Mahindra and Mahindra

1.  Share Capital :
 
 Issued and Subscribed Capital include :
 
 (a) 1,66,809 Ordinary Shares allotted as fully paid-up pursuant to a
 contract without payment having been received in cash.
 
 (b) 17,06,07,504 Ordinary Shares allotted as fully paid-up by way of
 Bonus Shares by capitalisation of Securities Premium Account and
 Reserves.
 
 (c) 12,56,562 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with the Union Bank of India Limited. Of these, 13,737
 Ordinary Shares were issued on conversion of 41,211 8% Bonds.
 
 (d) 12,98,202 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with International Tractor Company of India Limited
 without payment having been received in cash.
 
 (e) 1,88,166 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with Mahindra Spicer Limited without payment having been
 received in cash.
 
 (f) 9,73,200 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with Mahindra Nissan Allwyn Limited without payment having
 been received in cash.
 
 (g) 1,28,27,552 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with Mahindra Holdings and Finance Limited without payment
 having been received in cash.
 
 (h) 2,02,51,900 Ordinary Shares issued consequent to the Scheme of
 Amalgamation with Punjab Tractors Limited without payment having been
 received in cash.
 
 (b) The Guidance Note on Accounting for Employee Share-based Payments
 issued by The Institute of Chartered Accountants of India requires that
 shares allotted to a trust but not transferred to employees be reduced
 from Share Capital and Reserves. Accordingly, the Company has reduced
 the Share Capital by Rs. 3.10 crores (2008 : Rs. 3.34 crores),
 Securities Premium Account by Rs. 15.20 crores (2008 : Rs. 16.34
 crores) for the 31,02,653 shares (2008 : 33,34,216 shares) held by the
 trust pending transfer to the eligible employees.
 
 The Share Capital of the Company has also been reduced and the General
 Reserve increased by Rs. 3.10 crores (2008 : Rs. 3.33 crores) for the
 bonus shares issued by the Company in September, 2005 to the trust but
 not yet transferred by the trust to the employees. The above monies
 which are treated as advance received from it, is included under
 current liabilities.
 
 (c) Consequent to the announcement issued by The Institute of Chartered
 Accountants of India dated 29th March, 2008 in respect of forward
 exchange contracts and currency and interest rate swaps, the Company
 has applied the Hedge Accounting Principles set out in the Accounting
 Standard (AS) 30 ‘Financial Instruments : Recognition and Measurement.
 Accordingly, such contracts are marked to market and the loss
 aggregating Rs. 434.19 crores (Net of Tax of Rs. 223.57 crores) (2008 :
 Rs. 12.92 crores (Net of Tax of Rs. 6.66 crores)) arising consequently
 on contracts that were designated and effective as hedges of future
 cash flows has been recognized directly in the Hedging Reserve Account.
 
 (d) In line with the notification dated 31st March, 2009 issued by The
 Ministry of Corporate Affairs, amending Accounting Standard (AS) 11 –
 ‘Effects of Changes in Foreign Exchange Rates, the Company has chosen
 to exercise the option under paragraph 46 inserted in the standard by
 the notification.
 
 Accordingly with retrospective effect from 1st April, 2007 exchange
 differences on all long term monetary items are :
 
 (i) to the extent such items are used for financing fixed assets, added
 to/subtracted from the cost of those fixed assets and depreciated over
 the balance useful life of the asset.
 
 (ii) in other cases accumulated in the ‘Foreign Currency Monetary Item
 Translation Difference Account and amortised over the balance period
 of such long term monetary item but not beyond 31st March, 2011.
 
 Arising from the above the Company has :
 
 (i) charged to the opening General Reserve Rs. 39.97 crores (Net of Tax
 of Rs. 20.58 crores) which was recognised in the Profit and Loss
 Account in previous financial year ended 31st March, 2008.
 
 (ii) added to fixed assets Rs. 131.73 crores and to Capital
 Work-in-Progress Rs. 41.24 crores being the exchange differences on
 long term monetary items relatable to the acquisition of fixed assets.
 
 (iii) charged to the Profit and Loss Account Rs. 24.61 crores.
 
 (iv) carried forward Rs. 18.11 crores in the ‘Foreign Currency Monetary
 Item Translation Difference Account being the amount remaining to be
 amortised as at 31st March, 2009.
 
 As a result of the above change in Accounting Policy the net profit
 before tax for the year is higher by Rs. 251.63 crores (Net of Tax Rs.
 166.10 crores).
 
 2.  Loans :
 
 (a) Debentures are redeemable/convertible as follows :
 
 (i) Rs. 700 crores Fully and Compulsorily Convertible Debentures on
 28th January, 2010.
 
 (ii) Rs. 200 crores on 9th January, 2011.
 
 (iii) Rs. 400 crores in three equal instalments from 12th December,
 2013.
 
 (iv) Rs. 0.01 crores of 12.50% Debentures and Zero Interest Bonds on
 receipt of balance amount due on allotment.
 
 (b) (i) Debentures of Rs. 600.01 crores and Foreign Currency Loans from
 Banks of Rs. 124.29 crores are secured by a pari-passu charge on
 immovable properties of the Company both present and future, subject to
 certain exclusions and are also secured by pari-passu charge on the
 movable properties of the Company including movable machinery,
 machinery spares, tools and accessories, both present and future.
 
 (ii) Short Term Foreign Currency Loan of Rs. 253.70 crores from banks
 and Loans and Advances on cash credit accounts from the Companys
 bankers are secured by a first charge on a pari-passu basis on the
 whole of the current assets of the Company namely inventories, book
 debts, outstanding monies, receivables, claims etc. both present and
 future.
 
 (c) The following amounts are repayable/convertible by 31st March, 2010
 :
 
 (i) Debenture holders : Rs. 700.00 crores (2008 : Rs. 5.50 crores)
 
 (ii) Foreign currency loans from Banks (secured) : Rs. 355.18 crores
 (2008 : Rs. 304.41 crores)
 
 (iii) Fixed Deposit holders : Rs. 4.88 crores (2008 : Rs. 2.15 crores)
 
 (iv) Rupee Loans :
 
 (a) from banks : Rs. 80.00 crores (2008 : Rs. 106.14 crores)
 
 (b) from others : Rs. 10.13 crores (2008 : Rs. 6.14 crores)
 
 The Company had issued during the year ended 31st March, 2007, Zero
 Coupon Foreign Currency Convertible Bonds (Bonds 2011) aggregating US$
 200 million, at par. The bond holders have an option to convert these
 bonds into Equity Shares with full voting rights or Global Depository
 Receipts (GDRs) determined at an initial conversion price of Rs. 922.04
 per share with fixed exchange rate of conversion of Rs. 44.42 = US$ 1,
 at any time on or after 7th May, 2006 upto 7th March, 2011.
 
 The Bonds 2011 may be redeemed, in whole but not in part, at the option
 of the Company at any time on or after 13th April, 2008 subject to
 satisfaction of certain conditions. Unless previously converted,
 redeemed or purchased and cancelled, the bonds fall due for redemption
 on 14th April, 2011 at 128.03 per cent of their principal amount. Upto
 31st March, 2009, none of the Bonds 2011 have been converted into
 equity shares/GDRs.
 
 During the year Bonds 2011 of the face value of US$ 10.50 million were
 bought back and cancelled.
 
 Premium payable on redemption of Bonds 2011 had been fully provided in
 the previous year by debiting the same to Securities Premium Account
 (SPA). Consequent to the buyback, premium aggregating Rs. 9.84 crores
 (Net of Tax of Rs. 5.07 crores) no longer payable has been credited
 back to SPA during the year.
 
 The net proceeds of Rs. 53.95 crores, unutilised as at 31st March,
 2009, is disclosed under Cash and Bank balances.
 
 The Company had issued during the year ended 31st March, 2009,
 93,95,974 Unsecured Fully and Compulsorily Convertible Debentures
 (FCDs) having a face value of Rs. 745 per FCD for an aggregate
 consideration of Rs. 700 crores. The FCDs have a tenure of 18 months
 and carry a coupon rate of 9.25% until conversion or date of maturity
 whichever is earlier. The FCD holder has the option to convert each FCD
 into one equity share of face value Rs. 10 at a premium of Rs. 735, at
 anytime within 18 months from 28th July, 2008. Unless previously
 converted, each FCD will be compulsorily converted into one equity
 share of Rs. 10 each at a premium of Rs. 735 on 28th January, 2010.
 Upto 31st March, 2009, none of the FCDs have been converted into
 equity shares.
 
 3.  (a) Buildings include Rs. * crores (2008 : Rs. * crores) being the
 value of shares in co-operative housing societies.
 
 (b) Additions to Plant and Machinery include Rs. 9.65 crores (2008 :
 Rs. Nil) on account of capitalisation of interest and Rs. 131.73 crores
 debit (Net) (2008 : Rs. Nil) on account of foreign exchange
 fluctuation.
 
 (c) (i) The depreciation charge for the year excludes :
 
 (a) An amount of Rs. 0.38 crores (2008 : Rs. 0.39 crores), representing
 depreciation on the increase due to revaluation of Land and Buildings
 transferred from the Revaluation Reserve.
 
 (b) An amount of Rs. Nil (2008 : Rs. 0.17 crores), representing
 depreciation on assets used for development work. This expenditure is
 transferred to Development Expenditure and is appropriately amortised.
 
 (ii) The net credit to the Profit and Loss Account consequent to the
 above adjustments to the Revaluation Reserve is Rs. 0.38 crores (2008 :
 Rs. 0.39 crores).
 
 4.  Sundry Debtors others include Rs. 0.59 crores (2008 : Rs. 0.22
 crores), which, in accordance with the terms of the contracts, were not
 due for payment as at 31st March, 2009.
 
 5.  Loans and Advances include :
 
 (a) Fixed/Call deposits with/loans to limited companies Rs. 411.14
 crores (2008 : Rs. 71.44 crores) including Rs. 404.65 crores (2008 :
 Rs.  64.95 crores) with/to subsidiaries.
 
 (b) Amounts paid towards joint development of property Rs. 1.54 crores
 (2008 : Rs. 1.54 crores).
 
 (c) Share Application money pending allotment Rs. Nil (2008 : Rs. 9.33
 crores) to subsidiaries.  * denotes amount less than Rs. 50,000
 
 6. (a) Provision - Others Rs. 167.45 crores (2008 : Rs. 134.38 crores)
 includes provision for contingencies Rs. 8.25 crores (2008 : Rs. 8.16
 crores), provision for warranty Rs. 137.45 crores (2008 : Rs. 106.42
 crores) and provision for diminution in value of certain assets
 substantially retired from active use Rs. 16.91 crores (2008 : Rs.
 17.01 crores). Provision for contingencies is in respect of labour
 demands under negotiations at certain locations of the Company.
 Provision for warranties relates to warranty provision made in respect
 of sale of certain products, the estimated cost of which is accrued at
 the time of sale. The products are generally covered under a free
 warranty period ranging from 6 months to 3 years.
 
 7.  (a) Sales include :
 
 (i) Export benefits Rs. 26.99 crores (2008 : Rs. 28.64 crores).
 
 (ii) Cost of items given for sales promotion/as donations Rs. 0.77
 crores (2008 : Rs. 0.32 crores).
 
 (b) Stock-in-Trade, Property Development Activity, includes completed
 premises Rs. 3.13 crores (2008 : Rs. 3.13 crores), which, pending sale,
 have been given out on leave and licence basis for which fresh
 agreement is under negotiation.
 
 8.  (a) Dividends on other investments includes Rs. 44.89 crores (2008
 : Rs. 15.01 crores) in respect of current investments and Rs. 1.32
 crores (2008 : Rs. Nil) in respect of long term investments.
 
 (b) Interest on Government Securities, Debentures and Bonds includes
 tax deducted at source Rs. 0.11 crores (2008 : Rs. 0.90 crores) and
 comprise Rs. 0.50 crores (2008 : Rs. 0.28 crores) and Rs. 4.26 crores
 (2008 : Rs. 4.59 crores) in respect of long term and current
 investments respectively.
 
 (c) Interest received - others includes tax deducted at source Rs.
 15.11 crores (2008 : Rs. 3.91 crores).
 
 (d) Profit on sale of investments (Net) includes profit on disposal of
 current investments (Net) Rs. 14.73 crores (2008 : Rs. 14.72 crores),
 and profit on disposal of long term investments (Net) Rs. 38.49 crores
 (2008 : Rs. 14.22 crores).
 
 9.  Repairs and Maintenance includes machinery spares consumed Rs.
 26.25 crores (2008 : Rs. 22.19 crores) but does not include items
 included under Consumption of Raw Materials and Bought-out Components
 and amounts charged to salaries and wages (amounts not ascertained).
 
 10. Managerial remuneration for Directors included in the Profit and
 Loss Account is Rs. 6.29 crores (2008 : Rs. 6.54 crores) including
 Directors fees of Rs. 0.09 crores (2008 : Rs. 0.10 crores),
 perquisites Rs. 1.27 crores (2008 : Rs. 1.25 crores) and commission Rs.
 3.16 crores (2008 : Rs. 3.41 crores) (See Schedule XV) and excluding
 charge for gratuity, provision for leave encashment and post retirement
 medical benefit as separate actuarial valuation figures are not
 available. The above perquisites include amortisation of Employees
 Stock Options amounting to Rs.  0.09 crores (2008 : Rs. 0.09 crores).
 
 11. The Company had allotted 55,24,219 ordinary (equity) shares in the
 year ended 31st March, 2002, to the Mahindra & Mahindra Employees
 Stock Option Trust set up by the Company. The trust holds these shares
 for the benefit of the employees and issues them to the eligible
 employees as per the recommendation of the Compensation Committee.
 
 In respect of options granted prior to 29th September, 2006, the equity
 settled options vest one year from the date of the grant and are
 exercisable on specified dates in 3 tranches within a period of 5 years
 from the date of vesting. The number of options exercisable in each
 tranche is between the minimum of 100 and a maximum of 1/3rd 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
 that date.
 
 Options granted on or after 29th September, 2006, vest in 4 equal
 instalments on the expiry of 12 Months, 24 Months, 36 Months and 48
 Months from the date of grant. The options may be exercised on the date
 of vesting and on specified dates within 5 years from the date of
 vesting. Number of vested options exercisable on each specified date is
 subject to a minimum of 50 or number of options vested whichever is
 lower, except in case of the last date of exercise, where the employee
 can exercise all the options vested but not exercised till that date.
 
 The compensation costs of stock options granted to employees are
 accounted by the Company using the intrinsic value method.
 
 12.  The estimated amount of contracts remaining to be executed on
 capital account and not provided for as at 31st March, 2009 is Rs.
 756.32 crores (2008 : Rs. 522.77 crores).
 
 13.  The Commissioner of Central Excise (Adjudication), Navi Mumbai,
 passed an order on 30th March, 2005, confirming the demand made on the
 Company for payment of differential excise duty (including penalty) of
 Rs. 304.11 crores in connection with the classification of Companys
 Commander range of vehicles, during the years 1991-1996. Whilst the
 Company had classified the Commander range of vehicles as 10-seater
 attracting a lower rate of excise duty, the Commissioner of Central
 Excise (Adjudication), Navi Mumbai, has held that these vehicles could
 not be classified as 10-seaters and as such attracted a higher rate of
 excise duty. In earlier proceedings, the Collector of Central Excise,
 Mumbai as also the Collector Central Excise (Appeals), Mumbai had
 upheld the classification of these vehicles as 10-seaters. Similarly,
 certain statutory/expert bodies have also confirmed the concerned
 vehicles to be 10-seater vehicles.
 
 The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has
 also by its order dated 19th July, 2005 upheld this classification. The
 departments Statutory Appeal against this order has been admitted by
 the Supreme Court.
 
 The Commissioner of Central Excise, Nasik passed another order dated
 20th March, 2006 confirming a demand of Rs. 24.75 crores in respect of
 Companys Armada range of vehicles manufactured during the years
 1992-1996, on the same grounds as adopted for Commander range of
 vehicles.
 
 The Company has been legally advised that the aforesaid orders dated
 30th March, 2005 and 20th March, 2006 passed by the Commissioners are
 unsustainable in law. The Tribunal has also given an unconditional stay
 against both the aforesaid orders.
 
 The final hearing in the above matters is awaited.
 
 The Company is confident that it would succeed in the case and the
 Companys stand that the Commander and Armada Vehicles are 10-seater
 vehicles would be upheld. As such, the Company does not expect any
 liability on this account.
 
 14.  Contingent Liability :
 
 (a) Guarantees given by the Company :
 
 Rupees crores
 
                              Amount of guarantees  Outstanding amounts
                                                 against the guarantees
 
                               2009           2008        2009     2008
 
 For employees                 1.05           1.05         *         *
 For other companies         168.46          38.10      163.67    34.37
 
 (b) Claims against the Company not acknowledged as debts comprise of :
 
 (i) Excise Duty, Sales Tax and Service Tax claims disputed by the
 Company relating to issues of applicability and classification
 aggregating Rs. 381.39 crores (Net of Tax : Rs. 270.95 crores) [2008 :
 Rs. 184.03 crores (Net of Tax : Rs. 127.24 crores)].
 
 (ii) Other matters (excluding claims where amounts are not
 ascertainable) : Rs. 21.95 crores (Net of Tax : Rs. 15.16 crores )
 [2008 : Rs. 10.73 crores (Net of Tax : Rs. 7.61 crores)].
 
 (iii) Claims on capital account : Rs. 1.18 crores (2008 : Rs. 1.18
 crores).
 
 (c) Uncalled liability on equity shares partly paid Rs. 10.50 crores
 (2008 : Rs. 10.50 crores).
 
 (d) Taxation matters :
 
 (i) Demands against the Company not acknowledged as debts and not
 provided for, relating to issues of deductibility and taxability in
 respect of which the Company is in appeal and exclusive of the effect
 of similar matters in respect of assessments remaining to be completed
 :
 
 - Income-Tax : Rs. 168.25 crores (2008 : Rs. 134.14 crores).
 
 (ii) Items in respect of which the Company has succeeded in appeal, but
 the Income-tax Department is pursuing/likely to pursue in
 appeal/reference and exclusive of the effect of similar matters in
 respect of assessments remaining to be completed :
 
 - Income-Tax matters : Rs. 58.63 crores (2008 : Rs. 37.96 crores)
 
 - Surtax matters : Rs. 0.13 crores (2008 : Rs. 0.13 crores)
 
 (e) Bills discounted not matured Rs. 59.55 crores (2008 : Rs. 61.22
 crores).
 
 (f) Counter Guarantees to banks Rs. 0.64 crores (2008 : Nil).
 
 15.  Research and Development expenditure :
 
 (a) In recognised Research and Development units :
 
 (i) debited to the Profit and Loss Account, including certain
 expenditure based on allocations made by the Company, aggregate Rs.
 220.09 crores (2008 : Rs. 177.89 crores) [excluding depreciation and
 amortisation of Rs. 56.19 crores (2008 : Rs. 39.21 crores)].
 
 (ii) Development Expenditure incurred during the year Rs. 128.94 crores
 (2008 : Rs. 53.77 crores).
 
 (iii) Capitalisation of assets Rs. 15.64 crores (2008 : Rs. 33.13
 crores).
 
 * denotes amounts less than Rs. 50,000
 
 (b) In other units :
 
 (i) debited to the Profit and Loss Account, including certain
 expenditure based on allocations made by the Company, aggregate Rs.
 18.69 crores (2008 : Rs. 13.63 crores) [excluding depreciation and
 amortisation of Rs. 1.50 crores (2008 : Rs. 1.09 crores)].
 
 (ii) Development Expenditure incurred during the year Rs. 7.50 crores
 (2008 : Rs. Nil).
 
 (iii) Capitalisation of assets Rs. 3.56 crores (2008 : Rs. 1.55
 crores).
 
 16.  The net difference in foreign exchange loss debited to the Profit
 and Loss Account is Rs. 237.20 crores (2008 : Gain of Rs. 13.45
 crores).
 
 17.  Exceptional items of Rs. 10.27 crores (2008 : Rs. 172.73 crores)
 comprise of :
 
 (a) Surplus on transfer of Logistics business Rs. 10.27 crores (2008 :
 Rs. Nil).
 
 (b) In the previous year, gain of Rs. 172.73 crores arising from the
 schemes of arrangement (merger) between the Companys subsidiaries
 Mahindra Stokes Holding Company Limited (MSHCL), Mahindra Forgings
 Overseas Limited (MFOL) and Mahindra Forgings Mauritius Limited (MFML)
 with Mahindra Forgings Limited (MFL); and between Plexion (India)
 Private Limited with Mahindra Engineering Design and Development
 Company Limited (MEDDCL) approved by the High Court of Bombay. The
 schemes are operative from the appointed date of 1st April, 2007.
 Consequently MFL became a subsidiary of the Company and MSHCL, MFOL,
 MFML and Plexion (India) Private Limited, ceased to be subsidiaries of
 the Company. In compliance with Accounting Standard (AS) 13 -
 Accounting for investments, the Company is required to value the
 additional shares received of MFL and MEDDCL, by referencing them to
 the fair value of the shares of MSHCL, MFOL, MFML and Plexion (India)
 Private Limited respectively, resulting in the gain mentioned above.
 
 18.  Scheme of Amalgamations :
 
 (a) Pursuant to the Scheme of Amalgamation (the scheme) of Mahindra
 Holdings and Finance Limited (MHFL) a wholly owned subsidiary of the
 Company, with the Company as sanctioned by the Honourable High Court of
 Bombay vide its order dated 18th July, 2008, the entire business and
 all the assets and liabilities, duties and obligations of MHFL were
 transferred to and vested in the Company, from 1st February, 2008 (the
 appointed date). The scheme became effective on 11th August, 2008.
 
 The accounting for the amalgamation was done as per the pooling of
 interest method as modified under the scheme and approved by the
 Honourable High Court and the same has been given effect to in the
 financial statements as under :
 
 (i) The assets, liabilities and reserves of MHFL were recorded in the
 books of the Company, at their book values.
 
 (ii) The Company transferred, out of its total holding in MHFL as on
 1st February, 2008, 5,13,10,208 shares to a trust, to hold the shares
 and any additions or accretions thereto exclusively for the benefit of
 the Company and the Company has under the scheme issued to the trust
 one share in itself for every four shares held by it in MHFL. The
 balance shares held by the Company in MHFL were cancelled.
 
 (iii) The Company credited to the existing Investment Fluctuation
 Reserve Account Rs. 129.61 crores, being the excess of the value of the
 net assets of MHFL over the face value of the shares allotted, the face
 value of the shares cancelled and the amount of General Reserve and
 Profit and Loss Account of MHFL transferred to the Company.
 
 MHFL was engaged in the business of investing and financing.
 
 The MHFL profit after tax of Rs. 30.73 crores for the period 1st
 February, 2008 to 31st March, 2008, has been recognised in the current
 year and disclosed separately in the Profit and Loss Account.
 
 Had the scheme not prescribed the above treatment, the General Reserve
 of the Company would have been higher by Rs. 129.61 crores and the
 Investment Fluctuation Reserve Account lower by the same amount.
 
 (b) Pursuant to the Scheme of Amalgamation (the scheme) of Punjab
 Tractors Limited (PTL) a subsidiary of the Company, with the Company
 sanctioned by the Honourable High Court of Bombay and the Honourable
 High Court of Punjab & Haryana vide their orders dated 9th January,
 2009 and 16th January, 2009 respectively, the entire business and all
 the assets and liabilities, duties and obligations of PTL were
 transferred to and vested in the Company, from 1st August, 2008 (the
 appointed date). The scheme became effective from 16th February, 2009.
 
 The accounting for the amalgamation was done as per the pooling of
 interest method as modified under the scheme and approved by the
 Honourable High Courts and the same has been given effect to in the
 financial statements as under :
 
 (i) The assets, liabilities and reserves of PTL were recorded in the
 books of the Company, at their book values.
 
 (ii) The Company transferred its entire holding of 3,92,70,165 shares
 as on 1st August, 2008 in PTL to a trust, to hold the shares and any
 additions or accretions thereto exclusively for the benefit of the
 Company. The Company has under the scheme issued one equity share of
 Rs. 10 each for every three equity shares of Rs. 10 each held in PTL to
 the shareholders of PTL.
 
 (iii) The Company credited to the existing Investment Fluctuation
 Reserve Account Rs. 677.00 crores, being the excess of the value of the
 net assets of PTL over the face value of the shares allotted.
 
 PTL was engaged in the business of manufacture and sale of tractors and
 combine harvesters.
 
 Had the scheme not prescribed the above treatment, the General Reserve
 and the Profit and Loss Account of the Company would have been higher
 by Rs. 646.70 crores and Rs. 30.00 crores respectively, there would
 have been a Preference Share Redemption Reserve of Rs. 0.30 crores and
 the Investment Fluctuation Reserve Account would have been lower by Rs.
 677.00 crores.
 
 (c) On account of the above mergers, the figures for current year are
 not strictly comparable with that of the previous year.
 
 19.  The outstanding derivative instruments as on 31st March, 2009 :
 
 The Company takes forward contracts to hedge exposures arising out of
 trade payables in foreign currency. Such outstanding forward contracts
 are booked for fixing exchange rates between cross currencies like
 JPY/US$. The amount of hedges is Rs. Nil (2008 : JPY 50.00 crores).
 
 The Company has taken forward contracts to hedge exposures arising out
 of trade receivables part by forward contracts US$ 60.30 crores (2008 :
 AUD 0.35 crores, EUR 1.00 crore and US$ 19.40 crores), part by Range
 Forwards US$ 10.20 crores (2008 : Nil) and partly US$ 33.20 crores
 (2008 : US$ 33.75 crores and EUR 1.20 crores) by a derivative structure
 in the form of ‘strips.
 
 The foreign currency exposures not hedged by derivative instrument or
 otherwise as on 31st March, 2009 are – Receivables of AUD 0.38 crores,
 RMB 0.01 crores, SEK * crores and Payables of US$ 2.71 crores, EUR 0.03
 crores, GBP * crores, CHF * crores, JPY 2.38 crores, ZAR * crores, SAR
 0.04 crores, SGD * crores, DKK * crores, NZD * crores (2008 :
 Receivables of JPY 4.25 crores, RMB * crores and Payables of AUD 0.04
 crores, CHF * crores, EUR 0.61 crores, GBP 0.05 crores, SEK 0.06
 crores, SGD 0.02 crores, US$ 7.84 crores, ZAR 0.12 crores).
 
 The Company has outstanding borrowings of JPY 1,126.44 crores and US$
 9.45 crores (2008 : JPY 1,091.74 crores and US$ 11.45 crores) as
 Foreign Currency Borrowings. The borrowing of JPY 450.24 crores (2008 :
 JPY 509.44 crores) has been completely hedged using cross currency swap
 structure fixing the liability into a full fledged rupee liability. The
 borrowing of JPY 676.20 crores (2008 : JPY 582.30 crores) has been
 fixed to a US$ liability using a cross currency swap structure. The
 borrowing of US$ 2.00 crores (2008 : US$ 2.00 crores) has been hedged
 using a forward cover.
 
 The Company had made an issue of US$ 20.00 crores in the form of
 Foreign Currency Convertible Bonds in April, 2006. Out of this issue,
 Bonds of value US$ 18.95 crores (2008 : US$ 20.00 ) are outstanding and
 have not been hedged.
 
 * denotes amounts less than 50,000 of respective currency.
 
 19.  Additional information pursuant to the provisions of paragraphs
 3(i)(a) and (ii), 4C and 4D of Part II of Schedule VI to the Companies
 Act, 1956 - See Schedule XVI. Previous years figures are indicated
 below the current years figures.
 
 20.  Additional information pursuant to the provisions of Part IV of
 Schedule VI to the Companies Act, 1956 - See Schedule XVII.
 
 21.  Previous years figures have been regrouped/restated wherever
 necessary.