,153
(20
08 :
Rs.
14,7
52,1
53)
bein
g th
e co
st o
f im
mov
able
ass
ets
cons
truc
ted
on la
nd le
ased
to In
dian
Oil
Cor
pora
tion
Lim
ited
by J
awah
arla
l Neh
ru P
ort T
rust
(JN
PT)
3.R
ailw
ay s
idin
gs in
clud
e R
s.12
0,40
6,69
2 (2
008
: Rs.
120,
406,
692)
bei
ng th
e co
st o
f as
sets
con
stru
cted
on
land
leas
ed to
Rai
lway
s by
JN
PT.
Lea
se is
for
the
perio
d of
60
year
s co
mm
enci
ng f
rom
8th
Jul
y, 1
998.
4.B
uild
ings
incl
ude
Rs.
20,3
86,2
88 (
2008
: R
s. 2
0,38
6288
) be
ing
the
cost
of
offic
e pu
rcha
sed
at K
olka
ta, i
n re
psec
t of
whi
ch a
gree
men
t is
pend
ing
for
exec
utio
n.5.
Add
ition
to F
ixed
ass
ets
incl
ude
Rs.
16,9
84,1
13 (
prev
ious
yea
r R
s. N
il) o
n ac
coun
t of
exch
ange
flu
ctua
tions
.G
ross
Blo
ckD
epre
ciat
ion
Net
Blo
ck31
.03.
0931
.03.
0931
.03.
09R
upee
sR
upee
sR
upee
s
6.A
s at
the
end
of th
e ye
ar, f
ixed
ass
ets
incl
ude
for
CP
CL
LPG
Pla
ntA
sset
s co
nstr
ucte
d by
the
Com
pany
on
land
ow
ned
by C
henn
ai P
etro
leum
Cor
pora
tion
Lim
ited,
LP
G T
erm
inal
and
lice
nced
to th
e C
ompa
ny f
or a
perio
d of
10
year
s un
der
a sp
ecifi
ed c
ontr
act,
inte
r-al
ia, f
or r
ende
ring
Term
inal
ling
Ser
vice
s :
Bui
ldin
gs17
2,42
5,37
490
,958
,460
81,4
66,9
14(1
7242
5374
)(7
3595
923)
(988
2945
1)P
lant
and
mac
hine
ry30
1,61
0,36
515
9,69
7,98
914
1,91
2,37
6(3
01,6
10,3
64)
(129
,523
,094
)(1
72,0
87,2
70)
Furn
iture
, fix
ture
s an
d eq
uipm
ent
2,66
3,66
71,
853,
759
809,
908
(264
6267
)(3
0547
0)(2
3407
97)
Tota
l47
6,69
9,40
625
2,51
0,20
822
4,18
9,19
8
7.A
s at
the
end
of th
e ye
ar, f
ixed
ass
ets
incl
ude
for
CP
CL
Bot
tling
Pla
ntA
sset
s co
nstr
ucte
d by
the
Com
pany
on
land
ow
ned
by C
henn
ai P
etro
leum
Cor
pora
tion
Lim
ited
and
licen
ced
to th
e C
ompa
ny f
or a
per
iod
of 1
0 ye
ars
unde
r a
spec
ified
con
trac
t, in
ter-
alia
, for
LP
G B
ottli
ng p
lant
Ser
vice
s :
Bui
ldin
gs98
,649
,221
11,2
93,1
2687
,356
,095
(95,
040,
545)
(1,4
28,2
05)
(93,
612,
340)
Pla
nt a
nd m
achi
nery
133,
045,
145
14,1
86,9
1611
8,85
8,22
9(1
17,3
63,7
77)
(1,7
73,8
65)
(115
,589
,912
)Fu
rnitu
re, f
ixtu
res
and
equi
pmen
t75
4,73
419
0,23
256
4,50
2(4
09,7
63)
(17,
385)
(392
,378
)
Tota
l23
2,44
9,10
025
,670
,274
206,
778,
826
*Fig
ures
in b
rack
et r
epre
sent
s P
revi
ous
year
Thirteenth Annual Report 2008-09
42
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
2009 2009 2009 2008Share in Joint
IOTL & Subsidiaries Venture Consolidated ConsolidatedRupees Rupees Rupees Rupees
6. INVESTMENTS(valued at cost)Unquoted Shares100,20,040 equity shares of Rs.10 each, fully paid up inZuari Indian Oiltanking Limited 100,200,400 (100,200,400) - -
11,700,000 (2008:- 11,700,000) equity shares of Rs. 10 each, 117,000,000 (117,000,000) - -fully paid up in Indian Oil Skytanking Ltd.
Investment in Newsco Directional Support Services Inc 303,813,000 303,813,00015000 common class A shares (previous year : NIL)
Current InvestmentsUnits of US 64 Mutual Fund - - 136,500Birla Sunlife Liquid Plus Instl.(Daily Dividend Reinvestment Plan) - 90,711 Units - - - 907,724NSC Certificated at Cost (Lodged as Security Deposit -Matured but not encashed) 9,000 - 9,000 9,000Rs.7000, 5% Non-redeemable Regd. Mortgage Debenture 1 - 1 1Hospital and Medical Research Centre Ltd. (at WDV) 1 - 1 1
521,022,402 (217,200,400) 303,822,002 1,053,226
7. INVENTORIES(as verified, valued and certified by the management)(valued at lower of cost and net realisable value)Stores and spares 23,683,588 772,638 24,456,226 22,488,420Construction materials 130,508,273 - 130,508,273 204,552,220
154,191,861 772,638 154,964,499 227,040,640
8. SUNDRY DEBTORS(Unsecured)Outstanding over six months
Considered good 784,551,306 36,936 784,588,242 621,277,752Considered doubtful 10,726,330 - 10,726,330 10,619,493
795,277,636 36,936 795,314,572 631,897,245Other debts, considered good 1,991,988,678 15,746,276 2,007,734,954 1,294,234,647
2,787,266,314 15,783,212 2,803,049,526 1,926,131,892Less : Provision for doubtful debts 10,726,330 - 10,726,330 10,619,494
2,776,539,984 15,783,212 2,792,323,196 1,915,512,398
9. CASH AND BANK BALANCESCash on hand 14,194,823 19,392 14,214,215 9,793,781Balances with scheduled banksIn current accounts 132,743,584 7,352,448 140,096,032 146,034,309In unpaid dividend account 587,087 - 587,087 544,959In deposit accounts 1,188,908,371 35,181,472 1,224,089,842 1,352,055,337(Includes Rs. 1,18,00,000 kept as margin with the bank fornon-fund facilities)In Fixed Deposit Escrow Account - 6,093,782 6,093,782 16,676,307
1,336,433,865 48,647,093 1,385,080,958 1,525,104,694
43
Thirteenth Annual Report 2008-09
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
2009 2009 2009 2008Share in Joint
IOTL & Subsidiaries Venture Consolidated ConsolidatedRupees Rupees Rupees Rupees
10. LOANS AND ADVANCES(Unsecured)
Advances recoverable in cash or in kind or for valueto be received (Refer Note 8 in Schedule '20')
Considered good 547,607,148 1,157,622 548,764,770 619,245,915Considered doubtful 3,553,648 - 3,553,648 3,553,648
551,160,796 1,157,622 552,318,418 622,799,563
Less : Provision for doubtful advances 3,553,648 - 3,553,648 3,553,648
547,607,148 1,157,622 548,764,770 619,245,915Advance income tax (net of provision for taxation) 44,906,362 3,174,618 48,080,980 49,726,604Advance Fringe Benefit tax (net of provisions) - 12,519 12,519 (27,384)Advance Against Equity: 13,125,000 - 13,125,000 100,000,000MAT credit entitlement - - - 425,000Deposits with Government authorities and others 60,901,285 9,788,799 70,690,084 50,886,047
666,539,795 14,133,558 680,673,353 820,256,18211. OTHER CURRENT ASSETS
Work-in-progress : construction contractsUncompleted work and value of work done(at estimated net realisable value) 30,953,283,723 - 30,953,283,723 16,399,272,574Less : Advances 622,290,319 - 622,290,319 810,774,905Less : Progress billings 25,443,229,637 - 25,443,229,637 13,156,009,818
4,887,763,767 - 4,887,763,767 2,432,487,851Add : Recoverable expenses 358,260,139 358,260,139 66,649,192Retention money receivable 456,981,501 - 456,981,501 111,899,571
5,703,005,407 - 5,703,005,407 2,611,036,614Construction Material at Project SitesOthers 5,226,316 - 5,226,316 332,659,907
5,708,231,723 - 5,708,231,723 2,943,696,521Interest receivable 5,263,794 457,116 5,720,910 3,106,961
5,713,495,517 457,116 5,713,952,633 2,946,803,482
12. CURRENT LIABILITIESSundry creditors 4,467,086,739 35,512,142 4,502,598,881 3,268,812,560Advance from Customers 97,222,013 2,599,727 99,821,740 79,122,054Interest accrued but not due 9,117,448 - 9,117,448 781,883Unpaid Dividend 587,088 - 587,088 544,959Other liabilities 433,654,186 1,852,163 435,506,349 716,425,774
5,007,667,474 39,964,032 5,047,631,506 4,065,687,230
13. PROVISIONSProvision for Taxation 212,880,927 333 212,881,260 24,617,435Leave encashment 51,837,015 98,114 51,935,129 26,078,019Proposed Dividend (5,510,730) 7,515,030 2,004,300 16,515,030Add: Tax on Dividend 764,775 1,277,179 2,041,954 2,806,729Warranty and other costs 69,502,719 - 69,502,719 71,951,138
329,474,706 8,890,656 338,365,362 141,968,351
14. INCOME FROM OPERATIONSTerminalling services 880,190,517 190,391,170 1,070,581,687 651,309,856Construction and engineering services 14,426,372,941 - 14,426,372,941 9,944,379,010Other sales 277,388,038 - 277,388,038 296,273,673
15,583,951,496 190,391,170 15,774,342,666 10,891,962,53915. OTHER INCOME
Exchange gain/loss realised/unrealised 99,119,403 - 99,119,403 -Rent received 5,033,568 - 5,033,568 5,327,174Profit on sale of fixed assets 521,023 101,454 622,477 21,430,044Income from Current Investments 37,273 - 37,273 32,283,512Miscellaneous receipts 4,515,762 2,026,876 6,542,638 1,247,666
109,227,029 2,128,330 111,355,359 60,288,396
44
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
2009 2009 2009 2008Share in Joint
IOTL & Subsidiaries Venture Consolidated ConsolidatedRupees Rupees Rupees Rupees
16. PERSONNELSalaries and allowances 420,392,260 12,347,870 432,740,130 194,259,930Contribution to provident and other funds 16,088,544 573,758 16,662,302 7,418,077Staff welfare expenses 16,948,661 1,941,051 18,889,712 12,251,772
453,429,465 14,862,679 468,292,144 213,929,779
17. COST OF CONSTRUCTION AND ENGINEERING SERVICESConstruction materials 6,608,228,450 - 6,608,228,450 3,457,406,597Sub-contracting costs 4,073,489,029 - 4,073,489,029 4,950,086,375Salaries and allowances 654,092,719 - 654,092,719 329,029,303Contribution to provident and other funds 24,498,218 - 24,498,218 13,320,250Staff welfare expenses 19,185,114 - 19,185,114 16,280,568Rent 16,302,021 - 16,302,021 30,064,224Rates and taxes 31,364,032 - 31,364,032 46,506,546Repairs and maintenance 6,342,451 - 6,342,451 2,638,380Insurance 11,873,400 - 11,873,400 9,571,024Communication expenses 11,410,951 - 11,410,951 11,499,513Legal and professional charges 263,123,906 - 263,123,906 166,412,161Traveling and conveyance 79,764,258 - 79,764,258 60,311,145General and administrative expenses 383,573,843 70,947,055 454,520,898 164,568,335Increase/(Decrease) in provision for warranty and other costs 159,804 - 159,804 30,685,270
12,183,408,196 70,947,055 12,254,355,251 9,288,379,691(Increase)/Decrease in work-in-progress at costOpening work-in-progress 57,714,262 - 57,714,262 11,527,866Closing work-in-progress (6,348,565) - (6,348,565) (63,425,789)
51,365,697 - 51,365,697 (51,897,923)
12,234,773,893 70,947,055 12,305,720,948 9,236,481,768
18. OPERATING AND OTHER EXPENSESPower and fuel 31,747,639 6,471,323 38,218,962 27,443,488Rent 37,194,134 8,743,154 45,937,288 26,723,660Rates and taxes 10,525,075 357,939 10,883,014 5,902,486Outsource Manpower Cost - 1,335,588 1,335,588 1,256,184Consumables - 2,163,007 2,163,007 1,437,630Insurance 8,081,771 1,230,330 9,312,101 7,299,281Repairs and maintenance
Buildings 6,899,516 516,033 7,415,549 6,807,268Plant and machinery 14,428,670 4,109,702 18,538,372 13,824,037Others 36,532,563 922,339 37,454,902 15,143,592
Communication expenses 13,640,502 512,116 14,152,619 8,738,810Wharfage charges 36,607,829 - 36,607,829 38,647,846Miscellaneous terminalling expenses 50,459,966 994,261 51,454,227 27,874,290Auditors' Remuneration 2,707,259 54,278 2,761,537 2,091,024Legal and professional charges 117,296,330 849,821 118,146,151 41,750,757Traveling and conveyance 66,815,872 1,756,179 68,572,051 40,018,556Provision for doubtful debt/advances 276,834 - 276,834 -General and administrative expenses (Refer Note 12(a) in Schedule '20') 82,128,772 2,163,759 84,292,531 33,537,062Loss on sale / discard of fixed assets (net) 344,936 43,375 388,311 -Preliminary Expenses & Shares Expenses W/off 71,000 - 71,000 23,740
515,758,669 32,223,203 547,981,872 298,519,710
19. INTEREST AND FINANCE CHARGESInterest on fixed loans (net) 213,226,996 33,075,324 246,302,320 123,267,525Interest others 181,036,879 339 181,037,218 114,783,190Other finance charges 52,222,643 228,824 52,451,467 19,579,994Less :Interest Received 80,049,292 3,418,325 83,467,617 50,129,378
366,437,226 29,886,162 396,323,388 207,501,331
45
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS ON CONSOLIDATED FINANCIAL STATEMENTS1. Principles of Consolidation:
1.1 The Consolidated Financial Statement relates to Indian Oiltanking Limited (Parent Company), its Subsidiaries and Joint Venture Companies. The Consolidated Financial Statements have been prepared on the following basis:a. The Consolidated Financial Statements of the Parent Company and its Subsidiaries have been compiled on a line-by-line basis by adding
together the book values of like items of assets, liabilities, income and expenses, after eliminating the intra-group balances, intra-group transactions and unrealised profits or losses in accordance with Accounting Standard (AS-21) on Consolidated Financial Statements issued by The Institute of Chartered Accountants of India.
b. The financial statements of Joint Venture has been combined by applying proportionate consolidation method on a line-by-line basis on items of assets, liabilities, income, and expenses after eliminating proportionate share of unrealised profits or losses in accordance with Accounting Standard (AS-27) on Financial Reporting of Interests in Joint Ventures issued by the Institute of Chartered Accountants of India.
c. The Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and events in similar circumstances and are presented to the extent possible, in the manner as the Parent Company's separate financial statements.
d. The excess/shortfall of the cost to the Parent Company of its investments in the respective Subsidiary and Joint Venture Company is recognised in the financial statements as Goodwill/Capital Reserve respectively as per equity method of valuation.
1.2 The Consolidated Financial Statements includes the results of the following entities:
Sr Proportion of Proportion ofNo. ownership interest as ownership interest as
Name of Company Country of Incorporation on 31.03.09 as on 31.03.08
1 Stewarts and Lloyds of India Ltd (S&L)(Subsidiary) India 55.46% 55.46%
2 IOT Engineering and Construction Services Pte. Ltd Singapore 100.00% 100.00%(Subsidiary)
3 Indian Oiltanking Engineering and Construction Services Oman 70.00% 70.00%LLC. Oman (Subsidiary)
4 IOT Engineering Projects Ltd ( Subsidiary) India 100.00% 26.00%
5 IOT Anwesha Engineering & Construction Ltd. India 81.00% 81.00%(Subsidiary) from 8th January, 2008
6 IOT Design & Engineering Ltd (Subsidiary) India 100.00% 100.00%
7 IOT Cuddalore Construction & Terminalling Ltd India 100.00% -(Subsidiary)
8 IOT Canada Limited (Subsidiary) * Canada 100.00% -
9 Zuari Indian Oiltanking Limited (ZIOTL) India 50.00% 50.00%(Joint Venture)
10 IndianOil Skytanking Ltd (Joint Venture) India 33.33% 33.33%
11 Newsco Directional & Horizontal Drilling Services (Asia) Canada 49.99% -Inc. (Subsidiary of IOT Canada Ltd.)
* Refer Note no. 12 (d) below.
2. Other Significant Accounting PoliciesMost of the accounting policies of the reporting Company and that of its Subsidiaries, Joint Ventures are similar. These are set out in the Statement of Significant Accounting Policies of the respective companies. The accounting policies of all the companies are in line with the generally accepted accounting principles in India.All the activities of the Foreign subsidiaries are carried out with the significant degree of autonomy from those of the parent. Accordingly as per the provisions of the AS-11 "Effects of changes in Foreign Exchange rates", these operations have been classified as non-integral operations and therefore all the assets and liabilities, both monetary and non-monetary are translated at the closing rates while the income and expenses are translated at the average rate for the year. The resulting exchange difference are accumulated in the foreign currency translation reserve until the disposal of the net investment.Intangible assets are amortised, on straight line basis commencing from the date, asset is avaialble for its use, over their respective individual estimated useful life as estimated by the management :
Customer Contracts 4 yearsCustomer relationships, Goodwill 10 years
Goodwill arising on consolidation is not amortised.
3. Contingent Liabilities not provided for in respect of : (Rupees)2009 2008
a. Claims against the Company from a customer not acknowledged as debts, being the amountdeducted by the customer from the amount due to the company - 438,130
b. Right of way charges, rent and other matters 15,069,138 13,844,858c. Income tax matters 20,231,562 17,973,631d. Service Tax matters 159,136,464 -e. Sales Tax 3,674,185 8,242,686f. Other Claims * 1,234,000 1,234,000
Thirteenth Annual Report 2008-09
46
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS ON CONSOLIDATED FINANCIAL STATEMENTSLiquidated Damages, as may be levied for completion of certain contracts beyond stipulated time for which negotiations on reasonable grounds are on - amount presently not ascertainable. In the opinion of the management amount, if any, payable would not be significant.*In respect of S&L (Subsidiary), 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 the recovery against the same Sub-Contractor which is pending before the Calcutta High Court. Both the litigations are pending and sub-judice.
4 Disclosure of provisions as per AS-29 "Provisions, Contingent Liabilities and Contingent Assets" is as follows:Rupees
Items Opening Balance Additional provisions made Amount used/ Amount reversed Closingduring the year payments made Balance
during the year
Warranty and other Costs 71,951,138 159,804 2,148,900 459,323 69,502,719
Previous Year 46,976,868 30,685,270 - 5,711,000 71,951,138
*Figures in brackets represents Previous year
5. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs. 281,313,016 (2008 Rs. 378,338,566).
6. According to the Employee Stock Option Plan (ESOP) 2007, an aggregate of 4,388,373 options representing 4,388,373 equity shares of face value of Rs. 10 each were made available for grant to eligible employees, managing director and non-executive directors except for promoter/director of the Company and its subsidiaries/holding company. These options are available for exercise over a period of 3 years.
Particulars Managing Director Others Total no of Options
Outstanding as at 1st April, 2008 (Nos.) 250,000 3,363,955 3,613,955
(250000) (4138373) (4388373)
Granted (Nos.) - 317,690 317,690
Forfeited (Nos.) - - -
Exercised (Nos.) - 16,760 16,760
(80720) (80,720)
Lapsed (Nos.) - 671,920 671,920
(693,698) (693,698)
Outstanding as at 31st March, 2009 (Nos.) 250,000 2,992,965 3,242,965
(250000) (3363955) (3613955)
The estimated fair value computed on the basis of Black Scholes pricing model, of each stock option granted for Performance ESOPs is within the range of Rs 5.18 to Rs. 8.40 per option. The key assumptions used to estimate the fair value of options are:
Risk Free Interest Rate 8.07%
Expected Life 4 years
Expected Volatility NIL
Expected dividend yield NIL
7 In case of Parent Company, Sundry debtors include:-
a. Overdues of Rs. 262,494,866 (Previous Year : Rs.302,913,289) including from Associates Rs.111,863,902 (Previous Year : Rs.172,689,254), which in the opinion of the management are fully realisable from the concerned parties in due course of time.
b. Amounts due from companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956
Rupees2009 2008
Chennai Petroleum Corporation Limited 38,017,344 32,938,270
8 The Parent Company has recognised as revenue Rs. 678,250,143 (Previous year Rs. 99,626,685) including dues of Rs. 610,500,000 from Indian Oil Corporation, an associate company, in respect of additional claims for extra work/s carried out, which was not included in the original contract entered by the Company. In view of the past experience in such matters, the management is confident of obtaining changed orders and receiving payments in due course of time.
47
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
9. Advances recoverable in cash or in kind include overdues of Rs. 2,949,084 (2008: Rs.3,377,084) relating to services tax, customs etc which in the opinion of the management are fully realisable from the concerned parties.
10 a. Plant & Machinery, installed and commissioned on 6th February, 2008 in respect of LPG Bottling plant at Chennai (a BOOT project) includes Pre-operative Expenditure being transferred from P&L Account as under :-
Head of Account 2009 2008(Amount in Rs.) (Amount in Rs.)
Salaries &Allowances - 2,466,088
Contribution to PF and other Funds - 47,178
Staff welfare Expenses - 99,317
Rates & taxes - 12,810
Insurance - 237,079
Traveling & Conveyance - 388,162
Communication Expenses - 48,772
Legal & Professional Charges - 500
General & Admn. Expenses - 432,536
Total - 3,732,443
b. In respect of S&L (Subsidiary), Capital work in progress includes Rs. 5,021,830 (2008: Rs. 4,192,550) advances on account of capital expenditure and represents expenditure towards implementation of ERP system.
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS ON CONSOLIDATED FINANCIAL STATEMENTS
11 a. In the opinion of the management, the Current Assets, Loans & Advances have a value on realisation in the ordinary course of business, at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and other known liabilities is adequate and not in excess of what is required.
b. The accounts in certain debtors, loans and advances given/ received and creditors are, however, subject to confirmations and adjustments, if any. Such adjustments, in the opinion of the management, are not likely to be material and will be carried out as and when ascertained.
12 a. The net exchange fluctuations arising on foreign currency transactions amounting to Rs. 99,119,403 has been credited to Other Income in Schedule "15" (2008: Rs. 1,812,999 has been debited to General and Administrative Expenses under Schedule"18")
b. Pursuant to the retrospective amendment (w.e.f 7th December, 2006) to Accounting Standard (AS11) on affects of changes in foreign exchange rates vide GSR notification 225(E) dated 31st March, 2009, The Company has changed its accounting policy to charge the foreign currency exchange difference to Profit & loss account on amounts borrowed for acquisition of fixed assets to adjust the same to the carrying cost of fixed assets. Due to the change in the policy the profit for the year has increased by Rs. 16,984,113 and consequentially the fixed assets (net block ) has increased by the said amount.
c. In case of Indianoil Skytanking Limited (Joint Venture), the Company has withdrawn Rs.11,635,666 (deposited in 2008 : 15,296,644) in Escrow by way of Fixed Deposit with the bank pursuant to escrow agreement dated 18th December, 2006 entered into between the Company, Bank and Bangalore International Airport Limited.
d. IOT Canada Limited ((subsidiary) through a share purchase agreement, acquired, Newsco Directional & Horizontal Drilling Services (Asia) Inc. (Step-down subsidiary). The agreement calls for a purchase of 100% of the outstanding shares of Newsco Asia over a 36 month period. In the first stage of the acquisition the Company acquired 49.99% of the outstanding shares of the company for consideration of (USD 10 million) approx. Rs.42,10,00,000 in cash and (USD 6.136 million) approx. 32,04,50,000 promissory notes. The second stage of the acquisition will occur when the company pays (USD 6.75 million) approx. Rs.5,73,85,500 in March of 2010 and the third and final stage of the acquisition will occur on September 14, 2011 with an additional payment of (USD 6.75 million) approx. Rs.5,73,85,500. The results of operations of this step-down subsidiary have been consolidated from the date of acquisition by IOT Canada Limited. A unanimous shareholders’ agreement in place between the Newsco Asia Inc. and the Newsco Inc. Canada reflects IOT’s 100% entitlement to all of the income and gains derived from, and to be derived from, the business effective on the intial date i.e.15th August, 2008.
13 a. Disclosure in respect of construction contracts in progress as at the end of the year pursuant to Accounting Standard '7'
2009 2008Rupees Rupees
Gross amount due from customers (unbilled revenue) 6,144,188,146 8,278,601,794
Gross amount due to customers 26,302,655 274,004,151
b. The completion of construction contracts and management's estimation of future costs to be incurred on construction contracts in progress for the purpose of calculating their net realisable value have been relied upon by the Auditors, these being matters of technical nature and owing to the uncertainties of the future.
Thirteenth Annual Report 2008-09
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14. Disclosure is in respect of Related Parties pursuant to Accounting Standard '18'
A. List of Related Parties :
(i) Parties where control exists - NIL
(ii) Other Related Parties with whom the Company has entered into transactions during the year :
Associates
Indian Oil Corporation Limited
Oiltanking GmbH
Oiltanking Singapore
Joint Venture - NIL
Directors and Key Management PersonnelMr. Jayanta Bhuyan, Managing Director
Note : Related Parties are as identified by the Company and relied upon by the Auditors.
B. Details of transactions with the Related Parties in the ordinary course of business 2009 2008(i) Associates Rupees Rupees
With IOCLTerminalling services charges received/receivable 58,010,677 51,047,983Construction and engineering services rendered 6,372,601,678 4,156,691,420Recoverable expenditure 879,426,379 1,644,160With Oiltanking GmbHEngineering Services received/receivable 408,814 0Reimbursement of expenditure 6,843,781 2,646,515OT SingaporeO & M Services rendered 210,110 842,451(ii) Directors / Key Management PersonnelRemuneration to Managing Director 5,102,909 4,774,867
C. Outstanding balances in respect of the Related PartiesAssociatesReceivables( from IOCL) 566,112,911 405,955,558Receivables( from OT Singapore) 55,414 0Payable to OT 5,902,828 2,073,194Advance Received from (IOCL) 521,488,541 713,877,232
D. Amounts pertaining to related parties written off/(Written Back): (Net)Indian Oil Corporation Ltd 86,246 -
Notes :a) During the year an amount of Rs. 34,560 receivable from one of the associates has been written off.b) During the year an amount of Rs. 51,686 receivable from one of the associates has been provided for.
SCHEDULE 20 SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO ACCOUNTS ON CONSOLIDATED FINANCIAL STATEMENTS15 Segment Reporting
i. Primary segments (business segments)The Companies operations comprise of (i) terminalling services from own terminals and operations and maintenance services in respect of client terminals and (ii) construction and engineering services. The revenues, expenses, assets and liabilities under the reportable segments are tabulated below.
RupeesConstruction
Terminalling & Engineering Totala. Revenue from external customers 1,070,581,687 14,703,760,979 15,774,342,666
651,309,856 10,240,652,683 10,891,962,539
b. Segment results 407,421,195 2,006,565,128 2,413,986,322262,421,372 911,651,104 1,224,201,854
Less : Unallocable expenses net of unallocable income 217,641,620131,656,025
: Interest 396,323,388207,501,331
Profit before tax 1,800,021,315784,785,743
Provision for taxation (current and deferred) 502,871,081233,593,921
Profit after tax 1,297,150,235551,191,822
SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
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SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
c. Carrying amount of Segment Assets 4,042,141,327 8,928,814,556 12,970,955,8832,908,637,685 7,267,571,288 10,176,208,973
Unallocated Assets 3,239,181,602773,120,720
Total Assets 16,210,137,48510,949,329,693
d. Carrying amount of Segment Liabilities 1,896,767,425 4,533,907,228 6,430,674,6531,681,397,538 4,279,602,524 5,961,000,062
Unallocated Liabilities 3,147,800,632863,779,684
Total Liabilities 9,578,475,2866,824,779,746
e. Cost incurred to acquire Segment fixed assets during the year 492,495,506 1,428,216,598 1,920,712,105216,170,247 541,872,799 758,043,046
Unallocated acquisitions 5,331,14626,649,582
Total 1,926,043,250784,692,628
f. Depreciation / Amortisation 216,321,957 143,688,052 360,010,009173,337,899 34,637,838 207,975,737
Unallocable Depreciation / Amortisation 7,348,3506,276,174
Total 367,358,358214,251,911
ii. Secondary segment (geographic segments)The Companies operations are being carried in (i)India & other countries (ii) Oman. The revenues, expenses, assets and liabilities under these secondary segments are tabulated below.
RupeesOman Operations India & other Operations Total
a. Revenue from external customers 3,518,405,539 12,255,937,127 15,774,342,6661,772,822,762 9,119,139,777 10,891,962,539
b. Segment results 1,166,480,648 1,247,505,674 2,413,986,322209,037,370 965,035,107 1,174,072,476
Less : Unallocable expenses net of unallocable income 217,641,620131,656,025
: Interest 396,323,388257,630,709
Profit before tax 1,800,021,315784,785,743
Provision for taxation (current and deferred) 502,871,081233,593,921
Profit after tax 1,297,150,235551,191,822
c. Carrying amount of Segment Assets 1,511,764,626 11,459,191,257 12,970,955,883765,744,994 9,410,463,979 10,176,208,973
Unallocated Assets 3,239,181,602773,120,720
Total Assets 16,210,137,48510,949,329,693
d. Carrying amount of Segment Liabilities 793,175,529 5,637,499,124 6,430,674,653569,180,717 5,391,819,345 5,961,000,062
Unallocated Liabilities 3,147,800,632863,779,684
Total Liabilities 9,578,475,2866,824,779,746
e. Cost incurred to acquire Segment fixed assets during the year 10,323,479 1,910,388,626 1,920,712,10566,948,392 691,187,769 758,136,161
Unallocated acquisitions 5,331,14626,649,582
Total 1,926,043,250784,785,743
Thirteenth Annual Report 2008-09
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SCHEDULES TO THE FINANCIAL STATEMENTS (contd.)
f. Depreciation / Amortisation 6,150,625 353,859,384 360,010,0095,891,053 202,084,684 207,975,737
Unallocable Depreciation / Amortisation 7,348,3506,276,174
Total 367,358,358214,251,911
16 The Company has taken / given certain premises along with furniture, fixtures and equipment on operating leases the agreements whereof are mutually cancelable / renewable.
17 In case of parent & subsidiaries,Vehicles, Plant & Equipments etc has been acquired under Finance Lease. Minimum Lease payment outstanding as of 31st March 2009 in respect of these assets are as follows:
Total minimum lease paymentsoutstanding as on 31.03.09
Within one year 2,662,256
Later than one year and not later than five years 1,135,925
TOTAL 3,798,181
Previous Year
In respect of other premises taken on operating lease, the lease agreements are generally mutually renewable or cancelable by the lessor or lessee.
18 Computation of Basic and Diluted Earnings Per Share 2009 (Rupees) 2008 (Rupees)
a. Profit for the year after adjustment of Taxation 964,406,393 474,994,553
b. Weighted average number of equity shares outstanding during the year 232,373,744 162,426,229
c. Basic and diluted earnings per share (a) / (b) (Rupees) 4.15 2.92
d. Nominal value of the share (Rupees) 10 10
2008 (Rupees) 2007 (Rupees)
e. Deferred Tax
Deferred tax liability on account of depreciation 465,027,047 440,313,826
Deferred tax assets on account of expenses/ provisions allowable in subsequent years 87,891,840 21,769,855
377,135,207 418,543,971
19 The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act 2006, and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.
20 Previous year's figures have been re-grouped/re-arranged wherever considered necessary to confirm to the current year's presentation
Signature to Schedules 1 to 20 For and on behalf of the Board of Directors
S Behuria Jayanta BhuyanChairman Managing Director
S C Jain Jatin MavaniDirector President - Finance & Company Secretary
Place: LondonDate : 15th May 2009
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