Crompton Greaves

CONTINGENT LIABILITIES
 
                                                  As at        As at
                                             31-03-2009   31-03-2008
                                              Rs. crore    Rs. crore
 
 (a) Claims against the Company not 
     acknowledged as debts                        11.65        16.07
 (b) Sales tax liability that may arise 
     in respect of matters in appeal               1.26         2.35
 (c) Excise duty / service tax liability 
     that may arise in respect of matters 
     in appeal preferred by the Company            6.22        15.49
 (d) Excise duty/service tax liability 
     that may arise in respect of matters 
     disputed by the department                    1.35         0.33
 (e) Income tax liability that may arise 
     in respect of matters in appeal
     preferred by the department                   4.31         8.74
 (f) Guarantees/securities given on behalf 
     of subsidiary companies                     519.05       575.61
 (g) Guarantees given on behalf of 
     associate company                             5.68         4.37
 (h) Bills discounted                            231.16       156.82
 
 
 1 Of the equity shares of Rs. 2 each comprised in the subscribed
 capital of the Company:
 
 19,36,000       issued pursuant to a contract without payment 
                 being received in cash;
 18,57,33,312    issued as fully paid up bonus shares by way of 
                 capitalisation of reserves;
 73,82,830       issued as fully paid up pursuant to scheme of 
                 amalgamation; and
 3,30,68,750     issued as an international offering of Global 
                 Depository Receipts (GDRs) (in US Dollars).
 
 2 The Board of Directors at their meeting held on 24th March 2009, has
 approved the Buy- back of fully paid equity shares of Rs 2 each, from
 the open market through the Stock Exchanges, at a price not exceeding
 Rs. 170 per share, upto an amount of Rs. 224.15 crore, being 25% of the
 total paid-up capital plus free reserves as per the audited balance
 sheet of the Company for the year ended 31st March, 2008. The Buy-back
 of equity shares has been approved by the Members, through the Postal
 Ballot mechanism, on 20th May, 2009.
 
 3 The Company, through its wholly owned subsidiary CG International
 B.V.,The Netherlands, has completed all the formalities, during the
 year, in respect of acquisition of;
 
 (a) Societe Nouvelle de Maintenance de Transformateurs (Sonomatra)
 based in France; and
 
 (b) M.S.E. Power Systems, Inc. and its subsidiary M.S.E. West LLC (MSE
 Group) based in the USA.
 
 4 The Board of Directors at their meeting held on 24th March, 2009 has
 approved an investment of upto Rs. 227.00 crore in equity shares of Rs
 10 each of Avantha Power & Infrastructure Limited at book value
 estimated at approximately Rs 11 per share. The investment of Rs.
 227.00 crore, is well within the limits prescribed by Section 372Aof
 the Companies Act, 1956 and therefore, approval of the shareholders is
 not required.
 
 5 Secured Loans
 
 (a) Term loans from banks are secured by way of equitable mortgage of
 land and building and by way of hypothecation of specific movable
 properties at certain locations.
 
 (b) Working capital demand loans from banks are secured by
 hypothecation of stocks and book debts, present and future.
 
 6 The Companys investment in its subsidiary (Malanpur Captive Power
 Limited), to the extent of 93,58,493 equity shares of Rs. 10 each, has
 been pledged as security in favour of a financial institution against
 assistance availed by the subsidiary.
 
 7 There are no amounts due and outstanding to be credited to the
 Investor Education and Protection Fund as at 31st March, 2009.
 
 8 Miscellaneous expenses include donations to political parties: All
 India Congress Committee Rs. 1.50 crore and Bharatiya Janata Party Rs.
 1.00 crore.
 
 9 As per the Accounting Standard (AS) 28 Impairment of Assets, the
 Company has reviewed potential generation of economic benefits from
 fixed assets.  Accordingly, impairment loss amounting to Rs.5.36crore
 (Previous year Rs. 5.44 crore) provided in prior years has been
 reversed during the year.
 
 Disclosure in respect of contingent liabilities: Refer Schedule 19.
 
 10 Other liabilities include Rs. 8.30 crore received as advance against
 sale of immovable property of the Company. As per the agreements with
 the buyers, the Company is entitled to forfeit the said amounts, if the
 buyers do not comply with the conditions of sale within the stipulated
 time. Since, the buyers have failed to comply with the conditions and
 hence, the Company has forfeited these amounts received in accordance
 with the terms of the agreements. The buyers have filed suits in the
 Courts for recovery of the advances paid by them. The Company contends
 that as per the force majeure clause of the agreements, is not required
 to be refunded. Pending disposal of the cases by the Courts, the
 Company, as a measure of prudence, has not recognised the said amount
 in the profit and loss account.
 
 11 Amounts shown as 0.00 represents amount below Rs. 50,000 (Rupees
 Fifty Thousands).
 
 12 Figures for the previous year have been re-grouped / re-classified
 wherever necessary.