1. The Company has allotted bonus shares on 13th April, 2010 in the
ratio of one equity share for every one equity share of rs. 10/- each
held in the Company on the record Date.
2. Estimated amount of contracts (net of advances) remaining to be
executed on capital account and not provided for Rs. 8.86 Crores (2010
: Rs. 7.47 Crores).
3. (a) The Company had received in prior years, show cause notices
from Excise Authorities in respect of input and finished goods stock
differences at some of its plants aggregating to Rs. 18.30 Crores (2010
: Rs. 18.30 Crores). There have been three orders in favour of the
Company though department has filed appeals against two of them. The
orders were passed upholding the Company''s contention that the stock
differences have been almost fully reconciled/explained. The pending
demands on account of stock differences aggregate to Rs. 5.86 Crores
(2010 : Rs. 4.66 Crores) including the amounts involved in the cases
where department has filed appeals. Considering that favourable orders
have been received setting out a ratio that minor differences are
condonable, the demands at other plants are also likely to be
eventually dropped. The Company has also obtained legal opinions which
concur with this view. However, as a matter of abundant caution, the
Company has upto date made a provision of Rs. 0.77 Crore and payments
of Rs. 1.40 Crores relating to excise cases of stock differences as on
31st December, 2011.
(b) Certain disputed demand notices relating to Indirect Taxes
amounting to Rs. 178.23 Crores (2010 : Rs. 106.74 Crores) have neither
been considered as contingent liabilities nor acknowledged as claims,
based on expert legal opinions obtained/ internal assessment. The
Company is of the view that the possibility of the demands
materialising is remote.
4. A shareholder of the Company had filed a public Interest petition
in the Delhi High Court interalia challenging the allotment of
3,537,862 equity shares on preferential basis to Castrol Ltd., U.K. the
said petition has been dismissed by the Delhi High Court on 11th
January, 2005. However, the Shareholder has gone in appeal by way of a
Special Leave petition to the Supreme Court of India. the Appeal has
been admitted but no interim relief has been granted. the matter has
to-date not come up for hearing.
5. Employee Benefits :
General Description of Defined Benefit Plan Gratuity
The Company operates gratuity plan wherein every employee is entitled
to the benefit equivalent to fifteen days/one month salary last drawn
for each completed year of service depending on the date of joining.
The same is payable on termination of service, or retirement, whichever
is earlier. The benefit vests after five years of continuous service.
The Company manages provident Fund plan through a provident Fund Trust
for its employees which is permitted under The employees'' provident
Fund and Miscellaneous provisions Act, 1952. The plan envisages
contribution by employer and employees and guarantees interest at the
rate notified by the provident Fund Authority. The contribution by
employer and employee, together with interest, are payable at the time
of separation from service or retirement, whichever is earlier.
The benefit under this plan vests immediately on rendering of service.
Survivor Protection Scheme
The Company provides an exgratia payment to the employee''s
family/survivors over and above any survivor benefits payable to the
employee under the retirement schemes, in the unfortunate event of an
employee dying whilst in service.
A. Amounts recognised as an expense :
(i) Defined Benefit Plan
Gratuity in Schedule J includes gratuity cost of Rs. 3.19 Crores (2010
: Rs. 4.77 Crores) (net of recoveries of Rs. 0.03 Crore (2010 : 0.21
Crore) towards employees on secondment from group companies).
Contribution to provident and other Funds in Schedule J includes Rs.
2.43 Crores (2010 : Rs. 3.93 Crores) for provident Fund.
Salaries, wages and bonus in Schedule J includes Leave encashment,
survivor protection (death benefit), pension benefit to past employees,
Rs. 0.05 Crore (2010 : Rs. 0.15 Crore).
(ii) Defined Contribution Plan
Contribution to provident and other Funds'' in Schedule J includes Rs.
4.17 Crores (2010 : Rs. 4.90 Crores) for pension Fund, ESIC and Labour
Welfare Fund and ''Insurance'' includes Rs. 1.19 Crores (2010 : Rs.
1.15 Crores) for Medical Insurance benefits and post retiral medical
benefit scheme. Salaries, wages and bonus in Schedule J includes Rs.
1.04 Crores (2010 : Rs. 0.93 Crore) for Share Match.
B. Basis used to determine expected rate of return on assets :
the major portion of the assets are invested in debt instruments.
expected rate of return on investments for all defined benefit plans is
determined based on the assessment made by the Company at the beginning
of the year on the return expected on its existing portfolio since
these are generally held to maturity, along with the estimated
incremental investments to be made during the year. expected rate of
return on plan assets is 8.0% (2010 : 8.0%).
(g) (i) Consumption includes adjustments for shortage/excess, etc. and
the effects of reduction of inventory to realisable value.
(ii) Quantities of turnover, consumption, production, opening and
closing stocks of additives and chemicals are made up of Kilolitres and
Metric Tons, but the constituent units of measurement of the items have
not been separately identified and indicated.
(iii) As the Company manufactures and trades, the information required
by Clause 3(ii) (a) of Schedule VI part II to the Companies Act, 1956
is interpreted to require total amounts to be disclosed in respect of
opening stock, closing stock and purchases of traded items.