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e-Tender Online Vendor Registration Career Ashok Stambha        

Except as stated in this section, there are no outstanding: (i) criminal proceedings; (ii) actions by statutory/ regulatory authorities; (iii) indirect and direct tax proceedings; and (iv) other material litigations; involving our Company and Directors. Our Board, in its meeting held on November 14, 2017, adopted a policy on identification of material litigations and material creditors (“Materiality Policy”).

As per the Materiality Policy, for the purposes of (iv) above, all the outstanding litigation involving our Company:

(a)        where the amounts involved in such litigation exceed 5% of the profit after tax of our Company (as per the latest audited financial statements of our Company, for the entire financial year) are to be considered as material pending litigation;

(b)        where the decision in one case is likely to affect the decision in similar cases, even though the amount involved in an individual litigation does not exceed 5% of the profit after tax of our Company and amount involved in all of such cases taken together exceeds 5% of the profit after tax (as per the latest audited financial statements of our Company, for the entire financial year); and

(c)      other litigation which does not meet the criteria set out in (a) and (b) above and whose adverse outcome would materially and adversely affect the operations or financial position of our Company, have been disclosed in this Section.

Additionally, as per the Materiality Policy, for the purposes of (iv) above, all outstanding litigation involving our Directors, an adverse outcome of which would materially and adversely affect the reputation, operations or financial position of our Company, have been considered as material litigation and disclosed in this section.

Accordingly, the materiality threshold for (iv) above, for our Company is ₹6.12 million (i.e. 5% of the net profit after tax of our Company i.e., ₹122.32 million, as per the audited financial statements of our Company) for Fiscal 2017.

Further, except as stated in this section, there are no: (i) pending proceedings initiated against our Company for economic offences; (ii) default and non - payment of statutory dues by our Company; (iii) inquiries, inspections or investigations initiated or conducted under the Companies Act or any previous companies law in the last five (5) years against our Company from the date of this Draft Red Herring Prospectus; (iv) material frauds committed against our Company in the last five (5)  years; (v) overdues to banks or financial institutions by our Company; (vi) defaults against banks or financial institutions by our Company; (vii) fines imposed or compounding offences against our Company; (viii) matters involving our Company pertaining to violation of securities law, and (x) outstanding dues to material creditors and material small scale undertakings.

As per the Materiality Policy, outstanding dues to creditors in excess of 5% of the total trade payables as per last audited financial statements of our Company are to be considered as material outstanding dues. Accordingly, the threshold for material dues would be 5% of total trade payable as at March 31, 2017 i.e. 5% of ₹3759.15 million which is ₹187.96 million. For ease of disclosure, our Board has determined the outstanding dues in excess of ₹187.96 million to be material dues and the same has been accordingly disclosed in this section. Further, all outstanding dues have been disclosed in a consolidated manner in this section. Details of material outstanding dues to creditors and details of outstanding dues to small scale undertakings and other creditors are disclosed on our website at www.grse.in.

Unless stated to the contrary, the information provided below is as of the date of this Draft Red Herring Prospectus. All terms defined in a particular litigation are for that particular litigation only.

 

Litigation involving our Company

  1. Litigations against the Company

(a)   Criminal Complaints

  1. A case bearing criminal case no. 334 of 2015 has been filed before the Judicial Magistrate’s court at Uttarakhand initiating proceedings under Section 304A of the Indian Penal Code, 1860 alleging death of a workman due to the negligence against two officials of NBCC (India) Limited, the sub-contractor and an official of the Company.

               The case arose after the district administration at Uttarkashi district of Uttarakhand lodged an FIR following an accident resulting in the death of a workman during the erection work of a Bailey Bridge, being undertaken by a sub-contractor. The Company had secured the contract for the manufacture, supply and erection of Bailey Bridge at Uttarkashi from NBCC (India) Limited and had sub-contracted the erection work to a vendor. While the Company official has secured bail in the matter, charges have been framed against all accused. Trial in the matter has recently concluded. The matter is presently pending.

  1. A Criminal Case No. C-15600/14 has been filed by the State of West Bengal before Chief Judicial Magistrate at Alipore with respect to accident of late Naresh Kumar Routh. The matter relates to his death following the fatal accident which occurred on September 2, 2014. The inspection was conducted by Inspector of Factories, West Bengal and the Dy. Chief Inspector had later filed a criminal case for offence against the then occupier and works manager, Rajabagan Dockyard, under the provisions of Factories Act, 1948 and the rules made thereunder. The Company is providing assistance for defending its officials in the case through the advocate. The matter is presently pending and the next date of hearing is fixed on May 4, 2018.
  2. A criminal case no. C-1951/17 has been filed by the State of West Bengal before Chief Judicial Magistrate at Alipore with respect to accident of a contract labourer. The accident occurred on March 24, 2017 and an inspection was conducted by the Inspector of Factories, West Bengal, who had later filed a criminal case for offence against the occupier and factory manager of the Main Unit, under the provisions of the Factories Act, 1948 and the rules made thereunder. The Company is providing assistance for defending its officials in the case through an advocate. The matter is presently pending and next date of hearing is fixed on May 15, 2018.
  3. A case bearing Criminal Revision no. 102 of 2012 has been filed against the DEP management by the State Labour Department with respect to the implementation of promotion policy. The Industrial Tribunal passed its award on May 25, 1993 directing GRSE for amendment of the policy for implementation. DEP could not implement the policy & preferred to file a writ petition before High Court of Ranchi. Hon’ble High Court passed an order on November 14, 1994 dismissing the writ petition of DEP, Ranchi. After dismissal of the writ petition by the High Court, management implemented the promotion in the year 1995 giving effect of promotion from retrospective date w.e.f. January 1, 1994. However, the Union again took up the matter before Joint Labour Commissioner, Ranchi seeking intervention to direct DEP for implementation of award of Industrial Tribunal. The case is running in the lower court and the matter is still pending.
  4. A criminal complaint case bearing No. C-622/18 has been filed by the Inspector of Factories, Ranchi against the Occupier and Factory Manager of the Company (DEP Unit) before Addl. Chief Judicial Magistrate, Ranchi under the provisions of section 92 of the Factories Act, 1948 relating to the fatal accident of a contract labour on November 16, 2017. On March 5, 2018, two summons have been received from the court of ACJM, Ranchi issued to the Occupier and Factory Manager to appear in person or through pleader on May 2, 2018.    

 (b)    Actions by Statutory and Regulatory Authorities

  1. A case bearing no. 2 (C) CC 47 of 1995 has been filed by the Labour Enforcement Officer, Paradip on August 31, 1995 before the Judicial Magistrate 1st class, Kujang for contravention of Sections 23 and 24 of the Contract Labour (Regulation & Abolition) Act, 1970. The matter pertains to violations found by the Labour Enforcement Officer upon his inspection on May 30, 1995 of the site where the construction of the building and foundation for Diesel Generator Unit was being undertaken. The matter is presently pending before the magistrate at the hearing stage.

(c)      Tax proceedings

  1. A revision petition no. RN 128 & 129 of 2010 has been raised against the Company by the Commercial Taxes Tribunal, Ranchi with respect to a disputed value added tax for the period 2004-05 amounting to ₹2.63 million under the Jharkhand Value Added Tax Act, 2005. The Commercial Taxes Tribunal has directed the matter to be heard and disposed of by the Deputy Commissioner of Commercial Taxes, Ranchi.
  2. A notice of demand bearing number 4459 has been passed against the Company by the Commercial Taxes department with respect to disputed Central sales tax and the Jharkhand value added tax for the assessment year 2009-10 amounting to ₹18.83 million. The dispute is presently pending as an appeal has been filed before the Commissioner of Commercial Tax for demand against the Central sales tax for differential sales tax rates.
  3. A notice of demand bearing number 11338 for non-fulfilment of high sea sale criteria has been raised against the Company by the Assessing Officer, Commercial Taxes Department with respect to disputed central sales tax for the period 2012-13 amounting to ₹28.37 million under the Central Sales Tax Act, 1956 (Jharkhand). The revision petition and a stay petition have been filed in the matter before the Commissioner of Commercial Taxes, Ranchi, and the matter is presently pending.
  4. An assessment order CST No. RN (S) 160 (C) has been raised against the Company by the Assistant Commissioner of Commercial Taxes, Ranchi with respect to disputed central sales tax for the assessment year 2010-11 amounting to ₹120.19 million under the Central Sales Tax Act, 1956. The dispute is presently pending before the Commissioner of Commercial Taxes as an appeal has been filed by the Company.
  5. An audit objection, bearing number 5507 has been raised against the Company for non-fulfilment of high sea sale criteria by the Deputy Commissioner of Commercial Taxes on August 16, 2016 for the assessment year 2010-11 amounting to ₹76.80 million under the Jharkhand Value Added Tax Act, 2005. The dispute is presently pending, and a detailed reply has been filed by the Company which is under review.

 (d)    Other material pending litigations

  1. Writ petitions bearing nos. 7816/2011, 7687/2011 and 2570/2011 have been filed against the Company on December 23, 2011, December 23, 2011 and May 12, 2011, respectively by Central Coalfield Ltd. (“CCL”) before the Jharkhand High Court at Ranchi against the arbitration awards passed in permanent machinery of arbitration (“PMA”) case nos. 21, 23 and 24 respectively in favour of the Company which were upheld by the appellate awards passed under the appellate authority under PMA. The claims in respect of the Company’s contractual dues from CCL were referred to the PMA in case nos. 21, 23, and 24 for adjudication through arbitration and the awards in respect thereof were passed in favour of the Company. Appeals by CCL filed before the appellate authority under the PMA were also rejected and the arbitral awards were upheld. The matter relates to withholding the contractual dues of the Company by CCL, despite passing of awards and appellate awards against CCL amounting to ₹140.09 million along with interest @ 21% per annum aggregating to about ₹805.52 million (up to March 23, 2017) and is currently pending.
  2. A case bearing no. 35 of 2016 has been filed against the Company by M/s Marinecraft Engineers Pvt. Ltd. (“Marinecraft”) on May 11, 2016 before the West Bengal MSME Facilitation Council in respect of the contract awarded in favour of Marinecraft for repair of wet basin at the Main Works Unit of the Company. The matter relates to the non-payment of alleged dues by the Company over non-completion of contractual work and irregularities observed by the vigilance department. Marinecraft, being a MSME, has filed a reference before the West Bengal MSME Facilitation Council for payment of its dues and pursuant thereto, the West Bengal MSME Facilitation Council has referred the matter for arbitration to be conducted by the MSME Council. Marinecraft filed its statement of claim claiming about ₹8.50 million towards its dues apart from interest. While the Company was taking appropriate steps for challenging the maintainability of the arbitration reference, a purported award for a principal amount of ₹8.57 million plus Interest at the rate of 3 times the Bank rate of RBI has been passed on December 28, 2017 directing our Company to pay to Marinecraft without giving an opportunity of hearing to our Company. Application for setting aside of the said Award is under process to be filed within the limitation period. 
  3. An arbitration proceeding has been filed against the Company by Synco Industries Ltd. (“Synco”) on May 3, 2014 before Justice (Retired) Pradipta Ray for a claim of ₹5.62 million along with interest @ 24% p.a. and damages which were deducted from the bills of Synco as liquidated damages over contractual delay in completion and delivery of blast cum paint cell with equipment system at Main Works Unit. Synco has made a claim for refund of the liquidated damages amount and claimed additional amount towards extra items, forex loss, entry tax, etc. and referred the matter for arbitration. Final hearing has commenced and presently the claimant is advancing its arguments.
  4. An arbitration proceeding has been initiated against the Company by Kirloskar Pneumatic Company Limited (“KPCL”) on January 11, 2011 before the learned sole arbitrator Probir Roy against initiation of the risk-purchase claim of about ₹131.90 million (after adjusting bank guarantee proceeds of ₹32.80 million) raised by the Company against KPCL over supply of defective and faulty gear boxes by KCPL and also claiming refund of the bank guarantee proceeds of ₹32.80 million (approx.). The Company had issued 10 supply orders for the manufacture and supply of 10 sets of gear boxes which failed to perform, resulting in the Company being forced to reject the same and initiate risk-purchase since KPCL further failed to supply rectified gear boxes within time. The dispute arose when KPCL refused to effect payment of the demanded sum and instead referred the matter for arbitration. The Company has filed its counter claim for ₹130.00 million (approximately) towards its risk-purchase costs along with interest on such amount. Final hearing in the matter is in progress.
  5. A Writ Petition No. 9502(W) of 2016 has been filed against the Company by Garden Reach Contract Security and Labours Union on June 8, 2016 before the High Court at Kolkata with respect to termination of appointment of security agencies. The matter relates to cessation of jobs of Security Guards with effect from June 1, 2016 since CISF has taken over the charge of entire security function of Main Works, FOJ Unit and Rajabagan Dockyard of GRSE. The matter is presently pending.
  6. A Writ Petition No. 13605 (W) of 2016 has been filed against the Company by GRSE Limited Workmen's Union & Ors. on July 14, 2016 before the High Court, Kolkata for appointment in our Company on compassionate grounds to the post of operatives. Affidavit-cum-reply on behalf of our Company affirmed on August 22, 2016 and served. The last date of hearing of the matter was on March 24, 2017 and the matter is presently pending.

 

Litigations by our Company

(a)     Other material pending litigations

  1. The Company has filed suits bearing nos. 61 of 96, 62 of 96 and 99 of 96 on March 11, 1996, before the EI Court at Kolkata against the ESI Corporation challenging the assessment by ESI Authority amounting to ₹27.76 million relating to the alleged contribution payable against engagement of contract labourers and overtime/incentive paid to the Company’s workmen on account of (i) non-payment of ₹4.62 million in ESI contribution & interest thereon, on account of contractors’ services account for 1980-83; (ii) on account of non-payment of ESI contribution of ₹21.83 million on OT & incentive paid to the Company’s workmen; and (iii) claim on account of non-payment of ₹1.30 million in ESI contribution & interest thereon on contractors services account for 1983-84, respectively. The matters are presently pending.
  2. The Company filed a winding up petition against ET & T Limited bearing case no. CP 412 of 1998 before the Delhi High Court due to non-refund of inter-corporate loan amounting to ₹35 million along with interest accrued thereon from March 31, 1994. Voluntary winding up petition has already been filed by ET & T which has also been accepted and the Company’s claims will be decided as per the common list of unsecured creditors. The matter is presently pending.
  3. The Company brought a case bearing no. TS No. 117 of 2014 on March 2014 before the Subordinate Court at Ranchi against Heavy Engineering Corporation Limited (“HEC”) and the State of Jharkhand. At the behest of the MoD in 1966, the Company set up its Ranchi unit in a land owned by the then Bihar government. Later on, Bihar government ignoring the rights of the Company transferred and conveyed the said land in favour of HEC. Thereafter, the HEC arbitrarily and unlawfully demanded astronomical sum towards lease rent from the Company for running its DEP Unit and referred the matter to the PMA in April 2013 though the PMA did not have any jurisdiction. The Company contested the reference and consequently the reference was dismissed on June 30, 2015 for want of jurisdiction. In the meantime, a suit was filed by the Company in March 2014 for a declaration that the Company has acquired irrevocable licence coupled with interest in land in lawful possession of GRSE by setting up DEP and at free of cost vis-à-vis HEC and for permanent injunction upon HEC from interfering with the Company’s irrevocable right in running of the DEP, etc. On September 26, 2015, the court referred the matter for mediation under Order X Rule 1A of CPC and mediation proceedings commenced. The Company filed proposal for settlement in terms of the plaint. HEC furnished a proposal making demands in terms of their claims made in arbitration to the tune of ₹4,030 million (approximately) against which the Company communicated to the mediator of its non-acceptance of the proposal of HEC and reiterated its stand of settlement in terms of its plaint. Since the mediation failed the matter had been remanded back to the court for adjudication.  Meanwhile, the Company has taken up the matter with the MoD seeking its intervention for taking up the matter with Ministry of Heavy Industries for persuading HEC to transfer the subject land.
  4. The Company initiated an arbitration proceeding bearing arbitration reference no. 2 of 2016 in August 2016 against Marinecraft Engineers Private Limited (“Marinecraft”) before the learned sole arbitrator Bhim Charan Maiti in connection with a work contract for repair and maintenance of flap gate of wet basin on turnkey basis. Earlier, Marinecraft raised a claim despite not having executed the contract as required and filed a writ petition against the Company followed by an application to the MSME Council claiming about ₹8.57 million. The writ petition was disposed of granting liberty to the parties to pursue their claims in accordance with law and in the meantime the Company referred the matter to arbitration. The arbitrator has since been appointed and post rejection of Marinecraft’s application under Section 16 of the Arbitration & Conciliation Act, 1996, directions were passed for filing of pleadings. The Company filed its statement of claim for about ₹3 million (after adjustment of dues of Marinecraft) towards additional cost to be incurred for execution of unfinished contractual work. Marinecraft filed its defence statement cum counter claim for about ₹8.57 million as claimed by it before the MSME Council. Witness action in the matter is in progress.

 

  1. A certificate case No. 154/09/Misc. 2009-10 by the Company against the KPCL under the Bengal Public Demands Recovery Act for recovery of a sum of Rs. 106.54 million towards claims arising out of breach of contract as demanded in GRSE’s notice dated February 4, 2010 with interest. In this case our Company issued 10 supply orders on August 4, 2006 to KPCL for manufacture and supply of 10 sets of gear boxes for fitment into 10 no. of WJFAC at a total price of Rs. 129.90 million. The gear boxes supplied by KPCL failed to perform and the ships’ trials had to be abandoned 8 nos. defective gear boxes were taken back by KPCL for modification / rectification which were to be returned after due modification/ rectification. KPCL did not return the same thus forcing our Company to resort to risk-purchase. No date has yet been fixed.

(b)    Tax proceedings

  1. A revision case no. RN-701 of 2012 has been filed by the Company against the Commissioner of Sales Tax in April 2012 with respect to disputed value added tax for the period 2007-08 amounting to ₹50.68 million under the West Bengal Value Added Tax Act, 2003. The dispute is presently pending before the West Bengal Taxation Tribunal and no date of next hearing has been fixed by the tribunal.
  2. An appeal has been filed by our Company on June 8, 2016 against an order passed by the Additional Commissioner of Central Excise, Kolkata-V Commissionerate dated April 9, 2016 with respect to the disputed central excise for the period 2001-02 to 2005-06 amounting to ₹1.79 million under the Central Excise Act, 1944. The dispute is presently pending before the Commissioner of Central Excise (Appeal-1) Kolkata.
  3. An appeal has been filed by our Company against an order passed by the Commissioner of Central Excise, Kolkata-V bearing order-in-original no. 07/COMMR./CE/Kol-V/Adjn/2014 dated December 24, 2014 on March 24, 2015 with respect to disputed central excise for the period 2011-12 amounting to ₹7.55 million under the Central Excise Act, 1944. The dispute is presently pending before the CESTAT.
  4. An appeal has been filed by the Company against an order passed by the Assistant Commissioner of Central Excise, Garden Reach Division, Kolkata-V Commissionerate bearing Order (Original) No. R/08/CE/Rebate/GRD/Kol-V/2016-17 on December 15, 2016 with respect to the disputed central excise for the period 2016-17 amounting to ₹10.65 million under the Central Excise Act, 1944. The dispute is presently pending before the Commissioner of Central Excise.
  5. A stay has been granted by CESTAT, Kolkata in case no. V(15)57/ST-Adjn/Commr./08 against an appeal filed by our Company on October 9, 2009 with respect to disputed service tax for the period 2003-04 to 2007-08 amounting to ₹12.13 million under the Finance Act, 1944.
  6. A rectification petition has been filed by our Company on May 29, 2013 against the Income Tax department’s assessment order dated February 22, 2013 with respect to disputed income tax for the period 2009-10 amounting to ₹1.85 million under the Income Tax Act, 1961. The dispute is presently pending before the Deputy Commissioner of Income Tax (Rectification).
  7. An appeal has been filed by our Company on May 11, 2015 against the Income Tax department’s assessment order dated March 28, 2015 with respect to disputed income tax for the period 2008-09 amounting to ₹35.29 million under the Income Tax Act, 1961. The dispute is presently pending before the Commissioner of Income Tax (Appeals)-1, Kolkata.
  8. An appeal has been filed by our Company on May 11, 2015 against the Income Tax department’s assessment order dated March 25, 2015 with respect to disputed income tax for the period 2011-12 amounting to ₹11.13 million under the Income Tax Act, 1961. The dispute is presently pending before the Commissioner of Income Tax (Appeals)-1, Kolkata.
  9. An appeal has been filed by our Company on March 15, 2016 against the Income Tax department’s assessment order dated January 30, 2016 with respect to the disputed income tax for the period 2012-13 amounting to ₹0.07 million under the Income Tax Act, 1961. The dispute is presently pending before the Commissioner of Income Tax (Appeals), Kolkata-1.
  10. An appeal has been filed by our Company on December 29, 2016 against the Income Tax department’s assessment order dated November 28, 2016 with respect to the disputed income tax for the period 2013-14 amounting to ₹0.19 million under the Income Tax Act, 1961. The dispute is presently pending before the Commissioner of Income Tax (Appeals), Kolkata-1.
  11. Outstanding dues to small scale undertakings and other creditors by our Company

As of September 30, 2017, we owe an amount of ₹100.07 million to a total number of 57 micro, small and medium scale undertakings and an amount of ₹1,998.77 million (excluding provision for unbilled liabilities of ₹3,223.69 million) to a total number of 1,029 creditors.

  • Details of default and non - payment of statutory dues by our Company

Except as disclosed in “Financial Statements” on pages 216, 218, 219, 318, there are no default and non - payment of statutory dues by our Company.

  1. Details of pending litigation involving any other person whose outcome could have material adverse effect on the position of our Company

Other than as already disclosed under “Litigations involving our Company” on page 418, there are no pending litigations involving any other person whose outcome could have material adverse effect on the position of our Company.

  1. Material fraud committed against our Company in the last five (5) years and actions taken by our Company in this regard

There have been no frauds committed against our Company in the last five (5) years and no actions were taken by our Company in this regard.

  1. Pending proceedings initiated against our Company for economic offences

There have been no proceedings initiated against our Company for economic offences.

  • Inquiries, investigations etc. instituted under the Companies Act in the last five (5) years against our Company

There have been no inquiries, investigations etc. instituted under the Companies Act against our Company in the last five (5) years.

  • Material Developments

There are no material developments post September 30, 2017. For details of significant developments post September 30, 2017, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” on page 373.

  1. Details of fines imposed or compounding of offences under the Companies Act in the last five (5) years immediately preceding the year of this Draft Red Herring Prospectus.

There have been no fines imposed or compounding of offences under the Companies Act in the last five (5) years immediately preceding the year of this Draft Red Herring Prospectus.

  1. Litigations involving our Directors

(i)               Litigations against our Directors

(a)             Criminal Complaints

There are no criminal litigations against our Directors.

(b)             Other litigations

There are no other litigations against our Directors.

(ii)             Litigations by our Directors

There are no pending litigations filed by our Directors.

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Last Reviewed and Updated on 17 August 2018

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