a. Rights, preferences and restrictions attached to shares
The Company has only one class of equity shares having a par value of
Rs. 2 per share. Each shareholder is entitled to one vote per share
held. The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation of the
Company, the equity shareholders are eligible to receive remaining
assets of the Company, after distribution of all preferential amounts,
in the proportion to their shareholding.
b. Of the above equity shares, 141,372,000 (previous year 100,980,000)
shares of Rs. 2 each are held by the Holding Company, Cummins Inc. USA
* Exceptional item of Rs. 5,144 Lacs represents profit realised on
divestment of the Company''s entire shareholding in Cummins Exhaust
India Limited (CEIL).
* The Company has issued Bonus shares in the ratio of 2:5 pursuant to
approval by the members at the Extra Ordinary General Meeting held on
September 9, 2011. Accordingly, Basic and Diluted Earnings Per Share
(EPS) have been restated for the corresponding period to give effect to
the said issue of Bonus shares, in accordance with Accounting Standard
(AS) 20 Earnings Per Share notified under Section 211(3C) of the
Companies Act, 1956.
1 The amount of further interest due and payable even in the succeeding
years, until such date when the interest dues as above are actually
paid to the small enterprise, for the purpose of disallowance as a
deductible expenditure under section 23 of the MSMED Act, 2006.
The Company has compiled this information based on intimations received
from the suppliers of their status as Micro or Small Enterprises and /
or its registration with the appropriate authority under the Micro,
Small and Medium Enterprises Development Act, 2006.
As at As at
March 31, 2012 March 31, 2011
Rs. in Lacs Rs. in Lacs
2. Contingent liabilities
a. Bills discounted not matured 265 326
b. Income tax matters 8,735 5,658
c. Central excise duty/service
tax matters 456 286
d. Duty drawback demand pending
in appeal 4,816 2,604
(excludes interests, if any)
e. Sales Tax Matters pending in
appeal 6,872 2,403
f. Claims against the Company not
acknowledged as debts 9 7
(excludes interests, penalties
if any, and claims which
cannot be quantified)
g. Civil liability / secondary civil
liability in respect of 19 19
suits filed against the Company
3. Inter corporate deposit includes an amount of Rs. NIL (previous
year Rs. 2,750 lacs) placed with Cummins Technologies India Limited, a
fellow subsidiary. Maximum amount due during the year Rs. 3,950 lacs
(previous year Rs. 2,908 lacs).
4. Other expenses include provision for doubtful debts Rs. 354 lacs
(previous year Rs. 178 lacs).
5. Operating Leases
The company has entered into non-cancellable operating leases for
warehouse and office premises. These lease arrangements range for a
period between 12 months and 60 months with lock in periods between 11
months and 24 months, which include both renewal and non-renewal
leases. These leases also include escalation clauses.
The minimum lease payments recognised in the statement of Profit and
Loss (included under ''Rent'' in note no. 24) for the year amount to Rs.
1,156 lacs (previous year Rs. 753 lacs).
(i) Provision for Warranty
The provision for warranty is on account of warranties given on
products sold by the Company. The provision is based on the historic
data and estimated figures. The timing and amount of the cash flows
that will arise from these matters will be determined based on the
receipt of claims from customers. Amount expected to be paid in 1 year
is classified as Current.
(ii) Provision for Statutory Matters
The provisions for statutory matters are on account of legal matters
where the Company anticipates probable outflow. The amount of provision
is based on estimate made by the Company considering the facts and
circumstances of each case. The timing and amount of cash flows that
will arise from these matters will be determined by the relevant
authorities on settlement of these cases.
(iii) Provision for New Engine Performance Inspection (NEPI)
The provision for New Engine Performance Inspection (NEPI) is on
account of installation checks to be carried out by the Company at
specified intervals after the equipment is commissioned. The provision
is based on the historic data and estimated figures. The timing and
amount of the cash flows that will arise from these matters will be
determined based on the receipt of claims from dealers. Amount expected
to be paid in 1 year is classified as Current.
6. The Company has 50% interest in Joint Ventures namely Cummins
Research and Technology India Limited, Cummins Svam Sales & Service
Limited (w.e.f. January 17, 2012), Valvoline Cummins Limited and
Cummins Exhaust India Limited (upto April 29, 2011), incorporated in
India. The following represents the Company''s share of Assets and
Liabilities as at 31st March, 2012 and Income and Expenses for the year
ended on that date.
Item (iii) includes the cost of accessories sold and cost of purchased
components sold as spare parts (for the goods manufactured and sold by
the Company), this activity being ancillary to the Company''s
All of the above have been included in the line ''Contribution to
provident and other funds'', in Note 22 of the Stateme of Profit and
The overall expected rate of return on assets is based on the
expectations of the average long term rate of return expected on
investments of the fund during the estimated term of obligations.
The estimates of future salary increases considered in actuarial
valuation takes into account inflation, seniority, promotion and other
ii) Reimbursement of expenses incurred by related parties for and on
behalf of the company and vice-versa have not been included above.
iii) The Chairman and Managing Director and some senior employees are
also entitled to participate in the Employees Stock Option plan of
Cummins Inc. (the holding company), the cost of which is borne by
iv) The information given above, has been reckoned on the basis of
information available with the Company and relied upon by the auditors.
v ) Figures in brackets are in respect of the previous year.
7. Segment Information
a. Primary Segment
The Company''s operations predominantly relate to manufacture of
Internal combustion engines, gensets and parts thereof (Engine Business
segment) used for various applications such as power generation,
construction, compressor, mining, marine, locomotive, fire-fighting
etc. Others includes income from Service solutions business.
b. Secondary Segment
Two secondary segments have been identified based on the geographical
locations of customers: domestic and export.
i) The Company''s tangible assets are located entirely in India.
ii) Figures in brackets are in respect of the previous year.
* Amount is below the rounding off norm adopted by the Company.
8. The financial statements for the year ended March 31, 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended March 31, 2012 are prepared as per Revised Schedule VI.
Accordingly, the previous year figures have also been reclassified to
conform to this year''s classification. The adoption of Revised Schedule
VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial