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Notes to Accounts of HMT Ltd.

Mar 31, 2015

1. (Rs. in lakhs )

Note As at As at No Particulars 31-03-2015 31-03-2014

2. CONTINGENT LIABILITIES:

The Company is contingently liable for:

39A Claims against the Company not acknowledged as debts

I. Tax related claims pending in appeal

i) Excise Duty 2.48 2.48

ii) Sales Tax 217.50 217.50

II. Non receipt of related Forms against levy of concessional Sales Tax 629.54 940.93

III. Employee related claims relating to Lockouts, Back wages, Incentive & Annual bonus, etc., 33.06 10.04 pending adjudication, to the extent ascertainable

IV. Various cases relating to defective product, accident causing injuries to third parties, claims relating to supply of materials etc. 300.74 159.64

V Liability towards interest, penalty/damages as per 14B of 27.05 23.89 Employees Provident Fund and Misc. provision Act, 1952

3. The Company had deposited Rs.16.00 Lakhs before II Additional Chief Judge, City Civil Court, Hyderabad against the claim made by M/s. Medvin Hospital Hyderabad out of said claim the company has acknowledged only Rs. 2,69,433/- as debts 13.31 13.31

4. Refund to Andhra Pradesh State Government based on the outcome of the appeal preferred by the Government in EP No. 124/2006 in O. S. 794/92 6.47 6.47

5. The GOI had released a Plan Assistance of Rs. 200 lakhs to the Company during March 2007 to meet the Capital Expenditure of HMT Watches Ltd, the wholly owned Subsidiary, in the form of Equity (Rs.100 lakhs) & Loan (Rs.100 lakhs). In view of the non utilization of the funds by the Subsidiary within the stipulated period, GOI had instructed the Company during December 2009 for refund of the total Plan Assistance of Rs. 200 lakhs. Accordingly, the Company has refunded the Loan amount of Rs.100 lakhs to GOI during February 2010. However, with regard to refund of Equity portion, since the Company has already issued 10,00,000 Equity Shares of Rs.10/- each (Rs.100 lakhs) in favour of President of India during April 2007, as per the terms of GOI sanction, the same could not be carried out, as it would amount to reduction in Share Capital requiring the approval of the Share Holders and completion of other statutory formalities as per the Companies Act and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

6. Preference Share Capital

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), a Subsidiary Company, during March 2007, had accorded sanction for cash infusion ofRs. 44300 lakhs in the form of 3.5% Preference Share Capital which was routed through the Company for investment in the Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010 out of sale of surplus immovable Properties of HMT-MTL.

Since the title deeds in respect of the identified immovable properties are not mutated in the name of the HMT- MTL, the sale of these properties have been approved by the Government as part of the Revival Plans of the Company (HMT Ltd). The Preference Share Capital will be redeemed upon sale of immovable property.

7. Advances include

8. Previous year''s figures have been reclassified wherever necessary to conform to this year''s classification.

9. EMPLOYEE BENEFITS:

The Gratuity has been provided by the Company under a Defined Benefit Plan to cover the eligible employees, the liability being determined on actuarial valuation done by LIC using Projected Unit Credit Method. The Company has taken a Policy under Group Gratuity Scheme with LIC and annual contributions are made to the extent required, to the separate Trust constituted and administered by the Life Insurance Corporation of India under which the coverage is limited to Rs. 50,000/- per eligible employee and the balance is being retained in the books to meet any additional liability accruing thereon.

The provision for gratuity as on 31 -03-2015 for the balance amount, based on the above assumptions for over and above the amount covered under the LIC policy in respect of the Company is Rs. 6857.34 lakhs and additional provision made during the year for full coverage (based on salary at year end) in excess of Rs. 50000/- per employee based on actuarial valuation by LIC Rs. 1747.13 lakhs.

The provision of Rs. 989.50 lakhs towards Earned leave encashment and Rs. 368.45 Settlement allowance is carried in the books as on 31.3.2015 to cover the eligible employees based on the actuarial valuation done by qualified Actuary. However, an amount of Rs. 244.51 lakhs and Rs. 54.04 lakhs respectrively has been provided during the year.


Mar 31, 2014

LAND

1 The Company is in possession of gift land located at Pinjore, Kalamassery and Hyderabad gifted by the respective State Governments admeasuring 822.67 acres, 30 acres and 660.75 acres respectively, nominally valued at Rs. 1/- each. The mutation of Title of land in the name of the Company is yet to be done.

2 The Company is in possession of leasehold land measuring 30 acres at Aurangabad out of which 5 acres of land has been encroached upon. Further, legal action is being pursued for restoration of the encroached land.

3 In respect of lands at Hyderabad, an area admeasuring 28.40 acres was leased to various Government Departments at Hyderabad. Pending registration of transfer, the Company has agreed to release 14.20 acres of land in exchange for 14.20 acres of land under an exchange agreement with a State Public Sector Undertaking. The Company has also leased 1000 sq. yards of land, for which lease deed was executed and agreed to release another two acres of land to AP Postal Department in Hyderabad, the execution of which is pending. The Company has obtained stay from the Andhra Pradesh High Court, against repossession of 106 acres and 35 guntas of land by the Government of Andhra Pradesh. No finality has been reached on the proposal for surrender of 300 acres of land owned by the Company at Hyderabad, to the Government of Andhra Pradesh, in lieu of payment of part sale consideration and issue of marketable title for the balance land.

4 In respect of lands at Pinjore, Haryana, the State Government has issued an order for resumption of 446 acres of unutilised land, against which the Company has obtained a stay from the High Court of Punjab & Haryana against the said resumption order and the same is continuing. The Company has agreed and transferred about 5 acres of land to Haryana Irrigation department at their request for construction of Kaushalya Dam and compensation for the same is yet to be recovered pending mutation of title of land in Company''s name, which is a subject matter of legal proceedings before the Punjab & Haryana High Court. Further, National Highways Authority of India has acquired about 11.73 acres of land for road widening project and compensation for the acquired land is awaited as the matter regarding mutation of title of land in Company''s name is pending before the Punjab & Haryana High Court.

OTHERS

5 In one of the units, some of the assets grouped under Plant & Machinery with WDV Rs. 23/-, Furniture, Fixtures & Office Applicances with WDV Rs. 22/- were burnt during fire and transport vehicle with WDV Re. 1/-was lost due to theft, to be written off.

2 Estimated amount of contracts remaining to be executed on capital account and not provided for

3 The GOI had released a Plan Assistance of Rs. 200 lakhs to the Company during March 2007 to meet the Capital Expenditure of HMT Watches Ltd, the wholly owned Subsidiary, in the form of Equity (Rs. 100 lakhs) & Loan (Rs. 100 lakhs). In view of the non utilisation of the funds by the Subsidiary within the stipulated period, GOI had instructed the Company during December 2009 for refund of the total Plan Assistance of Rs. 200 lakhs. Accordingly, the Company has refunded the Loan amount of Rs. 100 lakhs to GOI during February 2010. However, with regard to refund of Equity portion, since the Company has already issued 10,00,000 Equity Shares of Rs. 10 each (Rs. 100 lakhs) in favour of President of India during April 2007, as per the terms of GOI sanction, the same could not be carried out, as it would amount to reduction in Share Capital requiring the approval of the Share Holders and completion of other statutory formalities as per the Companies Act, 1956 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

4 Preference Share Capital

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), a Subsidiary Company, during March 2007, had accorded sanction for cash infusion of Rs. 44300 lakhs in the form of 3.5% Preference Share Capital which was routed through the Company for investment in the Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010 out of sale of surplus immovable properties of HMT-MTL.

Since the title deeds in respect of the identifild immovable properties are not mutated in the name of the HMT-MTL, the sale of these properties have been approved by the Government as part of the Revival Plans of the Company (HMT Ltd) The Preference Share Capital will be redeemed upon sale of immovable property.

5 Loan from Bank

The Compny had availed Loan from Dena Bank and the same has been settled under one time settlement (OTS) for Rs. 98650000/- by sale of Land to the Bank during the year 2003-04.However, the sale could not be completed due to certain issues in registering the sale of the land. In view of this, the Bank approached the Hon''ble sole arbitrator in the permanent Machinery of aribitration (PMA) set up by GOl in the DPE. Asstipulated in the award of PMA dated 29-10-2013, the Company is liable to pay simple interest on the Loan amount @ 11.50% p.a. from 1.1.2002 to 31.5.2013 and @ 15% p.a. from 1.6.2013, till the date of settlement. Accordingly, the Bonds of Directors of the Compan have approved for reinstatement of Land at original cost in the books of the company, reversal of the income accounted during the year 2003-04 and also reinstatement of loan to the extent of Rs. 98650000/- originally due to Dena Bank.

6 Deferred Tax

Accounting for Taxes as per Accounting Standard-22. As the Company is having Deferred Tax Asset for the year and there is no virtual certainity of realisation of the asset in the near future, the Deferred Tax Asset has not been recognised for the year.

7 Balances under ‘Trade Receivables'' , ‘Loans & Advances'', ‘Trade Payables'' and ‘Other Current Liabilities'' are subject to confirmation, although confirmation has been sought in most of the cases.

8 The GOI has accorded approval for Revival for Restucturing plan of the Company on 18th April 2013 and the compnay has received funds of Rs. 21700 lakhs by way of 8% preference share capital and Rs. 1146.00 lakhs by way of 7% bridge loan buring the year 2013-14. As per the approved plan GOI has converted Rs. 44374.15 lakhs of GOI loans into equity and waiver of interest on GOI loans of Rs. 20187.24 lakhs upto 31.3.2012 and Guarantee fee of Rs. 375.92 lakhs. Futher, interest beyond 31.3.2012 is also waived off. The waivers have been considered as exceptional Items in the statement of profit and loss during the year 2013-14.

9 Previous year''s figures have been reclassified wherever necessary to conform to this year''s classification.


Mar 31, 2013

1 Share Application Money

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), a Subsidiary Company, during March 2007, had accorded sanction for cash infusion of Rs. 44300 lakhs in the form of 3.5% Preference Share Capital which was routed through the Company for investment in the Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010. However shares have not been alloted in favour of President of India pending registration of increase in the Authorised Share Capital with ROC. As per the Revival Plan sanction, the Preference Share Capital had to be redeemed from out of sale of surplus immovable Properties of HMT-MTL. However, since the title deeds in respect of the identified immovable properties are not mutated in the name of the HMT-MTL, the sale of these properties will have to be approved by the Government as part of the Revival Plans of the Company (HMT Ltd) which is under consideration of the Government. Upon approval of the Government to the Revival Plan, the required funds will be raised through the sale of the immovable properties and the Preference Share Capital will be redeemed. Pending communication from GOI, the Company has continued to disclose the Preference Share Capital as was done in the previous year.

2 Bonds Redemption Reserve as required u/s 117C of the Companies Act, 1956 is not made in respect of 3 year HMT Bonds-2001 issued by the Company in the absence of Profit.

3 Deferred Tax Asset/Liability

Accounting for Taxes as per Accounting Standard-22. As the Company is having Deferred Tax Asset for the year and there is no virtual certainity of realisation of the asset in the near future, the Deferred Tax Asset has not been recognised for the year.

4 Other liabilities includes unspecified / excess credits in bank accounts

5 Balances under ''Trade Receivables'', ''Loans & Advances'', ''Trade Payables'' and ''Other Current Liabilities'' are subject to confirmation, although confirmation has been sought in most of the cases.

6 Previous year''s figures have been reclassified wherever necessary to conform to this year''s classification.

7 Previous year''s figures have been reclassified wherever necessary to conform to this year''s classification.


Mar 31, 2012

(Rs.in lakhs)

Note Particulars As at As at No. 31-03-2012 31-03-2011

1. The Company is contingently liable for:

1.1 Claims against the Company not acknowledged as debts

A. Tax related claims pending in appeal

i) Excise Duty 2.48 2.48

ii) Sales Tax 271.87 271.87

B. Employee related claims relating to Lockouts, Back wages Incentive & Annual bonus, etc., pending adjudication, to the extent ascertainable 14.72 26.23

C. Others

Various cases relating to defective product, accident causing injuries to third parties, claims relating to supply of materials etc. 371.64 514.83

1.2 Guarantees/Counter Guarantees issued 1939.69 1966.46

1.3 Additional Bonus, if any, for the year 1985-86 1.86 2.20

1.4 Liability towards interest, penalty/damages as per 7Q and 14B of 50.31 - Employees Provident Fund and Misc. provision Act

1.5 Non receipt of related Forms against levy of concessional

Sales Tax 739.02 789.41

The uncertainties relating to outflow and the possibility of any reimbursement of the above is not ascertainable

2. Estimated amount of contracts remaining to be executed on capital account and not provided for - 3.46

3. Balances under Trade Receivables' , 'Loans & Advances', 'Trade Payables' and 'Other Current Liabilities' are subject to confirmation, although confirmation has been sought in most of the cases.

4 Previous year's figures have been reclassified wherever necessary to confirm to this year's classification.


Mar 31, 2011

1 Segment Reporting as per Accounting Standard-17(AS-17)

The Company is carrying on the business of manufacturing and selling Tractors and Food Processing Machines. The Segment Reporting as per AS-17 is not applicable to HMT Limited, as the transactions of Food Processing Machinery is less than 10% of Tractor Business.

(Rs. in Thousands)

As at As at

31.03.2011 31.03.2010

2 The Company is contingently liable for:

2.1 Claims against the Company not acknowledged as debts

A. Tax related claims pending in appeal

i) Excise Duty 2,48 2,48

ii) Sales Tax 2,71,87 2,71,87

B. Employee related claims relating to Lockouts, Back wages Incentive & Annual bonus, etc., pending adjudication, to the extent ascertainable 26,23 55,36

C. Others

Various cases relating to defective product, accident causing injuries to third parties, claims relating to supply of materials etc. 5,14,83 4,22,77

2.2 Guarantees/Counter Guarantees issued 19,66,46 18,70,38

2.3 Additional Bonus, if any, for the year 1985-86

(Refer Note No.8.1) 2,20 2,50

2.4 Non receipt of related Forms against levy of concessional Sales Tax 7,89,41 6,55,66

3.1 The GOI had released a Plan Assistance of Rs.2.00 Crore to the Company during March 2007 to meet the Capital Expenditure of HMT Watches Ltd, the wholly owned Subsidiary, in the form of Equity (Rs.1.00 Crore) & Loan (Rs.1.00 Crore). In view of the non utilisation of the funds by the Subsidiary within the stipulated period GOI had instructed the company during December 2009 for refund of the total Plan Assistance of Rs.2.00 Crore. Accordingly, the Company has refunded the Loan amount of Rs.1.00 Crore to GOI during February 2010. However, with regard to refund of Equity portion, since the Company has already issued 10,00,000 Equity Shares of Rs.10 each (Rs.1.00 Crore) in favour of President of India during April 2007, as per the terms of GOI sanction, the same could not be carried out, as it would amount to reduction in Share Capital requiring the approval of the Share Holders and completion of other statutory formalities as per the Companies Act, 1956 and applicable rules in this regard, and the same has been communicated to GOI. Further instructions are awaited from GOI on the same.

4.3 Share Application Money

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), a Subsidiary Company, during March 2007, had accorded sanction for cash infusion of Rs.443.00 Crores in the form of 3.5% Preference Share Capital which was routed through the Company for investment in the Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010. However shares have not been alloted in favour of President of India pending registration of increase in the Authorised Share Capital with ROC.

As per the Revival Plan sanction, the Preference Share Capital had to be redeemed from out of sale of surplus immovable Properties of HMT-MTL. However, since the title deeds in respect of the identified immovable properties are not mutated in the name of the HMT-MTL, the sale of these properties will have to be approved by the Government as part of the Revival Plans of the Company (HMT Ltd) which is under consideration of the Government. Upon approval of the Government to the Revival Plan, the required funds will be raised through the sale of the immovable properties and the Preference Share Capital will be redeemed. Pending communication from GOI, the Company has continued to disclose the Preference Share Capital as was done in the previous year.

4 Bonds Redemption Reserve as required u/s 117C of the Companies Act, 1956 is not made in respect of 3 year HMT Bonds-2001 issued by the Company in the absence of Profit.

5 Deferred Tax Asset/Liability

Accounting for Taxes as per Accounting Standard-22. As the Company is having Deferred Tax Asset for the year and there is no virtual certainity of realisation of the asset in the near future, the Deferred Tax Asset has not been recognised for the year.

6 Balances under 'Sundry Debtors', 'Loans & Advances', and 'Current Liabilities' are subject to confirmation, although confirmation has been sought in most of the cases.

7 Previous year's figures have been reclassified wherever necessary to conform to this year's classification


Mar 31, 2010

1.1 Share Application Money

The Government of India while approving the Revival Plan of HMT Machine Tools Ltd (HMT-MTL), the Subsidiary Company had accorded sanction for cash infusion of Rs.443.00 Crores in the form of 3.5% Preference Share Capital which was routed through the Company for investment in the Preference Share Capital in the Subsidiary, to be redeemed after 3 years i.e. 31.3.2010.

As per the Revival Plan sanction, the Preference Share Capital had to be redeemed from out of sale of surplus immovable Properties of HMT-MTL. Accordingly, an Asset Sale Committee has been constituted in terms of BIFR order and as per their guidelines to dispose off surplus idendified assets, since the Subsidiary is under BIFR. The process of sale of surplus immovable properties will take some more time. Since the tenure of 3 year Preference Share Capital invested by GOI has been completed on 31.3.2010, the Company has requested the Administrative Ministry to grant extension of time for one more year for allotment/redemption of the Preference Share Capital & the same is under the active consideration of GOI. Pending communication from GOI, the Company has continued to disclose the Preference Share Capital as was done in the Previous year.

2 Deferred Tax Asset/Liability

Accounting for Taxes as per Accounting Standard-22. No Deferred Tax balance as at March 31, 2009, since the opening balance of Deferred Tax Asset of Rs.15911 thousands was reversed in view of c/f business losses and unabsorbed depreciation, as no virtual certainity of realisation of Asset in the near future. Hence, Deferred Tax Asset has not been recognised during the year.

 
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