1 Investment in Wardha Power Company Limited entitles the Company to
obtain energy equivalent of 5MW from the Group Captive Power Plant.
These shares will receive restrictive dividend not more than 0.01% of
the face value of the equity shares
The preference shares carry a coupon rate of 0.01% per annum of the
face value and is redeemable on expiry of 25 years.
This investment would be amortised over a period of 25 years from the
year in which the supply of power starts.
2 The Company''s subsidiary, Stokes Group Limited, UK had incurred
losses and the net worth of the said subsidiary company had eroded
during the previous years. Accordingly during the previous years, the
Company had recognised provision for diminution in the value of the
investment of Rs 9018.59 Lakh representing 100% of the value of the
The above figures are excluding charge for provision for leave
encashment on separation and gratuity payable provided on actuarial
The Company has received, an approval from the Central Government for
the Managerial Remuneration till 31st August, 2012.
The appointment of Mr. K.Ramaswami is subject to the approval of the
shareholders at the ensuing Annual General Meeting.
3 Micro & Small enterprises
The identification of suppliers as micro and small enterprises covered
under the ''Micro small and medium enterprises development act 2006''
was done on the basis of the information to the extent provided by the
supplier to the Company. Total outstanding dues to micro and small
enterprises, which were outstanding for more than stipulated period are
4 Contingent Liabilities
(Rs In Lakhs)
Particulars As at As at
March 31,2012 March 31, 2011
Claims against the company
not acknowledged as debts
i)Income Tax claims against
which company has preferred
a)Non deduction of TDS and
interest thereon 29.89 29.89
b) Disallowance of
certain expenses 613.68 469.06
ii) Excise cases against the
company, appealed by the
company with CESTAT
a) Relating to cenvat
availed on rejected goods 89.28 89.28
b) Interest on
supplementary invoices 9.59 9.59
iii) Bill discounting facilities
availed under Bill Marketing
Scheme from customers 583.56 1,225.53
iv) The Company had imported
capital goods under the Export
Promotion Capital 10,266.75 10,172.80
Goods (EPCG) scheme, of the
Government of India, at
concessional rates of
duty on an understanding
to fulfill quantified exports
against future obligation
aggregates to USD 200.84 Lakhs
(P.Y.USD 227.63 Lakhs)
converted at year
end exchange rate
v)Estimated value of contracts
remaining to be executed
on capital account (net 544.42 1,082.34
of advances) and not provided for
vi) Claim for interest by a
financial institutions on a
loan which was interest free - 164.93
1. During the year, the Company received subscription of Rs 4,417.50
lakhs representing the balance 75% of 42,99,270 warrants issued @ Rs 137
per warrant to the promoter Mahindra & Mahindra Limited. The said
warrants were converted into 42,99,270 equity shares of Rs 10 each with
a share premium of Rs 127 per equity share.
2. Employees'' Stock Option Scheme (ESOS) was formulated by the
Remuneration/Compensation committee of directors of the Company and
approved by it on 26th October, 2007. This was subject to the authority
vested in it by the shareholders at the general meeting of the company
held on 25th July, 2007 in accordance with the Securities and Exchange
Board of India (Employees Stock Option Scheme and Employees Stock
Purchase Scheme) Guidelines, 1999. Under this scheme, options entitled
to one equity share of Rs 10/ - each fully paid up were granted as
i 2,96,000 options to the employees of the company at a fixed price of
Rs 197.00 per share on 26th October, 2007.
ii 3,91,000 options to the employees of the holding company (M&M) at a
fixed price of Rs 83 per share on 26th February, 2008
iii 88,000 and 12,000 options to the directors of the company at a
fixed price ofRs 197.00 per share on 26th October, 2007 and 26th
February, 2008 respectively.
iv 2,50,000 options to the employees of Foreign subsidiaries at a fixed
price of Rs 151.80 per share on 9th May, 2008.
v 2,45,000 options to the employees of Foreign subsidiaries at a fixed
price ofRs 102.00 per share on 29th July, 2008.
vi 5,00,000 options to the employees of the company at a fixed price of
Rs 109.00 per share on 26th August, 2008.
vii 93,000 options to the employees of the company at fixed price of Rs
97.06 per share on 12th May, 2010.
viii 20,00,000 options to the employees of the company at fixed price
of Rs 57.00 per share on 1st April, 2011
ix 5,89,883 options to the employees of the company at fixed price of Rs
44.00 per share on 20th January, 2012
a. The equity settled options vest one year from the date of the grant
and are exercisable on specified dates in 4 tranches within a period of
5 years from the date of vesting. The number of options exercisable in
each trance is between the minimum of 100 options and maximum of the
options vested, except in case of the last date of exercise, where the
employee can exercise all the options vested but not exercised till
Options granted, vest in 4 equal installments on the expiry of 12
months, 24 months, 36 months and 48 months respectively.
c. The Company has adopted the intrinsic value method of accounting
for determining compensation cost for its stock based compensation
plan. Consequently, salaries, wages, bonus, etc. includes Rs 133.86
Lakhs (Previous Year: Rs 81.33 Lakhs) being the amortization of
deferred employee compensation, after adjusting for reversals on
account of options lapsed.
Had the company adopted Fair Value Method in respect of Options
granted, the employee compensation cost would have been lower by Rs
120.76 Lakhs (Previous Year Rs 49.40 lakhs), Profit after tax higher by
Rs 120.76 Lakhs (Previous Year Rs 49.40 lakhs), and the basic and diluted
earnings per share would have been higher by Rs 0.14 (Previous Year Rs
d. In respect of options granted during the period, accounting value
of options (equal to intrinsic value) was treated as form of employee
compensation, to be amortised on a straight line basis over the vesting
period. Unamortized portion was disclosed under the head Employee Stock
Options outstanding in Schedule II as deferred employee compensation
1. In terms of Accounting Standard - 17 (Segment Reporting) issued by
the Institute of Chartered Accountants of India, the Company operates
in only one segment i.e. Forgings.
2. Exceptional items represents Rs 155.89 Lakhs interest pertaining to
previous period paid on settlement of liability relating to a
3. Other expenses include Rs 118.41 Lakhs against the impairment of con
rod machines which was part of capital-work-in- progress.
4. Provision for tax is not made in view of brought forward book
losses / unabsorbed depreciation.
5. The Revised Schedule VI has become effective from 1 April, 2011 for
the preparation of 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.