Rights, preferences and restrictions attached to the equity shares
The Company is having only one class of equity shares having par value
of Rs. 10 each. Each holder of equity share is entitled to one vote per
share. In the event of liquidation of the Company, the holders of the
equity shares will be entitled to receive remaining assets of the
Company. The distribution will be in proportion to the number of equity
shares held by the shareholders.
Shares held by the holding company
Mahindra and Mahindra Limited, the holding company (by virtue of
control over the composition of the Board of Directors) holds 6,577,865
shares of the Company as at the Balance Sheet date.
Details of shareholders holding more than 5% shares in the Company
Shares reserved for issue under options 490,500 shares (As at March 31,
2011 - 500,000 shares) of Rs. 10 each towards outstanding employee
stock options granted [Refer Note No. 28]
* The Company had issued Optionally Cumulative Convertible Debentures
(OCCDs) carrying, interest @12% p.a. (Net of Withholding Tax). The
Debenture holders had an option to convert these Debentures (equivalent
to the face value) into 12% Preference Shares of Rs. 100/- each from
September 30, 2010 to March 31, 2012.
In accordance with the Shareholders'' Agreement and Amendment to the
Debenture Subscription Agreement both dated February 9, 2011 entered
into with Mahindra and Mahindra Limited, the terms of the Debentures
had been changed so as to make them compulsorily redeemable by February
28, 2012 in a phased manner, which has been further extended to July
1,2012 by mutual consent.
During the year, the Company has recognised deferred tax asset on
unabsorbed depreciation to the extent of the corresponding deferred tax
liability on the difference between the book balance and the written
down value of fixed assets under Income Tax net off of other balances
constituting deferred tax asset.
* Balances with banks include deposits amounting to Rs. 30,240 [As at
March 31,2011 Rs. 30,240} and margin monies amounting to Rs. 65,367,270
[As at March 31, 2011 Rs. 25,604,997] which have an original maturity
of more than 12 months.
Particulars As at As at
March 31,2012 March 31, 2011
1.1 Contingent liabilities (to the
extent not provided for)
(a)Claims against the Company not
acknowledged as debt 1,301,081 1,185,665
(b) Guarantees issued by Banks
secured by Fixed Deposits 72,745,705 30,178,300
(c) Custom Duty / Interest on
account of commitment to Export,
under Export 26,313,276 17,950,748
Promotion Capital Goods Scheme
(d)Show Cause cum Demand Notices
are received from / issued by the
Excise authorities. The major 7,944,000 7,944,000
issues raised therein have been
decided in favour of the
Company at the Tribunal level. The
said Notices are pending adjudication
and the Company is confident of
(e)Disputed income tax liability
(Net of Provision) and interest
demanded by 2,366,859 2,366,859
department for the assessment year
Based on the decisions of the
Appellate Orders and interpretations
of relevant provisions, the Company
has been advised that the demand is
expected to be either deleted or
(f)Long Term Loans & Advances include
refund claim made for excise duty paid 16,679,302 16,679,302
under protest consequent upon the
judicial pronouncement made by CESTAT
in favour of the Company, which was
disputed by the department before
The Commissioner (Appeals), Central Excise and Customs, Nashik has
sanctioned the claim on merit but taking recourse to the principle of
Unjust Enrichment has ordered the claim to be transferred to the
credit of the Consumer Welfare Fund.
The Company had filed an appeal against the order. On hearing the
appeal the Hon'' CESTAT, Mumbai remanded back the case to the
adjudicating authorities to examine the issue afresh. The Adjudicating
Authority issued a Show Cause Notice and after personal hearing passed
an order rejecting the claim without following the guidelines given by
the Hon'' CESTAT.
The Company has filed an appeal against the order with the Commissioner
(Appeals), Central Excise & Customs, Nashik. As the Company has been
advised that the claim is tenable, no provision has been considered.
Note: In respect of items mentioned above, till the matters are finally
decided, the timing of outflows of economic benefits cannot be
1.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
The Company has not received information from vendors regarding their
status under the Micro, Small and Medium Enterprises Development Act,
2006 and hence disclosures relating to amounts unpaid as at the period
end, together with interest paid / payable under this Act, have not
been given. 27.4 Disclosure as per Clause 32 of the Listing Agreements
with the Stock Exchange
The Company has not given any loans and advances in the nature of loans
to subsidiaries, associates and firms / companies in which directors
Employee Stock Option Scheme
(a) Pursuant to the Employees Stock Option Scheme - 2010 (ESOS)
approved by the Shareholders in the Annual General Meeting held on July
21, 2010, the Company had granted 60,500 Stock Options to the three
non-executive Directors and some permanent employees on November 19,
2010, as per the recommendation of the Remuneration / Compensation
Committee, at exercise price of Rs. 35 /- each.
In respect of the options granted, the equity settled options vest in 4
tranches of 25% each upon the expiry of 12 months, 24 months, 36 months
and 48 months respectively from the date of the grant. Each tranche is
exercisable within two years from the respective date of vesting. The
number of options exercisable in each tranche is minimum 25% of the
options vested, except in case of the last date of the exercise, where
the employee can exercise all the options vested but not exercised till
In case the option is not exercised by the Employee within the time
limits as prescribed in the Scheme, the Options would lapse and no
right shall be deemed to accrue or arise after that date.
The compensation costs of the stock options granted are accounted by
the Company on the basis of intrinsic value of share on the date of
grant of options.
The difference between the fair price of the share underlying the
options granted on the date of grant of option and the exercise price
of the option (being the intrinsic value of the option) representing
Stock compensation expense is expensed over the vesting period.
(a) Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognised Rs.
5,188,935 [Year ended March 31, 2011 Rs. 4,352,472] for Provident Fund
contributions and Rs. 1,380,182 [Year ended March 31, 2011 Rs.
1,249,197] for Superannuation Fund contributions in the Statement of
Profit and Loss. The contributions payable to these plans by the
Company are at rates specified in the rules of the schemes.
(b) Defined benefit plans
The Company offers the following employee benefit schemes to its
ii. Compensated absences
NOTE NO. 2 - SEGMENT REPORTING
The Company is mainly engaged in the business of ''Micro Irrigation
System'' (MIS). All other activities of the Company revolve around the
main business and accordingly there are no separate reportable
segments, as per the Accounting Standard on ''Segment Reporting'' (AS 17)
notified under the Companies (Accounting Standards) Rules, 2006.
The Company has entered into operating lease arrangements for certain
facilities and office premises. The leases are generally cancellable
and are for a period of 11 months to 3 years under leave & license
agreements and may be renewed by mutual consent on mutually agreeable
Note no. 3 - Previous year''s figures
The Revised Schedule VI has become effective from April 1,2011 for the
preparation^ financial statements. This has significantly impacted the
disclosure and presentation made in the financial statements. Previous
year''s figures have been regrouped / reclassified wherever necessary to
correspond with the current year''s classification / disclosure.