Voltas

1.  SHARE CAPITAL
 
 Equity Share Capital includes :
 
 (a) 9,76,61,300 shares of Re.1 each allotted as fully paid bonus shares
 by capitalising Rs.80.82 Lakhs out of the Securities Premium Account,
 Rs.100 Lakhs from Capital Reserve and Rs.795.79 Lakhs out of General
 Reserve.
 
 (b) 1,77,29,040 shares of Re.1 each-allotted to the erstwhile
 shareholders of Tata-Merlin & Gerin Ltd. (TMG), The National Electrical
 Industries Ltd. (NEI), Volrho Ltd., Wandleside National Conductors Ltd.
 (WNC) and Hyderabad Allwyn Ltd. (HAL) consequent upon the amalgamation
 of these companies with the Company.
 
 (c) 11,97,84,000 shares of Re.1 each allotted to the holders of
 Convertible Part A of Rs.60 of the 14% Secured Redeemable Partly
 Convertible Debentures 1992-99 on compulsory conversion thereof into
 equity shares.
 
 2.  INVESTMENTS
 
 (a) Under a loan agreement for Rs.60 Lakhs (fully drawn and
 outstanding) entered into between Agro Foods Punjab Limited (AFPL) and
 the Punjab State Industrial Development Corporation Limited (PSIDC),
 the Company has given an undertaking to PSIDC that it will not dispose
 off its shares in AFPL till the monies under the said loan agreement
 between PSIDC and AFPL remain due and payable by AFPL to PSIDC. During
 1998-99, the Company had transferred its beneficial rights in the
 shares of AFPL.
 
 (b) In respect of the Companys investment in 2640 equity shares of
 Reliance Industries Limited, there is an Injunction Order passed by the
 Court in Kanpur restraining the transfer of these shares. The share
 certificates are, however, in the possession of the Company. Pending
 disposal of the case, dividend on these shares has not been recognised.
 
 3.  SALES AND SERVICES
 
 With regard to long term Construction Contracts undertaken, the amount
 of net revenue recognised is Rs.212332.80 Lakhs (2007-2008:
 Rs.126317.18 Lakhs).
 
 4.  COST OF SALES, SERVICES AND EXPENSES
 
 (i) Opening and Closing Stock- In - Trade excludes WIP for Long Term
 Contracts Rs.268742.82 Lakhs (1-4-2007 : Rs.178019.87 Lakhs) and Rs.
 476378.73 Lakhs (31-3-2008: Rs. 268742.82 Lakhs), respectively.
 
 (ii) (a) The Company makes contribution towards provident funds, a
 defined benefit retirement plan, and towards superannuation fund, a
 defined contribution retirement plan for qualifying employees. These
 funds are administered by the trustees appointed by the Company. Under
 the schemes, the Company is required to contribute a specified
 percentage of salary to the retirement benefit schemes to fund the
 benefit.
 
 (b) The Company makes annual contribution to Voltas Limited Employees
 Gratuity Fund, which is a funded defined benefit plan for qualifying
 employees. The scheme provides for lumpsum payment to vested employees
 at retirement, death while in employment or on termination of
 employment as per the Companys Gratuity Scheme. Vesting occurs upon
 completion of 5 years of service.
 
 The Company is also providing post retirement medical benefits to
 qualifying employees.
 
 The most recent actuarial valuations of plan assets and the present
 values of the defined benefit obligations were carried out as at 31st
 March, 2009. The present value of the defined benefit obligation and
 the related current service cost and past service cost are measured
 using the Projected Unit Credit Method.
 
 The following tables set out the funded status and amounts recognised
 in the Companys financial statements as at 31st March, 2009 for the
 Defined Benefit Plans other than Provident Fund. According to the
 Management, in consultation with the actuary, actuarial valuation
 cannot be applied to reliably measure provident fund liabilities in the
 absence of guidance from the Actuarial Society of India.
 
 5.  Estimated amount of contracts remaining to be executed on capital
 account and not provided for : Rs.1544.54 Lakhs (31-3-2008: Rs.2550.25
 Lakhs). Advance paid against such contracts: Rs.706.25 Lakhs
 (31-3-2008: Rs.1742.71 Lakhs).
 
 6.  Contingent liabilities not provided for:
 
 (a) Guarantees on behalf of other companies:
 
 Limits Rs.4692.93 Lakhs (31-3-2008 : Rs. 3104.75 Lakhs) against which
 amount outstanding was Rs. 2076.26 Lakhs (31-3-2008 : Rs. 1372.68
 Lakhs) against which a provision has been made for contingencies Rs.
 583.59 Lakhs (31-3-2008: Rs.583.59 Lakhs).
 
 (b) Claims against the Company not acknowledged as debts:
 
 In respect of various matters aggregating Rs.22615.80 Lakhs (31-3-2008
 : Rs.20198.81 Lakhs), net of tax Rs.14928.69 Lakhs (31-3-2008 :
 Rs.13333.25 Lakhs) against which a provision has been made for
 contingencies Rs.1125 Lakhs (31-3-2008 : Rs.1125 Lakhs). In respect of
 a contingent liability of Rs.4502.84 Lakhs (31-3-2008 : Rs.4502.84
 Lakhs), the Company has a right to recover the same from a third party.
 
 7.  In respect of guarantees aggregating Rs.88991.07 Lakhs (31-3-2008
 : Rs.48292.49 Lakhs) issued by Banks at the request of the Company in
 favour of third parties, the Company has given security by way of
 hypothecation of a part of tangible movable assets, book debts and
 stocks.
 
 8.  Amounts paid by the Company to Directors as remuneration for
 services rendered in any capacity (See Schedule O for Computation of
 Net Profit in accordance with Sections 198 and 309 of the Companies
 Act, 1956):
 
 9.  In respect of certain property transactions, conveyance deed are
 pending, as under:
 
 (a) In terms of agreement dated 30th September, 1998, Companys
 Refrigerators manufacturing facility at Nandalur was transferred on a
 running business / going concern basis to Electrolux Voltas Limited
 (EVL) on the close of the business hours on 31 st March, 1999. In
 respect of land for the Nandalur Plant, Deed of Conveyance is pending
 completion.
 
 (b) The Company had accounted in 1999-2000, the profit on transfer of
 development rights of Rs.734.12 Lakhs in respect of property at
 Lalbaug, Mumbai for which agreement for assignment was executed and
 clearance from the Income Tax Department under Section 269 UC of the
 Income Tax Act, 1961 was received but for which conveyance formalities
 are pending completion.
 
 (c) The Company had accounted in 2003-2004, the profit on transfer of
 development rights of Rs.1735.95 Lakhs in respect of property at Thane
 and Rs.2145.53 Lakhs in respect of property at Pune for which
 agreements were executed and consideration received but for which
 conveyance formalities are pending completion.
 
 (d) The Company had accounted in 2004-2005, the profit on transfer of
 development rights of Rs.505.53 Lakhs in respect of property at Thane
 for which agreement was executed and consideration received but for
 which conveyance formalities are pending completion.
 
 (e) The Company had accounted in 2006-2007, the profit on transfer of
 development rights in respect of Upvan land and Henkel Switchgear
 Limited approach land at Thane for which agreements were executed and
 consideration received (Rs.2070 Lakhs and Rs.223.40 Lakhs,
 respectively) but for which conveyance formalities are pending
 completion.
 
 (f) The Company had accounted in 2007-2008, the profit on transfer of
 development rights in respect of land adjoining Simtools at Thane for
 which an Agreement was executed and consideration received (Rs.919.96
 Lakhs) but for which conveyance formalities are pending completion.
 
 10.  Segmental Reporting:
 
 Segment information has been presented in the Consolidated Financial
 Statements as permitted by Accounting Standard (AS-17) on Segment
 Reporting as notified under the Companies (Accounting Standards) Rules,
 2006.